Exhibit 4.6
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ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") dated as of _______________,
2001 is by and between Wentworth I, Inc., a Delaware corporation (the "Company")
and Corporate Stock Transfer, Inc., a Colorado corporation (the "Escrow Agent").
RECITALS
WHEREAS, the Company is offering for sale to the public 50,000 shares (the
"Shares") of Common Stock, par value $0.01 per share, of the Company, at a price
of $1.00 per share;
WHEREAS, the Shares are being offered on a "best efforts, all or none"
basis in accordance with the terms and conditions set forth in the prospectus
dated __________, 2001 (the "Prospectus") included in the Company's Registration
Statement on Form SB-2 (SEC File No. 333-_____), as amended (the "Registration
Statement");
WHEREAS, the public offering of the Shares is subject to and is being
conducted in accordance with Rule 419 of the Securities Act of 1933, as amended
(the "Securities Act") pertaining to public offerings by companies commonly
referred to as "blank check companies";
WHEREAS, the public offering of the Shares commenced on the date of the
Prospectus and will end the earlier of the receipt and acceptance by the Company
of subscriptions for 50,000 Shares or 90 days after the date of the Prospectus;
WHEREAS, subscribers for Shares shall deposit with the Escrow Agent, by
check or wire transfer payment, the aggregate subscription price for the Shares
subscribed for;
WHEREAS, all funds representing the subscription price of Shares subscribed
for shall be deposited and held in an escrow account (the "Escrow Account")
established and maintained by the Escrow Agent;
WHEREAS, the Company desires to appoint the Escrow Agent as the escrow
agent for the Escrow Account, on the terms and conditions set forth herein in
order to comply with the requirements of Rule 419 of the Securities Act and the
requirements of Section 11-51-302(6) of the Colorado Securities Act;
WHEREAS, if subscriptions for 50,000 Shares have not been received and
accepted by the Company and $50,000 of funds have not been deposited into the
Escrow Account within 90 days after the date of the Prospectus, all funds and
interest, if any, shall be returned promptly to the subscribers;
WHEREAS, if subscriptions for 50,000 Shares have been received and accepted
by the Company and $50,000 of funds have been deposited into the Escrow Account
within 90 days after the date of the Prospectus, the Company will deposit into
the Escrow Account stock certificates in the name of each subscriber
representing the number of Shares purchased from the Company;
WHEREAS, if subscriptions for 50,000 Shares have been received and accepted
by the Company and $50,000 of funds have been deposited into the Escrow Account
within 90 days after the date of the Prospectus, the escrowed funds and the
stock certificates deposited by the Company shall be held in the Escrow Account
for a period thereafter of up to 18 months after the date of the Prospectus (the
"Post-Offering Period") until the escrowed funds and the escrowed stock
certificates are released and delivered in accordance with the terms and
conditions set forth herein;
WHEREAS, the escrowed Shares being held in the Escrow Account may not be
transferred except in accordance with the terms and conditions set forth herein;
and
WHEREAS, the Escrow Agent agrees to serve as escrow agent in accordance
with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements set forth below,
the parties hereby agree as follows:
1. Appointment of Escrow Agent and Establishment of Escrow Account. The
Company hereby appoints the Escrow Agent as the escrow agent hereunder in
accordance with the terms and conditions set forth herein, and the Escrow Agent
hereby accepts such appointment. The Escrow Agent shall establish a separate
escrow account in the name of "Wentworth I, Inc. - Escrow Account" (the "Escrow
Account"). The Escrow Account shall not bear interest until subscriptions for
50,000 Shares have been received and accepted by the Company. After such receipt
and acceptance the Escrow Account shall bear interest. The Escrow Account shall
be maintained and administered and the escrowed funds and the escrowed
securities shall be released and delivered in accordance with the terms and
conditions set forth herein.
2. Deposit of Funds.
(a) All funds received by the Escrow Agent from subscribers for the Shares
shall be deposited and held in the Escrow Account. The Escrow Agent is hereby
empowered on behalf of the Company to endorse and collect all checks, drafts, or
other instruments received on account of subscriptions for Shares. Any check
returned unpaid to the Escrow Agent shall be returned by the Escrow Agent to the
subscriber. In such cases, the Escrow Agent shall promptly notify the Company of
such return. The Escrow Agent shall provide information to the Company as to the
funds deposited into the Escrow Account and the collection status of such funds.
As used herein, "collection" means the normal process by which a bank clears
checks and collects funds thereon. The Company shall provide information to the
Escrow Agent as to each subscriber's name, address, number of Shares subscribed
for and the subscription price paid
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therefor, and such other information concerning the subscribers as the Escrow
Agent may reasonably request.
(b) If the Company rejects any subscription for which the Escrow Agent has
collected funds from the subscriber, 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 collected funds but has submitted the
subscriber's check for collection, the Escrow Agent shall, upon receipt of
written instructions from the Company, promptly issue a check for 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 submitted a rejected
subscriber's check for collection, the Escrow Agent shall, upon receipt of
written instructions from the Company, promptly remit the subscriber's check
directly to the subscriber.
(c) All funds received by the Escrow Agent pursuant to this Escrow
Agreement and deposited and held in the Escrow Account may be invested in
short-term United States government securities, including treasury bills, cash
and cash equivalents.
3. Status of Funds. Until all funds in the Escrow Account are disbursed in
accordance with the terms and conditions of this Escrow Agreement, all funds
deposited into the Escrow Account shall be considered the property of the
subscribers. The funds deposited and held in the Escrow Account shall not become
the property of the Company or subject to its debts or obligations, unless and
until such funds have been disbursed to the Company in accordance with the terms
and conditions of this Escrow Agreement. The Escrow Agent shall not make any
disbursements of funds from the Escrow Account except as expressly provided
herein.
4. Return of Funds if the Offering is not Fully Subscribed. If
subscriptions for all 50,000 Shares have not been received and accepted by the
Company and $50,000 of funds have not been deposited into the Escrow Account
within 90 days after the date of the Prospectus, all funds and interest thereon,
if any, shall be returned promptly to the subscribers without deduction,
penalty, or expense.
5. Deposit of Certificates if the Offering is Fully Subscribed. If
subscriptions for all 50,000 Shares have been received and accepted by the
Company and $50,000 of funds have been deposited into the Escrow Account within
90 days after the date of the Prospectus, the Company shall deposit into the
Escrow Account share certificates issued in the names of each subscriber for the
number of Shares sold by the Company to each subscriber. The share certificates
certificates shall be held in the Escrow Account during the Post-Offering Period
and shall not be released or delivered by the Escrow Agent except as expressly
provided herein.
6. Retention of Funds in the Escrow Account if the Offering is Fully
Subscribed.
If subscriptions for all 50,000 Shares have been received and accepted by
the Company and $50,000 of funds have been deposited into the Escrow Account
within 90 days after the date of the Prospectus, the funds shall be held in the
Escrow Account during the Post-Offering Period and shall not be disbursed by the
Escrow Agent except as expressly provided herein.
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7. Transfer of Securities Held in the Escrow Account. The shares held in
the Escrow Account shall not be transferred other than by will or the laws of
descent and distribution, or pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code of 1986 as amended or Title I of the
Employee Retirement Income Security Act, or the rules thereunder. In no event,
however, shall any shares held in the Escrow Account be released or delivered by
the Escrow Agent except as expressly provided elsewhere herein.
8. Distributions from the Escrow Account.
(a) The Escrow Agent shall make distributions of the funds held in the
Escrow Account during the Post-Offering Period in accordance with the
instructions set forth in Schedule A attached hereto.
(b) The Escrow Agent shall make distributions of the share certificates
held in the Escrow Account during the Post-Offering Period in accordance with
the instructions set forth in Schedule B attached hereto.
(c) The parties agree that all records relating to transactions made
pursuant to the Escrow Agreement and the Escrow Account shall be available, at
all reasonable times, for inspection, examination and reproduction by any party
hereto, or any representative of any of the parties hereto, and such persons are
authorized to examine and audit the Escrow Account pursuant hereto and the
Escrow Agent is expressly authorized and directed to permit such examination and
audit.
9. Exculpation and Indemnification of Escrow Agent.
9.1. The Escrow Agent shall have no duties or responsibilities other than
those expressly set forth herein. The Escrow 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 Escrow 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 such
document. Except for amendments to this Agreement referred to below, and except
for instructions given to the Escrow Agent by the Company and the subscribers
relating to the Escrow Account, the Escrow 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.
9.2. The Escrow Agent shall not be liable to the Company 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
Escrow 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 Escrow 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 Escrow Agent to be
genuine and to be signed or presented by the proper person or
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persons. The Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Escrow Agreement or any
of the terms thereof, unless evidenced by a writing delivered to the Escrow
Agent signed by the proper party or parties and, if the duties or rights of the
Escrow Agent are affected, unless it shall give its prior written consent
thereto.
9.3. The Escrow 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 Escrow 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 pursuant to the
provisions of this Agreement. Except as specifically provided for herein, the
Escrow Agent shall have no responsibility with respect to the use or application
of any funds or other property paid or delivered by the Escrow Agent pursuant to
the provisions hereof. The Escrow Agent shall not be liable to the Company 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 Escrow Agent has complied with
the provisions of Section 2 hereunder.
9.4. The Escrow 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 Escrow
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.
9.5. To the extent that the Escrow 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 Escrow
Agent may pay such taxes. The Escrow Agent may withhold from any payment of
monies held by it hereunder such amount as the Escrow 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 Escrow 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 9.6.
9.6. The Escrow Agent will be indemnified and held harmless by the Company
from and against any and all expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Escrow 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 Escrow Agreement, the services of the Escrow Agent hereunder,
the monies or other property held by it hereunder or any income earned from
investment of such monies; provided, that such expenses or loss are not as a
result of the Escrow Agent acting, or omitting to take action, in bad faith or
with willful misconduct or gross negligence. Promptly after the receipt by the
Escrow Agent of notice of any demand or claim or the commencement of any action,
suit or proceeding, the Escrow agent shall, if a claim in respect thereof is to
be made against the Company, notify the Company thereof in writing, but the
failure
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by the Escrow Agent to give such notice shall not relieve the Company from any
liability which the Company may have to the Escrow Agent hereunder. 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 Escrow 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 claims, demand, action, suit or
proceeding.
10. Termination of Escrow Agreement and Resignation of Escrow Agent.
10.1. This Escrow Agreement shall terminate on the final disposition of the
monies and property held in the Escrow Account hereunder, provided that the
rights of the Escrow Agent and the obligations of the other parties hereto under
Sections 9 and 11 shall survive the termination hereof.
10.2. The Escrow Agent may resign at any time and be discharged from its
duties as Escrow Agent hereunder by giving the Company and the subscribers at
least 30 days' notice thereof. As soon as practicable after its resignation, the
Escrow Agent shall turn over to a successor escrow agent appointed by the
Company all monies and property held hereunder upon presentation of the document
appointing the new escrow agent and its acceptance thereof. If no new Escrow
Agent is so appointed within the 60-day period following such notice of
resignation, the Escrow Agent may deposit the aforesaid monies and property with
any court it deems appropriate.
11. Form of Payments by Escrow Agent.
11.1. Any payments by the Escrow Agent to subscribers or to the persons
other than the Company pursuant to the terms of this Escrow Agreement shall be
made by check, payable to the order of each respective subscriber or other
person.
11.2. All amounts referred to herein are expressed in United States Dollars
and all payments by the Escrow Agent shall be made in such dollars.
12. Compensation of Agent. For services rendered, the Escrow Agent shall
receive [$500] as compensation. The Escrow Agent shall also be entitled to
reimbursement from the Company 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. No such fee, reimbursement for costs and
expenses, indemnification or any damages incurred by the Escrow Agent or any
monies whatsoever shall be paid out of or chargeable to the subscription funds
held in the Escrow Account.
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13. Notices. Unless expressly provided herein to the contrary, notices
hereunder shall be in writing, and delivered by telecopier, overnight express
mail, first-class postage prepaid, delivered personally or by receipted courier
service. All such notices which are mailed shall be deemed delivered upon
receipt if the addressee is the Escrow Agent, but shall be deemed delivered upon
mailing if otherwise, all such notices shall be addressed as follows (or to such
other address as any party hereto may from time to time designate by notice duly
given in accordance with this paragraph):
If to the Company, to:
Wentworth I, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000
If to the Escrow Agent, to:
Corporate Stock Transfer, Inc.
0000 Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
14. Miscellaneous.
(a) Choice of Law and Jurisdiction. This Escrow Agreement shall be governed
by and construed in accordance with the law of the State of Colorado as applied
to agreements made and to be performed entirely in Colorado. The parties to this
Agreement hereby agree that jurisdiction over such parties and over the subject
matter of any action or proceeding arising under this Agreement may be exercised
by a competent court of the State of Colorado or by a United States Court
sitting in Denver, Colorado exclusively. The parties agree that delivery or
mailing of any process or other papers in the manner provided herein, or in such
other manner as may be permitted by law, shall be valid and sufficient service
thereof.
(b) Benefits and Assignment. Nothing in this Agreement, expressed or
implied, shall give or be construed to give any person, firm or corporation,
other than the parties hereto and their successors and assigns, any legal claim
under any covenant, condition or provision hereof, all the covenants,
conditions, and provisions contained in this Agreement being for the sole
benefit of the parties hereto and their successors and assigns. No party may
assign any of its rights or obligations under this Escrow Agreement without (i)
the written consent of all the other parties, which consent may be withheld in
the sole discretion of the party whose consent is sought and (ii) the written
agreement of the transferee that it will be bound by the provisions of this
Agreement.
(c) Counterparts. This Agreement may be executed in several counterparts,
each one of which shall constitute an original, and all collectively shall
constitute but one instrument.
(d) Amendment and Waiver. This Agreement may be modified only by a written
amendment signed by all the parties hereto, and no waiver of any provision
hereof shall be effective unless expressed in a writing signed by the party to
be charged.
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(e) Headings. The headings of the sections hereof are included for
convenience of reference only and do not form part of this Agreement.
(f) Entire Agreement. This Agreement contains the complete agreement of the
parties with respect to its subject matter and supersedes and replaces any
previously made proposals, representation, warranties or agreements with respect
thereto by any of the parties hereto.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have duly executed this Escrow Agreement as
of the date first written above.
COMPANY
WENTWORTH I, INC.
By:
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Name: Xxxxx X. Xxxxxxx
Title: President
ESCROW AGENT
CORPORATE STOCK TRANSFER, INC.
By:
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Name:
Title:
[SIGNATURE PAGE TO ESCROW AGREEMENT OF WENTWORTH I, INC.]
SCHEDULE A
1. Release of Escrow Assets to the Company. Funds and interest, if any,
held in the Escrow Account (the "Escrow Assets") shall be released to the
Company in accordance with the following:
(a) The Escrow Agent shall not release the Escrow Assets to the
Company prior to:
(i) receipt by the Escrow Agent of a signed representation from
the Company, together with other evidence acceptable to the
Escrow Agent, that the Company has completed a transaction
or series of transactions in which the Company has entered
into a specific line of business, and a written confirmation
that the fair market value (as determined by the Company,
based upon standards generally accepted by the financial
community, including revenues, earnings, cash flow and book
value) of the business(es) or net assets to be acquired
exceeds eighty percent of the maximum offering proceeds
described in the Registration Statement, as required by the
Registration Statement and in which at least 80% of the
gross offering proceeds is committed to a specific line of
business (as defined in Section 11-51-302(6) and Rule 51-3.4
promulgated thereunder); and
(ii) the satisfaction of all other conditions required to be
satisfied by the Company for the release of the Escrow
Assets, including all those set forth in (A) Rule 419(e) of
the Securities Act and (B) the provisions of Section
11-51-302(6) of the Colorado Securities Act, including the
expiration of more than nine (9) days after the receipt by
the Colorado Commissioner of Securities of a notice of the
proposed release of funds or upon the authorization of the
Commissioner of any earlier release.
The Escrow Agent shall not be responsible for the sufficiency or accuracy of the
form of, or the execution, validity, value or genuineness of, any document
received in connection with this Section 1(a) of this Schedule A, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein, nor shall the Escrow Agent be responsible or liable to
the other parties to this Agreement 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 such document.
(b) Subject to Section 1(a) above, the Escrow Agent shall release to
the Company, promptly after the Company has deposited stock certificates
representing the 50,000 Shares into the Escrow Account, an amount equal to
10% of the funds held in the Escrow Account.
(c) Subject to Section 1(a) above, the Escrow Agent shall release to
the Company the balance of the funds held in the Escrow Account and
interest, if any (after deducting therefrom the amount of funds and
interest, if any, disbursed to the subscribers in accordance with the
provisions of paragraph 2 below), promptly upon receipt by the Escrow Agent
of a certificate of an authorized officer of the Company representing and
warranting that:
(i) The Company has filed a post-effective amendment to its
Registration Statement (the "Post-Effective Amendment") with the
Securities and Exchange Commission ("SEC"); the Post-Effective
Amendment has been declared effective by the SEC; and within five
business days after the effective date of the Post-Effective
Amendment, the Company has sent a copy of the prospectus contained
therein to the subscribers by first class mail or equally prompt
means; and
(ii) The Company has consummated a business combination with an
operating business in compliance with the requirements of Rule 419 of
the Securities Act within 18 months after the date of the Prospectus.
2. Disbursement of Funds to the Subscribers. Funds and interest, if any,
held in the Escrow Account (after deducting therefrom the amount of funds and
interest, if any, released to the Company in accordance with the provisions of
paragraph 1(b) above) shall be disbursed to the subscribers in accordance with
the following:
(a) If the Company has not received written notification from any
subscriber by the 45th business day following the effective date of the
Post-Effective Amendment to the Company's Registration Statement that such
subscriber has elected to remain an investor, the Escrow Agent shall send
to such subscriber, within five business days, such subscriber's pro rata
share of the funds and interest, if any, held in the Escrow Account.
(b) If the Company has not consummated a business combination meeting
the requirements of Rule 419 of the Securities Act within 18 months after
the date of the Prospectus, the Escrow Agent shall send to each subscriber,
within five business days after such date, each subscriber's pro rata share
of the funds and interest, if any, held in the Escrow Account.
SCHEDULE B
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1. Delivery of Certificates to the Subscribers. Share certificates held in
the Escrow Account shall be delivered to the subscribers in accordance with the
following:
(a) The Escrow Agent shall deliver to each subscriber identified by
the Company as having timely elected to remain an investor, promptly after
receipt by the Escrow Agent of the officer's certificate described in
paragraph 1(c) of Schedule A to the Escrow Agreement, the share
certificates registered in the name of each such subscriber.
2. Return of Certificates to the Company. Share certificates held in the
Escrow Account shall be returned to the Company in accordance with the
following:
(a) The Escrow Agent shall return all of the share certificates to the
Company if the Company has not consummated a business combination with an
operating business in compliance with the requirements of Rule 419 of the
Securities Act within 18 months after the date of the Prospectus.
(b) The Escrow Agent shall return to the Company all share
certificates registered in the name of any subscriber identified in a
notice from an authorized officer of the Company as not having timely
elected to remain an investor, provided that such subscriber's pro rata
share of the funds, and interest, if any, held in the Escrow Account on
account of the purchase of the Shares has been returned to such subscriber
in accordance with paragraph 2(a) of Schedule A to the Escrow Agreement.
