Exhibit 4.2
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FORM OF
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") dated as of _______, 2002 is
by and among Wentworth III, Inc., a Delaware corporation (the "Company"), Key
Bank National Association, World Trade Center Branch, located at 0000 Xxxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "Escrow Agent") and Corporate Stock
Transfer, Inc., a Colorado corporation (the "Administrator").
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 __________, 2002 (the "Prospectus") included in the Company's Registration
Statement on Form SB-2 (SEC File No. 333-75044), 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 by and maintained with the Escrow Agent as an insured depositary
institution within the meaning of Rule 419(b)(1)(i)(A) of the Securities Act;
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 Administrator agrees to provide certain administrative
services in connection with establishing and maintaining the Escrow Account
including, but not limited to, receiving checks from and corresponding with
subscribers; 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.
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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 and
maintain the separate Escrow Account in the name of "Wentworth III, Inc. Escrow
Account" as an insured depositary institution within the meaning of Rule
419(b)(1)(i)(A) of the Securities Act. 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.
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(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
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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 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.
(d) The Administrator may act on behalf of the Company or the Escrow Agent,
as applicable, with respect to administrative services related to establishing
and maintaining the Escrow Account and related to issuances of shares of the
Company including, but not limited to, (i) receiving checks from subscribers and
delivering them to the Escrow Agent for deposit in the Escrow Account, (ii)
sending checks to subscribers, (iii) receiving correspondence or documentation
related to any subscription for shares in the Company and responding to such
correspondence or documentation, (iv) keeping records of subscriptions and
issuances of shares, including maintaining a share transfer ledger, (v)
receiving share certificates for deposit in the Escrow Account from the Company,
(vi) transmitting share certificates to subscribers from the Escrow Account,
(vii) acting as a liason between the Escrow Agent and the Company and (viii)
other matters incidental or related to the foregoing administrative matters.
3. Status of Funds.
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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.
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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.
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5. Deposit of Certificates if the Offering is Fully Subscribed.
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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
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Subscribed.
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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.
7. Transfer of Securities Held in the Escrow Account.
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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.
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(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 and Administrator.
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9.1. The Escrow Agent and the Administrator shall have no duties or
responsibilities other than those expressly set forth herein. The Escrow Agent
and the Administrator 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 and the Administrator 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
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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 or the Administrator by the Company and
the subscribers relating to the Escrow Account, the Escrow Agent or the
Administrator, as applicable, 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 and the Administrator 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 and the Administrator 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 or the Administrator, as applicable, to be genuine
and to be signed or presented by the proper person or persons. The Escrow Agent
and the Administrator 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 or
the Administrator, as applicable, signed by the proper party or parties and, if
the duties or rights of the Escrow Agent or the Administrator, as applicable,
are affected, unless it shall give its prior written consent thereto.
9.3. The Escrow Agent and the Administrator 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
or the Administrator 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 and the Administrator shall
have no responsibility with respect to the use or application of any funds or
other property paid or delivered by the Escrow Agent or the Administrator
pursuant to the provisions hereof. The Escrow Agent and the Administrator 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 or the Administrator, as applicable, has complied with
the provisions of Section 2 hereunder.
9.4. The Escrow Agent and the Administrator 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 or the Administrator, as applicable, 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.
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9.5. To the extent that the Escrow Agent or the Administrator 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 or the Administrator, as applicable, may pay such
taxes. The Escrow Agent or the Administrator, as applicable, may withhold from
any payment of monies held by it hereunder such amount as the Escrow Agent or
the Administrator, as applicable, 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 and the Administrator 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 and the Administrator 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
or the Administrator, as applicable, 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 or the Administrator, as
applicable, 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 or the Administrator, as
applicable, acting, or omitting to take action, in bad faith or with willful
misconduct or gross negligence. Promptly after the receipt by the Escrow Agent
or the Administrator, as applicable, of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Escrow Agent or the
Administrator, as applicable, shall, if a claim in respect thereof is to be made
against the Company, notify the Company thereof in writing, but the failure by
the Escrow Agent or the Administrator, as applicable, to give such notice shall
not relieve the Company from any liability which the Company may have to the
Escrow Agent or the Administrator 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.
9.7. Notwithstanding anything herein to the contrary, no party to this
Agreement shall be indemnified for violations of Section 11-51-302(6)(b) of the
Colorado Securities Act.
10. Termination of Escrow Agreement and Resignation of Escrow Agent.
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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 Administrator 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
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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.
10.3. The Administrator may resign at any time and be discharged from its
duties as the Administrator hereunder by giving the Company and the subscribers
at least 30 days' notice thereof. As soon as practicable after its resignation,
the Administrator shall turn over to a successor administrator appointed by the
Company all records, documents or other property of the Company held hereunder
upon presentation of the document appointing the new administrator and its
acceptance thereof. If no new administrator is so appointed within the 60-day
period following such notice of resignation, the administrator may deposit the
aforesaid records, documents and property with the Company.
11. Form of Payments by Escrow Agent.
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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.
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12.1. For services rendered, the Escrow Agent shall receive an annual fee
of $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.
12.2. For services rendered, the Administrator shall receive an annual fee
of $500 as compensation. The Administrator 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 Adminstrator 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.
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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 and 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 III, Inc.
000 Xx. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
If to the Escrow Agent, to:
Key Bank National Association, World Trade Center Branch
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
If to the Administrator, to:
Corporate Stock Transfer, Inc.
0000 Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
14. Miscellaneous.
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(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.
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(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.
(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 III, INC.
By:
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Name: Xxxxx X. Xxxxxxx
Title: President
ESCROW AGENT
KEY BANK NATIONAL ASSOCIATION, WORLD TRADE CENTER BRANCH
By:
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Name:
Title:
ADMINISTRATOR
CORPORATE STOCK TRANSFER, INC.
By:
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Name:
Title:
[SIGNATURE PAGE TO ESCROW AGREEMENT OF WENTWORTH III, INC.]
SCHEDULE A
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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 50% 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) and Rule 51-3.4
promulgated under 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.
