EXHIBIT 4.3
RULE 419 ESCROW AGREEMENT
Letter of Escrow Instructions
To: Wachovia Bank N.A.
Corporate Trust Group
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Win or Lose Acquisition Corporation - Rule 419 escrow,
Wachovia Bank Escrow No. ____________
This Letter of Escrow Instructions to Wachovia Bank N.A., hereinafter
called Escrow Agent, shall immediately and automatically become operative and
effective upon the commencement of a public distribution of certain securities
of Win or Lose Acquisition Corporation (the "Company") which is described more
fully in the Company's Form S-1 Registration Statement under the Securities Act
of 1933 (Registration No. 333-_____________).
The Company will deliver the papers, stock certificates, money and
other property hereinafter described to the Escrow Agent. All such papers, stock
certificates, money and other property are to be held and disposed of by the
Escrow Agent in accordance with the following instructions and upon the terms
and conditions hereinafter set forth, to which the undersigned agree:
1. ESCROW PURPOSE:
1.1 This Escrow Agreement describes clearing and holding escrow that will
be established by Win or Lose Acquisition Corporation, of Dunedin,
Florida, (the "Company") and all current stockholders of the Company
(the "Selling Stockholders") in accordance with the requirements of
Securities and Exchange Commission Rule 419, adopted pursuant to the
provisions of Section 7(b) of the Securities Act of 1933. The Company,
the Selling Stockholders and the Escrow Agent are the only parties to
this Escrow Agreement.
1.2 In connection with the distribution described in the Company's Form S-1
Registration Statement (the "Distribution"), the Selling Stockholders
intend to transfer certain shares of the Company's $.001 par value
common stock (the "Common Stock") to certain classes of transferees
described in the definitive prospectus filed as part of t he Company's
Form S-1 Registration Statement.
1.3 The purpose of the escrow shall be to hold and ultimately distribute
the following stock certificates ("Escrowed Assets") in accordance with
the terms of Sections 4 through 6 this Escrow Agreement,
(a) Stock certificates evidencing the ownership of 403,000 presently
issued and outstanding shares of Common Stock (the "Gift Shares")
that will be transferred to certain individuals and organizations
selected by the Selling Stockholders (the "Donees"), registered in
the names of the Donees and delivered to the Escrow Agent upon
issuance;. and
(b) Stock certificates evidencing the ownership of up to 1,597,000
presently issued and outstanding shares of Common Stock (the
"Founders' Shares") that have been registered for resale by the
Selling Stockholders.
1.4 This Escrow Agreement constitutes an essential element of the Company's
proposed public offering of securities and is required by Securities
and Exchange Commission Rule 419. The parties to this Escrow Agreement
shall, at all times, conduct all of their activities relating to the
Rule 419 escrow created hereby in strict compliance with the letter and
the spirit of Rule 419. In the event of any inconsistency between the
terms of this Escrow Agreement and the requirements of Rule 419, the
requirements of Rule 419 shall have priority.
2. ESCROW DEPOSITS:
2.1 The Escrow Agent shall accept deposits to the Escrow Account from time
to time during the entire term of this Agreement. All stock
certificates delivered to the Escrow Agent shall, upon delivery,
automatically become subject to the provisions of this Escrow
Agreement.
2.2 The initial escrow deposits will be in the form of individual stock
certificates representing the ownership of Gift Shares. All stock
certificates representing Gift Shares shall be registered in the name
of individual Donee and contain complete information respecting the
Donee's name, mailing address and taxpayer identification number. Upon
completion of the gift share distribution described in the registration
statement, the Selling Stockholders shall jointly execute and deliver
to the Escrow Agent a schedule that identifies the specific Gift Share
transfers made by each Selling Stockholder. When the Escrow Agent
receives the stock certificates and other information specified in this
Paragraph, it shall promptly examine the stock certificates to confirm
that the stockholder information printed on the stock certificates
complies in all particulars with the stockholder information in the
supporting schedules. The Company shall promptly correct any errors,
omissions or inconsistencies noted by the Escrow Agent.
2.3 Additional escrow deposits in the form of individual stock certificates
representing the ownership of Founders' Shares may be made from time to
time during the term of this Agreement. When any of the Selling
Stockholders enter into an agreement to sell all or any part of the
Founders' Shares, the Selling Stockholder shall promptly deliver stock
certificates representing the ownership of the transferred Founders'
Shares to the Escrow Agent. All such certificates shall be registered
in the name of the Selling Stockholder and duly endorsed for transfer
to the purchaser. All certificates for Founders' Shares delivered to
the Escrow Agent shall be accompanied by a copy of the associated stock
purchase agreement and such additional documentation as the Company,
the Selling Stockholder and the Escrow Agent deem necessary or
desirable to comply with the requirements of Rule 419, or otherwise
provide for the efficient performance of the Escrow Agent's duties
hereunder.
2.4 All stock certificates delivered to the Escrow Agent pursuant to the
provisions of this Section 2 shall be held and disposed of by Escrow
Agent in accordance with the following instructions and upon the terms
and conditions set forth herein.
3. TERMINATION AND DISBURSEMENTS:
3.1 If the Company has not negotiated a business combination, filed a
post-effective amendment to its registration statement, successfully
completed a reconfirmation offering meeting the requirements of Rule
419 and closed on the business combination agreement within 18 months
after the effective date of its registration statement (the "Final
Termination Date"), the Escrow Agent shall:
(a) Return all stock certificates representing Gift Shares to the Selling
Stockholders; and
(b) Return all stock certificates representing Founders' Shares to the Selling
Stockholders.
When all stock certificates have been returned to the Selling
Stockholders in accordance with the provisions of this Paragraph 3.1,
this Escrow Agreement will terminate.
3.2 If the Company negotiates a business combination, files a
post-effective amendment to its registration statement and conducts a
reconfirmation offering meeting the requirements of Rule 419; and the
terms of such offering are not accepted by the number of Gift Share
Donees specified in the definitive prospectus included in the Company's
post-effective amendment, the Company shall immediately notify the
Escrow Agent that the terms of its reconfirmation offering have been
rejected by the Gift Share Donees and the Escrow Agent shall:
(a) Return all stock certificates representing Gift Shares to the Selling
Stockholders; and
(b) Return all stock certificates representing Founders' Shares to the Selling
Stockholders.
When all stock certificates have been returned to the Selling
Stockholders in accordance with the provisions this Paragraph 3.2, this
Escrow Agreement will terminate.
3.3 If the Company negotiates a business combination, files a
post-effective amendment to its registration statement and conducts a
reconfirmation offering meeting the requirements of Rule 419 and the
terms of such offering are accepted by the number of Gift Share Donees
specified in the definitive prospectus included in the Company's
post-effective amendment, the Company shall promptly deliver, or cause
to be delivered, to the Escrow Agent:
(a) A copy of the definitive prospectus included in its
post-effective amendment and used in connection with the
reconfirmation offering;
(b) A schedule setting forth the identity of each Gift Share Donee
who has approved the terms of the reconfirmation offering in
writing; and
(c) A schedule setting forth the identity of each Gift Share Donee
who has rejected the terms of the reconfirmation offering in
writing or otherwise failed to execute a reconfirmation
agreement within the time limits specified in the definitive
prospectus.
Upon receipt of the foregoing documentation, the Escrow Agent shall
return to the Selling Stockholders all stock certificates registered in
the names of Gift Share Donees who received Gift Shares in connection
with the Distribution and ultimately refused or failed to execute a
reconfirmation agreement within the time limits specified in the
definitive prospectus
3.4 If the Company satisfies the conditions of Paragraph 3.3, actually
closes the business combination described in the post-effective
amendment to its registration statement and delivers to the Escrow
Agent a Certificate signed by the President and Secretary that all
conditions precedent to the final release of stock certificates set
forth in Rule 419(e)(3) have been satisfied, the Escrow Agent shall:
(a) Mail stock certificates to each Gift Share Donee who received
Common Stock in connection with the Distribution and
subsequently executed a reconfirmation agreement; and
(b) Deliver stock certificates for the Founders' Shares to the
closing agents specified in the associated stock purchase
agreements; but only if a closing agent was specified in the
purchase agreement delivered to the Escrow Agent pursuant to
Paragraph 2.3 of this Escrow Agreement. In the event that a
closing agent was not so specified, the Escrow Agent shall
retain possession of the stock certificates pending its
receipt of joint written instructions from the Selling
Stockholder and purchaser.
When all stock certificates and all Escrow Funds deposited with the
Escrow Agent have been disbursed in accordance with the provisions of
this Paragraph 3.4, this Escrow Agreement will terminate.
4. NO MODIFICATION:
4.1 After the effective date of the Company's Registration Statement, these
instructions shall not be modified, rescinded or amended without the
written consent of each Gift Share Donee and each purchaser of
Founders' Shares who may be adversely affected by such modification,
rescission or amendment.
5. GENERAL PROVISIONS:
5.1 All parties understand and agree that Escrow Agent is not a principal,
participant, or beneficiary of the underlying transaction that
necessitates this Escrow Agreement. The Escrow Agent shall be obligated
only for the performance of such duties as are specifically set forth
herein and may rely and shall be protected in acting or refraining from
acting on any instrument believed by it to be genuine and to have been
signed or presented by the proper party or parties, their officers,
representatives or agents. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith and believed by it to be
authorized hereby, nor for action taken or omitted by it in accordance
with the advice of its counsel. Escrow Agent shall be responsible for
holding, investing and disbursing the Escrowed Assets pursuant to the
Escrow Agreement, but in no event shall be liable for any exemplary or
consequential damages in excess of Escrow Agent's fee hereunder.
5.2 Unless otherwise provided herein, the Escrow Agent shall accept hold
and distribute the Escrowed Assets pursuant to this Escrow Agreement.
Acceptance of the Escrowed Assets shall be communicated by Escrow Agent
to parties in writing as soon as practicable after receipt, and any
discrepancies shall be noted to Escrow Agent by the parties in writing
within forty five (45) days of receiving such communication. Failure to
note any discrepancies shall be deemed confirmation of the description
of Escrowed Assets listed on the report regardless of any variations
from the original schedule.
5.3 Should any controversy arise between the undersigned with respect to
this Escrow Agreement or with respect to the right to receive the
Escrowed Assets, Escrow Agent shall have the right to consult counsel
and/or to institute a xxxx of interpleader in any court of competent
jurisdiction to determine the rights of the parties. In the event it is
a party to any dispute, Escrow Agent shall have the additional right to
refer such controversy to binding arbitration. Should such actions be
necessary, or should Escrow Agent become involved in litigation in any
manner whatsoever on account of this Escrow Agreement or the Escrowed
Assets, the undersigned hereby bind and obligate themselves, their
heirs and legal representatives to pay Escrow Agent, in addition to any
charge made hereunder for acting as Escrow Agent, reasonable attorney's
fees incurred by Escrow Agent, and any other disbursements, expenses,
losses, costs and damages in connection with and resulting from such
actions.
5.4 The Escrow Agent shall have no liability under, or duty to inquire
beyond the terms and provisions of the Escrow Agreement, and it is
agreed that its duties are purely ministerial in nature, and that the
Escrow Agent shall incur no liability whatsoever except for willful
misconduct or gross negligence so long as it has acted in good faith.
The Escrow Agent shall not be bound by any modification, amendment,
termination, cancellation, rescission or supersession of this Escrow
Agreement unless the same shall be in writing and signed by all of the
other parties hereto and, if its duties as Escrow Agent hereunder are
affected thereby, unless it shall have given prior written consent
thereto.
5.5 The Escrow Agent may at any time resign hereunder by giving written
notice of its resignation to the other parties hereto, at their address
set forth herein, at least ten (10) days prior to the date specified
for such resignation to take effect, and upon the effective date of
such resignation, the Escrowed Assets hereunder shall be delivered to
such person as may be designated in writing by the parties executing
this Escrow Agreement, whereupon all the Escrow Agent's obligations
hereunder shall cease and terminate. The Escrow Agent's sole
responsibility until such termination shall be to keep safely all
Escrowed Assets and to deliver the same to a person designated by the
parties executing this Escrow Agreement or in accordance with the
directions of a final order or judgment of a court of competent
jurisdiction.
5.6 The parties agree to jointly and severally indemnify, defend and hold
the Escrow Agent harmless from and against any and all loss, damage,
tax, liability and expense that may be incurred by the Escrow Agent
arising out of or in connection with its acceptance or appointments as
Escrow Agent hereunder, including costs and expenses of defending
itself against any claim or liability in connection with its
performance hereunder.
5.7 The parties jointly and severally agree to pay to the Escrow Agent its
fees for the services rendered pursuant to the provisions of this
Escrow Agreement and will reimburse the Escrow Agent for reasonable
expenses, including reasonable attorney's fees incurred in connection
with the negotiations, drafting and performance of such services.
Except as otherwise noted, this fee covers account acceptance, set up
and termination expenses; plus usual and customary related
administrative services such as safekeeping, investment and payment of
funds specified herein or in the exhibits attached. Activities
requiring excessive administrator time or out-of-pocket expenses such
as optional substitution of collateral or securities shall be deemed
extraordinary expenses for which related costs, transaction charges,
and additional fees will be billed at Escrow Agent's standard charges
for such items. A fee schedule has been provided to all parties to this
Escrow Agreement.
5.8 Escrow Agent is hereby given a lien on all Escrowed Assets for all
indebtedness that may become owing to Escrow Agent hereunder, which
lien may be enforced by Escrow Agent by setoff or appropriate
foreclosure proceedings.
5.9 The parties warrant to the Escrow Agent that there are no Federal,
State or local tax liability or filing requirements whatsoever
concerning the Escrow Agent's actions contemplated hereunder and
warrant and represent to the Escrow Agent that the Escrow Agent has no
duty to withhold or file any report of any tax liability under any
Federal of State income tax, local or State property tax, local or
State sales or use taxes, or any other tax by any taxing authority. The
parties hereto agree to jointly and severally indemnify the Escrow
Agent fully for any tax liability, penalties or interest incurred by
the Escrow Agent arising hereunder and agree to pay in full any such
tax liability together with penalty and interest if any tax liability
is ultimately assessed against the Escrow Agent for any reason as a
result of its action hereunder (except for the Escrow Agent's
individual income tax liability arising from its income fees).
5.10 The Escrow Agent shall have no liability for loss arising from any
cause beyond its control, including, but not limited to, the following:
(a) the act, failure or neglect of any agent or correspondent selected
by the Escrow Agent or the parties hereto; (b) any delay, error,
omission or default connected with the remittance of funds; (c) any
delay, error, omission or default of any mail, telegraph, cable or
wireless agency or operator; and (d) the acts or edicts of any
government or governmental agency or other group or entity exercising
governmental powers.
5.11 This Escrow Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
6. NOTICES:
6.1 All notices, demands, requests or payments provided for or given
pursuant to this Escrow must be in writing or facsimile. All such
notices shall be deemed to have been properly given or served by
personal delivery or by depositing the same in the United States mail
addressed to the person entitled to receive such notice at the address
set forth below.
To the Company or the
Selling Shareholders: To the Escrow Agent:
Xxxxx X. Xxxxxx, President Wachovia Bank N.A.
Win or Lose Acquisition Corporation Corporate Trust Group
0000 Xxxxxxxx Xxxxxxxxx 0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000 Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
6.2 All notices shall be effective when received.
Approved and accepted by the Company and the Escrow Agent this 20th day
of February 2004.
Win or Lose Acquisition Corporation Wachovia Bank N.A.
By: /s/ By: /s/
------------------------------- -------------------------
Xxxxx X. Xxxxxx, President R. Xxxxxxx Xxxxxx, Vice President
Approved and accepted by the Selling Stockholders this 20th day of February 2004
Xxxxx X. Xxxxxx Xxxx X. Xxxxx
By: /s/ By: /s/
------------------------------- -------------------------------
Xxxx X. Xxxxxxxx Xxxxxx X. Xxxxx
By: /s/ By: /s/
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