EXHIBIT 10.1
ESCROW AGREEMENT
ESCROW AGREEMENT
ESCROW AGREEMENT, made and entered into as of the _____ day of ____, 2002, by
and between Grafton State Bank, a Wisconsin banking corporation ("Escrow Agent")
and Mentor Capital Consultants, Inc., a Delaware corporation ("Company").
WITNESSETH:
WHEREAS, the Company proposes to offer, offer for sale and sell to the public
up to 875,000 units, each unit consisting of two shares of its common stock, par
value $0.0001 per share ("Common Stock"), and two warrants ("Warrants") to
purchase additional shares of Common Stock, each Warrant, respectively,
entitling the holder to purchase one share of Common Stock at the price of $3.00
and $4.00, respectively, at an initial offering price of $4.00 per Unit
("Offering");
WHEREAS, a registration statement on Form SB-2 with respect to the Units,
including a form of prospectus, has been filed by the Company with the
Securities and Exchange Commission ("Commission") under the Securities Act of
1933, as amended ("Securities Act"). One or more amendments to or changes in
such registration statement have been or may be so filed, and a final form of
prospectus will be filed with the Commission upon the effectiveness of such
registration statement. Such registration statement (including all exhibits
thereto), as amended at the time it becomes effective and at the time each
post-effective amendment thereto becomes effective, and the final prospectus
filed upon the effectiveness of such registration statement or post-effective
amendment (including any supplements to such final prospectus filed following
such effectiveness) are referred to herein, respectively, as the "Registration
Statement" and the "Prospectus";
WHEREAS, the Registration Statement and the Prospectus provide that amounts
tendered by investors in payment of the subscription price for Units, including
checks, cash and cash equivalents ("Subscription Proceeds"), shall be deposited
and held in escrow in a segregated account until such Subscription Proceeds are
disbursed by the Escrow Agent pursuant to this Agreement; and
WHEREAS, unless subscriptions for not less than 12,500 Units are accepted by
the Company and fully paid for on or before the Termination Date, the Offering
will terminate, and no Units will be sold. "Termination Date" means the date
which is 90 days after the date upon which the Registration Statement first
becomes effective under the Securities Act (which effective date shall also be
the date of the Prospectus), unless extended by the Company in its discretion
for an additional 120 days.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Escrow. From the date hereof through and including (i) the date of the
final disbursement of funds pursuant to this Agreement or (ii) termination of
the Offering by the Company, whichever later occurs, the Escrow Agent shall act
as escrow agent and shall receive and disburse all Subscription Proceeds and
earnings, if any, thereon in accordance with the terms of this Agreement. The
Escrow Agent hereby represents to the Company that it is a "bank" as such term
is defined by Section 3(a)(6) of the Securities Exchange Act of 1934, as amended
("Exchange Act").
2. Deposit Procedure.
(a) The Escrow Agent shall establish an appropriate segregated account
("Escrow Account") designated as the "Mentor Capital Consultants, Inc.
Escrow Account," or with such other appropriate designation as shall be
assigned by the Escrow Agent and communicated to the Company. The
Escrow Agent shall cause all Subscription Proceeds transmitted to it by
the Company to be held in the Escrow Account. All checks received by
the Escrow Agent are to be held uncashed until required to be submitted
for collection pursuant to paragraph 2(b) of this Agreement.
(b) All Subscription Proceeds received by the Company shall be promptly
delivered to the Escrow Agent, at 000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxxxx
00000, together with a schedule of such payments and the subscriptions
represented thereby. Provided that the Escrow Agent shall have received
with respect to each subscription for Units (i) Facsimile Notice (as
defined herein) from the Company that a subscription has been received
by the Company and (ii) Subscription Proceeds in the amount required to
pay in full for such subscription, the Escrow Agent shall immediately
commence the collection process (as applicable) with respect to such
Subscription Proceeds. Any payment item which is returned to the Escrow
Agent on its initial presentation for payment need not again be
presented for collection. The Facsimile Notice provided for in this
paragraph shall be given by the Company not more than five (5) days
following receipt by the Escrow Agent of such Subscription Proceeds and
not less than two (2) business days prior to any disbursement of
Subscription Proceeds by the Escrow Agent pursuant hereto.
(c) If a subscription is not accepted by the Company, the Company shall,
within five (5) days following its receipt, provide the Escrow Agent
with Facsimile Notice (as defined herein) of the name of the rejected
subscriber, the address of the rejected subscriber, and the amount of
Subscription Proceeds received from such rejected subscriber and
delivered to the Escrow Agent by the Company.
(d) If the Escrow Agent is holding collected funds with respect to a
rejected subscription, the Escrow Agent shall promptly remit the full
amount of Subscription Proceeds received by the Company and delivered to
the Escrow Agent, without interest thereon or deduction therefrom, to
the rejected subscriber at the address provided by the Company. If the
Escrow Agent has presented the Subscription Proceeds of a rejected
subscriber for collection but has not yet collected funds, the Escrow
Agent shall, promptly upon collection of such funds, remit the full
amount of Subscription Proceeds received by the Company and delivered to
the Escrow Agent, without interest thereon or deduction therefrom, to
the rejected subscriber at the address provided by the Company. If the
Escrow Agent has not yet presented the Subscription Proceeds of a
rejected subscriber for collection, the Escrow Agent shall promptly
return in full the Subscription Proceeds received by a Selected
Placement Agent and delivered to the Escrow Agent in the form so
received and delivered, without interest thereon or deduction therefrom,
to the rejected subscriber at the address provided by the Company.
3. Investment of Escrow Funds. The Escrow Agent shall invest all funds held
in the Escrow Account (including earnings, if any, thereon) in United
States government securities or securities guaranteed by the United States,
certificates of deposit of banks located in the United States or any other
investment, provided, in each case, that such investment is permitted by
Rule 15c2-4, promulgated by the Securities and Exchange Commission under
the Exchange Act ("Rule 15c2-4"). Such investments shall be made in a
manner consistent with the requirement that the Subscription Proceeds be
available for delivery by the Escrow Agent at the times described herein.
The parties hereto recognize that there may be a forfeiture of interest in
the event of early withdrawal from an interest-bearing account of
investment.
4. Initial Closing.
(a) If the Escrow Agent shall (i) be holding in escrow collected funds
representing Subscription Proceeds in an amount equal to the full
purchase price of 12,500 Units and (ii) have received from the Company
on or before the Termination Date and the Initial Closing Date,
respectively, the Facsimile Notice (as defined herein) and related
Confirmation (as defined herein) described in paragraph 4(b) hereof,
then the Escrow Agent shall disburse the collected funds then held in
the Escrow Account (less fees of the Escrow Agent as provided herein)
to the Company, as provided herein and subject to the provisions
hereof, at the Initial Closing. As used in this Agreement, the terms
"Initial Closing" and "Initial Closing Date" shall mean, respectively,
the first disbursement of Subscription Proceeds by the Escrow Agent
pursuant to this Agreement and the date upon which such disbursement
occurs; the Initial Closing shall be scheduled as determined by the
parties hereto.
(b) On or before the Termination Date, the Escrow Agent shall have received
Facsimile Notice (as defined herein) from the Company that all
conditions precedent to the disbursement of Subscription Proceeds on
the Initial Closing Date have been fully satisfied as required under
the Registration Statement and Prospectus, specifically certifying that
subscriptions for not less than 12,500 Units have been received and
accepted by the Company on or before the Termination Date; Confirmation
(as defined herein) of such Facsimile Notice shall be delivered to the
Escrow Agent on or before the Initial Closing Date, dated as of the
Initial Closing Date.
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(c) Provided that the Escrow Agent shall have (i) received and be holding
in escrow collected Subscription Proceeds as required under paragraph
4(a) hereof, (ii) received the Facsimile Notice (as defined herein)
required under paragraph 4(b) hereof on or before the Termination Date
and (iii) received Confirmation (as defined herein) of the Facsimile
Notice required under paragraph 4(b) hereof on or before the Initial
Closing Date, the Escrow Agent shall, on the Initial Closing Date,
disburse the collected funds then held in the Escrow Account as
follows: First, to the Escrow Agent in the amount of any fees then due
and payable to such Agent (which shall not exceed on the Initial
Closing Date the aggregate earnings, if any, on funds held in the
Escrow Account, determined as of the business day immediately preceding
such Closing Date); and Second, to the Company in the amount of any
balance then remaining in the Escrow Account.
(d) If any of the conditions described in paragraphs 4(a) and 4(b) hereof
shall not have been fully satisfied at the close of business on the
date (Termination Date or Initial Closing Date) specified herein for
such compliance, the Escrow Agent shall promptly return all
Subscription Proceeds directly to subscribers, without interest thereon
or deduction therefrom, and the escrow provided for herein shall
thereupon terminate.
5. Additional Closings.
(a) Subsequent to the Initial Closing Date, the collected funds then held in
the Escrow Account shall be disbursed by the Escrow Agent from time to
time at one or more Additional Closings. As used herein, the terms
"Additional Closing" and "Additional Closing Date" shall mean,
respectively, any such further closing and the date upon which such
closing occurs; Additional Closings shall be scheduled as determined by
the parties to this Agreement.
(b) Prior to the disbursement of collected funds held in the Escrow Account
at any Additional Closing, the Escrow Agent shall have received
Facsimile Notice (as defined herein) from the Company that all
conditions precedent to such disbursement by the Escrow Agent have been
fully satisfied as required under the Registration Statement and
Prospectus. The Facsimile Notice from the Company provided for in this
paragraph 5(b) must be received by the Escrow Agent not less than two
(2) business days prior to such Additional Closing Date; Confirmation
(as defined herein) of such Facsimile Notice shall be delivered to the
Escrow Agent by the Company on or before such Additional Closing Date,
dated as of such Additional Closing Date.
(c) Provided that the Facsimile Notice (as defined herein) required under
paragraph 5(b) hereof shall have been received by Escrow Agent not less
than two (2) business days prior to, and confirmed in writing on or
before, each Additional Closing Date, the Escrow Agent shall, on such
Additional Closing Date, disburse the collected funds then held in the
Escrow Account as follows: First, to the Escrow Agent in the amount of
any fees then due and payable to such Agent (which shall not exceed on
any Additional Closing Date the aggregate earnings, if any, on funds
held in the Escrow Account, determined as of the business day
immediately preceding such Closing Date); and Second, to the Company in
the amount of any balance then remaining in the Escrow Account.
6. Books and Records. The Escrow Agent shall maintain accurate records of all
transactions hereunder. Promptly upon the termination of escrow, or as may
reasonably be requested by the Company prior thereto, the Escrow Agent
shall provide the Company with a complete copy of such records, certified
by the Escrow Agent to be a complete and accurate account of all such
transactions. The authorized representatives of the Company shall also
have access to such books and records at all reasonable times during normal
business hours upon reasonable notice to the Escrow Agent.
7. Escrow Agent Fees. As compensation for services performed by it pursuant
to this Agreement, the Escrow Agent shall be entitled to receive from the
Company the fees set forth on Schedule A hereto; such fees shall be
deducted from Escrow Income (as defined in such Schedule A), and the
Company shall pay to the Escrow Agent on demand any portion of such fees
which remains unpaid following the final Closing.
8. Termination. This Agreement shall terminate on the final disposition of
the moneys and property held in escrow under and pursuant to the terms
hereof, provided that the rights of the Escrow Agent and the obligations
of the Company under paragraphs 7 and 9 shall survive the termination
hereof.
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9. General Provisions.
(a) This Agreement expressly sets forth all the duties of the Escrow Agent
with respect to any and all matters pertinent hereto.
(b) The Escrow Agent shall not be liable, except for its own negligence or
willful misconduct and, except with respect to claims based upon such
negligence or willful misconduct that are successfully asserted against
the Escrow Agent. The Company shall indemnify and hold harmless the
Escrow Agent (and any successor Escrow Agent) from and against any and
all losses, liabilities, claims, actions, damages and expenses,
including reasonable attorneys' fees and disbursements, arising out of
and in connection with this Agreement.
(c) The Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to
it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of
the service thereof. The Escrow Agent may act in reliance upon any
instrument or signature believed by it to be genuine and may assume that
any person purporting to give notice or advice, or to accept and
acknowledge receipt, or to make any statement or execute any documents
in connection with the provisions of this Agreement has been duly
authorized to do so.
(d) In the event that the Escrow Agent (i) shall be uncertain as to its
duties arising under this Agreement or (ii) shall receive instructions
from the Company as to the funds held in the Escrow Account which, in
its opinion, are inconsistent with each other or are in any conflict
with any of the provisions of this Agreement, the Escrow Agent shall be
authorized to hold any and all Subscription Proceeds received by it,
together with any other amounts which shall accrue to or be deposited in
the Escrow Account, pending the settlement of any such controversy by
final adjudication of a court of competent jurisdiction, or the Escrow
Agent may, at its option, deposit such funds with the clerk of a court
of competent jurisdiction, in an appropriate proceeding to which all
parties in interest are duly joined.
(e) The Escrow Agent (and any successor escrow agent) may at any time resign
as such by delivering all amounts held in the Escrow Account to any
successor escrow agent designated by the Company in writing, or to any
court of competent jurisdiction, whereupon the Escrow Agent shall be
discharged of and from any and all further obligations arising in
connection with this Agreement. The resignation of the Escrow Agent
will take effect (i) upon the appointment of a successor (including a
court of competent jurisdiction) or (ii) thirty (30) days after the date
of delivery of its written notice of resignation to the Company,
whichever first occurs. If at such time the Escrow Agent has not
received a written designation of a successor escrow agent, the Escrow
Agent's sole responsibility thereafter shall be to safekeep the funds
held in the Escrow Account until receipt by the Escrow Agent of a
written designation by the Company of a successor escrow agent or a
final order of a court of competent jurisdiction.
(f) The parties hereto hereby irrevocably submit to the jurisdiction of any
Wisconsin state court or federal court sitting in Wisconsin in any
action or proceeding arising out of or relating to this Agreement, and
the parties hereby irrevocably agree that all claims in respect of such
action or proceeding shall be heard and determined in such state or
federal court. The parties to this Agreement hereby consent to and
grant to any such court jurisdiction over the persons of such parties
and over the subject matter of any such dispute and agree that delivery
or mailing of any process, instrument or other paper in connection with
any such action or proceeding in the manner provided in this Agreement,
or in such other manner as may be permitted by law, shall be valid and
sufficient service of such process, instrument or other paper.
(g) This Agreement shall be binding upon and inure solely to the benefit of
the parties hereto and their respective successors and assigns, and
shall not be enforceable by or inure to the benefit of any third party.
Except as provided herein with respect to a resignation by the Escrow
Agent, no party hereto may assign any of its rights or obligations under
this Agreement without the prior written consent of the other parties
hereto.
(h) This Agreement may only be modified by a written instrument signed by
the parties hereto, and no waiver hereunder shall be effective unless in
writing signed by the party to be charged.
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(i) The Escrow Agent makes no representation as to the validity, value,
genuineness or the collectibility of any security or other document or
instrument held by or delivered to such Escrow Agent pursuant to the
terms of this Agreement.
(j) For purposes hereof, "Facsimile Notice" shall mean the delivery by
telephone facsimile (FAX) of a notice, request, demand or other
communication provided for herein, and "Confirmation" shall mean the
delivery by hand (via commercial courier service or otherwise) or by
first class mail, if and to the extent required hereunder, of a
manually-signed (if applicable) counterpart of any such notice, demand
or other communication. All Facsimile Notices and Confirmations shall
be deemed given when received and shall be telecopied and delivered by
hand, respectively, to the parties at the facsimile (FAX) telephone
numbers and addresses listed below, or to such other persons or
facsimile telephone numbers/addresses as the relevant party shall
designate from time to time in writing delivered by hand as aforesaid:
If to the Company:
Mentor Capital Consultants, Inc.
Attention: Xxxxxxx Xxxxxxxxxxx
Facsimile Notice (FAX) Telephone Number: (000)000-0000
Confirmation Address: 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
If to the Escrow Agent:
Grafton State Bank
Escrow Department
Attention: Xxx Xxxxxxx
Facsimile Notice (FAX) Telephone Number: (000)000-0000
Confirmation Address: 000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
(k) This Agreement shall be construed in accordance with and governed by the
internal law of the State of Wisconsin.
(l) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of the day and year first above written.
Mentor Capital Consultants, Inc.
By: __________________________________
W. Xxxxxxx Xxxxxxxxxxx, President
Grafton State Bank
By: _____________________________
Xxxxxx X. Xxxxxxx, President
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ESCROW AGREEMENT
Schedule A
This Schedule A to the Escrow Agreement, dated as of __________, 2002, by and
between Grafton State Bank ("Escrow Agent") and Mentor Capital Consultants, Inc.
("Company"), sets forth the compensation arrangements referred to in paragraph 7
of such Agreement, as follows:
For services performed by it pursuant to the Escrow Agreement, the Escrow
Agent shall be entitled to receive from the Company fees in the amounts of
$1,500, payable upon the execution hereof, plus $250 per Closing and $10 per
subscriber (whether accepted or rejected); provided, however, that the Escrow
Agent shall receive, in the aggregate, not less than $2,000 in consideration of
its services rendered pursuant to the terms of the Escrow Agreement. Except for
the initial payment due upon the execution of this Agreement, such fees shall be
(a) due and payable on the Initial Closing Date and each Additional Closing Date
until paid in full and (b) payable, through the final Closing, only from and to
the extent of available Escrow Income; provided that, if payments made from
available Escrow Income, made at the Initial Closing and one or more Additional
Closings are not, in the aggregate, sufficient to pay such fees in full, the
Company shall pay on demand any such fees which remain unpaid following the
final Closing. "Escrow Income" is the amount of interest and/or dividends, if
any, which shall have been (x) paid on or in respect of the Escrow Account
(representing earnings on funds held therein) and (y) deposited in such Account
as collected funds on or prior to the business day immediately preceding such
Initial Closing Date or Additional Closing Date, as the case may be. If and to
the extent that Escrow Income exceeds the aggregate fees payable to the Escrow
Agent hereunder, such excess shall be paid to the Company at the Initial Closing
or Additional Closing(s), as the case may be. The foregoing notwithstanding, if
the Offering is terminated prior to the Initial Closing, the Escrow Agent shall
be entitled to receive fees in the aggregate amount of $2,500, and no more,
payable by the Company on demand. All terms used herein shall have the same
meanings ascribed to them in the Escrow Agreement of which this Schedule is a
part.
