FORM OF
ESCROW AGREEMENT
AGREEMENT made this __ day of October, 1996, by and among the Company
whose name and address appear on the Information Sheet (as defined herein)
attached to this Agreement and Continental Stock Transfer & Trust Company (A
Limited Purpose Trust Company) with offices at 2 Broadway, New York, New York
10004 (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Company, proposes to offer for sale (the "Offering")
certain securities of the Company in the form of shares of Common Stock (the
"Shares"), pursuant to Rule 419 of the Securities and Exchange Act of 1933, as
amended, as set forth on the Information Sheet. The offer and sale of the Shares
are being registered under the Securities Act. The Offering is being managed by
Keane Securities Co. Inc., the Qualified Independent Underwriter (the "QIU").
The purchase price per Share is $.88 as determined by the Company and the QIU.
WHEREAS, the Company and the QIU propose to establish an escrow account
(the "Escrow Account"), to which subscription monies which are received by the
Escrow Agent from the Company or the QIU in connection with the Initial Public
Offering of the Company's securities are to be credited, and the Escrow Agent is
willing to establish the Escrow Account on the terms and subject to the
conditions hereinafter set forth; and
WHEREAS, the Escrow Agent has an agreement with Chase Manhattan Bank to
establish a special bank account into which the subscription monies, which are
received by the Escrow Agent from the Company or the QIU and credited to the
Escrow Account, are to be deposited;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Information Sheet. Each capitalized term not otherwise defined in
this Agreement shall have the meaning set forth for such term on the information
sheet which is attached to this Agreement as Exhibit A and is incorporated by
reference herein and made a part hereof (the "Information Sheet").
2. Establishment of the Bank Account.
2.1 The Escrow Agent shall establish a non-interest-bearing bank
account at the branch of Chase Manhattan Bank selected by the Escrow Agent, and
bearing the designation set forth on the Information Sheet (heretofore defined
as the "Bank Account"). The purpose of the Bank Account is for (a) the deposit
of all subscription monies (checks, cash or wire transfers) which are received
by the Company or the QIU from prospective purchasers of the Shares and are
delivered by the Company or the QIU to the Escrow Agent, (b) the holding of
amounts of subscription monies which are collected through the banking system,
and (c) the disbursement of collected funds, all as described herein.
2.2 The initial offering period (the "Initial Offering Period"), which
shall be deemed to commence on the date of the prospectus for the Company's
initial public offering, shall consist of the number of calendar days or
business days set forth on the Information Sheet. The Initial Offering Period
shall be extended by an Extension Period only if the Escrow Agent shall have
received written notice thereof at least three (3) business days prior to the
expiration of the Initial Offering Period. The Extension Period, which shall be
deemed to commence on the next calendar day following the expiration of the
Initial Offering Period, shall consist of the number of calendar days or
business days set forth on the Information Sheet (the period commencing on the
date of the Prospectus for the Company's initial public offering, as the same
may be extended, is referred to as the "Offering Period"). The last day of the
Initial Offering Period, or the last day of the Extension Period (if the Escrow
Agent has received written notice thereof as hereinabove provided), is referred
to herein as the "Termination Date." After the Termination Date, neither the
Company nor the QIU shall deliver, and the Escrow Agent shall not accept, any
additional amounts representing additional payments by prospective purchasers.
3. Deposits to the Bank Account.
3.1 The Company and the QIU shall promptly deliver to the Escrow Agent
all monies which they receive from prospective purchasers of the Shares, which
monies shall be in the form of checks, cash, or wire transfers. Upon the Escrow
Agent's receipt of such monies, they shall be credited to the Escrow Account.
All checks delivered to the Escrow Agent shall be made payable to "CST&T AAF
Emerging Growth Acquisition Corporation I." Any check payable other than to the
Escrow Agent as required hereby shall be returned to the prospective purchaser,
or if the Escrow Agent has insufficient information to do so, then to the
Company or the QIU (together with any Subscription Information, as such term is
defined below, or other documents delivered therewith) by noon of the next
business day following receipt of such check by the Escrow Agent, and such check
shall be deemed not to have been delivered to the Escrow Agent pursuant to the
terms of this Agreement; provided, however, that any check delivered to the
Escrow Agent which is made payable to "Emerging Growth Acquisition Corporation
I" or the like and endorsed by the Escrow Agent "for deposit only" into the Bank
Account and so deposited into the Bank Account, shall be considered Escrow
Amounts (as defined below) for the purposes of this Agreement.
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3.2 Promptly after receiving subscription monies as described in
Section 3.1 hereof, the Escrow Agent shall deposit the same into the Bank
Account. Amounts of monies so deposited are hereinafter referred to as "Escrow
Amounts." The Escrow Agent shall cause Chase Manhattan Bank to process all
Escrow Amounts for collection through the banking system. Simultaneously with
each deposit to the Escrow Account, the Company or the QIU shall inform the
Escrow Agent in writing of the name and address of the prospective purchaser,
the social security or taxpayer identification number of the prospective
purchaser, the amount of Shares subscribed for by the prospective purchaser, and
the aggregate dollar amount of such subscription (collectively, the
"Subscription Information"), which shall be retained by the Escrow Agent as set
forth herein.
3.3 The Escrow Agent shall not be required to accept for credit to the
Escrow Account or for deposit into the Bank Account checks which are not
accompanied by the appropriate Subscription Information. Wire transfers and cash
representing payments by prospective purchasers shall not be deemed deposited in
the Escrow Account until the Escrow Agent has received in writing the
Subscription Information required with respect to such payments.
3.4 The Escrow Agent shall not be required to accept in the Escrow
Account any amounts representing payments by prospective purchasers, whether by
check, cash or wire, except during the Escrow Agent's regular business hours.
3.5 As used herein, the term "Fund" shall refer only to those Escrow
Amounts which have been deposited in the Bank Account, which have cleared the
banking system and which have been collected by the Escrow Agent.
3.6 If the proposed offering is terminated before the Termination Date,
the Escrow Agent shall refund any portion of the Fund prior to disbursement of
the Fund in accordance with Article 4 hereof upon instructions in writing signed
by the Company and the QIU.
4. Disbursement from the Bank Account.
4.1 The Escrow Agent shall promptly disburse the Fund by drawing checks
upon or issuing wires from the Bank Account in accordance with instructions in
writing signed by the Company and the QIU as to the disbursement of the Fund, in
such form as attached to this Agreement as Exhibit B (the "Instructions"),
promptly after it receives such Instructions. The Escrow Agent shall be entitled
to Escrow Agent Fees as set forth on the Information Sheet.
4.2 Upon disbursement of the Fund pursuant to the terms of this Article
4, the Escrow Agent shall be relieved of all further obligations and released
from all liability under this Agreement. It is expressly agreed and understood
that in no event shall the aggregate amount of payments made by the Escrow Agent
exceed the amount of the Fund.
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5. Rights, Duties and Responsibilities of Escrow Agent. It is
understood and agreed that the duties of the Escrow Agent are purely ministerial
in nature, and that:
5.1 The Escrow Agent shall notify the Company and the QIU on a daily
basis, of the Escrow Amounts which have been deposited in the Bank Account and
of the amounts, constituting the Fund, which have cleared the banking system and
have been collected by the Escrow Agent.
5.2 The Escrow Agent shall not be required to accept from the Company
or the QIU any Subscription Information pertaining to prospective purchasers
unless such Subscription Information is accompanied by checks, cash, or wire
transfers meeting the requirements of Section 3.1 hereof, nor shall the Escrow
Agent be required to keep records of any information with respect to payments
deposited by the Company or the QIU except with respect to the Subscription
Information; however, the Escrow Agent shall notify the Company or the QIU, as
applicable, within a reasonable time of any discrepancy between the amount set
forth in any Subscription Information and the amount delivered to the Escrow
Agent therewith. Such amount need not be accepted for deposit in the Escrow
Account until such discrepancy has been resolved.
5.3 The Escrow Agent shall be under no duty or responsibility to
enforce collection of any check delivered to it hereunder. The Escrow Agent,
within a reasonable time, shall return to the Company or the QIU any check
received which is dishonored, together with the Subscription Information, if
any, which accompanied such check.
5.4 The Escrow Agent shall be entitled to rely upon the accuracy, act
in reliance upon the contents, and assume the genuineness of any notice,
instruction, certificate, signature, instrument or other document which is given
to the Escrow Agent pursuant to this Agreement without the necessity of the
Escrow Agent verifying the truth or accuracy thereof. The Escrow Agent shall not
be obligated to make any inquiry as to the authority, capacity, existence or
identity of any person purporting to give any such notice or instructions or to
execute any such certificate, instrument or other document.
5.5 If the Escrow Agent is uncertain as to its duties or rights
hereunder or shall receive instructions with respect to the Bank Account, the
Escrow Amounts or the Fund which, in its sole determination, are in conflict
either with other instructions received by it or with any provision of this
Agreement, it shall be entitled to hold the Escrow Amounts, the Fund, or a
portion thereof, in the Bank Account pending the resolution of such uncertainty
to the Escrow Agent's sole satisfaction, by final judgment of a court or courts
of competent jurisdiction or otherwise; or the Escrow Agent, at its sole
discretion, may deposit the Fund (and any other Escrow Amounts that thereafter
become part of the Fund) with the clerk of a court of competent jurisdiction in
a proceeding to which all parties in interest are joined. Upon the deposit by
the
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Escrow Agent of the Fund with the clerk of any court, the Escrow Agent shall be
relieved of all further obligations and released from all liability hereunder.
5.6 The Escrow Agent shall not be liable for any action taken or
omitted hereunder, or for the misconduct of any employee, agent or attorney
appointed by it, except in the case of willful misconduct or gross negligence.
The Escrow Agent shall be entitled to consult with counsel of its own choosing
and shall not be liable for any action taken, suffered or omitted by it in
accordance with the advice of such counsel.
5.7 The Escrow Agent shall have no responsibility at any time to
ascertain whether or not any security interest exists in the Escrow Amounts, the
Fund or any part thereof or to file any financing statement under the Uniform
Commercial Code with respect to the Fund or any part thereof.
6. Amendment; Resignation. This Agreement may be altered or amended
only with the written consent of the Company, the QIU and the Escrow Agent. The
Escrow Agent may resign for any reason upon three (3) business days' written
notice to the Company and the QIU. Should the Escrow Agent resign as herein
provided, it shall not be required to accept any deposit, make any disbursement
or otherwise dispose of the Escrow Amounts or the Fund, but its only duty shall
be to hold the Escrow Amounts until they clear the banking system and the Fund
for a period of not more than five (5) business days following the effective
date of such resignation, at which time (a) if a successor escrow agent shall
have been appointed and written notice thereof (including the name and address
of such successor escrow agent) shall have been given to the resigning Escrow
Agent by the Company and the QIU and such successor escrow agent, then the
resigning Escrow Agent shall pay over to the successor escrow agent the Fund,
less any portion thereof previously paid out in accordance with this Agreement;
or (b) if the resigning Escrow Agent shall not have received written notice
signed by the Company and the QIU and a successor escrow agent, then the
resigning Escrow Agent shall promptly refund the amount in the Fund to each
prospective purchaser, without interest thereon or deduction therefrom, and the
resigning Escrow Agent shall promptly notify the Company and the QIU in writing
of its liquidation and distribution of the Fund; whereupon, in either case, the
Escrow Agent shall be relieved of all further obligations and released from all
liability under this Agreement. Without limiting the provisions of Article 8
hereof, the resigning Escrow Agent shall be entitled to be reimbursed by the
Company for any reasonable expenses incurred in connection with its resignation,
transfer of the Fund to a successor escrow agent or distribution of the Fund
pursuant to this Article 6.
7. Representations and Warranties. The Company hereby represents and
warrants to the Escrow Agent that, to its knowledge:
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7.1 No party other than the parties hereto and the prospective
purchasers have, or shall have, any lien, claim or security interest in the
Escrow Amounts or the Fund or any part thereof.
7.2 No financing statement under the Uniform Commercial Code is on file
in any jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Amounts or the Fund or any part thereof.
7.3 The Subscription Information submitted with each deposit shall, at
the time of submission and at the time of the disbursement of the Fund, be
deemed a representation and warranty that such deposit represents a bona fide
payment by the purchaser described therein for the amount of Shares set forth in
such Subscription Information.
7.4 All of the information contained in the Information Sheet is, as of
the date hereof, and will be, at the time of any disbursement of the Fund, true
and correct.
8. Fees and Expenses. The Escrow Agent shall be entitled to the Escrow
Agent Fees set forth on the Information Sheet, payable as and when stated
therein. In addition, the Company agrees to reimburse the Escrow Agent for any
reasonable expenses incurred in connection with the Escrow Agent's performance
under this Agreement, including, but not limited to, reasonable counsel fees.
The Escrow Agent shall have a lien upon the Fund to the extent of its fees for
services as Escrow Agent.
9. Indemnification and Contribution.
9.1 The Company agrees to indemnify the Escrow Agent and its officers,
directors, employees, agents and shareholders (collectively referred to as the
"Indemnitees") against, and hold them harmless of and from, any and all loss,
liability, cost, damage and expense, including, without limitation, reasonable
counsel fees, which the Indemnitees may suffer or incur by reason of any action,
claim or proceeding brought against the Indemnitees arising out of or relating
in any way to this Agreement or any transaction to which this Agreement relates,
unless such action, claim or proceeding is the result of the willful misconduct
or gross negligence of the Indemnitees.
9.2 If the indemnification provided for in Section 9.1 is applicable,
but for any reason is held to be unavailable, the Indemnitors shall contribute
such amounts as are just and equitable to pay, or to reimburse the Indemnitees
for, the aggregate of any and all losses, liabilities, costs, damages and
expenses, including, without limitation, reasonable counsel fees, actually
incurred by the Indemnitees as a result of or in connection with, and any amount
paid in settlement of, any action, claim or proceeding arising out of or
relating in any way to any actions or omissions of the Indemnitors.
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9.3 The provisions of this Article 9 shall survive any termination of
this Agreement, whether by disbursement of the Fund, resignation of the Escrow
Agent or otherwise.
10. Governing Law and Assignment. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York and shall be
binding upon the parties hereto and their respective successors and assigns;
provided, however, that any assignment or transfer by any party of its rights
under this Agreement or with respect to the Escrow Amounts or the Fund shall be
void as against the Escrow Agent unless: (a) written notice thereof shall be
given to the Escrow Agent; and (b) the Escrow Agent shall have consented in
writing to such assignment or transfer.
11. Notices. All notices required to be given in connection with this
Agreement shall be sent by registered or certified mail, return receipt
requested, or by hand delivery with receipt acknowledged, or by the Express Mail
service offered by the United States Post Office, and addressed, if to the
Company, at its respective address set forth on the Information Sheet, and if to
the Escrow Agent, at its address set forth above, to the attention of the Trust
Department.
12. Severability. If any provision of this Agreement or the application
thereof to any person or circumstance shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement or the application of
such provision to persons or circumstances other than those to which it is held
invalid or unenforceable shall not be affected thereby and shall be valid and
enforceable to the fullest extent permitted by law.
13. Execution in Several Counterparts. This Agreement may be executed
in several counterparts or by separate instruments, and all of such counterparts
and instruments shall constitute one agreement, binding on all of the parties
hereto.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings (written or oral) of the
parties in connection therewith.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
EMERGING GROWTH ACQUISITION CONTINENTAL STOCK TRANSFER
CORPORATION I, & TRUST COMPANY,
the Company as Escrow Agent
By: _____________________________ By: _____________________________
Name: Name:
Title: Title:
KEANE SECURITIES CO., INC.
as Qualified Independent Underwriter
By: ____________________________________
Name:
Title:
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EXHIBIT A
ESCROW AGREEMENT INFORMATION SHEET
1. The Company
Name: Emerging Growth Acquisition Corporation I
Address: 660 Steamboat Road
Greenwich, CT 06830
Jurisdiction of incorporation or organization: Delaware
2. The Qualified Independent Underwriter
Name: Keane Securities Company, Inc.
Address: Fifty Broadway
New York, NY 10004
Jurisdiction of incorporation or organization. Delaware
3. The Shares
Description of the Shares to be offered: One hundred sixty-six thousand
three hundred thirty-two (166,332) Shares of Common Stock, no par value.
The purchase price per Share is $.88.
4. Plan of Distribution of the Shares
Offering Period: 30 calendar days or the sale of all Shares.
Extension Period: if any, 30 calendar days.
Closing period: 7 business days after the closing of the Offering Period
or thereafter as soon as the Escrow Amounts have cleared the banking
system in the normal course of business.
5. Term of Escrow Agreement
Offering Period, Extension Period, if any, and Closing Period
6. Title of Escrow Account:
CST&T AA Emerging Growth Acquisition Corporation I
7. Escrow Agent Fees
Amount due on execution of the Escrow Agreement $1,000 and $1,000 upon
completion of the escrow, fee includes one closing
Fee for each additional closing: $500
Fee for each check disbursed pursuant to the terms of the Escrow
Agreement: $10.00
Fee for each check returned pursuant to the terms of the Escrow
Agreement: $10.00
EXHIBIT B
FORM OF AUTHORIZATION
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
2 Broadway
New York, New York 10004
TO WHOM IT MAY CONCERN:
The undersigned hereby direct you to issue checks or wire funds upon
presentation of wire instructions from the CST&T f/b/o EGACI Escrow Account as
follows:
Name Amount
---- ------
1. Keane Securities Co., Inc. $15,000
Representing the fee payable to the
Qualified Independent Underwriter
for services and expenses rendered.
2. Emerging Growth Acquisition Corporation I $
Representing the proceeds of the Initial
Public Offering of the Company's
securities.
3. EGACI Escrow Account established pursuant $
to Rule 419 of the Securities Act of 1933, as
amended.
Representing 90% of the net process of the
Initial Public Offering of the Company's
Securities.
Date: ______________, 1996
EMERGING GROWTH ACQUISITION CORPORATION I
_____________________________________________
Name:
Title:
KEANE SECURITIES CO., INC.
______________________________________________
Name:
Title: