Exhibit 2.1
ESCROW AGREEMENT
Escrow Agreement made as of the 12th day of August, 2002 by
and among Eagle Golf Corp., a Nevada corporation (the "Company")
and LaSalle Bank National Association, a national banking
association (the "Escrow Agent").
Now, therefore, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto, for themselves, their successors and assigns,
hereby agree as follows:
1. Definitions
Agreement This Escrow Agreement
Initial Registration The Initial Registration
Statement Statement, prepared and filed
with the Commission with
respect to the implementation
of the Plan Prerequisites
Business Day A day other than a Saturday,
Sunday, or other day when
banking institutions in
Chicago, Illinois are
authorized or required by law
or executive order to be closed
Certificates Stock certificates evidencing
the Registered Shares purchased
Commission United States Securities and
Exchange Commission
Company Representative An individual(s) with full
authority to deal the Escrow
Agent in behalf of the with
Company and so designated
herein
Company Eagle Golf Corp., a Nevada
corporation
Escrow Accounts The Funds Escrow Account and
Shares Escrow Account,
collectively
Escrow Agent LaSalle Bank National
Association, a national banking
association
Exchange Act United States Securities
Exchange Act of 1934
Exhibits Addenda hereto which, because
of their size, format or
nature, would impair the
readability of this Agreement
if contained therein, which
Exhibits consist of the
following: A-Rules 419, 10b-
9,and 15g-8; B-Subscription
Agreement (subscription
rights); C- Subscription
Agreement (general); D-Escrow
Agent Fee Schedule; E-Company
Representative Specimen
Signature Schedule; F-Letter
Representations and/or
Instructions by Company to
Escrow Agent.
Funds Escrow Account The Offering Proceeds as held
in escrow by the Escrow Agent
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Indemnified Party(ies) The Escrow Agent and persons
named herein who shall be
indemnified by the Company
Initial Effective Date The date on which the Initial
Registration Statement is
declared effective by the
Commission
Initial Registration The Securities Act registration
Statement statement on Form SB-2 to be
filed with the Commission with
respect to the Registered
Shares
Investors Purchasers in the Offering of
the Registered Shares
IRS Form Internal Revenue Service Form W-
9 or W-8, as applicable
Instructions Written directions to the
Escrow Agent given by the
Company with respect to action
under this Agreement
Instruments Checks, drafts or money orders
utilized as subscription
payments
Offering Proceeds Subscription funds paid by the
Investors for the Registered
Shares
Offering Period The time period, as extended,
during which the Offering will
occur
Offering The proposed public offering of
the Registered Shares
Other Stock Company stock, other than
Shares, for which Certificates
are issued
Plan The Company's plan to engage in
a merger or acquisition with an
unidentified company or
companies
Plan Period The period following the
Offering Period during which
the Company intends to
implement the Plan
Plan Prerequisites The requirements of Rule 419
for the effectuation of the
Plan
Registered Shares 3 million Shares to be offered
for sale to the public
Rule 419 Rule 419 of Regulation C of the
Securities Act
Rule 10b-9 Rule 10b-9 of the Exchange Act
Rule 15g-8 Rule 15g-8 of the Exchange Act
Rules Rules 419, Rule 10b-9, and Rule
15g-8, collectively
Securities Act United States Securities Act of
1933
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Shares Escrow Account The Certificates as held in
escrow by the Escrow Agent
Shares 20 million shares of common
stock, $.001 par value,
authorized to be issued by the
Company
Subscription Agreement The agreement for the
Investor's purchase of the
Registered Shares
Subscription Documents The Subscription Agreement and
the IRS Form, collectively
Termination Dates The date on which the Offering
or the Plan is terminated,
irrespective of the reason
therefor
Unregistered Shares 2,000,000 Shares heretofore
issued to the President
2. Recitals.
2.1. The Company is a Nevada corporation and a "blank check company
", as that term is defined in Rule 419 ("Rule 419") of the
Securities Act of 1933, as amended (the "Securities Act"), to which
Rule 419 the Offering described below is subject. A blank check
company is, among other things, a development stage company which
has no specific business plan or purpose or has indicated that its
business plan is to engage in a merger or acquisition with an
unidentified company or companies, or other entity or person. The
business plan and purpose of the Company (the "Plan") is to engage
in a merger or acquisition with an unidentified company or
companies, or other entity or person by way of identifying such a
company or companies, negotiating with the same, and concluding
such a transaction during the period following completion of the
public offering of the Company's securities described below (the
"Plan Period").
2.2. The Company is authorized to issue one class of security; 20
million shares of common stock, $0.001 par value per share (the
"Shares"), with respect to which Shares neither any warrants,
convertible securities or other derivative securities nor any stock
dividends, stock splits or reverse stock splits are authorized or
intended to be authorized during the Plan Period. The Company
intends to file with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Initial Registration
Statement") under the Securities Act for the purpose of making a
public offering (the "Offering"), by way of NevWest Securities
Corporation, an agent of the issuer, of 3,000,000 Shares (the
"Registered Shares") to investors therein (the "Investors") at a
per Share price of $0.05, the remaining 2,000,000 Shares (the
"Unregistered Shares") being currently owned and held by Xxxx X.
Xxxxxxxx, the president and promoter of the Company (the
"President"). The Offering is required to be made in accordance
with, among other laws, statutes, rules and regulations, Rule 419
and Rule 10b-9 ("Rule 10b- 9"), and Rule 15g-8 ("Rule "15g-8") of
the Securities Exchange Act of 1934 (the "Exchange Act")
2.3. The Company will conduct the Offering on a "minimum
contingency" basis during a period of time (the "Offering Period")
described below. All lawful out-of-pocket expenses of any kind,
authorized by the Company and arising from or in connection with
either the Offering or the Plan, incurred by any person, shall be
paid by the Company or, if it is unable to do so, by the President,
provided the same shall not constitute compensation for the sale of
the Registered Shares.
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2.4. In furtherance of the completion of the Offering and the
realization of the Plan, the Company has engaged the services of
the Escrow Agent, which is an "insured depository institution," as
that term is defined in Section 3(c)(2) of the Federal Deposit
Insurance Act. The Escrow Agent shall act as such in accordance
with the provisions of Rule 10b-9, Rule 15g-8 and Rule 419
(collectively the "Rules"), the relevant provisions of which are as
follows:
2.4.a Subparagraph (a) of Rule 10b-9, requires that, when a
securities offering will be conducted on an "maximum or minimum"
basis, it would be fraudulent to make any representation:
2.4.a.(1) To the effect that the security is being offered or sold
on an "maximum or minimum" basis, unless the security is part of
any offering or distribution being made on the condition that all
or a specified amount of the consideration paid for such security
will be promptly refunded to the purchaser unless
2.4.a.(1).A. all of the securities being offered are sold at a
specified price within a specified time, and
2.4.a.(1).B. the total amount due to the seller is received by
him by a specified date;"
2.4.b Subparagraphs (b)(1)(i) and (ii), (b)(2)(i), and
(b)(3)(i) of Rule 419 require, among several alternatives, that
(b)(1)(i) Except as otherwise provided in this
section or prohibited by other applicable law, all
securities issued in connection with an offering by a
blank check company and the gross proceeds from the
offering shall be deposited promptly into: (A) An escrow
account maintained by an 'insured depository
institution', as that term is defined in Section 3(c)(2)
of the Federal Deposit Insurance Act;
(b)(1)(ii) If funds and securities are deposited into
an escrow account maintained by an insured depository
institution, the deposit account records of the insured
depository institution must provide that funds in the
escrow account are held for the benefit of the purchasers
named and identified in accordance with Rule 330.1 of the
regulations of the Federal Deposit Insurance Corporation,
and the records of the escrow agent, maintained in good
faith and in the regular course of business, must show
the name and interest of each party to the account. If
funds and securities are deposited in a separate bank
account established by a broker or dealer acting as a
trustee, the books and records of the broker-dealer must
indicate the name, address, and interest of each person
for whom the account is held.
(b)(2)(i) All offering proceeds, after deduction of
cash paid for underwriting commissions, underwriting
expenses and dealer allowances, and amounts permitted to
be released to the registrant pursuant to paragraph
(b)(2)(vi) of this section, shall be deposited promptly
into the escrow or trust account; provided, however, that
no deduction may be made for underwriting commissions,
underwriting expenses or dealer allowances payable to an
affiliate of the registrant.
(b)(3)(i) All securities issued in connection with
the offering, whether or not for cash consideration, and
any other securities issued with respect to such
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securities, including securities issued with respect to
stock splits, stock dividends, or similar rights, shall
be deposited directly into the escrow or trust account
promptly upon issuance. The identity of the purchaser of
the securities shall be included on the stock
certificates or other documents evidencing such
securities. See also Rule 15g-8 regarding restrictions on
sales of, or offers to sell, securities deposited in the
escrow or trust account.
2.4.c Rule 15g-8 provides that
". . . . .it shall be unlawful for any person to sell or
offer to sell any security that is deposited and held in
an escrow or trust account pursuant to Rule 419 under the
Securities Act of 1933, or any interest in or related to
such security, other than pursuant to a qualified
domestic relations order as defined by the Internal
Revenue Code of 1986, as amended, or Title 1 of the
Employee Retirement Income Security Act, or the rules
thereunder.
2.5. Securities Act Notes to Rule 419(e) provide that "With respect
to a blank check offering subject to both Rule 419 and Exchange Act
Rule 10b-9, the requirements of Rule 10b-9 are applicable only
until the conditions of the offering governed by that rule are met
(e.g. reaching the minimum in a "part-or-none" offering). When
those conditions are satisfied, Rule 419 continues to govern the
use of offering proceeds.
2.6. Based upon the foregoing, the Escrow Agent has agreed to
create and maintain two escrow accounts (the "Escrow Accounts")
with respect to the Offering and the Plan, as follows: (a) a funds
escrow account (the "Funds Escrow Account") in which there shall be
held during the Offering Period the gross funds proceeds of the
Offering, subject to and in accordance with the provisions of Rule
10b-9 and, upon completion of the Offering, during the Plan Period,
the gross funds proceeds of the Offering (less deductions allowed
by Rule 419(b)(2)(vi)), subject to and in accordance with the
provisions of Rule 419, (the "Offering Proceeds" which shall be
deemed to include any interest or dividends thereon); and, (b) upon
the completion of the Offering, a custodial escrow account (the
"Shares Escrow Account") in which there shall be held during the
Plan Period the certificates evidencing the Registered Shares sold
in the Offering, the Unregistered Shares owned by the President,
and any incremental securities deposited into the Shares Escrow
Account (collectively the "Certificates"), fully completed,
executed and registered in the name(s) designated by the Investors.
2.7. The Escrow Agent shall establish the Escrow Accounts for the
sole benefit of the persons having the beneficial interests in the
Escrow Accounts. The records of the Escrow Accounts shall provide
that the funds or securities in the Escrow Accounts are held for
the benefit of the purchasers named and identified in accordance
with Rule 330.1 of the regulations of the Federal Deposit Insurance
Corporation, and the records of the Escrow Agent, maintained in
good faith and in the regular course of business, shall show the
name and interest of each party to the account. The Escrow Accounts
shall be maintained in the following name, Eagle Golf Corp. The
Escrow Agent will hold Offering Proceeds and the Certificates in
the Escrow Accounts free from any lien, claim or offset.
2.8. A complete copy of Rule 419, Rule 10b-9, and Rule 15g-8 is
annexed hereto as Exhibit A and made a part hereof.
3. The Offering (Rule 10b-9).
3.1. The Company, shall conduct the Offering of 3,000,000
Registered Shares on a "minimum contingency" basis in accordance
with the provisions of the Initial Registration Statement. The
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Company shall make the Offering during a period of 365 days
commencing with the effective date of the Initial Registration
Statement (the "Initial Effective Date") which period may be
extended for two consecutive 45-day periods at the sole discretion
of the Company (such offering period as it may be extended shall be
referred to as the "Offering Period"). The prospectus and the
subscription documents (collectively the "Offering Documents") by
which the Offering shall be made shall provide that all
subscription documents and all instruments representing Offering
Proceeds shall be sent by the Investor directly to the Company. The
subscription documents shall include an IRS Form W-9 or W-8, as
applicable (the "IRS Form"), and a subscription agreement (the
"Subscription Agreement") which shall include the name, mailing
address, taxpayer identification number, telephone and fax numbers,
number of Registered Shares purchased for, and amount of
subscription payment of such Investor, which Subscription Agreement
shall further represent and confirm that the Investor has received
a copy of this Escrow Agreement, each of which IRS Forms and
Subscription Agreements (collectively the "Subscription Documents")
shall be completed and executed by each Investor.
3.2. Offering Proceeds shall be in the form of checks, drafts, or
money orders (the "Offering Proceeds Instruments") payable to the
order of "LaSalle Bank National Association, Escrow Agent of Eagle
Golf Corp." and shall have been received by the Company accompanied
by the completed and executed Subscription Documents. The Company
forthwith upon receipt thereof shall photocopy the said Proceeds
Instruments and Subscription Documents, record the pertinent
information contained therein, and promptly deliver the Proceeds
Instruments and Subscription Documents to the Escrow Agent. Any
check from an Investor which is returned unpaid to the Escrow Agent
shall be returned to Company. The deposited Offering Proceeds may
also be in the form of a funds wire transfer to Eagle Golf Corp.
The Escrow Agent promptly shall notify the Company of all such wire
transfers including the amount and any additional advice included
therewith. The Company shall promptly deliver to the Escrow Agent
any Subscription Documents received by the Company in connection
with such wire transfer. The Escrow Agent will hold Offering
Proceeds in the Funds Escrow Account free from any lien, claim or
offset. Wire transfer instructions for the Eagle Golf Corp. escrow
account are as follows:
LaSalle Bank N.A., Chicago Illinois
ABA # 000000000
For Further Credit to: Trust No. 62-9006-60-2
Eagle Golf/NevWest Securities
Attn: Xxxxx X. Xxxxxxx x42936
3.3. The Escrow Agent promptly shall deposit all Offering Proceeds
received by it into the Funds Escrow Account. The Escrow Account
records of the Escrow Agent shall provide that funds in the escrow
account are held for the benefit of the purchasers named and
identified in accordance with Rule 330.1 of the regulations of the
Federal Deposit Insurance Corporation, and the records of the
Escrow Agent, maintained in good faith and in the regular course of
business, shall show the name and interest of each party to the
account. Interest or dividends earned by the Funds Escrow Account
will be accrued to the benefit of each Investor but no such accrual
shall be entered in the Escrow Agent's records unless and until the
Escrow Agent shall have received an I.R.S. Form W-9 or W-8, as
applicable, completed and executed by the Investor.
3.4. The Escrow Agent shall provide written notification to the
Company, on a daily basis, of the Offering Proceeds and of the data
relevant thereto, which have been deposited in the Funds Escrow
Account and of the amounts thereof which have cleared the banking
system and have been collected by the Escrow Agent.
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3.5. Deposited Offering Proceeds and interest or dividends thereon,
if any, shall be held for the sole benefit of the Investors in the
Registered Shares. Deposited Offering Proceeds shall be invested in
securities of any open-end investment company registered under the
Investment Company Act of 1940 that holds itself out as a money
market fund meeting the conditions of paragraphs (c) (2), (c) (3),
and (c) (4) of Rule 2a-7 under the Investment Company Act. The
Company hereby directs the Escrow Agent to invest the Deposited
Offering Proceeds, and interest or dividends thereon, in the
Dreyfus Government Cash Management Fund.
3.6. The Company reserves the right to terminate the Offering at
any time prior to its completion at its sole discretion, in which
event the Company promptly shall notify in writing the Escrow Agent
and the Escrow Agent shall return the Offering Proceeds to the
persons entitled thereto as hereinafter provided. The Company
further reserves the right to reject or cancel any subscription in
whole or in part at its respective sole discretion. In the event of
such whole or partial rejection of any subscription as aforesaid,
the Company shall promptly notify in writing the Escrow Agent of
such rejection. In the event of termination of the Offering, the
Escrow Agent shall, if the Escrow Agent has not deposited the check
for such Subscriber, within ten (10) days return such check and the
other Escrow Funds respecting such Subscriber pursuant to the
information delivered for such Subscriber to the Company. If the
check for such Subscriber has been deposited, the Escrow Agent
shall remit a reimbursement check respecting such Subscriber as per
the information provided within ten (10) days after Escrow Agent
has confirmed that such check has cleared. All subscriptions are
irrevocable, and no Investor will have any right to cancel or
rescind the subscription, except as required under the law of any
jurisdiction in which the Registered Shares are sold.
3.7. In the event the Offering shall be terminated, either by
reason of the failure to complete the sale of the Registered Shares
within the Offering Period, the discretionary termination by the
Company of the Offering prior to the expiration of the Offering
Period, or otherwise, the proceeds of the Offering (the "Offering
Proceeds shall promptly be returned to the persons entitled
thereto.
3.8. In the event the Offering shall be completed within the
Offering Period, Rule 419 shall continue to govern the disposition
of the Offering Proceeds and the issuance and disposition of the
Certificates as hereinafter provided.
3.9. A complete copy of the Placement Agency Agreement is annexed
hereto as Exhibit B and made a part hereof. A complete copy of the
Subscription Agreement is annexed hereto as Exhibit C and made a
part hereof.
4. Disposition of Offering Proceeds Following Completion of the
Offering (Rule 419(b)(2)).
4.1. Paragraph (b)(2) of Rule 419, entitled Deposit and Investment
of Proceeds, provides as follows:
"(i) All offering proceeds, after deduction of cash paid
for underwriting commissions, underwriting expenses and dealer
allowances, and amounts permitted to be released to the
registrant pursuant to paragraph (b)(2)(vi) of this section,
shall be deposited promptly into the escrow or trust account;
provided, however, that no deduction may be made for
underwriting commissions, underwriting expenses or dealer
allowances payable to an affiliate of the registrant.
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(ii) Deposited proceeds shall be in the form of checks,
drafts, or money orders payable to the order of the escrow
agent or trustee.
(iii) Deposited proceeds and interest or dividends
thereon, if any, shall be held for the sole benefit of the
purchasers of the securities.
(iv) Deposited proceeds shall be invested in one of the
following:
(A) An obligation that constitutes a "deposit," as
that term is defined in Section (3) (1) of the Federal Deposit
Insurance Act;
(B) Securities of any open-end investment company
registered under the Investment Company Act of 1940 that holds
itself out as a money market fund meeting the conditions of
paragraphs (c) (2), (c) (3), and (c) (4) of Rule 2a-7 under
the Investment Company Act; or
(C) Securities that are direct obligations of, or
obligations guaranteed as to principal or interest by, the
United States.
Note to Rule 419(6)(2)(iv). Issuers are cautioned that
investments in government securities are inappropriate unless
such securities can be readily sold or otherwise disposed of
for cash at the time required without any dissipation of
offering proceeds invested.
(v) Interest or dividends earned on the funds, if any,
shall be held in the escrow or trust account until the funds
are released in accordance with the provisions of this
section. If funds held in the escrow or trust account are
released to a purchaser of the securities, the purchaser shall
receive interest or dividends earned, if any, on such funds up
to the date of release. If funds held in the escrow or trust
account are released to the registrant, interest or dividends
earned on such funds up to the date of release may be released
to the registrant.
(vi) The registrant may receive up to 10 percent of the
proceeds remaining after payment of underwriting commissions,
underwriting expenses and dealer allowances permitted by
paragraph (b)(2)(i) of this section, exclusive of interest or
dividends, as those proceeds are deposited into the escrow or
trust account."
4.2. Promptly upon the completion of the Offering, the Escrow
Agent, pursuant to Rule 419(b)(2)(vi) and written direction from
the Company, shall pay to the Company the sum of $15,000,
constituting 10% of the gross Offering Proceeds of $150,000 held in
the Funds Escrow Account, by way of reimbursement to the Company of
all out-of-pocket expenses of any kind incurred or to be incurred
in connection with the Offering, provided the same shall not
constitute compensation for the sale of the Registered Shares.
4.3. The balance of the funds in the Funds Escrow Account remaining
after payment to the Company as aforesaid continue to be invested
by the Escrow Agent in the Dreyfus Government Cash Management Fund.
Interest or dividends earned by the Funds Escrow Account will be
accrued to the benefit of each Investor but no such accrual shall
be entered in the Escrow Agent's records unless and until the
Escrow Agent shall have received an I.R.S. Form W-9 or W-8, as
applicable, completed and executed by the Investor. Deposited
Offering Proceeds and interest or dividends thereon, if any, shall
be held for the sole benefit of the Investors in the Registered
Shares.
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4.4. Interest or dividends earned by funds in the Funds Escrow
Account, if any, shall be deemed to be Offering Proceeds and shall
be held in the Funds Escrow Account until the Offering Proceeds are
released in accordance with the provisions of Rule 419. If Offering
Proceeds held in the Funds Escrow Account are released to an
Investor, the Investor shall receive interest or dividends earned,
if any, on such Offering Proceeds up to the date of release,
subject to compliance with the conditions hereinbefore set forth.
If Offering Proceeds held in the Funds Escrow Account are released
to the Company, interest or dividends earned on such Offering
Proceeds up to the date of release may be released to the Company.
4.5. Offering Proceeds including all interest and dividends
thereon, if any, shall be held for the sole benefit of the
Investors in the Registered Shares.
5. Disposition of Securities Following Completion of the Offering
(Rule 419 (b)(3)).
5.1. Paragraph (b)(3) of Rule 419, entitled Deposit of Securities,
provides as follows:
(i) All securities issued in connection with the
offering, whether or not for cash consideration, and any
other securities issued with respect to such securities,
including securities issued with respect to stock splits,
stock dividends, or similar rights, shall be deposited
directly into the escrow or trust account promptly upon
issuance. The identity of the purchaser of the securities
shall be included on the stock certificates or other
documents evidencing such securities. See also Rule 15g-8
regarding restrictions on sales of, or offers to sell,
securities deposited in the escrow or trust account.
(ii) Securities held in the escrow or trust account
are to remain as issued and deposited and shall be held for
the sole benefit of the purchasers, who shall have voting
rights, if any, with respect to securities held in their
names, as provided by applicable state law. No transfer or
other disposition of securities held in the escrow or trust
account or any interest related to such securities shall be
permitted 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.
(iii) Warrants, convertible securities or other
derivative securities relating to securities held in the
escrow or trust account may be exercised or converted in
accordance with their terms; provided, however, that
securities received upon exercise or conversion, together
with any cash or other consideration paid in connection
with the exercise or conversion, are promptly deposited
into the escrow or trust account.
5.2. Promptly upon the completion of the Offering, the Company
shall issue certificates evidencing the Registered Shares purchased
by the Investors and evidencing any other stock ("Other Stock") of
the Company issued in connection with the Offering (collectively
the "Certificates"). The identity of the purchaser or recipient of
the stock represented by each such Certificate shall be included on
the Certificate. The Company does not intend to issue any Other
Stock. The issuance of the Certificates shall be based upon the
books and records of the Company indicating the name, address, and
interest of each person entitled to the issuance of the
Certificates.
5.3. Prior to the completion of the Offering the Escrow Agent,
shall have established a custodial account in which the
Certificates may lodged in trust (the "Shares Escrow Account"). All
Certificates evidencing all Registered Shares issued in connection
with the Offering, whether or not for cash consideration,
evidencing the Unregistered Shares of the President, and evidencing
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any other securities issued with respect to such securities,
including securities issued with respect to stock splits, stock
dividends, or similar rights, shall promptly be delivered to the
Escrow Agent as Escrow Agent. The Escrow Agent shall cause the
Certificates to be deposited directly into the Shares Escrow
Account promptly upon issuance and receipt. The books and records
of the Escrow Agent shall indicate the name, address, interest, and
Certificate number of each person in whose name the deposited
Certificates have been issued.
5.4. Securities held in the Shares Escrow Account are to remain as
issued and deposited and shall be held for the sole benefit of the
Investors, who shall have voting rights, if any, with respect to
securities held in their names, as provided by applicable state
law. By reason of the operation of Rule 15g-8, no transfer or other
disposition of securities held in the Shares Escrow Account or any
interest related to such securities shall be permitted other than
by will or the laws of descent and distribution, or pursuant 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. The Escrow
Agent shall be entitled, but not required, to rely wholly upon the
advice of the Company with respect to any such request for
transfer, and shall be fully indemnified as hereinafter provided.
5.5. Warrants, convertible securities or other derivative
securities relating to securities held in the Shares Escrow Account
may be exercised or converted in accordance with their terms;
provided, however, that securities received upon exercise or
conversion, together with any funds or other consideration paid in
connection with the exercise or conversion, are promptly deposited
into the Funds Escrow Account or the Shares Escrow Account, as
applicable.
6. Conditions For Release of Deposited Securities and Funds (Rule
419(e)(3)).
6.1. Paragraph (e)(3) of Rule 419, entitled Conditions for Release
of Deposited Securities and Funds, provides as follows:
Funds held in the escrow or trust account may be
released to the registrant and securities may be delivered
to the purchaser or other registered holder identified on
the deposited securities only at the same time as or after:
(i) The escrow agent or trustee has received a signed
representation from the registrant, together with other
evidence acceptable to the escrow agent or trustee, that
the requirements of paragraphs (e)(1) and (e)(2) of this
section have been met; and
(ii) Consummation of an acquisition(s) meeting the
requirements of paragraph (e)(2)(iii) of this section."
6.2. The Offering Proceeds held in the Escrow Account, including
any interest and/or dividends thereon up to the date of release,
may be released to the Company and the Certificates for the
Registered Shares and other deposited securities, if any, up to the
date of delivery, may be delivered to the Investor or other
registered holder identified on the Registered Shares and other
deposited securities, if any, by certified mail, return receipt
requested, only at the same time as or after the Escrow Agent has
received a signed representation from the Company, together with
other evidence acceptable to the Escrow Agent, that:
6.2.a The requirements of Rule 419 (e)(1) and Rule 419(e)(2)
have been met. For informational purposes, reference is made to
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Exhibit A annexed hereto and made a part hereof, in which Rules 419
(e)(1) entitled Post-Effective Amendment for Acquisition Agreement
and 419(e)(2) entitled Terms of the Offering are set forth at
length.
6.2.b An acquisition(s) meeting the requirements of Rule
419(e)(2)(iii) has been fully consummated.
6.3. The Offering Proceeds held in the Escrow Account, including
any interest and/or dividends thereon up to the date of release,
shall be returned by first class mail or equally prompt means to
the Investors within five business days following the dates set
forth below (the "Termination Dates") and the Registered Shares and
other deposited securities, if any, up to the date of delivery,
held in the Shares Escrow Account shall contemporaneously be
cancelled, except for the Unregistered Shares which shall be
returned to the President, and the Registration Statement shall be
formally withdrawn.
6.3.a The date on which, following full compliance by the
Company with the requirements of Rule 419(e)(1) and (e)(2), the
consummation of an acquisition shall be precluded by reason of the
failure of Company to meet the requirements of Rule 419(e)(2)(iii),
unless the Company shall determine to seek another merger or
acquisition, in which event the Company promptly shall advise all
Investors in writing.
6.3.b The date, 18 months from the effective date of the
Initial Registration Statement, at which time a consummated
acquisition(s) meeting the requirements of Rule 419 shall not have
occurred.
6.4. The conditions and requirements of Rule 419(e) shall hereafter
be referred to as the "Plan Prerequisites").
7. Disbursement into Court.
7.1. If, at any time, there shall exist any dispute between Company
and an Investor with respect to the holding or disposition of any
portion of the Escrow Accounts, or any other obligations of the
Escrow Agent hereunder, or if at any time the Escrow Agent is
unable to determine, to Escrow Agent's sole satisfaction, the
proper disposition of any portion of the Escrow Accounts or Escrow
Agent's proper actions with respect to its obligations hereunder,
or if the Escrow Agent resigns or is removed and no successor is
appointed by the written direction of the Company (the "Written
Direction") within twenty (20) banking business days ("Business
Days") after such resignation or within ten (10) Business Days
after such removal, then the Escrow Agent may, in its sole
discretion:
7.1.a Suspension. Escrow Agent may suspend the performance of
any of its obligations (including, without limitation, any
disbursement obligations) under this Agreement until such dispute
or uncertainty shall be resolved to the sole satisfaction of Escrow
Agent; provided, however, that Escrow Agent shall continue to hold
the Escrow Accounts in accordance herewith, and/or
7.1.b Petition. The Escrow Agent may petition (by means of an
interpleader action or any other appropriate method) any court of
competent jurisdiction in the State of Illinois, for instructions
with respect to such dispute or uncertainty, and, to the extent
required by law, pay into such court all Escrow Accounts held by it
/11/
for holding by such court and disposition in accordance with the
procedures set forth in the Subscription Papers, or as otherwise
ordered by such court, after deduction and payment to Escrow Agent
of all fees and expenses (including court costs, attorney's fees,
and paraprofessional fees) payable to, incurred by, or expected to
be incurred by Escrow Agent in connection with the performance of
its duties and the exercise of its rights hereunder.
7.2. Escrow Agent shall have no liability to the Company or any
other person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or
claimed liability that may arise, or be alleged to have arisen, out
of or as a result of a delay in the disbursement of the Escrow
Accounts or any delay in or with respect to any other action
required or requested of the Escrow Agent.
8. Resignation and Removal of the Escrow Agent.
8.1. General. The Escrow Agent may resign from the performance of
its duties at any time by giving twenty (20) Business Days' prior
written notice to the Company, or may be removed, with or without
cause, by a written notice from an authorized representative of the
Company, designated herein or designated in writing herein by the
designee herein (the "Company Representative") to the Escrow Agent
at any time by the giving of ten (10) Business Days' prior written
notice to the Escrow Agent. Such resignation or removal shall take
effect upon the appointment of a successor Escrow Agent as provided
herein below and the successor Escrow Agent's acceptance of the
appointment. Upon any such notice of resignation or removal, a
Company Representative shall appoint a successor Escrow Agent
hereunder by written direction.
8.2. Discharge of LaSalle Bank National Association. LaSalle Bank
National Association shall be discharged from its duties and
obligations under this Agreement upon the appointment of any
successor Escrow Agent; provided, however, the provisions of this
Agreement benefiting Escrow Agent shall continue to inure to the
benefit of LaSalle Bank National Association as to any actions
taken or omitted to be taken by it while it was Escrow Agent under
this Agreement.
8.3. Transmittal of Records. Upon its resignation or replacement,
the Escrow Agent shall pay or deliver the balances and contents of
all of the Escrow Accounts, together with copies of all documents
and records in the possession of the Escrow Agent relating to the
Escrow Accounts, to the successor Escrow Agent, but only after
receipt of payment to the Escrow Agent from Eagle Golf Corp. of all
reasonable fees and expenses (including court costs, attorneys'
fees, and paraprofessional fees) payable to, incurred by, or
expected to be incurred by the Escrow Agent in connection with the
performance of its duties and the exercise of its rights hereunder.
No invasion of the contents of an Escrow Account shall be made by
the Escrow Agent or by a successor Escrow Agent, such invasion
constituting a violation of Rule 419.
9. Duties of the Escrow Agent to be Wholly Ministerial.
9.1. General. The duties of the Escrow Agent hereunder shall be
entirely ministerial in nature and not discretionary. The Escrow
Agent shall be obligated to act only in accordance with written
instructions received by it as provided in this Agreement, and is
hereby authorized to comply with any orders, judgments, or decrees
of any court, with or without jurisdiction, and shall not be liable
as a result of its compliance with the same. The Escrow Agent shall
have no duty or obligation to assure itself that the Offering is in
compliance with any statute or regulation prior to the disbursement
to the Company or to any Investor of the contents of any Escrow
Accounts.
/12/
9.2. Direction to Act. Before the Escrow Agent acts or refrains
from acting, it may request, and shall be entitled to receive,
written direction from the Company. The Escrow Agent shall not be
liable for any action it takes or omits to take in good faith
reliance on such written direction.
10. Indemnity. From and at all times after the date of this
Agreement, the Company shall, to the fullest extent permitted by
law and to the extent provided herein, indemnify and hold harmless
the Escrow Agent and each director, officer, employee, attorney,
agent and affiliate of Escrow Agent (individually the "Indemnified
Party" and collectively the "Indemnified Parties") against any and
all actions, claims (whether or not valid), losses, damages,
liabilities, costs and expenses of any kind or nature whatsoever,
including without limitation reasonable attorneys' fees,
paraprofessional fees and costs and expenses related to such
actions, claims, losses, damages, and liabilities incurred by or
asserted against any of the Indemnified Parties from and after the
date hereof, whether direct, indirect or consequential, as a result
of or arising from or in any way relating to any claim, demand,
suit, action or proceeding (including any inquiry or investigation)
by any person, whether threatened or initiated, asserting a claim
for any legal or equitable remedy against any person under any
statute or regulation, including, but not limited to, any federal
or state securities laws, or under any common law or equitable
cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of
performance of this Agreement or any transactions contemplated
herein (including the purchase of the Units) whether or not any
such one or more of the Indemnified Parties are parties to any such
action, proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall
have the right to be indemnified hereunder for any liability
finally determined by a court of competent jurisdiction, subject to
no further appeal, to have resulted solely from the gross
negligence or willful misconduct of such Indemnified Party. Without
limiting the foregoing, the Company shall specifically indemnify
the Escrow Agent in connection with any claim made by an Investor
in connection with the release of the contents of the Escrow
Accounts to the Company pursuant to the terms hereof. All such fees
and expenses shall be payable by the Company pursuant to the
foregoing sentence and shall be paid from time to time as incurred,
both in advance of and after the final disposition of such action
or claim. In addition, the Company hereby agrees to indemnify the
Escrow Agent and hold it harmless from any liability of Escrow
Agent which shall arise as a result of the breach or violation by
the Company of any of the provisions of this Agreement, the
Subscription Documents, the Initial Registration Statement, the
Amended Registration Statement or any other rules, regulations, or
laws affecting the Offering or the Registered Shares. The Company
hereby agrees that it shall, at all times, comply with all of the
provisions of the applicable federal and state securities laws, as
well as all laws, statutes, rules and regulations of any
governmental agency or self-regulatory organization in such cases
made and provided. The obligations of the Company under this
paragraph shall survive any termination of this Agreement and the
resignation or removal of the Escrow Agent.
11. Limitation of Liability of Escrow Agent.
11.1. The obligations of the Escrow Agent shall be determined
solely by the express provisions of this Agreement. The Escrow
Agent may act in reliance upon any writing, instrument, and/or
signature, whether original or facsimile, which the Escrow Agent,
in good faith, believes to be genuine, may assume the validity,
truth, and accuracy of any statement or assertion contained in such
a writing or instrument, and that any person purporting to give any
writing, notice, advice, or instruction in connection with the
provisions hereof has been duly authorized to do so. The Escrow
Agent shall not be liable in any manner for the sufficiency or
correctness as to form, manner or validity of any instrument
deposited or delivered pursuant to this Agreement, nor as to the
identity, authority, or right of any person executing the same.
Without limiting the foregoing, the Escrow Agent shall have no
responsibility to determine whether the holding, disbursement,
/13/
payment or delivery of the contents of an Escrow Account is
appropriate or required under the applicable documents.
11.2. The Escrow Agent has not examined and is in no way
responsible for the contents of the Subscription Agreement or any
of the other Subscription Documents. By accepting the position of
Escrow Agent, the Escrow Agent and the Company agree that the
Escrow Agent's duties and obligations are set forth solely in this
Agreement and Escrow Agent has not evaluated the merits of the
Offering. The Company shall prevent any person or entity from using
the Escrow Agent's name as an endorser of the Offering. The Escrow
Agent has no responsibility for the Subscription Documents, the
registration of the Shares to be offered in the Offering, or the
propriety, content or form of any of the documents relevant to the
Offering including the Initial Registration Statement, the post-
effective amendment to the Initial Registration Statement with
respect to the Plan Prerequisites (the "Amended Registration
Statement"), the exhibits thereto, the validity of the Registered
Shares, or the Subscription Documents.
11.3. The Escrow Agent shall have no liability or obligation
with respect to the contents of the Escrow Accounts except for the
Escrow Agent's willful misconduct or gross negligence. The Escrow
Agent's sole responsibility shall be for the safekeeping,
investment, and disbursement of the contents of the Escrow Accounts
in accordance with the terms of this Agreement.
11.4. The Escrow Agent shall have no implied duties or
obligations and shall not be charged with knowledge or notice of
any fact or circumstance not specifically set forth herein.
11.5. The Escrow Agent is not familiar with, and has no
knowledge of, either the Offering Documents or the Subscription
Documents.
11.6. In no event shall the Escrow Agent be liable for
incidental, indirect, special, consequential or punitive damages.
11.7. The Escrow Agent shall not be obligated to take any legal
action or commence any proceeding in connection with the contents
of the Escrow Accounts, this Agreement, or the Subscription
Documents, or to appear in, prosecute, or defend any such legal
action or proceeding. The Escrow Agent may consult legal counsel
selected by it in the event of any dispute or question as to the
construction of any of the provisions hereof or any other agreement
or of its duties hereunder, and shall incur no liability and shall
be fully protected from any liability whatsoever in acting in
accordance with the opinion or instruction of such counsel. The
Company shall promptly pay upon demand the reasonable fees and
expenses of such counsel and its paraprofessionals.
11.8. The Escrow Agent is authorized, in its sole discretion,
to comply with orders issued or process entered by any court
situated within the State of Illinois with respect to the contents
of the Escrow Accounts, without determination by the Escrow Agent
of such court's jurisdiction in the matter. If any portion of the
contents of the Escrow Accounts is at any time attached, garnished,
or levied upon under any order of any such court, or if the
payment, assignment, transfer, conveyance, or delivery of the
contents of the Escrow Accounts shall be stayed or enjoined by any
order of any such court, or if any order, judgment, or decree shall
be made or entered by any court affecting the contents of the
Escrow Accounts, then in any such event, after a good faith effort
to notify the Company, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ,
judgment, or decree which it is advised by its legal counsel is
binding upon the Escrow Agent without the need for appeal or other
/14/
action. If the Escrow Agent complies with any such order, writ,
judgment or decree, it shall not be liable to any of the parties
hereto or to any other person or entity by reason of such
compliance even though such order, writ, judgment, or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
12. Fees and Expenses of Escrow Agent.
12.1. The Company shall compensate the Escrow Agent for its
services hereunder in accordance with the fee schedule of the
Escrow Agent and, in addition, shall reimburse Escrow Agent for all
of its reasonable out-of-pocket expenses, including, without
limitation, attorneys' fees, telephone and facsimile transmission
costs, postage (including express mail or overnight delivery
charges), copying charges and the like. The obligations of Company
under this section shall survive any termination of this Agreement
and the resignation or removal of Escrow Agent.
12.2. The fee schedule of the Escrow Agent is annexed hereto as
Exhibit D and made a part hereof.
13. Consent to Jurisdiction and Venue. In the event that any
party hereto or an commences a lawsuit or other proceeding relating
to or arising from this Agreement, the parties hereto agree that
the Superior Court of Illinois shall have the sole and exclusive
jurisdiction over any such proceedings.
14. Notices. All notices and other communications hereunder
shall be in writing and shall be dispatched by a recognized
professional overnight courier or by facsimile transmission with
telephone confirmation and addressed to the party to be notified as
follows:
If to Company:
Eagle Golf Corp.
0000 Xxxx Xxxxxx, Xxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telephone (000) 000-0000
Facsimile: (000) 000-0000
If to Escrow Agent:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address as each party may designate for
itself by like notice.
15. Representations and Warranties of the Company. The Company
makes the following representations and warranties to the Escrow
Agent:
15.1. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of its state of
incorporation and has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder;
/15/
15.2. This Agreement has been duly approved by all necessary
shareholder and board of directors action of the Company, has been
executed by duly authorized officers of Company, and constitutes a
valid and binding agreement of Company, enforceable in accordance
with its terms.
15.3. The execution, delivery, and performance by Company of
this Agreement is in accordance with the Subscription Documents and
will not violate, conflict with, or cause a default under the
articles of incorporation or bylaws of Company, any applicable law
or regulation, any court order or administrative ruling or decree
which Company is a party or any of its property is subject, or any
agreement, contract, indenture, or other binding arrangement,
including without limitation the Subscription Documents to which
Company is a party or any of its property is subject.
15.4. The individuals listed on the Company's Specimen
Signature Schedule have been duly appointed to act as the
representatives of Company hereunder and each acting independently
has full power and authority to execute, deliver, and perform this
Agreement, to execute and deliver any notice required hereunder, to
amend, modify or waive any provision of this Agreement and to take
any and all other actions as the Company Representative under this
Agreement, all without further consent or direction from, or notice
to, Company or any other party.
15.5. All of the representations and warranties of the Company
contained herein are true and complete as of the date hereof and
will be true and complete at the time of any disbursement or
delivery from the Escrow Accounts.
15.6. The Company's Specimen Signature Schedule is annexed
hereto as Exhibit E and made a part hereof.
16. General.
16.1. Amendment or Waiver. This Agreement may be changed,
waived, discharged or terminated only by a writing signed by a
Company Representative on behalf of the Company and Escrow Agent.
No delay or omission by any party in exercising any right with
respect hereto shall operate as a waiver. A waiver on any one
occasion shall not be construed as a bar to, or waiver of, any
right or remedy on any future occasion.
16.2. Severability. To the extent any provision of this
Agreement is prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Agreement.
16.3. Governing Law. This Agreement shall be construed and
interpreted in accordance with the internal laws of the State of
Illinois without giving effect to the conflict of laws principles
thereof, which, if applied, would cause the law of any jurisdiction
to apply.
16.4. Entire Agreement; No Third Party Beneficiaries. This
Agreement sets forth in their entirety the obligations and duties
of Escrow Agent with respect to the Escrow Accounts. Investors, and
the Company may have additional rights and obligations respecting
the Escrow Accounts under the Subscription Documents. No third
party shall be a beneficiary of this Agreement, or derive any
rights or benefits, or have any causes of action, hereunder.
/16/
16.5. Binding Effect. All of the terms of this Agreement, as
amended from time to time, shall be binding upon, insure to the
benefit of and be enforceable by the Company, by the Escrow Agent
and by their respective successors and assigns.
16.6. Dealings. The Escrow Agent and any stockholder, director,
officer or employee of Escrow Agent may buy, sell, and deal in any
of the securities of the Company and its affiliates and become
pecuniarily interested in any transaction in which the Company may
be in interest, and contract and lend money to the Company or to
any Investor and otherwise act as fully and freely as though it
were not the Escrow Agent under this Agreement. Nothing herein
shall preclude the Escrow Agent from acting in any other capacity
for the Company, for any Investor or for any other entity.
16.7. Assignment. No party to this Agreement may assign its
rights or delegate its obligations under this Agreement without the
express written consent of the other parties, except as otherwise
set forth in this Agreement.
16.8. Headings. The section headings contained in this
Agreement are intended to be employed solely and exclusively for
the convenience of the parties, are not the subject of any
agreement among the parties, and shall have no effect of any kind
on the interpretation of this Agreement or of any terms or
provisions thereof.
16.9. Counterparts. This Agreement may be executed in
counterparts, a complete set of which shall be deemed to comprise a
single Agreement.
In Witness Whereof, the parties hereto have caused this
Agreement to be executed by their respective corporate officers,
thereunto duly authorized.
EAGLE GOLF CORP.
By /s/ Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx, President (Print Name and Title)
LASALLE BANK NATIONAL ASSOCIATION
By /s/ X. X. Xxxxxxx
----------------------------------
X. X. Xxxxxxx, First Vice President (Print Name and Title)
/17/
EXHIBIT A
RULES 419, 15g-8 AND 10b-9
RULE 419. OFFERINGS BY BLANK CHECK COMPANIES
(a) Scope of the Rule and Definitions.
(1) The provisions of this section shall apply to every
registration statement filed under the Act relating to an offering
by a blank check company.
(2) For purposes of this section, the term "blank check company"
shall mean a company that:
(i) Is a development stage company that has no specific business
plan or purpose or has indicated that its business plan is to
engage in a merger or acquisition with an unidentified company or
companies, or other entity or person; and
(ii) Is issuing "xxxxx stock," as defined in Rule 3a51-1 under the
Securities Exchange Act of 1934 ("Exchange Act").
(3) For purposes of this section, the term "purchaser" shall mean
any person acquiring securities directly or indirectly in the
offering, for cash or otherwise, including promoters or others
receiving securities as compensation in connection with the
offering.
(b) Deposit of Securities and Proceeds in Escrow or Trust Account.
(I) General.
(i) Except as otherwise provided in this section or prohibited by
other applicable law, all securities issued in connection with an
offering by a blank check company and the gross proceeds from the
offering shall be deposited promptly into:
(A) An escrow account maintained by an "insured depository
institution," as that term is defined in Section 3(c)(2) of the
Federal Deposit Insurance Act; or
(B) A separate bank account established by a broker or dealer
registered under the Exchange Act maintaining net capital equal to
or exceeding $15,000 (as calculated pursuant to Exchange Act Rule
15c3-1), in which the broker or dealer acts as trustee for persons
having the beneficial interests in the account.
(ii) If funds and securities are deposited into an escrow account
maintained by an insured depository institution, the deposit
account records of the insured depository institution must provide
that funds in the escrow account are held for the benefit of the
purchasers named and identified in accordance with Rule 330.1 of
the regulations of the Federal Deposit Insurance Corporation, and
the records of the escrow agent, maintained in good faith and in
the regular course of business, must show the name and interest of
each party to the account. If funds and securities are deposited in
a separate bank account established by a broker or dealer acting as
a trustee, the books and records of the broker-dealer must indicate
the name, address, and interest of each person for whom the account
is held.
(2) Deposit and Investment of Proceeds.
/18/
(i) All offering proceeds, after deduction of cash paid for
underwriting commissions, underwriting expenses and dealer
allowances, and amounts permitted to be
released to the registrant pursuant to paragraph (b)(2)(vi) of this
section, shall be deposited promptly into the escrow or trust
account; provided, however, that no deduction may be made for
underwriting commissions, underwriting expenses or dealer
allowances payable to an affiliate of the registrant.
(ii) Deposited proceeds shall be in the form of checks, drafts, or
money orders payable to the order of the escrow agent or trustee.
(iii) Deposited proceeds and interest or dividends thereon, if any,
shall be held for the sole benefit of the purchasers of the
securities.
(iv) Deposited proceeds shall be invested in one of the following:
(A) An obligation that constitutes a "deposit," as that term is
defined in Section (3) (1) of the Federal Deposit Insurance Act;
(B) Securities of any open-end investment company registered under
the Investment Company Act of 1940 that holds itself out as a money
market fund meeting the conditions of paragraphs (c) (2), (c) (3),
and (c) (4) of Rule 2a-7 under the Investment Company Act; or
(C) Securities that are direct obligations of, or obligations
guaranteed as to principal or interest by, the United States.
Note to Rule 419(6)(2)(iv). Issuers are cautioned that investments
in government securities are inappropriate unless such securities
can be readily sold or otherwise disposed of for cash at the time
required without any dissipation of offering proceeds invested.
(v) Interest or dividends earned on the funds, if any, shall be
held in the escrow or trust account until the funds are released in
accordance with the provisions of this section. If funds held in
the escrow or trust account are released to a purchaser of the
securities, the purchaser shall receive interest or dividends
earned, if any, on such funds up to the date of release. If funds
held in the escrow or trust account are released to the registrant,
interest or dividends earned on such funds up to the date of
release may be released to the registrant.
(vi) The registrant may receive up to 10 percent of the proceeds
remaining after payment of underwriting commissions, underwriting
expenses and dealer allowances permitted by paragraph (b)(2)(i) of
this section, exclusive of interest or dividends, as those proceeds
are deposited into the escrow or trust account.
(3) Deposit of Securities.
(i) All securities issued in connection with the offering, whether
or not for cash consideration, and any other securities issued with
respect to such securities, including securities issued with
respect to stock splits, stock dividends, or similar rights, shall
be deposited directly into the escrow or trust account promptly
upon issuance. The identity of the purchaser of the securities
shall be included on the stock certificates or other documents
evidencing such securities. See also Rule 15g-8 regarding
restrictions on sales of, or offers to sell, securities deposited
in the escrow or trust account.
/19/
(ii) Securities held in the escrow or trust account are to remain
as issued and deposited and shall be held for the sole benefit of
the purchasers, who shall have voting rights, if any, with respect
to securities held in their names, as provided by applicable state
law. No transfer or other disposition of securities held in the
escrow or trust account or any interest related to such securities
shall be permitted 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.
(iii) Warrants, convertible securities or other derivative
securities relating to securities held in the escrow or trust
account may be exercised or converted in accordance with their
terms; provided, however, that securities received upon exercise or
conversion, together with any cash or other consideration paid in
connection with the exercise or conversion, are promptly deposited
into the escrow or trust account.
(4) Escrow or Trust Agreement.
A copy of the executed escrow or trust agreement shall be filed as
an exhibit to the registration statement and shall contain the
provisions of paragraphs (b)(2), (b)(3), and (e)(3) of this
section.
(5) Request For Supplemental Information.
Upon request by the Commission or the staff, the registrant shall
furnish as supplemental information the names and addresses of
persons for whom securities are held in the escrow or trust
account.
Note to Rule 419(b). With respect to a blank check offering subject
to both Rule 419 and Exchange Act Rule 15c2-4, the requirements of
Rule 15c2-4 are applicable only until the conditions of the
offering governed by that rule are met (e.g., reaching the minimum
in a "part-or-none" offering). When those conditions are satisfied,
Rule 419 continues to govern the use of offering proceeds.
(c) Disclosure of Offering Terms.
The initial registration statement shall disclose the specific
terms of the offering, including, but not limited to:
(1) The terms and provisions of the escrow or trust agreement and
the effect thereof upon the registrant's right to receive funds and
the effect of the escrow or trust agreement upon the purchaser's
funds and securities required to be deposited into the escrow or
trust account, including, if applicable, any material risk of non-
insurance of purchasers' funds resulting from deposits in excess of
the insured amounts; and
(2) The obligation of the registrant to provide, and the right of
the purchaser to receive, information regarding an acquisition,
including the requirement that pursuant to this section, purchasers
confirm in writing their investment in the registrant's securities
as specified in paragraph (e) of this section.
(d) Probable Acquisition Post-Effective Amendment Requirement.
If, during any period in which offers or sales are being made, a
significant acquisition becomes probable, the registrant shall file
promptly a post-effective amendment disclosing the information
specified by the applicable registration statement form and
/20/
Industry Guides, including financial statements of the registrant
and the company to be acquired as well as pro forma financial
information required by the form and applicable rules and
regulations. Where warrants, rights or other derivative securities
issued in the initial offering are exercisable, there is a
continuous offering of the underlying security.
(e) Release of Deposited and Funds Securities.
(1) Post-Effective Amendment For Acquisition Agreement.
Upon execution of an agreement(s) for the acquisition(s) of a
business(es) or assets that will constitute the business (or a line
of business) of the registrant and for which the fair value of the
business(es) or net assets to be acquired represents at least 80
percent of the maximum offering proceeds, including proceeds
received or to be received upon the exercise or conversion of any
securities offered, but excluding amounts payable to non-affiliates
for underwriting commissions, underwriting expenses, and dealer
allowances, the registrant shall file a post-effective amendment
that:
(i) Discloses the information specified by the applicable
registration statement form and Industry Guides, including
financial statements of the registrant and the company acquired or
to be acquired and pro forma financial information required by the
form and applicable rules and regulations;
(ii) Discloses the results of the initial offering, including but
not limited to:
(A) The gross offering proceeds received to date, specifying the
amounts paid for underwriter commissions, underwriting expenses and
dealer allowances, amounts disbursed to the registrant, and amounts
remaining in the escrow or trust account; and
(B) The specific amount, use and application of funds disbursed to
the registrant to date, including, but not limited to, the amounts
paid to officers, directors, promoters, controlling shareholders or
affiliates, either directly or indirectly, specifying the amounts
and purposes of such payments; and
(iii) Discloses the terms of the offering as described pursuant to
paragraph (e) (2) of this section.
(2) Terms of the Offering.
The terms of the offering must provide, and the registrant must
satisfy, the following conditions:
(i) Within five business days after the effective date of the post-
effective amendment(s), the registrant shall send by first class
mail or other equally prompt means, to each purchaser of securities
held in escrow or trust, a copy of the prospectus contained in the
post-effective amendment and any amendment or supplement thereto;
(ii) Each purchaser shall have no fewer than 20 business days and
no more than 45 business days from the effective date of the post-
effective amendment to notify the registrant in writing that the
purchaser elects to remain an investor. If the registrant has not
received such written notification by the 45th business day
following the effective date of the post-effective amendment, funds
and interest or dividends, if any, held in the escrow or trust
account shall be sent by first class mail or other equally prompt
means to the purchaser within five business days;
(iii) The acquisition (s) meeting the criteria set forth in
paragraph (e) (1) of this section will be consummated if a
sufficient number of purchasers confirm their investments; and
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(iv) If a consummated acquisition(s) meeting the requirements of
this section has not occurred by date 18 months after the effective
date of the initial registration statement, funds held in the
escrow or trust account shall be returned by first class mail or
equally prompt means to the purchaser within five business days
following that date.
(3) Conditions For Release of Deposited Securities and Funds.
Funds held in the escrow or trust account may be released to the
registrant and securities may be delivered to the purchaser or
other registered holder identified on the deposited securities only
at the same time as or after:
(i) The escrow agent or trustee has received a signed
representation from the registrant, together with other evidence
acceptable to the escrow agent or trustee, that the requirements of
paragraphs (e)(1) and (e)(2) of this section have been met; and
(ii) Consummation of an acquisition(s) meeting the requirements of
paragraph (e)(2)(iii) of this section.
(4) Prospectus Supplement.
If funds and securities are released from the escrow or trust
account to the registrant pursuant to this paragraph, the
prospectus shall be supplemented to indicate the amount of funds
and securities released and the date of release.
Notes to Rule 419(e).
1. With respect to a blank check offering subject to both Rule 419
and Exchange Act Rule 10b-9, the requirements of Rule l0b-9 are
applicable only until the conditions of the offering governed by
that rule are met (e.g., reaching the minimum in a "part- or-none"
offering). When those conditions are satisfied, Rule 419 continues
to govern the use of offering proceeds.
2. If the business(es) or assets are acquired for cash, the fair
value shall be presumed to be equal to the cash paid. If all or
part of the consideration paid consists of securities or other non-
cash consideration, the fair value shall be determined by an
accepted standard, such as bona fide sales of the assets or similar
assets made within a reasonable time, forecasts of expected cash
flows, independent appraisals, etc. Such valuation must be
reasonable at the time made.
(f) Financial Statements. The registrant shall:
(1) Furnish to security holders audited financial statements for
the first full fiscal year of operations following consummation of
an acquisition pursuant to paragraph (e) of this section, together
with the information required by Item 303 (a) of Regulation S-K, no
later than 90 days after the end of such fiscal year; and
(2) File the financial statements and additional information with
the Commission under cover of Form 8-K; provided, however, that
such financial statements and related information need not be filed
separately if the registrant is filing reports pursuant to Section
13(a) or 15(d) of the Exchange Act.
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RULE 15G-8. SALES OF ESCROWED SECURITIES OF BLANK CHECK COMPANIES
As a means reasonable designed to prevent fraudulent, deceptive, or
manipulative act or practices, it shall be unlawful for any person
to sell or offer to sell any security that is deposited and held in
an escrow or trust account pursuant to Rule 419 under the
Securities Act of 1933, or any interest in or related to such
security, other than 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.
RULE 10B-9. PROHIBITED REPRESENTATIONS IN CONNECTION WITH CERTAIN
OFFERINGS
(a) It shall constitute a manipulative or deceptive device or
contrivance, as used in Section 10(b) of the Act, for any person,
directly or indirectly, in connection with the offer or sale of any
security, to make any representation:
(1) To the effect that the security is being offered or sold on an
"all-or-none" basis, unless the security is part of an offering or
distribution being made on the condition that all or a specified
amount of the consideration paid for such security will be promptly
refunded to the purchaser unless
(A) all the securities being offered are sold at a specified price
within a specified time, and
(B) the total amount due to the seller is received by him by a
specified date ;or
(2) To the effect that security is being offered or sold on any
other basis whereby all or part of the consideration paid for any
such security will be refunded to the purchaser if all or some of
the securities are not sold, unless the security is part of an
offering or distribution being made on the condition that all or a
specified part of the consideration paid for such security will be
promptly refunded to the purchaser unless
(A) a specified number of units of the security are sold at a
specified price within a specified time, and
(B) the total amount due to the seller is received by him by a
specified date.
(b) This rule shall not apply to any offer or sale of securities as
to which the seller has a firm commitment form underwriters or
others (subject only to customary condition precedent, including
"market outs") for the purchase of all the securities being
offered.
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EXHIBIT B
SUBSCRIPTION AGREEMENT (SUBSCRIPTION RIGHTS)
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EXHIBIT D
FEES PAYABLE TO ESCROW AGENT
Administration Fee:
Annual Administration Fee (In advance-- no pro-ration): $2,500.00
(includes first 25 Investors)
After 25 Investors: $15.00 per Investor
One-Time Setup Fee: $500.00
Activity Charges:
Returned Checks: $25.00 each
Wire to Investors: $15.00 each domestic; $25.00 each foreign
1099 Preparation and Reporting: $10.00 per Investor; $200.00
Minimum
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EXHIBIT E
SPECIMEN SIGNATURES OF REPRESENTATIVES
COMPANY REPRESENTATIVE(S)
Name: Xxxx X. Xxxxxxxx
Specimen Signature: /s/ Xxxx X. Xxxxxxxx
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EXHIBIT F
LETTER REPRESENTATIONS AND INSTRUCTIONS BY COMPANY TO ESCROW AGENT
1. FORMS OF CLOSING AND SIGNATURE BLOCKS:
All such letters shall be signed in behalf of the Company and shall
end with the following final paragraph and closing. The letters
shall use the signature block. In the sections below setting forth
the texts of the letters, the instructions " signed by Company "
shall be complied with by utilizing the signature block set forth
below.
"This letter may be executed in counterparts, which, when taken
together, shall be deemed a single original."
"Very truly yours,"
Eagle Golf Corp.
By______________________________
Xxxx X. Xxxxxxxx, President (Print Name)
Title: Company Representative
Date:___________________________
2. INSIDE ADDRESS, ATTENTION, REFERENCE, GREETING AND OPENING
PARAGRAPH:
All such letters shall set forth the following inside address,
attention, reference, greeting and opening paragraph.
"LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxxxxx 00000
Attention of Xxxxx X. Xxxxxxx, Assistant Vice President
"Re: Escrow Agreement (the "Agreement") Among Eagle Golf Corp.
(the "Company") and LaSalle Bank National Association ("Escrow
Agent") dated as of August 12th, 2002.
"Dear Sirs and Mesdames:
"All terms set forth in this letter shall have the meanings set
forth in the Agreement."
3. TEXTS OF LETTERS.
The letters shall contain one or another of the following texts:
3.1 Confirmation That Escrow Agreement Delivered to all Investors.
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"The undersigned hereby confirm that the following Investors whose
names appear on the schedule annexed hereto have been given a copy
of the Subscription Agreement." signed by the Company
3.2 Instructions for Disposition of Offering Proceeds During
Offering or at Termination of Offering.
"You are holding a Funds Escrow Account respecting the Offering.
The contents of such account and all interest or dividends accrued
thereon are to be returned to each Investor in the amounts and at
the addresses as they appear in your records. The reason for this
request is that all of the Registered Shares have not been sold
during the Offering Period, which has expired, and/or the other
conditions to disbursement of the contents of the Funds Escrow
Account have not been achieved." signed by Company
or
"You are holding a Funds Escrow Account respecting the Offering.
The contents of such account and all interest or dividends accrued
thereon are to be returned to each Investor in the amounts and at
the addresses as they appear in your records. The reason for this
request is that all of the Registered Shares have not been sold and
the Company has elected to terminate the Offering prior to the
expiration of the Offering Period." signed by Company
or
"You are holding a Funds Escrow Account respecting the Offering.
The Company has elected to cancel a portion in the amount of
$_________________of the subscription of the following Investor,
_______________________________. At such time as the amount of this
subscription has been fully collected, the amount of the cancelled
portion of the subscription, with accumulated interest or
dividends, if any, is to be returned to the Investor at the address
indicated in the Investor's Subscription Agreement and the balance
retained in the Funds Escrow Account for the benefit of such
Investor." signed by Company
or
"You are holding a Funds Escrow Account respecting the Offering.
The Company has elected to reject in full the subscription in the
amount of $_________________of the following Investor,
_______________________________. At such time as the amount of this
subscription has been fully collected, this amount, with
accumulated interest or dividends, if any, is to be returned to the
Investor at the address indicated in the Investor's Subscription
Agreement." signed by Company
or
"You are holding a Funds Escrow Account respecting the Offering.
The Offering has successfully been completed during the Offering
Period by way of the sale of all of the Registered Shares and the
collection of all of the Offering Proceeds in the principal amount
of $150,000. The Offering Period is accordingly ended and the Plan
Period is accordingly commenced. You are to deliver, by way of
recognized courier service, your bank check in the amount of
$15,000 to Eagle Golf Corp., payable to its order, and to continue
to hold the balance of the Offering Proceeds in the Funds Escrow
Account for the sole interest of those persons having a beneficial
interest therein, in accordance with Rule 419 and the Plan. We
deliver to you herewith the Certificates, with respect to each of
which Certificates the certificate number, the amount of Registered
Shares evidenced thereby, and the ownership registration, is set
forth in the schedule annexed hereto. The Certificates are to be
held by you in the Shares Escrow Account in accordance with Rule
419 and the Plan. We further represent to you that (a) the
Subscription Documents are effective and, to the best of Company's
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knowledge, no person or regulatory federal or state regulatory
authority has taken or threatened to take any action in connection
with the Subscription Documents or the Offering of the Shares
pursuant thereto; (b) the conditions to the completion of the
Offering, i.e. the sale of all of the Registered Shares, have been
achieved and, to the best of Company's knowledge, no Investor has
objected or threatened to object to the release of the Escrow
Funds; and (c) All periods for the rescission of subscriptions
applicable under Nevada Statutes and the Nevada Code of
Regulations, and under all other state and federal statutes, rules
or regulations, have expired." signed by Company
3.2 Instructions for Disposition of Offering Proceeds and
Certificates During or at Termination of Plan Period.
"You are holding a Funds Escrow Account and a Shares Escrow Account
with respect to the Company's Plan and the provisions of Rule 419.
The Company has, to date, been unsuccessful in implementing its
Plan to engage in a merger or acquisition with an unidentified
company or companies and does not foresee accomplishing a
successful implementation of its Plan in the future. Accordingly,
the Company has elected to terminate its Plan. Based on the
requirements of Rule 419, you are instructed that the contents of
the Funds Escrow Account and all interest or dividends accrued
thereon are promptly to be returned to each Investor in the amounts
and at the addresses as they appear in your records. The
Certificates in the Shares Escrow Account are to be returned to the
Company." signed by Company
or
"You are holding a Funds Escrow Account and a Shares Escrow Account
with respect to the Company's Plan and the provisions of Rule 419.
Eighteen months since the effective date of the Initial
Registration Statement will have passed on ______________________.
The Company has, to date, been unsuccessful in implementing its
Plan to engage in a merger or acquisition with an unidentified
company or companies. Based on the requirements of Rule 419, you
are instructed that the contents of the Funds Escrow Account and
all interest or dividends accrued thereon are promptly, and in all
events not later than five business days from the above mentioned
date, to be returned to each Investor in the amounts and at the
addresses as they appear in your records. The Certificates in the
Shares Escrow Account are to be returned to the Company." signed
by Company
or
"You are holding a Funds Escrow Account and a Shares Escrow Account
with respect to the Company's Plan and the provisions of Rule 419.
The Company has filed a post- effective amendment to the Initial
Registration Statement and, within five business days after the
effective date thereof, has sent to each Investor a copy of the
prospectus contained in the said post-effective amendment, in
accordance with the requirements of Rule 419(e)(2)(i). The
Investors who do not, within 45 business days following the
effective date of the said post-effective amendment, provide the
Company with written confirmation of their intent to remain an
Investor in the Registered Shares, shall be entitled to a refund
from the Funds Escrow Account of their subscription price for the
Registered Shares, together with interest and dividends, if any.
The forty- fifth business day following the said effective date is
______________________. On the foregoing date the Company shall
advise you of the name and mailing address of each Investors from
whom the Company has not received such written confirmation. You
are instructed to refund to each such Investor, by first class mail
or other equally prompt means, from the Funds Escrow Account,
within five business days from the said forty-fifth business day,
the full refund of such Investor's subscription price, together
with interest and dividends, if any, in accordance with the
requirements of Rule 419(e)(2)(ii).
"The Company hereby represents to you the following: (a) The
requirements of paragraphs (e)(1) and (e)(2) of Rule 419 have been
met by the Company; (b) the Company has consummated an
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acquisition(s) meeting the requirements of paragraph (e)(2)(iii) of
Rule 419. In support of the foregoing representations the Company
delivers to you herewith the following: (a) a copy of paragraphs
(e)(1), (2) and (3) of Rule 419; (b) the post-effective amendment
to the Initial Registration Statement complying with the
requirements of Rule 419(e)(1); (c) a list of those Investors, as
they appear on your records, who have confirmed their investments
in the Registered Shares; (d) the executed merger agreement(s) and
certificate(s) or the executed acquisition agreement(s) between the
Company and the reverse acquirer(s) thereof; (e) the executed
closing documents with respect to the merger or acquisition. Based
on the foregoing, the Company requests that you pay over to it the
entire balance held in the Funds Escrow Account after deduction of
all fees and expenses due to you. The Company further requests that
you send to each Investor, who shall have confirmed such Investor's
intent to remain an Investor in the Registered Shares, at such
Investor's mailing address as it appears on your records, such
Investor's Certificate(s) held in the Shares Escrow Account and
that all other Certificates in the Shares Escrow Account be
returned to the Company signed by Company
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