EXHIBIT 1.1
ESCROW AGREEMENT
Escrow Agreement (this "Agreement") made as of ____________, 2002 by
and among Hollow Egg One Inc., a Delaware corporation (the "Company") and Valley
National Bank, a national 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:
Recitals.
The Company is a Delaware 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 of 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").
The Company is authorized to issue one class of security, viz. 10
million shares of common stock, $0.0001 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 and all required amendments thereto prior
to its effectiveness (collectively the "Pre-Effective Registration Statement")
under the Securities Act for the purpose of registering the making of a public
offering (the "Offering"), by way of the officers of the Company, of 1,250,000
Shares (the "Offering Shares") to subscribers therefor (the "Subscribers") at a
per Share price of $0.25, and for the purpose of registering the future sale of
the remaining 9,000,000 Shares (the "Parent Shares") currently owned and held by
Tecumseh Holdings Corporation, the parent and promoter of the Company (the
"Parent"). 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 0000 (xxx
"Xxxxxxxx Xxx").
The Company will conduct the Offering on an "all-or-none" 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 Parent,
provided the same shall not constitute compensation for the sale of the Offering
Shares.
1. Engagement of the Escrow Agent.
1.1 In furtherance of the completion of the Offering and the
realization of the Plan, the Company hereby engages 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"). A complete copy of the Rules is annexed hereto as
Exhibit A and made a part hereof.
1.2 The Escrow Agent agrees to create and maintain two escrow accounts
(the "Escrow Accounts") with respect to the Offering and the Plan: a funds
escrow account (the "Funds Escrow Account") and a custodial escrow account (the
"Shares Escrow Account"). During the Offering Period, the Escrow Agent shall
hold in the Funds Escrow Account the gross funds proceeds of the Offering,
subject to and in accordance with the provisions of Rule 10b-9. Upon completion
of the Offering, during the Plan Period, the Escrow Agent shall hold in the
Funds Escrow Account the gross funds proceeds of the offering (less up to 10
percent of the proceeds remaining after payment of underwriting commissions,
underwriting expense and dealer allowances, exclusive of interest or dividends
as those proceeds are deposited into theFunds Escrow Account) (the "Offering
Proceeds" which shall be deemed to include any interest or dividends thereon
while in the Funds Escrow Account). Upon the completion of the Offering, during
the Plan Period, the Escrow Agent shall hold in the Shares Escrow Account the
certificates evidencing the Offering Shares sold in the Offering, the Parent
Shares owned by the Parent, 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 in the
Offering Shares (the ""Investors").
1.3 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, viz. "Valley National Bank, Escrow Agent of Hollow Egg
One Inc." The Escrow Agent will hold the Offering Proceeds and the Certificates
in the Escrow Accounts free from any lien, claim or offset.
2. Appointment of the Company Representatives.
2.1 The Company hereby appoints to act as its representatives under
this Agreement (each a "Company Representative" and together, the "Company
Representatives") the persons identified in Exhibit E hereto as the Company
Representatives or any other person designated in writing signed by any Company
Representative and delivered to Escrow Agent in accordance with the notice
provisions of this Agreement. The specimen signatures for the current Company
Representatives are attached hereto as Exhibit E and made a part hereof. No
substitution or addition of a Company Representative shall be effective without
a specimen signature for such substitute or additional Company Representative.
Each Company Representative is authorized to act individually, and the Escrow
Agent shall be entitled to rely on any document or instrument executed by any
one or more Company Representatives as being delivered by and on behalf of the
Company and having the full force and effect of a document or instrument signed
on behalf of the Company by a duly authorized officer thereof.
3. The Offering (Rule 10b-9).
3.1 The Company covenants to the Escrow Agent as follows: The Company
shall conduct the Offering of 1,250,000 Offering Shares on an "all-or-none"
basis in accordance with the provisions of the Pre-Effective Registration
Statement. The Company shall make the Offering during a period of 60 days
commencing with the effective date of the Pre-Effective 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 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 Subscriber 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 Offering Shares
purchased for, and amount of subscription payment of such Subscriber, which
Subscription Agreement shall further represent and confirm that the Subscriber
has received a copy of this Escrow Agreement, each of which IRS Form and
Subscription Agreement (collectively the "Subscription Documents") shall be
completed and executed by each Subscriber. The Subscription Agreement shall be
substantially in the form of Exhibit B hereto (for offerings to holders of the
Class A common stock of the Parent), and substantially in the form of Exhibit C
hereto (for offerings to other offerees). The Company shall at all times conduct
the Offering, the disposition of the Offering Proceeds and the issuance and
disposition of the Certificates in accordance with Rule 419.
3.2 The Company covenants to the Escrow Agent as follows: The Offering
Documents specify that Offering Proceeds shall be in the form of checks, drafts,
or money orders (the "Proceeds Instruments") payable to the order of "Valley
National Bank, Escrow Agent of Hollow Egg One Inc." (subject to Section 3.4
below) and shall be sent to the Company accompanied by completed and executed
Subscription Documents. The Company forthwith upon receipt thereof shall
photocopy the Proceeds Instruments and Subscription Documents, record the
pertinent information contained therein, and promptly deliver the Proceeds
Instruments and Subscription Documents to the Escrow Agent.
3.3 It is the obligation of the Company to, and the Company covenants
to the Escrow Agent that it shall, promptly deliver to Escrow Agent:
a. all Escrow Funds for the Offering received from each Subscriber
for the purchase of Shares for deposit with the Escrow Agent;
b. the name, mailing address, social security number, fax number,
and phone number of each Subscriber;
c. the applicable IRS Form fully filled out and executed by each
Subscriber; and
d. written confirmation from the Company that each Subscriber for
Shares in connection with the Offering has been given a copy of this
Agreement. Such confirmation ("Confirmation Certificate") shall be in the
form of attached hereto. ---------
3.4 Escrow Funds may be deposited by wire transfer from a United States
Bank. Federal wires shall be sent to the Federal Reserve Bank of New York for
the account of:
Valley National Bank
ABA # 000000000
Attention Trust Service No. 73187
FFC to Hollow Egg One Inc. Funds
Escrow Account No. __________
The Escrow Agent promptly shall notify the Company of all such wire transfers
including both the amount and the transferor thereof 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.
3.5 The Escrow Agent shall return to the Company any check from a
Subscriber which is returned unpaid to the Escrow Agent. If the Company rejects
any subscription, in whole or in part, for any reason whatsoever, the Company
shall notify the Escrow Agent, as soon as is practicable, of such rejection. If
the Escrow Agent has not deposited the check for such Subscriber, the Escrow
Agent shall, within ten (10) days, return such check and the other Escrow Funds
respecting such Subscriber as per the information delivered for such Investor to
the Company. If the check for such Investor has been deposited, the Escrow Agent
shall remit a reimbursement check respecting such Investor as per the
information provided within ten (10) days after the Escrow Agent has confirmed
that such check has cleared.
3.6 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
account of each Investor and shall be deemed part of the Funds Escrow Account,
but no such accrual shall be entered in the Escrow Agent's records unless and
until the Escrow Agent shall have received the applicable IRS Form, completed
and executed by the Investor.
3.7 The Escrow Agent shall provide written notification to the Company,
on a daily basis during the first 60 days of the offering period (excluding
weekends and holidays) and, if extended, then weekly during such extended
period, of the Offering Proceeds and, in addition, which have been returned.
3.8 Deposited Offering Proceeds and interest or dividends thereon, if
any, shall be held for the sole benefit of the Investors in the Offering 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, such
money market fund to be selected by the Escrow Agent.
3.9 The Company acknowledges that it is not entitled to the use of the
Escrow Funds from the Offering and that such Escrow Funds are not the property
of the Company and shall not be subject to the debts of the Company or any other
party, until such time as the funds have been disbursed pursuant to the terms
hereof.
3.10 The Company and each Investor acknowledges that the Escrow Agent
assumes no responsibility for the accuracy or completeness of any address or
phone number information delivered to the Escrow Agent. The Escrow Agent is
relying and will rely solely and exclusively on the information provided by the
Company and checks received by it. The Escrow Agent shall not be liable for any
losses resulting from deficiencies in the Escrow Funds due to failure of the
Company to make a deposit, whether of not noted by the Company. The Escrow Agent
shall have no duty to review the Subscription Documents and may conclusively
rely on the information delivered by the Company in determining what Escrow
Funds are the subject of this Agreement.
3.11 Escrow Agent has agreed to accept, hold and distribute the Escrow
Funds deposited with it in accordance with the terms of this Agreement. The
Subscription Documents shall not govern the rights and obligations of the Escrow
Agent or the Investor or Subscriber with respect to Escrow Agent's
responsibilities with respect to the Escrow Funds.
3.12 The Escrow Agent is hereby released and held harmless by the
Company of all liability or damage for loss of profits, indirect, special,
consequential or other similar damages suffered by any person relating directly
or indirectly to the issues of whether the Escrow Agent has received all of the
Escrow Funds respecting an Investor or Subscriber or whether there are any
deficiencies or defects in the Escrow Funds due to the failure of the Company to
deposit all Escrow Funds.
3.13 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 the Escrow Agent, and the Escrow Agent shall return the
Offering Proceeds to the persons entitled thereto as provided in Section 3.14.
In the event the Offering shall be terminated, either by reason of the failure
to complete the sale of the Offering 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 Company promptly shall so notify the Escrow
Agent and the Escrow Agent shall return the Offering Proceeds to the persons
entitled thereto as provided in Section 3.14. The Company 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 notify the Escrow Agent, as soon as is
practicable, of such rejection and the Escrow Agent shall return the Offering
Proceeds to the person whose subscription was rejected as provided in Section
3.14. 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 Offering Shares are sold.
3.14 In the event that the Company has notified the Escrow Agent that
Offering Proceeds are to be returned to Subscribers pursuant to Section 3.13
above, the Escrow Agent shall, if the Escrow Agent has not deposited the check
for a Subscriber, return such check and the other Escrow Funds respecting such
Subscriber within ten (10) days following such notice, 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 the later of the date of the notice from the Company or the date the
Escrow Agent has confirmed that such check has cleared.
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.
(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(b)(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), shall pay to the Company the sum of $31,250,
constituting 10% of the gross Offering Proceeds of $312,500 as those proceeds
are deposited into the Funds Escrow Account.
4.3 The balance of the funds in the Funds Escrow Account remaining
after the payment made to the Company under Section 4.2 above shall continue to
be held in the Funds Escrow Account for the sole benefit of the Investors in the
Offering Shares. Tecumseh Holdings Corporation shall not, for any purpose of the
Funds Escrow Account, be deemed to be an Investor. The amount of the interest of
each Investor in the total amount held in the Funds Escrow Account shall be a
percentage thereof equal to the percentage which the amount of the Investor's
paid-in investment constitutes of $312,500 or of such lesser amount constituting
the aggregate paid in investments of all Investors who received no prior refunds
made pursuant to Rule 419(e)(2).
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 Offering Shares purchased by the Investors and
evidencing any incremental stock ("Other Stock") of the Company issued in
connection with the Offering, and, shall deposit all of the foregoing
certificates, together with the certificates evidencing the Parent Shares owned
by the Parent (all of the aforementioned certificates (collectively the
"Certificates" as defined in paragraph 1.2 above). 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 currently 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 The Company shall cause all Certificates evidencing Offering Shares
issued in connection with the Offering, whether or not for cash consideration,
evidencing the Parent Shares, and evidencing any other securities issued with
respect to such securities, including securities issued with respect to stock
splits, stock dividends, or similar rights, promptly to be delivered to the
Escrow Agent for deposit into the Shares Escrow Account. Along with such
delivery, the Company shall provide in writing to the Escrow Agent the name,
address, interest, and certificate number of each person in whose name the
deposited Certificates have been issued. The Escrow Agent shall cause the
Certificates to be deposited directly into the Shares Escrow Account promptly
upon its receipt thereof. The Escrow Agent shall cause its books and records of
the Escrow Agent to indicate the name, address, interest, and certificate number
of each person in whose name the deposited Certificates have been issued, in
accordance with the information supplied by the Company.
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. 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 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. 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)(2)
and (3)).
6.1 Paragraph (e)(2) provides that an effective post-effective
amendment to the Company's registration statement under Rule 419, describing the
intended business combination into which the Company proposes to enter,
forthwith be distributed to the Investors (such post- effective amendments and
all further amendments required to be made, collectively the "Post- Effective
Registration Statement") and that, with respect to any Investor who, not later
than 45 business days following the effective date of the Post-Effective
Registration Statement (the "Amendment Effective Date"), fails to have caused
the Company to receive such Investor's notification that he or she wishes to
remain an Investor, then and in such event the funds held for such Investor in
the Funds Escrow Account shall be sent to such Investor within 5 business days
after such 45th business day. The Company will fulfill such requirements on its
part required to be fulfilled. The Company shall, not later than 4:00 p.m. on
the said 45th business day, provide to the Escrow Agent a written list of those
Investors who have not confirmed to the Company in writing that he or she wishes
to continue to remain an Investor, including the name, mailing address, social
security number, fax number, and phone number of each such Investor. The Escrow
Agent shall
thereupon dispatch to each such Investor the amount of his or her interest in
the Funds Escrow Account.
6.2 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.
6.3 The Escrow Agent shall (a) release the Offering Proceeds held in
the Escrow Account to the Company and (b) mail the Certificates for the Offering
Shares and other deposited securities, if any, to the Investor or other
registered holder identified on the Offering Shares and other deposited
securities, if any, by first class; and shall deliver the Parent Shares to the
Parent, 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:
a. The requirements of Rule 419(e)(1) and Rule 419(e)(2) have
been met.
b. An acquisition(s) meeting the requirements of Rule
419(e)(2)(iii) has been fully consummated.
(For informational purposes, reference is made to 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.)
6.4 The Company shall provide to the Escrow Agent a written notice (a
"Termination Date Notice") promptly, but in any event within one business day,
of the occurrence of any one or more of the following dates (the "Termination
Dates"), which such notice shall certify that a Termination Date has occurred
hereunder and shall specify the Termination Date:
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.
b. The date, 18 months from the Initial Effective Date, at
which time a consummated acquisition(s) meeting the requirements of Rule 419
shall not have occurred.
Upon its receipt of a Termination Date Notice, the Escrow Agent shall
cause the Offering Proceeds held in the Escrow Account, including any interest
and/or dividends thereon up to the date of release, to be returned by first
class mail or equally prompt means to the Investors within five business days
following the Termination Date and shall cause the Offering Shares, the Parent
Shares and other deposited securities, if any, up to the date of delivery, held
in the Shares Escrow Account to be returned to the Company. The Company shall
cause the Offering Shares and other deposited securities, if any, to be
cancelled effective as of the Termination Date; shall promptly return the Parent
Shares to the Parent and shall cause the Registration Statement to be formally
withdrawn. Notwithstanding the foregoing, the Escrow Agent shall have no
liability for, and the Company shall indemnify the Escrow Agent with respect to
all claims and losses arising from, any delay in the Escrow Agent mailing or
delivering such certificates or funds resulting, in whole or in part, from any
failure of the Company to timely deliver the Termination Date Notice.
7. Disbursement into Court.
7.1 If, at any time, there shall exist any dispute between the 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 a
written direction executed by a Company Representative and delivered to the
Escrow Agent (a "Written Direction") within twenty (20) banking business days
("Business Days") after such resignation or within ten (10) Business Days after
such removal, then, in its sole discretion, the Escrow Agent may:
a. 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
b. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in the State of New
Jersey, 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
for holding by such court and disposition in accordance with the procedures set
forth in the Subscription Documents, 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 The Escrow Agent shall have no liability to the Company or to 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
a 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 Valley National Bank. Valley National Bank 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 benefitting Escrow Agent shall continue to inure to the benefit
of Valley National Bank 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 the Parent of all
reasonable fees and expenses (including court costs, attorney's 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 Administrative.
The duties of the Escrow Agent hereunder shall be entirely
administrative 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.
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 attorney's 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 Shares) 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 the 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 Pre-Effective Registration
Statement, the Post-Effective Registration Statement, the conditions or
requirements of Rule 419(e), or any other rules, regulations, or laws affecting
the Offering or the Offering 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, 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 Pre-Effective Registration
Statement, the Post-Effective Registration Statement, the exhibits to either of
them, the validity of the Offering 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. Without limiting the foregoing, the Escrow Agent
shall not be charged with knowledge or notice of the Offering Documents or the
Subscription Documents.
11.5 In no event shall the Escrow Agent be liable for incidental,
indirect, special, consequential or punitive damages.
11.6 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.
11.7 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
New Jersey 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 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 the Escrow Agent for all of its reasonable
out-of-pocket expenses, including, without limitation, attorney's fees,
paraprofessional fees, telephone and facsimile transmission costs, postage
(including express mail or overnight delivery charges), copying charges and the
like. The obligations of the 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 commences a lawsuit or other
proceeding relating to or arising from this Agreement, the parties hereto agree
that the proceedings and the subject matter thereof be governed by the laws of
New Jersey and that the Superior Court of New Jersey shall have the sole and
exclusive jurisdiction over any such proceedings.
14. Notices and Communications.
14.1 All notices and other communications hereunder shall be in writing
and shall be dispatched by a recognized professional overnight courier or by
telefax with telephone confirmation and addressed to the party to be notified as
follows:
If to Company, to: Hollow Egg One, Inc.
c/o Milling Law Offices
000 Xxxxx Xxxx
Xxxxxxxx 00
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
If to Escrow Agent, to: Valley National Bank
Trust Department
0000 Xxxxxxx Xxxxxxxx
Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx,
Assistant Vice President
Telephone: (000) 000-0000
Telefax: (000) 000-0000
or to such other address as each party may designate for itself by like notice.
14.2 Certain notices, letter representations, and instructions by the
Company to the Escrow Agent shall be in the form provided in Exhibit F annexed
hereto and made a part hereof.
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 Delaware 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.
15.2 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
the 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 to which Company is a party or to which 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 Exhibit E 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, the 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 information in the Recitals is true and correct. Such
Recitals, as representations and warranties of the Company to the Escrow Agent,
form a part of this Agreement.
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 New Jersey 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.
16.5 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.
16.10 Term; Termination. This Agreement shall become effective on the
date upon which the last of Company and Escrow Agent shall have executed this
Agreement and, unless earlier terminated in accordance herewith, this Agreement
shall terminate on the date upon which all Escrow Funds are disbursed pursuant
hereto and no additional Escrow Funds shall be placed in escrow. It is the
responsibility of Company to notify Escrow Agent when this escrow period has
terminated.
17. Guaranty by Parent.
The Parent is executing and delivering a copy of this Agreement to
evidence its guaranty to the Escrow Agent of all obligations and liabilities of
the Company to the Escrow Agent hereunder, including without limitation payment
of all fees of the Escrow Agent and provision of indemnification to the Escrow
Agent hereunder.
In Witness Whereof, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunto duly authorized.
VALLEY NATIONAL BANK
By
------------------------------------
------------------------------------
(Print Name and Title)
HOLLOW EGG ONE INC.
By
------------------------------------
------------------------------------
(Print Name and Title)
TECUMSEH HOLDINGS CORPORATION,
as Guarantor of the Company's
obligations to the Escrow Agent
hereunder
By
------------------------------------
------------------------------------
(Print Name and Title)
.EXHIBIT LIST
Exhibit Title
------- -----
A Rules 419, 15g-8 and 10b-9
B Subscription Agreement (Subscription Rights)
C Subscription Agreement (General)
D Fees Payable to Escrow Agent
E Specimen Signatures of Representatives
F Letter Representations and Instructions by Company to Escrow Agent
G Confirmation Certificate
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.
(1) 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 $25,000 (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.
(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.
(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 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
(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 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. 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.
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 [shares] 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.
EXHIBIT B
SUBSCRIPTION AGREEMENT (SUBSCRIPTION RIGHTS)
hollow egg one inc.
C/O TECUMSEH HOLDINGS CORPORATION
000 XXXXX XXXX, XXXXXXXX 00, XXXXX 0000
XXXXXXXXX, XXX XXXXXX 00000
TELEPHONE 000-000-0000 FAX 000-000-0000
E-MAIL XXXXXXXX.XXXXXXXX@XXXXXXX.XXX
[date to be inserted]
To: [name of Tecumseh shareholder(s)]
[address of Tecumseh shareholder(s)]
Re: Subscription to shares of Hollow Egg One Inc.
under subscription rights of holders of Tecumseh
Holdings Corporation's Class A Common Stock, of
which your initial allotment is: [number of
shares] Shares
Dear [name of shareholder(s)]:
Our registration statement for the offering of our first "blank check"
company, or as it is sometimes referred to, our first "shell" company, has been
declared effective by the Securities and Exchange Commission. We are now
commencing the offering of the common shares of the Company, Hollow Egg One Inc.
As you know, Tecumseh has undertaken, in the case of all such offerings of
"blank check" or "shell companies" established by Tecumseh, to make the offering
exclusively to the holders of Tecumseh's Class A Common Stock for a limited
period of time prior to offering any of these shares to the general public. As a
Tecumseh Class A Common shareholder, you are eligible to participate in these
subscription rights to these "blank check" company shares. HOWEVER, BEFORE
MAKING ANY DECISION TO PURCHASE ANY NUMBER OF THESE SHARES, YOU MUST READ
CAREFULLY THE ENCLOSED DEFINITIVE PROSPECTUS REGARDING THE OFFERING OF THESE
SHARES. There is also enclosed for your review the escrow agreement between the
Company and Valley National Bank providing for the deposit with the bank of the
subscription funds received by the Company and the stock certificates issued to
Tecumseh and to investors for the Company's stock. These funds will be held for
18 months or less, until the Company enters into a business combination with a
private going concern. Should this not occur within 18 months from the
prospectus date, the funds held by the escrow agent for your account will be
returned to you with any accrued interest or dividends.
PLEASE READ CAREFULLY THE SECTION OF THE PROSPECTUS ENTITLED
"SUBSCRIPTION RIGHTS." A COPY OF THAT SECTION HAS BEEN ATTACH TO THIS LETTER FOR
YOUR CONVENIENCE. THIS SECTION WILL EXPLAIN YOUR SUBSCRIPTION RIGHTS IN DETAIL.
Methods of Calculating Initial Subscription and Over-subscription Allotments
The record date was [the seventh business day next preceding the
prospectus date]. This was the date on which the determinations were made as to
the following three matters:
Your inclusion in those of the Tecumseh Class A shareholders who have
subscription rights;
The category of the Tecumseh Class A shareholder group of which you are a
part, i.e. large block holder (25,000 or more Tecumseh Class A shares) or small
block holder (less than 25,000 Tecumseh Class A Shares);
The amount of your initial subscription allotment (the number of Company
shares initially available to you). This amount is the percentage of Company
shares equal to the percentage which your Tecumseh Class A shares constitute of
your Tecumseh Class A block category;
The following determinations could not be made on the record date:
The amount of your primary over-subscription allotment of shares (the
first number of additional Company shares subsequently available to you). This
amount is the percentage of unsubscribed-for Company shares of your Tecumseh
Class A block category which is equal to the percentage which your initial
subscribed-for Company shares constitutes of all initial subscribed-for Company
shares in your Tecumseh Class A block category.
The amount of your secondary over-subscription allotment of shares (the
second number of additional Company shares subsequently available to you). This
amount is determined if and when the shares in your block category are fully
purchased and is the percentage of unsubscribed-for Company shares of the
Tecumseh Class A block category other than yours which is equal to the
percentage which the total of your initial subscribed-for Company shares and
primary oversubscribed-for Company shares constitutes of all initial
subscribed-for and primary oversubscribed-for Company shares in your block
category.
Time Schedule and Procedures for Subscriptions, Over-subscriptions, and Payments
The time schedule for the initial, primary and secondary subscriptions
and over- subscriptions will be as follows:
THE COMPLETED AND EXECUTED SUBSCRIPTION AGREEMENT MUST BE RECEIVED FROM
YOU BY THE COMPANY WITHIN 30 DAYS FROM THE DATE OF THIS PROSPECTUS. This timing
is necessary for the purpose of calculating the allotments of Company shares
available for over-subscription and communicating this information to you and
other Tecumseh Class A shareholders.
Payment for all initial subscriptions to Company shares must accompany the
return of the completed and executed subscription agreement.
Within 40 days from the prospectus date, each Tecumseh Class A shareholder
who has included an over-subscription in his or her subscription agreement and
who has returned the completed and signed subscription agreement accompanied by
payment for the full amount of his or her initial subscription, will receive a
statement and multi-copy confirmation indicating the amount of such person's
over-subscription allotment; and
SUCH TECUMSEH CLASS A SHAREHOLDER SHOULD PROMPTLY RETURN A COPY OF THE
CONFIRMATION ACCOMPANIED BY PAYMENT FOR THE AMOUNT OF HIS OR HER
OVER-SUBSCRIPTION SO AS TO HAVE IT IN THE HANDS OF THE COMPANY NOT LATER THAN
THE 60TH DAY FROM THE PROSPECTUS DATE.
Delivery of the subscription agreement and over-subscription
confirmations, together with payment by written instrument, should be made by
hand, by recognized courier service, or by first class mail, to "Hollow Egg One
Inc., c/o Tecumseh Holdings Corporation, 000 Xxxxx Xxxx, Xxxxx 0000, Xxxxxxxxx,
XX 00000, telephone 000-000-0000."
Payment by written instrument should be in the form of a check, bank draft
or money order, in the aggregate amount then due on account of either the
subscription price or over-subscription price, payable to or endorsed to the
order of "Valley National Bank, Escrow Agent for Hollow Egg One Inc."
In lieu of payment by written instrument, a bank-to-bank wire transfer of
funds (S.W.I.F.T. or FedWire) may be made, contemporaneously with the delivery
of the subscription agreement, to "Federal Reserve Bank of New York for account
of Valley National Bank, Wayne, NJ, ABA No. 000000000, Attention Trust Service
No. 73187, for further credit to Hollow Egg One Inc., Escrow Account No. [to be
determined]."
Warranties and Representations of the Subscriber
You warrant and represent that you fully understand, and have done, the
following:
You hereby acknowledge receipt of the definitive prospectus for this
offering, together with a copy of the escrow agreement relating to it, and that
you have carefully read both of these documents;
No representations have been made to you other than those contained in the
definitive prospectus and the escrow agreement in connection with this offering;
The Company reserves the right to terminate this offering prior to its
completion and expiration of its offering period and further reserves the right
to reject, in whole or in part, any subscription, in its sole discretion, for
any reason whatsoever;
No subscription may be withdrawn once made, except as provided by applicable
state law;
All subscription payments made by you to the Company and which are
retained by, and not refunded to you by, the Company will be held in escrow in
accordance with the terms of the escrow agreement and the prospectus, until
termination of the escrow account pursuant to the escrow agreement;
All subscription payments shall be at the rate of $0.25 per share
subscribed to or over-subscribed to;
Your transfer of your subscription rights as a shareholder of Tecumseh will not
be permitted;
No offered Company shares will be issued on a fractional basis; and
The total subscription rights offering period will have a duration of 60 days
from the date of this prospectus.
Subscriptions, if any (spaces left blank will be considered to be a "none"
response)
Your initial subscription allotment of Company shares has been calculated
to be the amount indicated in the caption on the first page of this subscription
agreement, of which you agree to subscribe to _________________________ shares;
Your primary over-subscription allotment of Company shares cannot be
estimated at this time. However, you agree to subscribe to (check one):
? the full number of shares in your primary over-subscription
allotment, or ? up to _________________________ shares (subject to
reduction on calculation).
Your secondary over-subscription allotment of Company shares cannot be
estimated at this time. However, you agree to subscribe to (check one):
? the full number of shares in your secondary over-subscription allotment,
or ? up to _________________________ shares (subject to reduction on
calculation).
General
All notices or other communications given or made by you to the Company or by
the Company to you, shall be in writing and shall be (1) delivered by hand; (2)
delivered by recognized courier; (3) mailed by registered or certified mail,
return receipt requested, postage prepaid, to you at the address set forth below
and to the Company at the address set forth above; or (4) mailed to the Company
in the Company's postal-permitted Business Reply Mail envelope.
Notwithstanding the place where this agreement may be executed by either you or
the Company, you and the Company expressly agree that all the terms and
provisions hereof shall be construed in accordance with and governed by the
internal laws of the State of New Jersey, without giving effect to conflicts of
law, to the jurisdiction of whose courts the Company and you hereby submit
themselves.
This Agreement constitutes the entire agreement between you and the Company with
respect to the subject matter hereof and may be amended only by a writing
executed by both you and the Company. You agree not to transfer or assign this
agreement, or any interest in this agreement, without the express written
consent of the Company.
The undersigned agrees that counsel to the Company shall not be liable for
taking any action pursuant to this Agreement in the absence of gross negligence,
misfeasance, malfeasance or fraud.
Your instructions as to the registration of the certificates for the Company
shares purchased by you are as follows:
------------------------------------------------------------------
(Name)
------------------------------------------------------------------
(Street Address)
------------------------------------------------------------------
(City, State and Zip Code)
------------------------------------------------------------------
(Social Security No. or Federal Employer ID No.)
------------------------------------------------------------------
(Date of Birth)
Very truly yours,
HOLLOW EGG ONE INC.
Dated:
-------------------------------------- By:
----------------------------
XXXX X. XXXXXXX, President
---------------------------------------------------------
(Subscriber(s) Signature(s)
---------------------------------------------------------
(Print Subscriber(s) Name(s) and, if applicable, Title(s))
---------------------------------------------------------
(Printed name of Subscriber If Not an Individual)
---------------------------------------------------------
(Street Address)
---------------------------------------------------------
(City, State and Zip Code)
---------------------------------------------------------
(Area Code and Telephone Number)
EXHIBIT C
SUBSCRIPTION AGREEMENT (GENERAL)
hollow egg one inc.
C/O TECUMSEH HOLDINGS CORPORATION
000 XXXXX XXXX, XXXXXXXX 00, XXXXX 0000
XXXXXXXXX, XXX XXXXXX 00000
TELEPHONE 000-000-0000 FAX 000-000-0000
E-MAIL XXXXXXXX.XXXXXXXX@XXXXXXX.XXX
[date to be inserted]
To: [name of Investor(s)]
[address of Investor(s)]
Re: Subscription to shares of Hollow
Egg One Inc.
Dear [name of Investor(s)]:
Our registration statement for the offering of our first "blank check"
company, or as it is sometimes referred to, our first "shell" company, was
declared effective by the Securities and Exchange Commission. We are currently
offering for sale the shares of common stock of the Company, Hollow Egg One Inc.
BEFORE MAKING ANY DECISION TO PURCHASE ANY NUMBER OF THESE SHARES, YOU MUST READ
CAREFULLY THE ENCLOSED DEFINITIVE PROSPECTUS REGARDING THE OFFERING OF THESE
SHARES. There is also enclosed for your review the escrow agreement between the
Company and Valley National Bank providing for the deposit with the bank of the
subscription funds received by the Company and the stock certificates issued to
the Company's parent and to investors for the Company's stock. These funds will
be held for 18 months or less, until the Company enters into a business
combination with a private going concern. Should this not occur within 18 months
from the prospectus date, the funds held by the escrow agent for your account
will be returned to you with any accrued interest or dividends.
Procedures for Subscriptions and Payments
The time schedule with respect to your subscription will be as follows:
The current offering period for the sale of the Company's shares is the
45-day period commencing on [date to be inserted] and ending on [date
to be inserted]. This period may be extended by the Company for an
additional 45 days. There can be no assurance can be given that this
will be done and clearly will not be done if all of the presently
unsold Company shares are sold during the current offering period.
The completed and executed subscription agreement should be received
from you by the Company within the current offering period. Payment for
all initial subscriptions to Company shares must accompany the return
of the completed and executed subscription agreement.
Delivery of the subscription agreement and over-subscription
confirmations, together with payment by written instrument, should be
made by hand, by recognized courier service, or by first class mail, to
"Hollow Egg One Inc., c/o Tecumseh Holdings Corporation, 000 Xxxxx
Xxxx, Xxxxx 0000, Xxxxxxxxx, XX 00000, telephone 201-313- 1600."
Payment by written instrument should be in the form of a check, bank
draft or money order, in the aggregate amount then due on account of
either the subscription price or over-subscription price, payable to or
endorsed to the order of "Valley National Bank, Escrow Agent for Hollow
Egg One Inc."
In lieu of payment by written instrument, a bank-to-bank wire transfer
of funds (S.W.I.F.T. or FedWire) may be made, contemporaneously with
the delivery of the subscription agreement, to "Federal Reserve Bank of
New York for account of Valley National Bank, Wayne, NJ, ABA No.
000000000, Attention Trust Service No. 73187, for further credit to
Hollow Egg One Inc., Escrow Account No. [to be determined]."
Warranties and Representations of the Investor
You warrant and represent that you fully understand, and have done, the
following:
You hereby acknowledge receipt of the definitive prospectus for this
offering, together with a copy of the escrow agreement relating to it,
and that you have carefully read both of these documents;
No representations have been made to you other than those contained in
the definitive prospectus and the escrow agreement in connection with
this offering;
The Company reserves the right to terminate this offering prior to its
completion and expiration of it offering period and further reserves
the right to reject, in whole or in part, any subscription, in its sole
discretion, for any reason whatsoever;
No subscription may be withdrawn once made, except as provided by
applicable state law;
All subscription payments made by you to the Company and which are
retained by, and not refunded to you by, the Company will be held in
escrow in accordance with the terms of the escrow agreement and the
prospectus, until termination of the escrow account pursuant to the
escrow agreement;
All subscription payments shall be at the rate of $0.25 per share; and
No offered Company shares will be issued on a fractional basis.
General
All notices or other communications given or made by you to the Company or by
the Company to you, shall be in writing and shall be (1) delivered by hand; (2)
delivered by recognized courier; (3) mailed by registered or certified mail,
return receipt requested, postage prepaid, to you at the address set forth below
and to the Company at the address set forth above; or (4) mailed to the Company
in the Company's postal-permitted Business Reply Mail envelope.
Notwithstanding the place where this agreement may be executed by either you or
the Company, you and the Company expressly agree that all the terms and
provisions hereof shall be construed in accordance with and governed by the
internal laws of the State of New Jersey, without giving effect to conflicts of
law, to the jurisdiction of whose courts the Company and you hereby submit
themselves.
This Agreement constitutes the entire agreement between you and the Company with
respect to the subject matter hereof and may be amended only by a writing
executed by both you and the Company. You agree not to transfer or assign this
agreement, or any interest in this agreement, without the express written
consent of the Company.
The undersigned agrees that counsel to the Company shall not be liable for
taking any action pursuant to this Agreement in the absence of gross negligence,
misfeasance, malfeasance or fraud.
Your instructions as to the registration of the certificates for the Company
shares purchased by you are as follows:
------------------------------------------------------------------
(Name)
------------------------------------------------------------------
(Street Address)
------------------------------------------------------------------
(City, State and Zip Code)
------------------------------------------------------------------
(Social Security No. or Federal Employer ID No.)
------------------------------------------------------------------
(Date of Birth)
Very truly yours,
HOLLOW EGG ONE INC.
Dated:
-------------------------------------- By:
----------------------------
XXXX X. XXXXXXX, President
ACCEPTED AND AGREED:
-------------------------------------------------------
(Investor(s) Signature(s))
-------------------------------------------------------
(Print Investor(s) Name(s) and, if applicable, Title(s))
-------------------------------------------------------
(Investor's Street Address)
-------------------------------------------------------
(Investor's City, State and Zip Code)
-------------------------------------------------------
(Investor's Area Code and Telephone Number)
EXHIBIT D
FEES PAYABLE TO ESCROW AGENT
Administration Fee.
Annual Administration Fee
(In advance--no pro-ration) $5,000.00 (includes first 25 Investors)
After 25 Investors $40.00 per Investor
One-Time Setup Fee. $2,500.00
Activity Charges.
Returned Checks $25.00 each
Wire to Investors. $15.00 each domestic
$25.00 each foreign
1099 Preparation and Reporting. No charge for first 25 Investors,
After 25 Investors $10.00 per Investor
EXHIBIT E
SPECIMEN SIGNATURES OF REPRESENTATIVES
COMPANY REPRESENTATIVE(S)
Name Specimen Signature
--------------------------------------------------------------------------------
Xxxx X. Xxxxxxx
--------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx
--------------------------------------------------------------------------------
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,
Hollow Egg One Inc.
By
------------------------------------
------------------------------------
(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:
Valley National Bank
Trust Department
0000 Xxxxxxx Xxxxxxxx
Xxxxx, XX 00000
Attention of Xxxxxxx Xxxxxxxx, Assistant Vice President
Re: Escrow Agreement (the "Agreement") Among Hollow Egg One Inc.
(the "Company") and Valley National Bank ("Escrow Agent")
dated as of ___________________, 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.
"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
Offering 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
Offering 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 Offering Shares and the collection of
all of the Offering Proceeds in the principal amount of $312,500. 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 $31,250 to Hollow Egg One Inc., payable to its order, and to continue
to hold the balance of the Offering Proceeds in the Funds Escrow Account, with
all interest or dividends thereon, for the sole interest of those persons having
a beneficial interest therein, in accordance with Rule 419 and the Plan. The
amount of the interest of each Investor in the total amount held in the Funds
Escrow Account shall be a percentage thereof equal to the percentage which the
amount of the Investor's out-of-pocket investment constitutes of $312,500 or of
such lesser amount constituting the aggregate out-of-pocket investments of all
Investors who received no prior refunds made pursuant to Rule 419(e)(2). We
deliver to you herewith the Certificates, including the certificate of Tecumseh
Holdings Corporation, with respect to each of
which Certificates the certificate number, the amount of Offering 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
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 Offering 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 New Jersey Statutes
and the New Jersey Code of Regulations, and under all other state and federal
statutes, rules or regulations, have expired." [signed by Company]
3.3 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 Pre-Effective 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 the Post-Effective 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 Offering Shares, shall be entitled to a refund from the Funds
Escrow Account of their subscription price for the Offering 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)." [signed by the Company]
[or]
"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 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
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 Offering 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 Offering 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]
EXHIBIT G
Confirmation Certificate
Valley National Bank
Attention:
Re: Escrow Agreement between Hollow Egg One Inc. ("Company") and
Valley National Bank ("Escrow Agent") dated as of , 2002.
Ladies and Gentlemen:
All terms set forth in this letter shall have the meanings set forth in
the Agreement. The undersigned hereby confirms that the following Investors have
been given a copy of the Agreement:
[list Investors]
Very truly yours,
By:
---------------------------------
Title: Company Representative
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Date:
---------------------------------
Approved:
By:
---------------------------------
Title:
---------------------------------
Date:
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