Exhibit 1.2
Form SB-2
Xxxxx Golf Co. Corporation
ESCROW AGREEMENT
This ESCROW AGREEMENT ("Agreement"), made and entered into as of
__________, 2002, by and among ACAP FINANCIAL, INC., a Utah corporation (the
"Underwriter"), Ogden Golf Co. Corporation, a Utah corporation ("Ogden Golf"),
and Xxxxx Union Bank, a Utah banking corporation (the "Escrow Agent").
R E C I T A L S:
X. Xxxxx Golf proposes to sell up to 400,000 shares (the "Shares") of OGDEN
GOLF's common stock, par value $.001 per share (the "Common Stock"), to the
public at a price of $.50 per share (the "Offering").
X. XXXXX GOLF has retained the Underwriter, as selling agent for OGDEN GOLF
on a best efforts basis, to sell the Shares in the Offering, and the Underwriter
has agreed to sell the Shares as OGDEN GOLF's selling agent on a best efforts
basis in the Offering, the terms of which relationship are set forth in an
Underwriting Agreement between OGDEN GOLF and the Underwriter (the "Underwriting
Agreement").
C. The Underwriter will enter into agreements with other brokers/dealers
(the "Selected Dealers" or individually, the "Selected Dealer") to assist in the
sale of the Shares.
D. The Escrow Agent is willing to hold the proceeds from the Offering in
escrow pursuant to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained in this Agreement, it is hereby agreed as follows:
1. Establishment of the Escrow Account. The Underwriter and OGDEN GOLF
hereby appoint Escrow Agent to serve as escrow agent for purposes of the
Underwriting Agreement, and Escrow Agent hereby accepts the appointment as
escrow agent hereunder and agrees to act on the terms and conditions set forth
in this Agreement. On or prior to the date of commencement of the Offering, the
parties shall establish an account with the Escrow Agent, which escrow account
shall be entitled "Xxxxx Golf Co. Corporation Escrow Account" (the "Escrow
Account"). This Agreement is being executed and the Escrow Account is being
established to, and the parties hereto will, comply with SEC Rule 15c2-4.
2. Escrow Period. The escrow period (the "Escrow Period") shall begin with
the commencement of the Offering and shall terminate upon the Closing Date (as
defined in Section 5 of this Agreement), or ___________, 2003, whichever first
occurs. During the Escrow Period, OGDEN GOLF is aware and understands that it is
not entitled to any funds received into escrow and no amounts deposited by the
Escrow Agent shall become property of OGDEN GOLF or any other entity, or be
subject to the debts of OGDEN GOLF or any other entity.
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3. Deposits into the Escrow Account. Funds received from purchasers by the
Underwriter, or Selected Dealers shall be deposited in the Escrow Account in
compliance with SEC Rule 15c2-4. All money so deposited in the Escrow Account is
hereinafter referred to as the "Escrow Funds". Until termination of this Escrow
Agreement, all funds collected by the Underwriter from subscription for the
purchase of Shares in the subject offering shall be payable to the Escrow Agent,
and deposited promptly with the Escrow Agent, but in any event by 12:00 noon of
the next business day after receipt by the Underwriter of such funds. The
Underwriter may allow certain selected dealers to assist it in the offering of
the Shares, which selected dealers shall similarly deposit with or transmit to
the Escrow Agent all funds received on subscription for the Units by noon of the
next business day following receipt. The amount transmitted shall include all
cash payments received, together with all funds collected on checks honored by
the paying bank.
Concurrently with transmitting funds to the Escrow Agent, the Underwriter
shall also deliver to the Escrow Agent a schedule setting forth the name and
address of each subscriber whose funds are included in such transmittal, the
number of Units subscribed to, and the dollar amount paid. All funds so
deposited shall remain the property of the subscriber and shall not be subject
to any lien or charges by the Escrow Agent, or judgment or creditors' claims
against the Corporation until released to it in the manner hereinafter provided.
4. Delivery of Escrow Account Proceeds. Upon the Closing Date (as defined
in Section 5 of this Agreement), the Underwriter and OGDEN GOLF shall provide
the Escrow Agent with written directions for the distribution of the Escrow
Funds, and the Escrow Agent agrees to distribute the Escrow Funds pursuant to
such written directions. If no direction is received on or before 5:00 p.m.,
__________, 2003 (unless such time shall be extended by written agreement of the
Underwriter, OGDEN GOLF and the Escrow Agent), the Escrow Agent shall return the
Escrow Funds, without interest thereon, to the parties that made payments to the
Escrow Account and this Agreement shall be of no further force or effect.
As an additional consideration for and as an inducement for the Escrow
Agent to act hereunder, it is understood and agreed that, in the event of any
disagreement between the parties to this Agreement or among them or any other
person(s) resulting in adverse claims and demands being made in connection with
or for any money or other property involved in or affected by this Agreement,
the Escrow Agent shall be entitled, at the option of the Escrow Agent, to refuse
to comply with the demands of such parties, or any of such parties, so long as
such disagreement shall continue. In such event, the Escrow Agent shall make no
delivery or other disposition of the Escrow Funds or any part of such Escrow
Funds. Anything herein to the contrary notwithstanding, the Escrow Agent shall
not be or become liable to such parties or any of them for the failure of the
Escrow Agent to comply with the conflicting or adverse demands of such parties
or any of such parties.
The Escrow Agent shall be entitled to continue to refrain and refuse to
deliver or otherwise dispose of the Escrow Account or any part thereof or to
otherwise act hereunder, as stated above, unless and until:
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(a) the rights of such parties have been finally sealed by binding
arbitration or duly adjudicated in a court having jurisdiction of the
parties and the Escrow Account; or
(b) the parties have reached an agreement resolving their differences
and have notified the Escrow Agent in writing of such agreement and have
provided the Escrow Agent with indemnity satisfactory to the Escrow Agent
against any liability, claims or damages resulting from compliance by the
Escrow Agent with such agreement.
In the event of a disagreement between such parties as described above, the
Escrow Agent shall have the right, in addition to the rights described above and
at the option of the Escrow Agent, to tender into the registry or custody of any
court having jurisdiction, all money and property comprising the Escrow Account
and may take such other legal action as may be appropriate or necessary, in the
opinion of the Escrow Agent. Upon such tender, the parties hereto agree that the
Escrow Agent shall be discharged from all further duties under this Agreement;
provided, however, that the filing of any such legal proceedings shall not
deprive the Escrow Agent of its compensation hereunder earned prior to such
filing and discharge of the Escrow Agent of its duties hereunder.
5. Closing Date. The "Closing Date" shall be that date specified in the
Underwriting Agreement. The Underwriter will notify the Escrow Agent of the
Closing Date.
6. Investment of Escrow Account. The Escrow Agent shall deposit all
subscription funds it receives in the Escrow Account, which shall be a
non-interest-bearing bank account at Escrow Agent. The Escrow Funds in the
Escrow Account shall not be invested.
The Underwriter and OGDEN GOLF each warrant to and agree with the Escrow
Agent that, unless otherwise expressly set forth in this Agreement, there is no
security interest in the Escrow Account; no financing statement under the
Uniform Commercial Code of any jurisdiction is on file in any jurisdiction
claiming a security interest in or describing, whether specifically or
generally, the Escrow Account; and the Escrow Agent shall have no responsibility
at any time to ascertain whether or not any security interest exists in the
Escrow Account or to file any financing statement under the Uniform Commercial
Code of any jurisdiction with respect to the Escrow Account.
7. Compensation of Escrow Agent. The Underwriter shall pay the Escrow Agent
a fee for its services hereunder in an amount equal to $___________, which
amount shall be paid on the Closing Date. In the event that the Offering is
canceled for any reason, the Underwriter shall pay the Escrow Agent its fee
within 10 days after all of the Escrow Funds have been refunded to the parties
that made payment to the Escrow Account. In addition, the Underwriter agrees to
pay to the Escrow Agent its further expenses incurred in connection with this
Agreement, including but not limited to the actual cost of legal services in the
event the Escrow Agent deems it necessary to retain counsel. Such expenses shall
be paid to the Escrow Agent within 30 days following receipt by the Underwriter
of a written statement setting forth such expenses. The Underwriter agrees that,
in the event any controversy arises under or in connection with this Agreement
or the Escrow Account or the Escrow Agent is made a party to or intervenes in
any litigation pertaining to this Agreement or the Escrow Account, to pay to the
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Escrow Agent reasonable compensation for its extraordinary services and to
reimburse the Escrow Agent for all costs and expenses associated with such
controversy or litigation. No such fee, expenses or any other monies whatsoever
shall be paid out of or chargeable to the funds on deposit in the Escrow
Account.
8. Duties and Rights of the Escrow Agent. The foregoing agreements and
obligations of the Escrow Agent are subject to the following provisions:
(a) The Escrow Agent's duties hereunder are limited solely to the
safekeeping of the Escrow Account and the delivery of the Escrow Account in
accordance with the terms of this Agreement and no additional duties or
obligations shall be implied hereunder. It is agreed that the duties of the
Escrow Agent are only such as herein specifically provided, being purely of
a ministerial nature, and the Escrow Agent shall incur no liability
whatsoever except for gross negligence or willful misconduct. The Escrow
Agent shall have no duty with respect to the Shares.
(b) The Escrow Agent is authorized to rely on any document believed by
the Escrow Agent to be authentic in making any delivery of the Escrow
Account or otherwise acting under this Agreement. It shall have no
responsibility for the genuineness or the validity of any document or any
other item deposited with it, and it shall be fully protected in acting in
accordance with this Agreement or instructions received. The Escrow Agent
shall in no event incur any liability with respect to any action taken or
omitted to be taken in good faith upon advice of legal counsel, which may
be counsel to any party hereto, given with respect to any question relating
to the duties and responsibilities of the Escrow Agent hereunder. Escrow
Agent shall not be bound in any way by any agreement or contract between
the Underwriter and OGDEN GOLF, including the Underwriting Agreement,
whether or not the Escrow Agent has knowledge of any such agreement or
contract.
(c) OGDEN GOLF and the Underwriter hereby waive any suit, claim,
demand or cause of action of any kind that they may have or may assert
against the Escrow Agent arising out of or relating to the execution or
performance by the Escrow Agent of this Agreement, unless such suit, claim,
demand or cause of action is based upon the gross negligence or willful
misconduct of the Escrow Agent.
(d) The Escrow Agent shall have no obligation to take any legal action
in connection with this Agreement or towards its enforcement, or to appear
in, prosecute or defend any action or legal proceeding which would or might
involve it in any cost, expense, loss or liability unless security and
indemnity, as provided in this subsection, shall be furnished.
The Underwriter and OGDEN GOLF jointly and severally agree to
indemnify the Escrow Agent and its officers, directors, employees and
agents and save the Escrow Agent and its officers, directors, employees and
agents harmless from and against any and all Claims (as hereinafter
defined) and Losses (as hereinafter defined) which may be incurred by the
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Escrow Agent or any of such officers, directors, employees or agents as a
result of Claims asserted against the Escrow Agent or any of such officers,
directors, employees or agents as a result of or in connection with the
Escrow Agent's capacity as such under this Agreement by any person or
entity. For the purposes hereof, the term "Claims" shall mean all claims,
lawsuits, causes of action or other legal actions and proceedings of
whatever nature brought against (whether by way of direct action,
counterclaim, cross action or impleader) the Escrow Agent or any such
officer, director, employee or agent, even if groundless, false or
fraudulent, so long as the claim, lawsuit, cause of action or other legal
action or proceeding is alleged or determined, directly or indirectly, to
arise out of, result from, relate to or be based upon, in whole or in part:
(a) the acts or omissions of the Underwriter and OGDEN GOLF, (b) the
appointment of the Escrow Agent as escrow agent under this Agreement, or
(c) the performance by the Escrow Agent of its powers and duties under this
Agreement; and the term "Losses" shall mean losses, costs, damages,
expenses, judgments and liabilities of whatever nature (including but not
limited to attorneys', accountants' and other professionals' fees,
litigation and court costs and expenses and amounts paid in settlement),
directly or indirectly resulting from, arising out of or relating to one or
more Claims. Upon the written request of the Escrow Agent or any such
officer, director, employee or agent (each referred to hereinafter as an
"Indemnified Party"), the Underwriter and OGDEN GOLF jointly and severally
agree to assume the investigation and defense of any Claim, including the
employment of counsel acceptable to the applicable Indemnified Party and
the payment of all expenses related thereto and, notwithstanding any such
assumption, the Indemnified Party shall have the right, and the Underwriter
and OGDEN GOLF jointly and severally agree to pay the cost and expense
thereof, to employ separate counsel with respect to any such Claim and
participate in the investigation and defense thereof in the event that such
Indemnified Party shall have been advised by counsel that there may be one
or more legal defenses available to such Indemnified Party which are
different from or additional to those available to either the Underwriter
or OGDEN GOLF. The Underwriter and OGDEN GOLF hereby agree that the
indemnifications and protections afforded Escrow Agent in this subsection
shall survive the termination of this Agreement.
(e) In order to induce and as partial consideration for the Escrow
Agent's acceptance of this Agreement, the Underwriter and OGDEN GOLF
acknowledge that the Escrow Agent is serving as escrow agent for the
limited purposes set forth herein and each represent, covenant and warrant
to the Escrow Agent that no statement or representation, whether oral or in
writing, has been or will be made to any prospective subscribers for any of
the Shares to the effect that Escrow Agent has investigated the
desirability or advisability of investment in the Shares or approved,
endorsed or passed upon the merits of such investment or is otherwise
involved in any manner with the transactions or events contemplated in the
offering documents for the Shares being used by the Underwriter or OGDEN
GOLF other than as the Escrow Agent under this Agreement. It is further
agreed that no party shall in any way use the name "Xxxxx Union Bank" in
any sales presentation or literature except in the context of the duties of
the Escrow Agent as escrow agent of the offering of the Shares in the
strictest sense. Any breach or violation of this subsection shall be
grounds for immediate termination of the Agreement by the Escrow Agent.
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Without limitation to any release, indemnification or hold harmless
provision in favor of the Escrow Agent as elsewhere provided in this
Agreement, the Underwriter and OGDEN GOLF jointly and severally covenant
and agree to indemnify the Escrow Agent and its officers, directors,
employees and agents and to hold the Escrow Agent and such officers,
directors, employees and agents harmless from and against all liability,
cost, losses and expenses, including but not limited to attorneys' fees and
expenses which are suffered or incurred by the Escrow Agent or any such
officer, director, employee or agent as a direct or indirect result of the
threat or the commencement of any claim or proceeding against the Escrow
Agent or any such officer, director, employee or agent based in whole or in
part upon the allegation of a misrepresentation or an omission of a
material or significant fact in connection with the sale or subscription of
any one or more of the Shares. The Escrow Agent shall have no
responsibility for approving or accepting on behalf of the Underwriter or
OGDEN GOLF any proceeds delivered to it hereunder, nor shall Escrow Agent
be responsible for authorizing issuance of the Shares or for determining
the qualification of any purchaser or the accuracy of the information
contained in any offering documents for the Shares being used by the
Underwriter or OGDEN GOLF.
(f) The Escrow Agent may resign at any time from its obligations under
this Agreement by providing written notice to the parties hereto. Such
resignation shall be effective on the date set forth in such written notice
which shall be no earlier than 30 days after such written notice has been
given. In the event no successor escrow agent has been appointed on or
prior to the date such resignation is to become effective, the Escrow Agent
shall be entitled to tender into the custody of a court of competent
jurisdiction all assets then held by it hereunder and shall thereupon be
relieved of all further duties and obligations under this Agreement. The
Escrow Agent shall have no responsibility for the appointment of a
successor escrow agent hereunder.
(g) The Escrow Agent will not be responsible for tax reporting of any
income on the Escrow Account.
9. Notices. All notices given hereunder will be in writing, served by
registered or certified mail, return receipt requested, postage prepaid, or by
hand-delivery, to the parties at the following addresses:
To OGDEN GOLF:
Ogden Golf Co. Corporation
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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To the Underwriter:
ACAP Financial, Inc.
00 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Escrow Agent:
Xxxxx Union Bank
00 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Attention:____________________
Telephone: (801) _________
Facsimile: (801) _________
10. Miscellaneous.
(a) This Agreement shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective successors and
assigns.
(b) If any provision of this Agreement shall be held invalid by any
court of competent jurisdiction, such holding shall not invalidate any
other provision hereof.
(c) This Agreement shall be governed by the applicable laws of the
State of Utah.
(d) This Agreement may not be modified except in writing signed by the
parties hereto.
(e) All demands, notices, approvals, consents, requests and other
communications hereunder shall be given in the manner provided in this
Agreement.
(f) This Agreement may be executed in several counterparts, each of
which counterparts shall be deemed an original, but all such counterparts
together shall constitute one and the same instrument.
(g) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous writings, understandings, agreements, solicitation
documents and representations, express or implied. By execution of this
Agreement, the Escrow Agent shall not be deemed or considered to be a party
to any other document, including the Underwriting Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective names, all as of the date first above written.
ACAP FINANCIAL, INC.
By:__________________________________________
Xxxx Xxxxxxxx
President
XXXXX GOLF CO. CORPORATION
By:__________________________________________
Xxxx X. Xxxxxxxxx
President
XXXXX UNION BANK
By:__________________________________________
______________________
Trust Officer
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