HAR §16-38-28. Escrow of funds raised

(a) An escrow shall be established where, because of the nature of the intended use of the funds or the nature of the project or business plan, a minimum amount of funds shall be raised in order that the project can get underway with a reasonable chance of success even if no further sales are made. (b) The requirements for an escrow under this section are: (1) The escrow agent shall be a licensed escrow depository under chapter 449, HRS, or an excepted institution under section 449-3, HRS; and (2) The escrow terms shall include instructions that the funds placed into escrow shall be held in trust for the benefit of the investors and shall not be released to the issuer until the minimum amount of funds set forth in the registration have been raised. (c) The requirements of this section may be waived by the commissioner upon a showing that the escrow is not necessary and that the investor is adequately protected. [Eff and comp 10/12/85; am and comp 4/14/03] (Auth: HRS §485-2) (Imp: HRS §§485-2, 485-6, 485-18)