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EXHIBIT 28.1
IMPOUND AND ESCROW AGREEMENT
Agreement made as of the date set forth below by and among Capital
Alliance Income Trust, A Real Estate Investment Trust, a Delaware corporation
(the "Trust" or "CAIT"), Brookstreet Securities Corporation, a California
corporation ("Brookstreet"), and Golden Gate Bank, San Francisco, California
(the "Bank" or "Escrow Holder").
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereby agree as follows:
1. Registration Statement. A copy of the Trust's registration
statement for its proposed public offering (the "Offering") of shares in the
Trust and warrants to purchase shares in the Trust, S.E.C. registration no.
333-11625 (the "Registration Statement") has been deposited with the Bank by the
Trust and will become effective on or about _______________, 1997.
2. Deposits. The Bank, or its designated agent, shall receive
from each subscriber in the Offering all checks made payable to the Bank and
accompanied by a corresponding order form stating, among other things, the name
of the subscriber, current address and amount of the investment. Any deposits
received without a properly executed order form or check shall be returned and
not accepted.
On the same day orders and checks are received, the Bank, as agent for
the Trust, shall immediately deposit said funds into an interest bearing account
entitled "Golden Gate Bank, Escrow Agent for CAIT" Escrow, No. ______________ as
agent for the Trust. Said account shall be opened at the main office of Bank.
This account shall give Escrow Holder (the "Bank") the irrevocable right to
withdraw funds for deposit into escrow at such time as said funds are required
for escrow purposes.
3. Interest on Deposited Cash Funds. All cash funds deposited in
the escrow account shall be placed in an interest-bearing savings or other
interest-bearing account or instrument (collectively, the "Account") and shall
bear interest until the release of such cash funds from the Account at the then
current rate. Said funds shall be invested by the Bank for the benefit of
investors, to the extent reasonably possible, within seven business days from
the later of the date of deposit for collection or the date of actual collection
of such funds. The Bank in its sole discretion is authorized to invest only in
any of the following: bank savings accounts, bank money market accounts,
short-term U.S. government securities, certificates of deposit, including
certificates of deposit issued by the Bank, affiliates of the Bank or by other
commercial banks.
4. Failure to Deposit Minimum Subscription Amount. Funds will be
held in escrow hereunder pending satisfaction of the following condition (The
"Escrow Condition"):
Deposit with the Bank under this Agreement of the Minimum Subscription
Amount of $500,000 (the "Minimum Subscription Amount").
If, on the date one year from the effective date of the Registration
Statement (or any extension thereof that is authorized by the Registration
Statement) (the "Impound Date") all the Escrow Conditions are not satisfied, the
Bank shall release to the subscribers all monies deposited pursuant to such
subscriptions, all Order Forms and all earnings on such monies net of escrow
costs, after first having received an executed written request from the Trust
requesting such release. The Trust agrees that in that event the full amount on
deposit, including all earnings, will be distributed as is herein provided. All
cash disbursements shall be mailed by first class United States mail, postage
prepaid, to the addresses shown on the subscription agreement. In the event of
cancellation, the Trust shall furnish Escrow Holder (the "Bank") with a schedule
of the interest payable to each
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subscriber. The decision of the Trust in allocating the interest earned on the
subscription funds shall be final and binding on all of the parties hereto and
on all subscribers.
5. Deposit of Minimum Subscription Amount. If all the Escrow
Conditions are satisfied on or before Impound Date, the Bank shall release to
the Trust those subscriptions, and the principal amount of all monies deposited
therewith, and all interest earned thereon after first having received an
executed written request of the Trust requesting such release. The Trust shall
be responsible for forwarding all interest earned net of escrow costs to the
subscribers. Prior to the satisfaction of the Minimum Subscription Amount, the
monies in such escrow shall remain the property of the subscribers but shall not
be subject to withdrawal by the subscribers prior to the Impound Date. Any
attachment of the subscribers' interest in such monies shall be subject to the
terms of this Agreement.
6. Signatures for Disbursements. The signature of the Trust's
officer, as it shall appear on an authorized document to be submitted to the
Bank by the Trust, shall serve as authorization to the Bank to make any and all
disbursements on behalf of the Trust. The Bank shall be protected in acting
upon, recognizing, or otherwise relying upon any paper or documents believed by
it to be genuine and believed by it to have been signed by the person or persons
by whom it purports to have been signed.
7. Rights of Persons Placing Orders. The Trust hereby
acknowledges and shall make a good faith effort while this Agreement remains in
effect to insure that each subscriber is made aware of the fact that his monies
shall be deposited with the Bank and shall remain subject to this Agreement, and
that such person whose monies are delivered into the escrow account shall only
have the rights with respect to those monies as are set forth herein and in the
prospectus which is a part of the Registration Statement.
8. Amendments and Modifications. This Agreement shall not be
amended, modified, or supplemented except by a writing executed between the
parties hereto.
9. Compliance with Offering. The parties hereto hereby agree that
the escrow account shall be administered in strict compliance with the terms of
this Agreement and the terms of the Registration Statement, and the Trust
warrants that the terms are consistent with the Registration Statement. The
Trust further understands and agrees that the Bank shall maintain the right and
power to immediately resign as depository at any time, without penalty,
effective upon the giving of written notice thereof to the Trust. In that event,
all monies held by the Bank will be transferred to a successor escrow holder as
may be designated by the Trust.
10. Obligation of Bank to Check Compliance. The Bank shall not be
obligated to check the compliance of any subscription or monies received with
any requirements of the Offering, except to the extent expressly requested in
writing by the Trust and agreed to by the Bank. The Bank shall not be
responsible for the collection of any funds not paid by the banks upon which
subscribers' checks are drawn. All checks deposited herein must clear the normal
banking channels prior to the release of any funds.
11. Reports. The Bank shall furnish to the Trust on a bi-monthly
basis beginning fifteen (15) days after the effective date, a written report
that details all monies on deposit hereunder and a list of all subscribers
represented thereby. At the end of the escrow period, the Bank will provide a
statement on the aggregate amount received from each subscriber and a statement
showing the monthly interest earned on the total principal held in the escrow
account.
12. Escrow Fees. The Trust hereby agrees to pay to the Bank for
all services rendered hereunder, the fees and costs set forth in Exhibit "A"
hereto.
The fees and usual charges agreed upon for the Banks services hereunder
shall be considered compensation for its ordinary services as contemplated by
this Agreement, and in the event that the conditions of this escrow are not
promptly fulfilled or that the Bank renders any service hereunder not provided
for, or that there is any assignment of any interest in the subject matter of
this escrow or modification hereof, or that any controversy arises hereunder or
that the Bank is made a party to, or intervenes in, any litigation pertaining to
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this escrow or the subject matter thereof, the Bank shall be reasonably
compensated for such extraordinary services and reimbursed for all costs and
expenses occasioned by such default, delay, controversy, or litigation, and it
shall have the right to retain all documents and/or other things of value at any
time held by it hereunder until such compensation, fees, costs and expenses
shall be paid.
13. Limitation of Liability of the Bank. The parties hereto
expressly recognize that under no circumstances shall the Bank be held liable
for the legality or validity or veracity of the Offering or any other offering
of the Trust, and, instead, the Bank's sole concern and responsibility shall be
to hold the monies in escrow and to invest the same as herein provided until the
Escrow Conditions are satisfied according to the conditions stated herein. By
the acceptance of this escrow, Bank in no way makes any warranties and/or
endorsements to any investors for this offering and is solely acting as escrow
agent for the holding of funds deposited herein in accordance with the within
instructions. The undersigned acknowledge that they have not represented Bank in
any other capacity to investors, either written or implied. The Trust further
acknowledges that the Bank shall not be held liable for the sufficiency or
correctness as to form, manner of execution or validity of any Order Form,
deposit receipt, or other instrument which may be deposited with the Bank
pursuant to this Agreement, or as to the identity, authority or rights of any
person subscribing for any Shares, or for any such person's failure to comply
with any of the provisions of the Subscription Agreement. The Bank is not to be
concerned with the issuance of shares of common or preferred stock of the
undersigned and the same shall be handled completely outside of escrow. The Bank
is only to be concerned with the terms and conditions as set forth herein.
14. Conflicting Demands. In the event conflicting demands are made
upon the Bank with respect to the escrow account, the Trust acknowledges and
agrees that the Bank shall have the absolute right to elect to do any or all of
the following: withhold and stop all further proceedings in performance of this
Agreement; act only upon the joint instructions of the Trust and any subscriber
(or any agent of the subscriber) theretofore making a conflicting demand; or
file a suit in interpleader and obtain an order from a court with jurisdiction
over such matter which requires the parties to interplead and litigate in such
court their several claims and rights against each other. In the event an
interpleader suit is brought, the Bank, at its election, shall be fully released
and discharged from all obligations to further perform any and all duties or
obligations imposed upon it under this Agreement, and the Trust agrees to pay
and reimburse the Bank for all costs, expenses, and reasonable attorneys' fees
expended or incurred by it in the defense or prosecution of such interpleader
suit as such amounts shall be fixed and deemed reasonable by the court. Any
funds and subscriptions held in the escrow which are subject to any such
conflicting demands shall not be included in computing the total funds and
subscriptions held hereunder.
The Bank shall promptly give notice to the Trust of any demands,
requests, orders, or other notices received by it from any subscriber or any
person purporting to represent any subscriber (including a conservator,
guardian, executor or administrator) where such demands, request, order, or
other notice relates to the withdrawal of all or any part of the sums on deposit
in the escrow account.
15. Hold Harmless and Lien. The Trust hereby agrees to pay on
demand, as well as to hold harmless and to indemnify the Bank from and against,
all costs, damages, judgments, attorneys' fees, obligations, and liabilities of
every kind or nature (other than its normal and usual operating expenses
incurred in the Bank's performance hereunder), which, in good faith, the Bank
may incur or sustain in connection with or arising out of this Agreement. The
Trust further grants hereby to the Bank a lien upon all rights, titles, and
interests of the Trust in all of the documents and monies and other property
deposited in escrow pursuant to this Agreement, in order that the Bank may
protect its rights and to indemnify and reimburse itself as it may be permitted
to do so pursuant to this Agreement.
16. Relationship between Parties. The parties hereto expressly
recognize that this Agreement only creates an escrow account into which up to
the Minimum Subscription Amount shall be placed in impound, and otherwise this
Agreement does not create any legal relationship whatsoever between the parties
hereto.
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17. Termination. This Agreement shall terminate effective upon
payment under either Section 4 or 5 hereof. Provided, however, that this
agreement shall not be so terminated until all fees, costs and expenses of the
Bank have been paid.
18. Notices. All instructions, notices, and demands herein
provided for shall be in writing and shall be mailed postage prepaid, first
class mail, as follows:
If to the Trust, to:
Capital Alliance Income Trust,
A Real Estate Investment Trust
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
If to the Bank, to:
Golden Gate Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
_______________, 1997.
"TRUST"
CAPITAL ALLIANCE INCOME TRUST,
A REAL ESTATE INVESTMENT TRUST
By: __________________________________
Its: __________________________________
"BROOKSTREET"
BROOKSTREET SECURITIES CORPORATION,
A CALIFORNIA CORPORATION
By: __________________________________
Its: __________________________________
"BANK"
GOLDEN GATE BANK
By: __________________________________
Its: __________________________________
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EXHIBIT A
1. Fee Schedule
Escrow Fee (Acceptance & Administration, $_________
payable at inception
Processing Fee, Per Name _________
Refund of Subscription Amount and/or
Pro-Rata Calculation of Interest Earned,
Per Name _________
Tax Reporting, Per form _________
Wiring of Funds (Received/Disbursed) _________
SIGNATURE DATE
Trust: _______________________ ___________________, 1997
Bank: _______________________ ___________________, 1997
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