EXHIBIT K
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is entered into this ____ day
of __________, 2002, between NAIC Growth Fund, Inc., a Maryland corporation (the
"Fund"), Broker Dealer Financial Services Corp., an Iowa corporation (the
"Underwriter"), and Standard Federal Bank N.A., a national banking association
(the "Escrow Agent").
RECITALS
A. The Fund proposes to issue and sell through the Underwriter up to
5,000,000 shares of its common stock, par value $0.001 per share (the "Shares")
in accordance with the terms of an Underwriting Agreement between the Fund, the
Underwriter and Growth Fund Adviser, Inc. dated _________, 2002 (the
"Underwriting Agreement").
B. The Fund and the Underwriter desire that the payments received from
prospective purchasers in the offering be placed in escrow until released to the
Fund pursuant to the terms of this Agreement.
THEREFORE, it is hereby agreed as follows:
1. Each person desiring to purchase Shares in the offering ("Purchaser")
will be required to send the Fund a subscription agreement to subscribe
for such Shares ("Subscription Agreement") and a check payable to the
Escrow Agent in the amount of the purchase price for the Shares the
Purchaser desires to purchase (the "Subscription Payment").
2. The Fund will deposit any Subscription Payment it receives with the
Escrow Agent and will provide the Escrow Agent with the following
information, with a copy to the Underwriter, with respect to each
Subscription Agreement it receives:
(a) The name and address of the Purchaser,
(b) The date of the Subscription Agreement received by the Fund;
and
(c) The dollar amount of the Subscription Payment relating to such
Subscription Agreement.
3. The Escrow Agent shall provide the Fund with a report by [time] on the
first business day following each Determination Date (as hereafter
defined). Each report shall be prepared as of 5:30 p.m., local time, of
the applicable Determination Date and shall set forth the name of each
Purchaser from whom the Escrow Agent has received previously unreported
cleared funds and the amount of previously unreported cleared funds for
each such Purchaser, as of such date and time. The Fund will provide
the Underwriter with a copy of each such report. For purposes of this
Agreement, a "business day" shall mean any day on which the Growth Fund
Advisor, Inc. and the New York Stock Exchange are
open for business and the Fedwire service of the Federal Reserve Board
is operational, and "Determination Date" means Thursday of each week,
or if any Thursday is not a business day, the business day immediately
preceding such Thursday.
4. The Escrow Agent shall hold any Subscription Payments and related
investment earnings which it receives in escrow, subject to the
provisions of this Agreement. The Escrow Agent shall provide the Fund
with a monthly statement of receipts and disbursements made pursuant to
this Agreement. The Fund shall provide the Underwriter with a copy of
each such statement.
5. The Fund and the Underwriter have each reserved the right, in their
sole discretion, to accept or to not accept a Subscription Agreement.
If for any reason a Subscription Agreement is not accepted by either
the Fund or the Underwriter, the Fund will instruct the Escrow Agent in
writing, with a copy to the Underwriter, to refund the related
Subscription Payment to the applicable Purchaser, without interest. The
Escrow Agent shall refund such Subscription Payments within five
business days of receiving such written instruction.
6. Upon acceptance of a Subscription Agreement by the Fund and the
Underwriter and sale by the Fund of the related Shares to the
applicable Purchaser, the Fund shall notify the Escrow Agent of such
acceptance and the settlement date for the sale of such Shares. The
Escrow Agent shall, on the settlement date, deposit the related
Subscription Payment to the Fund's account no. ___________________ with
the Escrow Agent.
7. The duties and obligations of the Escrow Agent hereunder shall be
determined solely by the express provisions of this Agreement. The
Escrow Agent shall not be liable or responsible for any act done or
step taken or omitted by it or any mistake of fact or law or for
anything which it may do or refrain from doing, except for its gross
negligence, willful misconduct or willful default in the performance of
any obligation imposed upon it hereunder.
8. The Escrow Agent shall not be liable to the Underwriter or to any other
person for acting upon any written instruction which it receives from
the Fund pursuant to this Agreement. The Escrow Agent is authorized to
act in reliance upon the sufficiency, correctness, genuineness or
validity of any instrument or document or other writing submitted to it
hereunder and shall have no liability with respect to such matters.
9. Any property held by the Escrow Agent under this Agreement shall be
held uninvested.
10. The Escrow Agent is not obligated to render any statements or notices
of non-performance hereunder to any party to this Agreement but may in
its discretion inform any party or its authorized representative of,
any matters pertaining to this Agreement.
11. The Escrow Agent's fee as set forth in the attached fee schedule shall
be paid by the Fund. The Fund agrees to indemnify and hold harmless the
Escrow Agent from any costs, damages, expenses or claims, including
attorney's fees, which the Escrow Agent may incur or sustain as a
result of or arising out of this Agreement or the Escrow Agent's duties
relating thereto and will pay them on demand.
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12. The Escrow Agent shall be reimbursed by the Fund for all disbursements
and expenses made or incurred hereunder and if it shall be required to
perform extraordinary services not contemplated herein, it shall
receive reasonable additional compensation therefor. The Escrow Agent
shall not be required to institute or maintain litigation unless
indemnified to its satisfaction for its counsel fees, costs,
disbursements and all other costs, expenses and liabilities to which it
may in its judgment be subjected in connection with such action.
13. In the event of any disagreement or the presentation of adverse claims
or demands in connection with the property deposited pursuant to this
Agreement, the Escrow Agent shall, at its option, be entitled to refuse
to comply with any such claims or demands during the continuance of
such disagreement and may refrain from delivering any item affected
thereby, and in so doing, the Escrow Agent shall not become liable to
Fund or Underwriter, or either of them, or to any other person, due to
its failure to comply with any such adverse claim or demand. The Escrow
Agent shall be entitled to continue, without liability, to refrain and
refuse to act:
(a) Until all the rights of the adverse claimants have been
finally adjudicated by a court having jurisdiction of the
parties and the items affected thereby, after which time the
Escrow Agent shall be entitled to act in conformity with such
adjudication; or
(b) Until all differences shall have been adjusted by agreement
and the Escrow Agent shall have been notified thereof and
shall have been directed in writing signed jointly or in
counterpart by Fund and Underwriter and by all persons making
adverse claims or demands, at which time the Escrow Agent
shall be protected in acting in compliance therewith.
The parties agree that the Escrow Agent may seek adjudication of any
adverse claim or demands in either the Circuit Court for the County of
Oakland, Michigan, or the United States Federal District Court for the
Eastern District of Michigan, Southern Division, agree to the
jurisdiction of either of said Courts over their persons as well as the
property deposited pursuant to this Agreement, waive personal service
of any process, and agree that service of process by certified or
registered mail, return receipt requested, to the address set forth in
Section 16 below shall constitute adequate service.
14. The entire agreement of the parties with respect to the subject matter
hereof is contained herein, provided that nothing contained herein
shall be deemed to supersede, limit or modify the Underwriting
Agreement. Any change in terms or conditions herein may only be made in
writing signed by all parties hereto. The Escrow Agent shall not be
charged with knowledge of any fact, including but not limited to
performance or non-performance of any condition, unless it has actually
received written notice thereof from one of the parties pursuant to
Section 16, such notice clearly referring to this Agreement.
15. The Fund may designate another person to take any actions which are
required or permitted to be taken by the Fund under this Agreement. Any
such designation shall be in writing and shall be provided to the other
parties to this Agreement pursuant to Section
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16. Such parties may rely upon such designation until they receive
written notice to the contrary from the Fund pursuant to Section 16.
16. All notices or communications hereunder shall be in writing and shall
be mailed, delivered, or telecopied and confirmed as follows. Each
party to this Agreement may change such address for notices by sending
to the parties to this Agreement written notice of a new address for
such purpose.
If to the Underwriter:
Broker Dealer Financial Services Corp.
0000 XX 00xx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxx 00000-0000
Attention: X.X. Xxxxxx
Facsimile no. (000) 000-0000
If to the Fund:
NAIC Growth Fund, Inc.
(address for mail)
X.X. Xxx 000
Xxxxx Xxx, Xxxxxxxx 00000
(address for delivery)
000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile no. (000) 000-0000
If to the Escrow Agent:
Standard Federal Bank N.A.
17. This Agreement shall be deemed to have been made under and shall be
governed by the laws of the State of Michigan in all respects,
including matters of construction, validity and performance.
18. The Escrow Agent may resign as such following the giving of thirty days
prior written notice to the other parties hereto. Similarly, the Escrow
Agent may be removed and replaced following the giving of thirty days
prior written notice to the Escrow Agent by the other parties hereto.
In either event, the duties of the Escrow Agent shall terminate thirty
days after the date of such notice (or as of such earlier date as may
be mutually agreeable); and the Escrow Agent shall deliver the balance
of the property then in its possession to a successor escrow the Escrow
Agent as shall be appointed by the other
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parties hereto as evidenced by a written notice filed with the Escrow
Agent, or if no successor Escrow Agent has been so appointed, the then
acting Escrow Agent shall deliver the balance of the escrow deposit
then in its possession to the applicable Purchasers as their interests
may appear.
19. No waiver of any past agreement or condition hereunder by any party
hereto shall operate as a continuing waiver of any agreement or
condition under this Agreement. Each party shall have the right to
waive and/or nullify, in writing, any condition or term of this
Agreement which is for its or his benefit.
20. If any provision or clause in this Agreement or application thereof to
any person or circumstances is held invalid or unenforceable, such
invalidity or unenforceability shall not affect other provisions or
applications of this Agreement which can be given effect without the
invalid or unenforceable provision or application, and to this end the
provisions of this Agreement are declared to be severable.
NAIC GROWTH FUND, INC.
By: ______________________________________
Its: _____________________________________
BROKER DEALER FINANCIAL SERVICES CORP.
By: ______________________________________
Its: _____________________________________
STANDARD FEDERAL BANK N.A.
By: ______________________________________
Its: _____________________________________
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