ESCROW AGREEMENT
FOR TELECOMMUNICATIONS INCOME FUND XI, L.P.
PUBLIC OFFERING FUNDS
In consideration of the mutual covenants herein contained,
TELECOMMUNICATIONS INCOME FUND XI, L.P. (an Iowa limited partnership)
(hereinafter referred to as the "Partnership"), XXXXXXX XXXXXX & COMPANY
FINANCIAL SERVICES, INC. (an Iowa corporation) (hereinafter referred to as
"Managing Sales Agent"), and __________________________, Cedar Rapids, Iowa,
(hereinafter referred to as the "Escrow Agent"), or its successor represent and
agree as follows:
1. The Partnership proposes to offer up to 25,000 Units of limited
partnership interest (hereinafter referred to as "Units") in a public offering
made pursuant to a Registration Statement on Form S-1 and Prospectus filed with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933, as amended (hereinafter referred to as the "Public Offering"). The
Partnership will also file an application to register securities with the
applicable authorities of states in which the Public Offering will be made.
2. The Partnership has entered into a Managing Sales Agent Agreement
with the Managing Sales Agent wherein the Managing Sales Agent has agreed to
use its best efforts to obtain investors for the Partnership and to manage
the sale by others of the Units in return for a Selling Commission payable by
the Partnership equal to 9.0% of the aggregate capital contributions to the
Partnership out of which the Managing Sales Agent will reallow to other
broker-dealers participating in the Public Offering, Selling Commissions of
up to 6.5% of the capital contributions attributable to the Units sold by
them.
3. The Partnership desires to meet the requirements of the Securities Act
of 1933 and the various state regulatory statutes and regulations, and desires
to protect the investors in the Public Offering by providing, under the terms
and conditions herein set forth, for the return to subscribers of the money
which they may pay on account of purchases of Units in the Public Offering if
the Minimum Escrow Deposit (as hereinafter defined) is not deposited with the
Escrow Agent.
4. All proceeds from sales of Units in the Public Offering shall be
delivered to the Escrow Agent immediately upon receipt thereof from investors,
endorsed (if appropriate) to the order of the Escrow Agent, together with an
appropriate written statement setting forth the name, address and social
security number of each person purchasing Units, the number of Units purchased,
and the amount paid by each such Purchaser.
5. To the extent any such proceeds are deposited with the Escrow Agent in
accordance with paragraph 4 in the form of uncollected checks, the Escrow Agent
promptly shall present the checks for collection through customary banking and
clearing house facilities. The Escrow Agent shall invest all cash or collected
funds deposited with it as soon after receipt as is reasonable in an account
(sometimes hereinafter referred to as the "Escrow Account") and shall reinvest
said funds, principal and interest, upon the sale or maturity of any securities
or assets purchased hereunder, all such investments or reinvestments to be as
directed by the Partnership and only in short-term government obligations,
securities issued or guaranteed by government agencies, funds investing only in
government obligations or government agency securities, and time or demand
deposits in commercial banks. The Escrow Agent shall, upon written request
therefor, provide the Partnership with a list of the securities and assets then
on hand, their identification, location and maturity date, together with a
complete accounting of the total cash income earned by such securities or others
previously purchased, sold or matured, as interest or otherwise. The Escrow
Account shall be created and maintained subject to the customary rules and
regulations
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of the Escrow Agent pertaining to such accounts. Unless and until the amounts
so deposited in the Escrow Account shall equal at least the Minimum Escrow
Deposit (as hereinafter defined), all amounts so deposited in the Escrow
Account shall not become the property of the Partnership or Managing Sales
Agent, or be subject to the debts of either the Partnership, Managing Sales
Agent, or any other person.
6. The Escrow Agent shall send a written notice to the Partnership and to
the Managing Sales Agent every seven days acknowledging the receipt and the
amount of the deposited funds from the Managing Sales Agent or Selected Sales
Agents. The Escrow Agent shall give the Partnership and Managing Sales Agent
prompt written notice when funds deposited in the Escrow Account total
$1,200,000. No certificate of deposit, stock certificates or any other
instrument or document representing any interest in the deposited funds shall be
issued by the Escrow Agent.
7. The Escrow Agent shall compute the amount of interest earned on funds
deposited with the Escrow Agent for each purchaser of Units based pro rata on
the average daily rate for the number of days that funds received from each
purchaser are held in the Escrow Account pursuant to this Agreement. At the
time that funds are paid by the Escrow Agent to the Partnership at the initial
disbursement of the Minimum Escrow Deposit or at any subsequent disbursement as
provided in Section 10, the Escrow Agent shall report to the Partnership the
amount of interest computed with respect to each purchaser, as provided above.
The interest shall be paid to the Partnership together with the payment of funds
to the Partnership at the initial disbursement of the Minimum Escrow Deposit or
at any subsequent disbursement as provided in Section 10.
If the funds held in the Escrow Account are returned to the purchasers as
provided in Section 11, the Escrow Agent shall pay to each of the purchasers the
amount of interest earned on the funds of each purchaser, computed as provided
in the foregoing paragraph.
8. During the period (hereinafter referred to as the "Escrow Period")
beginning on the date of this Agreement and ending one year after the date of
effectiveness of the Registration Statement (or two years after the date of
effectiveness of the Registration Statement if extended by the Partnership and
Managing Sales Agent), the Escrow Account shall make or permit no disbursements
from the Escrow Account except as expressly provided for herein.
9. Until termination of the Escrow Period as described in paragraph 8, or
until payment of the Escrow Account proceeds of the Public Offering over to the
Partnership, purchasers in the Public Offering whose funds are held in the
Escrow Account will be subscribers for Units, in view of the fact that no Units
will be issued and distributed to such purchasers until such Escrow Account
proceeds are paid over to the Partnership at Closings held for that purpose.
10. At the time (and in the event) that the amount on deposit in the
Escrow Account shall, during the Escrow Period, equal $1,200,000 or more in
subscription proceeds (exclusive of interest)(hereafter "Minimum Escrow
Deposit"), the Escrow Agent shall, after receiving written approval from the
Managing Sales Agent, disburse the funds on deposit to the Partnership on its
demand. Any amounts deposited with the Escrow Agent subsequent to attainment of
the Minimum Escrow Deposit shall be disbursed by the Escrow Agent, after
receiving written approval of the Managing Sales Agent, to the Partnership on
its demand. Upon the making of the initial disbursement of the Minimum Escrow
Deposit, plus interest, and the subsequent disbursements of subsequent deposits,
plus interest, prior to the termination of the Escrow Period, the Escrow Agent
shall be completely discharged and released of any and all further
responsibilities hereunder.
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11. If the Escrow Period has ended after the expiration of one year from
the effective date of the Registration Statement and the Minimum Escrow Deposit
has not been attained, the Escrow Agent shall return to each of the purchasers
of the Units in the Public Offering, as promptly as possible after such
termination of the Escrow Period and on the basis of its records pertaining to
the Escrow Account, the sum which each purchaser initially paid on account of
purchases of the Units in the Public Offering and shall also distribute interest
as provided in paragraph 7 hereof. Each amount paid or payable to each
subscriber or purchaser pursuant to this paragraph shall be deemed to be the
property of each such subscriber or purchaser, free and clear of any and all
claims of the Partnership, any agents employed by the Partnership, or any other
person or of any creditors of the Partnership, any such agents, or such other
persons; and the respective purchases of the Units made and entered into in the
Public Offering shall thereupon be xxxxxx, XXXX FACTO, to be canceled without
any further liability of the purchasers or any of them to pay for the Units
purchased. At such time as the Escrow Agent shall have made all the payments
and remittances, and given all notices provided for in this paragraph, the
Escrow Agent shall be completely discharged and released of any and all further
liability and responsibilities hereunder.
12. The Partnership will deliver a copy of the Prospectus to the Escrow
Agent within two weeks of the effective date of the Registration Agreement. The
Escrow Agent will have no responsibility to examine the Prospectus with regard
to the Escrow Account or otherwise.
13. The Escrow Agent shall receive compensation in the amount of $____,
plus $__ per Purchaser if the minimum number of Units (1,200) is sold or $__ per
Purchaser if the minimum number of Units is not sold, plus out-of-pocket
expenses including postage, toll calls, registered mail, photocopies, wire
transfer charges, insurance, etc., for its services hereunder from the
Partnership and no charge shall be made therefor against the interest and
principal amount of the escrow funds. If funds held pursuant to this Agreement
are invested in a daily interest note for which the Escrow Agent acts as
administrator, the Escrow Agent may receive a fee pursuant to the administration
agreement with the daily interest note fund. The Escrow Agent shall not receive
compensation with respect to Purchasers whose funds are paid directly to the
Partnership after the minimum number of Units (1,200) is sold.
14. The Partnership does hereby agree to indemnify and hold the Escrow
Agent harmless against any and all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and counsel fees, which
may be imposed upon the Escrow Agent in connection with its acceptance or
appointment hereunder for the performance of its duties, including any
litigation arising from this Escrow Agreement or involving the subject matter
hereof. This Agreement to indemnify and hold harmless, however, shall not
absolve the Escrow Agent in the event of any damages, losses, claims,
liabilities or expenses as herein contemplated in the event they are the result
of the Escrow Agent's own negligence or willful default.
15 Any notices provided for herein, or which any party hereto may desire
to give to any other party, may be given by registered or certified mail, return
receipt requested, postage prepaid, or orally or by telephone if confirmed in
writing, to the respective parties at the respective addresses stated below:
TO THE PARTNERSHIP: Xxxxx Xxxxxxxxx
Telecommunications Income Fund XI, L.P.
000 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxx 00000
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TO THE ESCROW AGENT: ---------------------------
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TO MANAGING SALES AGENT: Xxxxxxx Xxxxxx & Company Financial Services, Inc.
000 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxx 00000
Notices given by mail shall be deemed to have been given when mailed in
accordance herewith.
16. The validity, interpretation and construction of this Agreement and of
each part hereof shall be governed by the laws of the State of Iowa.
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their
corporate seals and signatures as of this ________ day of________, 1997.
TELECOMMUNICATIONS INCOME FUND XI, L.P.
By: XXXXXXX XXXXXX & COMPANY LEASING, INC.,
General Partner
By
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XXXXXX X. XXXXXXX, Chief
Executive Officer
XXXXXXX XXXXXX & COMPANY FINANCIAL
SERVICES, INC.
By
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XXXXXX X. XXXXXXX, President
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By
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