ESCROW AGREEMENT
FOR XXXXXXX GROWTH TRUST II
PUBLIC OFFERING FUNDS
In consideration of the mutual covenants herein contained, XXXXXXX
GROWTH TRUST II, a Delaware business trust, (hereinafter referred to as the
"Trust"), XXXXXXX XXXXXX & COMPANY FINANCIAL SERVICES, INC. (an Iowa
corporation, hereinafter referred to as "Dealer Manager"), and FIRSTAR BANK,
N.A., Corporate Trust Department, Milwaukee, Wisconsin (hereinafter referred
to as the "Escrow Agent"), or its successor, represent and agree as follows:
1. The Trust proposes to offer up to 3,000,000 shares of
beneficial interest in a Delaware business trust (hereinafter referred to as
"Shares") in a public offering made pursuant to a Registration Statement on
Form N-2 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 Trust will also file an
application to register securities with the applicable authorities of states
in which the Public Offering will be made.
2. The Trust has entered into a Dealer Manager Agreement with the
Dealer Manager wherein the Dealer Manager has agreed to use its best efforts
to obtain investors for the Trust and to manage the sale by others of the
Shares in return for a Selling Commission payable by the Trust, out of which
the Dealer Manager will reallow to other broker-dealers participating in the
Public Offering, Selling Commissions attributable to the Shares sold by them.
3. The Trust 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 Shares in the Public
Offering if the Minimum Escrow Deposit (as hereinafter defined) is not
deposited with the Escrow Agent.
4. Until the Initial Closing has been held, all proceeds from
sales of Shares 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 Shares, the number of Shares 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 Section 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 Trust 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
Trust 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 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 Trust or
Dealer Manager, or be subject to the debts of either the Trust, Dealer Manager,
or any other person.
6. The Escrow Agent shall send a written notice to the Trust and
to the Dealer Manager every seven days acknowledging the receipt and the
amount of the deposited funds from the Dealer Manager or Soliciting Dealers.
The Escrow Agent shall give the Trust and Dealer Manager prompt written
notice when funds deposited in the Escrow Account total $6,000,000. 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. Until funds are paid by the Escrow Agent to the Trust at the
initial disbursement of the Minimum Escrow Deposit the Escrow Agent shall
compute the amount of interest earned on funds deposited with the Escrow
Agent for each purchaser of Shares 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 funds are paid by
the Escrow Agent to the Trust at the initial disbursement of the Minimum
Escrow Deposit as provided in Section 10, the Escrow Agent shall report to
the Trust the amount of interest computed with respect to each purchaser, as
provided above. The interest shall be paid to the Trust together with the
payment of funds to the Trust 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 section.
8. The Escrow Period is the period beginning on the date of this
Agreement and ending on the Termination Date. The Termination Date is the
date ninety days after the date of effectiveness of the Registration
Statement, unless the Termination Date is extended. The Trust and Dealer
Manager may extend the Termination Date for two periods of ninety days each.
If the Termination Date is extended for two periods of ninety days,
Termination Date is the date two hundred and seventy (270) days after the
date of effectiveness of the Registration Statement.
9. Until termination of the Escrow Period as described in Section
8, or until payment of the Escrow Account proceeds of the Public Offering
over to the Trust, purchasers in the Public Offering whose funds are held in
the Escrow Account will be deemed to be only subscribers for Shares, in view
of the fact that no Shares will be issued and distributed to such purchasers
until such Escrow Account proceeds are paid over to the Trust 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, equals $6,000,000 or more
in subscription proceeds (exclusive of interest, hereafter "Minimum Escrow
Deposit"), the Escrow Agent shall, after receiving written approval from the
Dealer Manager, disburse the funds on deposit to the Trust on its demand. Any
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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 Dealer Manager, to the Trust 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.
11. If the Escrow Period has ended after the expiration of ninety
days (or 180 days or 270 days if the Termination Date is extended as provided
in Section 8) 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 Shares 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 each purchaser
initially paid on account of purchases of the Shares in the Public Offering
and shall also distribute interest as provided in Section 7 hereof. Each
amount paid or payable to each subscriber or purchaser pursuant to this
section shall be deemed to be the property of each such subscriber or
purchaser, free and clear of any and all claims of the Trust, any agents
employed by the Trust, or any other person or of any creditors of the Trust,
any such agents, or such other persons; and the respective purchases of the
Shares 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 Shares purchased. At such time as
the Escrow Agent shall have made all the payments and remittances, and given
all notices provided for in this section, the Escrow Agent shall be
completely discharged and released of any and all further liability and
responsibilities hereunder.
12. The Trust 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 be compensated as set forth on Exhibit A
hereof. The Escrow Agent shall not receive compensation with respect to
Purchasers whose funds are paid directly to the Trust after the minimum
number of Shares (600,000) is sold.
14. The Trust 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 TRUST: Xxxxx Xxxxx
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Xxxxxxx Growth Trust II
000 Xxxx Xxxxxx, Xxxxxxxx X
XX Xxx 000
Xxxxxx, Xxxx 00000-0000
TO THE ESCROW AGENT: Firstar Bank, N.A.
Corporate Trust Department
Milwaukee, Wisconsin
Xxxxxxx X. Xxxxxxxx, Vice President
0000 Xxxxx Xxxxx Xxxxxx Xx.
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
TO DEALER MANAGER: Xxxxxxx Xxxxxx & Company
Financial Services, Inc.
Attn: Xxx Xxxxx
000 Xxxx Xxxxxx, Xxxxxxxx X
XX Xxx 000
Xxxxxx, Xxxx 00000-0000
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.
[REMAINDER OF PAGE LEFT BLANK.]
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SIGNATURE PAGE FOR ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties hereto have hereunto affixed
their signatures as of this day of , 2000.
XXXXXXX GROWTH TRUST II
By: TJB CAPITAL MANAGEMENT, INC.
Corporate Trustee
By
---------------------------------
XXXXXX X. XXXXXXX,
Chief Executive Officer
By: XXXXXXX XXXXXX & COMPANY PLANNING, INC.
Trust Advisor
By
---------------------------------
XXXXX XXXXX, President
XXXXXXX XXXXXX & COMPANY FINANCIAL
SERVICES, INC.
By
-----------------------------------------
XXXXXX X. XXXXXXX, President
FIRSTAR BANK, N.A., CORPORATE TRUST
DEPARTMENT, MILWAUKEE, WISCONSIN
By
-----------------------------------------
---------------, ------------------------
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EXHIBIT A
COMPENSATION
1. The Escrow Agent shall be paid a flat fee of $3,000 on the Termination
Date.
2. If the funds held in the Escrow Account are returned to the purchasers
as provided in Section 11, the Dealer Manager shall pay to the Escrow
Agent an additional fee equal to $15 per investor.
