FORM OF ESCROW AGREEMENT ]

Exhibit (k)(1)

This ESCROW AGREEMENT (this “Agreement”) made as of __________, 2009 by and among XXXXXXX CAPITAL, INC., a Maryland corporation (the “Company”), XXXXXXX SECURITIES, LLC, a Delaware limited liability company (the “Investor Agent”), whose addresses and other information appear on the Information Sheet (as defined herein) attached to this Agreement, and XXXXXX STREET BANK & TRUST, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 (the “Escrow Agent”).

WITNESSETH:

WHEREAS:

A. The Company intends to offer for sale (the “Offering”), on a continuous basis, up to 10,000,000 shares of common stock, par value $0.001 ("Common Stock") of the Company (the “Securities”) pursuant to that certain Dealer Manager Agreement, dated as of __________, 2009, by and among the Company and the Investor Agent (the “Dealer Manager Agreement”). The Company intends to conduct the Offering upon the terms and subject to the conditions set forth or described in the Dealer Manager Agreement, the registration statement on Form N-2 (File No. 333-157217) filed by the Company with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”)(as amended from time to time, the “Registration Statement”), the prospectus, dated as of __________, 2009, filed by the Company with the Commission pursuant to Rule 497 under the Securities Act (the “Prospectus”), and the form of Subscription Agreement included in such Prospectus (the “Subscription Agreement”), to be entered into by and among the Company and the investors signatory thereto (“Investors”).

B. In connection with the Offering, the Company intends to conduct an initial closing (the “Initial Closing”) upon satisfaction of certain specified conditions (the “Initial Closing Conditions”) set forth in the information sheet which is attached to this Agreement as Exhibit A (the “Information Sheet”), and to thereafter conduct subsequent closings (each, a “Subsequent Closing”) from time to time until the Termination Date (as defined below).

C. The Company and the Investor Agent propose to establish an escrow account (the “Escrow Account”), to hold the funds from each Investor (the “Subscription Funds”), and the Escrow Agent is willing to act as escrow agent for the Offering and to establish an account into which the Subscription Funds received by the Escrow Agent may be held in accordance with the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the Company, the Investor Agent and the Escrow Agent hereby agree as follows:

1. Information Sheet. Certain information regarding the Company, the Investor Agent, the fees payable to the Escrow Agent, the terms of the Offering and time periods relevant to this Agreement is set forth on the information sheet which is attached to this Agreement as Exhibit A and is incorporated by reference herein and made a part hereof (the “Information Sheet”).

2. Establishment of the Escrow Account.

2.1 The Escrow Agent shall establish -an interest-bearing bank account, until such time as the Initial Closing Conditions have been satisfied, at the branch of the Escrow Agent selected by the Escrow Agent, and bearing the title set forth on the Information Sheet (the “Escrow Account”). The purpose of the Escrow Account is for (a) the deposit of all Subscription Funds which are received by the Escrow Agent by wire transfer or check from prospective purchasers of the Securities, (b) the holding of amounts of Subscription Funds which are collected through the banking system and (c) the disbursement of collected Subscription Funds, all as described herein.

2.2 On or before the date of the initial deposit in the Escrow Account pursuant to this Agreement, the Investor Agent shall notify the Escrow Agent of the date of the commencement of the Offering (the “Effective Date”), and the Escrow Agent shall not be required to accept any amounts for credit to or deposit in the Escrow Account prior to its receipt of such notification.

2.3 The “Offering Period,” which shall be deemed to commence on the Effective Date, shall continue until the date set forth on the Information Sheet. The Offering Period shall be extended by the written agreement of the Company and the Investor Agent (an “Extension Period”) only if the Escrow Agent shall have received written notice thereof signed by the Company and the Investor Agent prior to the expiration of the Offering Period. The Extension Period, which shall be deemed to commence on the next calendar day following the expiration of the Offering Period, shall expire on the date set forth on the Information Sheet. The last day of the Offering Period, or the last day of the Extension Period (if the Escrow Agent has received written notice thereof as herein above provided), is referred to herein as the “Termination Date." Except as provided in Section 4.3 hereof, after the Termination Date, the Escrow Agent shall not accept any additional amounts representing payments by prospective purchasers.

3. Deposits to the Bank Account.

3.1 Subscription Funds from Investors shall be delivered to the Escrow Agent by wire transfer in accordance with the wire transfer instructions set forth on the Information Sheet. The Investor Agent and the Company shall promptly deliver to the Escrow Agent any Subscription Funds which they may receive from an Investor. Upon the Escrow Agent’s receipt of such Subscription Funds, they shall be credited to the Escrow Account. If the Investor Agent rejects the subscription of any Investor, the Investor Agent shall notify the Escrow Agent of such rejection, and the Escrow Agent shall promptly refund to such prospective Investor the amount of payments received from such Investor which is then held in the Fund or which thereafter clears the banking system, without interest thereon or deduction therefrom, by drawing a check on the Escrow Account for the amount of such payments made payable to the Investor and delivering the check to the Investor Agent for delivery to the Investor.

3.2 Promptly after receiving Subscription Funds as described in Section 3.1, the Escrow Agent shall deposit the same into the Escrow Account. Amounts so deposited are hereinafter referred to as “Escrow Amounts." The Escrow Agent shall cause the Bank to process all Escrow Amounts for collection through the banking system.

3.3 The Escrow Agent shall not be required to accept in the Escrow Account any amounts representing payments by Investors except during the Escrow Agent’s regular business hours.

3.4 Only those Escrow Amounts which have been deposited in the Escrow Account and which have cleared the banking system and have been collected by the Escrow Agent are herein referred to as the “Fund.”

3.5 If the Escrow Agent receives a written notice signed by the Company and the Investor Agent stating that the Offering has been terminated prior to the Termination Date, the Escrow Agent shall refund any portion of the Fund that has not been disbursed in accordance with Article 4 hereof to the Investors as provided in Section 4.1.

3.6 The parties acknowledge and understand that amounts in the Fund in excess of $100,000 will not be insured by the Federal Deposit Insurance Corporation. The Company and the Investor Agent have advised all Investors of the foregoing.

3.7 In no event shall the Escrow Agent be required to receive, retain or otherwise handle subscription documents or other information relating to the Offering and any such information shall be returned to the Investor Agent promptly upon receipt by the Escrow Agent.

4. Disbursement from the Bank Account.

4.1 Subject to Section 4.3 below, if by the close of regular banking hours on the Termination Date the Escrow Agent is not notified jointly by the Company and Investor Agent that the Initial Closing Conditions have been met, the Escrow Agent shall promptly refund to each Investor the amount of payment received from such Investor which is then held in the Fund or which thereafter clears the banking system, with interest thereon but without any deduction therefrom, by drawing a check or initiating a wire transfer on the Escrow Account for the amount of such payments, made payable to the Investor and delivering the check or wire transfer to the Investor as instructed by the Investor Agent. In such event, the Escrow Agent shall promptly notify the Company and the Investor Agent of its distribution of the Fund.

4.2 Upon receipt of a joint written instruction letter by the Company and the Investor Agent that the Initial Closing Conditions have been met and providing instructions as to the disbursement of the amounts then comprising the Fund, the Escrow Agent shall promptly disburse such amounts, by drawing checks or initiating wire transfers from the Escrow Account, in accordance with all written instructions signed by the Company and the Investor Agent.

4.3 Subsequent to the Initial Closing, upon receipt of a joint written instruction letter by the Company and the Investor Agent that a Subsequent Closing has been scheduled and providing instructions as to the disbursement of the amounts then comprising the Fund, the Escrow Agent shall promptly disburse such amounts, by drawing checks or initiating wire transfers from the Escrow Account, in accordance with all written instructions signed by the Company and the Investor Agent.

4.3 After the Termination Date and upon disbursement of the remaining amounts then comprising the Fund pursuant to the terms of this Article 4, the Escrow Agent shall be relieved of further obligations and released from all liability under this Agreement. It is expressly agreed and understood that in no event shall the aggregate amount of disbursements made by the Escrow Agent at the time of the Initial Closing or any Subsequent Closing exceed the amounts then comprising the Fund.

4.4 The Escrow Agent agrees to prohibit any debit transactions and/or debit items from posting to the Escrow Account prior to disbursement of the Fund in connection with an Initial Closing or any Subsequent Closing unless said disbursement results from the rejection of an Investor as provided in Section 3.1.

5. Rights, Duties and Responsibilities of Escrow Agent. It is understood and agreed that the duties of the Escrow Agent are purely ministerial in nature, and that:

5.1 The Escrow Agent acts only as an agent and a depository in accordance with the express terms and conditions of this Agreement and is not a party to or bound by any agreement or undertaking other than this Agreement unless such agreement or undertaking is in writing and signed by the Escrow Agent. If this Agreement is in conflict with the terms and conditions of any other agreement to which the Company or the Investor Agent is a party or which otherwise relates to the Offering, the terms and conditions set forth herein are controlling.

5.2 The Escrow Agent shall notify the Investor Agent of all Escrow Amounts that have been deposited in the Escrow Account as and when received by the Escrow Agent. The Escrow Agent shall make Escrow Account balance, deposit and disbursement information available to the Investor Agent via the Internet.

5.3 The Escrow Agent shall not be responsible for or be required to enforce any of the terms or conditions of the selling agreement or any other agreement between the Investor Agent and the Company nor shall the Escrow Agent be responsible for the performance by the Investor Agent or the Company of their respective obligations under this Agreement.

5.4 The Escrow Agent shall not be required to keep records of any information with respect to payments deposited by the Investor Agent, Company or Investors except as to the amount of such payments.

5.5 The Escrow Agent shall be entitled to rely upon the accuracy, act in reliance upon the contents, and assume the genuineness of any notice, instruction, certificate, signature, instrument or other document which is given to the Escrow Agent pursuant to this Agreement without the necessity of the Escrow Agent verifying the truth or accuracy thereof. The Escrow Agent shall not be obligated to make any inquiry as to the authority, capacity, existence or identity of any person purporting to give any such notice or instructions or to execute any such certificate, instrument or other document.

5.6 In the event of any disagreement or presentation of adverse claims or demands in connection with this Agreement, the Escrow Agent, at its option, may refuse to comply with any claim or demand and refrain from delivering the Fund or any part thereof until all differences have been resolved by agreement or pursuant to a final adjudication by a court of competent jurisdiction. If any disagreement arises or results in adverse demands being made in connection with this Agreement, the Escrow Agent may interplead the Fund, less its fees, expenses, and advances, in the District Court for the City and County of Denver, State of Colorado. Escrow Agent shall then be fully discharged of its duties as Escrow Agent. The undersigned, for themselves, heirs, successors and assigns, do hereby submit themselves to the jurisdiction of said court and do hereby appoint the Clerk of said Court as their agent for service of process in any such proceedings.

5.7 The Escrow Agent shall not be liable for any action taken or omitted hereunder, or for the misconduct of any employee, agent or attorney appointed by it, except in the case of willful misconduct or gross negligence. The Escrow Agent shall be entitled to consult with counsel of its own choosing and shall not be liable for any action taken, suffered or omitted by it in reasonable reliance upon the advice of such counsel.

5.8 In case any property held by the Escrow Agent hereunder shall be attached, garnished or levied upon under any order of any court or the delivery thereof shall be stayed or enjoined by any order of any court, or any other order, judgment or decree shall be made or entered by any court affecting such property or any part thereof or any acts of the Escrow Agent, the Escrow Agent is hereby authorized, in its exclusive discretion, to obey and comply with all writs, orders, judgments, or decrees so entered or issued, whether with or without jurisdiction, and, if the Escrow Agent obeys and complies with any such writ, order, judgment or decree, it shall not be liable to any of the parties hereto, their successors, heirs or personal representatives or to any other person, firm or corporation, by reason of such compliance notwithstanding such writ, order, judgment or decree be subsequently reversed, modified, annulled, set aside or vacated.

5.9 The Escrow Agent shall have no responsibility at any time to ascertain whether or not any security interest exists in the Escrow Amounts, the Fund or any part thereof or to file any financing statement under the Uniform Commercial Code with respect to the Fund or any part thereof.

6. Amendment; Resignation or Removal of Escrow Agent; Successor Escrow Agent.

6.1 This Agreement may be altered or amended only with the written consent of the Company, the Investor Agent and the Escrow Agent.

6.2 The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving written notice of such resignation to the Company and the Investor Agent specifying a date when such resignation shall take effect and upon delivery of the Fund to the successor escrow agent designated in writing by the Company or the Investor Agent. Such successor escrow agent shall become the Escrow Agent hereunder upon the resignation date specified in such notice. If the Company or the Investor Agent fails to designate a successor Escrow Agent within thirty days after such notice, then the resigning Escrow Agent shall promptly refund the amount in the Fund to each prospective Investor without interest thereon or deduction. Subject to the preceding sentence, the Escrow Agent shall continue to serve until its successor accepts the escrow and receives the Fund. The Company and the Investor Agent shall have the right at any time to remove the Escrow Agent and substitute a new escrow agent by giving notice thereof to the Escrow Agent then acting. Upon its resignation or removal and delivery of the Fund as set forth in this Section 6, the Escrow Agent shall be discharged of and from any and all further obligations arising in connection with the escrow contemplated by this Agreement. Without limiting the provisions of Section 8 hereof, the resigning or removed Escrow Agent shall be entitled to be reimbursed by the Company and the Investor Agent for any expenses incurred in connection with its removal, resignation, transfer of the Fund to a successor escrow agent or distribution of the Fund pursuant to this Section 6.

6.3 Any corporation or association into which the Escrow Agent may be merged or to which all or substantially all of the Escrow Agent’s corporate trust line of business may be transferred shall become the Escrow Agent under this Agreement without further action upon notice to the Company and the Investor Agent.

7. Representations and Warranties. The Company and the Investor Agent hereby severally represent and warrant to the Escrow Agent that:

7.1 No party other than the parties hereto and the Investors have, or shall have, any lien, claim or security interest in the Escrow Amounts or the Fund or any part thereof.

7.2 No financing statement under the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in or describing (whether specifically or generally) the Escrow Amounts or the Fund or any part thereof.

7.3 The subscription information submitted with each deposit shall, at the time of submission and at the time of the disbursement of the Fund, be deemed a representation and warranty that such deposit represents a bona fide payment by the Investor described therein for the amount of Securities set forth in such subscription information.

7.4 All of the information contained in the Information Sheet is, as of the date hereof, and will be, at the time of any disbursement of the Fund, true and correct.

7.5 Reasonable controls have been established and required due diligence performed to comply with “Know Your Customer” regulations, USA Patriot Act, Office of Foreign Asset Control (OFAC) regulations and the Bank Secrecy Act.

7.6 The Company and the Investor Agent have the right and authority to act on behalf of the Investors pursuant to the terms of the Subscription Agreement signed by each Investor.

8. Fees and Expenses. The Company and the Investor Agent jointly and severally agree to pay the Escrow Agent the Escrow Agent fees set forth on the Information Sheet, payable as and when stated therein and to reimburse the Escrow Agent for any reasonable expenses incurred in connection with this Agreement, including, but not limited to, reasonable counsel fees.

9. Indemnification and Contribution.

9.1 The Company and the Investor Agent (collectively referred to as the “Indemnitors”) jointly and severally agree to indemnify the Escrow Agent and its officers, directors, employees, agents and shareholders (collectively referred to as the “Indemnitees”) against, and hold them harmless of and from, any and all loss, liability, cost, damage and expense, including without limitation, reasonable counsel fees and amounts paid in settlement (collectively referred to as “Losses”), which the Indemnitees may suffer or incur by reason of any action, claim or proceeding brought against the Indemnitees arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates, except to the extent such action, claim or proceeding is the result of the willful misconduct or gross negligence of the Indemnitees.

9.2 To the extent the indemnification provided for in Section 9.1 is unavailable to an Indemnitee or insufficient in respect of any Loss of such Indemnitee, then each Indemnitor shall contribute to the amount paid or payable by such Indemnitee as a result of such Loss (a) in such proportion as is appropriate to reflect the relative benefits received by the Indemnitors, on the one hand, and the Indemnitee or Indemnitees, on the other, from the Offering or (b) if the allocation provided by clause (a) is not permitted by applicable law, in such proportion as is appropriate to reflect the relative fault of the Indemnitors, on the one hand, and the Indemnitee or Indemnitees, on the other, in connection with the action, claim or proceeding that resulted in such Losses. The aggregate amount which the Indemnitees shall be required to contribute in respect of all such Losses shall not exceed the Escrow Agent Fees actually received by the Escrow Agent pursuant to this Agreement.

9.3 The provisions of this Article 9 shall survive any termination of this Agreement, whether by disbursement of the Fund, resignation of the Escrow Agent or otherwise.

10. Termination of Agreement. This Agreement shall terminate on the final disposition of the Fund pursuant to Section 4, provided that the rights of the Escrow Agent and the obligations of the other parties hereto under Section 9 shall survive the termination hereof and the resignation or removal of the Escrow Agent.

11. Governing Law and Assignment. This Agreement shall be construed in accordance with and governed by the laws of the State of Colorado, without regard to the conflicts of laws principles thereof that would apply the laws of any other state, and shall be binding upon the parties hereto and their respective successors and assigns; provided, however, that any assignment or transfer by any party of its rights under this Agreement or with respect to the Escrow Amounts or the Fund shall be void as against the Escrow Agent unless (a) written notice thereof shall be given to the Escrow Agent; and (b) the Escrow Agent shall have consented in writing to such assignment or transfer. The parties consent to the jurisdiction and venue of the foregoing courts and consent that any process or notice of motion or other application to any of said courts or a judge thereof may be served inside or outside the State of Colorado by registered mail, return receipt requested, directed to the party being served at its address set forth on the signature pages to this Agreement (and service so made shall be deemed complete three days after the same has been posted as aforesaid) or by personal service or in such other manner as may be permissible under the rules of said courts. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding brought in such a court and any claim that suit, action, or proceeding has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

12. Notices. All notices required to be given in connection with this Agreement shall be sent by registered or certified mail, return receipt requested, by confirmed fax or another electronic communication, or by hand delivery with receipt acknowledged, or by the Express Mail service offered by the United States Postal Service, and addressed, if to the Company or the Investor Agent, at their respective addresses set forth on the Information Sheet, and if to the Escrow Agent, at its address set forth above, to the attention of the Downtown Banking Center – Escrow Department.

13. Assignment. The covenants and provisions of this Agreement by or for the benefit of the Company, the Investor Agent and the Escrow Agent shall bind and inure to the benefit of their respective successors and permitted assigns hereunder. Any assignment or transfer by any party of its rights under this Agreement or with respect to the Escrow Amounts or the Fund shall be void as against the Escrow Agent unless (a) written notice thereof shall be given to the Escrow Agent; and (b) the Escrow Agent shall have consented in writing to such assignment or transfer.

14. Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be determined to be invalid or unenforceable, the remaining provisions of this Agreement or the application of such provision to persons or circumstances other than those to which it is held invalid or unenforceable shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law.

15. Execution in Several Counterparts. This Agreement may be executed in several counterparts or by separate instruments and by facsimile transmission, and all of such counterparts and instruments shall constitute one agreement, binding on all of the parties hereto.

16. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings (written or oral) of the parties in connection therewith.

17. Third Party Beneficiaries. The Investors shall be intended third party beneficiaries of this Agreement to the same extent as if they were parties hereto, and shall be entitled to enforce the provisions hereof.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first above written.

	XXXXXX STREET BANK & TRUST



	By:
		Name: Xxxxxxxx X. Xxxx
		Title: Assistant Vice President




	XXXXXXX CAPITAL, INC.



	By:
		Name: Xxxxxxx X. Xxxxxxx
		Title: President and Chief Executive Officer



	XXXXXXX SECURITIES, LLC



	By:
		Name: Xxxx X. Xxxxxxx
		Title: Principal

EXHIBIT A

ESCROW AGREEMENT INFORMATION SHEET

1.	The Company
	Name:	Xxxxxxx Capital, Inc.
	Address:	0000 XXX Xxxxxxx, Xxxxx 0000
		Xxxxxxxxx Xxxxxxx, XX 00000
	Telephone:	(000) 000-0000
	Attn:	Xxxxxxx X. Xxxxxxx

2.	The Investor Agent
	Name:	Xxxxxxx Securities, LLC
	Address:	0000 XXX Xxxxxxx, Xxxxx 0000
		Xxxxxxxxx Xxxxxxx, XX 00000
	Telephone:	(000) 000-0000
	Attn:	Xxxx X. Xxxxxxx

3.	The Securities
	Description of the Securities to be offered: Common Stock, par value $0.001 per share

5.	Initial Closing Conditions
	Valid subscriptions to purchase at least 100,000 shares must be received before the Escrow Account may be disbursed to the Company . Disbursements shall be made upon receipt of written instructions from the Company and the Investor Agent.

6.	Plan of Distribution of the Securities
	Offering Period: This offering will commence as of the date of the Prospectus and will conclude one year from the date of the Prospectus.
	Extension Period, if any: At discretion of the Company, the Offering Period may elect to extended for an additional six months.

7.	Title of Escrow Account
	Xxxxxx Street Bank & Trust, as escrow agent agent for Xxxxxxx Capital, Inc.

8.	Escrow Agent Fees and Charges
	$1,500.00 (payable at the closing)
	This payment covers all fees related to maintaining the escrow account and disbursing funds

9.	Instructions for wire transfers to the Escrow Account

	If by wire transfer, send according to the following instructions:

INCOMING WIRE INSTRUCTIONS

Xxxxxx Street Bank & Trust

● For all Wires originating Inside of the United States

	♦ Receiving Bank Name:	Xxxxxx Street Bank & Trust

	♦ Receiving Bank ABA#:	000000000

	♦ Receiving Bank Address:	Denver, CO

	♦ Receiving Bank Phone #:	000-000-0000

	♦ Beneficiary’s Name:	Xxxxxx Street Bank & Trust, as escrow agent for Xxxxxxx Capital, Inc.

	♦ Beneficiary’s Address:	0000 XXX Xxxxxxx, Xxxxx 0000
		Xxxxxxxxx Xxxxxxx, XX 00000

	♦ Beneficiary’s Account #:	00000000

● For all Wires originating outside of the United States

	♦ Receiving Bank Name:	Xxxxx Fargo Bank, N.A.

	♦ Receiving Bank ABA#:	000000000

	♦ Receiving Bank City/State:	San Francisco, CA

	♦ Beneficiary:	Xxxxxx Street Bank & Trust

	♦ Beneficiary’s Account #:	4100059286

	♦ *Special Instructions:	For Further Benefit to:

	s Account Name:	Xxxxxx Street Bank & Trust, as escrow agent for Xxxxxxx Capital, Inc.

	s Account Number:	00000000

Document Metadata

Table of Contents

FORM OF ESCROW AGREEMENT ]

Document Metadata