PROCEEDS ESCROW AGREEMENT
Agreement entered on the day of ,19 by and among SENIOR
RETIREMENT COMMUNITIES, INC.,("Issuer"), MMR INVESTMENT BANKERS, INC.,
("Dealer"), and Colonial Trust Company, an Arizona Trust Company and bank,
as defined by Section 3 (a) (6) of the Securities and Exchange Act of 1934,
(the "Escrow Agent").
WHEREAS, with the assistance of Dealer, the Issuer proposes to offer
and sell up to $9,000,000 aggregate principal amount of its First Mortgage
Bonds (collectively, the "Bonds") to be issued in three series (1998-I,
1998-II and 1998-III) and to be issued pursuant to a Trust Indenture between
the Issuer and Colonial Trust Company Trustee (the "Trustee").
WHEREAS, the proceeds from each series are to be used to construct a
separate particular project: one in Rutson, Louisiana, one in Bossier City,
Louisiana and one in Shreveport, Louisiana, as more particularly set forth
and described in the Offering Circular applicable to the Bonds; and
WHEREAS, each issue of a series of the Bonds has its own escrow minimum
requirement and the issue and sale of each series of the Bonds is not
contingent on the issue and sale of any other series of the Bonds;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The Escrow Agent agrees to act as escrow agent in connection with
the offering and sale of each series of Bonds and, as such, to establish
appropriate accounts and to receive the proceeds from the sale of the Bonds
for deposit in the applicable account until the earlier of the termination of
this Agreement or the termination of the offering and sale of the applicable
series of Bonds (the "Applicable Termination Date").
2. Checks or other items for the payment of all or a part of the
purchase price of Bonds (all Such items together with all proceeds thereof,
the "Escrowed Property") shall be payable to Escrow Agent, or endorsed by the
Dealer or Issuer to Colonial Trust company and delivered daily to Escrow
Agent. The Escrow Agent will credit the proceeds to the applicable escrow
cash account (such accounts being collectively referred to herein as the
"Escrow Account") to be held by it under the terms of this Agreement subject
to Rule 15c2-4 under the Securities Act of 1934. All subscribers' checks or
other items for the payment of the purchase price of Bonds shall be
transmitted by Dealer to the Escrow Agent by noon of the next business day
upon receipt by Dealer.
The Escrow Agent shall invest such collected funds deposited in the
Escrow Account in short term investments to the extent permitted by the
Arizona Department of Banking in accordance
with the Arizona Revised Statutes, provided however, that any such funds held
subject to any minimum escrow contingency shall be invested subject to rule
l5c2-4. The Escrow Agent shall in no event be liable for any loss resulting
from any change in interest rates applicable to funds so invested.
Interest on funds invested pursuant to this Section shall accrue
from the date of investment of such funds until such funds are released from
escrow pursuant to paragraph 4.
3. The Escrowed Property, together with all interest earned thereon,
shall be held by the Escrow Agent until the earlier of the following dates as
applicable to each of the series of the Bonds:
(a) Series 1998-I Bonds:
(i) the date that the Escrow Agent has received proceeds from the
sale of such series of the Bonds in the aggregate principal amount
of $600,000.00, or more, or (ii) the date of October 1, 1998, at
which time the Series 1998-I escrow account will terminate;
(b) Series 1998-II Bonds:
(i) the date that the Escrow Agent has received proceeds from the
sale of such series of the Bonds in the aggregate principal amount
of $600,000.00, or more, or (ii) the date of January 1, 1999, at
which time the Series 1998-II escrow account will terminate;
(c) Series 1998-III Bonds:
(i) the date that the Escrow Agent has received proceeds from the
sale of such series of the Bonds in the aggregate principal amount
of $300,000.00, or more, or (ii) the date of January 1, 1999, at
which time the Series 1998-III escrow account will terminate.
4. Upon termination of the escrow, the Escrow Agent shall release the
applicable Escrowed Property, together with all interest earned thereon to
be distributed to either (a) the Issuer, or such other party or parties, as
required to carry out the purpose of the Bond offering if the minimum amount
of the applicable series of Bonds have been sold within the required time
period described above, or (b) the subscribers if the minimum amount of the
applicable series of Bonds have not been sold within such period.
5. The Issuer agrees that in the event the minimum amount of the
applicable series of bonds have not been sold within the time
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period described above, therefore necessitating the distribution by the
Escrow Agent of the applicable Escrow Property and the interest earned
thereon to the subscribers, Issuer shall promptly pay to the Escrow Agent
such sum of money as shall be necessary, if any, when added to the amount of
the applicable Escrow Property and interest earned thereon to pay to the
subscribers of the applicable series of Bonds the principal amount of such
subscriptions together with the interest from the date of authentication
through the escrow termination date at the rate attributable to the
applicable series of Bonds subscribed.
6. If at any time prior to the completion of this escrow said Escrow
Agent is advised by the appropriate securities or state agency that the
registration to sell said Bonds or any series thereof has been revoked, said
Escrow Agent shall thereupon return all funds relative to the series of Bonds
for which the registration has been revoked to the respective subscribers.
7. Escrow Agent shall hold the Escrowed Property in trust, commingled
with similar funds of other issuers, but shall maintain detailed records to
reflect the share thereof attributable to each Issuer. Escrow Agent shall
furnish periodic statements to Issuer reflecting all receipts and
disbursements from the Escrow Account.
8. The Escrow Agent's and Dealer's obligations and duties in
connections herewith are confined to those specifically enumerated in this
Agreement. The Escrow Agent and Dealer shall not be in any manner liable or
responsible for the sufficiency, correctness, genuineness or validity of any
instruments received by or deposited with them or with reference to the form
of execution thereof, or the identity, authority or rights of any person
executing, delivering, or depositing same, and neither the Escrow Agent nor
the Dealer shall be liable for any loss that may occur by reason of forgery,
false representation or the exercise of their discretion in any particular
manner or for any other reason, except for their own gross negligence or
willful misconduct.
9. Escrow Agent shall receive compensation for its services as set
forth in the separate schedule of fees as made a part hereof by reference.
10. The Escrow Agent may act pursuant to the written advice of counsel
with respect to any matter relating to this Escrow Agreement and shall not be
liable for any action taken or omitted in accordance with such advice.
11. The Escrow Agent (and any other successor escrow agent) may at any
time resign as such by delivering all of the Escrowed Property to the
successor escrow agent jointly designated by the other parties hereto in
writing, or to any court of competent jurisdiction, whereupon the Escrow
Agent shall be discharged of and from any and all further obligations arising
in connection with
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this Escrow Agreement. The resignation of the Escrow Agent will take effect
on the earlier of (a) the appointment of a successor (including a court of
competent jurisdiction), or (b) the day which is thirty (30) days after the
date of delivery of its written notice of resignation to the other parties
hereto. If at that time the Escrow Agent has not received a designation of a
successor escrow agent, the Escrow Agent's sole responsibility after that
time shall be to safekeep the Escrowed Property until receipt of a
designation of successor escrow agent or a written disposition instruction by
the issuer and Dealer or a final order of a court of competent jurisdiction.
12. If any controversy arises between the parties hereto or with any
third person, the Escrow Agent shall not be required to determine the same or
to take any action but may await the settlement of any such controversy by
final appropriate legal proceeding, or otherwise as the Escrow Agent may
require, or the Escrow Agent may, in its discretion, institute such
appropriate interpleader or other proceedings in connection therewith as it
may deem proper, notwithstanding anything in this Agreement to the contrary.
In any such event, the Escrow Agent shall not be liable for interest or
damages to the issuer or subscribers. In the event Escrow Agent should
institute, or be named as a party in, any legal proceedings to determine the
lawful owner of the Escrowed Property, Escrow Agent shall be entitled to
recover from the contending parties to said legal proceedings, reasonable
attorney's fees and expenses which shall be incurred by Escrow Agent in said
proceedings.
13. This Escrow Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and assigns,
heirs, administrators, and representatives and shall not be enforceable by or
inure to the benefit of any third party except as provided in Section 10 with
respect to a resignation by the Escrow Agent. No party may assign any of its
rights or obligations under this Escrow Agreement without the written consent
of the other parties. This Escrow Agreement shall be construed in accordance
with and governed by the laws of the State of Arizona without regard to
conflict of law principals.
14. This Escrow Agreement may only be modified in writing signed by all
of the parties hereto, and no waiver hereunder shall be effective unless in
writing signed by the party to be charged.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the day and year first above written.
DEALER: MMR INVESTMENT BANKERS, INC.
BY:
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Date:
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ISSUER: SENIOR RETIREMENT COMMUNITIES,
INC.
By:
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President
By:
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Secretary
Date:
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ESCROW AGENT: COLONIAL TRUST COMPANY
Phoenix, Arizona
By:
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Date:
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