EXHIBIT 5
Proceeds Escrow Agreement
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EXHIBIT 5
PROCEEDS ESCROW AGREEMENT
PROCEEDS ESCROW AGREEMENT ("Agreement") dated as of ________________,
2000, by and between IBF VI - Secured Lending Corporation, a Delaware
corporation (the "Company"), National Securities Corporation, a ______________
corporation (the "Underwriter"), and Continental Stock Transfer & Trust
Company ("Escrow Agent").
Recitals
WHEREAS, the Company intends to engage in a public offering of
certain of its securities (the "Offering"), which Offering contemplates
minimum aggregate offering proceeds of $500,000 and maximum aggregate offering
proceeds of $50,000,000;
WHEREAS, there will be deposited into an escrow account with Escrow
Agent from time to time funds from prospective investors who wish to subscribe
for securities offered in connection with the Offering ("Subscribers"), which
funds will be held in escrow and distributed in accordance with the terms
hereof; and
WHEREAS, the Escrow Agent is willing to act as an escrow agent in
respect of the Escrow Funds (as hereinafter defined) upon the terms and
conditions set forth herein;
Agreement
NOW, THEREFORE, for good and valuable considerations, the receipt and
adequacy of which are hereby acknowledged by each of the parties hereto, the
parties hereto hereby agree as follows:
1. Appointment of Escrow Agent. The Company hereby appoints the
Escrow Agent as escrow agent in accordance with the terms and conditions set
forth herein, and the Escrow Agent hereby accepts such appointment.
2. Delivery of Escrow Funds.
(a) The Underwriter and all selected dealers participating in the
Offering shall deliver to the Escrow Agent checks or wire transfers made
payable to the order of "CSTTC Escrow Agent for IBF VI - Secured Lending
Corporation" representing subscriptions for the securities of the Company,
together with the Subscriber's mailing address and social security number or
tax identification number (if the aforesaid information is not provided, the
check will be returned or the amount of the wire transfer refunded), no later
than noon of the next business day following receipt. The funds delivered to
the Escrow Agent shall be deposited by the Escrow Agent into an interest
bearing account at Continental Stock Transfer & Trust Company, 2 Broadway, New
York, NY 10004, entitled CSTTC, Escrow Account for IBF VI - Secured Lending
Corporation (the "Escrow Account") and shall be held and distributed by the
Escrow Agent in accordance with the terms hereof. The collected funds
deposited into the Escrow Account are referred to herein as the "Escrow
Funds." The Escrow Agent shall acknowledge receipt of all Escrow Funds by
notifying the Company of deposits into the Escrow Account. The Escrow Agent
shall give such notice, in substantially the form attached hereto as Exhibit
A, via facsimile on the next business day following the business day on which
the Escrow Funds are deposited into the Escrow Account.
(b) The Escrow Agent shall have no duty or responsibility to enforce
the collection or demand payment of any funds deposited into the Escrow
Account. If, for any reason, any check deposited into the Escrow Account shall
be returned unpaid to the Escrow Agent, the sole duty of the Escrow Agent
shall be to return the check to the Underwriter.
3. Release of Escrow Funds. The Escrow Funds shall be paid by the
Escrow Agent in accordance with the following:
(a) Provided that the Escrow Funds total at least $500,000 at or
before 2:00 P.M., New York City time, on ________________, 2000, or on any
date prior thereto, the Escrow Funds (or any portion thereof) shall be paid to
the Company or as otherwise instructed by the Company and the Underwriter ,
within one (1) business day after the Escrow Agent receives a written release
notice in substantially the form of Exhibit B attached hereto (a "Release
Notice") signed by an authorized person of the Company, and thereafter, the
Escrow Account will remain open for the purpose of depositing therein the
subscription prices for additional securities sold by the Company in the
Offering, which additional Escrow Funds shall be paid to the Company and
Underwriter (or as otherwise instructed by the Company and Underwriter) upon
receipt by the Escrow Agent of a Release Notice as described above.
(b) If the Escrow Agent has not received a Release Notice from the
Company at or before 2:00 P.M., New York City time, on _________________,
2000, and the Escrow Funds do not total at least $500,000 at such time and
date, then the Escrow Funds shall be returned to Subscribers, with interest.
In the event that at any time the Escrow Agent shall receive from the
Company written instructions signed by an individual who is identified on
Exhibit C attached hereto as a person authorized to act on behalf of the
Company, requesting the Escrow Agent to refund to an individual or entity the
amount of a collected check or other funds received by the Escrow Agent from
said individual or entity and deposited into the Escrow Account, the Escrow
Agent shall comply with such instructions provided that said funds are in the
Escrow Account and have not been paid by the Escrow Agent.
4. Acceptance by Escrow Agent. The Escrow Agent hereby accepts and
agrees to perform its obligations hereunder, provided that:
(a) The Escrow Agent may act in reliance upon any signature believed
by it to be genuine, and may assume that any person who has been designated by
the Company to give any written instructions, notice or receipt, or make any
statements in connection with the provisions hereof has been duly authorized
to do so. The Escrow Agent shall have no duty to make inquiry as to the
genuineness, accuracy or validity of any statements or instructions or any
signatures on statements or instructions. The names and true signatures of
each individual authorized to act on behalf of the Company are set forth in
Exhibit C attached hereto.
(b) The Escrow Agent may act relative hereto in reliance upon advice
of counsel in reference to any matter connected herewith. The Escrow Agent
shall not be liable for any mistake of fact or error of judgment or law, or
for any acts or omissions of any kind, unless caused by its willful misconduct
or gross negligence.
(c) The Company agrees to indemnify and hold the Escrow Agent
harmless from and against any and all claims, losses, costs, liabilities,
damages, suits, demands, judgments or expenses (including but not limited to
reasonable attorneys' fees) claimed against or incurred by Escrow Agent
arising out of or related, directly or indirectly, to this Agreement.
(d) In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder, the Escrow Agent shall be entitled to refrain from
taking any action other than to keep safely the Escrow Funds until it shall be
directed otherwise by a court of competent jurisdiction.
(e) The Escrow Agent shall have no duty, responsibility or obligation
to interpret or enforce the terms of any agreement other than Escrow Agent's
obligations hereunder, and the Escrow Agent shall not be required to make a
request that any monies be delivered to the Escrow Account, it being agreed
that the sole duties and responsibilities of the Escrow Agent shall be (i) to
accept wire transfers, checks or other instruments for the payment of money
delivered to the Escrow Agent for the Escrow Account and deposit the Escrow
Funds into the Escrow Account, and (ii) to disburse or refrain from disbursing
the Escrow Funds as stated above, provided that the funds received by the
Escrow Agent have been collected and are available for withdrawal.
5. Fees. The Escrow Agent shall be entitled to receive from the
Company a total of $_____ in fees for the services to be rendered by the
Escrow Agent hereunder, and the Escrow Agent hereby acknowledges receipt of
such amount from the Company as payment in full of such fees.
6. Resignation. The Escrow Agent may resign at any time by giving 30
days' notice of such resignation to the Company. Upon providing such notice,
the Escrow Agent shall have no further obligations hereunder except to hold
the Escrow Funds which it has received as of the date on which it provided the
notice of resignation as depositary. In such event, the Escrow Agent shall not
take any action until the Company and Underwriter have designated a banking
corporation, trust company, attorney or other person as successor. Upon
receipt of such written instructions signed by the Company and Underwriter,
the Escrow Agent shall promptly deliver the Escrow Funds to such successor and
shall thereafter have no further obligations hereunder. If such instructions
are not received within 30 days following the effective date of such
resignation, then the Escrow Agent may deposit the Escrow Funds and any other
amounts held by it pursuant to this Agreement with a clerk of a court of
competent jurisdiction pending the appointment of a successor. In either case
provided for in this Section 6, the Escrow Agent shall be relieved from all
liability thereafter arising with respect to the Escrow Funds.
7. Termination. The Company may terminate the appointment of the
Escrow Agent hereunder upon written notice signed by an individual on behalf
of the Company, each of whose name and signature are included in Exhibit C
attached hereto, specifying the date upon which such termination shall take
effect. In the event of such termination, the Company and Underwriter shall,
within 30 days of such notice, appoint a successor escrow agent and the Escrow
Agent shall, upon receipt of written instructions signed by the Company and
Underwriter, turn over to such successor escrow agent all of the Escrow Funds.
Upon receipt of the Escrow Funds, the successor escrow agent shall become the
Escrow Agent hereunder and shall be bound by all of the provisions hereof and
the Escrow Agent shall be relieved of all further obligations and released
from all liability thereafter arising with respect to the Escrow Funds.
8. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder, shall be in writing and shall be
deemed to have been duly given when delivered personally, on the next business
day after delivery to a recognized overnight courier or mailed first class
(postage prepaid) or when sent by facsimile to the parties (which facsimile
copy shall be followed, in the case of notices or other communications sent to
the Escrow Agent, by delivery of the original) at the following addresses (or
to such other address as a party may have specified by notice given to the
other parties pursuant to this provision).
if to the Company:
IBF VI - Secured Lending Corporation
1733 Connecticut Avenue, NW
Washington, DC 20009
Attention: Simon A. Hershon, President
Fax: (202) 588-5088
with a copy to:
Brown & Wood LLP
1666 K Street, N.W.
Washington, D.C. 20006
Attention: H. John Steele
Fax: (202) 533-1460
if to the Underwriter:
National Securities Corporation
875 N. Michigan Ave., Suite 1560
Chicago, Illinois 60611
Attn: Steven A. Rothstein, Chairman Fax: ( ) _____________
with a copy to:
D'Ancona & Pflaum LLC
111 East Wacker Drive, Suite 2800
Chicago, IL 60601
Attention: Arthur Don, Esq.
or Steve Curtis, Esq.
Fax: (312) 602-3000
if to the Escrow Agent:
Continental Stock Transfer & Trust Company
2 Broadway
New York, NY 10004
Attention: Corporate Trust Department
Fax: (212) 509-4000
9. General.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements
made and to be entirely performed within such state.
(b) This Agreement sets forth the entire agreement and understanding
of the parties in respect to the matters contained herein or covered hereby
and supersedes all prior agreements, arrangements and understandings related
thereto.
(c) All of the terms and conditions of this Agreement shall be
binding upon, and inure to the benefit of and be enforceable by, the parties
hereto.
(d) This Agreement may be amended, modified, superseded or cancelled,
and any of the terms or conditions hereof may be waived, only by a written
instruction executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect its
right at a later time to enforce the same. No waiver of any party of any
condition, or of the breach of any term contained in this Agreement, whether
by conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or
a waiver of any other condition or of the breach of any other term of this
Agreement. No party may assign any rights, duties or obligations hereunder
unless all other parties have given their prior written consent.
(e) If any provision included in this Agreement proves to be invalid
or unenforceable, it shall not affect the validity of the remaining
provisions.
(f) This Agreement may be executed in several counterparts or by
separate instruments and all of such counterparts and instruments shall
constitute one agreement, binding on all of the parties hereto.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first set forth above.
IBF VI - SECURED LENDING CORPORATION
By____________________________________
Duly Authorized Officer
NATIONAL SECURITIES CORPORATION
By____________________________________
Duly Authorized Officer
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By____________________________________
Duly Authorized Officer
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EXHIBIT A
Forms of Receipt of Funds by Escrow Agent
[Date]
IBF VI - Secured Lending Corporation
1733 Connecticut Avenue, NW
Washington, DC 20009
Attention: Simon A. Hershon, President
Dear Sirs:
Pursuant to Section 2(a) of the Escrow Agreement dated as of ___________,
2000, we confirm receipt of the amount of $_____________________ today for
deposit into the Escrow Fund.
Very truly yours,
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EXHIBIT B
Form of Release Notice
Continental Stock Transfer & Trust Company
2 Broadway
New York, NY 10004
Attention: Corporate Trust Department
Dear Sirs:
The undersigned hereby authorize and instruct Continental Stock Transfer &
Trust Company, as escrow agent, to release $__________________ of Escrow Funds
from the Escrow Account and to deliver such funds as follows:
[Insert Delivery Instructions]
Executed as of this ____ day of _______________, 2000.
IBF VI - SECURED LENDING CORPORATION
By____________________________________
Duly Authorized Officer
NATIONAL SECURITIES CORPORATION
By____________________________________
Duly Authorized Officer
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EXHIBIT C
Authorized Personnel
The Escrow Agent is authorized to accept instructions and notices
signed or believed by the Escrow Agent to be signed by any one of the
following, each of whom is authorized to act on behalf of the Company:
On Behalf of IBF VI - SECURED LENDING CORPORATION:
Name Title Signature
On Behalf of NATIONAL SECURITIES CORPORATION
Name Title Signature
