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Exhibit No. 5
IBF VI - Participating Income Corporation
Form SB-2, Amend. No. 2
File No. 333-71091
PROCEEDS ESCROW AGREEMENT
PROCEEDS ESCROW AGREEMENT ("Agreement") dated as of
________________, 2000, by and between IBF VI - Participating
Income 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 Account"
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, ▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, entitled CSTTC, Escrow
Account for IBF VI - Participating Income Fund (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.
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(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.
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(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).
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if to the Company:
IBF VI - Participating Income Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇.▇.
620 Judge Building
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Underwriter:
National Securities Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman Fax: ( )______________
with a copy to:
▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Arthur Don, Esq.
or ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Escrow Agent:
Continental Stock Transfer & Trust Company
▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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.
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(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.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first set forth above.
IBF VI - PARTICIPATING INCOME 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 - Participating Income Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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
▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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 - PARTICIPATING INCOME 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 - PARTICIPATING INCOME CORPORATION:
Name Title Signature
On Behalf of NATIONAL SECURITIES CORPORATION
Name Title Signature
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