Exhibit 4.4
FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is entered into as of __________,
2000, by and among AMERICAN EQUITIES INCOME FUND II, INC., a Delaware
corporation (the "Company"), STRATEGIC ASSETS INC. (the "Placement Agent"), and
REPUBLIC NATIONAL BANK OF NEW YORK (the "Escrow Agent").
W I T N E S S E T H
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 $9,950,000; and
WHEREAS, there will be deposited into an escrow account with the 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;
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 Placement Agent and the Company
hereby appoint 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 Placement Agent shall deliver to the Escrow Agent
checks or wire transfers made payable to the order of "Republic National Bank of
New York, Escrow Agent for American Equities Income Fund II, Inc." 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). The funds
delivered to the Escrow Agent shall be deposited by the Escrow Agent into a
non-interest bearing account at Republic National Bank of New York entitled
"Republic National Bank of New York, Escrow Agent for American Equities Income
Fund II, Inc." (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 Subscriber.
3. Investment of the Escrow Funds. As the Escrow Funds are being held
in a non-interest bearing account, there will be no investment of the Escrow
Funds.
4. 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 as
otherwise instructed by the Company and the Placement Agent, 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 authorized persons of the Placement Agent and 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 as instructed by the
Placement Agent and the Company upon receipt by the Escrow Agent of a Release
Notice as described above; or
(b) if the Escrow Agent has not received a Release Notice from
the Company and the Placement Agent 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
without interest thereon or deduction therefrom.
In the event that at any time the Escrow Agent shall receive from the Company
and the Placement Agent written instructions signed by individuals who are
identified on Exhibit C attached hereto as persons authorized to act on behalf
of the Company and the Placement Agent, respectively, 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.
5. 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 Placement Agent and 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
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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
Placement Agent and 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 and the Placement Agent agree 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 or a writing signed
by the Company and the Placement Agent.
(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.
6. Fees. The Escrow Agent shall be entitled to receive from the Company
a total of $1,500 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.
7. 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 has designated a banking corporation, trust
Company, attorney or other person as successor. Upon receipt of such written
instructions signed by the Company, 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
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pending the appointment of a successor. In either case provided for in this
Section 7, the Escrow Agent shall be relieved from all liability thereafter
arising with respect to the Escrow Funds.
8. Termination. The Placement Agent may terminate the appointment of
the Escrow Agent hereunder upon written notice signed by an individual on behalf
of the Placement Agent, 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 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, 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.
9. 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 Placement Agent: Strategic Assets Inc.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Phone: (000) 000-0000
If to the Company to: American Equities Income Fund II, Inc.
00 Xxxx Xxxxx 0, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Phone: (000) 000-0000
with a copy to: Xxxxxxx & Xxxxxxxxxx, LLP
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Phone: (000) 000-0000
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If to the Escrow Agent, to: Republic National Bank of New York
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
First Vice President
Phone: (000) 000-0000
10. 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.
_________________ REPUBLIC NATIONAL BANK
Federal I.D. # OF NEW YORK, as Escrow Agent
By:______________________________________
Xxxxxxx Xxxxxxx, First Vice-President
By:______________________________________
Xxxxxx Xxxxx, Assistant Vice President
STRATEGIC ASSETS INC.
By:___________________________
Xxxxxxx X. Xxxxx, President
AMERICAN EQUITIES INCOME
FUND II, INC.
By:___________________________
Xxxxx X. Xxxxxxxx, CEO
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EXHIBIT A
Forms of Receipt of Funds by Escrow Agent
[Republic National Bank of New York Letterhead]
[Date]
Strategic Assets Inc.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Dear Sirs:
Pursuant to Section 2(a) of the Escrow Agreement dated __________, ____, we
confirm receipt of the amount of $_______ today for deposit into the Escrow Fund
of American Equities Income Fund II, Inc.
Very truly yours,
__________________
Name:
Title:
EXHIBIT B
Release Notice
Xx. Xxxxxxx Xxxxxxx
Republic National Bank of New York
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxx:
The undersigned hereby authorize and instruct Republic National Bank of
New York, as escrow agent, to release [$_______] of Escrow Funds from the Escrow
Account and to deliver such funds as follows:
[Insert Delivery Instructions]
IN WITNESS WHEREOF, this release has been executed on __________, 2000.
STRATEGIC ASSETS INC.
By:_____________________________
Its:____________________________
AMERICAN EQUITIES INCOME FUND II, INC.
By:______________________________
Its:_____________________________
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 each of the following, each of whom
is authorized to act on behalf of the Company and the Placement Agent,
respectively:
THE PLACEMENT AGENT:
Name Title Signature
---- ----- ---------
Xxxxxxx X. Xxxxx President _________________
Xxxxxxx Xxxxxx Director of Operations _________________
THE COMPANY:
Name Title Signature
---- ----- ---------
Xxxxx X. Xxxxxxxx Chief Executive Officer _________________
M. Xxxxx Xxxxxxxx Chief Financial Officer _________________
