EXHIBIT 9.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "AGREEMENT") is entered into as of the __ day
of ________, 1998, by and among Northern Star Financial, Inc., a Minnesota
corporation (the "COMPANY"), Banc Stock Financial Services, Inc. (the "SALES
AGENT"), and Resource Trust Company (the "ESCROW AGENT").
W I T N E S S E T H:
WHEREAS, the Company has accepted subscriptions for the purchase of 121,000
shares (the "PRIVATE SHARES") of common stock, $1.00 par value (the "COMMON
STOCK") at $10.00 per share pursuant to a private offering;
WHEREAS, the Company proposes to offer and sell up to 329,000 shares of
Common Stock (the "PUBLIC SHARES" and collectively with the Private Shares, the
"SHARES"), to investors at $10.00 per share pursuant to a registered public
offering (the "PUBLIC OFFERING");
WHEREAS, the Sales Agent intends to sell the Public Shares as the Company's
agent on a best efforts, all-or-none basis as to the first 157,000 Public Shares
and on a best efforts basis for the remaining Public Shares; and
WHEREAS, the Company desires to establish an escrow for funds forwarded by
subscribers for the Shares, and the Escrow Agent is willing to serve as Escrow
Agent upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEPOSIT WITH ESCROW AGENT.
(a) The Escrow Agent agrees that it will from time to time accept, in its
capacity as escrow agent, subscription funds for the Shares (the "ESCROWED
FUNDS") received by it from subscribers, the Sales Agent, or the Company when it
has received checks from subscribers. All checks shall be made payable to the
Escrow Agent. If any check does not clear normal banking channels in due
course, the Escrow Agent will promptly notify the Company and the Sales Agent.
Any check which does not clear normal banking channels and is returned by the
drawer's bank to Escrow Agent will be promptly turned over to the Sales Agent,
along with all other subscription documents relating to such check. Any check
received that is made payable to a party other than the Escrow Agent shall be
returned to the Sales Agent for return to the proper party. The Company in its
sole and absolute discretion may reject any subscription for Shares for any
reason and upon such rejection it shall notify and instruct the Escrow Agent in
writing to return the Escrowed Funds by check made payable to the subscriber.
If the Company rejects or cancels any subscription for any reason the Company
will retain any interest earned on the Escrowed Funds, subject to state law, to
help defray organizational costs.
(b) Subscription agreements for the Shares shall be reviewed for accuracy
by the Company or the Sales Agent and, immediately thereafter, the Company or
the Sales Agent shall deliver to the Escrow Agent the following information: (i)
the name and address of the subscriber; (ii) the number of
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Shares subscribed for by such subscriber; (iii) the subscription price paid by
such subscriber; (iv) the subscriber's tax identification number certified by
such subscriber; and (v) a copy of the subscription agreement.
2. INVESTMENT OF ESCROWED FUNDS. Upon collection of each check by the
Escrow Agent, the Escrow Agent shall invest the funds in deposit accounts or
short-term certificates of deposit which are fully insured by the Federal
Deposit Insurance Corporation or another agency of the United States government,
short-term securities issued or fully guaranteed by the United States
government, federal funds, or such other investments as the Escrow Agent, the
Sales Agent, and the Company shall agree. The Company shall provide the Escrow
Agent with instructions from time to time concerning in which of the specific
investment instruments described above the Escrowed Funds shall be invested, and
the Escrow Agent shall adhere to such instructions. Unless and until otherwise
instructed by the Company, the Escrow Agent shall by means of a "sweep" or other
automatic investment program invest the Escrowed Funds in blocks of $10,000 in
federal funds. Interest and other earnings shall start accruing on such funds
as soon as such funds would be deemed to be available for access under
applicable banking laws and pursuant to the Escrow Agent's own banking policies.
3. DISTRIBUTION OF ESCROWED FUNDS. The Escrow Agent shall distribute the
Escrowed Funds in the amounts, at the times, and upon the conditions hereinafter
set forth in this Agreement.
(a) If at any time on or prior to the expiration date of the Public
Offering as described in the prospectus relating to the Public Offering, (the
"CLOSING DATE"), (i) the Escrow Agent has certified to the Company and the Sales
Agent in writing that the Escrow Agent has received at least $2,780,000 in
Escrowed Funds, and (ii) the Escrow Agent has received a certificate signed by
the Company and the Agent stating that all other conditions to the release of
funds as described in the Company's Registration Statement filed with the
Securities and Exchange Commission pertaining to the Public Offering have been
met, then the Escrow Agent shall deliver the Escrowed Funds to the Company to
the extent such Escrowed Funds are collected funds. If any portion of the
Escrowed Funds are not collected funds, then the Escrow Agent shall notify the
Company and the Sales Agent of such facts and shall distribute such funds to the
Company only after such funds become collected funds. For purposes of this
Agreement, "COLLECTED FUNDS" shall mean all funds received by the Escrow Agent
which have cleared normal banking channels. In all events, the Escrow Agent
shall deliver not less than $2,780,000 in collected funds to the Company, except
as provided in Paragraphs 3(b) and 3(c) hereof.
(b) In lieu of collected funds, the organizers of the Company may pay for
subscriptions by assigning to the Company any portion of any obligation of the
Company to repay any advances made by such organizers to the Company to fund
organizational or other expenses and delivering such assignment to the Escrow
Agent to be held hereunder.
(c) If the Escrowed Funds do not, on or prior to the Closing Date, become
deliverable to the Company based on failure to meet the conditions described in
Paragraph 3(a), or if the Company terminates the Public Offering at any time
prior to the Closing Date and delivers written notice to the Escrow Agent of
such termination (the "TERMINATION NOTICE"), the Escrow Agent shall return the
Escrowed Funds which are collected funds as directed in writing by the Company
and the Sales Agent to the respective subscribers in amounts equal to the
subscription amount paid by each of them. All uncleared checks representing
Escrowed Funds which are not collected funds as of the initial Closing Date
shall be collected by the Escrow Agent, and together with all related
subscription documents thereof shall be delivered to the Sales Agent by the
Escrow Agent, unless the Escrow Agent is otherwise
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specifically directed in writing by the Company and the Sales Agent. The
Company is aware and understands that, until it becomes entitled to receive the
Escrowed Funds as described in Paragraph 3(a), it is not entitled to any
Escrowed Funds and that no amounts deposited in the Escrow Account shall become
the property of the Company or any other entity or be subject to the debts of
the Company or any other entity.
4. DISTRIBUTION OF INTEREST. Any interest earned on the Escrowed Funds
shall be retained by the Company, except interest earned on subscriptions from
persons who are residents of states the securities commissions of which require
the payment of interest.
5. FEES OF ESCROW AGENT. The Company shall pay the Escrow Agent a fee of
$1,000.00 for its services hereunder. Such fee is payable upon the release of
the Escrowed Funds, and the Escrow Agent is hereby authorized to deduct such
fees from the Escrowed Funds prior to any release thereof pursuant to Section 3
hereof.
6. LIABILITY OF ESCROW AGENT.
(a) In performing any of its duties under this Agreement, or upon the
claimed failure to perform its duties hereunder, the Escrow Agent shall not be
liable to anyone for any damages, losses or expenses which it may incur as a
result of the Escrow Agent so acting, or failing to act; provided, however, the
Escrow Agent shall be liable for damages arising out of its willful default or
misconduct or its negligence under this Agreement. Accordingly, the Escrow
Agent shall not incur any such liability with respect to (i) any action taken or
omitted to be taken in good faith upon advice of its counsel or counsel for the
Company which is given with respect to any questions relating to the duties and
responsibilities of the Escrow Agent hereunder; or (ii) any action taken or
omitted to be taken in reliance upon any document, including any written notice
or instructions provided for this Escrow Agreement, not only as to its due
execution and to the validity and effectiveness of its provisions but also as to
the truth and accuracy of any information contained therein, if the Escrow Agent
shall in good faith believe such document to be genuine, to have been signed or
presented by a proper person or persons, and to conform with the provisions of
this Agreement.
(b) The Company agrees to indemnify and hold harmless the Escrow Agent
against any and all losses, claims, damages, liabilities and expenses,
including, without limitation, reasonable costs of investigation and counsel
fees and disbursements which may be imposed by the Escrow Agent or incurred by
it in connection with its acceptance of this appointment as Escrow Agent
hereunder or the performance of its duties hereunder, including, without
limitation, any litigation arising from this Escrow Agreement or involving the
subject matter thereof; except, that if the Escrow Agent shall be found guilty
of willful misconduct or negligence under this Agreement, then, in that event,
the Escrow Agent shall bear all such losses, claims, damages and expenses.
(c) The Escrow Agent may resign at any time upon giving 30 days written
notice to the Company and the Sales Agent. If a successor escrow agent is not
appointed by Company within 30 days after notice of resignation, the Escrow
Agent may petition any court of competent jurisdiction to name a successor
escrow agent and the Escrow Agent herein shall be fully relieved of all
liability under this Agreement to any and all parties upon the transfer of the
Escrowed Funds and all related documentation thereto, including appropriate
information to assist the successor escrow agent with the reporting of earnings
of the Escrowed Funds to the appropriate state and federal agencies in
accordance with the applicable state and federal income tax laws, to the
successor escrow agent designated by the Company appointed by the court.
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7. APPOINTMENT OF SUCCESSOR. The Company and the Sales Agent may, upon
the delivery of 30 days written notice appointing a successor escrow agent to
the Escrow Agent, terminate the services of the Escrow Agent hereunder. In the
event of such termination, the Escrow Agent shall immediately deliver to the
successor escrow agent selected by the Company all documentation and Escrowed
Funds including interest earnings thereon in its possession, less any fees and
expenses due to the Escrow Agent or required to be paid by the Escrow Agent to a
third party pursuant to this Agreement.
8. NOTICE. All notices, requests, demands and other communications or
deliveries required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given three days after having been deposited
for mailing if sent by registered mail, or certified mail return receipt
requested, or delivery by courier, to the respective addresses set forth below:
IF TO THE SUBSCRIBERS FOR SHARES: To their respective addresses as specified in
their Subscription Agreements.
IF TO THE COMPANY:
Northern Star Financial, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
WITH A COPY TO:
Xxxxxxxxxx & Xxxxx, P.A.
1100 International Centre
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
IF TO THE ESCROW AGENT:
Resource Trust Company
000 Xxxxxxxxxxxxx Xxxxxx
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxx
IF TO THE SALES AGENT:
Banc Stock Financial Services, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxx
WITH A COPY TO:
Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
9. REPRESENTATIONS OF THE COMPANY. The Company hereby acknowledges that
the status of the Escrow Agent with respect to the offering of the Shares is
that of agent only for the
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limited purposes herein set forth, and hereby agrees it will not represent or
imply that the Escrow Agent, by serving as the Escrow Agent hereunder or
otherwise, has investigated the desirability or advisability in an investment in
the Shares, or has approved, endorsed or passed upon the merits of the Shares,
nor shall the Company use the name of the Escrow Agent in any manner whatsoever
in connection with the offer or sale of the Shares, other than by acknowledgment
that it has agreed to serve as Escrow Agent for the limited purposes herein set
forth.
10. GENERAL.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Minnesota without regard to its
conflict of laws provisions.
(b) The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
(c) This Agreement sets forth the entire agreement and understanding of the
parties with regard to this escrow transaction and supersedes all prior
agreements, arrangements and understandings relating to the subject matter
hereof.
(d) This Agreement may be amended, modified, superseded or canceled, and
any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The failure of any part at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver in any one or more instances by
any part of any condition, or of the breach of any term contained in this
Agreement, whether by conduct or otherwise, 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 terms of this Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of the parties hereto and
their respective administrators, successors and assigns. The Escrow Agent shall
be bound only by the terms of this Escrow Agreement and shall not be bound by or
incur any liability with respect to any other agreement or understanding between
the parties except as herein expressly provided. The Escrow Agent shall not
have any duties hereunder except those specifically set forth herein.
(g) No interest in any part to this Agreement shall be assignable in the
absence of a written agreement by and between all the parties to this Agreement,
executed with the same formalities as this original Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as the
date first written above.
COMPANY: ESCROW AGENT:
NORTHERN STAR FINANCIAL, INC. RESOURCE TRUST COMPANY
By:_______________________________ By_______________________________
Name: Xxxxxx Xxxxxxxxxx Name:
Title: Chief Executive Officer Title:
and President
SALES AGENT:
BANC STOCK FINANCIAL SERVICES, INC.
By_________________________________
Name:
Title:
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