PROCEEDS ESCROW AGREEMENT
Agreement entered on the day of 1999 by
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and among THE 'BILTMORE GROUP OF LOUISIANA, L.L.C., a Louisiana limited
liability company, ("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 $9,900,000 aggregate principal amount of its First Mortgage
Bonds (collectively, the "Bonds") to be issued in five series (1999-I,
1999-II, 1999-III, 1999-IV, and 1999-V) 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 four
separate particular assisted living center projects: one in Minden, Louisiana,
one in Bastrop, Louisiana, one in Farmerville, Louisiana,and one in
Natchitoches, Louisiana; and to purchase one assited living center in Sedona,
Arizona; all 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 1999-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 $400,000.00, or more, or (ii) the date of October 1, 1999, at
which time the Series 1999-1 escrow account will terminate;
(b) Series 1999-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 November 1, 1999, at
which time the Series 1999-II escrow account will terminate;
(c) Series 1999-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 $400,000.00, or more, or (ii) the date of November 1, 1999, at
which time the Series 1999-III escrow account will terminate.
(d) Series 1999-IV 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 $400,000.00, or more, or (ii) the date of December 1, 1999, at
which time the Series 1999-IV escrow account will terminate.
(e) Series 1999-V Bonds:
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(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 $400,000.00, or more, or (ii) the date of January 1, 2000, at
which time the Series 1999-V escrow account will terminate.
Notwithstanding the above, the proceeds from the sale of each series
of bonds shall be held by the Escrow Agent until the Escrow Agent
shall have received a written consent to release such proceeds from
the Kansas Securities Commissioner, pursuant to K.A.R. 81-7-1(e).
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 and the required consent of
the Kansas Securities Commissioner has been received 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 or the required consent of the
Kansas Securities Commissioner has not been received within such period. In
the event of the return of the escrow to the subscribers, then the subscribers
shall be paid interest as provided in paragraph 5 hereof.
5. The Issuer agrees that in the event the minimum amount of the
applicable series of Bonds have not been sold or the required consent of the
Kansas Securities Commissioner has not been received within the time 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 hereinafter set forth
through the escrow termination date at the rate attributable to the
applicable series of Bonds subscribed:
(a)Series 1999-I Bonds: April 1, 1999;
(b)Series 1999-II Bonds: Date of receipt by MMR of the payment of the
purchase price for the bonds;
(c)Series 1999-III Bonds: May 1, 1999;
(d)Series 1999-IV Bonds: June 1, 1999; and
(e)Series 1999-V Bonds: July 1, 1999.
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
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all funds relative to the series of Bonds for which the registration
has been revoked to the respective subscribers, in accordance with the
above set forth provisions.
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 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
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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.
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: THE BILTMORE GROUP OF
LOUISIANA, L.L.C.
By:
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Managing Member
Date:
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ESCROW AGENT: COLONIAL TRUST COMPANY
Phoenix, Arizona
By:
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Susan D. Carlisle,
Vice-President
Date:
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escroagr.ctC
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