ESCROW AGREEMENT
Escrow Agreement ("Agreement") entered into as of
, 1999, by and among World Monitor Trust II, a business
trust organized under Chapter 38 of Title 12 of the Delaware
Code (the "Delaware Act") (the "Trust"), Prudential Securities
Futures Management Inc., a Delaware corporation (the
"Managing Owner"), The Chase Manhattan Bank, a New York
banking corporation (the "Escrow Agent"), and Prudential
Securities Incorporated, a Delaware corporation (the
"Placement Agent").
W I T N E S S E T H:
WHEREAS, the Trust intends to offer Interests, as defined
below, in the various Series of the Trust; and
WHEREAS, the Escrow Agent has consented to act as escrow
agent for the Trust pursuant to the conditions and
requirements hereinafter set forth.
NOW, THEREFORE, in consideration of the provisions
hereinafter set forth, the parties agree as follows:
Article 1.
DEFINITIONS
Section 1.01 As used in this Agreement, the following terms shall have the
following meanings unless the context otherwise requires:
"Continuous Offering Period" means the period immediately
following the Initial Offering Period for that Series and
continuing until the offering is terminated or all of the Interests
for that Series have been sold.
"Initial Offering Period" means the period commencing with
the initial effective date of the Registration Statement for that
Series and terminating no later than the 120th day following
such date.
"Interests" means the beneficial interest of each interestholder
in the profits, losses, distributions, capital and assets of each
separate Series in the Trust. Interests need not be represented
by certificates.
"Limited Owner" means any person or entity who becomes a
holder of Interests and who is listed as such on the books and
records of the Trust and may include the Managing Owner
with respect to the Interests purchased by it.
"Net Asset Value" (for any Series) means the total assets in
the Trust Estate for a Series including, but not limited to, all
cash and cash equivalents of a Series (valued at cost plus
accrued interest and amortization of original issue discount)
less the total liabilities of that Series, each determined on the
basis of generally accepted accounting principals in the U.S.
consistently applied under the accrual method of accounting
("GAAP").
"Prospectus" means the final prospectus and disclosure
document of the Trust, constituting a part of the Registration
Statement for each Series of Interests, as filed with the
Securities and Exchange Commission and declared effective
thereby, as the same may at any time and from time to time be
amended or supplemented after the effective date of the
Registration Statement.
"Registration Statement" means the registration statement on
Form S-1, as amended, filed by the Trust with the Securities
and Exchange Commission for each Series pursuant to which
the Trust registered the Interests for each Series, as the same
may at any time and from time to time be further amended or
supplemented.
"Series" means an identified group of Interests which has a
common investment objective, whose trading decisions are
made by a specified trading advisor and which share the same
assets, liabilities, profits and losses to the exclusion of any
other Interests.
"Subscriber" means an individual (or entity) who subscribes
for an Interest or Interests in any Series or in any combination
of the Series.
"Trust Estate" means any cash, commodity futures, forward
and option contracts, all funds on deposit in the Trust's
accounts for a Series and any other property held by a Series
of the Trust, and all proceeds therefrom, including any rights
of a Series of the Trust pursuant to any agreements to which
the Trust is a party.
Article 2.
APPOINTMENT OF ESCROW AGENT
Section 2.01 The parties 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.
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Article 3.
REPRESENTATIONS AND WARRANTIES
OF THE TRUST
Section 3.01 The Managing Owner, individually and on behalf of the Trust,
represents and warrants to the Escrow Agent and agrees with
the Escrow Agent for the benefit of the Escrow Agent that the
Trust is and will be on the Initial Closing Date for each Series
(as defined below in Section 5.01 and as such date will be
scheduled by the Managing Owner and the Placement Agent) a
business trust duly organized under the laws of the State of
Delaware with the power and authority to conduct its
business. The Managing Owner hereby further represents and
warrants, individually and on behalf of the Trust, that this
Agreement has been duly authorized, executed and delivered
on its behalf and constitutes the legal, valid and binding
obligation of the Managing Owner and the Trust.
Article 4.
TRANSMITTAL AND COLLECTION
Section 4.01 The Placement Agent shall deposit all the proceeds of
subscriptions from the sale of each Series (the "Proceeds")
during the Initial Offering Period for that Series into the
Escrow Account described in Section 6.01 for that Series. The
Proceeds shall be transferred to the Escrow Account by direct
transfer of immediately available funds from each Subscriber's
account with the Placement Agent, which Proceeds must be in
the Subscriber's account at the time of subscription. The
Placement Agent will provide the Escrow Agent with a
memorandum of transmittal showing the name, address and
social security number or tax identification number of each
Subscriber, along with the number of Interests in that Series
purchased, and the amount of payment being made to the
Escrow Agent. The Placement Agent will also advise the
Escrow Agent that the Placement Agent has on file a
certification from each Subscriber in compliance with the
Interest and Dividend Tax Compliance Act of 1983.
Article 5.
PROCEDURE FOR DISPOSITION OF PROCEEDS
Section 5.01
(a) As soon as practical prior to the closing date with respect to
the initial offering of a Series ("Initial Closing Date"), the
Managing Owner shall notify the Escrow Agent of (i) the
effective date of the Registration Statements and (ii) that
portion of the Proceeds in such Series' Account which
represents subscriptions to be accepted by the Managing
Owner for that Series.
(b) If subscriptions for at least the minimum amount specified on
Schedule 2 for a Series have been accepted during the Initial
Offering Period for that Series and there are at least
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150 Subscribers for each Series, the Escrow Agent shall as soon
as practicable thereafter deliver all or such portion of the
Proceeds for such Series, which are identified by the
Managing Owner as having been accepted for that Series,
deposited in its Escrow Account (including all interest earned
on the Proceeds for such Series) to the Trust for that Series
upon written notification by the Managing Owner that (i)
subscriptions aggregating the requisite amount(s) have been
received and accepted for that Series and (ii) the amount of the
proceeds represented by such accepted subscriptions for that
Series are $5,000,000. Such notification shall include
appropriate information with respect to the bank account
referenced in Section 5.01(e).
(c) Any interest earned on the escrowed Proceeds for such Series
will be contributed to such Series for each Subscriber in
proportion to their respective subscriptions (taking into
account both the amount and date of deposit). Accordingly, if
the escrowed Proceeds are delivered to a Series, the interest
earned on the Proceeds will be contributed to the Series along
with the escrowed Proceeds and not individually delivered to
the Subscribers.
(d) If the notification described above in Section 5.01(a) has not
been received during the Initial Offering Period for a Series,
the Escrow Agent shall upon written instruction remit, within
ten business days following the conclusion of the Initial
Offering Period for that Series, or as soon thereafter as may be
practicable in the event payment cannot be made within that
ten day period, the escrowed Proceeds, excluding any interest
earned thereon, to the Subscribers by payment to the
Placement Agent for credit to the Subscribers' respective
accounts with the Placement Agent (in amounts shown on the
memorandum of transmittal described in Section 4.01), and
without deductions of any kind or character. In addition, the
Escrow Agent shall pay any interest earned on the Proceeds to
the Subscribers as soon as practicable by delivering a check
in the amount equal to the interest allocable to each
Subscriber (taking into account both the amount and date of
deposit), it being understood that payment of interest usually
is made by the Escrow Agent on the first or second business
day of each month, and the Escrow Agent shall provide to the
Placement Agent an itemized list of all such sums due and
owing to each Subscriber, except that in the case of Individual
Retirement Accounts and other retirement plans, the Escrow
Agent shall deliver the check for interest to the Placement
Agent for deposit into the Subscriber's securities account at
the Placement Agent.
(e) In the event funds transfer instructions are given (other than in
writing at the time of execution of the Agreement), whether in
writing, by telecopier or otherwise, the Escrow Agent is
authorized to seek confirmation of such instructions by
telephone call-back to the person or persons designated on
Schedule 2 hereto, and the Escrow Agent may rely upon the
confirmations of anyone purporting to be the person or
persons so designated. The persons and telephone numbers
for call-backs may be changed only in a writing actually
received and acknowledged by the Escrow Agent. The parties
to this Agreement acknowledge that such security procedure
is commercially reasonable.
(f) It is understood that the Escrow Agent and the beneficiary's
bank in any funds transfer may rely solely upon any account
numbers or similar identifying number provided by either of
the other parties hereto to identify (i) the beneficiary, (ii) the
beneficiary's bank, or (ii) an intermediary bank. The Escrow
Agent may apply any of the escrowed funds for any payment
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order it executes using any such identifying number, even
where its use may result in a person other than the beneficiary
being paid, or the transfer of funds to a bank other than the
beneficiary's bank, or an intermediary bank designated.
(g) The Escrow Agent shall not incur any liability for following the
instructions herein contained or expressly provided for, or
written instructions given by the parties hereto.
(h) The delivery of such Proceeds in accordance with Section
5.01(b) shall be accomplished by depositing such Proceeds in
a separate bank account for each Series maintained by the
Managing Owner on behalf of the Trust.
(i) Upon distribution of all the Proceeds, including all interest
thereon, the Escrow Agent shall be discharged from all
obligations under this Agreement and shall have no further
duties or responsibilities in connection herewith.
(j) Prior to the termination of the Escrow Account, the Managing
Owner may notify the Escrow Agent in writing of a
subscription for Interests of a Subscriber that has been
rejected in whole or in part by the Managing Owner for
whatever reason or that has been rescinded by the Subscriber,
and the Managing Owner may direct the Escrow Agent to
return by wire transfer any Proceeds held in escrow, excluding
any interest thereon, to the Placement Agent for credit to the
Subscriber's respective account, and the Escrow Agent will
forward any interest on the Proceeds to the Subscriber in the
manner described in this Section 5.01, in each case, as soon
thereafter as may be practicable.
(k) If the Trust determines that the Proceeds includes an amount
greater than the amount representing payment in respect of
Interests sold to accepted Subscribers, the Trust will instruct
the Escrow Agent in writing as to the disposition of said
excess Proceeds.
Section 5.02 Prior to the delivery of the escrowed Proceeds to the Trust as
described above in Section 5.01, (a) the Trust shall have no
title to the Proceeds on deposit in the Escrow Account, and (b)
such Proceeds shall under no circumstances be subject to the
liabilities or indebtedness of the Trust.
Article 6.
ESCROW ACCOUNT
Section 6.01 The Escrow Agent shall cause to be opened a separate escrow
account for the Proceeds of each separate Series (each, an
"Escrow Account"). The Escrow Agent shall cause Proceeds
received from the Placement Agent pursuant to Section 4.01 to
be deposited in the Escrow Account at the Escrow Agent's
Insurance Trust and Escrow Group or at any agent designated
by the Escrow Agent. Proceeds deposited in the Escrow
Account shall be invested by the Escrow Agent in accordance
with the specific written directions furnished by the Managing
Owner. The Managing Owner intends to instruct the Escrow
Agent to invest the Proceeds in U.S. Treasury Obligations or
any other investment specified by the Managing Owner which
is
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consistent with the provisions of NASD Notice to Members
84-7 (January 30, 1984) and the provisions of Rule 15c2-4 of
the Securities Exchange Act of 1934, as amended.
During the term of this Escrow Agreement, the Escrow Fund
shall be invested and reinvested by the Escrow Agent, in The
Chase Manhattan Deposit Account or such other investments
as the Managing Owner, the Placement Agent, and Escrow
Agent may mutually agree upon that is consistent with the
provisions of NASD Notice to Members 84-7 (January 30, 1984)
and the provisions of Rule 15c2-4 of the Securities Exchange
Act of 1934, as amended.
The Escrow Agent shall present for redemption any obligation
so purchased or sell any such obligation, in every case upon
the written direction of the Managing Owner. Obligations so
purchased as an investment of monies in the Escrow Account
shall be deemed at all times to be a part of such Escrow
Account, and the interest accruing thereon shall be credited to
such Escrow Account.
Section 6.02 Interest earned by the Escrow Account for the period
commencing on the date on which Proceeds are received by
the Escrow Agent until the conclusion of the Initial Offering
Period for each Series (as defined in Section 1.01 above), shall
be held by the Escrow Agent in trust for the Subscribers and
distributed to the Subscribers in accordance with Article 5
hereof.
Article 7.
MAINTENANCE OF RECORDS
The Escrow Agent shall maintain accurate records of all
transactions hereunder. As soon as practicable after the
termination of the Escrow Account, or as may reasonably be
requested by the Trust before such termination, but no more
frequently than monthly, the Escrow Agent shall provide the
Trust with a complete copy of such records, represented by
the Escrow Agent to be a complete and accurate account of all
such transactions. The authorized representatives of the Trust
shall also have access to such books and records at all
reasonable times during normal business hours upon
reasonable notice to the Escrow Agent. All interest or other
income earned under the Escrow Agreement shall be allocated
and paid as provided herein. The Escrow Agent is authorized
and instructed to complete Form 1099 in respect of interest
payable to any Subscribers who receive escrow interest
payments pursuant to Section 5.01 and to the Placement
Agent for credits received pursuant to Section 5.01 in
compliance with the applicable sections of the Internal
Revenue Code.
Article 8.
EXCULPATION AND INDEMNIFICATION
Section 8.01
(a) Notwithstanding anything to the contrary contained in this
Agreement, the Escrow Agent shall not be liable for any of the
following, except in the event a court of
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competent jurisdiction determines that it was the gross negligence
or willful misconduct on the part of the Escrow Agent:
(i) the failure of any of the conditions of this Agreement or
damage caused by the exercise of its discretion in any
particular manner, or for any reason (including, without
limitation, the liquidation of investments of the Proceeds), for
any mistake of fact or law, for any error of judgment or for any
action taken or omitted by it or any action suffered by it to be
taken or omitted or (ii) the failure to ascertain the terms or
conditions, or to comply with any of the provisions, of any
agreement, contract or other document delivered to the
Escrow Agent hereunder or for forgeries or false
impersonation.
(b) If any controversy arises among the parties hereto or with any
third party with respect to the subject matter of this
Agreement, its terms or conditions, the Escrow Agent shall not
be required to determine the same or take any action, but the
Escrow Agent may await the settlement of any such
controversy by final appropriate legal proceedings, mutual
agreement or otherwise as the Escrow Agent may require,
notwithstanding anything in this Agreement to the contrary,
and in such event, the Escrow Agent shall not be liable for
interest or damages.
(c) The Escrow Agent's duties hereunder shall be only such as
are herein specifically provided, being purely ministerial in
nature, and the Escrow Agent shall incur no liability except for
the gross negligence or willful misconduct which is
determined by a court of competent jurisdiction. Specifically
and without limiting the foregoing, the Escrow Agent shall in
no event have any liability in connection with its investment,
reinvestment or liquidation, in accordance with the terms
hereof, of any Proceeds held by it hereunder including,
without limitation, any liability for any delay not resulting from
gross negligence or willful misconduct in such investment,
reinvestment or liquidation, or for any loss of income incident
to any such delay. The Escrow Agent is not a party to, and is
not bound by, any agreement or other document out of which
this Agreement may arise or any other agreement or other
document in connection with the Trust. Except as may be
provided by law, the Escrow Agent shall not be deemed to owe
any fiduciary duty to the other parties hereto or to the
Subscribers.
(d) The Escrow Agent shall not be required to institute legal
proceedings of any kind or to defend any lawsuit brought in
connection with the escrowed funds, provided that the Escrow
Agent shall cooperate with the Trust with respect to the
institution or defense of any such legal proceeding brought by
or against the Trust, as the case may be. In the event of its
participation in any such legal proceeding, the Escrow Agent
shall be reasonably compensated for its services and
expenses as provided in Section 9.01(b). The Escrow Agent
shall have no responsibility for the genuineness or validity of
any document or other items deposited with it, and the Escrow
Agent shall be fully protected in acting or refraining from
acting in accordance with any written instruction given to it
hereunder and believed by it to have been signed or given by
the proper parties. Each of the Managing Owner and
Placement Agent shall provide the Escrow Agent with a list of
officers and employees who shall be authorized to deliver
instructions hereunder. The Escrow Agent shall not be liable
for any action taken or omitted by the Escrow Agent pursuant
to the instructions contained or expressly provided herein,
provided that such omission was in good faith.
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(e) The Escrow Agent may consult with its legal counsel in the
event of any dispute or question as to the construction of the
terms of this Agreement, and the Escrow Agent shall incur no
liability and shall be fully protected in acting in good faith in
accordance with the opinion and instructions of such counsel.
The Managing Owner shall reimburse the Escrow Agent for
reasonable legal expenses actually paid by the Escrow Agent
as a result of any such consultation with counsel.
(f) In the absence of willful misconduct or gross negligence on
the part of the Escrow Agent, the Escrow Agent may rely
conclusively and shall be protected in acting or refraining
from acting upon any order, notice, demand, certificate,
statement, instrument, report or other document (not only as
to its due execution and the validity and effectiveness of its
provisions but also as to the truth, completeness and
acceptability of any information therein contained) which is
reasonably believed by the Escrow Agent to be genuine and to
have been signed or presented by the proper person or
persons.
(g) At any time, the Escrow Agent may request in writing an
instruction in writing from the Managing Owner, and may at its
own option include in such request the course of action it
proposes to take and the date on which it proposes to act,
regarding any matter arising in connection with its duties and
obligations hereunder. The Escrow Agent shall not be liable
for acting without the Managing Owner's consent in
accordance with such a proposal on or after the date specified
therein, provided that the specified date shall be at least two
business days after the Managing Agent receives the Escrow
Agent's request for instructions and its proposed course of
action and provided further that, prior to so acting, the Escrow
Agent has not received the written instructions requested.
(h) The Escrow Agent shall be indemnified and held harmless by
the Trust and the Managing Owner from and against any
expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Escrow Agent in
connection with the administration of this Escrow Agreement
or any action, suit or other proceeding involving any claim or
in connection with any claim or demand, which in any way,
directly or indirectly, arises out of or relates to this Escrow
Agreement, the services of the Escrow Agent hereunder, the
Proceeds held by the Escrow Agent hereunder or any income
earned from the investment of such Proceeds, except for any
such expenses or loss caused by the willful misconduct or
gross negligence of the Escrow Agent.
(i) The Escrow Agent agrees and acknowledges that in seeking to
enforce its rights hereunder against a particular Series, it will
look solely to the assets of that Series and the Managing
Owner and not to the assets of the Trust generally or of any
other Series.
(j) The Escrow Agent agrees and consents (the "Consent") to
look solely to each Series for which brokerage and clearing
services are being performed (the "Contracting Series") and
assets (the "Contracting Series Assets") of the Contracting
Series and to the Managing Owner and its assets for payment.
The Contracting Series Assets include only those funds and
other assets that are paid, held or distributed to the Trust on
account of and for the benefit of the Contracting Series
including, without limitation, funds delivered to the Trust for
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the purchase of interests in a Series. In furtherance of the
Consent, the Escrow Agent agrees that any debts, liabilities,
obligations, indebtedness, expenses and claims of any nature
and of all kinds and descriptions (collectively, "Claims")
incurred, contracted for or otherwise existing arising from,
related to or in connection with the Trust and its assets and
the Contracting Series and the Contracting Series Assets,
shall be subject to the following limitations:
(1) Subordination of certain claims and rights: (a) except as set
forth below, the Claims, if any, of the Escrow Agent (the
"Subordinated Claims") shall be expressly subordinate and
junior in right of payment to any and all other Claims against
the Trust and any Series thereof, and any of their respective
assets, which may arise as a matter of law or pursuant to any
contract; provided, however, that the Escrow Agent's Claims
(if any) against the Contracting Series shall not be considered
Subordinated Claims with respect to enforcement against and
distribution and repayment from the Contracting Series, the
Contracting Series Assets and the Managing Owner and its
assets; and provided further that the Escrow Agent's valid
Claims, if any, against the Contracting Series shall be pari
passu and equal in right of repayment and distribution with all
other valid Claims against the Contracting Series, and (b) the
Escrow Agent will not take, demand or receive from any Series
or the Trust or any of their respective assets (other than the
Contracting Series, the Contracting Series Assets and the
Managing Owner and its assets) any payment for the
Subordinated Claims;
(2) the Claims of the Escrow Agent with respect to the
Contracting Series shall only be asserted and enforceable
against the Contracting Series, the Contracting Series Assets
and the Managing Owner and its assets, and such Claims shall
not be asserted or enforceable for any reason whatsoever
against any other Series, the Trust generally or any of their
respective assets;
(3) if the Claims of the Escrow Agent against the Contracting
Series or the Trust are secured in whole or in part, the Escrow
Agent hereby waives (under section 1111(b) of the U.S.
Bankruptcy Code (11 U.S.C. S 1111(b)) any right to have any
deficiency Claims (which deficiency Claims may arise in the
event such security is inadequate to satisfy such Claims)
treated as unsecured Claims against the Trust or any Series
(other than the Contracting Series), as the case may be;
(4) in furtherance of the foregoing, if and to the extent that the
Escrow Agent receives monies in connection with the
Subordinated Claims from a Series or the Trust (or their
respective assets), other than the Contracting Series, the
Contracting Series Assets and the Managing Owner and its
assets, the Escrow Agent shall be deemed to hold such
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monies in trust and shall promptly remit such monies to the
Series or the Trust that paid such amounts for distribution by
the Series or the Trust in accordance with the terms hereof;
and
(5) the foregoing Consent shall apply at all times notwithstanding
that the Claims are satisfied and notwithstanding that the
agreements in respect of such Claims are terminated,
rescinded or canceled.
(k) The Escrow Agent is authorized, in its sole discretion, to
disregard any and all notices or instructions given by any of
the parties hereto or by any other person, firm, or corporation,
except for such notices or instructions as are hereunder
provided for and orders or process of any court entered or
issued with or without jurisdiction. Upon the receipt of any
court order, the Escrow Agent will immediately cause a copy
thereof to be sent by facsimile transmission to Xxxxx
Xxxxxxxxx, Esq. (or his successor) at (000) 000-0000 or at such
other number as is provided in writing to the Escrow Agent in
the future. If the Proceeds are, or any part thereof is, at any
time attached, garnished or levied upon under any court order,
or if payment, assignment, transfer, conveyance or delivery of
the Proceeds is stayed or enjoined by any court order, or in
case any order, judgment or decree is made or entered by any
court affecting the Proceeds or any part thereof, then, and in
any such event, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ,
judgment or decree that the Escrow Agent is advised is
binding upon it, by its legal counsel, and if the Escrow Agent
complies with any such order, writ, judgment or decree it shall
not be liable to any of the Parties or to any other person, firm
or corporation by reason of such compliance even though
such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.
(l) The Escrow Agent makes no representation as to the validity,
value, genuineness or collectability of any security or other
document or instrument held by or delivered to it.
(m) The Escrow Agent shall not be called upon to advise any party
as to selling or retaining, or taking or refraining from taking
any action with respect to, any securities or other property
deposited hereunder.
(n) No provision of this Agreement shall require the Escrow Agent
to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder. The duties and responsibilities of the Escrow
Agent hereunder shall be determined solely by the express
provisions of this Escrow Agreement, and no other or further
duties or responsibilities shall be implied. The Escrow Agent
shall not have any liability under, nor duty to inquire into the
terms and provisions of any agreement or instructions, other
than outlined in the Agreement.
(o) In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder or shall receive instructions, claims
or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Agreement, it shall
be entitled to refrain
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from taking any action and its sole
obligation shall be to keep safely all property held in escrow
until it shall be directed otherwise in writing.
(p) The provisions of Articles 8 and 9 of this Agreement shall
survive termination of this Agreement and/or the resignation
or removal of the Escrow Agent.
(q) In the administration of the escrow account hereunder, the
Escrow Agent may execute any of its powers and perform its
duties hereunder directly or through agents or attorneys and
may, consult with counsel, accountants and other skilled
persons to be selected and retained by it.
(r) Anything in this agreement to the contrary notwithstanding, in
no event shall the Escrow Agent be liable for special, indirect
or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Escrow
Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.
Article 9.
FEES
Section 9.01
(a) The Escrow Agent shall receive fees as described in the
attached Schedule 1.
(b) It is understood that the fees and usual charges agreed upon
for the Escrow Agent's services hereunder shall be considered
compensation for its ordinary services as contemplated by
this Agreement and that in the event that the conditions of this
Agreement are not promptly fulfilled or that the Escrow Agent
renders any service not provided for in this Agreement or that
there is any modification hereof or that any controversy with
any third party arises hereunder or that the Escrow Agent is
made a party to, or intervenes in, any litigation with a third
party pertaining to this Agreement or the subject matter
hereof, the Escrow Agent and its legal counsel shall, provided
that prior notification is given to the Trust and the Managing
Owner, be reasonably compensated for such extraordinary
services and reimbursed for all costs and expenses
occasioned by such default, delay, controversy or litigation.
The Managing Owner hereby promises to pay the foregoing
sums upon demand.
Article 10
RESIGNATION AND DISCHARGE
Section 10.01 Notwithstanding anything to the contrary contained in this
Agreement, the Escrow Agent (i) may resign from its duties
under this Agreement by giving 30 days' prior written notice of
such resignation to the other parties hereto and (ii) may be
discharged from its
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duties under this Agreement upon receipt
from the other parties hereto of 30 days' prior written notice of
such discharge. Upon the effective date of such resignation or
discharge of the Escrow Agent and upon payment to the
Escrow Agent of all amounts owed to it hereunder, the
Proceeds held by the Escrow Agent shall be returned to the
Trust or paid over to a substitute Escrow Agent that the Trust
shall retain to perform the functions theretofore performed by
the Escrow Agent under this Agreement, as the Trust shall
direct the Escrow Agent in writing or in accordance with the
directions of a final order or judgment or a court of competent
jurisdiction, and the pro rata portion of the Escrow Agent's fee
up to the effective date of resignation or discharge shall be
paid by the Placement Agent. If a successor Escrow Agent
has not been appointed or has not accepted such appointment
within 30 days of notice of resignation or removal, the Escrow
Agent may apply to a court of competent jurisdiction for the
appointment of a successor Escrow Agent or for other
appropriate relief, and the costs, expenses and reasonable
attorney's fees and expenses which the Escrow Agent incurs
in connection with any such a proceeding shall be paid by the
Managing Owner. In the absence of such directions, the
Escrow Agent may return the Proceeds to the Trust.
Article 11.
MISCELLANEOUS
Section 11.01 The Trust may assign and grant a security interest in
all sums payable to the Trust pursuant to this Agreement, and the
Escrow Agent agrees to accept and acknowledge the
instructions for the payment of the funds within the Escrow
Account in accordance with the provisions of Article 5 hereof
designating the disposition of Proceeds. Once such
instructions are given in accordance with this Section 11.01,
and subject to all of the rights of the Trust to receive the
Proceeds as set forth herein, such instructions will be deemed
to be final and attributable to all future distributions of
Proceeds as contemplated hereunder. It is understood that in
order for the parties hereto to amend this Agreement and
thereby change such instructions, any party who has been
assigned or granted a security interest in such Proceeds shall
join in the execution of such amendment or shall otherwise
give its written consent to such amendment. All reasonable
expenses incurred by the Escrow Agent as a result of the
assignment or the granting of a security interest in the
Proceeds shall be paid by the Trust.
Section 11.02 Except as provided in Section 8.01(j), all notices,
communications and instructions required or desired to be
given under this Agreement shall be in writing and shall be
deemed to be duly given if hand delivered or sent by express
delivery service or by registered or certified mail, return
receipt requested, to the following addresses or to such other
address as may be furnished to the other parties as herein
provided:
To the Escrow Agent:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Escrow Administration Department
Capital Markets Fiduciary Services
12
To the Trust:
World Monitor Trust II
c/o Prudential Securities Futures Management Inc.
Xxx Xxx Xxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
To the Managing Owner:
Prudential Securities Futures Management Inc.
Xxx Xxx Xxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
In the case of the Trust and the Managing Owner, with a copy to:
Prudential Securities Incorporated
One Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
and
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
To the Placement Agent:
Prudential Securities Incorporated
One Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxx
(a) This Agreement shall not be amended, modified or rescinded
except upon receipt by the Escrow Agent of a written
instrument signed by all the parties including the Escrow
Agent.
(b) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
13
Section 11.03 This Agreement, the rights and obligations of the parties
hereunder and all performance hereunder shall be governed
by and construed in accordance with the laws of the State of
New York without regard to its principles of conflicts of laws
and any action brought hereunder shall be brought in the
courts of the State of New York, located in the County of New
York. Each party hereto irrevocably waives any objection on
the grounds of venue, forum non-conveniens or any similar
grounds and irrevocably consents to service of process by
mail or in any other manner permitted by applicable law and
consents to the jurisdiction of said courts in accordance with
the laws of the State of New York without giving effect to the
choice of law provisions thereof.
(a) The Escrow Agent agrees that it will not take any of the
following actions against the Trust: LISTNUM \l 4 \s 1 seek
a decree or order by a court having jurisdiction in the
premises (A) for relief in respect of the Trust in an involuntary
case or proceeding under the U.S. Bankruptcy Code or any
other federal or state bankruptcy, insolvency, reorganization,
rehabilitation, liquidation or similar law or (B) adjudging the
Trust a bankrupt or insolvent or seeking reorganization,
rehabilitation, liquidation, arrangement, adjustment or
composition of or in respect of the Trust under the U.S.
Bankruptcy Code or any other applicable federal or state law,
or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Trust or of
any substantial part of any of its properties or ordering the
winding up or liquidation of any of its affairs, (ii) seek a
petition for relief, reorganization or to take advantage of any
law referred to in the preceding clause or (iii) file an
involuntary petition for bankruptcy (collectively "Bankruptcy
or Insolvency Action").
(b) This Agreement has been made and executed by and on behalf
of the Trust and the Managing Owner, and the obligations of
the various Series of the Trust and/or the Managing Owner set
forth herein are not binding upon any of the Limited Owners
individually but are binding only upon the assets and property
identified above; no resort shall be had to the assets of one
Series for the obligations of another Series or to the Limited
Owners' personal property for the satisfaction of any
obligation or claim hereunder.
Section 11.04 Nothing in this Agreement, expressed or implied, shall give or
be construed to give any persons, firm or corporation, other
than the parties hereto and their successors and assigns, any
legal claim under any covenant, condition or provision hereof,
all the covenants, conditions and provisions contained in this
Agreement being for the sole benefit of the parties hereto and
their successors and assigns. No party may assign any of its
rights or obligations under this Agreement without the written
consent of all the other parties, which consent may be
withheld in the sole discretion of the party whose consent is
sought, provided, however, that any corporation into which
the Escrow Agent in its individual capacity may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Escrow Agent in its individual
capacity shall be a party, or any corporation to which
substantially all the corporate trust business of the Escrow
Agent in its individual capacity maybe transferred, shall be the
Escrow Agent under this Escrow Agreement without further
act.
14
Section 11.05 No printed or other material in any language, including
notices, reports, and promotional material which mentions any
of the parties by name or which mentions the rights, powers or
duties of the Escrow Agent under this Agreement shall be
issued by any of the other parties hereto, or on such party's
behalf, without the prior written consent of such party. The
Managing Owner is given permission by the Escrow Agent to
mention The Chase Manhattan Bank by name and to mention
the rights, powers and duties of the Escrow Agent under this
Agreement in the Prospectus.
Section 11.06 The parties agree that the provisions of Articles 8
and 9 will survive the termination of this Agreement, whether terminated
in a Bankruptcy or Insolvency Action or otherwise.
15
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
WORLD MONITOR TRUST II
By: Prudential Securities Futures
Management Inc., the Managing Owner
By:___________________________
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
PRUDENTIAL SECURITIES FUTURES
MANAGEMENT INC., as Managing Owner
By:_______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
THE CHASE MANHATTAN BANK, as Escrow Agent
By:_______________________________
Name:
Title:
PRUDENTIAL SECURITIES
INCORPORATED, as Placement Agent
By:_______________________________
Name:
Title:
16
SCHEDULE 1
World Monitor Trust II/Prudential Securities Futures Management Inc.
Escrow Agent Services
Schedule of Fees
, 1999
Initial Fee Waived
This fee covers the acceptance of the appointment,
review of agreements and supporting documentation,
and establishment of appropriate accounts.
Annual Administration Fee $7,500 per Series
This fee covers the normal administration of
the agreement.
Legal Fees: (if applicable) At Cost
Subject to the notification and approval of the Managing
Owner prior to the submission to counsel not employed by the
Escrow Agent. This Fee covers the initial review of
agreements and supporting documentation.
Account Maintenance $2,500 per Series
This Fee covers the creation and maintenance of
the account for the first 500 investors in
each Series. If there are more than
500 investors in a Series, then the following
fees will be charged for each investor over
the initial 500 investors in the Series.
$3.00 per investor
$1.00 per 1099
$1.00 per check, if applicable
Additional Terms:
1. Fees for services not contemplated on this schedule are
determined by an appraisal of the work involved and will be
provided upon request.
2. No additional charges will be incurred for "bust outs". A
"bust out" is a reversal of a subscription once the dollar
amount of the subscription has been transferred to the Escrow
Agent.
SCHEDULE 2
Minimum Amount of Interests
By Series Required
to be Sold
Series D $5 million
Series E $5 million
Series F $5 million
SCHEDULE 3
Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Funds Transfer Instructions
If to Managing Owner:
Name Telephone Number
1.
2.
3.
If to Placement Agent:
Name Telephone Number
1.
2.
3.
Telephone call-backs shall be made to the Managing Owner
and the Placement Agent if joint instructions are required
pursuant to the Agreement.
