EXHIBIT 10.05
JWH GLOBAL PORTFOLIO TRUST
ESCROW AGREEMENT
This Escrow Agreement is made and entered into as of ____ __, 1996 by
and among The First National Bank of Chicago, a national banking association,
as escrow agent (the "Escrow Agent"), JWH Global Portfolio Trust, a Delaware
business trust (the "Trust"), CIS Investments, Inc., a Delaware corporation
("CISI" or "Managing Owner"), the managing owner of the Trust, and Cargill
Investor Services, Inc., a Delaware corporation ("CIS" or "Lead Selling
Agent").
RECITALS
The Trust proposes to offer for sale to investors through one or more
registered broker-dealers up to 500,000 units of beneficial interest ("Units")
in the Trust at a price of $100 per Unit during the Initial Offering Period (as
defined in the Prospectus referred to below) and at the Net Asset Value during
the Ongoing Offering Period (as defined in the Prospectus referred to below);
In connection with the proposed public offering of Units, the Trust and the
Managing Owner have entered into a selling agreement with the Lead Selling Agent
and the Lead Selling Agent may, with the consent of the Managing Owner, enter
into additional selling agent agreements with certain additional and
correspondent selling agents (the Lead Selling Agent and such additional and
correspondent selling agents are collectively referred to herein as "Selling
Agents"), for the offer and sale of Units on a "best efforts" basis.
The Trust proposes to establish an escrow account with the Escrow Agent in
which proceeds received from subscribers will be deposited and the Escrow Agent
agrees to serve as escrow agent, all in accordance with the terms and conditions
set forth herein.
AGREEMENTS
In consideration of the foregoing and the mutual covenants contained
herein, the parties agree as follows:
1. Commencing upon the execution of this Agreement, the Escrow Agent
shall act as escrow agent and agrees to receive, hold, deal with and disburse
the proceeds from the sale ("Proceeds") of Units and any other property at any
time held by the Escrow Agent hereunder in accordance with this Agreement. The
Managing Owner agrees to notify the Escrow Agent promptly (a) if the proposed
offering of Units is extended by the Managing Owner as provided in the Trust's
Prospectus dated ___________, 1996 (the "Prospectus") and (b) of the date of the
Initial Closing Date (hereinafter defined) and each subsequent closing date.
2. CIS shall deposit all Proceeds received from the Selling Agents
together with the name, address, federal tax identification number and amount of
the subscription of each subscriber. All Proceeds shall be denominated in
dollars and deposited in this escrow by check or wire transfer,
duly made out to the Escrow Agent in the following form: "THE FIRST NATIONAL
BANK OF CHICAGO, AS ESCROW AGENT FOR JWH GLOBAL PORTFOLIO TRUST, ESCROW
ACCOUNT NO. ___________." The Escrow Agent shall promptly notify CIS of any
discrepancy between the amounts set forth on any statement delivered by CIS
and the sum or sums delivered therewith to the Escrow Agent. Any checks
received that are made payable to a party other than the Escrow Agent shall
be returned to CIS for prompt return to the appropriate subscribers. In the
event that any checks or other instruments deposited in the escrow prove
uncollectible, the Escrow Agent shall promptly notify CIS and forward such
checks or other instruments to CIS.
3. The Escrow Agent is required to separately record on its books the
name, address, federal tax identification number and amount of each subscription
as received, and shall keep documents necessary to evidence the name, address
and federal tax identification of each subscriber, the aggregate amount of his
subscriptions, and the date such subscription was received.
4. The Escrow Agent shall cause all Proceeds deposited with it
pursuant to Section 2 hereof to be maintained and invested no later than the
second business day following receipt of such Proceeds as the Managing Owner
shall direct from time to time by written instructions delivered to the
Escrow Agent, in (a) an interest bearing bank account; (b) bank money-market
accounts; (c) short-term certificates of deposit issued by a bank; or (d)
short-term securities issued or guaranteed by the United States Government,
as permitted by law (and in particular Rule 15c2-4 under the Securities
Exchange Act of 1934), which can be readily liquidated so that 100% of the
Proceeds and interest thereon can, if necessary, be returned to the
subscribers in accordance with this Agreement and that the interest on such
securities shall not subject foreign subscribers to the United States
taxation or tax reporting requirements. The Escrow Agent will incur no
liability for any loss suffered so long as the Escrow Agents follows such
instructions, except for losses due to its lack of good faith, negligence or
willful misconduct.
Interest earned on funds attributable to accepted subscriptions while held
in this escrow shall be allocated among subscribers in proportion to the amounts
of their respective subscriptions and the lengths of time their subscriptions
were held in escrow.
5 (a) The initial offering of Units will terminate as of ___________,
1997, subject to extension until _________, 1997 and to prior sale of all
available Units (the "Initial Closing Date"). The Managing Owner may limit,
suspend or terminate the offering at any time upon verbal notice promptly
confirmed in writing to the Escrow Agent. On the Initial Closing Date the
Escrow Agent shall, upon (i) written instructions from the Managing Owner,
(ii) receipt of an affidavit signed by the Managing Owner that acceptable
subscriptions for at least 100,000 Units have been received and (iii) possession
in the escrow account of at least $10,000,000 in collected funds in payment of
such subscriptions, (as specified in such instructions) pay to, credit to the
account of, or otherwise transfer to commodity trading account maintained by the
Trust with Cargill Investor Services, Inc. (the "Customer Account"), the
commodity broker for the Trust, or as otherwise directed by the Managing Owner,
the collected Proceeds then held in escrow and interest earned on such Proceeds
accrued from the date of deposit until the Initial Closing Date.
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(b) After the Initial Closing Date and during the Ongoing Offering Period,
the Escrow Agreement shall segregate Proceeds received according to the dates
the Selling Agents receive the funds. Proceeds shall be grouped in Monthly
Groups. Proceeds received after the 20th (or, if the 20th is not a business
day, the next business day) of a calendar month through and including the 19th
of the next succeeding calendar month ("End Date") shall comprise one Monthly
Group. For each Monthly Group containing subscriptions which have been accepted
by the Managing Owner, the Escrow Agent shall pay to, credit to the account of,
or otherwise transfer to the Customer Account, or as otherwise directed by the
Managing Owner, Proceeds comprising the Monthly Group pertaining to accepted
subscriptions and interest earned on such Proceeds, on the last business day of
the calendar month of the applicable End Date.
(c) Prior to the delivery to it as described above, the Trust shall have
neither title to nor interest in the funds on deposit, and such funds shall
under no circumstances be subject to the liabilities or indebtedness of the
Trust.
(d) Interest earned on an accepted subscription will be paid to the
Trust's Customer Account, or as otherwise directed by CISI, and invested in the
Trust, and subscribers will be issued additional Units reflecting each
subscriber's attributable share of such interest. To enable CISI to determine
the number of additional Units issuable to each subscriber whose subscription
has been accepted, the Escrow Agent shall, within 5 business days before the
Initial Closing Date and each subsequent closing date, notify CISI the amount of
interest that will be earned as of the Initial Closing Date or such subsequent
closing date, as the case may be, on each subscriber's subscription funds while
held in escrow.
6. If at least 100,000 Units have not been subscribed for by the Initial
Closing Date or if any other closing conditions are not satisfied, then the
Managing Owner shall promptly so advise the Escrow Agent. The Escrow Agent
shall return to each subscriber his or her subscription funds, together with the
PRO RATA share of interest earned on such funds, within 5 business days after it
has received from the Managing Owner the advice described above.
7. At any time prior to the release of a subscriber's funds from this
escrow, the Managing Owner may notify the Escrow Agent that a subscription, or a
part thereof, has not been accepted and the Managing Owner may direct the Escrow
Agent to return as soon thereafter as may be practicable (in no event later than
5 business days) any such funds, or the appropriate portion thereof, held in
this escrow for the benefit of such subscriber, with interest, directly to such
subscriber.
If subscriptions funds (and interest earned thereon, if any) shall be
returned to subscribers, whether due to rejection of subscriptions or the non-
occurrence of the Initial Closing Date, the Escrow Agent shall do so in the same
manner through which (I.E., by check or wire) and to the same source from which
(I.E., a subscriber or an applicable Selling Agent for credit to the account of
a subscriber) subscription funds were received.
8. The Escrow Agent shall not be liable for any action taken or omitted
in good faith in accordance with the advice of its counsel except for its own
negligence or willful misconduct. The
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Escrow Agent shall not be responsible for any loss of subscriptions funds
resulting from the investment thereof in accordance with this Agreement.
9. CISI agrees to pay the Escrow Agent reasonable compensation for the
services to be rendered hereunder, as described in the Schedule I attached
hereto, and pay or reimburse the Escrow Agent upon request for reasonable
attorney's fees, incurred by it as a result of events not contemplated by this
Agreement but otherwise in connection with this Agreement. CISI hereby agrees
to indemnify and save harmless the Escrow Agent from all losses, costs and
expenses, including attorney fees which may be incurred by it as a result of its
acceptance of its appointment as Escrow Agent or arising from the performance of
its duties hereunder, unless the Escrow Agent shall have been adjudged to have
acted in bad faith or to have been negligent, and such indemnification shall
survive its resignation or removal, or the termination of this Agreement until
extinguished by any applicable statute of limitation.
10. The Managing Owner may remove the Escrow Agent at any time (with or
without cause) by giving at least 15 days written notice thereof. Within 10
days after receiving such notice, the Managing Owner shall appoint a successor
escrow agent at which time the Escrow Agent shall either distribute the funds
held in the Escrow Account, its fees, costs and expenses or other obligations
owed to the Escrow Agent having been paid by CISI, as directed by the
instructions of the Managing Owner or hold such funds, pending distribution,
until all such fees, costs and expenses or other obligations are paid by the
CISI. If a successor escrow agent has not been appointed or has not accepted
such appointment by the end of the 10-day period, the Escrow Agent may appeal 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
attorneys fees which the Escrow Agent incurs in connection with such a
proceeding shall be paid by the Trust.
11. The Trust and the Managing Owner warrant and agree to the Escrow Agent
that, unless otherwise expressly set forth in this Agreement: there is no
security interest in the subscription funds or any part thereof; no financing
statement under the Uniform Commercial Code is on file in any jurisdiction
claiming a security interest in or describing (whether specifically or
generally) the subscription funds or any part thereof; and you shall have no
responsibility at any time to ascertain whether or not any security interest
exists in the subscription funds or any part thereof or to file any financing
statement under the Uniform Commercial Code with respect to the subscription
funds or any part thereof.
12. The Escrow Agent's duties and responsibilities shall be limited to
those expressly set forth in this Agreement, and the Escrow Agent shall not be
subject to, nor obliged to recognize, any other agreement between, or direction
or instruction of, any and all of the parties hereto; provided, however, this
Agreement may be amended at any time by an instrument in writing signed by all
the parties.
13. If any property subject hereto is at any time attached, subject to
garnishment or levied upon, under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment or decree
shall be made or entered by any court affecting such property, or any part
thereof, then in any
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of such events, the Escrow Agent is authorized to rely upon and comply with
any such order, writ, judgment or decree, which it is advised by legal
counsel of its own choosing is binding upon it, and if it complies with any
such order, writ, judgment or decree, it shall not be liable to any of the
parties hereto or 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.
14. This Agreement shall be construed, enforced, and administered in
accordance with the laws of the State of Illinois, without regard to the
principles of conflicts of laws thereof.
15. The Escrow Agent may resign by giving 30 days' prior written notice
delivered to the Managing Owner, and thereafter shall deliver all remaining
deposits in this escrow to a successor escrow agent acceptable to the Managing
Owner which acceptance shall be evidenced by their joint written and signed
order. If no such order is received by the Escrow Agent within 30 days after
delivery of such notice, it is unconditionally and irrevocably authorized and
empowered to send any and all funds deposited hereunder by registered mail to
the respective subscribers thereof.
16. In the event funds transfer instructions are given (other than in
writing at the time of execution of this 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 II 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 acknowledge that
such security procedure is commercially reasonable.
17. This Agreement shall not become effective (and the Escrow Agent
shall have no responsibility hereunder except to return the property deposited
in escrow to the subscribers) until the Escrow Agent shall have received the
following and shall have advised each of the Trust and the Managing Owner in
writing that the same are in form and substance satisfactory to the Escrow
Agent: (1) a certified resolution of the Managing Owner's board of directors
authorizing the making and performance of this Agreement and (2) a certificate
as to the names and specimen signatures of its officers or representatives
authorized to sign this Agreement and notices, instructions and other
communications.
18. Any notice which a party is required or desires to give hereunder
shall be in writing and may be given by mailing or delivering the same to the
address of the party to receive notice:
if the Escrow Agent, addressed to:
The First National Bank of Chicago
Escrow Services, Suite 0000
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx
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if to the Trust, addressed to:
c/o CIS Investments, Inc.
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: L. Xxxxxxx Xxxxxxxx
if to CISI, addressed to:
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: L. Xxxxxxx Xxxxxxxx
if to CIS, addressed to:
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: L. Xxxxxxx Xxxxxxxx
or to such other address as said party may substitute therefor by written
notification to the other parties. For all purposes hereof, any notice shall be
effective only when actually received.
19. This Agreement shall terminate upon completion of this offering or as
otherwise provided by written instruction from the Managing Owner to the Escrow
Agent.
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
as of _______________, 1996.
THE FIRST NATIONAL BANK
OF CHICAGO, as Escrow Agent
By:
----------------------------------
Xxxx X. Xxxxxxxxxxx
Vice President
JWH GLOBAL PORTFOLIO TRUST
By:CIS Investments, Inc.,
Managing Owner
By:
----------------------------------
L. Xxxxxxx Xxxxxxxx
Vice President
CIS INVESTMENTS, INC.
By:
----------------------------------
L. Xxxxxxx Xxxxxxxx
Vice President
CARGILL INVESTOR SERVICE, INC.
By:
----------------------------------
L. Xxxxxxx Xxxxxxxx
Vice President
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SCHEDULE I
FEE SCHEDULE
ACCEPTANCE FEE: $1,750.00
Fee for services in connection with the initial set-up of the subscription
escrow account. This fee covers examination and execution of an escrow
agreement and all required documentation, and all initial account set-up
including the Escrow Agent's legal fees.
ANNUAL ADMINISTRATION FEE:
Per subscription participant account $6.40
Fee for ongoing administration of the subscription escrow account.
Participants are defined on a monthly basis with each monthly subscription
period being unique. An individual subscribing in more than one month will
be counted in each month. Should an individual add to a subscription
amount in a given month, there will be no additional charge.
This fee includes all investments specified in the Escrow Agreement ,
required participant recordkeeping, remittance of checks, production of
1099s, and postage.
WIRE TRANSFERS: $20.00
Wire transfers to the fund participants will be charged additionally at
$20.00 each transfer. Wire transfers to the Trust, the Managing Owner or
Lead Selling Agent will be at no charge.
ADDITIONAL SERVICES AND EXPENSES:
Any out-of-pocket expenses incurred by the Escrow Agent (E.G., responding
to unusual audit request) will be assessed in amounts commensurate with the
services rendered, itemized and billed in addition to the foregoing fees.
No charge will be incurred for termination of account.
The fees above are subject to equitable adjustments as reasonably warranted
by changes in laws, procedures, or cost of doing business upon prior written
notice to the parties.
SCHEDULE II
TELEPHONE NUMBER(S) FOR CALL-BACKS AND
PERSON(S) DESIGNATED TO CONFIRM FUNDS TRANSFER INSTRUCTIONS
JWH GLOBAL PORTFOLIO TRUST:
CIS Investments, Inc. as Managing Owner
NAME TELEPHONE NUMBER
1. Xxxxxxxx Xxxxxxxx (000) 000-0000
2. Xxx Xxxxx (000) 000-0000
3. Xxxxxxx Xxxxxxxx (000) 000-0000
CARGILL INVESTOR SERVICES, INC.:
NAME TELEPHONE NUMBER
1. Xxxxxxxx Xxxxxxxx (000) 000-0000
2. Xxx Xxxxx (000) 000-0000
3. Xxxxxxx Xxxxxxxx (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO, N.A.:
NAME TELEPHONE NUMBER
1. Xxxxxx Xxxxxx (000) 000-0000
2. Xxx Xxxxxx (000) 000-0000
