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ESCROW AGREEMENT
among
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Depositor-Agent
and
Xxxxxxx Xxxxx KECALP L.P. 1999
the Issuer-Partnership
and
THE BANK OF NEW YORK
as Escrow Agent
Dated as of ____________, 1998
ACCOUNT NUMBER(S) ________
SHORT TITLE OF ACCOUNT Xxxxxxx Xxxxx KECALP L.P. 1999
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ESCROW AGREEMENT made this ___ day of ________, 1998 by and among THE
BANK OF NEW YORK ("Escrow Agent") and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (the "Depositor-Agent") and Xxxxxxx Xxxxx KECALP L.P. 1999 (the
"Issuer Partnership").
The Depositor-Agent and Escrow Agent hereby agree that, in
consideration of the mutual promises and covenants contained herein Escrow Agent
shall hold in escrow and shall distribute Escrow Property (as defined herein) in
accordance with and subject to the following Instructions and Terms and
Conditions:
I. INSTRUCTIONS
1. ESCROW PROPERTY
The property and/or funds deposited or to be deposited with Escrow
Agent by the Depositor-Agent shall be as follows:
Cash payments received from subscribers of up to 500,000 units of
limited partnership interest (the "Units") in Xxxxxxx Xxxxx KECALP L.P.
1999 (the "Issuer-Partnership") at a price of $1,000 each to certain
employees and directors of Xxxxxxx Xxxxx and Co., Inc. and of its
subsidiaries. (Subscribers' checks will be made payable to Escrow
Agent, and broker/dealers will transmit such checks directly to Escrow
Agent by 12:00 noon of the next business day after receipt.)
The foregoing property and/or funds, plus all interest, dividends and
other distributions and payments thereon (collectively the
"Distributions") received by Escrow Agent, less any property and/or
funds distributed or paid in accordance with this Escrow Agreement, are
collectively referred to herein as "Escrow Property."
2. INVESTMENT OF ESCROW PROPERTY
The Depositor-Agent is to select one of the following options, initial
the option selected and, if "(b)" is selected, insert the appropriate
information.
(a) Escrow Agent shall have no obligation to pay interest on
or to invest or reinvest any Escrow Property deposited or
received hereunder.
(b) Escrow Agent shall invest or reinvest Escrow Property,
without distinction between principal and income, in
accordance with the following (escrowed funds will be invested
only in investments permissible under SEC Rule 15c2-4):
The Bank of New York's Depository Reserve, until further
instruction.
Escrow Agent shall have no liability for any loss arising from
or related to any such investment other than in accordance
with paragraph 4 of the Terms and Conditions.
3. DISTRIBUTION OF ESCROW PROPERTY
Escrow Agent is directed to hold and distribute the Escrow Property in
the following manner:
At the closing time of the offering ("Closing Time"), Escrow Agent
shall apply the cash representing collected funds then being held by
Escrow Agent as part of the escrow fund for the account of the
subscribers with respect to whose purchase of Units such Closing is
being held, in accordance with the written direction of the
Depositor-Agent, at which time such amounts so applied shall no longer
be a deposit under this Agreement. In the event that funds have been
invested on behalf of such subscribers pursuant to paragraph (2),
Escrow Agent shall, within ten days after each Closing Time, return to
the Depositor-Agent, on behalf of such subscribers, the interest earned
thereon.
4. ADDRESSES
Notices, instructions and other communications shall be sent to Escrow
Agent, Corporate Trust Department, 000 Xxxxxxx Xxxxxx - 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, and to Depositor-Agent as follows:
Xxxxxxx Xxxxx KECALP L.P. 1999
c/o KECALP, Inc.
World Financial Center
South Tower- 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxxx X. Xxxxx
5. Distribution of Escrow Property Upon Termination
Upon termination of this Escrow Agreement, Escrow Property then held
hereunder shall be distributed as follows:
In the event that (a) on or before March 1, 1999 either (i) no Closing
contemplated by paragraph (3) shall have been consummated or (ii) as to
any subscriber, Escrow Agent shall have been advised in writing by the
Depositor-Agent that all conditions precedent to a Closing as to such
subscriber have not been satisfied, or (b) as to any subscriber, the
Issuer-Partnership shall have determined to reduce such subscriber's
subscription, then the Depositor-Agent shall promptly so advise in
writing Escrow Agent and authorize and direct in writing Escrow Agent
to return as promptly as practicable (i) in the case of the event
described in (a)(i), the Escrow Property to the Depositor-Agent for the
accounts of all of the subscribers, or (ii) in the case of an event
described in (a)(ii), the Escrow Property to the Depositor-Agent for
the accounts of such subscribers with respect to whom Escrow Agent
shall have received such written advice or whose subscriptions have
been reduced, as the case may be. In each case Escrow Agent shall so
return such funds with the interest earned on such funds.
In the event that (a) the Closing or Closings in accordance with
paragraph (3) above shall have been consummated with respect to all
subscribers, or (b) the amounts paid by or for the account of all named
subscribers to the Depositor-Agent and deposited with Escrow Agent
shall have been repaid to the Depositor-Agent on behalf of such
respective persons without deduction (other than as provided in
paragraph (6) below) and with or without interest by Escrow Agent as
provided in this paragraph, then, as to all such named subscribers,
Escrow Agent shall be relieved of all liabilities in connection with
the escrow deposits provided for herein with respect to all such
subscribers.
In any event, the obligations and liabilities of Escrow Agent hereunder
will terminate on the date which is fifteen business days after the
Closing Date and as to any amounts remaining in the escrow fund Escrow
Agent shall be entitled to refrain from taking any action until it has
been directed otherwise in writing by the Depositor-Agent, or by a
final judgment of a court of competent jurisdiction.
6. COMPENSATION
(a) At the time of execution of this Escrow Agreement, the
Depositor-Agent shall pay Escrow Agent an acceptance fee of $_______
plus 5% of the income earned while the account is in escrow.
(b) The Depositor-Agent shall pay an investment transaction fee of
$25.00 for each purchase or sale of a security (other than money market
securities) made by Escrow Agent hereunder.
(c) The Depositor-Agent shall be responsible for and shall reimburse
Escrow Agent upon demand for all expenses, disbursements and advances
incurred or made by Escrow Agent in connection with this Agreement.
II. TERMS AND CONDITIONS
1. The duties, responsibilities and obligations of Escrow Agent shall be
limited to those expressly set forth herein and no duties,
responsibilities or obligations shall be inferred or implied. Escrow
Agent shall not be subject to, nor required to comply with, any other
agreement to which any Depositor-Agent is a party, even though
reference thereto may be made herein, or to comply with any direction
or instruction (other than those contained herein or delivered in
accordance with this Escrow Agreement) from the Depositor-Agent or any
entity acting on its behalf. Escrow Agent shall not be required to, and
shall not, expend or risk any of its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder.
2. This Agreement is for the exclusive benefit of the parties hereto and
their respective successors hereunder, and shall not be deemed to give,
either express or implied, any legal or equitable right, remedy, or
claim to any other entity or person whatsoever.
3. If at any time Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial
or administrative process which in any way affects Escrow Property
(including but not limited to orders of attachment or garnishment or
other forms of levies or injunctions or stays relating to the transfer
of Escrow Property), Escrow Agent is authorized to comply therewith in
any manner as it or its legal counsel of its own choosing deems
appropriate; and if Escrow Agent complies with any such judicial or
administrative order, judgment, decree, writ or other form of judicial
or administrative process, Escrow Agent shall not be liable to any of
the parties hereto or to any other person or entity even though such
order, judgment, decree, writ or process may be subsequently modified
or vacated or otherwise determined to have been without legal force or
effect.
4. (a) Escrow Agent shall not be liable for any action taken or omitted or
for any loss or injury resulting from its actions or its performance or
lack of performance of its duties hereunder in the absence of gross
negligence or willful misconduct on its part. In no event shall Escrow
Agent be liable (i) for acting in accordance with or relying upon any
instruction, notice, demand, certificate or document from the
Depositor-Agent or any entity acting on behalf of the Depositor-Agent,
(ii) for any consequential, punitive or special damages, (iii) for the
acts or omissions of its nominees, correspondents, designees, subagents
or subcustodians, or (iv) for an amount in excess of the value of the
Escrow Property, valued as of the date of deposit.
(b) If any fees, expenses or costs incurred by, or any obligations owed
to, Escrow Agent hereunder are not promptly paid when due, Escrow Agent
may reimburse itself therefor from the Escrow Property and may sell,
convey or otherwise dispose of any Escrow Property for such purpose.
(c) As security for the due and punctual performance of any and all of
Depositor-Agent's obligations to Escrow Agent hereunder, now or
hereafter arising, Depositor-Agent hereby pledges, assigns and grants
to Escrow Agent a continuing security interest in and a lien on, the
Escrow Property and all Distributions thereon or additions thereto
(whether such additions are the result of deposits by Depositor-Agent
or the investment of Escrow Property). The security interest of Escrow
Agent shall at all times be valid, perfected and enforceable by Escrow
Agent against Depositor-Agent and all third parties in accordance with
the terms of this Escrow Agreement.
(d) Escrow Agent may consult with legal counsel at the expense of the
Depositor-Agent as to any matter relating to this Escrow Agreement, and
Escrow Agent shall not incur any liability in acting in good faith in
accordance with any advice from such counsel.
(e) Escrow Agent shall not incur any liability for not performing any
act or fulfilling any duty, obligation or responsibility hereunder by
reason of any occurrence beyond the control of Escrow Agent (including
but not limited to any act or provision of any present or future law or
regulation or governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or other wire
or communication facility).
5. Unless otherwise specifically set forth herein, Escrow Agent shall
proceed as soon as practicable to collect any checks or other
collection items at any time deposited hereunder. All such collections
shall be subject to Escrow Agent's usual collection practices or terms
regarding items received by Escrow Agent for deposit or collection.
Escrow Agent shall not be required, or have any duty, to notify anyone
of any payment or maturity under the terms of any instrument deposited
hereunder, nor to take any legal action to enforce payment of any
check, note or security deposited hereunder or to exercise any right or
privilege which may be afforded to the holder of any such security.
6. Escrow Agent shall provide to the Depositor-Agent monthly statements
identifying transactions, transfers or holdings of Escrow Property and
each such statement shall be deemed to be correct and final upon
receipt thereof by the Depositor-Agent unless Escrow Agent is notified
in writing to the contrary within thirty (30) business days of the date
of such statement.
7. Escrow Agent shall not be responsible in any respect for the form,
execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the
identity, authority or rights of persons executing or delivering or
purporting to execute or deliver any such document, security or
endorsement.
8. Notices, instructions or other communications shall be in writing and
shall be given to the address set forth in the "Addresses" provision
herein (or to such other address as may be substituted therefor by
written notification to Escrow Agent or the Depositor-Agent). Notices
to Escrow Agent shall be deemed to be given when actually received by
Escrow Agent's Corporate Trust Department. Escrow Agent is authorized
to comply with and rely upon any notices, instructions or other
communications believed by it to have been sent or given by the
Depositor-Agent or by a person or persons authorized by the
Depositor-Agent. Whenever under the terms hereof the time for giving a
notice or performing an act falls upon a Saturday, Sunday, or banking
holiday, such time shall be extended to the next day on which Escrow
Agent is open for business.
9. The Depositor-Agent shall be liable for and shall reimburse and
indemnify Escrow Agent and hold Escrow Agent harmless from and against
any and all claims, losses, liabilities, costs, damages or expenses
(including reasonable attorneys' fees and expenses) (collectively,
"Losses" ) arising from or in connection with or related to this Escrow
Agreement or being Escrow Agent hereunder (including but not limited to
Losses incurred by Escrow Agent in connection with its successful
defense, in whole or in part, of any claim of gross negligence of
willful misconduct on its part), provided, however, that nothing
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contained herein shall require Escrow Agent to be indemnified for
Losses caused by its gross negligence or willful misconduct.
10. (a) The Depositor-Agent may remove Escrow Agent at any time by giving
to Escrow Agent thirty (30) calendar days prior notice in writing
signed by the Depositor-Agent. Escrow Agent may resign at any time by
giving to the Depositor-Agent fifteen (15) calendar days prior written
notice thereof.
(b) Within ten (10) calendar days after giving the foregoing notice of
removal to Escrow Agent or receiving the foregoing notice of
resignation from Escrow Agent, the Depositor-Agent shall appoint a
successor Escrow Agent. If a successor Escrow Agent has not accepted
such appointment by the end of such 10-day period, Escrow Agent may, in
its sole discretion, deliver the Escrow Property to the Depositor-Agent
at the address provided herein or may apply to a court of competent
jurisdiction for the appointment of a successor Escrow Agent or for
other appropriate relief. The costs and expenses (including reasonable
attorneys' fees and expenses) incurred by Escrow Agent in connection
with such proceeding shall be paid by, and be deemed an obligation of,
the Depositor-Agent.
(c) Upon receipt of the identity of the successor Escrow Agent, Escrow
Agent shall either deliver the Escrow Property then held hereunder to
the successor Escrow Agent, less Escrow Agent's fees, costs and
expenses or other obligations owed to Escrow Agent, or hold such Escrow
Property (or any portion thereof), pending distribution, until all such
fees, costs and expenses or other obligations are paid.
(d) Upon delivery of the Escrow Property to successor Escrow Agent,
Escrow Agent shall have no further duties, responsibilities or
obligations hereunder.
11. (a) In the event of any ambiguity or uncertainty hereunder or in any
notice, instruction or other communication received by Escrow Agent
hereunder, Escrow Agent may, in its sole discretion, refrain from
taking any action other than retain possession of the Escrow Property,
unless Escrow Agent receives written instructions, signed by the
Depositor-Agent, which eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims between
the Depositor-Agent and the Issuer-Partnership and/or any other person
or entity with respect to any Escrow Property, Escrow Agent shall be
entitled, in its sole discretion, to refuse to comply with any and all
claims, demands or instructions with respect to such Escrow Property so
long as such dispute or conflict shall continue, and Escrow Agent shall
not be or become liable in any way to the Depositor-Agent for failure
or refusal to comply with such conflicting claims, demands or
instructions. Escrow Agent shall be entitled to refuse to act until, in
its sole discretion, either (i) such conflicting or adverse claims or
demands shall have been determined by a final order, judgment or decree
of a court of competent jurisdiction, which order, judgment or decree
is not subject to appeal, or settled by agreement between the
conflicting parties as evidenced in a writing satisfactory to Escrow
Agent or (ii) Escrow Agent shall have received security or an indemnity
satisfactory to it sufficient to hold it harmless from and against any
and all Losses which it may incur by reason of so acting. Escrow Agent
may, in addition, elect, in its sole discretion, to commence an
interpleader action or seek other judicial relief or orders as it may
deem in its sole discretion necessary. The costs and expenses
(including reasonable attorneys' fees and expenses) incurred in
connection with such proceeding shall be paid by, and shall be deemed
an obligation of, the Depositor-Agent.
12. This Agreement shall be interpreted, construed, enforced and
administered in accordance with the internal substantive laws (and not
the choice of law rules) of the State of New York. The Depositor-Agent
hereby submits to the personal jurisdiction of and agrees that all
proceedings relating hereto shall be brought in courts located within
the City and State of New York or elsewhere as Escrow Agent may select.
The Depositor-Agent hereby waives the right to trial by jury and to
assert counterclaims in any such proceedings. To the extent that in any
jurisdiction the Depositor-Agent may be entitled to claim, for itself
or its assets, immunity from suit, execution, attachment (whether
before or after judgment) or other legal process, each hereby
irrevocably agrees not to claim, and hereby waives, such immunity. The
Depositor-Agent waives personal service of process and consents to
service of process by certified or registered mail, return receipt
requested, directed to it at the address last specified for notices
hereunder, and such service shall be deemed completed ten (10) calendar
days after the same is so mailed.
13. Except as otherwise permitted herein, this Escrow Agreement may be
modified only by a written amendment signed by all the parties hereto,
and no waiver of any provision hereof shall be effective unless
expressed in a writing signed by the party to be charged.
14. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy
shall not preclude or inhibit the exercise of any additional rights or
remedies. The waiver of any right or remedy hereunder shall not
preclude the subsequent exercise of such right or remedy.
15. The Depositor-Agent hereby represents and warrants (a) that this Escrow
Agreement has been duly authorized, executed and delivered on its
behalf and constitutes a legal, valid and binding obligation and (b)
that the execution, delivery and performance of this Escrow Agreement
by the Depositor-Agent do not and will not violate any applicable law
or regulation.
16. The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or
enforceability or any other provision; and if any provision is held to
be enforceable as a matter of law, the other provisions shall not be
affected thereby and shall remain in full force and effect.
17. This Agreement shall constitute the entire agreement of the parties
with respect to the subject matter and supersedes all prior oral or
written agreements in regard thereto.
18. This Agreement shall terminate upon the distribution of all Escrow
Property from the Account. The provisions of these Terms and Conditions
shall survive termination of this Escrow Agreement and/or the
resignation or removal of Escrow Agent.
19. No printed or other material in any language, including prospectuses,
notices, reports, and promotional material which mentions "The Bank of
New York" by name or the rights, powers, or duties of Escrow Agent
under this Agreement shall be issued by any other parties hereto, or on
such party's behalf, without the prior written consent of Escrow Agent.
20. The headings contained in this Agreement are for convenience of
reference only and shall have no effect on the interpretation or
operation hereof.
21. This Escrow Agreement may be executed by each of the parties hereto in
any number of counterparts, each of which counterpart, when so executed
and delivered shall be deemed to be an original and all such
counterparts shall together constitute one and the same agreement.
22. This Escrow Agreement expressly sets forth all the duties of Escrow
Agent with respect to any and all matters pertinent hereto. No implied
duties or obligations shall be read into this Agreement against Escrow
Agent. Escrow Agent shall not be bound by the provisions of any
agreement among the other parties hereto except this Escrow Agreement.
23. Escrow Agent does not have any interest in the Escrow Property
deposited hereunder but is serving as escrow holder only and having
only possession thereof. The Issuer-Partnership shall pay or reimburse
Escrow Agent upon request for any transfer taxes or other taxes
relating to the Escrow Property incurred in connection herewith and
shall indemnify and hold harmless Escrow Agent any amounts that it is
obligated to pay in the way of such taxes. Any payments of income from
this Escrow Account shall be subject to withholding regulations then in
force with respect to United States taxes. The parties hereto will
provide Escrow Agent with appropriate W-9 forms for tax I.D. number
certifications, or W-8 forms for non-resident alien certifications. It
is understood that Escrow Agent shall be responsible for income
reporting only with respect to income earned or investment of funds
which are a part of the Escrow Property and is not responsible for any
other reporting. This paragraph and paragraph (9) shall survive
notwithstanding any termination of this Escrow Agreement or the
resignation of Escrow Agent.
IN WITNESS WHEREOF, each of the parties has caused this Escrow
Agreement to be executed by a duly authorized officer as of the day and year
first written above.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: _______________________________
(Authorized Signatory)
XXXXXXX XXXXX KECALP L.P. 1999
By: ________________________________
(Authorized Signatory)
THE BANK OF NEW YORK, as Escrow Agent
By: ________________________________
(Authorized Signatory)
