EXHIBIT 10.1
ESCROW AGREEMENT
Escrow Agreement (this "Escrow Agreement") dated as of the effective
date (the "Effective Date") set forth on Schedule 1 attached hereto ("Schedule
1") by and among DB Commodity Index Tracking Fund, a Delaware statutory trust
(the "Issuer"), DB Commodity Services LLC, a Delaware limited liability
company (the "Managing Owner"), and ________________, as escrow agent
hereunder (the "Escrow Agent"). Capitalized terms used but not defined in this
Escrow Agreement shall have the meaning ascribed thereto in the prospectus of
the Issuer, including all exhibits thereto, as the same may be amended from
time to time (the "Prospectus").
WHEREAS, the Managing Owner serves as the sole managing owner of the Issuer
and has complete management authority over the Issuer;
WHEREAS, the Issuer has filed a registration statement on Form S-1 under the
Securities Act of 1933, as amended, with the Securities and Exchange
Commission, File No. 333-_____ (the "Registration Statement"), relating to the
subscription for and sale of "baskets" of shares of the Issuer, each basket
consisting of 200,000 shares of the Issuer at a purchase price of twenty-five
dollars ($25) per share, or an aggregate five million dollars ($5,000,000) per
basket (a "Basket"); and
WHEREAS, in compliance with Rule 15c2-4 under the Securities Exchange Act of
1934, as amended, the Issuer, the Managing Owner and the Depositor propose to
establish an escrow fund to be held by the Escrow Agent until the expiration
of the initial offering period described in the Registration Statement.
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment. The Issuer and the Managing Owner hereby appoint the Escrow
Agent as their escrow agent for the purposes set forth herein, and the Escrow
Agent hereby accepts such appointment under the terms and conditions set forth
herein.
2. Escrow Fund. All funds received by the Issuer in connection with the sale
of Baskets shall be deposited with the Escrow Agent (the "Escrow Deposit").
The Escrow Agent shall hold each Escrow Deposit and, subject to the terms and
conditions hereof, shall invest and reinvest each Escrow Deposit and the
proceeds thereof (the "Escrow Fund") as directed in Section 3. The Escrow
Agent has provided the Managing Owner with the instructions for making
deposits set forth on Schedule 1 attached hereto. Deposits shall be credited
to the appropriate account by the Escrow Agent as promptly as practicable but
in no event more than three days after receipt by the Escrow Agent.
3. Investment of Escrow Fund. The Escrow Fund shall be invested and reinvested
by the Escrow Agent only in U.S. Treasury obligations or any other investment
specified by the Managing Owner that is consistent with the provisions of the
federal securities laws.
4. Disposition and Termination. The Managing Owner agrees to notify the Escrow
Agent in writing of the termination date of the initial offering period
described in the Registration Statement (the "Offering Closing Date") and
whether or not the Issuer received subscriptions in an amount equal to or
greater than the Minimum Subscription Amount. The term "Minimum Subscription
Amount" means an aggregate amount of fifty million dollars ($50,000,000), or
ten (10) Baskets. Upon receipt of such written notification the following
procedure will take place.
(i) If the Issuer has received subscriptions for the Minimum Subscription
Amount by the Offering Closing Date, the Escrow Fund will be promptly
paid to or credited to the account of, or otherwise transferred to the
Issuer pursuant to written instructions from the Managing Owner on
behalf of the Issuer.
(ii) If the Issuer has not received subscriptions for the Minimum
Subscription Amount by the Offering Closing Date, the Escrow Agent shall
be provided with a list containing the amount received from each
subscriber for Baskets whose funds have been deposited with the Escrow
Agent (with respect to each such subscriber the "Subscriber Investment
Amount") and the name, address and Taxpayer Identification Number
("TIN") of each such subscriber. The Escrow Agent must receive an
originally executed W-9 or W-8 I.R.S. form for each subscriber who
deposits funds into the Subscription Escrow Account. In addition, the
Issuer shall calculate the interest earned on each such Subscriber
Investment Amount as of the Offering Closing Date and provide such
information to the Escrow Agent. The aggregate of all Subscriber
Investment Amounts and interest thereon shall be equal to the amount of
the Escrow Fund on the Offering Closing Date. The Escrow Agent shall
distribute to each such subscriber the appropriate Subscriber Investment
Amount and interest thereon pursuant to joint written instructions of
the Managing Owner, on behalf of the Issuer, as promptly as practicable
but in no event more than seven (7) Business Days (as hereinafter
defined) after the Offering Closing Date.
(iii) The Managing Owner, on behalf of the Issuer, may reject any subscription
for any reason or for no reason. Subscribers may, under certain
circumstances, rescind their subscriptions. If the Managing Owner
rejects any subscription for which the Escrow Agent has already
collected funds, or in the event that a subscriber rescinds its
subscription in conformity with the requirements of the North American
Securities Administrators Association Inc. Guidelines for Registration
of Commodity Pool Programs, which rescission has been approved by the
Managing Owner and the Managing Owner has notified the Escrow Agent
thereof, the Escrow Agent shall promptly issue a refund check or wire
transfer (if the Managing Owner provides the Escrow Agent with
directions and wire instructions) to the subscriber, excluding any
interest thereon, in the amount of the original subscription amount.
Upon delivery of each Escrow Fund to the Issuer or the applicable subscribers,
as the case may be, by the Escrow Agent, this Escrow Agreement shall terminate
with respect to such Escrow Fund, subject to the provisions of Section 8.
5. Escrow Agent. The Escrow Agent undertakes to perform only such duties as
are expressly set forth herein and no duties shall be implied. The Escrow
Agent shall have no liability under and no duty to inquire as to the
provisions of any agreement other than this Escrow Agreement. The Escrow Agent
may rely upon and shall not be liable for acting or refraining from acting
upon any written notice, instruction or request furnished to it hereunder and
reasonably believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall be under no duty to
inquire into or investigate the validity, accuracy or content of any such
document. The Escrow Agent shall have no duty to solicit any payments which
may be due it or the Escrow Fund. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith and without gross negligence or
willful misconduct. The Escrow Agent may execute any of its powers and perform
any of its duties hereunder directly or through agents or attorneys (and shall
be liable only for the careful selection of any such agent or attorney) and
may consult with counsel, accountants and other skilled persons carefully
selected and retained by it. The Escrow Agent shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the advice or
opinion of any such counsel, accountants or other skilled persons. In the
event that the Escrow Agent shall be uncertain as to its duties or rights
hereunder
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or shall receive instructions, claims or demands from any party hereto which,
in its opinion, conflict with any of the provisions of this Escrow Agreement,
it shall be entitled to refrain 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 by all of the other parties hereto or by a final order or
judgment of a court of competent jurisdiction. Anything in this Escrow
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.
6. Succession. The Escrow Agent may resign and be discharged from its duties
or obligations hereunder by giving thirty (30) days advance notice in writing
of such resignation to the other parties hereto specifying a date when such
resignation shall take effect. The Escrow Agent shall have the right to
withhold an amount equal to any amount due and owing to the Escrow Agent, plus
any costs and expenses the Escrow Agent shall reasonably believe may be
incurred by the Escrow Agent in connection with the termination of the Escrow
Agreement. Any corporation or association into which the Escrow Agent may be
merged or converted or with which it may be consolidated, or any corporation
or association to which all or substantially all the escrow business of the
Escrow Agent's corporate trust line of business may be transferred, shall be
the Escrow Agent under this Escrow Agreement without further act.
7. Fees. The Managing Owner and the Issuer agree jointly and severally to (i)
pay the Escrow Agent upon execution of this Escrow Agreement and from time to
time thereafter reasonable compensation for the services to be rendered
hereunder, which unless otherwise agreed in writing shall be as described in
Schedule 1 attached hereto, and (ii) pay or reimburse the Escrow Agent upon
request for all reasonable and appropriately evidenced expenses, disbursements
and advances, including reasonable attorney's fees and expenses, incurred or
made by it in connection with the preparation, execution, performance,
delivery, modification and termination of this Escrow Agreement.
8. Indemnity. The Managing Owner and the Issuer shall jointly and severally
indemnify, defend and save harmless the Escrow Agent and its directors,
officers, agents and employees (the "Indemnitees") from all loss, liability or
expense (including reasonable attorney's fees and expenses) arising out of or
in connection with (i) the Escrow Agent's execution and performance of this
Escrow Agreement, except in the case of any Indemnitee, to the extent that
such loss, liability or expense is due to the gross negligence or willful
misconduct of such Indemnitee, or (ii) such Indemnitee's following any
instructions or other directions reasonably believed by such Indemnitee to be
from the Managing Owner or the Issuer, except to the extent that the Escrow
Agent's following any such instruction or direction is expressly forbidden by
the terms hereof. The parties hereto acknowledge that the foregoing
indemnities shall survive the resignation or removal of the Escrow Agent or
the termination of this Escrow Agreement. The parties hereby grant the Escrow
Agent a lien on, right of set-off against and security interest in each Escrow
Fund for the payment of any claim for indemnification, compensation, expenses
and amounts due hereunder.
9. TINs. The Managing Owner and the Issuer each represent (severally and not
jointly) that its correct TIN assigned by the Internal Revenue Service ("IRS")
any other taxing authority is set forth in Schedule 1. Upon execution of this
Escrow Agreement, the Managing Owner and the Issuer shall provide the Escrow
Agent with a fully executed W-8 or W-9 ITS form, which shall include the
Managing Owner's and the Issuer's TIN. In the case of payments of interest or
income to Subscribers directly, as mentioned in Section 4(ii), Subscriber must
also remit their respective W-9 forms (or W-8 if foreign), to the Escrow Agent
to prevent any backup withholding tax. All interest or other income earned
under the Escrow Agreement shall be allocated and/or paid as directed in a
written direction of the Managing Owner and the Issuer and reported by the
recipient to the Internal Revenue Service or any other taxing
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authority. Notwithstanding such written directions, Escrow Agent shall report
and, as required withhold any taxes as it determines may be required by any
law or regulation in effect at the time of the distribution. In the absence of
timely direction, all proceeds of the Escrow Fund shall be retained in the
Escrow Fund and reinvested from time to time by the Escrow Agent as provided
in Section 3. In the event that any earnings remain undistributed at the end
of any calendar year, Escrow Agent shall report to the Internal Revenue
Service or such other authority such earnings as it deems appropriate or as
required by any applicable law or regulation or, to the extent consistent
therewith, as directed in writing by the Issuer. In addition, the Escrow Agent
shall withhold any taxes it deems appropriate and shall remit such taxes to
the appropriate authorities.
10. Notices. All communications hereunder shall be in writing and shall be
deemed to be duly given and received:
(i) upon delivery if delivered personally or upon confirmed transmittal if by
facsimile;
(ii) on the next Business Day if sent by overnight courier; or
(iii) four (4) Business Days after mailing if mailed by prepaid registered
mail, return receipt requested, to the appropriate notice address set forth on
Schedule 1 or at such other address as any party hereto may have furnished to
the other parties in writing by registered mail, return receipt requested.
In the event that the Escrow Agent, in its sole discretion, shall determine
that an emergency exists, the Escrow Agent may use such other means of
communication as the Escrow Agent deems appropriate. "Business Day" shall mean
any day other than a Saturday, Sunday or any other day on which the Escrow
Agent located at the notice address set forth on Schedule 1 is authorized or
required by law or executive order to remain closed.
11. Security Procedures. In the event funds transfer instructions are given
(other than in writing at the time of execution of this Escrow Agreement, as
indicated in Schedule 1 attached hereto), 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 attached hereto ("Schedule 2"), and the Escrow Agent may rely upon
the confirmation of anyone purporting to be the person or persons so
designated. The persons and telephone numbers for call-backs may be changed
only by notice in accordance with Section 10. If the Escrow Agent is unable to
contact any of the authorized representatives identified in Schedule 2, the
Escrow Agent is hereby authorized to seek confirmation of such instructions by
telephone call-back to any one or more of the executive officers of the
Managing Owner ("Executive Officers"), which shall include the titles of
[[Managing Director, Chief Executive Officer, Director or Treasurer]], as the
Escrow Agent may select. Such "Executive Officer" shall deliver to the Escrow
Agent a fully executed Incumbency Certificate, and the Escrow Agent may rely
upon the confirmation of anyone purporting to be any such officer. The Escrow
Agent and the beneficiary's bank in any funds transfer may rely solely upon
any account numbers or similar identifying numbers provided by the Managing
Owner to identify (i) the beneficiary, (ii) the beneficiary's bank, or (iii)
an intermediary bank. The Escrow Agent may apply any of the escrowed funds for
any payment order it executes using any such identifying number, even when 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. The parties to this Escrow Agreement acknowledge
that these security procedures are commercially reasonable.
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12. Miscellaneous. The provisions of this Escrow Agreement may be waived,
altered, amended or supplemented, in whole or in part, only by a writing
signed by all of the parties hereto. Neither this Escrow Agreement nor any
right or interest hereunder may be assigned in whole or in part by any party,
except as provided in Section 6, without the prior consent of the other
parties. This Escrow Agreement shall be governed by and construed under the
laws of the State 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 the courts
located in the State of New York. The parties further hereby waive any right
to a trial by jury with respect to any lawsuit or judicial proceeding arising
or relating to this Escrow Agreement. No party to this Escrow Agreement is
liable to any other party for losses due to, or if it is unable to perform its
obligations under the terms of this Escrow Agreement because of, acts of God,
fire, floods, strikes, equipment or transmission failure, or other causes
reasonably beyond its control. This Escrow Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Remainder of page intentionally left blank. Signature page follows.
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the Effective Date.
[____________________________],
as Escrow Agent
By:__________________________________
Name:
Title:
DB COMMODITY SERVICES LLC,
as Managing Owner
By:__________________________________
Name:
Title:
DB COMMODITY INDEX TRACKING FUND,
as Issuer
By: DB Commodity Services LLC, its sole
Managing Owner
By:__________________________________
Name:
Title:
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Schedule 1
Effective Date: May __, 2005
Name of Issuer: DB Commodity Index Tracking Fund
Issuer Notice Address: c/o DB Commodity Services LLC
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: _______________________
Issuer TIN: [___________]
Wiring Instructions: [__________]
Name of Managing Owner: DB Commodity Services LLC
Managing Owner Notice Address: 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: _______________________
Managing Owner TIN: [___________]
Wiring Instructions: [___________]
Escrow Agent notice address: [________________________]
_______________________
_______________________
Attention: __________________
Fax No.: (___) ____-______
Deposit Instructions: [________________________]
ABA Routing No. _________________
Account No. ______________________
For Further Credit to: DB Commodity Index
Tracking Fund Subscription
Attention: ____________, Phone(___) ___-____
Escrow Agent's compensation:
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Schedule 2
Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Funds Transfer Instructions
-----------------------------------------------------------
If to the Managing Owner:
Name Telephone Number
1. ______________________ _______________________
2. ______________________ _______________________
3. ______________________ _______________________
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