EXHIBIT 10.04
ESCROW AGREEMENT
August __, 0000
Xxx Xxxxx Xxxxxxxxx Bank
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxxxxx
Re: Xxxxxx Xxxxxxx Tangible Asset Fund L.P.
ESCROW ACCOUNT
Gentlemen:
In accordance with arrangements made by Demeter Management
Corporation, a Delaware corporation (the "General Partner"), on behalf of Xxxxxx
Xxxxxxx Tangible Asset Fund L.P. (the "Partnership"), and Xxxx Xxxxxx Xxxxxxxx
Inc., the selling agent for the Partnership (the "Depositor"; the Partnership
and the Depositor being herein sometimes collectively referred to as the
"Parties" or, individually, as a "Party"), the Depositor shall: (i) deliver to
you, as Escrow Agent, all subscription funds (by the direct transfer of
immediately available funds into the non-interest bearing escrow account
established by you for the Partnership, for investment in your interest bearing
money market account) received by the Depositor from each subscriber
("Subscriber" or, collectively, the "Subscribers") during the "Offering Period"
(as described in the Partnership's Prospectus, as the same may be updated,
supplemented, and amended from time to time (the "Prospectus")) in connection
with the offering to the public of Units of Limited Partnership Interest of the
Partnership (the "Units") and (ii) also promptly transmit to the General Partner
a complete report of all funds deposited with you. You, as Escrow Agent, shall
hold such subscription funds together with any additions, substitutions, or
other financial instruments in which such funds may be invested or for which
such funds may be exchanged (collectively referred to herein as the "Fund"), IN
ESCROW upon the following terms:
1. (a) Following receipt by you of written notice from the General
Partner that the General Partner has rejected a Subscriber's subscription, in
whole or in part, during the Offering Period, you shall transmit to the
Depositor, as soon as practicable but in no event later than three business days
following receipt by you of such notice, the amount of such Subscriber's
subscription funds that shall have been deposited with you hereunder and
that the General Partner shall have notified you have been rejected and any
interest earned on the Fund and allocated to the rejected amount of such
subscription in accordance with Section 2 hereof. You shall at the same time
give notice to the Depositor of the amount of aggregate subscription funds
and/or interest so returned.
(b) On the second business day before the scheduled day of each
closing during the Offering Period (closings are currently scheduled to be held
on November 3, 1997, December 1, 1997, and January 2, 1998), the General Partner
shall notify you of the portion of the Fund that represents subscriptions to be
accepted by the General Partner for the Partnership equal to the number of Units
subscribed for multiplied by a price per Unit equal to 100% of the Net Asset
Value thereof as of the close of business on the last day of the month
immediately preceding such closing. Upon receipt by you of joint written notice
from the General Partner and the Depositor on the date of each such closing to
the effect that all of the terms and conditions with respect to the release of
subscription funds from escrow set forth in the Prospectus have been fulfilled,
you shall promptly pay and deliver to the Partnership the portion of the Fund
specified in the General Partner's prior instructions (excluding any interest
earned on the Fund and funds relating to rejected subscriptions).
(c) On the date of each closing, or as soon thereafter as
practicable, you shall transmit to the Depositor an amount representing: (i)
for each Subscriber whose subscription shall be accepted by the General Partner
in whole or in part, any interest earned on the Fund and allocated to the
accepted portion of such Subscriber's subscription in accordance with Section 2
hereof, and (ii) for each Subscriber whose subscription shall have been rejected
by the General Partner in whole or in part but whose subscription funds shall
not have been previously returned to the Depositor by you in accordance with the
first paragraph of this Section 1, such Subscriber's subscription funds that
shall have been deposited with you hereunder and that shall have been rejected
by the General Partner, and any interest earned on the Fund and allocated to the
rejected amount of such subscription in accordance with Section 2 hereof. You
shall at the same time give notice to the Depositor of the aggregate amount of
subscription funds and/or interest so returned.
(d) Notwithstanding subparagraph (a) of this Paragraph 1, upon
receipt by you during the Offering Period of written notice from the General
Partner that a Subscriber has been rejected (because good funds representing
payment for Units have not been deposited in a Subscriber's customer account
with the Depositor or because such Subscriber has provided bad funds in the form
of a bad check, draft, or otherwise to the Depositor), you shall transmit to the
Depositor, within three business days following receipt by you of such notice,
the amount of subscription funds deposited with you hereunder relating to that
amount (the portion of such Subscriber's subscription for which good funds have
not been provided) together with any interest earned on the Fund and allocated
to such portion of such a subscription in accordance with Section 2 hereof to
the date of such return, and shall immediately notify the General Partner of the
return of such funds.
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2. You shall hold the Fund (including any interest earned thereon) for
the account of the Partnership pending delivery to either the Partnership or the
Depositor, pursuant to Paragraphs 1 or 3 hereof, as the case may be. On each
day that subscription funds are transferred to you hereunder in immediately
available funds and receipt is confirmed before 2:00 P.M., New York City time,
you shall immediately invest such subscription funds solely in your interest
bearing money market account. If subscription funds are transferred to you in
immediately available funds and receipt is confirmed after 2:00 P.M., New York
City time, you shall so invest such funds on the next day. Interest earned on
the Fund shall be allocated by the Depositor among the subscribers
proportionately based on (A) the amount of their respective subscriptions on
deposit in the Fund and (B) the period of time from the date that their
respective subscriptions shall have been deposited in the Fund to the earlier of
the delivery of the Fund to the Partnership at a closing or the Depositor in
accordance with Sections 1 or 3 hereof, as the case may be.
3. If, during the Partnership's Offering Period, you are notified in
writing jointly by the Parties that the offering of Units for the Partnership
has been terminated, and that no First Closing will be held, you shall transmit
to the Depositor, as soon as practicable but in no event later than three
business days after receipt by you of such notice, an amount representing the
full amount of all subscription funds that shall have been deposited with you
hereunder, together with any interest earned on the Fund in accordance with
Paragraph 2 hereof. You shall at the same time give notice to the Depositor of
the aggregate amounts of subscription funds and/or interest so returned.
4. The Parties further agree with you as follows:
(a) Your duties and responsibilities shall be limited solely to those
expressly set forth in this Agreement and are ministerial in nature. You shall
neither be subject to nor obliged to recognize any other agreement between, or
other direction or instruction of, any or all of the Parties or any Subscriber
even though reference thereto may be made herein; PROVIDED, HOWEVER, that with
your written consent, this Agreement may be amended at any time or times by an
instrument in writing signed by the Parties.
(b) You are authorized, in your sole discretion, to disregard any and
all notices or instructions given by any of the Parties or by any other person,
firm, or corporation, EXCEPT only such notices or instructions as are hereunder
provided for and orders or process of any court entered or issued with or
without jurisdiction. If the Fund or any part thereof is at any time attached,
garnished, or levied upon under any court order or in case the payment,
assignment, transfer, conveyance, or delivery of the Fund 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 the Fund or any part thereof, then and in
any such event you are authorized, in your sole discretion, to rely upon and
comply with any such order, writ, judgment, or decree that you are advised by
legal counsel of your own choosing is binding upon you, and if you comply with
any such order, writ, judgment, or decree you shall not be liable to any of the
Parties or to any other person, firm, or corporation by reason of such
compliance even though
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such order, writ, judgment, or decree may be subsequently reversed, modified,
annulled, set aside, or vacated.
(c) You shall be fully protected in relying upon any written notice,
demand, certificate, document, or instrument believed by you in good faith to be
genuine and to have been signed or presented by the proper person or persons or
Party or Parties. The Parties shall provide you with a list of officers and
employees who shall be authorized to deliver instructions hereunder. You shall
not be liable for any action taken or omitted by you in connection herewith in
good faith and in the exercise of your own best judgment.
(d) Should any dispute arise with respect to the delivery, ownership,
right of possession, and/or disposition of the subscription funds deposited with
you hereunder, or should any claim be made upon any such subscription funds by a
third party, you, upon receipt of written notice of such dispute by any of the
Parties or by a third party, are authorized and directed to retain in your
possession all or any of such subscription funds until such dispute shall have
been settled either by mutual agreement of the parties involved or by final
order, decree, or judgment of any court in the United States.
(e) If for any reason funds are deposited in the escrow account other
than by transfer of immediately available funds, you shall proceed as soon as
practicable to collect checks, drafts, and other collection items at any time
deposited with you hereunder. All such collections shall be subject to the
usual collection agreement regarding items received by your commercial banking
department for deposit or collection; PROVIDED, HOWEVER, that if any check,
draft, or other collection item at any time deposited with you hereunder is
returned to you as being uncollectable (except by reason of an account closing),
you shall attempt a second time to collect such item before returning such item
to the Depositor as uncollectable. Subject to the foregoing, you shall promptly
notify the Parties of any uncollectable check, draft, or other collection item
deposited with you hereunder and shall promptly return such uncollectable item
to the Depositor, in which case you shall not be liable to pay any interest on
the subscription funds represented by such uncollectable item. In no event,
however, shall you be required or have a duty to take any legal action to
enforce payment of any check or note deposited hereunder.
(f) You shall not be responsible for the sufficiency or accuracy of
the form, execution, validity, or genuineness of documents now or hereafter
deposited with you hereunder, or for any lack of endorsement thereon or for any
description therein, nor shall you be responsible or liable in any respect on
account of the identity, authority, or rights of the persons executing or
delivering or purporting to execute or deliver any such document, or endorsement
or this Agreement. You shall not be liable for any loss sustained as a result
of any investment made pursuant to the instructions of the Parties or as a
result of any liquidation of an investment prior to its maturity or the failure
of the Parties to give you any instructions to invest or reinvest the Fund or
any earnings thereon.
(g) All notices required or desired to be delivered hereunder shall
be in writing and shall be effective when delivered personally on the day
delivered, or when
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given by registered or certified mail, postage prepaid, return receipt
requested, on the day of receipt, addressed as follows (or to such other address
as the party entitled to notice shall hereafter designate in accordance with the
terms hereof):
if to the Partnership or the General Partner:
Demeter Management Corporation
Two World Trade Center, 62nd Floor
New York, New York 10048
Attn: Xx. Xxxx X. Xxxxxx
President
if to the Depositor:
Xxxx Xxxxxx Xxxxxxxx Inc.
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Executive Vice President
in either case with a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
if to you:
The Chase Manhattan Bank
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxxxxx
Whenever, under the terms hereof, the time for giving a notice or performing
an act falls on a Saturday, Sunday, or legal holiday, such time shall be
extended to the next business day.
(h) The Depositor agrees to indemnify, defend, and hold you harmless
from and against, any and all loss, damage, tax, liability, and expense that may
be incurred by you arising out of or in connection with your duties hereunder,
except as caused by your gross negligence, bad faith, or willful misconduct,
including the legal costs and expenses of defending yourself against any claim
or liability in connection with your performance hereunder.
(i) You shall be paid by the Depositor a single fee of $3,000 in
advance for your services with respect to the first year from the date hereof or
any portion
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thereof in connection herewith. In addition, the Depositor shall pay an
additional $3,000 fee for any services provided hereunder in any subsequent
year.
(j) It is understood that you may at any time resign hereunder as
Escrow Agent by giving written notice of your resignation to the Parties at
their address set forth above at least 20 days prior to the date specified for
such resignation to take effect, and upon the effective date of such
resignation, all property then held by you hereunder shall be delivered by you
to such person as may be designated jointly by the Parties in writing, whereupon
all your obligations hereunder shall cease and terminate. If you shall resign
prior to the conclusion of the first 60 days of the Offering Period, you shall
pay back to the Depositor an amount equal to the product of $50 and the number
of days remaining until the 60th day of the Offering Period. If you shall
resign at or after the conclusion of the first 60 days of the Offering Period,
you shall have no obligation to pay any amount back to the Depositor. If no
successor Escrow Agent has been appointed or has accepted such appointment by
such date, all your obligations hereunder shall nevertheless cease and
terminate. Your sole responsibility thereafter shall be to keep safely all
property then held by you and to deliver the same to a person designated by the
Parties hereto or in accordance with the directions of a final order or judgment
of a court of competent jurisdiction.
5. This Agreement shall be governed by and construed in accordance with
the law of the State of New York and any action brought hereunder shall be
brought in the courts of the State of New York, sitting in the County of New
York.
6. The undersigned Escrow Agent hereby acknowledges and agrees to hold,
deal with, and dispose of, the Fund (including any interest earned thereon) and
any other property at any time held by the Escrow Agent hereunder in accordance
with this Agreement.
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If the foregoing Agreement is satisfactory to you, please so indicate by signing
at the place provided below.
Sincerely,
XXXXXX XXXXXXX TANGIBLE ASSET
FUND L.P.
By: Demeter Management Corporation
By:________________________________
Xxxx X. Xxxxxx
President
XXXX XXXXXX XXXXXXXX INC.
By:________________________________
Xxxx X. Xxxxxx
Executive Vice President
Accepted:
THE CHASE MANHATTAN BANK
By:________________________
X.X. Xxxxxxxx
Vice President
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