Exhibit 10.04
ESCROW AGREEMENT
_______, 1997
The Chase Manhattan Bank
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxxxxx
Re: Xxxx Xxxxxx Portfolio Strategy Fund L.P.
Escrow Account
Gentlemen:
In accordance with arrangements made by Demeter Management
Corporation, a Delaware corporation (the "General Partner"), on behalf of Xxxx
Xxxxxx Portfolio Strategy 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) 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 closing
(as defined in the Prospectus, the "Closing") during the Offering Period (the
Closing is currently scheduled to be held on October 1, 1997), 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 the Closing. Upon receipt by you of joint
written notice from the General Partner and the Depositor on the date of the
Closing or thereafter 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 the 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 Paragraph 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 Paragraph 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 the Closing or the Depositor in
accordance with Sections 1 or 3 hereof, as the case may be.
3. If, during the 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 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 uncollectible (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 uncollectible. Subject to the foregoing, you shall
promptly notify the Parties of any uncollectible check, draft, or other
collection item deposited with you hereunder and shall promptly return such
uncollectible item to the Depositor, in which case you shall not be liable to
pay any interest on the subscription funds represented by such uncollectible
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,
XXXX XXXXXX PORTFOLIO STRATEGY 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
