EXHIBIT 2(k)(i)
ESCROW AGREEMENT BETWEEN THE PEOPLE'S AVENGER FUND AND U.S. BANCORP XXXXX
XXXXXXX
EXHIBIT 2(k)(i)
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made and entered into on ___________, 2003 by and
between THE PEOPLE'S AVENGER FUND BUSINESS TRUST, a Nevada business trust (the
"Trust") and U.S. BANCORP XXXXX XXXXXXX, a Minnesota corporation (the "Escrow
Agent").
1. Offering of Securities. Reference is made to that certain
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prospectus dated ________, 2003 (the "Prospectus") constituting part of a
registration statement on Form N-2, as declared effective by the Securities and
Exchange Commission on ________, 2003, whereby the Trust, is offering (the
"Offering") for sale to investors (the "Subscribers") 50,000 investor shares at
a price of $5,000 per share (the "Investor Shares"). The parties hereto are
entering into this Agreement in accordance with the terms set forth in the
Prospectus. All capitalized terms or terms within quotations used herein that
are not otherwise defined shall have the meaning given to them in the
Prospectus.
2. Requirement for Escrow. The Prospectus provides that a minimum
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number of at least 1,000 Investor Shares totaling $5,000,000 must be sold by the
Trust on or before ________, 2003 (the "Initial Closing Date"). The Prospectus
also provides that all money received from the Offering will be placed in an
interest bearing Escrow Account (the "Escrow Account") and withdrawn for the
Trust's immediate use after the Initial Closing Date. In that regard, all
collected funds of the Subscribers received by the Trust shall be deposited
directly into the Escrow Account. The Trust shall advise the Escrow Agent in
writing at the time of each deposit into the Escrow Account of the name and
address of each Subscriber along with the number of the Investor Shares
subscribed for by each Subscriber, and the cash amount tendered by each
Subscriber.
3. Duty of the Escrow Agent. The sole duty of the Escrow Agent, other
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than as hereinafter specified, shall be to receive the proceeds of the Offering
and hold them subject to release, in accordance with this Agreement.
4. Release of the Proceeds and Termination. The Escrow Agent shall
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release the proceeds of the Offering upon receipt of appropriate written
instructions tendered by the Trust once it confirms that proceeds equal to at
least $5,000,000 have been received and deposited into the Escrow Account on or
before the Initial Closing Date. Upon the termination of the Offering as a
result of the failure of the Trust to receive at least $5,000,000 by the Initial
Closing Date, the Escrow Agent shall deliver all of the funds on deposit to the
Subscribers. In the event that proceeds totaling at least $5,000,000 have been
raised before the Initial Closing Date, such amount shall be delivered to the
Trust. Upon the complete disbursement from the Escrow Account by the Escrow
Agent to the Trust of the proceeds from the Offering in accordance with the
distribution terms hereinabove set forth, the Escrow Agent shall be relieved of
all liabilities in connection with the Escrow Account and this Agreement shall
terminate.
5. Liability of the Escrow Agent. The duties of the Escrow Agent
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hereunder will be limited to observance of the express provisions of this
Agreement. Furthermore, the Escrow Agent is not expected or required to be
familiar with the provisions of any other writing, understanding or agreement,
and shall not be charged with any responsibility or liability in connection with
the observance or non-observance of the provisions of such other writing,
understanding or agreement, and no implied covenant of any type whatsoever shall
be read into this Agreement. The Escrow Agent may rely and act upon any
instrument received by it pursuant to this Agreement which it reasonably
believes to be in conformity with the requirements of this Agreement and the
Escrow Agent shall not be responsible for determining the genuineness,
authenticity of authority from any such instrument or the person signing same.
The Escrow Agent will not be liable for any action taken or not taken by it
under the terms of this Agreement in the absence of fraud or gross negligence on
its part.
The further provisions shall govern the Escrow Agent's liabilities
hereunder:
(a) In receiving the proceeds collected from the Subscribers and
deposited by the Trust into the Escrow Account (the "Escrow Funds"), the Escrow
Agent acts only as a depository and thereby assumes no responsibility, except
pursuant to the terms of this Agreement.
(b) The Escrow Agent may act or refrain from acting in respect of
any matter covered by this Agreement in full reliance upon and with the advice
of counsel which may be selected by it, and shall be fully protected in so
acting or in refraining from acting upon the advice of such counsel.
Furthermore, the Escrow Agent may rely and shall be protected in acting upon any
writing that may be submitted to it in connection with its duties hereunder
without determining the genuineness, authenticity or due authority from any such
writing or the person signing same and shall have no liability or responsibility
with respect to the form, content or validity thereof.
(c) The Escrow Agent shall have no responsibility or liability
for any act or omission on its part, notwithstanding any demand or notice to the
contrary by the Trust or any other person or entity, all subject to the sole
limitation that the Escrow Agent exercises its best judgment.
Except as herein expressly provided, none of the provisions of this Agreement
shall require the Escrow Agent to expend or risk its own funds or otherwise
incur financial liability or expense in the performance of any of its duties
hereunder.
(d) The Escrow Agent is hereby authorized to comply with and obey
all orders, judgments, decrees or writs entered or issued by any court, and in
the event the Escrow Agent obeys or complies with any such order, judgment,
decree or writ, in whole or in part, it shall not be liable to the Trust or any
other parties to this Agreement, or to any other person or entity, by reason or
such compliance, notwithstanding that it shall be determined that any such
order, judgment, decree or writ be entered without jurisdiction or be invalid
for any reason or be subsequently reversed, modified, annulled, satisfied or
vacated.
(e) The Escrow Agent shall not be required to institute or defend
any action or legal process involving any matter referred to herein which in any
manner affects its duties or liabilities hereunder to take any other action with
reference to the Escrow Funds not specifically agreed to herein, and the Escrow
Agent shall not be responsible for any act or failure to act on its part except
in the case of its own fraud or gross negligence.
(f) Should any controversy arise between the Escrow Agent, the
Trust or between any other person or entity with respect to this Agreement, or
with respect to the ownership of or the right to receive any sums from the
Escrow Account, the Escrow Agent shall have the right to institute a plea of
intrepleader in any court of competent jurisdiction to determine the rights of
the parties. Should a plea of interpleader be instituted, or should the Escrow
Agent become involved in litigation in any manner whatsoever connected with or
pertaining to this Agreement or the Escrow Funds, the Trust hereby agrees to pay
the Escrow Agent, on demand, in addition to any charge made hereunder for acting
as escrow agent, reasonable attorneys' fees incurred by the Escrow Agent, and
any other disbursements, expenses, losses, costs, and damages in connection with
or resulting from such litigation.
6. Indemnification. The Trust hereby agrees to indemnify and hold the
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Escrow Agent harmless from and against any and all claims, loses, liabilities,
costs, damages, fees charges and expenses (including attorneys' fees) which the
Escrow Agent may incur or sustain by reason of its acting as Escrow Agent under
this Agreement, unless same shall result from the fraud or gross negligence of
the Escrow Agent.
7. Limitation of Liabilities. The Escrow Agent shall look only to the
Quarterly Income or the Founders Shares of the Trust, respectively, for any
payment under this Agreement and neither the Trustees nor any of the Trust's
officers, employees or agents, whether past, present or future, shall be
potentially liable therefore.
8. Compensation of the Escrow Agent. The Escrow Agent shall be
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entitled to receive compensation for its services hereunder in accordance with
its schedule of fees published from time to time and in effect at the time such
compensation is payable hereunder. A copy of the current fee schedule is
attached hereto as Exhibit A. The Escrow Agent shall also be entitled to
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reimbursement for any and all costs and expenses incurred in performing its
services hereunder, including without limitation, the reasonable fees and
expenses of any counsel retained by it in accordance with the terms of this
Agreement. Without relieving the Trust of any obligation to pay the Escrow
Agent the fees and expenses payable to it hereunder, the Escrow Agent is
authorized to pay and deduct its fees and expenses from the Escrow Funds.
9. Resignation. The Escrow Agent may resign as escrow agent at any
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time by giving the Trust at least 10 days' prior written notice of such
resignation. If on the effective date of such resignation, the Escrow Agent has
not received written instructions of appointment of a successor escrow agent,
the Escrow Agent may thereupon deposit all Escrow Funds and documents into the
registry of a court of competent jurisdiction. The parties hereto intend that a
substitute escrow agent will be appointed to fulfill the duties of the Escrow
Agent hereunder for the remaining term of this Agreement in the event of the
Escrow Agent's resignation, and the Trust will use its best efforts to promptly
appoint a substitute Escrow Agent who shall be bound by the terms and provisions
of this Agreement.
10. Termination and Amendment. This Agreement shall remain in effect
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until all Escrow Funds and any escrow documents are disbursed in accordance
herewith; provided that any escrow agent hereunder who resigns in accordance
with the terms hereof shall no longer be bound by this Agreement, but this
Agreement shall remain in effect, notwithstanding such resignation, for purposes
of determining the rights and duties of the Trust and any successor escrow
agent. No amendment or modification to this Agreement shall be in force or
effect unless signed by the parties hereto.
11. No Trusteeship. The Trust agrees that the Escrow Agent is acting
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solely as an escrowee hereunder and not as a trustee and that the Escrow Agent
has no fiduciary duties, obligations or liabilities under this Agreement.
12. Confidentiality. Except as required by applicable law, legal
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process or other legal compulsion, the Escrow Agent shall hold all information
relating to the transactions contemplated by this Agreement in strict confidence
and under no circumstance shall any of the terms and conditions or the
participants involved be disclosed, unless such disclosure is mandated by
applicable law.
13. Attorneys' Fees. In the event that it should become necessary for
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any party entitled hereunder to bring suit against any other party for
enforcement of the covenants contained herein, the parties hereby covenant and
agree that the party who is found to be in violation of this Agreement shall
also be liable to the other parties for all reasonable attorneys' fees and costs
of court incurred by such other parties.
14. Benefit. The terms and provisions of this Agreement shall be
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binding upon, inure to the benefit of and be enforceable by, the parties hereto
and their respective successors and permitted assigns.
15. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, or
by telecopy or electronic mail (e-mail), if to the Trust, addressed to Xx. Xxxx
X. Xxxxxxxxx at 0000 Xxxxx Xxxxx, Xxxx Xxxx, Xxxxxx 00000, telephone (503)
000-0000, fax (000) 000-0000, and e-mail xxxxxxxxxxxxxxxxxx@xxxxx.xxx; and if to
the Escrow Agent, addressed to Xx. Xxxxxxx X. Xxxxxxxxxx at 0000 Xxxxxxxxx
Xxxxxx, Xxxxx 000, Xx Xxxxx, Xxxxxxxxxx 00000, telecopier (000) 000-0000, and
e-mail xxxxxxxxxxx@00000.xxx.xxx. Any party may change its address for purposes
of receiving notices pursuant to this Agreement upon 10 days written notice.
16. Construction. Words of any gender used in this Agreement shall be
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held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
17. Waiver. No course of dealing on the part of any party hereto or
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its agents, or any failure or delay by any such party with respect to exercising
any right, power or privilege of such party under this Agreement or any
instrument referred to herein shall operate as a waiver thereof, and any single
or partial exercise of any such right, power or privilege shall not preclude any
later exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
18. Representations, Warranties and Agreements to Survive. All
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indemnity agreements set forth in this Agreement, as well as all
representations, warranties, covenants and other agreements set forth in this
Agreement shall remain operative and in full force and effect at the termination
of this Agreement, and any successor of the parties shall be entitled to the
benefit of the respective representations, warranties and agreements made
herein.
19. Cumulative Rights. The rights and remedies contained in this
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Agreement shall be cumulative and the exercise or partial exercise of any such
right or remedy shall not preclude the exercise of any other right or remedy.
20. Invalidity. In the event any one or more of the provisions
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contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement or any
such other instrument.
21. Headings. The headings used in this Agreement are for convenience
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and reference only and in no way define, limit, amplify or describe the scope or
intent of this Agreement, and do not effect or constitute a part of this
Agreement.
22. Excusable Delay. The parties shall not be obligated to perform and
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shall not be deemed to be in default hereunder, if the performance of a
non-monetary obligation required hereunder is prevented by the occurrence of any
of the following, other than as the result of the financial inability of the
party obligated to perform: acts of God, strikes, lock-outs, other
industrial disturbances, acts of a public enemy, war or war-like action (whether
actual, impending or expected and whether de jure or de facto), acts of
terrorists, arrest or other restraint of governmental (civil or military),
blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes,
fires, hurricanes, storms, floods, washouts, sink holes, civil disturbances,
explosions, breakage or accident to equipment or machinery, confiscation or
seizure by any government of public authority, nuclear reaction or radiation,
radioactive contamination or other causes, whether of the kind herein enumerated
or otherwise, that are not reasonably within the control of the party claiming
the right to delay performance on account of such occurrence.
23. No Third-Party Beneficiary. Any agreement to pay an amount and any
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assumption of liability contained in this Agreement, express or implied, shall
be only for the benefit of the undersigned parties and their respective
successors and assigns (as herein expressly permitted), and such agreements and
assumptions shall not inure to the benefit of the obligees or any other party,
whomsoever, it being the intention of the parties hereto that no one shall be or
be deemed to be a third-party beneficiary of this Agreement.
24. Governing law; Jurisdiction. This Agreement shall be governed by
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and construed in accordance with the laws of the State of California without
regard to any conflicts of laws provisions thereof. Each party hereby
irrevocably submits to the personal jurisdiction of the United States District
Court located in San Diego, California, as well as of the Superior Courts of the
State of California in San Diego County, California over any suit, action or
proceeding arising out of or relating to this Agreement. Each party hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
25. Entire Agreement. This instrument contains the entire
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understanding of the parties with respect to the subject matter hereof, and may
not be changed orally, but only by an instrument in writing signed by each of
the parties hereto.
26. Multiple counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
THE PEOPLE'S AVENGER FUND BUSINESS TRUST
By
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Xxxx X. Xxxxxxxxx, President
U.S. BANCORP XXXXX XXXXXXX
By
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Xxxxxxx X. Xxxxxxxxxx, Vice President
