Exhibit 10.4
ESCROW AGREEMENT
THIS AGREEMENT is made and entered into as of ________________, 1999, among
THE CHASE MANHATTAN BANK, a New York corporation, with corporate trust offices
at 000 X. 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Escrow
Agent"), CAPITAL RESOURCE GROUP ONE, LLC, a Delaware limited liability company
("Capital"), and XXXXX, COUNTS & CO., INC., a New York corporation (the
"Placement Agent").
WHEREAS, Capital proposes to offer for sale to investors through the
Placement Agent and other selected broker-dealers on a "best efforts basis" One
Hundred and Fifty Million Dollars ($150,000,000) principal amount of 9.0% and
9.25% Asset Backed Certificates (the "Certificates") representing fractional
undivided interests in Senior Insurance Settlements Funding Trust 1999 (the
"Trust") originated by Capital, which Certificates will be issued in minimum
denomination of Five Thousand and No/100 Dollars ($5,000.00) and integral
multiplies of One Thousand and No/100 Dollars ($1,000.00) in excess thereof (the
"Offering").
WHEREAS, Capital, the Escrow Agent and the Placement Agent desire to
establish an escrow account into which the payments received from the persons
desiring to purchase Certificates will be deposited;
NOW, THEREFORE, in consideration of the premises and the covenants herein
contained, it is hereby agreed as follows:
1. Capital and the Placement Agent hereby appoint and designate The Chase
Manhattan Bank, as Escrow Agent for the purposes herein set forth, and The Chase
Manhattan Bank does hereby accept such appointment.
2. The parties hereto hereby establish an interest bearing escrow account
with the Escrow Agent, which escrow account shall be entitled "Capital Resource
Group One Escrow Account" (the "Escrow Account"). The Placement Agent shall
instruct subscribers to make, and the Escrow Agent shall only be required to
accept for deposit, checks, bank drafts or money orders for the subscription
price for the Certificates (the "Checks") payable to the order of "THE CHASE
MANHATTAN BANK ESCROW ACCOUNT FOR SENIOR INSURANCE SETTLEMENTS FUNDING TRUST
1999". Any Checks received that are made payable to a party other than "THE
CHASE MANHATTAN BANK ESCROW ACCOUNT FOR SENIOR INSURANCE SETTLEMENTS FUNDING
TRUST 1999" shall be returned to the Placement Agent.
3. Until the occurrence of a Termination Date (as hereinafter defined) the
Placement Agent agrees that it shall promptly deliver to the Escrow Agent all
monies, received from subscribers for the payment of the Certificates to the
Escrow Agent for deposit in the Escrow Account, together with a written account
of each sale, which account shall set forth, among other things, the
subscriber's name and address, the principal amount of the Certificates
purchased, the amount paid therefor, tax identification number and whether the
consideration received was in the form of a check, draft, or money order. All
monies so deposited in the Escrow Account are hereinafter referred to as the
"Escrow Amount".
4. The Offering shall begin with the commencement of the Offering and shall
terminate upon the earlier to occur of the following dates (each such date being
a "Termination Date"):
(a) the date upon which the Escrow Agent has received written notice
from Capital that subscriptions for One Hundred and Fifty Million and
No/100 Dollars ($150,000,000) principal amount of Certificates have been
received and accepted by Capital;
(b) Twelve (12) months from the effective date of the Registration
Statement filed with the Securities and Exchange Commission with respect to
the offering (the "Registration Statement"); or
(c) the date upon which a determination is made by Capital to
terminate the offering prior to the sale of Twenty Million and No/100
Dollars ($20,000,000) principal amount of Certificates (the "Minimum
Amount"). Such determination shall be evidenced in a written instrument
delivered to the Escrow Agent.
Capital shall notify the Escrow Agent of the effective date of the
Registration Statement in writing within five (5) business days of said
effective date.
5. The Escrow Agent is hereby authorized to forward each check for
collection and deposit the proceeds in the Escrow Account. The Escrow Agent
shall not be responsible or accountable for the proceeds of a Check until such
proceeds are received by the Escrow Agent as Collected Funds. For purposes of
this Agreement, the term "Collected Funds" shall mean all funds received by the
Escrow Agent which have cleared normal banking channels and are in the form of
cash. The Escrow Agent shall be under no duty or responsibility to enforce
collection of any Checks delivered to the Escrow Agent hereunder except that it
agrees to once again forward for collection any Check which has been returned
unpaid if requested to do so by the Placement Agent. The Escrow Agent is
authorized and permitted to receive Checks in the aggregate in excess of One
Hundred and Fifty Million and No/100 Dollars ($150,000,000) until it has
received written notice from Capital that subscriptions for One Hundred and
Fifty Million Dollars ($5,000,000) principal amount of Certificates have been
received and accepted by Capital.
The Escrow Agent shall promptly notify the Placement Agent of any Check
returned unpaid to the Escrow Agent whereupon the Placement Agent shall instruct
the Escrow Agent to either once again forward such Check for collection or
return such Check to the Placement Agent. If the Placement Agent instructs the
Escrow Agent to return such Check to the Placement Agent or if such Check has
been returned unpaid twice, the Escrow Agent shall return such Check to the
Placement Agent and the Placement Agent shall immediately reimburse the Escrow
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Agent for any costs and expenses incurred by the Escrow Agent as a result of
such returned Check.
In the event Capital has received the distribution of funds from a
subscription it has accepted and the Check representing such subscription is
subsequently returned unpaid, the Escrow Agent shall promptly notify the
Placement Agent of such non-payment whereupon the Placement Agent shall instruct
the Escrow Agent to either (i) once again forward such Check for collection or
(ii) return such Check to the Placement Agent and further instruct the Escrow
Agent in writing that such subscription is void and not accepted. In such event,
the Escrow Agent may debit the Escrow Account in the amount of such Check if the
Escrow Account has such funds available or, if funds are not available to debit
the Escrow Account in the amount of such Check, Capital and the Placement Agent
shall immediately reimburse the Escrow Agent for the amount of the uncollectible
funds so distributed. If at the termination of the Escrow Agreement the Escrow
Account has been debited to reimburse the Escrow Agent in the event a Check has
been returned unpaid and there are not sufficient funds in the Escrow Account to
pay back rejected subscriptions or to pay to Capital the amount of the
subscriptions accepted, Capital and the Placement Agent shall immediately pay to
the Escrow Agent an amount equal to the insufficiency of funds in the Escrow
Account in order to permit the Escrow Agent to pay back the rejected
subscriptions or to pay to Capital the amount of the subscriptions accepted.
The obligation of Capital and the Placement Agent to reimburse the Escrow
Agent for any uncollected funds or Checks shall survive the termination of the
Escrow Agreement.
If Capital rejects any subscription for which Capital has forwarded the
Check to the Escrow Agent, Capital shall deliver written notice to the Escrow
Agent of such rejection and if the Escrow Agent has already collected funds, the
Escrow Agent shall promptly issue a refund check to the rejected subscriber in
the amount of such funds collected from such subscriber. If Capital rejects any
subscription for which the Escrow Agent has not yet collected funds but has
submitted the subscriber's Check for collection, the Escrow Agent shall promptly
issue a check in the amount of the subscriber's Check to the rejected subscriber
after the Escrow Agent has cleared such funds. If the Escrow Agent has not yet
submitted a rejected subscriber's Check for collection, the Escrow Agent shall
promptly remit the subscriber's Check directly to the subscriber.
6. If, before the Minimum Amount has been reached, the Escrow Agent shall
have received written notice from Capital to release from the Escrow Account and
deliver to a particular subscriber his funds, the Escrow Agent shall forward to
such subscriber such funds in accordance with Section 5.
7. After Checks for the Minimum Amount have been deposited into the Escrow
Account and proceeds from such Checks have been received by the Escrow Agent as
Collected Funds, and upon receipt by the Escrow Agent of:
(i) notice from Capital in the form of Exhibit "A" attached hereto and
made a part hereof (the "Capital's Notice of Acceptance") the Escrow Agent
shall, from funds available therefor in the Escrow Account,
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(a) deliver to Capital by certified or official bank check or a
wire transfer or bank transfer at the direction of Capital payable in
immediately available funds an amount equal to the amount set forth in
Paragraph 8 of Capital's Notice of Acceptance as set forth therein;
(b) deliver to the Placement Agent by certified or official bank
check or a wire transfer or bank transfer at the direction of Capital
and the Placement Agent payable in immediately available funds an
amount equal to that set forth in Paragraph 6 of Capital's Notice of
Acceptance;
(c) deliver to The Chase Manhattan Bank, as trustee (the
"Trustee") of the Trust created pursuant to the Pooling and Servicing
Agreement dated as of ________, 1999, among the Trustee, Capital,
United Funds, LLC, and 21st Holdings, LLC (the "Pooling and Servicing
Agreement) by certified or official bank check or a wire transfer or
bank transfer at the direction of Capital and the Trustee payable in
immediately available funds an amount equal to that set forth in
Paragraph 7 of Capital's Notice of Acceptance for deposit in the
Liquidity Account (as defined in the Pooling and Servicing Agreement);
and
(d) deliver to each subscriber (if any) identified in Paragraph 2
or Paragraph 3 of Capital's Notice of Acceptance as having had his
subscription agreement rejected in whole or in part by Capital such
subscriber's original Check or an amount equal to the amount set forth
opposite such subscriber's name on Appendices II and III,
respectively, to Capital's Notice of Acceptance.
Prior to the receipt of the Minimum Amount pursuant to this Section 7,
Capital is aware and understands that Capital is not entitled to any funds
deposited into the Escrow Account, and no amounts deposited in the Escrow
Account prior to receipt of the Minimum Amount shall become the property of
Capital or any other entity, or be subject to the debts of Capital or any other
entity. After the Minimum Amount has been received, Capital may from time to
time continue to deposit Checks and draw down the funds in the manner set forth
in this Section 7. If funds remain in the Escrow Account after the occurrence of
a Termination Date and the Minimum Amount has been reached, the Escrow Agent has
the right to disburse such funds to Capital.
8. If (a) a determination is made by Capital to terminate the Offering
prior to the sale of the Minimum Amount, (b) the Minimum Amount has not been
received and collected by the Escrow Agent on or before the expiration of ninety
(90) days (subject to Capital's option to extend that period for thirty (30)
days) from the effective date of the Registration Statement, (c) the Minimum
Amount has been received but for whatever reason Capital and the Placement Agent
have not directed the Escrow Agent to disburse all or any part of the Escrow
Amount, or (d) funds deposited in the Escrow Account after the Minimum Account
has been reached have not been disbursed to Capital for a period of ninety (90)
days, the Escrow Agent shall promptly return to each subscriber such
subscriber's collected subscription funds.
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9. This Agreement shall become effective as of the date hereof, and shall
continue in force until the delivery of all funds held by the Escrow Agent
hereunder in accordance with Section 7 and 8 hereof and the occurrence of the
fifteenth (15th) day after the Termination Date.
10. Contemporaneously with the execution hereof, Capital shall pay to
Escrow Agent a base annual administration fee of Twenty-Five Thousand and No/100
Dollars ($25,000.00), which administration fee shall be deemed fully earned
immediately, regardless of the actual length of time during which this Agreement
is effective. In addition, Capital agrees to pay to Escrow Agent its customary
fees for the services rendered by it pursuant to the provisions of this
Agreement and will reimburse Escrow Agent for its reasonable expenses, including
reasonable attorney's fees, incurred in connection with the performance by it of
such services. The Escrow Agent's reasonable attorney's fees for time actually
spent, not exceeding ________ Thousand and No/100 Dollars ($_________) shall be
paid upon execution of this Agreement. Escrow Agent's current fee schedule is
attached hereto as Exhibit "B" (but such fees may be adjusted from time to time,
in which case Capital agrees to pay the adjusted fees). Notwithstanding anything
to the contrary contained in any other provision of this Agreement or any
instructions to the contrary from Capital, the Escrow Agent shall be entitled to
retain from any disbursements, other than those made under Sections 5, 6 and 8,
requested by Capital hereunder any outstanding fees and/or expenses due to it
hereunder and which have not been paid by Capital.
11. The Escrow Agent may invest the Escrow Amount only in such accounts or
investments as Capital may specify by written notice. Capital may only specify
investments in (i) bank accounts, (ii) bank money-market accounts, or (iii)
short-term securities issued or guaranteed by the U.S. Government. Any such
investments shall be made one (1) business day after the Escrow Agent has actual
knowledge that the funds received by the Escrow Agent have become collected
funds. Interest earned from such investment of the Escrow Amount shall be paid
to Capital or the subscriber, as the case may be, upon termination of this
Agreement, subject to any charges set forth in Section 10.
12. The Escrow Agent shall have no responsibility except for the
safekeeping and delivery of the amounts deposited in the Escrow Account in
accordance with this Agreement. No implied covenants or obligations on the part
of the Escrow Agent shall be read into this Agreement. The Escrow Agent shall
not be liable for any action taken, suffered or omitted to be done under this
Agreement or in connection with the amounts deposited in the Escrow Account,
except as a result of the Escrow Agent's gross negligence or willful misconduct.
The Escrow Agent is not a party to nor is it bound by, nor need it give
consideration to the terms or provisions of, even though it may have knowledge
of, (i) any agreement or undertaking by, between or among Capital and any other
party, except this Agreement, (ii) any agreement or undertaking that may be
evidenced by this Agreement, or (iii) any other agreements that may now or in
the future be deposited with the Escrow Agent in connection with this Agreement.
The Escrow Agent is not a party to, is not responsible for, and makes no
representations with respect to the offer, sale and distribution of the
Certificates. Capital and the Placement Agent covenant that they will not
commence any action against the Escrow Agent at law, in equity, or otherwise as
a result of any action taken or thing done by the Escrow Agent pursuant to this
Agreement, or for any disbursement made as authorized herein as a result of the
failure of Capital or the Placement
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Agent to give the notice within the times herein described. The Escrow Agent has
no duty to determine or inquire into any happening or occurrence or of any
performance or failure of performance of Capital or the Placement Agent or of
any other party with respect to agreements or arrangements with any other party.
If any questions, dispute or disagreement arises among one or more of the
parties hereto and/or any other party with respect to the funds deposited in
Escrow Account, the proper interpretation of this Agreement, the duties of the
Escrow Agent hereunder or the rights of the parties to this Escrow Agreement,
the Escrow Agent shall not be required to act and shall not be held liable for
refusal to act until the question or dispute is settled, and the Escrow Agent
has the absolute right at its discretion to do either or both of the following:
(a) withhold and/or stop all further performance under this Agreement
until the Escrow Agent is satisfied, by receipt of a written document in
form and substance satisfactory to the Escrow Agent and executed and
binding upon all interested parties hereto (who may include the
subscribers), that the question, dispute, or disagreement has been
resolved; or
(b) file a suit in interpleader and obtain by final judgment, rendered
by a court of competent jurisdiction, an order binding all parties
interested in the matter. In any such suit, the Escrow Agent shall be
entitled to recover from Capital and the Placement Agent, jointly and
severally, its reasonable attorneys' fees and costs.
The Escrow Agent shall never be required to post a bond in connection with
any services hereunder. The Escrow Agent may consult with counsel of its own
choice and shall have full and complete authorization and protection for any
action taken or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
13. The Escrow Agent may rely and shall be protected in acting or
refraining from acting upon any written notice, instruction, or request
furnished to it hereunder and believed by it to be genuine and to have been
signed or presented by the proper party or parties and to take statements made
therein as authorized and correct without any affirmative duty of investigation.
14. The Escrow Agent may resign by giving Capital and the Placement Agent
ten (10) days written notice of such resignation. During such ten (10) day
period Capital shall appoint a successor Escrow Agent. After the expiration of
such ten (10) day period and until a successor Escrow Agent named and accepts
its appointment, the Escrow Agent shall have no duty except to hold the Escrow
Amount uninvested and the Escrow Agent may file such appropriate proceeding to
have a court appoint a successor Escrow Agent.
15. Capital and the Placement Agent, jointly and severally, hereby agree to
indemnify the Escrow Agent for, and to hold it harmless against, any loss,
liability, or expense (including all legal expenses described in Section 12 or
incurred in enforcing any of the provisions of this Agreement or otherwise in
connection herewith) incurred without gross negligence or willful misconduct
(and Capital and the Placement Agent shall indemnify the Escrow Agent for such
losses, liabilities or expenses incurred with ordinary negligence) on the part
of the Escrow Agent, arising out of or in connection with its entering into this
Agreement and carrying out its duties hereunder, including the costs and
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expenses of defending itself against any claim of liability in the premises.
This covenant shall survive the termination of this Agreement.
The costs and expenses incurred in enforcing this right of indemnification shall
be paid by the Capital. Anything to the contrary notwithstanding, in no event
shall the Escrow Agent be liable for special, punitive, indirect, consequential
or incidental 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.
16. All payments and deliveries required to be made by the Escrow Agent to
Capital, the Placement Agent or the subscribers hereunder shall be made in
accordance with the provisions of Sections 7 and 8 hereof, and all payments and
deliveries so made shall be valid and effective to discharge the liability of
the Escrow Agent with respect thereto. Upon disbursement of all of the funds in
the Escrow Account in accordance with Sections 6, 7, 8, 11 and 14 hereof, the
Escrow Agent's responsibilities under this Agreement shall terminate. The Escrow
Agent shall have no liability under any circumstances with respect to the
application of the proceeds of any delivery of funds made by it.
17. The Chase Manhattan Bank agrees that Capital and the Placement Agent
may, by mutual written notice (setting forth the name and address of a
substitute Escrow Agent which shall be a national banking association) at any
time, given at least ten (10) days prior to the effective date of such
termination, remove The Chase Manhattan Bank, as Escrow Agent hereunder. Upon
receipt of such notice, The Chase Manhattan Bank shall forthwith, upon being
paid the compensation due to it hereunder, deliver to the national banking
association named in such notice all amounts on deposit in the Escrow Account
whereupon the responsibility of The Chase Manhattan Bank under this Agreement
shall terminate.
18. Any notice, authorization, request or demand required or permitted to
be given hereunder shall be in writing. The Escrow Agent shall be deemed to have
delivered and given notice or other item required to be delivered under this
Agreement upon the deposit thereof by the Escrow Agent in the U.S. Mail by
registered or certified mail postage prepaid or sent by Federal Express, next
day delivery, or by facsimile transmission and addressed as follows:
If to Capital:
Capital Resource Group One, LLC
c/o Xxxxxx X. XxXxxxx
000 X. Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Facsimile No. (000) 000-0000
If to the Placement Agent:
Xxxxx, Counts & Co., Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Facsimile No. (000) 000-0000
If to a subscriber:
to the address set forth in the cover letter(s)
referenced in Section 3 hereof
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Any notice, instruction or other item to the Escrow Agent shall be deemed
to have been given only when received by the Escrow Agent. Such notice may be
given by any accepted means of communication including but not limited to in
person, by telegram. or by U.S. Mail or sent by Federal Express, next day
delivery, or by facsimile transmission at its principal offices or at the
following address:
Corporate Trust Department
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CMFS
Facsimile No. (000) 000-0000
A United States Post Office registered or certified mail receipt showing
delivery as aforesaid or receipt from Federal Express showing delivery aforesaid
shall be conclusive evidence of the date and fact of delivery. Any party hereto
may change the address to which notices are to be delivered by giving to the
other parties not less than ten (10) days written notice thereof.
19. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their representative heirs, executors, administrators,
personal representatives, successors and assigns.
20. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
21. This Agreement has been executed and delivered in, and shall be
construed and enforced in accordance with, the laws of the State of New York.
22. This instrument evidences the entire agreement between the Escrow
Agent, Capital and the Placement Agent, and represents a merger of all preceding
agreements between the parties hereto pertaining to the subject matter hereof.
23. The Escrow Agent shall not be bound by any modification, amendment,
termination (except as provided in Section 8), cancellation, rescission or
supersession of this Agreement unless the same shall be in writing and signed by
all of the other parties hereto and, if
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its duties as the Escrow Agent hereunder are affected thereby, unless it shall
have given prior written consent thereto except as provided in Section 17.
IN WITNESS WHEREOF, the undersigned have caused this Escrow Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
THE CHASE MANHATTAN BANK CAPITAL RESOURCE GROUP ONE,
a New York corporation LLC
By: ______________________________ By: _______________________________
Xxxxxx X. XxXxxxx
Trust Officer President
XXXXX, COUNTS & CO., INC.
By:______________________________
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EXHIBIT A
December ___, 1999
Mr./Ms. ______________________
Corporate Trust Department
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Mr./Ms. ________________:
Reference is made to that certain Escrow Agreement dated effective as of
December ___, 1999 (the "Agreement") by and between you, Xxxxx, Counts & Co.,
Inc. and the undersigned. This letter is the "Capital's Notice of Acceptance"
referenced in Section 7(i) of the Agreement. All terms used herein shall have
the same meaning as defined in the Agreement.
1. The identity of those subscribers whose subscription agreements
have been accepted in whole by Capital and the amount of the check of each
such subscriber which was delivered to you are set forth in Appendix I
attached hereto and made a part hereof.
2. The name and address of each subscriber whose subscription
agreement was totally rejected by Capital and the amount of the Check of
such subscriber which was delivered to you, which amount is to be returned
to the subscriber, are set forth in Appendix II attached hereto and made a
part hereof.
3. The name and address of each subscriber whose subscription
agreement was accepted in part by Capital and the amount of the Check of
such subscriber which was delivered to you, and the amount to be returned
to each subscriber is set forth in Appendix III attached hereto and made a
part hereof.
4. The aggregate dollar amount of the Checks deposited in the Escrow
Account is $____________.
5. The aggregate dollar amount of interest earned and collected to
date from investments of the Collected Funds is $_______________.
6. The aggregate dollar amount to be delivered to Xxxxx, Counts & Co.,
Inc. is $_______________.
7. The aggregate dollar amount to be delivered to The Chase Manhattan
Bank for deposit in the Liquidity Account is $_______________.
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8. The aggregate dollar amount of the funds deposited in the Escrow
Account to be delivered to Capital is $____________.
9. Payment should be made in the following manner (if by wire transfer
specify wire instructions, if by bank transfer specify bank and account
number).
TO CAPITAL BY ____________________________.
TO THE PLACEMENT AGENT BY ___________________.
Each amount set forth herein is correctly stated.
Very truly yours,
CAPITAL RESOURCE GROUP ONE, LLC
By: ___________________________________
Its: ____________________________________
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APPENDIX I
TO
CAPITAL'S NOTICE OF ACCEPTANCE
Dated: ___________________, 1999
APPENDIX II
TO
CAPITAL'S NOTICE OF ACCEPTANCE
Dated: ___________________, 1999
APPENDIX III
TO
CAPITAL'S NOTICE OF ACCEPTANCE
Dated: ___________________, 1999
EXHIBIT B
TO
ESCROW AGREEMENT
THE CHASE MANHATTAN BANK ESCROW AGENT FEE SCHEDULE
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