ESCROW AGREEMENT
THIS AGREEMENT, dated as of October __, 1997, is made by and among
CAPITAL PREFERRED YIELD FUND - V, L.P., a Delaware limited partnership (the
"Partnership"), CAI EQUIPMENT LEASING VI CORP., a Colorado corporation, the
general partner of the Partnership (the "General Partner"), CAI SECURITIES
CORPORATION, a California corporation (the "Selling Agent") and Bank One,
Colorado, N.A., a national banking association (the "Agent"). All terms not
otherwise defined herein shall have the meaning set forth in Article One of the
Partnership's Amended and Restated Agreement of Limited Partnership, as set
forth in Exhibit A to the Prospectus (as defined below).
Recitals
A. The Partnership proposes to offer for sale a maximum of 500,000
units of Class A Limited Partnership Interest (the "Units") at a price of $100
per Unit, with a minimum subscription of ten Units for Individual Retirement
Accounts, Xxxxx Plans and Employee Benefit Plans, and twenty-five Units for all
other investors, with additional purchases in multiples of one Unit, pursuant to
a registration statement on Form S-1 (Registration No. __________) filed with
the Securities and Exchange Commission (the "Registration Statement").
B. Each subscriber (a "Subscriber") will be required either to (i)
execute and deliver a Subscription Agreement (the "Subscription Agreement"), in
the form set forth as Exhibit C to the Prospectus contained in the Registration
Statement (the "Prospectus") (a copy of which Prospectus will be delivered to
the Agent upon effectiveness of the Registration Statement with the Securities
and Exchange Commission), or (ii) otherwise agree to the terms of such
Subscription Agreement in accordance with the terms thereof, and in either case
to make a contribution of $100 for each Unit subscribed for (a "Contribution").
C. All Contributions received from Subscribers prior to the Closing
will be placed immediately into a segregated interest-bearing account (the
"Escrow Account") with the Agent until such time as the release or return of the
Contributions is required pursuant to Section 4.
D. The Partnership desires the Agent to hold all Contributions in the
Escrow Account.
E. The Partnership and Agent agree and intend that the duties and
obligations of the Agent are only those specifically set forth in this
Agreement.
Agreement
In consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, the Partnership, the General Partner, the Selling Agent and the
Agent hereby agree, for the benefit of the Partnership and the Subscribers, as
follows:
1. Appointment of Agent. The parties hereby appoint the Agent as escrow
agent in accordance with the terms and conditions set forth herein and the Agent
hereby accepts such appointment.
2. Escrow. Prior to the Closing, Contributions will be made by
Subscribers in the form of checks payable to "Capital Preferred Yield Fund - V,
L.P., Escrow Account." Contributions shall be promptly transmitted by the
broker-dealers who have executed the Selling Dealer Agreement (the "Selling
Dealers") to the Agent for deposit into the Escrow Account. All Contributions
deposited into the Escrow Account and not yet released to the Partnership in
accordance with this Agreement are hereinafter referred to as "Escrowed
Contributions." Each transmittal for deposit into the Escrow Account shall be
accompanied by: (i) a "batch sheet" showing the total Contributions contained in
such transmittal and the total Contributions deposited into escrow to date; and
(ii) a Subscription Agreement executed by the Subscriber or the Selling Dealer
(including a Form W-9 for the Subscriber).
3. Investment of Escrowed Contributions. The Agent shall invest the
Escrowed Contributions for the benefit of the Subscribers in bank accounts,
including savings accounts and bank money market accounts, short-term
certificates of deposit issued by a bank having a net worth of at least
$10,000,000 or short-term securities issued or guaranteed by the United States
government. The following securities shall not be permissible investments: (a)
money market funds; (b) corporate equity or debt securities; (c) repurchase
agreements; (d) banker's acceptances; (e) commercial paper; and (f) municipal
securities. Investments shall begin earning interest on the first business day
following the date upon which Escrowed Contributions are deposited by the Agent.
All interest earned on Escrowed Contributions ("Escrowed Interest") shall be
reinvested in the same manner as the Escrowed Contributions.
4. Conditions to Release of Escrowed Contributions. The obligation of
the Agent to make disposition of, and the right of the Partnership to receive
Escrowed Contributions and Escrowed Interest, shall be subject to the following
conditions:
(a) A minimum of 12,000 Units shall have been
subscribed for (the "Minimum Offering") and the Agent shall be holding
(or shall have previously held) Escrowed Contributions representing the
Minimum Offering as of a date 10 business days prior to the Closing
Date (the "Minimum Offering Date").
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(b) On the Closing Date there shall have been
furnished to the Agent a certificate dated as of such date (the
"Certificate"), executed by the President or a Vice President of the
General Partner, and by the General Partner on behalf of the
Partnership, stating:
(i) that the Escrowed Contributions held (or
previously held) by the Agent represent the sale of not less
than the Minimum Offering; and
(ii) that the General Partner has complied with
all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(c) In addition to the Certificate, two days prior to
the Closing Date there shall have been furnished to the Agent
instructions (the "Instructions"), executed by the President or a Vice
President of the Selling Agent, and by the General Partner on behalf of
the Partnership, stating:
(i) the date and time of the Closing Date
and the place and designated accounts to which the Escrowed
Contributions shall be transmitted in accordance with Section
5;
(ii) the amount of the Sales Commissions to be
paid to the Selling Dealers on the Closing Date and the
designated accounts to which such amount shall be transmitted;
(iii) the amount of the Dealer-Manager Fee to be
paid to the Selling Agent on the Closing Date and the
designated account to which such amount shall be transmitted;
and
(iv) the amount of Escrowed Interest and the
designated account to which such amount shall be transmitted.
(d) In no event shall Escrowed Contributions be
released until such funds have cleared the banking system.
5. Disposition of Escrowed Contributions and Escrowed Interest. The
Agent shall make disposition of the Escrowed Contributions and any Escrowed
Interest as follows:
(a) If, prior to the Termination Date, the Agent has
been provided with the Certificate, on such dates and at such times and
places as shall be stated in the Instructions, the Agent shall deliver
to the Partnership, by wire transfer in immediately available funds to
an account designated in the Instructions, an amount equal to the
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aggregate amount of the Escrowed Contributions held in the Escrow
Account as of the Minimum Offering Date, less the amounts to be
transferred by the Agent pursuant to Sections 5(b), (c) and (d) below.
(b) On the Closing Date, the Agent shall deliver to
the Selling Dealers, by wire transfer in immediately available funds,
to accounts designated in the Instructions, an amount equal to the
Sales Commissions payable to the Selling Dealers with respect to the
aggregate amount of Escrowed Contributions to be delivered to the
Partnership on such Closing Date.
(c) On the Closing Date, the Agent shall deliver to
the Partnership, by wire transfer in immediately available funds, to
the account specified in the Instructions, an amount equal to the
Escrowed Interest with such amount to be remitted by the Partnership to
Subscribers on a pro rata basis based upon the time such Subscriber's
Contributions have been held in the Escrow Account.
(d) On the Closing Date, the Agent shall deliver to
the Selling Agent, by wire transfer in immediately available funds, to
an account designated in the Instructions, an amount equal to the
Dealer-Manager Fee payable to the Selling Agent with respect to the
aggregate amount of Escrowed Contributions to be delivered to the
Partnership on such Closing Date.
(e) The Offering will commence on the date of the
Prospectus and is expected to terminate 24 months after that date
subject to re-registration with applicable state securities
administrators, if required, after the initial 12 months. If, by the
Termination Date, the Agent has not been provided with the Certificate
or has received a notice from such parties that the Offering has
otherwise been terminated prior to such time, then any Escrowed
Contributions will be released from escrow and returned to the
Subscribers, together with any interest earned thereon. In this event,
the amount of interest distributable to each Subscriber shall be
determined by the Selling Agent by applying the weighted average per
diem rate of interest to each Subscriber's Contribution for the period
of time beginning on the day such Subscriber's Contribution was
invested by the Agent and ending on the date escrow is terminated. This
information shall be provided to the Agent in writing in order to
facilitate the Agent's issuance of Forms 1099 in accordance with
Section 5(h).
(f) Contributions deposited in the Escrow Account may
not be withdrawn by Subscribers. If a Subscriber's Subscription
Agreement is rejected by the General Partner for any reason, such
Subscriber's Contribution will be promptly returned, together with any
interest earned thereon computed by the Selling Agent as provided in
Section 5(e).
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(g) On or before the Closing Date, the Selling Agent
shall deliver to the Agent a certificate of its authorized officer
stating that the Selling Agent or the Selling Dealers have received
confirmation of the tax identification number or social security
number, in accordance with the then applicable requirements of the
Internal Revenue Service, from each of the Persons to be admitted as
holders of Units on such Closing Date.
(h) If the Minimum Offering is achieved, the Selling
Agent shall include the distribution of Escrowed Interest to the
Subscribers as a distribution to be reported to each Subscriber on a
Form K-1. If the Minimum Offering is not achieved, the Agent shall
provide to each Subscriber a Form 1099 setting forth the amount of
Escrowed Interest paid to that Subscriber.
6. Maintenance of Records. The Agent shall maintain accurate
records of all transactions hereunder. Promptly after the termination of the
Escrow Account, or as may reasonably be requested by the General Partner at any
time or from time to time before such termination, the Agent shall provide the
Partnership with a complete copy of such records, certified by the Agent to be a
complete and accurate account of all such transactions as of the date thereof.
The authorized representatives of the General Partner shall also have access to
such books and records at all reasonable times during normal business hours upon
reasonable notice to the Agent.
7. Exculpation and Indemnification of Agent.
(a) The Agent shall have no duties or
responsibilities other than those expressly set forth herein. The Agent
shall have no duty to enforce any obligation of any person to make any
payment or delivery, or to direct or cause any payment or delivery to
be made, or to enforce any obligation of any person to perform any
other act. The Agent shall be under no liability to any party hereto or
to anyone else by reason of any failure on the part of any party hereto
or any maker, guarantor, endorser or other signatory of any document or
any other person to perform such person's obligations under any such
document. Except for amendments to this Agreement referred to in
Section 12(b) and except for instructions given to the Agent by another
party hereto relating to the Escrow Account, the Agent shall not be
obligated to recognize any agreement between any or all of the persons
referred to herein, notwithstanding that references thereto may be made
herein and whether or not it has knowledge thereof.
(b) The Agent shall not be liable to any other party
hereto or to anyone else for any action taken or omitted by it, or any
action suffered by it to be taken or omitted, in good faith and in the
exercise of its own best judgment, except for fraud, negligence or
willful misconduct. The Agent may rely conclusively and shall be
protected in acting upon any order, notice, demand, certificate,
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opinion or advice of counsel (including counsel chosen by the Agent),
statement, instrument, report or other paper or document (not only as
to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any
information therein contained) that is believed by the Agent to be
genuine and to be signed or presented by the proper person or persons.
The Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement or any of
the terms hereof, unless evidenced by a writing delivered to the Agent
signed by the proper party or parties and, if the duties or rights of
the Agent are affected, unless it shall give its prior written consent
thereto.
(c) The Agent shall not be responsible for the
sufficiency or accuracy of the form of, or the execution, validity,
value or genuineness of, any document or property received or held by
it hereunder, or of any signature or endorsement thereon, or for any
lack of endorsement thereon, or for any description therein, nor shall
the Agent be responsible or liable to the other parties hereto or to
anyone else in any respect on account of the identity, authority or
rights of the persons executing or delivering or purporting to execute
or deliver any document or property or this Agreement, other than on
behalf of or in the name of the Agent. The Agent shall have no
responsibility with respect to the use or application of any funds or
other property paid or delivered by the Agent pursuant to the
provisions hereof. The Agent shall not be liable to any other party
hereto or to anyone else for any loss that may be incurred by reason of
any investment of any monies that it holds hereunder.
(d) The Agent shall have the right to assume, in the
absence of written notice to the contrary from the proper person or
persons, that a fact or an event by reason of which an action would or
might be taken by the Agent does not exist or has not occurred, without
incurring liability to the other parties hereto or to anyone else for
any action taken or omitted, or any action suffered by it to be taken
or omitted, in good faith and in the exercise of its own best judgment,
in reliance upon such assumption; provided, however, that the Agent
shall be liable for any such liability resulting from its own fraud,
negligence or willful misconduct.
(e) To the extent that the Agent becomes liable for
the payment of taxes, including withholding taxes, in respect of income
derived from the investment of funds held hereunder or any payment made
hereunder, the Agent may pay such taxes. The Agent shall be indemnified
and held harmless against any liability for taxes and for any penalties
or interest in respect of taxes, on such investment income or payments
in the manner provided in Section 7(f).
(f) The Agent shall be indemnified and held harmless
by the Partnership and the General Partner from and against any and all
expenses, including counsel fees and disbursements, or loss suffered by
the Agent in connection with any action, suit or other proceeding
involving any claim, or in connection with any claim or demand, that
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in any way, directly or indirectly, arises out of or relates to this
Agreement, the services of the Agent hereunder, the monies or other
property held by it hereunder or any income earned from investment of
such monies; provided, however, that if the Agent has been determined
to be guilty of fraud, negligence or willful misconduct, the Agent
shall not be entitled to indemnification hereunder. Promptly after the
receipt by the Agent of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Agent shall, if a
claim in respect thereof is to be made against any of the other
parties hereto, notify such other parties thereof in writing; the
failure by the Agent to give such notices shall relieve such other
parties from any liability that such parties may have to the Agent
under this Section 7(f) as to the particular item for which
indemnification is being sought, but not from any other liability that
any of them may have to the Agent. Each of the other parties hereto
will be entitled to participate in the defense of any action, suit or
proceeding for which indemnification is sought hereunder and, to the
extent any of them so desires, jointly with any of the other parties
hereto, to assume such defense, with counsel who shall be reasonably
satisfactory to the Agent, and after notice from any of the other
parties hereto to the Agent of such party's election so to assume such
defense, none of the other parties hereto will be liable to the Agent
under this Section 7(f) for any legal or other expenses subsequently
incurred by the Agent in connection with such defense other than
reasonable costs of investigation.
8. Compensation of Agent. The Agent shall be entitled to
reasonable compensation for the services rendered by it hereunder, as set forth
on Exhibit A. The Agent shall also be entitled to reimbursement by the
Partnership for all expenses paid or incurred by it in the administration of its
duties hereunder, including, but not limited to, all counsel, advisors' and
agents' fees and disbursements and all taxes or other governmental charges.
9. Further Assurances. From time to time on and after the date
hereof, the other parties hereto shall deliver or cause to be delivered to the
Agent such further documents and instruments and shall do and cause to be done
such further acts as the Agent shall reasonably request (it being understood
that the Agent shall have no obligation to make any such request) to carry out
more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting
hereunder.
10. Termination of Agreement and Resignation of Agent.
(a) This Agreement shall terminate on the final
disposition of the monies and property held in escrow hereunder,
provided that the rights of the Agent and the obligations of the other
parties hereto under Sections 7 and 8 shall survive the termination
hereof.
(b) The Agent may resign at any time and be
discharged from its duties as escrow agent hereunder by giving the
other parties hereto at least 60 days' notice thereof. The General
Partner or the Selling Agent may remove the Agent at any time by
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giving to the other parties hereto at least 30 days' notice thereof.
As soon as practicable after its resignation or removal, the Agent
shall turn over to a successor escrow agent appointed by the other
parties hereto all monies and property held hereunder upon
presentation of the document appointing the successor escrow agent and
its acceptance thereof. If no successor escrow agent is so appointed
within the 60-day period following such notice of resignation or the
30-day period following such notice of removal, the Agent may deposit
the aforesaid monies and property with any court in the City of
Denver, State of Colorado, it deems appropriate. If the Agent is
removed, it shall be entitled to (i) the full payment of its flat fee,
(ii) compensation for services rendered prior to such removal and
(iii) out-of-pocket expenses incurred prior to such removal, all as
set forth on Exhibit A.
11. Notices. All notices, requests, demands and other
communications provided for herein shall be in writing, shall be delivered by
hand, first-class mail or overnight express, shall be deemed given when received
and shall be addressed to the parties hereto at their respective addresses
listed below or to such other persons or addresses as the relevant party shall
designate as to itself from time to time in writing delivered in like manner:
To the Agent:
Bank One, Colorado, N.A.
Attention: Xxxxx Xxxxxx
0000 00xx Xxxxxx, Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
To the Partnership:
Capital Preferred Yield Fund - V, L.P.
Attention: Xx. Xxxx X. Xxxxxxxx
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
To the General Partner:
CAI Equipment Leasing VI Corp.
Attention: Xx. Xxxx X. Xxxxxxxx
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
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To the Selling Agent:
CAI Securities Corporation
Attention: Xx. Xxxx X. Xxxxxxxx
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
12. Miscellaneous.
(a) All amounts referred to herein are expressed in
United States dollars and all payments by the Agent shall be made in
such dollars.
(b) This Agreement shall be binding upon and inure to
the benefit of each party's respective successors, heirs and permitted
assigns. No other person shall acquire or have any rights under or by
virtue of this Agreement. This Agreement may not be changed orally or
modified, amended or supplemented without an express written agreement
executed by the Agent and the other parties hereto.
(c) This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado. The
representations and warranties contained in this Agreement shall
survive the execution and delivery hereof and any investigation made by
any party. The headings in this Agreement are for purposes of reference
only and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Partnership, the General Partner, the
Selling Agent and the Agent have executed this Escrow Agreement as of the date
set forth above.
CAPITAL PREFERRED YIELD FUND - V, L.P.,
a Delaware limited partnership
By: CAI EQUIPMENT LEASING VI CORP.,
a Colorado corporation and
Its General Partner
By:
---------------------------------------------
Xxxx X. Xxxxxxxx, President
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CAI EQUIPMENT LEASING VI CORP.
By:
---------------------------------------------
Xxxx X. Xxxxxxxx, President
CAI SECURITIES CORPORATION
By:
--------------------------------------------
Xxxx X. Xxxxxxxx, Senior Vice
President
BANK ONE, COLORADO, N.A.
By:
---------------------------------------------
Title:
-------------------------------------
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CAPITAL PREFERRED YIELD FUND-V, L.P.
ESCROW FEE SCHEDULE
Escrow fee (payable in advance;
assumes escrow period of
90 days or less) $2,000.00
Additional escrow fee if escrow extends
beyond initial 90-day period (payable
annually or any portion thereof) $3,000.00
Each disbursement event $ 100.00
Issuance of 1099's - per tax form $ 15.00
Return of funds to subscribers, each check $ 10.00
Out-of-pocket expenses (including legal, taxes,
extraordinary administration) At cost
Date: , 1997
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