EXHIBIT 10.1
ESCROW AGREEMENT
ESCROW AGREEMENT
This Escrow Agreement is dated and effective as of the __ day of
___________, 2003 and is made among ICON Securities Corp. (the
"Dealer-Manager"), ICON Income Fund Ten, LLC, a Delaware limited liability
company (the "Company"), and The Chase Manhattan Bank, [a _____________ state
chartered bank] (the "Escrow Agent").
RECITALS
A. The Company proposes to offer and sell up to 150,000 shares (the
"Shares") of limited liability company interests in the Company to investors at
$1,000 per Share pursuant to a registration statement (the "Registration
Statement") filed with the Securities and Exchange Commission ("SEC").
B. The Company has agreed that the subscription price paid in cash by
investors will be refunded to them if less than 5,000 Shares (the "Minimum
Offering") have been sold and payment therefore received by the earlier to occur
of the date (the "Escrow Termination Date") which is (1) the anniversary of the
date on which the Offering Period (as defined in the Company's prospectus (the
"Prospectus") constituting part of the Registration Statement) commenced or (2)
any earlier date on which ICON Capital Corp., the manager of the Company (the
"Manager"), may elect to terminate the Offering Period.
C. The Company desires to establish an escrow with Escrow Agent for
subscription payments pending receipt of aggregate subscriptions for not less
than Five Thousand (5,000) Shares ($5,000,000 of Shares) have been received (the
time at which the escrow established by this Agreement as to subscriptions from
residents of all states other than Pennsylvania may be released) or Seven
Thousand Five Hundred (7,500) Shares ($7,500,000 of Shares) have been received
(the time at which the escrow established by this Agreement as to subscriptions
from residents of Pennsylvania may be released).
D. The Escrow Agent is willing to serve as escrow agent upon the terms and
conditions hereinbelow set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable considerations, the receipt and sufficiency of which is hereby
acknowledged by the parties, the parties covenant and agree as follows:
1. Deposit with Escrow Agent: The Escrow Agent agrees that it will, from
time to time, accept subscription payments for Shares (the "Escrow Deposit")
received by it from investors or broker-dealers authorized to sell Shares (the
"Selling Dealers"). Until such time at least 5,000 Shares have been sold and the
related Escrow Deposits in an aggregate amount not less than $5,000,000 have
been duly distributed in accordance with Section 3.1 hereof, all subscription
checks shall be made payable to the Escrow Agent. Subscription Agreements for
the Shares received by the Company shall be reviewed for accuracy by the Company
and, immediately thereafter, the Company shall deliver to Escrow Agent
information describing (1) the name, address and Federal Tax Identification
Number of the investor, (2) that number of Shares subscribed for by investor,
and (3) the subscription price.
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2. Investment of Escrow Deposit. The Escrow Agent shall, upon receipt of
the checks remitted to it, deposit all Escrow Deposits in federally insured
interest-bearing savings or money market accounts.
3. Distribution of Escrow Deposit. The Escrow Agent shall distribute the
Escrow Deposits as set forth in this Section 3, and the Escrow Agent's
obligations (other than those of Sections 3.3 and 5 hereof which by their nature
must survive this Agreement) shall terminate upon such distributions, and the
Escrow Agent shall be irrevocably released and discharged from any and all
further responsibility or liability with respect to this Agreement.
3.1 At any time following sale of at least 5,000 Shares (exclusive
of subscriptions from residents of the Commonwealth of Pennsylvania), the
Dealer-Manager or the Manager may (a) certify that the sale of such Shares has
satisfied the Minimum Offering required for the Company to break escrow as to
the subscription payments of residents of states other than the Commonwealth of
Pennsylvania and (b) stipulate the date on which the first closing date and
subsequent closing dates of the Company and the release of the Escrow Deposits
with respect to such investors to the Company and all related earnings thereon
to such investors shall occur. At any time following sale of at least 7,500
Shares (inclusive of subscriptions by residents of all States inclusive of
subscriptions from residents of the Commonwealth of Pennsylvania), the
Dealer-Manager or Manager may (a) certify that the sale of such Shares has
satisfied the Minimum Offering required for the Company to break escrow as to
all subscription payments (including those from residents of the Commonwealth of
Pennsylvania) and (b) stipulate the date on which the next closing date of the
Company and the release of the Escrow Deposits then being held on behalf of all
investors (including, without limitation, residents of the Commonwealth of
Pennsylvania) to the Company and all related earnings thereon to such investors
shall occur. Upon collection by the Escrow Agent of good funds for such
subscription payments, the Escrow Agent shall make such distributions on the
applicable closing date. Certification by an officer of the Manager that at
least 5,000 Shares or 7,500 Shares (as the case may be) have been timely sold as
described in the first two sentences of this Section 3.1 and the receipt by
Escrow Agent of $5,000,000 or $7,500,000 (as the case may be) in cash from
investors for Shares, shall constitute sufficient evidence for the purposes of
this Section 3.1 that such events have occurred.
3.2 After satisfaction of the conditions of Section 3.1 above, all
checks, payable to the Escrow Agent, shall, upon receipt by Escrow Agent, be
endorsed (without recourse to Escrow Agent) for deposit into such accounts as
directed by the Company.
3.3 If any Escrow Deposits do not become deliverable to the Company
pursuant to Section 3.1 above on or prior to the Escrow Termination Date, the
Escrow Agent shall return such Escrow Deposits to the applicable investors in an
amount equal to the subscription amount theretofore paid by each of them
together with interest earned thereon. In the event that (a) rescission of an
individual subscription is required to be offered to an individual investor
under provisions of applicable state law or (b) a subscription for a resident of
a state may only be held in escrow for a shorter period of time than provided in
the preceding sentence under provisions of applicable state law, then the Escrow
Agent shall promptly, following receipt of such investor's duly executed request
for rescission (in the case of rescission) or the Manager's direction to release
such subscription (in the case of expiration of an applicable state statutory
maximum escrow period), return such investor's Escrow Deposit to
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him in an amount equal to the subscription amount theretofore paid by him
together with interest earned thereon. For purposes of the preceding sentence,
rescission must be offered to each Pennsylvania investor for whom an Escrow
Deposit is held by the Escrow Agent at the end of the 120 day period which began
with the Escrow Agent's receipt of his subscription payment. If such rescission
offer is not accepted, such Escrow Deposit may continue to be held for one or
more successive 120-day escrow periods at the end of each of which rescission
must again be offered to each such investor.
In no event shall any Escrow Deposit be held in escrow for more than
one year before either being (a) released to the Company (upon a closing
pursuant to Section 3.1 and 3.2) or (b) returned to the applicable investor (in
the event such Escrow Deposit is returned the applicable investor for whom it is
being held pursuant to Section 3.3). The Escrow Agent will not be required to
communicate with any investor(s). All inquiries on behalf of the investor(s)
will be coordinated through the Company.
4. Distribution of Interest. If the Escrow Deposits become deliverable to
the Company pursuant to Section 3.1 or to the investors pursuant to Section 3.3
above, the Escrow Agent shall compute for the distribution by the Manager in
accordance with such computations the pro rata share of the investment earnings
of each Escrow Deposit. Each investor's pro rata share of investment earnings
shall be computed as follows:
(Individual Subscription Amount times Days Held)
Investment Earnings times ------------------------------------------------
(Total Subscription Amounts times Days Held)
Such pro rata share of investment earnings shall be distributed to each
investor upon admission of the investor as a member of the Company or upon
return of his subscription amounts.
5. Duties and Liability of Escrow Agent.
5.1 Any interest or other income earned under this Agreement shall
be allocated and paid as provided herein and reported by the recipient to the
Internal Revenue Service as having been so allocated and paid.
5.2 The Escrow Agent shall have the right to liquidate any
investments held, in order to provide funds necessary to make required payments
under this Agreement. The Escrow Agent in its capacity as escrow agent hereunder
shall not have any liability for any loss sustained as a result of any
investment made pursuant to the instructions of the parties hereto or as a
result of any liquidation of any investment prior to its maturity or for the
failure of the parties to give the Escrow Agent instructions to invest [or
reinvest the Escrow Deposit] or any earnings thereon.
5.3 Any corporation into which the Escrow Agent in its individual
capacity may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Escrow Agent in its individual capacity shall be a party, or any corporation to
which substantially all the corporate trust business of the Escrow Agent in its
individual capacity may be transferred, shall be the Escrow Agent under this
Agreement without further act.
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5.4 Anything in this Agreement to the contrary notwithstanding, in
no event shall the Escrow Agent be liable for special, indirect or consequential
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 and regardless of the form of action.
5.5 The duties and obligations of the Escrow Agent shall be
determined solely by the express provisions of this Agreement and shall be
limited to the performance of such duties and obligations as are specifically
set forth herein.
5.6 In performing any of its duties under this Agreement, or upon
the claimed failure to perform its duties hereunder, Escrow Agent shall not be
liable to anyone for any damages, losses, or expenses which it may incur as a
result of the Escrow Agent so acting, or failing to act; provided, however,
Escrow Agent shall be liable for damages arising out of its willful default or
gross negligence under this Agreement. Accordingly, Escrow Agent shall not incur
any such liability with respect to (i) any action taken or omitted to be taken
in good faith upon advice of its counsel or counsel for the Company given with
respect to any questions relating to the duties and responsibilities of the
Escrow Agent hereunder or (ii) any action taken or omitted to be taken in
reliance upon any document, including any written notice or instructions
provided for in this Agreement, not only as to its due execution and to the
validity and effectiveness of its provisions but also as to the truth and
accuracy of any information contained therein, which the Escrow Agent shall in
good faith believe to be genuine, to have been signed or presented by proper
person or persons and to conform with the provision of this Agreement.
5.7 Each of the Company and Dealer-Manager hereby respectively agree
to indemnify and hold harmless the Escrow Agent against any and all losses,
claims, damages, liabilities and expenses, including, without limitation,
reasonable costs of investigation and counsel fees and disbursement which may be
incurred by it resulting from any act or omission of the Company or the Escrow
Agent; except, that if Escrow Agent shall be found guilty of willful default or
gross negligence under this Agreement by any court of competent jurisdiction,
then, in that event, Escrow Agent shall bear all such losses, claims, damages
and expenses. The indemnity provided by this Section 5.7 shall survive the
termination of this Agreement.
5.8 If a dispute ensues between the parties hereto as to the proper
investment or distribution of Escrow Deposits and earnings thereon sufficient,
in the discretion of Escrow Agent, to require it doing so, the Escrow Agent
shall be entitled to tender into the custody of any court of competent
jurisdiction within the State of New York, including the Supreme Court of
Westchester County, New York, all money or property in its hands under the terms
of this Agreement and to file an appropriate proceeding to obtain a court order
or declaratory judgment interpreting this Agreement, resolving such dispute in
accordance herewith and determining the proper disposition of all escrow funds
subject to this Agreement. Upon Escrow Agent's completion of all acts called for
in any such order or declaratory judgment including distribution in full of all
Escrow Deposits and earnings thereon, Escrow Agent shall thereupon to be
discharged from all further duties under this Agreement. Any such legal action
may be brought in any court as Escrow Agent shall determine to have jurisdiction
thereof. The Company and Dealer-Manager shall indemnify Escrow Agent against its
court costs and attorneys' fees incurred in filing such legal proceedings.
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5.9 In the event funds transfer instructions are given (other than
in writing at the time of execution of the Agreement), whether in writing, by
telecopier or otherwise, the Escrow Agent is authorized to seek confirmation of
such instruction by telephone call-back to the person or persons designated in
Schedule 2 hereto, and the Escrow Agent may rely upon the confirmations of
anyone purporting to be the person or persons so designated. The persons and
telephone numbers for call-backs may be changed only in a writing actually
received and acknowledged by the Escrow Agent. The parties to this Agreement
acknowledge that such security procedure is commercially reasonable.
5.10 It is understood that the Escrow Agent and the beneficiary's
bank in any funds transfer may rely solely upon any account numbers or similar
identifying number provided by either of the parties hereto to identify (1) the
beneficiary, (2) the beneficiary's bank, or (3) an intermediary bank. The Escrow
Agent may apply any of the escrowed funds for any payment order it executes
using any such identifying number, even where its use may result in a person
other than the beneficiary being paid, or the transfer of funds to a bank other
than the beneficiary's bank, or an intermediary bank designated.
6. Uncollectable Deposits. If any checks or other instruments deposited in
the escrow account established hereunder prove uncollectable, the Company shall
promptly reimburse the Escrow Agent therefor upon request and the Escrow Agent
shall deliver the returned checks or other instruments to the Company.
7. Notices. All notices, requests, demands and other communication or
deliveries required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally, given by
prepaid telegram or deposited for mailing, first class, postage prepaid,
registered or certified mail, as follows:
If to the investors for Shares: To their respective addresses
as specified in their Subscription Agreements.
If to the Company: ICON Income Fund Ten, LLC, a Delaware limited
liability company
c/o ICON Capital Corp.
000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx,
Executive Vice President
If to the Escrow Agent: The Chase Manhattan Bank
______________________________
______________________________
Attention: ___________________
8. Resignation or Removal of Escrow Agent. The Escrow Agent, or any
successor to it hereafter appointed, may at any time resign and be discharged
from the duties and obligations created by this Agreement by giving at least
thirty (30) days prior written notice to the Company and the Dealer-Manager and
accounting in full for all sums delivered to, and held, by it and all earnings
thereon while Escrow Agent hereunder to the Company, Dealer-Manager and
successor escrow agent. The Escrow Agent may be removed at any time upon sixty
(60) days prior written
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notice by any instrument purportedly signed by an authorized representative of
the Company and the Dealer-Manager. Any successor escrow agent shall deliver to
the Escrow Agent, Company and Dealer-Manager a written instrument accepting such
appointment hereunder and shall accept delivery of the Escrow Deposits to hold
and distribute same in accordance with the terms of this Agreement. If no
successor escrow agent shall have been appointed within thirty (30) days after
the Company and Dealer-Manager receive notice of the Escrow Agent's intention to
resign or within sixty (60) days of the Escrow Agent's receipt of notice of its
removal, the Escrow Agent shall deliver all Escrow Deposits and all earnings
thereon to a national bank with a net worth of not less than $100,000.00
designated by the Escrow Agent which has agreed in writing to accept such monies
and to act as substitute escrow agent in compliance with the terms of this
Agreement. Upon such delivery and acceptance, the Escrow Agent shall be
discharged from any future obligations under this Agreement.
9. General.
9.1 This Agreement shall be governed by and be construed and
enforced in accordance with the laws of the State of New York, exclusive of
conflicts of laws provisions thereunder. The parties hereto consent to the
jurisdiction of all courts of the State of New York and the venue of the courts
located in the county in which the Escrow Agent is located to resolve all
disputes pertaining to this Agreement and any ancillary agreements entered into
in furtherance of the purposes hereof and agree that such jurisdiction shall be
exclusive.
9.2 The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
9.3 This Agreement sets forth the entire agreement and understanding
of the parties in respect to this escrow agreement and supersedes all prior
agreements, arrangements and understandings relating to the subject matter
hereof.
9.4 This Agreement may be amended, modified, superseded or canceled,
and any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver of any party of any condition, or
of the breach of any term contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed to be construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or of the breach of any other terms of this Agreement.
9.5 This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the game instrument.
9.6 This Agreement shall inure to the benefit of the parties hereto
and their respective successors and assigns.
9.7 The Escrow Agent shall have the right to withhold an amount
equal to the amount due and owing to the Escrow Agent, plus any costs and
expenses the Escrow Agent shall
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reasonably believe may be incurred by the Escrow Agent in connection with the
termination of this Agreement.
10. Representation of the Company. The Company hereby acknowledges that
the status of the Escrow Agent with respect to the offering of the Shares is
that of agent only for the limited purposes herein set forth, and hereby agrees
it will not represent or imply that Escrow Agent, by serving as Escrow Agent
hereunder or otherwise, has investigated the desirability or a viability of
investment in the Shares, of has approved, endorsed or passed upon the merits of
the Shares, nor shall the Company use the name of Escrow Agent in any manner
whatsoever in connection with the offer or sale of the Shares, other than by
acknowledgment that it has agreed to serve as Escrow Agent for the limited
purposes herein set forth.
11. Fees. Upon execution of this Agreement, the Company will pay the
Escrow Agent fees outlined in Schedule 1 attached hereto,
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Dealer-Manager:
ICON Securities Corp.
By: ________________________
Xxxxxx X. Xxxxxx
Executive Vice President
Company:
ICON Income Fund Ten, LLC,
a Delaware limited liability company
By: ICON Capital Corp.
Its Manager
By: ________________________
Xxxxxx X. Xxxxxx
Executive Vice President
Escrow Agent:
The Chase Manhattan Bank
By: _________________________
Name: ___________________
Title: ___________________
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Schedule 1
Escrow Agent Fees
$_________ per annum without proration for partial years.
Schedule 2
Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Funds Transfer Instructions
If to Company:
Name Telephone Number
---- ----------------
1. Beaufort X. X. Xxxxxx (000) 000-0000
2. Xxxxxx X. Xxxxxx (000) 000-0000
3. Xxxx X. Xxxxx (000) 000-0000
If to Depositor-Agent:
Name
----
1.
2.
3.
Telephone call-backs shall be made to each of the Company and depositor-agent if
joint instructions are required pursuant to the Agreement.
