Exhibit 10.04
ESCROW AGREEMENT
September 30, 1994
Chemical Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: ▇▇▇▇ ▇▇▇▇▇▇ Spectrum Series
Escrow Account
Gentlemen:
In accordance with arrangements made by Demeter Management
Corporation, a Delaware corporation (the "General Partner"), on behalf of ▇▇▇▇
▇▇▇▇▇▇ Spectrum Balanced L.P. ("Spectrum Balanced"), ▇▇▇▇ ▇▇▇▇▇▇ Spectrum
Strategic L.P. ("Spectrum Strategic"), and ▇▇▇▇ ▇▇▇▇▇▇ Spectrum Technical L.P.
("Spectrum Technical"), each a Delaware corporation (the "Partnerships" or,
individually, a "Partnership"), and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., the selling agent
for the Partnerships (the "Depositor"; the Partnerships and the Depositor being
herein sometimes collectively referred to as the "Parties" or, individually, as
a "Party"), the Depositor shall: (i) deliver to you, as Escrow Agent, all
subscription funds (by the direct transfer of immediately available funds into a
non-interest bearing escrow account established by you for the Partnerships, for
investment in your interest bearing money market account) received by the
Depositor from each subscriber ("Subscriber" or, collectively, the
"Subscribers") during the "Initial Offering Period" and thereafter during the
"Continuing Offering" (as described in the Partnerships' Prospectus, as the same
may be updated, supplemented, and amended from time to time (the "Prospectus"))
in connection with the offering to the public of Units of Limited Partnership
Interest of the Partnerships (the "Units") and (ii) also promptly transmit to
the General Partner a complete report of all funds deposited with you during the
Initial Offering Period and Continuing Offering. You, as Escrow Agent, shall
hold such subscription funds together with any additions, substitutions, or
other financial instruments in which such funds may be invested or for which
such funds may be exchanged (collectively referred to herein as the "Fund"), IN
ESCROW upon the following terms:
1. (a) Following receipt by you of written notice from the General
Partner that the General Partner has rejected a Subscriber's subscription, in
whole or in part, during either the Initial Offering Period or Continuing
Offering, you shall transmit to the Depositor, as soon as practicable but in no
event later than three business days following receipt by you of such notice,
the amount of such Subscriber's subscription funds that shall have been
deposited with you hereunder and that the General Partner shall have notified
you have been rejected and any interest earned on the Fund and allocated to the
rejected amount of such subscription in accordance with Section 2 hereof. You
shall at the same time give notice to the Depositor of the amount of aggregate
subscription funds and/or interest so returned.
(b) On the second business day before the scheduled day of
each closing, the General Partner shall notify you of the portion of the Fund
that represents subscriptions to be accepted by the General Partner for each
Partnership. Upon receipt by you of joint written notice from the General
Partner and the Depositor on the date of each such closing to the effect that
all of the terms and conditions with respect to the release of subscription
funds from escrow set forth in the Prospectus have been fulfilled, you shall
promptly pay and deliver to each of the Partnerships that portion of the Fund
specified for such Partnership in the General Partner's prior instructions
(excluding any interest earned on the Fund and funds relating to rejected
subscriptions); provided, however, that in the case of the Initial Closing (as
defined in the Prospectus) you will only pay and deliver funds to the
Partnerships after a minimum of 400,000 Units of each of Spectrum Strategic and
Spectrum Technical and 200,000 Units of Spectrum Balanced (1,000,000 Units in
the aggregate) have been subscribed for in the aggregate and not rejected by the
General Partner and a minimum amount of $10,000,000 has cleared the U.S. banking
system (the subscription for each Unit to be $10.00 at the Partnerships' Initial
Closing and at each subsequent closing, if any, at 100% of the net asset value
per Unit as of the close of business on the day of the closing).
(c) On the date of each closing, or as soon thereafter as
practicable, you shall transmit to the Depositor an amount representing: (i) for
each Subscriber whose subscription shall be accepted by the General Partner in
whole or in part, any interest earned on the Fund and allocated to the accepted
portion of such Subscriber's subscription in accordance with Section 2 hereof,
and (ii) for each Subscriber whose subscription shall have been rejected by the
General Partner in whole or in part but whose subscription funds shall not have
been previously returned to the Depositor by you in accordance with Section 1(a)
hereof, such Subscriber's subscription funds that shall have been deposited with
you hereunder and that shall have been rejected by the General Partner, and any
interest earned on the Fund and allocated to the rejected amount of such
subscription in accordance with Section 2 hereof. You shall at the same time
give notice to the Depositor of the aggregate amount of subscription funds
and/or interest so returned.
(d) Notwithstanding Section 1(a) hereof, upon receipt by you
of written notice from the General Partner that a Subscriber has been rejected
or because such Subscriber has provided bad funds in the form of a bad check,
draft, or otherwise to the Depositor), you shall transmit to the Depositor,
within three business days following receipt by you of such notice, the amount
of subscription funds deposited with you hereunder relating to that amount (the
portion of such Subscriber's subscription for which good funds have not been
provided) together with any interest earned on the Fund and allocated to such
portion of such a subscription in accordance with Section 2 hereof to the date
of such return, and shall immediately notify the General Partner of the return
of such funds.
2. You shall hold the Fund (including any interest earned thereon)
for the account of the Partnerships pending delivery to either the Partnerships
or the Depositor, pursuant to Paragraphs 1 or 3 hereof, as the case may be. On
each day that subscription funds are transferred to you hereunder in immediately
available funds and receipt is confirmed before 2:00 P.M., New York City time,
you shall immediately invest such subscription funds solely in your interest
bearing money market account. If subscription funds are transferred to you in
immediately available funds and receipt is confirmed after 2:00 P.M., New York
City time, you shall so invest such funds on the next day. Interest earned on
the Fund shall be allocated
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by the Depositor among the Subscribers proportionately based on (A) the amount
of their respective subscriptions on deposit in the Fund and (B) the period of
time from the date that their respective subscriptions shall have been deposited
in the Fund to the earlier of the delivery of the Fund to the Partnerships at a
closing or the Depositor in accordance with Sections 1 or 3 hereof, as the case
may be.
3. If, during the Partnerships' Initial Offering Period, you are
notified in writing jointly by the Parties that subscriptions for fewer than
400,000 Units of each of Spectrum Strategic and Spectrum Technical and 200,000
Units of Spectrum Balanced (1,000,000 Units in the aggregate) have been
subscribed for and not rejected by the General Partner, that the offering of
Units has been terminated, and that no Initial Closing will be held, you shall
transmit to the Depositor, as soon as practicable but in no event later than
three business days after receipt by you of such notice, an amount representing
the full amount of all subscription funds that shall have been deposited with
you hereunder, together with any interest earned on the Fund in accordance with
Section 2 hereof. You shall at the same time give notice to the Depositor of the
aggregate amounts of subscription funds and/or interest so returned.
4. The Parties further agree with you as follows:
(a) Your duties and responsibilities shall be limited solely
to those expressly set forth in this Agreement and are ministerial in nature.
You shall neither be subject to nor obliged to recognize any other agreement
between, or other direction or instruction of, any or all of the Parties or any
Subscriber even though reference thereto may be made herein; provided, however,
that with your written consent, this Agreement may be amended at any time or
times by an instrument in writing signed by the Parties.
(b) You are authorized, in your sole discretion, to disregard
any and all notices or instructions given by any of the Parties or by any other
person, firm, or corporation, except only such notices or instructions as are
hereunder provided for and orders or process of any court entered or issued with
or without jurisdiction. If the Fund or any part thereof is at any time
attached, garnished, or levied upon under any court order or in case the
payment, assignment, transfer, conveyance, or delivery of the Fund shall be
stayed or enjoined by any court order, or in case any order, judgment, or decree
shall be made or entered by any court affecting the Fund or any part thereof,
then and in any such event you are authorized, in your sole discretion, to rely
upon and comply with any such order, writ, judgment, or decree that you are
advised by legal counsel of your own choosing is binding upon you, and if you
comply with any such order, writ, judgment, or decree you shall not be liable to
any of the Parties or to any other person, firm, or corporation by reason of
such compliance even though such order, writ, judgment, or decree may be
subsequently reversed, modified, annulled, set aside, or vacated.
(c) You shall be fully protected in relying upon any written
notice, demand, certificate, document, or instrument believed by you in good
faith to be genuine and to have been signed or presented by the proper person or
persons or Party or Parties. The Parties shall provide you with a list of
officers and employees who shall be authorized to deliver instructions
hereunder. You shall not be liable for any action taken or omitted by you in
connection herewith in good faith and in the exercise of your own best judgment.
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(d) Should any dispute arise with respect to the delivery,
ownership, right of possession, and/or disposition of the subscription funds
deposited with you hereunder, or should any claim be made upon any such
subscription funds by a third party, you, upon receipt of written notice of such
dispute by any of the Parties or by a third party, are authorized and directed
to retain in your possession all or any of such subscription funds until such
dispute shall have been settled either by mutual agreement of the parties
involved or by final order, decree, or judgment of any court in the United
States.
(e) If for any reason funds are deposited in the escrow
account other than by transfer of immediately available funds, you shall proceed
as soon as practicable to collect checks, drafts, and other collection items at
any time deposited with you hereunder. All such collections shall be subject to
the usual collection agreement regarding items received by your commercial
banking department for deposit or collection; provided, however, that if any
check, draft, or other collection item at any time deposited with you hereunder
is returned to you as being uncollectable (except by reason of an account
closing), you shall attempt a second time to collect such item before returning
such item to the Depositor as uncollectable. Subject to the foregoing, you shall
promptly notify the Parties of any uncollectable check, draft, or other
collection item deposited with you hereunder and shall promptly return such
uncollectable item to the Depositor, in which case you shall not be liable to
pay any interest on the subscription funds represented by such uncollectable
item. In no event, however, shall you be required or have a duty to take any
legal action to enforce payment of any check or note deposited hereunder.
(f) You shall not be responsible for the sufficiency or
accuracy of the form, execution, validity, or genuineness of documents now or
hereafter deposited with you hereunder, or for any lack of endorsement thereon
or for any description therein, nor shall you be responsible or liable in any
respect on account of the identity, authority, or rights of the persons
executing or delivering or purporting to execute or deliver any such document,
or endorsement or this Agreement. You shall not be liable for any loss sustained
as a result of any investment made pursuant to the instructions of the Parties
or as a result of any liquidation of an investment prior to its maturity or the
failure of the Parties to give you any instructions to invest or reinvest the
Fund or any earnings thereon.
(g) All notices required or desired to be delivered hereunder
shall be in writing and shall be effective when delivered personally on the day
delivered, or when given by registered or certified mail, postage prepaid,
return receipt requested, on the day of receipt, addressed as follows (or to
such other address as the party entitled to notice shall hereafter designate in
accordance with the terms hereof):
if to a Partnership, the Partnerships or the
General Partner:
Demeter Management Corporation
Two World Trade Center, 62nd Floor
New York, New York 10048
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
President
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if to the Depositor:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice-President
in either case with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
if to you:
Chemical Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Whenever, under the terms hereof, the time for giving a notice or performing an
act falls on a Saturday, Sunday, or legal holiday, such time shall be extended
to the next business day.
(h) The Depositor agrees to indemnify, defend, and hold you
harmless from and against, any and all loss, damage, tax, liability, and expense
that may be incurred by you arising out of or in connection with your duties
hereunder, except as caused by your gross negligence, bad faith, or willful
misconduct, including the legal costs and expenses of defending yourself against
any claim or liability in connection with your performance hereunder.
(i) You shall be paid by the Depositor for your services a fee
of $3,000 in advance for each Fee Period (as defined below) and such other fees
relating to the administration of the Fund that shall be agreed upon by you and
the General Partner, including, but not limited to, a fee for (a) investment of
funds and (b) transmission of funds due to a rejection of a Subscriber pursuant
to Section 1(d) hereof. "Fee Period" shall mean each consecutive twelve month
period during the term of this Agreement with the first such period beginning
from the date of this Agreement.
(j) It is understood that you may at any time resign hereunder
as Escrow Agent by giving written notice of your resignation to the Parties at
their address set forth above at least 20 days prior to the date specified for
such resignation to take effect, and upon the effective date of such
resignation, all property then held by you hereunder shall be delivered by you
to such person as may be designated jointly by the Parties in writing, whereupon
all your obligations hereunder shall cease and terminate. If you shall resign
prior to the conclusion of any Fee Period you shall pay to the Depositor an
amount equal to the product of $3,000 and a fraction, the numerator of which
shall be the number of days remaining in the Fee Period and the denominator of
which shall be 365. If no successor
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Escrow Agent has been appointed or has accepted such appointment by such date,
all your obligations hereunder shall nevertheless cease and terminate. Your sole
responsibility thereafter shall be to keep safely all property then held by you
and to deliver the same to a person designated by the Parties hereto or in
accordance with the directions of a final order or judgment of a court of
competent jurisdiction.
5. This Agreement shall be governed by and construed in accordance
with the law of the State of New York and any action brought hereunder shall be
brought in the courts of the State of New York, sitting in the County of New
York.
6. The undersigned Escrow Agent hereby acknowledges and agrees to
hold, deal with, and dispose of, the Fund (including any interest earned
thereon) and any other property at any time held by the Escrow Agent hereunder
in accordance with this Agreement.
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If the foregoing Agreement is satisfactory to you, please so
indicate by signing at the place provided below.
Sincerely,
▇▇▇▇ ▇▇▇▇▇▇ SPECTRUM BALANCED L.P.
By: Demeter Management Corporation
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇ ▇▇▇▇▇▇ SPECTRUM STRATEGIC L.P.
By: Demeter Management Corporation
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇ ▇▇▇▇▇▇ SPECTRUM TECHNICAL L.P.
By: Demeter Management Corporation
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice-President
Accepted:
CHEMICAL BANK
By:
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▇.▇. ▇▇▇▇▇▇▇▇
Vice-President
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