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EXHIBIT 10.03
XXXXXXXX ASSET ALLOCATION TRUST
ESCROW AGREEMENT
This Escrow Agreement is made and entered into as of ___________, 2000
by and among Mercantile-Safe Deposit & Trust Company, a Maryland bank & trust
company, as escrow agent (the "Escrow Agent"), Xxxxxxxx Asset Allocation Trust,
a Delaware business trust (the "Trust") and Xxxxxxxx & Company, Inc., a Maryland
corporation, the managing owner of the Trust ("Xxxxxxxx" or the "Managing
Owner").
Commencing upon the execution of this Agreement, the Escrow Agent shall
act as escrow agent and agrees to receive, hold, deal with and disburse the
proceeds from the sale of Units (the "Proceeds") and any other property at any
time held by the Escrow Agent hereunder in accordance with this Agreement.
All Proceeds of subscriptions for Units of the Trust shall be deposited
in an escrow account established by the Escrow Agent on behalf of the Trust. All
Proceeds shall be denominated in dollars and deposited in the escrow account by
check or wire transfer, duly made out to Xxxxxxxx Asset Allocation Trust, Escrow
Account." The Escrow Agent shall promptly notify Xxxxxxxx of any discrepancy
between the amounts set forth on any statement delivered by Xxxxxxxx or the
Selling Agents and the sum or sums delivered therewith to the Escrow Agent. In
the event that any checks or other instruments deposited in the escrow account
prove uncollectible, the Escrow Agent shall promptly notify Xxxxxxxx and the
appropriate Selling Agent and forward such checks or other instruments to the
appropriate Selling Agent.
Xxxxxxxx shall deliver to all prospective subscribers interim receipts
for the amount of the Proceeds deposited in this escrow account, reciting the
substance of this Agreement.
The Escrow Agent, is hereby directed to hold, deal with and dispose of
the aforesaid property and any other property at any time held by the Escrow
Agent hereunder in the following manner subject, however, to the terms and
conditions hereinafter set forth.
1. If acceptable subscriptions (as determined by the Managing Owner
in its discretion) of at least 8,000 Units (constituting cleared
funds in the aggregate value of at least $8,000,000) have been
received at any time prior to 180 days from the beginning of the
offering period for the Units (as described in the Trust's
Prospectus dated ________ , 2000 (the "Prospectus")) as
evidenced by (i) written instructions by the Managing Owner,
(ii) an affidavit of the Managing Owner and (iii) possession in
the escrow account of at least $8,000,000 in collected funds in
payment of such subscriptions, all sums accumulated in this
escrow account shall be paid over pursuant to the Managing
Owner's written request. Such affidavit shall set forth the day
for such payment (the "Closing Date"), which shall not be more
than ten business days after the close of the initial offering
period for the Units.
The offering will continue after the Closing Date. Subscriptions
will be deposited in the escrow account until each month-end at
which time the sums accumulated
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in this escrow account shall be paid over pursuant to the
Managing Owner's written request setting forth the date for such
payment.
2. If acceptable subscriptions (as determined by the Managing Owner
in its discretion) of at least 8,000 Units have not been
received prior to 180 days from the beginning of the offering
period, as evidenced by an affidavit of the Managing Owner as
described above, remittance of all funds accumulated in this
escrow account shall be made within two business days of the
termination of the initial offering period, by the Escrow Agent
directly to the persons on whose behalf such funds were
deposited, pursuant to the written direction of the Managing
Owner, and without deductions of any kind or character.
3. For the purposes of Paragraphs 1 and 2 above, (i) the offering
period for the Units shall be deemed to begin on the date that
appears on the cover page of the Prospectus and (ii) in
computing the aggregate number of Unit subscriptions, the
Managing Owner shall not include the initial unit holder's
investment for the purpose of permitting the formation of the
Trust.
4. Prior to the delivery, if any, of the escrowed funds to the
Trust upon sale of the Units, as described above, the Trust
shall have no title to nor interest in the funds on deposit, and
such funds shall under no circumstances be subject to the
liabilities or indebtedness of the Trust.
5. The Escrow Agent shall cause all funds deposited with the Escrow
Agent pursuant to this Agreement to be maintained and invested
as the Managing Owner may from time to time direct in bank
(including Mercantile-Safe Deposit & Trust Company) certificates
of deposit, savings or money market accounts, short-term
securities issued or guaranteed by the United States Government
or mutual funds investing solely in the foregoing in compliance
with the Rule 15c2-4 under the Securities Exchange Act of 1934
(the "Exchange Act"), as elaborated upon by the Securities and
Exchange Commission in the National Association of Securities
Dealers, Inc. Notice to Members 84-7, so that such funds can be
readily liquidated so that 100% of the funds so deposited can be
returned to the person entitled thereto under the circumstances
described above or below. If the deposit into the escrow account
is made by Federal Funds wire transfer, the Escrow Agent shall
invest the funds deposited on the same day as deposited,
provided that such deposit is received by 10 a.m. New York City
Time. If the deposit into the escrow account is made by Federal
Funds wire transfer and received by the Escrow Agent after 10:00
a.m. New York City Time, the Escrow Agent shall invest the funds
deposited on the next business day. If the deposit into the
escrow account is made by clearinghouse or certified check, the
Escrow Agent shall invest the funds deposited on the next
business day following the receipt of the check. The Escrow
Agent will incur no liability for any loss suffered so long as
the Escrow Agent follows such direction, subject to the standard
of liability set forth below. Whether or not subscriptions are
accepted and Units are sold, or subscriptions are returned and
no Units are sold, the Managing Owner shall pay the Escrow Agent
fees as set forth in Schedule I hereto for the Escrow Agent's
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services as Escrow Agent on the Closing Date, if there is one,
or if there is no Closing Date, within two business days of the
termination of the offering period. The Escrow Agent agrees that
it shall have no right against the Trust with respect thereto.
6. Interest earned on funds attributable to accepted subscriptions
while held in the escrow account shall be allocated to the Trust
and not to any individual subscriber.
7. At any time prior to the initial Closing Date, if any, and
subsequent Closing Dates, the Managing Owner is authorized to
notify the Escrow Agent that a subscription agreement of a
subscriber has not been accepted by the Managing Owner and to
direct the Escrow Agent to return any funds held in this escrow
account for the benefit of such subscriber directly to such
subscriber. If subscription funds (and interest earned thereon,
if any) shall be returned to subscribers, due to rejection of
subscriptions or the non-occurrence of the initial Closing Date,
the Escrow Agent shall do so to the same source from which
(i.e., a subscriber or an applicable Selling Agent for credit to
the account of a subscriber) subscription funds were received.
All documents, including any instrument necessary for the negotiation or
other transfer of escrow assets deposited simultaneously with the execution of
this Agreement are approved by the parties thereto, other than the Escrow Agent.
The Escrow Agent shall not be obliged to inquire as to the form, manner of
execution or validity of these documents or any document hereafter deposited or
delivered to the Escrow Agent pursuant to the provisions hereof, and the Escrow
Agent shall be entitled to rely on each document received and believed by it to
be genuine, nor shall the Escrow Agent be obliged to inquire as to the identity,
authority or rights of the persons executing the same.
The Escrow Agent shall be liable under this Agreement only for its
failure to exercise due care in the performance of its duties expressly set
forth herein.
Xxxxxxxx agrees to pay to the Escrow Agent, promptly upon demand, the
Escrow Agent's reasonable expenses, judgments, attorney's fees and other
liabilities which the Escrow Agent may incur or sustain by reason of this
Agreement.
In the case of conflicting demands upon the Escrow Agent, the Escrow
Agent may withhold performance of this Agreement until such time as said
conflicting demands shall have been withdrawn or the rights of the respective
parties shall have been settled by court adjudication, arbitration, joint order
or otherwise.
Any notice which the Escrow Agent is required or desires to give
hereunder to any of the undersigned shall be in writing and may be given by
mailing the same to the address of the undersigned (or to such other address as
said undersigned may have theretofore substituted therefore by written
notification to the Escrow Agent), by registered or first class mail, postage
prepaid. For all purposes hereof any notice so mailed shall be as effectual as
though served upon the person of the undersigned to whom it was mailed at the
time it is deposited in the United
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States mail by the Escrow Agent whether or not such undersigned thereafter
actually received such notice. Notices to the Escrow Agent shall be in writing
and shall not be deemed to be given until actually received by the Escrow
Agent's trust department. Whenever under the terms hereof the time for giving a
notice of performing an act falls upon a Saturday, Sunday or bank holiday, such
time shall be extended to the Escrow Agent's next business day.
The Escrow Agent's duties and responsibilities shall be limited to those
expressly set forth in this Escrow Agreement and the Escrow Agent shall not be
subject to, or obligated to recognize, any other agreement between or direction
or instruction of, any or all of the parties hereto even though reference
thereto may be made herein; provided, however, with the Escrow Agent's written
consent, this Escrow Agreement may be amended at any time or times by an
instrument in writing signed by all of the then parties in interest.
If any property subject hereto is at any time attached, garnished or
levied upon, under any court order, or in case the payment, assignment,
transfer, conveyance or delivery of any such property shall be stayed or
enjoined by any court order or in case an order, judgment or decree shall be
made or entered by any court affecting such property, or any part thereof, then
in any of such events, the Escrow Agent is authorized, in its sole discretion,
to rely upon and comply with any such order, writ, judgment or decree, which it
is advised by legal counsel of its own choosing is binding upon it, and if it
complies with any such order, writ, judgment or decree, it shall not be liable
to any of the parties hereto 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.
This Agreement shall be construed, enforced and administered in
accordance with the laws of the State of Delaware.
The Managing Owner may remove the Escrow Agent at any time (with or
without cause) by giving at least 15 days written notice thereof. Within 10 days
after giving such notice, the Managing Owner shall appoint a successor escrow
agent at which time the Escrow Agent shall either distribute the funds held in
the escrow account, its fees, costs and expenses or other obligations owed to
the Escrow Agent having been paid by Xxxxxxxx, as directed by the instructions
of the Managing Owner or hold such funds, pending distribution, until all such
fees, costs and expenses or other obligations are paid by Xxxxxxxx. If a
successor escrow agent has not been appointed or has not accepted such
appointment by the end of the 10-day period, the Escrow Agent may appeal to a
court of competent jurisdiction for the appointment of a successor escrow agent,
or for other appropriate relief and the costs, expenses and reasonable attorneys
fees which the Escrow Agent incurs in connection with such a proceeding shall be
paid by the Trust.
The Escrow Agent may resign by giving five days' written notice by
registered or first class mail sent to the undersigned at their respective
addresses herein set forth; and thereafter, subject to the provisions of the
third preceding paragraph hereof, shall deliver all remaining deposits in said
escrow account upon the written and signed order of the Managing Owner. If no
such notice is received by the Escrow Agent within thirty days after mailing
such notice, the Escrow Agent is unconditionally and irrevocably authorized and
empowered to send any and all Proceeds deposited hereunder by registered mail to
the respective subscribers thereof, or at its
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sole option to deliver such deposited items to the respective depositors. If the
Escrow Agent resigns, reasonable fees and expenses of the Escrow Agent shall be
paid by Xxxxxxxx.
In the event funds transfer instructions are given (other than in
writing at the time of execution of this Agreement), whether in writing, by
telecopier or otherwise, the Escrow Agent is authorized to seek confirmation of
such instructions by telephone call-back to the person or persons designated on
Schedule II 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 acknowledge that such
security procedure is commercially reasonable.
Neither this Agreement nor any right or interest hereunder may be
assigned in whole or in part without the prior consent of the other parties.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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Dated at Baltimore, Maryland as of ___________________________, 2000
PARTIES TO THE ESCROW AGREEMENT
MERCANTILE-SAFE DEPOSIT & XXXXXXXX ASSET ALLOCATION TRUST
TRUST COMPANY
By: XXXXXXXX & COMPANY, INC.
By: By:
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Attest: Attest:
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XXXXXXXX & COMPANY, INC.
By:
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Attest:
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SCHEDULE I
Mercantile-Safe Deposit & Trust agrees to act as Escrow Agent for Xxxxxxxx Asset
Allocation Trust for an annual fee of $1,500.00 including any fees on the M.S.D.
& T. Money Market Fund as outlined in the prospectus for that Fund. The fee is
subject to an annual review.
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SCHEDULE II
The escrow Agent is authorized to seek confirmation of instructions by telephone
call-back to the following persons:
Xxxxxxxx Xxxxxxxxx - Fund Administration Manager
Xxxxxx Xxxxxxx - Fund Administration Assistant
Xxxxx Xxxxx - Chief Financial Officer
