Exhibit 10.06
ESCROW AGREEMENT
November 6, ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Charter Series
ESCROW ACCOUNT
Gentlemen:
In accordance with arrangements made by Demeter Management Corporation, a
Delaware corporation (the "General Partner"), on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Charter ▇▇▇▇▇▇ ▇.▇. ("Charter ▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Charter Millburn L.P. ("Charter Millburn"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Charter ▇▇▇▇▇▇ ▇.▇. ("Charter ▇▇▇▇▇▇"; together with Charter ▇▇▇▇▇▇ and Charter
Millburn, the "Partnerships" and individually, a "Partnership"), and ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc., the selling agent for the Partnerships (the "Depositor"; together
with the Partnerships herein sometimes collectively referred to as the "Parties"
and, individually, as a "Party"), the Depositor shall: (i) deliver to you, as
escrow agent ("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
the Continuing Offering. Except as otherwise determined herein, all capitalized
terms used in this Agreement are defined in the Prospectus. 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 the Initial Offering Period or the 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 (i) 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 of as
having been rejected, and (ii) 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 during the Initial Offering Period and the Continuing Offering, 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 equal
to the number of Units subscribed for, multiplied by a price per Unit equal to
$10 with respect to the Initial Closing, and thereafter at 100% of the Net Asset
Value per Unit thereof as of the close of business on the date of the Monthly
Closing. 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 Partnership the portion of the Fund specified in the General
Partner's prior instructions (excluding any interest earned on the Fund and
funds relating to rejected subscriptions).
(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 the first
paragraph of this Section 1, such Subscriber's subscription funds that shall
have been deposited with you hereunder and that shall have been rejected by the
General Partner, together with 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 subparagraph (a) of this Paragraph 1, upon receipt
by you of written notice from the General Partner that a Subscriber has been
rejected (because good funds representing payment for Units have not been
deposited in the Subscriber's customer account with the Depositor 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 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 Initial Offering Period, you are notified in writing
jointly by the Parties that subscriptions for fewer than 400,000 Units of any of
Charter ▇▇▇▇▇▇, Charter Millburn or Charter ▇▇▇▇▇▇ have been subscribed for and
not rejected by the General Partner, that the offering of Units for any such
Partnership(s) have been terminated, and that no Initial Closing with respect to
any such Partnership(s) 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 for any
such Partnership(s), together with any interest earned on the Fund in accordance
with Paragraph 2 hereof for any such Partnership(s). 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.
(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 uncollectible (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 uncollectible. Subject to the foregoing, you shall promptly
notify the Parties of any uncollectible check, draft, or other collection item
deposited with you hereunder and shall promptly return such uncollectible item
to the Depositor, in which case you shall not be liable to pay any interest on
the subscription funds represented by such uncollectible 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
if to the Depositor:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
in either case with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
if to you:
The Chase Manhattan 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 a single fee of $3,000 in
advance for your services with respect to the first year from the date hereof or
any portion thereof in connection herewith. In addition, the Depositor shall pay
an additional $3,000 fee for any services provided hereunder in any subsequent
year.
(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 the first 60 days of the Initial Offering Period, you
shall pay back to the Depositor an amount equal to the product of $50 and the
number of days remaining until the 60th day of the Initial Offering Period. If
you shall resign at or after the conclusion of the first 60 days of the Initial
Offering Period, you shall have no obligation to pay any amount back to the
Depositor. If no successor 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.
If the foregoing Agreement is satisfactory to you, please so indicate by signing
at the place provided below.
Sincerely,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CHARTER
▇▇▇▇▇▇ ▇.▇.
By: Demeter Management Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CHARTER
MILLBURN L.P.
By: Demeter Management Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CHARTER
▇▇▇▇▇▇ ▇.▇.
By: Demeter Management Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Accepted:
THE CHASE MANHATTAN BANK
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice-President
