EXHIBIT 10(A)
ESCROW AGREEMENT BETWEEN
▇▇▇▇▇ REAL ESTATE FUND XI, L.P.
AND
THE BANK OF NEW YORK
September 15, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Re: ▇▇▇▇▇ Real Estate Fund XI, L.P. Escrow Agreement
Ladies and Gentlemen:
▇▇▇ ▇. ▇▇▇▇▇, III and ▇▇▇▇▇ Partners, L.P. are the general partners (the
"General Partners") of ▇▇▇▇▇ Real Estate Fund XI, L.P. (the "Partnership"), the
issuer for an offering of units of limited partnership interest (the "Units").
▇▇▇▇▇ Investment Securities, Inc., a Georgia corporation (the "Dealer Manager"),
will act as Dealer Manager for the offering of the Units. The Partnership will
sell a minimum of 125,000 Units at a price of $10.00 per Unit, for a total
minimum capital raised of $1,250,000 (the "Required Capital"). The Partnership
hereby appoints you as Escrow Agent for purposes of holding the proceeds from
the sale of the Units, and the Partnership shall deposit with you such proceeds
to be held by you as Escrow Agent on the terms and conditions hereinafter set
forth:
1. Persons subscribing to purchase the Units will be instructed by the Dealer
Manager or any soliciting dealers to remit the purchase price in the form of
checks, drafts or money orders (hereinafter called "instruments of payment")
payable to the order of, or funds wired in favor of, The Bank of New York, as
Escrow Agent for ▇▇▇▇▇ Real Estate Fund XI, L.P. (the "Escrow Account"). The
Dealer Manager will deposit such instruments of payment with you into the
deposit account entitled The Bank of New York, as Escrow Holder for ▇▇▇▇▇ Real
Estate Fund XI, L.P. (the "Escrow Holding Account") promptly after receipt of
those instruments of payment by the Dealer Manager. Within one business day
after receipt by you of written notification from the Dealer Manager setting
forth, as to each subscriber, the name, address, number of Units purchased and
purchase price remitted (the "Batch Sheet"), you will transfer the total amount
of subscription proceeds shown on such Batch Sheet from the Escrow Holding
Account to the Escrow Account.
2. The aforesaid instruments of payment are to be promptly processed for
collection by you following deposit by the Dealer Manager into the Escrow
Holding Account. The proceeds thereof are to be transferred into the Escrow
Account as provided in paragraph 1 hereof and held in the Escrow Account until
such funds are either returned to the subscribers in accordance with paragraph 3
hereof or otherwise disbursed in accordance with paragraph 6 hereof. In the
event any of the instruments of payment are returned to you for nonpayment prior
to receipt by you of the Required Capital, you shall promptly notify the Dealer
Manager in writing of such nonpayment, and you are authorized to debit the
Escrow Account in the amount of such return payment as well as any interest
earned on the investment represented by such payment.
3. In the event that at the close of business on June __, 1998 (the
"Expiration Date") you are not in receipt of Batch Sheets evidencing
subscriptions accepted on or before such date, and instruments of payment dated
not later than that date (or actual wired funds), for the purchase of Units
providing for total purchase proceeds that equal the Required Capital (exclusive
of any funds received from subscriptions for Units from entities which we have
notified you are affiliated with the General Partners or their Affiliates), you
shall promptly notify the Partnership that such instruments of payment and Batch
Sheets have not been received by you. Thereafter, you agree to use your best
efforts to obtain an executed IRS Form W-9 from each subscriber. Promptly
following the Expiration Date, and in any event no later than five business days
after the Expiration Date, you shall promptly return by your check the funds
deposited in the Escrow Account, or shall return the instruments of payment
delivered to you if such instruments have not been processed for collection
prior to such time, directly to each subscriber at the address indicated on the
Batch Sheet. Included in the remittance shall be a proportionate share of the
income earned in the account allocable to each subscriber's investment in
accordance with the terms and conditions specified in paragraph 7 hereof, except
that in the case of subscribers who have not provided to you an executed Form W-
9, you shall withhold thirty-one percent (31%) of the earnings attributable to
those subscribers in accordance with IRS Regulations. In the event you receive
an executed Form W-9 from a subscriber after you have returned such subscriber's
proceeds, net of the thirty one percent (31%) withholding, you shall promptly
refund by your check the amount withheld to such subscriber. Notwithstanding
the foregoing, you shall not be required to remit any payments until funds
represented by such payments have been collected by you.
In the event that the Partnership rejects any subscription for which you
have already collected funds, you shall promptly issue a refund check to the
rejected subscriber. If the General Partners reject any subscription for which
you have not yet collected funds but have submitted the subscriber's check for
collection, you shall promptly issue a check in the amount of the subscriber's
check to the rejected subscriber after you have cleared such funds. If you have
not yet submitted a rejected subscriber's check for collection, you shall
promptly remit the subscriber's check directly to the subscriber.
4. Following receipt by you of cash and instruments of payment (or wired
funds) of the Required Capital prior to the time provided in paragraph 3
hereinabove, you shall notify the Partnership in writing within one business day
when such funds have been collected through normal banking channels and
deposited in the Escrow Account.
5. Prior to the disbursement of funds deposited in the Escrow Account in
accordance with the provisions of paragraph 3 or 6 hereof, you shall invest all
of the funds deposited in the Escrow Account in "Short-term Investments" (as
defined below) and you are further authorized and you agree to reinvest all
earnings and interest derived therefrom in any of the Short-term Investments
specified below. In the event that instruments of payment are returned to you
for nonpayment, you are authorized to debit the Escrow Account in accordance
with paragraph 2 hereof.
"Short-term Investments" include obligations of, or obligations guaranteed
by, the United States government or bank money-market accounts or certificates
of deposit of national or state banks that have deposits insured by the Federal
Deposit Insurance Corporation (including certificates of deposit of any bank
acting as a depository or custodian for any such funds, including, without
limitation, such certificates or instruments of The Bank of New York), which
mature on or before the Expiration Date, unless such instrument cannot be
readily sold or otherwise disposed of for cash by the Expiration Date without
any dissipation of the offering proceeds invested.
The following securities are not permissible investments:
(a) money-market mutual funds;
(b) corporate equity or debt securities;
(c) repurchase agreements;
(d) bankers' acceptances;
(e) commercial paper; and
(f) municipal securities.
6. All disbursements from the Escrow Account, except for disbursements under
the provisions of paragraph 3 hereof, shall be made by you only pursuant to the
provisions of this paragraph 6. Except for disbursements authorized upon court
order, you shall hold all funds in the Escrow Account until (i) the date checks
for Required Capital have cleared normal banking channels after receipt by you
of the Required Capital, and (ii) receipt of letter instructions from the
Partnership directing disbursements of such funds to the Partnership. In
disbursing such funds, you are authorized to rely solely upon such letter
instructions which you receive from the Partnership whether or not such
instructions are correct, true or authentic; provided that, if in your opinion
such letter instructions from the Partnership are unclear, you are authorized to
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rely upon the legal counsel to the Partnership in distributing such funds to the
effect that distribution of the funds is authorized by the letter instructions
of the Partnership and that distribution of the funds in that manner is
authorized by and in compliance with such letter. However, you shall not be
required to disburse any funds attributable to instruments of payment which have
not been collected by you, provided that you shall use your best efforts to
promptly collect such funds after your receipt of disbursement instructions from
the Partnership in accordance with this paragraph, and shall disburse such funds
in compliance with the disbursement instructions from the Partnership.
7. In the event the offering of Units terminates prior to receipt of the
Required Capital, income earned on subscription proceeds deposited in the Escrow
Account ("Gross Escrow Income") minus the total escrow expenses ("Net Escrow
Income") shall be remitted to subscribers in compliance with paragraph 3. Each
subscriber's pro rata portion of Net Escrow Income shall be determined as
follows: The total amount of Net Escrow Income shall be multiplied by a
fraction, the numerator of which is determined by multiplying the number of
Units purchased by said subscriber times the number of days said subscriber's
proceeds are invested prior to termination of the offering, and the denominator
of which is the total of the numerators for all such subscribers.
Notwithstanding the foregoing, (i) escrow expenses may be deducted from the
Escrow Account only to the extent of Gross Escrow Income, and the General
Partners shall reimburse the Escrow Agent for any escrow expenses in excess of
such amount, and (ii) Maine, Missouri, Ohio and Pennsylvania residents will be
paid their pro rata portion of income earned on subscription proceeds deposited
in the Escrow Account without any deductions for escrow expenses. You shall
promptly notify the Partnership of the amount of Net Escrow Income which
subscribers who are Maine, Missouri, Ohio or Pennsylvania residents would have
received if escrow expenses were not deducted from Gross Escrow Income, and the
General Partner shall reimburse you for such pro rata escrow expenses
attributable to subscribers who are Maine, Missouri, Ohio or Pennsylvania
residents. You shall promptly remit all such Net Escrow Income in accordance
with paragraph 3.
8. As compensation for serving as Escrow Agent hereunder, you shall receive a
fee, as set forth in Schedule A attached hereto.
9. In performing any of your duties hereunder, you shall not incur any
liability to anyone for any damages, losses or expenses, except for willful
default, breach of trust, or gross negligence, and accordingly you shall not
incur any such liability with respect to any action taken or omitted (1) in good
faith upon advice of your counsel given with respect to any questions relating
to your duties and responsibilities under this Agreement, or (2) in reliance
upon any instrument, including any written instrument or instruction provided
for in this Agreement, not only as to its due execution and validity and
effectiveness of its provisions but also as to the truth and accuracy of
information contained therein, which you shall in good faith believe to be
genuine, to have been signed or presented by a proper person or persons and to
conform to the provisions of this Agreement.
10. The Partnership hereby agrees to indemnify and hold you harmless against
any and all losses, claims, damages, liabilities and expenses, including the
reasonable cost of attorneys' fees and disbursements, that may be imposed on you
or incurred by you in connection with your acceptance of appointment as the
Escrow Agent hereunder, or the performance of your duties hereunder, including
any litigation arising from this Agreement or involving the subject matter
hereof, except where such losses, claims, damages, liabilities and expenses
result from willful default, breach of trust or gross negligence.
11. In the event of a dispute between the parties hereto sufficient in your
discretion to justify doing so, you shall be entitled to tender into the
registry or custody of any court of competent jurisdiction all money or property
in your hands under this Agreement, together with such legal pleadings as you
deem appropriate, and thereupon be discharged from all further duties and
liabilities under this Agreement. In the event of any uncertainty as to your
duties hereunder, you may refuse to act under the provisions of this Agreement
pending order of a court of competent jurisdiction and you shall have no
liability to the Partnership or to any other person as a result of such action.
Any such legal action may be brought in such court as you shall determine to
have jurisdiction thereof. The filing of any such legal proceedings shall not
deprive you of your compensation earned prior to such filing.
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12. All written notices and letters required hereunder to you shall only be
effective if delivered personally or by certified mail, return receipt requested
to The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇. All written notices and letters required
hereunder to the Partnership or the Dealer Manager shall only be effective if
delivered personally or by certified mail, return receipt requested to ▇▇▇ ▇.
▇▇▇▇▇, III, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
13. This Agreement shall be governed by the laws of the State of Georgia as
to both interpretation and performance.
14. The provisions of this Agreement shall be binding upon the legal
representatives, heirs, successors and assigns of the parties hereto.
15. The Partnership hereby acknowledges that you are serving as Escrow Agent
only for the limited purposes herein set forth, and hereby agrees that it will
not represent or imply that you, by serving as Escrow Agent hereunder or
otherwise, have investigated the desirabilities or advisability of investment in
the Partnership, or have approved, endorsed or passed upon the merits of the
Units or the Partnership. The Partnership further agrees to instruct the Dealer
Manager, and each of its representatives, and any other representative who may
offer Units to persons from time to time, that they shall not represent or imply
that you have investigated the desirability or advisability of investment in the
Partnership, or have approved, endorsed or passed upon the merits of the Units
or the Partnership, nor shall they use your name in any manner whatsoever in
connection with the offer or sale of the Units other than by acknowledgment that
you have agreed to serve as Escrow Agent for the limited purposes herein set
forth.
16. This Agreement and any amendment hereto may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed to be an
original.
17. In the event that you receive instruments of payment (or wired funds)
after the Required Capital has been received and the proceeds of the Escrow
Account have been distributed to the Partnership, you are hereby authorized to
deposit such instruments of payment to any deposit account as directed by the
Partnership. The application of said funds into a deposit account directed by
the Partnership shall be a full acquittance to you and you shall not be
responsible for the application of said funds.
18. The Escrow Agent shall be bound only by the terms of this Escrow
Agreement and shall not be bound or incur any liability with respect to any
other agreements or understanding between any other parties, whether or not the
Escrow Agent has knowledge of any such agreements or understandings.
19. Indemnification provisions set forth herein shall survive the termination
of this Agreement.
20. Upon acceptance and distribution of the Required Capital, this Escrow
Agreement shall terminate and the Escrow Agent shall have no further
responsibility or liability with regard to the terms of this Agreement.
21. The Escrow Agent has no responsibility for accepting, rejecting or
approving subscriptions.
22. This Agreement shall not be modified, revoked, released or terminated
unless reduced to writing and signed by all parties hereto, subject to the
following paragraph.
Should, at any time, any attempt be made to modify this Agreement in a manner
that would increase the duties and responsibilities of the Escrow Agent or to
modify this Agreement in any manner which the Escrow Agent shall deem
undesirable, or at any other time, the Escrow Agent may resign by notifying the
Partnership in writing, by certified mail, and until (i) the acceptance by a
successor escrow agent as shall be appointed by the Partnership; or (ii) thirty
(30) days following the date upon which notice was mailed, whichever occurs
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sooner, the Escrow Agent's only remaining obligation shall be to perform its
duties hereunder in accordance with the terms of the Agreement.
23. The Escrow Agent may resign at any time from its obligations under this
Escrow Agreement by providing written notice to the Partnership. Such
resignation shall be effective on the date specified in such notice which shall
be not less than thirty (30) days after such written notice has been given. The
Escrow Agent shall have no responsibility for the appointment of a successor
escrow agent. Unless otherwise provided in this Agreement, final termination of
this Escrow Agreement shall occur on the date that all funds held in the Escrow
Account are distributed either (a) to the Partnership pursuant to paragraph 6
hereof, or (b) to subscribers pursuant to paragraphs 3 and 7 hereof.
24. The Escrow Agent may be removed for cause by the Partnership by written
notice to the Escrow Agent effective on the date specified in such notice. The
removal of the Escrow Agent shall not deprive the Escrow Agent of its
compensation earned prior to such removal.
Agreed to as of the 15th day of September, 1997.
▇▇▇▇▇ REAL ESTATE FUND XI, L.P.
A Georgia Limited Partnership
By: ▇▇▇▇▇ Partners, L.P.
A Georgia Limited Partnership
(General Partner)
By: ▇▇▇▇▇ Capital, Inc.
A Georgia Corporation
Attest: (General Partner)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------- ------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇, III
Title: Assistant Secretary President
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇, III
---------------------------------
▇▇▇ ▇. ▇▇▇▇▇, III
General Partner
▇▇▇▇▇ INVESTMENT SECURITIES, INC.
A Georgia Corporation
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇, III
---------------------------- ---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇, III
Title: Secretary President
[SIGNATURES CONTINUED ON NEXT PAGE]
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The terms and conditions contained above are hereby
accepted and agreed to by:
THE BANK OF NEW YORK
Attest: Escrow Agent
By: /s/ Julz ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------- -------------------------------
Name: Julz ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: As Agent Title: As Agent
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SCHEDULE A TO
ESCROW AGREEMENT FOR
▇▇▇▇▇ REAL ESTATE FUND XI, L.P.
Schedule of Fees - Escrow Agency
The Bank of New York
Administration Fee - Payable Annually......................... $1,500.00
For return of funds due to
rejected subscription........................................ $ 5.00
per rejected
subscription
For costs incurred in connection
with returned checks......................................... $ 20.00
per returned
check
Charges for refunding subscription proceeds if Required Capital is not met will
be negotiated between the parties.
Charges for filing reports or information as may be required by Internal Revenue
Service regulations or for the performance of any services not contemplated
at the time of opening account, or not of a routine administrative nature,
or not specifically covered in this schedule, will be determined by
appraisal.
Actual Out-of-Pocket expenses such as counsel fees, cost of special checks,
postage, insurance, telephone, telegraph, etc. will be billed at cost.
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