Exhibit (2)(k)(2)
ESCROW AGREEMENT
THIS AGREEMENT is made as of September 18, 2003, by and among X.X. XXXXXX
ATLAS GLOBAL LONG/SHORT EQUITY FUND, L.L.C., a Delaware limited liability
company (the "Fund"), X.X. XXXXXX ALTERNATIVE ASSET MANAGEMENT, INC., a Delaware
corporation (the "Manager"), and PFPC INC., a Massachusetts corporation ("Escrow
Agent").
WITNESSETH
WHEREAS, the Fund has retained PFPC Inc. to provide certain
administration, accounting and investor services pursuant to an Administration
Agreement (the "Administration Agreement") dated as of September 18, 2003 (in
such capacity, the "Administrator"); and
WHEREAS, the Fund desires that PFPC Inc. also provide services as escrow
agent for the purpose of receiving payments from potential subscribing members
in the Fund (the "Potential Investors") and PFPC Inc. wishes to provide such
services.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. ACCEPTANCE BY ESCROW AGENT. The Escrow Agent hereby accepts the
appointment as escrow agent hereunder and agrees to act on the terms and
conditions hereinafter set forth.
2. RIGHTS AND RESPONSIBILITIES OF ESCROW AGENT. The acceptance by the Escrow
Agent of its duties hereunder is subject to the following terms and
conditions, which the parties to this Agreement hereby agree shall govern
and control the Escrow Agent's rights, duties, liabilities and immunities.
(a) The Escrow Agent shall act hereunder as a depositary only, and in
its capacity as such, it shall not be responsible or liable in any
manner whatever for the sufficiency, correctness, genuineness or
validity of any document furnished to the Escrow Agent or any asset
deposited with it.
(b) "Written Instructions" means written instructions received by the
Escrow Agent and sent by the Manager or any other person duly
authorized by the Manager, or by the Fund, to give such instructions
on behalf of the Fund. The instructions shall be delivered by any
method described in Section 15 below; except that any instruction
terminating this Agreement may be given only by hand or mail. The
Fund and/or the Manager shall provide to the Escrow Agent a
certified copy of each resolution authorizing any person or persons
to give Written Instructions. Such resolution shall include or shall
be accompanied by certified signatures of such persons authorized to
give Written Instructions. Any such resolution shall constitute
conclusive evidence of the authority of the signatories designated
therein to act. Such resolution shall be considered in full force
and effect with the Escrow Agent fully protected in acting in
reliance thereon unless and until it receives written notice from
the Manager or the Fund to the contrary.
The Escrow Agent may rely upon and shall be protected for any action
or omission it takes pursuant to Written Instructions if it, in good
faith, believes such Written Instructions to be genuine. Unless
otherwise provided in this Agreement, the Escrow Agent shall act
only upon Written Instructions and any other relevant information in
the possession of the Administrator or the Custodian (and, for the
avoidance of doubt, the Escrow Agent shall for purposes of this
Agreement be
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deemed to be in receipt of any and all instructions, notices and
other information provided from time to time by the Manager or the
Fund to the Administrator or the Custodian.) The Escrow Agent shall
be entitled to assume that any Written Instruction received
hereunder is not in any way inconsistent with the provisions of the
LLC Agreement or this Agreement or of any vote, resolution or
proceeding of the Fund's members, unless and until the Escrow Agent
receives Written Instructions to the contrary.
(c) The Escrow Agent shall be obligated to exercise care and diligence
in the performance of its duties hereunder, to act in good faith and
to use its best efforts, within reasonable limits, in performing
services provided for under this Agreement. The Escrow Agent shall
be liable for any damages arising out if its failure to perform its
duties under this Agreement to the extent such damages arise out of
its willful misfeasance, fraud, bad faith, negligence or reckless
disregard of such duties. Each party to this Agreement shall have a
duty to mitigate damages for which the other parties may become
responsible.
(d) Notwithstanding anything in this Agreement to the contrary, neither
the Escrow Agent nor its affiliates shall be liable to the Fund or
the Manager for any consequential, special or indirect losses or
damages which the Fund may incur or suffer by or as a consequence of
the Escrow Agent's or its affiliates' performance of the services
provided hereunder, whether or not the likelihood of such losses or
damages was known by the Escrow Agent or its affiliates.
(e) Without limiting the generality of the foregoing or of any other
provision of this Agreement, the Escrow Agent shall not be liable
for losses beyond its control,
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provided it has acted in accordance with Section 2(c) above; and the
Escrow Agent shall not be liable for delays or errors or loss of
data occurring by reason of circumstances beyond its control,
including acts of civil or military authority, national emergencies,
labor difficulties, fire, flood, catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation,
communication or power supply. For the avoidance of doubt, no
provision of this Agreement shall be construed as limiting in any
way any liability which the Administrator may have to any person
pursuant to the Administration Agreement.
(f) The Fund agrees to indemnify the Escrow Agent and hold it harmless
from and against any tax, charge, loss, liability, expense
(including reasonable attorneys fees and expenses), claim or demand
arising directly or indirectly from any action or omission to act
which the Escrow Agent takes (i) at the request or on the direction
of or in reliance on the advice of the Fund or (ii) upon Written
Instructions; provided, however, that neither the Escrow Agent, nor
any of its affiliates, shall be indemnified against any liability
(or any expenses incident to such liability) arising out of the
Escrow Agent's or its affiliates own willful misfeasance, fraud, bad
faith, negligence or reckless disregard of its duties and
obligations under this Agreement. The Fund shall indemnify and hold
harmless the Escrow Agent against and in respect of any liability
for taxes and for any penalties or interest in respect of taxes
attributable to income from the investment of funds held in escrow
by the Escrow Agent pursuant to this Agreement to the extent such
income is paid to the Fund. Notwithstanding anything in this
Agreement to the contrary, the Fund shall not be liable to the
Escrow Agent for
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any consequential, special or indirect losses or damages which the
Escrow Agent may incur or suffer, whether or not the likelihood of
such losses or damages was known by the Fund. These indemnities
shall survive the resignation of the Escrow Agent or the termination
of this Agreement.
(g) The Escrow Agent shall have no duties except those specifically set
forth in this Agreement.
(h) The Escrow Agent shall have the right at any time it deems
appropriate (but only after providing written notice to the Fund and
the Manager of its intention to do so) to seek an adjudication in a
court of competent jurisdiction as to the respective rights of the
parties hereto and shall not be held liable by any party for the
consequences of any delay occasioned by such resort to court.
(i) The Escrow Agent shall notify promptly the Manager of any
discrepancy between the amounts set forth on any remittance advice
received by Escrow Agent and the sums delivered to it therewith.
3. DEFINITIONS. Except as specifically set forth herein, the terms used in
this Agreement shall have the same meaning as set forth in the
Administration Agreement.
4. DEPOSIT OF ESCROW FUND. The Escrow Agent shall establish an account in the
name of X.X. Xxxxxx Atlas Global Long/Short Equity Fund, L.L.C. Escrow
Account for the Benefit of Investors (the "Subscription Account") and an
account in the name of X.X. Xxxxxx Atlas Global Long/Short Equity Fund,
L.L.C. Repurchase Account (the "Repurchase Account") and together with the
Subscription Account, the "Accounts"). Potential Investors will deposit
monies in the Subscription Account by wire transfer pursuant to
instructions provided to them by the Fund. The Escrow Agent shall not
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deposit in the Subscription Account any money remitted by Potential
Investors otherwise than by wire transfer unless it receives Written
Instructions to do so. Balances on deposit in the Subscription Account
will earn interest at prevailing market rates pursuant to arrangements
approved by the Fund.
5. STATEMENTS. During the term of this Agreement, the Escrow Agent shall
provide the Fund and the Administrator with (a) monthly statements
containing the beginning balance in each Account as well as all principal
and income transactions for the statement period and (b) a daily summary
of amounts deposited and the status of available funds. The Administrator
shall be responsible for reconciling such statements. The Manager
acknowledges that it will periodically perform an audit-style spot check
of information contained in the statements and will promptly bring to the
Escrow Agent's attention any discrepancies or errors which it detects.
6. DISTRIBUTIONS AND CLOSINGS. Upon Written Instructions, at each closing of
each offering of interests in the Fund, the Escrow Agent will wire
balances on deposit in the Subscription Account to the account designated
by or on behalf of the Fund. Such Written Instructions shall be sent to
the Escrow Agent no later than 2:00 p.m. on the date the Escrow Agent is
to wire such amount. In the event that a Potential Investor who has escrow
funds in the Subscription Account is not admitted into the Fund, upon
Written Instructions, the Escrow Agent shall promptly issue refunds to the
Potential Investor in the amount of the principal balance together with
accrued interest (if any). Such refunds shall be made by wire transfer.
7. INTEREST ON SUBSCRIPTION ACCOUNT. All interest earned on the escrow funds
deposited in the Subscription Account hereunder shall be added to and held
in the Subscription
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Account. The Escrow Agent will prepare and send notifications on Form 1099
for each calendar year.
8. REPURCHASES. The Fund from time to time may wire balances to the
Repurchase Account in connection with periodic repurchases of interests by
the Fund from its members. Upon Written Instructions, the Escrow Agent
shall issue promptly repurchase payments from the Repurchase Account by
wire transfer to the repurchasing member. Upon Written Instructions, the
Escrow Agent will withhold specified amounts from repurchasing members and
pay such amounts to the Fund or as otherwise directed in such Written
Instructions. Any interest earned on the balances in the Repurchase
Account from time to time will be for the account of the Fund and, to the
extent not used to pay repurchase proceeds to members of the Fund, will be
paid to the Fund.
9. TAX IDENTIFICATION NUMBER. All deposits to the Accounts shall be subject
to the Escrow Agent's receipt of a valid tax identification number for the
Fund, Manager or Potential Investor, as applicable. The Escrow Agent shall
be deemed to have received any such tax identification number which has
been provided to the Administrator.
10. COMPENSATION. Account transaction charges, as may be mutually agreed to in
writing by the Fund and Escrow Agent, will be billed to the Fund as an
out-of-pocket expense.
11. AMENDMENT. This Agreement may not be amended or supplemented, and no
provision hereof may be modified or waived, except by an instrument in
writing, signed by all of the parties hereto.
12. TERMINATION. This Agreement shall continue until terminated by either
party on 90 days' prior written notice; provided that the Escrow Agent
shall not be permitted to terminate this Agreement without the prior
written consent of the Fund except in conjunction with a
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termination of the Administration Agreement Upon the termination of this
Agreement and upon the delivery of the balance of the Accounts to a
successor escrow agent or such other person as may be designated by
Written Instructions, the Escrow Agent shall be released and discharged of
any and all further obligations hereunder.
If no successor Escrow Agent has been designated pursuant to Written
Instructions to receive the balance of the Accounts at the expiration of
the 90-day period, the Escrow Agent shall have no further obligation
hereunder except to hold the escrow funds as a depositary. Upon written
notification by the Fund of the appointment of the successor Escrow Agent,
the Escrow Agent shall promptly deliver the balance of the Accounts to
such successor, and the duties of the resigning Escrow Agent shall
thereupon in all respects terminate, and it shall be released and
discharged of any and all further obligations hereunder.
13. EXECUTION. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but such counterparts together shall
constitute one and the same instrument.
14. MISCELLANEOUS.
(a) All covenants and agreements contained in this Agreement by or on
behalf of the parties hereto shall bind and inure to the benefit of
such parties and their respective heirs, administrators, legal
representatives, successors and assigns, as the case may be.
(b) The headings in this Agreement are for convenience of reference only
and shall neither be considered as part of this Agreement, nor limit
or otherwise affect the meaning thereof.
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(c) This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of
Delaware. The parties hereto irrevocably submit to the non-exclusive
jurisdiction of the courts of the State of New York and Delaware.
(d) Each of the parties represents and warrants that it is duly
organized and validly existing under the laws of its own
jurisdiction with full power to carry on its business as now
conducted, to enter into this Agreement and to perform its
obligations hereunder. In addition each of the parties represents
and warrants that this Agreement has been duly and validly
authorized, executed and delivered by it, constitutes a valid and
legally binding obligation on it enforceable in accordance with its
terms and no statute, regulation, rule, order, judgement or contract
binding on it prohibits its execution or performance of this
Agreement.
15. NOTICES.
(a) Any notice, consent, instruction or other instrument or
communication required or permitted to be given hereunder by a party
may be delivered in person, sent by courier service or certified or
registered post, postage-prepaid, faxed or transmitted via e-mail to
the address of the other parties set forth below or such other
address as may be notified in writing to the other parties, and
shall be deemed to have been properly delivered or given hereunder
and shall be effective on (i) the date of delivery if delivered in
person or sent by Federal Express or other recognized courier who
obtains a signature acknowledging receipt; (ii) the date of
transmission, if faxed or transmitted via e-mail, provided that
receipt of a facsimile or e-mail is verified by telephone (and
failing such verification, only
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upon actual receipt); or (iii) five days after the same has been
tendered for delivery by the post if sent by certified or registered
post, postage prepaid.
(b) Notices to the Fund shall be sent to:
X.X. XXXXXX ATLAS GLOBAL LONG/SHORT EQUITY FUND, L.L.C.
c/o X.X. Xxxxxx Alternative Asset Management, Inc.
Attn: Xxxx X. Xxxxxxx, Chief Administrative Officer
1211, Avenue of the Americas, 00xx Xxxxx
Xxx Xxxx, XX 00000, X.X.X.
Fax: 000-000-0000
E-mail: Xxxx.Xxxxxxx@xxxxxxxx.xxx
With a copy, in the case of any notice from the Manager, to the
Escrow Agent at the address set forth below in subsection (c)
(c) Notices to the Escrow Agent shall be sent to:
PFPC Inc.
Attn: Xxxx X. Xxxxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
E-mail: xxxx.xxxxxxxx@xxxx.xxx
(d) Notices to the Manager shall be sent to:
X.X. XXXXXX ALTERNATIVE ASSET MANAGEMENT, INC.
Attn: Xxxx X. Xxxxxxx, Chief Administrative Officer
1211, Avenue of the Americas, 00xx Xxxxx
Xxx Xxxx, XX 00000, X.X.X.
Fax: 000-000-0000
E-mail: Xxxx.Xxxxxxx@xxxxxxxx.xxx
16. PARTIAL INVALIDITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
17. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding among the parties and supersedes all prior agreements and
understandings relating to the
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subject matter hereof; provided that, the parties may embody in one or
more separate documents their agreement, if any, with respect to delegated
duties and instructions.
18. ASSIGNMENT. This Agreement may not be assigned by any party to this
Agreement without the written consent of the other parties to this
Agreement except that the Escrow Agent may assign its rights to any
majority-owned direct or indirect subsidiary of the Escrow Agent or of The
PNC Financial Services Group, Inc., provided that the Escrow Agent gives
the Fund 30 days prior written notice of such assignment.
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IN WITNESS THEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
X.X. XXXXXX ATLAS GLOBAL LONG/SHORT EQUITY FUND, L.L.C.
By: Xxxxxxx Associates, L.L.C., its Managing Member
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman and Sole Member
X.X. XXXXXX ALTERNATIVE ASSET MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------
Name: Xxxx Xxxxxxx
Title: President and Chief Executive Officer
PFPC INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
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