Exhibit 99.(k)(i)
ESCROW AGENCY SERVICE AGREEMENT
AGREEMENT, made as of January __, 2003, by and between XXX XXXX/SHORT
HEDGE FUND LLC, a limited liability company organized and existing under the
laws of the State of Delaware having its principal office at
_____________________ (hereinafter referred to as "Customer"), and THE BANK OF
NEW YORK, a New York banking company having its principal office and place of
business at __________________________ (hereinafter referred to as the "Bank").
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set forth, the
parties hereto covenant and agree as follows:
1. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement,
the Customer, on behalf of the Fund(s), hereby employs and appoints the Bank to
act as, and the Bank agrees to act as the Fund's Escrow Agent whereby the Bank
shall hold in escrow and shall distribute "Escrow Property" (as defined herein)
in accordance with and subject to the following terms and conditions. "Escrow
Property" is referred to herein as funds received by the Bank as Escrow Agent
from Investors, plus any interest earned thereon, less any interst distributed
in accordance with this Agreement;
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with the terms and conditions of the Fund
Agreement, attached hereto as Exhibit A, the Bank shall:
(i) Communicate and confirm with the Transfer Agent
and/or Subscription Desk in regard to funds to be held as Escrow Property until
Trade Date of the Fund;
(ii) Invest Escrow Property in BNY Deposit Reserve as
necessary, and distribute interest earned to respective Investors, accordingly;
(iii) Prepare confirmations, including an escrow account
transaction statement, for issuance to Investors, Distribution Agents and
applicable third parties;
(iv) Arrange for the transmittal of monies received for
purchasing Shares of the Fund, from the Escrow Account to the custody account
established by Customer with The Bank of New York under that certain Custody
Agreement dated February __, 2003 on Trade Date;
(v) Prepare and deliver tax-reporting documentation to
Shareholders in accordance with Internal Revenue Service guidelines. This
includes the reporting of income with respect to that earned on investment in
BNY Deposit Reserves;
(vi) Maintain all pertinent documentation accumulated in
the execution of its duties hereunder as the Bank may deem expedient, other than
those which the Bank is itself required to maintain pursuant to applicable laws
and regulations;
(vii) Unless otherwise instructed by Customer, deliver
Escrow Property, less distributed interest, to the Custody Account the Trade
Date next succeeding receipt of such Escrow Property;
(b) Capitalized terms used in paragraph 1 and not defined
herein shall have the respective meanings given in the Fund Agreement.
2. TERMS AND CONDITIONS:
2.1 The duties, responsibilities and obligations of the Escrow Agent
shall be limited to those expressly set forth herein and no duties,
responsibilities or obligations shall be inferred or implied. The Escrow Agent
shall not be subject to, nor required to comply with, any other agreement
between or among any or all of Customer and any Investor, even though reference
thereto may be made herein, or to comply with any direction or instruction
(other than those contained herein or delivered in accordance with this Escrow
Service Agreement) from any Customer or any entity acting on its behalf. The
Escrow Agent shall not be required to, and shall not, expend or risk any of its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder.
2.2 This Agreement is for the exclusive benefit of the parties hereto
and their respective successors hereunder, and shall not be deemed to give,
either express or implied, any legal or equitable right, remedy, or claim to any
other entity or person whatsoever.
2.3 If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects the Escrow Property (including
but not limited to orders of attachment or garnishment or other forms of levies
or injunctions or stays relating to the transfer of the Escrow Property), the
Escrow Agent is authorized to comply therewith in any manner as it or its legal
counsel of its own choosing deems appropriate; and if the Escrow Agent complies
with any such judicial or administrative order, judgment, decree, writ or other
form of judicial or administrative process, the Escrow Agent shall not be liable
to any of the parties hereto or to any other person or entity even though such
order, judgment, decree, writ or process may be subsequently modified or vacated
or otherwise determined to have been without legal force or effect.
2.4 (a) The Escrow Agent shall not be liable for any action taken or
omitted or for any loss or injury resulting from its actions or its performance
or lack of performance of its duties hereunder in the absence of gross
negligence or willful misconduct on its part.
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In no event shall the Escrow Agent be liable (i) for acting in accordance with
or relying upon any instruction, notice, demand, certificate or document from
Customer or any entity acting on behalf of Customer, (ii) for any consequential,
punitive or special damages, (iii) for the acts or omissions of its nominees,
correspondents, designees, sub-agents or sub-custodians, or (iv) for an amount
in excess of the value of the Escrow Property, valued as of the date of deposit.
(b) If any fees, expenses or costs incurred by, or any
obligations owed to, the Escrow Agent hereunder are not promptly paid when due,
the Escrow Agent may reimburse itself therefor from the Escrow Property and may
sell, convey or otherwise dispose of any Escrow Property for such purpose.
(c) The Escrow Agent may consult with legal counsel at the
expense of Customer as to any matter relating to this Escrow Service Agreement,
and the Escrow Agent shall not incur any liability in acting in good faith in
accordance with any advice from such counsel.
(d) The Escrow Agent shall not incur any liability for not
performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of the Escrow Agent
(including but not limited to any act or provision of any present or future law
or regulation or governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
2.5 Unless otherwise specifically set forth herein, the Escrow Agent
shall proceed as soon as practicable to collect any checks or other collection
items at any time deposited hereunder. All such collections shall be subject to
the Escrow Agent's usual collection practices or terms regarding items received
by the Escrow Agent for deposit or collection. The Escrow Agent shall not be
required, or have any duty, to notify anyone of any payment or maturity under
the terms of any instrument deposited hereunder, nor to take any legal action to
enforce payment of any check, note or security deposited hereunder or to
exercise any right or privilege which may be afforded to the holder of any such
security.
2.6 The Escrow Agent shall provide to Customer and each Investor
monthly statements identifying transactions, transfers or holdings of the Escrow
Property and each such statement shall be deemed to be correct and final upon
receipt thereof by the Customer and Investor unless the Escrow Agent is notified
in writing to the contrary within thirty (30) business days of the date of such
statement.
2.7 The Escrow Agent shall not be responsible in any respect for the
form, execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the identity,
authority or rights of persons executing or delivering or purporting to execute
or deliver any such document, security or endorsement.
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2.8 Notices, instructions or other communications shall be in writing
and shall be given to the address as designated by the Escrow Agent. Notices to
the Escrow Agent shall be deemed to be given when actually received by the
Escrow Agent in proper order. The Escrow Agent is authorized to comply with and
rely upon any notices, instructions or other communications believed by it to
have been sent or given by the Customer or by a person or persons authorized by
the Customer. Whenever under the terms hereof the time for giving a notice or
performing an act falls upon a Saturday, Sunday, or banking holiday, such time
shall be extended to the next day on which the Escrow Agent is open for
business.
2.9 The Customer shall be liable for and shall reimburse and indemnify
the Escrow Agent and hold the Escrow Agent harmless from and against any and all
claims, losses, liabilities, costs, damages or expenses (including reasonable
attorneys' fees and expenses) (collectively, "Losses") arising from or in
connection with or related to this Escrow Service Agreement or being the Escrow
Agent hereunder (including but not limited to Losses incurred by the Escrow
Agent in connection with its successful defense, in whole or in part, of any
claim of gross negligence or willful misconduct on its part), provided, however,
that nothing contained herein shall require the Escrow Agent to be indemnified
for Losses caused by its gross negligence or willful misconduct.
2.10 (a) The Customer may remove the Escrow Agent at any time by
giving to the Escrow Agent thirty (30) calendar days' prior notice in writing
signed by all Customer. The Escrow Agent may resign at any time by giving to the
Customer fifteen (15) calendar days' prior written notice thereof.
(b) Within ten (10) calendar days after giving the foregoing
notice of removal to the Escrow Agent or receiving the foregoing notice of
resignation from the Escrow Agent, Customer shall agree on and appoint a
successor Escrow Agent. If a successor Escrow Agent has not accepted such
appointment by the end of such 10-day period, the Escrow Agent may, in its sole
discretion, deliver the Escrow Property to the Customer or may apply to a court
of competent jurisdiction for the appointment of a successor Escrow Agent or for
other appropriate relief. The costs and expenses (including reasonable
attorneys' fees and expenses) incurred by the Escrow Agent in connection with
such proceeding shall be paid by, and be deemed an obligation of, the Customer.
(c) Upon receipt of the identity of the successor Escrow Agent,
the Escrow Agent shall either deliver the Escrow Property then held hereunder to
the successor Escrow Agent, less Escrow Agent's fees, costs and expenses or
other obligations owed to the Escrow Agent, or hold such Escrow Property (or any
portion thereof), pending distribution, until all such fees, costs and expenses
or other obligations are paid.
(d) Upon delivery of the Escrow Property to the successor
Escrow Agent, the Escrow Agent shall have no further duties, responsibilities or
obligations hereunder.
2.11 (a) In the event of any ambiguity or uncertainty hereunder or
in any notice, instruction or other communication received by the Escrow Agent
hereunder, the Escrow Agent may, in its sole discretion, refrain from taking any
action other than retain
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possession of the Escrow Property, unless the Escrow Agent receives written
instructions, signed by all Customer, which eliminates such ambiguity or
uncertainty.
(b) In the event of any dispute between or conflicting claims
by or among Customer and/or any other person or entity with respect to any
Escrow Property, the Escrow Agent shall be entitled, in its sole discretion, to
refuse to comply with any and all claims, demands or instructions with respect
to such Escrow Property so long as such dispute or conflict shall continue, and
the Escrow Agent shall not be or become liable in any way to Customer for
failure or refusal to comply with such conflicting claims, demands or
instructions. The Escrow Agent shall be entitled to refuse to act until, in its
sole discretion, either (i) such conflicting or adverse claims or demands shall
have been determined by a final order, judgment or decree of a court of
competent jurisdiction, which order, judgment or decree is not subject to
appeal, or settled by agreement between the conflicting parties as evidenced in
a writing satisfactory to the Escrow Agent or (ii) the Escrow Agent shall have
received security or an indemnity satisfactory to it sufficient to hold it
harmless from and against any and all Losses which it may incur by reason of so
acting. The Escrow Agent may, in addition, elect, in its sole discretion, to
commence an interpleader action or seek other judicial relief or orders as it
may deem, in its sole discretion, necessary. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection with such
proceeding shall be paid by, and shall be deemed an obligation of Customer.
2.12 This Agreement shall be interpreted, construed, enforced and
administered in accordance with the internal substantive laws (and not the
choice of law rules) of the State of New York. Customer hereby submits to the
personal jurisdiction of and each agrees that all proceedings relating hereto
shall be brought in courts located within the City and State of New York or
elsewhere as the Escrow Agent may select. Customer hereby waives the right to
trial by jury and to assert counterclaims in any such proceedings. To the extent
that in any jurisdiction Customer may be entitled to claim, for itself or its
assets, immunity from suit, execution, attachment (whether before or after
judgment) or other legal process, each hereby irrevocably agrees not to claim,
and hereby waives, such immunity. Customer waives personal service of process
and consents to service of process by certified or registered mail, return
receipt requested, directed to it at the address last specified for notices
hereunder, and such service shall be deemed completed ten (10) calendar days
after the same is so mailed.
2.13 Except as otherwise permitted herein, this Escrow Service
Agreement may be modified only by a written amendment signed by all the parties
hereto, and no waiver of any provision hereof shall be effective unless
expressed in a writing signed by the party to be charged.
2.14 The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall not
preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.
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2.15 Customer hereby represents and warrants (a) that this Escrow
Service Agreement has been duly authorized, executed and delivered on its behalf
and constitutes its legal, valid and binding obligation and (b) that the
execution, delivery and performance of this Escrow Service Agreement by the
Custoemr do not and will not violate any applicable law or regulation.
2.16 The invalidity, illegality or unenforceability of any provision of
this Agreement shall in no way affect the validity, legality or enforceability
of any other provision; and if any provision is held to be enforceable as a
matter of law, the other provisions shall not be affected thereby and shall
remain in full force and effect.
2.17 This Agreement shall constitute the entire agreement of the
parties with respect to the subject matter and supersedes all prior oral or
written agreements in regard thereto.
2.18 This Agreement shall terminate upon the distribution of all Escrow
Property from the Account. The provisions of these Terms and Conditions shall
survive termination of this Escrow Service Agreement and/or the resignation or
removal of the Escrow Agent.
2.19 No printed or other material in any language, including
prospectuses, notices, reports, and promotional material which mentions "The
Bank of New York" by name or the rights, powers, or duties of the Escrow Agent
under this Agreement shall be issued by any other parties hereto, or on such
party's behalf, without the prior written consent of the Escrow Agent.
2.20 The headings contained in this Agreement are for convenience of
reference only and shall have no effect on the interpretation or operation
hereof.
2.21 This Escrow Service Agreement may be executed by each of the
parties hereto in any number of counterparts, each of which counterpart, when so
executed and delivered, shall be deemed to be an original and all such
counterparts shall together constitute one and the same agreement.
2.22 The Escrow Agent does not have any interest in the Escrowed
Property held hereunder but is serving as escrow holder only and having only
possession thereof. Customer shall pay or reimburse the Escrow Agent upon
request for any transfer taxes or other taxes relating to the Escrowed Property
incurred in connection herewith and shall indemnify and hold harmless the Escrow
Agent any amounts that it is obligated to pay in the way of such taxes. Any
payments of income from this Escrow Account shall be subject to withholding
regulations then in force with respect to United States taxes. The parties
hereto will provide the Escrow Agent with appropriate W-9 forms for tax I.D.,
number certifications, or W-8 forms for non-resident alien certifications. It is
understood that the Escrow Agent shall be responsible for income reporting only
with respect to income earned on investment of funds, which are a part of the
Escrowed Property and is not responsible for any other reporting.
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2.23 The provisions of the Distribution of the Escrow Property and
paragraphs 2.9 and 2.22 shall survive the termination of this Escrow Service
Agreement or the resignation or removal of the Escrow Agent.
IN WITNESS WHEREOF, each of the parties have caused this Escrow Service
Agreement to be executed by a duly authorized officer as of the day and year
first written above.
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XXX XXXX/SHORT HEDGE FUND LLC
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Name:
Title:
THE BANK OF NEW YORK,
as Escrow Agent
By:
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Name:
Title:
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