ESCROW AGREEMENT
This
ESCROW AGREEMENT (the “Agreement”) is made and entered into this __ day
of _________, 20__, by and between FEG ABSOLUTE ACCESS TEI FUND LLC a Delaware
limited liability company (the “Fund”), UMB Fund Services, Inc., as record
keeper (“UMBFS”) and UMB Bank, n.a., a national banking association organized
and existing under the laws of the United States of America, as escrow agent
(the “Escrow Agent”).
WITNESSETH:
WHEREAS,
the Fund is a limited liability company which is authorized to offer and sell
limited liability company interests in the Fund (“Interests”) in reliance on
exemptions provided in the Securities Act of 1933, as amended, and state
securities laws for transactions not involving any public offering;
and
WHEREAS,
the Fund accepts subscription proceeds for Interests on the first business day
of each month and accepts requests for the repurchase of Interests on the first
business day of each month or such other time as determined by the Fund’s Board
of Directors; and
WHEREAS,
the Fund has been registered as an investment company under the Investment
Company Act of 1940, as amended (the “1940 Act”).
WHEREAS,
the Fund desires to appoint UMB Bank, n.a. as escrow agent for the purpose of
holding investment proceeds tendered by investors prior to the time such funds
are transferred to the Fund for investment.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto hereby agree as
follows:
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1.
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Appointment
and Delegation.
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The Fund hereby appoints UMB Bank, n.a.
as Escrow Agent, on the terms set forth in this Agreement. UMB Bank,
n.a. hereby agrees to serve as Escrow Agent on the terms set forth in this
Agreement. The Fund hereby authorizes UMBFS, in its capacity as
record keeper, to provide instructions to the Escrow Agent on the Fund’s behalf
in accordance with the terms of this Agreement.
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2.
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Procedures.
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(a) The
Fund will establish an escrow account with the Escrow Agent consisting of four
(4) segregated sub-accounts, the Subscription Sub-Account, the Repurchase
Sub-Account, the Income Sub-Account and the Holdback Sub-Account. Purchase
payments periodically received by UMBFS (the “Purchase Proceeds”) will be
deposited into the Subscription Sub-Account. Proceeds for periodic repurchases
of Interests by the Fund from its subscribers (“Repurchase Proceeds”) will be
deposited into the Repurchase Sub-Account, less a ten percent (10%) withholding
(the “Holdback Amount”), if applicable. Any Holdback Amount will be
deposited into the Holdback Sub-Account and any Income (as defined below) will
be deposited into the Income Sub-Account (the Subscription Sub-Account, the
Repurchase Sub-Account, Income Sub-Account and the Holdback Sub-Account shall be
referred to collectively as the “Escrow Accounts”).
(b) Simultaneously
with any deposit of Purchase Proceeds, UMBFS will deliver to the Escrow Agent a
cash letter (the “Cash Deposit Letter”) confirming the amount of the Purchase
Proceeds so delivered. In the event the Fund or UMBFS provides
written notice to the Escrow Agent that an underlying purchase order has been
revoked in the form of a cash letter (the “Purchase Reversal Letter”), the
Escrow Agent shall promptly (but in no event later than the close of business on
the day of receipt of such Purchase Reversal Letter in accordance with
subparagraph (d) of Paragraph 4) transfer from the Subscription Sub-Account the
Purchase Proceeds specified in the Purchase Reversal Letter to UMBFS in
accordance with the payment procedures in Paragraph 4. The Escrow
Agent shall have no duty or obligation with respect to the collection of any
Purchase Proceeds.
(c) On
the last business day of each calendar month, UMBFS will deliver to the Escrow
Agent a cash letter instructing the Escrow Agent to disburse the Purchase
Proceeds, if any, on deposit (the “Cash Disbursement Letter”).
(d) The
Escrow Agent shall provide the Fund and UMBFS with a statement of the assets
held and transactions of the Escrow Accounts on a monthly basis and shall
provide electronic access on a daily basis. At the Escrow Agent’s
request, UMBFS shall provide periodic summaries of Escrow Account
activity.
(e) The
Escrow Agent shall invest all amounts deposited in the Escrow Accounts with it
hereunder, and earnings thereon, if any, in the UMB Money Market Special
Account. All monies must be deposited to the Escrow Accounts prior to
4:00 p.m. CT in order to receive credit for that day’s earnings. All
investment earnings on the Escrow Accounts (“Income”) shall be transferred on
the first business day of each month to the Income Sub-Account. In
turn, the earnings will be transferred to a UMBFS custody account and paid
on a pro-rata basis to the respective members of the Fund (“Investors”) on the
first business day of the month.
(f) The
Fund may from time to time deposit Repurchase Proceeds in the Repurchase
Sub-Account. On the last business day of each calendar quarter during
which repurchases occur, UMBFS will deliver to the Escrow Agent a cash letter to
disburse the Repurchase Proceeds, if any, on deposit in custody, and a cash
letter (each, a “Repurchase Disbursement Letter”) to move the Repurchase
Proceeds out of the Repurchase Sub-Account for disbursement to
Investors.
(g) On
an annual basis, UMBFS will deliver to the Escrow Agent a cash letter to
disburse the Holdback Amount, if any, on deposit in the Holdback Sub-Account
(the “Holdback Disbursement Letter”).
(h) In
the event an adjustment needs to be made in connection with any money movement
hereunder, UMBFS shall deliver to the Escrow agent a cash letter specifying the
corrective action to be taken.
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(i) Prior
to delivery, in accordance with the terms of this Agreement, to it or its
designated agents of the Purchase Proceeds or Repurchase Proceeds, the Fund or
its agents shall have no title, right, claim, lien or any other interest in the
funds held in escrow hereunder, and such funds shall under no circumstances be
available to the Fund or its agents or their creditors for payment or
reimbursement for liabilities or indebtedness.
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3.
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Compensation.
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For its services hereunder, the Escrow
Agent shall be entitled to a one-time account acceptance fee of $500 plus
an annual escrow fee of $600 for the Escrow Accounts and transaction fees of $5
per deposit and/or distribution. In addition to the foregoing fees,
all reasonable out-of-pocket expenses relating to the administration of this
Agreement and the Escrow Accounts such as, but not limited to, wire fees,
postage, shipping, courier, telephone and facsimile charges will be paid
directly by the Fund.
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4.
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Payment
Procedures.
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(a)
Whenever payments are required to be made to the Escrow Agent under this
Agreement, such payments shall be made by electronic transfer per the following
instructions:
UMB Bank, n.a., Kansas City,
Missouri
ABA # 000000000
A/C # __________________
A/C Name: Trust Clearing
Attn: Xxxx Xxxxxxx
(b)
Whenever
payments are required to be made by the Escrow Agent to UMBFS under this
Agreement, such payments shall be made by electronic transfer per the following
instructions:
UMB Bank,
n.a., Kansas City, Missouri
ABA #000000000
A/C # 987-173-7187
(c) Every
cash letter delivered to the Escrow Agent hereunder pursuant to Paragraph 2
shall bear the signature of two (2) authorized UMBFS signers. If
requested by UMBFS, each cash letter shall also bear the countersignature of two
(2) authorized Fund signers. In connection with the execution of this
Agreement, UMBFS shall deliver to the Escrow Agent, and the Fund shall deliver
to UMBFS, a list of authorized signers, together with a certificate of
incumbency and specimen signatures. The party providing such
certificate may provide an updated certificate evidencing the appointment,
removal or change of authority of any authorized signer, it being understood
that the party relying on such certificate shall not be held to have notice of
any change in the authority of any authorized signer until receipt of written
notice thereof.
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(d) A
cash letter must be received by the Escrow Agent by 3:00 p.m. CT on the day such
cash letter is transmitted in order for the instructions contained in such cash
letter to be honored on that day.
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5.
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Representations.
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The Fund
represents and warrants as follows:
(a) it
is duly organized and in good standing under the laws of the State of Delaware
and all necessary action has been taken by it and it is duly authorized to enter
into this Agreement;
(b) its
Tax Identification Number is 00-0000000;
(c) this
Agreement and all other documents related to the transactions described herein
have been duly executed and delivered by the Fund and constitute the legal,
valid and binding obligations of the Fund, enforceable in accordance with their
respective terms;
(d) the
execution, delivery and performance of this Agreement and all other documents
related to the transactions described herein by the Fund do not and will not
breach or violate or cause a default under its Operating Agreement or By-Laws or
any provision of any agreement, instrument, judgment, injunction or order
applicable to or binding upon it.
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6.
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Miscellaneous.
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It is understood and agreed, further,
that the Escrow Agent shall:
(a) be
under no duty to pay and transfer any monies hereunder, unless the same shall
have been first received by the Escrow Agent pursuant to the provisions of this
Agreement;
(b) be
under no duty to accept any information from any person or entity other than the
Fund or UMBFS, and then only to the extent and in the manner expressly provided
for in this Agreement;
(c) act
hereunder as a depository only and be protected in acting upon any written
instruction or notice provided by the Fund or UMBFS pursuant to this Agreement
and the information contained therein without responsibility to determine the
validity or sufficiency of the same, and be protected in acting upon any other
notice, opinion, request, certificate, approval, consent or other paper
delivered to it and represented to it to be genuine and to be signed by the
proper party or parties provided that Escrow Agent has not acted fraudulently,
in bad faith, in reckless disregard of its duties, negligently or with willful
misfeasance;
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(d) be
indemnified and held harmless by the Fund against any claim made against it by
reason of its acting or failing to act in connection with any of the
transactions contemplated hereby and against any loss, liability, cost, suit or
expense, including the expense of defending itself against any claim of
liability it may sustain in carrying out the terms of this Agreement except such
claims which are occasioned by its fraud, bad faith, reckless disregard of its
duties, negligence or willful misfeasance;
(e) have
no liability or duty to inquire into the terms and conditions of any
subscriptions for Interests, and that its duties and responsibilities shall be
limited to those expressly set forth under this Agreement and are purely
ministerial in nature;
(f) be
permitted to consult with counsel of its choice, including in-house counsel, and
shall not be liable for any action taken, suffered or omitted by it in good
faith in accordance with the advice of such counsel, provided, however, that
nothing contained in this Subparagraph (f), nor any action taken by the Escrow
Agent, or of any such counsel, shall relieve the Escrow Agent from liability for
any claims which are occasioned by its fraud, bad faith, reckless disregard of
its duties, negligence or willful misfeasance, all as provided in Subparagraph
(d) above;
(g) not
be bound by any amendment or revocation of this Agreement, unless the same shall
be in writing and signed by all of the parties of this Agreement;
(h) be
entitled to refrain from taking any action other than to keep all property held
by it in escrow hereunder until it shall be directed otherwise in writing by the
Fund, or by a final judgment by a court of competent jurisdiction, provided that
it shall be uncertain as to its duties and rights hereunder (including, without
limitation, the receipt of conflicting instructions or directions from any of
the parties hereto or any third parties);
(i) have
no liability for following the instructions herein contained or expressly
provided for, or written instructions given by, the Fund or UMBFS, in accordance
with the terms of this Agreement;
(j) have
the right, at any time, to resign hereunder by giving written notice of its
resignation to the Fund at the address as set forth in Subparagraph (l) hereof,
at least sixty (60) days before the date specified for such resignation to take
effect, and upon the effective date of such resignation;
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(i)
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all
cash and other funds and all other property then held by the Escrow Agent
hereunder shall be delivered by it to such successor Escrow Agent as may
be designated in writing by the Fund, whereupon the Escrow Agent’s
obligations hereunder shall cease and
terminate;
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(ii)
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if
no such successor Escrow Agent has been designated by such date, all
obligations of the Escrow Agent hereunder shall, nevertheless, cease and
terminate, and the Escrow Agent’s sole responsibility thereafter shall be
to keep all property then held by it and to deliver the same to a person
designated in writing by the Fund or in accordance with the directions of
a final order or judgment of a court of competent jurisdiction; yet, if no
such designation, order or judgment is received by Escrow Agent within
sixty (60) days after its giving such resignation notice, it is
unconditionally and irrevocably authorized and empowered to petition a
court of competent jurisdiction for
directions.
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(k) be
reimbursed by the Fund upon its request for all reasonable costs, fees, charges,
expenses, disbursements and advances incurred or made by it in accordance with
any provision of this Agreement, or as a result of the acceptance of this
Agreement.
(l) all
deliveries and notices to the Escrow Agent shall be in writing and shall be sent
or delivered to:
UMB Bank,
n.a., as Escrow Agent
Attn: Xxxx
X. Xxxxxxx, ext. 3017
0000
Xxxxx Xxxxxxxxx, 0xx
Xxxxx
Xxxxxx
Xxxx, XX 00000
Facsimile:
(000) 000-0000
All
deliveries and notices hereunder to the Fund shall be in writing and shall be
sent or delivered to:
Attn:
Chief Operating Officer
Copy: General
Counsel
000 Xxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
All
deliveries and notices hereunder to UMBFS shall be in writing and shall be sent
or delivered to:
UMB Fund
Services, Inc.
Attn:
Xxxxxxx X. Xxxxxx Xxxxxx
000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
(m) Nothing
in this Agreement is intended to or shall confer upon anyone other than the
parties hereto any legal or equitable right, remedy or claim. This
Agreement shall be construed in accordance with the laws of the State of
Missouri.
(n) This
Agreement may be executed in multiple counterparts, each of which shall be
regarded for all purposes as an original, and such counterparts shall constitute
but one and the same instrument. In addition, the transaction
described herein may be conducted and related documents may be stored by
electronic means. Copies, telecopies, facsimiles, electronic files
and other reproductions of original executed documents shall be deemed to be
authentic and valid counterparts of such original documents for all purposes,
including the filing of any claim, action or suit in the appropriate court of
law.
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(o) In
order to comply with provisions of the USA PATRIOT Act of 2001, as amended from
time to time, Escrow Agent may request certain information and/or documentation
to verify, confirm and record identification of persons or entities who are
parties to the Agreement.
(p) Each
of the Escrow Agent and UMBFS agree on behalf of itself and its employees to
treat confidentially and as proprietary information of the Fund all records
relative to the Fund’s members, not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder, and
not to disclose such information except where the Escrow Agent and/or UMBFS may
be exposed to civil or criminal proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities or court
process, when subject to governmental or regulatory audit or investigation, or
when so requested by the Fund. In case of any requests or demands for inspection
of the records of the Fund, the party receiving the request or demand will
endeavor to notify the Fund promptly and to secure instructions from a
representative of the Fund as to such inspection unless prohibited by law from
making such notification. Records and information which have become
known to the public through no wrongful act of the Escrow Agent or UMBFS or any
of their employees, agents or representatives, and information which was already
in the possession of the Escrow Agent or UMBFS prior to the date hereof, shall
not be subject to this paragraph. This provision will survive the
termination of this Agreement.
(q) If
by reason of Force Majeure, one of the parties hereto is unable in whole or in
part to act in accordance with this Agreement (“Non-Performing Party”), the
Non-Performing Party shall not be deemed in default during the continuance of
such inability provided, however, that the other parties to this Agreement shall
have the right to terminate this Agreement upon written notice to the other
parties if the Non-Performing Party is unable to satisfy its obligations under
this Agreement for fourteen (14) days due to such Force Majeure.
The term "Force Majeure" as used herein
shall mean without limitation: acts of God; strikes or lockout; acts of public
enemies; insurrections; riots; epidemics; lightening; earthquakes; fire; storms;
flood; washouts; droughts; arrests; restraint of government and people; civil
disturbances; and explosions.
The Non-Performing Party shall,
however, remedy, with all reasonable dispatch, any such cause to the extent
within its reasonable control, which prevents it from carrying out its
obligations contained herein.
(r) Any
waiver by either party of any provision or condition of this Agreement shall not
be construed or deemed to be a waiver of any other provision or condition of
this Agreement, nor a waiver of a subsequent breach of the same provision or
condition.
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(s) If
any part, term or provision of this Agreement is held to be illegal, in conflict
with any law or otherwise invalid by any court of competent jurisdiction, the
remaining portion or portions shall be considered severable and shall not be
affected, and the rights and obligations of the parties shall be construed and
enforced as if this Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
(t) Any
party hereto may terminate this Agreement upon 60 days advance written
notice. However, Escrow Agent and UMBFS agree to waive such notice
requirement in the event the Fund’s Board of Directors decides to liquidate the
Fund.
(u) Escrow
Agent shall retain all records relating to the service provided and supporting
documentation for a minimum of five (5) years after its
creation. During the term of this Agreement, Escrow Agent agrees to
make such records and supporting documentation available to the Fund for any
audit, including, but not limited to, by any state or federal government
entity. Notwithstanding anything herein to the contrary, upon the
termination of this Agreement or the liquidation of the Fund, the UMBFS and
Escrow Agent shall deliver the records of the Fund in the form maintained by the
UMBFS and Escrow Agent (to the extent permitted by applicable license
agreements) to the Fund or person(s) designated by the Fund at the Fund’s cost
and expense, and thereafter the Fund or its designee shall be solely responsible
for preserving the records for the periods required by all applicable laws,
rules and regulations. UMBFS and Escrow Agent shall be entitled to maintain a
copy of such records for the sole purpose of defending themselves against any
action arising under or as a result of this Agreement or as otherwise required
or permitted by law. The Fund shall be responsible for all expenses
associated with the movement (or duplication) of records and materials and
conversion thereof to a successor service providers, including all reasonable
trailing expenses UMBFS and Escrow Agent. In addition, in the event
of termination of this Agreement, or the proposed liquidation or merger of the
Fund, and the Fund requests UMBFS or Escrow Agent to provide additional services
in connection therewith, UMBFS or Escrow Agent shall provide such services and
be entitled to such compensation as the parties may mutually agree.
(v) This
Agreement, together with the Schedules attached hereto, constitutes the entire
Agreement of the parties hereto. No provisions of this Agreement may
be amended, modified or waived, in any manner except in writing, properly
executed by both parties hereto.
(w) Nothing
in this Agreement is intended to, or shall be deemed to constitute a
partnership, association or joint venture between the parties hereto in the
conduct of the provisions of this Agreement. UMBFS and Escrow Agent
shall each have at all times the status of an independent contractor without the
right or authority to impose tort, contractual or any other liability on the
Fund.
(x) The
undersigned represent and warrant that they are duly authorized to execute this
Agreement on behalf of the respective parties.
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7.
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Tax
Reporting.
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The parties hereto agree that for
purposes of tax reporting, all interest or other income, if any, attributable to
the Escrow Accounts pursuant to this Agreement shall be allocable to the
Fund. The Fund agrees to provide the Escrow Agent with an Internal
Revenue Service Form W-9 upon execution of this Agreement. The Fund
understands that if such tax reporting documentation is not so certified to the
Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code, as
amended from time to time, to withhold a portion of any interest or other income
earned on the investment of monies or other property held by the Escrow Agent
pursuant to this Agreement. The Escrow Agent will prepare and send
notifications on Form 1099 for each calendar year for which such Form is
required during the term hereof.
IN
WITNESS WHEREOF, the parties hereto have caused the Escrow Agreement to be
executed by their respective duly authorized officers.
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FEG
ABSOLUTE ACCESS TEI FUND
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LLC
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By:
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Title:
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UMB
BANK, N.A., AS ESCROW AGENT
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By:
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Title:
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UMB
FUND SERVICES, INC.
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By:
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Title:
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