Exhibit (k)(1)
FORM OF ESCROW AGREEMENT
THIS AGREEMENT is made and entered into as of [ ], 2005, by and
between Xxxxxxx Xxxxx Hedge Fund Partners Registered Fund, LLC, a Delaware
limited liability company (the "Fund") and SEI Investments Global Funds
Services, a Delaware business trust ("SEI" or the "Escrow Agent").
WITNESSETH
WHEREAS, the Fund has retained SEI to provide certain administration,
accounting and investor services pursuant to an Administration Agreement
dated as of [ ], 2005, by and between SEI and the Fund (the "Administration
Agreement"); and
WHEREAS, the Fund desires that SEI also provide services as escrow
agent for the purpose of receiving payments from potential subscribing
members in the Fund (the "Potential Investors") and SEI 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) "Instructions" mean (i) oral instructions received by SEI
from any person duly authorized by the Fund, to give such instructions
on behalf of the Fund (an "Authorized Person") or from a person
reasonably believed by SEI to be an Authorized Person, or (ii) written
instructions received by the Escrow Agent and signed by an officer of
the Fund, or any other person duly authorized by the Fund, to give
such instructions on behalf of the Fund. Such written instructions may
be delivered by hand, mail, facsimile, cable, telex, telegram or
electronic mail. Any Instruction terminating this Agreement must be
given by written instruction and may be delivered only by hand or
mail. The Fund shall file from time to time with the Escrow Agent a
copy, certified by an officer of the Fund, of each resolution of the
Fund authorizing the person or persons to give Instructions. Such
resolution shall include certified signatures of such persons
authorized to give Instructions. Such certificate 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 Fund to
the contrary. The Escrow Agent may rely upon and shall be protected
for any action or omission it takes pursuant to Instructions if it, in
good faith, believes such Instructions to be genuine. Unless otherwise
provided in this Agreement, the Escrow Agent shall act only upon
Instructions. The Escrow Agent shall be entitled to assume that any
Instruction received hereunder is not in any way inconsistent with the
provisions of the Fund's limited liability company agreement or this
Agreement or of any vote, resolution or proceeding of the Fund's Board
of Managers or its members, unless and until the Escrow Agent receives
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, gross
negligence or reckless disregard of such duties.
(d) Notwithstanding anything in this Agreement to the contrary,
neither party to this Agreement nor its affiliates, nor their
respective officers, directors, trustees, members, managers or agents,
shall be liable to the other party, its affiliates or their respective
officers, directors, trustees, members, managers or agents for any
consequential, special or indirect losses or damages in connection
with any matter arising under this Agreement, whether or not the
likelihood of such losses or damages was known by any such person.
(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, provided it has acted in
accordance with the standard of care set forth in clause (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.
(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 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, bad faith, gross
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 the
investment of funds held in escrow by the Escrow Agent pursuant to
this Agreement, provided that such investment shall have been made in
accordance with the terms of this Agreement. These indemnities shall
survive the resignation of the Escrow Agent or the expiration or any
termination of this Escrow Agreement.
(g) The Escrow Agent shall have no duties under this Agreement
except those specifically set forth in this Agreement.
(h) The Escrow Agent shall have the right at any time it deems
appropriate to seek an adjudication in a court of competent
jurisdiction as to the respective rights of the parties hereto where
there is a reasonable basis for doing so and shall not be held liable
by any party hereto for any delay or the consequences of any delay
occasioned by such resort to court.
(i) The Escrow Agent shall notify promptly an officer of the Fund
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 between the Fund and SEI.
4. DEPOSIT OF ESCROW FUND. The Escrow Agent shall establish an account at
Wachovia Bank, or a similar banking institution agreed to by the Fund, in
the name of "Xxxxxxx Xxxxx Hedge Fund Partners Registered Fund, LLC, Escrow
Account for the Benefit of Investors" (the "Subscription Account") and a
separate and distinguishable account in the name of "Xxxxxxx Sachs Hedge
Fund Partners Registered Fund, LLC, Repurchase Account" (the "Repurchase
Account", and, together with the Subscription Account, the "Accounts"). The
Escrow Agent shall promptly deposit in the Subscription Account checks
remitted by Potential Investors and made payable to the Fund. Potential
Investors also may deposit monies in the Subscription Account by wire
transfer pursuant to instructions provided to them by the Fund. Balances on
deposit in the Subscription Account will earn interest at prevailing market
rates pursuant to arrangements approved by the Fund which will be credited
to the Accounts in accordance with Section 7 of this Agreement.
5. STATEMENTS. During the term of this Agreement, the Escrow Agent shall
provide the Fund with (a) a statement containing the beginning balance in
each Account as well as all principal and income transactions for the
statement period, promptly following the end of each calendar month, and
(b) a daily summary of amounts deposited and the status of available funds.
The Fund shall be responsible for reconciling such statements and for
notifying the Escrow Agent of any inaccuracies in any such statement within
90 days after the Escrow Agent provides the statement to the Fund.
6. DISTRIBUTIONS AND CLOSINGS. Upon Instructions, at each closing of each
offering of interests in the Fund, the Escrow Agent will wire principal
balances on deposit in the Subscription Account to the account designated
by the Fund. Although the Escrow Agent shall endeavor to wire such
principal balances to the account designated by the Fund regardless of when
Instructions are delivered, the Escrow Agent shall only be obligated to do
so if Instruction are sent to the Escrow Agent by 2:00 p.m. on the closing
date with respect to each closing. In the event that a Potential Investor
who has escrow funds in the Subscription Account is not admitted into the
Fund, upon Instructions, the Escrow Agent shall promptly issue refunds to
the Potential Investor in the amount of the principal balance with accrued
interest. Such refunds shall be made in check form or by wire transfer to
the brokerage account of the Potential Investor, as designated in such
Instructions.
7. INTEREST. All interest earned on the escrow funds deposited in the
Accounts hereunder shall be added to and held in the Accounts. With respect
to each closing, interest attributable to each Potential Investor will be
calculated based upon its balance and duration in the Subscription Account
and credited to such investor's account as interest in the Fund.
Notwithstanding the foregoing, with respect to any closing, upon
Instructions requesting that the interest attributable to a Potential
Investor be paid to such Potential Investor directly, the Escrow Agent
shall promptly issue such interest payment in check form to such Potential
Investor (along with a cover letter, with a copy to the Fund). The Escrow
Agent shall prepare and send notifications on Form 1099 for each calendar
year with respect to each investor to whom interest was paid pursuant to
the foregoing sentence.
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 Instructions, the Escrow Agent shall issue
promptly repurchase payments from the Repurchase Account by check or wire
transfer, as indicated in the Instructions, to the repurchasing member or
to Xxxxxxx Xxxxx Hedge Fund Strategies LLC ("HFS") in respect of any fees
payable to HFS in connection with such redemption, as the case may be. Upon
Instructions, the Escrow Agent will withhold specified amounts from
repurchasing members. Any interest earned thereon will be credited to the
accounts of 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 or Potential Investor, as applicable.
10. COMPENSATION. In consideration of the Escrow Agent's services
hereunder, the Fund shall pay or cause to be paid to the Escrow Agent such
fees and other amounts as may be mutually agreed to in writing by the Fund
and Escrow Agent from time to time. Any such annual fee agreed upon by the
parties hereto shall be prorated for any portion of a year in which the
Escrow Agent provides services as contemplated by this Agreement.
Notwithstanding the foregoing, standard account transaction charges imposed
by the banking institution at which the Accounts are maintained 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 both parties hereto.
12. DURATION AND TERMINATION. This Agreement shall be in effect through and
including the one-year anniversary of the date of the initial public sale
of interests in the Fund pursuant to the Fund's Registration Statement
filed on Form N-2 with the SEC on June 23, 2003 (the "Initial Term"). After
the Initial Term, the term of this Agreement will automatically renew for
additional one-year renewal terms (a "Renewal Term"; each Renewal Term and
the Initial Term, being referred to herein as a "Term") unless either the
Escrow Agent or the Fund gives written notice to the other party at least
90 days prior to the date on which the Initial Term or the then-current
Renewal Term is scheduled to expire, that the notifying party has elected
to let such Term expire. This Agreement may be terminated only: (i) by the
Escrow Agent or the Fund in accordance with the provisions of this Section
12; (ii) by the Escrow Agent on such date as is specified in written notice
given by the Escrow Agent, in the event of a breach of one or more
provisions of this Agreement, which are individually or in the aggregate
material to this Agreement, in any material respect by the Fund, provided
the Escrow Agent has notified the Fund of the breach at least 90 days prior
to the specified date of termination and the Fund has not remedied such
breach within 45 days of the date of such notice is received by the Fund;
or (iii) by the Fund on such date as is specified in written notice given
by the Fund, as applicable, in the event of a breach of one or more
provisions of this Agreement, which are individually or in the aggregate
material to this Agreement, in any material respect by the Escrow Agent,
provided the Fund has notified the Escrow Agent of the breach at least 90
days prior to the specified date of termination and the Escrow Agent has
not remedied such breach within 45 days of the date of such notice is
received by the Escrow Agent. In addition, this Agreement shall terminate
upon the dissolution, liquidation, winding-up or termination of the Fund.
Upon the termination or expiration 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 Instructions, the Escrow Agent shall
have no further obligations to provide services hereunder. If no successor
Escrow Agent has been designated pursuant to Instructions to receive the
balance of the Accounts at the specified date of termination, the Escrow
Agent shall have no further obligation to provide services hereunder,
except to hold the escrow funds as a depositary. Upon written notification
by the Fund of the appointment of the successor, 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.
The provisions of Sections 2(a), 2(c), 2(d), 2(e), 2(f), 5 and 13
through 20 shall survive the termination or expiration of this Agreement.
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. 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. 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.
15. NOTICES. All instructions, notices and other communications hereunder
must be in writing and shall be deemed to have been duly given if delivered
by hand or facsimile or mailed by first class, registered mail, return
receipt requested, postage prepaid, and addressed as follows:
(a) If to the Fund
c/o Goldman Sachs Hedge Fund Strategies LLC
Attn: General Counsel
000 Xx. Xxxxx Xxxx
Xxxxxxxxx, XX 00000
(b) If to the Escrow Agent
SEI Investments Global Funds Services
Attn: General Counsel
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxx, XX 00000
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 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. GOVERNING LAW; VENUE. This Agreement shall be deemed to be a contract
made in New York and governed by the laws of the State of New York, without
regard to principles of conflicts of law. The parties agree that all
actions and proceedings arising out of, under or in connection with this
Agreement shall be brought in and be subject to the jurisdiction of a court
of the State of New York or the United States District Court for the
Southern District of New York located in the City of New York, and the
parties irrevocably submit to the jurisdiction of such courts in respect of
any such action or proceeding and waive to the fullest extent permitted by
law any objection that they may now have or hereafter have to the laying of
venue of any such action or proceeding in such manner, including any claim
that such action or proceeding has been brought in an inconvenient forum.
THE PARTIES HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY ACTION, PROCEEDINGS OR LITIGATION ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT.
19. ASSIGNMENT. This Agreement may not be assigned by either party without
the written consent of the other party; provided, however, that the Fund
agrees not to unreasonably withhold its consent to an assignment by the
Escrow Agent of all or part of its rights, responsibilities, or duties
hereunder to any subsidiary, parent or affiliate of the Escrow Agent upon
the provision of prior notice to the Fund, provided that no such assignment
will relieve the Escrow Agent of any of its obligations hereunder. Such
assignment will be valid only so long as the assignee or delegate remains a
subsidiary, affiliate or parent of the Escrow Agent and in the event of any
such assignment, the Escrow Agent will remain responsible for the acts of
any such entity to whom it makes such assignment.
20. NO INTEREST. The Escrow Agent does not have any interest in the
Accounts or the underlying funds (including interest) that reside in such
Accounts and is serving as an escrow holder only in accordance with the
provisions of this Agreement and has only possession thereof in accordance
with the provisions of this Agreement.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
XXXXXXX SACHS HEDGE FUND PARTNERS REGISTERED FUND, LLC
By:
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Name:
Title:
SEI INVESTMENTS GLOBAL FUNDS SERVICES
By:
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Name:
Title:
