EXHIBIT (2)(k)(2)
ESCROW AGREEMENT
THIS AGREEMENT is made as of May 26, 2004, by and among X.X. XXXXXX
MULTI-STRATEGY 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 May 26, 2004 (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
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avoidance of doubt, the Escrow Agent shall for purposes of
this Agreement be 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 of 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
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Agreement, the Escrow Agent shall not be liable for losses
beyond its control, 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
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Agreement to the contrary, the Fund shall not be liable to the
Escrow Agent for 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 Multi-Strategy Fund, L.L.C. Escrow Account for
the Benefit of Investors (the "Subscription Account") and an account in
the name of X.X. Xxxxxx Multi-Strategy 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
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Fund. The Escrow Agent shall not 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 MULTI-STRATEGY FUND, L.L.C.
c/o X.X. Xxxxxx Alternative Asset Management, Inc.
Attn: Xxxx X. Xxxxxxx, Chief Administrative Officer
000 Xxxxx Xxxxxx, 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
000 Xxxxx Xxxxxx, 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 MULTI-STRATEGY FUND, L.L.C.
By: Xxxxxxx Associates, L.L.C., its Managing Member
By: /s/ Xx. Xxxxxx X. Xxxxxxx
--------------------------------------------------
Name: Xx. 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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