Exhibit (j)(ii)
FORM OF
ESCROW AGREEMENT
THIS AGREEMENT is made as of __________, _____, by and among [FUND
NAME]____________, a ________________________ (the ------------ "Company"),
_________________________, a ________________ (the "Manager"), and PFPC Inc., a
Massachusetts corporation ("Escrow Agent").
WITNESSETH
WHEREAS, the Company has retained PFPC Inc. to provide certain
administration, accounting and investor services pursuant to an [Administration,
Accounting and Investor Services Agreement] dated as of _________, ______ (the "
Administration Agreement"); and
WHEREAS, the Company desires that PFPC Inc. also provide services as
escrow agent for the purpose of receiving payments from potential subscribing
members in the Company (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 Company and the Manager hereby appoint
the Escrow Agent as escrow agent hereunder on the terms and conditions
hereinafter set forth. The Escrow Agent hereby accepts the appointment
as escrow agent hereunder and agrees to act on the terms and
conditions hereinafter set forth.
2. DEFINITIONS.
(a) "Authorized Person" means (i) any officer of the Company or Manager
(or any person reasonably believed by the Escrow Agent to be such
officer) and (ii) any other person duly authorized by the Company or
Manager to give instructions to
the Escrow Agent (or any person reasonably believed by the Escrow
Agent to be such a person so authorized).
(b) "Written Instructions" means written instructions received by the
Escrow Agent and signed by an Authorized Person. The instructions
may be delivered by hand, mail or facsimile; except that any
instruction terminating this Agreement may be given only by hand or
mail.
3. RIGHTS AND RESPONSIBILITIES OF ESCROW AGENT.
(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 asset deposited with it.
(b) The Escrow Agent shall be entitled to rely upon and shall be without
liability for and indemnified by the Company with respect to any
action or omission to act which the Escrow Agent takes pursuant to
Written Instructions. Unless otherwise provided in this Agreement,
the Escrow Agent shall act only upon Written Instructions. 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 Company's governing instrument or this
Agreement or of any vote, resolution or proceeding of the Company's
[Board of Directors/General Partner] or members, unless and until
the Escrow Agent receives Written Instructions to the contrary.
(c) The Escrow Agent's liability under this Agreement shall be limited
to damages arising out if its willful misfeasance, fraud, bad faith,
gross negligence or reckless
2
disregard of its duties under this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary, neither
the Escrow Agent nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether or not
the likelihood of such losses or damages was known by the Escrow
Agent or its affiliates.
(e) Notwithstanding anything in this Agreement to the contrary, (i) the
Escrow Agent shall not be liable for losses, delays, failure,
errors, interruption or loss of data occurring directly or
indirectly by reason of circumstances beyond its reasonable control,
including without limitation, acts of God; action or inaction of
civil or military authority; public enemy; war; terrorism; riot;
fire; flood; sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities, transportation,
computer or communications capabilities; insurrection; elements of
nature; or non-performance by a third party; and (ii) the Escrow
Agent shall not be under any duty or obligation to inquire into and
shall not be liable for the validity or invalidity, authority or
lack thereof, or truthfulness or accuracy or lack thereof, and
instruction, direction, notice, document, instrument or other
information which the Escrow Agent reasonably believes to be
genuine.
(f) No party may assert a cause of action against the Escrow Agent or
any of its affiliates that allegedly occurred more than twelve (12)
months immediately prior to the filing of the suit (or, if
applicable, commencement of arbitration proceedings) alleging such
cause of action.
(g) The Company agrees to indemnify, defend and hold harmless the Escrow
Agent
3
and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including without limitation reasonable
attorneys fees and expenses) arising directly or indirectly from any
action or omission to act which the Escrow Agent takes in connection
with the provision of services under this Agreement; provided,
however, that neither the Escrow Agent, nor any of its affiliates,
shall be indemnified pursuant to this sentence 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 under this
Agreement. In addition to and notwithstanding the provisions of the
immediately preceding sentence, the Company shall indemnify, defend
and hold harmless the Escrow Agent and its affiliates against and in
respect of any liability for taxes and 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. The foregoing
indemnities shall survive the resignation of the Escrow Agent and
the termination of this Agreement.
(h) The Escrow Agent shall have no duties except those specifically set
forth in this Agreement.
(i) 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 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.
(j) The Escrow Agent shall promptly notify the Manager of any
discrepancy between
4
the amounts set forth on any remittance advice received by the
Escrow Agent and the sums delivered to it therewith.
(k) The Company and the Manager will provide such information and
documentation as the Escrow Agent may reasonably request in
connection with the services provided by the Escrow Agent under this
Agreement.
(l) Except as expressly provided in this Agreement, the Escrow Agent
hereby disclaims all representations and warranties, express or
implied, made to the Company or the Manager or any other person,
including, without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose or
otherwise (irrespective of any course of dealing, custom or usage of
trade), of any services or goods provided incidental to services
provided under this Agreement. The Escrow Agent disclaims any
warranty of title or non-infringement except as otherwise set forth
in this Agreement.
(m) Notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Manager shall adopt any policies which would
affect materially the obligations or responsibilities of the Escrow
Agent hereunder without the prior written approval of the Escrow
Agent, which approval shall not be unreasonable withheld or delayed.
4. DEPOSIT OF ESCROW FUND. The Escrow Agent shall establish an account in
the name of [Company name], Escrow Account for the Benefit of
Investors (the "Subscription Account") and an account in the name of
[Company name], Repurchase Account (the "Repurchase Account," and
together with the Subscription Account, the "Accounts").
5
The Escrow Agent shall promptly deposit in the Subscription Account
checks remitted by Potential Investors and made payable to the
Company. Potential Investors also may deposit monies in the
Subscription Account by wire transfer pursuant to instructions
provided to them by the Company. Balances on deposit in the
Subscription Account will earn interest at prevailing market rates
pursuant to arrangements approved by the Company.
5. STATEMENTS. During the term of this Agreement, the Escrow Agent shall
make available to the Company (via a secure on-line website) daily
information with respect to deposited and available funds. The Escrow
Agent shall be forever released and discharged from all liability with
respect to the accuracy of such information, except with respect to
any such information as to which the Company shall, within thirty (30)
days after such information is made available, file written objections
with the Escrow Agent.
6. DISTRIBUTIONS AND CLOSINGS. Upon Written Instructions, at each closing
of each offering of interests in the Company, the Escrow Agent will
wire principal balances on deposit in the Subscription Account to the
account designated by the Company. Such Written Instructions must be
sent to the Escrow Agent by 2:00 p.m. (eastern time) 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 Company, upon Written Instructions, the Escrow Agent
shall promptly issue refunds by wire to the Potential Investor in the
amount of the principal balance with accrued interest.
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, pursuant to
6
Written Instructions, within five (5) business days of the crediting
of such interest the Escrow Agent shall issue interest payments by
wire to the Company along with a cover letter. The Escrow Agent will
prepare and send notifications on Form 1099 for each calendar year.
8. REPURCHASES. The Company from time to time may wire balances to the
Repurchase Account in connection with periodic repurchases of
interests by the Company from its members. Upon Written Instructions,
the Escrow Agent shall issue promptly repurchase payments from the
Repurchase Account by wire to the members whose interests have been
repurchased. Upon Written Instructions, the Escrow Agent will withhold
specified amounts from the amounts to be distributed to the members
whose interests have been repurchased. Any interest earned on amounts
in the Repurchase Account will be credited to the accounts of the
Company.
9. PFPC SYSTEM. The Escrow Agent shall retain title to and ownership of
any and all data bases, computer programs, screen formats, report
formats, interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by the Escrow Agent in connection with the services provided
by the Escrow Agent to the Fund.
10. 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 Company, Manager or Potential Investor, as applicable.
11. COMPENSATION. The fee of the Escrow Agent for its services hereunder
shall be paid by the Company as may be mutually agreed to in writing
by the Company and Escrow
7
Agent. Notwithstanding the foregoing, standard account transaction
charges will be billed to the Company as an out-of-pocket expense.
12. 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.
13. TERMINATION. This Agreement shall continue until terminated by a party
on sixty (60) days' prior written notice to the other party. Upon the
termination of this Agreement and upon the delivery of the balance of
the Accounts to a successor escrow agent designated by Written
Instructions 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 or
other person has been designated pursuant to Written Instructions to
receive the balance of the Accounts at the expiration of the 60-day
period, the Escrow Agent shall have no further obligation hereunder
except to hold the escrow funds as a depositary.
14. 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.
15. 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
8
thereof. This Agreement shall be construed and enforced in accordance
with the laws of Delaware without regard to principles of conflicts of
law.
16. 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:
If to the Company
________________________
________________________
________________________
________________________
If to the Escrow Agent
PFPC Inc.
Attn: _______________
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
If to the Manager
________________________
________________________
________________________
________________________
17. 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.
18. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding among the parties and supersedes all prior agreements
and understandings among the parties relating to the subject matter
hereof.
9
19. CONFIDENTIALITY. Each party to this Agreement shall keep confidential
the information relating to any other party to this Agreement which it
obtains in connection with the provision of services under this
Agreement; provided that (except as otherwise required by the
Xxxxx-Xxxxx-Xxxxxx Financial Services Modernization Act of 1999) the
following information shall not be subject to such confidentiality
obligations: (a) information that is already known to the obtaining
party at the time it is obtained; (b) information that is or becomes
publicly known or available through no wrongful act of the obtaining
party; (c) information that is rightfully received from a third party
who, to the best of the obtaining party's knowledge, is not under a
duty of confidentiality; (d) information that is released by the
protected party to a third party without restriction; (e) information
that is requested or required to be disclosed by the obtaining party
pursuant to a court order, subpoena, governmental or regulatory agency
request or law (provided the obtaining party will provide the
protected party written notice of the same, to the extent such notice
is permitted); (f) information that is necessary or desirable for the
Escrow Agent to disclose in connection with the provision of services
under this Agreement; (g) information that is relevant to the defense
of any claim or cause of action asserted against the obtaining party;
and (h) information that has been or is independently developed or
obtained by the obtaining party.
20. CUSTOMER IDENTIFICATION PROGRAM NOTICE. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S.
Federal law requires each financial institution to obtain, verify, and
record certain information that identifies each person who initially
opens an account with that financial institution on or after October
1,
10
2003. Certain of the Escrow Agent's affiliates are financial
institutions, and the Escrow Agent may, as a matter of policy, request
(or may have already requested) the Company's name, address and
taxpayer identification number or other government-issued
identification number, and, if such party is a natural person, that
party's date of birth. The Escrow Agent may also ask (and may have
already asked) for additional identifying information, and he Escrow
Agent may take steps (and may have already taken steps) to verify the
authenticity and accuracy of these data elements.
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
------------------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
------------------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
PFPC INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
