Exhibit 99(k)(2)
ESCROW AGREEMENT
THIS AGREEMENT is made as of January , 2005, by and among HATTERAS
MULTI-STRATEGY FUND II, LP, a Delaware limited partnership (the "Company"),
HATTERAS INVESTMENT PARTNERS, LLC, a Delaware limited liability company (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 January 1, 2005; 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 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 signed by the Manager or any other person duly
authorized by the Manager, or by the members of the Company, to give
such instructions on behalf of the Company. 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. The
Company shall file from time to time with the Escrow Agent a
certified copy certified by the Manager of each resolution of the
Manager or members authorizing the person or persons to give Written
Instructions. Such resolution shall include certified signatures of
such persons authorized to give Written Instructions. This 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 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. The Escrow Agent
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shall be entitled to assume that any Written Instruction received
hereunder is not in any way inconsistent with the provisions of the
limited partnership agreement (the "Limited Partnership Agreement")
or this Agreement or of any vote, resolution or proceeding of the
Company'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 if its failure to perform its
duties under this Agreement only 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
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) 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 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
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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 Company 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 Company; (ii) upon Written
Instructions; or (iii) 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 and obligations under this Agreement.
Notwithstanding the provision of the immediately preceding sentence,
the Company 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. 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
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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 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 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, Accounting and Investor Services Agreement between the
Company and PFPC Inc.
4. DEPOSIT OF ESCROW FUND. The Escrow Agent shall establish an account in the
name of Hatteras Multi-Strategy Fund II, LP, Escrow Account for the
Benefit of Investors (the "Subscription Account") and an account in the
name of Hatteras Xxxxx-Xxxxxxxx Xxxx XX, XX, Xxxxxxxxxx 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
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.
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5. STATEMENTS. During the term of this Agreement, the Escrow Agent shall
provide the Company 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 Company shall be responsible for
reconciling such statements. The Escrow Agent shall be forever released
and discharged from all liability with respect to the accuracy of such
statements, except with respect to any such act or transaction as to which
the Company shall, within 90 days after the furnishing of the statement,
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 shall be 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 Company, upon Written
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.
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 Written Instructions, within 5
business days of the crediting of such interest the Escrow Agent shall
issue interest payments by wire to the Manager along with a cover letter.
The Escrow Agent will prepare and send notifications on Form 1099 for each
calendar
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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 in
check form to the repurchasing member 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 thereon will be
credited to the accounts of the Company.
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
Company, Manager or Potential Investor, as applicable.
10. 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 Agent. Notwithstanding the foregoing, standard account
transaction charges will be billed to the Company 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 60 days' prior written notice. Upon the termination of this
Agreement and upon the delivery of the
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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 60-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 Company 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, 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. 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. This Agreement shall be construed and enforced in
accordance with the laws of Delaware without regard to principles of
conflicts of law.
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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 Company
Hatteras Multi-Strategy Fund II, LP
Attn: Xxxxxxx Xxxxxx
0000 Xxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
(b) If to the Escrow Agent
PFPC Inc.
Attn: _______________
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
(c) If to the Manager
Hatteras Investment Partners, LLC
Attn: Xxxxxxx Xxxxxx
0000 Xxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, 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.
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18. 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, 2003. Certain of
PFPC Inc.'s affiliates are financial institutions, and PFPC Inc. 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. PFPC Inc. may also ask (and may have
already asked) for additional identifying information, and PFPC Inc. may
take steps (and may have already taken steps) to verify the authenticity
and accuracy of these data elements.
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IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
HATTERAS MULTI-STRATEGY FUND II, LP
By: _________________________________
Name: _______________________________
Title: ______________________________
HATTERAS INVESTMENT PARTNERS, LLC (as "Manager")
By: _________________________________
Name: _______________________________
Title: ______________________________
PFPC INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
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