Exhibit (2)(k)(3)
ESCROW AGREEMENT
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THIS AGREEMENT is made as of November 25, 2002/NJA, by and among CITIGROUP
ALTERNATIVE INVESTMENTS MULTI-ADVISER HEDGE FUND PORTFOLIOS LLC, a Delaware
limited liability company (the "Company"), CITIGROUP ALTERNATIVE INVESTMENTS
LLC, a Delaware limited liability company (the "Administrator"), and PFPC INC.,
a Massachusetts corporation (the "Escrow Agent").
WITNESSETH
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WHEREAS, the Company, on behalf of each of its separate investment
portfolios designated on Exhibit A attached hereto and made a part hereof (each,
a "Series"), desires to retain PFPC Inc. to 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
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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
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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 Administrator or any other person duly
authorized by the Administrator, or by the Company, to give such
instructions on behalf of the Company. The instructions may be
delivered by hand, mail, facsimile, cable, telex or telegram; 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 list of persons authorized to give Written Instructions, which
list shall be certified by two officers of the Company. Such list
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 certified
list 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 Administrator 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 shall be entitled to
assume that any Written Instruction received hereunder is not
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in any way inconsistent with the provisions of the limited liability
company agreement of the Company (the "LLC 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 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 to the Company or
the Administrator for any consequential, special or indirect losses or
damages which the Company 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 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, acts of terrorism, 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 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, bad faith, gross
negligence or reckless disregard of its duties and obligations under
this Agreement. 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. Notwithstanding anything in this Agreement to the
contrary, the Company 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 Company. 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 Esrow 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 Administrator of any
discrepancy between the amounts set forth on any remittance advice
received by the Escrow Agent and the sums delivered to it therewith.
3. Definitions. Except as specifically set forth herein, the terms used in
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this Agreement shall have the same meaning as set forth in the LLC
Agreement between the Company and PFPC Inc.
4. Deposit of Escrow Funds. The Escrow Agent shall establish separate
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Series-by-Series accounts in the name of Multi-Strategy Series M Escrow
Account and Multi-Strategy Series G, Escrow Account for the benefit of
Potential Investors (each, a "Subscription Account") and separate
Series-by-Series accounts accounts in the names of Multi-Strategy Series M
Repurchase Account and Multi-Strategy Series G Repurchase Account (each, a
"Repurchase Account") and together with the Subscription Accounts, the
"Accounts"). Funds will be paid into the Subscription Accounts directly by
wire transfer from Potential Investors' Xxxxxxx Xxxxx Xxxxxx Inc. brokerage
accounts, as authorized by the Administrator. In the event the Company
decides to accept investments from Potential Investors who do not have a
brokerage account with Xxxxxxx Xxxxx Barney Inc., the Escrow Agent shall
promptly deposit in the applicable Subscription Account any
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checks remitted by such Potential Investors and made payable to the
Company. The Company may also permit Potential Investors to 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
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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
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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 in wire form to
Xxxxxxx Xxxxx Xxxxxx Inc. for further credit to the potential investors
brokerage account in the amount of the principal balance with accrued
interest.
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7. Interest. All interest earned on the escrow funds deposited in the Accounts
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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
in wire form to Xxxxxxx Xxxxx Barney Inc. for further credit to each
individual's brokerage account. PFPC will provide details related to each
investor's percentage or portion of the total interest.Citigoup Alternative
Investments LLC 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
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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 or to the Administrator (and in wire
form to Xxxxxxx Xxxxx Xxxxxx Inc.), as the case may be. Upon Written
Instructions, the Escrow Agent will withhold specified amounts from
repurchasing members. 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
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the Escrow Agent's receipt of a valid tax identification number for each
Series, Administrator or Potential Investor, as applicable.
10. Compensation. The fee of the Escrow Agent for its services hereunder shall
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be paid by the Company as may be mutually agreed to in writing by the
Company and the Escrow Agent. Notwithstanding the foregoing, standard
account transaction charges will be billed
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to the Company as an out-of-pocket expense.
11. Amendment. This Agreement may not be amended or supplemented, and no
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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
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on .60 days' prior written notice. 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 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.
This Agreement may be terminated with respect to each separate Series and
such termination shall have no effect on the remaining Series.
13. Execution. This Agreement may be executed in several counterparts, each of
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which shall be deemed an original, but such counterparts together shall
constitute one and the same instrument.
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14. Miscellaneous. All covenants and agreements contained in this Agreement by
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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.
15. Notices. All instructions, notices and other communications hereunder must
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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:
Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios
LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
(b) If to the Escrow Agent:
PFPC Inc.
Attn: Xxxxx Clause
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
(c) If to the Administrator:
Attn: Xxxxxx XxXxxxxxx
Citigroup Alternative Investments LLC
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
16. Partial Invalidity. If any provision of this Agreement shall he held or
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made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be
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affected thereby.
17. Entire Agreement. This Agreement embodies the entire agreement and
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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.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
CITIGROUP ALTERNATIVE INVESTMENTS MULTI-ADVISER
HEDGE FUND PORTFOLIOS LLC
By: /s/ Xxxxxxxx XxXxxxx
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Name: Xxxxxxxx XxXxxxx
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Title:
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CITIGROUP ALTERNATIVE INVESTMENTS LLC (as "Administrator")
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: M.D.
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PFPC INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
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Title: SVP
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EXHIBIT A
List of Series
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Multi-Strategy Series M
Multi-Strategy Series G
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