Exhibit (k)(3)
ESCROW AGREEMENT
THIS AGREEMENT is made as of January 18, 2002, by and among XXXXXXXXXX
PARTNERS ABSOLUTE RETURN FUND LLC, a Delaware limited liability company (the
"Fund"), XXXXXXXXXX ASSET MANAGEMENT LLC, a Delaware limited liability company
(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,
Accounting and Investor Services Agreement dated as of January 18, 2002; 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
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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" mean 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 Fund,
to give such instructions on behalf of the Fund. 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 Fund
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 shall be entitled to assume that any Written
Instruction received hereunder is not in any way inconsistent
with the provisions of the limited
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liability company agreement (the "Limited Liability Company
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 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 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 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 authority,
national emergencies, labor difficulties, fire, flood,
catastrophe, acts of God, insurrection, war, riots or failure
of the mails,
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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 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 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.
Notwithstanding anything in this 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 to seek
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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
Fund and PFPC Inc.
4. Deposit of Escrow Fund. The Escrow Agent shall establish an account in
the name of Xxxxxxxxxx Partners Absolute Return Fund LLC, Escrow
Account for the Benefit of Investors (the "Subscription Account") and
an account in the name of Xxxxxxxxxx Partners Absolute Return 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.
5. Statements. During the term of this Agreement, the Escrow Agent shall
provide the Fund 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 Fund shall be
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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 Fund 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 Fund, the Escrow Agent will wire
principal balances on deposit in the Subscription Account to the
account designated by the Fund. 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 Fund, 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. Any
Interest earned shall be added to the Investors' capital contribution
into the Fund. 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 in check form to the repurchasing member or to the Manager, as
the case may be. Upon Written Instructions, the Escrow
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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, Manager or Potential Investor, as applicable.
10. Compensation. The fee of the Escrow Agent for its services hereunder
shall be paid by the Fund as may be mutually agreed to in writing by
the Fund and Escrow Agent. Notwithstanding the foregoing, standard
account transaction charges 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 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 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,
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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.
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
Xxxxxxxxxx Partners Absolute Return Fund LLC
c/o: Xxxxxxxxxx Asset Management
General Counsel
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(b) If to the Escrow Agent
PFPC Inc.
Attn: _______________
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
(c) If to the Manager
Xxxxxxxxxx Asset Management
c/o: 000 Xxxxxxxxxx Xxxxxx
0
Xxx Xxxxxxxxx, 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.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
XXXXXXXXXX PARTNERS ABSOLUTE RETURN FUND LLC
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Assistant Secretary
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XXXXXXXXXX ASSET MANAGEMENT, LLC (as "Manager")
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
---------------------------------
Title: Chief Administrative Officer
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PFPC INC.
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
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Title: Executive Vice President
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