EXHIBIT (2)(K)(2)
ESCROW AGREEMENT
THIS AGREEMENT is made as of June 30, 2005, by and among ▇▇▇▇▇▇▇▇▇▇
PARTNERS, LLC, a Delaware limited liability company (the "Fund"), ▇▇▇▇▇▇▇▇▇▇
INVESTORS, 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 June 30, 2005 (the
"Administration Agreement"); 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 Fund 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 Fund or
Manager (or any person reasonably believed by the Escrow Agent
to be such officer) and (ii) any other person duly authorized
by the Fund 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 Fund 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 Fund's governing
instrument or this Agreement or of any vote, resolution or
proceeding of the Fund's Board of Managers or members, unless
and until the Escrow Agent receives Written Instructions to
the contrary.
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(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 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.
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(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 Fund agrees to indemnify, defend and hold harmless the
Escrow Agent 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 Fund 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.
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(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 the amounts set forth on any remittance
advice received by the Escrow Agent and the sums delivered to
it therewith.
(k) The Fund 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 Fund 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.
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(m) Notwithstanding anything in this Agreement to the contrary,
neither the Fund 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 ▇▇▇▇▇▇▇▇▇▇ Partners, LLC, Escrow Account for the Benefit of
Investors (the "Subscription Account") and an account in the name of
▇▇▇▇▇▇▇▇▇▇ Partners, LLC, Repurchase Account (the "Repurchase Account,"
and together with the Subscription Account, the "Accounts"). The Escrow
Agent shall promptly deposit in the Subscription Account monies
remitted by Potential Investors 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
make available to the Fund (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 Fund shall, within thirty (30) days
after such information is made available, file written objections with
the Escrow Agent.
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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 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 Fund, 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 Written Instructions, within five
(5) business days of the crediting of such interest the Escrow Agent
shall issue interest payments by wire to the Fund along with a cover
letter. 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 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 Fund.
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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 Fund, Manager or Potential Investor, as applicable.
11. COMPENSATION.
(a) 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.
(b) The undersigned hereby represents and warrants to Escrow Agent
that (i) the terms of this Agreement, (ii) the fees and
expenses associated with this Agreement, and (iii) any
benefits accruing to the adviser or sponsor to the Fund in
connection with this Agreement, including but not limited to
any fee waivers, conversion cost reimbursements, up front
payments, signing payments or periodic payments made or to be
made by Escrow Agent to such adviser or sponsor or any
affiliate of the Fund relating to this Agreement have been
fully disclosed to the Manager of the Fund and that, if
required by applicable law, such Manager has approved or will
approve the terms of this Agreement, any such fees and
expenses, and any such benefits.
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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.
(a) The term of this Agreement is for an initial term beginning
from the date of this Agreement and continuing through the
close of business one (1) year thereafter (the "Initial
Term"). Upon the expiration of the Initial Term, this
Agreement will automatically renew for successive terms of one
(1) year ("Renewal Terms"). Either Party may terminate this
Agreement effective at the end of the Initial Term or any
Renewal Term by providing written notice to the other party of
its intent not to renew. Notice of termination must be
received not less than ninety (90) days prior to the
expiration of the Initial Term or the then current Renewal
Term. In the event the Fund gives notice of termination, all
expenses associated with movement (or duplication) of records
and materials and conversion thereof to a successor service
provider (or each successor service provider, if there are
more than one), and all trailing expenses incurred by the
Escrow Agent, will be borne by the Fund.
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(b) If a party hereto fails in any material respect to perform its
duties and obligations hereunder (a "Defaulting Party"), or if
a representation and warranty of a party hereof becomes untrue
or inaccurate in any material respect, the other party (the
"Non-Defaulting Party") may give written notice thereof to the
Defaulting Party, and if such material breach shall not have
been remedied within sixty (60) days after such written notice
is given, then the Non-Defaulting Party may terminate this
Agreement by giving sixty (60) days' written notice of such
termination to the Defaulting Party. Termination of this
Agreement by the Non-Defaulting Party shall not constitute a
waiver of any other rights or remedies with respect to
obligations of the parties prior to such termination or rights
of the Escrow Agent to be reimbursed for all of its
out-of-pocket expenses and its normal monthly fees or other
obligations due it. In all cases, termination by the
Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under
this Agreement or otherwise against the Defaulting Party.
(c) Upon occurrence of any of the following events, the party not
subject to such event shall have the right to immediately
terminate this Agreement upon written notice to the other
party: (i) either party ceases doing (or gives notice of
ceasing to do) business and its business is not continued by
another corporation or entity who has agreed to assume its
obligations, (ii) either party becomes insolvent or files for
or becomes a party to any involuntary bankruptcy, receivership
or similar proceeding, and such involuntary proceeding is not
dismissed within forty-five (45) calendar days after filing,
or (iii) either party makes an assignment for the benefit of
creditors.
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(d) 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 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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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 Fund
Mezzacappa Partners, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
If to the Escrow Agent
PFPC Inc.
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Manager
▇▇▇▇▇▇▇▇▇▇ Investors, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
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.
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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.
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
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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 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.
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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,
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 Fund'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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
▇▇▇▇▇▇▇▇▇▇ PARTNERS, LLC
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary/Treasurer
▇▇▇▇▇▇▇▇▇▇ INVESTORS, LLC
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member and CFO
PFPC INC.
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
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