DRAFT
FORM OF ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") is made and entered into this ___ day of
________, 2008, by and between ______________________, a Delaware limited
liability company (the "Fund"), UMB Fund Services, Inc., as record keeper
("UMBFS") and UMB Bank, n.a., a national banking association organized and
existing under the laws of the United States of America, as escrow agent (the
"Escrow Agent").
WITNESSETH:
WHEREAS, the Fund is a limited liability company which is registered as a
closed-end, non-diversified investment company under the provisions of the
Investment Company Act of 1940, and is authorized to offer and sell units of
limited liability company interests in the Fund ("Interests"); and
WHEREAS, the Fund accepts purchase proceeds for Interests on the first business
day of each month and accepts requests for the repurchase of Interests on the
last business day of each semi-annual period (June/December); and
WHEREAS, the Fund desires to appoint UMB Bank, n.a. as escrow agent for the
purpose of holding purchase proceeds tendered by prospective investors prior to
the time such funds are transferred to the Fund for investment and holding
repurchase proceeds prior to the time such funds are transferred to investors.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. APPOINTMENT AND DELEGATION.
The Fund hereby appoints UMB Bank, n.a. as Escrow Agent, on the terms set
forth in this Agreement. UMB Bank, n.a. hereby agrees to serve as Escrow Agent
on the terms set forth in this Agreement. The Fund hereby authorizes UMBFS, in
its capacity as record keeper, to provide instructions to the Escrow Agent on
the Fund's behalf in accordance with the terms of this Agreement.
2. PROCEDURES.
(a) The Fund will establish an escrow account with the Escrow Agent
consisting of four (4) segregated sub-accounts, the Subscription Sub-Account,
the Repurchase Sub-Account, the Income Sub-Account and the Holdback Sub-Account.
Purchase payments periodically received by UMBFS (the "Purchase Proceeds") will
be deposited into the Subscription Sub-Account. Proceeds from periodic
repurchases of Interests by the Fund from its subscribers ("Repurchase
Proceeds") will be deposited into the Repurchase Sub-Account, less a ten percent
(10%) withholding (the "Holdback Amount"), if applicable. Income is posted once
per month, on the first business day of the month and transferred to the Fund's
operational account (the "Operational Account"). Any Holdback Amount will be
deposited into the Holdback Sub-
Account (the Subscription Sub-Account, the Repurchase Sub-Account, the Income
Account and the Holdback Sub-Account shall be referred to collectively as the
"Escrow Accounts").
(b) Simultaneously with any deposit of Purchase Proceeds, UMBFS will
deliver to the Escrow Agent a cash letter in the form of Exhibit A hereto (the
"Cash Deposit Letter") confirming the amount of the Purchase Proceeds so
delivered. In the event UMBFS provides written notice to the Escrow Agent that
an underlying purchase order has been revoked in the form of a cash letter as
set forth in Exhibit F hereto (the "Purchase Reversal Letter"), the Escrow Agent
shall promptly (but in no event later than the close of business on the day of
receipt of such Purchase Reversal Letter in accordance with subparagraph (d) of
Paragraph 4) transfer from the Subscription Sub-Account the Purchase Proceeds
specified in the Purchase Reversal Letter to UMBFS in accordance with the
payment procedures in Paragraph 4. The Escrow Agent shall have no duty or
obligation with respect to the collection of any Purchase Proceeds.
(c) On the last business day of each calendar month, UMBFS will deliver to
the Escrow Agent a cash letter in the form of Exhibit B hereto instructing the
Escrow Agent to disburse the Purchase Proceeds, if any, on deposit (the "Cash
Disbursement Letter").
(d) The Escrow Agent shall provide the Fund and UMBFS with a statement of
the assets held and transactions of the Escrow Accounts on a monthly basis and
shall provide electronic access on a daily basis. At the Escrow Agent's request,
UMBFS shall provide periodic summaries of Escrow Account activity.
(e) The Escrow Agent shall invest all amounts deposited in the Escrow
Accounts with it hereunder, and earnings thereon, if any, in the UMB Money
Market Special Account. All monies must be deposited to the Escrow Accounts
prior to 3:00 p.m. CT in order to receive credit for that day's earnings. All
investment earnings on the Escrow Accounts shall be transferred on the first
business day of each month to the Income Sub-Account. In turn, the earnings will
be wired to the Fund's Operational Account on the first business day of the
month.
(f) The Fund may from time to time deposit Repurchase Proceeds in the
Repurchase Sub-Account. As soon as practical after the Fund has completed its
valuations relating to the current repurchase period, UMBFS will deliver to the
Escrow Agent a cash letter in the form of Exhibit C hereto to disburse the
Repurchase Proceeds, if any, on deposit in the operational custody account, and
a cash letter in the form of Exhibit D hereto to move the Repurchase Proceeds
out of the Repurchase Sub-Account for disbursement to investors (each, a
"Repurchase Disbursement Letter").
(g) On an annual basis, UMBFS will deliver to the Escrow Agent a cash
letter in the form of Exhibit D hereto to disburse the Holdback Amount, if any,
on deposit in the Holdback Sub-Account (the "Holdback Disbursement Letter").
(h) In the event an adjustment needs to be made in connection with any
money movement hereunder, UMBFS shall deliver to the Escrow Agent a cash letter
in the form of Exhibit E hereto specifying the corrective action to be taken.
(i) Prior to delivery to it or its designated agents of the Purchase
Proceeds or Repurchase Proceeds, the Fund or its agents shall have no title,
right, claim, lien or any other interest in the funds held in escrow hereunder,
and such funds shall under no circumstances be available to the Fund or its
agents or their creditors for payment or reimbursement for liabilities or
indebtedness.
3. COMPENSATION.
For its services hereunder, the Escrow Agent shall be entitled to a
one-time account acceptance fee of $500, plus an annual escrow fee of $600 for
the Escrow Accounts and transaction fees of $5.00 per deposit and/or
distribution. In addition to the foregoing fees, all reasonable out-of-pocket
expenses relating to the administration of this Agreement and the Escrow
Accounts such as, but not limited to, wire fees, postage, shipping, courier,
telephone and facsimile charges will be paid directly by the Fund.
4. PAYMENT PROCEDURES.
(a) Whenever payments are required to be made to the Escrow Agent under
this Agreement, such payments shall be made by electronic transfer by UMBFS per
the following instructions:
UMB Bank, N.A., Kansas City, Missouri
ABA # 000000000
A/C #
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A/C Name: Trust Clearing
Ref:
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Attn: Xxxx Xxxxxxx
(b) Whenever payments are required to be made by the Escrow Agent to UMBFS
under this Agreement, such payments shall be made by electronic transfer per the
following instructions:
UMB Bank, N.A., Kansas City, Missouri
ABA #000000000
A/C #
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Ref:
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Attn: Financial Control
(c) Every cash letter delivered to the Escrow Agent hereunder pursuant to
Paragraph 2 shall bear the signature of two (2) authorized UMBFS signers. If
requested by UMBFS, each cash letter shall also bear the countersignature of one
(1) authorized Fund signer. In connection with the execution of this Agreement,
UMBFS shall deliver to the Escrow Agent, and the Fund shall deliver to UMBFS, a
list of authorized signers, together with a certificate of incumbency and
specimen signatures, in the forms attached hereto as Exhibits G and H. The party
providing such certificate may provide an updated certificate evidencing the
appointment, removal or change of authority of any authorized signer, it being
understood that the party relying on such
certificate shall not be held to have notice of any change in the authority of
any authorized signer until receipt of written notice thereof.
(d) A cash letter must be received by the Escrow Agent by 3:00 p.m. CT on
the day such cash letter is transmitted in order for the instructions contained
in such cash letter to be honored on that day.
5. REPRESENTATIONS.
The Fund represents and warrants as follows:
(a) it is duly organized and in good standing under the laws of the State
of Delaware and all necessary action has been taken by it and it is duly
authorized to enter into this Agreement;
(b) its Tax Identification Number is __-_______;
(c) this Agreement and all other documents related to the transactions
described herein have been duly executed and delivered by the Fund and
constitute the legal, valid and binding obligations of the Fund, enforceable in
accordance with their respective terms;
(d) the execution, delivery and performance of this Agreement and all other
documents related to the transactions described herein by the Fund do not and
will not breach or violate or cause a default under its Operating Agreement or
By-Laws or any provision of any agreement, instrument, judgment, injunction or
order applicable to or binding upon it.
6. MISCELLANEOUS.
It is understood and agreed, further, that the Escrow Agent shall:
(a) 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 and
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;
(b) be under no duty to pay and transfer any monies hereunder, unless the
same shall have been first received by the Escrow Agent pursuant to the
provisions of this Agreement;
(c) be under no duty to accept any information from any person or entity
other than the Fund or UMBFS, and then only to the extent and in the manner
expressly provided for in this Agreement;
(d) act hereunder as a depository only and be protected in acting upon any
written instruction or notice provided by the Fund or UMBFS pursuant to this
Agreement and the
information contained therein without responsibility to determine the validity
or sufficiency of the same, and be protected in acting upon any other notice,
opinion, request, certificate, approval, consent or other paper delivered to it
and represented to it to be genuine and to be signed by the proper party or
parties;
(e) be indemnified and held harmless by the Fund against any claim made
against it by reason of its acting or failing to act in connection with any of
the transactions contemplated hereby and against any loss, liability, cost, suit
or expense, including the expense of defending itself against any claim of
liability it may sustain in carrying out the terms of this Agreement except such
claims which are occasioned by its fraud, bad faith, reckless disregard of its
duties, gross negligence or willful misconduct;
(f) have no liability or duty to inquire into the terms and conditions of
any subscriptions for Interests, and that its duties and responsibilities shall
be limited to those expressly set forth under this Agreement and are purely
ministerial in nature;
(g) be permitted to consult with counsel of its choice, including in-house
counsel, and shall not be liable for any action taken, suffered or omitted by it
in good faith in accordance with the advice of such counsel, provided, however,
that nothing contained in this Subparagraph (g), nor any action taken by the
Escrow Agent, or of any such counsel, shall relieve the Escrow Agent from
liability for any claims which are occasioned by its fraud, bad faith, reckless
disregard of its duties, gross negligence or willful misconduct, all as provided
in Subparagraph (e) above;
(h) not be bound by any amendment or revocation of this Agreement, unless
the same shall be in writing and signed by all of the parties of this Agreement;
(i) be entitled to refrain from taking any action other than to keep all
property held by it in escrow hereunder until it shall be directed otherwise in
writing by the Fund, or by a final judgment by a court of competent
jurisdiction, provided that it shall be uncertain as to its duties and rights
hereunder (including, without limitation, the receipt of conflicting
instructions or directions from any of the parties hereto or any third parties);
(j) have no liability for following the instructions herein contained or
expressly provided for, or written instructions given by, the Fund or UMBFS;
(k) have the right, at any time, to resign hereunder by giving written
notice of its resignation to the Fund at the address as set forth in
Subparagraph (m) hereof, at least sixty (60) days before the date specified for
such resignation to take effect, and upon the effective date of such
resignation;
(i) all cash and other funds and all other property then held by the
Escrow Agent hereunder shall be delivered by it to such successor
Escrow Agent as may be designated in writing by the Fund,
whereupon the Escrow Agent's obligations hereunder shall cease
and terminate;
(ii) if no such successor Escrow Agent has been designated by such
date, all obligations of the Escrow Agent hereunder shall,
nevertheless, cease and terminate, and the Escrow Agent's sole
responsibility thereafter shall be to keep all property then held
by it and to deliver the same to a person designated in writing
by the Fund or in accordance with the directions of a final order
or judgment of a court of competent jurisdiction; yet, if no such
designation, order or judgment is received by Escrow Agent within
sixty (60) days after its giving such resignation notice, it is
unconditionally and irrevocably authorized and empowered to
petition a court of competent jurisdiction for directions.
(l) be reimbursed by the Fund upon its request for all reasonable costs,
fees, charges, expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Agreement, or as a result of the
acceptance of this Agreement.
(m) All deliveries and notices to the Escrow Agent shall be in writing and
shall be sent or delivered to:
UMB Bank, N.A., as Escrow Agent
Attn: Xxxx X. Xxxxxxx, M/S 1020409
0000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
All deliveries and notices hereunder to the Fund shall be in writing and shall
be sent or delivered to:
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Attn:
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Facsimile:
(---) --- ----
All deliveries and notices hereunder to UMBFS shall be in writing and shall be
sent or delivered to:
UMB Fund Services, Inc.
Attn: Xxxxxxx X. Xxxxxx Xxxxxx
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
(n) Nothing in this Agreement is intended to or shall confer upon anyone
other than the parties hereto any legal or equitable right, remedy or claim.
This Agreement shall be construed in accordance with the laws of the State of
Missouri and may be amended or settled only by a writing executed by the parties
thereto.
(o) This Agreement may be executed in multiple counterparts, each of which
shall be regarded for all purposes as an original, and such counterparts shall
constitute but one and the same instrument. In addition, the transaction
described herein may be conducted and related documents may be stored by
electronic means. Copies, telecopies, facsimiles, electronic files and other
reproductions of original executed documents shall be deemed to be authentic and
valid counterparts of such original documents for all purposes, including the
filing of any claim, action or suit in the appropriate court of law.
(p) In order to comply with provisions of the USA PATRIOT Act of 2001, as
amended from time to time, Escrow Agent may request certain information and/or
documentation to verify, confirm and record identification of persons or
entities who are parties to the Agreement.
7. LIMITATION OF LIABILITY.
A copy of the Fund's Certificate of Formation is on file with the Secretary
of State of the State of Delaware, and notice is hereby given that this
Agreement is executed on behalf of the Board of Managers as Managers and not
individually and that the obligations of this instrument are not binding upon
any of the Managers, officers or members of the Fund individually but are
binding only upon the assets and property of the Fund.
8. TAX REPORTING.
The parties hereto agree that for purposes of tax reporting, all interest
or other income, if any, attributable to the Escrow Accounts pursuant to this
Agreement shall be allocable to the Fund. The Fund agrees to provide the Escrow
Agent with an Internal Revenue Service Form W-9 upon execution of this
Agreement. The Fund understands that if such tax reporting documentation is not
so certified to the Escrow Agent, the Escrow Agent may be required by the
Internal Revenue Code, as amended from time to time, to withhold a portion of
any interest or other income earned on the investment of monies or other
property held by the Escrow Agent pursuant to this Agreement. The Escrow Agent
will prepare and send notifications on Form 1099 for each calendar year for
which such Form is required during the term hereof.
IN WITNESS WHEREOF, the parties hereto have caused the Escrow Agreement to be
executed by their respective duly authorized officers.
[FUND]
By:
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Title:
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UMB BANK, N.A., AS ESCROW AGENT
By:
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Title:
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UMB FUND SERVICES, INC.
By:
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Title:
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