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Exhibit (h)(1)
DISTRIBUTION AGREEMENT
____________, 2000
Excelsior Venture Partners III, LLC
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
This is to confirm that, (i) in consideration of the agreements of
EXCELSIOR VENTURE PARTNERS III, LLC (the "Company"), a Delaware limited
liability company that has elected to be treated as a business development
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
hereinafter contained, XXXXXXX XXXXXX & CO., INC. (the "Distributor") has
agreed to serve as the distributor of the units of beneficial interest (the
"Units") of the Company for the period of this Agreement and (ii) in
consideration for the Distributor performing its Agreements hereinafter
contained, U.S. TRUST COMPANY ("USTC") has agreed to pay the Distributor the
compensation set forth herein.
1. Description of the Offering and Sale of Units.
1.1 Pursuant to the terms of this Agreement, on the basis of the
representation, warranties, and covenants herein contained,
but subject to the terms and conditions herein set forth,
the Company hereby appoints Distributor, and Distributor
agrees to serve, as agent for the offer and sale of the
Units of the Company to be offered and sold in the offering
(the "Offering") described below. The right granted to the
Distributor to place orders for Units with the Company shall
be non-exclusive. The Company hereby acknowledges that the
Distributor may render distribution and other services to
other parties, including other investment companies.
1.2 The terms of the Offering are set forth in the Company's
effective registration statement on Form N-2 filed with the
Securities and Exchange Commission (the "SEC") and the
prospectus included therein relating to the Units. Such (i)
registration statement (as amended, if applicable) and (ii)
prospectus and statement of additional information
constituting a part thereof, as from time to time amended or
supplemented pursuant to the Securities Act of 1933, as
amended (the "1933 Act"), the 1940 Act, or otherwise, are
hereinafter referred to as the "Registration Statement" and
the "Prospectus," respectively, except that if any
prospectus or statement of additional information, or
amendment or supplement thereto, shall be provided to the
Distributor by the Company for use in connection with the
offering of the Units that differs from the Prospectus on
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file at the SEC at the time the Registration Statement
becomes effective (whether or not such prospectus or
amendment or supplement thereto is required to be filed by
the Company pursuant to Rule 497 of the 1933 Act), the term
"Prospectus" shall refer to such revised prospectus and
statement of additional information as so amended or
supplemented from and after the time it is first provided to
the Distributor for such use.
1.3 The initial closing of the Offering is expected to occur on
or about the fifth business day after receipt of
subscriptions for at least $100,000,000 (the "Initial
Closing Date") and the Company may continue to offer the
remaining unsold Units and accept subscriptions for such
Units from time to time at subsequent closings until
December 31, 2000, subject to extension by the Company's
Board of Managers until May 11, 2001 (the "Subsequent Closing
Dates," and together with the Initial Closing Date, the
"Closing Dates"). Subsequent Closings of the Company will be
held at the discretion of the Company.
1.4 The Distributor may offer the Units through any dealer or
bank that has entered into a selling agreement with the
Distributor ("Selling Agents"). The Selling Agents
appointed by the Distributor may offer Units only pursuant
to properly completed and executed Subscription Agreements
and related documents provided to the Distributor by the
Company from time to time and in accordance with the terms
of the Prospectus. To the extent that the Distributor
offers Units directly, rather than through Selling Agents,
its agrees that it will do so in the manner required of
Selling Agents as set forth in Sections 1.6, 2.1, 2.3, 2.6,
2.7 and 2.10 of the form of Selling Agent Agreement attached
hereto as Appendix A and that it shall have the duties and
obligations to the Company as a Selling Agent thereunder and
the Company and USTC agree, severally but not jointly, that
the Distributor shall be entitled to the respective rights
and benefits of a Selling Agent afforded by the Company and
USTC set forth therein including, but not limited to,
compensation for such service under Section 4 of the Selling
Agent Agreement. Any checks should be made payable to PNC
Bank, Delaware, (the "Escrow Agent"), and must be
transmitted by Selling Agents directly to PFPC Inc. (the
"Escrow Administrator") by noon of the next business day
after receipt.
1.5 Neither the Distributor, the Selling Agents nor any other
person is authorized to give any information or make any
representations other than those contained in the
Registration Statement, Prospectus or in any Sales Material
(as defined in Section 2.2 below) furnished by the Company
for use in the sale of the Units.
1.6 All subscriptions by the Distributor and Selling Agents will
be subject to confirmation and acceptance by the Company, in
whole or in part. The Company reserves the right to accept
or reject any such subscription. The Company shall have full
authority to take such actions as it may deem advisable with
respect to all matters pertaining to the Offering.
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1.7 The Distributor shall be an independent contractor and
neither the Distributor nor any of its directors, officers
or employees as such, is or shall be, solely by reason of
this Agreement, an employee of the Company.
1.8 No Units shall be offered by either Distributor or the
Company under any of the provisions of this Agreement and no
subscriptions for the purchase or sale of Units hereunder
shall be accepted by the Company if and so long as the
effectiveness of the Registration Statement then in effect
or any necessary amendments thereto shall be suspended under
any of the provisions of the 1933 Act, or if and so long as
a current prospectus as required by Section 10(b) of the
1933 Act is not on file with the SEC.
2. Services as Distributor.
2.1 The Distributor will act as agent for the distribution of
the Units covered by the Registration Statement and
Prospectus of the Company in effect under the 1933 Act, and
will solicit orders for the purchase of Units upon the terms
set forth herein and, if applicable, in Appendix A, during
the term of this Agreement. All purchases by the Distributor
shall be made only to cover orders placed with the
Distributor.
2.2 In distributing materials relating to the Company within the
Distributor's offices or through the Distributor's offices
to its customers, the Distributor assumes no responsibility
or liability for the representations or any omissions
contained in (i) the Prospectus relating to the Company and
the Units or (ii) any Sales Materials furnished or approved
by the Company. "Sales Material," as used herein, shall
include, without limitation, promotional materials, sales
literature, advertisements, press releases, announcements,
circulars, research reports, market letters, performance
reports or summaries, form letters, posters, signs and other
similar materials, whether in print, hypertext, video, audio
or other media, and any items derived from the foregoing,
and including sales materials intended for wholesale use
(i.e., broker/dealer use only) or retail use.
2.3 With the exception of (i) listings of product offerings and
(ii) materials used by the Distributor on an internal basis
only, the Distributor agrees not to furnish or cause to be
furnished to any third parties or to display publicly or
publish any Sales Materials, except such Sales Materials
relating to the Company as may be distributed to the
Distributor by the Company or approved for distribution by
the Company upon the Distributor's request. The Company
agrees not to furnish or cause to be furnished to any third
parties or to display publicly or publish any Sales Material
referring to the Distributor or its trademarks, except such
Sales Materials as may be approved for distribution by the
Distributor upon the Company's request.
2.4 All activities by Distributor and its partners, agents, and
employees as distributor of the Units shall comply
materially with all applicable federal and state laws, rules
and regulations, including, without limitation, all rules
and regulations made or adopted
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pursuant to the 1940 Act by the SEC or any securities
association registered under the Exchange Act.
3. Compensation of Distributor. In consideration of Distributor's
services hereunder, USTC agrees to pay the Distributor a distribution
fee payable upon termination of the Offering in an amount equal to
0.02% of the gross proceeds of the Offering. The Company shall have
no responsibility for such payment and this Section 3 shall in no way
affect the obligations of the Distributor to perform its duties to
the Company hereunder.
4. Representations and Warranties of the Company. The Company
represents, warrants and covenants to the Distributor that:
4.1 The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the
State of Delaware. The Company has all requisite power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and the Prospectus. The Company is duly qualified
and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary.
4.2 The Company has filed with the SEC a Registration Statement
on Form N-2 (File No. 333-30986) and a related Prospectus
for the registration of the Units under the 1933 Act, and
the rules and regulations of the SEC under the 1933 Act and
the 1940 Act (the "Rules and Regulations"), and has filed
such amendments to such Registration Statement on Form N-2,
if any, and such amended or supplemented preliminary
prospectuses as may have been required to the date hereof.
The Company will prepare and file such additional amendments
to the Registration Statement and such amended or
supplemented Prospectuses as may hereafter be required.
4.3 At the time the Registration Statement becomes effective
(the "Effective Date"), and at all times subsequent thereto,
up to and including the last Closing Date, the Registration
Statement and the Prospectus (i) did or will comply in all
material respects, with the 1933 Act, 1940 Act and the Rules
and Regulations; (ii) did or will contain all statements
required to be stated therein in conformity with the 1933
Act, 1940 Act and the Rules and Regulations; (iii) did not
or will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading. The foregoing representations and
warranties in this Section 4.3 do not apply to any
statements or omission made in reliance on and in conformity
with information relating to the Distributor furnished in
writing to the Company by the Distributor specifically for
inclusion in the Registration Statement or Prospectus.
4.4 The Company shall not file any amendment to the Registration
Statement or supplement to the Prospectus without giving
Distributor reasonable notice and a copy thereof in advance;
provided, however, that nothing contained in this
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Agreement shall in any way limit the Company's right to file
at any time such amendments to the Registration Statement
and/or supplements to the Prospectus, of whatever character,
as the Company may deem advisable, such right being in all
respects absolute and unconditional.
4.5 No stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for
such purpose are pending before or have been threatened by
the SEC.
4.6 The Company is registered with the SEC as a non-diversified
closed-end management investment company that has elected to
be treated as a business development company under the 1940
Act, and has filed with the SEC a Notification of Election
to be subject to Sections 54-65 of the 1940 Act on Form
N-54A, which has been prepared in conformity with Section
54(a) of the 1940 Act. No order of suspension or revocation
of such registration has been issued or proceedings therefor
initiated or, to the knowledge of the Company, threatened by
the SEC.
4.7 The operations of the Company are in compliance in all
material respects with the provisions of the 1940 Act
applicable to business development companies and the Rules
and Regulations.
4.8 The Units are registered pursuant to Section 12(g) of the
Exchange Act, and the Company has taken no action designed
to terminate, or likely to have the effect of terminating,
the registration of the Units under the Exchange Act. No
order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or, to the
knowledge of the Company, threatened by the SEC.
4.9 The Units have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement,
will be validly issued and will represent limited liability
company interests in the Company. There are no authorized
securities of the Company other than the Units. The Units
conform as to legal matters to the descriptions thereof
contained in the Registration Statement and the Prospectus.
4.10 All Sales Materials will comply in all material respects
with all applicable rules and regulations of the SEC, the
NASD, any other regulatory authority having competent
jurisdiction, and any states having such rules and
regulations. All Sales Material will be filed with the NASD,
SEC and such relevant regulatory authority and states as
required by the rules and regulations of the NASD, the SEC
and such regulatory authority and states, respectively.
4.11 Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus
and prior to any Closing Date, except as set forth in or
contemplated by the Registration Statement and the
Prospectus, there has not been any material adverse change
in the business, business
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prospects, condition (financial or otherwise) or results of
operations of the Company, arising for any reason
whatsoever.
4.12 There are no actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against or
affecting the Company or any of its officers in their
capacity as such, before or by any federal or state court,
commission, regulatory body, administrative agency or other
governmental body, international or domestic, wherein an
unfavorable ruling, decision or finding might materially and
adversely affect the Company or its business, properties,
business prospects, condition (financial or otherwise) or
results of operations.
4.13 The Company has full power and authority to enter into and
perform its obligations under this Agreement, including its
obligations of indemnification and contribution as set forth
in Section 8 and Section 9 of this Agreement, and this
Agreement constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in
accordance with its terms.
4.14 This Agreement, the Investment Advisory Agreement between
the Company and U.S. Trust Company, the Investment
Sub-Advisory Agreement among the Company, U.S. Trust Company
and United States Trust Company of New York, the
Administration, Accounting and Investor Services Agreement
between the Company and PFPC Inc., the Custodian Agreement
between the Company and PFPC Trust Company, and the
Operating Agreement comply with all applicable provisions of
the 1940 Act, and all approvals of such documents required
under the 1940 Act, by the holders of the Units of the
Company and the Board of Managers of the Company (the
"Board"), have been obtained.
4.15 There are no material restrictions, limitations or
regulations with respect to the ability of the Company to
invest its assets as described in the Registration Statement
or Prospectus, other than described herein.
4.16 This Section 4 shall survive the termination of this
Agreement.
5. Agreements of the Company.
5.1 The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required
by law to be delivered in connection with sales of the
Units, file any amendment or supplement to the Registration
Statement or the Prospectus, whether pursuant to the 1933
Act, 1940 Act or otherwise, unless a copy thereof shall
first have been submitted to the Distributor within a
reasonable period of time prior to the filing thereof and
the Distributor shall not have objected thereto in good
faith. The Distributor may but shall not be obligated to
propose from time to time such amendment or amendments to
the Registration Statement and such supplement or
supplements to the Prospectus as, in the light of future
developments, may, in the opinion of the Distributor's
counsel, be necessary or advisable. Subject to Section 5.4,
if the Company does not so amend
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the Registration Statement and/or so supplement the
Prospectus within fifteen days after receipt by the Company
of a written request from Distributor to do so, Distributor
may, at its option, terminate this Agreement.
5.2 The Company will notify the Distributor promptly, and will
confirm such advice in writing, (i) when the Registration
Statement has been amended or supplemented and when any
post-effective amendment thereto becomes effective; (ii) of
any request by the SEC for amendments or supplements to the
Registration Statement or the Prospectus or for additional
information, and of all action by the SEC with respect to
any amendment to any Registration Statement or Prospectus
that may be filed from time to time with the SEC; (iii) of
the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose or the threat
thereof; (iv) of the happening of any event that in the
judgment of the Company makes any statement made in the
Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are
made, not misleading; and (v) of receipt by the Company or
any representative or attorney of the Company of any other
communication from the SEC relating to the Company, the
Registration Statement, any preliminary prospectus, or the
Prospectus. For purposes of this section, informal requests
by or acts of the SEC staff shall not be deemed actions of
or requests by the SEC.
5.3 The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
5.4 On the Effective Date, and thereafter from time to time, the
Company will deliver to the Distributor, without charge and
in a timely manner, as many copies of the Prospectus and any
printed supplemental material as the Distributor may
reasonably request. If during such period of time any event
shall occur that in the judgment of the Company or the
Distributor should be set forth in the Prospectus in order
to make any statement therein, in the light of the
circumstances under which it was made, not misleading, or if
it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly
file with the SEC an appropriate supplement or amendment
thereto, and will deliver to the Distributor, without
charge, such number of copies thereof as the Distributor may
reasonably request.
5.5 At its own expense, the Company agrees to prepare, execute,
and file any and all documents and to take all actions that
may be reasonably necessary in connection with the
qualification of the Units for sale in such states as
Distributor may designate. Concurrent with the
effectiveness of the Registration Statement, the Company
shall provide to the Distributor in writing a list of those
states and other jurisdictions in which the Units are
qualified for sale, together with restrictions and
requirements applicable thereto, and the Distributor will
sell Units only in such states or jurisdictions and in
compliance with such restrictions and requirements.
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6. Payment of Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including,
but not limited to, expenses relating to (i) the printing and filing
of the Registration Statement and Prospectus as originally filed and
of each amendment thereto; (ii) the preparation, issuance and
delivery of temporary or permanent certificates for the Units to the
Distributor; (iii) the fees and disbursements of the Company's
counsel, accountants, and other service providers; (iv) the
qualification of the Units under securities laws in accordance with
the provisions of Section 5.5 of this Agreement, including filing
fees; (v) the printing and delivery to the Distributor of copies of
the Registration Statement as originally filed and of each amendment
thereto, and of the Prospectus and any amendments or supplements
thereto; (vi) the preparation and mailing to shareholders of the
Prospectus and Sales Materials; and (vii) the fees and expenses
incurred with respect to any filings with the NASD.
7. Conditions of the Obligations of the Distributor. The obligations of
the Distributor are subject to satisfaction of each of the following
conditions:
7.1 All of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all
material respects at each Closing Date with the same force
and effect as if made on and as of the Closing Date, and all
covenants and agreements herein contained to be performed on
the part of the Company, and all conditions herein to be
fulfilled or complied with by the Company, at or prior to
each Closing Date, shall have been duly performed, fulfilled
and complied with.
7.2 The Registration Statement shall have become effective not
later than 5:00 p.m., Eastern Time, on the date of this
Agreement or at such later date and time as the Distributor
may approve in writing.
7.3 The Company shall furnish to the Distributor such documents
and certificates as the Distributor may reasonably request,
including documents and certificates relating to the
accuracy and completeness of any statement in the
Registration Statement or Prospectus.
If any condition specified in this Section 7 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Distributor by notice to the Company at any time at
or prior to any Closing Date, and the Company shall reimburse the
Distributor for all of its out-of-pocket expenses, including fees and
disbursements of counsel for the Distributor.
8. Indemnification.
8.1 The Company agrees to indemnify, defend and hold
Distributor, its directors, officers, employees, and agents,
and any person who controls Distributor within the meaning
of Section 15 of the Securities Act of 1933, as amended,
free and harmless from and against any and all losses,
claims, demands, liabilities and expenses
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(including the costs of investigating or defending such
losses, claims, demands or liabilities and any attorney's
fees and expenses incurred in connection therewith) which
Distributor, its directors, officers, employees, and agents,
or any such controlling person may incur (i) under the 1933
Act, the 1940 Act or otherwise, arising out of or based upon
any untrue statement, or alleged untrue statement, of a
material fact contained in (a) the Registration Statement of
the Company (including any Prospectus that is part of any
such Registration Statement) or any amendment or supplement
thereto, and (b) any Sales Materials relating to the Company
provided to the Distributor, or approved, by the Company
(whether or not the Distributor has approved the use of such
Sales Materials), or arising out of or based upon any
omission, or alleged omission, to state a material fact
required to be stated in any Registration Statement,
Prospectus, or Sales Materials or necessary to make the
statements therein not misleading; and (ii) as a result of
any breach by the Company of any representation, warranty or
covenant made by the Company hereunder; provided, however,
that the Company's agreement to indemnify Distributor, its
directors, officers employees, agents, or and any such
controlling person (i) shall not be deemed to cover any
losses, claims, demands, liabilities or expenses arising out
of any untrue statements or representations contained in any
Registrations Statement or Prospectus as are furnished in
writing to the Company by Distributor expressly for use
therein; and (ii) shall not be deemed to cover any liability
to the Company to which the Distributor would otherwise be
subject by reason of willful misfeasance, bad faith, and
gross negligence in the performance of its duties, or any
reason of the Distributor's reckless disregard for its
obligations and duties under this Agreement.
8.2 Distributor agrees to indemnify, defend and hold the
Company, its managers, officers, and agents, and any person
who controls the Company within the meaning of Section 15 of
the 1933 Act, free and harmless from and against any and all
losses, claims, demands, liabilities and expenses (including
the costs of investigating or defending such losses, claims,
demands, liabilities or expenses and any attorney's fees and
expenses incurred in connection therewith) which the
Company, its managers, its officers, its agents or any such
controlling person may incur under the 1933 Act, 1940 Act or
otherwise, but only to the extent that such losses,
liabilities or expense incurred by the Company, its
managers, its officers or such controlling person resulting
from such claims or demands, shall arise out of or be based
upon any untrue statement of a material fact contained in
information furnished in writing by Distributor to the
Company and used in the answers to any of the items of the
Registration Statement or in the corresponding statements
made in the Prospectus.
8.3 If a party seeks indemnity under this Section 8 (the
"Indemnified Party"), the Indemnified Party shall, promptly,
after receipt of notice of commencement of any action, suit
or proceeding against the Indemnified Party, give written
notice of the commencement of such action, suit or
proceeding to the other party (the "Indemnifying Party"),
but the omission so to notify the Indemnifying Party shall
not relieve the Indemnifying Party from any obligation it
may otherwise have, except to the extent that it is actually
harmed by such an omission. In case such notice of any such
action shall be so given, the Indemnifying Party shall be
entitled to participate
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at its own expense in the defense, or, if it so elects, to
assume the defense of such action, in which event such
defense shall be conducted by counsel (satisfactory to the
Indemnified Party, which approval shall not be unreasonably
withheld) chosen by the Indemnifying Party; provided,
however, that the Indemnifying Party shall not have the
right to assume the defense of any action in which the named
parties (including any implied parties) include both parties
and in which counsel to either party has advised that there
may be legal defenses available to one party that are in
conflict with those available to the other party. If the
Indemnifying Party elects to assume the defense of such
action and it has the right to do so, the Indemnified Party
shall bear the fees and expenses of any additional counsel
it retains. If the Indemnifying Party does not elect to
assume the defense of such action and in cases where either
(i) the Indemnified Party does not approve of counsel chosen
by the Indemnifying Party or (ii) separate counsel is
retained because of the availability of conflicting
defenses, the Indemnifying Party will reimburse the
Indemnified Party for the reasonable fees and expenses of
any counsel retained by the Indemnified Party. Payment
(other than the reimbursement of the Indemnified Party's
legal and other related fees and expenses, which will be
payable to it upon receipt by the Indemnifying Party of a
xxxx related thereto) shall be made upon the rendering of
any final decision in such action, suit or proceeding by a
court, panel of arbitrators, administrative agency or
self-regulatory organization, or upon any settlement of any
dispute, the subject of which involves such a claim. No
such action, suit or proceeding or dispute, the subject of
which involves such a claim, shall be settled by either
party without notice to and consent by the other, which
consent shall not be unreasonably withheld.
8.4 This Section 8 shall survive the termination of this
Agreement.
9. Contribution
9.1 If the indemnification provided for in Section 8 hereof is
for any reason unavailable to or insufficient to hold
harmless an Indemnified Party in respect of any losses,
claims, demands, liabilities, or expenses referred to
therein, then each of us shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and
expenses incurred by such Indemnified Party, as incurred,
(i) in such proportion as is appropriate to reflect the
relative benefits received by such party under this
Agreement or (ii) if the allocation provided by clause (i)
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault
of such party in connection with the statements or
omissions, and/or any breach of any representation, warranty
or covenant made hereunder, which resulted in such losses,
claims, demands, liabilities, or expenses, as well as any
other relevant equitable considerations.
9.2 The relative benefits received by the Company on the one
hand and by the Distributor on the other hand under this
Agreement shall be deemed to be in the same respective
proportions as the total gross dollar amount of sales of
Company
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Units received by the Company from the Distributor (the
"Amount X") less the Amount Y (defined below), and the total
dollar amount of compensation received by the Distributor
from the Company (the "Amount Y"), bear to the Amount X
(i.e., the Company's relative benefit shall be deemed to be
in the same proportion as the Amount X less the Amount Y
bears to the Amount X, and the Distributor's relative
benefit shall be deemed to be in the same proportion as the
Amount Y bears to the Amount X).
9.3 The relative fault of a party shall be determined by
reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to
information supplied by such party and such party's relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
9.4 The parties agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by
pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations
referred to above in this Section 9. The aggregate amount
of losses, claims, demands, liabilities and expenses
incurred by an indemnified party and referred to above in
this Section 9 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation
or arbitration, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
9.5 Notwithstanding the provisions of this Section 9, the
Distributor shall not be required to contribute any amount
in excess of the amount by which the total price at which
Company Units were offered to the public exceeds the amount
of any damages that the Distributor has otherwise been
required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission.
9.6 No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
9.7 This Section 9 shall survive the termination of this
Agreement.
10. Effective Date of Agreement and Termination.
10.1 This Agreement shall become effective upon its execution and
shall continue in force until the earlier of the date that
the Company notifies the Distributor that the offer is
terminated or complete or the date set forth in the
Prospectus; provided, however, that in no case shall this
Agreement remain in force beyond May 11, 2001.
10.2 This Agreement may be terminated by either party, without
cause or payment of penalty, on not more than 60 days' nor
less than 30 days' written notice to the other
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party; provided, however, that the Distributor may terminate
this Agreement immediately by written notice to the Company,
without liability on the part of the Distributor to the
Company, if since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, any change or development involving a
prospective change in the condition, financial or otherwise,
of the Company, taken as a whole, whether or not arising in
the ordinary course of business, that, in the Distributor's
judgment is material and adverse and would, in the
Distributor's judgment, make it impracticable to market the
Units on the terms and in the manner contemplated in the
Prospectus.
11. Arbitration. In the event of a dispute between the parties relating
to or arising out of this Agreement or the parties' relationship
hereunder, the parties agree to submit the matter to arbitration in
accordance with this Section 11. In the event of such a dispute
between the parties, Arbitration will be held in San Francisco,
California, in accordance with the rules and regulations of the NASD,
except, in the event that the NASD is unwilling to accept jurisdiction
of the matter, such arbitration will be held in San Francisco,
California in accordance with the rules and regulations of the American
Arbitration Association.
11.1 If the arbitration is brought by either party, the number of
arbitrators will be three (3), and they will be selected in
accordance with the rules and regulations of the NASD or
American Arbitration Association, as appropriate. The
arbitrators shall be attorneys who are from the securities
industry as defined by the applicable arbitration rules.
Any award of the arbitrators will be limited to compensatory
damages and will be conclusive and binding upon the parties.
The arbitration shall be governed by the Federal Arbitration
Act, 9 U.S.C. Sections 1-16 to the exclusion of state laws
inconsistent therewith, and judgment upon the award may be
entered in any court having jurisdiction.
11.2 The prevailing party shall be entitled to an award of all
costs in connection with the arbitration, including
reasonable attorney's fees, from the panel. Any costs, fees
or taxes involved in enforcing the award shall be fully
assessed against and paid by the party resisting enforcement
of the award.
11.3 Nothing in this Section 11 will prevent either party from
resorting to judicial proceedings or otherwise for
injunctive relief to prevent serious irreparable harm or
injury to the parties or others, as applicable.
11.4 In the event that a non-party to this Agreement initiates
legal proceedings (including, but not limited to, an
arbitration claim or a claim in state or Federal court)
against either party relating to or arising out of this
Agreement, each party agrees to litigate or arbitrate in the
forum in which such legal proceeding is brought.
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12. Miscellaneous.
12.1 This Agreement may be amended only upon the mutual written
agreement of the parties hereto. This Agreement shall be in
substitution of any prior agreement between the parties
hereto regarding the distribution of the Units.
12.2 This Agreement shall automatically terminate in the event of
its assignment. The term "assignment" shall have the meaning
specified in, and shall be construed in a manner consistent
with the 1940 Act, subject to such exemptions as may be
granted by the SEC.
12.3 Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (i) if to the
Company, at the office of the Company, 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxx X. Xxxx; or
(ii) if to the Distributor, at the office of the
Distributor, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxx. Any such
notice shall be effective only upon receipt. Any notice
under Section 10 may be made by telex or telephone, but if
so made shall be subsequently confirmed in writing.
12.4 If any provision of this Agreement is found by a court or
agency of competent jurisdiction to be in violation of any
state or federal law, rule or regulation, then the
invalidity of such provision shall not affect the
enforceability or validity of the remaining provisions.
12.5 This Agreement shall be governed by and construed in
accordance with the laws of the State of California
applicable to the contracts made and to be performed
entirely within such state.
12.6 This Agreement may be signed in two or more counterparts
with the same effect as if the signatures thereto and hereto
were upon the same instrument.
12.7 The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
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Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below
indicated, whereupon it shall become a binding agreement between us.
Yours very truly,
XXXXXXX XXXXXX & CO., INC
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Accepted:
EXCELSIOR VENTURE PARTNERS III, LLC
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
U.S. TRUST COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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APPENDIX A
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
SELLING AGENT AGREEMENT
[Name of Entity]
Dear Sirs and Mesdames:
This is to confirm that, in consideration of the agreements
hereinafter contained, [NAME OF ENTITY] (the "Selling Agent"), EXCELSIOR
VENTURE PARTNERS III, LLC (the "Company"), a Delaware limited liability
company that has elected to be treated as a business development company under
the Investment Company Act of 1940, as amended (the "1940 Act") and XXXXXXX
XXXXXX & CO., INC. ("Schwab"), the distributor for the Company, have agreed
that the Selling Agent shall serve as selling agent of the units of beneficial
interest (the "Units") of the Company.
1. Description of the Offering and Sale of Units.
1.1 Based on the terms of this Agreement, on the basis of the
representations, warranties and agreements herein contained,
but subject to the terms and conditions herein, Schwab, the
distributor for the Company pursuant to a Distribution
Agreement dated __________ __, 2000 (the "Distribution
Agreement"), hereby appoints Selling Agent to serve as a
non-exclusive selling agent for the sale and offer of the
Units to be offered and sold in the offering described below
(the "Offering"), and the Selling Agent hereby agrees to
accept such appointment.
1.2 The terms of the Offering are set forth in the Company's
effective registration statement on Form N-2 filed with the
Securities and Exchange Commission (the "SEC") and the
prospectus and statement of additional information included
therein relating to the Units. Such (i) registration
statement and (ii) prospectus and statement of additional
information constituting a part thereof, each as from time
to time amended or supplemented pursuant to the Securities
Act of 1933, as amended (the "1933 Act"), the 1940 Act, or
otherwise, are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that
if any prospectus or statement of additional information, or
amendment or supplement thereto, shall be provided by the
Company for use in connection with the offering of the Units
that differs from the Prospectus on file at the SEC at the
time the Registration Statement becomes effective (whether
or not such prospectus or amendment or supplement thereto is
required to be filed by the Company pursuant to
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Rule 497 of the 1933 Act), the term "Prospectus" shall refer
to such revised prospectus and statement of additional
information as so amended or supplemented from and after the
time it is first provided to the Distributor for such use.
1.3 The initial closing of the Offering is expected to occur on
or about the fifth business day after receipt of
subscriptions for at least $100,000,000 (the "Initial
Closing Date") and the Company may continue to offer the
remaining unsold Units and accept subscriptions from time to
time at subsequent closings until December 31, 2000, subject
to extension by the Company's Board of Managers until May
11, 2001 (the "Subsequent Closing Dates," and together with
the Initial Closing Date, the "Closing Dates"). Subsequent
Closings of the Company will be held at the discretion of the
Company.
1.4 In effecting the purchase or sale of Units, the parties
understand and agree that Selling Agent shall act solely as
agent for Schwab and purchasers of Units, and that all
purchases of Units shall be initiated solely upon the
instruction and order of the purchaser thereof for such
purchaser's account and under no circumstances for the
account of Selling Agent.
1.5 Neither the Selling Agent nor any other person is authorized
to give any information or make any representations other
than those contained in the Registration Statement or
Prospectus or in any Sales Material (as defined in Section
2.5 below) furnished or approved by the Company for use in
the sale of the Units.
1.6 Selling Agent may sell Units only pursuant to properly
completed and executed Subscription Agreements, in the form
attached to the Prospectus, and related documents provided
to the Selling Agent by Schwab or, upon notice to Schwab, by
the Company from time to time, and in accordance with the
terms of the Prospectus and the Distribution Agreement.
1.7 All subscriptions by the Selling Agent will be subject to
confirmation and acceptance by the Company, in whole or in
part. The Company reserves the right to accept or reject any
such subscription. The Company shall have full authority to
take such actions as it may deem advisable with respect to
all matters pertaining to the Offering.
1.8 Investors who maintain a brokerage account with Schwab or an
investment or custody account at U.S. Trust normally will
have their account debited to pay the subscription amount.
Prospective investors who do not otherwise maintain a
brokerage account with Schwab or an investment or custody
account at U.S. Trust will deposit their funds into an
escrow account in accordance with the escrow agreement among
the Company, PNC Bank, Delaware (the "Escrow Agent") and
PFPC Inc. (the "Escrow Administrator"), and the funds will
be invested in the Company at each closing as described in
the Prospectus. Checks should be made payable to the Escrow
Agent, and must be transmitted by Selling Agents directly
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to the Escrow Administrator by noon of the next business day
after receipt. Investors who maintain a brokerage account
with Schwab or an investment or custody account at U.S.
Trust may elect to make payment by check or wire as
described in this Section 1.8. Selling Agent will be
responsible for the prompt deposit with the Escrow
Administrator of funds to be paid for the purchase of Units
pursuant to instruments and procedures to be provided by the
Company. Selling Agent will retain all completed and
executed subscription documents, and will immediately notify
PFPC, as transfer agent, distribution paying agent and
custodian of the Company, of the name and address of each new
subscriber and the amount of funds that each new subscriber
has deposited in escrow.
1.9 The Selling Agent shall be an independent contractor and
neither the Selling Agent nor any of its directors, officers
or employees as such, is or shall be, solely by reason of
this Agreement, an employee of Schwab or the Company.
1.10 Concurrent with the effectiveness of the Registration
Statement, Schwab shall provide to the Selling Agent in
writing a list, provided to Schwab by Company, of those
states and other jurisdictions in which the Units are
qualified for sale, together with restrictions and
requirements applicable thereto, and Selling Agent will sell
Units only in such states or jurisdictions and in compliance
with such restrictions and requirements.
2. Representations and Warranties of Selling Agent. Selling agent
represents and warrants to Schwab and the Company that:
2.1 Selling Agent is duly and validly organized and operating in
good standing under the laws of its state of organization,
is qualified to do business in all states where offers or
sales will take place, and is either (i) registered as a
broker-dealer under applicable federal and state securities
laws and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); or
(ii) a "bank," as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and therefore exempt from registration as a
broker-dealer under applicable federal and state securities
laws and from the membership requirements of the NASD. NASD
members agree to abide by the rules and regulations of the
NASD, including, without limitation, the NASD Conduct Rules
(including to the extent applicable, NASD Conduct Rules
2420, 2730, 2740 and 2750). Selling Agent agrees to provide
immediate written notice to Schwab if it ceases to be (a)
registered and/or licensed as a broker and/or dealer under
applicable federal and state laws or fails to be a member in
good standing of the NASD; or (b) a "bank," as defined in
Section 3(a)(6) of the Exchange Act.
2.2 Selling Agent has the requisite authority to enter into,
execute, deliver and perform its obligations under this
Agreement and that with respect to it, this
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Agreement is legal, valid and binding, and enforceable in
accordance with its terms.
2.3 Selling Agent is either exempt from licensing or possesses
all material government licenses, permits, certificates,
consents, orders, approvals, memberships in self-regulatory
organizations and other authorizations necessary with
respect to its qualification to perform its duties under
this Agreement.
2.4 All activities by the Selling Agent, its agents and
employees as selling agent shall comply materially with all
applicable federal and state securities and banking laws,
rules and regulations, including, without limitation, the
1933 Act, the Exchange Act, the 1940 Act, the rules and
regulations thereunder, and all applicable restrictions and
requirements of each state or other jurisdiction in which
the Units are qualified for sale.
2.5 Selling Agent shall not make any representation concerning
the Company or its securities except those contained in the
Company's Registration Statement and Prospectus in effect
during the term of this Agreement or any Sales Materials.
"Sales Material," as used herein, shall include, without
limitation, promotional materials, sales literature,
advertisements, press releases, announcements, circulars,
research reports, market letters, performance reports or
summaries, form letters, posters, signs and other similar
materials, whether in print, hypertext, video, audio or
other media, and any items derived from the foregoing, and
including sales materials intended for wholesale use (i.e.,
broker/dealer use only) or retail use. The Selling Agent
agrees to deliver copies of the Prospectus and Sales
Materials to investors in accordance with applicable laws
and the rules of the SEC and federal and state bank
regulatory authorities.
2.6 During the term of this Agreement, Selling Agent agrees to
notify immediately the Company and Schwab, in writing, if it
becomes aware of any inaccurate or misleading statements in
the Prospectus; provided that the Selling Agent shall have
no duty of investigation in connection therewith.
2.7 Selling Agent agrees that it will offer Units strictly in
conformity with the provisions of this Agreement and the
Prospectus subject to Section 1.10 of this Agreement. No
Units shall be offered by the Selling Agent under any of the
provisions of this Agreement and no subscription for the
purchase or sale of Units hereunder shall be accepted by the
Company if and so long as the effectiveness of the
Registration Statement shall be suspended under any of the
provisions of the 1933 Act, or if and so long as a current
prospectus as required by Section 10(b) of the 1933 Act is
not on file with the SEC.
2.8 With the exception of (i) listings of product offerings and
(ii) materials used by the Selling Agent on an internal
basis only, Selling Agent agrees not to furnish or cause to
be furnished to any third parties or to display publicly or
publish any
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Sales Materials, except such Sales Materials relating to the
Company as may be distributed to the Selling Agent by Schwab
or, upon notice to and approval by Schwab, the Company.
Selling Agent agrees not to furnish or cause to be furnished
to any third parties or to display publicly or publish any
Sales Material referring to Schwab or any of its trademarks,
except, with respect to such references only, such Sales
Materials as may be approved by Schwab upon the Selling
Agent's request.
2.9 If Selling Agent is a "bank," as defined in Section 3(a)(6)
of the Exchange Act, Selling Agent will make appropriate
disclosure to purchasers that the Units are not endorsed by
Selling Agent, do not constitute Selling Agent's obligation
and are not entitled to federal deposit insurance.
2.10 All representations, warranties and covenants by Selling
Agent contained herein shall be true and correct at all
times during the term of this Agreement, and shall survive
termination of this Agreement.
3. Representations and Warranties of Schwab. Schwab represents and
warrants to Selling Agent that:
3.1 Schwab is duly organized and is validly existing as a
corporation in good standing under the laws of the State of
California and is qualified to do business in all states.
Schwab is also registered as a broker-dealer under
applicable federal and state laws and is a member in good
standing of NASD. Schwab agrees to notify Selling Agent
immediately if it ceases to be registered and/or licensed as
a broker and/or dealer under applicable federal and state
laws or fails to be a member in good standing of the NASD,
and Schwab agrees to abide by the rules and regulations of
the NASD, including, without limitation, the NASD Conduct
Rules (including, to the extent applicable, NASD Conduct
Rules 2420, 2730, 2740 and 2750).
3.2 Schwab has all the requisite authority to enter into,
execute, deliver and perform its obligations under this
Agreement and that, with respect to it, this Agreement is
legal, valid and binding, and enforceable in accordance with
its terms.
3.3 Schwab agrees to request from the Company and provide to the
Selling Agent in a timely manner such number of copies of
the Prospectus, applicable subscription agreements, and
Sales Material as may be reasonably requested by the Selling
Agent. In the event Selling Agent elects to use such Sales
Material, it is agreed that such Sales Material shall not be
used in connection with the sale of Units unless accompanied
or preceded by the Prospectus. All Sales Materials provided
to Selling Agent by Schwab shall have been furnished to
Schwab, or approved, by the Company.
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3.4 The Registration Statement, Prospectus and any Sales
Materials relating to the Company provided by Schwab to
Selling Agent does not contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were
made, not misleading with respect to any information
relating to Schwab furnished in writing to the Company by
Schwab expressly for use therein.
3.5 All representations, warranties, and agreements by Schwab
contained herein shall be true and correct at all times
during the term of this Agreement, and shall survive
termination of this Agreement.
4. Compensation. U.S. Trust Company agrees to pay the Selling Agent for
its service hereunder and the provision of ongoing investor services
to investors introduced to the Company through the Selling Agent
("Introduced Investors") an ongoing service fee payable quarterly in
arrears commencing with the first full fiscal quarter of the Company
after the termination of the offering as follows: (a) through the
termination of the twentieth full fiscal quarter after termination of
the offering, an amount equal to the annual rate of 0.45% of the
average quarterly net asset value of all outstanding Units of the
Company held by Introduced Investors as of the end of the fiscal
quarter in question, and (b) commencing with the twenty-first full
fiscal quarter after termination of the offering and continuing
thereafter, an amount equal to the annual rate of 0.22% of the
average quarterly net asset value of all outstanding Units of the
Company held by Introduced Investors as of the end of the fiscal
quarter in question; provided however, that the payments provided for
herein shall cease to be made once the aggregate payments made
pursuant to this Section 4 equal the product of 0.65 and the gross
proceeds received by the Company in connection with subscriptions for
Units in the Offering. Neither the Company nor the Distributor shall
have any responsibility for such payments and this Section 4 shall in
no way affect the obligations of the Selling Agent to perform its
duties hereunder. This Section 4 shall survive termination of this
Agreement.
5. Indemnification.
5.1 The Selling Agent agrees to indemnify and hold harmless
Schwab (for purposes of this Section 5.1, "Schwab" shall
mean Schwab, its directors, officers, employees and agents,
and any person who is or may be deemed to be a controlling
person of Schwab) from and against any and all losses,
claims, damages, liabilities and expenses, including the
reasonable costs of investigation and attorney's fees and
expenses as such expenses are incurred by Schwab in any
action or proceeding between the parties hereto or between
Schwab and any third party, to which Schwab may become
subject under the 1933 Act, the Exchange Act, the 1940 Act
or otherwise, insofar as any such loss, claim, damage,
liability or expense (or action with respect thereto) is
asserted by any person to whom the Selling Agent offered
Units or who subscribes to Units through the Selling Agent
or otherwise arises from Selling Agent's activities pursuant
to this Agreement,
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except insofar as such loss, claim, damage, or liability is
caused by any untrue statement or omission with respect to
information relating to Schwab furnished in writing to the
Company by Schwab expressly for use in the Registration
Statement, Prospectus, or Sales Material.
5.2 The Selling Agent agrees to indemnify and hold harmless the
Company (for purposes of this Section 5.2, the "Company"
shall mean the Company, its directors, officers, employees
and agents, and any person who is or may be deemed to be a
controlling person of the Company) from and against any and
all losses, claims, damages, liabilities and expenses,
including the reasonable costs of investigation and
attorney's fees and expenses as such expenses are incurred
by the Company in any action or proceeding between the
parties hereto or between the Company and any third party,
to which the Company may become subject under the 1933 Act,
the Exchange Act, the 1940 Act or otherwise, insofar as any
such loss, claim, damage, liability or expense (or action
with respect thereto) arises out of or is based on any
untrue statement of a material fact or omission with respect
to information relating to the Selling Agent furnished in
writing to the Company by the Selling Agent expressly for
use in the Registration Statement, Prospectus or Sales
Material.
5.3 Schwab agrees to indemnify and hold harmless Selling Agent
(for the purposes of this Section 5.3, "Selling Agent" shall
mean Selling Agent, its directors, its officers, employees
and agents of Selling Agent, and any person who is or may be
deemed to be a controlling person of Selling Agent) from and
against any and all losses, claims, damages, liabilities or
expenses (including the reasonable costs of investigation
and attorney's fees and expenses as such expenses are
incurred by Selling Agent in any action or proceeding
between the parties hereto or between Selling Agent and any
third party) to which Selling Agent may become subject under
the 1933 Act, the Exchange Act, the 1940 Act, or otherwise,
insofar as any such loss, claim, damage, liability or
expense (or action with respect thereto) arises out of or is
based on any untrue statement of a material fact contained
in the Registration Statement, Prospectus or Sales
Materials, or arises out of or is based on the failure to
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading;
provided, however, that Xxxxxx'x obligation to indemnify and
hold harmless Selling Agent applies only with respect to
such statements or omissions of material fact relating to
information about Schwab furnished in writing by Schwab
expressly for use in the Registration Statement, Prospectus
or Sales Materials. No indemnity hereunder shall apply with
respect to any Prospectus or Sales Materials used by Selling
Agent at a time not authorized under the 1933 Act or the
regulations adopted thereunder, provided that Schwab or the
Company has informed Selling Agent in writing that there is
no such authorization, or Selling Agent otherwise knows that
there is no such authorization.
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5.4 The Company agrees to indemnify and hold harmless the
Selling Agent (for the purposes of this Section 5.4,
"Selling Agent" shall mean Selling Agent, its directors,
officers, employees and agents, and any person who is or may
be deemed to be a controlling person of Selling Agent) from
and against any and all losses, claims, damages, liabilities
and expenses (including the reasonable costs of
investigating or defending such losses, claims, damages or
liabilities and any attorney's fees and expenses incurred in
connection therewith) which Selling Agent may incur (i)
under the 1933 Act, the 1940 Act or otherwise, arising out
of or based upon any untrue statement, or alleged untrue
statement, of a material fact contained in (a) the
Registration Statement of the Company (including any
Prospectus that is part of any such Registration Statement)
or any amendment or supplement thereto, and (b) any Sales
Materials relating to the Company provided to the Selling
Agent by the Company (whether or not the Selling Agent has
approved the use of such Sales Materials), or arising out of
or based upon any omission, or alleged omission, to state a
material fact required to be stated in any Registration
Statement, Prospectus, or Sales Materials or necessary to
make the statements therein not misleading; and (ii) as a
result of any breach by the Company of any representation,
warranty or covenant made by the Company under the
Distribution Agreement; provided, however, that the
Company's agreement to indemnify Selling Agent (i) shall not
be deemed to cover any losses, claims, damages, liabilities
or expenses arising out of any untrue statements or
representations contained in any Registration Statement,
Prospectus or Sales Material as are furnished in writing to
the Company by Selling Agent expressly for use therein; and
(ii) shall not be deemed to cover any liability to the
Company to which the Selling Agent would otherwise be
subject by reason of willful misfeasance, bad faith, and
gross negligence in the performance of its duties, or any
reason of the Selling Agent's reckless disregard for its
obligations and duties under this Agreement.
5.5 If a party seeks indemnity under this Section 5 (the
"indemnified party"), the indemnified party shall, promptly,
after receipt of notice of commencement of any action, suit
or proceeding against the indemnified party, give written
notice of the commencement of such action, suit or
proceeding to the other party (the "indemnifying party"),
but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any obligation it
may otherwise have, except to the extent that it is actually
harmed by such an omission. In case such notice of any such
action shall be so given, the indemnifying party shall be
entitled to participate at its own expense in the defense,
or, if it so elects, to assume the defense of such action,
in which event such defense shall be conducted by counsel
(satisfactory to the indemnified party) chosen by the
indemnifying party; provided, however, that the indemnifying
party shall not have the right to assume the defense of any
action in which the named parties (including any implied
parties) include both parties and in which counsel to either
party has advised that there may be legal defenses available
to one party which are in conflict with those available to
the other party. If the indemnifying party
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elects to assume the defense of such action and it has the
right to do so, the indemnified party shall bear the fees
and expenses of any additional counsel it retains. If the
indemnifying party does not elect to assume the defense of
such action and in cases where separate counsel is retained
because of the availability of conflicting defenses, the
indemnifying party will reimburse the indemnified party for
the reasonable fees and expenses of any counsel retained by
the indemnified party. Payment (other than the
reimbursement of the indemnified party's legal and other
related fees and expenses, which will be payable to it upon
receipt by the indemnifying party of a xxxx related thereto)
shall be made upon the rendering of any final decision in
such action, suit or proceeding by a court, panel of
arbitrators, administrative agency or self-regulatory
organization, or upon any settlement of any dispute, the
subject of which involves such a claim. No such action,
suit or proceeding or dispute, the subject of which involves
such a claim, shall be settled by either party without
notice to and consent by the other, which consent shall not
be unreasonably withheld.
5.6 This Section 5 shall survive the termination of this
Agreement.
6. Contribution.
6.1 If the indemnification provided for in Section 5 hereof is
for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to
therein, then each party shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred,
(i) in such proportion as is appropriate to reflect the
relative benefits received by such party under this
Agreement or (ii) if the allocation provided by clause (i)
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault
of such party in connection with the statements or
omissions, and/or any breach of any representation, warranty
or covenant made hereunder, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any
other relevant equitable considerations.
6.2 The relative fault of a party shall be determined by
reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to
information supplied by such party and such party's relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
6.3 The parties agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred
to above in this Section 6. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in
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this Section 6 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or
omission or alleged omission.
6.4 Notwithstanding the provisions of this Section 6, neither
the Selling Agent nor Schwab shall be required to contribute
any amount in excess of the amount by which the total price
at which Company shares were offered to the public exceeds
the amount of any damages which the Selling Agent or Schwab,
as the case may be, has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or
omission or alleged omission.
6.5 No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
6.6 This Section 6 shall survive the termination of this
Agreement.
7. Termination. This Agreement shall become effective upon its
execution and shall continue in force until the earlier of the date
that Schwab notifies Selling Agent that the offer is terminated or
complete or the date set forth in the Prospectus; provided, however,
that in no case shall this Agreement remain in force beyond May 11,
2001. Prior to the last Closing Date, this Agreement may be
terminated by Schwab or the Selling Agent immediately upon written
notice to the other party at any time. Any expenses incurred by the
Selling Agent in the performance of its efforts under this Agreement,
including but not limited to expenses related to the sale of the
Units, shall be at Selling Agent's sole expense, and the foregoing
shall apply notwithstanding the fact that the Offering is terminated
for any reason.
8. Arbitration. In the event of a dispute between the parties relating
to or arising out of this Agreement or the parties' relationship
hereunder, the parties agree to the extent permitted by applicable
law to submit the matter to arbitration in accordance with Sections
8.1, 8.2 and 8.3 below. In the event of such a dispute between the
parties:
8.1 Arbitration will be held in San Francisco, California, in
accordance with the rules and regulations of the NASD,
except, in the event that the NASD is unwilling to accept
jurisdiction of the matter, such arbitration will be held in
San Francisco, California in accordance with the rules and
regulations of the American Arbitration Association.
8.2 If the arbitration is brought by a party, the number of
arbitrators will be three (3), and they will be selected in
accordance with the rules and regulations of the NASD or
American Arbitration Association, as appropriate. The
arbitrators shall be attorneys who are from the securities
industry as defined by the applicable
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arbitration rules. Any award of the arbitrators will be
limited to compensatory damages and will be conclusive and
binding upon the parties. The arbitration shall be governed
by the Federal Arbitration Act, 9 U.S.C. Sections 1-16 to
the exclusion of state laws inconsistent therewith, and
judgment upon the award may be entered in any court having
jurisdiction.
8.3 The prevailing party shall be entitled to an award of all
costs in connection with the arbitration, including
reasonable attorney's fees, from the panel. Any costs, fees
or taxes involved in enforcing the award shall be fully
assessed against and paid by the party resisting enforcement
of the award.
8.4 Nothing in this Section 8 will prevent a party from
resorting to judicial proceedings or otherwise for
injunctive relief to prevent serious irreparable harm or
injury to the parties or others, as applicable.
8.5 In the event that a non-party to this Agreement initiates
legal proceedings (including, but not limited to, an
arbitration claim or a claim in state or Federal court)
against the parties relating to or arising out of this
Agreement, the parties agree to litigate or arbitrate in the
forum in which such legal proceeding is brought.
9. Miscellaneous.
9.1 This Agreement may be amended upon the mutual written
agreement of the parties hereto. This Agreement shall be in
substitution of any prior agreement between the parties
hereto regarding the distribution of Company shares.
9.2 The Selling Agent acknowledges that the Company reserves the
right in its discretion and without prior notice to Selling
Agent, subject to applicable law, to withdraw the offering
of shares of the Company.
9.3 All communications shall be sent to the Company at its
offices at Excelsior Venture Partners III, LLC, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to Schwab at its
offices at Xxxxxxx Xxxxxx & Co., Inc., Attention: Xxxxx
Xxxxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000 and to Selling Agent at its offices at [Selling
Agent's address]. Notice shall be deemed to have been given
on the date it was either delivered personally to a party or
any officer or member thereof or was either received by
express delivery or telecopy (with receipt) by a party at
his or her address specified in this Agreement. A party may
change the address to which communications to it shall be
sent by giving notice thereof in accordance with this
provision.
9.4 If any provision of this Agreement is found by a court or
agency of competent jurisdiction to be in violation of any
state or federal law, rule or regulation, then
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the invalidity of such provision shall not affect the
enforceability or validity of the remaining provisions.
9.5 This Agreement shall be governed by and construed in
accordance with the laws of the State of California
applicable to the contracts made and to be performed
entirely within such state.
9.6 This Agreement may be executed in one or more counterparts,
each of which shall constitute an original and all of which
together shall constitute one agreement.
9.7 The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below
indicated, whereupon it shall become a binding agreement
Yours very truly,
XXXXXXX XXXXXX & CO., INC.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Date:
-----------------------------------------
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Accepted:
[NAME OF ENTITY]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-----------------------------------
Address:
-----------------------------------
Date:
--------------------------------------
EXCELSIOR VENTURE PARTNERS III, LLC
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Date:
--------------------------------------
CONFIRMED AND ACCEPTED WITH RESPECT TO PARAGRAPH 4 HEREOF:
U.S. TRUST COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Date:
--------------------------------------
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