DISTRIBUTION AGREEMENT
_________ __, 2000
Excelsior Venture Investors 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 INVESTORS III, LLC (the "Company"), a Delaware limited
liability company registered 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 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 $50,000,000 (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.
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 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. 333-38550) 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 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 under 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 the
Company and the Rules and Regulations.
4.8 RESERVED.
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 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 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 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.
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 (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
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 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 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.
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.
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 INVESTORS III, LLC
By:
--------------------------
Name:
------------------------
Title:
-----------------------
U.S. TRUST COMPANY
By:
--------------------------
Name:
------------------------
Title:
-----------------------
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 INVESTORS III, LLC (the "Company"), a Delaware limited liability
company registered 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 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 $50,000,000 (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 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 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
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 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.
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, 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.
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 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 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 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 Investors 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 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:
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Name:
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Title:
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Date:
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Accepted:
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[NAME OF ENTITY]
By:
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Name:
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Title:
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Address:
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Date:
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EXCELSIOR VENTURE INVESTORS III, LLC
By:
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Name:
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Title:
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Date:
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CONFIRMED AND ACCEPTED WITH RESPECT TO PARAGRAPH 4 HEREOF:
U.S. TRUST COMPANY
By:
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Name:
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Title:
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Date:
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