ESCROW AGREEMENT
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THIS AGREEMENT is made as of ______________, 2000, by and among
EXCELSIOR VENTURE PARTNERS III, LLC (the "Company") and PFPC INC. (the
"Escrow Agent").
WITNESSETH
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WHEREAS, the Company has retained PFPC Inc. to provide certain
administration, accounting and investor services pursuant to an
Administration, Accounting and Investor Services Agreement dated as of
_________, 2000.
WHEREAS, the Company desires that PFPC Inc. also provide certain
services as escrow agent, as described herein, and PFPC Inc. wishes to
provide such services.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. ACCEPTANCE BY ESCROW AGENT. The Escrow Agent hereby accepts the
appointment as escrow agent hereunder and agrees to act on the terms and
conditions hereinafter set forth.
2. RIGHTS AND RESPONSIBILITIES OF ESCROW AGENT. The acceptance by
the Escrow Agent of its duties hereunder is subject to the following terms
and conditions, which the parties to this Agreement hereby agree shall
govern and control the Escrow Agent's rights, duties, liabilities and
immunities.
(a) The Escrow Agent shall act hereunder as a depository
only, and in its capacity as such, it shall not be
responsible or liable in any manner whatever for the
sufficiency, correctness, genuineness or validity of (i) any
document furnished to the Escrow Agent or (ii) any asset
deposited with it.
(b) "Written Instructions" mean written instructions received
by the Escrow Agent and signed by any person named on the
attached Authorized Persons List ("Authorized Person"). The
instructions may be delivered by hand, mail, facsimile,
cable, telex or telegram; except that any instruction
terminating this Agreement may be given only by hand or mail.
The Escrow Agent may rely and shall be protected for
any action or omission it takes pursuant to Written
Instructions if it, in good faith, believes such Written
Instructions to be genuine. Unless otherwise provided in this
Agreement, the Escrow Agent shall act only upon Written
Instructions. The Escrow Agent shall be entitled to assume
that any Written Instruction received hereunder is not in any
way inconsistent with the provisions of the Company's limited
liability company agreement or this Agreement or of any vote,
resolution or proceeding of the Company's Board of Managers
or of the Company's members, unless and until the Escrow
Agent receives Written Instructions to the contrary.
(c) The Escrow Agent shall be obligated to exercise care and
diligence in the performance of its duties hereunder, to act
in good faith and to use its best efforts, within reasonable
limits, in performing services provided for under this
Agreement. The Escrow Agent shall be liable for any damages
arising out of its failure to perform its duties under this
Agreement to the extent such damages arise out of its willful
misfeasance, bad faith, gross negligence or reckless
disregard of such duties.
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Escrow Agent nor its affiliates shall
be liable to the Company for any consequential, special or
indirect losses or damages which the Company may incur or
suffer by or as a consequence of the Escrow Agent's or any
affiliates' performance of the services provided hereunder,
whether or not the likelihood of such losses or damages was
known by the Escrow Agent or its affiliates.
(e) Without limiting the generality of the foregoing or of
any other provision of this Agreement, the Escrow Agent shall
not be liable for losses beyond its control, provided it has
acted in accordance with the standard of care set forth
above; and the Escrow Agent shall not be liable for delays or
errors or loss of data occurring by reason of circumstances
beyond its control, including acts of civil or military
authority, national emergencies, labor difficulties, fire,
flood, catastrophe, acts of God, insurrection, war, riots or
failure of the mails, transportation, communication or power
supply.
(f) The Company agrees to indemnify the Escrow Agent and hold
it harmless from and against any tax, charge, loss,
liability, expense (including reasonable attorneys fees and
expenses), claim or demand arising directly or indirectly
from any action or omission to act which the Escrow Agent
takes (i) at the request or on the direction of or in
reliance on the advice of the Company or (ii) upon Written
Instructions; provided, however, that neither the Escrow
Agent, nor any of its affiliates, shall be indemnified
against any liability (or any expenses incident to such
liability) arising out of the Escrow Agent's or its
affiliates own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and
obligations under this Agreement. The Company shall indemnify
and hold harmless the Escrow Agent against and in respect of
any liability for taxes and for any penalties or interest in
respect of taxes attributable to the investment of funds held
in escrow by Escrow Agent pursuant to this Agreement. These
indemnities shall survive the resignation of the Escrow Agent
or the termination of this Escrow Agreement. Notwithstanding
anything in this Agreement to the contrary, neither the Fund
nor its affiliates shall be liable for any consequential,
special or indirect losses or damages, whether or not the
likelihood of such losses or damages was known by the Fund or
its affiliates.
(g) The Escrow Agent shall have no duties except those
specifically set forth in this Agreement.
(h) The Escrow Agent shall have the right at any time it
deems appropriate to seek an adjudication in court of
competent jurisdiction as to the respective rights of the
parties hereto and shall not be held liable by any party
hereto for any delay or the consequences of any delay
occasioned by such resort to court.
(i) The Escrow Agent shall promptly notify an Authorized
Person of any discrepancy between the amounts set forth on
any remittance advice received by Escrow Agent and the sums
delivered to it therewith.
3. DEFINITIONS. Except as specifically set forth herein, the terms
used in this Agreement shall have the same meaning as set forth in the
Administration, Accounting and Investor Services Agreement among the
parties.
4. DEPOSIT OF ESCROW FUND. The Escrow Agent shall establish
accounts in such of the following names as may be set forth in Written
Instructions or agreed to between the parties hereto in a separate writing:
"Potential Investors of "Excelsior Venture Partners III, L.L.C."
(hereinafter the "Subscription Account")," "U.S. Trust Company"
(hereinafter the "Adviser's Account") (individually, an "Account" and,
collectively, the "Accounts"). The Accounts shall be established at PNC
Bank, Delaware (the "Bank) which shall be appointed by the Escrow Agent to
hold the assets of such Accounts. Assets of the Accounts will earn interest
at prevailing market rates pursuant to arrangements approved by the
Company. Any checks should be made payable to PFPC, Inc. as "Escrow
Agent," and must be transmitted by Selling Agents directly to the Escrow
Agent by noon of the next business day after receipt. The Escrow Agent
shall promptly deposit Subscription Account checks remitted by persons
subscribing to purchase interests in the Company ("Potential Investors").
Potential Investors may also deposit monies in the Subscription Account (if
established) by wire transfer instructions provided to them by the Company.
The Escrow Agent may accept bulk wires at the direction of an Authorized
Person that represent an aggregate amount of money previously deposited
directly into the investors' brokerage accounts by such investors. The
Escrow Agent will maintain records related to each of the Accounts in
accordance with applicable regulatory requirements and the Escrow Agent's
record retention policies.
5. STATEMENTS. During the term of this Agreement, Escrow Agent
shall provide the Company with monthly statements containing the beginning
balance in each of the Accounts as well as all principal and income
transactions for the statement period and with a daily summary of amounts
deposited and status of available funds. The Company shall be responsible
for reconciling such statements. The Escrow Agent shall be forever released
and discharged from all liability with respect to the accuracy of such
statements, except with respect to any such act or transaction as to which
the Company shall, within 90 days after the furnishing of the statement,
file written objections with the Escrow Agent.
6. DISTRIBUTIONS AND CLOSINGS. Upon Written Instructions, at each
closing of each offering of interests in the Company, the Escrow Agent will
wire principal balances on deposit in the Subscription Account to the
Company's account at the Company's custodian. Such Written Instructions
shall be sent to the Escrow Agent by 2:00 pm. on the closing date with
respect to each closing. In the event that a Potential Investor who has
escrow funds in the Subscription Account is not admitted into the Company,
upon Written Instructions, the Escrow Agent shall promptly issue refunds to
the Potential Investor in check form in the amount of the principal balance
with accrued interest.
7. INTEREST/EARNINGS. All interest earned on the escrow funds
deposited in the Subscription Account hereunder shall be added to and held
in the Accounts. Upon each closing, pursuant to Written Instructions,
within 5 business days the Escrow Agent shall issue interest payments in
check form to each Potential Investor based on his individual balance in
the Subscription Account along with a cover letter and U.S. Trust Company
based upon its balance in the Adviser's Account along with a cover letter.
The Escrow Agent will prepare and send notifications on Form 1099 for each
calendar year to all persons who have received distributions of earnings
reflecting their respective shares of such earnings.
8. RESERVED
9. TAX IDENTIFICATION NUMBER. All deposits to the Accounts shall
be subject to the Escrow Agent's receipt of a valid tax identification
number for the Company or Potential Investor, as applicable.
10. COMPENSATION. The fee of the Escrow Agent for its services
hereunder shall be paid by the Company as may be mutually agreed to in
writing by the Company and Escrow Agent.
11. AMENDMENT. This Agreement may not be amended or supplemented
and no provision hereof may be modified or waived, except by an instrument
in writing, signed by all of the parties hereto.
12. TERMINATION. The Escrow Agreement shall continue until
terminated by either party on sixty (60) days' prior written notice. Upon
the termination of this Agreement and upon the delivery of the balance of
the Accounts by the Escrow Agent to a successor escrow agent or such other
person as may be designated by Written Instructions, the Escrow Agent shall
be relieved of any and all further obligations hereunder and it shall be
released and discharged from all further obligations hereunder, other than
such obligations arising under Section 2(e) above as may then exist.
If no successor Escrow Agent or other person has been designated
pursuant to Written Instructions to receive the balance of the Accounts at
the expiration of the sixty (60) day period, the Escrow Agent shall have no
further obligation hereunder except to hold the escrow funds as a
depositary, except as explicitly stated in the previous paragraph. Upon
Written Instructions of the appointment of the successor, the Escrow Agent
shall promptly deliver the balance of the Accounts to such successor.
13. EXECUTION. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such
counterparts together shall constitute one and the same instrument.
14. MISCELLANEOUS. All covenants and agreements contained in this
Agreement by or on behalf of the parties hereto shall bind and inure to the
benefit of such parties and their respective heirs, administrators, legal
representatives, successors and assigns, as the case may be. The headings
in this Agreement are for convenience of reference only and shall neither
be considered as part of this Agreement, nor limit or otherwise affect the
meaning thereof. This Agreement shall be construed and enforced in
accordance with the laws of Delaware without regard to principles of
conflicts of law.
15. NOTICES. All instructions, notices and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand, facsimile or mailed by first class, registered mail,
return receipt requested, postage prepaid, and addressed as follows:
(a) If to the Company:
Excelsior Venture Partners III, LLC
x/x Xxxxxx Xxxxxx Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
(b) If to the Escrow Agent:
PFPC Inc., Attn: Xxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
16. PARTIAL INVALIDITY. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
17. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding among the parties and supersedes all prior agreements and
understandings relating to the Accounts, provided that the parties may
embody in one or more separate documents their agreement, if any, with
respect to delegated duties and instructions.
IN WITNESS THEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
EXCELSIOR VENTURE PARTNERS III, LLC
By: ___________________________________
Title: _______________________________
PFPC INC.
By: ___________________________________
Title: ________________________________
AUTHORIZED PERSONS LIST
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