Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
SELLING AGENT AGREEMENT
UST Securities Corp.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, UST Securities Corp. (the "Selling Agent"), EXCELSIOR BUYOUT
INVESTORS, 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 March __, 2003 (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 September 30, 2003, subject to extension by the
Company's Board of Managers until December 31, 2003 (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 (i) the Registration Statement or Prospectus or (ii)
any Sales Material (as defined in Section 2.6 below) furnished by
the Company and approved by the and Schwab 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 the
Company, and in accordance with the terms of the Prospectus.
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 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 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
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"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 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 Trust
Company, 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, the
Company shall provide to the Selling Agent 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 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 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")
Selling Agent 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 the Company and Schwab 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.
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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 USA Patriot 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 The Selling Agent (i) is a financial institution required to have an
anti-money laundering program under the Bank Secrecy Act, as
amended; (ii) is acting on behalf of its customers in its
dealings with the Company; (iii) has established and will
maintain policies and procedures reasonably designed to comply
with the regulations administered by the U.S. Department of
Treasury's Office of Foreign Assets Control; and (iv) has
established and will maintain policies and procedures reasonably
designed to prevent and detect money laundering, which policies
and procedures adhere to the requirements of all applicable laws,
including the Bank Secrecy Act, as amended. In the event any of
the foregoing representations ceases to be true, the Selling
Agent agrees to promptly notify the Company and Schwab.
2.6 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
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Materials to investors in accordance with applicable laws and the
rules of the SEC and federal and state bank regulatory authorities.
2.7 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.
2.8 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.
2.9 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 the Company
and approved by Schwab. 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.
2.10 Selling Agent agrees to request from the Company and the Company
agrees to 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 the Selling Agent elects to use such
Sales Material, it is agreed that such Sales Material shall not be
used in connection with this sale of Units unless accompanied or
preceded by the Prospectus.
2.11 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.
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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 USA Patriot Act, 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 The Registration Statement, Prospectus and any Sales Materials
relating to the Company provided by the Company 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.
3.4 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. Indemnification.
4.1 The Selling Agent agrees to indemnify and hold harmless Schwab (for
purposes of this Section 4.1, "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
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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.
4.2 The Selling Agent agrees to indemnify and hold harmless the Company
(for purposes of this Section 4.2, the "Company" shall mean the
Company, its managers, 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.
4.3 Schwab agrees to indemnify and hold harmless Selling Agent (for the
purposes of this Section 4.3, "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
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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.
4.4 The Company agrees to indemnify and hold harmless the Selling Agent
(for the purposes of this Section 4.4, "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.
4.5 If a party seeks indemnity under this Section 4 (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
8
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.
4.6 This Section 4 shall survive the termination of this Agreement.
5. 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 December 31, 2003. 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.
9
6. 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 6.1, 6.2 and 6.3 below.
In the event of such a dispute between the parties:
6.1 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.
6.2 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.
6.3 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.
6.4 Nothing in this Section 6 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.
6.5 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.
7. Miscellaneous.
7.1 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.
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7.2 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.
7.3 All communications shall be sent to the Company at its offices at
Excelsior Buyout Investors, LLC, 000 Xxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, to Schwab at its offices at Xxxxxxx Xxxxxx &
Co., Inc., Attention: Xxxxx X. Xxxxxx 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000 and to Selling Agent at its offices
at 000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000.
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.
7.4 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.
7.5 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.
7.6 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.
7.7 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.
Very truly yours,
XXXXXXX XXXXXX & CO., INC
By:-------------------------------
Name:-----------------------------
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Title:----------------------------
Date:-----------------------------
Accepted:
--------
UST SECURITIES CORP.
By: ------------------------
Name: ------------------------
Title: ------------------------
Address: ------------------------
Date: ------------------------
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EXCELSIOR BUYOUT INVESTORS, LLC
By: ------------------------
Name: ------------------------
Title: ------------------------
Address: ------------------------
Date: ------------------------
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