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EXHIBIT 10.03
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of __________________ __, 1997,
among EXCELSIOR PRIVATE EQUITY FUND II, INC., a Maryland corporation (the
"Company"), UNITED STATES TRUST COMPANY OF NEW YORK, a New York corporation
(the "Escrow Agent"), and UST FINANCIAL SERVICES CORP., a _________________
corporation (the "Selling Agent").
W I T N E S S E T H:
WHEREAS, the Company proposes to offer and sell to the public a
maximum of 150,000 shares and a minimum of 100,000 shares of the Company's
common stock, par value $0.01 per share (the "Common Stock") (the "Offering"),
pursuant to a Registration Statement on Form N-2 (the "Registration Statement")
filed with the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933, as amended (the "Securities Act"); and
WHEREAS, prior to such time as the SEC declares the Registration
Statement effective, the Company and the Selling Agent intend to enter into a
Selling Agent Agreement, in substantially the form filed with the SEC as an
exhibit to the Registration Statement (the "Selling Agent Agreement"); and
WHEREAS, pursuant to the Selling Agent Agreement, the Selling Agent
will solicit subscriptions for the purchase of Common Stock from investors who
are acceptable to the Company during the period commencing on the effective date
of the Selling Agent Agreement and terminating on July 31, 1997, or such
subsequent date not later than December 31, 1997 as the Company and the
Company's Managing Investment Adviser (as defined in the Registration Statement,
as amended) may determine (the "Termination Date"); and
WHEREAS, the Company and the Selling Agent desire to provide for the
safekeeping of funds accompanying subscriptions (the "Subscription Funds")
until such time as the Subscription Funds are released for Company uses, or
until such time as the Escrow Agent is required to return the Subscription
Funds to subscribers for the Common Stock (the "Subscribers") as hereinafter
set forth; and
WHEREAS, the Escrow Agent has consented to act as escrow agent and
to receive and hold the Subscription Funds to be deposited in escrow for the
Company and the Subscribers upon the terms hereinafter set forth.
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NOW, THEREFORE, in consideration of the mutual covenants and
promises herein contained and other good and valuable consideration, the parties
hereto agree as follows:
1. Appointment of Escrow Agent; Term. For the period commencing on
the date of first receipt of Subscription Funds deposited with the Escrow Agent
in connection with subscriptions for the Common Stock, and terminating after the
Termination Date following the release of all Subscription Funds to the Company
or to Subscribers, or such other time as shall be necessary or appropriate for
the Escrow Agent to accomplish its duties hereunder, the Escrow Agent shall
serve in the capacity of escrow agent and shall receive, hold and disburse the
Subscription Funds in accordance with the terms hereof.
2. Representations.
(a) The Company represents and warrants to the Escrow Agent and agrees
that each Subscriber, by virtue of its agreement to purchase any of the Common
Stock, shall become a third party beneficiary of this Escrow Agreement.
(b) The Company has delivered or will deliver to the Escrow Agent a true,
correct and complete copy of the Registration Statement as filed with the SEC,
and hereby agrees to deliver to the Escrow Agent any and all subsequent
amendments thereto.
3. Receipt of Subscription Funds; Rejection or Withdrawal.
(a) The Company will solicit subscriptions for the Common Stock through
the Selling Agent. Each Subscriber desiring to purchase Common Stock will be
required to (i) complete, execute and deliver to the Selling Agent an executed
copy of a subscription agreement (the "Subscription Agreement") and (ii) deliver
to the Selling Agent a check payable to the order of "United States Trust
Company of New York -- Escrow Agent" in each case in the amount of $1,000 for
each share of Common Stock the Subscriber desires to purchase. The Selling Agent
shall forward each check received to the Escrow Agent by noon of the first
business day after receipt and simultaneously send to the Escrow Agent and to
the Company a telegram, telecopy, or other appropriate communication stating the
name of each Subscriber and the amount of such Subscriber's Subscription Funds
transferred to the Escrow Agent. Simultaneous with the transfer of any check to
the Escrow Agent, the Selling Agent shall forward the corresponding Subscription
Agreement to the Company and shall forward a copy thereof to the Escrow Agent.
The Company shall notify the Selling Agent and the Escrow Agent of its
acceptance or rejection of any Subscription Agreement within two business days
of receipt by the Company of such Subscription Agreement.
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(b) In the event the Company rejects the Subscription Agreement of any
Subscriber before the Initial Closing Date specified in Section 5(a) or an
Additional Closing Date specified in Section 5(b), then upon receipt by the
Escrow Agent from the Company of written notice of such rejection, the Escrow
Agent shall promptly deliver to such Subscriber, pursuant to instructions from
the Selling Agent, such Subscriber's Subscription Funds received by the Escrow
Agent. Any interest earned on such Subscription Funds to which such Subscriber
is entitled under the provisions of this Agreement shall be returned to the
Subscriber within five business days of such rejection.
(c) In the event a Subscriber elects to withdraw his subscription before
the Initial Closing Date specified in Section 5(a) or an Additional Closing Date
specified in Section 5(b), then upon receipt by the Escrow Agent from either the
Company or the Selling Agent of written notice of such election, the Escrow
Agent shall promptly deliver to such Subscriber, pursuant to instructions from
the Selling Agent, such Subscriber's Subscription Funds received by the Escrow
Agent. Any interest earned on such Subscription Funds to which such Subscriber
is entitled under the provisions of this Agreement shall be returned to the
Subscriber within five business days of the next closing after such withdrawal.
4. Investment of Subscription Funds. The Escrow Agent shall invest
all Subscription Funds received by it hereunder promptly upon its receipt
thereof only in a fully-insured, interest-bearing banking account at a bank
having capital and surplus in excess of $100 million (including the Escrow
Agent).
5. Release of Subscription Funds.
(a) Upon receipt of Subscription Funds representing the sale of at least
100,000 shares of Common Stock in the aggregate on or before the Termination
Date (the "Minimum Requirement"), the Escrow Agent will provide telephonic
notice, followed by written confirmation, of such receipt to the Company. The
Company will then deliver to the Escrow Agent a certificate executed by a duly
authorized officer of the Company which shall provide (i) certification that
Subscription Agreements representing the Minimum Requirement have been received
and are deemed acceptable to the Company, (ii) a date for the release of the
Subscription Funds (the "Initial Closing Date"), which date shall not be later
than 10 business days after the receipt of the Escrow Agent's telephonic notice
described in the preceding sentence, and (iii) instructions for the distribution
to Subscribers of their respective pro rata share of any interest earned on
Subscription Funds held by the Escrow Agent from the date each Subscriber's
Subscription Funds were invested in the Escrow Account up to but excluding the
Initial Closing Date. Within five business days after the Initial Closing Date,
the
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Escrow Agent shall mail to each Subscriber checks in the respective amounts of
each Subscriber's pro rata share of the interest earned on the investment of the
Subscription Funds.
(b) Subsequent to the Initial Closing Date, the Escrow Agent shall from
time to time deliver any Subscription Funds received from Subscribers (except
for interest earned on the investment of such Subscription Funds) to the Company
at such dates as shall be directed by telephonic notice, followed by written
confirmation, from the Company to the Escrow Agent (each such date, an
"Additional Closing Date"). Not later than five business days prior to any
Additional Closing Date, the Company shall furnish to the Escrow Agent
instructions as to the distribution to Subscribers of their pro rata share of
any interest earned on Subscription Funds held by the Escrow Agent from the date
each Subscriber's Subscription Funds were invested in the Escrow Account up to
but excluding the Additional Closing Date. Within five business days after such
Additional Closing Date, the Escrow Agent shall mail to each Subscriber checks
in the respective amounts of each Subscriber's pro rata share of the interest
earned on the investment of the Subscription Funds.
(c) If the Escrow Agent does not receive sufficient Subscription Funds by
the Termination Date to satisfy the Minimum Requirement, then, upon receipt of
written instructions from the Company or the Selling Agent, the Escrow Agent
shall, promptly after it receives such instructions (including instructions for
the distribution to Subscribers of their respective pro rata share of any
interest earned on the Subscription Funds and a list of the Subscribers, the
number of shares subscribed for and the cash contribution of each Subscriber),
remit to Subscribers the Subscription Funds which such Subscribers have paid,
together with interest earned on such Subscription Funds from the date each
Subscriber's Subscription Funds were invested in the Escrow Account through the
date of the release of the Subscription Funds from the Escrow Account which
release date shall not be more than five business days prior to the date that
such released Subscription Funds are distributed to each Subscriber. Upon
distribution to Subscribers by the Escrow Agent of all Subscription Funds
together with all interest payable on such amounts, and receipt by the Escrow
Agent of the fees and expenses to which it is entitled, this Agreement shall
terminate.
(d) The Company may, in consultation with the Managing Investment Adviser,
waive the Minimum Requirement or postpone the Termination Date of the Offering.
In the event the Managing Investment Adviser and the Company shall agree to
waive the Minimum Requirement or postpone the Termination Date, the Company
shall notify the Escrow Agent of such fact in writing, specifying the date to
which the Termination Date shall be postponed in case of such postponement. The
Termination Date shall not be postponed beyond December 31, 1997, in accordance
with the Registration Statement.
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6. Escrow Agent.
(a) The Escrow Agent shall not be liable for any action taken or omitted
by it, or any action suffered by it to be taken or omitted, in good faith and in
the exercise of its own best judgment, and may rely conclusively and shall be
protected in acting upon any order, notice, demand, certificate, opinion or
advice of counsel (including counsel chosen by the Escrow Agent), statement,
instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth
and acceptability of any information therein contained) which is believed by the
Escrow Agent to be genuine and to be signed or presented by the proper person or
persons. The Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Agreement unless
evidenced by a writing delivered to the Escrow Agent signed by the proper party
or parties and, if the duties or rights of the Escrow Agent are affected, unless
it shall have given its prior written consent thereto.
(b) The Escrow Agent shall not be responsible for the sufficiency or
accuracy, the form of, or the execution, validity, value or genuineness of, any
document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein, nor shall the Escrow Agent be responsible or liable in
any respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any document or
property paid or delivered by the Escrow Agent pursuant to the provisions
hereof. The Escrow Agent shall not be liable for any loss which may be incurred
by reason of any Subscription Funds it holds hereunder provided that it shall
comply with the investment instruction set forth in Section 4 hereof.
(c) The Escrow Agent shall have the right to assume in the absence of
written notice to the contrary from the proper person or persons that a fact or
an event by reason of which an action would or might be taken by the Escrow
Agent does not exist or has not occurred, without incurring liability for any
action taken or omitted, in good faith and in the exercise of its own best
judgment, in reliance upon such assumption.
(d) The Escrow Agent shall be indemnified and held harmless by the
Company, from and against any expenses, including counsel fees and
disbursements, or loss suffered by the Escrow Agent in connection with any
action, suit or other proceeding involving any claim, or in connection with any
claim or demand, which in any way directly or indirectly, arises out of or is
related to this Agreement, the services of the Escrow Agent hereunder, the
monies or other property held by it hereunder or any such expense or loss.
Promptly after the receipt by the
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Escrow Agent of notice of any demand or claim or the commencement of any action,
suit or proceeding, the Escrow Agent shall, if a claim in respect thereof shall
be made against the Company, notify the Company in writing; but the failure by
the Escrow Agent to give such notice shall not relieve the Company from any
liability which the Company may have to the Escrow Agent hereunder. In the event
of the receipt of such notice, the Escrow Agent, in its sole discretion, may
commence an action in the nature of interpleader in an appropriate court to
determine ownership or disposition of the proceeds and documents held in escrow
hereunder or it may deposit such proceeds and documents with the clerk of any
appropriate court or it may retain such proceeds and documents pending receipt
of a final, non-appealable order of a court having jurisdiction over all of the
parties hereto directing to whom and under what circumstances such proceeds and
documents are to be disbursed and delivered.
(e) The Escrow Agent shall be entitled to compensation from the Company
for all services rendered by it hereunder as set forth on Schedule A attached
hereto and made a part hereof. The Escrow Agent shall also be entitled to
reimbursement from the Company for all reasonable expenses paid or incurred by
it in the administration of its duties hereunder including, but not limited to,
all counsel, advisers' and agents' fees and disbursements and all taxes or other
governmental charges. It is acknowledged by the Escrow Agent and the Company
that the obligation to indemnify, compensate or reimburse the Escrow Agent shall
be solely that of the Company, and the Subscribers shall not be liable for the
payment of any amounts due the Escrow Agent under Sections 6(d) or 6(e).
(f) From time to time on and after the date hereof, the Company shall
deliver or cause to be delivered to the Escrow Agent such further documents and
instruments and shall do or cause to be done such further acts as the Escrow
Agent shall reasonably request (it being understood that the Escrow Agent shall
have no obligation to make any such request) to carry out more effectively the
provisions and purposes of this Agreement, to evidence compliance herewith or to
assure itself that it is protected in acting hereunder.
(g) The Escrow Agent may resign at any time and be discharged from its
duties as Escrow Agent hereunder by giving the Company at least 60 days prior
written notice thereof. As soon as practicable after its resignation, the Escrow
Agent shall turn over to a successor escrow agent appointed by the Company, all
monies and property held hereunder upon presentation of the document appointing
the new escrow agent and its acceptance thereof. If no new escrow agent is so
appointed within the 60-day period following the giving of such notice of
resignation, the Escrow Agent may deposit the aforesaid monies and property with
a person designated by the Company or the Selling Agent or
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in accordance with the directions of a final order or judgment of a court of
competent jurisdiction.
(h) The Escrow Agent shall resign and be discharged from its duties as
escrow agent hereunder if so requested in writing at any time by the Company;
provided, however, that such resignation shall become effective only upon
acceptance of the appointment by a successor escrow agent as provided in Section
6(g).
7. Legal Proceedings.
(a) The Escrow Agent shall not be required to institute legal proceedings
of any kind or to defend any lawsuit brought in connection with any escrowed
Subscription Funds, provided that the Escrow Agent shall cooperate with the
Company and/or the Selling Agent with respect to the institution or defense of
any such legal proceeding brought by or against the Company and/or the Selling
Agent, as the case may be. The Escrow Agent shall have no responsibility for the
genuineness or validity of any document or other item deposited with it, and the
Escrow Agent shall be fully protected in acting or refraining from acting in
accordance with any written instruction given to it hereunder and reasonably
believed by it to have been signed or given by the proper parties as designated
by the Company.
(b) If any controversy arises between the Company and any third party with
respect to the subject matter of this Agreement, its terms or conditions, the
Escrow Agent shall not be required to determine the same or take any action with
respect to any controversy but may await the settlement thereof by final
appropriate legal proceedings or otherwise as the Escrow Agent may require,
notwithstanding anything in this Agreement to the contrary, and in such event
the Escrow Agent shall not be liable for interest or damages prior to such
settlement.
(c) The Escrow Agent shall not be liable for any action taken by it in
good faith and reasonably believed by it to be authorized or within the rights
or powers conferred upon it by this Agreement and may consult with counsel of
its own choice and shall have full and complete authorization and protection for
any action taken or suffered by it hereunder in good faith and in accordance
with the opinion of such counsel.
(d) If legal action is instituted between the parties hereto to enforce
this Agreement, the prevailing party or parties shall be entitled to reasonable
attorneys' fees and the actual costs incurred in connection with such action.
8. Uncollectible Funds. If any check or instrument deposited under
this Agreement proves uncollectible and payment or investment of the amounts
represented by such check or instrument has been made pursuant to the terms of
this Agreement,
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then the Company shall promptly reimburse the Escrow Agent for such amount, and
the Escrow Agent shall deliver the returned check or instrument to the Company.
9. Reliance Upon Company's Certificate. Upon the request of the
Escrow Agent, the Company shall deliver to the Escrow Agent a certificate of the
President of the Company certifying as to (i) the authority of certain agents of
the Company to act on behalf of the Company in connection with this Agreement,
and (ii) the incumbency and signatures of such agents, and the Escrow Agent may
act in reliance on such certificate.
10. Amendments. This Escrow Agreement may not be modified, canceled,
abrogated or rescinded without the written consent of all parties hereto.
11. Notices. All notices, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed, registered or certified, return receipt requested,
first-class, postage paid to:
(a) the Escrow Agent:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: President
(b) the Company:
Excelsior Private Equity Fund II, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: President
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
(c) the Selling Agent:
UST Financial Services Corp.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: President
12. Successors. The rights created by this Escrow Agreement shall
enure to the benefit of, and the obligations
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created thereby shall be binding upon, the successors and assigns of the parties
hereto.
13. Severability. If any covenant, condition or other provision of
this Agreement is held to be invalid, void or illegal by any court of competent
jurisdiction, it will be deemed severable from the remainder of this Agreement
and will in no way affect or invalidate any other covenant, condition or other
provision.
14. Governing Law. This Agreement will be governed by and construed
and enforced in accordance with the laws of the State of New York without regard
for the principles of conflict of laws.
15. Captions. Section titles and captions are inserted for
convenience only, and in no way define, limit, extend or describe the scope of
this Agreement.
16. Integration. This Agreement is the entire agreement between the
parties regarding its subject matter. All agreements, covenants, representations
and warranties of the parties regarding the subject matter of this Agreement are
contained herein. No other agreements, covenants, representations or warranties
have been made by the parties on the subject of this Agreement. This is an
integrated agreement.
17. Counterparts. If this Agreement shall be executed in one or more
counterparts, such counterparts will constitute a single agreement.
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IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the date first above written.
EXCELSIOR PRIVATE EQUITY
FUND II, INC.
By:_____________________________________
Name: Xxxxx X. Xxxx
Title: President
UNITED STATES TRUST COMPANY OF
NEW YORK
By:_____________________________________
Name:
Title:
UST FINANCIAL SERVICES CORP.
By:_____________________________________
Name:
Title:
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SCHEDULE A
COMPENSATION
Fees
[TO BE INSERTED]
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