ESCROW AGREEMENT
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THIS AGREEMENT is made as of March 13, 2003, by and among EXCELSIOR
BUYOUT INVESTORS, LLC (the "Company") and PNC BANK, DELAWARE (the "Escrow
Agent") and PFPC INC. (the "Escrow Administrator").
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 March 13, 2003.
WHEREAS, the Company desires that PNC Bank, Delaware, an affiliate of
PFPC Inc., provide certain services as escrow agent, as described herein, and
PNC Bank, Delaware wishes to provide such services.
WHEREAS, PNC Bank, Delaware appoints PFPC Inc. as Escrow Administrator
to perform certain ministerial duties relative to the Company's escrow account;
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. 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 between the Company
and PFPC Inc.
3. 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 Escrow
Administrator or (ii) any asset deposited with it.
(b) "Written Instructions" shall mean written instructions received
by the Escrow Agent or Escrow Administrator and signed by any person
named on the attached Authorized Persons List ("Authorized Person")
as the same may be amended upon prior reasonable notice from time to
time. The instructions may be delivered by hand, mail, facsimile, or
electronic media; 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.
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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.
(c) The Escrow Agent shall be obligated to exercise reasonable 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 and its affiliates
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 and its affiliates 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,
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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 its
affiliates and hold it harmless from and against any tax, charge,
loss, liability, expense (including reasonable attorneys fees and
expenses), claim or demand (collectively "Losses") arising directly
or indirectly from any action or omission to act which the Escrow
Agent or the Escrow Administrator 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 and its affiliates 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 Escrow Agent 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 Company or its affiliates.
(g) The Escrow Agent shall have no duties except those specifically
set forth in this
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Agreement.
(h) The Escrow Agent shall have the right at any time it deems
appropriate to seek an adjudication in a 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 Administrator 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 on the part of the Escrow Administrator in the performance of its
duties and obligations under this Agreement.
4. Deposit of Escrow Fund. The Escrow Agent shall establish an account
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 Buyout Investors, LLC" (hereinafter the "Subscription Account"). A
separate account, if necessary, may be established titled "U.S. Trust Company"
(hereinafter the "Adviser's Account") (individually, an "Account" and,
collectively, the "Accounts"). The Accounts shall be established at Escrow
Agent. Escrow Agent appoints Escrow Administrator to act as signatory to the
Accounts and to perform all administrative and ministerial functions related to
the Accounts. Assets of the Accounts will earn interest at prevailing market
rates pursuant to arrangements approved by the Company and Escrow Agent. The
Company shall only approve investments permissible under Rule 15c2-4 of the
Securities Exchange Act of 1934, as amended. Any checks should be made payable
to PNC Bank, Delaware and must be transmitted by Selling Agents directly to the
Escrow Administrator
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by noon of the next business day after receipt. The Escrow Administrator 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 Potential
investors' brokerage accounts by such Potential investors. The Escrow Agent and
the Escrow Administrator will maintain records related to each of the Accounts
in accordance with applicable regulatory requirements and the Escrow Agent's and
Escrow Administrator'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 Administrator
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 Administrator by 2:00 pm. on the closing
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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 Administrator 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 Administrator 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 to U.S. Trust Company based upon its
balance in the Adviser's Account along with a cover letter. The Escrow
Administrator 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. 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.
9. Compensation. The fees and account related charges of the Escrow
Agent and Escrow Administrator for its services hereunder shall be paid by the
Company as may be mutually agreed to in writing by the Company and Escrow Agent
and Escrow Administrator.
10. 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.
11. Termination. The Escrow Agreement shall continue until terminated by
either
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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 and the Escrow Administrator 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.
12. 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.
13. 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.
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14. 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 Buyout Investors, LLC
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) If to the Escrow Administrator:
PFPC Inc., Attn: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(c) If to the Escrow Agent:
PNC Bank, Delaware, Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
15. 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.
16. 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.
[Signature page follows]
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IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
EXCELSIOR BUYOUT INVESTORS, LLC
By: : _____________________________
Title: : __________________________
PFPC INC.
By: _______________________________
Title: ____________________________
PNC BANK, DELAWARE
By: _______________________________
Title: ____________________________
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AUTHORIZED PERSONS LIST
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