Exhibit (h)(2)
BROKER DEALER
SELLING AGREEMENT
THIS BROKER DEALER SELLING AGREEMENT ("Agreement") made and entered into
between ALPS Distributors, Inc. ("ADI"), a Colorado corporation having its
principal place of business at 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000, and [Name of Broker/Dealer] a [______] corporation having its principal
place of business at [Address], [City], [State] [Zip] (hereinafter
"Broker/Dealer").
WHEREAS, Broker/Dealer desires to enter in this Agreement with ADI to sell
shares of The Xxxxxxxx Multi-Strategy Trust (the "Company"), a registered
closed-end, non-diversified management investment company. Broker/Dealer will
provide distribution related to, continuing personal services to shareholder
and/or administration of shareholder accounts in the Company. ADI is the
principal underwriter and agent for the Company.
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth herein, the parties agree as follows:
1. Recommendations of Company Shares for Sale to Customers.
(a) Broker/Dealer is hereby appointed as a non-exclusive selling agent of
the Company during the term herein specified for the purpose of
finding suitable investors for Company's shares as described herein.
Subject to the performance by ADI of its obligations to be performed
hereunder and to the completeness and accuracy in all material
respects of all the representations and warranties of the Company
contained herein, Broker/Dealer hereby accepts such agency and agrees
to the terms and conditions set forth herein and in the Company's
confidential private offering memorandum, as it may be amended from
time-to-time (the "Offering Memorandum") to use reasonable efforts
during the term hereof to find suitable investors and to provide
ongoing services to such investors for the duration of their
investments. It is understood that Broker/Dealer has no commitment
with regard to the sale of the Company's shares other than to use
reasonable efforts and shall not prevent Broker/Dealer from acting as
a selling agent or underwriter for the securities of other issuers
that may be offered or sold during the term hereof. Broker/Dealer's
agency relationship with ADI hereunder shall continue until the
termination of this Agreement. Any sales of a Fund's shares made prior
to the date hereof by Broker/Dealer shall be deemed made pursuant to
this Agreement.
(b) In offering and selling Company's shares to Broker/Dealer's customers,
Broker/Dealer shall in no transaction have any authority to act or
hold itself out as agent for ADI or the Company. ADI acknowledges that
customers of Broker/Dealer who purchase Fund shares are the
Broker/Dealer's customers. Broker/Dealer shall be responsible for
opening, approving, and monitoring customer accounts and for the
review and supervision of these accounts, all in accordance with the
rules of the Securities and Exchange Commission ("SEC") and National
Association of Securities Dealers, Inc. ("NASD").
(c) Broker/Dealer agrees to offer and sell the Company's shares to
Broker/Dealer's customers only at net asset value per share, as
described in the Offering Memorandum. Broker/Dealer agrees to deliver,
or cause to be delivered, to each customer, at or prior to the time of
any purchase of shares, a copy of the Offering Memorandum.
(d) All orders are subject to acceptance or rejection by ADI in its sole
discretion. ADI reserves the right, at its discretion and without
notice to the Broker/Dealer, to suspend sales or to withdraw the
offering of the Company's shares, in whole or in part, or to make a
limited offering of the Company's shares. The minimum dollar amounts
for purchase of the Company's for any shareholder shall be the
applicable minimum amount described in the Offering Memorandum and no
order for less or more than, as the case may be, such amount will be
accepted hereunder. Broker/Dealer hereby expressly acknowledges and
agrees that the Company's shares are to be offered and sold only to
investors who are both "accredited investors," as defined in Rule 501
under the Securities Act of 1933, as amended (the "1933 Act") and
"qualified clients," as defined in Rule 205-3 under the Investment
Advisers Act of 1940, as amended, in a transaction exempt from
registration under the 1933 Act pursuant to Section 4(2) thereof and
Rule 506 thereunder (a "Private Placement"). Broker/Dealer hereby
represents and warrants that it is familiar with the requirements of a
Private Placement and hereby covenants that Broker/Dealer will not
take or refrain from taking any action that could reasonably be
expected to jeopardize the Private Placement of the Company's shares.
If ADI or the Company accepts any instruction directly from a
shareholder that is a customer of Broker/Dealer, e.g., a subscription
agreement, change of ownership form, response to a tender offer or
change of address notice, it will promptly deliver a copy of such
information to Broker/Dealer; if ADI or the Company accepts any oral
instruction from such a person, it will promptly notify Broker/Dealer
about such instruction.
(e) Broker/Dealer agrees to recommend the purchase of shares in the
Company only to customers for whom Broker Dealer has a reasonable
basis to believe that the investment is suitable pursuant to NASD Rule
2310.
(f) Broker/Dealer agrees to use the form of subscription agreement
provided with the Offering Memorandum as the means of placing a
customer's order. The application will be reviewed by ADI or the
Company to determine that all information necessary to issue a Fund's
shares has been entered. Broker/Dealer hereby certifies that, to the
best of its knowledge, all of Broker/Dealer customers' taxpayer
identification numbers ("TIN") or social security numbers ("SSN")
furnished to ADI or the Company by Broker/Dealer are correct and that
ADI or the Company will not open an account without Broker/Dealer
providing the Company's transfer agent ("Transfer Agent") with the
customer's TIN or SSN.
(g) Broker/Dealer will comply with all applicable Federal and state laws
and with the rules and regulations of applicable regulatory agencies
thereunder. Broker/Dealer will not offer shares of Company for sale in
any manner or by any means that
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could reasonably be expected to cause the Company's shares to be
required to be registered under the 1933 Act or any state securities
or "blue sky" laws.
(h) Any transaction in shares of a Fund shall be effected and evidenced by
book-entry on the records maintained by the transfer agent. A
confirmation statement evidencing transactions in a Fund's shares will
be transmitted to Broker/Dealer by the transfer agent.
2. Account Options.
(a) At the time of each transaction, Broker/Dealer guarantees the legal
capacity of its customers so transacting in such Fund shares and any
co-owners of such Fund shares.
(b) Unless otherwise instructed by ADI or the Transfer Agent,
Broker/Dealer may instruct the Transfer Agent to register shares
purchased in Broker/Dealer name and account as nominee for
Broker/Dealer's customers, in which event all Offering Memoranda,
proxy statements, periodic reports, and other printed material will be
sent to Broker/Dealer, and all confirmations and other communications
to shareholders will be transmitted to Broker/Dealer. Broker/Dealer
shall be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whom Broker/Dealer holds such shares as
nominee. However, the Transfer Agent or the Company shall be
responsible for the reasonable costs associated with Broker/Dealer
forwarding such printed material, confirmations, and communications
and shall reimburse Broker/Dealer in full for such costs.
Broker/Dealer shall also be responsible for complying with all
reporting and tax withholding requirements with respect to the
customers for whose account Broker/Dealer is holding such shares. With
respect to customers other than such customers, Broker/Dealer shall
provide ADI with all information (including, without limitation,
certification of TINs and back-up withholding instructions) necessary
or appropriate for ADI to comply with any legal and regulatory
reporting requirements.
3. Broker/Dealer Compensation.
(a) Broker/Dealer concession, if any, on Broker/Dealer's sales of shares
of the Company will be offered as described in the Memorandum or in
the applicable schedule of concessions issued by ADI and in effect at
the time of ADI sale to Broker/Dealer. Upon thirty (30) business day's
prior written notice to Broker/Dealer, ADI, or the Company, may change
or discontinue any schedule of concessions, or issue a new schedule.
(b) Broker/Dealer shall furnish to ADI or the Company, on behalf of a
Fund, such information in writing as shall reasonably be requested by
the Company's Board of Trustees ("Company's Board") with respect to
the fees paid to Broker/Dealer pursuant to this Agreement.
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(c) ADI may discontinue paying compensation to Broker/Dealer if, at any
time, (i) Broker/Dealer is not appropriately registered in all
capacities necessary to receive such compensation or (ii)
Broker/Dealer breaches any representation, warranty or covenant
contained in this Agreement and, if such breach can be cured, does not
cure such breach within twenty (20) business days after being notified
by ADI or the Company about such breach. Notwithstanding the
foregoing, Broker/Dealer shall not be entitled to any compensation in
respect of a sale to any investor if ADI determines that another
authorized selling agent of ADI is primarily responsible for or should
otherwise be credited with such sale. In making this determination,
ADI will endeavor to act fairly. Any dispute regarding compensation
that cannot be resolved by the parties hereto shall be conclusively
resolved by arbitration, as set forth in Section 9 hereof.
(d) The provisions regarding Broker/Dealer compensation may be terminated
by the vote of a majority of the Company's Board who are not
interested persons of the Company, or by a vote of a majority of a
Fund's outstanding shares, on sixty (60) days' written notice, without
payment of any penalty. Such provisions will be terminated also by any
act that terminates this Agreement and shall terminate automatically
in the event of the assignment (as that term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of this
Agreement unless agreed to in writing by the parties.
4. Status as Financial Intermediaries.
(a) Broker/Dealer represents and warrants that Broker/Dealer is and will
remain a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"), and agrees to abide by all of its
rules and regulations including its Rules of Conduct. Broker/Dealer
further agrees to comply with all applicable state and federal laws
and rules and regulations of regulatory agencies having jurisdiction.
The termination of Broker/Dealer's membership in the NASD will
immediately and automatically terminate this Agreement. Broker/Dealer
further represents that Broker/Dealer is qualified to act as a
broker/dealer in the states where Broker/Dealer transacts business.
(b) Broker/Dealer represents that Broker/Dealer is qualified to sell
shares in the various jurisdiction where it transacts business.
Broker/Dealer represents that it and all of its personnel involved in
the activities contemplated hereunder have all governmental,
regulatory, and self-regulatory registrations, approvals, memberships,
and licenses required to perform Broker/Dealer's obligations under
this Agreement and to receive compensation, if any, therefore, and
Broker/Dealer will maintain all relevant registrations, approvals,
memberships, and licenses during the term of this Agreement.
(c) Nothing in this Agreement shall cause Broker/Dealer to be ADI's
partner, employee, or agent, or give Broker/Dealer any authority to
act for ADI, the Company, or a Fund. Neither ADI nor the Company shall
be liable for any of Broker/Dealer's acts or obligations under this
Agreement.
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5. Information Relating to the Funds.
(a) No person is authorized to make any representations concerning the
Company's shares except those contained in Offering Memorandum, and in
buying shares from ADI or selling shares to ADI hereunder,
Broker/Dealer shall rely solely on the representations contained in
the Offering Memorandum. Upon Broker/Dealer's request, ADI will, at
its own expense, furnish Broker/Dealer with a reasonable number of
copies of the Company's Offering Memorandum.
(b) Broker/Dealer may not use any sales literature or advertising material
concerning a Fund's shares, other than a Fund's Offering Memorandum or
such printed information that is given to Broker/Dealer by ADI,
without first obtaining ADI's written approval. Broker/Dealer shall
not distribute or make available to the general public any information
regarding the Company.
6. Indemnification. ADI and Broker/Dealer (each an "Indemnifying Party") will
indemnify and hold the other party and its directors/trustees, officers,
employees, and agents harmless from any claim, demand, loss, expense (including
reasonable attorney's fees), or cause of action resulting from the willful
misconduct or negligence, as measured by industry standards, of the Indemnifying
Party, its agents, and employees, in carrying out its obligations under this
Agreement. This provision will survive the termination of this Agreement.
Without limiting the generality of the foregoing, ADI acknowledges and
understands that Broker/Dealer will deliver information to owners of shares of
the Company about the net asset value of such shares, including delivering such
information on customer statements. ADI agrees to indemnify Broker/Dealer for
any loss that Broker/Dealer incurs as a result of delivering incorrect net asset
value information about the Company to investors, provided that Broker/Dealer
delivers such information to investors that was provided by ADI .
7. Duration. This Agreement, will continue in effect for one year from its
effective date, and thereafter will continue automatically for successive annual
periods; provided, however, that such continuance is subject to termination at
any time without penalty if a majority of the Company's Trustees who are not
interested persons (as defined in the 1940 Act), or a majority of the
outstanding shares of the Company, vote to terminate this Agreement. This
Agreement, will continue in effect from year to year after its effective date,
unless terminated as provided herein.
8. Amendment and Termination of Agreement. Either party to this Agreement may
terminate the Agreement without cause by giving the other party at least thirty
(30) days' written notice of its intention to terminate. This Agreement will
automatically terminate in the event of its assignment (as defined in the 1940
Act). ADI may change or amend any provision of this Agreement by giving
Broker/Dealer written notice of the change or amendment.
9. Arbitration. In the event of a material dispute under this Agreement, such
dispute shall be settled by arbitration before arbitrators sitting in Denver,
Colorado, in accordance with the NASD's Code of Arbitration Procedures in effect
at the time of the dispute. The arbitrators shall act by majority decision, and
their award may allocate attorneys' fees and arbitration costs
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between ADI and Broker/Dealer. The arbitrators' award shall be final and binding
between the parties, and such award may be entered as a judgment in any court of
competent jurisdiction.
10. Notices. All notices required or permitted to be given under this Agreement
shall be given in writing and delivered by personal delivery, by postage prepaid
mail, or by facsimile or a similar means of same day delivery (with a confirming
copy by mail). All notices to ADI shall be given or sent to ADI at ADI offices
located at 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attn: General
Counsel. All notices to Broker/Dealer shall be given or sent to Broker/Dealer at
the address specified by Broker/Dealer herein. Each party may change the address
to which notices shall be sent by giving notice to the other party in accordance
with this paragraph.
11. Anti-Money Laundering Program. Broker/Dealer hereby certifies that: (i) it
understands that pursuant to various U.S. regulations, it is required to
establish an anti-money laundering program, which satisfies the requirements of
Title III of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA Patriot
Act"); (ii) Broker/Dealer has developed, implemented, and will maintain such an
anti-money laundering program, including a customer identification program
consistent with the rules under sec. 326 of the USA Patriot Act, and will comply
with all applicable laws and regulations designed to guard against money
laundering activities set out in such program; (iii) Broker/Dealer will
cooperate with ADI and deliver information reasonably requested by the ADI
concerning shareholders that purchased a Fund's shares sold by Broker/Dealer
necessary for ADI or the Company to comply with the USA Patriot Act; and (iv)
Broker/Dealer will notify ADI, in writing, if it is found, by its Compliance
Officer, independent anti-money laundering auditor, or any Federal, state, or
self-regulatory agencies, to be in violation of the USA Patriot Act, any
regulation implementing the USA Patriot Act, or its anti-money laundering
program.
Notwithstanding anything to the contrary, if Broker/Dealer is exempt from
the requirement to develop, implement, and maintain anti-money laundering
policies that comply with USA Patriot Act in which case Broker/Dealer agrees to
cooperate with ADI or the Company and deliver information reasonably requested
by ADI or the Company concerning shareholders that purchased shares sold by
Broker/Dealer necessary for ADI and the Company to comply with either's internal
policies, the USA Patriot Act and relevant rules and regulations.
Broker/Dealer acknowledges that ADI or the Company may reject or refuse
orders for the sale of shares with respect to customers for which Broker/Dealer
serves as nominee if Broker/Dealer has not adopted and does not implement
anti-money laundering policies and procedures as required by the USA Patriot
Act.
12. Regulation S-P. In accordance with Regulation S-P, if non-public personal
information regarding customers/shareholders is disclosed to either party in
connection with this Agreement, the party receiving such information will not
disclose or use that information other than as necessary to carry out the
purposes of this Agreement. Any privacy notice that Broker/Dealer delivers to
customers/shareholders will comply with Title V of the Xxxxx-Xxxxx-Xxxxxx Act
and Regulations S-P, as each may be amended, and will notify customers that
non-public personal information may be provided to financial service providers
such as security broker-dealers or
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investment companies and as permitted by law. This provision will survive the
termination of this Agreement.
13. Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior agreements
between the parties, whether oral or written, relating to the sale of shares or
any other subject covered by this Agreement.
14. 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
the Agreement shall not be affected thereby. Furthermore, in the event of any
inconsistency between the Agreement and the Offering Memorandum, the terms of
the Offering Memorandum shall control.
15. Waiver. Failure of ADI or the Company to terminate this Agreement upon the
occurrence of any event set forth in this Agreement as a cause for termination
shall not constitute a waiver of the right to terminate this Agreement at a
later time on account of such occurrence or any succeeding breach of the same.
16. Heading. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions of this
Agreement.
17. Applicable Law. This Agreement shall be construed in accordance with the
laws of the state of Colorado, without giving effect to principles of conflicts
of law.
18. Effective Date. This Agreement shall become effective as of the date when
it is accepted and dated below by ADI.
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IN WITNESS WHEREOF, the Parties' authorized representatives have executed
this Agreement and represent that they have read and understood the obligations
herein and agree to be bound by the Agreement's terms and conditions.
ACCEPTED AND AGREED:
BROKER/DEALER:
Signature:__________________________
Name:_______________________________
Title:______________________________
Address: <>
<>, <> <>
Fax Number:_____________________________
Date:___________________________________
Primary Contact:________________________
Phone Number:_______________________ Firm's Tax ID Number: __________________
ALPS DISTRIBUTORS, INC.
By:_________________________________
Name:
Title:
Effective Date:
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