EXHIBIT (h)(i)
MOUNT YALE OPPORTUNITY FUND, LLC
SELECTED DEALER AGREEMENT
Ladies and Gentlemen:
We, Alpha Brokerage Partners, LLC ("Alpha Brokerage"), have entered
into a distribution agreement with Mount Yale Opportunity Fund, LLC (the
"Company") pursuant to which we act as distributor and principal underwriter, on
a private basis, of limited liability company interests in the Company (the
"Interests").
1. The Offering. (a) The Interests will generally be offered twelve
times each year in accordance with the terms and conditions set forth in the
Company's Confidential Private Placement Memorandum, as most currently amended
or supplemented (referred to hereinafter as the Company's "Private Placement
Memorandum").
(b) All subscriptions, offers or sales shall be subject to acceptance
or rejection by the Company. Any offer or sale shall be conclusively presumed to
have been accepted by the Company if the Company shall fail to notify you of the
rejection of such offer or sale prior to the computation of the net asset value
of the interests next following receipt by the Company of notice of such offer
and sale.
(c) No Interest of the Company shall be sold for any consideration
other than cash.
(d) The offering price of the Interests shall be the net asset value of
such Interest, computed as provided in the currently effective Private Placement
Memorandum of the Company (the "Net Asset Value") thereof next determined
following receipt of an order by you plus any applicable sales load or charge.
The sales load or charge may be an initial charge of a percentage of the
offering price, as set forth in Company's current Private Placement Memorandum
and specifically approved by the Board of Managers of the Company.
(e) Any applicable sales loads or charges may, at the discretion of the
Company and Alpha Brokerage, be reduced or eliminated as permitted by the
Investment Company Act of 1940, as amended (the "1940 Act") and the rules and
regulations thereunder, as they may be amended from time to time, provided that
such reduction or elimination shall be set forth in the currently effective
Private Placement Memorandum for the Company, and provided that the Company
shall in no event receive for any Interests sold an amount less than the Net
Asset Value thereof.
2. Authorized Dealers. Pursuant to the distribution agreement between
the Company and us, we have agreed to use our best efforts to enter into
arrangements with selected securities dealers to solicit from "accredited
investors" as defined in Regulation D under the Securities Act of 1933 orders to
purchase Interests. You are hereby invited to become one of such securities
dealers (each such securities dealer, an "Authorized Dealer"). This will confirm
our mutual agreement as to the terms and conditions applicable to your
participation as an Authorized Dealer, such agreement to be effective on your
confirmation hereof. You understand (a) that we may, at any time at our option,
also act as an Authorized Dealer, (b) that we are seeking to enter into this
Agreement in counterparts with you and certain other securities dealers, which
also may act as Authorized Dealers, (c) that, except as we may otherwise agree
with you, we may enter into agreements (which may or may not be the same as this
Agreement) with Authorized Dealers, (d) that the Company and we may modify,
suspend, terminate or withdraw entirely the offering of Interests at any time
without giving notice to you pursuant to Section 11 and without incurring any
liability or obligation to you, (e) that we may upon notice change the sales
load or modify,
cancel or change the terms of this Agreement, and (f) we shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us herein. All purchases of Interests from the Company shall be
effected through us acting as principal underwriter on behalf of the Company.
(You understand that we shall have no obligation to sell Interests to you at
such times as we are not acting as distributor and principal underwriter for the
Company.)
3. Role of Authorized Dealers. (a) As an Authorized Dealer, you shall
have no obligation to purchase or to solicit the purchase of Interests. As, when
and if you receive a customer order for the purchase of Interests and you
determine to accept such order, you shall comply with the procedures for the
purchase of Interests set forth in the Company's Private Placement Memorandum.
The procedure relating to the handling of orders shall be subject to such
further instructions as we shall forward to you in writing from time to time.
(b) You shall not use any form of general solicitation or general
advertising, as such terms are used in Rule 502(c) under the Securities Act of
1933 (including, but not limited to, the use of any notice, article, circular,
advertisement, letter or similar written or graphic communication, or any
seminar or meeting), in connection with any solicitation under this Agreement or
the offer or sale of interests in the Company, and you, after making reasonable
inquiry, will upon reasonable grounds believe that each person solicited under
this Agreement is an "accredited investor" as defined in Rule 501 under the
Securities Act of 1933.
(c) You agree to offer Interests to accredited investors subject to the
minimum investment amount set forth in the Company's Private Placement
Memorandum, subject to any waivers or reductions of sales loads described in the
Private Placement Memorandum (as amended or supplemented from time to time). Any
amendment or supplement to the Private Placement Memorandum which affects the
sales load waivers or discounts shall not affect sales load, discounts or
waivers with respect to sales on which orders have been accepted by us prior to
the date of such amendment. Your placement of an order for Interests after the
date of any such amendment shall conclusively evidence your agreement to be
bound thereby.
(c) You agree to purchase Interests from us only to cover purchase
orders already received from your customers, or for your own bona fide
investment. You will not withhold placing with us orders received from your
customers so as to profit yourself as a result of such withholding. All orders
for Interests are subject to acceptance or rejection by us or the applicable
Company in the sole discretion of either.
(d) In purchasing Interests through us, you shall rely solely on the
representations contained in the Company's Private Placement Memorandum relating
to the Interests. You will not furnish to any person any information relating to
the Interests, the Company or us that is inconsistent with information contained
in the Private Placement Memorandum or any printed information issued by the
Company or us as information supplemental to such Private Placement Memorandum.
(e) In all sales of Interests, you shall act as dealer for your own
account, whether as agent or principal. Nothing herein shall be deemed to
constitute you or any other Authorized Dealer as agent for the Company, us, or
any other Authorized Dealer. You agree not to act as our agent and not to claim
to act as our agent or as agent of any of the foregoing. You agree to buy
Interests only through us and not from any other sources.
4. Compensation. You shall be entitled to receive only such portion of
sales load as we agree from time to time, concessions, finder's fees and other
compensation (if any) as are payable to
Authorized Dealers, generally, or to you or to certain specified Authorized
Dealers, specifically, as described and set forth in the Company's Private
Placement Memorandum.
5. Orders and Payment for Interests. Payment for the Interests ordered
from us shall be made in Federal Funds and must be received by the Company's
agent within three business days of a receipt and acceptance by us of an order.
If payment in Federal Funds is not received within three business days after the
execution of the order, we reserve the right, without any notice, to cancel the
sale and to hold you responsible for any loss, including loss of profits,
suffered by us or by the Company resulting from such failure.
6. Blue Sky and Other Qualifications. The Company intends to register
or qualify in certain states where registration or qualification is required. We
will inform you as to the states or other jurisdictions in which we believe the
Interests have been qualified for sale under, or exempt from the requirements
of, the respective securities laws of such states. You agree that you will offer
Interests to your customers only in those states where such Interests have been
registered, qualified, or an exemption is available. We assume no responsibility
or obligation as to your right to sell Interests in any jurisdiction.
7. Representations, Warranties and Undertakings. You represent and
warrant to and undertake that:
(a) You are familiar with all applicable federal and state
securities laws, rules and regulations and agree that you will comply
therewith. You agree to deliver thereafter to any purchaser whose
Interests you are holding as record holder copies of any materials
relating to the Interests. Additional copies of the Company's Private
Placement Memorandum or additional materials will be supplied to you as
you reasonably request.
(b) You are a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") or, if you are not
such a member, you are a foreign bank, dealer or institution not
eligible for membership in the NASD which agrees to make no sales
within the United States, its territories or its possessions or to
persons who are citizens thereof or residents therein, and in making
other sales to comply, as though you were a member of NASD, with the
provisions of Sections 8, 24 and 36 of Article III of the Rules of Fair
Practice of the NASD and with Section 25 thereof as that Section
applies to a non-NASD member broker or dealer in a foreign country.
(c) You undertake to comply with respect to your offering of
Interests pursuant to this Agreement with all applicable provisions of
Regulation D under the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder and with the applicable rules of the NASD.
8. Termination. Either party to this Agreement may cancel this
Agreement by written notice to the other party. Such cancellation shall be
effective upon receipt of such notice.
9. Compliance with Law. The parties hereby agree to comply with all
applicable anti-money laundering laws, regulations, rules and government
guidance, including the reporting, record keeping and compliance requirements of
the Bank Secrecy Act ("BSA"), as amended by The International Money Laundering
Abatement and Financial Anti-Terrorism Act of 2002, Title III of the USA PATRIOT
Act ("the Act"), its implementing regulations, and related SEC and SRO rules.
These requirements include requirements to identify and report currency
transactions and suspicious activity, to verify customer identity, to conduct
customer due diligence, and to implement anti-money laundering
compliance programs. As required by the Act, each party hereby certifies that it
has a comprehensive anti-money laundering compliance program that includes
policies, procedures and internal controls for complying with the BSA; policies,
procedures and internal controls for identifying, evaluating and reporting
suspicious activity; a designated compliance officer or officers; training for
appropriate employees; and an independent audit function.
Further, the parties agree to comply with the economic sanctions
programs administered by the U.S. Treasury Department's Office of Foreign Assets
Control ("OFAC"). The parties certify that they have a OFAC compliance program
in place which includes procedures for checking customer names and the names of
persons with signature authority over accounts against the OFAC lists of
sanctioned governments and specially-designated nationals, terrorists and
traffickers; the screening of wire transfers and other payments against the OFAC
lists; a designated compliance officer; an internal communication network;
training of appropriate personnel; and an independent audit function.
The parties agree to promptly notify the other whenever questionable
activity or potential indications of suspicious activity or OFAC matches are
detected. The parties further agree to investigate any potentially suspicious
activity and to take appropriate action, including the blocking of accounts, the
filing of Suspicious Activity Reports and the reporting of matches to OFAC, in
connection with the Interests.
Each of the parties to this Agreement affirms that it has procedures in
place reasonably designed to protect the privacy of non-public customer
information and it will maintain such information that it may acquire pursuant
to this Agreement in confidence and in accordance with all applicable privacy
laws.
10. Representation to Survive. The agreements, representations,
warranties and other statements set forth in or made pursuant to this Agreement
will remain in full force and effect, to the extent permitted by applicable law,
regardless of any investigation made by or on behalf of us or any Authorized
Dealer. The provisions of Section 7 and 10 of this Agreement shall survive the
offer and sales of the Interests, to the extent permitted by applicable law, and
the termination or cancellation of this Agreement.
11. Indemnification. (a) We agree to indemnify, defend and hold you,
your several officers and directors, and any person who controls you within the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands liabilities and expenses
(including reasonable costs of investigating and defending such claims, demands
or liabilities and any reasonable counsel fees incurred in connection therewith)
which you, your officers or directors, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or otherwise,
arising out of or based upon (i) any breach of any representation, warranty or
covenant made by us herein, (ii) any failure by us to perform our obligations as
set forth herein, or (iii) any untrue statement, or alleged untrue statement, of
a material fact contained in any Registration Statement or any Private Placement
Memorandum or arising out of or based upon any omission, or alleged omission, to
state a material fact required to be stated in either any Registration Statement
or any Private Placement Memorandum, or necessary to make the statements in any
thereof not misleading; provided, however, that our agreement to indemnify you,
your officers and directors, and any such controlling person shall not be deemed
to cover any claims, demands, liabilities or expenses arising out of any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Registration Statement or Private Placement Memorandum in reliance upon and
in conformity with information furnished to us or the applicable Company by you
for use in the preparation thereof.
(b) You agree to indemnify, defend and hold us and our several officers
and managers, and the Company and its several officers and managers, and any
person who controls you and/or the
Company within the meaning of Section 15 of the Securities Act of 1933, as
amended, free and harmless from and against any and all claims, demands,
liabilities and expenses (including reasonable costs of investigating and
defending such claims, demands or liabilities and any reasonable counsel fees
incurred in connection therewith) which we and our several officers and
directors, or the Company and its officers and directors or trustees, or any
such controlling person, may incur under the Securities Act of 1933, as amended,
or under common law or otherwise, arising out of or based upon (i) any breach of
any representation, warranty or covenant made by you herein, or (ii) any failure
by you to perform your obligations as set forth herein, or (iii) any untrue, or
alleged untrue, statement of a material fact contained in the information
furnished by you to us or the Company for use in the Company's Private Placement
Memorandum, or used in the answers to any of the items of the Private Placement
Memorandum or in the corresponding statements made in the Private Placement
Memorandum, or arising out of or based upon any omission, or alleged omission,
to state a material fact in connection with such information furnished by you to
us or the Company and required to be stated in such answers or necessary to make
such information not misleading.
(c) Each party's agreement to indemnify the other (and its respective
officers, managers and controlling persons, as aforesaid) is expressly
conditioned upon the indemnifying party being notified of any action brought
against any person entitled to indemnification hereunder, such notification to
be given by letter or by telex, telegram, fax or similar means of same day
delivery received by the indemnifying party at the address to which notices are
to be sent hereunder within seven (7) days after the summons or other first
legal process shall have been served. The indemnifying party shall have the
right to control the defense of such action, with counsel of its own choosing
(provided such counsel is reasonably satisfactory to the person seeking
indemnification). The failure so to notify the indemnifying party as specified
herein shall not relieve the indemnifying party from any liability which such
party may have to the person claiming indemnification, otherwise than on account
of the indemnifying party's agreement contained in this Section 10. This Section
10 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any person entitled to indemnification
hereunder and shall survive the delivery of any Interests and termination of
this Agreement. The agreements to indemnify contained herein shall inure
exclusively to the benefit of the persons entitled to indemnification pursuant
to this Agreement and their respective estates, successors and assigns.
12. Notices. Notices hereunder shall be deemed to have been duly given
if delivered by hand or facsimile (a) if to you, at your address or facsimile
number set forth below and (b) if to us, to Alpha Brokerage Partners, LLC, 0000
Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000, or, in each case, such
other address as may be notified to the other party.
13. Amendments. We may modify this Agreement at any time by written
notice to you. The first order placed by you subsequent to the giving of such
notice shall be deemed acceptance by you of the modification described in such
notice.
14. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
15. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the then existing NASD Code of Arbitration Procedure. Any
arbitration shall be conducted in Minneapolis, Minnesota, and each arbitrator
shall be from the securities industry. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
Please confirm your agreement by signing and returning to us the two
enclosed duplicate copies of this Agreement. Upon our acceptance hereof, the
Agreement shall constitute a valid and binding contract between us. After our
acceptance, we will deliver to you one fully executed copy of this Agreement.
Confirmed: [Date]
[TYPE NAME OF DEALER] Alpha Brokerage Partners, LLC
By: By:
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(Authorized Signature) Xxxx X. Xxxxx
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Firm Taxpayer Identification Number
M1:1125153.04
