1
PLACEMENT AGENT AGREEMENT
AGREEMENT made as of the 21st day of December, 1999, between MASTER
FOCUS TWENTY TRUST, a Delaware business trust (the "Trust") and PRINCETON FUNDS
DISTRIBUTOR, INC., a Delaware corporation (the "Placement Agent").
W I T N E S S E T H :
WHEREAS, the Trust has filed a registration statement (the
"Registration Statement") pursuant to Section 8(b) of the Investment Company
Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Trustees (the "Trustees") are authorized to offer
beneficial interests in the Trust (the "Shares") to Xxxxxxx Xxxxx Focus Twenty
Fund, Inc. (the "Fund") and a limited number of institutional investors as
described below; and
WHEREAS, the Trust and the Placement Agent wish to enter into an
agreement with each other with respect to the distribution of Shares (the
"Agreement").
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Placement Agent; Private Offering.
(a) The Trust hereby appoints the Placement Agent as placement agent
in connection with the distribution of the Shares.
(b) The Placement Agent understands that: (i) The Shares are not being
registered under the Securities Act of 1933, as amended (the "Securities Act");
(ii) such Shares are to be issued solely in private placement transactions that
do not involve any "public offering" within the meaning of Section 4(2) of the
Securities Act; (iii) investments in the Trust may be made only by the Fund and
a limited number of institutional investors, including investment companies,
common or commingled trust funds, group trusts and certain other "accredited
investors" within the meaning of Regulation D under the Securities Act; (iv)
the Registration Statement is not intended to constitute an offer to sell, or
the solicitation of an offer to buy, the Shares.
(c) In carrying out its duties hereunder, the Placement Agent agrees
that it will act in a manner consistent with the foregoing and, unless
otherwise instructed by the Trust in writing, will not take any actions that
would cause the Trust to make a "public offering" within the meaning of Section
4(2) of the Securities Act.
Section 2. Exclusive Nature of Duties. The Placement Agent shall be
the exclusive representative of the Trust to act as placement agent in respect
of the distribution of the Shares of the Trust, except that:
2
(a) The Trust may, upon written notice to the Placement Agent, from
time to time designate other placement agents with respect to areas other than
the United States as to which the Placement Agent may have expressly waived in
writing its right to act as such. If such designation is deemed exclusive, the
right of the Placement Agent under this Agreement in respect of such areas so
designated shall terminate, but this Agreement shall remain otherwise in full
effect until terminated in accordance with the other provisions hereof.
(b) The exclusive right granted to the Placement Agent hereunder shall
not apply to Shares issued in connection with the merger or consolidation of
any other investment company or personal holding company with the Trust or the
acquisition by purchase or otherwise of all (or substantially all) the assets
or the outstanding shares of any such company by the Trust.
(c) Such exclusive right also shall not apply to Shares pursuant to
reinvestment of dividends or capital gains distributions.
(d) Such exclusive right also shall not apply to Shares pursuant to
any conversion, exchange or reinstatement privilege afforded redeeming
shareholders or to any other Shares as shall be agreed between the Trust and
the Placement Agent from time to time.
Section 3. Duties of the Trust.
(a) The Trust shall furnish to the Placement Agent copies of all
information, financial statements and other papers that the Placement Agent may
reasonably request for use in connection with its duties hereunder, and this
shall include, upon request by the Placement Agent, one certified copy of all
financial statements prepared for the Trust by independent public accountants.
(b) Consistent with Section 1 hereof, the Trust shall use its best
efforts to qualify and maintain the qualification of the Shares for sale under
the securities laws of such jurisdictions as the Placement Agent and the Trust
may approve. Any such qualification may be withheld, terminated or withdrawn by
the Trust at any time in its discretion. The expense of qualification and
maintenance of qualification shall be borne by the Trust. The Placement Agent
shall furnish such information and other material relating to its affairs and
activities as may be required by the Trust in connection with such
qualification.
(c) The Trust will furnish to the Placement Agent, in reasonable
quantities upon request by the Placement Agent, copies of annual and interim
reports of the Trust.
Section 4. Duties of the Placement Agent.
(a) The Placement Agent shall devote reasonable time and effort to its
duties hereunder. The services of the Placement Agent to the Trust hereunder
are not to be deemed exclusive and nothing herein contained shall prevent the
Placement Agent from entering into like arrangements with other investment
companies so long as the performance of its obligations hereunder is not
impaired thereby.
2
3
(b) In performing its duties hereunder, the Placement Agent shall use
its best efforts in all respects duly to conform with the requirements of all
applicable laws relating to the sale of securities. Neither the Placement Agent
nor any other person is authorized by the Trust to give any information or to
make any representations, other than those contained in the Trust's
registration statement or any sales literature specifically approved by the
Trust.
Section 5. Payment of Expenses.
(a) The Trust shall pay or cause to be paid all costs and expenses
incurred in connection with the operation of the Trust, including fees and
disbursements of its counsel and auditors, in connection with the preparation
and filing of any required registration statements under the Investment Company
Act, and all amendments and supplements thereto, and preparing and mailing
annual and interim reports and proxy materials to shareholders (including but
not limited to the expense of setting in type any such registration statements,
or interim reports or proxy materials).
(b) The Trust shall bear any cost and expenses of qualification of the
Shares for sale pursuant to this Agreement and, if necessary or advisable in
connection therewith, of qualifying the Trust as a broker or dealer in such
states of the United States or other jurisdictions as shall be selected by the
Trust and the Placement Agent pursuant to Section 3 hereof and the cost and
expenses payable to each such state for continuing qualification therein until
the Trust decides to discontinue such qualification pursuant to Section 3
hereof.
Section 6. Indemnification.
(a) The Trust shall indemnify and hold harmless the Placement Agent
and each person, if any, who controls the Placement Agent against any loss,
liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or
expense and reasonable counsel fees incurred in connection therewith), as
incurred, arising by reason of any person acquiring any Shares, which may be
based upon the Securities Act, or on any other statute or at common law, on the
ground that any registration statement or other offering materials, as from
time to time amended and supplemented, or any annual or interim report to the
shareholders of the Trust, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Trust in connection therewith by or on behalf of the Placement
Agent; provided, however, that in no case (i) is the indemnity of the Trust in
favor of the Placement Agent and any such controlling persons to be deemed to
protect such Placement Agent or any such controlling persons thereof against
any liability to the Trust or its shareholders to which the Placement Agent or
any such controlling persons would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of their duties
or by reason of the reckless disregard of their obligations and duties under
this Agreement; or (ii) is the Trust to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Placement Agent or any such controlling persons, unless the Placement Agent or
such controlling persons, as the case may be,
3
4
shall have notified the Trust in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Placement Agent or such controlling
persons (or after the Placement Agent or such controlling persons shall have
received notice of such service on any designated agent), but failure to notify
the Trust of any such claim shall not relieve it from any liability that it may
have to the person against whom such action is brought otherwise than on
account of its indemnity agreement contained in this paragraph. The Trust will
be entitled to participate at its own expense in the defense or, if it so
elects, to assume the defense of any suit brought to enforce any such
liability, but if the Trust elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the Placement Agent or
such controlling person or persons, defendant or defendants in the suit. In the
event the Trust elects to assume the defense of any such suit and retain such
counsel, the Placement Agent or such controlling person or persons, defendant
or defendants in the suit shall bear the fees and expenses, as incurred, of any
additional counsel retained by them, but in case the Trust does not elect to
assume the defense of any such suit, the Trust will reimburse the Placement
Agent or such controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses, as incurred, of any counsel
retained by them. The Trust shall promptly notify the Placement Agent of the
commencement of any litigation or proceedings against it or any of the Trust's
officers or Trustees in connection with the issuance or sale of any of the
Shares.
(b) The Placement Agent shall indemnify and hold harmless the Trust
and each of the Trustees of the Trust and officers and each person, if any, who
controls the Trust against any loss, liability, claim, damage or expense, as
incurred, described in the foregoing indemnity contained in subsection (a) of
this Section, but only with respect to statements or omissions made in reliance
upon, and in conformity with, information furnished to the Trust in writing by
or on behalf of the Placement Agent for use in connection with its registration
statement or related prospectus and statement of additional information, as
from time to time amended, or the annual or interim reports to shareholders. In
case any action shall be brought against the Trust or any person so
indemnified, in respect of which indemnity may be sought against the Placement
Agent, the Placement Agent shall have the rights and duties given to the Trust,
and the Trust and each person so indemnified shall have the rights and duties
given to the Placement Agent by the provisions of subsection (a) of this
Section 6.
Section 7. Duration and Termination of this Agreement. This Agreement
shall become effective as of the date first above written and shall remain in
force for two years thereafter and thereafter, but only for so long as such
continuance is specifically approved at least annually by (i) the Trustees or
by the vote of a majority of the outstanding voting securities of the Trust and
(ii) by the vote of a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees or by vote of a majority of the outstanding voting
securities of the Fund, or by the
4
5
Placement Agent, on sixty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however to such
exemptions as may be granted by the Securities and Exchange Commission under
the Investment Company Act.
Section 8. Amendments of this Agreement. This Agreement may be amended
by the parties only if such amendment is specifically approved by (i) the
Trustees or by the vote of a majority of outstanding voting securities of the
Trust and (ii) by the vote of a majority of those Trustees who are not parties
to this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
Section 9. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New York
as at the time in effect and the applicable provisions of the Investment
Company Act. To the extent that the applicable law of the State of New York, or
any of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
5
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MASTER FOCUS TWENTY TRUST
By:
------------------------------
Name:
Title:
PRINCETON FUNDS DISTRIBUTOR, INC.
By:
------------------------------
Name:
Title:
6
