Sequoia Fund, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
January 1, 2004
Xxxxx Xxxxxxx, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Subj: Distribution Agreement
This is to confirm that, in consideration of the agreements on your
part herein contained and on the terms and conditions set forth herein, we have
agreed that you shall be, for the period of this agreement, the exclusive
distributor, as our agent, for the unsold portion of such number of shares of
our Common Stock (par value $.10 per share) as may from time to time be
effectively registered under the Securities Act of 1933, as amended (hereinafter
referred to as the "Act").
1. We hereby agree to offer through you as our agent, and to solicit
through you as our agent, offers to subscribe to, the unsold balance of shares
of our Common Stock as shall then be effectively registered under the Act, and
you are appointed our agent for such purpose.
All subscriptions for our shares obtained by you shall be directed to
us for acceptance and shall not be binding on us until accepted by us. You shall
have no authority to make binding subscriptions on our behalf. We reserve the
right to sell our shares directly to investors, whether or not such sales shall
have been solicited by us.
The right given to you under this agreement shall not apply to shares
issued in connection with
(a) the merger or consolidation of any other investment company with
us,
(b) our acquisition by purchase or otherwise of all or substantially
all of the assets or stock of any other investment company, or
(c) the reinvestment in our shares by our stockholders of dividends
or other distributions or any other offering of shares to our
stockholders.
2. You will use your best efforts to obtain subscriptions to our
shares upon the terms and conditions contained herein and in the then current
Prospectus, including the offering price. You will send to us promptly all
subscriptions placed with you.
We shall advise you of the net asset value per share as of the close
of business of the New York Stock Exchange on the last day of each month and at
such other times as it shall have been determined by us.
We shall furnish you from time to time, for use in connection with the
offering of our shares, such other information with respect to us and our shares
as you may reasonably request.
We shall supply you with such copies of our current Prospectus in
effect from time to time as you may request.
You are not authorized to give any information or to make any
representations, other than those contained in the Registration Statement or
Prospectus, as then in effect, filed under the Act covering our shares or which
we may authorize in writing.
You may use employees and agents at your cost and expense to assist
you in carrying out your obligations hereunder but no such employee or agent
shall be deemed to be our agent or have any rights under this agreement.
3. We reserve the right to suspend the offering of our shares at any
time, in the absolute discretion of our Board of Directors, and upon notice of
such suspension you shall cease to offer our shares hereunder.
4. Both of us will cooperate with each other in taking such action as
may be necessary to qualify our shares for sale under the securities laws of
such states as we may designate, provided that, unless required by law,
regulation or other authority, you shall not be required to register as a
broker-dealer or file a consent to service of process in any such state.
Pursuant to our Investment Advisory Contract, Xxxxx, Xxxxxxx & Co., Inc., our
investment adviser, shall pay all expenses of the qualification of our shares
and our qualification under such laws and all expenses of registration of our
shares under the Act. You shall pay all expenses relating to your broker-dealer
qualification.
5. We represent to you that our Registration Statement and Prospectus
(as in effect from time to time) under the Act have been or will be, as the case
may be, carefully prepared in conformity with the requirements of the Act and
the rules and regulations of the Securities and Exchange Commission (the "SEC")
thereunder.
We represent and warrant to you that our Registration Statement and
Prospectus contain or will contain all statements required to be stated therein
in accordance with the Act and the rules and regulations of the SEC, and that
all statements of fact contained or to be contained therein are or will be true
and correct at the time indicated or the effective date as the case may be; that
neither our Registration Statement nor our Prospectus, when it shall become
effective or be authorized for use, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of our
shares.
We will from time to time file such amendment or amendments to our
Registration Statement and Prospectus as, in the light of future developments,
shall, in the opinion of our counsel, be necessary in order to have our
Registration Statement and Prospectus at all times contain all material facts
required to be stated therein or necessary to make any statements therein not
misleading to a purchaser of our shares, but, if we shall not file such
amendment or amendments within fifteen days after receipt by us of a written
request from you to do so, you may, at your option, terminate this agreement
immediately.
We shall not file any amendment to our Registration Statement or
Prospectus without giving you reasonable notice thereof in advance; provided,
however, that nothing in this agreement contained shall in any way limit our
right to file at any time such amendments to our Registration Statement and/or
Prospectus, of whatever character, as we may deem advisable, such right being in
all respects absolute and unconditional.
We represent and warrant to you that any amendment to our Registration
Statement or Prospectus hereafter filed by us will, when it becomes effective,
contain all statements required to be stated therein in accordance with the Act
and the rules and regulations of the SEC, that all statements of fact contained
therein will, when the same shall become effective, be true and correct and that
no such amendment, when it becomes effective, will include an untrue statement
of a material fact or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading to a
purchaser of our shares.
6. We agree to indemnify, defend and hold you, and any person who
controls you within the meaning of Section 15 of the Act, free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which you or any such controlling
person may incur, under the Act, or under common law or otherwise, arising out
of or based upon any alleged untrue statement of a material fact contained in
our Registration Statement or Prospectus in effect from time to time under the
Act or arising out of or based upon any alleged omission to state a material
fact required to be stated in either thereof or necessary to make the statements
in either thereof not misleading; provided, however, that in no event shall
anything herein contained be so construed as to protect you against any
liability to us or our security holders to which you would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence, in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties under this agreement.
Our agreement to indemnify you and any such controlling person as
aforesaid is expressly conditioned upon our being notified of any action brought
against you or any such controlling person, such notification to be given by
letter or by telegram addressed to us at our principal office in New York, N.Y.,
and sent to us by the person against whom such action is brought, within ten
days after the summons or other first legal process shall have been served. The
failure so to notify us of any such action shall not relieve us from any
liability which we may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission otherwise than on
account of our indemnity agreement contained in this paragraph 6.
We will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by us and approved by you.
In the event we do elect to assume the defense of any such suit and retain
counsel of good standing approved by you, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them; but in case we do not elect to assume the defense of any such suit, or
in case you do not approve of counsel chosen by us, we will reimburse you or the
controlling person or persons named as defendant or defendants in such suit, for
the [reasonable] fees and expenses of any counsel retained by you or them.
Our indemnification agreement contained in this paragraph numbered 6
and our representations and warranties in this agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of you or any controlling person and shall survive the sale of any of our
shares made pursuant to subscriptions obtained by you. This agreement of
indemnity will inure exclusively to your benefit, to the benefit of your
successors and assigns, and to the benefit of any controlling persons and their
successors and assigns.
We agree promptly to notify you of the commencement of any litigation
or proceedings against us in connection with the issue and sale of any of our
common stock.
7. You agree to indemnify, defend and hold us, our several officers
and directors, and any person who controls us within the meaning of Section 15
of the Act, free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which we, our officers or directors, or any such controlling person
may incur under the Act or under common law or otherwise, but only to the extent
that such liability or expense incurred by us, our officers or directors or such
controlling person resulting from such claims or demands shall arise out of or
be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by you to us for use in our Registration
Statement or Prospectus in effect from time to time under the Act, or shall
arise out of or be based upon any alleged omission to state a material fact in
connection with such information required to be stated in the Registration
Statement or Prospectus or necessary to make such information not misleading.
Your agreement to indemnify us, our officers and directors, and any
such controlling person as aforesaid is expressly conditioned upon your being
notified of any action brought against us, our officers or directors or any such
controlling person, such notification to be given by letter or telegram
addressed to you at your principal office in New York, New York, and sent to you
by the person against whom such action is brought, within ten days after the
summons or other first legal process shall have be served.
You shall have a right to control the defense of such action, with
counsel of your own choosing, satisfactory to us, if such action is based solely
upon such alleged misstatement or omission on your part, and in any other event
you or such controlling person shall each have the right to participate in the
defense or preparation of the defense of any such action.
The failure so to notify you of any such action shall not relieve you
from any liability which you may have to us, our officers or directors, or to
such controlling person by reason of any such untrue statement of omission on
your part otherwise than on account of your indemnity agreement contained in
this paragraph 7.
8. We agree to advise you immediately:
(a) of any request by the SEC for amendments to our Registration
Statement or Prospectus or for additional information.
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of our Registration Statement
or Prospectus or the initiation of any proceedings for that
purpose,
(c) of the happening of any material event which makes untrue
any statement made in our Registration Statement or
Prospectus or which requires the making of a change in
either thereof in order to make the statements therein not
misleading, and
(d) of all action of the SEC with respect to any amendments to
our Registration Statement or Prospectus which may from time
to time be filed with the SEC under the Act.
9. This agreement shall become effective on January 1, 2004, and shall
remain in effect until December 31, 2004, and thereafter automatically for
successive twelve-month periods (computed from each January 1), provided that
such continuance is specifically approved at least annually by our Board of
Directors, including a majority of our directors 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, or by vote of a majority of
our outstanding voting securities.
This agreement may be terminated at any time, without the payment of
any penalty, by vote of a majority of outstanding voting securities, or by a
vote of a majority of our entire Board of Directors, on sixty days' written
notice to you, or by you on sixty days' written notice to us.
10. This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge. The terms "transfer, "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and any
interpretation thereof contained in rules or regulations promulgated by the SEC
thereunder.
11. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees who may also be a
director, officer or employee of ours, or persons otherwise affiliated with us
(within the meaning of the Investment Company Act of 1940), to engage in any
other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, firm, individual or
association.
If you accept the terms of this Distribution Agreement, please sign
and return the enclosed copy.
Very truly yours,
SEQUOIA FUND, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx
Chairman
ACCEPTED:
January 1, 2004
XXXXX XXXXXXX, LLC
By /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxx
President
69900.0020 #481692
