EXHIBIT 99.2h(i)
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made as of this __ day of [____], 2003, between The Topiary
Benefit Plan Investor Fund LLC, a Delaware limited liability company (the
"Fund"), and XXXXXXX DISTRIBUTORS, INC., a Delaware corporation ("SDI").
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints SDI to act as general distributor of limited
liability interests (hereinafter called "interests") of the Fund in
jurisdictions wherein interests of the Fund may legally be offered for sale;
provided, however, that the Fund in its absolute discretion may: (a) issue or
sell interests directly to holders of interests of the Fund upon such terms
and conditions and for such consideration, if any, as it may determine,
whether in connection with the distribution of subscription or purchase
rights, the payment or reinvestment of distributions, or otherwise; (b) issue
interests in connection with the merger or consolidation of any other
investment company with the Fund or the Fund's acquisition, by purchase or
otherwise, of all or substantially all of the assets of any other investment
company or all or substantially all of the outstanding shares of any such
company; and (c) issue interests in connection with the reinvestment of
distributions made by the Fund, if any. SDI shall appoint various financial
service firms ("Firms") to provide distribution services to investors. The
Firms shall provide such office space and equipment, telephone facilities,
personnel, literature distribution, advertising and promotion as is necessary
or beneficial for providing information and distribution services to existing
and potential clients of the Firms. SDI may also provide some of the above
services for the Fund.
2. SDI accepts such appointment as principal underwriter and agrees to
render such services and to assume the obligations herein set forth for the
compensation herein provided. SDI shall for all purposes herein provided be
deemed to be an independent contractor and, unless expressly provided herein
or otherwise authorized, shall have no authority to act for or represent the
Fund in any way. SDI, by separate agreement with the Fund, may also serve the
Fund in other capacities. The services of SDI to the Fund under this Agreement
are not to be deemed exclusive, and SDI shall be free to render similar or
other services to others so long as its services hereunder are not impaired
thereby. SDI represents that it is a registered securities dealer and a member
in good standing of the National Association of Securities Dealers, Inc (the
"NASD").
3. In carrying out its duties and responsibilities hereunder, SDI may,
pursuant to separate written contracts, appoint various Firms to provide
advertising, promotion, and other distribution services contemplated hereunder
directly to or for the benefit of existing and potential shareholders who may
be clients of such Firms. Such Firms shall at all times be deemed to be
independent contractors retained by SDI and not the Fund.
4. SDI shall use its best efforts to sell interets of the Fund as may be
offered from time to time in accordance with the Fund: Form N-2 (the
"Registration Statement") on file with the Securities and Exchange Commission
(the "SEC") from time to time, at prices determined as
hereinafter provided and on terms hereinafter set forth, all subject to
applicable federal and state laws and regulations and to the Fund's
Registration Statement and the Fund's organizational documents; provided,
however, that SDI may, in its discretion, refuse to accept orders for
interests from any particular applicant. Without limiting the foregoing, SDI
agrees to: (i) sell interests only to an investor who is an "Eligible
Investor" as that term is defined in the Registration Statement; (ii) obtain
and comply with any investor certification requirements set forth in the
Fund's Registration Statement; and (iii) impose the requirements set forth in
(i) and (ii) of this paragraph as a condition of the sales activity of any
Firm or other person with whom SDI enters into a selling group arrangement
with respect to the interests.
5. SDI shall sell interests of the Fund to or through qualified Firms in
such manner, not inconsistent with the provisions hereof and the Fund's
Registration Statement, as SDI may determine from time to time, provided that
no Firm or other person shall be appointed or authorized to act as agent of
the Fund without prior consent of the Fund. In addition to sales made by it as
agent of the Fund, SDI may, in its discretion, also sell interests of the Fund
as principal to persons with whom it does not have selling group agreements.
6. Interests of any class of any series of the Fund offered for sale or
sold by SDI shall be so offered or sold at a price per share determined in
accordance with the Registration Statement. Any excess of the sales price over
the net asset value of the interests of the Fund sold by SDI as agent shall be
retained by SDI as a commission for its services hereunder. SDI may compensate
Firms for sales of interests at the commission levels provided in the
Registration Statement from time to time. SDI may pay other commissions, fees
or concessions to Firms, and may pay them to others in its discretion, in such
amounts as SDI shall determine from time to time consistent with applicable
regulations. SDI shall be entitled to receive and retain any applicable early
withdrawal charge as described in the Registration Statement.
7. SDI will require each Firm to conform to the provisions hereof and the
Registration Statement with respect to the public offering price or net asset
value, as applicable, of the Fund's interests, and neither SDI nor any such
Firms shall withhold the placing of purchase orders so as to make a profit
thereby.
8. The Fund will use its best efforts to keep effectively registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), for sale as herein contemplated such interests as SDI shall reasonably
request and as the SEC shall permit to be so registered. Notwithstanding any
other provision hereof, the Fund may terminate, suspend, or withdraw the
offering of interests whenever, in its sole discretion, it deems such action
to be desirable.
9. The Fund will execute any and all documents and furnish any and all
information that may be reasonably necessary in connection with the
qualification of its interests for sale (including the qualification of the
Fund as a dealer where necessary or advisable) in such states as SDI may
reasonably request (it being understood that the Fund shall not be required
without its consent to comply with any requirement which in its opinion is
unduly burdensome). The Fund will furnish to SDI from time to time such
information with respect to the Fund and its interests as SDI may reasonably
request for use in connection with the sale of interests of the Fund.
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10. SDI shall issue and deliver or shall arrange for various Firms to
issue and deliver on behalf of the Fund such confirmations of sales made by it
pursuant to this Agreement as may be required under any applicable law. At or
prior to the time of issuance of interests, SDI will pay or cause to be paid
to the Fund the amount due the Fund for the sale of such interests. Units
shall be registered on the transfer books of the Fund in such names and
denominations as SDI may specify.
11. SDI shall order interests of the Fund from the Fund only to the
extent that it shall have received purchase orders therefor. SDI will not
make, or authorize Firms or others to make (a) any short sales of interests of
the Fund; or (b) any sales of such interests to any member of the Fund's board
of directors ("Board") or officer of the Fund or to any officer or Board
member of SDI or of any corporation or association furnishing investment
advisory, managerial or supervisory services to the Fund, or to any
corporation or association, unless such sales are made in accordance with the
Registration Statement relating to the sale of such interests. SDI, on behalf
of and for the account of the Fund, may repurchase the interests of the Fund
at such prices and upon such terms and conditions as shall be specified in the
Fund's Registration Statement. In selling or repurchasing interests of the
Fund for the account of the Fund, SDI will in all respects conform to the
requirements of all state and federal laws and the Conduct Rules of the NASD,
relating to such sale or repurchase, as the case may be. SDI will observe and
be bound by all the provisions of the Fund's organizational documents (and of
any fundamental policies adopted by the Fund pursuant to the Investment
Company Act), which at the time in any way require, limit, restrict, prohibit
or otherwise regulate any action on the part of SDI hereunder.
12. SDI agrees to indemnify and hold harmless the Fund and each of its
Board members and officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the Securities Act, against any and all
losses, claims, damages, liabilities or litigation (including legal and other
expenses) to which the Fund or such Board members, officers, or controlling
persons may become subject under such Act, under any other statute, at common
law or otherwise, arising out of the acquisition of any interests by any
person which (i) may be based upon any wrongful act by SDI or any of SDI's
employees or representatives, or (ii) may be based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading if such statement or omission was made in reliance upon information
furnished to the Fund by SDI, or (iii) may be incurred or arise by reason of
SDI's acting as the Fund's agent instead of purchasing and reselling interests
as principal in distributing the interests to the public, provided, however,
that in no case (i) is SDI's indemnity in favor of a Board member or officer
or any other person deemed to protect such Board member or officer or other
person against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of his duties or by reason of his reckless disregard of
obligations and duties under this Agreement or (ii) is SDI to be liable under
the indemnity agreement contained in this paragraph with respect to any claim
made against the Fund or any person indemnified unless the Fund or such
person, as the case may be, shall have notified SDI in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon the Fund
or upon such person (or after the Fund or such person shall have received
notice of such service on any designated agent), but failure to notify SDI of
any such claim shall not relieve SDI from any
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liability which SDI may have to the Fund or any person against whom such
action is brought otherwise than on account of SDI's indemnity agreement
contained in this paragraph. SDI shall be entitled to participate, at SDI's
own expense, in the defense, or, if SDI so elects, to assume the defense of
any suit brought to enforce any such liability, but if SDI elects to assume
the defense, such defense shall be conducted by counsel chosen by SDI and
satisfactory to the Fund, to its officers and Board members, or to any
controlling person or persons who is/are defendant or defendants in the suit.
In the event that SDI elects to assume the defense of any such suit and retain
such counsel, the Fund, such officers and Board members or controlling person
or persons, defendant or defendants in the suit shall bear the fees and
expenses of any additional counsel retained by them, but, in case SDI does not
elect to assume the defense of any such suit, SDI will reimburse the Fund,
such officers and Board members or controlling person or persons, defendant or
defendants in such suit for the reasonable fees and expenses of any counsel
retained by them. SDI agrees to notify the Fund promptly of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any interests. The Fund shall not, without the prior written consent
of SDI, effect any settlement of any pending or threatened action, suit or
proceeding in respect of which the Fund is or could have been a party and
indemnity has or could have been sought hereunder by the Fund, unless such
settlement includes an unconditional release of SDI from all liability on
claims that are the subject matter of such action, suit or proceeding.
13. The Fund agrees to indemnify and hold harmless SDI and each of SDI's
directors and officers and each person, if any, who controls SDI within the
meaning of Section 15 of the Securities Act, against any and all losses,
claims, damages, liabilities or litigation (including legal and other
expenses) to which SDI or such directors, officers or controlling persons may
become subject under such Act, under any other statute, at common law or
otherwise, arising out of the acquisition of any interests by any person which
(i) may be based upon any wrongful act by the Fund or any of its employees or
representatives, or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
if such statement or omission was not made in reliance upon information
furnished to SDI by the Fund; provided, however, that in no case (i) is the
Fund's indemnity in favor of a director or officer or any other person deemed
to protect such director or officer or other person against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties
or by reason of his reckless disregard of obligations and duties under this
Agreement or (ii) is the Fund to be liable under its indemnity agreement
contained in this paragraph with respect to any claims made against SDI or any
such director, officer or controlling person unless SDI or such director,
officer or controlling person, as the case may be, shall have notified the
Fund 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 SDI or upon such director, officer or controlling person (or after
SDI or such director, officer or controlling person shall have received notice
of such service on any designated agent), but failure to notify the Fund of
any such claim shall not relieve it from any liability which 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 Fund 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 Fund elects to assume the defense, such defense shall be
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conducted by counsel chosen by it and satisfactory to SDI, its directors,
officers, or controlling person or persons, defendant or defendants in the
suit. In the event that the Fund elects to assume the defense of any such suit
and retain such counsel, SDI, its directors, officers or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them, but, in case the Fund does not
elect to assume the defense of any such suit, it will reimburse SDI or such
directors, officers or controlling person or persons, defendant or defendants
in the suit, for the reasonable fees and expenses of any counsel retained by
them. The Fund agrees to notify SDI promptly of the commencement of any
litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of any interests. SDI shall not, without
the prior written consent of the Fund, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which either SDI is or
could have been a party and indemnity has or could have been sought hereunder
by SDI, unless such settlement includes an unconditional release of the Fund
from all liability on claims that are the subject matter of such action, suit
or proceeding.
14. The Fund shall assume and pay all charges and expenses of its
operations not specifically assumed or otherwise to be provided by SDI under
this Agreement. The Fund will pay (or will enter into arrangements providing
that others will pay): (i) all fees and expenses in connection with the
registration and qualification of interests for sale in the various
jurisdictions in which the Fund shall determine it advisable to qualify such
interests for sale (including registering the Fund as a broker or dealer or
any officer of the Fund or other person as agent or salesman of the Fund in
any such jurisdictions, as applicable) ("Blue Sky expenses"); and (ii) the
cost of preparing and printing of sufficient copies of the Fund's Registration
Statement and any other sales material (and any supplements or amendments
thereto).
15. This Agreement shall become effective on the date first written above
and shall continue for a period two years after such date; and shall continue
from year to year thereafter only so long as such continuance is approved in
the manner required by the Investment Company Act.
16. This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any
penalty by the Fund or by SDI on sixty (60) days' written notice to the other
party. The indemnity provisions contained herein shall remain operative and in
full force and effect regardless of any termination of this Agreement. The
Fund may effect termination with respect to any class of any series of the
Fund by a vote of (i) a majority of the Board members who are not interested
persons of the Fund and who have no direct or indirect financial interest in
the operation of this Agreement or (ii) a majority of the outstanding voting
securities of such series or class. Without prejudice to any other remedies of
the Fund, the Fund may terminate this Agreement at any time immediately upon
SDI's failure to fulfill any of its obligations hereunder.
17. All material amendments to this Agreement must be approved by a vote
of a majority of the Board, and of the Board members who are not interested
persons of the Fund and who have no direct or indirect financial interest in
the operation of this Agreement, cast in person at a meeting called for such
purpose.
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18. The terms "assignment," "interested person" and "vote of a majority
of the outstanding voting securities" shall have the meanings set forth in the
Investment Company Act and the rules and regulations thereunder.
19. SDI shall receive such compensation for its distribution services as
set forth in this Agreement. Termination of this Agreement shall not affect
the right of SDI to receive payments on any unpaid balance of the compensation
earned prior to such termination.
20. Notwithstanding anything in this Agreement to the contrary, SDI shall
be contractually bound hereunder by the terms of any publicly announced waiver
of or cap on the compensation received for its distribution services under
this Agreement or by the terms of any written document provided to the Board
announcing a waiver or cap, as if such waiver or cap were fully set forth
herein.
21. SDI will not use or distribute, or authorize the use, distribution or
dissemination by Firms or others in connection with the sale of Fund interests
any statements other than those contained in the Registration Statement,
except such supplemental literature or advertising as shall be lawful under
federal and state securities laws and regulations. SDI will furnish the Fund
with copies of all such material.
22. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder shall not be thereby
affected.
23. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
24. All parties hereto are expressly put on notice of the Fund's Limited
Liability Company Operating Agreement, and any amendments thereto, all of have
been or will be delivered to the parties hereto. This Agreement has been
executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund
hereunder are not binding upon any of the Board members, officers, or
unitholders of the Fund individually but are binding upon only the assets and
property of the Fund. With respect to any claim by SDI for recovery of any
liability of the Fund arising hereunder allocated to a particular series or
class, whether in accordance with the express terms hereof or otherwise, SDI
shall have recourse solely against the assets of that series or class to
satisfy such claim and shall have no recourse against the assets of any other
series or class for such purpose.
25. This Agreement shall be construed in accordance with applicable
federal law and with the laws of the State of New York.
26. This Agreement is the entire contract between the parties relating to
the subject matter hereof and supersedes all prior agreements between the
parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the Fund and SDI have caused this Agreement to be
executed as of the day and year first above written.
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Attest: THE TOPIARY BENEFIT PLAN INVESTOR
FUND LLC
By:
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Name:
Title:
Attest: XXXXXXX DISTRIBUTORS, INC.
By:
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Name:
Title:
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