Exhibit (h)
XXXXXXXXXX PARTNERS ABSOLUTE RETURN FUND LLC
PLACEMENT AGENT AGREEMENT
This Placement Agent Agreement (this "Agreement") is made as of this
22nd day of February, 2002 by and between Xxxxxxxxxx Partners Absolute Return
Fund LLC (the "Fund"), and Funds Distributor Inc., a Massachusetts Corporation
(the "Placement Agent").
WHEREAS, the Fund, a Delaware limited liability company, is a
non-diversified, closed-end management investment company which will be
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Placement Agent is a registered broker-dealer under the
Securities Exchange Act of 1934, as amended, and a member of the National
Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, the Fund desires to retain the Placement Agent to provide the
services described herein in connection with the private placement of limited
liability company member interests issued by the Fund ("Interests"), and is
willing to provide such services upon the terms and conditions set forth herein;
and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties agree as follows:
Section 1. Definitions
a. Accredited Investor. As the term is defined under Rule 501 of
Regulation D under the Securities Act of 1933 (the "1933 Act"), as
amended from time to time.
b. Private Placement. Means a transaction that does not involve a
public offering within the meaning of Section 4(2) of 1933 Act, as
amended from time to time.
c. Private Placement Memorandum. means the confidential offering
document filed with the Securities and Exchange Commission ("SEC")
on Form N-2 under the 1940 Act, by which Interests shall be
solicited.
d. Qualified Client: As the term is defined in Rule 205-3(d)(1)(ii) and
(d)(1)(iii) (but excluding the definition of Qualified Client in
Rule 205(d)(1)(i)) of the Investment Advisers Act of 1940 ("Advisers
Act"), as amended from time to time).
e. Qualified Investor. Means a person(s) or entity that is both an
Accredited Investor and a Qualified Client, who is purchasing for
investment and not for resale.
Section 2. Appointment of Placement Agent
The Fund hereby appoints the Placement Agent as the exclusive placement
agent of Interests of the Fund in the United States, and the Placement Agent
hereby accepts such appointment and agrees to act hereunder. The Fund also
authorizes the Placement Agent to enter into agreements with securities
broker-dealers legally authorized to sell Fund Interests (each, a "Soliciting
Agent") pursuant to and in accordance with a Selling Group Agreement in the form
attached hereto as Exhibit A.
Section 3. Private Placement of Interests
a. The Placement Agent understands and agrees that Interests of the
Fund may only be offered and sold in Private Placements to Qualified
Investors.
b. The Fund, or any agent of the Fund designated in writing by the
Board of Directors of the Fund (the "Board"), shall be promptly
advised of all purchase orders for Interests in the Fund received by
the Placement Agent or any Soliciting Agent. The Fund, the Placement
Agent and each Soliciting Agent may reject any purchase order if any
of them reasonably believes that the potential investor is not a
Qualified Investor or that the offer and sale of Interests to such
investor, singly or along with the other offers or sales, would not
be a Private Placement, or otherwise in their discretion. Orders
will be binding upon the Fund only upon final acceptance by it. The
Fund (or its agent) shall confirm orders upon their receipt, will
make appropriate book entries and, upon receipt by the Fund (or its
agent) of payment therefor, shall deliver deposit receipts for
Interests pursuant to instructions of the Placement Agent or
Soliciting Agent. Payment shall be made to the Fund (or its agent)
in the manner set forth in the Private Placement Memorandum. The
Placement Agent agrees to cause such payment and such instructions
to be delivered promptly to the Fund (or its agent).
c. The minimum initial and additional investment in the Fund shall be
the amount set forth in the Private Placement Memorandum unless the
Board approves lower amounts and instructs the Placement Agent in
writing to accept the lower minimum initial and/or additional
investment amount.
Section 4. Compensation
The Placement Agent is entitled to the placement fee or sales charge
described in the Private Placement Memorandum (the "Placement Fee") for each
purchase of an Interest unless the Soliciting Agent is authorized to withhold,
and has withheld, the placement fee from a Qualified Investor's initial
investment. The Placement Agent agrees to pay any Placement Fee to the
Soliciting Agent to the extent received by it and required by any agreement to
be paid to the Soliciting Agent. The Placement Agent will be fully compensated
for its services under this Agreement through the payment by the Fund or its
agent of a fee equal to [$50,000] per year, payable monthly in arrears (or for
any portion thereof) plus reasonable out-of-pocket expenses associated with its
obligations hereunder.
Section 5. Representations, Warranties and Covenants of the Placement Agent
a. The Placement Agent represents, warrants and agrees that Interests
shall be offered and sold by it only to persons reasonably believed
to be Qualified Investors in Private Placements in accordance with
Rule 506 of Regulation D and to no other person in any other
transaction. Sales of Interests in the Fund shall be on the terms
described in the Private Placement Memorandum or as directed by the
Board of the Fund in writing and provided to the Placement Agent
reasonably in advance.
b. In selling Interests in the Fund, and otherwise acting with respect
to the Interests in the Fund, the Placement Agent represents,
warrants and agrees (and shall cause each Soliciting Agent to so
represent, warrant and agree) to conform in all respects with the
requirements of all federal (including without limitation the
regulations of the SEC) and state laws and NASD rules and
regulations and the rules and regulations of any other applicable
self-regulatory organization applicable to it as Placement Agent
relating to the offer and sale of such Interests and otherwise with
respect to this Agreement. The Placement Agent is not, nor shall any
Soliciting Agent be, authorized by the Fund to give any information
or to make any representations other than those contained in the
Private Placement Memorandum and any other literature or
documentation approved in writing by appropriate officers of the
Fund, and provided to the Placement Agent reasonably in advance
The Placement Agent shall obtain appropriate representations and
warranties from each Soliciting Agent to the effect that such person
or entity (i) is duly registered with the proper regulatory
organizations, including the SEC and NASD, (ii) has procedures in
place to comply with the Selling Group Agreement including, without
limitation, all requirements of Regulation D of the 1933 Act and
Rule 506 thereunder, and (iii) is reasonably able to comply with the
restrictions applicable to the offering of Interests. Nothing set
forth in any Soliciting Agent Agreement shall relieve the Placement
Agent of any of its responsibilities to the Fund under this
Agreement.
c. The Placement Agent shall provide on behalf of the Fund such
information provided to it for distribution to Qualified Investors
and to Soliciting Agents as the Fund may request in writing from
time to time.
Section 6. Representations, Warranties and Covenants of the Fund.
a. Subject to the possible suspension of the sale of Interests of the
Fund (of which event the Placement Agent shall be notified in
writing in advance by the Fund), and the right to reject orders, the
Fund agrees to sell Interests to Qualified Investors on the terms
set forth in the Private Placement Memorandum so long as Interests
are available for sale.
b. The Fund (or its agent) agrees to furnish to Qualified Investors,
directly or through Soliciting Agents, copies of all information,
financial statements, the Private Placement Memorandum, additional
offering materials and other documents (collectively, "Information")
which shall be required by law or otherwise desirable for
distribution to Qualified Investors in the Fund and/or prospective
Qualified Investors. The Fund (or its agent) shall make available to
the Placement Agent the Information or any part thereof the
Placement Agent may reasonably request in connection with the
placement of Interests. The Fund (or its agents) shall provide
copies of the Information as may be required by the Soliciting
Agents to such Soliciting Agents on behalf of the Placement Agent.
c. The Fund agrees to take all necessary action (including filings with
the SEC and State securities administrators) to ensure an exemption
from the registration and qualification requirements of federal and
state securities laws in connection with the Interests in the Fund,
excluding registration under the 0000 Xxx. The Fund will coordinate
and prepare such reports, applications and documents as may be
necessary to comply with the relevant provisions of state securities
laws in connection with the transactions contemplated by this
Agreement, including the filing of copies of documents filed with
the SEC, and will furnish any required consent to service of
process, and pay any required fees, in connection therewith. The
Fund represents and warrants that the Private Placement Memorandum
and all information furnished by the Fund shall be accurate and in
compliance with all applicable laws. The Fund agrees to file from
time to time such amendments, reports and other documents as may be
necessary in order that there will be no untrue statement of a
material fact in the Private Placement Memorandum, or omission to
state a material fact in the Private Placement Memorandum which
omission would make the statements therein, in light of the
circumstances under which the Private Placement Memorandum is, or is
to be used, not misleading.
Section 7. Indemnification.
a. The Placement Agent agrees to indemnify and hold harmless the Fund
(and its agents) and each of the Fund's directors and officers, and
each person, if any, who controls the Fund within the meaning of
Section 15 of the 1933 Act, excluding, to the extent applicable, the
Placement Agent, 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 the 1933 Act, under any other
statute, at common law or otherwise, arising out of the offer, sale
or acquisition of any Interests by any person which may be based
upon (i) any wrongful act by the Placement Agent or any of the
Placement Agent's officers, directors, employees, agents or
representatives; (ii) any breach of this Agreement by the Placement
Agent or (iii) any untrue statement or alleged untrue statement of a
material fact contained in the Private Placement Memorandum or the
omission or alleged omission to state therein a material fact
required to be stated therein
or necessary to make the statement therein, in light of the
circumstances under which the Private Placement Memorandum is, or is
to be used, not misleading if such statement or omission was made in
reliance upon information furnished to the Fund in writing by the
Placement Agent, provided, however, that in no case is the Placement
Agent's indemnity deemed to protect any person against any liability
to which any such person would otherwise be subject by reason of
such person's breach of this Agreement, willful misfeasance, bad
faith, or negligence in the performance of his/her duties or by
reason of reckless disregard of obligations and duties under this
Agreement.
b. The Fund agrees to indemnify and hold harmless the Placement Agent
and each of the Placement Agent's directors and officers and each
person, if any, who controls the Placement Agent within the meaning
of Section 15 of the 1933 Act, against any and all losses, claims,
damages, liabilities or litigation (including legal and other
expenses) to which the Placement Agent or such directors, officers
or controlling persons may become subject under the 1933 Act, under
any other statute, at common law or otherwise, arising out of the
offer, sale or acquisition of any Interests by any person which may
be based upon (i) any wrongful act by the Fund (and its agents) or
any of its officers, directors or employees (ii) any breach of this
Agreement by the Fund; or (iii) any untrue statement or alleged
untrue statement of a material fact contained in the Private
Placement Memorandum or in the Information or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which the Private Placement Memorandum
and Information is, or is to be used, not misleading provided that
such statement or omission was not made in reliance upon information
furnished by the Placement Agent to the Fund; and provided further
that in no case is the Fund's indemnity deemed to protect any person
against any liability to which such person would otherwise be
subject by reason of such person's breach of this Agreement or
willful misfeasance, bad faith, or negligence in the performance of
his duties or by reason of his reckless disregard of obligations and
duties under this Agreement.
c. The party that is entitled to indemnification pursuant to this
Section 7 ("Indemnified Party") shall be entitled to participate, at
its own expense, in the defense, or, if the party required to
provide indemnification pursuant to this Section 7 ("Indemnitor") so
elects, to assume the defense of any suit brought to enforce any
such liability, but if the Indemnitor elects to assume the defense,
such defense shall be conducted by counsel chosen by Indemnitor and
satisfactory to the Indemnified Party in its reasonable judgment, to
its officers and Board members, and to any controlling person or
persons, defendant or defendants in the suit. The Indemnified Party
shall not, without the prior written consent of the Indemnitor,
effect any settlement of any pending or threatened action, suit or
proceeding in respect of which the Indemnified Party is or could
have been a party and indemnity has or could have been sought
hereunder by the Indemnified Party, unless such settlement includes
an unconditional release of Indemnitor from all liability on claims
that are the
subject matter of such action, suit or proceeding and involves
solely the payment of money.
Section 8. Duration and Termination of this Agreement.
a. This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof
and thereafter, but only so long as such continuance is specifically
approved at least annually by (a) the Board and (b) by the vote of a
majority of those Directors of the Fund who are not parties to this
Agreement or interested persons of any such parties and who have no
direct or indirect financial interest in this Agreement (the
"Independent Directors"), cast in person at a meeting called for the
purpose of voting upon such approval.
b. This Agreement may be terminated with respect to the Fund at any
time, without the payment of any penalty, or by the Placement Agent,
on not less than sixty (60) days' written notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment. The obligations of each party under Section 7 shall
survive the termination of this Agreement.
c. The terms "affiliated person," "assignment," "interested
person" and "vote of a majority of the outstanding voting
securities," when used in this Agreement, shall have the
respective meanings specified in the 1940 Act.
Section 9. Amendments to this Agreement.
This Agreement may be amended by the parties only if such amendment is
specifically approved by (a) the Board, or by a vote of a majority of the
outstanding voting securities of the Fund and (b) by the vote of a majority of
the Independent Directors cast in person at a meeting called for the purpose of
voting on such amendment.
Section 10. Governing Law.
This Agreement will be governed by the laws of the State of Delaware
without reference to the choice of law principles thereof. The courts of the
State of Delaware are to have non-exclusive jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement and accordingly any
legal action or proceedings arising out of or in connection with this Agreement
("Proceedings") may be brought in such courts.
Section 11. Miscellaneous.
a. Notices of any kind to be given to the Placement Agent by the Fund
shall be in writing and shall be duly given if mailed, delivered or
communicated by answer back facsimile transmission to the Placement
Agent at FDI, 00 Xxxxx Xx., Xxxxx 0000, Xxxxxx, XX 00000 Facsimile:
(000) 000-0000, Attention: Xxxx Xxxxx, or at such other address or
to such individual as shall be so specified by the Placement Agent.
Notices of any kind to be given to the Fund hereunder by the
Placement Agent shall be in writing and will be duly given if mailed
or delivered to the Fund at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX
00000, Facsimile: (000) 000-0000, Attention: General Counsel, or at
such other address or to such individual as shall be so specified in
writing by the Fund to the Placement Agent.
b. This Agreement constitutes the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject mater hereof.
c. If any provision of this Agreement is held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
d. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Private Placement Memorandum.
e. This Agreement is subject to the Private Placement Memorandum and,
in the event of a conflict, the terms of the Private Placement
Memorandum shall govern the parties' obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year above written.
Xxxxxxxxxx Partners Absolute Return Fund LLC
By: /s/ Xxxxxxx Xxxxxx
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Title: Assistant Secretary
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Funds Distributor, Inc.
By: Xxxxxxx X. Xxxxx
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Title:
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