DISTRIBUTION AGREEMENT
AGREEMENT made as of ____________, 2005 between SAGE MULTI-STRATEGY FUND,
L.L.C. a Delaware limited liability company (the "Fund"), and ROBECO SECURITIES,
L.L.C., a Delaware limited liability company (the "Distributor").
WITNESSETH:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a closed-end, non-diversified
management investment company;
WHEREAS, the Fund is authorized to issue interests in the Fund
("Interests") pursuant to the Fund's registration statement on Form N-2, as it
may be amended or supplemented from time to time (the "Registration Statement");
WHEREAS, the Distributor is a securities firm engaged in the business of
selling interests of investment companies either directly to purchasers or
through other securities dealers; and
WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other with respect to the offering of the Fund's Interests.
NOW THEREFORE, the parties agree as follows:
Section 1. APPOINTMENT OF THE DISTRIBUTOR; OFFERING
(a) Subject to the terms and conditions of this Agreement, the Fund hereby
appoints the Distributor as its non-exclusive distributor in connection with the
distribution of the Interests, and the Distributor hereby accepts such
appointment.
(b) The Distributor agrees to use its reasonable best efforts to offer and
sell Interests to investors that the Distributor reasonably believes meet the
eligibility requirements set forth in the Registration Statement and to use all
reasonable efforts to assist the Fund in obtaining performance by each
prospective investor who submits a Subscription Agreement (as defined below).
(c) Unless otherwise agreed by the parties hereto, Sage Capital Management,
the Fund's investment adviser (the "Investment Adviser"), or [SEI Investments
Global Funds Services, the Fund's administrator (the "Administrator")] shall be
responsible for reviewing each Subscription Agreement to confirm that it has
been completed in accordance with the instructions thereto. The Fund, the
Investment Adviser [and/or the Administrator], in its or their sole discretion,
may return to the Distributor any Subscription Agreement that is not completed
to its or their satisfaction and the Fund shall be under no obligation to accept
any Subscription Agreement.
(d) The Distributor acknowledges that Interests will be offered and sold
only as set forth in the Registration Statement and the Fund's Limited Liability
Company Agreement.
(e) The Fund may suspend or terminate the offering of the Interests at any
time as to specific classes of investors (if such separate classes are
established), as to specific jurisdictions or otherwise. Upon notice to the
Distributor of the terms of such suspension or termination, the Distributor
shall suspend solicitation of subscriptions for Interests in accordance with
such terms until the Fund notifies the Distributor that such solicitation may be
resumed.
(f) It is acknowledged and agreed that the Distributor is not obligated to
sell any specific number of Interests or to purchase any Interests for its own
account. The Fund shall be entitled to appoint additional distributors.
Section 2. AGENCY. In offering subscriptions for Interests, the Distributor
shall act solely as an agent of the Fund and not as principal.
Section 3. DUTIES OF THE FUND
(a) The Fund shall take, from time to time, but subject always to any
necessary approval of the Board of Managers of the Fund or of the members of the
Fund (the "Members"), all necessary action to fix the number of authorized
Interests and such steps as may be necessary to register the same under the
Securities Act of 1933, as amended (the "Securities Act"), to the end that there
will be available for sale such number of Interests as the Distributor
reasonably may be expected to sell.
(b) For purposes of the offering of Interests, the Fund will furnish to the
Distributor copies of the Registration Statement, including the prospectus
contained therein, and the subscription agreement and other documentation for
use in the offering of Interests (the "Subscription Agreement"). Additional
copies of such documents will be furnished to the Distributor at no cost to the
Distributor in such numbers as reasonably requested. The Distributor is
authorized to furnish to prospective subscribers for Interests only such
information concerning the Fund and the offering as may be contained in the
Registration Statement, the Fund's formation documents, or any other documents
(including sales material), if approved by the Fund.
(c) The Fund shall furnish to the Distributor copies of all financial
statements of the Fund which the Distributor may reasonably request for use in
connection with its duties hereunder, and this shall include, upon request by
the Distributor, one certified copy of all financial statements prepared for the
Fund by independent public accountants.
(d) The Fund shall use its best efforts to qualify and maintain the
qualification of the Interests for sale under the securities laws of such
jurisdictions as the Distributor and the Fund may approve. Any such
qualification may be withheld, terminated or withdrawn by the Fund at any time
in its discretion. The expense of qualification and maintenance of qualification
shall be borne by the Fund. The Distributor shall furnish such information and
other material relating to its affairs and activities as may be required by the
Fund in connection with such qualification.
(e) The Fund will furnish, in reasonable quantities upon request by the
Distributor, copies of annual and interim reports of the Fund.
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(f) The Fund will furnish the Distributor with such other documents as it
may reasonably require, from time to time, for the purpose of enabling it to
perform its duties as contemplated by this Agreement.
Section 4. DUTIES OF THE DISTRIBUTOR
(a) The Distributor shall devote reasonable time and effort to its duties
hereunder. The services of the Distributor to the Fund hereunder are not to be
deemed exclusive and nothing herein contained shall prevent the Distributor from
entering into like arrangements with other investment companies so long as the
performance of its obligations hereunder is not impaired thereby.
(b) In performing its duties hereunder, the Distributor shall use its best
efforts in all respects to duly conform with the requirements of all applicable
laws relating to the sale of securities.
(c) The Distributor shall adopt and follow procedures, as approved by the
officers of the Fund, for the confirmation of sales to investors and Selected
Dealers (as defined below), the collection of amounts payable by investors and
Selected Dealers on such sales, and the cancellation of unsettled transactions,
as may be necessary to comply with the requirements of the NASD, as such
requirements may from time to time exist.
Section 5. SELECTED DEALTER AGREEMENTS
(a) The Distributor shall have the right to enter into selected dealer
agreements with securities dealers of its choice ("Selected Dealers") for the
sale of Interests; provided that the Distributor shall periodically inform the
Fund's Board of Managers of the nature and substance of such agreements and that
the Fund shall approve the forms of agreements with such dealers. Interests sold
to Selected Dealers shall be for resale by such dealers only.
(b) Within the United States, the Distributor shall offer and sell
Interests only to such Selected Dealers as are members in good standing of the
NASD.
Section 6. FEES
(a) The Distributor is entitled to charge a placement fee to each investor
on the purchase price of its Interests of up to 3.0% as specified in the
Registration Statement upon acceptance of the investor's subscription for
Interests by the [Administrator]; provided that the Distributor shall have the
authority to adjust or waive the placement fee in particular cases, at its sole
discretion, in consultation with the Fund [or the Administrator] and as
generally described in the Registration Statement.
(b) In accordance with applicable NASD Conduct Rules, the Distributor shall
cap the placement fee it receives from investors at 3% of the total proceeds
proposed to be received by the Fund in respect of sales of Interests registered
under the Fund's registration statement on Form N-2.
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Section 7. PAYMENT OF EXPENSES
(a) The Fund shall bear all of its own costs and expenses, 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 in
connection with any fees and expenses incurred with respect to any filings with
the NASD and preparing and mailing annual and interim reports and proxy
materials to members (including but not limited to the expense of setting in
type any such registration statements, or interim reports or proxy materials).
(b) The Fund shall bear any cost and expenses of qualification of the
Interests for sale pursuant to this Agreement and, if necessary or advisable in
connection therewith, of qualifying the Fund as a broker or dealer in such
states of the United States or other jurisdictions as shall be selected by the
Fund and the Distributor and the cost and expenses payable to each such state
for continuing qualification therein until the Fund decides to discontinue such
qualification.
(c) The Distributor shall be responsible for any payments made to Selected
Dealers as reimbursement for their expenses associated with payments of sales
commissions to financial consultants. In addition, after the prospectuses and
annual and interim reports have been prepared and set in type, the Distributor
shall bear the costs and expenses of printing and distributing any copies
thereof which are to be used in connection with the offering of Interests to
Selected Dealers or investors pursuant to this Agreement. The Distributor shall
bear the costs and expenses of preparing, printing and distributing any other
literature used by the Distributor or furnished by it for use by Selected
Dealers in connection with the offering of the Interests for sale to the public
and any expenses of advertising incurred by the Distributor in connection with
such offering.
Section 8. INDEMNIFICATION
(a) The Fund shall indemnify and hold harmless the Distributor and each
person, if any, who controls the Distributor, 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 Interests, 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 an annual or interim report to Members of the Fund,
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 Fund in connection
therewith by or on behalf of the Distributor; provided, however, that in no case
(i) is the indemnity of the Fund in favor of the Distributor and any such
controlling persons to be deemed to protect the Distributor or any such
controlling persons thereof against any liability to the Fund or its Members to
which the Distributor 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 Fund to be
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liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Distributor or any such controlling persons, unless
the Distributor or such controlling persons, 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 or claims that
have been served upon the Distributor or such controlling persons (or after the
Distributor or such controlling persons 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 conducted by counsel chosen by it and
satisfactory to the Distributor, or such controlling person or persons of the
Distributor. In the event the Fund elects to assume the defense of any such suit
and retain such counsel, the Distributor, or such controlling person or persons
of the Distributor, shall bear the fees and expenses, as incurred, 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 the Distributor, or such
controlling person or persons of the Distributor, for the reasonable fees and
expenses, as incurred, of any counsel retained by them. The Fund shall promptly
notify the Distributor of the commencement of any litigation or proceedings
against it or any of its officers or Managers in connection with the issuance or
sale of any of the Interests.
(b) The Distributor shall indemnify and hold harmless the Fund and each of
its Managers and officers and each person, if any, who controls the Fund against
any loss, liability, claim, damage or expense, as incurred, described in the
foregoing indemnity contained in subsection (a) of this Section 8 but only with
respect to statements or omissions made in reliance upon, and in conformity
with, information furnished to the Fund in writing by or on behalf of the
Distributor for use in connection with the Registration Statement or other
offering materials, as from time to time amended, or the annual or interim
reports to Members. In case any action shall be brought against the Fund or any
person so indemnified, in respect of which indemnity may be sought against the
Distributor, the Distributor shall have the rights and duties given to the Fund,
and the Fund and each person so indemnified shall have the rights and duties
given to the Distributor by the provisions of subsection (a) of this Section 8.
Section 9. 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 thereafter and thereafter
continue from year to year, but only so long as such continuance is specifically
approved at least annually (i) by the Managers or by the vote of a majority of
the outstanding voting securities of the Fund and (ii) by the vote of a majority
of those Managers 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.
(b) This Agreement may be terminated at any time, without the payment of
any penalty, by the Managers or by vote of a majority of the outstanding voting
securities of the Fund, or by the Distributor, on sixty days' written notice to
the other party. This Agreement shall automatically terminate in the event of
its assignment.
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(c) The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested person," when used in this Agreement, shall have
the respective meanings specified in the Investment Company Act.
(d) In the event the offering of Interests is terminated, the Distributor
will not be entitled to unrecovered compensation (except for out-of-pocket
expenses).
Section 10. AMENDMENTS OF THIS AGREEMENT This Agreement may be amended by
the parties only if such amendment is specifically approved (i) by the Managers
or by the vote of a majority of outstanding voting securities of the Fund and
(ii) by the vote of a majority of those Managers 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 11. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written. This Agreement may be executed by the
parties hereto in any number of counterparts, all of which shall constitute one
and the same instrument.
SAGE MULTI-STRATEGY FUND, L.L.C.
By: __________________________________
Name:
Title:
ROBECO SECURITIES, L.L.C.
By: __________________________________
Name:
Title:
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