Exhibit (h)(1)
DISTRIBUTION AGREEMENT
AGREEMENT dated as of _______________, between The Xxxxxxxx
Multi-Strategy Trust, a closed-end, non-diversified management investment
company organized as a statutory trust under the laws of the State of
Delaware, having its principal place of business at 000 Xxxx Xxxxxxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "Fund"), and ALPS Distributors,
Inc., a Colorado corporation and a registered broker-dealer under the
Securities Exchange Act of 1934, having its principal place of business at
0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 (the "Distributor").
WHEREAS, the Fund is a closed-end, non-diversified management investment
company registered under the Investment Company Act of 1940, as amended;
WHEREAS, the Fund wishes to employ the services of the Distributor in
connection with the promotion and distribution of the shares of the Fund (the
"Shares"); and
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. Documents -- The Fund has furnished or will furnish, upon request, the
Distributor with copies of the Fund's Declaration of Trust and Trust Agreement
(the "Declaration of Trust"), advisory agreement, custodian agreement,
transfer agency agreement, administration agreement, current confidential
private offering memorandum (as amended and supplemented from time-to-time,
the "Offering Memorandum"), and all forms relating to any plan, program or
service offered by the Fund. The Fund shall furnish, within a reasonable time
period, to the Distributor a copy of any amendment or supplement to any of the
above-mentioned documents. Upon request, the Fund shall furnish promptly to
the Distributor any additional documents necessary or advisable to perform its
functions hereunder. As used in this Agreement the term "registration
statement" shall mean any registration statement filed by the Fund with the
Securities and Exchange Commission ("SEC") and any amendments and supplements
thereto that are filed with the SEC.
2. Sales of Shares -- The Fund grants to the Distributor the right to
sell the Shares only to investors who are both "accredited investors," as
defined in Rule 501 under the Securities Act of 1933, as amended (the "1933
Act"), and "qualified clients," as defined in Rule 205-3 under the Investment
Company Act of 1940, as amended (the "1940 Act"), in a private placement
exempt from the registration requirements of the 1933 Act, pursuant to Section
4(2) thereof and Rule 506 thereunder, as agent on behalf of the Fund, during
the term of this Agreement, subject to the registration requirements of the
1940 Act and of the laws governing the sale of securities in the various
states ("Blue Sky Laws"), under the terms and conditions set forth in this
Agreement.
3. Sales of Shares by the Fund-- The rights granted to the Distributor
shall be nonexclusive in that the Fund reserves the right to sell Shares to
investors on applications received and accepted by the Fund.
4. Offering Price - Except as otherwise noted in the Offering Memorandum,
all Shares sold to investors by the Distributor or the Fund will be sold at
net asset value per Share,
as determined in the manner described in the Offering Memorandum. The Fund
shall in all cases receive the net asset value per Share on all sales, subject
to any applicable sales commissions.
5. Suspension of Sales -- The Fund reserves the right to suspend sales
and the Distributor's authority to process orders for Shares on behalf of the
Fund if, in the judgment of the Fund, it is in the best interests of the Fund
to do so. Suspension will continue for such period as may be determined by the
Fund.
6. Solicitation of Sales -- In consideration of these rights granted to
the Distributor, the Distributor agrees to use its best efforts to solicit
orders for the sale of the Shares at the offering price in a manner consistent
with Paragraph 2 above. This shall not prevent the Distributor from entering
into like arrangements (including arrangements involving the payment of
underwriting commissions) with other issuers. The Distributor will act only on
its own behalf as principal should it choose to enter into selling agreements
with selected dealers or others.
7. Authorized Representations -- The Distributor is not authorized by the
Fund to give any information or to make any representations other than those
contained in the Offering Memorandum, or contained in shareholder reports or
other material prepared by or on behalf of the Fund for the Distributor's use.
Consistent with the foregoing, the Distributor may prepare and distribute
sales literature or other material as it may deem appropriate in consultation
with, and subject to the prior approval of, the Fund, provided such sales
literature complies with applicable law and regulations.
8. Registration of Fund -- The Fund shall at all times that this
agreement is in effect maintain its registration as a closed-end,
non-diversified management investment company under the 1940 Act.
9. Fund Expenses -- Unless otherwise agreed to by the parties hereto in
writing, the Distributor shall not be responsible for fees and expenses in
connection with (a) filing of any registration statement, printing and the
distribution of any Offering Memorandum and amendments prepared for use in
connection with the offering of Shares, preparing, setting in type, printing
and mailing the Offering Memorandum and any supplements thereto sent to
existing shareholders, and (b) preparing, setting in type, printing and
mailing any report (including annual and semi-annual reports) or other
communication to shareholders of the Fund.
10. Use of the Distributor's Name -- The Fund shall not use the name of
the Distributor, or any of its affiliates, in any Offering Memorandum, sales
literature, and other material relating to the Fund, including the Fund's
registration statement, in any manner without the prior written consent of the
Distributor (which shall not be unreasonably withheld); provided, however,
that the Distributor hereby approves all lawful uses of the names of the
Distributor and its affiliates in the Fund's registration statement and in all
other materials which merely refer in accurate terms to their appointment
hereunder or which are required by the SEC, NASD, OCC or any state securities
authority or other regulatory or self-regulatory organization with
jurisdiction over the Fund.
11. Use of the Fund's Name -- Neither the Distributor nor any of its
affiliates shall use the name of the Fund in any manner without the prior
consent of the Fund (which shall not
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be unreasonably withheld); provided, however, that the Fund hereby approves
all lawful uses of its name in any required regulatory filings of the
Distributor which merely refer in accurate terms to the appointment of the
Distributor hereunder, or which are required by the SEC, NASD, OCC or any
state securities authority.
12. Insurance -- The Distributor agrees to maintain fidelity bond and
liability insurance coverages which are, in scope and amount, consistent with
coverages customary for distribution activities relating to the Fund. The
Distributor shall notify the Fund upon receipt of any notice of material,
adverse change in the terms or provisions of its insurance coverage. Such
notification shall include the date of change and the reason or reasons
therefor. The Distributor shall notify the Fund of any material claims against
it, whether or not covered by insurance, and shall notify the Fund from time
to time as may be appropriate of the total outstanding claims made by it under
its insurance coverage.
13. Indemnification -- The Fund agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933 Act,
against any loss, liability, claim, damages or expenses (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any Shares, based upon
the grounds that the registration statement, Offering Memorandum, shareholder
reports or other information filed with any governmental authority or provided
by the Fund to the Distributor for dissemination to prospective investors in
accordance herewith (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required to
be stated or necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading. However, the
Fund does not agree to indemnify the Distributor or hold it harmless to the
extent that the statement or omission was made in reliance upon, and in
conformity with, information furnished to the Fund by or on behalf of the
Distributor. In no case (i) is the indemnity of the Fund in favor of the
Distributor or any person indemnified to be deemed to protect the Distributor
or any person against any liability to the Fund or its security holders to
which the Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or negligence in the performance of its duties
or by reason of its reckless disregard of its 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 claim made against the
Distributor or any person indemnified unless the Distributor or person, as the
case may be, shall have notified the Fund in writing of the claim promptly
after the summons or other first written notification giving information of
the nature of the claims shall have been served upon the Distributor or any
such person (or after the Distributor or such person shall have received
notice of service on any designated agent). However, failure to notify the
Fund of any claim shall not relieve the Fund from any liability which it may
have to any person against whom such action is brought otherwise than on
account of its indemnity agreement contained in this paragraph. The Fund shall
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 claims, and
if the Fund elects to assume the defense, the defense shall be conducted by
counsel chosen by the Fund. In the event the Fund elects to assume the defense
of any suit and retain counsel, the Distributor, officers or directors or
controlling person(s) or defendant(s) in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the Fund does not
elect to assume the defense of any suit,
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it will reimburse the Distributor, officers or directors or controlling
person(s) or defendant(s) in the suit, for the reasonable fees and expenses of
any counsel retained by them. The Fund agrees to notify the Distributor
promptly of the commencement of any litigation or proceeding against it or any
of its officers in connection with the issuance or sale of any of the Shares.
The Distributor agrees to indemnify and hold harmless the Fund and each
of its trustees, directors, officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act, against any loss,
liability, claim, damages or expenses (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith) arising
by reason of any person acquiring any Shares, alleging (a) any wrongful act of
the Distributor or any of its employees or (b) that any sales literature,
information, statements or representations used or made by the Distributor or
any of its affiliates or employees, or that the registration statement or
Offering Memorandum, included an untrue statement of a material fact or
omitted to state a material fact required to be stated or necessary in order
to make the statements made, in the light of the circumstances under which
they were made, not misleading, insofar as the statement or omission was made
in reliance upon, and in conformity with, information furnished to the Fund by
or on behalf of the Distributor. In no case (i) is the indemnity of the
Distributor in favor of the Fund or any person indemnified to be deemed to
protect the Fund or any person against any liability to which the Fund or such
person would otherwise be subject by reason of willful misfeasance, bad faith
or negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or person, as the case may be, shall have notified
the Distributor in writing of the claim promptly after the summons or other
first written notification giving information of the nature of the claims
shall have been served upon the Fund or any such person (or after the Fund or
such person shall have received notice of service on any designated agent).
However, failure to notify the Distributor of any claim shall not relieve the
Distributor from any liability which it may have to the Fund or any person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. The Distributor shall 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 claims, and if the Distributor
elects to assume the defense, the defense shall be conducted by counsel chosen
by the Distributor and satisfactory to the Fund, to its officers and to any
controlling person(s) or defendant(s) in the suit. In the event the
Distributor elects to assume the defense of any suit and retain counsel, the
Fund or controlling person(s) or defendant(s) in the suit, shall bear the fees
and expense of any additional counsel retained by them. If the Distributor
does not elect to assume the defense of any suit, it will reimburse the Fund,
officers or controlling person(s) or defendant(s) in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Distributor
agrees to notify the Fund promptly of the commencement of any litigation or
proceedings against it or in connection with the Fund and sale of any of the
Shares.
14. Supplemental Information -- The Distributor and the Fund shall
regularly consult with each other regarding the Distributor's performance of
its obligations under this Agreement. In connection therewith, the Fund shall
submit to the Distributor at a reasonable time in advance of filing with the
SEC reasonably final copies of any amended or supplemented registration
statement (including exhibits) under the 1940 Act; provided, however, that
nothing contained in
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this Agreement shall in any way limit the Fund's right to make or file at any
time such amendments to any registration statement and/or supplements to any
Offering Memorandum, of whatever character, as the Fund may deem advisable,
such right being in all respects absolute and unconditional.
The Distributor acknowledges that the only information provided to it by
the Fund is that contained in the registration statement, the Offering
Memorandum and reports and financial information referred to herein. Neither
the Distributor nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in such
documents and any sales literature or advertisements specifically approved by
appropriate representatives of the Fund.
15. Term -- This Agreement shall become effective as of September ___,
2005, and shall continue until two years from such date and thereafter shall
continue automatically for successive annual periods, provided such
continuance is specifically approved at least annually by the Fund's Board of
Trustees, provided that in either event the continuance is also approved by
the majority of the Trustees of the Fund who are not interested persons (as
defined in the 0000 Xxx) of any party to this Agreement by vote cast in person
at a meeting called for the purpose of voting on such approval. This Agreement
is terminable without penalty on sixty days' written notice by the Fund's
Board of Trustees, by vote of the holders of a majority of the outstanding
voting securities of the Fund or by the Distributor. This Agreement shall
automatically terminate in the event of its assignment (as defined in the 1940
Act).
Upon the termination of this Agreement, the Distributor, at the Fund's
expense and direction, shall transfer to such successor as the Fund shall
specify all relevant books, records and other data established or maintained
by the Distributor under this Agreement.
16. Anti-Money Laundering - The Distributor agrees to maintain an
anti-money laundering program in compliance with Title III of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the "USA Patriot Act") and all applicable laws
and regulations promulgated thereunder. The Distributor confirms that, as soon
as possible, following the request from the Fund, the Distributor will supply
the Fund with copies of the Distributor's anti-money laundering policy and
procedures, and such other relevant certifications and representations
regarding such policy and procedures as the Fund may reasonably request from
time to time.
17. Notice -- Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by (i) telecopier (fax)
or (ii) registered or certified mail, postage prepaid, addressed by the party
giving notice to the other party at the last address furnished by the other
party to the party giving notice:
if to the Fund at:
000 Xxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
if to the Distributor at:
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0000 Xxxxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx, 00000
Attn: General Counsel
or such other telecopier (fax) number or address as may be furnished by one
party to the other.
18. Confidential Information -- The Distributor, its officers, directors,
employees and agents will treat confidentially and as proprietary information
of the Fund all records and other information relative to the Fund and to
prior or present shareholders or to those persons or entities who respond to
the Distributor's inquiries concerning investment in the Fund, and will not
use such records and information for any purposes other than performance of
its responsibilities and duties hereunder. If the Distributor is requested or
required by, but not limited to, depositions, interrogatories, requests for
information or documents, subpoena, civil investigation, demand or other
action, proceeding or process or as otherwise required by law, statute,
regulation, writ, decree or the like to disclose such information, the
Distributor will provide the Fund with prompt written notice of any such
request or requirement so that the Fund may seek an appropriate protective
order or other appropriate remedy and/or waive compliance with this provision.
If such order or other remedy is not sought, or obtained, or waiver not
received within a reasonable period following such notice, then the
Distributor may without liability hereunder, disclose to the person, entity or
agency requesting or requiring the information, that portion of the
information that is legally required in the reasonable opinion of the
Distributor's counsel.
19. Limitation of Liability -- The Distributor agrees that the
obligations assumed by the Fund under this contract shall be limited in all
cases to the Fund and its assets. The Distributor agrees that it shall not
seek satisfaction of any such obligation from the shareholders or any
individual shareholder of the Fund. Nor shall the Distributor seek
satisfaction of any such obligation from the Trustees, officers or any
individual Trustee or officer of the Fund.
Any obligations of the Fund entered into in the name or on behalf thereof
by any of the Trustees or officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees or officers, shareholders, or representatives of the Fund personally,
but bind only the Fund property, and all persons dealing with the Fund must
look solely to the Fund property for the enforcement of any claims against the
Fund.
20. Miscellaneous -- Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed, interpreted, and enforced in
accordance with and governed by the laws of the State of Colorado. The
captions in this Agreement are included for convenience of reference only and
in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. This Agreement may not be changed, waived,
discharged or amended except by written instrument that shall make specific
reference to this Agreement and which shall be signed by the party against
which enforcement of such change, waiver, discharge or amendment is sought.
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
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All activities by the Distributor and its agents and employees as
distributor of the Shares shall comply with all applicable laws, rules and
regulations including, without limitation, all rules and regulations made or
adopted by the SEC or any securities association registered under the Exchange
Act.
The Distributor will promptly transmit any orders received by it for
purchase, redemption or exchange of the Shares to the Fund's transfer agent.
IN WITNESS WHEREOF, the Fund has executed this instrument in its name and
behalf, and the Distributor has executed this instrument in its name and
behalf, as of the date and year first above written.
THE XXXXXXXX MULTI-STRATEGY TRUST ALPS DISTRIBUTORS, INC.
By: By:
-------------------------------- --------------------------------
Name: Name: Xxxxxx X. May
Title: Title: Managing Director
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