Exhibit (h)(1)
ADVANTAGE ADVISERS MULTI-SECTOR FUND I
Shares of Beneficial Interest
FORM OF DISTRIBUTION AGREEMENT
------------------------------
[DATE]
CIBC World Markets Corp.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned, Advantage Advisers Multi-Sector Fund I, a
Delaware business trust (the "Fund"), and Advantage Advisers, L.L.C., a
Delaware limited liability company (the "Investment Adviser"), address you
as distributor ("Distributor") as agent for the offer and sale from time to
time of shares of beneficial interest, $.001 par value per share (the
"Shares"), of the Fund to the public.
The Fund and the the Investment Adviser wish to confirm as follows
their agreements with you in connection with the distribution of the
Shares.
The Fund has entered into an investment advisory agreement with
the Investment Adviser dated January [ ], 2002 and a Custody Services
Agreement with PFPC Trust Company dated January [ ], 2002 and such
agreements are herein referred to as the "Advisory Agreement" and the
"Custody Agreement," respectively. Collectively, the Advisory Agreement and
the Custody Agreement are herein referred to as the "Fund Agreements." This
Distribution Agreement is herein referred to as the "Agreement."
1. Registration Statement and Prospectus. The Fund has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended
(the "1933 Act"), the Investment Company Act of 1940, as amended (the "1940
Act"), and the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Rules and Regulations") and the 1940 Act (the "1940 Act
Rules and Regulations" and together with the 1933 Act Rules and
Regulations, the "Rules and Regulations") a registration statement on Form
N-2 (File Nos. 333-67926 and 811-10473 under the 1933 Act and the 1940 Act,
respectively) (the "registration statement"), including a prospectus and
statement of additional information relating to the offering of up to
16,000,000 Shares in connection with the initial offering of Shares (the
"Initial Offering"), and a notification of registration of the Fund as an
investment company under the 1940 Act on Form N-8A (the "1940 Act
Notification"), and may pursuant to the Rules and Regulations prepare and
file a post-effective amendment to the registration statement relating to
additional Shares to be offered in the Initial Offering pursuant to Rule
462(b) of the 1933 Act Rules and Regulations (a "Rule 462 amendment") [and
from time to time may pursuant to the Rules and Regulations prepare and
file one or more post-effective amendments to the registration statement
relating to additional Shares to be offered in a continuous offering (the
"Continuous Offering") pursuant to Rule 415(a)(xi) of the 1933 Act Rules
and Regulations (a "Rule 415 amendment"). The term "Registration Statement"
as used in this Agreement means the registration statement (including all
financial statements and schedules and notes thereto and exhibits (whether
included therewith or incorporated by reference), as amended at the time it
becomes effective under the 1933 Act or, if the registration statement
became effective under the 1933 Act prior to the execution of this
Agreement, as amended or supplemented thereto, prior to the execution of
this Agreement and includes any information deemed to be included by Rule
430A under the 1933 Act Rules and Regulations. If it is contemplated, at
the time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed under the 1933 Act and must be
declared effective before the offering of Shares may commence, the term
"Registration Statement" as used in this Agreement means the Registration
Statement as amended by said post-effective amendment. If the Fund has
filed a Rule 462 amendment, then the reference herein to the term
Registration Statement shall include the registration statement as amended
by such Rule 462 amendment. If the Fund files any Rule 415 amendment, then
the reference herein to the term Registration Statement shall include the
registration statement as amended by any Rule 415 amendment. The term
"Prospectus" as used in this Agreement means the prospectus and statement
of additional information in the forms included in the Registration
Statement at the time it originally was declared effective or, if the
prospectus and statement of additional information included in the
Registration Statement omit information in reliance on Rule 430A under the
1933 Act Rules and Regulations and such information is included in a
prospectus and statement of additional information filed with the
Commission pursuant to Rule 497(h) under the 1933 Act Rules and
Regulations, the term "Prospectus" as used in this Agreement means the
prospectus and statement of additional information in the forms included in
the Registration Statement at the time it originally was declared effective
as supplemented by the addition of the information contained in the
prospectus (including the statement of additional information) filed with
the Commission pursuant to Rule 497(h). After the commencement of the
Continuous Offering, the term "Prospectus" as used in this Agreement means
the prospectus and statement of additional information in the forms
included in the Fund's then current Registration Statement. The term
"Prepricing Prospectus" as used in this Agreement means the prospectus and
statement of additional information subject to completion in the form
included in the registration statement at the time of the initial filing of
the registration statement with the Commission and as such prospectus and
statement of additional information shall have been amended from time to
time prior to the date of the Prospectus for the initial offering of
Shares, together with any other prospectus (including any other statement
of additional information) relating to the Fund other than the Prospectus.
The terms "registration statement," "Registration Statement," "Prospectus"
and "Prepricing Prospectus" shall also include any financial statements and
schedules and notes thereto and other information included or incorporated
by reference therein.
The Fund has furnished the Distributor with copies of such
registration statement, each amendment to such registration statement filed
with the Commission through the date hereof and each Prepricing Prospectus
through the date hereof and agrees to provide the Distributor with the
Registration Statement and the Prospectus as soon practicable after the
Registration Statement is declared effective together with any Rule 462
amendment. In addition, the Fund agrees to provide the Distributor with any
Rule 415 amendment (as soon practicable after the filing thereof with the
Commission.
2. Appointment as Distributor.
(a) The Fund hereby appoints the Distributor to act as its
principal distributor of Shares in jurisdictions wherein Shares may legally
be offered for sale.
(b) The Distributor accepts such appointment as principal
distributor and agrees to render such services and to assume the
obligations herein set forth for the compensation herein provided. The
Distributor shall for all purposes herein provided unless otherwise
specified 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. The Distributor, by separate agreement
with the Fund, may also serve the Fund in other capacities. The services of
the Distributor to the Fund under this Agreement are not to be deemed
exclusive, and the Distributor shall be free to render similar services or
other services to others so long as its services hereunder are not impaired
thereby. The Distributor represents that it is a registered security dealer
and a member in good standing of the National Association of Securities
Dealers, Inc.
(c) In carrying out its duties and responsibilities hereunder,
the Distributor may, pursuant to separate written contracts, delegate its
responsibilities as distributor to various brokers or dealers selected by
it as a selling agent (each, a "Selling Agent") to provide advertising,
promotion and other distribution services contemplated hereunder directly
to or for existing and potential shareholders who may be clients of such
Selling Agents. Such Selling Agents shall at all times be deemed to be
independent contractors retained by the Distributor and not the Fund.
(d) During any period that the Fund is conducting an offering
of Shares, including during the Initial Offering, the Distributor shall use
its best efforts with reasonable promptness to sell such authorized Shares
of the Fund remaining unissued as from time to time shall be effectively
registered under the 1933 Act and offered by the Fund, 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 then
currently effective Registration Statement (which shall include the
prospectus and the statement of additional information and any supplements
or amendments thereto) and the Fund's organizational documents; provided,
however, that the Distributor may in its discretion refuse to accept orders
for Shares from any particular prospective investor. Without limiting the
foregoing, the Distributor agrees to sell Shares only to investors who are
"Qualified Clients" as that term is defined in the Prospectus, and to
impose this requirement as a condition of the sales activity of any Selling
Agent with whom the Distributor enters into a master selling and servicing
agreement or other selling group arrangement with respect to the Shares.
(e) The Distributor shall sell Shares only to investors or
through qualified Selling Agents in such manner not inconsistent with the
provisions hereof, the Fund's then currently effective Registration
Statement and any master selling and servicing agreement as the Distributor
may determine from time to time[, provided that no Selling Agent or other
person shall be appointed or authorized to act as agent of the Fund without
the prior consent of the Fund].
3. Delivery of Shares and Payments Therefor.
(a) The Distributor shall order shares of the Fund from the
Fund only to the extent that it (or the Selling Agents) shall have received
purchase orders therefor. The Distributor will not make, or authorize
Selling Agents or others to make: (a) any short sales of Shares; or (b) any
sales of such Shares to any Board member or officer of the Fund or to any
officer or Board member of the Distributor 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 Fund's then currently effective
Registration Statement relating to the sale of such Shares. In selling
Shares for the account of the Fund, the Distributor will in all respects
conform to the requirements of all state and federal laws and the Conduct
Rules of the National Association of Securities Dealers, Inc. (the "NASD")
relating to such sales, and the Distributor will observe and be bound by
all the provisions of the Fund's then effective Registration Statement and
the Fund's Organizational Documents (and of any fundamental policies
adopted by the Fund pursuant to the 1940 Act) which at the time in any way
require, limit, restrict, prohibit or otherwise regulate any action on the
part of the Distributor hereunder.
(b) Delivery to investors in the Fund of, and payment to the
Fund for, Shares shall be made by means of the National Securities Clearing
Corporation ("NSCC") Fund Settlement, Entry and Registration Verification
System (the "Fund/SERV System") (or by another mutually agreeable means)
and shall be effected by the settlement of trade details that are
transmitted to the Fund/SERV System by the Fund on the one hand and the
Distributor or any Selling Agent on the other in accordance with the
procedures of the Fund/SERV System on the date required by the Fund/SERV
System to effect the settlement of the transactions contemplated by this
Agreement on the closing date for (i) the Initial Offering (the "Initial
Closing Date") or (ii) with respect to the closing of additional sales of
Shares during the Continuous Offering, on the closing date determined by
the Fund with respect to such closing (each such date, an "Additional
Closing Date," each of which may, together with the Initial Closing Date,
be referred to as a "Closing Date"). The Initial Closing Date shall be 9:00
a.m. New York City time on March [6], 2002 at the office of CIBC World
Markets Corp., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
another mutually agreeable facility. The Initial Closing Date may be varied
by agreement between you and the Fund.
(c) The Shares shall be registered in such names and in such
denominations as the Distributor or any Selling Agent shall request, by
notice to the Escrow Agent in accordance with the procedures of the
Fund/SERV System.
(d) Shares offered for sale or sold by the Distributor shall be
so offered or sold at a price per Share determined in accordance with the
Registration Statement. The price the Fund shall receive for all Shares
purchased from it shall be the net asset value used in determining the
public offering price applicable to the sale of such Shares, except with
respect to Shares sold on the Initial Closing Date, which shall be offered
and sold at the price set forth in the Prospectus relating to the Initial
Offering. Any excess of the sales price over the public offering price of
the Shares sold by the Distributor shall be retained by the Distributor as
a commission for its services hereunder. The Distributor may compensate
Selling Agents for sales of Shares at the commission levels provided in a
Written Communication from time to time. The Distributor shall also receive
any services fees payable by the Fund, as provided in the Fund's service
plan or by the Investment Adviser with respect to Shares as provided in the
Registration Statement (or any supplement or amendment thereto).
4. Agreements of the Fund and the Investment Adviser. The Fund and
the Investment Adviser, jointly and severally, agree with the Distributor
as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective under the 1933 Act before the
Initial Offering of Shares may commence, the Fund will use its best efforts
to cause the Registration Statement or such post-effective amendment to
become effective under the 1933 Act as soon as practicable. If the
Registration Statement has become effective and the Prospectus contained
therein omits certain information at the time of effectiveness pursuant to
Rule 430A of the 1933 Act Rules and Regulations, the Fund will file a
prospectus including such information pursuant to Rule 497(h) of the 1933
Act Rules and Regulations, as promptly as practicable, but no later than
the second business day following the date the Prospectus is first used
after the effective date of the Registration Statement. If the Registration
Statement has become effective and the Prospectus contained therein does
not so omit such information, the Fund will file a Prospectus or
certification pursuant to Rule 497(c) or (j), as the case may be, of the
1933 Act Rules and Regulations as promptly as practicable, but no later
than the fifth business day following the date of the later of the
effective date of the Registration Statement or the commencement of the
Initial Offering after the effective date of the Registration Statement.
The Fund will advise you promptly and, if requested by you, will confirm
such advice in writing (i) when the Registration Statement or such
post-effective amendment has become effective, (ii) when the Prospectus has
been filed pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules and
Regulations or (iii) when the certification permitted pursuant to Rule
497(j) of the 1933 Act Rules and Regulations has been filed, whichever is
applicable.
(b) The Fund,will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request made by the
Commission for amendment of or a supplement to the Fund's then effective
Registration Statement or the Prospectus (or any amendment or supplement to
any of the foregoing) or for additional information, (ii) of the issuance
by the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official of any
order suspending the effectiveness of the Fund's then effective
Registration Statement, prohibiting or suspending the use of the Prospectus
or any sales material (as hereinafter defined), of any notice pursuant to
Section 8(e) of the 1940 Act, of the suspension of qualification of the
Shares for offering or sale in any jurisdiction, or the initiation or
contemplated initiation of any proceeding for any such purposes, (iii) of
receipt by the Fund, any affiliate of the Fund or any representative or
attorney of the Fund of any other material communication from the
Commission and (iv) within the period of time referred to in paragraph (f)
below, of any material, adverse change in the condition (financial or
other), general affairs, business, prospects, properties, net assets or
results of operations of the Fund or any event which should reasonably be
expected to have a material adverse effect on the ability of the Investment
Adviser to perform its obligations under this Agreement and the Advisory
Agreement (other than as a result of changes in market conditions
generally) or of the happening of any event which makes any statement of a
material fact made in the Fund's then effective Registration Statement, the
Prospectus or any sales material (as hereinafter defined) (or any amendment
or supplement to any of the foregoing) untrue or which requires the making
of any additions to or changes in the Fund's then effective Registration
Statement, the Prospectus or any sales material (or any amendment or
supplement to any of the foregoing) in order to state a material fact
required by the 1933 Act, the 1940 Act or the Rules and Regulations to be
stated therein or necessary in order to make the statements therein (in the
case of a prospectus or any sales material, in light of the circumstances
under which they were made) not misleading or of the necessity to amend or
supplement the Fund's then effective Registration Statement, the Prospectus
or any sales material (or any amendment or supplement to any of the
foregoing) to comply with the 1933 Act, the 1940 Act, the Rules and
Regulations or any other law or order of any court or regulatory body. [If
at any time the Commission shall issue any order suspending the
effectiveness of the Fund's then effective Registration Statement,
prohibiting or suspending the use of the Prospectus or any sales material
(or any amendment or supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any jurisdiction, the
Fund and the Investment Adviser, upon your request, will use their best
efforts to obtain the withdrawal of such order at the earliest possible
time. If at any time the NASD, any national securities exchange, any state
securities commission, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official shall
issue any order suspending the effectiveness of the Fund's then effective
Registration Statement, prohibiting or suspending the use of the Prospectus
or any sales material (or any amendment or supplement to any of the
foregoing) or suspending the qualification of the Shares for offering or
sale in any jurisdiction, the Fund and the Investment Adviser, upon your
request, will use their best efforts to obtain the withdrawal of such order
at the earliest possible time.]
(c) The Fund will furnish to you, without charge, a signed copy
of the registration statement and the 1940 Act Notification as originally
filed with the Commission and of each amendment thereto, including
financial statements and all exhibits thereto and will also furnish to you,
without charge, such number of conformed copies of the registration
statement as originally filed and of each amendment thereto, with or
without exhibits, as you may reasonably request.
(d) Prior to the Initial Closing Date, the Fund will not (i)
file any amendment to the registration statement or the Registration
Statement or make any amendment or supplement to the Prospectus or any
sales material (or any amendment or supplement to any of the foregoing) of
which you shall not previously have been advised or to which you shall
reasonably object within a reasonable time after being so advised or (ii)
so long as a Prospectus is required to be delivered in connection with
sales by any broker or dealer, file any information, documents or reports
pursuant to the 1933 Act, the 1940 Act or the Securities Exchange Act of
1934, as amended (the "1934 Act"), without delivering a copy of such
information, documents or reports to you prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the
Fund has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of any Prospectus. The Fund
consents to the use, in accordance with the provisions of the 1933 Act and
with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by you and by Selling Agents, the Prospectus so
furnished by the Fund.
(f) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time, for such period as a
prospectus is required by the 1933 Act to be delivered in connection with
sales of Shares by you or any Selling Agent, the Fund will expeditiously
deliver to you and each Selling Agent, without charge, as many copies of
the Prospectus (and of any amendment or supplement thereto) as you may
reasonably request. The Fund consents to the use of the Prospectus (and of
any amendments or supplements thereto) in accordance with the provisions of
the 1933 Act and with the securities or Blue Sky laws of the jurisdictions
in which the Shares are offered by you and by all Selling Agents through
whom Shares may be sold, both in connection with the offering or sale of
the Shares and for such period of time thereafter as the Prospectus is
required by law to be delivered in connection with sales of Shares by you
or any Selling Agent. If during such period of time any event shall occur
that in the judgment of the Fund or you is required to be set forth in the
Registration Statement or the Prospectus (as then amended or supplemented)
or should be set forth therein in order to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they
were made) not misleading or if it is necessary to supplement or amend the
Registration Statement or the Prospectus to comply with the 1933 Act, the
1940 Act, the Rules and Regulations or any other law, rule or regulation,
the Fund will forthwith notify you of such event, and, if requested by you,
prepare and, subject to the provisions of paragraph (d) above, promptly
file with the Commission an appropriate amendment or supplement thereto and
will expeditiously furnish to you and any Selling Agent, without charge,
such number of copies thereof as they may reasonably request. In the event
that the Registration Statement or the Prospectus is to be amended or
supplemented, the Fund, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) Subject to and in compliance with the description contained
in the Prospectus and the terms of any selling and servicing agreement that
provides, among other things, for such Selling Agent to provide ongoing
shareholder services to customers of such Selling Agent that hold Shares,
the Fund and the Investment Adviser will each pay the ongoing servicing
fees (in accordance with the descriptions thereof in the Prospectus).
(h) The Fund will cooperate with you in connection with the
registration or qualification of Shares for offering and sale by you and
the several Selling Agents under the securities or Blue Sky laws of such
jurisdictions within the United States as you (or they) may designate and
will file such consents to service of process or other documents necessary
or appropriate in order to effect such registration or qualification;
provided that in no event shall the Fund be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
(i) The Fund will make generally available to its security
holders an earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which earnings statement shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 of the
1933 Act Rules and Regulations.
(j) The Fund will comply with the undertaking set forth in the
last sentence of Item 33 of Part C of the Registration Statement.
(k) Until the fifth anniversary of the termination of this
Agreement, the Fund will furnish or will have furnished to you (i) as soon
as available, a copy of each report of the Fund mailed to shareholders or
filed with the Commission and (ii) from time to time such other information
concerning the Fund as you may reasonably request.
(l) [If this Agreement shall terminate or be terminated after
its execution pursuant to any provisions hereof (otherwise than by notice
given by you terminating this Agreement pursuant to Section 11 hereof or by
notice given by the Fund terminating this Agreement pursuant to Section 10
hereof) or if this Agreement shall be terminated by you because of (i) any
failure or refusal on the part of the Fund or the Investment Adviser to
comply with any term or fulfill any of the conditions of this Agreement
required to be complied with or fulfilled by them, or (ii) the
non-occurrence of any other condition in Section 9, the Fund and the
Investment Adviser, jointly and severally, agree to reimburse you for all
out-of-pocket expenses incurred by you in connection herewith and not
previously reimbursed.]
(m) The Fund will direct the investment of the net proceeds of
the Initial Offering (i) in accordance with the description set forth in
the Prospectus (as amended or supplemented) and (ii) in such a manner so as
to comply with the investment objectives, policies and restrictions of the
Fund as described in the Prospectus (as amended or supplemented).
(n) The Fund will file the requisite copies of the Prospectus
with the Commission in a timely fashion pursuant to Rule 497(c) or Rule
497(h) of the 1933 Act Rules and Regulations, whichever is applicable or,
if applicable, will file in a timely fashion the certification permitted by
Rule 497(j) of the 1933 Act Rules and Regulations and will advise you of
the time and manner of such filing.
(o) [Except as provided in this Agreement or pursuant to any
dividend reinvestment plan of the Fund, the Fund will not sell, contract to
sell or otherwise dispose of, any Shares or any securities convertible into
or exercisable or exchangeable for Shares or grant any options or warrants
to purchase Shares, for a period of 120 days after the Initial Closing],
without the prior written consent of the Distributor.
(p) Except as stated in this Agreement and in the Prospectus,
neither the Fund nor the Investment Adviser has taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price
of the Shares.
(q) The Fund will direct the investment of the proceeds of the
offering of the Shares so as to comply with the requirements of Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"), to qualify
as a regulated investment company under the Code.
5. Representations and Warranties of the Fund and the Adviser.
The Fund and the Investment Adviser, jointly and severally, represent and
warrant to you that:
(a) The registration statement in the form in which it became
or becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, the Prospectus and
any amendment or supplement thereto when filed with the Commission under
Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act
Notification when originally filed with the Commission and any amendment or
supplement thereto when filed with the Commission complied or will comply
in all material respects with the provisions of the 1933 Act, the 1940 Act
and the Rules and Regulations and each of the Registration Statement and
the Prospectus (or any supplement or amendment to either of them) did not
or will not at any time contain 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 (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; except that this
representation and warranty does not apply to statements in or omissions
from the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) made in reliance upon and in conformity with
information relating to you or any Selling Agent furnished to the Fund in
writing by or on behalf of you or such Selling Agent through you expressly
for use therein.
(b) All the currently outstanding Shares have been duly
authorized and validly issued, are fully paid and nonassessable and are
free of any preemptive or similar rights, any Shares to be sold hereunder
have been (or will have been) duly authorized and, when issued and
delivered to the purchasers of the Shares against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights and the Shares
conform to the description thereof in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them). Except for
Shares to be sold hereunder and any shares issued in accordance with
Section 14(a) of the 1940 Act, no other Shares are issued or outstanding
and the capitalization of the Fund conforms in all respects to the
description thereof in the Registration Statement or the Prospectus (or any
amendment or supplement to either of them).
(c) The Fund has been duly formed and is validly existing in
good standing as a business trust under the laws of the State of Delaware,
with full trust power and authority to own its properties and to conduct
its business as described in the Registration Statement and the Prospectus
(and any amendment or supplement to either of them) and is duly registered
and qualified to conduct business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or to qualify does not have a material, adverse
effect on the condition (financial or other), general affairs, business,
properties, net assets or results of operations of the Fund. The Fund has
no subsidiaries.
(d) There are no legal or governmental proceedings pending or,
to the knowledge of the Fund, threatened, against the Fund, or to which the
Fund or any of its properties is subject, that are required to be described
in the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) but are not described as required and there
are no agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them) or to be
filed as an exhibit to the Registration Statement that are not described or
filed as required by the 1933 Act, the 1940 Act or the Rules and
Regulations.
(e) The Fund is not in violation of its amended and restated
agreement and declaration of trust ("Agreement and Declaration of Trust"),
by-laws ("By-Laws") or other organizational documents or any law,
ordinance, administrative or governmental rule or regulation applicable to
the Fund or of any decree of the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or
any other governmental, regulatory, self-regulatory or administrative
agency or any other agency or any body or official having jurisdiction over
the Fund or in material breach or default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any agreement, indenture, lease
or other instrument to which the Fund is a party or by which it or any of
its properties may be bound.
(f) Except in the event that this Agreement is executed prior
to the date the Registration Statement is initially declared effective (in
which case you acknowledge that the Commission must declare the
Registration Statement effective), neither the issuance and sale of the
Shares contemplated by this Agreement, the execution, delivery or
performance of this Agreement or any of the Fund Agreements by the Fund,
nor the consummation by the Fund of the transactions contemplated hereby or
thereby with respect to the Initial Offering (i) requires any consent,
approval, authorization or order of or registration or filing with the
Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory, body,
administrative agency or other governmental body, agency or official having
jurisdiction over the Fund (except compliance with the securities or Blue
Sky laws of various jurisdictions which have been or will be effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of the Agreement and Declaration of
Trust, By-Laws or other organizational documents of the Fund or (ii) (A)
conflicts or will conflict with or constitutes or will constitute a
material breach of or a default under any agreement, indenture, lease or
other instrument to which the Fund is a party or by which it or any of its
properties may be bound or violates or (B) will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable to
the Fund or any of its properties or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Fund pursuant to the terms of any agreement or instrument to which
it is a party or by which it may be bound or to which any of the property
or assets of the Fund is subject. As of the date hereof, the Fund is not
subject to any order of any court or of any arbitrator, governmental
authority or administrative agency.
(g) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), except as otherwise stated therein, (i) there has been
no material, adverse change in the condition (financial or other), general
affairs, business, properties, net assets or results of operations of the
Fund or business prospects (other than as a result of a change in the
financial markets generally) of the Fund, whether or not arising in the
ordinary course of business, (ii) there have been no transactions entered
into by the Fund other than those in the ordinary course of its business as
described in the Prospectus (and any amendment or supplement thereto) and
(iii) there has been no dividend or distribution of any kind declared, paid
or made by the Fund on any class of its shares of beneficial interest.
(h) The accountants, Xxxxx & Young LLP, who have audited or
shall audit the statement of assets and liabilities included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), have advised the Board of Trustees of the Fund and the Investment
Adviser that they are an independent public accounting firm as required by
the 1933 Act, the 1940 Act and the Rules and Regulations.
(i) The statement of assets and liabilities, together with its
related schedules (if any) and notes, included in the Registration
Statement or the Prospectus (or any amendment or supplement thereto)
present fairly the financial position of the Fund on the basis stated in
the Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved except as
disclosed therein; and the other financial and statistical information and
data included in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) are accurately derived from such financial
statements and the books and records of the Fund.
(j) The Fund[, subject to the Registration Statement having
been declared effective and the filing of the Prospectus under Rule 497
under the 1933 Act Rules and Regulations,] has taken all required action
under the 1933 Act, the 1940 Act and the Rules and Regulations to make the
Initial Offering and consummate the sale of the Shares as contemplated by
this Agreement.
(k) The execution and delivery of and the performance by the
Fund of its obligations under this Agreement and the Fund Agreements have
been duly and validly authorized by the Fund and this Agreement and the
Fund Agreements have been duly executed and delivered by the Fund and each
constitutes the valid and legally binding agreement of the Fund,
enforceable against the Fund in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or state
securities laws and subject to the qualification that the enforceability of
the Fund's obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and by general equitable
principles.
(l) Except as disclosed in or contemplated by the Registration
Statement or the Prospectus (or any amendment or supplement to either of
them), subsequent to the respective dates as of which such information is
given in the Registration Statement and the Prospectus (and any amendment
or supplement to either of them), the Fund has not incurred any liability
or obligation, direct or contingent or entered into any transaction, not in
the ordinary course of business, and there has not been any change in the
shares of beneficial interest or material increase in the short-term debt
or long-term debt of the Fund or any material, adverse change or any
development involving or which should reasonably be expected to involve a
material, adverse change in the condition (financial or other), general
affairs, business, properties, net assets or results of operations of the
Fund or its capitalization, or the incurrence of any debt by, the Fund.
(m) The Fund has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of
the Shares in the Initial Offering, will not distribute to the public any
offering material in connection with the offering and sale of the Shares
other than the Registration Statement, the Prospectus and the sales
material filed with the NASD on August [ ], 2001, as amended or
supplemented.
(n) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto); the Fund has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows or, after notice or lapse of
time, would allow, revocation or termination thereof or results in any
other material impairment of the rights of the Fund under any such permit,
subject in each case to such qualification as may be set forth in the
Prospectus (and any amendment or supplement thereto); and, except as
described in the Prospectus (and any amendment or supplement thereto), none
of such permits contains any restriction that is materially burdensome to
the Fund.
(o) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with the Board of Trustees' general
or specific authorization and with the investment policies and restrictions
of the Fund and the applicable requirements of the 1940 Act, the 1940 Act
Rules and Regulations and the Code; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles, to calculate net asset value and
fee accruals, to maintain accountability for assets and to maintain
material compliance with the books and records requirements under the 1940
Act and the 1940 Act Rules and Regulations; (iii) access to assets is
permitted only in accordance with the Board of Trustees' general or
specific authorization; and (iv) the recorded account for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(p) The conduct by the Fund of its business (as described in
the Prospectus) does not require it to be the owner, possessor or licensee
of any patents, patent licenses, trademarks, service marks or trade names
which it does not own, possess or license.
(q) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), the Fund has not taken and will
not take, directly or indirectly, any action designed to or which should
reasonably be expected to cause or result in or which will constitute
stabilization or manipulation of the price of the Shares in violation of
federal securities laws and the Fund is not aware of any such action taken
or to be taken by any affiliates of the Fund.
(r) The Fund is duly registered under the 1940 Act and Rules
and Regulations as a closed-end, non-diversified management investment
company and the 1940 Act Notification has been duly filed with the
Commission and, at the time of filing thereof and at the time of filing any
amendment or supplement thereto, conformed in all material respects with
all applicable provisions of the 1940 Act and the Rules and Regulations; no
order of suspension or revocation of such registration under the 1940 Act
and the Rules and Regulations has been issued or proceedings therefor
initiated or threatened by the Commission. The provisions of the Agreement
and Declaration of Trust and Bylaws, and the investment policies and
restrictions described in each of the Registration Statement and the
Prospectus, comply in all material respects with the requirements of the
1940 Act and the Rules and Regulations.
(s) All advertising, sales literature or other promotional
material (including "prospectus wrappers" "broker kits," "road show slides"
and "road show scripts" authorized in writing by or prepared by the Fund
for use in connection with the offering and sale of the Shares
(collectively, "Fund sales material")) complied and comply in all respects
with the applicable requirements of the 1933 Act, the 1933 Act Rules and
Regulations and the rules and interpretations of the NASD and, if required
to be filed with the NASD under the NASD's conduct rules, were so filed and
no such Fund sales material, when read together with the Prospectus,
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(t) This Agreement and each of the Fund Agreements complies in
all material respects with all applicable provisions of the 1933 Act, the
1940 Act, the Rules and Regulations, the Advisers Act of 1940, as amended
(the "Advisers Act"), and the rules and regulations of the Commission
promulgated under the Investment Advisers Act (the "Advisers Act Rules and
Regulations").
(u) No holder of any security of the Fund has any right to
require registration of any Shares, or any other security of the Fund,
because of the filing of the registration statement or consummation of the
transactions contemplated by this Agreement.
6. Representations and Warranties of the Investment Adviser.
The Investment Adviser represents and warrants to you as follows:
(a) The Investment Adviser is a limited liability company duly
formed and validly existing in good standing under the laws of the State of
Delaware, with full limited liability company power and authority to own,
lease and operate its properties and to conduct its business as described
in each of the Registration Statement and the Prospectus (or any amendment
or supplement to either of them) and is duly registered and qualified to
conduct business and is in good standing in each jurisdiction or place
where the nature of its properties or conduct of its business requires such
registration or qualification, except where the failure so to register or
to qualify would not have a material, adverse affect on the condition
(financial or other), general affairs, business, properties, net assets or
results of operations of the Fund.
(b) The Investment Adviser is [or will be prior to the Initial
Closing Date] duly registered with the Commission as an investment adviser
under the Investment Advisers Act and is not prohibited by the Investment
Advisers Act, the 1940 Act, the Investment Advisers Act Rules and
Regulations or the 1940 Act Rules and Regulations from acting under the
Investment Advisory Agreement for the Fund as contemplated by the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them). There does not exist any proceeding which could reasonably
expected to have a material adverse affect on the registration of the
Investment Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or,
to the knowledge of the Investment Adviser, threatened against the
Investment Adviser, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement to either of
them) but are not described as required or that could reasonably be
expected to result in any material, adverse change in the condition
(financial or other), properties, net assets or results of operations of
the Investment Adviser or that may have a material, adverse effect on the
ability of the Investment Adviser to perform its obligations under this
Agreement or the Investment Advisory Agreement.
(d) Neither the execution, delivery or performance of this
Agreement or the Advisory Agreement by the Investment Adviser, nor the
consummation by the Investment Adviser of the transactions contemplated
hereby or thereby (i) [except for the completion of the Investment
Adviser's registration with the Commission under the Investment Advisers
Act], requires the Investment Adviser to obtain any consent, approval,
authorization or other order of, or registration or filing with, the
Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official having
jurisdiction over the Investment Adviser or conflicts or will conflict with
or constitutes or will constitute a breach of or a default under, the
certificate of incorporation or bylaws, or other organizational documents
of the Investment Adviser or (ii) conflicts or will conflict with or
constitutes or will constitute a material breach of or a default under, any
material agreement, indenture, lease or other instrument to which the
Investment Adviser is a party or by which the Investment Adviser or any of
its properties may be bound, or materially violates or will materially
violate any material statute, law, regulation or judgment, injunction,
order or decree applicable to the Investment Adviser or any of its
properties or will result in the creation or imposition of any material
lien, charge or encumbrance upon any property or assets of the Investment
Adviser pursuant to the terms of any agreement or instrument to which it is
a party or by which it may be bound or to which any of the property or
assets of the Investment Adviser is subject, except in any case under
clause (i) or (ii) as should not reasonably be expected to have a material
adverse effect on the ability of the Investment Adviser to perform its
obligations under this Agreement and the Investment Advisory Agreement. The
Investment Adviser is not subject to any order of any court or of any
arbitrator, governmental authority or administrative agency.
(e) The Investment Adviser has full power and authority to
enter into this Agreement and the Advisory Agreement, the execution and
delivery of, and the performance by the Investment Adviser of its
obligations under, this Agreement and the Advisory Agreement have been duly
and validly authorized by the Investment Adviser and this Agreement and the
Advisory Agreement have been duly executed and delivered by the Investment
Adviser and constitute the valid and legally binding agreements of the
Investment Adviser, enforceable against the Investment Adviser in
accordance with their terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws and subject to
the qualification that the enforceability of the Investment Adviser's
obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles whether enforcement is considered in a proceeding in
equity or at law.
(f) The Investment Adviser has the financial resources
necessary for the performance of its services and obligations as
contemplated in the Registration Statement or the Prospectus (or any
amendment or supplement to either of them) or under this Agreement or the
Investment Advisory Agreement.
(g) The description of the Investment Adviser and its business,
and the statements attributable to the Investment Adviser, in the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them) complied and comply in all material respects with the
provisions of the 1933 Act, the 1940 Act, the Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations and did not and will
not contain 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 (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(h) Since the date as of which information is given in the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them), except as otherwise stated therein, (i) there has been no
material adverse change in the condition (financial or other), business,
properties, net assets or results of operations or business prospects of
the Investment Adviser, whether or not arising from the ordinary course of
business and (ii) there have been no transactions entered into by the
Investment Adviser which are material to the Investment Adviser other than
those in the ordinary course of its business as described in the
Prospectus.
(i) Upon the registration of the Investment Adviser with the
commission under the Investment Advisers Act, the Investment Adviser has or
will have all such licenses, permits and authorizations of governmental or
regulatory authorities ("Adviser permits") as are necessary to own its
property and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto); the Investment
Adviser has fulfilled and performed all its material obligations with
respect to such Adviser permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the
Investment Adviser under any such Adviser permit.
(j) This Agreement and the Advisory Agreement each comply in
all material respects with all applicable provisions of the 1940 Act, the
1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules
and Regulations.
(k) Except as stated in this Agreement, the Registration
Statement or the Prospectus (or in any amendment or supplement to any of
the foregoing), the Investment Adviser has not taken and will not take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in or which will constitute stabilization or
manipulation of the price of the Shares or of any securities issued by the
Fund to facilitate the sale or resale of the Shares, in each case, in
violation of federal securities laws and the Investment Adviser is not
aware of any such action taken or to be taken by any affiliates of the
Investment Adviser.
(l) In the event that the Fund or the Investment Adviser makes
available any promotional materials intended for use only by qualified
broker-dealers and registered representatives thereof by means of an
Internet web site or similar electronic means, the Investment Adviser will
install and maintain pre-qualification and password-protection or similar
procedures which are reasonably designed to effectively prohibit access to
such promotional materials by persons other than qualified broker-dealers
and registered representatives thereof.
(m) All advertising, sales literature or other promotional
material (including "prospectus wrappers," "broker kits," "road show
slides," and "road show scripts" authorized in writing by or prepared by or
for the Fund or the Investment Adviser for use in connection with the
offering and sale of the Shares (collectively, "sales material")) complied
and comply in all respects with the applicable requirements of the 1933
Act, the 1933 Act Rules and Regulations and the rules and interpretations
of the NASD and, if required to be filed with the NASD under the NASD's
conduct rules, were so filed, and no such sales material, when read
together with the Prospectus, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
7. Indemnification and Contribution.
(a) The Fund and the Investment Adviser, jointly and severally,
agree to indemnify and hold harmless you and each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act, from and against any and all losses, claims,
damages, liabilities and expenses, joint or several (including reasonable
costs of investigation), arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, any Prepricing Prospectus, any Fund
sales material or, in the case of the Investment Adviser only, any other
sales material (or any amendment or supplement to any of the foregoing) or
arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon
and in conformity with the information relating to the Distributor
furnished in writing to the Fund by or on behalf of the Distributor through
you expressly for use in connection therewith; provided, however, that the
foregoing indemnification contained in this paragraph (a) with respect to
the Prepricing Prospectus contained in Pre-Effective Amendment No. 2 to the
registration statement shall not inure to the benefit of the Distributor
(or to the benefit of any person controlling the Distributor) on account of
any such loss, claim, damage, liability or expense arising from the sale of
the Shares by the Distributor to any person if it is shown that a copy of
the Prospectus was not delivered or sent to such person within the time
required by the 1933 Act and the 1933 Act Rules and Regulations and the
untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Fund has delivered the
Prospectus to the Distributor in requisite quantity on a timely basis to
permit proper delivery or sending. The foregoing indemnity agreement shall
be in addition to any liability which the Fund or the Investment Adviser
may otherwise have.
(b) If any action, suit or proceeding shall be brought against
the Distributor or any person controlling the Distributor in respect of
which indemnity may be sought against the Fund or the Investment Adviser,
the Distributor or such controlling person shall promptly notify the Fund
or the Investment Adviser and the Fund or the Investment Adviser shall
assume the defense thereof, including the employment of counsel and the
payment of all fees and expenses. The Distributor or any such controlling
person shall have the right to employ separate counsel in any such action,
suit or proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the Distributor or
controlling person unless (i) the Fund or the Investment Adviser have
agreed in writing to pay such fees and expenses, (ii) the Fund and the
Investment Adviser have failed within a reasonable time to assume the
defense and employ counsel or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties) include both the
Distributor or such controlling person and the Fund or the Investment
Adviser and the Distributor or such controlling person shall have been
advised by its counsel that representation of such indemnified party and
the Fund or the Investment Adviser by the same counsel would be
inappropriate under applicable standards of professional conduct (whether
or not such representation by the same counsel has been proposed) due to
actual or potential differing interests between them (in which case the
Fund and the Investment Adviser shall not have the right to assume the
defense of such action, suit or proceeding on behalf of the Distributor or
such controlling person). It is understood, however, that the Fund and the
Investment Adviser shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits
or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel if there is any action, suit or proceeding in more than one
jurisdiction) at any time for all the Distributor and controlling persons
not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by the Distributor
and that, subject to the requirements of 1940 Act Release No. 11330, all
such fees and expenses shall be reimbursed promptly as they are incurred.
The Fund and the Investment Adviser shall not be liable for any settlement
of any such action, suit or proceeding effected without the written consent
of the Fund or the Investment Adviser, but if settled with such written
consent or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the Fund and the Investment Adviser agree to
indemnify and hold harmless the Distributor, to the extent provided in the
preceding paragraph and any such controlling person from and against any
loss, liability, damage or expense by reason by such settlement or
judgment.
(c) The Distributor agrees to indemnify and hold harmless the
Fund and the Investment Adviser, their trustees, manager(s) and members, as
the case may be, any officers of the Fund who sign the Registration
Statement and any person who controls the Fund or the Investment Adviser
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, to the same extent as the foregoing indemnity from the Fund and the
Investment Adviser to the Distributor, but only with respect to information
relating to the Distributor furnished in writing by or on behalf of the
Distributor through you expressly for use in the Registration Statement or
the Prospectus (or any amendment or supplement thereto). If any action,
suit or proceeding shall be brought against the Fund or the Investment
Adviser, any of their directors, any such officer or any such controlling
person, based on the Registration Statement or the Prospectus (or any
amendment or supplement to either of them) and in respect of which
indemnity may be sought against the Distributor pursuant to this paragraph
(c), the Distributor shall have the rights and duties given to each of the
Fund and the Investment Adviser by paragraph (b) above (except that if the
Fund or the Investment Adviser shall have assumed the defense thereof the
Distributor shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the Distributor's expense) and the Fund and the
Investment Adviser, their trustees, members any such officer and any such
controlling person shall have the rights and duties given to the
Distributors by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Distributors may otherwise
have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Fund and the Investment Adviser on the
one hand (treated jointly for this purpose as one person) and the
Distributor on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Fund and the Investment Adviser on the one hand (treated jointly for this
purpose as one person) and of the Distributor on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Fund and the
Investment Adviser on the one hand (treated jointly for this purpose as one
person) and the Distributor on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Fund bear to the total underwriting discounts and
commissions received by the Distributor, in each case, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Fund
and the Investment Adviser on the one hand (treated jointly for this
purpose as one person) and of the Distributor on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Fund and the Investment Adviser on the one hand (treated jointly for this
purpose as one person) or by the Distributor on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Fund, the Investment Adviser and the Distributor agree
that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities
and expenses referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 8, the Distributor shall not
be required to contribute any amount in excess of the amount by which the
total price of the Shares distributed by it and distributed to the public
exceeds the amount of any damages which the Distributor has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability from
claimants on claims that are the subject matter of such action, suit or
proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the
indemnified party as such losses, claims, damages, liabilities or expenses
are incurred. The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Fund and the
Investment Adviser set forth in this Agreement shall remain operative and
in full force and effect, regardless of (i) any investigation made by or on
behalf of the Distributor or any person controlling the Distributor, the
Fund, the Investment Adviser or their manager(s), trustees or officers, as
the case may be, or any person controlling the Fund or the Investment
Adviser, (ii) acceptance of any Shares and payment therefor hereunder and
(iii) any termination of this Agreement. A successor to the Distributor or
to the Fund, the Investment Adviser or their manager(s), trustees or
officers, as the case may be, or any person controlling the Fund or the
Investment Adviser shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.
8. Conditions of Distributor's Obligations. The obligation of
the Distributor to distribute any Shares are subject to, in the good faith
judgment of the Distributor, the accuracy of and compliance with the
representations, warranties and agreements of and by the Fund and the
Investment Adviser contained herein on and as of the Execution Date, the
date on which the Registration Statement becomes or became effective, the
date of the Prospectus (and of any amendment or supplement thereto), and
any Initial Closing Date; and to the following conditions:
(a) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change or any development involving a
prospective change in or affecting the condition (financial or other),
business, general affairs, properties, net assets, or results of operations
of the Fund or the Investment Adviser not contemplated by the Prospectus,
which in your opinion, would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the Fund
or the manager or any member or officer of the Investment Adviser or any
officer or director of the Fund or the Investment Adviser which makes any
statement made in the Prospectus untrue or which, in the opinion of the
Fund and its counsel or the Distributor, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the 1933 Act, the 1940 Act or the Rules and Regulations or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to
reflect such event or development would, in your opinion, materially
adversely affect the market for the Shares.
(b) (i) No order suspending the effectiveness of the
registration statement or the Registration Statement or prohibiting or
suspending the use of the Prospectus (or any amendment or supplement to any
of the foregoing) or any sales material shall have been issued and no
proceedings for such purpose or for the purpose of commencing an
enforcement action against the Fund, the Investment Adviser or, with
respect to the transactions contemplated by the Prospectus (or any
amendment or supplement thereto) and this Agreement may be pending before
or, to the knowledge of the Fund, the Investment Adviser or the
Distributor, shall be threatened or contemplated by the Commission, (ii)
there shall not have been any change in the capitalization of the Fund nor
any material increase in debt of the Fund from that set forth in the Fund's
then effective Registration Statement or the Prospectus (or any amendment
or supplement to either of them) and the Fund shall not have sustained any
material liabilities or obligations, direct or contingent, other than those
reflected in the Fund's then effective Registration Statement or the
Prospectus (or any amendment or supplement to either of them); (iii) there
shall not have been any material, adverse change in the condition
(financial or other), general affairs, business, prospects, properties, net
assets or results of operations of the Fund or the Investment Adviser not
disclosed in the Fund's then effective Registration Statement or the
Prospectus; (iv) the Fund or the Investment Adviser must not have sustained
any material loss or interference with their businesses from any court or
from legislative or other governmental action, order or decree or from any
other occurrence not described in the Fund's then effective Registration
Statement or the Prospectus (or any amendment or supplement to either of
them); and (v) all of the representations and warranties of the Fund and
the Investment Adviser contained in this Agreement shall be true and
correct in all material respects on and as of any Closing Date as if made
on and as of the date hereof.
(c) That none of the Fund or the Investment Adviser shall have
failed at or prior to any Closing Date to have performed or complied with
any of the agreements herein contained and required to be performed or
complied with by them at or prior to such Closing Date.
(d) That the Fund and the Investment Adviser shall have
furnished to you such certificates, documents and opinions of counsel as
you shall reasonably request (including certificates of officers of the
Fund and the Investment Adviser).
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and your counsel acting in good faith.
[Any certificate or document signed by any officer of the Fund or
the Investment Adviser and delivered to you, as Distributor, shall be
deemed a representation and warranty by the Fund or the Investment Adviser
to each Selling Agent as to the statements made therein.]
9. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the Initial Offering may
commence, when the Registration Statement or such post-effective amendment
has become effective. Until such time as this Agreement shall have become
effective, it may be terminated by the Fund by notifying you, or by you by
notifying the Fund.
Any notice under this Section 9 may be made by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
10. Termination of Agreement.
(a) This Agreement shall be subject to termination in your
absolute discretion, without liability on the part of the Distributor to
the Fund or the Investment Adviser by notice to the Fund or the Investment
Adviser if (i) trading in securities generally on the New York Stock
Exchange, American Stock Exchange, Nasdaq National Market, Nasdaq SmallCap
Market or the Nasdaq Stock Market shall have been suspended or limited or
minimum prices shall have been established (ii) additional governmental
restrictions not in force on the date of this Agreement have been imposed
upon trading in securities generally (except for any governmental
restrictions already adopted with delayed effective dates) or a general
moratorium on commercial banking activities shall have been declared by
federal or any state's authorities or (iii) any outbreak or material
escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial, economic, legal or regulatory
conditions, occurs, the effect of which is such as to make it, in your
judgment, impracticable or inadvisable to commence or continue the offering
of Shares. Notice of such termination may be given to the Fund or the
Investment Adviser by telegram, telecopy or telephone but shall be
subsequently confirmed by letter.
(b) In the event of termination of this Agreement in accordance
with the foregoing clause (a) during the period of time immediately prior
to any Closing that trade details have been transmitted to the Fund/SERV
System, the Fund agrees to cause its custodian to immediately reimburse
each investor on the Closing Date (or such other date that the Fund/SERV
System settles the purchase and sale of Shares) the dollar amount
previously paid to the Fund for the purchase of Shares by such investors.
11. Expenses. The Fund agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by
the Fund of its obligations hereunder: (a) the preparation, printing or
reproduction, filing (including without limitation the filing fees
prescribed by the 1933 Act, the 1940 Act and the Rules and Regulations) and
distribution of the Registration Statement (including exhibits thereto),
the Prospectus, each Prepricing Prospectus and the 1940 Act Notification
and all amendments or supplements to any of them, (b) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, the Prospectus, each Prepricing Prospectus, any sales material
(and all amendments or supplements to any of them) as may be reasonably
requested for use in connection with the offering and sale of the Shares,
(c) the preparation, printing, authentication, issuance and delivery of
certificates (if any) for the Shares, including any stamp taxes and
transfer agent and registrar fees payable in connection with the original
issuance and sale of such Shares, (d) the registrations or qualifications
of the Shares for offer and sale under the securities or Blue Sky laws of
the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Distributors
relating to the preparation, printing or reproduction and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification), (e) the fees and expenses of the Fund's independent
accountants, counsel for the Fund and of the transfer agent, (f) the
expenses of delivery to the Distributor and Selling Agents (including
postage, air freight and the cost of counting and packaging) of copies of
the Prospectus, the Prepricing Prospectus, any sales material and all
amendments or supplements to the Prospectus as may be requested for use in
connection with the offering and sale of the Shares, (g) the printing (or
reproduction) and delivery of this Agreement, any dealer agreements, the
preliminary and supplemental Blue Sky Memoranda and all other
company-authorized agreements or other documents printed (or reproduced)
and delivered in connection with the offering of the Shares, and (h) the
filing fees and the fees and expenses of counsel for the Distributors in
connection with any filings required to be made with the NASD and incurred
with respect to the review of the offering of the Shares by the NASD.
Notwithstanding the foregoing, in the event that the sale of the
Shares is not consummated pursuant to Section 2 hereof, the Investment
Adviser will pay the costs and expenses of the Fund set forth above in this
Section 12, and reimbursements of Distributor expenses in connection with
the offering shall be made in accordance with Section 5(l) hereof.
12. Miscellaneous. Except as otherwise provided herein, notice
given pursuant to any provision of this Agreement shall be in writing and
shall be delivered (a) if to the Fund or the Investment Adviser, c/o
Advantage Advisers, L.L.C., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 Attention: Xxxxxx X. Xxxxxx, with a copy to Xxxxxxx, Arps, Slate,
Xxxxxxx & Xxxx LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxxx X. Xx Xxxx, Esq. ; (b) if to you, at the office of CIBC
World Markets Corp., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: Counsel, with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X.
Xx Xxxx, Esq.
This Agreement has been and is made solely for the benefit of the
Distributor, the Fund, the Investment Adviser, their trustees or directors,
managers, members and officers and the other controlling persons referred
to in Section 7 hereof and their respective successors and assigns, to the
extent provided herein and no other person shall acquire or have any right
under or by virtue of this Agreement. Neither the term "successor" or the
term "successors and assigns" as used in this Agreement shall include a
purchaser from any Underwriter of any of the Shares in his status as such
purchaser.
13. Applicable Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party
hereto.
Please confirm that the foregoing correctly sets forth the
agreement among the Fund, the Investment Adviser and the Distributor
Very truly yours,
ADVANTAGE ADVISERS
MULTI-SECTOR FUND I
By:_____________________________
Title:
ADVANTAGE ADVISERS, L.L.C.
By:_____________________________
Title:
CIBC WORLD MARKETS CORP.
By:_____________________________
Title:
