FUNDS REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED, LISTED IN APPENDIX A(1)
(EACH THE "FUND"(2))
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX INCORPORATED
(THE "SELLING AGENT")
FORM OF PLACEMENT AGENCY AGREEMENT
[_______], 2009
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX INCORPORATED
4 World Financial Center 000
Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Ladies and Gentlemen:
Subject to the terms and conditions of this Agreement (in particular,
Section 4 hereof) and the Selling Agent's good faith judgment of prevailing
market conditions and the current marketability of the Fund, the Selling Agent
hereby agrees to use reasonable efforts to solicit, on behalf of and as agent
for the Fund, investments in the limited liability company interests (the
"Interests") of the Fund, a limited liability company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). Each of the
managers or investment advisers, as applicable, listed in Appendix A, as may be
amended from time to time (the "Manager"(3)), serves as the manager or
investment adviser to the applicable Fund listed on the Appendix A and provides
management or investment advisory services, as applicable, to such Fund. This
Agreement is made separately among: (i) each Fund listed in Appendix A; (ii) the
applicable Fund's respective Manager listed in Appendix A (with respect to
Sections 2, 4(a), 7, 8
---------------------
(1) As may be amended from time to time.
(2) Except where otherwise indicated by reference to a particular Fund, all
defined terms used herein in the context of an individual Fund apply equally
with respect to each Fund, as applicable. Any reference to the "Fund" shall be
deemed to mean each Fund listed in Appendix A (as may be amended from time to
time), as applicable.
(3) Except where otherwise indicated by reference to a particular Manager, all
defined terms used herein in the context of an individual Manager, apply equally
with respect to each Manager, as applicable. Any reference to the "Manager"
shall be deemed to mean each Manager listed in Appendix A (as may be amended
from time to time), as applicable.
and 9 only); and (iii) the Selling Agent, severally and not jointly with
respect to the other Funds and Managers listed on Appendix A.
The Selling Agent's sole obligation and responsibility hereunder or in
connection with the Fund is to use reasonable efforts, subject to the terms of
this Agreement and the Selling Agent's good faith judgment, to solicit investors
in the Interests in accordance with the provisions set forth herein.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE FUND. The Fund
represents and warrants to the Selling Agent as of the date hereof and as of
each time (a "Closing Time") that Interests are sold hereunder, as follows:
(a) The Fund has been duly formed and is validly existing under the
laws of its jurisdiction of formation and has taken all necessary actions to
attain good-standing status and at each Closing Time will be in good standing
under the laws of its jurisdiction of formation, with power and authority to
conduct its business as described in the Fund's Confidential Offering Memorandum
(the "Offering Memorandum") and to offer and sell the Interests as contemplated
by this Agreement; the Fund is duly qualified to transact business, is in good
standing and at each Closing Time will be in good standing in each jurisdiction
in which the conduct of its business requires such qualification, except where
the failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, of the Fund, or the earnings, business
affairs or business prospects of the Fund.
(b) All of the issued and outstanding Interests of the Fund have been
duly authorized and validly issued and are limited liability interests; the
Interests to be issued as contemplated by this Agreement have been authorized by
requisite action on the part of the Fund and, when issued and delivered against
payment in accordance with the provisions of the relevant subscription
documents, will be validly issued, limited liability interests. The issuance of
the Interests by the Fund is not subject to preemptive rights and the Fund does
not have any outstanding options to purchase or any rights or warrants to
subscribe for, or any securities or obligations convertible into, any Interests
other than as disclosed to the Selling Agent by the Fund in writing or as
contained in the Offering Memorandum.
(c) The Fund is not in material violation of its organizational
documents or in material default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, fiscal agency agreement, note, lease or
other instrument to which it is a party or by which it may be bound or to which
any of its assets is subject, except as set forth in Appendix B, as it may be
amended from time to time; and the execution, delivery and performance by the
Fund of, and compliance with, this Agreement, and the Fund's Management
Agreement, Limited Liability Company Agreement, Administration Agreement or
other related agreements (collectively, the "Operative Agreements") to which it
is a party and the consummation by the Fund of the transactions contemplated
herein and therein will not conflict with or result in a material breach of any
of the terms or provisions of, or constitute, with or without the giving of a
notice or lapse of time or both, a material default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any assets of the
Fund pursuant to, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, any
2
material contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Fund is a party or by which it may be bound or to which
any of the assets of the Fund is subject, nor will such action result in any
violation of or conflict with the terms or provisions of the organizational
documents of the Fund or, to the best knowledge of the Fund, any law, order,
judgment, decree, rule or regulation applicable to the Fund; and no consent,
approval, authorization or order of, or any filing or declaration with, any
court or governmental authority or agency, national securities exchange or
securities association is required for the consummation by the Fund of the
transactions contemplated by this Agreement (except such filings as may be
required under state securities or Blue Sky laws or by Regulation D under the
Securities Act of 1933, as amended (the "Securities Act"), which will be timely
filed) or the Fund's Operative Agreements.
(d) Since the date of the Fund's Offering Memorandum, there has been no
material adverse change, except as otherwise contemplated therein, in the
condition, financial or otherwise, business affairs or business prospects of the
Fund and, except as disclosed in the Fund's Offering Memorandum and any
supplements thereto, there is no action, suit or proceeding before or by any
court or governmental agency or body, U.S. or non-U.S., now pending, or, to the
knowledge of the Fund, threatened against or affecting the Fund or any of its
shareholders, members, principal stockholders or officers or directors, as the
case may be, which adverse change, action, suit or proceeding will impair or
adversely affect in any material respect the ability of the Fund to conduct its
business as described in its Offering Memorandum or sell its Interests or
perform its obligations under any Operative Agreement.
(e) This Agreement and the Fund's Operative Agreements have been duly
authorized by all requisite action on the part of the Fund, and have been
executed and delivered by the Fund. Assuming due authorization, execution and
delivery by the other parties thereto with respect to the Fund's Operative
Agreements, each such Operative Agreement constitutes a valid and legally
binding agreement of the Fund, enforceable against the Fund in accordance with
its terms, except as the same may be subject to the effects of (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, (B) general principles of equity (regardless of whether considered in
a proceeding at law or in equity) and (C) an implied covenant of good faith and
fair dealing.
(f) Assuming the accuracy of the representations made by each investor
in Interests in its subscription or purchase agreement (none of which the Fund
or the Manager had any reason to believe are false), the Fund is eligible to
claim the exemption provided by Regulation 4.5 promulgated by the U.S. Commodity
Futures Trading Commission (the "CFTC") to the extent that compliance with
Regulation 4.5 is required by the Fund and has complied and will comply
therewith.
(g) Any offering of Interests other than by the Selling Agent or an
affiliate of the Selling Agent made or to be made within the United States was
or will be made, as applicable, in compliance with U.S. federal and state
securities and commodities laws, and any offering of Interests other than by the
Selling Agent or an affiliate of the Selling Agent made or to be made outside
the U.S. was or will be made, as applicable, in compliance with local laws.
3
(h) At each date of issue as well as at each Closing Time, the Fund's
Offering Memorandum, as well as all of the sales material relating to the
Interests approved in writing by the Manager to be used as such (collectively
and as the same may be amended or supplemented, the "Offering Materials") did
not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(i) Any certificate signed by any executive officer of the Fund and
delivered to the Selling Agent or to counsel for the Selling Agent shall be
deemed a representation and warranty by the Fund to the Selling Agent as to the
matters covered thereby.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE MANAGER. The Manager
represents and warrants to the Selling Agent as of the date hereof and as of
each Closing Time as follows:
(a) The Manager has been duly formed, validly existing and, where
applicable, in good standing under the laws of the jurisdiction of its formation
with power and authority, to conduct its business as described in its
organizational documents. Subject as aforesaid, the Manager has been duly
licensed or qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, except where the failure
to so qualify would not have a material adverse effect on the ability of the
Manager to perform its obligations as described in the Offering Materials.
(b) Each of this Agreement and the Operative Agreements to which it is
a party (the "Manager Operative Agreements") has been duly authorized, executed
and delivered by or on behalf of the Manager and constitutes a valid and legally
binding obligation of the Manager enforceable against the Manager in accordance
with its terms, except as the same may be subject to the effects of (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, (B) general principles of equity (regardless of
whether considered in a proceeding at law or in equity) and (C) an implied
covenant of good faith and fair dealing; and the execution, delivery and
performance by the Manager of and compliance with this Agreement and the
execution and delivery and performance by the Manager of and compliance with
each the Manager Operative Agreement, and the consummation by the Manager of the
transactions contemplated hereunder or thereunder, will not conflict with, or
result in a breach of any of the terms or provisions of, or constitute, with or
without the giving of notice or lapse of time or both, a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
of the property or assets of the Manager pursuant to, any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Manager is a party or by which it may be bound or to which any of the
property or assets of the Manager is subject, nor will such action result in any
violation of or conflict with the terms or provisions of the other
organizational documents of the Manager, any law, order, judgment, decree, rule
or regulation applicable to the Manager; and no consent, approval, authorization
or order of, or any filing or declaration with, any court or governmental
authority or agency, national securities exchange, securities or futures
association is required for the consummation by the Manager of the transactions
contemplated by this Agreement or each the Manager Operative Agreement, except
4
such filings as may be required under state securities or Blue Sky laws or by
Regulation D under the Securities Act, which will be timely filed.
(c) The Manager has the financial resources available necessary for the
performance of its obligations as contemplated herein and in the Fund's Offering
Memorandum.
(d) The Manager is not in default under any material agreement,
indenture or instrument or in breach or violation of any judgment, decree,
order, rule or regulation applicable to it of any court or governmental or
self-regulatory agency or body with jurisdiction over it, the effect of which
might impair or adversely affect in any material respect the ability of the
Manager to function as investment manager or perform its obligations under any
the Manager Operative Agreement or to perform its obligations as contemplated in
the Fund's Offering Memorandum.
(e) Since the date of the Fund's Offering Memorandum, there has been no
material adverse change, except as otherwise contemplated therein, in the
condition, financial or otherwise, business affairs or business prospects of the
Manager that would materially impact the nature or quality of the services it is
obligated to provide to the Fund under any of the Manager Operative Agreement as
contemplated in the Fund's Offering Memorandum and, except as disclosed in the
Fund's Offering Memorandum, there is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Manager, threatened against or affecting the Manager or
any of its members or officers, which adverse change, action, suit or proceeding
would impair or adversely affect in any material respect the ability of the
Manager to function as an investment manager or perform its obligations under
any the Manager Operative Agreement as contemplated in the Fund's Offering
Memorandum.
(f) Unless exempted or excluded from registration, the Manager is
registered with the CFTC as a commodity pool operator and commodity trading
advisor and is a member of the U.S. National Futures Association ("NFA") and
each of its principals and associated persons (as defined in the U.S. Commodity
Exchange Act and regulations thereunder) is registered with the CFTC as such.
(g) The Manager is registered with the U.S. Securities and Exchange
Commission (the "Commission") as an investment adviser and has all required
state securities and commodities registrations to carry out its obligations
under this Agreement and the Manager Operative Agreements.
(h) Each partner, officer or employee of the Manager who is not
currently and has not been registered as a principal (as defined in the U.S.
Commodity Exchange Act and regulations thereunder) of the Manager has not and
will not engage in any activities which would require such individual to
register as a principal until such time as such individual is registered as a
principal of the Manager.
(i) Each partner, officer or employee of the Manager who has not been
and is not currently registered as an associated person (as defined in the U.S.
Commodity Exchange Act and regulations thereunder) of the Manager has not and
will not engage in any activities which
6
would require such individual to register as an associated person, until such
time as such individual is registered as an associated person of the Manager.
(j) Each of the Manager's registered principals and associated persons
(as defined in the U.S. Commodity Exchange Act and regulations thereunder) has
in the past performed and will perform their responsibilities in connection with
the operation of the Fund in compliance in all material respects with CFTC and
NFA requirements applicable thereto.
(k) Any certificate signed by any executive officer of the Manager and
delivered to the Selling Agent or to counsel for the Selling Agent shall be
deemed a representation and warranty by the Manager to the Selling Agent as to
the matters covered thereby.
Section 3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SELLING
AGENT. The Selling Agent represents and warrants to, and agrees with, the Fund:
(a) The Selling Agent will not make any representations regarding the
Manager or the Fund in the course of marketing the Interests which is materially
inconsistent with the disclosures made in the Offering Materials. The Selling
Agent will not distribute any sales materials to prospective investors in the
course of marketing the Interests other than the Offering Materials and any
subscription and eligibility documents related to the subscription of the
Interests.
(b) The Agreement has been duly authorized, executed and delivered by
the Selling Agent. The Selling Agent will comply with all applicable laws in
marketing the Interests, and will market the interests as a private placement
under relevant securities and related laws so as not to cause the offering of
Interests to be required to be registered with any government body. The
Agreement constitutes a valid and legally binding agreement of the Selling
Agent, enforceable against the Selling Agent in accordance with its terms,
except as the same may be subject to the effects of (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally, (B)
general principles of equity (regardless of whether considered in a proceeding
at law or in equity) and (C) an implied covenant of good faith and fair dealing.
(c) The Selling Agent will use reasonable efforts to cooperate with the
Manager and the Fund in assuring compliance with current money laundering laws
and regulations.
(d) The Selling Agent will not disclose or otherwise use confidential
or proprietary information regarding the Manager, its affiliates, the Fund or
any of their owners, officers, directors, employees, prospective investors or
investors, or the Manager's trading methods or strategies, without the Manager's
written consent. Notwithstanding such consent, at any time as the Manager or the
Fund may request, the Selling Agent agrees not to use or further disclose such
information to others unless required to do so by law or governmental order
provided however that the Selling Agent shall give the Manager and the Fund
prior notice of its intent to use or disclose such information so that the
parties may obtain a protective order in a
6
court of competent jurisdiction. As used in this Section 3(d), the term
"confidential information" does not include information that: (a) becomes or has
been generally available to the public other than as a result of disclosure by
the Selling Agent; (b) was available to the Selling Agent on a non-confidential
basis prior to its disclosure; or (c) is independently developed or becomes
available to Selling Agent on a non-confidential basis from a source other than
the Fund, the Manager or their affiliates.
(e) The Selling Agent will maintain the confidentiality of investor
information in a manner consistent with the privacy policy adopted by the Fund
and applicable to the Selling Agent, pursuant to Title V of the Gramm Xxxxx
Xxxxxx Act, as amended.
(f) The Selling Agent and each of its employees and agents marketing
the Interests is either not a person (1) ineligible to serve as a principal
underwriter to an investment company pursuant to Section 9 of the 1940 Act, or
(2) has obtained an appropriate exemptive order with respect to any potential
ineligibility. The Selling Agent represents and warrants that it is duly
registered as a broker/dealer pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and is a good member in good standing with the
Financial Industry Regulatory Authority ("FINRA"). The Selling Agent maintains
all appropriate registrations, whether federal or state, or is exempt from
registration under applicable law, to enable it to perform its obligations
hereunder in accordance with applicable laws and regulations. In taking any
actions pursuant to this Agreement, the Selling Agent will not take any action
constituting a general solicitation that would result in the exemption set forth
in Rule 506 of Regulation D under the Securities Act not being available to the
Fund with respect to any sale of Interests. The Selling Agent further agrees
that it will not take any action (including, soliciting prospective investors or
accepting commissions or other remuneration) in any state where it is not
registered as a broker/dealer that would result in any exemption under the
securities laws of such state not being available to the Fund.
(g) The Selling Agent will conduct its activities in accordance with
(i) the terms and conditions set forth in the Offering Materials, in each case
as may be amended from time to time, (ii) applicable provisions of the
applicable laws and regulations, including but not limited to, anti-money
laundering laws and regulations, the Federal Securities laws and the rules
thereunder, and FINRA rules, and (iii) the terms of this Agreement.
(h) The Selling Agent will maintain a log of the names and addresses of
prospective investors to whom the Offering Materials are sent (including the
dates sent), and will send a report to the Fund stating the number of the
prospective investors to whom the Offering Materials have been sent promptly
upon request by the Fund.
Section 4. OFFERING AND SALE OF INTERESTS. The Selling Agent is hereby
appointed by the Fund as a non-exclusive selling agent for the purpose of
finding acceptable subscribers for Interests.
(a) The Selling Agent will solicit offers to purchase Interests only
from prospective investors who are "U.S. persons" within the meaning of the U.S.
Internal Revenue Code of 1986, as amended, and who meet the other eligibility
requirements established by the Fund and set forth in the Offering Materials or
communicated to the Selling Agent in writing.
7
The Selling Agent may submit an Offeree Qualification Form for any qualified
investor, as described in this Section 4, with which the Selling Agent and/or a
Xxxxxxx Xxxxx Financial Advisor has had substantive business dealings for at
least six months and believes that the Selling Agent and/or a Xxxxxxx Xxxxx
Financial Advisor should have sufficient information to be able to assess such
qualified investor's financial information, knowledge and sophistication. The
Selling Agent may distribute to the qualified investors the Offering Materials,
including the Fund's Offering Memorandum. The Manager will provide (or if
provided by the Selling Agent, must approve) all Offering Materials to be given
by the Selling Agent to qualified investors.
(b) The offers and sales of Interests are to be effected pursuant to
the exemption from the registration requirements of the Securities Act, pursuant
to Section 4(2) thereof and Regulation D under the Securities Act. Both the
Selling Agent and the Fund have established the following procedures in
connection with the offer and sale of Interests and agree that the Selling Agent
will make offers or sales of any Interests in compliance with such procedures:
(i) Offers and sales of Interests will be made only in compliance with
Regulation D under the Securities Act, the FINRA rules and state securities
laws and only to investors that qualify as "accredited investors," as
defined in Rule 501(a) under the Securities Act, and as "qualified
clients," as defined in Rule 205-3 under the Advisers Act.
(ii) No sale of Interests to any one investor will be for less than the
minimum denominations as may be specified in the Offering Memorandum or as
otherwise approved by the Board of Managers of the Fund (the "Board").
(iii) No offer or sale of any Interest shall be made in any state or
jurisdiction, or to any prospective investor located in any state or
jurisdiction, where such Interests have not been registered or qualified
for offer and sale under applicable state securities laws unless such
Interests are exempt from the registration or qualification requirements of
such laws.
(c) It is understood that the Selling Agent has no commitment with
regard to the sale of the Interests other than to use its reasonable efforts and
its good faith judgment in soliciting investments in the Interests.
(d) The Selling Agent shall be under no obligation to continue to
market the Interests if, in its sole judgment, it believes that doing so would
be impracticable, uneconomical or inappropriate, in view of such considerations
as it may feel relevant.
(e) The Fund shall have the right, in its sole discretion, to approve
or reject any prospective investor to whom the Selling Agent proposes to
distribute the Offering Materials, and the Fund shall have the right, in its
sole discretion to approve or reject each such investor before any Interests are
sold.
(f) The Selling Agent shall take all such reasonable and appropriate
actions such that the representations and warranties made herein by the Selling
Agent remain true and accurate in all material respects, and shall promptly
inform the Fund and the Manager in the event that the Selling Agent has any
reason to believe that any such representation or warranty is no longer true and
accurate in all material respects.
8
Section 5. COVENANTS OF THE FUND.
-----------------------
The Fund hereby covenants as follows:
(a) The Fund will deliver to the Selling Agent, or the Selling Agent's
designated distribution center, as promptly as practicable such number of copies
of the Offering Materials (as the same may be amended or supplemented) as the
Selling Agent may reasonably request in writing.
(b) If any event relating to or affecting the Fund occurs as a result
of which it has become necessary to amend or supplement the Offering Materials
so that they do not contain a material misstatement or omission, the Fund will
so inform the Selling Agent and will prepare and furnish to the Selling Agent a
reasonable number of copies of an amendment or amendments of, or a supplement or
supplements to, the Offering Materials which will amend or supplement the
Offering Materials so that as so amended or supplemented the Manager has reason
to believe that such Offering Materials do not contain any material misstatement
or omission.
(c) The Fund will use reasonable efforts to cooperate in the Selling
Agent's ongoing due diligence process with respect to the Fund, to the extent
consistent with the Fund's customary confidentiality policies.
(d) The Fund will comply with all applicable current anti-money
laundering laws and regulations and will cooperate with the Selling Agent in its
efforts to confirm such compliance.
(e) The Fund shall take all such reasonable and appropriate actions
such that the representations and warranties made herein by the Fund remain true
and accurate in all material respects, and shall promptly inform the Selling
Agent in the event that the Fund has any reason to believe that any such
representation or warranty is no longer true and accurate in all material
respects.
Section 6. PAYMENT OF EXPENSES AND FEES. Except as may otherwise be
agreed to in writing, each party shall be responsible for the payment of all
costs and expenses it incurs in connection with the performance of its
obligations under this Agreement.
Section 7. COMPENSATION. In consideration for the services provided by
the Selling Agent to the Fund described in this Agreement, the Selling Agent
shall receive from each investor the placement fee (the "Placement Fee"), as set
forth in Appendix A (as may be amended from time to time). In addition, the
Manager or its affiliate may pay directly to the Selling Agent such amounts as
shall be mutually agreed upon from time to time by the Manager or its affiliate
and the Selling Agent.
Section 8. CONDITIONS TO CLOSING. The obligations of the Selling Agent
shall be subject to the accuracy of the representations and warranties on the
part of the Manager and the Fund contained herein as of the date hereof and as
of each Closing Time, to the accuracy of the statements of executive officers of
the Manager and the Fund made in any certificates pursuant to the provisions
hereof and to the following additional conditions:
9
(a) The Selling Agent shall have received a certificate of the Manager
and the Fund, signed by an executive officer of each, dated as of the initial
Closing Time, to the effect that:
(i) The representations and warranties in Sections 1 and 2 hereof, as
applicable, are true and correct on and as of the Closing Time
with the same effect as if made on the Closing Time and the
Manager and the Fund, as applicable, each has complied with all
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Time; and
(ii) Since the date of the most recent information included in the
Offering Memorandum, there has not been a material adverse change
in the Manager and the Fund that must be reflected in the Offering
Memorandum in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) All actions taken by the parties hereto in connection with the sale
of the Interests as herein contemplated shall be reasonably satisfactory in form
and substance the parties hereto and their counsel.
(c) At each additional Closing Time, the Selling Agent shall have been
furnished with such information and certificated documents from the Manager and
the Fund as the Selling Agent may deem to be reasonably necessary or
appropriate.
If any of the conditions specified in this Section 8 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement and all obligations hereunder may be cancelled by either party hereto
by notifying the other party of such cancellation in writing or by telegram at
any time at or prior to the Closing Time, and any such cancellation or
termination shall be without liability of any party to the other party except as
otherwise provided in this Section 8.
Section 9. INDEMNIFICATION.
(a) The Fund and the Manager shall indemnify and hold harmless the
Selling Agent or any affiliate of the Selling Agent ("Selling Agent's
Affiliate") within the meaning of the Securities Act or the Exchange Act
(collectively, the "Selling Agent's Indemnified Parties") from and against any
loss, claim, damage or liability, joint or several, and any action in respect
thereof, to which the Indemnified Party may become subject or otherwise, insofar
as such loss, claim, damage, liability or action relates to or arises out of (i)
any untrue statement of a material fact contained in the Offering Materials, or
the omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (ii) any material breach of the representations, warranties or
covenants of the Fund and the Manager contained in this Agreement, and shall
reimburse such Selling Agent's Indemnified Party in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Fund and the Manager will not be liable in any such
case to the extent that any such loss, claim, damage, liability or action
relates to or arises
10
out of (i) any untrue statement or omission or alleged untrue statement or
omission contained in the Offering Materials relating to the Selling Agent or to
any Selling Agent's Affiliate that was made in reliance upon and in conformity
with information furnished to the Manager or the Fund in writing by the Selling
Agent or any Selling Agent's Affiliate, in any such case expressly for use in
the Offering Materials, or (ii) the Selling Agent's or a Selling Agent's
Affiliate's own bad faith, willful misconduct or gross negligence or their
reckless disregard of duties under this Agreement. Any determination by the Fund
to indemnify the Selling Agent or any Selling Agent's Affiliate for the
foregoing liabilities shall be made in accordance with the requirements of
Section 17 of the 1940 Act, as interpreted by the Commission.
(b) Promptly after receipt by an Indemnified Party under this Section 9
of notice of any claim or the commencement of any action, such Indemnified Party
shall notify the Fund and the Manager or the Selling Agent, as applicable (the
"Indemnifying Party"), in writing of the claim or the commencement of that
action, provided that the failure to notify the applicable Indemnifying Party
will not relieve such Indemnifying Party from any liability which it may have to
an Indemnified Party otherwise than under this Section 9 unless such failure
materially affects the Indemnifying Party's case. If any such claim or action is
brought against any Indemnified Party, and it shall notify an Indemnifying Party
thereof, the Indemnifying Party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly notified party,
to assume the defense thereof, with counsel reasonably satisfactory to the
Indemnified Party (which consent may not be unreasonably withheld or delayed).
After notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such claim or action, the Indemnifying Party
shall not be liable to the Indemnified Party under this Section 9 for any legal
or other expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof other than reasonable costs of investigation in
connection with the defense. The Indemnified Party will have the right to employ
its own counsel in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such Indemnified Party unless (1) the
employment of counsel by the Indemnified Party has been authorized in writing by
the Indemnifying Party, (2) a conflict or potential conflict exists (based on
advice of counsel to the Indemnified Party) between the Indemnified Party and
the Indemnifying Party (in which case the Indemnifying Party will not have the
right to direct the defense of such action on behalf of the Indemnified Party),
or (3) the Indemnifying Party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
Indemnifying Party. The Indemnifying Party will not be liable for any settlement
of any action or claim effected without its written consent (which consent will
not be unreasonably withheld or delayed).
(c) The indemnity provided by this Section 9 shall not relieve the
Fund, the Manager and the Selling Agent from any liability any such party may
otherwise have.
Section 10. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. The indemnities set forth in this Agreement will remain in full force
and effect regardless of any termination of this Agreement. All representations,
warranties, agreements and indemnities contained in this Agreement or contained
in certificates of any party hereto submitted pursuant hereto shall remain
operative and in full force and effect, regardless of any investigation made by,
or on behalf of, the Selling Agent, the Fund or any person who controls any of
the foregoing,
11
and shall survive the Initial and each Additional Closing Time in the form
restated and reaffirmed as of each such Closing Time. The provisions of this
Section 10 shall survive the termination or cancellation of this Agreement.
Section 11. EFFECTIVE DATE AND TERM OF AGREEMENT.
This Agreement shall become effective for all purposes as of the date
first written above and shall remain in effect for an initial term of two years
from such date. Thereafter, this Agreement shall continue in effect from year to
year, provided that each such continuance is approved by the Board, including
the vote of a majority of the Board members who are not "interested persons," as
defined by the 1940 Act, of the Fund or the Selling Agent.
Section 12. TERMINATION.
(a) The Fund shall have the right to terminate this Agreement at any
time by giving not less than thirty days' written notice of such termination to
the Selling Agent. The Selling Agent shall have the right to terminate this
Agreement at any time by giving not less than thirty days' written notice of
termination to the Fund.
(b) This Agreement shall terminate automatically in the event of its
"assignment," as such term is defined by the 1940 Act and the rules thereunder,
by the Selling Agent.
(c) Any termination of this Agreement shall in no respect modify or
qualify the Selling Agent's right to receive compensation through the date of
such termination in respect of services provided prior to such termination or
with respect to Interests previously sold through the Selling Agent or for which
firm orders have been received by the Selling Agent and communicated in writing
to the Fund prior to the termination date.
Section 13. AMENDMENTS. This Agreement may not be amended except by a
writing executed by each of the parties hereto.
Section 14. NOTICES. All communications hereunder shall be in writing
and: if sent to the Selling Agent shall be mailed, delivered or telegraphed and
confirmed to it at: 4 World Financial Center, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx, XX 00000, Attention: Xxxxxx Xxxxx; and if sent to the Fund shall be
mailed, delivered or telegraphed and confirmed to it at the following address:
000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000, Attention: Xxxxxx Xxxx. Notices shall
be effective when actually received.
Section 15. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Selling Agent, the Fund and such parties' respective
successors to the extent provided herein. This Agreement and the conditions and
provisions hereof are intended to be and are for the sole and exclusive benefit
of the parties hereto and their respective successors, permitted assigns and
controlling persons and parties indemnified hereunder, and for the benefit of no
other person, firm or corporation. No purchaser or prospective purchaser of
Interests shall be considered to be a successor or assign solely on the basis of
such purchase.
12
Section 16. SELLING AGENT'S AUTHORITY TO ACT. Nothing in this Agreement
shall be construed to imply that the Selling Agent is a partner, shareholder,
manager, managing member or member of: (1) the Fund; (2) the Manager; or (3) any
of their respective affiliates. The Fund and the Selling Agent acknowledge that,
absent express written consent by the parties, the Agent does not have the
right, power or authority to enter into any contract or to create any obligation
on behalf of the Fund, the Manager, or any of their respective affiliates or to
otherwise bind such entities or any of their respective affiliates in any way.
Furthermore, nothing in this Agreement shall be construed to limit or waive the
right of the Fund to: (a) require an Investor to withdraw from the Fund or to
compel the redemption of some or all of an Investor's investment or Interests
pursuant to the terms of the governing documents of the Fund; or (b) change the
terms of the offering of Interests pursuant to the terms of the governing
documents of the Fund.
Section 17. GOVERNING LAW. This Agreement and the rights and
obligations of the parties created hereby shall be governed by the laws of the
State of New York, without regard to principles of conflicts of law provisions
thereof, and with the provisions of the 1940 Act. In the event of any conflict
between the provisions of the laws of New York and those of the 1940 Act, the
1940 Act provisions shall control.
Section 18. SEVERABILITY. In the event that any provision of this
Agreement is held to be invalid or unenforceable in any jurisdiction, such
provision shall be deemed modified to the minimum extent necessary so that such
provision, as so modified, shall no longer be held to be invalid or
unenforceable. Any such modification, invalidity or unenforceability shall be
strictly limited both to such provision and to such jurisdiction, and in each
case to no other. Furthermore, in the event of any such modification, invalidity
or unenforceability, this Agreement shall be interpreted so as to achieve the
intent expressed herein to the greatest extent possible in the jurisdiction in
question and otherwise as set forth herein.
Section 19. INDIRECT ACTION. The parties agree that it is of the
essence of their mutual agreement as embodied herein that none of them shall
attempt to do indirectly what they could not do directly hereunder, through the
use of affiliates, reciprocal business dealings or any other means.
Section 20. REQUIREMENTS OF LAW. Whenever in this Agreement it is
stated that a party will take or refrain from taking a particular action, such
party may nevertheless refrain from taking or take such action if advised by
counsel that doing so is required by law or advisable to ensure compliance with
law, and shall not be subject to any liability hereunder for doing so, although
such action shall permit termination of the Agreement by the other party hereto.
Section 21. CONSENT TO JURISDICTION. The parties hereto agree that any
action or proceeding arising directly, indirectly, or otherwise in connection
with, out of, related to, or from this Agreement, any breach hereof, or any
transaction covered hereby, shall be resolved, whether by arbitration or
otherwise, within the County, City, and State of New York. Accordingly, the
parties consent and submit to the jurisdiction of the federal and state courts
and any applicable arbitral body located within the County, City, and State of
New York. The parties further agree that any such action or proceeding brought
by either party to enforce any right, assert any claim,
13
or obtain any relief whatsoever in connection with this Agreement shall be
bought by such party exclusively in the federal or state courts, or if
appropriate before any applicable arbitral body, located within the County,
City, and State of New York.
Section 22. USE OF XXXXXXX XXXXX NAME. The Fund may not disseminate any
written reference relating to the Selling Agent relating in any respect to the
transactions contemplated hereby without the prior written consent of the
Selling Agent.
14
If the foregoing is in accordance with each party's understanding of
their agreement, each party is requested to sign and return to the Fund a
counterpart hereof, whereupon this instrument along with all counterparts will
become a binding agreement among them in accordance with its terms effective as
of the date first above written.
Very truly yours,
[NAME OF FUND]
By:
----------------------------------------
Name:
----------------------------------
Title: Officer
(With respect to Sections 2, 4(a), 7, 8 and
9 only):
[MANAGER]
By:
----------------------------------------
Name:
Title:
Confirmed and accepted:
XXXXXXX LYNCH, XXXXXX,
XXXXXX & XXXXX
INCORPORATED
By:
----------------------------------------
Name: Xxxxxx Xxxxx
Title:
15
APPENDIX A
THE FUNDS, THE MANAGERS AND PLACEMENT FEES
------------ ----------------------------- ------------------------- -------------------------------------------------
NO. FUND NAME MANAGER FEES
------------ ----------------------------- ------------------------- -------------------------------------------------
1 Excelsior Multi-Strategy U.S. Trust Hedge Fund Upfront Placement Fee of up to 2.5% of the
Hedge Fund of Funds (TI 2), Management, Inc. amount invested in the Fund.
LLC
Placement Fee is waived for investments by:
(i) any account for which the Manager or
one of its affiliates acts in a
fiduciary, advisory, custodial, or
similar capacity;
or
(ii) any account of Xxxxxxx Xxxxx Trust
Company managed on discretionary
basis; or
(iii) individuals who are employees of Bank
of America or an affiliate at the time of
their investment.
------------ ----------------------------- ------------------------- -------------------------------------------------
2. Excelsior Multi-Strategy U.S. Trust Hedge Fund Upfront Placement Fee of up to 2.5% of [the
Hedge Fund of Funds (TE 2), Management, Inc. amount invested in the Fund.
LLC
Placement Fee is waived for investments by:
(i) any account for which the Manager or
one of its affiliates acts in a
fiduciary, advisory, custodial, or
similar capacity]; or
(ii) any account of Xxxxxxx Xxxxx Trust
Company managed on discretionary
basis; or individuals who are employees
of Bank of America or an affiliate at the
time of their investment.
------------ ----------------------------- ------------------------- -------------------------------------------------
1
APPENDIX B
1
