PLACEMENT AGENT AGREEMENT
Phoenix-LJH Advisors Fund LLC
0000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Dear Sirs:
It is our understanding that Phoenix-LJH Advisors Fund LLC, a Delaware
limited-liability company, ("Fund"), proposes to offer and sell to selected
purchasers, upon the terms and subject to the conditions set forth in the
enclosed Private Placement Memorandum, dated _______________, 2002 (the
"Memorandum"), membership interests or commitments in respect thereof
("Interests"), as more particularly described in the Memorandum. Phoenix Equity
Planning Corporation, a Connecticut corporation, desires to serve as placement
agent for the offer and sale of the Interests.
1. Appointment. The Fund hereby appoints Phoenix Equity Planning
Corporation, a Connecticut corporation ("Placement Agent"), to act as its
placement agent in connection with the offer and sale of the Interests. By its
acceptance hereof, Placement Agent agrees to act in such capacity and to
endeavor to find purchasers for the Interests in accordance with the terms and
conditions of the Memorandum and this Agreement.
2. Private Placement. Offers and sales of the Interests will not be
registered under the Securities Act of 1933 (the "Securities Act") and the
qualification requirements of state securities laws in reliance on (a) the
exemption from registration or qualification for offers and sales made only to
persons or entities which qualify as "accredited investors" as defined in Rule
501(a) of Regulation D under the Securities Act and Rule 506 of said Regulation
D, and a "qualified client" as defined in Rule 205-3 under the Investment
Advisers Act of 1940 (the "Advisers Act"). The Fund is an "investment company"
under The Investment Company Act of 1940 (the "1940 Act"). Offers and sales of
Interests may be made subject to certain additional criteria and conditions
required by the Fund with respect to prospective purchasers that are employee
benefit plans. The Placement Agent acknowledges that the Fund may consummate
sales of Interests in several closings. Placement Agent will furnish prospective
accredited investors with a Memorandum and such further documents as are
designated by the Fund for delivery to prospective investors (the "Disclosure
Documents"). All Disclosure Documents shall contain such materials and
information, and shall be in such form, as counsel for the Fund shall deem
necessary or advisable. The accuracy and completeness of the disclosure
documents shall be the responsibility of the Fund.
3. Sale of the Interests
---------------------
3.1 A subscription agreement, in form and substance
satisfactory to the Fund (the "Subscription Agreement"), must be completed by
each subscriber and returned by Placement Agent, together with any other
documents that may be required under state securities laws, as determined by
counsel for the Fund or by said subscription agreement, to the Fund at such
address as may be specified in the Subscription Agreement or Memorandum.
3.2 The Fund shall have the right to accept or reject any and
all subscriptions for any reason. Upon receipt of the Subscription Agreement,
the Fund will determine promptly whether to accept the proposed subscriber.
Should the Fund determine to accept the subscriber, it shall (i) execute an
acceptance on the Subscription Agreement, (ii) cause the issuance of interests
in accordance with the instructions in the Subscription Agreement and the
Limited Liability Company Agreement of Phoenix-LJH Advisors Fund LLC (the
"Limited Liability Company Agreement"), and (iii) deliver each of the foregoing
to the Placement Agent, for delivery to the subscriber upon payment of all
subscription amounts as required under the Subscription Agreement and the
Limited Liability Company Agreement and the satisfaction of any other conditions
of the Fund. It is agreed that closings of sales of Interests may be effected in
groupings for efficiency purposes. If the Fund determines to reject any
subscription, it will promptly return to the Placement Agent the Subscription
Agreement, unless the Fund is seeking additional information from the investor
whether to accept or reject the subscription. Placement Agent shall then
promptly return the tendered Subscription Agreement to the subscriber.
4. Compensation. With respect to purchasers who are introduced or
referred to the Fund by Placement Agent, Placement Agent shall receive a
distribution fee in an amount and payable as described on Exhibit 1 attached
hereto.
5. Representations and Warranties of the Fund. The Fund represents
and warrants to Placement Agent that:
5.1 To its knowledge, the Fund has been duly organized and is
validly existing as a limited liability company under the laws of the State of
Delaware, and has full power and authority to conduct business as described in
the Memorandum under the laws of the State of Delaware and every other
jurisdiction in which it conducts business or owns or leases property.
5.2 The Fund has prepared the Memorandum to be used only in
connection with the offer and sale of the Interests to purchasers and may
prepare amendments or supplements thereto. The offer and sale of the Interests
is intended to be exempt from registration pursuant to Regulation D of the
Securities Act and the rules and regulations promulgated thereunder, and
Interests are intended to be sold only to "qualified clients" under Rule 205-3
of the Advisers Act.
5.3 From the time of this Agreement and at all times subsequent
thereto up to and including the Termination Date (as defined below) the
Disclosure Documents will fully comply with the provisions of the Securities Act
and the published rules and regulations thereunder and will not contain any
untrue statements of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided however, that none of the representations and warranties in this
subparagraph shall apply to statements in, or omissions from, the Disclosure
Documents based upon and in conformity with written information furnished to the
Fund by Placement Agent or on Placement Agent's behalf specifically for use with
reference to Placement Agent in the preparation of the Disclosure Documents.
5.4 From the time of this Agreement, up to and including the
termination date, the Fund will use its best efforts to advise the Placement
Agent of any material liabilities or obligations incurred by the Fund, of any
material adverse changes in the condition of the Fund, and of any legal or
governmental proceedings to which the Fund is party, which may result in any
material adverse change in condition of the Fund.
5.5 To its knowledge, the Interests have been duly authorized
by the Fund, and when subscriptions for the Interests have been accepted by the
Fund as contemplated in the Memorandum and all conditions precedent to the
closing thereof shall have been satisfied, the Interests will have been validly
issued and will conform to the description thereof contained in the Memorandum.
5.6 To its knowledge, the execution and delivery of this
Agreement and the incurrence of the obligations and consummation of the
transactions herein contemplated will not conflict
2
with, or constitute a breach of or default under, the Certificate of Formation
and the Limited Liability Company Agreement or any material contract, indenture,
mortgage, loan agreement or lease, to which the Fund is a party or by which it
may be bound, or any law, administrative regulation or court decree.
5.7 To its knowledge, the Fund is not in violation of the
Certificate of Formation or its Limited Liability Company Agreement or in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by which it
or any of them may be bound whereby such violation or default (whether taken
singly or in the aggregate) would have a material adverse effect upon the Fund.
5.8 To its knowledge, the person or persons who have signed
this Agreement on behalf of the Fund are duly authorized to so sign, and this
Agreement is a valid, legal, and binding agreement of the Fund enforceable in
accordance with its terms.
5.9 At all times subsequent to the date of this Agreement and
up to and including the Termination Date, the representations and warranties
made in this Section 5 will be true and correct with the same effect as if they
had been made on and as of such time, except as may subsequently be disclosed in
writing to the Placement Agent.
6. Further Agreements of the Fund
------------------------------
6.1 The Fund covenants and agrees that it will pay or cause to
be paid (i) all expenses and fees in connection with the preparation, printing,
filing, delivery and shipping of the Memorandum and any amendments or
supplements thereto, and (ii) filing fees and expenses, if any, of registering,
qualifying or perfecting exemption from registration or qualification, the
Interests in each of the States in which the Interests are to be offered in each
case as required by law or regulation.
6.2 If at any time during the term of this Agreement any event
shall have occurred as a result of which, in the opinion of counsel for the
Fund, the Memorandum as amended or supplemented includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend the Memorandum to comply with the Securities Act, the Fund promptly will
prepare and deliver to the Placement Agent an appropriate amendment or
supplement.
6.3 The Fund will deliver to Placement Agent from time to time
without charge as many copies of the Disclosure Documents (and, in the event of
an amendment or supplement to the Disclosure Documents pursuant to the
provisions of this Agreement, of such amended or supplemented Disclosure
Documents) as the Placement Agent may reasonably request.
7. Representations and Warranties of Placement Agent.
--------------------------------------------------
7.1 Placement Agent confirms that Placement Agent is registered
as a broker-dealer and is in good standing under the Exchange Act, Connecticut
law and the securities law of each state in which offers and sales of the
Interests will be conducted by Placement Agent. Placement Agent also confirms
that Placement Agent is a member in good standing of the NASD.
7.2 Placement Agent is not authorized to act as agent of the
Fund in any other connection or transaction, and Placement Agent agrees not to
act as such agent and not to purport to do so without the prior written approval
of the Fund. Placement Agent will use only such written materials (including the
Disclosure Documents) as are provided by the Fund for the purposes of soliciting
purchasers. Placement Agent agrees that if and when the Fund supplies Placement
Agent with copies of
3
any supplement to the Disclosure Documents, Placement Agent will affix such
copies of such supplement to the Disclosure Document already in Placement
Agent's possession, and that thereafter Placement Agent will only distribute
offering materials containing such supplement and that Placement Agent will
accept subscriptions only from investors who have received a copy of the
Disclosure Documents containing such supplement. Placement Agent further agrees
to comply with all instructions from the Fund concerning the destruction of
out-dated Disclosure Documents and the use of supplemented or amended Disclosure
Documents.
7.3 Placement Agent will not sell the Interests pursuant to
this Agreement unless the Disclosure Documents and any amendments or supplements
thereto are furnished to the subscriber a reasonable time prior to sale of the
Interests.
7.4 Placement Agent will use reasonable efforts to select
investors who Placement Agent reasonably believes meet the investor suitability
requirements which are set forth in the Memorandum and Subscription Agreement.
Placement Agent will, for a period of two years, maintain in Placement Agent's
files a copy of the Subscription Agreement for each investor for whom Placement
Agent acts as Placement Agent.
7.5 Placement Agent shall disclose its role as paid Placement
Agent to prospective investors.
7.6 Placement Agent shall comply with applicable law in
connection with its activities pursuant to this Agreement.
8. Dealers. It is agreed that Placement Agent may from time to time
appoint other broker-dealers to participate in the sale, solicitation and
distribution of the Interests. Each such appointment shall be made pursuant to a
written agreement entered between Placement Agent and such broker-dealer
approved as to form and substance by the Fund.
9. Indemnification. The Fund agrees to indemnify and hold harmless
Placement Agent and each person, if any, who controls Placement Agent within the
meaning of Section 15 of the Securities Act against any losses, claims, damages
or liabilities, including reasonable attorneys fees, to which the Placement
Agent or such controlling persons may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Disclosure
Documents or any amendment or supplement to the Disclosure Documents or
furnished in writing to Placement Agent for use in selling the Interests, or
(ii) the omission or alleged omission to state in the Disclosure Documents or
any amendment or supplement to the Disclosure Documents a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and will reimburse the Placement Agent and each such controlling person for any
reasonable legal or other out of pocket expenses reasonably incurred by
Placement Agent or such controlling person in connection with defending any such
claim, liability or action; provided however, that the Fund will not be liable
in any case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Fund by Placement Agent specifically for
use with reference to Placement Agent in the preparation of the Disclosure
Documents or any amendment thereof or supplement thereto or arising out of the
failure of the Placement Agent to perform its undertakings in Section 7 hereof.
This indemnity agreement will be in addition to any liability which the Fund may
otherwise have.
4
10. Effective Date and Termination
------------------------------
10.1 This Agreement shall become effective upon the execution
and delivery of this Agreement by the parties hereto (the "Effective Date").
This Agreement shall terminate upon the earliest to occur of (i) the date upon
which subscriptions for the maximum amount of Interests under the Limited
Liability Company Agreement offered have been accepted by the Fund, which date
the Fund shall designate by notice to Placement Agent in writing; or (ii) sixty
(60) days after written notice by one party to the other party (the "Termination
Date").
10.2 Notwithstanding the foregoing, Placement Agent may
terminate this Agreement by giving prior written notice to the Fund if: (i) the
Fund shall have become a defendant in any litigation which is likely to result
in a judgment having materially adverse consequences for the Fund or there shall
have been, since the respective dates as of which information is given in the
Disclosure Documents, any material adverse change in the condition, financial or
otherwise, of the Fund, which renders it inadvisable to proceed with the
delivery of the Interests, or (ii) there shall have been any major catastrophe,
substantial change in national, international, or world affairs, national
calamity, act of God, or other event or occurrence which, in Placement Agent's
reasonable judgment, will materially disrupt the financial markets of the United
States for an extended period, or (iii) a general banking moratorium shall have
been declared by federal or state authorities.
11. Survival of Warranties and Representations and Indemnification.
The representations and warranties of the Fund, the covenants of Placement Agent
and the indemnity agreement of the Fund, shall remain operative and in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Placement Agent or
any controlling person thereof, and shall survive the delivery of and payment
for the Interests, and any successor of Placement Agent or of any such
controlling person or any legal representative of any such controlling person,
as the case may be, shall be entitled to the benefit of such indemnity
agreement.
12. Notices. Except as in this Agreement otherwise provided, (a)
whenever notice is required by the provisions of this Agreement or otherwise to
be given to the Fund, such notice shall be in writing addressed to the Fund at
0000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000, Xxxxxx, XX, 00000 and (b) whenever notice
is required by the provisions of this Agreement or otherwise to be given to
Placement Agent, such notice shall be in writing addressed to Placement Agent at
Phoenix Equity Planning Corporation, 00 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000,
Attn.: Compliance Officer. Any notice referred to herein may be given in writing
or by telegraph or telephone and if by telegraph or telephone shall be
immediately confirmed in writing. Notice (unless actual) shall be effective upon
mailing or telegraphic transmission, as the case may be.
13. No Assignment; Persons Entitled to Benefit of Agreement. Except as
provided in the next sentence, this Agreement is made solely for the benefit of
Placement Agent, the Fund, or controlling persons thereof, and their respective
successors and assigns, and no other person shall acquire or have any right by
virtue of this Agreement, and the term "successors and assigns," as used in the
Agreement, shall not include any purchaser, as such purchaser, of any of the
Interests. This Agreement is not assignable by either party and any attempted
assignment hereof shall be null and void.
14. Memoranda. The Placement Agent shall maintain a register of all
Memoranda distributed by it and the subscribers to whom they were delivered. The
Placement Agent will use reasonable efforts to obtain the return of any
Memorandum delivered to a subscriber that does not purchase an Interest.
Please confirm your agreement to terms and conditions herein set forth by
signing and returning the enclosed duplicate copy of this Agreement at once to
Phoenix Equity Planning Corporation at the address specified in Section 11
above.
5
Very truly yours,
PHOENIX EQUITY PLANNING CORPORATION
By: _______________________________
NAME, TITLE
DATED: ____________________________
AGREED AND ACCEPTED:
PHOENIX-LJH ADVISORS LLC
By:_____________________________________
NAME, TITLE
DATED:__________________________________
6
