DEUTSCHE PORTFOLIOS
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
September 28, 1997
Edgewood Services, Inc.
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
Re: EXCLUSIVE PLACEMENT AGENT AGREEMENT
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, DEUTSCHE PORTFOLIOS (the "Trust"), an open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), organized as a trust under the laws of the
State of New York, has agreed that Edgewood Services, Inc., a New York
corporation ("Edgewood"), shall be the exclusive placement agent (the "Exclusive
Placement Agent") of beneficial interests ("Trust Interests") of each series of
the Trust.
1. SERVICES AS EXCLUSIVE PLACEMENT AGENT.
1.1 Edgewood will act as Exclusive Placement Agent of the Trust
Interests. In acting as Exclusive Placement Agent under this Exclusive Placement
Agent Agreement, neither EDGEWOOD nor its employees or any agents thereof shall
make any offer or sale of Trust Interests in a manner which would require the
Trust Interests to be registered under the Securities Act of 1933, as amended
(the "1933 Act").
1.2 All activities by Edgewood and its agents and employees as
Exclusive Placement Agent of Trust Interests shall comply with all applicable
laws, rules and regulations, including, without limitation, all rules and
regulations adopted pursuant to the 1940 Act by the Securities and Exchange
Commission (the "Commission").
1.3 Nothing herein shall be construed to require the Trust to accept
any offer to purchase any Trust Interests, all of which shall be subject to
approval by the Trust's Board of Trustees.
1.4 The Trust shall furnish from time to time for use in connection
with the sale of Trust Interests such information with respect to the Trust and
Trust Interests as Edgewood may reasonably request. The Trust shall also furnish
Edgewood upon request with: (a) unaudited semiannual statements of the Trust's
books and accounts prepared by the Trust, and (b) from time to time such
additional information regarding the Trust's financial or regulatory condition
as Edgewood may reasonably request.
1.5 The Trust represents to Edgewood that all registration statements
filed by the Trust with the Commission under the 1940 Act with respect to Trust
Interests have been prepared in conformity with the requirements of such statute
and the rules and
Edgewood Services, Inc.
September 28, 1997
Page 2
regulations of the Commission thereunder. As used in this Agreement the term
"registration statement" shall mean any registration statement filed with the
Commission, as modified by any amendments thereto that at any time shall have
been filed with the Commission by or on behalf of the Trust. The Trust
represents and warrants to Edgewood that any registration statement will contain
all statements required to be stated therein in conformity with both such
statute and the rules and regulations of the Commission; that all statements of
fact contained in any registration statement will be true and correct in all
material respects at the time of filing of such registration statement or
amendment thereto; and that no registration statement will include 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 not misleading to a
purchaser of Trust Interests. The Trust may but shall not be obligated to
propose from time to time such amendment to any registration statement as in the
light of future developments may, in the opinion of the Trust's counsel, be
necessary or advisable. If the Trust shall not propose such amendment and/or
supplement within fifteen days after receipt by the Trust of a written request
from Edgewood to do so, Edgewood may, at its option, terminate this Agreement.
The Trust shall not file any amendment to any registration statement without
giving Edgewood reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the Trust's right to
file at any time such amendment to any registration statement as the Trust may
deem advisable, such right being in all respects absolute and unconditional.
1.6 The Trust agrees to indemnify, defend and hold Edgewood, its
several officers and directors, and any person who controls Edgewood within the
meaning of Section 15 of the 1933 Act or Section 20 of the Securities and
Exchange Act of 1934 (the "1934 Act") (for purposes of this paragraph 1.6,
collectively, the "Covered Persons") free and harmless from and against any and
all claims, demand, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which any Covered Person may incur under
the 1933 Act, the 1934 Act, or otherwise, arising out of or based on any untrue
statement of a material fact contained in any registration statement, private
placement memorandum or other offering material ("Offering Material") or arising
out of or based on any omission to state a material fact required to be stated
in any Offering Material or necessary to make the statements in any Offering
Material not misleading; provided, however, that the Trust's agreement to
indemnify Covered Persons shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any financial and other statements as are
furnished in writing to the Trust by Edgewood in its capacity as Exclusive
Placement Agent for use in the answers to any items of any registration
statement or in any statements made in any Offering Material, or arising out of
or based on any omission or alleged omission to state a material fact in
connection with the giving of such information required to be stated in such
answers or necessary to make the answers not misleading; and further provided
that the Trust's agreement to indemnify Edgewood and the Trust's representation
and warranties hereinbefore set forth in paragraph 1.5 shall not be deemed to
cover any liability to the Trust or its investors to which a Covered Person
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of a Covered Person's
reckless disregard of its obligations and duties under this Agreement. The Trust
should be notified of any action brought against a Covered Person, such
notification to be given by letter or by telegram addressed to the Trust,
Federated Investors Tower, 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000,
Attention: Secretary, with a copy to Xxxx Xxxxxxxxx, Esq., Xxxxxxxx and
Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, promptly after the
summons or other first legal process shall have been duly and completely served
upon such Covered Person. The failure to so notify the Trust of any such action
shall not relieve the Trust from any liability except to the extent the Trust
Edgewood Services, Inc.
September 28, 1997
Page 3
shall have been prejudiced by such failure, or from any liability that the Trust
may have to the Covered Person against whom such action is brought by reason of
any such untrue statement or omission, otherwise than on account of the Trust's
indemnity agreement contained in this paragraph. The Trust will be entitled to
assume the defense of any suit brought to enforce any such claim, demand or
liability, but in such case such defense shall be conducted by counsel of good
standing chosen by the Trust and approved by Edgewood, which approval shall not
be unreasonably withheld. In the event the Trust elects to assume the defense in
any such suit and retain counsel of good standing approved by Edgewood, the
defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them; but in case the Trust does not elect
to assume the defense of any such suit, or in case Edgewood reasonably does not
approve of counsel chosen by the Trust, the Trust will reimburse the Covered
Person named as defendant in such suit, for the fees and expenses of any counsel
retained by Edgewood or the Covered Persons. The Trust's indemnification
agreement contained in this paragraph and the Trust's representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of Covered Persons, and
shall survive the delivery of any Trust Interests. This agreement of indemnity
will inure exclusively to Covered Persons and their successors. The Trust agrees
to notify Edgewood promptly of the commencement of any litigation or proceedings
against the Trust or any of its officers or Trustees in connection with the
issue and sale of any Trust Interests.
1.7 Edgewood agrees to indemnify, defend and hold the Trust, its
several officers and trustees, and any person who controls the Trust within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for
purposes of this paragraph 1.7, collectively, the "Covered Persons") free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the costs of investigating or defending such claims, demands,
liabilities and any counsel fees incurred in connection therewith) that Covered
Persons may incur under the 1933 Act, the 1934 Act, common law, or otherwise,
but only to the extent that such liability or expense incurred by a Covered
Person resulting from such claims or demands shall arise out of or be based on
(i) any untrue statement of a material fact contained in information furnished
in writing by Edgewood in its capacity as Exclusive Placement Agent to the Trust
for use in the answers to any of the items of any registration statement or in
any statements in any other Offering Material, or (ii) any omission to state a
material fact in connection with such information furnished in writing by
Edgewood to the Trust required to be stated in such answers or necessary to make
such information not misleading. Edgewood shall be notified of any action
brought against a Covered Person, such notification to be given by letter or
telegram addressed to Edgewood at Federated Investors Tower, 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000-0000, Attention: Secretary, promptly after the
summons or other first legal process shall have been duly and completely served
upon such Covered Person. Edgewood shall have the right of first control of the
defense of the action with counsel of its own choosing satisfactory to the Trust
if such action is based solely on such alleged misstatement or omission on
Edgewood's part, and in any other event each Covered Person shall have the right
to participate in the defense or preparation of the defense of any such action.
The failure to so notify Edgewood of any such action shall not relieve Edgewood
(i) from any liability except to the extent the Trust shall have been prejudiced
by such failure, or (ii) from any liability that Edgewood may have to Covered
Persons by reason of any such untrue or alleged untrue statement, or omission or
alleged omission, otherwise than on account of Edgewood's indemnity agreement
contained in this paragraph.
1.8 No Trust Interests shall be offered by either Edgewood or the Trust
under any of the provisions of this Agreement and no orders for the purchase or
sale of Trust Interests hereunder shall be accepted by the Trust if and so long
as the effectiveness of the
Edgewood Services, Inc.
September 28, 1997
Page 4
registration statement or any necessary amendments thereto shall be suspended
under any of the provisions of the 1940 Act; provided, however, that nothing
contained in this paragraph shall in any way restrict or have an application to
or bearing on the Trust's obligation to redeem Trust Interests from any investor
in accordance with the provisions of the Trust's registration statement or
Declaration of Trust, as amended from time to time. The Trust shall notify
Edgewood promptly of the suspension of the registration statement or any
necessary amendments thereto, such notification to be given by letter or
telegram addressed to Edgewood at Federated Investors Tower, 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000-0000, Attention: Secretary.
1.9 The Trust agrees to advise Edgewood as soon as reasonably practical
by a notice in writing delivered to Edgewood or its counsel:
(a) of any request by the Commission for amendments to the
registration statement then in effect or for additional information;
(b) in the event of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement then in effect
or the initiation by service of process on the Trust of any proceeding for that
purpose;
(c) of the happening of any event that makes untrue any
statements of a material fact made in the registration statement then in effect
or that requires the making of a change in such registration statement in order
to make the statements therein not misleading; and
(d) of all action of the Commission with respect to any
amendment to any registration statement that may from time to time be filed with
the Commission.
For purposes of this paragraph 1.9, informal requests by or acts of the
Staff of the Commission shall not be deemed actions of or requests by the
Commission.
1.10 Edgewood agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information not otherwise publicly available relative to the Trust and its
prior, present or potential investors and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably withheld and may not be
withheld where Edgewood may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
1.11 In addition to Edgewood's duties as Exclusive Placement Agent, the
Trust understands that Edgewood may, in its discretion, perform additional
functions in connection with transactions in Trust Interests.
The processing of Trust Interest transactions may include, but is not
limited to, compilation of all transactions from Edgewood's various offices;
creation of a transaction tape and timely delivery of it to the Trust's transfer
agent for processing; reconciliation of all transactions delivered to the
Trust's transfer agent; and the recording and reporting of these transactions
executed by the Trust's transfer agent in customer statements; rendering of
periodic customer statements; and the reporting of IRS Form 1099 information at
year end if required.
Edgewood Services, Inc.
September 28, 1997
Page 5
Edgewood may also provide other investor services, such as
communicating with Trust investors and other functions in administering customer
accounts for Trust investors.
Edgewood understands that these services may result in cost savings to
the Trust or to the Trust's investment manager and neither the Trust nor the
Trust's investment manager will compensate Edgewood for all or a portion of the
costs incurred in performing functions in connection with transactions in Trust
Interests. Nothing herein is intended, nor shall be construed, as requiring
Edgewood to perform any of the foregoing functions.
1.12 Except as set forth in paragraph 1.6 of this Agreement, the Trust
shall not be liable to Edgewood or any Covered Persons as defined in paragraph
1.6 for any error of judgment or mistake of law or for any loss suffered by
Edgewood in connection with the matters to which this Agreement relates, except
a loss resulting from the willful misfeasance, bad faith or gross negligence on
the part of the Trust in the performance of its duties or from reckless
disregard by the Trust of its obligations and duties under this Agreement.
1.13 Except as set forth in paragraph 1.7 of this Agreement, Edgewood
shall not be liable to the Trust or any Covered Persons as defined in paragraph
1.7 for any error of judgment or mistake of law or for any loss suffered by the
Trust in connection with the matters to which this Agreement relates, except a
loss resulting from the willful misfeasance, bad faith or gross negligence on
the part of Edgewood in the performance of its duties or from reckless disregard
by Edgewood of its obligations and duties under this Agreement.
2. TERM.
This Agreement shall become effective on the date first above written
and, unless sooner terminated as provided herein, shall continue until December
1, 1997 and thereafter shall continue automatically for successive annual
periods, provided such continuance is specifically approved at least annually by
(i) the Trust's Board of Trustees or (ii) by a vote of a majority (as defined in
the 0000 Xxx) of the Trust's outstanding voting securities, provided that in
either event the continuance is also approved by the majority of the Trust's
Trustees who are not interested persons (as defined in the 0000 Xxx) of the
Trust and who have no direct or indirect financial interest in this Agreement,
by vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable without penalty, on not less than 60
days' notice, by the Board, by a vote of a majority (as defined in the 0000 Xxx)
of the Trust's outstanding voting securities, or by Edgewood. This Agreement
will also terminate automatically in the event of its assignment (as defined in
the 1940 Act and the rules thereunder).
3. REPRESENTATIONS AND WARRANTIES.
Edgewood and the Trust each hereby represents and warrants to the other
that it has all requisite authority to enter into, execute, deliver and perform
its obligations under this Agreement and that, with respect to it, this
Agreement is legal, valid and binding, and enforceable in accordance with its
terms.
4. CONCERNING APPLICABLE PROVISIONS OF LAW, ETC.
Edgewood Services, Inc.
September 28, 1997
Page 6
This Agreement shall be subject to all applicable provisions of law,
including the applicable provisions of the 1940 Act and to the extent that any
provisions herein contained conflict with any such applicable provisions of law,
the latter shall control.
The laws of the Commonwealth of Pennsylvania shall, except to the
extent that any applicable provisions of Federal law shall be controlling,
govern the construction, validity and effect of this Agreement, without
reference to principles of conflicts of law.
The undersigned officer of the Trust has executed this Agreement not
individually, but as President under the Trust's Declaration of Trust, dated as
ofSeptember 28, 1997. Pursuant to the Declaration of Trust the obligations of
this Agreement are not binding upon any of the Trustees or investors of the
Trust individually, but bind only the trust estate.
If the contract set forth herein is acceptable to you, please so
indicate by executing the enclosed copy of this Agreement and returning the same
to the undersigned, whereupon this Agreement shall constitute a binding contract
between the parties hereto effective at the closing of business on the date
hereof.
Yours very truly,
DEUTSCHE PORTFOLIOS
By:
President
Accepted:
EDGEWOOD SERVICES, INC.
By:
