MASTER PLACEMENT AGENCY AGREEMENT
Exhibit 99.2(h)
AGREEMENT, made as of the 22nd day of
October, 2007, between Xxxx Xxxxxxx Distributors LLC ("Distributors")
and Declaration Management & Research LLC (“DMR”) (collectively, the
parties);
WHEREAS, Distributors is registered as
a broker-dealer with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 ("1934 Act") and is a member of the National
Association of Securities Dealers, Inc. ("NASD");
WHEREAS,
DMR is registered as an investment adviser with the SEC under the Investment
Advisers Act of 1940 and sponsors and manages certain private investment funds
("Funds") that are excluded from the term "investment company" as defined in the
Investment Company Act of 1940;
WHEREAS,
the parties desire to have Distributors act as placement agent with respect to
the private offering and sale of interests ("Interests") in the Funds in the
United States and to assume responsibility for all of the securities activities
of each "person associated" (as that term is defined in Section 3(a)(18) of the
0000 Xxx) with Distributors and engaged directly or indirectly in the sale of
the Interests ("associated persons"); and
WHEREAS, Distributors wishes to utilize
the services of employees of DMR, who will be deemed to be associated persons of
Distributors, to perform various support and administrative functions in
connection with Distributors' responsibilities under this
Agreement;
NOW, THEREFORE, the parties agree as
follows:
Appointment
of Distributors; Distributors’ Responsibility for its own and its Associated
Persons’ Legal Compliance in Offer, Sale and Delivery of Interests
1. Distributors
shall act as the placement agent for the Interests, and as such will assume full
responsibility for the securities activities of all of its associated persons.
Distributors will train the associated persons, register associated persons as
its registered representatives or principals (as required), and supervise and
control them in the performance of their securities activities. Distributors
shall assume full responsibility for the continued compliance by itself and the
associated persons, including registered representatives and registered
principals, with all NASD requirements and Federal and state legal requirements,
to the extent applicable, in connection with the offer, sale and delivery of the
Interests.
Distributors’
Offer and Sale of Interests
2. Distributors
shall offer for sale Interests on behalf of DMR and the relevant Fund in each
state in which the Interests may be lawfully sold. Distributors
assume no duty, responsibility or obligation, however, with respect to the
qualification of the Interests under the laws of any jurisdiction.
Terms,
Conditions and Compensation as to Offers and Sales by Distributors
3. Offers
and sales of Interests shall be on such terms and conditions as Distributors and
DMR shall determine and shall be for compensation determined as provided
herein.
Suitability
4. Distributors,
through one of its authorized registered representatives, will solicit offers to
buy Interests from only investors who Distributors has reasonable grounds to
believe are accredited investors within the meaning of Regulation D promulgated
under the Securities Act of 1933, as amended.
Means
of Purchase Payment
5. Initial
and any subsequent purchase payments for Interests shall be made to the
applicable Fund, or as otherwise specified in such Fund's offering documents or
subscription agreement.
Compensation
to Distributors
6.
DMR
will pay Distributors a $7,500 service fee due each year on May 1st and
will otherwise
reimburse Distributors for services and facilities provided by Distributors
pursuant to this Agreement. The service fee includes all direct and
directly allocable expenses reasonably and equitably determined to be
attributable to DMR by Distributors (including, without limitation, office
clerical expenses, marketing support and administrative services), plus a
reasonable charge for direct overhead.
Subject
to the following paragraph, DMR will also pay Distributors a fee of $20,000 for
each private offering of Interests. Such amounts payable to
Distributors shall comply with applicable compensation rules, terms and
procedures as Distributors and DMR mutually agree upon from time to
time.
The
compensation provided to Distributors shall be determined at fair market value
by reference to the arm’s length principle by the Organization of Economic
Cooperation and Development, consistent with the interpretation adopted by The
Canada Revenue Agency (“CRA”) and Internal Revenue Service (“IRS”) pursuant to
Section 247 of the Income Tax Act (Canada) and Section 482 of the Internal
Revenue Code (United States), respectively. The compensation will be
adjusted for any CRA or IRS audit adjustments or Competent Authority audit
adjustments if the parties believe such adjustments are appropriate, as
specified in the following paragraph.
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Compensation
Adjustment Clause
(i) The
parties agree that the fees are subject to adjustment (a “primary fee
adjustment”) by Distributors based on the annual fair market value of the
services attributable to the Interests. Distributors agree to notify DMR
in writing of any primary fee adjustment. In the event the primary
fee adjustment results in payment of additional fee, DMR shall pay to
Distributors the amount of such adjustment within thirty (30) days of receipt of
a notice of fee adjustment. In the event the primary fee adjustment
results in a reduction of the fees already paid, Distributors shall pay to DMR
the amount of such adjustment within thirty (30) days of receipt of a notice of
primary fee adjustment.
(ii) Further
and notwithstanding any other provision of this Agreement, the parties confirm
and agree that the fees contemplated hereunder and specifically in this
Compensation Adjustment Clause (including without restriction any primary fee
adjustment) are intended to be neither greater nor less than the fair market
value of the relevant services in the context of the circumstances in which such
services are provided. If any taxing authority having jurisdiction in
accordance with the provisions of applicable law issues, or proposes to issue,
assessments or reassessments of additional liability for taxes or any other
subject by reason of asserting that the amounts of such fees are less than or
greater than the fair market value of the relevant services in the context of
the circumstances in which such services are provided (a “secondary service fee
adjustment”) and the parties agree with the adjustment issued or
proposed by such taxing authority or if they do not agree, any
dispute in that connection has been finally determined in accordance with
applicable law including without limitation a proceeding between relevant taxing
authorities acting as the Competent Authorities in accordance with the terms of
an income tax convention, then the amount of such secondary service fee
adjustment shall be paid by Distributors or DMR, as the case may be, in
accordance with applicable law in a period less than thirty (30)
days.
(iii)
The parties specifically confirm their intention and agreement that neither the
amount of any primary fee adjustment nor the amount of any secondary service fee
adjustment is or should be understood to be or treated as an amount in the
nature of a dividend, deemed dividend or other distribution of
income.
Certain
Services to be Provided by DMR; Control, Status, Compensation and Activities of
DMR Personnel that Provide Said Services
7.
DMR
agrees to provide support, administrative and other such services to
Distributors,
including personnel, to assist Distributors in the performance of its duties as
placement agent for the Interests. In providing such services, all
personnel of DMR engaged in the sale of Interests shall at all times be properly
licensed with the NASD and be subject to the supervision and control of
Distributors. All such personnel are hereby acknowledged and deemed
to be associated persons of Distributors and therefore subject to the regulatory
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requirements
and compliance procedures applicable to all registered representatives or
principals of Distributors including but not limited to annual compliance
meetings, office inspections, AML and noncash compensation rules. DMR
will accept Distributors supervision of the sale of Interests including its
determination as to whether the 0000 Xxxxxx Xxxxxxxxx, XxXxxx, Xxxxxxxx location
shall be deemed a “Branch Office” (or other appropriate designation) pursuant to
NASD Rule 3010.
DMR
aggress to promptly notify Distributors of the termination of any DMR employees
involved in the sale or offering of the Interests or the services described in
this provision.
8.
For
the convenience of the parties, any compensation owed to such personnel in
connection
with the sale of Interests will be paid directly by DMR to such personnel as
part of their salaries, consistent with such employee compensation and employee
benefit plans as are maintained by DMR. DMR shall bear all employer
responsibilities and costs, including overhead, salaries, benefits, and taxes,
associated with the personnel made available to
Distributors. Distributors acknowledges that personnel provided by
DMR will not be exclusively engaged in securities distribution-related
activities and that they may have other, non-securities-distribution,
responsibilities as employees of DMR.
Maintenance
of Certain Books and Records
9.
The
books, accounts and records of Distributors and DMR as to all transactions
hereunder
shall be maintained so as to disclose clearly and accurately the nature and
details of the transactions to ensure compliance with applicable regulatory and
reporting requirements. To the extent that any of Distributors or DMR
maintains on behalf of any other of them any records required to be maintained
by the other pursuant to applicable federal or state securities laws,
regulations or NASD rules, such records shall be maintained as agent for the
other party and remain the property of the party so required to maintain them,
shall be surrendered promptly to that party upon its request, and shall at all
times be subject to inspection by Distributors, SEC, NASD and any other
appropriate governmental agency. DMR agrees to maintain all records
pertaining to the sale of the Interests in an easily accessible place for two
years and thereafter in accordance with Distributors’ books and records
requirements as set forth in the Xxxx Xxxxxxx Distributors LLC Compliance and
Supervisory Manual, as amended.
DMR
to Pay Certain Expenses
10. DMR
will pay the expenses of preparing and printing all Fund offering documents and
agreements, and for like expenses actually incurred in connection with the
offering, sale and delivery of Interests. DMR will furnish
Distributors with current versions of such offering documents and agreements in
such numbers as Distributors may reasonably require from time to
time.
Distributors
to Pay Certain Expenses
11. Distributors
shall pay all fees and expenses in connection with its qualification as a
broker-dealer, as contemplated by this Agreement.
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Limit
on Information that Distributors May Disseminate
12. In
connection with the offer, sale or delivery of Interests, Distributors will not
give any information or make any representation other than information and
representations contained in or not inconsistent with any applicable Fund
offering documents.
Offering
Materials
13. DMR
is responsible for the accuracy and completeness of the statements contained in
the Private Placement Memoranda and other offering materials relating to the
sale of Interests. Distributors will review the offering materials and agrees to
use its best efforts to obtain any approvals or clearances required from the
NASD, if applicable. Any offering materials prepared by DMR or its
designee must be approved by Distributors prior to use.
Indemnification
14.
DMR
will indemnify and hold harmless Distributors from any and all claims,
losses,
liabilities, damages and expenses whatsoever arising out of any untrue statement
or alleged untrue statement of material fact contained in the private placement
memoranda or offering materials relating to the Funds and Interests or the
omission or alleged omission therefrom and any violations by DMR of its
representations and obligations set forth in this Placement
Agreement.
15.
Distributors
will indemnify and hold harmless DMR against any and all
claims, losses,
liabilities, damages and expenses whatsoever directly arising out its
responsibilities as Placement Agent of the Interests and any violation by
Distributors of its representations and obligations set forth in this Placement
Agreement.
Change,
Waiver, Discharge or Termination of this Agreement
16. No
provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.
Confirmations
17. If
and to the extent that Distributors and DMR so agree, DMR will, on behalf of
Distributors, send any “confirmations” legally required to be sent in connection
with issuance or receipt of payments under any of the Interests.
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Indebtedness
18. Distributors
shall have no right to incur any indebtedness on behalf of DMR pursuant to this
Agreement. Distributors hereby authorizes DMR to set off
Distributor’s liabilities to DMR against any and all amounts otherwise payable
to Distributors pursuant hereto.
This
Agreement Interpreted in Light of Securities Law Requirements
19. This
Agreement shall be subject to the applicable provisions of the Federal
securities laws and the rules, regulations, and rulings thereunder, including
such exemptions as the SEC may grant, and the terms hereof shall be interpreted
and construed in accordance therewith.
Agreement
by Distributors to Comply With Law
20. Distributors
shall, in offering, selling or delivering Interests, or in otherwise performing
its obligations hereunder, comply with all laws and regulations, whether Federal
or state, including but not limited to the recordkeeping and sales supervision
requirements of such laws and regulations and rules of the NASD.
Agreement
by DMR to Comply with Law
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21.
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DMR
shall, in offering, selling or delivering Interests, or in otherwise
performing its obligations hereunder, comply with all federal and state
laws and regulations. Counsel for DMR shall provide
Distributors for each private offering a “blue sky memo” listing those
jurisdictions in which the Interests may be offered and sold as of the
time of commencement of the offering and shall update the “blue sky memo”
as required, and at the time of commencement of the offering (and at the
time of any amendment to the offering memorandum) confirm in
writing to Distributors that such counsel has reviewed the
offering memorandum (other than any financial statements or projections)
and is unaware of any untrue statement of material fact or omission
contained in the offering memorandum that would render it
misleading.
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For each
offering, DMR shall provide to Distributors a certification from a DMR Officer
stating that he/she has reviewed the offering memorandum and that after
reasonable investigation has reasonable grounds to believe that as of its date,
the statements in the offering memorandum were true and that there was no
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
Complaints;
Regulatory and Judicial Proceedings
22. DMR
and Distributors agree that (a) each party shall advise the other promptly of
any substantive customer complaint that concerns any Fund or Interests, or of
any notice of any regulatory investigation or proceeding or judicial process
that concerns any Fund or Interests and
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that is
received by a party with respect to Distributors or any agent, principal or
representative or which may affect the sale of the Interests, and (b)
Distributors and DMR will cooperate in investigating such complaint, and any
response to such complaint which any of them has prepared will be sent to the
other parties for approval not less than five business days prior to its
transmittal to the customer or regulatory authority.
Notices
23. All
notices under this Agreement shall be given in writing and addressed as follows,
or addressed to such other addresses as may be communicated from one party to
the other parties:
(a) if
to Distributors, to:
Xxxx Xxxxxxx Distributors
LLC
000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx Xxxxxx, Chief
Compliance Officer
(b)
if to DMR, to:
Declaration Management & Research
LLC
0000 Xxxxxx Xxxxxxxxx, Xxxxx
000
XxXxxx,
XX 00000
Attention: President
with a copy to:
Declaration Management & Research
LLC
Legal Xxxxxx
000
Xxxxxxxxx Xx., X-00-00
Xxxxxx,
XX 00000
Attention: Xxxxxx
Xxxxx
Termination
24. This
Agreement shall terminate automatically if it shall be assigned. In
addition, this Agreement may be terminated at any time on 90 days' written
notice to the other party hereto, without the payment of any penalty, by
Distributors or DMR.
Governing
Law; Headings
25. This
Agreement shall be construed and governed in accordance with the laws of the
Commonwealth of Massachusetts. Headings in this Agreement are for
convenience of reference only and shall have no substantive effect.
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Counterparts
26. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall be deemed one instrument.
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed as of the day and year above
written.
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