August 19, 2002
Xxxxxxx Distributors, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
Re: Exclusive Placement Agent Agreement
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This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned open-end management investment companies (each a
"Trust" and collectively, the "Trusts") registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), each organized as a business trust
under the laws of the State of New York, has agreed that Xxxxxxx Distributors,
Inc., a Delaware corporation ("SDI"), shall be the exclusive placement agent
(the "Exclusive Placement Agent") of beneficial interests ("Trust Interests") of
each series of the respective Trusts.
1. Services as Exclusive Placement Agent.
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1.1 SDI will act as Exclusive Placement Agent of the Trust Interests.
In acting as Exclusive Placement Agent under this Exclusive Placement Agent
Agreement, neither SDI 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 SDI and its agents and employees as Exclusive
Placement Agent of Trust Interests shall comply with all applicable laws, rules
and regulations of any U.S. governmental authority, 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 a 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 or their delegates.
1.4 The Trusts 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 SDI may
reasonably request. The Trusts shall prepare and furnish, at their own cost and
expense, all offering documents to be used by the Exclusive Placement Agent to
offer Trust Interests including, without limitation, the Confidential Private
Placement Memorandum, the Confidential Statement of Additional Information, and
the Subscription Agreement (collectively, the "Approved Offering Documents").
The Trusts shall also furnish SDI 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 SDI may reasonably request.
1.5 Each Trust represents to SDI 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 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 a
Trust. Each Trust represents and warrants to SDI 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 Trusts 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 a Trust shall not propose such amendment and/or
supplement within fifteen days after receipt by the Trust of a written request
from SDI to do so, SDI may, at its option, terminate this Agreement. The Trusts
shall not file any amendment to any registration statement without giving SDI
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit a 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 Each Trust severally agrees to indemnify, defend and hold SDI, its
several officers and directors, and any person who controls SDI within the
meaning of Section 15 of the 1933 Act or Section 20 of the Securities 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,
demands, 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, the laws or regulations of any U.S. or foreign governmental authority,
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
Approved Offering Documents or other offering material from time to time
furnished by or on behalf of the Trust ("Offering Material") or (ii) 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 each 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 SDI 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 each Trust's agreement to
indemnify SDI and each 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. A Trust shall be notified of any action brought
against a Covered Person, such notification to be given by letter or by telegram
addressed to the Trust, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention: Xxxxxx
X. Xxxxxx, Secretary, with a copy to Xxxxxx X. Xxxxxxx, Esq., Xxxxxxx Xxxx &
Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 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 a Trust of any such action shall not
relieve the Trust (i) from any liability except to the extent the Trust shall
have been prejudiced by such failure, or (ii) from any liability that the Trust
may have to the Covered Person against whom such action is brought by reason of
any such untrue or alleged untrue statement, or omission or alleged omission,
otherwise than on account of the Trust's indemnity agreement contained in this
paragraph. Each 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 SDI, which approval shall not be unreasonably withheld. In the event a Trust
elects to assume the defense in any such suit and retain counsel of good
standing approved by SDI, 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 a Trust does not elect to assume the defense of any such suit, or in case
SDI 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 SDI or the Covered Persons. Each Trust's
indemnification agreement contained in this paragraph and each 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. Each Trust agrees to notify SDI 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 SDI agrees to indemnify, defend and hold each Trust, its several
officers and trustees, and any person who controls a 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 or a material fact contained in information furnished in writing by
SDI in its capacity as Exclusive Placement Agent to the Trusts 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 SDI to a Trust required to be stated in such answers or necessary to
make such information not misleading. SDI shall be notified of any action
brought against a Covered Person, such notification to be given by letter or
telegram addressed to SDI at 000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 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 SDI of any
such action shall not relieve SDI (i) from any liability except to the extent a
Trust shall have been prejudiced by such failure, or (ii) from any liability
that SDI may have to the Covered Person against whom such action is brought by
reason of any such untrue or alleged untrue statement, or omission or alleged
omission, otherwise than on account of SDI's indemnity agreement contained in
this paragraph. SDI 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 SDI and approved by the
Trust, which approval shall not be unreasonably withheld. In the event that SDI
elects to assume the defense in any such suit and retain counsel of good
standing approved by a Trust, 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 SDI does not elect to assume the defense of any such suit, or in
case a Trust reasonably does not approve of counsel chosen by SDI, SDI will
reimburse the Covered Person named as defendant in such suit, for the fees and
expenses of any counsel retained by the Trust or the Covered Persons. SDI's
indemnification agreement contained in this paragraph and SDI'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. SDI
agrees to notify each Trust promptly of the commencement of any litigation or
proceedings against SDI or any of its officers or directors in connection with
the issue and sale of any Trust Interests.
1.8 No Trust Interests shall be offered by either SDI or the Trusts
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 Trusts if and so long
as the effectiveness of the 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 a 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. Each Trust shall notify SDI promptly of the suspension of its registration
statement or any necessary amendments thereto, such notification to be given by
letter or telecopy addressed to SDI at 000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000.
1.9 Each Trust agree to advise SDI as soon as reasonably practical by a
notice in writing delivered to SDI or its counsel:
(a) of any request by the Commission for amendments to the registration
statement men m 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 a 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 SDI agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trusts all records and
other information not otherwise publicly available relative to the Trusts and
their respective 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 a Trust, which approval shall not be unreasonably
withheld and may not be withheld where SDI 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 a Trust.
1.11 In addition to SDI's duties as Exclusive Placement Agent, the
Trusts understand that SDI 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 SDI's various offices; creation
of a transaction tape and timely delivery of it to the Trusts' transfer agent
for processing; reconciliation of all transactions delivered to the Trusts'
transfer agent; and the recording and reporting of these transactions executed
by the Trusts' transfer agent in customer statements; rendering of periodic
customer statements; and the reporting of IRS Form 1099 information at year end
if required.
SDI may also provide other investor services, such as communicating
with Trust investors and other functions in administering customer accounts for
Trust investors.
SDI understands that these services may result in cost savings to the
Trusts or to the Trusts' investment manager and neither the Trusts nor the
Trusts' investment manager will compensate SDI 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 SDI
to perform any of the foregoing functions.
1.12 Except as set forth in paragraph 1.6 of this Agreement, the Trusts
shall not be liable to SDI 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 SDI 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 a Trust in the performance of its
duties or from reckless disregard by a Trust of its obligations and duties under
this Agreement.
1.13 Except as set forth in paragraph 1.7 of this Agreement, SDI shall
not be liable to any 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 a 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 SDI in the performance of its duties or from reckless disregard by SDI
of its obligations and duties under this Agreement.
2. Term.
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This Agreement shall become effective on the date first written above
and, unless sooner terminated as provided herein, shall continue until one year
from the date first written above, and thereafter shall continue automatically
for successive annual periods, provided such continuance is specifically
approved at least annually with respect to each Trust by (i) each Trust's Board
of Trustees or (ii) by a vote of a majority (as defined in the 0000 Xxx) of each
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 a Trust's outstanding
voting securities, or by SDI. 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.
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SDI and each 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. Activities of SDI.
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Except to the extent necessary to perform SDI's obligations hereunder,
nothing herein shall be deemed to limit or restrict SDI's right, or the right of
any of SDI's officers, directors or employees who may also be a trustee, officer
or employee of the Trusts, or persons otherwise affiliated persons of the Trusts
to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
5. Concerning Applicable Provisions of Law, etc.
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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 State of New York 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 each Trust has executed this Agreement not
individually, but as President under each Trust's Declaration of Trust, as
amended. 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 correct 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.
6. Miscellaneous.
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(e) Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed all as of the day and year first above written.
Very truly yours,
By: ________________________
Xxxxx X. Xxxxxxxxx
Assistant Secretary, on behalf of the
Trusts listed on Exhibit A hereto
Accepted:
Xxxxxxx Distributors, Inc.
By: ________________________
Xxxxxxxx X. Xxxx
President
EXHIBIT A
TO
EXCLUSIVE PLACEMENT AGENT AGREEMENT
August 19, 2002
Pursuant to the Exclusive Placement Agreement, SDI shall be Exclusive
Placement Agent with respect to the following Trusts:
Name of Trust:
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