Exhibit 1.01
AMENDED AND RESTATED SELLING AGREEMENT
Dated as of _______________, 1998
Xxxx Xxxxxx Xxxxxxxx Inc.
Two World Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxx Xxxxxx Spectrum Global Balanced L.P. ("Global" (formerly Xxxx
Xxxxxx Spectrum Balanced L.P.)), a limited partnership organized pursuant to a
certificate of limited partnership filed on April 29, 1994, as amended by a
certificate of amendment thereto filed on *, 1998, and an amended and restated
limited partnership agreement dated as of *, 1998 under the Delaware Revised
Uniform Limited Partnership Act (the "DRULPA"); Xxxx Xxxxxx Spectrum Strategic
L.P. ("Strategic") and Xxxx Xxxxxx Spectrum Technical L.P. ("Technical"), each a
limited partnership organized pursuant to a certificate of limited partnership
filed on April 29, 1994 and an amended and restated limited partnership
agreement dated as of *, 1998 under the DRULPA; and Xxxx Xxxxxx Spectrum Select
L.P. ("Select" (formerly Xxxx Xxxxxx Select Futures Fund L.P.)), a limited
partnership organized pursuant to a certificate of limited partnership filed on
March 21, 1991, as amended by a certificate of amendment thereto filed on *,
1998, and an amended and restated limited partnership agreement dated as of *,
1998, under the DRULPA ("with Global, Strategic, Technical, and Select together,
the "Partnerships," and each, a "Partnership," and the certificates of limited
partnership of Global, Strategic, Technical, and Select (as amended in the case
of Global and Select), are each hereinafter referred to as a "Certificate of
Limited Partnership, and the amended and restated limited partnership agreements
of Global, Strategic, Technical, and Select, are each hereinafter referred to as
a "Limited Partnership Agreement"), propose, subject to the terms and conditions
set forth in this Agreement, to concurrently offer, sell, and issue up to *, *,
*, and * Units of Limited Partnership Interest (the "Units") of Global,
Strategic, Technical, and Select, respectively.
Demeter Management Corporation, a Delaware corporation, is the sole
general partner of each Partnership (the "General Partner"). Certain registered
commodity trading advisors (each, a "Trading Advisor" and collectively, the
"Trading Advisors") are acting as the trading advisors with respect to the
management of the Partnerships' trading activities pursuant to the respective
amended and restated management agreements among the applicable Trading
Advisor(s), the applicable Partnership, and the General Partner (each, a
"Management Agreement" and collectively, the "Management Agreements").
Xxxx Xxxxxx Xxxxxxxx Inc., a Delaware corporation ("DWR"), acts as
selling agent pursuant to this Agreement and acts as the non-clearing commodity
broker (in such capacity, the "Non-Clearing Broker") pursuant to the respective
amended and restated customer agreements between the Non-Clearing Broker and
Global, Strategic, Technical, and
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Select, respectively, each dated as of December 1, 1997 (collectively, the "DWR
Customer Agreements"). Xxxx Futures, Inc., a Delaware corporation (the "Clearing
Broker" and, together with the Non-Clearing Broker, the "Commodity Brokers"),
acts as the clearing commodity broker pursuant to the respective customer
agreements among the Clearing Broker, the Non-Clearing Broker and Global,
Strategic, Technical, and Select, respectively, each dated as of December 1,
1997 (collectively, the "CFI Customer Agreements"). Subscriptions for Units will
be held by The Chase Manhattan Bank (in such capacity, the "Escrow Agent")
pursuant to an escrow agreement, as amended, among the Partnerships, The Chase
Manhattan Bank and DWR, dated as of *, 1998 (the "Escrow Agreement").
This Agreement amends and restates the Selling Agreement dated as of
September 1, 1994. as amended by Amendment Nos. 1 and 2 thereto dated January 31
and April 30, 1996, respectively, among Global, Strategic and Technical, the
General Partner and DWR.
1. Representations and Warranties of the General Partner and the
Partnerships. The General Partner represents and warrants to each of the other
parties hereto as to each Partnership and itself, and each Partnership,
severally and not jointly, represents and warrants to DWR as to itself with
respect to the agreements to which it is a party and with respect to the other
applicable documents, as follows:
(a) Global, Strategic and Technical have provided to DWR, and filed
with the Securities and Exchange Commission (the "SEC"): (i) on June 10, 1994, a
registration statement on Form S-1 (SEC File No. 33-80146), for the registration
of an aggregate of 10,000,000 Units (subsequently allocated 2,000,000, 4,000,000
and 4,000,000 Units to Global, Strategic and Technical, respectively), and on
August 25, 1994, Amendment No. 1 to such registration statement, which
registration statement was declared effective by the SEC on September 15, 1994
(collectively, the "1994 Registration Statement"); (ii) on June 30, 1995,
Post-Effective Amendment No. 1 to the 1994 Registration Statement, which
Post-Effective Amendment was declared effective by the SEC on June 30, 1995;
(iii) on January 19, 1996, a registration statement on Form S-1 (SEC File No.
333-00494), for the registration of 5,000,000, 6,000,000 and 9,000,000 Units of
Global, Strategic and Technical, respectively, and on January 29 and 31, 1996,
Amendment Nos. 1 and 2, respectively, to such registration statement, which
registration statement was declared effective by the SEC on January 31, 1996
(collectively, the "1996A Registration Statement"); (iv) on April 4, 1996, a
registration statement on Form S-1 (SEC File No. 333-3222), for the registration
of 1,000,000, 2,500,000 and 5,000,000 Units of Global, Strategic and Technical,
respectively, and on April 29, 1996, Amendment No. 1 to such registration
statement, which registration statement was declared effective by the SEC on
April 30, 1996 (collectively, the "1996B Registration Statement"); (v) on August
30, 1996, Post-Effective Amendment No. 1 to the 1996B Registration Statement,
which Post-Effective Amendment was declared effective by the SEC on September 9,
1996; (vi) on October 9, 1996, Post-Effective Amendment No. 2 to the 1996B
Registration Statement, which Post-Effective Amendment was declared effective by
the SEC on October 11, 1996; and (vii) on April 16, 1997, Post-Effective
Amendment No. 3 to the 1996B Registration Statement, which Post-Effective
Amendment was declared effective by the SEC
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on April 25, 1997, each under the Securities Act of 1933, as amended (the "1933
Act") and the rules and regulations promulgated by the SEC thereunder (the "SEC
Regulations").
(b) The Partnerships have also provided to DWR, and filed with the
SEC on *, 1998: (i) Post-Effective Amendment No. 4 to the 1996B Registration
Statement, relating solely to the continuing offering of unsold Units of Global
and Strategic ("Post-Effective Amendment 4"); (ii) a registration statement on
Form S-1 (SEC File No. 333-o), relating to the continuing offering of unsold
Units, as well as the registration of 5,000,000 additional Units, of Technical
(the "Technical Registration Statement"); and (iii) a registration statement on
Form S-1 (SEC File No. 333-o), for the registration of o Units of Select (the
"Select Registration Statement" and, collectively with the 1996B Registration
Statement, as amended through Post-Effective Amendment 4 as regards Global and
Strategic, and the Technical Registration Statement the "1998 Registration
Statements"), each of the 1998 Registration Statements include the same
preliminary prospectus (the "Prospectus") which has not been distributed to the
public.
(c) Copies of each of the 1994, 1996A, 1996B and 1998 Registration
Statements have also been filed with: (i) the Commodity Futures Trading
Commission (the "CFTC") under the Commodity Exchange Act (the "CEAct") and the
rules and regulations promulgated thereunder by the CFTC (the "CFTC Rules");
(ii) NASD Regulation, Inc. (the "NASD") pursuant to its Conduct Rules; and (iii)
the National Futures Association (the "NFA") in accordance with NFA Compliance
Rule 2-13.
(d) Notwithstanding Sections 1(a), 1(b), and 1(c) hereof: (i) if
Global and Strategic file another post-effective amendment or amendments to the
1996B Registration Statement, or if Technical or Select files an amendment or
amendments to the Technical or Select Registration Statement, as applicable,
then the term "1998 Registration Statements" shall, from and after the filing of
such amendment(s), refer to the applicable 1998 Registration Statement, as
amended by such amendment(s), and the term "Prospectus" shall refer to the
amended prospectus then on file with the SEC as part of the applicable 1998
Registration Statement; and (ii) if a prospectus as first issued in compliance
with the SEC Regulations shall differ from the prospectus on file at the time
the applicable 1998 Registration Statement or any amendment thereto shall have
become effective, the term "Prospectus" shall refer to the prospectus most
recently so issued from and after the date on which it shall have been issued,
including any amendment or supplement there. The Partnerships will not file any
amendment to the 1998 Registration Statements or any amendment or supplement to
the Prospectus unless DWR has received reasonable prior notice of and a copy of
such amendments or supplements and has not reasonably objected thereto in
writing.
(e) The Limited Partnership Agreements provide for the subscription
for and sale of the Units; all action required to be taken by the General
Partner and the Partnerships as a condition to the sale of the Units to
qualified subscribers therefor has been, or prior to each Monthly Closing (as
defined in Section 5(c) hereof) will have been, taken; and, upon payment of the
consideration therefor specified in each accepted Subscription and Exchange
Agreement and Power of Attorney, in the form included in the Prospectus (the
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"Subscription Agreement"), the Units will constitute valid limited partnership
interests in the Partnership for which Units were subscribed.
(f) Each Partnership is a limited partnership duly organized
pursuant to a Certificate of Limited Partnership, a Limited Partnership
Agreement and the DRULPA, and is validly existing under the laws of the State of
Delaware with full power and authority to engage in the trading of futures
interests (as defined in the Prospectus) and to engage in its other contemplated
activities as described in the Prospectus; each Partnership has received a
certificate of authority to do business in the State of New York as provided by
Section 121-902 of the New York Revised Limited Partnership Act and is qualified
to do business in each jurisdiction in which the nature or conduct of its
business requires such qualification and where the failure to be so qualified
could materially adversely affect the Partnership's ability to perform its
obligations hereunder or under its Limited Partnership Agreement, its Management
Agreement(s), its DWR Customer Agreement, its CFI Customer Agreement, or the
Escrow Agreement, as applicable.
(g) The General Partner is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware, and is
qualified to do business and is in good standing as a foreign corporation under
the laws of the State of New York and in each other jurisdiction in which the
nature or conduct of its business requires such qualification and where the
failure to be so qualified could materially adversely affect the General
Partner's ability to perform its obligations hereunder or under the Limited
Partnership Agreements, the Management Agreements, or as described in the
Prospectus.
(h) Each of the Partnerships and the General Partner has full
partnership and corporate power and authority, as applicable, under applicable
law to conduct its business and perform its respective obligations, as
applicable, under the Limited Partnership Agreements, the Management Agreements,
the DWR Customer Agreements, the CFI Customer Agreements, the Escrow Agreement,
and this Agreement.
(i) The 1998 Registration Statements and the Prospectus contain all
statements and information required to be included therein by the CEAct and the
CFTC Rules. When each of the 1998 Registration Statements becomes effective
under the 1933 Act and at all times subsequent thereto up to and including each
Monthly Closing, the 1998 Registration Statements and the Prospectus will comply
in all material respects with the requirements of the 1933 Act, the SEC
Regulations, the CEAct, the CFTC Rules, and the rules of the NASD and the NFA.
As of their respective effective dates, the 1998 Registration Statements will
not contain any 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. The Prospectus, as of its date of issue and as of each Monthly
Closing, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading. Any
supplemental sales literature employed in offering the Units ("Sales
Literature"), when read in conjunction with the Prospectus, as of its date of
issue and as of each Monthly Closing, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to
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make the statements therein, in light of the circumstances under which such
statements were made, not misleading. The Sales Literature will comply with the
1933 Act, the SEC Regulations, the CEAct, the CFTC Rules, and the rules of the
NASD and the NFA. This representation and warranty shall not, however, apply to
any statement or omission in the 1998 Registration Statements, Prospectus or
Sales Literature relating to DWR or any Trading Advisor or made in reliance upon
and in conformity with information furnished by DWR or any Trading Advisor.
(j) The accountants who certified the financial statements filed
with the SEC as part of the 1998 Registration Statements are, with respect to
the General Partner and the Partnerships, independent public accountants as
required by the 1933 Act and the SEC Regulations.
(k) The financial statements filed as part of the 1998 Registration
Statements and those included in the Prospectus present fairly the financial
position of each Partnership and of the General Partner as of the dates
indicated; and said financial statements have been prepared in conformity with
generally accepted accounting principles (as described therein).
(l) Since the respective dates as of which information is given in
the 1998 Registration Statements and the Prospectus, except as may otherwise be
stated in or contemplated by the 1998 Registration Statements and the
Prospectus, there has not been any material adverse change in the condition,
financial or otherwise, business or prospects of the General Partner or any
Partnership, whether or not arising in any ordinary course of business.
(m) The General Partner will have a net worth at each Monthly
Closing sufficient in amount and satisfactory in form to meet the net worth
requirements set forth in each of the Limited Partnership Agreements.
(n) The Limited Partnership Agreements, the Management Agreements
and this Agreement have each been duly and validly authorized, executed, and
delivered by the General Partner on behalf of the Partnerships and the General
Partner, and each constitutes a valid and binding agreement of the Partnerships
and of the General Partner, enforceable in accordance with its terms. The DWR
Customer Agreements, the CFI Customer Agreements and the Escrow Agreement have
each been duly and validly authorized, executed, and delivered by the General
Partner on behalf of the Partnerships, and each constitutes a valid and binding
agreement of the Partnerships, enforceable in accordance with its terms.
(o) The execution and delivery of the Limited Partnership
Agreements, the Management Agreements, the DWR Customer Agreements, the CFI
Customer Agreements, the Escrow Agreement, and this Agreement, the incurrence of
the obligations set forth in each of such agreements, and the consummation of
the transactions contemplated therein and in the 1998 Registration Statements
and the Prospectus, will not violate, or constitute a breach of, or default
under, the certificate of incorporation or bylaws of the General Partner, the
Certificates of Limited Partnership or the Limited Partnership Agreements of the
Partnerships, or any other agreement or instrument by which either the General
Partner or the Partnerships, as the case may be, is bound or any law, order,
rule, or regulation applicable to the General Partner
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or the Partnerships of any court, governmental body, administrative agency,
panel, or self-regulatory organization having jurisdiction over the General
Partner or the Partnerships.
(p) Except as set forth in the 1998 Registration Statements or the
Prospectus, there has not been in the five years preceding the date of the
Prospectus and there is not pending or, to the best of the General Partner's
knowledge, threatened, any action, suit, or proceeding at law or in equity
before or by any court, governmental body, administrative agency, panel, or
self-regulatory organization to which the General Partner, any of the
"principals" of the General Partner, as defined in CFTC Rule 4.10(e) ("General
Partner Principals"), or any of the Partnerships is or was a party, or to which
any of the assets of the General Partner or any of the Partnerships is or was
subject; and neither the General Partner nor any General Partner Principal has
received any notice of an investigation by the SEC, CFTC, NASD, or NFA regarding
noncompliance by the General Partner, the General Partner Principals, or the
Partnerships with the 1933 Act, the SEC Regulations, the Securities Exchange Act
of 1934, as amended (the "1934 Act"), any other federal securities laws, rules
or regulations, the CEAct, the CFTC Rules, or the rules of the NASD or the NFA,
which action, suit, proceeding, or investigation resulted or might reasonably be
expected to result in any material adverse change in the condition, financial or
otherwise, business or prospects of the General Partner or any of the
Partnerships, or which could be material to an investor's decision to invest in
any of the Partnerships.
(q) The General Partner and each "principal" of the General Partner,
as defined in CFTC Rule 3.1(a), have all federal, state, and foreign
governmental, regulatory, self-regulatory, and exchange approvals, licenses,
registrations, and memberships, and have effected all filings with federal,
state, and foreign governmental regulators, self-regulatory organizations, and
exchanges required to conduct their business and to act as described in the 1998
Registration Statements and the Prospectus, or required to perform their
obligations under the Limited Partnership Agreements, the DWR Customer
Agreements, the CFI Customer Agreements, the Escrow Agreement, the Management
Agreements and this Agreement. The General Partner is registered as a commodity
pool operator under the CEAct and is a member of the NFA as a commodity pool
operator. The General Partner's principals identified in the Prospectus are all
of the General Partner Principals.
(r) To the extent required under CFTC Rules and applicable CFTC
staff no-action letters, the actual performance of all pools "operated" within
the meaning of the CEAct by the General Partner and of the General Partner
Principals is disclosed in the Prospectus.
2. Covenants of the Partnerships and the General Partner. Each
Partnership as to itself, severally and not jointly, and the General Partner as
to itself and each Partnership covenants and agrees as follows:
(a) The Partnerships will use their best efforts to cause the 1998
Registration Statements to become effective as promptly as possible. The
Partnerships will prepare and file with the SEC, CFTC, NASD, and NFA, promptly
upon DWR's request, any amendments to the applicable 1998 Registration
Statement, and any amendments and
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supplements to the Prospectus, which may be necessary or advisable in connection
with the offering and sale of Units, and will use its best efforts to cause the
same to become effective as promptly as possible.
(b) As soon as any of the Partnerships is advised or obtains
knowledge thereof, such Partnership will advise DWR of any requests made by the
SEC, CFTC, NASD, or NFA to amend the applicable 1998 Registration Statement, to
amend or supplement the Prospectus, or for additional information, or of the
issuance by the SEC of any stop order suspending the effectiveness of any 1998
Registration Statement, of any order by the SEC, CFTC, NASD or NFA preventing or
suspending the use of the Prospectus, or of the institution of any proceedings
for any such purpose, and will use its best efforts to prevent the issuance of
any such order and, if any such order is issued, to obtain the lifting thereof
as promptly as possible.
(c) If, at any time after the effective date of any 1998
Registration Statement and any amendment thereto, any event occurs involving any
of the Partnerships, the General Partner, or any General Partner Principal, or
of which any of the Partnerships, the General Partner, or any General Partner
Principal is aware, as a result of which any 1998 Registration Statement or the
Prospectus, as then amended and supplemented, would include any untrue statement
of a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein (and, with respect to
the Prospectus, in light of the circumstances under which they were made) not
misleading, or if it becomes necessary or desirable at any time to amend or
supplement any 1998 Registration Statement or the Prospectus to comply with the
1933 Act, the SEC Regulations, the CEAct, the CFTC Rules, or the rules of the
NASD or the NFA, the Partnerships will promptly notify DWR thereof and will
prepare and file with the SEC, CFTC, NASD, and NFA an amendment or supplement
that will correct such statement or omission or that will effect such
compliance.
(d) The Partnerships will furnish to DWR copies of the 1998
Registration Statements, the Prospectus, and all amendments and supplements
thereto, in each case as soon as available and, in the case of the Prospectus,
in such quantities as DWR may reasonably request for delivery to it.
3. Representations and Warranties of the Non-Clearing Broker. The
Non-Clearing Broker represents and warrants to each of the other parties hereto,
as follows:
(a) The Non-Clearing Broker is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware, and is
qualified to do business and is in good standing as a foreign corporation in the
State of New York and in each other jurisdiction in which the nature or conduct
of its business requires such qualification and where the failure to be so
qualified could materially adversely affect the Non-Clearing Broker's ability to
perform its obligations hereunder or under the DWR Customer Agreements, or as
described in the Prospectus. The Non-Clearing Broker has full corporate power
and authority to perform its obligations under each of the DWR Customer
Agreements
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and this Agreement, and to conduct its business as described in the 1998
Registration Statements and the Prospectus.
(b) As to the Non-Clearing Broker, (i) the 1998 Registration
Statements and the Prospectus are accurate and complete in all material respects
and contain all statements and information required to be included therein under
the 1933 Act, the SEC Regulations, the CEAct, the CFTC Rules, and the rules of
the NFA; (ii) as of their effective dates, the 1998 Registration Statements will
not contain any untrue statement of a material fact or omit to state a material
fact which is required to be stated therein or necessary to make the statements
therein not misleading; and (iii) the Prospectus, as of its date of issue and as
of each Monthly Closing, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
misleading.
(c) The Non-Clearing Broker and each "principal" of the Non-Clearing
Broker, as defined in CFTC Rule 3.1(a), have all federal, state, and foreign
governmental, regulatory self-regulatory, and exchange approvals, licenses,
registrations, and memberships, and have effected all filings with federal,
state, and foreign governmental regulators, self-regulatory organizations, and
exchanges required to conduct their business and to act as described in the 1998
Registration Statements and the Prospectus, or required to perform their
obligations under each DWR Customer Agreement and this Agreement, as applicable.
The Non-Clearing Broker is registered as a futures commission merchant under the
CEAct and is a member of the NFA as a futures commission merchant.
(d) The DWR Customer Agreements and this Agreement have each been
duly and validly authorized, executed, and delivered by the Non-Clearing Broker,
and each constitutes a valid and binding agreement of the Non-Clearing Broker,
enforceable in accordance with its terms.
(e) Since the respective dates as of which information is given in
the 1998 Registration Statements and the Prospectus, except as may otherwise be
stated in or contemplated by the 1998 Registration Statements and the
Prospectus, there has not been any material adverse change in the condition,
financial or otherwise, business or prospects of the Non-Clearing Broker,
whether or not arising in the ordinary course of business.
(f) Except as set forth in the 1998 Registration Statements or the
Prospectus, there has not been in the five years preceding the date of the
Prospectus and there is not pending or, to the best of the Non-Clearing Broker's
knowledge, threatened, any action, suit, or proceeding at law or in equity
before or by any court, governmental body, administrative agency, panel, or
self-regulatory organization to which the Non-Clearing Broker is or was a party,
or to which any of the assets of the Non-Clearing Broker is or was subject; and
the Non-Clearing Broker has not received any notice of an investigation by the
NFA or the CFTC regarding noncompliance by the Non-Clearing Broker with the
CEAct, the CFTC Rules, or the rules of the NFA, which action, suit, proceeding
or investigation resulted in or might reasonably be expected to result in any
material adverse change in the condition,
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financial or otherwise, business or prospects of the Non-Clearing Broker or
which would be material to an investor's decision to invest in any of the
Partnerships.
(g) The execution and delivery of each DWR Customer Agreement and
this Agreement, the incurrence of the obligations set forth in each of such
agreements, and the consummation of the transactions contemplated therein and in
the 1998 Registration Statements and in the Prospectus, will not violate, or
constitute a breach of, or default under, the certificate of incorporation or
bylaws of the Non-Clearing Broker or any other agreement or instrument by which
it is bound, or any law, order, rule, or regulation applicable to the
Non-Clearing Broker of any court, governmental body, administrative agency,
panel, or self-regulatory organization having jurisdiction over the Non-Clearing
Broker.
4. Covenants of the Non-Clearing Broker. The Non-Clearing Broker
covenants and agrees as follows:
(a) The Non-Clearing Broker agrees reasonably to cooperate by
providing information regarding itself in the preparation of any amendments or
supplements to the 1998 Registration Statements and the Prospectus.
(b) The Non-Clearing Broker agrees to notify the General
Partner immediately upon discovery of any untrue statement of a material fact in
the 1998 Registration Statements or the Prospectus relating to the Non-Clearing
Broker, or an omission to state a material fact relating to the Non-Clearing
Broker, required to be stated therein or necessary to make the statements
therein (and, with respect to the Prospectus, in light of the circumstances
under which they were made) not misleading, or of the occurrence of any event or
change in circumstances which would result in there being any material untrue or
misleading statement or a material omission in the Prospectus or the 1998
Registration Statements regarding the Non-Clearing Broker, or which would result
in the Prospectus not including all material information relating to the
Non-Clearing Broker, required pursuant to the CEAct, the CFTC Rules, or the
rules of the NFA.
5. Appointment of the Selling Agent.
(a) Subject to the terms and conditions set forth in this Agreement,
each Partnership hereby appoints DWR as its selling agent to offer and sell
Units on a best efforts basis, without any firm commitment on the part of DWR to
purchase any Units. DWR shall offer for sale up to *, *, *, and * Units of
Global, Strategic, Technical and Select, respectively, and such additional Units
as the General Partner may, in its discretion, register and offer for sale from
time to time.
(b) Commencing the date of the Prospectus, the Units of Global,
Strategic, Technical, and Select shall be offered, in the sole discretion of the
General Partner, for sale in a continuing offering (the "Continuing Offering")
at monthly closings ("Monthly Closings"), to be held as of the last day of each
month, at a price per Unit equal to 100% of the "Net Asset Value per Unit" (as
defined in each Limited Partnership Agreement) as of the close of business on
the date of such Monthly Closing. The minimum subscription for most
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subscribers shall be $5,000, except that the minimum subscription is (i) $2,000
in the case of an Individual Retirement Account ("XXX"); (ii) $500 per
Partnership if the subscriber presently owns Units in any Partnership; or (iii)
for eligible subscribers who redeem units of limited partnership interest in any
other commodity pool for which the General Partner is the general partner and
commodity pool operator, and, pursuant to a Subscription Agreement, use the
proceeds of such redemption (less any applicable redemption charges) to purchase
Units (each of such purchases is hereinafter referred to as a "Non-Series
Exchange"), the lesser of (A) $5,000 (or $2,000 in the case of IRAs), (B) the
proceeds from the redemption of five units (or two units in the case of IRAs)
from commodity pools other than Xxxxxx Xxxxxxx Tangible Asset Fund L.P.
("MSTAF"), (C) the proceeds from the redemption of 500 units (200 units in the
case of an XXX) from MSTAF, or (D) the proceeds from the redemption of such
subscriber's entire interest in such other commodity pool. In order to be
eligible to purchase Units pursuant to a Non-Series Exchange, a subscriber must
purchase Units at a Monthly Closing held as of the date on which the redemption
from the other commodity pool becomes effective. The initial minimum investment
(other than in the case of a Non-Series Exchange) may be for Units of any one of
the Partnerships or any combination thereof, except that the minimum
subscription for any Partnership is $1,000. In the case of a Non-Series
Exchange, the minimum subscription for any Partnership is the proceeds of the
redemption of one unit of the other commodity pool (or 100 units in the case of
MSTAF). The number of Units received by a subscriber will be rounded to the
third decimal place.
(c) Notwithstanding any provision to the contrary herein, the
General Partner will have the sole discretion to accept or reject any
subscription for Units in whole or in part at any time prior to acceptance.
(d) No selling commissions will be charged with respect to the sale
of Units. The Partnerships understand, however, that DWR may compensate its
employees and certain "Additional Sellers," solely from DWR's own funds, in the
manner described in Sections 5(e)-(i).
(e) Except as provided below, employees of DWR will receive from DWR
(payable solely from its own funds) gross sales credit equal to three percent
(3%) of the Net Asset Value per Unit as of the date of the applicable Monthly
Closing for each Unit sold by them and issued at such Monthly Closing (such
compensation, along with any other underwriting compensation, will not exceed
10% of the proceeds received in connection with the issuance of the Units).
Commencing (i) the seventh month after the Monthly Closing at which a Unit of
Strategic, Technical, and Select is issued, (ii) the tenth month after the
Monthly Closing at which a Unit of Global is issued, or (iii) in the case of a
Unit purchased pursuant to a Series Exchange (as defined in the Prospectus) or a
Non-Series Exchange, the first month as of which such continuous compensation is
payable under (i) or (ii), as applicable, but with the seven or ten month period
measured from the date at which the unit redeemed was issued, and continuing
until the applicable Partnership terminates or the Unit is redeemed (whichever
comes first), employees of DWR who are properly registered with the CFTC and are
members of the NFA, as set forth in Section 5(g), will also receive from DWR
(payable solely from its own funds) monthly gross sales credits of up to 86% of
the brokerage
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fees which are received by the Non-Clearing Broker from the Partnership each
month that are attributable to outstanding Units sold by them. Such continuing
compensation is to be paid in recognition of employees' continuing services to
Limited Partners of the Partnerships, as set forth in Section 5(i). No person
will receive the continuing compensation described above who is not an employee
of DWR at the time of receipt of payment.
(f) DWR will not pay to an employee the 3% initial gross sales
credit described above with respect to Units purchased pursuant to a Series
Exchange or a Non-Series Exchange. Such employee will, however, receive
continuing gross sales credits with respect to brokerage fees received by the
Non-Clearing Broker from a Partnership which are comparable to the gross sales
credit which was received by such employee with respect to such other commodity
pool.
(g) Notwithstanding the foregoing, DWR will not pay any such
continuing compensation to any of its employees who is not legally qualified or
permitted to receive such continuing compensation. In that regard, each of DWR's
employees who receives any such continuing compensation must have become
registered as an "associated person" of DWR with the CFTC and with the NFA in
such capacity only after either having passed the National Commodity Futures
Examination (NASD Test Series #3), the Futures Managed Funds Examination (NASD
Test Series #31), or having been "grandfathered" as an associated person under
the CEAct and the Bylaws and rules of the NFA. Also, such compensation may be
paid by DWR to its employees only in respect of outstanding Units sold by such
persons and only so long as the additional services described in Section 5(i)
are provided by such persons to Limited Partners; provided, however, that DWR
may not pay any portion of such compensation to any individual no longer
employed by it, and provided, further, that such compensation may be paid to its
employees who, although not responsible for the sale of an outstanding Unit,
provide the services described below in place of the individual who was
responsible for such sale.
(h) With the written approval of the General Partner, DWR may
appoint as its agent to make offers and sales of Units, one or more securities
brokers or dealers which are members in good standing of the NASD, or any
foreign bank, dealer, institution or person ineligible for membership in the
NASD which agrees to make no offers or sales of Units within the United States
or its territories, possessions or areas subject to its jurisdiction or to
persons who are citizens thereof or residents therein, as additional selling
agents (each, an "Additional Seller" and collectively, the "Additional
Sellers"), provided that each Additional Seller shall execute an Additional
Seller's Agreement substantially in the form attached hereto as Exhibit A. DWR
may compensate any Additional Seller by paying such Additional Seller, solely
from DWR's own funds, a commission, not to exceed three percent (3%) of the Net
Asset Value per Unit as of the date of the applicable Monthly Closing, for each
Unit sold by such Additional Seller and issued at such Monthly Closing. In
addition, commencing with (i) the seventh month after the Monthly Closing at
which a Unit of Strategic, Technical and Aggressive is issued, (ii) the tenth
month after the Monthly Closing at which a Unit of Global is issued, and (iii)
in the case of a Unit purchased pursuant to a Series Exchange or a Non-Series
Exchange, the first month as of which such continuing compensation is payable
under
-11-
(i) or (ii), as applicable, but with the seven or ten month period measured from
the date at which the unit redeemed was issued, and continuing until the
applicable Partnership terminates or the Unit is redeemed (whichever comes
first), DWR may pay any Additional Seller continuing compensation of up to 35%
of the brokerage fees which are received by the Non-Clearing Broker from the
Partnerships each month that are attributable to outstanding Units sold by such
Additional Seller, in recognition of such Additional Seller's continuing
services to Limited Partners of the Partnerships, as set forth in Section 5(i);
provided, however, that: (A) no continuing compensation shall be paid to an
Additional Seller unless it is properly registered with the CFTC as a "futures
commission merchant" or "introducing broker," and is a member of the NFA in one
of such capacities, and (B) no Additional Seller which is registered as a
futures commission merchant or introducing broker may pay any portion of such
continuing compensation to an employee thereof unless such employee meets the
same qualifications as DWR's employees, as set forth in Section 5(g).
(i) The additional services that employees of DWR and Additional
Sellers will provide on an ongoing basis to Limited Partners at no charge will
include, but not be limited to: (i) inquiring of the General Partner from time
to time, at the request of Limited Partners, as to the Net Asset Value of a
Unit; (ii) inquiring of the General Partner from time to time, at the request of
Limited Partners, as to the futures interests markets and the activities of the
Partnerships; (iii) responding to questions of Limited Partners from time to
time with respect to monthly account statements, annual reports, financial
statements, and annual tax information furnished periodically to Limited
Partners; (iv) providing advice to Limited Partners from time to time as to when
and whether to make additional investments or to redeem or Exchange Units; (v)
assisting Limited Partners from time to time in the redemption or Exchange of
Units; and (vi) providing such other services as Limited Partners from time to
time may reasonably request.
(j) The Partnerships and DWR acknowledge that: (i) the Partnerships
shall have no liability to DWR, its employees, any Additional Seller, or any
employee of an Additional Seller with regard to any selling compensation
described above; and (ii) DWR will be paid any and all redemption charges
imposed on Limited Partners in accordance with Section 10(b) of the Limited
Partnership Agreement.
6. Undertakings of DWR.
(a) DWR agrees to use its best efforts to offer and sell Units on
the terms set forth in this Agreement, the 1998 Registration Statements, and the
Prospectus. It is understood that DWR has no commitment to offer and sell Units
or to purchase Units, other than to use its best efforts to offer and sell
Units.
(b) DWR will make the public offering of Units at the offering price
and on the other terms and conditions set forth in the 1998 Registration
Statements, the Prospectus, and this Agreement. DWR will offer and sell Units
only to persons who satisfy the suitability and/or minimum investment
requirements set forth in the Prospectus and the Subscription Agreement and who,
to the General Partner's satisfaction, complete a Subscription Agreement.
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DWR will conduct a thorough review of the suitability of each subscriber for
Units, of each Subscription Agreement authorizing the General Partner and DWR to
transfer the full subscription price from the subscriber's customer account with
DWR to the escrow account established with the Escrow Agent pursuant to the
Escrow Agreement (the "Escrow Account"), and of each Subscription Agreement
requesting a Series Exchange or a Non-Series Exchange as described under
"Investment Requirements" and "Exchange Privilege" in the Prospectus.
(c) All of DWR's branch offices will be required to forward
subscriptions to DWR's New York, New York branch office no later than noon of
the first business day following their receipt of an acceptable Subscription
Agreement from a subscriber for Units. Subsequent to its review of each
Subscription Agreement, the General Partner will notify DWR, and DWR shall
notify each subscriber by the business day following its receipt of notice from
the General Partner, of the General Partner's acceptance of all, a portion, or
none of the subscriber's subscription.
(d) All funds from subscriptions received by DWR during the
Continuing Offering and not rejected by the General Partner will be promptly
deposited by DWR in the Escrow Account as described below. A subscriber whose
Subscription Agreement is received by DWR and whose subscription is not
immediately rejected must have the full subscription amount in his customer
account with DWR on the first business day following the date that his
Subscription Agreement is received by DWR, and DWR will transfer such
subscription funds to the Escrow Agent on that date. DWR will notify the General
Partner of the subscription amount deposited with the Escrow Agent on behalf of
each subscriber for Units and the name and residence address of each such
subscriber.
(e) DWR will offer and sell Units in compliance with the
requirements set forth in the 1998 Registration Statements, the Prospectus
(particularly under the captions "Summary of the Prospectus - Investment
Requirements," "Plan of Distribution," "Subscription Procedure," and "Purchases
by Employee Benefit Plans--ERISA Considerations"), the Subscription Agreement,
and this Agreement. In connection with DWR's acting as selling agent, DWR will
comply fully at all times with all applicable federal, state, and foreign
securities and commodities laws (including, without limitation, the 1933 Act,
the 1934 Act, the CEAct, and the securities ("Blue Sky") laws of the
jurisdictions in which DWR solicits subscriptions), and all requirements of the
NASD (particularly Conduct Rule 2810), the Board of Governors of the Federal
Reserve System, and the securities and commodities exchanges and other
governmental regulators and self-regulatory authorities and organizations having
jurisdiction over DWR. Specifically, (i) DWR will not permit the purchase of any
Units by a customer account over which DWR has discretionary authority without
the prior written approval by the customer owning such account; (ii) DWR
confirms that it has reasonable grounds to believe that all material facts are
adequately and accurately disclosed in the Prospectus, which provides a basis
for evaluating the Partnerships; (iii) DWR confirms that in determining the
adequacy of disclosed facts pursuant to clause (ii), it has obtained information
on material facts relating to: (A) items of compensation, (B) tax aspects, (C)
financial stability and experience of the General Partner, and (D) the
Partnerships'
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conflicts and risk factors; (iv) in recommending to a subscriber the purchase or
redemption of Units, a Series Exchange or a Non-Series Exchange, DWR shall take
such measures as are reasonably necessary to assure itself that (A) its Account
Executives have informed such subscriber of all pertinent facts relating to the
liquidity and marketability of the Units, and (B) its Account Executives have
reasonable grounds to believe, on the basis of information obtained from such
subscriber concerning his investment objectives, other investments, financial
situation and needs, and any other information known by such Account Executive,
that: (1) such subscriber is or will be in a financial position appropriate to
enable him to realize to a significant extent the benefits described in the
Prospectus, (2) such subscriber has a fair market net worth sufficient to
sustain the risks inherent in the purchase of Units, including loss of
investment and lack of liquidity, and (3) the purchase of Units is otherwise
suitable for such subscriber; (v) DWR shall take such measures as are reasonably
necessary to assure itself that each subscriber has received a Prospectus at
least five business days prior to the applicable Monthly Closing; and (vi) the
General Partner will maintain in its files, located c/o Xxxx Xxxxxx Xxxxxxxx
Inc., Two Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, each subscriber's
Subscription Agreement for not less than six years, and DWR will maintain, at
its respective branch offices, any other documents disclosing the basis upon
which the determination of suitability was reached for each such subscriber.
(f) All subscriptions received and accepted by the General Partner
will, upon the satisfaction at each Monthly Closing of the conditions set forth
in Sections 10 and 11 hereof, be delivered to the respective Partnerships at
each Monthly Closing, and any interest earned on a subscriber's subscription
funds while held in escrow will be promptly returned to DWR in accordance with
the Escrow Agreement for prompt credit to the subscriber's customer account with
DWR. Interest earned on any subscriptions deposited into the Escrow Account and
thereafter rejected by the General Partner will be credited to the subscriber's
customer account with DWR.
(g) Any amounts credited to a subscriber's customer account with DWR
for a returned subscription and/or for interest earned will be immediately
available for investment or withdrawal from such account. In the event a
subscriber's customer account with DWR has been closed, any subscription
returned and/or interest earned will be paid by check.
7. Blue Sky Filings. The Partnerships will use their best efforts to
qualify Units for offer and sale under the Blue Sky laws of such jurisdictions
as DWR may reasonably request, to make applications, file documents, and furnish
information as may be reasonably required for that purpose, and to comply with
such laws so as to permit the continuance of sales and dealings in such
jurisdictions for as long as may be necessary to complete the offer and sale of
Units; provided, however, that neither the Partnerships nor the General Partner
will be required to qualify as or be subject to taxation as a foreign
partnership or corporation or to execute a general consent to service of process
in any jurisdiction. The Partnerships further agree that their counsel will
prepare and deliver to DWR Blue Sky surveys which will set forth, for DWR's
guidance, in what manner, at what time, in what amounts, and by whom Units may
be offered and sold in jurisdictions requested by DWR as provided above.
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8. Organizational and Offering Expenses. DWR shall pay all of the
costs incurred in the offering of Units during the Continuing Offering
(collectively, the "Offering Expenses"), including all legal, accounting, and
auditing fees and expenses of outside firms and all costs, disbursements, filing
fees, fees and expenses of the Escrow Agent, printing and duplication costs,
marketing costs and expenses, and other related costs and expenses. Legal,
accounting, and auditing fees and expenses of outside firms shall include the
legal, accounting, and auditing expenses of DWR, the Partnerships and the
General Partner relating to the offering of Units. Marketing costs and expenses
shall include, but not be limited to, the printing and preparation of Sales
Literature, the production of audio and video tapes for use in sales
presentations, and the staging of sales seminars and the travel of DWR and
General Partner personnel associated therewith. DWR shall not be reimbursed for
such expenses by the Partnerships. Such expenses will not include the travel,
legal, and other expenses of the Trading Advisors, including such expenses
incurred in connection with the marketing of Units, which expenses shall be
borne by the respective Trading Advisors (unless DWR agrees to pay same from its
own funds).
9. Monthly Closings.
(a) Monthly Closings in the Continuing Offering shall be held as of
the last day of each month. Each Monthly Closing will be held at such time, and
at such location or locations as the General Partner and DWR may mutually agree
upon.
(b) Subject to its right to reject any subscription in its sole
discretion in whole or in part at any time prior to acceptance, the General
Partner, on behalf of each Partnership, will accept subscriptions for Units
properly made and cause proper entry to be made in the Unit register to be
maintained by the General Partner. No certificate evidencing Units shall be
issued to any subscriber; rather, DWR will deliver confirmations in its
customary form to subscribers whose subscriptions have been accepted by the
General Partner at each Monthly Closing.
(c) At each Monthly Closing, the delivery, receipt, and acceptance
of subscriptions for Units will be subject to the terms and conditions set forth
in this Agreement, including the following: (i) payment of the full subscription
price for Units and delivery of a properly completed Subscription Agreement by
each subscriber; and (ii) compliance with Section 10 hereof. Upon the
satisfaction of such terms and conditions, the aggregate subscription price for
Units (exclusive of any interest earned on such subscriptions while held in
escrow and payable to the subscribers in accordance with the Escrow Agreement)
will be paid and delivered to the applicable Partnership at each Monthly
Closing.
10. Conditions of DWR's Obligations.
(a) DWR's obligations to proceed with the offering and sale of Units
and each Monthly Closing will be subject to: (i) the accuracy of the
representations and warranties by the Partnerships and the General Partner in
this Agreement as of the date hereof and as of the date of such Monthly Closing
as if such representations and warranties had been made on and as of the date
thereof; (ii) the performance by the Partnerships and the General Partner of
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their respective covenants and agreements herein; and (iii) the additional
conditions precedent set forth below.
(b) At each Monthly Closing, the additional conditions precedent are
as follows:
(i) The 1998 Registration Statements will have become
effective. No stop order suspending the effectiveness of any of the 1998
Registration Statements will have been issued and no proceedings for that
purpose will have been instituted or are pending or, to the knowledge of
the Partnerships or DWR, are contemplated or threatened by the SEC. No
order preventing or suspending the use of the Prospectus will have been
issued and no proceedings for that purpose will have been instituted or
are pending or, to the knowledge of the Partnerships or DWR, are
contemplated or threatened by the SEC, CFTC, NASD, or NFA. Any requests of
the SEC, CFTC, NASD, or NFA for additional information (to be included in
any of the 1998 Registration Statements or the Prospectus or otherwise)
will have been complied with to DWR's satisfaction.
(ii) Neither DWR nor any Trading Advisor will have advised the
Partnerships or the General Partner that, in its opinion, any of the 1998
Registration Statements or the Prospectus contains any untrue statement of
a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were made)
not misleading.
(iii) At the request of DWR, the General Partner will have
furnished to DWR a certificate, dated the date of the Monthly Closing and
in form and substance satisfactory to DWR, to the effect that:
(A) The representations and warranties by the
Partnerships and the General Partner in this Agreement are true,
accurate, and complete on and as of the date of the Monthly Closing
as if made on the date of the Monthly Closing.
(B) No stop order suspending the effectiveness of any of
the 1998 Registration Statements has been issued by the SEC and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the General Partner, are contemplated or
threatened under the 1933 Act. No order preventing or suspending the
use of the Prospectus has been issued by the SEC, CFTC, NASD, or NFA
and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the General Partner, are
contemplated or threatened under the 1933 Act or the CEAct.
(C) The Partnerships and the General Partner have
performed all of their obligations and satisfied all of the
conditions on their part to be performed or satisfied under this
Agreement, the Management Agreements, the
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Escrow Agreement, the DWR Customer Agreements, and the CFI Customer
Agreements at or prior to the date of the Monthly Closing.
(D) The General Partner has made its capital
contribution to each Partnership and has met the net worth standard
required of it by each Limited Partnership Agreement.
(iv) Cadwalader, Xxxxxxxxxx & Xxxx, counsel to the General
Partner and the Partnerships, shall deliver its opinion to the parties
hereto at such Monthly Closing as requested by DWR, in form and substance
satisfactory to the parties hereto, to the effect that:
(A) Each Limited Partnership Agreement provides for the
subscription for and sale of the Units; all action required to be
taken by the General Partner and each Partnership as a condition to
the subscription for and sale of the Units to qualified subscribers
therefor has been taken; and, upon payment of the consideration
therefor specified in the accepted Subscription Agreements, the
Units will constitute valid limited partnership interests in the
applicable Partnership and each subscriber who purchases Units will
become a Limited Partner, subject to the requirements that each such
purchaser shall have duly completed, executed, and delivered to the
applicable Partnership a Subscription Agreement relating to the
Units purchased by such purchaser, that such purchaser meets all
applicable suitability standards, and that the representations and
warranties of such purchaser in the Subscription Agreement are true
and correct and that such purchaser is included as a Limited Partner
in the applicable Partnership's records. Such counsel need not
independently verify compliance with such requirements.
(B) Each Partnership is a limited partnership duly
formed pursuant to its Certificate of Limited Partnership, its
Limited Partnership Agreement and the DRULPA and is validly existing
under the laws of the State of Delaware with full partnership power
and authority to conduct the business in which it proposes to engage
as described in the applicable 1998 Registration Statement and the
Prospectus and to perform its obligations under its Limited
Partnership Agreement, its Management Agreement(s), its DWR Customer
Agreement, its CFI Customer Agreement, the Escrow Agreement, and
this Agreement; and each Partnership has received a Certificate of
Authority to do business in the State of New York as contemplated
under Article 8-A of the New York Revised Limited Partnership Act
and need not effect any other filings or qualifications under the
laws of any other jurisdictions to conduct its business as described
in the applicable 1998 Registration Statement and the Prospectus.
(C) The General Partner is a corporation duly organized,
validly existing, and in good standing under the laws of the State
of Delaware
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and is qualified to do business and is in good standing as a foreign
corporation in the State of New York and in each other jurisdiction
in which the nature or conduct of its business requires such
qualification and where the failure to be so qualified might
reasonably be expected to result in material adverse consequences to
any Partnership or might materially adversely affect the General
Partner's ability to perform its obligations as described in the
1998 Registration Statements and the Prospectus. The General Partner
has full corporate power and authority to conduct its business as
described in the 1998 Registration Statements and the Prospectus and
to perform its obligations under each Limited Partnership Agreement,
each Management Agreement, each DWR Customer Agreement, each CFI
Customer Agreement, the Escrow Agreement, and this Agreement, as
applicable.
(D) The General Partner and its "principals," as defined
in CFTC Rule 3.1(a), and each Partnership have all federal and state
governmental, regulatory, self-regulatory and exchange approvals,
licenses, registrations, and memberships, and have effected all
filings with federal and state governmental regulators,
self-regulatory organizations and exchanges required to conduct
their business and to act as described in the 1998 Registration
Statements and the Prospectus, or required to perform their
obligations under each Limited Partnership Agreement, each
Management Agreement, each DWR Customer Agreement, each CFI Customer
Agreement, the Escrow Agreement, and this Agreement, except for such
approvals, licenses, registrations, memberships, and filings the
absence of which would not have a material adverse effect on their
ability to act as described in the 1998 Registration Statements and
the Prospectus, or to perform their obligations under such
agreements, and, to the best of such counsel's knowledge, after due
investigation, none of such approvals, licenses, registrations,
memberships, or filings has been rescinded, revoked, or suspended.
(E) Each Limited Partnership Agreement, each Management
Agreement, each DWR Customer Agreement, each CFI Customer Agreement,
the Escrow Agreement, and this Agreement has been duly and validly
authorized, executed, and delivered by or on behalf of the General
Partner and/or each Partnership, as the case may be, and each
Limited Partnership Agreement constitutes a valid and binding
agreement of the General Partner, each Management Agreement
constitutes a valid and binding agreement of the General Partner and
the applicable Partnership, the Escrow Agreement constitutes a valid
and binding agreement of each Partnership and DWR, and this
Agreement constitutes a valid and binding agreement of each
Partnership, the General Partner and DWR, and, in the case of each
valid and binding agreement above, the agreement is enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect
affecting the enforceability generally of rights of creditors and by
general principles of equity (regardless of whether such
enforceability is
-18-
considered in a proceeding in equity or at law), and except as
enforceability of indemnification, exculpation, and contribution
provisions may be limited by applicable law or public policy.
(F) The execution and delivery of the respective Limited
Partnership Agreements, the respective Management Agreements, the
respective DWR Customer Agreements, the respective CFI Customer
Agreements, the Escrow Agreement, and this Agreement, as applicable,
the offer and sale of the Units by each Partnership, the incurrence
of the obligations herein and therein set forth, and the
consummation of the transactions contemplated herein, therein, and
in the Prospectus, will not be in contravention of the General
Partner's certificate of incorporation or bylaws, any Certificate of
Limited Partnership, or any Limited Partnership Agreement, or the
certificate of incorporation or bylaws of DWR, and, to the best of
such counsel's knowledge, based upon due inquiry of certain officers
of the General Partner, will not violate, or constitute a breach of,
or default under, any other agreement or instrument known to such
counsel by which the General Partner or any Partnership is bound,
and will not violate any order known to such counsel, or any law,
rule, or regulation applicable to the General Partner or any
Partnership of any court, governmental body, administrative agency,
panel, or self-regulatory organization having jurisdiction over the
General Partner or any Partnership.
(G) To such counsel's knowledge, based upon due inquiry
of certain officers of the General Partner, except as disclosed in
the Prospectus, there are no actions, suits, or proceedings at law
or in equity pending or threatened before or by any court,
governmental body, administrative agency, panel, or self-regulatory
organization, nor have there been any such actions, suits, or
proceedings within the five years preceding the date of the
Prospectus, to which the General Partner or any Partnership is or
was a party, or to which any of the assets of the General Partner or
any of the Partnerships is or was subject, which would be material
to an investor's decision to invest in the Partnership, or which
resulted or might reasonably be expected to result in a materially
adverse change in the condition, financial or otherwise, business or
prospects of the General Partner or any Partnership, whether or not
arising in the ordinary course of business.
(H) The information in the Prospectus under the captions
"Summary of the Prospectus--Tax Considerations," "Risk
Factors--Taxation and Regulatory Risks," "Purchases by Employee
Benefit Plans--ERISA Considerations," "Material Federal Income Tax
Considerations," "State and Local Income Tax Aspects," and "The
Limited Partnership Agreement," to the extent that such information
constitutes matters of law or legal conclusions, has been reviewed
by such counsel and is correct.
-19-
(I) The 1998 Registration Statements are effective under
the 1933 Act and, to the best of such counsel's knowledge, no
proceedings for a stop order are pending or threatened under Section
8(d) of the 1933 Act or any Blue Sky laws.
(J) At the time the 1998 Registration Statements became
effective, the 1998 Registration Statements, and at the time the
Prospectus was issued and as of the Monthly Closing, the Prospectus,
complied as to form in all material respects with the requirements
of the 1933 Act, the SEC Regulations, the CEAct, the CFTC Rules, and
the rules of the NASD and NFA. Nothing has come to such counsel's
attention that would lead them to believe that the 1998 Registration
Statements at the time they became effective contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus at the time it was
issued or at the Monthly Closing contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that such counsel
need express no opinion or belief (a) as to the information in the
1998 Registration Statements or the Prospectus regarding the Trading
Advisors, the Commodity Brokers, or their respective principals, (b)
as to the financial statements, notes thereto and other financial or
statistical data set forth in the 1998 Registration Statements and
the Prospectus, or (c) as to the performance data and notes or
descriptions thereto set forth in the 1998 Registration Statements
and the Prospectus.
(K) Based upon reliance on certain SEC "no-action"
letters, as of the Monthly Closing, none of the Partnerships needs
register as an "investment company" under the Investment Company Act
of 1940, as amended.
In rendering its opinion, such counsel may rely on information
obtained from public officials, officers of the General Partner, and other
sources believed by it to be responsible, and may assume that signatures
on all documents examined by it are genuine, and that a Subscription
Agreement in the form referred to in the Prospectus, has been duly
authorized, completed, dated, executed, and delivered and funds
representing the full subscription price for the Units purchased have been
delivered by each purchaser of Units in accordance with the requirements
set forth in the Prospectus.
(v) Cadwalader, Xxxxxxxxxx & Xxxx, counsel to the Non-Clearing
Broker, shall deliver an opinion to the parties hereto at such Monthly
Closing as requested by DWR, in form and substance satisfactory to the
parties hereto, to the effect that:
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(A) The Non-Clearing Broker is a corporation duly
organized, validly existing, and in good standing under the laws of
the State of Delaware and is qualified to do business and is in good
standing as a foreign corporation in the State of New York and in
each other jurisdiction in which the nature or conduct of its
business requires such qualification and where the failure to be so
qualified might reasonably be expected to result in material adverse
consequences to the Partnership or might materially adversely affect
the Non-Clearing Broker's ability to perform its obligations as
described in the 1998 Registration Statements and the Prospectus.
The Non-Clearing Broker has full corporate power and authority to
perform its obligations as described in the 1998 Registration
Statements and the Prospectus and to perform its obligations under
the DWR Customer Agreements, the CFI Customer Agreements and this
Agreement.
(B) The DWR Customer Agreements, the CFI Customer
Agreements and this Agreement have been duly and validly authorized,
executed, and delivered by the Non-Clearing Broker, and the DWR
Customer Agreements, the CFI Customer Agreements and this Agreement
constitute valid and binding agreements of the Non-Clearing Broker,
enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium, or similar laws
at the time in effect affecting the enforceability generally of
rights of creditors and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law), and except as enforceability of indemnification,
exculpation, and contribution provisions may be limited by
applicable law or public policy.
(C) The Non-Clearing Broker has all federal and state
governmental, regulatory, self-regulatory and exchange approvals,
licenses, registrations, and memberships, and has effected all
filings with federal and state governmental regulators,
self-regulatory organizations and exchanges required to conduct its
business and to act as described in the 1998 Registration Statements
and the Prospectus, or required to perform its obligations under the
DWR Customer Agreements, the CFI Customer Agreements and this
Agreement, except for such approvals, licenses, registrations,
memberships, and filings the absence of which would not have a
material adverse effect on its ability to act as described in the
1998 Registration Statements and the Prospectus, or to perform its
obligations under such agreements, and, to the best of such
counsel's knowledge, after due investigation, none of such
approvals, licenses, registrations, memberships, or filings has been
rescinded, revoked or suspended.
(D) The execution and delivery of the DWR Customer
Agreements, the CFI Customer Agreements and this Agreement, the
incurrence of the obligations herein and therein set forth, and the
consummation of the transactions contemplated herein, therein, and
in the Prospectus, will not be in
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contravention of the Non-Clearing Broker's certificate of
incorporation or bylaws, and to the best of such counsel's
knowledge, based upon due inquiry of certain officers of the
Non-Clearing Broker, will not violate, or constitute a breach of, or
default under, any other agreement or instrument known to such
counsel by which the Non-Clearing Broker is bound, and will not
violate any order known to such counsel or any law, rule, or
regulation applicable to the Non-Clearing Broker of any court,
governmental body, administrative agency, panel, or self-regulatory
organization having jurisdiction over the Non-Clearing Broker.
(E) To the best of such counsel's knowledge, based upon
due inquiry of certain officers of the Non-Clearing Broker, except
as disclosed in the Prospectus, there are no actions, suits, or
proceedings at law or in equity pending or threatened before or by
any court, governmental body, administrative agency, panel, or
self-regulatory organization, nor have there been any such actions,
suits, or proceedings within the five years preceding the date of
the Prospectus, to which the Non-Clearing Broker is or was a party,
or to which any of its assets is or was subject, which would be
material to an investor's decision to invest in the Partnership, or
which resulted or might reasonably be expected to result in a
materially adverse change in the condition, financial or otherwise,
business or prospects of the Non-Clearing Broker, whether or not
arising in the ordinary course of business.
(F) Nothing has come to such counsel's attention to lead
such counsel to believe that, as to the Non-Clearing Broker, (a) the
1998 Registration Statements at the time they became effective
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (b) the Prospectus at
the time it was issued or at the Monthly Closing contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein relating to the
Non-Clearing Broker, in light of the circumstances under which they
were made, not misleading.
In rendering its opinion, such counsel may rely on information
obtained from public officials, officers of the Non-Clearing Broker, and
other sources believed by it to be responsible and may assume that
signatures on all documents examined by it are genuine.
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(vi) Deloitte & Touche L.L.P., independent certified public
accountants for the Partnerships and the General Partner, will have
furnished to DWR a letter, at such Monthly Closing as requested by DWR,
dated the date of the Monthly Closing and in form and substance
satisfactory to DWR, to the effect that:
(A) Such accountant is an independent certified public
accountant within the meaning of the 1933 Act, the CEAct, and the
SEC Regulations with respect to the Partnerships and the General
Partner.
(B) In such accountant's opinion, the statements of
financial condition of the Partnerships and the General Partner and
the notes thereto included in the Prospectus and examined by it
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the CEAct, and the SEC
Regulations.
(C) On the basis of limited procedures not constituting
an audit, including inquiries of officials of the General Partner
having responsibility for financial and accounting matters
pertaining to the Partnerships and such other inquiries and
procedures as may be specified in such letter, nothing has come to
such accountant's attention which causes it to believe that, as of a
specified date not more than five business days prior to the date of
the Monthly Closing, there has been any decrease in the Net Assets
of any Partnership as compared to the Net Assets set forth in the
respective statements of financial condition of the Partnerships
included in the Prospectus, except as may be disclosed in such
letter.
(D) On the basis of limited procedures, not constituting
an audit, including a reading of the latest available financial
statements of the General Partner, inspection of the minute book of
the General Partner since the date of the latest audited financial
statements of the General Partner, inquiries of officials of the
General Partner having responsibility for financial and accounting
matters, and such other inquiries and procedures as may be specified
in such letter, nothing has come to such accountant's attention that
causes it to believe that, as of a specified date not more than five
business days prior to the date of the Monthly Closing, there has
been any decrease in the General Partner's net worth as compared to
net worth set forth in the statement of financial condition of the
General Partner included in the Prospectus, except as may be
disclosed in such letter.
(vii) The Non-Clearing Broker shall deliver a certificate to
the parties hereto, in form and substance satisfactory to such parties, at
such Monthly Closing as requested by DWR, to the effect that the
representations and warranties of the Non-Clearing Broker contained herein
are true and correct with the same effect as though expressly made at such
Monthly Closing.
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(viii) Each Trading Advisor shall deliver, at such Monthly
Closing as requested by DWR, such certificate as specified in each such
Trading Advisor's respective Management Agreement.
(ix) Counsel to each Trading Advisor shall deliver, at such
Monthly Closing as requested by DWR, such legal opinion as specified in
the respective Management Agreement of each Trading Advisor.
(x) All agreements contemplated herein or in the 1998
Registration Statements or the Prospectus shall have been duly executed
and delivered.
11. Indemnification.
(a) Each Partnership agrees to indemnify, defend, and hold harmless
DWR, the General Partner, each Additional Seller (if any) and their respective
"affiliates" (as defined in Section 11(c)) from and against any loss, liability,
damage, cost, and expense (including attorneys' and accountants' fees and
expenses incurred in investigating or defending any demands, claims, or
lawsuits), actually and reasonably incurred arising from any act, omission,
activity, or conduct undertaken pursuant to this Agreement by or on behalf of
the Partnership, including, without limitation, any demands, claims, or lawsuits
initiated by a Limited Partner (or assignee thereof), provided that (1) DWR, the
General Partner, or the Additional Seller, as applicable, has determined, in
good faith, that the act, omission, activity, or conduct giving rise to the
claim for indemnification was in the best interests of the Partnership, and (2)
the act, omission, activity, or conduct that was the basis for such loss,
liability, damage, cost, or expense was not the result of misconduct or
negligence. The indemnity in this Section 11(a) is in addition to any liability
that the Partnership may otherwise have and will extend, upon the same terms and
conditions, to each person, if any, who controls an indemnified person within
the meaning of the 1933 Act. Notwithstanding anything to the contrary contained
in the foregoing, neither DWR, the General Partner, an Additional Seller, nor
their respective affiliates shall be indemnified by a Partnership for any
losses, liabilities, or expenses arising from or out of an alleged violation of
federal or state securities laws unless (1) there has been a successful
adjudication on the merits of each count involving alleged securities laws
violations as to the particular indemnitee, or (2) such claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction as
to the particular indemnitee, or (3) a court of competent jurisdiction approves
a settlement of the claims against the particular indemnitee and finds that
indemnification of the settlement and related costs should be made, provided,
with regard to such court approval, the indemnitee must apprise the court of the
position of the SEC, and the positions of the respective securities
administrators of Massachusetts, Missouri, Tennessee, and/or those other states
and jurisdictions in which the plaintiffs claim that they were offered or sold
Units, with respect to indemnification for securities laws violations before
seeking court approval for indemnification. Furthermore, in any action or
proceeding brought by a Limited Partner in the right of a Partnership to which
the General Partner, DWR, an Additional Seller, or any affiliate of any of the
foregoing is a party defendant, any such person shall be indemnified only to the
extent and subject to the conditions specified in DRULPA and this Section 11(a).
A Partnership shall make advances to
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the General Partner, DWR, an Additional Seller, or their respective affiliates
hereunder only if: (1) the demand, claim, or lawsuit relates to the performance
of duties or services by such persons to the Partnership; (2) such demand,
claim, or lawsuit is not initiated by a Limited Partner; and (3) such advances
are repaid, with interest at the legal rate under Delaware law, if the person
receiving such advance is ultimately found not to be entitled to indemnification
hereunder.
(b) DWR agrees to indemnify, hold harmless, and defend each
Partnership, the General Partner, their respective "affiliates" (as defined in
Section 11(c)), and their respective successors and assigns, from and against
any loss, claim, damage, liability, cost, and expense, joint or several
(including attorneys' and accountants' fees and expenses incurred in
investigating or defending any demands, claims, or lawsuits), to which any
indemnified party may become subject under the 1933 Act, the 1934 Act, the
CEAct, the Blue Sky law of any jurisdiction, or otherwise (including in
connection with the settlement of claims approved in advance by DWR and in
connection with any administrative proceedings), in respect of the offer or sale
of Units, insofar as such loss, claim, damage, liability, cost, or expense
arises out of, or is based upon: (i) a breach by DWR of any representation,
warranty, or agreement in this Agreement or any certificate delivered pursuant
to this Agreement, or the failure by DWR to perform any covenant made by DWR
herein; or (ii) a misleading or untrue statement of a material fact made in any
of the 1998 Registration Statements, the Prospectus or any Sales Literature, or
an omission to state a material fact therein which is required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus and any Sales Literature, in light of the circumstances under which
they were made) not misleading, provided such statement or omission relates
specifically to DWR, or was made in reliance upon, and in conformity with,
written information or instructions furnished by or on behalf of DWR or DWR's
agents. The indemnity in this Section 11(b) is in addition to any liability that
DWR may otherwise have and will extend, upon the same terms and conditions, to
each person, if any, who controls an indemnified person within the meaning of
the 1933 Act.
(c) As used in this Section 11 the term "affiliate" of a person
shall mean: (i) any natural person, partnership, corporation, association, or
other legal entity directly or indirectly owning, controlling, or holding with
power to vote 10% or more of the outstanding voting securities of such person;
(ii) any partnership, corporation, association, or other legal entity 10% or
more of whose outstanding voting securities are directly or indirectly owned,
controlled, or held with power to vote by such person; (iii) any natural person,
partnership, corporation, association, or other legal entity directly or
indirectly controlling, controlled by, or under common control with, such
person; or (iv) any officer, director, or partner of such person.
Notwithstanding the foregoing, solely for purposes of determining eligibility
for indemnification under Section 11(a), the term "affiliate" shall include only
those persons performing services for the applicable Partnership.
(d) Promptly after receipt by an indemnified party under Section
11(a) or (b) hereof of notice of the commencement of any action, claim, or
proceeding to which any of such subsections may apply, the indemnified party
will notify the indemnifying party in writing of the commencement thereof if a
claim in respect thereof is to be made against the
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indemnifying party under any of such subsections; but the omission so to notify
the indemnifying party will not relieve the indemnifying party from any
liability which the indemnifying party may have to the indemnified party
otherwise than under any of such subsections, except where such omission has
materially prejudiced the indemnifying party. In case any action, claim, or
proceeding is brought against an indemnified party and the indemnified party
notifies the indemnifying party of the commencement thereof as provided above,
the indemnifying party will be entitled to participate therein and, to the
extent that the indemnifying party desires, to assume the defense thereof with
counsel selected by the indemnifying party and not unreasonably disapproved by
the indemnified party. After notice from the indemnifying party to the
indemnified party of the indemnifying party's election so to assume the defense
thereof as provided above, the indemnifying party will not be liable to the
indemnified party under any of such subsections for any legal and other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof, other than reasonable costs of investigation.
(e) Notwithstanding Section 11(d), if, in any action, claim, or
proceeding as to which indemnification is or may be available under Section
11(a) or (b) hereof, an indemnified party reasonably determines that its
interests are or may be adverse, in whole or in part, to the indemnifying
party's interests or that there may be legal defenses available to the
indemnified party which are different from, in addition to, or inconsistent
with, the defenses available to the indemnifying party, the indemnified party
may retain its own counsel in connection with such action, claim, or proceeding,
and will be indemnified by the indemnifying party for any legal and other
expenses reasonably incurred in connection with investigating or defending such
action, claim, or proceeding.
(f) In no event will the indemnifying party be liable for the fees
and expenses of more than one counsel for all indemnified parties in connection
with any one action, claim, or proceeding, or in connection with separate but
similar or related actions, claims, or proceedings, in the same jurisdiction
arising out of the same general allegations. The indemnifying party will not be
liable for any settlement of any action, claim, or proceeding effected without
the indemnifying party's express written consent, but if any action, claim, or
proceeding is settled with the indemnifying party's express written consent or
if there is a final judgment for the plaintiff in any such action, claim, or
proceeding, the indemnifying party will indemnify, defend, and hold harmless an
indemnified party as provided in Section 11(a) or (b) hereof, as applicable.
(i) The exculpation provisions in each DWR Customer Agreement, and
each Limited Partnership Agreement shall not relieve any party thereto from any
liability it may have or incur to any party under this Agreement; nor shall any
party thereto be entitled to be indemnified by any party thereto pursuant to the
indemnification provisions contained in such agreements, against any loss,
liability, damage, cost, or expense it may incur under this Agreement.
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12. Termination. Each of the parties shall have the right to
terminate this Agreement as to itself at any time prior to a Monthly Closing by
giving written notice of such termination to the other parties.
13. Survival. The respective indemnities, agreements, obligations,
representations, warranties, and other statements of the parties hereto set
forth in this Agreement or in any certificates delivered pursuant hereto will
retain in full force and effect (regardless of any investigation or any
statement as to the results thereof made by, or on behalf of, DWR, any
Partnership, the General Partner or any officer, director, controlling person,
or agent of any of the foregoing) and will survive the delivery of and payment
for Units and the termination or expiration of this Agreement, and each Monthly
Closing.
14. Notices. All notices required or desired to be given under this
Agreement must be in writing and will be effective when given personally on the
date delivered or, when given by mail, on the date of receipt, addressed as
follows (or to such other address as the party entitled to notice hereafter
designates in accordance with the terms hereof):
if to the Partnerships or the General Partner:
Xxxx Xxxxxx Spectrum Strategic L.P.
c/o Demeter Management Corporation
Two World Trade Center, 62nd Floor
New York, New York 10048
Attn: Xx. Xxxx X. Xxxxxx
President
Xxxx Xxxxxx Spectrum Technical L.P.
c/o Demeter Management Corporation
Two World Trade Center, 62nd Floor
New York, New York 10048
Attn: Xx. Xxxx X. Xxxxxx
President
Xxxx Xxxxxx Spectrum Global Balanced L.P.
c/o Demeter Management Corporation
Two World Trade Center, 62nd Floor
New York, New York 10048
Attn: Xx. Xxxx X. Xxxxxx
President
Xxxx Xxxxxx Spectrum Select L.P.
c/o Demeter Management Corporation
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Two World Trade Center, 62nd Floor
New York, New York 10048
Attn: Xx. Xxxx X. Xxxxxx
President
if to DWR:
Xxxx Xxxxxx Xxxxxxxx Inc.
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Executive Vice President
15. Successors. This Agreement will be binding upon and inure solely
to the benefit of DWR, each Partnership and the General Partner (and to the
extent provided in Section 11 hereof, any Additional Sellers, the "affiliates"
of each Partnership, the General Partner, DWR, any Additional Sellers, and the
respective heirs, executors, administrators, successors, and assigns of such
persons), and no other person will acquire or have any rights under or by virtue
of this Agreement. No purchaser of Units will be deemed to be a successor or
assign to any party hereto merely by reason of such purchase.
16. Assignment; Amendment. This Agreement may not be assigned by any
party hereto without the prior express written consent of all other parties.
This Agreement may not be amended except by the express written consent of all
parties hereto.
17. Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws. If any action or proceeding shall be brought
by a party to this Agreement to enforce any right or remedy under this
Agreement, each party hereto hereby consents and will submit to the jurisdiction
of the courts of the State of New York or any federal court sitting in the
County, City and State of New York. Any action or proceeding brought by any
party to this Agreement to enforce any right, assert any claim or obtain any
relief whatsoever in connection with this Agreement shall be brought by such
party exclusively in the courts of the State of New York or any federal court
sitting in the County, City and State of New York.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
If the foregoing Agreement is satisfactory to you, please so
indicate by signing at the place provided below.
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Accepted and Agreed: XXXX XXXXXX SPECTRUM GLOBAL BALANCED L.P.
By: Demeter Management Corporation,
XXXX XXXXXX XXXXXXXX INC. General Partner
By: By:
----------------------------- ---------------------------------
Xxxx X. Xxxxxx Xxxx X. Xxxxxx
Executive Vice President President
XXXX XXXXXX SPECTRUM STRATEGIC L.P.
By: Demeter Management Corporation,
General Partner
By:
---------------------------------
Xxxx X. Xxxxxx
President
XXXX XXXXXX SPECTRUM TECHNICAL L.P.
By: Demeter Management Corporation,
General Partner
By:
---------------------------------
Xxxx X. Xxxxxx
President
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XXXX XXXXXX SPECTRUM SELECT L.P.
By: Demeter Management Corporation,
General Partner
By:
---------------------------------
Xxxx X. Xxxxxx
President
DEMETER MANAGEMENT CORPORATION
By:
---------------------------------
Xxxx X. Xxxxxx
President
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