Exhibit No. 1.01
SELLING GROUP MANAGER AGREEMENT
November 22, 2002
Uhlmann Price Securities, LLC
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000X
Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
The Price Fund I, L.P., a Delaware limited partnership (the "Partnership"),
whose sole general partner is Price Asset Management, Inc. (the "General
Partner"), hereby confirms its agreement with Uhlmann Price Securities, LLC
("Uhlmann Price," "Selling Group Manager"), as follows:
Introductory
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The Partnership is offering (the "Offering") for sale up to 50,000 of its
newly issued units of limited partnership (the "Units"). It is acknowledged that
the General Partner may, in its sole discretion, regardless of any priorities or
preferences, accept or reject subscriptions in whole or in part in the Offering
and terminate the Offering at any time. Once made, subscriptions are irrevocable
provided that a subscriber may revoke his subscription within 10 business days
prior to the applicable Closing (defined below), whichever comes first, by the
subscriber delivering written notice to the General Partner.
The term "Initial Offering Period" is the period commencing on the date of
the Prospectus and ending on December 31, 2003 (unless extended by the General
Partner upon amendment of the Registration Statement (defined below)) or such
earlier date as the General Partner has accepted subscriptions for at least
1,000 Units. During the Initial Offering Period, Uhlmann Price will offer Units
for sale at an "Initial Closing" at a price equal to $1,000 per Unit, which
Initial Closing will not take place unless the General Partner has accepted
subscriptions for at least 1,000 Units. If the minimum number of Units is not
sold during the Initial Offering Period, the Offering will terminate and all
subscription amounts (together with any interest earned thereon) will be
refunded to subscribers, as described in the Prospectus.
Units which remain unsold following the Initial Closing will be offered for
sale in a continuing offering (the "Continuing Offering") at monthly closings
("Monthly Closings;" the Initial Closing or any Monthly Closing, a "Closing") to
be held on the last day of each month at a price per Unit equal to 100% of the
Net Asset Value, as defined in the Partnership's agreement of limited
partnership (the "Limited Partnership Agreement"), as of the close of business
on the date of
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such Monthly Closing.
The minimum initial subscription for an investor is $5,000 ($2,000 for IRAs
or qualified retirement plans). Once an investor has been admitted to the Fund,
there is no minimum for additional subscriptions, except that they must be in
multiples of $1,000.
The Partnership has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (File No. 333-74176)
containing a prospectus relating to the Offering for the registration of the
Units under the Securities Act of 1933, as amended (the "1933 Act"). The
Registration Statement, as amended and as declared effective by the Commission,
is hereinafter referred to as the "Registration Statement." The prospectus on
file with the Commission at the time the Registration Statement initially
becomes effective is hereinafter called the "Prospectus," except that if the
Partnership files a Prospectus pursuant to Rule 424 of the rules and regulations
of the Commission under the 1933 Act (the "1933 Act Regulations") which differs
from the Prospectus on file at the time the Registration Statement initially
becomes effective, or if the Partnership files an amendment to the Registration
Statement subsequent to the time it initially becomes effective and such
amendment contains a Prospectus which differs from the Prospectus on file at the
time the Registration Statement initially becomes effective, the term
"Prospectus" refers to the Prospectus filed pursuant to Rule 424 or contained in
such amendment to the Registration Statement from and after the time said
Prospectus is filed with or transmitted to the Commission for filing.
Any terms not expressly defined herein have the same definition and meaning
as is set forth in the Prospectus.
SECTION 1. Appointment of Selling Group Manager
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Subject to the terms and conditions herein set forth, the Partnership
hereby appoints Uhlmann Price as its selling group manager and exclusive
marketing representative to consult with and advise the Partnership, and, on a
"best efforts" basis, to assist the Partnership with the solicitations of
subscriptions for Units in connection with the Partnership's offering of the
Units in the Offering. Uhlmann Price will offer and sell Units in compliance
with the requirements set forth in the Registration Statement, the Prospectus,
the Subscription Agreement and this Agreement.
On the basis of the representations, warranties and agreements herein
contained, and subject to the terms and conditions herein set forth, Uhlmann
Price accepts such appointment and agrees to consult with and advise the
Partnership as to matters relating to the Offering and agrees to use its best
efforts to solicit subscriptions for Units in accordance with this Agreement;
provided,
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however, that Uhlmann Price will not be responsible for obtaining subscriptions
for any specific number of Units, will not be required to purchase any Units and
will not be obligated to take any action which is inconsistent with all
applicable laws, regulations, decisions or orders or decrees, directives,
agreements or memoranda of or with any court, regulatory body, administrative
agency, or other government body. Units will be offered by means of Subscription
Agreements and Subscription Agreement for Existing Investors or Subscribers,
substantially in the respective forms set forth as Exhibit C and D to the
Prospectus (each a "Subscription Agreement").
The parties agree that Units may be sold by Uhlmann Price or by other
broker-dealers appointed by Uhlmann Price (each a "Selling Agent"), provided
that each such other broker-dealer executes a Selected Selling Agent Agreement
in the form attached hereto as Exhibit A. The Selling Group Manager and each
Selling Agent will notify the Partnership of the identity of the registered
representative of the Selling Group Manager or Selling Agent, as the case may
be, credited with the sale of each Unit (such registered representative being
referred to as the "Responsible Broker" and such Unit being referred to as a
"Credited Unit").
The Selling Group Manager and each Selling Agent will agree diligently to
make inquiries of each prospective purchaser of Units concerning the suitability
of such an investment for such person and to retain in its records and make
available to the Partnership for a period of a least six years, information
establishing that an investment in Units is suitable for each purchaser of Units
solicited by them.
SECTION 2. Compensation of the Selling Group Manager, Selling Agents and
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Responsible Brokers.
--------------------
As compensation for the Selling Group Manager's services under this
Agreement or a Selling Agent's services under a Selling Agent Agreement, the
Partnership will pay to the Selling Group Manager or such Selling Agent, as the
case may be, a sales commission equal to 4% of the purchase price of each Unit
sold by the Selling Group Manager or such Selling Agent. Such compensation will
be paid promptly following the applicable Closing for such Unit.
As additional compensation to each Responsible Broker, the Partnership will
pay the Responsible Broker a trailing commission with respect to each Credited
Unit equal to 1.50% of the Net Asset Value of a Unit (the "Trailing
Commission"). The Trailing Commission will be based on the Net Asset Value of a
Unit as of the last day of each year, commencing December 31, 2004; provided
that:
(a) no Trailing Commission will be paid with respect to any Credited
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Unit that has been outstanding for less than one full year;
(b) if a Credited Unit is redeemed during a subsequent year, the Trailing
Commission with respect to such Credited Unit will be prorated based on the
portion of the year during which such Credited Unit was outstanding; and
(c) to be eligible to receive the Trailing Commission, the Responsible
Broker must, at the date of payment, be a registered representative of a
broker-dealer that is registered with the Commission and is a member of the
National Association of Securities Dealers, Inc. (the "NASD") or be an
associated person of a futures commission merchant registered with the Commodity
Futures Trading Commission (the "CFTC") (such requirements being referred to as
the "Eligibility Requirements").
The Trailing Commission, if any, payable to a Responsible Broker will be
paid within 45 days following the close of each year.
Once Uhlmann Price or a Selling Agent sells Units to a particular investor,
Uhlmann Price or such Selling Agent will be entitled to a sales commission on
any Units subsequently purchased by that investor, and such units will be deemed
Credited Units of the Responsible Broker, for which (s)he will be entitled to a
Trailing Commission so long as he satisfies the Eligibility Requirements.
The appointment of the Selling Group Manager hereunder will terminate upon
completion or termination of the Offering.
SECTION 3. Closing Dates, Release of Funds
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(a) The Initial Closing, if any, for the acceptance of subscriptions for
Units of Currency is currently scheduled to be held on or before December 31,
2003. Monthly Closings in the Continuing Offering for Units will be held as of
the last day of each month.
(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 the 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 will be issued to any
subscriber; rather, the Selling Group Manager will deliver confirmations in its
customary form to subscribers whose subscriptions have been accepted by the
General Partner at each Closing.
(c) At each Closing, the delivery, receipt, and acceptance of subscriptions
for Units will be subject to the terms and conditions set forth in this
Agreement, including payment of the full subscription price for Units and
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delivery of a properly completed Subscription Agreement by each subscriber.
(d) Upon the satisfaction of such terms and conditions, the aggregate
subscription price for Units will be paid and delivered to the Partnership at
each Closing.
SECTION 4. Representations and Warranties
------------------------------
The Partnership and General Partner represent and warrant to the Selling
Group Manager as follows:
(a) The Registration Statement was filed with the Commission on
November ___, 2002. Copies of the Registration Statement have also been filed
with (i) the CFTC under the Commodity Exchange Act (the "CEA") and the rules and
regulations promulgated thereunder by the CFTC (the "CFTC Rules"); (ii) NASD
Regulation, Inc. ("NASD-R") pursuant to its Conduct Rules; and (iii) the
National Futures Association (the "NFA") in accordance with NFA Compliance Rule
2-13. At the time the Registration Statement becomes effective and at all times
thereafter, including the Initial Closing and each Monthly Closing, the
Registration Statement shall comply in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the CEA, the CFTC Rules,
and the rules of NASD-R and NFA. The Registration Statement and the Prospectus
contain all statements and information required to be included therein by the
CEA and the CFTC Rules. The Registration Statement, the Prospectus, and any
Sales Information (as such terms are defined previously herein or in Section 7
hereof) authorized by the Partnership for use in connection with the Offering
does not contain 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, in light of the circumstances under which they were made, not
misleading, and, if applicable, at such later time as any Prospectus was filed
with or mailed to the Commission for filing, the Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading, provided, however, that the representations
and warranties in this Section 4(a) will not apply to statements in or omissions
from such Registration Statement, Prospectus or any Sales Information made in
reliance upon and in conformity with information furnished to the Partnership by
the Selling Group Manager expressly regarding the Selling Group Manager for use
in the Prospectus or Sales Information, which information includes the
disclosure included in the Prospectus in the first two paragraphs under the
caption "PLAN OF DISTRIBUTION - General." The Sales Information will comply with
the 1933 Act, the 1973 Act Regulations, the CEA, the CFTC Rules and the Rules of
NASD-R and the NFA.
(b) The Limited Partnership Agreement provides for the subscription
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for and sale of the Units; all action required to be taken by the General
Partner and the Partnership as a condition to the sale of the Units to qualified
subscribers therefore has been, or prior to each Closing will have been, taken;
and, upon payment of the consideration therefore specified in each accepted
Subscription Agreement, the Units will constitute valid limited partnership
interests in the Partnership for which Units were subscribed.
(c) The Partnership has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the State of Delaware
with full power and authority to conduct its business as described in the
Prospectus, and has been duly qualified to do business as a foreign limited
partnership under the laws of, and is in good standing as such in, every
jurisdiction where the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the condition, financial or otherwise, or the business, operations or income
of the Partnership (a "Material Adverse Effect").
(d) The General Partner is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Illinois, and is qualified
to do business and is in good standing as a foreign corporation under the laws
of 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 Agreement or as described
in the Prospectus.
(e) Each of the Partnership 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 this Agreement and all other agreements referred to in the Prospectus or
the Registration Statement to which the Partnership or the General Partner is a
party.
(f) The General Partner will have a net worth at each Closing sufficient in
amount and satisfactory in form to meet the net worth requirements set forth in
the Limited Partnership Agreement.
(g) The Partnership does not own, directly or indirectly, other than in the
ordinary course of its business, equity securities or any equity interest in any
business enterprises.
(h) Xxxxxxxxxx Melvoin & Xxxxxxx, the firm which have issued its reports on
certain financial statements included in the Registration Statement and the
Prospectus, are independent certified public accountants within the meaning of
the Code of Professional Conduct of the American Institute of
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Certified Public Accountants and are independent accountants as required by the
1933 Act and the 1933 Act Regulations.
(i) This Agreement, and all other agreements referred to in the Prospectus
or the Registration Statement to which the Partnership or the General Partner is
a party have each been duly and validly authorized, executed and delivered by
the General Partner on behalf of the Partnership and the General Partner, as
applicable, and each constitutes a valid and binding agreement of the
Partnership and the General Partner, as applicable, enforceable against the
Partnership and the General Partner, as applicable, in accordance with its terms
except to the extent limited by bankruptcy, reorganization, insolvency,
moratorium and other laws of general application relating to or affecting the
enforcement of creditors' rights and by general equitable principles and except
as rights to indemnity hereunder may be limited by applicable securities laws.
The Partnership has full power and lawful authority to issue and sell the Units
to be sold by it hereunder on the terms and conditions set forth herein, all
necessary corporate proceedings therefor have been duly and validly taken, and
no consent, approval, authorization or other order of any governmental authority
is required in connection with such authorization, execution and delivery or
with the authorization, issue and sale of the Units, except such as may be
required under the 1933 Act or state securities laws.
(j) The Units have been duly and validly authorized and, when issued and
delivered pursuant to this Agreement, will be duly and validly issued, fully
paid and nonassessable. The Units are not subject to preemptive rights of any
security holder of the Partnership.
(k) The consummation of the transactions herein contemplated and the
fulfillment of the terms of this Agreement, and all other agreements referred to
in the Prospectus or the Registration Statement to which the Partnership or the
General Partner is a party, to be performed by the Partnership and the General
Partner, as applicable, will not conflict in any material respect with or result
in a material breach of any of the terms or provisions of, or constitute a
material default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of the Partnership or
the General Partner pursuant to the terms of any indenture, mortgage, deed of
trust, agreement for money borrowed or any other material agreement or
instrument to which the Partnership or the General Partner is a party, or by
which the Partnership or the General Partner may be bound, or to which any of
the property or assets of the Partnership or the General Partner are subject,
nor will such action result in any violation of the provisions of the charter or
the bylaws, certificate of limited partnership or partnership agreement, as
applicable, of the Partnership or the General Partner, or any statute or any
order, rule or regulation applicable to the Partnership or the General Partner
of any court or any regulatory authority or other governmental body having
jurisdiction over the
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Partnership or the General Partner, assuming satisfaction by the Selling Group
Manager of the terms of this Agreement and full compliance by the Selling Group
Manager and any other broker-dealers and their associated persons with all
applicable statutes, orders, rules, or regulations in connection with the
Offering.
(l) The financial statements of the Partnership and the General Partner,
together with the related notes thereto, set forth in the Registration Statement
and the Prospectus, fairly present the financial position and results of
operations of the Partnership and the General Partner on the basis stated in the
Registration Statement, at the respective dates and for the respective periods
to which they apply. Such statements and related notes are accurate, complete
and correct, comply as to form in all material respects with all applicable
accounting requirements, including the 1933 Act Regulations, have been prepared
in accordance with generally accepted accounting principles ("GAAP"), which were
consistently applied throughout the periods involved, except as otherwise
disclosed therein. Since the date of the statements of financial condition
included in the Registration Statement, except as contemplated in the
Prospectus, no events have occurred that have had a Material Adverse Effect. The
summaries of such financial statements and other financial, statistical and pro
forma information and related notes set forth in the Registration Statement and
the Prospectus are (i) accurate and correct and fairly present the information
purported to be shown thereby at the dates and for the periods indicated on a
basis consistent with the audited financial statements of the Partnership and
the General Partner and (ii) in compliance in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(m) Except as disclosed in the Registration Statement and Prospectus, there
is not now pending or, to the knowledge of the General Partner, threatened, any
action, suit or proceeding, before or by any court, governmental agency or body
or self-regulatory organization to which the General Partner, any "principals"
of the General Partner, as defined in CFTC Rule 4.10(e) ("General Partner
Principals") or the Partnership is a party, which might result in a Material
Adverse Effect, nor is the General Partner aware of any facts which would form
the basis for the assertion of any material claim or liability that are not
disclosed in the Registration Statement and Prospectus, and neither the General
Partner nor any General Partner Principal has received any notice of an
investigation by the Commission, the CFTC, NASD-R or the NFA regarding
noncompliance by the General Partner, the General Partner Principals or the
Partnership with the 1933 Act, the 1933 Act Regulations, the Securities Exchange
Act of 1934, as amended (the "1934 Act"), any other federal securities laws,
rules or regulations, the CEA, the CFTC Rules, or the rules of NASD-R 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 of the Partnership, or
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which could be material to an investor's decision to invest in any of the
Partnership.
(n) 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 Registration Statement
and the Prospectus, or required to perform their obligations under this
Agreement and all other agreements referred to in the Prospectus or the
Registration Statement to which the Partnership or the General Partner is a
party. The General Partner is registered as a commodity pool operator under the
CEA and is a member in good standing of the NFA. The General Partner's
principals identified in the Prospectus are all of the General Partner
Principals.
(o) 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 CEA by the General Partner and of the General Partner Principals
is disclosed in the Prospectus.
(p) The Partnership and the General Partner have filed all necessary
federal, state, local and foreign income and franchise tax returns and have
paid, or are contesting in good faith, all taxes shown as due thereon; and the
General Partner has no knowledge of any tax deficiency which has been or might
be asserted against the Partnership or the General Partner, which would result
in a Material Adverse Effect.
(q) All contracts and other documents of the Partnership or the General
Partner which are, under the 1933 Act Regulations, required to be filed as
exhibits to the Registration Statement have been so filed.
(r) The conduct of the businesses of the Partnership and the General
Partner is in compliance in all respects with applicable federal, state, local
and foreign laws and regulations, except where the failure to be in compliance
would not have a Material Adverse Effect. The Partnership and the General
Partner are in possession of all necessary licenses, permits, consents,
certificates, orders, and other governmental authorizations currently required
for the conduct of their respective businesses, except where failure to obtain
such licenses, permits, consents, certificates, orders or other governmental
authorizations would not have a Material Adverse Effect, and all such licenses,
permits, consents, certificates, orders and other governmental authorizations
are in full force and effect and neither the Partnership or the General Partner
has received any notice of proceedings related to the revocation or modification
thereof, and the Partnership and the General Partner are in all material
respects complying
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therewith; the expiration of any such licenses, permits, consents, certificates,
orders and other governmental authorizations would not materially affect their
operations; and none of the activities or businesses of the Partnership or the
General Partner is in violation of, or causes the Partnership or the General
Partner to violate, any material law, rule, regulation or order of the United
States, any state, county or locality, or any agency or body of the United
States or of any state, county or locality.
(s) Neither the Partnership nor the General Partner is in violation, breach
or default of or under its charter or bylaws, certificate of limited partnership
or limited partnership agreement, as applicable, or any material bond,
debenture, note or other evidence of indebtedness or any material contract,
agency agreement, indenture, mortgage, loan agreement, lease, joint venture or
other material agreement or instrument to which the Partnership or the General
Partner is a party or by which it or any of its properties may be bound, or is
in material violation of any federal, foreign, state or local law, order, rule,
regulation, writ, injunction or decree of any government, governmental
instrumentality or court, which violation would have a Material Adverse Effect.
(t) The Partnership and the General Partner will make and keep accurate
books and records reflecting their respective assets and maintain internal
accounting controls which provide reasonable assurance that (i) transactions are
executed with management's authorization; (ii) transactions are recorded as
necessary to permit preparation of the Partnership's consolidated financial
statements and to maintain accountability for the assets of the Partnership and
the General Partner; (iii) access to the assets of the Partnership and the
General Partner is permitted only in accordance with management's authorization;
and (iv) the reported accountability of the assets of the Partnership and the
General Partner is compared with existing assets at reasonable intervals.
(u) The Partnership knows of no outstanding claims for finder's,
origination or underwriting fees with respect to the sale of the Units except as
contemplated herein.
(v) All material transactions between the Partnership or the General
Partner and the officers, directors, partners or shareholders who beneficially
own more than 5% of any class of the Partnership's voting securities required to
be disclosed under the rules of the Commission, have been accurately disclosed
in the Registration Statement and the Prospectus, and, except as noted therein,
the terms of each such transaction are fair to the Partnership and no less
favorable to the Partnership than the terms that could have been obtained from
unrelated parties.
(w) The Partnership will not take, directly or indirectly, any action (and
does not know of any action taken by its directors, officers, shareholders or
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others) designed to or which has constituted or which might reasonably be
expected to cause or result in, under the 1934 Act, stabilization or
manipulation of the price of any security of the Partnership to facilitate, the
sale or resale of the Units.
Any certificate signed by an officer of the General Partner and delivered
to the Selling Group Manager or its counsel that refers to this Agreement will
be deemed to be a representation and warranty by the General Partner to the
Selling Group Manager as to the matters covered thereby with the same effect as
if such representation and warranty were set forth herein.
SECTION 5. Covenants of the Partnership
The Partnership and General Partner hereby covenant with the Selling Group
Manager as follows:
(a) The Partnership will not, at any time before or after the Registration
Statement, including any supplement filed pursuant to Rule 424 under the 1933
Act, is declared effective by the Commission file any amendment to such
Registration Statement without so notifying the Selling Group Manager and
without providing the Selling Group Manager a reasonable opportunity to review
such amendment.
(b) The Partnership will immediately upon receipt of any information
concerning the events listed below notify the Selling Group Manager and promptly
confirm the notice in writing:
(i) of the receipt of any comments from the Commission, or any other
governmental entity having authority with respect to the transactions
contemplated by this Agreement;
(ii) any requests by the Commission or any other governmental entity
having authority for any amendment or supplement to the Registration Statement
or for additional information;
(iii) of the issuance by the Commission or any other governmental
entity having authority of any order or other action suspending the Offering or
the use of the Registration Statement or the Prospectus;
(iv) the issuance by the Commission or any state authority having
jurisdiction of any stop order suspending the effectiveness of the Registration
Statement or of the initiation or threat of initiation or threat of any
proceedings for that purpose; or
(v) of the occurrence of any event mentioned in paragraph (g)
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below.
The Partnership will make every reasonable effort to prevent the issuance
by the Commission or any state authority having jurisdiction of any such order
and, if any such order at any time is issued, to obtain the lifting thereof at
the earliest possible time.
(c) The Partnership will give the Selling Group Manager notice of its
intention to file, and reasonable time to review prior to filing, any amendment
or supplement to the Registration Statement or the Prospectus.
(d) The Partnership has delivered or will deliver to the Selling Group
Manager and to its counsel two complete conformed copies (including all
exhibits) of the Registration Statement, as originally filed and each amendment
thereto.
(e) The Partnership will furnish to the Selling Group Manager, without
charge, from time to time during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, such number of copies of such
Prospectus (as amended or supplemented) as the Selling Group Manager may
reasonably request for the purposes contemplated by the 1933 Act or the 1934 Act
or the respective applicable rules and regulations of the Commission thereunder.
The Partnership authorizes the Selling Group Manager to use the Prospectus (as
amended or supplemented, if amended or supplemented) for any lawful manner in
connection with the sale of the Units by the Selling Group Manager.
(f) The Partnership will comply in all material respects with the 1933 Act
Regulations, the 1934 Act and the rules and regulations of the Commission
promulgated under the 1934 Act (the "1934 Act Regulations"), and all other
applicable laws (including state Blue Sky laws) to be complied with prior to,
at, and subsequent to each Closing. During the periods prior to each Closing and
when the Prospectus is required to be delivered, the Partnership will comply in
all material respects, at its own expense, with all requirements imposed upon it
by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, in each case as from time to time in force, in accordance with the
provisions hereof and the Prospectus.
(g) If, at any time during the period when the Prospectus relating to the
Units is required to be delivered (including the period after the Initial
Closing and prior to each Monthly Closing), any event relating to or affecting
the Partnership occurs, as a result of which it is necessary or appropriate, in
the reasonable good faith opinion of the Selling Group Manager's counsel, to
amend or supplement the Registration Statement or Prospectus in order to make
the Registration Statement or Prospectus not misleading in light of the
circumstances
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existing at the time it is delivered to a purchaser, the Partnership will, at
its expense, forthwith prepare, file with the Commission and furnish to the
Selling Group Manager a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the Registration Statement or
Prospectus (in form and substance satisfactory to the Selling Group Manager and
its counsel after a reasonable time for review) which will amend or supplement
the Registration Statement or Prospectus so that as amended or supplemented it
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading. For the purpose of this Agreement, the Partnership will timely
furnish to the Selling Group Manager such information with respect to itself as
the Selling Group Manager may from time to time reasonably request.
(h) If required, the Partnership will take all necessary actions, in
cooperation with the Selling Group Manager, to qualify or register the Units for
offering and sale by the Partnership under the applicable securities or Blue Sky
laws of each jurisdiction as the Selling Group Manager may reasonably designate,
provided, however, that the Partnership will not be obligated to qualify to do
business in any jurisdiction in which it is not so qualified. In each
jurisdiction where any of the Units has been qualified or registered as above
provided, the Partnership will make and file such statements and reports in each
fiscal period as are or may be required by the laws of such jurisdictions.
(i) During the period which the Units are registered under the 1934 Act or
for the three years from the final Closing, whichever period is greater, the
Partnership will furnish to its unitholders as soon as practicable after the end
of each fiscal year an annual report (including a consolidated statement of
financial condition and consolidated statements of income or operations, changes
in shareholders' equity and cash flows of the Partnership and the General
Partner as at the end of and for such year, certified by independent public
accountants in accordance with Regulation S-X under the 1933 Act).
(j) The Partnership will use the net proceeds from the sale of the Units in
the manner set forth in the Prospectus under the caption "Use of Proceeds."
(k) Other than as permitted by the 1933 Act, the 1933 Act Regulations and
the laws of any state in which the Units are qualified for sale, the Partnership
will not distribute any Prospectus, offering circular or other offering material
in connection with the offer and sale of Units.
(l) The Partnership will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earning statement (in form complying with the provisions of
Rule 158 of the regulations promulgated under the 0000 Xxx)
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covering a twelve-month period beginning not later than the first day of the
Partnership's fiscal quarter next following the effective date (as defined in
such Rule 158) of the Registration Statement.
(m) The Partnership will file, if required, with the Commission such
reports on Form SR as may be required pursuant to Rule 463 under the 1933 Act.
(n) The Partnership will register the Units under Section 12(g) of the 1934
Act prior to execution of the Public Offering Acknowledgment and will not
deregister the Units for a period of at least three years thereafter, unless
such registration is no longer required.
(o) The Partnership will take such actions and furnish such information as
are reasonably requested by the Selling Group Manager in order for the Selling
Group Manager to ensure compliance with the "Interpretation With Respect to Free
Riding and Withholding" of NASD-R.
(p) Prior to each Closing, the Partnership will conduct its business in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders including, without
limitation, all decisions, directives and orders of the NFA, the CFTC and
NASD-R.
(q) The Partnership will not, prior to each Closing, incur any liability or
obligation, direct or contingent, or enter into any material transactions, other
than in the ordinary course of business, except as contemplated by the
Prospectus.
(r) The representations and warranties made in this Agreement will be true
and correct as of the date hereof and as of each Closing.
SECTION 6. Payment of Expenses
The Partnership agrees to pay or cause to be paid and reimburse the party
making payment for all expenses incident to the performance of the obligations
of the Partnership under this Agreement, including, without limitation, the
following: (i) the fees and disbursements of the Partnership's counsel,
accountants and other advisors; (ii) the qualification of the Units under all
applicable securities or Blue Sky laws, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of a Blue Sky memorandum; (iii) the printing and delivery to the
Selling Group Manager in such quantities as the Selling Group Manager reasonably
requests of copies of the Registration Statement and the Prospectus, as amended
or supplemented and all other documents in connection with this Agreement; (iv)
filing fees incurred in connection with the review of the Offering by the
Commission, CFTC and by NASD-R.
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SECTION 7. Indemnification
(a) The Partnership agrees to indemnify and hold harmless the Selling Group
Manager and any Selling Agent, its respective officers, directors, agents,
servants and employees and each person, if any, who controls either the Selling
Group Manager or any Selling Agent within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act, against any and all loss, liability,
claim, damage or expense whatsoever (including but not limited to settlement
expenses), joint or several, that any indemnified party may suffer or to which
any indemnified party may become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse any indemnified party upon written
demand for any expenses (including fees and disbursements of counsel) incurred
by such indemnified party in connection with investigating, preparing or
defending any actions, proceedings or claims (whether commenced or threatened)
to the extent such losses, claims, damages, liabilities or actions: (i) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in (a) the Registration Statement (or any amendment or
supplement thereto), the Prospectus (or any amendment or supplement thereto),
(b) any application or other instrument or document of the Partnership or based
upon written information supplied by the Partnership or their representatives
filed in any state or jurisdiction to register or qualify any or all of the
Units under the securities laws thereof (collectively, the "Blue Sky
Application"), or (c) any application or other document, advertisement, oral
statement, or communication ("Sales Information") prepared, made or executed by
or, with its consent, on behalf of the Partnership, or based upon written or
oral information furnished by, or with its consent, on behalf of the
Partnership, in connection with or in contemplation of the transactions
contemplated by this Agreement; (ii) arise out of or are based upon the omission
or alleged omission to state in any of the foregoing documents or information a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; or (iii) arise from any theory of liability whatsoever relating to
or arising from or based upon the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), Blue Sky Application or Sales Information or other
documentation distributed in connection with the Offering; provided, however,
that no indemnification is required under this paragraph (a) to the extent such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue statements or alleged untrue statements in, or material omission or
alleged material omission from, the Registration Statement (or any amendment or
supplement thereto), Prospectus or Sales Information made in reliance upon and
in conformity with information furnished to the Partnership by the Selling Group
Manager regarding Uhlmann Price expressly for use in the Prospectus, which
information consists of the disclosure included in the Prospectus contained in
the first
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paragraph under the caption "TERMS OF THE OFFERING - General."
(b) The Selling Group Manager agrees to indemnify and hold harmless the
Partnership, its directors, officers, agents, servants and employees, and each
person, if any, who controls the Partnership within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage or expense whatsoever (including but not limited to
settlement expenses), joint or several, that the Partnership or any of them may
suffer or to which the Partnership or any of them may become subject under all
applicable federal and state laws or otherwise, and to promptly reimburse the
Partnership and any such persons upon written demand for any expenses (including
fees and disbursements of counsel) incurred by the Partnership or any of them in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto) or the
Prospectus (or any amendment or supplement thereto), the Sales Information, or
arise out of or are based upon the omission or alleged omission to state in any
of the foregoing documents a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Selling Group
Manager's obligations under this Section 7(b) will exist only if, and only to
the extent, that such untrue statement or alleged untrue statement was made in,
or such material fact or alleged material fact was omitted from the Registration
Statement (or any amendment or supplement thereto) or the Prospectus (or any
amendment or supplement thereto) or the Sales Information in reliance upon and
in conformity with information furnished to the Partnership by the Selling Group
Manager regarding Uhlmann Price expressly for use in the Prospectus, which
information consists of the disclosure included in the Prospectus contained in
the first paragraph under the caption "TERMS OF THE OFFERING - General."
(c) Each indemnified party must give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder. No indemnification will be available to any party who fails to
give notice as provided in this Section 7(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice, but otherwise the omission so
to notify the indemnifying party will not relieve it from any liability that it
may have to an indemnified party under this Section 7. An indemnifying party may
participate at its own expense in the defense of such action. In addition, if it
so elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
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assume the defense of such action with counsel chosen by it and approved by the
indemnified parties that are defendants in such action, and such indemnified
parties will not be liable for any fees and expenses of such counsel for the
indemnified parties incurred thereafter in connection with such action,
proceeding or claim, other than reasonable costs of investigation. In any
action, proceeding or claim, the indemnified party will have the right to retain
its own counsel, but the fees and disbursements of such counsel will be at its
own expense unless (i) the parties to any such action, proceeding or claim
include both the indemnifying party and the indemnified party and (ii)
representation of both parties by the same counsel reasonably would be deemed
inappropriate due to actual or potential conflicting interests between them. In
no event will the indemnifying parties be liable for the fees and expenses of
more than one separate firm of attorneys (other than any special counsel that
said firm may retain) for each indemnified party in connection with any one
action, proceeding or claim or separate but similar or related actions,
proceedings or claims in the same jurisdiction arising out of the same general
allegations or circumstances.
SECTION 8. Contribution
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in Section 7 is due in accordance with
its terms but is for any reason held by a court to be unavailable from the
Partnership or the Selling Group Manager, the Partnership or the Selling Group
Manager will contribute to the aggregate losses, claims, damages and liabilities
(including any investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting any contribution received by the
Partnership or the Selling Group Manager from persons other than the other party
thereto, who may also be liable for contribution) to the party entitled to
indemnification in such proportion so that the Selling Group Manager is
responsible for that portion represented by the percentage that the fees paid to
the Selling Group Manager pursuant to Section 1 of this Agreement (not including
expenses) bears to the gross proceeds received by the Partnership from the sale
of the Units in the Offering and the Partnership will be responsible for the
balance. If, however, the allocation provided above is not permitted by
applicable law, then each indemnifying party will contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Partnership on the one hand and the Selling Group Manager on the other in
connection with the statements or omissions which resulted in such losses,
claims, damage or liabilities (or actions, proceedings or claims in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Partnership on the one hand and the Selling Group
Manager on the other will be deemed to be in the same proportion as the total
gross proceeds from the Offering (before deducting expenses) received by the
Partnership bears to the total fees (not including
17
expenses) received by the Selling Group Manager. The relative fault will be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or other omission or alleged omission to
state a material fact relates to information supplied by the Partnership on the
one hand or the Selling Group Manager on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Partnership and the Selling Group Manager agree
that it would not be just and equitable if contribution pursuant to this Section
8 were determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to above
in this Section 8. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions, proceedings or
claims in respect thereof referred to above in this Section 8 will be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action, proceeding
or claim. It is expressly agreed that the Selling Group Manager will not be
liable for any loss, liability, claim, damage or expense or be required to
contribute any amount which in the aggregate exceeds the amount paid to the
Selling Group Manager under the Agreement. It is understood that the
above-stated limitation on the Selling Group Manager's liability is essential
to the Selling Group Manager and that the Selling Group Manager would not have
entered into this Agreement if such limitation had not been agreed to by the
parties to this Agreement. No person found guilty of any fraudulent
misrepresentation (within the meaning of Section 11 (f) of the 0000 Xxx) will be
entitled to contribution from any person who was not also found guilty of such
fraudulent misrepresentation. The obligations of the Partnership and the Selling
Group Manager under this Section 8 and under Section 7 hereof will be in
addition to any liability which the Partnership and the Selling Group Manager
may otherwise have. For purposes of this Section 8, each of the Selling Group
Manager's officers and directors and each person, if any, who controls the
Selling Group Manager within the meaning of the 1933 Act and the 1934 Act will
have the same rights to contribution as each officer and director of the
Partnership and each person, if any, who controls the Partnership within the
meaning of the 1933 Act and the 1934 Act, and each officer and director of the
Selling Group Manager or the Partnership, will have the same rights to
contribution as the Selling Group Manager or the Partnership, respectively. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action, suit, claim or proceeding against such party in respect of which
a claim for contribution may be made against another party under this Section 8,
will notify such party from whom contribution may be sought. No person will be
entitled to contribution hereunder who fails to give notice as provided in this
Section 8 if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but otherwise the omission so to notify the party
from whom contribution is sought will not relieve it from any liability that it
may have to a party seeking contribution under this Section 8.
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SECTION 9. Termination
(a) In the event the Partnership elects not to accept any subscriptions for
Units in the Offering, this Agreement will terminate upon refund by the
Partnership to each person who has ordered any of the Units the full amount
which it may have received from such persons and no party to this Agreement will
have any obligation to the other hereunder, except for the Partnership's
obligations under Sections 1, 6, 7 and 8 hereof.
(b) In the event that at least 1,000 Units are not sold by the end of the
Initial Offering Period, this Agreement will terminate and any such termination
will be without liability of any party to any other party except as otherwise
provided in Sections 1, 6, 7 and 8 hereof.
SECTION 10. Survival
The respective indemnities, agreements, representations, warranties and
other statements of the Partnership and the Selling Group Manager, as set forth
in this Agreement, will remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Selling Group Manager or any of its officers or directors or any person
controlling the Selling Group Manager, or the Partnership or any officer,
director or person controlling the Partnership, and will survive termination of
the Agreement and the receipt or delivery of any payment for the Units.
SECTION 11. Miscellaneous
Notices hereunder, except as otherwise provided herein, must be given in
writing or by telegraph, addressed (a) to the Selling Group Manager at 000 X.
Xxxxxxx Xxxx., Xxxxx 0000X, Xxxxxxx, Xxxxxxxx 00000 (Attention: ____________)
with a copy and (b) to the Partnership at c/o Price Asset Management, Inc.
(Attention: Chairman), with a copy (which will not constitute notice) to
Xxxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000
(Attention: Xxxxxxx X. Xxxxx, Esq.).
This Agreement is made solely for the benefit of and will be binding upon
the parties hereto and their respective successors and the controlling persons,
directors and officers referred to in Section 7 hereof and no other person will
have any right or obligations hereunder. The term "successor" does not include
any purchaser of any of the Units.
This Agreement will be governed by and construed in accordance with the
laws of the State of Illinois.
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This Agreement may be signed in various counterparts which together will
constitute one agreement.
If the foregoing correctly sets forth the arrangement among the Partnership
and the Selling Group Manager, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and the Selling Group
Manager's acceptance will constitute a binding agreement.
Very truly yours,
THE PRICE FUND I, L.P.
By: Price Asset Management, Inc., its
general partner
By:
--------------------------------
Xxxxxx Xxxxxx Xxxxx III
Chairman
Accepted as of the date first above written.
UHLMANN PRICE SECURITIES, LLC
By:
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Title:
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