Exhibit 1.1
SELLING AGREEMENT
XXXXXXX XXXXX XXXXXX DIVERSIFIED 2000 FUTURES FUND L.P.
190,000 Units of Limited Partnership Interest
AGREEMENT made as of the ___ day of November 2002, by and
among XXXXXXX XXXXX BARNEY DIVERSIFIED 2000 FUTURES FUND L.P., a New York
limited partnership (the "Partnership"), XXXXX XXXXXX FUTURES MANAGEMENT LLC, a
Delaware limited liability company ("SBFM") and XXXXXXX XXXXX BARNEY INC., a
New York corporation ("SSB").
W I T N E S S E T H :
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WHEREAS, the Partnership has filed a registration statement on
Form S-1 (File No. 333- ) with the Securities and Exchange Commission (the
"SEC") in accordance with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively, the "Act"), and
as a part thereof a form of preliminary prospectus relating to the offer and
sale of up to 190,000 Units of Limited Partnership Interest in the Partnership
(the "Units") (the registration statement in the form in which it becomes
effective under the Act being hereinafter referred to as the "Registration
Statement" and the prospectus in the form included therein being hereinafter
referred to as the "Prospectus"; provided that (1) if the Partnership files a
post-effective amendment to such registration statement, then the term
"Registration Statement" shall refer to the registration statement as amended by
such post-effective amendment, and the term "Prospectus" shall refer to the
amended prospectus then on file with the SEC and (2) if a prospectus filed by
the Partnership pursuant to either Rule 424(b) or (c) promulgated under the Act
shall differ from the prospectus on file at the time the Registration Statement
or any post-effective amendment thereof shall have become effective, the term
"Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b) or (c),
from and after the date on which it shall have been filed); further provided
that, consistent with SEC Rule 429, the Registration Statement relates to Units
covered by prior Registration Statement 333-87663; and
WHEREAS, the Partnership has entered into management
agreements with each of Aspect Capital Limited, Beacon Management Corporation,
Xxxxxxxx & Company, Inc. and Xxxxxx Capital Management, L.P. (each an "Advisor,"
collectively, the "Advisors") and SBFM, (the "Management Agreements"), pursuant
to which commodity trading decisions will be made by the Advisors as described
in the Prospectus; and
WHEREAS, SSB has agreed to assist in the offer and sale of the
Units upon the terms and in reliance upon the representations, warranties and
agreements set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment of Selling Agent
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(a) The Partnership hereby appoints SSB as its exclusive agent to
offer and sell the Units on the terms and conditions set forth herein and in the
Registration Statement and the Prospectus during the offering period (the
"Offering Period"), a period commencing on the date the Registration Statement
is declared effective by the SEC and ending upon the earlier of the date two
years from the date the Registration Statement is declared effective and the
date on which 190,000 Units are sold, unless the SBFM, general partner of the
Partnership, terminates the offering at an earlier date.
(b) SSB hereby accepts appointment as selling agent for the
Partnership to effect sales of up to 190,000 Units as provided herein, in the
Registration Statement and in the Prospectus. SSB represents and hereby confirms
that in selling to subscribers and otherwise carrying out its obligations under
this agreement it will comply with Paragraphs (b)(2) and (b)(3) of Rule 2810 of
the Conduct Rules of the NASD Inc. ("NASD"), as set forth in Schedule I hereto.
SSB agrees that SBFM has the right to reject any subscription for Units for any
reason and to suspend sales of Units during the Offering Period.
(c) The Partnership agrees to bear all expenses in connection with the
Offering Period, including, without limitation, fees and expenses of its
counsel, SEC and other filing fees, blue sky fees and expenses, printing
expenses, fees and expenses of independent public accountants and banking fees.
(d) SSB agrees that all funds received by SSB from subscribers shall
be promptly delivered to Citibank N.A. (formerly European American Bank) as the
bank holding the subscription proceeds for the benefit of the subscribers (the
"Bank") by noon of the second business day after receipt. Furthermore, SSB will
require all soliciting dealers to forward to SSB, for delivery to the Bank, all
checks received by them from subscribers for Units by noon of the next business
day after their receipt of the checks. SSB represents and hereby confirms that
if it receives checks from customers it will act as processing broker-dealer in
accordance with Rule 15c2-4 under the Securities Exchange Act of 1934 and NASD
Notices to Members 84-7 and 84-64.
(e) SSB represents and confirms that it is registered with the
Commodity Futures Trading Commission ("CFTC") as a futures commission merchant
and is a member of the National Futures Association ("NFA") in that capacity.
Further, any associated person of SSB who receives continuing compensation in
the form of a portion of the commodity brokerage fees paid by the Partnership
shall be registered with the CFTC as an associated person of a futures
commission merchant or an introducing broker and shall be an associate member of
the NFA (qualified as an associated person by having taken the Series 3 or
Series 31 Commodities Exam or having been "grandfathered" as an associated
person qualified to do commodity brokerage).
2. Agreements of the Partnership. The Partnership agrees with SSB
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as follows:
(a) The Partnership will advise SSB, promptly after it receives notice
thereof, (i) of the time when the Registration Statement has become effective
and when any amendment thereto becomes effective, (ii) of the issuance by the
SEC of any stop order or of any order preventing or
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suspending the use of any Prospectus, or the initiation or threat of any
proceeding for any such purpose and (iii) of any request by the SEC for
amendments or supplements to the Registration Statement or Prospectus or for
additional information. In the event of the issuance of any stop order or of any
order preventing or suspending the use of any Prospectus, the Partnership will
promptly use its best efforts to obtain its withdrawal.
(b) The Partnership will furnish to SSB, without charge, two signed
copies of the Registration Statement as originally filed and each amendment
thereto, including all exhibits.
(c) The Partnership will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which SSB
shall not previously have been advised or to which SSB shall reasonably object
in writing.
(d) The Partnership will furnish SSB with copies of any preliminary
prospectus and of the Prospectus in such quantities as they may from time to
time reasonably request. If at any time when the Prospectus is required to be
delivered under the Act any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it shall be necessary to amend
or supplement the Prospectus in order to comply with the Act, the Partnership
will notify SSB and upon its request prepare and furnish without charge to it as
many copies as it may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance.
(e) The Partnership will take such action as SSB may reasonably
request to qualify the Units for offering and sale under the securities or blue
sky laws of such jurisdictions as it may request and will comply with such laws
so as to permit the continuance of sales in such jurisdictions for as long as
may be necessary to complete the distribution.
3. Representations and Warranties.
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The Partnership represents and warrants to SSB that:
(a) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto complied or
when so filed will comply in all material respects with the requirements of the
Act and the Commodity Exchange Act ("CEA").
(b) At the time the Registration Statement becomes effective and at
all times subsequent thereto up to the termination of the Offering Period, the
Registration Statement and the Prospectus, and any amendments or supplements
thereto, will comply in all material respects with the provisions of the Act and
the CEA and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will 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 not misleading, provided, however, that the
representations and warranties contained in subparagraphs (a) and (b) above do
not apply to any statements or omissions in the Registration Statement or
Prospectus, or any amendment or supplement thereto, made in reliance upon
information furnished to the Partnership by SSB or on its behalf expressly for
use therein.
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(c) The Partnership is duly formed and validly existing as a limited
partnership under the New York Revised Uniform Limited Partnership Act (the
"Partnership Law"), with full partnership power and authority to carry out its
obligations under this Agreement, its Certificate of Limited Partnership, as
amended from time to time (the "Partnership Certificate"), and its Limited
Partnership Agreement, as amended from time to time (the "Partnership
Agreement"), and to conduct its business as described in the Prospectus. The
Partnership conducts no business and owns or leases no properties which would
require it to qualify to do business as a foreign organization in any
jurisdiction.
(d) The offer and sale of the Units has been duly authorized by the
Partnership and the Units constitute valid limited partnership interests in the
Partnership which conform to the description thereof contained in the
Prospectus; and the liability of each limited partner will be limited as set
forth in the Prospectus, and no limited partner will be subject to personal
liability for the debts, obligations, or liabilities of the Partnership by
reason of his being a limited partner other than as described in the Prospectus.
(e) The offer and sale of the Units and the compliance by the
Partnership with all of the provisions of this Agreement will not conflict with
or result in a breach of any of the terms or provisions of any agreement to
which the Partnership is a party or by which it is bound, nor will such action
result in a violation of the provisions of the Partnership Agreement or
Partnership Certificate or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Partnership or
any of its properties.
(f) A separate subscription account has been opened at the Bank and
will be maintained for all funds received from subscribers for Units. All
payments received from persons desiring to purchase Units will be deposited in
such account and held in accordance with the terms of the agreements between SSB
and the Bank.
(g) PricewaterhouseCoopers LLP and KPMG LLP, who have each certified
certain financial statements contained in the Registration Statement, are each
independent public accountants as required by the Act.
4. Conditions. The obligations of the parties hereunder shall at all
times be subject to the continued accuracy of all representations and warranties
of the parties contained herein as though such representations and warranties
had been made at and as of such times, and the Registration Statement shall have
become effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the SEC; and all requests for
additional information on the part of the SEC shall have been complied with.
5. Indemnification.
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SSB agrees to indemnify and hold harmless the Partnership against any
and all loss, liability, claim, damage and expense whatsoever (including but not
limited to any and all expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever) arising out of or based upon any untrue or alleged untrue
statement of material fact contained in any preliminary prospectus, the
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Registration Statement or the Prospectus (as from time to time amended and
supplemented), or any related sales material used by SSB in connection with this
offering of Units, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, provided that such statement or omission was made in reliance
upon and in conformity with information furnished to the Partnership by SSB,
expressly for use in any preliminary prospectus, the Registration Statement or
Prospectus or any amendment or supplement thereto.
6. Term.
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(a) This Agreement may be terminated by SSB, at its option, by giving
notice to the Partnership, if:
(i) there shall have been, since the respective dates as of
which information is given in the Registration Statement, any material adverse
change in the condition, financial or otherwise, of the Partnership or SBFM,
which change in its judgment shall render it inadvisable to proceed with the
offer and sale of the Units; or
(ii) any of the conditions specified in Section 4 hereof
shall not have been fulfilled when and as required by this Agreement to be
fulfilled.
(b) The termination of this Agreement for any reason set forth in this
Section 6 shall not affect the obligations of the Partnership contained in
Section 2 hereof.
7. Miscellaneous.
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(a) All representations, warranties and agreements contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of any party, (ii) delivery of and
payment for the Units, or (iii) termination of this Agreement.
(b) Except as otherwise expressly provided, this Agreement is made
solely for the benefit of, and shall be binding upon, the parties hereto and
their respective successors and assigns, and no other person shall have any
right or obligation under it. The terms "successors" and "assigns" shall not
include any purchasers, as such, of Units in the Partnership.
(c) Whenever notice is required to be given by the provisions of this
Agreement, such notice shall be in writing and delivered personally or by
registered or certified mail, return receipt requested, postage prepaid, and
properly addressed as follows:
If to the Partnership to:
Xxxxxxx Xxxxx Xxxxxx Diversified 2000
Futures Fund L. P.
c/o Xxxxx Xxxxxx Futures Management LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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If to SSB to:
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to SBFM to:
Xxxxx Xxxxxx Futures Management LLC
000Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(d) No party is authorized by the Partnership to give any information
or make any representation in connection with the offering of Units other than
those contained in the Prospectus and such sales literature the use of which has
been authorized in writing by the Partnership.
(e) This Agreement may be signed in counterpart.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
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IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
the parties as of the day and year first above mentioned.
XXXXXXX XXXXX XXXXXX
DIVERSIFIED 2000 FUTURES FUND L. P.
By: Xxxxx Xxxxxx Futures Management LLC
(General Partner)
By:
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XXXXX XXXXXX
FUTURES MANAGEMENT LLC
By:
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XXXXXXX XXXXX BARNEY INC.
By:
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SCHEDULE I
Suitability
(b)(2)(A) A member or person associated with a member shall not
underwrite or participate in a public offering of a direct participation program
unless standards of suitability have been established by the program for
participants therein and such standards are fully disclosed in the prospectus
and are consistent with the provisions of subparagraph (B).
(B) In recommending to a participant the purchase, sale or
exchange of an interest in a direct participation program, a member or person
associated with a member shall:
(i) have reasonable grounds to believe, on the basis of
information obtained from the participant concerning his investment
objectives, other investments, financial situation and needs, and any
other information known by the member or associated person, that:
a. the participant is or will be in a financial
position appropriate to enable him to realize to a significant extent the
benefits described in the prospectus, including the tax benefits where
they are a significant aspect of the program;
b. the participant has a fair market net worth
sufficient to sustain the risks inherent in the program, including loss
of investment and lack of liquidity; and
c. the program is otherwise suitable for the
participant; and
(ii) maintain in the files of the member documents
disclosing the basis upon which the determination of suitability was
reached as to each participant.
(C) Notwithstanding the provisions of subparagraphs (A) and
(B) hereof, no member shall execute any transaction in a direct
participation program in a discretionary account without prior written
approval of the transaction by the customer.
(D) Subparagraphs (A) and (B), and, only in situations where
the member is not affiliated with the direct participation program,
subparagraph (C) shall not apply to:
(i) a secondary public offering of or a secondary market
transaction in a unit, depositary receipt, or other interest in a direct
participation program for which quotations are displayed on Nasdaq or which is
listed on a registered national securities exchange; or
(ii) an initial public offering of a unit, depositary
receipt or other interest in a direct participation program for which an
application for inclusion on Nasdaq or listing on a registered national
securities exchange has been approved by Nasdaq or such exchange and the
applicant makes a good faith representation that it believes such
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inclusion on Nasdaq or listing on an exchange will occur within a
reasonable period of time following the formation of the program.
Disclosure
(b)(3)(A) Prior to participating in a public offering of a direct
participation program, a member or person associated with a member shall have
reasonable grounds to believe, based on information made available to him by the
sponsor through a prospectus or other materials, that all material facts are
adequately and accurately disclosed and provide a basis for evaluating the
program.
(B) In determining the adequacy of disclosed facts pursuant to
subparagraph (A) hereof, a member or person associated with a member shall
obtain information on material facts relating at a minimum to the following, if
relevant in view of the nature of the program:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects
(iv) financial stability and experience of the sponsor;
(v) the program's conflict and risk factors; and
(vi) appraisals and other pertinent reports.
(C) For purposes of subparagraphs (A) or (B) hereof, a member
or person associated with a member may rely upon the results of an inquiry
conducted by another member or members, provided that:
(i) the member or person associated with a member has
reasonable grounds to believe that such inquiry was conducted with due
care;
(ii) the results of the inquiry were provided to the
member or person associated with a member with the consent of the
member or members conducting or directing the inquiry; and
(iii) no member that participated in the inquiry is a
sponsor of the program or an affiliate of such sponsor.
(D) Prior to executing a purchase transaction in a direct
participation program, a member or person associated with a member shall inform
the prospective participant of all pertinent facts relating to the liquidity and
marketability of the program during the term of the investment; provided,
however, that paragraph (b) shall not apply to an initial or secondary public
offering of or a secondary market transaction in a unit, depositary receipt or
other interest in a direct participation program which complies with
subparagraph (2)(D).
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