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EXHIBIT 1.1
SELLING AGREEMENT
XXXXXXX XXXXX XXXXXX GLOBAL DIVERSIFIED FUTURES FUND L. P.
100,000 Units of Limited Partnership Interest
AGREEMENT made as of the 21st day of October, 1998, by and among
XXXXXXX XXXXX BARNEY GLOBAL DIVERSIFIED FUTURES FUND L. P., a New York limited
partnership (the "Partnership"), XXXXX XXXXXX FUTURES MANAGEMENT INC., a
Delaware corporation ("SBFM") and XXXXXXX XXXXX BARNEY INC., a Delaware
corporation ("SSB").
W I T N E S S E T H :
WHEREAS, the Partnership has filed a registration statement on Form S-1
(File No. ***-*****) 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
100,000 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); and
WHEREAS, the Partnership intends to enter into management agreements
with each of Xxxxxxxx & Company, Inc., Eagle Trading Systems Inc., Xxxxxxxx
Trading Company and Rabar Market Research, Inc. (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:
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1. Appointment of Selling Agent
(a) (i) 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 initial offering period
(the "Initial Offering Period"), a period of 90 days commencing on the date the
Registration Statement is declared effective by the SEC, unless SBFM, the
general partner of the Partnership, terminates the offering at an earlier date
or extends the Initial Offering Period for up to an additional 60 days by
written notice to SSB. As described in the Prospectus, 15,000 Units must be sold
during the Initial Offering Period for the Partnership to commence its trading
activities; if fewer than 15,000 Units are sold during the Initial Offering
Period, proceeds will be promptly returned to subscribers at the termination
thereof.
(ii) The Partnership hereby also 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 a period commencing
on the date of termination of the Initial Offering Period (assuming 15,000 Units
are sold) and ending upon the earlier of the date two years from the date the
Registration Statement is declared effective and the date on which 100,000 Units
are sold (the "Continuous Offering", and, together with the Initial Offering
Period, the "Offering Period").
(b) SSB hereby accepts appointment as selling agent for the Partnership
to effect sales of up to 100,000 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 National Association of Securities Dealers, 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. At SSB's discretion it may form a group of securities
dealers ("Soliciting Dealers") to solicit sales of the Units during the Offering
Period. Any such Soliciting Dealer shall execute a Soliciting Dealer Agreement
in substantially the form attached hereto as Exhibit A.
Each such dealer shall become a party to this Agreement upon notice by
SSB to the Partnership that SSB and such dealer have entered into such
Soliciting Dealer Agreement.
(c) SSB agrees initially to bear all expenses of the Partnership in
connection with the Initial Offering Period (estimated at $700,000), 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 escrow fees.
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(d) SSB agrees that all funds received by SSB from subscribers shall
be promptly delivered to European American Bank as escrow agent for the benefit
of the subscribers by noon of the second business day after receipt.
Furthermore, SSB will require all Soliciting Dealers to forward to SSB, for
delivery to the escrow agent, 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.
Any Soliciting Dealer selected by SSB that 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 a futures commission merchant or an
introducing broker and shall be a member of the NFA. Further, any associated
person of SSB or a Soliciting Dealer 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 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 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.
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(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.
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.
(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
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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 escrow account will be opened at European American Bank
(the "Escrow Agent") and 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 such Escrow
Agreement.
(g) PricewaterhouseCoopers LLP, who have certified certain financial
statements contained in the Registration Statement, are independent public
accountants as required by the Act.
4. Conditions of Closing. 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 following
additional conditions:
(a) 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;
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(b) SSB shall have received an opinion of Xxxxxxx Xxxx & Xxxxxxxxx,
dated the Closing Date (as defined in Paragraph 7 below), in form and substance
satisfactory to it, to the effect that:
(i) The Partnership has been duly formed and is validly
existing as a limited partnership under the Partnership Law with full
partnership power and authority to carry out its obligations under this
Agreement and the Partnership Agreement, and to conduct its business as
described in the Prospectus, and, to the best of the knowledge of such counsel,
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;
(ii) 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;
(iii) 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 the Partnership
Certificate or Partnership Agreement, or, to the best of the knowledge of such
counsel, any agreement to which the Partnership is a party or by which it is
bound;
(iv) To the best of the knowledge of such counsel, there is no
action, suit, litigation or proceeding before or by any court or governmental
agency, federal, state or local, pending or threatened against, or affecting or
involving the property or business of SBFM, or the business of the Partnership,
that would materially and adversely affect the condition (financial or
otherwise), business or prospects of SBFM or the Partnership; and
(v) The Registration Statement has become effective under the
Act, and, to the best of the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued nor has any
proceeding for the issuance of such an order been initiated or threatened.
5. Indemnification.
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
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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 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.
(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. Closing Date.
The Closing Date shall not be later than ten business days following
the termination of the Initial Offering Period to which reference is made in
Section 1(a)(i) above.
8. Miscellaneous.
(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.
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(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 Barney Global Diversified
Futures Fund L.P.
c/o Xxxxx Xxxxxx Futures Management Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to SSB to:
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to SBFM to:
Xxxxx Xxxxxx Futures Management Inc.
000 Xxxxxxxxx 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.
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(f) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
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 BARNEY GLOBAL
DIVERSIFIED FUTURES FUND L. P.
By: Xxxxx Xxxxxx
Futures Management Inc.,
(General Partner)
By:_______________________________________
XXXXX XXXXXX FUTURES MANAGEMENT INC.
By:_______________________________________
XXXXXXX XXXXX XXXXXX 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) below.
(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
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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 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.
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(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 this 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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