Exhibit 1.1
FUTURES PORTFOLIO FUND
LIMITED PARTNERSHIP
SELLING AGREEMENT
This SELLING AGREEMENT is entered into as of ___________________ by and
among Xxxxxx & Company, Inc., a Maryland corporation (the "General Partner"),
Futures Portfolio Fund, Limited Partnership, a Maryland limited partnership
(the "Partnership"), and ________________________________ (the "Selling
Agent"), a(n) _________________ corporation, whose main business address is
___________________________________.
RECITALS
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1. The Partnership is a limited partnership formed to engage in the
speculative trading of commodity futures contracts, other commodity interests,
forward contracts, options, swaps and securities as described in the Private
Offering Memorandum of the Partnership, dated February 24, 2004. (the
"Memorandum").
2. The Partnership is currently offering and selling (the "Offering") an
unlimited amount of two classes of units of limited partnership interest in
the Partnership (the "Units"), as described in the Memorandum. The Partnership
proposes to offer and sell the Units upon the terms and conditions in this
Agreement and in the Memorandum with the assistance of the Selling Agent. The
Selling Agent hereby agrees to assist in the sale of the Units on a best
efforts basis.
NOW THEREFORE, the parties agree as follows:
1. Appointment of Selling Agent
The Selling Agent is hereby appointed, and hereby accepts such
appointment, as an agent of the Partnership and the General Partner during the
Offering Period (as defined in ss.2 below) for the purpose of finding suitable
and qualified subscribers for the Units. The Units are more fully described in
and are being sold pursuant to the terms and conditions of the Memorandum.
2. The Offering Period
The "Offering Period" shall mean the period from the date hereof to the
date the Offering is terminated by the General Partner. Purchasers of Units
shall be admitted as Limited Partners as of the close of the last business day
of the month in which the General Partner receives and accepts their
subscriptions.
3. Compensation to Selling Agent
As sales compensation, the General Partner shall pay the Selling Agent,
on a monthly basis, 0.1667% of the month-end Net Assets (as defined below) of
the Class A Units sold by the Selling Agent which remain outstanding (2% per
year). The General Partner also shall pay the Selling Agent, on a monthly
basis, 0.01667% of the month-end Net Assets (as defined below) of the Class B
Units sold by the Selling Agent which remain outstanding (0.2% per year). For
other classes of Units, the General Partner shall pay the Selling Agent such
amounts as are agreed to in advance in writing by the parties. The General
Partner shall determine in its reasonable discretion whether the Selling
Agent's efforts resulted in the investment into the Partnership being made and
therefore whether any compensation will be payable to the Selling Agent in
accordance with the terms hereof and will take into account, among other
things, whether the Subscription Agreement signed by the investor names the
Selling Agent. The Partnership is not obligated to accept the subscription of
any investors and may reject any investors in its sole and absolute
discretion. Nothing contained herein shall limit or waive the right of the
Partnership to require withdrawal or redemption, in whole or in part, of an
investor in the Partnership.
To avoid any potential violations of ERISA or other regulations no
compensation will be paid for Class B units sold that are ERISA accounts,
including pension plans, 401K's, IRA's of any type or any other qualified
retirement plans.
"Net Assets" are the Partnership's assets minus its liabilities
(determined in accordance with U.S. generally accepted accounting principles,
or in accordance with the General Partner's reasonable judgment where such
principles do not apply) including any unrealized profits and losses on the
Partnership's open positions. If and to the extent Units sold by
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the Selling Agent are redeemed or transferred by their original owners, the
Selling Agent, beginning in the month in which such redemption or transfer
occurs, shall no longer have any right to any compensation with respect
thereto. The compensation to the Selling Agent hereunder shall be paid within
21 days after the General Partner receives these fees from the Partnership.
If the registered representative of the Selling Agent who is responsible
for the sale of the Units shall transfer his registration to another NASD
registered firm, and if the investors to which he sold Units shall also become
clients of the transferee firm, and if the transferee firm has or enters into
a selling agreement with the Partnership, the Selling Agent agrees that the
ongoing sales commissions described herein shall transfer to the transferee
firm as reasonably determined by the General Partner.
The Selling Agent shall not be considered to be a partner of the
Partnership or the General Partner by virtue of this Agreement or its receipt
of any of the above-described compensation nor shall the Selling Agent
fractionalize or pass on any portion of such compensation. The Selling Agent
shall not be entitled to any compensation in any case in which it is
determined by the Partnership or the General Partner that the Selling Agent's
activities were conducted in violation of, or that the receipt of such
compensation would be in violation of, Federal or state securities or
commodities laws, or the rules of any self-regulatory body such as the
National Futures Association or the National Association of Securities
Dealers.
4. Representations and Warranties of the Partnership and the General Partner
The Partnership and the General Partner represent and warrant to the
Selling Agent that:
(a) The Memorandum does not contain any misleading or untrue statement of
a material fact or omit to state a material fact which is necessary to prevent
the statements made therein from being misleading.
(b) The Partnership is duly organized and validly existing as a limited
partnership under the Revised Uniform Limited Partnership Act of the State of
Maryland, and has the requisite power and authority to conduct its business as
described in the Memorandum.
(c) The Units, when issued and sold pursuant to the terms hereof and of
the Memorandum, will be validly issued, fully paid and not subject to
additional capital calls by the limited partners of the Partnership.
(d) The Partnership has obtained all required governmental and regulatory
approvals and licenses required to conduct the Partnership's business and to
offer and sell the Units as described in the Memorandum.
(e) This Agreement has been validly executed and delivered by the
Partnership and the General Partner and is the legal, valid and binding
agreement of each except as rights to indemnity and contribution hereunder may
be limited by Federal or state securities laws, and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally and except that the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefore may be brought.
5. Agreements of the Partnership
The Partnership covenants and agrees with the Selling Agent as follows:
(a) Copies of Memorandum to the Selling Agent. The Partnership shall
deliver reasonable quantities of the Memorandum to the Selling Agent and any
supplements thereto. The Partnership consents to the use of the Memorandum or
any supplement thereto by the Selling Agent both in connection with the
Offering or sale of the Units and for such period of time thereafter as the
Memorandum is required by law to be delivered in connection therewith.
(b) Notice of Supplement. The Partnership shall give the Selling Agent
prompt notice of the preparation of any supplement to the Memorandum.
(c) Blue Sky Law. The Partnership shall obtain the necessary exemption
for the Units for offer and sale under the securities or Blue Sky laws in such
jurisdictions as it decides to offer or sell the Units. The General Partner or
the Partnership shall pay all fees and expenses (including attorneys' fees and
expenses) relating to effecting exemptions for the Units under such securities
or Blue Sky laws.
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(d) Initial Offering Expenses. The General Partner or the Partnership
will pay or cause to be paid all expenses in connection with (i) the
preparation, printing and filing of the Memorandum, and the preparation of the
Blue Sky survey, if any, and (ii) furnishing such copies of the Memorandum and
all supplements thereto as may be reasonably requested for use in connection
with the Offering by the Selling Agent.
6. Representations and Warranties of the Selling Agent
The Selling Agent represents and warrants to the Partnership and the
General Partner that:
(a) The Selling Agent is a corporation duly organized and validly
existing under the laws of the state of its incorporation and in each other
jurisdiction in which the nature or conduct of its business requires such
qualification, is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") and has full power and authority to act
in the manner contemplated by this Agreement and as described in the
Memorandum.
(b) The Selling Agent is in good standing and in compliance with all
applicable broker-dealer registration requirements in all jurisdictions where
the Units shall be offered or sold by the Selling Agent.
(c) The Selling Agent and its representatives have obtained all required
governmental and regulatory approvals and licenses to perform their
obligations under this Agreement and to act as described in the Memorandum.
(d) The performance of the obligations of the Selling Agent under this
Agreement and its acting as described in the Memorandum will not violate or
result in a breach of any provisions of its Articles of Incorporation or
bylaws or any agreement, order, law or regulation binding upon it.
(e) This Agreement has been duly authorized, validly executed and
delivered on behalf of the Selling Agent and is the valid and binding
agreement of the Selling Agent enforceable in accordance with its terms except
as rights to indemnity and contribution hereunder may be limited by Federal or
state securities laws, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and except that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought.
(f) The Selling Agent will not, directly or indirectly, pay or award any
finder's fees, commissions or other compensation to any person engaged by a
potential investor for investment advice as an inducement to such adviser to
advise or recommend the purchase of Units; provided, however, the normal sales
commissions payable to a properly registered representative of the Selling
Agent for selling Units shall not be prohibited hereby.
(g) The foregoing and following representations, warranties, agreements
and covenants of the Selling Agent shall be continuing during the term of this
Agreement, and if at any time any event shall occur which could make any of
the foregoing incomplete or inaccurate, the Selling Agent shall promptly
notify the Partnership and the General Partner of the occurrence of such
event.
7. Agreements of the Selling Agent
The Selling Agent covenants and agrees with the Partnership and General
Partner as follows:
(a) The Selling Agent shall not offer or sell the Units by any form of
"general solicitation or general advertising," including: (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(b) Any use or distribution of the Memorandum by the Selling Agent will
comply with the terms of the Memorandum, with the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the Commodity Exchange Act, as amended (the "CEA"), all
applicable securities laws of the states (the "Blue Sky laws") in which the
Selling Agent shall offer or sell the Units, and the rules promulgated under
the Blue Sky laws and all such laws, and all applicable rules of the CFTC,
SEC, NASD and other governmental and/or self-regulatory organizations.
(c) The Selling Agent shall not give any information or make any
representations in connection with the
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Offering of Units other than those in the Memorandum. The Selling Agent will
make offers to sell Units to, or solicit offers to subscribe for any Units
from, only those persons who meet the suitability and qualification
requirements set forth in the Memorandum and only from persons in those states
where the Partnership has qualified the Offering or under circumstances where
the Offering is exempt from registration in such states.
(d) The Selling Agent shall use its best efforts to ensure that each
subscription agreement obtained by it from a subscriber contains complete and
accurate information.
(e) All checks, drafts, wire transfers or other means of payment for
Units received by the Selling Agent from subscribers shall be made payable to:
"Futures Portfolio Fund, L.P." The Selling Agent shall promptly upon receipt
deliver to the General Partner all proceeds from the subscriptions and all
completed and properly executed subscription documents relating thereto.
(f) The Selling Agent shall make every reasonable effort to determine
that the purchase of Units is a suitable and appropriate investment for each
person/entity to whom the Selling Agent introduces Units, based upon
information provided by such person/entity.
8. Indemnification
8.1 The Partnership's Agreement to Indemnify. The Partnership will
indemnify and hold the Selling Agent harmless against any and all loss,
liability, claim, damage and expense whatsoever (including attorneys' and
accountants' fees and including the costs of investigating any event) arising
out of or based upon a material breach by the Partnership of any warranty,
representation, covenant or agreement in this Agreement.
8.2 The Selling Agent's Agreement to Indemnify. The Selling Agent will
indemnify and hold the Partnership and the General Partner harmless against
any and all loss, liability, claim, damage and expense whatsoever (including
attorneys' and accountants' fees and including the costs of investigating any
event) arising out of or based upon a material breach by the Selling Agent of
any warranty, representation, covenant or agreement in this Agreement.
8.3 Indemnity Procedure.
(a) Promptly after receipt by an indemnified party under Section 8.1 or
8.2 of notice of the commencement of an action or claim to which either such
Section may apply, the indemnified party shall notify the indemnifying party
in writing of the commencement of such action or claim. The failure so to
notify the indemnifying party shall not relieve the indemnifying party of any
liability that the indemnifying party may have to the indemnified party under
either such Section, except to the extent such failure shall have materially
prejudiced the indemnifying party.
(b) In case any such action or claim shall be brought against an
indemnified party and the indemnified party shall notify the indemnifying
party of the commencement of such action or claim, the indemnifying party
shall be entitled to participate in such action or claim and, to the extent
that the indemnifying party may desire, to assume the defense of such action
or claim at its own expense with counsel selected by the indemnifying party
and approved by the indemnified party. After notice from the indemnifying
party to the indemnified party of the indemnifying party's election so to
assume the defense of such action or claim, the indemnifying party shall not
be liable to the indemnified party under either such Section for any legal,
accounting, and other expenses subsequently incurred by the indemnified party
in connection with the defense of such action or claim other than reasonable
costs of investigation.
(c) Notwithstanding any provision of this Section 8.3 to the contrary, if
in any action or claim as to which indemnity is or may be available an
indemnified party shall reasonably determine that its interests are or may be
adverse, in whole or in part, to the interests of the indemnifying party or
that there may be legal defenses available to the indemnified party that are
or may be different from, in addition to, or inconsistent with the defenses
available to the indemnifying party, the indemnified party may retain its own
counsel in connection with such action or claim and shall be indemnified by
the indemnifying party for any legal, accounting and other expenses reasonably
incurred by or on behalf of it in connection with investigating or defending
such action or claim.
8.4 Settlement. Neither party may consent to entry of any judgment or
enter into any settlement that imposes any obligation (including the payment
of money) nor liability on the other party unless the other party consents
thereto in writing or such judgment or settlement includes an unqualified
release for the other party.
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8.5 Securities Law Violations. Notwithstanding Sections 8.1 and 8.2
above, no party hereunder will be indemnified for violations of federal or
state securities laws, or any other intentional or criminal wrongdoing.
Each of the parties to this Agreement understands that the obligations of
each party pursuant to this ss.8 are separate and distinct.
The indemnities set forth in this ss.8 shall survive the termination of
this Agreement and are in addition to any other obligations or liabilities the
parties hereto may have
9. Customer Privacy
(a) Customer Information. "Customer Information" means any information
contained on a customer's application or other form and all nonpublic personal
information about a customer that a party receives from the other party.
"Customer Information" includes, by way of example and not limitation, name,
address, telephone number, social security number, health information and
personal financial information (which may include consumer account number).
(b) Usage. The parties understand and acknowledge that they may be
financial institutions subject to applicable federal and state customer and
consumer privacy laws and regulations, including Title V of the
Xxxxx-Xxxxx-Xxxxxx Act (15 U.S.C. 6801, et seq.) and regulations promulgated
thereunder (collectively, the "Privacy Laws"), and any Customer Information
that one party receives from the other party is received with limitations on
its use and disclosure. The parties agree that they are prohibited from using
the Customer Information received from the other party other than:
1) as required by law, regulation or rule, or
2) to carry out the purposes for which one party discloses
Customer Information to the other party under the Selling
Agreement(s), including use under an exception permitted by
Privacy Laws in the ordinary course of business to carry out
the purposes of such Agreement(s).
(c) Nondisclosure. Subject to the provisions of Usage above, the parties
will not disclose the Customer Information to any other person without prior
written permission from the other party.
(d) Safeguarding Customer Information. The parties shall establish and
maintain safeguards against the unauthorized access, destruction, loss, or
alteration of Customer Information in their control which are no less rigorous
than those maintained by a party for its own information of a similar nature.
In the event of any improper disclosure of any Customer Information, the party
responsible for the disclosure will immediately notify the other party.
(e) Survivability. The provisions of this Confidentiality Amendment shall
survive the termination of the Selling Agreement(s).
10. Termination
The agency of the Selling Agent hereunder is terminable by the General
Partner at any time upon at least 10 days written notice to the Selling Agent.
Upon such termination (except for cause as defined below), the General Partner
shall have the continuing obligation to the Selling Agent for the compensation
set forth in ss.3 hereof, but only with respect to Units sold before the date
of such termination. The Selling Agent may terminate this Agreement upon 10
days' written notice to the General Partner.
If termination is for cause, however, the General Partner shall have no
continuing obligations to the Selling Agent. "Cause" shall mean:
(a) the continued failure by the Selling Agent to substantially perform
the duties set forth in ss.7 above after receipt of prior written notice by
the General Partner to the Selling Agent, and the Selling Agent's failure to
cure or take such action as will reasonably cure the failure of the Selling
Agent to so perform;
(b) the material breach by the Selling Agent of any representation or
warranty made, or agreement to be performed, by it pursuant to this Agreement;
(c) a material violation or breach of, or material failure to comply
with, a material rule of any national
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securities association, national futures association, national securities
exchange or board of trade of which the Selling Agent is, or is required to
be, a member;
(d) any material violation of any federal or state securities or federal
commodities law or regulation;
(e) the denial, revocation or other failure to obtain and maintain any
license, consent or authorization necessary for the Selling Agent to conduct
its business as presently conducted or to duly perform its obligations under
this Agreement; or
(f) the engagement by the Selling Agent in conduct which is demonstrably
and materially injurious to the Partnership or the General Partner.
The respective indemnities, representations and warranties set forth in
this Agreement shall survive any termination of this Agreement.
11. Prevention of Money Laundering
11.1 The Selling Agent shall use due diligence to learn the essential
facts relative to every person or entity (and the beneficial owners thereof)
for whom or which orders for the purchase of Units are effected and shall
follow procedures that are at least equivalent to those then-required by the
USA Patriot Act and regulations adopted thereunder (and their successor laws,
rules and regulations) on prevention of the use of the financial system for
the purposes of money laundering. In the event that the General Partner
requires information or is required by any competent authority to provide
information as to the identity of investors or in the event that any form of
money laundering is suspected, the Selling Agent agrees to make a full
disclosure of such information to the General Partner, its representatives and
all appropriate authorities. Where the Selling Agent is a resident in a
country other than the United States which is a member of the Financial Action
Task Force, such disclosure shall be made to the extent provided by local law.
The Selling Agent will retain the evidence of verification of identity and
records of all transactions for at least five years following the ending of
the relationship with any person for whom or which orders for the subscription
of Units have been effected.
11.2 The General Partner reserves the right to seek and the Selling Agent
agrees to supply to the General Partner or any designated representative of
the General Partner, without undue delay, such documentation as it may request
in order to satisfy itself as to the essential facts relative to the Selling
Agent and any suspected or potential money laundering. If the Selling Agent
fails to supply such documentation as requested by the General Partner and/or
the designated representative of the General Partner within a reasonable
period of time, this Agreement may be terminated for Cause at the sole
discretion of the General Partner immediately in writing.
11.3 The Selling Agent warrants and agrees to indemnify and hold harmless
the Partnership and the General Partner from all liabilities, losses, damages,
claims and expenses, including attorney's and other legal fees, in connection
with the foregoing.
12. Miscellaneous
(a) Complete Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the matters referred to herein, and no
other agreement, verbal or otherwise, shall be binding as between the parties
unless it is in writing and signed by the party against whom enforcement is
sought.
(b) Assignment. The General Partner may, in its sole discretion, assign
this Agreement to an affiliated corporation. This Agreement may not otherwise
be assigned by either party without the prior written consent of the other
party. This Agreement shall inure to the benefit of the parties hereto and
their respective successors and assigns.
(c) Amendment; Waiver. This Agreement may not be amended except by the
written consent of the parties. No waiver of any provision of this Agreement
may be implied from any course of dealing between the parties or from any
failure by a party to assert its rights under this Agreement on any occasion
or series of occasions.
(d) Severability. If any provision of this Agreement, or the application
of any provision to any person or circumstance, shall be held to be
inconsistent with any law, ruling, rule or regulation, the remainder of this
Agreement, or the application of the provision to persons or circumstances
other than those as to which it is held inconsistent, shall not be affected
thereby.
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(e) Notices. All notices required or desired to be delivered under this
Agreement shall be in writing and shall be effective when delivered personally
on the day delivered, or, when given by registered or certified mail, postage
prepaid, return receipt requested, on the day of receipt, addressed as follows
(or to such other address as the party entitled to notice shall designate):
If to the Partnership Xxxxxx & Company, Inc.
and the General Partner: 0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President
If to the Selling Agent: At the address set forth below.
(f) Survival. The provisions of this Agreement shall survive the
termination of this Agreement with respect to any matter arising while this
Agreement was in effect.
(g) Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New York without giving
effect to its conflicts of law principles.
(h) Arbitration. The parties waive their right to seek remedies in court,
including and right to jury trial. Any dispute arising out of, or relating to,
this Agreement or the breach thereof (other than Section 5(g) hereof), or
regarding the interpretation thereof, shall be resolved exclusively by
arbitration conducted in county, city and state of New York in accordance with
the rules of the NASD applying the laws of New York. Disputes shall not be
resolved in any other forum or venue. The parties agree that (i) discovery
shall not be permitted except as required by the rules of the NASD, (ii) the
arbitrator(s) shall be knowledgeable in industry standards and practices and
the matters giving rise to the dispute; (iii) the arbitrator(s) shall not have
the power and authority to award punitive damages; (iv) the authority of the
arbitrators(s) shall be limited to construing and enforcing the terms and
conditions of this Agreement as expressly set forth herein; and (v) the
arbitrator(s), if allowed by the rules, shall state the reasons for their
award and their legal and factual conclusions underlying the award in a
written opinion. The award of the arbitrator(s), or a majority of them, shall
be final, and judgment upon the award may be confirmed and entered in any
court, state or federal, having jurisdiction.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one original Agreement.
(i) Headings. Headings to sections and subsections in this Agreement are
for the convenience of the parties and are not a part of or affect the meaning
of this Agreement.
(j) Complaints - Each party agrees to notify the other party(ies) in the
event that it receives a customer complaint in connection with sales pursuant
to this agreement. Each party agrees that it will cooperate with the other
parties in resolving such complaint. Each party also agrees to cooperate in
any regulatory examination of a party to the extent it involves this
Agreement.
IN WITNESS WHEREOF this Selling Agreement has been executed for and on behalf
of the undersigned as of the date first above written.
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FUTURES PORTFOLIO FUND
LIMITED PARTNERSHIP Selling Agent: ______________
By: Xxxxxx & Company, Inc. _____________________________
Its General Partner By
_____________________________
___________________________________ Print Name
By: Xxxxxxx X. Xxxxxx, President _____________________________
Title
XXXXXX & COMPANY, INC. _____________________________
___________________________________ _____________________________
By: Xxxxxxx X. Xxxxxx, President Address
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