1
Exhibit 1.04
(Amended)
XXXXXXXX STRATEGIC ALLOCATION FUND, L.P.
CORRESPONDENT SELLING AGREEMENT
This Agreement made as of the _______ of ____________________, 1999 by
and among Xxxxxxxx Strategic Allocation Fund, L.P., a Delaware limited
partnership (the "Partnership"), Xxxxxxxx & Company, Inc., (the "General
Partner"), ____________________________________________________________, a
________________________________ corporation (the "Selling Agent"), and
PaineWebber Incorporated, (the "Commodity Broker" or "PaineWebber").
W I T N E S S E T H:
WHEREAS, the General Partner has caused the Partnership to be organized
under a limited partnership agreement dated as of May 11, 1993 and amended as of
August 1, 1997 (the "Limited Partnership Agreement") and a Certificate of
Limited Partnership filed May 11, 1993 to engage in speculative trading of
commodity futures contracts, options thereon, and possibly in the future other
commodity interests and to file a registration statement on Form S-1 with the
Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of
1933 (the "Securities Act") and the rules and regulations adopted by the SEC
thereunder, as amended to the date hereof (the "Rules"); the term "Final
Amendment" means the amendment to such registration statement which has been
submitted by the Partnership to the SEC to permit such registration statement to
become effective; the date on which the registration statement becomes effective
being hereinafter referred to as the "Effective Date"; the term "Registration
Statement" means such registration statement in the form in which it becomes
effective; the term "Prospectus" means the prospectus included in the
Registration Statement, substantially in the form, heretofore submitted to, and
not reasonably objected to by, the Selling Agent, or the General Partner; and
the term "preliminary prospectus" means any preliminary prospectus (as described
in Rule 433 under the Securities Act) included at any time in the registration
statement prior to its becoming effective with the SEC.
WHEREAS, the Commodity Broker is to be the commodity broker for the
Partnership pursuant to the terms of the Customer Agreement described in the
Prospectus; and
WHEREAS, the Partnership proposes to issue and sell to the public its
Limited Partnership Interest ("Units") as described in the Prospectus; and
WHEREAS, the Selling Agent desires to assist in the sale of the Units
upon the terms and in reliance upon the representations, warranties and
covenants set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. OFFERING OF UNITS
(a) Appointment
The Partnership hereby appoints the Selling Agent as one of its agents on
a non-exclusive basis to offer and sell the Units. The Selling Agent will
attempt to sell the Units on a best efforts basis at the price and in the manner
described in the Prospectus and in compliance with the terms and conditions set
forth therein and herein.
During the Continuing Offering Period, the Fund may continue to offer
Units at the month-end Net Asset Value per Unit as of the last business day of
the month during which the subscription is received by the General Partner. Such
Continuing Offering Period shall terminate at any time as determined by the
General Partner.
No selling commissions will be charged to the subscribers with respect to
the offer and sale of the Units.
The Partnership hereby authorizes the Selling Agent to distribute the
Prospectus and any amendments or supplements thereto in accordance with the
terms of this Agreement.
b) Compensation
In consideration of the Selling Agent soliciting and obtaining purchasers
of the Units, the General Partner shall pay the Selling Agent a selling
commission of 4% of the subscription amount of any subscriptions accepted by the
General Partner, subject to the possibility of a payment of additional selling
commissions as described below. The Selling Agent hereby directs the General
Partner to remit such payment to its clearing broker, PaineWebber, Inc.
PaineWebber, Inc. will in turn promptly pass on 3.5% to the Selling Agent, and
will retain the other 0.5% to cover various services that it provides to the
Selling Agent.
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In consideration of the provision by the Selling Agent of the additional
services specified below in this subsection (b) the General Partner will pay to
the Selling Agent (provided it represents that it is registered with the CFTC as
a futures commission merchant or introducing broker and is a member in good
standing of the NFA in such capacity) ongoing payment of 4% per annum of Net
Asset Value (determined as of the last day of the immediately preceding month)
of Units outstanding at the end of such month serviced by the Selling Agent.
Such ongoing compensation shall commence at the beginning of the thirteenth full
month after the sale of the Units. The Selling Agent hereby directs the General
Partner to remit such payment to its clearing broker, PaineWebber, Inc.
PaineWebber, Inc. will in turn promptly pass on 1/12 of 3% of Net Asset Value
per month to the Selling Agent, and will retain the other 1% per annum to cover
various services that it provides to the Selling Agent. The Selling Agent may
pay such compensation to its registered representatives who are registered as
associated persons with the CFTC and have passed the National Commodity Futures
Examination (Series 3) or the Futures Managed Funds Examination (Series 31). If
any such registered representative shall transfer employment to another CFTC/NFA
registered firm, and the limited partners to which he sold shall also become
clients of the transferee firm, the Selling Agent agrees to transfer its ongoing
compensation to the transferee firm.
The ongoing compensation specified above in this subsection (b) shall be
in consideration of and is contingent upon the provision by the Selling Agent or
its affiliate of additional services in connection with the Units sold by the
Selling Agent, including; (w) inquiring of the General Partner from time to
time, at the request of an owner of Units sold by it, as to the Net Asset Value
of a Unit; (x) inquiring of the General Partner from time to time, at the
request of an owner of Units sold by it, regarding the commodities markets and
the Partnership; (y) assisting, at the request of the General Partner, in the
redemption of Units sold by it; and (z) providing such other services to the
owners of Units sold by it as the General Partner may, from time to time,
reasonably request. The Selling Agent also will use its best efforts to insure
that any of its registered representatives to whom compensation is passed on
pursuant to this subsection (b) will cooperate in providing the services
specified in clauses (w) through (z) above for as long as such representative
continues in the employment of the Selling Agent. The Selling Agent shall
forfeit its rights hereunder to receive any ongoing compensation relating to the
additional services for the entirety of any month during which it is not duly
registered with the CFTC as a futures commission merchant or introducing broker
and a member in good standing of NFA.
Selling Agents and registered representatives who are not registered with
the CFTC as described above may receive additional selling commissions from
Xxxxxxxx & Company, paid on the same basis as the ongoing payments, provided
that the total of such additional selling commissions plus the initial selling
commission and per Unit organization and offering costs properly deemed to
constitute costs allocable to the Selling Agents, such as a selling brochure,
seminar costs and travel expenses do not exceed 10% of such Units' initial sale
price. Any such ongoing payments or additional selling commissions will be paid
by the General Partner and not by the Partnership, but may be deemed to
constitute underwriting compensation. If any such registered representative
shall transfer employment to another NASD registered firm, and the limited
partners to which he sold shall also become clients of the transferee firm, the
Selling Agent agrees to transfer its ongoing compensation to the transferee
firm.
2. UNDERTAKING OF SELLING AGENT
The Selling Agent will use its best efforts to find eligible persons to
purchase Units on the terms stated herein and in the Prospectus and any
amendments or supplements thereto. In connection with the offer and sale of the
Units, the Selling Agent represents, warrants and agrees that it will comply
fully with all applicable laws and the rules of the NASD, the SEC, the
securities or Blue Sky administrators of the several states and various other
jurisdictions and any other applicable regulatory body. It is understood that
the Selling Agent has no commitment with regard to the offer or sale of the
Units other than to use its best efforts as described above. The Selling Agent
will deliver a signed Subscription Agreement, properly completed and executed
and in the form of Exhibit D to the Prospectus (a "Subscription Agreement"), for
each subscriber to PaineWebber, with instructions for PaineWebber to debit the
subscriber's account and promptly deliver such funds to the escrow of funds
account (Mercantile-Safe Deposit & Trust Company -- Xxxxxxxx Strategic
Allocation Fund, L.P. Escrow Account No. 66127-09) (the "Escrow Account")
established by the Partnership with the Mercantile-Safe Deposit & Trust Company
(the "Escrow Agent") pursuant to an Escrow Agreement, dated as of January 12,
1994 (the "Escrow Agreement"). The Selling Agent will in no case collect funds
from the subscriber and transmit them directly to the Escrow Agent, but will in
all cases deliver instructions for PaineWebber to debit the subscriber's
brokerage account. PaineWebber will promptly deliver to the General Partner the
originally signed Subscription Agreement received by it from the Selling Agent,
concurrent with its transmission of funds to the Escrow Agent. Promptly after
receipt of a subscription and the funds therefor by the Escrow Agent and
delivery of a copy of the related Subscription Agreement to the General Partner,
an interim receipt will be mailed by the General Partner to each such subscriber
for the amount deposited in the Escrow Account on behalf of such subscriber.
3. BLUE SKY FILINGS
The Partnership agrees to prepare, execute, file and amend, as necessary,
all applications for registration of the Units and of itself as a dealer in
securities, consents to service of process, reports of sale of Units and similar
Blue Sky qualification, registration and exemption documents and to take such
other actions which may be necessary or advisable, in the opinion of the General
Partner or its counsel, in order to qualify the Units for offer and sale under
the securities or Blue Sky laws of such jurisdictions within the United States
of America as the General Partner may reasonably request; provided, that in no
event shall the Partnership be obligated to (I) take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Units, or taxes in any jurisdiction where it is not now
so subject or (ii) change any term in the Registration Statement, as the same
may be supplemented or amended.
The Selling Agent is responsible for compliance with all applicable laws,
rules and regulations with respect to its acting as such in connection with
sales of Units in any jurisdiction.
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Correspondent Selling Agreement
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4. CLOSING DATE
Subject to the General Partner's right to terminate the offering at any
time and subject to the conditions and requirements stated in the Prospectus and
herein, there shall be a closing on the last business day of each month during
the Continuing Offering Period (the "Closing Date"), with respect to
subscriptions received during each month of the Continuing Offering Period. Such
closing shall be held at the offices of the General Partner (or other location
as selected by the General Partner), and shall provide for (I) payment of the
aggregate purchase price for the Units to the Partnership by release of funds
from the Escrow Account, and (ii) compliance with Section 9 hereof.
5. REPORTS FOR SELLING AGENT
The Partnership agrees that so long as any of the Units are outstanding,
it will, at the Partnership's expense, deliver to the Selling Agent upon request
all financial statements and other periodic and special reports distributed
generally to the Limited Partners or required to be delivered to the Limited
Partners or filed with the SEC or the CFTC under the Limited Partnership
Agreement or any federal statute, rule or regulation relating to securities,
commodities or commodity futures.
6. AGREEMENTS OF THE PARTNERSHIP AND THE GENERAL PARTNER
The Partnership and the General Partner jointly and severally agree as
follows:
(a) Promptly to file the Final Amendment and the Prospectus with the
SEC, but not to file any amendment or supplement to the Registration Statement
or Prospectus, except such as counsel for the General Partner shall deem
advisable in order to assure compliance with applicable laws.
(b) To advise the Selling Agent (I) when the Registration Statement
has become effective, (ii) of the issuance by the SEC, CFTC or any other federal
or state regulatory body of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act, the CFTC registration or NFA
membership of the General Partner as a commodity pool operator or the
registration of Units under the Blue Sky or securities laws of any state or
other jurisdiction or any order or decree enjoining the offering or the use of
the then current Prospectus or of the institution, or notice of the intended
institution, of any action or proceeding for that purpose and (iii) the receipt
by the Partnership or any representative or attorney of the Partnership of any
other material communication from the SEC, CFTC, NFA or any Blue Sky or
securities law administrator relating to the Partnership, the Registration
Statement, any preliminary prospectus or the Prospectus, as it may be amended or
supplemented. The Partnership will make every reasonable effort to prevent the
issuance of any order suspending the effectiveness of the Registration Statement
under the Securities Act or the registration of Units under the laws of the
several states and various other jurisdictions or enjoining the offering and, if
any such order is issued, to obtain as soon as possible the withdrawal thereof;
provided, that in no event shall the Partnership be obligated to (I) take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Units, or taxes in any jurisdiction
where it is not now so subject or (ii) change any term in the Registration
Statement, as the same may be amended or supplemented.
(c) To deliver to the Selling Agent, without charge, as many conformed
copies of the registration statement as originally filed and of the Registration
Statement and each amendment or supplement thereto (including all exhibits filed
with, or incorporated by reference in, any such document) the Selling Agent may
reasonably request.
(d) During the Continuing Offering Period to deliver, without charge,
to the Selling Agent, at such office or offices within the United States of
America as the Selling Agent may reasonably designate, as many copies of the
Prospectus, as it may be amended or supplemented, as the Selling Agent may
reasonably request.
7. AMENDMENT OF THE REGISTRATION STATEMENT AND PROSPECTUS
The Partnership agrees, at its expense, to amend the Registration
Statement and Prospectus or to supplement the Prospectus if, at any time after
the Effective Date and prior to each Closing, (I) such amendment or supplement
is necessary to comply with the Securities Act, the Commodity Exchange Act (the
"Commodity Act"), the securities or Blue Sky laws of any jurisdiction or the
rules or regulations promulgated under such Acts or laws, is necessary to comply
with any NFA deficiency notices or is necessary to correct any material untrue
statement in the Prospectus or Registration Statement or to eliminate any
material omission therein or any omission therein which renders any of the
statements therein materially misleading, or (ii) the Selling Agent or the
Commodity Broker advises the Partnership that, in its opinion and that of its
counsel, such amendment or supplement is necessary to comply with such Acts or
laws or the rules or regulations promulgated thereunder, to comply with any such
deficiency notice or to correct any such material untrue statement or to
eliminate any such omission. The General Partner agrees to notify the
Partnership, the Selling Agent and the Commodity Broker and each of the Selling
Agent and the Commodity Broker agrees to notify the General Partner and the
Partnership, immediately (y) upon discovery of any untrue or misleading
statements or omissions in the Prospectus or Registration Statement concerning
such party and (z) of the occurrence of any event or change in circumstances
which would result in there being any untrue or misleading statement or omission
in the Prospectus or Registration Statement, in each case relating to the
General Partner, the Selling Agent, the Commodity Broker, respectively. The
representations, warranties and indemnifications of all parties hereto contained
herein relating to the Registration Statement and Prospectus shall attach to any
such amendment or supplement.
8. REPRESENTATIONS AND WARRANTIES
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Correspondent Selling Agreement
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(a) The General Partner, on behalf of the Partnership, represents and
warrants to the Selling Agent and the Commodity Broker that:
(I) The Partnership is duly organized and validly existing as a
limited partnership under the laws of the State of Delaware, and has full power
and authority under the Limited Partnership Agreement to conduct its business to
be conducted as described in the Registration Statement and Prospectus and to
issue, sell and deliver the Units.
(ii) The Units, when issued and sold pursuant to the terms hereof
and of the Registration Statement, Prospectus and Subscription Agreements, will
be validly issued, fully paid and not subject to further call or assessment.
(iii) The Customer Agreement dated as of January 12, 1994, between
the Partnership and the Commodity Broker (the "Brokerage Agreement") has been
duly and validly authorized, executed and delivered by the General Partner on
behalf of the Partnership. The Advisory Agreement, dated as of January 12, 1994
between The Partnership and Xxxxxxxx & Company, Inc., in its capacity as trading
advisor (the "Advisory Agreement"), the Escrow Agreement and this Agreement have
each been duly and validly authorized, executed and delivered by the General
Partner on behalf of the Partnership and each is, assuming that it has been duly
and validly authorized, executed and delivered by the other parties thereto
(other than the General Partner), a valid and binding agreement of the
Partnership, except insofar as bankruptcy, moratorium or other similar laws may
be applicable and except that the exculpation, indemnification and contribution
provisions of such agreements may be limited by applicable law and enforcement
of any specific terms or remedies may be unavailable.
(iv) The Partnership has all federal and state governmental and
regulatory approvals and licenses, and is maintaining on a current basis all
filings and registrations with federal and state governmental and regulatory
agencies, required to conduct its business to be conducted, all as described in
the Registration Statement and Prospectus.
(v) On the Effective Date and the date on which the Prospectus
is first filed with the SEC pursuant to Rule 424(b), the Registration Statement
and the Prospectus (or when any post-effective amendment to the Registration
Statement becomes effective or any supplement to the Prospectus is filed with
the SEC, the Registration Statement, as amended, and the Prospectus, as amended
or supplemented) will comply fully in all material respects with the
requirements of the Securities Act and the Rules and the Commodity Act and the
published rules of the CFTC thereunder, and will accurately describe the
proposed operation of the Partnership; and each of the Registration Statement,
as it may be amended, and the Prospectus, as it may be amended or supplemented,
will not include 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 (in the case of the Prospectus, as it may be amended or
supplemented, in the light of the circumstances under which such statements were
made); except that this representation and warranty does not apply to any
statement or omission in the Registration Statement, as it may be amended, or
the Prospectus, as it may be amended or supplemented, made in reliance upon
information furnished in writing to the Partnership by the Selling Agent or the
Commodity Broker expressly for use therein.
(b) The General Partner represents and warrants to the Partnership,
the Commodity Broker and the Selling Agent that:
(I) It is a corporation duly organized and validly existing in
good standing under the laws of the State of Maryland has full corporate power
to performs its obligations and enter into the transactions described in the
Registration Statement and Prospectus, as the same may be amended or
supplemented. All the present principals of the General Partner are identified
as such in the Registration Statement and Prospectus.
(ii) It has all federal and state governmental and regulatory,
and to the best of its knowledge, commodity exchange licenses and approvals, and
is maintaining on a current basis all filings and registrations with federal and
state governmental and regulatory agencies, required to act as described in the
Registration Statement and Prospectus (including, without limitation,
registration as a commodity pool operator under the Commodity Act and membership
as a commodity pool operator in NFA), and the performance of such actions will
not violate or result in a breach of any provision of the Articles of
Incorporation, by-laws or any agreement, instrument, order, law or regulation
binding upon it.
(iii) The Limited Partnership Agreement, the Advisory Agreement
and this Agreement have each been duly and validly authorized, executed and
delivered on behalf of the General Partner and each is, assuming that it has
been duly and validly authorized, executed and delivered by the other parties
thereto (other than the Partnership), a valid and binding agreement of the
General Partner except insofar as bankruptcy, moratorium or other similar laws
may be applicable, and except that the exculpation, indemnification and
contribution provisions of such agreements may be limited by applicable law and
enforcement of any specific terms or remedies may be unavailable.
(iv) All references to the General Partner and its principals in
the Registration Statement and the Prospectus are accurate and complete in all
material respects, set forth in all material respects the information required
to be disclosed to prospective investors under the Commodity Act and the rules
and regulations thereunder and, as to the General Partner and its principals,
the Registration Statement and Prospectus do not contain any misleading or
untrue statement of a material fact or omit to state a material fact which is
required to be stated therein or necessary to make the statements therein not
misleading (in the case of the Prospectus, in the light of the circumstances
under which such statements were made).
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Correspondent Selling Agreement
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(v) The balance sheet of the General Partner and the notes
thereto included in the Registration Statement present fairly the financial
position of the General Partner as of the date thereof, in conformity or (in the
case of any unaudited balance sheet) in substantial conformity with generally
accepted accounting principles. Since the date of the most recent such balance
sheet, there have been no changes in the financial condition of the General
Partner, other than changes which, in the aggregate, are not materially adverse
or which are disclosed in the Prospectus, and since such date there have been no
changes in the business of the General Partner which are material in the context
of the offering of the Units.
(c) The Commodity Broker represents and warrants to the Partnership,
the Selling Agent and the General Partner:
(I) The Commodity Broker is a corporation duly organized and
validly existing in good standing under the laws of its state of incorporation
and in good standing and qualified to do business in each jurisdiction in which
the nature or conduct of its business requires such qualifications and the
failure to be duly qualified would materially adversely affect the Commodity
Broker's ability to perform its obligations hereunder or under the Brokerage
Agreement. The Commodity Broker has full power and authority to perform its
obligations as described in the Registration Statement and Prospectus.
(ii) The Customer Agreement and this Agreement have each been
duly and validly authorized, executed and delivered by the Commodity Broker and
each is, assuming that it has been duly and validly authorized, executed and
delivered by the other parties thereto, a valid and binding agreement of the
Commodity Broker, except insofar as bankruptcy, moratorium or other similar laws
may be applicable and except that the exculpation, indemnification and
contribution provisions of such agreements may be limited by applicable law and
enforcement of any specific terms or remedies may be unavailable.
(iii) The Commodity Broker has all federal and state governmental
and regulatory and commodity exchange licenses and approvals, and is maintaining
on a current basis all filings and registrations with federal and state
governmental and regulatory agencies required, to perform its obligations under
the Customer Agreement and this Agreement and to act as described in the
Registration Statement and Prospectus (including, without limitation,
registration of the Commodity Broker as a futures commission merchant under the
Commodity Act and membership of the Commodity Broker as a futures commission
merchant in NFA), and the performance of the Commodity Broker's obligations
under the Customer Agreement and this Agreement and of such actions will not
violate or result in a breach of any provision of the Commodity Broker's
Certificate of Incorporation, By-laws or any agreement, instrument, order, law
or regulation binding upon the Commodity Broker.
(iv) All references to litigation involving the Commodity Broker
in the Registration Statement and Prospectus set forth in all material respects
the information required to be disclosed therein under the Commodity Act and the
rules and regulations thereunder.
(d) The Selling Agent represents and warrants to the Partnership, the
General Partner and the Commodity Broker:
(I) The Selling Agent is a corporation duly organized and
validly existing and in good standing under the laws of the state of its
incorporation, is a member in good standing of the NASD and has full power and
authority to act as selling agent in the manner contemplated by this Agreement
and as described in the Registration Statement and the Prospectus. The Selling
Agent is in good standing and qualified to do business in each jurisdiction in
which the nature or conduct of its business requires such qualification and the
failure to be duly qualified would materially adversely affect the Selling
Agent's ability to perform its obligations hereunder.
(ii) The Selling Agent is in good standing and in compliance with
all applicable broker-dealer registration requirements in the places where the
Units will be sold by the Selling Agent, and any use or distribution of the
Registration Statement, the Prospectus or any related preliminary prospectus by
the Selling Agent will comply with the terms and conditions set forth in the
Prospectus and with the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, all applicable securities laws of the states
in which the Selling Agent intends to sell Units, the rules and regulations
promulgated under all such Acts and all such laws, and all applicable rules and
regulations of the NASD and all other self-regulatory organizations.
(iii) In particular, and not by way of limitation, the Selling
Agent represents and warrants that it is aware of NASD Rule 2810 and that it
will comply fully with all the terms thereof in connection with the offer and
sale of the Units. The Selling Agent agrees not to recommend either the purchase
or redemption of Units to any subscriber unless the Selling Agent shall have
reasonable grounds to believe, on the basis of information obtained from the
subscriber concerning, among other things, the subscriber's investment
objectives, other investments, financial situation and needs, that the
subscriber is or will be in a financial position appropriate to enable the
subscriber to realize to a significant extent the benefits of the Partnership,
including tax benefits described in the Registration Statement and the
Prospectus; the subscriber has a fair market net worth sufficient to sustain the
risks inherent in participating in the Partnership, including loss of investment
and lack of liquidity; and the Units are otherwise a suitable investment for the
subscriber. The Selling Agent agrees to maintain files of information disclosing
the basis upon which the Selling Agent determined that the suitability
requirements of NASD Rule 2810 were met as to each subscriber (the basis for
determining suitability may include the Subscription Agreements and other
certificates submitted by subscribers). The Selling Agent shall fully comply
with NASD Rule 2810. The Selling Agent represents and warrants that it has
reasonable grounds to believe, based on information in the Registration
Statement and Prospectus, that all material facts relating to an investment in
the Units are adequately and accurately disclosed in the Registration Statement
and Prospectus. In connection with making the foregoing representations and
warranties, the Selling Agent further represents and warrants that it has, among
other things, examined the Registration Statement and Prospectus and obtained
such additional information from the General Partner regarding the information
set forth thereunder as the Selling Agent has deemed necessary or appropriate to
determine whether the Registration Statement and Prospectus adequately and
accurately disclose all material facts relating to an investment in the
Partnership and provide
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Correspondent Selling Agreement
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an adequate basis to subscribers for evaluating an investment in the Units. In
connection with making the representations and warranties set forth in this
paragraph, the Selling Agent has not relied on inquiries made by or on behalf of
any other parties.
The Selling Agent agrees to inform all prospective purchasers of Units of
all pertinent facts relating to the liquidity and marketability of the Units as
set forth in the Registration Statement and Prospectus.
(iv) The Selling Agent and its representatives have all required
federal and state governmental and regulatory approvals and licenses and have
effected all filings and registrations with federal and state governmental and
regulatory agencies required to conduct its business and to perform their
obligations under this Agreement and to act as described in the Registration
Statement and the Prospectus. The performance of the obligations of the Selling
Agent under this Agreement and its acting as described in the Registration
Statement and the Prospectus will not violate or result in a breach of any
provisions of its Articles of Incorporation or by-laws or any agreement,
instrument, order, law or regulation binding upon it.
(v) This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Selling Agent, and is a valid and
binding agreement of the Selling Agent and enforceable in accordance with its
terms.
9. CLOSING REQUIREMENTS
The issue and sale of the Units and the release of the funds from the
Escrow Account to the Partnership shall be subject to the accuracy on and as of
the Closing Date of, and compliance on each Closing Date with, the
representations and warranties of the General Partner, the Selling Agent and the
Commodity Broker herein and the performance by the Partnership, the General
Partner, the Selling Agent and the Commodity Broker of their obligations
hereunder.
The General Partner may terminate this Agreement at any time, in its
discretion. In the event of any such termination, all subscriptions received
from prospective limited partners of the Partnership shall promptly be returned
to them as provided in Section 2 hereof.
10. INDEMNIFICATION
(a) The General Partner agrees to indemnify and hold harmless the
Selling Agent, the Commodity Broker and each person, if any, who controls such
persons within the meaning of Section 15 of the Securities Act against any and
all losses, claims, damages, costs, expenses, liabilities, joint or several
(including any investigatory, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), and actions to which they, or any of them, may become
subject under the Securities Act, the Securities Exchange Act of 1934, the
Commodity Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages, costs, expenses,
liabilities or actions arise out of or are based upon any untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment of supplement thereto, or the
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading (in the case of the
Prospectus, of any amendment or supplement thereto, in the light of the
circumstances under which such statements were made); PROVIDED, however, that in
no event shall the indemnification agreement contained in this subsection (a) of
Section 10 inure to the benefit of any of the indemnified parties (or any person
controlling any such party within the meaning of Section 15 of the Securities
Act) on account of any losses, claims, damages, costs, expenses and liabilities
arising from the sale of the Units to any person if such losses, claims,
damages, costs, expenses, liabilities or actions arise out of or are based upon,
an untrue statement or omission in a preliminary prospectus or the Prospectus or
a supplement or amendment thereto, if a preliminary prospectus, the Prospectus,
the Prospectus as amended or supplemented or as further amended or supplemented,
respectively, shall correct, prior to the delivery to such person of his
subscription, the untrue statement or omission which is the basis of the loss,
claim, damage, liability or action for which indemnification is sought and a
copy of a preliminary prospectus, the Prospectus or the Prospectus as amended or
supplemented or as further amended or supplemented, as the case may be, had not
been sent or given to such indemnified person at or prior to the receipt of the
subscription; provided further, that in no event shall any party claim
indemnification under this subsection (a) for amounts paid pursuant to
subsection (b).
(b) Each of the Selling Agent and the Commodity Broker agrees to
indemnify and hold harmless the Partnership, the General Partner and the
Commodity Broker or the Selling Agent, as the case may be, and each person, if
any, who controls the Partnership, the General Partner and the Commodity Broker
or the Selling Agent, as the case may be, within the meaning of Section 15 of
the Securities Act to the same extent as the foregoing indemnity from the
General Partner set forth in subsection (a) of this Section 10 (and, in the case
of the General Partner, for any indemnity paid by the General Partner pursuant
to subsection (a) of this Section 10), but only insofar as such losses, claims,
damages, costs, expenses, liabilities or actions arise out of or are based upon
any untrue statement or omission which was made in any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto, in reliance upon and in conformity with information furnished in
writing by the Selling Agent or the Commodity Broker, respectively, expressly
for use therein. The Commodity Broker's obligations (but not the Selling Agent's
obligations) of indemnification hereunder shall be limited in the same manner as
the General Partner's obligations of indemnification in the case of untrue
statements or omissions which are corrected by a preliminary prospectus, the
Prospectus or the Prospectus as amended or supplemented or as further amended or
supplemented.
(c) Each of the parties to this Agreement understands that the
obligations of each party subject to this Section 10 are separate and distinct;
PROVIDED, HOWEVER, that the General Partner (not the Partnership) agrees to
indemnify and hold harmless the Selling Agent and each person, if any, who
controls the Selling Agent within the meaning of Section 15 of the Securities
Act of 1933, as amended, against any loss, claim, damage, charge, or liability
(including any civil liability under the Securities Act of 1933, as amended, or
any state securities law) to
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which such persons may become subject (including reasonable attorneys' and
accountants' fees, incurred in defense thereof), insofar as such loss, claim,
damage, charge, or liability (or actions in respect thereof) (I) arise out of or
are related to or are based upon any untrue statement of any material fact
relating to or supplied by the General Partner which is contained in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto), or (ii) arise out of or are based upon the omission to state therein a
material fact relating or supplied by the General Partner required to be stated
therein or necessary to make the statements therein not misleading; PROVIDED
FURTHER, however, that the General Partner shall have no obligation to indemnify
and hold harmless such persons against any loss, claim, damage, charge, or
liability to which such persons may become subject (including reasonable
attorneys' and accountants' fees incurred in defense thereof), insofar as such
loss, claim, damage, charge or liability (or actions in respect thereof) arise
out of or are based upon any untrue statement of, or the omission of, any
information or material facts in the Registration Statement or the Prospectus
relating to or concerning the Selling Agent. Notwithstanding, any other
provision of this Section 10, the General Partner shall have no obligation to
indemnify the Selling Agent for more than the amount of proceeds resulting from
the sale of Units by the Selling Agent during the Continuing Offering Period
plus the Selling Agent's actual expenses incurred in connection with any loss,
claim, damage, charge or liability (including reasonable attorneys' and
accountants' fees incurred in defense thereof).
(d) Notwithstanding any other provision of this Agreement,
indemnification of the General Partner or its controlling persons by the
Partnership shall be permitted only to the extent permitted by the Agreement of
Limited Partnership, as amended.
(e) Any party which proposes to assert the right to be indemnified
under this Section 10 will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a claim is
to be made against an indemnified party under this Section 10 notify each such
indemnifying party of the commencement of such action, suit or proceeding shall
relieve it from any liability which it may have to any indemnified party under
this Section 10 to the extent, and only to the extent, that such omission was
prejudicial to the indemnifying party. In no event shall any such omission
relieve an indemnifying party of any liability which it may have to an
indemnified party otherwise than under this Section 10. In case any such action,
suit or proceeding shall be brought against any indemnified party, and such
party shall notify the indemnifying party of the commencement thereof; the
indemnifying party shall be entitled to participate therein, and, if it shall
wish, individually or jointly with any other indemnifying party, to assume (or
have such other party assume) the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election (or the election of such other
party) so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, other than
reasonable costs of investigation requested by the indemnifying party (or such
other party), subsequently incurred by such indemnified party in connection with
the defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (I) the employment by counsel by
such indemnified party has been authorized by the indemnifying party (or such
other indemnifying party as may have assumed the defense of the action in
question), (ii) the indemnified party shall have reasonably concluded that there
may be a conflict of interest between the indemnifying party (or such other
party) and the indemnified party in the conduct of the defense of such action
(in which case the indemnifying party (or such other party) shall not have the
right to direct the defense of such action on behalf of the indemnified party)
or (iii) the indemnifying party shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying party (subject to
possible reimbursement of the indemnifying party by such other party). An
indemnifying party shall not be liable for any settlement of any action or claim
effected without its consent. In the case of (ii) above, the indemnifying party
(or the indemnifying parties, if an indemnified party shall have a claim for
indemnification against more than one indemnifying party) shall not be liable
for the expenses of more than one separate counsel for each of the following
groups: (x) the Selling Agent and any person who controls the Selling Agent
within the meaning of Section 15 of the Securities Act; (y) the Partnership and
the General Partner and any person who controls the Partnership and General
Partner within the meaning of Section 15 of the Securities Act; and (z) the
Commodity Broker and any person who controls the Commodity Broker within the
meaning of Section 15 of the Securities Act.
(f) The exculpation provisions of the Advisory Agreement or the
Agreement of Limited Partnership shall not relieve the General Partner or its
principals from any liability they may have or incur to the Partnership under
this Agreement.
11. FEES AND EXPENSES
Subject to reimbursement or partial reimbursement on an installment
basis by the Partnership, as set forth in the Prospectus, the General Partner
will pay all costs and expenses relating to (I) the preparation, printing and
filing with the SEC, CFTC and NFA of the Registration Statement and (in certain
cases) exhibits thereto, each preliminary prospectus, the Prospectus and all
amendments and supplements to the Registration Statement and the Prospectus,
(ii) the registration or qualification of the Units for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in Section
3 hereof, including the fees and disbursements of legal counsel in connection
therewith and in connection with the preparation and printing of preliminary or
supplementary Blue Sky Surveys, (iii) the furnishing to the Selling Agents of
copies of each preliminary prospectus, the Prospectus, the Registration
Statement and all amendments or supplements thereto, and of such other documents
required to be furnished to the Selling Agents, including costs of shipping and
mailing, (iv) the filing requirements of the NASD in connection with its review
of the terms and arrangements of the proposed financing, (v) the fees and
disbursements of the Escrow Agent, (vi) all fees and disbursements of Xxxxxx X.
Xxxx, Xx. & Associates in connection with the financial statements and the
performance records contained in the Prospectus and the preparation and delivery
of any other documents to be prepared and delivered in connection with the
transactions contemplated hereby, (vii) the fees and disbursements of legal
counsel in connection with the organization of the Partnership with the offering
of the Units, and (viii) all other organization and offering expenses relating
to the Partnership, including any expenses incurred in any "roadshow" relating
to the offering of the Units and the Selling Agents' reasonable "due diligence"
expenses, within the guidelines established by NASD Rule 2810. Each other party
shall bear all of its expenses under this Agreement, including fees and
disbursements of its counsel.
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12. SURVIVAL OF COVENANTS; CAPTIONS; SUCCESSORS AND ASSIGNS
The indemnification agreements contained in Section 10 hereof, the
obligation to settle accounts hereunder and the agreements, representations and
warranties herein shall survive (a) the issue and payment for the Units
hereunder and (b) any investigation made by any party hereto or by a controlling
person of any party hereto, as "controlling person" is defined in Section 15 of
the Securities Act.
All captions used herein are for convenience of reference only, are not
a portion of this Agreement and are not to be used in construing or interpreting
any aspect of this Agreement.
This Agreement has been and is made solely for the benefit of the
Selling Agent, the Partnership, the General Partner and the Commodity Broker and
their respective successors and assigns, and, to the extent expressed herein,
for the benefit of persons controlling any of the Selling Agent, the
Partnership, the General Partner and the Commodity Broker and their respective
successors and assigns within the meaning of Section 15 of the Securities Act,
and no other person, partnership, association or corporation shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Units merely because of such
purchase.
13. NOTICES
Any notices under this Agreement shall be in writing (including
telegraphic communication) or by telephone, confirmed in writing, all such
writings to be sent by first class mail, postage prepaid, addressed to the
recipient party at the address previously furnished in writing by such party to
each of the other parties hereto. Copies of all notices shall be sent to Sidley
& Austin, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attn: Xxxxxxx
Xxxxxxxxxxxxx.
14. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original agreement, but all of which together shall
constitute one and the same instrument.
15. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein.
16. GOVERNING LAW
This Agreement shall be deemed to be made under and construed in
accordance with the law of the State of Delaware, without regard to principles
of conflicts of laws.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first above written.
XXXXXXXX STRATEGIC ALLOCATION FUND, L.P.
By: XXXXXXXX & COMPANY, INC.
ITS GENERAL PARTNER
By:
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XXXXXXXX & COMPANY, INC.
By:
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PAINEWEBBER, INCORPORATED
By:
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SELLING AGENT
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By:
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(Sign Name)
By:
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(Print Name)
SELLING AGENT'S LEGAL NAME AND ADDRESS
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ATTN.:
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TAX I.D. NO.:
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PHONE:
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FAX:
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