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EXHIBIT 1.04
(Amended)
XXXXXXXX STRATEGIC ALLOCATION FUND, L.P.
CORRESPONDENT SELLING AGREEMENT
This Agreement made as of the _______ of ____________________, _______ 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.
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
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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.
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
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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
(a) The General Partner, on behalf of the Partnership, represents and
warrants to the Selling Agent and the Commodity Broker that:
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(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).
(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.
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(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 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
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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) The Commodity Broker agrees to indemnify and hold harmless the
Partnership, the General Partner and the Selling Agent, as the case may be, and
each person, if any, who controls the Partnership, the General Partner and 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 Commodity Broker, expressly for use therein. The Commodity
Broker'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) The Selling Agent agrees to indemnify and hold harmless the
Partnership, General Partner and the Commodity Broker, as the case may be, and
each person, if any, who controls the Partnership, the General Partner and the
Commodity Broker, 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 related to
or are based upon breach of any agreement, covenant, representation or warranty
set forth in this Agreement by the Selling Agent.
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(d) Each of the parties to this Agreement understands that the obligations
of each party subject to this Section 10 are separate and distinct.
Notwithstanding, any other provision of this Section 10, the General Partner
(i) 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) and (ii) any obligation of the General Partner to indemnify the
Selling Agent shall be adjusted to reflect the relative responsibility of the
Selling Agent (if any) for the circumstances giving rise to the losses, claims,
damages, costs, expenses, liabilities or actions for which indemnification is
sought.
(e) 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.
(f) 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 but
the omission to notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have to any indemnified
party under this Section 10 except 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.
(g) 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.
12. SURVIVAL OF COVENANTS; CAPTIONS; SUCCESSORS AND ASSIGNS
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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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