Exhibit (h)(2)
FORM OF
SELLING AGREEMENT
Asset Alliance Investment Services, Inc.
c/o Xxxxx X. Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We desire to enter into an Agreement with you for the sale of common shares of
beneficial interest of BTOP50 CTA Index Fund (the "Fund") that are now or
hereafter available for sale to our customers. You are the principal
underwriter (as such term is defined in the Investment Company Act of 1940
(the "1940 Act")) for the initial offering of common shares of the Fund and
for the continuous distribution of such common shares pursuant to the terms of
the Distribution Agreement between you and the Fund.
As used herein, the term "Prospectus" shall mean the prospectuses and, unless
the context otherwise requires, related statement(s) of additional information
(each a "Statement of Additional Information") incorporated therein by
reference, as the same are amended and supplemented from time to time, of the
Fund. As used herein unless otherwise indicated, the term "Preliminary
Prospectus" means any preliminary prospectus and any preliminary Statement of
Additional Information included at any time as a part of the registration
statement for the Fund prior to the effective date thereof and that is
authorized by you for use in connection with the offering of shares. As used
herein, the term "shares" means common shares of beneficial interest of the
Fund.
In consideration of the mutual covenants contained herein, it is hereby agreed
that our respective rights and obligations shall be as follows:
1. Customers of ours who purchase shares are for all purposes our
customers and not customers of the Fund. We shall be responsible for
opening, approving and monitoring customer accounts and for the
review and supervision of these accounts, all in accordance with the
rules of the Securities and Exchange Commission (the "SEC") and
National Association of Securities Dealers, Inc. (the "NASD"). In no
transaction involving shares shall we have any authority to act as
agent for the Fund or for you.
2. (a) All orders for the purchase of shares of the Fund during its
initial offering period (the "Initial Offering Period") shall be
executed at the initial public offering price per share set forth in
the Prospectus of the Fund. All orders for the purchase of shares of
the Fund during any subsequent continuous or separate offering
period (the "Continuing Offering Period") shall be executed at the
then current public offering price per share. All orders for the
repurchase of shares of the Fund shall be executed at the net asset
value per share for such class reduced by any applicable contingent
deferred sales charge as set forth below and in the Prospectus of
the Fund.
(b) We expressly acknowledge and understand that shares of the Fund
will not be repurchased by the Fund (other than through repurchases
or tender offers from time to time, if any) or by you and that no
secondary market for the shares of the Fund exists currently or is
expected to develop. We also expressly acknowledge and agree that,
in the event our customer cancels their order for such shares after
confirmation, such shares may not be repurchased, remarketed or
otherwise disposed of by or through you. ANY REPRESENTATION AS TO A
REPURCHASE OR A TENDER OFFER BY THE FUND, OTHER THAN THAT WHICH IS
SET FORTH IN ITS THEN CURRENT PROSPECTUS OR REPURCHASE INFORMATION
PUBLISHED BY THE FUND, IS EXPRESSLY PROHIBITED.
(c) The minimum initial and subsequent purchase orders and investor
suitability standards shall be as set forth in the Prospectus of the
Fund. The Fund reserves the right to reject any purchase order.
Shares may be transferred only in such minimum amounts and to
persons meeting such suitability standards as shall be set forth in
the Prospectus of the Fund. The Fund reserves the right, at its
discretion and without notice, to suspend the sale of shares or
withdraw entirely the sale of its shares.
(d) If the Fund obtains the exemptive relief in has requested from
the SEC, a customer of ours who sells shares back to the Fund during
the first twelve months after purchase will be subject to a
contingent deferred sales charge equal to the portion of the payment
made by you on such shares for which you have not yet been
reimbursed by the Fund. You shall be responsible for informing us if
such exemptive relief is granted, and we shall be responsible for
collecting the contingent deferred sales charge from our customers
and paying such charge to you.
3. In ordering shares of the Fund, we shall rely solely and
conclusively on the representations contained in the Prospectus (or
Preliminary Prospectus during any Initial Offering Period) of the
Fund. We agree that we shall not offer or sell shares of the Fund
except in compliance with all applicable federal and state
securities laws and the rules and regulations of applicable
regulatory agencies or authorities. In connection with offers to
sell and sales of shares of the Fund, we agree to deliver or cause
to be delivered to each person to whom any such offer or sale is
made, a copy of the Prospectus (or Preliminary Prospectus during any
Initial Offering Period) and, upon request, the Statement of
Additional Information (or preliminary Statement of Additional
Information during any Initial Offering Period) of the Fund and
unless otherwise agreed, we shall promptly confirm in writing all
share transactions of our customers. You agree to supply us with
copies of the Prospectus (or Preliminary Prospectus during any
Initial Offering Period), Statement of Additional Information (or
preliminary Statement of Additional Information during any Initial
Offering Period), annual and interim reports, proxy solicitation
materials, tender offer materials and any such other information and
materials relating to the Fund in reasonable quantities upon
request.
4. The Fund has filed with the SEC a Registration Statement (the
"Registration Statement") on Form N-2. The date on which the
Registration Statement is declared effective by the SEC is referred
to herein as the "Effective Date." We expressly acknowledge and
understand that:
(a) Shares of the Fund may not be sold, nor may offers to buy be
accepted, (i) prior to the Effective Date of the Registration
Statement or (ii) at any time, in any state in which such offer or
sale would be unlawful prior to registration or qualification under
the securities laws of such state.
(b) The Fund's Preliminary Prospectus, together with any sales
material distributed for use in connection with the offering of
shares of the Fund, does not constitute an offer to sell or the
solicitation of an offer to buy shares of the Fund and is subject to
completion and modification by the definitive Prospectus.
(c) In the event that we transmit indications of interest to you for
accumulation prior to the Effective Date, we will be responsible for
confirming such indications of interest with our customers in
writing following the Effective Date. Indications of interest with
respect to shares transmitted to you prior to the Effective Date are
subject to acceptance or rejection by you in your sole discretion
and are conditioned upon the occurrence of (i) the Effective Date
and/or (ii) the registration or qualification of the respective
class of shares in the respective state.
(d) Indications of interest with respect to shares not cancelled by
us prior to or on the later of (i) the Effective Date and/or (ii)
the registration or qualification of the respective class of shares
in the respective state, and accepted by you will be deemed by you
to be orders for shares.
(e) We agree that with respect to orders for shares, we will
transmit such orders received during the Initial Offering Period to
you within the time period as specified in the Preliminary
Prospectus of the Fund. We also agree to transmit any customer order
received during the Continuous Offering Period to you prior to the
seventh to the last business day of each month and we acknowledge
that such order shall be accepted only on the last business day of
each month during the continuous offering, and will not be accepted
unless you have cleared funds available at least three business days
prior to the last business day of each month as set forth in the
Fund's Prospectus. There is no assurance that the Fund will engage
in a continuous offering of shares.
(f) We agree to use our reasonable best efforts to transmit
repurchase requests from our customers to the Fund or its escrow
agent by the applicable repurchase request deadline.
(g) All indications of interest and orders transmitted to you are
subject to the terms and conditions of the Fund's Prospectus and
this Agreement and are subject to acceptance or rejection by you in
your sole discretion.
5. We shall not make any representations concerning the Fund shares
other than those contained in the Prospectus of the Fund or in any
promotional materials or sales literature furnished to us by you or
the Fund. We shall not furnish or cause to be furnished to any
person or display or publish any information or materials relating
to the Fund (including, without limitation, promotional materials
and sales literature, advertisements, press releases, announcements,
repurchase notices, statements, posters, signs or other similar
materials), except such information and materials as may be
furnished to us by you or the Fund, and such other information and
materials as may be approved in writing by you.
6. In determining the amount of any sales commission, if any, payable
to us hereunder, you reserve the right to exclude any sales which
you reasonably determine are not made in accordance with the terms
of the Fund Prospectus and the provisions of this Agreement. Unless
at the time of transmitting an order we advise you or the relevant
transfer agent to the contrary, the shares ordered will be deemed to
be the total holdings of the specified investor.
7. (a) In accordance with the terms of the Prospectus of the Fund, a
reduced distribution fee may be available to customers that purchase
Class B, Class C or Class D shares of the Fund sold at the then
current public offering price per share and that a reduced service
fee may be applicable to customers holding shares of such Classes.
(b) We acknowledge that certain classes of investors may be entitled
to purchase Class E shares of the Fund without a distribution or
service fee as from time to time provided in the Fund Prospectus.
(c) We agree to advise you promptly as to the amount of any and all
sales of shares by us qualifying for a reduced service fee.
(d) We agree to advise you promptly as to the point in time at which
any shares held by any of our customers are to be converted into
shares of another Class and to hold you harmless from any failure to
so advise you.
8. In accordance with the terms of the Prospectus of the Fund,
reductions in the contingent deferred sales charge may be applicable
to Class B, Class C and Class D shares and elimination of such
charge may be applicable to Class E shares. We agree to advise you
promptly as to any such shares owned by our customers that qualify
for such reduction or eliminations.
9. The procedures relating to orders and the handling thereof will be
subject to the terms of the Prospectus of the Fund and instructions
received by us from you or the Escrow Agent from time to time. No
conditional orders will be accepted. We agree that purchase orders
placed by us will be made only for the purpose of covering purchase
orders already received from our customers or for our own
investment.
Further, we shall place purchase orders from customers with the Fund
immediately and shall not withhold the placement of such orders so
as to profit ourselves; provided, however, that the foregoing shall
not prevent the purchase of shares of the Fund by us for our own
bona fide investment. We agree that: (a) we shall not effect any
transactions (including, without limitation, any purchases or
repurchases) in the Fund shares registered in the name of, or
beneficially owned by, any customer unless such customer has granted
us full right, power and authority to effect such transactions on
his behalf, and (b) you, the Fund, the Escrow Agent and your agents,
employees and affiliates shall not be liable for, and shall be fully
indemnified and held harmless by us from and against, any and all
claims, demands, damages, liabilities and expenses (including,
without limitation, reasonable attorneys' fees) which may be
incurred by you or any of the foregoing persons entitled to
indemnification from us hereunder arising out of or in connection
with the execution of any transactions in Fund shares registered in
the name of, or beneficially owned by, any customer in reliance upon
any oral or written instructions believed to be genuine and to have
been given by or on behalf of us. The indemnification agreement
contained in this Paragraph 9 shall survive the termination of this
Agreement.
10. We agree that payment for orders from us for the purchase of shares
will be made in accordance with the terms of the Prospectus for the
Fund. On or before the settlement date of each purchase order for
shares of the Fund (including the settlement date for any shares
sold during any Initial Offer Period), we shall remit to an account
designated by you with the Escrow Agent an amount equal to the then
current public offering price of the shares of the Fund being
purchased. If payment for any purchase order is not received in
accordance with the terms of the Fund Prospectus, you reserve the
right, without notice, to cancel the sale and hold us responsible
for any loss sustained as a result thereof. Upon acceptance by the
Fund of any order from us, you will pay us the sales charge in
respect of such sale in accordance with the terms of the Prospectus.
11. Certificates for shares sold hereunder shall only be issued in
accordance with the terms of the Fund Prospectus upon our customers'
specific request and, upon such request, shall be promptly delivered
to us by the Escrow Agent unless other arrangements are made by you
and us. However, in making delivery of such share certificates, the
Escrow Agent shall have adequate time to confirm receipt of payment
for such Fund shares.
12. We hereby represent and warrant that: (a) we are a corporation,
partnership or other entity duly organized and validly existing in
good standing under the laws of the jurisdiction in which we are
organized; (b) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly
authorized by all necessary action and all other authorizations and
approvals (if any) required for our lawful execution and delivery of
this Agreement and our performance hereunder have been obtained; and
(c) upon execution and delivery by us, and assuming due and valid
execution and delivery by you, this Agreement will constitute a
valid and binding agreement, enforceable against us in accordance
with its terms.
13. We further represent and warrant that we are a member of the NASD
and, with respect to any sales in the United States, we agree to
abide by all of the rules and regulations of the NASD, including,
without limitation, its Conduct Rules. We agree to comply with all
applicable federal and state laws, rules and regulations including,
without limitation, all suitability requirements applicable to our
customers' share transactions. You agree to inform us, upon our
request, as to the states in which you believe the shares of the
Fund have been qualified for sale under, or are exempt from the
requirements of, the respective securities laws of such states, but
you shall have no obligation or responsibility to make shares of any
Fund available for sale to our customers in any jurisdiction. We
agree to notify you immediately in the event of our expulsion or
suspension from the NASD. Our expulsion from the NASD will
automatically terminate this Agreement immediately without notice.
Our suspension from the NASD will terminate this Agreement effective
immediately upon your written notice of termination to us.
14. The names and addresses and other information concerning our
customers are and shall remain our sole property, and neither you
nor your affiliates shall use such names, addresses or other
information for any purpose except in connection with the
performance of your duties and responsibilities hereunder and except
for servicing and informational mailings relating to the Fund.
Notwithstanding the foregoing, this Paragraph 14 shall not prohibit
you or any of your affiliates from utilizing for any purpose the
names, addresses or other information concerning any of our
customers if such names, addresses or other information are obtained
in any manner other than from us pursuant to this Agreement. The
provisions of this Paragraph 14 shall survive the termination of
this Agreement.
15. We have policies and procedures in place in order to comply with our
obligations under the provisions of the International Money
Laundering Abatement Act, the USA PATRIOT Act, the Bank Secrecy Act
("BSA") and any other anti-money laundering law, rule or regulation
applicable to us as a financial institution under the BSA, or
otherwise. Subject to legal restrictions, we will, upon your
request, promptly provide to you or the Fund evidence of those
policies and procedures and our compliance therewith and/or evidence
establishing the identities and sources of funds for each purchase
of shares of the Fund.
16. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an
exclusive arrangement, or to create a partnership, association or
joint venture between you and us. Neither party hereto shall be, act
as, or represent itself as, the agent or representative of the
other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express
or implied, against or in the name of, or on behalf of the other
party. This Agreement is not intended to, and shall not, create any
rights against either party hereto by any third party solely on
account of this Agreement. Neither party hereto shall use the name
of the other party in any manner without the other party's prior
consent, except as required by any applicable federal or state law,
rule or regulation, and except pursuant to any promotional programs
mutually agreed upon in writing by the parties hereto.
17. Except as otherwise specifically provided herein, all notices
required or permitted to be given pursuant to this Agreement shall
be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail,
return receipt requested, or by telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you
shall be given or sent to you at your offices located at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and all notices to us shall be
given or sent to us at our address shown below.
18. This Agreement shall become effective only when accepted and signed
by you, and may be terminated immediately, without prior notice, by
either party. This Agreement may be amended only by a written
instrument signed by both parties hereto and may not be assigned by
either party without the prior written consent of the other party.
This Agreement constitutes the entire agreement and understanding
between the parties hereto relating to the subject matter hereof and
supersedes any and all prior agreements between the parties relating
to said subject matter.
19. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS.
Very truly yours,
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Name of Selling Agent (please print or type)
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CRD #
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Address
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City State Zip Code
By:
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Authorized Officer (please print or type)
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Signature
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Title
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Date
Note: Please sign and return all copies of this Agreement to ASSET ALLIANCE
INVESTMENT SERVICES, INC. Upon acceptance, one countersigned copy will be
returned to you for your files.
Accepted: ASSET ALLIANCE INVESTMENT
SERVICES, INC.
By:
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Authorized Officer
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Signature
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Title
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Date
