Form of Selling Agent Agreement
XXXXXXX DIVERSIFIED FUND, L.P.
(A Delaware Limited Partnership)
_______________, 2001
Xxxxxxx Xxxxxx & Company Financial Services, Inc.
X.X. Xxx 00000
Xxxxx Xxxxxx, XX 00000-0000
Gentlemen:
Xxxxxxx Asset Management, Inc., a New York corporation (the "General
Partner"), is the sole general partner of Xxxxxxx Diversified Fund, L.P. (the
"Fund"), a limited partnership organized under the Delaware Revised Uniform
Limited Partnership Act to speculatively trade in commodity futures contracts
and related interests as described in the Prospectus and accompanying Statement
of Additional Information (as defined in Section 1(a) hereof). The Fund proposes
to offer publicly for subscription and to sell to subscribers acceptable to the
General Partner, upon the terms and subject to the conditions set forth in this
Agreement and the Registration Statement (as defined in Section 1(a) hereof) and
the Prospectus and Statement of Additional Information included therein, as
either or both may from time to time be amended or supplemented, a minimum of
one thousand (1,000) and a maximum of twenty five thousand (25,000) units of
limited partnership interest ("Units") in the Fund at a purchase price equal to
(i) $1,000 per Unit ($950 per Unit, plus an initial sales charge of $50 per
Unit) during the initial offering period of the Fund, and thereafter at the Net
Asset Value per Unit, plus a sales charge of 5% of the Net Asset Value per Unit
for each Unit purchased, each as more fully described in the Prospectus and
Statement of Additional Information.
Xxxxxxx Xxxxxx & Company Financial Services, Inc., an Iowa corporation
(the "Selling Agent"), will act as the syndicator and sales agent for the Fund
on a best efforts basis.
1. Representations and Warranties of the General Partner and the Fund. The
General Partner and the Fund jointly and severally represent and warrant to the
Selling Agent that:
(a) A registration statement on Form S-1 (File No. 333-46550), and as a
part thereof a prospectus and statement of additional information
relating to the Units, prepared in conformity with the applicable
requirements of the Securities Act of 1933, as amended (the "1933
Act"), and the rules and regulations promulgated thereunder (the "Rules
and Regulations), have been filed with the Securities and Exchange
Commission (the "SEC") in the form heretofore delivered to the Selling
Agent (which registration statement at the time and in the form it is
declared effective by the SEC shall be referred to herein as the
"Registration Statement", which prospectus in the form filed with the
SEC pursuant to Rule 424(b) shall be referred to herein as the
"Prospectus", and which statement of additional information in the form
filed with the SEC pursuant to Rule 424(b) shall be referred to herein
as the "Statement of Additional Information"); provided that (i) if the
Fund files a post-effective amendment to such registration statement,
then the term "Registration Statement" shall refer to the registration
statement as amended by such post-effective amendment, and the term
"Prospectus" shall refer to the amended prospectus then on file with
the SEC, and the term "Statement of Additional Information" shall refer
to the amended statement of additional information then on file with
the SEC, (ii) if a prospectus filed by the Fund pursuant to either Rule
424(b) or (c) promulgated under the 1933 Act shall differ from the
prospectus on file at the time the Registration Statement or any
post-effective amendment thereof shall have become effective, the term
"Prospectus" shall refer to the prospectus filed pursuant to Rule
424(b) or (c), from and after the date on which it shall have been
filed, and (iii) if a statement of additional information filed by the
Fund pursuant to either Rule 424(b) or (c) promulgated under the 1933
Act shall differ from the statement of additional information on file
at the time the Registration Statement or any post-effective amendment
thereof shall have become effective, the term "Statement of Additional
Information" shall refer to the statement of additional information
filed pursuant to Rule 424(b) or (c), from and after the date on which
it shall have been filed;
(b) Copies of the Registration Statement have also been filed with the
Commodity Futures Trading Commission (the "CFTC");
(c) No order preventing or suspending the use of the Registration
Statement or any previous prospectus or statement of additional
information with respect to the Units has been issued by the SEC. The
Registration Statement contains all statements which are required to be
made therein, conforms in all material respects to the requirements of
the 1933 Act, and does not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(d) The Fund has been duly formed and is validly existing as a limited
partnership in good standing under the Delaware Revised Uniform Limited
Partnership Act, with full power and authority to carry out its
obligations under this Agreement, its Certificate of Limited
Partnership (the "Partnership Certificate") and its Agreement of
Limited Partnership, as amended, (the "Limited Partnership Agreement"),
and to own its properties, conduct its business and engage in the
activities as described in the Prospectus and the Statement of
Additional Information; and the Fund conducts no business and owns or
leases no properties that would require it to qualify to do business as
a foreign limited partnership in any jurisdiction except the State of
New York, where the Fund is qualified to do business;
(e) The offer and sale of the Units have been duly authorized by the
Fund, and upon payment for, and when sold and issued in the manner and
under conditions set forth in the Prospectus and the Statement of
Additional Information, the Units will constitute valid limited
partnership interests in the Fund which conform to the description
thereof contained in the Prospectus and the Statement of Additional
Information; the liability of each limited partner of the Fund
("Limited Partner") will be limited as set forth in the Prospectus and
the Statement of Additional Information, and no Limited Partner will be
subject to personal liability for the debts, obligations, or
liabilities of the Fund by reason of his being a limited partner of the
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Fund other than as described in the Prospectus and the Statement of
Additional Information;
(f) The offer and sale of the Units and the performance by the Fund and
the General Partner of all of the provisions of this Agreement will not
conflict with or result in a breach of any of the terms or provisions
of, or in the imposition of any lien, charge or encumbrance upon any of
the property or assets of the Fund pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Fund is a party or by which the Fund is
bound or to which any of the property or assets of the Fund are
subject, nor will any such action or performance result in a violation
of the provisions of the Partnership Certificate or the Limited
Partnership Agreement or any statute or any order, rule or regulation
of any court or governmental authority or body having jurisdiction over
the Fund or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any
court or any such governmental authority or other governmental body is
required for the issuance and sale of the Units or the consummation of
the other transactions contemplated by this Agreement, except the
registration of the General Partner with the CFTC as a commodity pool
operator, the registration under the 1933 Act of the Units and such
consents, approvals, authorizations, registrations or qualifications as
may be required by the CFTC and state securities or blue sky laws in
connection with the offer and sale of the Units;
(g) Anchin Block & Anchin LLP, who has examined certain financial
statements of the General Partner and the Fund, are independent
certified public accountants as required by the 1933 Act;
(h) The Fund has been capitalized as set forth in the Prospectus and
the Statement of Additional Information;
(i) The Fund has complied, and will continue to comply, with all laws,
rules and regulations applicable to its business, including regulations
promulgated by the CFTC, the violation of which would materially and
adversely affect the business, financial condition or earnings of the
General Partner or the Fund; and there are no actions, suits or
proceedings pending or, to the knowledge of the General Partner or the
Fund, threatened against the Fund, at law or in equity, before or by
any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, or before or by
any commodity exchange, in which an adverse decision would materially
and adversely affect the business, financial condition or earnings of
the General Partner or the Fund and which are not adequately disclosed
in the Prospectus or the Statement of Additional Information;
(j) The financial statements of the Fund contained in the Registration
Statement, the Prospectus and the Statement of Additional Information
fairly present the financial condition and the results of operations of
the Fund as of the dates and for the periods therein specified, and
such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as is otherwise noted or
reported therein;
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(k) There are no contracts or other documents that are required to be
filed as exhibits to the Registration Statement by the 1933 Act which
will not have been so filed prior to the declaration of the
effectiveness of the Registration Statement by the SEC;
(l) The Registration Statement, including the Prospectus and Statement
of Additional Information, contains all statements and information
required to be included therein by the Commodity Exchange Act (the "CE
Act") and the rules and regulations promulgated thereunder by the CFTC
(the "CFTC Rules");
(m) When the Registration Statement becomes effective under the 1933
Act and at all times subsequent thereto, up to and including each
closing hereunder, the Registration Statement and the Prospectus and
Statement of Additional Information therein will comply in all material
respects with the requirements of the 1933 Act and the regulations
promulgated thereunder, the CE Act, the CFTC Rules, and the rules of
the National Futures Association (the "NFA"). As of its effective date,
the Registration Statement will not contain any 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. The
Prospectus and Statement of Additional Information therein, as of its
date of issue and as of each closing, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which such statements were made, not misleading. Any supplemental sales
literature employed in offering the Units (the "Sales Literature"),
when read in conjunction with the Prospectus and Statement of
Additional Information therein, as of its date of issue and as of each
closing, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which such statements were made,
not misleading. The Sales Literature will comply with the 1933 Act, the
regulations promulgated thereunder, the CE Act, the CFTC Rules, and the
NFA. This representation and warranty shall not, however, apply to any
statement or omission in the Registration Statement, Prospectus and
Statement of Additional Information therein or Sales Literature
relating to the Selling Agent or made in reliance upon and in
conformity with information furnished in writing by the Selling Agent
for inclusion in such Registration Statement, Prospectus and Statement
of Additional Information therein or the Sales Literature.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus and Statement of Additional
Information therein, except as may otherwise be stated in or
contemplated by the Registration Statement and the Prospectus and
Statement of Additional Information therein, there has not been any
material adverse change in the condition, financial or otherwise,
business or prospects of the General Partner or the Fund, whether or
not arising in any ordinary course of business.
(o) The Limited Partnership Agreement, the Advisory Agreement between
the Fund and the General Partner (the "Advisory Agreement") and this
Agreement have each been duly and validly authorized, executed, and
delivered by the General Partner, individually and on behalf of the
Fund, as the case may be, and each constitutes a valid and binding
agreement of the Fund and of the General Partner, as the case may be,
enforceable against the Fund and the General Partner, as the case may
be, in accordance with its terms. The Escrow Agreement (the "Escrow
Agreement") by and among the Fund, The Chase Manhattan Bank (the
"Escrow Agent") and the Selling Agent has been duly and validly
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authorized, executed, and delivered by the General Partner on behalf of
the Fund, and constitutes a valid and binding agreement of the Fund,
enforceable against the Fund in accordance with its terms.
(p) Except as set forth in the Registration Statement or the Prospectus
and Statement of Additional Information therein, there has not been in
the five years preceding the date of the Prospectus and there is not
pending or, to the best of the General Partner's knowledge, threatened,
any action, suit, or proceeding at law or in equity before or by any
court, governmental body, administrative agency, panel, or
self-regulatory organization to which the General Partner, any of the
"principals" of the General Partner, as defined in CFTC Rule 4.10(e)
(the "General Partner Principals"), or the Fund is or was a party, or
to which any of the assets of the General Partner or the Fund is or was
subject; and neither the General Partner nor any General Partner
Principal has received any notice of an investigation by the SEC, CFTC,
NASD or NFA regarding non-compliance by the General Partner, the
General Partner Principals or the Fund with the 1933 Act, the 1934 Act,
any other federal securities laws, rules or regulations, the CE Act,
the CFTC Rules, or the NFA, which action, suit, proceeding, or
investigation resulted or might reasonably be expected to result in any
material adverse change in the condition, financial or otherwise,
business or prospects of the General Partner or the Fund, or which
could be material to an investor's decision to invest in the Fund.
2. Representations and Warranties of the General Partner. The General Partner
represents and warrants to the Selling Agent that:
(a) It has been duly incorporated and is validly existing as a
corporation under the laws of the State of New York with full power and
authority to conduct its business as described in the Prospectus and
the Statement of Additional Information; and it is duly qualified to
conduct business as a foreign corporation and is in good standing in
every jurisdiction in which the character of such business requires
such qualification, except to the extent that the failure to so qualify
would not reasonably be expected to have a material adverse effect on
the business or operations of the General Partner;
(b) It has complied, and will continue to comply, with all laws, rules
and regulations applicable to its business, including regulations
promulgated by the CFTC, the violation of which would materially and
adversely affect the business, financial condition or earnings of the
Fund or the General Partner; and there are no actions, suits or
proceedings pending or, to its knowledge, threatened against the
General Partner, at law or in equity, before or by any Federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, or before or by any commodity exchange, in
which an adverse decision would materially and adversely affect the
business, financial condition or earnings of the Fund or the General
Partner and which are not adequately disclosed in the Prospectus or the
Statement of Additional Information;
(c) Its financial statements contained in the Registration Statement,
the Prospectus and the Statement of Additional Information fairly
present its financial condition and the results of its operations as of
the dates and for the periods therein specified, and such financial
statements have been prepared in accordance with generally accepted
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accounting principles consistently applied throughout the periods
involved, except as is otherwise noted or reported therein;
(d) The General Partner and each "principal" of the General Partner, as
defined in CFTC Rule 3.1(a), have all federal, state, and foreign
governmental, regulatory, self-regulatory, and exchange approvals,
licenses, registrations, and memberships, and have effected all filings
with federal, state, and foreign governmental regulators,
self-regulatory organizations, and exchanges required to conduct their
business and to act as described in the Registration Statement and the
Prospectus and Statement of Additional Information therein, or required
to perform their obligations under the Limited Partnership Agreement,
the Advisory Agreement, the Escrow Agreement and this Agreement. The
General Partner is registered as a commodity pool operator under the CE
Act and is a member of the NFA as a commodity pool operator. The
General Partner's principals identified in the Prospectus are all of
the General Partner Principals;
(e) To the extent required under CFTC Rules and applicable CFTC staff
no-action letters, the actual performance of all pools "operated"
within the meaning of the CE Act by the General Partner and of the
General Partner Principals is disclosed in the Prospectus and Statement
of Additional Information therein.
3. Appointment of the Selling Agent.
(a) Subject to the terms and conditions and upon the basis of the
representations and warranties set forth herein, the Fund hereby
appoints the Selling Agent as its selling agent, and the Selling Agent
agrees to use its best efforts, without any commitment on the part of
the Selling Agent to purchase any Units, to procure subscribers for the
Units at an initial purchase price of One Thousand Dollars ($1,000) per
Unit ($950 per Unit, plus an initial sales charge of $50 per Unit) and
will continue such efforts to and including that day which is sixty
(60) days after the date on which the Registration Statement is
declared effective by the SEC, subject to a possible extension for up
to an additional sixty (60) days at the discretion of the General
Partner (the "Initial Offering Period") and thereafter (if at least
1,000 Units have been sold during the Initial Offering Period and the
Fund continues to offer Units to the public) at a purchase price equal
to the then current Net Asset Value per Unit (as defined in the
Prospectus and the Statement of Additional Information), plus a sales
charge of 5% of the Net Asset Value per Unit for each Unit purchased.
(b) All proceeds from the sale of Units during the Initial Offering
Period shall be deposited in an escrow account with The Chase Manhattan
Bank 450 West 33rd Street, 15th fl., Xxx Xxxx, XX 00000, for the
benefit of the subscribers, and thereafter shall be paid to the Fund on
the appropriate date of purchase of Units. If subscriptions for at
least one thousand (1,000) Units shall not have been received and
accepted by the General Partner by the conclusion of the Initial
Offering Period, then each subscriber shall have returned to him one
hundred percent (100%) of his subscription within fifteen (15) days
following the termination of the offering, plus any interest accrued
thereon (pro rata taking in account the amount and the time of
deposit).
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(c) The Selling Agent may appoint as its agent to make offers and sales
of the Units any securities broker/dealer which is a member in good
standing of the NASD and foreign broker/dealers and institutions which
are not members of the NASD but which agree to abide by the NASD Rules
of Fair Practice in making sales of the Units (hereinafter collectively
referred to as the "Selected Dealers"). The Selling Agent and the
Selected Dealers will make offers to sell Units to, or solicit offers
to subscribe for any Units from, only those persons who meet the
suitability requirements set forth in the Prospectus and the Statement
of Additional Information and persons in only those states where the
Fund has registered or qualified the offering of Units for sale or
under circumstances where the offering of Units for sale is exempt from
registration and qualification.
(d) In consideration of the services to be rendered by the Selling
Agent hereunder, if at least 1,000 Units are sold and accepted by the
General Partner during the Initial Offering Period, the Fund shall pay
the Selling Agent selling commissions equal to eighty percent (80%) of
the sales charges imposed by the Fund and described in the Prospectus
and Statement of Additional Information with respect to each Unit sold
by or through the Selling Agent and the Selected Dealers (as defined in
Section 3(c) hereof) and accepted by the General Partner.
(e) If at least 1,000 Units are sold and accepted by the General
Partner during the Initial Offering Period, the Selling Agent may pay
to each Selected Dealer an amount up to sixty percent (60%) of the
sales charges imposed by the Fund and described in the Prospectus and
Statement of Additional Information with respect to each Unit sold by
such Selected Dealer and accepted by the General Partner. Such amount
will be paid by the Selling Agent to the Selected Dealers only out of
the compensation received by the Selling Agent in respect of the sale
of Units hereunder and described in Section 3(d) hereof. The
arrangements, if any, between the Selling Agent and any Selected Dealer
shall be set forth in a Selected Dealer Agreement in substantially the
form filed as an Exhibit to the Registration Statement, unless the Fund
shall consent to other arrangements.
(f) Whether or not this Agreement becomes effective or the transactions
contemplated by this Agreement are consummated or this Agreement is
terminated, the Fund (or the General Partner on its behalf) shall
reimburse the Selling Agent for all expenses incident to the
performance of the obligations of the Selling Agent, the Fund or the
General Partner under this Agreement, including, but not limited to:
all expenses and taxes incident to the sale and delivery of the Units;
all expenses incident to the registration of the Units under the 1933
Act and the printing of copies of the Registration Statement, any
preliminary prospectus, the Prospectus and Statement of Additional
Information, the Sales Literature, any amendments or supplements
thereto, the blue-sky memorandum, this Agreement, the Escrow Agreement,
the Management Agreement, and the Limited Partnership Agreement and
furnishing the same to the Selling Agent; all filing and printing fees
and expenses including legal fees and disbursements of counsel retained
for the purpose of such qualification) incurred in connection with
qualification of the Units for sale under the laws of such
jurisdictions as the Selling Agent may designate; all fees and expenses
paid or incurred in connection with filings made with the NASD; all
fees and expenses of the transfer agent and registrar for the Units,
and the custodian of the Fund's securities; all fees and expenses paid
or incurred in connection with the execution of the Certificate of
Limited Partnership, the preparation, execution and filing of the
Certificate of Limited Partnership, and all amendments or supplements
7
thereto; all fees and expenses incurred in qualifying the Fund to
transact business outside of the State of Delaware; the fees and
disbursements of counsel to and accountants of the Fund and the General
Partner; and all other costs and expenses incident to the performance
of the obligations of the Fund and the General Partner hereunder which
are not otherwise specifically provided for in this Section 3(e),
including the fees and expenses of counsel to the Selling Agent,
including (without limitation) such fees and expenses incurred with
such counsel on behalf of the Fund in the qualification of the Units
under state "blue sky" laws, and in obtaining the approval of the NASD
of the terms of the offering.
(g) Each person desiring to purchase Units is to (i) complete and
manually execute a Subscription Agreement and mail or deliver such
executed Subscription Agreement to the Selling Agent or any Selected
Dealer and (ii) (a) prior to Initial Closing, deliver to the Selling
Agent or any Selected Dealer a check made payable to the escrow agent
and after Initial Closing, deliver to the Selling Agent or any Selected
Dealer a check made payable to the Fund or (b) in accordance with the
Prospectus, assure that his account with his Selected Dealer contains
or will contain cash or other good funds on the specified settlement
date, in each case in the amount of the purchase price for each Unit
that he desires to purchase. Each person who authorizes his Selected
Dealer to debit his customer account will be notified by his Selected
Dealer of the settlement date for the purchase of such Units. Each such
person must have funds to cover his subscription payment in his account
on the specified settlement date and his account will be debited on the
settlement date. Each Selected Dealer shall either (i) forward each
check received to the Selling Agent by noon of the first business day
after receipt or (ii) forward the full purchase price of the Units
subscribed for by wire transfer payable in federal funds to the Escrow
Agent (prior to the Initial Closing) or to the Fund (after the Initial
Closing) by noon after the first business day after settlement for such
funds and simultaneously send a telegram, telecopy or other appropriate
communication stating the name of each investor and the amount of such
investor's subscription funds transferred to the Selling Agent and the
Escrow Agent or Trust, as the case may be. Simultaneous with the
transfer of any check or funds to the Selling Agent or the Escrow
Agent, each Selected Dealer shall forward the corresponding
subscription agreement to the Selling Agent. The Selling Agent shall
forward each check received by the Selling Agent to the Escrow Agent or
to the Fund, as the case may be, by noon of the first business day
following receipt of such check. The Selling Agent shall also forward
each subscription agreement the Selling Agent receives (whether from a
Selected Dealer or otherwise) to the Fund for acceptance or rejection
on the first business day after receipt.
4. Continuing Services of Selling Agent.
(a) The Selling Agent shall provide continuing services to those
limited partners (the "Limited Partners") of the Fund to whom the
registered representatives of the Selling Agent sold such Units. These
continuing services include, without limitation, (i) keeping the
Limited Partners apprised of developments affecting the Fund, (ii)
responding to specific inquiries received from Limited Partners
relating to the Fund and the futures markets, (iii) communicating
current valuations of the Fund's Net Asset Value per Unit (as defined
in the Limited Partnership Agreement, as amended) to the Limited
Partners, (iv) assisting in redemptions, transfers and distributions,
(v) assisting Limited Partners in interpreting the Fund's monthly and
annual reports, financial statements and the tax information provided
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to Limited Partners, (vi) providing such other services as the Limited
Partners from time to time may reasonably request, and (vii) providing
reasonable assistance to Selected Dealers who have entered into
Continuing Services Agreement with the Fund in providing services to
Limited Partners to whom such Selected Dealers are providing services
(collectively, the "Continuing Services").
(b) In consideration of the Selling Agent providing the Continuing
Services, the Fund will pay to the Selling Agent (i) 1/12 of 1.25% of
the Net Asset Value per Unit of the Fund's assets under management at
month's end (without reduction for distributions or redemptions
effected as of such date or management fees payable or incentive
allocations allocable as of such date) with respect to Units purchased
through registered representatives of the Selling Agent within the
prior twelve-month period and which are held by persons who are being
serviced by the Selling Agent pursuant to the terms hereof, and (ii)
1/12 of 4.00% of the Net Asset Value per Unit of the Fund's assets
under management at month's end (without reduction for distributions or
redemptions effected as of such date or management fees payable or
incentive allocations allocable as of such date) with respect to Units
purchased more than twelve months prior thereto which are held by
persons who are being serviced by the Selling Agent pursuant to the
terms hereof. The amounts payable pursuant to this subsection are
referred to herein as the "Continuing Services Fee."
(c) The Fund will also pay to the Selling Agent, with respect to Units
sold by a Selected Dealer and accepted by the General Partner during
the Initial Offering Period, and held by persons who are being serviced
by such Selected Dealer pursuant to a Continuing Services Agreement
between the Fund and the Selected Dealer, (i) for the twelve month
period following the purchase of such Xxxxx, 0/00 of 0.25% of the Net
Asset Value per Unit of the Fund's assets under management at month's
end (without reduction for distributions or redemptions effected as of
such date or management fees payable or incentive allocations allocable
as of such date); (ii) subsequent to the twelve month anniversary of
the purchase of such Xxxxx, 0/00 of 1.00% of the Net Asset Value per
Unit of the Fund's assets under management at month's end (without
reduction for distributions or redemptions effected as of such date or
management fees payable or incentive allocations allocable as of such
date). The amounts payable pursuant to this subsection are referred to
herein as the "Continuing Services Override." The Continuing Services
Fee and the Continuing Services Override are together referred to
herein as the "Continuing Services Compensation."
(d) Selling Agent further agrees to assign specific account executives
to provide the services described in this Section 4 to particular
Limited Partners. In the event that any such account executive who is
responsible for providing these services to a particular Limited
Partner leaves the employ of the Selling Agent, the Selling Agent shall
assign another account executive to such duties, unless the Limited
Partner involved transfers his account from Selling Agent's firm to a
different firm.
(e) Selling Agent acknowledges and agrees that according to the
position presently being taken by the NASD, the Fund is permitted to
pay the Continuing Services Compensation only to, or for the benefit
of, persons who are appropriately registered with the CFTC and/or the
NFA (collectively, "CFTC/NFA Registration"), provided, however, that if
any party to which Continuing Services Compensation is to be paid in
respect of a Unit is not appropriately registered with the CFTC and/or
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the NFA, then the Continuing Services Compensation payable to such
party in respect of such Unit will be deemed a selling commission and
will only be paid until the aggregate amount of commissions paid in
respect of the sale of such Unit, plus any additional costs and
commissions allocable to the sale of such Unit equals ten percent (10%)
of the initial sales price of such Unit. The Selling Agent shall not be
entitled to the Continuing Services Fee, but shall continue to be
entitled to the Continuing Services Override, with respect to any
Limited Partners who are no longer being serviced by the Selling Agent.
Subject to the proviso in the first sentence of this subsection, the
Selling Agent shall not be entitled to Continuing Services Compensation
in any case in which it is determined by the Fund that the required
registrations are not in effect.
5. Representations and Warranties of the Selling Agent.
(a) The Selling Agent represents and warrants to the Fund and the
General Partner that:
i) All references to and information concerning the Selling
Agent contained in the Registration Statement, the Prospectus
and the Statement of Additional Information are accurate in
all material respects, and, as to the Selling Agent, the
Registration Statement, the Prospectus and the Statement of
Additional Information do not contain any misleading or untrue
statement of a material fact or omit to state a material fact
which is necessary to prevent the statements made therein, in
light of the circumstances in which they were made, from being
misleading;
ii) The Selling Agent is a corporation duly organized and
validly existing under the laws of the State of Iowa, 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, the Prospectus and the Statement of Additional
Information; and it is duly qualified to conduct business as a
foreign corporation and is in good standing in every
jurisdiction in which the character of such business requires
such qualification, except to the extent that the failure to
so qualify would not reasonably be expected to have a material
adverse effect on the business or operations of the General
Partner;
iii) 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 it, and any use or
distribution of the Registration Statement, the Prospectus and
the Statement of Additional Information by the Selling Agent
will comply with the terms and conditions for use and/or
distribution set forth in the Prospectus and the Statement of
Additional Information, with the procedures set forth in this
Agreement, and with the 1933 Act, the 1934 Act, the CE Act,
all applicable state securities and commodity laws, the rules
and regulations promulgated under all such acts and all such
laws, and all applicable rules and regulations of the NASD and
other self-regulatory organizations;
iv) The Selling Agent has obtained all required governmental
and regulatory approvals and licenses to perform its
obligations under this Agreement and to act as described in
the Registration Statement, the Prospectus and the Statement
of Additional Information, and the performance of its
obligations under this Agreement and its acting as described
10
in the Registration Statement, the Prospectus and the
Statement of Additional Information will not violate or result
in a breach of any provisions of its Articles of Incorporation
or by-laws or any agreement, order, law or regulation binding
upon it; and
v) This Agreement and the Escrow Agreement have each 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 enforceable against the Selling Agent in
accordance with its terms.
vi) Unless the Fund shall inform the Selling Agent that
CFTC/NFA Registration is no longer required, the Selling Agent
and any account executives who participate in the Continuing
Services Compensation are currently registered, as required,
with the CFTC/NFA, or are subject to the proviso of the first
sentence of sub-section 4(e) of this Agreement, and the
Selling Agent agrees to comply with such registration
requirements, subject to the proviso of the first sentence of
subsection 4(e) of this Agreement, for so long as it shall
continue to receive any Continuing Services Compensation.
(b) The Selling Agent agrees that, except as specifically set forth
herein, neither the Fund nor the General Partner shall be liable for
any underwriting compensation in connection with the offer or sale of
Units, and any compensation payable in respect thereof, except as
specifically set forth herein, shall be the sole responsibility of the
Selling Agent.
6. Covenants of the Fund and the General Partner.
(a) The Fund agrees with the Selling Agent:
i) To advise the Selling Agent, promptly after it receives
notice thereof, of (i) the time when the Registration
Statement or any amended Registration Statement has become
effective or any amended or supplemented Prospectus or
Statement of Additional Information has been filed, (ii) the
issuance by the SEC of any stop order or of any other order
preventing or suspending the use of the Prospectus or the
Statement of Additional Information or any amended or
supplemented Prospectus or Statement of Additional
Information, (iii) the initiation or threatening of any
proceeding for any such purpose, or (iv) any request by the
SEC for the amending or supplementing of the Registration
Statement, the Prospectus or the Statement of Additional
Information or for additional information; and in the event of
the issuance of any stop order or of any order preventing or
suspending the use of the Prospectus or the Statement of
Additional Information or any amended or supplemented
Prospectus or Statement of Additional Information or
suspending any such qualification of the Units, promptly to
use its best efforts to obtain its withdrawal;
ii) To furnish the Selling Agent with copies of the Prospectus
and the Statement of Additional Information in such quantities
as the Selling Agent may from time to time reasonably request,
and if delivery of a Prospectus or Statement of Additional
Information is required at any time prior to the expiration of
nine (9) months after the date of the Prospectus or the
Statement of Additional Information and at any such time any
11
event shall have occurred as a result of which the Prospectus
or the Statement of Additional Information, as then amended or
supplemented, would include an untrue statement of a material
fact or omit to state any material fact necessary to be stated
therein in order to make the statements therein, in light of
the circumstances under which they were made when such
Prospectus or Statement of Additional Information is
delivered, not misleading, or if for any other reason it shall
be necessary to amend or supplement the Prospectus or the
Statement of Additional Information in order to comply with
the 1933 Act, to notify the Selling Agent and, upon the
Selling Agent's request, to prepare and furnish, without
charge to the Selling Agent, as many copies as the Selling
Agent may from time to time reasonably request of an amended
Prospectus and Statement of Additional Information or a
supplement to the Prospectus and Statement of Additional
Information which will correct such statement or omission or
otherwise effect such compliance;
iii) Promptly from time to time to take such action as the
Selling Agent may reasonably request to qualify the Units for
offering and sale under the securities or blue sky laws of
such jurisdictions as the Selling Agent may request and in
which such qualification is possible and to comply with such
laws so as to permit the continuance of sales in such
jurisdictions for so long as may be necessary to complete the
distribution; provided, however, that in connection therewith
the Fund shall not be required to qualify as a foreign limited
partnership (except in the State of New York) or to file a
general consent to service of process in any jurisdiction;
iv) To make generally available in the manner specified in
Rule 158(b) of the Rules and Regulations, to the holders of
Units as soon as practicable, but in any event not later than
45 days after the end of the 12-month period beginning on the
day after the end of the fiscal quarter of the Company during
which the effective date of the Registration Statement occurs
(90 days in the event that the end of such fiscal quarter is
the end of the Company's fiscal year), an earnings statement
of the Fund (which need not be audited) complying with Section
11(a) of the 1933 Act and Rule 158(a) of the Rules and
Regulations and covering a period of at least twelve (12)
consecutive months beginning after the effective date of the
Registration Statement;
v) During the term of this Agreement and for a period of one
(1) year from the termination of this Agreement, to furnish
the Selling Agent with copies of all reports or other
communications (financial or otherwise) furnished to the
Limited Partners, and to deliver to the Selling Agent, as soon
as they are available, copies of any reports and financial
statements furnished to or filed with the SEC; and
vi) To furnish, without charge, to the Selling Agent one (1)
signed copy of the Registration Statement and of each
amendment thereto, including all financial statements and
exhibits, and such number of conformed copies of the
Registration Statement and of each amendment thereto,
including all financial statements but excluding exhibits to
the Registration Statement, as the Selling Agent may
reasonably request.
(b) The General Partner agrees with the Selling Agent that the General
Partner shall purchase the number of units of general partnership
interest required by it to be purchased under the Limited Partnership
12
Agreement and shall have a Net Worth (as defined in the Limited
Partnership Agreement) equal to or in excess of the requirements
thereof.
7. Conditions to the Obligations of the Selling Agent. The obligations of the
Selling Agent hereunder shall be subject, in its discretion, to the condition
that all representations and warranties and other statements of the Fund and the
General Partner herein are, at and as of the time of effectiveness of the
Registration Statement, true and correct in all material respects, to the
condition that each of the Fund and the General Partner shall have performed in
all material respects all of its obligations hereunder theretofore to be
performed, and to the following additional conditions:
(a) The Registration Statement shall have become effective, and the
Selling Agent shall have received notice thereof; no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been
initiated or threatened by the SEC; and all requests for additional
information on the part of the SEC shall have been complied with to the
reasonable satisfaction of the Selling Agent and its counsel.
(b) The Selling Agent shall have received a certificate of the General
Partner, dated the Initial Closing Date, and each Subsequent Closing
Date (as defined in Section 8(d)), to the effect that:
i) On and as of the date of such certificate, the
representations and warranties of each of the Fund and the
General Partner contained herein are true and correct, and
each of the Fund and the General Partner has complied with all
the agreements and satisfied all the conditions required to be
performed or satisfied on its or their part at or prior to
such date;
ii) No stop order suspending the effectiveness of the
registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the best of its
knowledge, are pending or contemplated under the 1933 Act with
respect to the Registration Statement, the Prospectus or the
Statement of Additional Information; and
iii) Neither the Registration Statement, the Prospectus, the
Statement of Additional Information nor any amendments or
supplements thereto contain an untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to be stated therein to make the
statements made therein, in light of the circumstances in
which they were made, not misleading and, since the effective
date of the Registration Statement, no event has occurred or
been discovered which is required to be set forth in an
amended or supplemental Prospectus or Statement of Additional
Information which has not been so set forth.
(c) Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP shall have furnished the
Selling Agent with their written opinion, dated the Initial Closing
Date, and each Subsequent Closing Date, in substantially the form
attached hereto as Exhibit A.
13
(d) Anchin Block & Anchin LLP shall have furnished to the Selling Agent
a letter, dated the Initial Closing Date, in form and substance
satisfactory to the Selling Agent, to the effect that:
i) They are independent certified public accountants with
respect to the Fund and the General Partner within the meaning
of the 1933 Act and the applicable rules and regulations
thereunder adopted by the SEC.
ii) In their opinion the financial statements of the Fund and
the General Partner audited by them and included in the
registration statement comply as to form in all material
respects with the applicable accounting requirements of the
1933 Act and the Rules and Regulations.
iii) They have performed the following limited agreed upon
procedures: (a) read the minutes of meetings of stockholders
and board of directors (if any); (b) read the latest available
interim unaudited financial statements of the General Partner
furnished to them by the General Partner, and agreed the
amounts contained therein to the General Partner 's accounting
records; and (c) inquired of certain officials of the General
Partner who have responsibility for financial and accounting
matters whether (1) the unaudited financial statements
referred to above are stated on a basis substantially
consistent with that of the audited financial statements
included in the registration statement and (2) there was any
change in the capital stock, increase in long-term debt or any
decrease in net current assets or stockholders' equity of the
General Partner as compared with amounts shown in the
unaudited balance sheet included in the registration
statement; and acknowledging that the foregoing procedures do
not constitute an audit conducted in accordance with generally
accepted auditing standards and no representations are made
regarding the sufficiency of the foregoing procedures. Had
additional procedures been performed or an audit or a review
were conducted other matters might have come to their
attention that would have been reported to them.
(e) All documents required to be delivered to the Selling Agent by the
General Partner on the Initial Closing Date, or any subsequent date,
have been delivered in form and substance satisfactory to the Selling
Agent and its counsel.
8. Termination.
(a) If at least 1,000 Units have not been sold to the public prior to
the conclusion of the Initial Offering Period specified in Section
3(a), above, this Agreement shall be terminated at the Initial Closing
Date (as hereinafter defined in Section 8(d)). Otherwise this Agreement
shall be terminated at the Final Closing Date (as hereinafter defined
in Section 8(d)).
(b) Until such time as this Agreement shall terminate pursuant to
subsection (a), above, this Agreement may be terminated by the Selling
Agent, at the Selling Agent's option, by giving notice to the Fund and
the General Partner, if:
i) There shall have been, since the respective dates as of
which information is given in the Registration Statement, any
material adverse change in the condition, financial or
otherwise, of the Fund or
14
the General Partner, which change in the judgment of the
Selling Agent shall render it inadvisable to proceed with the
offering and sale of the Units; or
ii) Any event shall occur which, in the opinion of counsel for
the Selling Agent, should be set forth in the Registration
Statement, the Prospectus or the Statement of Additional
Information in order to make the statements therein not
misleading, and the Fund does not concur and fails or refuses
to amend or supplement the Registration Statement, the
Prospectus or the Statement of Additional Information promptly
after written request by the Selling Agent to it to do so; or
iii) Any of the conditions specified in Section 7 hereof shall
not have been fulfilled when and as required by this Agreement
to be fulfilled; or
iv) There shall have been an outbreak of hostilities between
the United States and any foreign sovereign, or there shall
have occurred any insurrection or other armed conflict
involving the United States which, in the opinion of the
Selling Agent, makes it impractical or inadvisable to offer or
sell the Units.
(c) In addition to subsection 8(b), above, this Agreement may be
terminated by written agreement between the Selling Agent and the
General Partner or the Fund. The termination of this Agreement for any
reason set forth in this Section 8 shall not affect the obligations of
the Fund contained in Section 6 hereof.
(d) The "Initial Closing Date" shall be a date mutually selected by the
Selling Agent and the General Partner that shall be on a business day
prior to the last day of the Initial Offering Period and subsequent to
the business day in which the proceeds from at least 1,000 Units have
been deposited in the escrow account established by the Fund. The
initial closing shall be held on the date mutually agreed to by the
Selling Agent and the General Partner. Subsequent closing dates (each a
"Subsequent Closing Date") shall be determined by agreement between the
Selling Agent and the General Partner. The "Final Closing Date" shall
be the earlier of the sale of all of the Units or the last day of the
Initial Offering Period. Each closing shall be held at 10:00 a.m. at
the offices of Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, or at the option of the Fund, at the
offices of the General Partner, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx Xxxxxx,
XX 00000.
9. Indemnification.
(a) The Fund agrees to indemnify and hold harmless the Selling Agent
and the selected dealers and their respective officers, directors,
employees, affiliates and each person who controls the Selling Agent
and the selected dealers from and against any loss, claim, damage,
cost, expense (including, without limitation, attorneys' and
accountants' fees and disbursements), judgments and liabilities
(including, without limitation, civil liabilities under the 1933 Act or
any applicable state securities law) (collectively "Loss") which arises
out of or results from the inclusion in the Registration Statement, the
Prospectus or the Statement of Additional Information of an untrue
statement of a material fact or the omission to state therein a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they
were made, not misleading, and will reimburse any and all persons
15
indemnified herein for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any actions or
claims in respect thereof; provided, however, that no such
indemnification or reimbursement shall be made with respect to the
Selling Agent or its officers, directors, employees, affiliates or
controlling persons for any Loss which results from any violation by
the General Partner or its respective affiliates of the 1933 Act or any
applicable state securities law in connection with the Registration
Statement or the sale of the Units or any untrue statement or omission
of any information or material facts in the Registration Statement or
the Prospectus relating to or concerning the Selling Agent.
(b) The Selling Agent agrees to indemnify and hold harmless the Fund,
the General Partner and their respective officers, directors,
employees, affiliates, partners and controlling persons against any
Loss incurred by them which arises out of or results from the Selling
Agent's failure to deliver the Prospectus, or any amendment or
supplement thereto, as required by the 1933 Act and the rules and
regulations thereunder, or the inclusion in the Registration Statement,
the Prospectus or the Statement of Additional Information of an untrue
statement of a material fact relating to the Selling Agent or the
omission to state a material fact relating to the Selling Agent
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not
misleading.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b), above, of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party or parties under such subsection, notify
the indemnifying party or parties in writing of the commencement
thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and to assume the defense
thereof, with counsel satisfactory to such indemnified party (which
shall include, in the event of conflicts of interest between such
indemnified party and other defendants and/or the availability to such
indemnified party of defenses which are not available to other
defendants, separate counsel for such indemnified party), and after
notice from the indemnifying party to such indemnified party of its
election 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, subsequently incurred by such indemnified party in
connection with the defense thereof.
10. Miscellaneous.
(a) This Agreement is made solely for the benefit of, and shall be
binding upon, the Selling Agent, the Fund and the General Partner and
their respective successors and assigns, and no other person shall have
any right or obligation under this Agreement. The terms "successors"
and "assigns" shall not include any purchasers, as such, of Units.
16
(b) Whenever notice is required by the provisions of this Agreement to
be given, such notice shall be effective only if in writing and delivered
personally or by registered mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Selling Agent, to it at:
Xxxxxxx Xxxxxx & Company Financial Services, Inc.
000 Xxxx Xxxxxx, Xxxxxxxx X
Xxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
With Copy to:
Xxxxxxx & Xxxxx PC
0000 Xxxxx Xxxxxx X.X.
XX XXX 0000
Xxxxx Xxxxxx, XX, 00000-0000
Attention: Xxxxxxx X. XxXxxxxx, Esq.
If to the General Partner or the Fund, to it
at:
Xxxxxxx Asset Management, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
With Copy to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
(c) The Selling Agent and the Selected Dealers sellers are not
authorized by the Fund to give any information or make any
representation in connection with the offering of Units other than
those contained in the Prospectus, the Statement of Additional
Information and such sales literature as has been authorized in writing
by the Fund.
17
(d) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York without giving effect
to the principles of conflict of laws.
Very truly yours,
XXXXXXX DIVERSIFIED FUND, L.P.
By: Xxxxxxx Asset Management, Inc.,
the General Partner
By:
--------------------------------------
Xxxxxx X. Xxxxxxx
President
XXXXXXX ASSET MANAGEMENT, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxxx
President
Accepted and agreed to as of the date first written above:
XXXXXXX XXXXXX & COMPANY FINANCIAL SERVICES, INC.
By:
------------------------------
Name:
Title:
18
Exhibit A
FORM OF OPINION OF XXXXXXXX XXXXX SINGER & XXXXXXXXX, LLP
[____], 2001
Xxxxxxx Xxxxxx & Company Financial Services, Inc.
X.X. Xxx 00000
Xxxxx Xxxxxx, XX 00000-0000
Ladies and Gentlemen:
We have acted as special counsel to Xxxxxxx Diversified Fund, LP, a
Delaware limited partnership (the "Fund") and Xxxxxxx Asset Management, Inc., a
New York corporation and the general partner of the Fund (the "General Partner")
in connection with the preparation and filing with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "1933 Act"), of a
registration statement on Form S-1 (registration no. 333-46550)(the
"Registration Statement") relating to the issuance and sale by the Fund of a
maximum of 25,000 units of limited partnership interest (the "Units") in the
Fund pursuant to a selling agent agreement dated as of October [___], 2001 (the
"Selling Agent Agreement"), by and among the Fund, the General Partner and you,
as Selling Agent. Capitalized terms used and not otherwise defined herein have
the meanings given to such terms in the Selling Agent Agreement.
In connection therewith, we have examined such records, documents and
questions of law, and satisfied ourselves as to such matters of fact, as we have
considered relevant and necessary as a basis of this opinion. For the purposes
of rendering this opinion, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity and completeness of
all documents submitted to us as originals, the conformity to authentic original
documents of all documents submitted to us as certified, conformed or
photostatic copies, and the authenticity and accurateness of the originals of
such latter documents. In addition, we have assumed that the Units are offered
and sold as described in the Registration Statement and the Selling Agent
Agreement, in substantially the form attached as Exhibit A to the Statement of
Additional Information. As to any facts relevant to such opinions that were not
independently established, we have relied upon factual information and
representations given to us jointly and severally by the Fund and the General
Partner.
With respect to the opinion as to the due formation and valid existence
of the Fund set forth in paragraph 1 of this letter, we have relied solely upon
a certified copy of the Certificate of Limited Partnership of the Fund and a
certificate of good standing of the Fund issued by the Secretary of State of the
State of Delaware.
Based upon the foregoing and subject to the assumptions, qualifications
and limitations set forth below, we are of the opinion that:
1. The Fund has been duly formed and is validly existing in good
standing under the Delaware Revised Uniform Limited Partnership Act
with full power and authority to carry out its obligations under the
Selling Agent Agreement, the Partnership Certificate and to own
properties and conduct business as described in the Prospectus and the
Statement of Additional Information, and the Fund is duly qualified to
conduct business as a foreign limited partnership and is in good
standing in the State of New York.
2. The General Partner has been duly incorporated and is validly
existing in good standing as a corporation under the laws of its state
of incorporation with full power and authority to carry out its
obligations under the Selling Agent Agreement, the Partnership
Certificate and the Limited Partnership Agreement and to conduct its
businesses as described in the Prospectus and the Statement of
Additional Information.
3. The Limited Partnership Agreement has been duly and validly
authorized, executed and delivered by the General Partner and Xxxxxx X.
Xxxxxxx (the "Initial Limited Partner"), and constitutes the legal,
valid and binding obligation of the Partnership and the General
Partner, enforceable in accordance with its terms.
4. The offer and sale of the Units have been duly authorized by the
General Partner on behalf of the Fund.
5. Upon payment for, and when sold and issued in the manner and under
conditions set forth in the Prospectus and the Statement of Additional
Information, the Units will be validly issued, will represent valid
limited partnership interests in the Fund, and will be fully paid and
non-assessable limited partnership interests in the Fund.
6. The Selling Agent Agreement has been duly and validly authorized,
executed and delivered by each of the Partnership and the General
Partner and constitutes the legal, valid and binding obligation of each
of them, enforceable in accordance with its terms.
7. The offer and sale of the Units and the compliance by the Fund with
all of the provisions of the Selling Agent Agreement will not conflict
with or result in a material breach of any of the terms or provisions
of, or constitute a default under, the Partnership Certificate or
Limited Partnership Agreement, or, to our knowledge, any indenture,
mortgage, deed of trust or other instrument or material agreement to
which the Fund is a party or by which it is bound, or any material
statute, order, rule or regulation applicable to the Fund of any court
or other governmental authority.
8. The Registration Statement has become effective under the 1933 Act
and, to our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued nor has any proceeding for
the issuance of such an order been initiated or threatened.
2
9. To our knowledge there is no pending or threatened litigation or
governmental proceedings against the Fund or the General Partner
required to be described in the Registration Statement which are not so
described.
The foregoing opinions are, with your concurrence, subject to the
following qualifications, limitations and assumptions:
(i) The opinions expressed in paragraphs 3 and 6 above are subject to
(1) bankruptcy, insolvency, moratorium, receivership, reorganization,
liquidation and other similar laws relating to or affecting the rights
and remedies of creditors generally, (2) principles of equity
(regardless of whether considered and applied in a proceeding in equity
or at law), (3) the law of fraudulent transfer and conveyance, (4)
limitations on rights to indemnification by federal or state securities
laws or regulations, (5) public policy, (6) applicable law relating to
fiduciary duties, and (7) judicial imposition of an implied covenant of
good faith and fair dealing.
(ii) This opinion is based upon currently existing statutes, rules,
regulations and judicial decisions and is rendered as of the date
hereof, and we disclaim any obligation to advise you of any change in
any of these sources of law or subsequent developments in law or
changes in facts or circumstances that might affect any matters or
opinions set forth herein. Please note that we are expressing an
opinion only as to the matters expressly set forth herein, and no
opinion should be inferred as to any other matters.
(iii) Whenever a statement herein is qualified by the phrase "to our
knowledge", it is intended to indicate that no information that would
give us knowledge of the inaccuracy of such statement has come to the
attention of those attorneys currently in this firm who have rendered
legal services in connection with the representation of the Fund and
the General Partner. We, however, have not undertaken any independent
investigation to determine the accuracy of such statements.
We have participated in conferences with officers of the General
Partner, your representatives, your counsel and Anchin, Block & Anchin LLP, the
independent certified public accountants for the Fund and the General Partner,
at which conferences we made inquiries of such officers, representatives and
accountants and discussed the contents of the Registration Statement, the
Prospectus, the Statement of Additional Information and related matters.
On the basis of the information that was developed in the course of the
performance of the services referred to in the preceding paragraph, considered
in the light of our understanding of the applicable law (including the
requirements of Form S-1 under the 1933 Act and the character of the prospectus
contemplated thereby) and the experience we have gained through our practice
under the 1933 Act, we advised you and hereby confirm that, in our opinion, the
Registration Statement and the Prospectus appear on their face to be
appropriately responsive in all material respects to the requirements of the
1933 Act and the applicable rules and regulations of the Commission thereunder.
Further, nothing that came to our attention in the course of such review has
caused us to believe that the Registration Statement on the Effective Date
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
3
therein, in light of the circumstances under which they were made, not
misleading or the Prospectus at the time it was filed electronically with the
Commission pursuant to Rule 424 contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and nothing that has
come to our attention in the course of our performance of services has caused us
to believe that the Prospectus, as of the date and time of delivery of this
letter, contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
The limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such, however, that we do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or in the Prospectus except insofar as such statements relate to us as
set forth in the Prospectus under the heading "Legal Opinions." We do not
express any opinion or belief as to the financial statements or other financial
or statistical data contained in the Registration Statement or in the
Prospectus.
We express no opinion as to the application of the securities or blue
sky laws of the various states (including the State of Delaware) to the sale of
the Units.
We are members of the Bar of the State of New York and we do not
purport to be experts in, and do not opine with respect to, the laws of any
jurisdiction other than the laws of the State of New York and the Revised
Uniform Limited Partnership Act of the State of Delaware. We understand that
reference to the "Revised Uniform Limited Partnership Act of the State of
Delaware" includes statutory provisions, applicable provisions of the Delaware
Constitution, and reported judicial decisions interpreting these laws.
This opinion letter is based upon currently existing laws, statutes,
rules, ordinances and regulations and judicial decisions, and is rendered as of
the date hereof. We disclaim any obligation to advise you of any changes of any
of these sources of law or subsequent developments in law or changes in facts or
circumstances which might affect any matters or opinions set forth in this
opinion letter. Please note that we are opining only as to the matters expressly
set forth in this opinion letter, and no opinion should be inferred as to other
matters.
This opinion is solely for your benefit and may not be relied upon by
any person or for any other purpose without the prior written consent of this
firm. Without our prior written consent, you are not authorized to release or
quote this letter, or any part thereof, to any third party.
Very truly yours,
4
