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EXHIBIT 1.02
(AMENDED)
XXXXXXXX STRATEGIC ALLOCATION FUND, L.P.
AUXILIARY SELLING AGREEMENT
This Agreement made as of the ________ day of _________________ ,
1999 by and among Xxxxxxxx Strategic Allocation Fund, L.P., a Delaware limited
partnership (the "Partnership"), Xxxxxxxx & Company, Inc. (the "General
Partner") and X. Xxxx, Inc., a ____________________ corporation (the
"Introducing Firm").
W I T N E S S E T H:
WHEREAS, the Introducing Firm desires to introduce certain registered
broker-dealers which are members of the National Association of Securities
Dealers, Inc. (the "Broker-Dealers") to the Partnership to be considered as
potential selling agents of the Partnership; and
WHEREAS, the Partnership and the General Partner wish to have the
Introducing Firm introduce them to certain Broker-Dealers pursuant to the terms
of this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. OFFERING OF UNITS
(a) Appointment
The Partnership hereby appoints the Introducing Firm on a
non-exclusive basis to introduce it to Broker-Dealers which may be interested in
becoming selling agents of the Partnership. The Introducing Firm is not
authorized by this Agreement to offer and sell the Units of the Partnership.
(b) Compensation
In consideration of the Introducing Firm successfully introducing
Broker-Dealers which become selling agents of the Partnership, the General
Partner shall pay the Introducing Firm an amount equal to one-fourth of the
total selling commissions, which would reduce the compensation to such selling
agent by such same amount.
In the event all regulatory approvals are obtained, including from
the NASD, in consideration of the provision by the Introducing Firm of the
additional services specified below in this subsection (b), the General Partner
will pay to the Introducing Firm (provided it represents that it is registered
with the CFTC as a futures commission merchant or introducing broker and is a
member in good standing of the NFA in such capacity) in an amount up to 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
Introducing Firm. Such compensation shall commence at the beginning of the
thirteenth full month after the sale of the Units. The Introducing Firm 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) or
are exempt from such registration.
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The ongoing compensation specified above in this subsection (b)
shall be in consideration of and is contingent upon the provision by the
Introducing Firm 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 or the Broker-Dealer, 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 or the Broker-Dealer, regarding the
commodities markets and the Partnership; (y) assisting, at the request of the
General Partner, in the redemption of Units; and (z) providing such other
services to the owners of Units or the Broker-Dealer as the General Partner may,
from time to time, reasonably request. The Introducing Firm also will 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 Introducing Firm. The Introducing Firm shall
forfeit its rights hereunder to receive any additional compensation 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.
2. UNDERTAKING OF INTRODUCING FIRM
The Introducing Firm will use its best efforts to find eligible
Broker-Dealers to participate as selling agents. In connection therewith, the
Introducing Firm represents, warrants and agrees that it will comply fully with
all applicable laws and the rules of the NASD, the SEC, the CFTC, the securities
or Blue Sky administrators of the several states and various other jurisdictions
and any other applicable regulatory body.
3. REPRESENTATIONS AND WARRANTIES
(a) The General Partner, on behalf of the Partnership, represents
and warrants to the Introducing Firm that:
(i) The Partnership is duly organized and validly existing
as a limited partnership under the laws of the State of Delaware, and has full
power and authority under the Limited Partnership Agreement to conduct its
business to be conducted as described in the Registration Statement and
Prospectus and to issue, sell and deliver the Units.
(ii) The 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.
(b) The General Partner represents and warrants to the Introducing
Firm 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 perform 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, approvals and commodity exchange licenses, 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
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upon it.
(c) The Introducing Firm represents and warrants to the
Partnership and the General Partner:
(i) The Introducing Firm is a corporation duly organized and
validly existing and in good standing under the laws of the State of __________,
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. It 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 its ability to perform its
obligations hereunder.
(ii) The Introducing Firm is in good standing and in
compliance with all applicable broker-dealer registration requirements in the
places where it engages in the activities contemplated herein and all such laws
and applicable rules and regulations of the NASD and other self-regulatory
organizations.
(iii) In particular, and not by way of limitation, the
Introducing Firm represents and warrants that it is aware of NASD Rule 2810 and
that it will comply fully with all the terms thereof to the extent Appendix F
applies to the conduct contemplated herein.
(iv) The Introducing Firm 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. The performance of the
obligations of the Introducing Firm under this Agreement will not violate or
result in a breach of any provisions of its Articles of Incorporation or bylaws
or any agreement, instrument, order, law or regulation binding upon it.
4. INDEMNIFICATION
(a) The General Partner agrees to indemnify and hold harmless the
Introducing Firm 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 do not arise out of or are not
based upon any action or omission of the Introducing Firm constituting
negligence, misconduct, or violation of this Agreement or applicable laws or
regulations.
(b) The Introducing Firm agrees to indemnify and hold harmless the
Partnership and the General Partner to the same extent as the foregoing
indemnity from the General Partner set forth in subsection (a) of this Section 4
(and, in the case of the General Partner, for any indemnity paid by the General
Partner pursuant to subsection (a) of this Section 4), but only insofar as such
losses, claims, damages, costs, expenses, liabilities or actions arise out of or
are based upon acts or omissions of the Introducing Firm constituting
negligence, misconduct or violation of this Agreement or applicable laws or
regulations.
(c) 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.
(d) Any party which proposes to assert the right to be indemnified
under this Section 4 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 4 notify each such
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indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served, and the omission so to notify such
indemnifying party of any such action, suit or proceeding shall relieve it from
any liability which it may have to any indemnified party under this Section 4 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 4. 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.
(e) 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.
5. FEES AND EXPENSES
Each party shall bear all of its expenses under this
Agreement, including fees and disbursements of its counsel.
6. SURVIVAL; SUCCESSORS AND ASSIGNS
The indemnification agreements and the agreements,
representations and warranties herein shall survive termination of the
Agreement.
This Agreement has been and is made solely for the benefit of
the Introducing Firm, the Partnership and the General Partner and their
respective successors and assigns. The term "successors and assigns" shall not
include any purchaser of Units merely because of such purchase. In the event the
registered representative of the Introducing Firm who intends to act on its
behalf as contemplated by this Agreement determines to transfer his registration
to another NASD-member firm, the Introducing Firm agrees to assign all of its
rights to compensation herein with respect to sales of units made after such
transfer of registration to such other member firm.
7. 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.
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8. 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.
9. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the
parties hereto with respect to the subject matter contained herein.
10. 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.
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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X. XXXX, INC.
By:
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