Re: BROOKSHIRETM RAW MATERIALS (U.S.) TRUST PLACEMENT AGREEMENT
Exhibit 10.1
0000 Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
Tel. No. 000-000-0000 Fax No. 000-000-0000
Tel. No. 000-000-0000 Fax No. 000-000-0000
August 29, 2007
Oakbrook Investment Brokers, Inc.
00 X 000 Xxxxxxxxxxx Xx.
Xxxxxxxx Xxxxxxx, XX 00000
00 X 000 Xxxxxxxxxxx Xx.
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
| Re: | BROOKSHIRETM RAW MATERIALS (U.S.) TRUST PLACEMENT AGREEMENT |
Ladies and Gentlemen:
Xxxxxxxxxx Raw Materials Management, LLC, a Delaware limited liability company (the
“Managing Owner”), has caused the formation, on August 17, 2006, of a statutory trust
pursuant to the Delaware Statutory Trust Act (the “Trust Act”), under the name Xxxxxxxxxx
Raw Materials (U.S.) Trust (the “Trust”), for the purpose of engaging in the speculative
trading of commodity futures and forward contracts. CSC Trust Company of Delaware, a Delaware
company (the “Trustee”), is the trustee of the Trust and has delegated substantially all
responsibility for the management of the Trust’s business and affairs to the Managing Owner. The
Amended and Restated Declaration of Trust and Trust Agreement dated as of , 2007 (the
“Trust Agreement”) sets forth the terms of the Trust. Capitalized terms not defined in
this Placement Agreement have the meanings assigned to such terms in the Registration Statement (as
hereinafter defined) and/or the Trust Agreement.
The Trust is currently divided into ten series (each, a “Fund”). Units of beneficial
interest (“Units”) will be issued in each such Fund, as more fully described in the
Registration Statement and the Prospectus (as hereinafter defined). Each Fund will be managed by
the Managing Owner, be separately valued and represent a separate investment portfolio of the
Trust.
The Managing Owner is registered with the Commodity Futures Trading Commission (the
“CFTC”) as a commodity pool operator and a commodity trading adviser under the Commodity
Exchange Act, as amended (the “CE Act”), and is a member of the National Futures
Association (the “NFA”) in such capacity.
The Managing Owner proposes to offer Units to the public and to sell Units to subscribers
acceptable to the Managing Owner (each, a “Subscriber” and collectively, the
“Subscribers”), upon the terms and subject to the conditions set forth in this Placement
Agreement (the “Agreement”), the Registration Statement and the Prospectus (the
“Offering”). The Offering will begin as soon as the Placement Agent (as defined below)
deems it reasonably
advisable on or after the Registration Statement is declared effective by the Securities and
Exchange Commission (the “SEC”).
Oakbrook Investment Brokers, Inc., an Illinois corporation, shall be the initial placement
agent for the Trust (together with any replacement placement agent, the “Placement Agent”).
The Placement Agent may, upon the prior written approval of the Managing Owner, distribute Units
through the use of additional qualified broker-dealers (each, an “Additional Selling
Agent”), pursuant to the terms of an additional selling agent agreement to be entered into
among the Managing Owner, the Trust and the Additional Selling Agent substantially in the form
attached hereto as Exhibit A (each, an “Additional Selling Agent Agreement”). The
Placement Agent and each Additional Selling Agent approved by the Managing Owner that has entered
into an Additional Selling Agent Agreement are hereinafter referred to collectively as “Selling
Agents.”
Each Fund desires to raise capital as herein provided through the sale of Units, and the
Placement Agent hereby agrees to use its best efforts to market Units pursuant to the terms set
forth in this Agreement. Accordingly, the Managing Owner, the Trust and the Placement Agent
hereby, intending to be legally bound, agree as follows:
1. Representations and Warranties of the Managing Owner. The Managing Owner
represents and warrants to the Placement Agent that:
(a) A registration statement on Form S-1 for the Trust and the Funds, and as a part thereof a
combined prospectus for all Funds with respect to all of the Units being offered (which
registration statement together with all amendments thereto, at the time and in the form declared
effective by the SEC is referred to herein as the “Registration Statement,” and which
prospectus in final form, together with all amendments and supplements thereto, is referred to
herein as the “Prospectus”), prepared in accordance with the applicable requirements of the
Securities Act of 1933, as amended (the “1933 Act”), the CE Act, and the rules, regulations
and instructions promulgated under the 1933 Act and the CE Act, respectively, has been filed with
the SEC, the National Association of Securities Dealers, Inc. (the “NASD”) and the NFA
pursuant to the 1933 Act and the CE Act and the rules and regulations promulgated, respectively,
thereunder, as well as the rules and regulations of the NASD and the NFA, in the form heretofore
delivered to the Placement Agent.
(b) When the Registration Statement becomes effective under the 1933 Act, the Registration
Statement and the Prospectus will contain all material statements and information required to be
included therein by the 1933 Act and the CE Act and the rules and regulations, respectively,
thereunder, as well as the rules and regulations of the NASD and the NFA, and will conform in all
material respects to the requirements of the 1933 Act and the CE Act and the rules and regulations,
respectively, thereunder, as well as the rules and regulations of the NASD and the NFA, and 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 (with respect to the Prospectus, in
light of the circumstances in which they were made) not misleading; provided,
however, that no representation and warranty is made with respect to information furnished
in writing to the Trust or the Managing Owner by the Placement Agent or by any Additional Selling
Agent.
(c) To the knowledge of the Managing Owner, no order (a “Stop Order”) (i) preventing
or suspending the effectiveness of the Registration Statement or use of the Prospectus
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or any amendment or supplement thereto, (ii) refusing to permit the effectiveness of the
Registration Statement, or (iii) suspending the registration or qualification of any Units, has
been issued by the SEC, the CFTC, the NASD, the NFA, the “blue sky” or securities authority of any
state, or any other federal, state or other governmental agency or body, nor has any of such
authorities instituted or, to the knowledge of the Managing Owner, threatened to institute, any
proceedings with respect to a Stop Order.
(d) The Trust was duly formed and is validly existing as a statutory trust in good standing
under the Trust Act, with full power and authority, and all necessary authorizations, approvals and
orders of and from all federal, state and other governmental or regulatory officials and bodies, to
carry out its obligations under this Agreement, its certificate of trust (the “Trust
Certificate”) and the Trust Agreement, and to own its properties and conduct its business as
described in the Prospectus.
(e) The Managing Owner and each of its principals and employees have, and will continue to
have for so long as it is the Managing Owner, all federal and state governmental, regulatory,
self-regulatory and commodity exchange approvals and licenses, and the Managing Owner (either by
itself or through its principals and employees) has effected all filings and registrations with
federal and state governmental, regulatory or self-regulatory agencies required to conduct its
business and to act as described in the Registration Statement and Prospectus or required to
perform its or their obligations as described under the Trust Agreement (including, without
limitation, registration as a commodity pool operator under the Commodity Act and membership in the
NFA as a “commodity pool operator” and as a “commodity trading adviser”), except in each case as
would not be reasonably likely to have a Material Adverse Effect on the Managing Owner, the Trust
or any Fund.
(f) The Managing Owner is a limited liability company duly formed, validly existing, and in
good standing under the laws of Delaware, with full power and authority, and all necessary
consents, authorizations, approvals, orders, licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and other governmental authorities and
all courts and other tribunals, to own, lease, license, and use its properties and assets and to
carry on its business, in all material respects, in the manner described in the Prospectus. The
Managing Owner is duly qualified to do business and is in good standing in each jurisdiction in
which its ownership, leasing, licensing, or use of property and assets or the conduct of its
business makes such qualification necessary or advisable, except where the failure to be so
qualified would not have a material adverse effect on any of the operations, business, properties
or assets of the Managing Owner.
(g) Each of the Managing Owner and the Trust has all requisite power and authority to execute,
deliver, and perform its respective obligations under this Agreement. This Agreement has been duly
and validly authorized, executed and delivered by the Managing Owner and the Trust and constitutes
a valid and binding agreement of each of the foregoing, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally.
(h) The Managing Owner, the Trust and each Fund has the power and authority to enter into the
contractual obligations and agreements referred to in the Prospectus (it being understood and
agreed that this representation does not cover this Agreement and the Additional Selling Agent
Agreements). None of (x) the offer and sale of the Units, (y) the execution and delivery of this
Agreement or (z) compliance by the Managing Owner or the Trust
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with the provisions of this Agreement, will conflict with, or result in a breach of any of the
terms or provisions of, or result in a default under, (i) any order of the SEC, the NASD, the CFTC
or the NFA; (ii) the Trust Certificate, the Trust Agreement or the limited liability company
agreement of the Managing Owner; (iii) any indenture, mortgage, deed of trust, loan agreement,
other evidence of indebtedness or other agreement or instrument to which the Trust, a Fund or the
Managing Owner is a party or by which their properties or assets are bound, except in the case of
this clause (iii) of an agreement or instrument that would not have a material adverse effect on
any of the operations, business, properties or assets of any of the foregoing; or (iv) to their
knowledge, any applicable statute or any order, rule or regulation of any court or of any federal,
state or other governmental or regulatory agency or body having jurisdiction over the Trust, a Fund
or the Managing Owner or any of their properties; nor will any such actions result in the
imposition of any lien, charge or encumbrance upon any of the property or assets of the Trust, a
Fund or the Managing Owner.
(i) The offer and sale of Units have been duly authorized by all necessary action on the part
of the Managing Owner and the Trust. The Units to be offered for sale pursuant to the Offering
have been validly authorized and, when issued and delivered in accordance with this Agreement, will
be validly issued, fully paid and nonassessable, and will constitute valid units of beneficial
interest in the Trust which, when the Registration Statement becomes effective under the 1933 Act,
will conform in all material respects to the description thereof contained in the Prospectus. The
liability of each Limited Owner will be limited as set forth in the Prospectus and the Trust
Agreement, and no Limited Owner will be subject to personal liability for the debts, obligations or
liabilities of the Trust or the applicable Fund by reason of his being a Limited Owner other than
as described in the Prospectus and the Trust Agreement.
(j) No consent, approval, authorization, order, registration or qualification of or with any
court or any federal, state or other governmental or regulatory agency or body is required for the
issuance and sale of Units or the consummation of the transactions contemplated by this Agreement,
except for the registration of Units under the 1933 Act, submission of the Prospectus to the SEC,
NASD, NFA, the continued registration of the Managing Owner under the CE Act as a commodity pool
operator and commodity trading advisor and membership by the Managing Owner in the NFA in such
capacities, and such consents, approvals, authorizations, orders, registrations or qualifications
as may be required by securities or state “blue sky” laws in connection with the offer and sale of
Units.
(k) There is no litigation, arbitration, claim, governmental or other proceeding or
investigation pending, or, to the knowledge of the Managing Owner, threatened, with respect to the
Managing Owner, the Trust or any Fund, or any of their operations, businesses, properties or
assets, except as described in the Registration Statement or Prospectus or such as would not, if
successful, have a material adverse effect upon the operations, businesses, properties or assets of
the Managing Owner, the Trust or any Fund, as the case may be. None of the Managing Owner, the
Trust or any Fund is in violation in any material respect of any law, rule, regulation, order,
judgment or decree, except as described in the Registration Statement or Prospectus or as would not
have a material adverse effect upon the operations, business, properties or assets of the Managing
Owner, the Trust or any Fund.
(l) The Managing Owner is not, nor, to the knowledge of the Managing Owner, is any other
party, in violation or breach of, or in default with respect to, any material provision of any
written contract, agreement, instrument, lease, license or legally binding
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understanding (“Contract”) which is material to the Managing Owner and which relates
to the Trust or the Offering; and each such Contract is in full force and is the legal, valid, and
binding obligation of the Managing Owner and/or the Trust and is enforceable as to the Managing
Owner and/or the Trust in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally.
The Managing Owner has no knowledge that any party to any such Contract has any current intention
of canceling, not renewing or not performing with respect thereto. The Managing Owner enjoys
peaceful and undisturbed possession under all leased property from which operations related to the
Trust or the Offering are conducted. The Managing Owner is not in violation or breach of, or in
default with respect to, any term of its certificate of formation or operating agreement.
(m) When the Registration Statement becomes effective under the 1933 Act, each Contract
required to be (i) described in the Registration Statement or the Prospectus will be properly
described therein and (ii) filed as an exhibit to the Registration Statement will be filed with the
SEC as an exhibit to the Registration Statement.
(n) The financial statements of the Managing Owner and the Trust contained in the Registration
Statement and the Prospectus have been examined by an independent registered public accounting
firm, as required by the CE Act and the 1933 Act and the rules and regulations of the CFTC and the
SEC, respectively, and when the Registration Statement becomes effective under the 1933 Act, fairly
present in all material respects the financial condition and the results of operations thereof as
of the dates and for the periods therein specified; and such financial statements have been
prepared in accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved; and no other financial statements are
required by Form S-1 to be included in the Registration Statement or the Prospectus.
(o) Neither the Managing Owner, nor, to the knowledge of the Managing Owner, any manager,
member, director, officer, agent, employee, or other person associated with or acting on behalf of
the Managing Owner has, directly or indirectly, (i) used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from funds of the Managing Owner; (iii) violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended or (iv) made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment.
(p) Subsequent to the respective dates as of which information is given in the Registration
Statement and the Prospectus, and except as described in the Registration Statement or Prospectus,
the Trust has not (i) issued any securities or incurred any liability or obligation, primary or
contingent, for borrowed money; (ii) entered into any material transaction not in the ordinary
course of business or (iii) declared or paid any dividend on its capital stock.
(q) Except as may be set forth in the Registration Statement, Prospectus, this Agreement or
any Additional Selling Agent Agreement, neither the Trust nor any Fund has incurred any liability
for a fee, commission or other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement.
(r) Except as contemplated by the Offering, this Agreement or any Additional Selling Agent
Agreement or as may have been waived, no Person has any right of first refusal,
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preemptive right, right to any compensation, or other similar right or option, in connection
with the Offering or this Agreement, or any of the transactions contemplated hereby or thereby.
(s) Except as may be set forth in the Registration Statement or Prospectus or as may have been
waived, no Person has the right to require registration of Units or other securities of the Company
upon the filing or effectiveness of the Registration Statement.
2. Representations and Warrants of the Placement Agent. The Placement Agent
represents and warrants to the Trust, each Fund and the Managing Owner that:
(a) It has all necessary corporate power and authority to enter into this Agreement, to
consummate the transactions contemplated by this Agreement, and to perform its obligations
hereunder.
(b) It is a corporation duly organized and validly existing under the laws of the State of
Illinois; it is duly authorized to execute this Agreement and to perform its obligations hereunder;
and the execution and delivery of this Agreement, the consummation of the transactions herein
contemplated and the performance of its obligations hereunder, will not violate, conflict with, or
constitute a default under, (i) the organizational documents of the Placement Agent; (ii) any
Contract to which the Placement Agent is a party or by which its assets are bound or (iii) any
judgment, decree, order or, to the knowledge of the Placement Agent, any statue, rule or
regulation, applicable to the Placement Agent.
(c) This Agreement has been duly and validly authorized, executed and delivered by the
Placement Agent and is a valid and binding agreement of the Placement Agent enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors’ rights and remedies generally.
(d) The information contained in the Registration Statement and Prospectus relating to the
Placement Agent is complete and correct and does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein not misleading.
(e) It is a member of the NASD, and is in compliance with all material rules and regulations
applicable to the Placement Agent generally and, to its knowledge, applicable to the Placement
Agent’s participation in the Offering, and it is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and under the securities laws of the
states in which Units will be offered or sold by it. It is not subject to any order or regulation
which in any way relates to any violation of law or which could otherwise preclude it fulfilling
its duties contemplated hereby and it has not committed any act nor is it, its Affiliates or other
persons associated with it the subject of administrative, civil, or criminal actions (so-called
“bad boy” provisions) of any state “blue sky” law.
(f) It will deliver or cause to be delivered to each prospective subscriber, prior to any
submission by such person of a written offer relating to the purchase of Units, a copy of the
Prospectus, as it may have been most recently amended or supplemented by the Managing Owner or the
Trust.
(g) In compliance with the NASD Conduct Rules, it will not sell Units to discretionary
accounts without prior specific written approval of the customer in whose name such account is
being maintained.
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(h) It will not take any action which would cause the Offering to violate the provisions of
the 1933 Act, the Exchange Act, the CE Act, the respective rules and regulations promulgated
thereunder, or applicable “blue sky” laws of any state or jurisdiction.
3. Offering and Sale of Units.
(a) Subject to the terms and conditions, and on the basis of the representations, warranties
and covenants set forth in this Agreement, the Managing Owner, the Trust and each Fund hereby
appoint the Placement Agent as the initial exclusive selling agent with respect to the Offering,
and the Placement Agent agrees to use its best efforts to procure Subscribers for Units in one or
more Initial Funds during the Initial Offering Period and the Continuous Offering Period on the
terms and conditions set forth in the Prospectus and in the Trust Agreement. For the avoidance of
doubt, except for Units as described in the Prospectus, no other securities (including, but not
limited to, beneficial interests in other commodity pools) that may be offered by the Trust, any
Fund or the Managing Owner, from time to time, shall be subject to this Agreement, and the
Placement Agent shall have no right to commissions, on-going trailing fees or any other
compensation with respect to such other securities.
(b) The Placement Agent’s agreement to use its best efforts to find acceptable Subscribers
shall not prevent it from acting as a selling agent or underwriter for the securities of other
issuers, including Affiliates, which may be offered or sold during the term of this Agreement.
(c) The Placement Agent shall keep, and make available to the Managing Owner upon request, a
complete ledger in hard copy and computerized form of all Subscribers, which shall include (i) the
exact name, address and social security or employer identification number of each Subscriber, (ii)
the amount invested by each Subscriber, (iii) the number and type of Units subscribed for by each
Subscriber, and (iv) if there is more than one party to the subscription, the holding method
(e.g., joint tenant, tenants in common, etc.) of the joint Subscribers.
(d) The Placement Agent may propose Additional Selling Agents to the Managing Owner. Each
such Additional Selling Agent shall be a member of the NASD, shall be registered as a broker-dealer
under the Exchange Act, and shall comply with such additional registration requirements as may be
required by the states in which it will market Units. Each Additional Selling Agents shall
distribute Units pursuant to the terms of the applicable Additional Selling Agent Agreement.
(e) In recommending to any Person the purchase or sale of Units, the Placement Agent will (x)
use its best efforts to ensure that an investment in the applicable Fund is a suitable and
appropriate investment for such Person, on the basis of information obtained from such Person
concerning his investment objectives, such Person’s other investments, such Person’s financial
situation and needs, any other information known by the Placement Agent through the review of its
offeree questionnaire completed by such Person and relevant “blue sky” laws; and (y) maintain in
its files for at least six (6) years documents disclosing the basis upon which the determination of
suitability was reached as to each such Person. The Placement Agent shall review each Subscription
Agreement to ensure it is completed and executed properly (checking, among other things, the name,
address and social security number of the Subscriber). The Placement Agent shall also make sure
that each Subscriber’s check is properly made payable to the escrow account for the correct amount
as provided in the Subscription Agreement, or that
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the applicable wire transfer has been received by the escrow account for the correct amount as
provided in the Subscription Agreement.
(f) During the period when the Prospectus is required to be delivered under the 1933 Act, the
Placement Agent shall promptly notify the Managing Owner upon discovery of any material untrue or
misleading statement regarding it or its operations, or of the occurrence of any event or change in
circumstances which would result in there being any material untrue or misleading statement or a
material omission in the Prospectus or Registration Statement regarding it or its operations, or
result in the Prospectus not including all information relating to the Placement Agent required
under applicable rules, regulations or laws.
(g) Each party understands and agrees that no subscription will be deemed final and binding on
any new Subscriber until at least five (5) Business Days after the date the Subscriber receives the
Prospectus. In connection therewith, the Placement Agent agrees to indicate in each Subscription
Agreement submitted to the Managing Owner by the Placement Agent the date on which the Prospectus
was delivered to that Subscriber. The Placement Agent agrees to ensure that at least five (5)
Business Days after the date the Subscriber receives the Prospectus have passed before the
Placement Agent accepts any Subscription Agreement from such Subscriber.
(h) During the Initial Offering Period and the Continuous Offering Period for each Fund, all
home offices or branch offices of the Placement Agent shall forward Subscription Agreements to the
Managing Owner no later than noon of the first Business Day following receipt of an duly completed,
executed and acceptable Subscription Agreement from a Subscriber.
(i) The Placement Agent shall instruct all subscribers and prospective subscribers to make
checks for subscriptions payable to the order of the Escrow Agent or to send wire transfers for
subscriptions directly to the Escrow Agent, in each case to the account(s) specified in the Escrow
Agreement. Any checks or wire transfers payable to any other party shall be returned. The
Placement Agent shall promptly, upon receipt of any and all checks, drafts, and money orders
received from prospective subscribers of Units, transmit the same together with a copy of the
executed Subscription Agreement, stating among other things, the name of the purchaser, current
address, and the amount and form (i.e., whether consideration received was in the form of a check,
draft or money order) the of the investment, to the Escrow Agent by noon of the next Business Day
after the Managing Owner receives the executed Subscription Agreement, which such Subscription
Agreement the Placement Agent shall forward to the Managing Owner no later than noon of the next
Business Day following receipt of the check by the Placement Agent. Any check returned unpaid to
the Escrow Agent shall be returned to the Placement Agent. The Managing Owner shall accept or
reject subscriptions to the Funds in accordance with the terms of Section 3.04 of the Trust
Agreement. The Managing Owner shall have sole responsibility for determining whether Persons are
qualified to become Limited Owners and for accepting subscriptions and determining their validity.
4. Fees and Expenses.
(a) Subject to the last sentence of Section 4(d), for each sale of Units by a Selling
Agent to a Subscriber that is accepted by the Managing Owner, the applicable Fund will pay a
subscription fee (the “Subscription Fee”) equal to 0.5% to 3.0% of the gross offering
proceeds from such sale which Subscription Fee shall be negotiated within this range by the
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Selling Agent and the Subscriber at the time of the sale of Units by the Selling Agent to the
Subscriber. The Selling Agent shall notify the Managing Owner in writing regarding the
Subscription Fee to be charged to a prospective Subscriber when the Selling Agent submits the
Subscription Agreement for such prospective Subscriber to the Managing Owner. For the avoidance of
doubt, no Subscription Fee shall be payable in respect of rejected subscriptions. If no
Subscription Fee is indicated on a Subscription Agreement with a Subscriber, the Subscription Fee
will be 3.0% of the gross offering proceeds from such sale.
(b) The Subscription Fee shall be payable within 30 days after the later of (i) the date the
Managing Owner accepts a subscription and receives the required written notice regarding the
Subscription Fee from the Selling Agent and (ii) the Initial Closing of the Fund for which Units
are being subscribed.
(c) For each sale of Units by a Selling Agent to a Subscriber that is accepted by the Managing
Owner, the applicable Fund will also pay to such Selling Agent the Trailing Fee, as and when
specified in the Trust Agreement; provided, that no further Trailing Fees shall be payable
from and after such time as the Trailing Fees theretofore paid in respect of such Units, when added
together with the Subscription Fees paid in respect of such Units, are equal to or exceed 10% of
the purchase price of such Units. Subject to the last sentence of Section 4(d), a Selling
Agent may not waive the Trailing Fee applicable to a subscription for Units.
(d) Trailing Fees will be paid to Selling Agents for on-going services to Limited Owners on a
continuous basis which may include, without limitation, advising Limited Owners of the net asset
values of the Trust, of relevant Funds, and of Units in such Funds; responding to Limited Owners’
inquiries about monthly statements and annual reports and tax information provided to them;
advising Limited Owners whether to make additional capital contributions to the Trust or to redeem
their Units; assisting with redemptions of Units; providing information to Limited Owners with
respect to futures and forward market conditions; and providing further services which may be
requested by Limited Owners. Accordingly, a Selling Agent otherwise entitled to Trailing Fees will
not be entitled to receipt thereof for any month during which (i) the Selling Agent does not
provide such ongoing services, or (ii) the Selling Agent or the registered representative who is
otherwise receiving such Trailing Fees is not properly registered with the CFTC or any other
required federal, state or local entity. No Subscription Fees or Trailing Fees shall be paid on
Units sold to the Managing Owner or any of its members, principals or Affiliates.
(e) In the event that the offering of Units of any Fund is terminated prior to the Initial
Closing for such Fund, no Selling Agent shall be entitled to any compensation in connection with
the offering of Units of such Fund, whether or not such Selling Agent shall theretofore have
procured Subscribers for such Fund.
(f) The Managing Owner and each Selling Agent are each aware of the limitations imposed by the
NASD Rules of Fair Practice on the aggregate compensation which may be received by a Selling Agent
in connection with the offering and sale of Units. Accordingly, no Selling Agent will in any event
accept Trailing Fees from and after such time as the Trailing Fees theretofore paid in respect of
such Units, when added together with the Subscription Fees paid in respect of such Units, are equal
to or exceed 10% of the purchase price of such Units.
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5. Covenants of the Managing Owner, the Trust and each Fund. Each of the Managing
Owner, the Trust and each Fund covenant to and agree with the Placement Agent to:
(a) Use their respective reasonable best efforts to cause the Registration Statement to become
effective as promptly as possible. If filing of the Prospectus is required under Rule 424(b) of
the Regulations, the Managing Owner will file the Prospectus, properly completed, pursuant to Rule
424(b) of the Regulations within the time period prescribed and will provide evidence satisfactory
to the Placement Agent of such timely filing.
(b) Notify the Placement Agent immediately (i) when the Registration Statement and any
amendment to the Registration Statement becomes effective or any supplement to the Prospectus is
filed, (ii) of the receipt of any further comments from the SEC, CFTC, NFA or any other federal or
state regulatory or self-regulatory body with respect to the Registration Statement, (iii) of any
request by the SEC, CFTC, NFA or any other federal or state regulatory or self-regulatory body for
any further amendment to the Registration Statement or any amendment or further supplement to the
Prospectus, (iv) of any material criminal, civil or administrative or investigative proceedings
against or involving the Managing Owner, the Trust or any Fund, (v) of the issuance by the SEC,
CFTC, NFA or any other federal or state regulatory or self-regulatory body of any order suspending
(A) the effectiveness of the Registration Statement under the 1933 Act, (B) the registration or NFA
membership of the Managing Owner as a “commodity pool operator” or “commodity trading adviser”; or
(C) the registration of Units under the “blue sky” or securities laws of any state or other
jurisdiction, (vi) any order or decree enjoining the offering or the use of the then-current
Prospectus or any promotional material, or (vii) of any threatened action of the type referred to
in clauses (iii) through (vi) of which the Managing Owner becomes aware. In the event any order of
the type referred to in clause (v) or (vi) is issued, the Managing Owner agrees to use its
reasonable best efforts to attempt to obtain a lifting or rescinding of such order at the earliest
feasible date.
(c) During the period when the Prospectus is required to be delivered pursuant to the 1933
Act, comply with all requirements imposed upon them by the 1933 Act, the SEC regulations, the CE
Act and the CFTC regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of Units during such period in accordance with the provisions hereof and as
set forth in the Prospectus.
(d) If any event shall occur as a result of which it is necessary, in the reasonable opinion
of the Managing Owner, to amend or supplement the Prospectus (i) to make the Prospectus not
materially misleading in the light of the circumstances existing at the time it is delivered to a
Subscriber, or (ii) to conform with applicable CFTC or SEC regulations, notify the Placement Agent
and promptly prepare and file with the SEC an appropriate amendment or supplement which will
correct such statement or omission or which will effect such compliance and will use its reasonable
best efforts to have any such amendment declared effective as soon as reasonably possible.
(e) Deliver or cause to be delivered without charge to the Placement Agent such number of
copies of the Prospectus as may reasonably be requested by the Placement Agent; and as soon as the
Registration Statement or any amendment thereto becomes effective, or a supplement thereto is
filed, to deliver or cause to be delivered without charge to the Placement Agent two (2) copies of
the Registration Statement or such amendment thereto, including exhibits, as the case may be, and
two (2) copies of any supplement thereto; and to deliver or cause to be delivered without charge to
the Placement Agent such number of copies of
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the Prospectus, the Registration Statement, and amendments and supplements thereto, if any,
without exhibits, as the Placement Agent may reasonably request for the purposes contemplated by
the 1933 Act.
(f) Endeavor in good faith and in cooperation with the Placement Agent, at or prior to the
time the Registration Statement becomes effective, to qualify Units for offering and sale under the
“blue sky” or securities laws of such jurisdictions as the Placement Agent may designate and the
Managing Owner shall agree. In each jurisdiction where such qualification shall be effected, the
Managing Owner will, unless the Placement Agent agrees in writing that such action is not at the
time necessary or advisable, file and make such statements or reports at such times as are or may
be required by the laws of such jurisdiction and will keep all filings current.
(g) Use its best efforts to keep the Prospectus and the Registration Statement current and
effective by filing post-effective amendments, as necessary, during the Offering.
(h) Invest the net proceeds received by it from the Offering in the manner set forth in the
Prospectus.
(i) Comply with all registration, filing, and reporting requirements of the Exchange Act which
may from time to time be applicable to the Trust.
(j) Comply with all undertakings contained in the Registration Statement.
(k) When and if required, file on a timely basis with the SEC an appropriate form to register
the Units pursuant to Section 12(g) under the Exchange Act.
6. Covenants of the Placement Agent. The Placement Agent covenants to and agrees with
the Managing Owner, the Trust and each Fund to:
(a) Make a best efforts public offering of the Units as soon as the Placement Agent deems it
reasonably advisable on or after the Effective Date (as defined in Section 11(a)), upon and
subject to the terms and conditions contained in this Agreement and in compliance with all
applicable securities laws, and to perform all of its responsibilities hereunder.
(b) Preserve the confidentiality of any proprietary or non-public information or data provided
to the Placement Agent by the Managing Owner.
(c) Fully disclose to prospective subscribers the capacity in which the Placement Agent is
contacting them and the Placement Agent’s relationship with the Managing Owner.
(d) Not make an offer to sell or solicit an offer to buy or sell Units in a state or other
jurisdiction until the Managing Owner has notified the Placement Agent that the Units have been so
registered or qualified, or are exempt from registration or qualification, with the securities
authorities in such state or other jurisdiction.
(e) Maintain in full force and effect, and cause its personnel involved in the activities
contemplated hereunder to maintain in full force and effect, all governmental, regulatory and
self-regulatory registrations, approvals, memberships and licenses required to perform its
obligations under this Agreement and to receive compensation therefor (including but
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not limited to registration as a broker-dealer with the SEC, membership in the NASD,
registration with the relevant regulatory authority in each state in which the Selling Agent will
solicit prospective subscribers, registration with the CFTC as an futures commission merchant or
introducing broker and membership in the NFA) during the term of this Agreement and for such time
as the Placement Agent and such personnel shall receive compensation hereunder.
(f) Comply with the applicable requirements of the 1933 Act (including the delivery of a
Prospectus to each prospective subscriber as required by the 1933 Act), the Exchange Act, the CE
Act, the rules and regulations promulgated thereunder, and the rules and regulations of the NASD,
CFTC, and NFA, including, without limitation (i) determining suitability of a purchase of Units for
each prospective subscriber through the use of an offeree questionnaire, (ii) obtaining a written
agreement from each prospective subscriber to purchase Units setting forth the identity and
quantity of the Units to be purchased and (iii) delivering a Prospectus to a prospective subscriber
at least five (5) Business Days prior to any purchase of Units.
(g) Not, and not permit any Person acting on its behalf to, (i) provide any information or
make any representations relating to the Managing Owner, any Fund, the Trust or the Offering other
than as contained in the Prospectus, or (ii) state that it is authorized to act as agent for the
Managing Owner, any Fund or the Trust for any purpose other than as expressly set forth in this
Agreement.
(h) Not take any of the following actions against the Trust or any Fund: (1) seek a decree or
order by a court having jurisdiction in the premises (A) for relief in respect of the Trust or any
Fund in an involuntary case or proceeding under the United States Bankruptcy Code or any other
federal or state bankruptcy, insolvency, reorganization, rehabilitation, liquidation or similar
law, or (B) adjudging the Trust or any Fund bankrupt or insolvent, or seeking reorganization,
rehabilitation, liquidation, arrangement, adjustment or composition of or in respect of the Trust
or any Fund under the United States Bankruptcy Code or any other applicable federal or state law,
or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or any Fund or of any substantial part of any of their respective
properties, or ordering the winding up or liquidation of any of its affairs; (2) seek a petition
for relief, reorganization or to take advantage of any law referred to in the preceding clause; or
(3) file an involuntary petition for bankruptcy (collectively, a “Bankruptcy or Insolvency
Action”).
(i) For any obligations due and owing to it by any Fund, look solely and exclusively to the
assets of such Fund or the Managing Owner (solely to the extent of the General Units owned by the
Managing Owner in such Fund), if the Managing Owner has liability in its capacity as Managing
Owner, to satisfy the Placement Agent’s claims, and not seek to attach or otherwise assert a claim
against the other assets of the Trust or any other Fund, whether or not there is a Bankruptcy or
Insolvency Action taken. The parties agree that this provision will survive the termination of
this Agreement, whether terminated in a Bankruptcy or Insolvency Action or otherwise.
7. Compliance with NASD Rules and General Laws.
(a) It is understood that the Placement Agent has no commitment with regard to the sale of
Units other than to use its best efforts and to comply with the provisions of this Agreement and
the Trust Agreement. In connection with the offer, sale and distribution of Units, the Selling
Agent represents and warrants that it will comply fully with all applicable laws and
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regulations, and the rules, policy statements and interpretations of the SEC, the NASD, the
CFTC, the NFA, state securities administrators and any other regulatory or self-regulatory body.
In particular, and not by way of limitation, the Placement Agent represents and warrants that it is
familiar with Rule 2810 of the NASD Conduct Rules and that it will comply fully with all the terms
thereof in connection with the Offering and sale of Units. The Placement Agent will not execute
any sales of Units from a discretionary account over which it has control without prior written
approval of the customer in whose name such discretionary account is being maintained.
(b) The Placement Agent agrees not to recommend the purchase of Units to any Person unless the
Placement Agent shall have reasonable grounds to believe, on the basis of information obtained from
the Person concerning, among other things, the Person’s investment objectives, other investments,
financial situation and needs, that: (1) (to the extent relevant for the purposes of Rule 2810 and
giving due consideration to the fact that the Trust and each Fund is in no respects a “tax
shelter”) the Person is or will be in a financial position appropriate to enable the Person to
realize to a significant extent the benefits of the applicable Fund, including the tax benefits (if
any) described in the Prospectus; (2) the Person has a fair market net worth sufficient to sustain
the risks inherent in participating in the applicable Fund; (3) the Person satisfies the
requirements to become a Subscriber on the basis set forth in the Prospectus, the Subscription
Agreement and the state suitability requirements contained therein; (4) acceptance of the Person’s
subscription will not otherwise breach any laws, rules and regulations designed to avoid money
laundering applicable to either the Selling Agent, the Managing Owner, the Trust and each Fund; and
(5) the Units are otherwise a suitable investment for the Person. The Placement Agent agrees to
maintain such records as are required by the applicable rules of the NASD, SEC, CFTC and the NFA
for purposes of determining investor suitability for the time periods otherwise required by the
SEC, NASD, CFTC and NFA. In connection with making the foregoing representations and warranties,
the Placement Agent further represents and warrants that it has, among other things, examined the
Prospectus including, without limitation the sections listed below and obtained such additional
information from the Managing Owner regarding the information set forth thereunder as the Placement
Agent has deemed necessary or appropriate to determine whether the Prospectus adequately and
accurately discloses all material facts relating to an investment in the applicable Funds and
provides an adequate basis to Persons for evaluating an investment in the Units: “RISK FACTORS”;
“BREAK-EVEN ANALYSIS”; “DESCRIPTION OF THE TRUST, TRUSTEE, MANAGING OWNER AND AFFILIATES”; “OTHER
PRIVATE ACCOUNTS AND POOLS”; “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS”; “ACTUAL AND POTENTIAL CONFLICTS OF INTEREST”; “CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS”; “FEES AND EXPENSES”; “THE OFFERING”; “WHO MAY SUBSCRIBE”; “SUMMARY OF
MATERIAL AGREEMENTS”; and “MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS.”
In connection with making the representations and warranties set forth in this section, the
Placement Agent has not relied on inquiries made by or on behalf of any other parties.
(c) The Placement Agent agrees to inform all prospective subscribers of Units of all pertinent
facts relating to the liquidity and marketability of Units as set forth in the Prospectus.
(d) The Placement Agent represents and warrants that it is familiar with Rule 2710 of the NASD
Conduct Rules and covenants and agrees with the Trust, each Fund and the
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Managing Owner that it will comply fully with all the terms thereof in connection with the
Offering and sale of the Units.
(e) The Placement Agent represents, warrants and covenants that it: (1) maintains anti-money
laundering policies and procedures that comply with the Bank Secrecy Act of 1970, as amended, and
applicable federal anti-money laundering regulations, including policies and procedures to verify
the identity of prospective subscribers (“AML Laws, Regulations and Policies”); (2)
complies with AML Laws, Regulations and Policies; (3) will promptly deliver to the Managing Owner,
to the extent permitted by applicable law, notice of any AML Laws, Regulations and Policies
violation, suspicious activity, suspicious activity investigation or filed suspicious activity
report that relates to any prospective subscriber for Units; and (4) will cooperate with the
Managing Owner and deliver information reasonably requested by the Managing Owner concerning
Subscribers that purchased Units sold by the Placement Agent necessary for the Managing Owner or
the Trust to comply with AML Laws, Regulations and Policies.
(f) The Placement Agent agrees that the Managing Owner has not assumed, nor will it assume,
any responsibility or obligation concerning the Placement Agent’s right to act as broker-dealer
with respect to the Units in any jurisdiction.
8. Conditions of Placement Agent’s Obligations.
(a) The obligations of the Placement Agent to undertake the placement of Units as provided
herein shall be subject (unless waived by the Placement Agent) to the continuing accuracy of the
representations and warranties of the Managing Owner, the Trust and the Funds contained herein, to
the performance by the Managing Owner, the Trust and the Funds of their respective obligations
hereunder and to the following conditions:
(i) The Registration Statement shall have become effective, and the Placement 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 or any similar
purpose shall have been initiated or threatened by the SEC, the NASD, the NFA, or the CFTC;
and all requests for additional information on the part of the SEC, the NASD, the NFA and
the CFTC, shall have been complied with to the reasonable satisfaction of the Placement
Agent and its counsel; and
(ii) The NASD, upon review of the terms of the Offering, shall not have objected to the
Placement Agent’s participation in the Offering or its compensation therefrom.
(b) The occurrence of the Initial Closing shall be subject (unless waived by the Placement
Agent) to the continuing accuracy of the representations and warranties of the Managing Owner, the
Trust and the Funds contained herein as of and through the Initial Closing, to the performance by
the Managing Owner, the Trust and the Funds of their respective obligations hereunder as of and
through the Initial Closing and to the following conditions:
(i) As of the Initial Closing, the Placement Agent shall have received a certificate of
the chief executive officer and of the chief financial officer of the Managing Owner, dated
the Initial Closing, to the effect that as of the date of this Agreement and as of the
Initial Closing, the representations and warranties of the Managing Owner contained herein
were and are accurate, except as disclosed therein, and
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that as of the Initial Closing, the obligations to be performed by the Managing Owner
and the Trust hereunder on or prior thereto have been fully performed, except as disclosed
therein; and
(ii) The issuance, sale and delivery of Units shall have been made in a manner
reasonably satisfactory in form and substance to the Placement Agent and its counsel.
9. Indemnification and Contribution.
(a) The Placement Agent shall not be liable to any Fund, the Trust, the Trustee or the
Managing Owner for any loss, liability, claim, damage, expense, fine, penalty, cost or expense
(including, without limitation, attorneys’ and accountants’ fees and disbursements), judgment
and/or amount paid in settlement (collectively, “Losses”) caused by any act or omission of
the Placement Agent in connection with the performance of services under this Agreement, except as
a result of (1) acts or omissions to act on the part of the Placement Agent or the officers,
directors, shareholders, principals, members, employees, agents or Affiliates (collectively, the
“Principals and Affiliates”) of the Placement Agent which constitute negligence or
misconduct, or (2) any breach of any of the representations, warranties, covenants or agreements of
the Placement Agent in this Agreement. The Placement Agent hereby agrees to indemnify and hold
harmless each Fund, the Trust, the Trustee, the Managing Owner and the Principals and Affiliates of
each of the foregoing from and against all Losses incurred by any of them arising out of or based
upon any matter for which the Placement Agent is liable under this Section 9(a).
(b) The Managing Owner and each Fund, solely out of the Contracting Fund Assets (as defined
below in Section 14), hereby agrees indemnify and hold harmless the Placement Agent and its
Principals and Affiliates from and against any and all Losses to which such Persons may become
subject arising out of or in connection with (i) this Agreement, (ii) the transactions contemplated
hereby or (iii) the fact that the Placement Agent is or was a selling agent of the Trust and the
Funds, in each case arising out of or based upon (1) any untrue statement of material fact
contained in this Agreement, the Registration Statement, the Prospectus or any application or
written communication executed by the Managing Owner or the Trust filed in any jurisdiction in
order to qualify Units under the securities laws thereof (collectively, the “Documents”),
(2) any omission from the Documents of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (3) any breach of any representation, warranty,
covenant or agreement made by the Managing Owner, the Trust or any Fund in this Agreement, except
to the extent that any such Losses arise out of, relate to, or are based upon any matter (x) for
which the Placement Agent would be liable under Section 9(a) or (y) relating to an
Additional Selling Agent or an Additional Selling Agent Agreement. For the sake of clarity, if a
claim for indemnification relates to a specific Fund, such Fund, and no other Fund, shall be
responsible for indemnifying the Placement Agent and its Principals and Affiliates in accordance
with this Section 9(b).
(c) Indemnification Procedure. The Person(s) making a claim for indemnification under
this Section 9 is/are referred to herein as the “Indemnified Party” and the
Person(s) against whom such claims are asserted under this Section 9 is/are referred to
herein as the “Indemnifying Party.” All claims by an Indemnified Party shall be asserted
and resolved as follows
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(i) In the event that (A) any claim for which an Indemnifying Party would be liable to
an Indemnified Party hereunder is asserted against or sought to be collected from such
Indemnified Party by a third party (a “Third Party Action”) or (B) any Indemnified
Party hereunder should have a claim against any Indemnifying Party hereunder which does not
involve a claim being asserted against or sought to be collected from it by a third party (a
“Direct Action”), the Indemnified Party shall with reasonable promptness notify in
writing the Indemnifying Party of such claim, specifying, to the extent then known to the
Indemnified Party, the basis on which the claim for indemnification is made, the facts
giving rise to or the alleged basis of the claim, and the amount (which may be estimated) of
claim liability (a “Claim Notice”), together with a copy of the document (if any) by
or in which the Third Party Action is commenced or asserted; provided, that any
failure to give such notice shall not constitute a waiver of any rights of the Indemnified
Party except to the extent the rights of the Indemnifying Party are actually prejudiced as
result of such delay or lack of detail.
(ii) Within thirty (30) days after receipt of a Claim Notice, the Indemnifying Party
may (A) by giving written notice thereof to the Indemnified Party, elect to assume the
defense of such Third Party Action at its sole cost and expense or (B) object to the claim
for indemnification set forth in the Claim Notice. The Indemnifying Party shall have the
right to assume control of the defense of or settle or otherwise dispose of such Third Party
Action on such terms as the Indemnifying Party deems appropriate; provided,
however, that (x) the Indemnified Party shall be entitled, at its own expense (which
such expense shall not be deemed to be a Loss), and without unreasonable interference with
the actions of the Indemnifying Party, to participate in the defense of Third Party Actions,
(y) the Indemnified Party shall not have the right to assume control of a Third Party Action
if the Indemnified Party shall have been advised by counsel that, under applicable standards
of professional responsibility, a conflict will arise in the event both the Indemnified
Party and the Indemnified Party are represented by the same counsel with respect to the
Third Party Action, in which case such Indemnified Party shall have the right to be
represented by separate counsel with respect to the matters to which the conflict pertains,
and all Losses in connection therewith shall be reimbursed by the Indemnifying Party from
time to time upon demand of the Indemnified Party; and (z) the Indemnifying Party shall
obtain the prior written consent of the Indemnified Party before entering into any
settlement, compromise, admission or any acknowledgment of the validity of a Third Party
Action or any liability in respect thereof, which consent shall not be unreasonably
withheld; provided, that the Indemnifying Party shall not consent to the entry of
any judgment or enter into any settlement that does not include a complete release of all
claims against each Indemnified Party in respect of such Third Party Action and any related
facts, circumstances or occurrences; and provided, further, that no consent
of the Indemnified Party shall be necessary if the settlement, compromise, admission or any
acknowledgment involves solely the payment of monetary damages that are paid by the
Indemnifying Party.
(iii) Unless the Indemnifying Party objects in writing to a Direct Claim within thirty
(30) days after receipt of the Claim Notice, such Direct Claim shall be conclusively deemed
to be a liability of the Indemnifying Party and the Indemnified Party shall be entitled to
obtain the appropriate number of escrowed shares, in accordance with the terms of the Pledge
Agreement. If the Indemnifying Party objects in writing, such dispute shall be resolved in
accordance with Section 19.
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(d) In the event that a Person seeks indemnification in a Third Party Action covering both
matters for which indemnification is and is not covered hereunder, such Person shall be indemnified
only for the Losses covered hereunder.
(e) None of the indemnifications contained in this Agreement shall be applicable with respect
to default judgments, confessions of judgment or settlements entered into by a Person claiming
indemnification without the prior written consent of the Indemnifying Party.
(f) Notwithstanding the provisions of this Section 9, the Placement Agent shall not be
indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of
federal or state securities Laws unless (i) there has been a successful adjudication on the merits
of each count involving alleged securities Law violations as to the particular Indemnitee, (ii)
such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction
as to the particular Indemnitee or (iii) a court of competent jurisdiction approves a settlement of
the claims against a particular Indemnitee and finds that indemnification of the settlement and
related costs should be made.
(g) In any claim for indemnification for federal or state securities Law violations, the
person seeking indemnification shall place before the court the position of the SEC and the
position of any other applicable state securities division which requires disclosure with respect
to the issue of indemnification for securities law violations.
(h) The indemnification provisions of this Agreement shall survive the termination of this
Agreement. The indemnification agreements in this Section 9 shall be in addition to any
liability which the Placement Agent may otherwise have. Nothing contained in this Section
9 or elsewhere in this Agreement shall be construed as an admission that the Placement Agent is
an “underwriter” of the Units within the meaning of the 1933 Act.
10. Representations and Agreements to Survive Delivery. All representations,
warranties, covenants, and agreements contained in this Agreement or contained in certificates or
documents delivered pursuant to this Agreement shall be deemed to be representations, warranties,
covenants, and agreements at the Effective Date (defined below), and shall survive until the
earlier of (i) the termination of the Continuous Offering Period, or (ii) the termination of this
Agreement (with those Sections specified in Section 12 surviving indefinitely).
11. Effectiveness of Agreement; Term and Termination.
(a) This Agreement shall become effective at 9:30 a.m., New York time, on the first full
Business Day following the date the Registration Statement becomes effective with the SEC (the
“Effective Date”). Unless terminated earlier as set forth in the remainder of this
Section 11, this Agreement shall terminate with respect to a Fund at the conclusion of the
Continuous Offering Period for such Fund (with those Sections specified in Section 12
surviving indefinitely).
(b) The Placement Agent may terminate this Agreement with respect to the Trust or any Fund(s)
upon 30 days’ advance written notice to the applicable Fund(s), the Trust and the Managing Owner,
in the event (i) there has 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 applicable Fund(s), the Trust or the Managing Owner which, in the reasonable judgment of the
Placement Agent, renders it inadvisable to proceed with the Offering;
-17-
(ii) the Registration Statement and/or the Prospectus has not been amended reasonably promptly
after written request by the Placement Agent for it to be so amended because an event has occurred
which, in the reasonable opinion of securities counsel for the Placement Agent, should be set forth
in the Registration Statement or the Prospectus in order to make the statements therein not
misleading; (iii) there has been a general suspension of, or a general limitation on prices for,
trading in commodity futures or option contracts on commodity exchanges in the United States or
other commodities instruments, or there is any other national or international calamity or crisis
in the financial markets of the United States to the extent that it is determined by the Placement
Agent, in its reasonable discretion, that such limitations would materially impede the Trust’s or
the applicable Fund’s trading activities or make the offering or delivery of Units impossible or
impractical; or (iv) there has been a declaration of a banking moratorium by federal, New York or
Delaware authorities.
(c) The Managing Owner, the Trust and/or the Fund(s) (solely with respect to such Fund(s)) may
terminate this Agreement for any or no reason upon 15 days’ advance written notice to the Placement
Agent; provided, that in the event this Agreement is terminated only with respect to
certain Funds, this Agreement shall remain in full force and effect with respect to the remaining
Funds, the Trust and the Managing Owner.
12. Survival. Notwithstanding that this Agreement shall not become effective, shall
terminate or shall otherwise not be carried out, Sections 3(c), 4, 6(b),
6(c), 6(g), 6(h), 6(i) and 9 through 20 shall
survive and remain in full force and effect.
13. Limitation of Limited Owner Liability. This Agreement has been made and executed
by and on behalf of the Funds, the Trust and the Managing Owner. The obligations of the Funds, the
Trust and/or the Managing Owner set forth herein are not binding upon any of the Limited Owners
individually but are binding only upon the assets and property identified herein. No resort shall
be had to the assets of other Funds or the Limited Owners’ assets or personal property, for the
satisfaction of any obligation or claim hereunder.
14. Subordination of Certain Claims and Rights. Each of the Managing Owner and the
Placement Agent agrees and consents (the “Consent”) to look solely to the applicable Fund
(the “Contracting Fund”) and its assets (the “Contracting Fund Assets”) for
payment. The Contracting Fund Assets include only those funds and other assets that are paid, held
or distributed to the Trust on account of and for the benefit of the Contracting Fund, including,
without limitation, funds delivered to the Trust for the purchase of Units in a Fund. In
furtherance of the Consent, each of the Managing Owner and the Placement Agent agrees that any
debts, liabilities, obligations, indebtedness, expenses and claims of any nature and of all kinds
and descriptions (collectively, “Claims”) incurred, contracted for or otherwise existing
arising from, related to or in connection with the Trust and its assets and the Contracting Fund
and the Contracting Fund Assets, shall be subject to the following limitations:
(a) Except as set forth below, the Claims, if any, of the Managing Owner and the Placement
Agent (the “Subordinated Claims”) incurred, contracted for or otherwise existing, arising
from, related to or in connection with the Contracting Fund and the Contracting Fund Assets and the
assets of the Trust shall be expressly subordinate and junior in right of payment to any and all
other Claims against the Trust and the Contracting Fund and any of their respective assets which
may arise as a matter of Law or pursuant to any Contract; provided, however, that
bona fide Claims of either the Managing Owner or the Placement Agent, if any, against the
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Contracting Fund shall be pari passu and equal in right of repayment and distribution with all
other bona fide Claims against the Contracting Fund;
(b) The Managing Owner and the Placement Agent will not take, demand or receive from any Fund
or the Trust or any of their respective assets (other than the Contracting Fund or its assets) any
payment for the Subordinated Claims, except in accordance with this Section 14;
(c) Subject to this Section 14, the Claims of the Managing Owner and the Placement
Agent with respect to the Contracting Fund shall only be asserted and enforceable against the
Contracting Fund’s assets and the Managing Owner and its assets, and shall not be asserted or
enforceable for any reason whatsoever against the assets of any other Fund or the Trust generally;
(d) If the Claims of the Managing Owner or the Placement Agent against the Contracting Fund or
the Trust are secured in whole or in part, each of the Managing Owner and the Placement Agent
hereby waives (under section 1111(b) of the Bankruptcy Code (11 U.S.C. § 1111(b)) any right to have
any deficiency Claims (which deficiency Claims may arise in the event such security is inadequate
to satisfy such Claims) treated as unsecured Claims against the Trust or any other Fund, as the
case may be;
(e) In furtherance of the foregoing, if and to the extent that the Managing Owner and/or the
Placement Agent receive monies in connection with the Subordinated Claims from a Fund or the Trust
(or their respective assets) other than the Contracting Fund or the Managing Owner and their
respective assets and except as permitted by this Section 14, the Managing Owner and/or the
Placement Agent, as the case may be, shall be deemed to hold such monies in trust and shall
promptly remit such monies to the Fund or the Trust that paid such amounts for distribution by such
Fund or the Trust in accordance with the terms hereof; and
(f) The provisions of this Section 14 shall apply at all times notwithstanding that
the Claims are satisfied, and notwithstanding that the agreements in respect of such Claims are
terminated, rescinded or canceled.
15. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or
by Federal Express, Express Mail or similar overnight delivery or courier service or delivered (in
person or by telecopy, telex or similar telecommunications equipment) against receipt to the party
to whom it is to be given, (i) if to the Managing Owner, the Trust or the Funds, at 0000 Xxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Chief Executive Officer; with a copy to: Xxxxxxx
& Xxxxxx LLP, 000 Xxxx 00 Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx X. Xxxxxx, Esq.; (ii) if to the Placement Agent, 00 X 000 Xxxxxxxxxxx Xx., Xxxxxxxx Xxxxxxx,
XX 00000, Attention: The President; or (iii) in either case, to such other address as the party
shall have furnished in writing in accordance with the provisions of this Section 15. Any
notice or other communication given shall be deemed given at the time of receipt by the intended
recipient party thereof.
16. Binding Agreement. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Funds, the Trust, the Managing Owner, the Placement Agent (and solely with
respect to indemnification or contribution, those persons and entities referred to in Section
9 who are entitled to indemnification or contribution), and their respective successors, and
assigns (which shall not include any prospective subscriber or Subscriber for Units), and no other
Person
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shall have or be construed to have any legal or equitable right, remedy, or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
17. Invalidity. If any term or provision in this Agreement shall be held to be
illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or
provision or part shall to that extent be deemed not to form part of this Agreement but the
enforceability of the remainder of this Agreement shall not be affected.
18. Governing Law. This Agreement shall be construed in accordance with the laws of
Delaware, without giving effect to its conflict of law principles.
19. Consent to Jurisdiction. All disputes arising out of this Agreement and any
document or instrument delivered pursuant to, in connection with or simultaneously with this
Agreement, including the interpretation, breach or termination of any of the foregoing, shall be
resolved exclusively through the state and Federal courts situated of Delaware. The parties hereby
submit to the exclusive jurisdiction and venue for any such dispute in such courts, as well as to
all appellate courts to which an appeal may be taken from such trial courts. Each of the parties
expressly waives, to the fullest extent permitted by law, the right to move to dismiss or transfer
any action brought in such courts on the basis of any objection to personal jurisdiction, venue or
inconvenient forum in any of such courts.
20. Fund Disclaimer. Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge and agree that the Trust is organized in series pursuant to Sections
3804(a) and 3806(b)(2) of the Trust Act. As such, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to each series of the Trust shall be
enforceable against the assets of such series of the Trust only, and not against the assets of the
Trust generally or the assets of any other series of the Trust or against the Trustee. There may
be several series of the Trust created pursuant to the Trust Agreement.
21. Assignment. This Agreement may not be assigned, novated or otherwise transferred
by operation of law or otherwise by any party without the prior written consent of all of the other
parties, which consent shall not be unreasonably withheld. Any change of control of a party shall
be deemed an assignment of this Agreement that requires the prior written consent of the other
parties. For purposes of this Agreement, “change of control” means any merger, consolidation, sale
of all or substantially all of the assets or sale of a substantial block of stock, of a party. Any
such assignment, novation or transfer by one party not in accordance with this provision shall be a
material breach of this Agreement and shall be grounds for immediate termination thereof by the
non-breaching parties, in addition to any other remedies that may be available under this Agreement
or at law or in equity to the non-breaching parties.
22. Integration. This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
23. Counterparts. This Agreement may be executed in several counterparts, and all so
executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that
all the parties are not signatory to the original or the same counterpart.
24. Captions. Section and paragraph captions contained in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit, or extend or
describe the scope of this Agreement or the intent of any provision hereof.
-20-
If the foregoing correctly sets forth the understanding between the Placement Agent and the
Managing Owner and the Trust, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Yours very truly,
| XXXXXXXXXX RAW MATERIALS (U.S.) TRUST |
XXXXXXXXXX RAW MATERIALS MANAGEMENT, LLC |
|||||||||
By: |
Xxxxxxxxxx Raw Materials Management, LLC | By: | /s/ Xxxx X. Xxxxxxxx | |||||||
| Managing Owner | Name: Xxxx X. Xxxxxxxx | |||||||||
| Title: Chief Executive Officer and Manager | ||||||||||
By: |
/s/ Xxxx X. Xxxxxxxx | |||||||||
| Name: Xxxx X. Xxxxxxxx | ||||||||||
| Title: Chief Executive Officer and Manager | ||||||||||
Accepted and agreed as of the date first written above:
| OAKBROOK INVESTMENT BROKERS, INC. | ||||||||
By:
|
/s/ Xxxxxx X. Xxxxxxx | |||||||
| Name: Xxxxxx X. Xxxxxxx | ||||||||
| Title: President | ||||||||
EXHIBIT A
FORM OF ADDITIONAL SELLING AGENT AGREEMENT
[On the following pages]
0000 Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
Tel. No. 000-000-0000 Fax No. 000-000-0000
Tel. No. 000-000-0000 Fax No. 000-000-0000
August 29, 2007
Oakbrook Investment Brokers, Inc.
00 X 000 Xxxxxxxxxxx Xx.
Xxxxxxxx Xxxxxxx, XX 00000
00 X 000 Xxxxxxxxxxx Xx.
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Re:
|
BROOKSHIRETM RAW MATERIALS (U.S.) TRUST | |
| PLACEMENT AGREEMENT |
Ladies and Gentlemen:
Xxxxxxxxxx Raw Materials Management, LLC, a Delaware limited liability company (the
“Managing Owner”), has caused the formation, on August 17, 2006, of a statutory trust
pursuant to the Delaware Statutory Trust Act (the “Trust Act”), under the name Xxxxxxxxxx
Raw Materials (U.S.) Trust (the “Trust”), for the purpose of engaging in the speculative
trading of commodity futures and forward contracts. CSC Trust Company of Delaware, a Delaware
company (the “Trustee”), is the trustee of the Trust and has delegated substantially all
responsibility for the management of the Trust’s business and affairs to the Managing Owner. The
Amended and Restated Declaration of Trust and Trust Agreement dated as of ______ ___, 2007 (the
“Trust Agreement”) sets forth the terms of the Trust. Capitalized terms not defined in
this Placement Agreement have the meanings assigned to such terms in the Registration Statement (as
hereinafter defined) and/or the Trust Agreement.
The Trust is currently divided into ten series (each, a “Fund”). Units of beneficial
interest (“Units”) will be issued in each such Fund, as more fully described in the
Registration Statement and the Prospectus (as hereinafter defined). Each Fund will be managed by
the Managing Owner, be separately valued and represent a separate investment portfolio of the
Trust.
The Managing Owner is registered with the Commodity Futures Trading Commission (the
“CFTC”) as a commodity pool operator and a commodity trading adviser under the Commodity
Exchange Act, as amended (the “CE Act”), and is a member of the National Futures
Association (the “NFA”) in such capacity.
The Managing Owner proposes to offer Units to the public and to sell Units to subscribers
acceptable to the Managing Owner (each, a “Subscriber” and collectively, the
“Subscribers”), upon the terms and subject to the conditions set forth in this Placement
Agreement (the “Agreement”), the Registration Statement and the Prospectus (the
“Offering”). The Offering will begin as soon as the Placement Agent (as defined below)
deems it reasonably
advisable on or after the Registration Statement is declared effective by the Securities and
Exchange Commission (the “SEC”).
Oakbrook Investment Brokers, Inc., an Illinois corporation, shall be the initial placement
agent for the Trust (together with any replacement placement agent, the “Placement Agent”).
The Placement Agent may, upon the prior written approval of the Managing Owner, distribute Units
through the use of additional qualified broker-dealers (each, an “Additional Selling
Agent”), pursuant to the terms of an additional selling agent agreement to be entered into
among the Managing Owner, the Trust and the Additional Selling Agent substantially in the form
attached hereto as Exhibit A (each, an “Additional Selling Agent Agreement”). The
Placement Agent and each Additional Selling Agent approved by the Managing Owner that has entered
into an Additional Selling Agent Agreement are hereinafter referred to collectively as “Selling
Agents.”
Each Fund desires to raise capital as herein provided through the sale of Units, and the
Placement Agent hereby agrees to use its best efforts to market Units pursuant to the terms set
forth in this Agreement. Accordingly, the Managing Owner, the Trust and the Placement Agent
hereby, intending to be legally bound, agree as follows:
1. Representations and Warranties of the Managing Owner. The Managing Owner
represents and warrants to the Placement Agent that:
(a) A registration statement on Form S-1 for the Trust and the Funds, and as a part thereof a
combined prospectus for all Funds with respect to all of the Units being offered (which
registration statement together with all amendments thereto, at the time and in the form declared
effective by the SEC is referred to herein as the “Registration Statement,” and which
prospectus in final form, together with all amendments and supplements thereto, is referred to
herein as the “Prospectus”), prepared in accordance with the applicable requirements of the
Securities Act of 1933, as amended (the “1933 Act”), the CE Act, and the rules, regulations
and instructions promulgated under the 1933 Act and the CE Act, respectively, has been filed with
the SEC, the National Association of Securities Dealers, Inc. (the “NASD”) and the NFA
pursuant to the 1933 Act and the CE Act and the rules and regulations promulgated, respectively,
thereunder, as well as the rules and regulations of the NASD and the NFA, in the form heretofore
delivered to the Placement Agent.
(b) When the Registration Statement becomes effective under the 1933 Act, the Registration
Statement and the Prospectus will contain all material statements and information required to be
included therein by the 1933 Act and the CE Act and the rules and regulations, respectively,
thereunder, as well as the rules and regulations of the NASD and the NFA, and will conform in all
material respects to the requirements of the 1933 Act and the CE Act and the rules and regulations,
respectively, thereunder, as well as the rules and regulations of the NASD and the NFA, and 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 (with respect to the Prospectus, in
light of the circumstances in which they were made) not misleading; provided,
however, that no representation and warranty is made with respect to information furnished
in writing to the Trust or the Managing Owner by the Placement Agent or by any Additional Selling
Agent.
(c) To the knowledge of the Managing Owner, no order (a “Stop Order”) (i) preventing
or suspending the effectiveness of the Registration Statement or use of the Prospectus
-2-
or any amendment or supplement thereto, (ii) refusing to permit the effectiveness of the
Registration Statement, or (iii) suspending the registration or qualification of any Units, has
been issued by the SEC, the CFTC, the NASD, the NFA, the “blue sky” or securities authority of any
state, or any other federal, state or other governmental agency or body, nor has any of such
authorities instituted or, to the knowledge of the Managing Owner, threatened to institute, any
proceedings with respect to a Stop Order.
(d) The Trust was duly formed and is validly existing as a statutory trust in good standing
under the Trust Act, with full power and authority, and all necessary authorizations, approvals and
orders of and from all federal, state and other governmental or regulatory officials and bodies, to
carry out its obligations under this Agreement, its certificate of trust (the “Trust
Certificate”) and the Trust Agreement, and to own its properties and conduct its business as
described in the Prospectus.
(e) The Managing Owner and each of its principals and employees have, and will continue to
have for so long as it is the Managing Owner, all federal and state governmental, regulatory,
self-regulatory and commodity exchange approvals and licenses, and the Managing Owner (either by
itself or through its principals and employees) has effected all filings and registrations with
federal and state governmental, regulatory or self-regulatory agencies required to conduct its
business and to act as described in the Registration Statement and Prospectus or required to
perform its or their obligations as described under the Trust Agreement (including, without
limitation, registration as a commodity pool operator under the Commodity Act and membership in the
NFA as a “commodity pool operator” and as a “commodity trading adviser”), except in each case as
would not be reasonably likely to have a Material Adverse Effect on the Managing Owner, the Trust
or any Fund.
(f) The Managing Owner is a limited liability company duly formed, validly existing, and in
good standing under the laws of Delaware, with full power and authority, and all necessary
consents, authorizations, approvals, orders, licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and other governmental authorities and
all courts and other tribunals, to own, lease, license, and use its properties and assets and to
carry on its business, in all material respects, in the manner described in the Prospectus. The
Managing Owner is duly qualified to do business and is in good standing in each jurisdiction in
which its ownership, leasing, licensing, or use of property and assets or the conduct of its
business makes such qualification necessary or advisable, except where the failure to be so
qualified would not have a material adverse effect on any of the operations, business, properties
or assets of the Managing Owner.
(g) Each of the Managing Owner and the Trust has all requisite power and authority to execute,
deliver, and perform its respective obligations under this Agreement. This Agreement has been duly
and validly authorized, executed and delivered by the Managing Owner and the Trust and constitutes
a valid and binding agreement of each of the foregoing, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally.
(h) The Managing Owner, the Trust and each Fund has the power and authority to enter into the
contractual obligations and agreements referred to in the Prospectus (it being understood and
agreed that this representation does not cover this Agreement and the Additional Selling Agent
Agreements). None of (x) the offer and sale of the Units, (y) the execution and delivery of this
Agreement or (z) compliance by the Managing Owner or the Trust
-3-
with the provisions of this Agreement, will conflict with, or result in a breach of any of the
terms or provisions of, or result in a default under, (i) any order of the SEC, the NASD, the CFTC
or the NFA; (ii) the Trust Certificate, the Trust Agreement or the limited liability company
agreement of the Managing Owner; (iii) any indenture, mortgage, deed of trust, loan agreement,
other evidence of indebtedness or other agreement or instrument to which the Trust, a Fund or the
Managing Owner is a party or by which their properties or assets are bound, except in the case of
this clause (iii) of an agreement or instrument that would not have a material adverse effect on
any of the operations, business, properties or assets of any of the foregoing; or (iv) to their
knowledge, any applicable statute or any order, rule or regulation of any court or of any federal,
state or other governmental or regulatory agency or body having jurisdiction over the Trust, a Fund
or the Managing Owner or any of their properties; nor will any such actions result in the
imposition of any lien, charge or encumbrance upon any of the property or assets of the Trust, a
Fund or the Managing Owner.
(i) The offer and sale of Units have been duly authorized by all necessary action on the part
of the Managing Owner and the Trust. The Units to be offered for sale pursuant to the Offering
have been validly authorized and, when issued and delivered in accordance with this Agreement, will
be validly issued, fully paid and nonassessable, and will constitute valid units of beneficial
interest in the Trust which, when the Registration Statement becomes effective under the 1933 Act,
will conform in all material respects to the description thereof contained in the Prospectus. The
liability of each Limited Owner will be limited as set forth in the Prospectus and the Trust
Agreement, and no Limited Owner will be subject to personal liability for the debts, obligations or
liabilities of the Trust or the applicable Fund by reason of his being a Limited Owner other than
as described in the Prospectus and the Trust Agreement.
(j) No consent, approval, authorization, order, registration or qualification of or with any
court or any federal, state or other governmental or regulatory agency or body is required for the
issuance and sale of Units or the consummation of the transactions contemplated by this Agreement,
except for the registration of Units under the 1933 Act, submission of the Prospectus to the SEC,
NASD, NFA, the continued registration of the Managing Owner under the CE Act as a commodity pool
operator and commodity trading advisor and membership by the Managing Owner in the NFA in such
capacities, and such consents, approvals, authorizations, orders, registrations or qualifications
as may be required by securities or state “blue sky” laws in connection with the offer and sale of
Units.
(k) There is no litigation, arbitration, claim, governmental or other proceeding or
investigation pending, or, to the knowledge of the Managing Owner, threatened, with respect to the
Managing Owner, the Trust or any Fund, or any of their operations, businesses, properties or
assets, except as described in the Registration Statement or Prospectus or such as would not, if
successful, have a material adverse effect upon the operations, businesses, properties or assets of
the Managing Owner, the Trust or any Fund, as the case may be. None of the Managing Owner, the
Trust or any Fund is in violation in any material respect of any law, rule, regulation, order,
judgment or decree, except as described in the Registration Statement or Prospectus or as would not
have a material adverse effect upon the operations, business, properties or assets of the Managing
Owner, the Trust or any Fund.
(l) The Managing Owner is not, nor, to the knowledge of the Managing Owner, is any other
party, in violation or breach of, or in default with respect to, any material provision of any
written contract, agreement, instrument, lease, license or legally binding
-4-
understanding (“Contract”) which is material to the Managing Owner and which relates
to the Trust or the Offering; and each such Contract is in full force and is the legal, valid, and
binding obligation of the Managing Owner and/or the Trust and is enforceable as to the Managing
Owner and/or the Trust in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally.
The Managing Owner has no knowledge that any party to any such Contract has any current intention
of canceling, not renewing or not performing with respect thereto. The Managing Owner enjoys
peaceful and undisturbed possession under all leased property from which operations related to the
Trust or the Offering are conducted. The Managing Owner is not in violation or breach of, or in
default with respect to, any term of its certificate of formation or operating agreement.
(m) When the Registration Statement becomes effective under the 1933 Act, each Contract
required to be (i) described in the Registration Statement or the Prospectus will be properly
described therein and (ii) filed as an exhibit to the Registration Statement will be filed with the
SEC as an exhibit to the Registration Statement.
(n) The financial statements of the Managing Owner and the Trust contained in the Registration
Statement and the Prospectus have been examined by an independent registered public accounting
firm, as required by the CE Act and the 1933 Act and the rules and regulations of the CFTC and the
SEC, respectively, and when the Registration Statement becomes effective under the 1933 Act, fairly
present in all material respects the financial condition and the results of operations thereof as
of the dates and for the periods therein specified; and such financial statements have been
prepared in accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved; and no other financial statements are
required by Form S-1 to be included in the Registration Statement or the Prospectus.
(o) Neither the Managing Owner, nor, to the knowledge of the Managing Owner, any manager,
member, director, officer, agent, employee, or other person associated with or acting on behalf of
the Managing Owner has, directly or indirectly, (i) used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from funds of the Managing Owner; (iii) violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended or (iv) made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment.
(p) Subsequent to the respective dates as of which information is given in the Registration
Statement and the Prospectus, and except as described in the Registration Statement or Prospectus,
the Trust has not (i) issued any securities or incurred any liability or obligation, primary or
contingent, for borrowed money; (ii) entered into any material transaction not in the ordinary
course of business or (iii) declared or paid any dividend on its capital stock.
(q) Except as may be set forth in the Registration Statement, Prospectus, this Agreement or
any Additional Selling Agent Agreement, neither the Trust nor any Fund has incurred any liability
for a fee, commission or other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement.
(r) Except as contemplated by the Offering, this Agreement or any Additional Selling Agent
Agreement or as may have been waived, no Person has any right of first refusal,
-5-
preemptive right, right to any compensation, or other similar right or option, in connection
with the Offering or this Agreement, or any of the transactions contemplated hereby or thereby.
(s) Except as may be set forth in the Registration Statement or Prospectus or as may have been
waived, no Person has the right to require registration of Units or other securities of the Company
upon the filing or effectiveness of the Registration Statement.
2. Representations and Warrants of the Placement Agent. The Placement Agent
represents and warrants to the Trust, each Fund and the Managing Owner that:
(a) It has all necessary corporate power and authority to enter into this Agreement, to
consummate the transactions contemplated by this Agreement, and to perform its obligations
hereunder.
(b) It is a corporation duly organized and validly existing under the laws of the State of
Illinois; it is duly authorized to execute this Agreement and to perform its obligations hereunder;
and the execution and delivery of this Agreement, the consummation of the transactions herein
contemplated and the performance of its obligations hereunder, will not violate, conflict with, or
constitute a default under, (i) the organizational documents of the Placement Agent; (ii) any
Contract to which the Placement Agent is a party or by which its assets are bound or (iii) any
judgment, decree, order or, to the knowledge of the Placement Agent, any statue, rule or
regulation, applicable to the Placement Agent.
(c) This Agreement has been duly and validly authorized, executed and delivered by the
Placement Agent and is a valid and binding agreement of the Placement Agent enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors’ rights and remedies generally.
(d) The information contained in the Registration Statement and Prospectus relating to the
Placement Agent is complete and correct and does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein not misleading.
(e) It is a member of the NASD, and is in compliance with all material rules and regulations
applicable to the Placement Agent generally and, to its knowledge, applicable to the Placement
Agent’s participation in the Offering, and it is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and under the securities laws of the
states in which Units will be offered or sold by it. It is not subject to any order or regulation
which in any way relates to any violation of law or which could otherwise preclude it fulfilling
its duties contemplated hereby and it has not committed any act nor is it, its Affiliates or other
persons associated with it the subject of administrative, civil, or criminal actions (so-called
“bad boy” provisions) of any state “blue sky” law.
(f) It will deliver or cause to be delivered to each prospective subscriber, prior to any
submission by such person of a written offer relating to the purchase of Units, a copy of the
Prospectus, as it may have been most recently amended or supplemented by the Managing Owner or the
Trust.
(g) In compliance with the NASD Conduct Rules, it will not sell Units to discretionary
accounts without prior specific written approval of the customer in whose name such account is
being maintained.
-6-
(h) It will not take any action which would cause the Offering to violate the provisions of
the 1933 Act, the Exchange Act, the CE Act, the respective rules and regulations promulgated
thereunder, or applicable “blue sky” laws of any state or jurisdiction.
3. Offering and Sale of Units.
(a) Subject to the terms and conditions, and on the basis of the representations, warranties
and covenants set forth in this Agreement, the Managing Owner, the Trust and each Fund hereby
appoint the Placement Agent as the initial exclusive selling agent with respect to the Offering,
and the Placement Agent agrees to use its best efforts to procure Subscribers for Units in one or
more Initial Funds during the Initial Offering Period and the Continuous Offering Period on the
terms and conditions set forth in the Prospectus and in the Trust Agreement. For the avoidance of
doubt, except for Units as described in the Prospectus, no other securities (including, but not
limited to, beneficial interests in other commodity pools) that may be offered by the Trust, any
Fund or the Managing Owner, from time to time, shall be subject to this Agreement, and the
Placement Agent shall have no right to commissions, on-going trailing fees or any other
compensation with respect to such other securities.
(b) The Placement Agent’s agreement to use its best efforts to find acceptable Subscribers
shall not prevent it from acting as a selling agent or underwriter for the securities of other
issuers, including Affiliates, which may be offered or sold during the term of this Agreement.
(c) The Placement Agent shall keep, and make available to the Managing Owner upon request, a
complete ledger in hard copy and computerized form of all Subscribers, which shall include (i) the
exact name, address and social security or employer identification number of each Subscriber, (ii)
the amount invested by each Subscriber, (iii) the number and type of Units subscribed for by each
Subscriber, and (iv) if there is more than one party to the subscription, the holding method
(e.g., joint tenant, tenants in common, etc.) of the joint Subscribers.
(d) The Placement Agent may propose Additional Selling Agents to the Managing Owner. Each
such Additional Selling Agent shall be a member of the NASD, shall be registered as a broker-dealer
under the Exchange Act, and shall comply with such additional registration requirements as may be
required by the states in which it will market Units. Each Additional Selling Agents shall
distribute Units pursuant to the terms of the applicable Additional Selling Agent Agreement.
(e) In recommending to any Person the purchase or sale of Units, the Placement Agent will (x)
use its best efforts to ensure that an investment in the applicable Fund is a suitable and
appropriate investment for such Person, on the basis of information obtained from such Person
concerning his investment objectives, such Person’s other investments, such Person’s financial
situation and needs, any other information known by the Placement Agent through the review of its
offeree questionnaire completed by such Person and relevant “blue sky” laws; and (y) maintain in
its files for at least six (6) years documents disclosing the basis upon which the determination of
suitability was reached as to each such Person. The Placement Agent shall review each Subscription
Agreement to ensure it is completed and executed properly (checking, among other things, the name,
address and social security number of the Subscriber). The Placement Agent shall also make sure
that each Subscriber’s check is properly made payable to the escrow account for the correct amount
as provided in the Subscription Agreement, or that
-7-
the applicable wire transfer has been received by the escrow account for the correct amount as
provided in the Subscription Agreement.
(f) During the period when the Prospectus is required to be delivered under the 1933 Act, the
Placement Agent shall promptly notify the Managing Owner upon discovery of any material untrue or
misleading statement regarding it or its operations, or of the occurrence of any event or change in
circumstances which would result in there being any material untrue or misleading statement or a
material omission in the Prospectus or Registration Statement regarding it or its operations, or
result in the Prospectus not including all information relating to the Placement Agent required
under applicable rules, regulations or laws.
(g) Each party understands and agrees that no subscription will be deemed final and binding on
any new Subscriber until at least five (5) Business Days after the date the Subscriber receives the
Prospectus. In connection therewith, the Placement Agent agrees to indicate in each Subscription
Agreement submitted to the Managing Owner by the Placement Agent the date on which the Prospectus
was delivered to that Subscriber. The Placement Agent agrees to ensure that at least five (5)
Business Days after the date the Subscriber receives the Prospectus have passed before the
Placement Agent accepts any Subscription Agreement from such Subscriber.
(h) During the Initial Offering Period and the Continuous Offering Period for each Fund, all
home offices or branch offices of the Placement Agent shall forward Subscription Agreements to the
Managing Owner no later than noon of the first Business Day following receipt of an duly completed,
executed and acceptable Subscription Agreement from a Subscriber.
(i) The Placement Agent shall instruct all subscribers and prospective subscribers to make
checks for subscriptions payable to the order of the Escrow Agent or to send wire transfers for
subscriptions directly to the Escrow Agent, in each case to the account(s) specified in the Escrow
Agreement. Any checks or wire transfers payable to any other party shall be returned. The
Placement Agent shall promptly, upon receipt of any and all checks, drafts, and money orders
received from prospective subscribers of Units, transmit the same together with a copy of the
executed Subscription Agreement, stating among other things, the name of the purchaser, current
address, and the amount and form (i.e., whether consideration received was in the form of a check,
draft or money order) the of the investment, to the Escrow Agent by noon of the next Business Day
after the Managing Owner receives the executed Subscription Agreement, which such Subscription
Agreement the Placement Agent shall forward to the Managing Owner no later than noon of the next
Business Day following receipt of the check by the Placement Agent. Any check returned unpaid to
the Escrow Agent shall be returned to the Placement Agent. The Managing Owner shall accept or
reject subscriptions to the Funds in accordance with the terms of Section 3.04 of the Trust
Agreement. The Managing Owner shall have sole responsibility for determining whether Persons are
qualified to become Limited Owners and for accepting subscriptions and determining their validity.
4. Fees and Expenses.
(a) Subject to the last sentence of Section 4(d), for each sale of Units by a Selling
Agent to a Subscriber that is accepted by the Managing Owner, the applicable Fund will pay a
subscription fee (the “Subscription Fee”) equal to 0.5% to 3.0% of the gross offering
proceeds from such sale which Subscription Fee shall be negotiated within this range by the
-8-
Selling Agent and the Subscriber at the time of the sale of Units by the Selling Agent to the
Subscriber. The Selling Agent shall notify the Managing Owner in writing regarding the
Subscription Fee to be charged to a prospective Subscriber when the Selling Agent submits the
Subscription Agreement for such prospective Subscriber to the Managing Owner. For the avoidance of
doubt, no Subscription Fee shall be payable in respect of rejected subscriptions. If no
Subscription Fee is indicated on a Subscription Agreement with a Subscriber, the Subscription Fee
will be 3.0% of the gross offering proceeds from such sale.
(b) The Subscription Fee shall be payable within 30 days after the later of (i) the date the
Managing Owner accepts a subscription and receives the required written notice regarding the
Subscription Fee from the Selling Agent and (ii) the Initial Closing of the Fund for which Units
are being subscribed.
(c) For each sale of Units by a Selling Agent to a Subscriber that is accepted by the Managing
Owner, the applicable Fund will also pay to such Selling Agent the Trailing Fee, as and when
specified in the Trust Agreement; provided, that no further Trailing Fees shall be payable
from and after such time as the Trailing Fees theretofore paid in respect of such Units, when added
together with the Subscription Fees paid in respect of such Units, are equal to or exceed 10% of
the purchase price of such Units. Subject to the last sentence of Section 4(d), a Selling
Agent may not waive the Trailing Fee applicable to a subscription for Units.
(d) Trailing Fees will be paid to Selling Agents for on-going services to Limited Owners on a
continuous basis which may include, without limitation, advising Limited Owners of the net asset
values of the Trust, of relevant Funds, and of Units in such Funds; responding to Limited Owners’
inquiries about monthly statements and annual reports and tax information provided to them;
advising Limited Owners whether to make additional capital contributions to the Trust or to redeem
their Units; assisting with redemptions of Units; providing information to Limited Owners with
respect to futures and forward market conditions; and providing further services which may be
requested by Limited Owners. Accordingly, a Selling Agent otherwise entitled to Trailing Fees will
not be entitled to receipt thereof for any month during which (i) the Selling Agent does not
provide such ongoing services, or (ii) the Selling Agent or the registered representative who is
otherwise receiving such Trailing Fees is not properly registered with the CFTC or any other
required federal, state or local entity. No Subscription Fees or Trailing Fees shall be paid on
Units sold to the Managing Owner or any of its members, principals or Affiliates.
(e) In the event that the offering of Units of any Fund is terminated prior to the Initial
Closing for such Fund, no Selling Agent shall be entitled to any compensation in connection with
the offering of Units of such Fund, whether or not such Selling Agent shall theretofore have
procured Subscribers for such Fund.
(f) The Managing Owner and each Selling Agent are each aware of the limitations imposed by the
NASD Rules of Fair Practice on the aggregate compensation which may be received by a Selling Agent
in connection with the offering and sale of Units. Accordingly, no Selling Agent will in any event
accept Trailing Fees from and after such time as the Trailing Fees theretofore paid in respect of
such Units, when added together with the Subscription Fees paid in respect of such Units, are equal
to or exceed 10% of the purchase price of such Units.
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5. Covenants of the Managing Owner, the Trust and each Fund. Each of the Managing
Owner, the Trust and each Fund covenant to and agree with the Placement Agent to:
(a) Use their respective reasonable best efforts to cause the Registration Statement to become
effective as promptly as possible. If filing of the Prospectus is required under Rule 424(b) of
the Regulations, the Managing Owner will file the Prospectus, properly completed, pursuant to Rule
424(b) of the Regulations within the time period prescribed and will provide evidence satisfactory
to the Placement Agent of such timely filing.
(b) Notify the Placement Agent immediately (i) when the Registration Statement and any
amendment to the Registration Statement becomes effective or any supplement to the Prospectus is
filed, (ii) of the receipt of any further comments from the SEC, CFTC, NFA or any other federal or
state regulatory or self-regulatory body with respect to the Registration Statement, (iii) of any
request by the SEC, CFTC, NFA or any other federal or state regulatory or self-regulatory body for
any further amendment to the Registration Statement or any amendment or further supplement to the
Prospectus, (iv) of any material criminal, civil or administrative or investigative proceedings
against or involving the Managing Owner, the Trust or any Fund, (v) of the issuance by the SEC,
CFTC, NFA or any other federal or state regulatory or self-regulatory body of any order suspending
(A) the effectiveness of the Registration Statement under the 1933 Act, (B) the registration or NFA
membership of the Managing Owner as a “commodity pool operator” or “commodity trading adviser”; or
(C) the registration of Units under the “blue sky” or securities laws of any state or other
jurisdiction, (vi) any order or decree enjoining the offering or the use of the then-current
Prospectus or any promotional material, or (vii) of any threatened action of the type referred to
in clauses (iii) through (vi) of which the Managing Owner becomes aware. In the event any order of
the type referred to in clause (v) or (vi) is issued, the Managing Owner agrees to use its
reasonable best efforts to attempt to obtain a lifting or rescinding of such order at the earliest
feasible date.
(c) During the period when the Prospectus is required to be delivered pursuant to the 1933
Act, comply with all requirements imposed upon them by the 1933 Act, the SEC regulations, the CE
Act and the CFTC regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of Units during such period in accordance with the provisions hereof and as
set forth in the Prospectus.
(d) If any event shall occur as a result of which it is necessary, in the reasonable opinion
of the Managing Owner, to amend or supplement the Prospectus (i) to make the Prospectus not
materially misleading in the light of the circumstances existing at the time it is delivered to a
Subscriber, or (ii) to conform with applicable CFTC or SEC regulations, notify the Placement Agent
and promptly prepare and file with the SEC an appropriate amendment or supplement which will
correct such statement or omission or which will effect such compliance and will use its reasonable
best efforts to have any such amendment declared effective as soon as reasonably possible.
(e) Deliver or cause to be delivered without charge to the Placement Agent such number of
copies of the Prospectus as may reasonably be requested by the Placement Agent; and as soon as the
Registration Statement or any amendment thereto becomes effective, or a supplement thereto is
filed, to deliver or cause to be delivered without charge to the Placement Agent two (2) copies of
the Registration Statement or such amendment thereto, including exhibits, as the case may be, and
two (2) copies of any supplement thereto; and to deliver or cause to be delivered without charge to
the Placement Agent such number of copies of
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the Prospectus, the Registration Statement, and amendments and supplements thereto, if any,
without exhibits, as the Placement Agent may reasonably request for the purposes contemplated by
the 1933 Act.
(f) Endeavor in good faith and in cooperation with the Placement Agent, at or prior to the
time the Registration Statement becomes effective, to qualify Units for offering and sale under the
“blue sky” or securities laws of such jurisdictions as the Placement Agent may designate and the
Managing Owner shall agree. In each jurisdiction where such qualification shall be effected, the
Managing Owner will, unless the Placement Agent agrees in writing that such action is not at the
time necessary or advisable, file and make such statements or reports at such times as are or may
be required by the laws of such jurisdiction and will keep all filings current.
(g) Use its best efforts to keep the Prospectus and the Registration Statement current and
effective by filing post-effective amendments, as necessary, during the Offering.
(h) Invest the net proceeds received by it from the Offering in the manner set forth in the
Prospectus.
(i) Comply with all registration, filing, and reporting requirements of the Exchange Act which
may from time to time be applicable to the Trust.
(j) Comply with all undertakings contained in the Registration Statement.
(k) When and if required, file on a timely basis with the SEC an appropriate form to register
the Units pursuant to Section 12(g) under the Exchange Act.
6. Covenants of the Placement Agent. The Placement Agent covenants to and agrees with
the Managing Owner, the Trust and each Fund to:
(a) Make a best efforts public offering of the Units as soon as the Placement Agent deems it
reasonably advisable on or after the Effective Date (as defined in Section 11(a)), upon and
subject to the terms and conditions contained in this Agreement and in compliance with all
applicable securities laws, and to perform all of its responsibilities hereunder.
(b) Preserve the confidentiality of any proprietary or non-public information or data provided
to the Placement Agent by the Managing Owner.
(c) Fully disclose to prospective subscribers the capacity in which the Placement Agent is
contacting them and the Placement Agent’s relationship with the Managing Owner.
(d) Not make an offer to sell or solicit an offer to buy or sell Units in a state or other
jurisdiction until the Managing Owner has notified the Placement Agent that the Units have been so
registered or qualified, or are exempt from registration or qualification, with the securities
authorities in such state or other jurisdiction.
(e) Maintain in full force and effect, and cause its personnel involved in the activities
contemplated hereunder to maintain in full force and effect, all governmental, regulatory and
self-regulatory registrations, approvals, memberships and licenses required to perform its
obligations under this Agreement and to receive compensation therefor (including but
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not limited to registration as a broker-dealer with the SEC, membership in the NASD,
registration with the relevant regulatory authority in each state in which the Selling Agent will
solicit prospective subscribers, registration with the CFTC as an futures commission merchant or
introducing broker and membership in the NFA) during the term of this Agreement and for such time
as the Placement Agent and such personnel shall receive compensation hereunder.
(f) Comply with the applicable requirements of the 1933 Act (including the delivery of a
Prospectus to each prospective subscriber as required by the 1933 Act), the Exchange Act, the CE
Act, the rules and regulations promulgated thereunder, and the rules and regulations of the NASD,
CFTC, and NFA, including, without limitation (i) determining suitability of a purchase of Units for
each prospective subscriber through the use of an offeree questionnaire, (ii) obtaining a written
agreement from each prospective subscriber to purchase Units setting forth the identity and
quantity of the Units to be purchased and (iii) delivering a Prospectus to a prospective subscriber
at least five (5) Business Days prior to any purchase of Units.
(g) Not, and not permit any Person acting on its behalf to, (i) provide any information or
make any representations relating to the Managing Owner, any Fund, the Trust or the Offering other
than as contained in the Prospectus, or (ii) state that it is authorized to act as agent for the
Managing Owner, any Fund or the Trust for any purpose other than as expressly set forth in this
Agreement.
(h) Not take any of the following actions against the Trust or any Fund: (1) seek a decree or
order by a court having jurisdiction in the premises (A) for relief in respect of the Trust or any
Fund in an involuntary case or proceeding under the United States Bankruptcy Code or any other
federal or state bankruptcy, insolvency, reorganization, rehabilitation, liquidation or similar
law, or (B) adjudging the Trust or any Fund bankrupt or insolvent, or seeking reorganization,
rehabilitation, liquidation, arrangement, adjustment or composition of or in respect of the Trust
or any Fund under the United States Bankruptcy Code or any other applicable federal or state law,
or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or any Fund or of any substantial part of any of their respective
properties, or ordering the winding up or liquidation of any of its affairs; (2) seek a petition
for relief, reorganization or to take advantage of any law referred to in the preceding clause; or
(3) file an involuntary petition for bankruptcy (collectively, a “Bankruptcy or Insolvency
Action”).
(i) For any obligations due and owing to it by any Fund, look solely and exclusively to the
assets of such Fund or the Managing Owner (solely to the extent of the General Units owned by the
Managing Owner in such Fund), if the Managing Owner has liability in its capacity as Managing
Owner, to satisfy the Placement Agent’s claims, and not seek to attach or otherwise assert a claim
against the other assets of the Trust or any other Fund, whether or not there is a Bankruptcy or
Insolvency Action taken. The parties agree that this provision will survive the termination of
this Agreement, whether terminated in a Bankruptcy or Insolvency Action or otherwise.
7. Compliance with NASD Rules and General Laws.
(a) It is understood that the Placement Agent has no commitment with regard to the sale of
Units other than to use its best efforts and to comply with the provisions of this Agreement and
the Trust Agreement. In connection with the offer, sale and distribution of Units, the Selling
Agent represents and warrants that it will comply fully with all applicable laws and
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regulations, and the rules, policy statements and interpretations of the SEC, the NASD, the
CFTC, the NFA, state securities administrators and any other regulatory or self-regulatory body.
In particular, and not by way of limitation, the Placement Agent represents and warrants that it is
familiar with Rule 2810 of the NASD Conduct Rules and that it will comply fully with all the terms
thereof in connection with the Offering and sale of Units. The Placement Agent will not execute
any sales of Units from a discretionary account over which it has control without prior written
approval of the customer in whose name such discretionary account is being maintained.
(b) The Placement Agent agrees not to recommend the purchase of Units to any Person unless the
Placement Agent shall have reasonable grounds to believe, on the basis of information obtained from
the Person concerning, among other things, the Person’s investment objectives, other investments,
financial situation and needs, that: (1) (to the extent relevant for the purposes of Rule 2810 and
giving due consideration to the fact that the Trust and each Fund is in no respects a “tax
shelter”) the Person is or will be in a financial position appropriate to enable the Person to
realize to a significant extent the benefits of the applicable Fund, including the tax benefits (if
any) described in the Prospectus; (2) the Person has a fair market net worth sufficient to sustain
the risks inherent in participating in the applicable Fund; (3) the Person satisfies the
requirements to become a Subscriber on the basis set forth in the Prospectus, the Subscription
Agreement and the state suitability requirements contained therein; (4) acceptance of the Person’s
subscription will not otherwise breach any laws, rules and regulations designed to avoid money
laundering applicable to either the Selling Agent, the Managing Owner, the Trust and each Fund; and
(5) the Units are otherwise a suitable investment for the Person. The Placement Agent agrees to
maintain such records as are required by the applicable rules of the NASD, SEC, CFTC and the NFA
for purposes of determining investor suitability for the time periods otherwise required by the
SEC, NASD, CFTC and NFA. In connection with making the foregoing representations and warranties,
the Placement Agent further represents and warrants that it has, among other things, examined the
Prospectus including, without limitation the sections listed below and obtained such additional
information from the Managing Owner regarding the information set forth thereunder as the Placement
Agent has deemed necessary or appropriate to determine whether the Prospectus adequately and
accurately discloses all material facts relating to an investment in the applicable Funds and
provides an adequate basis to Persons for evaluating an investment in the Units: “RISK FACTORS”;
“BREAK-EVEN ANALYSIS”; “DESCRIPTION OF THE TRUST, TRUSTEE, MANAGING OWNER AND AFFILIATES”; “OTHER
PRIVATE ACCOUNTS AND POOLS”; “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS”; “ACTUAL AND POTENTIAL CONFLICTS OF INTEREST”; “CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS”; “FEES AND EXPENSES”; “THE OFFERING”; “WHO MAY SUBSCRIBE”; “SUMMARY OF
MATERIAL AGREEMENTS”; and “MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS.”
In connection with making the representations and warranties set forth in this section, the
Placement Agent has not relied on inquiries made by or on behalf of any other parties.
(c) The Placement Agent agrees to inform all prospective subscribers of Units of all pertinent
facts relating to the liquidity and marketability of Units as set forth in the Prospectus.
(d) The Placement Agent represents and warrants that it is familiar with Rule 2710 of the NASD
Conduct Rules and covenants and agrees with the Trust, each Fund and the
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Managing Owner that it will comply fully with all the terms thereof in connection with the
Offering and sale of the Units.
(e) The Placement Agent represents, warrants and covenants that it: (1) maintains anti-money
laundering policies and procedures that comply with the Bank Secrecy Act of 1970, as amended, and
applicable federal anti-money laundering regulations, including policies and procedures to verify
the identity of prospective subscribers (“AML Laws, Regulations and Policies”); (2)
complies with AML Laws, Regulations and Policies; (3) will promptly deliver to the Managing Owner,
to the extent permitted by applicable law, notice of any AML Laws, Regulations and Policies
violation, suspicious activity, suspicious activity investigation or filed suspicious activity
report that relates to any prospective subscriber for Units; and (4) will cooperate with the
Managing Owner and deliver information reasonably requested by the Managing Owner concerning
Subscribers that purchased Units sold by the Placement Agent necessary for the Managing Owner or
the Trust to comply with AML Laws, Regulations and Policies.
(f) The Placement Agent agrees that the Managing Owner has not assumed, nor will it assume,
any responsibility or obligation concerning the Placement Agent’s right to act as broker-dealer
with respect to the Units in any jurisdiction.
8. Conditions of Placement Agent’s Obligations.
(a) The obligations of the Placement Agent to undertake the placement of Units as provided
herein shall be subject (unless waived by the Placement Agent) to the continuing accuracy of the
representations and warranties of the Managing Owner, the Trust and the Funds contained herein, to
the performance by the Managing Owner, the Trust and the Funds of their respective obligations
hereunder and to the following conditions:
(i) The Registration Statement shall have become effective, and the Placement 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 or any similar
purpose shall have been initiated or threatened by the SEC, the NASD, the NFA, or the CFTC;
and all requests for additional information on the part of the SEC, the NASD, the NFA and
the CFTC, shall have been complied with to the reasonable satisfaction of the Placement
Agent and its counsel; and
(ii) The NASD, upon review of the terms of the Offering, shall not have objected to the
Placement Agent’s participation in the Offering or its compensation therefrom.
(b) The occurrence of the Initial Closing shall be subject (unless waived by the Placement
Agent) to the continuing accuracy of the representations and warranties of the Managing Owner, the
Trust and the Funds contained herein as of and through the Initial Closing, to the performance by
the Managing Owner, the Trust and the Funds of their respective obligations hereunder as of and
through the Initial Closing and to the following conditions:
(i) As of the Initial Closing, the Placement Agent shall have received a certificate of
the chief executive officer and of the chief financial officer of the Managing Owner, dated
the Initial Closing, to the effect that as of the date of this Agreement and as of the
Initial Closing, the representations and warranties of the Managing Owner contained herein
were and are accurate, except as disclosed therein, and
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that as of the Initial Closing, the obligations to be performed by the Managing Owner
and the Trust hereunder on or prior thereto have been fully performed, except as disclosed
therein; and
(ii) The issuance, sale and delivery of Units shall have been made in a manner
reasonably satisfactory in form and substance to the Placement Agent and its counsel.
9. Indemnification and Contribution.
(a) The Placement Agent shall not be liable to any Fund, the Trust, the Trustee or the
Managing Owner for any loss, liability, claim, damage, expense, fine, penalty, cost or expense
(including, without limitation, attorneys’ and accountants’ fees and disbursements), judgment
and/or amount paid in settlement (collectively, “Losses”) caused by any act or omission of
the Placement Agent in connection with the performance of services under this Agreement, except as
a result of (1) acts or omissions to act on the part of the Placement Agent or the officers,
directors, shareholders, principals, members, employees, agents or Affiliates (collectively, the
“Principals and Affiliates”) of the Placement Agent which constitute negligence or
misconduct, or (2) any breach of any of the representations, warranties, covenants or agreements of
the Placement Agent in this Agreement. The Placement Agent hereby agrees to indemnify and hold
harmless each Fund, the Trust, the Trustee, the Managing Owner and the Principals and Affiliates of
each of the foregoing from and against all Losses incurred by any of them arising out of or based
upon any matter for which the Placement Agent is liable under this Section 9(a).
(b) The Managing Owner and each Fund, solely out of the Contracting Fund Assets (as defined
below in Section 14), hereby agrees indemnify and hold harmless the Placement Agent and its
Principals and Affiliates from and against any and all Losses to which such Persons may become
subject arising out of or in connection with (i) this Agreement, (ii) the transactions contemplated
hereby or (iii) the fact that the Placement Agent is or was a selling agent of the Trust and the
Funds, in each case arising out of or based upon (1) any untrue statement of material fact
contained in this Agreement, the Registration Statement, the Prospectus or any application or
written communication executed by the Managing Owner or the Trust filed in any jurisdiction in
order to qualify Units under the securities laws thereof (collectively, the “Documents”),
(2) any omission from the Documents of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (3) any breach of any representation, warranty,
covenant or agreement made by the Managing Owner, the Trust or any Fund in this Agreement, except
to the extent that any such Losses arise out of, relate to, or are based upon any matter (x) for
which the Placement Agent would be liable under Section 9(a) or (y) relating to an
Additional Selling Agent or an Additional Selling Agent Agreement. For the sake of clarity, if a
claim for indemnification relates to a specific Fund, such Fund, and no other Fund, shall be
responsible for indemnifying the Placement Agent and its Principals and Affiliates in accordance
with this Section 9(b).
(c) Indemnification Procedure. The Person(s) making a claim for indemnification under
this Section 9 is/are referred to herein as the “Indemnified Party” and the
Person(s) against whom such claims are asserted under this Section 9 is/are referred to
herein as the “Indemnifying Party.” All claims by an Indemnified Party shall be asserted
and resolved as follows
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(i) In the event that (A) any claim for which an Indemnifying Party would be liable to
an Indemnified Party hereunder is asserted against or sought to be collected from such
Indemnified Party by a third party (a “Third Party Action”) or (B) any Indemnified
Party hereunder should have a claim against any Indemnifying Party hereunder which does not
involve a claim being asserted against or sought to be collected from it by a third party (a
“Direct Action”), the Indemnified Party shall with reasonable promptness notify in
writing the Indemnifying Party of such claim, specifying, to the extent then known to the
Indemnified Party, the basis on which the claim for indemnification is made, the facts
giving rise to or the alleged basis of the claim, and the amount (which may be estimated) of
claim liability (a “Claim Notice”), together with a copy of the document (if any) by
or in which the Third Party Action is commenced or asserted; provided, that any
failure to give such notice shall not constitute a waiver of any rights of the Indemnified
Party except to the extent the rights of the Indemnifying Party are actually prejudiced as
result of such delay or lack of detail.
(ii) Within thirty (30) days after receipt of a Claim Notice, the Indemnifying Party
may (A) by giving written notice thereof to the Indemnified Party, elect to assume the
defense of such Third Party Action at its sole cost and expense or (B) object to the claim
for indemnification set forth in the Claim Notice. The Indemnifying Party shall have the
right to assume control of the defense of or settle or otherwise dispose of such Third Party
Action on such terms as the Indemnifying Party deems appropriate; provided,
however, that (x) the Indemnified Party shall be entitled, at its own expense (which
such expense shall not be deemed to be a Loss), and without unreasonable interference with
the actions of the Indemnifying Party, to participate in the defense of Third Party Actions,
(y) the Indemnified Party shall not have the right to assume control of a Third Party Action
if the Indemnified Party shall have been advised by counsel that, under applicable standards
of professional responsibility, a conflict will arise in the event both the Indemnified
Party and the Indemnified Party are represented by the same counsel with respect to the
Third Party Action, in which case such Indemnified Party shall have the right to be
represented by separate counsel with respect to the matters to which the conflict pertains,
and all Losses in connection therewith shall be reimbursed by the Indemnifying Party from
time to time upon demand of the Indemnified Party; and (z) the Indemnifying Party shall
obtain the prior written consent of the Indemnified Party before entering into any
settlement, compromise, admission or any acknowledgment of the validity of a Third Party
Action or any liability in respect thereof, which consent shall not be unreasonably
withheld; provided, that the Indemnifying Party shall not consent to the entry of
any judgment or enter into any settlement that does not include a complete release of all
claims against each Indemnified Party in respect of such Third Party Action and any related
facts, circumstances or occurrences; and provided, further, that no consent
of the Indemnified Party shall be necessary if the settlement, compromise, admission or any
acknowledgment involves solely the payment of monetary damages that are paid by the
Indemnifying Party.
(iii) Unless the Indemnifying Party objects in writing to a Direct Claim within thirty
(30) days after receipt of the Claim Notice, such Direct Claim shall be conclusively deemed
to be a liability of the Indemnifying Party and the Indemnified Party shall be entitled to
obtain the appropriate number of escrowed shares, in accordance with the terms of the Pledge
Agreement. If the Indemnifying Party objects in writing, such dispute shall be resolved in
accordance with Section 19.
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(d) In the event that a Person seeks indemnification in a Third Party Action covering both
matters for which indemnification is and is not covered hereunder, such Person shall be indemnified
only for the Losses covered hereunder.
(e) None of the indemnifications contained in this Agreement shall be applicable with respect
to default judgments, confessions of judgment or settlements entered into by a Person claiming
indemnification without the prior written consent of the Indemnifying Party.
(f) Notwithstanding the provisions of this Section 9, the Placement Agent shall not be
indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of
federal or state securities Laws unless (i) there has been a successful adjudication on the merits
of each count involving alleged securities Law violations as to the particular Indemnitee, (ii)
such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction
as to the particular Indemnitee or (iii) a court of competent jurisdiction approves a settlement of
the claims against a particular Indemnitee and finds that indemnification of the settlement and
related costs should be made.
(g) In any claim for indemnification for federal or state securities Law violations, the
person seeking indemnification shall place before the court the position of the SEC and the
position of any other applicable state securities division which requires disclosure with respect
to the issue of indemnification for securities law violations.
(h) The indemnification provisions of this Agreement shall survive the termination of this
Agreement. The indemnification agreements in this Section 9 shall be in addition to any
liability which the Placement Agent may otherwise have. Nothing contained in this Section
9 or elsewhere in this Agreement shall be construed as an admission that the Placement Agent is
an “underwriter” of the Units within the meaning of the 1933 Act.
10. Representations and Agreements to Survive Delivery. All representations,
warranties, covenants, and agreements contained in this Agreement or contained in certificates or
documents delivered pursuant to this Agreement shall be deemed to be representations, warranties,
covenants, and agreements at the Effective Date (defined below), and shall survive until the
earlier of (i) the termination of the Continuous Offering Period, or (ii) the termination of this
Agreement (with those Sections specified in Section 12 surviving indefinitely).
11. Effectiveness of Agreement; Term and Termination.
(a) This Agreement shall become effective at 9:30 a.m., New York time, on the first full
Business Day following the date the Registration Statement becomes effective with the SEC (the
“Effective Date”). Unless terminated earlier as set forth in the remainder of this
Section 11, this Agreement shall terminate with respect to a Fund at the conclusion of the
Continuous Offering Period for such Fund (with those Sections specified in Section 12
surviving indefinitely).
(b) The Placement Agent may terminate this Agreement with respect to the Trust or any Fund(s)
upon 30 days’ advance written notice to the applicable Fund(s), the Trust and the Managing Owner,
in the event (i) there has 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 applicable Fund(s), the Trust or the Managing Owner which, in the reasonable judgment of the
Placement Agent, renders it inadvisable to proceed with the Offering;
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(ii) the Registration Statement and/or the Prospectus has not been amended reasonably promptly
after written request by the Placement Agent for it to be so amended because an event has occurred
which, in the reasonable opinion of securities counsel for the Placement Agent, should be set forth
in the Registration Statement or the Prospectus in order to make the statements therein not
misleading; (iii) there has been a general suspension of, or a general limitation on prices for,
trading in commodity futures or option contracts on commodity exchanges in the United States or
other commodities instruments, or there is any other national or international calamity or crisis
in the financial markets of the United States to the extent that it is determined by the Placement
Agent, in its reasonable discretion, that such limitations would materially impede the Trust’s or
the applicable Fund’s trading activities or make the offering or delivery of Units impossible or
impractical; or (iv) there has been a declaration of a banking moratorium by federal, New York or
Delaware authorities.
(c) The Managing Owner, the Trust and/or the Fund(s) (solely with respect to such Fund(s)) may
terminate this Agreement for any or no reason upon 15 days’ advance written notice to the Placement
Agent; provided, that in the event this Agreement is terminated only with respect to
certain Funds, this Agreement shall remain in full force and effect with respect to the remaining
Funds, the Trust and the Managing Owner.
12. Survival. Notwithstanding that this Agreement shall not become effective, shall
terminate or shall otherwise not be carried out, Sections 3(c), 4, 6(b),
6(c), 6(g), 6(h), 6(i) and 9 through 20 shall
survive and remain in full force and effect.
13. Limitation of Limited Owner Liability. This Agreement has been made and executed
by and on behalf of the Funds, the Trust and the Managing Owner. The obligations of the Funds, the
Trust and/or the Managing Owner set forth herein are not binding upon any of the Limited Owners
individually but are binding only upon the assets and property identified herein. No resort shall
be had to the assets of other Funds or the Limited Owners’ assets or personal property, for the
satisfaction of any obligation or claim hereunder.
14. Subordination of Certain Claims and Rights. Each of the Managing Owner and the
Placement Agent agrees and consents (the “Consent”) to look solely to the applicable Fund
(the “Contracting Fund”) and its assets (the “Contracting Fund Assets”) for
payment. The Contracting Fund Assets include only those funds and other assets that are paid, held
or distributed to the Trust on account of and for the benefit of the Contracting Fund, including,
without limitation, funds delivered to the Trust for the purchase of Units in a Fund. In
furtherance of the Consent, each of the Managing Owner and the Placement Agent agrees that any
debts, liabilities, obligations, indebtedness, expenses and claims of any nature and of all kinds
and descriptions (collectively, “Claims”) incurred, contracted for or otherwise existing
arising from, related to or in connection with the Trust and its assets and the Contracting Fund
and the Contracting Fund Assets, shall be subject to the following limitations:
(a) Except as set forth below, the Claims, if any, of the Managing Owner and the Placement
Agent (the “Subordinated Claims”) incurred, contracted for or otherwise existing, arising
from, related to or in connection with the Contracting Fund and the Contracting Fund Assets and the
assets of the Trust shall be expressly subordinate and junior in right of payment to any and all
other Claims against the Trust and the Contracting Fund and any of their respective assets which
may arise as a matter of Law or pursuant to any Contract; provided, however, that
bona fide Claims of either the Managing Owner or the Placement Agent, if any, against the
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Contracting Fund shall be pari passu and equal in right of repayment and distribution with all
other bona fide Claims against the Contracting Fund;
(b) The Managing Owner and the Placement Agent will not take, demand or receive from any Fund
or the Trust or any of their respective assets (other than the Contracting Fund or its assets) any
payment for the Subordinated Claims, except in accordance with this Section 14;
(c) Subject to this Section 14, the Claims of the Managing Owner and the Placement
Agent with respect to the Contracting Fund shall only be asserted and enforceable against the
Contracting Fund’s assets and the Managing Owner and its assets, and shall not be asserted or
enforceable for any reason whatsoever against the assets of any other Fund or the Trust generally;
(d) If the Claims of the Managing Owner or the Placement Agent against the Contracting Fund or
the Trust are secured in whole or in part, each of the Managing Owner and the Placement Agent
hereby waives (under section 1111(b) of the Bankruptcy Code (11 U.S.C. § 1111(b)) any right to have
any deficiency Claims (which deficiency Claims may arise in the event such security is inadequate
to satisfy such Claims) treated as unsecured Claims against the Trust or any other Fund, as the
case may be;
(e) In furtherance of the foregoing, if and to the extent that the Managing Owner and/or the
Placement Agent receive monies in connection with the Subordinated Claims from a Fund or the Trust
(or their respective assets) other than the Contracting Fund or the Managing Owner and their
respective assets and except as permitted by this Section 14, the Managing Owner and/or the
Placement Agent, as the case may be, shall be deemed to hold such monies in trust and shall
promptly remit such monies to the Fund or the Trust that paid such amounts for distribution by such
Fund or the Trust in accordance with the terms hereof; and
(f) The provisions of this Section 14 shall apply at all times notwithstanding that
the Claims are satisfied, and notwithstanding that the agreements in respect of such Claims are
terminated, rescinded or canceled.
15. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or
by Federal Express, Express Mail or similar overnight delivery or courier service or delivered (in
person or by telecopy, telex or similar telecommunications equipment) against receipt to the party
to whom it is to be given, (i) if to the Managing Owner, the Trust or the Funds, at 0000 Xxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Chief Executive Officer; with a copy to: Xxxxxxx
& Xxxxxx LLP, 000 Xxxx 00 Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx X. Xxxxxx, Esq.; (ii) if to the Placement Agent, 00 X 000 Xxxxxxxxxxx Xx., Xxxxxxxx Xxxxxxx,
XX 00000, Attention: The President; or (iii) in either case, to such other address as the party
shall have furnished in writing in accordance with the provisions of this Section 15. Any
notice or other communication given shall be deemed given at the time of receipt by the intended
recipient party thereof.
16. Binding Agreement. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Funds, the Trust, the Managing Owner, the Placement Agent (and solely with
respect to indemnification or contribution, those persons and entities referred to in Section
9 who are entitled to indemnification or contribution), and their respective successors, and
assigns (which shall not include any prospective subscriber or Subscriber for Units), and no other
Person
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shall have or be construed to have any legal or equitable right, remedy, or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
17. Invalidity. If any term or provision in this Agreement shall be held to be
illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or
provision or part shall to that extent be deemed not to form part of this Agreement but the
enforceability of the remainder of this Agreement shall not be affected.
18. Governing Law. This Agreement shall be construed in accordance with the laws of
Delaware, without giving effect to its conflict of law principles.
19. Consent to Jurisdiction. All disputes arising out of this Agreement and any
document or instrument delivered pursuant to, in connection with or simultaneously with this
Agreement, including the interpretation, breach or termination of any of the foregoing, shall be
resolved exclusively through the state and Federal courts situated of Delaware. The parties hereby
submit to the exclusive jurisdiction and venue for any such dispute in such courts, as well as to
all appellate courts to which an appeal may be taken from such trial courts. Each of the parties
expressly waives, to the fullest extent permitted by law, the right to move to dismiss or transfer
any action brought in such courts on the basis of any objection to personal jurisdiction, venue or
inconvenient forum in any of such courts.
20. Fund Disclaimer. Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge and agree that the Trust is organized in series pursuant to Sections
3804(a) and 3806(b)(2) of the Trust Act. As such, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to each series of the Trust shall be
enforceable against the assets of such series of the Trust only, and not against the assets of the
Trust generally or the assets of any other series of the Trust or against the Trustee. There may
be several series of the Trust created pursuant to the Trust Agreement.
21. Assignment. This Agreement may not be assigned, novated or otherwise transferred
by operation of law or otherwise by any party without the prior written consent of all of the other
parties, which consent shall not be unreasonably withheld. Any change of control of a party shall
be deemed an assignment of this Agreement that requires the prior written consent of the other
parties. For purposes of this Agreement, “change of control” means any merger, consolidation, sale
of all or substantially all of the assets or sale of a substantial block of stock, of a party. Any
such assignment, novation or transfer by one party not in accordance with this provision shall be a
material breach of this Agreement and shall be grounds for immediate termination thereof by the
non-breaching parties, in addition to any other remedies that may be available under this Agreement
or at law or in equity to the non-breaching parties.
22. Integration. This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
23. Counterparts. This Agreement may be executed in several counterparts, and all so
executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that
all the parties are not signatory to the original or the same counterpart.
24. Captions. Section and paragraph captions contained in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit, or extend or
describe the scope of this Agreement or the intent of any provision hereof.
-20-
If the foregoing correctly sets forth the understanding between the Placement Agent and the
Managing Owner and the Trust, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Yours very truly,
| XXXXXXXXXX RAW MATERIALS (U.S.) TRUST |
XXXXXXXXXX RAW MATERIALS MANAGEMENT, LLC | |||||||||||||||
| By: | Xxxxxxxxxx Raw Materials Management, LLC | By: | /s/ Xxxx X. Xxxxxxxx | |||||||||||||
| Managing Owner | Name: | Xxxx X. Xxxxxxxx | ||||||||||||||
| Title: | Chief Executive Officer and Manager | |||||||||||||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||||||||||||||
| Name: | Xxxx X. Xxxxxxxx | |||||||||||||||
| Title: | Chief Executive Officer and Manager | |||||||||||||||
| Accepted and agreed as of the date first written above: OAKBROOK INVESTMENT BROKERS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | President | |||
EXHIBIT A
FORM OF ADDITIONAL SELLING AGENT AGREEMENT
[On the following pages]
0000 Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
Tel. No. 000-000-0000 Fax No. 000-000-0000
Tel. No. 000-000-0000 Fax No. 000-000-0000
, 2007
Oakbrook Investment Brokers, Inc.
00 X 000 Xxxxxxxxxxx Xx.
Xxxxxxxx Xxxxxxx, XX 00000
00 X 000 Xxxxxxxxxxx Xx.
Xxxxxxxx Xxxxxxx, XX 00000
| Attention: • |
| Re: BROOKSHIRETM RAW MATERIALS (U.S.) TRUST | ||
| SELLING AGENT AGREEMENT |
Ladies and Gentlemen:
Xxxxxxxxxx Raw Materials Management, LLC, a Delaware limited liability company (the
“Managing Owner”), has caused the formation, on August 17, 2006, of a statutory trust
pursuant to the Delaware Statutory Trust Act (the “Trust Act”), under the name Xxxxxxxxxx
Raw Materials (U.S.) Trust (the “Trust”), for the purpose of engaging in the speculative
trading of commodity futures and forward contracts. CSC Trust Company of Delaware, a Delaware
company (the “Trustee”), is the trustee of the Trust and has delegated substantially all
responsibility for the management of the Trust’s business and affairs to the Managing Owner. The
Amended and Restated Declaration of Trust and Trust Agreement dated as of , 2007 (the
“Trust Agreement”) sets forth the terms of the Trust. Capitalized terms not defined in
this Agreement have the meanings assigned to such terms in the Registration Statement (as
hereinafter defined) and/or the Trust Agreement.
The Trust is currently divided into ten series (each, a “Fund”). Units of beneficial
interest (“Units”) will be issued in each such Fund, as more fully described in the
Registration Statement and the Prospectus (as hereinafter defined). Each Fund will be managed by
the Managing Owner, be separately valued and represent a separate investment portfolio of the
Trust.
The Managing Owner is registered with the Commodity Futures Trading Commission (the
“CFTC”) as a commodity pool operator and a commodity trading adviser under the Commodity
Exchange Act, as amended (the “CE Act”), and is a member of the National Futures
Association (the “NFA”) in such capacity.
The Managing Owner proposes to offer Units to the public and to sell Units to subscribers
acceptable to the Managing Owner (each, a “Subscriber” and collectively, the
“Subscribers”), upon the terms and subject to the conditions set forth in this Placement
Agreement (the “Agreement”), the Registration Statement and the Prospectus (the
“Offering”). The Offering will begin as soon as the Placement Agent (as defined below)
deems it reasonably
advisable on or after the Registration Statement is declared effective by the Securities and
Exchange Commission (the “SEC”).
Oakbrook Investment Brokers, Inc., an Illinois corporation, has been appointed as the initial
placement agent for the Trust (together with any replacement placement agent, the “Placement
Agent”) pursuant to a placement agent agreement dated as of , 2007 (the
“Placement Agent Agreement”). The Placement Agent has nominated [ ] to act as
a non-exclusive selling agent for distribution of Units (a “Selling Agent”), and the
Managing Owner hereby wishes to appoint [ ] to act as Selling Agent, pursuant to the terms
of this selling agent agreement (this “Agreement”).
Each Fund desires to raise capital as herein provided through the sale of Units, and the
Selling Agent hereby agrees to use its best efforts to market Units pursuant to the terms set forth
in this Agreement. Accordingly, the Managing Owner, the Trust and the Selling Agent hereby,
intending to be legally bound, agree as follows:
1. Representations and Warranties of the Managing Owner. The Managing Owner
represents and warrants to the Selling Agent that:
(a) A registration statement on Form S-1 for the Trust and the Funds, and as a part thereof a
combined prospectus for all Funds with respect to all of the Units being offered (which
registration statement together with all amendments thereto, at the time and in the form declared
effective by the SEC is referred to herein as the “Registration Statement,” and which
prospectus in final form, together with all amendments and supplements thereto, is referred to
herein as the “Prospectus”), prepared in accordance with the applicable requirements of the
Securities Act of 1933, as amended (the “1933 Act”), the CE Act, and the rules, regulations
and instructions promulgated under the 1933 Act and the CE Act, respectively, has been filed with
the SEC, the National Association of Securities Dealers, Inc. (the “NASD”) and the NFA
pursuant to the 1933 Act and the CE Act and the rules and regulations promulgated, respectively,
thereunder, as well as the rules and regulations of the NASD and the NFA, in the form heretofore
delivered to the Placement Agent.
(b) When the Registration Statement becomes effective under the 1933 Act, the Registration
Statement and the Prospectus will contain all material statements and information required to be
included therein by the 1933 Act and the CE Act and the rules and regulations, respectively,
thereunder, as well as the rules and regulations of the NASD and the NFA, and will conform in all
material respects to the requirements of the 1933 Act and the CE Act and the rules and regulations,
respectively, thereunder, as well as the rules and regulations of the NASD and the NFA, and 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 (with respect to the Prospectus, in
light of the circumstances in which they were made) not misleading; provided,
however, that no representation and warranty is made with respect to information furnished
in writing to the Trust or the Managing Owner by the Placement Agent, the Selling Agent or by any
Additional Selling Agent (as defined in the Placement Agent Agreement).
(c) To the knowledge of the Managing Owner, no order (a “Stop Order”) (i) preventing
or suspending the effectiveness of the Registration Statement or use of the Prospectus or any
amendment or supplement thereto, (ii) refusing to permit the effectiveness of the Registration
Statement, or (iii) suspending the registration or qualification of any Units, has been
-2-
issued by the SEC, the CFTC, the NASD, the NFA, the “blue sky” or securities authority of any
state, or any other federal, state or other governmental agency or body, nor has any of such
authorities instituted or, to the knowledge of the Managing Owner, threatened to institute, any
proceedings with respect to a Stop Order.
(d) The Trust was duly formed and is validly existing as a statutory trust in good standing
under the Trust Act, with full power and authority, and all necessary authorizations, approvals and
orders of and from all federal, state and other governmental or regulatory officials and bodies, to
carry out its obligations under this Agreement, its certificate of trust (the “Trust
Certificate”) and the Trust Agreement, and to own its properties and conduct its business as
described in the Prospectus.
(e) The Managing Owner and each of its principals and employees have, and will continue to
have for so long as it is the Managing Owner, all federal and state governmental, regulatory,
self-regulatory and commodity exchange approvals and licenses, and the Managing Owner (either by
itself or through its principals and employees) has effected all filings and registrations with
federal and state governmental, regulatory or self-regulatory agencies required to conduct its
business and to act as described in the Registration Statement and Prospectus or required to
perform its or their obligations as described under the Trust Agreement (including, without
limitation, registration as a commodity pool operator under the Commodity Act and membership in the
NFA as a “commodity pool operator” and as a “commodity trading adviser”), except in each case as
would not be reasonably likely to have a Material Adverse Effect on the Managing Owner, the Trust
or any Fund.
(f) The Managing Owner is a limited liability company duly formed, validly existing, and in
good standing under the laws of Delaware, with full power and authority, and all necessary
consents, authorizations, approvals, orders, licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and other governmental authorities and
all courts and other tribunals, to own, lease, license, and use its properties and assets and to
carry on its business, in all material respects, in the manner described in the Prospectus. The
Managing Owner is duly qualified to do business and is in good standing in each jurisdiction in
which its ownership, leasing, licensing, or use of property and assets or the conduct of its
business makes such qualification necessary or advisable, except where the failure to be so
qualified would not have a material adverse effect on any of the operations, business, properties
or assets of the Managing Owner.
(g) Each of the Managing Owner and the Trust has all requisite power and authority to execute,
deliver, and perform its respective obligations under this Agreement. This Agreement has been duly
and validly authorized, executed and delivered by the Managing Owner and the Trust and constitutes
a valid and binding agreement of each of the foregoing, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally.
(h) The Managing Owner, the Trust and each Fund has the power and authority to enter into the
contractual obligations and agreements referred to in the Prospectus (it being understood and
agreed that this representation does not cover the Placement Agent Agreement, this Agreement or any
other Additional Selling Agent Agreements). None of (x) the offer and sale of the Units, (y) the
execution and delivery of this Agreement or (z) compliance by the Managing Owner or the Trust with
the provisions of this Agreement, will conflict with, or result in a breach of any of the terms or
provisions of, or result in a default under, (i) any order of
-3-
the SEC, the NASD, the CFTC or the NFA; (ii) the Trust Certificate, the Trust Agreement or the
limited liability company agreement of the Managing Owner; (iii) any indenture, mortgage, deed of
trust, loan agreement, other evidence of indebtedness or other agreement or instrument to which the
Trust, a Fund or the Managing Owner is a party or by which their properties or assets are bound,
except in the case of this clause (iii) of an agreement or instrument that would not have a
material adverse effect on any of the operations, business, properties or assets of any of the
foregoing; or (iv) to their knowledge, any applicable statute or any order, rule or regulation of
any court or of any federal, state or other governmental or regulatory agency or body having
jurisdiction over the Trust, a Fund or the Managing Owner or any of their properties; nor will any
such actions result in the imposition of any lien, charge or encumbrance upon any of the property
or assets of the Trust, a Fund or the Managing Owner.
(i) The offer and sale of Units have been duly authorized by all necessary action on the part
of the Managing Owner and the Trust. The Units to be offered for sale pursuant to the Offering
have been validly authorized and, when issued and delivered in accordance with this Agreement, will
be validly issued, fully paid and nonassessable, and will constitute valid units of beneficial
interest in the Trust which, when the Registration Statement becomes effective under the 1933 Act,
will conform in all material respects to the description thereof contained in the Prospectus. The
liability of each Limited Owner will be limited as set forth in the Prospectus and the Trust
Agreement, and no Limited Owner will be subject to personal liability for the debts, obligations or
liabilities of the Trust or the applicable Fund by reason of his being a Limited Owner other than
as described in the Prospectus and the Trust Agreement.
(j) No consent, approval, authorization, order, registration or qualification of or with any
court or any federal, state or other governmental or regulatory agency or body is required for the
issuance and sale of Units or the consummation of the transactions contemplated by this Agreement,
except for the registration of Units under the 1933 Act, submission of the Prospectus to the SEC,
NASD, NFA, the continued registration of the Managing Owner under the CE Act as a commodity pool
operator and commodity trading advisor and membership by the Managing Owner in the NFA in such
capacities, and such consents, approvals, authorizations, orders, registrations or qualifications
as may be required by securities or state “blue sky” laws in connection with the offer and sale of
Units.
(k) There is no litigation, arbitration, claim, governmental or other proceeding or
investigation pending, or, to the knowledge of the Managing Owner, threatened, with respect to the
Managing Owner, the Trust or any Fund, or any of their operations, businesses, properties or
assets, except as described in the Registration Statement or Prospectus or such as would not, if
successful, have a material adverse effect upon the operations, businesses, properties or assets of
the Managing Owner, the Trust or any Fund, as the case may be. None of the Managing Owner, the
Trust or any Fund is in violation in any material respect of any law, rule, regulation, order,
judgment or decree, except as described in the Registration Statement or Prospectus or as would not
have a material adverse effect upon the operations, business, properties or assets of the Managing
Owner, the Trust or any Fund.
(l) The Managing Owner is not, nor, to the knowledge of the Managing Owner, is any other
party, in violation or breach of, or in default with respect to, any material provision of any
written contract, agreement, instrument, lease, license or legally binding understanding
(“Contract”) which is material to the Managing Owner and which relates to the Trust or the
Offering; and each such Contract is in full force and is the legal, valid, and binding
-4-
obligation of the Managing Owner and/or the Trust and is enforceable as to the Managing Owner
and/or the Trust in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally.
The Managing Owner has no knowledge that any party to any such Contract has any current intention
of canceling, not renewing or not performing with respect thereto. The Managing Owner enjoys
peaceful and undisturbed possession under all leased property from which operations related to the
Trust or the Offering are conducted. The Managing Owner is not in violation or breach of, or in
default with respect to, any term of its certificate of formation or operating agreement.
(m) When the Registration Statement becomes effective under the 1933 Act, each Contract
required to be (i) described in the Registration Statement or the Prospectus will be properly
described therein and (ii) filed as an exhibit to the Registration Statement will be filed with the
SEC as an exhibit to the Registration Statement.
(n) The financial statements of the Managing Owner and the Trust contained in the Registration
Statement and the Prospectus have been examined by an independent registered public accounting
firm, as required by the CE Act and the 1933 Act and the rules and regulations of the CFTC and the
SEC, respectively, and when the Registration Statement becomes effective under the 1933 Act, fairly
present in all material respects the financial condition and the results of operations thereof as
of the dates and for the periods therein specified; and such financial statements have been
prepared in accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved; and no other financial statements are
required by Form S-1 to be included in the Registration Statement or the Prospectus.
(o) Neither the Managing Owner, nor, to the knowledge of the Managing Owner, any manager,
member, director, officer, agent, employee, or other person associated with or acting on behalf of
the Managing Owner has, directly or indirectly, (i) used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from funds of the Managing Owner; (iii) violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended or (iv) made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment.
(p) Subsequent to the respective dates as of which information is given in the Registration
Statement and the Prospectus, and except as described in the Registration Statement or Prospectus,
the Trust has not (i) issued any securities or incurred any liability or obligation, primary or
contingent, for borrowed money; (ii) entered into any material transaction not in the ordinary
course of business or (iii) declared or paid any dividend on its capital stock.
(q) Except as may be set forth in the Registration Statement, Prospectus, this Agreement or
any Additional Selling Agent Agreement, neither the Trust nor any Fund has incurred any liability
for a fee, commission or other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement.
(r) Except as contemplated by the Offering, the Placement Agent Agreement, this Agreement or
any Additional Selling Agent Agreement or as may have been waived, no Person has any right of first
refusal, preemptive right, right to any compensation, or other similar
-5-
right or option, in connection with the Offering or this Agreement, or any of the transactions
contemplated hereby or thereby.
(s) Except as may be set forth in the Registration Statement or Prospectus or as may have been
waived, no Person has the right to require registration of Units or other securities of the Company
upon the filing or effectiveness of the Registration Statement.
2. Representations and Warrants of the Selling Agent. The Selling Agent represents
and warrants to the Trust, each Fund and the Managing Owner that:
(a) It has all necessary corporate power and authority to enter into this Agreement, to
consummate the transactions contemplated by this Agreement, and to perform its obligations
hereunder.
(b) It is a corporation duly organized and validly existing under the laws of the State of
[ ]; it is duly authorized to execute this Agreement and to perform its obligations
hereunder; and the execution and delivery of this Agreement, the consummation of the transactions
herein contemplated and the performance of its obligations hereunder, will not violate, conflict
with, or constitute a default under, (i) the organizational documents of the Selling Agent; (ii)
any Contract to which the Selling Agent is a party or by which its assets are bound or (iii) any
judgment, decree, order or, to the knowledge of the Selling Agent, any statue, rule or regulation,
applicable to the Selling Agent.
(c) This Agreement has been duly and validly authorized, executed and delivered by the Selling
Agent and is a valid and binding agreement of the Selling Agent enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally.
(d) The information contained in the Registration Statement and Prospectus relating to the
Selling Agent, if any, is complete and correct and does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein not
misleading.
(e) It is a member of the NASD, and is in compliance with all material rules and regulations
applicable to the Selling Agent generally and, to its knowledge, applicable to the Selling Agent’s
participation in the Offering, and it is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and under the securities laws of the
states in which Units will be offered or sold by it. It is not subject to any order or regulation
which in any way relates to any violation of law or which could otherwise preclude it fulfilling
its duties contemplated hereby and it has not committed any act nor is it, its Affiliates or other
persons associated with it the subject of administrative, civil, or criminal actions (so-called
“bad boy” provisions) of any state “blue sky” law.
(f) It will deliver or cause to be delivered to each prospective subscriber, prior to any
submission by such person of a written offer relating to the purchase of Units, a copy of the
Prospectus, as it may have been most recently amended or supplemented by the Managing Owner or the
Trust.
(g) In compliance with the NASD Conduct Rules, it will not sell Units to discretionary
accounts without prior specific written approval of the customer in whose name such account is
being maintained.
-6-
(h) It will not take any action which would cause the Offering to violate the provisions of
the 1933 Act, the Exchange Act, the CE Act, the respective rules and regulations promulgated
thereunder, or applicable “blue sky” laws of any state or jurisdiction.
3. Offering and Sale of Units.
(a) Subject to the terms and conditions, and on the basis of the representations, warranties
and covenants set forth in this Agreement, the Managing Owner, the Trust and each Fund hereby
appoint the Selling Agent as a non-exclusive selling agent with respect to the Offering, and the
Selling Agent agrees to use its best efforts to procure Subscribers for Units in one or more
Initial Funds during the Initial Offering Period and the Continuous Offering Period on the terms
and conditions set forth in the Prospectus and in the Trust Agreement. For the avoidance of doubt,
except for Units as described in the Prospectus, no other securities (including, but not limited
to, beneficial interests in other commodity pools) that may be offered by the Trust, any Fund or
the Managing Owner, from time to time, shall be subject to this Agreement, and the Selling Agent
shall have no right to commissions, on-going trailing fees or any other compensation with respect
to such other securities.
(b) The Selling Agent’s agreement to use its best efforts to find acceptable Subscribers shall
not prevent it from acting as a selling agent or underwriter for the securities of other issuers,
including Affiliates, which may be offered or sold during the term of this Agreement.
(c) The Selling Agent shall keep, and make available to the Managing Owner upon request, a
complete ledger in hard copy and computerized form of all Subscribers, which shall include (i) the
exact name, address and social security or employer identification number of each Subscriber, (ii)
the amount invested by each Subscriber, (iii) the number and type of Units subscribed for by each
Subscriber, and (iv) if there is more than one party to the subscription, the holding method
(e.g., joint tenant, tenants in common, etc.) of the joint Subscribers.
(d) In recommending to any Person the purchase or sale of Units, the Selling Agent will (x)
use its best efforts to ensure that an investment in the applicable Fund is a suitable and
appropriate investment for such Person, on the basis of information obtained from such Person
concerning his investment objectives, such Person’s other investments, such Person’s financial
situation and needs, any other information known by the Selling Agent through the review of its
offeree questionnaire completed by such Person and relevant “blue sky” laws; and (y) maintain in
its files for at least six (6) years documents disclosing the basis upon which the determination of
suitability was reached as to each such Person. The Selling Agent shall review each Subscription
Agreement to ensure it is completed and executed properly (checking, among other things, the name,
address and social security number of the Subscriber). The Selling Agent shall also make sure that
each Subscriber’s check is properly made payable to the escrow account for the correct amount as
provided in the Subscription Agreement, or that the applicable wire transfer has been received by
the escrow account for the correct amount as provided in the Subscription Agreement.
(e) During the period when the Prospectus is required to be delivered under the 1933 Act, the
Selling Agent shall promptly notify the Managing Owner upon discovery of any material untrue or
misleading statement regarding it or its operations, or of the occurrence of any event or change in
circumstances which would result in there being any material untrue or misleading statement or a
material omission in the Prospectus or Registration Statement
-7-
regarding it or its operations, or result in the Prospectus not including all information
relating to the Selling Agent required under applicable rules, regulations or laws.
(f) Each party understands and agrees that no subscription will be deemed final and binding on
any new Subscriber until at least five (5) Business Days after the date the Subscriber receives the
Prospectus. In connection therewith, the Selling Agent agrees to indicate in each Subscription
Agreement submitted to the Managing Owner by the Selling Agent the date on which the Prospectus was
delivered to that Subscriber. The Selling Agent agrees to ensure that at least five (5) Business
Days after the date the Subscriber receives the Prospectus have passed before the Selling Agent
accepts any Subscription Agreement from such Subscriber.
(g) During the Initial Offering Period and the Continuous Offering Period for each Fund, all
home offices or branch offices of the Selling Agent shall forward Subscription Agreements to the
Managing Owner no later than noon of the first Business Day following receipt of an duly completed,
executed and acceptable Subscription Agreement from a Subscriber.
(h) The Selling Agent shall instruct all subscribers and prospective subscribers to make
checks for subscriptions payable to the order of the Escrow Agent or to send wire transfers for
subscriptions directly to the Escrow Agent, in each case to the account(s) specified in the Escrow
Agreement. Any checks or wire transfers payable to any other party shall be returned. The Selling
Agent shall promptly, upon receipt of any and all checks, drafts, and money orders received from
prospective subscribers of Units, transmit the same together with a copy of the executed
Subscription Agreement, stating among other things, the name of the purchaser, current address, and
the amount and form (i.e., whether consideration received was in the form of a check, draft or
money order) the of the investment, to the Escrow Agent by noon of the next Business Day after the
Managing Owner receives the executed Subscription Agreement, which such Subscription Agreement the
Selling Agent shall forward to the Managing Owner no later than noon of the next Business Day
following receipt of the check by the Selling Agent. Any check returned unpaid to the Escrow Agent
shall be returned to the Selling Agent. The Managing Owner shall accept or reject subscriptions to
the Funds in accordance with the terms of Section 3.04 of the Trust Agreement. The Managing Owner
have sole responsibility for determining whether Persons are qualified to become Limited Owners and
for accepting subscriptions and determining their validity.
4. Fees and Expenses.
(a) Subject to the last sentence of Section 4(d), for each sale of Units by the
Selling Agent to a Subscriber that is accepted by the Managing Owner, the applicable Fund will pay
a subscription fee (the “Subscription Fee”) equal to 0.5% to 3.0% of the gross offering
proceeds from such sale which Subscription Fee shall be negotiated within this range by the Selling
Agent and the Subscriber at the time of the sale of Units by the Selling Agent to the Subscriber.
If the Subscription Fee is to be split between the Placement Agent and the Selling Agent, such
split is indicated on Annex A. The Selling Agent shall notify the Managing Owner in
writing regarding the Subscription Fee to be charged to a prospective Subscriber when the Selling
Agent submits the Subscription Agreement for such prospective Subscriber to the Managing Owner.
For the avoidance of doubt, no Subscription Fee shall be payable in respect of rejected
subscriptions. If no Subscription Fee is indicated on a Subscription Agreement with a Subscriber,
the Subscription Fee will be 3.0% of the gross offering proceeds from such sale.
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(b) The Subscription Fee shall be payable within 30 days after the later of (i) the date the
Managing Owner accepts a subscription and receives the required written notice regarding the
Subscription Fee from the Selling Agent and (ii) the Initial Closing of the Fund for which Units
are being subscribed.
(c) For each sale of Units by a Selling Agent to a Subscriber that is accepted by the Managing
Owner, the applicable Fund will also pay to such Selling Agent the Trailing Fee, as and when
specified in the Trust Agreement; provided, that no further Trailing Fees shall be payable
from and after such time as the Trailing Fees theretofore paid in respect of such Units, when added
together with the Subscription Fees paid in respect of such Units, are equal to or exceed 10% of
the purchase price of such Units. Subject to the last sentence of Section 4(d), a Selling
Agent may not waive the Trailing Fee applicable to a subscription for Units.
(d) Trailing Fees will be paid to the Selling Agent for on-going services to Limited Owners on
a continuous basis which may include, without limitation, advising Limited Owners of the net asset
values of the Trust, of relevant Funds, and of Units in such Funds; responding to Limited Owners’
inquiries about monthly statements and annual reports and tax information provided to them;
advising Limited Owners whether to make additional capital contributions to the Trust or to redeem
their Units; assisting with redemptions of Units; providing information to Limited Owners with
respect to futures and forward market conditions; and providing further services which may be
requested by Limited Owners. Accordingly, no Trailing Fees will be paid for any month during which
(i) the Selling Agent does not provide such ongoing services, or (ii) the Selling Agent or the
registered representative who is otherwise receiving such Trailing Fees is not properly registered
with the CFTC or any other required federal, state or local entity. No Subscription Fees or
Trailing Fees shall be paid on Units sold to the Managing Owner or any of its members, principals
or Affiliates.
(e) In the event that the offering of Units of any Fund is terminated prior to the Initial
Closing for such Fund, the Selling Agent shall not be entitled to any compensation in connection
with the offering of Units of such Fund, whether or not the Selling Agent shall theretofore have
procured Subscribers for such Fund.
(f) The Managing Owner and the Selling Agent are each aware of the limitations imposed by the
NASD Rules of Fair Practice on the aggregate compensation which may be received by a Selling Agent
in connection with the offering and sale of Units. Accordingly, the Selling Agent will not in any
event accept Trailing Fees from and after such time as the Trailing Fees theretofore paid in
respect of such Units, when added together with the Subscription Fees paid in respect of such
Units, are equal to or exceed 10% of the purchase price of such Units.
5. Covenants of the Managing Owner, the Trust and each Fund. Each of the Managing
Owner, the Trust and each Fund covenant to and agree with the Selling Agent to:
(a) Use their respective reasonable best efforts to cause the Registration Statement to become
effective as promptly as possible. If filing of the Prospectus is required under Rule 424(b) of
the Regulations, the Managing Owner will file the Prospectus, properly completed, pursuant to Rule
424(b) of the Regulations within the time period prescribed and will provide evidence satisfactory
to the Placement Agent of such timely filing.
(b) Notify the Selling Agent immediately (i) when the Registration Statement and any amendment
to the Registration Statement becomes effective or any supplement to the
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Prospectus is filed, (ii) of the receipt of any further comments from the SEC, CFTC, NFA or
any other federal or state regulatory or self-regulatory body with respect to the Registration
Statement, (iii) of any request by the SEC, CFTC, NFA or any other federal or state regulatory or
self-regulatory body for any further amendment to the Registration Statement or any amendment or
further supplement to the Prospectus, (iv) of any material criminal, civil or administrative or
investigative proceedings against or involving the Managing Owner, the Trust or any Fund, (v) of
the issuance by the SEC, CFTC, NFA or any other federal or state regulatory or self-regulatory body
of any order suspending (A) the effectiveness of the Registration Statement under the 1933 Act, (B)
the registration or NFA membership of the Managing Owner as a “commodity pool operator” or
“commodity trading adviser”; or (C) the registration of Units under the “blue sky” or securities
laws of any state or other jurisdiction, (vi) any order or decree enjoining the offering or the use
of the then-current Prospectus or any promotional material, or (vii) of any threatened action of
the type referred to in clauses (iii) through (vi) of which the Managing Owner becomes aware. In
the event any order of the type referred to in clause (v) or (vi) is issued, the Managing Owner
agrees to use its reasonable best efforts to attempt to obtain a lifting or rescinding of such
order at the earliest feasible date.
(c) During the period when the Prospectus is required to be delivered pursuant to the 1933
Act, comply with all requirements imposed upon them by the 1933 Act, the SEC regulations, the CE
Act and the CFTC regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of Units during such period in accordance with the provisions hereof and as
set forth in the Prospectus.
(d) If any event shall occur as a result of which it is necessary, in the reasonable opinion
of the Managing Owner, to amend or supplement the Prospectus (i) to make the Prospectus not
materially misleading in the light of the circumstances existing at the time it is delivered to a
Subscriber, or (ii) to conform with applicable CFTC or SEC regulations, notify the Selling Agent
and promptly prepare and file with the SEC an appropriate amendment or supplement which will
correct such statement or omission or which will effect such compliance and will use its reasonable
best efforts to have any such amendment declared effective as soon as reasonably possible.
(e) Deliver or cause to be delivered without charge to the Selling Agent such number of copies
of the Prospectus as may reasonably be requested by the Selling Agent; and as soon as the
Registration Statement or any amendment thereto becomes effective, or a supplement thereto is
filed, to deliver or cause to be delivered without charge to the Selling Agent two (2) copies of
the Registration Statement or such amendment thereto, including exhibits, as the case may be, and
two (2) copies of any supplement thereto; and to deliver or cause to be delivered without charge to
the Selling Agent such number of copies of the Prospectus, the Registration Statement, and
amendments and supplements thereto, if any, without exhibits, as the Selling Agent may reasonably
request for the purposes contemplated by the 1933 Act.
(f) Endeavor in good faith and in cooperation with the Placement Agent, at or prior to the
time the Registration Statement becomes effective, to qualify Units for offering and sale under the
“blue sky” or securities laws of such jurisdictions as the Placement Agent may designate and the
Managing Owner shall agree. In each jurisdiction where such qualification shall be effected, the
Managing Owner will, unless the Placement Agent agrees in writing that such action is not at the
time necessary or advisable, file and make such statements or reports at such times as are or may
be required by the laws of such jurisdiction and will keep all filings current.
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(g) Use its best efforts to keep the Prospectus and the Registration Statement current and
effective by filing post-effective amendments, as necessary, during the Offering.
(h) Invest the net proceeds received by it from the Offering in the manner set forth in the
Prospectus.
(i) Comply with all registration, filing, and reporting requirements of the Exchange Act which
may from time to time be applicable to the Trust.
(j) Comply with all undertakings contained in the Registration Statement.
(k) When and if required, file on a timely basis with the SEC an appropriate form to register
the Units pursuant to Section 12(g) under the Exchange Act.
6. Covenants of the Selling Agent. The Selling Agent covenants to and agrees with the
Managing Owner, the Trust and each Fund to:
(a) Make a best efforts public offering of the Units as soon as the Placement Agent deems it
reasonably advisable on or after the Effective Date (as defined in Section 11(a)), upon and
subject to the terms and conditions contained in this Agreement and in compliance with all
applicable securities laws, and to perform all of its responsibilities hereunder.
(b) Preserve the confidentiality of any proprietary or non-public information or data provided
to the Selling Agent by the Managing Owner or the Placement Agent.
(c) Fully disclose to prospective subscribers the capacity in which the Selling Agent is
contacting them and the Selling Agent’s relationship with the Managing Owner and the Placement
Agent.
(d) Not make an offer to sell or solicit an offer to buy or sell Units in a state or other
jurisdiction until the Managing Owner has notified the Placement Agent that the Units have been so
registered or qualified, or are exempt from registration or qualification, with the securities
authorities in such state or other jurisdiction.
(e) Maintain in full force and effect, and cause its personnel involved in the activities
contemplated hereunder to maintain in full force and effect, all governmental, regulatory and
self-regulatory registrations, approvals, memberships and licenses required to perform its
obligations under this Agreement and to receive compensation therefor (including but not limited to
registration as a broker-dealer with the SEC, membership in the NASD, registration with the
relevant regulatory authority in each state in which the Selling Agent will solicit prospective
subscribers, registration with the CFTC as an futures commission merchant or introducing broker and
membership in the NFA) during the term of this Agreement and for such time as the Selling Agent and
such personnel shall receive compensation hereunder.
(f) Comply with the applicable requirements of the 1933 Act (including the delivery of a
Prospectus to each prospective subscriber as required by the 1933 Act), the Exchange Act, the CE
Act, the rules and regulations promulgated thereunder, and the rules and regulations of the NASD,
CFTC, and NFA, including, without limitation (i) determining suitability of a purchase of Units for
each prospective subscriber through the use of an offeree questionnaire, (ii) obtaining a written
agreement from each prospective subscriber to purchase Units setting forth
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the identity and quantity of the Units to be purchased and (iii) delivering a Prospectus to a
prospective subscriber at least five (5) Business Days prior to any purchase of Units.
(g) Not, and not permit any Person acting on its behalf to, (i) provide any information or
make any representations relating to the Managing Owner, any Fund, the Trust, the Placement Agent
or the Offering other than as contained in the Prospectus, or (ii) state that it is authorized to
act as agent for the Managing Owner, any Fund, the Trust or the Placement Agent for any purpose
other than as expressly set forth in this Agreement.
(h) Not take any of the following actions against the Trust or any Fund: (1) seek a decree or
order by a court having jurisdiction in the premises (A) for relief in respect of the Trust or any
Fund in an involuntary case or proceeding under the United States Bankruptcy Code or any other
federal or state bankruptcy, insolvency, reorganization, rehabilitation, liquidation or similar
law, or (B) adjudging the Trust or any Fund bankrupt or insolvent, or seeking reorganization,
rehabilitation, liquidation, arrangement, adjustment or composition of or in respect of the Trust
or any Fund under the United States Bankruptcy Code or any other applicable federal or state law,
or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or any Fund or of any substantial part of any of their respective
properties, or ordering the winding up or liquidation of any of its affairs; (2) seek a petition
for relief, reorganization or to take advantage of any law referred to in the preceding clause; or
(3) file an involuntary petition for bankruptcy (collectively, a “Bankruptcy or Insolvency
Action”).
(i) For any obligations due and owing to it by any Fund, look solely and exclusively to the
assets of such Fund or the Managing Owner (solely to the extent of the General Units owned by the
Managing Owner in such Fund), if the Managing Owner has liability in its capacity as Managing
Owner, to satisfy the Selling Agent’s claims, and not seek to attach or otherwise assert a claim
against the other assets of the Trust or any other Fund, whether or not there is a Bankruptcy or
Insolvency Action taken. The parties agree that this provision will survive the termination of
this Agreement, whether terminated in a Bankruptcy or Insolvency Action or otherwise.
7. Compliance with NASD Rules and General Laws.
(a) It is understood that the Selling Agent has no commitment with regard to the sale of Units
other than to use its best efforts and to comply with the provisions of this Agreement and the
Trust Agreement. In connection with the offer, sale and distribution of Units, the Selling Agent
represents and warrants that it will comply fully with all applicable laws and regulations, and the
rules, policy statements and interpretations of the SEC, the NASD, the CFTC, the NFA, state
securities administrators and any other regulatory or self-regulatory body. In particular, and not
by way of limitation, the Selling Agent represents and warrants that it is familiar with Rule 2810
of the NASD Conduct Rules and that it will comply fully with all the terms thereof in connection
with the Offering and sale of Units. The Selling Agent will not execute any sales of Units from a
discretionary account over which it has control without prior written approval of the customer in
whose name such discretionary account is being maintained.
(b) The Selling Agent agrees not to recommend the purchase of Units to any Person unless the
Selling Agent shall have reasonable grounds to believe, on the basis of information obtained from
the Person concerning, among other things, the Person’s investment objectives, other investments,
financial situation and needs, that: (1) (to the extent relevant for
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the purposes of Rule 2810 and giving due consideration to the fact that the Trust and each
Fund is in no respects a “tax shelter”) the Person is or will be in a financial position
appropriate to enable the Person to realize to a significant extent the benefits of the applicable
Fund, including the tax benefits (if any) described in the Prospectus; (2) the Person has a fair
market net worth sufficient to sustain the risks inherent in participating in the applicable Fund;
(3) the Person satisfies the requirements to become a Subscriber on the basis set forth in the
Prospectus, the Subscription Agreement and the state suitability requirements contained therein;
(4) acceptance of the Person’s subscription will not otherwise breach any laws, rules and
regulations designed to avoid money laundering applicable to either the Selling Agent, the Managing
Owner, the Trust and each Fund; and (5) the Units are otherwise a suitable investment for the
Person. The Selling Agent agrees to maintain such records as are required by the applicable rules
of the NASD, SEC, CFTC and the NFA for purposes of determining investor suitability for the time
periods otherwise required by the SEC, NASD, CFTC and NFA. In connection with making the foregoing
representations and warranties, the Selling Agent further represents and warrants that it has,
among other things, examined the Prospectus including, without limitation the sections listed below
and obtained such additional information from the Managing Owner regarding the information set
forth thereunder as the Selling Agent has deemed necessary or appropriate to determine whether the
Prospectus adequately and accurately discloses all material facts relating to an investment in the
applicable Funds and provides an adequate basis to Persons for evaluating an investment in the
Units: “RISK FACTORS”; “BREAK-EVEN ANALYSIS”; “DESCRIPTION OF THE TRUST, TRUSTEE, MANAGING OWNER
AND AFFILIATES”; “OTHER PRIVATE ACCOUNTS AND POOLS”; “MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS”; “ACTUAL AND POTENTIAL CONFLICTS OF INTEREST”;
“CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS”; “FEES AND EXPENSES”; “THE OFFERING”; “WHO MAY
SUBSCRIBE”; “SUMMARY OF MATERIAL AGREEMENTS”; and “MATERIAL U.S. FEDERAL INCOME TAX
CONSIDERATIONS.”
(c) In connection with making the representations and warranties set forth in this section,
the Selling Agent has not relied on inquiries made by or on behalf of any other parties.
(d) The Selling Agent agrees to inform all prospective subscribers of Units of all pertinent
facts relating to the liquidity and marketability of Units as set forth in the Prospectus.
(e) The Selling Agent represents and warrants that it is familiar with Rule 2710 of the NASD
Conduct Rules and covenants and agrees with the Trust, each Fund and the Managing Owner that it
will comply fully with all the terms thereof in connection with the Offering and sale of the Units.
(f) The Selling Agent represents, warrants and covenants that it: (1) maintains anti-money
laundering policies and procedures that comply with the Bank Secrecy Act of 1970, as amended, and
applicable federal anti-money laundering regulations, including policies and procedures to verify
the identity of prospective subscribers (“AML Laws, Regulations and Policies”); (2)
complies with AML Laws, Regulations and Policies; (3) will promptly deliver to the Managing Owner,
to the extent permitted by applicable law, notice of any AML Laws, Regulations and Policies
violation, suspicious activity, suspicious activity investigation or filed suspicious activity
report that relates to any prospective subscriber for Units; and (4) will cooperate with the
Managing Owner and deliver information reasonably requested by the
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Managing Owner concerning Subscribers that purchased Units sold by the Selling Agent necessary
for the Managing Owner or the Trust to comply with AML Laws, Regulations and Policies.
(g) The Selling Agent agrees that the Managing Owner has not assumed, nor will it assume, any
responsibility or obligation concerning the Selling Agent’s right to act as broker-dealer with
respect to the Units in any jurisdiction.
8. Conditions of Selling Agent’s Obligations.
(a) The obligations of the Selling Agent to undertake the placement of Units as provided
herein shall be subject (unless waived by the Selling Agent) to the continuing accuracy of the
representations and warranties of the Managing Owner, the Trust and the Funds contained herein, to
the performance by the Managing Owner, the Trust and the Funds of their respective obligations
hereunder and to the following conditions:
(i) 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 or any similar purpose shall
have been initiated or threatened by the SEC, the NASD, the NFA, or the CFTC; and all
requests for additional information on the part of the SEC, the NASD, the NFA and the CFTC,
shall have been complied with to the reasonable satisfaction of the Selling Agent and its
counsel; and
(ii) The NASD, upon review of the terms of the Offering, shall not have objected to the
Selling Agent’s participation in the Offering or its compensation therefrom.
(b) The occurrence of the Initial Closing shall be subject (unless waived by the Placement
Agent) to the continuing accuracy of the representations and warranties of the Managing Owner, the
Trust and the Funds contained herein as of and through the Initial Closing, to the performance by
the Managing Owner, the Trust and the Funds of their respective obligations hereunder as of and
through the Initial Closing and to the conditions to the Initial Closing under the Placement Agent
Agreement having been satisfied or waived by the Placement Agent.
9. Indemnification and Contribution.
(a) The Selling Agent shall not be liable to any Fund, the Trust, the Trustee or the Managing
Owner for any loss, liability, claim, damage, expense, fine, penalty, cost or expense (including,
without limitation, attorneys’ and accountants’ fees and disbursements), judgment and/or amount
paid in settlement (collectively, “Losses”) caused by any act or omission of the Selling
Agent in connection with the performance of services under this Agreement, except as a result of
(1) acts or omissions to act on the part of the Selling Agent or the officers, directors,
shareholders, principals, members, employees, agents or Affiliates (collectively, the
“Principals and Affiliates”) of the Selling Agent which constitute negligence or
misconduct, or (2) any breach of any of the representations, warranties, covenants or agreements of
the Selling Agent in this Agreement. The Selling Agent hereby agrees to indemnify and hold
harmless each Fund, the Trust, the Trustee, the Managing Owner and the Principals and Affiliates of
each of the foregoing from and against all Losses incurred by any of them arising out of or based
upon any matter for which the Selling Agent is liable under this Section 9(a).
-14-
(b) The Managing Owner and each Fund, solely out of the Contracting Fund Assets (as defined
below in Section 14), hereby agrees indemnify and hold harmless the Selling Agent and its
Principals and Affiliates from and against any and all Losses to which such Persons may become
subject arising out of or in connection with (i) this Agreement, (ii) the transactions contemplated
hereby or (iii) the fact that the Selling Agent is or was a selling agent of the Trust and the
Funds, in each case arising out of or based upon (1) any untrue statement of material fact
contained in this Agreement, the Registration Statement, the Prospectus or any application or
written communication executed by the Managing Owner or the Trust filed in any jurisdiction in
order to qualify Units under the securities laws thereof (collectively, the “Documents”),
(2) any omission from the Documents of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (3) any breach of any representation, warranty,
covenant or agreement made by the Managing Owner, the Trust or any Fund in this Agreement, except
to the extent that any such Losses arise out of, relate to, or are based upon any matter (x) for
which the Selling Agent would be liable under Section 9(a) or (y) relating to the Placement
Agent, the Placement Agent Agreement, an Additional Selling Agent (other than the Selling Agent) or
an Additional Selling Agent Agreement (other than this Agreement). For the sake of clarity, if a
claim for indemnification relates to a specific Fund, such Fund, and no other Fund, shall be
responsible for indemnifying the Selling Agent and its Principals and Affiliates in accordance with
this Section 9(b).
(c) Indemnification Procedure. The Person(s) making a claim for indemnification under
this Section 9 is/are referred to herein as the “Indemnified Party” and the
Person(s) against whom such claims are asserted under this Section 9 is/are referred to
herein as the “Indemnifying Party.” All claims by an Indemnified Party shall be asserted
and resolved as follows
(i) In the event that (A) any claim for which an Indemnifying Party would be liable to
an Indemnified Party hereunder is asserted against or sought to be collected from such
Indemnified Party by a third party (a “Third Party Action”) or (B) any Indemnified
Party hereunder should have a claim against any Indemnifying Party hereunder which does not
involve a claim being asserted against or sought to be collected from it by a third party (a
“Direct Action”), the Indemnified Party shall with reasonable promptness notify in
writing the Indemnifying Party of such claim, specifying, to the extent then known to the
Indemnified Party, the basis on which the claim for indemnification is made, the facts
giving rise to or the alleged basis of the claim, and the amount (which may be estimated) of
claim liability (a “Claim Notice”), together with a copy of the document (if any) by
or in which the Third Party Action is commenced or asserted; provided, that any
failure to give such notice shall not constitute a waiver of any rights of the Indemnified
Party except to the extent the rights of the Indemnifying Party are actually prejudiced as
result of such delay or lack of detail.
(ii) Within thirty (30) days after receipt of a Claim Notice, the Indemnifying Party
may (A) by giving written notice thereof to the Indemnified Party, elect to assume the
defense of such Third Party Action at its sole cost and expense or (B) object to the claim
for indemnification set forth in the Claim Notice. The Indemnifying Party shall have the
right to assume control of the defense of or settle or otherwise dispose of such Third Party
Action on such terms as the Indemnifying Party deems appropriate; provided,
however, that (x) the Indemnified Party shall be entitled, at its own expense (which
such expense shall not be deemed to be a Loss), and without unreasonable interference with
the actions of the Indemnifying Party, to participate in the
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defense of Third Party Actions; (y) the Indemnified Party shall not have the right to
assume control of a Third Party Action if the Indemnified Party shall have been advised by
counsel that, under applicable standards of professional responsibility, a conflict will
arise in the event both the Indemnified Party and the Indemnified Party are represented by
the same counsel with respect to the Third Party Action, in which case such Indemnified
Party shall have the right to be represented by separate counsel with respect to the matters
to which the conflict pertains, and all Losses in connection therewith shall be reimbursed
by the Indemnifying Party from time to time upon demand of the Indemnified Party; and (z)
the Indemnifying Party shall obtain the prior written consent of the Indemnified Party
before entering into any settlement, compromise, admission or any acknowledgment of the
validity of a Third Party Action or any liability in respect thereof, which consent shall
not be unreasonably withheld; provided, that the Indemnifying Party shall not
consent to the entry of any judgment or enter into any settlement that does not include a
complete release of all claims against each Indemnified Party in respect of such Third Party
Action and any related facts, circumstances or occurrences; and provided,
further, that no consent of the Indemnified Party shall be necessary if the
settlement, compromise, admission or any acknowledgment involves solely the payment of
monetary damages that are paid by the Indemnifying Party.
(iii) Unless the Indemnifying Party objects in writing to a Direct Claim within thirty
(30) days after receipt of the Claim Notice, such Direct Claim shall be conclusively deemed
to be a liability of the Indemnifying Party and the Indemnified Party shall be entitled to
obtain the appropriate number of escrowed shares, in accordance with the terms of the Pledge
Agreement. If the Indemnifying Party objects in writing, such dispute shall be resolved in
accordance with Section 19.
(d) In the event that a Person seeks indemnification in a Third Party Action covering both
matters for which indemnification is and is not covered hereunder, such Person shall be indemnified
only for the Losses covered hereunder.
(e) None of the indemnifications contained in this Agreement shall be applicable with respect
to default judgments, confessions of judgment or settlements entered into by a Person claiming
indemnification without the prior written consent of the Indemnifying Party.
(f) Notwithstanding the provisions of this Section 9, the Selling Agent shall not be
indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of
federal or state securities Laws unless (i) there has been a successful adjudication on the merits
of each count involving alleged securities Law violations as to the particular Indemnitee, (ii)
such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction
as to the particular Indemnitee or (iii) a court of competent jurisdiction approves a settlement of
the claims against a particular Indemnitee and finds that indemnification of the settlement and
related costs should be made.
(g) In any claim for indemnification for federal or state securities Law violations, the
person seeking indemnification shall place before the court the position of the SEC and the
position of any other applicable state securities division which requires disclosure with respect
to the issue of indemnification for securities law violations.
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(h) The indemnification provisions of this Agreement shall survive the termination of this
Agreement. The indemnification agreements in this Section 9 shall be in addition to any
liability which the Selling Agent may otherwise have. Nothing contained in this Section 9
or elsewhere in this Agreement shall be construed as an admission that the Selling Agent is an
“underwriter” of the Units within the meaning of the 1933 Act.
10. Representations and Agreements to Survive Delivery. All representations,
warranties, covenants, and agreements contained in this Agreement or contained in certificates or
documents delivered pursuant to this Agreement shall be deemed to be representations, warranties,
covenants, and agreements at the Effective Date (defined below), and shall survive until the
earlier of (i) the termination of the Continuous Offering Period, or (ii) the termination of this
Agreement (with those Sections specified in Section 12 surviving indefinitely).
11. Effectiveness of Agreement; Term and Termination.
(a) This Agreement shall become effective at 9:30 a.m., New York time, on the first full
Business Day following the date the Registration Statement becomes effective with the SEC (the
“Effective Date”). Unless terminated earlier as set forth in the remainder of this
Section 11, this Agreement shall terminate with respect to a Fund at the conclusion of the
Continuous Offering Period for such Fund (with those Sections specified in Section 12
surviving indefinitely).
(b) The Selling Agent may terminate this Agreement with respect to the Trust or any Fund(s)
upon 30 days’ advance written notice to the applicable Fund(s), the Trust and the Managing Owner,
in the event (i) there has 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 applicable Fund(s), the Trust or the Managing Owner which, in the reasonable judgment of the
Placement Agent, renders it inadvisable to proceed with the Offering; (ii) the Registration
Statement and/or the Prospectus has not been amended reasonably promptly after written request by
the Placement Agent for it to be so amended because an event has occurred which, in the reasonable
opinion of securities counsel for the Placement Agent, should be set forth in the Registration
Statement or the Prospectus in order to make the statements therein not misleading; (iii) there has
been a general suspension of, or a general limitation on prices for, trading in commodity futures
or option contracts on commodity exchanges in the United States or other commodities instruments,
or there is any other national or international calamity or crisis in the financial markets of the
United States to the extent that it is determined by the Placement Agent, in its reasonable
discretion, that such limitations would materially impede the Trust’s or the applicable Fund’s
trading activities or make the offering or delivery of Units impossible or impractical; (iv) there
has been a declaration of a banking moratorium by federal, New York or Delaware authorities or (v)
the Placement Agent Agreement has been terminated by the Placement Agent in accordance with its
terms.
(c) The Managing Owner, the Trust and/or the Fund(s) (solely with respect to such Fund(s)) may
terminate this Agreement for any or no reason upon 15 days’ advance written notice to the Selling
Agent; provided, that in the event this Agreement is terminated only with respect to
certain Funds, this Agreement shall remain in full force and effect with respect to the remaining
Funds, the Trust and the Managing Owner.
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12. Survival. Notwithstanding that this Agreement shall not become effective, shall
terminate or shall otherwise not be carried out, Sections 3(c), 4, 6(b),
6(c), 6(g), 6(h), 6(i) and 9 through 20 shall
survive and remain in full force and effect.
13. Limitation of Limited Owner Liability. This Agreement has been made and executed
by and on behalf of the Funds, the Trust and the Managing Owner. The obligations of the Funds, the
Trust and/or the Managing Owner set forth herein are not binding upon any of the Limited Owners
individually but are binding only upon the assets and property identified herein. No resort shall
be had to the assets of other Funds or the Limited Owners’ assets or personal property, for the
satisfaction of any obligation or claim hereunder.
14. Subordination of Certain Claims and Rights. Each of the Managing Owner and the
Selling Agent agrees and consents (the “Consent”) to look solely to the applicable Fund
(the “Contracting Fund”) and its assets (the “Contracting Fund Assets”) for
payment. The Contracting Fund Assets include only those funds and other assets that are paid, held
or distributed to the Trust on account of and for the benefit of the Contracting Fund, including,
without limitation, funds delivered to the Trust for the purchase of Units in a Fund. In
furtherance of the Consent, each of the Managing Owner and the Selling Agent agrees that any debts,
liabilities, obligations, indebtedness, expenses and claims of any nature and of all kinds and
descriptions (collectively, “Claims”) incurred, contracted for or otherwise existing
arising from, related to or in connection with the Trust and its assets and the Contracting Fund
and the Contracting Fund Assets, shall be subject to the following limitations:
(a) Except as set forth below, the Claims, if any, of the Managing Owner and the Selling Agent
(the “Subordinated Claims”) incurred, contracted for or otherwise existing, arising from,
related to or in connection with the Contracting Fund and the Contracting Fund Assets and the
assets of the Trust shall be expressly subordinate and junior in right of payment to any and all
other Claims against the Trust and the Contracting Fund and any of their respective assets which
may arise as a matter of Law or pursuant to any Contract; provided, however, that
bona fide Claims of either the Managing Owner or the Selling Agent, if any, against the Contracting
Fund shall be pari passu and equal in right of repayment and distribution with all other bona fide
Claims against the Contracting Fund;
(b) The Managing Owner and the Selling Agent will not take, demand or receive from any Fund or
the Trust or any of their respective assets (other than the Contracting Fund or its assets) any
payment for the Subordinated Claims, except in accordance with this Section 14;
(c) Subject to this Section 14, the Claims of the Managing Owner and the Selling Agent
with respect to the Contracting Fund shall only be asserted and enforceable against the Contracting
Fund’s assets and the Managing Owner and its assets, and shall not be asserted or enforceable for
any reason whatsoever against the assets of any other Fund or the Trust generally;
(d) If the Claims of the Managing Owner or the Selling Agent against the Contracting Fund or
the Trust are secured in whole or in part, each of the Managing Owner and the Selling Agent hereby
waives (under section 1111(b) of the Bankruptcy Code (11 U.S.C. § 1111(b)) any right to have any
deficiency Claims (which deficiency Claims may arise in the event such security is inadequate to
satisfy such Claims) treated as unsecured Claims against the Trust or any other Fund, as the case
may be;
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(e) In furtherance of the foregoing, if and to the extent that the Managing Owner and/or the
Selling Agent receive monies in connection with the Subordinated Claims from a Fund or the Trust
(or their respective assets) other than the Contracting Fund or the Managing Owner and their
respective assets and except as permitted by this Section 14, the Managing Owner and/or the
Selling Agent, as the case may be, shall be deemed to hold such monies in trust and shall promptly
remit such monies to the Fund or the Trust that paid such amounts for distribution by such Fund or
the Trust in accordance with the terms hereof; and
(f) The provisions of this Section 14 shall apply at all times notwithstanding that
the Claims are satisfied, and notwithstanding that the agreements in respect of such Claims are
terminated, rescinded or canceled.
15. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or
by Federal Express, Express Mail or similar overnight delivery or courier service or delivered (in
person or by telecopy, telex or similar telecommunications equipment) against receipt to the party
to whom it is to be given, (i) if to the Managing Owner, the Trust or the Funds, at 0000 Xxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Chief Executive Officer; with a copy to: Xxxxxxx
& Xxxxxx LLP, 000 Xxxx 00 Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X.
Xxxxxx, Esq.; (ii) if to the Selling Agent, at [ ], Attention:
with
a copy to: ; or (iii) in either case, to such other address as
the party shall have furnished in writing in accordance with the provisions of this Section
15. Any notice or other communication given shall be deemed given at the time of receipt by
the intended recipient party thereof.
16. Binding Agreement. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Funds, the Trust, the Managing Owner, the Selling Agent (and solely with
respect to indemnification or contribution, those persons and entities referred to in Section
9 who are entitled to indemnification or contribution), and their respective successors, and
assigns (which shall not include any prospective subscriber or Subscriber for Units), and no other
Person shall have or be construed to have any legal or equitable right, remedy, or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
17. Invalidity. If any term or provision in this Agreement shall be held to be
illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or
provision or part shall to that extent be deemed not to form part of this Agreement but the
enforceability of the remainder of this Agreement shall not be affected.
18. Governing Law. This Agreement shall be construed in accordance with the laws of
Delaware, without giving effect to its conflict of law principles.
19. Consent to Jurisdiction. All disputes arising out of this Agreement and any
document or instrument delivered pursuant to, in connection with or simultaneously with this
Agreement, including the interpretation, breach or termination of any of the foregoing, shall be
resolved exclusively through the state and Federal courts situated of Delaware. The parties hereby
submit to the exclusive jurisdiction and venue for any such dispute in such courts, as well as to
all appellate courts to which an appeal may be taken from such trial courts. Each of the parties
expressly waives, to the fullest extent permitted by law, the right to move to dismiss or
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transfer any action brought in such courts on the basis of any objection to personal
jurisdiction, venue or inconvenient forum in any of such courts.
20. Fund Disclaimer. Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge and agree that the Trust is organized in series pursuant to Sections
3804(a) and 3806(b)(2) of the Trust Act. As such, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to each series of the Trust shall be
enforceable against the assets of such series of the Trust only, and not against the assets of the
Trust generally or the assets of any other series of the Trust or against the Trustee. There may
be several series of the Trust created pursuant to the Trust Agreement.
21. Assignment. This Agreement may not be assigned, novated or otherwise transferred
by operation of law or otherwise by any party without the prior written consent of all of the other
parties, which consent shall not be unreasonably withheld. Any change of control of a party shall
be deemed an assignment of this Agreement that requires the prior written consent of the other
parties. For purposes of this Agreement, “change of control” means any merger, consolidation, sale
of all or substantially all of the assets or sale of a substantial block of stock, of a party. Any
such assignment, novation or transfer by one party not in accordance with this provision shall be a
material breach of this Agreement and shall be grounds for immediate termination thereof by the
non-breaching parties, in addition to any other remedies that may be available under this Agreement
or at law or in equity to the non-breaching parties.
22. Integration. This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
23. Counterparts. This Agreement may be executed in several counterparts, and all so
executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that
all the parties are not signatory to the original or the same counterpart.
24. Captions. Section and paragraph captions contained in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit, or extend or
describe the scope of this Agreement or the intent of any provision hereof.
[Remainder of page intentionally blank]
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If the foregoing correctly sets forth the understanding between the Selling Agent and the
Managing Owner and the Trust, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Yours very truly,
| XXXXXXXXXX RAW MATERIALS (U.S.) TRUST | XXXXXXXXXX RAW MATERIALS MANAGEMENT, LLC | |||||||||||||||
| By: | Xxxxxxxxxx Raw Materials | By: | ||||||||||||||
| Management, LLC Managing Owner | Name: | |||||||||||||||
| Title: | ||||||||||||||||
| By: | ||||||||||||||||
| Name: | ||||||||||||||||
| Title: | ||||||||||||||||
Accepted and agreed as of the date first written above:
| [ ] | OAKBROOK INVESTMENT BROKERS, INC. | |||||||||||||
By:
|
By: | |||||||||||||
| Name: | Name: | |||||||||||||
| Title: | Title: | |||||||||||||
Annex A
Allocation of Subscription Fee Between Placement Agent and Selling Agent
[Insert as applicable]
