EXHIBIT 1.1
SELLING AGREEMENT
World Monitor Trust III
(A Delaware Statutory Trust)
$500,000,000
Units of Beneficial Interest
Preferred Investment Solutions Corp.
Managing Owner
March _____, 2005
World Monitor Trust III
Selling Agreement
TABLE OF CONTENTS
Page
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Section 1. Representations and Warranties of the Managing Owner.......................................................2
Section 2. Representations and Warranties of the Trading Advisors.....................................................5
Section 3. [RESERVED].................................................................................................7
Section 4. Offering and Sale of Units.................................................................................7
Section 5. Compliance with NASD Conduct Rule 2810 and General Laws...................................................10
Section 6. Blue Sky Survey...........................................................................................11
Section 7. Covenants of the Managing Owner...........................................................................11
Section 8. Covenants of the Trading Advisors.........................................................................12
Section 9. Payment of Expenses and Fees..............................................................................13
Section 10. Conditions of Closing.....................................................................................13
Section 11. Indemnification, Contribution and Exculpation.............................................................16
Section 12. Consent...................................................................................................18
Section 13. Status of Parties.........................................................................................19
Section 14. Representations, Warranties and Agreements to Survive Delivery............................................19
Section 15. Termination...............................................................................................19
Section 16. Survival..................................................................................................19
Section 17. Notices and Authority to Act..............................................................................19
Section 18. Parties...................................................................................................19
Section 19. GOVERNING LAW.............................................................................................19
Section 20. Consent to Jurisdiction...................................................................................20
Section 21. Counterparts..............................................................................................20
Section 22. Series Disclaimer and Acknowledgment......................................................................20
Exhibit A -- Correspondent Selling Agent Agreement
World Monitor Trust III
(A Delaware Statutory Trust)
$500,000,000
Units of Beneficial Interest
Initially $100 per Unit
SELLING AGREEMENT
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March ____, 2005
Kenmar Securities, Inc.
00 Xxxxxx Xxxxxx
Building Two South, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Dear:
Preferred Investment Solutions Corp., a Connecticut corporation (the
"Managing Owner"), has caused the formation, on September 28, 2004, of a
statutory trust pursuant to the Delaware Statutory Trust Act (the "Delaware
Act") under the name, World Monitor Trust III (the "Trust"), for the purposes
of engaging in the speculative trading of commodity futures and forward
contracts, commodity options and other commodity interests. Wilmington Trust
Company, a Delaware banking 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. Units of beneficial
interest in the Trust (the "Units") will be issuable in multiple series (the
"Series"), each separately managed indirectly by one or more different trading
advisors (each a "Trading Advisor" and, collectively, the "Trading Advisors"),
each of which is registered with the Commodity Futures Trading Commission (the
"CFTC") as a commodity trading advisor under the Commodity Exchange Act, as
amended (the "CE Act"), and is a member of the National Futures Association
(the "NFA") in such capacity. Each Series of Units will be separately valued
and its assets will be segregated from the assets of the other Series. Holders
of Units ("Limited Owners") will have the right to exchange, through
redemption and purchase, Units of one Series for Units of any other Series.
The Trust proposes to offer to the public and to sell to Subscribers (as
hereinafter defined) acceptable to the Managing Owner, the Units upon the
terms and subject to the conditions set forth in this Selling Agent Agreement
(the "Agreement") and the Registration Statement (as hereinafter defined) and
the Prospectus (as hereinafter defined) included therein referred to below. A
maximum of $15,000,000 for each of Series G and Series H, $7,500,000 for
Series I and $50,000,000 for Series J will be offered and sold during the
Initial Offering Period for such Series, and thereafter additional Units will
be offered and sold during the Continuing Offering Period for each Series, as
such terms are hereinafter defined. The Units of each Series will be offered
at $100 per Unit during the Initial Offering Period and thereafter at the Net
Asset Value per Unit of the applicable Series ("Series Net Asset Value"). All
capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Prospectus. Kenmar Securities Inc., a Connecticut
corporation (the "Selling Agent") shall be a Selling Agent for the Trust. In
addition, the Selling Agent may, with the consent of the Managing Owner,
distribute Units through the use of "introducing broker" correspondents
("Correspondents"), provided such Correspondents are duly registered as
broker-dealers or exempt from the requirement of being so registered, pursuant
to the terms of the Correspondent Selling Agent Agreement attached hereto as
Exhibit A.
Each Series of the Trust desires to raise capital as herein provided
by the sale of Units, the purchasers of which will become beneficiaries
("Unitholders") of such Series of the Trust, and the Selling Agent hereby
agrees to use its best efforts to market the Units pursuant to the terms
hereof. Accordingly, the Selling
Agent, the Managing Owner, the Trading Advisors and the Trust, intending to be
legally bound, hereby agree as follows.
All agreements, representations and undertakings expressed herein to
be made by the "Trading Advisors" shall be construed to be made by each
Trading Advisor severally and individually (and not jointly), and only in
respect of its conduct and undertakings with respect to this Agreement, not
that of the other Trading Advisors.
Section 1. Representations and Warranties of the Managing Owner. The
Managing Owner represents and warrants to the Selling Agent and the Trading
Advisors as follows:
(a) A registration statement on Form S-1 for the Trust and as a part
thereof a combined prospectus for all Series with respect to all of the
Units being offered (which registration statement, together with all
amendments thereto, at the times and in the forms declared effective by
the Securities and Exchange Commission (the "SEC") shall be referred to
herein as the "Registration Statement", and which prospectus in final
form, together with all amendments and supplements thereto, shall be
referred to herein as the "Prospectus"), prepared in full conformity 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, have been
filed with the SEC, the National Association of Securities Dealers, Inc.
(the "NASD") and the NFA pursuant to the 1933 Act, 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 Selling Agent;
(b) To the best of the Managing Owner's knowledge, no order
preventing or suspending the effectiveness of the Registration Statement
or use of the Prospectus or any previous prospectus with respect to the
Units has been issued by the SEC, the CFTC, the NASD, the NFA or any
other federal, state or other governmental agency or body. The
Registration Statement contains all statements which are required to be
made therein, conforms in all material respects to the requirements of
the 1933 Act and the CE Act and the rules and regulations of the SEC and
the CFTC, respectively, thereunder, and does not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein (with
respect to the Prospectus, in light of the circumstances in which they
were made) not misleading; and, when the Registration Statement becomes
effective under the 1933 Act and at all times subsequent thereto up to
and including the Initial Closing Time for each Series, and thereafter up
to and including each subsequent closing date during the Continuous
Offering Period, as such terms are hereinafter defined, 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, 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 include 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 this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Trust or the Managing Owner by the Selling Agent, the Trustee, any
commodity broker who has contracted to provide commodity brokerage
services to the Trust (each, a "Commodity Broker") or their respective
agents or by or on behalf of any Trading Advisor or any other commodity
trading advisor (an "Other Advisor") engaged by the Managing Owner on
behalf of the Trust for use therein, all without prejudice to any defense
that the Selling Agent may have based upon its "due diligence"
investigation under the 1933 Act;
(c) The certificate of trust (the "Certificate of Trust") pursuant
to which the Trust has been formed and the Amended and Restated
Declaration of Trust and Trust Agreement of the Trust (the "Trust
Agreement") provide for the subscription for and sale of the Units of the
Trust; all action required to be taken by the Managing Owner and the
Trust as a condition to the sale of the Units to qualified subscribers
therefor has been, or prior to the Initial Closing Time for each Series
will have been, taken; and, upon payment of the consideration therefor
specified in all accepted Subscription Agreements and Powers of
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Attorney, the Units of each Series will constitute valid units of
beneficial interest in such Series of the Trust as to which the
subscribers thereto will have the same limitation on personal liability
as stockholders in a private corporation for profit organized under the
laws of the State of Delaware and will be Unitholders of such Series of
the Trust entitled to all the applicable benefits under the Trust
Agreement and the Delaware Act.
(d) The Trust is a statutory trust duly organized pursuant to the
Delaware Act and is validly existing and in good standing under the laws
of the State of Delaware with full power and authority to engage in the
business to be conducted by it, as described in the Prospectus. The Trust
is in good standing and qualified to do business in each jurisdiction in
which such qualification is necessary in order to protect the limited
liability of Unitholders and in which the nature or conduct of its
business as described in the Registration Statement requires such
qualification and the failure to be so qualified would materially
adversely affect its ability to perform its obligations under this
Agreement and the Advisory Agreement (as defined below).
(e) The Managing Owner is, and will continue to be so long as it is
the managing owner of the Trust, a corporation duly organized, validly
existing and in good standing under the laws of the State of Connecticut
and is in good standing and qualified to do business in each jurisdiction
in which the nature or conduct of its business as described in the
Registration Statement and Prospectus requires such qualification and the
failure to be so qualified would materially adversely affect the Trust's
or the Managing Owner's ability to perform its obligations hereunder.
(f) The Trust and the Managing Owner each have full trust and
corporate power and authority, as the case may be, under applicable law
to perform its respective obligations under the Trust Agreement, the
escrow agreement described in the Prospectus relating to the offering of
the Units (the "Escrow Agreement"), the Advisory Agreements by and among
each Trading Advisor, the trading vehicles described in the Prospectus
and the Managing Owner (the "Advisory Agreements") (references in this
Agreement to the Advisory Agreements intend, in respect of each Trading
Advisor, to refer only to the Advisory Agreement to which such Trading
Advisor is a party) and this Agreement, and to conduct its business as
described in the Registration Statement and Prospectus.
(g) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there will not have been
any adverse change in the condition (financial or otherwise), business or
prospects of the Managing Owner or the Trust, whether or not arising in
the ordinary course of business.
(h) Each of the Trust Agreement, the Escrow Agreement, the Advisory
Agreements and this Agreement has been duly and validly authorized,
executed and delivered by the Managing Owner on behalf of the Trust or a
Series (including in its capacity as a member of a trading vehicle
described in the Prospectus) and by the Managing Owner, and each
constitutes a valid, binding and enforceable agreement of the Trust or
such Series and the Managing Owner in accordance with its terms.
(i) The execution and delivery of the Trust Agreement, the Escrow
Agreement, the Advisory Agreements and this Agreement, the incurrence of
the obligations set forth therein and herein and the consummation of the
transactions contemplated herein, herein and in the Prospectus: (i) will
not constitute a breach of, or default under, any instrument or agreement
by which the Managing Owner, the Trust or any Series, as the case may be,
or any of their property or assets is bound, or any statute, order, rule
or regulation applicable to the Managing Owner, the Trust or any Series,
as the case may be, of any court or any governmental body or
administrative agency having jurisdiction over the Managing Owner, the
Trust or any Series, as the case may be; (ii) will not result in the
creation or imposition of any lien, charge or encumbrance on any property
or assets of the Managing Owner, the Trust or any Series; (iii) will not
give any party a right to terminate its obligations or result in the
acceleration of any obligations under any material instrument or
agreement by which the Managing Owner, the Trust or any Series, as the
case may be, or any of their respective property or assets is bound; and
(iv) will not result in any material liability (other than such as may be
contemplated hereby and under the Agreements enumerated in this
subparagraph) on the part of either the Managing Owner, the Trust or any
Series.
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(j) Except as otherwise disclosed in the Registration Statement or
the Prospectus, there is not pending nor, to the best of the Managing
Owner's knowledge, threatened any action, suit or proceeding before or by
any court or other governmental body to which the Managing Owner or the
Trust is a party, or to which any of the assets of the Managing Owner or
the Trust is subject, which might reasonably be expected to result in any
material adverse change in the condition (financial or otherwise),
business or prospects of the Managing Owner or the Trust or which is
required to be disclosed in the Registration Statement or Prospectus
pursuant to the CE Act, the 1933 Act, the CFTC Regulations or the SEC
Regulations. The Managing Owner has not received any notice of an
investigation or warning letter from the NFA or CFTC regarding
non-compliance by the Managing Owner with the CE Act or the regulations
thereunder.
(k) All authorizations, consents or orders of any court, or of any
federal, state or other governmental or regulatory agency or body
required for the authorization, issuance, offer and sale of the Units
have been obtained. No stop order relating to the Registration Statement
has been issued by any federal or state securities commission, and no
proceedings therefor are pending or, to the best knowledge of the
Managing Owner, threatened.
(l) The Managing Owner and each of its principals and employees
have, and will continue to have so long as it is the managing owner of
the Trust, all federal and state governmental, regulatory,
self-regulatory and commodity exchange approvals and licenses, and the
Managing Owner (either on behalf of itself or 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 (i) as a commodity pool operator and commodity trading
advisor under the CE Act, (ii) membership in the NFA as a "commodity pool
operator" and "commodity trading advisor," and (iii) as a "transfer
agent" with the Securities and Exchange Commission, and this Agreement
and the performance of such obligations will not contravene or result in
a breach of any provision of the Managing Owner's certificate of
incorporation, by-laws or any agreement, instrument, order, law or
regulation binding upon it or any of its employees or principals. The
principals of the Managing Owner identified in the Registration Statement
are all of the principals of the Managing Owner, as "principals" is
defined by the CFTC regulations. Such principals are duly registered as
such on the Managing Owner's commodity pool operator Form 7-R
registration, except that the registration of Xxxxxxxx X. Block, Esq. as
a principal of the Managing Owner is pending.
(m) The Trust does not require any federal or state governmental,
regulatory, self-regulatory or commodity exchange approvals or licenses,
and the Trust need not effect any filings or registrations with any
federal or state governmental agencies in order to conduct its business
and to act as contemplated by the Registration Statement and Prospectus
and to issue and sell the Units (other than filings under the 1933 Act,
the CE Act and state securities laws relating solely to the offering of
the Units).
(n) The Managing Owner has the financial resources necessary to meet
its obligations to the Selling Agent hereunder.
(o) All of the information regarding the actual performance of the
accounts of the Managing Owner and the Managing Owner's principals set
forth in the Prospectus is complete and accurate in all material respects
and, except as disclosed in the Prospectus, is in accordance and
compliance with the disclosure requirements under the CE Act and the CFTC
Regulations as well as of the NFA.
(p) The Managing Owner acknowledges that the Selling Agent's
customer and Correspondent lists constitute proprietary data belonging to
the Selling Agent, and the Managing Owner agrees that it will not
disseminate any confidential information regarding any of the foregoing,
except as required by law. The Managing Owner agrees that (i) it will
not, directly or indirectly, solicit a client introduced to the Managing
Owner or the Trust by the Selling Agent or any of its Correspondents
which client does not have a verifiable preexisting relationship with the
Managing Owner (a "Protected Client") to establish a managed account with
the Managing Owner or to invest in another fund managed by the Managing
Owner unless such solicitation is conducted through the Selling Agent or
as otherwise agreed to
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by the Selling Agent and (ii) if any Protected Client approaches the
Managing Owner, the Managing Owner will not accept the account or
investment without the Selling Agent's approval. In the event of a breach
of the agreements of the Managing Owner in this Section 1(p), the
Managing Owner agrees to compensate the Selling Agent with respect to
that Protected Client in an amount equal to the amount of ongoing
compensation to be paid by the Trust to the Selling Agent with respect to
such a Protected Client. Such payments are deemed to be a reasonable
estimate of the damage to the Selling Agent and shall be the Selling
Agent's exclusive remedy for such breach.
(q) The accountants who certified the Statement of Financial
Position of the Managing Owner and the Statement of Financial Condition
of the Trust included in the Registration Statement are, with respect to
the Managing Owner and the Trust, independent public accountants as
required by the 1933 Act and the SEC Regulations. These statements fairly
present the financial position and financial condition of the Managing
Owner and the Trust, as the case may be, as of the date of such
Statements. The audited Statement of Financial Position of the Managing
Owner and Statement of Financial Condition of the Trust are presented in
accordance, and the unaudited Statements of Financial Position of the
Managing Owner substantially in accordance, with Generally Accepted
Accounting Principles (as currently in effect in the United States).
(r) The Trust will not be required to register as an investment
company under the Investment Company Act of 1940 in order to conduct its
operations as described in the Prospectus.
Section 2. Representations and Warranties of the Trading Advisors.
Each Trading Advisor, individually (and not jointly), represents and warrants
to the Trust, the Selling Agent and the Managing Owner as follows:
(a) The Trading Advisor is a corporation, limited partnership or
other entity duly organized and validly existing and in good standing
under the laws of its state of organization and in good standing as a
foreign corporation in each other jurisdiction in which the nature or
conduct of its business requires such qualification and the failure to be
duly qualified would materially affect the Trading Advisor's ability to
perform its obligations under this Agreement and its Advisory Agreement.
The Trading Advisor has full corporate power and authority to perform its
obligations under this Agreement and its Advisory Agreement as described
in the Registration Statement and Prospectus.
(b) All references to the Trading Advisor and its principals, and
its trading systems, methods and performance in the Registration
Statement and the Prospectus are accurate and complete in all material
respects. As to the Trading Advisor, each of the principals of the
Trading Advisor, the Trading Advisor trading program(s) selected for the
Trust, and the Trading Advisor's trading systems, strategies and
performance, (i) the Registration Statement as of its effective date and
the Prospectus included therein contain all statements and information
required to be included therein under the CE Act and the rules and
regulations thereunder, (ii) the Registration Statement (with respect to
the information relating to the Trading Advisor furnished by the Trading
Advisor to the Managing Owner for use therein) as of its effective date
did not contain any misleading or untrue statement of a material fact or
omit to state a material fact which is required to be stated therein or
necessary to make the statements therein not misleading and (iii) the
Prospectus (as approved in pertinent part by the Trading Advisor) at its
date of issue and as of the Initial Closing Time, as supplemented, did
not and will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein not
misleading, in light of the circumstances under which such statements
were made. Except as otherwise disclosed in the Prospectus or identified
in writing to the Managing Owner on or prior to the date hereto, the
actual performance of each discretionary account directed by the Trading
Advisor or any principal or affiliate of the Trading Advisor for the
periods covered by the Performance Summaries or Tables set forth in the
Prospectus is disclosed in accordance with the requirements of the CE Act
and the rules and regulations thereunder (or as otherwise permitted by
the Staff of the Division of Trading and Markets). The information and
Performance Summaries or Tables relating to the actual performance of the
Trading Advisor are complete and accurate in all material respects and
comply in all material respects with the disclosure requirements of the
rules and regulations of the CFTC under the CE Act, including those
relating
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to the inclusion of "notional" equity. The performance records in the
Prospectus (as applicable to the Trading Advisor) have been calculated in
the manner set forth in the notes thereto.
(c) The Advisory Agreement and this Agreement have each been duly
and validly authorized, executed and delivered on behalf of the Trading
Advisor and each constitutes a valid, binding and enforceable agreement
of the Trading Advisor in accordance with its terms.
(d) The Trading Advisor has all federal and state governmental,
regulatory and commodity exchange licenses and approvals and has effected
all filings and registrations with federal and state governmental and
regulatory agencies required to act as described in the Registration
Statement and Prospectus or required to perform its obligations under
this Agreement and the Advisory Agreement (including, without limitation,
registration of the Trading Advisor as a commodity trading advisor under
the CE Act and membership of the Trading Advisor as a commodity trading
advisor in the NFA), and the performance of such obligations will not
violate or result in a breach of any provision of the Trading Advisor's
Certificate of Incorporation By-laws or other organizational documents or
instruments or any agreement, instrument, order, law or regulation
binding on the Trading Advisor. The principals of the Trading Advisor are
duly listed as such on the Trading Advisor's commodity trading advisor
Form 7-R registration.
(e) Management by the Trading Advisor of an account for the Trust in
accordance with the terms hereof and of the Advisory Agreement, and as
described in the Prospectus, will not require any registration under, or
violate any of the provisions of the Investment Advisers Act of 1940.
(f) The Trading Advisor's implementation of the trading program(s)
selected by the Managing Owner for the Trust will not infringe any other
person's copyright, trademark or other property rights.
(g) Neither the Trading Advisor nor any principal of the Trading
Advisor will distribute any preliminary prospectus, Prospectus, amended
or supplemented Prospectus or selling literature nor engage in any
selling activities whatsoever in connection with the offering of the
Units, except as may be requested by the Managing Owner pursuant to
Section 8(c) of this Agreement.
(h) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as may otherwise be
stated in or contemplated by the Registration Statement and the
Prospectus, there has not been any material adverse change in the
condition, financial or otherwise, business or prospects of the Trading
Advisor, whether or not arising in the ordinary course of business.
(i) The execution and delivery of this Agreement and the Advisory
Agreement, the incurrence of the obligations herein and therein set forth
and the consummation of the transactions contemplated herein and therein
and in the Prospectus will not constitute a breach of, or default under,
any instrument by which the Trading Advisor is bound or any order, rule
or regulation applicable to the Trading Advisor of any court or any
governmental body or administrative agency having jurisdiction over the
Trading Advisor.
(j) There is not pending, or to the best of the Trading Advisor's
knowledge threatened, any action, suit or proceeding before or by any
court or other governmental body to which the Trading Advisor is a party,
or to which any of the assets of the Trading Advisor is subject, which
might reasonably be expected to result in any material adverse change in
the condition, financial or otherwise, business or prospects of the
Trading Advisor. The Trading Advisor has not received any notice of an
investigation or warning letter from the NFA or the CFTC regarding
non-compliance by the Trading Advisor with the CE Act or the regulations
thereunder.
(k) Except as otherwise provided in its Advisory Agreement, the
Trading Advisor has not received, and is not entitled to receive,
directly or indirectly, any commission, finder's fee, similar fee or
rebate from any person in connection with the organization or operation
of the Trust.
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Section 3. [RESERVED]
Section 4. Offering and Sale of Units.
(a) Subject to the terms and conditions and on the basis of the
representations, warranties and covenants set forth herein, the Selling
Agent is hereby appointed as a Selling Agent for the Trust (it is
contemplated that certain additional selling agents and certain
Correspondents may also market Units) during the term herein specified
for the purpose of finding acceptable subscribers for the Units through a
public offering of such Units. The Selling Agent hereby accepts such
agency and agrees on the terms and conditions herein set forth to use its
best efforts to find acceptable subscribers for the Units.
It is understood that the Selling Agent's agreement to use its best
efforts to find acceptable subscribers for the Units 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 hereof. The agency of the Selling Agent hereunder shall continue
until the expiration or termination of this Agreement as provided herein,
including such additional period as may be required to effect a final
closing of the sale of the Units subscribed for through the date of such
termination.
Each subscriber shall be required to submit a minimum aggregate
subscription of at least $5,000 ($2,000 for trustees or custodians of
eligible employee benefit plans and individual retirement accounts and
existing Unitholders making additional investments), subject to the
higher minimum requirements imposed by certain state regulators as set
forth in Exhibit B to the Prospectus. Incremental investments are
permitted in $100 multiples, with Units being sold in fractions
calculated to three decimal places; provided, however, that each
subscriber will be required to submit a minimum subscription of at least
$500 for each Series to which such subscriber subscribes.
During the Initial Offering Period, all Selling Agent branch offices
will be required to forward subscriptions to the Managing Owner no later
than noon of the first Business Day following receipt of an acceptable
subscription agreement from a subscriber for Units (each, a "Subscriber")
and during the Continuous Offering Period all Selling Agent branch
offices will be required to forward subscriptions to the Managing Owner
no later than 10:00 a.m., New York City time, on the fifth Business Day
prior to the last day of each month. The Managing Owner shall have sole
responsibility for determining whether Subscribers are qualified to
become Limited Owners in the Trust and for accepting subscriptions and
determining their validity. The Selling Agent agrees to use its best
efforts to cause Subscribers to prepare their subscriptions in proper
form. The Selling Agent shall deposit the subscription proceeds from the
sale of Units in each Series (the "Proceeds") during the Initial Offering
Period in the escrow account and sub-account corresponding to such Series
at XXXxxxxx Xxxxx Xxxx, Xxx Xxxx, XX (the "Escrow Agent"), for the
separate benefit of the Subscribers of such Series not later than the
second Business Day following the receipt by the Managing Owner of
completed subscription agreements accompanied by such Proceeds. Proceeds
will be transferred to the escrow account and sub-account at the Escrow
Agent by check from the Subscriber or via wire transfer from the
Subscriber's account. The Managing Owner will determine whether to accept
or reject all subscriptions within two (2) Business Days following
receipt of subscription documents from the Selling Agent. Upon
notification by the Managing Owner to the Escrow Agent that a
subscription for Units of a Subscriber has been rejected, for whatever
reason, or in the event that the Subscriber rescinds its subscription in
conformity with the requirements of the North American Securities
Administrators Association Inc. Guidelines for Registration of Commodity
Pool Programs, the Escrow Agent shall by check or wire transfer return
any Proceeds held in escrow, excluding any interest thereon, to the payor
of such Proceeds. The Escrow Agent shall make interest payments to the
Trust to be retained by the Trust for the benefit of all investors in the
applicable Series of Units by delivering a check in the amount equal to
the interest allocable by Series to each Subscriber. If subscriptions for
the minimum number of Units in a Series set forth in the Prospectus
(after taking into account the Managing Owner's contribution) have not
been made by the conclusion of the Initial Offering Period for a Series,
then all Proceeds deposited in the escrow account designated for that
Series, excluding any interest thereon, shall be returned (in the same
way described above in the case of a rejected or rescinded subscription)
to the payor of such Proceeds on a pro rata basis (and taking into
account the amount and time of deposit), no later than
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ten (10) Business Days after the termination of the Initial Offering
Period for the affected Series, or as soon thereafter as practicable if
payment cannot be made in such time period.
During the Continuous Offering Period, the Managing Owner also will
determine whether to accept or reject all subscriptions received and will
do so (1) within two (2) Business Days following receipt from the Selling
Agent of a "Request for Exchange" (in the form attached to the Prospectus
as Exhibit C) or the "Subscription Agreement" (in the form attached to
the Prospectus as Exhibit B) with respect to a Limited Owner in an
existing Series and (2) within two (2) Business Days following receipt of
subscription documents from the Selling Agent for a new Subscriber. For
subscriptions which are accepted, Proceeds will be transferred to the
Escrow Agent by check from the Subscriber or via wire transfer from the
Subscriber's account. For an existing Limited Owner, such transfer will
occur on the first Business Day which first follows the date on which the
Managing Owner accepts the subscription. For a new Subscriber, such
transfer will occur on the second Business Day after the subscription
documents are delivered by the Subscriber to the Selling Agent (or an
Additional Seller).
At the Initial Closing Time for a Series, and thereafter on each
subsequent closing date with respect to that Series, the acceptance,
delivery, and receipt of subscriptions for Units will be subject to the
terms and conditions set forth in this Agreement, including, but not
limited to, (1) the payment of the full subscription price for Units and
delivery of a properly completed Subscription Agreement/Power of Attorney
by each Subscriber; (2) the fact that a new Subscriber's subscription
will not be final and binding until two (2) Business Days following the
Subscriber's delivery of his subscription documents to the Selling Agent
(or an Additional Seller), and (3) compliance with Section 7 hereof. Upon
the satisfaction of such terms and conditions, the aggregate subscription
price for Units (inclusive of any interest earned on such subscriptions
while held in escrow which will be retained by the Trust for the benefit
of all investors in the applicable Series of Units) will be paid and
delivered to the Trust in accordance with the Escrow Agreement.
The Selling Agent agrees that it will not take any of the following
action against the Trust: (1) seek a decree or order by a court having
jurisdiction in the premises (A) for relief in respect of the Trust in an
involuntary case or proceeding under the federal Bankruptcy Code or any
other federal or state bankruptcy, insolvency, reorganization,
rehabilitation, liquidation or similar law or (B) adjudging the Trust a
bankrupt or insolvent, or seeking reorganization, rehabilitation,
liquidation, arrangement, adjustment or composition of or in respect of
the Trust under the federal 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 of any substantial part of any of its 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 "Bankruptcy or Insolvency Action").
In addition, the Selling Agent agrees that for any obligations due
and owing to it by any Series, the Selling Agent will look solely and
exclusively to the assets of such Series or the Managing Owner, if it has
liability in its capacity as Managing Owner, to satisfy its claims and
will not seek to attach or otherwise assert a claim against the other
assets of the Trust, 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.
This Agreement has been made and executed by and on behalf of the
Trust and the Managing Owner and the obligations of 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 above and no resort shall be had to the assets of other Series
issued by the Trust or the Limited Owners' personal property for the
satisfaction of any obligation or claim hereunder.
(b) (i) Units in Class I of each Series. As compensation, the
Selling Agent shall receive from each Series a service fee in respect of
the Class I Units of each Series, monthly in arrears, equal to 1/12th of
2.0% (2.0% per annum) of the Net Asset Value per Unit of the outstanding
Class I Units of such Series on an on-going basis for on-going services
provided to the Series and their Limited Owners. Such
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on-going services may include, without limitation, advising Limited
Owners of the Net Asset Value of the relevant Series of the Trust and of
their Units in such Series, advising Limited Owners whether to make
additional capital contributions to any Series or to redeem their Units
and providing information to Limited Owners with respect to futures
markets conditions.
(ii) Units in Class II of each Series. The Selling Agent will
not receive any service fees for any Class II Unit sold by it.
(iii) All Units. As compensation, the Selling Agent shall
receive from each Series a sales commission in respect of the Class
I Units and the Class II Units of such Series, monthly in arrears,
equal to 1/12th of 1.00% (1.00% per annum) of the Net Asset Value
per Unit of the outstanding Class I Units and Class II Units of such
Series as of the beginning of each month.
(c) The Selling Agent will provide the Managing Owner with a list of
prospective Correspondents. Unless the prospective Corespondent has a
verifiable preexisting relationship with the Managing Owner as notified
to the Selling Agent in writing, such Correspondent shall only be
permitted to offer Units as a Correspondent of the Selling Agent pursuant
to a Correspondent Selling Agreement in a form agreed to by the Selling
Agent. The Selling Agent, with the consent of the Managing Owner, may
select Correspondents, in each case which represent in the Correspondent
Selling Agreement that they are either (i) dealers who are members in
good standing of the NASD or (ii) foreign banks, dealers or institutions
ineligible for membership in a registered security association (within
the meaning of Section 25 of Article III of the NASD's Rules of Fair
Practice) which agree that they will make no sales of Units within the
United States, its territories or possessions or areas subject to its
jurisdiction.
(d) In respect of Correspondents selected by the Selling Agent with
the consent of the Managing Owner, the Managing Owner shall pay the
Selling Agent selling commissions and ongoing compensation as set forth
above, a portion of which (as agreed between the Selling Agent and each
such Correspondent) the Selling Agent shall pass on to each such
Correspondent.
(e) Ongoing compensation will be paid at the end of each calendar
quarter on the basis of the Units outstanding during each month during
such quarter. Net Assets, for purposes of determining ongoing
compensation shall be calculated after reduction of all expenses of the
Trust, including accrued and unpaid expenses.
The Selling Agent otherwise entitled to ongoing compensation will
not be entitled to receipt thereof (but may continue to receive
installment selling commissions) for any month during any portion of
which the Registered Representative who is receiving such ongoing
compensation is at any time not properly registered with the CFTC or does
not provide the ongoing services described above.
(f) If, with respect to any Series, acceptable subscriptions for at
least the minimum number of Units specified on the cover of the
Prospectus (the "Series Minimum Units") shall not have been received by
July 1, 2005 (unless extended until October 1, 2005 by the Managing
Owner), all funds received from subscribers for Units of each Series
shall be promptly returned in full, together with all interest payable
thereon (irrespective of amount) and without deduction for any escrow or
other fee or expense; and thereupon the Selling Agent's duties under this
Agreement in respect of such Series shall terminate without further
obligation hereunder on the part of the Selling Agent, the Managing Owner
or the Trust, except as set forth in Section 9 hereof.
(g) If, with respect to any Series, at least the Series Minimum
Units shall have been so subscribed for, then on July 1, 2005, or (i) at
such earlier time after subscriptions for the Series Minimum Units shall
have been received as determined by the Managing Owner or (ii) at such
later date on or prior to October 1, 2005, to which the Managing Owner
may extend the initial offering, the Managing Owner shall notify the
Selling Agent of the initial closing of the Trust in respect of such
Series (each a "Series Initial Closing"), as well as of the aggregate
number of Units of such Series for which the Managing Owner has received
acceptable subscriptions. Payment of the purchase price for such Units
shall be made at the office of Sidley Xxxxxx Xxxxx & Xxxx LLP, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
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place as shall be agreed upon among the Selling Agent and the Managing
Owner, at 10:00 A.M., New York time, on such day and time (not later than
five (5) business days after the end of the Initial Offering Period) as
shall be agreed upon among the Selling Agent and the Managing Owner (with
respect to such Series, the "Initial Closing Time"). Subsequent to the
Initial Closing Time, Units of such Series may continue to be sold as of
the first day of each calendar month (each such sale, an "Additional
Closing" and each such date a "Closing Time"), in the discretion of the
Trust. Notwithstanding anything to the contrary herein, in no event shall
the Managing Owner or the Trust be obliged to accept any subscriptions
for Units of any Series unless, as of such Series' Initial Closing Time,
the Units of such Series are "publicly-offered securities" within the
meaning of the rules and regulations promulgated under and pursuant to
the Employee Retirement Income Security Act of 1974, as amended.
(h) No selling commissions or ongoing compensation shall be paid on
Units sold to the Managing Owner or any of its principals or affiliates.
(i) The Trust shall not in any respect be responsible for any
selling commissions or ongoing compensation described herein. All such
commissions and ongoing compensation are to be solely the responsibility
of the Managing Owner.
Section 5. Compliance with NASD Conduct Rule 2810 and General Laws.
(a) It is understood that the Selling Agent has no commitment with
regard to the sale of the Units other than to use its best efforts. In
connection with the offer and sale of the Units, the Selling Agent
represents that it will comply fully with all applicable laws, and the
rules and interpretations of the NASD, the SEC, the CFTC, state
securities administrators and any other regulatory body. In particular,
and not by way of limitation, the Selling Agent represents and warrants
that it is familiar with NASD Conduct Rule 2810 and that it will comply
fully with all the terms thereof in connection with the offering and sale
of the 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
maintained.
(b) The Selling Agent agrees not to recommend the purchase of Units
to any subscriber unless the Selling Agent shall have reasonable grounds
to believe, on the basis of information obtained from the subscriber
concerning, among other things, the subscriber's investment objectives,
other investments, financial situation and needs, that (to the extent
relevant for the purposes of Conduct Rule 2810 and giving due
consideration to the fact that the Trust is in no respects a "tax
shelter") the subscriber is or will be in a financial position
appropriate to enable the subscriber to realize to a significant extent
the benefits of the Trust, including the tax benefits (if any) described
in the Prospectus; the subscriber has a fair market net worth sufficient
to sustain the risks inherent in participating in the Trust; and the
Units are otherwise a suitable investment for the subscriber. The Selling
Agent agrees to maintain such records as are required by the applicable
rules of the NASD and the state securities commissions for purposes of
determining investor suitability. In connection with making the foregoing
representations and warranties, the Selling Agent further represents and
warrants that it has, among other things, examined the following sections
in the Prospectus 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 Trust and provides an adequate basis to
subscribers for evaluating an investment in the Units:
"The Risk You Face"
"The Series and Their Objectives"
"The Trust, The Series, The Trustee and the Managing Owner;
Certain Material Terms of the Trust Declaration"
"Charges"
"Redemptions and Distributions"
"Conflicts of Interest"
"Federal Income Tax Consequences"
"The Futures and Forward Markets"
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"Performance of Commodity Pool Operated by the Managing Owner and its
Affiliates"
In connection with making the representations and warranties set
forth in this paragraph, Selling Agent has not relied on inquiries made
by or on behalf of any other parties.
The Selling Agent agrees to inform all prospective purchasers of
Units of all pertinent facts relating to the liquidity and marketability
of the Units as set forth in the Prospectus.
(c) All payments are made by authorization to the Selling Agent to
debit the subscriber's customer securities account maintained with the
Selling Agent. Subscribers who do so must have their subscription
payments in their accounts on the specified settlement date --
subscribers to be notified of such dates by the Selling Agent. Settlement
of the payment for subscriptions will occur not later than three (3)
business days following notification by the Managing Owner to the Selling
Agent of the acceptance of a particular subscription and not later than
the termination of the offering of the Units. On each settlement date,
subscribers' customer securities accounts will be debited by the Selling
Agent in the amount of their subscriptions. The amount of the
subscription payments so debited will be transmitted by such Selling
Agent directly to the Escrow Agent in the form of a Selling Agent check
or wire transfer made payable to "JPMorgan Chase Bank, as Escrow Agent
for World Monitor Trust III Escrow Account No. ____________."
The Selling Agent and the Managing Owner may make such other
arrangements regarding the transmission of subscriptions as they may deem
convenient or appropriate; provided that any such arrangement must comply
in all relevant respects with SEC Regulations 10b-9 and 15c2-4.
(d) 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 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.
Section 6. Blue Sky Survey. The Managing Owner shall cause Sidley
Xxxxxx Xxxxx & Xxxx llp, counsel to the Managing Owner, to prepare and deliver
to the Selling Agent, after having submitted such Blue Sky Survey to counsel
for the Selling Agent for such counsel's review and approval, a Blue Sky
Survey which shall set forth the United States jurisdictions in which the
Units may be offered and sold. The Managing Owner agrees to use its best
efforts to qualify the Units under the securities or Blue Sky laws of the
various state jurisdictions, and to maintain such qualification during the
term of the offering, provided that the Managing Owner reserves the right to
withdraw application for the Units' registration. It is understood and agreed
that the Selling Agent (and its Correspondents) may rely, in connection with
the offering and sale of Units in any United States jurisdiction, on advice
given by Sidley Xxxxxx Xxxxx & Xxxx LLP as to the legality of the offer or
sale of the Units in such jurisdiction.
Section 7. Covenants of the Managing Owner.
(a) The Managing Owner will not file any amendment to the
Registration Statement or supplement to the Prospectus without giving the
Selling Agent a reasonable period of time to review such amendment or
supplement prior to filing or to which the Selling Agent reasonably
objects, unless advised by counsel that doing so is required by law. The
Managing Owner will notify the Selling Agent immediately (i) when any
amendment to the Registration Statement shall have become 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 Xxxxxxxxxxxx
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Xxxxxxxxx, (xxx) 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 or for additional information relating
thereto, (iv) of any material criminal, civil or administrative or
investigative proceedings against or involving the Managing Owner or the
Trust, (v) of the issuance by the SEC, CFTC, NFA or any other federal or
state regulatory or self-regulatory body of any order suspending the
effectiveness of the Registration Statement under the Securities Act, the
registration or NFA membership of the Managing Owner as a "commodity pool
operator," or the registration of the Units under the Blue Sky or
securities laws of any state or other jurisdiction or any order or decree
enjoining the offering or the use of the then current Prospectus or any
Promotional Material or of the institution, or notice of the intended
institution, of any action or proceeding for that purpose, or (vi) of any
threatened action of the type referred to in clauses (iii) through (v) of
which the Managing Owner is aware. In the event any order of the type
referred to in clause (v) is issued, the Managing Owner agrees to use
best efforts to obtain a lifting or rescinding of such order at the
earliest feasible date. The Managing Owner agrees to provide marked
copies of the Registration Statement and all Exhibits thereto to the
Selling Agent.
(b) The Managing Owner will deliver to the Selling Agent as many
signed copies of the Registration Statement as originally filed and of
each amendment thereto, together with exhibits, as the Selling Agent may
reasonably request, and will also deliver to the Selling Agent such
number of conformed copies of the Registration Statement as originally
filed and as of each amendment thereto (without exhibits) as the Selling
Agent shall reasonably request.
(c) The Managing Owner will deliver to the Selling Agent as promptly
as practicable from time to time during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the
Prospectus (as amended or supplemented) and of the Promotional Material
as the Selling Agent (or their Correspondents) may reasonably request for
the purposes contemplated by the 1933 Act or the SEC Regulations.
(d) During the period when the Prospectus is required to be
delivered pursuant to the 1933 Act, the Managing Owner and the Trust will
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 the
Units during such period in accordance with the provisions hereof and as
set forth in the Prospectus.
(e) 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,
the Managing Owner shall forthwith prepare and furnish to the Selling
Agent, at the expense of the Managing Owner, a reasonable number of
copies of an amendment or amendments of, or a supplement or supplements
to, the Prospectus which will amend or supplement the Prospectus so as to
effect the necessary changes. No such amendment or supplement shall be
filed or used without the approval of the Selling Agent. Without limiting
the generality of the foregoing, the Managing Owner shall amend or
supplement the Prospectus to reflect any change in fees (net of rebates,
if any) to be paid to a Trading Advisor by the Trust or the Managing
Owner.
Section 8. Covenants of the Trading Advisors.
(a) Each Trading Advisor (severally and not jointly) agrees to
cooperate, to the extent reasonably requested by the Managing Owner, in
the preparation of any amendments or supplements relating to itself to
the Registration Statement and the Prospectus.
(b) During the period when the Prospectus is required to be
delivered under the 1933 Act, each Trading Advisor agrees to notify the
Managing Owner upon discovery of any material untrue or misleading
statement regarding it, its operations or any of its principals 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, its
operations or any of its
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principals or result in the Prospectus not including all information
relating to the Trading Advisor and its principals required pursuant to
CFTC regulations. During such period, each Trading Advisor shall promptly
inform the Managing Owner if it is necessary to amend or supplement the
Prospectus in order to make the Prospectus not materially misleading in
light of the circumstances existing at the time the Prospectus is
delivered to a subscriber.
(c) Each Trading Advisor agrees to assist, and cause its principals
or agents to assist, in "road show" presentations relating to the initial
and ongoing offering of the Units at the reasonable request and expense
of the Managing Owner, provided that no such assistance shall result in
any action which any such principal or agent reasonably believes may
require registration of such Trading Advisor or any such principal or
agent as a broker-dealer or salesman or interfere materially with such
Trading Advisor's normal daily business activities.
Section 9. Payment of Expenses and Fees. The Managing Owner will pay
all expenses incident to the performance of the obligations of the Managing
Owner and the Trust hereunder, including: (i) the printing and delivery to the
Selling Agent in quantities as hereinabove stated of copies of the
Registration Statement and all amendments thereto, of the Prospectus and any
supplements or amendments thereto, and of any supplemental sales materials;
(ii) the reproduction of this Agreement and the printing and filing of the
Registration Statement and the Prospectus (and, in certain cases, the exhibits
thereto) with the SEC, CFTC and NFA; (iii) the filing fees payable to the SEC
and the NASD; (iv) the qualification of the Units under the securities or
"Blue Sky" laws in the various jurisdictions, including filing fees and the
fees and disbursements of the Managing Owner's counsel incurred in connection
therewith; and (v) the services of Sidley Xxxxxx Xxxxx & Xxxx LLP and
accountants for the Managing Owner and the Trust. The Managing Owner will be
reimbursed by the Trust for the foregoing expenses advanced by it on behalf of
the Trust, as described in the Prospectus.
The Managing Owner and the Selling Agent are each aware of the
limitations imposed by Appendix F of the NASD Rules of Fair Practice on the
aggregate compensation which may be received by the Selling Agent in
connection with the offering and sale of the Units. The Selling Agent will in
no event accept any payments from the Managing Owner which, when added to the
selling commissions (not including ongoing compensation) which the Selling
Agent receives on each sale of a Unit, would exceed 10% of the gross proceeds
of the Units sold to the public based upon reports provided by the Managing
Owner.
Section 10. Conditions of Closing. The sale of the Units and the
release of subscription funds from the escrow account are subject to the
accuracy of the representations and warranties of the parties hereto, to the
performance by such parties of their respective obligations hereunder and to
the following further conditions:
(a) The Registration Statement shall have become effective and at
each Closing Time no order suspending the effectiveness thereof shall
have been issued under the 1933 Act or proceeding therefor initiated or
threatened by the SEC, and the CFTC shall have filed the Prospectus as a
Disclosure Document without a finding of further deficiencies.
(b) At the Initial Closing Time, either Sidley Xxxxxx Xxxxx & Xxxx
LLP, counsel to the Managing Owner, Xxxxxxxx, Xxxxxx & Finger, P.A.,
Delaware counsel to the Managing Owner, or _____________, Connecticut
counsel to the Managing Owner, shall deliver its opinion, in form and
substance satisfactory to the parties hereto, to the effect that:
(i) The Certificate of Trust pursuant to which the Trust has
been formed and the Trust Agreement of the Trust each provides for
the subscription for and sale of the Units; all action required to
be taken by the Managing Owner and the Trust as a condition to the
subscription for and sale of the Units to qualified subscribers
therefor has been taken; and, upon payment of the consideration
therefor specified in the accepted Subscription Agreements and
Powers of Attorney, the Units will constitute valid units of
beneficial interest in the Trust and each subscriber who purchases
Units will become a Unitholder with the same limitation on personal
liability as a stockholder in a private corporation for profit under
the laws of the State of Delaware, subject to the requirement that
each such purchaser shall have duly completed, executed and
delivered to the Managing Owner a Subscription Agreement and Power
of Attorney relating to the
-13-
Units purchased by such party, that such purchaser meets all
applicable suitability standards and that the representations and
warranties of such purchaser in the Subscription Agreement and Power
of Attorney are true and correct.
(ii) The Trust is a statutory trust duly and validly organized
pursuant to the Certificate of Trust, the Trust Agreement and the
Delaware Act, and is validly existing under the laws of the State of
Delaware with full power and authority to conduct the business in
which it proposes to engage as described in the Prospectus.
(iii) The Managing Owner is duly organized, validly existing
and in good standing as a corporation under the laws of the State of
Connecticut and is in good standing and qualified to do business in
each other jurisdiction in which the failure to so qualify might
reasonably be expected to result in material adverse consequences to
the Trust. The Managing Owner has full corporate power and authority
to perform its obligations as described in the Registration
Statement, the Prospectus and herein.
(iv) The Managing Owner (including the Managing Owner's
principals) and the Trust each has all federal and state
governmental and all regulatory and self-regulatory approvals and
licenses, and has received or made all filings and registrations
with federal and state governmental and all regulatory and
self-regulatory agencies necessary in order for the Managing Owner
and the Trust, respectively, to conduct their respective businesses
as described in the Registration Statement and Prospectus, and, to
the best of their knowledge, none of such approvals, licenses or
registrations have been rescinded or revoked.
(v) Each of the Trust Agreement, the Escrow Agreement, the
Customer Agreement, the Advisory Agreements and this Agreement has
been duly authorized, executed and delivered by or on behalf of the
Managing Owner and/or the Trust, as the case may be, and assuming
that such agreements are binding on the other parties thereto and
hereto, each of the Trust Agreement, the Escrow Agreement, the
Customer Agreements, the Advisory Agreements and this Agreement
constitutes a valid, binding and enforceable agreement of the
Managing Owner and/or the Trust, as the case may be, in each case in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws at the time in effect
affecting the enforceability generally of rights of creditors and
except as enforceability of indemnification provisions may be
limited by applicable law and the enforcement of any specific terms
or remedies may be unavailable.
(vi) The execution and delivery of this Agreement, the Trust
Agreement, the Escrow Agreement and the Advisory Agreements, and the
incurrence of the obligations herein, therein and in the Prospectus
set forth and the consummation of the transactions contemplated
herein, therein and in the Prospectus will not be in contravention
of any of the provisions of the Managing Owner's certificate of
incorporation or by-laws and, to the best of their knowledge, will
not constitute a breach of, or default under, any instrument by
which the Managing Owner or the Trust is bound or any order, rule or
regulation applicable to the Managing Owner or the Trust of any
court or any governmental body or administrative agency having
jurisdiction over the Managing Owner or the Trust.
(vii) To the best of their knowledge (without having made any
particular inquiry or docket search), there are no actions, claims
or proceedings pending or threatened in any court or before or by
any governmental or administrative agency or regulatory or
self-regulatory body, nor have there been any such suits, claims or
proceedings within the last five years, to which the Managing Owner
(or any principal of the Managing Owner) or the Trust is or was a
party, or to which any of their assets is or was subject, which are
required to be, but are not, disclosed in the Registration Statement
or Prospectus or which might reasonably be expected to result in any
material adverse change in the condition (financial or otherwise),
business or prospects of the Managing Owner or the Trust.
-14-
(viii) No authorization, approval or consent of any
governmental or self-regulatory authority or agency is necessary in
connection with the subscription for and sale of the Units, except
such as may be required under the 1933 Act, the CE Act, NFA
compliance rules, NASD rules or applicable securities or "Blue Sky"
laws.
(ix) The information in the Prospectus under the caption
"Federal Income Tax Consequences," to the extent that such
information constitutes matters of law or legal conclusions, has
been reviewed by them and is correct in all material respects,
insofar as it relates to the income tax consequences to the Trust
and to the federal income tax consequences of an investment in the
Trust by U.S. individual taxpayers.
(x) The Registration Statement is effective under the 1933 Act
and no proceeding for a stop order is pending or, to the best of
their knowledge, threatened under Section 8(d) or Section 8(e) of
the 1933 Act or any applicable state "Blue Sky" laws.
(xi) At the time the Registration Statement and any
post-effective amendment thereto became effective, the Registration
Statement, and at the time the Prospectus and any amendments or
supplements thereto were first issued, the Prospectus, complied as
to form in all material respects with the requirements of the 1933
Act, SEC Regulations, the CE Act, the CFTC regulations and the rules
of the NFA. Nothing has come to their attention that would cause
them to believe that (a) at the time that the Registration Statement
and any post-effective amendment thereto became effective, the
Registration Statement contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
or (b) the Prospectus as first issued or as subsequently issued or
at Closing Time contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that such counsel
need express no opinion or belief (A) as to the financial
statements, notes thereto and other financial or statistical data
set forth in the Registration Statement and Prospectus, or (B) as to
the performance data set forth in the Registration Statement.
(xii) Assuming operation in accordance with the Prospectus, the
Trust at a Closing Time will not be an "investment company" as that
term is defined in the Investment Company Act of 1940, and the
Managing Owner need not be registered as an "investment adviser"
under the Investment Advisers Act of 1940 in respect of its
management of the Trust.
(c) At the Initial Closing Time, counsel for the Selling Agent (as
selected by such Selling Agent) shall, if required by the Managing Owner,
deliver its opinion to the parties, in form and substance satisfactory to
the parties, regarding such pertinent matters as the Managing Owner may
deem appropriate.
(d) At the Initial Closing Time, counsel for each Trading Advisor
(as selected by each such Trading Advisor) shall, if required by the
Managing Owner, deliver its opinion to the parties, in form and substance
reasonably satisfactory to the parties, regarding such pertinent matters
as the Managing Owner may deem appropriate.
(e) At the Initial Closing Time, Xxxxxxxx, Xxxxxx & Finger, P.A.,
Delaware counsel to the Managing Owner, shall deliver its opinion, on
which Sidley Xxxxxx Xxxxx & Xxxx LLP may rely, in form and substance
satisfactory to the Managing Owner.
(f) At each Closing Time, the Managing Owner shall deliver a
certificate to the effect that: (i) no order suspending the effectiveness
of the Registration Statement has been issued and no proceedings therefor
have been instituted or to the best of their knowledge upon due and
diligent inquiry threatened by the SEC, the CFTC or other regulatory or
self-regulatory body; (ii) the representations and warranties of the
Managing Owner contained herein are true and correct with the same effect
as though expressly made at such Closing Time and in respect of the
Registration Statement as in effect at such Closing Time; and (iii)
-15-
the Managing Owner has performed all covenants and agreements herein
contained which are required to be performed on its part at or prior
to such Closing Time.
(g) At or prior to the Initial Closing Time, the Trust shall
have received a capital contribution of the Managing Owner in the
amount required by its Trust Agreement and as described in the
Prospectus.
(h) At the Initial Closing Time, the Selling Agents shall have
received letters from one or more accounting firms describing
certain agreed upon procedures which they have performed in
reviewing certain performance numbers set forth in the Prospectus.
(i) Each Trading Advisor shall deliver a report dated as of the
Initial Closing Time, which shall present, for the period from the
date after the last day covered by the actual Performance Summaries
in the Prospectus (with respect to the Trading Advisors) to the
Managing Owner to the latest practicable day before the Initial
Closing Time, figures which shall be a continuation of such
Summaries and which shall certify that such figures are accurate in
all material respects. The Trading Advisors shall also certify that
such Tables have been calculated in accordance with the notes to the
applicable Summaries in the Prospectus.
(j) At each Additional Closing Time thereafter, the parties
hereto shall have been furnished with such information, opinions and
certified documents as the Managing Owner may deem to be necessary
or appropriate.
(k) At each Additional Closing Time, each Trading Advisor shall
deliver a certificate to the effect that (i) the representations and
warranties of such Trading Advisor contained herein are true and
correct with the same effect as though expressly made at such
Additional Closing Time and in respect of the Registration Statement
as in effect at such Additional Closing Time, and (ii) such Trading
Advisor has performed all covenants and agreements herein contained
to be performed on its part at or prior to such Additional Closing
Time.
(l) At the Initial Closing Time, executed copies of the Trust
Agreement, the Escrow Agreement, the Advisory Agreements, and this
Agreement shall be delivered to all parties.
(m) The parties hereto shall have been furnished with such
additional information, opinions and documents, including supporting
documents relating to parties described in the Prospectus and
certificates signed by such parties with regard to information
relating to them and included in the Prospectus as they may
reasonably require for the purpose of enabling them to pass upon the
sale of the Units as herein contemplated and related proceedings, in
order to evidence the accuracy or completeness of any of the
representations or warranties or the fulfillment of any of the
conditions herein contained; and all actions taken by the parties
hereto in connection with the sale of the Units as herein
contemplated shall be reasonably satisfactory in form and substance
to Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the Managing Owner
and to counsel for the Selling Agent.
If any of the conditions specified in this Section 10 shall not have
been fulfilled when and as required by this Agreement to be fulfilled prior to
a Closing Time, this Agreement and all obligations hereunder may be canceled
by any party hereto by notifying the other parties hereto of such cancellation
in writing or by telegram at any time at or prior to such Closing Time, and
any such cancellation or termination shall be without liability of any party
to any other party other than in respect of Units already sold and except as
otherwise provided in Sections 6 and 11 of this Agreement.
Section 11. Indemnification, Contribution and Exculpation. (a) The
Managing Owner agrees to indemnify and hold harmless the Selling Agent, each
Trading Advisor and each person, if any, who controls the Selling Agent or any
Trading Advisor within the meaning of Section 15 of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever arising from any breach of any
representation or warranty of the Managing Owner set forth
herein or from
-16-
any untrue statement of a material fact or alleged untrue
statement of a material fact contained in the Registration
Statement (or any amendment thereto) or in the Promotional
Material or any omission or alleged omission therefrom of a
material fact required to be stated therein or necessary in
order to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(ii) against any and all loss, liability, claim, damage
and expense whatsoever to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body commenced or
threatened, or of any claim whatsoever based upon any such
breach, untrue statement or omission or any such alleged untrue
statement or omission (any settlement to be subject to
indemnity hereunder only if effected with the written consent
of the Managing Owner); and
(iii) against any and all expense whatsoever (including
the fees and disbursements of counsel) reasonably incurred in
investigating, preparing or defending against litigation, or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based
upon any such material breach, untrue statement or omission, or
any such alleged untrue statement or omission, to the extent
that any such expense is not paid under clauses (i) or (ii)
above.
(iv) If the indemnification provided for in this Section
11 shall for any reason be unavailable to the Selling Agent (or
a controlling person of the Selling Agent) in respect of any
loss, liability, claim, damage or expense referred to herein,
then the Managing Owner shall, in lieu of indemnifying the
Selling Agent (or controlling person) contribute to the amount
paid or payable by such indemnified party as a result of such
loss, liability, claim, damage or expense, (A) in such
proportion as shall be appropriate to reflect the relative
benefits received by the Managing Owner on the one hand and the
Selling Agent on the other from the offering of the Units by
the Selling Agent or (B) if the allocation provided by clause
(A) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (A ) above but also the relative
fault of the Managing Owner on the one hand and the Selling
Agent on the other with respect to the statements or omissions
which resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable
considerations. Relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact
relates to information supplied by the Managing Owner on the
one hand or the Selling Agent on the other, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this Section 11 (iv) were to be
determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable
by the Selling Agent (or controlling person) as a result of the
loss, liability, claim, damage or expense referred to above in
this Section 11(iv), shall be deemed to include, for purposes
of this Section 11(iv), any legal or other expenses reasonably
incurred by such otherwise indemnified party in connection with
investigating or defending any such action or claim.
In no case shall the Managing Owner be liable under this indemnity
and contribution agreement with respect to any claim unless the Managing Owner
shall be notified in writing of the nature of the claim within a reasonable
time after the assertion thereof, but failure to so notify the Managing Owner
shall not relieve the Managing Owner from any liability which it may have
otherwise than on account of this indemnity and contribution agreement. The
Managing Owner shall be entitled to participate at its own expense in the
defense or, if it so elects within a reasonable time after receipt of such
notice, to assume the defense of any suit so brought, which defense shall be
conducted by counsel chosen by it and satisfactory to the indemnified party
(or party entitled to contribution hereunder) or parties, defendant or
defendants therein.
-17-
The Managing Owner agrees to notify the Selling Agent and the
Trading Advisors within a reasonable time of the assertion of any claim in
connection with the sale of the Units against it or any of its officers or
directors or any person who controls the Managing Owner within the meaning of
Xxxxxxx 00 xx xxx 0000 Xxx.
(x) Indemnification by Each Trading Advisor. Each Trading Advisor
agrees to indemnify and hold harmless the Selling Agent, the Managing
Owner, the Trust and each person, if any, who controls the Selling Agent,
the Trust or the Managing Owner within the meaning of Section 15 of the
1933 Act (and, in the case of the Managing Owner and the Trust, each
person who signed the Registration Statement or is a director of the
Managing Owner), to the same extent as the indemnity from the Managing
Owner set forth in Section 11(a) hereof, but only insofar as the losses,
claims, damages, liabilities or expenses indemnified against arise out of
or are based upon any untrue statement or omission relating or with
respect to that Trading Advisor or any principal of that Trading Advisor,
or its operations, trading systems, methods or performance, which was
made in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement thereto and furnished by or
approved by the Trading Advisor in writing for inclusion therein.
(c) Indemnification by Selling Agent. The Selling Agent agrees to
indemnify and hold harmless the Managing Owner, the Trust, each Trading
Advisor and each person, if any, who controls the Managing Owner, the
Trust or a Trading Advisor from and against any and all losses, claims,
damages, liabilities or expenses arising out of or based upon (i) any
violation of law or of this Agreement committed by the Selling Agent in
selling the Units to investors or (ii) any oral representations made to
investors the information in which is not contained in the Registration
Statement or any other previously approved written material.
Section 12. Consent. Each of the Managing Owner and the Selling
Agent agrees and consents (the "Consent") to look solely to each Series that
is being offered pursuant to this Agreement (the "Contracting Series") and the
assets (the "Contracting Series Assets") of the Contracting Series and to the
Managing Owner and its assets for payment. The Contracting Series 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 Series,
including, without limitation, funds delivered to the Trust for the purchase
of interests in a Series. 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 Series and the Contracting Series Assets, shall be
subject to the following limitations:
(a) Subordination of certain claims and rights. (1) except as set
forth below, the Claims, if any, of the Managing Owner or the Selling
Agent (the "Subordinated Claims") shall be expressly subordinate and
junior in right of payment to any and all other Claims against the Trust
and any Series thereof, and any of their respective assets, which may
arise as a matter of law or pursuant to any contract; provided, however,
that the Claims of each of the Managing Owner and the Selling Agent (if
any) against the Contracting Series shall not be considered Subordinated
Claims with respect to enforcement against and distribution and repayment
from the Contracting Series, the Contracting Series Assets and the
Managing Owner and its assets; and provided further that the valid Claims
of either the Managing Owner or the Selling Agent, if any, against the
Contracting Series shall be pari passu and equal in right of repayment
and distribution with all other valid Claims against the Contracting
Series and (2) the Managing Owner and the Selling Agent will not take,
demand or receive from any Series or the Trust or any of their respective
assets (other than the Contracting Series, the Contracting Series Assets
and the Managing Owner and its assets) any payment for the Subordinated
Claims;
(b) The Claims of each of the Managing Owner and the Selling Agent
with respect to the Contracting Series shall only be asserted and
enforceable against the Contracting Series, the Contracting Series Assets
and the Managing Owner and its assets; and such Claims shall not be
asserted or enforceable for any reason whatsoever against any other
Series, the Trust generally or any of their respective assets;
(c) If the Claims of the Managing Owner or the Selling Agent against
the Contracting Series or the Trust are secured in whole or in part, each
of the Managing Owner and the Selling Agent hereby
-18-
waives (under section 1111(b) of the Bankruptcy Code (11 U.S.C. S
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 Series
(other than the Contracting Series), as the case may be;
(d) In furtherance of the foregoing, if and to the extent that the
Managing Owner and the Selling Agent receives monies in connection with
the Subordinated Claims from a Series or the Trust (or their respective
assets), other than the Contracting Series, the Contracting Series Assets
and the Managing Owner and its assets, the Managing Owner and the Selling
Agent shall be deemed to hold such monies in trust and shall promptly
remit such monies to the Series or the Trust that paid such amounts for
distribution by the Series or the Trust in accordance with the terms
hereof; and
(e) The foregoing Consent 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.
Section 13. Status of Parties. In marketing Units pursuant to this
Agreement, the Selling Agent is acting solely as agent for the Trust, and not
as principal. The Selling Agent will use its best efforts to assist the Trust
in obtaining performance by each purchaser solicited by such Selling Agent
whose offer to purchase Units from the Trust has been accepted on behalf of
the Trust, but the Selling Agents shall not have any liability to the Trust in
the event that Subscription Agreements and Powers of Attorney are improperly
completed or any such purchase is not consummated for any reason. Except as
specifically provided herein, the Selling Agent shall in no respect be deemed
to be an agent of the Trust.
Section 14. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of any party hereto submitted pursuant
hereto shall remain operative and in full force and effect, regardless of any
investigation made by, or on behalf of, the Selling Agent, the Managing Owner,
the Trust, any Trading Advisor or any person who controls any of the
foregoing, and shall survive the Closing Times.
Section 15. Termination. The Selling Agent shall have the right to
terminate its participation under this Agreement at any time for cause and at
any time after the end of the Initial Offering Period upon fifteen (15)
business days' prior written notice of such termination to the Managing Owner
and the Trust. This Agreement shall terminate (except as set forth in Section
15 below) in respect of each Trading Advisor at the time that such Trading
Advisor's Advisory Agreement terminates. The Managing Owner may terminate the
offering of the Units at any time upon fifteen (15) business days' prior
written notice to the Selling Agent.
Section 16. Survival. Irrespective of the expiration or termination
of this Agreement, Sections 7, 8, 9 and 11 hereof shall survive, and all
applicable provisions of this Agreement with respect to outstanding Units.
Section 17. Notices and Authority to Act. All communications
hereunder shall be in writing and, if sent to the Managing Owner or the Trust,
shall be mailed, delivered or telecopied and confirmed to the Managing Owner
at: Preferred Investment Solutions Corp., Xxx Xxxxxxxx Xxxx, X.X. Xxx 0000,
Xxxxxxxxx, Xxxxxxxxxxx 00000-0000, Attn: General Counsel; and Xx. Xxxxxxx
Xxxxxxxxxxxxx, Xxxxxx Xxxxxx Xxxxx & Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000. If sent to ____________________________, shall be mailed, delivered
or telecopied and confirmed to it at _______________________________________,
Attention: ____________. Notices shall be effective when actually received.
Section 18. Parties. This Agreement shall inure to the benefit of
and be binding upon the Selling Agent, the Trust, the Managing Owner, the
Trading Advisors and such parties' respective successors to the extent
provided herein. This Agreement and the conditions and provisions hereof are
intended to be and are for the sole and exclusive benefit of the parties
hereto and their respective successors, assigns and controlling persons and
parties indemnified hereunder, and for the benefit of no other person, firm or
corporation. No purchaser of a Unit shall be considered to be a successor or
an assignee solely on the basis of such purchase.
-19-
Section 19. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
Section 20. Consent to Jurisdiction. The parties hereto agree that
any action or proceeding arising directly, indirectly, or otherwise in
connection with, out of, related to, or from this Agreement, any breach
hereof, or any transaction covered hereby, shall be resolved, whether by
arbitration or otherwise, within the County of New York, and State of New
York. Accordingly, the parties hereto consent and submit to the jurisdiction
of the federal and state courts and applicable arbitral body located within
the County of New York, and State of New York. The parties further agree that
any such action or proceeding brought by any party to enforce any right,
assert any claim, or obtain any relief whatsoever in connection with this
Agreement shall be brought by such party exclusively in the federal or state
courts, or if appropriate, before any applicable arbitral body, located within
the County of New York, and State of New York.
The Managing Owner and the Trust each agree that, at the request of
the Selling Agent, they will submit any action or proceeding referred to in
this Section 19 to NFA arbitration in the County of New York and State of New
York, and agree to execute and deliver to each Selling Agent such Selling
Agent's standard form of arbitration agreement, as required by NFA
regulations.
Section 21. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and both of which together
shall be deemed one and the same instrument.
Section 22. Series Disclaimer and Acknowledgment. The parties hereto
acknowledge and agree that the Trust is organized in series pursuant to
Sections 3804(a) and 3806(b)(2) of the Delaware 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 of the Trust. There may be several series of the Trust created
pursuant to the Declaration of Trust and Trust Agreement of the Trust.
-20-
If the foregoing is in accordance with each party's understanding of
their agreement, each party is requested to sign and return to the Managing
Owner and the Trust a counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement among them in accordance with
its terms.
Very truly yours,
WORLD MONITOR TRUST III PREFERRED INVESTMENT SOLUTIONS CORP.
By: PREFERRED INVESTMENT SOLUTIONS CORP.,
Managing Owner
By:________________________________ By:________________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
COO and Sr. Exec. Vice President COO and Sr. Exec. Vice President
KENMAR SECURITIES, INC.
By:________________________________
Name:
Title:
XXXXXX CAPITAL MANAGEMENT, L.P.
By:________________________________
Name:
Title:
BRIDGEWATER ASSOCIATES, INC.
By:________________________________
Name:
Title:
EAGLE TRADING SYSTEMS, INC.
By:________________________________
Name:
Title:
-21-
Exhibit A
CORRESPONDENT SELLING AGENT AGREEMENT
World Monitor Trust III
(A Delaware Statutory Trust)
$500,000,000
Units of Beneficial Interest
Preferred Investment Solutions Corp.
Managing Owner
Dated March __, 2005
Correspondent Selling Agent Agreement
World Monitor Trust III
TABLE OF CONTENTS
Page
----
Section 1. Representations and Warranties of the Managing Owner:.......................A-2
Section 2. Offering and Sale of Units..................................................A-6
Section 3. Compliance with Conduct Rule 2810 and General Laws.........................A-10
Section 4. Blue Sky Survey............................................................A-12
Section 5. Covenants of the Managing Owner............................................A-13
Section 6. Payment of Expenses and Fees...............................................A-14
Section 7. Conditions of Closing......................................................A-14
Section 8. Indemnification, Contribution and Exculpation..............................A-15
Section 9. Consent....................................................................A-16
Section 10. Status of Parties..........................................................A-18
Section 11. Representations, Warranties and Agreements to Survive Delivery.............A-18
Section 12. Termination................................................................A-18
Section 13. Survival...................................................................A-18
Section 14. Notices and Authority to Act...............................................A-18
Section 15. Parties....................................................................A-18
Section 16. Governing Law..............................................................A-19
Section 17. Consent to Jurisdiction....................................................A-19
Section 18. Counterparts...............................................................A-19
Section 19. Series Disclaimer and Acknowledgment.......................................A-19
Correspondent Selling Agent Agreement
World Monitor Trust III
(A Delaware Statutory Trust)
$500,000,000
Units of Beneficial Interest
Initially $100 per Unit
CORRESPONDENT SELLING AGENT AGREEMENT
March __, 2005
[Correspondent Selling Agent]
Dear Sir:
Preferred Investment Solutions Corp., a Connecticut corporation (the
"Managing Owner"), has caused the formation, on September 28, 2004, of a
statutory trust pursuant to the Delaware Statutory Trust Act (the "Delaware
Act") under the name, World Monitor Trust III (the "Trust"), for the purposes
of engaging in the speculative trading of commodity futures and forward
contracts, commodity options and other commodity interests. Wilmington Trust
Company, a Delaware banking 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. Units of beneficial
interest in the Trust (the "Units") will be issuable in multiple series (the
"Series"), each separately managed indirectly by one or more different trading
advisors (each a "Trading Advisor" and, collectively, the "Trading Advisors"),
each of which is registered with the Commodity Futures Trading Commission (the
"CFTC") as a commodity trading advisor under the Commodity Exchange Act, as
amended (the "CE Act"), and is a member of the National Futures Association
(the "NFA") in such capacity. Each Series of Units will be separately valued
and its assets will be segregated from the assets of the other Series. Holders
of Units ("Limited Owners") will have the right to exchange, through
redemption and purchase, Units of one Series for Units of any other Series.
The Trust proposes to offer to the public and to sell to Subscribers (as
hereinafter defined) acceptable to the Managing Owner, the Units upon the
terms and subject to the conditions set forth in the Selling Agent Agreement,
dated as of March __, 2005 by and among Kenmar Securities Inc., a Connecticut
corporation, as selling agent, the Managing Owner, the Trading Advisors and
the Trust (the "Selling Agreement") and the Registration Statement (as
hereinafter defined) and the Prospectus (as hereinafter defined) included
therein referred to below. A maximum of $15,000,000 for each of Series G and
Series H, $7,500,000 for Series I and $50,000,000 for Series J will be offered
and sold during the Initial Offering Period for such Series, and thereafter
additional Units will be offered and sold during the Continuing Offering
Period for each Series, as such terms are hereinafter defined. The Units of
each Series will be offered at $100 per Unit during the Initial Offering
Period and thereafter at the Net Asset Value per Unit of the applicable Series
("Series Net Asset Value"). All capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Prospectus. The Selling Agent
shall be a selling agent for the Trust. Other selling agents (the
"Correspondent Selling Agents") may be selected by the
A-1
Correspondent Selling Agent Agreement
Selling Agent with the consent of the Managing Owner in accordance with the
terms of the Selling Agreement. You have been so selected by the Selling Agent
and the Trust. We understand that you are willing to use your best efforts to
market the Trust's Units.
Each Series of the Trust desires to raise capital as herein provided
by the sale of Units, the purchasers of which will become beneficiaries
("Unitholders") of such Series of the Trust, and you hereby agrees to use your
best efforts to market the Units pursuant to the terms hereof. Accordingly,
you (the "Correspondent Selling Agent"), the Selling Agent, the Managing Owner
and the Trust, intending to be legally bound, hereby agree as follows.
Section 1. Representations and Warranties of the Managing Owner. The
Managing Owner represents and warrants to the Correspondent Selling Agent as
follows -- such representations and warranties to be restated and reaffirmed
as of each Closing Time (as defined in Section 2 hereof):
(a) A registration statement on Form S-1 for the Trust and as a part
thereof a combined prospectus for all Series with respect to all of the
Units being offered (which registration statement, together with all
amendments thereto, at the times and in the forms declared effective by
the Securities and Exchange Commission (the "SEC") shall be referred to
herein as the "Registration Statement", and which prospectus in final
form, together with all amendments and supplements thereto, shall be
referred to herein as the "Prospectus"), prepared in full conformity 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, have been
filed with the SEC, the National Association of Securities Dealers, Inc.
(the "NASD") and the NFA pursuant to the 1933 Act, 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 Selling Agent;
(b) To the best of the Managing Owner's knowledge, no order
preventing or suspending the effectiveness of the Registration Statement
or use of the Prospectus or any previous prospectus with respect to the
Units has been issued by the SEC, the CFTC, the NASD, the NFA or any
other federal, state or other governmental agency or body. The
Registration Statement contains all statements which are required to be
made therein, conforms in all material respects to the requirements of
the 1933 Act and the CE Act and the rules and regulations of the SEC and
the CFTC, respectively, thereunder, and does not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein (with
respect to the Prospectus, in light of the circumstances in which they
were made) not misleading; and, when the Registration Statement becomes
effective under the 1933 Act and at all times subsequent thereto up to
and including the Initial Closing Time for each Series, and thereafter up
to and including each subsequent closing date during the Continuous
Offering Period, as such terms are hereinafter defined, 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
A-2
Correspondent Selling Agent Agreement
conform in all material respects to the requirements of the 1933 Act, 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
include 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 this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information
furnished in writing to the Trust or the Managing Owner by the Selling
Agent, the Trustee, any Commodity Broker or their respective agents or by
or on behalf of any Trading Advisor or any other commodity trading
advisor (an "Other Advisor") engaged by the Managing Owner on behalf of
the Trust for use therein, all without prejudice to any defense that the
Selling Agent may have based upon its "due diligence" investigation under
the 1933 Act;
(c) The certificate of trust (the "Certificate of Trust") pursuant
to which the Trust has been formed and the Amended and Restated
Declaration of Trust and Trust Agreement of the Trust (the "Trust
Agreement") provide for the subscription for and sale of the Units of the
Trust; all action required to be taken by the Managing Owner and the
Trust as a condition to the sale of the Units to qualified subscribers
therefor has been, or prior to the Initial Closing Time (as defined in
Section 2 hereof) will have been, taken; and, upon payment of the
consideration therefor specified in all accepted Subscription Agreements
and Powers of Attorney, the Units will constitute valid units of
beneficial interest in the Trust as to which the subscribers thereto will
have the same limitation on personal liability as stockholders in a
private corporation for profit organized under the laws of the State of
Delaware, and the subscribers will be Unitholders of the Trust entitled
to all the applicable benefits under the Trust Agreement and the Delaware
Act.
(d) The Trust is a statutory trust duly organized pursuant to the
Delaware Act and is validly existing and in good standing under the laws
of the State of Delaware with full power and authority to engage in the
business to be conducted by it, as described in the Prospectus. The Trust
is in good standing and qualified to do business in each jurisdiction in
which such qualification is necessary in order to protect the limited
liability of Unitholders and in which the nature or conduct of its
business as described in the Registration Statement requires such
qualification and the failure to be so qualified would materially
adversely affect the Trust.
(e) The Managing Owner is, and will continue to be so long as it is
the managing owner of the Trust, a corporation duly organized, validly
existing and in good standing under the laws of the State of Connecticut
and is in good standing and qualified to do business in each jurisdiction
in which the nature or conduct of its business as described in the
Registration Statement and Prospectus requires such qualification and the
failure to be so qualified would materially adversely affect the Trust's
or the Managing Owner's ability to perform its obligations hereunder.
(f) The Trust and the Managing Owner each have full trust and
corporate power and authority, as the case may be, under applicable law
to perform its respective obligations under the Selling Agreement, the
Trust Agreement, the escrow agreement
A-3
Correspondent Selling Agent Agreement
described in the Prospectus relating to the offering of the Units (the
"Escrow Agreement"), the Advisory Agreements by and among each Trading
Advisor, the trading vehicles described in the Prospectus and the
Managing Owner (the "Advisory Agreements") and this Agreement, and to
conduct its business as described in the Registration Statement and
Prospectus.
(g) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there will not have been
any adverse change in the condition (financial or otherwise), business or
prospects of the Managing Owner or the Trust, whether or not arising in
the ordinary course of business, of which the Selling Agent shall not be
informed by the Managing Owner.
(h) Each of the Trust Agreement, the Escrow Agreement, the Selling
Agreement, the Customer Agreements, the Advisory Agreements and this
Agreement has been duly and validly authorized, executed and delivered by
the Managing Owner on behalf of the Trust or a Series (including in its
capacity as a member of a trading vehicle described in the Prospectus)
and by the Managing Owner, and each constitutes a valid, binding and
enforceable agreement of the Trust or such Series and the Managing Owner
in accordance with its terms.
(i) The execution and delivery of the Trust Agreement, the Escrow
Agreement, the Selling Agreement, the Advisory Agreements and this
Agreement, the incurrence of the obligations set forth therein and herein
and the consummation of the transactions contemplated therein, herein and
in the Prospectus: (i) will not constitute a breach of, or default under,
any instrument or agreement by which the Managing Owner, the Trust or any
Series, as the case may be, or any of their property or assets is bound,
or any statute, order, rule or regulation applicable to the Managing
Owner, the Trust or any Series, as the case may be, of any court or any
governmental body or administrative agency having jurisdiction over the
Managing Owner, the Trust or any Series, as the case may be; (ii) will
not result in the creation or imposition of any lien, charge or
encumbrance on any property or assets of the Managing Owner, the Trust or
any Series; (iii) will not give any party a right to terminate its
obligations or result in the acceleration of any obligations under any
material instrument or agreement by which the Managing Owner, the Trust
or any Series, as the case may be, or any of their respective property or
assets is bound; and (iv) will not result in any material liability
(other than such as may be contemplated hereby) on the part of either the
Managing Owner, the Trust or any Series.
(j) Except as otherwise disclosed in the Registration Statement or
the Prospectus, there is not pending nor, to the best of the Managing
Owner's knowledge, threatened any action, suit or proceeding before or by
any court or other governmental body to which the Managing Owner or the
Trust is a party, or to which any of the assets of the Managing Owner or
the Trust is subject, which might reasonably be expected to result in any
material adverse change in the condition (financial or otherwise),
business or prospects of the Managing Owner or the Trust or which is
required to be disclosed in the Registration Statement or Prospectus
pursuant to the CE Act, the 1933 Act, the SEC Regulations or the CFTC
Regulations.
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Correspondent Selling Agent Agreement
(k) No stop order relating to the Registration Statement has been
issued by any federal or state securities commission, and no proceedings
therefor are pending or, to the best knowledge of the Managing Owner,
threatened.
(l) The Managing Owner and each of its principals and employees
have, and will continue to have so long as it is the managing owner of
the Trust, all federal and state governmental, regulatory,
self-regulatory and commodity exchange approvals and licenses, and the
Managing Owner (either on behalf of itself or 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 (i) as a commodity pool operator and commodity trading
advisor under the CE Act, (ii) membership in the NFA as a commodity pool
operator and commodity trading advisor, and (iii) as a "transfer agent"
with the Securities and Exchange Commission, and this Agreement and the
performance of such obligations will not contravene or result in a breach
of any provision of the Managing Owner's certificate of incorporation,
by-laws or any agreement, instrument, order, law or regulation binding
upon it or any of its employees or principals, except that the
registration of Xxxxxxxx X. Block, Esq. as a principal of the Managing
Owner is pending.
(m) The Trust does not require any federal or state governmental,
regulatory, self-regulatory or commodity exchange approvals or licenses,
and the Trust need not effect any filings or registrations with any
federal or state governmental agencies in order to conduct its business
and to act as contemplated by the Registration Statement and Prospectus
and to issue and sell the Units (other than filings under the 1933 Act,
the CE Act and state securities laws relating solely to the offering of
the Units).
(n) The Managing Owner has the financial resources necessary to meet
its obligations to the Selling Agent hereunder.
(o) The Managing Owner acknowledges that the Correspondent Selling
Agent's customer lists constitute proprietary data belonging to the
Correspondent Selling Agent, and the Managing Owner agrees that it will
not disseminate any confidential information regarding any of the
foregoing, except as required by law. Furthermore, the Managing Owner
agrees that it will not independently solicit any client on the
Correspondent Selling Agent's customer lists, except as requested by the
Correspondent Selling Agent in connection with soliciting investments in
the Trust. The Managing Owner further agrees with the Selling Agent and
the Correspondent Selling Agent that the Managing Owner will use its best
efforts to keep the identity of the Correspondent Selling Agent, as well
as the terms of this Agreement, confidential, except as otherwise
required by law or otherwise made public by third parties without the
negligence, misconduct or breach of the terms hereof by the Managing
Owner.
(p) The accountants who certified the Statement of Financial
Position of the Managing Owner and the Statement of Financial Condition
of the Trust included in the Registration Statement are, with respect to
the Managing Owner and the Trust,
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Correspondent Selling Agent Agreement
independent public accountants as required by the 1933 Act and the SEC
Regulations. These Statements fairly present the financial position and
financial condition of the Managing Owner and the Trust, as the case may
be, as of the date of such Statements. The audited Statement of Position
of the Managing Owner and Statement of Financial Condition of the Trust
are presented in accordance, and the unaudited Statements of Financial
Position of the Managing Owner substantially in accordance, with
Generally Accepted Accounting Principles (as currently in effect in the
United States).
(q) The Trust will not be required to register as an investment
company under the Investment Company Act of 1940 in order to conduct its
operations as described in the Prospectus.
Section 2. Offering and Sale of Units.
(a) The Correspondent Selling Agent is hereby appointed as a
non-exclusive Correspondent Selling Agent of the Selling Agent during the
term herein specified for the purpose of finding acceptable subscribers
for the Units through a public offering of such Units. The Correspondent
Selling Agent hereby accepts such agency and agrees on the terms and
conditions herein set forth to use its best efforts to find acceptable
subscribers.
It is understood that the Correspondent Selling Agent's agreement to
use its best efforts to find acceptable subscribers for the Units shall
not prevent it from acting as a selling agent or underwriter for the
securities of other issuers which may be offered or sold during the term
hereof. The agency of the Correspondent Selling Agent hereunder shall
continue until the expiration or termination of this Agreement, as
provided herein, including such additional period as may be required to
effect the closing of the sale of the Units subscribed for through the
Correspondent Selling Agent through the date of termination.
Each subscriber shall be required to submit a minimum subscription
of at least $5,000 ($2,000 for trustees or custodians of eligible
employee benefit plans and individual retirement accounts and existing
Unitholders making additional investments), subject to higher minimum
requirements imposed by certain state regulators as set forth in Exhibit
B to the Prospectus. Incremental investments are permitted in $100
multiples with Units being sold in fractions calculated to three decimal
places; provided, however, that each subscriber will be required to
submit a minimum subscription of at least $500 for each Series to which
such subscriber subscribes.
During the Initial Offering Period all Correspondent Selling Agent
branch offices will be required to forward subscriptions to the Managing
Owner no later than noon of the first Business Day following receipt of
an acceptable subscription agreement from a subscriber for Units (each, a
"Subscriber") and during the Continuous Offering Period all Correspondent
Selling Agent branch offices will be required to forward subscriptions to
the Managing Owner no later than 10:00 a.m., New York City time, on the
fifth Business Day prior to the last day each month. The Managing Owner
shall have sole responsibility for determining whether Subscribers are
qualified to become Limited Owners in the Trust and for accepting
subscriptions and determining their validity. The Correspondent Selling
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Correspondent Selling Agent Agreement
Agent agrees to use its best efforts to cause Subscribers to prepare
their subscriptions in proper form. The Correspondent Selling Agent shall
deposit the subscription proceeds from the sale of Units in each Series
(the "Proceeds") during the Initial Offering Period in the escrow account
and sub-account corresponding to such Series at XXXxxxxx Xxxxx Xxxx, Xxx
Xxxx, XX (the "Escrow Agent"), for the separate benefit of the
Subscribers of such Series not later than the second Business Day
following the receipt by the Managing Owner of completed subscription
agreements accompanied by such Proceeds. Proceeds will be transferred to
the escrow account and sub-account at the Escrow Agent by check from the
Subscriber or via wire transfer from the Subscriber's account. The
Managing Owner will determine whether to accept or reject all
subscriptions within two (2) Business Days following receipt of
subscription documents from the Correspondent Selling Agent. Upon
notification by the Managing Owner to the Escrow Agent that a
subscription for Units of a Subscriber has been rejected, for whatever
reason, or in the event that the Subscriber rescinds its subscription in
conformity with the requirements of the North American Securities
Administrators Association Inc. Guidelines for Registration of Commodity
Pool Programs, the Escrow Agent shall by check or wire transfer return
any Proceeds held in escrow, excluding any interest thereon, to the payor
of such Proceeds. The Escrow Agent shall make interest payments to the
Trust to be retained by the Trust for the benefit of all investors in the
applicable Series of Units by delivering a check in the amount equal to
the interest allocable by Series to each Subscriber. If subscriptions for
the minimum number of Units in a Series set forth in the Prospectus
(after taking into account the Managing Owner's contribution) have not
been made by the conclusion of the Initial Offering Period for a Series,
then all Proceeds deposited in the escrow account designated for that
Series, excluding any interest thereon, shall be returned (in the same
way described above in the case of a rejected or rescinded subscription)
to the payor of such Proceeds on a pro rata basis (and taking into
account the amount and time of deposit), no later than ten (10) Business
Days after the termination of the Initial Offering Period for the
affected Series, or as soon thereafter as practicable if payment cannot
be made in such time period.
During the Continuous Offering Period, the Managing Owner also will
determine whether to accept or reject all subscriptions received and will
do so (1) within two (2) Business Days following receipt from the
Correspondent Selling Agent of a "Request for Exchange" (in the form
attached to the Prospectus as Exhibit C) or the "Subscription Agreement"
(in the form attached to the Prospectus as Exhibit B) with respect to a
Limited Owner in an existing Series and (2) within two (2) Business Days
following receipt of subscription documents from the Correspondent
Selling Agent for a new Subscriber. For subscriptions which are accepted,
Proceeds will be transferred to the Escrow Agent by check from the
Subscriber or via wire transfer from the Subscriber's account. For an
existing Limited Owner, such transfer will occur on the first Business
Day which first follows the date on which the Managing Owner accepts the
subscription. For a new Subscriber, such transfer will occur on the
second Business Day after the subscription documents are delivered by the
Subscriber to the Correspondent Selling Agent (or an Additional Seller).
At the Initial Closing Time for a Series, and thereafter on each
subsequent closing date with respect to that Series, the acceptance,
delivery, and receipt of subscriptions for
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Correspondent Selling Agent Agreement
Units will be subject to the terms and conditions set forth in this
Agreement, including, but not limited to, (1) the payment of the full
subscription price for Units and delivery of a properly completed
Subscription Agreement/Power of Attorney by each Subscriber; (2) the fact
that a new Subscriber's subscription will not be final and binding until
two (2) Business Days following the Subscriber's delivery of his
subscription documents to the Correspondent Selling Agent (or an
Additional Seller), and (3) compliance with Section 7 hereof. Upon the
satisfaction of such terms and conditions, the aggregate subscription
price for Units (inclusive of any interest earned on such subscriptions
while held in escrow which will be retained by the Trust for the benefit
of all investors in the applicable Series of Units) will be paid and
delivered to the Trust in accordance with the Escrow Agreement.
The Correspondent Selling Agent agrees that it will not take any of
the following action against the Trust: (1) seek a decree or order by a
court having jurisdiction in the premises (A) for relief in respect of
the Trust in an involuntary case or proceeding under the federal
Bankruptcy Code or any other federal or state bankruptcy, insolvency,
reorganization, rehabilitation, liquidation or similar law or (B)
adjudging the Trust a bankrupt or insolvent, or seeking reorganization,
rehabilitation, liquidation, arrangement, adjustment or composition of or
in respect of the Trust under the federal 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 of any substantial part of any of its 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 "Bankruptcy or Insolvency Action").
In addition, the Correspondent Selling Agent agrees that for any
obligations due and owing to it by any Series, the Correspondent Selling
Agent will look solely and exclusively to the assets of such Series or
the Managing Owner, if it has liability in its capacity as Managing
Owner, to satisfy its claims and will not seek to attach or otherwise
assert a claim against the other assets of the Trust, 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.
This Agreement has been made and executed by and on behalf of the
Trust and the Managing Owner and the obligations of 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 above and no resort shall be had to the assets of other Series
issued by the Trust or the Limited Owners' personal property for the
satisfaction of any obligation or claim hereunder.
(b) Units in Class I of each Series. As compensation, the
Correspondent Selling Agent shall receive from the Selling Agent a
service fee equal to 2.0% of the subscription amount of each subscription
of Units in Class I of the Series sold by it. After the expiration of
twelve (12) months following the purchase of Class I Units of any Series,
the Correspondent Selling Agent shall also receive monthly on-going
trailing
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Correspondent Selling Agent Agreement
compensation equal to 1/12th of 2.0% (2.0% per annum) of the Net Asset
Value per Unit of such Class I Units of such Series sold by the
Correspondent Selling Agent on an on-going basis for on-going services
provided to the Series and their Limited Owners. Such on-going services
may include, without limitation, advising Limited Owners of the Net Asset
Value of the relevant Series of the Trust and of their Units in such
Series, advising Limited Owners whether to make additional capital
contributions to any Series or to redeem their Units and providing
information to Limited Owners with respect to futures markets conditions.
(c) Units in Class II of each Series. The Correspondent Selling
Agent will not receive any service fees for any Class II Unit sold by it.
Ongoing compensation, which is payable only in respect of Units sold
by Registered Representatives of the Correspondent Selling Agent who are
themselves registered with the CFTC and who have passed either the Series
3 National Commodity Futures Examination or the Series 31 Futures Managed
Funds Examination, is contingent upon the agreement by such Registered
Representatives to provide ongoing services in connection with the Units
sold by such Registered Representatives, including: (i) inquiring of the
Managing Owner (through the Selling Agent) from time to time, at the
request of an owner of Units, as to the Net Asset Value of a Unit; (ii)
inquiring of the Managing Owner (through the Selling Agent) from time to
time, at the request of an owner of Units, regarding the commodities
markets and the Trust; (iii) assisting, at the request of the Managing
Owner (through the Selling Agent), in the redemption or exchange of
Units; and (iv) providing such other services to the owners of Units as
the Managing Owner (through the Selling Agent) may, from time to time,
reasonably request. The Correspondent Selling Agent agrees to adopt
procedures to monitor the adequacy of the ongoing services provided by
its Registered Representatives. The Selling Agent shall not be
responsible for determining whether such Registered Representatives are
properly registered with the CFTC.
(d) The Correspondent Selling Agent must be either (i) a dealer who
is a member in good standing of the NASD and which agrees, or (ii) a
foreign bank, dealer or institution ineligible for membership in a
registered security association (within the meaning of Section 25 of
Article III of the NASD's Rules of Fair Practice) and agree that it will
make no sales of Units within the United States, its territories or
possessions or areas subject to its jurisdiction.
(e) Ongoing compensation will be paid at the end of each calendar
quarter for which such compensation is payable on the basis of the Units
outstanding during each month during such quarter. Net Assets, for
purposes of determining ongoing compensation, shall be calculated after
reduction of all expenses of the Trust, including both accrued and unpaid
expenses.
The Correspondent Selling Agent (unless it is a foreign dealer),
although otherwise entitled to ongoing compensation, will not be entitled
to receipt thereof (but may continue to receive installment selling
commissions) for any month during any portion of which the Registered
Representative who is receiving such ongoing
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Correspondent Selling Agent Agreement
compensation is at any time not properly registered with the CFTC.
Consequently, the Selling Agent will itself be ineligible to receive any
such ongoing compensation from the Managing Owner in respect of such
Units.
(f) If, with respect to any Series, acceptable subscriptions for at
least the minimum number of Units specified on the cover of the
Prospectus (the "Series Minimum Units") shall not have been received by
July 1, 2005 (unless extended until October 1, 2005 by the Managing
Owner), all funds received from subscribers for Units of such Series
shall be promptly returned in full, together with all interest payable
thereon (irrespective of amount) and without deduction for any escrow or
other fee or expense; and thereupon the Selling Agent's duties under this
Agreement in respect of such Series shall terminate without further
obligation hereunder on the part of the Selling Agent, the Managing Owner
or the Trust, except as set forth in Section 9 hereof.
(g) If, with respect to any Series, at least the Series Minimum
Units shall have been so subscribed for, then on July 1, 2005, or (i) at
such earlier time after subscriptions for the Series Minimum Units shall
have been received as determined by the Managing Owner or (ii) at such
later date on or prior to October 1, 2005, to which the Managing Owner
may extend the initial offering, the Managing Owner shall notify the
Correspondent Selling Agent of the initial closing of the Trust (the
"Series Initial Closing"), as well as of the aggregate number of Units of
such Series for which the Managing Owner has received acceptable
subscriptions. Payment of the purchase price for such Units shall be made
at the office of Sidley Xxxxxx Xxxxx & Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other place as shall be agreed upon
among the Selling Agent and the Managing Owner, at 10:00 A.M., New York
time, on such day and time (not later than five (5) business days after
the end of the Initial Offering Period) as shall be agreed upon among the
Selling Agent and the Managing Owner (with respect to such Series, the
"Initial Closing Time"). Subsequent to the Initial Closing Time, Units of
such Series may continue to be sold as of the first day of each calendar
month (each such sale, an "Additional Closing" and each such date a
"Closing Time"), in the discretion of the Trust. Notwithstanding anything
to the contrary herein, in no event shall the Managing Owner or the Trust
be obliged to accept any subscriptions for Units of any Series unless, as
of such Series' Initial Closing Time, the Units of such Series are
"publicly-offered securities" within the meaning of the rules and
regulations promulgated under and pursuant to the Employee Retirement
Income Security Act of 1974, as amended.
(h) No selling commissions or ongoing compensation shall be paid on
Units sold to the Managing Owner or any of its principals or affiliates.
(i) The Trust shall not in any respect be responsible for any
selling commissions or ongoing compensation described herein. All such
commissions and ongoing compensation are to be solely the responsibility
of the Managing Owner.
Section 3. Compliance with Conduct Rule 2810 and General Laws.
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Correspondent Selling Agent Agreement
(a) The Correspondent Selling Agent will use its best efforts to
find eligible persons to purchase the Units on the terms stated herein
and in the Registration Statement and Prospectus. It is understood that
the Correspondent Selling Agent has no commitment with regard to the sale
of the Units other than to use its best efforts. In connection with the
offer and sale of the Units, the Correspondent Selling Agent represents
that it will comply fully with all applicable laws, and the rules and
interpretations of the NASD, the SEC, the CFTC, state securities
administrators and any other regulatory body. In particular, and not by
way of limitation, the Correspondent Selling Agent represents and
warrants that it is familiar with NASD Conduct Rule 2810 and that it will
comply fully with all the terms thereof in connection with the offering
and sale of the Units. The Correspondent 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 maintained.
(b) The Correspondent Selling Agent agrees not to recommend the
purchase of Units to any subscriber unless the Correspondent Selling
Agent shall have reasonable grounds to believe, on the basis of
information obtained from the subscriber concerning, among other things,
the subscriber's investment objectives, other investments, financial
situation and needs, that (to the extent relevant for the purposes of
Conduct Rule 2810 and giving due consideration to the fact that the Trust
is in no respects a "tax shelter") the subscriber is or will be in a
financial position appropriate to enable the subscriber to realize to a
significant extent the benefits of the Trust, including the tax benefits
(if any) described in the Prospectus; the subscriber has a fair market
net worth sufficient to sustain the risks inherent in participating in
the Trust; and the Units are otherwise a suitable investment for the
subscriber. The Correspondent Selling Agent agrees to maintain such
records as are required by the NASD and the state securities commissions
for purposes of determining investor suitability. In connection with
making the foregoing representations and warranties, the Correspondent
Selling Agent further represents and warrants that it has, among other
things, examined the following sections in the Prospectus and obtained
such additional information from the Managing Owner regarding the
information set forth thereunder as the Correspondent 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 Trust and provides an adequate basis to subscribers for
evaluating an investment in the Units:
"The Risk You Face"
"The Series and Their Objectives"
"The Trust, The Series, The Trustee and the Managing Owner;
Certain Material Terms of the Trust Declaration"
"Charges"
"Redemptions and Distributions"
"Conflicts of Interest"
"Federal Income Tax Consequences"
"The Futures and Forward Markets"
"Performance of Commodity Pool Operated by the Managing Owner
and its Affiliates"
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Correspondent Selling Agent Agreement
In connection with making the representations and warranties set
forth in this paragraph, the Correspondent Selling Agent has not relied
on inquiries made by or on behalf of any other parties.
The Correspondent Selling Agent agrees to inform all prospective
purchasers of Units of all pertinent facts relating to the liquidity and
marketability of the Units as set forth in the Prospectus.
(c) All payments are made by authorization to the Correspondent
Selling Agent to debit the subscriber's customer securities account
maintained with the Selling Agent. Subscribers who do so must have their
subscription payments in their accounts on the specified settlement date,
of which subscribers will be notified by the Correspondent Selling Agent
and which will occur not later than three (3) business days following
notification by the Managing Owner to the Selling Agent of the acceptance
of a particular subscription and not later than the termination of the
offering period for the Units. On each settlement date, subscribers'
customer securities accounts will be debited by the Selling Agent in the
amount of their subscriptions. The amount of the subscription payments so
debited will be transmitted by the Selling Agent directly to the Escrow
Agent in the form of a Selling Agent check or wire transfer made payable
to "JPMorgan Chase Bank, as Escrow Agent for World Monitor Trust III
Escrow Account No. ___________________."
The Correspondent Selling Agent and the Managing Owner may also make
such other arrangements for the transmission of subscriptions as they may
deem convenient and appropriate with the consent of the Selling Agent;
provided that such arrangements comply in all respects with SEC
Regulations 10b-9 and 15c2-4. Such arrangements may be made through or
using facilities made available by the Selling Agent.
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 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.
Section 4. Blue Sky Survey. The Managing Owner shall cause Sidley
Xxxxxx Xxxxx & Xxxx LLP, counsel to the Managing Owner, to prepare and deliver
to the Correspondent Selling Agent, a Blue Sky Survey which shall set forth
the United States jurisdictions in which the Units may be offered and sold.
The Managing Owner agrees to use its best efforts to qualify the Units under
the securities or Blue Sky laws of the various state jurisdictions, and to
maintain such qualification during the term of the offering, provided that the
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Correspondent Selling Agent Agreement
Managing Owner reserves the right to withdraw application for the Units'
registration. It is understood and agreed that the Correspondent Selling Agent
may rely, in connection with the offering and sale of Units in any United
States jurisdiction, on advice given by Sidley Xxxxxx Xxxxx & Xxxx LLP as to
the legality of the offer or sale of the Units in such jurisdiction.
Section 5. Covenants of the Managing Owner.
(a) The Managing Owner will notify the Correspondent Selling Agent
immediately and confirm such notification in writing (i) when any
amendment to the Registration Statement shall have become 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 or for additional information relating
thereto, (iv) of any material criminal, civil or administrative
proceedings against or involving the Managing Owner or the Trust, (v) of
the issuance by the SEC, CFTC, NFA or any other federal or state
regulatory or self-regulatory body of any order suspending the
effectiveness of the Registration Statement under the Securities Act, the
registration or NFA membership of the Managing Owner as a "commodity pool
operator," or the registration of Units under the Blue Sky or securities
laws of any state or other jurisdiction or any order or decree enjoining
the offering or the use of the then current Prospectus or any Promotional
Material or of the institution, or notice of the intended institution, of
any action or proceeding for that purpose, or (vi) of any threatened
action of the type referred to in clauses (iii) through (v) of which the
Managing Owner is aware. In the event any order of the type referred to
in clause (v) is issued, the Managing Owner agrees to use best efforts to
obtain a lifting or rescinding of such order at the earliest feasible
date.
(b) The Managing Owner will deliver to the Selling Agent, for
delivery to the Correspondent Selling Agent, such number of conformed
copies of the Registration Statement as originally filed and as of each
amendment thereto (without exhibits) as the Correspondent Selling Agent
shall reasonably request.
(c) The Managing Owner will deliver to the Selling Agent, for
delivery to the Correspondent Selling Agent, as promptly as practicable
from time to time during the period when the Prospectus is required to be
delivered under the 1933 Act, such number of copies of the Prospectus (as
amended or supplemented) and of such Promotional Material as the
Correspondent Selling Agent may reasonably request for the purposes
contemplated by the 1933 Act or the SEC Regulations.
(d) During the period when the Prospectus is required to be
delivered pursuant to the 1933 Act, the Managing Owner and the Trust will
comply with all requirements imposed upon them by the 1933 Act and the CE
Act, the SEC Regulations and the CFTC Regulations, as from time to time
in force, so far as necessary to permit the continuance of sales of the
Units during such period in accordance with the provisions hereof and as
set forth in the Prospectus.
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Correspondent Selling Agent Agreement
(e) 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 and SEC Regulations,
the Managing Owner shall forthwith prepare and furnish to the Selling
Agent, for delivery to the Correspondent Selling Agent, at the expense of
the Managing Owner, a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the Prospectus which
will amend or supplement the Prospectus so as to effect the necessary
changes.
(f) The Managing Owner will deliver to the Correspondent Selling
Agent: (i) copies of all "Blue Sky" and other state securities law
clearances obtained by the Trust; and (ii) copies of all monthly and
annual reports, and of any other communications, sent to the Unitholders.
Section 6. Payment of Expenses and Fees. The Managing Owner will pay
all expenses incident to the performance of the obligations of the Managing
Owner and the Trust hereunder, including: (i) the printing and delivery to the
Selling Agent, for delivery to the Correspondent Selling Agent, in quantities
as hereinabove stated of copies of the Registration Statement and all
amendments thereto, of the Prospectus and any supplements or amendments
thereto, and of any supplemental sales materials; (ii) the reproduction of
this Agreement and the printing and filing of the Registration Statement and
the Prospectus (and, in certain cases, the exhibits thereto) with the SEC,
CFTC and NFA; (iii) the filing fees payable to the SEC and the NASD; (iv) the
qualification of the Units under the securities or "Blue Sky" laws in the
various jurisdictions, including filing fees and the fees and disbursements of
the Managing Owner's counsel incurred in connection therewith; and (v) the
services of Sidley Xxxxxx Xxxxx & Xxxx LLP and accountants for the Managing
Owner and the Trust.
The Managing Owner, the Selling Agent and the Correspondent Selling
Agent are each aware of the limitations imposed by NASD Conduct Rule 2810 on
the aggregate compensation which may be received by the selling agents in
connection with the offering and sale of the Units. Neither the Selling Agent
nor the Correspondent Selling Agent will in any event accept any payments from
the Managing Owner which, when added to the selling commissions (not including
ongoing compensation) which the Selling Agent will receive on each sale of a
Unit by the Correspondent Selling Agent, would exceed 10% of the gross
proceeds of the Units sold to the public by the Correspondent Selling Agent.
Section 7. Conditions of Closing. The sale of the Units and the
release of subscription funds from the escrow account are subject to (i) the
accuracy of the representations and warranties of the parties to the Selling
Agreement, to the performance by such parties of their respective obligations
thereunder and the satisfaction of each of the conditions to the sale of the
Units set forth therein, and (ii) the accuracy of the representations and
warranties of the parties hereto and to the performance by such parties of
their respective obligations hereunder.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement to be fulfilled prior to
a Closing Time, this Agreement and all obligations hereunder may be canceled
by any party hereto by notifying the other parties
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Correspondent Selling Agent Agreement
hereto of such cancellation in writing or by telegram at any time at or prior
to such Closing Time, and any such cancellation or termination shall be
without liability of any party to any other party other than in respect of
Units already sold and except as otherwise provided in Sections 6 and 8 of
this Agreement.
Section 8. Indemnification, Contribution and Exculpation. The
Managing Owner agrees to indemnify and hold harmless the Selling Agent and the
Correspondent Selling Agent and each person, if any, who controls the Selling
Agent and the Correspondent Selling Agent within the meaning of Section 15 of
the 1933 Act, as follows:
(a) against any and all loss, liability, claim, damage and expense
whatsoever arising from any breach of any representation or warranty of
the Managing Owner set forth herein or from any untrue statement of a
material fact or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto) or in the
Promotional Material or any omission or alleged omission therefrom of a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(b) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, or any investigation or proceeding by any governmental
agency or body commenced or threatened, or of any claim whatsoever based
upon any such breach, untrue statement or omission or any such alleged
untrue statement or omission (any settlement to be subject to indemnity
hereunder only if effected with the written consent of the Managing
Owner); and
(c) against any and all expense whatsoever (including the fees and
disbursements of counsel, but only of one counsel for the Selling Agent
and one for all correspondent selling agents) reasonably incurred in
investigating, preparing or defending against litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such material
breach, untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under clause (a) or (b) above.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to the Selling Agent or the Correspondent
Selling Agent (or a controlling person of the Correspondent Selling
Agent) in respect of any loss, liability, claim, damage or expense
referred to herein, then the Managing Owner shall, in lieu of
indemnifying the Selling Agent or the Correspondent Selling Agent (or a
controlling person) contribute to the amount paid or payable by the
Selling Agent or the Correspondent Selling Agent (or a controlling
person) as a result of such loss, liability, claim, damage or expense,
(i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Managing Owner on the one hand and by the
Selling
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Correspondent Selling Agent Agreement
Agent and the Correspondent Selling Agent on the other from the offering
of the Units by the Correspondent Selling Agent or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Managing Owner on the one hand and the Selling Agent and the
Correspondent Selling Agent on the other with respect to the statements
or omissions which resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. Relative
fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Managing
Owner on the one hand or the Selling Agent and the Correspondent Selling
Agent on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by the Selling Agent and the
Correspondent Selling Agent as a result of the loss, liability, claim,
damage or expense referred to above in this Section 8(d), shall be deemed
to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such otherwise indemnified party
(provided that only the legal costs of one counsel for the Selling Agent
and one for all correspondent selling agents shall be included) in
connection with investigating or defending any such action or claim.
In no case shall the Managing Owner be liable under this indemnity
and contribution agreement with respect to any claim unless the Managing Owner
shall be notified in writing of the nature of the claim within a reasonable
time after the assertion thereof, but failure to so notify the Managing Owner
shall not relieve the Managing Owner from any liability which it may have
otherwise than on account of this indemnity and contribution agreement. The
Managing Owner shall be entitled to participate at its own expense in the
defense or, if it so elects within a reasonable time after receipt of such
notice, to assume the defense of any suit so brought, which defense shall be
conducted by counsel chosen by it and satisfactory to the indemnified party
(or parties entitled to contribution hereunder) or parties, defendant or
defendants therein.
The Managing Owner agrees to notify the Selling Agent within a
reasonable time of the assertion of any claim in connection with the sale of
the Units against it or any of its officers or directors or any person who
controls the Managing Owner within the meaning of Section 15 of the 1933 Act.
Section 9. Consent. The Correspondent Selling Agent agrees and
consents (the "Consent") to look solely to each Series that is being offered
pursuant to this Agreement (the "Contracting Series") and the assets (the
"Contracting Series Assets") of the Contracting Series and to the Managing
Owner and its assets for payment. The Contracting Series 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 Series, including,
without limitation, funds delivered to the Trust for the purchase of interests
in a Series. In furtherance of the Consent, the Correspondent Selling Agent
agrees that any debts, liabilities, obligations, indebtedness, expenses and
claims of
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Correspondent Selling Agent Agreement
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 Series and the
Contracting Series Assets, shall be subject to the following limitations:
(a) Subordination of certain claims and rights. (1) except as set
forth below, the Claims, if any, of the Correspondent Selling Agent (the
"Subordinated Claims") shall be expressly subordinate and junior in right
of payment to any and all other Claims against the Trust and any Series
thereof, and any of their respective assets, which may arise as a matter
of law or pursuant to any contract; provided, however, that the Claims of
the Correspondent Selling Agent (if any) against the Contracting Series
shall not be considered Subordinated Claims with respect to enforcement
against and distribution and repayment from the Contracting Series, the
Contracting Series Assets and the Managing Owner and its assets; and
provided further that the valid Claims of the Correspondent Selling
Agent, if any, against the Contracting Series shall be pari passu and
equal in right of repayment and distribution with all other valid Claims
against the Contracting Series and (2) the Correspondent Selling Agent
will not take, demand or receive from any Series or the Trust or any of
their respective assets (other than the Contracting Series, the
Contracting Series Assets and the Managing Owner and its assets) any
payment for the Subordinated Claims;
(b) The Claims of the Correspondent Selling Agent with respect to
the Contracting Series shall only be asserted and enforceable against the
Contracting Series, the Contracting Series Assets and the Managing Owner
and its assets; and such Claims shall not be asserted or enforceable for
any reason whatsoever against any other Series, the Trust generally or
any of their respective assets;
(c) If the Claims of the Correspondent Selling Agent against the
Contracting Series or the Trust are secured in whole or in part, the
Correspondent Selling Agent hereby waives (under section 1111(b) of the
Bankruptcy Code (11 U.S.C. S 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 Series (other than the Contracting Series), as the case
may be;
(d) In furtherance of the foregoing, if and to the extent that the
Correspondent Selling Agent receives monies in connection with the
Subordinated Claims from a Series or the Trust (or their respective
assets), other than the Contracting Series, the Contracting Series Assets
and the Managing Owner and its assets, the Correspondent Selling Agent
shall be deemed to hold such monies in trust and shall promptly remit
such monies to the Series or the Trust that paid such amounts for
distribution by the Series or the Trust in accordance with the terms
hereof; and
(e) The foregoing Consent 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.
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Correspondent Selling Agent Agreement
Section 10. Status of Parties. In marketing Units pursuant to this
Agreement for the Trust, the Selling Agent and the Correspondent Selling Agent
are acting solely as agents for the Trust, and not as principals. The
Correspondent Selling Agent will use its best efforts to assist the Trust in
obtaining performance by each purchaser solicited by the Correspondent Selling
Agent whose offer to purchase Units from the Trust has been accepted on behalf
of the Trust, but neither the Selling Agent nor the Correspondent Selling
Agent shall have any liability to the Trust in the event that Subscription
Agreements and Powers of Attorney are improperly completed or any such
purchase is not consummated for any reason. Except as specifically provided
herein, neither the Selling Agent nor the Correspondent Selling Agent shall in
any respect be deemed to be an agent of the Trust.
Section 11. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of any party hereto submitted pursuant
hereto shall remain operative and in full force and effect, regardless of any
investigation made by, or on behalf of, the Selling Agent, the Correspondent
Selling Agent, the Managing Owner, the Trust, or any person who controls any
of the foregoing, and shall survive the Closing Times.
Section 12. Termination. The Selling Agent and the Correspondent
Selling Agent shall each have the right to terminate this Agreement at any
time after the end of the Initial Offering Period upon fifteen (15) days'
prior written notice of such termination to the Managing Owner. The Managing
Owner and the Trust may terminate this Agreement at any time upon fifteen (15)
days' prior written notice to the Selling Agent.
Section 13. Survival. Irrespective of the expiration and termination
of this Agreement, Sections 2, 5 and 8 hereof shall survive and all applicable
provisions of this Agreement with respect to outstanding Units.
Section 14. Notices and Authority to Act. All communications
hereunder shall be in writing and, if sent to the Managing Owner or the Trust,
shall be mailed, delivered or telecopied and confirmed to the Managing Owner
at: Preferred Investment Solutions Corp., Xxx Xxxxxxxx Xxxx, X.X. Xxx 0000,
Xxxxxxxxx, Xxxxxxxxxxx 00000-0000, Attn: General Counsel; and Xx. Xxxxxxx
Xxxxxxxxxxxxx, Xxxxxx Xxxxxx Xxxxx & Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. If sent to the Correspondent Selling Agent, shall be mailed,
delivered or telecopied and confirmed to it at ________________, Attention:
___________________, with copies to _______________, Attention:
__________________. Notices shall be effective when actually received.
Section 15. Parties. This Agreement shall inure to the benefit of
and be binding upon the Correspondent Selling Agent, the Trust, the Managing
Owner and such parties' respective successors to the extent provided herein.
This Agreement and the conditions and provisions hereof are intended to be and
are for the sole and exclusive benefit of the parties hereto and their
respective successors, assigns and controlling persons and parties indemnified
hereunder, and for the benefit of no other person, firm or corporation. No
purchaser of a Unit shall be considered to be a successor or an assignee
solely on the basis of such purchase.
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Correspondent Selling Agent Agreement
Section 16. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
Section 17. Consent to Jurisdiction. The parties hereto agree that
any action or proceeding arising directly, indirectly, or otherwise in
connection with, out of, related to, or from this Agreement, any breach
hereof, or any transaction covered hereby, shall be resolved, whether by
arbitration or otherwise, within the County of New York, and State of New
York. Accordingly, the parties hereto consent and submit to the jurisdiction
of the federal and state courts and applicable arbitral body located within
the County of New York, and State of New York. The parties further agree that
any such action or proceeding brought by any party to enforce any right,
assert any claim, or obtain any relief whatsoever in connection with this
Agreement shall be brought by such party exclusively in the federal or state
courts, or if appropriate, before any applicable arbitral body, located within
the County of New York, and State of New York.
The Managing Owner and the Trust each agree that, at the request of
the Selling Agent, they will submit any action or proceeding referred to in
this Section 15 to NFA arbitration in the County of New York and State of New
York, and agree to execute and deliver to the Selling Agent its standard form
of arbitration agreement, as required by NFA regulations.
Section 18. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and both of which together
shall be deemed one and the same instrument.
Section 19. Series Disclaimer and Acknowledgment. The parties hereto
acknowledge and agree that the Trust is organized in series pursuant to
Sections 3804(a) and 3806(b)(2) of the Delaware 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 of the Trust. There may be several series of the Trust created
pursuant to the Declaration of Trust and Trust Agreement of the Trust.
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Correspondent Selling Agent Agreement
If the foregoing is in accordance with each party's understanding of
their agreement, each party is requested to sign and return to the Managing
Owner and the Trust a counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement among them in accordance with
its terms.
Very truly yours,
WORLD MONITOR TRUST III
By: PREFERRED INVESTMENT SOLUTIONS CORP.,
its sole Managing Owner
By:_______________________________
Name:
Title:
PREFERRED INVESTMENT SOLUTIONS CORP.
By:________________________________
Name:
Title:
KENMAR SECURITIES INC.
By:_________________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
[CORRESPONDENT SELLING AGENT]
By:
-------------------------------------
Name:
-------------------------------
Title:
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