EXHIBIT 1.01
SELLING AGENT AGREEMENT
November 29,2001
Atrium Securities, Inc.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000X
Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
The Price Fund I, L.P., a Delaware limited partnership (the
"Partnership"), whose sole general partner is Price Asset Management, Inc. (the
"General Partner"), hereby confirms its agreement with Atrium Securities, Inc.
("Atrium Securities," "Agent" or "you"), as follows:
Introductory
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The Partnership is offering (the "Offering") for sale up to 50,000 of
its newly issued units of limited partnership (the "Units"). It is acknowledged
that the General Partner may, in its sole discretion, regardless of any
priorities or preferences, accept or reject subscriptions in whole or in part in
the Offering and terminate the Offering at any time. Once made, subscriptions
are irrevocable provided that a subscriber may revoke his subscription within 10
business days prior to the applicable Closing (defined below), whichever comes
first, by the subscriber delivering written notice to the General Partner.
The term "Initial Offering Period" is the period commencing on the date
of the Prospectus and ending on December 31, 2002 (unless extended by the
General Partner upon amendment of the Registration Statement (defined below)) or
such earlier date as the General Partner has accepted subscriptions for at least
1,000 Units. During the Initial Offering Period, Agent will offer Units for sale
at an "Initial Closing" at a price equal to $1,000 per Unit, which Initial
Closing will not take place unless the General Partner has accepted
subscriptions for at least 1,000 Units. If the minimum number of Units is not
sold during the Initial Offering Period, the Offering will terminate and all
subscription amounts (together with any interest earned thereon) will be
refunded to subscribers, as described in the Prospectus.
Units which remain unsold following the Initial Closing will be offered
for sale in a continuing offering (the "Continuing Offering") at monthly
closings ("Monthly Closings;" the Initial Closing or any Monthly Closing, a
"Closing") to be held on the last day of each month at a price per Unit equal to
100% of the Net Asset Value, as defined in the Partnership's agreement of
limited partnership (the "Limited Partnership Agreement"), as of the close of
business on the date of
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such Monthly Closing.
The minimum initial subscription for an investor is $5,000 ($2,000 for
IRAs or qualified retirement plans). Once an investor has been admitted to the
Fund, there is no minimum for additional subscriptions, except that they must be
in multiples of $1,000.
The Partnership has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form S-1 (File No. 333-74176)
containing a prospectus relating to the Offering for the registration of the
Units under the Securities Act of 1933, as amended (the "1933 Act"). The
Registration Statement, as amended and as declared effective by the Commission,
is hereinafter referred to as the "Registration Statement." The prospectus on
file with the Commission at the time the Registration Statement initially
becomes effective is hereinafter called the "Prospectus," except that if the
Partnership files a Prospectus pursuant to Rule 424 of the rules and regulations
of the Commission under the 1933 Act (the "1933 Act Regulations") which differs
from the Prospectus on file at the time the Registration Statement initially
becomes effective, or if the Partnership files an amendment to the Registration
Statement subsequent to the time it initially becomes effective and such
amendment contains a Prospectus which differs from the Prospectus on file at the
time the Registration Statement initially becomes effective, the term
"Prospectus" refers to the Prospectus filed pursuant to Rule 424 or contained in
such amendment to the Registration Statement from and after the time said
Prospectus is filed with or transmitted to the Commission for filing.
Any terms not expressly defined herein have the same definition and
meaning as is set forth in the Prospectus.
SECTION 1. Appointment of Agent
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Subject to the terms and conditions herein set forth, the Partnership
hereby appoints Atrium Securities as its exclusive marketing agent to consult
with and advise the Partnership, and, on a "best efforts" basis, to assist the
Partnership with the solicitations of subscriptions for Units in connection with
the Partnership's offering of the Units in the Offering. Agent will offer and
sell Units in compliance with the requirements set forth in the Registration
Statement, the Prospectus, the Subscription Agreement and this Agreement.
On the basis of the representations, warranties and agreements herein
contained, and subject to the terms and conditions herein set forth, Atrium
Securities accepts such appointment and agrees to consult with and advise the
Partnership as to matters relating to the Offering and agrees to use its best
efforts to solicit subscriptions for Units in accordance with this Agreement;
provided, however, that the Agent will not be responsible for obtaining
subscriptions for
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any specific number of Units, will not be required to purchase any Units and
will not be obligated to take any action which is inconsistent with all
applicable laws, regulations, decisions or orders or decrees, directives,
agreements or memoranda of or with any court, regulatory body, administrative
agency, or other government body. Units will be offered by means of Subscription
Agreements and Subscription Agreement for Existing Investors or Subscribers,
substantially in the respective forms set forth as Exhibit C and D to the
Prospectus (each a "Subscription Agreement").
The parties agree that Units may be sold by the Agent or by other
broker-dealers appointed by the Agent (each an "Additional Selling Agent"),
provided that each such other broker-dealer executes a Selected Additional
Selling Agent Agreement in the form attached hereto as Exhibit A. The Selling
Agent and each Additional Selling Agent will notify the Partnership of the
identity of the registered representative of the Agent or Additional Selling
Agent, as the case may be, credited with the sale of each Unit (such registered
representative being referred to as the "Responsible Broker" and such Unit being
referred to as a "Credited Unit").
The Selling Agent and each Additional Selling Agent will agree
diligently to make inquiries of each prospective purchaser of Units concerning
the suitability of such an investment for such person and to retain in its
records and make available to the Partnership for a period of a least six years,
information establishing that an investment in Units is suitable for each
purchaser of Units solicited by them.
SECTION 2. Compensation of the Selling Agent, Additional Selling Agents and
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Responsible Brokers.
--------------------
As compensation for the Agent's services under this Agreement or an
Additional Selling Agent's services under an Additional Selling Agent Agreement,
the Partnership will pay to the Agent or such Additional Selling Agent, as the
case may be, a sales commission equal to 4% of the purchase price of each Unit
sold by the Agent or such Additional Selling Agent. Such compensation will be
paid promptly following the applicable Closing for such Unit.
As additional compensation to each Responsible Broker, the Partnership
will pay the Responsible Broker a trailing commission with respect to each
Credited Unit equal to 1.50% of the Net Asset Value of a Unit (the "Trailing
Commission"). The Trailing Commission will be based on the Net Asset Value of a
Unit as of the last day of each year, commencing December 31, 2002; provided
that:
(a) no Trailing Commission will be paid with respect to any Credited
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Unit that has been outstanding for less than one full year;
(b) if a Credited Unit is redeemed during a subsequent year, the
Trailing Commission with respect to such Credited Unit will be prorated based on
the portion of the year during which such Credited Unit was outstanding; and
(c) to be eligible to receive the Trailing Commission, the Responsible
Broker must, at the date of payment, be a registered representative of a
broker-dealer that is registered with the Commission and is a member of the
National Association of Securities Dealers, Inc. (the "NASD") or be an
associated person of a futures commission merchant registered with the Commodity
Futures Trading Commission (the "CFTC") (such requirements being referred to as
the "Eligibility Requirements").
The Trailing Commission, if any, payable to a Responsible Broker will
be paid within 45 days following the close of each year.
Once you or an Additional Selling Agent sell Units to a particular
investor, you or such Additional Selling Agent will be entitled to a sales
commission on any Units subsequently purchased by that investor, and such units
will be deemed Credited Units of the Responsible Broker, for which he will be
entitled to a Trailing Commission so long as he satisfies the Eligibility
Requirements.
The appointment of the Agent hereunder will terminate upon completion
or termination of the Offering.
SECTION 3. Closing Dates, Release of Funds
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(a) The Initial Closing, if any, for the acceptance of subscriptions
for Units of Currency is currently scheduled to be held on or before December
31, 2002. Monthly Closings in the Continuing Offering for Units will be held as
of the last day of each month.
(b) Subject to its right to reject any subscription in its sole
discretion in whole or in part at any time prior to acceptance, the General
Partner, on behalf of the Partnership, will accept subscriptions for Units
properly made and cause proper entry to be made in the Unit register to be
maintained by the General Partner. No certificate evidencing Units will be
issued to any subscriber; rather, Agent will deliver confirmations in its
customary form to subscribers whose subscriptions have been accepted by the
General Partner at each Closing.
(c) At each Closing, the delivery, receipt, and acceptance of
subscriptions for Units will be subject to the terms and conditions set forth in
this Agreement, including payment of the full subscription price for Units and
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delivery of a properly completed Subscription Agreement by each subscriber.
(d) Upon the satisfaction of such terms and conditions, the aggregate
subscription price for Units will be paid and delivered to the Partnership at
each Closing.
SECTION 4. Representations and Warranties
------------------------------
The Partnership and General Partner represent and warrant to the Agent as
follows:
(a) The Registration Statement was filed with the Commission on November
29, 2001. Copies of each of the Registration Statement have also been filed with
(i) the CFTC under the Commodity Exchange Act (the "CEA") and the rules and
regulations promulgated thereunder by the CFTC (the "CFTC Rules"); (ii) NASD
Regulation, Inc. ("NASD-R") pursuant to its Conduct Rules; and (iii) the
National Futures Association (the "NFA") in accordance with NFA Compliance Rule
2-13. At the time the Registration Statement becomes effective and at all times
thereafter, including the Initial Closing and each Monthly Closing, the
Registration Statement shall comply in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the CEA, the CFTC Rules,
and the rules of NASD-R and NFA. The Registration Statement and the Prospectus
contain all statements and information required to be included therein by the
CEA and the CFTC Rules. The Registration Statement, the Prospectus, and any
Sales Information (as such terms are defined previously herein or in Section 7
hereof) authorized by the Partnership for use in connection with the Offering
does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and, if applicable, at such later time as any Prospectus was filed
with or mailed to the Commission for filing, the Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading, provided, however, that the representations
and warranties in this Section 4(a) will not apply to statements in or omissions
from such Registration Statement, Prospectus or any Sales Information made in
reliance upon and in conformity with information furnished to the Partnership by
the Agent expressly regarding the Agent for use in the Prospectus or Sales
Information, which information includes the disclosure included in the
Prospectus in the first two paragraphs under the caption "PLAN OF DISTRIBUTION -
General." The Sales Information will comply with the 1933 Act, the 1973 Act
Regulations, the CEA, the CFTC Rules and the Rules of NASD-R and the NFA.
(b) The Limited Partnership Agreement provides for the subscription
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for and sale of the Units; all action required to be taken by the General
Partner and the Partnership as a condition to the sale of the Units to qualified
subscribers therefor has been, or prior to each Closing will have been, taken;
and, upon payment of the consideration therefor specified in each accepted
Subscription Agreement, the Units will constitute valid limited partnership
interests in the Partnership for which Units were subscribed.
(c) The Partnership has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the State of Delaware
with full power and authority to conduct its business as described in the
Prospectus, and has been duly qualified to do business as a foreign limited
partnership under the laws of, and is in good standing as such in, every
jurisdiction where the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the condition, financial or otherwise, or the business, operations or income
of the Partnership (a "Material Adverse Effect").
(d) The General Partner is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Illinois, and is qualified
to do business and is in good standing as a foreign corporation under the laws
of each other jurisdiction in which the nature or conduct of its business
requires such qualification and where the failure to be so qualified could
materially adversely affect the General Partner's ability to perform its
obligations hereunder or under the Limited Partnership Agreement or as described
in the Prospectus.
(e) Each of the Partnership and the General Partner has full partnership
and corporate power and authority, as applicable, under applicable law to
conduct its business and perform its respective obligations, as applicable,
under this Agreement and all other agreements referred to in the Prospectus or
the Registration Statement to which the Partnership or the General Partner is a
party.
(f) The General Partner will have a net worth at each Closing sufficient in
amount and satisfactory in form to meet the net worth requirements set forth in
the Limited Partnership Agreement.
(g) The Partnership does not own, directly or indirectly, other than in the
ordinary course of its business, equity securities or any equity interest in any
business enterprises.
(h) Xxxxxxxxxx Melvoin & Xxxxxxx, the firm which have issued its reports on
certain financial statements included in the Registration Statement and the
Prospectus, are independent certified public accountants within the meaning of
the Code of Professional Conduct of the American Institute of
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Certified Public Accountants and are independent accountants as required by the
1933 Act and the 1933 Act Regulations.
(i) This Agreement, and all other agreements referred to in the Prospectus
or the Registration Statement to which the Partnership or the General Partner is
a party have each been duly and validly authorized, executed and delivered by
the General Partner on behalf of the Partnership and the General Partner, as
applicable, and each constitutes a valid and binding agreement of the
Partnership and the General Partner, as applicable, enforceable against the
Partnership and the General Partner, as applicable, in accordance with its terms
except to the extent limited by bankruptcy, reorganization, insolvency,
moratorium and other laws of general application relating to or affecting the
enforcement of creditors' rights and by general equitable principles and except
as rights to indemnity hereunder may be limited by applicable securities laws.
The Partnership has full power and lawful authority to issue and sell the Units
to be sold by it hereunder on the terms and conditions set forth herein, all
necessary corporate proceedings therefor have been duly and validly taken, and
no consent, approval, authorization or other order of any governmental authority
is required in connection with such authorization, execution and delivery or
with the authorization, issue and sale of the Units, except such as may be
required under the 1933 Act or state securities laws.
(j) The Units have been duly and validly authorized and, when issued and
delivered pursuant to this Agreement, will be duly and validly issued, fully
paid and nonassessable. The Units are not subject to preemptive rights of any
security holder of the Partnership.
(k) The consummation of the transactions herein contemplated and the
fulfillment of the terms of this Agreement, and all other agreements referred to
in the Prospectus or the Registration Statement to which the Partnership or the
General Partner is a party, to be performed by the Partnership and the General
Partner, as applicable, will not conflict in any material respect with or result
in a material breach of any of the terms or provisions of, or constitute a
material default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of the Partnership or
the General Partner pursuant to the terms of any indenture, mortgage, deed of
trust, agreement for money borrowed or any other material agreement or
instrument to which the Partnership or the General Partner is a party, or by
which the Partnership or the General Partner may be bound, or to which any of
the property or assets of the Partnership or the General Partner are subject,
nor will such action result in any violation of the provisions of the charter or
the bylaws, certificate of limited partnership or partnership agreement, as
applicable, of the Partnership or the General Partner, or any statute or any
order, rule or regulation applicable to the Partnership or the General Partner
of any court or any regulatory authority or other governmental body having
jurisdiction over the
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Partnership or the General Partner, assuming satisfaction by the Agent of the
terms of this Agreement and full compliance by the Agent and any other
broker-dealers and their associated persons with all applicable statutes,
orders, rules, or regulations in connection with the Offering.
(l) The financial statements of the Partnership and the General Partner,
together with the related notes thereto, set forth in the Registration Statement
and the Prospectus, fairly present the financial position and results of
operations of the Partnership and the General Partner on the basis stated in the
Registration Statement, at the respective dates and for the respective periods
to which they apply. Such statements and related notes are accurate, complete
and correct, comply as to form in all material respects with all applicable
accounting requirements, including the 1933 Act Regulations, have been prepared
in accordance with generally accepted accounting principles ("GAAP"), which were
consistently applied throughout the periods involved, except as otherwise
disclosed therein. Since the date of the statements of financial condition
included in the Registration Statement, except as contemplated in the
Prospectus, no events have occurred that have had a Material Adverse Effect. The
summaries of such financial statements and other financial, statistical and pro
forma information and related notes set forth in the Registration Statement and
the Prospectus are (i) accurate and correct and fairly present the information
purported to be shown thereby at the dates and for the periods indicated on a
basis consistent with the audited financial statements of the Partnership and
the General Partner and (ii) in compliance in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(m) Except as disclosed in the Registration Statement and Prospectus, there
is not now pending or, to the knowledge of the General Partner, threatened, any
action, suit or proceeding, before or by any court, governmental agency or body
or self-regulatory organization to which the General Partner, any "principals"
of the General Partner, as defined in CFTC Rule 4.10(e) ("General Partner
Principals") or the Partnership is a party, which might result in a Material
Adverse Effect, nor is the General Partner aware of any facts which would form
the basis for the assertion of any material claim or liability that are not
disclosed in the Registration Statement and Prospectus, and neither the General
Partner nor any General Partner Principal has received any notice of an
investigation by the Commission, the CFTC, NASD-R or the NFA regarding
noncompliance by the General Partner, the General Partner Principals or the
Partnership with the 1933 Act, the 1933 Act Regulations, the Securities Exchange
Act of 1934, as amended (the "1934 Act"), any other federal securities laws,
rules or regulations, the CEA, the CFTC Rules, or the rules of NASD-R or the
NFA, which action, suit, proceeding, or investigation resulted or might
reasonably be expected to result in any material adverse change in the
condition, financial or otherwise, business or prospects of the General Partner
or of the Partnership, or which could be material to an investor's decision to
invest in any of the
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Partnership.
(n) The General Partner and each "principal" of the General Partner,
as defined in CFTC Rule 3.1(a), have all federal, state, and foreign
governmental, regulatory, self-regulatory, and exchange approvals, licenses,
registrations, and memberships, and have effected all filings with federal,
state, and foreign governmental regulators, self-regulatory organizations, and
exchanges required to conduct their business and to act as described in the
Registration Statement and the Prospectus, or required to perform their
obligations under this Agreement and all other agreements referred to in the
Prospectus or the Registration Statement to which the Partnership or the General
Partner is a party. The General Partner is registered as a commodity pool
operator under the CEA and is a member in good standing of the NFA. The General
Partner's principals identified in the Prospectus are all of the General Partner
Principals.
(o) To the extent required under CFTC Rules and applicable CFTC staff
no-action letters, the actual performance of all pools "operated" within the
meaning of the CEA by the General Partner and of the General Partner Principals
is disclosed in the Prospectus.
(p) The Partnership and the General Partner have filed all necessary
federal, state, local and foreign income and franchise tax returns and have
paid, or are contesting in good faith, all taxes shown as due thereon; and the
General Partner has no knowledge of any tax deficiency which has been or might
be asserted against the Partnership or the General Partner, which would result
in a Material Adverse Effect.
(q) All contracts and other documents of the Partnership or the
General Partner which are, under the 1933 Act Regulations, required to be filed
as exhibits to the Registration Statement have been so filed.
(r) The conduct of the businesses of the Partnership and the General
Partner is in compliance in all respects with applicable federal, state, local
and foreign laws and regulations, except where the failure to be in compliance
would not have a Material Adverse Effect. The Partnership and the General
Partner are in possession of all necessary licenses, permits, consents,
certificates, orders, and other governmental authorizations currently required
for the conduct of their respective businesses, except where failure to obtain
such licenses, permits, consents, certificates, orders or other governmental
authorizations would not have a Material Adverse Effect, and all such licenses,
permits, consents, certificates, orders and other governmental authorizations
are in full force and effect and neither the Partnership or the General Partner
has received any notice of proceedings related to the revocation or modification
thereof, and the Partnership and the General Partner are in all material
respects complying therewith; the expiration of any such licenses, permits,
consents, certificates,
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orders and other governmental authorizations would not materially affect their
operations; and none of the activities or businesses of the Partnership or the
General Partner is in violation of, or causes the Partnership or the General
Partner to violate, any material law, rule, regulation or order of the United
States, any state, county or locality, or any agency or body of the United
States or of any state, county or locality.
(s) Neither the Partnership nor the General Partner is in violation,
breach or default of or under its charter or bylaws, certificate of limited
partnership or limited partnership agreement, as applicable, or any material
bond, debenture, note or other evidence of indebtedness or any material
contract, agency agreement, indenture, mortgage, loan agreement, lease, joint
venture or other material agreement or instrument to which the Partnership or
the General Partner is a party or by which it or any of its properties may be
bound, or is in material violation of any federal, foreign, state or local law,
order, rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, which violation would have a Material
Adverse Effect.
(t) The Partnership and the General Partner will make and keep
accurate books and records reflecting their respective assets and maintain
internal accounting controls which provide reasonable assurance that (i)
transactions are executed with management's authorization; (ii) transactions are
recorded as necessary to permit preparation of the Partnership's consolidated
financial statements and to maintain accountability for the assets of the
Partnership and the General Partner; (iii) access to the assets of the
Partnership and the General Partner is permitted only in accordance with
management's authorization; and (iv) the reported accountability of the assets
of the Partnership and the General Partner is compared with existing assets at
reasonable intervals.
(u) The Partnership knows of no outstanding claims for finder's,
origination or underwriting fees with respect to the sale of the Units except as
contemplated herein.
(v) All material transactions between the Partnership or the General
Partner and the officers, directors, partners or shareholders who beneficially
own more than 5% of any class of the Partnership's voting securities required to
be disclosed under the rules of the Commission, have been accurately disclosed
in the Registration Statement and the Prospectus, and, except as noted therein,
the terms of each such transaction are fair to the Partnership and no less
favorable to the Partnership than the terms that could have been obtained from
unrelated parties.
(w) The Partnership will not take, directly or indirectly, any action
(and does not know of any action taken by its directors, officers, shareholders
or others) designed to or which has constituted or which might reasonably be
expected to cause or result in, under the 1934 Act, stabilization or
manipulation of the price of any security of the Partnership to facilitate, the
sale or resale of the Units.
Any certificate signed by an officer of the General Partner and
delivered to the Agent or its counsel that refers to this Agreement will be
deemed to be a representation and warranty by the General Partner to the Agent
as to the matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
SECTION 5. Covenants of the Partnership
----------------------------
The Partnership and General Partner hereby covenant with the Agent as
follows:
(a) The Partnership will not, at any time before or after the
Registration Statement, including any supplement filed pursuant to Rule 424
under the 1933 Act, is declared effective by the Commission file any amendment
to such Registration Statement without so notifying the Agent and without
providing the Agent a reasonable opportunity to review such amendment.
(b) The Partnership will immediately upon receipt of any information
concerning the events listed below notify the Agent and promptly confirm the
notice in writing:
(i) of the receipt of any comments from the Commission, or any
other governmental entity having authority with respect to the transactions
contemplated by this Agreement;
(ii) any requests by the Commission or any other governmental
entity having authority for any amendment or supplement to the Registration
Statement or for additional information;
(iii) of the issuance by the Commission or any other governmental
entity having authority of any order or other action suspending the Offering or
the use of the Registration Statement or the Prospectus;
(iv) the issuance by the Commission or any state authority having
jurisdiction of any stop order suspending the effectiveness of the Registration
Statement or of the initiation or threat of initiation or threat of any
proceedings for that purpose; or
(v) of the occurrence of any event mentioned in paragraph (g)
below.
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The Partnership will make every reasonable effort to prevent the
issuance by the Commission or any state authority having jurisdiction of any
such order and, if any such order at any time is issued, to obtain the lifting
thereof at the earliest possible time.
(c) The Partnership will give the Agent notice of its intention to
file, and reasonable time to review prior to filing, any amendment or supplement
to the Registration Statement or the Prospectus.
(d) The Partnership has delivered or will deliver to the Agent and to
its counsel two complete conformed copies (including all exhibits) of the
Registration Statement, as originally filed and each amendment thereto.
(e) The Partnership will furnish to the Agent, without charge, from
time to time during the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of such Prospectus (as
amended or supplemented) as the Agent may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder. The Partnership authorizes the
Agent to use the Prospectus (as amended or supplemented, if amended or
supplemented) for any lawful manner in connection with the sale of the Units by
the Agent.
(f) The Partnership will comply in all material respects with the 1933
Act Regulations, the 1934 Act and the rules and regulations of the Commission
promulgated under the 1934 Act (the "1934 Act Regulations"), and all other
applicable laws (including state Blue Sky laws) to be complied with prior to,
at, and subsequent to each Closing. During the periods prior to each Closing and
when the Prospectus is required to be delivered, the Partnership will comply in
all material respects, at its own expense, with all requirements imposed upon it
by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, in each case as from time to time in force, in accordance with the
provisions hereof and the Prospectus.
(g) If, at any time during the period when the Prospectus relating to
the Units is required to be delivered (including the period after the Initial
Closing and prior to each Monthly Closing), any event relating to or affecting
the Partnership occurs, as a result of which it is necessary or appropriate, in
the reasonable good faith opinion of the Agent's counsel, to amend or supplement
the Registration Statement or Prospectus in order to make the Registration
Statement or Prospectus not misleading in light of the circumstances existing at
the time it is delivered to a purchaser, the Partnership will, at its expense,
forthwith prepare, file with the Commission and furnish to the Agent a
reasonable number of copies of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement or Prospectus (in form
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and substance satisfactory to the Agent and its counsel after a reasonable time
for review) which will amend or supplement the Registration Statement or
Prospectus so that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances existing at the
time the Prospectus is delivered to a purchaser, not misleading. For the purpose
of this Agreement, the Partnership will timely furnish to the Agent such
information with respect to itself as the Agent may from time to time reasonably
request.
(h) If required, the Partnership will take all necessary actions, in
cooperation with you, to qualify or register the Units for offering and sale by
the Partnership under the applicable securities or Blue Sky laws of each
jurisdiction as you may reasonably designate, provided, however, that the
Partnership will not be obligated to qualify to do business in any jurisdiction
in which it is not so qualified. In each jurisdiction where any of the Units has
been qualified or registered as above provided, the Partnership will make and
file such statements and reports in each fiscal period as are or may be required
by the laws of such jurisdictions.
(i) During the period which the Units are registered under the 1934 Act
or for the three years from the final Closing, whichever period is greater, the
Partnership will furnish to its unitholders as soon as practicable after the end
of each fiscal year an annual report (including a consolidated statement of
financial condition and consolidated statements of income or operations, changes
in shareholders' equity and cash flows of the Partnership and the General
Partner as at the end of and for such year, certified by independent public
accountants in accordance with Regulation S-X under the 1933 Act).
(j) The Partnership will use the net proceeds from the sale of the
Units in the manner set forth in the Prospectus under the caption "Use of
Proceeds."
(k) Other than as permitted by the 1933 Act, the 1933 Act Regulations
and the laws of any state in which the Units are qualified for sale, the
Partnership will not distribute any Prospectus, offering circular or other
offering material in connection with the offer and sale of Units.
(l) The Partnership will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement (in form complying with the
provisions of Rule 158 of the regulations promulgated under the 0000 Xxx)
covering a twelve-month period beginning not later than the first day of the
Partnership's fiscal quarter next following the effective date (as defined in
such Rule 158) of the Registration Statement.
(m) The Partnership will file, if required, with the Commission such
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reports on Form SR as may be required pursuant to Rule 463 under the 1933 Act.
(n) The Partnership will register the Units under Section 12(g) of the
1934 Act prior to execution of the Public Offering Acknowledgment and will not
deregister the Units for a period of at least three years thereafter, unless
such registration is no longer required.
(o) The Partnership will take such actions and furnish such information
as are reasonably requested by the Agent in order for the Agent to ensure
compliance with the "Interpretation With Respect to Free Riding and Withholding"
of NASD-R.
(p) Prior to each Closing, the Partnership will conduct its business in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders including, without
limitation, all decisions, directives and orders of the NFA, the CFTC and
NASD-R.
(q) The Partnership will not, prior to each Closing, incur any
liability or obligation, direct or contingent, or enter into any material
transactions, other than in the ordinary course of business, except as
contemplated by the Prospectus.
(r) The representations and warranties made in this Agreement will be
true and correct as of the date hereof and as of each Closing.
SECTION 6. Payment of Expenses
-------------------
The Partnership agrees to pay or cause to be paid and reimburse the
party making payment for all expenses incident to the performance of the
obligations of the Partnership under this Agreement, including, without
limitation, thc following: (i) the fees and disbursements of the Partnership's
counsel, accountants and other advisors; (ii) the qualification of the Units
under all applicable securities or Blue Sky laws, including filing fees and the
fees and disbursements of counsel in connection therewith and in connection with
the preparation of a Blue Sky memorandum; (iii) the printing and delivery to the
Agent in such quantities as the Agent reasonably request of copies of the
Registration Statement and the Prospectus, as amended or supplemented and all
other documents in connection with this Agreement; (iv) filing fees incurred in
connection with the review of the Offering by the Commission, CFTC and by
NASD-R.
SECTION 7. Indemnification
---------------
(a) The Partnership agrees to indemnify and hold harmless the Agent and
any Additional Selling Agent, its respective officers, directors, agents,
servants
14
and employees and each person, if any, who controls the Agent within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and
all loss, liability, claim, damage or expense whatsoever (including but not
limited to settlement expenses), joint or several, that any indemnified party
may suffer or to which any indemnified party may become subject under all
applicable federal and state laws or otherwise, and to promptly reimburse any
indemnified party upon written demand for any expenses (including fees and
disbursements of counsel) incurred by such indemnified party in connection with
investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions: (i) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in (a) the Registration
Statement (or any amendment or supplement thereto), the Prospectus (or any
amendment or supplement thereto), (b) any application or other instrument or
document of the Partnership or based upon written information supplied by the
Partnership or their representatives filed in any state or jurisdiction to
register or qualify any or all of the Units under the securities laws thereof
(collectively, the "Blue Sky Application"), or (c) any application or other
document, advertisement, oral statement, or communication ("Sales Information")
prepared, made or executed by or, with its consent, on behalf of the
Partnership, or based upon written or oral information furnished by, or with its
consent, on behalf of the Partnership, in connection with or in contemplation of
the transactions contemplated by this Agreement; (ii) arise out of or are based
upon the omission or alleged omission to state in any of the foregoing documents
or information a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; or (iii) arise from any theory of liability whatsoever
relating to or arising from or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), Blue Sky Application or Sales Information or
other documentation distributed in connection with the Offering; provided,
however, that no indemnification is required under this paragraph (a) to the
extent such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue statements or alleged untrue statements in, or material
omission or alleged material omission from, the Registration Statement (or any
amendment or supplement thereto), Prospectus or Sales Information made in
reliance upon and in conformity with information furnished to the Partnership by
the Agent regarding Atrium Securities expressly for use in the Prospectus, which
information consists of the disclosure included in the Prospectus contained in
the first paragraph under the caption "TERMS OF THE OFFERING - General."
(b) The Agent agrees to indemnify and hold harmless the Partnership,
its directors, officers, agents, servants and employees, and each person, if
any, who controls the Partnership within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act, against any and all loss, liability,
claim, damage or
15
expense whatsoever (including but not limited to settlement expenses), joint or
several, that the Partnership or any of them may suffer or to which the
Partnership or any of them may become subject under all applicable federal and
state laws or otherwise, and to promptly reimburse the Partnership and any such
persons upon written demand for any expenses (including fees and disbursements
of counsel) incurred by the Partnership or any of them in connection with
investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment or supplement thereto) or the Prospectus (or any
amendment or supplement thereto), the Sales Information, or arise out of or are
based upon the omission or alleged omission to state in any of the foregoing
documents a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that your obligations under this Section 7(b)
will exist only if, and only to the extent, that such untrue statement or
alleged untrue statement was made in, or such material fact or alleged material
fact was omitted from the Registration Statement (or any amendment or supplement
thereto) or the Prospectus (or any amendment or supplement thereto) or the Sales
Information in reliance upon and in conformity with information furnished to the
Partnership by the Agent regarding Atrium Securities expressly for use in the
Prospectus, which information consists of the disclosure included in the
Prospectus contained in the first paragraph under the caption "TERMS OF THE
OFFERING - General."
(c) Each indemnified party must give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder. No indemnification will be available to any party who fails to
give notice as provided in this Section 7(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice, but otherwise the omission so
to notify the indemnifying party will not relieve it from any liability that it
may have to an indemnified party under this Section 7. An indemnifying party may
participate at its own expense in the defense of such action. In addition, if it
so elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it and approved by the
indemnified parties that are defendants in such action, and such indemnified
parties will not be liable for any fees and expenses of such counsel for the
indemnified parties incurred thereafter in connection with such action,
proceeding or claim, other than reasonable costs of investigation. In any
action, proceeding or claim, the indemnified party will have the right to retain
its own counsel, but the fees and disbursements of such counsel will be at its
own
16
expense unless (i) the parties to any such action, proceeding or claim include
both the indemnifying party and the indemnified party and (ii) representation of
both parties by the same counsel reasonably would be deemed inappropriate due to
actual or potential conflicting interests between them. In no event will the
indemnifying parties be liable for the fees and expenses of more than one
separate firm of attorneys (other than any special counsel that said firm may
retain) for each indemnified party in connection with any one action, proceeding
or claim or separate but similar or related actions, proceedings or claims in
the same jurisdiction arising out of the same general allegations or
circumstances.
SECTION 8. Contribution
------------
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in Section 7 is due in accordance with
its terms but is for any reason held by a court to be unavailable from the
Partnership or the Agent, the Partnership or the Agent will contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution received by the Partnership or the Agent from persons
other than the other party thereto, who may also be liable for contribution) to
the party entitled to indemnification in such proportion so that the Agent is
responsible for that portion represented by the percentage that the fees paid to
the Agent pursuant to Section 1 of this Agreement (not including expenses) bears
to the gross proceeds received by the Partnership from the sale of the Units in
the Offering and the Partnership will be responsible for the balance. If,
however, the allocation provided above is not permitted by applicable law, then
each indemnifying party will contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Partnership on the one hand
and the Agent on the other in connection with the statements or omissions which
resulted in such losses, claims, damage or liabilities (or actions, proceedings
or claims in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Partnership on the one
hand and the Agent on the other will be deemed to be in the same proportion as
the total gross proceeds from the Offering (before deducting expenses) received
by the Partnership bears to the total fees (not including expenses) received by
the Agent. The relative fault will be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
other omission or alleged omission to state a material fact relates to
information supplied by the Partnership on the one hand or the Agent on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Partnership
and the Agent agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation or by any
other method of
17
allocation which does not take into account the equitable considerations
referred to above in this Section 8. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions, proceedings or claims in respect thereof referred to above in this
Section 8 will be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action, proceeding or claim. It is expressly agreed that the Agent will
not be liable for any loss, liability, claim, damage or expense or be required
to contribute any amount which in the aggregate exceeds the amount paid to the
Agent under the Agreement. It is understood that the above-stated limitation on
the Agent's liability is essential to the Agent and that the Agent would not
have entered into this Agreement if such limitation had not been agreed to by
the parties to this Agreement. No person found guilty of any fraudulent
misrepresentation (within the meaning of Section 11 (f) of the 0000 Xxx) will be
entitled to contribution from any person who was not also found guilty of such
fraudulent misrepresentation. The obligations of the Partnership and the Agent
under this Section 8 and under Section 7 hereof will be in addition to any
liability which the Partnership and the Agent may otherwise have. For purposes
of this Section 8, each of the Agent's officers and directors and each person,
if any, who controls the Agent within the meaning of the 1933 Act and the 1934
Act will have the same rights to contribution as each officer and director of
the Partnership and each person, if any, who controls the Partnership within the
meaning of the 1933 Act and the 1934 Act, and each officer and director of the
Agent or the Partnership, will have the same rights to contribution as the Agent
or the Partnership, respectively. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action, suit, claim or proceeding
against such party in respect of which a claim for contribution may be made
against another party under this Section 8, will notify such party from whom
contribution may be sought. No person will be entitled to contribution hereunder
who fails to give notice as provided in this Section 8 if the party to whom
notice was not given was unaware of the proceeding to which such notice would
have related and was prejudiced by the failure to give such notice, but
otherwise the omission so to notify the party from whom contribution is sought
will not relieve it from any liability that it may have to a party seeking
contribution under this Section 8.
SECTION 9. Termination
-----------
(a) In the event the Partnership elects not to accept any subscriptions for
Units in the Offering, this Agreement will terminate upon refund by the
Partnership to each person who has ordered any of the Units the full amount
which it may have received from such persons and no party to this Agreement will
have any obligation to the other hereunder, except for the Partnership's
obligations under Sections 1, 6, 7 and 8 hereof.
(b) In the event that at least 1,000 Units are not sold by the end of the
18
Initial Offering Period, this Agreement will terminate and any such termination
will be without liability of any party to any other party except as otherwise
provided in Sections 1, 6, 7 and 8 hereof.
SECTION 10. Survival
--------
The respective indemnities, agreements, representations, warranties and
other statements of the Partnership and the Agent, as set forth in this
Agreement, will remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of the Agent
or any of its officers or directors or any person controlling the Agent, or the
Partnership or any officer, director or person controlling the Partnership, and
will survive termination of the Agreement and the receipt or delivery of any
payment for the Units.
SECTION 11. Miscellaneous
-------------
Notices hereunder, except as otherwise provided herein, must be given in
writing or by telegraph, addressed (a) to the Agent at 000 X. Xxxxxxx Xxxx.,
Xxxxx 0000X, Xxxxxxx, Xxxxxxxx 00000 (Attention: Chairman) with a copy and (b)
to the Partnership at c/o Price Asset Management, Inc. (Attention: Chairman),
with a copy (which will not constitute notice) to Xxxxxxxxx & Xxxxx, 000 Xxxx
Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 (Attention: Xxxxxxx X. Xxxxx,
Esq.).
This Agreement is made solely for the benefit of and will be binding upon
the parties hereto and their respective successors and the controlling persons,
directors and officers referred to in Section 7 hereof and no other person will
have any right or obligations hereunder. The term "successor" does not include
any purchaser of any of the Units.
This Agreement will be governed by and construed in accordance with the
laws of the State of Illinois.
This Agreement may be signed in various counterparts which together will
constitute one agreement.
If the foregoing correctly sets forth the arrangement among the Partnership
and the Agent, please indicate acceptance thereof in the space provided below
for that purpose, whereupon this letter and your acceptance will constitute a
binding agreement.
19
Very truly yours,
THE PRICE FUND I, L.P.
By: Price Asset Management, Inc., its
general partner
By: ____________________________________
Xxxxxx Xxxxxx Xxxxx III
Chairman
Accepted as of the date first above written.
ATRIUM SECURITIES, INC.
By: _____________________________
Xxxxxx Xxxxxx Xxxxx III
Chairman
20
