EXHIBIT 1.02
ADDITIONAL SELLER AGREEMENT
___________, 199_
Xxxx Xxxxxx Xxxxxxxx Inc.
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Xxxxxx Xxxxxxx Tangible Asset Fund L.P. (the "Partnership"), a limited
partnership organized under the Delaware Revised Uniform Limited Partnership
Act, proposes to offer and sell, and issue, up to of 5,000,000 units of limited
partnership interest of the Partnership ("Units"), in accordance with the terms
and conditions set forth in the Selling Agreement (as defined below) and in the
registration statement on Form S-1 (File No. 333-_____ effective _______, 1997),
including the exhibits and any amendments thereto, as filed by the Partnership
with the Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act"). Such registration statement, in the form
in which it has become effective under the 1933 Act, is herein referred to as
the "Registration Statement," and the prospectus constituting a part of the
Registration Statement, in the form last filed with the SEC pursuant to Rule 424
under the 1933 Act, together with any supplements thereto, is herein referred to
as the "Prospectus."
Pursuant to the Selling Agreement, dated as of _______, 1997 the "Selling
Agreement"), among you, the Partnership, Demeter Management Corporation, a
Delaware corporation which is the general partner of the Partnership (the
"General Partner"), Xxxxxx Xxxxxxx Commodities Management, Inc., a Delaware
corporation which is the trading advisor to the Partnership (the "Trading
Advisor"), and Xxxxxx Xxxxxxx & Co. Incorporated, a Delaware corporation which
is the commodity broker for the Partnership ("the Commodity
Broker"), you were appointed the selling agent for the Units to use your best
efforts to offer and sell Units and, in that connection, you were authorized
under the Selling Agreement to appoint, with the written approval of the General
Partner, as your agent to make offers and sales of Units, certain securities
brokers or dealers ("Additional Sellers"). All capitalized terms used herein
shall have the meanings ascribed to them in the Selling Agreement unless
otherwise defined herein or unless the context indicates otherwise.
On the basis of the terms, conditions, and agreements contained in this
Agreement, we agree with you as follows:
1. We agree to become an Additional Seller, to use our best efforts to
offer and sell the Units on the terms stated in this Agreement, the Selling
Agreement, the Registration Statement, and the Prospectus, and to comply with
the terms and conditions of this Agreement and the Selling Agreement in making
offers and sales of Units.
2. We represent and warrant to you, as follows:
(a) The Additional Seller is a corporation, partnership, or other entity
duly organized, validly existing, and in good standing under the laws of the
jurisdiction indicated on the signature page hereof, and is qualified to do
business and is in good standing in each 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 Additional Seller's ability
to perform its obligations hereunder. The Additional Seller has full power and
authority under applicable law to conduct its business and perform its
obligations under this Agreement.
(b) The Additional Seller has all U.S. federal and state, and non-U.S.
regulatory and self-regulatory approvals, licenses, registrations, and
memberships, and has
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effected all filings with U.S. federal and state, and non-U.S. governmental
regulators and self-regulatory organizations required to conduct its business
and required to perform its obligations under this Agreement. Specifically, the
Additional Seller is either: (i) a broker or dealer which is (A) registered and
in good standing as such with the SEC under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), (B) registered or licensed and in good standing as
such under the respective securities laws of the 50 states, the District of
Columbia, and Puerto Rico where such registration or licensing is required for
us to consummate offers and sales of Units as contemplated by this Agreement,
and (C) a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"); or (ii) a non-U.S. broker or dealer not eligible for
membership in the NASD, in which case we agree (A) to make no offers or sales of
Units within the United States, its territories or possessions, or areas subject
to its jurisdiction, or to persons who are citizens thereof or residents
therein, (B) that in making offers and sales of Units, we will comply with the
"Free-Riding and Withholding Interpretation" in IM-2110-1 to NASD Conduct Rule
2110, and NASD Conduct Rules 2730 and 2750, as if we were a member of the NASD,
and NASD Conduct Rule 2420 as it applies to a non-member non-U.S. broker or
dealer, and (C) that we will not offer or sell any Units in any non-U.S.
jurisdiction until we effect, at our cost and expense, any and all registration
or qualification filings with regard to the Units, the Partnership or the
General Partner as may be required under the securities or other laws of such
jurisdiction (we will provide you, at our cost and expense, an opinion of
qualified counsel, satisfactory in form and substance to you, confirming that
any such filings have been properly effected, or that no such filings were
required, prior to the time any Subscription and Exchange Agreement and Power of
Attorney is delivered by a resident of any non-U.S. jurisdiction).
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(c) This Agreement has been duly and validly authorized, executed, and
delivered by the Additional Seller and constitutes a valid and binding agreement
of the Additional Seller, enforceable in accordance with its terms.
(d) The execution and delivery of this Agreement, the incurrence of the
obligations set forth herein, and the consummation of the transactions
contemplated herein will not violate, or constitute a breach of, or default
under, the certificate of incorporation or bylaws, partnership certificate or
agreement, or other organizational document of the Additional Seller or any
other agreement or instrument by which it is bound or any order, law, rule, or
regulation applicable to the Additional Seller of any court, governmental body,
administrative agency, panel, or self-regulatory organization having
jurisdiction over the Additional Seller.
3. It is understood and agreed that we shall not, without your prior
written approval, publish, circulate, distribute, or otherwise use any
advertisement or solicitation material relating to the Units, other than the
Prospectus and any other selling literature supplied by you to us expressly for
such purpose ("Selling Literature"). We understand and acknowledge that we are
not authorized by you, the General Partner, or the Partnership to make any
representations in connection with the offering of Units other than those
contained in the Prospectus.
4. We will offer and sell Units only to persons who satisfy the
suitability and/or minimum investment requirements set forth in the Prospectus
and the Subscription and Exchange Agreement and Power of Attorney (and as may be
required by the law of any non-U.S. jurisdiction in which we may offer Units)
and who, to the General Partner's satisfaction, complete a Subscription and
Exchange Agreement and Power of Attorney. We will conduct a
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thorough review of the suitability of each subscriber for Units. We will
forward subscriptions to DWR's New York, New York branch office no later than
noon of the first business day following our receipt of an acceptable
Subscription and Exchange Agreement and Power of Attorney from a subscriber for
Units, and we will arrange for the opening of a customer account with you for
each such subscriber for the purpose of paying for subscriptions, crediting of
interest thereon, redemptions of Units, and receipt of any distributions
thereon. We understand that subsequent to its review of each Subscription and
Exchange Agreement and Power of Attorney, the General Partner will notify us,
and we shall notify each subscriber by the business day following our receipt of
notice from the General Partner, of the General Partner's acceptance of all, a
portion, or none of the subscriber's subscription. We understand that the
General Partner may reject subscriptions, in whole or in part, for any reason,
and we agree that we shall not be entitled to commissions with respect to any
rejected subscriptions. All payments for subscriptions by subscribers shall be
made as provided under the heading "Subscription Procedure" in the Prospectus.
You shall be responsible for the deposit of subscription funds into the Escrow
Account as described under the heading "Plan of Distribution" in the Prospectus.
You shall be responsible for issuance and delivery of interim receipts to
subscribers.
5. We will offer and sell Units in compliance with the requirements set
forth in the Registration Statement, the Prospectus (particularly under the
captions "Summary of the Prospectus -- Investment Requirements," "Plan of
Distribution," "Subscription Procedure," and "Purchases by Employee Benefit
Plans -- ERISA Considerations"), the Subscription and Exchange Agreement and
Power of Attorney, the Selling Agreement, and this Agreement. We will comply
fully at all times with all applicable U.S. federal and state,
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and non-U.S. securities and commodities laws (including, without limitation, the
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), the
Commodity Exchange Act, as amended (the "CEAct"), and the securities laws of the
jurisdictions in which we solicit subscriptions), and all requirements of the
NASD (including NASD Conduct Rule 2810, particularly paragraphs (b)(2) and (3)
thereof), the Board of Governors of the Federal Reserve System, and the
securities and commodities exchanges and other governmental regulators and
self-regulatory organizations having jurisdiction over us or the offer and sale
of Units by us. Specifically, if we are a member of the NASD, (a) we will not
permit the purchase of any Units by a customer account over which we have
discretionary authority without the prior written approval by the customer
owning such account; (b) we confirm that we have reasonable grounds to believe
that all material facts are adequately and accurately disclosed in the
Prospectus, which provides a basis for evaluating the Partnership; (c) we
confirm that in determining the adequacy of disclosed facts pursuant to clause
(b), we have obtained information on material facts relating to: (i) items of
compensation, (ii) tax aspects, (iii) financial stability and experience of the
General Partner, and (iv) the Partnership's conflicts and risk factors; (d) we
will take such measures as are reasonably necessary to assure ourselves that (i)
our registered principals and representatives have informed each subscriber of
all pertinent facts relating to the liquidity and marketability of the Units,
and (ii) in recommending the purchase or redemption of Units, our registered
principals and representatives have reasonable grounds to believe, on the basis
of information obtained from each subscriber concerning his investment
objectives, other investments, financial situation and needs, and any other
information known by such registered principal or representative, that: (A)
such subscriber is or will be in a financial position appropriate to enable him
to realize to
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a significant extent the benefits described in the Prospectus, (B) such
subscriber has a fair market net worth sufficient to sustain the risks inherent
in the purchase of Units, including loss of investment and lack of liquidity,
and (C) the purchase of Units is otherwise suitable for such subscriber; and (e)
it is understood that the General Partner will maintain in its files, located
c/o Xxxx Xxxxxx Xxxxxxxx Inc., Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
each subscriber's Subscription and Exchange Agreement and Power of Attorney for
not less than six years, and we will maintain, at our respective branch offices,
any other documents disclosing the basis upon which the determination of
suitability was reached for each such subscriber.
6. Promptly after each closing, you shall pay to us for each Unit
subscribed, accepted, and paid for through our efforts, a commission of ___% of
the Net Asset Value of each such Unit as of the closing as of which the Unit is
issued. Your determination of the amount payable to us, if any, shall be
conclusive. In addition, if we are legally qualified or permitted to receive
additional compensation, as provided in Section __ of the Selling Agreement, you
agree to pay to us, as additional compensation, an amount equal to _____% of the
Net Asset Value as of the first day of each month of the outstanding Units sold
by us. Such additional compensation shall be in consideration of and is
contingent upon our agreement (which we hereby undertake to perform) to provide
additional services in connection with Units sold by us, including: (i)
inquiring of the General Partner from time to time, at the request of a Limited
Partner, as to the Net Asset Value of a Unit; (ii) inquiring of the General
Partner, at the request of a Limited Partner, as to the futures markets and the
activities of the Partnership; (iii) responding to questions of Limited Partners
from time to time with respect to monthly account statements, annual reports,
financial statements, and
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annual tax information furnished periodically to Limited Partners; (iv)
providing advice to Limited Partners from time to time as to when and whether to
redeem Units; (v) assisting Limited Partners in the redemption of Units; and
(vi) providing such other services as Limited Partners from time to time may
reasonably request. We understand and agree that no portion of such additional
compensation may be paid to our employees unless such employees meet the
qualifications set forth in Section __ of the Selling Agreement. Acceptance of
compensation hereunder shall constitute a representation by us that we have
complied with all of the provisions of this Agreement, and that we shall comply
with the provisions of this Paragraph 6 so long as we shall continue to receive
any additional compensation hereunder as specified in this Paragraph 6. We
shall not be entitled to a commission in any case in which it is determined by
you or the General Partner that the solicitation by us was made in violation of
the securities laws of any jurisdiction. It is understood that any compensation
payable to us hereunder is payable solely from your funds, and neither the
Partnership, the General Partner, the Trading Advisor, the Commodity Broker, any
subscriber, nor any Limited Partner shall be liable or responsible therefor.
7. This Agreement shall terminate upon the termination of the offering
pursuant to the Selling Agreement and may be terminated by either party upon ten
(10) days' prior written notice to the other. Upon termination of this
Agreement, all authorizations, rights and obligations hereunder shall cease,
except (a) the indemnities set forth in Paragraph 9 hereof, (b) the obligations
to settle accounts hereunder, (c) our obligations under Paragraph 8 hereof, and
(d) your agreement to provide additional compensation and our obligations in
connection therewith set forth in Paragraph 6 hereof.
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8. We authorize you to deduct from any compensation that we may receive
under Paragraph 6 all transfer taxes, if any, paid by you for our account with
respect to sales of Units made through our efforts. We agree to pay our
proportionate share of any amount asserted against and discharged by you and the
other Additional Sellers, or any of them, based on the claim that you and the
Additional Sellers constitute an association, unincorporated business, or other
separate entity, including any expense incurred in defending against such claim.
9. (a) We agree to indemnify, hold harmless, and defend you, the General
Partner, the Trading Advisor, the Commodity Broker, and the Partnership and
their affiliates (as defined in Section 14(c) of the Limited Partnership
Agreement) against any loss, claim, damage, liability, cost, and expense, joint
or several (including attorneys' and accountants' fees and expenses reasonably
incurred in investigating or defending any demands, claims, or lawsuits), to
which you or any indemnified party may become subject under the 1933 Act, the
1934 Act, the CEAct, the securities law of any jurisdiction, or otherwise
(including in connection with the settlement of claims approved in advance by us
and in connection with any administrative proceedings), in respect of the offer
or sale of Units, insofar as such loss, claim, damage, liability, cost, or
expense arises out of, or is based upon a breach by us of any representation,
warranty, or agreement in this Agreement, or the failure by us to perform any
covenant made by us herein. The indemnity agreement in this subparagraph (a)
shall be in addition to any liability that we may otherwise have and will
extend, upon the same terms and conditions, to each person, if any, who controls
you, the General Partner, the Trading Advisor, the Commodity Broker, or the
Partnership within the meaning of the 1933 Act.
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(b) Promptly after receipt by an indemnified party under subparagraph (a)
above of notice of the commencement of any action, claim, or proceeding to which
either of such subparagraphs may apply, the indemnified party shall notify the
indemnifying party in writing of the commencement thereof if a claim in respect
thereof is to be made against the indemnifying party under such subparagraph;
but the omission so to notify the indemnifying party shall not relieve the
indemnifying party from any liability which the indemnifying party may have to
the indemnified party otherwise than under such subparagraph, except where such
omission has materially prejudiced the indemnifying party. In case any action,
claim, or proceeding is brought against an indemnified party and the indemnified
party notifies the indemnifying party of the commencement thereof as provided
above, the indemnifying party shall be entitled to participate therein and, to
the extent that the indemnifying party desires, to assume the defense thereof
with counsel selected by the indemnifying party and approved by the indemnified
party, such approval not to be unreasonably withheld. After notice from the
indemnifying party to the indemnified party of the indemnifying party's election
so to assume the defense thereof as provided above, the indemnifying party shall
not be liable to the indemnified party under subparagraph (a) for any legal and
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof, other than reasonable costs of investigation.
(c) Notwithstanding subparagraph (b), if, in any action, claim, or
proceeding as to which indemnification is or may be available under subparagraph
(a) above, an indemnified party reasonably determines that its interests are or
may be adverse, in whole or in part, to the indemnifying party's interests or
that there may be legal defenses available to the indemnified party which are
inconsistent with the defenses available to the indemnifying
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party, the indemnified party may retain its own counsel in connection with such
action, claim, or proceeding, and shall be indemnified by the indemnifying party
for any legal and other expenses reasonably incurred in connection with
investigating or defending such action, claim, or proceeding.
(d) In no event will the indemnifying party be liable for the fees and
expenses of more than one counsel for all indemnified parties in connection with
any one action, claim, or proceeding or in connection with separate but similar
or related actions, claims, or proceedings in the same jurisdiction arising out
of the same general allegations. The indemnifying party will not be liable for
any settlement of any action, claim, or proceeding effected without the
indemnifying party's express written consent, but if any action, claim, or
proceeding is settled with the indemnifying party's express written consent or
if there is a final judgment for the plaintiff in any such action, claim, or
proceeding, the indemnifying party shall indemnify, defend, and hold harmless an
indemnified party as provided in subparagraph (a) above.
10. We agree that under no circumstances shall we engage in any activities
hereunder in any jurisdiction unless (a) the Units have been registered or
qualified for sale under the securities laws thereof, or (b) we may lawfully so
engage in such activities therein.
11. We acknowledge receipt of copies of the Selling Agreement,
Registration Statement, and the Prospectus and confirm that in executing this
Agreement we have relied thereon and upon no other representations whatsoever,
either written or oral. We hereby confirm (a) that we have examined the Selling
Agreement and the Registration Statement, as amended to date, and we are
familiar with the terms of the Units and other terms of the offering, (b) that
the information, if any, relating to us which has been furnished by us
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or on our behalf expressly for use in connection with the Registration
Statement, the Prospectus, and any Selling Literature does not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus and any Selling Literature, in light of the circumstances under which
such statements were made) not misleading, (c) that we are willing to accept the
responsibilities of an Additional Seller under the 1933 Act, and (d) that we are
willing to proceed with the offering of Units in the manner contemplated.
Further, we understand that you may approve of or object to any further
amendments to the Registration Statement, amendments or supplements to the
Prospectus and any Selling Literature, or the filing of one or more additional
registration statements and amendments thereto, without our consent or approval.
With respect to the Selling Agreement, we understand that you may in your
discretion exercise any right of cancellation or termination and consent to such
other changes in the Selling Agreement as you may approve without our consent or
approval. You agree that you will cause a copy of any such amendment to the
Registration Statement, any amendment or supplement to the Prospectus or any
Selling Literature, or any additional registration statement and any amendment
thereto, to be furnished to us and will notify us of any material change in the
Selling Agreement.
12. We agree that you shall be under no liability (except for your own
lack of good faith and for obligations expressly assumed by you hereunder) to us
in respect of any matters connected herewith or action taken by you pursuant
hereto for, or in respect of, the form of or the statements contained in the
Registration Statement, the Prospectus, any Selling Literature, any additional
registration statement, or any amendment or supplement to any of the foregoing
documents; the qualification of the Units for sale under the laws of any
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jurisdiction; or any matter in connection with any of the foregoing; provided,
however, that nothing in this Paragraph 12 shall be deemed to relieve you from
any liability imposed by the 1933 Act.
13. Nothing contained herein shall constitute us as partners with you or
with other Additional Sellers, and the obligations of ourselves and of all other
Additional Sellers are several and not joint.
14. Any notice from you to us at the address set forth below shall be
deemed to have been duly given if mailed, telexed, telegraphed, telecopied, or
telephoned and subsequently confirmed in writing to us.
15. This Agreement shall be construed in accordance with the internal laws
of the State of New York, without regard to principles of conflicts of laws.
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Your acceptance of this Agreement and approval hereof shall be indicated
below, whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
_______________________________________
Print or Type Name of Additional Seller
By:____________________________________
(Signature of Authorized Signatory)
Name:_____________________________
Title:____________________________
Address:
_______________________________________
_______________________________________
Attention:_____________________________
Telephone No.:_________________________
Telex No.:_____________________________
Telecopier No.:________________________
Type of Organization (Corporation,
Partnership or Other Entity):___________
________________________________________
State or Other Jurisdiction Where
Organized:__________________________
Accepted as of ________, 199_:
Xxxx Xxxxxx Xxxxxxxx Inc.
By:_____________________________
(Signature of Authorized Officer)
Name:___________________________
Title:__________________________
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