Exhibit 1.01
SELLING AGREEMENT
JWH GLOBAL TRUST
(A DELAWARE BUSINESS TRUST)
Dated as of March 1, 2002
JWH GLOBAL TRUST
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 Lead Selling Agent...............................6
Section 3. Representations and Warranties of the Futures Broker...................................7
Section 4. Representations and Warranties of JWH..................................................8
Section 5. Offering and Sale of Units............................................................10
Section 6. Covenants of the Managing Owner.......................................................15
Section 7. Covenants of JWH......................................................................16
Section 8. Payment of Expenses and Fees..........................................................17
Section 9. Conditions of Closing.................................................................17
Section 10. Indemnification and Exculpation......................................................18
Section 11. Status of Parties....................................................................21
Section 12. Representations, Warranties and Agreements to Survive Delivery.......................21
Section 13. Notices and Authority to Act.........................................................21
Section 14. Parties..............................................................................22
Section 15. GOVERNING LAW........................................................................22
Section 16. Requirements of Law..................................................................22
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JWH GLOBAL TRUST
(A DELAWARE BUSINESS TRUST)
(SUBSCRIPTION PRICE:
NET ASSET VALUE PER UNIT)
SELLING AGREEMENT
as of March 1, 2002
CIS SECURITIES, INC.
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Your affiliate, CIS Investments, Inc., a Delaware corporation
(referred to herein in its individual corporate capacity and as managing owner
as "CISI" or the "Managing Owner"), and certain initial beneficial owners have
formed a business trust pursuant to the Business Trust Act (12 DEL. C. Section
3801 et seq.) of the State of Delaware (the "Trust Act") under the name
JWH
GLOBAL TRUST (the "Trust"), for the purpose of engaging in speculative trading
of futures contracts on currencies, interest rates, energy, and agricultural
products, metals and stock indices; options on such futures contracts; and spot
and forward contracts on currencies and precious metals. As described in the
Prospectus referred to below, the Trust has entered into a Trading Advisory
Agreement (the "Trading Advisory Agreement") with Xxxx X. Xxxxx & Company, Inc.,
a Florida corporation ("JWH"), pursuant to which the Trust engages in
speculative trading under the direction of JWH pursuant to JWH's Financial and
Metals Portfolio, G-7 Currency Portfolio and The JWH GlobalAnalytics -Registered
Trademark- Family of Programs and, possibly in the future, other programs
selected by the Managing Owner with the Agreement of JWH (the "JWH Trading
Programs"). You (the "Lead Selling Agent") shall replace Cargill Investor
Services, Inc. (the "Futures Broker") as the principal selling agent for the
Trust pursuant to the terms of this Agreement. Other selling agents (the
"Additional Selling Agents") may be selected by the Lead Selling Agent
(including those introduced by wholesalers ("Wholesalers")), with the consent of
the Managing Owner, in accordance with the terms of this Agreement. Forms of the
Additional Selling Agent Agreement and, in the case of Wholesalers introducing
Additional Selling Agents, the Wholesaling Agreement shall be substantially the
same as the forms of such agreements previously used when the Futures Broker
acted as the lead selling agent for the Trust. In addition, the Additional
Selling Agents may also, with the consent of the Lead Selling Agent and Managing
Owner, distribute Units through the use of "introducing broker" correspondents
("Correspondents"). The Correspondent Selling Agent Agreement shall be
substantially similar to the form of such agreement previously used when the
Futures Broker acted as lead selling agent for the Trust.
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In addition, your affiliate, the Futures Broker, has agreed to act as
broker for the Trust pursuant to a customer agreement (the "Customer Agreement")
between the Futures Broker and the Trust and as principal with respect to
certain "exchange of futures for physical" transactions, and CIS Financial
Services, Inc. ("CISFS") has agreed to act as principal with respect to the
Trust's forward and spot currency trades and precious metals transactions
pursuant to a Foreign Exchange Account Agreement and Cash Bullion Account
Agreement (collectively, the "FX Agreement") between CISFS and the Trust.
Capitalized terms used herein, unless otherwise indicated, shall have
the meanings attributed to them in the Prospectus referred to below.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE MANAGING OWNER. Each
of the Managing Owner and the Trust severally as applicable to itself (and in
the case of CISI as applicable to the Trust) represents and warrants to JWH, the
Lead Selling Agent and the Futures Broker, as follows:
(a) The Trust has filed with the Securities and Exchange Commission
(the "SEC") a registration statement on Form S-1 (Registration No.
333-33987), as initially filed with the SEC on August 19, 1997 for the
registration of Units of Beneficial Interests (the "Units") in the Trust
under the Securities Act of 1933, as amended (the "1933 Act"), has filed
two copies thereof with the Commodity Futures Trading Commission (the
"CFTC") under the Commodity Exchange Act (the "Commodity Act") and one copy
with National Futures Association ("NFA") in accordance with NFA Compliance
Rule 2-13. The Registration Statement, as amended by Post-Effective
Amendment No. 5 thereto, became effective with the SEC as of July 3, 2001.
(The Registration Statement, in the form in which it became effective on
July 3, 2001, and the Prospectus included therein as first filed pursuant
to Rule 424(b) of the rules and regulations of the SEC under the 1933 Act
(the "SEC Regulations") are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively.) If the Trust files a
subsequent post-effective amendment to the Registration Statement, then the
term Registration Statement shall, from and after the declaration of the
effectiveness of such post-effective amendment, refer to the Registration
Statement as amended by such post-effective amendment thereto, and the term
Prospectus shall refer to the amended prospectus then on file with the SEC
as part of the Registration Statement, or if a subsequent prospectus is
filed by the Trust pursuant to Rule 424 of the SEC Regulations, the term
Prospectus shall refer to the prospectus most recently filed pursuant to
such Rule from and after the date on which it shall have been first used.
Except as required by law, the Trust will not file any amendment to the
Registration Statement or any amendment or supplement to the Prospectus
which shall be reasonably objected to in writing by JWH or by counsel to
JWH, upon reasonable prior notice.
(b) The Trust will not utilize any promotional brochure or other
marketing materials (collectively, "Promotional Material"), including
"Tombstone Ads" or other communications qualifying under Rule 134 of the
SEC Regulations, which are reasonably objected to by the Lead Selling
Agent. No reference to the Lead
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Selling Agent may be made in the Registration Statement, Prospectus or in
any Promotional Material which has not been approved in writing by the Lead
Selling Agent, which approval the Lead Selling Agent may withhold in its
sole and absolute discretion. The Trust will file all Promotional Material
with the National Association of Securities Dealers, Inc. (the "NASD"), and
will not use any such Promotional Material to which the NASD has not stated
in writing that it has no objections. The Trust will file all Promotional
Material in all state jurisdictions, and will not use any such Promotional
Material in any state which has expressed any objection thereto (except
pursuant to agreed-upon modifications to the Promotional Material).
(c) The Certificate of Trust pursuant to which the Trust has been
formed (the "Certificate of Trust") and the Declaration and Agreement of
Trust of the Trust (the "Declaration and Agreement of 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 sale of the
Units to qualified subscribers therefor has been, or prior to the
Subsequent Closing Times, as defined in Section 5 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 beneficial interests in the Trust.
(d) The Trust is a business trust duly organized pursuant to the
Certificate of Trust, the Declaration and Agreement of Trust and the Trust
Act and validly existing under the laws of the State of Delaware with full
power and authority to engage in the trading of futures, options on
futures, and spot/forward contracts, as described in the Prospectus; the
Trust has filed a certificate of assumed name in the State of
Illinois as
provided by 805 I.L.C.S. 405/1.
(e) CISI is duly organized and validly existing and in good standing
as a corporation under the laws of the State of Delaware and in good
standing as a foreign corporation under the laws of the State of
Illinois,
and in each other jurisdiction in which the nature or conduct of its
businesses requires such qualification and the failure to so qualify would
materially adversely affect the Trust's or the Managing Owner's ability to
perform their obligations hereunder.
(f) The Trust and the Managing Owner have proper power and authority
under applicable law to perform their respective obligations under the
Declaration and Agreement of Trust, the Escrow Agreement relating to the
offering of the Units (the "Escrow Agreement"), the Customer Agreement, the
FX Agreement, the Trading Advisory Agreement and this Agreement, as
described in the Registration Statement and Prospectus.
(g) The Registration Statement and Prospectus contain all statements
and information required to be included therein by the Commodity Act and
the rules and regulations thereunder. When the Registration Statement
became effective under the 1933 Act, the Registration Statement and
Prospectus complied in all
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material respects with the requirements of the 1933 Act, the Commodity Act
and the rules and regulations under such Acts. The Registration Statement
as of its effective date did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus as
of its date of issue did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which such
statements were made, not misleading. This representation and warranty
shall not, however, apply to any statement or omission in the Registration
Statement or Prospectus made in reliance upon and in conformity with
information relating to JWH and furnished or approved in writing by JWH.
(h) KPMG LLP, the accountants who certified the financial statements
filed with the SEC as part of the Registration Statement, are, with respect
to CISI and the Trust, independent public accountants with respect to the
Managing Owner and the Trust as required by the 1933 Act and the SEC
Regulations.
(i) The financial statements filed as part of the Registration
Statement and those included in the Prospectus present fairly the financial
position of the Trust and of the Managing Owner as of the dates indicated;
and said financial statements have been prepared in conformity with
generally accepted accounting principles (as described therein), or, in the
case of unaudited financial statements, in substantial conformity with
generally accepted accounting principles, applied on a basis which is
consistent in all material respects for each balance sheet date presented.
(j) Since the respective dates as of which information is given in 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 Managing Owner or the Trust, whether or not arising in the
ordinary course of business.
(k) The Managing Owner at each Subsequent Closing Time will have a net
worth sufficient in amount and satisfactory in form, as set forth in the
opinion of Sidley Xxxxxx Xxxxx & Xxxx, counsel for CISI, for classification
of the Trust as a partnership for Federal income tax purposes under current
interpretations of the Internal Revenue Code of 1954 and the Internal
Revenue Code of 1986, as amended (collectively, the "Code"), and the
regulations thereunder.
(l) The Trading Advisory Agreement, the Declaration and Agreement of
Trust, the Escrow Agreement and this Agreement have each been duly and
validly authorized, executed and delivered by each Managing Owner signatory
thereto for itself and on behalf of the Trust, and each constitutes a
legal, valid and binding agreement of the Trust and the Managing Owner
signatory thereto enforceable in accordance with its terms. The Customer
Agreement and the FX Agreement have
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each been duly and validly authorized, executed and delivered by CISI on
behalf of the Trust.
(m) The execution and delivery of the Declaration and Agreement of
Trust, the Escrow Agreement, the Customer Agreement, the FX Agreement, the
Trading Advisory Agreement and this Agreement, the incurrence of the
obligations set forth in each of such agreements and the consummation of
the transactions contemplated therein and in the Prospectus will not
constitute a breach of, or default under, any instrument by which either
the Managing Owner or the Trust, as the case may be, 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.
(n) There is not pending, or, to the Managing Owner' 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 is not referred to in the Prospectus and 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 is required to be disclosed in the Prospectus pursuant to
applicable CFTC regulations. The Managing Owner has not received any notice
of an investigation or warning letter from NFA or the CFTC regarding
non-compliance by the Managing Owner with the Commodity Act or the
regulations thereunder.
(o) The Managing Owner has all Federal and state governmental,
regulatory and commodity exchange approvals and licenses, and has effected
all filings and registrations with Federal and state governmental agencies
required to conduct its businesses and to act as described in the
Registration Statement and Prospectus or required to perform its
obligations as described under the Declaration and Agreement of Trust and
this Agreement (including, without limitation, registration as a commodity
pool operator under the Commodity Act and membership in NFA as a commodity
pool operator), and the performance of such obligations will not contravene
or result in a breach of any provision of its certificate of incorporation,
by-laws or any agreement, order, law or regulation binding upon it. 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 listed as such on the
Managing Owner's commodity pool operator Form 7-R registration.
(p) The Trust does not require any Federal or state governmental,
regulatory or commodity exchange approvals or licenses, or need to effect
any filings or registrations with any Federal or state governmental
agencies in order to conduct its businesses and to act as contemplated by
the Registration Statement
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and Prospectus and to issue and sell the Units (other than filings relating
solely to the offering of the Units), and to trade in the commodity
markets.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE LEAD SELLING AGENT.
The Lead Selling Agent represents and Trust, the Managing Owner, JWH and the
Futures Broker, as follows:
(a) The Lead Selling Agent is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware and
in good standing and qualified to do business in the State of
Illinois and
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 adversely affect the Lead Selling Agent's ability to perform its
obligations hereunder. The Lead Selling Agent has full corporate power and
authority to perform its obligations under this Agreement and as will be
described in the Registration Statement and Prospectus.
(b) All references to the Lead Selling Agent and its principals in the
Registration Statement and Prospectus are accurate and complete in all
material respects. As to the Lead Selling Agent and its principals (i) the
Registration Statement (with respect to the information relating to the
Lead Selling Agent furnished to the Managing Owner) 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 (ii) the
Prospectus (as approved in pertinent part by the Lead Selling Agent) at its
date of issue 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.
(c) The Lead Selling Agent has all Federal and state governmental,
regulatory and exchange licenses and approvals, and has effected all
filings and registrations with Federal and state governmental and
regulatory agencies required to conduct its business and to act as
described in the Registration Statement and Prospectus or required to
perform its obligations under the this Agreement (including, without
limitation, membership of the Lead Selling Agent as a dealer in NASD), and
the performance of such obligations will not violate or result in a breach
of any provision of the Lead Selling Agent's certificate of incorporation,
by-laws or any agreement, instrument, order, law or regulation binding upon
the Lead Selling Agent.
(d) This Agreement has been duly authorized, executed and delivered by
the Lead Selling Agent, and this Agreement constitutes a valid, binding and
enforceable agreement of the Lead Selling Agent in accordance with its
terms.
(e) The execution and delivery of this Agreement, the incurrence of
the obligations set forth herein and therein and the consummation of the
transactions
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contemplated herein and therein and in the Prospectus will not constitute a
breach of, or default under, any instrument by which the Lead Selling Agent
is bound or any order, rule or regulation applicable to the Lead Selling
Agent of any court or any governmental body or administrative agency having
jurisdiction over the Lead Selling Agent.
The representations and warranties set forth in Section 2(b) shall not
be made by the Lead Selling Agent until the Managing Owner files Post Effective
Amendment Number 6 to the Trust's Registration Statement Number 333-33937.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE FUTURES BROKER. The
Futures Broker represents and warrants to the Trust, the Managing Owner, JWH and
the Lead Selling Agent, as follows:
(a) The Futures Broker is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware and
in good standing and qualified to do business in the State of
Illinois and
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 adversely affect the Futures Broker's ability to perform its
obligations hereunder or under the Customer Agreement. The Futures Broker
has full corporate power and authority to perform its obligations under the
Customer Agreement and this Agreement and as described in the Registration
Statement and Prospectus.
(b) All references to the Futures Broker and its principals in the
Registration Statement and Prospectus are accurate and complete in all
material respects, and set forth in all material respects the information
required to be disclosed therein under the Commodity Act and the rules and
regulations thereunder. As to the Futures Broker and its principals (i) the
Registration Statement and Prospectus contain all statements and
information required to be included therein under the Commodity Act and the
rules and regulations thereunder, (ii) the Registration Statement (with
respect to the information relating to the Futures Broker furnished to the
Managing Owner) 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 Futures Broker) at its date of issue 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.
(c) The Futures Broker 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 conduct its business and to act as
described in the Registration Statement and Prospectus or required to
perform its obligations under the Customer Agreement, the Trading Advisory
Agreement and this Agreement
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(including, without limitation, registration of the Futures Broker as a
futures commission merchant under the Commodity Act and membership of the
Futures Broker as a futures commission merchant in NFA), and the
performance of such obligations will not violate or result in a breach of
any provision of the Futures Broker's certificate of incorporation, by-laws
or any agreement, instrument, order, law or regulation binding upon the
Futures Broker.
(d) Each of the Customer Agreement and this Agreement has been duly
authorized, executed and delivered by the Futures Broker, and this
Agreement constitutes a valid, binding and enforceable agreement of the
Futures Broker in accordance with its terms.
(e) 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 Futures Broker, whether or not
arising in the ordinary course of business.
(f) In the ordinary course of its business, the Futures Broker is
engaged in civil litigation and subject to administrative proceedings.
Neither the Futures Broker nor any of its principals have been the subject
of any administrative, civil, or criminal actions within the five years
preceding the date hereof that would be material to an investor's decision
to purchase the Units which are not disclosed in the Prospectus.
(g) The execution and delivery of the Customer Agreement and this
Agreement, the incurrence of the obligations set forth herein and therein
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 Futures Broker is bound or any order, rule or
regulation applicable to the Futures Broker of any court or any
governmental body or administrative agency having jurisdiction over the
Futures Broker.
Section 4. REPRESENTATIONS AND WARRANTIES OF JWH. JWH represents and
warrants to the Trust, the Lead Selling Agent, the Managing Owner and the
Futures Broker as follows:
(a) JWH is a corporation duly organized and validly existing and in
good standing under the laws of the State of Florida 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 JWH's ability to perform its
obligations under this Agreement and the Trading Advisory Agreement. JWH
has full corporate power and authority to perform its obligations under
this Agreement, and the Trading Advisory Agreement as described in the
Registration Statement and Prospectus.
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(b) All references to JWH 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 JWH, each of the
principals of JWH, the JWH trading programs, and JWH's trading systems,
strategies and performance, (i) the Registration Statement and Prospectus
contain all statements and information required to be included therein
under the Commodity Act and the rules and regulations thereunder, (ii) the
Registration Statement (with respect to the information relating to JWH
furnished to the Managing Owner) 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 JWH) at its date of issue 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 hereof, the actual performance of each
discretionary account directed by JWH or any principal or affiliate of JWH
for the periods covered by the performance summaries set forth in the
Prospectus is disclosed in accordance with the requirements of the
Commodity Act and the rules and regulations thereunder (or as otherwise
permitted by the Staff of the Division of Trading and Markets of the CFTC).
The information, performance summaries and monthly rates of return relating
to the performance of JWH comply in all material respects with the
disclosure requirements of the rules and regulations of the CFTC under the
Commodity Act. The performance records in the Prospectus (as applicable to
JWH) have been calculated in the manner set forth in the notes thereto.
(c) The Trading Advisory Agreement and this Agreement have each been
duly and validly authorized, executed and delivered on behalf of JWH and
each constitutes a valid, binding and enforceable agreement of JWH in
accordance with its terms.
(d) JWH has all Federal and state governmental, regulatory and
commodity licenses and approvals and has effected all filings and
registrations with Federal and state governmental and regulatory agencies
required to conduct its business and to act as described in the
Registration Statement and Prospectus or required to perform its
obligations under this Agreement and the Trading Advisory Agreement
(including, without limitation, registration of JWH as a commodity trading
advisor under the Commodity Act and membership of JWH as a commodity
trading advisor in NFA), and the performance of such obligations will not
violate or result in a breach of any provision of JWH's Certificate of
Incorporation, by-laws or any agreement, instrument, order, law or
regulation binding on JWH. The principals of JWH are duly listed as such on
JWH's commodity trading advisor Form 7-R registration.
(e) Management by JWH of an account for the Trust in accordance with
the terms hereof and of the Trading Advisory Agreement, and as described in
the
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Prospectus, will not require any registration under, or violate any of the
provisions of, the Investment Advisers Act of 1940.
(f) Neither JWH nor any principal of JWH will use or 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 7(c) of this Agreement.
(g) 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 JWH, whether or not arising in the
ordinary course of business.
(h) The execution and delivery of this Agreement and the Trading
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 JWH is bound or any order, rule or
regulation applicable to JWH of any court or any governmental body or
administrative agency having jurisdiction over JWH.
(i) Except as disclosed in the Registration Statement and Prospectus,
there is not pending, or to the best of JWH's knowledge threatened, any
action, suit or proceeding before or by any court or other governmental
body to which JWH is a party, or to which any of the assets of JWH is
subject, which might reasonably be expected to result in any material
adverse change in the condition, financial or otherwise, business or
prospects of JWH. JWH has not received any notice of an investigation or
warning letter from NFA or the CFTC regarding non-compliance by JWH with
the Commodity Act or the regulations thereunder.
(j) JWH 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.
Section 5. OFFERING AND SALE OF UNITS.
(a) The Lead Selling Agent is hereby appointed the principal selling
agent of the Trust (although as described herein it is contemplated that
certain Additional Selling Agents, including those introduced to the Lead
Selling Agent by Wholesalers, Wholesalers and Correspondents may also
market Units, provided each of such Additional Selling Agents, Wholesalers
and Correspondents is duly registered as a broker-dealer in each
jurisdiction in which such person markets Units) during the term herein
specified for the purpose of finding acceptable subscribers of Units
through a public offering. Units may be
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sold as of the close of business on the last day of each month, as
determined by the Managing Owner (the "Offering Period"; such subsequent
sale dates being hereinafter referred to as "Subsequent Closing Times").
Subject to the performance by the Managing Owner of all its obligations to
be performed hereunder, and to the completeness and accuracy in all
material respects of all the representations and warranties of the Managing
Owner and JWH contained herein, the Lead Selling Agent hereby accepts such
agency and agrees on the terms and conditions herein set forth to use its
best efforts during the Offering Period to find acceptable subscribers for
the Units at Net Asset Value per Unit during the Offering Period, each
subscriber being required to subscribe for at least $5,000 of Units, $2,000
of Units in the case of trustees or custodians of eligible employee benefit
plans and individual retirement accounts and $1,000 of Units in the case of
Unitholders. It is understood that the Lead 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 Offering Period.
The agency of the Lead Selling Agent hereunder shall continue at least
until the close of business on December 31, 2002, as the Lead Selling Agent
and the Managing Owner shall agree upon.
(b) No selling commissions will be paid from the proceeds of sales of
Units. The Lead Selling Agent will compensate its own Registered
Representatives pursuant to the Lead Selling Agent's standard compensation
procedures. The Lead Selling Agent will pay Additional Selling Agents
selling commissions of up to 4% of the Net Asset Value of each Unit sold by
the Registered Representative of each such Additional Selling Agent. In the
case of an Additional Selling Agent introduced by a Wholesaler, the Lead
Selling Agent will pay such Wholesaler a portion of the up to 4% per Unit
selling commissions depending upon the Wholesaler's arrangement with the
Additional Selling Agent. Ongoing compensation, of up to 4% per annum of
the month-end Net Asset Value of the Units attributable to Units sold by a
Registered Representative of the Additional Selling Agent which remain
outstanding for more than twelve months (including the month as of the end
of which such Unit is redeemed) will also be paid to the Registered
Representative who agrees to provide the additional services described
below, who is registered with the CFTC and who has satisfied all applicable
proficiency requirements (including those imposed by the NASD as a
condition of receiving "trailing commissions") by either passing the Series
3 National Commodity Futures Exam or the Series 31 exam or being
"grandfathered" from having to do so. In the case of an Additional Selling
Agent introduced by a Wholesaler who meets the eligibility requirements for
receipt of ongoing compensation, the Lead Selling Agent will pay a portion
of the up to 1/3 of 1% monthly ongoing compensation to the Wholesaler
depending upon the Wholesaler's arrangement with the Additional Selling
Agent.
The ongoing compensation described in the foregoing paragraph shall
only be paid to any otherwise eligible Registered Representatives, provided
that the Additional Selling Agent with which such Registered Representative
is
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associated continues to be registered with the CFTC as a futures commission
merchant or introducing broker and continues to be a member in good
standing of NFA in such capacity, and is contingent upon the provision by a
Registered Representative (duly registered and qualified as to proficiency
with the CFTC and NFA as described above) who sold outstanding Units in his
capacity as a registered representative of the Additional Selling Agent of
additional services in connection with such Units, including: (i) inquiring
of the Managing Owner from time to time, at the request of an owner of such
Units, as to the Net Asset Value of a Unit; (ii) inquiring of the Managing
Owner from time to time, at the request of an owner of such Units,
regarding the commodities markets and the Trust; (iii) assisting, at the
request of the Managing Owner, in the redemption of Units sold by such
Registered Representative; and (iv) providing such other services to the
owners of such Units as the Managing Owner may, from time to time,
reasonably request.
Ongoing compensation shall be credited and paid only in respect of
Units sold by Registered Representatives who are eligible to receive such
ongoing compensation as described above. No ongoing compensation whatsoever
shall be credited, paid or accrued on any Units sold by Registered
Representatives not then eligible to receive such ongoing compensation.
With respect to particular Units substitute Registered Representatives who
are appropriately registered and who agree in writing to perform the
services described in this Section 5(b) above with respect to such Units
("Substitute Registered Representatives") may also receive ongoing
compensation with respect to such Units. Such ongoing compensation shall be
paid monthly.
In the event that the payment of ongoing compensation is restricted by
the NASD, the Lead Selling Agent's payments of such ongoing compensation
shall be limited to the maximum amount permissible pursuant to such
restrictions.
In the case of Units sold by Registered Representatives who are not
qualified to receive ongoing compensation as set forth above, the Lead
Selling Agent will pay such Registered Representatives installment selling
commissions at the same rate as in the case of ongoing compensation, but
the sum of such installment selling commissions and the initial selling
commission payable to each such Registered Representative is limited in
amount, pursuant to applicable NASD policy, to 10.0% of the initial
subscription price of the Units sold by such Registered Representatives and
remaining outstanding.
In respect of Correspondents selected by an Additional Selling Agent
(with the consent of the Managing Owner and the Lead Selling Agent), the
Lead Selling Agent shall pay such Additional Selling Agent selling
commissions and ongoing compensation or installment sales commissions as
set forth above, a portion (as agreed between such Additional Selling Agent
and each such Correspondent) of which shall be passed on by the Additional
Selling Agent to such Correspondents.
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Ongoing compensation which cannot be paid because an Additional
Selling Agent or a Correspondent (or a Registered Representative of either)
has not met the eligibility requirements shall be retained by the Lead
Selling Agent.
Selling Commissions and ongoing compensation payable in respect of
Units sold to any investor eligible to be charged a Special Brokerage Fee
Rate as described in the Registration Statement and Prospectus shall be
reduced by the difference between the standard rate Brokerage Fee and the
applicable Special Brokerage Fee Rate.
(c) The Lead 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 Lead
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 Lead Selling Agent represents that it will comply fully with all
applicable laws, and the rules of the NASD, the SEC, the CFTC, state
securities administrators and any other regulatory body. In particular, and
not by way of limitation, the Lead Selling Agent represents and warrants
that it is aware of Rule 2810 of the NASD (formerly Appendix F of the NASD
Rules of Fair Practice) and that it will comply fully with all the terms
thereof in connection with the offering and sale of the Units. The Lead
Selling Agent shall 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.
The Lead Selling Agent agrees not to recommend the purchase of Units
to any subscriber unless the Lead 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 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 tax benefits described in the Prospectus; the subscriber has a
fair market net worth sufficient to sustain the risks inherent in
participating in the Trust, including loss of investment and lack of
liquidity; and the Units are otherwise a suitable investment for the
subscriber. The Lead Selling Agent agrees to maintain files of information
disclosing the basis upon which the Lead Selling Agent determined that the
suitability requirements of Section (b)(2) of Rule 2810 of the NASD were
met as to each subscriber (the basis for determining suitability may
include the Subscription Agreements and Powers of Attorney and other
certificates submitted by subscribers). The Lead Selling Agent represents
and warrants that it has reasonable grounds to believe, based on
information in the Prospectus and information to which the Lead Selling
Agent has had access due to its affiliation with CISI, that all material
facts relating to an investment in the Units are adequately and accurately
disclosed in the Prospectus. In connection with making the foregoing
representations and warranties, the Lead Selling Agent further represents
and warrants that it has, among other things, examined the following
sections in the Prospectus and obtained such additional
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information from CISI regarding the information set forth thereunder as the
Lead 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:
"Summary"
"The Risks You Face"
"Investment Factors"
"How the Trust Works "
"Xxxx X. Xxxxx & Company, Inc."
"The Managing Owner"
"Charges"
"Redemptions; Net Asset Value"
"Transactions Between CIS Group and the Trust"
"Conflicts of Interest"
"The Trust and the Trustee"
"Tax Consequences"
"Plan of Distribution"
In connection with making the representations and warranties set forth in
this paragraph, the Lead Selling Agent has not relied on inquiries made by
or on behalf of any other parties.
The Lead 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.
(d) None of the Lead Selling Agent, the Trust or the Managing Owner
shall, directly or indirectly, pay or award any finder's fees, commissions
or other compensation to any person engaged by a potential investor for
investment advice as an inducement to such advisor to advise the purchase
of Units; provided, however, the normal sales commissions payable to a
registered broker-dealer or other properly licensed person for selling
Units shall not be prohibited hereby.
(e) As contemplated by Section 8 hereof, CISI will advance the Trust's
organization and offering costs.
(f) All payments for subscriptions shall be made by transfer of funds
to the escrow account of the Trust as described in the Prospectus, provided
that any such arrangements, must comply in all relevant respects with SEC
Regulations 10b-9 and 15c2-4.
(g) Upon the reasonable request of the Lead Selling Agent, CISI agrees
to cause its counsel to prepare and deliver to the Lead Selling Agent a
Blue Sky Survey which shall set forth, for the guidance of the Lead Selling
Agent, in which United States jurisdictions the Units may be offered and
sold. It is understood
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and agreed that the Lead Selling Agent may rely, in connection with the
offering and sale of Units in any jurisdiction, on advice given by such
counsel as to the legality of the offer or sale of the Units in such
jurisdiction, provided, however, that the Lead Selling Agent and each
Wholesaler, Additional Selling Agent and Correspondent shall be responsible
for compliance with all applicable laws, rules and regulations with respect
to the actions of its employees, acting as such, in connection with sales
of Units in any jurisdiction.
Section 6. COVENANTS OF THE MANAGING OWNER.
(a) The Managing Owner will notify the Lead Selling Agent and JWH
immediately and confirm such notification in writing (i) when any amendment
to the Registration Statement shall have become effective, (ii) of the
receipt of any comments from the SEC, CFTC or any other Federal or state
regulatory body with respect to the Registration Statement, (iii) of any
request by the SEC, CFTC or any other Federal or state regulatory body for
any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information relating thereto and (iv)
of the issuance by the SEC, CFTC or any other Federal or state regulatory
body of any order suspending the effectiveness of the Registration
Statement under the 1933 Act, the CFTC 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 of the institution, or notice of the
intended institution, of any action or proceeding for that purpose.
(b) The Managing Owner will deliver to the Lead Selling Agent, as soon
as available, a signed copy of each amendment to the Registration Statement
as originally filed and the exhibits thereto, and will also deliver to the
Lead Selling Agent such number of conformed copies of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) as the Lead Selling Agent shall reasonably require.
(c) The Managing Owner will deliver to the Lead 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) as the Lead Selling
Agent, Wholesalers, Additional Selling Agents and 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 use best
efforts to comply with all requirements imposed upon them by the 1933 Act
and the Commodity Act, each as now and hereafter amended, and by the SEC
Regulations and rules and regulations of the CFTC, as from time to time in
force, so far as necessary to permit the continuance of sales of, or
dealings in, the Units during
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such period in accordance with the provisions hereof and as set forth in
the Prospectus.
(e) If any event relating to or affecting the Managing Owner or the
Trust shall occur as a result of which it is necessary, in the reasonable
opinion of the Managing Owner or the Lead Selling Agent, to amend or
supplement the Prospectus in order to make the Prospectus not materially
misleading in light of the circumstances existing at the time it is
delivered to a subscriber, the Managing Owner and the Trust will forthwith
prepare and furnish to the Lead 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 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
subscriber, not misleading. No such amendment or supplement shall be filed
without the approval of the Lead Selling Agent and JWH and their counsel.
(f) The Managing Owner will use best efforts to qualify the Units for
offer and sale under applicable securities or "Blue Sky" laws and continue
such qualification throughout the Offering Period, provided that in no
event shall the Managing Owner or the Trust be obligated to (i) take any
action which would subject it to service of process in suits other than
those arising out of the offering or sale of the Units, or taxes, in any
jurisdiction where any of them is not now so subject, (ii) change any
material term in the Registration Statement, or (iii) expend a sum of money
considered unreasonable by CISI.
Section 7. COVENANTS OF JWH.
(a) JWH 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, JWH agrees to notify the Managing Owner immediately
upon discovery of any 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 untrue or
misleading statement or an omission in the Prospectus or Registration
Statement regarding it, its operations or any of its principals or result
in the Prospectus not including all information relating to JWH and its
principals required pursuant to CFTC regulations. During such period, JWH
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.
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(c) JWH agrees to assist, and cause its principals or agents to
assist, at its own expense in "road show" presentations relating to the
initial and ongoing offering of the Units at the reasonable request of the
Lead Selling Agent and at the expense of JWH, provided that no such
assistance shall result in any action which any such principal or agent
reasonably believes may require registration of JWH or any such principal
or agent as a broker-dealer or salesman.
Section 8. PAYMENT OF EXPENSES AND FEES. CISI will advance expenses
incident to the performance of the obligations of the Managing Owner and the
Trust hereunder, including: (i) the printing and delivery to the Lead 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 qualification of the Units under the securities
or "Blue Sky" laws in the various jurisdictions, including filing fees and the
fees and disbursements of CISI's counsel incurred in connection therewith; (iv)
the services of counsel and accountants for CISI and the Trust, including
certain services of KPMG LLP in connection with their review of the performance
records in the Prospectus; (v) the printing or reproduction and delivery to the
Lead Selling Agent of such number of copies as it may reasonably request of the
Blue Sky Survey; and (vi) "road show" presentations (not including the expenses
of JWH and their personnel which shall be borne by JWH).
The Managing Owner and the Lead Selling Agent are each aware of the
limitations imposed by Rule 2810 of the NASD on the aggregate compensation which
may be received by the Lead Selling Agent in connection with the offering and
sale of the Units. The Lead Selling Agent will in no event make any payments to
its own Registered Representatives or any Additional Agent as described above,
which, when added to the up to 4% selling commissions which the Lead Selling
Agent may pay with respect to the sales of Units, would exceed 9% of the gross
proceeds of the Units sold to the public. CISI shall not reimburse the Lead
Selling Agent for any due diligence expenses in connection with the offering.
Section 9. CONDITIONS OF CLOSING. The obligations of each of the
parties hereunder are subject to the accuracy of the representations and
warranties of the other parties hereto, to the performance by such other parties
of their respective obligations hereunder and to the following further
conditions:
(a) At each Subsequent Closing Time no order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceeding therefor initiated or threatened by the SEC and
no objection to the content thereof shall have been expressed or threatened
by the CFTC or NFA.
(b) Upon the request of any party hereto, the parties hereto shall
have been furnished with such information, opinions and documents
(including the opinions, certificates and other documents described in
Section 8 of the
Selling Agreement dated as of April 3, 1997 among the
Trust, the Managing Owner, JWH, the Futures Broker (acting in its capacity
as the futures broker and the lead
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selling agent) and CISFS which is superseded by this Agreement), 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
counsel to the parties hereto.
(c) The representations and warranties set forth herein shall be
restated as of each Subsequent Closing Time as if made as of the date
thereof.
Section 10. INDEMNIFICATION AND EXCULPATION.
(a) INDEMNIFICATION BY THE MANAGING OWNER. The Managing Owner agrees
to indemnify and hold harmless the Lead Selling Agent, JWH, any Wholesaler,
Additional Selling Agent and Correspondent and each person, if any, who
controls any of the foregoing within the meaning of Section 15 of the 1933
Act, and the Trust agrees to indemnify and hold harmless JWH and each
person, if any, who controls JWH 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 out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) 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
light of the circumstances under which they were made, not misleading;
and
(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 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
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(iii) against any and all expense whatsoever (including the fees
and disbursements of counsel and, in the case of the Lead Selling
Agent, any indemnification of a Wholesaler, Additional Selling Agent
or Correspondent made pursuant to a Wholesaling Agreement, Additional
Selling Agent Agreement or Correspondent
Selling Agreement, as the
case may be) 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 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.
In no case shall the Managing Owner or the Trust be liable under this
indemnity (a) to JWH if such untrue statement or omission or alleged untrue
statement or omission was made in reliance upon and in conformity with
information relating to JWH and furnished or approved in writing by JWH or
(b) to the Lead Selling Agent if such untrue statement or omission or
alleged untrue statement or omission was made in reliance upon and in
conformity with information relating to the Lead Selling Agent and
furnished or approved by the Lead Selling Agent or (c) to any Wholesaler,
Additional Selling Agent or Correspondent, if such untrue statement or
alleged untrue statement was made in reliance upon and in conformity with
information (including any material omission from such information), if
any, relating to, such Wholesaler, Additional Selling Agent or
Correspondent and furnished or approved by such party.
In no case shall the Managing Owner or the Trust be liable under this
indemnity agreement with respect to any claim made against any indemnified
party unless the Managing Owner or the Trust 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 or the Trust shall not
relieve the Managing Owner or the Trust from any liability which they may
have than on account of this indemnity agreement unless such failure to
notify shall materially prejudice the Managing Owner or the Trust. The
Managing Owner and the Trust shall be entitled to participate at their own
expense in the defense or, if they so elect within a reasonable time after
receipt of such notice, to assume the defense of that portion of any suit
so brought relating to the Managing Owner's or the Trust's indemnification
obligations hereunder, which defense shall be conducted by counsel chosen
by them and satisfactory to the indemnified party or parties, defendant or
defendants therein. In the event that the Managing Owner or the Trust
elects to assume the defense of any such suit and retain such counsel, the
indemnified party or parties, defendant or defendants in the suit, shall,
in the absence of conflicting claims, bear the fees and expenses of any
additional counsel thereafter retained by it or them.
In no event, however, shall the Managing Owner be obligated to indemnify
the Lead Selling Agent hereunder, and the Lead Selling Agent agrees not to
attempt
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to obtain any indemnity from the Managing Owner hereunder, to the extent
that the Managing Owner and the Lead Selling Agent are advised by counsel
reasonably satisfactory to the Managing Owner and the Lead Selling Agent
that payment of such indemnity could adversely affect the classification of
the Trust as a partnership for Federal income tax purposes.
The Managing Owner agrees to notify JWH and the Lead 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 either of the Managing Owner within the meaning of Xxxxxxx 00
xx xxx 0000 Xxx.
(x) INDEMNIFICATION BY JWH. JWH agrees to indemnify and hold harmless
the Lead Selling Agent, the Managing Owner, the Trust and each person, if
any, who controls any of the foregoing 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 10(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 or alleged untrue
statement or omission relating or with respect to JWH or any principal of
JWH, or their 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 JWH for inclusion therein.
(c) INDEMNIFICATION BY THE LEAD SELLING AGENT. The Lead Selling Agent
agrees to indemnify and hold harmless the Trust, the Managing Owner, JWH
and each person, if any, who controls the Trust, the Managing Owner or JWH
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), (i) to the same extent
as the indemnity from the Managing Owner set forth in 10(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 or alleged untrue statement or omission relating or with respect
to the Lead Selling Agent or any of its principals, or their operations,
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 Lead Selling Agent for inclusion therein and (ii) against
any and all loss, liability, claim, damage and expense whatsoever resulting
from a demand, claim, lawsuit, action or proceeding relating to the actions
or capacities of the Lead Selling Agent (including a breach of its
obligations hereunder) and any Wholesaler, Additional Selling Agent or
Correspondent relating to the offering of Units under this Agreement or any
Wholesaling Agreement, Additional Selling Agent Agreement or Correspondent
Selling Agent Agreement as the case may be.
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(d) CONTRIBUTION. If the indemnification provided for in this Section
10 is not permitted under applicable law under subsection (a) or (b) above
in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by JWH, on the one hand, and, the Lead Selling
Agent, CISFS and the Managing Owner, on the other, from the offering of the
Units.
(e) LIMITATION ON CERTAIN INDEMNIFICATIONS AND EXCULPATIONS. The
exculpation provisions in the Trading Advisory Agreement shall not relieve
JWH from any liability it may have or incur to the Trust, the Managing
Owner or the Lead Selling Agent under this Agreement (including, without
limitation, pursuant to the provisions of Section 10(b) hereof). Nor shall
JWH be entitled to be indemnified by the Managing Owner, pursuant to the
indemnification provisions contained in the Trading Advisory Agreement,
against any loss, liability, damage, cost or expense it may incur under
this Agreement. The Managing Owner shall not be entitled to be indemnified
by the Trust, pursuant to the indemnification provisions contained in the
Declaration and Agreement of Trust against any loss, liability, damage,
cost or expense it may incur under this Agreement.
Section 11. STATUS OF PARTIES. In selling the Units for the Trust, the
Lead Selling Agent is acting solely as an agent for the Trust and not as a
principal. The Lead Selling Agent will use its best efforts to assist the Trust
in obtaining performance by each purchaser whose offer to purchase Units from
the Trust has been accepted on behalf of the Trust, but the Lead Selling Agent
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
Lead Selling Agent shall in no respect be deemed to be an agent of the Trust.
Section 12. 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 Lead Selling Agent, the Managing
Owner, the Trust, the Futures Broker, CISFS, JWH or any person who controls any
of the foregoing.
Section 13. NOTICES AND AUTHORITY TO ACT. All communications hereunder
shall be in writing and, if sent to the Lead Selling Agent, CISI, the Futures
Broker, CISFS or the Trust, shall be mailed, delivered or telegraphed and
confirmed to it at Fund Services Group, Sears Tower, 000 Xxxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention Xxxxxxx X. Xxxxxxxx; if sent to
JWH, shall be mailed, delivered or telegraphed and confirmed at 000 Xxxxxx Xxxx,
Xxxxx 0000, Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xx. Xxxxx X. Xxxxx. Notices
shall be effective when actually received.
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Section 14. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Lead Selling Agent, the Trust, the Managing Owner, CISFS,
the Futures Broker, JWH 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
assign solely on the basis of such purchase.
The parties acknowledge that the obligations of this Agreement are not
binding against the Unitholders individually but are binding only upon the
assets and property of the Trust, and in the event of any obligation or claim
arising hereunder against the Trust, no resort shall be had to the personal
property of any Unitholder for the satisfaction of such obligation or claim.
Section 15. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF
ILLINOIS WITHOUT REGARD TO THE PRINCIPLES OF CHOICE OF LAW THEREOF.
Section 16. REQUIREMENTS OF LAW. Whenever in this Agreement it is
stated that a party will take or refrain from taking a particular action, such
party may nevertheless refrain from taking or take such action if advised by
counsel that doing so is required by law or advisable to ensure compliance with
law, and shall not be subject to any liability hereunder for doing so, although
such action shall permit termination of the Agreement by the other parties
hereto.
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If the foregoing is in accordance with each party's understanding of
its agreement, each party is requested to sign and return to CISI as Managing
Owner a counterpart hereof, whereupon this instrument along with all
counterparts will become a binding agreement between us in accordance with its
terms.
Very truly yours,
JWH GLOBAL TRUST
BY: CIS INVESTMENTS INC.,
Managing Owner
By:
-------------------------------
Name:
Title:
CIS SECURITIES, INC.
By:
-------------------------------
Name:
Title:
CIS INVESTMENTS, INC.
By:
-------------------------------
Name:
Title:
XXXX X. XXXXX & COMPANY, INC.
By:
-------------------------------
Name:
Title:
CARGILL INVESTOR SERVICES, INC.
By:
-------------------------------
Name:
Title:
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CIS FINANCIAL SERVICES, INC.
By:
-------------------------------
Name:
Title:
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