Exhibit 1.1
SELLING AGREEMENT
CITIGROUP DIVERSIFIED FUTURES FUND L.P.
300,000 Units of Limited Partnership Interest
AGREEMENT made as of the12th day of February, 2003, by and among CITIGROUP DIVERSIFIED FUTURES FUND L.P., a New York limited partnership (the “Partnership”), SMITH BARNEY FUTURES MANAGEMENT LLC, a Delaware limited liability company (“SBFM”) and SALOMON SMITH BARNEY INC., a New York corporation (“SSB”).
W I T N E S S E T H :
WHEREAS, the Partnership has filed a registration statement on Form S-1 (File No. 333-102038) with the Securities and Exchange Commission (the “SEC”) in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), and as a part thereof a form of preliminary prospectus relating to the offer and sale of up to 300,000 Units of Limited Partnership Interest in the Partnership (the “Units”) (the registration statement in the form in which it becomes effective under the Act being hereinafter referred to as the “Registration Statement” and the prospectus in the form included therein being hereinafter referred to as the “Prospectus”; provided that (i) if the Partnership files a post-effective amendment to such registration statement, then the term “Registration Statement” shall refer to the registration statement as amended by such post-effective amendment, and the term “Prospectus” shall refer to the amended prospectus then on file with the SEC and (ii) if a prospectus filed by the Partnership pursuant to either Rule 424(b) or (c) promulgated under the Act shall differ from the prospectus on file at the time the Registration Statement or any post-effective amendment thereof shall have become effective, the term “Prospectus” shall refer to the prospectus filed pursuant to Rule 424(b) or (c), from and after the date on which it shall have been filed); and
WHEREAS, the Partnership intends to enter into management agreements with each of Drury Capital, Inc., Graham Capital Management, L.P., John W. Henry & Company, Inc. and Willowbridge Associates Inc. (each an “Advisor,” collectively, the “Advisors”) and SBFM, (the “Management Agreements”), pursuant to which commodity trading decisions will be made by the Advisors as described in the Prospectus; and
WHEREAS, SSB has agreed to assist in the offer and sale of the Units upon the terms and in reliance upon the representations, warranties and agreements set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1.Appointment of Selling Agent; Money Laundering Prevention
(a) (i) The Partnership hereby appoints SSB as its exclusive agent to offer and sell the Units on the terms and conditions set forth herein and in the Registration Statement and the Prospectus during the initial offering period (the “Initial Offering Period”), a period of 120 days commencing on the date the Registration Statement is declared effective by the SEC, unless SBFM, the general partner of the Partnership, terminates the offering at an earlier date or extends the Initial Offering Period for up to an additional 30 days by written notice to SSB. As described in the Prospectus, 25,000 Units must be sold during the Initial Offering Period for the Partnership to commence its trading activities; if fewer than 25,000 Units are sold during the Initial Offering Period, proceeds will be promptly returned to subscribers at the termination thereof.
(ii) The Partnership hereby also appoints SSB as its exclusive agent to offer and sell the Units on the terms and conditions set forth herein and in the Registration Statement and the Prospectus during a period commencing on the date of termination of the Initial Offering Period (assuming 25,000 Units are sold) and ending upon the earlier of the date two years from the date the Registration Statement is declared effective and the date on which 300,000 Units are sold (the “Continuous Offering”, and, together with the Initial Offering Period, the “Offering Period”).
(b) SSB hereby accepts appointment as selling agent for the Partnership to effect sales of up to 300,000 Units as provided herein, in the Registration Statement and in the Prospectus. SSB represents and hereby confirms that in selling to subscribers and otherwise carrying out its obligations under this agreement it will comply with Paragraphs (b)(2) and (b)(3) of Rule 2810 of the Conduct Rules of NASD, Inc., as set forth in Schedule I hereto. SSB agrees that SBFM has the right to reject any subscription for Units for any reason and to suspend sales of Units during the Offering Period.
(c) SSB agrees initially to bear all expenses of the Partnership in connection with the Initial Offering Period (estimated at $650,000), including, without limitation, fees and expenses of its counsel, SEC and other filing fees, blue sky fees and expenses, printing expenses, fees and expenses of independent public accountants and escrow fees.
(d) SSB agrees that all funds received by SSB from subscribers shall be promptly delivered to JPMorgan Chase Bank as escrow agent for the benefit of the subscribers by noon of the second business day after receipt. SSB represents and hereby confirms that if it receives checks from customers it will act as processing broker-dealer in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended, and NASD Notices to Members 84-7 and 84-64.
(e) SSB represents and confirms that it is registered with the Commodity Futures Trading Commission (“CFTC”) as a futures commission merchant and is a member of the National Futures Association (“NFA”) in that capacity. Further, any associated person of SSB who receives continuing compensation in the form of a portion of the commodity brokerage fees paid by the Partnership shall be registered with the CFTC as an associated person of a futures commission merchant or an introducing broker and shall be an associate member of the NFA
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(qualified as an associated person by having taken the Series 3 or Series 31 Commodities Exam or having been “grandfathered” as an associated person qualified to do commodity brokerage).
(f) SSB represents and confirms that it is in compliance with applicable anti-money laundering laws (including the USA Patriot Act) and related regulations and agrees that it shall be responsible for compliance with such laws and regulations with respect to purchasers of Units.
2.Agreements of the Partnership. The Partnership agrees with SSB as follows:
(a) The Partnership will advise SSB, promptly after it receives notice thereof, (i) of the time when the Registration Statement has become effective and when any amendment thereto becomes effective, (ii) of the issuance by the SEC of any stop order or of any order preventing or suspending the use of any Prospectus, or the initiation or threat of any proceeding for any such purpose and (iii) of any request by the SEC for amendments or supplements to the Registration Statement or Prospectus or for additional information. In the event of the issuance of any stop order or of any order preventing or suspending the use of any Prospectus, the Partnership will promptly use its best efforts to obtain its withdrawal.
(b) The Partnership will furnish to SSB, without charge, two signed copies of the Registration Statement as originally filed and each amendment thereto, including all exhibits.
(c) The Partnership will not file any amendment to the Registration Statement or make any amendment or supplement to the Prospectus of which SSB shall not previously have been advised or to which SSB shall reasonably object in writing.
(d) The Partnership will furnish SSB with copies of any preliminary prospectus and of the Prospectus in such quantities as they may from time to time reasonably request. If at any time when the Prospectus is required to be delivered under the Act any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it shall be necessary to amend or supplement the Prospectus in order to comply with the Act, the Partnership will notify SSB and upon its request prepare and furnish without charge to it as many copies as it may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance.
(e) The Partnership will take such action as SSB may reasonably request to qualify the Units for offering and sale under the securities or blue sky laws of such jurisdictions as it may request and will comply with such laws so as to permit the continuance of sales in such jurisdictions for as long as may be necessary to complete the distribution.
3.Representations and Warranties.
The Partnership represents and warrants to SSB that:
(a) Each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto complied or when so filed will comply in all material respects with the requirements of the Act and the Commodity Exchange Act (“CEA”).
(b) At the time the Registration Statement becomes effective and at all times subsequent thereto up to the termination of the Offering Period, the Registration Statement and the
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If to SSB to:
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
If to SBFM to:
Smith Barney Futures Management LLC
388 Greenwich Street
New York, New York 10013
(d) No party is authorized by the Partnership to give any information or make any representation in connection with the offering of Units other than those contained in the Prospectus and such sales literature the use of which has been authorized in writing by the Partnership.
(e) This Agreement may be signed in counterpart.
(f) This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of the parties as of the day and year first above mentioned.
CITIGROUP DIVERSIFIED FUTURES FUND L.P. | ||
By: Smith Barney | ||
Futures Management LLC, | ||
(General Partner) | ||
By: | /S/ DAVID J. VOGEL | |
SMITH BARNEY FUTURES MANAGEMENT LLC | ||
By: | /S/ DAVID J. VOGEL | |
SALOMON SMITH BARNEY INC | ||
By: | /S/ DAVID J. VOGEL |
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