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EXHIBIT 10(h)
MANAGEMENT CONTRACT
THIS MANAGEMENT CONTRACT ("Agreement"), is made and entered into
effective as of the 8th day of March 1995, by and between The Future Fund II, an
Illinois limited partnership (the "Partnership"), and First October Trading
Company, Inc. (the "Trading Advisor").
W I T N E S S E T H:
WHEREAS, the purpose and business of the Partnership is to seek capital
appreciation by trading speculatively in futures contracts, commodities and
commodity options and forward contracts, and any other items which are
currently, or may later become, the subject of futures, forward or options
trading, and other related investments (sometimes hereinafter referred to as
"Contracts") on United States and non-United States exchanges and markets; and
WHEREAS, the Partnership, through Xxxxxxx Asset Management, Inc., its
general partner (the "General Partner"), pursuant to the Limited Partnership
Agreement of the Partnership, is authorized to utilize the services of
professional trading advisors in connection with the trading activities of the
Partnership; and
WHEREAS, the Partnership has heretofore offered units of limited
partnership interest in the Partnership for sale to investors; and
WHEREAS, the Trading Advisor is engaged in the business of making
trading decisions on behalf of itself and others regarding the purchase and sale
of Contracts; and
WHEREAS, the Partnership and the Trading Advisor each desire the Trading
Advisor to make trading decisions for the Partnership with respect to the assets
of the Partnership allocated to be managed by the Trading Advisor (the
"Allocated Assets") on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and agreements
set forth herein, the parties hereto do agree as follows:
1. DUTIES OF THE TRADING ADVISOR.
(a) The Partnership hereby appoints the Trading Advisor, and the
Trading Advisor hereby accepts appointment, as a trading advisor of the
Partnership in connection with the trading activities of the Partnership.
(b) Upon the Trading Advisor's commencing of trading operations for
the Partnership and for the period and on the terms and conditions set forth in
this Agreement, the Trading Advisor shall have sole authority and
responsibility, as the Partnership's agent and
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attorney-in-fact, for trading the Allocated Assets in Contracts and in
accordance with the Trading Advisor's Futures Options Portfolio ("Trading
Approach"; which term, for purposes of this Agreement, shall include trading
approaches, systems, instructions, methods, models, strategies, methodologies
and formulas) as described in the disclosure notice dated April 1995 relating to
the appointment of the Trading Advisor as a commodity trading advisor of the
Partnership (the "Disclosure Notice"), subject to the trading policies of the
Partnership furnished to the Trading Advisor in writing ("Trading Policies").
The parties hereto acknowledge that the Trading Advisor will trade Contracts for
the Partnership independently of any other trading advisor retained by the
Partnership. For purposes of this Agreement, the term "Contracts" shall not
include securities and options thereon.
(c) The Trading Advisor acknowledges and agrees that the aggregate
amount of Allocated Assets which the Trading Advisor shall treat as equity and
manage on behalf of the Partnership pursuant to this Agreement may include
"notional" funds. The Trading Advisor agrees to describe to the General Partner
its practices with respect to the leverage used by the Trading Advisor in
managing the Partnership's account relative to other accounts managed by the
Trading Advisor using the Trading Approach to enable the General Partner to
determine whether the "trading level" at which the Trading Advisor is currently
managing the Partnership's account is the level currently designated by the
General Partner.
(d) The General Partner and the Partnership acknowledge receipt of the
Trading Advisor's Disclosure Document dated March 3, 1995 (the "Disclosure
Document"). The Trading Advisor shall promptly furnish the Partnership with a
copy of each amended, supplemented or updated Disclosure Document of the Trading
Advisor filed with the Commodity Futures Trading Commission (the "CFTC") and the
National Futures Association ("NFA") upon acceptance thereof by the CFTC. Prior
to the commencement of trading on behalf of the Partnership, the Partnership
shall deliver to the Trading Advisor, and renew when necessary, a Commodity
Trading Authorization, in the form attached hereto as Exhibit 1, appointing the
Trading Advisor as the Partnership's agent and attorney-in-fact for such
purpose. All trades for the account of the Partnership shall be made through
such banks, brokers and dealers as the General Partner shall direct, and the
Trading Advisor shall have no authority or responsibility for selecting any such
banks, brokers or dealers in connection with the execution of transactions for
the Partnership or for the negotiation of commission rates charged therefor;
provided, however, that the General Partner shall notify the Trading Advisor of
any applicable changes in the commission rates charged by the Partnership's
banks, brokers and dealers with respect to transactions entered into with
respect to the Allocated Assets.
(e) In the event the Trading Advisor and its principals [as that term
is defined in Regulation Section 4.10(e) promulgated by the CFTC under the
Commodity Exchange Act, as amended (the "Act")], shareholders, partners,
employees and affiliates or any person who controls the foregoing
(collectively, "Principals and Affiliates"), wish to use trading programs,
systems or strategies other than or in addition to the Trading Approach in
connection with its trading for the Partnership, either in whole or in part,
it may not do so unless the Trading Advisor gives the General Partner 15 days'
prior written notice of its intention to utilize such different trading
programs, systems or strategies and the General Partner consents thereto in
writing. Non-material changes in the Trading Approach may be instituted
without prior written approval.
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(f) The Trading Advisor agrees to make all material disclosures to the
Partnership regarding itself and its Principals and Affiliates, their trading
performance and general trading methods, their accounts (but not the identities
of customers) and otherwise as are required in the reasonable judgment of the
General Partner or the Partnership to be made in any filings required by any
governmental body or by any applicable law, regulation, rule or order. Nothing
contained in this Agreement shall be construed or deemed to require the Trading
Advisor to disclose the confidential or proprietary details of its trading
strategies.
(g) The Trading Advisor understands and agrees that the General
Partner intends to designate other trading advisors and to apportion from time
to time to such other trading advisors the management of such portion of the
Partnership's assets as the General Partner shall determine in its absolute
discretion. The designation of other trading advisors and apportionment and
reapportionment of a portion of the Partnership's assets to such trading
advisors shall neither terminate this Agreement nor modify in any regard the
respective rights and obligations of the parties hereto.
(h) The General Partner shall have the right to make additions to, or
withdrawals from, the Allocated Assets (including any "notional" funds
comprising part of the Allocated Assets) at any time. The General Partner
agrees that the Trading Advisor may refuse any additional allocation of funds
for any reason. The General Partner, in its sole discretion, may at any time
remove all assets from the management of the Trading Advisor and may require the
Trading Advisor to liquidate existing positions.
(i) Upon receipt of instructions from the General Partner, the Trading
Advisor shall immediately cease its trading activities with respect to the
Allocated Assets, close out all existing positions in an orderly manner and not
initiate any new positions unless otherwise instructed by the General Partner or
the Partnership.
(j) The Trading Advisor shall review on a daily basis the positions
held by the Allocated Assets and shall immediately notify the General Partner of
any errors committed by the Trading Advisor or of any trade not executed in
accordance with the Trading Advisor's instructions.
2. OTHER ACCOUNTS AND ACTIVITIES OF THE TRADING ADVISOR.
(a) The services provided by the Trading Advisor hereunder are not to
be deemed exclusive. Subject to the terms of this Agreement, the Trading
Advisor and its Principals and Affiliates shall be free to trade for their own
accounts and to advise other persons and manage other accounts during the term
of this Agreement and to use the same or different degrees of leverage,
information, computer programs and trading strategies or formulas which they
obtain, produce or utilize in the performance of services for the Partnership.
However, the Trading Advisor represents, warrants and agrees that the rendering
of such consulting, advisory and management services to others will not require
any material change in the Trading Approach and will not materially adversely
affect the capacity of the Trading Advisor to continue to render services to the
Partnership of the quality and nature contemplated by this Agreement.
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(b) If, at any time during the term of this Agreement, the Trading
Advisor is required to aggregate the Partnership's Contract positions with the
positions of any other person or entity for purposes of applying CFTC- or
exchange-imposed position limits, the Trading Advisor agrees that it will
promptly notify the General Partner if the Partnership's positions are included
in an aggregate amount which equals or exceeds ninety percent (90%) of the
applicable limit. The Trading Advisor agrees that, if its trading
recommendations are altered because of the application of any position limit, it
will not modify the trading instructions with respect to the Partnership's
account in such manner as to affect the Partnership substantially
disproportionately as compared with the Trading Advisor's other accounts. The
Trading Advisor presently believes and represents that existing speculative
position limits will not materially adversely affect its ability to manage the
Partnership's account given the potential size of the Partnership's account and
the Trading Advisor's and its Principals' and Affiliates' current accounts and
all proposed accounts for which they have contracted to act as trading advisor.
The Trading Advisor further represents, warrants and agrees that under no
circumstances will it knowingly or deliberately use trading strategies or
systems for the Partnership that are inferior to trading strategies or systems
employed for any other client or account and that it will not knowingly or
deliberately favor any client or account managed by it over any other client or
account, it being acknowledged, however, that different trading strategies,
methods or degrees of leverage may be utilized for differing sizes of accounts,
accounts with different trading policies, accounts experiencing differing
inflows or outflows of equity, accounts which commence trading at different
times, accounts which have different portfolios or different fiscal years and
accounts with other differences, and that such differences may cause divergent
trading results.
(c) The Partnership and the General Partner acknowledge and agree that
the Trading Advisor and/or its Principals and Affiliates presently act and that
they may continue to act as advisors for other accounts managed by them and may
continue to receive compensation with respect to services for such accounts in
amounts which may be more or less than the amounts received from the
Partnership. The Trading Advisor agrees that in the management of such other
accounts by it and its Principals and Affiliates, it will act in good faith to
seek to achieve an equitable treatment of all accounts under management
including the Partnership's account with respect to, among other things,
priorities of order entry and position limits.
(d) The Trading Advisor agrees that it shall make such information
available to the General Partner respecting the performance of the Partnership's
account as compared to the performance of all other accounts managed by the
Trading Advisor and its Principals and Affiliates as shall be reasonably
requested by the General Partner or the Partnership. The Trading Advisor shall
not be required to disclose the identity of its clients.
3. ALLOCATION OF ASSETS TO THE TRADING ADVISOR. The Trading Advisor's
Allocated Assets initially shall be a total of approximately $588,347 of which
$0 is notional funding.
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4. FEES.
(a) Commencing with the commencement of trading by the Trading
Advisor for the Partnership, the Partnership agrees to pay to the Trading
Advisor as follows:
(i) Management Fee. A monthly management fee equal to 0.166% of the
Net Asset Value of the Allocated Assets as of the close of business on the last
business day of each calendar month (an approximate 2% annual rate). The
definition of the term "Net Asset Value" is set forth in Exhibit 2, hereto.
(ii) For purposes of calculating the management fee, Net Asset Value of
the Allocated Assets shall be determined before reduction for the management
fees or incentive fees, if any, accrued or payable with respect to the Allocated
Assets as of such month-end, and before giving effect to any distributions and
redemptions paid or payable at such month-end. In the event that (A) the
Trading Advisor commences trading as of any day other than the first day of a
calendar month, (B) this Agreement is terminated as of any date other than the
last day of a calendar month, or (C) the Partnership reallocates assets to or
from the Trading Advisor as of any day other than the first or last day of any
calendar month, the amount of the management fee shall be prorated on the basis
of the number of business days during such month that the Allocated Assets (as
adjusted in the case of reallocation of assets) were traded by the Trading
Advisor as compared to the total number of business days in such calendar
month. To the extent that the Partnership instructs the Trading Advisor to
trade the Allocated Assets at a "nominal account size" in excess of the actual
assets comprising Allocated Assets, the Trading Advisor's management fee shall
be calculated based upon the "nominal account size" of the Allocated Assets.
(iii) Incentive Fee. A quarterly incentive fee equal to 15% of any
New Trading Profits (as defined below) achieved during each calendar quarter.
New Trading Profits during a quarter shall mean the sum of (A) the net of any
profits and losses realized on trades closed out during the period, plus or
minus (B) the change in the net of any unrealized profits and losses on trades
which remained open as of the end of the period (net of accrued brokerage
commissions and other allocated expenses) from the net of any unrealized profits
and losses on trades initiated by the Trading Advisor which remained open as of
the end of the immediately preceding period (net of accrued brokerage
commissions and other allocated expenses), (C) any Trading Advisor management
fees paid or accrued through the end of the period, and (D) the Trading
Advisor's carryforward loss (as hereinafter defined) from the immediately
preceding period. If the sum of subparagraphs (A) through (D) for any period is
negative, such amount shall be the Trading Advisor's carryforward loss for the
next period. For purposes of calculating incentive fees, interest income earned
on the Allocated Assets will be disregarded. In the event of a withdrawal from
the Allocated Assets at a time when the Trading Advisor has a carryforward loss
in effect, the amount thereof shall be reduced by an amount determined by
multiplying the carryforward loss by a fraction, the numerator of which shall be
the amount of the withdrawal and the denominator of which shall be the Net Asset
Value of the Allocated Assets immediately prior to giving effect to the
withdrawal. In the event that an addition is made to the Allocated Assets
subsequent to a reduction in the Trading Advisor's carryforward loss by reason
of a withdrawal, the Trading Advisor's carryforward loss shall be increased by
or created in an amount (up to the aggregate amount of prior carryforward loss
reductions)
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determined by multiplying the aggregate amount of prior carryforward loss
reductions by a fraction, the numerator of which shall be the amount of the
addition and the denominator of which shall be the sum of the previous
withdrawals which resulted in carryforward loss reductions. The incentive fee
charged to the Partnership with respect to the Allocated Assets will be
dependent upon the performance of the Trading Advisor and will not be affected
by the performance of any other trading advisor appointed by the Partnership or
the Partnership as a whole. The initial incentive period shall commence on the
date the Trading Advisor commences trading activity for the Partnership and
shall end at the immediate following quarter-end (even though such period may
not be a full quarter). Subsequent incentive periods shall commence on the
first day of the next succeeding calendar quarter and end on the last day of
such calendar quarter. In the event this Agreement is terminated as of any date
which is not the end of an incentive period, an incentive fee will be paid by
the Partnership, if earned, with respect to the Allocated Assets as though such
termination date were the last day of the incentive period.
(b) Payment of Fees. The management fees and incentive fees due to
the Trading Advisor shall be paid by the Partnership within thirty (30) days of
the end of the calendar period to which they relate. The Partnership expressly
agrees that any such fees due the Trading Advisor shall survive the termination
or other expiration of this Agreement.
5. TRADING ADVISOR INDEPENDENT. The Trading Advisor shall for all
purposes herein be deemed to be an independent contractor to the Partnership and
the General Partner and shall, except as otherwise expressly provided herein,
have no authority to act for or represent the Partnership or the General Partner
in any way or otherwise be deemed a sponsor of the Partnership or an agent,
joint venturer or partner of the Partnership, the General Partner or of any
other trading advisor retained by the Partnership.
6. BROKER.
(a) The Trading Advisor agrees to enter all Contract orders through
Xxxxxxxxxx, Inc. ("Xxxxxxxxxx"), or such other brokers and forward contract
dealers as may be designated, from time to time, in writing by the Partnership.
The Partnership must consent in writing to the use of other floor brokers who
will give up such trades to Xxxxxxxxxx in accordance with exchange rules and the
give-up procedures established by the Partnership from time to time. The
Trading Advisor shall be responsible for any errors committed by any executing
broker who gives-up to Xxxxxxxxxx on behalf of the Partnership. In placing
trades for the Partnership's account, the Trading Advisor agrees that it shall
use its standard procedures for allocating orders among the Trading Advisor's
various accounts and not knowingly favor any other such account over the
Partnership's account.
(b) All forward contract and other trades for the Partnership will be
executed through the forward trading and other facilities of such affiliates of
Xxxxxxxxxx or other entities as the Partnership may designate from time to time.
7. STANDARD OF LIABILITY; INDEMNIFICATIONS.
(a) Standard of Liability. Neither the Trading Advisor nor any of its
Principals and Affiliates shall be liable to the Partnership, the General
Partner or any of their
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respective successors or assigns under this Agreement except by reason of (i)
acts or omissions to act which constitute bad faith, negligence or misconduct
or (ii) a breach of any of the representations, warranties, covenants or
agreements of the Trading Advisor set forth in this Agreement.
(b) Indemnity. (i) The Partnership agrees to indemnify and hold
harmless the Trading Advisor and each of its Principals and Affiliates from and
against any and all losses, claims, damages, liabilities, costs and expenses
(including, without limitation, attorneys' and accountants' fees and
disbursements), judgments and amounts paid in settlement (collectively,
"Losses") to which an indemnified person may become subject arising out of this
Agreement, the transactions contemplated hereby or the fact the Trading Advisor
is or was a trading advisor to the Partnership, unless any such Losses arise out
of, relate to, or are based upon the Trading Advisor's failure to meet the
standard of liability applicable to it under SECTION 7(A).
(ii) The Trading Advisor agrees to indemnify and hold harmless the
Partnership, the General Partner and each of their respective Principals and
Affiliates from and against any and all Losses to which they may become subject,
if any such Losses arise out of, relate to, or are based upon the Trading
Advisor's failure to meet the standard of liability applicable to it under
Section 7(a).
(c) Promptly after receipt by a party to be indemnified under SECTION
7(B), above, of any notice of the commencement of any action or proceeding, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnified party under such subsection, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. The requirement
that an indemnifying party be given written notice of the commencement of any
action shall be deemed to be satisfied if such indemnifying party shall have
actual knowledge thereof or shall have been given written notice of the
commencement of any action or proceeding within a reasonable time after the
commencement thereof. If any such action shall be brought against any
indemnified party and the indemnified party notifies the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, to assume the defense
thereof with counsel satisfactory to such indemnified party, and shall have the
right to negotiate and consent to a settlement thereof, provided that the
indemnified party shall have consented to the settlement. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that the indemnified
party shall have the right to employ counsel to represent it, if, in the
indemnified party's reasonable judgment, it is advisable for such party to be
represented by separate counsel, in which event the fees and expenses of such
separate counsel shall be borne by the indemnified party. No indemnifying party
shall be liable for any settlement of any such action effected without its
consent, but if any such action or proceeding is settled with the consent of any
indemnifying party or if there be a final judgment for the plaintiff in any such
action or proceeding (of which an indemnifying party shall have been notified),
such indemnifying party shall indemnify and hold harmless each
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indemnified party from and against any Losses incurred or suffered by reason
of such settlement or judgment.
(d) Any indemnification required by this Section 7, unless ordered or
expressly permitted by a court, shall be made by the indemnifying party only
upon a determination by independent legal counsel in a written opinion that the
conduct which is the subject of the claim, demand, lawsuit, action or proceeding
with respect to which indemnification is sought meets the applicable standard
set forth in this Section 7.
(e) The provisions of this Section 7 shall survive the termination or
other expiration of this Agreement.
8. THE TRADING ADVISOR'S REPRESENTATIONS AND WARRANTIES. The Trading
Advisor represents and warrants to the Partnership and the General Partner as
follows:
(a) The Trading Advisor is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and has
full power and authority to enter into and perform its obligations under this
Agreement and to conduct its business as described in this Agreement and the
Disclosure Notice, and the Trading Advisor is qualified to conduct its business
and is in good standing in every jurisdiction in which the nature or conduct of
its business requires such qualification and failure to so qualify would have a
materially adverse effect on its ability to comply with, or perform its
obligations under, this Agreement, it being understood that any decision as to
the jurisdiction or jurisdictions in which the Trading Advisor shall conduct its
business is within the sole discretion of the Trading Advisor.
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Trading Advisor and is a valid and binding agreement of the
Trading Advisor enforceable in accordance with its terms.
(c) The execution and delivery of this Agreement and the performance
of the obligations and the consummation of the transactions contemplated in this
Agreement and in the Disclosure Notice will not conflict with, violate, breach
or constitute a default under, any term or provision of the Trading Advisor's
certificate of incorporation, by-laws, or other charter documents, or any
indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument to which the Trading Advisor or any of its Principals and Affiliates
is a party or by which any of them are bound, or to which any of the property
(including, but not limited to, its Trading Approach) or assets of the Trading
Advisor or its Principals and Affiliates are subject, or any order, rule, law,
statute, regulation, or other legal requirement applicable to the Trading
Advisor or any of its Principals or to the property or assets of the Trading
Advisor or its Principals and Affiliates of any court or any governmental or
administrative body or agency or panel or any regulatory or self-regulatory
organization or exchange having jurisdiction over the Trading Advisor or any of
its Principals and Affiliates.
(d) The Trading Advisor is registered as a commodity trading advisor
under the Act, its Principals are identified on the Trading Advisor's most
recent CFTC Form 7-R filed with the NFA pursuant to the Act, and it is a member
of the NFA in such capacity and such
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registration and membership has not expired or been revoked, lapsed,
suspended, terminated, or not renewed or limited or qualified in any respect.
(e) The Trading Advisor is not bankrupt or insolvent.
(f) The Disclosure Document is complete and accurate in all material
respects, does not contain any misstatement of any material fact, does not omit
to state any material fact necessary to be stated therein in order to make the
statements made therein, in light of the circumstances under which they are
made, not misleading, and complies in all material respects with the applicable
requirements of the Act and the rules promulgated thereunder and may be relied
upon by the Partnership and the General Partner in preparing the Disclosure
Notice and allocating assets of the Partnership to the Trading Advisor and there
has not been, since the date of the Disclosure Document's issuance, any material
adverse change in the condition, financial or otherwise, business or prospects
of the Trading Advisor or any of its Principals and Affiliates, whether or not
arising in the ordinary course of business, or relating to the historical
performance and operations of the Trading Advisor.
(g) The Trading Advisor and each Principal has complied and will
continue to comply with all orders, rules, laws, statutes, regulations or other
legal requirements applicable to the Trading Advisor or any of its Principals
and Affiliates or to their respective businesses, properties, or assets,
including the Act and the rules promulgated by the CFTC and the NFA, the
violation of which would materially and adversely affect its or their ability to
comply with, and perform its or their obligations under this Agreement, and
there are no actions, suits, proceedings, or notices of investigations or
investigations pending or threatened against the Trading Advisor, or any of its
Principals or Affiliates, by the NFA, the CFTC or any governmental, regulatory
or self-regulatory agency regarding noncompliance by the Trading Advisor or any
of its Principals or Affiliates with any law, statute, rule or regulation, or at
law or in equity or before or by any court, any federal, state, municipal or
other governmental department commission, board, bureau, agency, or
instrumentality, or by any regulatory or self-regulatory organization, or
exchange, in which an adverse decision would materially and adversely affect its
or their ability to comply with or to perform its or their obligations under
this Agreement or that would be required to be disclosed in the Disclosure
Notice, which is not so disclosed, would result in a material adverse change in
the condition, financial or otherwise, business or prospects of the Trading
Advisor.
(h) The Trading Advisor and each Principal has all governmental,
regulatory, self-regulatory and exchange licenses and approvals and has effected
all filings and registrations with all governmental, regulatory and
self-regulatory agencies required to conduct their respective businesses and to
act as described in the Disclosure Notice and to perform its or their respective
obligations under this Agreement.
(i) With respect to information contained in the Disclosure Notice
relating to the Trading Advisor, including, without limitation, the tables and
notes thereto, the Disclosure Notice does not contain any untrue statement of
material fact or omit to state therein a material fact required to be stated
therein or necessary to be stated therein in order to prevent the statements
made therein, in light of the circumstances under which they are made, from
being misleading.
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(j) In the placement of orders and the allocation of executed trades
for the Partnership and for the accounts of any other client, the Trading
Advisor shall utilize a fair and reasonable order entry system and trade
allocation system, which shall be no less favorable to the Partnership than to
any other account managed by the Trading Advisor.
(k) The Trading Advisor shall promptly notify the other parties
hereto of the commencement of any suit, action or proceeding involving it or its
Principals and Affiliates, whether or not any such suit, action or proceeding
also involves any of the other parties hereto.
The foregoing representations and warranties shall be continuing during
the term of this Agreement and any renewal hereof and if at any time any event
shall occur which would make or tend to make any of the foregoing not true or
incomplete, the Trading Advisor shall promptly notify the Partnership and the
General Partner of the occurrence of such event.
9. THE PARTNERSHIP'S REPRESENTATIONS AND WARRANTIES. The Partnership
represents and warrants to the Trading Advisor as follows:
(a) The Partnership is duly organized, validly existing and in good
standing as a limited partnership under the laws of Illinois. The Partnership
has full power and authority to perform its obligations under this Agreement and
to conduct its business and to act as described in the Disclosure Notice.
(b) This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Partnership and is a valid and binding agreement of
it enforceable in accordance with its terms.
(c) The Partnership has complied and will continue to comply with all
orders, rules, laws, statutes, regulations or other legal requirements
applicable to it, to its business, properties, and assets, including the Act and
the rules promulgated by the CFTC and the NFA, the violation of which would
materially and adversely affect its ability to comply with, and perform its
obligations under this Agreement, and there are no actions, suits, proceedings,
or notices of investigations or investigations pending or threatened against it,
by the NFA, the CFTC or any governmental, regulatory or self-regulatory agency
regarding noncompliance by it with any law, statute, rule or regulation, or at
law or in equity or before or by any court, any federal, state, municipal or
other governmental department, commission, board, bureau, agency, or
instrumentality, or by any regulatory or self-regulatory organization, or
exchange, in which an adverse decision would materially and adversely affect its
ability to comply with or to perform its obligations under this Agreement or
that would be required to be disclosed in the Disclosure Notice, which is not
so disclosed, or would result in a material adverse change in the condition,
financial or otherwise, business or prospects of the Partnership.
(d) The Partnership has all federal and state governmental,
regulatory, self-regulatory and exchange licenses and approvals and has effected
all filings and registrations with all federal and state governmental and
regulatory and self-regulatory agencies required to conduct its business and to
act as described in the Disclosure Notice and to perform its obligations under
this Agreement.
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(e) Except with respect to information contained in the Disclosure
Notice relating to the Trading Advisor or any other advisor, the Disclosure
Notice does not contain any untrue statement of material fact or omit to state
therein a material fact required to be stated therein or necessary to be stated
therein in order to prevent the statements made therein, in light of the
circumstances under which they are made, from being misleading.
(f) The General Partner is registered as a commodity pool operator
under the Act and is a member of the NFA in such capacity and such registration
and membership has not expired or been revoked, lapsed, suspended, terminated,
or not renewed or limited or qualified in any respect.
(g) The General Partner has all federal and state governmental,
regulatory, self-regulatory and exchange licenses and approvals and has effected
all filings and registrations with all federal and state governmental and
regulatory and self-regulatory agencies required to conduct its business and to
act as described in the Disclosure Notice and to perform its obligations under
this Agreement.
The foregoing representations and warranties shall be continuing
during the term of this Agreement and any renewal hereof and if at any time any
event shall occur which would make or tend to make any of the foregoing not
true or incomplete, the General Partner will promptly notify the Trading
Advisor thereof.
10. TERM AND TERMINATION.
(k) Unless terminated earlier as provided below, the term of this
Agreement shall be until the end of the twelfth full calendar month after the
Trading Advisor commences trading activity and is automatically renewable
thereafter for successive one-year periods unless (i) the Partnership terminates
this Agreement during the initial one-year term thereof by giving thirty days'
prior written notice to the Trading Advisor, or (ii) either the Trading Advisor
or the Partnership terminates the Agreement at the end of the initial one-year
term or at any time thereafter by giving thirty days' prior written notice to
such other party.
(l) Notwithstanding the foregoing, this Agreement may be terminated by
the Partnership immediately upon written notice to the Trading Advisor if (i)
the Trading Advisor, if other than a natural person, merges, consolidates with
or sells a substantial portion of its assets to any individual or entity, or
there is a material adverse change relating to the Trading Advisor or a material
adverse change in control, organizational structure, financial condition,
regulatory compliance or personnel of the Trading Advisor, (ii) any of the
Trading Advisor's registrations under the Act or otherwise are suspended,
terminated, lapsed or not renewed, (iii) the Trading Advisor's membership in the
NFA or other self-regulatory organization is suspended, terminated, lapsed or
not renewed, (iv) the Trading Advisor otherwise becomes unable to serve as a
trading advisor to the full extent contemplated by this Agreement, (v) the
Trading Advisor breaches any of its representations, warranties, covenants or
agreements contained in this Agreement, or (vi) the General Partner determines
doing so is in the best interests of the Partnership.
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19. NOTICES. Except as otherwise provided herein, all notices,
demands or requests required to be made or delivered under this Agreement shall
be effective only if in writing and delivered personally or by facsimile or
mail, postage prepaid (airmail if the addressee is in another country), to the
respective addresses below or to such other addresses as may be designated by
the party entitled to receive the same by notice similarly given and shall be
deemed given by the party required to provide notice when received by the party
to whom notice is required to be given.
If to the Partnership or the General Partner to:
Xxxxxxx Asset Management, Inc.
One Financial Plaza
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxxx, President
Fax No.: 000-000-0000
If to the Trading Advisor to:
First October Trading Company, Inc.
00 Xxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxx 00000
Attn: Xxxxx Xxxxx, President
Fax No.: 000-000-0000
12. ASSIGNMENT. No party hereto may transfer, sell, encumber, appoint
agents or assign any of its rights or obligations hereunder in whole or in part
without the express written consent of each of the other parties hereto.
13. AMENDMENT; MODIFICATION. This Agreement may not be amended or
modified, nor any of the provisions hereof waived, except by the written consent
of all of the parties hereto.
14. COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject hereof and
supersedes all prior agreements written or oral, and no other agreement, verbal
or otherwise, shall be binding as between the parties hereto unless in writing
and signed by the party against whom enforcement is sought.
15. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their successors and permitted assigns. No other
person other than the persons indemnified under Section 7 hereof for matters
relating to that Section shall have any right or obligation under this
Agreement.
16. HEADINGS. Headings to sections herein are for the convenience of
the parties only, and are not intended to be a part of or to affect the meanings
or interpretation of this Agreement.
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17. GOVERNING LAW: CONSENT TO JURISDICTION. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Illinois
without giving effect to principles of conflicts of laws.
18. ARBITRATION. The parties agree that all controversies which
may arise in connection with any transaction contemplated by this Agreement or
the construction, performance or breach of this Agreement shall be determined by
arbitration, to be held in the City of Chicago, State of Illinois unless
otherwise agreed to by the parties hereto, and in accordance with the rules then
obtaining of the NFA, or if no such rules are then in effect or if jurisdiction
is declined, then the rules then obtaining of the American Arbitration
Association; provided, however, that (a) the arbitrator(s) shall be
knowledgeable in industry standards and practices and the matters giving rise to
the dispute, (b) the arbitrator(s) shall not have the power and authority to
award punitive damages, (c) the authority of the arbitrator(s) shall be limited
to construing and enforcing the terms and conditions of this Agreement as
expressly set forth herein, and (d) the arbitrator(s) shall state the reasons
for their award and their legal and factual conclusions underlying the award in
a written opinion. The award of the arbitrator(s), or a majority of them, shall
be final, and judgment upon the award may be confirmed and entered in any court,
state or federal, having jurisdiction.
19. CONSENT TO JURISDICTION. Each party hereto expressly and
irrevocably agrees (a) that it waives any objection, and specifically consents,
to venue in the United States federal or state courts located in the City of
Chicago, State of Illinois, United States of America, so that any action at law
or in equity may be brought and maintained in any such court, and (b) that
service of process in any such action may be effected against such party by
certified or registered mail or in any other manner permitted by applicable
United States Federal Rules of Civil Procedure or Rules of the Courts of the
State of Illinois. In addition, each party hereto expressly and irrevocably
waives, in respect of any action brought in any United States federal or state
court located in the City of Chicago, State of Illinois or any resulting
judgment, any objection, and hereby specifically consents, to the jurisdiction
of any such court, and agrees not to seek to change the situs of such action or
to assert that any other court in any other jurisdiction is a more suitable
forum for the hearing and adjudication of any claim or dispute raised in such
action.
20. SURVIVAL. The indemnity provisions of this Agreement shall
survive the termination or expiration of this Agreement with respect to any
matter existing prior to such termination; the payment obligations under this
Agreement shall continue until satisfied; and the other provisions of the
Agreement shall survive the termination of this Agreement with respect to any
matter arising while this Agreement was in effect.
21. WAIVER OF BREACH. The waiver by a party of a breach of any
provisions of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by a party. The failure of a party to insist upon strict
adherence to any provision of this Agreement shall not constitute a waiver or
thereafter deprive such party of the right to insist upon a strict adherence.
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22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
THE FUTURE FUND II
By: Xxxxxxx Asset Management, Inc.
Its General Partner
By: /s/ Xxx X. Xxxxxxx
------------------
Xxx X. Xxxxxxx
President
FIRST OCTOBER TRADING COMPANY, INC.
By: /s/ Xxxxx Xxxxx
---------------
Xxxxx Xxxxx
President
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EXHIBIT 1
March 8, 1995
First October Trading Company, Inc.
00 Xxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxx 00000
Re: Commodity Trading Authorization
Gentlemen:
The Future Fund II, an Illinois limited partnership (the "Partnership"),
does hereby make, constitute, and appoint you as its Attorney-in-Fact to
purchase and sell futures contracts, commodities and commodity options and
forward contracts, and any other items which are currently, or may later become,
the subject of futures, forward or options trading, and other related
investments on domestic and international exchanges, through Xxxxxxxxxx, Inc.,
or such other brokers and forward contract dealers as may be designated, from
time to time, in writing by the Partnership, as brokers, in accordance with the
Management Contract between us dated March 8, 1995.
Very truly yours,
THE FUTURE FUND II
By: Xxxxxxx Asset Management, Inc.
Its General Partner
By: /s/ Xxx X. Xxxxxxx
------------------
Xxx X. Xxxxxxx
President
