EXHIBIT 10.01
TRADING ADVISORY AGREEMENT
TRADING ADVISORY AGREEMENT (the "Agreement") dated as of the ____ day
of _________, 1996, by and among JWH Global Portfolio Trust, a Delaware business
trust (the "Trust"); CIS Investments, Inc., a Delaware corporation ("CISI" or
"Managing Owner"), and Xxxx X. Xxxxx & Company, Inc., a California corporation
("JWH" or "Advisor"), and agreed to as to Section 4 by Cargill Investor
Services, Inc., a Delaware corporation.
WITNESSETH:
WHEREAS, the Trust has been organized primarily for the purpose of
trading, buying, selling, spreading or otherwise acquiring, holding or disposing
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 (collectively "Commodity
Interests"); and
WHEREAS, the Managing Owner desires to utilize the services of
professional commodity trading advisors in connection with the commodity trading
activities of the Trust; and
WHEREAS, the Trust proposes to make an initial public offering
("Offering") of units of beneficial interest in the Trust (the "Units") through
Cargill Investor Services, Inc., an affiliate of CISI, and in connection
therewith, the Trust has filed with the United States Securities and Exchange
Commission (the "SEC"), pursuant to the United States Securities Act of 1933, as
amended (the "1933 Act"), a registration statement on Form S-1 to register the
Units, and as part thereof a prospectus (which registration statement, together
with all amendments and supplements thereto, shall be referred to herein as the
"Registration Statement" and which prospectus together with all amendments and
supplements thereto in the forms filed with the SEC pursuant to Rule 424 under
the Act shall be referred to herein as the "Prospectus"); and
WHEREAS, the Trust will prepare and file applications for registration
of the Units under the securities or Blue Sky laws of such jurisdictions as the
Managing Owner deems appropriate; and
WHEREAS, the Advisor's present business includes the management of
Commodity Interests trading accounts for its clients; and
WHEREAS, the Advisor is registered as a commodity trading advisor
under the Commodity Exchange Act, as amended ("CE Act"), and is a member of the
National Futures Association ("NFA") as a commodity trading advisor and will
maintain such registration and membership for the term of this Agreement; and
WHEREAS, the Trust and the Advisor desire to enter into this Agreement
in order to set forth the terms and conditions upon which the Advisor will
render and implement advisory services in connection with the conduct by the
Trust of its Commodity Interest trading activities during the term of this
Agreement;
NOW, THEREFORE, the parties agree as follows:
1. DUTIES OF THE ADVISOR. The Trust hereby appoints the Advisor as
its exclusive attorney-in-fact to invest and reinvest in Commodity Interests the
assets of the Trust which the Managing Owner allocates to the Advisor on the
terms and conditions set forth herein. This limited power-of-attorney is a
continuing power and shall continue in effect until terminated hereunder. To
this end, the Advisor (i) agrees to act as the trading advisor employed by the
Managing Owner on behalf of the Trust, and specifically, to exercise discretion
with respect to the assets of the Trust under the Advisor's management upon the
terms and conditions, and for the purposes, set forth in this Agreement and in
the latest final Prospectus of the Trust relating to the offering of Units
("Prospectus"), and (ii) shall have sole authority and responsibility for
directing the investment and reinvestment of the Trust's assets in Commodity
Interests for the term of this Agreement pursuant to the Advisor's trading
systems, methods and strategies, as set forth in the Prospectus. The Advisor
shall initially employ its Financial and Metals Portfolio and Original
Investment Program (together the "Trading Programs") for the Trust, with
allocations being made equally between the Trading Programs at the commencement
of trading by the Trust and at each monthly closing and with automatic
rebalancing between the Trading Programs by the Advisor at each calendar
quarter-end, as described in the Prospectus. At all times each Trading Program
shall have an allocation of at least $2 million to meet the Advisor's minimum
account sizes. The Managing Owner shall not have authority to reallocate assets
without the advance written consent of the Advisor.
To the extent that assets of the Trust are invested in United States
Treasury bills or other investments approved by the Commodity Futures Trading
Commission ("CFTC") for the investment of "customer" funds or are held in cash,
the Managing Owner will have the responsibility for the management thereof in
investments other than Commodity Interests. The Advisor will use its good faith
best efforts in determining the investment and reinvestment of the Trust's
assets in compliance with the Trust's trading policies and limitations, and in
accordance with the Trading Programs, in each case as set forth in the
Prospectus and, to the extent the Advisor is notified thereof and agrees
thereto, in accordance with revisions to such trading policies and limitations
made by the Managing Owner (using its good faith business judgment) in
accordance with the terms of this Agreement and the Prospectus. In the event
that the Managing Owner shall, in its sole discretion, determine that any
trading instruction issued by the Advisor violates the Trust's trading policies
or limitations, or for any other reason, is not in the best interests of the
Trust, then the Managing Owner may override such trading instruction. Nothing
herein shall be construed to prevent the Managing Owner from imposing any
limitations on the trading activities of the Trust beyond those enumerated in
the Prospectus if the Managing Owner determines (using its good faith business
judgment) that such limitation(s) are necessary in the best interests of the
Trust and the Advisor agrees to adhere to such limitations, following written
notification thereof.
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Should the Managing Owner, in its sole discretion, override any
trading instructions issued by the Advisor for any reason other than a
determination that the trading instructions issued by the Advisor violate the
Trust's trading policies or limitations, the Managing Owner agrees that any
trading profits or losses incurred on behalf of the Trust as a result of the
actions of the Managing Owner to override the Advisor's trading instructions
shall be for the account of the Trust and the Advisor shall incur no liability
for such profits and losses.
The Advisor agrees that in the event the Advisor determines to use a
trading program other than or in addition to the Trading Programs set forth in
the Prospectus in connection with its trading for the Trust, either in whole or
in part, it may not do so unless it gives the Managing Owner prior written
notice of its intention to utilize such different trading program and the
Managing Owner consents thereto in writing. Similarly, no change in trading
programs proposed by the Managing Owner may be implemented without the Advisor's
prior written consent.
The Advisor also agrees to give the Trust prior written notice of any
proposed material change in the Trading Programs as set forth in the Prospectus,
and agrees not to make any material change in a Trading Program (as applied to
the Trust) without the prior express written approval of the Managing Owner, it
being understood that the Advisor shall be free to institute non-material
changes in a Trading Program (as applied to the Trust) without such prior
written approval. Without limiting the generality of the foregoing, neither
refinements to a Trading Program, nor the addition or deletion of Commodity
Interests to or from a Trading Program, nor a change in the leverage of such
Trading Program, shall be deemed a material change in the Trading Program, and
prior approval of the Managing Owner shall not be required therefor, except as
set forth in the next paragraph. The Advisor agrees that in the event it
determines to trade speculatively or is now trading another commodity interest
account pursuant to a trading program materially different from that utilized by
the Advisor in its trading on behalf of the Trust other than those disclosed in
the Advisor's current Disclosure Document, the Advisor will notify the Managing
Owner and disclose such trading program to the Managing Owner upon reasonable
request, subject to reasonable assurances of confidentiality, provided that in
no event shall the Advisor hereby be required to disclose any trading approach
on behalf of the Trust used solely in trading experimental accounts, and
provided further that nothing contained in this Agreement shall require the
Advisor to disclose what it deems to be proprietary or confidential information
concerning any such trading program, or trading approach or technique.
The Advisor shall provide the Trust and the Managing Owner with a
complete list of Commodity Interests which it intends to trade on the Trust's
behalf. All Commodity Interests other than regulated futures contracts and
options on regulated futures contracts traded on a qualified board or exchange
in the United States shall be listed on Appendix A to this Agreement. The
addition of Commodity Interests (other than spot and forward contracts on
foreign currencies) to the Trust's portfolio shall require prior written notice
to the Trust and the Managing Owner and an amendment to Appendix A.
All purchases and sales of Commodity Interests shall be for the
account and risk of the Trust. The Managing Owner shall be responsible for
informing the Advisor of the estimated dollar amounts of additions and
redemptions at least three days before each month-end and the
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Advisor shall not have any liability for trading losses or lost profits
arising out of any errors or delays related thereto.
Neither the Advisor, nor its principals, employees, directors,
officers, shareholders, or any person who controls or who is controlled by the
Advisor, shall be liable to the Managing Owner, its officers, directors,
shareholders or employees, or the Trust, its beneficial owners (the
"Unitholders") or any of their successors or assigns under this Agreement,
except by reason of acts or omissions in contravention of the express terms of
this Agreement due to their bad faith, misconduct or negligence or by reason of
not having acted in good faith in the reasonable belief that such actions or
omissions were in, or not opposed to, the best interests of the Trust, it being
understood that, without limiting the Advisor's liability hereunder, trading
profits or losses incurred on behalf of the Trust shall be for the account of
the Trust and the Advisor shall not incur any liability for such profits or
losses provided the Advisor would not otherwise be liable to the Trust under the
terms hereof. Xx. Xxxx X. Xxxxx shall have no liability to the Trust or the
Managing Owner under this Agreement or in connection with the transactions
contemplated in this Agreement except for fraud or misconduct by Xx. Xxxx X.
Xxxxx.
The Advisor, each of its principals, employees, directors, officers,
shareholders, and any person who controls and who is controlled by the Advisor,
shall be indemnified by the Trust and the Managing Owner, jointly and severally,
to the full extent permitted by law, against any losses, judgments, liabilities,
expenses (including reasonable attorneys' fees) and claims, including
settlements, incurred or sustained by the Advisor in connection with any acts or
omissions of the Advisor relating to its management of Trust assets pursuant to
this Agreement or arising out of or in connection with this Agreement or the
Advisor's management of the Trust's assets, provided that there has been (i) no
judicial determination that such liability was the result of negligence,
misconduct, bad faith or a breach of this Agreement on the part of the Advisor
and (ii) no judicial determination that the Advisor, its principals, employees,
directors, officers, shareholders and each person controlling or controlled by
the Advisor, did not act (or took no action) in good faith and in a manner
reasonably believed by it and them to be in, or not opposed to, the best
interests of the Trust. Any such indemnification involving a material amount,
unless ordered or expressly permitted by a court, shall be made by the Trust
only upon the opinion of independent counsel acceptable to the Trust and to the
Advisor that the Advisor has met the applicable standard of conduct described
above.
Expenses incurred in defending a threatened or pending civil,
administrative or criminal action, suit or proceeding against the foregoing
indemnitees may be paid by the Trust or the Managing Owner in advance of the
final disposition of such action, suit or proceeding if (i) the legal action,
suit or proceeding, if not sustained, would entitle the indemnitees to
indemnification pursuant to the preceding paragraph, and (ii) the Advisor
undertakes to repay the advanced funds to the Trust and the Managing Owner in
cases in which the foregoing indemnitees are not entitled to indemnification
pursuant to the preceding paragraph. Expenses incurred in defending a
threatened or pending civil, administrative or criminal action, suit or
proceeding against the Advisor and the Managing Owner shall be paid initially by
the Managing Owner, subject to subsequent proportionate reimbursement by the
Advisor in the event of an unfavorable determination with respect to the Advisor
(e.g. if the Advisor is found to be x% liable, the Advisor shall reimburse the
Trust or the Managing Owner x% of the expenses advanced by the Trust or the
Managing Owner); provided, that
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such initial payment of expenses shall not be made by the Managing Owner on
behalf of the Advisor if the Advisor elects to be represented by counsel of
its own choice (except where the Advisor so elects because it has interest
adverse -- a claim for indemnification shall not be considered adverse
interest for this purpose -- to the Managing Owner and/or the Trust) or
distinct issues of law or fact are involved and, provided further, that in
the event of the initial payment of such expenses by the Managing Owner, the
Managing Owner shall have the exclusive right to select counsel reasonably
acceptable to the Advisor.
2. OBLIGATIONS OF THE TRUST AND THE ADVISOR. The Trust, the Managing
Owner and the Advisor (only with respect to making the disclosures regarding
itself set forth in the immediately following sentence) respectively agree to
cooperate and use their good faith best efforts in connection with (a) the
preparation of the Registration Statement and the Prospectus; (b) the filing of
the Registration Statement and the Prospectus with such governmental and self-
regulatory authorities as the Managing Owner deems appropriate for the
registration and sale of the Units and the taking of such other actions not
inconsistent with this Agreement as the Managing Owner may determine to be
necessary or advisable in order to make the proposed offer and sale of Units
lawful in any jurisdiction; and (c) causing the Registration Statement to become
effective under the 1933 Act and the securities or Blue Sky laws of such
jurisdictions as the Managing Owner may deem appropriate. The Advisor agrees to
make all necessary disclosures regarding itself, its officers and principals,
trading techniques, trading programs (including the Trading Programs), trading
performance, customer accounts (other than the names of customers, unless such
disclosure is required by law or regulation) and otherwise as may be required,
in the reasonable judgment of the Managing Owner, to be made in the Registration
Statement and Prospectus and in such filings subject to the confidentiality
provisions in the third paragraph of Section 3. No description of the Advisor
may be distributed by the Managing Owner without the prior consent of the
Advisor.
The Advisor agrees to participate, at its own cost and expense, in
"road show" and similar presentations in connection with the offering of the
Units to the extent reasonably requested by the Managing Owner, on the following
conditions: (i) the Advisor shall not be obligated to take any action which
might require registration as a broker-dealer or investment adviser under any
applicable federal or state law and (ii) the Advisor shall not be required to
assist in "road show" or similar presentations to the extent that the Advisor
reasonably believes that doing so would interfere with the Advisor's trading
activities or be unlawful. The parties acknowledge that the Advisor has not
been, either alone or in conjunction with the Managing Owner or its affiliates,
an organizer or promoter of the Trust.
The Trust may at any time withdraw the Registration Statement from the
SEC or any other governmental or self-regulatory authority with which it is
filed or otherwise terminate the Registration Statement or the offering of
Units. Upon any such withdrawal or termination, or if the minimum number of
Units required to be sold pursuant to the Prospectus is not sold, this Agreement
shall terminate and, except for the payment of expenses as set forth in the
immediately preceding paragraph and the indemnification provisions set forth in
Section 1 of this Agreement, neither the Trust nor the Managing Owner shall have
any obligations to the Advisor with respect to this Agreement; nor shall the
Advisor have any obligations to the Trust or the Managing Owner with respect to
this Agreement.
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3. ADVISOR INDEPENDENCE. The Advisor is and shall for all purposes
herein be deemed to be an independent contractor with respect to the Trust and
the Managing Owner, and shall, unless otherwise expressly authorized, have no
authority to act for or to represent the Trust or the Managing Owner in any way
or otherwise be deemed to be a general agent of the Trust or the Managing Owner.
The Advisor may, in its discretion, purchase Units in the Trust.
The Trust and the Managing Owner acknowledge that the Trading
Programs, including the trading instructions, method and systems, of the Advisor
are the confidential property of the Advisor. Nothing in this Agreement shall
require the Advisor to disclose the confidential or proprietary details of the
Trading Programs. The Trust and the Managing Owner further agree that they will
keep confidential and will not disseminate the Advisor's trading advice to the
Trust to any Unitholder or to any of the customers, employees, agents, officers
or directors of the Trust's broker or any other party, except as, and to the
extent, reasonably determined by the Managing Owner to be (i) necessary for the
conduct of the business of the Trust, including the performance of brokerage
services by the Trust's commodity broker(s), or (ii) required by law or
regulation. All such information related to trading advice acquired by the
Trust or the Managing Owner shall be used solely to monitor the Advisor's
trading on behalf of the Trust.
4. COMMODITY BROKER. All Commodity Interests trades for the account
of the Trust shall be made through such commodity broker or brokers as the
Managing Owner directs. The Advisors shall have authority to communicate all
orders directly to such broker(s). The Advisor shall not have any authority or
responsibility in selecting or supervising any broker for execution of Commodity
Interests trades of the Trust or for negotiating commission rates to be charged
therefor. At the present time it is contemplated that the Trust will execute
all Commodity Interests trades through Cargill Investor Services, Inc. and that
brokerage commissions payable by the Trust each month will equal 1/12 of 6.5% of
the Trust's month-end assets (after deduction of the Advisor's Management Fee as
of the end of each month except with respect to Units owned by Unitholders
eligible for Special Brokerage Fee Rates as described in the Prospectus. The
Advisor shall be notified in writing by the Managing Owner if any Commodity
Interests trades for the account of the Trust are to be made through any futures
commission merchant other than Cargill Investor Services, Inc. Notwithstanding
the foregoing, the Advisor may place trading orders for the Trust with floor
brokers selected by the Advisor; any trades so executed for the benefit of the
Trust shall be "given-up" to such broker or brokers as the Managing Owner shall
approve. Expenses of "give-ups" shall be borne by the Trust up to a maximum of
$___ per round-turn on average or a reasonable amount mutually agreed to.
The Advisor agrees that it shall not receive any commission,
compensation, remuneration or payment whatsoever from any broker with whom the
Trust carries any account by reason of the Trust's Commodity Interests
transactions.
5. FEES. In consideration of and in compensation for the performance
of the Advisor's services under this Agreement, the Trust agrees that it will
pay to the Advisor the following: (i) a monthly management fee (the "Management
Fee") equal to 1/3 of 1% of the Trust's month-end Net Assets (as hereinafter
defined, except that the calculation of Net Assets for the
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purpose of determining the Advisor's Management Fee shall be before deduction
of any Management Fees, distributions, redemptions or Incentive Fee accrued
or payable as of such month-end), and (ii) a quarterly incentive fee (the
"Incentive Fee") of 15% of Trading Profits (as hereinafter defined).
Incentive Fee on Trading Profits shall accrue as of the close of trading on
the last day of each calendar month but shall become payable on the last day
of each calendar quarter (March 31, June 30, September 30 and December 31).
The first Incentive Fee which may be due and owing to the Advisor in respect
of any Trading Profits shall be computed as of the end of the first calendar
quarter during which the Advisor managed the Trust's assets allocated to it
for at least 60 days. Payment of the Management Fee shall be made within 10
business days following the end of the month to which they relate.
Management fees shall be deducted prior to the calculation of the quarterly
Incentive Fees.
"Net Assets" means the Fund's total assets less (i) total liabilities
except any liability for organization and initial offering cost amortization,
ongoing offering costs and administrative expenses and (ii) brokerage
commissions at the annual rate of 1.25% (rather than the full 6.5% annual rate)
of the Trust's month-end assets, to be determined on the basis of generally
accepted accounting principles, consistently applied, except as set forth below.
For purposes of this calculation:
(a) Net Assets shall include any unrealized profit or loss on
securities and open commodity positions and any other credit or debit
accruing to the Fund but unpaid or not received by the Fund.
(b) All securities and open commodity positions shall be valued
at their then market value which means, with respect to open commodity
positions, the settlement price as determined by the exchange on which
the transaction is effected or the most recent appropriate quotation
as supplied by the clearing broker or banks through which the
transaction is effected. If there are no trades on the date of the
calculation due to operation of the daily price fluctuation limits or
due to a closing of the exchange on which the transaction is executed,
the contract will be valued at fair value as determined by the
Managing Owner. Interest, if any, shall accrue monthly.
Trading Profits (for purposes of calculating the Advisor's Incentive
Fee only) is defined as the sum of (A) the net of any profits and losses
realized on all trades closed out during a period, (B) the net of any unrealized
profits and losses on open positions as of the end of such period less the net
of any unrealized profits and losses on open positions as of the end of the
immediately preceding period and (C) the cumulative trading loss since the most
recent period for which an Incentive Fee was payable , minus (D) brokerage
commissions at the annual rate of 1.25% (rather than the full 6.5% annual rate)
of the Trust's month-end assets and the Advisor's Management Fee. Trading
Profits shall not include any interest income attributed to the Trust's assets
under the Advisor's management. Any trading losses from prior periods must be
recouped before Trading Profits can again be generated. Trading Profits
includes open trade equity which may, in fact, never be realized.
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If Trust assets allocated to the Advisor are reduced due to
redemptions during a period where a cumulative trading loss exists, the amount
of cumulative trading loss for the calculation of Trading Profits as of the date
of redemption shall be reduced in the same proportion that the aggregate number
of Units redeemed bears to the total number of Units outstanding immediately
prior to such redemption. Similarly, if Trust assets allocated to the Advisor
are reduced due to distributions or reallocations during a period where a
cumulative loss exists, the amount of trading loss for the calculation of
Trading Profits as of the end of that quarter shall be reduced in the same
proportion that the amount of net reduction bears to the amount of assets
immediately prior to such reduction. If Trust assets allocated to the Advisor
are reduced by redemptions, distributions or reallocations at any month-end
other than a calendar quarter end when Trading Profits exists, the Incentive Fee
accrued on the Trading Profits attributable to the amount so reduced ("Withdrawn
Profits") shall be paid to the Advisor within 10 business days after such
reduction in assets and the Withdrawn Profits shall not be included in Trading
Profits for the calculation of Incentive Fee payable to the Advisor at the end
of that calendar quarter.
In the event of the termination of this Agreement as of any date which
shall not be the end of a calendar quarter or month, the quarterly Incentive Fee
will be computed as if the effective date of termination were the last day of
the then current quarter and paid to the Advisor and the monthly Management Fee
shall be pro-rated to the effective date of termination.
Incentive Fees shall be paid within 10 business days after the end of
the quarter for which they are earned. For purposes of determining whether an
Incentive Fee is payable by Units which are redeemed other than at quarter end,
the dates of such redemptions shall be considered as if they were the last day
of the quarter.
If an Incentive Fee shall have been paid by the Trust to the Advisor
in respect of any calendar quarter and the Advisor shall incur subsequent losses
on the Trust's assets subject to its management, the Advisor shall nevertheless
be entitled to retain amounts previously paid to it in respect of Trading
Profits.
6. TERMS AND TERMINATION. This Agreement shall commence on the date
hereof, and unless sooner terminated, shall continue in effect until the close
of business on the last day of the 12th full calendar month following the
commencement of trading activities by the Trust. This Agreement shall
automatically renew on the same terms as set forth herein for three additional
12-month terms unless the Managing Owner shall give to the Advisor written
notice at least 45 days prior to the expiry of the then current 12-month period.
This Agreement shall terminate automatically in the event that the
Trust is terminated.
This Agreement may be terminated by the Trust at any time, upon 60
days' prior written notice to the Advisor. In addition, this Agreement may be
terminated at the election of the Trust at any time, upon written notice to the
Advisor in the event that: (A) the Net Asset Value of Trust funds allocated to
the Advisor's management decreases as of the close of trading on any business
day by more than 30% from the sum of the Net Asset Value of the Trust's funds
allocated to the Advisor on the date the Trust commenced trading plus the Net
Asset Value of any funds which
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may be allocated to the Advisor thereafter (after adding back all
redemptions, distributions and reallocations made to any additional trading
advisors in respect of such assets); (B) the Advisor is unable, to any
material extent, to use the Trading Programs, as the Trading Programs may be
refined or modified in the future in accordance with the terms of this
Agreement for the benefit of the Trust; (C) the Advisor's registration as a
commodity trading advisor under the CE Act, or membership as a commodity
trading advisor with NFA is revoked, suspended, terminated or not renewed;
(D) the Managing Owner determines in good faith that the Advisor has failed
to conform to (i) the Trust's trading policies or limitations, as they may be
revised or modified, or (ii) a Trading Program; (E) there is an unauthorized
assignment of this Agreement by the Advisor; (F) the Advisor dissolves,
merges or consolidates with another entity or sells a substantial portion of
its assets, any portion of the Trading Programs utilized by the Trust or its
business goodwill to any person or entity other than one controlled, directly
or indirectly, by Xxxx X. Xxxxx, in each instance without the consent of the
Managing Owner; (G) the Advisor becomes bankrupt or insolvent; (H) Xxxx X.
Xxxxx ceases to be a principal of the Advisor; or (I) the Managing Owner
determines in good faith that such termination is necessary for the
protection of the Trust.
In addition, the Advisor has the right to terminate this Agreement at
any time, upon written notice to the Trust in the event (i) of the receipt by
the Advisor of an opinion of independent counsel that solely by reason of the
Advisor's activities with respect to the Trust, the Advisor is required to
register as an investment adviser under the Investment Advisers Act of 1940;
(ii) that the registration of the Managing Owner as a commodity pool operator
under the CE Act, or its NFA membership as a commodity pool operator is revoked,
suspended, terminated or not renewed; (iii) that the Managing Owner elects
(pursuant to Section 1 of this Agreement) to have the Advisor use a different
trading program in the Advisor's management of Trust assets from that which the
Advisor is then using to manage such assets and the Advisor objects to using
such different trading program; (iv) that the Managing Owner overrides a trading
instruction of the Advisor pursuant to Section 1 of this Agreement for reasons
unrelated to a determination by the Managing Owner that the Advisor has violated
the Trust's trading policies or limitations; (v) that the Managing Owner imposes
additional trading limitation(s) pursuant to Section 1 of this Agreement which
the Advisor does not agree to follow in the Advisor's management of its
allocable share of Trust assets; (vi) there is an unauthorized assignment of
this Agreement by the Managing Owner of the Trust; or (vii) other good cause is
shown to which the written consent of the Managing Owner is obtained. The
Advisor may also terminate this Agreement on 60 days written notice to the
Managing Owner during any renewal term.
In the event that this Agreement is terminated pursuant to this
Section 6, the Advisor shall be entitled to the Incentive Fee, if any, which
shall be computed as if the effective date of termination was the last day of
the then current calendar quarter. If this Agreement is terminated on a day
other than the last day of a calendar month, the Management Fee described herein
shall be determined as if such date were the end of a month and such fee shall
be pro-rated based on the ratio of the number of trading days in the month
through the date of termination to the total number of trading days in the
month. The rights of the Advisor to fees earned through the date of expiration
or termination shall survive this Agreement until satisfied.
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In the event that JWH ceases to be the Trust's sole trading advisor,
the Managing Owner agrees that it shall cause the Trust to delete "JWH" from the
name of the Trust.
7. OTHER ACCOUNTS OF THE ADVISOR. The Advisor shall be free to
manage and trade accounts for other investors (including other public and
private commodity pools) during the term of this Agreement and to use the same
or other information and the Trading Programs utilized in the performance of
services for the Trust for such other accounts so long as the Advisor's ability
to carry out its obligations and duties to the Trust pursuant to this Agreement
is not materially impaired thereby. Furthermore, neither the Advisor nor any
principal, shareholder, director, officer, employee or agent of the Advisor
shall cause or permit the Advisor to engage in any business enterprise not
presently engaged in which is unrelated to the giving of commodity advice or the
operation of commodity pools if such other business might reasonably be expected
to have a material adverse effect on the Advisor's ability to perform its
obligations and duties to the Trust under this Agreement, unless it obtains the
prior written consent from the Managing Owner, which consent shall not be
unreasonably withheld. In addition, the Advisor, and its principals,
shareholders, partners, directors, officers, employees and agents, as
applicable, also will be permitted to trade in Commodity Interests for their own
accounts so long as the Advisor's ability to carry out its obligations and
duties to the Trust is not materially impaired thereby.
So long as the Advisor is performing services for the Trust, it agrees
that it will not accept additional capital for management in the Commodity
Interests markets if doing so would have a reasonable likelihood of resulting in
the Advisor having to modify materially the Trading Programs being used by the
Advisor for the Trust in a manner which might reasonably be expected to have a
material adverse effect on the Trust (without limiting the generality of the
foregoing, it is understood that this paragraph shall not prohibit the
acceptance of additional capital, which acceptance requires only routine
adjustments to trading patterns in order to comply with speculative position
limits or daily trading limits).
The Advisor agrees that, in the Advisor's management of accounts other
than the account of the Trust, the Advisor will not knowingly or deliberately
favor any other account managed or controlled by it or any of its principals or
affiliates (in whole or in part) over the Trust on an overall basis. The
preceding sentence shall not be interpreted to preclude (i) the Advisor from
charging another client fees which differ from the fees to be paid to the
Advisor hereunder, or (ii) an adjustment by the Advisor in the implementation of
any agreed upon trading program in accordance with the procedures set forth in
Section 1 hereof, which is undertaken by the Advisor in good faith in order to
accommodate additional accounts or adjustments deemed, in good faith, by the
Advisor to be appropriate to the management of a larger account. The Advisor,
upon request, shall provide the Managing Owner with an explanation of the
material differences, if any, in performance between the Trust and any other
comparable account for which the Advisor or any of its principals or affiliates
acts as a commodity trading advisor (in whole or in part).
Upon the reasonable request of the Managing Owner, the Advisor shall
provide the Managing Owner with such information as it reasonably may request
for the purpose of confirming that the Trust has been treated equitably with
respect to advice rendered during the term of this Agreement by the Advisor for
other accounts (including accounts of the Advisor or its principals,
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shareholders, directors, officers, employees, and agents) managed by the
Advisor, which the parties acknowledge to mean that the Managing Owner may
inspect all records of the Advisor related to such other accounts during normal
business hours upon its prior written request. The Advisor may, in its
discretion, withhold from any such report or inspection the name of the client
for whom any such account is maintained and, in any event, the Trust and the
Managing Owner shall keep all such information obtained by it from the Advisor
confidential.
8. SPECULATIVE POSITION LIMITS. The Advisor agrees that if its
trading recommendations are altered because of the potential application of
speculative position limits, the Advisor will modify its trading instructions to
the Trust and its other accounts in a good faith effort to achieve an equitable
treatment of all accounts; the Advisor will liquidate Commodity Interests
positions and/or limit the taking of new positions in all accounts it manages,
including the Trust, as nearly as possible in proportion to the assets available
for trading of the respective accounts to the extent necessary to comply with
applicable speculative position limits. The Advisor presently believes and
represents that its Trading Programs for the management of the Trust's account
can be implemented for the benefit of the Trust notwithstanding the possibility
that, from time to time, speculative position limits may become applicable.
9. BROKERAGE CONFIRMATIONS AND REPORTS. The Managing Owner will
instruct the Trust's commodity broker or brokers to furnish the Advisor with
copies of all trade confirmations and monthly trading statements relating to the
Trust's assets under the management of the Advisor. The Advisor will maintain
records and will monitor all open positions relating thereto. The Managing
Owner also will furnish the Advisor with a copy of all reports, including but
not limited to, monthly, quarterly and annual reports, sent to Unitholders, the
SEC, the CFTC and NFA.
10. THE ADVISOR'S REPRESENTATIONS AND WARRANTIES. The Advisor
represents and warrants that:
(a) it has full capacity and authority to enter into this
Agreement, and to provide the services required of it hereunder;
(b) it will not, by entering into this Agreement and by acting
as a commodity trading advisor to the Trust, (i) be required to take
any action contrary to its incorporation or partnership document (as
applicable), or any applicable statute, law or regulation of any
jurisdiction or (ii) breach or cause to be breached any undertaking,
agreement, contract, statute, rule or regulation to which it is a
party or by which it is bound which, in the case of (i) or (ii), would
materially limit or materially adversely affect the performance of its
duties under this Agreement;
(c) it is duly registered as a commodity trading advisor under
the CE Act and is a member of NFA as a commodity trading advisor, and
it will maintain and renew such registration and membership during the
term of this Agreement; and
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(d) it has provided the Trust with a copy of its most recent
Disclosure Document as required by Part 4 of the CFTC's regulations,
receipt of which is hereby acknowledged by the Trust and the Managing
Owner.
The within representations and warranties shall be continuing during
the term of this Agreement, and, if at any time, any event has occurred which
would make or tend to make any of the foregoing not true, the Advisor promptly
will notify the Trust in writing thereof.
11. THE MANAGING OWNER'S REPRESENTATIONS AND WARRANTIES. The
Managing Owner represents and warrants on behalf of the Trust and itself that:
(a) it has the capacity and authority to enter into this
Agreement;
(b) it will not, by acting as managing owner of the Trust, (i)
be required to take any action contrary to its incorporating documents
or any applicable statute, law or regulation of any jurisdiction, or
(ii) breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it or the Trust is a
party or by which it or the Trust is bound, which in the case of (i)
or (ii), would limit or materially affect the performance of its or
the Trust's duties under this Agreement; and
(c) it is duly registered as a commodity pool operator under the
CE Act and is a commodity pool operator member of NFA, and it will
maintain and renew such registration and membership during the term of
this Agreement.
The within representations and warranties shall be continuing during
the term of this Agreement, and, if at any time, any event has occurred which
would make or tend to make any of the foregoing not true, the Managing Owner
with respect to which such representation or warranty is no longer true promptly
will notify the Advisor in writing.
12. ACKNOWLEDGMENT. 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 Unitholder's personal property for the satisfaction of such obligation or
claim.
13. ASSIGNMENT. This Agreement may not be assigned by any party
without the express prior written consent of the other parties.
14. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and the successors and permitted assigns of
each of them, and no other person (except as otherwise provided herein) shall
have any right or obligation under this Agreement. The terms "successors" and
"assigns" shall not include any purchasers, as such, of Units.
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15. AMENDMENT OR MODIFICATION. This Agreement may not be amended or
modified except by the written consent of the parties. The Advisor shall
receive a copy of all proposed and final amendments and modifications to this
Agreement so long as it is an advisor to the Trust.
16. NOTICES. Except as otherwise provided herein, all notices
required to be delivered under this Agreement shall be in writing 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 and shall be delivered personally or by
registered mail, postage prepaid, return receipt requested, as follows (or to
such other address as the party entitled to notice shall hereafter designate by
written notice to the other parties):
If to the Trust:
JWH Global Portfolio Trust
c/o CIS Investments, Inc.
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: L. Xxxxxxx Xxxxxxxx
If to CISI:
CIS Investments, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: L. Xxxxxxx Xxxxxxxx
with a copy to:
Xxxxx Xxxxxx, Esq.
Xxxxxxx Xxxxxxxxxxxx
Xxxxxxx Office Center
00000 XxXxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
If to JWH:
Xxxx X. Xxxxx & Company, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
17. GOVERNING LAW. The parties agree that this Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois
without regard to principles of conflicts of laws thereof.
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18. SURVIVAL. The provisions of this Agreement shall survive the
termination of this Agreement with respect to any matter arising while this
Agreement was in effect.
19. PROMOTIONAL MATERIAL. The Advisor agrees that prior to using any
promotional literature in which reference to the Trust is made (other than a
simple statement to the effect that the Advisor is the trading advisor to the
Trust or solely in the context of the preparation of required performance tables
and notes thereto and descriptions thereof), it shall furnish a copy of such
information to the Managing Owner and will not make use of any literature
containing references to the Trust to which the Managing Owner reasonably
objects, except as otherwise required by law or regulation. The Trust and the
Managing Owner shall make no use of any promotional or other literature
referring to the Advisor without obtaining the prior written approval of the
Advisor.
20. NO WAIVER. No failure or delay on the part of any party hereto
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver granted hereunder must be in writing
and shall be valid only in the specific instance in which given.
21. HEADINGS. Heading to Sections herein are for the convenience of
the parties only, and are not intended to be or to affect the meaning or
interpretation of this Agreement.
22. COMPLETE AGREEMENT. Except as otherwise provided herein, this
Agreement constitutes the entire agreement between the parties with respect to
the matters referred to herein, and no other agreement, verbal or otherwise,
shall be binding upon the parties hereto.
23. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one original instrument.
24. ACKNOWLEDGMENTS OF THE TRUST AND MANAGING OWNER. The Trust and
the Managing Owner acknowledge that they have received the commodity trading
advisor Disclosure Document of the Advisor. The Managing Owner further
acknowledges that the Advisor uses different proprietary trading programs and
that these different trading programs may achieve different trading results.
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IN WITNESS WHEREOF, this Agreement has been executed for and on behalf
of the undersigned as of the day and year first above written.
JWH GLOBAL PORTFOLIO TRUST
By: CIS Investments, Inc.,
Managing Owner
By:
--------------------------------
L. Xxxxxxx Xxxxxxxx
Vice President
CIS INVESTMENTS, INC.
By:
--------------------------------
L. Xxxxxxx Xxxxxxxx
Vice President
XXXX X. XXXXX & COMPANY, INC.
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
AGREED TO AND ACKNOWLEDGED
AS TO SECTION 4:
CARGILL INVESTOR SERVICES, INC.
By:
-------------------------------
L. Xxxxxxx Xxxxxxxx
Vice President
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