EXHIBIT 10.03 (amended)
FORM OF
TRADING ADVISORY AGREEMENT
This trading advisory agreement ("Agreement"), is made and entered
into effective as of the __ day of _____, 200__, by and among MAN-AHL 130, LLC,
a Delaware limited liability company (the "Fund"), MAN INVESTMENTS (USA) CORP.,
a Delaware (USA) corporation (the "Managing Member") and MAN-AHL (USA) LIMITED,
a United Kingdom corporation (the "Trading Advisor"). Capitalized and other
defined terms used in this Agreement and not otherwise expressly defined herein
shall have the same respective meanings as are set forth in the current
prospectus of the Fund (the "Prospectus").
WITNESSETH:
WHEREAS, the Fund seeks high medium term capital growth, independent
of the movement of the stock and bond markets, through the speculative trading,
directly and indirectly, in commodities, futures contracts, forward contracts,
swap transactions, options on the foregoing, other derivative instruments and
hybrid instruments, and other instruments and investments, in each case of every
kind and character, traded on United States and non-United States exchanges and
markets (including the interbank and over-the-counter markets) (sometimes
collectively referred to as "futures"), and
WHEREAS, the Managing Member desires to appoint the Trading Advisor as
the trading advisor of the Fund, and the Trading Advisor desires to accept such
appointment as the trading advisor of the Fund; and
WHEREAS, the Fund, the Managing Member and the Trading Advisor wish to
enter into this Agreement in order to set forth the terms and conditions upon
which the Trading Advisor will implement its trading strategies on behalf of the
Fund.
NOW, THEREFORE, in consideration of the premises and mutual promises
and agreements set forth herein, the parties hereto do hereby agree as follows:
1. APPOINTMENT; DUTIES OF THE TRADING ADVISOR
(a) The Managing Member hereby appoints the Trading Advisor as the
trading advisor of the Fund, and the Trading Advisor accepts such appointment,
as the trading advisor of the Fund.
(b) For the period and on the terms and conditions set forth in this
Agreement, the Trading Advisor shall have sole authority and responsibility for
investing and reinvesting the Fund's assets allocated to the Trading Advisor
using the Trading Advisor's proprietary trading strategies as described in the
Prospectus. In addition, for the period and on the terms and conditions set
forth in this Agreement, the Managing Member hereby constitutes, appoints and
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authorizes the Trading Advisor as the Fund's true and lawful agent and
attorney-in-fact, in the Fund's name, place and stead to trade, buy, sell,
spread, swap, exchange or otherwise trade (including short sales), deal in,
acquire, hold or dispose of "futures" on U.S. and non-U.S. exchanges and markets
(including the interbank and over-the-counter markets) for the account and risk
of the Fund.
(c) The Trading Advisor agrees to make all material disclosures to the
Fund and the Managing Member regarding itself and its members, managers,
partners, officers, directors, shareholders, employees, affiliates or any person
who controls any of the foregoing ("Principals and Affiliates"), their
investment performance and general investment methods, the investment
performance of their customer accounts (but not the identities of customers) and
otherwise as are required in the reasonable judgment of the Fund or the Managing
Member to be made in any filings required by any governmental body or by any
applicable law, regulation, rule or order or as are deemed necessary by the Fund
or the Managing Member to enable it to monitor the performance of the Trading
Advisor. Each party to this Agreement agrees to maintain in strict confidence
the terms of this Agreement and any and all information, materials or other
documents regarding the other parties which it obtains pursuant to or in
connection with this Agreement, and agrees that it shall not disclose any such
documents, material or other information to any person other than each party's
attorneys and accountants unless required to do so by law, regulation, the
request of any regulatory or self-regulatory authority or valid legal process.
The Fund and the Managing Member acknowledge that the trading advice provided by
the Trading Advisor constitutes proprietary information of the Trading Advisor,
and the Fund and the Managing Member shall not make use of such advice in any
manner or disclose such advice to any person or entity unless required to do so
by law, regulation, the request of any regulatory or self-regulatory authority
or valid legal process. 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.
(d) The Trading Advisor may refuse any additional allocation of assets
from the Managing Member for any reason. However, the Trading Advisor
understands and agrees that the Managing Member may at any time remove all of
the assets of the Fund from the management of the Trading Advisor and may
require the Trading Advisor, to the extent possible, to liquidate existing
positions in an orderly manner as soon as practicable.
2. COMPENSATION
(a) Upon the close of business on the last business day of every
calendar month, the Trading Advisor shall be paid a monthly management fee,
payable in arrears, in an amount equal to 1/6th of 1.0% of the Net Asset Value
of the Fund whether or not the Fund is profitable (approximately 2.0% annually).
For purposes of calculating the management fee, Net Asset Value of the Fund is
determined before reduction for the Trading Advisor's management and incentive
fees and fees paid by the Fund to the Managing Member and before giving effect
to any subscriptions, distributions or redemptions accrued or paid as of such
calendar month-end. In the event that a Member redeems some or all of its Units
or the Fund is dissolved or terminated as of any date other than the last
business day of a calendar month, the management
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fee shall be pro-rated based on the ratio that the number of days in the
calendar month through the date of such event bears to the total number of days
in the calendar month.
(b) Upon the close of business on the last business day of every
calendar month, the Fund shall pay the Trading Advisor an incentive fee equal to
20.0% of the Net New Appreciation (as defined below), if any, achieved by the
Fund as of the end of such calendar month. The Trading Advisor shall be entitled
to retain all incentive fees previously paid to it even if subsequent losses are
incurred. However, no subsequent incentive fees shall be paid to the Trading
Advisor until the Trading Advisor has again achieved Net New Appreciation for
the Fund.
(c) Net New Appreciation achieved during a calendar month shall mean
the excess, if any, of (A) the Net Asset Value of the Fund as of the end of the
calendar month (without reduction for any incentive fees accrued or paid to the
Trading Advisor for the calendar month or for any redemptions or distributions
effected during or as of the end of such calendar month and without increase for
any additional capital contributions effected during or as of the end of such
calendar month) over (B) the Net Asset Value of the Fund as of the end of the
most recent prior calendar month for which an incentive fee was accrued or paid
with clause (B) reduced by the amount of the incentive fees accrued or paid for
such prior calendar month and also reduced by any redemptions or distributions,
and increased by any contributions, effected as of or subsequent to the end of
such prior calendar month through the first day of the calendar month referred
to in clause (A), above. For purposes of calculating the first incentive fee
payable to the Trading Advisor, clause (B) means the initial Net Asset Value of
the Fund on the day the Fund commences trading activities. For purposes of
calculating Net New Appreciation, taxes and extraordinary expenses shall be
excluded.
3. TERM AND TERMINATION
(a) Term. The term of this Agreement shall commence upon the execution
of this Agreement and shall terminate as hereinafter provided.
(b) Termination.
(i) This Agreement shall terminate automatically with respect to the
Fund in the event that the Fund is dissolved or terminated.
(ii) This Agreement may be terminated at any time in its entirety upon
the consent of all the parties hereto.
(iii) This Agreement may be terminated by the Fund or the Trading
Advisor upon 90 days' prior notice to the Fund and the Managing Member or
the Trading Advisor, as the case may be.
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(c) The rights of the Trading Advisor to receive fees earned through
the date of termination of this Agreement shall survive any such termination of
this Agreement until satisfied.
4. STANDARD OF LIABILITY AND INDEMNITY
(a) Standard of Liability. The Trading Advisor shall not be liable to
the Fund, the Managing Member or their respective Principals and Affiliates or
their successors or assigns for any act or failure to act taken or omitted by
the Trading Advisor in good faith in a manner reasonably believed to be in or
not opposed to the best interests of the Fund if such act or failure to act did
not constitute negligence, misconduct or a breach of this Agreement.
(b) Indemnity. (i) The Fund shall indemnify and hold harmless the
Trading Advisor and 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 that the Trading Advisor is or was a trading
advisor to the Fund, unless any such Losses are the direct result of the Trading
Advisor's failure to meet the standard of liability applicable to it under
SECTION 4(A).
(ii) The Trading Advisor shall indemnify and hold harmless the Fund
and the Managing Member from and against any and all Losses to which they
may become subject, if any such Losses are the direct result of the Trading
Advisor's failure to meet the standard of liability applicable to it under
SECTION 4(A).
(iii) The Trading Advisor shall not be indemnified arising from or out
of an alleged violation of federal or state securities laws unless (1)
there has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the particular
indemnitee, or (2) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to the particular
indemnitee, or (3) a court of competent jurisdiction approves a settlement
of the claims against a particular indemnitee and finds that
indemnification of the settlement and related costs should be made.
In the case of subparagraph (3) above, the party seeking
indemnification shall place before the court the position of the Securities and
Exchange Commission, the California Department of Corporations, the
Massachusetts Securities Division, the Pennsylvania Securities Commission, the
Tennessee Securities Division, the Texas Securities Board and any other state or
applicable regulatory authority with respect to the issue of indemnification for
securities law violations.
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(c) Promptly after receipt by any of the indemnified parties under
this Agreement of notice of any action, arbitration, claim, demand, dispute,
lawsuit or other proceeding (each a "Proceeding"), the party seeking
indemnification (the "Indemnitee") shall notify the party from which
indemnification is sought (the "Indemnitor") in writing of the commencement
thereof if a claim with respect thereof is to be made under this Agreement. To
the extent that the Indemnitor has actual knowledge of the commencement of such
Proceeding, the failure to notify the Indemnitor shall not relieve such
Indemnitor from any indemnification liability which it may have to such
Indemnitee pursuant to this SECTION 4, and the omission to notify the Indemnitor
shall not relieve the Indemnitor from any obligation or liability which it may
have to any such Indemnitee otherwise than under this SECTION 4. The Indemnitor
shall be entitled to participate in the defense of any such Proceeding and to
assume the defense thereof with the assistance of counsel reasonably
satisfactory to the Indemnitee. In any such Proceeding, the Indemnitee shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the Indemnitee's own expense unless (i) otherwise agreed by
the Indemnitor and Indemnitee or (ii) the named parties to any such Proceeding
(including any impleaded parties) include both the Indemnitor and the
Indemnitee, and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them or the
existence of different or additional defenses (it being understood, however,
that the Indemnitor shall not be liable for legal fees or other expenses of more
than one separate firm of attorneys for all such Indemnitees, which firm shall
be designated in writing by such Indemnitees and be reasonably acceptable to the
Indemnitor). The Indemnitee will cooperate with the Indemnitor in connection
with any such Proceeding and shall make all personnel, books and records
relevant to the Proceeding available to the Indemnitor and grant such
authorizations or powers of attorney to the agents, representatives and counsel
of the Indemnitor as the Indemnitor may reasonably consider desirable in
connection with the defense of any such Proceeding.
(d) An Indemnitor shall not be liable under this SECTION 4 for any
settlement of any Proceeding effected without its consent with respect to which
indemnity may be sought hereunder.
(e) Any dispute as to whether a person or entity is entitled to
indemnification under SECTION 4 of this Agreement shall be determined by binding
arbitration in accordance with SECTION 17 of this Agreement.
(f) The provisions of this SECTION 4 shall survive the termination of
this Agreement.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) The Fund and the Managing Member represent, warrant and covenant
to the Trading Advisor with respect to the Fund as follows:
(i) it is duly organized and validly existing and in good standing
under the laws of the jurisdiction of its formation, with 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 in the
Prospectus;
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(ii) this Agreement has been duly and validly authorized, executed and
delivered by it and is a valid and binding agreement of it enforceable in
accordance with its terms;
(iii) the performance by it of its obligations under this Agreement
will not conflict with or result in a breach of any of the terms or
provisions of, or in the imposition of any lien, charge or encumbrance upon
any of the property or assets of it pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of the property
or assets of it is subject, nor will any such action or performance result
in a violation of the provisions of its organizational documents or any
law, statute, order, rule or regulation of any court or governmental
authority or body having jurisdiction over it;
(iv) it will comply in all material respects with all laws, rules,
regulations and orders of any governmental agency or self-regulatory
organization applicable to its business, this Agreement and the matters to
be discharged by it with respect to the offering of the Shares; and
(b) The Trading Advisor represents, warrants and covenants to the Fund
and the Managing Member as follows:
(i) it is duly organized and validly existing and in good standing
under the laws of the jurisdiction of its formation, with 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 in the
Prospectus;
(ii) 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;
(iii) the performance by the Trading Advisor of its obligations under
this Agreement will not conflict with or result in a breach of any of the
terms or provisions of, or in the imposition of any lien, charge or
encumbrance upon any of the property or assets of the Trading Advisor
pursuant to the terms of, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Trading Advisor is
a party or by which the Trading Advisor is bound or to which any of the
property or assets of the Trading Advisor is subject, nor will any such
action or performance result in a violation of the provisions of its
organizational documents or any law, statute, order, rule or regulation of
any court or governmental authority or body having jurisdiction over the
Trading Advisor; and
(iv) it will comply in all material respects with all laws, rules,
regulations and orders of any governmental agency or self-regulatory
organization applicable to its business and this Agreement.
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(c) The Managing Member represents, warrants and covenants to the
Trading Advisor as follows:
(i) it is duly organized and validly existing and in good standing
under the laws of the jurisdiction of its formation, with 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 in the
Prospectus;
(ii) this Agreement has been duly and validly authorized, executed and
delivered by the Managing Member and is a valid and binding agreement of
the Managing Member enforceable in accordance with its terms;
(iii) the performance by the Managing Member of its obligations under
this Agreement will not conflict with or result in a breach of any of the
terms or provisions of, or in the imposition of any lien, charge or
encumbrance upon any of the property or assets of the Managing Member
pursuant to the terms of, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Managing Member is
a party or by which the Managing Member is bound or to which any of the
property or assets of the Managing Member is subject, nor will any such
action or performance result in a violation of the provisions of its
organizational documents or any law, statute, order, rule or regulation of
any court or governmental authority or body having jurisdiction over the
Managing Member; and
(iv) it will comply in all material respects with all laws, rules,
regulations and orders of any governmental agency or self-regulatory
organization applicable to its business and this Agreement.
(d) Each party hereto will promptly notify the other parties of the
commencement of any Proceeding involving it or its Principals and Affiliates,
whether or not any such Proceeding also involves any other party hereto.
(e) All representations, warranties and covenants contained in this
Agreement shall be continuing during the term of this Agreement and shall
survive the termination of this Agreement with respect to any matter arising
while this Agreement was in effect. Each party hereby agrees that as of the date
of this Agreement it is, and during its term shall be, in compliance with its
representations, warranties and covenants herein contained. In addition, if at
any time any event occurs which would make, or tend to make, any of such
representations, warranties or covenants not true the affected party will use
its best efforts to promptly notify the other parties of such facts in the
manner provided below. All representations, warranties and covenants herein
contained shall inure to the benefit of the parties to whom it is addressed and
their respective heirs, executors, administrators, legal representatives,
successors and permitted assigns.
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6. COMPLETE AGREEMENT
This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof, and no other agreement, verbal
or otherwise, shall be binding on the parties hereto.
7. ASSIGNMENT
This Agreement may not be assigned by a party without the express
written consent of the other parties and any assignment without the consent of
all the parties hereto shall be null and void.
8. AMENDMENT
This Agreement may not be amended or modified except by the written
consent of all of the parties hereto.
9. SUCCESSORS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their successors and permitted assigns, and except as otherwise
provided in SECTION 4 and SECTION 5, above, no other person shall have any right
or obligation under this Agreement.
10. 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, by facsimile or by 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 Fund, to it at:
c/o Man Investments (USA) Corp.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000 XXX
Attn: Legal and Compliance
Fax No.: 0-000-000-0000
If to the Managing Member, to it at:
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000 XXX
Attn: Legal and Compliance
Fax. No.: 0-000-000-0000
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If to the Trading Advisor, to it at:
Xxxxx Xxxx
Xxxxx Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attn: Managing Director
Fax No.: 000-00-000-000-0000
11. PARTIES INDEPENDENT; OTHER ACCOUNTS AND ACTIVITIES
(a) Each of the parties hereto shall for all purposes herein be deemed
to be an independent contractor and, except as otherwise expressly provided
herein, shall have no authority to act for or represent any other party in any
way or otherwise to be deemed an agent, joint venturer, partner or sponsor of
any other party.
(b) The Trading Advisor's present business includes managing and
advising its assets, the assets of its Principals and Affiliates and
discretionary client accounts in the purchase and sale of futures and securities
and it will be managing and advising such accounts and assets for other clients
during the same period that it is managing and advising the Fund's account. The
services to be 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 futures and securities trading accounts for
other persons during the term of this Agreement and to use the same or different
information and investment methodologies which it obtains, produces or utilizes
in the performance of services for the Fund. The parties hereto acknowledge that
performance results obtained for the Fund's account may differ from performance
results obtained for other accounts under the Trading Advisor's management and
that the Trading Advisor may have an incentive to favor certain accounts over
the Fund's account.
12. 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.
13. HEADINGS
Headings 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.
14. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument. Signatures on this Agreement may be communicated by
facsimile transmission and shall be binding upon the parties so transmitting
their signatures. Counterparts with original signatures shall be provided to the
other parties following the applicable facsimile transmission; provided,
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that the failure to provide the original counterpart shall have no effect on the
validity or the binding nature of this Agreement.
15. WAIVER OF BREACH; CURE 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 a 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. In the event that a party
becomes aware that it is in breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement, the affected party will use
its best efforts to promptly take such actions as it deems necessary, in its
sole discretion, to cure such breach.
16. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of England without giving effect to the principles of conflicts of
laws.
17. 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, USA, unless otherwise agreed
to by the parties hereto, and in accordance with the rules then obtaining of the
National Futures Association, or if no such rule is in effect or if jurisdiction
is declined, then in accordance with the rules then obtaining of the American
Arbitration Association; provided, however, that the arbitrator(s) shall be
knowledgeable in industry standards and practices and the matters giving rise to
the dispute, that the arbitrator(s) shall not have the power and authority to
award punitive damages, that 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 that the arbitrator(s) shall state their 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.
18. CONSENT TO JURISDICTION
Except as otherwise provided in SECTION 17, above, each party hereto
expressly and irrevocably agrees: (a) that it waives any objection, and
specifically consents, to venue in the courts located in London, England, 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 in any manner permitted by applicable rules of civil
procedure or rules of the courts of London, England. In addition each party
hereto expressly and irrevocably waives, in respect of any action brought in any
court located in London, England or any resulting judgment, any objection, and
hereby specifically consents, to the personal and subject matter jurisdiction of
any such court, and agrees not to seek to change the situs of such action or to
assert that any
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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.
19. ACKNOWLEDGMENT OF TRADING ADVISOR'S DISCLOSURE DOCUMENT
The Managing Member on behalf of the Fund hereby acknowledges receipt
of the Trading Advisor's Disclosure Document, dated as of June 1, 2006.
IN WITNESS WHEREOF, this Agreement has been executed and delivered for
and on behalf of the undersigned as of the day and year first above written.
MAN-AHL 130, LLC.
By: Man Investments (USA) Corp.
Its Managing Member
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
MAN INVESTMENTS (USA) CORP.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
MAN-AHL (USA) LIMITED
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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