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TRADING MANAGER AGREEMENT
This Agreement made as of the 1st day of January, 1996 by and between THE
FUTURE FUND L.P. (the "Fund") and XXXXXXX ASSET MANAGEMENT, INC. (the "Trading
Manager").
W I T N E S S E T H:
WHEREAS, the Fund is a limited partnership engaging in the speculative
trading of Commodity Interests (as hereinafter defined), implementing a
multi-advisor strategy under the direction of the Trading Manager;
WHEREAS, E.D. & F. Man International, Inc. (the "Broker") has been
selected as the commodity broker, and an affiliate as forward dealer, for the
Fund;
WHEREAS, prior to January 1, 1996 another entity has acted as trading
manager for the Fund, which role the Trading Manager will assume as of January
1, 1996, upon the resignation of such other entity; and
WHEREAS, the parties hereto wish to enter into this Agreement to, among
other things, set forth the terms and conditions upon which the Trading Manager,
which is also the Fund's general partner, will manage the Fund's trading through
retaining, and allocating and reallocating, on a discretionary basis, the assets
of the Fund among various trading advisors (the "Trading Advisors").
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
1. Duties and Status of the Trading Manager.
The Trading Manager shall perform trading management services for the Fund
as follows:
(a) The Trading Manager shall act as a manager of the Fund's trading in
Commodity Interests (as defined in Section 18 hereof), subject to the terms and
conditions of this Agreement, and shall have the duty and responsibility to
select, hire, monitor, replace and compensate the Trading Advisors, which will
have limited powers of attorney to trade Commodity Interests on behalf of the
Fund. The Trading Manager shall allocate and reallocate assets among the
Trading Advisors, terminate Trading Advisors and engage additional or
replacement Trading Advisors, as the Trading Manager may deem to be in the best
interests of the Fund. The Trading Advisors shall all be unaffiliated with the
Trading
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Manager, but this requirement shall not prevent the Trading Manager from
selecting Trading Advisors for the Fund which also trade for other accounts
sponsored by the Trading Manager.
(b) The Trading Manager will, through opening managed accounts with
Trading Advisors, invest the Fund's assets from time to time with the Trading
Advisors. The Trading Manager need not keep all the Fund's assets so invested
at all times.
(c) The Trading Manager shall monitor the speculative position limits
applicable to the Fund so as to prevent the Fund from exceeding such limits as a
result of trades ordered by the Trading Advisors.
(d) The Trading Manager shall instruct all or certain Trading Advisors to
liquidate open positions in order to provide funds for withdrawals and payment
of the Fund's expenses, including without limitation the compensation specified
in Section 9 hereof. The decisions as to which positions are to be liquidated,
however, shall be made by each Trading Advisor so instructed.
(e) The Trading Manager shall not itself trade any assets of the Fund
directly, but shall instead retain professional Trading Advisors to do so.
(f) The Trading Manager shall monitor the performance of each Trading
Advisor selected on behalf of the Fund.
2. Standard of Liability; Trading Manager's Limited Responsibility
Regarding Trading Advisors.
Except as otherwise provided in this Agreement, the Trading Manager shall
bear no liability to the Fund or to any related party for any loss suffered by
any of them relating to this Agreement and the transactions contemplated hereby,
provided such loss did not arise out of any action or inaction of the Trading
Manager which would subject the Trading Manger, as the Fund's general partner,
to liability pursuant to the terms of the Fund's Limited Partnership Agreement.
The Fund acknowledges and agrees that the Trading Manager's responsibility
in terms of investigating Trading Advisors being considered for the Fund shall
be limited by the foregoing standard of liability and to reviewing the
information and material furnished to the Trading Manager by such Trading
Advisors. The Trading Manager shall in no respects be responsible for the
accuracy of such information or material or obligated to undertake any "due
diligence" examination or review of any Trading Advisor additional to that
effected pursuant to the Trading Manager's standard practice. The Fund
specifically recognizes that while the Trading Manager will use reasonable
efforts to select the best available Trading Advisors (having in mind the fee
structure of the Fund), the Trading Manager is in no position to
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assume, and does not assume, any responsibility or liability for the actions or
omissions of the Trading Advisors so selected or for the accuracy of the
disclosures furnished by them.
3. Status of the Trading Manager, the Fund
and the Trading Advisors.
The Fund and the Trading Manager each acknowledges that the trading
instructions, methods and systems of the Trading Manager and Trading Advisors
are the sole and exclusive property of the Trading Manager and the Trading
Advisors, respectively; the Fund further agrees that it will keep confidential
and will not disseminate such instructions, methods or systems.
4. Custody of the Fund's Assets.
The Fund's assets shall be maintained, subject to applicable regulatory
requirements, in such form, and with such depositories, as may be agreed to by
the Fund and the Trading Manager. The Trading Manager agrees and acknowledges
that it is intended that the assets of the Fund shall be held to the maximum
practicable extent at the Broker, one or more of its affiliates or in bank
accounts established by them.
5. Clearing of Futures Trades.
The Trading Manager agrees that all futures trading transactions for the
Fund hereunder shall be both executed and cleared to the maximum practicable
extent through the Broker.
6. Placement of Forward Trades.
The Trading Manager agrees that the Fund will execute its forward trades
hereunder to the maximum practicable extent through affiliates of the Broker,
provided that the contract prices so obtained are generally competitive.
The Fund acknowledges that, as is customary in the industry, "bid-ask"
spreads will be included in the prices quoted to the Fund on forward contracts,
in which an affiliate of the Trading Manager shall deal with the Fund on a
principal-to-principal basis.
7. Contracts with the Trading Advisors.
Attached hereto as Exhibit A is the standard form of Management Contract
which the Trading Manager proposes to use as the basis for negotiating final
agreements with the Trading Advisors. The Fund hereby specifically authorizes
the Trading Manager to enter into Management Contracts in the general form of
such Management Contract, with such changes as the Trading Manager may deem
necessary or advisable.
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8. Contracts with Commodity Brokers and Forward Dealers.
In the event that a Trading Advisor wishes to maintain a futures or forward
trading account for the Fund at a brokerage house or forward dealer other than
the Broker or one of its affiliates, such request must receive the prior written
approval of the Trading Manager.
9. Compensation.
The Fund will compensate the Trading Manager for its services to the Fund.
The Trading Manager in turn, and not the Fund, will compensate each Trading
Advisor at the rates negotiated at arm's-length on behalf of the Fund by the
Trading Manager.
(a) Management Fee. The Trading Manager shall receive a monthly
management fee equal to 0.333 of 1% of the Fund's net asset value (a 4% annual
rate). For purposes of calculating the management fee, Net Asset Value shall be
determined before reduction for the management fees or incentive fees, if any,
accrued or payable with respect to the net assets of the Fund as of such
month-end, and before giving effect to any distributions and redemptions paid or
payable at such month-end.
(b) Incentive Fee. The Trading Manager shall receive a quarterly
incentive fee equal to 20% of any new trading profit recognized with respect to
the assets of the Fund allocated to each Trading Advisor as of the end of each
calendar quarter-end (including partial quarters). Trading Profit equals the net
realized gains and losses from closed futures transactions during a calendar
quarter, plus or minus the change from the beginning to the end of such calendar
quarter in unrealized profit or loss on open futures positions, minus the
Trading Advisor's share of the brokerage commissions paid or accrued by the
Fund, minus the Trading Manager's management fee payable as of the end of such
quarter. New Trading Profit equals cumulative Trading Profit in excess of the
highest cumulative level of Trading Profit as of the most recent calendar
quarter-end as of which there existed an all-time quarter-end high in Trading
Profit (the "High Water Xxxx of Profit"), or if New Trading Profit had never
existed as of a calendar quarter-end, from the commencement of each Trading
Advisor's management of assets for the Fund. Redemption of Units or
reallocations of assets from each Trading Advisor will result in a proportional
reduction in any short-fall between the High Water Xxxx of Profit and the
current level of cumulative Trading Profit as of the date of redemption. If any
redemption or reallocation of the Fund's assets allocated to each Trading
Advisor occurs as of any date which is not the end of a calendar quarter, a
proportional incentive fee, if accrued, will be charged as if such redemption or
reallocation occurred as of the end of a quarter and the incentive fee will be
paid to the Trading Manager.
In the event that redemptions are made from the Fund, the Trading Manager
shall be free to allocate the amounts to be paid out as redemptions (but not as
distributions or
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expense payments which will be allocated pro rata among the Trading Advisors)
among the Trading Advisors in such manner as the Trading Manager may deem
appropriate. The Fund acknowledges that the manner in which the Trading Manager
allocates such redemptions will affect the incentive fees payable by the Fund.
The Fund also acknowledges that, irrespective of any redemptions, the Trading
Manager may allocate assets away from any one or more Trading Advisors to the
management of other Trading Advisors and that such allocations and reallocations
may affect the incentive fees payable by the Fund.
When Fund assets are allocated to an additional or replacement Trading
Advisor, any loss carryforwards applicable to the trading of the Trading Advisor
from which assets are allocated will be proportionally reduced and any accrued
incentive fees proportionately paid, and the additional or replacement Trading
Advisor will calculate trading profit for purposes of determining its incentive
fee from the date on which it begins managing assets for the Fund, irrespective
of prior losses.
(c) Payment of Fees. All fees shall be paid within ten (10) business
days after the end of each period for which they are payable.
The Trading Manager is herewith expressly authorized to deduct any amounts
due to Broker or its affiliates or a Trading Advisor directly from the Fund.
(d) Interest Income. All interest income actually earned on the Fund's
assets will be paid to it.
10. Net Asset Value.
The Fund's Net Asset Value shall be determined in accordance with the
Trading Manager's standard practice. The Trading Manager may determine, in its
good faith judgment, not to value contracts which could not be liquidated or
whose value is uncertain on the date of determination. In addition, the Trading
Manager may, in its good faith judgment, establish reserves for accrued or
contingent liabilities.
The Trading Manager makes no representation concerning the accuracy of the
information furnished to the Trading Manager by persons other than the Trading
Manager's affiliates concerning the value of the Fund's outstanding positions.
The Trading Manager assumes no responsibility or liability concerning the
valuation of the assets of the Fund held at brokers or dealers other than the
Trading Manager's affiliates, other than to make such valuations in good faith.
The Trading Manager shall monitor the Net Asset Value of the Fund on a
daily basis based on the information reasonably available to the Trading
Manager.
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The Trading Manager makes no guarantee as to the maximum loss which the
Fund may incur.
11. Multi-Advisor Strategy.
The Trading Manager acknowledges and agrees that it intends for the Fund's
assets to be managed pursuant to a multi-advisor strategy. Accordingly, the
Trading Manager undertakes that there shall at all times be three or more
Trading Advisors managing assets for the Fund.
12. Reports.
The Trading Manager will use best efforts to ensure that the information
furnished in the reports given to the Fund is accurate in all material respects,
but shall not be responsible for the accuracy of any such information unless an
inaccuracy arises through action or inaction by the Trading Manager which would
subject the Trading Manager to liability pursuant to the terms of the Fund's
Limited Partnership Agreement.
The Trading Manager will make its senior officers available to discuss the
Fund's performance at such time or times as the Fund may reasonably request.
13. Conflicts of Interest.
The Fund hereby acknowledges and consents to the following potential and
actual conflicts of interest relating to the services to be performed for the
Fund hereunder.
(a) Different clients of the Trading Manager pay different prices for the
Trading Manager's services.
(b) The Trading Manager is involved in selecting Trading Advisors for a
large number of different funds, including funds in which officers of the
Trading Manager and its affiliates have a personal investment. Consequently, the
Trading Manager may have a conflict of interest in recommending the Trading
Advisors for the Fund.
(c) The Trading Manager is also general partner of the Fund, and this
Agreement has not been negotiated at arm's-length.
The Fund hereby agrees to and acknowledges the foregoing conflicts of
interest; and the Fund hereby gives informed consent to each of such conflicts.
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14. Term.
This Agreement shall expire as of January 1, 1997.
15. Termination.
Either the Fund or the Trading Manager may, in its discretion, terminate
this Agreement upon thirty (30) calendar days' notice to the other party.
16. Representations and Warranties of the Trading Manager.
The Trading Manager represents and warrants to the Fund, as follows:
(a) The Trading Manager is a corporation duly organized and validly
existing under the laws of the State of Delaware, and is qualified to do
business and in good standing in the State of Illinois, the only other
jurisdiction in which the nature or conduct of its business requires such
qualification and the failure to so qualify would materially adversely affect
the Trading Manager. The Trading Manager has full corporate power and authority
to conduct its business and perform its obligations under this Agreement.
(b) This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Trading Manager and is a valid and binding agreement
of the Trading Manager enforceable in accordance with its terms.
(c) The execution and delivery of this Agreement, the incurrence of the
obligations set forth in this Agreement and the consummation of the transactions
contemplated herein will not violate, or constitute a breach of, or default
under, the Certificate of Incorporation or By-Laws of the Trading Manager or of
any order, rule, law or regulation binding on the Trading Manager of any court
or any governmental body or administrative agency or panel or self-regulatory
organization having jurisdiction over the Trading Manager or any agreement or
instrument binding upon the Trading Manager.
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(d) The Trading Manager has all federal and state governmental, regulatory
and exchange licenses and approvals and has effected all filings and
registrations with federal and state governmental and regulatory agencies
required to conduct its business and to perform its obligations under this
Agreement.
17. Indemnification.
The Fund shall, under this Agreement, indemnify, defend and hold harmless
the Trading Manager, its respective affiliates and its directors, shareholders,
employees, officers, agents and controlling persons to the same extent as the
Fund agrees to indemnify, defend and hold harmless the Trading Manager, as the
general partner of the Fund, under the terms of the Fund's Limited Partnership
Agreement.
The Trading Manager agrees to indemnify, defend and hold harmless the Fund
from and against all losses suffered by any of them relating to this Agreement
and the transactions contemplated hereby, arising out of (i) any representation
or warranty of the Trading Manager made herein being untrue or (ii)the action
or inaction of the Trading Manager constituting negligence, bad faith,
misconduct or a material breach of this Agreement.
The foregoing agreements of indemnity shall be in addition to, and shall in
no respect limit or restrict, any other remedies which may be available to an
indemnified party.
18. "Commodity Interests" Defined.
The Trading Manager has been authorized hereby (among other things) to
manage the Fund's trading in "commodity interests." The Fund agrees and
acknowledges that this term is intended to be broadly construed so as to give
the Trading Manager maximum flexibility in selecting Trading Advisors and
strategies. "Commodity interests" shall include, without limitation, futures
contracts, forward contracts, options on futures and forward contracts, "hybrid"
instruments, swaps, exchange-for-physical transactions, arbitrage strategies,
spot and cash market trading and over-the-counter transactions in all manner of
commodities, currencies, and interest-rate instruments. A Trading Advisor may
take delivery of commodities under commodity interest contracts held for the
Fund, in the Trading Advisor's sole discretion.
19. Amendment.
This Agreement may not be amended except by the written consent of both of
the parties hereto.
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20. Notices.
All notices required or permitted to be delivered pursuant to this
Agreement shall be in writing (including telegraphic communication) or by
telephone confirmed in writing, all such writings to be delivered personally or
sent by courier service or by registered or certified mail, postage prepaid and
return receipt requested, as follows:
if to the Fund to:
THE FUTURE FUND L.P.
c/x Xxxxxxx Asset Management, Inc.
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
if to the Trading Manager to:
XXXXXXX ASSET MANAGEMENT, INC.
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
21. No Assignment.
No party hereto may assign any of its rights hereunder without the prior
written consent of each other party. This Agreement shall not be construed to
confer any benefit on any person other than the parties hereto and their
respective successors and assigns.
22. Governing Law.
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. The parties hereto consent to the jurisdiction of the Federal courts of
the Northern District of Illinois in respect of all matters arising hereunder.
23. Entire Agreement; Counterparts.
This Agreement sets forth the entire agreement of the parties relating to
the subject matter hereof except as otherwise set forth herein. This Agreement
may be executed in one or more counterparts each of which shall, however,
together constitute one and the same document.
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24. 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.
25. Arbitration.
The parties agree that any dispute or controversy arising out of or
relating to this Agreement or the interpretation thereof, shall be settled by
arbitration in accordance with the rules, then in effect, of the National
Futures Association; provided, however, that the power of the arbitrator shall
be limited to interpreting this Agreement as written and the arbitrator shall
state his reasons for his award; and provided, further, that disputes relating
to forward contracts shall also be arbitrable irrespective of whether the
National Futures Association rules then provide for the arbitration of forward
contract disputes. Judgment upon any award made by the arbitrator may be
entered in any court of competent jurisdiction.
26. Survival.
Section 17 shall survive the termination or expiration of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first above written.
THE FUTURE FUND L.P.
By: Xxxxxxx Asset Management, Inc.
General Partner
By:/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
XXXXXXX ASSET MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
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TRADING MANAGER AGREEMENT
BY AND BETWEEN
THE FUTURE FUND L.P.
AND
XXXXXXX ASSET MANAGEMENT, INC.
dated as of the 1st day of January, 1996
11
12
TRADING MANAGER AGREEMENT
by and between
THE FUTURE FUND L.P.
and
XXXXXXX ASSET MANAGEMENT, INC.
TABLE OF CONTENTS
PAGE
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1. Duties and Status of the Trading Manager . . . . . . . . . . . . . . . . . . . . . 1
2. Standard of Liability; Trading Manager's
Limited Responsibility Regarding
Trading Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Status of the Trading Manager, the Fund
and the Trading Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Custody of the Fund's Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Clearing of Futures Trades . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. Placement of Forward Trades . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
7. Contracts with the Trading Advisors . . . . . . . . . . . . . . . . . . . . . . . 3
8. Contracts with Commodity Brokers and
Forward Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
9. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Management Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Incentive Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Payment of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(d) Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
10. Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
11. Multi-Advisor Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
12. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
13. Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
14. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
15. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
16. Representations and Warranties of the Trading
Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
17. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
18. "Commodity Interests" Defined . . . . . . . . . . . . . . . . . . . . . . . . . . 8
19. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
20. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
21. No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
22. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
23. Entire Agreement; Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 9
24. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
25. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
26. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exhibit A
Form of Management Contract
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EXHIBIT A
FORM OF
MANAGEMENT CONTRACT
THIS MANAGEMENT CONTRACT ("Agreement"), is made and entered into effective
as of ____________, 1995, by and between Xxxxxxx Asset Management, Inc. (the
"Trading Manager" or "General Partner"), The Future Fund, an Illinois limited
partnership (the "Partnership"), and ________________________ (the "Trading
Advisor").
W I T N E S S E T H:
WHEREAS, pursuant to a Trading Manager Agreement (the "Trading Manager
Agreement"), the Trading Manager, which is also the General Partner of the
Partnership, has agreed with the Partnership to act as the trading manager for
the Partnership, selecting advisors to direct its trading;
WHEREAS, under the Trading Manager Agreement the Partnership has
authorized the Trading Manager to allocate a portion of the Partnership's assets
to the Trading Advisor to provide commodity interest advisory services to the
Fund;
WHEREAS, the Trading Advisor has agreed with the Trading Manager to act as
a Trading Advisor for the Partnership;
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 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
NOW, THEREFORE, in consideration of the mutual premises and agreements set
forth herein, the parties hereto do agree as follows:
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1. DUTIES OF THE TRADING ADVISOR.
(a) The Trading Manager 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 attorney-in-fact, for trading the assets of the
Partnership allocated to it (the "Allocated Assets") in Contracts and in
accordance with the Trading Advisor's ________________ System ("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 Trading Advisor's Disclosure Document dated
________________________ (the "Disclosure Document") relating to the appointment
of the Trading Advisor as a commodity trading advisor of the Partnership,
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 agrees to describe to the Trading Manager 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 Trading Manager 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 Trading
Manager.
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(d) The Trading Manager and the Partnership acknowledge receipt of the
Trading Advisor's 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.
(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
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Allocated Assets) at any time. The General Partner shall, however, use its best
efforts to make such additions or withdrawals at month-end. 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.
(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
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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 $_________ of which
$__ is notional funding.
4. FEES.
(a) Commencing with the commencement of trading by the Trading Advisor
for the Partnership, the Trading Manager agrees to pay to the Trading Advisor as
follows:
(i) Management Fee. A monthly management fee equal to ________% 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 __% annual rate).
(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
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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 __% of any New
Trading Profits (as defined below) achieved during each fiscal 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) 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 fiscal quarter and end on the last day of such
fiscal 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 Trading Manager within thirty (30) days of
the end of the
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calendar period to which they relate. The Trading Manager 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
E.D. & F. Man International Inc. ("Man"), 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 Man 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 Man 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
Man 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 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).
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(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 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.
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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 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
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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.
(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.
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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.
(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
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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.
(a) 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.
(b) 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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9. 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 Trading Manager to:
Xxxxxxx Asset Management, Inc.
One Financial Place
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, President
Fax No.: 000-000-0000
If to the Trading Advisor to:
---------------------------------
---------------------------------
---------------------------------
----------------------------------
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.
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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.
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.
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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.
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.
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IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.
THE FUTURE FUND
By: Xxxxxxx Asset Management, Inc.,
General Partner
By: ___________________________
Xxxxxx X. Xxxxx
President
XXXXXXX ASSET MANAGEMENT, INC.
By: ____________________________
Xxxxxx X. Xxxxx
President
______________________________
By: ____________________________
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EXHIBIT 1
__________________, 1995
____________________
____________________
____________________
____________________
Re: Commodity Trading Authorization
Gentlemen:
The Future Fund, 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 ________, 1995.
Very truly yours,
THE FUTURE FUND
By: Xxxxxxx Asset Management, Inc.,
General Partner
By: ______________________________
Xxxxxx X. Xxxxx
President
31
ACKNOWLEDGEMENT OF RECEIPT
OF DISCLOSURE DOCUMENT
The undersigned hereby acknowledges receipt of
___________________________'s Disclosure Document dated __________________,
1995.
The Futures Fund
By: Xxxxxxx Asset Management, Inc.
By: _____________________________
Xxxxxx X. Xxxxx
President
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