SERVICE AGREEMENT
THIS AGREEMENT, made this 21st day of June, 2000, by:
DERIVATIVES PORTFOLIO MANAGEMENT, L.L.C.
Xxx Xxxxxx Xxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxx Xxxxxx 00000-0000
("DPM")
and
XXXXXX INTERNATIONAL RAW MATERIALS FUND, L.P.
0000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
(the "Client")
RECITALS
A. DPM is engaged in the financial accounting service business.
B. Client desires to engage DPM and DPM agrees to provide services to
client on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which the parties hereby acknowledge, the parties agree as follows:
1. SERVICES OF DPM. Client hereby authorizes DPM to perform those
services herein enumerated (the "Activities") as follows:
A) Generate daily activity reports, portfolio reports, portfolio
summary reports, fund summary reports, profit and loss reports, and net asset
value reports by computing, adjusting, verifying, updating and reconciling data
obtained from trading advisors and brokers;
B) Compile and prepare monthly reports of realized and unrealized
gain/loss; calculate monthly net asset value; prepare monthly financial
statements including balance sheets and income statements; prepare a monthly
general ledger accompanied by appropriate documentation including
reconciliations and detailed fee schedules; Limited Partner monthly account
statements;
C) Maintain records of the General Ledger, broker's statements, trader
reports and other relevant reports received;
D) Serve as the client's subscription and redemption agent. As
subscription agent, DPM will process new subscriptions, add new subscribers to
the list of limited partners, assign the appropriate number of units per
subscription, compute the net asset value per unit and process all requests for
redemption; and
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E) Draft U.S. Federal tax Schedule K-1s for the Client's partners with
supporting documentation for the Client's tax preparers to review and approval.
2. BROKER SERVICES. DPM will not perform the services of a trading
broker, including, without limitation, executions of transactions, payment of
brokerage commissions, confirmations of transactions to Client, transmittal of
monthly account statements to Client, enforcement of any margin requirements, or
the custody of funds or securities.
3. COMPLIANCE SERVICES. DPM and Client recognize and acknowledge that
DPM's services pursuant to this Agreement are solely limited to performance of
the Activities. Nothing contained herein, expressed or implied, is intended or
shall be construed to confer upon DPM any duty to ensure that Client or any
related entities are acting in compliance with any applicable domestic or
international laws or regulations.
4. SOLE RESPONSIBILITY FOR THE ACTIVITIES. Client will not authorize
any other party to perform the Activities.
5. AUTHORIZATION FOR DPM COMMUNICATIONS. Client hereby authorizes DPM
to communicate, as required, with its trading advisors, brokers, FCMs,
accountants and other agents and related parties to obtain the information
needed to perform the Activities.
6. COMPENSATION. As compensation for DPM's performance of the
Activities pursuant to this Agreement, Client will pay DPM, commencing as of the
earlier of the date the Client's Form S-1 Registration Statement is approved by
the Securities and Exchange Commisssion or September 1, 2000, a monthly fee
equal to twenty two and a half twelfths (22.5/12) basis points of the value of
Client's net assets as computed by DPM as of the first day of each month. For
example, if net assets equal $25,000,000, the monthly fee would equal $4,687.50
($25,000,000 multiplied by 0.00225, then divided by 12). In no month will DPM's
fee be less than $4,000.00. DPM will send Client an invoice showing the fee for
each month within 10 days after the last day of that month. Client will pay the
fee within 15 days of receipt of the invoice. In addition to the fee referred to
above, DPM will be paid $20.00 per partner per year for expenses associated with
mailing and handling. This expense payment will be due initially at the
beginning of the term of this agreement and thereafter as each new limited
partner is admitted. DPM will reduce this expense payment due at the beginning
of the term of this agreement to $17.00 per partner for partners that are
processed through the Client's escrow agent during the initial escrow period.
7. SPECIAL PROJECTS. The parties hereto may agree that DPM undertake to
perform additional tasks or projects, as needed, upon terms and conditions,
including compensation, to be mutually agreed upon by the parties.
8. CLIENT'S REPRESENTATIONS. Client represents to DPM that:
A. Client is duly organized and validly existing as a limited
partnership in the State of Illinois and in good standing under the laws of that
State and is in good standing and qualified to do business in each jurisdiction
in which the nature or conduct of its business requires such qualification.
B. Client has full authority and power to execute, deliver, consummate
and perform this Agreement, and Client has all necessary registrations, licenses
and/or memberships necessary to conduct the activities as described in the
Client's Form S-1 Registration Statement.
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C. The performance by Client of its obligations under this Agreement
will not conflict with or result in a breach of any of the terms or provisions
of any agreement of which Client is a party to or to which it is bound, and does
not violate any applicable laws, rules or regulations.
D. Client is knowledgeable about securities and commodities trading,
and aware of the risk of substantial loss in such trading.
E. Client will ensure that DPM has full access to the relevant trading
advisors, brokers, accountants and other agents in order to obtain the
information DPM will need to perform the Activities.
F. All the information relating to Client given to DPM in connection
with the transactions contemplated by this Agreement is full, complete and
accurate and DPM may reasonably rely on such information until it receives
written notice from Client of any changes.
G. Client will immediately notify DPM if any of the foregoing
representations cease to be true.
9. DPM'S REPRESENTATIONS. DPM represents to Client that:
A. DPM is duly organized and validly existing as a limited liability
company in the State of Delaware and in good standing under the laws of that
State and is in good standing and qualified to do business in each jurisdiction
in which the nature or conduct of its business requires such qualification.
B. DPM has full authority and power to execute, deliver, consummate and
perform this Agreement.
C. The performance by DPM of its obligations under this Agreement will
not conflict with or result in a breach of any of the terms or provisions of any
agreement of which DPM is a party or to which it is bound and does not violate
any applicable laws, rules or regulations.
D. DPM has completed obtained and performed all registrations, filings,
approvals, and authorizations, consents or examinations required by any
government or governmental authority to perform the Activities contemplated by
this Agreement and will maintain the same in effect for so long as this
Agreement remains in effect.
E. DPM will immediately notify Client if any of the foregoing
representations cease to be true.
10. NON-EXCLUSIVE SERVICES. DPM's services to Client are not exclusive
and DPM shall be free to render similar and other services to others.
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11. RELATIONSHIP OF THE PARTIES. DPM shall at no time retain possession
of, or have any right, title and interest in Client's assets. DPM is an
independent contractor and this Agreement does not establish a joint venture or
partnership between DPM and Client, nor authorize any entity to act as general
agent, or to enter into any contract or other agreement on behalf of any other
party except as specifically provided herein. No party shall be liable to any
third party in any way for any unauthorized or negligent act or omission of the
other party.
12. TERM. The term of this Agreement shall begin as of July 1, 2000 and
end September 30, 2,001, unless terminated on 90 days written notice by either
party hereto. Termination shall not affect DPM's right to compensation earned
prior to the date of termination PRO RATA. Unless terminated earlier pursuant to
this Section 12 this Agreement will renew itself for successive one-year terms,
subject to renegotiation of the terms of compensation and services stated
herein.
13. NOTICES. Any communication, notice or demand pursuant to this
Agreement shall be in writing and delivered by personal service (including
express or courier service) or by registered or certified mail, postage prepaid,
return receipt requested:
IF TO DPM:
Derivatives Portfolio Management, L.L.C.
Xxx Xxxxxx Xxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO CLIENT:
Xxxxxx International Raw Materials Fund, X.X.
Xxxxxxx Management Company, L.L.C.
0000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO:
Xxxxxx X. Xxxxxxx, Esq.
Wildman, Harrold, Xxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
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14. CONFIDENTIALITY. DPM and Client agree to keep confidential the
terms of this Agreement and each transaction hereunder, and all related
agreements, business practices, financial data, procedures and policies
hereunder or otherwise relating to either of them or their affiliates that are
not publicly available (the "Confidential Information"). The parties shall keep
the Confidential Information in strictest confidence except to perform the
services as contemplated by this Agreement or except as required by applicable
law or regulation. The obligations of the parties pursuant to this section shall
survive termination of this Agreement.
15. INDEMNIFICATION. DPM agrees to indemnify and hold harmless Client
and its officers and employees and their respective successors and permitted
assigns from and against any and all liabilities, claims, costs, fines, damages,
expenses, losses and attorneys' fees arising out of our in connection with any
failure of DPM to perform its obligations hereunder. Client agrees to indemnify
and hold harmless DPM and DPM's officers and employees and their respective
successors and permitted assigns from and against any and all liabilities,
claims, costs, fines, damages, expenses, losses or pursuant to this Agreement.
Nothing contained herein shall require either party to indemnify the other for
acts of the others, which constitute gross negligence, malfeasance or willful
misconduct. The obligations of the parties pursuant to this section shall
survive termination of this Agreement.
16. EMPLOYMENT PRACTICES. Client agrees that it shall not hire or
solicit the employment of, or services from, any employee of DPM unless approved
in advance by the President of DPM or until a minimum period of three (3) months
has passed from the employee's last day of employment with DPM.
17. GOVERNING LAW. This Agreement and performance hereunder and all
suits and special proceedings hereunder shall be construed in accordance with
the laws of New Jersey.
18. CONTRACT TERMS TO BE EXCLUSIVE. This Agreement contains the sole
and entire agreement between the parties and supersedes any and all other
agreements between the parties relating to the subject matter hereof. A
modification of this Agreement will be effective only if it is in writing and
signed by both parties.
19. ASSIGNABILITY. This Agreement shall be binding on and inure to the
benefit of the respective parties hereto and their heirs, executors, successors
and assigns. No party shall assign the rights or delegate the duties pursuant to
this Agreement without the prior written consent of the other parties.
20. WAIVER. The waiver by any party of a breach of any provisions of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach by either party. The failure of a party to insist upon strict adherence
to any provision of the Agreement shall not constitute a waiver or thereafter
deprive such party of the right to insist upon strict adherence.
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IN WITNESS WHEREOF, the parties have set their hands and seals on the
day first written above.
WITNESS: Xxxxxx International Raw Materials Fund, L.P.
an Illinois Limited Partnership
By: Xxxxxxx Management Company, L.L.C.
An Illinois Limited Liability Company
/s/ Xxxxx Xxxxxxxx By: /S/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
WITNESS: DERIVATIVES PORTFOLIO MANAGEMENT, L.L.C.
a Delaware Limited Liability Company
/s/ Xxxx Xxxxxx By: /S/ Xxx X. Xxxxxxxxxx
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Xxx X. Castranova, President
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