MANAGEMENT AGREEMENT
AGREEMENT made as of the 1st day of March, 2001 among XXXXX XXXXXX FUTURES
MANAGEMENT LLC, a Delaware limited liability company ("SBFM" or the "Trading
Manager"), XXXXXXX XXXXX BARNEY ORION FUTURES FUND L.P., a New York limited
partnership (the "Partnership"), SFG GLOBAL INVESTMENTS, INC., a Delaware
Corporation ("SFG" or the "General Partner") and WILLOWBRIDGE ASSOCIATES INC., a
Delaware corporation (the "Advisor").
W I T N E S S E T H :
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WHEREAS, SBFM is the trading manager of the Partnership, a limited
partnership organized for the purpose of speculative trading of commodity
interests, including futures contracts, options and forward contracts with the
objective of achieving substantial capital appreciation; and
WHEREAS, SBFM and SFG, the general partner of the Partnership, have entered
into a trading manager agreement, as of March 31, 1999, which authorizes SBFM as
trading manager to negotiate advisory agreements on behalf of SFG and the
Partnership; and
WHEREAS, the Limited Partnership Agreement establishing the Partnership
(the "Limited Partnership Agreement") permits the delegation to one or more
commodity trading advisors the authority to make trading decisions for the
Partnership; and
WHEREAS, the Advisor is registered as a commodity trading advisor with the
Commodity Futures Trading Commission ("CFTC") and is a member of the National
Futures Association ("NFA"); and
WHEREAS, the General Partner is registered as a commodity pool operator
with the CFTC and is a member of the NFA; and
WHEREAS, the Trading Manager is registered as a commodity trading advisor
with the CFTC and is
a member of the NFA; and
WHEREAS, the Trading Manager, the Partnership and the Advisor
wish to enter into this Agreement in order to set forth the terms and conditions
upon which the Advisor will render and implement advisory services in connection
with the conduct by the Partnership of its commodity trading activities during
the term of this Agreement;
NOW, THEREFORE, the parties agree as follows:
1. DUTIES OF THE ADVISOR. (a) For the period and on the terms and
conditions of this Agreement, the Advisor shall have sole authority and
responsibility, as one of the Partnership's agents and attorneys-in-fact, for
directing the investment and reinvestment of the assets and funds of the
Partnership allocated to it by SBFM in commodity interests, including commodity
futures contracts, options and forward contracts. All such trading on behalf of
the Partnership shall be in accordance with the trading policies set forth in
the Partnership's Private Placement Offering Memorandum and Disclosure Document
dated as of December 31, 2000, as supplemented (the "Memorandum"), and as such
trading policies may be changed from time to time upon receipt by the Advisor of
prior written notice of such change and pursuant to the trading strategy
selected by SBFM to be utilized by the Advisor in managing the Partnership's
assets. SBFM has initially selected the Advisor's Select Investment Program
using the Vulcan Trading System to manage 50% of the Partnership's assets
allocated to the Advisor, and the Advisor's Argo Trading System to manage 50% of
the Partnership's assets allocated to the Advisor. Any open positions or other
investments at the time of receipt of such notice of a change in trading policy
shall not be deemed to violate the changed policy and shall be closed or sold in
the ordinary course of trading. The Advisor may not deviate from the trading
policies set forth in the Memorandum without the prior written consent of the
Partnership given by SBFM. The Advisor makes no representation or warranty that
the trading to be directed by it for the Partnership will be profitable or will
not incur losses. SFG, SBFM and the Partnership each acknowledge that the
Advisor may utilize exchange for physicals transactions in its trading for the
Partnership.
(b) SBFM acknowledges receipt of the Advisor's Disclosure Document dated
October 27, 2000, as filed with the NFA and the CFTC. All trades made by the
Advisor for the account of the Partnership shall be made through such commodity
broker or brokers as SBFM shall direct, and the Advisor shall have no authority
or responsibility for selecting or supervising any such broker in connection
with the execution, clearance or confirmation of transactions for the
Partnership or for the negotiation of brokerage rates charged therefor. However,
the Advisor, with the prior written permission (by either original or fax copy)
of SBFM, may direct all trades in commodity futures and options to a futures
commission merchant or independent floor broker it chooses for execution with
instructions to give-up the trades to the broker designated by SBFM, provided
that the futures commission merchant or independent floor broker and any give-up
or floor brokerage fees are approved in advance by SBFM. All give-up or similar
fees relating to the foregoing shall be paid by the Partnership after all
parties have executed the relevant give-up agreements (by either original or fax
copy) and the Advisor shall have no responsibility for such payment. SBFM will
cause the Partnership's commodity brokers to provide the Advisor with copies of
all confirmation, purchase and sale, monthly and similar statements at the time
such statements are available to SBFM.
(c) The initial allocation of the Partnership's assets to the Advisor will
be approximately U.S. $2,600,000 (all of which shall be actual funds) made to
the Advisor's Select Investment Program, 50% of such funds to be traded using
the Vulcan Trading System and 50% of such funds to be traded using the Argo
Trading System (each, a "Trading System" and collectively, the "Program"). The
Advisor will not be allocated any notional funds. In the event the Advisor
wishes to use a trading system or methodology other than or in addition to the
Program as outlined in the Memorandum in connection with its trading for the
Partnership, either in whole or in part, it may not do so unless the Advisor
gives SBFM prior written notice of its intention to utilize such different
trading system or methodology and SBFM consents thereto in writing. In addition,
the Advisor will provide five days' prior written notice to SBFM of any change
in the trading system or methodology to be utilized for the Partnership which
the Advisor deems material. If the Advisor deems such change in system or
methodology or in markets traded to be material, the changed system or
methodology or markets traded will not be utilized for the Partnership without
the prior written consent of SBFM. In addition, the Advisor will notify SBFM of
any changes to the trading system or methodology that would require a change in
the description of the trading strategy or methods described in the Memorandum.
Non-material changes in the trading systems utilized on behalf of the
Partnership may be instituted without prior written approval. Further, the
Advisor will provide the Partnership with a current list of all commodity
interests to be traded for the Partnership's account and will not trade any
additional commodity interests for such account without providing notice thereof
to SBFM and receiving SBFM's written approval. The Advisor also agrees to
provide SBFM, on a monthly basis, with a written report of the assets under the
Advisor's management together with all other matters deemed by the Advisor to be
material changes to its business not previously reported to SBFM. The Advisor
further agrees that it will convert foreign currency balances (not required to
margin positions denominated in a foreign currency) to U.S. dollars no less
frequently than monthly. U.S. dollar equivalents in individual foreign
currencies of more than $100,000 will be converted to U.S. dollars within one
business day after such funds are no longer needed to margin foreign positions.
(d) The Advisor agrees to make all material disclosures to the Partnership
regarding itself and its principals as defined in Part 4 of the CFTC's
regulations ("principals"), shareholders, directors, officers and employees,
their trading performance and general trading methods, its customer accounts
(but not the identities of or identifying information with respect to its
customers or other information deemed by the Advisor to be proprietary and
confidential) and otherwise as are required in the reasonable judgment of SBFM
to be made in any filings required by Federal or state law or NFA rule or order.
Notwithstanding Sections 1(d) and 4(d) of this Agreement, the Advisor is not
required to disclose the actual trading results of proprietary accounts of the
Advisor or its principals unless SBFM reasonably determines that such disclosure
is required in order to fulfill its fiduciary obligations to the Partnership or
the reporting, filing or other obligations imposed on it by Federal or state law
or NFA rule or order. The Partnership and SBFM acknowledge that the trading
advice to be provided by the Advisor is a property right belonging to the
Advisor and that they will keep all such advice confidential. Further, SBFM
agrees to treat as confidential any results of proprietary accounts and/or
proprietary information with respect to trading systems obtained from the
Advisor. SBFM and the Partnership shall not distribute any description of the
Advisor, its principals, or its or their trading performance without the prior
written consent of the Advisor.
(e) The Advisor understands and agrees that SBFM may designate other
trading advisors for the Partnership and apportion or reapportion to such other
trading advisors the management of an amount of Net Assets (as defined in
Section 3(b) hereof) as it shall determine in its absolute discretion. The
designation of other trading advisors and the apportionment or reapportionment
of Net Assets to any such trading advisors pursuant to this Section 1 shall
neither terminate this Agreement nor modify in any regard the respective rights
and obligations of the parties hereunder. If assets of the Partnership under the
Advisor's management in either Trading System fall below $750,000, the Advisor
may terminate this Agreement immediately with respect such Trading System.
(f) SBFM may, from time to time, in its absolute discretion, select
additional trading advisors and reapportion funds among the trading advisors for
the Partnership as it deems appropriate. SBFM shall use its best efforts to make
reapportionments, if any, as of the first day of a month. The Advisor agrees
that it may be called upon at any time promptly to liquidate positions in SBFM's
sole discretion so that SBFM may reallocate the Partnership's assets, meet
margin calls on the Partnership's account, fund redemptions, or for any other
reason, except that SBFM will not require the liquidation of specific positions
by the Advisor. SBFM will use its best efforts to give two days' prior notice to
the Advisor of any reallocations or liquidations.
(g) The Advisor will not be liable for trading losses in the Partnership's
account including losses caused by errors committed by any commodity
broker/dealer selected by SBFM or SFG; provided, however, that (i) the Advisor
will be liable to the Partnership with respect to losses incurred due to errors
committed or caused by it or any of its principals or employees in communicating
improper trading instructions or orders to any broker on behalf of the
Partnership and (ii) the Advisor will be liable to the Partnership with respect
to losses incurred due to errors committed or caused by any executing broker
(other than Xxxxxxx Xxxxx Xxxxxx Inc. or any of its affiliates) selected by the
Advisor (it also being understood that SBFM, with the assistance of the Advisor,
will first attempt to recover such losses from the executing broker).
2. INDEPENDENCE OF THE ADVISOR. For all purposes herein, the
Advisor shall be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for or
represent the Partnership in any way and shall not be deemed an agent, promoter
or sponsor of the Partnership, the General Partner, SBFM, or any other trading
advisor. The Advisor shall not be responsible to the Partnership, SBFM, the
General Partner, any trading advisor or any limited partners for any acts or
omissions of any other trading advisor to the Partnership.
3. COMPENSATION. (a) In consideration of and as compensation for all of the
services to be rendered by the Advisor to the Partnership under this Agreement,
the Partnership shall pay the Advisor (i) an incentive fee payable quarterly
equal to 20% of New Trading Profits (as such term is defined below) earned by
the Advisor for the Partnership and (ii) a monthly fee for professional
management services equal to 1/6 of 1% (2% per year) of the month-end Net Assets
of the Partnership allocated to the Advisor (which shall include any committed
funds).
(b) "Net Assets" shall have the meaning set forth in Paragraph 7(d)(1) of
the Limited Partnership Agreement dated as of March 22, 1999, and without regard
to further amendments thereto, provided that in determining the Net Assets of
the Partnership on any date, no adjustment shall be made to reflect any
distributions, redemptions or incentive fees payable as of the date of such
determination.
(c) "New Trading Profits" shall mean the excess, if any, of Net Assets
managed by the Advisor (which shall include any committed funds) at the end of
the fiscal period over Net Assets managed by the Advisor (which shall include
any committed funds) at the end of the highest previous fiscal period or Net
Assets allocated to the Advisor at the date trading commences, whichever is
higher, and as further adjusted to eliminate the effect on Net Assets resulting
from new capital contributions, redemptions, reallocations or capital
distributions, if any, made during the fiscal period decreased by interest or
other income, not directly related to trading activity, earned on the
Partnership's assets during the fiscal period, whether the assets are held
separately or in margin accounts. Ongoing expenses will be attributed to the
Advisor based on the Advisor's proportionate share of Net Assets. Ongoing
expenses above will not include expenses of litigation not involving the
activities of the Advisor on behalf of the Partnership. Ongoing expenses include
offering and organizational expenses of the Partnership. Interest income earned,
if any, will not be taken into account in computing New Trading Profits earned
by the Advisor. If Net Assets allocated to the Advisor are reduced due to
redemptions, distributions or reallocations (net of additions), there will be a
corresponding proportional reduction in the related loss carryforward amount
that must be recouped before the Advisor is eligible to receive another
incentive fee.
(d) Quarterly incentive fees and monthly management fees shall be paid
within twenty (20) business days following the end of the period, as the case
may be, for which such fee is payable. In the event of the termination of this
Agreement as of any date which shall not be the end of a calendar quarter or a
calendar month, as the case may be, the quarterly incentive fee shall be
computed as if the effective date of termination were the last day of the then
current quarter and the monthly management fee shall be prorated to the
effective date of termination. If, during any month, the Partnership does not
conduct business operations or the Advisor is unable to provide the services
contemplated herein for more than two successive business days, the monthly
management fee shall be prorated by the ratio which the number of business days
during which the General Partner conducted the Partnership's business operations
or utilized the Advisor's services bears in the month to the total number of
business days in such month. No incentive fee shall be paid to the Advisor until
the end of the first full calendar quarter of the Advisor's trading for the
Partnership, which incentive fee shall be based on New Trading Profits (if any)
from the commencement of trading for the Partnership by the Advisor through the
end of the first full calendar quarter.
(e) The provisions of this Paragraph 3 shall survive the termination of
this Agreement.
4. RIGHT TO ENGAGE IN OTHER ACTIVITIES. (a) The services provided by the
Advisor hereunder are not to be deemed exclusive. SBFM on its own behalf and on
behalf of the Partnership acknowledges that, subject to the terms of this
Agreement, the Advisor and its officers, directors, employees and
shareholder(s), may render advisory, consulting and management services to other
clients and accounts. The Advisor and its officers, directors, employees and
shareholder(s) shall be free to trade for their own accounts and to advise other
investors and manage other commodity accounts during the term of this Agreement
and to use the same information, computer programs and trading strategies,
programs or formulas which they obtain, produce or utilize in the performance of
services to SBFM for the Partnership. However, the Advisor represents, warrants
and agrees that it believes the rendering of such consulting, advisory and
management services to other accounts and entities will not require any material
change in the Advisor's Program and will not affect the capacity of the Advisor
to continue to render services to SBFM for the Partnership of the quality and
nature contemplated by this Agreement.
(b) If, at any time during the term of this Agreement, the Advisor is
required to aggregate the Partnership's commodity positions with the positions
of any other person for purposes of applying CFTC- or exchange-imposed
speculative position limits, the Advisor agrees that it will promptly notify
SBFM if the Partnership's positions are included in an aggregate amount which
exceeds the applicable speculative position limit. The Advisor agrees that, if
its trading recommendations are altered because of the application of any
speculative position limits, 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 Advisor's other accounts.
The Advisor further represents, warrants and agrees that under no circumstances
will it knowingly or deliberately use trading strategies or methods for the
Partnership that are inferior to strategies or methods employed for any other
client or account whose assets are traded pursuant to the Program and that it
will not knowingly or deliberately favor any such client or account managed by
it over any other client or account whose assets are traded pursuant to the
Program in any manner, it being acknowledged, however, that different trading
strategies or methods may be utilized for differing sizes of accounts, accounts
traded with different degrees of leverage, 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, accounts utilizing different
executing brokers and accounts with other differences, and that such differences
may cause divergent trading results.
(c) It is acknowledged that the Advisor and/or its officers, employees,
directors and shareholder(s) presently act, and it is agreed that they may
continue to act, as advisor 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.
(d) The Advisor agrees that it shall make such information available to
SBFM respecting the performance of the Partnership's account as compared to the
performance of other accounts managed by the Advisor or its principals as shall
be reasonably requested by SBFM, provided that nothing contained herein shall be
deemed to require the Advisor to disclose the names of other customers or
information that the Advisor deems to be proprietary or confidential. The
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 Advisor's and its principals' current accounts and all proposed accounts for
which they have contracted to act as trading manager.
5. TERM. (a) This Agreement shall continue in effect until June 30, 2001.
SBFM may, in its sole discretion, renew this Agreement for additional one-year
periods upon notice to the Advisor not less than 30 days prior to the expiration
of the previous period. At any time during the term of this Agreement, SBFM may
terminate this Agreement at any month-end upon 30 days' notice to the Advisor.
At any time during the term of this Agreement, SBFM may elect to immediately
terminate this Agreement upon 30 days' notice to the Advisor if (i) the Net
Asset Value per Unit shall decline as of the close of business on any day to
$500 or less; (ii) the Net Assets allocated to the Advisor (adjusted for
redemptions, distributions, withdrawals or reallocations, if any) decline by 50%
or more as of the end of a trading day from such Net Assets' previous highest
value; (iii) limited partners owning at least 50% of the outstanding Units shall
vote to require SBFM to terminate this Agreement; (iv) the Advisor fails to
comply with the terms of this Agreement; (v) SBFM, in good faith, reasonably
determines that the performance of the Advisor has been such that SBFM's
fiduciary duties to the Partnership require SBFM to terminate this Agreement; or
(vi) SBFM reasonably believes that the application of speculative position
limits will substantially affect the performance of the Partnership. At any time
during the term of this Agreement, SBFM may elect immediately to terminate this
Agreement if (i) the Advisor merges, consolidates with another entity, sells a
substantial portion of its assets, or becomes bankrupt or insolvent, except as
provided in Section 10 hereof, (ii) Xxxxxx Xxxx and Xxxxxxx Xxx both die, become
incapacitated, leave the employ of the Advisor, cease to control the Advisor or
are otherwise not managing the trading programs or systems of the Advisor, or
(iii) the Advisor's registration as a commodity trading advisor with the CFTC or
its membership in the NFA or any other regulatory authority, is terminated or
suspended or if the Advisor's license agreement with Caxton Corporation is
terminated. This Agreement will immediately terminate upon dissolution of the
Partnership or upon cessation of trading prior to dissolution.
(b) The Advisor may terminate this Agreement by giving not less than 30
days' notice to SBFM (i) in the event that the trading policies of the
Partnership as set forth in the Memorandum are changed in such manner that the
Advisor reasonably believes will adversely affect the performance of its trading
strategies; (ii) after June 30, 2001; (iv) in the event that the General
Partner, SBFM or Partnership fails to comply with the terms of this Agreement.
The Advisor may immediately terminate this Agreement if SBFM's registration as a
commodity trading advisor, or SFG's registration as a commodity pool operator or
either of their memberships in the NFA is terminated or suspended or if the
Advisor's license agreement with Caxton Corporation is terminated.
(c) Except as otherwise provided in this Agreement, any termination of this
Agreement in accordance with this Paragraph 5 or Paragraph 1(e) shall be without
penalty or liability to any party, except for any fees due to the Advisor
pursuant to Section 3 hereof.
6. INDEMNIFICATION. (a)(i) In any threatened, pending or completed action,
suit, or proceeding to which the Advisor was or is a party or is threatened to
be made a party arising out of or in connection with this Agreement, the
management of the Partnership's assets by the Advisor or the offering and sale
of units in the Partnership, SBFM shall, subject to subparagraph (a)(iii) of
this Paragraph 6, indemnify and hold harmless the Advisor against any loss,
liability, damage, cost, expense (including, without limitation, attorneys' and
accountants' fees), judgments and amounts paid in settlement actually and
reasonably incurred by it in connection with such action, suit, or proceeding if
the Advisor acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the Partnership, and provided that its
conduct did not constitute negligence, intentional misconduct, or a breach of
its fiduciary obligations to the Partnership as a commodity trading advisor,
unless and only to the extent that the court or administrative forum in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all circumstances of the case, the
Advisor is fairly and reasonably entitled to indemnity for such expenses which
such court or administrative forum shall deem proper; and further provided that
no indemnification shall be available from the Partnership if such
indemnification is prohibited by Section 16 of the Limited Partnership
Agreement. The termination of any action, suit or proceeding by judgment, order
or settlement shall not, of itself, create a presumption that the Advisor did
not act in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Partnership.
(ii) Without limiting sub paragraph (i) above, to the extent that the
Advisor has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in subparagraph (i) above, or in defense of any
claim, issue or matter therein, SBFM shall indemnify it against the expenses
(including, without limitation, attorneys' and accountants' fees) actually and
reasonably incurred by it in connection therewith.
(iii) Any indemnification under subparagraph (i) above, unless ordered by a
court, arbitrator or administrative forum, shall be made by SBFM only as
authorized in the specific case and only upon a determination by independent
legal counsel in a written opinion that such indemnification is proper in the
circumstances because the Advisor has met the applicable standard of conduct set
forth in subparagraph (i) above. Such independent legal counsel shall be
selected by SBFM in a timely manner, subject to the Advisor's approval, which
approval shall not be unreasonably withheld. The Advisor will be deemed to have
approved SBFM's selection unless the Advisor notifies SBFM in writing, received
by SBFM within five days of SBFM's telecopying to the Advisor of the notice of
SBFM's selection, that the Advisor does not approve the selection.
(iv) In the event the Advisor is made a party to any claim, dispute or
litigation or otherwise incurs any loss or expense as a result of, or in
connection with, the Partnership's or SBFM's activities or claimed activities
unrelated to the Advisor, SBFM shall indemnify, defend and hold harmless the
Advisor against any loss, liability, damage, cost or expense (including, without
limitation, attorneys' and accountants' fees) incurred in connection therewith.
(v) As used in this Paragraph 6(a), the terms "Advisor" shall include the
Advisor, its principals, officers, directors, stockholders and employees and the
term "SBFM" shall include the Partnership.
(b)(i) The Advisor agrees to indemnify, defend and hold harmless SBFM, SFG,
the Partnership and their principals, officers, directors and employees against
any loss, liability, damage, cost or expense (including, without limitation,
attorneys' and accountants' fees), judgments and amounts paid in settlement
actually and reasonably incurred by them (A) as a result of the material breach
of any material representations and warranties made by the Advisor in this
Agreement, or (B) as a result of any act or omission of the Advisor relating to
the Partnership if there has been a final judicial or regulatory determination
or, in the event of a settlement of any action or proceeding with the prior
written consent of the Advisor, a written opinion of an arbitrator pursuant to
Paragraph 14 hereof, to the effect that such acts or omissions violated the
terms of this Agreement in any material respect or involved negligence, bad
faith, or intentional misconduct on the part of the Advisor (except as otherwise
provided in Section 1(g)).
(ii) In the event SBFM, SFG, the Partnership or any of their principals,
officers, directors and employees is made a party to any claim, dispute or
litigation or otherwise incurs any loss or expense as a result of, or in
connection with, the activities or claimed activities of the Advisor or its
principals, officers, directors, shareholder(s) or employees unrelated to SBFM's
or the Partnership's business, the Advisor shall indemnify, defend and hold
harmless SBFM, the Partnership or any of their principals, officers, directors
and employees against any loss, liability, damage, cost or expense (including,
without limitation, attorneys' and accountants' fees) actually and reasonably
incurred in connection therewith.
(iii) Neither Xxxxxx Xxxx nor Xxxxxxx Xxx shall have any liability to the
Partnership or SBFM or any of their respective officers, directors, employees,
partners or affiliates under this Agreement or in connection with the
transactions contemplated by this Agreement except in the case of his own fraud
or willful misconduct.
(iv) Any indemnification under subparagraph (b)(i) above, unless ordered by
a court, arbitrator or administrative forum, shall be made by the Advisor only
as authorized in the specific case and only upon a determination by independent
legal counsel in a written opinion that such indemnification is proper in the
circumstances. Such independent legal counsel shall be selected by the Advisor
in a timely manner, subject to SBFM's approval, which approval shall not be
unreasonably withheld. SBFM will be deemed to have approved the Advisor's
selection unless SBFM notifies the Advisor in writing, received by the Advisor
within five days of the Advisor's facsimile to SBFM of the notice of the
Advisor's selection, that SBFM does not approve the selection.
(c) In the event that a person entitled to indemnification under this
Paragraph 6 is made a party to an action, suit or proceeding alleging both
matters for which indemnification can be made hereunder and matters for which
indemnification may not be made hereunder, such person shall be indemnified only
for that portion of the loss, liability, damage, cost or expense incurred in
such action, suit or proceeding which relates to the matters for which
indemnification can be made.
(d) None of the indemnifications contained in this Paragraph 6 shall be
applicable with respect to default judgments, confessions of judgment or
settlements entered into by the party claiming indemnification without the prior
written consent, which shall not be unreasonably withheld, of the party
obligated to indemnify such party.
(e) The provisions of this Paragraph 6 shall survive the termination of
this Agreement.
7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) The Advisor represents and warrants that:
(i) All references to the Advisor and its principals in the Memorandum are
accurate in all material respects and as to them the Memorandum does not contain
any untrue statement of a material fact or omit to state a material fact which
is necessary to make the statements therein not misleading.
(ii) The information with respect to the Advisor set forth in the actual
performance tables in the Memorandum is based on all of the customer accounts
managed on a discretionary basis by the Advisor's principals and/or the Advisor
during the period covered by such tables and required to be disclosed therein.
(iii) The Advisor will be acting as a commodity trading advisor with
respect to the Partnership and not as a securities investment adviser and is
duly registered with the CFTC as a commodity trading advisor, is a member of the
NFA, and is in compliance with such other registration and licensing
requirements as shall be necessary to enable it to perform its obligations
hereunder, and agrees to maintain and renew such registrations and licenses
during the term of this Agreement.
(iv) The Advisor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full power and
authority to enter into this Agreement and to provide the services required of
it hereunder.
(v) The Advisor will not, by acting as a commodity trading advisor to the
Partnership, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound.
(vi) This Agreement has been duly and validly authorized, executed and
delivered by the Advisor and is a valid and binding agreement enforceable in
accordance with its terms.
(vii) At any time during the term of this Agreement that a prospectus
relating to the Units is required to be delivered in connection with the offer
and sale thereof, the Advisor agrees upon the request of SBFM to provide the
Partnership with such information as shall be necessary so that, as to the
Advisor and its principals, such prospectus is accurate.
(b) SBFM represents and warrants for itself and the Partnership that:
(i) The Memorandum (as from time to time amended or supplemented, which
amendment or supplement is approved by the Advisor as to descriptions of itself
and its actual performance) does not contain any untrue statement of a material
fact or omit to state a material fact which is necessary to make the statements
therein not misleading, except that the foregoing representation does not apply
to any statement or omission concerning the Advisor, if any, in the Memorandum,
made in reliance upon, and in conformity with, information furnished to SBFM by
or on behalf of the Advisor expressly for use in the Memorandum.
(ii) It is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power
and authority to perform its obligations under this Agreement.
(iii) SBFM and the Partnership have the capacity and authority to enter
into this Agreement on behalf of the Partnership.
(iv) This Agreement has been duly and validly authorized, executed and
delivered on SBFM's and the Partnership's behalf and is a valid and binding
agreement of SBFM and the Partnership enforceable in accordance with its terms.
(v) SBFM will not, by acting as Trading Manager to the Partnership and the
Partnership will not, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound which would materially limit or affect the performance of its duties under
this Agreement.
(vi) It is registered as a commodity trading advisor and is a member of the
NFA, and is in compliance with such other registration and licensing
requirements as shall be necessary to enable it to perform its obligations
hereunder, and agrees to maintain and renew such registrations and licenses
during the term of this Agreement.
(viii) SBFM and the Partnership will comply with all laws, rules,
regulations and orders applicable to the offer and sale of Units in all
jurisdictions in which Units are offered or sold.
(c) The General Partner represents and warrants for itself and the
Partnership that:
(i) The General Partner is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority to perform its obligations under this Agreement.
(ii) SFG and the Partnership have the capacity and authority to enter into
this Agreement on behalf of the Partnership.
(iii) This Agreement has been duly and validly authorized, executed and
delivered on SFG's and the Partnership's behalf and is a valid and binding
agreement of SFG and the Partnership enforceable in accordance with its terms.
(iv) SFG will not, by acting as General Partner to the Partnership and the
Partnership will not, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound which would materially limit or affect the performance of its duties under
this Agreement.
(v) It is registered as a commodity pool operator and is a member of the
NFA, and is in compliance with such other registration and licensing
requirements as shall be necessary to enable it to perform its obligations
hereunder, and agrees to maintain and renew such registrations and licenses
during the term of this Agreement.
(vi) The Partnership is a limited partnership duly organized and validly
existing under the laws of the State of New York and has full power and
authority to enter into this Agreement and to perform its obligations under this
Agreement.
8. COVENANTS OF THE ADVISOR, SBFM AND THE PARTNERSHIP.
(a) The Advisor agrees as follows:
(i) In connection with its activities on behalf of the Partnership, the
Advisor will comply with all applicable rules and regulations of the CFTC and/or
the commodity exchange on which any particular transaction is executed.
(ii) The Advisor will promptly notify SBFM of the commencement of any
material suit, action or proceeding involving it, whether or not any such suit,
action or proceeding also involves SBFM.
(iii) In the placement of orders for the Partnership's account and for the
accounts of any other client, the Advisor will utilize a pre-determined, fair
and reasonable order entry system, which shall, on an overall basis, be no less
favorable to the Partnership than to any other account managed by the Advisor.
The Advisor acknowledges its obligation to review the Partnership's positions,
prices and equity in the account managed by the Advisor daily and within two
business days to notify, in writing, the broker and SBFM and the Partnership's
brokers of (i) any error committed by the Advisor or its principals or
employees; (ii) any trade which the Advisor believes was not executed in
accordance with its instructions; and (iii) any discrepancy with a value of
$10,000 or more (due to differences in the positions, prices or equity in the
account) between its records and the information reported on the account's daily
and monthly broker statements.
(iv) The Advisor will maintain a net worth of not less than $250,000 during
the term of this Agreement.
(b) SBFM agrees for itself and the Partnership that:
(i) SBFM and the Partnership will comply with all applicable rules and
regulations of the CFTC and/or the commodity exchange on which any particular
transaction is executed.
(ii) SBFM will promptly notify the Advisor of the commencement of any
material suit, action or proceeding involving it or the Partnership, whether or
not such suit, action or proceeding also involves the Advisor.
9. COMPLETE AGREEMENT. This Agreement constitutes the entire agreement between
the parties pertaining to the subject matter hereof.
10. ASSIGNMENT. This Agreement may not be assigned by any party without the
express written
consent of the other parties.
11. AMENDMENT. This Agreement may not be amended except by the written consent
of the parties.
12. NOTICES. All notices, demands or requests required to be made or delivered
under this Agreement shall be effective upon actual receipt and shall be in
writing and delivered personally or by facsimile or by registered or certified
mail or expedited courier, return receipt requested, postage prepaid, to the
addresses below or to such other addresses as may be designated by the party
entitled to receive the same by notice similarly given:
If to SBFM:
Xxxxx Xxxxxx Futures Management Inc.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
If to the Advisor:
Willowbridge Associates Inc.
000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
14. 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 or, if the National Futures Association shall refuse
jurisdiction, then in accordance with the rules, then in effect, of the American
Arbitration Association; provided, however, that the power of the arbitrator
shall be limited to interpreting this Agreement as written and the arbitrator
shall state in writing his reasons for his award. Judgment upon any award made
by the arbitrator may be entered in any court of competent jurisdiction.
15. CONFIDENTIALITY. Nothing in this Agreement shall require the Advisor to
disclose the details of its trading system, methods, models, strategies and
formulas. SBFM and the Partnership acknowledge that the trading systems,
methods, models, strategies and formulas of the Advisor are the sole and
exclusive property of the Advisor; SBFM and the Partnership further agree that
it will keep confidential and will not disseminate information regarding such
systems, methods, models, strategies and formulas to any person.
16. NO THIRD PARTY BENEFICIARIES. There are no third party beneficiaries to this
Agreement except that certain persons not parties to this Agreement have rights
under Section 6 hereof.
IN WITNESS WHEREOF, this Agreement has been executed for and
on behalf of the undersigned as of the day and year first above written.
XXXXX XXXXXX FUTURES
MANAGEMENT LLC
By /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
President
XXXXXXX XXXXX BARNEY ORION
FUTURES FUND L.P.
By: SFG Global Investments, Inc.
(General Partner)
By /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
President
SFG GLOBAL INVESTMENTS, INC.
By /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
President
WILLOWBRIDGE ASSOCIATES INC.
By /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Senior Vice President
