EXHIBIT 10.7
REPRESENTATION AGREEMENT
CONCERNING THE REGISTRATION STATEMENT
AND THE PROSPECTUS
THIS REPRESENTATION AGREEMENT is dated as of the ____ day of July, 1997
(hereinafter referred to as the "AGREEMENT"), by and among IDS Managed Futures,
L.P., a Delaware limited partnership (the "PARTNERSHIP"), American Express
Financial Advisors Inc. ("AEFA"); CIS Investments, Inc., a Delaware corporation
("CISI"); Cargill Investor Services, Inc., a Delaware corporation ("CIS"); IDS
Futures Corporation, a Minnesota corporation ("IDS FUTURES") (CISI and IDS
Futures are collectively referred to as the "GENERAL PARTNERS" and individually
referred to as a "GENERAL PARTNER") and Xxxxxx Investment Corporation, a
Delaware corporation ("XXXXXX").
WITNESSETH:
WHEREAS, the Partnership and the General Partners entered into an Advisory
Contract with Xxxxxx, dated as of July 2, 1997, (the "ADVISORY AGREEMENT"),
pursuant to which Xxxxxx has agreed to act as a commodity trading advisor to the
Partnership with respect to the assets of the Partnership which the General
Partners allocate to Xxxxxx'x management for trading purposes; and
WHEREAS, the Partnership is engaged in a continuous public offering (the
"OFFERING") of units of limited partnership interest in the Partnership (the
"UNITS") through AEFA, an affiliate of IDS Futures. In connection therewith on
November 29, 1994, the Partnership filed with the United States Securities and
Exchange Commission (the "SEC"), pursuant to the United States Securities Act of
1933, as amended (the "1933 ACT"), a registration statement on Form S-1, File
No. 33-86894, and on June 26, 1995 filed Amendment No. 1 to such registration
statement to register the Units, and as a part thereof a prospectus (which
registration statement, together with all amendments thereto, shall be referred
to herein as the "REGISTRATION STATEMENT" and which prospectus, together with
all amendments and
supplements thereto, in the forms filed with the SEC pursuant to Rule 424
under the 1933 Act shall be referred to herein as the "PROSPECTUS"); and
WHEREAS, the parties hereto wish to set forth their duties and obligations
to each other with respect to the Registration Statement and the Prospectus.
NOW, THEREFORE, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF XXXXXX. Xxxxxx hereby
represents and warrants to AEFA, CIS, the Partnership and the General
Partners that:
(a) All references in the Prospectus to (i) Xxxxxx and its
affiliates and the controlling persons, shareholders, partners,
directors, officers and employees of any of the foregoing (as
applicable), (ii) Xxxxxx'x trading systems and methods (hereinafter
referred to as Xxxxxx'x "TRADING APPROACH") and (iii) the actual past
performance of discretionary accounts directed by Xxxxxx pursuant to
the Diversified Portfolio, including the notes to the table reflecting
such actual past performance (hereinafter referred to as Xxxxxx'x
"PAST PERFORMANCE HISTORY"), are complete and accurate in all material
respects and as to such persons, the Trading Approach and the Past
Performance History, the Registration Statement and Prospectus contain
all information required to be included therein by the Commodity
Exchange Act, as amended (the "CE ACT"), and the regulations
thereunder, and do not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein (with respect to the
Prospectus, in light of the circumstances in which they were made) not
misleading. The term "principal" in this Agreement shall have the
same meaning as that term in
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Commodity Futures Trading Commission ("CFTC") Regulation
Section 4.10(e) under the CE Act.
(b) Xxxxxx will make no use of and will not distribute the
Registration Statement, the Prospectus or the selling materials
related thereto.
(c) This Agreement has been duly and validly authorized,
executed and delivered on behalf of Xxxxxx and is a valid and binding
agreement enforceable in accordance with its terms except as may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws at the time in effect affecting the
enforceability generally of rights of creditors, or by applicable
general equity principles, and except that the enforceability of
indemnification provisions may be limited under applicable federal or
state securities, commodities or other laws. The performance of
Xxxxxx'x obligations under this Agreement and the consummation of the
transactions set forth in this Agreement, in the Advisory Agreement
and in the Prospectus are not contrary to the provisions of Xxxxxx'x
formation documents, as applicable, or to the best of its knowledge,
after due inquiry, any applicable statute, law or regulation of any
jurisdiction, and will not result in any violation, breach or default
under any term or provision of any undertaking, contract, agreement or
order to which Xxxxxx is a party or by which Xxxxxx is bound.
(d) Xxxxxx has all governmental and regulatory licenses,
registrations and approvals required by law as may be necessary to
perform its obligations under the Advisory Agreement and this
Agreement and to act as described in the Prospectus (including,
without limitation, registration as a commodity
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trading advisor under the CE Act and membership as a commodity
trading advisor with the National Futures Association ("NFA")).
(e) Xxxxxx is, and at all times through the final monthly
closing date of the Offering and during the term of this Agreement and
the Advisory Agreement will be, a corporation duly formed and validly
existing and in good standing under the laws of Delaware and in good
standing and qualified to do business in each jurisdiction in which
the nature or conduct of its business requires such qualifications and
the failure to be so qualified would materially adversely affect
Xxxxxx'x ability to perform its obligations hereunder or under the
Advisory Agreement. Xxxxxx has full capacity and authority to conduct
its business and to perform its obligations under the Advisory
Agreement and this Agreement, and to act as described in the
Prospectus.
(f) Xxxxxx has supplied to or made available for review by the
General Partners and AEFA all documents, statements, agreements and
workpapers requested by them relating to all accounts covered by
Xxxxxx'x Past Performance History which are in Xxxxxx'x possession or
to which it has access.
(g) Without limiting the generality of paragraph (a) of this
Section 1, neither Xxxxxx nor any of its principals has managed,
controlled or directed, on an overall discretionary basis, the trading
for any commodity account which is required by CFTC regulations and
the rules and regulations under the 1933 Act to be disclosed in the
Registration Statement and the Prospectus which is not set forth in
the Registration and the Prospectus as required.
(h) Xxxxxx does not provide any services to any persons or
conduct any business involving advice with respect to investments
other than
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commodities (as defined in Section 2(a)(1) of the CE Act),
commodity interests (as defined in CFTC Regulation Section 4.10(a)
under the CE Act), and forward contracts on foreign currencies, except
as has been disclosed in writing to the General Partners. Xxxxxx is
not required to be registered as an investment adviser under the
United States Investment Advisers Act of 1940, as amended (the
"ADVISERS ACT") or any state law.
(i) As of the date hereof, there has been no material change in
Xxxxxx'x Past Performance History as set forth in the Registration
Statement or in the Prospectus under the caption "Past Performance of
JWH and Xxxxxx" which has not been communicated in writing to and
received by the General Partners and AEFA or their counsel.
(j) Xxxxxxx Xxxxxx devotes, and will continue to devote, during
the term of the Advisory Agreement and this Agreement, a substantial
portion of his time to the conduct of the business of Xxxxxx.
(k) Since the date of the Advisory Agreement, (i) there has not
been any material adverse change in the condition, financial or
otherwise, of Xxxxxx or in the earnings, affairs or business prospects
of Xxxxxx, whether or not arising in the ordinary course of business,
and (ii) there have not been any material transactions entered into by
Xxxxxx other than those in the ordinary course of its business which
have not previously been disclosed by Xxxxxx in writing to the General
Partners.
(l) Except as disclosed in the Registration Statement and the
Prospectus, there is no pending, or to the best knowledge of Xxxxxx,
after due inquiry, threatened or contemplated action, suit or
proceeding before or by any court, governmental, administrative or
self-regulatory body or arbitration panel to which Xxxxxx or its
principals is a party, or to which any of the assets of
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Xxxxxx is subject which might reasonably be expected to result in
any material adverse change in the condition (financial or
otherwise), business or prospects of Xxxxxx or might reasonably be
expected to materially adversely affect any of the material assets
of Xxxxxx or which might reasonably be expected to (A) materially
impair Xxxxxx'x ability to discharge its obligations to the
Partnership, or (B) result in an action, suit or proceeding which
would require disclosure in the Registration Statement and/or the
Prospectus; and Xxxxxx has not received any notice of an
investigation by (i) the NFA regarding non-compliance with its rules
or the CE Act, (ii) the CFTC regarding non-compliance with the CE
Act, or the rules and regulations thereunder, or (iii) any exchange
regarding non-compliance with its rules, which investigation might
reasonably be expected to (A) materially impair Xxxxxx'x ability to
discharge its obligations to the Partnership or (B) result in a
matter which would require disclosure in the Registration Statement
and/or the Prospectus.
2. COVENANTS OF XXXXXX. If, at any time during the term of the
Advisory Agreement or this Agreement, Xxxxxx discovers any fact or
omission, or any event or change of circumstances has occurred which would
make Xxxxxx'x representations and warranties in Section 1 inaccurate or
incomplete in any material respect, or which might render the Prospectus,
with respect to (i) Xxxxxx or its principals, (ii) Xxxxxx'x Trading
Approach, or (iii) Xxxxxx'x Past Performance History, untrue or misleading
in any material respect, Xxxxxx will provide immediate written notification
to the Partnership, the General Partners, CIS and AEFA of any such fact,
omission, event or change of circumstance, and the facts related thereto,
and it is agreed that the failure to provide such notification or the
failure to continue to be in compliance with the
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foregoing representations and warranties during the term of the Advisory
Agreement or this Agreement within a reasonable time following such
notification shall be cause for the Partnership and the General Partners
to terminate the Advisory Agreement with Xxxxxx on prior written notice
to Xxxxxx. Xxxxxx also agrees that from and after the Effective Date of
the Registration Statement and until the final monthly closing date of
the Offering, it will provide AEFA, the Fund and the General Partners
with updated month-end information relating to the management by Xxxxxx
of its Past Performance History as disclosed in the performance tables
relating to the performance of Xxxxxx in the Prospectus under the caption
"Past Performance of JWH and Xxxxxx." Xxxxxx shall use its best efforts
to provide such information within a reasonable period of time after the
end of the month to which such updated information relates and agrees to
provide such information in a format which conforms to the past
performance tables relating to Xxxxxx appearing in the Prospectus.
3. MODIFICATION OF REGISTRATION STATEMENT OR PROSPECTUS. If any
event or circumstance occurs as a result of which it becomes necessary, in
the judgment of the General Partners and AEFA, to amend the Registration
Statement in order to make the Registration Statement not materially
misleading or to amend or to supplement the Prospectus in order to make the
Prospectus not materially misleading in light of the circumstances existing
at the time it is delivered to a subscriber, including any such amendment
or supplement required to satisfy the requirement pertaining to commodity
pool operator disclosure documents under the CE Act, as amended, subject to
the limitations set forth in the Advisory Agreement, Xxxxxx will furnish
such information with respect to itself and its principals, as well as its
Trading Approach
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and Past Performance History as the General Partners or AEFA may
reasonably request, and will cooperate to the extent reasonably
necessary in the preparation of any required amendments or supplements to
the Registration Statement and/or the Prospectus.
4. XXXXXX'X CLOSING OBLIGATIONS. On or prior to the initial monthly
closing with respect to the Offering that Xxxxxx manages assets of the
Partnership pursuant to the Advisory Contract ("INITIAL CLOSING DATE"),
Xxxxxx shall deliver or cause to be delivered, at the expense of Xxxxxx, to
AEFA, the Partnership, and CIS and the General Partners, the reports,
certificates, documents and opinions described below addressed to them and,
except as may be set forth below, dated the Initial Closing Date:
(a) A report from Xxxxxx which shall present, for the period
from the date after the last day covered by such Advisor's Past
Performance History as set forth under "Past Performance of JWH and
Xxxxxx" in the Prospectus to the latest practicable day before the
Initial Closing Date, figures which shall show the estimated past
performance of Xxxxxx for such period, and which shall certify that,
to the best of its knowledge, such figures are complete and accurate
in all material respects.
(b) A certificate of Xxxxxx in the form proposed prior to the
Initial Closing Date by counsel to AEFA, the Partnership, CIS and the
General Partners, with such changes in such form as are proposed by
Xxxxxx or its counsel and are acceptable to AEFA, the Partnership, CIS
and the General Partners and their counsel so as to make such form
mutually acceptable to
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AEFA, the Partnership, CIS, the General Partners, Xxxxxx, and their
respective counsel, to the effect that:
(i) The representations and warranties of Xxxxxx in
Section 1 above are true and correct in all material respects on
the date of the certificate as though made on such date.
(ii) Nothing has come to such Xxxxxx'x attention which would
cause Xxxxxx to believe that, at any time from the time the
Registration Statement initially became effective to the Initial
Closing Date, the Registration Statement, as amended from time to
time, or the Prospectus, as amended or supplemented from time to
time, with respect to Xxxxxx, or the affiliates, controlling
persons, shareholders, partners, directors, officers or employees
of any of the foregoing (as applicable), or with respect to
Xxxxxx'x Trading Approach or Past Performance History, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein (with respect to the Prospectus, in light
of the circumstances in which they were made) not misleading.
(iii) Since the initial effective date of the Registration
Statement no event or change of circumstance has occurred with
respect to Xxxxxx, or the affiliates, controlling persons,
shareholders, partners, directors, officers or employees of any
of the foregoing (as applicable), or with respect to Xxxxxx'x
Trading Approach or Past Performance History, which should have
been set forth in an amendment of, or supplement to,
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the Registration Statement or the Prospectus but which has not
been so set forth.
(iv) Xxxxxx has performed all covenants and agreements
herein contained to be performed on its part at or prior to the
Initial Closing Date.
(c) A certificate of Xxxxxx (together with such supporting
documents as are set forth in the certificate), in the form proposed
prior to the Initial Closing Date by counsel to AEFA, the Partnership,
CIS and the General Partners, with such changes in such form as are
proposed by Xxxxxx or its counsel and are acceptable to AEFA, the
Partnership, CIS and the General Partners and their respective counsel
so as to make such form mutually acceptable to AEFA, the Partnership,
CIS, the General Partners, Xxxxxx, and their respective counsel, with
respect to, as applicable, (i) the continued effectiveness of the
organizational documents of Xxxxxx, (ii) the continued effectiveness
of Xxxxxx'x registration as a commodity trading advisor under the CE
Act and membership with the NFA and (iii) the incumbency and genuine
signature of the President or Director of Xxxxxx.
(d) A certificate from the State of Delaware, to be dated at, on
or around the Initial Closing Date, with respect to Xxxxxx'x formation
and good standing.
(e) An opinion of counsel, in form and substance satisfactory to
the Partnership, CIS, the General Partners and AEFA and their
respective counsel, to the following effect:
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(i) Xxxxxx is (A) a duly formed and validly existing
corporation in good standing under the laws of the State of
Delaware, and validly existing, in good standing and qualified to
do business in each other jurisdiction in which the nature or
conduct of its business requires such qualification and the
failure to be duly qualified would materially adversely affect
Xxxxxx'x ability to perform its obligations under this Agreement
or the Advisory Agreement and (B) Xxxxxx has full corporate power
and authority under its Certificate of Incorporation to perform
its obligations under the Advisory Agreement and this Agreement,
and to act as described in the Registration Statement and the
Prospectus.
(ii) The Advisory Agreement and this Agreement have been
duly and validly authorized, executed and delivered on behalf of
Xxxxxx, and each agreement constitutes the legal, valid and
binding obligations of Xxxxxx, enforceable in accordance with
their respective terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws at the time in effect affecting the enforceability
generally of rights of creditors, or by applicable general equity
principles of specific performance, and except that the
enforceability of the indemnification provisions may be limited
under applicable federal or state securities, commodities and
other laws; and the execution and delivery of such agreements and
the incurrence of the obligations thereunder and the consummation
of the transactions set forth in such agreements and in the
Prospectus will not violate or result in a breach of Xxxxxx'x
formation documents, and, to the best of such
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counsel's knowledge, after due inquiry, will not result in any
violation, breach or default under any term or provision of any
undertaking, contract, agreement or order to which Xxxxxx is a
party or by which Xxxxxx is bound.
(iii) Subject to the following paragraph, to the best of such
counsel's knowledge, after due inquiry, Xxxxxx has obtained all
required governmental and regulatory licenses, registrations and
approvals required by law as may be necessary in order to perform
its obligations under the Advisory Agreement and this Agreement
and to act as described in the Registration Statement and the
Prospectus (including, without limitation, registration as a
commodity trading advisor under the Commodity Exchange Act, as
amended, and membership as a commodity trading advisor with the
NFA) and such licenses, registrations and approvals have not, to
the best of such counsel's knowledge, after due inquiry, been
rescinded, revoked or otherwise removed.
(iv) To the best of such counsel's knowledge, except as
described in the Prospectus, there is no pending, threatened or
contemplated action, suit or proceeding, known to such counsel,
before or by any court, governmental or regulatory body or
arbitration panel to which Xxxxxx or any of the assets of Xxxxxx
or any of its principals is subject and which might reasonably be
expected to result in any material adverse change in the
condition (financial or otherwise), business or prospects of
Xxxxxx or any of its principals or might reasonably be expected
to materially adversely affect any of the assets of Xxxxxx or any
of its principals or
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which might reasonably be expected to (A) materially impair
Xxxxxx'x ability to discharge its obligations to the Partnership
or (B) result in a matter which would require disclosure in the
Registration Statement or Prospectus; and, to the best of such
counsel's knowledge, neither Xxxxxx nor any of its principals
has received any notice of an investigation by (i) the NFA
regarding non-compliance with its rules or the Commodity
Exchange Act, as amended, (ii) the CFTC regarding non-compliance
with such Act or the Regulations issued thereunder or (iii) any
exchange, regarding non-compliance with its rules, which
investigation might reasonably be expected to (A) materially
impair Xxxxxx'x ability to discharge its obligations to the
Partnership or (B) result in a matter which would require
disclosure in the Registration Statement or Prospectus.
(v) With respect to Xxxxxx and the affiliates, controlling
persons, shareholders, partners, directors, officers and
employees of any of the foregoing, as applicable, and with
respect to Xxxxxx'x Trading Approach and Past Performance
History, nothing has come to the attention of such counsel that
leads such counsel to believe that the Registration Statement (at
the time it initially became effective and at the time any post-
effective amendment thereto became effective) or the Prospectus
(as first filed pursuant to Rule 424(b) of the 1933 Act or as
subsequently filed pursuant to Rule 424 of the 1933 Act or at the
Initial Closing Date) contains any untrue statement of a material
fact or omits to state a material fact required to be stated
therein or which is necessary to make the statements therein
(with respect to the Prospectus, in light of the
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circumstances in which they are made) not misleading, except
that such counsel is not required to express any opinion or
belief as to the financial statements or other financial or
statistical data, or as to the Past Performance Tables
contained in the Registration Statement or the Prospectus, under
the heading "Past Performance of JWH and Xxxxxx".
On or prior to subsequent monthly closings (each a "MONTHLY CLOSING
DATE"), Xxxxxx shall deliver, at the expense of Xxxxxx, to AEFA, the
Partnership, CIS and the General Partners the following report and certificate
described below addressed to them, dated the Monthly Closing Date:
(a) A report from Xxxxxx which shall present the estimated past
performance of Xxxxxx for the period from the date after the last day
covered by the Xxxxxx'x Past Performance History as set forth under
"Past Performance of JWH and Xxxxxx" in the Prospectus to the latest
practicable day before the Monthly Closing Date, and which shall
certify that, to the best of its knowledge, such figures are complete
and accurate in all material respects.
(b) A statement from Xxxxxx which shall certify that the
statements, representations and warranties made in certificates
delivered by Xxxxxx on the Initial Closing Date pursuant to Section 4
of this Representation Agreement remain true, made on the Monthly
Closing Date, and such statements, representations and warranties may
continue to be relied upon by the parties to whom they are addressed.
5. XXXXXX'X ACKNOWLEDGMENTS. Xxxxxx acknowledges that the
Partnership may at any time withdraw the Registration Statement from the
SEC or otherwise terminate the Registration Statement or the offering of
Units, and upon any such
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withdrawal or termination, this Agreement shall terminate and none of the
parties hereto shall have any obligation to any other party pursuant to
this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND THE GENERAL
PARTNERS. The Partnership and the General Partners hereby represent and
warrant to Xxxxxx and CIS that:
(a) On the Date hereof the Partnership is, and at all times
through the final Monthly Closing Date and during the term of this
Agreement and the Advisory Agreement will be, a duly formed and
validly existing limited partnership in good standing under the laws
of the state of Delaware, and each General Partner is, and at all
times through the final Monthly Closing Date and during the term of
this Agreement and the Advisory Agreement will be, a duly formed and
validly existing corporation in good standing under the laws of the
state of Delaware with respect to CISI and under the laws of the state
of Minnesota with respect to IDS Futures, and each General Partner is,
and at all times through the final Monthly Closing Date and during the
term of this Agreement and the Advisory Agreement will be, in good
standing and qualified to do business as a foreign corporation in each
jurisdiction in which the nature or conduct of its business requires
such qualifications and the failure to be so qualified would
materially adversely affect its ability to act as general partner of
the Partnership and perform its obligations hereunder and under the
Advisory Agreement, and each has full capacity and authority to
conduct its business and to perform its obligations under the Advisory
Agreement and this Agreement, and to act as described in the
Registration Statement and the Prospectus.
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(b) This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Partnership and each General
Partner, respectively, and is a valid and binding agreement of the
Partnership and each General Partner, respectively, enforceable in
accordance with its terms. The performance of the Partnership's and
each General Partner's obligations under this Agreement and the
consummation of the transactions set forth in this Agreement, in the
Advisory Agreement and in the Registration Statement and Prospectus
are not contrary to the provisions of the Partnership's Limited
Partnership Agreement or Certificate of Limited Partnership or each
General Partner's Certificate of Incorporation, respectively, or to
the best of their knowledge, after due inquiry, any applicable
statute, law or regulation of any jurisdiction and will not result in
any violation, breach or default under any term or provision of any
undertaking, contract, agreement or order, to which the Partnership or
each General Partner, respectively, is a party or by which the
Partnership or each General Partner, respectively, is bound.
(c) The Partnership and each General Partner have obtained all
required governmental and regulatory licenses, registrations and
approvals required by law as may be necessary to act as described in
the Registration Statement and the Prospectus (including, without
limitation, each General Partners' registration as a commodity pool
operator under the CE Act and membership as a commodity pool operator
with the NFA).
(d) The Partnership is not required to be registered as an
investment company under the United States Investment Company Act of
1940, as amended (the "INVESTMENT COMPANY ACT").
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(e) All authorizations, consents or orders of any court, or of
any federal, state or other governmental or regulatory agency or body
required for the valid authorization, issuance, offer and sale of the
Units have been obtained, and, to the best of its knowledge, after due
inquiry no order preventing or suspending the use of the Prospectus
with respect to the Units has been issued by the SEC, the CFTC or the
NFA. The Registration Statement and the Prospectus contain all
statements which are required to be made therein, conform in all
material respects with the requirements of the 1933 Act and the CE
Act, and the rules and regulations of the SEC and the CFTC,
respectively, thereunder, and with the rules of the NFA, and do not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein (with respect to the Prospectus, in light of the
circumstances in which they are made) not misleading, and at all times
subsequent hereto up to and including the final Monthly Closing Date,
the Registration Statement and the Prospectus will contain all
statements required to be made therein and will conform in all
material respects with the requirements of the 1933 Act and the CE
Act, and the rules and regulations of the SEC and the CFTC,
respectively, thereunder, and will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein (with respect to
the Prospectus, in light of the circumstances in which they are made)
not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished to the
General Partners, the Partnership or to AEFA by or on behalf
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of CIS or Xxxxxx, including, without limitation, all references to
CIS or Xxxxxx and their affiliates, controlling persons,
shareholders, partners, directors, officers and employees, as well
as to Xxxxxx'x Trading Approach and Past Performance History.
(f) The General Partners and the Partnership shall not
distribute the Registration Statement or the Prospectus.
7. COVENANTS OF THE GENERAL PARTNERS AND THE PARTNERSHIP. If, at
any time during the term of the Advisory Agreement or this Agreement, an
event or change of circumstance has occurred which would make the General
Partners' or the Partnership's representations and warranties in Section 6
of this Agreement inaccurate or incomplete in any material respect, the
Partnership and the General Partners, as appropriate, promptly will provide
notification to Xxxxxx and CIS of such event or change of circumstance and
the facts related thereto, and it is agreed that the failure to provide
such notification or the failure to continue to be in compliance with the
foregoing representations and warranties during the term of this Agreement
within a reasonable time following such notification shall be cause for
Xxxxxx to terminate the Advisory Agreement on prior written notice to the
Partnership and the General Partners.
8. CLOSING OBLIGATIONS OF THE PARTNERSHIP AND THE GENERAL PARTNERS.
On or prior to the initial closing with respect to the Offering ("INITIAL
CLOSING DATE"), the Partnership and the General Partners, as specified
below, shall deliver or cause to be delivered to Xxxxxx and CIS, the
certificates, documents and opinions described below addressed to Xxxxxx
and CIS and, except as may be set forth below, dated the Initial Closing
Date:
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(a) Certificates of the Partnership and the General Partners,
addressed to Xxxxxx and CIS, in the form proposed prior to the Initial
Closing Date by counsel to the Partnership and the General Partners
with such changes in such form as are proposed by Xxxxxx, CIS and
their respective counsel and are acceptable to the Partnership, the
General Partners and their counsel so as to make such form mutually
acceptable to the Partnership, the General Partners, Xxxxxx, CIS and
their respective counsel, with respect to, as applicable (i) the
continued effectiveness of the Limited Partnership Agreement and the
Certificate of Limited Partnership of the Partnership and the
Certificate of Incorporation of each General Partner, (ii) the
continued effectiveness of the registration of each General Partner as
a commodity pool operator under the CE Act and membership with the NFA
and (iii) the incumbency and genuine signature of the President and
Secretary of each General Partner.
(b) Certificates from the State of Delaware with respect to the
Partnership and CISI and from the State of Minnesota with respect to
IDS Futures to be dated at, on or around the Initial Closing Date as
to the formation and good standing of the Partnership and each General
Partner.
(c) Certificates of the Partnership and the General Partners in
the form proposed prior to the Initial Closing Date by counsel to the
Partnership and the General Partners with such changes in such form as
are proposed by Xxxxxx, CIS and their respective counsel and are
acceptable to the Partnership, the General Partners and their counsel
so as to make such form mutually acceptable to the Partnership, the
General Partners, Xxxxxx, CIS and their respective counsel, to the
effect that:
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(i) The representations and warranties in Section 6 above
are true and correct in all material respects on the date of the
certificates as though made on such date, and
(ii) The Partnership and the General Partners have each
performed all covenants and agreements herein contained to be
performed on their part at or prior to the Initial Closing Date.
On or prior to subsequent monthly closings, the Partnerships and the
General Partners, as specified below, shall deliver or cause to be delivered to
Xxxxxx and CIS, the certificates described below addressed to Xxxxxx and CIS,
dated the Monthly Closing Date:
(a) A certificate from each General Partner to the effect that
the statements, representations and warranties made in certificates
delivered by such General Partner on the Initial Closing Date pursuant
to Section 8 of this Representation Agreement remain true, accurate
and complete in all material respects as if made on the Monthly
Closing Date, and such statements, representations and warranties may
continue to be relied upon by the parties to whom they are addressed.
(b) A certificate from the Partnership to the effect that the
statements, representations and warranties made in certificates
delivered by the Partnership on the Initial Closing Date pursuant to
Section 8 of the Representation Agreement remain true, accurate and
complete in all material respects as if made on the Monthly Closing
Date, and such statements, representations and warranties may continue
to be relied upon by the parties to whom they are addressed.
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9. REPRESENTATIONS AND WARRANTIES OF AEFA. AEFA hereby represents
and warrants to Xxxxxx and to CIS that any use or distribution of the
Registration Statement and the Prospectus will comply with the terms and
conditions set forth in the Prospectus, with the Securities Act of 1933, as
amended, the Securities Act of 1934, as amended, all applicable state
securities laws, the rules and regulations promulgated under all such Acts
and all such laws, and all applicable rules and regulations of the National
Association of Securities Dealers, Inc. and any other self-regulatory
organization.
10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants in this Agreement, or contained
in certificates required to be delivered hereunder, shall survive the
delivery of any payment for the Units under the Selling Agreement and the
termination of the Advisory Agreement and this Agreement, with respect to
any matter arising while the Advisory Agreement or this Agreement was in
effect. Furthermore, all representations, warranties and covenants
hereunder shall inure to the benefit of the parties to this Agreement and
their respective successors and permitted assigns.
11. INDEMNIFICATION. (a) In any action in which AEFA, the
Partnership, CIS, or the General Partners, or the controlling persons,
shareholders, partners, directors, officers and/or employees of any of the
foregoing are parties (other than an action brought by or in the right of
Xxxxxx or by or in the right of any of the foregoing persons), Xxxxxx
agrees (A) to indemnify and hold harmless the foregoing persons against any
loss, claim, damage, charge, liability or expense (including, without
limitation, reasonable attorneys' and accountants' fees) to which such
persons may become subject, insofar as such loss, claim, damage, charge,
liability or expense arises
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out of or is based upon (i) any misrepresentation or alleged
misrepresentation or breach or alleged breach of any warranty, covenant
or agreement of Xxxxxx contained in this Agreement or (ii) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement or the Prospectus or the omission or the
alleged omission to state in the Registration Statement or the
Prospectus a material fact required to be stated therein or necessary to
make the statements therein (with respect to the Prospectus, in light of
the circumstances in which they are made), not misleading in each case
under this subclause (ii) to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with information
furnished by Xxxxxx, including, without limitation, all references to
Xxxxxx and its affiliates, controlling persons, shareholders, partners,
directors, officers and employees, as well as to Xxxxxx'x Trading
Approach and Past Performance History, and including but not limited to,
any notification required and given under this Agreement, including
liabilities under the 1933 Act, the Exchange Act and the CE Act, and (B)
to reimburse each of the foregoing persons for any legal or other fees
or expenses reasonably incurred in connection with investigating or
defending any action or claim arising out of or based upon any of the
foregoing.
(b) In any action in which Xxxxxx, CIS, or the controlling persons,
shareholders, partners, directors, officers and/or employees of any of the
foregoing are parties (other than an action brought by or in the right of
the Partnership, the General Partners or AEFA or by or in the right of any
of the foregoing persons), the General Partners agree (A) to indemnify and
hold harmless the foregoing persons against any loss, claim, damage,
charge, liability or expense (including, without
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limitation, reasonable attorneys' and accountants' fees) to which such
persons may become subject, insofar as such loss, claim, damage, charge,
liability or expense arises out of or is based upon (i) any
misrepresentation or alleged misrepresentation or breach or alleged
breach of any warranty, covenant or agreement of the Partnership or the
General Partners contained in this Agreement, or (ii) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement or the Prospectus or the omission or the
alleged omission to state in the Registration Statement or the
Prospectus a material fact required to be stated therein or necessary to
make the statements therein (with respect to the Prospectus, in light of
the circumstances in which they are made), not misleading in each case
under this subclause (ii) except to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with information furnished
by CIS or Xxxxxx including, without limitation, all references to CIS or
Xxxxxx and its affiliates, controlling persons, shareholders, partners,
directors, officers and employees, as well as to Xxxxxx'x Trading
Approach and Past Performance History, and including but not limited to
any notification required and given under this Agreement, including
liabilities under the 1933 Act, the Exchange Act and the CE Act, and (B)
to reimburse each of the foregoing persons for any legal or other fees
or expenses reasonably incurred in connection with investigating or
defending any action or claim arising out of or based upon any of the
foregoing.
(c) None of the indemnifications contained in this Section 11 shall
be applicable with respect to default judgments, confessions of judgment or
settlements
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entered into by an indemnified party claiming indemnification
without the prior written consent of the indemnifying party.
(d) Promptly after receipt by an indemnified party under this
Section 11 of notice of any claim or dispute or commencement of any action
or litigation, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party under this Section 11, notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 11.
In case any such claim, dispute, action or litigation is brought or
asserted against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate therein, and to the extent that it may wish, to assume the
defense thereof, with counsel specifically approved in writing by such
indemnified party, following notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof: in
which event, the indemnifying party will not be liable to such indemnified
party under this Section 11 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof,
but shall continue to be liable to the indemnified party in all other
respects as heretofore set forth in this Section 11. Notwithstanding any
other provisions of this Section 11, if, in any claim, dispute, action or
litigation as to which indemnity is or may be available, any indemnified
party reasonably determines that its interests are or may be, in whole or
in part, adverse to the interests of the indemnifying party, the
indemnified party may retain its own counsel in connection with such claim,
dispute, action or litigation and shall continue to be indemnified by the
indemnifying party for
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any legal or any other expenses reasonably incurred in connection with
investigating or defending such claim, dispute, action or litigation.
(e) Expenses incurred by an indemnified party in defending a
threatened or asserted claim or a threatened or pending action may be paid
by the indemnifying party in advance of final disposition or settlement of
such matter, if and to the extent that the person on whose behalf such
expenses are paid shall agree to reimburse the indemnifying party in the
event indemnification is not permitted under this Section 11 upon final
disposition or settlement. Expenses incurred in defending a threatened or
pending civil, administrative or criminal action, suit or proceeding
against Xxxxxx and one or both General Partners shall be paid initially by
such General Partner(s), subject to subsequent proportionate reimbursement
by Xxxxxx in the event of an unfavorable determination with respect to
Xxxxxx; provided, that such initial payment of expenses shall not be made
by such General Partner(s) on behalf of Xxxxxx if Xxxxxx elects to be
represented by counsel of its own choice or if the defense of Xxxxxx
involves distinct issues of law or of fact, and, provided further, that in
the event of the initial payment of such expenses by such General
Partner(s), such General Partner(s) shall have the exclusive right to
select counsel.
(f) The parties hereto acknowledge and agree on their own behalf that
the indemnities provided in this Agreement shall be inapplicable in the
event of any loss, claim, damage, charge or liability arising out of or
based upon, but limited to the extent caused by, any misrepresentation or
breach of any warranty, covenant, or agreement of any indemnified party to
any indemnifying party contained in this Agreement.
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NOTICES. Each notice, request, demand, approval or other communications
which may be or is required to be given under this Agreement shall be in writing
in English and shall be deemed to have been properly given when delivered
personally at the address set forth below for the intended party during normal
business hours at such address, when sent by facsimile or other electronic
transmission to the respective facsimile transmission numbers of the parties set
forth below with telephone confirmation of receipt, or when sent by recognized
overnight international courier service or by prepaid registered air mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Partnership: IDS Managed Futures, L.P.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
With a copy to: Xxxxxxx and Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
If to CISI: CIS Investments, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
With a copy to: Xxxxxxx and Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
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If to IDS Futures: IDS Tower 10
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
If to Xxxxxx: VIA REGULAR MAIL
Xxxxxx Investment Corporation
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
VIA COURIER SERVICE
Xxxxxx Investment Corporation
Xxxxxxxx Xxxxxxxx, 0xx Xxxxx
San Xxxxxx Between 5th and 6th
Xxxxxx, Xxxxxxxxxx 00000-0000
With a copy to: Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
If to CIS: Cargill Investor Services, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: L. Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: Xxxxx Xxxxxx, Esq.
Xxxxxxx, Xxxxxxxxxxxx
Xxxxxxx Office Center
00000 XxXxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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If to AEFA: American Express Financial Advisors Inc.
IDS Tower 10
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Notices shall be given to such other addressee or address, or both, or by way of
such other facsimile transmission number, as a particular party may from time to
time designate by written notice to the other parties hereto. Each notice,
request, demand, approval or other communication which is sent in accordance
with this Section shall be deemed given and received for all purposes of this
Agreement as of five business days after the date of deposit thereof for prepaid
registered air mail in a duly constituted post office or branch thereof in the
county of origin of the sending party, two business days after deposit with a
recognized overnight international courier service or, in the case of a
facsimile transmission, the earlier of (i) confirmation of receipt of said
facsimile transmission by the intended recipient thereof or a person at the same
business address as said intended recipient; or (ii) electronic verification by
the sender's facsimile machine of the receipt of said facsimile transmission by
the intended recipient's facsimile machine; provided, however, that any such
electron verification which does not occur prior to 5:00 p.m. (local time of the
recipient thereof) a business day shall be deemed to have occurred at 9:00 a.m.
(local time of the, recipient: thereof) on the next business day following the
date of such electronic verification. Notice given to a party hereto by any
other method shall only be deemed to be given and received when actually
received in writing by such party.
13. GOVERNING LAW. This Agreement shall be deemed to be made under
the laws of the State of Delaware applicable to contracts made and to be
performed in that State and shall be governed by and construed in
accordance with the laws of that State, without regard to the conflict of
laws principles.
14. ARBITRATION. The parties hereto agree that any dispute relating
to the subject matter of this Agreement shall be settled and determined by
arbitration in the City of Chicago pursuant to the rules of the National
Futures Association.
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15. ASSIGNMENT. This Agreement may not be assigned by any party
without the express prior written consent of each of the other parties
hereto.
16. AMENDMENT OR MODIFICATION. This Agreement may not be amended or
modified except by the written consent of each of the parties hereto.
17. SUCCESSORS. Except as forth in Section 10, this Agreement is
made solely for the benefit of and shall be binding upon the Partnership,
CIS, each General Partner, AEFA and Xxxxxx, and the respective successors
and permitted assigns of each of them, and no other person shall have any
right or obligation under this Agreement. The terms "SUCCESSORS" and
"ASSIGNS" shall not include any purchasers, as such, of Units.
18. SURVIVAL. The provisions of this Agreement shall survive the
termination of this Agreement with respect to any matter arising while this
Agreement was in effect.
19. 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.
20. HEADINGS. Headings to Sections herein are for the convenience of
the parties only, and are not intended to be or to affect the meaning or
interpretation of this Agreement.
21. COMPLETE AGREEMENT. Except as otherwise provided herein, this
Agreement and the Advisory Agreement, as amended, constitute the entire
agreement
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between the parties with respect to the matters referred to herein, and
no other agreement, verbal or otherwise, shall be binding upon the parties
hereto.
22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which,
when taken together, shall constitute one original instrument.
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IN WITNESS WHEREOF, this Representation Agreement has been executed as of
the date and year first above written.
IDS MANAGED FUTURES, L.P.
By CIS INVESTMENTS, INC.,
General Partner AMERICAN EXPRESS FINANCIAL ADVISORS INC.
By_______________________________ By _____________________________________
Its_____________________________ Its____________________________________
By IDS FUTURES CORPORATION, CARGILL INVESTOR SERVICES, INC.
General Partner
By_______________________________ By _____________________________________
Its_____________________________ Its____________________________________
CIS INVESTMENTS, INC. XXXXXX INVESTMENT CORPORATION
By_______________________________ By _____________________________________
Its_____________________________ Its____________________________________
IDS FUTURES CORPORATION
By_______________________________
Its_____________________________
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