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EXHIBIT 10(o)
MANAGEMENT CONTRACT
THIS MANAGEMENT CONTRACT ("Agreement"), is made and entered into
effective as of the 8th day of November 1995, by and between The Future Fund
II, an Illinois limited partnership (the "Partnership"), Xxxxxxx Asset
Management, Inc., a Delaware corporation and Willowbridge Associates Inc., a
Delaware corporation (the "Trading Advisor").
W I T N E S S E T H:
WHEREAS, the purpose and business of the Partnership is to seek capital
appreciation by trading speculatively in futures contracts, commodities and
commodity options and forward contracts, and any other items which are
currently, or may later become, the subject of futures, forward or options
trading, and other related investments (sometimes hereinafter referred to as
"Contracts") on United States and non-United States exchanges and markets; and
WHEREAS, the Partnership, through Xxxxxxx Asset Management, Inc., its
general partner (the "General Partner"), pursuant to the Limited Partnership
Agreement of the Partnership, is authorized to utilize the services of
professional trading advisors in connection with the trading activities of the
Partnership; and
WHEREAS, the Partnership has heretofore offered units of limited
partnership interest in the Partnership for sale to investors; and
WHEREAS, the Trading Advisor is engaged in the business of making
trading decisions on behalf of itself and others regarding the purchase and
sale of Contracts; and
WHEREAS, the Partnership and the Trading Advisor each desire the
Trading Advisor to make trading decisions for the Partnership with respect to
the assets of the Partnership allocated to be managed by the Trading Advisor
(the "Allocated Assets") on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual premises and agreements
set forth herein, the parties hereto do agree as follows:
1. DUTIES OF THE TRADING ADVISOR.
(a) The Partnership hereby appoints the Trading Advisor, and the
Trading Advisor hereby accepts appointment, as a trading advisor of the
Partnership in connection with the trading activities of the Partnership.
(b) Upon the Trading Advisor's commencing of trading operations for
the Partnership and for the period and on the terms and conditions set forth in
this Agreement, the Trading Advisor shall have sole authority and
responsibility, as the Partnership's agent and
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attorney-in-fact, for trading the Allocated Assets in Contracts and in
accordance with the Trading Advisor's Select Investment Program utilizing the
Argo Trading System ("Trading Approach"; which term, for purposes of this
Agreement, shall include trading approaches, systems, instructions, methods,
models, strategies, methodologies and formulas) as described in the Trading
Advisor's Disclosure Document dated June 30, 1995 (the "Disclosure Document"),
subject to the trading policies of the Partnership furnished to the Trading
Advisor in writing ("Trading Policies"). The parties hereto acknowledge that
the Trading Advisor will trade Contracts for the Partnership independently of
any other trading advisor retained by the Partnership. For purposes of this
Agreement, the term "Contracts" shall not include securities and options
thereon.
(c) Subject to receipt of adequate assurances of confidentiality, the
Trading Advisor agrees, upon request, to describe to the General Partner its
practices with respect to the leverage used by the Trading Advisor in managing
the Partnership's account relative to other accounts managed by the Trading
Advisor using the Trading Approach to enable the General Partner to determine
whether the "trading level" at which the Trading Advisor is currently managing
the Partnership's account is the level currently designated in writing by the
General Partner.
(d) The General Partner and the Partnership acknowledge receipt of
the Trading Advisor's Disclosure Document. The Trading Advisor shall promptly
furnish the Partnership with a copy of each amended, supplemented or updated
Disclosure Document of the Trading Advisor filed with the Commodity Futures
Trading Commission (the "CFTC") and the National Futures Association ("NFA")
upon acceptance thereof by the CFTC. Prior to the commencement of trading on
behalf of the Partnership, the Partnership shall deliver to the Trading
Advisor, and renew when necessary, a Commodity Trading Authorization, in the
form attached hereto as Exhibit 1, appointing the Trading Advisor as the
Partnership's agent and attorney-in-fact for such purpose. Other than
"give-up" agreements with executing brokers approved by the General Partner,
all trades for the account of the Partnership shall be made through such banks,
brokers and dealers as the General Partner shall direct, and the Trading
Advisor shall have no authority or responsibility for selecting any such banks,
brokers or dealers in connection with the execution of transactions for the
Partnership or for the negotiation of commission rates charged therefor;
provided, however, that the General Partner shall notify the Trading Advisor of
any applicable changes in the commission rates charged by the Partnership's
banks, brokers and dealers with respect to transactions entered into with
respect to the Allocated Assets. The General Partner will cause the
Partnership's commodity broker to provide the Trading Advisor with copies of
all confirmation, purchase and sale, monthly and similar statements at the time
such statements are available to the General Partner.
(e) In the event the Trading Advisor and its principals [as that term
is defined in Regulation Section 4.10(e) promulgated by the CFTC under the
Commodity Exchange Act, as amended (the "Act")], shareholders, partners,
employees and affiliates or any person who controls the foregoing
(collectively, "Principals and Affiliates"), wish to use trading programs,
systems or strategies other than or in addition to the Trading Approach in
connection with its trading for the Partnership, either in whole or in part, it
may not do so unless the Trading Advisor gives the General Partner 15 days'
prior written notice of its intention to utilize such different trading
programs, systems or strategies and the General Partner consents thereto in
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writing. Non-material changes in the Trading Approach may be instituted
without prior written approval.
(f) The Trading Advisor agrees to make all material disclosures to
the Partnership regarding itself and its Principals and Affiliates, their
trading performance and general trading methods, their accounts (but not the
identities of customers) and otherwise as are required in the reasonable
judgment of the General Partner or the Partnership to be made in any filings
required by any governmental body or by any applicable law, regulation, rule or
order; provided, that, the General Partner and the Partnership shall not
distribute any Disclosure Notice relating to the appointment of the Trading
Advisor as a commodity trading advisor of the Partnership or other description
of the Trading Advisor, its Principals and Affiliates or its or their trading
performance without the prior written consent of the Trading Advisor. Within
three business days following receipt of such description, the Trading Advisor
shall provide the General Partner in writing, any changes thereto and shall
review and approve such changes prior to its distribution. The Trading Advisor
shall review and provide any revised description within two business days.
Failure to respond to any revised description of the Trading Advisor within
three business days shall constitute the Trading Advisor's consent to such
distribution. Nothing contained in this Agreement shall be construed or deemed
to require the Trading Advisor to disclose the identity of customers or any
confidential or proprietary details of its trading strategies.
(g) The Trading Advisor understands and agrees that the General
Partner intends to designate other trading advisors and to apportion from time
to time to such other trading advisors the management of such portion of the
Partnership's assets as the General Partner shall determine in its absolute
discretion. The designation of other trading advisors and apportionment and
reapportionment of a portion of the Partnership's assets to such trading
advisors shall neither terminate this Agreement nor modify in any regard the
respective rights and obligations of the parties hereto; provided, however, the
Trading Advisor may terminate this Agreement in the event that the Allocated
Assets total less than U.S. $180,000.
(h) The General Partner shall have the right to make additions to, or
withdrawals from, the Allocated Assets (including any "notional" funds
comprising part of the Allocated Assets) at any time upon two days' written
notice to the Trading Advisor. The General Partner agrees that the Trading
Advisor may refuse any additional allocation of funds for any reason. The
General Partner, in its sole discretion, may at any time upon two days' written
notice to the Trading Advisor, remove all assets from the management of the
Trading Advisor and may require the Trading Advisor to liquidate existing
positions.
(i) Upon receipt of written instructions from the General Partner,
the Trading Advisor shall immediately cease its trading activities with respect
to the Allocated Assets, close out all existing positions in an orderly manner
and not initiate any new positions unless otherwise instructed by the General
Partner or the Partnership.
(j) The Trading Advisor shall review on a daily basis the positions
held by the Allocated Assets and shall immediately notify the General Partner
of any errors committed by the Trading Advisor or of any trade not executed in
accordance with the Trading Advisor's instructions.
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2. OTHER ACCOUNTS AND ACTIVITIES OF THE TRADING ADVISOR.
(a) The services provided by the Trading Advisor hereunder are
not to be deemed exclusive. Subject to the terms of this Agreement, the Trading
Advisor and its Principals and Affiliates shall be free to trade for their own
accounts and to advise other persons and manage other accounts during the term
of this Agreement and to use the same or different degrees of leverage,
information, computer programs and trading strategies or formulas which they
obtain, produce or utilize in the performance of services for the Partnership.
However, the Trading Advisor represents, warrants and agrees that the rendering
of such consulting, advisory and management services to others will not require
any material change in the Trading Approach and will not materially adversely
affect the capacity of the Trading Advisor to continue to render services to
the Partnership of the quality and nature contemplated by this Agreement.
(b) If, at any time during the term of this Agreement, the Trading
Advisor is required to aggregate the Partnership's Contract positions with the
positions of any other person or entity for purposes of applying CFTC- or
exchange-imposed position limits, the Trading Advisor agrees that it will
promptly notify the General Partner if the Partnership's positions are included
in an aggregate amount which equals or exceeds ninety-five percent (95%) of the
applicable limit. The Trading Advisor agrees that, if its trading
recommendations are altered because of the application of any position limit,
it will not modify the trading instructions with respect to the Partnership's
account in such manner as to affect the Partnership substantially
disproportionately as compared with the Trading Advisor's other accounts. The
Trading Advisor presently believes and represents that existing speculative
position limits will not materially adversely affect its ability to manage the
Partnership's account given the potential size of the Partnership's account and
the Trading Advisor's and its Principals' and Affiliates' current accounts and
all proposed accounts for which they have contracted to act as trading advisor.
The Trading Advisor further represents, warrants and agrees that under no
circumstances will it knowingly or deliberately favor any client or account
managed by it over any other client or account, it being acknowledged, however,
that different trading strategies, methods or degrees of leverage may be
utilized and that accounts may have different trading policies, different
inflows or outflows of equity, commence trading at different times, different
fee structures, different portfolios, different fiscal years and other
differences, and that such differences may cause divergent trading results.
The Partnership and the General Partner acknowledge, however, that if the
Allocated Assets are less than U.S.$1,000,000, the Trading Advisor may not be
able to trade the full Argo Trading System for the Partnership. As a result,
the Partnership's trading performance may be different from the other accounts
traded pursuant to the Argo Trading System.
(c) The Partnership and the General Partner acknowledge and agree
that the Trading Advisor and/or its Principals and Affiliates presently act and
that they may continue to act as advisors for other accounts managed by them
and may continue to receive compensation with respect to services for such
accounts in amounts which may be more or less than the amounts received from
the Partnership. The Trading Advisor agrees that in the management of such
other accounts by it and its Principals and Affiliates, it will act in good
faith to seek to achieve an equitable treatment of all accounts under
management including the Partnership's account with respect to, among other
things, priorities of order entry and position limits.
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(d) The Trading Advisor agrees that it shall make such information
available to the General Partner respecting the performance of the
Partnership's account as compared to the performance of all other accounts
managed by the Trading Advisor and its Principals and Affiliates as shall be
reasonably requested by the General Partner or the Partnership. The Trading
Advisor shall not be required to disclose the identity of its clients or the
performance of proprietary accounts.
3. ALLOCATION OF ASSETS TO THE TRADING ADVISOR. The Trading
Advisor's Allocated Assets initially shall be a total of approximately U.S.
$1,500,000 of which U.S. $0 is notional funding.
4. FEES.
(a) Commencing with the commencement of trading by the Trading
Advisor for the Partnership, the Partnership agrees to pay to the Trading
Advisor as follows:
(i) Management Fee. A monthly management fee equal to 0.166% of the
Net Asset Value of the Allocated Assets as of the close of business on the
last business day of each calendar month (an approximate 2% annual rate). The
definition of the term "Net Asset Value" is set forth in Section 4 of the
Partnership's Limited Partnership Agreement which is attached as Exhibit 2,
hereto.
(ii) For purposes of calculating the management fee, Net Asset Value
of the Allocated Assets shall be determined before reduction for the management
fees or incentive fees, if any, accrued or payable with respect to the
Allocated Assets as of such month-end, and before giving effect to any
distributions, redemptions or reallocations paid or payable at such month-end.
In the event that (A) the Trading Advisor commences trading as of any day other
than the first day of a calendar month, (B) this Agreement is terminated as of
any date other than the last day of a calendar month, or (C) the Partnership
reallocates assets to or from the Trading Advisor as of any day other than the
first or last day of any calendar month, the amount of the management fee shall
be prorated on the basis of the number of business days during such month that
the Allocated Assets (as adjusted in the case of reallocation of assets) were
traded by the Trading Advisor as compared to the total number of business days
in such calendar month. To the extent that the Partnership instructs the
Trading Advisor to trade the Allocated Assets at a "nominal account size" in
excess of the actual assets comprising Allocated Assets, the Trading Advisor's
management fee shall be calculated based upon the "nominal account size" of the
Allocated Assets.
(iii) Incentive Fee. A quarterly incentive fee equal to 15% of
any New Trading Profits (as defined below) achieved during each fiscal quarter.
New Trading Profits during a quarter shall mean the sum of (A) the net of any
profits and losses realized on trades closed out during the period, plus or
minus (B) the change in the net of any unrealized profits and losses on trades
which remained open as of the end of the period (net of accrued brokerage
commissions and other allocated expenses) from the net of any unrealized
profits and losses on trades initiated by the Trading Advisor which remained
open as of the end of the immediately preceding period (net of accrued
brokerage commissions and other allocated expenses), (C) any Trading Advisor
management fees paid or accrued through the end of the period, and (D) the
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Trading Advisor's carryforward loss (as hereinafter defined) from the
immediately preceding period. If the sum of subparagraphs (A) through (D) for
any period is negative, such amount shall be the Trading Advisor's carryforward
loss for the next period. For purposes of calculating incentive fees, interest
income earned on the Allocated Assets will be disregarded. In the event of a
withdrawal from the Allocated Assets at a time when the Trading Advisor has a
carryforward loss in effect, the amount thereof shall be reduced by an amount
determined by multiplying the carryforward loss by a fraction, the numerator of
which shall be the amount of the withdrawal and the denominator of which shall
be the Net Asset Value of the Allocated Assets immediately prior to giving
effect to the withdrawal. In the event that an addition is made to the
Allocated Assets subsequent to a reduction in the Trading Advisor's
carryforward loss by reason of a withdrawal, the Trading Advisor's carryforward
loss shall be increased by or created in an amount (up to the aggregate amount
of prior carryforward loss reductions) determined by multiplying the aggregate
amount of prior carryforward loss reductions by a fraction, the numerator of
which shall be the amount of the addition and the denominator of which shall be
the sum of the previous withdrawals which resulted in carryforward loss
reductions. The incentive fee charged to the Partnership with respect to the
Allocated Assets will be dependent upon the performance of the Trading Advisor
and will not be affected by the performance of any other trading advisor
appointed by the Partnership or the Partnership as a whole. The initial
incentive period shall commence on the date the Trading Advisor commences
trading activity for the Partnership and shall end at the immediate following
quarter-end (even though such period may not be a full quarter). Subsequent
incentive periods shall commence on the first day of the next succeeding fiscal
quarter and end on the last day of such fiscal quarter. In the event this
Agreement is terminated as of any date which is not the end of an incentive
period, an incentive fee will be paid by the Partnership, if earned, with
respect to the Allocated Assets as though such termination date were the last
day of the incentive period. For purposes of calculating the first incentive
fee, the Trading Advisor hereby agrees that it shall assume an initial
carryforward loss (constituting a portion of the Partnership's current overall
carryforward loss) equal to $187,500; which carryforward loss shall not exceed
12.5% of the Allocated Assets hereunder.
(b) Payment of Fees. The management fees and incentive fees due to
the Trading Advisor shall be paid by the Partnership within thirty (30) days of
the end of the calendar period to which they relate. The Partnership expressly
agrees that any such fees due the Trading Advisor shall survive the termination
or other expiration of this Agreement.
5. TRADING ADVISOR INDEPENDENT. The Trading Advisor shall for all
purposes herein be deemed to be an independent contractor to the Partnership
and the General Partner and shall, except as otherwise expressly provided
herein, have no authority to act for or represent the Partnership or the
General Partner in any way or otherwise be deemed a sponsor of the Partnership
or an agent, joint venturer or partner of the Partnership, the General Partner
or of any other trading advisor retained by the Partnership.
6. BROKER.
(a) The Trading Advisor agrees to enter all Contract orders through
E.D. & F. Man International Inc. ("Man"), or such other brokers and forward
contract dealers as may be designated, from time to time, in writing by the
Partnership. The Partnership must consent
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in writing to the use of other floor brokers who will give up such trades to
Man in accordance with exchange rules and the give-up procedures established
by the Partnership from time to time. The Trading Advisor shall be
responsible for any errors committed by any executing broker who gives-up to
Man on behalf of the Partnership. In placing trades for the Partnership's
account, the Trading Advisor agrees that it shall use its standard procedures
for allocating orders among the Trading Advisor's various accounts and not
knowingly favor any other such account over the Partnership's account.
(b) All forward contract and other trades for the Partnership will be
executed through the forward trading and other facilities of such affiliates of
Man or other entities as the Partnership may designate in writing from time to
time.
7. STANDARD OF LIABILITY; INDEMNIFICATIONS.
(a) Standard of Liability. Neither the Trading Advisor nor any
of its Principals and Affiliates shall be liable to the Partnership, the
General Partner or any of their respective successors or assigns under this
Agreement except by reason of (i) acts or omissions to act which constitute bad
faith, negligence or misconduct or (ii) a material breach of any of the
representations, warranties, covenants or agreements of the Trading Advisor set
forth in this Agreement; it being understood that Contract transactions made by
the Trading Advisor on behalf of the Partnership shall be for the account of
the Partnership and the risk of the Partnership. The General Partner
acknowledges that the Trading Advisor makes no guarantee of profits or of
protection against losses.
(b) Indemnity. (i) The Partnership agrees to indemnify and hold
harmless the Trading Advisor and each of its Principals and Affiliates from and
against any and all losses, claims, damages, liabilities, costs and expenses
(including, without limitation, attorneys' and accountants' fees and
disbursements), judgments and amounts paid in settlement (collectively,
"Losses") to which an indemnified person may become subject arising out of this
Agreement, the transactions contemplated hereby or the fact the Trading Advisor
is or was a trading advisor to the Partnership, unless any such Losses arise
out of, relate to, or are based upon the Trading Advisor's failure to meet the
standard of liability applicable to it under SECTION 7(A).
(ii) The Trading Advisor agrees to indemnify and hold harmless the
Partnership, the General Partner and each of their respective Principals and
Affiliates from and against any and all Losses to which they may become
subject, if any such Losses arise out of, relate to, or are based upon the
Trading Advisor's failure to meet the standard of liability applicable to it
under SECTION 7(A).
(c) Promptly after receipt by a party to be indemnified under SECTION
7(B), above, of any notice of the commencement of any action or proceeding,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnified party under such subsection, notify the indemnifying
party in writing of the commencement thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. The requirement
that an indemnifying party be given written notice of the commencement of any
action shall be deemed to be satisfied if such indemnifying party shall have
actual knowledge thereof or shall have been
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given written notice of the commencement of any action or proceeding within a
reasonable time after the commencement thereof. If any such action
shall be brought against any indemnified party and the indemnified party
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, to assume the defense thereof with counsel satisfactory to such
indemnified party, and shall have the right to negotiate and consent to a
settlement thereof, provided that the indemnified party shall have consented to
the settlement. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the indemnified party shall have the
right to employ counsel to represent it, if, in the indemnified party's
reasonable judgment, it is advisable for such party to be represented by
separate counsel, in which event the fees and expenses of such separate counsel
shall be borne by the indemnified party. No indemnifying party shall be liable
for any settlement of any such action effected without its consent, but if any
such action or proceeding is settled with the consent of any indemnifying party
or if there be a final judgment for the plaintiff in any such action or
proceeding (of which an indemnifying party shall have been notified), such
indemnifying party shall indemnify and hold harmless each indemnified party
from and against any Losses incurred or suffered by reason of such settlement
or judgment.
(d) Any indemnification required by this SECTION 7, unless ordered or
expressly permitted by a court, arbitrator, or administrative forum, shall be
made by the indemnifying party only upon a determination by independent legal
counsel in a written opinion that the conduct which is the subject of the
claim, demand, lawsuit, action or proceeding with respect to which
indemnification is sought meets the applicable standard set forth in this
SECTION 7.
8. THE TRADING ADVISOR'S REPRESENTATIONS AND WARRANTIES. The
Trading Advisor represents and warrants to the Partnership and the General
Partner as follows:
(a) The Trading Advisor is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and has
full power and authority to enter into and perform its obligations under this
Agreement and to conduct its business as described in this Agreement and the
Disclosure Notice, and the Trading Advisor is qualified to conduct its business
and is in good standing in every jurisdiction in which the nature or conduct of
its business requires such qualification and failure to so qualify would have a
materially adverse effect on its ability to comply with, or perform its
obligations under, this Agreement, it being understood that any decision as to
the jurisdiction or jurisdictions in which the Trading Advisor shall conduct
its business is within the sole discretion of the Trading Advisor.
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Trading Advisor and is a valid and binding agreement of the
Trading Advisor enforceable in accordance with its terms.
(c) The execution and delivery of this Agreement and the performance
of the obligations and the consummation of the transactions contemplated in
this Agreement and in the
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Disclosure Notice will not conflict with, violate, breach or constitute
a default under, any term or provision of the Trading Advisor's certificate of
incorporation, by-laws, or other charter documents, or any indenture, mortgage,
deed of trust, loan agreement, or other agreement or instrument to which the
Trading Advisor or any of its Principals and Affiliates is a party or by which
any of them are bound, or to which any of the property (including, but not
limited to, its Trading Approach) or assets of the Trading Advisor or its
Principals and Affiliates are subject, or any order, rule, law, statute,
regulation, or other legal requirement applicable to the Trading Advisor or any
of its Principals or to the property or assets of the Trading Advisor or its
Principals and Affiliates of any court or any governmental or administrative
body or agency or panel or any regulatory or self-regulatory organization or
exchange having jurisdiction over the Trading Advisor or any of its Principals
and Affiliates.
(d) The Trading Advisor is registered as a commodity trading advisor
under the Act, its Principals are identified on the Trading Advisor's most
recent CFTC Form 7-R filed with the NFA pursuant to the Act or on a CFTC Form
3-R filed subsequently, and it is a member of the NFA in such capacity and such
registration and membership has not expired or been revoked, lapsed, suspended,
terminated, or not renewed or limited or qualified in any respect.
(e) The Trading Advisor is not bankrupt or insolvent.
(f) The Disclosure Document is complete and accurate in all material
respects, does not contain any misstatement of any material fact, does not omit
to state any material fact necessary to be stated therein in order to make the
statements made therein, in light of the circumstances under which they are
made, not misleading, and complies in all material respects with the applicable
requirements of the Act and the rules promulgated thereunder and may be relied
upon by the Partnership and the General Partner in preparing the Disclosure
Notice and allocating assets of the Partnership to the Trading Advisor and
there has not been, since the date of the Disclosure Document's issuance, any
material adverse change in the condition, financial or otherwise, business or
prospects of the Trading Advisor or any of its Principals and Affiliates,
whether or not arising in the ordinary course of business, or relating to the
historical performance and operations of the Trading Advisor, except as
disclosed in writing to the General Partner.
(g) The Trading Advisor and each Principal has complied and will
continue to comply in all material respects with all orders, rules, laws,
statutes, regulations or other legal requirements applicable to the Trading
Advisor or any of its Principals and Affiliates or to their respective
businesses, properties, or assets, including the Act and the rules promulgated
by the CFTC and the NFA, the violation of which would materially and adversely
affect its or their ability to comply with, and perform its or their
obligations under this Agreement, and there are no actions, suits, proceedings,
or notices of investigations or investigations pending or, to their knowledge,
threatened against the Trading Advisor, or any of its Principals or Affiliates,
by the NFA, the CFTC or any governmental, regulatory or self-regulatory agency
regarding noncompliance by the Trading Advisor or any of its Principals or
Affiliates with any law, statute, rule or regulation, or at law or in equity or
before or by any court, any federal, state, municipal or other governmental
department commission, board, bureau, agency, or instrumentality, or by any
regulatory or self-regulatory organization, or exchange, in which an
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adverse decision would materially and adversely affect its or their
ability to comply with or to perform its or their obligations under this
Agreement or that would be required to be disclosed in the Disclosure Notice,
which is not so disclosed, would result in a material adverse change in the
condition, financial or otherwise, business or prospects of the Trading
Advisor.
(h) The Trading Advisor and each Principal has all governmental,
regulatory, self-regulatory and exchange licenses and approvals and has
effected all filings and registrations with all governmental, regulatory and
self-regulatory agencies required to conduct their respective businesses and to
act as described in the Disclosure Notice and to perform its or their
respective obligations under this Agreement.
(i) With respect to information contained in the Disclosure Notice
relating to the Trading Advisor specifically approved for use in the Disclosure
Notice by the Trading Advisor in writing, including, without limitation, the
tables and notes thereto, the Disclosure Notice does not contain any untrue
statement of material fact or omit to state therein a material fact required to
be stated therein or necessary to be stated therein in order to prevent the
statements made therein, in light of the circumstances under which they are
made, from being misleading. Within three business days following receipt of
the Disclosure Notice, the Trading Advisor shall provide the General Partner in
writing, any changes thereto and shall review and approve such changes prior to
its distribution. The Trading Advisor shall review and provide any revised
description within two business days. Failure to respond to any revised
description of the Trading Advisor within three business days shall constitute
the Trading Advisors consent to distribution of the Disclosure Notice.
(j) In the placement of orders and the allocation of executed trades
for the Partnership and for the accounts of any other client, the Trading
Advisor shall utilize a fair and reasonable order entry system and trade
allocation system, which on an overall basis shall be no less favorable to the
Partnership than to any other account managed by the Trading Advisor.
(k) The Trading Advisor shall promptly notify the other parties
hereto of the commencement of any material suit, action or proceeding involving
it or its Principals and Affiliates, whether or not any such suit, action or
proceeding also involves any of the other parties hereto.
The foregoing representations and warranties shall be continuing during
the term of this Agreement and any renewal hereof and if at any time any event
shall occur which would make or tend to make any of the foregoing not true or
incomplete, the Trading Advisor shall promptly notify the Partnership and the
General Partner of the occurrence of such event.
9. THE PARTNERSHIP'S REPRESENTATIONS AND WARRANTIES. The
Partnership and the General Partner each represent and warrant to the Trading
Advisor as follows:
(a) The Partnership is duly organized, validly existing and in good
standing as a limited partnership under the laws of Illinois and has full power
and authority to perform its obligations under this Agreement and to conduct
its business and to act as described in the Disclosure Notice. The Partnership
is qualified to conduct its business and is in good standing
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in every jurisdiction in which the nature or conduct of its business requires
such qualification and failure to so qualify would have a materially
adverse effect on its ability to comply with, or perform its obligations under,
this Agreement, it being understood that any decision as to the jurisdiction or
jurisdictions in which the Partnership shall conduct its business is within the
sole discretion of the Partnership.
(b) This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Partnership and is a valid and binding agreement of
it enforceable in accordance with its terms.
(c) The Partnership has complied and will continue to comply in all
material respects with all orders, rules, laws, statutes, regulations or other
legal requirements applicable to it, to its business, properties, and assets,
including the Act and the rules promulgated by the CFTC and the NFA, the
violation of which would materially and adversely affect its ability to comply
with, and perform its obligations under this Agreement, and there are no
actions, suits, proceedings, or notices of investigations or investigations
pending or threatened against it, by the NFA, the CFTC or any governmental,
regulatory or self-regulatory agency regarding noncompliance by it with any
law, statute, rule or regulation, or at law or in equity or before or by any
court, any federal, state, municipal or other governmental department,
commission, board, bureau, agency, or instrumentality, or by any regulatory or
self-regulatory organization, or exchange, in which an adverse decision would
materially and adversely affect its ability to comply with or to perform its
obligations under this Agreement or that would be required to be disclosed in
the Disclosure Notice, which is not so disclosed, or would result in a
material adverse change in the condition, financial or otherwise, business or
prospects of the Partnership.
(d) The Partnership has all federal and state governmental,
regulatory, self-regulatory and exchange licenses and approvals and has
effected all filings and registrations with all federal and state governmental
and regulatory and self-regulatory agencies required to conduct its business
and to act as described in the Disclosure Notice and to perform its obligations
under this Agreement.
(e) Except with respect to information contained in the Disclosure
Notice relating to the Trading Advisor or any other advisor, the Disclosure
Notice does not contain any untrue statement of material fact or omit to state
therein a material fact required to be stated therein or necessary to be stated
therein in order to prevent the statements made therein, in light of the
circumstances under which they are made, from being misleading.
(f) The execution and delivery of this Agreement and the performance
of the obligations and the consummation of the transactions contemplated in
this Agreement and in the Disclosure Notice will not conflict with, violate,
breach or constitute a default under, any term or provision of the
Partnership's certificate of incorporation, or other charter documents, or any
indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument to which the Partnership is a party or by which it is bound, or to
which any of the property or assets of the Partnership is subject, or any
order, rule, law, statute, regulation, or other legal requirement applicable to
the Partnership or to the property or assets of the Partnership of any court or
any governmental or administrative body or agency or panel or any regulatory or
self-regulatory organization or exchange having jurisdiction over the
Partnership.
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(g) The General Partner is registered as a commodity pool operator
under the Act, its Principals are identified on the General Partner's most
recent CFTC Form 7-R filed with the NFA pursuant to the Act or on a CFTC Form
3-R filed subsequently, and is a member of the NFA in such capacity and such
registration and membership has not expired or been revoked, lapsed, suspended,
terminated, or not renewed or limited or qualified in any respect.
(h) The General Partner and each Principal has all federal and state
governmental, regulatory, self-regulatory and exchange licenses and approvals
and has effected all filings and registrations with all federal and state
governmental and regulatory and self-regulatory agencies required to conduct
its business and to act as described in the Disclosure Notice and to perform
its obligations under this Agreement.
(i) The General Partner shall promptly notify the other parties
hereto of the commencement of any material suit, action or proceeding involving
it or its Principals and Affiliates, whether or not any such suit, action or
proceeding also involves any of the other parties hereto.
The foregoing representations and warranties shall be continuing during
the term of this Agreement and any renewal hereof and if at any time any event
shall occur which would make or tend to make any of the foregoing not true or
incomplete, the General Partner will promptly notify the Trading Advisor
thereof.
10. TERM AND TERMINATION.
(a) Unless terminated earlier as provided below, the term of this
Agreement shall be until the end of the twelfth full calendar month after the
Trading Advisor commences trading activity and is automatically renewable
thereafter for successive one-year periods unless (i) the Partnership
terminates this Agreement during the initial one-year term thereof by giving
thirty days' prior written notice to the Trading Advisor, or (ii) either the
Trading Advisor or the Partnership terminates the Agreement at the end of the
initial one-year term or at any time thereafter by giving thirty days' prior
written notice to such other party. The parties shall use best efforts to
terminate this Agreement at month-end.
(b) Notwithstanding paragraph (a) of this Section 10, this Agreement
may be terminated by the Partnership immediately upon written notice to the
Trading Advisor if (i) the Trading Advisor, if other than a natural person,
merges, consolidates with or sells a substantial portion of its assets to any
individual or entity, or there is a material adverse change relating to the
Trading Advisor or a material adverse change in control, organizational
structure, financial condition, regulatory compliance or key personnel of the
Trading Advisor, (ii) any of the Trading Advisor's registrations under the Act
are suspended, terminated, lapsed or not renewed, (iii) the Trading Advisor's
membership in the NFA is suspended, terminated, lapsed or not renewed, (iv) the
Trading Advisor otherwise becomes unable to serve as a trading advisor to the
full extent contemplated by this Agreement, (v) the Trading Advisor materially
breaches any of its representations, warranties, covenants or agreements
contained in this Agreement, or (vi) the General Partner determines doing so is
in the best interests of the Partnership.
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(c) Notwithstanding paragraph (a) of this Section 10, this Agreement
may be terminated by the Trading Advisor immediately upon written notice to the
Partnership if (i) the General Partner, if other than a natural person, merges,
consolidates with or sells a substantial portion of its assets to any
individual or entity, or there is a material adverse change relating to the
General Partner or a material adverse change in control, organizational
structure, financial condition, regulatory compliance or key personnel of the
General Partner, (ii) any of the General Partner's registrations under the Act
are suspended, terminated, lapsed or not renewed, (iii) the General Partner's
membership in the NFA is suspended, terminated, lapsed or not renewed, (iv) the
General Partner otherwise becomes unable to serve as general partner of the
Partnership to the full extent contemplated by this Agreement, (v) the General
Partner materially breaches any of its representations, warranties, covenants
or agreements contained in this Agreement, (vii) the Allocated Assets total
less than U.S.$180,000, (vii) the Trading Advisor's license agreement with
Caxton Corporation is terminated, or (viii) the Trading Advisor determines
doing so is in the best interests of the Partnership.
11. NOTICES. Except as otherwise provided herein, all notices,
demands or requests required to be made or delivered under this Agreement shall
be effective only if in writing and delivered personally or by facsimile or
mail, postage prepaid (airmail if the addressee is in another country), to the
respective addresses below or to such other addresses as may be designated by
the party entitled to receive the same by notice similarly given and shall be
deemed given by the party required to provide notice when received by the party
to whom notice is required to be given.
If to the Partnership or the General Partner to:
Xxxxxxx Asset Management, Inc.
One Financial Plaza
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, President
Fax No.: 000-000-0000
If to the Trading Advisor to:
Willowbridge Associates Inc.
000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Vice President
Fax No.: 000-000-0000
12. ASSIGNMENT. No party hereto may transfer, sell, encumber,
appoint agents or assign any of its rights or obligations hereunder in whole or
in part without the express written consent of each of the other parties
hereto.
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13. AMENDMENT; MODIFICATION. This Agreement may not be amended or
modified, nor any of the provisions hereof waived, except by the written
consent of all of the parties hereto.
14. COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject hereof and
supersedes all prior agreements written or oral, and no other agreement, verbal
or otherwise, shall be binding as between the parties hereto unless in writing
and signed by the party against whom enforcement is sought.
15. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their successors and permitted assigns. No
other person other than the persons indemnified under SECTION 7 hereof for
matters relating to that Section shall have any right or obligation under this
Agreement.
16. HEADINGS. Headings to sections herein are for the convenience of
the parties only, and are not intended to be a part of or to affect the
meanings or interpretation of this Agreement.
17. GOVERNING LAW: CONSENT TO JURISDICTION. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Illinois without giving effect to principles of conflicts of laws.
18. ARBITRATION. The parties agree that all controversies which
may arise in connection with any transaction contemplated by this Agreement or
the construction, performance or breach of this Agreement shall be determined
by arbitration, to be held in the City of Chicago, State of Illinois unless
otherwise agreed to by the parties hereto, and in accordance with the rules
then obtaining of the NFA, or if no such rules are then in effect or if
jurisdiction is declined, then the rules then obtaining of the American
Arbitration Association; provided, however, that (a) the arbitrator(s) shall be
knowledgeable in industry standards and practices and the matters giving rise
to the dispute, (b) the arbitrator(s) shall not have the power and authority to
award punitive damages, (c) the authority of the arbitrator(s) shall be limited
to construing and enforcing the terms and conditions of this Agreement as
expressly set forth herein, and (d) the arbitrator(s) shall state the reasons
for their award and their legal and factual conclusions underlying the award in
a written opinion. The award of the arbitrator(s), or a majority of them,
shall be final, and judgment upon the award may be confirmed and entered in any
court, state or federal, having jurisdiction.
19. CONSENT TO JURISDICTION. Each party hereto expressly and
irrevocably agrees (a) that it waives any objection, and specifically consents,
to venue in the United States federal or state courts located in the City of
Chicago, State of Illinois, United States of America, so that any action at law
or in equity may be brought and maintained in any such court, and (b) that
service of process in any such action may be effected against such party by
certified or registered mail or in any other manner permitted by applicable
United States Federal Rules of Civil Procedure or Rules of the Courts of the
State of Illinois. In addition, each party hereto expressly and irrevocably
waives, in respect of any action brought in any United States federal or state
court located in the City of Chicago, State of Illinois or any resulting
judgment, any objection, and hereby specifically consents, to the jurisdiction
of any such court, and agrees not
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to seek to change the situs of such action or to assert that any other
court in any such action is a more suitable forum for the hearing and
adjudication of any claim or dispute raised in such action.
20. SURVIVAL. The indemnity provisions of this Agreement shall
survive the termination or expiration of this Agreement with respect to any
matter existing prior to such termination or expiration; the payment
obligations under this Agreement shall continue until satisfied; and the other
provisions of the Agreement shall survive the termination of this Agreement
with respect to any matter arising while this Agreement was in effect.
21. WAIVER OF BREACH. The waiver by a party of a breach of any
provisions of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by a party. The failure of a party to insist upon strict
adherence to any provision of this Agreement shall not constitute a waiver or
thereafter deprive such party of the right to insist upon a strict adherence.
22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
23. CONFIDENTIALITY. Nothing in this Agreement shall require the
Trading Advisor to disclose the details of its trading systems, methods,
models, strategies and formulas. The General Partner and the Partnership
acknowledge that the trading systems, methods, models, strategies and formulas
of the Trading Advisor are the sole and exclusive property of the Trading
Advisor. The General Partner and the Partnership further agree that it will
each keep confidential and will not disseminate information regarding such
systems, methods, models, strategies and formulas to any person; provided,
however, such restrictions shall not apply to information which (a) is or
becomes generally available to the public other than as a result of disclosure
by the General Partner or the Partnership, (b) was available to the General
Partner or the Partnership on a non-confidential basis prior to its disclosure
by the Trading Advisor, or (c) becomes available to the General Partner or the
Partnership on a non-confidential basis from a person other than the Trading
Advisor, unless such information was specifically provided to the General
Partner or the Partnership on a confidential basis.
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IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
THE FUTURE FUND II
By: Xxxxxxx Asset Management, Inc.
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
XXXXXXX ASSET MANAGEMENT, INC.
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
WILLOWBRIDGE ASSOCIATES INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Vice President
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EXHIBIT 1
November 7, 1995
Willowbridge Associates Inc.
000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Re: Commodity Trading Authorization
-------------------------------
Ladies and Gentlemen:
The Future Fund II, an Illinois limited partnership (the
"Partnership"), does hereby make, constitute, and appoint you as its
Attorney-in-Fact to purchase and sell futures contracts, commodities and
commodity options and forward and spot contracts, and any other items which are
currently, or may later become, the subject of futures, forward, spot or
options trading, and other related investments on domestic and international
exchanges and markets, through E.D. & F. Man International Inc., or such other
brokers and forward or spot contract dealers as may be designated, from time to
time, in writing by the Partnership, as brokers, in accordance with the
Management Contract between us dated November 8, 1995.
Very truly yours,
The Future Fund II
By: Xxxxxxx Asset Management, Inc.
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
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ACKNOWLEDGMENT OF RECEIPT
OF DISCLOSURE DOCUMENT
The undersigned hereby acknowledges receipt of Willowbridge Associates
Inc.'s Disclosure Document dated June 30, 1995.
The Future Fund II
By: Xxxxxxx Asset Management, Inc.
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
