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EXHIBIT 10(l)
MANAGEMENT CONTRACT
THIS MANAGEMENT CONTRACT ("Agreement"), is made and entered into
effective as of November 1, 1995, by and between The Future Fund II, an
Illinois limited partnership (the "Partnership"), and ▇▇▇▇▇ ▇▇▇▇ & Company,
Inc. (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 ▇▇▇▇▇▇▇ 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 attorney-in-fact, for trading
the Allocated Assets in Contracts and in accordance with the Trading
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Advisor's Global Portfolio Trading Program ("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 disclosure notice dated November 1995 relating to the
appointment of the Trading Advisor as a commodity trading advisor of the
Partnership (the "Disclosure Notice"), subject to the trading policies of the
Partnership furnished to the Trading Advisor in writing ("Trading Policies").
The parties hereto acknowledge that the Trading Advisor will trade Contracts
for the Partnership independently of any other trading advisor retained by the
Partnership. For purposes of this Agreement, the term "Contracts" shall not
include securities and options thereon.
(c) The Trading Advisor acknowledges and agrees that the aggregate
amount of Allocated Assets which the Trading Advisor shall treat as equity and
manage on behalf of the Partnership pursuant to this Agreement may include
"notional" funds. The General Partner shall inform the Trading Advisor of the
amount of "notional" funds included in Allocated Assets from time to time. The
Trading Advisor agrees 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 by the General Partner.
(d) The General Partner and the Partnership acknowledge receipt of
the Trading Advisor's Disclosure Document dated August 5, 1995 (the "Disclosure
Document"). The Trading Advisor shall promptly furnish the Partnership with a
copy of each amended, supplemented or updated Disclosure Document of the
Trading Advisor filed with the Commodity Futures Trading Commission (the
"CFTC") and the National Futures Association ("NFA") upon acceptance thereof by
the CFTC. Prior to the commencement of trading on behalf of the Partnership,
the Partnership shall deliver to the Trading Advisor, and renew when necessary,
a Commodity Trading Authorization, in the form attached hereto as Exhibit 1,
appointing the Trading Advisor as the Partnership's agent and attorney-in-fact
for such purpose. All trades for the account of the Partnership shall be made
through such banks, brokers and dealers as the General Partner shall direct,
and the Trading Advisor shall have no authority or responsibility for selecting
any such banks, brokers or dealers in connection with the execution of
transactions for the Partnership or for the negotiation of commission rates
charged therefor; provided, however, that the General Partner shall notify the
Trading Advisor of any applicable changes in the commission rates charged by
the Partnership's banks, brokers and dealers with respect to transactions
entered into with respect to the Allocated Assets.
(e) In the event the Trading Advisor and its principals [as that term
is defined in Regulation Section 4.10(e) promulgated by the CFTC under the
Commodity Exchange Act, as amended (the "Act")], shareholders, partners,
employees and affiliates or any person who controls the foregoing
(collectively, "Principals and Affiliates"), wish to use trading programs,
systems or strategies other than or in addition to the Trading Approach in
connection with its trading for the Partnership, either in whole or in part, it
may not do so unless the Trading Advisor gives the General Partner 15 days'
prior written notice of its intention to utilize such different trading
programs, systems or strategies and the General Partner consents thereto in
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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. Nothing contained in this Agreement shall be construed or deemed to
require the Trading Advisor to disclose the confidential or proprietary details
of its trading strategies.
(g) The Trading Advisor understands and agrees that the General
Partner intends to designate other trading advisors and to apportion from time
to time to such other trading advisors the management of such portion of the
Partnership's assets as the General Partner shall determine in its absolute
discretion. The designation of other trading advisors and apportionment and
reapportionment of a portion of the Partnership's assets to such trading
advisors shall neither terminate this Agreement nor modify in any regard the
respective rights and obligations of the parties hereto.
(h) The General Partner shall have the right to make additions to, or
withdrawals from, the Allocated Assets (including any "notional" funds
comprising part of the Allocated Assets) at any time. The General Partner
agrees that the Trading Advisor may refuse any additional allocation of funds
for any reason. The General Partner, in its sole discretion, may at any time
remove all assets from the management of the Trading Advisor and may require
the Trading Advisor to liquidate existing positions.
(i) Upon receipt of instructions from the General Partner, the
Trading Advisor shall immediately cease its trading activities with respect to
the Allocated Assets, close out all existing positions in an orderly manner and
not initiate any new positions unless otherwise instructed by the General
Partner or the Partnership.
(j) The Trading Advisor shall review the positions held by the
Allocated Assets in accordance with its standard policies and procedures and
shall immediately notify the General Partner of any errors committed by the
Trading Advisor or of any trade not executed in accordance with the Trading
Advisor's instructions.
2. OTHER ACCOUNTS AND ACTIVITIES OF THE TRADING ADVISOR.
(a) The services provided by the Trading Advisor hereunder are not to
be deemed exclusive. Subject to the terms of this Agreement, the Trading
Advisor and its Principals and Affiliates shall be free to trade for their own
accounts and to advise other persons and manage other accounts during the term
of this Agreement and to use the same or different degrees of leverage,
information, computer programs and trading strategies or formulas which they
obtain, produce or utilize in the performance of services for the Partnership.
However, the Trading Advisor represents, warrants and agrees that the rendering
of such consulting, advisory and management services to others should not, in
the judgement of the Trading Advisor, require any material change in the
Trading Approach and should not, in the judgement of the Trading
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Advisor, 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. The Trading Advisor makes no representation
that the trading to be directed by it on behalf of the Partnership will be
profitable or will not result in losses.
(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 the applicable limit. The
Trading Advisor agrees that, if its trading recommendations are altered because
of the application of any position limit, it will not modify the trading
instructions with respect to the Partnership's account in such manner as to
affect the Partnership substantially disproportionately as compared with the
Trading Advisor's other accounts. The Trading Advisor presently believes and
represents that existing speculative position limits will not materially
adversely affect its ability to manage the Partnership's account given the
potential size of the Partnership's account and the Trading Advisor's and its
Principals' and Affiliates' current accounts and all proposed accounts for
which they have contracted to act as trading advisor. The Trading Advisor
further represents, warrants and agrees that under no circumstances will it
knowingly or deliberately use trading strategies or systems for the Partnership
that are inferior to trading strategies or systems employed for any other
client or account and that it will not knowingly or deliberately favor any
client or account managed by it over any other client or account, it being
acknowledged, however, that different trading strategies, methods or degrees of
leverage may be utilized for differing sizes of accounts, accounts with
different trading policies, accounts experiencing differing inflows or outflows
of equity, accounts funded at less than the Trading Advisor's recommended
minimum account size, accounts which commence trading at different times,
accounts which have different portfolios or different fiscal years and accounts
with other differences, and that such differences may cause divergent trading
results.
(c) The Partnership and the General Partner acknowledge and agree
that the Trading Advisor and/or its Principals and Affiliates presently act and
that they may continue to act as advisors for other accounts managed by them
and may continue to receive compensation with respect to services for such
accounts in amounts which may be more or less than the amounts received from
the Partnership. The Trading Advisor agrees that in the management of such
other accounts by it and its Principals and Affiliates, it will act in good
faith to seek to achieve an equitable treatment of all accounts under
management including the Partnership's account with respect to, among other
things, priorities of order entry and position limits.
(d) The Trading Advisor agrees that it shall make such information
available to the General Partner respecting the performance of the
Partnership's account as compared to the performance of all other client
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/experimental accounts.
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3. ALLOCATION OF ASSETS TO THE TRADING ADVISOR. The Trading
Advisor's Allocated Assets initially shall be a total of approximately $500,000
of which $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 2.0% 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 and redemptions paid or payable at such month-end. In the event
that (A) the Trading Advisor commences trading as of any day other than the
first day of a calendar month, (B) this Agreement is terminated as of any date
other than the last day of a calendar month, or (C) the Partnership reallocates
assets to or from the Trading Advisor as of any day other than the first or
last day of any calendar month, the amount of the management fee shall be
prorated on the 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
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
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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 (or
if there is a withdrawal from the Allocated Assets) 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 (or date of withdrawal) 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 $75,000; which carryforward loss shall not exceed 15% 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 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 not previously approved by Man in writing 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
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standard procedures for allocating orders among the Trading Advisor's
various accounts and not knowingly favor any other such account over the
Partnership's account.
(b) All forward contract and other trades for the Partnership will be
executed through the forward trading and other facilities of such affiliates of
Man or other entities as the Partnership may designate from time to time.
(c) The Trading Advisor must consent to any banks, brokers and
dealers not set forth herein (such consent not to be unreasonably withheld).
The Trading Advisor shall be permitted to trade on a "give-up" basis upon prior
written consent from the Partnership (such consent not to be unreasonably
withheld).
7. STANDARD OF LIABILITY; INDEMNIFICATIONS.
(a) Standard of Liability. The Trading Advisor shall not be liable
to the Partnership, the General Partner or any of their respective successors
or assigns under this Agreement except by reason of (i) acts or omissions to
act which constitute bad faith, negligence or misconduct or (ii) a breach of
any of the representations, warranties, covenants or agreements of the Trading
Advisor set forth in this Agreement.
(b) Indemnity. (i) The Partnership agrees to indemnify and hold
harmless the Trading Advisor and each of its Principals and Affiliates from and
against any and all losses, claims, damages, liabilities, costs and expenses
(including, without limitation, attorneys' and accountants' fees and
disbursements), judgments and amounts paid in settlement (collectively,
"Losses") to which an indemnified person may become subject arising out of this
Agreement, the transactions contemplated hereby or the fact the Trading Advisor
is or was a trading advisor to the Partnership, unless any such Losses arise
out of, relate to, or are based upon the Trading Advisor's failure to meet the
standard of liability applicable to it under SECTION 7(A).
(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 directly out of, relate directly to, or are
based directly upon the Trading Advisor's failure to meet the standard of
liability applicable to it under SECTION 7(A).
(c) Promptly after receipt by a party to be indemnified under SECTION
7(B), above, of any notice of the commencement of any action or proceeding,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnified party under such subsection, notify the indemnifying
party in writing of the commencement thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. The requirement
that an indemnifying party be given written notice of the commencement of any
action shall be deemed to be satisfied if such indemnifying party shall have
actual knowledge thereof or shall have been given written notice of the
commencement of any action or proceeding within a reasonable time after the
commencement thereof. If any such action shall be brought against any
indemnified party and the indemnified party notifies the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes,
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to assume the defense thereof with counsel satisfactory to such indemnified
party, and shall have the right to negotiate and consent to a settlement
thereof, provided that the indemnified party shall have consented to
the settlement. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the indemnified party shall have the
right to employ counsel to represent it, if, in the indemnified party's
reasonable judgment, it is advisable for such party to be represented by
separate counsel, in which event the fees and expenses of such separate counsel
shall be borne by the indemnified party. No indemnifying party shall be liable
for any settlement of any such action effected without its consent, but if any
such action or proceeding is settled with the consent of any indemnifying party
or if there be a final judgment for the plaintiff in any such action or
proceeding (of which an indemnifying party shall have been notified), such
indemnifying party shall indemnify and hold harmless each indemnified party
from and against any Losses incurred or suffered by reason of such settlement
or judgment.
(d) Any indemnification required by this SECTION 7, unless ordered or
expressly permitted by a court, shall be made by the indemnifying party only
upon a determination by independent legal counsel in a written opinion that the
conduct which is the subject of the claim, demand, lawsuit, action or
proceeding with respect to which indemnification is sought meets the applicable
standard set forth in this SECTION 7.
(e) The provisions of this SECTION 7 shall survive the termination or
other expiration of this Agreement.
8. THE TRADING ADVISOR'S REPRESENTATIONS AND WARRANTIES. The
Trading Advisor represents and warrants to the Partnership and the General
Partner as follows:
(a) The Trading Advisor is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and has
full power and authority to enter into and perform its obligations under this
Agreement and to conduct its business as described in this Agreement and the
Disclosure Notice, and the Trading Advisor is qualified to conduct its business
and is in good standing in every jurisdiction in which the nature or conduct of
its business requires such qualification and failure to so qualify would have a
materially adverse effect on its ability to comply with, or perform its
obligations under, this Agreement, it being understood that any decision as to
the jurisdiction or jurisdictions in which the Trading Advisor shall conduct
its business is within the sole discretion of the Trading Advisor.
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Trading Advisor and is a valid and binding agreement of the
Trading Advisor enforceable in accordance with its terms.
(c) The execution and delivery of this Agreement and the performance
of the obligations and the consummation of the transactions contemplated in
this Agreement and in the Disclosure Notice will not conflict with, violate,
breach or constitute a default under, any term or provision of the Trading
Advisor's certificate of incorporation, by-laws, or other charter
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documents, or any indenture, mortgage, deed of trust, loan agreement, or
other agreement or instrument to which the Trading Advisor or any of its
Principals and Affiliates is a party or by which any of them are bound, or to
which any of the property (including, but not limited to, its Trading Approach)
or assets of the Trading Advisor or its Principals and Affiliates are subject,
or any order, rule, law, statute, regulation, or other legal requirement
applicable to the Trading Advisor or any of its Principals or to the property
or assets of the Trading Advisor or its Principals and Affiliates of any court
or any governmental or administrative body or agency or panel or any regulatory
or self-regulatory organization or exchange having jurisdiction over the
Trading Advisor or any of its Principals and Affiliates.
(d) The Trading Advisor is registered as a commodity trading advisor
under the Act, its Principals are identified on the Trading Advisor's most
recent CFTC Form 7-R filed with the NFA pursuant to the Act, and it is a member
of the NFA in such capacity and such registration and membership has not
expired or been revoked, lapsed, suspended, terminated, or not renewed or
limited or qualified in any respect.
(e) The Trading Advisor is not bankrupt or insolvent.
(f) The Disclosure Document is complete and accurate in all material
respects and does not contain any misstatement of any material fact and
complies in all material respects with the applicable requirements of the Act
and the rules promulgated thereunder (as in effect on the date on which such
Disclosure Document was last filed with the CFTC) including the requirement to
include all material information 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; provided, that, with respect to information concerning the
Trading Advisor, the Partnership and/or the General Partner have determined the
extent of the information regarding the Trading Advisor and its historical
trading performance that is necessary and adequate for inclusion in the
Disclosure Notice.
(g) The Trading Advisor and each Principal has complied and will
continue to comply with all orders, rules, laws, statutes, regulations or other
legal requirements applicable to the Trading Advisor or any of its Principals
and Affiliates or to their respective businesses, properties, or assets,
including the Act and the rules promulgated by the CFTC and the NFA, the
violation of which would materially and adversely affect its or their ability
to comply with, and perform its or their obligations under this Agreement, and
there are no actions, suits, proceedings, or notices of investigations or
investigations pending or threatened against the Trading Advisor, or any of its
Principals or Affiliates, by the NFA, the CFTC or any governmental, regulatory
or self-regulatory agency regarding noncompliance by the Trading Advisor or any
of its Principals or Affiliates with any law, statute, rule or regulation, or
at law or in equity or before or by any court, any federal, state, municipal or
other governmental department commission, board, bureau, agency, or
instrumentality, or by any regulatory or self-regulatory organization, or
exchange, in which an adverse decision would materially and adversely affect
its or their ability to comply with or to perform its or their obligations
under
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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) The information contained in the Disclosure Notice relating to
the Trading Advisor, including, without limitation, the tables and notes
thereto, has been reviewed and approved by the Trading Advisor and is complete
and accurate in all material respects and does not contain any untrue statement
of material fact.
(j) In the placement of orders and the allocation of executed trades
for the Partnership and for the accounts of any other client, the Trading
Advisor shall utilize a fair and reasonable order entry system and trade
allocation system, which shall be no less favorable to the Partnership than to
any other account managed by the Trading Advisor.
(k) The Trading Advisor shall promptly notify the other parties
hereto of the commencement of any suit, action or proceeding involving it or
its Principals and Affiliates, if such action or proceeding might reasonably be
expected to have a materially adverse effect on the Trading Advisor's ability
to comply with or perform its obligations under this Agreement, 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 General
Partner and the Partnership 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. The Partnership
has full power and authority to perform its obligations under this Agreement
and to conduct its business and to act as described in the Disclosure Notice.
(b) This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Partnership and is a valid and binding agreement of
it enforceable in accordance with its terms.
(c) The Partnership has complied and will continue to comply with all
orders, rules, laws, statutes, regulations or other legal requirements
applicable to it, to its business, properties, and assets, including the Act
and the rules promulgated by the CFTC and the NFA,
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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, 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 General Partner is registered as a commodity pool operator
under the Act and is a member of the NFA in such capacity and such registration
and membership has not expired or been revoked, lapsed, suspended, terminated,
or not renewed or limited or qualified in any respect.
(g) The General Partner has all federal and state governmental,
regulatory, self-regulatory and exchange licenses and approvals and has
effected all filings and registrations with all federal and state governmental
and regulatory and self-regulatory agencies required to conduct its business
and to act as described in the Disclosure Notice and to perform its obligations
under this Agreement.
The foregoing representations and warranties shall be continuing
during the term of this Agreement and any renewal hereof and if at any time any
event shall occur which would make or tend to make any of the foregoing not
true or incomplete, the General Partner will promptly notify the Trading Advisor
thereof.
10. TERM AND TERMINATION.
(a) Unless terminated earlier as provided below, the term of this
Agreement shall be until the end of the twelfth full calendar month after the
Trading Advisor commences trading activity and is automatically renewable
thereafter for successive one-year periods unless (i) the Partnership
terminates this Agreement during the initial one-year term thereof by giving
thirty days' prior written notice to the Trading Advisor, or (ii) either the
Trading Advisor or the
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Partnership terminates the Agreement at the end of the initial one-year term or
at any time thereafter by giving thirty days' prior written notice to such
other party.
(b) Notwithstanding the foregoing, this Agreement may be terminated
by the Partnership immediately upon written notice to the Trading Advisor if
(i) the Trading Advisor, if other than a natural person, merges, consolidates
with or sells a substantial portion of its assets to any individual or entity,
or there is a material adverse change relating to the Trading Advisor or a
material adverse change in control, organizational structure, financial
condition, regulatory compliance or personnel of the Trading Advisor, (ii) any
of the Trading Advisor's registrations under the Act or otherwise are
suspended, terminated, lapsed or not renewed, (iii) the Trading Advisor's
membership in the NFA or other self-regulatory organization is suspended,
terminated, lapsed or not renewed, (iv) the Trading Advisor otherwise becomes
unable to serve as a trading advisor to the full extent contemplated by this
Agreement, (v) the Trading Advisor breaches any of its representations,
warranties, covenants or agreements contained in this Agreement, or (vi) the
General Partner determines doing so is in the best interests of the
Partnership.
(c) The Trading Advisor may terminate this Agreement in its
discretion, (i) upon thirty days' prior written notice to the Partnership in
the event that the trading or accounting policies applicable to the Partnership
as in effect on the date hereof or as amended from time to time in the
reasonable judgment of the Trading Advisor adversely affect the performance of
the Trading Advisor's Trading Approach, (ii) immediately upon written notice to
the Partnership if the Partnership or the General Partner materially breaches
any representation, warranty or covenant or otherwise fails to comply with the
terms of this Agreement, or (iii) upon thirty days' prior written notice to the
Partnership if the Allocated Assets allocated to the Trading Advisor shall be
less than $250,000 (after adding back trading losses in the current quarter and
applicable loss carryforwards).
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:
▇▇▇▇▇▇▇ Asset Management, Inc.
One Financial Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
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If to the Trading Advisor to:
▇▇▇▇▇ ▇▇▇▇ & Company, Inc.
Prudential Business Campus
▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, President
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
12. ASSIGNMENT. No party hereto may transfer, sell, encumber,
appoint agents or assign any of its rights or obligations hereunder in whole or
in part without the express written consent of each of the other parties
hereto.
13. AMENDMENT; MODIFICATION. This Agreement may not be amended or
modified, nor any of the provisions hereof waived, except by the written
consent of all of the parties hereto.
14. COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject hereof and
supersedes all prior agreements written or oral, and no other agreement, verbal
or otherwise, shall be binding as between the parties hereto unless in writing
and signed by the party against whom enforcement is sought.
15. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their successors and permitted assigns. No
other person other than the persons indemnified under Section 7 hereof for
matters relating to that Section shall have any right or obligation under this
Agreement.
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. 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
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majority of them, shall be final, and judgment upon the award may be confirmed
and entered in any court, state or federal, having jurisdiction.
19. CONSENT TO JURISDICTION. Each party hereto expressly and
irrevocably agrees (a) that it waives any objection, and specifically consents,
to venue in the United States federal or state courts located in the City of
Chicago, State of Illinois, United States of America, so that any action at law
or in equity may be brought and maintained in any such court, and (b) that
service of process in any such action may be effected against such party by
certified or registered mail or in any other manner permitted by applicable
United States Federal Rules of Civil Procedure or Rules of the Courts of the
State of Illinois. In addition, each party hereto expressly and irrevocably
waives, in respect of any action brought in any United States federal or state
court located in the City of Chicago, State of Illinois or any resulting
judgment, any objection, and hereby specifically consents, to the jurisdiction
of any such court, and agrees not to seek to change the situs of such action or
to assert that any other court in any other 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; 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.
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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: ▇▇▇▇▇▇▇ Asset Management, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
▇▇▇▇▇ ▇▇▇▇ & COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Principal
▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
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EXHIBIT 1
November 1, 1995
▇▇▇▇▇ ▇▇▇▇ & Company, Inc.
Prudential Business Campus
▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Re: Commodity Trading Authorization
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 contracts, and any other items which are
currently, or may later become, the subject of futures, forward or options
trading, and other related investments on domestic and international exchanges,
through E.D. & F. Man International Inc., or such other brokers and forward
contract dealers as may be designated, from time to time, in writing by the
Partnership, as brokers, in accordance with the Management Contract between us
dated November 1, 1995.
Very truly yours,
THE FUTURE FUND II
By: ▇▇▇▇▇▇▇ Asset Management, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
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ACKNOWLEDGMENT OF RECEIPT
OF DISCLOSURE DOCUMENT
The undersigned hereby acknowledges receipt of ▇▇▇▇▇ ▇▇▇▇ & Company,
Inc.'s Disclosure Document dated August 5, 1995.
The Future Fund II
By: ▇▇▇▇▇▇▇ Asset Management, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President