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EXHIBIT 10(n)
MANAGEMENT CONTRACT
THIS MANAGEMENT CONTRACT ("Agreement"), is made and entered into
effective as of the 1st day of November 1995, by and among The Futures Fund II,
an Illinois limited partnership (the "Partnership"), Xxxxxxx Asset Management,
Inc., a Delaware corporation and the general partner of the Partnership (the
"General Partner") and RXR, 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 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 Diversified 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 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 November 1, 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
writing which consent shall not be unreasonably withheld. Non-material
changes in the Trading Approach may be instituted without prior written
approval. Changes in Contracts traded pursuant
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to the Trading Approach shall be considered non-material changes in the
Trading Approach; however, the Trading Advisor agrees to notify the General
Partner of such changes in Contracts within three business days of such change.
(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 systems, strategies, methods and programs.
(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; provided, that the
General Partner shall use its best efforts to do so only at calendar
month-ends. 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; provided, that the General Partner shall use its best efforts to do
so only at calendar month-ends.
(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 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.
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
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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 percent (90%) 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 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 on an overall basis 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 which commence
trading at different times, accounts which have differing fee and expense
structures, accounts which have different portfolios or different fiscal years
and accounts with other differences, and that such differences may cause
divergent trading results; provided, that the Partnership hereby acknowledges
that the Trading Advisor offers trading programs other than the Trading
Approach selected by the Partnership and that such other trading programs may
obtain more favorable results than the Trading Approach.
(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 on an overall basis 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 accounts
managed by the Trading Advisor and its Principals and
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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.
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 0.16% 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 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.
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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 equal to $75,000.
(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 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
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the Trading Advisor's various accounts and not knowingly favor any other such
account on an overall basis 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.
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) any material 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 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 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
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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 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,
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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, conforms to the requirements of Part 4 of the Act 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.
(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 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 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.
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(i) With respect to information contained in the Disclosure Notice
relating to the Trading Advisor, 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.
(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 on an overall basis 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, 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 represents and warrants 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 enter into and 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 in every jurisdiction in which the nature or conduct of its
business requires such qualification and the 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. 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 limited partnership or its
limited partnership agreement or of 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 are 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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(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 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. The Disclosure
Notice complies in all material respects with the Act and the rules and
regulations promulgated thereunder by the CFTC.
(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 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 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.
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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 or the
Trading Advisor terminates this Agreement during the initial one-year term
thereof by giving thirty days' prior written notice to the other parties
hereto, 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 the other parties hereto.
(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) Notwithstanding the foregoing, this Agreement may be terminated
by the Trading Advisor immediately upon written notice to the Partnership if
the General Partner's registration under the Act or otherwise is suspended,
terminated, lapsed or not renewed.
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
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If to the Trading Advisor to:
RXR, Inc.
Financial Centre
000 Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxx, 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.
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
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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. Except as set forth in Section 18
above, 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: Xxxxxxx Asset Management, Inc.
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
XXXXXXX ASSET MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
RXR, INC.
By: /s/ Xxxx Xxxxxxxxx
------------------
Xxxx Xxxxxxxxx
President
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EXHIBIT 1
November 1, 1995
RXR, Inc.
Financial Centre
000 Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
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: Xxxxxxx Asset Management, Inc.
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
President
