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ALPHAMETRIX MANAGED FUTURES PLATFORMS AMENDED AND RESTATED ADVISORY AGREEMENT

Consulting Services Agreement

ALPHAMETRIX MANAGED FUTURES PLATFORMS

 

AMENDED AND RESTATED

 

ADVISORY AGREEMENT | Document Parties: AlphaMetrix Managed Futures II LLC | ALPHAMETRIX MANAGED FUTURES LLC | ALPHAMETRIX, LLC | ASPECT CAPITAL LIMITED You are currently viewing:
This Consulting Services Agreement involves

AlphaMetrix Managed Futures II LLC | ALPHAMETRIX MANAGED FUTURES LLC | ALPHAMETRIX, LLC | ASPECT CAPITAL LIMITED

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Title: ALPHAMETRIX MANAGED FUTURES PLATFORMS AMENDED AND RESTATED ADVISORY AGREEMENT
Governing Law: New York     Date: 11/16/2009

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ALPHAMETRIX MANAGED FUTURES PLATFORMS

 

AMENDED AND RESTATED

 

ADVISORY AGREEMENT

 

Dated as of October 13, 2009

 

__________________________________________

 

among

 

ALPHAMETRIX ASPECT FUND – MT0001

 

ALPHAMETRIX MANAGED FUTURES LLC (ASPECT SERIES)

 

ALPHAMETRIX MANAGED FUTURES II LLC (ASPECT CS SERIES)

 

ALPHAMETRIX, LLC

 

and

 

ASPECT CAPITAL LIMITED

 

__________________________________________

 

 

 

 


 

 

ALPHAMETRIX MANAGED FUTURES PLATFORMS

 

AMENDED AND RESTATED ADVISORY AGREEMENT

 

__________________________________________

 

TABLE OF CONTENTS

 

 

 

Section                                                                                                                                                Page

 

1.

Duties of the Trading Advisor

2

2.

Standard of Liability; Indemnification

4

3.

Limits on Claims

5

4.

Trading Advisor’s Closing Obligations

6

5.

Independent Contractor Status

7

6.

Confidentiality

7

7.

Clearing Broker; Executing Broker

8

8.

Brokerage Confirmations and Reports

8

9.

Fees

8

10.

Term and Termination; Removal of the Sponsor

9

11.

Liquidation of Positions

10

12.

Other Accounts of the Trading Advisor; Exclusivity

11

13.

Speculative Position Limits

12

14.

Redemptions, Exchanges, Distributions, Subscriptions

12

15.

The Trading Advisor’s Representations and Warranties

12

16.

The Sponsor’s Representations and Warranties

14

17.

Assignment

16

18.

Successors

17

19.

Amendment or Modification or Waiver; Amendment and Restatement

17

20.

Notices

17

21.

Governing Law

18

22.

Survival

18

23.

Disclosure Document Modifications

18

24.

Promotional Literature

18

25.

No Waiver

19

26.

No Liability of Members

19

27.

Third-Party Beneficiaries

19

28.

Headings

19

29.

Complete Agreement

19

30.

Counterparts

19

31.

Miscellaneous

19


_______________

 

 

Appendix A — Fee Schedule

A-11

Appendix B — Trading Policies

B-11

Appendix C — List of Futures Interests

C-11

Appendix D — Determination of Net Asset Value

D-11

 

 

 


 

 

ALPHAMETRIX MANAGED FUTURES PLATFORMS

 

AMENDED AND RESTATED ADVISORY AGREEMENT

 

__________________________________________

 

This Amended and Restated Advisory Agreement (the “ Agreement ”), made as of this 13th day of October, 2009, among ALPHAMETRIX ASPECT FUND – MT0001, a Cayman Islands company (the “ Trading Fund ”), ALPHAMETRIX MANAGED FUTURES LLC (ASPECT SERIES), a series of AlphaMetrix Managed Futures LLC, a Delaware limited liability company, ALPHAMETRIX MANAGED FUTURES II LLC (ASPECT CS SERIES), a series of AlphaMetrix Managed Futures II LLC, a Delaware limited liability company, ALPHAMETRIX, LLC, a Delaware limited liability company (the “ Sponsor ”) and ASPECT CAPITAL LIMITED (the “ Trading Advisor ”), a limited liability company registered in England and Wales;

 

WHEREAS, the Trading Fund, the Sponsor and the Trading Advisor entered into an advisory agreement dated as of November 1, 2008 (the “ Original Agreement ”) with respect to the direction of investment and reinvestment of the Trading Fund’s assets by the Trading Advisor upon the terms and conditions set forth therein;

 

WHEREAS, the parties hereto wish to amend and restate in its entirety the Original Agreement (and the appendices attached thereto) to make certain changes desired by the parties;

 

WHEREAS, the Trading Fund has been organized to trade, buy, sell or otherwise acquire, hold or dispose of forward contracts (including, for the avoidance of doubt, London Metal Exchange and foreign exchange forwards), futures contracts for commodities, financial instruments and currencies, rights pertaining thereto and options thereon or on physical commodities (collectively, “ Futures Interests ”) and engage in all activities incident thereto;

 

WHEREAS, ALPHAMETRIX MANAGED FUTURES LLC (ASPECT SERIES), a series of a Delaware limited liability company (the “ Aspect Series ”) previously invested substantially all of the proceeds of the sale of its units of limited liability company interest (“ Aspect Series Units ”) in ALPHAMETRIX MANAGED FUTURES (ASPECT) LLC, a Delaware limited liability company (the “ Intermediate Fund ”), which in turn invested substantially all of the proceeds it received from the Aspect Series in the Trading Fund;

 

WHEREAS, as of August 31, 2009 the Intermediate Fund was dissolved and as of such date the Aspect Series invests substantially all of the proceeds of the Aspect Series Units in the Trading Fund;

 

WHEREAS, ALPHAMETRIX MANAGED FUTURES II LLC (ASPECT CS SERIES), a series of a Delaware limited liability company (the “ Aspect CS Series ” and together with the Aspect Series, each a “ Series ”) will invest substantially all of the proceeds of the sale of its units of limited liability company interest (together with the Aspect Series Units, “ Units ”) in the Trading Fund;

 

WHEREAS, the Aspect Series is a “protected cell” of AlphaMetrix Managed Futures LLC, a series limited liability company established under the law of the State of Delaware (the “ Original  Platform ”);

 

WHEREAS, the Aspect CS Series is a “protected cell” of AlphaMetrix Managed Futures II LLC, a series limited liability company established under the law of the State of Delaware (together with the Original Platform, the “ Platforms ”);

 

 

 

1


 

WHEREAS, the Sponsor will act as sponsor of the Trading Fund;

 

WHEREAS, the Sponsor has selected the Trading Advisor to have authority over the Trading Fund’s trading of Futures Interests;

 

WHEREAS, the Trading Advisor is willing to manage the Trading Fund’s Futures Interest trading;

 

WHEREAS, the Trading Fund’s trading of Futures Interests is described in the Platforms’ Confidential Disclosure Documents, as supplemented and amended from time to time (collectively, the “ Memorandum ”), which will be filed with the National Futures Association (the “ NFA ”) pursuant to the Commodity Exchange Act, as amended (the “ CEA ”), the commodity pool operator and commodity trading advisor regulations promulgated under the CEA (the “ Commodity Regulations ”) by the Commodity Futures Trading Commission (“ CFTC ”), and NFA rules promulgated under the CEA (the “ NFA Rules ”);

 

WHEREAS, the Sponsor may in the future form commodity pools that will, or cause existing pools to, invest the proceeds of their sale of shares, units or other equity interests (such shares, units or interests, collectively with the Units, “Equity Interests” ) directly or indirectly in the Trading Fund; and

 

WHEREAS, the Trading Advisor’s current Disclosure Document delivered to the Sponsor (the “ Disclosure Document ”) has been filed with the NFA pursuant to the CEA.

 

NOW, THEREFORE, the parties hereto do hereby agree as follows, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in entering into this Agreement the parties intend to be legally bound:

 

1.     Duties of the Trading Advisor.

 

(a)   (i)           The Sponsor shall appoint the Trading Advisor to have discretionary authority and responsibility for independently directing the Futures Interest trading pursuant to the trading program and strategy agreed upon by the Sponsor and the Trading Advisor and disclosed in the Memorandum (the “ Program ”), as the same may be modified from time to time by the Trading Advisor as a result of its ongoing commitment to research and development.  Any such change will not be deemed to constitute a material change to the Investment Objective or Investment Policy (each term as defined in the Disclosure Document) and may be made without prior notification to the Sponsor.  However, any material change to the Investment Objective or Investment Policy (each term as defined in the Disclosure Document) (such change to be determined as material in the Trading Advisor’s reasonable discretion) will only be made upon giving the Sponsor at least twenty Business Days’ prior written notice (a “ Business Day ” means any day on which banks in New York City are not required or authorized to close).  The Trading Advisor may, on behalf of the Trading Fund and subject to Section 1(a)(iii) and Section 7, execute transactions in Futures Interests on either a principal or an agency basis, with or through such clearing brokers as approved by the Sponsor and executing brokers selected by the Trading Advisor, provided that the Trading Fund shall be a party to all “give-up” agreements, from time to time.  This limited authority granted to the Trading Advisor is a continuing power and shall continue in effect with respect to the Trading Advisor until terminated hereunder.

 

(ii)           In the event the Trading Advisor proposes to make any material changes to the Program, the Trading Advisor will so inform the Sponsor and will not make any such change — with respect to the Trading Fund, not the Trading Advisor’s other accounts — to which the Sponsor objects (in which case

 

 

 

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the Trading Advisor will be free to terminate this Agreement pursuant to Section 10).  “ Material changes ” for such purposes shall not include simply adding or removing a Futures Interest to or from the group of Futures Interests traded on behalf of the Trading Fund (subject to Sections 1(b) and 1(c)).

 

(iii)           The management and operation of the Trading Fund and the determination of its policies shall be vested exclusively in the Sponsor by the Board of Directors of the Trading Fund.  The Sponsor shall have the authority and power on behalf and in the name of the Trading Fund to carry out any and all of the objectives and purposes of the Trading Fund set forth in the Trading Fund’s Articles of Association and Trading Management Agreement, and to perform all acts and enter into and perform all contracts and other undertakings which the Sponsor may deem necessary or advisable in connection with such objectives and purposes or incidental thereto; provided that the Trading Advisor shall at all times have discretionary authority and responsibility for independently directing the Futures Interest trading pursuant to Section 1(a)(i).  For the avoidance of doubt, notwithstanding the fact that the Trading Advisor is not authorized to enter into any agreements or undertakings on behalf of the Trading Fund and may trade Futures Interests for the Trading Fund only pursuant to the Program, it may enter into such give-up agreements with the executing brokers as the Trading Advisor considers necessary or appropriate in its reasonable discretion;  provided, however, that the Trading Fund shall be a signatory to such give-up agreements, unless the Sponsor and the Trading Advisor otherwise mutually agree.

 

(iv)           All actions and determinations to be made by the Sponsor hereunder shall, unless otherwise expressly provided, be made in the Sponsor’s sole and absolute discretion.

 

(b)     The Trading Advisor is aware that certain futures and options on futures — generally certain stock index futures and options (for the avoidance of doubt, including, but not limited to, all non-CFTC-approved contracts) — may not be traded on behalf of United States persons and agrees not to trade such Futures Interests for the account of the Trading Fund.

 

(c)     The Trading Advisor agrees to the terms set forth in “Appendix B — Trading Policies.”

 

(d)     Subject to adequate assurances of confidentiality, the Trading Advisor agrees that it will discuss with the Sponsor upon request any trading methods, programs, systems or strategies used by it for trading customer accounts which differ from the Program, provided, that nothing contained in this Agreement shall require the Trading Advisor to disclose with respect to such accounts that it deems to be proprietary or confidential information.

 

(e)     The Trading Advisor agrees to provide the Sponsor with such information concerning the Trading Advisor as the Sponsor may reasonably request (other than the identity of the Trading Advisor’s other customers or proprietary or confidential information concerning the Program and/or details of any other trading methods, programs, systems or strategies used by it for trading other customers’ accounts, except as may be required under Section 12(d) or (e)), subject to receipt of adequate assurances of confidentiality, including, but not limited to, information regarding any actual or prospective change in control, key personnel, the Program or financial condition, provided, that nothing contained in this Agreement shall require the Trading Advisor to disclose with respect to itself what it deems to be proprietary or confidential information.

 

(f)     During the term of this Agreement, the Trading Advisor agrees to provide the Sponsor with updated information related to the Program’s performance results (which information shall be kept confidential as provided in Section (e)) within a reasonable period of time after the end of each month or at other times as may be agreed from time to time between the Trading Advisor and the Sponsor.

 

 

 

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(g)     The Trading Advisor shall be responsible for promptly reviewing all oral and written confirmations it receives to determine that the trades made for the Trading Fund were made in accordance with the Trading Advisor’s instructions.  If the Trading Advisor determines that an error was made in connection with a trade or that a trade was made other than in accordance with the Trading Advisor’s instructions, the Trading Advisor shall promptly notify the Sponsor of this fact where such error is not corrected within three Business Days of the Trading Advisor’s making such determination, and shall consult with the Sponsor with regard to the best course of action for the Trading Fund.  All risks relating to transactions ordered by the Trading Advisor on behalf of the Trading Fund (including any trading or system error that has occurred in good faith) shall be borne by the Trading Fund as principal and, accordingly, all gains or losses accruing shall belong to or be borne by the Trading Fund; provided that, if a trading error resulting in losses is due to an action or omission of the Trading Advisor not meeting the applicable standard of conduct set forth in Section 2(a), such loss shall be borne by the Trading Advisor.

 

(h)     The Sponsor and the Trading Fund agree that the Trading Advisor shall be the sole trading advisor to the Trading Fund absent the Trading Advisor’s prior written consent.

 

2.     Standard of Liability; Indemnification.

 

(a)     The Trading Advisor and its affiliates and each of their officers, employees, directors, shareholders and controlling persons (the “ Trading Advisor Parties ”) shall have no liability to the Sponsor, the Aspect Series, the Aspect CS Series, any other entity that now or in the future invests in the Trading Fund, the Trading Fund or to any owners of Equity Interests (the “ Members ”), and shall be indemnified by the Trading Fund against any loss, liability, claim, damage or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damage or expense and reasonable counsel fees incurred in connection therewith) (“ Losses ”), for conduct undertaken as a trading advisor to the Trading Fund or otherwise relating to any action or omission of the Trading Advisor Parties (or alleged action or omission) in connection with this Agreement; provided that, such action or omission (or alleged action or omission) does not constitute gross negligence, willful misconduct or breach of this Agreement or any fiduciary duty owed by the Trading Advisor to the Trading Fund and was done in a manner reasonably believed to be in, or not opposed to, the best interests of the Trading Fund.  The indemnity provision contained in this Section 2(a) shall not increase the liability of each of the Aspect Series and the Aspect CS Series beyond the amount of its capital and profits (exclusive of distributions or other returns of capital, including redemptions), if any, in the Trading Fund.

 

(b)     In the event the Sponsor, the Aspect Series, the Aspect CS Series, any other entity that now or in the future invests in the Trading Fund, or the Trading Fund or their respective principals, affiliates, officers, employees and controlling persons (collectively, the “ Sponsor Parties ”) is made a party to any threatened, pending or completed action, arbitration, claim, demand, dispute, lawsuit or other proceeding (each a, “ Proceeding ”) or otherwise incurs any Losses as a result of, or in connection with, the activities or claimed activities of any Trading Advisor Party unrelated to the Trading Fund’s business, the Trading Advisor shall indemnify, defend and hold harmless such Sponsor Parties against any direct Losses incurred in connection therewith, except in circumstances where such Proceeding arises either solely or partly as a result of the gross negligence, willful misconduct or breach of this Agreement or any fiduciary obligation owed by the relevant Sponsor Parties.

 

(c)     The Trading Advisor Parties shall not be liable to the Sponsor Parties (to the extent permitted by any applicable laws, statutes, rules, regulations or orders and so far as not inconsistent with the provisions of this Agreement) including but not limited to any liability arising from the act or omission of any Clearing Broker (as defined in Section 7), Executing Broker (as defined in Section 7) or other counterparty, except that the Trading Advisor Parties shall be liable to the Sponsor Parties for acts

 

 

 

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by the Trading Advisor Parties with respect to the provision of services hereunder which constitute gross negligence, willful misconduct or breach of this Agreement by a Trading Advisor Party.

 

(d)   (i)           Promptly after receipt by any of the indemnified parties under this Agreement of notice of any Proceeding, the party or parties seeking indemnification (the “ Indemnitee ”) shall notify the party from which indemnification is sought (the “ Indemnitor ”) in writing of the commencement thereof if a claim with respect thereof is to be made under this Agreement.  Failure to notify an Indemnitor on a timely basis shall only qualify the right to indemnity hereunder to the extent that such failure is prejudicial to the Indemnitor.

 

(ii)           The Indemnitor shall be entitled to participate in the defense of any such Proceeding and to assume the defense thereof with the assistance of counsel reasonably satisfactory to the Indemnitee(s).  In any such Proceeding, the Indemnitee(s) shall have the right to retain its or their own counsel, but the fees and expenses of such counsel shall be at such Indemnitee’s own expense unless (A) otherwise agreed by the Indemnitor and such Indemnitee or (B) the named parties to any such Proceeding (including any impleaded parties) include both the Indemnitor and the Indemnitee(s), and representation of the foregoing parties by the same counsel would be inappropriate due to actual or potential differing interests between them or the existence of different or additional defenses (it being understood, however, that the Indemnitor shall not be liable for legal fees or other expenses of more than one separate firm of attorneys for all such Indemnitee(s), which firm shall be designated in writing by such Indemnitees and be reasonably acceptable to the Indemnitor).  The Indemnitee(s) shall cooperate with the Indemnitor in connection with any such Proceeding and, subject to the Indemnitor’s ongoing obligation of confidentiality with regard to such information, shall make all personnel, books and records relevant to the Proceeding available to the Indemnitor and grant such authorizations or powers of attorney to the agents, representatives and counsel of the Indemnitor as the Indemnitor may reasonably consider desirable in connection with the defense of any such Proceeding.

 

(e)     None of the indemnifications contained in this Section 2 shall be applicable with respect to default judgments, confessions of judgment or settlements entered into by the party or parties claiming indemnification without the prior written consent, which shall not be unreasonably withheld, of the party obligated to indemnify such party.

 

(f)     The Sponsor may not redeem or otherwise distribute or withdraw assets from the Trading Fund for the purpose of eliminating or reducing assets available to satisfy a claim for indemnification of the Trading Advisor pursuant to this Agreement.  For the avoidance of doubt, the preceding sentence shall not be construed as restricting the right of the Sponsor to make redemptions from the Trading Fund for the purpose of satisfying redemption or withdrawal requests of holders of Equity Interests.

 

(g)     The provisions of this Section 2 shall survive the termination of this Agreement.

 

3.     Limits on Claims.

 

(a)     The Trading Advisor agrees that it will not take any of the following actions against the Aspect Series, Aspect CS Series or the Platforms: (i) seek a decree or order by a court having jurisdiction in the premises (A) for relief in respect of the Aspect Series, Aspect CS Series or the Platforms in an involuntary case or proceeding under the Federal Bankruptcy Code or any other federal or state bankruptcy, insolvency, reorganization, rehabilitation, liquidation or similar law or (B) adjudging the Aspect Series, Aspect CS Series or the Platforms bankrupt or insolvent, or seeking reorganization, rehabilitation, liquidation, arrangement, adjustment or composition of or in respect of the Aspect Series, Aspect CS Series or the Platforms under the Federal Bankruptcy Code or any other applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar

 

 

 

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official) of the Aspect Series, Aspect CS Series or the Platforms or of any substantial part of any of their properties, or ordering the winding up or liquidation of any of their affairs; (ii) seek a petition for relief, reorganization or to take advantage of any law referred to in the preceding clause; or (iii) file an involuntary petition for bankruptcy (collectively, “ Bankruptcy or Insolvency Action ”).

 

(b)     In addition, the Trading Advisor agrees that for any obligations due and owing to it by the Trading Fund, the Trading Advisor will look solely and exclusively to the assets of the Trading Fund to satisfy its claims and will not seek to attach or otherwise assert a claim against the assets of the Aspect Series, the Aspect CS Series, the Platforms, the Sponsor or any of their affiliates, whether there is a Bankruptcy or Insolvency Action taken or otherwise, except that the Aspect Series and the Trading Fund agree to be held jointly and severally liable for any Management Fees or Performance Fees due on the Aspect Series’ interest in the Trading Fund, and the Trading Fund and the Aspect CS Series agree to be held jointly and severally liable for any Management Fees or Performance Fees due on the Aspect CS Series’ interest in the Trading Fund.  For the avoidance of doubt, the Aspect CS Series and the Aspect Series shall in no way be liable for Management Fees or Performance Fees due on the each other’s interests in the Trading Fund.  The parties agree that this provision will survive the termination of this Agreement, whether terminated in a Bankruptcy or Insolvency Action or otherwise.

 

(c)     This Agreement has been made and executed by and on behalf of the Trading Fund and the Sponsor, and the obligations of the Trading Fund and/or the Sponsor set forth herein are not binding upon any of the Members of the Aspect CS Series or the Aspect Series individually but are binding only upon the assets and property of the Trading Fund and no resort shall be had to the Members’ personal property for the satisfaction of any obligation or claim hereunder.  In addition, no resort shall be had to the assets of the Aspect CS Series or the Aspect Series, except with regard to Management Fees and Performance Fees as described in Section 3(b), for the satisfaction of any obligation or claim hereunder. Subject to Appendix A, for the avoidance of doubt, the parties hereto acknowledge and agree that the Platforms are organized in series pursuant to Section 18-215(b) of the Delaware Limited Liability Company Act.  As such, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to each Series shall be enforceable against the assets of such Series only, and not against the assets of the Platforms generally or the assets of any other Series.

 

4.     Trading Advisor’s Closing Obligations.

 

If requested by the Sponsor, on or prior to each closing date during the continuous offering of the Aspect Series (each a “ Closing Date ”), the Trading Advisor shall deliver or cause to be delivered, at the expense of the Trading Advisor, to the Selling Agents (as defined in the Memorandum, “ Selling Agents ”), the Aspect Series, the Trading Fund and the Sponsor, the reports, certificates and documents described below addressed to them and, except as may be set forth below, dated as of the Closing Date.

 

(a)     a report from the Trading Advisor which shall present, for the period from the date after the last day covered by the Trading Advisor’s performance information as set forth in the Part Two:  Series Information of the Memorandum to the latest practicable month–end before the Closing Date, figures which shall show the actual past performance of the Program (or, if such actual past performance information is unavailable, then the estimated past performance) for such period as well as any pro forma performance information for such period reasonably requested by the Sponsor, and which shall certify that, to the best of its knowledge, such figures are complete and accurate in all material respects;

 

(b)     a certificate of the Trading Advisor in the form proposed prior to the Closing Date by counsel to the Sponsor, with such changes in such form as are proposed by the Trading Advisor or its counsel and are acceptable to the Sponsor and its counsel so as to make such form mutually acceptable to the Sponsor, the Trading Advisor and their respective counsel, to the effect that:

 

 

 

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(1)     the representations and warranties of the Trading Advisor contained in this Agreement are true and correct in all material respects on the date of the certificate as though made on such date;

 

(2)     nothing has come to the Trading Advisor’s attention which would cause the Trading Advisor to believe that, at any time from: (A) the time the forms required to register the Units under the Securities Exchange Act of 1934, as amended (such forms, collectively, the “ Form 10 ”), initially became effective to (B) the Closing Date, the Form 10, as amended from time to time, or the Memorandum, as supplemented or amended from time to time, with respect to the Trading Advisor Parties, or with respect to the Program or performance information, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; and

 

(3)     the Trading Advisor has performed all covenants and agreements herein contained to be performed on its part at or prior to the Closing Date.

 

5.     Independent Contractor Status.

 

The Trading Advisor shall for all purposes herein be deemed to be an independent contractor with respect to the Sponsor and the Trading Fund, and shall, unless otherwise expressly authorized, have no authority to act for or to represent the Trading Fund, the Sponsor, any other commodity trading advisor of the Platforms or the Selling Agents in any way or otherwise be deemed to be a general agent, joint venturer or partner of the Trading Fund, the Sponsor, any other commodity trading advisor of the Platforms or the Selling Agents, or in any way be responsible for the acts or omissions of the Trading Fund, the Sponsor, any other commodity trading advisor of the Platforms or the Selling Agents as long as it is acting independently of such persons.

 

6.     Confidentiality.

 

The Sponsor acknowledges that the Program is the confidential property of the Trading Advisor.  Nothing in this Agreement shall require the Trading Advisor to disclose the confidential or proprietary details of the Program and/or the Trading Advisor’s trading programs generally, its systems, methodologies, trading techniques, research, strategies, models and other commercial information, except only to the extent that such disclosure may be legally compelled under applicable law or may be required under Section 12(d) or (e).  The Sponsor further agrees that it will keep confidential and will not disclose to any third party (including any Members) or to its own employees other than on a “need to know” basis the Trading Advisor’s trading advice to the Trading Fund, except as, and to the extent that, it may be determined by the Sponsor to be expressly required by: (i) any law or statute; (ii) governmental, regulatory or self-regulatory agency or organization, rule, regulation or order; (iii) the request of any governmental, regulatory or self-regulatory agency or organization; (iv) valid legal process; or (v) as otherwise authorized by the Trading Advisor from time to time.  The Trading Fund and the Sponsor further agree that they shall not copy, disclose, misuse, misappropriate or reverse engineer or otherwise appropriate or make use of in any manner the investment and trading strategies, systems, algorithms, models, techniques, methods, policies, programs and analyses previously, currently or hereafter used by the Trading Advisor in the conduct of its business including all data, details, components, specifications, codes, formulae, know-how (technical or otherwise), electronic data processing systems, computer software programs and computer hardware systems relating to the foregoing, and all embodiments, articulations, applications, expressions and reproductions of any of the foregoing including, without limitation, documents, notes, print-outs, work papers, charts, diskettes, tapes and manuals.  For the avoidance of doubt, all performance information relating to the Program, the Trading Fund, the Aspect

 

 

 

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Series and the Aspect CS Series that is provided on an intra-month basis, and all exposure reports, shall be deemed confidential information and not distributed to Members or any other party, except as otherwise indicated in clauses (i) through (v) above.

 

7.     Clearing Broker; Executing Broker.

 

(a)     All Futures Interest trades, including foreign exchange trades, for the accounts of the Trading Fund shall be cleared through such commodity clearing broker or brokers as the Sponsor directs.  The Trading Fund will clear Futures Interest trades through Credit Suisse Securities (USA) LLC (“ Credit Suisse Securities ” or the “ Clearing Broker ”).

 

(b)     All foreign exchange trades for the accounts of the Trading Fund shall be executed through such commodity broker or brokers and banks (or other forward dealers) as the Trading Advisor may consider necessary or appropriate in its reasonable discretion and which are pre-approved by the Sponsor, which approval shall not be unreasonably withheld.

 

(c)     All Futures Interest trades, other than foreign exchange trades, for the accounts of the Trading Fund shall be executed through such commodity broker or brokers and banks (the “ Executing Brokers ”) as the Trading Advisor may consider necessary or appropriate in its reasonable discretion if such broker(s) agree to “give up” all transactions to the Clearing Broker for clearance subject to Section 1(a)(iii).  If the Trading Fund is not a signatory to the resulting give-up agreements pursuant to Section 1(a)(iii), the Trading Advisor shall notify the Sponsor and the Trading Fund from time to time in writing of the Executing Brokers selected by the Trading Advisor.

 

 (d)           The Sponsor has retained UBS Financial Services Inc. as a selling agent for the Aspect Series and will retain Credit Suisse Securities as a selling agent for the Aspect CS Series; provided however that the Sponsor shall obtain the Trading Advisor’s prior written consent prior to appointing any other selling agents for the Aspect Series or the Aspect CS Series.

 

8.     Brokerage Confirmations and Reports.

 

The Sponsor will instruct the Clearing Broker to furnish the Trading Advisor with copies of all trade confirmations, daily equity runs and monthly trading statements relating to the Trading Fund.  The Trading Advisor will maintain records and will monitor all open positions relating thereto; provided, however, that the Trading Advisor shall not be responsible for any errors by the Clearing Broker or any other brokers appointed pursuant to Section 7 as long as the Trading Advisor’s actions or omissions, if any, relating to such error are consistent with the standard set forth in Section 2(a).  The Sponsor will also furnish the Trading Advisor with a copy of the form of all reports, including but not limited to, monthly, quarterly and annual reports, sent to the Members, and copies of all reports filed with the Securities and Exchange Commission, the CFTC or the NFA.  The Trading Advisor shall, at the Sponsor’s request, make a good faith effort to provide the Sponsor with copies of all trade confirmations, daily equity runs, monthly trading reports or other reports sent to the Trading Advisor by the Clearing Broker regarding the Trading Fund, provided that such confirmations and reports are actually in the Trading Advisor’s possession or control, as the Sponsor deems appropriate and in circumstances where the Sponsor cannot obtain copies of these confirmations and reports on its own behalf.  Upon request, the Sponsor will provide the Trading Advisor with accurate information with respect to the Trading Fund.

 

9.     Fees.

 

(a)     In consideration of and in compensation for the performance of the Trading Advisor’s services under this Agreement, the Trading Advisor shall receive from the Trading Fund a management

 

 

 

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 fee (the “ Management Fee ”) and a performance fee (the “ Performance Fee ”) as set forth in the “Appendix A — Fee Schedule” hereto.

 

(b)     Management Fees and Performance Fees (including, if applicable, any United Kingdom value added tax or any analogous taxation thereon) shall be paid within twenty Business Days following the end of the period for which they are payable, unless the Sponsor is unable to value a material portion of the Trading Fund’s positions, in which case the Management Fees and Performance Fees will be paid as soon as reasonably possible after such positions have been valued.  For the avoidance of doubt, all fees and expenses payable under this Agreement shall be stated exclusive of any United Kingdom value added tax or any analogous taxation payable or chargeable thereon and, if applicable, the Trading Fund shall pay to the Trading Advisor an amount equal to any United Kingdom value added tax or any analogous taxation so chargeable against production by the Trading Advisor of an appropriate tax invoice addressed to the Trading Fund.  If a Performance Fee shall have been paid by the Trading Fund to the Trading Advisor in respect of any calendar quarter and the Trading Advisor shall incur subsequent losses in trading on behalf of the Trading Fund, the Trading Advisor shall nevertheless be entitled to retain amounts previously paid to it in respect of New Net Trading Profits (as defined in Appendix A).

 

(c)     The Trading Advisor will be provided by the Sponsor with the data used by the Sponsor to compute the foregoing fees within twenty Business Days of the end of the relevant period.

 

(d)     For purposes of allocating fees hereunder, the Trading Fund shall issue a separate series of shares with respect to, or otherwise separately account for, the Aspect Series, the Aspect CS Series, and any series of the AlphaMosaic Platform.  Additional series may be issued to new investors with the prior written consent of the Trading Advisor.

 

10.     Term and Termination; Removal of the Sponsor.

 

(a)     This Agreement shall commence on the date hereof and, unless sooner terminated pursuant to sections (b), (c), (e) or (f) of this Section 10, shall continue in effect until the close of business on March 31, 2010 (the “ Initial Term ”).  After the expiration of the Initial Term, unless sooner terminated, this Agreement shall be renewed automatically on the same terms and conditions set forth herein for successive additional one-year terms, each of which shall commence on the first day of the month subsequent to the conclusion of the then-current term.  Notice of any such termination shall require thirty (30) days’ prior written notice.

 

(b)     This Agreement may be terminated at any time at the election of the Sponsor in its sole discretion upon at least one Business Day’s prior written notice to the Trading Advisor.  The Sponsor will use its reasonable best efforts to cause any termination to occur as of a month-end.

 

(c)     The Trading Advisor shall have the right to terminate this Agreement at any time upon ten (10) days’ written notice to the Trading Fund and the Sponsor in the event (i) of the receipt by the Trading Advisor of an opinion of independent c


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