EXHIBIT 10.03
FORM OF
TRADING ADVISORY AGREEMENT
This trading advisory agreement ("Agreement"), is made and
entered into effective as of the __ day of _____, 200__, by and among MAN-AHL
130, LLC, a Delaware limited liability company (the "Fund"), MAN INVESTMENTS
(USA) CORP., a Delaware (USA) corporation (the "Managing Member") and MAN-AHL
(USA) LIMITED, a United Kingdom corporation (the "Trading Advisor"). Capitalized
and other defined terms used in this Agreement and not otherwise expressly
defined herein shall have the same respective meanings as are set forth in the
current prospectus of the Fund (the "Prospectus").
WITNESSETH:
WHEREAS, the Fund seeks high medium term capital growth,
independent of the movement of the stock and bond markets, through the
speculative trading, directly and indirectly, in commodities, futures contracts,
forward contracts, swap transactions, options on the foregoing, other derivative
instruments and hybrid instruments, and other instruments and investments, in
each case of every kind and character, traded on United States and non-United
States exchanges and markets (including the interbank and over-the-counter
markets) (sometimes collectively referred to as "futures"), and
WHEREAS, the Managing Member desires to appoint the Trading
Advisor as the trading advisor of the Fund, and the Trading Advisor desires to
accept such appointment as the trading advisor of the Fund; and
WHEREAS, the Fund, the Managing Member and the Trading Advisor
wish to enter into this Agreement in order to set forth the terms and conditions
upon which the Trading Advisor will implement its trading strategies on behalf
of the Fund.
NOW, THEREFORE, in consideration of the premises and mutual
promises and agreements set forth herein, the parties hereto do hereby agree as
follows:
1. APPOINTMENT; DUTIES OF THE TRADING ADVISOR
(a) The Managing Member hereby appoints the Trading
Advisor as the trading advisor of the Fund, and the Trading Advisor accepts such
appointment, as the trading advisor of the Fund.
(b) For the period and on the terms and conditions set
forth in this Agreement, the Trading Advisor shall have sole authority and
responsibility for investing and reinvesting the Fund's assets allocated to the
Trading Advisor using the Trading Advisor's proprietary trading strategies as
described in the Prospectus. In addition, for the period and on the terms and
conditions set forth in this Agreement, the Managing Member hereby constitutes,
appoints and
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authorizes the Trading Advisor as the Fund's true and lawful agent and
attorney-in-fact, in the Fund's name, place and stead to trade, buy, sell,
spread, swap, exchange or otherwise trade (including short sales), deal in,
acquire, hold or dispose of "futures" on U.S. and non-U.S. exchanges and markets
(including the interbank and over-the-counter markets) for the account and risk
of the Fund.
(c) The Trading Advisor agrees to make all material
disclosures to the Fund and the Managing Member regarding itself and its
members, managers, partners, officers, directors, shareholders, employees,
affiliates or any person who controls any of the foregoing ("Principals and
Affiliates"), their investment performance and general investment methods, the
investment performance of their customer accounts (but not the identities of
customers) and otherwise as are required in the reasonable judgment of the Fund
or the Managing Member to be made in any filings required by any governmental
body or by any applicable law, regulation, rule or order or as are deemed
necessary by the Fund or the Managing Member to enable it to monitor the
performance of the Trading Advisor. Each party to this Agreement agrees to
maintain in strict confidence the terms of this Agreement and any and all
information, materials or other documents regarding the other parties which it
obtains pursuant to or in connection with this Agreement, and agrees that it
shall not disclose any such documents, material or other information to any
person other than each party's attorneys and accountants unless required to do
so by law, regulation, the request of any regulatory or self-regulatory
authority or valid legal process. The Fund and the Managing Member acknowledge
that the trading advice provided by the Trading Advisor constitutes proprietary
information of the Trading Advisor, and the Fund and the Managing Member shall
not make use of such advice in any manner or disclose such advice to any person
or entity unless required to do so by law, regulation, the request of any
regulatory or self-regulatory authority or valid legal process. 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.
(e) The Trading Advisor may refuse any additional
allocation of assets from the Managing Member for any reason. However, the
Trading Advisor understands and agrees that the Managing Member may at any time
remove all of the assets of the Fund from the management of the Trading Advisor
and may require the Trading Advisor, to the extent possible, to liquidate
existing positions in an orderly manner as soon as practicable.
2. COMPENSATION
(a) Upon the close of business on the last business day
of every calendar month, the Trading Advisor shall be paid a monthly management
fee, payable in arrears, in an amount equal to 1/6th of 1.0% of the Net Asset
Value of the Fund whether or not the Fund is profitable (approximately 2.0%
annually). For purposes of calculating the management fee, Net Asset Value of
the Fund is determined before reduction for the Trading Advisor's management and
incentive fees and fees paid by the Fund to the Managing Member and before
giving effect to any subscriptions, distributions or redemptions accrued or paid
as of such calendar month-end. In the event that a Member redeems some or all of
its Units or the Fund is dissolved or terminated as of any date other than the
last business day of a calendar month, the management
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fee shall be pro-rated based on the ratio that the number of days in the
calendar month through the date of such event bears to the total number of days
in the calendar month.
(b) Upon the close of business on the last business day
of every calendar month, the Fund shall pay the Trading Advisor an incentive fee
equal to 20.0% of the Net New Appreciation (as defined below), if any, achieved
by the Fund as of the end of such calendar month. The Trading Advisor shall be
entitled to retain all incentive fees previously paid to it even if subsequent
losses are incurred. However, no subsequent incentive fees shall be paid to the
Trading Advisor until the Trading Advisor has again achieved Net New
Appreciation for the Fund.
(c) Net New Appreciation achieved during a calendar month
shall mean the excess, if any, of (A) the Net Asset Value of the Fund as of the
end of the calendar month (without reduction for any incentive fees accrued or
paid to the Trading Advisor for the calendar month or for any redemptions or
distributions effected during or as of the end of such calendar month and
without increase for any additional capital contributions effected during or as
of the end of such calendar month) over (B) the Net Asset Value of the Fund as
of the end of the most recent prior calendar month for which an incentive fee
was accrued or paid with clause (B) reduced by the amount of the incentive fees
accrued or paid for such prior calendar month and also reduced by any
redemptions or distributions, and increased by any contributions, effected as of
or subsequent to the end of such prior calendar month through the first day of
the calendar month referred to in clause (A), above. For purposes of calculating
the first incentive fee payable to the Trading Advisor, clause (B) means the
initial Net Asset Value of the Fund on the day the Fund commences trading
activities. For purposes of calculating Net New Appreciation, taxes and
extraordinary expenses shall be excluded.
3. TERM AND TERMINATION
(a) Term. The term of this Agreement shall commence upon
the execution of this Agreement and shall terminate as hereinafter provided.
(b) Termination.
(i) This Agreement shall terminate automatically with
respect to the Fund in the event that the Fund is dissolved or
terminated.
(ii) This Agreement may be terminated at any time in its
entirety upon the consent of all the parties hereto.
(iii) This Agreement may be terminated by the Fund or the
Trading Advisor upon 90 days' prior notice to the Fund and the Managing
Member or the Trading Advisor, as the case may be.
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(c) The rights of the Trading Advisor to receive fees
earned through the date of termination of this Agreement shall survive any such
termination of this Agreement until satisfied.
4. STANDARD OF LIABILITY AND INDEMNITY
(a) Standard of Liability. The Trading Advisor shall not
be liable to the Fund, the Managing Member or their respective Principals and
Affiliates or their successors or assigns for any act or failure to act taken or
omitted by the Trading Advisor in good faith in a manner reasonably believed to
be in or not opposed to the best interests of the Fund if such act or failure to
act did not constitute negligence, willful misconduct or a breach of this
Agreement.
(b) Indemnity. (i) The Fund shall indemnify and hold
harmless the Trading Advisor and 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 that the Trading Advisor is or was
a trading advisor to the Fund, unless any such Losses are the direct result of
the Trading Advisor's failure to meet the standard of liability applicable to it
under SECTION 4(a).
(ii) The Trading Advisor shall indemnify and hold harmless
the Fund and the Managing Member from and against any and all Losses to which
they may become subject, if any such Losses are the direct result of the Trading
Advisor's failure to meet the standard of liability applicable to it under
SECTION 4(a).
(c) Promptly after receipt by any of the indemnified
parties under this Agreement of notice of any action, arbitration, claim,
demand, dispute, lawsuit or other proceeding (each a "Proceeding"), the party
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. To
the extent that the Indemnitor has actual knowledge of the commencement of such
Proceeding, the failure to notify the Indemnitor shall not relieve such
Indemnitor from any indemnification liability which it may have to such
Indemnitee pursuant to this SECTION 4, and the omission to notify the Indemnitor
shall not relieve the Indemnitor from any obligation or liability which it may
have to any such Indemnitee otherwise than under this SECTION 4. 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. In any such Proceeding, the Indemnitee shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the Indemnitee's own expense unless (i) otherwise agreed by
the Indemnitor and Indemnitee or (ii) the named parties to any such Proceeding
(including any impleaded parties) include both the Indemnitor and the
Indemnitee, and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them
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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 Indemnitees,
which firm shall be designated in writing by such Indemnitees and be reasonably
acceptable to the Indemnitor). The Indemnitee will cooperate with the Indemnitor
in connection with any such Proceeding and 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.
(d) An Indemnitor shall not be liable under this SECTION
4 for any settlement of any Proceeding effected without its consent with respect
to which indemnity may be sought hereunder.
(e) Any dispute as to whether a person or entity is entitled
to indemnification under SECTION 4 of this Agreement shall be determined by
binding arbitration in accordance with SECTION 17 of this Agreement.
(f) The provisions of this SECTION 4 shall survive the
termination of this Agreement.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) The Fund and the Managing Member represent, warrant
and covenant to the Trading Advisor with respect to the Fund as follows:
(i) it is duly organized and validly existing and in good
standing under the laws of the jurisdiction of its formation, with 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 in the Prospectus;
(ii) this Agreement has been duly and validly authorized,
executed and delivered by it and is a valid and binding agreement of it
enforceable in accordance with its terms;
(iii) the performance by it of its obligations under this
Agreement will not conflict with or result in a breach of any of the
terms or provisions of, or in the imposition of any lien, charge or
encumbrance upon any of the property or assets of it pursuant to the
terms of any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of the property or assets of it is subject, nor
will any such action or performance result in a violation of the
provisions of its organizational documents or any law, statute, order,
rule or regulation of any court or governmental authority or body
having jurisdiction over it;
(iv) it will comply in all material respects with all
laws, rules, regulations and orders of any governmental agency or
self-regulatory organization applicable to its
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business, this Agreement and the matters to be discharged by it with
respect to the offering of the Shares; and
(b) The Trading Advisor represents, warrants and
covenants to the Fund and the Managing Member as follows:
(i) it is duly organized and validly existing and in good
standing under the laws of the jurisdiction of its formation, with 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 in the Prospectus;
(ii) 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;
(iii) the performance by the Trading Advisor of its
obligations under this Agreement will not conflict with or result in a
breach of any of the terms or provisions of, or in the imposition of
any lien, charge or encumbrance upon any of the property or assets of
the Trading Advisor pursuant to the terms of, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Trading Advisor is a party or by which the Trading Advisor is bound
or to which any of the property or assets of the Trading Advisor is
subject, nor will any such action or performance result in a violation
of the provisions of its organizational documents or any law, statute,
order, rule or regulation of any court or governmental authority or
body having jurisdiction over the Trading Advisor; and
(iv) it will comply in all material respects with all
laws, rules, regulations and orders of any governmental agency or
self-regulatory organization applicable to its business and this
Agreement.
(c) The Managing Member represents, warrants and
covenants to the Trading Advisor as follows:
(i) it is duly organized and validly existing and in good
standing under the laws of the jurisdiction of its formation, with 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 in the Prospectus;
(ii) this Agreement has been duly and validly authorized,
executed and delivered by the Managing Member and is a valid and
binding agreement of the Managing Member enforceable in accordance with
its terms;
(iii) the performance by the Managing Member of its
obligations under this Agreement will not conflict with or result in a
breach of any of the terms or provisions of, or in the imposition of
any lien, charge or encumbrance upon any of the property or assets of
the Managing Member pursuant to the terms of, any indenture, mortgage,
deed
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of trust, loan agreement or other agreement or instrument to which the
Managing Member is a party or by which the Managing Member is bound or
to which any of the property or assets of the Managing Member is
subject, nor will any such action or performance result in a violation
of the provisions of its organizational documents or any law, statute,
order, rule or regulation of any court or governmental authority or
body having jurisdiction over the Managing Member; and
(iv) it will comply in all material respects with all
laws, rules, regulations and orders of any governmental agency or
self-regulatory organization applicable to its business and this
Agreement.
(d) Each party hereto will promptly notify the other
parties of the commencement of any Proceeding involving it or its Principals and
Affiliates, whether or not any such Proceeding also involves any other party
hereto.
(e) All representations, warranties and covenants
contained in this Agreement shall be continuing during the term of this
Agreement and shall survive the termination of this Agreement with respect to
any matter arising while this Agreement was in effect. Each party hereby agrees
that as of the date of this Agreement it is, and during its term shall be, in
compliance with its representations, warranties and covenants herein contained.
In addition, if at any time any event occurs which would make, or tend to make,
any of such representations, warranties or covenants not true the affected party
will use its best efforts to promptly notify the other parties of such facts in
the manner provided below. All representations, warranties and covenants herein
contained shall inure to the benefit of the parties to whom it is addressed and
their respective heirs, executors, administrators, legal representatives,
successors and permitted assigns.
6. COMPLETE AGREEMENT
This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof, and no other agreement,
verbal or otherwise, shall be binding on the parties hereto.
7. ASSIGNMENT
This Agreement may not be assigned by a party without the
express written consent of the other parties and any assignment without the
consent of all the parties hereto shall be null and void.
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8. AMENDMENT
This Agreement may not be amended or modified except by the
written consent of all of the parties hereto.
9. SUCCESSORS
This Agreement shall be binding upon and inure to the benefit
of the parties hereto, their successors and permitted assigns, and except as
otherwise provided in SECTION 4 and SECTION 5, above, no other person shall have
any right or obligation under this Agreement.
10. 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, by facsimile or by 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 Fund, to it at:
c/o Man Investments (USA) Corp.
123 North Wacker Drive
Suite 2800
Chicago, Illinois 60606 USA
Attn: Legal and Compliance
Fax No.: 1-312-881-6678
If to the Managing Member, to it at:
123 North Wacker Drive
Suite 2800
Chicago, Illinois 60606 USA
Attn: Legal and Compliance
Fax. No.: 1-312-881-6678
If to the Trading Advisor, to it at:
Sugar Quay
Lower Thames Street
London EC3R 6DU
England
Attn: Managing Director
Fax No.: 011-44-207-144-2001
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11. PARTIES INDEPENDENT; OTHER ACCOUNTS AND ACTIVITIES
(a) Each of the parties hereto shall for all purposes
herein be deemed to be an independent contractor and, except as otherwise
expressly provided herein, shall have no authority to act for or represent any
other party in any way or otherwise to be deemed an agent, joint venturer,
partner or sponsor of any other party.
(b) The Trading Advisor's present business includes
managing and advising its assets, the assets of its Principals and Affiliates
and discretionary client accounts in the purchase and sale of futures and
securities and it will be managing and advising such accounts and assets for
other clients during the same period that it is managing and advising the Fund's
account. The services to be 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 futures and securities trading accounts
for other persons during the term of this Agreement and to use the same or
different information and investment methodologies which it obtains, produces or
utilizes in the performance of services for the Fund. The parties hereto
acknowledge that performance results obtained for the Fund's account may differ
from performance results obtained for other accounts under the Trading Advisor's
management and that the Trading Advisor may have an incentive to favor certain
accounts over the Fund's account.
12. SURVIVAL
The provisions of this Agreement shall survive the termination
of this Agreement with respect to any matter arising while this Agreement was in
effect.
13. HEADINGS
Headings to sections herein are for the convenience of the
parties only and are not intended to be or to affect the meaning or
interpretation of this Agreement.
14. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. Signatures on this Agreement may be
communicated by facsimile transmission and shall be binding upon the parties so
transmitting their signatures. Counterparts with original signatures shall be
provided to the other parties following the applicable facsimile transmission;
provided, that the failure to provide the original counterpart shall have no
effect on the validity or the binding nature of this Agreement.
15. WAIVER OF BREACH; CURE 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 a 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. In the event that a
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party becomes aware that it is in breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement, the affected
party will use its best efforts to promptly take such actions as it deems
necessary, in its sole discretion, to cure such breach.
16. GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of England without giving effect to the principles of
conflicts of laws.
17. 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, USA, unless
otherwise agreed to by the parties hereto, and in accordance with the rules then
obtaining of the National Futures Association, or if no such rule is in effect
or if jurisdiction is declined, then in accordance with the rules then obtaining
of the American Arbitration Association; provided, however, that the
arbitrator(s) shall be knowledgeable in industry standards and practices and the
matters giving rise to the dispute, that the arbitrator(s) shall not have the
power and authority to award punitive damages, that 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 that the
arbitrator(s) shall state their reasons for their award and their legal and
factual conclusions underlying the award in a written opinion. The award of the
arbitrator(s), or a majority of them, shall be final, and judgment upon the
award may be confirmed and entered in any court, state or Federal, having
jurisdiction.
18. CONSENT TO JURISDICTION
Except as otherwise provided in SECTION 17, above, each party
hereto expressly and irrevocably agrees: (a) that it waives any objection, and
specifically consents, to venue in the courts located in London, England, 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 in any manner permitted by applicable rules of civil
procedure or rules of the courts of London, England. In addition each party
hereto expressly and irrevocably waives, in respect of any action brought in any
court located in London, England or any resulting judgment, any objection, and
hereby specifically consents, to the personal and subject matter 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 jurisdiction is a more suitable forum
for the hearing and adjudication of any claim or dispute raised in such action.
19. ACKNOWLEDGMENT OF TRADING ADVISOR'S DISCLOSURE
DOCUMENT
The Managing Member on behalf of the Fund hereby acknowledges
receipt of the Trading Advisor's Disclosure Document, dated as of April 1, 2005.
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IN WITNESS WHEREOF, this Agreement has been executed and
delivered for and on behalf of the undersigned as of the day and year first
above written.
MAN-AHL 130, LLC.
By: Man Investments (USA) Corp.
Its Managing Member
By:
-----------------------------------
Name:
Title:
MAN INVESTMENTS (USA) CORP.
By:
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Name:
Title:
MAN-AHL (USA) LIMITED
By:
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Name:
Title:
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