EXHIBIT 10.01(i)

 

ADVISORY AGREEMENT

 

among

 

COLBY GLOBAL HORIZONS, LLC,

 

BLACKROCK INVESTMENT MANAGEMENT, LLC,

 

and

 

CRABEL CAPITAL MANAGEMENT, LLC

 

Dated as of March 30, 2010

 

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ADVISORY AGREEMENT

 

Table of Contents

 

 

 

Page

 

 

 

1.

Undertakings in Connection with Offering of Units

1

2.

Duties of the Trading Advisor

3

3.

Trading Advisor Independent

5

4.

Commodity Broker; Floor Brokers

5

5.

Allocation of Company Assets to Trading Advisor

5

6.

Incentive Fee

6

7.

Term and Termination

7

8.

Right to Advise Others; Uniformity of Acts and Practices

7

9.

Speculative Position Limits

8

10.

Additional Undertakings by the Trading Advisor

8

11.

Representations and Warranties

9

12.

Accounting from the Company or the Manager

12

13.

Entire Agreement

12

14.

Indemnification

12

15.

Assignment

13

16.

Amendment; Waiver

13

17.

Severability

13

18.

Notices

13

19.

Governing Law

14

20.

Consent to Jurisdiction

14

21.

Remedies

15

22.

Promotional Material

15

23.

Confidentiality

15

24.

Survival

15

25.

Counterparts

15

26.

Headings

16

Appendix A - List of Authorized Traders

 

A-1

 

 

 

Appendix B — List of Commodity Interests Traded by Trading Advisor

 

B-1

 

 

 

Appendix C - Commodity Trading Authority

 

C-1

 

 

 

Appendix D - Acknowledgment of Receipt of Crabel Memorandum

 

D-1

 

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ADVISORY AGREEMENT

 

THIS ADVISORY AGREEMENT (the “Agreement”), made as of this 30th day of
March 2010, among COLBY GLOBAL HORIZONS, LLC, a Delaware limited liability
company (the “Company”), BLACKROCK INVESTMENT MANAGEMENT LLC, a Delaware limited
liability company and the manager of the Company (the “Manager”), and CRABEL
CAPITAL MANAGEMENT, LLC (the “Trading Advisor”);

 

W I T N E S S E T H:

 

WHEREAS, the Company trades, buys, sells or otherwise acquires, holds or
disposes of forward contracts, futures contracts for commodities, financial
instruments and currencies on United States and foreign exchanges, any rights
pertaining thereto and any options thereon or on physical commodities and
engages in all activities incident thereto (the foregoing forms of investment
being collectively referred to herein as “commodity interests”);

 

WHEREAS, the sole holder of interests in the Company as of the date hereof,
BlackRock Global Horizons I, LP (the “Fund”), is now offering Units of Limited
Partnership Interest in the Fund (“Units”) for sale to investors in an offering
exempt from registration under the Securities Act of 1933, as amended (the “1933
Act”), pursuant to Section 4(2) thereof and Rule 506 under Regulation D
promulgated thereunder, as described in the Fund’s Confidential Private
Placement Memorandum (the “Memorandum”) that has been filed with the Commodity
Futures Trading Commission (the “CFTC”) and 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 by the CFTC (the “Commodity Regulations”), and NFA
rules promulgated under the CEA (the “NFA Rules”);

 

WHEREAS, the Fund had previously sold Units publicly pursuant to an effective
registration under the 1933 Act.  Such public offering was discontinued in 1998,
and the Units now being offered are the same class of equity securities as the
outstanding Units;

 

WHEREAS, the Trading Advisor is engaged in the business of, among other things,
making trading decisions on behalf of investors in the purchase and sale of
certain commodity interests; and

 

WHEREAS, the Company desires the Trading Advisor, upon the terms and conditions
set forth herein, to act as a trading advisor for the Company and to make
commodity interests investment decisions for the Company with respect to the
Company’s assets from time to time, and the Trading Advisor desires to so act;

 

NOW, THEREFORE, the parties hereto do hereby agree as follows:

 

1.             UNDERTAKINGS IN CONNECTION WITH OFFERING OF UNITS.

 

(A)           UNDERTAKINGS BY THE TRADING ADVISOR.  THE TRADING ADVISOR AGREES
TO USE ITS BEST EFFORTS TO COOPERATE WITH THE FUND AND THE MANAGER IN AMENDING
THE MEMORANDUM OR ANY OTHER WRITTEN MATERIALS, INCLUDING WITHOUT LIMITATION BY
PROVIDING, AS PROMPTLY AS MAY BE REASONABLY PRACTICABLE, ALL INFORMATION (IF
ANY) REGARDING THE TRADING ADVISOR AND ITS PRINCIPALS

 

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WHICH THE MANAGER REASONABLY BELIEVES TO BE NECESSARY OR ADVISABLE TO INCLUDE IN
THE MEMORANDUM, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, THAT
NOTHING HEREIN SHALL REQUIRE THE TRADING ADVISOR TO DISCLOSE ANY PROPRIETARY OR
CONFIDENTIAL INFORMATION RELATED TO ITS TRADING PROGRAMS, SYSTEMS OR STRATEGIES
OR ANY INFORMATION RELATING TO ITS CLIENTS; PROVIDED FURTHER THAT THE MANAGER,
THE COMPANY AND THE FUND AGREE THAT THEY WILL NOT DISCLOSE IN WRITING OR REVISE
OR AMEND ANY WRITTEN DISCLOSURE RELATED TO (I) THE TRADING ADVISOR’S PRINCIPALS,
(II) THE TRADING ADVISOR’S TRACK RECORD OR (III) THE TRADING ADVISOR’S TRADING
PROGRAM WITHOUT THE PRIOR WRITTEN CONSENT (WHICH MAY BE BY ELECTRONIC MAIL) OF
THE TRADING ADVISOR.  NOTWITHSTANDING THE FOREGOING, (X) THE TRADING ADVISOR
AGREES THAT THE COMPANY, THE MANAGER AND THE FUND MAY DISCLOSE ANY OF THE
FOREGOING INFORMATION WITHOUT THE TRADING ADVISOR’S PRIOR WRITTEN CONSENT TO THE
EXTENT SUCH DISCLOSURE IS REQUIRED UNDER APPLICABLE LAW OR REGULATION
(INCLUDING, WITHOUT LIMITATION, IN THE FUND’S REGULATORY FILINGS) OR BY LEGAL OR
REGULATORY AUTHORITY AND (Y) THE COMPANY, THE MANAGER AND THE FUND MAY DISCLOSE
WITHOUT THE TRADING ADVISOR’S PRIOR WRITTEN CONSENT THE NAME OF THE TRADING
ADVISOR, PERFORMANCE AND PORTFOLIO STATISTICS OF THE TRADING ADVISOR’S TRADING
PROGRAM SO LONG AS SUCH PERFORMANCE AND PORTFOLIO STATISTICS ARE AGGREGATED WITH
OTHER PORTFOLIOS AND SUCH INFORMATION IS NOT UNIQUELY IDENTIFIABLE WITH THE
TRADING ADVISOR’S TRADING PROGRAM.

 

(B)           CERTAIN DEFINED TERMS.  AS USED IN THIS AGREEMENT, THE TERM
“PRINCIPAL” SHALL HAVE THE SAME MEANING GIVEN TO SUCH TERM IN SECTION 4.10(E) OF
THE COMMODITY REGULATIONS, AND THE TERM “AFFILIATE” SHALL MEAN AN INDIVIDUAL OR
ENTITY (INCLUDING A STOCKHOLDER, DIRECTOR, OFFICER, EMPLOYEE, AGENT, OR
PRINCIPAL) THAT DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED BY, OR IS UNDER
COMMON CONTROL WITH ANY OTHER INDIVIDUAL OR ENTITY.  OTHER TERMS USED BUT NOT
DEFINED HEREIN HAVE THE MEANINGS ASCRIBED TO THEM IN THE MEMORANDUM.

 

(C)           USE OF MEMORANDUM AND OTHER SOLICITATION MATERIAL.  NEITHER THE
TRADING ADVISOR, ITS PRINCIPALS NOR ANY OF ITS EMPLOYEES, AFFILIATES OR AGENTS,
THE EMPLOYEES, AFFILIATES OR AGENTS OF SUCH AFFILIATES, OR THEIR RESPECTIVE
SUCCESSORS OR ASSIGNS SHALL USE, PUBLISH, CIRCULATE OR DISTRIBUTE THE MEMORANDUM
(INCLUDING ANY AMENDMENT OR SUPPLEMENT THERETO) OR ANY RELATED SOLICITATION
MATERIAL NOR SHALL ANY OF THE FOREGOING ENGAGE IN ANY MARKETING, SALES OR
PROMOTIONAL ACTIVITIES IN CONNECTION WITH THE OFFERING OF UNITS, EXCEPT AS MAY
BE REQUESTED BY THE MANAGER AND AGREED TO BY THE TRADING ADVISOR.

 

(D)           UPDATED PERFORMANCE INFORMATION.  AT ANY TIME WHILE UNITS CONTINUE
TO BE OFFERED AND SOLD, AT THE WRITTEN REQUEST OF THE FUND OR THE MANAGER, THE
TRADING ADVISOR, AT ITS OWN EXPENSE, SHALL PROMPTLY PROVIDE THE FUND AND THE
MANAGER WITH COMPLETE AND ACCURATE PERFORMANCE INFORMATION (IN FORM AND
SUBSTANCE CONSISTENT WITH SECTION 4.35 OF THE COMMODITY REGULATIONS AND THE NFA
RULES) REFLECTING THE ACTUAL PERFORMANCE OF THE ACCOUNTS DIRECTED BY THE TRADING
ADVISOR PURSUANT TO THE PROGRAM (AS DEFINED BELOW) UP TO THE LATEST PRACTICABLE
DATE (CONSISTENT WITH SECTION 4.35 OF THE COMMODITY REGULATIONS) PRIOR TO THE
DATE OF THE MEMORANDUM AS AMENDED OR SUPPLEMENTED, TOGETHER WITH ANY REPORTS OR
LETTERS RELATING TO SUCH PERFORMANCE DATA RECEIVED FROM ACCOUNTANTS AND IN THE
POSSESSION OF THE TRADING ADVISOR.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, THE TRADING ADVISOR SHALL NOT BE REQUIRED TO PROVIDE SUCH INFORMATION
MORE FREQUENTLY THAN MONTHLY.

 

(E)           ACCESS TO BOOKS AND RECORDS.  UPON REASONABLE NOTICE TO THE
TRADING ADVISOR, THE COMPANY OR THE MANAGER SHALL HAVE THE RIGHT TO HAVE ACCESS
TO THE TRADING ADVISOR’S OFFICES IN ORDER TO INSPECT AND COPY SUCH BOOKS AND
RECORDS DURING NORMAL BUSINESS

 

2

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HOURS AS MAY ENABLE THEM TO VERIFY THE ACCURACY AND COMPLETENESS OF OR TO
SUPPLEMENT AS NECESSARY THE DATA FURNISHED BY THE TRADING ADVISOR PURSUANT TO
SECTION L(D) OF THIS AGREEMENT OR TO VERIFY COMPLIANCE WITH THE TERMS OF THIS
AGREEMENT (SUBJECT TO SUCH RESTRICTIONS AS THE TRADING ADVISOR MAY REASONABLY
DEEM NECESSARY OR ADVISABLE SO AS TO PRESERVE THE CONFIDENTIALITY OF PROPRIETARY
INFORMATION CONCERNING SUCH TRADING SYSTEMS, METHODS, MODELS, STRATEGIES AND
FORMULAS AND OF THE IDENTITY OF THE TRADING ADVISOR’S CLIENTS).

 

(F)            TRADING LEVEL.  THE COMPANY OR THE MANAGER SHALL SELECT A TRADING
LEVEL FOR THE COMPANY (THE “TRADING LEVEL”).  SUCH TRADING LEVEL CAN BE THE
INITIAL ACTUAL CASH AND CASH EQUIVALENTS CONTRIBUTED TO THE COMPANY OR IT CAN
INCLUDE A “NOTIONAL” AMOUNT IN EXCESS OF THE ACTUAL ASSETS.  THE COMPANY OR THE
MANAGER AGREES TO NOTIFY THE TRADING ADVISOR OF ANY INTENT TO INCREASE OR
DECREASE THE TRADING LEVEL OF THE COMPANY AND THE MANAGER AGREES THAT IT WILL
OBTAIN PRIOR APPROVAL FROM THE TRADING ADVISOR TO INCREASE THE TRADING LEVEL OF
THE COMPANY.  THE TRADING ADVISOR MAY WITHHOLD SUCH APPROVAL IN ITS SOLE
DISCRETION.  ANY PROFIT OR LOSS IN THE COMPANY SHALL BE REINVESTED IN THE
COMPANY FOR TRADING LEVEL PURPOSES.  THE COMPANY OR THE MANAGER AGREES THAT THE
TRADING LEVEL OF THE COMPANY SHALL BE MAINTAINED IN EVEN MILLION DOLLAR
INCREMENTS.

 

(G)           ERROR POLICY.  WHEN AN ERROR IS DISCOVERED, THE TRADING ADVISOR
WILL TAKE ACTION TO CORRECT THE ERROR TO THE EXTENT POSSIBLE AND AS SOON AS
POSSIBLE.  IF A BROKER MAKES AN ERROR, THE TRADING ADVISOR WILL REQUEST THE
BROKER TO MAKE THE COMPANY’S ACCOUNT WHOLE.  TRADING ERRORS NOT RESOLVED BY THE
BROKER, INCLUDING ERRORS MADE BY THE TRADING ADVISOR, EITHER TO THE BENEFIT OR
DETRIMENT OF THE COMPANY ARE BORNE BY THE COMPANY.  IN ACCORDANCE WITH THE
INDEMNIFICATION PROVISIONS IN SECTION 14 OF THIS AGREEMENT, THE TRADING ADVISOR
WILL BE OBLIGATED TO REIMBURSE THE COMPANY FOR ANY TRADE ERROR RESULTING FROM
TRADING ADVISOR’S GROSS NEGLIGENCE, MATERIAL BREACH OF THIS AGREEMENT OR
MATERIAL BREACH OF ANY FIDUCIARY OBLIGATION TO THE COMPANY.

 

(H)           ELECTRONIC ORDER ENTRY RISKS.  THE TRADING ADVISOR MAY PLACE
TRADES VIA ELECTRONIC ORDER PLATFORMS FOR THE COMPANY OR THE MANAGER.  IN SUCH
INSTANCES, TRADING THROUGH AN ELECTRONIC TRADING OR ORDER ROUTING SYSTEM MAY
EXPOSE THE COMPANY TO RISKS ASSOCIATED WITH SYSTEM OR COMPONENT FAILURE.  THE
RISK EXISTS THAT A TRADE MAY NOT BE PLACED, A TRADE MAY BE PLACED AT A LATER
TIME THAN ORIGINALLY DESIRED, OR A TRADE MAY NOT BE ABLE TO BE CANCELLED.  THESE
OCCURRENCES, WHICH ARE BEYOND THE TRADING ADVISOR’S CONTROL, COULD RESULT IN
LOSSES TO THE COMPANY.

 

2.             DUTIES OF THE TRADING ADVISOR.

 

(A)           SPECULATIVE TRADING.  AS OF THE DATE OF THIS AGREEMENT, THE
TRADING ADVISOR SHALL ACT AS A TRADING ADVISOR FOR THE COMPANY, ACTING
INDEPENDENTLY FROM ANY OTHER ADVISORS OR MANAGERS SELECTED TO DIRECT ACCOUNTS ON
BEHALF OF THE FUND.  THE TRADING ADVISOR AND THE COMPANY AGREE THAT IN MANAGING
THE ASSETS OF THE COMPANY, THE TRADING ADVISOR SHALL UTILIZE ITS CRABEL TWO PLUS
PROGRAM (THE “PROGRAM”) AS DESCRIBED IN THE TRADING ADVISOR’S CRABEL FUND, L.P.
PRIVATE PLACEMENT MEMORANDUM DATED JANUARY 1, 2010 (THE “CRABEL MEMORANDUM”). 
THE TRADING ADVISOR MAY TRADE A DIFFERENT PORTFOLIO FOR THE COMPANY ONLY WITH
THE CONSENT OF THE MANAGER.  EXCEPT AS PROVIDED OTHERWISE IN THIS SECTION 2, THE
TRADING ADVISOR SHALL HAVE SOLE AND EXCLUSIVE AUTHORITY AND RESPONSIBILITY FOR
DIRECTING THE INVESTMENT AND REINVESTMENT OF THE COMPANY’S ASSETS UTILIZING THE
PROGRAMS PURSUANT TO AND IN ACCORDANCE

 

3

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WITH THE TRADING ADVISOR’S BEST JUDGMENT AND ITS APPROACH AS DESCRIBED IN THE
CRABEL MEMORANDUM, AND AS REFINED AND MODIFIED FROM TIME TO TIME IN THE FUTURE
IN ACCORDANCE HEREWITH, FOR THE PERIOD AND ON THE TERMS AND CONDITIONS SET FORTH
HEREIN.  ONLY THOSE INDIVIDUALS CURRENTLY EMPLOYED BY THE TRADING ADVISOR AND
LISTED IN APPENDIX A ARE PERMITTED TO IMPLEMENT TRADES FOR THE COMPANY. 
NOTWITHSTANDING THE FOREGOING, THE COMPANY OR THE MANAGER MAY OVERRIDE THE
TRADING INSTRUCTIONS OF THE TRADING ADVISOR TO THE EXTENT NECESSARY:  (I) TO
FUND ANY DISTRIBUTIONS OR REDEMPTIONS OF UNITS TO BE MADE BY THE FUND; (II) TO
PAY THE COMPANY’S OR THE FUND’S EXPENSES; AND/OR (III) TO COMPLY WITH
SPECULATIVE POSITION LIMITS; PROVIDED THAT THE COMPANY AND THE MANAGER SHALL
PERMIT THE TRADING ADVISOR THREE DAYS IN WHICH TO LIQUIDATE POSITIONS FOR THE
PURPOSES SET FORTH IN CLAUSES (I)-(II) PRIOR TO EXERCISING ITS OVERRIDE
AUTHORITY.  THE TRADING ADVISOR WILL HAVE NO LIABILITY FOR THE RESULTS OF ANY OF
THE COMPANY’S OR THE MANAGER’S INTERVENTIONS IN (I)-(II), ABOVE.

 

The Company and the Manager both specifically acknowledge that in agreeing to
manage the Company, the Trading Advisor is not making any guarantee of profits
or of protections against loss.

 

The Trading Advisor shall give the Company and the Manager prompt written notice
of any proposed material change in the Program or the manner in which trading
decisions are to be made or implemented and shall not make any such proposed
material change with respect to trading for the Company without having given the
Company and the Manager at least 30 days’ prior written notice of such change. 
The addition and/or deletion of commodity interests from the Company’s portfolio
managed by the Trading Advisor shall not be deemed a change in the Trading
Advisor’s trading approach and prior written notice to the Company or the
Manager shall not be required therefor, except as set forth in
section 2(b) below; provided that, with respect to the Company, the Trading
Advisor may trade a different trading program in managing the Company only with
the consent of the Manager.

 

(B)           LIST OF COMMODITY INTERESTS TRADED BY THE TRADING ADVISOR.  THE
TRADING ADVISOR SHALL PROVIDE THE COMPANY AND THE MANAGER WITH A COMPLETE LIST
OF COMMODITY INTERESTS WHICH IT INTENDS TO TRADE ON THE COMPANY’S BEHALF.  ALL
COMMODITY INTERESTS TRADED SHALL BE LISTED ON APPENDIX B TO THIS AGREEMENT.  THE
ADDITION OF COMMODITY INTERESTS (OTHER THAN FORWARD CONTRACTS ON FOREIGN
CURRENCIES) TO THE COMPANY’S PORTFOLIO MANAGED BY THE TRADING ADVISOR AS SET
FORTH IN APPENDIX B TO THIS AGREEMENT SHALL REQUIRE PRIOR WRITTEN NOTICE TO THE
COMPANY OR THE MANAGER AND AN AMENDMENT TO APPENDIX B.

 

(C)           INVESTMENT OF ASSETS HELD IN SECURITIES AND CASH.  NOTWITHSTANDING
ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, THE COMPANY AND THE MANAGER,
AND NOT THE TRADING ADVISOR, SHALL HAVE THE SOLE AND EXCLUSIVE AUTHORITY AND
RESPONSIBILITY WITH REGARD TO THE INVESTMENT, MAINTENANCE AND MANAGEMENT OF THE
COMPANY’S ASSETS OTHER THAN IN RESPECT OF THE TRADING ADVISOR’S TRADING OF THE
COMPANY’S ASSETS IN INSTRUMENTS LISTED IN APPENDIX B.

 

(D)           TRADING AUTHORIZATION.  PRIOR TO THE COMPANY’S ACCEPTANCE OF
TRADING ADVICE FROM THE TRADING ADVISOR IN ACCORDANCE WITH THIS AGREEMENT, THE
COMPANY SHALL DELIVER TO THE TRADING ADVISOR A TRADING AUTHORIZATION IN THE FORM
OF APPENDIX C HERETO APPOINTING THE TRADING ADVISOR AS AN AGENT OF THE COMPANY
AND ATTORNEY-IN-FACT FOR SUCH PURPOSE.

 

4

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(E)           DELIVERY OF CRABEL MEMORANDUM UPDATES.  THE TRADING ADVISOR SHALL,
DURING THE TERM OF THIS AGREEMENT, DELIVER TO THE COMPANY COPIES OF ALL UPDATES
TO THE CRABEL MEMORANDUM NO LATER THAN THE TIME AT WHICH THE TRADING ADVISOR
MAKES SUCH UPDATES AVAILABLE TO ITS CLIENTS, AND THE MANAGER ON BEHALF OF THE
COMPANY SHALL, IF REQUESTED, SIGN THE ACKNOWLEDGMENT OF RECEIPT OF CRABEL
MEMORANDUM IN THE FORM OF APPENDIX D HERETO, FOR THE INITIAL CRABEL MEMORANDUM
SO DELIVERED.

 

(F)            TRADE RECONCILIATIONS.  THE TRADING ADVISOR ACKNOWLEDGES ITS
OBLIGATION TO REVIEW ITS COMMODITY INTEREST POSITIONS EACH BUSINESS DAY AND TO
NOTIFY THE COMPANY AND THE MANAGER PROMPTLY OF ANY MATERIAL ERRORS COMMITTED BY
THE TRADING ADVISOR OR ANY TRADE WHICH THE TRADING ADVISOR BELIEVES WAS NOT
EXECUTED IN ACCORDANCE WITH ITS INSTRUCTIONS AND WHICH CANNOT BE PROMPTLY
RESOLVED. THE TRADING ADVISOR WILL USE ITS OWN SYSTEMS TO EVALUATE TRADE AND
PORTFOLIO INFORMATION.

 

(G)           TRADE INFORMATION.   THE TRADING ADVISOR SHALL USE REASONABLE
EFFORTS TO PROVIDE TRADE INFORMATION TO OMR SYSTEMS BY ELECTRONIC FILE BY
6:00 P.M. US EAST COAST TIME ON THE DATE OF ANY TRADE MADE ON BEHALF OF THE
COMPANY.

 

3.             TRADING ADVISOR INDEPENDENT.  FOR ALL PURPOSES OF THIS AGREEMENT,
THE TRADING ADVISOR SHALL BE DEEMED TO BE AN INDEPENDENT CONTRACTOR.  NOTHING
CONTAINED HEREIN SHALL CREATE OR CONSTITUTE THE TRADING ADVISOR, THE FUND OR THE
MANAGER AS A MEMBER OF ANY PARTNERSHIP, JOINT VENTURE, ASSOCIATION, SYNDICATE,
UNINCORPORATED BUSINESS OR OTHER SEPARATE ENTITY, NOR SHALL THIS AGREEMENT BE
DEEMED TO CONFER ON ANY OF THEM ANY EXPRESS, IMPLIED, OR APPARENT AUTHORITY TO
INCUR ANY OBLIGATION OR LIABILITY ON BEHALF OF ANY OTHER.  THE PARTIES
ACKNOWLEDGE THAT THE TRADING ADVISOR HAS NOT BEEN AN ORGANIZER OR PROMOTER OF
THE FUND.

 

4.             COMMODITY BROKER; FLOOR BROKERS.

 

(A)           CLEARING OF ALL TRADES.  THE TRADING ADVISOR SHALL CLEAR ORDERS
FOR ALL COMMODITY INTEREST TRANSACTIONS FOR THE COMPANY THROUGH SUCH COMMODITY
BROKER OR BROKERS AS THE COMPANY SHALL DESIGNATE FROM TIME TO TIME IN ITS SOLE
DISCRETION (THE “CLEARING BROKER”).  THE TRADING ADVISOR SHALL RECEIVE COPIES OF
ALL DAILY AND MONTHLY BROKERAGE STATEMENTS FOR THE COMPANY DIRECTLY FROM THE
CLEARING BROKER AND THE TRADING ADVISOR WILL PROVIDE THE FUND WITH A LIST OF
EXECUTING BROKERS USED BY THE COMPANY ON A QUARTERLY BASIS.

 

The parties acknowledge that the Trading Advisor has no authority or
responsibility for selecting a commodity broker or dealers or for the
negotiation of brokerage commission rates.  If necessary for the Trading Advisor
to trade pursuant to the Program, the Company shall provide adequate dealing
lines of credit for the Trading Advisor to place orders for spot and forward
currency contracts on behalf of the Company.

 

5.             ALLOCATION OF COMPANY ASSETS TO TRADING ADVISOR; ALLOCATION OF
RECEIPTS AND CHARGES.

 

(A)           THE MANAGER HAS ALLOCATED A PORTION OF THE FUND’S ASSETS TO THE
COMPANY TO BE MANAGED IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.  THE
MANAGER MAY, IN ITS SOLE DISCRETION, REALLOCATE FUND ASSETS BY CONTRIBUTING TO
OR WITHDRAWING AMOUNTS FROM THE COMPANY AS OF ANY MONTH-END WITH 3 DAYS NOTICE.

 

5

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(B)           GAINS AND RECEIPTS (E.G., TRADING PROFITS AND, IN SOME INSTANCES,
INTEREST INCOME), LOSSES AND CHARGES (E.G., TRADING LOSSES, INCENTIVE FEES,
BROKERAGE COMMISSIONS) SPECIFIC TO THE COMPANY SHALL BE ALLOCATED ENTIRELY TO
THE COMPANY.  GAINS AND RECEIPTS, LOSSES AND CHARGES NOT SPECIFIC TO (I) THE
COMPANY OR (II) ANY OTHER COMPANY OR ACCOUNT HELD BY THE FUND AND MANAGED BY A
SPECIFIC TRADING ADVISOR, SHALL BE ALLOCATED AMONG ALL OF THE COMPANIES AND
ACCOUNTS OF THE FUND MANAGED BY THE DIFFERENT TRADING ADVISORS, INCLUDING THE
COMPANY, PRO RATA BASED ON THE BEGINNING OF MONTH VALUE OF EACH SUCH COMPANY AND
ACCOUNT AFTER REDUCTION FOR ACCOUNT SPECIFIC CHARGES.  THE VALUE OF THE COMPANY
AFTER TAKING INTO ACCOUNT ALL REALIZED AND UNREALIZED GAINS AND LOSSES DESCRIBED
IN THIS SECTION 5(B) IS THE COMPANY’S “MARK-TO-MARKET VALUE.”

 

(C)           THE VALUE OF THE COMPANY DETERMINED BY DEDUCTING FROM THE
COMPANY’S MARK-TO-MARKET VALUE [      ]* WITH THE EXCEPTION OF ANY CHARGES OR
ACCRUALS FOR THE FEES PROVIDED FOR IN SECTION 6 IS THE COMPANY’S “NET ASSET
VALUE BEFORE FEES.” ANY OTHER FEES OR CHARGES [     ]* SPECIFIC OR NON-SPECIFIC
TO THE COMPANY, WILL BE TREATED AS WITHDRAWALS FOR THE PURPOSE OF CALCULATING
THE NET ASSET VALUE BEFORE FEES.  [                  ]*

 

6.             INCENTIVE FEE.

 

(A)           THE COMPANY WILL PAY TO THE TRADING ADVISOR, [        ]*
(“INCENTIVE FEE CALCULATION DATE”) WITHIN 30 DAYS OF THE INCENTIVE FEE
CALCULATION DATE, AN INCENTIVE FEE EQUAL TO [   ]* OF ANY NEW TRADING PROFIT
RECOGNIZED BY THE COMPANY AS OF SUCH INCENTIVE FEE CALCULATION DATE
[                          ].*

 

(B)

 

(C)           NEW TRADING PROFIT EQUALS ANY INCREASE IN THE COMPANY’S NET ASSET
VALUE BEFORE FEES AS OF THE CURRENT INCENTIVE FEE CALCULATION DATE OVER THE HIGH
WATER MARK ATTRIBUTABLE TO THE COMPANY.  NEW TRADING PROFIT WILL BE CALCULATED
PRIOR TO REDUCTION FOR ANY ACCRUED INCENTIVE FEES (SEE SECTION 5(C)).

 

(D)           THE HIGH WATER MARK ATTRIBUTABLE TO THE COMPANY SHALL BE EQUAL TO
THE HIGHEST NET ASSET VALUE OF THE COMPANY (FOR AVOIDANCE OF DOUBT, AFTER
REDUCTION FOR THE INCENTIVE FEE THEN PAID), AS OF ANY PRECEDING INCENTIVE FEE
CALCULATION DATE.  THE HIGH WATER MARK SHALL BE INCREASED DOLLAR-FOR-DOLLAR BY
ANY CAPITAL ALLOCATED TO THE COMPANY AND DECREASED PROPORTIONATELY WHEN CAPITAL
IS REALLOCATED AWAY FROM THE COMPANY (OTHER THAN TO PAY EXPENSES).  THE
PROPORTIONATE REDUCTION MADE AS A RESULT OF A REALLOCATION SHALL BE CALCULATED
BY MULTIPLYING THE HIGH WATER MARK IN EFFECT IMMEDIATELY PRIOR TO SUCH
REALLOCATION BY THE FRACTION THE NUMERATOR OF WHICH IS THE NET ASSET VALUE
BEFORE FEES OF THE COMPANY IMMEDIATELY FOLLOWING SUCH REALLOCATION AND THE
DENOMINATOR OF WHICH IS THE NET ASSET VALUE BEFORE FEES OF THE COMPANY
IMMEDIATELY BEFORE SUCH REALLOCATION.

 

(E)           THE COMPANY’S VALUE AFTER ANY REDUCTION FOR THE INCENTIVE FEE
PROVIDED FOR IN THIS SECTION 6 IS THE COMPANY’S “NET ASSET VALUE.”  IF AN
INCENTIVE FEE IS PAID AS OF AN

 

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* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

6

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INCENTIVE FEE CALCULATION DATE, THE HIGH WATER MARK IS RESET TO THE NET ASSET
VALUE OF THE COMPANY IMMEDIATELY FOLLOWING SUCH PAYMENT.

 

(F)            WHEN THERE IS AN ACCRUED INCENTIVE FEE AT THE TIME ANY
REALLOCATION FROM THE COMPANY IS MADE, THE INCENTIVE FEE ATTRIBUTABLE TO SUCH
REALLOCATION WILL BE PAID WITHIN 30 DAYS OF THE REALLOCATION.  SUCH INCENTIVE
FEE SHALL BE DETERMINED BY MULTIPLYING THE INCENTIVE FEE THAT WOULD HAVE BEEN
PAID HAD THE DATE OF THE REALLOCATION BEEN AN INCENTIVE FEE CALCULATION DATE BY
THE FRACTION THE NUMERATOR OF WHICH IS THE AMOUNT OF THE REALLOCATION AND THE
DENOMINATOR OF WHICH IS THE NET ASSET VALUE BEFORE FEES OF THE COMPANY
IMMEDIATELY PRIOR TO THE REALLOCATION, IN EACH CASE PRIOR TO REDUCTION FOR THE
ACCRUED INCENTIVE FEE.  SUCH INCENTIVE FEE WILL BE PAID FROM AND REDUCE THE
AMOUNT OF THE REALLOCATION.

 

(G)           INTEREST INCOME SHALL NOT BE INCLUDED IN ANY OF THE FOREGOING
CALCULATIONS.  FOR THE AVOIDANCE OF DOUBT, NO INCENTIVE FEE SHALL BE PAYABLE ON
ANY INTEREST INCOME EARNED BY THE COMPANY.

 

(H)           TERMINATION OF THIS AGREEMENT SHALL BE TREATED AS AN INCENTIVE FEE
CALCULATION DATE.

 

7.             TERM AND TERMINATION.

 

(A)           TERM AND RENEWAL.  THIS AGREEMENT SHALL CONTINUE IN EFFECT UNTIL
DECEMBER 31, 2010.  THEREAFTER, THIS AGREEMENT SHALL BE AUTOMATICALLY RENEWED
FOR SUCCESSIVE ONE-YEAR PERIODS, ON THE SAME TERMS, UNLESS TERMINATED BY EITHER
THE TRADING ADVISOR OR THE COMPANY UPON 90 DAYS’ NOTICE TO THE OTHER PARTY.

 

(B)           TERMINATION.  NOTWITHSTANDING SECTION 7(A) HEREOF, THIS AGREEMENT
SHALL TERMINATE:

 

(I)               IMMEDIATELY IF THE COMPANY SHALL TERMINATE AND BE DISSOLVED IN
ACCORDANCE WITH THE LIMITED LIABILITY COMPANY AGREEMENT OR OTHERWISE;

 

(II)              AT THE DISCRETION OF THE MANAGER AS OF THE END OF ANY MONTH;

 

(III)             AT THE DISCRETION OF THE TRADING ADVISOR, AS OF THE FOLLOWING
MONTH-END, SHOULD ANY OF THE FOLLOWING OCCUR:  (1) THE ASSETS MANAGED BY THE
TRADING ADVISOR DECREASE TO LESS THAN $1,000,000 AT THE CLOSE OF BUSINESS ON ANY
DAY; OR (2) THE TRADING ADVISOR HAS DETERMINED TO CEASE MANAGING ANY CUSTOMER
ACCOUNTS PURSUANT TO THE PROGRAM; OR

 

(IV)             AT THE DISCRETION OF THE TRADING ADVISOR AS OF THE END OF ANY
MONTH UPON 90 DAYS’ PRIOR WRITTEN NOTICE TO THE MANAGER.

 

8.             RIGHT TO ADVISE OTHERS; UNIFORMITY OF ACTS AND PRACTICES.

 

(A)           DURING THE TERM OF THIS AGREEMENT, THE TRADING ADVISOR SHALL BE
FREE TO ADVISE OTHER INVESTORS AS TO THE PURCHASE AND SALE OF COMMODITY
INTERESTS, TO MANAGE AND TRADE OTHER INVESTORS’ COMMODITY INTERESTS ACCOUNTS AND
TO TRADE FOR AND ON BEHALF OF THEIR OWN PROPRIETARY COMMODITY INTERESTS
ACCOUNTS.  HOWEVER, UNDER NO CIRCUMSTANCES SHALL THE TRADING ADVISOR FAVOR ANY
COMMODITY INTERESTS ACCOUNT DIRECTED BY ANY OF THEM (REGARDLESS OF THE DATE

 

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ON WHICH THEY BEGAN OR SHALL BEGIN TO DIRECT SUCH ACCOUNT) OVER THE COMPANY’S
ACCOUNT, GIVING DUE CONSIDERATION TO THE TRADING PROGRAM WHICH THE MANAGER HAS
REQUESTED THE TRADING ADVISOR TO TRADE ON BEHALF OF THE COMPANY.  FOR PURPOSES
OF THIS AGREEMENT, THE TRADING ADVISOR SHALL NOT BE DEEMED TO BE FAVORING
ANOTHER COMMODITY INTERESTS ACCOUNT OVER THE COMPANY’S ACCOUNT IF THE TRADING
ADVISOR, IN ACCORDANCE WITH SPECIFIC INSTRUCTIONS OF THE OWNER OF SUCH ACCOUNT,
TRADES SUCH ACCOUNT AT A DEGREE OF LEVERAGE OR IN ACCORDANCE WITH TRADING
POLICIES WHICH SHALL BE DIFFERENT FROM THAT WHICH SHALL NORMALLY BE APPLIED TO
SUBSTANTIALLY ALL OF THE TRADING ADVISOR’S OTHER ACCOUNTS OR IF THE TRADING
ADVISOR, IN ACCORDANCE WITH THE TRADING ADVISOR’S MONEY MANAGEMENT PRINCIPLES,
SHALL NOT TRADE CERTAIN COMMODITY INTERESTS CONTRACTS FOR AN ACCOUNT BASED ON
THE AMOUNT OF EQUITY IN SUCH ACCOUNT OR FOR SOME OTHER REASON IN ACCORDANCE WITH
ITS MONEY MANAGEMENT PRINCIPLES.

 

(B)           THE TRADING ADVISOR UNDERSTANDS AND AGREES THAT IT SHALL HAVE A
FIDUCIARY RESPONSIBILITY TO THE COMPANY UNDER THIS AGREEMENT.

 

(C)           AT THE REQUEST OF THE COMPANY, THE TRADING ADVISOR SHALL PROMPTLY
MAKE AVAILABLE TO THE COMPANY (IF AVAILABLE TO IT WITHOUT UNDUE COST OR EXPENSE)
COPIES OF THE NORMAL DAILY, MONTHLY, QUARTERLY AND ANNUAL, AS THE CASE MAY BE,
WRITTEN REPORTS REFLECTING THE PERFORMANCE OF ALL COMMODITY POOL ACCOUNTS
PURSUANT TO THE PROGRAM ADVISED, MANAGED, OWNED OR CONTROLLED BY THE TRADING
ADVISOR REQUIRED TO BE DELIVERED TO POOL PARTICIPANTS PURSUANT TO THE CEA AND
SIMILAR WRITTEN INFORMATION, INCLUDING MONTHLY ACCOUNT STATEMENTS, REFLECTING
THE PERFORMANCE OF ALL OTHER COMMODITY INTEREST ACCOUNTS PURSUANT TO THE PROGRAM
ADVISED, MANAGED, OWNED OR CONTROLLED BY THE TRADING ADVISOR, WITH RESPECT TO
WHICH ACCOUNT REPORTS SHALL NOT BE REQUIRED TO BE DELIVERED TO THE OWNERS
THEREOF PURSUANT TO THE CEA (SUBJECT TO THE NEED TO PRESERVE THE CONFIDENTIALITY
OF PROPRIETARY INFORMATION CONCERNING THE TRADING ADVISOR’S TRADING SYSTEMS,
METHODS, MODELS, STRATEGIES AND FORMULAS AND THE IDENTITY OF THE TRADING
ADVISOR’S CLIENTS).  AT THE REQUEST OF THE COMPANY, THE TRADING ADVISOR SHALL
PROMPTLY DELIVER TO THE COMPANY A WRITTEN EXPLANATION OF THE DIFFERENCES, IF
ANY, IN THE PERFORMANCE BETWEEN THE COMPANY’S ACCOUNT AND SUCH OTHER COMMODITY
INTEREST ACCOUNTS TRADED UTILIZING THE SAME PROGRAM OR PORTFOLIO (SUBJECT TO THE
NEED TO PRESERVE THE CONFIDENTIALITY OF PROPRIETARY INFORMATION CONCERNING THE
TRADING ADVISOR’S TRADING SYSTEMS, METHODS, MODELS, STRATEGIES AND FORMULAS AND
THE IDENTITY OF THE TRADING ADVISOR’S CLIENTS) PURSUANT TO THE PROGRAM.

 

9.             SPECULATIVE POSITION LIMITS.  IF THE TRADING ADVISOR (EITHER
ALONE OR AGGREGATED WITH THE POSITIONS OF ANY OTHER PERSON IF SUCH AGGREGATION
SHALL BE REQUIRED BY THE CEA, THE CFTC OR ANY OTHER REGULATORY AUTHORITY HAVING
JURISDICTION) SHALL EXCEED APPLICABLE LIMITS IN ANY COMMODITY INTEREST TRADED
FOR THE COMPANY, THE TRADING ADVISOR SHALL IMMEDIATELY TAKE SUCH ACTION AS THE
TRADING ADVISOR MAY DEEM FAIR AND EQUITABLE TO COMPLY WITH THE LIMITS.  IF SUCH
LIMITS ARE EXCEEDED BY THE COMPANY, THE MANAGER MAY REQUIRE THE TRADING ADVISOR
TO LIQUIDATE POSITIONS AS REQUIRED.

 

10.           ADDITIONAL UNDERTAKINGS BY THE TRADING ADVISOR.  NEITHER THE
TRADING ADVISOR NOR ITS EMPLOYEES, AFFILIATES OR AGENTS, THE STOCKHOLDERS,
DIRECTORS, OFFICERS, EMPLOYEES, PRINCIPALS, AFFILIATES OR AGENTS OF SUCH
AFFILIATES, OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS SHALL USE OR DISTRIBUTE
FOR ANY PURPOSE WHATSOEVER ANY LIST CONTAINING THE NAMES AND/OR RESIDENTIAL
ADDRESSES OF AND/OR OTHER INFORMATION ABOUT THE LIMITED PARTNERS OF THE FUND.

 

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11.           REPRESENTATIONS AND WARRANTIES.

 

(A)           THE TRADING ADVISOR HEREBY REPRESENTS AND WARRANTS TO THE OTHER
PARTIES AS FOLLOWS:

 

(I)               THE TRADING ADVISOR IS AN ENTITY DULY ORGANIZED AND VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
ORGANIZATION AND IN GOOD STANDING IN EACH OTHER JURISDICTION IN WHICH THE NATURE
OR CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION AND THE FAILURE TO BE
DULY QUALIFIED WOULD MATERIALLY AFFECT THE TRADING ADVISOR’S ABILITY TO PERFORM
ITS OBLIGATIONS UNDER THIS AGREEMENT. THE TRADING ADVISOR HAS FULL CORPORATE,
PARTNERSHIP OR LIMITED LIABILITY COMPANY (AS THE CASE MAY BE) POWER AND
AUTHORITY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.

 

(II)              THIS AGREEMENT HAS BEEN DULY AND VALIDLY AUTHORIZED, EXECUTED
AND DELIVERED ON BEHALF OF THE TRADING ADVISOR AND CONSTITUTES A VALID, BINDING
AND ENFORCEABLE AGREEMENT OF THE TRADING ADVISOR IN ACCORDANCE WITH ITS TERMS,
SUBJECT TO INSOLVENCY LAWS.

 

(III)             ASSUMING THE ACCURACY OF THE COMPANY’S AND MANAGER’S
REPRESENTATION IN SUBSECTION 11(C)(VII) BELOW, THE TRADING ADVISOR HAS ALL
GOVERNMENTAL, REGULATORY AND COMMODITY EXCHANGE LICENSES AND APPROVALS AND HAS
EFFECTED ALL FILINGS AND REGISTRATIONS WITH GOVERNMENTAL AND REGULATORY AGENCIES
REQUIRED TO CONDUCT ITS BUSINESS AND TO ACT AS DESCRIBED HEREIN OR REQUIRED TO
PERFORM ITS OBLIGATIONS HEREUNDER (INCLUDING WITHOUT LIMITATION, AND IF
APPLICABLE, REGISTRATION OF THE TRADING ADVISOR AS A COMMODITY TRADING ADVISOR
UNDER THE CEA, AND MEMBERSHIP OF THE TRADING ADVISOR AS A COMMODITY TRADING
ADVISOR IN NFA), AND THE PERFORMANCE OF SUCH OBLIGATION WILL NOT VIOLATE OR
RESULT IN A BREACH OF ANY PROVISION OF THE TRADING ADVISOR’S CERTIFICATE OF
INCORPORATION, BY-LAWS OR ANY AGREEMENT, INSTRUMENT, ORDER, LAW OR REGULATION
BINDING ON THE TRADING ADVISOR.  THE PRINCIPALS OF THE TRADING ADVISOR ARE DULY
LISTED AS SUCH ON ITS COMMODITY TRADING ADVISOR FORM 7-R REGISTRATION.

 

(IV)             ASSUMING THE ACCURACY OF THE MANAGER’S REPRESENTATION IN
SUBSECTION 11(B)(VII) BELOW, MANAGEMENT BY THE TRADING ADVISOR OF AN ACCOUNT FOR
THE COMPANY IN ACCORDANCE WITH THE TERMS HEREOF WILL NOT REQUIRE ANY
REGISTRATION UNDER, OR VIOLATE ANY OF THE PROVISIONS OF, THE INVESTMENT ADVISERS
ACT OF 1940 (ASSUMING THAT THE COMPANY IS NOT AN “INVESTMENT COMPANY” WITHIN THE
MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “COMPANY ACT”)).

 

(V)              TO THE BEST OF ITS KNOWLEDGE, THE TRADING ADVISOR’S
IMPLEMENTATION OF ITS TRADING PROGRAM ON BEHALF OF THE COMPANY DOES NOT INFRINGE
ANY OTHER PERSON’S COPYRIGHTS, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHTS.

 

(VI)             THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE INCURRENCE OF
THE OBLIGATIONS HEREIN SET FORTH AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREIN WILL NOT CONSTITUTE A BREACH OF, OR DEFAULT UNDER, ANY
INSTRUMENT BY WHICH THE TRADING ADVISOR IS BOUND OR ANY ORDER, RULE OR
REGULATION APPLICATION TO THE TRADING ADVISOR OF ANY COURT OR ANY GOVERNMENTAL
BODY OR ADMINISTRATIVE AGENCY HAVING JURISDICTION OVER THE TRADING ADVISOR.

 

(VII)            OTHER THAN AS MAY HAVE BEEN DISCLOSED IN WRITING TO THE MANAGER
BY THE TRADING ADVISOR, THERE IS NOT PENDING, OR TO THE BEST OF THE TRADING
ADVISOR’S KNOWLEDGE

 

9

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THREATENED, ANY ACTION, SUIT OR PROCEEDING BEFORE OR BY ANY COURT OR OTHER
GOVERNMENTAL BODY TO WHICH THE TRADING ADVISOR IS A PARTY, OR TO WHICH ANY OF
THE ASSETS OF THE TRADING ADVISOR IS SUBJECT, WHICH MIGHT REASONABLY BE EXPECTED
TO RESULT IN ANY MATERIAL ADVERSE CHANGE IN THE CONDITION, FINANCIAL OR
OTHERWISE, BUSINESS OR PROSPECTS OF THE TRADING ADVISOR.  THE TRADING ADVISOR
HAS NOT RECEIVED ANY NOTICE OF AN INVESTIGATION OR WARNING LETTER FROM NFA OR
CFTC REGARDING NON-COMPLIANCE BY THE TRADING ADVISOR WITH THE CEA OR THE
REGULATIONS THEREUNDER.

 

(B)           THE MANAGER HEREBY REPRESENTS AND WARRANTS TO THE OTHER PARTIES AS
FOLLOWS:

 

(I)               THE MANAGER IS DULY ORGANIZED AND VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF ITS JURISDICTION OF FORMATION AND IN GOOD STANDING
UNDER THE LAWS OF EACH OTHER JURISDICTION IN WHICH THE NATURE OR CONDUCT OF ITS
BUSINESS REQUIRES SUCH QUALIFICATION AND THE FAILURE TO SO QUALIFY WOULD
MATERIALLY ADVERSELY AFFECT THE MANAGER’S ABILITY TO PERFORM ITS OBLIGATIONS
HEREUNDER.

 

(II)              THE MANAGER HAS THE POWER AND AUTHORITY UNDER APPLICABLE LAW
TO PERFORM ITS OBLIGATIONS HEREUNDER.

 

(III)             THIS AGREEMENT HAS BEEN DULY AND VALIDLY AUTHORIZED, EXECUTED
AND DELIVERED BY THE MANAGER AND CONSTITUTES A LEGAL, VALID AND BINDING
AGREEMENT OF THE MANAGER ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.

 

(IV)             THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE INCURRENCE OF
THE OBLIGATIONS SET FORTH HEREIN AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREIN WILL NOT CONSTITUTE A BREACH OF, OR DEFAULT UNDER, ANY
INSTRUMENT BY WHICH THE MANAGER IS BOUND OR ANY ORDER, RULE OR REGULATION
APPLICABLE TO THE MANAGER OF ANY COURT OR ANY GOVERNMENTAL BODY OR
ADMINISTRATIVE AGENCY HAVING JURISDICTION OVER THE MANAGER.

 

(V)              THERE IS NOT PENDING, OR, TO THE BEST OF THE MANAGER’S
KNOWLEDGE THREATENED, ANY ACTION, SUIT OR PROCEEDING BEFORE OR BY ANY COURT OR
OTHER GOVERNMENTAL BODY TO WHICH THE MANAGER IS A PARTY, OR TO WHICH ANY OF THE
ASSETS OF THE MANAGER IS SUBJECT, WHICH MIGHT REASONABLY BE EXPECTED TO RESULT
IN ANY MATERIAL ADVERSE CHANGE IN THE CONDITION (FINANCIAL OR OTHERWISE),
BUSINESS OR PROSPECTS OF THE MANAGER OR IS REQUIRED TO BE DISCLOSED PURSUANT TO
APPLICABLE CFTC REGULATIONS.

 

(VI)             THE MANAGER HAS ALL GOVERNMENTAL, REGULATORY AND COMMODITY
EXCHANGE APPROVALS AND LICENSES, AND HAS EFFECTED ALL FILINGS AND REGISTRATIONS
WITH GOVERNMENTAL AGENCIES REQUIRED TO CONDUCT ITS BUSINESS AND TO ACT AS
DESCRIBED HEREIN OR REQUIRED TO PERFORM ITS OBLIGATIONS HEREUNDER (INCLUDING,
WITHOUT LIMITATION, REGISTRATION AS A COMMODITY POOL OPERATOR UNDER THE CEA AND
MEMBERSHIP IN NFA AS A COMMODITY POOL OPERATOR), AND THE PERFORMANCE OF SUCH
OBLIGATIONS WILL NOT CONTRAVENE OR RESULT IN A BREACH OF ANY PROVISION OF ITS
CERTIFICATE OF INCORPORATION, BY-LAWS OR ANY AGREEMENT, ORDER, LAW OR REGULATION
BINDING UPON IT.  THE PRINCIPALS OF THE MANAGER ARE DULY REGISTERED AS SUCH ON
THE MANAGER’S COMMODITY POOL OPERATOR FORM 7-R REGISTRATION.

 

(VII)            THE COMPANY IS NOT AN “INVESTMENT COMPANY” WITHIN THE MEANING
OF THE COMPANY ACT.

 

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(C)           THE COMPANY REPRESENTS AND WARRANTS TO THE OTHER PARTIES AS
FOLLOWS:

 

(I)               THE COMPANY IS DULY ORGANIZED AND VALIDLY EXISTING AND IN GOOD
STANDING AS A LIMITED LIABILITY COMPANY UNDER THE LAWS OF THE STATE OF DELAWARE
AND IN GOOD STANDING UNDER THE LAWS OF EACH OTHER JURISDICTION IN WHICH THE
NATURE OR CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION AND THE FAILURE TO
SO QUALIFY WOULD MATERIALLY ADVERSELY AFFECT THE COMPANY’S ABILITY TO PERFORM
ITS OBLIGATIONS HEREUNDER.

 

(II)              THE COMPANY HAS THE LIMITED LIABILITY COMPANY POWER AND
AUTHORITY UNDER APPLICABLE LAW TO PERFORM ITS OBLIGATIONS HEREUNDER.

 

(III)             THIS AGREEMENT HAS BEEN DULY AND VALIDLY AUTHORIZED, EXECUTED
AND DELIVERED BY THE COMPANY AND CONSTITUTES A LEGAL, VALID AND BINDING
AGREEMENT OF THE COMPANY ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.

 

(IV)             THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE INCURRENCE OF
THE OBLIGATIONS SET FORTH HEREIN AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREIN WILL NOT CONSTITUTE A BREACH OF, OR DEFAULT UNDER, ANY
INSTRUMENT BY WHICH THE COMPANY IS BOUND OR ANY ORDER, RULE OR REGULATION
APPLICABLE TO THE COMPANY OF ANY COURT OR ANY GOVERNMENTAL BODY OR
ADMINISTRATIVE AGENCY HAVING JURISDICTION OVER THE COMPANY.

 

(V)              THERE IS NOT PENDING, OR, TO THE BEST OF THE COMPANY’S
KNOWLEDGE, THREATENED, ANY ACTION, SUIT OR PROCEEDING BEFORE OR BY ANY COURT OR
OTHER GOVERNMENTAL BODY TO WHICH THE COMPANY IS A PARTY, OR TO WHICH ANY OF THE
ASSETS OF THE COMPANY IS SUBJECT, WHICH MIGHT REASONABLY BE EXPECTED TO RESULT
IN ANY MATERIAL ADVERSE CHANGE IN THE CONDITION (FINANCIAL OR OTHERWISE),
BUSINESS OR PROSPECTS OF THE COMPANY OR WHICH IS REQUIRED TO BE DISCLOSED
PURSUANT TO APPLICABLE CFTC REGULATIONS.

 

(VI)             THE COMPANY HAS ALL GOVERNMENTAL, REGULATORY AND COMMODITY
EXCHANGE APPROVALS AND LICENSES, AND HAS EFFECTED ALL FILINGS AND REGISTRATIONS
WITH GOVERNMENTAL AGENCIES REQUIRED TO CONDUCT ITS BUSINESS AND TO ACT AS
DESCRIBED HEREIN OR REQUIRED TO PERFORM ITS OBLIGATIONS HEREUNDER AND THE
PERFORMANCE OF SUCH OBLIGATIONS WILL NOT CONTRAVENE OR RESULT IN A BREACH OF ANY
PROVISION OF ITS CERTIFICATE OF FORMATION, LIMITED LIABILITY COMPANY AGREEMENT
OR ANY OTHER AGREEMENT, ORDER, LAW OR REGULATION BINDING UPON IT.

 

(VII)            THE COMPANY IS, AND SHALL AT ALL TIMES DURING THE TERM OF THIS
AGREEMENT BE, A QUALIFIED ELIGIBLE PERSON (“QEP”) AS DEFINED IN CFTC RULE 4.7
BECAUSE IT MEETS ONE OR MORE OF THE QEP CRITERIA.

 

(VIII)           THE COMPANY IS NOT SUBJECT TO (X) TITLE 1 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), INCLUDING BY REASON
OF SECTION 3(42) OF ERISA AND ANY REGULATIONS PROMULGATED THEREUNDER OR (Y) ANY
SIMILAR PROVISIONS THAT MAY BE SET FORTH UNDER APPLICABLE STATE LAW.

 

(D)           THE FOREGOING REPRESENTATIONS AND WARRANTIES SHALL BE CONTINUING
DURING THE ENTIRE TERM OF THIS AGREEMENT AND, IF AT ANY TIME, ANY EVENT SHALL
OCCUR WHICH WOULD MAKE

 

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ANY OF THE FOREGOING REPRESENTATIONS AND WARRANTIES OF ANY PARTY NO LONGER TRUE
AND ACCURATE, SUCH PARTY SHALL PROMPTLY NOTIFY THE OTHER PARTIES.

 

12.           ACCOUNTING FROM THE COMPANY OR THE MANAGER.  THE COMPANY OR THE
MANAGER SHALL PROVIDE THE TRADING ADVISOR WITH A BALANCE SHEET, INCOME STATEMENT
AND DETAILS OF ACCRUED INCENTIVE FEE CALCULATIONS RELATED TO THE COMPANY ON A
MONTHLY BASIS BY THE 10TH BUSINESS DAY OF EACH MONTH.

 

13.           ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
BETWEEN THE PARTIES HERETO WITH RESPECT TO THE MATTERS REFERRED TO HEREIN, AND
NO OTHER AGREEMENT, VERBAL OR OTHERWISE, SHALL BE BINDING AS BETWEEN THE PARTIES
UNLESS IT SHALL BE IN WRITING AND SIGNED BY THE PARTY AGAINST WHOM ENFORCEMENT
IS SOUGHT.

 

14.           INDEMNIFICATION.

 

(A)           THE COMPANY SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS THE TRADING
ADVISOR AND ITS DIRECTORS, MEMBERS, OFFICERS, SHAREHOLDERS, EMPLOYEES AND
CONTROLLING PERSONS FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES (JOINT AND SEVERAL), COSTS AND EXPENSES (INCLUDING ANY
INVESTIGATORY, LEGAL AND OTHER EXPENSES INCURRED IN CONNECTION WITH, AND ANY
AMOUNTS PAID IN, ANY SETTLEMENT; PROVIDED THAT THE COMPANY SHALL HAVE APPROVED
SUCH SETTLEMENT) RESULTING FROM A DEMAND, CLAIM, LAWSUIT, ACTION OR PROCEEDING
RELATING TO ANY OF ITS OR THEIR ACTIONS OR CAPACITIES RELATING TO THE BUSINESS
OR ACTIVITIES OF THE COMPANY PURSUANT TO THIS AGREEMENT; PROVIDED THAT THE
CONDUCT OF SUCH PERSON WHICH WAS THE SUBJECT OF THE DEMAND, CLAIM, LAWSUIT,
ACTION OR PROCEEDING DID NOT CONSTITUTE GROSS NEGLIGENCE OR A MATERIAL BREACH OF
THIS AGREEMENT OR OF ANY FIDUCIARY OBLIGATION TO THE COMPANY.  THE TERMINATION
OF ANY DEMAND, CLAIM, LAWSUIT, ACTION OR PROCEEDING BY SETTLEMENT SHALL NOT, IN
ITSELF, CREATE A PRESUMPTION THAT THE CONDUCT IN QUESTION WAS NOT UNDERTAKEN IN
GOOD FAITH.

 

(B)           THE TRADING ADVISOR SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS THE
COMPANY, THE MANAGER, THEIR RESPECTIVE AFFILIATES AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES AND CONTROLLING PERSONS FROM AND
AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES (JOINT AND SEVERAL),
COSTS AND EXPENSES (INCLUDING ANY REASONABLE INVESTIGATORY, LEGAL AND OTHER
EXPENSES INCURRED IN CONNECTION WITH, AND ANY AMOUNTS PAID IN, ANY SETTLEMENT;
PROVIDED THAT THE TRADING ADVISOR SHALL HAVE APPROVED SUCH SETTLEMENT) RESULTING
FROM A DEMAND, CLAIM, LAWSUIT, ACTION OR PROCEEDING RELATING TO ANY ACTION OR
OMISSION OF THE TRADING ADVISOR OR ANY OF ITS RESPECTIVE OFFICERS, DIRECTORS OR
EMPLOYEES RELATING TO THE BUSINESS OR ACTIVITIES OF SUCH PERSON UNDER THIS
AGREEMENT OR RELATING TO THE MANAGEMENT OF AN ACCOUNT OF THE COMPANY PROVIDED: 
THE ACTION OR OMISSION OF SUCH PERSON WHICH WAS THE SUBJECT OF THE DEMAND,
CLAIM, LAWSUIT, ACTION OR PROCEEDING DID NOT CONSTITUTE GROSS NEGLIGENCE OR A
MATERIAL BREACH OF THIS AGREEMENT OR ANY FIDUCIARY OBLIGATION OF THE COMPANY.

 

(C)           THE TRADING ADVISOR, ITS OFFICERS, MEMBERS, DIRECTORS, EMPLOYEES
AND SHAREHOLDERS SHALL NOT BE LIABLE TO THE COMPANY AND ITS OFFICERS, DIRECTORS
OR MEMBERS OR TO ANY OF THEIR SUCCESSORS OR ASSIGNS EXCEPT BY REASON OF ACTS OR
OMISSIONS IN CONTRAVENTION OF THE EXPRESS TERMS OF THIS AGREEMENT, OR DUE TO
THEIR INTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE, OR BY REASON OF NOT HAVING
ACTED IN GOOD FAITH AND IN THE REASONABLE BELIEF THAT SUCH ACTIONS OR OMISSIONS
WERE IN, OR NOT OPPOSED TO, THE BEST INTERESTS OF THE COMPANY.

 

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(D)           THE FOREGOING AGREEMENTS OF INDEMNITY SHALL BE IN ADDITION TO, AND
SHALL IN NO RESPECT LIMIT OR RESTRICT, ANY OTHER REMEDIES WHICH MAY BE AVAILABLE
TO AN INDEMNIFIED PARTY.

 

(E)           IN THE EVENT THAT A PERSON ENTITLED TO INDEMNIFICATION UNDER THIS
SECTION 14 IS MADE A PARTY TO AN ACTION, SUIT OR PROCEEDING ALLEGING BOTH
MATTERS FOR WHICH INDEMNIFICATION MAY BE DUE HEREUNDER AND MATTERS FOR WHICH
INDEMNIFICATION MAY NOT BE DUE HEREUNDER, SUCH PERSON SHALL BE INDEMNIFIED ONLY
IN RESPECT OF THE FORMER MATTERS.

 

(F)            PROMPTLY AFTER RECEIPT BY ANY OF THE INDEMNIFIED PARTIES UNDER
THIS AGREEMENT OF NOTICE OF ANY DEMAND, CLAIM, LAWSUIT, ACTION OR PROCEEDING,
THE INDEMNIFIED PARTY SHALL NOTIFY THE INDEMNIFYING PARTY IN WRITING OF THE
COMMENCEMENT THEREOF IF A CLAIM FOR INDEMNIFICATION IN RESPECT THEREOF IS TO BE
MADE UNDER THIS AGREEMENT.  EXCEPT TO THE EXTENT THAT THE INDEMNIFYING PARTY IS
NOT MATERIALLY PREJUDICED THEREBY, THE OMISSION SO TO NOTIFY SHALL RELIEVE THE
INDEMNIFYING PARTY FROM ANY OBLIGATION OR LIABILITY WHICH IT MAY HAVE TO ANY
SUCH INDEMNIFIED PARTY UNDER THIS SECTION.  IN THE EVENT THAT SUCH DEMAND,
CLAIM, LAWSUIT, ACTION OR PROCEEDING IS BROUGHT AGAINST A PERSON ENTITLED TO BE
INDEMNIFIED UNDER THIS AGREEMENT, AND THE INDEMNIFYING PARTY IS NOTIFIED OF THE
COMMENCEMENT THEREOF, THE INDEMNIFYING PARTY SHALL BE ENTITLED TO PARTICIPATE
THEREIN AND, TO THE EXTENT THAT THE INDEMNIFYING PARTY MAY WISH, TO ASSUME THE
DEFENSE THEREOF, WITH COUNSEL SELECTED BY THE INDEMNIFYING PARTY AND APPROVED BY
THE INDEMNIFIED PERSON (PROVIDED THAT APPROVAL MAY NOT BE UNREASONABLY
WITHHELD), AND AFTER NOTICE FROM THE INDEMNIFYING PARTY TO SUCH INDEMNIFIED
PERSON OF THE INDEMNIFYING PARTY’S ELECTION SO AS TO ASSUME THE DEFENSE THEREOF,
THE INDEMNIFYING PARTY SHALL NOT BE LIABLE TO SUCH PERSON UNDER THIS SECTION FOR
ANY LEGAL OR OTHER EXPENSES SUBSEQUENTLY INCURRED BY SUCH PERSON IN CONNECTION
WITH THE DEFENSE THEREOF, UNLESS THE INDEMNIFYING PARTY APPROVES THE EMPLOYMENT
OF SEPARATE COUNSEL BY SUCH PERSON (IT BEING UNDERSTOOD, HOWEVER, THAT THE
INDEMNIFYING PARTY SHALL NOT BE LIABLE FOR LEGAL OR OTHER EXPENSES OF MORE THAN
ONE SEPARATE FIRM OF ATTORNEYS FOR ALL SUCH PERSONS INDEMNIFIED HEREUNDER, WHICH
FIRM SHALL BE DESIGNATED IN WRITING BY THE TRADING ADVISOR OR THE COMPANY, AS
THE CASE MAY BE).

 

15.           ASSIGNMENT.  THIS AGREEMENT SHALL NOT BE ASSIGNED BY ANY OF THE
PARTIES HERETO WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE OTHER PARTIES
HERETO; PROVIDED, THAT EITHER PARTY MAY ASSIGN THIS AGREEMENT TO AN AFFILIATE
UPON PRIOR NOTICE TO THE OTHER PARTY.

 

16.           AMENDMENT; WAIVER.  THIS AGREEMENT SHALL NOT BE AMENDED EXCEPT BY
A WRITING SIGNED BY THE PARTIES HERETO.  NO WAIVER OF ANY PROVISION OF THIS
AGREEMENT SHALL BE IMPLIED FROM ANY COURSE OF DEALING BETWEEN THE PARTIES HERETO
OR FROM ANY FAILURE BY EITHER PARTY HERETO TO ASSERT ITS RIGHTS HEREUNDER ON ANY
OCCASION OR SERIES OF OCCASIONS.

 

17.           SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT, OR THE
APPLICATION OF ANY PROVISION TO ANY PERSON OR CIRCUMSTANCE, SHALL BE HELD TO BE
INCONSISTENT WITH ANY PRESENT OR FUTURE LAW, RULING, RULE OR REGULATION OF ANY
COURT OR GOVERNMENTAL OR REGULATORY AUTHORITY HAVING JURISDICTION OVER THE
SUBJECT MATTER HEREOF, SUCH PROVISION SHALL BE DEEMED TO BE RESCINDED OR
MODIFIED IN ACCORDANCE WITH SUCH LAW, RULING, RULE OR REGULATION, AND THE
REMAINDER OF THIS AGREEMENT, OR THE APPLICATION OF SUCH PROVISION TO PERSONS OR
CIRCUMSTANCES OTHER THAN THOSE AS TO WHICH IT SHALL BE HELD INCONSISTENT, SHALL
NOT BE AFFECTED THEREBY.

 

18.           NOTICES.  ANY NOTICE REQUIRED OR DESIRED TO BE DELIVERED UNDER
THIS AGREEMENT SHALL BE IN WRITING AND SHALL BE DELIVERED BY COURIER SERVICE,
FACSIMILE, POSTAGE

 

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PREPAID MAIL OR OTHER SIMILAR MEANS AND SHALL BE EFFECTIVE UPON ACTUAL RECEIPT
BY THE PARTY TO WHICH SUCH NOTICE SHALL BE DIRECTED, ADDRESSED AS FOLLOWS (OR TO
SUCH OTHER ADDRESS AS THE PARTY ENTITLED TO NOTICE SHALL HEREAFTER DESIGNATE IN
ACCORDANCE WITH THE TERMS HEREOF):

 

if to the Company or the Manager:

 

COLBY GLOBAL HORIZONS, LLC

c/o BlackRock Investment Management LLC

40 East 52nd Street

25th Floor

New York, NY 10022

Attn:  Edward A. Rzeszowski

Facsimile:  212-810-8745

 

with a copy to:

 

BlackRock Investment Management, LLC

Princeton Corporate Campus

800 Scudders Mill Road — Section 1B

Plainsboro, New Jersey 08536

Attn:  Michael Pungello

Facsimile:  609-282-2664

 

with a further copy to:

BlackRock Alternative Advisors

601 Union Street, 56th Floor

Seattle, Washington 98101

Attn:  Marie Bender

Facsimile:  206-613-6708

 

if to the Trading Advisor:

 

Crabel Capital Management, LLC

Attn: Kathryn Daley, Chief Operating Officer

312 East Buffalo Street, Unit #30

Milwaukee, WI 53202

Facsimile:  414-276-2660

Telephone:  414-224-7510

Email: clientrelations@crabel.com and Kathryn@crabel.com

 

19.           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.

 

20.           CONSENT TO JURISDICTION.  THE PARTIES HERETO AGREE THAT ANY ACTION
OR PROCEEDING ARISING DIRECTLY, INDIRECTLY OR OTHERWISE IN CONNECTION WITH, OUT
OF, RELATED TO OR FROM THIS AGREEMENT, ANY BREACH HEREOF OR ANY TRANSACTION
COVERED HEREBY, SHALL BE RESOLVED, WHETHER BY ARBITRATION OR OTHERWISE, WITHIN
THE COUNTY OF NEW YORK, CITY OF NEW YORK, AND STATE OF

 

14

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NEW YORK.  ACCORDINGLY, THE PARTIES CONSENT AND SUBMIT TO THE JURISDICTION OF
THE FEDERAL AND STATE COURTS AND ANY APPLICABLE ARBITRAL BODY LOCATED WITHIN THE
COUNTY OF NEW YORK, CITY OF NEW YORK, AND STATE OF NEW YORK.  THE PARTIES
FURTHER AGREE THAT ANY SUCH ACTION OR PROCEEDING BROUGHT BY ANY PARTY TO ENFORCE
ANY RIGHT, ASSERT ANY CLAIM, OR OBTAIN ANY RELIEF WHATSOEVER IN CONNECTION WITH
THIS AGREEMENT SHALL BE BROUGHT BY SUCH PARTY EXCLUSIVELY IN FEDERAL OR STATE
COURTS, OR IF APPROPRIATE BEFORE ANY APPLICABLE ARBITRAL BODY, LOCATED WITHIN
THE COUNTY OF NEW YORK, CITY OF NEW YORK, AND STATE OF NEW YORK.

 

21.           REMEDIES.  IN ANY ACTION OR PROCEEDING ARISING OUT OF ANY OF THE
PROVISIONS OF THIS AGREEMENT, THE TRADING ADVISOR, THE MANAGER AND THE COMPANY
AGREE THAT THEY SHALL NOT SEEK ANY PREJUDGMENT EQUITABLE OR ANCILLARY RELIEF. 
SUCH PARTIES ALSO AGREE THAT THEIR SOLE REMEDY IN ANY SUCH ACTION OR PROCEEDING
SHALL BE TO SEEK ACTUAL MONETARY DAMAGES FOR ANY BREACH OF THIS AGREEMENT;
PROVIDED, HOWEVER, THAT THE COMPANY AGREES THAT THE TRADING ADVISOR AND THE
MANAGER MAY SEEK DECLARATORY JUDGMENT WITH RESPECT TO THE INDEMNIFICATION
PROVISIONS OF THIS AGREEMENT.

 

22.           PROMOTIONAL MATERIAL.  NONE OF THE PARTIES HERETO WILL MAKE
REFERENCE TO ANY OTHER SUCH PARTY IN OFFICIALLY FILED OR PUBLICLY OR PRIVATELY
DISTRIBUTED MATERIAL WITHOUT FIRST SUBMITTING SUCH MATERIAL TO THE PARTY SO
NAMED FOR APPROVAL A REASONABLE PERIOD OF TIME IN ADVANCE OF THE PROPOSED USE OF
SUCH MATERIAL.

 

23.           CONFIDENTIALITY.  THE COMPANY AND THE MANAGER (COLLECTIVELY THE
“FUND PARTIES”) SHALL NOT DISCLOSE TO ANY PERSON ANY INFORMATION ARISING OUT OF
OR RELATING TO THE TRANSACTIONS EFFECTED BY THE TRADING ADVISOR, REGARDLESS OF
WHETHER THE SOURCE OF SUCH INFORMATION WAS THE TRADING ADVISOR OR A THIRD
PARTY.  NOTWITHSTANDING THE FOREGOING, THE FUND PARTIES MAY DISCLOSE SUCH
INFORMATION OR ANY PORTION THEREOF (I) PURSUANT TO ANY SUBPOENA, CIVIL
INVESTIGATIVE DEMAND OR SIMILAR DEMAND OR REQUEST OF ANY COURT, REGULATORY
AUTHORITY, ARBITRATOR, OR TRIBUNAL, OR (II) TO ANY GOVERNMENT OR REGULATORY OR
SELF-REGULATORY BODY HAVING AUTHORITY TO REGULATE OR OVERSEE THEIR BUSINESS,
PROVIDED, HOWEVER, THAT (OTHER THAN IN CONNECTION WITH A ROUTINE AUDIT OR
EXAMINATION, IN WHICH CASE THE FUND PARTIES WILL SEEK TO OBTAIN CONFIDENTIAL
TREATMENT OF SUCH INFORMATION BY THE PERSONS TO WHOM IT IS DISCLOSED) THEY WILL
GIVE THE TRADING ADVISOR PRIOR WRITTEN NOTICE OF THE INFORMATION TO BE DISCLOSED
TO THE EXTENT THAT SUCH NOTICE IS PERMISSIBLE AND THE FUND PARTIES WILL
COOPERATE WITH THE TRADING ADVISOR TO SEEK TO OBTAIN CONFIDENTIAL TREATMENT OF
SUCH INFORMATION BY THE PERSONS TO WHOM IT IS DISCLOSED.  THE FUND PARTIES
ACKNOWLEDGE AND AGREE THAT THE TRADING ADVISOR’S TRADING SYSTEMS AND THE
METHODOLOGY UTILIZED BY SUCH SYSTEMS ARE UNIQUE, PROPRIETARY TO THE TRADING
ADVISOR, AND HAVE BEEN DEVELOPED AT A SIGNIFICANT COST TO THE TRADING ADVISOR
THROUGH EXTENSIVE RESEARCH AND DEVELOPMENT EFFORTS.  THE FUND PARTIES HEREBY
AGREE THAT THEY SHALL NOT, DIRECTLY OR INDIRECTLY, TAKE ANY STEPS OR MAKE ANY
ATTEMPT TO REVERSE ENGINEER OR ANALYZE THE TRADING ADVISOR’S TRADING SYSTEMS OR
THE METHODOLOGY UTILIZED BY SUCH SYSTEMS.

 

24.           SURVIVAL.  THE PROVISIONS OF THIS AGREEMENT SHALL SURVIVE THE
TERMINATION HEREOF WITH RESPECT TO ANY MATTER ARISING WHILE THIS AGREEMENT SHALL
BE IN EFFECT.

 

25.           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS,
EACH OF WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF WHICH TOGETHER SHALL
CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

15

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26.           HEADINGS.  HEADINGS TO SECTIONS AND SUBSECTIONS IN THIS AGREEMENT
ARE FOR THE CONVENIENCE OF THE PARTIES ONLY AND ARE NOT INTENDED TO BE A PART OF
OR TO AFFECT THE MEANING OR INTERPRETATION HEREOF.

 

*        *        *        *        *

 

16

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IN WITNESS WHEREOF, THIS AGREEMENT HAS BEEN EXECUTED FOR AND ON BEHALF OF THE
UNDERSIGNED ON THE DAY AND YEAR FIRST WRITTEN ABOVE.

 

 

 

COLBY GLOBAL HORIZONS, LLC

 

 

 

 

 

 

By:

BLACKROCK INVESTMENT MANAGEMENT, LLC,

 

 

its Manager

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

BLACKROCK INVESTMENT MANAGEMENT, LLC

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

By:  CRABEL CAPITAL MANAGEMENT, LLC

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

17

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APPENDIX A

 

AUTHORIZED TRADERS

 

1.               Toby Crabel

 

2.               Sean Greenwaldt

 

3.               Paul Mason

 

4.               Tim Cherne

 

5.               Troy Seebold

 

6.               Steve Hall

 

7.               Steve Brechtel

 

8.               Thomas Gentile

 

9.               Reggie Laubmeier

 

10.         Ryan McDermott

 

A-1

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APPENDIX B

 

COMMODITY INTERESTS TRADED BY CRABEL CAPITAL MANAGEMENT, LLC

 

The undersigned represents that the following is a complete list of all
commodity interests which the undersigned intends to trade on behalf of COLBY
GLOBAL HORIZONS, LLC other than regulated futures contracts and options on
regulated futures contracts traded on a qualified board of trade or exchange:

 

Contract

 

Exchange

 

Contract Type

 

2Yr Note

 

CBOT

 

FUTURES

 

5Yr Note

 

CBOT

 

FUTURES

 

10Yr Notes

 

CBOT

 

FUTURES

 

3 month Aluminum

 

LME

 

FUTURES

 

3 month Copper

 

LME

 

FUTURES

 

3 month Nickel

 

LME

 

FUTURES

 

3 month Zinc

 

LME

 

FUTURES

 

Australian 10Yr Bond

 

SFE

 

FUTURES

 

Australian Dollar

 

F/X

 

FORWARD

 

BOBL

 

EUREX

 

FUTURES

 

Brent Crude

 

IPE

 

FUTURES

 

British Pound

 

F/X

 

FORWARD

 

British Pound

 

CME

 

FUTURES

 

British Pound/Japanese Yen

 

F/X

 

FORWARD

 

CAC-40 Index

 

MONEP

 

FUTURES

 

Canadian 10Yr Govt Bond

 

ME

 

FUTURES

 

Canadian Dollar

 

F/X

 

FORWARD

 

Canadian Dollar

 

CME

 

FUTURES

 

Canadian Dollar/Japanese Yen

 

F/X

 

FORWARD

 

Canadian S&P 60 Index

 

ME

 

FUTURES

 

Cocoa

 

NYBOT

 

FUTURES

 

Coffee

 

NYBOT

 

FUTURES

 

Corn

 

CBOT

 

FUTURES

 

Cotton

 

NYCE

 

FUTURES

 

DAX Index

 

EUREX

 

FUTURES

 

DJ Euro STOXX 50 Index

 

EUREX

 

FUTURES

 

E-mini Dow Jones Index

 

CBOT

 

FUTURES

 

E-mini Light Crude Oil

 

NYMEX

 

FUTURES

 

E-mini NASDAQ Index

 

CME

 

FUTURES

 

 

B-1

--------------------------------------------------------------------------------

 

E-mini Natural Gas

 

NYMEX

 

FUTURES

 

E-mini Russell 2000 Index

 

CME

 

FUTURES

 

E-mini Russell 2000 Index

 

ICE

 

FUTURES

 

E-mini S&P 500 Index

 

CME

 

FUTURES

 

E-mini S&P MidCap 400 Index

 

CME

 

FUTURES

 

Euribor

 

LIFFE

 

FUTURES

 

Euro Currency

 

F/X

 

FORWARD

 

Euro Currency

 

CME

 

FUTURES

 

Euro Currency/Australian Dollar

 

F/X

 

FORWARD

 

Euro Currency/British Pound

 

F/X

 

FORWARD

 

Euro Currency/Czeh Koruna

 

F/X

 

FORWARD

 

Euro Currency/Hungarian Forints

 

F/X

 

FORWARD

 

Euro Currency/Japanese Yen

 

F/X

 

FORWARD

 

Euro Currency/Japanese Yen

 

CME

 

FUTURES

 

Euro Currency/Norwegian Krone

 

F/X

 

FORWARD

 

Euro Currency/Swedish Krona

 

F/X

 

FORWARD

 

Euro Currency/Swiss Franc

 

F/X

 

FORWARD

 

Euro Dollar

 

CME

 

FUTURES

 

FTSE 100 Index

 

LIFFE

 

FUTURES

 

Gas Oil

 

IPE

 

FUTURES

 

Gasoline (Japanese)

 

TCM

 

FUTURES

 

German Bund

 

EUREX

 

FUTURES

 

Gold

 

COMEX

 

FUTURES

 

Gold (Japanese)

 

TCM

 

FUTURES

 

Gold e-CBOT

 

CBOT

 

FUTURES

 

Hang Seng Index

 

HKFE

 

FUTURES

 

Heating Oil

 

NYMEX

 

FUTURES

 

High Grade Copper

 

COMEX

 

FUTURES

 

H-shares Index

 

HKFE

 

FUTURES

 

Isreali Shekel

 

F/X

 

FORWARD

 

Japanese Yen

 

F/X

 

FORWARD

 

Japanese Yen

 

CME

 

FUTURES

 

JGB

 

TSE

 

FUTURES

 

Kerosene (Japanese)

 

TCM

 

FUTURES

 

KOSPI 200 Stock Index

 

KSE

 

FUTURES

 

Lean Hogs

 

CME

 

FUTURES

 

Light Crude Oil

 

NYMEX

 

FUTURES

 

Live Cattle

 

CME

 

FUTURES

 

Long Gilt

 

LIFFE

 

FUTURES

 

Mexican Peso

 

F/X

 

FORWARD

 

Mexican Peso

 

CME

 

FUTURES

 

MSCI Singapore Free Stock Index (SGX)

 

SGX

 

FUTURES

 

NASDAQ Index

 

CME

 

FUTURES

 

 

B-2

--------------------------------------------------------------------------------

 

Natural Gas

 

NYMEX

 

FUTURES

 

New Zealand Dollar

 

F/X

 

FORWARD

 

Nikkei 225 Index

 

SGX-DT

 

FUTURES

 

Nikkei 225 Index

 

OSE

 

FUTURES

 

Platinum (Japanese)

 

TCM

 

FUTURES

 

Polish Zloty

 

F/X

 

FORWARD

 

RBOB Gasoline

 

NYMEX

 

FUTURES

 

Rubber (Japanese)

 

TCM

 

FUTURES

 

S&P 500 Index

 

CME

 

FUTURES

 

Schatz

 

EUREX

 

FUTURES

 

Short Sterling

 

LIFFE

 

FUTURES

 

Silver

 

COMEX

 

FUTURES

 

Silver eCBOT

 

CBOT

 

FUTURES

 

Singapore Dollar

 

F/X

 

FORWARD

 

South African Rand

 

F/X

 

FORWARD

 

Soybean Meal

 

CBOT

 

FUTURES

 

Soybean Oil

 

CBOT

 

FUTURES

 

Soybeans

 

CBOT

 

FUTURES

 

SPI-200 Index

 

SFE

 

FUTURES

 

Sugar

 

NYBOT

 

FUTURES

 

Swiss Franc

 

F/X

 

FORWARD

 

Swiss Franc

 

CME

 

FUTURES

 

Taiwan Index

 

SGX-DT

 

FUTURES

 

TOPIX

 

TSE

 

FUTURES

 

Turkish Lira

 

F/X

 

FORWARD

 

U.S. Bonds

 

CBOT

 

FUTURES

 

Unleaded Gas

 

NYMEX

 

FUTURES

 

Wheat

 

CBOT

 

FUTURES

 

 

 

 

CRABEL CAPITAL MANAGEMENT, LLC

 

 

 

 

By:

 

 

 

 

Name: M. Kathryn Daley

 

 

 

Title: Chief Operating Officer

 

 

 

 

 

 

Dated as of March 30, 2010

 

 

B-3

--------------------------------------------------------------------------------

 

APPENDIX C

 

COMMODITY TRADING AUTHORITY

 

Crabel Capital Management, LLC

Attn:  Kathryn Daley

Facsimile:  414-276-2660

 

Dear Kathryn Daley:

 

Colby Global Horizons, LLC (the “Company”) does hereby make, constitute and
appoint you as its attorney-in-fact to buy and sell commodity futures and
forward contracts (including foreign futures and options contracts) in
accordance with the Advisory Agreement between us and certain others.

 

 

 

Very truly yours,

 

 

 

COLBY GLOBAL HORIZONS, LLC

 

 

 

By:

BLACKROCK INVESTMENT MANAGEMENT, LLC,

 

 

its Manager

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Dated as of March 30, 2010

 

 

C-1

--------------------------------------------------------------------------------

 

APPENDIX D

 

ACKNOWLEDGMENT OF RECEIPT OF CRABEL MEMORANDUM

 

The undersigned hereby acknowledges receipt of Crabel Capital Management’s
Crabel Memorandum dated January 1, 2010.

 

 

 

COLBY GLOBAL HORIZONS, LLC

 

 

 

By:

BLACKROCK INVESTMENT MANAGEMENT, LLC,

 

 

its Manager

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Dated as of March 30, 2010

 

 

D-1

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