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
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