Document:

g5966091c.htm

  

  

 

  

Exhibit 10.9

 

MANAGEMENT AGREEMENT

 

AGREEMENT made as of the 29th day of October, 2010 among CERES MANAGED FUTURES LLC, a Delaware limited liability company (“CMF” or the “General Partner”), GLOBAL DIVERSIFIED FUTURES FUND L.P., a New York limited partnership (the “Partnership”) and BLACKWATER CAPITAL MANAGEMENT LLC, a Delaware limited liability company (“Blackwater” or the “Advisor”).

 

W I T N E S S E T H :

 

WHEREAS, CMF is the general partner of the Partnership, a limited partnership organized for the purpose of speculative trading of commodity interests, including futures contracts, options and forward contracts with the objective of achieving substantial capital appreciation, such trading to be conducted directly or through investment in Blackwater Master Fund L.P., a Delaware limited partnership (the “Master Fund”) of which CMF is the general partner and Blackwater is the advisor; and

 

WHEREAS, the Limited Partnership Agreement establishing the Partnership (the “Limited Partnership Agreement”) permits CMF to delegate to one or more commodity trading advisors CMF’s authority to make trading decisions for the Partnership; and

 

WHEREAS, the Advisor is registered as a commodity trading advisor with the Commodity Futures Trading Commission (“CFTC”) and is a member of the National Futures Association (“NFA”); and

 

WHEREAS, CMF is registered as a commodity pool operator with the CFTC and is a member of the NFA; and

 

WHEREAS, CMF, the Partnership and the Advisor wish to enter into this Agreement in order to set forth the terms and conditions upon which the Advisor will render and implement advisory services in connection with the conduct by the Partnership of its commodity trading activities during the term of this Agreement;

 

NOW, THEREFORE, the parties agree as follows:

 

1. DUTIES OF THE ADVISOR.  (a) For the period and on the terms and conditions of this Agreement, the Advisor shall have sole authority and responsibility, as one of the Partnership’s agents and attorneys-in-fact, for directing the investment and reinvestment of the assets and funds of the Partnership allocated to it from time to time by the General Partner in commodity interests, including commodity futures contracts, options, forward contracts, swaps and other derivative instruments.  All such trading on behalf of the Partnership shall be in accordance with the trading policies set forth in the Partnership’s Prospectus and Disclosure Document dated November 25, 1998, as supplemented (the “Prospectus”), as such trading policies may be changed from time to time upon receipt by the Advisor of prior written notice of such change, and pursuant to the trading strategy selected by CMF to be utilized by the Advisor in managing the Partnership’s assets.  CMF has initially selected the Advisor’s Blackwater Global Program (the “Program”), as described in Appendix A attached hereto, to manage the Partnership’s assets allocated to it.  Any open positions or other investments at the time of receipt of such notice of a change in trading policy shall not be deemed to violate the changed policy and shall be closed or sold in the ordinary course of trading.  The Advisor may not deviate from the trading policies set forth in the Prospectus without the prior written consent of the Partnership given by CMF.  The Advisor makes no representation or warranty that the trading to be directed by it for the Partnership will be profitable or will not incur losses.

 

  

  

  

 

(b) CMF acknowledges receipt of the description of the Program, attached hereto as Appendix A.  All trades made by the Advisor for the account of the Partnership shall be made through such commodity broker or brokers as CMF shall direct, and the Advisor shall have no authority or responsibility for selecting or supervising any such broker in connection with the execution, clearance or confirmation of transactions for the Partnership or for the negotiation of brokerage rates charged therefor.  However, the Advisor, with the prior written permission (by either original or fax copy) of CMF, may direct any and all trades in commodity futures and options to a futures commission merchant or independent floor broker it chooses for execution with instructions to give-up the trades to the broker designated by CMF, provided that the futures commission merchant or independent floor broker and any give-up or floor brokerage fees are approved in advance by CMF.  All give-up or similar fees relating to the foregoing shall be paid by the Partnership after all parties have executed the relevant give-up agreements (by either original or fax copy).

 

(c) The initial allocation of the Partnership’s assets to the Advisor will be made to the Program, as described in Appendix A attached hereto.  In the event the Advisor wishes to use a trading system or methodology other than or in addition to the Program in connection with its trading for the Partnership, either in whole or in part, it may not do so unless the Advisor gives CMF prior written notice of its intention to utilize such different trading system or methodology and CMF consents thereto in writing.  In addition, the Advisor will provide five days’ prior written notice to CMF of any change in the trading system or methodology to be utilized for the Partnership which the Advisor deems material.  If the Advisor deems such change in system or methodology or in markets traded to be material, the changed system or methodology or markets traded will not be utilized for the Partnership without the prior written consent of CMF.  In addition, the Advisor will notify CMF of any changes to the trading system or methodology that would cause the description of the trading strategy or methods described in Appendix A to be materially inaccurate.  Further, the Advisor will provide the Partnership with a current list of all commodity interests to be traded for the Partnership’s account and the Advisor will not trade any additional commodity interests for such account without providing notice thereof to CMF and receiving CMF’s written approval.  The Advisor also agrees to provide CMF, on a monthly basis, with a written report of the assets under the Advisor’s management together with all other matters deemed by the Advisor to be material changes to its business not previously reported to CMF.  The Advisor further agrees that it will convert foreign currency balances (not required to margin positions denominated in a foreign currency) to U.S. dollars no less frequently than monthly.  U.S. dollar equivalents in individual foreign currencies of more than $100,000 will be converted to U.S. dollars within one business day after such funds are no longer needed to margin foreign positions.

 

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(d) The Advisor agrees to make all material disclosures to the Partnership regarding itself and its principals as defined in Part 4 of the CFTC’s regulations (“principals”), members, directors, officers and employees, their trading performance and general trading methods, its customer accounts (but not the identities of or identifying information with respect to its customers) and otherwise as are required in the reasonable judgment of CMF to be made in any filings required by Federal or State law or NFA rule or order.  Notwithstanding Sections 1(d) and 4(d) of this Agreement, the Advisor is not required to disclose the actual trading results of proprietary accounts of the Advisor or its principals unless CMF reasonably determines that such disclosure is required in order to fulfill its fiduciary obligations to the Partnership or the reporting, filing or other obligations imposed on it by Federal or State law or NFA rule or order.  The Partnership and CMF acknowledge that the trading advice to be provided by the Advisor is a property right belonging to the Advisor and that they will keep all such advice confidential.

 

(e) The Advisor understands and agrees that CMF may designate other trading advisors for the Partnership and apportion or reapportion to such other trading advisors the management of an amount of Net Assets (as defined in Section 3(b) hereof) as it shall determine in its absolute discretion.  The designation of other trading advisors and the apportionment or reapportionment of Net Assets to any such trading advisors pursuant to this Section 1 shall neither terminate this Agreement nor modify in any regard the respective rights and obligations of the parties hereunder.

 

(f) CMF may, from time to time, in its absolute discretion, select additional trading advisors and reapportion funds among the trading advisors for the Partnership as it deems appropriate.  CMF shall use its best efforts to make reapportionments, if any, as of the first day of a month.  The Advisor agrees that it may be called upon at any time promptly to liquidate positions in CMF’s sole discretion so that CMF may reallocate the Partnership’s assets, meet margin calls on the Partnership’s account, fund redemptions, or for any other reason, except that CMF will not require the liquidation of specific positions by the Advisor.  CMF will use its best efforts to give two days’ prior notice to the Advisor of any reallocations or liquidations.

 

(g) The Advisor will not be liable for trading losses in the Partnership’s account including losses caused by errors; provided, however, that (i) the Advisor will be liable to the Partnership with respect to losses incurred due to errors committed or caused by it or any of its principals or employees in communicating improper trading instructions or orders to any broker on behalf of the Partnership and (ii) the Advisor will be liable to the Partnership with respect to losses incurred due to errors committed or caused by any executing broker (other than any CMF affiliate) selected by the Advisor.

 

2. INDEPENDENCE OF THE ADVISOR.  For all purposes herein, the Advisor shall be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Partnership in any way and shall not be deemed an agent, promoter or sponsor of the Partnership, CMF, or any other trading advisor.  The Advisor shall not be responsible to the Partnership, the General Partner, any trading advisor or any limited partners for any acts or omissions of any other trading advisor to the Partnership.

 

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3. COMPENSATION.  (a) In consideration of and as compensation for all of the services to be rendered by the Advisor to the Partnership under this Agreement, the Partnership shall pay the Advisor (i) an annual incentive fee equal to 20% of New Trading Profits (as such term is defined below) earned by the Advisor for the Partnership and (ii) a monthly fee for professional management services equal to 1.25% per year of the month-end Net Assets of the Partnership allocated to the Advisor (computed monthly by multiplying the Partnership’s Net Assets allocated to the Advisor as of the last business day of each month by 1.25% and multiplying the result thereof by the ratio which the total number of calendar days in that month bears to the total number of calendar days in the year).

 

(b) “Net Assets” shall have the meaning set forth in Section 7(d)(1) of the Limited Partnership Agreement dated as of June 15, 1998 and without regard to further amendments thereto, provided that in determining the Net Assets of the Partnership on any date, no adjustment shall be made to reflect any distributions, redemptions or incentive fees payable as of the date of such determination.

 

(c) “New Trading Profits” shall mean the excess, if any, of Net Assets managed by the Advisor at the end of the fiscal period over Net Assets managed by the Advisor at the end of the highest previous fiscal period or Net Assets allocated to the Advisor at the date trading commences, whichever is higher, and as further adjusted to eliminate the effect on Net Assets resulting from new capital contributions, redemptions, reallocations or capital distributions, if any, made during the fiscal period decreased by interest or other income, not directly related to trading activity, earned on the Partnership’s assets during the fiscal period, whether the assets are held separately or in margin accounts.  Ongoing expenses will be attributed to the Advisor based on the Advisor’s proportionate share of Net Assets.  Ongoing expenses will not include expenses of litigation not involving the activities of the Advisor on behalf of the Partnership.  No incentive fee shall be paid until after December 31, 2010, which fee shall be based on New Trading Profits earned by the Advisor on behalf of the Partnership.  Interest income earned, if any, will not be taken into account in computing New Trading Profits earned by the Advisor.  If Net Assets allocated to the Advisor are reduced due to redemptions, distributions or reallocations (net of additions), there will be a corresponding proportional reduction in the related loss carryforward amount that must be recouped before the Advisor is eligible to receive another incentive fee.

 

(d) Annual incentive fees and monthly management fees shall be paid within twenty (20) business days following the end of the period for which such fee is payable.  In the event of the termination of this Agreement as of any date which shall not be the end of a calendar year or month, as the case may be, the annual incentive fee shall be computed as if the effective date of termination were the last day of the then current year and the monthly management fee shall be prorated to the effective date of termination.  If, during any month, the Partnership does not conduct business operations or the Advisor is unable to provide the services contemplated herein for more than two successive business days, the monthly management fee shall be prorated by the ratio which the number of business days during which CMF conducted the Partnership’s business operations or utilized the Advisor’s services bears in the month to the total number of business days in such month.

 

(e) The provisions of this Section 3 shall survive the termination of this Agreement.

 

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4. RIGHT TO ENGAGE IN OTHER ACTIVITIES.  (a) The services provided by the Advisor hereunder are not to be deemed exclusive.  CMF on its own behalf and on behalf of the Partnership acknowledges that, subject to the terms of this Agreement, the Advisor and its officers, directors, employees and members, may render advisory, consulting and management services to other clients and accounts.  The Advisor and its officers, directors, employees and members shall be free to trade for their own accounts and to advise other investors and manage other commodity accounts during the term of this Agreement and to use the same information, computer programs and trading strategies, programs or formulas which they obtain, produce or utilize in the performance of services to CMF for the Partnership.  However, the Advisor represents, warrants and agrees that it believes the rendering of such consulting, advisory and management services to other accounts and entities will not require any material change in the Advisor’s basic trading strategies and will not affect the capacity of the Advisor to continue to render services to CMF for the Partnership of the quality and nature contemplated by this Agreement.

 

(b) If, at any time during the term of this Agreement, the Advisor is required to aggregate the Partnership’s commodity positions with the positions of any other person for purposes of applying CFTC- or exchange-imposed speculative position limits, the Advisor agrees that it will promptly notify CMF if the Partnership’s positions are included in an aggregate amount which exceeds the applicable speculative position limit.  The Advisor agrees that, if its trading recommendations are altered because of the application of any speculative position limits, it will not modify the trading instructions with respect to the Partnership’s account in such manner as to affect the Partnership substantially disproportionately as compared with the Advisor’s other accounts.  The Advisor further represents, warrants and agrees that under no circumstances will it knowingly or deliberately use trading programs, strategies or methods for the Partnership that are inferior to strategies or methods employed for any other client or account and that it will not knowingly or deliberately favor any client or account managed by it over any other client or account in any manner, it being acknowledged, however, that different trading programs, strategies or methods may be utilized for differing sizes of accounts, accounts with different trading policies, accounts experiencing differing inflows or outflows of equity, accounts that commence trading at different times, accounts that have different portfolios or different fiscal years, accounts utilizing different executing brokers and accounts with other differences, and that such differences may cause divergent trading results.

 

(c) It is acknowledged that the Advisor and/or its officers, employees, directors and members presently act, and it is agreed that they may continue to act, as advisor for other accounts managed by them, and may continue to receive compensation with respect to services for such accounts in amounts which may be more or less than the amounts received from the Partnership.

 

(d) The Advisor agrees that it shall make such information available to CMF respecting the performance of the Partnership’s account as compared to the performance of other accounts managed by the Advisor or its principals as shall be reasonably requested by CMF, provided that such information will not cause the Advisor to breach any specific confidentiality undertaking or obligation of the Advisor.  The Advisor presently believes and represents that existing speculative position limits will not materially adversely affect its ability to manage the Partnership’s account given the potential size of the Partnership’s account and the Advisor’s and its principals’ current accounts and all proposed accounts for which they have contracted to act as trading manager.

 

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5. TERM.  (a) This Agreement shall continue in effect until June 30, 2011.  CMF may, in its sole discretion, renew this Agreement for additional one-year periods upon notice to the Advisor not less than 30 days prior to the expiration of the previous period.  At any time during the term of this Agreement, CMF may terminate this Agreement at any month-end upon 30 days’ notice to the Advisor.  At any time during the term of this Agreement, CMF may elect to immediately terminate this Agreement upon 30 days’ notice to the Advisor if (i) the net asset value per unit of the Partnership decline as of the close of business on any day to $400 or less; (ii) the Net Assets allocated to the Advisor (adjusted for redemptions, distributions, withdrawals or reallocations, if any) decline by 20% or more as of the end of a trading day from such Net Assets’ previous highest value; (iii) limited partners owning at least 50% of the outstanding units of the Partnership shall vote to require CMF to terminate this Agreement; (iv) the Advisor fails to comply with the terms of this Agreement; (v) CMF, in good faith, reasonably determines that the performance of the Advisor has been such that CMF’s fiduciary duties to the Partnership require CMF to terminate this Agreement; or (vi) CMF reasonably believes that the application of speculative position limits will substantially affect the performance of the Partnership.  At any time during the term of this Agreement, CMF may elect immediately to terminate this Agreement if (i) the Advisor merges, consolidates with another entity, sells a substantial portion of its assets, or becomes bankrupt or insolvent, (ii) both Jeff Austin and Andy Silwanowicz die, become incapacitated, leave the employ of the Advisor, cease to control the Advisor or are otherwise not managing the trading programs or systems of the Advisor, or (iii) the Advisor’s registration as a commodity trading advisor with the CFTC or its membership in the NFA or any other regulatory authority, is terminated or suspended.  This Agreement will immediately terminate upon dissolution of the Partnership or upon cessation of trading by the Partnership prior to dissolution.

 

(b) The Advisor may terminate this Agreement by giving not less than 30 days’ notice to CMF (i) in the event that the trading policies of the Partnership established from time to time are changed in such manner that the Advisor reasonably believes will adversely affect the performance of its trading strategies; (ii) after June 30, 2011; or (iii) in the event that the General Partner or Partnership fails to comply with the terms of this Agreement.  The Advisor may immediately terminate this Agreement if CMF’s registration as a commodity pool operator or its membership in the NFA is terminated or suspended.

 

(c) Except as otherwise provided in this Agreement, any termination of this Agreement in accordance with this Section 5 shall be without penalty or liability to any party, except for any fees due to the Advisor pursuant to Section 3 hereof.

 

6. INDEMNIFICATION.  (a)(i) In any threatened, pending or completed action, suit, or proceeding to which the Advisor was or is a party or is threatened to be made a party arising out of or in connection with this Agreement or the management of the Partnership’s assets by the Advisor or the offering and sale of units in the Partnership, CMF shall, subject to subsection (a)(iii) of this Section 6, indemnify and hold harmless the Advisor against any loss, liability, damage, cost, expense (including, without limitation, attorneys’ and accountants’ fees), judgments and amounts paid in settlement actually and reasonably incurred by it in connection with such action, suit, or proceeding if the Advisor acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Partnership, and provided that its conduct did not constitute negligence, intentional misconduct, or a breach of its fiduciary obligations to the Partnership as a commodity trading advisor, unless and only to the extent that the court or administrative forum in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, the Advisor is fairly and reasonably entitled to indemnity for such expenses which such court or administrative forum shall deem proper; and further provided that no indemnification shall be available from the Partnership if such indemnification is prohibited by Section 16 of the Limited Partnership Agreement.  The termination of any action, suit or proceeding by judgment, order or settlement shall not, of itself, create a presumption that the Advisor did not act in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Partnership.

 

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(ii) To the extent that the Advisor has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsection (i) above, or in defense of any claim, issue or matter therein, CMF shall indemnify it against the expenses (including, without limitation, attorneys’ and accountants’ fees) actually and reasonably incurred by it in connection therewith.

 

(iii) Any indemnification under subsection (i) above, unless ordered by a court or administrative forum, shall be made by CMF only as authorized in the specific case and only upon a determination by independent legal counsel in a written opinion that such indemnification is proper in the circumstances because the Advisor has met the applicable standard of conduct set forth in subsection (i) above.  Such independent legal counsel shall be selected by CMF in a timely manner, subject to the Advisor’s approval, which approval shall not be unreasonably withheld.  The Advisor will be deemed to have approved CMF’s selection unless the Advisor notifies CMF in writing, received by CMF within five days of CMF’s telecopying to the Advisor of the notice of CMF’s selection, that the Advisor does not approve the selection.

 

(iv) In the event the Advisor is made a party to any claim, dispute or litigation or otherwise incurs any loss or expense as a result of, or in connection with, the Partnership’s or CMF’s activities or claimed activities unrelated to the Advisor, CMF shall indemnify, defend and hold harmless the Advisor against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees) incurred in connection therewith.

 

(v) As used solely in this Section 6(a), the term “Advisor” shall include the Advisor, its principals, officers, directors, members and employees and the term “CMF” shall include the Partnership.

 

(b) (i) The Advisor agrees to indemnify, defend and hold harmless CMF, the Partnership and their affiliates against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees), judgments and amounts paid in settlement actually and reasonably incurred by them (A) as a result of the material breach of any material representations and warranties made by the Advisor in this Agreement, or (B) as a result of any act or omission of the Advisor relating to the Partnership if there has been a final judicial or regulatory determination or, in the event of a settlement of any action or proceeding with the prior written consent of the Advisor, a written opinion of an arbitrator pursuant to Section 14 hereof, to the effect that such acts or omissions violated the terms of this Agreement in any material respect or involved negligence, bad faith, recklessness or intentional misconduct on the part of the Advisor (except as otherwise provided in Section 1(g)).

 

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(ii) In the event CMF, the Partnership or any of their affiliates is made a party to any claim, dispute or litigation or otherwise incurs any loss or expense as a result of, or in connection with, the activities or claimed activities of the Advisor or its principals, officers, directors, members or employees unrelated to CMF’s or the Partnership’s business, the Advisor shall indemnify, defend and hold harmless CMF, the Partnership or any of their affiliates against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees) incurred in connection therewith.

 

(c) In the event that a person entitled to indemnification under this Section 6 is made a party to an action, suit or proceeding alleging both matters for which indemnification can be made hereunder and matters for which indemnification may not be made hereunder, such person shall be indemnified only for that portion of the loss, liability, damage, cost or expense incurred in such action, suit or proceeding which relates to the matters for which indemnification can be made.

 

(d) None of the indemnifications contained in this Section 6 shall be applicable with respect to default judgments, confessions of judgment or settlements entered into by the party claiming indemnification without the prior written consent, which shall not be unreasonably withheld, of the party obligated to indemnify such party.

 

(e) The provisions of this Section 6 shall survive the termination of this Agreement.

 

7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

 

(a) The Advisor represents and warrants that:

 

(i) All information with respect to the Advisor and its principals and the trading performance of any of them that has been provided to CMF, including, without limitation, the description of the Program contained in Appendix A, is complete and accurate in all material respects and such information does not contain any untrue statement of a material fact or omit to state a material fact that is necessary to make such statements and information therein not misleading.  All references to the Advisor and its principals, if any, in any future prospectus will, after review and approval of such references by the Advisor prior to the use of such prospectus in connection with the offering of the Partnership’s units, be accurate in all material respects.

 

(ii) The Advisor will be acting as a commodity trading advisor with respect to the Partnership and not as a securities investment adviser and is duly registered with the CFTC as a commodity trading advisor, is a member of the NFA, and is in compliance with any such other registration and licensing requirements as shall be necessary to enable it to perform its obligations hereunder, and agrees to maintain and renew such registrations and licenses during the term of this Agreement.

 

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(iii) The Advisor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has full limited liability company power and authority to enter into this Agreement and to provide the services required of it hereunder.

 

(iv) The Advisor will not, by acting as a commodity trading advisor to the Partnership, breach or cause to be breached any undertaking, agreement, contract, statute, rule or regulation to which it is a party or by which it is bound.

 

(v) This Agreement has been duly and validly authorized, executed and delivered by the Advisor and is a valid and binding agreement enforceable in accordance with its terms.

 

(vi) At any time during the term of this Agreement that an offering memorandum or a prospectus relating to the Partnership units is required to be delivered in connection with the offer and sale thereof, the Advisor agrees upon the request of CMF to provide the Partnership with such information as shall be necessary so that, as to the Advisor and its principals, such offering memorandum or prospectus is accurate.

 

(b) CMF represents and warrants for itself and the Partnership that:

 

(i) The Prospectus (as from time to time amended or supplemented, which amendment or supplement shall be approved by the Advisor as to descriptions, if any, of itself and its actual performance) does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein not misleading, except that the foregoing representation does not apply to any statement or omission concerning the Advisor, if any, in the Prospectus, made in reliance upon, and in conformity with, information furnished to CMF by or on behalf of the Advisor expressly for use in the Prospectus (it being understood that any hypothetical and pro forma adjustments will not be furnished by the Advisor).

 

(ii) CMF is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has full limited liability company power and authority to perform its obligations under this Agreement.

 

(iii) CMF and the Partnership have the capacity and authority to enter into this Agreement on behalf of the Partnership.

 

(iv) This Agreement has been duly and validly authorized, executed and delivered on CMF’s and the Partnership’s behalf and is a valid and binding agreement of CMF and the Partnership enforceable in accordance with its terms.

 

(v) CMF will not, by acting as General Partner to the Partnership and the Partnership will not, breach or cause to be breached any undertaking, agreement, contract, statute, rule or regulation to which it is a party or by which it is bound which would materially limit or affect the performance of its duties under this Agreement.

 

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(vi) CMF is registered as a commodity pool operator and is a member of the NFA, and it will maintain and renew such registration and membership during the term of this Agreement.

 

(vii) The Partnership is a limited partnership duly organized and validly existing under the laws of the State of New York and has full limited partnership power and authority to enter into this Agreement and to perform its obligations under this Agreement.

 

(viii) The Partnership is a qualified eligible person as defined in CFTC Rule 4.7.

 

8. COVENANTS OF THE ADVISOR, CMF AND THE PARTNERSHIP.  (a) The Advisor agrees as follows:

 

(i) In connection with its activities on behalf of the Partnership, the Advisor will comply with all applicable rules and regulations of the CFTC and/or the commodity exchange on which any particular transaction is executed.

 

(ii) The Advisor will promptly notify CMF of the commencement of any material suit, action or proceeding involving it, whether or not any such suit, action or proceeding also involves CMF.

 

(iii) In the placement of orders for the Partnership’s account and for the accounts of any other client, the Advisor will utilize a pre-determined, systematic, fair and reasonable order entry system, which shall, on an overall basis, be no less favorable to the Partnership than to any other account managed by the Advisor.  The Advisor acknowledges its obligation to review the Partnership’s positions, prices and equity in the account managed by the Advisor daily and within two business days to notify, in writing, the broker and CMF and the Partnership’s brokers of (i) any error committed by the Advisor or its principals or employees; (ii) any trade which the Advisor believes was not executed in accordance with its instructions; and (iii) any discrepancy with a value of $10,000 or more (due to differences in the positions, prices or equity in the account) between its records and the information reported on the account’s daily and monthly broker statements.

 

(iv) The Advisor will maintain a net worth of not less than $100,000 during the term of this Agreement.

 

(b) CMF agrees for itself and the Partnership that:

 

(i) CMF and the Partnership will comply with all applicable rules and regulations of the CFTC and/or the commodity exchange on which any particular transaction is executed.

 

(ii) CMF will promptly notify the Advisor of the commencement of any material suit, action or proceeding involving it or the Partnership, whether or not such suit, action or proceeding also involves the Advisor.

 

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(iii) CMF will be responsible for compliance with the USA PATRIOT Act and related anti-money laundering regulations with respect to the Partnership and its limited partners

 

9. COMPLETE AGREEMENT.  This Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof.

 

10. ASSIGNMENT.  This Agreement may not be assigned by any party without the express written consent of the other parties.

 

11. AMENDMENT.  This Agreement may not be amended except by the written consent of the parties.

 

12. NOTICES.  All notices, demands or requests required to be made or delivered under this Agreement shall be in writing and delivered personally or by registered or certified mail or expedited courier, return receipt requested, postage prepaid, to the addresses below or to such other addresses as may be designated by the party entitled to receive the same by notice similarly given:

 

	
  

	
If to CMF or to the Partnership:

 

Ceres Managed Futures LLC

522 Fifth Avenue, 14th Floor

New York, New York 10036

Attention:  Ms. Jennifer Magro

 

	
  

	
If to the Advisor:

 

Blackwater Capital Management LLC

36 Cattano Ave, Suite 601

Morristown, New Jersey  07960

Attention:  Andy Silwanowicz

 

	
  

	
with a copy to:

 

Crow and Associates

33 State Road

3rd Floor, Suite F

Princeton, New Jersey  08540

Attention:  David Cushing

 

13. GOVERNING LAW.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

14. ARBITRATION.  The parties agree that any dispute or controversy arising out of or relating to this Agreement or the interpretation thereof, shall be settled by arbitration in accordance with the rules, then in effect, of the NFA or, if the NFA shall refuse jurisdiction, then in accordance with the rules, then in effect, of the American Arbitration Association; provided, however, that the power of the arbitrator shall be limited to interpreting this Agreement as written and the arbitrator shall state in writing his reasons for his award.  Judgment upon any award made by the arbitrator may be entered in any court of competent jurisdiction.

 

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15. NO THIRD PARTY BENEFICIARIES.  There are no third  party beneficiaries to this Agreement.

 

16. COUNTERPARTS.  This Agreement may be executed in any number of counterparts, including via facsimile, each of which is an original and all of which when taken together evidence the same agreement.

 

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 PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION.  THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE.  CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS ACCOUNT DOCUMENT.

 

IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of the undersigned as of the day and year first above written.

 

CERES MANAGED FUTURES LLC

 

	
  

	
By

	
/s/ Walter Davis                              

Walter Davis

President and Director

 

 

GLOBAL DIVERSIFIED FUTURES FUND L.P.

 

By:  Ceres Managed Futures LLC

(General Partner)

 

	
  

	
By

	
/s/ Walter Davis                            

Walter Davis

President and Director

 

 

BLACKWATER CAPITAL MANAGEMENT LLC

 

	
  

	
By   /s/ Andy Silwanowicz                   

Andy Silwanowicz

Principal

 

 

- 13 -

 

  

  

  

Appendix A

 

Blackwater Global Program

 

Blackwater utilizes medium and long term, systematic technical models to trade global futures and foreign exchange markets.  The models are designed to establish positions when market behavior exhibits a high probability of an emerging sustained move.  Blackwater seeks to aggressively protect open equity after profit targets have been reached, limiting sharp reversals and drawdowns.  It incorporates strict money management techniques based on individual market, sector and portfolio levels in order to reduce volatility.ex10_1.htm

DATED THIS 23rd DAY OF JULY 2010

PLANTRONICS COMMUNICATIONS TECHNOLOGY (SUZHOU) CO LTD

AND

SCANFIL (SUZHOU) CO LTD

CONTRACT FOR THE TRANSFER OF

FACTORY BUILDING AND THE LAND-USE-RIGHT

  

  

  

THIS CONTRACT is made on July 23, 2010

BETWEEN

	
The Transferor:

	
Plantronics Communication Technology (Suzhou) Co., Ltd.

	  	
(“Party A”)

	  	  
	
Place of Registration:

	
No. 9 Plantronics Road

	  	
North Loufeng, Suzhou Industry Park, 215122

	  	
Suzhou, Jiangsu Province,

	  	
People’s Republic of China

	
Legal Representative:

	
Name:

	
Susan Hansen

	  	
Position:

	
General Manager

AND

	
The Transferee:

	
Scanfil (Suzhou) Co., Ltd. (“Party B”)

	  	  
	
P1ace of Registration:

	
158, Hongye Road, Jigai Sub-Park, Loufeng, Suzhou Industrial

	  	
Park, Suzhou, Jiangsu Province,

	  	
People’s Republic of China

	
Legal Representative:

	
Name:

	
Harri Takanen

	  	
Position:

	
Chairman of Board

RECITALS:

	
A)

	
Party A agrees to transfer and Party B accepts to take the transfer of the right to use the land parcel No. 21035 located at the North Loufeng, Suzhou Industrial Park, as set out in the Annex 1 hereto (“Land Parcel”);

	
B)

	
Party A agrees to transfer and Party B accepts to take the transfer of the factory building together with the structures and installations (“Building”) constructed on the Land Parcel, as set out in the Annex 2 hereto, as well as the installations, equipment and office furniture set out in Annex 3 (“Equipment & Furniture”);

THEREFORE, both parties hereto have agreed upon the following terms and conditions:

	
CHAPTER l

	
LAND PARCEL, BUILDING, FACILITY AND EQUIPMENT BRIEFING

	
Article 1

	
As confirmed in the certificates issued by the land and real estate registration authorities of SUZHOU INDUSTRIAL PARK, the Land Parcel is for industrial use, and the ending date of the right to use the Land Parcel is May 29, 2055. The total acreage thereof is 61,334.68 square meters. The total space area of the Building constructed on the Land Parcel is 21,386.84 square meters.

	
Article 2

	
Party A and Party B agree to transfer the Building and the right to use the Land Parcel in accordance with this Contract.  For the avoidance of doubt, the ownership of the land use rights assigned hereunder vests in the People’s Republic of China.  Subject to Article 20, 21 and 22, the ownership of underground resources, hidden treasures and the urban infrastructure does not belong to Party A and therefore is not transferred by Party A to Party B hereunder.

	
Article 3

	
The Equipment and Furniture meanwhile transferred by Party A to Party B are listed in Annex 3 hereto.  Party A shall obtain Party B’s prior written consent if it intends to move out any item listed in Annex 3 hereto.

  

- 2 -  

  

	
CHAPTER 2

	
REPRESENTATIONS AND WARRANTIES

	
Article 4

	
Party A hereby represents and warrants to Party B as follows:

	
  

	
4.1

	
Party A is a wholly-owned foreign enterprise duly organized, validly existing as a legal person under the 1aws of the People’s Republic of China;

	
  

	
4.2

	
Party A has full legal right, power and authority to execute this Contract and to observe and perform its obligations hereunder;

	
  

	
4.3

	
Party A has taken all appropriate and necessary corporate action to authorize the execution of this Contract and to authorize the performance and observance of the terms and conditions hereunder;

	
  

	
4.4

	
Party A owes no pending liability to any third party in connection with the Land Parcel, the Building, and the Equipment and Furniture to be transferred to Party B;

	
  

	
4.5

	
To the time when Party B obtains the title documents of the Land Parcel and Building according to this Contract, Such Land Parcel, Building, and the Equipment and Furniture transferred to Party B will be free of any mortgage, or other encumbrance;

	
  

	
4.6

	
The land use conditions with respect to the Land Parcel are all contained in the Contract for Assigning the Right to Use State-Owned Land, contract ref. Su Gong Yuan Rang (2005) No. 259 between Party A and Suzhou Industrial Park State-Owned Land and Building Bureau (“SIP Land and Building Bureau”).  Other than the foregoing contract, Party A is not subject to any land use conditions, nor occurs any violation of the foregoing contract;

	
  

	
4.7

	
To the best knowledge of Party A and after due inquires, the Building, the facilities and equipment are constructed,installed and owned in a lawful manner, the operation thereof are in normal order without any significant defect.  Significant defect herein means any of the following: (i) not in compliance with applicable national standards and industrial standards of China; (ii) not working normally according to relevant designs, specifications, or technical parameters; (iii) for facilities and equipment that Party A does not hand over relevant designs, specifications, or technical parameters,  if such facilities and equipment do not have the function that similar facilities and equipment generally have, it is regarded as significant defect.  Should a significant defect attributable to the Contractor referenced in Article 4.8 herein occurs, Party B shall follow Article 4.8 herein.

	
  

	
4.8

	
Party A shall assign to Party B all of its rights and interests that it is entitled to assign in relation to quality warranties of the Buildings under the Design and Construction Management Contract entered into by Party A and Bechtel China, Inc. (“Contractor”) on 30 June 2004 (“D&C Contract”) with effect from the Delivery Date.  For the avoidance of doubt, Party A is not providing a guarantee with respect to the Contractor’s statutory construction quality warranties under PRC law and Party B agrees that it shall only make claims for such statutory construction quality warranties against the Contractor and not Party A.

	
  

	
4.9

	
The actual status of the Land Parcel and the Building is fully in compliance with the information contained in the title certificates.  Party A’s use of the Land Parcel, the Building, the facilities and equipment does not in any respect breaking applicable laws including without limitation the environmental protection rules, nor occurs any existing or potential pending governmental investigation, sanctions or third party claims;

	
  

	
4.10

	
Party A agrees to fully indemnify for and keep Party B harmless from any loss, costs or expenditures of Party B as result of any failure of Party A to perform the representations, warranties, and other obligations contained herein.

 

The representations and warranties provided by Party A herein shall survive the term of this Contract.

	
Article 5

	
Party B hereby represents warrants and undertakes to Party A as follows:

	
  

	
5.1

	
Party B is an enterprise duly organized, validly existing as a legal person under the laws of the People’s Republic of China;

	
  

	
5.2

	
Party B has full legal right, power and authority to execute this Contract and to observe and perform its obligations hereunder; and

	
  

	
5.3

	
Party B has taken all appropriate and necessary corporate action to authorize the execution of this Contract and to authorize the performance and observance of the terms and conditions hereof.

The representations and warranties provided by Party B herein shall survive the term of this Contract.

  

- 3 -  

  

	
Article 6

	
Party B’s Additional Obligations

	
  

	
6.1

	
Party B shall be responsible for carrying out the procedures for registration of the change of the registered owner of the land use right certificate of the Land Parcel contemplated under Chapter 4 below.

	
  

	
6.2

	
Boundary markers have been placed on the boundary line of the Land Parcel under the direction of the SIP Land and Building Bureau.  Party B shall take effective steps to protect the said boundary markers from being moved or damaged.  If a boundary marker is moved or damaged after the handover of the Land Parcel, Building and the Equipment and Furniture contemplated under Chapter 4, Party B shall immediately report the same in writing to the SIP Land and Building Bureau and apply for redetermination of the boundary line and replacement of the marker, and all expenses arising therefrom shall be borne by Party B.

	
  

	
6.3

	
After the completion of the handover of Land Parcel, Building and the Equipment and Furniture under Chapter 4, Party B must use the Land Parcel for the purpose specified in this Contract.  If Party B needs to change the purpose of the land or the land use conditions during the land use term of the Land Parcel, it must obtain the consent of the SIP Land and Building Bureau.  The land use rights grant fee and the land use term shall be adjusted in accordance with the purpose and state of the Land Parcel following the change, and a new land use rights grant contract shall be signed.

	
  

	
6.4

	
SIP Land and Building Bureau retains the rezoning rights in respect of the Land Parcel.  If the Building is rebuilt during the land use term or if an extension of the land use term is applied for upon expiration, the zoning requirements prevailing at that time must be complied with.  If the urban plan needs to be revised due to urban infrastructure requirements and such revision affects the Building and gives rise to other economic loss, compensation shall be provided in accordance with the urban demolition and relocation regulations of the Suzhou Industrial Park Administrative Committee.

	
  

	
6.5

	
After the completion of the change of the registered owner on the land use right certificate of the Land Parcel and registered owner on the ownership certificate of the Building under Chapter 4 below, Party B may assign, lease or mortgage the use rights to the Land Parcel in accordance with applicable PRC law.  If it does so, the parties to the agreement for assignment, lease or mortgage must carry out land registration procedures with the SIP Land and Building Bureau;

 

	
  

	
6.6

	
If Party B needs to extend the land use term of the Land Parcel beyond its expiration, it must apply for an extension to the SIP Land and Building Bureau one year prior to expiration of the term.  After the land grant fee has been re-determined, a grant contract covering the period of the extension shall be signed and registration procedures shall be carried out.  If Party B does not apply for an extension within the stipulated period aforementioned, the Suzhou Industrial Park Administrative Committee will recover the Land Parcel without compensation and acquire all the buildings and other attachments within the boundaries of the Land Parcel then, and Party B shall carry out the procedures for deregistration of the land use certificate with the SIP Land and Building Bureau;

	
  

	
6.7

	
With respect to the Land Parcel, the state and the government have judicial and administrative jurisdiction as specified in the law, such other powers to be exercised by the state as specified in the laws of the People’s Republic of China, and such rights and interests as are necessary in the public interest.  Party B’s development and use of, and business activities in respect of, the Land Parcel shall comply with the laws and statutes of the People’s Republic of China and the relevant provincial and municipal regulations, and may not be detrimental to the public interest.  The land use, building management, urban infrastructure, fire safety, environmental protection, landscaping, etc. relating to the Land Parcel must comply with the relevant regulations of the Suzhou Industrial Park Administrative Committee, and the activities in those respects must satisfy the requirements of the relevant functional agencies;

	
  

	
6.8

	
During the period of Party B’s use of the Land Parcel, the SIP Land and Building Bureau shall have the right to supervise and inspect the use of land within the boundaries of the Land Parcel, and Party B may not refuse or obstruct such supervision and inspections.  If Party B uses the Land Parcel beyond its boundaries or uses the Land Parcel in a manner not in accordance with the stipulated requirements by law, SIP Land and Building Bureau will treat such use as illegal use of land; and

	
  

	
6.9

	
The payable property tax and land utilization tax for the use of Land Parcel and Building in 2010 is RMB1,416,356.35 in the aggregate.  Party A shall pay in July 2010 such taxes to the SIP Land and Building Bureau for the entire year of 2010 and Party B shall reimburse to Party A on the Delivery Date (as defined below) the payable taxes for the period from the Delivery Date to the end of 2010.

CHAPTER 3      PURCHASE PRICE AND PAYMENT

	
Article 7

	
PURCHASE PRICE.  Party A and Party B agree that the purchase price for the right to use the Land Parcel, the Building, and the Equipment & Furniture as set out in the Annex 3 shall be RMB Sixty-five million (RMB65,000,000) (the “Purchase Price”).  The purchase price covers:

	
  

	
(1)

	
the price for purchase of the land use rights to the Land Parcel and ownership of the Building: RMB Sixty-three million (RMB63,000,000); and

	
  

	
(2)

	
the price for purchase of the Equipment & Furniture: RMB Two million (RMB2,000,000).

	
  

	
If the Contract becomes unable to perform or relevant governmental authorities do not approve Party B to take transfer of the Land Parcel and the Building, provided such circumstance is not attributed to Party B, then Party A shall fully refund the payment including any deposit received from Party B.

	
Article 8

	
PAYMENT SCHEDULE.  Party A and Party B agree that Party B shall pay the Purchase Price to Party A by installments as follows:

	
  

	
i)

	
Upon the execution day of this Contract, a sum equivalent to 1% of the Purchase Price, i.e. RMB650,000 shall be paid as Deposit;

	
  

	
ii)

	
Upon the issuance date of the land use right certificate indicating Party B as new land use right owner of the Land Parcel or the property ownership certificate indicating Party B as the new property owner of the Building (whichever date is later), and after Party B is provided with the lawful invoice for the total price hereof, a sum equivalent to 89% of the Purchase Price, i.e., RMB57,850,000 shall be paid to Party A; and

	
  

	
iii)

	
Upon the Delivery Date, a sum equivalent to 10% of the Purchase Price, i.e., RMB6,500,000 shall be paid to Party A.

	
Article 9

	
PAYMENT ACCOUNT.  The installments referred to in Article 8 shall be paid to the following account of Party A:

	  	
Bank:

	
Bank of China, 8 SuHua Road, Suzhou, China,

	  	
Swift Code:

	
BKCHCNBJ95B

	  	
Beneficiary:

	
Plantronics Communications Technology (Suzhou) Co. Ltd.

	  	
Renminbi Account No.

	
31956908091001

 

	
  

	
The Purchase Price and any sum payable under this Contract shall be paid in RMB.

  

- 4 -  

  

 

	
Article 10

	
If Party B delays in paying any of the installments above, penalty on any delayed installment(s) shall be calculated from the day after the due date of such installment and shall continue to be payable by Party B until such time as the delayed installment is paid.

	
Article 11

	
The penalty payable shall be calculated from day to day at the daily rate of 0.05%.

	
Article 12

	
Prior to the relevant government authorities grant to Party B the land use right certificate and the building ownership certificate, if Party B delays the payment of any installment(s) for sixty (60) days after the due date of such installment (including Saturdays, Sundays and Public Holidays), Party A shall be entitled to:

	
  

	
(i)

	
unilaterally terminate this Contract by giving notice in writing to Party B;

	
  

	
(ii)

	
charge from Party B 4% of the Purchase Price as a lump sum compensation, or charge all penalties calculated in accordance with Article 11; and

	
  

	
(iii)

	
if the direct losses of Party A resulting from the breach of Party B are in excess of the foregoing compensation or penalties, Party A shall be entitled to claim against Party B.

CHAPTER 4      REGISTRATION CHANGE AND HAND OVER

	
Article 13

	
Within three (3) working days after the issuance date of the land use right certificate indicating Party B as new land use right owner of the Land Parcel or the property ownership certificate indicating Party B as the new property owner of the Building (whichever date is later) (such date within three (3) working days after the said issuance date is referred to herein as the “Delivery Date”), Party A shall deliver possession of the Land Parcel, the Building and the Equipment & Furniture to Party B.  With effect from the Delivery Date, all charges relating to the maintenance and use of the Building and the Equipment & Furniture shall be borne by Party B.  Such charges include, but are not limited to, all items of Table 1 below:

Table 1:

	
No.

	
Service

	
Annual charge

	
Estimated monthly charge

	
Method of payment

	
Remarks

	
1

	
Cleaning service

	
104,400.00

	
8,700.00

	
Monthly

	
Total of 4 persons

	
2

	
Plant area security

	
375,600.00

	
31,300.00

	
Monthly

	
Total of 17 persons

	
3

	
Maintenance of door access and monitoring systems

	
60,000.00

	
5,000.00

	
Quarterly

	  
	
4

	
Maintenance of fire safety system

	
100,000.00

	
8,333.33

	
Quarterly

	  
	
5

	
Removal of non-production garbage

	
9.600.00

	
800.00

	
Monthly

	  
	
6

	
Chemical water treatment system for central air-conditioning

	
56,238.00

	
4,686.50

	
Quarterly

	  
	
7

	
Plant area gardening

	
108,000.00

	
9,000.00

	
Quarterly

	  
	
8

	
Lift maintenance

	
10,176.00

	
848.00

	
Quarterly

	  
	
9

	
Refrigerator maintenance

	
40,000.00

	
3,333.33

	
Quarterly

	  
	
10

	
Air compressor maintenance

	
38,000.00

	
3,166.67

	
Annually

	  
	
11

	
Tap water supply

	
48,600.00

	
4,050.00

	
Monthly

	
Basic charge: 4050/month; 1500 m3

	
12

	
Electricity supply

	
1,200,000.00

	
100,000.00

	
Monthly

	
Basic electricity charge: 44800/

month; the amount added depends on the volume consumed

	
13

	
Natural gas supply

	
216,000.00

	
36,000.00

	
Monthly

	
Basic charge: 36000/month; 12500 m3; can be suspended for whole months; operated 6 months a year.

	  	  	
2,366,614.00

	
215,217.83

	  	  

 

To avoid doubt, it is acknowledged that Party A’s suppliers providing the services set out in Table 1 may be the candidates when Party B selects suppliers.  However, Party B shall have no obligation to take transfer of any contracts between Party A and such suppliers, nor shall Party B directly be bound to any contracts between Party A and such supplier.

	
Article 14

	
Article 13 notwithstanding, the Parties agree that Party A may use the office area, laboratory, warehouse and parking spaces currently used by it (i.e. the areas listed in Table 2), without paying any charges except for the charges to be paid by Party A according to Article 22 herein, for a period of 90 days from the Delivery Date (“Rent-Free Period”).

  

- 5 -  

  

 

Table 2:

	  	  	
Area (m2)

	
Remarks

	
Administration building

	
1st floor

	
1,971.18

	
Building 3 on building ownership certificate

	  	
3rd floor

	
1,724.00

	
Building 3 on building ownership certificate

	
Research and development laboratory

	  	
400.00

	
Building 3 on building ownership certificate

	
Warehouse

	  	
511.31

	
Building 4 on building ownership certificate

	
Laboratory

	  	
Approx. 50

	
Building 4 on building ownership certificate

	
Parking spaces

	  	
27 parking spaces

	
East side of building 3 on building ownership certificate

	
Article 15

	
If Party A has not found suitable premises and moved out by the expiration of the Rent-Free Period, it may lease and use the office area, laboratory, warehouse and parking spaces currently used by it (i.e. the areas listed in Table 2) for a monthly rent of RMB forty (40) per square meter.  The lease period may not exceed 5 months (counted from the expiration date of the Rent-Free Period).  The said rent covers all charges payable by Party A during the lease term, including but not limited to the rent for the premises and the charges mentioned in Table 1 payable by Party A on the basis of the area of the premises leased, except for the charges to be paid by Party A according to Article 22 herein.  If Party A wishes to continue leasing such premises, the Parties shall separately negotiate and determine the terms of such lease according to the then prevailing market practice.

 

	
Article 16

	
Party A shall assist Party B in:

	
  

	
(i)

	
its submission for notarization and government review (if any) of this Contract;

	
  

	
(ii)

	
its procurement of the land use right certificate of the Land Parcel and the Ownership Certificate of the Building; and

	
  

	
(iii)

	
other registration change formalities in connection with the use of the other properties transferred hereunder.

	
Article 17

	
The parties shall respectively bear their liability of the relevant taxes and government charges resulting from the transfer hereof according to applicable laws and local policies.  Both parties agree to share evenly the notarization fee, valuation fee, government designated survey fee (if any) as necessary for the transfer.  Each party shall pay for its consultants used for the transfer hereunder.

 

	 	
However, if any taxes and fees according to relevant laws and regulations are Party A’s responsibility before the Land Parcel, the Building, and the property transferred is handed over to Party B, Party A shall bear such taxes and fees.

 

	
Article 18

	
Party A and Party B hereby acknowledge and agree that upon the issue of the title certificates, the rights, interests and obligations in the Building and the Land Parcel shall be transferred to and borne by Party B.

	
Article 19

	
Within 3 working days prior to handing over the Land Parcel, the Building, facilities and equipment, Party A shall hand over to Party B the technical information, specifications, operation instruction manuals of the Land Parcel, the Building, facilities and equipment.

	
CHAPTER 5

	
INFRASTRUCTURE AND UTILITIES

	
Article 20

	
Party A has caused the relevant supplier construct or install the following “Public Basic Infrastructure"):

	
  

	
(1)

	
the electric power supply cable to the electricity switching station designated by the Power Bureau, from which Party A has at its own cost and expense 1ay the connection cables to the sub-station for the supply of electricity to the Land Parcel;

	
  

	
(2)

	
the sewer pipe and water pipe with designated points along the pipes, from which Party A has at its own cost and expense constructed or installed  connection pipes to the boundary of the Land Parcel; and

	
  

	
(3)

	
the town gas pipe with designated points along the pipes, from which Party B has at its own cost and expenses constructed or installed connection pipes to the Land Parcel.

	
Article 21

	
Party A has paid the turning on fees, engineering fees, connection fees, enhanced capacity fees and all such other fees payable to relevant authorities for the supply of all such electricity, water and sewer to the Land Parcel and the Building.  If Party B requests for additional supply of electricity, water and other utility supplies to the Land Parcel and the Building, Party B shall pay for all fees, including but not limited to turning on fees, engineering fees, connection fees, enhanced capacity fees and all such other fees payable to relevant authorities for the supply of all such electricity, water and other utility supplies to the Land Parcel and the Building.

  

- 6 -  

  

	
Article 22

	
The charges of water, power, town gas and other utilities to the Delivery Date  shall be borne by Party A.  If Party B is caused to pay for any of such charges, Party B shall be entitled to offset such charges from the Purchase Price payable to Party A, provided that Party B shall provide the relevant payment proof to Party A.  After the Delivery Date, Party A shall pay the charges of water, power, town gas and other utilities for the space leased to Party A.  Where the lease space has independent measuring meters, Party A shall pay according to the figures read by such measuring meters.  In absence of independent measuring meters, both parties shall negotiate for the portion to be paid by Party A.  The proportion for Party A to pay such charges shall not be less than the percentage of the square meters leased to Party A against the total square meters registered on the building ownership certificate.

 

 

	
CHAPTER 6

	
FORCE MAJEURE

	
Article 23

	
No Party shall be liable for any loss or damage caused by delay in the performance or non-performance of any of its obligations under this Contract when the same is occasioned by an “Event of Force Majeure”, that is to say any circumstances whatsoever beyond the reasonable control of the affected Party which directly or indirectly prevent or impede the due performance of this Contract, including but not to be limited to the following matters:

	
  

	
(a)

	
war or hostilities; and/or

	
  

	
(b)

	
earthquake, flood, typhoon, fire or other natural physical disaster.

	
Article 24

	
A certificate or confirmation issued by relevant administrative department of  Suzhou Municipal Government or non-governmental authoritative organization in the PRC shall be accepted by the Parties as final and conclusive proof that the said Event of Force Majeure has occurred.

	
Article 25

	
Should any such Event of Force Majeure occur the affected Party shall notify the other Party in writing within fifteen (15) days and shall use its reasonable endeavors to resume prompt performance as soon as such Event of Force Majeure shall have ceased, and the time for any such Party’s performance shall be extended for a period equal to the time lost by reason of the delay which shall be remedied with all due dispatch in the circumstances.  A Party shall not be  considered to be in breach of an obligation under this Contract if prevented from performing such obligation due to an Event of Force Majeure.

 

 

	
CHAPTER 7

	
NOTICE

	
Article 26

	
Notice to Party A and Party B shall be issued to their respective addresses or facsimile numbers as follows:

Party A:

	
To:

	
Plantronics Communication Technology (Suzhou) Co., Ltd.

	
Recipient:

	
Susan Hansen

	  	  
	
Address

	
No. 9, Plantronics Road

	  	
North Loufeng, Suzhou Industrial Park, 215122

	  	
Suzhou, Jiangsu Province, PRC

	  	
Postal Code

	  	  
	
Facsimile Number:

	
86.512.8188.2111

Party B:

	
To:

	
Scanfil (Suzhou) Co., Ltd.

	
Recipient:

	
Sami Poutanen

	  	  
	
Address:

	
158, Hongye Road, Jigai Sub-Park, Loufeng, Suzhou

	  	
Industrial Park, Suzhou, Jiangsu Province, PRC

	  	
Postal Code

	  	  
	
Facsimile Number:

	
86-512-67168857

 

 

	
Article 27

	
If Party A or Party B wishes to change the above-mentioned correspondence address or facsimile number, it shall inform the other party of the new correspondence address or facsimile number fifteen (15) days before such change.

	
Article 28

	
If the notice is sent out by facsimile, it shall deemed to be received on the date of transmission; if the notice is sent out by hand, it shall be deemed to be received on the date of delivery to the address stipulated; if the notice is sent out by registered post, it shall be deemed to be received on the fifth (5th) day after the date of posting.  In each case, if the notice is received on a Saturday, Sunday or public Holiday, it shall be deemed to have been received on the next following working day.

 

  

- 7 -  

  

	
CHAPTER 8

	
APPLICABLE LAW AND DISPUTE RESOLUTION

	
Article 29

	
The execution, validity, interpretation and performance of This Contract and the resolution of any dispute arising from or in relation to this Contract shall be governed by the laws of PRC.

	
Article 30

	
Any question, dispute or difference between Party A and Party B arising from the execution, performance or otherwise in connection with the Contract shall first be resolved through amicable negotiation and friendly consultation between Party A and Party B.  If no resolution is reached within ninety (90) days of the notice by any Party requesting for resolution through negotiation and consultation, the question, dispute or difference shall be submitted to the court having jurisdiction thereof over the venue of the Building for resolution by litigation.

	
CHAPTER 9

	
VALIDITY OF CONTRACT AND OTHER MATTERS

	
Article 31

	
The Contract shall come into effect after signing by Party A and Party B and being notarized.

	
Article 32

	
This Contract is written in the Chinese and English languages and both 1anguages shall have equal validity.  If there is any conflict or inconsistency between the Chinese version and the English version, the Chinese shall be the governing and prevailing version.  Party A and Party B shall, as required by the competent authorities of SIP, submit the Chinese text for registration.  There shall be six originals of the Chinese version and six originals of the English version.  Party A and Party B shall retain one original of both the English and Chinese version of this Contract, the remaining shall be used for registration and other formality purpose.

	
Article 33

	
The headings in this Contract are for convenient reference only and shall not be used to construe or interpret this Contract.

	
Article 34

	
In the event that any provision of this Contract is deemed invalid, unlawful or unenforceable under any applicable 1aw, the validity, 1egality or enforceability of the remaining provisions of this Contract shall not be affected or impaired but this Contract shall be construed as if such invalid, unlawful or unenforceable provision had never been contained in this Contract.

	
Article 35

	
Party A and Party B hereby represent and warrant that each of them shall carry out their respective obligations under this Contract from the date on which this Contract comes into effect until the full performance thereof.

	
Article 36

	
Party A and Party B agree that upon the occurrence of any of the following events which directly or indirectly impedes the due performance of this Contract, namely:

	
  

	
(a)

	
riot of civil commotion;

 

	
  

	
(b)

	
strike of lockout or any other industrial action by workers;

	
  

	
(c)

	
damage to or destruction of the Building or the Land Parcel and/or the Public Basic infrastructure or any part thereof, caused by a third party; and/or

 

	 	
The respective obligations of the Parties under this Contract shall be suspended during the continuance of any of the aforesaid events and neither Party shall claim from the other Party any damages, compensation or for loss of any kind whatsoever arising from or attributable whether directly or indirectly to the occurrence of any of the aforesaid events.  Provided the Parties shall negotiate in good faith as to their rights and obligations inter se under this Contract, if any of the aforesaid events shall continue beyond a period of three (3) months.

 

	
Article 37

	
Unless otherwise expressly stated in writing between Party A and Party B, this Contract constitute the entire rights and obligations between Party A and Party B and shall supersede any prior expression of intent, understanding, discussion, representation, warranty, or promise (whether express or implied, oral or written) made by one Party or its agent to the other Party or its agent with respect to this transaction.

 

  

- 8 -  

  

 

Annexes:

1.           Land Use Right Certificate

2.           Building Ownership Certificate

3.           Equipment & Furniture List

4.           Handover

IN WITNESS WHEREOF the legal/authorized representatives of Party A and Party B have executed this Contract on the date first above written.

	
SIGNED by

	
/s/  Rosanne Jing

The authorized representative of

for and on behalf of

	
Plantronics Communication Technology (Suzhou) Co., Ltd.

in the presence of:

 

	
SIGNED by

	
/s/ Sami Poutanen

The authorized representative of

for and on behalf of

Scanfil (Suzhou) Co., Ltd.

in the presence of:

 

 

 

  

  - 9 -

  

ANNEX 1

LAND USE RIGHT CERTIFICATE OF THE LAND PARCEL

  

  - 10 -

  

ANNEX 2

OWNERSHIP CERTIFICATE OF THE BUILDING

 

 

 

 

 

  

  - 11 -

  

ANNEX 3

EQUIPMENT AND FURNITURE LIST

 

	
1.  LIST OF EQUIPMENT AND FACILITIES TO BE DELIVERED TO PARTY B

 

	
Items

	
Description

	
Description in Chinese

	
QTY

	
IT

	
IT  cable construction

	
IT网络布线

	
1

	
CDA system 压缩空气系统

	
Air Compressors

	
空气压缩机

	
2

	  	
dryer

	
干燥机

	
2

	  	
Tank

	
储气罐

	
2

	
Security 安防系统

	
CCTV System

	
CCTV系统监控

	
1

	  	
door access System

	
门禁系统

	
1

	  	
perimeter alarm system

	
周界红外线报警系统

	
1

	
Fire prevention system消防

	
Fire Alarm System

	
消防报警系统

	
1

	  	
Fire Diesel and Electrical Driven Pumps

	
消防柴油泵,电泵

	
9

	  	
Public Address System

	
公共广播系统

	  
	
Central air conditioning system中央空调

	
Hot Water Boiler

	
热水锅炉

	
2

	  	
Volume Type Heat Exchanger

	
容积式热交换器

	
1

	  	
hot water pump

	
热水循环泵

	
3

	  	
Chiller

	
冷冻机

	
3

	  	
Centrifugal chilled water Pumps

	
冷冻水循环泵

	
4

	  	
Centrifugal cooling water Pumps

	
冷却水循环泵

	
4

	  	
Cooling Tower

	
冷却塔

	
5

	  	
DDC Control System

	
空调控制系统

	
1

	  	
AHU and FCU

	
空调箱和风机盘管

	
17/166

	  	
Fans and Heat Recovery Unit

	
热回收空调箱

	
3

	  	
Chemical Treatment System

	
化学(药品)处理系统

	
1

	  	
fresh air roll

	
新风卷轴过滤装置

	
11

	  	
humidifier

	
空调箱加湿器

	
2

	  	
air cooling chiller

	
风冷冷水机

	
1

	
Electricity system 配电

	
HV Switchgears &LV Switchgears

	
高压低压电气柜

	
1

	  	
Transformer

	
1600KVA干式变压器

	
2

	  	
Generator

	
120kw发电机

	
1

	  	
Lighting Control System&Lighting Fixtures

	
照明控制系统和照明器材

	
1

	
Fume exhaust 焊烟排风

	
exhaust equipment

	
排焊烟设备

	
3

	
Vacuum 真空

	
Vacuum Pump

	
真空泵

	
2

	
Process cooling water system工艺冷却水系统

	
process cooling water

	
工艺冷却水系统

	
1

	
Drinking water system 饮用水系统

	
Portable Water System

	
饮用水

	
1

	  	
Elevator

	
电梯

	
1

	
Warehouse

	
Dock Leveller

	
码头升降平台

	
8

	  	
Kitchen Equipment

	
厨房设备

	
1

	  	
water heater

	
AO史 密斯燃气热水器

	
2

	  	
water heater

	
阿里斯顿电热水器

	
2

	  	
Epoxy floor

	
环氧地坪

	
1

	
Production building

	
THE NEW LOCKER ROOM

	
更衣室扩建工程

	
1

 

  

  - 12 -

  

 

2.  LIST OF OFFICE FURNITURE TO BE DELIVERED TO PARTY B

 

	
Description

	
Model No

	
QTY

	
UNIT

	
1 set includes

	
Location

	  	  	
Desk/table 桌子

	
Cabinet 柜子

	
Office task chair 大班椅

	
Staff chair 椅子

	
Meeting chair 会议椅

	
Guest chair 会客椅

	
Sofa沙发

	
Tea table 茶几

	  
	
OFFICE WORKSTATION经理 办公桌

	
CASTELLI 3D ,(L-SHAPE, 2100*1800mm)WORKSTATION CASTELLI 3D

	
18

	
SET

	
1

	
2

	
1

	  	  	  	  	  	
MANAGER OFFICE 经理办公室

	
STAFF WORKSTATION 员工办公台

	
PREMISE,72L"*72W"*24D"*24"DSTAFF AREA

	
215

	
SET

	
1

	
1

	  	
1

	  	  	  	  	
STAFF AREA 员工办公区

	
CONFERENCE ROOM 16 PERSONSTABLE  会议桌

	
CONFERENCE ROOM 16 PERSONS

	
1

	
SET

	
1

	  	  	  	  	  	  	  	
R&D CONFERENCE ROOM             DB-2FCONFERENCE ROOM

	
MEETING ROOM 10 PERSONS  TABLE会议桌

	
MEETING ROOM 10 PERSONS

	
3

	
SET

	
1

	  	  	  	  	  	  	  	
R&D MEETING ROOM  DB-,2F\3F MEETING ROOM

	
MEETING ROOM 10 PERSONS  TABLE会议桌

	
MEETING ROOM 10 PERSONS

	
1

	
SET

	
1

	  	  	  	  	  	  	  	
DB-2F  MEETING ROOM

	
MEETING ROOM 10 PERSONS  TABLE会议桌

	
MEETING ROOM 10 PERSONS

	
1

	
SET

	
1

	  	  	  	  	  	  	  	
MB-2FMEETING ROOM

	
CONFERENCE TABLE会议桌

	
MEETING ROOM 18 PERSONS

	
1

	
SET

	
1

	  	  	  	  	  	  	  	
DB- 2F

	
CONFERENCE ROOM 16 PERSONS TABLE 会议桌

	
CASTELLI 3D WOOD VENEER TOP, 4100L*1600DMM

	
1

	
SET

	
1

	  	  	  	  	  	  	  	
DB-3F,CONFERENCE ROOM

	
MEDICAL TABLE办公桌

	
MEDICAL

	
2

	
SET

	
1

	
1

	  	
1

	  	  	  	  	
MEDICAL ROOM

	
TRAINING TABLE培训桌

	
TABLE FREELINE RECTANGULAR 1400×600MM

	
20

	
SET

	
1

	  	  	
2

	  	  	  	  	
TRAINING ROOM

	
TABLE 5 PERSONS 小圆桌

	
MEETING ROOM 3 PERSONS

TABLE CASTELLI 3D FIXED TABLE, DIA: 36"

WOOD VENEER TOP

	
10

	
SET

	
1

	  	  	  	  	  	  	  	
R&D 1F,,2F 3F,MB-1F,3F

	
SOFA沙发

	
SUB-CON 2 SEAT SOFA, 1280W*725D*650H

	
1

	
SET

	  	  	  	  	  	  	
2

	
1

	
MEDICAL ROOM

	
CAFETERIA TABLE AND CHAIR餐桌、椅子

	
CAFETERIA

	
99

	
SET

	
1

	  	  	
4

	  	  	  	  	
DINNER ROOM

	
DINNER TABLE圆餐桌

	
CAFETERIA

	
4

	
SET

	
1

	  	  	
7

	  	  	  	  	
DINNER ROOM 2F

	
MEETING ROOM CHAIR

	
GUEST CHAIR X99 FABRIC SEAT & MESH BACK

	
60

	
SET

	  	  	  	  	
1

	  	  	  	  
	
GUEST CHAIR

	  	
39

	
SET

	  	  	  	  	  	
1

	  	  	  
	
WAREHOUSE

	  	  	  	  	  	  	  	  	  	  	  	  
	
HEAVY SHELF

	  	
57

	
SET

	  	  	  	  	  	  	  	  	  
	
LIGHT SHELF

	  	
9

	
SET

	  	  	  	  	  	  	  	  	  
	
TOTAL

	  	
542

	  	  	  	  	  	  	  	  	  	  

 

 

  

- 13 -  

  

ANNEX 4

HAND OVER

 

 

	
1.

	
Delivery

	
  

	
1.1

	
Unless otherwise agreed by the Parties, Party A shall hand over the Land Parcel, the Building (including the Equipment and Furniture as listed in Annex 3)to Party B no later than the date (“the Delivery Date”) as set forth in Article 13 of the Contract, failing which, Party B shall have the right to charge penalty at 0.05% of the total price of the Contract per day for the delay in delivery. Party A shall not be held responsible for the delay in delivery due to any failure of Party B to perform any payment as established in the Contract.

	
  

	
1.2

	
Unless otherwise agreed by the Parties, Party A shall move out from the Building all equipment and articles that are not transferred to Party B hereunder, before the Delivery Date, and work out and deliver the technical information, specifications, operation instruction manuals of the Building, the facilities and equipment, and warranty certificates for Party B to review.

	
  

	
1.3

	
Unless otherwise agreed by the Parties, in the event that Party A fails to hand over the Building within two months after the Delivery Date, Party B hereto shall have the right to terminate the Contract upon expiry of the two-month-period with a written notice.  If the Contract is so terminated, Party A shall refund the money received under the Contract, together with 5% of the Purchase Price as agreed in the Contract as compensation to Party B.  If the direct losses caused thereby to Party B are more than such compensation, Party B shall be entitled to claim against Party A.

	
2.

	
Condition of the Building

	
  

	
2.1

	
Party A shall hand over the Building (including the equipment and facilities herein specified) to Party B at its current status and conditions.  After Party B takes possession of the Building, unless otherwise agreed herein, Party A shall immediately not be liable to Party B for any subsequent defect or damage.

	
3.

	
Property Management

	
  

	
3.1

	
Upon delivery of the Building by Party A to Party B, Party A shall be no longer responsible for any property management service for the Land Parcel and the Building.  Party B shall make such property management service available by its own upon taking over the Land Parcel and the Building.

[End of Agreement]

- 14 -

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