MARKET TIMING SIGNALS PROFESSIONAL LICENSE AGREEMENT
This Agreement (“Agreement”) is made and entered into this _____ day of ___________, 2011 by and between ___________________ (“RIA”), SEC registered investment advisor, and MIPS Timing Systems, LLC (“MIPS”), a stock market timing company.
Whereas, RIA wishes to retain MIPS as an independent contractor to provide RIA with consulting services in accordance with the terms and conditions set forth herein:
Now, therefore, in consideration of the mutual promises set forth below, RIA and MIPS hereby agree as follows:
- Trading instructions -
1.1 MIPS shall diligently and expediently provide its proprietary trading instructions (referred to herein as the “signals”) on the same day they are generated by the MIPS models to RIA to be used by RIA for the sole purposes of: (a) managing RIA’s client accounts and/or (b) managing client accounts of “other investment advisory firms” that it has a sub-advisory relationship with and that meet the requirements in Section 1.2, if any (“Clients”). RIA shall, in its sole discretion, decide whether to implement any of the signals provided to it by MIPS.
1.2 RIA, in it own discretion, shall decide whether or not it will manage client accounts of other investment advisory firms. RIA will only be allowed to manage client accounts of other investment advisory firms with MIPS signals that agree (in writing) to adhere to the MIPS Timing Systems, LLC “Terms of Use” and “Disclaimer” on the MIPS Timing Systems website www.mipstiming.com, and the terms and conditions in this Agreement. RIA agrees to provide MIPS with a copy of said signed agreements for any and all such RIA firms within ten (10) business days after receiving said signed document(s). Moreover, RIA will be responsible for the behavior of and payments from each of these such RIA firms.
1.3 In no case shall RIA be allowed to share the MIPS signals with any 3rd party, including but not limited to Clients or other investment advisory firms.
2. Compensation – For all RIA client accounts that receive MIPS signals and/or RIA clients whose accounts are managed by RIA using MIPS signals, RIA shall pay as follows:
The greatest of:
A) A monthly fee of $200/month on a monthly subscription (or an annual fee of $2000/year up-front on an annual subscription) for RIAs with less than $100 million in total assets under management (AUM),
or
B) twenty percent (20%) of all fees collected on all assets managed using MIPS signals paid quarterly in arrears, including management fees and incentive fees,
or
C) one quarter (¼) of one percent (1.0%) per year based on all assets managed using MIPS signals paid quarterly in arrears.
Payments:
(i) As a minimum, RIA shall pay MIPS the monthly fees in Section 2-A paid through the automatic monthly renewal credit card payments available on the MIPS website or the up-front annual fee, whichever is applicable,
and
(ii) if, and only if, the greater of the fees in Section 2-B or 2-C exceed the applicable minimum in Section 2-A, RIA will also pay MIPS the greater of the fees, if any, in Section 2-B or Section 2-C above (whichever is applicable) after subtracting the applicable minimum automatic fees already paid through Section 2-A within 30 (thirty) calendar days after the end of each calendar quarter.
Other:
The RIA shall notify MIPS every time its firm begins or changes or resumes or stops the management of one or more of its client account(s) with the MIPS Signals, together with the dollar amount under management for each of these said account(s). RIA agrees to use the form in Exhibit A hereto (the “MIPS Account Management Form”).
MIPS shall not be entitled to receive compensation from RIA for any delinquent RIA client accounts (i.e., any client accounts for which the client fails to pay RIA or for which RIA does not otherwise receive compensation), until and if said delinquent RIA client(s) pay(s) RIA at a later date. In the event this Agreement is terminated, MIPS shall receive from RIA the pro-rata portion of any payments it is due within five (5) business days.
3. Asset Limitation – To avoid any issues related to capacity limitations for MIPS investment strategies or for any other reason, MIPS shall have the right to limit the amount of assets RIA can manage using the signals. As of the date of this Agreement, said limit is $100 million in total assets under management (AUM); or other amounts negotiated by the two parties and made part of this Agreement by an Addendum hereof.
The Asset Limitation will be implemented in the following manner:
Based on the honor system, RIA agrees to the limits in Section 3. However, RIA may request higher limits at any time, and MIPS agrees to make its best efforts to approve such request within fifteen (15) days.
However, MIPS may, upon 30 (thirty) day’s written notice to RIA, instruct RIA not to accept any new assets into portfolios using the MIPS signals. In the event that MIPS limits new assets, RIA may not accept additional assets into programs or accounts using the MIPS signals after 30 days have passed from receipt of notification of the Asset Limitation. Assets withdrawn from accounts during the implementation of the Asset Limitation may not be replaced until the Asset Limitation has been rescinded in writing by MIPS.
4. Audit – MIPS shall have the right to verify the total of all assets being managed by RIA with MIPS signals. Such verification may include the physical review of RIA’s client records to the extent that MIPS feels necessary to accomplish verification. The aforementioned examination shall be performed at an agreed upon time convenient to both parties within 30 (thirty) calendar days written notice by MIPS, and in a manner that does not, to the extent possible, disturb the normal working environment or business activities of RIA. MIPS agrees that all such information pertaining to reviews shall be held by MIPS and its agents, in strict confidence.
5. Client Acceptance – Within its sole and absolute discretion, RIA may, for any reason or for no reason whatsoever, elect to accept or reject a client. Furthermore, under no circumstances shall RIA incur any liability to MIPS if RIA terminates its relationship with any client, except to the extent that MIPS is entitled to receive compensation from RIA for that portion of the year/quarter in which RIA was engaged and paid by the client and any other outstanding fees.
6. Restrictive Covenant – All RIA client accounts managed by RIA using MIPS signals shall be considered the exclusive clients of RIA. As such, MIPS, its officers, directors, employees and/or agents shall not, either directly or indirectly, for itself or for the benefit of any other investment or financial services firm or professional (i.e., registered investment adviser, broker-dealer, bank, trust company, etc.), during the term of this Agreement and for a period of twelve (12) months thereafter, intentionally solicit to render investment management, financial planning, or investment advisory services from any of RIA’s clients, including but not limited to any of RIA’s clients which became known to MIPS pursuant to this Agreement, without the express prior written consent of RIA. However, if at any time, said RIA clients subscribe to MIPS though the MIPS website on their own with no solicitation from MIPS, MIPS will be allowed to accept such past RIA clients as MIPS subscribers.
7. No Guarantee – RIA acknowledges that MIPS makes no guarantee that any of the MIPS signals that it provides to RIA will be profitable. To the contrary, RIA acknowledges that MIPS signals can result in investment losses to RIA clients. Accordingly, RIA hereby releases, and agrees to defend, indemnify and hold harmless MIPS from and against damages and/or claims asserted by a RIA client for account losses or for any other reason.
8. Representations – RIA hereby warrants and represents that it is an SEC registered investment advisor in good standing, that the respective regulatory filings are current and accurately reflect the advisory operations, and that it is in compliance with applicable state and federal laws, rules and regulations pertaining to SEC registered investment advisors. In addition, RIA and MIPS warrant and represent that neither is (nor any of their respective advisory representatives or associated persons are) subject to any statutory disqualifications set forth in Sections 203(e) and 203(f) of the Investment Advisers Act of 1940, nor are they currently the subject of any investigation or proceeding which could result in statutory disqualification and/or the disclosure thereof on their respective Disclosure Statements. RIA and MIPS acknowledge that their respective obligations to advise the other with respect to these representations shall be continuing and ongoing, and should any representation change for any reason, each warrants to advise the other immediately, together with providing the corresponding pertinent facts and circumstances.
9. Confidentiality – Both RIA and MIPS agree to keep confidential all information and/or documentation provided to the other relative to their respective business operations and techniques, including, but not limited to, RIA client lists and MIPS signals and how such signals are generated by the MIPS models. Additionally, RIA will take all reasonable steps to ensure that MIPS signals are not transmitted and executed in a manner that permits a third party to “piggy-back” on the trades of RIA. Failure to protect MIPS signals from third party discovery and “piggy-back” trading shall constitute a breach of this agreement. Furthermore, both RIA and MIPS represent and warrant that neither will, directly or indirectly, use any such confidential information for any purpose whatsoever, except solely with respect to the specific intended use under this Agreement, or for the purpose of complying with their respective obligations under this Agreement.
10. Arbitration – Any dispute or controversy arising out of this Agreement shall be settled in accordance with the applicable securities industry rules/procedures of the American Arbitration Association (“AAA”). Judgment may be entered on the arbitration decision in any court having jurisdiction thereof. The prevailing party in any such arbitration shall be entitled to recover from the other party its reasonable attorneys fees and costs. Venue for the arbitration proceeding shall be in the jurisdiction closest to the party against whom action is being taken.
11. Termination
11.1 By MIPS
MIPS shall have the right to terminate this agreement and license granted herein without cause upon ninety (90) days written notice to RIA or:
(a) Immediately upon a breach (other than described in Section 11.1(b) of this Agreement);
(b) Upon thirty (30) days written notice in the event that RIA fails to make payment as provided herein. RIA shall be given ten (10) days to cure such breach;
(c) Immediately, in the event RIA becomes subject to any bankruptcy or insolvency proceeding under federal or state statute or becomes insolvent or becomes subject to direct control by a trustee, receiver, or similar authority;
(d) Immediately, at sole MIPS discretion, if RIA is served a lawsuit by a RIA client for any reason..
11.2 By RIA
RIA shall have the right to terminate this Agreement and license granted herein without cause upon ninety (90) days written notice, at the end of which time all royalties, commissions, and fees owed to MIPS become due and payable.
12. Complete Agreement – This Agreement, together with the MIPS Terms of Use Agreement on the MIPS website www.mipstiming.com, is the final, complete and exclusive statement and expression of the Agreement between RIA and MIPS with relation to the subject matter of the Agreement. This Agreement supersedes, and cannot be varied, contradicted or supplemented by evidence of any prior or contemporaneous discussions, correspondence, or oral or written agreements of any kind. This Agreement may be modified, altered or otherwise amended only by a written instrument executed by both RIA and MIPS.
13. No Waiver; Remedies Cumulative – No failure to exercise, nor any delay in exercising any right, power, or privilege, shall operate as a waiver thereof. No waiver by the parties hereto of any default or breach of any term, condition or covenant of this Agreement shall be deemed to be a waiver of any subsequent default or breach of the same or any other term, condition or covenant contained herein. No Right, remedy or election given by any term of this Agreement shall be deemed exclusive but each shall be cumulative with all other rights, remedies and elections available at law or in equity.
14. Language Construction – The language in this Agreement shall be construed, in all cases, according to its fair meaning, and not for or against any party hereto. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
15. Notice - All notices or other communications required or permitted hereunder shall be in writing and may be given by depositing the same in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return requested, by overnight courier or by delivering the same in person to such party. Either party may change the address for notice by notifying the other party of such change in accordance with this paragraph.
If to RIA XYZ Company __________________________
Address (Street and number) ________________
City, State Zip Code ______________________
If to MIPS MIPS Timing Systems, LLC
P.O. Box 69104
Houston, TX 77269
16. Governing Law - To the extent not inconsistent with the Investment Advisers Act of 1940 and its corresponding Rules, this Agreement shall be governed under the laws of the state of Texas.
17. Indemnification – RIA shall indemnify, defend and hold harmless MIPS from any claims, demands, liabilities, losses, damages, judgments or settlements including all reasonable cost and expenses related thereto including attorney’s fees directly or indirectly resulting from any claims pursuant to this agreement from whatever source whatsoever because of the failure of RIA to comply with the provisions of this agreement or, any misrepresentation of RIA in connection with this agreement, or any other wrongful conduct of RIA, its employees, representatives, agents or dealers in the use of material subject to the agreement, or for any other reason.
18. Review of Marketing Materials – RIA shall not distribute any marketing materials that describe MIPS Programs without first receiving approval from MIPS.
19. Title of Market Timing Signal – The implementation of the MIPS signals supplied by MIPS to RIA is the sole responsibility of RIA for the purpose of management of RIA client assets. As such, RIA may market its use of the MIPS signals under a title of its choosing.
IN WITNESS WHEREOF, both parties hereunto set their hands as of the day and year first above written.
MIPS Timing Systems, LLC
Date:_____________ By:__________________________
Name: _______________________
Title: ________________________
RIA
Date:_____________ By:______________________
Name:______________________
Title:________________________
Exhibit A
MIPS Account Management Form
Exhibit to the main Agreement between MIPS Timing Systems, LLC (“MIPS”) and _________________________________ (“RIA”) dated _______________, 2011.
NOTICE:
This form is to notify MIPS Timing Systems (“MIPS”) that on ______________, 2011 _______________________________(“RIA”) wishes to:
Circle One:
- begin
- increase
- decrease
- resume
- stop
using the MIPS Signals defined in the main Agreement for management of the portfolio of ________________________________, RIA Account Number ______________, in the amount of $___________.
By:
______________________________
RIA Firm:
_______________________________
Signature:
_______________________________
Name:
_______________________________
Date:
Addendum No. 1
Special Conditions
This Addendum is to the Agreement between MIPS Timing Systems ("MIPS") and __________________________________ ("RIA").
As per this Addendum _____________________________.
IN WITNESS WHEREOF, both parties hereunto set their hands as of the day and year first above written.
MIPS Timing Systems, LLC
Date:_____________ By:__________________________
Name: _______________________
Title: ________________________
RIA
Date:_____________ By:_________________________
Name:_______________________
Title:________________________
