SERVICE AGREEMENT
THIS AGREEMENT, made this 5th day of September, 1997, by:
Derivatives Portfolio Management, L.L.C.,
a Delaware limited liability company,
X.X. Xxx 0000
Xxx Xxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
("DPM")
and
The Willowbridge Fund, L.P.,
a Delaware limited partnership,
c/o Ruvane Investment Corporation
0 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
(the "Client")
RECITALS
A. DPM is engaged in the financial accounting service business.
B. The Client desires to engage DPM and DPM agrees to provide
services to the Client on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties agree as
follows:
1. Services of DPM. The Client hereby authorizes DPM to perform
those services herein enumerated (the "Activities") as follows:
a) Generate and deliver to Client on a timely basis by agreed upon
procedure daily activity reports, portfolio reports, portfolio
summary reports, fund summary reports, realized profit and loss,
risk and net asset value reports by computing, adjusting,
verifying, updating and reconciling data obtained from trading
advisors and brokers;
b) Compile and prepare monthly reports of realized and unrealized
gain/loss, accrued dividends and interest analysis; calculate
monthly net asset value; prepare monthly purchase-sales journal,
dividends and interest journal; prepare monthly balance sheets,
changes in partner equity and income statements; prepare a monthly
1
General Ledger accompanied by appropriate documentation including
reconciliations and detailed fee schedules; provide trading
advisors with monthly balance sheets; and prepare and provide
reconciliations to brokers and trading advisors;
c) Maintain records of the General Ledger, broker's statements,
trader reports and other relevant reports received;
d) Prepare and deliver month-end financial statements and other
reports as necessary including reporting to limited partners
and/or their representatives on a timely basis; prepare and
maintain a data base of investors and investor representatives and
compute selling agents commissions and monthly brokerage trailers;
and
e) Prepare for auditors' review and approval the tax information
required to be given to the Client's limited partners pursuant to
the Internal Revenue Code and handle communications with the
Client's auditors and tax professionals;
2. Broker Services. DPM will not perform the services of a trading
broker, including, without limitation, executions of transactions, payment
of brokerage commissions, confirmations of transactions to the Client,
transmittal of monthly account statements to the Client, enforcement of any
margin requirements, or the custody of funds or securities.
3. Compliance Services. DPM and the Client recognize and
acknowledge that DPM's services pursuant to this Agreement are solely
limited to performance of the Activities. Nothing contained herein,
expressed or implied, is intended or shall be construed to confer upon DPM
any duty to ensure that the Client or any related entities are acting in
compliance with any applicable domestic or international laws or
regulations.
4. Sole Responsibility for the Activities. The Client will not
authorize any other party to perform the Activities.
5. Authorization for DPM Communications. The Client hereby
authorizes DPM to communicate, as required, with its limited partners,
trading advisors, brokers, FCMs, accountants and other agents and related
parties to obtain the information needed to perform the Activities.
6. Compensation. As compensation for DPM's performance of the
Activities pursuant to this Agreement, the Client will pay DPM, commencing
as of day DPM begins to perform the Activities a monthly fee equal to
twenty/twelfths basis points of the value of the assets under management in
the Fund including any notional funds (herein, the "Assets"), as computed
by DPM as of the first day of each month. For example, if the Assets equal
$10,000,000 as of the first day of a month, the monthly fee for that month
would equal $1,667 ($10,000,000 multiplied by 0.002, then divided by 12).
DPM will send Client an invoice showing the fee for each month within 10
days after the last day of that month. Client will pay the fee within 15
days of receipt of the invoice. DPM will calculate its fee on a pro rata
basis if DPM begins to perform the Activities on a day other
than the first day of a month. In addition to the fee referred to above,
DPM will be paid $18.00 per limited partner per year for expenses
associated with mailing and handling. This expense payment will be due
initially at the beginning of the term of this agreement and thereafter as
each new limited partner is admitted.
7. Special Projects. The parties hereto may agree that DPM
undertake to perform additional tasks or projects, as needed, upon terms
and conditions, including compensation, to be mutually agreed upon by the
parties.
8. The Client's Representations. The Client represents to DPM
that:
A. The Client is duly organized and validly existing as a limited
partnership organized in the State of Delaware and in good standing under
the laws of the State of Delaware and is in good standing and qualified to
do business in each jurisdiction in which the nature or conduct of its
business requires such qualification.
B. The Client has full authority and power to execute, deliver,
consummate and perform this Agreement.
C. The performance by the Client of its obligations under this
Agreement will not conflict with or result in a breach of any of the terms
or provisions of any agreement of which the Client is a party to or to
which it is bound, and does not violate any applicable laws, rules or
regulations.
D. The Client is knowledgeable about commodities trading and aware
of the risk of substantial loss in such trading.
E. The Client will ensure that DPM has full access to the relevant
limited partners, trading advisors, brokers, accountants and other agents
in order to obtain the information DPM will need to perform the Activities.
F. All the information relating to the Client given to DPM in
connection with the transactions contemplated by this Agreement is full,
complete and accurate and DPM may rely on such information until it
receives written notice from the Client of any changes.
G. The Client will immediately notify DPM if any of the foregoing
representations cease to be true.
9. DPM's Representations. DPM represents to the Client that:
A. DPM is duly organized and validly existing as a limited
liability company in the State of Delaware and in good standing under the
laws of the State of Delaware and is in good standing and qualified to do
business in each jurisdiction in which the nature or conduct of its
business requires such qualification.
B. DPM has full authority and power to execute, deliver,
consummate and perform this Agreement.
C. The performance by DPM of its obligations under this Agreement
will not conflict with or result in a breach of any of the terms or
provisions of any agreement of which DPM is a party or to which it is bound
and does not violate any applicable laws, rules or regulations.
D. DPM has completed, obtained and performed all registrations,
filings, approvals, authorizations, consents or examinations required by
any government or governmental authority to perform the Activities
contemplated by this Agreement and will maintain the same in effect for so
long as this Agreement remains in effect.
E. DPM will immediately notify the Client if any of the foregoing
representations cease to be true.
10. Non-Exclusive Services. DPM's services to the Client are not
exclusive and DPM shall be free to render similar and other services to
others.
11. Relationship of the Parties. DPM shall at no time retain
possession of, or have any right, title and interest in the Client's
assets. DPM is an independent contractor and this Agreement does not
establish a joint venture or partnership between DPM and the Client, nor
authorize any entity to act as general agent, or to enter into any contract
or other agreement on behalf of any other party except as specifically
provided herein. No party shall be liable to any third party in any way for
any unauthorized or negligent act or omission of the other party.
12. Term. The term of this Agreement shall begin upon the
execution of both parties and end July 31, 1998, unless terminated on 90
days written notice by either party hereto. Termination shall not affect
DPM's right to compensation earned prior to the date of termination pro
rata. Unless terminated earlier pursuant to this Section 12 this Agreement
will renew itself for successive one-year terms, subject to renegotiation
of the terms of compensation stated herein.
13. Notices. Any communication, notice or demand pursuant to this
Agreement shall be in writing and delivered by personal service (including
express or courier service) or by registered or certified mail, postage
prepaid, return receipt requested:
If to DPM:
Derivatives Portfolio Management, L.L.C.
X.X. Xxx 0000
Two Worlds Fair Drive
Somerset, New Jersey 08875-6741
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Client:
The Willowbridge Fund, L.P.
c/o Ruvane Investment Corporation
0 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14. Confidentiality. DPM and the Client agree to keep confidential
the terms of this Agreement and each transaction hereunder, and all related
agreements, business practices, financial data, procedures and policies
hereunder or otherwise relating to either of them or their affiliates that
are not publicly available (the "Confidential Information"). The parties
shall keep the Confidential Information in strictest confidence except to
perform the services as contemplated by this Agreement or except as
required by applicable law or regulation. The obligations of the parties
pursuant to this section shall survive termination of this Agreement.
15. Indemnification. The Client agrees to indemnify and hold
harmless DPM and DPM's officers, employees and agents and their respective
successors and permitted assigns from and against any and all liabilities,
claims, costs, fines, damages, expenses, losses or attorneys' fees arising
pursuant to this Agreement. Nothing contained herein shall require the
Client to indemnify DPM or DPM's officers, employees or agents and their
respective successors and permitted assigns with respect to an act which
constitutes negligence, malfeasance or willful misconduct by DPM or any of
the aforementioned persons. The obligations of the Client pursuant to this
section shall survive termination of this Agreement.
16. Employment Practices. The Client agrees that it shall not hire
or solicit the employment of, or services from, any employee of DPM unless
approved in advance by the
President of DPM or until a minimum period of twelve (12) months has passed
from the employee's last day of employment with DPM.
17. Governing Law. This Agreement and performance hereunder and
all suits and special proceedings hereunder shall be construed in accordance
with the laws of the State of Delaware.
18. Contract Terms To Be Exclusive. This Agreement contains the
sole and entire agreement between the parties and supersedes any and all
other agreements between the parties relating to the subject matter hereof.
A modification of this Agreement will be effective only if it is in writing
and signed by both parties.
19. Assignability. This Agreement shall be binding on and inure to
the benefit of the respective parties hereto and their heirs, executors,
successors and assigns. No party shall assign the rights or delegate the
duties pursuant to this Agreement without the prior written consent of the
other parties.
20. Waiver. The waiver by any party of a breach of any provisions
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party. The failure of a party to insist upon
strict adherence to any provision of the Agreement shall not constitute a
waiver or thereafter deprive such party of the right to insist upon strict
adherence.
IN WITNESS WHEREOF, the parties have set their hands and seals on
the day first written above.
ATTEST: THE WILLOWBRIDGE FUND, L.P.,
a Delaware Limited Partnership
By: Ruvane Investment Corporation,
Its General Partner
_________________________ By: Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, President
ATTEST: DERIVATIVES PORTFOLIO MANAGEMENT, L.L.C.,
a Delaware Limited Liability Company
_________________________ By: Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, President
