exv10w3






Exhibit 10.3




AMENDED AND RESTATED MANAGEMENT AGREEMENT




     AGREEMENT made as of the 10th day of April, 1997 and amended and restated as of the 1st day of
March, 2000 among SMITH BARNEY FUTURES MANAGEMENT LLC, a Delaware limited liability company
(“SBFM”), SMITH BARNEY WESTPORT FUTURES FUND L. P., a New York limited partnership (the
“Partnership”) and JOHN W. HENRY & COMPANY, INC., a Florida corporation (the “Advisor”).



W I T N E S S E T H :




     WHEREAS, SBFM is the general partner of SMITH BARNEY WESTPORT FUTURES FUND L. P., a limited
partnership organized for the purpose of speculative trading of commodity interests, including
futures contracts, options, forward contracts and physicals with the objective of achieving
substantial capital appreciation; and



     WHEREAS, the Limited Partnership Agreement establishing the Partnership (the “Limited
Partnership Agreement”) permits SBFM to delegate to one or more commodity trading advisors SBFM’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, SBFM is registered as a commodity pool operator with the CFTC and is a member of the
NFA; and



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



     WHEREAS, SBFM, the Partnership and the Advisor wish to amend and restate this Agreement in
order to (i) incorporate amendments to this Agreement made as of June 30, 1998; (ii) change the
program that the Advisor will trade on behalf of the
Partnership; (iii) change the fees that will be paid to the Advisor by the Partnership; and (iv)
otherwise continue 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 by SBFM in commodity interests, including commodity futures
contracts, options and forward contracts and physicals. The Advisor will not be allocated notional
funds. All such trading on behalf of the Partnership shall be in accordance with the trading
strategies and trading policies set forth in the Partnership’s prospectus and/or private placement
memoranda dated as of May 30, 1997, amended as of August 31, 1998, June 1, 1999, and to be amended
on or about May 1, 2000 (as supplemented and collectively, the “Prospectus”), and as such trading
policies may be changed from time to time upon receipt by the Advisor of prior written notice of
such change. Any open positions or other investments at the time of receipt of such notice 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 SBFM. 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) SBFM acknowledges receipt of the Advisor’s Disclosure Document dated June 30, 1999, as
amended on October 13, 1999 and November 5, 1999 (the “Disclosure Document”). All trades made by
the Advisor for the account of the Partnership shall be made through such commodity broker or
brokers as SBFM shall direct, and the Advisor shall have no authority or responsibility for
selecting or supervising any such broker in connection with the clearance or confirmation of
transactions for the Partnership or for the negotiation of brokerage rates charged therefor. SBFM
shall also direct the Advisor in writing on Appendix A to this Agreement (which may be revised by
SBFM from time to time) to direct trades in commodity futures and options to such independent floor
brokers as SBFM may determine as agent for Salomon Smith Barney Inc. for execution with
instructions to give-up the trades to the broker designated by SBFM. The Partnership’s futures
commission merchant is Salomon
Smith Barney Inc. 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 agreement. The terms of this
Section 1(b) shall supersede any inconsistent terms in the give-up agreement. The Partnership’s
futures commission merchant will provide copies of all brokerage statements to the Advisor.



     (c) The allocation of the Partnership’s assets to the Advisor, effective March 1, 2000, will
be made to the JWH Strategic Allocation Program (the “Program”). In the event the Advisor wishes
to use a trading system or methodology other than or in addition to the systems or methodologies
outlined in the Prospectus in connection with its trading for the Partnership, either in whole or
in part, it may not do so unless the Advisor gives SBFM prior written notice of its intention to
utilize such



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different trading system or methodology and SBFM consents thereto in writing. SBFM
may add programs other than the Strategic Allocation Program, or delete the Strategic Allocation
Program, only upon agreement with the Advisor. In addition, the Advisor will provide five days’
prior written notice to SBFM of any change in a 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 to be material, the changed system or methodology will not be utilized for the
Partnership without the prior written consent of SBFM. Changes in contracts traded or in the
leverage employed shall not be deemed to be material and no prior notice or consent shall be
required. The Advisor also agrees to provide SBFM, upon request, 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 SBFM.



     (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”), shareholders,
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 SBFM 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 SBFM 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 SBFM 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.
Further, SBFM agrees to treat as confidential any results of proprietary accounts and/or
proprietary information with respect to trading systems obtained from the Advisor. Nothing
contained in this Agreement shall be deemed or construed to require the Advisor to disclose any
confidential or proprietary details of the Advisor’s trading strategies or the names or identities
of the Advisor’s clients.



     (e) The Advisor understands and agrees that SBFM may designate other trading advisors
(although SBFM has no present intention to do so) for the Partnership and to 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



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hereunder. In the event SBFM appoints an
additional advisor for the Partnership, SBFM will change the Partnership’s name to another name
which will not include the term “Westport.”



     (f) SBFM 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 (although SBFM has no present intention to do so). SBFM 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 SBFM’s sole discretion so that SBFM may
reallocate the Partnership’s assets, meet margin calls on the Partnership’s account, fund
redemptions, or for any other reason, except that SBFM will not require the liquidation of specific
positions by the Advisor. The Advisor shall not be responsible for the effects of such
liquidations ordered by SBFM. SBFM will use its best efforts to give three days’ prior notice to
the Advisor of any additions, redemptions, reallocations or liquidations and will use its best
efforts to effect such reallocation or liquidation only at month-end. Additions and redemptions
will be made only at month-end.



     (g) The Advisor will not be liable for trading losses in the Partnership’s account including
losses caused by errors; provided, however, that 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.



     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, SBFM, or any other trading advisor or to be establishing a
partnership or joint venture with any of the foregoing. The Advisor shall not be responsible to
the Partnership, its general partner or any limited partners for any acts or omissions of any other
trading advisor acting as an advisor to the Partnership.



     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 incentive fee payable quarterly equal to 15% 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 1/3 of 1% (4% per year) of the month-end Net Assets of
the Partnership allocated to the Advisor.



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     (b) “Net Assets” shall have the meaning set forth in Paragraph 7(d)(1) of the Limited
Partnership Agreement dated as of March 21, 1997 and without regard to amendments thereto (and as
set forth in Appendix A hereto), provided that in determining the Net Assets of the Partnership on
any date, no adjustment shall be made to reflect any distributions, redemptions, management fees
payable, 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. 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, reallocations or distributions (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) Quarterly incentive fees and monthly management fees shall be paid within twenty (20)
business days following the end of the period, as the case may be, for which such fee is payable.
In the event of a redemption, reallocation or distribution (net of additions) or the termination of
this Agreement as of any date which shall not be the end of a calendar quarter or a calendar month,
as the case may be, the quarterly incentive fee shall be computed and paid as if the effective date
of the redemption, reallocation, distribution or termination were the last day of the then current
quarter 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 SBFM
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, it being acknowledged that under the
Advisor’s trading programs there will be periods when no open positions will be maintained for the
Partnership.



     (e) The provisions of this Paragraph 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. SBFM 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 shareholder(s), may render advisory, consulting and management services to other
clients and accounts. The Advisor and its officers, directors, employees and shareholder(s) 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 or different information, computer programs and trading
strategies, programs or formulas which they obtain, produce or utilize in the performance of
services to SBFM for the Partnership. However, the Advisor represents, warrants and agrees that it
believes that 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 SBFM 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 SBFM 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 trading that program. The Advisor further represents, warrants and agrees that under no
circumstances will it knowingly or deliberately use trading 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 the Advisor offers ten
different trading programs, and that different trading strategies or methods may be utilized for
differing sizes of accounts, accounts with different trading policies, fees, commissions or levels
of diversification, accounts experiencing differing inflows or outflows of equity, accounts which
commence trading at different times, accounts which 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
shareholder(s) presently act,



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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 SBFM 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 SBFM, provided that in no
event shall the Advisor be required to disclose the identity of its customers. 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.



     5. TERM. (a) This Agreement shall continue in effect until June 30, 2000. SBFM 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, SBFM may terminate this Agreement at any month-end upon 30 days’ notice
to the Advisor. At any time during the term of this Agreement, SBFM may elect to immediately
terminate this Agreement if (i) the Net Asset Value per Unit (as that term is defined in Section
7(d)(2) of the Limited Partnership Agreement) shall 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 50% or more as of the end of a
trading day from such Net Assets’ previous highest value; (iii) limited partners owning more than
50% of the outstanding Units shall vote to require SBFM to terminate this Agreement; (iv) the
Advisor fails to comply with the terms of this Agreement as to any material term; (v) SBFM, in good
faith, upon due consideration by its board of directors, reasonably determines that the performance
of the Advisor has been such that SBFM’s fiduciary duties to the Partnership require SBFM to
terminate this Agreement; or (vi) SBFM reasonably believes that the application of speculative
position limits will substantially adversely affect the performance of the Partnership. At any
time during the term of this Agreement, SBFM may elect immediately to terminate this Agreement if
(i) the Advisor merges, consolidates with another entity not controlled by John W. Henry, sells a
substantial portion of its assets to an entity not controlled by John W. Henry, or becomes bankrupt
or insolvent, (ii) John W. Henry
dies, becomes incapacitated, leaves the employ of the Advisor, ceases to control the Advisor or is
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



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terminated or suspended. This Agreement will immediately terminate upon
dissolution of the Partnership or upon cessation of trading prior to dissolution. In the event
SBFM terminates this Agreement, SBFM will change the Partnership’s name to another name which will
not include the term “Westport.”



     (b) The Advisor may terminate this Agreement by giving not less than 30 days’ notice to SBFM.
The Advisor may immediately terminate this Agreement (i) if SBFM’s registration as a commodity pool
operator or its membership in the NFA is terminated or suspended; (ii) if SBFM withholds its
consent to a change in the Advisor’s program specified in Section 1(c) of this Agreement; or (iii)
if SBFM requires the Advisor to liquidate positions pursuant to section 1(f) hereof.



     (c) Except as otherwise provided in this Agreement, any termination of this Agreement in
accordance with this Paragraph 5 shall be without penalty or liability to any party.



     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, the sale of Units of the Partnership or the management of
the Partnership’s assets, SBFM shall, subject to subparagraph (a)(iv) of this Paragraph 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 in accordance with applicable law, 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 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.



     (ii) The Advisor will not be liable to the Partnership, SBFM, their principals, officers,
directors shareholders, partners or employees except by reason of acts constituting willful
malfeasance or negligence as to its duties



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under this Agreement. The foregoing sentence shall not
apply to the breach of any representation, warranty or covenant contained herein or to the
provisions of subparagraph 1(g) of this Agreement.



     (iii) Without limiting sub-paragraph (i) above, 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
subparagraph (i) above, or in defense of any claim, issue or matter therein, SBFM shall indemnify
it against the expenses (including, without limitation, attorneys’ and accountants’ fees) actually
and reasonably incurred by it in connection therewith.



     (iv) Any indemnification under subparagraph (i) above, unless ordered by a court or
administrative forum, shall be made by SBFM 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
subparagraph (i) above. Such independent legal counsel shall be selected by SBFM 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 SBFM’s selection unless the Advisor notifies SBFM in
writing, received by SBFM within five days of SBFM’s telecopying to the Advisor of the notice of
SBFM’s selection, that the Advisor does not approve the selection.



     (v) 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 SBFM’s
activities or claimed activities unrelated to the Advisor, SBFM 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.



     (vi) As used in this Paragraph 6(a), the terms “Advisor” shall include the Advisor, its
principals, officers, directors, stockholders and employees and the term “SBFM” shall include the
Partnership.



     (b)(i) The Advisor agrees to indemnify, defend and hold harmless SBFM, 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



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pursuant to Paragraph 14
hereof, to the effect that such acts or omissions violated the terms of this Agreement in any
material respect or involved negligence, intentional misconduct, or a breach of its fiduciary
obligations established under applicable law on the part of the Advisor (except as otherwise
provided in Section 1(g).



     (ii) In the event SBFM, 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, shareholder(s) or employees unrelated to SBFM’s or the Partnership’s business, the
Advisor shall indemnify, defend and hold harmless SBFM, 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 Paragraph 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 Paragraph 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 Paragraph 6 shall survive the termination of this Agreement.



     7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.



     (a) The Advisor represents and warrants that:



     (i) All references to the Advisor and its principals in the Prospectus are accurate in all
material respects and as to them the Prospectus 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 with respect to the Individual and Composite Pro Forma Performance of the
Advisor’s tables, this representation and warranty extends only to underlying data made available
by the Advisor for the preparation thereof. All references to the Advisor and its principals in
the Prospectus will, after review and approval of such references by the Advisor in writing prior
to the use of



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such Prospectus in connection with the offering of the Partnership’s units, be
accurate in all material respects.



     (ii) The information with respect to the Advisor set forth in the actual performance tables in
the Prospectus is based on all of the customer accounts managed on a discretionary basis by the
Advisor’s principals and/or the Advisor during the period covered by such tables and required to be
disclosed therein.



     (iii) 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 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.



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



     (v) 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.



     (vi) 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.



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



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



     (i) The Prospectus (as from time to time amended or supplemented, which amendment or
supplement is approved by the Advisor as to descriptions 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 in the Prospectus, made in
reliance upon, and in conformity with, information furnished to SBFM by or on behalf of the Advisor
expressly for use in the Prospectus.



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



     (iii) SBFM 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 SBFM’s and
the Partnership’s behalf and is a valid and binding agreement of SBFM and the Partnership
enforceable in accordance with its terms.



     (v) SBFM 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.



     (vi) It 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 power and authority to enter into this Agreement and to
perform its obligations under this Agreement.



     (viii) SBFM and the Partnership agree that John W. Henry shall have no liability to the
Partnership or SBFM under this Agreement or in connection with the transactions contemplated herein
except for fraud and willful misconduct by John W. Henry.



     8. COVENANTS OF THE ADVISOR, SBFM 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 SBFM of the commencement of any material suit, action or
proceeding involving it, whether or not any such suit, action or proceeding also involves SBFM.



     (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



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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 promptly to notify, in writing, the broker and SBFM and the
Partnership’s broker of (i) any error committed by the Advisor or its principals or employees; and
(ii) any trade which the Advisor believes was not executed in accordance with its instructions.



     (iv) The Advisor shall, upon written demand of SBFM related to a possible claim arising under
Section 6(b)(i) or (ii) hereof, maintain a net worth of not less than $4,000,000.



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



     (i) SBFM 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) SBFM 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.



     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:



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     If to SBFM:


Smith Barney Futures Management LLC

390 Greenwich Street — 1st Floor

New York, New York 10013

Attention: David J. Vogel




     If to the Advisor:


John W. Henry & Company, Inc.

One Glendinning Place

Westport, Connecticut 06880

Attention: Elizabeth A.M. Kenton




     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 National Futures Association or, if the National
Futures Association 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.



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



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     16. SALES MATERIALS. SBFM will provide a copy of all sales materials referring to
the Advisor and used in connection with the offering to the Advisor for its review and approval
prior to SBFM’s public use of the sales materials.



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


SMITH BARNEY

FUTURES MANAGEMENT LLC




	 	 	 	 	 
	By:

	 	/s/ David J. Vogel
 

David J. Vogel
	 	 
	 

	 	President and Director	 	 
	 
	 	 	 	 
	SMITH BARNEY

WESTPORT FUTURES FUND L. P.	 	 
	 
	 	 	 	 
	By:

	 	Smith Barney	 	 
	 

	 	Futures Management LLC	 	 
	 

	 	(General Partner)	 	 
	 
	 	 	 	 
	By:

	 	/s/ David J. Vogel
 

David J. Vogel
	 	 
	 

	 	President and Director	 	 
	 
	 	 	 	 
	JOHN W. HENRY & COMPANY, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Verne Sedlacek
 

Name: Verne Sedlacek
	 	 
	 

	 	Title: President and Chief Operating Officer	 	 







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Appendix A



1. GIVE-UP BROKERS: The initial give-up brokers shall be Dean Witter, Barclays de Zoete Wedd
Futures , E. D. & F. Man, J.P. Morgan Futures, Inc., J. Aron and Company, Carr Futures, Inc.,
Credit Suisse First Boston, Fimat International Banque, Goldman Sachs International Limited, HSBC
Bank, Morgan Stanley & Co., Inc. and Warburg Dillon Read LLC.



2. NET ASSETS of the Partnership shall mean the total assets of the Partnership including all
cash, plus Treasury Bills at market, accrued interest, and the market value of all open commodity
positions maintained by the Partnership, less brokerage charges accrued and less all other
liabilities of the Partnership, determined in accordance with generally accepted accounting
principles under the accrual basis of accounting.