Document:

ex4-3.htm

Exhibit 4.3

 

AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED RIGHTS AGREEMENT

 

This Amendment No. 2 (the “Amendment”) is dated as of May 1, 2011 and amends that Second Amended and Restated Rights Agreement, dated as of October 27, 2003 and amended on February 2, 2007, by and between Cephalon, Inc., a Delaware corporation (the “Company”) and American Stock Transfer & Trust Company LLC, a New York limited liability trust company, successor in interest to American Stock Transfer & Trust Company, as Rights Agent (the “Rights Agent”).

 

WHEREAS, the Company and StockTrans, Inc., as the rights agent, entered into that Second Amended and Restated Rights Agreement, dated as of October 27, 2003, which was amended by the Agreement of Appointment and Joinder and Amendment No. 1 to the Second Amended and Restated Rights Agreement, by and between Cephalon, Inc. and American Stock Transfer & Trust Company, dated February 9, 2007, to appoint the Rights Agent as the successor rights agent (the “Rights Agreement”);

 

WHEREAS, the Company intends to enter into an Agreement and Plan of Merger (as it may be amended or supplemented from time to time) (the “Merger Agreement”), by and among  the Company, Teva Pharmaceutical Industries Ltd., an Israeli corporation (the "Parent”) and Copper Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent (the "Merger Sub");

 

WHEREAS, on May 1, 2011, the board of directors of the Company determined it is in the best interests of the Company and its stockholders to amend the Rights Agreement on the terms set forth herein;

 

WHEREAS, in accordance with Section 27 of the Rights Agreement, for so long as the Rights are then redeemable, the Company may in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend any provision of the Rights Agreement in any respect without the approval of any holders of the Rights; and

 

WHEREAS, the Rights Agent is hereby directed to join in the amendment to the Rights Agreement as set forth herein.

 

NOW, THEREFORE, in consideration of the promises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

AGREEMENT

1.          Amendment of the Rights Agreement.

 

 

(a)       Section 1(a) of the Rights Agreement is hereby amended by inserting the following sentence immediately after the last sentence in the definition of “Acquiring Person”:

 

  

  

  

 

“Notwithstanding anything in this Section 1(a) or otherwise in this Agreement to the contrary, none of Teva Pharmaceutical Industries Ltd. (“Parent”), Copper Acquisition Corp. (“Merger Sub”), or any of their respective Affiliates or Associates, (collectively, the “Exempt Teva Persons”), either individually or collectively, shall be deemed to be an “Acquiring Person” by virtue of or as a result of (A) the approval, adoption, execution, delivery or performance of the Merger Agreement, (B) the public or other announcement or disclosure of the Merger, the Merger Agreement or any of the other transactions contemplated by the Merger Agreement or (C) the consummation of the Merger at the Effective Time or any of the other transactions contemplated by the Merger Agreement (the transactions described in clauses (A), (B) and (C), together with any related transactions, the “Exempt Teva Transactions”).  “Effective Time” and “Merger” shall have the meanings set forth in the Merger Agreement and “Merger Agreement” shall mean the Agreement and Plan of Merger, dated as of May 1, 2011 by and between the Company, Parent, and Merger Sub, a Delaware corporation, as it may be amended or supplemented from time to time.”

 

(b)       Section 1(c) of the Rights Agreement is hereby amended by inserting the following sentence immediately after the last sentence in the definition of “Beneficial Owner” and “beneficially own”:

 

“Notwithstanding anything in this Section 1(c) or otherwise in this Agreement to the contrary, none of the Exempt Teva Persons, either individually or collectively, shall be deemed to be a “Beneficial Owner” of or to “beneficially own” any securities beneficially owned by any other Exempt Persons by virtue of or as a result of any Exempt Teva Transaction.”

 

(c)       Section 1(bb) of the Rights Agreement is hereby amended by inserting the following sentence immediately after the last sentence in the definition of “Stock Acquisition Date”:

 

“Notwithstanding anything in this Section 1(bb) or otherwise in this Agreement to the contrary, a Stock Acquisition Date shall not be deemed to have occurred by virtue of or as a result of any Exempt Teva Transaction.”

 

(d)       Section 3(a) of the Rights Agreement is hereby amended by inserting the following sentence immediately after the last sentence of Section 3(a):

 

“Notwithstanding anything to the contrary in Section 3(a) hereof or otherwise in the Agreement to the contrary, a Distribution Date shall not be deemed to have occurred by virtue of or as a result of any Exempt Teva Transaction.”

 

  

  

  

 

(e)       Section 11(a)(ii) of the Rights Agreement is hereby amended by inserting the following sentence immediately after the last sentence of Section 11(a)(ii):

 

“Notwithstanding anything in Section 11(a)(ii), 11(a)(iii) or Section 13 hereof or otherwise in this Agreement to the contrary, a Flip-In Event shall not be deemed to have occurred by virtue of or as a result of an Exempt Teva Transaction.”

 

(f)        Section 7(a) of the Rights Agreement is hereby amended and replaced in its entirety with the following:

 

“(a) Except as otherwise provided herein, the Rights shall become exercisable on the Distribution Date, and thereafter the registered holder of any Right Certificate may, subject to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office or agency of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one one-hundredth of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as to which the Rights are exercised, at any time which is both after the Distribution Date and prior to the time (the "Expiration Date") that is the earliest of (i) the Close of Business on November 30, 2013 (the "Final Expiration Date"), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the "Redemption Date"), (iii) the time at which such Rights are exchanged as provided in Section 24 hereof or (iv) immediately prior to the Effective Time of the Merger (but only if the Effective Time shall occur).

 

(g)       A new Section 35 with the heading "Termination at the Effective Time" is hereby added to the Rights Agreement reading in its entirety as follows:

 

"(a)  This Agreement and the Rights established hereby will terminate in all respects immediately prior to the Effective Time.

(b)  The Rights Agent shall not be subject to, nor be required to comply with, or determine if any event has occurred under (including, but not limited to, the occurrence of the Merger or the Effective Time), or any Person has complied with, the Merger Agreement or any agreements and documents related to or referred to in the Merger Agreement or any other agreement between or among the parties thereto, even though reference thereto may be made in this Agreement, or to comply with any notice, instruction, direction, request or other communication, paper or document other than as expressly set forth in this Agreement."

  

  

  

 

(h)       Section 26 of the Rights Agreement (as amended by the Agreement of Appointment and Joinder and Amendment No. 1 to the Rights Agreement) is amended and restated in part to update the address of the Rights Agent by deleting the language which reads:

 

"American Stock Transfer & Trust Company

59 Maiden Lane

New York, NY 10038

Attention: General Counsel"

and replacing such language, in its entirety, with the following:

"American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Attention: General Counsel"

2.          Termination of Merger Agreement.  If the Merger Agreement is terminated, then from and after such time this Amendment shall be of no further force and effect and the Agreement shall remain exactly the same as it existed immediately prior to execution of this Amendment.  The Company hereby agrees to notify the Rights Agent promptly upon the termination of the Merger Agreement.

 

3.          Notice of Effective Time.  The Company agrees to notify the Rights Agent promptly after the occurrence of the Effective Time, which notice shall specify (i) that the Effective Time has occurred, and (ii) the date upon which this Agreement and the Rights established hereby were terminated.

 

4.          No Other Amendment; Effect of Amendment. Except as and to the extent expressly modified by this Amendment, the Rights Agreement and the exhibits thereto shall remain in full force and effect in all respects without any modification. By executing this Amendment below, the Company certifies that this Amendment has been executed and delivered in compliance with the terms of Section 27 of the Rights Agreement. This Amendment shall be deemed an amendment to the Rights Agreement and shall become effective and shall be deemed to be in force and effect immediately prior to the execution of the Merger Agreement. In the event of a conflict or inconsistency between this Amendment and the Rights Agreement and the exhibits thereto, the provisions of this Amendment shall govern.

 

5.          Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Amendment transmitted electronically shall have the same authority, effect, and enforceability as an original signature.

 

  

  

  

 

6.          Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

7.          Miscellaneous. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made solely by residents of such state and performed entirely within such State.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 to the Second Amended and Restated Rights Agreement as of the date first above written.

	  	
CEPHALON, INC.

	  	  
	  	  
	  	
By:   

	/s/ Gerald J. Pappert
	  	  	
Name:   

	Gerald J. Pappert
	  	  	
Title:

	Executive Vice President, General Counsel and Secretary
	  	  	  
	  	  	  
	  	  	  
	  	
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

	  	  
	 	 
	  	
By:   

	/s/ Paula Caroppoli
	  	  	
Name:   

	Paula Caroppoli
	  	  	
Title:

	Senior Vice Presidentmanagreement.htm

  

  

EXHIBIT 10.2

 

AMENDED AND RESTATED MANAGEMENT AGREEMENT

 

This AGREEMENT made as of the 29th day of April, 2011 among CERES MANAGED FUTURES LLC, a Delaware limited liability company (“CMF” or the “General Partner”), ABINGDON FUTURES FUND L.P., a New York limited partnership (the “Partnership”) and WINTON CAPITAL MANAGEMENT LIMITED, a United Kingdom company (“Winton” or the “Advisor,” together with the General Partner and the Partnership, the “Parties”).  This Agreement amends and restates the Management Agreement dated as of November 21, 2006 (the “Existing Agreement”), by and among the Parties.

 

W I T N E S S E T H :

 

WHEREAS, CMF is the general partner of Abingdon Futures Fund L.P., a limited partnership organized for the purpose of speculative trading of commodity interests, including futures contracts, options, swaps and forward contracts on U.S. and non-U.S. markets with the objective of achieving substantial capital appreciation, such trading to be conducted directly or through investment in CMF Winton Master L.P., a New York limited partnership (the “Master Fund”) of which CMF is the general partner and Winton 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 is authorized and regulated by the Financial Services Authority (“FSA”) in the United Kingdom; and

 

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

 

WHEREAS, on September 23, 2009, the Board of Directors of the General Partner resolved to change the General Partner’s name from Citigroup Managed Futures LLC to Ceres Managed Futures LLC and the Certificate of Formation of the General Partner and the Partnership’s Certificate of Limited Partnership were amended to make appropriate corresponding changes; and

 

WHEREAS, on September 23, 2009, the Board of Directors of the General Partner resolved to change the Partnership’s name from Citigroup Abingdon Futures Fund L.P. to Abingdon Futures Fund L.P. and the Certificate of Limited Partnership was amended to make appropriate corresponding changes; and

 

WHEREAS, this Agreement is being amended to reflect, among other things, a change in the Advisor’s management fee compensation (from 2% per year to 1.5% per year); and

 

WHEREAS, the Parties have entered into the Existing Agreement and now wish to amend and restate the Existing Agreement as set out in this Agreement; 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 and forward contracts.  The Advisor may also engage in swap transactions and other derivative transactions on behalf of the Partnership with the prior approval of CMF.  The Advisor may, with the consent of the General Partner, engage in such trading through investment in the Master Fund.  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 Private Placement Offering Memorandum and Disclosure Document dated as of September 13, 2010, as supplemented (the “Memorandum”), and 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 Diversified Program (the “Program”) 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 Memorandum without the prior written consent of the Partnership given by CMF.  CMF and the Partnership each acknowledge that the Advisor may utilize exchange for physicals transactions in its trading for the Partnership.  The Advisor makes no representation or warranty that the trading to be directed by it for the Partnership will be profitable or will not result in losses.

 

(b)  CMF acknowledges receipt of the Advisor’s Disclosure Document dated as of March 30, 2011, as filed with the NFA (the “Disclosure Document”).  All trades made by the Advisor for the account of the Partnership, whether directly or indirectly through the Master Fund, 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; provided that the Advisor shall not enter into any “soft” commission agreements with any such broker.  However, the Advisor, with the prior written permission (by original, fax copy or email copy) of CMF, may direct any and all trades in futures, forwards 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 original, fax copy or email copy).

 

 

  

  

  

(c)  The initial allocation of the Partnership’s assets to the Advisor will be made to the Program.  In the event the Advisor wishes to use a trading system or methodology other than or in addition to the system or methodology outlined in the Memorandum 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 require a change in the description of the trading strategy or methods described in the Memorandum.  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 1% of the net asset value of the Master Fund will be converted to U.S. dollars within one business day after such funds are no longer needed to margin foreign positions.

 

(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 CMF to be made in any filings required by Federal or state law or NFA rule or order.  Notwithstanding Paragraphs 1(d) and 4(d) of this Agreement, the Advisor shall not be 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.  Further, CMF 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 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 of the Partnership (as defined in Paragraph 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 of the Partnership to any such trading advisors pursuant to this Paragraph 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 such other 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 give notice to the Advisor of any reallocations or liquidations by email to r.patel@wintoncapital.com, b.grandison@wintoncapital.com and fundaccountants@wintoncapital.com by no later than midday on the business day prior to the day on which such change is intended to take effect.

 

(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 Citigroup Global Markets Inc. or any of its affiliates) selected by the Advisor (it also being understood that CMF, with the assistance of the Advisor, will first attempt to recover such losses from the executing broker).

 

(h)  CMF acknowledges and agrees that the Advisor shall not be obligated to comply with the “best execution” requirement of Rule 7.5.3 of the FSA with respect to orders placed on behalf of the Partnership; provided, however, that such waiver shall not relieve the Advisor of its obligations under any provision of this Agreement (including without limitation Paragraphs 4(b) and 8(a)(iii)) and under the rules of the CFTC and NFA.

 

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.

 

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 as of the end of each calendar quarter 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 1/12 of 1.5% (1.5% per year) of the month-end Net Assets of the Partnership allocated to the Advisor.

 

(b) “Net Assets of the Partnership” shall have the meaning set forth in Paragraph 7(d)(2) of the Limited Partnership Agreement dated as of March 1, 2011, 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 of the Partnership managed by the Advisor at the end of the fiscal period over Net Assets of the Partnership managed by the Advisor at the end of the highest previous fiscal period or Net Assets of the Partnership allocated to the Advisor at the date trading commences, whichever is higher, and as further adjusted to eliminate the effect on Net Assets of the Partnership 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 of the Partnership as of the end of each month.  Ongoing expenses above will not include expenses of litigation not involving the activities of the Advisor on behalf of the Partnership.  No incentive fee shall be paid to the Advisor until the end of the first full calendar quarter of the Advisor’s trading for the Partnership, which incentive fee shall be based on New Trading Profits (if any) earned from the commencement of trading for the Partnership by the Advisor through the end of the first full calendar quarter of such trading.  Interest income earned, if any, will not be taken into account in computing New Trading Profits earned by the Advisor.  If Net Assets of the Partnership 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) 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 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 as if the effective date of 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 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 Paragraph 3 shall survive the termination of this Agreement.

 

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 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 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 Program 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 in writing 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 or risk parameters, 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, 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, if any, as shall be reasonably requested by CMF.  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 advisor.

 

5. TERM.  (a)  This Agreement shall continue in effect until June 30, 2012.  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 any class shall decline as of the close of business on any day to $400 or less; (ii) the Net Assets of the Partnership decline to less than $1,000,000; (iii) the Net Assets of the Partnership 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; (iv) limited partners owning at least 50% of all classes of outstanding units shall vote to require CMF to terminate this Agreement; (v) the Advisor fails to comply with the terms of this Agreement; (vi) 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; (vii) CMF reasonably believes that the application of speculative position limits will substantially affect the performance of the Partnership; or (viii) the Advisor fails to conform to the trading policies set forth in the Limited Partnership Agreement or the Memorandum as they may be changed from time to time.  At any time during the term of this Agreement, CMF may elect immediately to terminate this Agreement if (i) the Advisor merges or consolidates with another entity, sells a substantial portion of its assets, or becomes bankrupt or insolvent, (ii) David Winton Harding dies, becomes incapacitated, leaves the employ of the Advisor, ceases to control the Advisor or is otherwise not managing the Program,  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 as set forth in the Memorandum are changed in such manner that the Advisor reasonably believes will adversely affect the performance of its trading strategies; (ii) after June 30, 2012; 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 Paragraph 5 shall be without penalty or liability to any party, except for any fees due to the Advisor pursuant to Paragraph 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 subparagraph (a)(iii) 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, 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 Paragraph 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.

 

  

  

  

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

 

(ii) Any indemnification under subparagraph (a)(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 subparagraph (a)(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.

 

(iii) 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) actually and reasonably incurred by it in connection therewith.

 

(iv) As used in this Paragraph 6(a), the term “Advisor” shall include the Advisor, its principals, officers, directors, shareholders 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 principals, officers, directors or employees 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 Paragraph 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 Paragraph 1(g)).

 

 

  

  

  

(ii) In the event CMF, the Partnership or any of their principals, officers, directors or employees 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, shareholders 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 principals, officers, directors or employees against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees) actually and reasonably incurred by them  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 reasonable 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 Memorandum, if any, are accurate in all material respects and as to them the Memorandum 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 Table B and any other pro forma or hypothetical performance information in the Memorandum, if any, this representation and warranty extends only to the underlying data made available by the Advisor for the preparation thereof and not to any hypothetical or pro forma adjustments.  Subject to such exception, all references to the Advisor and its principals in the Memorandum will, after review and approval of such references by the Advisor prior to the use of such Memorandum 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 Memorandum, if any, 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.  The Advisor’s performance tables have been examined by an independent certified public accountant.  The Advisor will have its performance tables so examined no less frequently than annually during the term of this Agreement.

 

  

  

  

(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 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.

 

(iv) The Advisor is a company duly organized, validly existing and in good standing under the laws of the United Kingdom and has full corporate 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 an offering memorandum or prospectus relating to the Partnership’s 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 Memorandum (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 Memorandum, made in reliance upon, and in conformity with, information furnished to CMF by or on behalf of the Advisor expressly for use in the Memorandum, and which has been approved by the Advisor for such use (it being understood that the hypothetical and pro forma adjustments in Table B were not 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.

 

(vi) CMF is registered as a commodity trading advisor and a commodity pool operator and is a member of the NFA, and it will maintain and renew such registrations 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.

 

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 laws, including rules and regulations of the CFTC, NFA 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, CMF and the Partnership’s brokers of (A) any error committed by the Advisor or its principals or employees; (B) any trade which the Advisor believes was not executed in accordance with its instructions; and (C) 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 USD $2,000,000 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 laws, including rules and regulations of the Securities and Exchange Commission, CFTC, NFA 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.

 

(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 effective upon actual receipt and shall be made either by electronic mail (email) copy or 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:  Walter Davis

 

Email:  walter.davis@morganstanleysmithbarney.com                                                                                                

 

If to the Advisor:

 

Winton Capital Management Limited

1-5 St. Mary Abbot’s Place

London W8 6LS

England

Attention:  Mr. Andrew Bastow

Email: a.bastow@wintoncapital.com and legal@wintoncapital.com

 

  

  

  

 

13. GOVERNING LAW.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law.

 

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, and further provided, that any such arbitration shall occur within the Borough of Manhattan in New York City.  Judgment upon any award made by the arbitrator may be entered in any court of competent jurisdiction.  Each party shall provide notice of any such dispute or controversy to the other party prior to the submission of such dispute or controversy to the applicable agency for arbitration.  Any such notice to the Advisor shall be dealt with in accordance with the Rules of the FSA to the extent such rules do not contradict the provisions of this Agreement (including, without limitation, Paragraph 13 or this Paragraph 14) or the rules of the CFTC or NFA.

 

  

  

  

15. NO THIRD PARTY BENEFICIARIES.  There are no third  party beneficiaries to this Agreement, except that certain persons not parties to this Agreement may have rights under Paragraph 6 hereof.

 

16. COUNTERPART ORIGINALS.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one agreement.  The delivery of a signed counterpart by facsimile or email shall be binding on the signatory.

 

 

  

  

  

 

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

 

	
  

	
ABINGDON FUTURES FUND L.P.

 

	
  

	
By:  Ceres Managed Futures LLC

 

	
  

	
 (General Partner)

 

	
  

	
By

	
  /s/ Walter Davis

	 

 

	
  

	
Walter Davis

 

	
  

	
President and Director

 

	
  

	
WINTON CAPITAL MANAGEMENT LIMITED

 

	
  

	
By

	
  /s/ Andrew Bastow

	 

 

	
  

	
Andrew Bastow

 

	
  

	
Director, Winton Capital Management

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