UBS MANAGED FUTURES PLATFORM ASSIGNMENT AGREEMENT
Exhibit 2.1
UBS
MANAGED FUTURES PLATFORM
__________________________________________
THIS
ASSIGNMENT AGREEMENT (this “Agreement”), dated as of the
26th
day of September, 2008, is entered into between ALPHAMETRIX, LLC, a Delaware
limited liability company (“Assignee”), UBS MANAGED FUND
SERVICES INC., a Delaware corporation (“Assignor”), and, with respect
to Section 7 only, UBS SECURITIES LLC, a Delaware limited liability company (the
“Clearing
Broker”).
W I T N E
S S E T H
WHEREAS,
Assignor is the manager and commodity pool operator of UBS Managed Futures LLC,
a series limited liability company organized under the laws of Delaware, and UBS
Managed Futures LLC (Aspect Series) which invests in UBS Managed Futures
(Aspect) LLC (collectively, the “Fund”);
WHEREAS,
Assignee is the manager, sponsor and commodity pool operator of an electronic
managed account platform;
WHEREAS,
Assignor desires to assign to Assignee all of Assignor’s manager’s interest in
the Fund contingent on the consent of investors in the Fund as provided herein
(the “Assignment”);
WHEREAS,
Aspect Capital Limited (the “Trading Advisor”) currently
serves as the sole commodity trading advisor, UBS Financial Services Inc.
(“UBS FS”) as the
exclusive selling agent and the Clearing Broker and UBS AG as the sole clearing
broker and foreign exchange dealer, respectively, of the Fund; and
WHEREAS,
the Trading Advisor and UBS FS both acknowledge this Assignment.
NOW,
THEREFORE, in consideration of the covenants, agreements and conditions set
forth herein, the parties agree as follows:
Section
1. Assignment.
1.1. Assignment. Subject
to the consent of existing members of the Fund (the “Consent”), as provided for
in its Limited Liability Company Agreement dated October 26, 2006, Assignor, in
accordance with the operative agreements of the Fund (including the Fund’s
Confidential Disclosure Document but excluding the Advisory Agreement dated as
of September 25, 2006 between the Trading Advisor and the Assignor, the “Operative Agreements”), hereby
assigns and delegates all of Assignor’s rights, titles and obligations under the
Operative Agreements to Assignee.
1.2. Acceptance of
Assignment. Assignee hereby accepts the Assignment, subject to
the Consent.
1.3. Effect of
Assignment. As of the Effective Date (as defined in Section
2.1) and subject to the Consent, Assignee shall assume all obligations as
“commodity pool operator” and sponsor of the Fund.
1.4. Exclusion of
Names. This Assignment specifically excludes any trade or
commercial name, corporate name or service ▇▇▇▇, including “UBS Managed Futures”
or any name similar to or including “UBS.”
Section
2. Effect.
2.1. Effective
Date. The Assignment will take place as of the 1st day of
November, 2008 or such other date as may be mutually agreed between Assignee and
Assignor (the “Effective
Date”), provided that the Assignor shall not make the Assignment until
the Assignor is satisfied that all regulatory, contractual and fiduciary
requirements for doing so, including obtaining the Consent, have been duly
satisfied. The Assignment shall be effective as of the close of
business on the Effective Date and shall apply to all economic entitlements
accruing after the Effective Date.
2.2. Effective Date
Deliveries. Subject to the satisfaction or waiver of all
conditions set forth in this Agreement, on the Effective Date each of Assignee
and Assignor shall deliver to the other an executed General Assignment and
Assumption in the form attached hereto as Exhibit A. Assignor shall
also deliver to the Assignee the Operative Agreements so that Assignee, with the
cooperation of the Assignor, may amend them to reflect Assignee’s admission, as
well as to include any mutually agreed-upon disclosure regarding the
Assignment. Assignor will deliver the Operative Agreements in advance
of the Effective Date in order to expedite the amendment of the Operative
Agreements.
2.3. Redemptions and
Subscriptions; Fees. On the Effective Date, in order to
consummate the transaction contemplated by this Agreement:
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(a)
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Assignor
Redemption: Assignor shall redeem its units of limited
liability company interest in UBS Managed Futures LLC (Aspect Series)
(“Units”) as of
the day prior to the Effective Date in the following
manner. The Fund shall estimate the net asset value of
Assignor’s Units as of the day prior to the Effective Date and shall pay
to Assignor 90% of such amount within three business days after the
Effective Date, the remainder to be paid upon the determination of the
final net asset value but no later than as of the last day of the month in
which the Effective Date occurs.
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(b)
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Assignee
Subscription: Assignee shall subscribe for Units as of
the Effective Date, as manager and commodity pool operator, in an amount
sufficient for the Assignee to qualify as the “tax matters partner” of the
Fund under the Internal Revenue Code of 1986, as
amended.
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(c)
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Fees: The
Fund shall estimate the sponsor’s fee due Assignor from the Fund for the
month-end immediately prior to the Effective Date and shall pay to
Assignor 90% of such amount within three business days after the Effective
Date, the remainder to be paid upon the determination of the final
sponsor’s fee but no later than as of the last day of the month in which
the Effective Date occurs.
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Section
3. Representations and
Warranties of Assignor.
To induce
Assignee to enter into this Agreement and to consummate the transactions
contemplated herein, Assignor warrants and represents to Assignee, as of the
date hereof, as follows:
3.1. Organization. Assignor
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power to carry on its
business as heretofore conducted. Assignor has full corporate power
and authority to own and operate the Fund.
3.2. Authorization. Assignor
has full corporate power to execute, deliver and perform this Agreement and all
other instruments to be executed in conjunction with the execution of this
Agreement, and the execution, delivery and performance of this Agreement and
related instruments have been authorized by Assignor.
3.3. Enforceability. This
Agreement and all related instruments, when executed and delivered by Assignor,
will constitute valid and binding obligations of Assignor, enforceable against
Assignor in accordance with their respective terms.
3.4. No
Conflicts. Assuming satisfaction of all preconditions set
forth herein, including obtaining the Consent, the execution, delivery and
performance of this Agreement and all related instruments and the consummation
of the transaction contemplated herein by Assignor will not (i) conflict with
the conditions and provisions of, result in a breach of, constitute a default
with respect to the Certificate of Incorporation and By-Laws of Assignor or any
permit, judgment, order or other instrument or agreement by which Assignor is
bound, or any statute or regulatory or self-regulatory provision affecting
Assignor, (ii) result in the imposition of a lien or other encumbrance against
any part of the Fund, or (iii) require the approval of, authorization of any
third party, governmental agency or regulatory or self-regulatory
authority.
Section
4. Representations, Warranties
and Acknowledgments of Assignee.
To induce
Assignor to enter into this Agreement and to consummate the transaction
contemplated herein, Assignee represents, warrants and acknowledges to Assignor,
as of the date hereof, as follows:
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4.1. Organization. Assignee
is a limited liability company duly organized and in good standing under the
laws of the State of Delaware. Assignee has full authority to own and
lease property and to carry on the contemplated business.
4.2. Authorization. Assignee
has full power and authority to execute, deliver and perform this Agreement and
all other instruments to be executed in conjunction with this
Agreement. The execution, delivery and performance of this Agreement
and all related instruments have been duly authorized by Assignee.
4.3. Registrations. Assignee
is duly registered under the Commodity Exchange Act with the Commodity Futures
Trading Commission (“CFTC”) as a commodity pool
operator and commodity trading advisor, is a member of the National Futures
Association (“NFA”) in
such capacities and, is, except with respect to registration as a “transfer
agent” as discussed below, in compliance with such other registration and
licensing requirements as shall be necessary to enable it to perform its
obligations hereunder. Assignee acknowledges that the Units are
registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, as a
result, (i) either Assignee must be registered as a “transfer agent” with the
Securities and Exchange Commission as required under the Exchange Act or
Assignee must engage a party so registered in order to process, among other
things, subscriptions, redemptions and transfers of Units, and (ii) Assignee
must make certain filings on behalf of the Fund, including but not limited to an
annual Form 10-K, and a Form 3 must be filed immediately following the Effective
Date by Assignee and certain of Assignee’s personnel as required under the
Exchange Act. In connection with the foregoing, Assignee represents
that it will either register as a transfer agent as described above or engage a
third party so registered to serve as the Fund’s transfer agent prior to the
Effective Date.
4.4. 2009
Audit. Assignee acknowledges that, as a result of the Units
being registered under the Exchange Act, the Fund will be subject to the auditor
attestation requirement of Section 404(b) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as
amended.
4.5. Enforceability. This
Agreement and all related instruments, when executed and delivered by Assignee,
will constitute the binding and valid obligations of Assignee enforceable
against Assignee in accordance with their terms.
4.6. No
Conflicts. Assuming satisfaction of all preconditions set
forth herein, including obtaining the Consent, the execution, delivery and
performance of this Agreement and all related instruments and the consummation
of the transaction contemplated herein by Assignee will not (i) conflict with,
result in a breach of or constitute a default under the Certificate of Formation
or other governing documents of Assignee or any permit, judgment, order or other
instrument or agreement to which Assignee is a party or is bound, or any statute
or regulatory or self-regulatory provision affecting Assignee or (ii) require
the consent or approval of any third party, governmental authority or regulatory
or self-regulatory agency.
4.7. No Finder’s
Fee. Neither Assignee nor any party acting on its behalf has
paid or will be obligated to pay any fee or commission to any broker or other
intermediary on account of the transaction contemplated by this
Agreement.
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4.8. Supplemental
Information. Supplemental information relating to the Assignee
contained in the supplement attached hereto as Exhibit B (the “Supplement”), which has been
furnished by the Assignee, is complete and accurate in all material respects and
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
in each case in light of the circumstances under which such statement is
made.
4.9. Disclosure of this
Agreement. Assignee acknowledges that this Agreement shall be
required to be disclosed in a public filing made pursuant to the Exchange
Act.
Section
5. Covenants of the
Assignee.
5.1. Retention of Trading Advisor
and UBS FS. Assignee has independently determined to retain
after the Effective Date the Trading Advisor as the sole commodity trading
advisor and UBS FS as the exclusive selling agent of the Fund.
5.2. Retention of Selling Agent,
Clearing Broker and F/X Dealer. Assignee will retain UBS FS as
an exclusive selling agent for the Fund on such terms as are currently
applicable to UBS FS and until such time as otherwise mutually agreed by UBS FS
and Assignee. Assignee also will retain the Clearing Broker and UBS
AG as the primary clearing broker and foreign exchange dealer, respectively, for
the Fund on such terms (including both commission rates and interest income
arrangements) as are currently applicable to the Clearing Broker and UBS AG and
until such time as otherwise mutually agreed by the Clearing Broker or UBS AG,
as applicable, and Assignee, or as otherwise determined to be necessary by
Assignee to protect the interests of the Fund in Assignee’s commercially
reasonable discretion.
5.3. Retention of Auditor and
Administrator. Through the completion of the 2008 audit of the
Fund, the delivery of the 2008 Schedules K-1 and the filing of the 2008 10-K for
the Fund, the Fund shall continue to retain its current auditor and
administrator unless agreed otherwise in writing between Assignor and
Assignee.
Section
6. Actions Subsequent to the
Effective Date.
6.1. Records. As
soon as practicable after the Effective Date, Assignor shall deliver to Assignee
copies of all necessary records maintained by the Assignor relating to the Fund,
including, but not limited to audited financial statements, tax returns, lists
of names and addresses of members of the Fund, accounting records of the Fund,
all “blue sky” files, correspondence with members of the Fund and all records
required to be maintained by the commodity pool operator of a pool under CFTC
and NFA rules.
6.2. Name of the
Fund. Assignee shall change the name of the Fund promptly
after the Effective Date, unless otherwise agreed to by Assignor in
writing.
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6.3. Limited Liability Company
Filings. Assignee shall file an amended Certificate of
Formation for the Fund in Delaware, reflecting the new manager or sponsor, as
the case may be, and name and shall qualify the Fund to do business in
Illinois.
6.4. Regulatory
Filings. After the effective date, Assignee shall be
responsible for making all filings required pursuant to the Exchange Act, the
Commodity Exchange Act or any other applicable rule, regulation or law
(including but not limited to those referenced in Section 4.3 above) inclusive
of those filings related to actions taken prior to the Effective
Date.
6.5. Blue Sky
Filings. Assignee shall be responsible for making all “blue
sky” filings with respect to the sale of Units made after the Effective
Date.
6.6. Hiring of
Employees. Assignee shall give good faith consideration to
hiring one or more of the employees listed on the Schedule hereto.
Section
7. Indemnification.
7.1. Indemnification by the
Clearing Broker. The Clearing Broker shall indemnify and hold
Assignee harmless from and reimburse it against any damage, loss, cost,
liability or expense (including reasonable attorneys’ and accountants’ fees and
expenses, court costs and amounts paid in any settlement) (collectively, “Liability”) incurred by
Assignee after the date hereof arising from (i) any claim, demand, liability,
loss, fine or obligation relating to the events which occurred or failed to
occur on or before the Effective Date, or (ii) any breach of any representation
or warranty of Assignor contained herein.
7.2. Indemnification by
Assignee. Assignee shall indemnify and hold, jointly and
severally, Assignor and the Clearing Broker harmless from and reimburse them
against any Liability incurred by Assignor or the Clearing Broker arising or
resulting from (i) events which occurred or failed to occur after the Effective
Date (other than those which exist, arise or result from actions or inactions of
Assignor before the Effective Date), (ii) any breach of any representation or
warranty of Assignee contained herein and (iii) any marketing activities of
Assignee.
Section
8. Survival of
Obligations.
All
representations, warranties, covenants and obligations included in this
Agreement or related instruments shall survive the consummation of the
transaction contemplated by this Agreement pursuant to the terms
hereof.
Section
9. Notices.
All
notices or other communication required or permitted by this Agreement shall be
in writing and shall be delivered by registered or certified mail, return
receipt requested, addressed as follows:
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if
to Assignee:
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AlphaMetrix,
LLC
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▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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Attn: ▇▇▇▇▇
▇▇▇▇
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if
to Assignor:
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UBS
Managed Fund Services Inc.
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▇▇▇▇▇▇▇,
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Attn: ▇▇▇▇▇▇▇
▇▇▇▇▇
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with
a copy to:
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UBS Securities LLC | ||
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▇▇▇▇▇▇▇▇,
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Attn: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇
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with
a copy to:
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UBS Financial Services | ||
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▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇
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Attn:
▇. ▇▇▇▇▇▇▇
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if
to the Clearing
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Broker:
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UBS
Securities LLC
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇,
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Attn: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇
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Any party
may specify a different address by written notice to the other
parties.
Section
10. Termination.
Notwithstanding
anything contained herein to the contrary, this Agreement may be terminated at
any time prior to the Effective Date without any liability to the terminating
party: (a) by the Assignor; (b) by Assignee in the event of any
material breach by Assignor of any of the agreements, representations or
warranties contained herein; or (c) by Assignee or Assignor if the Effective
Date shall not have occurred on or before January 1, 2009.
Section
11. Other
Provisions.
11.1. Expenses. Each
party hereto will pay all costs and expenses incident to its negotiation and
preparation of this Agreement and to its performance and compliance with all
agreements and conditions contained herein; provided that any costs incurred as
a result of amendments made to the Operative Agreements as set forth in Section
2.2 that are not borne by the Fund shall be shared equally between the Assignor
and Assignee.
11.2. Severability. Each
of the parties to this Agreement agrees that each provision of this Agreement is
considered severable from every other provision. In the event any
provision is held invalid, void and unenforceable by a court of competent
jurisdiction, such provision will automatically be replaced by provisions which
are valid and enforceable. All remaining provisions shall remain
enforceable to the fullest extent permitted by law. It is the intent
of each of the parties to this Agreement that the rendering invalid of any
provisions shall not affect the
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rights
and obligations of each party under the remaining provisions or interfere with
the consummation of the transaction contemplated by this Agreement.
11.3. Successor and
Assigns. This Agreement may not be assigned by any party
without the written consent of the other parties. This Agreement
shall be binding upon and inure to the benefit of the parties hereto, their
successors and permitted assigns.
11.4. Entire
Agreement. The Exhibits and Schedule referred to in this
Agreement shall be construed with and as an integral part of this
Agreement. This Agreement, including the Exhibits and Schedule,
contains the entire understanding of the parties hereto with regard to the
subject matter contained herein and supersedes any and all prior agreements
among the parties with respect to such subject matter. This Agreement
may only be modified or supplemented by the parties by mutual agreement in
writing. The failure of any party to this Agreement to enforce any
provision of this Agreement shall not be construed to be a waiver of such
provision or any part thereof. No waiver of any breach of any
provision of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
11.5. Access to
Records. For a period of five years after the Effective Date,
Assignee and its authorized agents shall have reasonable access to all of the
books and records relating to the Fund maintained by Assignor or its affiliates
upon provision of reasonable notice during normal business
hours. Assignee shall be responsible for costs incurred by it
pursuant to this Section 11.5. If Assignor desires to dispose of such
books and records prior to the expiration of such period, it shall give Assignee
a reasonable opportunity to segregate and remove, at Assignee’s expense, such
books and records as Assignee may select prior to disposing of these
items. Assignee agrees to extend to Assignor, its affiliates or their
designees access to records concerning the Fund maintained by Assignee on
similar terms.
11.6. Governing Law;
Forum. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CHOICE OF LAW RULES, AND ALL PARTIES CONSENT TO THE EXCLUSIVE JURISDICTION OF
THE FEDERAL OR STATE COURTS LOCATED IN CHICAGO, ILLINOIS, U.S.A.
11.7. Counterparts. This
Agreement may be executed in two or more counterparts, each of which when so
executed shall be deemed an original, but all of which shall constitute one and
the same instrument and shall become binding when one or more counterparts have
been signed by each of the parties hereto and delivered to each of the other
parties hereto.
11.8. Headings. The
headings of the sections herein are inserted as a matter of convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Agreement.
11.9. Representation. The
parties acknowledge that Assignor has been represented by Sidley Austin LLP in
connection with the preparation and negotiation of this
Agreement. While Sidley Austin LLP also represents Assignee on
certain matters, the parties acknowledge that Sidley Austin LLP has not
represented Assignee with respect to the preparation and negotiation of this
Agreement and that Assignee has been represented by separate
counsel.
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11.10. Compliance with
Law. The Assignor may, but shall have no obligation to, take
any action which the Assignor determines necessary or advisable to ensure that
the transactions contemplated hereby are not in violation of law. The
Assignor shall not, however, be liable or responsible for any such violation
unless due to Assignor’s gross negligence, bad faith or willful
misconduct.
11.11. The Trading
Advisor. Although the Trading Advisor acknowledges this
Agreement, the Trading Advisor is not bound by this Agreement and this Agreement
does not supercede or amend any agreement between the Trading Advisor and any
party hereto.
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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first written
above.
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ALPHAMETRIX,
LLC
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By:
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/s/ ▇▇▇▇▇ ▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇▇▇▇ | |||
| Title: President | |||
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UBS
MANAGED FUND SERVICES INC.
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: President and Chief Executive Officer | |||
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By:
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/s/ | |
| Name: | |||
| Title: | |||
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UBS
SECURITIES LLC, with respect to Section 7 only and by way of consent
hereto.
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇ ▇▇▇▇▇ | |||
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Title:
Executive Director
Exchange Traded Derivatives, Legal
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Acknowledged
by:
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ASPECT
CAPITAL LIMITED
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By:
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/s/ Simon Rockall | |
| Name: Simon Rockall | |||
| Title: Director | |||
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UBS
FINANCIAL SERVICES INC.
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: Executive Director | |||
11
EXHIBIT
A
GENERAL
ASSIGNMENT AND ASSUMPTION
THIS
GENERAL ASSIGNMENT AND ASSUMPTION, dated as of the 1st day of
November, 2008, is entered into between ALPHAMETRIX, LLC, a Delaware limited
liability company (“Assignee”), and UBS MANAGED
FUND SERVICES INC., a Delaware corporation (“Assignor”).
W I T N E
S S E T H:
WHEREAS,
Assignor is the manager and commodity pool operator of UBS Managed Futures LLC,
a series limited liability company organized under the laws of Delaware and UBS
Managed Futures LLC (Aspect Series) which invests in UBS Managed Futures
(Aspect) LLC (collectively, the “Fund”);
WHEREAS,
Assignee is the manager, sponsor and commodity pool operator of an electronic
managed account platform;
WHEREAS,
the Assignment Agreement among, inter alia, Assignee and
Assignor dated as of August [__], 2008 (the “Agreement”), requires Assignor
to transfer all Assignor’s manager’s interest in the Fund to Assignee and
requires Assignee to accept such assignment and assume certain obligations and
liabilities relating to the Fund.
NOW,
THEREFORE, for value received and in consideration of the foregoing and the
mutual undertakings of the parties hereinafter set forth, Assignee and Assignor
hereby agree as follows:
1. Assignment. Assignor
does hereby grant, bargain, sell, convey, assign, transfer, set over and deliver
to Assignee all of the Assignor’s right, title and interest in and to the Fund
and Assignee does hereby purchase and receive the Fund.
2. Assumption of
Liabilities. Assignee hereby accepts and assumes all
obligations and liabilities as manager and commodity pool operator of the Fund
that arise or result from events which occur or fail to occur after the date
hereof (except as otherwise provided in the Agreement).
3. Successors. The
provisions of this General Assignment and Assumption shall be binding upon and
shall inure to the benefit of the parties’ successors and assigns.
4. Amendment. This
General Assignment and Assumption shall not be amended or modified except by a
written agreement executed by the parties hereto.
5. Governing
Law. THIS GENERAL ASSIGNMENT AND ASSUMPTION SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CHOICE OF LAW RULES, AND ALL PARTIES CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN CHICAGO, ILLINOIS,
U.S.A.
6. Counterparts. This
General Assignment and Assumption may be executed in two or more counterparts,
each of which when so executed shall be deemed an original, but each of which
shall constitute one and the same instrument and shall become binding when one
or more counterparts have been signed by each of the parties hereto and
delivered to each of the other parties hereto.
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ALPHAMETRIX,
LLC
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By:
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| Title: | |||
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UBS
MANAGED FUND SERVICES INC.
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By:
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| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: President and Chief Executive Officer | |||
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By:
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| Name: | |||
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2
EXHIBIT
B
Supplement
UBS
MANAGED FUTURES LLC
SUPPLEMENT
DATED OCTOBER [•],
2008 TO
THE
CONFIDENTIAL DISCLOSURE DOCUMENT
DATED
APRIL 28, 2008
In
accordance with the rules of the Commodity Futures Trading Commission (the
“CFTC”), this supplement
(the “Supplement”)
updates certain information contained in Parts One and Two of the UBS Managed
Futures LLC (the “Platform”) Confidential
Disclosure Document dated April 28, 2008 (including Parts One and Two and the
supplement thereto dated May 23, 2008, collectively, the “Disclosure
Document”). All capitalized terms used herein have the same
meanings set forth in the Disclosure Document unless specified
otherwise. Current and prospective investors should review carefully
the contents of both this Supplement and the Disclosure Document.
In connection with a series of internal
reorganizations at UBS AG, UBS Managed Fund Services Inc. (“UBS MFS”) determined to no
longer act as a commodity pool operator of the Platform and the
Series. Consequently, UBS MFS had asked a number of outside service
providers for proposals to replace UBS MFS in its demonstrative role as the pool
operator of the Platform and the Series so that the Platform and the Series
could continue to operate as they have to date. After having reviewed
proposals from several candidates, UBS MFS has chosen AlphaMetrix, LLC (“AlphaMetrix” or the “Sponsor”) as the preferred
candidate to replace it. UBS MFS and AlphaMetrix signed an
Assignment Agreement (the “Agreement”) on September [•],
2008 and it is anticipated that AlphaMetrix would become commodity pool operator
of the Platform and Series effective as of November 1, 2008, or such other date
as may be agreed upon between AlphaMetrix and UBS MFS (the “Effective Date”), subject to
the consent of Members holding a majority of the value of the
Units.
Under the terms of the Agreement,
AlphaMetrix has agreed to: (i) retain Aspect Capital Limited as the Series’ sole
commodity trading advisor; (ii) retain UBS Financial Services Inc. as the
Series’ exclusive selling agent; (iii) retain UBS Securities LLC as the Series’
primary clearing broker; (iv) retain UBS AG as the Series’ primary foreign
exchange dealer and (v) retain the Series’ current administrator and auditor in
their same respective capacities through the end of the 2008 audit of the
Series, the delivery of the 2008 Schedules K-1 to the Series’ Members and the
filing of the Series’ Form 10-K for the fiscal year end, unless agreed otherwise
in writing between UBS MFS and AlphaMetrix. UBS MFS may
terminate the Agreement, without liability, at any time prior to the Effective
Date. In the event of any material breach of the Agreement by UBS MFS
prior to the Effective Date, AlphaMetrix may terminate the Agreement without
liability. The Agreement may be terminated without liability by
either party if the Effective Date has not occurred on or before January 1,
2009. UBS MFS does
not believe that the transition to AlphaMetrix will have any material effect on
investors. Pursuant to the Agreement, as soon as is practicable after
the Effective Date, AlphaMetrix will change the name of the Platform to
AlphaMetrix Managed Futures LLC and the name of the Series to AlphaMetrix
Managed Futures (Aspect) LLC.
It should be noted that UBS Financial
Services Inc., UBS Securities LLC and UBS AG are all affiliates of UBS
MFS. Furthermore, certain of the employees of UBS MFS will be
employed by AlphaMetrix in the future.
Unless
existing and potential investors are notified otherwise, effective November 1,
2008, the Disclosure Document will be deemed to be amended to reflect the
replacement of UBS MFS with AlphaMetrix as sponsor and commodity pool operator
of the Platform and the Series and to include the information regarding
AlphaMetrix, the Platform and the Series as set forth herein.
ALPHAMETRIX,
LLC
Introduction
It is anticipated that AlphaMetrix,
LLC, a Delaware limited liability company, will be the sponsor and commodity
pool operator of the Platform effective as of November 1, 2008 or such later
date as determined by UBS MFS and AlphaMetrix and notified to existing and
prospective investors. AlphaMetrix was formed in May
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2005, and
its principal office is located at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇; telephone: (▇▇▇) ▇▇▇-▇▇▇▇. AlphaMetrix has been
registered as a commodity pool operator (“CPO”) and commodity trading advisor
(“CTA”) with the CFTC, and has been a member of the National Futures
Association, since July 6, 2005. AlphaMetrix Group, LLC is listed as
a principal, and is the sole managing member, of AlphaMetrix, and ▇▇▇▇▇ ▇▇▇▇ is
the sole manager of AlphaMetrix Group, LLC. Although AlphaMetrix has
served and currently serves as the commodity pool operator and sponsor of
numerous exempt pools, such pools are traded by unaffiliated third party
managers. AlphaMetrix has not served as the trading advisor to such
pools or to any other managed assets, whether through funds or otherwise.1 Therefore, no
past performance information of accounts traded by AlphaMetrix is provided
herein as such performance (having been directed by unaffiliated third parties)
is not material to the Platform.
The principals of AlphaMetrix are not
currently invested in the Units and do not intend to invest in the Units,
although they may do so in the future. If admitted as pool operator,
AlphaMetrix will invest $10,000 in each Series in order to qualify as the “tax
matters partner” of each Series. ▇▇. ▇▇▇▇ and ▇▇. ▇▇▇▇ are
responsible for the operational decisions of the Platform.
AlphaMetrix and its respective
affiliates, principals and related persons (collectively, “AlphaMetrix Parties”) may
trade in commodities and securities for their own accounts as well as for the
accounts of their clients; although employees and principals of AlphaMetrix and
its affiliates are restricted from trading commodities (but not securities) for
their personal accounts. Records of this trading will not be
available for inspection by Members. Such persons may take positions
which are the same as or opposite to those held by the Series.
Principals
The principals of AlphaMetrix are
AlphaMetrix Group, LLC, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇. ▇▇.
▇▇▇▇ founded AlphaMetrix in April 2005, was approved as a principal on July 6,
2005, and is currently its President and Chief Executive Officer. In
such capacity, ▇▇. ▇▇▇▇ has overseen the development of AlphaMetrix’s
proprietary software and electronic managed account platforms that provide
transparency, advanced risk monitoring and efficient access to professional
futures and derivatives traders. Prior to founding AlphaMetrix, ▇▇.
▇▇▇▇ was the President and co-founder of Access Asset Management, a registered
CPO and CTA, from its formation in November 2000 through the founding of
AlphaMetrix in April 2005. Access Asset Management became
RQSI/Access, a Chicago-based division of ▇▇▇▇▇▇ Quantitative Systems, in August
2002. Initially, ▇▇. ▇▇▇▇’ primary focus at RQSI/Access was the
creation and development of the Emerging CTA Index (“ECI”). The ECI
allocated several hundred million dollars to over 100 CTAs and developed a
reputation as a major incubator for commodity traders. In addition,
▇▇. ▇▇▇▇ was instrumental in the development of customized alternative
investment cells for several institutional investors as well as providing
research and analysis to several fund of funds’ investment committees regarding
the allocation of capital among commodity trading
advisors. ▇▇. ▇▇▇▇ is frequently cited in industry publications as an
authority in the realm of alternative investments and is regularly invited to
speak at conferences on the subject of alternative investments. ▇▇.
▇▇▇▇ received a B.A. in Economics from ▇▇▇▇▇ University in 1993.
▇▇▇▇▇▇ ▇. ▇▇▇▇. ▇▇.
▇▇▇▇ joined AlphaMetrix in February 2008, was approved as a principal on
February 28, 2008, and is its Chief Operations Officer. He has
extensive marketing, operations and systems experience in the futures,
securities, options and banking industries, as well as in dealing with
international and domestic money center banks, brokerage firms, investment
advisors, pension funds, international government agencies and other financial
institutions. From March 1993 until joining AlphaMetrix, ▇▇. ▇▇▇▇
served as Senior Vice President and Director of Business Development for Rand
Financial Services, Inc. (“Rand”), a registered futures
commission merchant. While at Rand, ▇▇. ▇▇▇▇ was responsible for
expanding the firm’s institutional presence in the international and domestic
marketplace. ▇▇. ▇▇▇▇ was a member of the Chicago Board of Trade from
May 1984 until
___________________
1 As
indicated, AlphaMetrix has in the past operated and currently operates numerous
exempt pools managed by unaffiliated third parties. The performance
of these pools is not disclosed herein as such performance (having been directed
by unaffiliated third parties) is not material to the
Platform.
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February
1985, the Chicago Mercantile Exchange from April 1982 until May 1984 and again
from July 1992 until January 1993, the Chicago Board of Options Exchange from
December 1982 to April 1985 and the Philadelphia Stock Exchange from 1975 until
1977. He was president of the Chicago Operations Division of the
Futures Industry Association during the groups’ 1984 session. ▇▇.
▇▇▇▇ received his B.S. in Finance from DePaul University in 1970.
▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇.
▇▇▇▇▇ joined AlphaMetrix in March 2008, was approved as a principal on July 14,
2008, and is its Chief Financial Officer. ▇▇. ▇▇▇▇▇ served as a
consultant for Nature’s Best, a sports nutrition and protein beverages producer,
from December 2007 to February 2008, as Chief Financial Officer of Ultraguard
Corporation, a manufacturer of dual smoke/carbon monoxide detectors and wireless
monitor systems, from September 2005 to August 2007 and as Chief Financial
Officer for Old London Foods, Inc., a producer of branded crackers and co-packed
private label bread crumbs, from July 1997 until August 2007. From
September 2007 to December 2007, ▇▇. ▇▇▇▇▇ was self-employed as a financial
consultant. He possesses a broad range of expertise in financial
areas including control, planning, treasury, tax and audit and is a seasoned,
entrepreneurial senior financial executive with experience including private
equity, leveraged buy-outs and start-ups. ▇▇. ▇▇▇▇▇ received an
M.B.A. in Finance from the University of Chicago in 1979 and a B.A. in Economics
(▇▇▇▇▇▇▇▇ Scholarship) from the University of North Carolina in
1977.
Material
Litigation
Neither
AlphaMetrix nor any of its principals have been subject to any material
administrative, civil or criminal action, whether pending or concluded, within
the last five years.
ASPECT
CAPITAL LIMITED
As of May
8, 2008, ▇▇▇▇▇▇▇ ▇▇▇▇ is no longer a principal of Aspect Capital
Limited.
DEKLA
FINANCIAL, LLC
Introducing
Broker
Dekla
Financial, LLC (the “Introducing Broker”), an
affiliate of AlphaMetrix, is registered with the CFTC as an “introducing broker”
and may act, and with respect to the Series will act, as the introducing broker
for the Series’ futures and forward transactions. The existing terms
and expenses related to the trading activities of the Aspect Series will not
change, nor will the cost to the Series of utilizing the Clearing Broker as a
result of the engagement of the Introducing Broker. The Introducing
Broker, an affiliate of the Sponsor, receives a substantial portion of the
brokerage commissions paid by the Series, and the Sponsor negotiates the
per-transaction rates at which such brokerage commissions are
paid. The Introducing Broker does not currently, but may in the
future, receive a portion of the forward currency trading bid-ask spreads paid
by the Series, and the Sponsor will negotiate such bid-ask
spreads. The Sponsor negotiates the interest rates paid by the
Clearing Broker on the Series’ assets, and may receive a substantial portion of
the interest income generated by such assets. The Introducing Broker
may share in the EFP spreads paid by the Series.
The
Introducing Broker has not been involved in any material litigation within the
last five years.
ADDITIONAL
RISK FACTOR
Conflicts
of Interest
Each Series is subject to a number of
material actual and potential conflicts of interest, raising the possibility
that Members will be disadvantaged to the benefit of the Sponsor, the Trading
Advisors or their respective principals, key employees and
affiliates. Certain of the conflicts relate to the Sponsor and the
Introducing Broker
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negotiating
the fees and expenses paid by the Series while sharing in such fees and
expenses. No formal policies or procedures have been adopted to
resolve these conflicts.
ADDITIONAL
CONFLICTS OF INTEREST
The
Sponsor Negotiating Series Expenses in which the Sponsor Itself
Shares
The Sponsor negotiates brokerage
commissions, forward trading arrangements, interest income arrangements with the
Clearing Broker and advisory fees with the Trading Advisors and placement fees
with the selling agents. The Sponsor has a conflict of interest in
that the Sponsor in most cases shares in certain sources of revenue paid by the
Series, including brokerage commissions. This conflict is reflected
not only in the level of expense borne by the Series — the higher such expense,
the more there is for the Sponsor to share — but also in the selection of the
service providers for the Platform. Because the Introducing Broker,
which is an affiliate of the Sponsor, shares in the brokerage commissions and
may share in the interest income generated by the Series, the Sponsor has an
incentive to engage clearing brokers which are willing to make fee sharing
arrangements with the Introducing Broker.
Futures
and Forward Brokerage
In securities trading, the brokerage
and other transactions costs negotiated by an advisor for its clients are
subject to the principle of best price and execution, a fiduciary requirement
that effectively requires that these costs be negotiated at competitive
levels. No such requirement applies in futures and forward trading, in
which the transaction charges are entirely a matter of negotiation. The
brokerage commission rates charged to different Series, in fact, may vary
significantly. The Sponsor and the Clearing Broker will typically agree
upon a commission rate that generates sufficient revenue for the Introducing
Broker and the Clearing Broker. Accordingly, the Sponsor may have an
incentive to approve Trading Advisors which trade in high
volume. Similarly, in setting the per-transaction brokerage
commission rates to be paid by a Series, the Sponsor will generally agree to
higher rates on low volume Trading Advisors so as to increase the Introducing
Broker’s revenue sharing. Due to the material conflicts of interest
involved, each Member expressly consents to such costs as a condition of being
permitted to invest in any Series.
Brokerage
commissions vary depending on a Series’ volume of trading, whether the trading
is done on electronic exchanges, and other considerations. In negotiating
with the Clearing Broker, the Sponsor attempts not to have the Clearing Broker
raise its charges from those which they charge to other third parties as a
result of the revenue sharing paid to the Introducing Broker. However,
there can be no assurance that this will not in fact happen.
Interest
Income Arrangements
Commodity
brokers are not generally required to pay any interest to their clients on the
margin funds deposited with such commodity broker. The amount of interest,
if any, paid over to the client is entirely a matter of negotiation. In
the case of the Series, the Sponsor will negotiate the interest arrangements for
the Series, and the Introducing Broker may in the future retain a
portion of such interest. The interest retained by the Clearing Broker and
the Introducing Broker is a material component of their overall compensation for
providing services to the Series. Moreover, it is difficult to quantify
the full amount of the benefit which these parties receive from the retention of
interest earned on the Series’ assets, as it is difficult to know what their
costs of funding are or the uses to which they can put such capital while held
for margin.
CLEARING
BROKER: MATERIAL LITIGATION
Neither
UBS MFS nor any of its principals have ever been the subject of any material
litigation.
There
have been no administrative, civil or criminal actions, whether pending or
concluded, against the Clearing Broker or any of its individual principals
during the past five years which would be considered
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“material”
as that term is defined in Section 4.24(l)(2) of the regulations of the CFTC,
except as may be described below.
The Clearing Broker was involved in
the 2003 Global Research Analyst Settlement. This settlement is part
of the global settlement that the Clearing Broker and nine other firms have
reached with the SEC, FINRA, New York Stock Exchange (“NYSE”) and various state
regulators. As part of the settlement, the Clearing Broker has agreed
to pay $80,000,000 divided among retrospective relief, for procurement of
independent research and for investor education. The Clearing Broker
has also undertaken to adopt enhanced policies and procedures reasonably
designed to address potential conflicts of interest arising from research
practices.
The Clearing Broker is the defendant
in two purported securities class actions brought in the District Court of the
Northern District of Alabama by holders of stock and bonds in HealthSouth
Corporation.
On June 27, 2007, the Securities
Division of the Secretary of the Commonwealth of Massachusetts (the “Massachusetts Securities
Division”) filed an administrative complaint (the “Complaint”) and notice of
adjudicatory proceeding, captioned In The Matter of UBS Securities LLC, Docket
No. E-2007-0049, which alleges, in sum and substance, that the Clearing Broker
has been violating the Massachusetts Uniform Securities Act (the “Act”) and related regulations
by providing the advisers for certain hedge funds with gifts and gratuities in
the form of below market office rents, personal loans with below market interest
rates, event tickets and other perks, in order to induce those hedge fund
advisers to increase or retain their level of prime brokerage fees paid to the
Clearing Broker. The Complaint seeks to require the Clearing Broker
to permanently cease and desist from conduct that violates the Act and
regulations, to censure the Clearing Broker, to require the Clearing Broker to
pay an administrative fine of an unspecified amount, and to find as fact the
allegations of the Complaint.
On June 26, 2008, the Massachusetts
Securities Division filed an administrative complaint and notice of adjudicatory
proceeding against the Clearing Broker and UBS Financial Services, Inc. (“UBS Financial”), captioned In
the Matter of UBS Securities, LLC and UBS Financial Services, Inc., Docket No.
2008-0045, which alleges that the Clearing Broker and UBS Financial violated the
Act in connection with the marketing and sale of auction rate
securities. The complaint seeks a cease and desist order, rescission
of sales of auction rate securities at par (or restitution to investors who have
sold below par), and an administrative fine to be assessed.
On July 22, 2008, the Texas State
Securities board filed an administrative proceeding against the Clearing Broker
and UBS Financial in connection with the marketing and sale of auction rate
securities in Texas. The complaint alleges that the Clearing Broker
and UBS Financial violated the anti-fraud provision of the Texas Securities Act
and seeks an order by the Securities Commissioner suspending the Clearing
Broker’s and UBS Financial’s registrations with respect to some or all
activities in Texas until such time that all auction rate securities held by the
Clearing Broker and UBS Financial clients in Texas are liquidated at par
value. The complaint also seeks a cease and desist order and an
administrative fine to be assessed.
On July 24, 2008 the New York
Attorney General filed a complaint in Supreme Court of the State of New York
against the Clearing Broker and UBS Financial in connection with the Clearing
Broker’s and UBS Financial’s marketing and sale of auction rate
securities. The complaint alleges violations of the anti-fraud
provisions of New York state statutes and seeks a judgment ordering that the
firm buy back auction rate securities from investors at par, disgorgement,
restitution and other remedies.
On August 8, 2008, the Clearing
Broker and UBS Financial reached agreements in principle with the SEC, the New
York Attorney General (“NYAG”) and the North American
Securities Administrators Association (“NASAA”) on behalf of other
states including Massachusetts, to settle the charges relating to the Clearing
Broker’s and UBS Financial’s conduct underlying the marketing and sale of
auction rate securities. The specific settlement terms are being
finalized.
On August 14, 2008 the New Hampshire
Bureau of Securities Regulation filed an administrative action against the
Clearing Broker relating to a student loan issuer, the New Hampshire Higher
Education Loan Corp. (“NHHELCO”). The
complaint alleges fraudulent and unethical conduct in violation of New Hampshire
state statues. The complaint seeks an administrative fine, a cease
and desist order, and restitution to NHHELCO. The claim does not
impact the global settlement with the SEC, NYAG and NASAA relating to the
marketing and sale of
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auction
rate securities to investors.
Further, the Clearing Broker, like
most full-service investment banks and broker-dealers, receives inquiries and is
sometimes involved in investigations by the SEC, FINRA, NYSE and various other
regulatory organizations, exchanges and government agencies. The
Clearing Broker fully cooperates with the authorities in all such
requests.
The Clearing Broker will act only as
clearing broker for each Series and as such will be paid commissions for
executing and clearing trades on behalf of the Series. The Clearing
Broker has not passed upon the adequacy or accuracy of this Confidential
Disclosure Document. The Clearing Broker neither will act in any
supervisory capacity with respect to the Platform or any Series nor participate
in the management of the Platform or any Series.
The Clearing Broker is the futures
clearing broker for each Series but the Sponsor may execute or clear some or all
of the Series’ trades through other brokerage firms without notice to
Members. Specifically, the Sponsor may, but is not obligated to,
engage alternate clearing brokers to be utilized should the Sponsor determine
that the Clearing Broker is unable to effectively carry out its responsibilities
due to turbulent market conditions or otherwise.
*
* * * * * * * * *
This Supplement updates and supplements
the Disclosure Document with respect to the information contained herein only
and does not generally update the Disclosure Document.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this Supplement. Any representation to the contrary is a
criminal offense.
THE COMMODITY FUTURES TRADING
COMMISSION HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN THIS POOL NOR HAS
THE COMMISSION PASSED UPON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT
SUPPLEMENT.
Any
questions regarding this Supplement should be addressed to UBS Managed Fund
Services Inc. at (▇▇▇) ▇▇▇-▇▇▇▇.
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The undersigned hereby acknowledges
that the undersigned has received a copy of the UBS Managed Futures LLC
Supplement dated October [•],
2008 to the Confidential Disclosure Document dated April 28, 2008 (including the
supplement thereto dated May 23, 2008).
| INDIVIDUAL SUBSCRIBERS: | ENTITY SUBSCRIBERS: |
| _______________________________ | _______________________________ |
| (Name of Entity) | |
| _______________________________ | By:_______________________________ |
|
Signature
of Subscriber(s)
|
|
|
Title:___________________
(Trustee,
partner orauthorized officer)
|
|
Dated: ____________,
2008
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