<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________________ to ______________________
Commission file number: 33-80443
WILLOWBRIDGE STRATEGIC TRUST
- - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-7075398
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One New York Plaza, 13th Floor, New York, New York 10292
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 778-7866
N/A
- - --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check CK whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ____ No CK
<PAGE>
<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 1--FINANCIAL STATEMENTS
WILLOWBRIDGE STRATEGIC TRUST
(a Delaware Business Trust)
STATEMENT OF FINANCIAL CONDITION
MARCH 31, 1996
(Unaudited)
ASSET
<TABLE>
<S> <C>
Cash.................................................................................... $1,000
-------
-------
<CAPTION>
TRUST EQUITY
<S> <C>
General Interests--10 Interests outstanding............................................. $1,000
-------
-------
</TABLE>
The accompanying notes are an integral part of this statement.
2
<PAGE>
<PAGE>
WILLOWBRIDGE STRATEGIC TRUST
(a Delaware Business Trust)
NOTES TO STATEMENT OF FINANCIAL CONDITION
MARCH 31, 1996
(Unaudited)
A. General
Willowbridge Strategic Trust (the ``Trust'') was organized under the Delaware
Business Trust Statute on October 16, 1995 but had not commenced operations as
of March 31, 1996. The Trust will terminate on December 31, 2015 unless
terminated sooner as provided in the Second Amended and Restated Declaration of
Trust and Trust Agreement (the ``Trust Agreement''). The Trust was formed to
engage in the speculative trading of commodity futures, options and forward
contracts. The Trustee of the Trust is Wilmington Trust Company. The managing
owner is Prudential Securities Futures Management Inc. (the ``Managing Owner''),
a wholly-owned subsidiary of Prudential Securities Incorporated (``PSI''),
which, in turn, is a wholly-owned subsidiary of Prudential Securities Group Inc.
PSI is the principal underwriter and selling agent for the Trust's interests
(the ``Interests'') as well as the commodity broker (``Commodity Broker'') of
the Trust.
The Trust Agreement provides that at least 100,000 Interests at $100 per
Interest must be subscribed for and accepted during the Initial Offering Period
(as defined in the Trust Agreement) before Trust operations may commence. The
Trust is offering a maximum of $100,000,000 of limited interests. Following the
close of the Initial Offering Period, additional Interests will be offered
monthly at the then current net asset value per Interest until no later than two
years from the date of the prospectus (February 7, 1996) but in no event after
$100,000,000 in limited interests are sold (the ``Continuous Offering Period'').
A minimum initial contribution of $5,000 ($2,000 for an IRA account) is required
for each new limited owner unless the Managing Owner, in its sole discretion,
approves a contribution of a lesser amount. Existing limited owners will be
permitted to make additional contributions in increments of not less than $100
during the Continuous Offering Period.
Redemptions may occur monthly, on at least 10 days' prior written notice,
commencing with the end of the first full quarter of Trust trading activity.
Redemptions will be at the net asset value per Interest, however, Interests
redeemed on or prior to the end of the first and second successive six-month
periods after their purchase will be subject to a redemption charge of 4% and
3%, respectively, of the net asset value at which they are redeemed. These
redemption charges will be paid to the Managing Owner. Partial redemptions will
be permitted.
As of March 31, 1996, $1,000 had been contributed to the Trust by the
Managing Owner. The Managing Owner will contribute to the Trust an additional
amount between $100,000 and $1,009,000 depending upon the total number of
limited interests sold. In return, the Managing Owner will receive a
proportionate number of general interests and will have at least a 1% interest
in the profits and losses of the Trust. The Managing Owner will be required to
maintain at least a 1% interest in the Trust so long as it is acting as the
Managing Owner.
The Managing Owner, on behalf of the Trust, entered into an agreement (the
``Advisory Agreement'') with Willowbridge Associates Inc., an independent
commodity trading manager (the ``Trading Manager''). The Managing Owner will
make 100% of the Trust's assets available for trading by the Trading Manager,
however, the Managing Owner retains the authority to override trading
instructions that violate the Trust's trading policies. In its trading on behalf
of the Trust, the Trading Manager will initially allocate the Trust's assets to
the following five trading strategies: XLIM-50%, Argo-20%, and Titan, Vulcan,
and Siren-10% each. The Advisory Agreement is for an initial term of
approximately one year and may be renewed thereafter for additional successive
one-year terms. The Managing Owner retains the right to retain additional or
substitute commodity trading managers at its discretion.
B. Summary of Significant Accounting Policies
Basis of Accounting
The books and records of the Trust are maintained on the accrual basis of
accounting in accordance with generally accepted accounting principles.
3
<PAGE>
<PAGE>
Income Taxes
The Trust is not required to provide for, or pay, any federal or state income
taxes. Income tax attributes that arise from its operations will be passed
directly to the individual limited owners and the Managing Owner. The Trust may
be subject to other state and local taxes in jurisdictions in which it operates.
Profit and loss allocations and distributions
The Trust intends to allocate profits and losses for both financial and tax
reporting purposes to the limited owners and the Managing Owner monthly on a
pro-rata basis based on each owner's Interests outstanding during the month.
Distributions will be made at the sole discretion of the Managing Owner on a
pro-rata basis in accordance with the respective equity balances of the Managing
Owner and limited owners.
C. Fees
Organizational, Offering, General and Administrative Costs
PSI or its affiliates will pay the costs of organizing the Trust and offering
its Interests as well as administrative costs incurred by the Managing Owner or
its affiliates for services it performs for the Trust. These costs include, but
are not limited to, those discussed in Note D below. Routine legal, audit,
postage, and other third party costs also will be paid by PSI or its affiliates.
Management and Incentive fees
The Trust will pay the Trading Manager a monthly management fee of 1/4 of 1%
(3% per annum) of the Trust's Net Asset Value allocated to its management as of
the last day of each month and a quarterly incentive fee of 20% of such Trading
Manager's ``New High Net Trading Profits'' (as defined in the Advisory
Agreement).
Commissions
The Managing Owner, on behalf of the Trust, entered into an agreement (the
``Brokerage Agreement'') with PSI to act as Commodity Broker whereby the Trust
will pay a fixed monthly fee for brokerage services rendered. The monthly fee
will equal .64583 of 1% (7.75% per annum) of the Trust's Net Asset Value as of
the first day of each month. From this fee, PSI will pay all of the Trust's
execution (i.e., floor brokerage expenses, give-up charges and NFA, clearing and
exchange fees) and account maintenance costs, as well as compensation to
employees who sell Interests in the Trust.
D. Related Parties
The Managing Owner or its affiliates will perform services for the Trust
which will include but not be limited to: brokerage services, accounting and
financial management, registrar, transfer and assignment functions, investor
communications, printing and other administrative services.
One hundred percent of the proceeds of this offering will be received in the
Trust's name and deposited in cash in segregated trading accounts at PSI for as
long as the Trust's Brokerage Agreement with PSI remains in effect. PSI will
credit the Trust monthly with the interest earned on 80% of the equity in these
accounts and will retain the interest earned on the remaining 20%.
When the Trust engages in forward foreign currency transactions, it will
trade with PSI who will simultaneously engage in back-to-back transactions with
an affiliate who, pursuant to the Trust's prospectus, is obligated to charge a
competitive price.
E. Credit and Market Risk
Since the Trust's business will be to trade futures, forward and options
contracts, its capital will be at risk due to changes in the value of these
contracts (market risk) or the inability of counterparties to perform under the
terms of the contracts (credit risk).
Futures, forward and options contracts involve varying degrees of off-balance
sheet risk; and changes in the level of volatility of interest rates, foreign
currency exchange rates or the market values of the contracts (or commodities
underlying the contracts) will frequently result in changes in the Trust's
unrealized gain (loss) on open commodity positions reflected in the statements
of financial condition. The Trust's exposure to market risk will be influenced
by a number of factors including the relationships among the contracts to be
held by the Trust as well as the liquidity of the markets in which the contracts
are to be traded.
4
<PAGE>
<PAGE>
Futures and options contracts are traded on organized exchanges and are thus
distinguished from forward contracts which are entered into privately by the
parties. The credit risks associated with futures and options contracts are
typically perceived to be less than those associated with forward contracts
because exchanges typically provide clearinghouse arrangements in which the
collective credit (subject to certain limitations) of the members of the
exchanges is pledged to support the financial integrity of the exchange. On the
other hand, the Trust must rely solely on the credit of its broker (PSI) with
respect to forward transactions. The Trust will present unrealized gains and
losses on open forward positions as a net amount in the statement of financial
condition because it has a master netting agreement with PSI.
The Managing Owner will attempt to minimize both credit and market risks by
requiring the Trust's Trading Manager to abide by various trading limitations
and policies. The Managing Owner will monitor compliance with these trading
limitations and policies which include, but are not limited to, executing and
clearing all trades with creditworthy counterparties (currently, it is intended
that PSI will be the sole counterparty or broker); limiting the amount of margin
or premium required for any one commodity or all commodities combined; and
generally limiting transactions to contracts which are traded in sufficient
volume to permit the taking and liquidating of positions. The Managing Owner may
impose additional restrictions (through modifications of such trading
limitations and policies) upon the trading activities of the Trading Manager as
it, in good faith, deems to be in the best interests of the Trust.
PSI, when acting as the Trust's futures commission merchant in accepting
orders for the purchase or sale of domestic futures and options contracts, will
be required by Commodity Futures Trading Commission (``CFTC'') regulations to
separately account for and segregate as belonging to the Trust all assets of the
Trust relating to domestic futures and options trading and not to commingle such
assets with other assets of PSI. Part 30.7 of the CFTC regulations also will
require PSI to secure assets of the Trust related to foreign futures and options
trading. There are no segregation requirements for assets related to forward
trading.
F. Subsequent Event
On May 1, 1996, the Trust accepted subscriptions for 125,352 limited
interests and an additional 1,500 general interests and commenced its trading
activities. The proceeds to the Trust were $12,685,200.
5
<PAGE>
<PAGE>
WILLOWBRIDGE STRATEGIC TRUST
(a Delaware Business Trust)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
As of March 31, 1996 the minimum required capital of $10,000,000 raised by
the Trust through its public offering of Interests had not yet become available.
This caused the Trust to have limited funds on March 31, 1996. The Trust plans
to use the funds raised from investors by means of this offering of Interests
for the speculative trading of a portfolio consisting primarily of commodity
futures, forward and options contracts. On May 1, 1996 the Trust commenced its
trading activities with gross proceeds of $12,686,200. Additional Interests will
be offered monthly at the then current net asset value per Interest until no
later than two years from the date of the prospectus (February 7, 1996) but in
no event after $100,000,000 in limited interests are sold.
The Trust's net assets will be held in accounts at PSI. A significant portion
of the net assets will be held in cash which will be used as margin for the
Trust's trading in commodities. Inasmuch as the sole business of the Trust will
be to trade in commodities, the Trust will continue to own such liquid assets to
be used as margin. PSI will credit the Trust monthly with 80% of the interest it
earns on the equity in these accounts and will retain the remaining 20%.
The commodities contracts are subject to periods of illiquidity because of
market conditions, regulatory considerations and other reasons. For example,
commodity exchanges limit fluctuations in commodity futures contract prices
during a single day by regulations referred to as ``daily limits.'' During a
single day, no trades may be executed at prices beyond the daily limit. Once the
price of a futures contract for a particular commodity has increased or
decreased by an amount equal to the daily limit, positions in the commodity can
neither be taken nor liquidated unless traders are willing to effect trades at
or within the limit. Commodity futures prices have occasionally moved the daily
limit for several consecutive days with little or no trading. Such market
conditions could prevent the Trust from promptly liquidating its commodity
futures positions.
Since the Trust's business will be to trade futures, forward and options
contracts, its capital will be at risk due to changes in the value of these
contracts (market risk) or the inability of counterparties to perform under the
terms of the contracts (credit risk). The Managing Owner will attempt to
minimize these risks by requiring the Trust's Trading Manager to abide by
various trading limitations and policies. See Note E to the financial statements
for a further discussion of the credit and market risks associated with the
Trust's futures, forward and options contracts.
The Trust does not have, nor does it expect to have, any capital assets.
Future redemptions and contributions will impact the amount of funds
available for investment in commodity contracts in subsequent periods.
Results of Operations
Through March 31, 1996, the Trust had no operations.
6
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings--There are no material legal proceedings pending by or
against the Registrant or the Managing Owner
Item 2. Changes in Securities--None
Item 3. Defaults Upon Senior Securities--None
Item 4. Submission of Matters to a Vote of Security Holders--None
Item 5. Other Information--None
Item 6. (a) Exhibits--
3.1
and
4.1--Second Amended and Restated Declaration of Trust and Trust
Agreement of the Registrant dated as of December 14, 1995
(incorporated by reference to Exhibit 3.1 to 4.1 to the
Registrant's Registration Statement on Form S-1, File No.
33-80443, dated as of December 14, 1995)
4.2--Subscription Agreement (incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on
Form S-1, File No. 33-80443, dated as of December 14, 1995)
4.3--Request for Redemption (incorporated by reference to
Exhibit 4.3 to the Registrant's Registration
Statement on Form S-1, File No. 33-80443, dated as of
December 14, 1995)
10.8--Form of Foreign Currency Addendum to Brokerage
Agreement between the Registrant and Prudential
Securities Incorporated (filed herewith)
27.1--Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K--None
7
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WILLOWBRIDGE STRATEGIC TRUST
<TABLE>
<S> <C>
By: Prudential Securities Futures Management
Inc.A Delaware corporation, Managing Owner
By: /s/ Steven Carlino Date: May 15, 1996
----------------------------------------
Steven Carlino
Vice President
Chief Accounting Officer for the
Registrant
</TABLE>
8
<PAGE>
<PAGE>
FOREIGN CURRENCY ADDENDUM
This addendum ("Addendum) supplements the terms and conditions of
the Futures Account Client Agreement ("Agreement") entered into by and
between Willowbridge Strategic Trust ("Customer") and Prudential
Securities Incorporated ("PSI") as of ___________, 199__.
In consideration of PSI agreeing to enter into various forward and
spot foreign currency and foreign currency options transactions
(collectively "Forex Contracts") with Customer, the parties agree
as follows:
1. Relationship to Agreement. Except as otherwise provided in
this Addendum, the terms and conditions of the Agreement shall remain
in full force and effect, and shall apply to all Forex Contracts that
PSI may transact with Customer. If there are any conflicts between
the terms and conditions of the Agreement and this Addendum, the terms
and conditions of this Addendum will govern with respect to Forex
Contracts.
2. Forex Contracts. PSI and Customer will each act as principals
with respect to Forex Contracts. Forex Contracts will be transacted within
the non-regulated portion of Customer's PSI futures account. Customer
acknowledges that Forex Contracts are not traded on or guaranteed by a
regulated exchange or its clearing house and accordingly, acknowledges
that trading in Forex Contracts is not subject to the same regulatory
or financial protections as is trading in futures contracts. Customer
represents and warrants that (a) it is authorized to enter into Forex
Contracts, (b) it understands that as principal opposite PSI the parties
will each be relying on the creditworthiness of the other, (c) each
Forex Contract will be individually negotiated as to its material
economic terms, and (d) PSI will be entitled to rely on any instructions,
notices and communications that it reasonably believes to have originated
with any authorized representative of Customer, including a person with
a Power of Attorney over trading decisions, and Customer shall be
bound thereby.
3. Limits. This Addendum does not evidence a commitment of PSI
or Customer to enter into Forex Contracts generally or to enter into
any specific Forex Contract. PSI shall have the right to set limits
on the number of Forex Contracts that PSI will transact with Customer.
PSI reserves the right to increase or decrease such limits as, in PSI's
good faith judgment, market and economic conditions warrant, including
but not limited to the material change in Customer's credit rating or
Customer's country or sovereign rating by an internationally recognized
rating agency. Additionally, PSI reserves the right, exercisable at
any time when warranted by market conditions in PSI's sole discretion,
to refuse acceptance of Customer's orders.
4. Confirmations. Upon entering into a Forex Contract with
Customer, PSI shall verbally confirm the economic terms to Customer
followed by a written confirmation (via letter, telex, facsimile or
telecopier at PSI's election) (the "Confirmation) specifying the
amount of
<PAGE>
foreign currency bought or sold by Customer against U.S.
dollars or another foreign currency, the exchange rate, and the date
on which, and the location where, the currency is to be delivered.
Confirmations shall be conclusive and binding on Customer unless
Customer promptly notifies PSI of any objection within three (3) days
of receipt by Customer of the Confirmation.
5. Collateral; Settlement. PSI reserves the right to require
customer to deposit collateral with respect to Forex Contract
transactions. All Forex Contracts will be transacted pursuant
to a line of credit or will be otherwise collateralized at PSI's
option, and will be subject to the netting provisions set forth in
Section 8 below. All payments due under a Forex Contract shall be
made by wire transfer on the delivery date specified in the Confirmation
in immediately available funds in the designated currency. In the
event that either party's performance of its payment obligations
shall be interrupted or delayed by reason of war, riot, civil
commotion, sovereign conduct or other acts of state, the time of
performance of such party's obligations shall be extended for the
period of such interruption.
6. Dispute Resolution. Any dispute between Customer and PSI
relating to Customer's Forex Contracts shall be settled and determined
by an arbitration panel of either the New York Stock Exchange, the
National Association of Securities Dealers Inc., or the National
Futures Association as Customer may elect, or if the foregoing qualified
forums decline to arbitrate such dispute, before such forum as may be
agreed upon between the parties. At such time that PSI notifies Customer
of its intent to submit a claim to arbitration Customer will have seven
business days to elect a qualified forum for conducting the proceeding.
If Customer fails to notify PSI of its selection within seven business
days, PSI shall have the absolute right to make such selection.
7. Governing Law. The interpretation and enforcement of this
Addendum (and the Forex Contracts covered hereunder) and the rights,
obligations and remedies of the parties shall be governed by and
construed in accordance with the laws of the State of New York,
without regard to principles of choice of law.
8. Netting Provisions.
(a) Netting by Novation. Unless separately agreed and set out
in the Confirmation regarding a specific Forex Contract, each Forex
Contract made between Customer and PSI will immediately, upon its
being entered into, be netted with all then existing Forex Contracts
between Customer and PSI for the same paired currencies having the
same delivery date. Each Forex Contract containing an obligation to
deliver that has been netted pursuant to the foregoing shall immediately
be deemed cancelled and simultaneously replaced by a single transaction.
For purposes hereof, each Forex Contract shall be deemed a Forex
Contract from and after its inception for all purposes.
(b) Payment Netting. If on any delivery date more than one
delivery of a particular currency is to be made between Customer and
PSI pursuant to a Forex Contract,
2
<PAGE>
each party shall aggregate the amounts deliverable by it and only
the difference, if any, between these aggregate amounts shall be
delivered by the party owing the larger amount to the other party.
(c) Discharge and Termination of Options. Any call option or
any put option written by a party will automatically be terminated and
discharged, in whole or in part, as applicable, against a call option
or a put option, respectively, written by the other party, such
termination and discharge to occur automatically upon the payment
in full of the premium payable in respect of such options; provided
that such termination and discharge may occur only in respect of
options:
(i) each being with respect to the same put currency and
the same call currency;
(ii) each having the same expiration date and expiration time;
(iii) each being of the same style, i.e. both being
America Style options or both being European Style options;
(iv) each having the same strike price; and
(v) neither of which shall have been exercised by delivery
of a notice of exercise;
and, upon the occurrence of such termination and discharge,
neither party shall have any further obligation to the other party in
respect of the relevant options or, as the case may be, parts thereof
so terminated and discharged. In the case of a partial termination and
discharge (i.e., where the relevant options are for different amounts
of the currency), the remaining portion of the option that is partially
discharged shall continue to be a Forex Contract for all purposes of
this Addendum.
(d) The occurrence at any time with respect to a party of any of
the following events constitutes an event of default (an Event of
Default ) with respect to such party:
(i) Failure to Pay or Deliver. Failure by the party to make,
when due, any payment under this Addendum or delivery required to be
made by it if such failure is not remedied on or before the third
business day after notice of such failure is given to such party;
(ii) Breach of Agreement. Failure by the party to comply
with or perform any agreement or obligation under this Addendum if
such failure is not remedied on or before the third business day after
notice of such failure is given to the Defaulting Party:
3
<PAGE>
(iii) Failure to Provide Adequate Assurances. Failure
by Customer to provide adequate assurances of its ability to perform
any of its obligations under this Addendum within three business days
of a written request from PSI to do so when PSI has reasonable grounds
for insecurity;
(iv) Bankruptcy. The Party - (A) is dissolved (other than
pursuant to a consolidation, amalgamation or merger); (B) becomes
insolvent or is unable to pay its debts or fails or admits in writing
its inability generally to pay its debts as they become due; (C) makes
a general assignment, arrangement or composition with or for the
benefit of its creditors; (D) institutes or has instituted against
it a proceeding seeking a judgment of insolvency or bankruptcy or
any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors rights, or a petition is presented
for its winding-up or liquidation, and, in the case of any such
proceeding or petition instituted or presented against it, such
proceeding or petition (1) results in a judgment or insolvency or
bankruptcy or the entry of an order for relief or the making of an
order for its winding-up or liquidation or (2) is not dismissed,
discharged, stayed or restrained in each case within 30 days of the
institution or presentation thereof; (E) has a resolution passed for
its winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (F) seeks or becomes
subject to the appoint of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all of its assets; (G) has a secured
party take possession of all or substantially all of its assets or has
a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all of its
assets and such secured party maintains possession, or any such process
is not dismissed, discharged, stayed or restrained, in each case within
30 days thereafter; (H) causes or is subject to any event with respect
to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (A) to
(G) (inclusive); or (i) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any
of the foregoing acts.
(e) Close-Out Netting. If an Event of Default has occurred and
is continuing in respect of a party ("Defaulting Party"), the other
party ("Non-Defaulting Party") shall be entitled in its reasonable
discretion, immediately and at any time and upon notice (unless such
notice cannot practicably be provided in the circumstances) to close-out
all Defaulting Party's Forex Contracts, and may in its reasonable
discretion at any time or from time to time upon notice (unless such
notice cannot practicably be provided in the circumstances) liquidate
all or some of Defaulting Party's collateral in Non-Defaulting Party's
possession or control on any commercially reasonable basis and apply the
proceeds of such collateral to any
4
<PAGE>
amounts owing by Defaulting Party to Non-Defaulting Party resulting
from the close-out of such Forex Contracts. Any such close-out of
Forex Contracts shall be accomplished by the Non-Defaulting Party:
(i) closing-out each such Forex Contract so that each such
Forex Contract is cancelled and calculating settlement amounts
equal to the difference between the market value (as determined by PSI
in good faith) and contract value of the Forex Contract or, in the case
of options, settlement amounts equal to the current market premium for
a comparable option (as determined by PSI in good faith); (ii) discounting
each settlement amount then due to present value at the time of close-out
(to take into account the period between the date of close-out and the
maturity date of the relevant liquidated Forex Contract using an interest
rate equal to PSI's cost of funds as determined by PSI in good faith);
(iii) calculating an aggregate settlement payment in an amount equal
to the net amount of such discounted settlement amounts as is then due
from one party to the other; and (iv) setting off the settlement payments,
if any, that Non-Defaulting Party owes Defaulting Party as a result of
such liquidation and all collateral held by or for Non-Defaulting Party
against the settlement payments, if any, that Defaulting Party owes to
Non-Defaulting Party as a result of such close-out; so that all such
amounts are netted to a single liquidated amount payable by one party
to the other party, as appropriate, on the business day following the
close-out.
Notwithstanding anything to the contrary set forth above
regarding the Non- Defaulting Party's rights to close-out and value
Forex Contracts, if an event specified in clause (iv) of this sub-section
(d) has occurred, then upon the occurrence of such event, all outstanding
Forex Contracts will be deemed to have been automatically terminated as
of the time immediately preceding the institution of the relevant
proceeding, or the presentation of the relevant petition upon the
occurrence with respect to the party to such specified event.
The rights of PSI under this sub-section (e) shall be in
addition to, and not in limitation or exclusion of any other rights
that PSI may have (whether by agreement, operation of law or otherwise).
9. Liquidated Damages. The parties agree that the amount owing
by one party to the other party hereunder is a reasonable computation
of the loss or gain it would have incurred or received on the obligations
between the parties governed by this Addendum and is not a penalty.
Such amount is payable as liquidated damages to the other party for
the loss of the benefit of its bargains and neither party shall be
entitled to recover additional damages in respect of such loss of
the bargain. The determination of such amount shall be conclusive,
absent manifest error.
10. Understanding of Risks. Each party will be deemed to represent
to the other party on the date on which it enters into a Forex Contract
that it has the capability to evaluate and understand (on its own behalf
or through independent professional advice), and does understand, the
terms, conditions and risks of that Forex Contract and is willing to
accept those terms and conditions and to assume (financially and
otherwise) those risks.
5
<PAGE>
11. Termination. Each party may terminate this Addendum at
any time on three (3) business days prior written notice. No such
termination shall affect any Forex Contracts entered into prior to
such termination and this Addendum shall continue to govern any such
Forex Contract.
__________________________ ___________________________________
Date Name of Customer
By:_______________________________
Title: ___________________________
Signature:________________________
Accepted By Prudential Securities Incorporated
By:_____________________________ Date: ____________________________
Title:__________________________
Signature: _____________________
6
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Willowbridge Strategic Trust
and is qualified in its entirety by
reference to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0001005006
<NAME> Willowbridge Strategic Trust
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-1-1996
<PERIOD-END> Mar-31-1996
<PERIOD-TYPE> 3-Mos
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,000
<TOTAL-LIABILITY-AND-EQUITY> 1,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
