As Filed with the Securities and Exchange Commission on August 24, 2000
Registration No. 333-85755
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM S-1 - Post Effective Amendment No. 3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
DELAWARE
[State of organization]
6289 51-0387638
(Primary SIC Number) (I.R.S. EIN)
c/o Corporate Systems, Inc.
101 N. Fairfield Dr.
Dover, DE 19901
Telephone: (302) 697-2139
(address and telephone number of registrant's principal executive offices)
Ms. Shira Del Pacult
5916 N. 300 West
Fremont, Indiana 46737
Telephone: (219) 833-1306; Facsimile (219) 833-4411
(Name, address and telephone number of agent for service of process)
Copies to:
William Sumner Scott, Esquire
The Scott Law Firm, P.A.
940 NE 79th St., Ste. A
Miami, FL 33138
(305) 754-3603; Facsimile (305) 754-2668
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement
If any of the securities being offered on the Form are to be offered on a
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Class Amount being Maximum Offering Maximum Aggregate Amount of
of Securities Being Registered:(1) Price Per Unit: (2) Offering Price: Registration Fee:
Registered:
<S> <C> <C> <C> <C>
Limited Partnership 7,000 $1,000 $7,000,000 $1,946
Interests ("Units")
</TABLE>
(1) This amount is based upon the number of Units to be initially offered.
The exact number of Units issued will vary because of the issuance of
additional Units for interest earned during the Escrow period.
(2) This was the initial offering price. Trading has commenced and the
current offering price per Unit fluctuates each month to reflect
deductions for expenses and additions and subtractions for trading
results.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission acting pursuant to said
section 8(a), may determine.
*******************************************************************************
Prospectus
Bromwell Financial Fund, Limited Partnership
Post Effective Amendment No. 3 To Amend and
Fully Restate the Prospectus to Offer
7,000 Units of Limited Partnership Interest
To Be Sold at the Net Asset Value per Unit
Computed At the End of Each Month During the Offering
The Offering
The partnership is a registered commodity pool which employs independent
commodity trading advisors to trade futures and forward contracts.
The partnership is managed exclusively by two general partners, Belmont Asset
Management, Inc. and Mrs. Shira Del Pacult. We refer to them collectively as
"the general partner." The general partner may employ and terminate
commodity trading advisors introducing brokers and futures commission
merchants, as well as change the terms of their agreements with the
partnership.
Futures Investment Company will use its best efforts to sell the partnership
interests. No one has the obligation to purchase or support the price of the
partnership interests. You must purchase at least $25,000 in partnership
interests, though the general partner may reduce this to no less than $5,000.
You have the right to rescind your subscription for five days after it is
submitted. After five days, your subscription is irrevocable and you may
only withdraw from the partnership by redeeming your partnership interests.
See the redemption provisions in the partnership agreement and the discussion
of redemption in this prospectus.
All subscriptions received will be placed in an escrow account at Star
Financial Bank until they are accepted by us. Interest accrued on your
subscription amount will be used to buy additional partnership interests for
you. Partnership interests are offered for sale at their net asset value as
of the close of business on the last day of the month in which the
subscription is received and become effective on the open of business on the
first day of the subsequent month.
The Risks - These securities are highly speculative and involve a high degree
of risk. Consider carefully the risk factors below and the complete
description beginning on page 2 of this prospectus.
* Our business is the speculative trading in futures, commodity options and
unregulated currency contracts selected by professional commodity trading
advisors.
* This partnership pays substantial fixed management fees and commission
costs. There is no guarantee that you will receive a return on your
investment.
* The individual general partner is the principal of the general partner of
another commodity pool, Fremont Fund, LP, which has not been profitable for
the past three years.
* To receive your investment back after one year, the partnership must
generate a return of 32.21%.
* Transfer of your partnership interests will be restricted and there are
limitations on your right of redemption to surrender your partnership
interests in return for their value. No public market for the partnership
interests exists and none is expected to develop.
* This partnership will not make distributions. To receive a return on your
investment, you must use our redemption procedure.
* Although you will not receive distributions, you must pay Federal and
state income taxes on your share of any profits earned by this partnership.
* The general partner and affiliates have conflicts of interest with regard
to the management of this partnership.
* The general partner has limited experience in the management of commodity
pools.
You are required to make representations and warranties in connection with
this investment. Therefore, you are encouraged to discuss this investment
with your individual financial and tax advisers.
These securities have not been approved or disapproved by the Securities and
Exchange Commission, or any state securities commission or agency, nor have
any of them confirmed or passed upon the accuracy or adequacy of this
prospectus. 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 ON THE ADEQUACY OR
ACCURACY OF THIS DISCLOSURE DOCUMENT.
Initial Price Sales Commissions Proceeds to
to Public Partnership
Per Limited Net Asset Value 6% of Net Asset Value Net Asset Value
Partnership Unit plus 6%
Total Maximum $7,000,000 $374,732 $5,870,802
FUTURES INVESTMENT COMPANY
5916 N. 300 West - Fremont, Indiana 46737
Telephone: (219) 833-1306
Best Efforts Sales Agent/Broker-Dealer
Commodity Futures Trading Commission - Risk Disclosure Statement
YOU SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS YOU TO
PARTICIPATE IN A COMMODITY POOL. IN SO DOING, YOU SHOULD BE AWARE THAT
FUTURES AND OPTIONS TRADING CAN QUICKLY LEAD TO LARGE LOSSES AS WELL AS
GAINS. SUCH TRADING LOSSES CAN SHARPLY REDUCE THE NET ASSET VALUE OF THE
POOL AND CONSEQUENTLY THE VALUE OF YOUR INTEREST IN THE POOL. IN ADDITION,
RESTRICTIONS ON REDEMPTIONS MAY AFFECT YOUR ABILITY TO WITHDRAW YOUR
PARTICIPATION IN THE POOL.
FURTHER, COMMODITY POOLS MAY BE SUBJECT TO SUBSTANTIAL CHARGES FOR
MANAGEMENT, AND ADVISORY AND BROKERAGE FEES. IT MAY BE NECESSARY FOR THOSE
POOLS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS
TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THIS DISCLOSURE DOCUMENT
CONTAINS A COMPLETE DESCRIPTION OF EACH EXPENSE TO BE CHARGED THIS POOL AT
PAGE 2 AND A STATEMENT OF THE PERCENTAGE RETURN NECESSARY TO BREAK EVEN, THAT
IS, TO RECOVER THE AMOUNT OF YOUR INITIAL INVESTMENT, AT PAGE 2.
THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER FACTORS
NECESSARY TO EVALUATE YOUR PARTICIPATION IN THIS COMMODITY POOL. THEREFORE,
BEFORE YOU DECIDE TO PARTICIPATE IN THIS COMMODITY POOL, YOU SHOULD CAREFULLY
STUDY THIS DISCLOSURE DOCUMENT, INCLUDING A DESCRIPTION OF THE PRINCIPAL RISK
FACTORS OF THIS INVESTMENT, AT PAGE 2.
YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY POOL MAY TRADE FOREIGN FUTURES
OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE UNITED
STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET, MAY BE
SUBJECT TO REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION TO THE
POOL AND ITS PARTICIPANTS. FURTHER, UNITED STATES REGULATORY AUTHORITIES MAY
BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF REGULATORY AUTHORITIES OR
MARKETS IN NON-UNITED STATES JURISDICTIONS WHERE TRANSACTIONS FOR THE POOL
MAY BE EFFECTED.
[The balance of this page has been intentionally left blank]
[The balance of this page has been intentionally left blank]
Table of Contents
Commodity Futures Trading Commission - Risk Disclosure Statement i
Table Of Contents ii
Notice To All Purchasers v
Specific Notices vi
Notice To California Investors vi
Notice To Michigan Investors vi
Notice To Oregon Investors vi
Notice To Foreign Investors vi
Summary Of The Offering 1
The Partnership 1
Description Of Securities Offered For Sale 1
Plan For Sale Of Partnership Interests And Use Of Escrow 1
Subscription Procedure 1
Who Will Benefit From An Investment In The Partnership 1
Business Objectives And Expenses 1
Summary Risk Factors 1
Charges To The Partnership 2
Use Of Proceeds 2
Selection Of Commodity Trading Advisors And Allocation Of Equity 2
Federal Income Tax Aspects 2
Redemptions 2
Diagram Of Partnership Structure & Commissions Bromwell Financial Fund,
Limited Partnership 4
The Risks You Face 5
The individual general partner has only 3 years of prior operation
experience, and the corporate general partner has none. 5
We must pay substantial charges, which may limit your ability to receive a
return on your investment. 5
You may not transfer your partnership interests and must rely on our
redemption procedures to receive your investment back. 5
Your right of redemption is limited. 5
The partnership depends upon Mrs. Pacult, and her absence could cause the
partnership to cease operations. 5
General partner and commodity trading advisors will serve other businesses
and may not have adequate time to devote to the partnership. 6
This partnership has no operating history that you can review to determine
past performance. 6
There are conflicts of interest in the partnership structure which may limit
our profits. 6
You will be taxed on profits regardless of whether they are distributed. 6
You will have to pay taxes on profits in a current year which may be lost in
future years. 6
If the general partner selects new trading advisors, they may not be as
profitable as those replaced and the new advisors will not be responsible for
recouping any previous losses. 6
The general partner may change the commodity trading advisors and their
allocation of equity without notice. 6
You will not participate in management and may not contest the business
decisions of the general partner. 6
Commodity futures trading is speculative. 6
During partnership trading, a small price movement can lead to large losses.
7
The general partner does not control the trading advisors or their methods
and may not be able to prevent large losses. 7
The partnership may be unable to execute a trade before large losses are
incurred due to market illiquidity. 7
Changes in trading equity may adversely affect performance. 7
Failure of commodity brokers or banks could result in loss of assets. 7
When trading in foreign exchanges, if the creditworthiness of the other
parties is not maintained, we may lose the value of our positions in those
markets. 7
Options trading is highly risky and requires less equity to secure a trade,
thus providing greater potential for loss. 8
If the price of a contract changes dramatically, we may not be able to exit
the position without sustaining substantial loss due to government imposed
price limits. 8
We may not be able to compete with others with greater resources. 8
Resignation of Mrs. Pacult as a general partner and subsequent failure of
Belmont to maintain its net worth may cause suspension of trading or taxation
as a corporation. 8
The general partner will not advise you, and you must rely upon your own
investment counsel before investing in the partnership. 9
The partnership is not covered by the Investment Company Act of 1940. 9
Possibility of audit - you may be subject to audit and penalties. 9
General partner may settle irs claim not in your best interest. 9
You may be subject to back taxes and penalties. 9
The general partner may raise the incentive fee to 30% without prior notice
to you. 9
Conflicts Of Interest 9
General partner, the commodity trading advisors, and their principals may
preferentially trade for themselves and others. 10
Possible retention of voting control by the general partner may limit your
ability to control issues. 10
The general partner is not likely to resign, even if it would be in your best
interest. 10
Partnership fees may be higher than they would be if they were negotiated.
10
Our profitability may be limited due to competition among the traders for
similar trades and their unaccountability for previous losses. 10
Your ability to redeem your partnership interests may be lessened due to the
nature of the general partner's compensation. 10
Commodity trading advisors may engage in high risk trading to generate fees.
11
No resolution of conflicts procedures 11
Interests Of Named Experts And Counsel 11
Management's Discussion And Analysis 11
The Partnership 11
The General Partners 11
Experience 11
Authority 12
Partnership Books And Records 12
The Commodity Trading Advisors 12
The Advisory Contracts 12
Business Objective And Expenses 12
Explanatory Notes: 13
Securities Offered 13
You, The Investor: 14
Your Subscription Agreement And Check: 14
Management's Discussion 14
Description Of Intended Operations 14
Risk Control 14
Trading Risks 15
Fiduciary Responsibility Of The General Partner 15
Indemnification 16
Provisions Of Limited Partnership Agreement 16
Provisions Of Law 16
Provisions Of Federal And State Securities Laws 16
Provisions Of The Securities Act Of 1933 and NASAA Guidelines 16
Provisions Of The Clearing Agreement 16
Other Indemnification Provisions 17
Relationship With The Futures Commission Merchant And The Introducing Broker
17
Fixed Commissions Are Competitive 17
Relationship With The Commodity Trading Advisors 17
The Commodity Trading Advisors Will Trade For Other Accounts 17
Non-Disclosure Of The Commodity Trading Advisors' Methods 17
Charges To The Partnership 18
Compensation Of General Partner 18
Compensation Of The Commodity Trading Advisors 18
Restrictions On Management Fees 18
Fees To Futures Commission Merchant And Compensation Of Introducing Broker
18
Fee Paid By Partnership To The Introducing Broker 18
Brokerage Fees Paid By Introducing Broker To The Futures Commission Merchant
19
Trailing Commissions Paid To Others 19
Fee To Introducing Broker 19
Miscellaneous Fees To Futures Commission Merchant 19
Rights Of General Partner 19
Other Expenses 20
Charges To The Partnership 20
Investor Suitability 21
Potential Advantages 21
Equity Management 21
Investment Diversification 21
Limited Liability 21
Administrative Convenience 21
Access To The Commodity Trading Advisors 22
Use Of Proceeds 22
Determination Of The Offering Price 22
The General Partner 22
Identification 22
Shira Del Pacult 23
Ownership In Commodity Trading Advisors And Futures Commission Merchant 23
Trading By The General Partner; Interest In The Pool 23
No Prior Performance And Regulatory Notice 23
Trading Management 24
No Affiliation With Commodity Trading Advisors 24
Rights Of The General Partner With Respect To Commodity Trading Advisor
Selection And Allocation Of Equity 24
Performance Record Of The Partnership 24
The Commodity Trading Advisors 24
Ansbacher Investment Management, Inc. 24
Business Background 24
Description Of Trading Program 25
Performance Record Of The Commodity Trading Advisor 25
Ansbacher Investment Management, Inc. - General Program 26
Ansbacher Investment Management, Inc. - Retail Accounts 26
Mangin Capital Management, Inc. 27
Business Background 27
Description Of Trading Program 28
Performance Record Of The Commodity Trading Advisor 29
Performance Record Of Other Programs Sponsored By The General Partner 29
Performance Record Of Fremont Fund, Limited Partnership 29
Performance Record Of Atlas Futures Fund, Limited Partnership 30
Performance Record Of Auburn Fund, Limited Partnership 31
The Futures Commission Merchant 32
Federal Income Tax Aspects 33
Scope Of Tax Presentation 33
No Legal Opinion As To Certain Material Tax Aspects 33
Partnership Tax Status And Net Worth Of The General Partner 33
No Irs Ruling 34
Tax Opinion 34
Passive Loss And Unrelated Business Income Taxes Rules 35
Basis Loss Limitation 35
At-Risk Limitation 35
Income And Losses From Passive Activities 35
Allocation Of Profits And Losses 35
Taxation Of Futures And Forward Transactions 36
Section 988 Foreign Currency Transactions 36
Capital Gain And Loss Provisions 36
Business For Profit 36
Self-Employment Income And Tax 37
Individual Alternative Minimum Tax 37
Interest Related To Tax Exempt Obligations 37
Not A Tax Shelter 37
Taxation Of Foreign Partners 37
Partnership Entity-Audit Provisions-Penalties 37
Employee Benefit, Retirement Plans And Ira's 38
The Limited Partnership Agreement 38
Formation Of The Partnership 38
Units Of Partnership Interests 38
Management Of Partnership Affairs 38
Additional Offerings 38
Partnership Accounting, Reports, And Distributions 39
Federal Tax Allocations 39
Transfer Of Partnership Interests Only With Consent Of The General Partner
39
Termination Of The Partnership 39
Meetings 39
Redemptions 40
Plan For Sale Of Partnership Interests 40
The Selling Agent 40
Escrow 41
Subscription Procedure 41
Subscription Amounts 41
Revocation 41
Net Worth Tests 41
Investor Warranties 41
Legal Matters 42
Litigation And Claims 42
Legal Opinion 42
Experts 42
Additional Information 43
Financial Statements
A. Bromwell Financial Fund, Limited Partnership
Audited Financial Statements as of December 31, 1999 - Notes to Statement
of Financial Condition
Unaudited Financial Statements as of May 31, 2000
B. Belmont Capital Management, Inc.
Audited Financial Statements as of December 31, 1999 - Notes to Statement
of Financial Condition
Unaudited Financial Statements as of May 31, 2000
Appendix I - Commodity Terms And Definitions; State Regulatory Glossary
Exhibit A - Limited Partnership Agreement
Exhibit B - Request For Redemption
Exhibit C - Suitability Information
Exhibit D - Subscription Agreement And Power Of Attorney
Exhibit E - Escrow Agreement
Exhibit F - Investment Advisory Contract
Notice To All Purchasers
Until 90 days after the date hereof, all dealers effecting transactions in
the Units, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters or best efforts sellers.
The selling agent and additional sellers must also deliver any supplemented
or amended prospectus issued by the partnership.
No dealer, salesman, officer, employee or agent of the partnership or the
general partner and or any other person has been authorized, in connection
with this offering, to give any information or to make any representations
other than those contained in this prospectus and, if given or made, such
information or representations must not be relied upon as having been
authorized by the partnership, the general partner, the selling agents, or
any other person connected with this offering. This prospectus speaks as of
the date of its issuance. Neither the delivery of this prospectus nor any
sale made hereunder shall, under any circumstances, create any implication
that the information contained herein is correct as of any time subsequent to
the date hereof or that there has been no change in the affairs of the
partnership since the date of this prospectus. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any Units by
anyone in any state in which such offer, solicitation, or purchase is not
authorized or in which the person making the offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such
offer or solicitation.
The regulations of the Commodity Futures Trading Commission require that no
commodity pool operator may solicit, accept or receive funds, securities or
other property from a prospective participant in a commodity pool without
first delivering a disclosure document (this "prospectus") to such
prospective participant. The general partner must furnish all partners
annual and monthly reports complying with Commodity Futures Trading
Commission and National Futures Association requirements. The annual reports
will contain certified and audited, and the monthly reports unaudited,
financial information in regard to the operation of the partnership and its
general partner.
Bromwell Financial Fund, Limited Partnership, is not a mutual fund and is not
subject to regulation under the Investment Company Act of 1940. Consequently,
investors will not have the benefit of the protective provisions of such
legislation.
Investors must rely on their own examination of the issuer and the terms of
the offering, including the merits and risks involved. Investors should be
aware that they will be required to bear the financial risks of this
investment for an indefinite period of time. The Units may be sold,
assigned, transferred or otherwise disposed of only in accordance with the
terms of the limited partnership agreement, which includes the required
consent of the general partner. No public market exists or is expected to
develop for the Units and, consequently, prospective investors who desire
liquidity should not purchase the Units. Each investor (purchaser of Units)
must meet the following suitability standards: (i) an investor must have (a)
had an annual gross income in excess of $45,000 in the last calendar year and
reasonably expects to have gross income in excess of $45,000 for the current
year together with a net worth, exclusive of principal residence, home
furnishings, and automobile of $45,000; or (b) the investor has a net worth
(exclusive of principal residence, home furnishings and automobile) in excess
of $150,000; and (ii) the investor is represented by a purchaser
representative or otherwise demonstrates to the general partner sufficient
knowledge to accept the risks of this investment. A general partnership or
other entity making investment or the donor of a, qualified pension, profit-
sharing or Keogh employee plan, must meet the financial suitability
requirements prescribed for natural persons. "Accredited investors", as that
term is defined under regulation D of the act, who have a net worth in excess
of $1,000,000 are deemed to have such knowledge and experience in financial
business matters as to be capable of evaluating the merits and risks of the
proposed investment and, at the time of purchase of a $25,000 Unit, can
afford a complete loss.
The act and the securities laws of certain states grant purchasers of
securities sold, either in violation of the registration or qualification
provisions of such laws or within certain time limitations, the right to
rescind their purchase of such securities and to receive back their
consideration paid, plus interest. Many of these laws which grant the right
of rescission also provide that suits for such violations must be brought
within a specified time, usually one year from discovery of facts
constituting such violation. Should any investor institute an action on the
theory that the offering conducted as described herein was required to be
registered or qualified, the partnership will contend that the contents of
this prospectus provided notice of sufficient facts to commence the time from
which an action for rescission should have been brought. Also, should any
investor contend the offer was not qualified for presentation or the investor
not suitable to make such investment, the general partner will plead reliance
upon the information supplied by the investor in the subscription documents
and the information supplied by the general partner to the investor in this
prospectus.
Specific Notices
Notice to California Investors
California residents are required to have a liquid net worth of $225,000
(exclusive of home, furnishings and automobiles) or an annual income of
$60,000 and a liquid net worth of $60,000 (computed similarly as above) to be
able to purchase partnership interests in this commodity pool. The transfer
of the limited partnership interests offered and sold pursuant to this
offering can not be resold or transferred without permission of the general
partner and fulfillment of other terms and conditions contained in the
partnership agreement. Accordingly, (a) the limited partnership, as issuer
of a security upon which a restriction on transfer has been imposed must
cause a copy of rule 260.141.11 to be delivered to each issuee or transferee
of such security at the time the certificate evidencing the security is
delivered to the issuee or transferee; and, (b) it is unlawful for the holder
of any such security to consummate a sale or transfer of such security, or
any interest therein, without the prior written consent of the commissioner
(until this condition is removed pursuant to section 260.141.12 of these
rules), except as provided in the code. The certificates, whether upon
initial issuance or upon any transfer, shall bear on their face, in capital
letters of 10-point size, as follows: "it is unlawful to consummate a sale
or transfer of this security, or any interest therein, or to receive any
consideration therefore, without the prior written con-sent of the
commissioner of corporations of the state of California, except as permitted
in the commissioner's rules".
Notice to Michigan Investors
Investors who are residents of Michigan are required to have a net worth of
$225,000 or net worth of $60,000 and taxable annual income of $60,000 to be
eligible to invest in this offering of partnership interests in a commodity
pool. Net worth in all cases must be calculated exclusive of home, home
furnishings and automobiles. In addition, no more than ten percent (10%) of
the investor's net worth may be invested in this limited partnership.
Notice to Oregon Investors
Investors who are residents of Oregon are required to have a net worth of
$225,000 or net worth of $60,000 and annual income of $60,000 to be eligible
to invest in this offering of partnership interests in this commodity pool.
Notice to foreign investors
The securities have been registered with the United States Securities and
Exchange Commission and several selected states. However, the securities may
not be offered, sold, renounced or transferred, directly or indirectly, in
the United States of America, its territories, possessions, and all areas
subject to its jurisdiction ("United States" or in Canada (collectively,
"North America"), or to or for the benefit of any person who is a national
citizen or a resident or normally a resident thereof, the estates of such a
person or any corporation or other entity created or organized under any law
of the United states or Canada or any political subdivision thereof
(collectively referred to as "North American persons") unless (i) the
securities are duly registered under the applicable state act, or (ii) an
exemption from registration under the applicable state act and the company
has received an opinion of counsel to such effect reasonably satisfactory to
it, or (iii) such securities are sold on foreign exchange in accordance with
procedures approved by such foreign stock exchange.
Summary of the Offering
This summary is to assist your understanding of the offer. To be certain you
have a full understanding of the risks of this investment, you must carefully
review the entire document, including the exhibits.
The Partnership
Bromwell Financial Fund, Limited Partnership:
* is a Delaware limited partnership organized on January 12, 1999
* maintains its main business office at 5916 N. 300 West, Fremont, Indiana
46737, (219) 833-1306 with duplicate copies of its financial records kept
with James Hepner, CPA, 1824 N. Normandy, Chicago, IL 60635, (773) 804-0074
* is operated pursuant to a limited partnership agreement which is included
as Exhibit A
* The Partnership is managed and controlled by Belmont Capital Management,
Inc., a Delaware corporation, and Shira Del Pacult, which we collectively
refer to as the general partner.
The general partners employ independent professional trading managers called
commodity trading advisors to select trades for the partnership
Description of Securities Offered for Sale
By our prospectus dated May 26, 2000, we sold a total of $754,466.33 of
partnership interests. We are offering an additional $6,245,533.67, for a
total of $7,000,000 in units of limited partnership interest, at a value per
unit which was initially established by the general partner at $1,000. The
balance of the interests will be sold at the partnership's net asset value
per partnership interest on the close of business on the last day of the
month in which the subscription agreement is received.
Plan For Sale of Partnership Interests And Use of Escrow
All sales will be made through a broker dealer who will use its best efforts,
which means it will try, but not guarantee, to sell all the partnership
interests. To allow the general partner to review your subscription, an
escrow account will be used to hold your subscription from the date of
submission to the date you become a partner.
Subscription Procedure
To purchase partnership interests, you must:
* complete and execute a subscription agreement (Exhibit D), and deliver
your executed subscription documents and check for your investment, which
should be made payable to "Escrow Account for Bromwell Financial Fund, LP"
* pay for at least $25,000 in partnership interests, though the general
partner may reduce this amount to not less than $5,000.
And you must have at least:
* a minimum net worth, exclusive of your home, home furnishings and
automobiles, of $150,000, or
* a minimum annual gross income of $45,000 and a minimum net worth of
$45,000, both exclusive of your home, home furnishings and automobiles.
The State where you live may impose higher net worth and income requirements
before you may purchase partnership interests.
Who Will Benefit From An Investment In The Partnership
You are likely to benefit from an investment in the partnership if you want
to diversify your portfolio and if you have investment money available that
you can afford to lose without adverse consequences to your ability to
support your family and your lifestyle. You have the opportunity to
participate in markets which are typically not represented in most investors'
portfolios and which can be profitable in both rising and falling markets.
However, if you cannot afford the risk of losing your entire investment, you
should not invest in this partnership.
Business Objectives and Expenses
We are organized to be a commodity pool to engage in the speculative trading
of:
* futures and forward contracts, which are instruments designed to permit
producers to hedge or investors to speculate in various interest rates,
commodities, currencies, stock indices and other financial instruments
* options on futures and forward contracts, which give the purchaser the
right to acquire or sell a given contract at a specified time at a specified
price, and
* other financial instruments.
We do not anticipate you will receive distributions and cannot guarantee that
we will meet our objectives or avoid substantial losses.
We are subject to substantial charges. To return after one year an initial
investment at $1063.83 per unit of partnership interest, we must earn a
profit of 32.21%, or $ 342.66 per partnership interest. Although you will
not receive distributions, you will pay Federal, state and local taxes upon
the profits, if any.
Summary Risk Factors
Investment in the partnership interests is speculative, illiquid, and highly
risky. You should purchase partnership interests only if you can afford to
lose your entire investment. For a complete description of the risks of an
investment in the partnership, see the Risk Factors section beginning on page
2.
* Our business is the speculative trading in futures and forward contracts,
and options on those contracts, selected by professional commodity trading
advisors. This trading is highly leveraged and takes place in very volatile
markets.
* Past results of the commodity trading advisors and the general partner do
not guarantee future results.
* This partnership pays substantial fixed management fees and commission
costs. There is no guarantee that you will receive a return on your
investment.
* The individual general partner is the principal of the general partner of
another commodity pool, Fremont Fund, LP, which has not been profitable for
the past three years.
* Transfer of your partnership interests will be restricted and there are
limitations on your right of redemption to surrender your partnership
interests in return for their value. No public market for the partnership
interests exists and none is expected to develop.
* This partnership will not make distributions. To receive a return on your
investment, you must use our redemption procedure.
* Although you will not receive distributions, you must pay Federal and
state income taxes on your share of any profits earned by this partnership.
* The general partner and affiliates have conflicts of interest with regard
to the management of this partnership. Specifically, the general partner is
affiliated with the selling agent, and no due diligence will be performed.
* The general partner has limited experience in the management of commodity
pools.
Charges To The Partnership
The following table identifies who is paid by the partnership, what they do
for the partnership, and their rate of compensation:
<TABLE>
Entity Nature of Service Amount of Compensation
<S> <C> <C>
The general partner Manages the partnership 3% annual management fee, paid
(Belmont Capital monthly only to Belmont, of all
Management, Inc. and Mrs. equity assigned to all trading
Shira Pacult) advisors to trade. [$750+]
The commodity trading Makes trades for the partnership 1% annual management fee, paid
advisors monthly, of the equity assigned to
(Ansbacher Investment them to trade. [$250+]
Management, Inc. and
Mangin Capital Management, 20% quarterly incentive fee on all
Inc.) new net profits they have
generated (this includes all
profits generated during the
quarter, adjusted for changes in
trading equity and losses in
previous quarters)
The introducing broker Negotiates and pays trading 11% annual fixed fee, paid
(Futures Investment costs; assumes credit risk of monthly, on the assets on deposit
Company) the partnership to the futures with the futures commission
commission merchants merchants. 6/11 of this ($1,500+)
is paid to Mrs. Pacult as a
trailing commission for maintaining
investment in the partnership
[$2,750+]
The futures commission Accept trades from the These charges are paid by the
merchant advisors, clears the trades; introducing broker from the 11%
(Vision Limited hold the partnership's annual fee the partnership pays to
Partnership) trading equity it. Vision is paid a 4% annual
fixed fee, paid monthly, on all
equity on deposit with it to cover
the brokerage commissions, or the
costs of entering trades.
The selling agent Solicits investment in the You pay a 6% selling commission
(Futures Investment partnership when your purchase is accepted.
Company as a National [$1500+]
Association of Securities
Dealers registered
broker/dealer)
Lawyers and Accountants Continuing legal and accounting The annual accounting and legal
(The Scott Law Firm, P.A., work costs are estimated to be $18,000
Frank L. Sassetti & Co., and $5,000, respectively. [$821+]
James D. Hepner & Co.)
</TABLE>
+ Each $25,000 investment pays this amount per year for this particular
charge. When the charge is not based on a percentage, but rather a fixed
amount, we have computed that expense upon the partnership's net asset value
as of the date of this prospectus.
Use Of Proceeds
The partnership has paid $59,526 for offering expenses and $5,000 for
organizational expenses. Upon the sale of additional partnership interests,
we will charge the new limited partners their allocated portion of the
previously paid expenses to reimburse the prior partners. This will be done
as follows:
The incoming partners' subscriptions, less commissions, will be divided by
the amount of the total subscriptions, less commissions, made by both the
incoming and the prior partners to obtain the percentage of the costs to be
paid by all partners. This percentage will be multiplied by the organization
cost to produce the dollar amount to be deducted from the subscription of the
incoming partners. The cash produced by that deduction will be added to the
net asset value of the partnership. This will result in an increase in the
net asset value for all partnership interests previously sold. The cash
subscription amount remaining for each incoming partner will be used to
purchase partnership interests at the increased net asset value. The
incoming partners will join with the previously admitted partners to share in
the increase of net asset value that results from the admission of future
partners until either the maximum number of partnership interests are sold or
the offering terminates.
Initial partners in the partnership paid 8.62% of their subscription for
offering expenses at the time of distribution, and upon full subscription to
the fund all partners will have paid 0.92%.
The general partners will apply the remaining partnership assets toward
trading commodities and cash reserves.
Selection Of Commodity Trading Advisors And Allocation Of Equity
The general partner selects the commodity trading advisors which trade on our
behalf. The general partner has selected two trading advisors, Ansbacher
Investment Management, Inc and Mangin Capital Management, Inc. The trading
advisors are solely responsible for making trades, and neither the general
partner or you will approve the trades made by the partnership. The general
partner, without prior notice to you, may terminate or add trading advisors,
or change the amount of equity allocated to any or all advisors.
Federal Income Tax Aspects
Although you will not be paid distributions, you will have to pay income
taxes on profits and interest, if any.
Redemptions
You may request the general partner to accept the surrender of your
partnership interests for cash. The general partner will try to comply with
all redemption requests, but may not be able to do so because of insufficient
liquid assets. No redemptions will be made during the first 6 months of your
investment. We will charge 4% of the redeemed partnership interests' value
if you request redemption before the end of the 6th month. After the sixth
month, we will reduce the redemption fee by 1% for every 6 months you remain
in the partnership. See, The Limited Partnership Agreement, Redemptions.
[The balance of this page has been intentionally left blank.]
Diagram of Partnership Structure & Commissions
Bromwell Financial Fund, Limited Partnership
Please see the previous table under Charges to the Partnership for a
description of the below parties.
[Diagram omitted.]
The Risks You Face
Investment in the partnership interests is speculative, illiquid, and highly
risky. You should purchase partnership interests only if you can afford to
lose your entire investment. All of the following risks, except payment of
fixed expenses, are present without regard to the amount of partnership
interests sold.
The individual general partner has only 4 years of prior operation
experience, and the corporate general partner has limited experience.
Belmont Capital Management, Inc., the corporate general partner, is a
recently formed Delaware corporation. It has not previously operated a
commodity pool or engaged in any other business, and has only operated this
pool since July 11, 2000. Mrs. Pacult, the other general partner, is the
individual general partner of another commodity pool, Atlas Futures Fund, LP,
which commenced business on October 15, 1999. Mrs. Pacult also currently
manages the corporate general partners of two other public commodity pools,
Fremont Fund, LP and Atlas Futures Fund, LP. She has operated Fremont Fund
for 4 years. She also has over nineteen years of experience selecting
commodity trading advisors and explaining to investors how individual managed
futures accounts are administered.
We must pay substantial charges, which may limit your ability to receive a
return on your investment.
We must pay substantial charges, which must be paid before you will realize a
profit. They are:
* fixed brokerage commissions of 11% per year upon the assets on deposit
with the futures commission merchant
* a sales commission of 6% to the selling agent and yearly trailing
commission of 6% to the introducing broker
* a management fee to the general partner of 3% per year of our net assets
* a management fee on the equity assigned to the commodity trading advisors
of 1% per year
* yearly expenses estimated at $23,000, of which $18,000 is paid for
accounting and audit services and $5,000 is paid for legal services
* variable operating expenses such as incentive fees to the commodity
trading advisors, telephone, postage, and office supplies, and
* extra-ordinary expenses such as claims and defense of claims from brokers,
partners, and other parties.
The incentive fees are determined on a quarterly basis and are paid to the
commodity trading advisors. We may be subject to substantial incentive fees
in the initial quarters of any given year which will not be refunded, even if
we experience subsequent losses which produce a net loss for that year. See
Charges to the Partnership.
You may not transfer your partnership interests and must rely on our
redemption procedures to receive your investment back.
You can assign or transfer your partnership interests only with the consent
of the general partner, which will be granted only to immediate members of
the family, upon death of the owner or other limited circumstances. See The
Limited Partnership Agreement, Transfer Of Units Only With Consent Of The
General Partner and the Limited Partnership Agreement (Exhibit A).
Therefore, you must rely on our redemption procedures to receive your initial
investment adjusted to reflect profits, payment of expenses, and losses. See
The Limited Partnership Agreement, Redemptions.
Your right of redemption is limited.
Our redemption procedures provide:
* the redemption amount will be based upon the net asset value of the
partnership interests as calculated at the end of the month in which the
redemption request is received
* you will be charged a fee that decreases with time over the first two
years of your investment
* it must be approved by the general partner, and
* it may not be granted if we do not have enough liquid assets.
Subject to the foregoing limitations, the general partner attempts to grant
all redemption requests within twenty days after the last day of the month in
which the redemption request was received. You may be prevented from
redeeming your partnership interests before they are significantly devalued.
See The Limited Partnership Agreement, Exhibit A, Redemptions.
Further, substantial redemption requests could adversely affect us by:
* the liquidation of positions too rapidly or on unfavorable terms which
prevent us from satisfaction of all redemption requests, or
* the reduction of our available trading equity at a time when we have an
opportunity to earn substantial profit.
The partnership depends upon Mrs. Pacult, and her absence could cause the
partnership to cease operations.
You will be relying entirely on the ability of the general partner to select
and monitor the commodity trading advisors selected for the partnership.
Mrs. Pacult is the individual general partner and the sole principal and
officer of the corporate general partner.
If Mrs. Pacult becomes unable to perform her duties, we could be required to
cease operations and trading until a replacement is found.
General partner and commodity trading advisors will serve other businesses
and may not have adequate time to devote to the partnership.
Both general partners expect to manage additional pools in the future which
may use one or more of the commodity trading advisors. Thus, they may use
trading methods similar to ours. They may also use Futures Investment
Company, the introducing broker, to negotiate better terms for clearing and
other services. The commodity trading advisors currently manage other
commodity accounts and may manage new accounts, including personal accounts
and other commodity pools. Although the commodity trading advisors intend to
use similar trading methods for all accounts they manage, they may vary those
methods slightly. We cannot guarantee our trading results will be similar to
or better than any of the trading advisors' other accounts. Our business
could be adversely affected by the failure of either Mrs. Pacult, who is the
individual general partner and also the sole principal of the corporate
general partner, or the trading advisors to devote sufficient time to the
partnership affairs. See Risk Factors, Trading Management, and The Commodity
Trading Advisors.
This partnership has no operating history that you can review to determine
past performance.
We commenced business on July 11, 2000 and, therefore, do not have an audited
performance history of generating profits or losses. Though we provide the
performance histories for other accounts managed by the commodity trading
advisors who select our trades, their past performance does not guarantee
future results of this partnership.
There are conflicts of interest in the partnership structure which may limit
our profits.
Before investing in this partnership, you must consider the actual and
potential conflicts of interest that exist in our structure and operation.
Specifically, Mrs. Pacult is also a principal of Futures Investment Company,
the introducing broker and selling agent. Therefore, the general partner
will probably not replace Futures Investment Company as the introducing
broker because:
* it is paid 11% in fixed commissions to pay round-turn brokerage
commissions and trailing commissions and
* the selling agent pays her 6% in trailing commissions.
In addition, because the selling agent is affiliated with the general
partner, no independent due diligence of this offering will be conducted for
your protection. See Risk Factors, Conflicts of Interest, and the Limited
Partnership Agreement (Exhibit A).
You will be taxed on profits regardless of whether they are distributed.
We do not intend to make cash distributions from profits. Regardless of
whether distributions have been made, if we realize profits for a fiscal
year, you will pay taxes.
You will have to pay taxes on profits in a current year which may be lost in
future years.
We might sustain losses which offset our profits after the end of the year.
So you might never receive a distribution equal to your share of our prior
year's taxable income. See Federal Income Tax Aspects and The Limited
Partnership Agreement (Exhibit A).
If the general partner selects new trading advisors, they may not be as
profitable as those replaced and the new advisors will not be responsible for
recouping any previous losses.
We rely upon two commodity trading advisors to generate profits pursuant to
two Advisory Contracts and Powers of Attorney (Exhibits F and G). Either the
general partner or a trading advisor may terminate their relationship at any
time. If this happens, or if the trading advisors become unable to serve us
for any other reason, the general partner would have to find one or more
alternate trading advisors. We cannot guarantee that any alternate trading
advisors will trade as profitably as the original trading advisors, or that
they will be retained on terms which are as favorable. Also, any new trading
advisors will not be obligated to recoup losses, if any, incurred by the
prior trading advisor before they are paid incentive fees.
The general partner may change the commodity trading advisors and their
allocation of equity without notice.
Without prior notice to you, the general partner may change the commodity
trading advisors and the amount of equity allocated to them at any time, for
any reason.
You will not participate in management and may not contest the business
decisions of the general partner.
You may not manage or conduct our business in any way or you would be deemed
a general partner, which is not allowed by the Limited Partnership Agreement
(Exhibit A). Accordingly, you are bound by the business decisions of the
general partner.
Commodity futures trading is speculative.
Commodity futures, forward, and option contract prices are highly volatile.
Specifically:
* price movements are influenced by such unpredictable variables as: changes
in supply and demand; weather; agricultural trade, fiscal, monetary and
exchange control programs and policies of governments; national and
international political and economic events; and, changes in interest rates,
governments, exchanges, and other market authorities intervene to influence
prices
* even if the analysis of the fundamental conditions by a commodity trading
advisor is correct, prices still may not react as predicted
* it is possible for most of our open positions to be unprofitable at the
same time
* price changes may reach a limit upon which trading rules require a
suspension of trading for a specified period of time. It is possible for
these limits to be reached in the same direction for successive days. This
may prevent us from exiting a position, and when the market reopens, we could
suffer a substantial loss on the position.
* losses are not limited to the margin allocated to hold the position and
may exceed the total equity in our account.
During partnership trading, a small price movement can lead to large losses.
A small amount of money, called margin, must be deposited to hold or short a
contract relative to its value. The margin amount is typically between 3%
and 20%. This permits a large percentage gain or loss relative to the margin
deposit. For example, if at the time of purchase, 5% of the futures contract
price is deposited as margin, a 5% decrease in the position's value will
cause a loss of all the equity allocated to the trade, which could equal the
entire value of the account. The losses could be substantially more than the
margin deposited and the total value of the account.
The general partner does not control the trading advisors or their methods
and may not be able to prevent large losses.
The commodity trading advisors enter trades on our behalf directly with the
futures commission merchant. The general partner does not know the trades
before they are made, nor does it know the trading advisors' methods, the
number of contracts bought or sold, or the margin required. The trading
advisors will not notify the general partner of any modifications, additions
or deletions to its trading methods and money management principles. We may
suddenly suffer large losses before the general partner knows remedial action
must be taken.
The partnership may be unable to execute a trade before large losses are
incurred due to market illiquidity.
It is not always possible to execute a buy or sell order. Such illiquidity
can be caused by:
* a lack of interest in the contract caused by market conditions which
produce no persons willing to buy or sell, or
* the suspension of trading which may occur because the price limit for a
contract has been reached.
Most United States commodity exchanges limit price movement in a single
direction by rules referred to as price limits. Once these limits have been
reached, no trades may be executed at prices beyond the limits for a
specified amount of time, usually until the next trading day. However, given
sufficient price movement the following day, price limits may be imposed
again. Accordingly, price limits may be in effect for protracted time
periods. No trading may be made in the direction of the price movement while
the limit is in place. The frequency of the imposition of price limits or
the length of time they will be in effect cannot be predicted. This causes
illiquidity and exposure to substantial losses. These losses could exceed the
total equity in our account.
Changes in trading equity may adversely affect performance.
Commodity trading advisors often are unable to adjust to changes in the
amount the money the manage. This is because:
* the larger amount of equity under management requires larger trades to be
made, which may be more difficult to execute
* there are legal limits called position limits upon the number of positions
that may be taken on a particular commodity, and
* it may be more difficult to scale in positions, which is when a trading
advisor takes positions at different prices at different times and then
allocates those positions on a ratable basis when a change in his allocated
equity occurs.
See Appendix I for the full definitions of position limits and scale in
positions.
The commodity trading advisors will not limit the total equity they accept
and may suffer losses which cause a withdrawal of the equity it manages. A
commodity trading advisor's rate of return tends to decrease as the amount of
equity under management increases.
Failure of commodity brokers or banks could result in loss of assets.
If the futures commission merchant or other entity with which our money is on
deposit becomes bankrupt, we might only recover some, if any, of the equity
in our account. The deposits in our bank accounts will be insured for only
$100,000 and payment on insured deposits may be delayed.
When trading in foreign exchanges, if the creditworthiness of the other
parties is not maintained, we may lose the value of our positions in those
markets.
Trading commodities involves entering a contract, or option to contract, for
the delivery of goods or money at a future date. The value of the contract
or option depends directly upon the creditworthiness of the parties. The
commodity trading advisors trade commodities on United States commodity
exchanges, foreign commodity exchanges, and the inter-bank currency markets.
The commodity exchange contracts and options traded on United States
exchanges are guaranteed by the members' credit. Contracts and options upon
foreign commodity exchanges and the inter-bank currency markets are usually
not regulated by specific laws and are backed only by the parties to the
contracts. It is possible for a price movement in a particular contract or
option to be large enough to destroy the creditworthiness of
* the contracts and options issued by a particular party, or
* all of the contracts and options of an entire market.
In that situation, we could lose the entire value of a position with little
recourse to regain any of its value.
Options trading is highly risky and requires less equity to secure a trade,
thus providing greater potential for loss.
We expect to trade options, both puts and calls. After a position is taken,
a liquid market may not exist for any particular commodity option or at any
particular time. In an illiquid market, we may not be able to buy or sell to
offset, or liquidate, the positions we have taken.
Options trading allows us to trade with less equity on deposit. Accordingly,
the risk of loss of the entire account is great.
If the price of a contract changes dramatically, we may not be able to exit
the position without sustaining substantial loss due to government imposed
price limits.
The Commodity Futures Trading Commission and the United States commodity
exchanges have established limits referred to as Speculative Position Limits
or Position Limits. These are different from the price limits described
before. They are limits on the maximum net long or net short futures or
options positions which any person or group of persons may own, hold, or
control in futures contracts. The positions taken among all commodity
accounts owned, controlled or managed by a trading advisor and its principals
are combined for position limit purposes. Thus, a trading advisor may not be
able to hold sufficient positions for us to maximize the return on a
particular trade because it may be taking similar positions for others.
We may not be able to compete with others with greater resources.
Commodity futures trading is highly competitive. We compete with others who
may have
* greater experience
* more extensive information about developments affecting the futures
markets
* more sophisticated means of analyzing and interpreting the futures
markets, and
* greater financial resources.
Those with greater experience and financial resources have a better chance at
trading profitably. For instance, we will not maintain a warehouse to take
delivery of commodities and will not have a large capital base to allow us to
hold positions through bad times.
Resignation of Mrs. Pacult as a general partner and subsequent failure of
Belmont to maintain its net worth may cause suspension of trading or taxation
as a corporation.
The North American Securities Administrators Association has established
guidelines for commodity pools structured as limited partnerships. Those
guidelines require that a sole corporate general partner maintain a net worth
during the offering period of either 5% of the offering amount or not less
than $50,000, but in no case no more than $1,000,000. Belmont presently has
insufficient capital to meet this guideline and, therefore, the loss of Mrs.
Pacult as an individual general partner could result in the suspension of
sales in states which follow the guidelines.
When the sole general partner of a partnership is a corporation, the tax
rules require conditions to be met to allow the partnership to be taxed as a
partnership and not as a corporation. To be taxed as a partnership requires
that two or more of the following tests be met:
* decentralized management
* unlimited liability
* limited transferability of shares, and
* limited continuation of existence.
If we were not taxed as a partnership, the partnership income would be taxed
at corporate rates and would be distributed to the partners as dividends.
The partnership has an individual general partner and, therefore, these
limits are not applicable. In the event Mrs. Pacult would resign or
otherwise not serve as a general partner, the partnership is structured to
satisfy all but the decentralized management test and, therefore, in the
opinion of the tax counsel, would be taxed as a partnership.
Our tax status has not been confirmed by an IRS ruling. No such ruling has
been or will be requested on our behalf. If we are taxed as a corporation
for Federal income tax purposes in any taxable year(s),
* our income or loss would not be passed through to you
* we would be taxed at corporate rates
* all or a portion of any distributions made to you would be taxed to you as
dividend income, and
* the amount of such distributions would not be deductible by us in
computing our taxable income.
See Federal Income Tax Aspects.
If Mrs. Pacult resigns and Belmont becomes the sole general partner, it will
use its best efforts to satisfy the requirements necessary to permit us to be
taxed as a partnership.
The general partner will not advise you, and you must rely upon your own
investment counsel before investing in the partnership.
Purchasing partnership interests does not create an Individual Retirement
Account, commonly called an IRA, and the creation and administration of an
IRA are solely your responsibility. The assets of a retirement account
should be carefully diversified and you should only allocate high risk
capital to this partnership. If you invest a significant portion of your
retirement plan or IRA assets in this partnership, you could be exposing that
portion to significant loss. The general partner will not advise you in any
manner on an investment in this partnership, including matters of
diversification, prudence and liquidity. Accordingly, you must rely upon the
experience of qualified investment counsel you select.
The partnership is not covered by the Investment Company Act of 1940.
Stock investment companies and investment advisors must be registered under
the Investment Company Act of 1940, as amended. Because the business of the
partnership, Belmont Capital Management, Inc., Mrs. Pacult and the commodity
trading advisors involves only the trade of commodities, none of them are
required, nor do they intend, to be registered under the Investment Company
Act of 1940 or any similar state law. Therefore, you are not protected by
any such legislation. However, you are protected by the Commodity Exchange
Act, which requires the general partner and the commodity trading advisors to
be registered and otherwise protects your commodity investment in the
partnership similar to the protection the Investment Company Act offers to
stock investments.
Possibility of audit - you may be subject to audit and penalties.
If our return is audited, the IRS may make adjustments to our reported items.
If an audit results in an adjustment, you may be:
* required to file amended returns
* subject to a separate audit, and
* required to pay back taxes, plus penalty and interest.
General partner may settle IRS claim not in your best interest.
Belmont Capital Management, Inc. is named tax matters partner. This grants
it the power to settle any IRS claim on your behalf if you hold 1% or less
interest in this partnership and do not timely object to the tax matters
partner's authority, after notice. Such settlement may not necessarily be in
your best interest. See Federal Income Tax Aspects.
You may be subject to back taxes and penalties.
The Scott Law Firm, P.A. has delivered an opinion to the general partner that
this partnership, as it is intended to be operated by the general partner,
will be taxed as a partnership and not as a corporation. This opinion does
not include the tax treatment of expenses to prepare the prospectus and
selling expenses because they have to be allocated between expenses attendant
to formation and ordinary business expenses by the general partner. In
addition, commodity trading advisor fees are combined with employee business
expenses and other expenses of producing income. The aggregate of such
expenses is deductible only if such amount exceeds 2% of the taxpayer's
adjusted gross income. The general partner believes that our intended
operations will qualify as a trade or business.
The general partner may raise the incentive fee to 30% without prior notice
to you.
The general partner has reserved the right to raise, without prior notice to
you, the incentive fee to a maximum of 30% while lowering the total
management fees between the commodity trading advisors and general partner to
0%. The general partner will notify you of any change in fees within seven
business days.
Conflicts Of Interest
There are present and potential future conflicts of interest in our structure
and operation you should consider before you purchase partnership interests.
The general partner will use this as a defense against any claim or other
proceeding made against Mrs. Pacult, Belmont Capital Management, Inc., the
commodity trading advisors, the futures commission merchant, the introducing
broker, or any principal or affiliate, agent or employee of any of them.
General partner, the commodity trading advisors, and their principals may
preferentially trade for themselves and others.
Because the general partner, the commodity trading advisors, the introducing
broker, and their principals and affiliates may trade for themselves and
others, conflicts of interest may exist or be created in the future. None of
these people are limited in trading commodities for their own account, and
you will not have access to any of their personal trading records. They
could possibly take their personal positions prior to the positions they know
they will place for you.
Possible retention of voting control by the general partner may limit your
ability to control issues.
The general partner, its principal and its affiliates may purchase an
unlimited amount of partnership interests. These persons include Mrs. Pacult
as general partner, and Mr. Michael Pacult as a principal of Futures
Investment Company, the introducing broker and selling agent. It is possible
that they could purchase enough partnership interests to retain voting
control. They could then vote, individually or as a block, to create a
conflict with our best interests. Such voting control may limit the limited
partners' ability to achieve a majority vote on such issues as:
* amendment of the Limited Partnership Agreement
* change in our basic investment policy
* dissolution of this partnership, or
* the sale or distribution of our assets.
However, neither general partner may vote on the issue of their removal.
The general partner is not likely to resign, even if it would be in your best
interest.
It is unlikely that either general partner, Mrs. Pacult or Belmont Capital
Management, Inc., would voluntarily resign, even if it would be in your best
interest, because Belmont is paid a 3% management fee and Mrs. Pacult serves
as both a general partner and the sole principal of Belmont.
Partnership fees may be higher than they would be if they were negotiated.
The management fee of 3% to Belmont Capital Management, Inc. and the 11% fee
to the introducing broker have not been negotiated at arm's length. The
introducing broker:
* accepts the credit risk of the partnership to the futures commission
merchant
* maintains the day to day contact with the general partner
* reviews the daily positions and margin requirements of the partnership
* pays the futures commission merchant's charges, and
* pays the trailing commissions to the selling agent for communicating with
the investors and maintaining investment in the partnership.
Mrs. Pacult is a principal and 50% owner of Futures Investment Company, the
introducing broker and selling agent. As such, Mrs. Pacult has a conflict of
interest between her obligation to manage this partnership and her financial
interest in receiving both the management fee as principal of the corporate
general partner and the trailing commissions as a registered representative
of the selling agent. Futures Investment Company, as the introducing broker,
pays itself as the selling agent 1/11 of the 11% allocated to it annually.
From the 11%, it must also pay brokerage commissions of approximately 4/11 per
year to Vision, the futures commission merchant, and 6/11 per year to the
associated persons, which will include Mrs. Pacult, for the partnership
interests they sell.
Our profitability may be limited due to competition among the traders for
similar trades and their unaccountability for previous losses.
The general partner has sole and absolute discretion to select and terminate
commodity trading advisors. As it has appointed multiple trading advisors,
each trades independently of the others. Also, they may compete for similar
positions or take positions opposite each other, which may limit our
profitability. If a trading advisor is replaced, the new trading advisor
will receive any earned incentive fees regardless of the previous trading
advisor's performance. As incentive fees are paid based upon each trading
advisor's performance, it would be possible for us to experience a net loss
and be required to pay out incentive fees to one or more of the traders.
Your ability to redeem your partnership interests may be lessened due to the
nature of the general partner's compensation.
The general partner receives a fee based upon our net asset value, which
accounts for our total assets, including all cash and cash equivalents, less
total liabilities. This gives it an incentive to withhold distributions and
to discourage redemption. The general partner will try to honor all
redemption requests within twenty days after the last day of the preceding
month in which the request was made. However, if the partnership does not
have enough liquid assets, it may not be able to honor the request on time,
or possibly at all.
Commodity trading advisors may engage in high risk trading to generate fees.
As a general rule, the greater the risk assumed, the greater the potential
for profit. Because the commodity trading advisors receive 20% of our new
net profits, it might select trades which are otherwise too risky for us.
No Resolution Of Conflicts Procedures
As is typical in many futures partnerships, the general partner has not and
will not establish formal procedures to resolve potential conflicts of
interest. These future potential conflicts may adversely affect both you and
us.
The previous risk factors and conflicts of interest are complete as of the
date of this prospectus, however, additional risks and conflicts may occur
which are not presently foreseen by the general partner. You may not
construe this prospectus as legal or tax advice. Before making an investment
in this partnership, you should read this entire prospectus, including the
Limited Partnership Agreement (Exhibit A) and the subscription agreement.
You should also consult with your personal legal, tax, and other professional
advisors. See Investor Suitability.
Interests Of Named Experts And Counsel
The general partner has employed The Scott Law Firm, P.A. to prepare this
prospectus, provide tax advice and opine upon the legality of issuing the
partnership interests. Neither the law firm, its principal, any accountant,
nor any other expert hired by the partnership to give advice on the
preparation of this offering document have been hired on a contingent fee
basis. Nor do any of them have any present or future expectation of interest
in the general partner, the selling agent, the commodity trading advisors,
the introducing broker, or the futures commission merchant.
Management's Discussion And Analysis
The Partnership
Bromwell Financial Fund, Limited Partnership is a Delaware limited
partnership organized on January 12, 1999 and maintains its main business
office at 5916 N. 300 West, Fremont, IN 46737, (219) 833-1306. It is
qualified to be a commodity pool to engage in the speculative trading of
futures, commodity options and forward contracts on currencies, interest
rates, energy and agriculture products, metals, and stock indices.
Our business objective is to let our invested capital appreciate while
controlling losses; however, there can be no assurance that we will meet this
objective.
The partnership is managed by Belmont Capital Management, Inc., a Delaware
corporation, and Mrs. Shira Del Pacult.
We do not have officers or employees, which is why there is no report of
executive compensation in this prospectus.
We operate pursuant to the terms of the limited partnership agreement
attached as Exhibit A, which:
* grants full management control to the general partner including, the right
to employ independent trading managers called commodity trading advisors, and
* will terminate at 11:59 p.m. on January 12, 2020, or upon an event causing
an earlier termination.
Except for the limited partnership agreement, the partnership may not enter
any contract with the general partner or commodity trading advisors that is
greater than one year in duration. However, all such contracts are expected
to be renewed yearly.
The General Partners
The corporate general partner is Belmont Capital Management, Inc., a Delaware
corporation incorporated on January 12, 1999. It was registered as a
commodity pool operator on August 5, 1999 and maintains its main business
office at 5916 N. 300 West, Fremont, IN 46737, (219) 833-1306.
The individual general partner is Shira Del Pacult, who was registered as a
commodity pool operator on May 27, 1999 and maintains her main business
office at 5916 N. 300 West, P.O. Box C, Fremont, IN 46737, (219) 833-1306.
Experience
Belmont has only managed this commodity pool since its inception on January
12, 1999 and has no prior experience in managing other commodity pools. Mrs.
Pacult has been supervising individual managed commodity accounts for over 19
years and serves in several capacities in three other commodity pools, as
follows:
Commodity Pool Ms. Pacult Serves As
Atlas Futures Fund, LP Individual general partner and sole
(publicly offered, began principal of the corporate general partner
operations 10/99)
Fremont Fund, LP Sole principal of the corporate
(publicly offered; began general partner
operations 11/97)
Auburn Fund, LP Sole principal of the corporate
(privately offered; began general partner
operations 4/98)
Authority
Mrs. Pacult is the sole principal of Belmont Capital Management, Inc. and,
therefore, is the sole decision maker of this partnership. The signature of
either Belmont or Mrs. Pacult, individually, may bind this partnership.
The general partner is authorized to take all actions necessary to manage the
affairs of the partnership. See Article II of the Limited Partnership
Agreement attached as Exhibit A.
Partnership Books and Records
Our books and records will be maintained for six years at 5916 N. 300 West,
Fremont, IN 46737. A duplicate set of the books will be maintained by Mr.
James Hepner, Certified Public Accountant, 1824 N. Normandy, Chicago, IL
60635, (773) 804-0074. Mr. Hepner also prepares the Form K-1s for the
partnership. You may access our books and records by visiting either office
at a time convenient for both parties, and you may have copies made at that
time at ten cents per page. The general partner serves as tax partner for
the partnership. Frank L. Sassetti, & Co., 6611 West North Avenue, Oak Park,
IL 60302 conducts our annual audit and the annual audit of the corporate
general partner, as well as prepare our tax returns.
The Commodity Trading Advisors
To conduct trading on our behalf, the general partner has initially selected
two independent commodity trading advisors, Ansbacher Investment Management,
Inc. and Mangin Capital Management, Inc. Without prior notice to you, the
general partner has sole discretion to employ additional trading advisors,
terminate any trading advisor, and change the amount of equity any advisor
may trade. However, the general partner will give you notice of any change
in trading advisors within seven days of such change. Such notice will
include a description of your right to:
* redemption
* vote to amend the limited partnership agreement
* remove one or both general partners
* elect a new general partner
* cancel any contract with a general partner or any of its affiliates upon
60 days notice, and
* dissolve the partnership.
No change in trading advisors will constitute a material change to the
limited partnership agreement or the structure of our operation. All trading
advisors employed to trade for the partnership will be registered with the
Commodity Futures Trading Commission and will have at least three years of
experience as a trading advisor.
The Advisory Contracts
The general partner has assigned a substantial portion of our assets to the
trading advisors, the terms of which are governed by two advisory contracts
and powers of attorney between us and each trading advisor. See Exhibits F
and G.
These agreements provide the trading advisors with revocable powers of
attorney, which gives them sole authority to determine
* the markets to be traded
* the location of those markets
* the size of the position to be taken in each market, and
* the timing of entry and exit in a market.
The agreements may be terminated, at any time, upon notice from one party to
the other and to the futures commission merchant.
Business Objective And Expenses
Our objective is to achieve the potentially high rates of return which are
possible through the speculative trading of futures, commodity options and
forward contracts. We do not expect to engage in any other business.
The general partner organized this partnership to be a commodity pool, as
that term is defined under the Commodity Exchange Act. As such, it employs
independent commodity trading advisors to trade for us.
The general partner intends to allocate substantially all of our net assets
to the trading advisors to conduct this trading. The trading advisors
typically allocate between 20% and 30% of the trading equity assigned to them
to secure the trading positions they selects.
Although we do not expect to make distributions, you will nevertheless be
required to pay yearly Federal, state and local taxes upon income, if any,
earned by this partnership. Accordingly, you should purchase partnership
interests as a long-term investment only.
There can be no assurance that we will achieve our business objectives, be
able to pay the substantial fixed and other costs to do business, or avoid
substantial trading losses. See Charges to the Partnership.
Below is a chart explaining the expenses we expect to incur during our next
twelve months of trading which began on July 11, 2000. All interest income is
paid to the partnership. The chart below assumes the value of each unit of
partnership interest remains constant during the next twelve months.
Expenses Per Unit of Partnership Interest
For The Next 12-Month Period Of Operations
Based Upon Current Based Upon Maximum
Net Asset Value Units To Be Sold
Units 749 Units ($748,966) 6,575 Units ($6,994,500)
Selling Price per Unit (1) $ 1063.83 $ 1063.83
Offering and Organizational
Expenses (2) 86.15 9.81
General Partner's Management Fee (3) 31.91 31.91
Trading Advisor's' Management Fees (3) 10.64 10.64
Trading Advisor's' Incentive Fees on
New Net Profits (4) 68.53 49.45
Brokerage Commissions and Trading
Fees (5) 113.51 113.51
Selling Commission (6) 63.83 63.83
Redemption Fee (7) 31.91 31.91
Less Interest Income (8) (63.83) (63.83)
Amount of Trading Income Required to
Redeem Unit At Current Value After One
Year. (9) $ 342.65 $ 247.23
Percentage of Initial Selling Price
Per Unit 32.21% 23.24%
Explanatory Notes:
(1) Investors will purchase partnership interests at the partnership's month
end net asset value per partnership interest, plus a 6% selling commission.
As of July 11, 2000, this was $1063.83, which is the value used in the table.
(2) The partnership has paid $59,526 in offering and $5,000 in organizational
expenses. Your share of these expenses will be deducted from your
subscription amount, before you are assigned partnership interests, to
reimburse the previously admitted partners. See Use of Proceeds.
(3) The corporate general partner is paid a monthly management fee of 1/4% of
the net asset value of the partnership, calculated as of the close of
business of the last trading day during the previous month. The commodity
trading advisors are paid a monthly management fee of 1/12% of the trading
equity allocated to it on deposit at the futures commission merchant,
calculated as of the close of business of the last trading day during the
previous month.
(4) The commodity trading advisors receive an incentive fee of 20% of new net
profits earned each quarter upon the trading equity assigned to them. The
$68.53 of incentive fees shown above is the amount the trading advisors would
earn if they produced enough profits to allow you to redeem your partnership
interests at the original price of $1,063.83 per unit of partnership
interest, including selling commissions, after one year.
(5) Brokerage commissions and trading fees are fixed by the general partner
at 11/12% monthly of our assets on deposit with the futures commission
merchant. For purposes of this calculation, we assumed 97% of our assets
will be deposited with the futures commission merchant.
(6) A one time selling commission of 6% will be charged to you and paid to
the selling agent.
(7) The redemption fee of 3% is computed upon the assumed $1,063.83 value of
the redeemed partnership interest after one year.
(8) We earn interest on margin deposits with the futures commission merchant
and on our bank deposits. Based on current interest rates, interest income
is estimated at 6% annually of our net assets.
(9) This computation assumes there will be no claims or other extra-ordinary
expenses during the first year.
We do not represent that the above table will reflect our actual operating
expenses or interest income. There can be no assurance that our expenses
will not exceed the amounts projected or that there will not be claims or
other extra-ordinary expenses.
Securities Offered
We, Bromwell Financial Fund, Limited Partnership, will offer and sell limited
partnership interests in this partnership at a value determined by the month
end net asset value of the partnership. See Determination Of The Offering
Price.
You, the Investor:
* will have:
* pro rata rights to profit and losses which will vary with your
investment amount
* the right to vote on partnership matters such as the replacement of the
general partner. See The Limited Partnership agreement attached as Exhibit
A.
* will not:
* be responsible for our debts in excess of your investment amount;
unless:
* we become insolvent; and
* you receive distributions which represent a return on your
investment, in which case you would have to return the distributions to pay
our debts
* acquire any interest in the corporate general partner, Belmont Capital
Management, Inc., and
* manage this partnership
See Plan For Sale of Partnership Interests and Subscription Requirements.
Your subscription agreement and check:
* must be approved by the general partner before you will become a partner
and will be accepted or rejected within five business days of receipt
* five days after submission, your subscription becomes irrevocable and may
not be withdrawn; unless, a longer statutory withdrawal period applies to
you, and
* will be deposited and held until you are admitted into the partnership in
a segregated escrow account at the escrow agent, Star Financial Bank, 2004 N.
Wayne St., Angola, IN 46703.
There cannot be any assurance that additional partnership interests will be
sold. The general partner is authorized, in its sole discretion, to
terminate this or any future offering of partnership interests.
Management's Discussion
This is the continuation of the offering of our partnership interests. We:
* may conduct future offerings after the close of this offering
* commenced trading July 11, 2000 and do not yet have an audited performance
history; therefore, we do not discuss any results of operations
* intend to raise money only through offerings, such as this one, and do not
intend to borrow any money
* must pay expenses to qualify our partnership interests for sale, such as
office equipment, fees for the preparation of this prospectus, as well as
other expenses
* intend to allocate all our net assets to trading and other investments,
except those assets used to pay capital and operating expenses
* will not have any directors, officers or employees which is why there is
no report of executive compensation in this prospectus, and
* will conduct all our business through the general partners.
Description of Intended Operations
The general partner has authorized the introducing broker to select Vision
Limited Partnership to serve as the futures commission merchant. The
partnership has deposited its funds to the futures commission merchant to
hold as security for the trades selected by the commodity trading advisors.
The futures commission merchant has been directed to send the general
partner, before the open of business each day, a computer or fax report which
describes
* the positions held
* the margin allocated, and
* the profit or loss on the positions from the date the positions were taken
Risk Control
The general partner reviews the daily transmissions and makes appropriate
adjustments to the allocation of trading equity. Based upon the amount of
available trading equity, the trading advisors have sole discretion to:
* make specific trades,
* determine the number of positions taken, and
* decide the timing of entry and departure from each trade made.
The general partner will use its best efforts to monitor the daily net asset
value of the partnership. If the net unit value falls to less than 50% of the
greater of
* the original $1000 selling price less commissions and other charges, or
* such higher value earned through trading,
then the general partner will:
* immediately suspend all trading
* provide you with immediate notice of the reduction in net unit value, and
* give you the opportunity, for 15 days after the date of such notice, to
redeem your partnership interests according to the provisions of Article IX,
Sections 9.5 and 9.6 of the Limited Partnership Agreement.
No trading shall commence until after such fifteen day period. See Exhibit A
attached.
Trading Risks
Most United States commodity exchanges limit daily fluctuations in commodity
futures contracts prices by regulations referred to as daily price
fluctuation limits or daily limits. Once the price of a futures contract has
reached the daily limit for that day, positions in that contract can neither
be taken nor liquidated. Commodity futures prices have occasionally moved
the daily limit for several consecutive days with little or no trading.
Such an occurrence could prevent us from promptly liquidating unfavorable
positions and subject us to substantial losses. These losses could exceed
the margin initially required to make the trade. In addition, even if
commodity futures prices have not moved the daily limit, we may not be able
to execute futures trades at favorable prices. This may be caused by light
trading in such contracts or by a sudden and substantial price move in a
futures or forward contract. These limitations on liquidity are inherent in
our proposed commodity futures trading operations. Otherwise, our assets are
expected to be highly liquid.
Except for payment of offering and other expenses, the general partner is
unaware of any anticipated:
* known demands, commitments or required capital expenditures,
* material trends, favorable or unfavorable, which will affect our capital
resources, or
* trends or uncertainties that will have a material effect on operations.
Each United States commodity exchange, with the approval of the Commodity
Futures Trading Commission, establishes minimum margin requirements for each
traded contract, which futures commission merchants require to be on deposit
before a trade will be accepted. The futures commission merchant may
increase the margin requirements above these minimums for any or all
contracts for its customers. Because we generally use a small percentage of
assets for margin, we do not believe that any increase in margin requirements
will materially affect our proposed operations. Management cannot predict
whether the value of our partnership interests will increase or decrease.
Inflation is not projected to be a significant factor in our operations,
except to the extent inflation influences futures prices.
Fiduciary Responsibility Of The General Partner
You have legal rights under Delaware partnership and applicable Federal and
state securities laws. In all dealings affecting this partnership, the
general partner has a fiduciary responsibility to you and all other partners
to exercise good faith and fairness. No contract shall permit the general
partner to contract away its fiduciary obligation under common law. The
limited partnership agreement conforms with the Uniform Limited Partnership
Act for the State of Delaware in regard to the definition of the fiduciary
duties of the general partner.
The following table summarizes your rights as an investor in this partnership
with regard to instituting legal proceedings.
<TABLE>
<S> <C> <C> <C> <C>
Who May Under What Against Whom To Recover Under What
Bring Action Jurisdiction What Circumstances
You, on behalf of Delaware law Third party Damages General partner has failed or
the partnership refused to institute
proceedings
You, individually, Federal or state General partner Damages Violations of fiduciary duties
or on behalf of all court by the general partner
similarly situated
limited partners
You, individually, Federal or state The general partner and Losses suffered Violations of the Federal or
as part of a class court others under the in connection state securities laws
action jurisdiction of the Federal with the
securities laws or the purchase or sale
Commodity Exchange of your partnership
Act interests
You Commodity The general partner, the Damages Violations of the Commodity
Futures Trading commodity trading Exchange Act or any rule,
Commission advisor, the introducing regulation or order of the
reparations broker or the futures Commodity Futures Trading
proceedings commission merchant Commission
</TABLE>
If the general partner acts in good faith and exercises its best judgment, it
will not be liable merely because we lost money or otherwise did not meet our
business objectives. Additionally, there are substantial and inherent
conflicts of interest in the partnership's structure which are inconsistent
with the general partners' fiduciary duties. The general partner intends to
raise the disclosures made in this prospectus and the representations you
make in the subscription agreement as a defense in any proceeding brought
which seeks relief based on the existence of such conflicts of interest. See
Conflicts of Interest.
The responsibility of a general partner to you and other partners is a
changing area of the law. If you have questions concerning the
responsibilities of the general partner, you should consult your legal
counsel.
Indemnification
Provisions of Limited Partnership Agreement
The limited partnership agreement protects the general partner from being
responsible or accountable for any act or omission, for which you, other
limited partners or the partnership itself may claim it is liable, provided
that:
* the general partner determined such act or omission was within the scope
of its authority and in the best interest of this partnership, and
* such action or failure to act does not constitute misconduct or a breach
of the Federal or state securities laws related to the sale of partnership
interests.
Specifically, if the general partner
* has acted within the scope of its authority and
* is being assessed a demand, claim or lawsuit by a partner or other entity,
the partnership will defend, indemnify and hold the general partner harmless
from and against any
* loss, liability, damage, cost or
* expense, including attorneys' and accountants' fees and expenses incurred
in defense of any demands, claims or lawsuits
which were actually and reasonably incurred and arising from any
* act, omission, activity or conduct undertaken by or on behalf of the
partnership.
Provisions of Law
According to applicable law, indemnification of the general partner is
payable only if:
* the general partner determined, in good faith, that the act, omission or
conduct that gave rise to the claim for indemnification was in the best
interest of the partnership
* the act, omission or activity that was the basis for such loss, liability,
damage, cost or expense was not the result of negligence or misconduct
* such liability or loss was not the result of negligence or misconduct by
the general partner, and
* such indemnification or agreement to hold harmless is recoverable only out
of the assets of the partnership and not from the partners, individually.
Provisions of Federal and State Securities Laws
This offering is made pursuant to Federal and state securities laws. If any
indemnification of the general partner arises out of an alleged violation of
such laws, it is subject to the following legal conditions.
Those conditions require that no indemnification may be made in respect of
any losses, liabilities or expenses arising from or out of an alleged
violation of Federal or state securities laws unless:
* there has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the general partner or
other particular indemnitee, or
* such claim has been dismissed with prejudice on the merits by a court of
competent jurisdiction as to the general partner or other particular
indemnitee, or
* a court of competent jurisdiction approves a settlement of the claims
against the general partner or other agent of the partnership and finds that
indemnification of the settlement and related costs should be made, provided,
* before seeking such approval, the general partner or other indemnitee
must apprise the court of the position held by regulatory agencies against
such indemnification. These agencies are the Securities and Exchange
Commission and the securities administrator of the state or states in which
the plaintiffs claim they were offered or sold partnership interests.
Provisions of the Securities Act of 1933 and NASAA Guidelines
The Securities and Exchange Commission and the various state administrators
believe that indemnification for liabilities arising under the Securities Act
of 1933 are unenforceable because such indemnification is against public
policy as expressed in the Securities Act of 1933 and the North American
Securities Administrators Association, Inc. commodity pool guidelines.
Provisions of the Clearing Agreement
We clear trades through our futures commission merchant, Vision Limited
Partnership. According to the clearing agreements that governs these trades,
we must indemnify Vision Limited Partnership for any reasonable outside and
in-house attorney's fees incurred by it arising from any failure to perform
our duties under the clearing agreement.
Other Indemnification Provisions
The general partner has indemnified the selling agent, Futures Investment
Company, and expects to indemnify any other selling agents it selects that
there are no misstatements or omissions of material facts in this prospectus.
Relationship With The Futures Commission Merchant And The Introducing Broker
The general partner has initially engaged Futures Investment Company in two
capacities:
* As the sole broker dealer, it sells partnership interests and supervises
regulatory compliance.
* As the introducing broker, it supervises the relationship with the futures
commission merchant, including
* the negotiation of the fixed and round turn commission rates incurred
through trading via the commodity trading advisors, and
* review of the daily reports.
Mrs. Shira Del Pacult serves as:
* a stockholder, director and officer of Futures Investment Company
* a general partner and commodity pool operator to this partnership, and
* the sole principal of Belmont Capital Management, Inc., the corporate
general partner and commodity pool operator.
Futures Investment Company has engaged Vision, Limited Partnership to act as
the futures commission merchant.
Fixed Commissions are Competitive
The general partner believes the introducing broker rates for fixed
commissions are competitive.
In that regard, the general partner is obligated by the North American
Securities Administrators Association guidelines to obtain the best
commission rates available to us. Accordingly, the general partner is free
to select any substitute or additional futures commission merchants or
introducing brokers at any time, for any reason. However, neither the
corporate general partner, nor Mrs. Pacult acting as a general partner, is
likely to dismiss the current introducing broker because of their affiliation
with Mrs. Pacult as a principal of the introducing broker.
The futures commission merchant and the introducing broker continue to act
for other commodity pools that have retained either or both of the general
partners of this partnership. The general partners and any other commodity
pool may obtain rates to clear trades from the affiliated introducing broker
which are more favorable to their accounts, as opposed to the fixed
commissions the introducing broker charges us in lieu of round-turn
commissions.
Relationship With The Commodity Trading Advisors
The Commodity Trading Advisors Will Trade For Other Accounts
The commodity trading advisors will trade for their own accounts and for
others on a discretionary basis. They may use trading methods, policies and
strategies for others which differ from those used for us. Consequently,
such accounts may have different trading results from those experienced by
us.
Because the trading advisors trades for themselves and others, it is possible
for it to take positions ahead of or opposite positions taken on our behalf,
which presents a potential conflict of interest. See Appendix I for Taking
Positions Ahead of the Partnership.
Pursuant to Commodity Futures Trading Commission Regulation 421.03, the
trading advisors will use the average price system for those futures and
options contracts where its use is authorized, when:
* trades taken on behalf of both the partnership and the trading advisor's
other accounts are identical, and
* the prices of such trades are different.
See Appendix I for the definition of Average Price System.
The commodity trading advisors have also informed the general partners that
when the average price system is not available, trades will be filled in
order based on the numerical account numbers, with the lowest price allocated
to the lowest account number and in numerical matching sequence, thereafter.
Non-Disclosure Of The Commodity Trading Advisors' Methods
We have provided a general description of the commodity trading advisors'
methods and strategies under The Commodity Trading Advisors, Description of
Trading Program. However, the specific details of its trading methods are
proprietary and complex in nature and will not be disclosed to us or you. No
notice will be given to you of any changes the trading advisors may make in
their trading methods. See Risk Factors, No Notice of Trades or Trading
Method.
Charges To The Partnership
As an investor in this partnership, you will pay the cost of our operation.
These charges are described in narrative form and in the chart which follows
this narrative. In this prospectus, we have disclosed all compensation,
fees, profits and other benefits, including reimbursement of out-of-pocket
expenses, which the general partner and its affiliates will earn in
connection with this offering. Most of these charges were not negotiated at
arm's length, but rather were determined by the two general partners and
their affiliates.
Compensation Of General Partner
Each month, we pay the corporate general partner, Belmont Capital Management,
Inc., a monthly management fee of 1/4%, 3% annually, computed upon our net
asset value as of the close of business of the last trading day during the
previous month. The general partner has reserved the right to increase this
fee to 6% per year, at its sole discretion, provided the incentive fee paid
to the commodity trading advisors is appropriately reduced. See Charges to
the Partnership, Restrictions on Management Fees.
Compensation Of The Commodity Trading Advisors
The commodity trading advisors have been allocated equity to trade, which has
been deposited in an account with the futures commission merchant. Ansbacher
Investment Management, Inc. and Mangin Capital Management, Inc. are allocated
equity through partnership accounts maintained at Vision Limited Partnership.
Each month, we deduct from their respective accounts 1/12%, or 1% annually,
computed upon the close of business on the last trading day of the previous
month and pay it directly to the trading advisors as a management fee. The
general partner has reserved the right to change this fee at its sole
discretion. See Charges to the Partnership, Restrictions on Management Fees.
For those quarters in which a commodity trading advisor operates profitably,
the partnership will pay that advisor an incentive fee equal to
20% of the new net profit produced by that trading advisor. It is possible
for one advisor to earn an incentive fee while the partnership as a whole
lost money because of the poor trading performance of the other advisor. New
net profit:
* is calculated to determine how much a trading advisor has increased our
net assets through trading alone
* is based upon the net value of the equity assigned to the trading advisor
to trade
* is calculated quarterly
* is only paid when any losses in previous quarters have been offset by new
profits by the trading advisor, regardless of whether:
* the general partner has changed the trading advisor's compensation, or
* the partnership and trading advisor have entered a new contract
* is adjusted to eliminate the effects of:
* any new subscriptions for partnership interests
* redemptions by partners
* interest income paid by the futures commission merchant, and
* any other income earned on our assets which are not related to such
trading activity, regardless of whether such assets are held separately or in
a margin account.
The management and incentive fees to the trading advisors are calculated from
the net value of the trading equity assigned to them, as of the close of
business on the last business day of each month, determined before accrual of
any incentive fee.
Restrictions on Management Fees
Some of the states in which we wish to sell partnership interests require
that we comply with the North American Securities Administrators Association
Guidelines for commodity pools. These guidelines provide that:
* the total management fees, including that of the general partner and the
commodity trading advisors, may not exceed 6% of our net assets, and
* incentive fees based upon profits earned may not exceed 15% of new net
profits.
However, for each 1% reduction in management fees below 6%, the incentive
fees may be increased by 2%.
Without prior notice to you, the general partner has reserved the right to
raise the current incentive fee to a maximum of 27%, provided the management
fees are correspondingly lowered to 0%. However, the general partner will
notify you of any change in fees within seven business days.
Fees To Futures Commission Merchant And Compensation of Introducing Broker
Fee Paid By Partnership To The Introducing Broker
The introducing broker, Futures Investment Company, is responsible for
introducing and payment for the trades made through the futures commission
merchant, Vision Limited Partnership. Accordingly, we pay the introducing
broker a monthly fixed commission of 11/12%, or 11% annually, upon the assets
on deposit with the futures commission merchant. See The Futures Commission
Merchant.
The fixed commission which we pay is fair and reasonable. This is an area of
judgment which depends upon:
* the value of similar services provided by the same commodity trading
advisor for managed accounts and for other pools, and
* the value of similar services provided by other clearing firms for other
public commodity pools.
Brokerage Fees Paid By Introducing Broker To The Futures Commission Merchant
Vision Limited Partnership charges the introducing broker a fixed monthly fee
of 1/3%, or 4% annually, of all equity on deposit with Vision to cover all
clearing costs, including the pit brokerage fees, which include, floor
brokerage fees, National Futures Association fees, and exchange fees.
Trailing Commissions Paid To Others
The introducing broker pays monthly trailing commissions to the selling
agents and introducing brokers who are qualified to provide services to us
and the investors. Such persons include Mrs. Pacult and her husband, both of
whom are principals of the selling agent, Futures Investment Company. The
monthly trailing commissions paid are 1/2% of the assets on deposit with the
futures commission merchant, and are paid by the introducing broker from the
11/12% monthly fee.
The recipients of the trailing commission are responsible for maintaining
investment in this partnership. This must be done to:
* spread the potential risk of losses over a large number of investors to
protect our ability to continue in business, and
* allow the long-term trading strategies of the commodity trading advisors
to be profitable so additional investments can be solicited.
The introducing broker pays trailing commissions to the persons responsible
for selling the partnership interests as compensation for:
* maintaining continuous contact with the partners to whom they sold
interests in the partnership
* review of the daily runs to be aware of the partnership results during the
time the investors to whom they sold hold the partnership interests
* explaining changes in trading advisors and results from operations
* answering questions regarding the partnership, and
* working to retain investment in the partnership.
Fee To Introducing Broker
The introducing broker is paid 11% per year as a fixed fee for brokerage
commissions. It retains the difference between the 4% paid to Vision for
trades made by Ansbacher and Mangin. From that difference, the introducing
broker pays trailing commissions of 6% to Mrs. Pacult, as an associated
person of the introducing broker, for maintaining investment in the
partnership. The amount retained after payment of fees and commissions to
the futures commission merchant and to the individual general partner will
vary from month to month.
Miscellaneous Fees To Futures Commission Merchant
We will reimburse the futures commission merchant for all delivery,
insurance, storage or other charges incidental to trading and paid to third
parties. The general partner has instructed the trading advisors to avoid
these charges and, therefore, no significant charges of this nature are
anticipated.
Rights of General Partner
Without prior notification to you, the general partner has reserved the right
to:
* change the introducing broker
* change the futures commission merchant
* change the fixed commission rate
* suspend all trading during any month in which a trading advisor trades at
three times its normal frequency. See Limited Partnership Agreement,
attached as Exhibit A.
* have the partnership pay a per round-turn brokerage commission at Vision
Limited Partnership as opposed to a fixed percentage of net assets, at any
time, with or without a change in circumstances; provided, however, such
brokerage commissions cannot exceed
* 80% of the published retail rate of the introducing broker and other
similar introducing brokers, excluding pit brokerage fees, or
* 14% annually of the partnership's average net assets directly related
to trading activity, including pit brokerage fees.
Other Expenses
We must pay legal and accounting fees, as well as other expenses and claims.
For each year of normal operations, we must pay yearly legal and accounting
costs of approximately $23,000, which includes $18,000 for accounting and
audit and $5,000 for legal services. We must also pay customary and routine
administrative expenses, and other direct expenses.
We will reimburse the general partner for direct expenses, such as periodic
amendments to the disclosure document and prospectus used to solicit
investment, audit fees, delivery charges, statement preparation and mailing
costs, telephone toll charges, and postage.
Charges To The Partnership
The following table includes all charges to the partnership.
<TABLE>
<CAPTION>
Entity Form of Compensation Amount of Compensation
<S> <C> <C>
General Partner Management fee 3% annual management fee,
(Belmont Capital paid monthly, of net asset value to Belmont. [$750+]
Management, Inc.
and Shira Del Pacult)
Selling Agent Selling Commissions 6% selling commission paid
(Futures Investment from the subscription amount.
Company) [$1,500]
Introducing Broker Fixed Commissions 11% annual charge, paid
affiliated with the monthly, upon the assets on deposit with the futures
General Partner commission merchant. From
(Futures Investment this amount the introducing
Company) broker will pay 4% brokerage
fees to Vision and 6% trailing
commissions paid to those who
sold partnership interests,
including Mrs. Pacult.
[$2,750+]
Futures Commission Round-turn commissions paid The introducing broker pays
Merchant from the fixed commissions Vision a 4% annual charge,
(Vision Limited paid by the partnership paid monthly, upon the assets
Partnership) on deposit from the 11% the
partnership pays to the
introducing broker.
Reimbursement of delivery, Reimbursement by the partnership
insurance, storage and any of actual payments to third
other charges incidental to parties in connection with
trading and paid to third partnership trading
parties
Commodity Trading Fixed Management Fee 1% annual management fee,
Advisors paid monthly, of the trading
(Ansbacher Investment equity assigned to the
Management, Inc. advisors. [$250+]
and Mangin Capital
Management, Inc.) Incentive Fee 20% of the new net profits of
the account for each
quarterly period that the net
value of the trading equity
at the end of such quarterly
period for each advisor
exceeds the highest previous
quarterly net value of the
trading equity for that
advisor
Third Parties Legal, accounting fees, and The partnership has paid
(The Scott Law Firm, other actual expenses $59,526 for offering and
P.A., Frank L. Sassetti necessary to the operation of $5,000 for organizational
& Co., & James D. the partnership, and all expenses. Each year the
Hepner, CPA) claims and other partnership will pay $18,000
extraordinary expenses of the for accounting and $5,000 for
partnership. legal. Claims and other
costs can not be estimated
and will be paid as incurred.
[$2,154 + for initial
organizational and offering
expenses; $821 for yearly
expenses]
</TABLE>
+ Each $25,000 investment pays this amount per year for this particular
charge. When the charge is not based on a percentage, but rather a fixed
amount, we have computed the expense upon the partnership's current net asset
value.
Investor Suitability
You should only invest a limited amount of the risk portion of your total
portfolio and should not invest more you can afford to lose.
To invest the minimum $25,000 in this partnership, you must have either:
* a net worth of at least $150,000, exclusive of your home, furnishings and
automobiles, or
* an annual gross income of at least $45,000 and a net worth, as calculated
above, of at least $45,000.
You may not invest more than 10% of your net worth in this partnership. The
foregoing standard and the additional standards applicable to residents of
certain states as set forth in this prospectus and the subscription documents
are regulatory minimums only.
Potential Advantages
Commodity trading is speculative and involves a high degree of risk. See Risk
Factors. However, your investment in this partnership will offer the
following potential advantages:
Equity Management
We offer the opportunity for you to:
* place equity with professional commodity trading advisors who have
demonstrated an ability to trade profitably in the judgment of the general
partner, and
* have that equity allocated to the trading advisors in a manner which is
intended by the general partner to optimize future profit potential.
Mrs. Pacult has experience managing several other commodity pools and has
over nineteen years of experience in selecting commodity trading advisors to
manage individual investor accounts and describing to investors how
individual managed futures accounts work.
We expect this experience to benefit us in the quality of trading advisors
selected and in the explanation to prospective investors of our operation and
the attendant risks of investment.
Investment Diversification
If you are not prepared to spend substantial time trading various commodity
contracts or options, you may participate in these markets through a $25,000
investment in the partnership, thereby obtaining diversification from
investments in stocks, bonds and real estate.
Limited Liability
You will not be subject to margin calls and cannot lose more than your
original investment amount plus your share of distributed and undistributed
profits; provided the below bulleted legal conditions are met.
In the opinion of our legal counsel, there are no circumstances, including
bankruptcy of this partnership, which will subject your personal assets to
our debts, provided:
* the partnership's structure is maintained by the general partner, and
* no limited partner is affiliated with any phase of our management.
See the Limited Partnership Agreement (Exhibit A).
Administrative Convenience
We are structured to provide you with services which alleviate the
administrative details involved in trading commodities contracts directly,
including:
* providing monthly and annual financial reports showing, among other
things:
* the value of each unit of partnership interest
* trading profits or losses, and
* expenses; and
* preparing all tax information relating to your investment in this
partnership.
Access To The Commodity Trading Advisors
The commodity trading advisors selected by the general partner require a
minimum account size substantially greater than the $25,000 minimum
investment required by us. For instance, Ansbacher and Mangin currently
require a minimum investment of $250,000 to open an account. Accordingly,
you have access to the trading advisor for a smaller investment than is
available by a direct investment in a managed account with the trading
advisor.
Use Of Proceeds
The partnership has paid $59,526 in offering and $5,000 in organizational
expenses. All partners admitted after the commencement of business, up until
the termination of the partnership, must reimburse the previously admitted
partners such that all partners have contributed equally to the offering and
organizational expenses. This will be done as follows:
The incoming partners' subscriptions, less commissions, will be divided by
the amount of the total subscriptions, less commissions, made by both the
incoming and the prior partners to obtain the percentage of the costs to be
paid by all partners. This percentage will be multiplied by the organization
cost to produce the dollar amount to be deducted from the subscription of the
incoming partners. The cash produced by that deduction will be added to the
net asset value of the partnership. This will result in an increase in the
net asset value for all partnership interests previously sold. The cash
subscription amount remaining for each incoming partner will be used to
purchase partnership interests at the increased net asset value. The
incoming partners will join with the previously admitted partners to share in
the increase of net asset value that results from the admission of future
partners until either the maximum number of partnership interests are sold or
the offering terminates.
Initial partners in the partnership paid 8.62% of their subscription for
offering expenses at the time of distribution, and upon full subscription to
the fund all partners will have paid 0.92%.
After the subscriptions are deposited in good funds to the partnership bank
account, the general partners will transfer the money to the partnership
accounts at the futures commission merchant and allocate trading equity to
the commodity trading advisors.
At the end of each month, the actual management fees, brokerage commissions
and fixed commissions identified under Charges to the Partnership are paid by
the Partnership.
The general partner has sole authority to determine the percentage of our
assets that will be:
* held on deposit with the futures commission merchant
* used for other investments, and
* held in bank accounts to pay current obligations.
The general partner expects to deposit substantially all of our net assets
with the futures commission merchant for trading by the trading advisors.
However, 3% of the previous month's net assets are expected to be retained in
our bank accounts to pay expenses and redemptions.
We use only cash and cash equivalents, such as United States Treasury Bills,
to satisfy margin requirements. All entities that will hold or trade our
assets will be based in the United States and will be subject to United
States regulations.
The general partner believes that between 20% to 40% of our assets will
normally be committed as margin for commodity futures contracts. However,
from time to time, the percentage of assets committed as margin may be
substantially more, or less, than such range. All interest income is used
for the partnership's benefit. To estimate interest income earned upon our
deposits, the general partner has assumed that:
* between 20% and 40% of our net assets will be used for margin upon trades,
and
* we will receive 6% interest on our available balances.
Note that the futures commission merchant may increase margins applicable to
us at any time.
Determination Of The Offering Price
The general partner initially set the value of each unit of partnership
interest for sale at $l,000. Currently, we are offering partnership
interests at their net unit value, or the price per unit equal to our net
assets divided by the number of outstanding units of partnership interests.
This amount is calculated after the close of business on the last business
day of the month in which the general partner accepts a duly executed
subscription agreement and subscription amount from you. You are admitted as
a partner on the open of business on the first day of business of the
following month.
The General Partner
Identification
We are managed by two general partners, Belmont Capital Management, Inc. and
Mrs. Shira Del Pacult. See Management's Discussion and Analysis of Financial
Condition, The General Partners.
The Belmont December 31, 1999, audited and May 31, 2000, unaudited balance
sheet, income statement, statement of cash flows and statement of changes in
stockholders' equity are included in this prospectus. Also, see Experts.
The general partner has caused this partnership to be formed and available
for this offering, but has performed other business activities only since
July 11, 2000.
You will not acquire or otherwise have any interest in Belmont, the corporate
general partner, or any partnership other than Bromwell, by purchasing the
partnership interests offered by the prospectus.
Shira Del Pacult
Mrs. Pacult, age 44, is:
* one of the general partners
* the sole shareholder, director, principal, and officer of the corporate
general partner, and
* a principal, officer, director and 50% shareholder of Futures Investment
Company, the selling agent and introducing broker, of which her husband is
also a principal and holds the other 50%.
She graduated Phi Beta Kappa from the University of California, at Berkeley,
in 1979. From 1980 to 1981, she was employed by a real estate developer in
Sonoma County, California, as an administrative assistant. From 1981 - 1983
she was employed by Heinold Commodities, Inc., Chicago, IL, to assist in the
development of the Commodities Options Department. She became a senior
account executive at Heinold and was a member of the President's Council, a
select group appointed to advise the firm on all matters of business
practice.
In 1983, Mrs. Pacult and her husband established Futures Investment Company,
an Illinois corporation, to sell futures investments managed by independent
commodity trading advisors to retail clients. Presently, Futures Investment
Company is located at 5916 N. 300 West, P.O. Box C, Fremont, Indiana, 46737,
and maintains clearing agreements with Refco, Inc., Vision Limited
Partnership, and ABN AMRO Incorporated.
In addition to the partnership interests offered pursuant to this prospectus,
Futures Investment Company offers for sale, on a best efforts basis,
securities of other issuers and engages in other broker-dealer activities.
As of May 31, 2000, Mrs. Pacult had a net worth of $1,864,000, which consists
of real estate that is not readily marketable.
Mrs. Pacult is a member of the National Association of Introducing Brokers,
and is an affiliated person and registered representative of Futures
Investment Company, which is a member of the National Futures Association and
the National Association of Securities Dealers, Inc.
Mrs. Pacult also manages several other commodity pools. Though Mrs. Pacult
provides less than her full time to the business affairs of the partnership,
she devotes what time she believes is necessary to properly handle her
responsibilities as a general partner and as the principal of the corporate
general partner. See Management's Discussion and Analysis of Financial
Condition, The General Partners.
Ownership In Commodity Trading Advisors And Futures Commission Merchant
Neither Mrs. Pacult, nor any of her affiliates, has any ownership in the
commodity trading advisors or the futures commission merchant. Mr. Michael
Pacult, Mrs. Pacult's husband, will have no ownership or role in the
management of the partnership or Belmont Capital Management, Inc. However,
he is an associated person, officer and fifty percent shareholder in Futures
Investment Company. Mr. Pacult is also expected to sell partnership
interests in jurisdictions where he is licensed to sell securities.
Trading By The General Partner; Interest In The Pool
Belmont Capital Management, Inc. and Mrs. Pacult, may, from time to time,
trade commodity interests for their own accounts. The records of any such
trading activities will not be made available to you. As stated earlier, the
general partners will not knowingly take positions on their behalf that would
be ahead of identical positions taken on behalf of the partnership.
No Prior Performance And Regulatory Notice
We sold the minimum required to allow us to commence trading on July 11,
2000. We expect to have our first audit after the year end on December 31.
Accordingly, we do not have an audited performance history.
The regulations of the Commodity Futures Trading Commission and the National
Futures Association prohibit any representation by a person registered with
the Commodity Futures Trading Commission or by any member of the National
Futures Association, respectively, that such registration or membership in
any respect indicates that the Commodity Futures Trading Commission or the
National Futures Association, as the case may be, has approved or endorsed
such person or such person's trading programs or objectives. The
registrations and memberships described in this prospectus must not be
considered as constituting any such approval or endorsement. Likewise, no
commodity exchange has given or will give any such approval or endorsement.
Trading Management
No Affiliation With Commodity Trading Advisors
The trading advisors are not affiliated with either general partner.
Additionally, the general partner will not serve as a trading advisor or
select any other trading advisors to trade that are affiliated with either
general partner. See The Commodity Trading Advisors for a summary of the
trading advisors' performance information.
Rights of the General Partner With Respect To Commodity Trading Advisor
Selection And Allocation Of Equity
The general partner believes that a trading advisor should be retained on a
medium to long-term basis and should be allowed to fully implement its
trading strategy. However, the general partner may, in its sole discretion
and without notice to you:
* terminate any current or future trading advisor
* select additional trading advisors, or
* change the allocation of equity to any trading advisor.
The general partner periodically reviews our performance to determine if a
current trading advisor should be changed or if others should be added. In
doing so, the general partner may use computer generated correlation analysis
or other types of automated review procedures to evaluate trading advisors.
If a trading advisor is replaced, the new trading advisor will receive
incentive fees independent of the previous trading advisor's performance.
As the general partner has engaged more than one trading advisor, the
following may possibly occur:
* we may pay an incentive fee to one trading advisor which is trading
profitably while the other trading advisor produces losses which cause us to
be unprofitable overall
* as the trading advisors trade independently, they may compete for similar
positions or take positions opposite each other, which may limit our
profitability.
Performance Record of the Partnership
The partnership began trading on July 11, 2000, and does not yet have an
audited track record.
The Commodity Trading Advisors
The general partner has engaged two commodity trading advisors to trade for
the partnership, Ansbacher Investment Management, Inc. and Mangin Capital
Management, Inc. On July 11, 2000, Ansbacher was assigned the value of the
partnership equity minus payment of organization and offering expenses and a
3% cash reserve. Once this prospectus, as amended and restated, becomes
effective, trading equity will be assigned to Mangin as determined by the
General Partner, and the balance will be traded by Ansbacher. Thereafter,
the General Partner will assign equity so that 70% of total equity is
assigned to Ansbacher and 30% is assigned to Mangin.
Ansbacher Investment Management, Inc.
Ansbacher Investment Management, Inc., a New York corporation, is a commodity
trading advisor, and its Main Business Office and main business telephone
are: 45 Rockefeller Plaza, 20th Floor, New York, New York 10111; telephone
(212) 332-3280. The trading advisor's books and records will be kept and made
available for inspection at the main business office.
Business Background
The business background for at least five (5) years for Ansbacher Investment
Management, Inc is as follows:
Ansbacher Investment Management, Inc. became registered as a commodity
trading advisor and as a commodity pool operator with the Commodity Futures
Trading Commission on December 14, 1995, and is also a member in good
standing of the National Futures Association in each such capacity. The
trading advisor's registration with the Commodity Futures Trading Commission
and its membership in the National Futures Association must not be taken as
an indication that any such agency or self-regulatory body has recommended or
approved it or the program offered hereby.
Max G. Ansbacher is the president and principal of Ansbacher Investment
Management, Inc. and is also the sole shareholder. Mr. Ansbacher is directly
responsible for all its trading and money management decisions. From 1975
through January 1996, Mr. Ansbacher was employed by Bear, Stearns & Co.,
Inc., a stock brokerage and registered futures commission merchant, where at
the time of his departure, he was an associate director and an associated
person who regularly managed futures accounts for a number of his clients on
a discretionary basis.
Mr. Ansbacher is the author of The New Options Market, Revised Edition
(Walker & Co., 1975). Mr. Ansbacher is also the author of How to Profit from
the Coming Bull Market published by Prentice-Hall in 1981, and The Stock
Index Market published by Walker & Co. in 1983. Mr. Ansbacher is the creator
of The Ansbacher Index, which is broadcast weekly on CNBC. This index was
created to determine stock market sentiment by analyzing the ratio of the
prices of puts and calls on a stock market index. Mr. Ansbacher has given
lectures on options at over 24 investment conferences throughout the United
States and overseas.
Mr. Ansbacher was graduated from the University of Vermont in 1957, from Yale
University Law School in 1960, and received an advanced law degree from New
York University Law School in 1963.
Mr. Ansbacher is a member of the Board of Directors of The Burden Center for
the Aging, a social services organization for the aged, and is the Chairman
of its Finance Committee. He is also a member of the Board of Directors of
The Fortune Society, an organization which assists ex-offenders in becoming
gainfully employed citizens, and he serves as both its Treasurer and its
Secretary.
Erin Tower is the Executive Vice President of Ansbacher Investment
Management, Inc. She is responsible for macro economic research, for liaison
with brokerage firms, and for client relationships. Before coming to
Ansbacher Investment Management, Inc. in November 1995, Ms. Tower was
employed by Bear, Stearns & Co., Inc. for nearly sixteen years, from June
1981 to September 30, 1995, as a registered representative and an associated
person who handled both stock and futures accounts for a large number of
clients, including individual investors and small institutional investors.
Ms. Tower graduated cum laude from Columbia University and was elected to Phi
Beta Kappa. After graduation she worked for Nikko Securities in New York City
before joining Bear, Stearns & Co., Inc. She is currently an investment
advisor to the Community Church of New York City.
The past performance record of Ansbacher Investment Management, Inc. and its
principal, Mr. Ansbacher, is set forth below under Performance Record Of The
Commodity Trading Advisor.
Ansbacher Investment Management, Inc. and its principal may trade commodity
interests for their own accounts, and the records of such trading, and any
written policies relating to such trading, will not be made available to you
for inspection.
Description Of Trading Program
The following description of Ansbacher Investment Management, Inc. and its
trading methods and strategies is general and is not intended to be
exhaustive. Commodity trading methods are proprietary and complex, so only
the most general descriptions are possible; no attempt has been or could be
made to provide a precise description of Ansbacher Investment Management,
Inc.'s strategy. While it believes that the description of its methods and
strategies included herein may be of interest to you, you must be aware of
the inherent limitations of such description.
The objective of Ansbacher Investment Management, Inc.'s strategy is to
achieve substantial capital appreciation through the speculative trading of
futures contracts, options on futures contracts and potentially forward
contracts, and other futures-related interests, which objective entails a
comparatively high level of risk. Ansbacher Investment Management, Inc.
currently engages in a program of selling or writing options, consisting of
both puts and calls, on stock index futures. However, in the future,
Ansbacher Investment Management, Inc. may trade a broader portfolio of
options, futures and cash markets and potentially forward markets, including
agricultural products, metals, currencies, financial instruments, and stock,
financial and economic indices. Ansbacher Investment Management, Inc. may
trade these commodity interests on any U.S. exchange.
Ansbacher Investment Management, Inc. uses a systematic approach to trading
in that it relies heavily on a program of selling or writing options on stock
index futures. Ansbacher Investment Management, Inc. may also, from time to
time, purchase options. The program depends upon both technical and
fundamental considerations and is implemented by selecting how many puts and
how many calls, and which prices and maturities of each. The technical
indicators will include the prices of various options, both in absolute terms
in relation to their historic price levels, and in relative terms comparing
the prices of puts to the prices of similar calls. In this respect, Ansbacher
Investment Management, Inc. may rely upon the current reading of The
Ansbacher Index. The fundamental considerations include the condition of the
stock market, its trend and its volatility as well as business, political and
economic forces which can influence the stock market.
In addition, Ansbacher Investment Management, Inc. may take positions in the
futures markets, including stock index and bond futures, based upon
fundamental considerations such as historical price patterns, or technical
considerations such as trend following. Ansbacher Investment Management, Inc.
may in the future trade a broader portfolio of commodity interests.
Ansbacher Investment Management, Inc. from time to time may change or refine
the trading systems employed.
Performance Record Of The Commodity Trading Advisor
The following information describes the composite actual performance of all
customer accounts managed by AIM and by Max G. Ansbacher, the principal of
AIM, as an Associated Person of a registered futures commission merchant. As
of March 31, 2000, AIM and Mr. Ansbacher were managing approximately
$30,425,000 of client funds in the futures markets pursuant to the trading
strategy described above. All performance information is current as of March
31, 2000. Ansbacher Investment Management, Inc. does not currently offer any
trading strategy or program to clients other than the strategy described
herein.
Accounts maintained at Vision Limited Partnership, an FCM, are separately
presented and pay fees which may be materially different rates from those
accounts presented as the "general program." In reviewing the performance of
Ansbacher Investment Management, Inc. and its principal, you should
understand that such performance is calculated on the accrual basis and in
accordance with generally accepted accounting principles and is net of all
fees and charges and includes interest income applicable to the accounts
comprising the composite performance record. Past performance is not
necessarily indicative of future results.
Mr. Ansbacher has implemented the trading strategy described herein utilizing
his proprietary funds since September 1990.
Ansbacher Investment Management, Inc. - General Program
The following capsule shows the past performance of Ansbacher Investment
Management, Inc. - General Program since the inception of trading of the first
account (in May, 1994) and year-to-date (through June 30, 2000). Past
performance is not necessarily indicative of future results.
Ansbacher Investment Management, Inc. - General Program
Percentage Rate of Return
(Computed on a compounded monthly basis)*
Month 2000 1999 1998 1997 1996 1995 1994
January (5.16) (1.20) 1.51 20.84 2.23 3.26 N/A
February 1.86 3.83 13.60 (0.72) (3.51) (0.41) N/A
March (6.12) 8.45 8.01 5.08 2.90 1.27 N/A
April (19.95) (1.99) 1.83 5.98 1.99 2.93 N/A
May 4.52 (1.95) (3.14) 14.25 3.22 0.61 1.70
June 8.96 8.58 6.42 4.28 6.17 1.82 (2.90)
July (5.22) (3.64) 11.22 (12.72) 2.28 6.31
August (3.12) (2.23) (5.84) 5.86 2.76 0.49
September 4.49 (6.47) 4.21 7.90 (0.22) (1.80)
October (7.69) (7.01) (13.53) 0.29 3.00 4.33
November 6.40 7.20 20.26 12.94 3.20 2.27
December 8.62 9.44 7.90 (6.47) 2.06 3.76
Year (17.32) 23.54 25.68 94.93 19.81 24.95 14.69
Name of CTA: Ansbacher Investment Management, Inc.
Name of the Trading Program: General Program
Date of Commencement of Program Trading: May, 1994
Number Of Accounts In Trading Program: 11
Total Assets Under Management: $24,140,000
Total Asses Traded Pursuant to Program: $8,500,000
Largest Monthly Draw-Down**: 10-97/33.4%****
Worst Peak-to-Valley Draw-Down***: 10-97/33.4%****
* Rate of Return is computed by dividing net performance by beginning net asset
value for the period. For those months when additions or withdrawals exceed
ten percent of beginning net assets, the Time-Weighting of Additions and
Withdrawals method is used to compute rates of return.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool, account
or trading program during any period in which the initial month-end net asset
value is not equaled or exceeded by a subsequent month-end net asset value.
**** These largest one month and peak-to-valley draw-downs occurred in one
account which was traded in a particularly aggressive manner at client
request. For all managed accounts, the average largest one month draw-down
was (13.53%) and the largest peak-to-valley draw-down was (16.37)%.
Ansbacher Investment Management, Inc. - Retail Accounts
The following capsule shows the past performance of Ansbacher Investment
Management, Inc. - Retail Accounts since the inception of trading of the first
account (in September, 1988) and year-to-date (through June 30, 2000). Past
performance is not necessarily indicative of future results.
Ansbacher Investment Management, Inc. - Retail Accounts
Percentage Rate of Return
(Computed on a compounded monthly basis)*
Month 2000 1999 1998
January 1.94 3.70 N/A
February (3.32) 2.24 N/A
March 1.78 4.85 N/A
April (11.16) (5.03) N/A
May 3.12 (2.92) N/A
June 6.32 7.49 N/A
July (9.36) N/A
August (5.30) N/A
September 4.84 0.44
October (10.54) (1.56)
November 3.15 5.11
December 4.51 5.06
Year (2.30) (4.39) 9.18
Name of CTA: Ansbacher Investment Management, Inc.
Name of the Trading Program: Retail Accounts
Date of Commencement of Program Trading: September, 1998
Number Of Accounts In Trading Program: 277
Total Assets Under Management: $24,140,000
Total Asses Traded Pursuant to Program: $15,640,000
Largest Monthly Draw-Down**: 10-99/19.0%****
Worst Peak-to-Valley Draw-Down***: 4-99 to 3-00/20.4%****
* Rate of Return is computed by dividing net performance by beginning net asset
value for the period. For those months when additions or withdrawals exceed
ten percent of beginning net assets, the Time-Weighting of Additions and
Withdrawals method is used to compute rates of return.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool, account
or trading program during any period in which the initial month-end net asset
value is not equaled or exceeded by a subsequent month-end net asset value.
**** These largest one month and peak-to-valley draw-downs occurred in one
account which was traded in a particularly aggressive manner at client
request. For all managed accounts, the average largest one month draw-down
was (13.53%) and the largest peak-to-valley draw-down was (16.37)%.
Mangin Capital Management, Inc.
Mangin Capital Management, Inc., a New Jersey corporation, was formed on
April 14, 1998. Mangin Capital Management, Inc. is the successor to Douglas
Scott Mangin, sole proprietor, as a CTA. Mr. Mangin was originally
registered as a CTA, and became a member of the NFA, on November 20, 1995.
The effective date of registration of Mangin Capital Management, Inc. as a
CPO was May 27, 1998. The sole Principal of Mangin Capital Management, Inc.
is Douglas Scott Mangin. The trading advisor's business address is RD#1 -
111A Pleasantville Road, Basking Ridge, New Jersey 07920; telephone (973)
455-1411. The trading advisor's books and records will be kept and made
available for inspection at the main business office.
Business Background
The business background for at least five (5) years for Mangin Capital
Management, Inc is as follows:
Mr. Mangin has been the President and sole stockholder of Mangin Capital
Management, Inc. since its inception. Since February 1993, Mr. Mangin has
been devoting all of his time to managing proprietary assets, analyzing
markets, and researching trading programs. From February 1991 through
January 1993, Mr. Mangin traded municipal bonds for Glen Rauch and Company, a
New York City investment firm. From August 1988 through January 1991, Mr.
Mangin traded financial futures for DSM & Company, an investment firm.
The past performance record of Mangin Capital Management, Inc. and its
principal, Mr. Mangin, is set forth below under Performance Record Of The
Commodity Trading Advisor.
Description Of Trading Program
The exact nature of Mangin Capital Management, Inc.'s trading strategy is
proprietary and confidential. The following description is of necessity
general and is not intended to be exhaustive.
The DSM 1 Trading Program will be used by the trading advisor to manage
customer assets. Within a framework of strict money-management and risk-
control parameters, a technical methodology is followed with rigid discipline
to determine the price at which trading positions should be established or
liquidated.
Technical information evolves from the theory that a study of the markets
themselves will provide a means of anticipating future prices. A technical
trader will review such factors as, including but not limited to, long and
short term chart analysis, the price of a commodity in relation to its price
during previous periods, momentum, stochastic, commodity price channels, open
interest, and volume. Decisions whether to trade a particular commodity are
also based upon various factors, including liquidity and diversification,
both historical and at a given time.
The DSM 1 Trading Program's time frame is generally long-term in nature, with
a majority of profitable trades lasting longer than six weeks and many
lasting for several months. This built-in patience allows the trading
program to profit from extended and substantial price moves while permitting
less significant volatility accompanying in any long-term shift in prices.
However, when a new trade turns quickly unprofitable, the risk control
parameters in place for every trade will force a liquidation at a preset loss
level, generally set between 4% and 6.5% of a portfolio's entry trading
value. In such situations, a trade may last for as little as one day. The
DSM 1 Trading Program's time frame is short-term in nature with respect to
trading in the S&P, with trades lasting from less than one day to six days.
The DSM 1 Trading Program's money-management and risk-control system consists
of comprehensive analyses of expected return correlations and portfolio
diversification in order to efficiently allocate capital. The system also
incorporates pre-defined levels of risk for every trade in an attempt by the
advisor to minimize adverse movements.
The DSM 1 Trading Program portfolio includes currencies (approximately 25%),
interest rate contracts (approximately 20%), S&P (approximately 35%), and
non-financial markets (approximately 20%). The currencies traded pursuant to
the DSM 1 Trading Program currently include the British Pound Sterling, the
Canadian Dollar, the Euro, the Swiss Franc and the Japanese Yen. The
interest rate contracts traded pursuant to the DSM 1 Trading Program
currently include United States Bonds and Treasury Notes, and Eurodollars.
The DSM 1 Trading Program currently trades copper, natural gas, cotton and
crude oil in the non-financial markets.
The DSM 1 Trading Program is a long-term trading system, and does not employ
day-trading strategies. The advisor estimates that the DSM 1 Trading Program
will trade 750 to 1,250 contracts per year per $1 million under management,
subject to market conditions.
The average commitment of assets to margin, based on exchange minimum
margins, is expected to be approximately 20% to 40%. Factors which could
affect either the percentage of assets committed to margin or the commission
to equity percentage include, but are not limited to, commission charges,
market conditions and the trading methods of the advisor.
The trading advisor emphasizes current and ongoing research and analysis of
market behavior to develop additional strategies and expand into additional
markets. As a result of such continued research, the trading methods and
markets used in the future might differ from those presently being used.
Participants will not necessarily be informed with respect to such changes in
the advisors' methods or markets. Additionally, as situations warrant and
the advisor feels it prudent to attempt to reduce losses, increase profits or
reduce risk exposure, an election to override the programmed nature of the
system will be made. There is no assurance that any such decision to
override the technical nature of the system will be beneficial or that the
performance of the advisor will result in profitable trading.
Performance Record Of The Commodity Trading Advisor
Table A that follows is an actual performance history of the Mangin Capital
Management, Inc., including the performance of Mr. Mangin, as a sole
proprietor. Mr. Mangin traded one account prior to his registration as a CTA
in November 1995 pursuant to an exemption provided under S4m of the Commodity
Exchange Act.
Fees charged to clients included an incentive fee on net new profits equal to
15% (paid monthly) commencing in January 1996. No management fees were
charged to or paid by clients until June 1999, when a 2% annual management
fee was instituted. The actual fees paid by customers included brokerage
commissions at the rate of $20 to $35 per round turn, plus National Futures
Association and exchange fees.
The information in Table A has not been audited. However, the trading
advisor believes that such information is accurate and fairly presented.
Mangin Capital Management, Inc. - DSM 1 Trading Program - Table A
The following capsule shows the past performance of Mangin Capital Management,
Inc. - DSM 1 Trading Program - Table A since January 31, 1995 through year-to-
date (June 31, 2000). Past performance is not necessarily indicative of future
results.
Mangin Capital Management, Inc. - DSM 1 Trading Program - Table A
Percentage Rate of Return
(Computed on a compounded monthly basis)*
Month 2000 1999 1998 1997 1996 1995
January 11.04 19.56 13.37 3.14 119.65 (17.13)
February 1.43 16.39 (12.80) (2.01) (5.60) 39.61
March 7.97 12.64 2.13 5.17 21.08 75.75
April (9.07) 20.97 0.95 0.74 4.84 39.86
May 7.48 0.12 1.22 7.27 16.63 (8.31)
June (24.01) 11.22 19.14 0.00 2.14 (14.34)
July 3.61 (10.16) 14.47 6.14 3.48
August 16.51 17.17 (7.31) (9.71) 53.43
September (5.01) 13.13 2.82 (2.06) (25.55)
October (12.42) 5.76 8.45 35.06 31.81
November (3.16) 2.54 1.79 11.73 (14.73)
December 8.06 (11.10) 12.76 19.83 (24.43)
Year (9.69) 121.89 41.09 55.96 432.00 124.28
Name of CTA: Mangin Capital Management, Inc.
Name of the Trading Program: DSM 1 Trading Program - Table A
Date of Commencement of Program Trading: July 1, 1992
Number Of Accounts In Trading Program: 3
Total Assets Under Management: $1,270,000
Total Asses Traded Pursuant to Program: $1,270,000
Largest Monthly Draw-Down**: 9-95/25.55%
Worst Peak-to-Valley Draw-Down***: 9-95 to 12-95/36.76%
* Rate of Return is computed by dividing net performance by beginning net asset
value for the period. For those months when additions or withdrawals exceed
ten percent of beginning net assets, the Time-Weighting of Additions and
Withdrawals method is used to compute rates of return.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool, account
or trading program during any period in which the initial month-end net asset
value is not equaled or exceeded by a subsequent month-end net asset value.
The following capsule shows the past performance of Mangin Capital Management,
Inc. - Affinity I Partners, LP since inception (May, 2000) through year-to-date
(June 30, 2000). Past performance is not necessarily indicative of future
results.
Mangin Capital Management, Inc. - Affinity I Partners, LP
Percentage Rate of Return
(Computed on a compounded monthly basis)*
Month 2000
January N/A
February N/A
March N/A
April N/A
May 9.17
June (25.35)
Year (18.50)
Name of Pool: Affinity I Partners, LP
How Offered: Privately Offered
Name of Commodity Trading Advisor: Mangin Capital Management, Inc.
Principal Protected: No
Date of Inception of trading: May, 2000
Net Asset Value of the pool: $274,708 on total units outstanding: 337.4
Net Asset Value Per Unit: $814.19
Largest Monthly Draw-Down**: 6-00/25.35%
Worst Peak-to-Valley Draw-Down***: 6-00/25.35%
* Rate of Return is computed by dividing net performance by beginning net asset
value for the period. For those months when additions or withdrawals exceed
ten percent of beginning net assets, the Time-Weighting of Additions and
Withdrawals method is used to compute rates of return.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool, account
or trading program during any period in which the initial month-end net asset
value is not equaled or exceeded by a subsequent month-end net asset value.
Performance Record Of Other Programs Sponsored By The General Partner
The following is a summary of the prior performance of the other programs
sponsored by the general partner and its affiliates.
Mrs. Shira Del Pacult has sponsored two other public commodity pools, Fremont
Fund, LP and Atlas Futures Fund, LP. She is also the principal of the
corporate general partner of Auburn Fund, LP, a privately placed commodity
pool.
Performance Record of Fremont Fund, Limited Partnership
Mrs. Pacult serves as an individual general partner and as the principal of a
corporate general partner, Pacult Asset Management, Inc., both of which
manage another commodity pool called Fremont Fund, Limited Partnership.
Fremont Fund, LP was declared effective August 12, 1996 and has been trading
since November, 1996. The fund was originally traded by a single commodity
trading advisor who suffered a long trading slump that coincided with the
fund's inception of trading. Since that time, several other trading advisors
have been employed, but haven't traded profitably. The fund is now traded by
one trading advisor, Bell Fundamental Futures, LLP.
Fremont Fund pays various expenses in relation its operation including:
* a monthly management fee of 1/3 of 1%, or 4% annually, to its trading
advisors
* a monthly management fee of 1/6 of 1%, or 2% annually, to its corporate
general partner
* a quarterly incentive fee of 15% on all new net profits to its trading
advisors
* a monthly trading fee of 1%, or 12% annually, to its introducing broker.
The following capsule shows the past performance of Fremont Fund, LP for the
period from inception of trading in November, 1996, through June 30, 2000.
Past Performance Is Not Necessarily Indicative Of Future Results.
You will receive no interest in Fremont Fund or any other entity except
Bromwell by your purchase of partnership interests in Bromwell Financial Fund
offered by this prospectus.
Fremont Fund, Limited Partnership
Percentage Rate of Return
(Computed on a compounded monthly basis)*
2000
(Jan - Jun) 1999 1998 1997 1996
(0.69) (5.87) (11.15) (12.21) (6.69)
Name of Pool: Fremont Fund, LP
How Offered: Publicly offered pursuant to Form S-1 Registration Statement
Name of Commodity Trading Advisor: Bell Fundamental Futures, L.L.C.
Principal Protected: No
Date of Inception of trading: November, 1996
Net Asset Value of the pool: $264,727 on total units outstanding: 469
Net Asset Value Per Unit: $675.33
Largest Monthly Draw-Down**: 3-99/13.29%
Worst Peak-to-Valley Draw-Down***: 11-96 to 5-00/41.0%
* Rate of Return is computed by dividing net performance by beginning net asset
value for the period. For those months when additions or withdrawals exceed
ten percent of beginning net assets, the Time-Weighting of Additions and
Withdrawals method is used to compute rates of return.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool, account
or trading program during any period in which the initial month-end net asset
value is not equaled or exceeded by a subsequent month-end net asset value.
Performance Record Of Atlas Futures Fund, Limited Partnership
Mrs. Pacult serves as an individual general partner and as the principal of a
corporate general partner, Ashley Capital Management, Inc., both of which
manage another commodity pool called Atlas Futures Fund, Limited Partnership.
Atlas Futures Fund, LP was declared effective by the Securities and Exchange
Commission on September 3, 1999. It commenced trading on October 15, 1999.
Atlas Futures Fund, Limited Partnership is traded by Clarke Capital
Management, Inc.
Atlas Futures Fund pays various expenses in relation its operation including:
* a monthly management fee of 1/4 of 1%, or 3% annually, to its trading
advisor
* a monthly management fee of 1/12 of 1%, or 1% annually, to its corporate
general partner
* a quarterly incentive fee of 20% on all new net profits to its trading
advisor
* a monthly trading fee of 3/4%, or 9% annually, to its introducing broker.
The following capsule shows the past performance of Atlas Futures Fund, LP for
the period from inception of trading in October, 1999 through June 30, 2000.
Past Performance Is Not Necessarily Indicative Of Future Results.
You will receive no interest in Atlas Futures Fund or any other entity except
Bromwell by your purchase of partnership interests in Bromwell Financial Fund
offered by this prospectus.
Atlas Futures Fund, Limited Partnership
Percentage Rate of Return
(Computed on a compounded monthly basis)*
2000 (Jan - Jun) 1999 (Oct - Dec)
9.68 (4.88)
Name of Pool: Atlas Futures Fund, LP
How Offered: Publicly offered pursuant to Form S-1 Registration Statement
Name of Commodity Trading Advisor: Clarke Capital Management, Inc.
Principal Protected: No
Date of Inception of trading: October, 1999
Net Asset Value of the pool: $3,671,801 on total units outstanding: 3,519
Net Asset Value Per Unit: $1,043.42
Largest Monthly Draw-Down**: 12-99/6.45%
Worst Peak-to-Valley Draw-Down***: 12-99 to 3-00/14.10%
* Rate of Return is computed by dividing net performance by beginning net asset
value for the period. For those months when additions or withdrawals exceed
ten percent of beginning net assets, the Time-Weighting of Additions and
Withdrawals method is used to compute rates of return.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool, account
or trading program during any period in which the initial month-end net asset
value is not equaled or exceeded by a subsequent month-end net asset value.
Performance Record of Auburn Fund, Limited Partnership
Mrs. Pacult serves as the principal of a corporate general partner, Pacult
Asset Management, Inc., which manages a commodity pool called Auburn Fund,
Limited Partnership. Auburn Fund, LP is offered via a private placement
memorandum pursuant to Rule 506 of Regulation D and commenced trading in
April, 1998. The fund is traded by Ansbacher Investment Management, Inc.,
Bell Fundamental Futures, LLP., SMO Capital Management, Inc. and Creative
Capital Management, Inc.
Auburn Fund pays various expenses in relation its operation including:
* a monthly management fee of 1/4 of 1%, or 3% annually, to its trading
advisors
* a monthly management fee of 1/4 of 1%, or 3% annually, to its corporate
general partner
* a quarterly incentive fee of 15% on all new net profits to its trading
advisors
* a monthly trading fee of _%, or 9% annually, to its introducing broker.
The following capsule shows the past performance of Auburn Fund, LP for the
period from inception of trading in November, 1996, through June 30, 2000.
Past Performance Is Not Necessarily Indicative Of Future Results.
You will receive no interest in Auburn Fund or any other entity except
Bromwell by your purchase of partnership interests in Bromwell Financial Fund
offered by this prospectus.
Auburn Fund, Limited Partnership
Percentage Rate of Return
(Computed on a compounded monthly basis)*
2000 (Jan - Jun) 1999 1998
(16.71) (6.21) (7.75)
Name of Pool: Auburn Fund, LP
How Offered: Privately offered pursuant to Regulation D 506 offering
Name of CTA: Ansbacher, Bell, SMO and Creative
Principal Protected: No
Date of Inception of trading: April, 1998
Net Asset Value of the pool: $1,625,569 on total units outstanding: 2,255
NAV Per Unit: $720.73
Largest Monthly Draw-Down**: 4-00/13.59%
Worst Peak-to-Valley Draw-Down***: 4-98 to 4-00/34.6%
* Rate of Return is computed by dividing net performance by beginning net asset
value for the period. For those months when additions or withdrawals exceed
ten percent of beginning net assets, the Time-Weighting of Additions and
Withdrawals method is used to compute rates of return.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool, account
or trading program during any period in which the initial month-end net asset
value is not equaled or exceeded by a subsequent month-end net asset value.
The Futures Commission Merchant
The general partner has selected Vision Limited Partnership, One Whitehall
Street, 15th floor, New York, New York, 10004 to serve as our futures
commission merchant. It holds, supervises and controls approximately 97% of
all of our equity on deposit which is used for trading by the commodity
trading advisors. Vision is registered as a futures commission merchant
pursuant to the Commodity Exchange Act and is a member of the National
Futures Association. As required by law, the general partner will provide
notice to you within 21 days of any change in the futures commission
merchant.
Regulations of the Commodity Futures Trading Commission require disclosure of
any material administrative, civil, or criminal actions against the futures
commission merchant, or any of its principals, within five years of the date
of this prospectus. These disclosures are made in the prospectus under the
caption Legal Matters - Litigation and Claims.
The inclusion in this prospectus of the identity and certain disclosure
information for Vision as the futures commission merchant does not mean that
it has endorsed or passed upon the sufficiency of this prospectus or the
suitability of an investment in this partnership for any prospective
purchaser, or that it will be involved in the management of the partnership
or the sale of units.
All equity of the partnership used for trading by the commodity trading
advisors is held on deposit under the supervision and control of Vision.
Currently, Vision charges the partnership the exchange minimums for margin
for each position held over-night; provided, however, for positions traded on
the Chicago Board of Trade, the margin for the partnership is 125% of
exchange minimum. The margin requirements are revised by the various
exchanges and Vision, from time to time. The general partner has instructed
the trading advisors to make no trades that are outside the United States or
that require margin in other than U.S. Currency. If those trades were
permitted at some time in the future, certain exchanges outside the U.S.
would be margined in the local currency. Accordingly, for trades selected by
a commodity trading advisor on those exchanges, the partnership would be
exposed to changes in the exchange rate for those currencies while any of
those positions are held.
Vision is a non-clearing futures commission merchant, meaning the trading
advisors' trades are placed through another futures commission merchant with
the power to execute trades directly with the commodity exchange. To do
this, Vision has established a clearing arrangement with Lind-Waldock &
Company which allows Vision to be responsible for trades made by Ansbacher
and Mangin on all U.S. commodity exchanges.
Lind-Waldock is located at 1030 West Van Buren Street, Chicago, IL 60607.
Lind-Waldock is a clearing member of all principal futures exchanges in the
United States.
See disclosures as to litigation during the past 5 years regarding Vision and
Lind-Waldock & Company under Legal Matters.
Federal Income Tax Aspects
Scope Of Tax Presentation
This presentation is based on:
* the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder which were in effect on November 30, 1999,
and
* the express intent of the general partner to:
* operate the partnership as authorized and limited by the limited
partnership agreement, and
* cause us to invest only our equity capital and not to borrow money to
operate the partnership , and
* the belief by the general partner that no less than ninety percent of the
income generated by us will be from interest income and the trade of
commodities.
Any change in the Internal Revenue Code or deviation from the above
intentions could alter this presentation and also have adverse tax
consequences on this partnership and you. For instance, if we were taxed as
a corporation, we would pay tax and you would have to pay a second tax. In
addition, if we were taxed as a corporation, none of the deductions for
expenses would pass through to your tax return.
If we are audited by the IRS, significant factual questions may arise which,
if challenged by the IRS, might only be resolved at considerable legal and
accounting expense to both you and us. Any adjustment made to our return
will flow through to your return and could result in a separate audit of your
individual return. We will report our income for tax and book purposes under
the accrual method of accounting and our tax year will be the calendar year,
or such other period as is required under section 706(b) of the Internal
Revenue Code. During taxable years in which little or no profit is generated
from trading activities, you may still have interest income which will be
taxed to you as ordinary income.
This discussion assumes you are an individual and is not intended as a
substitute for careful planning; particularly, since the income tax
consequences of an investment in the partnership will not be the same for all
taxpayers. Accordingly, you are urged to consult your tax advisors with
specific reference to your tax situation.
All matters upon which we have obtained an opinion of tax counsel are
discussed under the caption Tax Opinion below.
No Legal Opinion As To Certain Material Tax Aspects
We will not request a legal opinion in regard to any State income tax issue.
In addition, our tax counsel can not opine upon:
* any Federal income tax issue which involves a determination by the IRS of
the facts related to our operation, or
* any other matter which may be subject to IRS interpretation or adjustment
upon audit.
For example, commodity trading advisor fees are aggregated with employee
business expenses and other expenses of producing income, and the aggregate
of such expenses is deductible only to the extent such amount exceeds 2% of
the your adjusted gross income. The Federal income tax deductibility of
these expenses depends upon factual determinations related to our operation
by the general partner.
Partnership Tax Status And Net Worth Of The General Partner
The Internal Revenue Code, at Section 7701, provides the criteria used to
identify a corporation which cannot be present if a partnership is to be
taxed as a partnership. A partnership must have two or more of the
following:
* decentralized management
* unlimited liability
* limited transferability of shares, and
* limited continuation of existence.
The limited partnership agreement obligates the general partner to operate
the partnership in a manner which meets this test.
If we were taxed as a corporation:
* we would pay taxes at the corporate rates upon our income and gains
* items of deduction and losses would be deductible only by us and not by
you
* tax credits would be available only to us and not to you, and
* all or a part of any distributions we make to you could be taxable as
dividend income and would not be deductible by us in computing our taxable
income.
This would substantially increase the total amount of taxes paid on your
investment income and potentially limit your expense deductions.
The Internal Revenue Code Section 7701 specifically provides a safe harbor
which permits limited partnerships to meet the net worth test when a sole
corporate general partner has a net worth equal to 15% of the first
$2,500,000 of its net assets or $250,000, whichever is less, and 10% of all
net assets above $2,500,000, exclusive of the amount invested by such general
partner in any partnership. Mrs. Pacult intends to resign as a general partner
once Belmont has sufficient net assets to meet the North American Securities
Administrators Association Guidelines to continue to offer our partnership
interests, which is 5% of the offering then in effect.
Historically, the right of redemption, similar to your right to redeem your
partnership interests, renders a pool, such as ours, to be deemed a publicly
traded partnership, taxed as a corporation. However, the Revenue Act of 1987
provides an exception. The exception requires 90% or more of our gross
income to be derived from interest and the trade of commodities. If the
principal activity of the partnership is buying and selling commodities,
qualifying income includes interest, dividends, and income from futures,
options or forward contracts on commodities. The general partner intends to
limit the sources of income so that this exception will apply to us. In
addition, the general partner has placed restrictions upon the right of
redemption. See The Limited Partnership Agreement, Redemptions and Exhibit
A, Right of Redemption.
No IRS Ruling
We have not applied for a ruling from the Internal Revenue Service regarding
our status as a partnership or with regard to any other tax aspect, nor do we
intend to seek a ruling. In the absence of a ruling, there can be no
assurance that the IRS will not attempt to take a position adverse to the
partnership.
Tax Opinion
This prospectus accurately summarizes all material Federal matters and tax
consequences to you. In the opinion of The Scott Law Firm, P.A.:
* we will be treated as a partnership for Federal income tax purposes;
* the allocations of profits and losses made when partners redeem their
partnership interests should be upheld for Federal income tax purposes;
* based upon our contemplated trading activities, the IRS should consider us
as conducting a trade or business; and, as a result, the ordinary and
necessary business expenses we incur while conducting our commodity futures
trading business should not be subject to limitation under Section 67 or
Section 68 of the Internal Revenue Code;
* the profit share should be respected as a distributive share of our income
allocable to Bromwell Financial Fund, Limited Partnership; and
* the contracts we trade, as described in this prospectus, should satisfy
the commodities trading safe harbor as described in section 864(b) of the
Internal Revenue Code.
Such opinion is based on the Internal Revenue Code as of November 30, 1999
and a review of the Limited Partnership Agreement, and is conditioned upon
the following representations of facts by the general partner:
* at all times, we will be operated in accordance with the Delaware Uniform
Limited Partnership Act and the Limited Partnership Agreement attached hereto
as Exhibit A
* for our first two years of operation, the aggregate deductions claimed by
the partners as their distributive shares of our net losses will not exceed
the equity capital invested in the partnership
* no creditor who makes us a loan, including margin accounts, will have or
acquire, as a result of making the loan, any direct or indirect interest in
our capital, profits or property, other than as a secured creditor
* the general partner will at all times actively direct the affairs of the
Partnership
* the general partner:
* will possess substantial assets, exclusive of its interest in us or any
other limited partnership, which can be reached by our general creditors
within the meaning of Treasury Regulation Section 301.7701 2(d)(2) or
* will otherwise comply with the tax code general partner requirements
imposed upon sole corporate general partners of limited partnerships
* interests in the partnership:
* will be transferable only upon approval of the general partner
* will not be traded on an established securities market, and
* will not be readily tradable on a secondary market or the substantial
equivalent thereof
* we will not be registered under the Investment Advisor's Act of 1940; and
* over 90% of our earned income will be qualifying income as that term is
defined in the IRS Act of 1987.
The Scott Law Firm, P.A. is not able to opine upon the tax treatment of
expenses as that determination depends upon questions of fact to be resolved
by the general partner on our behalf. In addition, commodity trading advisor
fees are aggregated with employee business expenses and other expenses of
producing income, and the aggregate of such expenses is deductible only to
the extent such amount exceeds 2% of your adjusted gross income. It is the
general partner's position that our intended operations will qualify as a
trade or business. If this position is sustained, the brokerage commissions
and performance fees will be deductible as ordinary and necessary business
expenses. Syndication costs to organize the partnership and offering
expenses will not be deductible or amortizable by us or you.
Any change in these representations or the operative facts will prevent us
and you from relying upon the legal opinion from The Scott Law Firm, P.A.
Passive Loss And Unrelated Business Income Taxes Rules
In addition to the imposition of a corporate level tax on publicly traded
partnerships, special rules apply to partnerships in regard to the
application of the passive loss and unrelated business income tax rules. In
Notice 88-75 issued on June 17, 1988, the IRS provided guidance as to
partnership operation. The general partner intends to cause us to comply
with the applicable provisions of these guidelines. In the event our
expenses were deemed not to qualify as deductions from trading profits, your
total taxes would increase while your distributions would remain the same.
Basis Loss Limitation
Generally, the basis of your interest in the partnership for tax purposes is
equal to the cost
* decreased, but not below zero, by your share of any partnership losses and
distributions, and
* increased by your share of any partnership income.
You may not deduct losses in excess of the adjusted basis for your interest
in the partnership at the end of the partnership year in which such losses
occurred. However, you may carry forward any excess to such time, if ever,
as the basis for the interest in the partnership is sufficient to absorb the
loss. Upon the sale or liquidation of your interest in the partnership, you
will recognize a gain or loss for Federal income tax purposes equal to the
difference between the amount you realize in the transaction and the basis
for your interest in the partnership at the time of such sale. For
individuals, capital losses would offset capital gains on a dollar for dollar
basis, with any excess capital losses subject to a $3,000 annual limitation.
Accordingly, it is possible for you to sustain a loss from our operation
which will not be allowed as a deduction for tax purposes or will be limited
to a $3,000 annual limitation.
At-Risk Limitation
If you borrow money to invest in the partnership, there are at risk
limitations that will apply to you. Section 465 of the Internal Revenue Code
provides that the amount of any loss allowable for any year to be included in
your personal tax return is limited to the amount paid for the partnership
interests, or tax basis, of the amount at risk. Losses already claimed may
be subject to recapture if the amount at risk is reduced as a result of:
* cash distributions from the activity
* deduction of losses from the activity
* changes in the status of indebtedness from recourse to non-recourse
* the commencement of a guarantee, or
* other events that affect your risk of loss.
You should consider the at risk provisions in arranging debt financing for
purchasing a partnership interest.
Income And Losses From Passive Activities
Internal Revenue Code Section 469 limits the deductibility of what are called
passive losses from business activities in which the taxpayer does not
materially participate. Under temporary Treasury regulations,
* the trading of personal property, such as futures contracts, will not be
treated as a passive activity,
* partnership gains allocable to you will not be available to offset passive
losses from sources outside the partnership, and
* partnership losses will not be subject to limitation under the passive
loss rules.
Allocation Of Profits And Losses
The allocation of profits, losses, deductions and credits contained in the
Limited Partnership Agreement will be recognized for tax purposes only if the
allocations have substantial economic effect. While the general partner
believes that the Limited Partnership Agreement either meets the requirements
or satisfies a substitute capital account equivalency test, the Limited
Partnership Agreement does not meet a third requirement, that a partner must
make a capital contribution to the partnership equal to any deficit in its
capital account. Accordingly, under the regulations and the Limited
Partnership Agreement, losses would not be allocable to you in excess of your
capital contribution plus properly allocated profits less any prior
distributions. The general partner intends to allocate income and losses in
accordance with the Limited Partnership Agreement which it believes complies
with applicable Internal Revenue Code Section 704. However, no assurances
can be given that the IRS will not attempt to change any allocation that is
made among partners admitted on different dates, which could adversely affect
the amount of taxable income to one partner as opposed to another partner.
Taxation Of Futures And Forward Transactions
The commodity trading advisors selected to trade for us are expected to trade
primarily in Section 1256 Contracts, which is any:
* regulated futures contract
* foreign currency contract
* non-equity option, or
* dealer equity option.
A regulated futures contract is a futures contract:
* if it is traded on or subject to the rules of:
* a national securities exchange which is registered with the Securities
and Exchange Commission,
* a domestic board of trade designated as a contract market by the
Commodity Futures Trading Commission or any other board of trade, exchange or
other market designated by the Secretary of Treasury, and
* which is marked-to-market to determine the amount of margin which must be
deposited or may be withdrawn. Marked-to-market means that the position is
taken in the account on day one at that price. Each day the position is
held, it is valued for account purposes at the price of the contract on the
close of that day.
A foreign currency contract is negotiated between banks and accepted for
trade among banks and private investors. The partnership is expected to
purchase or sell these contracts to speculate on the value of foreign
currency as contrasted with the U. S. dollar. These contracts are exempt
from the Commodity Exchange Act and are excluded from marked-to-market
treatment.
A non-equity option means an option which is treated on a qualified board or
exchange and the value of which is not determined directly or indirectly by
reference to any stock, group of stocks, or stock index unless there is in
effect a designation by the Commodity Futures Trading Commission of a
contract market for a contract bond or such group of stocks or stock index.
A dealer equity option means, with respect to an options dealer, only a
listed option which is an equity option, is purchased or granted by such
options dealer in the normal course of his activity of dealing in options,
and is listed on the qualified board or exchange on which such options dealer
is registered.
All Section 1256 contracts will be marked-to-market upon the closing of every
contract, including closing by taking an offsetting position or by making or
taking delivery, by exercise or being exercised, by assignment or being
assigned; or by lapse or otherwise. Also, all open Section 1256 contracts
held by us at our fiscal year-end will be treated as sold for their fair
market value on the last business day of such taxable year. This will result
in all unrealized gains and losses being recognized for Federal income tax
purposes for the taxable year. As a consequence, you may have tax liability
relating to unrealized partnership profits in open positions at year-end.
Sixty percent of any gain or loss from a Section 1256 contract will be
treated as long-term capital gain or loss, and 40% as short-term capital gain
or loss, regardless of the actual holding period of the individual contracts.
The character of a your distributive share of profits or losses of the
partnership from Section 1256 contracts will thus be 60% long-term capital
gain or loss and 40% short-term capital gain or loss. Your distributive
share of such gain or loss for a taxable year will be combined with your
other items of capital gain or loss for such year in computing your Federal
income tax liability. The Internal Revenue Code contains rules designed to
eliminate the tax benefits flowing to high-income taxpayers from the
graduated tax rate schedule and from the personal and dependency exemptions.
The effect of these rules is to tax a portion of a high-income taxpayer's
income at a marginal tax rate of 39.6%. However, long-term capital gains are
now subject to a maximum tax rate of 28%. A limited partner, other than a
corporation, estate or trust, may elect to carry-back any net Section 1256
contract losses to each of the three preceding years. However, the marked-
to-market rules do not apply to interests in personal property of a nature
which are actively traded other than Section 1256 contracts.
Section 988 Foreign Currency Transactions
A Section 988 transaction is defined as the entering or acquiring of any
forward contract, futures contract, option or similar financial instrument if
the amount to be received or to be paid by reason of a transaction is
denominated in a nonfunctional currency or is determined by reference to one
or more nonfunctional currencies. If the Section 988 transaction results in
a gain or loss, it is considered to be a foreign currency gain or loss to the
extent it does not exceed gain or loss realized by reason of changes in
exchange rates.
Capital Gain And Loss Provisions
If long-term capital gains exceed short-term capital losses, the net capital
gain will be taxed at the same rates as ordinary income. Subject to an
annual limitation of $3,000, you may deduct the excess of capital losses over
capital gains against ordinary income. Excess capital losses which are not
used to reduce ordinary income in a particular taxable year may be carried
forward to, and treated as capital losses incurred in, future years.
Business For Profit
Internal Revenue Code Section 183 sets forth the general rule that no
deduction is allowable to an individual for an activity not engaged in for
profit. These are activities other than those constituting a trade or
business or engaged in for the production or collection of income or for the
management, conservation, or maintenance of property held for the production
of income. The determination of whether an activity is engaged in for profit
is based on all facts and circumstances, and no single factor is
determinative. The general partner believes that by employing independent
commodity trading advisors with strong track records of production of
profits, it is more likely than not, that our activity will be considered an
activity engaged for profit.
Self-Employment Income And Tax
Section 1402 of the Internal Revenue Code provides that an individual's net
earnings from self-employment shall not include the distributive share of
income or loss from any trade or business carried on by a partnership of
which he is a limited partner. Therefore, you should not consider that the
ordinary income from the partnership constitutes net earnings from self-
employment for purposes of either the Social Security Act or the Internal
Revenue Code.
Individual Alternative Minimum Tax
Non-corporate taxpayers are subject to the alternative minimum tax to the
extent it exceeds their regular tax. For an entity taxable as an estate or
trust, the first $22,500 of alternative minimum taxable income is exempt from
the alternative minimum tax, while for an individual it is the first $33,750
of such income, $45,000 for a joint return, or $22,500 for married taxpayers
filing separately. The exemption amounts will be phased out at the rate of
$.25 for each dollar of alternative minimum taxable income in excess of
$150,000 for married taxpayers filing jointly, $112,500 for single taxpayers,
and $75,000 for married taxpayers filing separately, estates and trusts.
Alternative minimum taxable income in excess of the exemption amount, after
any applicable phase-out, will be subject to a two-tiered rate schedule.
Alternative minimum taxable income, net of exemption, up to and including
$175,000 will be taxed at a rate of 26% and alternative minimum taxable
income over $175,000 will be taxed at a 28% rate. Taxpayers liable for the
alternative minimum tax are required to make estimated tax payments.
Interest Related To Tax Exempt Obligations
Section 265(a)(2) of the Internal Revenue Code will disallow any deduction
for interest on indebtedness of a taxpayer incurred or continued to purchase
or carry obligations the interest on which is wholly exempt from tax. The
IRS announced in Revenue Procedure 72-18 that the proscribed purpose will be
deemed to exist with respect to indebtedness incurred to finance a portfolio
investment. The Revenue Procedure further states that a limited partnership
interest will be regarded as a portfolio investment, unless rebutted by other
evidence. Therefore, if you own tax-exempt obligations, the IRS might take
the position that any interest expense incurred by you to purchase or carry
partnership interests should be viewed as incurred by you to continue
carrying tax exempt obligations, and that you should not be allowed to deduct
all or a portion of the interest on any such loans.
Not A Tax Shelter
In the opinion of tax counsel, we do not constitute a tax shelter, as defined
in Internal Revenue Code Section 6111(c), since the general partner intends
to operate the partnership so that the tax shelter ratio will not exceed two-
to-one at the close of any of the first five years. Accordingly, the general
partner does not plan to register us as a tax shelter with the IRS.
Taxation Of Foreign Partners
An investment in the partnership should not, by itself, cause a foreign
partner to be engaged in a trade or business within the United States. A
foreign person is subject to a 30% withholding tax, unless reduced or
exempted by treaty, on United States source income which is not effectively
connected with the conduct of a United States trade or business. This tax
must be withheld by the person having control over the payment of such
income. Accordingly, we may be required to withhold tax on items of such
income which are included in the distributive share of a foreign partner,
whether or not the income was actually distributed. If we are required to
withhold tax on such income of a foreign partner, the general partner may pay
such tax out of its own funds and then be reimbursed out of the proceeds of
any distribution to or redemption of partnership interests by the foreign
partner.
Partnership Entity-Audit Provisions-Penalties
The Internal Revenue Code provides that the tax treatment of items of
partnership income, gain, loss, deduction and credit will be determined at
the partnership level in a single partnership proceeding. The Limited
Partnership Agreement has appointed Belmont Capital Management, Inc. as the
tax matters partner to settle any issue involving any partner with less than
a 1% profits interest unless such a partner, upon notice, properly elects not
to give such authority to the tax matters partner. The tax matters partner
may seek judicial review for any adjustment to partnership income, but there
will be only one such action for judicial review to which all partners will
be bound. The Internal Revenue Code provides that a partner must report a
partnership item consistently with its treatment on the partnership return,
unless the partner specifically identifies the inconsistency or can show that
its treatment of the partnership item on its return is consistent with a
schedule furnished to the partner by the partnership. Failure to comply with
this requirement may result in penalties for underpayment of tax and could
result in an extended statute of limitations. The statute of limitations for
adjustment of tax with respect to partnership items will generally be three
years from the date of filing the partnership return.
Internal Revenue Code Section 6662 imposes a penalty for a substantial
understatement of income tax equal to 20% of the amount of any underpayment
attributable to that understatement. Understatement is defined as meaning
the excess of the correct amount of tax required to be shown on the return
over the amount of tax which is actually shown on the return. A substantial
understatement exists for any taxable year if the amount of the
understatement for the taxable year exceeds the greater of:
* 10% of the correct tax, or
* $5,000, or $10,000, in the case of a corporation other than an S
corporation or a personal holding company.
Employee Benefit, Retirement Plans And IRA's
The Employee Retirement Income Security Act of 1974 governs:
* employee benefit plans, such as:
* a qualified pension, profit-sharing or stock bonus plan, or
* a qualified health and welfare plan; and
* individual retirement accounts, commonly called IRAs.
Before you invest in us through one of these qualified plans, you should
consult your own legal and financial advisors, and the fiduciary of your plan
should take into account the facts and circumstances of your plan, and
consider applicable fiduciary standards under the above act.
Acceptance of subscriptions on behalf of employee benefit plans is not a
representation by the general partner or any other party that this investment
meets all legal requirements or is appropriate with respect to investments by
any particular plan. The person with investment discretion should consult
the attorney for the plan as to the propriety of an investment in this
partnership.
The Limited Partnership Agreement
This prospectus explains all material terms of the Limited Partnership
Agreement; however, you are urged to read the entire agreement. See Exhibit
A.
Formation Of The Partnership
Our Certificate of Limited Partnership is dated and was filed on January 12,
1999 pursuant to the Delaware Uniform Limited Partnership Act.
You are not liable for our losses, debts and obligations beyond your
investment amount and your share of any of our undistributed assets, so long
as you do not take part in the management of the business of the partnership or
transact any business for the partnership.
According to the Limited Partnership Agreement, this partnership will not
terminate or dissolve upon any limited partner's death, incompetence,
withdrawal, insolvency, bankruptcy, termination, liquidation, dissolution or
other legal incapacity. Also, legal representatives of such limited partner
may redeem their partnership interests, but will not have the right to
withdraw their interest or become a substituted limited partner solely by
reason of such incapacity.
Units of Partnership Interests
The amount of partnership interests you hold will determine your percentage
interest in our net assets. The percentage interest will be calculated from
time to time by dividing the number of units of partnership interests you
hold by the aggregate number of outstanding units of partnership interests.
Management Of Partnership Affairs
Only the general partner may manage this partnership. You will not take part
in our business or affairs nor will you have any voice in our management or
operations.
The limited partners who collectively hold a majority of the partnership
interests must give written approval of any material change in either the
Limited Partnership Agreement or the partnership structure.
These material changes do not include the right of the general partner to:
* change trading advisors
* change the commodity contracts traded, or
* change the diversification of our assets among the various types of or in
the positions held in commodity contracts.
To the extent the law permits, such limited partners who hold a majority of
the partnership interests may vote to amend any term in the Limited
Partnership Agreement and, if necessary, the Certificate of Limited
Partnership without the agreement of the general partner. This includes
removing the general partner and electing a new general partner.
The general partner may not make trades on our behalf. Trading must be done
by independent commodity trading advisors selected by the general partner.
Additional Offerings
The general partner may has sole discretion to:
* end any offering of partnership interests
* register additional partnership interests, and
* make additional public or private offerings of partnership interests.
You will not have any preemptive, preferential or other rights with respect
to the issuance or sale of any additional partnership interests. We have not
limited the amount of capital contributions or the maximum amount of
partnership interests that may be issued, offered or sold.
Partnership Accounting, Reports, And Distributions
You will have a capital account, and its initial balance will be the amount
you paid for your partnership interests. The net assets of this partnership
will be determined monthly, and any change from the previous month will be
passed on to your account in the ratio that your account bears to all
accounts.
The general partner has sole discretion to make distributions from profits or
net assets. On a monthly basis the you will receive a report containing:
* the net unit value as of the end of both the current and previous month
* the percentage change in net unit value between the two months
* the amount of distributions during the month
* the aggregate fixed commission in lieu of round-turn brokerage
commissions, other fees, administrative expenses, and reserves for claims and
other extra-ordinary expenses incurred or accrued by us during the month, and
* any other information required by the rules of the Commodity Futures
Trading Commission.
You or your duly authorized representative may inspect our books and records
and any records related to your account, provided:
* you give adequate notice
* you do so at a reasonable time, and
* you make copies at your expense.
Federal Tax Allocations
At the end of each fiscal year, our capital gain or loss and ordinary income
or loss will be allocated among the partners, while compensating for our fees
and expenses. You must include your share of such items in your personal
income tax return.
Transfer Of Partnership Interests Only With Consent Of The General Partner
You are admitted to this partnership and are registered on the partnership
records as the owner of the partnership interests you purchase. As a
registered investor in this partnership, you may:
* receive all distributions, allocations of losses and withdrawals, and
reductions of capital contributions, and
* vote on any matters submitted to the limited partners for voting.
You may transfer your partnership interests only with the written consent of
the general partner. The general partner may not approve the transfer if it:
* is requested before two years from the date of purchase
* is not made for all of your partnership interests or, if you are not
assigning all of your partnership interests, you will not retain more than
five units of partnership interests
* will violate any applicable laws or governmental rules or regulations,
including without limitation:
* any applicable Federal or state securities laws, or
* the Delaware limited partnership laws
* will jeopardize our ability to be taxed as a partnership and not as a
corporation, or
* will affect characterizations or treatment of income or loss.
Termination Of The Partnership
This partnership will terminate:
* at 11:59 p.m. twenty-one years from the date of the Limited Partnership
Agreement
* by election of the general partner, in its sole discretion, to terminate
and dissolve this partnership
* upon the dissolution, death, resignation, withdrawal, bankruptcy or
insolvency of the general partner, unless the limited partners unanimously
elect to carry on the business and a new general partner has been substituted
* if it does not pay its annual franchise fee and file its annual report
with the State of Delaware, which will cause it to be dissolved under
Delaware law
* upon any event which makes the continued existence of the partnership
unlawful, or
* upon the unanimous vote of the Limited Partners.
Meetings
We are not required to hold regular meetings, however, partners may call
meetings to vote on certain issues, including:
* amendment of the limited partnership agreement; provided, however, any
amendment which modifies the compensation or distributions to the general
partner or which affects the duties of the general partner requires its
consent
* removal of the general partner and election of a new general partner
* cancellation of any contract for services with the general partner,
without penalty, upon 60 days written notice; provided, however, the maximum
period of any contract between the general partner and the partnership is one
year; and, provided further, should any amendment to this partnership
agreement attempt to modify the compensation or distributions to which the
general partner is entitled or which affects the duties of the general
partner, such amendment will become effective only upon the consent of the
general partner.
* the right to approve, prior to sale, the sale or distribution, outside the
ordinary course of business, of all or substantially all of the assets of the
partnership.
* dissolution of the partnership.
* change of any of the partnership's basic investment policies or in the
structure of the partnership.
See Management of Partnership Affairs.
The general partner must receive in person or by certified mail a written
request with a check to cover the cost of sending notice of the meeting to
all partners. The written request must be signed by one or more partners who
collectively own 10% or more of the outstanding partnership interests. The
general partner then has 15 days to call the meeting
Redemptions
Redemption allows you to receive your share of the net assets of this
partnership. You may not redeem or liquidate any partnership interests until
six months after you have been allocated partnerships interests from your
subscription proceeds. The general partner must receive written notice prior
to the last day immediately preceding the desired effective date of
redemption. The effective date of redemption must be the last day of the
then current or a future month.
The general partner will try its best to comply with the redemption request
within twenty days following the effective date. However, you should be
aware that the general partner may be unable to timely comply with the
request if there is not enough cash. This may be because the trading
advisors cannot liquidate the positions they have taken, or because there are
contingent claims on partnership assets.
If the general partner notifies you in writing, it may declare additional
redemption dates or cause the partnership to redeem fractions of units of
partnership interests. If the general partner notifies you in writing prior
to registering partnership interests for public sale, it may redeem your
partnership interests if you don't hold the required minimum amount of
partnership interests which it has established.
We will charge a redemption fee of 4% of the value of the redemption request if
it is received prior to the nineteenth day of the sixth month after the
acceptance of your subscription. Thereafter, we will reduce the redemption fee
by 1% every 6 months as follows:
Redemption Request Received Redemption Fee
Before the last day of
6th month of investment 4%
From the 7th Month
through the 12th month 3%
From the 13th Month
through the 18th month 2%
From the 19th Month
through the 24th month 1%
Thereafter None
Plan For Sale Of Partnership Interests
The Selling Agent
We are offering and selling the partnership interests through Futures
Investment Company, 5916 N. 300 West, P.O. Box C, Fremont, Indiana 46737, a
broker/dealer registered with the National Association of Securities Dealers.
The general partner or Futures Investment Company may also select other
broker dealers to sell the partnership interests. However, no other selling
agents have been appointed to date and none are expected to be appointed.
All partnership interests will be sold on a best efforts basis, which means
the selling agent will try, but not guarantee, to sell all the partnership
interests.
Although we are offering a maximum of $7,000,000 in partnership interests,
the Limited Partnership Agreement authorizes the general partner to sell
additional partnership interests. Accordingly, the partnership may sell an
unlimited amount of partnership interests.
Futures Investment Company is owned solely by Mr. Michael Pacult and his
wife, Mrs. Pacult, who is also one of the general partners and the sole
shareholder, director, and officer of the corporate general partner. Mr. and
Ms. Pacult are also registered with the National Futures Association as
associated persons and with the National Association of Securities Dealers,
Inc. as registered representatives of Futures Investment Company. In those
capacities, they earn sales and trailing commissions on the partnership
interests they sell and service.
Futures Investment Company is an Illinois corporation which was incorporated
on December 6, 1983. It was officially registered as a fully disclosed
broker dealer with the National Association of Securities Dealers on July 24,
1997. Currently, Futures Investment Company principally offers and trades
securities and commodities as a Commodity Futures Trading Commission
registered introducing broker. It has and will continue to participate in
offerings of other commodity pools sponsored by the general partner or other
persons or entities in competition with us.
Escrow
New partners will be admitted to the partnership on the first business day of
the month following the month in which their subscription documents were
accepted. Until they are admitted to the partnership and assigned
partnership interests, all cash and subscription documents will be held in a
segregated escrow account at the escrow agent, Star Financial Bank, 2004 N.
Wayne St., Angola, IN 46703. No escrow funds will be available to pay
partnership debts or claims.
The interest earned on your subscription during the escrow period will be
deposited in our account, and you will receive a corresponding amount of
additional partnership interests at the current month end net asset value per
partnership interest.
Cash from subscriptions held in the escrow account will be invested in short-
term investments which meet applicable regulatory requirements. These
include United States Treasury Bills or other comparable interest-bearing
instruments which are expected to be liquid, substantially risk-less
instruments, with correspondingly low yields.
Belmont Capital Management, Inc. will pay the escrow agent a fee for its
services and will not be reimbursed for this by the partnership.
There cannot be any assurance that any additional partnership interests will
be sold. The general partner is authorized, in its sole discretion, to
terminate this or any future offering of partnership interests.
Subscription Procedure
To purchase partnership interests, you must:
* complete and execute a suitability questionnaire and a subscription
agreement (Exhibit D), and
* deliver the executed subscription documents and check to the sales agent.
You should make out the check to "Escrow Account for Bromwell Financial Fund,
LP". Your check will then be delivered to the escrow agent within 24 hours of
receipt.
Under no circumstances should you:
* make payment in cash, or
* make any checks payable to the partnership, the general partner the
selling agent or any of their registered representatives or affiliates.
Subscription Amounts
You must purchase at least $25,000 in partnership interests; however, the
general partner may reduce this to not less than the regulatory minimum of
$5,000. You may make additional investments above $25,000 in $1,000
increments. However, you may not invest more than 10% of your net worth in
the partnership. If you have not provided collectible funds, whether in the
form of a bad check or draft, or otherwise, any partnership interests
recorded in our books in your favor shall be cancelled.
Revocation
Once you have purchased partnership interests, you may revoke your
subscription for five business days after you send it to us, or longer, if
there are Federal or state securities laws which allow you to do so. After
the lapse of five business days from submission, your subscription will be
irrevocable. The partnership interests offered to you are subject to prior
sale. The general partner has sole discretion to reject any subscription, in
whole or in part, within 5 days.
Net Worth Tests
To purchase partnership interests, you must have at least:
* a minimum net worth of $150,000, exclusive of home, home furnishings and
automobiles, or
* a minimum annual gross income of $45,000 and a minimum net worth of
$45,000, exclusive of home, home furnishings and automobiles.
You may have to satisfy higher amounts if you live in certain states. See
Exhibit D.
In the case of sales to fiduciary accounts, the net worth and income
standards may be met by the beneficiary, the fiduciary account, or the donor
or grantor who supplies the funds to purchase the partnership interests, if
the donor or grantor is the fiduciary.
Investor Warranties
When you execute and deliver your Subscription Agreement and Power of
Attorney, you are making representations and warranties to the general
partner, the futures commission merchant and the selling agent.
Specifically:
* you are of legal age to execute the Subscription Agreement and Power of
Attorney and are legally competent to do so
* you acknowledge that you have received, read and understand the
prospectus, including the Limited Partnership Agreement, prior to subscribing
for partnership interests
* all information you have given to the general partner or that is set forth
in the Subscription Agreement and Power of Attorney submitted by you is
correct and complete as of the date of the agreement. Also, if there are any
change in such information prior to acceptance of your subscription, you will
immediately furnish the revised or corrected information to the general
partner
* unless (e) or (f) below apply to you, your subscription is made with your
own funds for your own account and not as trustee, custodian or nominee for
another.
* the subscription, if made as custodian for a minor, is a gift you have
made to the minor and is not made with the minor's funds; or, if not a gift,
the representations as to net worth and annual income apply only to such
minor.
* if you are subscribing in a representative capacity:
* you have full power and authority to purchase the partnership interests
and enter and be bound by the Subscription Agreement and Power of Attorney on
behalf of the entity for which you are purchasing the partnership interests,
and
* such entity has full right and power to purchase the partnership
interests and enter and be bound by the Subscription Agreement and Power of
Attorney and become a limited partner pursuant to the Limited Partnership
Agreement attached as Exhibit A.
The general partner, the futures commission merchant and the selling agent
may rely upon any of the above representations and warranties as a defense to
any claim made against it.
Legal Matters
Litigation And Claims
Within the past 5 years as of the date of this prospectus, there have been no
material administrative, civil or criminal actions against either general
partner, the commodity trading advisors, the introducing broker, the selling
agent, or any principal or affiliate of any of them. This includes any
actions pending, on appeal, concluded, threatened, or otherwise known to
them. The futures commission merchant, Vision Limited Partnership, does have
litigation material to it which is unrelated to us. A loss of the litigation
would, in the opinion of Vision, not interfere with the services to be
provided to the partnership.
On December 31, 1996, the Business Conduct Committee of the National Futures
Association issued a two count complaint against Vision Limited Partnership.
Count I alleges failure to supervise and Count II alleges improper handling
of one block order. Vision denies the allegations and intends to vigorously
defend the matter.
Legal Opinion
The Scott Law Firm, P.A., 940 Northeast 79th Street, Miami, FL 33138, serves as
special counsel to us and the general partner with respect to:
* the offering of partnership interests
* the preparation of this prospectus
* the legality of the partnership interests offered, and
* the classification of the partnership as a partnership for tax purposes.
From time to time, the firm will also advise us and the general partner
regarding the maintenance of our tax status, the legality of any subsequent
offers, and the legality of any transfers by partners.
The general partner has granted the firm the right to employ other law firms to
help in matters which relate to the sale of partnership interests or our
operation.
The Scott Law Firm, P.A. will not give you or any other partner legal advice.
You should seek investment, legal, and tax advice from your own legal counsel
and other professionals of your choice.
Experts
We rely on various experts to perform services for us.
Frank L. Sassetti, & Co., 6611 West North Avenue, Oak Park, IL 60302 is our
accounting and auditing expert, and is responsible for auditing the books and
records of both us and Belmont Capital Management, Inc. It has also prepared
the audited financial statements in this prospectus and prepares our tax
returns.
Mr. James Hepner, certified public accountant, 1824 N. Normandy, Chicago, IL
60635 is another accounting expert who:
* has established our original books and records
* handles the journal entries
* prepares the monthly and annual financial statements and statements of
account, and
* prepares our K-1s.
The corporate general partner serves as our tax partner. The general partner
is required by the rules and regulations of the Commodity Futures Trading
Commission to send you unaudited monthly and annual account statements, and
financial statements audited by an independent certified public accountant.
We will send you the unaudited monthly statements as soon as practicable
after the end of each month, and will send you the audited annual financial
statements within 90 days after the end of each calendar year.
Additional Information
By our general partner, we have filed a registration statement on Form S-1
with the Securities and Exchange Commission under the Securities Act of 1933
to allow us to issue and sell our limited partnership interests.
This prospectus does not contain all of the information in the Form S-1
filing, for example, the Selling Agreement and the futures commission
merchant Customer Agreements which established the partnership accounts. The
description in this prospectus of these exhibits are summaries. For further
information regarding the partnership and the partnership interests offered,
you may inspect and copy, without charge, our complete filings, including
this prospectus, the exhibits and periodic reports, at the public reference
facilities of the Securities and Exchange Commission at:
* 450 Fifth Street, NW, Washington, D.C. 20549
* its Northeast Regional Office, 7 World Trade Center, Suite 1300, New York,
New York 10048, and
* its Midwest Regional Office, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661
Also, the Securities and Exchange Commission offices will send you copies of
all or any part of this filing by mail, upon payment of the prescribed rates.
This prospectus and other electronic filings made through the Electronic Data
Gathering, Analysis and Retrieval (EDGAR) system are publicly available through
the Commission's Web site, http://www.sec.gov.
In addition, our books and records will be maintained for six years at the
affiliate of the partnership, Futures Investment Company, 5916 N. 300 west,
P.O. Box C, Fremont, IN 46737, (219) 833-1306, with a duplicate set maintained
at the offices of Mr. James Hepner, Certified Public Accountant, at 1824 N.
Normandy, Chicago, IL 60635, (773) 804-0074.
You are invited to review any materials available to the general partner
relating to:
* this partnership
* our operations
* this offering
* the commodity experience and trading history of:
* the commodity trading advisors
* the general partner
* the commodity brokers, and
* their respective officers, directors and affiliates
* the Advisory Agreements between us and the commodity trading advisors
* the Customer Agreements between us and our Commodity Brokers
* the commodity trading advisors' disclosure document
* the forms filed with the National Futures Association for any registered
entity or person related to this partnership, and
* any other matters relating to the laws applicable to this offering or this
partnership.
The officer and staff of the general partner will answer all reasonable
inquiries you may have. All the above materials will be made available at
any mutually convenient location at any reasonable hour after reasonable
prior notice.
The general partner will allow you to obtain any additional information
necessary to verify any representations or information in this prospectus and
its exhibits, assuming we or the general partner possess such information or
can acquire it with reasonable effort and expense. However, your review is
limited by the proprietary and confidential nature of the commodity trading
advisor's trading systems and by the confidentiality of personal information
relating to other investors.
[The balance of this page has been intentionally left blank.]
*******************************************************************************
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
FOR THE PERIOD JANUARY 12, 1999
(DATE OF INCEPTION)
TO DECEMBER 31, 1999
GENERAL PARTNER:
Belmont Capital Management, Inc.
% Corporate Systems, Inc.
101 North Fairfield Drive
Dover, Kent County, Delaware 19901
<PAGE>
To The Partners
Bromwell Financial Fund, Limited Partnership
(a development stage enterprise)
Dover, Kent County, Delaware
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of BROMWELL FINANCIAL
FUND, LIMITED PARTNERSHIP (a development stage enterprise) as of December 31,
1999, and the related statements of operations, partners' equity and cash
flows for the period from January 12, 1999 (inception) to December 31, 1999.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of BROMWELL
FINANCIAL FUND, LIMITED PARTNERSHIP (a development stage enterprise) as of
December 31, 1999, and the results of its operations and its cash flows for
the period from January 12, 1999 (inception) to December 31, 1999, in
conformity with generally accepted accounting principles.
/s/ Frank L. Sassetti & Co.
February 22, 2000
Oak Park, Illinois
<PAGE>
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
BALANCE SHEET
December 31, 1999
ASSETS
Cash $1,554
======
LIABILITIES AND PARTNERS' EQUITY
Liabilities -
Due to affiliate (Note 2)
Partners' Capital -
Limited partners (1 unit)
Initial capital contribution 1,000
Deficit accumulated during development stage (223)
General partner (1 unit)
Initial capital contribution 1,000
Deficit accumulated during development stage (233)
Total Partners' Capital 1,554
------
$1,554
======
The accompanying notes are an integral part
Of the financial statements.
<PAGE>
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
JANUARY 12, 1999 (INCEPTION)
TO December 31, 1999
Initial Period
January 12, 1999 to
December 31, 1999
REVENUES $_____
Total Revenues _______
EXPENSES
Organizational costs (Note 1)
Shipping expense 320
Bank charges 126
-------
Total Expenses 446
-------
NET LOSS $ (446)
=======
NET LOSS -
Limited partnership unit $ (223)
=======
General partnership unit $ (223)
=======
The accompanying notes are an integral part
Of the financial statements.
<PAGE>
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
JANUARY 12, 1999 (INCEPTION)
TO December 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (446)
Adjustments to reconcile net loss to net
cash used in operating activities _______
Net Cash Used In
Operating Activities (446)
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Initial partner contributions 2,000
-------
NET INCREASE IN CASH 1,554
CASH -
Beginning of period _______
End of period $1,554
=======
The accompanying notes are an integral part
Of the financial statements.
<PAGE>
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Bromwell Financial Fund, Limited Partnership (the Fund) was
formed January 12, 1999 under the laws of the State of Delaware. The Fund
expects to engage in the speculative trading of futures contracts in
commodities, however, the Fund will not commence business until at least
$700,000 worth of partnership interests are sold. Belmont Capital
Management, Inc. and Shira Pacult are the general partners and commodity pool
operators of Bromwell Financial Fund, Limited Partnership. The commodity
trading advisor (CTA) is expected to be Ansbacher Investment Management,
Inc., which has the authority to trade so much of the Fund's equity as is
allocated to it by the General Partners.
The Partnership is in the development stage and its efforts
through December 31, 1999 have been principally devoted to organizational
activities.
Income Taxes - In accordance with the generally accepted method of
presenting partnership financial statements, the financial statements do not
include assets and liabilities of the partners, including their obligation
for income taxes on their distributive shares of the net income of the Fund
or their rights to refunds on its net loss.
Offering Expenses and Organizational Costs - Contingent upon the sale
of at least $700,000 of partnership interests, offering costs of $47,000 will
be paid from the gross proceeds contributed and charged to the partners'
capital accounts. Subject to the above contingency, organizational costs are
charged to expense as incurred. Through December 31, 1999, the sum of $2,399
in organization costs and $8,331 in offering costs has been paid to date by
an affiliate. These costs have not been reflected in the financial statements
since they will not be reimbursed until the minimum offering amount is raised
and the total amount of these costs has yet to be determined.
Registering Costs - Costs incurred for the initial filings with
Securities and Exchange Commission, Commodity Futures Trading Commission,
National Futures Association (the "NFA") and the states where the offering is
expected to be made are accumulated, deferred and charged against the gross
proceeds of offering at the initial closing as part of the offering expenses.
Recurring registration costs, if any, will be charged to expense as incurred.
<PAGE>
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Revenue Recognition - Commodity futures contracts are recorded on the
trade date and will be reflected in the balance sheet at the difference
between the original contract amount and the market value on the last
business day of the reporting period.
Market value of commodity futures contracts is based upon
exchange or other applicable market best available closing quotations.
Use of Accounting Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
Statement of Cash Flows - For purposes of the Statement of Cash Flows,
the Fund will consider only money market funds to be cash equivalents. As of
the balance sheet date, the Fund has no cash equivalents. Net cash provided
by operating activities include no cash payments for interest or income taxes
as of December 31, 1999.
2. DUE TO AFFILIATE
The Fund's individual general partner is a joint owner of Futures
Investment Company and this Company has funded the organizational and
offering costs incurred by the Fund to date.
3. GENERAL PARTNER DUTIES
The responsibilities of the General Partner, in addition to
directing the trading and investment activity of the Fund, including
suspending all trading, includes executing and filing all necessary legal
documents, statements and certificates of the Fund, retaining independent
public accountants to audit the Fund, employing attorneys to represent the
Fund, reviewing the brokerage commission rates to determine reasonableness,
maintaining the tax status of the Fund as a limited partnership, maintaining
a current list of the names, addresses and numbers of units owned by each
Limited Partner and taking such other actions as deemed necessary or
desirable to manage the business of the Partnership.
<PAGE>
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
3. GENERAL PARTNER DUTIES - CONTINUED
If the net unit value of the partnership falls to less than 50%
of the greater of the original $1,000 selling price, less commissions and
other charges or such higher value earned through trading, then the General
Partner will immediately suspend all trading, provide all limited partners
with notice of the reduction and give all limited partners the opportunity,
for fifteen days after such notice, to redeem partnership interests.
4. THE LIMITED PARTNERSHIP AGREEMENT
The Limited Partnership Agreement provides, among other things,
that
Capital Account - A capital account shall be established for each
partner. The initial balance of each partner's capital account shall be the
amount of the initial contributions to the partnership.
Monthly Allocations - Any increase or decrease in the Partnership's net
asset value as of the end of a month shall be credited or charged to the
capital account of each Partner in the ratio that the balance of each account
bears to the total balance of all accounts.
Any distribution from profits or partners' capital will be made
solely at the discretion of the General Partners.
Allocation of Profit and Loss for Federal Income Tax Purposes - As of
the end of each fiscal year, the Partnership's realized capital gain or loss
and ordinary income or loss shall be allocated among the Partners, after
having given effect to the fees of the General Partner and the Commodity
Trading Advisors and each Partner's share of such items are includable in the
Partner's personal income tax return.
Redemption - No partner may redeem or liquidate any units until after
the lapse of six months from the date of the investment. Thereafter, a
Limited Partner may withdraw, subject to certain restrictions, any part or
all of his units from the partnership at the net asset value per unit on the
last day of any month on ten days prior written request to the General
Partner. A redemption fee payable to the partnership of a percentage of the
value of the redemption request is charged pursuant to the following
schedule:
4% if such request is received ten days prior to the last trading
day of the month in which the redemption is to be effective from the sixth
month to the twelfth month after the date of the investment in the Fund.
<PAGE>
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
4. THE LIMITED PARTNERSHIP AGREEMENT - CONTINUED
3% if such request is received during the next six month period.
2% if such request is received during the next six month period.
1% if such request is received during the next six month period.
0% thereafter.
5. FEES
The Fund will be charged the following fees on a
monthly basis as of the commencement of trading.
A management fee of 1% (annual rate) of the Fund's net
assets allocated to each CTA to trade will be paid to each CTA and 3% of the
Fund's net assets allocated to all CTA's will be paid to the Fund's Corporate
General Partners.
An incentive fee of 20% of "new trading profits" will be
paid to each CTA. "New trading profits" includes all income earned by a CTA
and expense allocated to his activity. In the event that trading produces a
loss, no incentive fees will be paid and all losses will be carried over to
the following months until profits from trading exceed the loss. It is
possible for one CTA to be paid an incentive fee during a quarter or a year
when the Fund experienced a loss.
The Fund will pay fixed commissions of 11% (annual rate) of
assets assigned to be traded, payable monthly, to the introducing broker
affiliated with the General Partners. The Affiliated Introducing Broker will
pay the costs to clear the trades to the futures commission merchant and all
PIT Brokerage costs which shall include the NFA and exchange fees.
The General Partner has reserved the right to change the
management fee and the incentive fee at its sole discretion.
<PAGE>
*******************************************************************************
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
FOR THE FIVE MONTHS ENDED MAY 31, 2000
AND THE PERIOD JANUARY 12, 1999 (DATE OF INCEPTION)
TO MAY 31, 1999
(UNAUDITED)
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
BALANCE SHEET
May 31, 2000
(Unaudited)
ASSETS
Cash $ 9
LIABILITIES AND PARTNERS' EQUITY
Liabilities -
Accounts payable $ 850
Due to affiliate (Note 2)
Total Liabilities 850
Partners' Capital -
Limited partners (1 unit) $ (1,029)
General partner (4 units) 188
Total Partners' Capital $ (841)
$ 9
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
THE FIVE MONTHS ENDED MAY 31, 2000 AND
THE PERIOD JANUARY 12, 1999 (INCEPTION)
TO MAY 31, 2000
(Unaudited)
Five Months Initial Period
Ended January 12, 1999 to
May 31, 2000 May 31, 2000
REVENUES $ $
Total Revenues
EXPENSES
Organizational costs (Note 1)
Shipping expense 320
Dues and subscriptions 300 300
Other administrative expenses 388 514
Total Expenses 688 1,134
NET LOSS $ (688) $ (1,134)
NET LOSS -
Limited partnership unit $ (257) $ (480)
General partnership unit $ (227) $ (451)
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
THE FIVE MONTHS ENDED MAY 31, 2000 AND
THE PERIOD JANUARY 12, 1999 (INCEPTION)
TO MAY 31, 2000
(Unaudited)
Five Months Initial Period
Ended January 12, 1999 to
May 31, 2000 May 31, 2000
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (688) $ (1,134)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities
Increase in accounts payable 850 850
Net Cash Provided By (Used In)
Operating Activities $ 162 $ (284)
CASH FLOWS FROM
INVESTING ACTIVITIES
CASH FLOWS FROM
FINANCING ACTIVITIES
Partner contributions 3,000 5,000
Syndication costs (4,707) (4,707)
Net Cash Provided By (Used In)
Financing Activities (1,707) 293
NET INCREASE (DECREASE) IN CASH $ (1,545) $ 9
CASH -
Beginning of period 1,554
End of period $ 9 $ 9
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF PARTNERS' EQUITY
FOR THE FIVE MONTHS ENDED MAY 31, 2000
AND PERIOD JANUARY 12, 1999 (INCEPTION) TO MAY 31, 2000
(UNAUDITED)
FIVE MONTHS ENDED MAY 31, 2000
LIMITED PARTNERS GENERAL PARTNERS TOTAL PARTNERS'
EQUITY
Amount Units Amount Units Amount Units
Balance January 1, 2000 $ 777 1 $ 777 1 $1,554 2
Partner Contributions 3,000 3 3,000 3
Syndication costs paid (1,549) (3,158) (4,707)
Net loss (257) (431) (688)
Balance - May 31, 2000 $(1,029) 1 $ 188 4 $ (841) 5
PERIOD JANUARY 12, 1999 (INCEPTION) TO MAY 31, 2000
Partner Contributions $ 1,000 1 $4,000 4 $5,000 5
Syndication costs paid (1,549) (3,158) (4,707)
Net loss (480) (654) (1,134)
Balance - May 31, 2000 $(1,029) 1 $ 188 4 $ (841) 5
Value per unit $(168.20)
Total partnership units 5
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
(Unaudited)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Bromwell Financial Fund, Limited Partnership (the Fund)
was formed January 12, 1999 under the laws of the State of Delaware. The
Fund expects to engage in the speculative trading of futures contracts in
commodities, however, the Fund will not commence business until at least
$700,000 worth of partnership interests are sold. Belmont Capital
Management, Inc. and Shira Pacult are the general partners and commodity pool
operators of Bromwell Financial Fund, Limited Partnership. The commodity
trading advisor (CTA) is expected to be Ansbacher Investment Management,
Inc., which has the authority to trade so much of the Fund's equity as is
allocated to it by the General Partners.
The Partnership is in the development stage and its
efforts through May 31, 2000 have been principally devoted to organizational
activities.
Income Taxes - In accordance with the generally accepted method of
presenting partnership financial statements, the financial statements do not
include assets and liabilities of the partners, including their obligation
for income taxes on their distributive shares of the net income of the Fund
or their rights to refunds on its net loss.
Offering Expenses and Organizational Costs - Contingent upon the sale
of at least $700,000 of partnership interests, offering costs of $47,000 will
be paid from the gross proceeds contributed and charged to the partners'
capital accounts. Subject to the above contingency, organizational costs are
charged to expense as incurred. Through May 31, 2000, the sum of $2,399 in
organization costs and $11,641 in offering costs has been paid to date by an
affiliate. These costs have not been reflected in the financial statements
since they will not be reimbursed until the minimum offering amount is raised
and the total amount of these costs has yet to be determined. In addition,
the partnership has incurred and paid an additional $4,707 in syndication
costs representing fees for preparation of financial statements and shipping
expenses for various documents prepared. Since these costs were paid from
the Partnership's funds, they were reflected in the financial statements.
Registering Costs - Costs incurred for the initial filings with
Securities and Exchange Commission, Commodity Futures Trading Commission,
National Futures Association (the "NFA") and the states where the offering is
expected to be made are accumulated, deferred and charged against the gross
proceeds of offering at the initial closing as part of the offering expenses.
Recurring registration costs, if any, will be charged to expense as incurred.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
(Unaudited)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Revenue Recognition - Commodity futures contracts are recorded on the
trade date and will be reflected in the balance sheet at the difference
between the original contract amount and the market value on the last
business day of the reporting period.
Market value of commodity futures contracts is based
upon exchange or other applicable market best available closing quotations.
Use of Accounting Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
Statement of Cash Flows - For purposes of the Statement of Cash Flows,
the Fund will consider only money market funds to be cash equivalents. As of
the balance sheet date, the Fund has no cash equivalents. Net cash provided
by operating activities include no cash payments for interest or income taxes
as of May 31, 2000.
2. DUE TO AFFILIATE
The Fund's individual general partner is a joint owner of Futures
Investment Company and this Company has funded most of the organizational and
offering costs incurred by the Fund to date.
3. GENERAL PARTNER DUTIES
The responsibilities of the General Partner, in
addition to directing the trading and investment activity of the Fund,
including suspending all trading, includes executing and filing all necessary
legal documents, statements and certificates of the Fund, retaining
independent public accountants to audit the Fund, employing attorneys to
represent the Fund, reviewing the brokerage commission rates to determine
reasonableness, maintaining the tax status of the Fund as a limited
partnership, maintaining a current list of the names, addresses and numbers
of units owned by each Limited Partner and taking such other actions as
deemed necessary or desirable to manage the business of the Partnership.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
(Unaudited)
3. GENERAL PARTNER DUTIES - CONTINUED
If the net unit value of the partnership falls to less
than 50% of the greater of the original $1,000 selling price, less
commissions and other charges or such higher value earned through trading,
then the General Partner will immediately suspend all trading, provide all
limited partners with notice of the reduction and give all limited partners
the opportunity, for fifteen days after such notice, to redeem partnership
interests.
4. THE LIMITED PARTNERSHIP AGREEMENT
The Limited Partnership Agreement provides, among other
things, that
Capital Account - A capital account shall be established for each
partner. The initial balance of each partner's capital account shall be the
amount of the initial contributions to the partnership.
Monthly Allocations - Any increase or decrease in the Partnership's net
asset value as of the end of a month shall be credited or charged to the
capital account of each Partner in the ratio that the balance of each account
bears to the total balance of all accounts.
Any distribution from profits or partners' capital will
be made solely at the discretion of the General Partners.
Allocation of Profit and Loss for Federal Income Tax Purposes - As of
the end of each fiscal year, the Partnership's realized capital gain or loss
and ordinary income or loss shall be allocated among the Partners, after
having given effect to the fees of the General Partner and the Commodity
Trading Advisors and each Partner's share of such items are includable in the
Partner's personal income tax return.
Redemption - No partner may redeem or liquidate any units until after
the lapse of six months from the date of the investment. Thereafter, a
Limited Partner may withdraw, subject to certain restrictions, any part or
all of his units from the partnership at the net asset value per unit on the
last day of any month on ten days prior written request to the General
Partner. A redemption fee payable to the partnership of a percentage of the
value of the redemption request is charged pursuant to the following
schedule:
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
(Unaudited)
4. THE LIMITED PARTNERSHIP AGREEMENT - CONTINUED
4% if such request is received ten days prior to the last trading day
of the month in which the redemption is to be effective from the sixth month
to the twelfth month after the date of the investment in the Fund.
3% if such request is received during the next six month period.
2% if such request is received during the next six month period.
1% if such request is received during the next six month period.
0% thereafter.
5. FEES
The Fund will be charged the following fees on a monthly basis as of
the commencement of trading.
A management fee of 1% (annual rate) of the Fund's net assets allocated
to each CTA to trade will be paid to each CTA and 3% of the Fund's net assets
allocated to all CTA's will be paid to the Fund's Corporate General Partners.
An incentive fee of 20% of "new trading profits" will be paid to each
CTA. "New trading profits" includes all income earned by a CTA and expense
allocated to his activity. In the event that trading produces a loss, no
incentive fees will be paid and all losses will be carried over to the
following months until profits from trading exceed the loss. It is possible
for one CTA to be paid an incentive fee during a quarter or a year when the
Fund experienced a loss.
The Fund will pay fixed commissions of 11% (annual rate) of assets
assigned to be traded, payable monthly, to the introducing broker affiliated
with the General Partners. The Affiliated Introducing Broker will pay the
costs to clear the trades to the futures commission merchant and all PIT
Brokerage costs which shall include the NFA and exchange fees.
The General Partner has reserved the right to change the management fee
and the incentive fee at its sole discretion.
6. SUBSEQUENT EVENTS
Subsequent to the balance sheet date, the Fund has
broken escrow and sold over $700,000 of partnership interests. Also to date,
organization costs of $5,000 and offering costs of $59,526 have been
incurred. Since the fund has sold at least $700,000 in partnership interests
it has commenced trading. None of these transactions have been reflected in
the May 31, 2000 financial statements.
*******************************************************************************
BELMONT CAPITAL MANAGEMENT, INC.
FINANCIAL STATEMENTS
FOR THE PERIOD JANUARY 12, 1999
(DATE OF INCORPORATION)
TO DECEMBER 31, 1999
Purchase of units in the partnership will not
acquire or otherwise have any interest
in this Company.
<PAGE>
BELMONT CAPITAL MANAGEMENT, INC.
FOR THE PERIOD JANUARY 12, 1999
(DATE OF INCORPORATION)
TO DECEMBER 31, 1999
TABLE OF CONTENTS
Page
Independent Auditors' Report 1
Financial Statements -
Balance Sheet 2
Statement of Income and Accumulated Deficit 3
Statement of Cash Flows 4
Notes to Financial Statements 5 - 6
Purchase of units in the partnership will not
acquire or otherwise have any interest
in this Company.
<PAGE>
To The Shareholders
Belmont Capital Management, Inc.
Dover, Kent County, Delaware
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of BELMONT CAPITAL
MANAGEMENT, INC. as of December 31, 1999, and the related statements of
income and accumulated deficit and cash flows for the period from January 12,
1999 (date of incorporation) to December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of BELMONT CAPITAL
MANAGEMENT, INC. as of December 31, 1999, and the results of its operations
and its cash flows for the period from January 12, 1999 (date of
incorporation) to December 31, 1999, in conformity with generally accepted
accounting principles.
/s/ Frank L. Sassetti & Co.
February 22, 2000
Oak Park, Illinois
Purchase of units in the partnership will not
acquire or otherwise have any interest
in this Company.
<PAGE>
BELMONT CAPITAL MANAGEMENT, INC.
BALANCE SHEET
December 31, 1999
ASSETS
CURRENT ASSETS
Cash $ 838
------
INVESTMENTS (Note 3) 777
------
$1,615
======
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Due to Futures Investment Co. $2,202
Advance from stockholder 1,000
------
3,202
------
STOCKHOLDER'S EQUITY
Capital stock (common 1,500 shares authorized,
no par value; 1,000 issued and outstanding) 1,000
Accumulated deficit (2,587)
------
Total Stockholder's Equity (Deficit) (1,587)
------
$1,615
======
Purchasers of units in the partnership will not
acquire or otherwise have any interest
in this Company
The accompanying notes are an integral part
Of the financial statements.
<PAGE>
BELMONT CAPITAL MANAGEMENT, INC.
STATEMENT OF INCOME AND ACCUMULATED DEFICIT
JANUARY 12, 1999 (DATE OF INCORPORATION)
TO DECEMBER 31, 1999
REVENUES $_______
EXPENSES
Organizational costs 2,202
Office 162
--------
(LOSS) BEFORE EQUITY IN LIMITED PARTNERSHIP (2,364)
EQUITY (LOSS) IN LIMITED PARTNERSHIP 223
--------
NET INCOME (2,587)
ACCUMULATED DEFICIT
Beginning of period ________
End of period $(2,587)
========
Purchasers of units in the partnership will not
acquire or otherwise have any interest
in this Company
The accompanying notes are an integral part
Of the financial statements.
<PAGE>
BELMONT CAPITAL MANAGEMENT, INC.
STATEMENT OF CASH FLOWS
JANUARY 12, 1999 (DATE OF INCORPORATION)
TO DECEMBER 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 2,587
Adjustments to reconcile net loss to net cash
used in by operating activities -
(Equity) loss in limited partnership 223
Changes in operating assets and liabilities
Costs advanced by affiliate 2,202
--------
Net Cash Used in
Operating Activities (162)
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment interest in limited partnership (1,000)
--------
Net Cash Used in
Investing Activities (1,000)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock 1,000
Advance from stockholder 1,000
--------
Net Cash Provided by
Financing Activities 2,000
--------
NET INCREASE IN CASH 838
CASH -
Beginning of period ________
End of period $ 838
========
Purchasers of units in the partnership will not
acquire or otherwise have any interest
in this Company
The accompanying notes are an integral part
Of the financial statements.
<PAGE>
BELMONT CAPITAL MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Belmont Capital Management, Inc. (the Company) was formed on
January 12, 1999 under the laws of the State of Delaware to act as a general
partner and commodity pool operator of the Bromwell Financial Fund, Limited
Partnership (the Fund). It became registered as a commodity pool operator
and a member of the National Futures Association on August 5, 1999.
The responsibilities of the General Partner, in addition to the
selection of trading advisors and other activity of the Fund, include
executing and filing all necessary legal documents, statements and
certificates of the Fund, retaining independent public accountants to audit
the Fund, employing attorneys to represent the Fund, reviewing the brokerage
commission rates to determine reasonableness, maintaining the tax status of
the Fund as a limited partnership, maintaining a current list of the names,
addresses and numbers of units owned by each Limited Partner and taking such
other actions as deemed necessary or desirable to manage the business of the
Partnership.
Organizational Costs - Organizational costs are charged to expense as
incurred.
Use of Accounting Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
Statement of Cash Flows - For purposes of the Statement of cash flows,
the Company will consider only money market funds to be cash equivalents. As
of the balance sheet date, the Company has no cash equivalents. Net cash
provided by operating activities includes no cash payment for interest nor
income taxes for the initial period January 12, 1999 (date of incorporation)
to December 31, 1999.
Purchase of units in the partnership will not
acquire or otherwise have any interest
in this Company.
<PAGE>
BELMONT CAPITAL MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
2. CORPORATE AFFILIATION
The Company's sole shareholder is also a joint owner of
Futures Investment Company. In addition, the Company is a general partner of
Bromwell Financial Fund, a limited partnership (the Fund).
3. INVESTMENTS
The Company purchased an interest as the general partner in a
limited partnership (a development stage enterprise) with an initial investment
of $1,000. The investment is being accounted for under the equity method and
to date has incurred losses of $223. The Company has no legal obligations as a
guarantor or general partner of the Fund nor is it committed to provide
additional financial support for the Fund.
Purchase of units in the partnership will not
acquire or otherwise have any interest
in this Company.
<PAGE>
*******************************************************************************
BELMONT CAPITAL MANAGEMENT, INC.
FINANCIAL STATEMENTS
FOR THE FIVE MONTHS ENDED MAY 31, 2000
AND THE PERIOD JANUARY 12, 1999 (DATE OF INCORPORATION)
TO MAY 31, 1999
(UNAUDITED)
Purchasers of units in the partnership will not acquire or
otherwise have any interest in this company
BELMONT CAPITAL MANAGEMENT, INC.
BALANCE SHEET
MAY 31, 2000 AND 1999
(UNAUDITED)
ASSETS
2000 1999 (Note 4)
CURRENT ASSETS
Cash $ 638 $
INVESTMENTS (Note 3)
Investments in and advances to partnership 2,165
$2,803 $
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
LIABILITIES
Accounts payable 1,085
Due to Futures Investment Co. (Note 2) 2,602
Advance from stockholder 3,000
6,687
STOCKHOLDER'S EQUITY (DEFICIT)
Capital stock (common 1,500 shares authorized,
no par value; 1,000 issued and outstanding) 1,000
Accumulated deficit (4,884)
Total Stockholder's Equity (Deficit) (3,884)
$ 2,803 $
Purchasers of units in the partnership will not acquire or
otherwise have any interest in this company
BELMONT CAPITAL MANAGEMENT, INC.
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FIVE MONTHS ENDED MAY 31, 2000 AND
JANUARY 12, 1999 (DATE OF INCORPORATION)
TO MAY 31, 1999
(UNAUDITED)
2000 1999 (Note 4)
REVENUES $ $
EXPENSES
Professional fees 350
Licenses 115
Office 25
(LOSS) BEFORE EQUITY IN LIMITED PARTNERSHIP (490)
EQUITY (LOSS) IN LIMITED PARTNERSHIP (1,807)
NET INCOME (LOSS) (2,297)
ACCUMULATED DEFICIT
Beginning of period (2,587)
End of period $(4,884) $
Purchasers of units in the partnership will not acquire or
otherwise have any interest in this company
BELMONT CAPITAL MANAGEMENT, INC.
STATEMENT OF CASH FLOWS
FIVE MONTHS ENDED MAY 31, 2000 AND
JANUARY 12, 1999 (DATE OF INCORPORATION)
TO MAY 31, 1999
(UNAUDITED)
2000 1999 (Note 4)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (2,297) $
Adjustments to reconcile net loss to net
cash provided by operating activities -
(Equity) loss in limited partnership 1,807
Changes in operating assets and liabilities
Increase in accounts payable 1,085
Costs advanced by affiliate 400
Net Cash Provided By Operating Activities 995
CASH FLOWS FROM INVESTING ACTIVITIES
Net Cash Used In Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Advance from stockholder 2,000
Advances to partnership (3,195)
Net Cash Used In Financing Activities (1,195)
NET DECREASE IN CASH (200)
CASH
Beginning of period 838
End of period $ 638 $
Purchasers of units in the partnership will not acquire or
otherwise have any interest in this company
BELMONT CAPITAL MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 AND 1999
(UNAUDITED)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Belmont Capital Management, Inc. (the Company) was formed on January
12, 1999 under the laws of the State of Delaware to act as a general partner
and commodity pool operator of the Bromwell Financial Fund, Limited
Partnership (the Fund). It became registered as a commodity pool operator
and a member of the National Futures Association on August 5, 1999.
The responsibilities of the General Partner, in addition to the
selection of trading advisors and other activity of the Fund, include
executing and filing all necessary legal documents, statements and
certificates of the Fund, retaining independent public accountants to audit
the Fund, employing attorneys to represent the Fund, reviewing the brokerage
commission rates to determine reasonableness, maintaining the tax status of
the Fund as a limited partnership, maintaining a current list of the names,
addresses and numbers of units owned by each Limited Partner and taking such
other actions as deemed necessary or desirable to manage the business of the
Partnership.
Organizational Costs - Organizational costs are charged to expense as
incurred.
Use of Accounting Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
Statement of Cash Flows - For purposes of the statement of cash flows,
the Company will consider only money market funds to be cash equivalents. As
of the balance sheet date, the Company has no cash equivalents. Net cash
provided by operating activities includes no cash payment for interest nor
income taxes for the five months ended May 31, 2000 or the initial period
January 12, 1999 (date of incorporation) to May 31, 1999.
2. CORPORATE AFFILIATIONS
The Company's sole shareholder is also a joint owner of Futures
Investment Company. In addition, the Company is a general partner of
Bromwell Financial Fund, a limited partnership (the Fund).
Purchasers of units in the partnership will not acquire or
otherwise have any interest in this company
BELMONT CAPITAL MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 AND 1999
(UNAUDITED)
3. INVESTMENTS
The Company purchased an interest as the general partner in a limited
partnership (a development stage enterprise) with an initial investment of
$1,000. In addition the Company has advanced another $3,195 to the limited
partnership. The investment is being accounted for under the equity method
and to date has incurred losses of $2,030. The Company has no legal
obligations as a guarantor or general partner of the Fund nor is it committed
to provide additional financial support for the Fund. In accordance with
generally accepted accounting principles, accounting for the losses of the
investments have reduced investments in and advances to the partnership.
4. FINANCIAL STATEMENT PRESENTATION FOR 1999
No information on the balance sheet, statements of operations and
accumulated deficit or cash flows has been presented for 1999 because, as of
May 31, 1999, there had been no income, expenses, stock issuance or cash
transactions.
Purchasers of units in the partnership will not acquire or
otherwise have any interest in this company
*******************************************************************************
Part II
Statement of Additional Information
APPENDIX I
Commodity Terms And Definitions
Identification of the parties and knowledge of various terms and concepts
relating to trading in futures and forward contracts and this offering are
necessary for a potential investor to identify the risks of investment in the
Fund.
1256 Contract. See Taxation - Section 1256 Contract.
Additional Sellers. See definition of Selling Agent.
Affiliated Introducing Broker. The introducing broker is affiliated with
Mrs. Shira Del Pacult, one of the general partners and the sole principal of
Belmont Capital Management, Inc., the other general partner. The introducing
broker has no affiliation with the partnership. Also see definition of
Introducing Broker.
Associated Persons. The persons registered pursuant to the Commodity
Exchange Act with the futures commission merchant, the selling agent,
additional sellers, or the introducing broker who are eligible to service the
partnership, the partners and to receive trailing commissions.
Average Price System. The method approved by the Commodity Futures Trading
Commission to permit the commodity trading advisor to place positions sold or
purchased in a block to the numerous accounts managed by the advisor. See
The Commodity Trading Advisor in the main body of the prospectus.
Best Efforts. The term to describe that the party is liable only in the
event they intentionally fail or are grossly negligent in the performance of
the task described.
Broker. See definitions of Futures Commission Merchant and Introducing
Broker.
Capital means cash invested in the partnership by any partner and placed at
risk for the business of the partnership.
Commodity Futures trading Commission (CFTC). Commodity Futures Trading
Commission, 2033 K Street, Washington, D.C., 20581. An independent
regulatory commission of the United States government empowered to regulate
commodity futures transactions under the Commodity Exchange Act.
Commodity. Goods, wares, merchandise, produce, currencies, and stock indices
and in general everything that is bought and sold in commerce. Traded
commodities on U. S. Exchanges are sold according to uniform established
grade standards, in convenient predetermined lots and quantities such as
bushels, pounds or bales, are fungible and, with a few exceptions, are
storable over periods of time.
Commodity Broker. See definitions of Futures Commission Merchant and
Introducing Broker.
Commodity Exchange Act. The statute providing the regulatory scheme for
trading in commodity futures and options contracts in the United States under
the administration of the Commodity Futures Trading Commission which will
provide the opportunity for reparations and other redress for claims.
Commodity Pool Operator (CPO). Belmont Capital Management, Inc., 5916 N. 300
West, Fremont, IN 46737, (219) 833-1306; and, Mrs. Shira Del Pacult, 5916 N.
300 West, P.O. Box C, Fremont, IN 46737. A person that raises capital
through the sale of interests in an investment trust, partnership,
corporation, syndicate or similar form of enterprise, and uses that capital
to invest either entirely or partially in futures contracts.
Commodity Trading Advisor (CTA). Ansbacher Investment Management, Inc., 45
Rockefeller Plaza, 20th Floor, New York, New York 10111; and, Mangin RD#1 -
111A Pleasantville Road, Basking Ridge, New Jersey 07920. A person or
entity which renders advice about commodities or about the trading of
commodities, as part of a regular business, for profit. Particularly, those
who will be responsible for the analysis and placement of trades for the
partnership.
Daily Price Limit. The maximum permitted movement in a single direction
(imposed by an exchange and approved by the CFTC) in the price of a commodity
futures contract for a given commodity that can occur on a commodity exchange
on a given day in relation to the previous day's settlement price, which is
subject to change, from time to time, by the exchange (with CFTC approval).
Escrow Agent and Escrow Account. Star Financial Bank, 2004 N. Wayne St.,
Angola, IN 46703 which was selected by the general partner; and, the account
which will hold all the subscription documents and proceeds until such time
as either the subscription is accepted or the offering is terminated.
Exchange for Physicals (EFP). EFP is a practice whereby positions in futures
contracts may be initiated or liquidated by first executing the transaction
in the appropriate cash market and then arbitraging the position into the
futures market (simultaneously buying the cash position and selling the
futures position, or vice versa).
Form K-1. The section of the Federal Income Tax Return filed by the
partnership which identifies the amount of investment in the partnership, the
gains and losses for the tax year, and the amount of such gains and losses
reportable by a partner on the partner's tax return.
Fully-Committed Position. Each commodity trading advisor has an objective
percentage of equity to be placed at risk. In addition, the CFTC places
limits upon the number of positions a single commodity trading advisor may
have in commodities. When either the objective percentage of equity is
placed at risk or the commodity trading advisor reaches the limit in number
of positions, the account or accounts have a fully-committed position.
Futures Commission Merchant (FCM). Vision Limited Partnership, One Whitehall
Street, 15th floor, New York, New York, 10004. The person that solicits or
accepts orders for the purchase or sale of any commodity for future delivery
subject to the rules of any contract market and in connection with such
solicitation or acceptance of orders, accepts money or other assets to
margin, guarantee, or secure any trades or contracts that result from such
orders for a commission. The introducing broker is responsible for the
negotiation and payment of the commission to the futures commission merchant.
Futures Contract. A contract providing for (1) the delivery or receipt at a
future date of a specified amount and grade of a traded Commodity at a
specified price and delivery point, or (2) cash settlement of the change in
the value of the contract. The terms of these contracts are standardized for
each commodity traded on each exchange and vary only with respect to price
and delivery months. A futures contract should be distinguished from the
actual physical commodity, which is termed a cash commodity. Trading in
futures contracts involves trading in contracts for future delivery of
commodities and not the buying and selling of particular physical lots of
commodities. A contract to buy or sell may be satisfied either by making or
taking delivery of the commodity and payment or acceptance of the entire
purchase price therefore, or by offsetting the contractual obligation with a
countervailing contract on the same exchange prior to delivery.
Futures Investment Company. The selling agent and introducing broker, 5916
N. 300 West, P.O. Box C, Fremont, IN 46737 which will introduce the trades to
the futures commission merchant for a fixed commission of 11% of equity on
deposit at the futures commission merchant allocated by the general partner
to trade. Mrs. Shira Del Pacult, one of the general partners and the
principal of Belmont Capital Management, Inc., the other general partner, is
a 50% shareholder and one of the principals of Futures Investment Company.
Her husband, Michael Pacult, holds the other 50% and is also a principal.
General Partner. Belmont Capital Management, Inc., 5916 N. 300 West,
Fremont, IN 46737, (219) 833-1306; and, Mrs. Shira Del Pacult, 5916 N. 300
West, P.O. Box C, Fremont, IN 46737. The manager of the fund.
Gross Profits. The income or loss from all sources, including interest income
and profit and loss from non-trading activities, if any.
Initial Closing. When the minimum offering amount has been raised and escrow
funds are released to the partnership for commencement of trading.
Introducing Broker (IB). The introducing broker, Futures Investment Company,
5916 N. 300 West, P.O. Box C, Fremont, IN 46737, which will introduce the
trades to the futures commission merchant for a fixed commission of 11% of
equity on deposit at the futures commission merchant allocated by the general
partner to trade. Mrs. Shira Del Pacult, one of the general partners and the
principal of Belmont Capital Management, Inc., the other general partner, is
also one of the principals of the introducing broker, with her husband.
Introduction of Trades. The term used to describe the function performed by
the broker which handles the relationship between the partnership and the
futures commission merchant. See Introducing Broker.
Limited Partner. Persons admitted without management authority pursuant to
the partnership agreement.
Margin. A good faith deposit with a broker to assure fulfillment of the
terms of a futures contract.
Margin Call. A demand for additional monies to hold positions taken to
maintain a customer's account in compliance with the requirements of a
particular commodity exchange or of an futures commission merchant.
Minimum Offering/Maximum Offering. The Minimum is the amount required to be
invested before trading will commence, and the Maximum is the amount the
general partner establishes as the amount which will terminate this offering.
We raised in excess of the Minimum of $700,000 on July 11, 2000, and
currently are offering the balance of the partnership up to the Maximum of
$7,000,000.
National Association of Securities Dealers (NASD). National Association of
Security Dealers, Inc., the self regulatory organization responsible for the
legal and fair operation of broker dealers, such as the selling agent.
Net Assets or Net Asset Value means the total assets, including all cash and
cash equivalents (valued at cost plus accrued interest and earned discount),
less total liabilities, of the partnership (each determined on the basis of
generally accepted accounting principles, consistently applied under the
accrual method of accounting or as required by applicable laws, regulations
and rules including those of any authorized self regulatory organization).
See Exhibit A, The Limited Partnership Agreement, 1.2(e).
Net Unit Value. The net assets of the partnership divided by the total
number of units of partnership interests outstanding.
Net Gains. The net profit from all sources.
New Net Profit. The amount of income earned from trading, less the trading
losses and brokerage commissions and fees paid to clear the trades which are
incurred or accrued during the then current accounting period. See Charges to
the Partnership.
Net Worth. The excess of total assets over total liabilities as determined
by generally accepted accounting principles. Net worth for a prospective
investor shall be exclusive of home, home furnishings and automobiles.
Offering and Organizational Expenses. The partnership has paid offering
expenses of $59,526 and organizational expenses of $5,000 from the gross
proceeds of the offering at the time of the break of escrow at the initial
closing. For purposes of limitation, the total expenses cannot exceed 15% of
capital raised pursuant to the offering. Specifically, these expenses
include the Securities and Exchange Commission registration fee of $1,946,
the National Association of Securities Dealers filing fee of $1,200, legal
fees of $46,677, accounting fees of $5,795, Blue Sky expenses of $4,500,
printing costs of $3,000, mailing costs of $1,063, and licenses and permits
of $345. The $64,526 in offering and organizational expenses does not
include the first year's accounting, legal and other operating costs.
Option Contract. An option contract gives the purchaser the right (as
opposed to the obligation) to acquire (call) or sell (put) a given quantity
of a commodity or a futures contract for a specified period of time at a
specified price to the seller of the option contract. The seller has
unlimited risk of loss while the loss to a buyer of an option is limited to
the amount paid (premium) for the option.
Partners. The general partners and all limited partners in the partnership.
Partnership or Limited Partnership or Commodity Pool or Pool or Fund. The
Belmont Financial Fund, Limited Partnership, evidenced by Exhibit A to this
Prospectus, 5916 N. 300 West, Fremont, IN 46737, (219) 833-1306.
Position Limits. The Commodity Futures Trading Commission has established
maximum positions which can be taken in some, but not in all commodity
markets, to prevent the corner or control of the price or supply of those
commodities. These maximum number of positions are called position limits.
Principal. Mrs. Shira Del Pacult, one of the general partners and the
principal of the corporate general partner. Mrs. Pacult is also a principal
of the introducing broker.
Round-turn Trade. The initial purchase or sale of a futures or forward
contract and the subsequent offsetting sale or purchase of such contract.
Redemption. The right of a partner to tender its partnership interests to
the partnership for surrender at the net unit value. See the Limited
Partnership Agreement attached as Exhibit A.
Selling Agent. The National Association of Securities Dealers member broker
dealer, Futures Investment Company, 5916 N. 300 West, P.O. Box C, Fremont, IN
46737, selected by the general partner to offer the partnership interests for
sale. The general partner and the selling agent may select additional
selling agents to also offer partnership interests for sale. See Plan of
Distribution.
Selling Commissions. Six percent (6%) of the gross subscription amount
submitted by the prospective investor to be paid to the Selling Agent for
payment, in part, to Mrs. Pacult.
Scale in Positions. The commodity trading advisor selected by the general
partner presently has a large amount of equity under management. In some
situations, the positions desired to be taken on behalf of the partnership
and other accounts under management will be too large too be executed at one
time. The trading advisor intends to take positions at different prices, at
different times and allocate those positions on a ratable basis in accordance
with rules established by the Commodity Futures Trading Commission. This
procedure is defined as to scale in positions. The same definition and rules
apply when the trading advisor elects to exit a position.
Taxation - Section 1256 Contract is defined to mean: (1) any regulated
futures contract (RFC); (2) any foreign currency contract; (3) any non-equity
option; and (4) any dealer equity option.
The term RFC means a futures contract whether it is traded on or subject to
the rules of a national securities exchange which is registered with the
Securities and Exchange Commission, a domestic board of trade designated as a
contract market by the Commodity Futures Trading Commission or any other
board of trade, exchange or other market designated by the Secretary of
Treasury (a qualified board of exchange) and which is market-to-market to
determine the amount of margin which must be deposited or may be withdrawn.
A "foreign currency contract" is a contract which requires delivery of, or
the settlement of, which depends upon the value of foreign currency which is
currency in which positions are also entered at arm's length at a price
determined by reference to the price in the interbank market. (The Secretary
of Treasury is authorized to issue regulations excluding certain currency
forward contracts from marked-to-market treatment.) A non-equity option means
an option which is treated on a qualified board or exchange and the value of
which is not determined directly or indirectly by reference to any stock (or
group of stocks) or stock index unless there is in effect a designation by
the Commodity Futures Trading Commission of a contract market for a contract
bond or such group of stocks or stock index. A dealer equity option means,
with respect to an options dealer, only a listed option which is an equity
option, is purchased or granted by such options dealer in the normal course
of his activity of dealing in options, and is listed on the qualified board
or exchange on which such options dealer is registered. See Federal Income
Tax Aspects.
Trading Advisor. See Commodity Trading Advisor.
Trailing Commissions. The share of the fixed commissions to be paid to the
individual associated persons who work for the National Association of
Securities Dealers member broker dealers or the introducing broker who have
either sold the partnership interests to the partners or are providing
services to the general partner or the other partners.
Taking Positions Ahead of the Partnership. The allocation of trades by other
than legally accepted methods by the commodity trading advisor or other
trader which favors parties who took the position unfairly.
Trading Matrix. The dollar value used by a commodity trading advisor to
define the number of positions to be taken by the accounts under management.
Some commodity trading advisors have different trading matrices for different
sized accounts. For example, they may trade all accounts over one million in
size differently than accounts under one million.
Unit. The term used to describe the initial $1,000 value and subsequent Net
Asset Value of general and limited partner interests of the partnership.
Unrealized Profit Or Loss. The profit or loss which would be realized on an
open position if it were closed at the current settlement price or the most
recent appropriate quotation as supplied by the broker or bank through which
the transaction is effected.
Underwriter. This term is not applicable to this offering. All sales of
partnership interests will be on a best efforts basis. The price of the
units will not be guaranteed, supported or underwritten in any way. See
Selling Agent.
State Regulatory Glossary
The following definitions are supplied by the state securities
administrators responsible for the review of public futures fund (commodity
pool) offerings made to residents of their respective states. They belong to
the North American Securities Administrators Association, Inc. which publish
"Guidelines for the Registration of Commodity Pool Programs", such as the
Fund, which contain these definitions. The following definitions are
published from the Guidelines, however, the general partner has made
additions to, but no deletions from, some of these definitions to make them
more relevant to an investment in the Fund.
Administrator-The official or agency administering the security laws of
a state. This will usually be the State of residence of the Fund or the
domicile of the broker or brokerage firm which makes the offer or the
residence of the potential investor.
Advisor-Any person who, for any consideration, engages in the business
of advising others, either directly or indirectly, as to the value, purchase,
or sale of commodity contracts or commodity options. This definition applies
to the commodity trading advisors and, when it provides such advice, to the
general partner.
Affiliate-An Affiliate of a Person means: (a) any Person directly or
indirectly owning, controlling or holding with power to vote 10% or more of
the outstanding voting securities of such Person; (b) any Person 10% or more
of whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote, by such Person; (c) any Person,
directly or indirectly, controlling, controlled by, or under common control
of such Person; (d) any officer, director or partner of such Person; or (e)
if such Person is an officer, director or partner, any Person for which such
Person acts in any such capacity. See "Conflicts". This applies to the fact
that Mrs. Shira Del Pacult one of the general partners, is the sole
shareholder and principal of the other general partner and also owns 50% of
the outstanding voting shares and is a principal in the affiliated
introducing broker.
Capital Contributions-The total investment in a Program by a
Participant or by all Participants, as the case may be. The purchase price,
less sales commissions, for the partnership interests.
Commodity Broker-Any Person who engages in the business of effecting
transactions in commodity contracts for the account of others or for his own
account. See Futures Commission Merchant and Introducing Broker.
Commodity Contract-A contract or option thereon providing for the
delivery or receipt at a future date of a specified amount and grade of a
traded commodity at a specified price and delivery point.
Cross Reference Sheet-A compilation of the Guideline sections,
referenced to the page of the prospectus, Program agreement, or other
exhibits, and justification of any deviation from the Guidelines. This sheet
is used by the State Administrator to review this prospectus.
Net Assets-The total assets, less total liabilities, of the Program
determined on the basis of generally accepted accounting principles. Net
Assets shall include any unrealized profits or losses on open positions, and
any fee or expense including Net Asset fees accruing to the Program.
Net Asset Value Per Program Interest-The Net Assets divided by the
number of Program Interests outstanding.
Net Worth-The excess of total assets over total liabilities are
determined by generally accepted accounting principles. Net Worth shall be
determined exclusive of home, home furnishings and automobiles.
New Trading Profits-The excess, if any, of Net Assets at the end of the
period over Net Assets at the end of the highest previous period or Net
Assets at the date trading commences, whichever is higher, and as further
adjusted to eliminate the effect on Net Assets resulting from new Capital
Contributions, redemptions, or capital distributions, if any, made during the
period decreased by interest or other income, not directly related to trading
activity, earned on Program assets during the period, whether the assets are
held separately or in a margin account. See New Net Profit.
Organizational and Offering Expenses-All expenses incurred by the
Program in connection with and in preparing a Program for registration and
subsequently offering and distributing it to the public, including, but not
limited to, total underwriting and brokerage discounts and commissions
(including fees of the underwriter's attorneys), expenses for printing,
engraving, mailing, salaries of employees while engaged in sales activity,
charges of transfer agents, registrars, trustees, escrow holders,
depositories, experts, expenses of qualification of the sale of its Program
Interest under Federal and state law, including taxes and fees, accountants'
and attorneys' fees.
Participant-The holder of a Program Interest. A Partner in the Fund.
Person-Any natural Person, partnership, corporation, association or
other legal entity.
Pit Brokerage Fee-Pit Brokerage Fee shall include floor brokerage,
clearing fees, National Futures Association fees, and exchange fees. These
fees will be paid by the Introducing Broker from the fixed commissions.
Program-A limited partnership, joint venture, corporation, trust or
other entity formed and operated for the purpose of investing in Commodity
Contracts. The Fund.
Program Broker-A Commodity Broker that effects trades in Commodity
Contracts for the account of a Program. See the Futures Commission Merchant
and Introducing Broker.
Program Interest-A limited partnership interest or other security
representing ownership in a program. The units in the Fund. See Exhibit A,
the Limited Partnership Agreement.
Pyramiding-A method of using all or a part of an unrealized profit in a
Commodity Contract position to provide margin for any additional Commodity
Contracts of the same or related commodities.
Sponsor-Any Person directly or indirectly instrumental in organizing a
Program or any Person who will manage or participate in the management of a
Program, including a Commodity Broker who pays any portion of the
Organizational Expenses of the Program, and the general partner(s) and any
other Person who regularly performs or selects the Persons who perform
services for the Program. Sponsor does not include wholly independent third
parties such as attorneys, accountants, and underwriters whose only
compensation is for professional services rendered in connection with the
offering of the partnership interests. The term Sponsor shall be deemed to
include its Affiliates.
Valuation Date-The date as of which the Net Assets of the Program are
determined. For the Fund, this will be after the close of business on the
last business day of each month.
Valuation Period-A regular period of time between Valuation Dates. For
the Fund, this will be the close of business for each calendar month and each
calendar year.
[The balance of this page has been intentionally left blank]
*******************************************************************************
EXHIBIT A TO BROMWELL FINANCIAL FUND DISCLOSURE DOCUMENT
AGREEMENT OF LIMITED PARTNERSHIP OF
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
THIS LIMITED PARTNERSHIP AGREEMENT, (the "Agreement") dated the 1st day of
August, 1999, by and among Belmont Capital Management, Incorporated, a
Delaware corporation ("Belmont") as managing general partner, and Shira Del
Pacult as managing general partner (hereinafter referred to collectively with
Belmont as the "General Partner"), and those who are admitted as partners,
(hereinafter referred to as either "Limited Partners" or "Other General
Partners"), pursuant to the terms of this Agreement, (the General Partner,
any Other General Partners, and the Limited Partners are hereinafter
collectively referred to as the "Partners").
WITNESSETH:
IN CONSIDERATION of good and valuable consideration, the receipt of which is
hereby acknowledged, the General Partner and the sole Limited Partner entered
and formed a limited partnership (hereinafter called either the "Partnership"
or the "Fund") pursuant and subject to the Delaware Uniform Limited
Partnership Act (the "Act"), which is stated as follows:
ARTICLE I
Definitions and Risk Disclosure Statement
Certain terms used in this Agreement shall have the special meaning
designated below:
1.1 The term AFFILIATE means (1) any person controlled by or under common
control with another person, (2) a person owning or controlling 10% or more
of the outstanding voting securities of such other person, (3) any officer or
director of such other person, and (4) if such other person is an officer or
director, any other company for which such person acts as an officer or
director.
1.2 When referring to the capital of the Partnership:
(a) the term CAPITAL shall mean cash invested in the Partnership by any
Partner and placed at risk for the business of the Partnership;
(b) the term CAPITAL CONTRIBUTION shall mean, with respect to any Partner,
the sum of all Capital contributed to the Partnership pursuant to Article I;
(c) the term CAPITAL SUBSCRIPTION shall mean the amount set forth opposite
the name of such Partner in the schedule of Partners, which amount shall be
the purchase price, less sales commissions, if any, to be paid or paid by
such Partner for the Unit or Units in the Partnership purchased by such
Partner;
(d) the term INITIAL CAPITAL shall mean the sum of all Capital Subscriptions
received by the General Partner prior to commencement of trading;
(e) the term INTEREST INCOME shall mean the interest earned on the equity
the Partnership places on deposit with the Futures Commission Merchant. All
such Interest Income will be paid to the Partnership and used for its
benefit.
(f) the term NET ASSETS OR NET ASSET VALUE means the total assets, including
all cash and cash equivalents (valued at cost plus accrued interest and
earned discount), less total liabilities, of the Partnership (each determined
on the basis of generally accepted accounting principles, consistently
applied under the accrual method of accounting or as required by applicable
laws, regulations and rules including those of any authorized self regulatory
organization), specifically:
(i) Net Asset Value includes any unrealized profit or loss on open security
and commodity positions subject to reserves for loss established, from time
to time, by the General Partner;
(ii) All open stock, option, and commodity positions are calculated on the
then current market value, which shall be based upon the settlement price for
that particular position on the date with respect to which Net Asset Value is
being determined; provided, however, that if a position could not be
liquidated on such day due to the operation of the daily limits or other
rules of the exchange upon which that position is traded or otherwise, the
settlement price on the first subsequent day on which the position could be
liquidated shall be the basis for determining the market value of such
position for such day. As used herein, "settlement price" includes, but is
not limited to: (1) in the case of a futures contract, the settlement price
on the commodity exchange on which such futures contract is traded; and (2)
in the case of a foreign currency forward contract which is not traded on a
commodity exchange, the average between the lowest offered price and the
highest bid price, at the close of business on the day Net Asset Value is
being determined, established by the bank or broker through which such
forward contract was acquired or is then currently traded;
(iii) Brokerage commissions to close security and commodity positions, if
charged on a round-turn basis, are accrued in full at the time the position
is initiated (i.e., on a round-turn basis) as a liability of the Partnership;
(iv) Interest earned on all Partnership accounts is accrued at least
monthly;
(v) The amount of any distribution made by the Partnership is a liability of
the Partnership from the day when the distribution is declared by the General
Partner or as provided in this Agreement and the amount of any redemption is
a liability of the Partnership as of the valuation date; and
(vi) Syndication Costs incurred in organizing and all present and future
costs to increase or maintain the qualification of the Units available for
sale and the cost to present the initial and future offering of Units for
sale shall be capitalized when incurred and amortized and paid from Capital
or Monthly Profit as required by applicable law.
(g) the term PROFIT (LOSS) ATTRIBUTABLE TO UNITS means the product of A) the
number of Units divided into B) an amount equal to the Net Profit (Loss)
determined as follows: (1) the net of profits and losses realized on all
trades closed out, plus (2) the net of any unrealized profits and losses an
open positions as of the end of the period, less (3) the net of any
unrealized profits and losses on open positions as of the end of the
preceding period, minus, (4) the Expenses attributable to Units. Profit
(Loss) shall include interest earned on Partnership assets, realized and
unrealized capital gains or losses on U.S. Treasury bills, and other
securities;
(h) the term MANAGEMENT FEE shall mean up to six percent (6%) annually of
the Net Assets of the Partnership computed on the close of business on the
last day of each month and payable to the General Partner or independent
Commodity Trading Advisor, or both, without regard to the income or loss of
the Partnership for that period; presently, Belmont, one of the general
partners, and the Commodity Trading Advisors receive one half (1/2) and one
sixth (1/6), respectively, of the maximum Management Fee (3% to Belmont of
the Net Assets of the Partnership and 1% to each CTA of the trading equity
allocated to them);
(i) the term INCENTIVE FEE means a percentage of the profits accrued and
paid to the General Partner, or its Affiliates, of up to fifteen percent
(15%) annually of New Net Profit earned from inception of trading, through
the date of the computation, based upon total Capital of the Partnership. The
General Partner has reserved the right to both reduce the Incentive Fee below
fifteen percent (15%) and increase the Incentive Fee to a maximum of thirty
percent (30%), provided that in such case the Management Fee is
correspondingly lowered to 0%; presently, the Incentive Fee paid to Belmont
is twenty percent (20%), which is paid by Belmont to the CTAs;
(j) the term GROSS PROFIT OR LOSS means the income or loss from all sources,
including Interest Income and profit and loss from non-trading activities, if
any.
(k) the term NEW NET PROFIT OR LOSS means the amount of income earned from
trading, less the trading losses and brokerage commissions and fees paid to
clear the trades which are incurred or accrued during the then current
accounting period; and,
(l) the term NET GAINS means net profit from all sources.
(m) the term UNIT shall mean a partnership interest in the Partnership
requiring an initial Capital Contribution of one thousand dollars ($1,000),
less a sales commission, if any, or the Net Asset Value of the initial Unit,
as adjusted to reflect increases and decreases caused by receipt, accrual,
and payment of profit, Expenses, losses, bonuses, and fees, from time to
time.
1.3 When referring to costs and expenses of the Partnership to be allocated
and charged pursuant to this Agreement:
(a) the term EXPENSES shall mean costs allocated, incurred, paid, accrued,
or reserved, including the fixed commissions payable to the Introducing
Broker of eleven percent (11%) of the total equity placed under management
with the Commodity Trading Advisors, which are, in the opinion of the General
Partner, required, necessary or desirable to establish, manage, continue and
promote the business of the Partnership including, but not limited to, all
deferred organization costs, brokerage commissions, and all management and
incentive fees payable to the General Partner or to independent investment
and Commodity Trading Advisors by the Partnership as negotiated and
determined by the General Partner on behalf of the Partnership on a basis
consistently applied in accordance with generally accepted accounting
principals under the accrual method of accounting or as required by
applicable laws, regulations and rules including those of any authorized self
regulatory organization with proper jurisdiction over the business of the
Partnership; provided, however, Expenses shall not include salaries, rent,
travel, expenses and other items of General Partner overhead and, provided,
further, management fees, advisory fees and all other fees, except for
incentive fees and commodity brokerage commissions, the actual cost of legal
and audit services and extraordinary expenses, shall not exceed one half of
one percent of Net Assets per month (not to exceed six percent annually). If
necessary, the General Partner shall reimburse the Partnership no less
frequently than quarterly, for the amount by which such aggregate fees and
expenses exceed the limitations provided by NASAA Guideline IVC.1. During
the period for which reimbursement is made up to an amount not exceeding the
aggregate compensation received by the General Partner, including direct or
indirect participations in commodity brokerage commissions charged to the
Partnership. In addition, if reimbursement is required or ordinary expenses
are incurred, the General Partner shall include in the Partnership's next
regular report to the auditors a discussion of the circumstances or events
which resulted in the reimbursement or extraordinary expenses;
(b) the term NET UNIT VALUE shall mean the Net Asset Value divided, from
time to time, by the total number of Units outstanding;
(c) the term OFFERING PERIOD means the period of time established by the
General Partner after the Partnership begins to offer to sell Units at the
Net Unit Value ; and,
(d) the term SYNDICATION COSTS shall mean the promotion and syndication
costs of the Partnership and the costs of the offering of Units, and to
establish the initial business relationships on behalf of the Partnership,
including all legal and printing costs to prepare the Disclosure Documents,
registrations and filing fees, contract negotiation, and travel incurred
which are deemed necessary or desirable by the General Partner to form the
Partnership, be ready to engage in business, and to sell the Units.
1.4 The terms DISCLOSURE DOCUMENT, MEMORANDUM, OFFERING CIRCULAR, PROSPECTUS
and REGISTRATION STATEMENT shall mean the document or documents, together
with the exhibits and any subsequent continuations thereof, which describes
this Partnership to persons selected by the General Partner including, but
not limited to, potential purchasers of Units, or the Partners or to any
government or self regulatory agency or to persons selected by the General
Partner to participate in the affairs or provide services to the Partnership.
1.5 When referring to this Agreement and the Partners of the Partnership:
(a) the term ACT shall refer to the partnership act of Delaware.
(b) the term AGREEMENT refers to this Partnership agreement;
(c) the term GENERAL PARTNER shall refer to both Belmont Capital Management,
Incorporated, c/o Corporate Systems, Inc., 101 North Fairfield Drive, Dover,
DE 19901 (302) 697-2139 ("Belmont") and Shira Del Pacult, 5916 N. 300 West,
P.O. Box C, Fremont, IN 46737 (219) 833-1306 ("Ms. Pacult");
(d) the term LIMITED PARTNER shall refer to any party listed on the Schedule
of Limited Partners attached to this Agreement as Attachment I, as amended,
from time to time, pursuant to Article VI hereof;
(e) the term MAJORITY IN INTEREST shall refer to that number of Partners who
collectively hold over 50% of all of the outstanding Units held by all
Partners in the Partnership; provided, however, the Units held by the General
Partner cannot be considered to determine a MAJORITY IN INTEREST or otherwise
vote or consent regarding the question of removal of the General Partner or
other matters specifically expressed in Article V, Section 5.3. In addition,
see the rights and duties of the General Partner in Article IV and of the
Limited Partners in Articles V;
(f) the term OTHER GENERAL PARTNER refers to any General Partner other than
Belmont Capital Management, Incorporated and Shira Del Pacult; and
(g) the term PARTNERS refers to the General Partner, any Other General
Partner, and the Limited Partners, collectively.
1.6 RISK DISCLOSURE STATEMENT.
YOU SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS
YOU TO PARTICIPATE IN A COMMODITY POOL. IN SO DOING, YOU SHOULD BE AWARE
THAT FUTURES AND OPTIONS TRADING CAN QUICKLY LEAD TO LARGE LOSSES AS WELL AS
GAINS. SUCH TRADING LOSSES CAN SHARPLY REDUCE THE NET ASSET VALUE OF THE
POOL AND CONSEQUENTLY THE VALUE OF YOUR INTEREST IN THE POOL. IN ADDITION,
RESTRICTIONS ON REDEMPTIONS MAY AFFECT YOUR ABILITY TO WITHDRAW YOUR
PARTICIPATION IN THE POOL.
FURTHER, COMMODITY POOLS MAY BE SUBJECT TO SUBSTANTIAL CHARGES FOR
MANAGEMENT, AND ADVISORY AND BROKERAGE FEES. IT MAY BE NECESSARY FOR THOSE
POOLS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS
TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THE PARTNERSHIP'S
DISCLOSURE DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF EACH EXPENSE TO BE
CHARGED THIS POOL AT PAGE 5 AND A STATEMENT OF THE PERCENTAGE RETURN
NECESSARY TO BREAK EVEN, THAT IS, TO RECOVER THE AMOUNT OF YOUR INITIAL
INVESTMENT, AT PAGE 14.
THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER FACTORS
NECESSARY TO EVALUATE YOUR PARTICIPATION IN THIS COMMODITY POOL. THEREFORE,
BEFORE YOU DECIDE TO PARTICIPATE IN THIS COMMODITY POOL, YOU SHOULD CAREFULLY
STUDY THIS AGREEMENT AS WELL AS THE PARTNERSHIP'S DISCLOSURE DOCUMENT,
INCLUDING A DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, AT
PAGE 5.
YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY POOL MAY TRADE FOREIGN
FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE
UNITED STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET,
MAY BE SUBJECT TO REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION
TO THE POOL AND ITS PARTICIPANTS. FURTHER, UNITED STATES REGULATORY
AUTHORITIES MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF
REGULATORY AUTHORITIES OR MARKETS IN NON-UNITED STATES JURISDICTIONS WHERE
TRANSACTIONS FOR THE POOL MAY BE EFFECTED.
ARTICLE II
Partnership Organization and Purpose
2.1 PARTNERSHIP NAME AND LOCATION OF BOOKS AND RECORDS. The name of the
Partnership, as filed with the state of Delaware, shall be Bromwell Financial
Fund, Limited Partnership. The address where the books and records of the
Partnership will be maintained for inspection by the Partners is c/o
Corporate Systems, Inc., 101 North Fairfield Drive, Dover, DE 19901 (302)
697-2139 or such other address as the General Partner shall, from time to
time, determine.
2.2 PARTNERSHIP AFFILIATES.
(a) POOL OPERATOR NAME AND PRINCIPALS. The General Partner shall serve as
the commodity pool operator for the Partnership. In addition to being one of
the general partners, Shira Del Pacult is the sole principal, shareholder,
director and officer of Belmont Capital Management, Inc., the other general
partner and is solely responsible for the business decisions of the
Partnership, including, but not limited to, selection of the Commodity
Trading Advisors (the "CTAs"). The signature of either Ms. Pacult or Belmont
may bind the Partnership.
THIS POOL HAS NOT BEGUN TRADING AND DOES NOT HAVE ANY PERFORMANCE HISTORY.
THE REGULATIONS OF THE CFTC AND NFA PROHIBIT ANY REPRESENTATION BY A PERSON
REGISTERED WITH THE CFTC OR BY ANY MEMBER OF THE NFA, RESPECTIVELY, THAT SUCH
REGISTRATION OR MEMBERSHIP IN ANY RESPECT INDICATES THAT THE CFTC OR THE NFA,
AS THE CASE MAY BE, HAS APPROVED OR ENDORSED SUCH PERSON OR SUCH PERSON'S
TRADING PROGRAMS OR OBJECTIVES. THE REGISTRATIONS AND MEMBERSHIPS DESCRIBED
IN THIS PROSPECTUS MUST NOT BE CONSIDERED AS CONSTITUTING ANY SUCH APPROVAL
OR ENDORSEMENT. LIKEWISE, NO COMMODITY EXCHANGE HAS GIVEN OR WILL GIVE ANY
SUCH APPROVAL OR ENDORSEMENT.
The General Partner has limited experience in the management of commodity
pools; however, Ms. Pacult, has been supervising individual managed commodity
accounts for over 18 years and serves as the principal of the corporate
general partner for three other funds and as an individual general partner
for one of those funds. See "Performance of Fremont Fund, Limited
Partnership" in the Partnership's Prospectus.
(b) COMMODITY TRADING ADVISORS NAMES AND PRINCIPALS. The General Partner
has selected two independent CTAs to trade the assets of the Partnership,
Ansbacher Investment Management, Inc. and Mangin Capital Management, Inc. The
CTAs' performance record and business background are disclosed in the
Partnership's Prospectus under "Trading Management". The CTAs will have no
ownership in the Partnership and its compensation is described in 4.6(f).
The CTAs will enter trades on behalf of the Partnership directly with the
FCM without the prior knowledge or approval of the General Partner of the
methods used by the CTAs to select the trades, the number of contracts, or
the margin required. From 5% to 40% of the Net Asset Value on deposit with
the FCM is expected to be committed to margin to hold positions taken by the
CTAs for the accounts of the Partnership.
(c) INTRODUCING BROKER AND FUTURES COMMISSION MERCHANT NAMES AND
PRINCIPALS. Futures Investment Company, 5916 N. 300 West, P.O. Box C,
Fremont, IN 46737 (219) 833-1306 will serve as the Introducing Broker ("IB")
for the Partnership and will be paid a fixed amount for brokerage commissions
of eleven percent (11%) per year, payable monthly by the Partnership, for
introducing trades through Vision Limited Partnership, the futures commission
merchant (the "FCM"). The IB will pay the round-turn brokerage commissions,
pit brokerage and other clearing expenses to the FCM, which will act in the
normal capacity as futures commission merchant and will hold the equity
assigned by the General Partner for trading and will clear the trades entered
by the CTAs pursuant to the powers of attorney granted by the General Partner
to the CTAs to trade on behalf of the Partnership.
2.3 CHARACTER OF THE BUSINESS. The Partnership's business purpose is to
increase Capital through the speculative and hedge trading of futures and
options on futures. The General Partner is authorized to do any and all
things on behalf of the Partnership incident thereto or connected therewith
including, but not limited to:
(a) trade, buy, sell or otherwise acquire, hold or dispose of all forms of
investments (including tangibles and intangibles, foreign currencies,
mortgage-backed securities, money market instruments, stock and futures
options, and any other securities or items which are now, or may hereafter
be, the subject of barter or stock or futures trading), commodity futures,
and forward contracts and any rights pertaining thereto. The Partnership
shall carry on the foregoing activities through the exercise of judgment by
its General Partner and/or the Investment and/or Commodity Trading Advisors
and consultants and brokers selected by the General Partner. The General
Partner may serve as an investment or trading advisor to the Partnership for
management fees, reimbursement of costs and other remuneration, but not
incentive fees, at the lesser of (i) the rates charged either by independent
third parties for similar services to other partnerships, or (ii) the rates
charged by the General Partner to others for the same service.
(b) invest and trade, on margin or otherwise, in capital stocks, bonds,
debentures, trust receipts and other obligations, instruments or evidences of
indebtedness, gold, silver, cattle, corn, wheat, soybeans, or any other asset
for which a trading market is maintained or otherwise paid for by cash or
otherwise including, but not limited to, the right to sell short and to cover
such short sales.
(c) possess, sell, exchange, discount, transfer, mortgage, pledge, deal in,
maintain multiple accounts for, and to exercise all rights, powers,
privileges and other rights, incidental to ownership of the assets held by
the Partnership.
(d) borrow or raise monies and, from time to time without limit as to
amount, to issue, accept, endorse and execute promissory notes, draft bills
of exchange, warrants, bonds, debentures and other negotiable or non-
negotiable instruments and evidences of indebtedness, and to secure the
payment of any thereof and the interest thereon by mortgage or pledge,
conveyance or assignment in trust of the whole or any part of the property of
the Partnership, whether at the time owned or thereafter acquired, and to
sell, pledge of otherwise dispose of such instruments issued by the
Partnership for its purposes; form and own one or more corporations to engage
in such businesses as the General Partner shall deem advisable.
(e) lend any of its properties or funds, either with or without security in
furtherance of the objects and purposes of the Partnership as the General
Partner shall deem advisable and consent.
(f) rent or own and maintain one or more offices staffed as the General
Partner shall determine and to do such other acts attendant thereto as may be
necessary or desirable.
(g) waive the sales commission to acquire investment Capital as the General
Partner, in its sole discretion, may determine.
(h) enter, make and perform all contracts, surety and guarantees as may be
necessary or advisable or incidental to the carrying out of the foregoing
objects and purposes.
2.4 ADDRESS OF PARTNERS. The General Partner's address is listed in
paragraph 1.5(a) hereof and the Limited Partners' addresses are on record at
the office of the General Partner to the Partnership.
2.5 TERM OF PARTNERSHIP. The term of the Partnership shall commence on the
date of this Agreement and shall continue until dissolved or terminated
pursuant to Article IX.
2.6 REGISTRATION. The General Partner, on behalf of the Partnership, shall
have the authority, but not the obligation, to cause a Registration statement
to be filed, and such amendments thereto as the General Partner deems
advisable, with the appropriate Federal and state regulatory agencies,
including the United States Securities and Exchange Commission and the
commission of securities for registration under the securities laws of the
various states and any other jurisdiction desirable or proper to the sale of
Units to qualify for public offerings. Each of the Limited Partners hereby
confirm and ratify all action taken and things done by the General Partner
with respect to such filings and public offerings. The General Partner may
make such other arrangements for the sale of Units, including the private
placement of Units, as it deems appropriate.
ARTICLE III
Capital Contributions and Allocation of Profits and Losses
3.1 CAPITAL CONTRIBUTIONS OF LIMITED PARTNERS.
(a) Each Limited Partner has delivered to the Partnership an executed
Subscription which has been accepted by the General Partner on behalf of the
Partnership, an Amended Certificate of Limited Partnership, and a check for
his subscription amount. The Partnership shall use the funds thus
contributed to pay, sales commissions, if any, Expenses, Organization Costs,
other expenses of the Partnership, and to provide capital to engage in
trading and to pay the management fees, if any, and, from profits, the
incentive fees and distributions to Partners Capital Accounts.
(b) Until such time as the General Partner elects to qualify the Partnership
Units for public sale, the General Partner will establish, from time to time,
the minimum amount which each Limited Partner will be required to contribute
to Capital of the Partnership. Upon receipt of notice from the General
Partner of such minimum (which will be equally applicable to all Limited
Partners), each Limited Partner will be required to contribute sufficient
Capital to equal or exceed such minimum or will withdraw and have his Units
redeemed as a Limited Partner pursuant to Article IX, Section 9.4. The
failure to contribute such Capital within ten days after receipt of said
notice from the General Partner shall be a request for redemption by the
Limited Partner. Upon election by the General Partner and qualification of
the Partnership Units for public sale, there will be no further right of the
General Partner to give notice of an increase in the minimum amount which all
Limited Partners will be required to contribute to Capital of the Partnership
other than as provided in Article VIII. Except for the increase in the
minimum amount which all Limited Partners, in the sole discretion of the
General Partner, shall be required to contribute to Capital or suffer
redemption and amendments required by Article VIII, there will be no required
contribution or assessments of the Limited Partners.
3.2 CAPITAL CONTRIBUTIONS OF GENERAL PARTNER.
(a) The General Partner has not made and shall not be required to make any
capital contribution to the Partnership except for purchases which are
required by law. Currently, the General Partner is required by the
applicable securities and tax laws to purchase (i) one percent (1%) or (ii)
$25,000 of the total Capital paid in by the Limited Partners, which ever is
greater.
(b) The General Partner and the initial Limited Partner have contributed in
excess of $1,000 to the Partnership. Immediately prior to the time the
Partnership commences trading and as may be required, thereafter, as the
result of the admission of additional Limited Partners, the General Partner
shall make such additional contribution to its capital or to the Partnership
so as to be certain that the General Partner has sufficient Capital at risk
to prevent the Partnership from loss of that element of the Partnership test
imposed by the Federal Internal Revenue Code and the Regulations promulgated
thereunder to permit the Partnership to be taxed as a partnership and not as
a corporation. The General Partner shall not reduce its Capital nor shall it
make any assignment or transfer of its interest or withdrawal of its
contribution while it is the General Partner which would reduce its
percentage interest in the Partnership to less than its percentage interest
at the time the Partnership commences trading. The General Partner may
withdraw any excess above the required percentage without notice to the
Limited Partners.
(c) Partnership interests shall be evidenced by Units. The General Partner,
on behalf of the Partnership, may, in accordance with applicable law and the
Offering Memorandum of the Partnership, issue Units to persons desiring to
become Limited Partners. For each Unit purchased during the initial Offering
Period, a Partner shall contribute one thousand dollars ($1,000), less the
sales commission, if any, to the Capital of the Partnership. After the
initial Offering Period and commencement of trading, a Partner shall
contribute an amount equal to the Net Asset Value of a Unit, plus the sales
commission, if any, on the valuation date following receipt of the
subscription agreements. The General Partner and Affiliates of the General
Partner may purchase Limited Partnership Units with the same rights as other
Limited Partners.
(d) All subscriptions for Units made pursuant to the offering of the Units
must be on the form provided with the Prospectus. No more than 7,000 Units
(the "Maximum") will be sold and a minimum number of Units must be sold as
follows:
(i) If subscriptions for at least 700 Units at an initial Net Unit Value of
$1,000 have been accepted (the "Minimum") by the General Partner within the
initial Offering Period of up to one year from the commencement of the
offering of sale of Units, including the Units subscribed for by the General
Partner, the General Partner may, pursuant to Paragraph 12, execute,
acknowledge, swear to, file and record on behalf of the Partnership and each
Limited Partner an amended Limited Partnership Agreement, cause such
subscriptions to be transferred from the escrow agent, Star Financial Bank,
2004 N. Wayne St., Angola, IN 46703, to the Partnership's trading account and
cause the Partnership to pay its organization costs pursuant to the
agreements negotiated by the General Partner and, thereafter, the aggregate
of all contributions to the Partnership shall be available to the Partnership
to carry on its business; or
(ii) If the General Partner has not received and accepted subscriptions for
the Minimum Units prior to the close of the Minimum Units Offering Period,
the offering of the Units shall terminate and all amounts paid by subscribers
for Units shall be returned in the manner provided in the Prospectus. All
Units subscribed for shall be issued to the collection of good funds, and any
Units issued to a Subscriber who has not provided collectible funds (whether
in the form of a bad check or draft, or otherwise) shall be canceled.
3.3 ALLOCATION OF PROFITS AND LOSSES
(a) A distribution account shall be established for each Partner which shall
include, as the initial balance thereof, each Partners' initial contribution
to the Partnership expressed in total dollars and Units purchased. As of the
close of business each month, allocations shall be made as follows:
(i) The Incentive Fee. The incentive fee upon New Net Profit at the rate of
twenty percent (20%), or such other rate as may be established pursuant to
1.2(h), shall be paid quarterly to the CTAs but allocated to the Partners
monthly.
(ii) The Profit (Loss) Attributable to Units shall be added to (subtracted
from) the distribution accounts of the Partners. Items of income, gain or
loss, accrued and paid Expenses shall be added to (subtracted from) the
distribution account of each Partner in accordance with the ratio that such
distribution account bears to the sum of all of the Partners' distribution
accounts.
(iii) The amount of any cash distributions to a Partner during such month
and any amount paid upon Redemption of Units as of the end of such month
shall be subtracted from the distribution account of such Partner.
(iv) The distribution account of any Unit which was redeemed shall be
reduced by the Redemption Charge per Unit multiplied by the number of Units
which were redeemed by the Partner represented by such distribution account.
The Redemption Charge, if any, shall be first used to defray expenses and any
excess treated as interest earned by the Fund.
ARTICLE IV
Rights and Obligations of the General Partner
4.1 GENERAL. The General Partner shall have full, exclusive and complete
discretion in the management and control of the affairs of the Partnership to
the best of its ability and shall use its best efforts to carry out the
purposes of the Partnership set forth in Article II. In connection
therewith, it shall have all powers of a general partner under the Act,
including, without limitation, the power to:
(a) enter, execute and maintain contracts, agreements and any or all other
instruments, and to do and perform all such things, as may be required or
desirable in furtherance of Partnership purposes or necessary or appropriate
to the conduct of Partnership activities including, but not limited to,
contracts with third parties for:
(i) brokerage services on behalf of the Partnership (which brokerage
services may be performed by the General Partner or an Affiliate of the
General Partner), specifically, Futures Investment Company, or any successor
to its business, an Affiliated introducing broker of the General Partner may
clear the trades and pay trailing commissions to its associated persons,
including Affiliates of the General Partner and the General Partner, in
consideration of the payment of eleven percent (11%) of the total equity
placed with the Commodity Trading Advisor or advisors it selects, will cause
and pay for the trades to be cleared through one or more futures commission
merchants selected by the General Partner;
(ii) trading advisory services relating to the purchase and sale of all
stocks, options, commodity futures contracts, commodity options and contracts
for forward delivery of foreign currencies on behalf of the Partnership
(which advisory services may be performed by the General Partner or an
Affiliate of the General Partner); and
(iii) rent, salaries, computer, accounting, legal and other services
attendant to the maintenance of the Fund.
(b) open and maintain bank accounts on behalf of the Partnership with banks
and money market funds.
(c) deposit, withdraw, pay, retain and distribute the Partnership's funds in
any manner consistent with the provisions of this Agreement.
(d) supervise the preparation and filing of all documentation required by
law including, but not limited to, Registration Statements to be filed with
Federal and state agencies.
(e) pay or authorize the payment of distributions to the Partners and pay
Expenses of the Partnership.
(f) invest or direct the investment of funds of the Partnership not
involving the purchases or sale of stocks, futures contracts, options, and
contracts for forward delivery of foreign currencies.
(g) purchase, at the expense of the Partnership, liability and other
insurance to protect the Partnership's proprieties and business.
(h) borrow money from banks and other lenders for Partnership purposes, and
may pledge any or all of the Partnership's assets for such loans. No bank or
other lender to which application is made for a loan by the lender to which
application is made for a loan by the General Partner shall be required to
inquire as to the purposes for which such loan is sought and, as between the
Partnership and such bank or other lender, it shall be conclusively presumed
that the proceeds of such loan are to be and will be used for the purposes
authorized under this Agreement.
(i) confess judgment for and against the Partnership and control any matters
affecting the rights and obligations of the Partnership, including the
employment of attorneys, in the conduct of litigation and otherwise incur
legal expenses and costs of consultation, settlement of claims, and
litigation against or on behalf of the Partnership.
4.2 LOANS BY GENERAL PARTNER. The General Partner or its Affiliates will be
not be required to advance or loan funds to the Partnership. In the event
the General Partner makes any advance or loan to the Partnership, the General
Partner will not receive interest in excess of its interest costs, nor will
the General Partner receive interest in excess of the amounts which would be
charged the Partnership (without reference to the General Partner's financial
abilities or guarantees) by unrelated banks on comparable loans for the same
purpose and the General Partner shall not receive points or other financing
charges or fees regardless of the amount.
4.3 TRANSACTION WITH PARTNERSHIP. Notwithstanding anything to the contrary
which may be contained herein, the General Partner shall not:
(a) sell, or otherwise dispose of, any of the Partnership's assets to the
General Partner or its Affiliates.
(b) subject to the provisions regarding and without diminishment of the
right of the General Partner or any Affiliate to compensation for services
provided to the Partnership as set forth in this Agreement, cause or permit
the Partnership to enter any agreement with the General Partner or an
Affiliate which is not in the best interest of and for the benefit of the
Partnership or which would be in contravention of the General Partner's
fiduciary obligations to the Partnership or pursuant to which the General
Partner or any Affiliate;
(i) would provide or sell any services, equipment, or supplies at other than
rates charged to others; or
(ii) would receive from the Partnership, Units of Partnership interest in
consideration for services rendered.
4.4 OBLIGATIONS OF GENERAL PARTNER. In addition to the obligations provided
by law or this Agreement, the General Partner shall:
(a) Devote such of its time to the business and affairs of the Partnership
as it shall, in its discretion exercised in good faith, determine to be
necessary to conduct the business and affairs of the Partnership for the
benefit of the Partnership and the Limited Partners.
(b) Execute, file, record and/or publish all certificates, statements and
other documents and do any and all other things as may be appropriate for the
formation , qualification and operation of the Partnership and for the
conduct of its business in all appropriate jurisdictions including, but not
limited to, the compliance, at its expense, with all laws related to its
qualification to serve as the commodity pool operator of the Fund.
(c) Retain independent public accountants to audit the accounts of the
Partnership.
(d) Employ attorneys to represent the Partnership.
(e) Use its best efforts to maintain the status of the Partnership as a
partnership for United States Federal income tax purposes.
(f) Employ only independent CTAs which are registered pursuant to the
Commodity Exchange Act to conduct trading and to otherwise establish and
monitor the trading policies of the Partnership; and the activities of the
partnership's trading advisor(s) in carrying out those policies.
(g) Review, not less often than annually, the brokerage commission rates
charged to comparable funds to determine that the commission rates paid by
the Partnership are comparable with such other rates.
(h) Have fiduciary responsibility for the safekeeping and use of all funds
and assets of the Partnership, whether or not in the General Partner's
immediate possession or control, and the General Partner will not employ or
permit others to employ such funds or assets in any manner except for the
benefit of the Partnership. Additionally, no contract shall permit the
General Partner to contract away its fiduciary obligation under common law.
(i) Agree that if it becomes the sole General Partner of the Partnership, it
will use its best efforts to maintain the Partnership as a limited
partnership as required by all applicable laws including, but not limited to
the requirement of the United States Department of the Treasury, Internal
Revenue Service, for a sole corporate general partner of a limited
partnership to maintain its "Net Worth" (as defined below) to establish the
sufficient assets test for a sole corporate general partner to be liable for
the debts of the Partnership. Ms. Pacult intends to resign as a general
partner once Belmont has sufficient net assets to meet the NASAA Guidelines
to continue to offer Units in the Partnership. Although there can be no
assurance that Belmont, as the sole corporate General Partner, will satisfy
the IRS "safe harbor" test to permit the Partnership to continue to be taxed
as a partnership, before Ms. Pacult resigns, Belmont will secure an opinion
of counsel to the effect that sufficient other IRS elements exist to permit
the Partnership to continue to be taxed as a partnership and not as a
corporation. Belmont, as the sole corporate general partner may reach the
safe harbor for one of those tests with a Net Worth of an amount equal to no
less than (i) the lesser of $250,000 or 15% of the aggregate capital
contributions of any limited partnerships (including the Partnership, if
applicable,) for which it shall act as general partner and which are
capitalized at less than $2,500,000, and (ii) 10% of the aggregate capital
contributions of any limited partnerships (including the Partnership, if
applicable) for which it shall act as general partner and which are
capitalized at greater than or equal to $2,500,000 by use of promissory notes
(valued at their fair market value) issued to the General Partner by one or
more of its principals. For the purposes of this subparagraph, "Net Worth"
shall be calculated in accordance with generally accepted accounting
principles, consistently applied, provided that all current assets shall be
based on the lower of cost or the then current market value. The Units owned
by either general partner in the Partnership and in other partnerships in
which they act as a general partner shall not be included in calculating
their Net Worth. A letter of credit may be included. The requirements of
this subparagraph (i) may be modified if the General Partner obtains an
opinion of counsel for the Partnership to effect that a proposed modification
will not (1) adversely affect the classification of the Partnership as a
partnership for Federal income tax purposes; (2) will not adversely affect
the status of the Limited Partners as limited partners under the Act; (3)
will not violate any applicable state securities or Blue Sky law or any
rules, regulations, guidelines or statements of policy promulgated or applied
thereunder including, but not limited to, the net worth required by Section
II.B of the Guidelines for Registration of Commodity Pool Programs, as
adopted in revised form by the North American Securities Administrators
Association, Inc. as are in effect on the date of such proposed modification.
(4) or otherwise adversely affect the Limited Partners.
(j) Maintain a current list of the name, address, and number of Units owned
by each Limited Partner at the General Partner's principal office. Such list
shall be disclosed to any Partner or their representative at reasonable
times, upon request, either in person or by mail, upon payment, in advance,
of the reasonable cost of reproduction and mailing. The Partners and their
representatives shall be permitted access to all other records of the
Partnership, after adequate notice, at any reasonable time, at the offices of
the Partnership. The General Partner shall maintain and preserve such
records for a period of not less than six (6)years.
4.5 GENERAL PROHIBITIONS. The Partnership shall not:
(a) borrow from or loan to any person, except that the foregoing is not
intended to prohibit the incurring of any indebtedness to a Partner or an
Affiliate with respect to the offering of Units for sale, Registration, or
initiation and maintenance of the Partnership's trading positions.
(b) commingle its assets with those of any other person, except to the
extent permitted under the Securities and Exchange Act or the Commodity
Exchange Act and the regulations promulgated under each.
(c) permit rebates or give-ups to be received by the General Partner or any
Affiliate of the General Partner, or permit the General Partner or any
Affiliate of the General Partner to engage in reciprocal business
arrangements which would circumvent the foregoing prohibition; provided,
however, that an Affiliate or the General Partner may provide goods or
services, including brokerage, at a competitive cost to the Partnership.
(d) engage in the pyramiding of its positions (i.e., the use of unrealized
profits on existing positions to provide margins for additional positions in
the same or a related stock or commodity); provided, however, that there may
be taken into account the Partnership's open trade equity on existing
positions in determining whether to acquire additional unrelated stock or
commodity positions.
(e) margins of all open positions in all stocks and commodities combined
would exceed 250% of the partnership's Net Asset Value at the time such
position would otherwise be initiated.
(f) permit churning of the Partnership's trading account for the purpose of
generating brokerage commissions to any person.
(g) directly or indirectly pay or award any finder's fees, commissions or
other compensation to any persons engaged by a potential limited partner for
independent investment advice as an inducement to such advisor to advise the
potential limited partner to purchase Units in the Partnership without the
knowledge of such potential limited partner.
(h) No Partnership funds will be held outside the United States. The
Partnership funds committed to trading will be on deposit with and under the
control of one or more futures commission merchants regulated pursuant to the
Commodity Exchange Act, as may be amended, from time to time. The funds not
committed to trading will be in investments which are properly registered
under the United States securities or other financial institution
regulations.
4.6 FEES AND EXPENSES.
(a) The Partnership shall pay all Organization Costs and offering Expenses
incurred in the creation of the Partnership and sale of Units. The foregoing
expenses may be paid directly by the Partnership or may be reimbursed by the
Partnership to the General Partner or an Affiliate of the General Partner.
Notwithstanding the foregoing, in no event will reimbursement by the
Partnership to the General Partner for Organization Costs and offering
Expenses charged to the Partnership exceed an amount equal to 15% of the
gross proceeds from the sale of Units. Organization Costs and Offering
Expenses shall mean those Expenses incurred in connection with the formation,
qualification and Registration of the Partnership and in distributing and
processing the Units under applicable Federal and state law, sales
commissions, if any, and any other expenses such as: (i) registration fees,
filing fees and taxes; (ii) the costs of qualifying, printing, amending,
supplementing, mailing and distributing the Registration Statement and
Prospectus; (iii) the costs of qualifying, printing, amending, supplementing,
mailing and distributing sales materials used in connection with the issuance
of the Units; (iv) salaries of officers and employees of the General Partner
and any Affiliate of the General Partner while directly engaged in
distributing and processing the Units and establishing records therefor; (v)
rent, travel, remuneration of personnel, telegraph, telephone and other
expenses in connection with the offering of the Units; (vi) accounting,
auditing, and legal fees incurred in connection therewith; and (vii) any
extraordinary expenses related thereto. Organization Costs and Offering
Expenses do not include salaries, rent, travel, expenses and other items of
General Partner overhead.
(b) All operating expenses of the Partnership shall be billed directly to
and paid by the Partnership.
(c) The General Partner or any Affiliate of the General Partner may be
reimbursed for the actual costs of any Expense including, but not limited to,
legal, accounting and auditing services used for or by the Partnership, as
well as printing and filing fees and extraordinary expenses incurred for or
by the Partnership; provided, however, the limitations of contained in
Article X - Exoneration and Indemnification contained in this Agreement will
apply to restrict the purchase of certain insurance coverage and the
assumption of the defense of certain claims.
(d) The General Partner may establish compensation to be paid to it or any
of its Affiliates, from time to time; provided, however, such charges shall
be no more than:
(i) A sales commission of up to six percent (6%) to be established, from
time to time, by the General Partner, for sales of Units;
(ii) A management fee of one half of one percent (1/2 of 1%) per month (6%
per year) of the Net Asset Value of the Partnership, computed and paid to the
General Partner and/or non-affiliated independent investment or trading
advisor on the close of business on the last day of each month;
(iii) An incentive fee, paid quarterly, of up to fifteen percent (15%) of
the first one hundred percent (100%) of New Net Profit, or less earned upon
Capital, and prorated to consider the date of deposit of such Capital to the
Partnership each year. The incentive fee may be increased up to 30%,
provided that the management fee is correspondingly reduced to 0%. Each
trading subaccount established by the General Partner shall be considered
separately for purposes of incentive fee. The incentive fee will be non-
refundable; i.e., in the event that the Partnership earns substantial New Net
Profit during the first month of any year and, thereafter, suffers losses,
the General Partner will not refund any of the profit incentive fee paid for
the prior month or months. However, the Partnership will not pay or accrue
to the General Partner any further incentive fee during that year until such
time as the New Net Profit, when added to Net Asset Value, after additions,
deductions of Redemptions and distributions, exceeds the highest Net Asset
Value, computed for that year; i.e., incentive fees will only be earned and
paid or accrued upon New Net Profit for that year; and
(iv) A share of the brokerage commissions paid for trades made by the
Partnership. Such commissions shall not be more than the average published
fixed rate per month or per round-turn charged, from time to time, to public
commodity pools by national brokerage firms for similar trading size,
frequency, and style.
(e) The General Partner is hereby authorized to employ brokers, attorneys,
accountants, consultants, and administrative personnel, who may be Affiliated
with the General partner, to perform Partnership business at the expense of
the Partnership. Belmont has advanced the initial offering and
organizational expenses, estimated to be $47,000 and $5,000, respectively.
The offering expenses will be reimbursed by the Partnership immediately upon
the Initial Closing and the organizational expenses will be repaid monthly
over the first sixty months of operation by the Partnership at the rate of
$1000 per year, until paid in full. After the first year, the Partnership
will be subject to yearly accounting and legal fees of $18,000 and $5,000,
respectively.
(f) The General Partner is hereby authorized, individually or through an
Affiliate, to employ non-affiliated independent investment and trading
advisors to trade the assets of all or a portion of the Fund to be paid (i)
an annual management fee not to exceed six percent (6%) of the assigned
trading equity when combined with the General Partner's management fee as
described in 1.2(g); and, (ii) an incentive fee of up to fifteen percent
(15%) on New Net Profit earned by such advisor, which may be increased or
decreased as described in 1.2(h). All incentive fees may be prorated and paid
quarterly.
4.7 ACTIVITIES OF PARTNERS.
(a) The General Partner and its Affiliates shall devote to the Partnership
only such time as shall be reasonably required to fulfill their
responsibilities hereunder.
(b) Any Partner may, notwithstanding the existence of this Agreement, engage
in whatever other activities they may choose, whether the same be competitive
with the Partnership or otherwise, without having or incurring any obligation
or conflict of interest in such activities with the Partnership or to any
party hereto. The Partners are specifically authorized to deal with other
partnerships and to acquire interests in positions and trading without having
to offer participation therein to the Partnership or the other Partners.
Neither this Agreement nor any activities undertaken pursuant hereto shall
prevent any Partner, including the General Partner and its Affiliates and
their officers, directors and employees, from engaging in the trading
contemplated by this Partnership individually, jointly with others, or as a
part of any other association to which any of them are or may become parties,
in the same trades as the Partnership, or require any of them to permit the
Partnership, the General Partner or any other Partner to participate in any
of the foregoing. As a material part of the consideration for each party's
execution hereof, each Partner hereby waives, relinquishes and renounces any
such right or claim of conflict of interest and participation from any other
Partner.
(c) Belmont is a corporation which was formed on January 12, 1999, and it
does not have any prior experience in the management of a partnership which
trades commodity futures or options, or any other securities; however, Ms.
Pacult, has been engaged in supervision of individual managed commodity
accounts for over 18 years and serves as the principal of a corporate general
partner for three other funds and as an individual general partner for one of
those funds. The past and future results of trading by Ms. Pacult or any
future principal of Belmont, will be confidential and not disclosed to the
other Partners. Such positions taken may be the same as or different from
any positions taken by the Partnership or any advisor to the Fund. Nothing
in this Section, or elsewhere in the Partnership Agreement, shall permit the
General Partner to violate its fiduciary or legal obligations to the
Partnership.
4.8 CONFLICTS OF INTEREST. Significant actual and potential conflicts of
interest exist in the structure and operation of the Partnership. The
General Partner has used its best efforts to identify and describe all
potential conflicts of interest which may be present under this heading and
elsewhere in the Partnership's Prospectus and the Exhibits attached thereto.
Prospective investors should consider that the General Partner intends to
assert that Partners have, by subscribing to the Partnership, consented to
the existence of such potential conflicts of interest as are described in
this Agreement and the Prospectus and its Exhibits, in the event of any claim
or other proceeding against the General Partner, any principal of the General
Partner, the CTAs, any principals of the CTAs, the Partnership's FCM, or any
principals of the FCM, the Partnership's IB or any principal or any
Affiliate of any of them alleging that such conflicts violated any duty owed
by any of them to said subscriber. Specifically, the Selling Agent is
Affiliated with Ms. Pacult and, therefore, no independent due diligence of
the Partnership or the General Partner will be made by a National Association
of Securities Dealers, Inc. member.
4.9 LIMITATION OF POWERS. Without concurrence of a Majority in Interest,
the General Partner may not:
(a) Amend this Agreement except for those amendments which do not adversely
affect the rights of the Limited Partners.
(b) Voluntarily withdraw as a General Partner.
(c) Appoint a new General Partner or additional general partners; provided,
however, additional general partners may be appointed without obtaining the
consent of a Majority in Interest if the addition of such person is necessary
to preserve the tax status of the Partnership as a partnership and not as a
corporation; and such additional general partner has no authority to manage
or control the Partnership and the admission of such additional general
partner does not materially adversely affect the Limited Partners.
(d) Sell all or substantially all of the Partnership assets other than in
the ordinary course of business.
(e) Cause the merger or other reorganization of the Partnership.
(f) Dissolve the Partnership other than because of an event, which by law,
requires such dissolution.
ARTICLE V
Rights and Obligations of Limited Partners
5.1 LIMITATION OF LIABILITY. No Limited Partner shall be personally liable
for any of the debts of the Partnership or any of the losses thereof.
However, the amount committed by him to the Capital of the Partnership and
his interest in Partnership assets shall be subject to liability for
Partnership debts and obligations. Limited Partners may be liable to repay
any wrongful distribution of profits to them and may be liable for
distributions (with interest thereon) considered to be a return of Capital if
necessary to satisfy creditors of the Partnership.
5.2 NO MANAGEMENT RIGHTS. No Limited Partner shall take part in the
management of the business of the Partnership or transact any business for
the Partnership. No Limited Partner, as such, shall have the power to sign
for or to bind the Partnership.
5.3 CERTAIN RIGHTS. Provided the following, does not either (i) subject the
Limited Partners to unlimited liability or (ii) subject the Partnership to be
taxable as a Corporation for purposes of Federal Income tax laws, the
Partners, by a vote of a Majority in Interest, without the necessity for
concurrence by the General Partner, shall have the following rights in
addition to those granted elsewhere in this Agreement:
(a) Amend the Partnership Agreement; provided, however, any amendment which
modifies the compensation or distributions to the General Partner or which
affects the duties of the General Partner requires the consent of the General
Partner.
(b) The General Partner may be removed and a new General Partner elected in
accordance with the terms of this Agreement.
(c) Cancel any contract for services with the General Partner, without
penalty, upon 60 days written notice; provided, however, the maximum period
of any contract between the General Partner and the Partnership is one year;
and, provided further, should any amendment to this Partnership Agreement
attempt to modify the compensation or distributions to which the General
Partner is entitled or which affects the duties of the General Partner, such
amendment will become effective only upon the consent of the General Partner.
(d) The right to approve, prior to sale, the sale or distribution, outside
the ordinary course of business, of all or substantially all of the assets of
the Partnership.
(e) Dissolve the Partnership.
(f) Any material changes in the Partnership's basic investment policies
identified in Article III including, but not limited to, the speculation and
trade in commodity futures, forward futures contracts, and options upon those
contracts both within and without the United States or the structure of the
Partnership as a limited partnership requires prior written notification of a
meetings which identifies the purpose of the meeting and the approval by a
vote of the Majority in Interest of the Partners.
5.4 GENERAL PARTNER ACTION WITHOUT LIMITED PARTNER APPROVAL.
Notwithstanding anything in this Agreement, particularly section 5.3, to the
contrary, the General Partner may amend this Agreement without any vote,
consent, approval, authorization or other action of any other Partner and
without notice to any other Partner to:
(a) add to the representations, duties or obligations of the General Partner
or its Affiliates or surrender any right or power granted to the General
Partner or its Affiliates in this Agreement for the benefit of the Limited
Partners;
(b) cure any ambiguity, correct or supplement any provision in this
Agreement which may be inconsistent with any other provision in this
Agreement, or make any other provisions with respect to matters or questions
arising under this Agreement which will not be inconsistent with the intent
of this Agreement;
(c) delete or add any provision of this Agreement required to be so deleted
or added by the staff of the Securities and Exchange Commission, or by a
state securities law administrator or similar such official, which addition
or deletion is deemed by such official to be for the benefit or protection of
the Limited Partner or does not have a material adverse effect on the Limited
Partners generally or the Partnership;
(d) reflect the withdrawal, expulsion, addition or substitution of Partners;
(e) reflect the proposal, promulgation or amendment of Regulations under
Code section 704, or otherwise, to preserve the uniformity of interest in the
Partnership issued or sold from time to time, if, in the opinion of the
General Partner, the amendment does not have a material adverse effect on the
Limited Partners generally;
(f) elect for the Partnership to be bound by any successor statute to the
Act, if, in the opinion of the General Partner, the amendment does not have a
material adverse effect on the Limited Partners generally;
(g) conform this Agreement to changes in the Act or interpretations thereof
which, in the exclusive desecration of the General Partner, it believe
appropriate, necessary or desirable, if, in the General Partner's reasonable
opinion, such amendment does not have a materially adverse effect on the
Limited Partners generally or the Partnership;
(h) change the name of the Partnership;
(i) conform the provisions of this Agreement to any applicable requirements
of Federal of state law which, in the exclusive discretion of the General
Partner, it believes appropriate, necessary or desirable, if, in the General
Partner's reasonable opinion, such amendment does not have a material adverse
effect on the Limited Partners generally or the Partnership; and
(j) make any change which, in the exclusive discretion of the General
Partner, is advisable to qualify or to continue the qualification of the
Partnership as a limited partnership or a partnership in which the Limited
Partners have limited liability under the laws of any state or that is
necessary or advisable, in the exclusive discretion of the General Partner,
so that the Partnership will not be treated as an association taxable as a
corporation for Federal income tax purposes.
5.5 EXPULSION OF LIMITED PARTNERS. Anything herein to the contrary
notwithstanding,
(a) no Partner, including any corporation, partnership, trust or other
entity may, at any time, have an ownership percentage of ten percent or more
of the aggregate ownership percentages of the Limited Partners. If, at any
time, the General Partner determines that any Limited Partner has an
ownership percentage of ten percent or more, the Partnership may, in the
General Partner's exclusive discretion, cause a Redemption by that Limited
Partner of the number of Units necessary or advisable to reduce that Limited
Partner's ownership percentage to less than ten percent. The Redemption
shall be effective as of the next Redemption date or such other Redemption
date, at the discretion of the General Partner.
(b) the General Partner has the right, in its sole discretion, to raise or
lower the minimum investment in the Partnership required for the admission or
retention of Units in the Partnership by a Partner. In the event the General
Partner does raise the minimum investment in the Partnership to an amount in
excess of any Partners Capital account, the Partnership shall provide notice
to the Partner of such event and allow the Partner 30 days to raise the
Capital account for that Partner to such raised amount, or more. In the
event the Partner does not so raise his Capital account to such minimum
amount, the Partner shall be deemed to have elected to withdraw from the
Partnership and all of his Units shall be redeemed at the next redemption
date as provided in this Agreement.
5.6 NOTIFICATION. Notice shall be sent to each Partner within seven
business days from the date of:
(a) any decline in the Net Unit Value to less than 50% of the Net Asset
Value on the last Valuation Date;
(b) any material change in contracts with the FCM or CTAs including, but
not limited to, any change in CTAs or any modification in connection with the
method of calculating the incentive fee;
(c) any other material change affecting the compensation of the General
Partner, FCM, CTAs or any Affiliated party;
5.7 NOTIFICATION CONTENTS.
(a) a material change related to brokerage commissions shall not be made
until notice is given and the Partners, after such notice, have the
opportunity to Redeem pursuant to Article IX;
(b) in addition, in regard to all other changes, the required notification
shall describe the change in detail, include a description of the Partners'
Redemption rights pursuant to Article IX and voting rights pursuant to this
Article V and a description of any material effect such changes may have on
the interests of the Partners.
5.8 EXERCISE OF RIGHTS. Upon receipt of a written request, executed by the
holders of Units aggregating ten percent (10%) or more of the Units, for a
vote upon and to take action with respect to any rights of the Partners under
this Agreement, together with a check for the costs to distribute the request
to all of the Partners, the General Partner shall call a meeting of all
Partners of the Partnership in the time and manner as provided in Section 8.7
hereof.
5.9 EXAMINATION OF BOOKS AND RECORDS. A Limited Partner shall have the
right to examine the books and records of the Partnership at all reasonable
times, including the right to have such examination conducted at his sole
expense by any reasonable number of representatives. Notwithstanding the
foregoing, the General Partner may keep and withhold the names of the other
Partners, specific trading and other designed information confidential from
the Partners.
ARTICLE VI
Assignment of Limited Partnership Units;
Admission of Limited Partners
6.1 RESTRICTION ON ASSIGNMENT. A Partner may not assign or transfer some or
all of his Units in the Partnership without the written consent of the
General Partner; provided, however, that in no event may an assignment be
made or permitted until after two years from the date of purchase of such
assigned or transferred Units(s) by said Partner; and, provided, further,
that full Units must be assigned and the assignor, if he is not assigning all
of his Units, will retain more than five Units. Any such assignment shall be
subject to all applicable securities, commodity, and tax laws and the
regulations promulgated under each such law. The General Partner shall
review any proposed assignment and shall withhold its consent in the event it
determines, in its sole discretion, that such assignment could have an
adverse effect on the business activities or the legal or tax status of the
Partnership.
6.2 QUALIFIED PLAN RESTRICTIONS. In no event shall a Partner be entitled to
transfer all or part of a Partnership interest if, under applicable United
States Department of Labor regulations, such transfer would result in
Partnership interests, excluding the interests of the General Partner, valued
at or in excess of twenty-five percent of the value of all outstanding
Partnership interests, excluding the interests of the General Partner, being
held by the following persons or entities:
(a) employee benefit plans (as defined in section 3(3) of the Federal
Employee Treatment Income Security Act of 1974, as amended ("ERISA"), whether
or not such plans are subject to the provisions of Title I of ERISA,
(b) plans described in section 4975 (e)(1) of the Code, and
(c) entities (such as a common or collective trust funds of a bank) whose
underlying assets include plan assets by reason of a plan's investment in the
entity.
6.3 DOCUMENTATION OF ASSIGNMENT. The General Partner shall furnish to the
assigning Limited partner a proper form to duly effect such assignment. The
General Partner shall not be required to recognize any assignment and shall
not be liable to the assignee for any distributions made to the assigning
Limited Partner until the General Partner has received such form of
assignment, properly executed with signature guaranteed, together with the
Certificate of Ownership originally issued to the Limited Partner (or an
indemnity bond in lieu therefor) and such evidence of authority as the
General Partner may reasonably request and the General Partner shall have
accepted such assignment.
ARTICLE VII
Accounting Records, Reports and Distributions
7.1 DISTRIBUTIONS. Each Partner will have a Capital account, and its
initial balance will be the amount the Partner paid for the Partner's Units.
The Net Assets of the Partnership will be determined monthly, and any
increase or decrease from the end of the preceding month will be added to or
subtracted from the accounts of the Partners in the ratio that each account
bears to all accounts. Distributions from profits or Capital will be made
solely at the discretion of the General Partner.
7.2 BOOKS OF ACCOUNT. Proper books of account shall be kept and there shall
be entered therein all transactions, matters and things relating to the
Partnership's business as required by applicable law and the regulations
promulgated thereunder and as are usually entered into books of account kept
by persons engaged in business of like character. The books of account shall
be kept at the principal office of the General Partner and each Limited
Partner (or any duly constituted agent of a Limited Partner) shall have, at
all times during reasonable business hours, free access, subject to rules of
confidentiality established by the General Partner, the right to inspect and
copy the same. Such books of account shall be kept on an accrual basis. A
Capital account shall be established and maintained from each Partner, as set
forth above.
(a) Each Partner shall be furnished as of the end of each Fiscal Year with
(1) annual financial statements, audited by a certified public accountant,
within 90 days from the end of such year; together with such other reports
(in such detail) as are required to be given to Partners by applicable law,
specifically, annual and periodic reports will be supplied by the General
Partner to the other Partners in conformance with the provisions of CFTC
regulations for Reporting to Pool Participants, 17 C.F.R. Section 4.22, as
amended, from time to time, and, (2) any other reports or information which
the General Partner, in its sole discretion, determines to be necessary or
appropriate.
(b) Appropriate tax information (adequate to enable each Partner to complete
and file his Federal tax return) shall be delivered to such Partner no later
than January 31 following the end of each Calendar Year.
7.3 CALCULATION OF NET ASSET VALUE. Net Asset Value shall be calculated
daily and reports delivered to Partners as of the last day of each month by
the 20th of the following month. Upon request, the General Partner shall
make available to any Partner the Net Unit Value.
7.4 MAINTENANCE OF RECORDS. The General Partner shall maintain all records
as required by law including, but not limited to, (1) all books of account
required by paragraph 7.1 of this Article VII; and, (2) a record of the
information obtained to indicate that a Partner meets the applicable investor
suitability standards.
7.5 TAX RETURNS. The General Partner shall cause tax returns for the
Partnership to be prepared and timely filed with the appropriate authorities.
The General Partner shall cause the Partnership to pay any taxes payable by
the Partnership; provided, however, that the General Partner shall not be
required to cause the Partnership to pay any tax so long as the General
Partner or the Partnership shall be in good faith and by appropriate means
contesting the applicability, validity or amount thereof and such contest
shall not materially endanger any right or interest of the Partnership.
7.6 TAX ELECTIONS. The General Partner shall from time to time, make such
tax elections or allocations deemed necessary or desirable to carry out the
business of the Partnership or the purposes of this Agreement. Belmont shall
be authorized to perform all duties imposed by Sections 6221 through 6232 of
the Internal Revenue Code on the General Partner as "tax matters partner" of
the Partnership, including, but not limited to, the following: (i) the power
to conduct all audits and other administrative proceedings with respect to
Partnership tax items; (ii) the power to extend the statute of limitations
for all Limited Partners with respect to Partnership tax items; (iii) the
power to file a petition with an appropriate federal court for a review of a
final Partnership administrative adjustment; and, (iv) a power of attorney on
behalf of each Limited Partner having less than a 1% interest in the
Partnership to enter a settlement with the Internal Revenue Service on behalf
of, and binding upon, those Limited Partners unless any said Limited Partner
shall have notified the Internal Revenue Service and the General Partner,
within 30 days of service of the notice of claim up said Limited Partner,
that the General Partner may not act on such Limited Partner's behalf.
ARTICLE VIII
Amendments of Partnership Agreement
8.1 RESTRICTION ON AMENDMENTS. No amendment to this Agreement shall be
effective or binding upon the partners unless the same shall have been
approved by a Majority in Interest of the Partners; provided, however, the
General Partner may adopt amendments without such approval which are, in the
sole judgment of the General Partner, deemed necessary or desirable to
maintain the business or limited partnership or other favorable tax status of
the Partnership, or permit a Public Offering of the Units, or to maintain the
Partnership and the General Partner and its principals in compliance with the
laws which govern the business, including the requirements of any self
regulatory organization, or to substitute or add persons as Limited Partners.
8.2 ADMISSION OF ADDITIONAL PARTNERS. At any time, the General Partner may,
in its sole discretion and subject to applicable law, admit additional
Partners. Each newly admitted Partner shall contribute cash equal to the Net
Unit Value of the Partnership for each Unit to be acquired. The terms of any
additional offering may be different from the terms of the initial offering.
All expenses of any such additional offering shall be borne by the either the
Partnership or the subscribers thereto, as determined in the sole discretion
of the General Partner. Pursuant to Article VI, the General Partner may
consent to and admit any assignee of Units as a substituted Partner. There
is no maximum aggregate amount of Units which may be offered and sold by the
Partnership or on the amount of contributions which may be received by the
Partnership.
8.3 TERMINATION OF OFFERINGS; ADDITIONAL OFFERINGS. Notwithstanding
anything stated herein to the contrary, the General Partner may from time to
time, in its sole discretion, limit the number of Units to be offered,
terminate any offering of Units, or register additional Units and/or make
additional public or private offerings of Units. No Limited Partner shall
have any preemptive, preferential or other rights with respect to the
issuance or sale of any additional Units. No Limited Partner shall have the
right to consent to the admission of any additional Limited Partners.
8.4 NOTICE OF RESTRICTED TRANSFER. Each certificate of Limited Partnership,
if any are issued, shall be subject to and contain the following notice:
THE LIMITED PARTNER MUST DETERMINE IF THE PARTNERSHIP INTERESTS REPRESENTED
BY THIS LIMITED PARTNERSHIP AGREEMENT MAY BE TRANSFERRED IN ACCORDANCE WITH
APPLICABLE FEDERAL AND STATE LAWS AND REFERENCE MUST BE MADE TO THE OFFERING
DOCUMENTATION AND LEGAL COUNSEL CHOSEN BY THE INVESTOR TO DETERMINE THE RIGHT
OF THE INVESTOR TO RESELL THE UNITS EVIDENCED HEREBY. THESE LIMITED
PARTNERSHIP INTERESTS SHALL NOT BE TRANSFERABLE BY THE REGISTERED HOLDER
EXCEPT BY CONSENT OF THE GENERAL PARTNER AND AS OTHERWISE PROVIDED IN THE
PARTNERSHIP AGREEMENT AND UPON THE ISSUANCE OF A FAVORABLE OPINION OF COUNSEL
FOR THE LIMITED PARTNERSHIP, AND/OR SUBMISSION TO THE LIMITED PARTNERSHIP OF
SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE LIMITED PARTNERSHIP, THAT
SUCH TRANSFER WILL NOT BE IN VIOLATION OF THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER, AND
APPLICABLE STATE SECURITIES LAWS.
8.5 MEETINGS OF PARTNERS. Upon receipt of a written request, together with
the costs to distribute such request to all Partners, executed by Partners
holding ten percent (10%) or more of the Units, for the calling of a meeting
of the Partners or should the General Partner desire a meeting for any
purpose, the General Partner shall, within fifteen (15) days thereafter,
provide written notice, either in person or by certified mail, after the date
of receipt of said notice. Such written notice shall state the purpose of
the meeting, specify a reasonable time, place, and date, which shall be not
less than thirty (30) or more than sixty (60) days thereafter. An Amendment
shall be adopted and binding upon all parties hereto if a Majority in
Interest of the Partners vote for the adoption of such amendment. Partners
may vote in person or by written proxy delivered to any such meeting.
Meetings of Partners may also be held by conference telephone where all
Partners can hear one another.
8.6 RIGHT OF GENERAL PARTNER TO RESIGN. The individual General Partner, Ms.
Pacult, may resign upon 120 days notice to all other Partners. The corporate
General Partner, Belmont, may resign or assign any portion of its interest in
the Partnership at anytime to a third party and become a Limited Partner with
respect to the balance of its interest in the Partnership, if any, if it
provides one hundred twenty (120) days prior written notice to all other
Partners of its intention to resign and states in such notice the name of the
intended assignee who is to become substitute corporate General Partner and
the information reasonably appropriate to enable the Partners to decide
whether or not to approve the substitution or, in the alternative, provide
that the partners must elect a successor general partner. In the event of
the voluntary withdrawal by the corporate General Partner, the corporate
General Partner shall pay the legal fees, recording fees and all other
expenses incurred as a result of its withdrawal. Upon resignation, the
corporate General Partner shall be paid the items identified in Section 8.7
below.
8.7 AMENDMENT INVOLVING SUCCESSOR CORPORATE GENERAL PARTNER. Should a
resignation or an amendment to the Agreement provide for a change in the
general partner upon the conditions provided in this Agreement, the election
and admission of a person or persons as a successor or successors to the
corporate General Partner, shall require the following conditions: the
General Partner shall retire and withdraw as General Partner and the
Partnership business shall be continued by the successor general partner or
general partners, and such amendment shall expressly provide that on or
before the effective date of removal.
(a) The corporate General Partner shall be permitted to Redeem 100% of its
Units ten (10) days prior to the effective date of its removal in cash equal
to the Net Asset Value of such corporate General Partner's interest in the
Partnership.
(b) The Partnership shall pay to the removed corporate General Partner an
amount equal to the Appraised Value of such General Partner's assets to be
transferred to the successor General Partner to enable the successor to
continue the business of the Partnership. The Appraised Value of the
withdrawing corporate General Partner's interest in the Partnership shall
equal such General Partner's interest in the sum of (1) the Expenses advanced
by the corporate General Partner to the Partnership, (2) all cash items, (3)
all prepaid expenses and accounts receivable less a reasonable discount for
doubtful accounts, and (4) the net book value of all other assets, unless the
withdrawing General Partner of the successor corporate General Partner
believes that the net book value of an asset does not fairly represent its
fair market value in which event such corporate General Partner shall cause,
at the expense of the Partnership, an independent appraisal to be made by a
person selected by the General Partner with approval of a Majority in
Interest of the Partners to determine its value.
(c) The successor General Partner or Partners shall indemnify the former
General Partner for all future activities of the Fund.
ARTICLE IX
Dissolution, Liquidation and Redemption
9.1 DISSOLUTION. The Partnership shall be dissolved, and shall terminate
and wind-up its affairs, upon the first to occur of the following:
(a) the affirmative vote of a Majority in Interest of the Partners adopting
an amendment to this Agreement providing for the dissolution of the
Partnership;
(b) the sale, exchange, forfeiture or other disposition of all or
substantially all the properties of the Partnership out of the ordinary
course of business;
(c) the resignation of the General Partner after one hundred twenty days
notice to the Partners, of the bankruptcy, insolvency or dissolution, or
failure of the General Partner to maintain sufficient Net Worth to qualify
the Partnership as a partnership for Federal Income Tax purposes or as
required by the NASAA Guidelines in effect at the time the Units were sold,
without a successor, promptly after any such event, but in no event beyond
one hundred twenty (120) days after the effective date of such event;
(d) at 11:59 p.m. on the day which is twenty-one (21) years from the date of
this Agreement; or
(e) any event which legally dissolves the Partnership.
9.2 EFFECT OF LIMITED PARTNER STATUS. The death, legal disability,
bankruptcy, insolvency, dissolution, or withdrawal of any Limited Partner
shall not result in the dissolution or termination of the Partnership, and
such Limited Partner, his estate, custodian or personal representative shall
have no right to withdraw or value such Limited Partner's interest in the
Partnership except as provided in Paragraph 9.3. Each Limited Partner (any
assignee thereof) expressly agrees that the provisions of the Act, as
amended, titled "Powers of Legal Representative or Successor of Deceased,
Incompetent, Dissolved or Terminated Partner", shall not apply to his
interest in the Partnership and expressly waives any rights and benefits
thereunder. Each Limited Partner (and any assignee of such Partner's
interest) expressly agrees that in the event of his death, that he waives on
behalf of himself and his estate, and he directs the legal representative of
his estate and any person interested therein to waive the furnishing of any
inventory, accounting or appraisal of the assets and any right to an audit or
examination of the books of the Partnership. The General Partner may assign,
sell, or otherwise dispose of all or any portion of its shares of common
stock without any legal effect upon the operation of the Partnership and no
Limited Partner may object to any such transfer.
9.3 LIQUIDATION. Upon the termination and dissolution of the Partnership,
the General Partner (or in the event the dissolution is caused by the
dissolution or the cessation to exist as a legal entity of the General
Partner, voluntary withdrawal, bankruptcy or insolvency, such person as the
Majority in Interest of the Partners may select) shall act as liquidating
trustee and shall take full charge of the Partnership assets and liabilities.
Thereafter, the business and affairs of the Partnership shall be wound up and
all assets shall be liquidated as promptly as is consistent with obtaining
the fair value thereof, and the proceeds therefrom shall be applied and
distributed in the following order: (i) to the expenses of liquidation and
termination and to creditors, including the General Partner, in order or
priority as provided by law, and (ii) to the Partners pro rata in accordance
with his or its Capital account, less any amount owed by such Partner to the
Partnership.
9.4 RETURN OF CAPITAL CONTRIBUTION SOLELY OUT OF ASSETS. A Partner shall
look solely to the properties and assets of the Partnership for the return of
his Capital Contribution, and if the properties and assets of the Partnership
remaining after the payment or discharge of the debts and liabilities of the
Partnership are insufficient to return his Capital Contribution, he shall
have no recourse against the General Partner or any other Limited Partner for
that purpose.
9.5 REDEMPTION. A Partner (including any approved assignee who becomes a
Limited Partner) may withdraw any part or all of his Capital Contribution and
undistributed profits, if any, by requiring the Partnership to redeem any or
all of his Units at the Net Asset Value thereof (such withdrawal being herein
referred to as "Redemption"). Redemption shall be effective as of the last
day of the period established, from time to time, by the General Partner for
Redemptions. Such Redemptions shall be no less often than quarterly;
provided, however, Redemption may be deferred until after the lapse of six
months from the date of purchase of the Units.
9.6 REDEMPTION PROCEDURES. Redemption shall be after all liabilities,
contingent, accrued, reserved in amounts determined by the General Partner
have been deducted and there remains property of the Partnership sufficient
to pay the Net Unit Value as defined in Paragraph 1.3(b). As used herein,
"request for Redemption: shall mean a letter mailed or delivered by a Partner
and received by the General Partner at least 10 days in advance of the
effective date for which Redemption is requested. Upon Redemption, a Partner
shall receive, on or before the last day of the following month, an amount
equal to the Net Unit Value redeemed as of the date for which the request for
Redemption was received, less accrued expenses and any amount owed by such
Partner to the Partnership. Redemption is subject to a Redemption fee to be
paid by the Partners as provided below; provided, however, no Partner other
than the initial Limited Partner, may redeem any Units until the last day of
the sixth month after the commencement of trading. All Redemption requests
shall be subject to the following:
(a) Under special circumstances including, but not limited to, the inability
to liquidate positions as of such Redemption date or default or delay in
payments due the Partnership from banks, brokers, or other persons, the
Partnership may in turn delay payment to Partners requesting Redemption of
Units of the proportionate part of the Net Unit Value represented by the sums
which are the subject of such delay or default.
(b) The General Partner in its sole discretion may, upon notice to the
Partners, declare additional Redemption dates and may cause the Partnership
to redeem fractions of Units and, prior to registration of Units for public
sale, redeem Units held by Partners who do not hold the required minimum
amount of Units established, from time to time, by the General Partner.
(c) Redemption of Units shall be charged a redemption fee, payable to the
Partnership, to be applied first to pay organization costs and, thereafter,
to the benefit of the other Partners in proportion to their Capital accounts,
equal to four percent (4%) for all Redemptions effective during the first six
(6) months after commencement of trading. Thereafter, there will be a
reduction of one percent (1%) for each six (6) months the investment in the
Units remained invested in the Fund after the initial six months; i.e., 7-12
months a Redemption fee of 3%, 12-18 months 2%, 18-24 months 1%, and,
thereafter, no redemption fee. The initial Limited Partner may withdraw from
the Partnership at the time the Minimum number of Units are sold without
payment of a Redemption fee.
9.7 SPECIAL REDEMPTION. In the event the Net Unit Value falls to less than
fifty percent (50%) of the Net Asset Value established by the greater of the
initial offering price of one thousand dollars ($1,000), less commissions and
other charges, or such higher value earned after payment of the incentive fee
for the addition of profits, the General Partner shall immediately suspend
all trading, provide immediate notice, in accordance with the terms of this
Agreement, to all Partners of the reduction in Net Asset Value, and afford
all Partners the opportunity for fifteen (15) days after the date of such
notice to Redeem their Units in accordance with the provisions of Section 9.5
and 9.6, above. No trading shall commence until after such fifteen day
period.
ARTICLE X
Nature of Partner's Liabilities for Claims
10.1 PROSECUTION OF CLAIMS. The General Partner shall arrange to prosecute,
defend, settle or compromise actions at law or in equity or with any self
regulatory organizations at the expense of the Partnership as such may be
necessary or desirable to enforce, protect, or maintain Partnership
interests.
10.2 SATISFACTION OF CLAIMS. The General Partner shall satisfy any claims
against, errors asserted, or other liability of the Partnership and any
judgment, decree, decision or settlement, first out of any insurance proceeds
available therefor, next, out of Partnership assets and income, and finally
out of the assets and income of the General Partner.
10.3 GENERAL PARTNER DECISION. The decisions made by the General Partner in
regard to the prosecution or settlement of claims, errors, and other
liabilities, will be final and binding without right of appeal or other legal
action by the other Partners or the Partnership.
10.4 EXONERATION, INDEMNIFICATION, AND NO ANTICIPATION OF PAYMENTS. The
General Partner shall not be liable to the Partnership or the Partners for
any failure to comply with its obligations hereunder except for breach of
fiduciary obligation owed to the partnership or negligence on its part in the
management of Partnership affairs or violation of Federal and state
securities laws in connection with the offering of Units for sale. In
addition:
(a) The General Partner will be indemnified for liabilities and expenses
arising from any threatened, pending or completed action or suit in which it
or any affiliate is a party or is threatened to be made a party by reason of
the fact that it is or was the General Partner of the Partnership (other than
an action by the Partnership or a Partner against the General Partner which
is finally resolved in favor of the Partnership or Partner). The Partnership
will indemnify the General Partner and its affiliates against expenses,
including attorney's fees, judgments and amounts paid in settlement of an
action, suit or proceeding if it has acted in good faith and in a manner it
reasonably believed to be in or not opposed to the best interest of the
Partnership, and provided that its conduct did not constitute negligence,
misconduct or a breach of fiduciary obligations in the performance of its
duty to the Partnership or a violation of the securities laws. The
termination of any action, suit or proceeding by judgment, order or
settlement against the Partnership shall not of itself create a presumption
that the General Partner or any affiliate did not act in good faith and not
in the best interest of the Partnership; provided, however, any advance of
funds to the General Partner to pay such costs and expenses must be preceded
by all of the following: (i) a determination by the General Partner that, in
good faith, the course of conduct which caused the loss or liability was in
the best interests of the Partnership; and, (ii) the General Partner was
acting on behalf of or performing services for the Partnership; and, (iii)
such asserted claim or liability or loss to the claimant was not the result
of negligence or misconduct by the General Partner; and, (iv) such
indemnification or agreement to hold harmless is recoverable only out of the
assets of the Partnership and not from the Partners.
In any threatened, pending or completed action or suit by or in the right of
the Partnership, to which the General Partner or an Affiliate was or is a
party or is threatened to be made a party, involving an alleged cause of
action by a Partner for damages arising from the activities of the General
Partner in the performance of the sale of Units or management of the internal
affairs of the partnership as proscribed by this Agreement or by Federal or
the State of Delaware or any other state laws, the Partnership shall
indemnify such General Partner against expenses, including attorneys' fees
and costs, actually and reasonably incurred by such General Partner or
Affiliate in connection with the defense or settlement of such action or suit
if it acted in good faith and in a manner it reasonably believed to be in or
not opposed to the best interests of the Partnership, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which the General Partner shall have been adjudged to be liable for
intentional misconduct, or breach of fiduciary obligations or violation of
securities laws in the performance of its duty to the Partnership unless and
only to the extent that the court or administrative proceeding in which such
action or suit was brought shall determine upon application, that, despite
the adjudication of liability, in view of all circumstances of the case, the
General Partner or Affiliate is reasonably entitled to indemnification for
such expenses as such court shall deem proper; provided, however,
notwithstanding any other provisions of this Agreement, the Partnership shall
advance or pay the General Partner or any of its Affiliates for legal
expenses and other costs incurred as a result of any legal action which
alleges a breach of the Federal or state securities laws only if the
following conditions are satisfied: (i) the legal action relates to acts or
omissions with respect to the performance of duties or services on behalf of
the Partnership; (ii) the legal action is initiated by a third party who is
not a Limited Partner, or the legal action is initiated by a Limited Partner
and an independent arbitration panel, administrative law judge, or court of
competent jurisdiction specifically approves such advancement; and, (iii) the
General Partner or its Affiliates undertake to repay the advanced funds to
the Partnership, together with the applicable legal rate of interest thereon,
in cases which such party is not entitled to indemnification under NASAA
Guideline II.F.
To the extent that a General Partner or an Affiliate has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred
to above or in defense of any claim, issue or other matter related to the
Partnership or any other Partner or person who applied to be a Partner, the
Partnership shall indemnify such General Partner against the expenses,
including attorneys' fees and costs, actually and reasonably incurred by it
in connection therewith.
(a) The indemnification of a General Partner shall be limited to and
recoverable only out of the assets of the Partnership. Notwithstanding the
foregoing, the Partnership's indemnification of the General Partner shall be
limited to the amount of such loss, liability or damage which is not
otherwise compensated for by insurance carried for the benefit of the
Partnership.
(b) Notwithstanding any provision in this Agreement to the contrary, the
Partnership shall not advance the expenses or pay for any insurance to pay
for the costs of the defense or any liability which is prohibited from being
indemnified pursuant to NASAA Guideline II.F. Specifically, no
indemnification which is the result of negligence or misconduct by the
General Partner or for any allegation of a violation of the Federal or state
securities laws by or against the General Partner, any broker/dealer or any
other party unless there has been a successful adjudication on the merits of
each count involving alleged securities law violation as to the General
Partner or broker/dealer or such other party; or a court of competent
jurisdiction approves a settlement of the claims against the General Partner
or any broker/dealer or any other party and finds, specifically, that the
indemnification of the settlement and related costs should be made after the
court of law has been made aware that the Securities and Exchange Commission
opposes such indemnification and the position of any applicable state
securities regulatory authority where the Partnership Interests were offered
or sold without the compliance with specific conditions upon such
indemnification and the action covered satisfies the provisions of Section
10.4 (a) of this Agreement. Any change in the requirements imposed by the
Securities and Exchange Commission and the state securities administrators in
regard to indemnification shall cause a corresponding change in the right of
the General Partner to indemnification.
(b) The indemnification of the General Partner provided in this Article
shall extend to any employee, agent, attorney, certified public accountant,
or Affiliate of the Partnership and the General Partner.
(c) The Partnership shall indemnify, to the extent of the Partnership
assets, each Partner against any claims of liability asserted against a
Partner solely because he is a Partner in the Partnership.
(d) In the event the Partnership or any Partner 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 any Partner's activities unrelated to the
Partnership business or as a result of an unfounded claim against the
Partnership or any other Partner brought as a result of alleged actions by
said Partner, the Partner which was responsible for the allegations which
caused such loss or expense shall indemnify and reimburse the Partnership and
all other Partners for all loss and expense incurred, including attorneys'
fees and costs.
(e) No creditor of a Partner shall have a right to vote Units. Nor may any
Partner or creditor of a Partner anticipate any principal or income from the
Fund prior to the approval of a Redemption Request or the payment of a
distribution from the Fund.
ARTICLE XI
Power of Attorney
11.1 POWER OF ATTORNEY EXECUTED CONCURRENTLY. Concurrent with the written
acceptance and adoption of the provisions of this Agreement, each Partner
shall execute and deliver to the General Partner, a Power of Attorney
(paragraph 5 of the Subscription Agreement). Said Power of Attorney
irrevocably constitutes and appoints the General Partner as a true and lawful
attorney-in-fact and agent for such Partner with full power and authority to
act in his name and on his behalf in the execution, acknowledgment and filing
of documents, which will include, but shall not be limited to, the following:
(a) Any certificates and other instruments, including but not limited to, a
Certificate of Limited partnership and amendments thereto and a certificate
of doing business under an assumed name, which the General Partner deems
appropriate to qualify or continue the Partnership as a limited partnership
in the jurisdictions in which the Partnership may conduct business, so long
as such qualifications and continuations are in accordance with the terms of
this Agreement or any amendment hereto, or which may be required to be filed
by the Partnership or the Partners under the laws of any jurisdiction;
(b) Any other instrument which may be required to be filed by the
Partnership under Federal or any state laws or by any governmental agency or
which the General Partner deems advisable to file; and
(c) Any documents required to effect the continuation of the Partnership,
the admission of the signer of the Power as a Limited Partner or of others as
additional or substituted Partners or Limited Partners, or the dissolution
and termination of the Partnership, provided such continuation, admission,
dissolution or termination is pursuant to the terms of this Agreement.
11.2 EFFECT OF POWER OF ATTORNEY. The Power of Attorney concurrently
granted by each Partner to the General Partner is a special Power of Attorney
coupled with an interest, is irrevocable, and shall survive the death or
legal incapacity of the Partner; and may be exercised by the General Partner
for each Partner by a facsimile signature of one of its officers or by
listing all of the Partners executing any instrument with a single signature
of one of its officers acting as attorney-in-fact for all of them; and shall
survive the delivery of an assignment by a Partner of the whole or any
portion of his interest in the Partnership; except that where the assignee
thereof has been approved by the General Partner for admission to the
Partnership as a substituted partner, the Power of Attorney shall survive the
delivery of such assignment for the sole purpose of enabling the General
Partner to execute, acknowledge and file an instrument necessary to effect
such substitution.
11.3 FURTHER ASSURANCES. Upon request, each Limited Partner agrees to
execute and deliver to the Partnership, within thirty (30) days after receipt
of a written request from the General Partner, a separate form of power of
attorney granting the same powers described above; and such other further
statements of interest, holdings, designations, powers of attorney and other
instruments as the General Partner deems necessary or desirable.
ARTICLE XII
Miscellaneous Provisions
12.1 NOTICES. Notices, requests, reports, payments or other communications
required to be given or made hereunder shall be in writing and shall be
deemed to be delivered when properly addressed and posted by United States
registered or certified mail or delivered by independent courier which
provides an record of receipt, postage or delivery fees prepaid, properly
addressed to the party being given such notice at its last known address.
Addresses shown on the Schedule of Limited Partners records of the
Partnership shall be considered the last known address of each said party
unless the General Partner is otherwise notified in writing.
12.2 NATURE OF INTEREST OF PARTNERS. The interest of each Partner in the
Partnership is personal property. No Partner may anticipate the distribution
or redemption of principal or income from the Partnership and no assignment
to secure the position of a lender to a Partner shall be valid without the
express written consent of the General Partner.
12.3 GOVERNING LAW. This Agreement shall be construed in accordance with
and governed in all respects by the laws of the State of Delaware. All
Partners agree to consent to the jurisdiction and to bring all actions for
claims related to the Partnership and the sale of the Units in the State and
County of the principal office of the Partnership as it is established, from
time to time, by the General Partner. Currently, the principal office of the
Partnership is located in Kent County, Delaware.
12.4 SUCCESSORS IN INTEREST. This Agreement shall be binding on and inure
to the benefit of he parties hereto and, to the extent permitted by this
Agreement, their respective heirs, executors, administrators, personal
representatives, successors and assigns.
12.5 INTEGRATION. This Agreement constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of such parties in connection
herewith. Any amendment or supplement made hereto must be in writing.
12.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts. In such event, each counterpart shall constitute an original
and all such counterparts shall constitute one agreement. The addition of
Limited Partners pursuant to the power of attorney granted to the General
Partner shall not be deemed amendments to alter the rights of the other
Partners under this Agreement.
12.7 SEVERABILITY. Any provision of this Agreement which is invalid,
illegal, or unenforceable in any respect in any jurisdiction shall be, as to
such jurisdiction, ineffective to the extent of such invalidity, illegality
or unenforceability. The remaining provisions hereof in such jurisdiction
shall be and remain effective. Any such invalidity, illegality or
unenforceability in any jurisdiction shall not invalidate or in any way
effect the validity, legality or enforceability of such provision or the
remainder of this Agreement in any other jurisdiction.
12.8 WAIVERS. The failure of any Partner to seek redress for violation of
or to insist upon the strict performance of any covenant or condition of this
agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation.
12.9 HEADINGS. The headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any
provision hereof.
12.10 RIGHTS AND REMEDIES CUMULATIVE. This rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
Partner shall not preclude or waive his right to use addition to any other
rights such Partner may have by law, statute, ordinance or otherwise.
12.11 WAIVER OF RIGHT TO PARTITION. Each of the Partners irrevocably
waives, during the term of the Partnership, any right that it may have to
maintain any action for partition with respect to the property and assets of
the Partnership.
12.12 INTEREST OF CERTAIN SECURED CREDITORS. No creditor who makes
nonrecourse loan to the Partnership shall have or acquire at any time as a
result of making the loan, any direct or indirect interest in the profits,
Capital, or property of the Partnership other than as a secured creditor.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement the day and year first above written.
Corporate General Partner:
BELMONT CAPITAL MANAGEMENT, INCORPORATED
By: /s/ Shira Del Pacult
Shira Del Pacult
President
Individual General Partner:
By: /s/ Shira Del Pacult
Shira Del Pacult
Initial Limited Partner:
By: /s/ Shira Del Pacult
Shira Del Pacult
*******************************************************************************
EXHIBIT G TO BROMWELL FINANCIAL FUND DISCLOSURE DOCUMENT
INVESTMENT ADVISORY CONTRACT
MANGIN CAPITAL MANAGEMENT, INC.
THIS AGREEMENT is made and entered as of this ____ day of
______________, 2000 between Bromwell Financial Fund, Limited Partnership,
(the "Fund") and Mangin Capital Management, Inc., a New Jersey corporation,
(the "CTA").
WITNESSETH:
In consideration of the deposit by the Fund of equity to Vision Limited
Partnership (the "FCM") account number _________ (the "Account") and the
grant of the power of attorney on the standard form of the FCM to the CTA to
permit the CTA to enter trades for the Fund in the Account, the parties hereto
agree as follows:
1. The Fund shall initially deposit in the Account with the FCM, U.S. funds
in the amount of _____________________ dollars ($_______). Subsequent
deposits and accumulation of profits in the Account, less withdrawals and
losses, shall be subject to this Agreement. At its sole discretion, the Fund
may add or withdraw funds at any time from the Account by written request to
the FCM with a copy to the CTA.
2. CTA will cause futures contracts, and when deemed advisable, options on
futures and forward contracts, to be bought and sold on behalf of the Fund in
the Account. CTA will have the sole authority to issue all necessary
instructions to effect trading with the FCM for the Account. All such
transactions shall be for the account and risk of the Fund. During the term
of this agreement, the Fund agrees that they will not place orders in the
Account without prior written consent of the Adviser.
3. The CTA's services are not rendered exclusively for the Fund and CTA
shall be free to render similar services to others. The General Partner may
change the FCM for the account assigned to the CTA at anytime upon written
direction to the FCM and the CTA and CTA agrees to effect the transfer and
sign the forms necessary to complete such change, provided such transfer does
not conflict with any prior agreements the CTA has with the FCM.
4. The IB shall charge the Fund a fixed commission of 11% of the Net
Equity in the account assigned to the CTA payable at the rate of 11/12% per
month. This payment to the IB will be for all round turns, pit brokerage,
exchange, NFA fees and other clearing expenses arising from the trades placed
by the CTA in the account for domestic trades. This does not include delivery
or other exchange for physicals or trades made on foreign exchanges or forward
markets. Those costs will be at rates to be negotiated by the General Partner
with the IB or other party, as the facts determine, and charged to the Fund.
5. CTA will use its best efforts to obtain an equity run from the FCM
before the opening of business the next trading day. Unless authorized in
writing by the General Partner, the CTA will use only the equity in the
Account or Accounts assigned to the CTA by the General Partner for margins to
hold the positions taken by the CTA. No equity in the Account assigned to the
CTA will be commingled or margined, for any purpose, with any other account at
the FCM. The General Partner, upon written instruction to the FCM may
terminate, for any reason, the power of attorney and suspend the trading
authority of the CTA to enter trades with the FCM. In the event of a
termination of the power of attorney, the CTA agrees that the FCM shall accept
no further instructions from the CTA but shall place the Account upon
liquidation only to be handled in written instructions from the General
Partner to the FCM.
6. Fund agrees to execute, from time to time, the Acknowledgment of Receipt
of Disclosure Document from the CTA. By signing, the Fund agrees that it has
received and understands the most recent copy of the CTA's Risk Disclosure
Document.
7. The Fund agrees to execute the Advisers Managed Account Compensation
Agreement authorizing the CTA to be paid its management fee from the Account.
The CTA will be paid an annual management fee of one percent (1%) of the
equity on deposit in the Account payable on the first of each month computed
upon the equity on deposit on the last day of the preceding month. In
addition, the CTA will be paid an incentive fee of twenty percent (20%), of
the New Net Profit earned each quarter, which shall not be deducted from the
Account, but will be paid upon submission of an invoice by the CTA to the
General Partner of the Fund.
8. Fund and CTA agree that they have properly executed all the necessary
account forms for opening the Account with the FCM; provided, however, any
disputes will be submitted to arbitration only upon written agreement of the
parties at the time such dispute arises and the terms of this Agreement will
supersede any terms contained in any other agreement between the parties
hereto and, in the event of any conflicts, the terms of this Agreement shall
control. This Agreement will be governed by the laws of the State of Illinois
and any dispute will be resolved by a court of competent jurisdiction located
in Chicago, Illinois.
9. The CTA will enter no positions for the Partnership which require a
deposit for margin on an exchange outside of the United States or that
requires the margin to be made in any currency other than the United States
Dollar.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement the day and year first above written.
Bromwell Financial Fund, Limited Mangin Capital Management, Inc.
Partnership
By: Belmont Capital Management, Inc.
_____________________________________ ____________________________________
Ms. Shira Del Pacult D. Scott Mangin
President President
*******************************************************************************
Registration No. 333-85755
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
(b) The Selling Agreement between Futures Investment Company and the
Registrant contains an indemnification from the General Partner to the effect
that the disclosures in the Prospectus and this Amendment are in compliance
with Rule 10b5 and otherwise true and complete. This indemnification speaks
from the date of the first offering of the Units through the end of the
applicable statute of limitations. The Partnership has assumed no
responsibility for any indemnification to Futures Investment Company and the
General Partner is prohibited by the Partnership Agreement from receiving
indemnification for breach of any securities laws or for reimbursement for
insurance for coverage for any such claims. See Article X, Section 10.4 (b)
and (e).
(d) There are no indemnification agreements which are not contained in the
Limited Partnership Agreement attached as Exhibit A, the Selling Agreement or
the Clearing Agreement.
Item 16. Exhibits and Financial Statement Schedules.
The following documents (unless indicated) are filed herewith and made a part
of this Registration Statement:
(a) Exhibits.
Exhibit
Number Description of Document
(1) - 01 Selling Agreement dated August 1, 1999 among the Partnership, the
General Partner, and Futures Investment Company, the Selling Agent
(2) None
(3) - 01 Articles of Incorporation of the General Partner
(3) - 02 By-Laws of the General Partner
(3) - 03 Board Resolution of General Partner to authorize formation of
Delaware Limited Partnership
(3) - 04 Agreement of Limited Partnership of the Registrant dated
August 1, 1999 (included as Exhibit A to the Prospectus)
(3) - 05 Certificate of Limited Partnership, Designation of Registered Agent,
Certificate of Initial Capital filed with the Delaware Secretary of
State, and Delaware Secretary of State acknowledgment of filing of
Certificate of Limited Partnership
(4) - 01 Agreement of Limited Partnership of the Registrant dated
August 1, 1999 (included as Exhibit A to the Prospectus)
(5) - 01 Opinion of The Scott Law Firm, P.A. relating to the legality of the
Partnership Units.
(6) Not Applicable
(7) Not Applicable
(8) - 01 Opinion of The Scott Law Firm, P.A. with respect to Federal income
tax consequences.
(9) None
(10) - 01 Form of Advisory Agreement between the Partnership and the Commodity
Trading Advisor (included as Exhibit F to the Prospectus)
(10) - 02 Form of New Account Agreement between the Partnership and the
Futures Commission Merchant
(10) - 03 Form of Subscription Agreement and Power of Attorney
(included as Exhibit D to the Prospectus).
(10) - 04 Escrow Agreement among Escrow Agent, Underwriter, and the
Partnership. (included as Exhibit E to the Prospectus).
(10) - 05 Introducing Broker Clearing Agreement by and between Vision Limited
Partnership as Futures Commission Merchant and Futures Investment
Company as Introducing Broker
(11) Not Applicable - start-up business
(12) Not Applicable
(13) Not Required
(14) None
(15) None
(16) Not Applicable
(17) Not Required
(18) Not Required
(19) Not Required
(20) Not Required
(21) None
(22) Not Required
(23) - 01 Consent of Frank L. Sassetti & Co., Certified Public Accountants
(23) - 02 Consent of James Hepner, Certified Public Accountant
(23) - 03 Consent of The Scott Law Firm, P.A.
(23) - 04 Consent of Ansbacher Investment Management, Inc.
(23) - 05 Consent of Futures Investment Company, as Selling Agent
(23) - 06 Consent of Futures Investment Company, as Introducing Broker
(23) - 07 Consent of Star Financial Bank, Angola, Indiana, Escrow Agent
(23) - 08 Consent of Vision Limited Partnership, Futures Commission Merchant
(23) - 09 Consent of ABN AMRO Incorporated
(23) - 10 Consent of Bell Fundamental Futures, LLC
(23) - 11 Consent of Mangin Capital Management, Inc.
(24) None
(25) None
(26) None
(27) Not Applicable
(28) Not Applicable
(99) - 01 Subordinated Loan Agreement for Equity Capital
(99) - 02 Representative's Agreement between Futures Investment Company and
Shira Del Pacult
(b) Financial Statement Schedules.
No Financial Schedules are required to be filed herewith.
Item 17. Undertakings.
(a) (1) The undersigned registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental: change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each post-
effective amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) The General Partner has provided an indemnification to Futures
Investment Company, the best efforts selling agent. The Partnership (issuer)
has not made any indemnification to Futures Investment Company.
Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the
Registrant including, but not limited to, the General Partner pursuant to the
provisions described in Item 14 above, or otherwise, the Registrant had been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
*******************************************************************************
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, in the City of
Fremont in the State of Indiana on this 23rd day of August, 2000, Ms. Shira
Pacult, the individual general partner of the Registrant, signed this
Registration Statement; and Belmont Capital Management, Inc., the corporate
general partner of the Registrant, has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
BELMONT CAPITAL MANAGEMENT, INC. BROMWELL FINANCIAL FUND, L.P.
BY BELMONT CAPITAL MANAGEMENT, INC.
GENERAL PARTNER
By: /s/ Shira Del Pacult By: /s/ Shira Del Pacult
MS. SHIRA PACULT MS. SHIRA PACULT
PRESIDENT PRESIDENT
BROMWELL FINANCIAL FUND, L.P.
BY MS. SHIRA PACULT
GENERAL PARTNER
By: /s/ Shira Del Pacult By: /s/ Shira Del Pacult
MS. SHIRA PACULT MS. SHIRA PACULT
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following person on behalf of Belmont
Capital Management, Inc., General Partner of the Registrant in the capacities
and on the date indicated.
/s/ Shira Del Pacult
MS. SHIRA PACULT
PRESIDENT
Date: August 23, 2000
(Being the principal executive officer, the principal financial and accounting
officer and the sole director of Belmont Capital Management, Inc., General
Partner of the Partnership)
