Exhibit 10.3 (a)
MANAGEMENT AGREEMENT
AGREEMENT made as of the 12th day of May, 2003 among CITIGROUP MANAGED FUTURES
LLC, a Delaware limited liability company ("CMF" or the "General Partner"),
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ORION FUTURES FUND L.P., a New York limited partnership
(the "Partnership"), and ▇▇▇▇▇▇ CAPITAL MANAGEMENT LIMITED, a United Kingdom
company (the "Advisor").
W I T N E S S E T H :
WHEREAS, CMF is the general partner of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Orion Futures Fund
L.P., a limited partnership organized for the purpose of speculative trading of
commodity interests, including futures contracts, options and forward contracts
with the objective of achieving substantial capital appreciation; and
WHEREAS, the Limited Partnership Agreement establishing the Partnership (the
"Limited Partnership Agreement") permits CMF to delegate to one or more
commodity trading advisors CMF"s authority to make trading decisions for the
Partnership; and
WHEREAS, the Advisor is registered as a commodity trading advisor with the
Commodity Futures Trading Commission ("CFTC") and is a member of the National
Futures Association ("NFA") and is regulated by the Financial Services Authority
in the United Kingdom; and
WHEREAS, CMF is registered as a commodity pool operator with the CFTC and is a
member of the NFA; and
WHEREAS, CMF, the Partnership and the Advisor wish to enter into this Agreement
in order to set forth the terms and conditions upon which the Advisor will
render and implement advisory services in connection with the conduct by the
Partnership of its commodity trading activities during the term of this
Agreement;
NOW, THEREFORE, the parties agree as follows:
1. DUTIES OF THE ADVISOR. (a) For the period and on the terms and conditions
of this Agreement, the Advisor shall have sole authority and
responsibility, as one of the Partnership's agents and attorneys-in-fact,
for directing the investment and reinvestment of the assets and funds of
the Partnership allocated to it by the General Partner in commodity
interests, including commodity futures contracts, options and forward
contracts. All such trading on behalf of the Partnership shall be in
accordance with the trading policies set forth in the Partnership's Private
Placement Offering Memorandum and Disclosure Document dated November 18,
2002, as supplemented (the "Memorandum"), and as such trading policies may
be changed from time to time upon receipt by the Advisor of prior written
notice of such change and pursuant to the trading strategy selected by CMF
to be utilized by the Advisor in managing the Partnership's assets. CMF has
initially selected the Advisor's Diversified Program (the "Program") to
manage the Partnership's assets allocated to it. Any open positions or
other investments at the time of receipt of such notice of a change in
trading policy shall not be deemed to violate the changed policy and shall
be closed or sold in the ordinary course of trading. The Advisor may not
deviate from the trading policies set forth in the Memorandum without the
prior written consent of the Partnership given by CMF. CMF and the
Partnership each acknowledge that the Advisor may utilize exchange for
physicals transactions in its trading for the Partnership. The Advisor
makes no representation or warranty that the trading to be directed by it
for the Partnership will be profitable or will not incur losses.
(b) CMF acknowledges receipt of the Advisor's Disclosure Document dated
November 26, 2002, as filed with the NFA (the "Disclosure Document"). All
trades made by the Advisor for the account of the Partnership shall be made
through such commodity broker or brokers as CMF shall direct, and the
Advisor shall have no authority or responsibility for selecting or
supervising any such broker in connection with the execution, clearance or
confirmation of transactions for the Partnership or for the negotiation of
brokerage rates charged therefor. However, the Advisor, with the prior
written permission (by either original or fax copy) of CMF, may direct all
trades in commodity futures and options to a futures commission merchant or
independent floor broker it chooses for execution with instructions to
give-up the trades to the broker designated by CMF, provided that the
futures commission merchant or independent floor broker and any give-up or
floor brokerage fees are approved in advance by CMF. All give-up or similar
fees relating to the foregoing shall be paid by the Partnership after all
parties have executed the relevant give-up agreements (by either original
or fax copy).
(c) The initial allocation of the Partnership's assets to the Advisor will be
made to the Program. In the event the Advisor wishes to use a trading
system or methodology other than or in addition to the Program in
connection with its trading for the Partnership, either in whole or in
part, it may not do so unless the Advisor gives CMF prior written notice of
its intention to utilize such different trading system or methodology and
CMF consents thereto in writing. In addition, the Advisor will provide five
days' prior written notice to CMF of any change in the trading system or
methodology to be utilized for the Partnership which the Advisor deems
material. If the Advisor deems such change in system or methodology or in
markets traded to be material, the changed system or methodology or markets
traded will not be utilized for the Partnership without the prior written
consent of CMF. In addition, the Advisor will notify CMF of any changes to
the trading system or methodology that would require a change in the
description of the trading strategy or methods described in the Disclosure
Document or the Memorandum, as applicable. Further, the Advisor will
provide the Partnership with a current list of all commodity interests to
be traded for the Partnership's account and will not trade any additional
commodity interests for such account without providing notice thereof to
CMF and receiving CMF's written approval. The Advisor also agrees to
provide CMF, on a monthly basis, with a written report of the assets under
the Advisor's management together with all other matters deemed by the
Advisor to be material changes to its business not previously reported to
CMF. The Advisor further agrees that it will convert foreign currency
balances (not required to margin positions denominated in a foreign
currency) to U.S. dollars no less frequently than monthly. U.S. dollar
equivalents in individual foreign currencies of more than $100,000 will be
converted to U.S. dollars within one business day after such funds are no
longer needed to margin foreign positions.
(d) The Advisor agrees to make all material disclosures to the Partnership
regarding itself and its principals as defined in Part 4 of the CFTC's
regulations ("principals"), shareholders, directors, officers and
employees, their trading performance and general trading methods, its
customer accounts (but not the identities of or identifying information
with respect to its customers) and otherwise as are required in the
reasonable judgment of CMF to be made in any filings required by Federal or
state law or NFA rule or order. Notwithstanding Sections 1(d) and 4(d) of
this Agreement, the Advisor is not required to disclose the actual trading
results of proprietary accounts of the Advisor or its principals unless CMF
reasonably determines that such disclosure is required in order to fulfill
its fiduciary obligations to the Partnership or the reporting, filing or
other obligations imposed on it by Federal or state law or NFA rule or
order. The Partnership and CMF acknowledge that the trading advice to be
provided by the Advisor is a property right belonging to the Advisor and
that they will keep all such advice confidential. Further, CMF agrees to
treat as confidential any results of proprietary accounts and/or
proprietary information with respect to trading systems obtained from the
Advisor.
(e) The Advisor understands and agrees that CMF may designate other trading
advisors for the Partnership and apportion or reapportion to such other
trading advisors the management of an amount of Net Assets (as defined in
Section 3(b) hereof) as it shall determine in its absolute discretion. The
designation of other trading advisors and the apportionment or
reapportionment of Net Assets to any such trading advisors pursuant to this
Section 1 shall neither terminate this Agreement nor modify in any regard
the respective rights and obligations of the parties hereunder.
(f) CMF may, from time to time, in its absolute discretion, select additional
trading advisors and reapportion funds among the trading advisors for the
Partnership as it deems appropriate. CMF shall use its best efforts to make
reapportionments, if any, as of the first day of a month. The Advisor
agrees that it may be called upon at any time promptly to liquidate
positions in CMF's sole discretion so that CMF may reallocate the
Partnership's assets, meet margin calls on the Partnership's account, fund
redemptions, or for any other reason, except that CMF will not require the
liquidation of specific positions by the Advisor. CMF will use its best
efforts to give two days" prior notice to the Advisor of any reallocations
or liquidations.
(g) The Advisor will not be liable for trading losses in the Partnership's
account including losses caused by errors; provided, however, that (i) the
Advisor will be liable to the Partnership with respect to losses incurred
due to errors committed or caused by it or any of its principals or
employees in communicating improper trading instructions or orders to any
broker on behalf of the Partnership and (ii) the Advisor will be liable to
the Partnership with respect to losses incurred due to errors committed or
caused by any executing broker (other than Citigroup Global Markets Inc. or
any of its affiliates) selected by the Advisor (it also being understood
that CMF, with the assistance of the Advisor, will first attempt to recover
such losses from the executing broker).
2. INDEPENDENCE OF THE ADVISOR. For all purposes herein, the Advisor shall be
deemed to be an independent contractor and, unless otherwise expressly
provided or authorized, shall have no authority to act for or represent the
Partnership in any way and shall not be deemed an agent, promoter or
sponsor of the Partnership, CMF, or any other trading advisor. The Advisor
shall not be responsible to the Partnership, the General Partner, any
trading advisor or any limited partners for any acts or omissions of any
other trading advisor to the Partnership.
3. COMPENSATION. (a) In consideration of and as compensation for all of the
services to be rendered by the Advisor to the Partnership under this
Agreement, the Partnership shall pay the Advisor (i) an incentive fee
payable quarterly equal to 20% of New Trading Profits (as such term is
defined below) earned by the Advisor for the Partnership and (ii) a monthly
fee for professional management services equal to 1/12 of 1.5% (1.5% per
year) of the month-end Net Assets of the Partnership allocated to the
Advisor.
(b) "Net Assets" shall have the meaning set forth in Paragraph 7(d)(1) of the
Limited Partnership Agreement dated as of March 31, 1999 and without regard
to further amendments thereto, provided that in determining the Net Assets
of the Partnership on any date, no adjustment shall be made to reflect any
distributions, redemptions or incentive fees payable as of the date of such
determination.
(c) "New Trading Profits" shall mean the excess, if any, of Net Assets managed
by the Advisor at the end of the quarter over Net Assets managed by the
Advisor at the end of the highest previous quarter or Net Assets allocated
to the Advisor at the date trading commences, whichever is higher, and as
further adjusted to eliminate the effect on Net Assets resulting from new
capital contributions, redemptions, reallocations or capital distributions,
if any, made during the fiscal period decreased by interest or other
income, not directly related to trading activity, earned on the
Partnership's assets during the fiscal period, whether the assets are held
separately or in margin accounts. Ongoing expenses will be attributed to
the Advisor based on the Advisor's proportionate share of Net Assets.
Ongoing expenses above will not include expenses of litigation not
involving the activities of the Advisor on behalf of the Partnership.
Ongoing expenses include offering and organizational expenses of the
Partnership. No incentive fee shall be paid to the Advisor until the end of
the first full calendar quarter of the Advisor's trading for the
Partnership, which incentive fee shall be based on New Trading Profits (if
any) from the commencement of trading for the Partnership by the Advisor
through the end of the first full calendar quarter. Interest income earned,
if any, will not be taken into account in computing New Trading Profits
earned by the Advisor. If Net Assets allocated to the Advisor are reduced
due to redemptions, distributions or reallocations (net of additions),
there will be a corresponding proportional reduction in the related loss
carryforward amount that must be recouped before the Advisor is eligible to
receive another incentive fee.
(d) Quarterly incentive fees and monthly management fees shall be paid within
twenty (20) business days following the end of the period, as the case may
be, for which such fee is payable. In the event of the termination of this
Agreement as of any date which shall not be the end of a calendar quarter
or a calendar month, as the case may be, the quarterly incentive fee shall
be computed as if the effective date of termination were the last day of
the then current quarter and the monthly management fee shall be prorated
to the effective date of termination. If, during any month, the Partnership
does not conduct business operations or the Advisor is unable to provide
the services contemplated herein for more than two successive business
days, the monthly management fee shall be prorated by the ratio which the
number of business days during which CMF conducted the Partnership's
business operations or utilized the Advisor's services bears in the month
to the total number of business days in such month.
(e) The provisions of this Paragraph 3 shall survive the termination of this
Agreement.
4. RIGHT TO ENGAGE IN OTHER ACTIVITIES. (a) The services provided by the
Advisor hereunder are not to be deemed exclusive. CMF on its own behalf and
on behalf of the Partnership acknowledges that, subject to the terms of
this Agreement, the Advisor and its officers, directors, employees and
shareholder(s), may render advisory, consulting and management services to
other clients and accounts. The Advisor and its officers, directors,
employees and shareholder(s) shall be free to trade for their own accounts
and to advise other investors and manage other commodity accounts during
the term of this Agreement and to use the same information, computer
programs and trading strategies, programs or formulas which they obtain,
produce or utilize in the performance of services to CMF for the
Partnership. However, the Advisor represents, warrants and agrees that it
believes the rendering of such consulting, advisory and management services
to other accounts and entities will not require any material change in the
Advisor's Program and will not affect the capacity of the Advisor to
continue to render services to CMF for the Partnership of the quality and
nature contemplated by this Agreement.
(b) If, at any time during the term of this Agreement, the Advisor is required
to aggregate the Partnership's commodity positions with the positions of
any other person for purposes of applying CFTC- or exchange-imposed
speculative position limits, the Advisor agrees that it will promptly
notify CMF if the Partnership's positions are included in an aggregate
amount which exceeds the applicable speculative position limit. The Advisor
agrees that, if its trading recommendations are altered because of the
application of any speculative position limits, it will not modify the
trading instructions with respect to the Partnership's account in such
manner as to affect the Partnership substantially disproportionately as
compared with the Advisor's other accounts. The Advisor further represents,
warrants and agrees that under no circumstances will it knowingly or
deliberately use trading strategies or methods for the Partnership that are
inferior to strategies or methods employed for any other client or account
and that it will not knowingly or deliberately favor any client or account
managed by it over any other client or account in any manner, it being
acknowledged, however, that different trading strategies or methods may be
utilized for differing sizes of accounts, accounts with different trading
policies, accounts experiencing differing inflows or outflows of equity,
accounts which commence trading at different times, accounts which have
different portfolios or different fiscal years, accounts utilizing
different executing brokers and accounts with other differences, and that
such differences may cause divergent trading results.
(c) It is acknowledged that the Advisor and/or its officers, employees,
directors and shareholder(s) presently act, and it is agreed that they may
continue to act, as advisor for other accounts managed by them, and may
continue to receive compensation with respect to services for such accounts
in amounts which may be more or less than the amounts received from the
Partnership.
(d) The Advisor agrees that it shall make such information available to CMF
respecting the performance of the Partnership's account as compared to the
performance of other accounts managed by the Advisor or its principals as
shall be reasonably requested by CMF. The Advisor presently believes and
represents that existing speculative position limits will not materially
adversely affect its ability to manage the Partnership's account given the
potential size of the Partnership's account and the Advisor's and its
principals' current accounts and all proposed accounts for which they have
contracted to act as trading manager.
5. TERM. (a) This Agreement shall continue in effect until June 30, 2003. CMF
may, in its sole discretion, renew this Agreement for additional one-year
periods upon notice to the Advisor not less than 30 days prior to the
expiration of the previous period. At any time during the term of this
Agreement, CMF may terminate this Agreement at any month-end upon 30 days'
notice to the Advisor. At any time during the term of this Agreement, CMF
may elect to immediately terminate this Agreement upon 30 days' notice to
the Advisor if (i) the Net Asset Value per Unit shall decline as of the
close of business on any day to $500 or less; (ii) the Net Assets allocated
to the Advisor (adjusted for redemptions, distributions, withdrawals or
reallocations, if any) decline by 50% or more as of the end of a trading
day from such Net Assets' previous highest value; (iii) limited partners
owning more than 50% of the outstanding Units shall vote to require CMF to
terminate this Agreement; (iv) the Advisor fails to comply with the terms
of this Agreement; (v) CMF, in good faith, reasonably determines that the
performance of the Advisor has been such that CMF's fiduciary duties to the
Partnership require CMF to terminate this Agreement; (vi) CMF reasonably
believes that the application of speculative position limits will
substantially affect the performance of the Partnership; or (vii) the
Advisor fails to conform to the trading policies set forth in the
Memorandum as they may be changed from time to time. At any time during the
term of this Agreement, CMF may elect immediately to terminate this
Agreement if (i) the Advisor merges, consolidates with another entity,
sells a substantial portion of its assets, or becomes bankrupt or insolvent
(ii)▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ dies, becomes incapacitated, leaves the employ of
the Advisor, ceases to control the Advisor or is otherwise not managing the
trading programs or systems of the Advisor, or (iii) the Advisor's
registration as a commodity trading advisor with the CFTC or its membership
in the NFA or any other regulatory authority, is terminated or suspended.
This Agreement will immediately terminate upon dissolution of the
Partnership or upon cessation of trading prior to dissolution.
(b) The Advisor may terminate this Agreement by giving not less than 30
days' notice to CMF (i) in the event that the trading policies of the
Partnership as set forth in the Memorandum are changed in such manner that
the Advisor reasonably believes will adversely affect the performance of
its trading strategies; (ii) after June 30, 2003; or (iii) in the event
that the General Partner or Partnership fails to comply with the terms of
this Agreement. The Advisor may immediately terminate this Agreement if
CMF's registration as a commodity pool operator or its membership in the
NFA is terminated or suspended.
(c) Except as otherwise provided in this Agreement, any termination of this
Agreement in accordance with this Paragraph 5 or Paragraph 1(e) shall be
without penalty or liability to any party, except for any fees due to the
Advisor pursuant to Section 3 hereof.
6. INDEMNIFICATION. (a)(i) In any threatened, pending or completed action,
suit, or proceeding to which the Advisor was or is a party or is threatened
to be made a party arising out of or in connection with this Agreement, the
management of the Partnership's assets by the Advisor or the offering and
sale of units in the Partnership, CMF shall, subject to subparagraph
(a)(iii) of this Paragraph 6, indemnify and hold harmless the Advisor
against any loss, liability, damage, cost, expense (including, without
limitation, attorneys' and accountants' fees), judgments and amounts paid
in settlement actually and reasonably incurred by it in connection with
such action, suit, or proceeding if the Advisor acted in good faith and in
a manner reasonably believed to be in or not opposed to the best interests
of the Partnership, and provided that its conduct did not constitute
negligence, intentional misconduct, or a breach of its fiduciary
obligations to the Partnership as a commodity trading advisor, unless and
only to the extent that the court or administrative forum in which such
action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all circumstances of the case,
the Advisor is fairly and reasonably entitled to indemnity for such
expenses which such court or administrative forum shall deem proper; and
further provided that no indemnification shall be available from the
Partnership if such indemnification is prohibited by Section 16 of the
Limited Partnership Agreement. The termination of any action, suit or
proceeding by judgment, order or settlement shall not, of itself, create a
presumption that the Advisor did not act in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
Partnership.
(ii) Without limiting sub paragraph (i) above, to the extent that the Advisor
has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in subparagraph (i) above, or in defense of
any claim, issue or matter therein, CMF shall indemnify it against the
expenses (including, without limitation, attorneys' and accountants' fees)
actually and reasonably incurred by it in connection therewith.
(iii)Any indemnification under subparagraph (i) above, unless ordered by a
court or administrative forum, shall be made by CMF only as authorized in
the specific case and only upon a determination by independent legal
counsel in a written opinion that such indemnification is proper in the
circumstances because the Advisor has met the applicable standard of
conduct set forth in subparagraph (i) above. Such independent legal counsel
shall be selected by CMF in a timely manner, subject to the Advisor's
approval, which approval shall not be unreasonably withheld. The Advisor
will be deemed to have approved CMF's selection unless the Advisor notifies
CMF in writing, received by CMF within five days of CMF's telecopying to
the Advisor of the notice of CMF's selection, that the Advisor does not
approve the selection.
(iv) In the event the Advisor is made a party to any claim, dispute or
litigation or otherwise incurs any loss or expense as a result of, or in
connection with, the Partnership's or CMF's activities or claimed
activities unrelated to the Advisor, CMF shall indemnify, defend and hold
harmless the Advisor against any loss, liability, damage, cost or expense
(including, without limitation, attorneys' and accountants' fees) incurred
in connection therewith.
(v) As used in this Paragraph 6(a), the terms "Advisor" shall include the
Advisor, its principals, officers, directors, stockholders and employees
and the term "CMF" shall include the Partnership.
(b)(i) The Advisor agrees to indemnify, defend and hold harmless CMF, the
Partnership and their affiliates against any loss, liability, damage, cost
or expense (including, without limitation, attorneys' and accountants'
fees), judgments and amounts paid in settlement actually and reasonably
incurred by them (A) as a result of the material breach of any material
representations and warranties made by the Advisor in this Agreement, or
(B) as a result of any act or omission of the Advisor relating to the
Partnership if there has been a final judicial or regulatory determination
or, in the event of a settlement of any action or proceeding with the prior
written consent of the Advisor, a written opinion of an arbitrator pursuant
to Paragraph 14 hereof, to the effect that such acts or omissions violated
the terms of this Agreement in any material respect or involved negligence,
bad faith, recklessness or intentional misconduct on the part of the
Advisor (except as otherwise provided in Section 1(g)).
(ii) In the event CMF, the Partnership or any of their affiliates is made a
party to any claim, dispute or litigation or otherwise incurs any loss or
expense as a result of, or in connection with, the activities or claimed
activities of the Advisor or its principals, officers, directors,
shareholder(s) or employees unrelated to CMF's or the Partnership's
business, the Advisor shall indemnify, defend and hold harmless CMF, the
Partnership or any of their principals, officers, directors or employees
against any loss, liability, damage, cost or expense (including, without
limitation, attorneys' and accountants' fees) incurred in connection
therewith.
(c) In the event that a person entitled to indemnification under this Paragraph
6 is made a party to an action, suit or proceeding alleging both matters
for which indemnification can be made hereunder and matters for which
indemnification may not be made hereunder, such person shall be indemnified
only for that portion of the loss, liability, damage, cost or expense
incurred in such action, suit or proceeding which relates to the matters
for which indemnification can be made.
(d) None of the indemnifications contained in this Paragraph 6 shall be
applicable with respect to default judgments, confessions of judgment or
settlements entered into by the party claiming indemnification without the
prior written consent, which shall not be unreasonably withheld, of the
party obligated to indemnify such party.
(e) The provisions of this Paragraph 6 shall survive the termination of this
Agreement.
7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) The Advisor represents and warrants that:
(i) All references to the Advisor and its principals in the Disclosure
Document are accurate in all material respects and as to them the
Disclosure Document does not contain any untrue statement of material
fact or omit to state a material fact that is necessary to make the
statements therein not misleading. All references to the Advisor and
its principals, if any, in the Memorandum or a supplement thereto
will, after review and approval of such references by the Advisor
prior to the use of such Memorandum in connection with the offering of
the Partnership's units, be accurate in all material respects, except
that with respect to pro forma or hypothetical performance information
in such Memorandum, if any, this representation and warranty extends
only to any underlying data made available by the Advisor for the
preparation thereof and not to any hypothetical or pro forma
adjustments.
(ii) The information with respect to the Advisor set forth in the actual
performance tables in the Disclosure Document is based on all of the
customer accounts managed on a discretionary basis by the Advisor's
principals and/or the Advisor during the period covered by such tables
and required to be disclosed therein. The Advisor's performance tables
have been examined by an independent certified public accountant and
the report thereon has been provided to CMF. The Advisor will have its
performance tables so examined no less frequently than annually during
the term of this Agreement.
(iii)The Advisor will be acting as a commodity trading advisor with
respect to the Partnership and not as a securities investment adviser
and is duly registered with the CFTC as a commodity trading advisor,
is a member of the NFA, and is in compliance with such other
registration and licensing requirements as shall be necessary to
enable it to perform its obligations hereunder, and agrees to maintain
and renew such registrations and licenses during the term of this
Agreement.
(iv) The Advisor is a company duly organized, validly existing and in good
standing under the laws of the United Kingdom and has full power and
authority to enter into this Agreement and to provide the services
required of it hereunder.
(v) The Advisor will not, by acting as a commodity trading advisor to the
Partnership, breach or cause to be breached any undertaking,
agreement, contract, statute, rule or regulation to which it is a
party or by which it is bound.
(vi) This Agreement has been duly and validly authorized, executed and
delivered by the Advisor and is a valid and binding agreement
enforceable in accordance with its terms.
(vii)At any time during the term of this Agreement that a memorandum
relating to the Units is required to be delivered in connection with
the offer and sale thereof, the Advisor agrees upon the request of CMF
to provide the Partnership with such information as shall be necessary
so that, as to the Advisor and its principals, such memorandum is
accurate.
(b) CMF represents and warrants for itself and the Partnership that:
(i) The Memorandum (as from time to time amended or supplemented, which
amendment or supplement shall be approved by the Advisor as to
descriptions of itself and its actual performance) does not contain
any untrue statement of a material fact or omit to state a material
fact which is necessary to make the statements therein not misleading,
except that the foregoing representation does not apply to any
statement or omission which may be made concerning the Advisor in the
Memorandum made in reliance upon, and in conformity with, information
furnished to CMF by or on behalf of the Advisor expressly for use in
the Memorandum (it being understood that any hypothetical and pro
forma performance adjustments will not be deemed to be furnished by
the Advisor).
(ii) It is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware and has full
limited liability company power and authority to perform its
obligations under this Agreement.
(iii)CMF and the Partnership have the capacity and authority to enter into
this Agreement on behalf of the Partnership.
(iv) This Agreement has been duly and validly authorized, executed and
delivered on CMF's and the Partnership's behalf and is a valid and
binding agreement of CMF and the Partnership enforceable in accordance
with its terms.
(v) CMF will not, by acting as General Partner to the Partnership and the
Partnership will not, breach or cause to be breached any undertaking,
agreement, contract, statute, rule or regulation to which it is a
party or by which it is bound which would materially limit or affect
the performance of its duties under this Agreement.
(vi) It is registered as a commodity pool operator and is a member of the
NFA, and it will maintain and renew such registration and membership
during the term of this Agreement.
(vii)The Partnership is a limited partnership duly organized and validly
existing under the laws of the State of New York and has full power
and authority to enter into this Agreement and to perform its
obligations under this Agreement.
8. COVENANTS OF THE ADVISOR, CMF AND THE PARTNERSHIP.
(a) The Advisor agrees as follows:
(i) In connection with its activities on behalf of the Partnership, the
Advisor will comply with all applicable rules and regulations of the
CFTC and/or the commodity exchange on which any particular transaction
is executed.
(ii) The Advisor will promptly notify CMF of the commencement of any
material suit, action or proceeding involving it, whether or not any
such suit, action or proceeding also involves CMF.
(iii)In the placement of orders for the Partnership's account and for the
accounts of any other client, the Advisor will utilize a
pre-determined, systematic, fair and reasonable order entry system,
which shall, on an overall basis, be no less favorable to the
Partnership than to any other account managed by the Advisor. The
Advisor acknowledges its obligation to review the Partnership's
positions, prices and equity in the account managed by the Advisor
daily and within two business days to notify, in writing, the broker
and CMF and the Partnership's brokers of (i) any error committed by
the Advisor or its principals or employees, (ii) any trade which the
Advisor believes was not executed in accordance with its instructions,
or (iii) any discrepancy with a value of $10,000 or more (due to
differences in the positions, prices or equity in the account) between
its records and the information reported on the account's daily and
monthly broker statements.
(iv) The Advisor will maintain a net worth of not less than USD
$500,000 during the term of this Agreement.
(b) CMF agrees for itself and the Partnership that:
(i) CMF and the Partnership will comply with all applicable rules and
regulations of the CFTC and/or the commodity exchange on which
any particular transaction is executed.
(ii) CMF will promptly notify the Advisor of the commencement of any
material suit, action or proceeding involving it or the
Partnership, whether or not such suit, action or proceeding also
involves the Advisor.
9. COMPLETE AGREEMENT. This Agreement constitutes the entire agreement between
the parties pertaining to the subject matter hereof.
10. ASSIGNMENT. This Agreement may not be assigned by any party without the
express written consent of the other parties.
11. AMENDMENT. This Agreement may not be amended except by the written consent
of the parties.
12. NOTICES. All notices, demands or requests required to be made or delivered
under this Agreement shall be in writing and delivered personally, by facsimile
or by registered or certified mail or expedited courier, return receipt
requested, postage prepaid, to the addresses below or to such other addresses as
may be designated by the party entitled to receive the same by notice similarly
given:
If to CMF:
Citigroup Managed Futures LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
If to the Advisor:
▇▇▇▇▇▇ Capital Management Limited
▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
principles of conflicts of laws.
14. ARBITRATION. The parties agree that any dispute or controversy arising out
of or relating to this Agreement or the interpretation thereof, shall be settled
by arbitration in accordance with the rules, then in effect, of the National
Futures Association or, if the National Futures Association shall refuse
jurisdiction, then in accordance with the rules, then in effect, of the American
Arbitration Association; provided, however, that the power of the arbitrator
shall be limited to interpreting this Agreement as written and the arbitrator
shall state in writing his reasons for his award. Judgment upon any award made
by the arbitrator may be entered in any court of competent jurisdiction.
15. NO THIRD PARTY BENEFICIARIES. There are no third party beneficiaries to this
Agreement except that certain persons not parties to this Agreement have rights
under Section 6 hereof.
IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of
the undersigned as of the day and year first above written.
CITIGROUP MANAGED FUTURES LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Chief Financial Officer and Director
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ORION
FUTURES FUND L.P.
By: Citigroup Managed Futures LLC
(General Partner)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Chief Financial Officer and Director
▇▇▇▇▇▇ CAPITAL MANAGEMENT LIMITED
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇
Name:▇▇▇▇▇▇ ▇▇▇▇
Title: Director
▇▇▇▇▇▇ Capital Managment