MANAGEMENT AGREEMENT
AGREEMENT made as of the 30th day of September, 1999 among ▇▇▇▇▇ ▇▇▇▇▇▇
FUTURES MANAGEMENT INC., a Delaware corporation ("SBFM" or the "Trading
Manager"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Orion Futures Fund L.P., a New York limited
partnership (the "Partnership") SFG GLOBAL INVESTMENTS, INC., a Delaware
Corporation ("SFG" or the "General Partner") and AAA Capital Management Inc., a
Texas corporation (the "Advisor").
W I T N E S S E T H :
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WHEREAS, SBFM is the trading manager of the Partnership, 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, SBFM and SFG, the general partner of the Partnership, have entered
into a trading manager agreement, dated March 31, 1999, which authorizes SBFM as
trading manager to negotiate advisory agreements on behalf of SFG and the
Partnership; and
WHEREAS, the Limited Partnership Agreement establishing the Partnership
(the "Limited Partnership Agreement") permits the delegation to one or more
commodity trading advisors the 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
WHEREAS, the General Partner is registered as a commodity pool operator
with the CFTC and is a member of the NFA; and
WHEREAS, the Trading Manager is registered as a commodity trading advisor
with the CFTC and is a member of the NFA; and
WHEREAS, the Trading Manager, 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 SBFM 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 strategies and trading
policies set forth in the Partnership's Private Placement Offering Memorandum
and Disclosure Document dated March 31, 1999, 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 SBFM to be utilized by the Advisor in
managing the Partnership's assets. SBFM has initially selected the Advisor's
Sole trading 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 SBFM.
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) SBFM acknowledges receipt of the Advisor's Disclosure Document dated
September 30, 1999 as filed with the NFA and the CFTC. All trades made by the
Advisor for the account of the Partnership shall be made through such commodity
broker or brokers as SBFM 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 SBFM, 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 SBFM, provided
that the futures commission merchant or independent floor broker and any give-up
or floor brokerage fees are approved in advance by SBFM. 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 agreement (by either original or fax
copy).
(c) The initial allocation of the Partnership's assets to the Advisor will
be made to the Advisor's Sole trading Program. In the event the Advisor wishes
to use a trading system or methodology other than or in addition to the system
or methodology outlined in the Memorandum in connection with its trading for the
Partnership, either in whole or in part, it may not do so unless the Advisor
gives SBFM prior written notice of its intention to utilize such different
trading system or methodology and SBFM consents thereto in writing. In addition,
the Advisor will provide five days' prior written notice to SBFM 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 SBFM. In addition, the Advisor will notify SBFM of
any changes to the trading system or methodology that would require a change in
the description of the trading strategy or methods described in the Memorandum.
Further, the Advisor will provide the Partnership with a current list of all
commodity interests to be traded for the Partnership's account and will not
trade any additional commodity interests for such account without providing
notice thereof to SBFM and receiving SBFM's written approval. The Advisor also
agrees to provide SBFM, 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 SBFM.
(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 SBFM 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 SBFM 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 SBFM 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, SBFM
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 SBFM 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) SBFM 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. SBFM 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 SBFM's
sole discretion so that SBFM may reallocate the Partnership's assets, meet
margin calls on the Partnership's account, fund redemptions, or for any other
reason, except that SBFM will not require the liquidation of specific positions
by the Advisor. SBFM 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 any SBFM affiliate) selected by the Advisor, (it also being
understood that SBFM, 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, SBFM, or any other trading advisor.
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 1/6 of 1% (2% 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 22, 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 fiscal period over Net Assets managed
by the Advisor at the end of the highest previous fiscal period 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 until the end of the first
full calendar quarter of trading, which fee shall be based on New Trading
Profits earned from the commencement of trading operations by the Partnership
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 calendar 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 SBFM 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. SBFM 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 SBFM for the Partnership. However, the Advisor represents, warrants
and agrees that it believes that the rendering of such consulting, advisory and
management services to other accounts and entities will not require any material
change in the Advisor's basic trading strategies and will not affect the
capacity of the Advisor to continue to render services to SBFM 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
SBFM in writing if the Partnership's positions are included in an aggregate
amount which exceeds the applicable speculative position limit. The Advisor
agrees that, if its trading recommendations are altered because of the
application of any speculative position limits, it will not modify the trading
instructions with respect to the Partnership's account in such manner as to
affect the Partnership substantially disproportionately as compared with the
Advisor's other accounts. The Advisor further represents, warrants and agrees
that under no circumstances will it knowingly or deliberately use trading
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
SBFM 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 SBFM. 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, 2000.
SBFM 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, SBFM may
terminate this Agreement at any month-end upon 30 days' notice to the Advisor.
At any time during the term of this Agreement, SBFM 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 at least 50% of the outstanding Units shall
vote to require SBFM to terminate this Agreement; (iv) the Advisor fails to
comply with the terms of this Agreement; (v) SBFM, in good faith, reasonably
determines that the performance of the Advisor has been such that SBFM's
fiduciary duties to the Partnership require SBFM to terminate this Agreement; or
(vi) SBFM reasonably believes that the application of speculative position
limits will substantially affect the performance of the Partnership. At any time
during the term of this Agreement, SBFM 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) A.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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 SBFM (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, 2000; or (iii) in the event that SBFM, the
General Partner or the Partnership fails to comply with the terms of this
Agreement. The Advisor may immediately terminate this Agreement if SBFM's
registration as a commodity trading advisor, or SFG's registration as a
commodity pool operator or either of their memberships 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 or the
management of the Partnership's assets by the Advisor or the offering and sale
of units in the Partnership, SBFM 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 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), 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, SBFM 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 SBFM 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 SBFM 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 SBFM's
selection unless the Advisor notifies SBFM in writing, received by SBFM within
five days of SBFM's telecopying to the Advisor of the notice of SBFM'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 SBFM's activities or claimed activities
unrelated to the Advisor, SBFM 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 "SBFM" shall include the Partnership.
(b)(i) The Advisor agrees to indemnify, defend and hold harmless SBFM, SFG,
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 SBFM, SFG, 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 SBFM's or the Partnership's business, the Advisor
shall indemnify, defend and hold harmless SBFM, SFG, the Partnership or any of
their affiliates 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.
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(a) The Advisor represents and warrants that:
(i) All references to the Advisor and its principals in the Memorandum (or
any 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. The foregoing
representation and warranty extends only to the underlying data made available
by the Advisor for the preparation of the Memorandum and not to any hypothetical
or pro forma adjustments made by the General Partner.
(ii) The information with respect to the Advisor set forth in the actual
performance tables in the Memorandum and/or the Advisor's 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.
(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 corporation duly organized, validly existing and in
good standing under the laws of the State of Texas 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 prospectus
relating to the units is required to be delivered in connection with the offer
and sale thereof, the Advisor agrees upon the request of SBFM to provide the
Partnership with such information as shall be necessary so that, as to the
Advisor and its principals, such prospectus is accurate.
(b) SBFM represents and warrants for itself and the Partnership that:
(i) The Memorandum (as from time to time amended or supplemented, which
amendment or supplement is approved by the Advisor as to descriptions of itself
and its actual performance) does not contain any untrue statement of a material
fact or omit to state a material fact which is necessary to make the statements
therein not misleading, except that the foregoing representation does not apply
to any statement or omission concerning the Advisor in the Memorandum, made in
reliance upon, and in conformity with, information furnished to SBFM by or on
behalf of the Advisor expressly for use in the Memorandum (it being understood
that the hypothetical and pro forma adjustments, if any, to the Advisor's
performance were not furnished by the Advisor).
(ii) It is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power
and authority to perform its obligations under this Agreement.
(iii) SBFM has 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 SBFM's and the Partnership's behalf and is a valid and binding
agreement of SBFM and the Partnership enforceable in accordance with its terms.
(v) SBFM will not, by acting as Trading Manager 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) SBFM is registered as a commodity trading advisor and is a member of
the NFA, and it will maintain and renew such registration and membership during
the term of this Agreement.
(c) The General Partner represents and warrants for itself and the
Partnership that:
(i) The General Partner is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority to perform its obligations under this Agreement.
(ii) 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.
(iii) 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, SBFM 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 SBFM of the commencement of any
material suit, action or proceeding involving it, whether or not any such suit,
action or proceeding also involves SBFM. The Advisor will provide SBFM with
copies of any correspondence from or to the CFTC, NFA or any commodity exchange
in connection with an investigation or audit of the Advisor's business
activities.
(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 SBFM
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; and (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 $1,000,000
during the term of this Agreement.
(v) The Advisor will make no representations, other than those contained in
the Memorandum, to investors or prospective investors in the Partnership with
respect to the offering and sale of Units in the Partnership without the prior
written approval of SBFM
(b) SBFM agrees for itself and the Partnership that:
(i) SBFM 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) SBFM 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 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 SBFM:
▇▇▇▇▇ ▇▇▇▇▇▇ Futures Management Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
If to the Advisor:
AAA Capital Management Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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.
IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of
the undersigned as of the day and year first above written.
▇▇▇▇▇ ▇▇▇▇▇▇ FUTURES
MANAGEMENT INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Director
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Orion Futures Fund L.P.
By: SFG Global Investments, Inc.
(General Partner)
By: /s/ ▇▇▇▇▇ ▇. Mugler
-------------------
▇▇▇▇▇ ▇. Mugler
President
SFG GLOBAL INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇ ▇. Mugler
-------------------
▇▇▇▇▇ ▇. Mugler
President
AAA Capital Management Inc.
By_/s/ A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President