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"), XXXXXXX XXXXX XXXXXX ORION FUTURES FUND L.P., a New York limited
partnership (the "Partnership"), and XXXXXX 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 Xxxxxxx Xxxxx Xxxxxx 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) Xxxxx Xxxxxx Xxxxxxx 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
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
If to the Advisor:
Xxxxxx Capital Management Limited
0x Xx. Xxxx Xxxxxx Xxxxx
Xxxxxx X00XX, Xxxxxx Xxxxxxx
Attention: Xx. Xxxxx Xxxxxx Xxxxxxx
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/ Xxx X. XxXxxxxxx, Xx.
Xxx X. XxXxxxxxx, Xx.
Chief Fianacial Officer and Director
XXXXXXX XXXXX XXXXXX ORION
FUTURES FUND L.P.
By: Citigroup Managed Futures LLC
(General Partner)
By: Xxx X. XxXxxxxxx, Xx.
Xxx X. XxXxxxxxx, Xx.
Chief Fianacial Officer and Director
XXXXXX CAPITAL MANAGEMENT LIMITED
By:/s/ Xxxxxx Xxxx
Director
