SSB Account No.: _________
________Please check here if
employed by Citigroup Global Markets
Inc. or an affiliate
SMITH BARNEY POTOMAC FUTURES FUND L.P.
(a New York limited partnership)
Subscription Agreement
Citigroup Managed Futures LLC
399 Park Avenue - 7th floor
New York, New York 10022
Re: Smith Barney Potomac Futures Fund L.P.
--------------------------------------
Ladies and Gentlemen:
1. Subscription for Units. I hereby irrevocably subscribe for the amount of
Units (and partial Units rounded to four decimal places) of Limited Partnership
Interest ("Units") of Smith Barney Potomac Futures Fund L.P. (the "Partnership")
as indicated on page C-7 hereof. I understand that each Unit will be offered at
Net Asset Value per Unit on the date of sale during the Continuous Offering. I
hereby authorize Citigroup Global Markets ("CGM") to debit my CGM account in the
amount of my subscription as described in "Subscription Procedure" in the
Private Placement Offering Memorandum and Disclosure Document dated September
24, 2003, as amended or supplemented from time to time (the "Memorandum").
I am aware that this subscription is not binding on the Partnership unless
and until it is accepted by the General Partner, which may reject this
subscription in whole or in part for any reason whatsoever. I understand that
the General Partner will advise me within five business days of receipt of my
funds and this Agreement if my subscription has been rejected. I further
understand that if this subscription is not accepted, the full amount of my
subscription will be promptly returned to me without deduction.
2. Representations, Warranties and Covenants of Subscriber. As an
inducement to the General Partner on behalf of the Partnership to sell me the
Units for which I have subscribed I hereby represent, warrant and agree as
follows:
(a) I am over 21 years old, am legally competent to execute this Agreement
and have received and reviewed the Memorandum and, if this purchase is made
during the Continuous Offering, the Partnership's most recent monthly statement
and annual report, if any, and except as set forth in the Memorandum, no
representations or warranties have been made to me by the Partnership, its
General Partner or their agents, with respect to the business of the
Partnership, the financial condition of the Partnership, the deductibility of
any item for tax purposes or the economic, tax, or any other aspects or
consequences of a purchase of a Unit, and I have not relied upon any information
concerning the offering, written or oral, other than that contained in the
Memorandum or provided by the General Partner at my request. In addition, I have
been represented by such legal and tax counsel and others selected by me as I
have found it necessary to consult concerning this transaction. With respect to
the tax aspects of my investment, I am relying upon the advice of my own
personal tax advisors and upon my own knowledge with respect thereto.
(b) I have carefully reviewed the various conflicts of interest set forth
in the Memorandum, including those arising from the fact that the General
Partner is an affiliate of CGM, the selling agent and commodity broker/dealer
for the Partnership.
(c) I hereby acknowledge and agree to the terms of the Customer Agreement
between the Partnership and CGM and to payment to CGM of the flat rate brokerage
fee as described in the Memorandum. I understand that lower brokerage fees might
be available, but that the General Partner will not negotiate with CGM or any
other broker to obtain such lower rates.
(d) The Partnership has made available to me, prior to the date hereof, the
opportunity to ask questions of, and to receive answers from, the General
Partner and its representatives, concerning the terms and conditions of the
offering, and has afforded me access to obtain any information, documents,
financial statements, records and books (i) relative to the Partnership, its
business, the offering and an investment in the Partnership, and (ii) necessary
to verify the accuracy of any information, documents, financial statements,
records and books furnished in connection with the offering. All materials and
information requested by me, including any information requested to verify any
information furnished, have been made available and have been examined to my
satisfaction.
(e) I understand that the Partnership offering has not been registered
under the Securities Act of 1933, as amended (the "Act"), or pursuant to the
provisions of the securities or other laws of certain jurisdictions, in reliance
on exemptions for private offerings contained in the Act and in the laws of
certain jurisdictions. I am fully aware of the restrictions on sale,
transferability and assignment of the Units as set forth in the Limited
Partnership Agreement, and that I must bear the economic risk of my investment
in the Partnership for an indefinite period of time because the offering has not
been registered under the Act. I understand that the Units cannot be offered or
sold unless they are subsequently registered under the Act or an exemption from
such registration is available, and that any transfer requires the consent of
the General Partner, who may determine not to permit any specific transfer.
(f) I represent that I am aware of the speculative nature of this
investment and of the high degree of risk involved, that I can bear the economic
risks of this investment and can afford a complete loss of my investment. As
evidence of the foregoing, I hereby represent to you that I: (i) have sufficient
liquid assets to pay the purchase price for my interest in the Partnership; (ii)
have adequate means of providing for my current needs and possible personal
contingencies and have no present need for liquidity of my investment in the
Partnership; (iii) have adequate net worth and sufficient means to sustain a
complete loss of my investment in the Partnership; and (iv) either (a) I am an
accredited investor as defined in Rule 501 (a) of the Act, the terms of which
are set forth in Exhibit I to this Subscription Agreement by virtue of the
subparagraph indicated on page 7 or (b) I am a resident of Arkansas or Illinois
and I am an accredited investor as that term is defined under the law of my
state of residence set forth in Exhibit II or III to this Subscription Agreement
by virtue of the subparagraph(s) indicated in the Exhibit or (c) I have a net
worth (exclusive of home, furnishings and automobiles) at least three times my
investment in the Partnership or my actual gross income for the last two
calendar years was, and my projected gross income for the current calendar year
will be, not less than three times my investment in the Partnership for each
year.
(g) I will not transfer or assign this Subscription Agreement, or any of my
interest herein. I am acquiring my interest in the Partnership hereunder for my
own account and for investment purposes only and not with a view to or for the
transfer, assignment, resale or distribution thereof, in whole or in part. I
have no present plans to enter into any such contract, undertaking, agreement or
arrangement. I understand that the General Partner may in its absolute
discretion require any limited partner to redeem all or part of his Units, upon
ten (10) days' notice to such limited partner.
(h) If I am not a citizen or resident of the United States for U.S. tax
purposes, I agree to pay or reimburse CGM or the Partnership for any taxes,
including but not limited to withholding tax imposed with respect to my Units.
(i) If I am a collective investment vehicle, I am in compliance with all
applicable Federal regulatory requirements including the registration rules of
the Commodity Futures Trading Commission.
(j) FOR MAINE INVESTORS. THESE SECURITIES ARE BEING SOLD PURSUANT TO AN
EXEMPTION FROM REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE
UNDER SECTION 10502(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUTES. THESE
SECURITIES MAY BE DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE
ABLE TO RESELL THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR
FEDERAL SECURITIES LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAW EXISTS.
(k) FOR NON-ACCREDITED INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR
MAKE PURCHASES IN THE STATES OF ALABAMA OR KANSAS. Subscriber hereby represents
and affirms that Subscriber has a net worth (exclusive of principal residence,
its furnishings and personal automobiles) exceeding five (5) times Subscriber's
investment.
(l) FOR NON-ACCREDITED INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE
PURCHASES IN THE STATE OF ARKANSAS. Subscriber hereby represents and affirms
that Subscriber has a net worth or joint net worth with spouse exceeding five
(5) times Subscriber's investment.
(m) FOR INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE PURCHASES IN
THE STATE OF INDIANA. Subscriber hereby represents and affirms that Subscriber
has (i) a gross income of $30,000 and a net worth of the greater of $30,000 or
twice the amount of Subscriber's investment or (ii) a net worth of the greater
of $75,000 or three times the amount of Subscriber's investment.
(n) FOR NON-ACCREDITED INVESTORS WHO RESIDE IN, RECEIVE OFFERS FORM OR MAKE
PURCHASES IN THE STATE OF KENTUCKY. Subscriber hereby represents and affirms
that Subscriber has a net worth exceeding ten (10) times Subscriber's
investment.
(o) FOR NON-ACCREDITED INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE
PURCHASES IN THE STATE OF MAINE. Subscriber hereby represents and affirms that
Subscriber has (i) a minimum net worth (exclusive of home, home furnishing and
automobiles) of $200,000 or (ii) a minimum net worth (exclusive of home, home
furnishings and automobiles) of $50,000 and a minimum annual gross income of
$50,000.
(p) FOR NON-ACCREDITED INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE
PURCHASES IN THE STATE OF MISSOURI. Subscriber hereby represents and affirms
that Subscriber has a net worth exceeding five (5) times Subscriber's
investment.
(q) FOR ALL INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE PURCHASES
IN THE STATE OF NEW HAMPSHIRE. Subscriber hereby warrants that Subscriber has
(i) net worth, exclusive of home, home furnishings and automobiles of $250,000
or (ii) net worth, exclusive of home, home furnishings and automobiles of
$125,000 and $50,000 of taxable income.
(r) FOR ALL INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE PURCHASES
IN THE STATE OF NORTH CAROLINA (SUITABILITY STANDARDS FOR A FIDUCIARY ACCOUNT
MAY BE MET BY THE FIDUCIARY, THE ACCOUNT OR THE DONOR). Subscriber hereby
represents and affirms that Subscriber is making an initial cash payment of at
least $5,000 and Subscriber has either (i) a minimum net worth (exclusive of
home, home furnishings and automobiles) of $60,000 and a taxable income in the
last tax year or estimated in the current tax year of $60,000 or (ii) a minimum
net worth (exclusive of home, home furnishings and automobiles) of $225,000.
(s) FOR NON-ACCREDITED INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE
PURCHASES IN THE STATE OF PENNSYLVANIA. Subscriber hereby represents and affirms
that Subscriber has a net worth (exclusive of home, home furnishings and
automobiles) alone or with spouse exceeding five (5) times Subscriber's
investment.
(t) FOR ALL INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE PURCHASES
IN THE STATE OF SOUTH CAROLINA. Subscriber hereby represents and affirms that
Subscriber is making an initial purchase of at least $2,500 and that Subscriber
has (i) a minimum net worth (exclusive of home, furniture and automobile) of
$100,000 or (ii) federal and state income subject to the maximum rate of income
tax.
(u) FOR NON-ACCREDITED INVESTORS WHO RESIDE IN, RECEIVE OFFERS FROM OR MAKE
PURCHASES IN THE STATE OF TENNESSEE. Subscriber hereby represents and affirms
that Subscriber has a net worth exceeding ten (10) times Subscriber's
investment.
(v) FOR ACCREDITED INVESTORS WHICH ARE GENERAL PARTNERSHIPS AND RESIDE IN,
RECEIVE OFFERS FROM OR MAKE PURCHASES IN THE STATE OF WASHINGTON. Subscriber
hereby represents and affirms that Subscriber has not determined accreditation
by aggregating the net worth of Subscriber's general partners.
(aa) FOR ALL ACCREDITED INVESTORS. Subscriber hereby represents and affirms
that (i) Subscriber has a net worth alone or with spouse exceeding ten (10)
times Subscriber's investment or (ii) Subscriber has either alone or with
Subscriber's professional advisor the capacity to protect Subscriber's interests
in connection with this transaction or (iii) Subscriber is able to bear the
economic risk of the investment.
(bb) Subscriber represents that the information contained herein is
complete and accurate as of the date hereof and may be relied upon by the
General Partner. Subscriber further represents that Subscriber will notify the
General Partner immediately of any adverse change in any such information which
may occur prior to the acceptance of Subscriber's subscription and will promptly
send the General Partner written confirmation thereof.
3. Acceptance of Limited Partnership Agreement and Power of Attorney. I
hereby apply to become a limited partner as of the date upon which the sale of
my Units becomes effective, and I hereby agree to each and every term of the
Limited Partnership Agreement as if my signature were subscribed thereto. I
hereby constitute and appoint the General Partner of the Partnership, with full
power of substitution, as my true and lawful attorney to execute, acknowledge,
file and record in my name, place and stead: (i) an Agreement of Limited
Partnership (the "Partnership Agreement") of the Partnership substantially in
the form included as an Appendix to the Memorandum; (ii) all certificates and
other instruments which the General Partner of the Partnership shall deem
appropriate to create, qualify, continue or dissolve the Partnership as a
limited partnership in the jurisdictions in which the Partnership may be formed
or conduct business; (iii) all agreements amending or modifying the Partnership
Agreement that may be appropriate to reflect a change in any provision of the
Partnership Agreement or the exercise by any person of any right or rights
thereunder not requiring my specific consent, or requiring my consent if such
consent has been given, and any other change, interpretation or modification of
the Partnership Agreement in accordance with the terms thereof; (iv) such
amendments, instruments and documents which the General Partner deems
appropriate under the laws of the State of New York or any other state or
jurisdiction to reflect any change, amendment or modification of the Partnership
Agreement of any kind referred to in subparagraph (iii) hereof; (v) filings with
agencies of any federal, state or local governmental unit or of any jurisdiction
which the General Partner shall deem appropriate to carry out the business of
the Partnership; and (vi) all conveyances and other instruments which the
General Partner shall deem appropriate to effect the transfer of my Partnership
interest pursuant to the Partnership Agreement or of Partnership assets and to
reflect the dissolution and termination of the Partnership. The foregoing
appointment (a) is a special power of attorney coupled with an interest, is
irrevocable and shall survive my subsequent death, incapacity or disability and
(b) shall survive the delivery of an assignment by me of the whole or any
portion of my interest, except that where an assignee of the whole of such
interest has been approved by the General Partner for admission to the
Partnership as a substituted Limited Partner, the power of attorney shall
survive the delivery of such assignment for the sole purpose of enabling the
General Partner to execute, acknowledge and file any instrument necessary to
effect such substitution.
4. Indemnification. I hereby agree to indemnify and hold harmless the
Partnership, the General Partner and its affiliated persons from any and all
damages, losses, costs and expenses (including reasonable attorneys' fees) which
they may incur by reason of any breach by me of the covenants, warranties and
representations contained in this Subscription Agreement.
5. Survival. All representations, warranties and covenants contained in
this Subscription Agreement and the indemnification contained in Section 4 shall
survive (i) the acceptance of the subscription, (ii) changes in the
transactions, documents and instruments described in the Memorandum that are not
material, and (iii) the death or disability of the undersigned.
6. Miscellaneous. This subscription is not revocable by me and constitutes
the entire agreement among the parties hereto with respect to the subject matter
hereof and may not be amended orally. This Agreement shall be construed in
accordance with and be governed by the laws of the State of New York.
7. Employee-Benefit Plans. The undersigned individual, employer or trustee
who has investment discretion over the assets of the subscribing
employee-benefit plan (the "Fiduciary") represents and agrees as follows:
(1) Either (a) or (b): (a) neither CGM, the General Partner nor any of
their employees, Financial Consultants or affiliates (i) manages any part of the
investment portfolio of the subscribing employee-benefit plan (the "Plan"), or
(ii) has an agreement or understanding, written or unwritten, with the Fiduciary
under which the Fiduciary regularly receives information, recommendations or
advice concerning investments which are used as a primary basis for the Plan's
investment decisions and which are individualized to the particular needs of the
Plan.
or (b) The relationship between the Plan and CGM, the General Partner or
any of their employees, Financial Consultants or affiliates comes within (i) or
(ii) above with respect to only a portion of the Plan's assets and the
investment in the Partnership is being made by the Fiduciary from a portion of
Plan assets with respect to which such relationship does not exist.
(2) Although an CGM account executive or a Financial Consultant may have
suggested that the Fiduciary consider the investment in the Partnership, the
Fiduciary has studied the Memorandum and has made the investment decision solely
on the basis of the Memorandum and without reliance on such suggestion.
(3) The Plan is in compliance with all applicable Federal regulatory
requirements.
(4) The undersigned Fiduciary acknowledges that it is: independent of CGM,
the General Partner and all of their affiliates; capable of making an
independent decision regarding the investment of Plan assets; knowledgeable with
respect to the Plan in administrative matters and funding matters related
thereto, and able to make an informed decision concerning participation in the
Partnership.
(5) The undersigned Fiduciary, if the Plan is an IRA or Keogh account of
which CGM is the custodian, hereby directs said custodian as custodian of the
Plan to subscribe for the amount indicated under paragraph 1 above. In addition,
the Fiduciary represents and confirms that all of the information contained in
this Subscription Agreement and relating to the subscribing Plan is complete and
accurate.
Please complete this Subscription Agreement by filling in the blanks and
executing it on the following page.
EXECUTION PAGE
I. For Client Use:
A. Subscription Amount: I hereby subscribe for $_____________ (minimum $25,000).
B. Accreditation: Please select one of the following.
1. ___ I am an accredited investor under paragraph _____ of Exhibit I on page 9.
OR
2. ___ I am an unaccredited investor.
If you selected #2 above, please fill in the Prospective Purchaser
Questionnaire (Exhibit IV, page 14) and, if applicable, the Purchaser
Representative Questionnaire (Exhibit IV-1, page 16).
C. 1. Representation: The foregoing statements are complete and accurate as
of the date hereof and may be relied upon by the General Partner. I further
represent that I will notify the General Partner immediately of any adverse
change in any such information and will promptly send the General Partner
written confirmation thereof.
2. Signature: [If Joint Ownership, All Parties Must Sign (if fiduciary,
partnership or corporation, indicate capacity of signatory under signature
line)]
IN WITNESS WHEREOF, I have executed this Subscription Agreement including Power
of Attorney this day of
-----------
---------------- ---------------------
Signature Signature
(include Title, if applicable) (include Title, if applicable)
D. Please complete information on the next page.
II. For Branch Use:
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Branch Manager - Signature
-------------------------------
Branch Manager - Print Name
III. For General Partner's Use:
ACCEPTED:
CITIGROUP MANAGED FUTURES LLC
By:______________________________________
Name:____________________________________
Title:_____________________________________
Registration Data
- ------------------------ ---------------------------
Name of Limited Partner Name of Joint Limited
(Please Print) Partner (if any)
(See Note 1 Below) (Please Print)
- ------------------------ ---------------------------
Residence Street Address Mail Address (if different
(See Note 2 Below) than Residence Address)
- ------------------------------- -------------------------------
City State Zip Code City State Zip Code
- ---------------------------------
Social Security or
Federal Employer I.D.
Number If Joint Ownership, check one:
/ / Joint Tenants with right to
- ----------------------------------
CGM Account Number Survivorship (all parties must sign)
Note 1: If subscriber is an ERISA / / Tenants in Common
plan or account, please so indicate
(e.g.: "XYZ" Co. Pension Plan", "Dr.
A Keogh Account", "Mr. B IRA Account"). / / Community Property
If Fiduciary or
Corporation, check one:
Note 2: The address given above must
be the residence address of the Limited / / Trust / / Partnership
Partner. Post Office boxes and other
nominee addresses will not be accepted. / / Corporation
For Branch Use
FC Instructions:
Enter a ticket for purchase amount using security #8955562 and route through
IOI.
See front cover for mailing instructions of Subscription Agreement.
Exhibit I
"Accredited investor" shall mean any person who comes within any of the
following categories, or who the issuer reasonably believes comes within any of
the following categories, at the time of the sale of the securities to that
person:
(1) Any bank as defined in section 3(a)(2) of the Act; any savings and loan
association or other institution as defined in section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity or any broker or dealer
registered pursuant to section 15 of the Securities Exchange Act of 1934;
insurance company as defined in section 2(13) of the Act; investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in section 2(a)(48) of that Act; Small Business Investment
Company licensed by the U.S. Small Business Administration under section 301(c)
or (d) of the Small Business Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the benefit of its
employees, if such plan has total assets in excess of $5,000,000; employee
benefit plan within the meaning of Title I of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary, as
defined in section 3(21) of such Act, which is either a bank, insurance company,
or registered investment adviser, or if the employee benefit plan has total
assets in excess of $5,000,000, or if a self-directed plan, with investment
decisions made solely by persons that are accredited investors;
(2) Any private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in Section 501(c)(3) of the Internal Revenue
Code, any corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the securities offered, with
total assets in excess of $5,000,000;
(4) Any director, executive officer, or general partner of the issuer of
the securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer;
(5) Any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeds $1,000,000;
(6) Any natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(7) Any trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii);
(8) Any entity in which all of the equity owners are accredited investors.
EXHIBIT II
FOR ARKANSAS INVESTORS ONLY
SUPPLEMENT TO SUBSCRIPTION AGREEMENT
Smith Barney Potomac Futures Fund L.P. (the "Partnership") will rely on the
following information for the purpose of determining whether individuals
subscribing for limited partnership interests in the Partnership ("Interests")
who are Arkansas investors, or entities subscribing for Interests which have
their primary place of business in Arkansas, meet the standards for securities
sold in reliance upon the exemption set forth in Arkansas Code of 1987
Annotated, as amended, Section 23-402-504. ALL INFORMATION CONTAINED IN THIS
SUPPLEMENT WILL BE TREATED CONFIDENTIALLY; provided, however, that the
Supplement may be presented to such parties as the Partnership deems appropriate
if it is called upon to establish that the proposed offer and sale of the
Interests meet the requirements of applicable securities laws.
Please indicate below whether Subscriber comes within the following categories:
(a) A bank, insurance company, investment company (as
defined in the Investment Company Act of 1940),
business development company, or small business
investment company, or any employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, either
administered by a bank, insurance company or
registered investment adviser or with total assets
in excess of $5,000,000 Yes No
--- ---
(b) A private business development company as defined
in Section 202(a)(22) of the Investment Advisers Act
of 1940 Yes No
---- ------
(c) A non-profit organization described in Section 501(c)(3)
of the Internal Revenue Code with total assets in excess
of $5,000,000 Yes No
--- ---
(d) A director, executive officer or general partner of the
Partnership or a director, executive officer or general
partner of a general partner of the Partnership
Yes No
--- ---
(e) Subscriber is purchasing at least $150,000 of Interests
and Subscriber's net worth*, or joint net worth with
spouse, exceeds five (5) times the amount Subscriber
proposes to purchase
Yes No
--- ---
(f) A natural person whose net worth, individually, or jointly
with spouse, exceeds $1,000,000
Yes No
--- ---
(g) A natural person who had individually, and not jointly with
spouse, income in excess of $200,000 in each of the two most
recent years and who reasonably expects an income in excess of
$200,000 in the current year
Yes No
----- ------
(h) An entity in which all of the equity owners are accredited
investors under paragraphs (a), (b), (c), (d), (f) or (g)
above
Yes No
--- ---
Subscriber represents that the information contained herein is complete
and accurate and may be relied upon by the Partnership and agrees to notify the
Partnership if the answer to any item changes from "Yes" to "No" prior to being
admitted as a Limited Partner of the Partnership.
IN WITNESS WHEREOF, Subscriber has executed this Supplement and declares
that it is truthful and correct.
Dated: ___________________________________
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(Signature)
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(Print Name)
*"Net worth" for the purpose of this question includes only (i) cash, (ii)
securities for which market quotations are readily available, and (iii) an
unconditional obligation to pay cash or securities for which market quotations
are readily available, which obligation is to be discharged within five years of
Subscriber's purchase of Interests.
Exhibit III
FOR ILLINOIS INVESTORS ONLY
SUPPLEMENT TO
SUBSCRIPTION AGREEMENT
Smith Barney Potomac Futures Fund L.P. (the "Partnership") will rely on the
following information for the purpose of determining whether individuals
subscribing for limited partnership interests in the Partnership ("Interests")
who are Illinois investors, or entities subscribing for Interests which have
their primary place of business in Illinois, meet the standards for securities
sold in reliance upon the exemption set forth in Illinois Laws, as amended,
Section 4.G. ALL INFORMATION CONTAINED IN THIS SUPPLEMENT WILL BE TREATED
CONFIDENTIALLY; provided, however, that the Supplement may be presented to such
parties as the Partnership deems appropriate if it is called upon to establish
that the proposed offer and sale of the Interests meet the requirements of
applicable securities laws.
Please check any of the following categories that apply to Subscriber:
----(a) A corporation, bank, savings bank, savings institution, trust company,
insurance company, building and loan association, dealer, pension fund
or pension trust, employees' profit sharing trust, other financial
institution or institutional investor, any government or political
subdivision or instrumentality thereof, whether the purchaser is
acting for itself or in some fiduciary capacity; or a partnership or
other association engaged as a substantial part of its business or
operations in purchasing or holding securities; or a trust in respect
of which a bank or trust company is trustee or co-trustee; or an
entity in which at least 90% of the equity is owned by persons
described under paragraphs (a), (b), (d) or (e); or an employee
benefit plan within the meaning of Title I of the Federal ERISA Act if
(i) the investment decision is made by a plan fiduciary as defined in
Section 3(21) of the Federal ERISA Act and such plan fiduciary is
either a bank, insurance company, registered investment adviser or an
investment adviser registered under the Federal 1940 Investment
Advisers Act, or (ii) the plan has total assets in excess of
$5,000,000, or (iii) in the case of a self-directed plan, investment
decisions are made solely by persons that are described under
paragraphs (a), (b), (d) or (e)
- -----(b) A director, executive officer or general partner of the Partnership or
a director, executive officer or general partner of a general partner
of the Partnership
- -----(c) Subscriber is purchasing at least $150,000 of Interests and
Subscriber's net worth*, or joint net worth with spouse, exceeds five
(5) times the amount Subscriber proposes to purchase
----(d) A natural person whose net worth, individually, or jointly with
spouse, exceeds $1,000,000
- -----(e) A natural person who had individually, and not jointly with spouse,
income in excess of $200,000 in each of the two most recent years and
who reasonably expects an income in excess of $200,000 in the current
year
----(f) A person that is not an individual and in which 90% of the equity
interest is owned by persons who meet either of the tests set forth in
paragraphs (d) and (e) above
Subscriber represents that the information contained herein is complete and
accurate and may be relied upon by the Partnership and agrees to notify the
Partnership if the answer to any item changes from "Yes" to "No" prior to being
admitted as a Limited Partner of the Partnership.
IN WITNESS WHEREOF, Subscriber has executed this Supplement and declares that it
is truthful and correct.
Dated: __________________________________
-------------
(Signature)
----------------------------------
(Print Name)
*"Net worth" for the purpose of this question includes only (i) cash, (ii)
securities for which market quotations are readily available, and (iii) an
unconditional obligation to pay cash or securities for which market quotations
are readily available, which obligation is to be discharged within five years of
Subscriber's purchase of Interests.
EXHIBIT IV
Prospective Purchaser Questionnaire
[To be completed by unaccredited investors]
The purpose of this Questionnaire is to determine whether you meet the standards
imposed by Regulation D promulgated under the Securities Act of 1933, since the
Units have not been and will not be registered under that Act and are being sold
in reliance upon the exemption provided by Section 4(2) of that Act. Please
complete these questions as thoroughly as possible.
(i) I have a net worth (exclusive of home, furnishings and automobiles)
either individually or jointly with my spouse of at least three times
my investment in the Partnership.
Yes No
---- ------
(ii) My gross income for each of the past two years and my projected gross
income for the current year is not less than three times my investment
in the Partnership.
Yes No
----- ------
(iii)In the space below, please provide information regarding other types
of investments which you have made during the last five years:
(Check if applicable)
Stocks Limited Partnership Interests: _________
--------------
Bonds Real Estate _________
--------------
Mutual Funds Oil and Gas _________
--------------
Commodities Equipment _________
--------------
Options Other (specify) _________
--------------
(iv) Please indicate below the highest educational degree you hold.
(v) Describe below your principal business activities during the last five
years and provide any additional information which would evidence your
ability to evaluate the merits and risks of investing in the
Partnership.
(vi) If you cannot demonstrate to the General Partner's satisfaction that
you have such knowledge and experience in financial and business
matters that you are capable of evaluating the merits and risks of
investment in the Partnership (e.g., you are a lawyer or accountant or
you have sufficient prior investment of business experience), you must
seek advice from a Purchaser Representative.
In evaluating the merits and risks of this investment, will you seek the
advice of any other person?
Yes No
---- ------
If YES, please identify below each such person and indicate his business
address and telephone number and have him complete and return one copy of the
Purchaser Representative Questionnaire accompanying this Subscription Agreement.
If YES, has your Purchaser Representative disclosed to you whether or not
any material relationship (that he has with the Partnership or any of its
affiliates) exists and whether or not he expects to receive any compensation
from the Partnership or its affiliates as a result of this sale?
Yes No
---- ----
EXHIBIT IV-1
Questionnaire for Purchaser Representatives
[For unaccredited investors only, if applicable]
Smith Barney Potomac Futures Fund L.P.
(the "Partnership")
THIS QUESTIONNAIRE IS TO BE COMPLETED AND DELIVERED TO THE GENERAL PARTNER OF
THE PARTNERSHIP PRIOR TO THE DETERMINATION BY THE GENERAL PARTNER WHETHER OFFERS
FOR SUBSCRIPTIONS FOR UNITS OF LIMITED PARTNERSHIP INTEREST MAY BE ACCEPTED
FROM:
________________________________(THE "INVESTOR").
(Fill in name of investor)
INSTRUCTIONS
This Questionnaire is being given to each person who has been designated as a
"purchaser representative" by an individual who has expressed an interest in
purchasing Units in the Partnership. The purpose of this Questionnaire is to
determine whether you are qualified to act as a purchaser representative (as
that term is defined in Regulation D under the Securities Act of 1933) since the
Units have not been and will not be registered under that Act and are being sold
in reliance upon an exemption contained in the Act.
Please contact Citigroup Managed Futures LLC, the General Partner of the
Partnership, at 399 Park Avenue - 7th floor, New York, New York 10022, telephone
number (212) 559-2011, if you have any questions in answering this
Questionnaire.
Your answers will, at all times, be kept strictly confidential. However, you
agree that, should the investor whom you are representing agree to purchase a
Unit, the Partnership may present this Questionnaire to such parties as it deems
appropriate in order to insure itself that the offer and sale of Units in the
Partnership to such investor will not result in the loss of the exemption from
registration under the Act which is being relied upon by the Partnership in
connection with the sale of the Units.
Please complete this Questionnaire as thoroughly as possible and sign, date and
return one copy to the General Partner at the above address. Attach additional
pages if necessary to fully answer any question.
If the answer to any question is "None" or "Not applicable", please so state.
Name of Purchaser
Representative:
---------------------------------------
Name of Represented Investor:
---------------------------------------
Your Business
Address:
---------------------------------------
Your Occupation:
---------------------------------------
Your Bus. Tel. No.:
---------------------------------------
1. Have you received and reviewed the Private Placement Offering Memorandum
and Disclosure Document (as supplemented from time to time) with regard to the
offering of interests in the Partnership which has previously been delivered to
the investor?
Yes ____ No ____
2(a). Describe principal business positions you have held during the last
five years, or since graduation from college, whichever is the shorter period.
Please be specific listing dates of employment and if possible provide us with
telephone numbers where previous employers can be contacted:
(b). Describe any other business, financial or investment
experience that would help you to evaluate the merits and risks of an investment
in the Partnership:
(c). Have you had experience in advising investors with
respect to similar investments in the past?
Yes ____ No____
If you have answered "yes" to this question, please describe briefly such
experience indicating amounts you have caused to be invested, number of
offerings you have reviewed and their names if possible.
3(a). Please place ONE check mark next to the space which indicates the
HIGHEST level of education you have completed; on the lines following, PLEASE
DESCRIBE IN DETAIL any business or professional education you have received,
listing names of schools, degrees received and dates of attendance.
___Completed College, awarded degree, B.A., B.S. or equivalent
___Some Postgraduate Education
___Two years of Postgraduate Training, awarded M.A. or equivalent
___Completed Postgraduate Training and received Ph.D. (list date degree
obtained and awarding school)
___Professional School, awarded J.D., or M.B.A. (list date degree obtained
and awarding school)
Other (PLEASE EXPLAIN IN DETAIL YOUR EDUCATIONAL BACKGROUND AND LIST DATES
OF ATTENDANCE AND NAMES OF SCHOOLS)
(b). List any professional licenses or registrations held by you; if none
are held please note this in writing on the space provided below:
(c). Are you registered as a broker-dealer within your state?
Yes No
---- ----
(d). Are you registered as an investment advisor in your state?
Yes No
---- -----
(e). List all memberships in professional organizations; if you belong to
no professional organizations please indicate this on the space
provided below:
4(a).In advising the investor, will you be relying in part on the
investor's own expertise in certain areas?
Yes No
--- ---
(b). If yes, please state the basis for your reliance, i.e., number of
deals you know this investor has invested in, amounts invested and the
dates of these previous investments. Please note that what is sought
here is not a reference to the general soundness of the business
judgment of the investor but rather a specific basis for relying upon
the investor's own expertise:
(c). In advising the investor, will you be relying in part on the expertise
of an additional Purchaser Representative?
Yes No
--- ---
NOTE: YOU MAY NOT RELY ON AN ADDITIONAL PURCHASER REPRESENTATIVE UNLESS EACH
ADDITIONAL PURCHASER REPRESENTATIVE HAS COMPLETED A QUESTIONNAIRE AND HAS BEEN
ACKNOWLEDGED BY THE INVESTOR TO BE HIS PURCHASER REPRESENTATIVE.
(d). If the answer to (c) is "yes," please list the name and address of any
additional Purchaser Representative:
5(a).Have you ever been convicted in a criminal proceeding, or are you the
subject of a criminal proceeding which is presently pending (except
for traffic violations)?
Yes _____ No ____
(b). Have you ever been the subject of any order, judgment or decree
enjoining, barring or suspending you from acting as an investment
advisor, broker or dealer or from engaging in any practice in
connection with the purchase or sale of any security?
Yes _______ No___
(c). If the answer to either (a) or (b) is "yes," please explain:
6(a).Do you or any of your affiliates have, with the General Partner or
any of its affiliates 1, any relationship, that a reasonable investor
might consider important, in making their decision as to whether or
not to designate you as their Purchaser Representative (i.e. a
"material" relationship within the meaning of Regulation D)?
Yes ____ No ____
(b). Is such a material relationship contemplated?
Yes ____ No___
(c). Has such a material relationship existed during the past two years?
Yes No___
NOTE: THE RECEIPT OF ANY SALES COMMISSION WITH RESPECT TO THE INVESTOR'S
PURCHASE OF UNITS CONSTITUTES COMPENSATION TO BE RECEIVED AS A RESULT OF A
MATERIAL RELATIONSHIP.
(d). If the answer to (a), (b) or (c) is "yes," please describe your
relationship to the Partnership and indicate the amount of
compensation you have received or you expect to receive as a result of
this relationship:
(e). Was the information, if any, set forth in response to 6(d) above,
disclosed in writing to the proposed investor, prior to his
acknowledgement that you are to act as his Purchaser Representative in
connection with this investment?
Yes No
---- ----
(f) Are you an affiliate, officer, director or employee of either the
Partnership or its General Partner?
Yes No
--- ----
1 The term "affiliate" of a person means a person that directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with such person.
I understand that the Partnership as well as the investor will be relying
on the accuracy and completeness of my responses to the foregoing questions, and
I hereby represent and warrant to the Partnership as follows:
(i) The answers to the above questions are complete and correct and
may be relied upon by the Partnership in determining whether the offering
in connection with which I have executed this Questionnaire is exempt from
registration under the Securities Act of 1933 and also by the investor in
determining my suitability to be his advisor in connection with his
possible investment in the Partnership;
(ii) I will notify the Partnership immediately of any material change
in any statement made herein occurring prior to the closing of the purchase
by the above-named investor of any interest in the Partnership.
(iii) If I have not checked "yes" in answer to question 6(a), 6(b) or
6(c) I have no "material relationship" as that term is defined in
Regulation D, and if I have not checked "yes" in answer to question 6(f), I
am not an affiliate, officer, director or employee of either the
Partnership or of the General Partner, or any of their affiliates, nor am I
a direct or beneficial owner of 10% or more of any class of the equity
securities of the General Partner or any of its affiliates.
(iv) I personally (or, if I have checked "yes" in answer to question
4(a) or (b) above, together with the investor or the additional Purchaser
Representative or Purchaser Representatives indicated above) have such
knowledge and experience in financial and business matters that I am
capable of evaluating the merits and risks of the investor's prospective
investment in the Partnership.
IN WITNESS WHEREOF, I have signed this Questionnaire this____ day of ____, ____.
--------------------------------
(Signature)
--------------------------------
(Print Name)