Exhibit
10.3


MANAGEMENT AGREEMENT


AGREEMENT made as of
the 30th day of September, 2003 among CITIGROUP MANAGED FUTURES LLC, a
Delaware limited liability company ("CMF" or
the "General Partner"), CITIGROUP DIVERSIFIED
FUTURES FUND L.P., a New York limited partnership (the
"Partnership") and CAPITAL FUND MANAGEMENT
SA, a French corporation (the "Advisor").


W I T N E S S E T H:


WHEREAS, CMF is the general
partner of Citigroup Diversified Futures Fund L.P., a limited
partnership organized for the purpose of speculative trading of
commodity interests, including futures contracts, options, swaps 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

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 from time to time by the General Partner in commodity
interests, including commodity futures contracts, options, swaps 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 Prospectus and Disclosure Document to
be dated on or about November 1, 2003 (the
"Prospectus"), 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 Discus 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 Prospectus without the prior written
consent of the Partnership given by CMF. 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 as of June 30, 2003, as filed with the NFA and CFTC. 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 

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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
Advisor's 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 description of the Program in the
Prospectus 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
Prospectus. 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
shall not be 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, 

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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 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.

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 as of
the end of each calendar quarter 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
December 3, 2002, 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 calendar quarter over Net
Assets managed by the Advisor at the end of the highest previous
calendar 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 calendar quarter, decreased by interest or other
income, not directly related to trading activity, earned on the
Partnership's assets during the calendar quarter, whether the
assets are held separately or in margin accounts. Ongoing expenses
shall be attributed to the Advisor based on the Advisor's
proportionate share of Net Assets as of the end of each month. Ongoing
expenses above shall not include expenses of litigation not involving
the activities of the Advisor on behalf of the Partnership. Ongoing
expenses shall not include initial offering and organizational expenses
of the Partnership. No incentive fee shall be paid until the end of the
first full calendar quarter of the Advisor's trading for the
Partnership, which fee shall be based on New Trading Profits earned
from the commencement of trading operations by the Advisor on behalf of
the Partnership through the end of the first full calendar quarter of
such trading. 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 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 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


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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 and the Partnership acknowledge 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 basic trading strategies 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 advisor.

5.    TERM.    (a) This Agreement shall continue in
effect until June 30, 2004. 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 $400 or less; (ii) the Net Assets
allocated to the Advisor (adjusted for redemptions, distributions,
withdrawals or reallocations, if any) decline by 50% or more


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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 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; or (vi) CMF 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, 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)
Jean-Pierre Aguilar 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 Prospectus
are changed in such manner that the Advisor reasonably believes will
adversely affect the performance of its trading strategies; (ii) after
June 30, 2004; 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 or 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
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.

(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 (a)(i) above, or
in defense of any claim, issue or matter therein, CMF shall indemnify
the Advisor against the expenses (including, without limitation,
attorneys' and accountants' fees) actually and reasonably
incurred by it in connection therewith.

(ii) 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 

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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.

(iii) 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.

(iv) As used in this Paragraph 6(a), the
term "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 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.

(a) The Advisor represents and warrants
that:

(i) All references to the Advisor and its principals in
the Prospectus will, after review and approval by the Advisor, be
accurate in all material respects and as to them the Prospectus will
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 with respect to Table B and other pro forma or
hypothetical performance information in the Prospectus, if any, this
representation and warranty extends only to the underlying data made
available by the Advisor for the preparation thereof and not to any
hypothetical or pro forma adjustments. Subject to such exception, all
references to the 

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Advisor and its principals in the Prospectus
will, after review and approval of such references by the Advisor prior
to the use of such Prospectus in connection with the offering of the
Partnership's units, be accurate in all material respects.

(ii) Without limiting the foregoing, the information with respect to
the Advisor set forth in the actual performance tables in the
Prospectus is, as disclosed in the Prospectus, constructed from 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 corporation duly organized, validly existing
and in good standing under the laws of France and has full corporate
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 CMF 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)
CMF represents and warrants for itself and the Partnership that:

(i) The Prospectus (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 Prospectus, made in
reliance upon, and in conformity with, information furnished to CMF by
or on behalf of the Advisor expressly for use in the Prospectus (it
being understood that the hypothetical and pro forma adjustments in the
Prospectus, if any, were not 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.

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(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; 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.

(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.

(iii) CMF will be responsible for compliance with the
USA Patriot Act and related anti-money-laundering regulations with
respect to the Partnership and its limited partners.

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 CMF:

Citigroup Managed Futures LLC
399
Park Avenue
 7th Floor
New York, New York 10022
Attention:
Mr. David J. Vogel

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If to the Advisor:

Capital Fund Management SA
109 111 Rue V.
Hugo
92532 Levallois, France
 Attention: Jean-Pierre
Aguilar

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.

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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/
David J.
Vogel
	 		 		David
J. Vogel
President and Director
	 		CITIGROUP DIVERSIFIED
FUTURES FUND L. P.
	 		By:		Citigroup Managed
Futures LLC
 (General Partner)
	 		By		/s/
David J.
Vogel
	 		 		David
J. Vogel
President and Director
	 		CAPITAL FUND
MANAGEMENT SA
	 		By		/s/
Jacques
Sauliere
	 		 		Jacques
Sauliere
Managing
Director
	




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