Document:

ex1016.htm

MANAGEMENT AGREEMENT

 

AGREEMENT (this “Agreement”) made as of the 31st day of December, 2014, by and among CERES MANAGED FUTURES LLC, a Delaware limited liability company (“CMF”), MORGAN STANLEY SMITH BARNEY SPECTRUM TECHNICAL L.P., a Delaware limited partnership (the “Partnership”) and SECOR CAPITAL ADVISORS, LP, a Delaware limited partnership (the “Advisor” or “SECOR”).

 

W I T N E S S E T H :

 

WHEREAS, CMF is the general partner of the Partnership, a limited partnership organized to trade, buy, sell, spread, or otherwise acquire, hold, or dispose of commodities (which may include foreign currencies, mortgage-backed securities, money market instruments, financial instruments and any other securities or items which are now, or may hereafter be, the subject of futures contract trading), domestic and foreign commodity futures contracts, commodity forward contracts, foreign exchange commitments, options on physical commodities and on futures contracts, spot (cash) commodities and currencies, and any rights pertaining thereto and securities (such as United States Treasury bills) approved by the Commodity Futures Trading Commission (the “CFTC”) for investment of customer funds, and to engage in all activities incident thereto; and

 

WHEREAS, such trading is to be conducted directly or through investment in SECOR Master Fund L.P., a Delaware limited partnership (the “Master Fund”) of which CMF is the general partner and SECOR is the advisor; and

 

WHEREAS, the Amended and Restated Limited Partnership Agreement dated as of April 2, 2007, as amended by Amendment No. 1 to the Amended and Restated Limited Partnership Agreement dated as of May 31, 2009 (the “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 CFTC and is a member of the National Futures Association (“NFA”); and

 

WHEREAS, CMF is registered as a commodity trading advisor and a commodity pool operator with the CFTC and is a member of 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 interest 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, whether directly or indirectly through the Master Fund, allocated to it from time to time by CMF in commodity interests, including commodity futures contracts, options on futures contracts and forward contracts, including foreign exchange forwards, foreign exchange swaps and non-deliverable foreign exchange forwards.  The Advisor may also engage in swap transactions and other derivative transactions on behalf of the Partnership with the prior written approval of CMF.  All such trading on behalf of the Partnership shall be in accordance with the trading strategies and trading policies set forth in the Partnership Agreement and as described in Appendix A, as applicable, 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 a variation of the program traded by SECOR Alpha Master Fund L.P. (the “Program”), as described in Appendix A attached hereto, 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 Partnership Agreement 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 result in losses.

 

(b) CMF acknowledges receipt of the description of the Program, attached hereto as Appendix A.  All trades made by the Advisor for the account of the Partnership, whether directly or indirectly through the Master Fund, 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 original, fax copy or email copy) of CMF, may direct any and 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, independent floor broker or swap dealer and any give-up or floor brokerage fees are approved in advance by CMF.  Moreover, the Advisor, with the prior written permission (by original, fax copy or email copy) of CMF, may enter into swaps and other derivative transactions permitted under Section 1(a) of this Agreement with such swap dealer or swap dealers as it may choose for execution with instructions to give-up the trades to the broker designated by CMF provided that the swap dealer and any give-up or other 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 (via EGUS or by original, fax copy or email copy).

 

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(c) The initial allocation of the Partnership’s assets to the Advisor shall be made to the Program, as described in Appendix A attached hereto, provided that CMF, the Partnership and the Advisor agree that for so long as the Partnership trades through the Master Fund the amount of leverage applied to the assets of the Partnership allocated to the Advisor by CMF shall be in accordance with the terms of the agreement by and among CMF, the Master Fund and the Advisor, dated as of August 1, 2013, as such agreement may be amended from time to time.  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, in its sole discretion, 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 cause the description of the trading strategy or methods described in Appendix A to be materially inaccurate.  Further, the Advisor will provide the Partnership with a current list of all commodity interests to be traded for the Partnership’s account and the Advisor 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”), members, 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 CMF’s 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 undertakes to handle such trading advice, and any data or information from the Advisor received in fulfillment of this Agreement in a confidential manner, including, but not limited to, the Advisor’s proprietary trading programs, trading data, trading instructions, trade execution, research databases, computer software, systematic methodologies and the systematic trading approach (including positions established thereto, whether for the Partnership or other clients of the Advisor), and all other related information (the “Confidential Information”).  Subject to CMF’s and the Partnership’s right to comply with any requirement or demand of any self-regulatory, regulatory, judicial or taxing authority having jurisdiction over either of them, the Partnership and CMF shall take all reasonable steps to protect the Confidential Information disclosed pursuant to the provisions of this Agreement, using the same standard of care that the Partnership and CMF apply to safeguard their own respective proprietary, secret or confidential information and to store and handle the Confidential Information in such a way as to prevent any unauthorized disclosure thereof.  The Partnership shall notify the Advisor within a reasonable time upon discovery of any unauthorized use of, access to, or disclosure of Confidential Information, and agrees to cooperate with reasonable requests by the Advisor to help regain possession of such Confidential Information and to prevent its further unauthorized use, disclosure or access. Notwithstanding the foregoing, each of the Partnership and CMF may provide the Confidential Information to its affiliates and each of their respective officers, directors, employees, counsel, auditors, consultants, administrators, agents and service providers who need to know such information in connection with their duties to the Partnership or CMF, as the case may be; provided, that such persons are informed of the confidential nature of such information and agree to keep it confidential as provided herein.  The term “Confidential Information” does not include any information which (i) is publicly available other than as a result of unauthorized disclosure by the Partnership, (ii) is available to the Partnership on a non-confidential basis from a source other than the Advisor, (iii) is independently developed by the Partnership or on its behalf without any reference to the Confidential Information or (iv) is provided by the Advisor and is included in investor materials which have been reviewed and approved by the Advisor.

 

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(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 last day of a calendar 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 business days’ prior notice to the Advisor of any reallocations or liquidations.

 

(g)  The Advisor shall assume financial responsibility for any errors committed or caused by it in transmitting orders for the purchase or sale of commodity interests for the Partnership’s account including payment to the brokers of the floor brokerage commissions, exchange, NFA fees, and other transaction charges and give-up charges incurred by the brokers on such trades.  The Advisor’s errors shall include, but not be limited to, inputting improper trading signals or communicating incorrect orders to the commodity brokers.  The Advisor shall have an affirmative obligation to promptly notify CMF in accordance with the provisions of Section 8(a)(iii) of any errors with respect to the account, and the Advisor shall use its best efforts to identify and promptly notify CMF of any order or trade which the Advisor reasonably believes was not executed in accordance with its instructions to any broker utilized to execute orders for the Partnership.

 

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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, CMF, 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 (the “Incentive Fee”) and (ii) a monthly fee for professional management services equal to 1/6 of 1% (2% per year) of the Net Assets of the Partnership allocated to the Advisor as of the opening of business on the first day of each calendar month commencing with the month in which the Partnership begins to receive trading advice from the Advisor pursuant to this Agreement (the “Management Fee”).

 

(b)  “Net Assets” shall have the meaning set forth in Section 7(d)(1) of the Partnership Agreement and, unless the Advisor consents in writing, 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, administrative fees or incentive fees accrued or payable as of the date of such determination.

 

(c)  “New Trading Profits” shall mean the excess, if any, of Net Assets managed by the Advisor at the end of the fiscal period over Net Assets managed by the Advisor at the end of the highest previous fiscal period or Net Assets allocated to the Advisor at the date trading commences by the Advisor for the Partnership, whichever is higher, and as further adjusted to eliminate the effect on Net Assets resulting from 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 shall be attributed to the Advisor based on the Advisor’s proportionate share of Net Assets.  Ongoing expenses shall not include expenses of litigation not involving the activities of the Advisor on behalf 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 fee shall be based on New Trading Profits (if any) earned from the commencement of trading 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.

 

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(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 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 Section 3 shall survive the termination of this Agreement.

 

4.  RIGHT TO ENGAGE IN OTHER ACTIVITIES.  (a)  Except as otherwise provided herein, 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 members may render advisory, consulting and management services to other clients and accounts. The Advisor and its officers, directors, employees and members 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 for the Partnership 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 in writing if the Partnership’s positions are included in an aggregate amount which exceeds the applicable speculative position limit.  The Advisor agrees that, if its trading recommendations are altered because of the application of any speculative position limits, it will not modify the trading instructions with respect to the Partnership’s account in such manner as to affect the Partnership substantially disproportionately as compared with the Advisor’s other accounts.  The Advisor further represents, warrants and agrees that under no circumstances will it knowingly or deliberately use trading programs, 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 programs, strategies or methods may be utilized for differing sizes of accounts, accounts with different trading policies or risk parameters, accounts experiencing differing inflows or outflows of equity, accounts that commence trading at different times, accounts that 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.

 

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(c) CMF and the Partnership each acknowledge and agree that the Advisor and/or its officers, employees, directors and members presently act, and 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, if any, as shall be reasonably requested in writing (including via email) 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 December 31, 2015 (the “Initial Termination Date”).  If this Agreement is not terminated on the Initial Termination Date, as provided for herein, then, this Agreement shall automatically renew for an additional one-year period and shall continue to renew for additional one-year periods until this Agreement is otherwise terminated, as provided for herein.  At any time during the term of this Agreement, CMF may terminate this Agreement upon 5 days’ notice to the Advisor. At any time during the term of this Agreement, CMF may elect to immediately terminate this Agreement  if (i) the Net Asset Value per unit shall decline as of the close of business on any day to $4.00 or less; (ii) the Net Assets allocated to the Advisor (adjusted for redemptions, distributions, withdrawals or reallocations, if any) decline by 50% or more as of the end of a trading day from such Net Assets’ previous highest value; (iii) limited partners owning at least 50% of the outstanding units of the Partnership shall vote to require CMF to terminate this Agreement; (iv) the Advisor fails to comply with the terms of this Agreement in any material respect; (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; (vii) the Advisor fails to conform to the trading policies set forth in the Partnership Agreement as it may be changed from time to time; (viii) the Advisor merges, consolidates with another entity, sells a substantial portion of its assets, or becomes bankrupt or insolvent; (ix) Raymond Iwanowski 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; (x) the Advisor’s registration as a commodity trading advisor with the CFTC or its membership in NFA or any other regulatory authority, is terminated or suspended; or (xi) CMF reasonably believes that the Advisor has or may contribute to any material operational, business or reputational risk to CMF or CMF’s affiliates.  This Agreement will immediately terminate upon dissolution of the Partnership or upon cessation of trading by the Partnership prior to dissolution.

 

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(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 Partnership Agreement are changed in such manner that the Advisor reasonably believes will adversely affect the performance of its trading strategies; (ii) at any time after December 31, 2015; or (iii) in the event that CMF or the 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 NFA is terminated or suspended.

 

(c) Except as otherwise provided in this Agreement, any termination of this Agreement in accordance with this Section 5 shall be without penalty or liability to any party, except for any fees due to the Advisor pursuant to Section 3 hereof.

 

(d) Except as otherwise provided in this Agreement, the termination of this Agreement shall not affect the settlement of any transactions made in good faith and pending at the date of termination.

 

(e) In the event of any termination of this Agreement, the Advisor shall cease to perform any and all of its duties and obligations under this Agreement, subject to Sections 3 and 6 of this Agreement.

 

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 subsection (a)(iii) of this Section 6, indemnify and hold harmless the Advisor against any loss, liability, damage, fine, penalty obligation, cost, expense (including, without limitation, attorneys’ and accountants’ fees, collection fees, court costs and other legal expenses), judgments and awards and amounts paid in settlement actually and reasonably incurred by it in connection with such action, suit, or proceeding (collectively, “Losses”) 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, bad faith, recklessness, 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 14 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.

 

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(ii) Without limiting subsection (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 subsection (i) above, or in defense of any claim, issue or matter therein, CMF shall indemnify the Advisor against the Losses incurred by it in connection therewith.

 

(iii) Any indemnification under subsection (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 subsection (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 Losses, incurred in connection therewith.

 

(v) As used in this Section 6(a), the term “Advisor” shall include the Advisor, its affiliates, principals, officers, directors, members, partners 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 Losses reasonably incurred by them (A) as a result of the material breach of any representations and warranties or covenants 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 (i) there has been a final judicial or regulatory determination, or a written opinion of an arbitrator pursuant to Section 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)), or (ii) there has been a settlement of any action or proceeding with the Advisor’s prior written consent.

 

(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, members 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 Losses incurred in connection therewith.

 

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(iii) Any indemnification under subsection (i) above, unless ordered by a court or administrative forum, shall be made by the Advisor 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 failed to met the applicable standard of conduct set forth in subsection (i) above.  Such independent legal counsel shall be selected by the Advisor in a timely manner, subject to CMF’s approval, which approval shall not be unreasonably withheld.  CMF will be deemed to have approved the Advisor’s selection unless CMF notifies the Advisor in writing, received by the Advisor within five business days of the Advisor’s telecopying to CMF of the notice of the Advisor’s selection, that CMF does not approve the selection.

 

(c) In the event that a person entitled to indemnification under this Section 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 Losses 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 Section 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 or delayed, of the party obligated to indemnify such party.

 

(e) The provisions of this Section 6 shall survive the termination of this Agreement.

 

7.  REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

 

(a) The Advisor represents and warrants that:

 

(i)  All information with respect to the Advisor and its principals and the trading performance of any of them that has been provided to CMF, including, without limitation, the description of the Program contained in Appendix A, is complete and accurate in all material respects and such information does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements and information not misleading.

 

(ii)  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 NFA, and is in compliance with any 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.

 

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(iii)  The Advisor is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and has full limited partnership power and authority to enter into this Agreement and to provide the services required of it hereunder.

 

(iv)  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.

 

(v)  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.

 

(vi)  At any time during the term of this Agreement that an offering memorandum or 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 promptly provide the Partnership with such information as shall be necessary so that, as to the Advisor and its principals, such offering memorandum or prospectus is accurate.

 

(b) CMF represents and warrants for itself and the Partnership that:

 

(i) CMF 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.

 

(ii) CMF and the Partnership have the capacity and authority to enter into this Agreement on behalf of the Partnership.

 

(iii) 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.

 

(iv) 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.

 

(v) CMF is registered as a commodity pool operator and is a member of NFA, and it will maintain and renew such registration and membership during the term of this Agreement.

 

(vi) The Partnership is a “qualified eligible person” as defined in Rule 4.7 under the Commodity Exchange Act.

 

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(vii) CMF shall serve as the commodity pool operator of the Partnership and the Master Fund and shall claim an exemption pursuant to Rule 4.7 with respect to the Master Fund.

 

(viii) The Partnership is a limited partnership duly organized and validly existing under the laws of the State of Delaware and has full limited partnership 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 laws, including rules and regulations of the CFTC, NFA and/or the commodity exchange on which any particular transaction is executed.

 

(ii) The Advisor will promptly notify CMF of the commencement of any investigation, suit, action or proceeding involving the Advisor or any of its affiliates, officers, members, employees, agents or representatives; regardless of whether such investigation, suit, action or proceeding also involves CMF.  The Advisor will provide CMF with copies of any correspondence (including, but not limited to, any notice or correspondence regarding the violation, or potential violation, of position limits) from or to the CFTC, NFA or any commodity exchange in connection with an investigation or audit of the Advisor’s business activities.

 

(iii) In the placement of orders for the Partnership’s account and for the accounts of any other client, the Advisor will utilize a pre-determined, systematic, fair and reasonable order entry system, which shall, on an overall basis, be no less favorable to the Partnership than to any other account managed by the Advisor.  The Advisor acknowledges its obligation to review the Partnership’s positions, prices and equity in the account managed by the Advisor daily and within two business days to notify, in writing, the broker and CMF and the Partnership’s brokers of (A) any error committed by the Advisor or its principals or employees; (B) any trade which the Advisor believes was not executed in accordance with its instructions; and (C) any discrepancy with a value of $10,000 or more (due to differences in the positions, prices or equity in the account) between its records and the information reported on the account’s daily and monthly broker statements.

 

(iv)  The Advisor will maintain a net worth of not less than $1,000,000 during the term of this Agreement.

 

(v)  The Advisor will use commercially reasonable efforts to close out all futures positions prior to any applicable delivery period, and will use commercially reasonable efforts to avoid causing the Partnership to take delivery of any commodity.

 

(vi)  CMF shall have the right for a period of 24 months following the date of this Agreement to allocate up to $150,000,000 in assets to the Advisor’s Program on behalf of any collective investment vehicle or account operated or managed by CMF and the Advisor represents that such allocation will not exceed the capacity limits of the Program.

 

12

  

  

  

 

(b) CMF agrees for itself and the Partnership that:

 

(i) CMF and the Partnership will comply with all applicable laws, including rules and regulations of the CFTC, NFA 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 or the selling agents for the Partnership have policies, procedures, and internal controls in place that are reasonably designed to comply with applicable anti-money laundering laws, rules and regulations, including applicable provisions of the USA PATRIOT Act.  CMF or the selling agents for the Partnership have Customer Identification Programs (“CIP”), which require the performance of CIP due diligence in accordance with applicable USA PATRIOT Act requirements and regulatory guidance.  CMF or the selling agents for the Partnership also have policies, procedures, and internal controls in place that are reasonably designed to comply with regulations and economic sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control.  CMF or the selling agents for the Partnership has policies and procedures in place reasonably designed to comply with Section 312 of the USA PATRIOT Act, including processes reasonably designed to identify clients that may be senior foreign political figures1, in accordance with applicable requirements and regulatory guidance, and to conduct enhanced scrutiny on such clients where required under applicable law.  In addition, CMF or the selling agents for the Partnership has policies and procedures in place reasonably designed to prohibit accounts for foreign shell banks2 in compliance with Sections 313 & 319 of the USA PATRIOT Act.

 

9.  COMPLETE AGREEMENT.  This Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof.

 

13

  

  

  

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 effective upon actual receipt and shall be made either by electronic mail (email) copy or 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 or to the Partnership:

 

Ceres Managed Futures LLC

522 Fifth Avenue

New York, New York  10036

Attention:  Patrick T. Egan

email:  patrick.egan@morganstanley.com

 

If to the Advisor:

 

SECOR Capital Advisors, LP

One Penn Plaza, Suite 4625

New York, New York 10119

Attention:  Sanjay Malhotra

email:   smalhotra@secor-am.com

 

with a copy to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: David Nissenbaum

email:  david.nissenbaum@srz.com

 

 

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 NFA or, if NFA 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, and further provided, that any such arbitration shall occur within the Borough of Manhattan in New York City.  Judgment upon any award made by the arbitrator may be entered in any court of competent jurisdiction.

 

14

  

  

  

15.           NO THIRD PARTY BENEFICIARIES.  There are no third  party beneficiaries to this Agreement, except that certain persons not parties to this Agreement may have rights under Section 6 hereof.

 

16.           COUNTERPART ORIGINALS.  This Agreement may be executed in any number of counterparts, including via facsimile or email, each of which is an original and all of which when taken together evidence the same agreement.

 

 

[Signature Page Follows]

 

15

  

  

  

  

1 A "senior foreign political figure" is defined as a current or former senior official in the executive, legislative, administrative, military or judicial branches of a non-U.S. government (whether elected or not), a current or former senior official of a major non-U.S. political party, or a current or former senior executive of a non-U.S. government-owned commercial enterprise.  In addition, a "senior foreign political figure" includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.  For purposes of this definition, a "senior official" or "senior executive" means an individual with substantial authority over policy, operations, or the use of government-owned resources. An "immediate family member" of a senior foreign political figure means spouses, parents, siblings, children and a spouse's parents and siblings. A "close associate" of a senior foreign political figure means a person who is widely and publicly known (or is actually known) to be a close associate of a senior foreign political figure.

 

  

2 The term shell bank means a bank that does not maintain a physical presence in any country and is not subject to inspection by a banking authority.  In addition, a shell bank generally does not employ individuals or maintain operating records.

 

  

  

  

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION.  THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE.  CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.

 

IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of the undersigned as of the day and year first above written.

 

 

CERES MANAGED FUTURES LLC

 

	
  

	
By

	
_/s/ Patrick T. Egan_________

 

	
  

	
Patrick T. Egan

 

	
  

	
President and Director

 

 

MORGAN STANLEY SMITH BARNEY SPECTRUM TECHNICAL L.P.

 

	
  

	
By:

	
Ceres Managed Futures LLC

 

	
  

	
(General Partner)

 

	
  

	
By

	
_/s/ Patrick T. Egan_________

 

	
  

	
Patrick T. Egan

 

	
  

	
President and Director

 

 

SECOR CAPITAL ADVISORS, LP

 

	
By

	
_/s/ Raymond Iwanowski

	 

	
  

	
Name: Raymond Iwanowski

Title: Chief Executive Officer

16

 

  

  

  

APPENDIX A

 

 

SECOR Alpha Master Fund L.P. (the “Alpha Fund”) is a multi-strategy hedge fund that invests across a diverse set of asset classes, geographies, factors, themes, and across different time horizons. The investment approach is to quantify and systematize the implementation of investment ideas in order to capture market inefficiencies or risk premia. The Advisor employs statistical techniques and empirical analysis to determine whether observed or conjectured alpha opportunities are real and, more importantly, likely to be sustained in the future. The following list of sub-strategies represent the models, a subset of strategies in the Alpha Fund, will be traded in the Partnership’s portfolio. The full list of instruments to be traded in the portfolio is also listed below.

 

A-2

  

  

 

  

A2

  

  

  

 

 

A2EX-10.1

 Exhibit 10.1 

TEMPORARY COMMITMENT INCREASE AGREEMENT 

THIS TEMPORARY COMMITMENT INCREASE AGREEMENT (this “Agreement”) is made as of March 25, 2015, by and between
WALKER & DUNLOP, LLC (the “Borrower”), and BANK OF AMERICA, N.A., as credit agent (in such capacity, the “Credit Agent”), and as the sole lender as of the date hereof under the Loan Agreement (as hereafter
defined) (in such capacity, the “Lender”). 
 R E C I T A L S 

The Borrower, the Credit Agent, and the Lender are parties to, among other documents, instruments, and agreements, that certain Warehousing
Credit and Security Agreement dated as of September 4, 2012 (as amended, supplemented, or otherwise modified to the date hereof, the “Loan Agreement”). This Agreement defines certain capitalized terms throughout the body of
this Agreement, and certain of such capitalized terms are used prior to being defined; capitalized terms used which are not defined herein have the meanings specified therefor in the Loan Agreement. 

The Borrower has requested that the Lender agree to temporarily increase the Lender’s Warehousing Commitment Amount in order to provide
additional borrowing availability under the Loan Agreement for use by Borrower toward financing the origination of the portfolio of Mortgage Loans described on Exhibit A attached hereto (the “Specified Portfolio”) for
purchase by Freddie Mac, and the Lender has agreed to such request, on and subject to the terms and conditions set forth in this Agreement. 

Accordingly, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Credit Agent
and the Lender agree as follows: 
 1. Temporary Increase in Warehousing Commitment Amount. 

(a) Subject to the terms and conditions of this Agreement and applicable provisions of the Loan Agreement, on the Specified
Portfolio Closing Date, provided that such date is at least one (1) Business Day, and no more than five (5) Business Days, after the date of this Agreement: 

(i) the Lender’s Warehousing Commitment Amount, and, accordingly, the Warehousing Credit Limit, shall be temporarily
increased for the period commencing on, and including, the Specified Portfolio Closing Date to, and including, subject to the payment required pursuant to Section 1(c) of this Agreement, the Temporary Commitment Increase Termination Date, by
$670,000,000.00 (so that, during the Temporary Commitment Increase Period, the Lender’s Warehousing Commitment Amount and the Warehousing Credit Limit will be $1,095,000,000.00) (referred to herein as, the “Temporary Warehousing
Commitment Increase”), to provide additional borrowing availability under the Loan Agreement solely to enable the Borrower to finance the origination of the Specified Portfolio, while also maintaining borrowing availability under the Loan
Agreement to finance the origination of Pledged Mortgage Loans in the ordinary course of business. On the Temporary Commitment Increase Termination Date, 

 
automatically, without notice or demand, the Warehousing Credit Limit and the Lender’s Warehousing Commitment Amount shall be restored to $425,000,000.00; and 

(ii) the Lender shall make a Warehousing Advance to Borrower (the “Specified Portfolio Advance”), based on a
Warehousing Advance Request submitted by the Borrower, by disbursing the proceeds thereof either in escrow to the title company responsible for the closing and recording of the applicable Mortgages, pursuant to a written escrow agreement acceptable
to the Credit Agent, or to the Operating Account, as may be requested by the Borrower at time it provides the Warehousing Advance Request to the Credit Agent. The Temporary Warehousing Commitment Increase may be used only for the Specified Portfolio
Advance, and the Specified Portfolio Advance may be used only to finance the origination of the Specified Portfolio. No portion of the Specified Portfolio Advance which is repaid may be reborrowed. 

(b) Other than to reflect the temporary increase in the Lender’s Warehousing Commitment Amount and in the Warehousing
Credit Limit and except as expressly set forth in this Section 1, no provisions of the Loan Agreement applicable to Warehousing Advances or the Warehousing Commitment shall be affected, including, without limitation, as to the conditions for
making Warehousing Advances, the accrual and payment of interest, and the payment and repayment of the principal amount of Warehousing Advances. 

(c) By 4:00 p.m. (Boston, Massachusetts time) on the Temporary Commitment Increase Termination Date, the Borrower shall,
without notice or demand, make a principal payment to the Credit Agent (with accrued and unpaid interest thereon), for the account of the Lender, in an amount as shall be necessary — together with any other prepayments of the Loan made on such
date — to reduce the outstanding principal amount of the Loan to an amount that shall not then exceed the maximum principal balance of the Loan then permitted to be outstanding under the Loan Agreement, after giving effect to the expiration of
the Temporary Commitment Increase Period and the resulting reduction in the Lender’s Warehousing Commitment Amount and in the Warehousing Credit Limit. The failure of the Borrower to comply with the foregoing provision shall constitute an
immediate Event of Default without notice or demand by the Credit Agent or the Lender. 
 (d) To evidence the Temporary
Warehousing Commitment Increase, the Borrower shall execute and deliver to the Lender a promissory note payable to the order of the Lender in the stated principal amount of $670,000,000.00 to be dated the date of this Agreement (the
“Temporary Commitment Increase Note”). 
 (e) As used herein: 

(i) The term “Temporary Commitment Increase Maturity Date” means 4:00 p.m. (Boston, Massachusetts time) on the
day that is fifty (50) days after the day on which the Lender makes the Specified Portfolio Advance (or, if such fiftieth (50th) day is not a Business Day, then the immediately preceding
Business Day). 

  
 -2- 

 (ii) The term “Specified Portfolio Closing Date” means the date
on which the Borrower’s origination of the Specified Portfolio closes and funds. 
 (iii) The term “Temporary
Commitment Increase Termination Date” means the earliest to occur of (A) the date on which Freddie Mac pays the Borrower the purchase price for the Specified Portfolio pursuant to Freddie Mac’s Purchase Commitment therefor (which
payment shall be made by Freddie Mac directly to the Cash Collateral Account in accordance with applicable provisions of the Loan Agreement), (B) the Temporary Commitment Increase Maturity Date, (C) an Event of Default, and (D) the
termination of the Warehousing Commitment. 
 2. Acknowledgments. The Borrower acknowledges, confirms and agrees that: 

(a) This Agreement, the Fee Letter and the Temporary Commitment Increase Note are Loan Documents. 

(b) All references in any Loan Document to the Borrower’s obligations to the Credit Agent and the Lenders shall include
the Obligations as affected by this Agreement and the Temporary Commitment Increase Note. 
 (c) Except as provided herein,
the terms and conditions of the Loan Agreement and the other Loan Documents remain in full force and effect, and the Borrower hereby ratifies, confirms and reaffirms all and singular of the terms and conditions of the Loan Agreement and the other
Loan Documents. 
 (d) The Borrower does not have any offsets, defenses, claims, counterclaims or causes of action of any
kind or nature against the Credit Agent or any Lender with respect to any of its liabilities and obligations to the Credit Agent or any Lender, and, in any event, the Borrower specifically waives, releases, and forever relinquishes all claims,
demands, obligations, liabilities, and causes of action of whatever kind or nature, whether known or unknown, at law or in equity, which it has or may have, from the beginning of the world to both the date hereof and the Effective Date, against the
Credit Agent, or any Lender or their respective current or former Affiliates, officers, directors, employees, agents, attorneys, independent contractors, and predecessors, together with their successors and assigns, directly or indirectly arising
out of or based upon any matter related to the Loan, the Obligations, the Loan Agreement, any other Loan Documents, or the administration thereof. 

(e) The Borrower shall promptly pay upon receipt of an invoice or statement therefor the reasonable attorneys’ fees and
expenses and disbursements incurred by the Credit Agent and the Lender in connection with this Agreement and any prior matters involving the Loan. 

  
 -3- 

 3. Representations and Warranties. The Borrower hereby represents and warrants to the
Credit Agent and the Lenders as follows: 
 (a) No Default or Event of Default exists as of the date hereof, nor will a
Default or Event of Default exist as of the Effective Date. 
 (b) The representations and warranties made by the Borrower in
the Loan Agreement and the other Loan Documents are true and correct as of the date hereof, and will be true and correct as of the Effective Date, except as to (i) matters which speak to a specific date, and (ii) changes in the ordinary
course to the extent permitted and contemplated by the Loan Agreement. 
 (c) The Borrower has the power and authority and
legal right to execute, deliver and perform this Agreement, the Fee Letter, the Temporary Commitment Increase Note, and any other documents to be executed and delivered by the Borrower in connection with this Agreement (this Agreement, the Fee
Letter, the Temporary Commitment Increase Note, and such other documents, collectively, the “Temporary Commitment Increase Documents”), has taken all necessary action to authorize the execution, delivery, and performance of the
Temporary Commitment Increase Documents, and the person executing and delivering on behalf of the Borrower this Agreement is, and the other Temporary Commitment Increase Documents will be, duly authorized to do so. 

(d) This Agreement has been, and the other Temporary Commitment Increase Documents will be, duly executed and delivered by the
Borrower, and this Agreement constitutes, and each other Temporary Commitment Increase Documents will constitute, the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to the
effect of applicable bankruptcy and other similar laws affecting the rights of creditors generally and the effect of equitable principles whether applied in an action at law or a suit in equity. 

4. Conditions Precedent. This Agreement shall be effective only upon the satisfaction by the Borrower of, or written waiver by the
Credit Agent in its sole discretion of, the following conditions and any other conditions set forth in this Agreement, by no later than 2:00 p.m. (Boston, Massachusetts time) on the date of this Agreement (with the time and date, if at all, on which
such conditions have been satisfied or waived in writing being referred to herein as, the “Effective Date”), failing which this Agreement shall be null and void at the option of the Credit Agent: 

(a) The Borrower shall have delivered to the Credit Agent the following: 

(i) This Agreement, duly executed and delivered by the parties hereto. 

(ii) The Temporary Commitment Increase Note, duly executed and delivered to the Lender by the Borrower. 

(iii) A fee letter (the “Fee Letter”) setting forth certain fees to be paid by the Borrower, duly executed by
the Borrower. 

  
 -4- 

 (iv) A certificate of the secretary of the Borrower as to (A) the
Borrower’s organizational documents (or that there have been no changes to them since November 3, 2014), (B) all necessary consents, approvals, resolutions and the like with respect to the authorization of the Borrower to enter into,
execute and deliver, and perform its obligations under the Temporary Commitment Increase Documents, and (C) the incumbency and authority of the individual executing the Temporary Commitment Increase Documents in the name of and on behalf of the
Borrower. 
 (v) A certificate of legal existence and good standing with respect to the Borrower issued by the Secretary of
State of Delaware dated as of a date which is not more that than thirty (30) days prior to the Effective Date. 
 (vi)
An opinion of counsel to the Borrower in form and substance satisfactory to the Credit Agent. 
 (vii) Such other documents
as the Credit Agent or any Lender reasonably may require, duly executed and delivered. 
 (b) All actions on the part of the
Borrower necessary for the valid execution, delivery and performance by the Borrower of the Temporary Commitment Increase Documents shall have been duly and effectively taken. 

(c) No Default or Event of Default shall have occurred and be continuing. 

(d) The representations and warranties of the Borrower contained in this Agreement or in any other Temporary Commitment
Increase Document (i) shall have been true and correct in all material respects on the date that such representations and warranties were made (except for those which expressly relate to an earlier date, which shall be true and correct as of
such earlier date), and (ii) shall be true and correct in all material respects on the Effective Date as if made on and as of such date (except for those which expressly relate to an earlier date, which shall be true and correct as of such
earlier date). 
 (e) The Borrower shall have paid to the Credit Agent all fees due on or before the Effective Date pursuant
to the Fee Letter. 
 5. Miscellaneous. 

(a) This Agreement shall be governed in accordance with the internal laws of the Commonwealth of Massachusetts (without regard
to conflict of laws principles) as an instrument under seal. 
 (b) This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. Signatures transmitted electronically (including by fax or e-mail) shall have the same
legal effect as originals, but each party nevertheless shall deliver originally signed counterparts of this Agreement to each other party, upon request. 

  
 -5- 

 (c) This Agreement, together with the other Temporary Commitment Increase
Documents and applicable provisions of the Loan Documents, constitutes the complete agreement among the Borrower, the Credit Agent, and the Lender with respect to the subject matter thereof and supersedes all prior agreements and understanding
relating to the subject matter of this Agreement, and may not be modified, altered, or amended except in accordance with the Loan Agreement. 

(d) Time is of the essence with respect to all aspects this Agreement. 

(e) This Agreement is confidential, is not to be disclosed by the Borrower or any affiliate thereof to any person other than
the Borrower’s accountants, investors, attorneys, other advisors and individuals as may be necessary in connection with Warehousing Advances, and then only on a confidential basis or as required by law. 

[Remainder of page intentionally blank] 

  
 -6- 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as a sealed
instrument as of the date first above written. 
  

			
	WALKER & DUNLOP, LLC
		
	By		 /s/ Stephen P. Theobald

	Name:		Stephen P. Theobald
	Title:		Executive Vice President, Chief Financial Officer & Treasurer
	
	BANK OF AMERICA, N.A., as Credit Agent and Lender
		
	By		 /s/ Jane E. Huntington

	Name:		Jane E. Huntington
	Title:		Senior Vice President

 Signature page to Temporary Commitment Increase Agreement 

 EXHIBIT A 

Specified Portfolio 
 That
certain portfolio of 52 mortgage loans secured by Seniors Facilities, to be made by the Borrower to an affiliate of New Senior Investment Group, Inc., in the aggregate initial principal amount of $670,000,000.00, as described in more detail by the
Borrower to the Lender. 
 Exhibit A to Temporary Commitment Increase Agreement

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