SMITH BARNEY PRINCIPAL PLUS FUTURES FUND LP
MANAGEMENT AGREEMENT
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<FILENAME>tucson.txt
<DESCRIPTION>MANAGEMENT AGREEMENT
<TEXT>
                             MANAGEMENT AGREEMENT

                  AGREEMENT made as of the 6th day of March, 2001 among SMITH
BARNEY FUTURES MANAGEMENT LLC, a Delaware limited liability company ("SBFM"),
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P., a New York limited partnership
(the "Partnership") and TUCSON ASSET MANAGEMENT, INC., an Arizona corporation
(the "Advisor").

                              W I T N E S S E T H :
                               - - - - - - - - - -

                  WHEREAS, SBFM is the general partner of SMITH BARNEY PRINCIPAL
PLUS FUTURES FUND L.P., a limited partnership organized with the objective to
achieve substantial capital appreciation by engaging in speculative trading of a
diversified portfolio of commodity interests which may include futures
contracts, options, forward contracts and physicals; and

                  WHEREAS, the Limited Partnership Agreement establishing the
Partnership (the "Limited Partnership Agreement") permits SBFM to delegate to
one or more commodity trading advisors SBFM'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,  SBFM is registered as a commodity pool operator with the CFTC and
is a member of the NFA; and

                  WHEREAS, SBFM, the Partnership and the Advisor wish to enter
into this Agreement in order to set forth the terms and conditions upon which
the Advisor will render and implement advisory services in connection with the
conduct by the Partnership of its commodity trading activities during the term
of this Agreement;

                  NOW, THEREFORE, the parties agree as follows:

1. DUTIES OF THE ADVISOR. (a) For the period and on the terms and conditions of
this Agreement, the Advisor shall have sole authority and responsibility, as one
of the Partnership's agents and attorneys-in-fact, for directing the investment
and reinvestment of the assets and funds of the Partnership allocated to it by
SBFM in commodity interests, including commodity futures contracts, options and
forward contracts. All such trading on behalf of the Partnership shall be in
accordance with the trading policies set forth in the Partnership's Prospectus
dated as of July 12, 1995 (as supplemented, 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 SBFM to be utilized by the Advisor in managing the Partnership's
assets. SBFM has initially selected the Advisor's TAMI Global strategy to manage
50% of the Partnership's assets allocated to the Advisor, and the Advisor's TAMI
Domestic 2X strategy to manage 50% of the Partnership's assets allocated to the
Advisor. 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 SBFM. The Advisor
makes no representation or warranty that the trading to be directed by it for
the Partnership will be profitable or will not incur losses. The Advisor will
have no responsibility for the management of the Partnership's assets invested
in Zero Coupon U.S. Treasury obligations.

(b) SBFM acknowledges receipt of the Advisor's Disclosure Document dated
September 30, 2000, as filed with the NFA and the CFTC (the "Disclosure
Document"). All trades made by the Advisor for the account of the Partnership
shall be made through such commodity broker or brokers as SBFM shall direct, and
the Advisor shall have no authority or responsibility for selecting or
supervising any such broker in connection with the execution, clearance or
confirmation of transactions for the Partnership or for the negotiation of
brokerage rates charged therefor. However, the Advisor, with the prior written
permission (by either original or fax copy) of SBFM, may direct all trades in
commodity futures and options to a futures commission merchant or independent
floor broker it chooses for execution with instructions to give-up the trades to
the broker designated by SBFM, provided that the futures commission merchant or
independent floor broker and any give-up or floor brokerage fees are approved in
advance by SBFM. All give-up or similar fees relating to the foregoing shall be
paid by the Partnership after all parties have executed the relevant give-up
agreements (by either original or fax copy).

(c) The initial allocation of the Partnership's assets to the Advisor will be
made 50% to the Advisor's TAMI Global strategy and 50% to the Advisor's TAMI
Domestic 2X strategy (each, a "Program" and collectively, the "Programs"). 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 Disclosure Document
in connection with its trading for the Partnership, either in whole or in part,
it may not do so unless the Advisor gives SBFM prior written notice of its
intention to utilize such different trading system or methodology and SBFM
consents thereto in writing. In addition, the Advisor will provide thirty days'
prior written notice to SBFM of any change in the trading system or methodology
of either Program that the Advisor deems material. The Advisor will not utilize
such changed Program or trade new markets on behalf of the Partnership without
the prior written consent of SBFM, which consent will not be unreasonably
withheld. In addition, the Advisor will notify SBFM of any changes to the
trading system or methodology of either Program that would require a change in
the description of either Program in the Advisor's Disclosure Document. Further,
the Advisor will provide the Partnership with a current list of all commodity
interests to be traded for the Partnership's account and will not trade any
additional commodity interests for such account without providing notice thereof
to SBFM and receiving SBFM's written approval. The Advisor also agrees to
provide SBFM, on a monthly basis, with a written report of the assets under the
Advisor's management (including notional and committed funds) together with all
other matters deemed by the Advisor to be material changes to its business not
previously reported to SBFM.

(d) The Advisor agrees to make all material disclosures to the Partnership
regarding itself and its principals as defined in Part 4 of the CFTC's
regulations ("principals"), shareholders, directors, officers and employees,
their trading performance and general trading methods, its customer accounts
(but not the identities of or identifying information with respect to its
customers) and otherwise as are required in the reasonable judgment of SBFM to
be made in any filings required by Federal or state law or NFA rule or order.
Notwithstanding Sections 1(d) and 4(d) of this Agreement, the Advisor is not
required to disclose the actual trading results of proprietary accounts of the
Advisor or its principals unless SBFM reasonably determines that such disclosure
is required in order to fulfill its fiduciary obligations to the Partnership or
the reporting, filing or other obligations imposed on it by Federal or state law
or NFA rule or order. The Partnership and SBFM acknowledge that the trading
advice to be provided by the Advisor is a property right belonging to the
Advisor and that they will keep all such advice confidential. Further, SBFM
agrees to treat as confidential any results of proprietary accounts and/or
proprietary information with respect to trading systems obtained from the
Advisor.

(e) The Advisor understands and agrees that SBFM may designate other trading
advisors for the Partnership and apportion or reapportion to such other trading
advisors the management of an amount of Net Assets (as defined in Section 3(b)
hereof) as it shall determine in its absolute discretion. The designation of
other trading advisors and the apportionment or reapportionment of Net Assets to
any such trading advisors pursuant to this Section 1 shall neither terminate
this Agreement nor modify in any regard the respective rights and obligations of
the parties hereunder.

(f) SBFM may, from time to time, in its absolute discretion, select additional
trading advisors and reapportion funds among the trading advisors for the
Partnership as it deems appropriate. SBFM shall use its best efforts to make
reapportionments, if any, as of the first day of a month. The Advisor agrees
that it may be called upon at any time promptly to liquidate positions in SBFM's
sole discretion so that SBFM may reallocate the Partnership's assets, meet
margin calls on the Partnership's account, fund redemptions, or for any other
reason, except that SBFM will not require the liquidation of specific positions
by the Advisor. SBFM will use its best efforts to give two days' prior notice to
the Advisor of any reallocations or liquidations.

(g) The Advisor will 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. The Advisor will not be liable, however, for (i) trading losses in
the Partnership's account, or (ii) losses in the Partnership's account caused,
directly or indirectly, by the errors of third parties, third party software, or
otherwise under circumstances beyond the reasonable control of the Advisor
(including, for purposes of this Section 1(g)(ii), errors that resulted in
trades that are ultimately deemed by the Advisor, in its sole discretion, to be
program-wide discretionary trades).

2. INDEPENDENCE OF THE ADVISOR. For all purposes herein, the Advisor shall be
deemed to be an independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent the Partnership
in any way and shall not be deemed an agent, promoter or sponsor of the
Partnership, SBFM, or any other trading advisor. 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 no
longer acting as an 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 each Program traded on behalf of the Partnership and (ii) a
monthly fee for professional management services equal to 1/6 of 1% (2% per
year) of the sum of (A) month-end Net Assets of the Partnership allocated to the
Advisor, and (B) Notional Funds traded by the Advisor on behalf of the
Partnership. The incentive fee will be calculated and paid separately for each
Program (i.e., gains in one Program will not be netted against losses in the
other Program).

(b) "Net Assets" shall have the meaning set forth in Paragraph 7(d)(1) of the
Limited Partnership Agreement dated as of June 22, 1995 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. "Notional funds" shall be the amount in excess of Net Assets that
SBFM and the Advisor have agreed will be employed in determining the level of
trading by the Advisor on behalf of the Partnership.

(c) "New Trading Profits" shall mean the excess, if any, of Net Assets (plus any
notional funds) managed by the Advisor at the end of the fiscal period over Net
Assets (plus any notional funds) managed by the Advisor at the end of the
highest previous fiscal period or Net Assets (plus any notional funds) allocated
to the Advisor at the date trading commences, whichever is higher, and as
further adjusted to eliminate the effect on Net Assets (plus any notional funds)
resulting from new capital contributions, redemptions, reallocations or capital
distributions (of actual or notional funds), if any, made during the fiscal
period decreased by interest or other income, not directly related to trading
activity, earned on the Partnership's assets during the fiscal period, whether
the assets are held separately or in margin accounts. Ongoing expenses will be
attributed to the Advisor based on the Advisor's proportionate share of Net
Assets (plus any notional funds). Ongoing expenses will not include expenses of
litigation not involving the activities of the Advisor on behalf of the
Partnership. Ongoing expenses include offering expenses of the Partnership, if
any. No incentive fee shall be paid until the end of the first full calendar
quarter of trading, which fee shall be based on New Trading Profits earned from
the commencement of trading operations by the Advisor on behalf of the
Partnership through the end of the first full calendar quarter. Interest income
earned, if any, will not be taken into account in computing New Trading Profits
earned by the Advisor. If Net Assets (plus any notional funds) 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 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 SBFM conducted the
Partnership's business operations or utilized the Advisor's services bears in
the month to the total number of business days in such month.

     (e) The  provisions of this  Paragraph 3 shall survive the  termination  of
this Agreement.

4. RIGHT TO ENGAGE IN OTHER ACTIVITIES. (a) The services provided by the Advisor
hereunder are not to be deemed exclusive. SBFM on its own behalf and on behalf
of the Partnership acknowledges that, subject to the terms of this Agreement,
the Advisor and its officers, directors, employees and shareholder(s), render
and will continue to 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 or different information, computer programs and
trading strategies, programs or formulas which they obtain, produce or utilize
in the performance of services to SBFM for the Partnership. However, the Advisor
represents, warrants and agrees that it believes the rendering of such
consulting, advisory and management services to other accounts and entities will
not require any material change in the Advisor's basic trading strategies and
will not affect the capacity of the Advisor to continue to render services to
SBFM for the Partnership of the quality and nature contemplated by this
Agreement.

(b) If, at any time during the term of this Agreement, the Advisor is required
to aggregate the Partnership's commodity positions with the positions of any
other person for purposes of applying CFTC- or exchange-imposed speculative
position limits, the Advisor agrees that it will promptly notify SBFM 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 are
currently utilized for differing sizes of accounts, accounts with different
trading policies, accounts experiencing differing inflows or outflows of equity,
accounts which commence trading at different times, accounts which have
different portfolios or different fiscal years, accounts utilizing different
executing brokers and accounts with other differences, and that such differences
may cause divergent trading results.

(c) It is acknowledged that the Advisor and/or its officers, employees,
directors and shareholder(s) presently act, and it is agreed that they may
continue to act, as advisor for other accounts managed by them, and may continue
to receive compensation with respect to services for such accounts in amounts
which may be more or less than the amounts received from the Partnership.

(d) The Advisor agrees that it shall make such information available to SBFM
respecting the performance of the Partnership's account as compared to the
performance of other accounts managed by the Advisor or its principals as shall
be reasonably requested by SBFM. The Advisor presently believes and represents
that existing speculative position limits will not materially adversely affect
its ability to manage the Partnership's account given the potential size of the
Partnership's account and the Advisor's and its principals' current accounts and
all proposed accounts for which they have contracted to act as trading manager.

5. TERM. (a) This Agreement shall continue in effect until June 30, 2001. SBFM
may, in its sole discretion, renew this Agreement for additional one-year
periods upon notice to the Advisor not less than 30 days prior to the expiration
of the previous period. At any time during the term of this Agreement, SBFM may
terminate this Agreement upon 30 days' notice to the Advisor. At any time during
the term of this Agreement, SBFM may elect immediately to terminate this
Agreement if (i) the Advisor merges, consolidates with another entity, sells a
substantial portion of its assets, or becomes bankrupt or insolvent, (ii)
Charles E. White and Jeffrey Stephenson both die, become incapacitated, leave
the employ of the Advisor, cease to control the Advisor or are otherwise not
managing the trading programs or systems of the Advisor, or (iii) the Advisor's
registration as a commodity trading advisor with the CFTC or its membership in
the NFA or any other regulatory authority, is terminated or suspended. This
Agreement will immediately terminate upon dissolution of the Partnership or upon
cessation of trading prior to dissolution.

(b) The Advisor may terminate this Agreement by giving not less than 30 days'
notice to SBFM (i) in the event that the trading policies of the Partnership as
set forth in the Prospectus are changed in such manner that the Advisor
reasonably believes will adversely affect the performance of its trading
strategies; (ii) after June 30, 2001; 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 SBFM'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 shall be without penalty or
liability to any party, except for any fees due to the Advisor pursuant to
Section 3 hereof.

6. INDEMNIFICATION. (a)(i) In any threatened, pending or completed action, suit,
or proceeding to which the Advisor was or is a party or is threatened to be made
a party arising out of or in connection with this Agreement or the management of
the Partnership's assets by the Advisor or the offering and sale of units in the
Partnership, SBFM shall, subject to subparagraph (a)(iii) of this Paragraph 6,
indemnify and hold harmless the Advisor against any loss, liability, damage,
cost, expense (including, without limitation, attorneys' and accountants' fees),
judgments and amounts paid in settlement actually and reasonably incurred by it
in connection with such action, suit, or proceeding if the Advisor acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Partnership, and provided that its conduct did not constitute
negligence, intentional misconduct, or a material 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 (i) above, or in defense of any claim, issue or matter therein,
SBFM shall indemnify it against the expenses (including, without limitation,
attorneys' and accountants' fees) actually and reasonably incurred by it in
connection therewith.

(ii) Any indemnification under subparagraph (i) above, unless ordered by a court
or administrative forum, shall be made by SBFM on behalf of the Partnership only
as authorized in the specific case and only upon a determination by independent
legal counsel in a written opinion that such indemnification is proper in the
circumstances because the Advisor has met the applicable standard of conduct set
forth in subparagraph (i) above. Such independent legal counsel shall be
selected by SBFM in a timely manner, subject to the Advisor's approval, which
approval shall not be unreasonably withheld. The Advisor will be deemed to have
approved SBFM's selection unless the Advisor notifies SBFM in writing, received
by SBFM within five days of SBFM's telecopying to the Advisor of the notice of
SBFM's selection, that the Advisor does not approve the selection.

(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 SBFM's activities or claimed activities
unrelated to the Advisor, SBFM shall indemnify, defend and hold harmless the
Advisor against any loss, liability, damage, cost or expense (including, without
limitation, attorneys' and accountants' fees) incurred in connection therewith.

(iv) As used in this Paragraph 6(a), the terms "Advisor" shall include the
Advisor, its principals, officers, directors, stockholders and employees and the
term "SBFM" shall include the Partnership.

(b) (i) The Advisor agrees to indemnify, defend and hold harmless SBFM, 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.

(ii) In the event SBFM, the Partnership or any of their affiliates is made a
party to any claim, dispute or litigation or otherwise incurs any loss or
expense as a result of, or in connection with, the activities or claimed
activities of the Advisor or its principals, officers, directors, shareholder(s)
or employees unrelated to SBFM's or the Partnership's business, the Advisor
shall indemnify, defend and hold harmless SBFM, 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 Advisor's Disclosure
Document are accurate in all material respects and as to them the Disclosure
Document 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.

(ii) The information with respect to the Advisor set forth in the actual
performance tables in the Disclosure Document is based on a fully-funded subset
of all customer accounts managed on a discretionary basis by the Advisor's
principals and/or the Advisor during the period covered by such tables and
required to be disclosed therein.

(iii) The Advisor will be acting as a commodity trading advisor with respect to
the Partnership and not as a securities investment adviser and is duly
registered with the CFTC as a commodity trading advisor, is a member of the NFA,
and is in compliance with such other registration and licensing requirements as
shall be necessary to enable it to perform its obligations hereunder, and agrees
to maintain and renew such registrations and licenses during the term of this
Agreement.

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

(v) The Advisor will not, by acting as a commodity trading advisor to the
Partnership, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound.

(vi) This Agreement has been duly and validly authorized, executed and delivered
by the Advisor and is a valid and binding agreement enforceable in accordance
with its terms.

(vii) At any time during the term of this Agreement that a prospectus relating
to the Units is required to be delivered in connection with the offer and sale
thereof, the Advisor agrees upon the request of SBFM to provide the Partnership
with such information as shall be necessary so that, as to the Advisor and its
principals, such prospectus is accurate.

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

(i) The Prospectus 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.

(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 power and
authority to perform its obligations under this Agreement.

(iii) SBFM 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 SBFM's and the Partnership's behalf and is a valid and binding agreement of
SBFM and the Partnership enforceable in accordance with its terms.

(v) SBFM will not, by acting as General Partner to the Partnership and the
Partnership will not, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound which would materially limit or affect the performance of its duties under
this Agreement.

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

(vii) The Partnership is a limited partnership duly organized and validly
existing under the laws of the State of New York and has full power and
authority to enter into this Agreement and to perform its obligations under this
Agreement.

8.       COVENANTS OF THE ADVISOR, SBFM AND THE PARTNERSHIP.
         --------------------------------------------------

(a)      The Advisor agrees as follows:

(i) In connection with its activities on behalf of the Partnership, the Advisor
will comply with all applicable rules and regulations of the CFTC and/or the
commodity exchange on which any particular transaction is executed.

(ii) The Advisor will promptly notify SBFM of the commencement of any material
suit, action or proceeding involving it, whether or not any such suit, action or
proceeding also involves SBFM.

(iii) In the placement of orders for the Partnership's account and for the
accounts of any other client, the Advisor will utilize a pre-determined,
systematic, fair and reasonable order entry system, which shall, on an overall
basis, be no less favorable to the Partnership than to any other account managed
by the Advisor. The Advisor acknowledges its obligation to review the
Partnership's positions, prices and equity in the account managed by the Advisor
daily and within two business days to notify, in writing, the broker and SBFM
and the Partnership's brokers of (i) any error committed by the Advisor or its
principals or employees for which such persons are responsible under Section
1(g); (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. Such notification shall not be required with respect to
errors or discrepancies that are in the process of being corrected.

     (iv) The Advisor will maintain a net worth of not less than $250,000 during
the term of this
Agreement.

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

(i) SBFM and the Partnership will comply with all applicable rules and
regulations of the CFTC and/or the commodity exchange on which any particular
transaction is executed.

(ii) SBFM will promptly notify the Advisor of the commencement of any material
suit, action or proceeding involving it or the Partnership, whether or not such
suit, action or proceeding also involves the Advisor.

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

the subject matter hereof.

     10. ASSIGNMENT. This Agreement may not be assigned by any party without the
express written consent of the

other parties.

     11.  AMENDMENT.  This  Agreement  may not be amended  except by the written
consent of the parties.

12. NOTICES. All notices, demands or requests required to be made or delivered
under this Agreement shall be in writing and delivered personally or by
registered or certified mail or expedited courier, return receipt requested,
postage prepaid, to the addresses below or to such other addresses as may be
designated by the party entitled to receive the same by notice similarly given:

                  If to SBFM:

                           Smith Barney Futures Management LLC
                           388 Greenwich Street
                           New York, New York  10013
                           Attention:  David J. Vogel

                  If to the Advisor:

                           Tucson Asset Management, Inc.
                           4350 La Jolla Village Drive
                           Suite 340
                           San Diego, CA  92122
                           Attention: J.W. Stephenson

     13.  GOVERNING  LAW. This  Agreement  shall be governed by and construed in
accordance with the laws of the

State of New York.

14. ARBITRATION. The parties agree that any dispute or controversy arising out
of or relating to this Agreement or the interpretation thereof, shall be settled
by arbitration in accordance with the rules, then in effect, of the National
Futures Association or, if the National Futures Association shall refuse
jurisdiction, then in accordance with the rules, then in effect, of the American
Arbitration Association; provided, however, that the power of the arbitrator
shall be limited to interpreting this Agreement as written and the arbitrator
shall state in writing his reasons for his award. Judgment upon any award made
by the arbitrator may be entered in any court of competent jurisdiction.

     15. NO THIRD PARTY BENEFICIARIES. There are no third party beneficiaries to
this Agreement.


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


                                                     SMITH BARNEY
                                                     FUTURES MANAGEMENT LLC


                                                     By /s/ David J. Vogel
                                                        ------------------------
                                                         David J. Vogel
                                                         President and Director



                                                 SMITH BARNEY
                                               PRINCIPAL PLUS FUTURES FUND L.P.


                                                     By:  Smith Barney
                                                          Futures Management LLC
                                                           (General Partner)


                                                     By  /s/ David J. Vogel
                                                        ------------------------
                                                         David J. Vogel
                                                         President and Director

TUCSON ASSET
MANAGEMENT, INC.


By  /s/ Charles E. White
   ----------------------
     Charles E. White
     President



</TEXT>
</DOCUMENT>
