Exhibit 10.1
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF
SALOMON SMITH BARNEY AAA ENERGY FUND L.P. II
This
Amended and Restated Limited Partnership Agreement (this
"Agreement"),
dated and effective as of January 9, 2007, is by and among
Citigroup Managed
Futures LLC, 731 Lexington Avenue - 25th floor, New York, New York
10022 (the
"General Partner"), AAA Capital Management Advisors, Ltd. (the
"Special Limited
Partner") and David J. Vogel (the "Initial Limited Partner") and
those other
parties who shall execute this Agreement, whether in counterpart or
by
attorney-in-fact, as limited partners. (The Initial Limited Partner
and such
other parties are hereinafter collectively referred to as the
"Limited
Partners". The General Partner and the Limited Partners may be
collectively
referred to herein as "Partners.") This Agreement amends and
restates the
Partnership's limited partnership agreement, dated as of March 25,
2002 (the
"Initial Agreement"), by and among the General Partner, the Special
Limited
Partner, the Initial Limited Partner and the other limited partners
party
thereto.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a proxy statement distributed to the Limited
Partners
on or about July 11, 2006, the General Partner requested the
Limited Partners'
approval of an amendment to the Initial Agreement in order to
change the profit
share allocation due to the Special Limited Partner so that the
allocation is
made quarterly rather than annually; and
WHEREAS, the General Partner and the requisite Limited Partners,
consistent
with the requirements of Section 18(a) of the Limited Partnership
Agreement,
have approved such amendment to the Initial Agreement.
NOW,
THEREFORE, in consideration of the mutual premises and
agreements
herein made and intending to be legally bound hereby, the parties
hereto agree
to amend and restate the Initial Agreement in its entirety as
follows:
1. Formation and
Name.
The
parties hereto hereby form a limited partnership under the New
York
Revised Uniform Limited Partnership Act. The name of the limited
partnership is
Salomon Smith Barney AAA Energy Fund L.P. II (the "Partnership").
The General
Partner shall execute and file a Certificate of Limited Partnership
in
accordance with the provisions of the New York Revised Limited
Partnership Act
and execute, file, record and publish, as appropriate, such
amendments,
restatements and other documents as are or become necessary or
advisable, as
determined by the General Partner. As used herein, "Partnership
Act" means the
New York Revised Uniform Limited Partnership Act.
2. Principal
Office.
The
principal office of the Partnership shall be 731 Lexington Avenue
-
25th floor, New York, New York 10022 or such other place as the
General Partner
may designate from time to time.
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3. Business.
(a)
The Partnership's business and purpose is to trade, buy, sell
or
otherwise acquire, hold or dispose of interests, directly or
indirectly, in
commodities of all descriptions (including futures contracts,
commodity options,
forward contracts, swaps and any other rights or interests
pertaining thereto,
including interests in commodity pools). The objective of the
Partnership
business is appreciation of its assets through speculative
trading.
(b)
The Partnership shall not:
(1) engage in the pyramiding of its positions by using
unrealized
profits on existing positions as margin for the purchase or sale of
additional
positions in the same or related commodities;
(2) utilize borrowings except short-term borrowings if the
Partnership
takes delivery of cash commodities; or
(3) permit the churning of its account.
(c)
The Partnership shall make no loans. Assets of the Partnership will
not
be commingled with assets of any other entity. Deposit of assets
with a
commodity broker or dealer as margin shall not constitute
commingling.
4. Term,
Dissolution and Fiscal Year.
(a)
Term. The term of the Partnership shall commence on the date
the
Certificate of Limited Partnership is filed in the office of the
County Clerk of
New York County, State of New York, and shall end as soon as
practicable upon
the first to occur of the following: (1) December 31, 2022; (2)
receipt by the
General Partner of an election to dissolve the Partnership at a
specified time
by Limited Partners owning more than 50% of the Units of Limited
Partnership
Interest then outstanding, notice of which is sent by registered
mail to the
General Partner not less than 90 days prior to the effective date
of such
dissolution; (3) assignment by the General Partner of all of its
interest in the
Partnership, withdrawal, removal, bankruptcy or any other event
that causes the
General Partner to cease to be a general partner under the
Partnership Act
(unless the Partnership is continued pursuant to Paragraph 17); (4)
a decline in
Net Asset Value on any business day after trading to less than $400
per Unit; or
(5) any event which shall make it unlawful for the existence of the
Partnership
to be continued.
(b)
Dissolution. Upon dissolution of the Partnership, the assets of
the
Partnership shall be distributed to creditors, including any
Partners who may be
creditors, to the extent otherwise permitted by law, in
satisfaction of
liabilities of the Partnership (whether by payment or the making of
reasonable
provision for payment thereof) other than liabilities for which
reasonable
provision for payment has been made and liabilities for
distributions to
Partners; to Partners and former Partners in satisfaction of
liabilities for
distributions; and to Partners first for the return of their
contributions and
second respecting their Partnership interests, in the proportions
in which the
Partners share in distributions. Following distributions of the
assets of the
Partnership, a Certificate of Cancellation for the Partnership
shall be filed as
required by the Partnership Act.
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(c)
Fiscal Year. The fiscal year of the Partnership will commence
on
January 1 and end on December 31 each year ("fiscal year"). Each
fiscal year of
the Partnership is divided into four fiscal quarters commencing on
the first day
of January, April, July and October ("fiscal quarter").
5. Net Worth of
General Partner.
The
General Partner agrees that, at all times after the termination of
the
initial offering period of the Partnership's Units of Limited
Partnership
Interest described in Paragraph 12 hereof (the "Private
Placement"), so long as
it remains a general partner of the Partnership, it will maintain
its Net Worth
at an amount not less than 5% of the total contributions to the
Partnership by
all Partners. The General Partner also agrees, with respect to each
additional
limited partnership of which it is general partner, to maintain a
net worth
(excluding capital contributions to the additional partnership) at
an amount not
less than 5% of the total contributions to the additional limited
partnership.
In no event will the General Partner be required to maintain a net
worth in
excess of $1,000,000.
For
the purposes of this Paragraph 5, Net Worth shall be based upon
current
fair market value of the assets of the General Partner. The
requirements of this
Paragraph 5 may be modified if the General Partner obtains an
opinion of counsel
for the Partnership that a proposed modification will not adversely
affect the
classification of the Partnership as a partnership for federal
income tax
purposes and will not violate any state securities or blue sky laws
to which the
Partnership may be subject from time to time.
6. Capital
Contributions and Units of Partnership Interest.
The
General Partner shall contribute to the Partnership, immediately
prior
to the date on which the Partnership commences trading operations
and as
necessary thereafter, an amount at least equal to the greater of
(a) 1% of
capital contributions or (b) $25,000. The General Partner's
contribution shall
be evidenced by "Units of General Partnership Interest." The
General Partner may
not make any transfer or withdrawal of its contribution to the
Partnership while
it is General Partner which would reduce its aggregate percentage
interest in
the Partnership to less than such required interest in the
Partnership. Any
withdrawal of any such excess interest by the General Partner may
be made only
upon not less than thirty (30) days' notice to the Limited Partners
prior to the
end of a fiscal quarter.
Interests in the Partnership, other than those of the General
Partner,
shall be evidenced by "Units of Limited Partnership Interest" which
the General
Partner on behalf of the Partnership shall, in accordance with the
Private
Placement Offering Memorandum and Disclosure Document (the
"Memorandum")
referred to in Paragraph 12, sell to persons desiring to become
Limited
Partners. For each Unit of Limited Partnership Interest purchased
prior to the
commencement of trading operations, a Limited Partner shall
contribute $1,000 to
the capital of the Partnership. For any Unit (or partial unit
rounded to four
decimal places) of Limited Partnership Interest purchased
thereafter (except as
noted below with respect to the Special Limited Partner), a Limited
Partner
shall contribute to the capital of the Partnership an amount equal
to the Net
Asset Value of a Unit (or partial unit, as the case may be) of
Limited
Partnership Interest as of the close of business on the day
preceding the
effective date of such purchase, and shall pay in addition the
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selling commission, if any, which must be paid with respect to such
purchase.
The Special Limited Partner will contribute advisory services and
will receive a
quarterly allocation in Units as described in Paragraph 8. The
aggregate of all
contributions shall be available to the Partnership to carry on its
business,
and no interest shall be paid on any such contribution. All
subscriptions for
Units of Limited Partnership Interest made pursuant to the Private
Placement of
the Units of Limited Partnership Interest must be on the form
provided in the
Memorandum.
The
proceeds from the sale of the Units of Limited Partnership
Interest
pursuant to the Private Placement shall be placed in an escrow
account and shall
not be contributed to the capital of the Partnership prior to the
termination of
the initial offering period. If subscriptions for at least 10,000
Units of
Limited Partnership Interest shall not have been received and
accepted by the
General Partner when the initial offering period is terminated, the
full amount
of all subscriptions shall be returned promptly to the subscribers,
and the
Certificate of Limited Partnership may, in the discretion of the
General
Partner, be canceled. If subscriptions for at least 10,000 Units of
Limited
Partnership Interest shall have been received and accepted by the
General
Partner prior to the termination of the initial offering period,
the proceeds
thereof shall be contributed to the capital of the Partnership and
the
Partnership shall thereafter commence trading operations. All
subscribers shall
receive the interest earned on their subscriptions while held in
escrow. All
subscribers who have been accepted by the General Partner shall be
deemed
admitted as Limited Partners at the time they are reflected as such
in the books
and records of the Partnership.
7. Allocation of
Profits and Losses.
(a)
Capital Accounts. A capital account shall be established for
each
Partner. The initial balance of each Partner's capital account
shall be the
amount of his initial capital contribution to the Partnership. A
Partner's
capital account shall be increased by the amount of any additional
capital
contributions to the Partnership by such Partner, and shall be
further adjusted
as provided in Paragraph 7(b).
(b)
Allocations. As of the close of business on the last day of each
month
during each fiscal year of the Partnership, and on such other dates
as the
General Partner in its discretion shall determine (each, an
"Allocation Date"),
the following determinations and allocations shall be made:
(1) The Net Assets of the Partnership (as defined in Paragraph
7(d)(1)), but before any advisory fees or profit share allocations
as of such
date shall be determined.
(2) Monthly advisory fees, if any, payable by the Partnership as
of
such date shall then be charged against Net Assets.
(3) Any increase or decrease in Net Assets of the Partnership from
the
previous Allocation Date (or, with respect to the first calendar
month of
operations, from the first day of operations) allocable to Limited
Partners or
the General Partner, as the case may be, shall then be credited or
charged to
the capital accounts of the Limited Partners or the General
Partner, as the case
may be, in the ratio that the balance of each such Partner's
capital account
bears to the balance of all such relevant Partners' capital
accounts. For the
purpose of this Paragraph 7(b)(3), Net Assets shall be determined
without regard
to (A) any Profit Share allocations to the
<PAGE>
Special Limited Partner pursuant to Paragraph 7(b)(4), (B)
distributions and
withdrawals described in Paragraph 7(b)(5), and (C) any
contributions made to
the Partnership by a Partner during such month.
(4) As of each calendar quarter-end, the aggregate amount of
net
increase in Net Assets allocated pursuant to Paragraph 7(b)(3)
shall be adjusted
by charging the Partnership an amount equal to the Special Limited
Partner's
Profit Share allocation payable as of such calendar quarter-end,
pursuant to
Paragraph 8 and by crediting such amount to the Special Limited
Partner's
capital account.
(5) The amount of any distribution to a Partner and any amount paid
to
a Partner upon withdrawal of capital from the Partnership with
respect to such
month shall be charged against the Partner's capital account. Upon
liquidation
of the Partnership, the balance of the proceeds of liquidation
after payment of
Partnership obligations shall be distributed to the Partners in
proportion to
their remaining positive capital account balances after adjustment
for prior
distributions and allocations.
(c)
Allocations for Tax Purposes. All items of income, gains,
losses,
deductions and credits of the Partnership for each fiscal year will
be allocated
among the Partners for income tax purposes in a manner that
reflects, as closely
as possible, the amounts and the components credited or debited to
each
Partner's capital account pursuant to this Paragraph 7. Allocations
pursuant to
this Paragraph 7(c) will not be credited or debited to capital
accounts.
(d)
Definitions.
(1) Net Assets. Net Assets of the Partnership shall mean the
total
assets of the Partnership, including all cash, accrued interest and
the market
value of all open commodity positions maintained by the Partnership
less
brokerage charges accrued and less all other liabilities of the
Partnership
determined in accordance with generally accepted accounting
principles under the
accrual basis of accounting. The value of a commodity futures or
option contract
is the unrealized gain or loss on the contract that is determined
by marking it
to the current settlement price for a like contract acquired on the
valuation
date. Physical commodities, options, forward contracts and futures
contracts,
when no market quote is available, will be valued at their fair
market value as
determined in good faith by the General Partner. U.S. Treasury
securities and
other interest bearing obligations will be valued at cost plus
accrued interest.
Interests in other commodity pools will be valued at their net
asset value as
determined by the pool operator, or, if the General Partner has not
received
such determination or believes that fairness so requires, at fair
value
determined by the General Partner. Net Assets equals Net Asset
Value.
(2) Net Asset Value per Unit. The Net Asset Value of each Unit
of
Limited Partnership Interest and each Unit of General Partnership
Interest shall
be determined by dividing the Net Assets of the Partnership by the
aggregate
number of Units of Limited and General Partnership Interest
outstanding.
(e)
Expenses and Limitation Thereof. The Partnership's
organizational
expenses and the expenses of the initial private offering of the
Units of
Limited Partnership Interest described in Paragraph 11 hereof shall
be initially
paid by Citigroup Global Markets Inc. (formerly known as
<PAGE>
Salomon Smith Barney Inc.) ("CGM") and reimbursed as discussed in
the
Memorandum. Subject to the limitations set forth below in this
Paragraph 7(e),
the Partnership shall be obligated to pay all liabilities incurred
by it,
including, without limitation, all expenses incurred in connection
with its
trading activities, and any advisory or other expenses. The General
Partner
shall bear all other operating expenses except legal, accounting,
filing, data
processing and reporting fees and extraordinary expenses.
Appropriate reserves
may be created, accrued and charged against Net Assets for
contingent
liabilities, if any, as of the date any such contingent liability
becomes known
to the General Partner.
(f)
Limited Liability of Limited Partners.
(1) Each Unit of Limited Partnership Interest, when purchased by
a
Limited Partner, subject to the qualifications set forth below,
shall be fully
paid and non-assessable.
(2) A Limited Partner will have no liability in excess of his
obligation to make contributions to the capital of the Partnership
and his share
of the Partnership's assets and undistributed profits, subject to
the
qualifications provided in the Partnership Act.
(g)
Return of Limited Partner's Capital Contribution. Except to the
extent
that a Limited Partner shall have the right to withdraw capital
through
redemption of Units of Limited Partnership Interest, no Limited
Partner shall
have any right to demand the return of his capital contribution or
any profits
added thereto, except upon dissolution and termination of the
Partnership. In no
event shall a Limited Partner be entitled to demand and receive
property other
than cash.
8. Profit Share
Allocation to the Special Limited Partner.
The
Special Limited Partner shall receive a quarterly profit share
(a
"Profit Share") allocation to its capital account in the
Partnership in the form
of additional Units and/or partial Units the value of which shall
be equal to
20% of the New Trading Profits generated by the Special Limited
Partner on
behalf of the Partnership as of each calendar quarter-end. The
Profit Share
allocation shall be made to the Special Limited Partner within
twenty (20)
business days following the end of the calendar quarter.
New
Trading Profits with respect to a calendar quarter means the
excess, if
any, of Net Assets managed by the Special Limited Partner at the
end of the
calendar quarter over Net Assets managed by the Special Limited
Partner at the
end of the highest previous calendar quarter or Net Assets
allocated to the
Special Limited Partner at the date trading commences, whichever is
higher, and
as further adjusted to eliminate the effect on Net Assets resulting
from new
capital contributions, redemptions, reallocations or capital
distributions, if
any, made during the calendar quarter decreased by interest or
other income not
directly related to trading activity, earned on the Partnership's
assets during
the calendar quarter whether the assets are held separately or in
margin
accounts. Ongoing expenses will be attributed to the Special
Limited Partner
based on the Special Limited Partner's proportionate share of Net
Assets.
Ongoing expenses above will not include expenses of litigation not
involving the
activities of the Special Limited Partner on behalf of the
Partnership. Ongoing
expenses include offering and organizational expenses of the
<PAGE>
Partnership. Interest income earned, if any, will not be taken into
account in
computing New Trading Profits earned by the Special Limited
Partner.
If
any Profit Share allocation is made to the Special Limited Partner
with
respect to New Trading Profits, and the Partnership thereafter
incurs a net loss
for a subsequent period, the Special Limited Partner will retain
the Profit
Share previously allocated in respect of New Trading Profits. If
Net Assets
allocated to the Special Limited Partner are reduced due to net
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 Special Limited Partner is eligible to receive
another
Profit Share. However, the Special Limited Partner would not be
alloc
