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Exhibit 10.1
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF SMITH BARNEY
AAA ENERGY FUND L.P.
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
‘‘Agreement’’) of Smith Barney AAA Energy
Fund L.P., a New York limited partnership (the
‘‘Partnership’’), dated and effective as of
September 30, 2006, is by and among Citigroup Managed Futures LLC,
731 Lexington Avenue - 25 th
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 January 5, 1998 (the ‘‘Initial
Agreement’’), by and among the General Partner, the
Special Limited Partner and the Initial Limited Partner.
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 Smith Barney AAA Energy Fund L. P. (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.
3. Business.
(a) The Partnership's business and purpose is to trade, buy, sell
or otherwise acquire, hold or dispose of interests in commodities
of all descriptions (including futures contracts, commodity
options, forward contracts 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, 2018; (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.
(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 11 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
11, 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 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 5,000 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 5,000 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 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 Smith Barney Inc.
(‘‘SB’’) 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
Partnership. Notwithstanding the above, the Profit Share allocable
on September 30, 2006 shall be based on New Trading Profits earned
from January 1, 2006 through September 30, 2006. 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 allocated any
Profit Share thereafter until all of such losses were recovered and
the Special Limited Partner achieved additional New Trading
Profits.
If the Partnership is terminated or the Special Limited Partner is
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