Second Amended and Restated Limited Partnership Agreement of Smith Barney Bristol Energy Fund L.P.
Exhibit 3.2
Second Amended and Restated Limited Partnership Agreement
of Xxxxx Xxxxxx Bristol Energy Fund L.P.
of Xxxxx Xxxxxx Bristol Energy Fund L.P.
This Second Amended and Restated Limited Partnership Agreement (this “Agreement”), dated and
effective as of June 30, 2009, is by and among Citigroup Managed Futures LLC, 00 Xxxx
00xx Xxxxxx — 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “General Partner”),
XxxxXxxxx Partners, L.P. (the “Special Limited Partner”) and those other parties who shall execute
this Agreement, whether in counterpart or by attorney-in-fact, as limited partners. (The Special
Limited Partner and such other parties who are limited partners 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 Amended and
Restated Limited Partnership Agreement dated as of June 30, 2008 (the “First Amended and Restated
Limited Partnership Agreement”) by and among the General Partner, the Special Limited Partner and
the other limited partners party thereto.
W I T N E S S E T H
:
WHEREAS, on April 25, 2005, Xxxxx Xxxxxx Bristol Energy Fund L.P. (the “Partnership”) was
formed for the purpose of trading in commodity interests, as described in Paragraph 3 hereof,
pursuant to the Partnership’s limited partnership agreement, dated as of April 25, 2005 (the
“Initial Agreement” and together with the First Amended and Restated Limited Partnership Agreement
the “Prior Agreement”), by and among the General Partner, a special limited partner, Xxxxx X. Xxxxx
(the “Initial Limited Partner”) and the other limited partners party thereto; and
WHEREAS, the Partnership commenced trading on September 6, 2005; and
WHEREAS, this Agreement has been amended previously, among other things, to admit a
replacement special limited partner; and
WHEREAS, XxxxXxxxx Capital, L.P. (the “Advisor”) continues to serve as the Partnership’s
commodity trading advisor; and
WHEREAS, the General Partner has deemed it advisable to amend Paragraph 11(c) of the Prior
Agreement in order to remove the requirement that a Limited Partner must hold Units of Limited
Partnership Interest (as defined below) for three (3) full months before such Units may be
withdrawn; and
WHEREAS, the General Partner, consistent with the requirements of Paragraph 18(a) of the Prior
Agreement, has determined that such amendment is not adverse to and does not require the consent of
the Limited Partners; and
WHEREAS, the directors of the General Partner unanimously consented in writing to the adoption
of resolutions to effect such amendment; and
WHEREAS, the General Partner, consistent with the requirements of Paragraph 18(a) of the Prior
Agreement, has determined to make other conforming amendments to the Prior 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 Prior
Agreement in its entirety as follows:
1. Formation and Name.
The Partnership was formed as a limited partnership under the New York Revised Uniform Limited
Partnership Act (the “Partnership Act”) on April 25, 2005. The name of the limited partnership is
Xxxxx Xxxxxx Bristol Energy Fund L.P. The General Partner has executed and filed a Certificate of
Limited Partnership in accordance with the provisions of the Partnership Act and shall 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.
2. Principal Office.
The principal office of the Partnership shall be 00 Xxxx 00xx Xxxxxx -
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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, directly or indirectly, in commodities of all descriptions (including
futures contracts, commodity options, forward contracts and any other rights or interests
pertaining thereto, including swaps and 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.
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4. Term, Dissolution and Fiscal Year.
(a) Term. The term of the Partnership commenced on the date the Certificate of Limited
Partnership was filed in the office of the Secretary of State, State of New York, and shall end as
soon as practicable upon the first to occur of the following: (1) December 31, 2025; (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 18); (4) a decline in Net Asset Value on any business day after trading to
less than $400 per Unit of Limited Partnership Interest; or (5) any event which shall make it
unlawful for the existence of the Partnership to be continued. In addition, the General Partner
may, in its sole discretion, cause the Partnership to dissolve if the Partnership’s aggregate Net
Assets decline to less than $1,000,000.
(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 in accordance
with Paragraph 7(b)(5). 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 shall not be obligated to maintain a Net Worth in excess of such amount,
if any, as may be required to ensure that the Partnership will continue to be treated as a
partnership for federal income tax purposes. For the purposes of this Paragraph 5, Net Worth shall
be based upon current fair market value of the assets of the General Partner.
6. Capital Contributions and Units of Partnership Interest.
The General Partner may, but shall not be obligated to, contribute capital to the Partnership
unless required to ensure that the Partnership will continue to be treated as a partnership for
federal income tax purposes. The General Partner’s contribution shall be evidenced by “Units of
General Partnership Interest.”
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
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Document (the “Memorandum”) referred to in Paragraph 12, sell to persons desiring to become
Limited Partners. For any Unit (or partial unit rounded to four decimal places) of Limited
Partnership Interest purchased (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 of Limited Partnership Interest (or partial unit, as the case may be) 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.
Notwithstanding the provisions of Paragraph 8, the Special Limited Partner shall make a
capital contribution to the Partnership (and shall maintain an interest in the Partnership for as
long as the Special Limited Partner is a special limited partner of the Partnership) in an amount
equal to the lesser of either (i) 1% of the Partnership’s total Net Assets (as such term is defined
in Paragraph 7(d)(1)); or (ii) $250,000.
The Special Limited Partner will receive a quarterly Profit Share (as such term is defined
below) allocation in Units of Limited Partnership Interest 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 this private placement of the Units of Limited Partnership
Interest (the “Private Placement”) must be on the form provided in the Memorandum.
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 (as such term is defined in Paragraph 7(d)(1)) of the Partnership, 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
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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 capital accounts of the
Partners, in the ratio that the balance of each such Partner’s capital account bears to the balance
of all such relevant Partners’ capital accounts, an amount equal to the Special Limited Partner’s
Profit Share allocation to be made 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, Treasury bills, 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, futures contracts and swaps, 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 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 fees or other expenses. The General Partner shall bear
all other operating expenses except legal, accounting, filing, data processing and reporting fees
and
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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 (or
allocated to the Special Limited Partner), subject to the qualifications set forth below, shall be
fully paid and non-assessable.
(2) A Limited Partner shall 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
accordance with Paragraph 7(b)(5). 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 of Limited Partnership Interest, the value of which shall be equal to 20% of New Trading
Profits of the Partnership as of each calendar quarter-end. The Profit Share allocation shall be
made to the Special Limited Partner within 10 business days following the end of each calendar
quarter.
New Trading Profits means the excess, if any, of Net Assets managed by the Advisor at the end
of the calendar quarter over Net Assets managed by the Advisor at the end of the highest previous
calendar quarter or Net Assets allocated to the Advisor at the date trading commences, whichever is
higher, and as further adjusted to eliminate the effect on Net Assets resulting from new capital
contributions, redemptions, reallocations or capital distributions, if any, made during the
calendar quarter decreased by interest or other income not directly related to trading activity,
earned on the Partnership’s assets during the calendar quarter whether the assets are held
separately or in margin accounts. Ongoing expenses will be attributed to the Advisor based on the
Advisor’s proportionate share of Net Assets. Ongoing expenses above shall not include expenses of
litigation not involving the activities of the Advisor on behalf of the Partnership. Ongoing
expenses above shall include offering and organizational expenses of the Partnership. Interest
income earned, if any, will not be taken into account in computing New Trading Profits.
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 Advisor are reduced due to net redemptions, distributions
or reallocations (net of additions), there will be a corresponding proportional
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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
Partnership achieved additional New Trading Profits.
If the Partnership is terminated or the Advisor is removed as advisor of the Partnership on a
date other than a calendar quarter-end, the Profit Share allocation described above shall be
determined and made as if such date were a calendar quarter-end.
9. Management of the Partnership.
The General Partner, to the exclusion of all Limited Partners, shall conduct, control and
manage the business of the Partnership, including, without limitation, the investment of the funds
of the Partnership. The General Partner may, but is not obliged to, delegate its rights, duties
and powers hereunder, including but not limited to the duty to make trading decisions for the
Partnership. The General Partner has selected XxxxXxxxx Capital, L.P. to make trading decisions
for the Partnership pursuant to an advisory agreement by and among the General Partner, the
Partnership and the Advisor (the “Advisory Agreement”). Except as provided herein, no Partner
shall be entitled to any salary, draw or other compensation from the Partnership. Each Limited
Partner hereby undertakes to advise the General Partner of such additional information as may be
deemed by the General Partner to be required or appropriate to open and maintain an account or
accounts with commodity brokerage firms for the purpose of trading in commodity futures contracts.
Subject to Paragraph 5 hereof, the General Partner may engage in other business activities and
shall not be required to refrain from any other activity nor disgorge any profits from any such
activity, whether as general partner of additional partnerships for investment in commodity futures
contracts or otherwise. The General Partner may engage and compensate on behalf of the Partnership
from funds of the Partnership, such persons, firms or corporations, including any affiliated person
or entity, as the General Partner in its sole judgment shall deem advisable for the conduct and
operation of the business of the Partnership.
No person dealing with the General Partner shall be required to determine its authority to
make any undertaking on behalf of the Partnership, nor to determine any fact or circumstance
bearing upon the existence of its authority.
The General Partner shall monitor the trading and performance of any trading advisor for the
Partnership and shall not permit the “churning” of the Partnership’s account. The General Partner
has been authorized to enter into the Agency Agreement with Citigroup Global Markets Inc. (“CGM”),
the Advisory Agreement with the Advisor, and the Customer Agreement with CGM, each as described in
the Memorandum and to cause the Partnership to pay the fees and/or make the allocations described
therein and to negotiate agency, customer and advisory agreements in the future on those or other
terms. The General Partner may take such other actions as it deems necessary or desirable to
manage the business of the Partnership, including, but not limited to, the following: opening bank
accounts with state or national banks; paying, or authorizing the payment of expenses of the
Partnership, such as advisory fees, legal and accounting fees, printing and reporting fees, and
registration and other fees of governmental agencies; and investing or directing the investment of
funds of the Partnership not being utilized as margin deposits.
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The General Partner shall maintain a list of the names and addresses of, and interests owned
by, all Partners, a copy of which shall be furnished to Limited Partners upon request either in
person or by mail and upon payment of the cost of reproduction and mailing for a purpose reasonably
related to such Limited Partner’s interest as a limited partner in the Partnership, and such other
books and records relating to the business of the Partnership as it deems necessary or advisable at
the principal office of the Partnership. The General Partner shall retain such records for a
period of not less than six years. The Limited Partners, shall be given reasonable access to the
books and records of the Partnership for a purpose reasonably related to such Limited Partner’s
interest as a limited partner in the Partnership.
The Partnership shall pay the General Partner a monthly administrative fee in return for its
services to the Partnership. The administrative fee shall equal 1/12 of 1/2% (1/2% per year) of
month-end adjusted Net Assets of the Partnership. The fee may be increased or decreased at the
discretion of the General Partner. For purposes of calculating the administrative fee, adjusted
Net Assets are “Net Assets” increased by the current month’s Profit Share allocation accrual and
any redemptions or distributions as of the end of such month.
Except as provided herein and in the Memorandum, the Partnership shall not enter into any
contract with any of its affiliates or with any trading advisor which has a term of more than one
year. Except as provided herein and in the Memorandum: (a) no person may receive, directly or
indirectly, any advisory fee for investment advice or management who shares or participates in
commodity brokerage commissions or fees from transactions for the Partnership; (b) no broker may
pay, directly or indirectly, rebates or give ups to any trading advisor; and (c) such prohibitions
shall not be circumvented by any reciprocal business arrangements. On loans made available to the
Partnership by the General Partner or any of its affiliates, the lender may not receive interest in
excess of its interest costs, nor may the lender receive interest in excess of the amounts which
would be charged the Partnership (without reference to the lender’s financial abilities or
guarantees) by unrelated banks on comparable loans for the same purpose and the lender shall not
receive points or other financing charges or fees regardless of the amounts.
10. Audits and Reports to Limited Partners.
The Partnership’s books and records shall be audited annually by independent accountants. The
Partnership will cause each Partner to receive (a) within 90 days after the close of each fiscal
year, audited financial statements, including a balance sheet and statements of income and
partners’ equity for the fiscal year then ended, and (b) within 75 days after the close of each
fiscal year such tax information as is necessary for him to complete his federal income tax return.
In addition, within 30 days of the end of each month the Partnership will provide each Limited
Partner with reports showing Net Assets and Net Asset Value per Unit of Limited Partnership
Interest as of the end of such month, as well as information relating to the fees and other
expenses incurred by the Partnership during such month. Both annual and monthly reports shall
include such additional information as the Commodity Futures Trading Commission may require under
the Commodity Exchange Act to be given to participants in commodity pools such as the Partnership.
The General Partner shall calculate the Net Asset Value per Unit of Limited and General Partnership
Interest daily and shall make such information available upon the request of a Limited Partner for
a purpose reasonably related to such Limited Partner’s interest as a Limited Partner in the
Partnership.
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In addition, if any of the following events occur, notice of such event shall be mailed to
each Limited Partner within seven business days of the occurrence of the event: (1) a decrease in
the Net Asset Value of a Unit of Limited Partnership Interest to $400 or less as of the end of any
trading day; (2) any change in trading advisor(s); (3) any change in the General Partner; (4) any
change in commodity broker(s); or (5) any material change in the Partnership’s trading policies or
in an advisor’s trading strategies.
11. Transfer and Redemption of Units.
(a) Initial Limited Partner. The Initial Agreement allowed the Initial Limited Partner to
redeem his Unit of Limited Partnership Interest for $1,000 and withdraw from the Partnership.
(b) Transfer. Each Limited Partner expressly agrees that he will not assign, transfer or
dispose of, by gift or otherwise, any of his Units of Limited Partnership Interest or any part or
all of his right, title and interest in the capital or profits of the Partnership without the
consent of the General Partner except (1) in the case of an individual Limited Partner, disposition
of Units of Limited Partnership Interest by last will and testament or by virtue of the laws of
descent and distribution and (2) in the case of a Limited Partner that is not an individual,
disposition of Units of Limited Partnership Interest upon liquidation, dissolution or other
termination of the entity that is a Limited Partner. No transfer or assignment shall be permitted
unless the General Partner is satisfied that (i) such transfer or assignment would not violate the
Securities Act of 1933, as amended, or any state securities law and (ii) notwithstanding such
transfer or assignment, the Partnership will continue to be classified as a Partnership under the
Internal Revenue Code. No assignment, transfer or disposition permitted by this Agreement shall be
effective against the Partnership or the General Partner until the first day of the quarter next
succeeding the quarter in which the General Partner gives its consent, except as otherwise provided
in this Paragraph 11(b). Any assignment, transfer or disposition by an assignee of Units of
Limited Partnership Interest of his interest in the capital or profits of the Partnership shall not
be effective against the Partnership or the General Partner until the first day of the quarter next
succeeding the quarter in which the General Partner gives its consent. If an assignment, transfer
or disposition occurs by reason of the death or by termination of a Limited Partner or assignee,
written notice must be given to the General Partner by the duly authorized representative of the
estate of the Limited Partner or assignee and shall be supported by such proof of legal authority
and valid assignment as may reasonably be requested by the General Partner. Any such assignee
shall become a substituted Limited Partner only upon the consent of the General Partner (which
consent may be withheld at its sole and absolute discretion), upon the execution of a Power of
Attorney by such assignee appointing the General Partner as his attorney-in-fact in the form
contained in Paragraph 14 hereof. The estate or any beneficiary of a deceased Limited Partner or
assignee shall have no right to withdraw any capital or profits from the Partnership except by
redemption of Units of Limited Partnership Interest. A substituted Limited Partner shall have all
the rights and powers and shall be subject to all the restrictions and liabilities of a limited
partner of the Partnership. A substituted Limited Partner is also liable for the obligations of
his assignor to make contributions to the Partnership, but shall not be liable for the obligations
of his assignor under the Partnership Act to return distributions received by the assignor;
provided, however, that a substituted Limited Partner shall not be obligated for liabilities
unknown to him at the time he became a substituted Limited Partner and which could not be
ascertained from this Agreement. Each Limited Partner agrees that with the consent of the General
Partner any
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assignee may become a substituted Limited Partner without the approval of any Limited Partner.
If the General Partner withholds consent, an assignee shall not become a substituted Limited
Partner and shall not have any of the rights of a Limited Partner except that the assignee shall be
entitled to receive that share of capital or profits and shall have that right of redemption to
which his assignor would otherwise have been entitled. An assigning Limited Partner shall remain
liable to the Partnership as provided in the Partnership Act, regardless of whether his assignee
becomes a substituted Limited Partner. The transfer of Units of Limited Partnership Interest shall
be subject to all applicable securities laws. The transferor or assignor shall bear the cost
related to such transfer or assignment. Certificates representing Units of Limited Partnership
Interest may bear appropriate legends to the foregoing effect.
(c) Redemption. A Limited Partner (or any assignee thereof) may withdraw all or part of his
capital contribution and undistributed profits, if any, from the Partnership in multiples of the
Net Asset Value of a Unit of Limited Partnership Interest (such withdrawal being herein referred to
as “redemption”) as of the last day of a month (the “Redemption Date”) after a request for
redemption has been made to the General Partner; provided that all liabilities, contingent or
otherwise, of the Partnership, except any liability to Partners on account of their capital
contributions, have been paid or there remains property of the Partnership sufficient to pay them.
As used herein, “request for redemption” shall mean a written or oral request in a form specified
by the General Partner and received by the General Partner at least 10 days in advance of the
Redemption Date. The General Partner, in its discretion, may waive the 10 day notice requirement.
A form of Request for Redemption may be obtained by written request to the General Partner.
Redemption of partial Units of Limited Partnership Interest will be permitted at the General
Partner’s discretion. Upon redemption, a Limited Partner (or any assignee thereof) shall receive,
per Unit of Limited Partnership Interest redeemed, an amount equal to the Net Asset Value of a Unit
of Limited Partnership Interest as of the Redemption Date, less any amount owing by such Partner
(and his assignee, if any) to the Partnership. If redemption is requested by an assignee, all
amounts owed by the Partner to whom such Unit of Limited Partnership Interest was sold by the
Partnership as well as all amounts owed by all assignees of such Unit of Limited Partnership
Interest shall be deducted from the Net Asset Value of such Unit of Limited Partnership Interest
upon redemption by any assignee. Payment will be made within 10 business days after the Redemption
Date. The General Partner may temporarily suspend redemptions if necessary in order to liquidate
commodity positions in an orderly manner and may permit less frequent redemptions if it has
received an opinion from counsel that such action is advisable to prevent the Partnership from
being considered a publicly traded partnership by the Internal Revenue Service.
The General Partner may, at its sole discretion and upon notice to the Limited Partners,
declare a special Redemption Date on which date Limited Partners may redeem their Units of Limited
Partnership Interest at Net Asset Value per Unit of Limited Partnership Interest, provided that the
Limited Partners submit requests for redemption in a form acceptable to the General Partner.
The General Partner may require that any Limited Partner redeem his Units of Limited
Partnership Interest on 10 days’ notice to the Limited Partner if, in the sole discretion of the
General Partner, it is in the best interests of the Partnership to require such redemption.
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12. Private Placement of Units of Limited Partnership Interest.
The General Partner on behalf of the Partnership shall (a) cause to be filed a Private
Placement Offering Memorandum and Disclosure Document, and such amendments thereto as the General
Partner deems advisable, with the United States Commodity Futures Trading Commission and/or the
National Futures Association for private placement of the Units of Limited Partnership Interest,
and (b) qualify the Units of Limited Partnership Interest for sale under the securities laws of
such States of the United States as the General Partner shall deem advisable. The General Partner
may make such other arrangements for the sale of the Units of Limited Partnership Interest as it
deems appropriate including, without limitation, the execution on behalf of the Partnership of an
agency agreement with CGM as an agent of the Partnership for the offer and sale of the Units of
Limited Partnership Interest as contemplated in the Memorandum.
13. Admission of Additional Partners.
After the Private Placement of the Units of Limited Partnership Interest has been terminated
by the General Partner, no additional General Partner will be admitted to the Partnership except as
described in Paragraph 18(c). The General Partner may take such actions as may be necessary or
appropriate at any time to offer new Units or partial Units of Limited Partnership Interest and to
admit new or substituted Limited Partners to the Partnership. 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.
14. Special Power of Attorney.
Each Limited Partner does irrevocably constitute and appoint the General Partner, and each
other person or entity that shall after the date of this Agreement become a general partner of the
Partnership, with the power of substitution, as his true and lawful attorney-in-fact, in his name,
place and xxxxx, to execute, acknowledge, swear to, file and record in his behalf in the
appropriate public offices and publish (a) this Agreement and a Certificate of Limited Partnership,
including amendments and/or restatements thereto; (b) all instruments which the General Partner
deems necessary or appropriate to reflect any amendment, change or modification of the Partnership
in accordance with the terms of this Agreement, including any instruments necessary to dissolve the
Partnership; (c) Certificates of Assumed Name; (d) advisory agreements with the Advisor or other
advisory firms; and (e) customer agreements with CGM or other commodity brokerage firms. The Power
of Attorney granted herein shall be irrevocable and deemed to be a power coupled with an interest
and shall survive and not be affected by the subsequent incapacity, disability or death of a
Limited Partner. Each Limited Partner hereby agrees to be bound by any representation made by the
General Partner and by any successor thereto, acting in good faith pursuant to such Power of
Attorney and each Limited Partner hereby waives any and all defenses which may be available to
contest, negate or disaffirm the action of the General Partner and any successor thereto, taken in
good faith under such Power of Attorney. In the event of any conflict between this Agreement and
any instruments filed by such attorney pursuant to the Power of Attorney granted in this Paragraph,
this Agreement shall control.
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15. Withdrawal of a Partner.
The Partnership shall be dissolved and its affairs wound up upon the 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 18). The General Partner shall not
withdraw from the Partnership without giving the Limited Partners 90 days’ prior written notice.
The death, incompetency, withdrawal, insolvency or dissolution of a Limited Partner shall not (in
and of itself) dissolve the Partnership, and such Limited Partner, his estate, custodian or
personal representative shall have no right to withdraw or value such Limited Partner’s interest in
the Partnership except as provided in Paragraph 11 hereof. Each Limited Partner (and any assignee
of such Partner’s interest) expressly agrees that, in the event of his death, he waives on behalf
of himself and his estate, and he directs the legal representative of his estate and any person
interested therein to waive, the furnishing of any inventory, accounting, or appraisal of the
assets of the Partnership and any right to an audit or examination of the books of the Partnership;
provided, however, that this waiver in no way limits the rights of the Limited Partners or their
representatives to have access to the Partnership’s books and records as described in Paragraph 9
hereof.
16. No Personal Liability for Return of Capital.
The General Partner, subject to Paragraph 17 hereof, shall not be personally liable for the
return or repayment of all or any portion of the capital or profits of any Partner (or assignee),
it being expressly agreed that any such return of capital or profits made pursuant to this
Agreement shall be made solely from the assets (which shall not include any right of contribution
from the General Partner) of the Partnership.
17. Indemnification.
(a) The General Partner and its Affiliates shall have no liability to the Partnership or to
any Partner for any loss suffered by the Partnership which arises out of any action or inaction of
the General Partner or its Affiliates if the General Partner or its Affiliates in good faith
determined that such course of conduct was in the best interest of the Partnership and such course
of conduct did not constitute negligence or misconduct of the General Partner or its Affiliates.
To the fullest extent permitted by law, the General Partner and its Affiliates shall be indemnified
by the Partnership against any losses, judgments, liabilities, expenses and amounts paid in
settlement of any claims sustained by them in connection with the Partnership, provided that the
same were not the result of negligence or misconduct on the part of the General Partner or its
Affiliates.
(b) Notwithstanding subparagraph (a) above, the General Partner and its Affiliates shall not
be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation
of federal or state securities laws in connection with the offer or sale of Units of Limited
Partnership Interest.
(c) The Partnership shall not incur the cost of that portion of any insurance which insures
any party against any liability the indemnification of which is herein prohibited.
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(d) For purposes of this Paragraph 17, the term “Affiliates” shall mean any person performing
services on behalf of the Partnership and acting within the scope of the General Partner’s
authority as set forth in this Agreement who: (1) directly or indirectly controls, is controlled
by, or is under common control with the General Partner; or (2) owns or controls 10% or more of the
outstanding voting securities of the General Partner; or (3) is an officer or director of the
General Partner.
(e) The provision of advances from Partnership funds to the General Partner and its
Affiliates for legal expenses and other costs incurred as a result of any legal action initiated
against the General Partner by a Limited Partner of the Partnership is prohibited.
(f) Any indemnification under subparagraph (a) above, unless ordered by a court, shall be
made by the Partnership only as authorized in the specific case and only upon a determination by
independent legal counsel in a written opinion that indemnification of the General Partner or its
Affiliates is proper in the circumstances because it has met the applicable standard of conduct set
forth in subparagraph (a) above.
18. Amendments; Meetings.
(a) Amendments with Consent of the General Partner. If at any time during the term of the
Partnership the General Partner shall deem it necessary or desirable to amend this Agreement
(including the Partnership’s basic investment policies set forth in Paragraph 3(b) hereof), such
amendment shall be effective only if approved in writing by the General Partner and, except as
specified in this subparagraph (a), by Limited Partners owning more than 50% of the Units of
Limited Partnership Interest then outstanding and if made in accordance with the Partnership Act.
Any such supplemental or amendatory agreement shall be adhered to and have the same effect from and
after its effective date as if the same had originally been embodied in and formed a part of this
Agreement.
The General Partner may amend this Agreement without the consent of the Limited Partners in
order (1) to clarify any clerical inaccuracy or ambiguity or reconcile any inconsistency (including
any inconsistency between this Agreement and the Memorandum); (2) to delete or add any provision of
or to this Agreement required to be deleted or added by the staff of any federal or state agency;
or (3) to make any amendment to this Agreement which the General Partner deems advisable (including
but not limited to amendments necessary to effect the allocations proposed herein) provided that
such amendment is not adverse to the Limited Partners, or is required by law.
The General Partner may, however, change the trading policies in Paragraph 3(b) of this
Agreement without the approval of the Limited Partners when such change is deemed to be in the best
interests of the Partnership. In addition, if the General Partner determines to offer Units of
Limited Partnership Interest to the public in the future, the General Partner may amend this
Agreement as necessary to effect such public offering without obtaining the consent of the Limited
Partners, provided, however, that such amendments are deemed to be in the best interests of the
Limited Partners. (Amendments that are consistent with the North American Securities
Administrators Association’s Guidelines for the Registration of Commodity Pools will be presumed to
be in the best interests of the Limited Partners.)
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(b) Meetings. Upon receipt of a written request, signed by Limited Partners owning at least
10% of the Units of Limited Partnership Interest then outstanding, that a meeting of the
Partnership be called to vote upon any matter which the Limited Partners may vote upon pursuant to
this Agreement, the General Partner shall, by written notice to each Limited Partner of record
mailed within 15 days after receipt of such request, call a meeting of the Partnership. Such
meeting shall be held at least 30 but not more than 60 days after the mailing of such notice, and
such notice shall specify the date, a reasonable place and time, and the purpose of such meeting.
(c) Amendments and Actions without Consent of the General Partner. At any meeting called
pursuant to Paragraph 18(b), upon the approval by an affirmative vote (which may be in person or by
proxy) of Limited Partners owning more than 50% of the outstanding Units of Limited Partnership
Interest, the following actions may be taken: (1) this Agreement may be amended in accordance with
and only to the extent permissible under the Partnership Act; (2) the Partnership may be dissolved;
(3) the General Partner may be removed and a new general partner may be admitted immediately prior
to the removal of the General Partner provided that the new general partner of the Partnership
shall continue the business of the Partnership without dissolution; (4) if the General Partner
elects to withdraw from the Partnership, a new general partner or general partners may be admitted
immediately prior to the withdrawal of the General Partner provided that the new general partner of
the Partnership shall continue the business of the Partnership without dissolution; (5) any
contracts with the General Partner, any of its Affiliates or any commodity trading advisor to the
Partnership may be terminated on sixty days’ notice without penalty; and (6) the sale of all of the
assets of the Partnership may be approved; provided, however, that no such action may be taken
unless the Partnership has been furnished with an opinion of counsel that the action to be taken
will not adversely affect the liability of the Limited Partners and that the action is permitted by
the Partnership Act.
(d) Continuation. Upon the assignment by the General Partner of all of its interest in the
Partnership, the withdrawal, removal, bankruptcy or any other event that causes the General Partner
to cease to be a general partner under the Partnership Act, the Partnership is not dissolved and is
not required to be wound up by reason of such event if, (1) there is a remaining general partner
who continues the business of the Partnership or (2) within 90 days after such event, all remaining
Partners agree in writing to continue the business of the Partnership and to the appointment,
effective as of the date of such event, of a successor General Partner.
19. Governing Law.
The validity and construction of this Agreement shall be determined and governed by the laws
of the State of New York.
20. Miscellaneous.
(a) Priority among Limited Partners. With the exception of the Profit Share allocation to
the Special Limited Partner, no Limited Partner shall be entitled to any priority or preference
over any other Limited Partner with regard to the return of contributions of capital or to the
distribution of any profits or otherwise in the affairs of the Partnership.
(b) Notices. All notices under this Agreement, other than reports by the General Partner to
the Limited Partners, shall be in writing and shall be effective upon personal delivery, or,
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if sent by registered or certified mail, postage prepaid, addressed to the last known address
of the party to whom such notice is to be given, upon the deposit of such notice in the United
States mail. Reports by the General Partner to the Limited Partners shall be in writing and shall
be sent by first class mail to the last known address of each Limited Partner.
(c) Binding Effect. This Agreement shall inure to and be binding upon all of the parties,
their successors, permitted assigns, custodians, estates, heirs and personal representatives. For
purposes of determining the rights of any Partner or assignee hereunder, the Partnership and the
General Partner may rely upon the Partnership records as to who are Partners and assignees and all
Partners and assignees agree that their rights shall be determined and that they shall be bound
thereby, including all rights which they may have under Paragraph 18 hereof.
(d) Captions. Captions in no way define, limit, extend or describe the scope of this
Agreement nor the effect of any of its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day first
mentioned above.
General Partner:
Citigroup Managed Futures LLC
| By: | /s/ Xxxxx Xxxxxxxx | |||
| Xxxxx Xxxxxxxx | ||||
| President and Director | ||||
Special Limited Partner:
XxxxXxxxx Partners, L.P.
| By: | /s/ Xxxxxx X. Xxxx | |||
| Xxxxxx X. Xxxx | ||||
| President | ||||
Acknowledged and agreed to by:
XxxxXxxxx Capital, L.P.
XxxxXxxxx Capital, L.P.
| By: | /s/ Xxxxxx X. Xxxx | |||
| Xxxxxx X. Xxxx | ||||
| President | ||||
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Limited Partners:
All Limited Partners now and hereafter admitted as limited partners of the Partnership pursuant to
powers of attorney now and hereafter executed in favor of and delivered to the General Partner.
| By: CITIGROUP MANAGED FUTURES LLC ATTORNEY-IN-FACT |
||||
| By: | /s/ Xxxxx Xxxxxxxx | |||
| Xxxxx Xxxxxxxx | ||||
| President and Director | ||||
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