AMENDED AND RESTATED AGENCY AGREEMENT
SMITH BARNEY POTOMAC FUTURES FUND L.P.
(A NEW YORK LIMITED PARTNERSHIP)
UNITS OF LIMITED PARTNERSHIP INTEREST
April 1, 2001
Salomon Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Re: Smith Barney Potomac Futures Fund L.P.
- ---------------------------------------
Gentlemen:
Smith Barney Potomac Futures Fund L.P. (the "Partnership") was organized as
a limited partnership under the New York Revised Uniform Limited Partnership
Act, as amended (the "Partnership Act") for the purpose of speculative trading
in commodity interests including futures contracts, options, spot and forward
contracts. Smith Barney Futures Management LLC ("SBFM" or the "General Partner"
has been elected general partner of the Partnership and SFG Global Investments,
Inc. has withdrawn as general partner of the Partnership, effective as of the
date hereof. You, the Partnership and SBFM entered into an agency agreement
dated April 22, 1997 (the "Initial Agency Agreement"). This Amended and Restated
Agency Agreement (the "Agreement") supersedes the Initial Agency Agreement in
all respects.
The General Partner desires to raise capital for the Partnership by the
sale of units of limited partnership interest therein (the "Units") to certain
qualified investors pursuant to Rule 506 of Regulation D ("Reg. D") under
section 4(2) of the Securities Act of 1933, as amended (the "Securities Act").
The General Partner, the Partnership, the business of the Partnership and the
Units are described in a Private Placement Offering Memorandum and Disclosure
Document dated August 24, 2000, prepared by the General Partner. As used in this
Agreement, "Memorandum" refers to that Private Placement Offering Memorandum and
Disclosure Document, including the appendices thereto, unless such memorandum or
appendices have been supplemented or amended, in which case the term shall
refer, from and after the time the supplement or amendment is delivered to you,
to the memorandum and appendices as so amended and supplemented. The commodity
trading advisor to the Partnership is currently Campbell & Company, Inc. (the
"Advisor").
The subscribers for Units will be required to execute the Subscription
Agreement, a copy of which is attached as an appendix to the Memorandum, and to
tender or cause to be tendered for each Unit subscribed cash in the amount of
the Net Asset Value per Unit on the date of purchase. Subscribers for Units
whose Subscription Agreements are accepted by the General Partner will become
limited partners of the Partnership (the "Limited Partners") upon the execution
by the General Partner as attorney-in-fact for each such subscriber of the
Second Amended and Restated Limited Partnership Agreement, a copy of which is
attached as an appendix to the Memorandum (the "Partnership Agreement"), and at
the time such subscribers' names are entered in the books and records of the
Partnership.
Section 1. Appointment of Agent.
On the basis of the representations, warranties and covenants contained in
this Agreement, but subject to the terms and conditions set forth in it, you are
hereby appointed the exclusive agent of the Partnership during the offering
period specified in this Section, for the purpose of finding subscribers for the
Units for the account and risk of the Partnership through a private offering.
The offering period will continue until the General Partner terminates it (the
"Continuous Offering"). Units or partial Units sold during the Continuous
Offering will be sold at Net Asset Value per Unit as of the last day of each
month, provided that the General Partner may determine to offer no Units in a
particular month. Subject to the performance by the General Partner of all of
its obligations to be performed under this Agreement and to the completeness and
accuracy of all material representations and warranties of the General Partner
contained in this Agreement, you hereby accept such agency and agree on the
terms and conditions set forth in this Agreement to use your best efforts during
the Continuous Offering to find subscribers for the Units. Your agency under
this Agreement, which is coupled with an interest and, therefore, is not
terminable by the General Partner without your permission, will continue until
the termination of the Continuous Offering.
Section 2. Representations and Warranties of the Partnership and the General
Partner.
(a) The Partnership and the General Partner jointly and severally represent
and warrant to you, for your benefit, and for the benefit of the purchasers of
the Units that:
(i) They will deliver to you such number of copies of the Memorandum as you
may reasonably request, regardless of whether the Units are offered solely to
"accredited investors" as defined in Rule 501(a) of Reg. D. They will not make
any amendment or supplement to the Memorandum until they have given you a copy
thereof and reasonable notice of the same, and no such amendment or supplement
will be made if you reasonably object thereto.
(ii) The Memorandum complies with Rule 502(b)(2) of Reg. D and the
information to be made available or furnished to each purchaser of a Unit
pursuant to Section 5(f) hereof or otherwise will be sufficient to comply with
Rule 502(b)(2)(iv) and 502(b)(2)(v) of Reg. D.
(iii) The Memorandum will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(iv) All action required under the Partnership Agreement or otherwise to be
taken by the General Partner before the subscription for and sale of the Units
to subscribers therefor has been taken or before the Monthly Closing dates, as
defined in Section 4 hereof, will have been taken, and upon (i) payment of the
consideration therefor specified in the Subscription Agreement, (ii) acceptance
by the General Partner of each subscriber acceptable to the General Partner, and
(iii) the payment of any required filing fee, the subscribers will become
Limited Partners of the Partnership entitled to all the rights of Limited
Partners under the Partnership Agreement and the Partnership Act. The Units,
when sold and paid for as contemplated by the Memorandum, will represent validly
authorized and duly issued limited partnership interests in the Partnership and
will conform to all statements relating thereto contained in the Memorandum,
including the Partnership Agreement.
(v) The Partnership is a limited partnership duly and validly organized
pursuant to the Partnership Agreement and the laws of New York, and is validly
existing under, and subject to, the laws of New York with full power and
authority to conduct the business in which it proposes to engage as described in
the Memorandum. A Limited Partner will have no liability in excess of his
capital contribution and his share of Partnership assets and undistributed
profits except as set forth in Section 7(f) of the Partnership Agreement and in
the Partnership Act.
(vi) There is no action, suit, litigation or proceeding before or by any
court or governmental agency, federal, state or local, pending or threatened
against or affecting or involving the property or business of the General
Partner, or the business of the Partnership, that would materially and adversely
affect the condition (financial or otherwise), business or prospects of the
General Partner or the Partnership.
(vii) Neither the Partnership, the General Partner nor any person directly
or indirectly affiliated with any of them has, either directly or through an
agent, sold or offered for sale or solicited offers to subscribe for or buy, or
approached potential investors for or otherwise negotiated in respect of, the
Units except for the activities of the General Partner in approaching potential
investors undertaken in cooperation with you after advance consultation with
you; and neither the Partnership, the General Partner nor any person directly or
indirectly affiliated with any of them has, either directly or through an agent,
participated in the organization or management of any partnership or other
entity, or has engaged in any other activity, in a manner or under circumstances
that would jeopardize the status of the offering of the Units as an exempted
transaction under the Securities Act or under the laws of any state in which it
is represented by the General Partner that the offering may be made.
(viii) This Agreement and the Partnership Agreement have been duly and
validly authorized, executed and delivered by and on behalf of the General
Partner and constitute valid and binding agreements of the General Partner
enforceable in accordance with their terms. This Agreement and the Subscription
Agreements have been or will be duly and validly authorized, executed and
delivered by and on behalf of the Partnership and constitute or will constitute
valid and binding agreements of the Partnership enforceable in accordance with
their terms.
(ix) The execution and delivery of this Agreement, the Subscription
Agreements and the Partnership Agreement, and the consummation of the
transactions contemplated in this Agreement and in the Memorandum, do not
conflict with and will not constitute a breach of, or default under, the
certificate of formation or limited liability company agreement of the General
Partner or any agreement or instrument by which it is bound by any order, rule
or regulation applicable to it of any court or any governmental body or
administrative agency having jurisdiction over it.
(x) A separate escrow account has been opened at European American Bank,
New York, New York (the "Escrow Agent") and will be maintained for all funds
received from subscribers for Units. All payments received from persons desiring
to purchase Units will be deposited in such account and held in accordance with
the terms of the Escrow Agreement entered into with the Escrow Agent.
Section 3. Your Representations and Warranties.
You represent and warrant to and for the benefit of the Partnership and the
General Partner that:
(a) You will not offer or sell the Units by any form of general
solicitation or general advertising within the meaning of Rule 502(c) of Reg. D.
(b) Where required by applicable state law or regulation, you will initiate
contact with a prospective offeree only after determining that the suitability
and sophistication standards described in the Memorandum are likely to be
satisfied with respect to such prospective offeree and, where applicable, only
after having obtained an executed Purchaser Representative Questionnaire.
(c) You will not offer the Units for sale to, or solicit any offers to
subscribe for the Units from, any offeree who resides in a state whose
securities or "blue sky" laws require offerees to meet specified qualifications
unless such offeree meets such qualifications or which laws require offerees to
receive disclosure documents until you have delivered (or directed the General
Partner to deliver) the Memorandum, the Partnership Agreement, and any other
agreement or document that may be attached as an exhibit or appendix referred to
in and distributed with the Memorandum or any other information provided by the
General Partner which is required to be delivered to purchasers pursuant to Rule
502(b)(2) of Reg. D to such offeree, and within a reasonable time prior to the
Monthly Closing you shall deliver (or cause the General Partner to deliver) all
such documents to all persons who are to purchase the Units, to the extent they
have not theretofore received such documents. In connection with the offering,
you will not represent to any person acquiring Units any material facts relating
to the offering unless such facts are contained in the Memorandum or have been
provided to you in writing by the General Partner.
(d) You will make offers to sell Units to, or solicit offers to subscribe
for Units from, persons in only those states or other jurisdictions where the
General Partner has either qualified or registered the offering for sale or
where the General Partner has determined that an exemption from such
qualification or registration is available under the applicable securities or
"blue sky" statutes of such states or other jurisdictions. You will not sell
Units to any person unless, immediately before making such sales, you reasonably
believe such person (i) would be able to represent that such person is acquiring
the Units for such person's own account as principal for investment and not with
a view to resale or distribution, (ii) qualifies as an accredited investor under
Rule 501 of Reg. D and (iii) meets such other suitability standards as are
specified in the Memorandum under the caption "Who Should Invest" and the other
conditions contained in the Subscription Agreement.
(e) You will maintain a record of all information obtained by you
indicating that subscribers for Units meet the suitability standards referred to
in Section 3(d) hereof. The General Partner will approve or reject the
subscriptions and notify you of the same.
(f) You are a member in good standing of NASD Inc.
Section 4. Closings.
During the Continuous Offering, closings may be held as of the last
business day of each month ("Monthly Closings").
Section 5. Covenants of the Partnership and the General Partner.
The Partnership and the General Partner covenant with you that:
(a) If any event occurs before a Monthly Closing and relates to or affects
the business or condition (financial or other) of the General Partner or the
Partnership which makes it necessary to amend or supplement the Memorandum in
order that the Memorandum will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time it
is delivered to a subscriber, the General Partner forthwith will prepare and
furnish to you a reasonable number of copies of the amendment or amendments of,
or supplement or supplements to, the Memorandum (in form and substance
satisfactory to you and your counsel) that will so amend or supplement the
Memorandum.
(b) They will qualify or register the Units for offering and sale under, or
establish the exemption of the offering and sale of the Units from qualification
or registration under, the applicable securities or "blue sky" laws of the
jurisdictions listed in Appendix I hereto and use their best efforts to qualify
in such other jurisdictions as you may reasonably request in writing; provided,
however, that neither of them will be obligated to qualify as a dealer in
securities in any jurisdiction in which it is not so qualified. The General
Partner will promptly notify you in writing of such qualification, registration
or exemption in each such jurisdiction and of any modification, rescission or
withdrawal of any such qualification, registration or exemption. The General
Partner will not consummate a sale of a Unit in any jurisdiction in which such
sale may not be lawfully made and will not consummate any sale otherwise than in
accordance with the restrictions and limitations, if any, set forth or referred
to in such survey.
(c) Neither they nor any of their affiliates will, either directly or
through an agent (other than you), sell or offer for sale, or solicit offers to
subscribe for or buy or approach potential offerees for, or otherwise negotiate
in respect of, the Units except for the activities of the General Partner in
approaching potential offerees undertaken in cooperation with you after advance
consultation with you.
(d) The Partnership will apply the proceeds from the sale of the Units for
the purposes set forth under "Use of Proceeds" in the Memorandum in
substantially the amounts and at the times indicated thereunder.
(e) Neither they nor any person directly or indirectly affiliated with
either of them is or will be engaged, as a general partner, sponsor or otherwise
(i) in the organization or management of any partnership, fund or other entity,
in a manner or under circumstances which, in the opinion of their counsel, will
jeopardize the status of the offering of the Units as an exempted transaction
under the Securities Act or under the laws of any state in which it is
represented by them that the offering may be made, or (ii) in any offering of
securities which, when integrated with the offering of the Units in the manner
prescribed by Rule 501(a) of Reg. D and SEC Release No. 33-4552 (Nov. 9, 1962)
will jeopardize the status of the offering of the Units as an exempted
transaction under Reg. D.
(f) At all times during the Continuous Offering and before each Monthly
Closing, they will (i) make available to each potential purchaser and to the
purchaser's representative, if any, such information (in addition to that
contained in the Memorandum) concerning themselves, the offering and any other
relevant matters, as they possess or can acquire without unreasonable effort or
expense, and (ii) provide to each potential purchaser and to any purchaser
representatives the opportunity to ask questions of, and receive answers from,
them concerning the terms and conditions of the offering and the business of the
Partnership and to obtain any other additional information, to the extent they
possess the same or can acquire it without unreasonable effort or expense,
necessary to verify the accuracy of the information furnished to the potential
purchaser or any purchaser representatives.
(g) Before each Monthly Closing, they will provide to each purchaser the
information required to be delivered by Rule 502(b)(2)(iii) and 502(b)(iv).
(h) Within 15 days of receiving from you copies of information indicating
that subscribers meet the suitability standards, the General Partner will
approve or reject the subscriptions and notify you of the same.
(i) The General Partner has filed five copies of a notice on
Form D with the Securities and Exchange Commission no later than 15 days after
the first sale of a Unit pursuant to Rule 503 under Reg. D. The General Partner
shall comply with any filing requirement imposed by the laws of any state or
jurisdiction in which sales are made. The General Partner shall furnish you and
your counsel with copies of all filings made on Form D pursuant hereto.
Section 6. Payment of Expenses, Fees and Interest Income.
The Partnership will pay its ongoing legal, accounting, filing, reporting,
and data processing fees which are estimated at approximately $50,000 annually.
In consideration for your entering into this Agreement, you will act as the
Partnership's commodity broker/dealer as described in the Memorandum and be
compensated as described in the Memorandum pursuant to a Second Amended and
Restated Customer Agreement of even date herewith.
All of the Partnership's funds will be deposited in cash in a commodity
brokerage account with you. You will deposit the funds in segregated bank
accounts as required by the Commodity Futures Trading Commission regulations.
Such accounts do not earn interest. You will pay monthly interest to the
Partnership on 80% of the average daily equity maintained in cash in the
Partnership's brokerage accounts during each month at a 30-day Treasury bill
rate.
Section 7. Conditions of Your Obligations.
Your obligations under this Agreement are subject to the accuracy of and
compliance with the representations and warranties of the Partnership and the
General Partner made in Section 2 hereof, to the performance by the Partnership
and the General Partner of their obligations under this Agreement.
If any of the conditions specified in this Section 7 have not
been fulfilled when and as required by this Agreement to be fulfilled, you may
cancel this Agreement and all your obligations under it by notifying the General
Partner of such cancellation in writing or by telegram at any time at or before
any Monthly Closing and any such cancellation will be without liability or
obligation of any party to any other party except as otherwise provided in
Section 5, Section 6 and Section 9 hereof.
Section 8. Conditions of the Obligations of the Partnership and the General
Partner.
The obligations of the Partnership and the General Partner under this
Agreement are subject to the performance by you of your obligations under the
same and to the further condition that the Partnership and the General Partner
will have received your certificate stating that you have offered the Units for
sale, or solicited offers to subscribe for or buy Units, or otherwise negotiated
with any person with respect to the Units, only in such manner and under such
circumstances as are in compliance with the securities or "blue sky" laws of the
jurisdictions designated by you in accordance with Section 5(b) hereof.
Section 9. Indemnification and Contribution.
You will indemnify and hold harmless the Partnership and the General
Partner and their officers, directors and employees, against any and all loss,
liability, claim, damage, expense, judgment or amount paid in settlement
(including reasonable attorneys' fees) with respect to statements or omissions
in the Memorandum made with respect to you or your obligations under this
Agreement made in reliance upon and in conformity with information furnished to
the General Partner by you expressly for use in the Memorandum.
Section 10. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or contained in certificates or opinions delivered pursuant to this Agreement
will remain operative and in full force and effect, regardless of any
investigation made by or on behalf of you or by or on behalf of the General
Partner and will survive the Monthly Closings.
Section 11. Notices and Authority to Act.
All communications herein shall be in writing and, if sent to you, will be
mailed, delivered or telegraphed and confirmed to you at:
Salomon Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Attention: David J. Vogel
or if sent to the General Partner, will be mailed, delivered or telegraphed and
confirmed to the General Partner at:
Smith Barney Futures Management LLC
388 Greenwich Street - 7th floor
New York, New York 10013
Attention: David J. Vogel
Section 12. Parties.
This Agreement will inure to the benefit of and be binding upon you, the
Partnership and the General Partner and your and their respective successors,
heirs and representatives. This Agreement and its conditions and provisions are
intended to be and are for the sole and exclusive benefit of the parties to it
and their respective successors, heirs and representatives, and not for the
benefit of any other person, firm or corporation unless expressly stated
otherwise.
Section 13. Governing Law.
This Agreement shall be governed by and construed under the laws of the
State of New York.
Section 14. Waiver.
Any party to this Agreement may waive compliance by the other
with any of the terms, provisions and conditions set forth in this Agreement.
Section 15. Entire Agreement.
This Agreement contains the entire agreement between the parties to it, and
is intended to supersede any and all prior agreements between those parties,
relating to the same subject matter.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among you, the
Partnership and the General Partner, in accordance with its terms.
Sincerely,
SMITH BARNEY FUTURES MANAGEMENT LLC
By: /s/ David J. Vogel
David J. Vogel
President and Director
SMITH BARNEY POTOMAC FUTURES FUND L.P.
Smith Barney Futures Management LLC
(General Partner)
By: /s/ David J. Vogel
David J. Vogel
President and Director
Confirmed, accepted and agreed to as of the date first above written.
SALOMON SMITH BARNEY INC.
By: /s/ David J. Vogel
David J. Vogel
APPENDIX I
BLUE SKY SURVEY