Document:

Exhibit 10.1

AGREEMENT AND GENERAL RELEASE

This Agreement and General Release (‘‘Agreement’’), is hereby executed by and between Elias Typaldos (‘‘Executive’’ or ‘‘you’’), and AXS-One Inc. (the ‘‘Company’’) on behalf of its past, present and future parent entities, subsidiaries, divisions, affiliates and related business entities, successors and assigns, assets, employee benefit plans or funds, and any of its or their respective past, present and/or future directors, officers, fiduciaries, agents, trustees, administrators, employees and assigns, whether acting as agents for the Company or in their individual capacities (collectively the ‘‘Company Entities’’), and sets forth the parties’ agreement regarding Executive’s termination of employment.

1.    The Company and Executive agree that Executive’s last day of employment with the Company will be August 31, 2007 (the ‘‘Termination Date’’). Executive’s coverage under the various employee benefit plans maintained by the Company shall terminate effective as of the Termination Date. You will be paid your regular salary up to and including the Termination Date. You will also be entitled to such vesting and acceleration of Company stock option grants and restricted stock grants as is provided in any applicable stock plan or grant. A list of applicable grants is attached hereto as Exhibit A.

2.    Following the Effective Date of this Agreement (as defined in paragraph ‘‘18’’ below), and in exchange for your waiver of claims against the Company Entities and compliance with other terms and conditions of this Agreement, and provided you execute, timely return and do not revoke this Agreement, the Company agrees to pay you severance of $600,000. This payment will be made to you as provided in Exhibit B. Executive may purchase, if eligible, continuation health benefits coverage to the extent and for the period provided by federal law (COBRA), however, provided Executive executes, timely returns, and does not revoke this Agreement, the Company will pay for Executive’s COBRA benefits for the shorter of eighteen (18) months from the Effective Date of this Agreement or until such time you become eligible for similar health insurance coverage with a new employer, in addition to, and not as a set off against, the severance set forth above. For the avoidance of doubt, the Company paid COBRA benefits include only medical, prescription, vision and dental insurance, and excludes all other employee benefits you currently are entitled to in your capacity as an employee of the Company. Salary and benefits already paid to you beginning September 1, 2007 shall count towards your severance hereunder.

You agree and acknowledge that the payments and benefits provided for by the above paragraphs constitute full payment to you in your capacity as an employee of the Company of amounts which you might otherwise be entitled under any policy, plan or procedure of the Company or pursuant to any prior agreement or contract with the Company, including but not limited to, your employment agreement dated February 15, 2007 (the ‘‘Employment Agreement’’).

You are under no obligation to seek other employment and there shall be no offset against any amounts due you under this Agreement on account of any remuneration attributable to any subsequent employment that you may obtain. Any amounts due hereunder are in the nature of severance payments and are not in the nature of a penalty.

3.    You agree and acknowledge that the payment(s) and other benefits provided pursuant to this Agreement are in full discharge of any and all liabilities and obligations of the Company to you in your capacity as an employee of the Company, monetarily or with respect to employee benefits or otherwise, including but not limited to any and all obligations arising under any alleged written or oral agreement (including, but not limited to, your employment contract), policy, plan or procedure of the Company and/or any alleged understanding or arrangement between you and the Company.

4.    (a)    In consideration for the payment and benefits to be provided you pursuant to paragraph ‘‘2’’ above, you, for yourself and for your heirs, executors, administrators, trustees, legal representatives and assigns (hereinafter referred to collectively as ‘‘Releasors’’), forever release and discharge the Company Entities from any and all claims, demands, causes of action, fees and liabilities of any kind whatsoever, whether known or unknown, which you ever had, now have, or may have 

against any of the Company Entities in your capacity as an employee of the Company by reason of any act, omission, transaction, practice, plan, policy, procedure, conduct, occurrence, or other matter up to and including the date on which you sign this Agreement. This release shall not apply to or release any claims with respect to any of your rights arising or preserved under the terms of this Agreement, or your rights to indemnification as an officer and director of the Company.

(b)    Without limiting the generality of the foregoing, this Agreement is intended to and shall release the Company Entities from any and all claims, whether known or unknown, which Releasors ever had, now have, or may have against the Company Entities arising out of your employment, and/or the termination of that employment, including, but not limited to: (i) any claim under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974 (excluding claims for accrued, vested benefits under any employee benefit or pension plan of the Company Entities in accordance with the terms and conditions of such plan and applicable law), and the Family and Medical Leave Act; (ii) any claim under the New Jersey Law Against Discrimination, the New Jersey Equal Pay Act, the New Jersey Family Leave Act, and the New Jersey Conscientious Employee Protection Act; (iii) any other claim (whether based on federal, state, or local law, statutory or decisional) relating to or arising out of your employment, the terms and conditions of such employment, the termination of such employment, and/or any of the events relating directly or indirectly to or surrounding the termination of that employment, including but not limited to breach of contract (express or implied), wrongful discharge, detrimental reliance, defamation, emotional distress, retaliation, discrimination or harassment under any applicable law, or compensatory or punitive damages; and (iv) any claim for attorneys’ fees, costs, disbursements and/or the like. Nothing in this Agreement shall be a waiver of claims that may arise after the date on which you sign this Agreement, nor does this Agreement preclude you from filing a charge of discrimination with the U.S. Equal Employment Opportunity Commission (‘‘EEOC’’) or an analogous state agency. You, however, waive any right you may have to recover monetary or other damages, or attorneys’ fees or costs, based on any such charge of discrimination or any action initiated by you or on your behalf by a third party.

(c)    You acknowledge and agree that by virtue of the foregoing, you have waived any relief available to you (including without limitation, monetary damages, equitable relief and reinstatement) under any of the claims and/or causes of action waived in this paragraph ‘‘4’’.

5.    The terms and conditions of this Agreement are and shall be deemed to be confidential, and shall not be disclosed by a party to any person or entity without the prior written consent of the other, except if required by law, and to a party’s accountants, attorneys, financial or investment adviser and/or immediate family members (including parents and siblings), provided that, to the maximum extent permitted by applicable law, rule, code or regulation, they agree to maintain the confidentiality of the Agreement. You further represent that you have not disclosed the terms and conditions of the Agreement to anyone other than your attorneys, accountants, financial or investment adviser and/or immediate family members (including parents and siblings). For the avoidance of doubt, the Company will be required by law to disclose the full terms of this agreement in an 8-K or 10-Q filing with the Securities and Exchange Commission, and file this agreement as an exhibit to such filing.

6.    You acknowledge and reaffirm that you remain bound by the restrictive covenants set forth in Paragraphs 11 and 12 of your Employment Agreement. For purposes of clarification, the restrictive covenants set forth in Subparagraph 11(a) of the Employment Agreement specifically do not apply to your involvement in areas of a competitor’s or a customer’s business that are not related to the archival data management software business similar to the business conducted by the Company, or to your involvement with partners, prospects, customers or others associated with the Company’s archival data management software business.

7.    All developments, including inventions, trade secrets, discoveries, improvements, and writings, which relate to the Company’s operations, products or development efforts, which the Executive, either by himself or with any other persons, has made, developed, acquired or acquired knowledge of during his employment, is and shall remain the sole and exclusive property of the Company. The Executive hereby assigns, transfers and conveys, all of his right, title and interest in and to any and all 

such developments to the Company and the Executive agrees to fully disclose, as soon as practicable, all such developments to the Company. Upon the request of the Company, the Executive will execute and deliver any and all documents and do any and all other acts which are or may be necessary or desirable to document such transfer or to enable the Company to file and prosecute applications for and to acquire, maintain, extend and enforce any and all patents, trademark registrations or copyrights under United States or foreign law with respect to any such developments.

8.    You represent that you have returned to the Company all property belonging to the Company and/or the Company Entities, including but not limited to keys, card access to the building and office floors, Employee Handbook, phone card, rolodex (if provided by the Company and/or the Company Entities), computer user name and password, disks and/or voicemail code. The Company agrees that you may keep your laptop computer. The parties acknowledge full compliance with this Paragraph 8.

9.    If any provision of this Agreement is held to be illegal, void or unenforceable, such provision shall have no effect; however, the remaining provisions shall be enforced to the maximum extent possible. If a court should determine that any portion of this Agreement is overbroad or unreasonable, such provision shall be given effect to the maximum extent possible by narrowing or enforcing in part that aspect of the provision found overbroad or unreasonable.

10.    This Agreement is not intended, and shall not be construed, as an admission that any of the Company Entities has or have violated any federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract or committed any wrong whatsoever against you.

11.    The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance reasonably satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the ‘‘Company’’ for the purposes of this Agreement), but will not otherwise be assignable, transferable or delegable by the Company. This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.

12.    This Agreement shall be construed and enforced in accordance with the laws of the State of New Jersey without regard to the principles of conflicts of law.

13.    This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

14.    You understand that this Agreement constitutes the complete understanding between the Company and you, and, with the exception of the agreement referred to in paragraph ‘‘6’’ above (the applicable provisions of which shall survive the termination of your employment and are incorporated by reference in this Agreement), supersedes any and all agreements, understandings, and discussions, whether written or oral between you and any of the Company Entities. No other promises or agreements shall be binding unless in writing and signed by both an authorized representative of the Company and you after the Release Effective Date.

15.    Exception For Challenge Under the Older Workers Benefit Protection Act:    The provisions of paragraph 4 are not intended to, and shall not affect Executive’s right to file a lawsuit, complaint or charge that challenges the validity of this Agreement under the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), with respect to claims under the Age Discrimination in Employment Act (‘‘ADEA’’). This paragraph is not intended to and shall not limit the right of a court to determine, in its discretion, that the Company is entitled to restitution, recoupment or setoff of any monies paid should the release of ADEA claims in this Agreement be found to be invalid. Neither does this paragraph affect the Company’s right to recover attorneys’ fees or costs to the extent authorized under federal law. The provisions of paragraph 4 shall apply with full force and effect with respect to any other legal proceeding.

16.    Nondisparagement.    The parties represent, each to the other, that they have not and agree that they will not in any way disparage the other and/or its employees, or make or solicit any comments, statements, or the like to the media or to others that may be considered to be derogatory or detrimental to the good name or business reputation of the other and/or its employees. The policy of the Company with respect to inquiries from authorized companies or individuals is to provide only the dates of employment and position(s) held, and the Company shall so inform any company or individual making such an inquiry with respect to Executive. Nothing herein is intended to limit your ability to exercise your fiduciary duties as a director of the Company.

17.    You acknowledge that you: (a) have carefully read this Agreement in its entirety; (b) have had an opportunity to consider this Agreement fully for at least twenty-one (21) days; (c) have been, and are hereby, advised by the Company in writing to consult with an attorney of your choosing in connection with this Agreement; (d) fully understand the significance of all of the terms and conditions of this Agreement and have discussed them with your independent legal counsel, or have had a reasonable opportunity to do so; (e) have had answered to your satisfaction any questions you have asked with regard to the meaning and significance of any of the provisions of this Agreement; and (f) are signing this Agreement voluntarily and of your own free will and agree to all the terms and conditions contained herein.

18.    You understand that you will have at least twenty-one (21) days (the ‘‘Consideration Period’’) from the date of receipt of this Agreement to consider the terms and conditions of this Agreement. You may accept this Agreement by signing it and returning it to Michelle Lutkowski, Human Resources, AXS-One Inc., 301 Route 17 North, Rutherford, NJ 07070. After executing this Agreement, you shall have seven (7) days (the ‘‘Revocation Period’’) to revoke this Agreement by indicating your desire to do so in writing delivered to Michelle Lutkowski at the address above (or by fax at 201-935-5431) by no later than 5:00 p.m. on the seventh (7th) day after the date you sign this Agreement. The effective date of this Agreement shall be the eighth (8th) day after you sign and return the Agreement (the ‘‘Effective Date’’). If the last day of the Consideration or Revocation Period falls on a Saturday, Sunday or holiday, the last day of the Consideration or Revocation Period, as applicable, will be deemed to be the next business day. In the event you do not accept this Agreement as set forth above, or in the event you revoke this Agreement during the Revocation Period, this Agreement, including but not limited to the obligation of the Company to provide the payment(s) and other benefits referred to in paragraph ‘‘2’’ above, shall be deemed automatically null and void.

19.    Any notice given to a Party shall be in writing and shall be deemed to have been given when delivered personally or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the Party concerned at the address indicated below or to such changed address as such party may subsequently give such notice of

If to the Company:

AXS-One Inc., 301 Route 17 North, Rutherford, NJ 07070

If to the Executive:

Elias Typaldos, 15 Prospect Avenue, Montclair, New Jersey 07042

IN WITNESS WHEREOF, the parties have executed this Agreement and General Release on the dates set forth below.

				
	/s/ Elias Typaldos                            			8/13/2007            
	Elias Typaldos			Date

				
	THE COMPANY:			 
	AXS-ONE INC.			 
	By: /s/ Joseph P. Dwyer                   			8/13/2007            
	Print Name: Joseph P. Dwyer			Date
	Title: VP & Chief Financial Officer			 

Exhibit A

Equity Grants

Stock Options

				
	90,000			Fully vested and exercisable within 90 days from Termination Date, at which time, they will expire.

Restricted Stock

				
	30,000			Granted on 3/21/06. These will be forfeited on the Termination Date
	10,000			Granted on 3/21/06. Fully vested as of 3/21/07.
	73,455			Granted on 12/14/06. These will become fully vested on Termination Date.

EXHIBIT B

ELECTION UNDER IRS §409A

This election is made in accordance with IRC §409A by Elias Typaldos (hereinafter referred to as the ‘‘Service Provider’’) with the consent and cooperation of AXS-One Inc. (hereinafter referred to as the ‘‘Service Recipient’’).

Whereas, the Service Provider’s employment is being involuntarily terminated by the Service Recipient as of August 31, 2007; and

Whereas, the Service Provider and the Service Recipient agree that the Service Recipient will pay the Service Provider the sum of Six Hundred Thousand Dollars ($600,000) pursuant to the Agreement that this Exhibit B is annexed to and made a part thereof; and

Whereas, this Exhibit B is intended to comply with IRC §409A to the extent that any compensation paid to the Service Provider by the Service Recipient is subject to IRC §409A, and that this Exhibit B constitutes an election by the Service Provider under IRC §409A.

		
	1. 	Irrevocability:    This election is irrevocable as of August 31, 2007.

		
	2. 	Payment of Separation Pay:    Two Times the Service Provider’s annualized compensation as provided in Treasury Regulation 1.409A-1(b)(9)(iii), but in no event more than four hundred and fifty thousand dollars ($450,000), shall be paid in equal amounts, subject to any withholding requirements, to the Service Provider by the Service Recipient in accordance with the Service Recipient’s normal payroll periods beginning September 1, 2007, with the last payment made on or before August 31, 2009. The balance of the payment of six hundred thousand ($600,000) less that amount paid pursuant to the prior sentence of this paragraph 2, shall be paid as follows:

			
		(a) 	Twenty-five percent (25%) shall be paid by the Service Recipient to the Service Provider in a lump sum on March 15, 2008;

			
		(b) 	The amount remaining after the payment of twenty-five percent (25%) in (a), above, shall be paid in equal payments in accordance with the Service Recipient’s normal payroll procedures for the period March 1, 2008 to August 31, 2009, and the last payment shall be made on or before August 31, 2009.

		
	3. 	Payment in the Event of Death:    In the event that the Service Provider shall die before all payments are made under this Exhibit B, the Service Recipient will continue to pay amounts due under this Exhibit B to the Service Provider’s personal representative, or his assignee, pursuant to the same schedule as if the Service Provider had not died.

I hereby make this election:

				
	8/13/2007            			/s/ Elias Typaldos                            
	Date			Elias Typaldos, Service Provider

We hereby consent to this election:

THE COMPANY:

AXS-ONE INC.

				
	By: /s/ Joseph P. Dwyer            			8/13/2007            
	Print Name: Joseph P. Dwyer			Date
	Title: VP & Chief Financial OfficerAMENDED AND RESTATED ADVISORY AGREEMENT

AGREEMENT made as of the 30th day of June, 2007 among CITIGROUP MANAGED FUTURES LLC, a Delaware limited liability company (‘‘CMF’’), SALOMON SMITH BARNEY DIVERSIFIED 2000 FUTURES FUND L.P., a New York limited partnership (the ‘‘Partnership’’) and SANDRIDGE CAPITAL, LP, a Texas limited partnership (‘‘SandRidge’’ or the ‘‘Advisor’’).

WITNESSETH:

WHEREAS, CMF is the general partner of Salomon Smith Barney Diversified 2000 Futures Fund L.P., a limited partnership organized for the purpose of speculative trading of commodity interests, including futures contracts, options and forward contracts with the objective of achieving substantial capital appreciation, such trading to be conducted directly or through investment in CMF SandRidge Master Fund L.P., a New York limited partnership (the ‘‘Master Fund’’) of which CMF is the general partner and SandRidge is the advisor; and

WHEREAS, the Limited Partnership Agreement establishing the Partnership (the ‘‘Limited Partnership Agreement’’) permits CMF to delegate to one or more commodity trading advisors CMF’s authority to make trading decisions for the Partnership; and

WHEREAS, the Advisor is registered as a commodity trading advisor with the Commodity Futures Trading Commission (‘‘CFTC’’) and is a member of the National Futures Association (‘‘NFA’’); and

WHEREAS, CMF is registered as a commodity pool operator with the CFTC and is a member of the NFA; and

WHEREAS CMF, the Partnership and the Advisor entered into an Advisory Agreement dated as of March 31, 2007 (the ‘‘Initial Advisory Agreement’’); and

WHEREAS, CMF, the Partnership and the Advisor have determined to amend and restate the Initial Advisory Agreement; and

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

NOW, THEREFORE, the parties agree to amend and restate the Initial Advisory Agreement as follows:

1.    DUTIES OF THE ADVISOR. (a) For the period and on the terms and conditions of this Agreement, the Advisor shall have sole authority and responsibility, as one of the Partnership’s agents and attorneys-in-fact, for directing the investment and reinvestment of the assets and funds of the Partnership allocated to it from time to time by the General Partner in commodity interests, including commodity futures contracts, options and forward contracts. The Advisor may also engage in swaps transactions and other derivative transactions on behalf of the Partnership with the prior approval of CMF. All such trading on behalf of the Partnership shall be in accordance with the trading policies set forth in the Partnership’s Prospectus dated November 25, 2002, as supplemented from time to time (the ‘‘Prospectus’’), and as such trading policies may be changed from time to time upon receipt by the Advisor of prior written notice of such change and pursuant to the trading strategy selected by CMF to be utilized by the Advisor in managing the Partnership’s assets. CMF has initially selected the Advisor’s Energy Program (the ‘‘Program’’) to manage the Partnership’s assets allocated to it. Any open positions or other investments at the time of receipt of such notice of a change in trading policy shall not be deemed to violate the changed policy and shall be closed or sold in the ordinary course of trading. The Advisor may not deviate from the trading policies set forth in the Prospectus without the prior written consent of the Partnership given by CMF. The Advisor makes no representation or warranty that the trading to be directed by it for the Partnership will be profitable or will not incur losses.

(b)    CMF acknowledges receipt of the Advisor’s Disclosure Document dated February 2, 2007, as filed with the NFA (the ‘‘Disclosure Document’’). All trades made by the Advisor for the account of the 

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

(c)    The initial allocation of the Partnership’s assets to the Advisor will be made to the Program as described in the Disclosure Document. In the event the Advisor wishes to use a trading system or methodology other than or in addition to the system or methodology outlined in the Disclosure Document in connection with its trading for the Partnership, either in whole or in part, it may not do so unless the Advisor gives CMF prior written notice of its intention to utilize such different trading system or methodology and CMF consents thereto in writing. In addition, the Advisor will provide five days’ prior written notice to CMF of any change in the trading system or methodology to be utilized for the Partnership which the Advisor deems material. If the Advisor deems such change in system or methodology or in markets traded to be material, the changed system or methodology or markets traded will not be utilized for the Partnership without the prior written consent of CMF. In addition, the Advisor will provide the Partnership with a current list of all commodity interests to be traded for the Partnership’s account and will not trade any additional commodity interests for such account without providing notice thereof to CMF and receiving CMF’s written approval. The Advisor also agrees to provide CMF, on a monthly basis, with a written report of the assets under the Advisor’s management together with all other matters deemed by the Advisor to be material changes to its business not previously reported to CMF.

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

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

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

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(g)    The Advisor will not be liable for trading losses in the Partnership’s account including losses caused by errors; provided, however, that (i) the Advisor will be liable to the Partnership with respect to losses incurred due to errors committed or caused by it or any of its principals or employees in communicating improper trading instructions or orders to any broker on behalf of the Partnership and (ii) the Advisor will be liable to the Partnership with respect to losses incurred due to errors committed or caused by any executing broker (other than any CMF affiliate) selected by the Advisor, (it also being understood that CMF, with the assistance of the Advisor, will first attempt to recover such losses from the executing broker).

2.    INDEPENDENCE OF THE ADVISOR. For all purposes herein, the Advisor shall be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Partnership in any way and shall not be deemed an agent, promoter or sponsor of the Partnership, CMF, or any other trading advisor. The Advisor shall not be responsible to the Partnership, the General Partner, any trading advisor or any limited partners for any acts or omissions of any other trading advisor to the Partnership.

3.    COMPENSATION. (a) In consideration of and as compensation for all of the services to be rendered by the Advisor to the Partnership under this Agreement, the Partnership shall (i) pay the Advisor a monthly fee for professional advisory services equal to 1/6 of 1% (2% per year) of the month-end Net Assets of the Partnership allocated to the Advisor; and (ii) an annual incentive fee payable at the end of each calendar year equal to 20% of New Trading Profits (as such term is defined below) earned by the Advisor for the Partnership.

(b)    ‘‘Net Assets’’ shall have the meaning set forth in Section 7(d)(1) of the Limited Partnership Agreement dated as of August 25, 1999 and without regard to further amendments thereto, provided that in determining the Net Assets of the Partnership on any date, no adjustment shall be made to reflect any distributions, redemptions or incentive fees payable as of the date of such determination.

(c)    ‘‘New Trading Profits’’ shall mean the excess, if any, of Net Assets managed by the Advisor at the end of the fiscal period over Net Assets managed by the Advisor at the end of the highest previous fiscal period or Net Assets allocated to the Advisor at the date trading by the Advisor on behalf of the Partnership 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 fiscal period, decreased by interest or other income, not directly related to trading activity, earned on the Partnership’s assets during the fiscal period, whether the assets are held separately or in margin accounts. Ongoing expenses shall be attributed to the Advisor based on the Advisor’s proportionate share of Net Assets as of the end of each month. Ongoing expenses shall not include expenses of litigation not involving the activities of the Advisor on behalf of the Partnership, and will also not include initial offering and organizational expenses of the Partnership. No incentive fee shall be paid until the end of the first calendar year in which trading commences by the Advisor on behalf of the Partnership, which fee shall be based on New Trading Profits earned from the commencement of trading operations by the Advisor on behalf of the Partnership through the end of such year. Interest income earned, if any, will not be taken into account in computing New Trading Profits earned by the Advisor. If Net Assets allocated to the Advisor are reduced due to redemptions, distributions or reallocations (net of additions), there will be a corresponding proportional reduction in the related loss carryforward amount that must be recouped before the Advisor is eligible to receive another incentive fee.

(d)    Monthly advisory fees and annual incentive fees shall be paid within twenty (20) business days following the end of the period for which such fee is payable. In the event of the termination of this Agreement as of any date which shall not be the end of a calendar month or year, as the case may be, the monthly advisory fee shall be prorated to the effective date of termination and the annual incentive fee shall be computed as if the effective date of termination were the last day of the then current year. If, during any month, the Partnership does not conduct business operations or the Advisor is unable to provide the services contemplated herein for more than two successive business days, the monthly advisory fee shall be prorated by the ratio which the number of business days during which CMF conducted the Partnership’s business operations or utilized the Advisor’s services bears in the month to the total number of business days in such month.

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

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

(b)    If, at any time during the term of this Agreement, the Advisor is required to aggregate the Partnership’s commodity positions with the positions of any other person for purposes of applying CFTC- or exchange-imposed speculative position limits, the Advisor agrees that it will promptly notify CMF in writing if the Partnership’s positions are included in an aggregate amount which exceeds the applicable speculative position limit. The Advisor agrees that, if its trading recommendations are altered because of the application of any speculative position limits, it will not modify the trading instructions with respect to the Partnership’s account in such manner as to affect the Partnership substantially disproportionately as compared with the Advisor’s other accounts. The Advisor further represents, warrants and agrees that under no circumstances will it knowingly or deliberately use trading strategies or methods for the Partnership that are inferior to strategies or methods employed for any other client or account and that it will not knowingly or deliberately favor any client or account managed by it over any other client or account in any manner, it being acknowledged, however, that different trading strategies or methods may be utilized for differing sizes of accounts, accounts with different trading policies, accounts experiencing differing inflows or outflows of equity, accounts which commence trading at different times, accounts which have different portfolios or different fiscal years, accounts utilizing different executing brokers and accounts with other differences, and that such differences may cause divergent trading results.

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

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

5.    TERM. (a) This Agreement shall continue in effect until June 30, 2008. CMF may, in its sole discretion, renew this Agreement for additional one-year periods upon notice to the Advisor not less than 30 days prior to the expiration of the previous period. At any time during the term of this Agreement, CMF may terminate this Agreement at any month-end upon 30 days’ notice to the Advisor. At any time during the term of this Agreement, CMF may elect to immediately terminate this Agreement upon 30 days’ notice to the Advisor if (i) the Net Asset Value per Unit of Limited Partnership Interest shall decline as of the close of business on any day to $400 or less; (ii) the Net Assets allocated to the Advisor (adjusted for redemptions, distributions, withdrawals or reallocations, if any) decline by 50% or more as of the end of a trading day from such Net Assets’ previous highest value; (iii) limited partners owning more than 50% of the outstanding units shall vote to require CMF to terminate this Agreement; (iv) the Advisor fails to comply with the terms of this Agreement; (v) CMF, in good faith, reasonably determines that the performance of the Advisor has been such that CMF’s fiduciary duties to the Partnership require CMF to terminate this Agreement; or (vi) CMF reasonably believes that the application of speculative position limits will substantially affect the performance of the Partnership. At any time during the term of this 

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Agreement, CMF may elect immediately to terminate this Agreement if (i) the Advisor merges or consolidates with another entity, sells a substantial portion of its assets, or becomes bankrupt or insolvent, (ii) Andrew M. Rowe dies, becomes incapacitated, leaves the employ of the Advisor, ceases to control the Advisor or is otherwise not managing the trading programs or systems of the Advisor, or (iii) the Advisor’s registration as a commodity trading advisor with the CFTC or its membership in the NFA or any other regulatory authority, is terminated or suspended. This Agreement will immediately terminate upon dissolution of the Partnership or upon cessation of trading prior to dissolution.

(b)    The Advisor may terminate this Agreement by giving not less than 30 days’ notice to CMF (i) in the event that the trading policies of the Partnership as set forth in the Prospectus are changed in such manner that the Advisor reasonably believes will adversely affect the performance of its trading strategies; (ii) after June 30, 2008; or (iii) in the event that the General Partner or Partnership fails to comply with the terms of this Agreement. The Advisor may immediately terminate this Agreement if CMF’s registration as a commodity pool operator or its membership in the NFA is terminated or suspended.

(c)    Except as otherwise provided in this Agreement, any termination of this Agreement in accordance with this Paragraph 5 or Paragraph 1(e) shall be without penalty or liability to any party, except for any fees due to the Advisor pursuant to Paragraph 3 hereof.

6.    INDEMNIFICATION. (a) (i) In any threatened, pending or completed action, suit, or proceeding to which the Advisor was or is a party or is threatened to be made a party arising out of or in connection with this Agreement or the management of the Partnership’s assets by the Advisor or the offering and sale of units in the Partnership, CMF shall, subject to subparagraph (a)(iii) of this Paragraph 6, indemnify and hold harmless the Advisor against any loss, liability, damage, cost, expense (including, without limitation, attorneys’ and accountants’ fees), judgments and amounts paid in settlement actually and reasonably incurred by it in connection with such action, suit, or proceeding if the Advisor acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Partnership, and provided that its conduct did not constitute negligence, intentional misconduct, or a breach of its fiduciary obligations to the Partnership as a commodity trading advisor, unless and only to the extent that the court or administrative forum in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, the Advisor is fairly and reasonably entitled to indemnity for such expenses which such court or administrative forum shall deem proper; and further provided that no indemnification shall be available from the Partnership if such indemnification is prohibited by Section 16 of the Limited Partnership Agreement. The termination of any action, suit or proceeding by judgment, order or settlement shall not, of itself, create a presumption that the Advisor did not act in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Partnership.

(ii)    To the extent that the Advisor has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subparagraph (i) above, or in defense of any claim, issue or matter therein, CMF shall indemnify the Advisor against the expenses (including, without limitation, attorneys’ and accountants’ fees) actually and reasonably incurred by it in connection therewith.

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

(iv)    In the event the Advisor is made a party to any claim, dispute or litigation or otherwise incurs any loss or expense as a result of, or in connection with, the Partnership’s or CMF’s activities or claimed activities unrelated to the Advisor, CMF shall indemnify, defend and hold harmless the Advisor 

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against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees) incurred in connection therewith.

(v)    As used in this Paragraph 6(a), the term ‘‘Advisor’’ shall include the Advisor, its principals, officers, directors, stockholders and employees and the term ‘‘CMF’’ shall include the Partnership.

(b)    (i) The Advisor agrees to indemnify, defend and hold harmless CMF, the Partnership and their affiliates against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees), judgments and amounts paid in settlement actually and reasonably incurred by them (A) as a result of the material breach of any material representations and warranties made by the Advisor in this Agreement, or (B) as a result of any act or omission of the Advisor relating to the Partnership if there has been a final judicial or regulatory determination or, in the event of a settlement of any action or proceeding with the prior written consent of the Advisor, a written opinion of an arbitrator pursuant to Paragraph 14 hereof, to the effect that such acts or omissions violated the terms of this Agreement in any material respect or involved negligence, bad faith, recklessness or intentional misconduct on the part of the Advisor (except as otherwise provided in Paragraph 1(g)).

(ii)    In the event CMF, the Partnership or any of their affiliates is made a party to any claim, dispute or litigation or otherwise incurs any loss or expense as a result of, or in connection with, the activities or claimed activities of the Advisor or its principals, officers, directors, shareholder(s) or employees unrelated to CMF’s or the Partnership’s business, the Advisor shall indemnify, defend and hold harmless CMF, the Partnership or any of their affiliates against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees) incurred in connection therewith.

(c)    In the event that a person entitled to indemnification under this Paragraph 6 is made a party to an action, suit or proceeding alleging both matters for which indemnification can be made hereunder and matters for which indemnification may not be made hereunder, such person shall be indemnified only for that portion of the loss, liability, damage, cost or expense incurred in such action, suit or proceeding which relates to the matters for which indemnification can be made.

(d)    None of the indemnifications contained in this Paragraph 6 shall be applicable with respect to default judgments, confessions of judgment or settlements entered into by the party claiming indemnification without the prior written consent, which shall not be unreasonably withheld, of the party obligated to indemnify such party.

(e)    The provisions of this Paragraph 6 shall survive the termination of this Agreement.

7.    REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

(a)    The Advisor represents and warrants that:

(i)    All references to the Advisor and its principals in the Disclosure Document are accurate in all material respects and as to them the Disclosure Document does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein not misleading.

(ii)    The information with respect to the Advisor set forth in the actual performance tables in the Disclosure Document is based on all of the customer accounts managed on a discretionary basis by the Advisor’s principals and/or the Advisor during the period covered by such tables and required to be disclosed therein. The Advisor’s performance tables have been examined by an independent certified public accountant and the report thereon has been provided to CMF. The Advisor will have its performance tables so examined no less frequently than annually during the term of this Agreement.

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

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

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

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

(vii)    At any time during the term of this Agreement that a prospectus relating to the units is required to be delivered in connection with the offer and sale thereof, the Advisor agrees upon the request of CMF to provide the Partnership with such information as shall be necessary so that, as to the Advisor and its principals, such prospectus is accurate. All references, if any, to the Advisor and its principals in the prospectus will, after review and approval of such references by the Advisor prior to the use of such prospectus in connection with the offering of the Partnership’s units, be accurate in all material respects; provided that with respect to pro forma or hypothetical performance information in the prospectus, if any, this representation and warranty extends only to the underlying data made available by the Advisor for the preparation thereof and not to any hypothetical or pro forma adjustments.

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

(i)    The Prospectus (as from time to time amended or supplemented, which amendment or supplement is approved by the Advisor as to descriptions of itself and its actual performance, if any, included therein) does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein not misleading, except that the foregoing representation does not apply to any statement or omission concerning the Advisor, if any, in the Prospectus, made in reliance upon, and in conformity with, information furnished to CMF by or on behalf of the Advisor expressly for use in the Prospectus (it being understood that any hypothetical or pro forma adjustments to the Advisor’s performance information in the Prospectus, if any, were not furnished by the Advisor.

(ii)    It is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has full limited liability company power and authority to perform its obligations under this Agreement.

(iii)    CMF and the Partnership have the capacity and authority to enter into this Agreement on behalf of the Partnership.

(iv)    This Agreement has been duly and validly authorized, executed and delivered on CMF’s and the Partnership’s behalf and is a valid and binding agreement of CMF and the Partnership enforceable in accordance with its terms.

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

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

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

8.    COVENANTS OF THE ADVISOR, CMF AND THE PARTNERSHIP.

(a) The Advisor agrees as follows:

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

(ii)    The Advisor will promptly notify CMF of the commencement of any material suit, action or proceeding involving it, whether or not any such suit, action or proceeding also involves CMF. The Advisor will provide CMF with copies of any correspondence from or to the CFTC, NFA or any commodity exchange in connection with an investigation or audit of the Advisor’s business activities.

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(iii)    In the placement of orders for the Partnership’s account and for the accounts of any other client, the Advisor will utilize a pre-determined, systematic, fair and reasonable order entry system, which shall, on an overall basis, be no less favorable to the Partnership than to any other account managed by the Advisor. The Advisor acknowledges its obligation to review the Partnership’s positions, prices and equity in the account managed by the Advisor daily and within two business days to notify, in writing, the broker and CMF and the Partnership’s brokers of (i) any error committed by the Advisor or its principals or employees; (ii) any trade which the Advisor believes was not executed in accordance with its instructions; and (iii) any discrepancy with a value of $10,000 or more (due to differences in the positions, prices or equity in the account) between its records and the information reported on the account’s daily and monthly broker statements.

(iv)    The Advisor will maintain a net worth of not less than $1,000,000 during the term of this Agreement.

(b)    Each of CMF and the Partnership agree to:

(i)    comply with all applicable laws, including rules and regulations of the CFTC, NFA and/or the commodity exchange on which any particular transaction is executed; and

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

(iii)    CMF will be responsible for compliance with the USA Patriot Act and related anti-money-laundering regulations with respect to the Partnership and its limited partners.

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

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

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

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

If to CMF:

		
	 	Citigroup Managed Futures LLC

731 Lexington Avenue, 25th Floor

 New York, New York 10022

Attention: Mr. Jerry Pascucci

If to the Advisor:

		
	 	SandRidge Capital, LP

1300 Post Oak Blvd.

Suite 325

Houston, TX 77056

Attention: Mr. Andrew M. Rowe

with a copy to:

		
	 	David R. Allen

 407 East Main Street

 Murfreesboro, TN 37130

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

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

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

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

				
	CITIGROUP MANAGED FUTURES LLC
	By			/s/ Jerry Pascucci
	 			Jerry Pascucci

President and Director
	SALOMON SMITH BARNEY DIVERSIFIED 2000 FUTURES FUND L.P.
	By:			Citigroup Managed Futures LLC

 (General Partner)
	By			/s/ Jerry Pascucci
	 			Jerry Pascucci

President and Director
	SANDRIDGE CAPITAL, LP
	By:			SandRidge Capital Management GP, LLC

 (General Partner)
	By			/s/ Andrew M. Rowe
	 			Andrew M. Rowe

Managing Member

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