APPENDIX A Third Amended and Restated Limited Partnership Agreement of Orion Futures Fund L.P.
Exhibit 3.1
APPENDIX A
Third Amended and Restated Limited Partnership Agreement
of Orion Futures Fund L.P.
of Orion Futures Fund L.P.
This Third Amended and Restated Limited Partnership Agreement (this “Agreement”), dated and
effective as of June 1, 2011, is by and among Ceres Managed Futures LLC (formerly Citigroup Managed
Futures LLC) (the “General Partner”) and those other parties who shall execute this Agreement,
whether in counterpart or by attorney-in-fact, as limited partners (the “Limited Partners,”
together with the General Partner, the “Partners” and each, a “Partner”). This Agreement amends
and restates the Second Amended and Restated Limited Partnership Agreement dated as of December 17,
2009 (the “Second Amended and Restated Limited Partnership Agreement”), by and among the General
Partner and the other limited partners party thereto.
W I T N E S S E T H:
WHEREAS, on March 22, 1999, Orion Futures Fund L.P. (formerly Citigroup Orion Futures Fund
L.P.) (the “Partnership”) was formed for the purpose of trading in commodity interests, including
futures contracts, forward contracts, physical commodities and options, directly and through
investment in other commodity pools, pursuant to the Partnership’s initial limited partnership
agreement, dated as of March 22, 1999 (the “Initial Agreement” and together with the Amended and
Restated Limited Partnership Agreement, dated as of
April 1, 2001, and the Second Amended and Restated Limited Partnership Agreement, the “Prior
Agreement”), by and among an initial limited partner (the “Initial Limited Partner”), SFG Global
Investments, Inc. (the “Initial General Partner”) and the other limited partners party thereto; and
WHEREAS, this Agreement has been amended previously, among other things, to reflect (a) the
replacement of the Initial General Partner as general partner of the Partnership with Xxxxx Xxxxxx
Futures Management, Inc. (a predecessor to Ceres Managed Futures LLC), (b) various changes to the
names of the General Partner and the Partnership and (c) remove certain restrictions on the Limited
Partners’ ability to assign, transfer or otherwise dispose of their Units of Limited Partnership
Interest; and
WHEREAS, the General Partner has deemed it advisable to amend the Prior Agreement to (i) offer
multiple classes of Units of Limited Partnership Interest, and (ii) reduce the notice period for
redemption requests; and
WHEREAS, the General Partner, consistent with the requirements of Paragraph 17(a) of the Prior
Agreement, has determined that such amendments are not adverse to and do not require the consent of
the Limited Partners; and
WHEREAS, the General Partner, consistent with the requirements of Paragraph 17(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 parties formed a limited partnership under the New York Revised Uniform Limited
Partnership Act (the “Partnership Act”). The name of the limited partnership is Orion Futures 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 in commodities of all descriptions (including futures contracts, commodity
options, forward contracts and any other rights or interests pertaining thereto, including
interests in commodity pools). The objective of the Partnership business is appreciation of its
assets through speculative trading.
(b) The Partnership shall not:
(1) engage in the pyramiding of its positions by using unrealized profits on existing
positions as margin for the purchase or sale of additional positions in the same or related
commodities;
(2) utilize borrowings except short-term borrowings if the Partnership takes delivery of cash
commodities; or
(3) permit the churning of its account.
(c) The Partnership shall make no loans. Assets of the Partnership will not be commingled
with assets of any other entity. Deposit of assets with a commodity broker or dealer as margin
shall not constitute commingling.
4. Term, Dissolution and Fiscal Year.
(a) Term. The term of the Partnership commenced on the date the Certificate of Limited
Partnership was filed with the State of New York Department of State, and shall end as soon as
practicable upon the first to occur of the following: (1) December 31, 2019; (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 all Classes (as defined below) of Units of Limited Partnership Interest
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then outstanding, notice of which is sent by registered mail to the General Partner not less
than 90 days prior to the effective date of such dissolution; (3) assignment by the General Partner
of all of its interest in the Partnership, withdrawal, removal, bankruptcy or any other event that
causes the General Partner to cease to be a general partner under the Partnership Act (unless the
Partnership is continued pursuant to Paragraph 17); (4) the Net Asset Value per Unit of Limited
Partnership Interest of any Class declines on any business day after trading to less than $400; 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 aggregate Net Assets of the Partnership 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 first for the
return of their contributions and second respecting their Partnership interests, in the proportions
in which the Partners share in distributions. Following distributions of the assets of the
Partnership, a Certificate of Cancellation for the Partnership shall be filed as required by the
Partnership Act.
(c) Fiscal Year. The fiscal year of the Partnership will commence on January 1 and end on
December 31 each year (“fiscal year”). Each fiscal year of the Partnership is divided into four
fiscal quarters commencing on the first day of January, April, July and October (“fiscal quarter”).
5. Net Worth of General Partner.
The General Partner 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 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
Class A or Class Z “Units of Limited Partnership Interest” which the General Partner on behalf of
the Partnership shall, in accordance with the Private Placement Offering Memorandum and Disclosure
Document (the “Memorandum”) referred to in Paragraph 11, sell to persons desiring to become Limited
Partners who satisfy the investment and minimum capital contribution requirements specific to each
Class. Identical rights, powers, duties and obligations attach to each Class of Units of Limited
Partnership Interest, except that purchasers of Class Z units may be subject to reduced brokerage
charges.
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The Class of Units of Limited Partnership Interest that a Limited Partner receives shall
generally depend upon the status of such Limited Partners. Units of Limited Partnership Interest
purchased by certain employees of Xxxxxx Xxxxxxx Xxxxx Xxxxxx or its affiliates (and their family
members) shall be designated as Class Z units. The General Partner may also offer Class Z units to
certain of the Limited Partners receiving advisory services from a Xxxxxx Xxxxxxx Xxxxx Xxxxxx
financial advisor or private wealth advisor (each a “Consulting Client’). All other Limited
Partners who satisfy the applicable investment and minimum capital contribution requirements shall
receive Class A units or such other classes of Units of Limited Partnership Interest (together with
Class A Units of Limited Partnership Interest and Class Z Units of Limited Partnership Interest,
the “Classes”) as the General Partner may determine in its sole discretion to offer from time to
time.
In the event that the General Partner offers Class Z units to Consulting Clients, such
Consulting Clients shall be bound by the terms of the consulting agreement they signed with their
Xxxxxx Xxxxxxx Xxxxx Xxxxxx financial advisor or private wealth advisor (each such agreement, a
“Consulting Agreement”), including the payment of a consulting fee as set forth in the Consulting
Agreement. In the event, however, that a Consulting Client’s Consulting Agreement is terminated
and the Consulting Client remains a Limited Partner, the Class Z units shall, beginning on the
first day of the month immediately following the month of termination of the Consulting Agreement,
(i) convert to the appropriate Class of units based on investor qualifications and the aggregate
capital contributions made by such Limited Partner in the Partnership, adjusted for additional
subscriptions, redemptions and exchanges, and (ii) become subject to the applicable brokerage fee
as described in the Memorandum. For the avoidance of any doubt, Class Z units are subject to
withdrawal restrictions set forth in this Agreement and the Memorandum.
For any Unit (or partial unit rounded to four decimal places) of Limited Partnership Interest
purchased, a Limited Partner shall contribute to the capital of the Partnership an amount equal to
the Net Asset Value of such 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.
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. 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.
The General Partner may, without the consent of the Limited Partners, offer additional classes
of Units of Limited Partnership Interest as it may determine in its sole discretion to offer from
time to time.
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
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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, the following determinations and allocations shall be made:
(1) The Net Asset Value per Class (as defined in Paragraph 7(d)(1)) and the Net Assets of the
Partnership (as defined in Paragraph 7(d)(2)) before any management, administrative and incentive
fees payable by the Partnership as of such date shall be determined.
(2) Monthly management fees, if any, payable by the Partnership as of such date shall then be
charged against the Net Asset Value per Class for each outstanding Class.
(3) Monthly administrative fees, if any, payable by the Partnership to the General Partner as
of such date shall then be charged against the Net Asset Value per Class for each outstanding
Class.
(4) Incentive fees, if any, shall then be charged against the Net Asset Value per Class for
each outstanding Class.
(5) Any increase or decrease in the Net Asset Value per Class as of the end of the month
(after the adjustments in subparagraphs (2)—(4) above) shall then be credited or charged to the
capital accounts of each Partner in the ratio that the balance of each account bears to the balance
of all accounts.
(6) Any amount paid to a Limited Partner on redemption of Units of Limited Partnership
Interest, and any amount paid to the General Partner on redemption of Units of General Partnership
Interest, shall be charged to that Partner’s capital account.
(c) Allocation of Profit and Loss for Federal Income Tax Purposes. The Partnership’s
realized capital gain or loss and ordinary income or loss shall be allocated among the Partners in
the ratio that each Partner’s capital account bears to all Partners’ capital accounts. Any Partner
who acquires or redeems Units of Limited or General Partnership Interest during any fiscal year
will be allocated his proportionate share of the capital gain or loss and ordinary income or loss
realized by the Partnership during the period that such Units of Limited or General Partnership
Interest were owned by such Partner, based on the ratio that the capital accounts allocable to such
acquired or redeemed Units of Limited or General Partnership Interest bear to the capital accounts
allocable to all Partners’ Units of Limited or General Partnership Interest for such period. Any
Partner who transfers or assigns Units of Limited or General Partnership Interest during any fiscal
year shall be allocated his proportionate share of the capital gain or loss and ordinary income or
loss realized by the Partnership through the end of the month in which notice of such transfer or
assignment is given to the General Partner in accordance with Paragraph 10(b) hereof, and the
transferee or assignee of such Units shall be allocated his proportionate share of the capital gain
or loss and ordinary income or loss realized by the Partnership commencing with the month next
succeeding the month in which notice of transfer or assignment is given. The method of allocating
gains and losses for tax purposes may be changed by the General Partner upon receipt of advice from
counsel to the Partnership that such change is required by applicable law or regulation.
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(d) Definitions.
(1) Net Assets per Class. Net Assets per Class shall mean the total assets attributable to
each Class, as determined by the General Partner, including all cash, Treasury bills, accrued
interest and the market value of all open commodity positions maintained by the Partnership for
such Class, less all liabilities attributable to each Class, as determined by the General Partner,
including brokerage charges accrued and other liabilities, determined in accordance with generally
accepted accounting principles under the accrual basis of accounting. The value of a commodity
futures or option contract is the unrealized gain or loss on the contract that is determined by
marking it to the current settlement price for a like contract acquired on the valuation date.
Physical commodities, options, forward contracts and futures contracts, when no market quote is
available, will be valued at their fair market value as determined in good faith by the General
Partner. U.S. Treasury securities and other interest bearing obligations will be valued at cost
plus accrued interest. Interests in other commodity pools will be valued at their net asset value
as determined by the pool operator, or, if the General Partner has not received such determination
or believes that fairness so requires, at fair value determined by the General Partner. Net Assets
per Class equals Net Asset Value per Class.
(2) Net Assets of the Partnership. The Net Assets of the Partnership equals the sum of Net
Assets per Class, of all outstanding Classes.
(3) Net Asset Value per Unit. The Net Asset Value per Unit of each Unit of Limited
Partnership Interest and each Unit of General Partnership Interest for each Class shall be
determined by dividing the Net Asset Value per Class by the aggregate number of Units of Limited
and General Partnership Interest outstanding in such Class.
(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 management and incentive fees. The General Partner shall bear all
other operating expenses except legal, accounting, filing, data processing and reporting fees and
extraordinary expenses. Appropriate reserves may be created, accrued and charged against Net
Assets of the Partnership for contingent liabilities, if any, as of the date any such contingent
liability becomes known to the General Partner.
(f) Limited Liability of Limited Partners.
(1) Each Unit of Limited Partnership Interest, when purchased by a Limited Partner, subject
to the qualifications set forth below, shall be fully paid and non-assessable.
(2) A Limited Partner 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
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Partnership. In no event shall a Limited Partner be entitled to demand and receive property
other than cash.
8. Management of the Partnership.
(a) General. 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 (i) the power to select trading
advisors and allocate assets among them; and (ii) the duty to make trading decisions for the
Partnership. 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.
The Partnership shall pay the General Partner a monthly administrative fee equal to 1/24 of 1%
(0.5% per year) of month-end Net Assets per Class for each outstanding Class.
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 customer agreement with Citigroup Global Markets Inc. (“CGM,”
formerly known as Xxxxxxx Xxxxx Xxxxxx Inc.) and to cause the Partnership to pay CGM the brokerage
commission described in the Memorandum and to negotiate Customer Agreements with other brokers or
futures commission merchants 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 management and incentive
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.
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
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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.
Generally, 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: (1) no person may receive,
directly or indirectly, any advisory or incentive fee for investment advice or management who
shares or participates in commodity brokerage commissions or fees from transactions for the
Partnership; (2) no broker may pay, directly or indirectly, rebates or give ups to any trading
advisor; and (3) 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.
9. 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 (i) 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 (ii) 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 of the Partnership, Net Asset Value per Class and Net Asset
Value per Unit of Limited and General Partnership Interest for each Class 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 for each Class 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.
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: (i) a decrease in
the Net Asset Value of a Unit of Limited Partnership Interest of any Class to $400 or less as of
the end of any trading day; (ii) any change in trading advisors; (iii) any change in the General
Partner; (iv) any change in commodity brokers; or (v) any material change in the Partnership’s
trading policies or in an advisor’s trading strategies.
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10. 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 giving
written notice of the assignment, transfer or disposition to the General Partner and that no
assignment, transfer or disposition shall be effective against the Partnership or the General
Partner until the first day of the month next succeeding the month in which the General Partner
receives the written notice described below. 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 month next succeeding the month in which the General Partner receives the written notice
described below.
If the General Partner receives an opinion of counsel to the effect that a transfer should be
prohibited in order to protect the Partnership from being treated as a publicly traded partnership,
such transfer shall be prohibited. Upon advice of counsel, the General Partner shall eliminate or
modify any restrictions on substitutions or assignment at such time as the restriction is no longer
necessary. If an assignment, transfer or disposition occurs by reason of the death or by
termination of a Limited Partner or assignee, such written notice may be given 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. The written notice required by this paragraph shall specify the name and residence
address of the assignee, the date of assignment, shall include a statement by the assignee that he
agrees to give the above-described written notice to the General Partner upon any subsequent
assignment, and shall be signed by the assignor and assignee. The General Partner may, in its sole
discretion, waive receipt of the above-described notice or waive any defect therein. Any such
assignee shall become a substituted Limited Partner only upon the consent of the General Partner
(which consent may only be withheld for the purpose of preserving the Partnership’s tax status or
to avoid adverse legal consequences to the Partnership), 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 13 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. Upon the death of a Limited Partner, his estate shall have any
rights of inventory, accounting, appraisal or examination of Partnership records as are granted by
law. 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 assignee may become a substituted Limited
Partner without the further act or approval of any Limited Partner. If the General Partner
withholds consent, an assignee shall not
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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. Except for transfers by gift, inheritance, intrafamily transfers, family dissolutions and
transfers to affiliates, no transfer may be made that results in either the transferor or the
transferee holding fewer than three Units.
(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 per Unit of a Class 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 three business days in advance
of the Redemption Date, or such other notice period as the General Partner shall determine. The
General Partner, in its discretion, may waive the three business day notice requirement.
Redemption of partial Units of Limited Partnership Interest will be permitted at the General
Partner’s discretion. No redemption of less than all of a Limited Partner’s Units of Limited
Partnership Interest will be permitted if, after giving effect to such redemption, the Limited
Partner would own fewer than three (3) Units of Limited Partnership Interest. The General Partner
may waive the three (3) unit minimum ownership requirement in its sole 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 per Unit of Limited
Partnership Interest for such Class 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 per Unit of Limited Partnership Interest for
such Class 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 such Class, provided that the Limited Partners
submit requests for redemption in a form acceptable to the General Partner .
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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.
11. Private Placement of Units of Limited Partnership Interest.
The General Partner on behalf of the Partnership shall (i) 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 (ii) 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.
12. 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 17(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.
13. 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 (i) this Agreement and a Certificate of Limited Partnership,
including amendments and/or restatements thereto; (ii) 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; (iii) Certificates of Assumed Name; and (iv) 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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14. 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 17). The General Partner shall not
withdraw from the Partnership without giving the Limited Partners ninety (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 10 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 8
hereof.
15. No Personal Liability for Return of Capital.
The General Partner, subject to Paragraph 16 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.
16. 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.
(d) For purposes of this Paragraph 16, the term “Affiliates” shall mean any person performing
services on behalf of the Partnership and acting within the scope of the General
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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.
17. 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 each Class of 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 (i) to clarify any clerical inaccuracy or ambiguity or reconcile any inconsistency (including
any inconsistency between this Agreement and the Memorandum); (ii) 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 (iii) 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 each Class of 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 fifteen (15) days after receipt of such request, call a meeting of the Partnership.
Such meeting shall be held at least thirty (30) but not more than sixty (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 17(b), upon the approval by an affirmative vote (which may be in person or by
proxy) of Limited Partners owning more than 50% of each Class of Units of Limited Partnership
Interest then outstanding, the following actions may be taken: (i) this Agreement may be amended
in accordance with and only to the extent permissible under the Partnership Act; (ii) the
Partnership may be dissolved; (iii) 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; (iv) 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; (v) 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 (vi) 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, (i) there is a remaining general partner
who continues the business of the Partnership or (ii) within ninety (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.
18. Governing Law.
The validity and construction of this Agreement shall be determined and governed by the laws
of the State of New York.
19. Miscellaneous.
(a) Priority among Limited Partners. 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.
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(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, 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 17 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:
Ceres Managed Futures LLC
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: President
Name: Xxxxxx Xxxxx
Title: President
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: CERES MANAGED FUTURES LLC | ||||||
| ATTORNEY-IN-FACT | ||||||
| By: | /s/ Xxxxxx Xxxxx | |||||
| Name: Xxxxxx Xxxxx | ||||||
| Title: President | ||||||
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