UNITED STATES OIL FUND, LP FORM OF THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
FORM
OF THIRD AMENDED AND RESTATED
AGREEMENT
OF LIMITED PARTNERSHIP
This
Third Amended and Restated Agreement of Limited Partnership (this “Agreement”),
executed on January __, 2007, is entered into by and among Victoria Bay
Asset Management, LLC, a Delaware limited liability company, as General Partner
and KV Execution Services, LLC, as the Initial Limited Partner, together with
any Persons who shall hereafter be admitted as Partners in accordance with
this
Agreement.
WHEREAS,
the General Partner, Xxxxxxxxxx Holdings, Inc., a Delaware corporation, as
the
Organizational Limited Partner, and the Initial Limited Partner are parties
to
that certain second amended and restated limited partnership agreement entered
into on October 15, 2006 (the “LP
Agreement”),
regarding the operation of the Partnership and their rights and obligations
thereunder; and
WHEREAS,
the Organizational Limited Partner has withdrawn from the Partnership and the
General Partner and the Initial Limited Partner now desire to amend and restate
the LP Agreement regarding the operation of the Partnership;
NOW
THEREFORE, in consideration of the mutual promises and agreements herein made
and intending to be legally bound, hereby agree to amend and restate the LP
Agreement in its entirety as follows:
ARTICLE
1
DEFINITIONS
As
used
in this Agreement, the following terms shall have the following
meanings:
1.1
“Accounting
Period”
shall
mean the following periods: the initial accounting period which shall commence
upon the commencement of operations of the Partnership. Each subsequent
Accounting Period shall commence immediately after the close of the preceding
Accounting Period. Each Accounting Period hereunder shall close on the earliest
of (i) the last Business Day of a month, (ii) the effective date of
dissolution of the Partnership, and (iii) such other day or days in
addition thereto or in substitution therefore as may from time to time be
determined by the General Partner in its discretion either in any particular
case or generally.
1.2
“Act”
shall
mean the Revised Uniform Limited Partnership Act of the State of Delaware,
as
amended from time to time.
1.3
“Additional
Limited Partner”
shall
mean a Person admitted to the Partnership as a Limited Partner pursuant to
this
Agreement and who is shown as such on the books and records of the
Partnership.
1.4
“Affiliate”
shall
mean, when used with reference to a specified Person, (i) any Person who
directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with the specified Person or
(ii) any Person that is an officer of, partner in, or trustee of, or serves
in a similar capacity with respect to, the specified Person or of which the
specified Person is an officer, partner or trustee, or with respect to which
the
specified Person serves in a similar capacity.
1.5
“Assignee”
shall
mean a Record Holder that has not been admitted to the Partnership as a
Substituted Limited Partner.
1.6
“Agreement”
shall
mean this Third Amended and Restated Agreement of Limited Partnership, as may
be
amended, modified, supplemented or restated from time to time.
1.7
“Authorized
Purchaser Agreement”
shall
mean an agreement among the Partnership, the General Partner and a Participant,
as may be amended or supplemented from time to time in accordance with its
terms.
1.8
“Business
Day”
shall
mean any day other than a day on which the American Stock Exchange, the New
York
Mercantile Exchange or the New York Stock Exchange is closed for regular
trading.
B-1
1.9
“Beneficial
Owner”
shall
mean the ultimate beneficial owner of Units held by a nominee which has
furnished the identity of the Beneficial Owner in accordance with
Section 6031(c) of the Code (or any other method acceptable to the General
Partner in its sole discretion) and with Section 9.2.2 of this
Agreement.
1.10
“Capital
Account”
shall
have the meaning assigned to such term in Section 4.1.
1.11
“Capital
Contribution”
shall
mean the total amount of money or agreed-upon value of property contributed
to
the Partnership by all the Partners or any class of Partners or any one Partner,
as the case may be (or the predecessor holders of the interests of such Partner
or Partners).
1.12
“Capital
Transaction”
shall
mean a sale of all or substantially all of the assets of the Partnership not
in
the ordinary course of business.
1.13
“Certificate”
shall
mean a certificate issued by the Partnership evidencing ownership of one or
more
Units.
1.14
“Close
of Business”
shall
mean 5:00 PM (New York City time).
1.15
“Creation
Basket”
shall
mean 100,000 Units, or such other number of Units as may be determined by the
General Partner from time to time, purchased by a Participant.
1.16
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
1.17
“Departing
Partner”
shall
mean a former General Partner, from and after the effective date of any
withdrawal or removal of such former General Partner.
1.18
“Depository”
or
“DTC”
shall
mean The Depository Trust Company, New York, New York, or such other depository
of Units as may be selected by the General Partner as specified
herein.
1.19
“Depository
Agreement”
shall
mean the Letter of Representations from the General Partner to the Depository,
dated as of February 3, 2006, as may be amended or supplemented from time to
time.
1.20
“Distributable
Cash”
shall
mean, with respect to any period, all cash revenues of the Partnership (not
including (i) Capital Contributions, (ii) funds received by the
Partnership in respect of indebtedness incurred by the Partnership,
(iii) interest or other income earned on temporary investments of
Partnership funds pending utilization, and (iv) proceeds from any Capital
Transaction), less the sum of the following: (x) all amounts expended by
the Partnership pursuant to this Agreement in such period and (y) such
working capital or reserves or other amounts as the General Partner reasonably
deems to be necessary or appropriate for the proper operation of the
Partnership’s business or its winding up and liquidation. The General Partner in
its sole discretion may from time to time declare other funds of the Partnership
to be Distributable Cash.
1.21
“DTC
Participants”
shall
have the meaning assigned to such term in Section 9.2.2.
1.22
“General
Partner”
shall
mean Victoria Bay Asset Management, LLC, a Delaware limited liability company,
or any Person who, at the time of reference thereto, serves as a general partner
of the Partnership.
1.23
“Global
Certificates”
shall
mean the global certificate or certificates issued to the Depository as provided
in the Depository Agreement, each of which shall be in substantially the form
attached hereto as Exhibit B.
1.24
“Indirect
Participants”
shall
have the meaning assigned to such term in Section 9.2.2.
1.25
“Initial
Limited Partner”
shall
have the meaning assigned to such term in Section 3.3.
1.26
“Initial
Offering Period”
shall
mean the period commencing with the initial effective date of the Prospectus
and
terminating no later than the ninetieth (90th) day following such date unless
extended for up to an additional 90 days at the sole discretion of the
General Partner.
1.27
“Limited
Partner”
shall
mean the Organizational Limited Partner prior to its withdrawal from the
Partnership and any other Person who is a limited partner (whether the Initial
Limited Partner, a Limited Partner admitted pursuant to this Agreement or an
assignee who is admitted as a Limited Partner) at the time of reference thereto,
in such Person’s capacity as a limited partner of the
Partnership.
B-2
1.28
“Management
Fee”
shall
mean the management fee paid to the General Partner pursuant to this
Agreement.
1.29
“Net
Asset Value”
or
“NAV”
shall
mean the current market value of the Partnership’s total assets, less any
liabilities, as reasonably determined by the General Partner or its
designee.
1.30
“Opinion
of Counsel”
shall
mean a written opinion of counsel (who may be regular counsel to the Partnership
or the General Partner) acceptable to the General Partner.
1.31
“Organizational
Limited Partner”
shall
mean Xxxxxxxxxx Holdings, Inc., a Delaware corporation, in its capacity as
the
organizational limited partner of the Partnership pursuant to this
Agreement.
1.32
“Outstanding”
shall
mean, with respect to the Units or other Partnership Securities, as the case
may
be, all Units or other Partnership Securities that are issued by the Partnership
and reflected as outstanding on the Partnership’s books and records as of the
date of determination.
1.33
“Participant”
shall
mean a Person that is a DTC Participant and has entered into an Authorized
Purchaser Agreement which, at the relevant time, is in full force and
effect.
1.34
“Partner”
shall
mean the General Partner or any Limited Partner. “Partners”
shall
mean the General Partner and all Limited Partners (unless otherwise
indicated).
1.35
“Partnership”
shall
mean the limited partnership hereby formed, as such limited partnership may
from
time to time be constituted.
1.36
“Partnership
Securities”
shall
mean any additional Units, options, rights, warrants or appreciation rights
relating thereto, or any other type of equity security that the Partnership
may
lawfully issue, any unsecured or secured debt obligations of the Partnership
or
debt obligations of the Partnership convertible into any class or series of
equity securities of the Partnership.
1.37
“Person”
shall
mean any natural person, partnership, limited partnership, limited liability
company, trust, estate, corporation, association, custodian, nominee or any
other individual or entity in its own or any representative
capacity.
1.38
“Profit
or Loss”
with
respect to any Accounting Period shall mean the excess (if any) of:
(a)
the
Net Asset Value as of the Valuation Time on the Valuation Date,
less
(b)
the
Net Asset Value as of the Valuation Time on the Valuation Date immediately
preceding the commencement of such Accounting Period.
Adjusted
as deemed appropriate by the General Partner to reflect any Capital
Contributions, redemptions, withdrawals, distributions, or other events
occurring or accounted for during such Accounting Period (including any
allocation of Profit or Loss to a redeeming partner pursuant to
Article 4.3.2 with respect to such Accounting Period).
If
the
amount determined pursuant to the preceding sentence is a positive number,
such
amount shall be the “Profit”
for
the
Accounting Period and if such amount is a negative number, such amount shall
be
the “Loss”
for
the
Accounting Period.
1.39
“Prospectus”
shall
mean the United States Oil Fund, LP prospectus, dated April 25, 2006, as the
same may have been amended or supplemented, used in connection with the offer
and sale of Units in the Partnership.
1.40
“Record
Date”
shall
mean the date established by the General Partner for determining (a) the
identity of Limited Partners (or Assignees if applicable) entitled to notice
of,
or to vote at any meeting of Limited Partners or entitled to vote by ballot
or
give approval of any Partnership action in writing without a meeting or entitled
to exercise rights in respect of any action of Limited Partners or (b) the
identity of Record Holders entitled to receive any report or
distribution.
1.41
“Record
Holder”
shall
mean the Person in whose name such Unit is registered on the books of the
Transfer Agent as of the open of business on a particular Business
Day.
1.42
“Redeemable
Units”
shall
mean any Units for which a redemption notice has been given.
B-3
1.43
“Redemption
Basket”
shall
mean 100,000 Units, or such other number of Units as may be determined by the
General Partner from time to time, redeemed by a Participant.
1.44
“Revolving
Credit Facility”
shall
mean a revolving credit facility that the Partnership may enter into on behalf
of the Partnership with one or more commercial banks or other lenders for
liquidity or other purposes for the benefit of the Partnership.
1.45
“Substituted
Limited Partner”
shall
mean a Person who is admitted as a Limited Partner to the Partnership pursuant
to Article 11.2 in place of and with all the rights of a Limited Partner and
who
is shown as a Limited Partner on the books and records of the
Partnership.
1.46
“Tax
Certificate”
shall
mean an Internal Revenue Service Form W-9 (or the substantial equivalent
thereof) in the case of a Limited Partner that is a U.S. person within the
meaning of the Code, or an Internal Revenue Service Form W-8BEN or other
applicable form in the case of a Limited Partner that is not a U.S.
person.
1.47
“Transfer
Agent”
shall
mean Xxxxx Brothers Xxxxxxxx & Co. or such bank, trust company or other
Person (including, without limitation, the General Partner or one of its
Affiliates) as shall be appointed from time to time by the Partnership to act
as
registrar and transfer agent for the Units or any applicable Partnership
Securities.
1.48
“Transfer
Application”
shall
mean an application and agreement for transfer of Units, which shall be
substantially in the form attached hereto as Exhibit D.
1.49
“Unit”
shall
mean an interest of a Limited Partner or an assignee of the Partnership
representing such fractional part of the interests of all Limited Partners
and
assignees as shall be determined by the General Partner pursuant to this
Agreement.
1.50
“Unit
Register”
shall
have the meaning assigned to such term in Article 9.2.1.
1.51
“Unitholders”
shall
mean the General Partner and all holders of Units, where no distinction is
required by the context in which the term is used.
1.52
“Valuation
Date”
shall
mean the last Business Day of any Accounting Period.
1.53
“Valuation
Time”
shall
mean (i) Close of Business on a Valuation Date or (ii) such other time
or day as the General Partner in its discretion may determine from time to
time
either in any particular case or generally.
ARTICLE
2
GENERAL
PROVISIONS
2.1
This
Agreement shall become effective on the date of this Agreement. The rights
and
liabilities of the Partners shall be as provided in the Act, except as herein
otherwise expressly provided. The Partnership shall continue without
interruption as a limited partnership pursuant to the provisions of the
Act.
2.2
The
name of the Partnership shall be United States Oil Fund, LP; however, the
business of the Partnership may be conducted, upon compliance with all
applicable laws, under any other name designated in writing by the General
Partner to the Limited Partners.
2.3
The
Partnership’s principal place of business shall be located at 0000 Xxxxxx Xxx
Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000 or such other place as the
General Partner may designate from time to time. The registered agent for the
Partnership is Corporation Service Company and the registered office is located
at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000,
County of New Castle. The Partnership may maintain such other offices at such
other places as the General Partner deems advisable.
2.4
The
investment objective of the Partnership is for changes in percentage terms
of
the Units’ net asset value to reflect the changes in percentage terms of the
spot price of West Texas Intermediate light, sweet crude oil delivered to
Cushing, Oklahoma (“WTI
light, sweet crude oil”),
less
the Partnership’s expenses. The Partnership will invest in futures contracts for
WTI light, sweet crude oil and other petroleum-based fuels that are traded
on
the New York Mercantile Exchange or other U.S. and foreign exchanges
(collectively, “Oil
Futures Contracts”)
and
other oil interests such as cash-settled options on Oil Futures Contracts,
forward contracts for oil, and over-the-counter transactions that are based
on
the price of oil, other petroleum-based fuels, Oil Futures Contracts and indices
based on the foregoing (collectively, “Other
Oil Interests”).
The
Partnership seeks to achieve its investment objective by investing in a mix
of
Oil Futures Contracts and Other Oil Interests such that the Partnership’s NAV
will closely track the price of an Oil Futures Contract (the “Benchmark
Oil Futures Contract”)
that
the General Partner believes has historically exhibited a close price
correlation with the spot price of WTI light, sweet crude oil.
B-4
2.5
The
term of the Partnership shall be from the date of its formation in perpetuity,
unless earlier terminated in accordance with the terms of this
Agreement.
2.6
The
General Partner shall execute, file and publish all such certificates, notices,
statements or other instruments required by law for the formation or operation
of a limited partnership in all jurisdictions where the Partnership may elect
to
do business. The General Partner shall not be required to deliver or mail to
Limited Partners a copy of the certificate of limited partnership of the
Partnership or any certificate of amendment thereto.
2.7
The
Partnership shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes, business, protection and benefit of the
Partnership.
2.8
The
business and affairs of the Partnership shall be managed by the General Partner
in accordance with Article 7 hereof. The General Partner has seven
directors, a majority of whom may also be executive officers of the General
Partner. The General Partner shall establish and maintain an audit committee
of
its board of directors for the Partnership (the “Audit Committee”) in
compliance with, and granted the requisite authority and funding pursuant to,
any applicable (1) federal securities laws and regulations, including the
Xxxxxxxx-Xxxxx Act of 2002, and (2) rules, policies and procedures of any
national securities exchange on which the securities issued by the Partnership
are listed and traded.
ARTICLE
3
PARTNERS
AND CAPITAL CONTRIBUTIONS
3.1
General
Partner.
3.1.1
The
name of the General Partner is Victoria Bay Asset Management, LLC, which
maintains its principal business office at 0000 Xxxxxx Xxx Xxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000.
3.1.2
In
consideration of management and administrative services rendered by the General
Partner, the Partnership shall pay the Management Fee to the General Partner
(or
such other person or entity designated by the General Partner) including the
payment of expenses in the ordinary course of business. Expenses in the
“ordinary course of business” shall not include the payment of
(i) brokerage fees, (ii) licensing fees for the use of intellectual
property used by the Partnership, or (iii) registration or other fees paid
to the Securities and Exchange Commission (“SEC”),
the
NASD, or any other regulatory agency in connection with the offer and sale
of
the Units and all legal, accounting, printing and other expenses associated
therewith. The Partnership also pays the fees and expenses, including directors
and officers’ liability insurance, of the independent directors. The Management
Fee shall be payable monthly. The initial Management Fee shall be set forth
on
Exhibit A attached hereto, as may be amended from time to time. The General
Partner may, in its sole discretion, waive all or part of the Management Fee.
The Partnership shall be responsible for all extraordinary expenses (i.e.,
expenses not in the ordinary course of business, including, without limitation,
the items listed above in this Section 3.1.2, the indemnification of any
Person against liabilities and obligations to the extent permitted by law and
required under this Agreement and the bringing and defending of actions at
law
or in equity and otherwise engaging in the conduct of litigation and the
incurring of legal expense and the settlement of claims and
litigation).
3.1.3
In
connection with the formation of the Partnership under the Act, the General
Partner acquired a 2% interest in the profits and losses of the Partnership,
and
made an initial capital contribution to the Partnership in the amount of $20.00,
and the Organizational Limited Partner acquired a 98% interest in the profits
and losses of the Partnership, and made an initial capital contribution to
the
Partnership in the amount of $980.00. The interest of the Organizational Limited
Partner was redeemed, the initial capital contribution of the Organizational
Limited Partner was refunded, and the Organizational Limited Partner withdrew
and ceased to be a Limited Partner. 98% of any interest or other profit that
may
have resulted from the investment or other use of such initial capital
contributions was allocated and distributed to the Organizational Limited
Partner, and the balance thereof was allocated and distributed to the General
Partner. As of the first date of the offering, the General Partner shall be
issued an appropriate number of Units based on its initial capital contribution.
The General Partner may but shall not be required to make Capital Contributions
to the Partnership on or after the date hereof. If the General Partner does
make
a Capital Contribution to the Partnership on or after the date hereof, it shall
be issued Units based on the same terms and conditions applicable to the
purchase of a Creation Basket under Article 16 hereof.
B-5
3.1.4
The
General Partner may not, without written approval by all of the Limited Partners
or by other written instrument executed and delivered by all of the Limited
Partners subsequent to the date of this Agreement, take any action in
contravention of this Agreement, including, without limitation, (i) any act
that would make it impossible to carry on the ordinary business of the
Partnership, except as otherwise provided in this Agreement; (ii) possess
Partnership property, or assign any rights in specific Partnership property,
for
other than a Partnership purpose; (iii) admit a Person as a Partner, except
as otherwise provided in this Agreement; (iv) amend this Agreement in any
manner, except as otherwise provided in this Agreement or under applicable
law;
or (v) transfer its interest as general partner of the Partnership, except
as otherwise provided in this Agreement.
3.1.5
Except as otherwise provided herein, the General Partner may not sell, exchange
or otherwise dispose of all or substantially all of the Partnership’s assets in
a single transaction or a series of related transactions (including by way
of
merger, consolidation or other combination with any other Person) or approve
on
behalf of the Partnership the sale, exchange or other disposition of all or
substantially all of the assets of the Partnership, taken as a whole, without
the approval of at least a majority of the Limited Partners; provided, however,
that this provision shall not preclude or limit the General Partner’s ability to
mortgage, pledge, hypothecate or grant a security interest in all or
substantially all of the Partnership’s assets and shall not apply to any forced
sale of any or all of the Partnership’s assets pursuant to the foreclosure of,
or other realization upon, any such encumbrance.
3.1.6
Unless approved by a majority of the Limited Partners, the General Partner
shall
not take any action or refuse to take any reasonable action the effect of which,
if taken or not taken, as the case may be, would be to cause the Partnership,
to
the extent it would materially and adversely affect the Limited Partners, to
be
taxable as a corporation for federal income tax purposes.
3.1.7
Notwithstanding any other provision of this Agreement, the General Partner
is
not authorized to institute or initiate on behalf of, or otherwise cause the
Partnership to:
(a)
make
a general assignment for the benefit of creditors;
(b)
file
a voluntary bankruptcy petition; or
(c)
file
a petition seeking for the Partnership a reorganization, arrangement,
composition, readjustment liquidation, dissolution or similar relief under
any
law.
3.2
Issuance
of Units.
Units
in the Partnership will only be issued in a Creation Basket or whole number
multiples thereof.
3.3
Initial
Limited Partner.
The
name of the initial Limited Partner is KV Execution Services, LLC (the
“Initial
Limited Partner”).
The
business address of the Initial Limited Partner is KV Execution Services LLC,
0000 Xxxxxxx 00, Xxxxx 000, Xxxxxxxx Xxxxxxxxx, XX 00000. The initial Capital
Contribution of the Initial Limited Partner was $13,478,000. The Initial Limited
Partner purchased the initial Creation Basket at an initial offering price
per
Unit equal to the closing price of near-month oil futures contracts for WTI
light, sweet crude oil as listed on the New York Mercantile Exchange on the
last
Business Day prior to the effective date of the registration statement relating
to the Prospectus.
3.4
Capital
Contribution.
Except
as otherwise provided in this Agreement, no Partner shall have any right to
demand or receive the return of its Capital Contribution to the Partnership.
No
Partner shall be entitled to interest on any Capital Contribution to the
Partnership or on such Partner’s capital account.
B-6
ARTICLE
4
CAPITAL
ACCOUNTS OF PARTNERS AND OPERATION THEREOF
4.1
Capital
Accounts.
There
shall be established on the books and records of the Partnership for each
Partner (or Beneficial Owner in the case of Units held by a nominee) a capital
account (a “Capital
Account”).
It is
intended that each Partner’s Capital Account shall be maintained at all times in
a manner consistent with Section 704 of the Code and applicable Treasury
regulations thereunder, and that the provisions hereof relating to the Capital
Accounts shall be interpreted in a manner consistent therewith. For each
Accounting Period, the Capital Account of each Partner shall be:
(i)
credited with the amount of any Capital Contributions made by such Partner
during such Accounting Period;
(ii)
credited with any allocation of Profit made to such Partner for such Accounting
Period;
(iii)
debited with any allocation of Loss made to such Partners for such Accounting
Period; and
(iv)
debited with the amount of cash paid to such Partner as an amount withdrawn
or
distributed to such Partner during such Accounting Period, or, in the case
of
any payment of a withdrawal or distribution in kind, the fair value of the
property paid or distributed during such Accounting Period.
4.1.1
For
any Accounting Period in which Units are issued or redeemed for cash or other
property, the General Partner shall, in accordance with Treasury Regulation
Section 1.704-1(b)(2)(iv)(f), adjust the Capital Accounts of all Partners
and the carrying value of each Partnership asset upward or downward to reflect
any unrealized gain or unrealized loss attributable to each such Partnership
asset, as if such unrealized gain or unrealized loss had been recognized on
an
actual sale of the asset and had been allocated to the Partners at such time
pursuant to Article 4.2 of this Agreement in the same manner as any item of
gain or loss actually recognized during such period would have been
allocated.
4.1.2
To
the extent an adjustment to the adjusted tax basis of any Partnership asset
pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account
in determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
item of gain or loss shall be specially allocated to the Partners in a manner
consistent with the manner in which their Capital Accounts are required to
be
adjusted pursuant to such Section of the Treasury Regulations.
4.2
Allocation
of Profit or Loss.
Profit
or Loss for an Accounting Period shall be allocated among the Partners in
proportion to the number of Units each Partner holds as of the close of business
on the last Business Day of such Accounting Period. The General Partner may
revise, alter or otherwise modify this method of allocation to the extent it
deems necessary to comply with the requirements of Section 704 or
Section 706 of the Code and Treasury Regulations or administrative rulings
thereunder.
4.3
Allocations
for Tax Purposes
4.3.1
Except as otherwise provided in this Agreement, for each fiscal year of the
Partnership, items of income, deduction, gain, loss, and credit recognized
by
the Partnership for federal income tax purposes shall be allocated among the
Partners in a manner that equitably reflects the amounts credited or debited
to
each Partner’s Capital Account for each Accounting Period during such fiscal
year. Allocations under this Article 4.3 shall be made by the General
Partner in accordance with the principles of Sections 704(b) and 704(c) of
the Code and in conformity with applicable Treasury Regulations promulgated
thereunder (including, without limitation, Treasury Regulations
Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4)(i), and
1.704-3(e)).
4.3.2
Notwithstanding anything else contained in this Article 4, if any Partner
has a deficit Capital Account for any Accounting Period as a result of any
adjustment of the type described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d) (6), then the
Partnership’s income and gain shall be specially allocated to such Partner in an
amount and manner sufficient to eliminate such deficit as quickly as possible.
Any special allocation of items of income or gain pursuant to this
Article 4.3.2 shall be taken into account in computing subsequent
allocations pursuant to this Article 4 so that the cumulative net amount of
all items allocated to each Partner shall, to the extent possible, be equal
to
the amount that would have been allocated to such Partner if there had never
been any allocation pursuant to the first sentence of this
Article 4.3.2.
B-7
4.3.3
Allocations that would otherwise be made to a Limited Partner under the
provisions of this Article 4 shall instead be made to the Beneficial Owner
of Units held by a nominee.
4.4
Compliance.
In
applying the provisions of this Article 4, the General Partner is
authorized to utilize such reasonable accounting conventions, valuation methods
and assumptions as the General Partner shall determine to be appropriate and
in
compliance with the Code and applicable Treasury Regulations. The General
Partner may amend the provisions of this Agreement to the extent it determines
to be necessary to comply with the Code and Treasury Regulations.
ARTICLE
5
RECORDS
AND ACCOUNTING; REPORTS
5.1
Records
and Accounting.
The
Partnership will keep proper books of record and account of the Partnership
at
its office located in 0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxx 00000 or such office, including that of an administrative agent,
as
it may subsequently designate upon notice to the Limited Partners. These books
and records are open to inspection by any person who establishes to the
Partnership’s satisfaction that such person is a Limited Partner upon reasonable
advance notice at all reasonable times during the usual business hours of the
Partnership.
5.2
Annual
Reports.
Within
90 days after the end of each fiscal year, the General Partner shall cause
to be delivered to each Person who was a Partner at any time during the fiscal
year, an annual report containing the following:
(i)
financial statements of the Partnership, including, without limitation, a
balance sheet as of the end of the Partnership’s fiscal year and statements of
income, Partners’ equity and changes in financial position, for such fiscal
year, which shall be prepared in accordance with generally accepted accounting
principles consistently applied and shall be audited by a firm of independent
certified public accountants registered with the Public Company Accounting
Oversight Board,
(ii)
a
general description of the activities of the Partnership during the period
covered by the report, and
(iii)
a
report of any material transactions between the Partnership and the General
Partner or any of its Affiliates, including fees or compensation paid by the
Partnership and the services performed by the General Partner or any such
Affiliate or such fees or compensation.
5.3
Quarterly
Reports.
Within
45 days after the end of each quarter of each fiscal year, the General
Partner shall cause to be delivered to each Person who was a Partner at any
time
during the quarter then ended, a quarterly report containing a balance sheet
and
statement of income for the period covered by the report, each of which may
be
unaudited but shall be certified by the General Partner as fairly presenting
the
financial position and results of operations of the Partnership during the
period covered by the report. The report shall also contain a description of
any
material event regarding the business of the Partnership during the period
covered by the report.
5.4
Monthly
Reports.
Within
30 days after the after the end of each month, the General Partner shall cause
to be delivered to each Person who was a Partner at any time during the month
then ended, a monthly report containing an account statement, which will include
a statement of income (loss) and a statement of changes in NAV, for the
prescribed period. In addition, the account statement will disclose any material
business dealings between the Partnership, General Partner, commodity trading
advisor (if any), futures commission merchant, or the principals thereof that
previously have not been disclosed in the Partnership’s Prospectus or any
amendment thereto, other account statements or annual reports.
5.5
Tax
Information.
The
General Partner shall use its best efforts to prepare and to transmit a U.S.
federal income tax form K-1 for each Partner, Assignee, or Beneficial Owner
or a
report setting forth in sufficient detail such transactions effected by the
Partnership during each fiscal year as shall enable each Partner, Assignee,
or
Beneficial Owner to prepare its U.S. federal income tax return, if any, within
a
reasonable period after the end of such fiscal year.
B-8
5.6
Tax
Returns.
The
General Partner shall cause income tax returns of the Partnership to be prepared
and timely filed with the appropriate authorities.
5.7
Tax
Matters Partner.
The
General Partner is hereby designated as the Partnership’s “Tax
Matters Partner,”
as
defined under Section 6231(a)(7) of the Code. The General Partner is
specifically directed and authorized to take whatever steps the General Partner,
in its discretion, deems necessary or desirable to perfect such designation,
including filing any forms or documents with the U.S. Internal Revenue Service
and taking such other action as may from time to time be required under U.S.
Treasury regulations. Any Partner shall have the right to participate in any
administrative proceedings relating to the determination of Partnership items
at
the Partnership level. Expenses of such administrative proceedings undertaken
by
the Tax Matters Partner shall be expenses of the Partnership. Each Partner
who
elects to participate in such proceedings shall be responsible for any expenses
incurred by such Partner in connection with such participation. The cost of
any
resulting audits or adjustments of a Partner’s tax return shall be borne solely
by the affected Partner. In the event of any audit, investigation, settlement
or
review, for which the General Partner is carrying out the responsibilities
of
Tax Matters Partner, the General Partner shall keep the Partners reasonably
apprised of the status and course of such audit, investigation, settlement
or
review and shall forward copies of all written communications from or to any
regulatory, investigative or judicial authority with regard
thereto.
ARTICLE
6
FISCAL
AFFAIRS
6.1
Fiscal
Year.
The
fiscal year of the Partnership shall be the calendar year. The General Partner
may select an alternate fiscal year.
6.2
Partnership
Funds.
Pending
application or distribution, the funds of the Partnership shall be deposited
in
such bank account or accounts, or invested in such interest-bearing or
non-interest bearing investment, including, without limitation, checking and
savings accounts, certificates of deposit and time or demand deposits in
commercial banks, U.S. government securities and securities guaranteed by U.S.
government agencies as shall be designed by the General Partner. Such funds
shall not be commingled with funds of any other Person. Withdrawals therefrom
shall be made upon such signatures as the General Partner may
designate.
6.3
Accounting
Decisions.
All
decisions as to accounting principles, except as specifically provided to the
contrary herein, shall be made by the General Partner.
6.4
Tax
Elections.
The
General Partner shall, from time to time, make such tax elections as it deems
necessary or desirable in its sole discretion to carry out the business of
the
Partnership or the purposes of this Agreement. Notwithstanding the foregoing,
the General Partner shall make a timely election under Section 754 of the
Code.
6.5
Partnership
Interests.
Title
to the Partnership assets shall be deemed to be owned by the Partnership as
an
entity, and no Partner or Assignee, individually or collectively, shall have
any
ownership interest in such Partnership assets or any portion thereof. Title
to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner or one or more nominees, as the General Partner may
determine. The General Partner hereby declares and warrants that any Partnership
assets for which record title is held in the name of the General Partner shall
be held by the General Partner for the exclusive use and benefit of the
Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its reasonable efforts to cause
record title to such assets (other than those assets in respect of which the
General Partner determines that the expense and difficulty of conveyancing
makes
transfer of record title to the Partnership impracticable) to be vested in
the
Partnership as soon as reasonably practicable; provided, that prior to the
withdrawal or removal of the General Partner or as soon thereafter as
practicable, the General Partner will use reasonable efforts to effect the
transfer of record title to the Partnership and, prior to any such transfer,
will provide for the use of such assets in a manner satisfactory to the
Partnership. All Partnership Assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which record
title to such Partnership assets are held.
B-9
ARTICLE
7
Rights
and Duties of the General Partner
7.1
Management
Power.
The
General Partner shall have exclusive management and control of the business
and
affairs of the Partnership, and all decisions regarding the management and
affairs of the Partnership shall be made by the General Partner. The General
Partner shall have all the rights and powers of general partner as provided
in
the Act and as otherwise provided by law. Except as otherwise expressly provided
in this Agreement, the General Partner is hereby granted the right, power and
authority to do on behalf of the Partnership all things which, in its sole
judgment, are necessary, proper or desirable to carry out the aforementioned
duties and responsibilities, including but not limited to, the right, power
and
authority from time to time to do the following:
(a)
the
making of any expenditures, the lending or borrowing of money, the assumption
or
guarantee of, or other contracting for, indebtedness and other liabilities,
the
issuance of evidences of indebtedness and the incurring of any other obligations
and the securing of same by mortgage, deed of trust or other lien or
encumbrance;
(b)
the
making of tax, regulatory and other filings, or rendering of periodic or other
reports to governmental or other agencies having jurisdiction over the business
or assets of the Partnership;
(c)
the
acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of any or all of the assets of the Partnership, or the merger or other
combination of the Partnership with or into another Person (the matters
described in this clause (c) being subject, however, to any prior approval
that
may be required in accordance with this Agreement);
(d)
the
use of the assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with the terms of this Agreement including,
without limitation, the financing of the conduct of the operations of the
Partnership, the lending of funds to other Persons, and the repayment of
obligations of the Partnership;
(e)
the
negotiation, execution and performance of any contracts, conveyances or other
instruments (including, without limitation, instruments that limit the liability
of the Partnership under contractual arrangements to all or particular assets
of
the Partnership with the other party to the contract to have no recourse against
the General Partner or its assets other than its interest in the Partnership,
even if same results in the terms of the transaction being less favorable to
the
Partnership than would otherwise be the case);
(f)
the
distribution of Distributable Cash;
(g)
the
selection and dismissal of employees (including, without limitation, employees
having titles such as “president,”
“vice
president,”
“secretary”
and
“treasurer”),
agents, outside attorneys, accountants, consultants and contractors and the
determination of their compensation and other terms of employment or
hiring;
(h)
the
maintenance of insurance for the benefit of the Partners and the Partnership
(including, without limitation, the assets and operations of the
Partnership);
(i)
the
formation of, or acquisition of an interest in, and the contribution of property
to, any further limited or general partnerships, joint ventures or other
relationships;
(j)
the
control of any matters affecting the rights and obligations of the Partnership,
including, without limitation, the bringing and defending of actions at law
or
in equity and otherwise engaging in the conduct of litigation and the incurring
of legal expense and the settlement of claims and litigation;
(k)
the
indemnification of any Person against liabilities and contingencies to the
extent permitted by law;
(l)
the
entering into of listing agreements with the American Stock Exchange and any
other securities exchange and the delisting of some or all of the Units from,
or
requesting that trading be suspended on, any such exchange; and
(m)
the
purchase, sale or other acquisition or disposition of Units.
B-10
7.2
Best
Efforts.
The
General Partner will use its best efforts to cause the Partnership to be formed,
reformed, qualified or registered under assumed or fictitious name statutes
or
similar laws in any state in which the Partnership owns property or transacts
business if such formation, reformation, qualification or registration is
necessary in order to protect the limited liability of the Limited Partners
or
to permit the Partnership lawfully to own property or transact
business.
7.3
Right
of Public to Rely on Authority of a General Partner.
No
person shall be required to determine the General Partner’s authority to make
any undertaking on behalf of the Partnership.
7.4
Obligation
of the General Partner.
The
General Partner shall:
(a)
devote to the Partnership and apply to the accomplishment of the Partnership
purposes so much of its time and attention as is necessary or advisable to
manage properly the affairs of the Partnership;
(b)
maintain the Capital Account for each Partner; and
(c)
cause
the Partnership to enter into and carry out the obligations of the Partnership
contained in the agreements with Affiliates of the General Partner as described
in the Prospectus and cause the Partnership not to take any action in violation
of such agreements.
7.5
Good
Faith.
The
General Partner has a responsibility to the Limited Partners to exercise good
faith and fairness in all dealings. In the event that a Limited Partner believes
that the General Partner has violated its fiduciary duty to the Limited
Partners, he may seek legal relief individually or on behalf of the Partnership
under applicable laws, including under the Act and under securities and
commodities laws, to recover damages from or require an accounting by the
General Partner. Limited Partners should be aware that performance by the
General Partner of its fiduciary duty is measured by the terms of this Agreement
as well as applicable law. Limited Partners may also have the right, subject
to
applicable procedural and jurisdictional requirements, to bring class actions
in
federal court to enforce their rights under the federal securities laws and
the
rules and regulations promulgated thereunder by the SEC. Limited Partners who
have suffered losses in connection with the purchase or sale of the Units may
be
able to recover such losses from the General Partner where the losses result
from a violation by the General Partner of the federal securities laws. State
securities laws may also provide certain remedies to limited partners. Limited
Partners are afforded certain rights to institute reparations proceedings under
the Commodity Exchange Act for violations of the Commodity Exchange Act or
of
any rule, regulation or order of the Commodities Futures Trading Commission
(“CFTC”)
by the
General Partner.
7.6
Indemnification
7.6.1
Notwithstanding any other provision of this Agreement, neither a General Partner
nor any employee or other agent of the Partnership nor any officer, director,
stockholder, partner, employee or agent of a General Partner (a “Protected
Person”)
shall
be liable to any Partner or the Partnership for any mistake of judgment or
for
any action or inaction taken, nor for any losses due to any mistake of judgment
or to any action or inaction or to the negligence, dishonesty or bad faith
of
any officer, director, stockholder, partner, employee or agent of the
Partnership or any officer, director, stockholder, partner, employee or agent
of
such General Partner, provided that such officer, director, stockholder,
partner, employee or agent of the Partner or officer, director, stockholder,
partner, employee or agent of such General Partner was selected, engaged or
retained by such General Partner with reasonable care, except with respect
to
any matter as to which such General Partner shall have been finally adjudicated
in any action, suit or other proceeding not to have acted in good faith in
the
reasonable belief that such Protected Person’s action was in the best interests
of the Partnership and except that no Protected Person shall be relieved of
any
liability to which such Protected Person would otherwise be subject by reason
of
willful misfeasance, gross negligence or reckless disregard of the duties
involved in the conduct of the Protected Person’s office. A General Partner and
its officers, directors, employees or partners may consult with counsel and
accountants (except for the Partnership’s independent auditors) in respect of
Partnership affairs and be fully protected and justified in any action or
inaction which is taken in accordance with the advice or opinion of such counsel
or accountants (except for the Partnership’s independent auditors), provided
that they shall have been selected with reasonable care.
Notwithstanding
any of the foregoing to the contrary, the provisions of this Article 7.6.1
and of Article 7.6.2 hereof shall not be construed so as to relieve (or
attempt to relieve) a General Partner (or any officer, director, stockholder,
partner, employee or agent of such General Partner) of any liability to the
extent (but only to the extent) that such liability may not be waived, modified
or limited under applicable law, but shall be construed so as to effectuate
the
provisions of this Article 7.6.1 and of Article 7.6.2 hereof to the
fullest extent permitted by law.
B-11
7.6.2
The
Partnership shall, to the fullest extent permitted by law, but only out of
Partnership assets, indemnify and hold harmless a General Partner and each
officer, director, stockholder, partner, employee or agent thereof (including
persons who serve at the Partnership’s request as directors, officers or
trustees of another organization in which the Partnership has an interest as
a
Unitholder, creditor or otherwise) and their respective legal representatives
and successors (hereinafter referred to as a “Covered
Person”
against
all liabilities and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and counsel
fees reasonably incurred by any Covered Person in connection with the defense
or
disposition of any action, suit or other proceedings, whether civil or criminal,
before any court or administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or otherwise or with which
such Covered Person may be or may have been threatened, while in office or
thereafter, by reason of an alleged act or omission as a General Partner or
director or officer thereof, or by reason of its being or having been such
a
General Partner, director or officer, except with respect to any matter as
to
which such Covered Person shall have been finally adjudicated in any such
action, suit or other proceeding not to have acted in good faith in the
reasonable believe that such Covered Person’s action was in the best interest of
the Partnership, and except that no Covered Person shall be indemnified against
any liability to the Partnership or Limited Partners to which such Covered
Person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of
such Covered Person’s office. Expenses, including counsel fees so incurred by
any such Covered Person, may be paid from time to time by the Partnership in
advance of the final disposition of any such action, suit or proceeding on
the
condition that the amounts so paid shall be repaid to the Partnership if it
is
ultimately determined that the indemnification of such expenses is not
authorized hereunder.
As
to any
matter disposed of by a compromise payment by any such Covered Person, pursuant
to a consent decree or otherwise, no such indemnification either for said
payment or for any other expenses shall be provided unless such compromise
shall
be approved as in the best interests of the Partnership, after notice that
it
involved such indemnification by any disinterested person or persons to whom
the
questions may be referred by the General Partner, provided that there has been
obtained an opinion in writing of independent legal counsel to the effect that
such Covered Person appears to have acted in good faith in the reasonable belief
that his or her action was in the best interests of the Partnership and that
such indemnification would not protect such persons against any liability to
the
Partnership or its Limited Partners to which such person would otherwise by
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of office. Approval
by
any disinterested person or persons shall not prevent the recovery from persons
as indemnification if such Covered Person is subsequently adjudicated by a
court
of competent jurisdiction not to have acted in good faith in the reasonable
belief that such Covered Person’s action was in the best interests of the
Partnership or to have been liable to the Partnership or its Limited Partners
by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person’s
office.
The
right
of indemnification hereby provided shall not be exclusive of or affect any
other
rights to which any such Covered Person may be entitled. As used in this
Article 7.6.2, an “interested
Covered Person”
is
one
against whom the action, suit or other proceeding on the same or similar grounds
is then or has been pending and a “disinterested
person”
is
a
person against whom no actions, suits or other proceedings or another action,
suit or other proceeding on the same or similar grounds is then or has been
pending. Nothing contained in this Article 7.6.2 shall affect any rights to
indemnification to which personnel of a General Partner, other than directors
and officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Partnership to purchase and maintain liability
insurance on behalf of any such person.
Nothing
in this Article 7.6.2 shall be construed to subject any Covered Person to any
liability to which he or she is not already liable under this Agreement or
applicable law.
7.6.3
Each Limited Partner agrees that it will not hold any Affiliate or any officer,
director, stockholder, partner, employee or agent of any Affiliate of the
General Partner liable for any actions of such General Partner or any
obligations arising under or in connection with this Agreement or the
transactions contemplated hereby.
7.7
Resolutions
of Conflicts of Interest; Standard of Care.
7.7.1
Unless otherwise expressly provided in this Agreement or any other agreement
contemplated hereby, whenever a conflict of interest exists or arises between
the General Partner on the one hand, and the Partnership or any Limited Partner,
on the other hand, any resolution or course of action by the General Partner
in
respect of such conflict of interest shall be permitted and deemed approved
by
all Partners and shall not constitute a breach of this Agreement or of any
agreement contemplated hereby or of a duty stated or implied by law or equity,
if the resolution or course of action is, or by operation of this Agreement
is
deemed to be, fair and reasonable to the Partnership. If a dispute arises,
it
will be resolved through negotiations with the General Partner or by a court
located in the State of Delaware. Any resolution of a dispute is deemed to
be
fair and reasonable to the Partnership if the resolution is:
B-12
|
·
|
approved
by the Audit Committee, although no party is obligated to seek such
approval and the General Partner may adopt a resolution or course
of
action that has not received such
approval;
|
|
·
|
on
terms no less favorable to the Limited Partners than those generally
being
provided to or available from unrelated third parties;
or
|
|
·
|
fair
to the Limited Partners, taking into account the totality of the
relationships of the parties involved including other transactions
that
may be particularly favorable or advantageous to the Limited
Partners.
|
7.7.2
Whenever this Agreement or any other agreement contemplated hereby provides
that
the General Partner is permitted or required to make a decision (i) in its
discretion or under a grant of similar authority or latitude, the General
Partner shall be entitled to the extent permitted by applicable law, to consider
only such interest and factors as it desires and shall have no duty or
obligation to give any consideration to any interest of or factors affecting
the
partnership or the Limited Partners, or (ii) in its good faith or under
another express standard, the General Partner shall act under such express
standard and except as required by applicable law, shall not be subject to
any
other different standards imposed by this Agreement, any other agreement
contemplated hereby or applicable law.
7.8
Other
Matters Concerning the General Partner.
7.8.1
The
General Partner (including the Audit Committee) may rely on and shall be
protected in acting or refraining from acting upon any certificate, document
or
other instrument believed by it to be genuine and to have been signed or
presented by the proper party or parties.
7.8.2
The
General Partner (including the Audit Committee) may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisors selected by it and any opinion or advice of any such
person as to matters which the General Partner (including the Audit Committee)
believes to be within such person’s professional or expert competence shall be
the basis for full and complete authorization of indemnification and provide
legal protection with respect to any action taken or suffered or omitted by
the
General Partner (including the Audit Committee) hereunder in good faith and
in
accordance with such opinion or advice.
7.8.3
The
General Partner (including the Audit Committee) may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon
it
hereunder either directly or by or through its agents, and the General Partner
(including the Audit Committee) shall not be responsible for any misconduct
or
negligence on the part of any such agent appointed by the General Partner in
good faith.
7.9
Other
Business Ventures.
Any
Partner, director, employee, Affiliate or other person holding a legal or
beneficial interest in any entity which is a Partner, may engage in or possess
an interest in other business ventures of every nature and description,
independently or with others, whether such ventures are competitive with the
Partnership or otherwise; and, neither the Partnership nor the Partners shall
have any right by virtue of this Agreement in or to such independent ventures
or
to the income or profits derived there from.
7.10
Contracts
with the General Partner or its Affiliates.
The
General Partner may, on behalf of the Partnership, enter into contracts with
any
Affiliate. The validity of any transaction, agreement or payment involving
the
Partnership and any General Partner or any Affiliate of a General Partner
otherwise permitted by the terms of this Agreement shall not be affected by
reason of (i) the relationship between the Partnership and the Affiliate of
the General Partner, or (ii) the approval of said transaction agreement or
payment by officers or directors of the General Partner.
7.11
Additional
General Partners.
Additional general partners may be admitted with the consent of the General
Partner.
B-13
ARTICLE
8
RIGHTS
AND OBLIGATIONS OF LIMITED PARTNERS
8.1
No
Participation in Management.
No
Limited Partner (other than a General Partner if it has acquired an interest
of
a Limited Partner) shall take part in the management of the Partnership’s
business, transact any business in the Partnership’s name or have the power to
sign documents for or otherwise bind the Partnership.
8.2
Limitation
of Liability.
Except
as provided in the Act, the debts, obligations, and liabilities of the
Partnership, whether arising in contract, tort or otherwise, shall be solely
the
debts, obligations and liabilities of the Partnership. A Limited Partner will
not be liable for assessments in addition to its initial capital investment
in
any capital securities representing limited partnership interests. However,
a
Limited Partner may be required to repay to the Partnership any amounts
wrongfully returned or distributed to it under some circumstances.
8.3
Indemnification
and Terms of Admission.
Each
Limited Partner shall indemnify and hold harmless the Partnership, the General
Partner and every Limited Partner who was or is a party or is threatened to
be
made a party to any threatened, pending or completed action, suit or
proceedings, whether civil, criminal, administrative or investigative, by reason
of or arising from any actual or alleged misrepresentation or misstatement
of
facts or omission to state facts made (or omitted to be made) by such Limited
Partner in connection with any assignment, transfer, encumbrance or other
disposition of all or any part of an interest, or the admission of a Limited
Partner to the Partnership, against expenses for which the Partnership or such
other Person has not otherwise been reimbursed (including attorneys’ fees,
judgments, fines and amounts paid in settlement) actually and reasonably
incurred by him in connection with such action, suit or proceeding.
8.4
Effective
Date.
The
effective date of admission of a Limited Partner shall be the date designated
by
the General Partner in writing to such assignee or transferee.
8.5
Death
or Incapacity of Limited Partner.
The
death or legal incapacity of a Limited Partner shall not cause dissolution
of
the Partnership.
8.6
Rights
of Limited Partner Relating to the Partnership.
(a)
In
addition to other rights provided by this Agreement or by applicable law, and
except as otherwise limited under this Agreement, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner’s
interest as a Limited Partner in the Partnership, upon reasonable demand and
at
such Limited Partner’s own expense:
(i)
to
obtain true and full information regarding the status of the business and
financial condition of the Partnership;
(ii)
promptly after becoming available, to obtain a copy of the Partnership’s
federal, state and local tax returns for each year;
(iii)
to
have furnished to it, upon notification to the General Partner, a current list
of the name and last known business, residence or mailing address of each
Partner;
(iv)
to
have furnished to it, upon notification to the General Partner, a copy of this
Agreement and the Certificate of Limited Partnership and all amendments
thereto;
(v)
to
obtain true and full information regarding the amount of cash contributed by
and
a description and statement of the value of any other Capital Contribution
by
each Partner and which each Partner has agreed to contribute in the future,
and
the date on which each became a Partner; and
(vi)
to
obtain such other information regarding the affairs of the Partnership as is
just and reasonable.
(b)
Notwithstanding any other provision of this Agreement, the General Partner
may
keep confidential from the Limited Partners and Assignees for such period of
time as the General Partner deems reasonable, any information that the General
Partner reasonably believes to be in the nature of trade secrets or other
information, the disclosure of which the General Partner in good faith believes
is not in the best interests of the Partnership or could damage the Partnership
or that the Partnership is required by law or by agreements with third parties
to keep confidential (other than agreements with Affiliates the primary purpose
of which is to circumvent the obligations set forth in this
Article 8.6).
B-14
ARTICLE
9
UNIT
CERTIFICATES
9.1
Unit
Certificates.
Certificates shall be executed on behalf of the Partnership by any officer
of
either of the General Partner or, if any, of the Partnership.
9.2
Registration
Form, Registration of Transfer and Exchange.
9.2.1
The
General Partner shall cause to be kept on behalf of the Partnership a register
(the “Unit
Register”)
in
which, subject to such reasonable regulations as it may prescribe, the General
Partner will provide for the registration and the transfer of Units. The
Transfer Agent has been appointed registrar and transfer agent for the purpose
of registering and transferring Units as herein provided. The Partnership shall
not recognize transfers of Certificates representing Units unless same are
effected in the manner described in this Article 9.2. Upon surrender for
registration of transfer of any Units evidenced by a Certificate, the General
Partner on behalf of the Partnership will execute, and the Transfer Agent will
countersign and deliver, in the name of the holder or the designated transferee
or transferees, as required pursuant to the holder’s instructions, one or more
new Certificates evidencing the same aggregate number of Units as was evidenced
by the Certificate so surrendered.
9.2.2
Book-Entry-Only
System.
(a)
Global
Certificate Only.
Unless
otherwise authorized by the General Partner, Certificates for Units will not
be
issued, other than the one or more Global Certificates issued to the Depository.
So long as the Depository Agreement is in effect, Creation Baskets will be
issued and redeemed and Units will be transferable solely through the book-entry
systems of the Depository and the DTC Participants and their Indirect
Participants as more fully described below.
(1)
Global
Certificate.
The
Partnership and the General Partner will enter into the Depository Agreement
pursuant to which the Depository will act as securities depository for the
Units. Units will be represented by the Global Certificate (which may consist
of
one or more certificates as required by the Depository), which will be
registered, as the Depository shall direct, in the name of Cede & Co., as
nominee for the Depository and deposited with, or on behalf of, the Depository.
No other certificates evidencing Units will be issued. The Global Certificate
shall be in the form attached hereto as Exhibit B and shall represent such
Units
as shall be specified therein, and may provide that it shall represent the
aggregate amount of outstanding Units from time to time endorsed thereon and
that the aggregate amount of outstanding Units represented thereby may from
time
to time be increased or decreased to reflect creations or redemptions of
Baskets. Any endorsement of a Global Certificate to reflect the amount, or
any
increase or decrease in the amount, of outstanding Units represented thereby
shall be made in such manner and upon instructions given by the General Partner
on behalf of the Partnership as specified in the Depository
Agreement.
(2)
Legend.
Any
Global Certificate issued to the Depository or its nominee shall bear a legend
substantially to the following effect: “UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE FUND OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.”
(3)
The
Depository.
The
Depository has advised the Partnership and the General Partner as follows:
the
Depository is a limited-purpose trust company organized under the laws of the
State of New York, a member of the U.S. Federal Reserve System, a “clearing
corporation”
within
the meaning of the New York Uniform Commercial Code, and a “clearing
agency” registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository was created to
hold
securities of DTC Participants and to facilitate the clearance and settlement
of
securities transactions among the DTC Participants in such securities through
electronic book-entry changes in accounts of the DTC Participants, thereby
eliminating the need for physical movement of securities certificates.
“DTC
Participants”
include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations, some of whom (and/or their representatives)
own
the Depository. Access to the Depository’s system is also available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC Participant, either directly or
indirectly (“Indirect
Participants”).
The
Depository may determine to discontinue providing its service with respect
to
Creation Baskets and Units by giving notice to the General Partner pursuant
to
and in conformity with the provisions of the Depository Agreement and
discharging its responsibilities with respect thereto under applicable law.
Under such circumstances, the General Partner shall take action either to find
a
replacement for the Depository to perform its functions at a comparable cost
and
on terms acceptable to the General Partner or, if such a replacement is
unavailable, to terminate the Partnership.
B-15
(4)
Beneficial
Owners.
As
provided in the Depository Agreement, upon the settlement date of any creation,
transfer or redemption of Units, the Depository will credit or debit, on its
book-entry registration and transfer system, the number of Units so created,
transferred or redeemed to the accounts of the appropriate DTC Participants.
The
accounts to be credited and charged shall be designated by the General Partner
on behalf of the Partnership and each Participant, in the case of a creation
or
redemption of Baskets. Ownership of beneficial interest in Units will be limited
to DTC Participants, Indirect Participants and persons holding interests through
DTC Participants and Indirect Participants. Beneficial Owners will be shown
on,
and the transfer of beneficial ownership by Beneficial Owners will be effected
only through, in the case of DTC Participants, records maintained by the
Depository and, in the case of Indirect Participants and Beneficial Owners
holding through a DTC Participant or an Indirect Participant, through those
records or the records of the relevant DTC Participants. Beneficial Owners
are
expected to receive, from or through the broker or bank that maintains the
account through which the Beneficial Owner has purchased Units, a written
confirmation relating to their purchase of Units.
(5)
Reliance
on Procedures.
Except
for those who have provided Transfer Applications to the General Partner, so
long as Cede & Co., as nominee of the Depository, is the registered owner of
Units, references herein to the registered or record owners of Units shall
mean
Cede & Co. and shall not mean the Beneficial Owners of Units. Beneficial
Owners of Units will not be entitled to have Units registered in their names,
will not receive or be entitled to receive physical delivery of certificates
in
definitive form and will not be considered the record or registered holder
of
Units under this Agreement. Accordingly, to exercise any rights of a holder
of
Units under the Agreement, a Beneficial Owner must rely on the procedures of
the
Depository and, if such Beneficial Owner is not a DTC Participant, on the
procedures of each DTC Participant or Indirect Participant through which such
Beneficial Owner holds its interests. The Partnership and the General Partner
understand that under existing industry practice, if the Partnership requests
any action of a Beneficial Owner, or a Beneficial Owner desires to take any
action that the Depository, as the record owner of all outstanding Units, is
entitled to take, the Depository will notify the DTC Participants regarding
such
request, such DTC Participants will in turn notify each Indirect Participant
holding Units through it, with each successive Indirect Participant continuing
to notify each person holding Units through it until the request has reached
the
Beneficial Owner, and in the case of a request or authorization to act that
is
being sought or given by a Beneficial Owner, such request or authorization
is
given by the Beneficial Owner and relayed back to the Partnership through each
Indirect Participant and DTC Participant through which the Beneficial Owner’s
interest in the Units is held.
(6)
Communication
between the Partnership and the Beneficial Owners.
As
described above, the Partnership will recognize the Depository or its nominee
as
the owner of all Units for all purposes except as expressly set forth in this
Agreement. Conveyance of all notices, statements and other communications to
Beneficial Owners will be effected in accordance with this paragraph. Pursuant
to the Depository Agreement, the Depository is required to make available to
the
Partnership, upon request and for a fee to be charged to the Partnership, a
listing of the Unit holdings of each DTC Participant. The Partnership shall
inquire of each such DTC Participant as to the number of Beneficial Owners
holding Units, directly or indirectly, through such DTC Participant. The
Partnership shall provide each such DTC Participant with sufficient copies
of
such notice, statement or other communication, in such form, number and at
such
place as such DTC Participant may reasonably request, in order that such notice,
statement or communication may be transmitted by such DTC Participant, directly
or indirectly, to such Beneficial Owners. In addition, the Partnership shall
pay
to each such DTC Participant an amount as reimbursement for the expenses
attendant to such transmittal, all subject to applicable statutory and
regulatory requirements.
(7)
Distributions.
Distributions on Units pursuant to this Agreement shall be made to the
Depository or its nominee, Cede & Co., as the registered owner of all Units.
The Partnership and the General Partner expect that the Depository or its
nominee, upon receipt of any payment of distributions in respect of Units,
shall
credit immediately DTC Participants’ accounts with payments in amounts
proportionate to their respective beneficial interests in Units as shown on
the
records of the Depository or its nominee. The Partnership and the General
Partner also expect that payments by DTC Participants to Indirect Participants
and Beneficial Owners held through such DTC Participants and Indirect
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in a “street
name,”
and
will be the responsibility of such DTC Participants and Indirect Participants.
Neither the Partnership nor the General Partner will have any responsibility
or
liability for any aspects of the records relating to or notices to Beneficial
Owners, or payments made on account of beneficial ownership interests in Units,
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests or for any other aspect of the relationship
between the Depository and the DTC Participants or the relationship between
such
DTC Participants and the Indirect Participants and Beneficial Owners owning
through such DTC Participants or Indirect Participants or between or among
the
Depository, any Beneficial Owner and any person by or through which such
Beneficial Owner is considered to own Units.
B-16
(8)
Limitation
of Liability.
The
Global Certificate to be issued hereunder is executed and delivered solely
on
behalf of the Partnership by the General Partner, in its capacity as such,
and
in the exercise of the powers and authority conferred and vested in it by this
Agreement. The representations, undertakings and agreements made on the part
of
the Partnership in the Global Certificate are made and intended not as personal
representations, undertakings and agreements by the General Partner, but are
made and intended for the purpose of binding only the Partnership. Nothing
in
the Global Certificate shall be construed as creating any liability on the
General Partner, individually or personally, to fulfill any representation,
undertaking or agreement other than as provided in this Agreement.
(9)
Successor
Depository.
If a
successor to the Depository shall be employed as Depository hereunder, the
Partnership and the General Partner shall establish procedures acceptable to
such successor with respect to the matters addressed in this
Section 9.2.2.
(10)
Transfer
of Units.
Beneficial Owners that are not DTC Participants may transfer Units by
instructing the DTC Participant or Indirect Participant holding the Units for
such Beneficial Owner in accordance with standard securities industry practice.
Beneficial Owners that are DTC Participants may transfer Units by instructing
the Depository in accordance with the rules of the Depository and standard
securities industry practice.
9.2.3
Except as otherwise provided in this Agreement, the Partnership shall not
recognize any transfer of Units until the Certificates (if applicable), and
a
Transfer Application have been provided to the General Partner evidencing such
Units are surrendered for registration of transfer. Such Certificates must
be
accompanied by a Transfer Application duly executed by the transferee (or the
transferee’s attorney-in-fact duly authorized in writing). No charge shall be
imposed by the Partnership for such transfer, provided, that, as a condition
to
the issuance of any new Certificate under this Article 9.2, the General Partner
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed with respect thereto.
9.3
Mutilated,
Destroyed, Lost or Stolen Certificates.
9.3.1
If
any mutilated Certificate is surrendered to the Transfer Agent, the General
Partner on behalf of the Partnership, shall execute, and upon its request,
the
Transfer Agent shall countersign and deliver in exchange therefore, a new
Certificate evidencing the same number of Units as the Certificate so
surrendered.
9.3.2
The
General Partner, on behalf of the Partnership, shall execute, and upon its
request, the Transfer Agent shall countersign and deliver a new Certificate
in
place of any Certificate previously issued if the Record Holder of the
Certificate:
(a)
makes
proof by affidavit, in form and substance satisfactory to the General Partner,
that a previously issued Certificate has been lost, destroyed or
stolen;
(b)
requests the issuance of a new Certificate before the Partnership has received
notice that the Certificate has been acquired by a purchaser for value in good
faith and without notice of an adverse claim;
(c)
if
requested by the General Partner, delivers to the Partnership a bond or such
other form of security or indemnity as may be required by the General Partner,
in form and substance satisfactory to the General Partner, with surety or
sureties and with fixed or open penalty as the General Partner may direct,
in
its sole discretion, to indemnify the Partnership, the General Partner and
the
Transfer Agent against any claim that may be made on account of the alleged
loss, destruction or theft of the Certificate; and
B-17
(d)
satisfies any other reasonable requirements imposed by the General
Partner.
If
a
Limited Partner or Assignee fails to notify the Partnership within a reasonable
time after it has notice of the loss, destruction or theft of a Certificate,
and
a transfer of the Units represented by the Certificate is registered before
the
Partnership, the General Partner or the Transfer Agent receives such
notification, the Limited Partner or Assignee shall be precluded from making
any
claim against the Partnership, the General Partner or the Transfer Agent for
such transfer or for a new Certificate.
9.3.3
As
a condition to the issuance of any new Certificate under this Article 9.3,
the General Partner may require the payment of a sum sufficient to cover any
tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including, without limitation, the fees and expenses of the
Transfer Agent) connected therewith.
9.4
Record
Holder.
The
Partnership shall be entitled to recognize the Record Holder as the Limited
Partner or Assignee with respect to any Units and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such Units
on
the part of any other Person, whether or not the Partnership shall have actual
or other notice thereof, except as otherwise provided by law or any applicable
rule, regulation, guideline or requirement of any national securities exchange
on which the Units are listed for trading. Without limiting the foregoing,
when
a Person (such as a broker, dealer, bank trust company or clearing corporation
or an agent of any of the foregoing) is acting as nominee, agent or in some
other representative capacity for another Person in acquiring and/or holding
Units, as between the Partnership on the one hand and such other Persons on
the
other hand such representative Person (a) shall be the Limited Partner or
Assignee (as the case may be) of record and beneficially, (b) must execute
and deliver a Transfer Application and (c) shall be bound by this Agreement
and shall have the rights and obligations of a Limited Partner or Assignee
(as
the case may be) hereunder and as provided for herein.
9.5
Partnership
Securities.
The
General Partner is hereby authorized to cause the Partnership to issue
Partnership Securities, for any Partnership purpose, at any time or from time
to
time, to the Partners or to other Persons for such consideration and on such
terms and conditions as shall be established by the General Partner in its
sole
discretion, all without the approval of any Limited Partners. The General
Partner shall have sole discretion, subject to the requirements of the Act,
in
determining the consideration and terms and conditions with respect to any
future issuance of Partnership Securities.
9.5.1
The
General Partner shall do all things necessary to comply with the Act and is
authorized and directed to do all things it deems to be necessary or advisable
in connection with any future issuance of Partnership Securities, including,
without limitation, compliance with any statute, rule, regulation or guideline
of any federal, state or other governmental agency or any national securities
exchange on which the Units or other Partnership Securities are listed for
trading.
ARTICLE
10
TRANSFER
OF INTERESTS
10.1
Transfer.
10.1.1
The term “transfer,”
when
used in this Article 10 with respect to an interest, shall be deemed to refer
to
an appropriate transaction by which the General Partner assigns its interest
as
General Partner to another Person or by which the holder of a Unit assigns
such
Unit to another Person who is or becomes an Assignee and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or
any
other disposition by law or otherwise.
10.1.2
No
interest shall be transferred in whole or in part, except in accordance with
the
terms and conditions set forth in this Article 10. Any transfer or
purported transfer of an interest not made in accordance with this
Article 10 shall be null and void.
10.2
Transfer
of General Partner’s Interest.
B-18
10.2.1
Except as set forth in this Article 10.2.1, the General Partner may transfer
all, but not less than all, of its interest as the general partner to a single
transferee if, but only if, (i) at least a majority of the Limited Partners
approve of such transfer and of the admission of such transferee as general
partner, (ii) the transferee agrees to assume the rights and duties of the
General Partner and be bound by the provisions of this Agreement and other
applicable agreements, and (iii) the Partnership receives an Opinion of
Counsel that such transfer would not result in the loss of limited liability
of
any Limited Partner or of the Partnership or cause the Partnership to be taxable
as a corporation or otherwise taxed as an entity for federal income tax
purposes. The foregoing notwithstanding, the General Partner is expressly
permitted to pledge its interest as General Partner to secure the obligations
of
the Partnership under a Revolving Credit Facility, as the same may be amended,
supplemented, replaced, refinanced or restated from time to time, or any
successor or subsequent loan agreement.
10.2.2
Neither Article 10.2.1 nor any other provision of this Agreement shall be
construed to prevent (and all Partners do hereby consent to) (i) the
transfer by the General Partner of all of its interest as a general partner
to
an Affiliate or (ii) the transfer by the General Partner of all its
interest as a general partner upon its merger or consolidation with or other
combination into any other Person or the transfer by it of all or substantially
all of its assets to another Person if, in the case of a transfer described
in
either clause (i) or (ii) of this sentence, the rights and duties of the General
Partner with respect to the interest so transferred are assumed by the
transferee and the transferee agrees to be bound by the provisions of this
Agreement; provided, that in either such case, such transferee furnishes to
the
Partnership an Opinion of Counsel that such merger, consolidation, combination,
transfer or assumption will not result in a loss of limited liability of any
Limited Partner or of the Partnership or cause the Partnership to be taxable
as
a corporation or otherwise taxed as an entity for federal income tax purpose.
In
the case of a transfer pursuant to this Article 10.2.2, the transferee or
successor (as the case may be) shall be admitted to the Partnership as the
General Partner immediately prior to the transfer of the interest, and the
business of the Partnership shall continue without dissolution.
10.3
Transfer
of Units.
10.3.1
Units may be transferred only in the manner described in Article 9.2. The
transfer of any Units and the admission of any new Partner shall not constitute
an amendment to this Agreement.
10.3.2
Until admitted as a Substituted Limited Partner pursuant to Article 11, the
Record Holder of a Unit shall be an Assignee in respect of such Unit. Limited
Partners may include custodians, nominees or any other individual or entity
in
its own or any representative capacity.
10.3.3
Each distribution in respect of Units shall be paid by the Partnership, directly
or through the Transfer Agent or through any other Person or agent, only to
the
Record Holders thereof as of the Record Date set for the distribution. Such
payment shall constitute full payment and satisfaction of the Partnership’s
liability in respect of such payment, regardless of any claim of any Person
who
may have an interest in such payment by reason of an assignment or
otherwise.
10.3.4
A
transferee who has completed and delivered a Transfer Application provided
by
the seller of the Units (or if purchased on an exchange directly from the
Partnership), shall be deemed to have (i) requested admission as a
Substituted Limited Partner, (ii) agreed to comply with and be bound by and
to have executed this Agreement, (iii) represented and warranted that such
transferee has the capacity and authority to enter into this Agreement,
(iv) made the powers of attorney set forth in this Agreement, and
(v) given the consents and made the waivers contained in this
Agreement.
10.4
Restrictions
on Transfers.
Notwithstanding the other provisions of this Article 10, no transfer of any
Unit or interest therein of any Limited Partner or Assignee shall be made if
such transfer would (a) violate the then applicable federal or state
securities laws or rules and regulations of the SEC, any state securities
commission, the CFTC, or any other governmental authorities with jurisdiction
over such transfer, (b) cause the Partnership to be taxable as a
corporation or (c) affect the Partnership’s existence or qualification as a
limited partnership under the Act. The General Partner may request each Record
Holder to furnish certain information, including that holder’s nationality,
citizenship or other related status. A transferee who is not a U.S. resident
may
not be eligible to become a Record Holder or a Limited Partner if such ownership
would subject the Partnership to the risk of cancellation or forfeiture of
any
of its assets under any federal, state or local law or regulation. If the Record
Holder fails to furnish the information or if the General Partner determines,
on
the basis of the information furnished by the holder in response to the request,
that such holder is not qualified to become one of a Limited Partner, the
General Partner may be substituted as a holder for the Record Holder, who will
then be treated as a non-citizen assignee, and the Partnership will have the
right to redeem those securities held by the Record Holder.
B-19
10.5
Tax
Certificates.
10.5.1
All Limited Partners or Assignees (or, if the Limited Partner or Assignee is
a
nominee holding for the account of a Beneficial Owner, the Beneficial Owner)
are
required to provide the Partnership with a properly completed Tax
Certificate.
10.5.2
If
a Limited Partner or Assignee (or, if the Limited Partner or Assignee is a
nominee holding for the account of a Beneficial Owner, the Beneficial Owner)
fails to provide the Partnership with a properly completed Tax Certificate,
the
General Partner may request at any time and from time to time, that such Limited
Partner or Assignee (or Beneficial Owner) shall, within 15 days after request
(whether oral or written) therefore by the General Partner, furnish to the
Partnership, a properly completed Tax Certificate. If a Limited Partner or
Assignee fails to furnish to the General Partner within the aforementioned
15-day period such Tax Certificate, the Units owned by such Limited Partner
or
Assignee (or in the case of a Limited Partner or Assignee that holds Units
on
behalf of a Beneficial Owner, the Units held on behalf of the Beneficial Owner)
shall be subject to redemption in accordance with the provisions of Article
10.6.
10.6
Redemption
of Units for Failure to Provide Tax Certificate.
10.6.1
If
at any time a Limited Partner or Assignee fails to furnish a properly completed
Tax Certificate within the 15-day period specified in Article 10.5.2, the
Partnership may redeem the Units of such Limited Partner or Assignee as
follows:
(a)
The
General Partner shall not later than the tenth (10th) Business Day before the
date fixed for redemption, give notice of redemption to the Limited Partner
or
Assignee, at its last address designated on the records of the Partnership
or
the Transfer Agent, by registered or certified mail, postage prepaid. The notice
shall be deemed to have been given when so mailed (the “Notice
Date”).
The
notice shall specify the Redeemable Units, the date fixed for redemption, the
place of payment, and that payment of the redemption price will be made upon
surrender of the certification evidencing the Redeemable Units.
(b)
The
aggregate redemption price for Redeemable Units shall be an amount equal to
the
market price as of the Close of Business on the Business Day immediately prior
to the date fixed for redemption of Units to be so redeemed multiplied by the
number of Units included among the Redeemable Units. The redemption price shall
be paid in the sole discretion of the General Partner, in cash or by delivery
of
a promissory note of the Partnership in the principal amount of the redemption
price, bearing interest at the Prime Rate and payable in three equal annual
installments of principal together with accrued interest commencing one year
after the redemption date.
(c)
Upon
surrender by or on behalf of the Limited Partner or Assignee, at the place
specified in the notice of redemption, of the certification evidencing the
Redeemable Units, duly endorsed in blank or accompanied by an assignment duly
executed in blank, the Limited Partner or Assignee or its duly authorized
representative shall be entitled to receive the payment therefore.
(d)
In
the event the Partnership is required to pay withholding tax or otherwise
withhold any amount on behalf of, or with respect to, a Limited Partner or
Assignee (or Beneficial Owner) who has failed to provide a properly completed
Tax Certificate, such amounts paid or withheld by the Partnership shall be
deemed to have been paid to such Limited Partner or Assignee (or Beneficial
Owner) as part of the redemption price for the Redeemable Units and the
Partnership shall reduce the amount of the payment made to such Limited Partner
or Assignee (or Beneficial owner) in redemption of such Redeemable Units by
any
amounts so withheld.
10.6.2
After the Notice Date, Redeemable Units shall no longer constitute issued and
Outstanding Units and no allocations or distributions shall be made with respect
to such Redeemable Units. In addition, after the Notice Date, the Redeemable
Units shall not be transferable.
10.6.3
The provisions of this Article 10.6 shall also be applicable to Units held
by a
Limited Partner or Assignee as nominee of a Beneficial Owner.
B-20
ARTICLE
11
ADMISSION
OF PARTNERS
11.1
Admission
of Initial Limited Partners and Other Creation Basket Purchases.
Subject
to the requirements of this Article 11, upon the issuance by the
Partnership of Units to the Initial Limited Partner and any other purchasers
of
a Creation Basket, the General Partner shall admit the Initial Limited Partner
and such other purchasers of the Creation Basket to the Partnership as Limited
Partners in respect of the Units purchased.
11.2
Admission
of Substituted Limited Partners.
By
transfer of a Unit in accordance with Article 10, the transferor shall be
deemed to have given the transferee the right to seek admission as a Substituted
Limited Partner subject to the conditions of, and in the manner permitted under,
this Agreement. A transferor of a Certificate shall, however, only have the
authority to convey to a purchaser or other transferee who does not execute
and
deliver a Transfer Application (i) the right to negotiate such Certificate
to a purchaser or other transferee and (ii) the right to transfer the right
to request admission as a Substituted Limited Partner to such purchaser or
other
transferee in respect of the transferred Units. Each transferee of a Unit
(including, without limitation, any nominee holder or an agent acquiring such
Unit for the account of another Person) who executes and delivers a Transfer
Application shall, by virtue of such execution and delivery, be an Assignee
and
be deemed to have applied to become a Substituted Limited Partner with respect
to the Units so transferred to such Person. Such Assignee shall become a
Substituted Limited Partner (i) at such time as the General Partner
consents thereto, which consent may be given or withheld in the General
Partner’s sole discretion, and (ii) when any such admission is shown on the
books and records of the Partnership, following the consent of the General
Partner to such admission. If such consent is withheld, such transferee shall
be
an Assignee. An Assignee shall have an interest in the Partnership equivalent
to
that of a Limited Partner with respect to allocations and distributions,
including, without limitation, liquidating distributions, of the Partnership.
With respect to voting rights attributable to Units that are held by Assignees,
the General Partner shall be deemed to be the Limited Partner with respect
thereto and shall, in exercising the voting rights in respect of such Units
on
any matter, vote such Units at the written direction of the Assignee who is
the
Record Holder of such Units. If no such written direction is received, such
Units will not be voted. An Assignee shall have none of the other rights of
a
Limited Partner.
11.3
Admission
of Successor General Partner.
A
successor General Partner approved pursuant to this Article 11.3 or the
transferee of or successor to all of the General Partner’s interest pursuant to
Article 10.2 who is proposed to be admitted as a successor General Partner
shall be admitted to the Partnership as the General Partner, effective
immediately prior to the withdrawal or removal of the General Partner pursuant
to Article 12 or the transfer of the General Partner’s interest pursuant to
Article 10.2; provided, however, that no such successor shall be admitted
to the Partnership until compliance with the terms of Article 10.2 has
occurred. Any such successor shall carry on the business of the Partnership
without dissolution. In each case, the admission shall be subject to the
successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be requited to effect the
admission.
11.4
Admission
of Additional Limited Partners.
11.4.1
A
Person (other than the General Partner, an Initial Limited Partner or a
Substituted Limited Partner) who makes a Capital Contribution to the Partnership
in accordance with this Agreement shall be admitted to the Partnership as an
Additional Limited Partner only upon furnishing to the General Partner
(i) evidence of acceptance in form satisfactory to the General Partner of
all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in this Agreement, and (ii) such
other documents or instruments as may be required in the discretion of the
General Partner to effect such Person’s admission as an Additional Limited
Partner.
11.4.2
Notwithstanding anything to the contrary in this Article 11.4, no Person
shall be admitted as an Additional Limited Partner without the consent of the
General Partner, which consent may be given or withheld in the General Partner’s
sole discretion. The admission of any Person as an Additional Limited Partner
shall become effective on the date upon which the name of such Person is
recorded on the books and records of the Partnership, following the consent
of
the General Partner to such admission.
11.5
Amendment
of Agreement and Certificate of Limited Partnership.
To
effect the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary and appropriate under the Act to amend the
records of the Partnership and if necessary, to prepare as soon as practical
an
amendment of this Agreement and if required by law, to prepare and file an
amendment to the Certificate of Limited Partnership and may for this purpose,
among others, exercise the power of attorney granted pursuant to
Article 15.
B-21
ARTICLE
12
WITHDRAWAL
OR REMOVAL OF PARTNERS
12.1
Withdrawal
of the General Partner.
12.1.1
The General Partner shall be deemed to have withdrawn from the Partnership
upon
the occurrence of any one of the following events (each such event herein
referred to as an “Event
of Withdrawal”):
(a)
the
General Partner voluntarily withdraws from the Partnership by giving written
notice to the other Partners;
(b)
the
General Partner transfers all of its rights as general partner pursuant to
this
Agreement;
(c)
the
General Partner is removed;
(d)
the
General Partner (1) makes a general assignment for the benefit of
creditors; (2) files a voluntary bankruptcy petition; (3) files a
petition or answer seeking for itself a reorganization, arrangement,
composition, readjustment liquidation, dissolution or similar relief under
any
law; (4) files an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against the General Partner in
a
proceeding of the type described in clauses (1) - (3) of this sentence; or
(5) seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator of the General Partner or of all or any substantial
part
of its properties;
(e)
a
final and non-appealable judgment is entered by a court with appropriate
jurisdiction ruling that the General Partner is bankrupt or insolvent or a
final
and non-appealable order for relief is entered by a court with appropriate
jurisdiction against the General Partner, in each case under any federal or
state bankruptcy or insolvency laws as now or hereafter in effect;
or
(f)
a
certificate of dissolution or its equivalent is filed for the General Partner,
or 90 days expire after the date of notice to the General Partner of revocation
of its charter without a reinstatement of its charter, under the laws of its
state of incorporation.
If
an
Event of Withdrawal specified in this Article 12.1.1(d), (e) or (f) occurs,
the withdrawing General Partner shall give written notice to the Limited
Partners within 30 days after such occurrence. The Partners hereby agree that
only the Events of Withdrawal described in this Article 12.1 shall result
in the withdrawal of the General Partner from the Partnership.
12.1.2
Withdrawal of the General Partner from the Partnership upon the occurrence
of an
Event of Withdrawal will not constitute a breach of this Agreement under the
following circumstances, (i) the General Partner voluntarily withdraws by
giving at least 90 days’ advance notice to the Limited Partners, such withdrawal
to take effect on the date specified in such notice; or (ii) at any time
that the General Partner ceases to be a General Partner pursuant to
Article 12.1.1(b) or is removed pursuant to Article 12.2. If the
General Partner gives a notice of withdrawal pursuant to Article 12.1.1(a),
holders of at least a majority of such Outstanding Units (excluding for purposes
of such determination any Units owned by the General Partner and its Affiliates)
may, prior to the effective date of such withdrawal, elect a successor General
Partner. If, prior to the effective date of the General Partner’s withdrawal, a
successor is not selected by the Unitholders as provided herein, the Partnership
shall be dissolved in accordance with Article 13. If a successor General
Partner is elected, such successor shall be admitted immediately prior to the
effective time of the withdrawal or removal of the Departing Partner and shall
continue the business of the Partnership without dissolution.
12.2
Removal
of the General Partner.
The
General Partner may be removed only if such removal is approved by the
Unitholders holding at least 66 2/3% of the Outstanding Units (excluding for
this purpose any Units held by the General Partner and its Affiliates). Any
such
action by such holders for removal of the General Partner must also provide
for
the election of a successor General Partner by the Unitholders holding a
majority of the Outstanding Units (excluding for this purpose any Units held
by
the General Partner and its Affiliates). Such removal shall be effective
immediately following the admission of a successor General
Partner.
B-22
12.3
Withdrawal
of a Limited Partner other than the Organizational Limited
Partner.
In
addition to withdrawal of a Limited Partner due to its redemption of Units
constituting a Redemption Basket under this Agreement, the General Partner
may,
at any time, in its sole discretion, require any Limited Partner to withdraw
entirely from the Partnership or to withdraw a portion of its Partner Capital
Account, by giving not less than 15 days’ advance written notice to the Limited
Partner thus designated. In addition, the General Partner without notice may
require at any time, or retroactively, withdrawal of all or any portion of
its
Capital Account of any Limited Partner: (i) that made a misrepresentation
to the General Partner in connection with its purchase of Units; or
(ii) whose ownership of Units would result in the violation of any law or
regulations applicable to the Partnership or a Partner. The Limited Partner
thus
designated shall withdraw from the Partnership or withdraw that portion of
his
Partner capital account specified in such notice, as the case may be, as of
the
Close of Business on such date as determined by the General Partner. The Limited
Partner thus designated shall be deemed to have withdrawn from the Partnership
or to have made a partial withdrawal from its Partner Capital Account, as the
case may be, without further action on the part of said Limited Partner and
the
provisions of Article 17.6 shall apply.
ARTICLE
13
TERMINATION
AND DISTRIBUTION
13.1
Termination.
The
Partnership shall continue in effect from the date of its formation in
perpetuity, unless sooner terminated upon the occurrence of any one or more
of
the following events:
(a)
The
death, adjudication of incompetence, bankruptcy, dissolution, withdrawal, or
removal of a General Partner who is the sole remaining General Partner, unless
a
majority in interest of the Limited Partners within 90 days after such
event elects to continue the Partnership and appoints a successor General
Partner; or
(b)
The
affirmative vote of a majority in interest of the Limited Partners; provided,
however, that any such termination shall be subject to the conditions set forth
in this Agreement.
13.2
Assumption
of Agreements.
No vote
by the Limited Partners to terminate the Partnership pursuant to paragraph
Section 13.1(b) shall be effective unless, prior to or concurrently with
such vote, there shall have been established procedures for the assumption
of
the Partnership’s obligations arising under any agreement to which the
Partnership is a party and which is still in force immediately prior to such
vote regarding termination, and there shall have been an irrevocable appointment
of an agent who shall be empowered to give and receive notices, reports and
payments under such agreements, and hold and exercise such other powers as
are
necessary to permit all other parties to such agreements to deal with such
agent
as if the agent were the sole owner of the Partnership’s interest, which
procedures are agreed to in writing by each of the other parties to such
agreements.
13.3
Distribution
13.3.1
Upon termination of the Partnership, the affairs of the Partnership shall be
wound up and all of its debts and liabilities discharged or otherwise provided
for in the order of priority as provided by law. The fair market value of the
remaining assets of the Partnership shall then be determined by the General
Partner. Thereupon, the assets of the Partnership shall be distributed to the
Partners pro rata in accordance with their Units. Each Partner shall receive
its
share of the assets in cash or in kind, and the proportion of such share that
is
received in cash may vary from Partner to Partner, all as the General Partner
in
its sole discretion may decide. If such distributions are insufficient to return
to any Partner the full amount of its Capital Contributions, such Partner shall
have no recourse against any other Partner.
13.3.2
The winding up of the affairs of the Partnership and the distribution of its
assets shall be conducted exclusively by the General Partner or its successor,
which is hereby authorized to do all acts authorized by law for these purposes.
Without limiting the generality of the foregoing, the General Partner, in
carrying out such winding up and distribution, shall have full power and
authority to sell all or any of the Partnership’s assets or to distribute the
same in kind to the Partners.
B-23
ARTICLE
14
MEETINGS
14.1
Meeting
of Limited Partners.
Upon
the written request of 20% or more in interest of the Limited Partners, the
General Partner may, but is not required to, call a meeting of the Limited
Partners. Notice of such meeting shall be given within 30 days after, and the
meeting shall be held within 60 days after, receipt of such request. The General
Partner may also call a meeting not less than 20 and not more than 60 days
prior
to the meeting. Any such notice shall state briefly the purpose of the meeting,
which shall be held at a reasonable time and place.
ARTICLE
15
POWER
OF ATTORNEY
15.1
Appointment.
Each
Limited Partner and each Assignee hereby constitutes and appoints each of the
General Partner and, if a liquidator shall have been selected, the liquidator
severally (and any successor to either thereof by merger, transfer, assignment,
election or otherwise) and each of their respective authorized officers and
attorneys-in-fact with full power of substitution, as its true and lawful agent
and attorney-in-fact with full power and authority in its name, place and stead
to:
(a)
execute, swear to, acknowledge, deliver, file and record in the appropriate
public offices (i) all certificates, documents and other instruments
(including, without limitation, this Agreement and the Certificate of Limited
Partnership and all amendments or restatements thereof) that the General Partner
or the liquidator deems necessary or appropriate to form, qualify or continue
the existence or qualification of the Partnership as a limited partnership
(or a
partnership in which the limited partners have limited liability) in the State
of Delaware and in all other jurisdictions in which the Partnership may conduct
business or own property, (ii) all certificates, documents and other
instruments that the General Partner or the liquidator deems necessary or
appropriate to reflect, in accordance with its terms, any amendment, change,
modification or restatement of this Agreement, (iii) all certificates,
documents and other instruments (including, without limitation, conveyances
and
a certificate of cancellation) that the General Partner or the liquidator deems
necessary or appropriate to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement, (iv) all certificates,
documents and other instruments relating to the admission, withdrawal, removal
or substitution of any Partner or the Capital Contribution of any Partner,
(v) all certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of any Units issued,
and
(vi) all certificates documents and other instruments (including, without
limitation, agreements and a certificate of merger) relating to a merger or
consolidation of the Partnership;
(b)
execute, swear to, acknowledge, deliver, file and record all ballots, consents,
approval waivers, certificates and other instruments necessary or appropriate,
in the sole discretion of the General Partner or the liquidator, to make,
evidence, give, confirm or ratify any vote, consent, approval, agreement or
other action that is made or given by the Partners hereunder or is consistent
with the terms of this Agreement or is necessary or appropriate, in the sole
discretion of the General Partner or the liquidator, to effectuate the terms
or
intent of this Agreement, provided, that when required by this Agreement that
establishes a percentage of the Limited Partners or of the Limited Partners
of
any class or series required to take any action, the General Partner or the
liquidator may exercise the power of attorney made in this Article 15 only
after the necessary vote, consent or approval of the Limited Partners or of
the
Limited Partners of such class or series;
15.2
Survival.
The
foregoing power of attorney is hereby declared to be irrevocable and a power
coupled with an interest and it shall survive and not be affected by the
subsequent death, incompetence, disability, incapacity, dissolution, bankruptcy
or termination of any Limited Partner or Assignee and the transfer of all or
any
portion of such Limited Partner’s or Assignee’s Partnership interest and shall
extend to such Limited Partners or Assignee’s heirs, successors, assigns and
personal representatives. Each such Limited Partner or Assignee hereby agrees
to
be bound by any representation made by the General Partner or the liquidator
acting in good faith pursuant to such power of attorney; and each such Limited
Partner or Assignee hereby waives any and all defenses that may be available
to
contest, negate or disaffirm the action of the General Partner or the liquidator
taken in good faith under such power of attorney. Each Limited Partner or
Assignee shall execute and deliver to the General Partner or the liquidator,
within 15 days after receipt of the General Partner’s or the liquidator’s
request therefor, such further designations, powers of attorney and other
instruments as the General Partner or the liquidator deems necessary to
effectuate this Agreement and the purposes of the Partnership.
B-24
ARTICLE
16
CREATION
OF UNITS
16.1
General.
The
Partnership will create and redeem Units from time to time, but only in one
or
more Creation Baskets or Redemption Baskets (a block of 100,000 Units shall
be
referred to as a “Basket”).
The
creation and redemption of Baskets will only be made in exchange for delivery
to
the Partnership or the distribution by the Partnership of the amount of United
States government securities with maturities of 2 years or less (“Treasuries”)
and
any cash represented by the Baskets being created or redeemed, the amount of
which will be based on the combined NAV of the number of Units included in
the
Baskets being created or redeemed determined on the day the order to create
or
redeem Baskets is properly received.
16.2
Creation
Procedures.
On any
Business Day, a Participant, may place an order with the Partnership’s marketing
agent to create one or more Baskets. Purchase orders must be placed by 12:00
PM
New York time or the close of regular trading on the American Stock Exchange,
whichever is earlier; except in the case of the Initial Limited Partner’s
initial order to purchase one or more Creation Baskets on the first day the
Baskets are to be offered and sold, when such orders shall be placed by 9:00
AM
New York time on the day agreed to by the General Partner and the Initial
Limited Partner. The day on which the marketing agent receives a valid purchase
order is the purchase order date. By placing a purchase order, the Participant
agrees to deposit Treasuries with the Partnership, or a combination of
Treasuries and cash. Prior to the delivery of Baskets for a purchase order,
the
Participant must also have wired to the custodian the non-refundable creation
transaction fee described in this Article 16.
16.3
Determination
of Required Deposits.
The
total deposit required to create each Basket (“Creation
Basket Deposit”)
is an
amount of Treasuries and cash with a value that is in the same proportion to
the
total assets of the Partnership (net of estimated accrued but unpaid fees,
expenses and other liabilities) on the date the order to purchase is properly
received as the number of Units to be created under the purchase order is in
proportion to the total number of Units outstanding on the date the order is
received. The General Partner determines, in its sole discretion or in
consultation with the Administrator, the requirements for Treasuries that may
be
included in deposits to create Baskets and publishes, or its agent publishes
on
its behalf, such requirements at the beginning of each Business Day. The amount
of cash deposit required is the difference between (i) the aggregate market
value of the Treasuries included in a Creation Basket Deposit as of 4:00 PM
on
the date the order to purchase properly was made and (ii) the total
required deposit.
16.4
Delivery
of Required Deposits.
A
Participant who places a purchase order is responsible for transferring the
Partnership’s account with the custodian the required amount of Treasuries and
cash by the end of the third Business Day following the purchase order date.
Upon receipt of the deposit amount, the Administrator will direct DTC to credit
the number of Baskets ordered to the Participant’s DTC account on the third
Business Day following the purchase order date. The expense and risk of delivery
and ownership of Treasuries until such Treasuries have been received by the
custodian on behalf of the Partnership shall be borne solely by the
Participant.
16.5
Rejection
of Purchase Orders.
The
General Partner, or its marketing agent on its behalf, may reject a purchase
order or a Creation Basket Deposit if: (1) it determines that the purchase
order or the Creation Basket Deposit is not in proper form; (2) the General
Partner believes that the purchase order or the Creation Basket Deposit would
have adverse tax consequences to the Partnership or Limited Partners;
(3) the acceptance or receipt of the Creation Basket Deposit would, in the
opinion of counsel to the General Partner, be unlawful; or
(4) circumstances outside the control of the General Partner, marketing
agent or custodian make it, for all practical purposes, not feasible to process
creations of Baskets. None of the General Partner, marketing agent or custodian
will be liable for the rejection of any purchase order or Creation Basket
Deposit.
16.6
Creation
Transaction Fee.
To
compensate the Partnership for its expenses in connection with the creation
of
Baskets, a Participant is required to pay a transaction fee to the Partnership
of $1,000 per order to create Baskets. An order may include multiple Baskets.
The transaction fee may be reduced, increased or otherwise changed by the
General Partner. The General Partner shall notify DTC in advance of any change
in the transaction fee and will not implement any increase in the fee for the
creation of Baskets until 30 days after the date of the notice.
B-25
ARTICLE
17
REDEMPTION
OF UNITS
17.1
General.
The
procedures by which a Participant can redeem one or more Baskets mirror the
procedures for the creation of Baskets. On any Business Day, a Participant
may
place an order with the marketing agent to redeem one or more Baskets.
Redemption orders must be placed by 12:00 PM New York time or the close of
regular trading on the American Stock Exchange, whichever is earlier. A
redemption order so received is effective on the date it is received in
satisfactory form by the marketing agent. The day on which the marketing agent
receives a valid redemption order is the redemption order date. By placing
a
redemption order, a Participant agrees to deliver the Baskets to be redeemed
through DTC’s book-entry system to the Partnership not later than 3:00 PM New
York time on the third Business Day following the effective date of the
redemption order. Prior to the delivery of the redemption distribution for
a
redemption order, the Participant must also have wired to the Partnership’s
account with the custodian the non-refundable redemption transaction fee
described in this Article 17.
17.2
Determination
of Redemption Distribution.
The
redemption distribution from the Partnership consists of a transfer to the
redeeming Participant of an amount of Treasuries and/or cash with a value that
is in the same proportion to the total assets of the Partnership (net of
estimated accrued but unpaid fees, expenses and other liabilities) on the date
the order to redeem is properly received as the number of Units to be redeemed
under the redemption order is in proportion to the total number of Units
outstanding on the date the order to redeem is received. The General Partner,
directly or through its agent, will determine the requirements for Treasuries
and the amount of cash, including the maximum permitted remaining maturity
of a
Treasury, and the proportions of Treasuries and cash, that may be included
in
distributions to redeem Baskets. The marketing agent will publish such
requirements as of 4:00 PM New York time on the redemption order
date.
17.3
Delivery
of Redemption Distribution.
The
redemption distribution due from the Partnership is delivered to the Participant
by 3:00 PM New York time on the third Business Day following the redemption
order date if, by 3:00 PM New York time on such third Business Day, the
Partnership’ s DTC account has been credited with the Baskets to be redeemed. If
the Partnership’s DTC account has not been credited with all of the Baskets to
be redeemed by such time, the redemption distribution is delivered to the extent
of whole Baskets received. Any remainder of the redemption distribution is
delivered on the next Business Day to the extent of remaining whole Baskets
received if the Partnership (1) receives the fee applicable to the
extension of the redemption distribution date which the General Partner may,
from time to time, determine and (2) the remaining Baskets to be redeemed
are credited to the Partnership’s DTC account by 3:00 PM New York time on such
next Business Day. Any further remaining amount of the redemption order shall
be
cancelled and the Participant will indemnify the Partnership for any losses,
if
any, due to such cancellation, including but not limited to the difference
in
the price of investments sold as a result of the redemption order and
investments made to reflect that such order has been cancelled. The custodian
is
also authorized to deliver the redemption distribution notwithstanding that
the
Baskets to be redeemed are not credited to the Partnership’s DTC account by 3:00
PM New York time on the third Business Day following the redemption order date
if the Participant has collateralized its obligation to deliver the Baskets
through DTC’s book entry system on such terms as the General Partner may from
time to time determine.
17.4
Suspension
or Rejection of Redemption orders.
The
General Partner may, in its discretion, suspend the right of redemption, or
postpone the redemption settlement date, (1) for any period during which
any of the New York Mercantile Exchange, the American Stock Exchange or the
New
York Stock Exchange is closed other than customary weekend or holiday closings,
or trading on the American Stock Exchange is suspended or restricted,
(2) for any period during which an emergency exists as a result of which
delivery, disposal or evaluation of Treasuries is not reasonably practicable,
or
(3) for such other period as the General Partner determines to be necessary
for the protection of the Limited Partners. None of the General Partner, the
marketing agent or the custodian will be liable to any person or in any way
for
any loss or damages that may result from any such suspension or postponement.
The General Partner will reject a redemption order if the order is not in proper
form or if the fulfillment of the order, in the opinion of its counsel, might
be
unlawful.
17.5
Redemption
Transaction Fee.
To
compensate the Partnership for its expenses in connection with the redemption
of
Baskets, a Participant is required to pay a transaction fee to the Partnership
of $1,000 per order to redeem Baskets. An order may include multiple Baskets.
The transaction fee may be reduced, increased or otherwise changed by the
General Partner. The General Partner shall notify DTC in advance of any change
in the transaction fee and will not implement any increase in the fee for the
redemption of Baskets until 30 days after the date of the
notice.
B-26
17.6
Required
Redemption.
The
General Partner may, at any time, in its sole discretion, require any Limited
Partner to withdraw entirely from the Partnership or to withdraw a portion
of
its Partner Capital Account, by giving not less than 15 days’ advance written
notice to the Limited Partner thus designated. In addition, the General Partner
without notice may require at any time, or retroactively, withdrawal of all
or
any portion of the Capital Account of any Limited Partner: (i) that the
General Partner determines is a benefit plan investor (within the meaning of
the
Department of Labor Regulation (s) 2510.3-101(f)(2)) in order for the assets
of
the Partnership not to be treated as plan assets under ERISA; (ii) that
made a misrepresentation to the General Partner in connection with its purchase
of Units; or (iii) whose ownership of Units would result in the violation
of any law or regulations applicable to the Partnership or a Partner. The
Limited Partner thus designated shall withdraw from the Partnership or withdraw
that portion of its Partner Capital Account specified in such notice, as the
case may be, as of the Close of Business on such date as determined by the
General Partner. The Limited Partner thus designated shall be deemed to have
withdrawn from the Partnership or to have made a partial withdrawal from its
Partner Capital Account, as the case may be, without further action on the
part
of said Limited Partner.
ARTICLE
18
MISCELLANEOUS
18.1
Notices.
Any
notice, offer, consent or other communication required or permitted to be given
or made hereunder shall be in writing and shall be deemed to have been
sufficiently given or made when delivered personally to the party (or an officer
of the party) to whom the same is directed, or (except in the event of a mail
strike) 5 Business Days after being mailed by first-class mail, postage prepaid,
if to the Partnership or to a General Partner, or if to a Limited Partner,
to
the address set forth on Exhibit C hereof. Any Partner may change its
address for the purpose of this Article by giving notice of such change to
the
Partnership, such change to become effective on the tenth Business Day after
such notice is given.
18.2
Waiver
of Partition.
Each
Partner hereby irrevocably waives during the term of the Partnership any right
that it may have to maintain any action for partition with respect to any
Partnership property.
18.3
Governing
Law, Successors, Severability.
This
Agreement shall be governed by the laws of the State of Delaware, as such laws
are applied by Delaware courts to agreements entered into and to be performed
in
Delaware by and between residents of Delaware and shall, subject to the
restrictions on transferability set forth herein, bind and inure to the benefit
of the heirs, executors, personal representatives successors and assigns of
the
parties hereto. If any provision of this Agreement shall be held to be invalid,
the remainder of this Agreement shall not be affected thereby.
18.4
Consent
to Jurisdiction.
The
General Partner and the Limited Partners hereby (i) irrevocably submit to
the non-exclusive jurisdiction of any Delaware state court or federal court
sitting in Wilmington, Delaware in any action arising out of or relating to
this
Agreement, and (ii) consent to the service of process by mail. Nothing
herein shall affect the right of any party to serve legal process in any manner
permitted by law or affect its right to bring any action in any other court.
Each party agrees that, in the event that any dispute arising from or relating
to this Agreement becomes subject to any judicial proceeding, such party, to
the
fullest extent permitted by applicable law, waives any right it may otherwise
have to (a) seek punitive or consequential damages, or (b) request a
trial by jury.
18.5
Entire
Agreement.
This
Agreement constitutes the entire agreement among the parties; it supercedes
any
prior agreement or understanding among them, oral or written, all of which
are
hereby canceled. This Agreement may not be modified or amended other than
pursuant to Article 3 and 15.
18.6
Headings.
The
headings in this Agreement are inserted for convenience of reference only and
shall not affect interpretation of this Agreement. Wherever from the context
it
appears appropriate, each term stated in either the singular or the plural
shall
include the singular and the plural and pronouns stated in either the masculine
or the neuter gender shall include the masculine, the feminine and the
neuter.
B-27
18.7
No
Waiver.
The
failure of any Partner to seek redress for violation, or to insist on strict
performance, of any covenant or condition of this Agreement shall not prevent
a
subsequent act which would have constituted a violation from having the effect
of an original violation.
18.8
Legends.
If
certificates for any interest or interests are issued evidencing a Limited
Partner’s interest in the Partnerships, each such certificate shall bear such
legends as may be required by applicable Federal and state laws, or as may
be
deemed necessary or appropriate by the General Partner to reflect restrictions
upon transfer contemplated herein.
18.9
Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original but all of which shall constitute one and the same
instrument.
18.10
Relationship
between the Agreement and the Act.
Regardless of whether any provisions of this Agreement specifically refer to
particular Default Rules, (a) if any provision of this Agreement conflicts
with a Default Rule, the provision of this Agreement controls and the Default
Rule is modified or negated accordingly, and (b) if it is necessary to
construe a Default Rule as modified or negated in order to effectuate any
provision of this Agreement, the Default Rule is modified or negated
accordingly. For purposes of this Article 18.10, “Default
Rule”
shall
mean a rule stated in the Act that applies except to the extent it is negated
or
modified through the provisions of the Partnership’s certificate of limited
partnership or this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first appearing above.
|
General
Partner
|
||
|
Victoria
Bay Asset Management, LLC
|
||
|
By:
|
||
|
Name
|
||
|
Title:
|
||
|
Initial
Limited Partner
|
||
|
KV
Execution Services, LLC
|
||
|
By:
|
||
|
Name
|
||
|
Title:
|
||
B-28
EXHIBIT
A
|
Assets
|
|
Management
Fee
|
|
First
$1,000,000,000
|
0.50%
of NAV
|
|
|
After
the first
$1,000,000,000
|
0.20%
of NAV
|
Fees
and
Expenses are calculated on a daily basis and paid on a monthly basis (accrued
at
1/365 of applicable percentage of the NAV on that day).
Exhibit
A-1
EXHIBIT
B
FORM
OF GLOBAL CERTIFICATE
Evidencing
Units Representing Limited Partner Interests
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE FUND OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED AS
IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This
is
to certify that Cede & Co. is the owner and registered holder of this
Certificate evidencing the ownership of issued and outstanding Limited Partner
Units (“Units”),
each
of which represents a fractional undivided unit of a beneficial interest in
United States Oil Fund (the “Fund”),
a
Delaware limited partnership. Capitalized terms used not defined herein have
the
meaning given to such terms in the Third Amended and Restated Limited
Partnership Agreement, as amended, supplemental or restated to the date hereof
(the “Limited
Partnership Agreement”).
At
any
given time, this Certificate shall represent the limited units of beneficial
interest in the Fund purchased by a particular authorized Participant on the
date of this Certificate. The Limited Partnership Agreement of the Fund provides
for the deposit of cash with the Fund from time to time and the issuance by
the
Fund of additional Creation Baskets representing the undivided units of
beneficial interest in the assets of the Fund. At the request of the registered
holder, this Certificate may be exchanged for one or more Certificates issued
to
the registered holder in such denominations as the registered holder may
request; provided, however, that in the aggregate, the Certificates issued
to
the registered holder hereof shall represent all Units outstanding at any given
time.
Each
authorized Participant hereby grants and conveys all of its rights, title and
interest in and to the Fund to the extent of the undivided interest represented
hereby to the registered holder of this Certificate subject to and in pursuance
of the Limited Partnership Agreement, all the terms, conditions and covenants
of
which are incorporated herein as if fully set forth at length.
The
registered holder of this Certificate is entitled at any time upon tender of
this Certificate to the Fund, endorsed in blank or accompanied by all necessary
instruments of assignment and transfer in proper form, at its principal office
in the State of California and, upon payment of any tax or other governmental
charges, to receive at the time and in the manner provided in the Limited
Partnership Agreement, such holder’s ratable portion of the assets of the Fund
for each Redemption Basket tendered and evidenced by this
Certificate.
The
holder of this Certificate, by virtue of the purchase and acceptance hereof,
assents to and shall be bound by the terms of the Limited Partnership Agreement,
copies of which are on file and available for inspection at reasonable times
during business hours at the principal business office of the General
Partner.
The
Fund
may deem and treat the person in whose name this Certificate is registered
upon
the books of the Fund as the owner hereof for all purposes and the Fund shall
not be affected by any notice to the contrary.
The
Limited Partnership Agreement and this Certificate are executed and delivered
by
Victoria Bay Asset Management, LLC as General Partner of the Fund, in the
exercise of the powers and authority conferred and vested in it by the Limited
Partnership Agreement. The representations, undertakings and agreements made
on
the part of the Fund in the Limited Partnership Agreement or this Certificate
are made and intended not as personal representations, undertakings and
agreements by the General Partner, other than acting in its capacity as such,
but are made and intended for the purpose of binding only the Fund. Nothing
in
the Limited Partnership Agreement or this Certificate shall be construed as
imposing any liability on the General Partner, individually or personally,
to
fulfill any representation, undertaking or agreement other than as provided
in
the Limited Partnership Agreement or this Certificate.
Exhibit
B-1
THE
HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF UNITED STATES OIL FUND,
LP THAT THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED IF SUCH TRANSFER WOULD (a) VIOLATE THE THEN APPLICABLE FEDERAL
OR
STATE SECURITIES LAWS OR RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL AUTHORITY
WITH JURISDICTION OVER SUCH TRANSFER, (b) TERMINATE THE EXISTENCE OR
QUALIFICATION OF UNITED STATES OIL FUND, LP UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (c) CAUSE UNITED STATES OIL FUND, LP TO BE TREATED AS AN
ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY
FOR
FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED).
VICTORIA BAY ASSET MANAGEMENT, LLC, THE GENERAL PARTNER OF UNITED STATES OIL
FUND, LP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS SECURITY
IF
IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY TO AVOID
A SIGNIFICANT RISK OF UNITED STATES OIL FUND, LP BECOMING TAXABLE AS A
CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX
PURPOSES. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT
OF
ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO THROUGH THE FACILITIES
OF
ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR ADMITTED
TO
TRADING.
This
Certificate shall not become valid or binding for any purpose until properly
executed by the General Partner.
IN
WITNESS WHEREOF, the General Partner of the Fund has caused this Certificate
to
be executed in its name by the manual or facsimile signature of one of its
Authorized Persons.
|
Victoria
Bay Asset Management, LLC,
|
||
|
as
General Partner
|
||
|
By:
|
||
|
Date:
|
||
Exhibit
B-2
EXHIBIT
C
ADDRESSES
FOR NOTICE
Victoria
Bay Asset Management, LLC
0000
Xxxxxx Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxxxx 9450
with
a
copy to
Xxxxx
Brothers Xxxxxxxx & Co.
00
Xxxxx
Xxxxxx
Xxxxxx,
XX 00000
Attention:
Manager, Fund Administration Department
Exhibit
C-1
EXHIBIT
D
APPLICATION
FOR TRANSFER OF UNITS
Transferees
of Units must execute and deliver this application to United
States Oil Fund, LP, c/o Victoria Bay Asset Management, LLC, 0000 Xxxxxx Xxx
Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000,
to be
admitted as limited partners to United States Oil Fund, LP.
The
undersigned (“Assignee”)
hereby
applies for transfer to the name of the Assignee of the Units evidenced hereby
and hereby certifies to United States Oil Fund, LP (the “Partnership”)
that
the Assignee (including to the best of Assignee’s knowledge, any person for whom
the Assignee will hold the Units) is an Eligible Holder.*
The
Assignee (a) requests admission as a Limited Partner and agrees to comply
with and be bound by, and hereby executes, the Amended and Restated Agreement
of
Limited Partnership of the Partnership, as amended, supplemented or restated
to
the date hereof (the “Partnership
Agreement”),
(b) represents and warrants that the Assignee has all right, power and
authority and, if an individual, the capacity necessary to enter into the
Partnership Agreement, (c) appoints the General Partner of the Partnership
and, if a Liquidator shall be appointed, the Liquidator of the Partnership
as
the Assignee’s attorney-in-fact to execute, swear to, acknowledge and file any
document, including, without limitation, the Partnership Agreement and any
amendment thereto and the Certificate of Limited Partnership of the Partnership
and any amendment thereto, necessary or appropriate for the Assignee’s admission
as a Substituted Limited Partner and as a party to the Partnership Agreement,
(d) gives the powers of attorney provided for in the Partnership Agreement,
and (e) makes the waivers and gives the consents and approvals contained in
the Partnership Agreement. Capitalized terms used but not defined herein have
the meanings given to such terms in the Partnership Agreement.
|
Date
|
|
||
|
Social
Security or other identifying number of
Assignee
|
Signature
of
Assignee
|
||
|
Purchase
Price including commissions, if any
|
Name
and Address of Assignee
|
||
Type
of
Entity (check one):
|
¨
Individual
|
¨
Partnership
|
¨
Corporation
|
|
¨
Trust
|
¨
Other (specify)
|
If
not an
Individual (check one):
|
¨
|
the
entity is subject to United States federal income taxation on the
income
generated by the Partnership;
|
|
¨
|
the
entity is not subject to United States federal income taxation,
but it is
a pass-through entity and all of its beneficial owners are subject
to
United States federal income taxation on the income generated by
the
Partnership;
|
|
¨
|
the
entity is not subject to United States federal income taxation
and it is
(a) not a pass-through entity or (b) a pass-through entity, but
not all of its beneficial owners are subject to United States federal
income taxation on the income generated by the Partnership. Important
Note—
by checking this box, the Assignee is contradicting its certification
that
it is an Eligible Holder.
|
——————
|
*
|
The
Term “Eligible Holder” means (a) an individual or entity subject to
United States federal income taxation on the income generated by
the
Partnership; or (b) an entity not subject to United States federal
income taxation on the income generated by the Partnership, so long
as all
of the entity’s owners are subject to United States federal income
taxation on the income generated by the Partnership. Individuals
or
entities are subject to taxation, in the context of defining an Eligible
Holder, to the extent they are taxable on the items of income and
gain
allocated by the Partnership. Schedule I hereto contains a list of
various
types of investors that are categorized and identified as either
“Eligible
Holders” or “Non-Eligible Holders.”
|
Exhibit
D-1
Nationality
(check one):
|
¨
U.S. Citizen, Resident or Domestic Entity**
|
¨
Non-resident Alien**
|
|
¨
Foreign Corporation**
|
** As
those
terms are defined in the Code.
If
the
U.S. Citizen, Resident or Domestic Entity box is checked, the following
certification must be completed.
Under
Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “Code”),
the Partnership must withhold tax with respect to certain transfers of property
if a holder of an interest in the Partnership is a foreign person. To inform
the
Partnership that no withholding is required with respect to the undersigned
interestholder’s interest in it, the undersigned hereby certifies the following
(or, if applicable, certifies the following on behalf of the
interestholder).
Complete
Either A or B:
A.
Individual Interestholder
1.
I am
not a non-resident alien for purposes of U.S. income taxation.
2.
My
U.S. taxpayer identification number (Social Security Number) is
3.
My
home address is
B.
Partnership, Corporation or Other Interestholder
1.
The
interestholder is not a foreign corporation, foreign partnership, foreign trust
or foreign estate (as those terms are defined in the Code and Treasury
Regulations).
2.
The
interestholder’s U.S. employer identification number is
3.
The
interestholder’s office address and place of incorporation (if applicable) is
The
interestholder agrees to notify the Partnership within sixty (60) days of the
date the interestholder becomes a foreign person.
The
interestholder understands that this certificate may be disclosed to the
Internal Revenue Service by the Partnership and that any false statement
contained herein could be punishable by fine, imprisonment or both.
Under
penalties of perjury, I declare that I have examined this certification and,
to
the best of my knowledge and belief, it is true, correct and complete and,
if
applicable, I further declare that I have authority to sign this document on
behalf of:
|
Name
of Interestholder
|
|
|
Signature
and Date
|
|
|
Title
(if applicable)
|
Note:
If
the Assignee is a broker, dealer, bank, trust company, clearing corporation,
other nominee holder or an agent of any of the foregoing, and is holding for
the
account of any other person, this application should be completed by an officer
thereof or, in the case of a broker or dealer, by a registered representative
who is a member of a registered national securities exchange or a member of
the
NASD, Inc., or, in the case of any other nominee holder, a person performing
a
similar function. If the Assignee is a broker, dealer, bank, trust company,
clearing corporation, other nominee owner or an agent of any of the foregoing,
the above certification as to any person for whom the Assignee will hold the
Units shall be made to the best of the Assignee’s knowledge.
Exhibit
D-2
