A-1
APPENDIX A
Xxxxxxx Xxxxx Xxxxxx Orion Futures Fund L. P.
Amended and Restated Limited Partnership Agreement
Amended and Restated as of April 1, 2001
This Amended and Restated Limited Partnership Agreement is dated as of
April 1, 2001 by and among (i) Xxxxx Xxxxxx Futures Management LLC ("SBFM" or
the "General Partner") and those other parties who shall execute this Agreement,
whether in counterpart or by attorney-in-fact, as limited partners and (ii)
those parties who have executed, whether in counterpart or by attorney-in-fact,
as limited partners, the initial Limited Partnership Agreement dated as of March
22, 1999 (the "Initial Limited Partnership Agreement") by and among such
parties, Xxxxx X. Xxxxx, (the "Initial Limited Partner"), and SFG Global
Investments, Inc. ("SFG"). (The Initial Limited Partner and such other parties
who are limited partners are hereinafter collectively referred to as the
"Limited Partners." The General Partner and the Limited Partners may be
collectively referred to herein as "Partners.")
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, on March 22, 1999 a limited partnership was formed (the
"Partnership") for the purpose of trading in commodity interests, including
futures contracts, forward contracts, physical commodities and options, directly
and through investment in other commodity pools, with SFG serving as the general
partner of the Partnership;
WHEREAS, on March 22, 1999 SFG entered into a trading manager agreement
with Xxxxx Xxxxxx Futures Management, Inc., a predecessor to SBFM ("SBFMI" or
the "Trading Manager Agreement");
WHEREAS, the parties hereto desire to continue the Partnership;
WHEREAS, in excess of a majority of the Limited Partners have by proxy
consented to the replacement of SFG as general partner by SBFM (the "Consent by
Proxy");
WHEREAS, pursuant to the Consent by Proxy the Trading Manager Agreement has
been terminated;
WHEREAS, pursuant to the Consent by Proxy and Section 17(a) of the Initial
Limited Partnership Agreement, the Initial Limited Partnership Agreement is
being amended and restated herein, and the Certificate of Limited Partnership
will be amended and restated to make appropriate corresponding changes;
NOW, THEREFORE, the parties hereto agree as follows:
1. Formation and Name.
The parties hereto hereby form a limited partnership under the New York
Revised Uniform Limited Partnership Act. The name of the limited partnership is
Xxxxxxx Xxxxx Xxxxxx Orion Futures Fund L. P. (the "Partnership") The General
Partner shall execute and file a Certificate of Limited Partnership in
accordance with the provisions of the New York Revised Limited Partnership Act
and execute, file, record and publish, as appropriate, such amendments,
restatements and other documents as are or become necessary or advisable, as
determined by the General Partner. As used herein, "Partnership Act" means the
New York Revised Uniform Limited Partnership Act.
2. Principal Office.
The principal office of the Partnership shall be 000 Xxxxxxxxx Xxxxxx - 0xx
xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other place as the General Partner may
designate from time to time.
3. Business.
(a) The Partnership's business and purpose is to trade, buy, sell or
otherwise acquire, hold or dispose of interests in commodities of all
descriptions (including futures contracts, commodity options, forward contracts
and any other rights or interests pertaining thereto, including interests in
commodity pools). The objective of the Partnership business is appreciation of
its assets through speculative trading.
(b) The Partnership shall not:
(1) engage in the pyramiding of its positions by using unrealized profits
on existing positions as margin for the purchase or sale of additional positions
in the same or related commodities;
(2) utilize borrowings except short-term borrowings if the Partnership
takes delivery of cash commodities; or
(3) permit the churning of its account.
(c) The Partnership shall make no loans. Assets of the Partnership will not
be commingled with assets of any other entity. Deposit of assets with a
commodity broker or dealer as margin shall not constitute commingling.
4. Term, Dissolution and Fiscal Year.
(a) Term. The term of the Partnership commenced on the date the Certificate
of Limited Partnership was filed with the State of New York Department of State,
and shall end as soon as practicable upon the first to occur of the following:
(1) December 31, 2019; (2) receipt by the General Partner of an election to
dissolve the Partnership at a specified time by Limited Partners owning more
than 50% of the Units of Limited Partnership Interest then outstanding, notice
of which is sent by registered mail to the General Partner not less than 90 days
prior to the effective date of such dissolution; (3) assignment by the General
Partner of all of its interest in the Partnership, withdrawal, removal,
bankruptcy or any other event that causes the General Partner to cease to be a
general partner under the Partnership Act (unless the Partnership is continued
pursuant to Paragraph 17); (4) a decline in Net Asset Value on any business day
after trading to less than $400 per Unit; or (5) any event which shall make it
unlawful for the existence of the Partnership to be continued. In addition, the
General Partner may, in its sole discretion, cause the Partnership to dissolve
if the Partnership's aggregate Net Assets decline to less than $1,000,000.
(b) Dissolution. Upon dissolution of the Partnership, the assets of the
Partnership shall be distributed to creditors, including any Partners who may be
creditors, to the extent otherwise permitted by law, in satisfaction of
liabilities of the Partnership (whether by payment or the making of reasonable
provision for payment thereof) other than liabilities for which reasonable
provision for payment has been made and liabilities for distributions to
Partners; to Partners and former Partners in satisfaction of liabilities for
distributions; and to Partners first for the return of their contributions and
second respecting their Partnership interests, in the proportions in which the
Partners share in distributions. Following distributions of the assets of the
Partnership, a Certificate of Cancellation for the Partnership shall be filed as
required by the Partnership Act.
(c) Fiscal Year. The fiscal year of the Partnership will commence on
January 1 and end on December 31 each year ("fiscal year"). Each fiscal year of
the Partnership is divided into four fiscal quarters commencing on the first day
of January, April, July and October ("fiscal quarter").
5. Net Worth of General Partner.
The General Partner shall not be obligated to maintain a Net Worth in
excess of such amount, if any, as may be required to ensure that the Partnership
will continue to be treated as a partnership for federal income tax purposes.
For the purposes of this Paragraph 5, Net Worth shall be based upon current fair
market value of the assets of the General Partner.
6. Capital Contributions and Units of Partnership Interest.
The General Partner shall not be obligated to contribute capital to the
Partnership unless required to ensure that the Partnership will continue to be
treated as a partnership for federal income tax purposes. The General Partner's
contribution shall be evidenced by "Units of General Partnership Interest."
Interests in the Partnership, other than those of the General Partner,
shall be evidenced by "Units of Limited Partnership Interest" which the General
Partner on behalf of the Partnership shall, in accordance with the Private
Placement Offering Memorandum and Disclosure Document (the "Memorandum")
referred to in Paragraph 11, sell to persons desiring to become Limited
Partners. For each Unit of Limited Partnership Interest purchased prior to the
commencement of trading operations, a Limited Partner shall contribute $1,000 to
the capital of the Partnership. For any Unit (or partial Unit rounded to four
decimal places) of Limited Partnership Interest purchased thereafter, a Limited
Partner shall contribute to the capital of the Partnership an amount equal to
the Net Asset Value of a Unit (or partial Unit, as the case may be) of Limited
Partnership Interest as of the close of business on the day preceding the
effective date of such purchase, and shall pay in addition the selling
commission, if any, which must be paid with respect to such purchase. The
aggregate of all contributions shall be available to the Partnership to carry on
its business, and no interest shall be paid on any such contribution. All
subscriptions for Units of Limited Partnership Interest made pursuant to this
private placement of the Units of Limited Partnership Interest (the "Private
Placement") must be on the form provided in the Memorandum.
The proceeds from the sale of the Units of Limited Partnership Interest
pursuant to the Private Placement shall be placed in an escrow account and shall
not be contributed to the capital of the Partnership prior to the termination of
the initial offering period. If subscriptions for at least 10,000 Units of
Limited Partnership Interest shall not have been received and accepted by the
General Partner when the initial offering period is terminated, the full amount
of all subscriptions shall be returned promptly to the subscribers, and the
Certificate of Limited Partnership may, in the discretion of the General
Partner, be canceled. If subscriptions for at least 10,000 Units of Limited
Partnership Interest shall have been received and accepted by the General
Partner prior to the termination of the initial offering period, the proceeds
thereof shall be contributed to the capital of the Partnership and the
Partnership shall thereafter commence trading operations. All subscribers shall
receive the interest earned on their subscriptions while held in escrow. All
subscribers who have been accepted by the General Partner shall be deemed
admitted as Limited Partners at the time they are reflected as such in the books
and records of the Partnership.
7. Allocation of Profits and Losses.
(a) Capital Accounts. A capital account shall be established for each
Partner. The initial balance of each Partner's capital account shall be the
amount of his initial capital contribution to the Partnership.
(b) Allocations. As of the close of business on the last day of each month
during each fiscal year of the Partnership, the following determinations and
allocations shall be made:
(1) The Net Assets of the Partnership (as defined in Paragraph 7(d)(1))
before any incentive fees payable by the Partnership as of such date shall be
determined.
(2) Monthly management fees, if any, payable by the Partnership as of such
date shall then be charged against Net Assets.
(3) Incentive fees, if any, shall then be charged against Net Assets.
(4) Any increase or decrease in Net Assets as of the end of the month
(after the adjustments in subparagraphs (2) and (3) above) shall then be
credited or charged to the capital accounts of each Partner in the ratio that
the balance of each account bears to the balance of all accounts.
(5) Any amount paid to a Limited Partner on redemption of Units of Limited
Partnership Interest, and any amount paid to the General Partner on redemption
of Units of General Partnership Interest, shall be charged to that Partner's
capital account.
(c) Allocation of Profit and Loss for Federal Income Tax Purposes. The
Partnership's realized capital gain or loss and ordinary income or loss shall be
allocated among the Partners in the ratio that each Partner's capital account
bears to all Partners' capital accounts. Any Partner who acquires or redeems
Units of Limited or General Partnership Interest during any fiscal year will be
allocated his proportionate share of the capital gain or loss and ordinary
income or loss realized by the Partnership during the period that such Units of
Limited or General Partnership Interest were owned by such Partner, based on the
ratio that the capital accounts allocable to such acquired or redeemed Units of
Limited or General Partnership Interest bear to the capital accounts allocable
to all Partners' Units of Limited or General Partnership Interest for such
period. Any Partner who transfers or assigns Units of Limited or General
Partnership Interest during any fiscal year shall be allocated his proportionate
share of the capital gain or loss and ordinary income or loss realized by the
Partnership through the end of the month in which notice of such transfer or
assignment is given to the General Partner in accordance with Paragraph 10(b)
hereof, and the transferee or assignee of such Units shall be allocated his
proportionate share of the capital gain or loss and ordinary income or loss
realized by the Partnership commencing with the month next succeeding the month
in which notice of transfer or assignment is given. The method of allocating
gains and losses for tax purposes may be changed by the General Partner upon
receipt of advice from counsel to the Partnership that such change is required
by applicable law or regulation.
(d) Definitions.
(1) Net Assets. Net Assets of the Partnership shall mean the total assets
of the Partnership, including all cash, accrued interest and the market value of
all open commodity positions maintained by the Partnership less brokerage
charges accrued and less all other liabilities of the Partnership determined in
accordance with generally accepted accounting principles under the accrual basis
of accounting. The value of a commodity futures or option contract is the
unrealized gain or loss on the contract that is determined by marking it to the
current settlement price for a like contract acquired on the valuation date.
Physical commodities, options, forward contracts and futures contracts, when no
market quote is available, will be valued at their fair market value as
determined in good faith by the General Partner. U.S. Treasury securities and
other interest bearing obligations will be valued at cost plus accrued interest.
Interests in other commodity pools will be valued at their net asset value as
determined by the pool operator, or, if the General Partner has not received
such determination or believes that fairness so requires, at fair value
determined by the General Partner. Net Assets equals Net Asset Value.
(2) Net Asset Value per Unit. The Net Asset Value of each Unit of Limited
Partnership Interest and each Unit of General Partnership Interest shall be
determined by dividing the Net Assets of the Partnership by the aggregate number
of Units of Limited and General Partnership Interest outstanding.
(e) Expenses and Limitation Thereof. The Partnership's organizational
expenses and the expenses of the initial private offering of the Units of
Limited Partnership Interest described in Paragraph 11 hereof, as well as the
General Partner's start-up fee described in Paragraph 8 hereof, initially shall
be advanced by Xxxxxxx Xxxxx Xxxxxx Inc. ("SSB") and reimbursed as discussed in
the Memorandum. Subject to the limitations set forth below in this Paragraph
7(e), the Partnership shall be obligated to pay all liabilities incurred by it,
including, without limitation, all expenses incurred in connection with its
trading activities, and any management and incentive fees. The General Partner
shall bear all other operating expenses except legal, accounting, filing, data
processing and reporting fees and extraordinary expenses. Appropriate reserves
may be created, accrued and charged against Net Assets for contingent
liabilities, if any, as of the date any such contingent liability becomes known
to the General Partner.
(f) Limited Liability of Limited Partners.
(1) Each Unit of Limited Partnership Interest, when purchased by a Limited
Partner, subject to the qualifications set forth below, shall be fully paid and
non-assessable.
(2) A Limited Partner will have no liability in excess of his obligation to
make contributions to the capital of the Partnership and his share of the
Partnership's assets and undistributed profits, subject to the qualifications
provided in the Partnership Act.
(g) Return of Limited Partner's Capital Contribution. Except to the extent
that a Limited Partner shall have the right to withdraw capital through
redemption of Units of Limited Partnership Interest, no Limited Partner shall
have any right to demand the return of his capital contribution or any profits
added thereto, except upon dissolution and termination of the Partnership. In no
event shall a Limited Partner be entitled to demand and receive property other
than cash.
8. Management of the Partnership.
(a) General. The General Partner, to the exclusion of all Limited Partners,
shall conduct, control and manage the business of the Partnership, including,
without limitation, the investment of the funds of the Partnership. The General
Partner may, but is not obliged to, delegate its rights, duties and powers
hereunder, including but not limited to (i) the power to select trading advisors
and allocate assets among them; and (ii) the duty to make trading decisions for
the Partnership. Except as provided herein, no Partner shall be entitled to any
salary, draw or other compensation from the Partnership. Each Limited Partner
hereby undertakes to advise the General Partner of such additional information
as may be deemed by the General Partner to be required or appropriate to open
and maintain an account or accounts with commodity brokerage firms for the
purpose of trading in commodity futures contracts.
The Partnership shall pay the General Partner a monthly fee equal to 1/24
of 1% (0.5% per year) of month-end Net Assets.
Subject to Paragraph 5 hereof, the General Partner may engage in other
business activities and shall not be required to refrain from any other activity
nor disgorge any profits from any such activity, whether as general partner of
additional partnerships for investment in commodity futures contracts or
otherwise. The General Partner may engage and compensate on behalf of the
Partnership from funds of the Partnership, such persons, firms or corporations,
including any affiliated person or entity, as the General Partner in its sole
judgment, shall deem advisable for the conduct and operation of the business of
the Partnership.
No person dealing with the General Partner shall be required to determine
its authority to make any undertaking on behalf of the Partnership, nor to
determine any fact or circumstance bearing upon the existence of its authority.
The General Partner shall monitor the trading and performance of any
trading advisor for the Partnership and shall not permit the "churning" of the
Partnership's account. The General Partner is authorized to enter into the
Customer Agreement with SSB described in the Memorandum and to cause the
Partnership to pay SSB the brokerage fees described therein and to negotiate
Customer Agreements in the future on these or other terms. The General Partner
may take such other actions as it deems necessary or desirable to manage the
business of the Partnership, including, but not limited to, the following:
opening bank accounts with state or national banks; paying, or authorizing the
payment of expenses of the Partnership, such as management and incentive fees,
legal and accounting fees, printing and reporting fees, and registration and
other fees of governmental agencies; and investing or directing the investment
of funds of the Partnership not being utilized as margin deposits.
The General Partner shall maintain a list of the names and addresses of,
and interests owned by, all Partners, a copy of which shall be furnished to
Limited Partners upon request either in person or by mail and upon payment of
the cost of reproduction and mailing for a purpose reasonably related to such
Limited Partner's interest as a limited partner in the Partnership, and such
other books and records relating to the business of the Partnership as it deems
necessary or advisable at the principal office of the Partnership. The General
Partner shall retain such records for a period of not less than six years. The
Limited Partners, shall be given reasonable access to the books and records of
the Partnership for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership.
Generally, except as provided herein and in the Memorandum, the Partnership
shall not enter into any contract with any of its affiliates or with any trading
advisor which has a term of more than one year. Except as provided herein and in
the Memorandum: (1) no person may receive, directly or indirectly, any advisory
or incentive fee for investment advice or management who shares or participates
in commodity brokerage commissions or fees from transactions for the
Partnership; (2) no broker may pay, directly or indirectly, rebates or give ups
to any trading advisor; and (3) such prohibitions shall not be circumvented by
any reciprocal business arrangements. On loans made available to the Partnership
by the General Partner or any of its affiliates, the lender may not receive
interest in excess of its interest costs, nor may the lender receive interest in
excess of the amounts which would be charged the Partnership (without reference
to the lender's financial abilities or guarantees) by unrelated banks on
comparable loans for the same purpose and the lender shall not receive points or
other financing charges or fees regardless of the amounts.
9. Audits and Reports to Limited Partners.
The Partnership books and records shall be audited annually by independent
accountants. The Partnership will cause each Partner to receive (i) within 90
days after the close of each fiscal year, audited financial statements,
including a balance sheet and statements of income and partners' equity for the
fiscal year then ended, and (ii) within 75 days after the close of each fiscal
year such tax information as is necessary for him to complete his federal income
tax return. In addition, within 30 days of the end of each month the Partnership
will provide each Limited Partner with reports showing Net Assets and Net Asset
Value per Unit of Limited and General Partnership Interest as of the end of such
month, as well as information relating to the fees and other expenses incurred
by the Partnership during such month. Both annual and monthly reports shall
include such additional information as the Commodity Futures Trading Commission
may require under the Commodity Exchange Act to be given to participants in
commodity pools such as the Partnership. The General Partner shall calculate the
Net Asset Value per Unit of Partnership Interest daily and shall make such
information available upon the request of a Limited Partner for a purpose
reasonably related to such Limited Partner's interest as a Limited Partner in
the Partnership.
In addition, if any of the following events occur, notice of such event
shall be mailed to each Limited Partner within seven business days of the
occurrence of the event: (i) a decrease in the Net Asset Value of a Unit of
Limited Partnership Interest to $400 or less as of the end of any trading day;
(ii) any change in trading advisors; (iii) any change in the General Partner;
(iv) any change in commodity brokers; or (v) any material change in the
Partnership's trading policies or in an advisor's trading strategies.
10. Transfer and Redemption of Units.
(a) Initial Limited Partner. As of the day after trading commenced, the
Initial Limited Partner was free to redeem his Unit for $1,000 and withdraw from
the Partnership.
(b) Transfer. Each Limited Partner expressly agrees that he will not
assign, transfer or dispose of, by gift or otherwise, any of his Units of
Limited Partnership Interest or any part or all of his right, title and interest
in the capital or profits of the Partnership without the consent of the General
Partner except (i) in the case of an individual Limited Partner, disposition of
Units by last will and testament or by virtue of the laws of descent and
distribution and (ii) in the case of a Limited Partner that is not an
individual, disposition of Units upon liquidation, dissolution or other
termination of the entity that is a Limited Partner. No transfer or assignment
shall be permitted unless the General Partner is satisfied that (i) such
transfer or assignment would not violate the Securities Act of 1933 or any state
securities law and (ii) notwithstanding such transfer or assignment, the
Partnership will continue to be classified as a Partnership under the Internal
Revenue Code. No assignment, transfer or disposition permitted by this Agreement
shall be effective against the Partnership or the General Partner until the
first day of the quarter next succeeding the quarter in which the General
Partner gives its consent, except as otherwise provided in this sub-paragraph
10(b). Any assignment, transfer or disposition by an assignee of Units of
Limited Partnership Interest of his interest in the capital or profits of the
Partnership shall not be effective against the Partnership or the General
Partner until the first day of the quarter next succeeding the quarter in which
the General Partner gives its consent. If an assignment, transfer or disposition
occurs by reason of the death or by termination of a Limited Partner or
assignee, written notice must be given to the General Partner by the duly
authorized representative of the estate of the Limited Partner or assignee and
shall be supported by such proof of legal authority and valid assignment as may
reasonably be requested by the General Partner. Any such assignee shall become a
substituted Limited Partner only upon the consent of the General Partner (which
consent may be withheld at its sole and absolute discretion), upon the execution
of a Power of Attorney by such assignee appointing the General Partner as his
attorney-in-fact in the form contained in Paragraph 13 hereof. The estate or any
beneficiary of a deceased Limited Partner or assignee shall have no right to
withdraw any capital or profits from the Partnership except by redemption of
Units of Limited Partnership Interest. A substituted Limited Partner shall have
all the rights and powers and shall be subject to all the restrictions and
liabilities of a limited partner of the Partnership. A substituted Limited
Partner is also liable for the obligations of his assignor to make contributions
to the Partnership, but shall not be liable for the obligations of his assignor
under the Partnership Act to return distributions received by the assignor;
provided, however, that a substituted Limited Partner shall not be obligated for
liabilities unknown to him at the time he became a substituted Limited Partner
and which could not be ascertained from this Agreement. Each Limited Partner
agrees that with the consent of the General Partner any assignee may become a
substituted Limited Partner without the approval of any Limited Partner. If the
General Partner withholds consent, an assignee shall not become a substituted
Limited Partner and shall not have any of the rights of a Limited Partner except
that the assignee shall be entitled to receive that share of capital or profits
and shall have that right of redemption to which his assignor would otherwise
have been entitled. An assigning Limited Partner shall remain liable to the
Partnership as provided in the Partnership Act, regardless of whether his
assignee becomes a substituted Limited Partner. The transfer of Units of Limited
Partnership Interest shall be subject to all applicable securities laws. The
transferor or assignor shall bear the cost related to such transfer or
assignment. Certificates representing Units of Limited Partnership Interest may
bear appropriate legends to the foregoing effect.
(c) Redemption. Beginning with the first full month ending at least six
months after trading commences, a Limited Partner (or any assignee thereof) may
withdraw all or part of his capital contribution and undistributed profits, if
any, from the Partnership in multiples of the Net Asset Value of a Unit of
Limited Partnership Interest (such withdrawal being herein referred to as
"redemption") as of the last day of a month (the "Redemption Date") after a
request for redemption has been made to the General Partner; provided that all
liabilities, contingent or otherwise, of the Partnership, except any liability
to Partners on account of their capital contributions, have been paid or there
remains property of the Partnership sufficient to pay them. As used herein,
"request for redemption" shall mean a letter or oral request in a form specified
by the General Partner and received by the General Partner at least ten days in
advance of the Redemption Date. The General Partner, in its discretion, may
waive the fifteen day notice requirement. A form of Request for Redemption is
included in the Memorandum referred to in Paragraph 11. Additional forms of
Request for Redemption may be obtained by written request to the General Partner
or the Trading Manager. Redemption of partial Units will be permitted at the
General Partner's discretion. No redemption of less than all of a Limited
Partner's Units will be permitted if, after giving effect to such redemption,
the Limited Partner would own fewer than three (3) Units. The General Partner
may waive the three (3) Unit minimum ownership requirement in its sole
discretion. Upon redemption, a Limited Partner (or any assignee thereof) shall
receive, per Unit of Limited Partnership Interest redeemed, an amount equal to
the Net Asset Value of a Unit of Limited Partnership Interest as of the
Redemption Date, less any amount owing by such Partner (and his assignee, if
any) to the Partnership. If redemption is requested by an assignee, all amounts
owed by the Partner to whom such Unit of Limited Partnership Interest was sold
by the Partnership as well as all amounts owed by all assignees of such Unit of
Limited Partnership Interest shall be deducted from the Net Asset Value of such
Unit of Limited Partnership Interest upon redemption by any assignee. Payment
will be made within 10 business days after the Redemption Date. The General
Partner may temporarily suspend redemptions if necessary in order to liquidate
commodity positions in an orderly manner and may permit less frequent
redemptions if it has received an opinion from counsel that such action is
advisable to prevent the Partnership from being considered a publicly traded
partnership by the Internal Revenue Service.
The General Partner may, at its sole discretion and upon notice to the
Limited Partners, declare a special Redemption Date on which date Limited
Partners may redeem their Units at Net Asset Value per Unit, provided that the
Limited Partners submit requests for redemption in a form acceptable to the
General Partner .
The General Partner may require that any Limited Partner redeem his Units
on 10 days' notice to the Limited Partner if, in the sole discretion of the
General Partner, it is in the best interests of the Partnership to require such
redemption.
11. Private Placement of Units of Limited Partnership Interest.
The General Partner on behalf of the Partnership shall (i) cause to be
filed a Private Placement Offering Memorandum and Disclosure Document, and such
amendments thereto as the General Partner deems advisable, with the United
States Commodity Futures Trading Commission for private placement of the Units
of Limited Partnership Interest, and (ii) qualify the Units of Limited
Partnership Interest for sale under the securities laws of such States of the
United States as the General Partner shall deem advisable. The General Partner
may make such other arrangements for the sale of the Units of Limited
Partnership Interest as it deems appropriate including, without limitation, the
execution on behalf of the Partnership of an agency agreement with SSB as an
agent of the Partnership for the offer and sale of the Units as contemplated in
the Memorandum.
12. Admission of Additional Partners.
After the Private Placement of the Units of Limited Partnership Interest
has been terminated by the General Partner, no additional General Partner will
be admitted to the Partnership except as described in Paragraph 17(c). The
General Partner may take such actions as may be necessary or appropriate at any
time to offer new Units or partial Units and to admit new or substituted Limited
Partners to the Partnership. All subscribers who have been accepted by the
General Partner shall be deemed admitted as Limited Partners at the time they
are reflected as such in the books and records of the Partnership.
13. Special Power of Attorney.
Each Limited Partner does irrevocably constitute and appoint the General
Partner, and each other person or entity that shall after the date of this
Agreement become a general partner of the Partnership, with the power of
substitution, as his true and lawful attorney-in-fact, in his name, place and
xxxxx, to execute, acknowledge, swear to, file and record in his behalf in the
appropriate public offices and publish (i) this Agreement and a Certificate of
Limited Partnership, including amendments and/or restatements thereto; (ii) all
instruments which the General Partner deems necessary or appropriate to reflect
any amendment, change or modification of the Partnership in accordance with the
terms of this Agreement, including any instruments necessary to dissolve the
Partnership; (iii) Certificates of Assumed Name; and (iv) Customer Agreements
with SSB or other commodity brokerage firms. The Power of Attorney granted
herein shall be irrevocable and deemed to be a power coupled with an interest
and shall survive and not be affected by the subsequent incapacity, disability
or death of a Limited Partner. Each Limited Partner xxxxxx agrees to be bound by
any representation made by the General Partner and by any successor thereto,
acting in good faith pursuant to such Power of Attorney and each Limited Partner
hereby waives any and all defenses which may be available to contest, negate or
disaffirm the action of the General Partner and any successor thereto, taken in
good faith under such Power of Attorney. In the event of any conflict between
this Agreement and any instruments filed by such attorney pursuant to the Power
of Attorney granted in this Paragraph, this Agreement shall control.
14. Withdrawal of a Partner.
The Partnership shall be dissolved and its affairs wound up upon the
assignment by the General Partner of all of its interest in the Partnership,
withdrawal, removal, bankruptcy, or any other event that causes the General
Partner to cease to be a general partner under the Partnership Act (unless the
Partnership is continued pursuant to Paragraph 17). The General Partner shall
not withdraw from the Partnership without giving the Limited Partners ninety
(90) days' prior written notice. The death, incompetency, withdrawal, insolvency
or dissolution of a Limited Partner shall not (in and of itself) dissolve the
Partnership, and such Limited Partner, his estate, custodian or personal
representative shall have no right to withdraw or value such Limited Partner's
interest in the Partnership except as provided in Paragraph 10 hereof. Each
Limited Partner (and any assignee of such Partner's interest) expressly agrees
that, in the event of his death, he waives on behalf of himself and his estate,
and he directs the legal representative of his estate and any person interested
therein to waive, the furnishing of any inventory, accounting, or appraisal of
the assets of the Partnership and any right to an audit or examination of the
books of the Partnership; provided, however, that this waiver in no way limits
the rights of the Limited Partners or their representatives to have access to
the Partnership's books and records as described in Paragraph 8 hereof.
15. No Personal Liability for Return of Capital.
The General Partner, subject to Paragraph 16 hereof, shall not be
personally liable for the return or repayment of all or any portion of the
capital or profits of any Partner (or assignee), it being expressly agreed that
any such return of capital or profits made pursuant to this Agreement shall be
made solely from the assets (which shall not include any right of contribution
from the General Partner) of the Partnership.
16. Indemnification.
(a) The General Partner and its Affiliates shall have no liability to the
Partnership or to any Partner for any loss suffered by the Partnership which
arises out of any action or inaction of the General Partner or its Affiliates if
the General Partner or its Affiliates in good faith determined that such course
of conduct was in the best interest of the Partnership and such course of
conduct did not constitute negligence or misconduct of the General Partner or
its Affiliates. To the fullest extent permitted by law, the General Partner and
its Affiliates shall be indemnified by the Partnership against any losses,
judgments, liabilities, expenses and amounts paid in settlement of any claims
sustained by them in connection with the Partnership, provided that the same
were not the result of negligence or misconduct on the part of the General
Partner or its Affiliates.
(b) Notwithstanding (a) above, the General Partner and its Affiliates shall
not be indemnified for any losses, liabilities or expenses arising from or out
of an alleged violation of federal or state securities laws in connection with
the offer or sale of Units.
(c) The Partnership shall not incur the cost of that portion of any
insurance which insures any party against any liability the indemnification of
which is herein prohibited.
(d) For purposes of this Paragraph 16, the term "Affiliates" shall mean any
person performing services on behalf of the Partnership and acting within the
scope of the General Partner's authority as set forth in this Agreement who: (1)
directly or indirectly controls, is controlled by, or is under common control
with the General Partner; or (2) owns or controls 10% or more of the outstanding
voting securities of the General Partner; or (3) is an officer or director of
the General Partner.
(e) The provision of advances from Partnership funds to the General Partner
and its Affiliates for legal expenses and other costs incurred as a result of
any legal action initiated against the General Partner by a Limited Partner of
the Partnership is prohibited.
(f) Any indemnification under subparagraph (a) above, unless ordered by a
court, shall be made by the Partnership only as authorized in the specific case
and only upon a determination by independent legal counsel in a written opinion
that indemnification of the General Partner or its Affiliates is proper in the
circumstances because it has met the applicable standard of conduct set forth in
subparagraph (a) above.
17. Amendments; Meetings.
(a) Amendments with Consent of the General Partner. If at any time during
the term of the Partnership the General Partner shall deem it necessary or
desirable to amend this Agreement (including the Partnership's basic investment
policies set forth in paragraph 3(b) hereof), such amendment shall be effective
only if approved in writing by the General Partner and, except as specified in
this sub-section (a), by Limited Partners owning more than 50% of the Units of
Limited Partnership Interest then outstanding and if made in accordance with the
Partnership Act. Any such supplemental or amendatory agreement shall be adhered
to and have the same effect from and after its effective date as if the same had
originally been embodied in and formed a part of this Agreement.
The General Partner may amend this Limited Partnership Agreement without
the consent of the Limited Partners in order (i) to clarify any clerical
inaccuracy or ambiguity or reconcile any inconsistency (including any
inconsistency between this Limited Partnership Agreement and the Memorandum);
(ii) to delete or add any provision of or to the Limited Partnership Agreement
required to be deleted or added by the staff of any federal or state agency; or
(iii) to make any amendment to the Limited Partnership Agreement which the
General Partner deems advisable (including but not limited to amendments
necessary to effect the allocations proposed herein) provided that such
amendment is not adverse to the Limited Partners, or is required by law.
The General Partner may, however, change the trading policies in paragraph
3(b) of this Agreement without the approval of the Limited Partners when such
change is deemed to be in the best interests of the Partnership. In addition, if
the General Partner determines to offer Units to the public in the future, the
General Partner may amend this Agreement as necessary to effect such public
offering without obtaining the consent of the Limited Partners, provided,
however, that such amendments are deemed to be in the best interests of the
Limited Partners. Amendments that are consistent with the North American
Securities Administrators Association's Guidelines for the Registration of
Commodity Pools will be presumed to be in the best interests of the Limited
Partners.
(b) Meetings. Upon receipt of a written request, signed by Limited Partners
owning at least 10% of the Units of Limited Partnership Interest then
outstanding, that a meeting of the Partnership be called to vote upon any matter
which the Limited Partners may vote upon pursuant to this Agreement, the General
Partner shall, by written notice to each Limited Partner of record mailed within
fifteen (15) days after receipt of such request, call a meeting of the
Partnership. Such meeting shall be held at least thirty (30) but not more than
sixty (60) days after the mailing of such notice, and such notice shall specify
the date, a reasonable place and time, and the purpose of such meeting.
(c) Amendments and Actions without Consent of the General Partner. At any
meeting called pursuant to Paragraph 17(b), upon the approval by an affirmative
vote (which may be in person or by proxy) of Limited Partners owning more than
50% of the outstanding Units of Limited Partnership Interest, the following
actions may be taken: (i) this Agreement may be amended in accordance with and
only to the extent permissible under the Partnership Act; (ii) the Partnership
may be dissolved; (iii) the General Partner may be removed and a new general
partner may be admitted immediately prior to the removal of the General Partner
provided that the new general partner of the Partnership shall continue the
business of the Partnership without dissolution; (iv) if the General Partner
elects to withdraw from the Partnership, a new general partner or general
partners may be admitted immediately prior to the withdrawal of the General
Partner provided that the new general partner of the Partnership shall continue
the business of the Partnership without dissolution; (v) any contracts with the
General Partner, any of its Affiliates or any commodity trading advisor to the
Partnership may be terminated on sixty days' notice without penalty; and (vi)
the sale of all of the assets of the Partnership may be approved; provided,
however, that no such action may be taken unless the Partnership has been
furnished with an opinion of counsel that the action to be taken will not
adversely affect the liability of the Limited Partners and that the action is
permitted by the Partnership Act.
(d) Continuation. Upon the assignment by the General Partner of all of its
interest in the Partnership, the withdrawal, removal, bankruptcy or any other
event that causes the General Partner to cease to be a general partner under the
Partnership Act, the Partnership is not dissolved and is not required to be
wound up by reason of such event if, (i) there is a remaining general partner
who continues the business of the Partnership or (ii) within ninety (90) days
after such event, all remaining Partners agree in writing to continue the
business of the Partnership and to the appointment, effective as of the date of
such event, of a successor General Partner.
18. Governing Law.
The validity and construction of this Agreement shall be determined and
governed by the laws of the State of New York.
19. Miscellaneous.
(a) Priority among Limited Partners. No Limited Partner shall be entitled
to any priority or preference over any other Limited Partner with regard to the
return of contributions of capital or to the distribution of any profits or
otherwise in the affairs of the Partnership.
(b) Notices. All notices under this Agreement, other than reports by the
General Partner to the Limited Partners, shall be in writing and shall be
effective upon personal delivery, or, if sent by registered or certified mail,
postage prepaid, addressed to the last known address of the party to whom such
notice is to be given, upon the deposit of such notice in the United States
mail. Reports by the General Partner to the Limited Partners shall be in writing
and shall be sent by first class mail to the last known address of each Limited
Partner.
(c) Binding Effect. This Agreement shall inure to and be binding upon all
of the parties, their successors, permitted assigns, custodians, estates, heirs
and personal representatives. For purposes of determining the rights of any
Partner or assignee hereunder, the Partnership and the General Partner may rely
upon the Partnership records as to who are Partners and assignees and all
Partners and assignees agree that their rights shall be determined and that they
shall be bound thereby, including all rights which they may have under Paragraph
17 hereof.
(d) Captions. Captions in no way define, limit, extend or describe the
scope of this Agreement nor the effect of any of its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day first mentioned above.
General Partner:
Xxxxx Xxxxxx Futures Management LLC
By: /s/ Xxxxx X. Xxxxx
----------------
Name: Xxxxx X. Xxxxx
Title: President
Limited Partners:
All Limited Partners now and hereafter admitted as limited partners of the
Partnership pursuant to powers of attorney now and hereafter executed in favor
of and delivered to the General Partner.
By: XXXXX XXXXXX FUTURES MANAGEMENT LLC
ATTORNEY-IN-FACT
By: /s/ Xxxxx X. Xxxxx
---------------------
Name: Xxxxx X. Xxxxx
Title: President
