NEW YORK OIL ETF, LP
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
This First Amended and Restated Agreement of Limited Partnership (this
"Agreement"), executed on _____________, 2005, is entered into by and among
Victoria Bay Asset Management, LLC, a Delaware limited liability company, as
General Partner, Xxxxxxxxxx Holdings, Inc., a Delaware corporation, as the
Organizational Limited Partner, and the [name of initial limited partner], as a
Limited Partner, together with any Persons who shall hereafter be admitted as
Partners in accordance with this Agreement.
NOW THEREFORE, in consideration of the mutual promises and agreements
herein made and intending to be legally bound, the Partners hereby agree 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 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 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 Section 11.4 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 Record Holder that has not been admitted to the
Partnership as a Substituted Limited Partner.
1.6 "Agreement" shall mean this Agreement of Limited Partnership, as
originally executed and as amended, modified, supplemented or restated from time
to time, as the context requires.
1.7 "Business Day" shall mean Monday through Friday of each week, except
that a legal holiday recognized as such by the government of the United States
shall not be regarded as a Business Day.
1.8 "Beneficial Owner" shall mean the beneficial owner of Units held by a
nominee in any case in which the nominee has furnished the identity of such
owner to the Partnership in accordance with Section 6031(c) of the Code or any
other method acceptable to the General Partner in its sole discretion.
1.9 "Capital Account" shall mean, an account established on the books and
records of the Partnership for each Partner as set forth in Section 4.1.
1.10 "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).
1.11 "Capital Transaction" shall mean a sale of all or substantially all
of the assets of the Partnership not in the ordinary course of business.
1.12 "Certificate" shall mean a certificate, substantially in the form of
Exhibit C to this Agreement or in such other forms as may be adopted by the
General Partner in its sole discretion, issued by the Partnership evidencing
ownership of one or more Units.
1.13 "Close of Business" shall mean 5:00 PM (New York City time).
1.14 "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.
1.15 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.16 "Departing Partner" shall mean a former General Partner, from and
after the effective date of any withdrawal or removal of such former General
Partner.
1.17 "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 investment 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.
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1.18 "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.
1.19 "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 Section 11 or an assignee of an Interest 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.
1.20 "Management Fee" shall mean the management fee paid to the General
Partner pursuant to Section 3.1.2.
1.21 "Net Asset Value" shall mean the excess of the current market value
of the Partnership's total assets over its liabilities as reasonably determined
by the General Partner or its designee.
1.22 "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.
1.23 "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.
1.24 "Outstanding" shall mean, with respect to the Units or other
partnership securities, as the case may be, all Units or other partnership
securities of that are issued by the Partnership and reflected as outstanding on
the Partnership's books and records as of the date of determination.
1.25 "Partner" shall mean the General Partner or any Limited Partner.
"Partners" shall mean the General Partner and all Limited Partners (unless
otherwise indicated).
1.26 "Partnership" shall mean the limited partnership hereby formed, as
such limited partnership may from time to time be constituted.
1.27 "Person" shall mean any natural person, partnership, limited
partnership, trust, estate, corporation, association, custodian, nominee or any
other individual or entity in its own or any representative capacity.
1.28 "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, over
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(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 Profits or Losses allocated to a Redeeming
Partner pursuant to Section 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.
1.29 "Prospectus" shall mean the New York Oil ETF, LP Prospectus, dated
_______, 2005, as the same may have been amended or supplemented, used in
connection with the offer and sale of Interests.
1.30 "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 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.
1.31 "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.
1.32 "Redeemable Units" shall mean any Units for which a redemption notice
has been given, and has not been withdrawn.
1.33 "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
1.34 "Revolving Credit Facility" shall mean a revolving credit facility
which 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.
1.35 "Substituted Limited Partner" shall mean a Person who is admitted as
a Limited Partner to the Partnership pursuant to Section 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.
1.36 "Tax Certificate" shall mean an Internal Revenue Service Form W-9 (or
the substantial equivalent thereof) in the case of Limited Partner that is a
U.S. person or a
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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.
1.37 "Tax Matters Partner" shall mean the General Partner as set forth in
Section 5.6.
1.38 "Transfer Agent" shall mean [NAME OF TRANSFER AGENT TO BE INSERTED
BEFORE EFFECTIVENESS] 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.
1.39 "Transfer Application" shall mean an application and agreement for
transfer of Units in the form set forth on the back of a Unit Certificate or in
a form substantially to the same effect in a separate instrument.
1.40 "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.
1.41 "Valuation Date" shall mean the last Business Day of any Accounting
Period.
1.42 "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 The General Partner and the Organizational Limited Partner have
previously formed the Partnership as a limited partnership pursuant to the Act
and hereby amend and restate the original Agreement of Limited Partnership of
the Partnership in its entirety. This amendment and restatement 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 New York Oil ETF, 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, XX 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 2711 Xxxxxxxxxxx
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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 deem advisable.
2.4 The investment objective of the Partnership is for the net asset value
of the Units issued by the Partnership to reflect the performance of the price
of light, sweet crude oil, less the Partnership's expenses. To meet this
objective, the Partnership will invest in futures contracts for light, sweet
crude oil that are traded on the New York Mercantile Exchange, futures contracts
for crude oil and other oil interests traded on other U.S. and foreign
exchanges, and other oil interests such as options on oil futures contracts,
forward contracts for oil and other over the counter contracts related to the
foregoing, and will also invest in obligations of the United States government,
cash, cash-equivalents, or other investments deemed appropriate by the General
Partner.
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 Article
13.
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. A copy of this Agreement may be filed as
the Certificate of Limited Partnership of the Partnership. 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 and by seven directors, four
of whom may also be executive officers of the General Partner. The General
Partner shall establish and maintain an 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, and maintains its principal business office at 0000 Xxxxxx Xxx
Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
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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.
The Management Fee shall be payable monthly in advance, determined as of the
beginning of Close of Business as of the last Business Day of the preceding
month and due and payable on the first Business Day of such month. 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 extraordinary expenses (i.e. expenses not in the ordinary course of
business, including 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, was admitted as the General Partner of the Partnership and later
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, was admitted as a Limited Partner of the
Partnership and later made an initial capital contribution to the Partnership in
the amount of $980.00. As of the date hereof, the interest of the Organizational
Limited Partner shall be redeemed, the initial capital contribution of the
Organizational Limited Partner shall be refunded, and the Organizational Limited
Partner shall thereupon withdraw and cease to be a Limited Partner. Ninety-eight
percent (98%) of any interest or other profit that may have resulted from the
investment or other use of such initial capital contributions shall be allocated
and distributed to the Organizational Limited Partner, and the balance thereof
shall be 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 and on the initial offering
price specified in Section 3.2. The General Partner may but shall not be
required to make any Capital Contributions to the Partnership on or after the
date hereof. If the General Partner does make any Capital Contributions to the
Partnership on or after the date hereof, it shall be issued an appropriate
number of Units based on the Net Asset Value per Unit as of the date of
issuance.
3.1.4 The General Partner may not, without written approval of the
specific act 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
applicable law; or (v) transfer its interest as general partner of the
Partnership, except as otherwise provided in this Agreement.
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3.1.5 Except as provided in certain articles, 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 all of 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 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
Creation Baskets.
3.3 Initial Limited Partner. The name, business address and Capital
Contribution of the Initial Limited Partner are [insert information]. The
Initial Limited Partner shall purchase the initial Creation Basket at an initial
offering price per Unit equal to the opening price of one near-month oil futures
contract as traded and reported on the New York Mercantile Exchange on the first
day of the offering.
3.4 Except as provided in ___, no Partner shall have any right to demand
or receive the return of his 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.
Article 4
CAPITAL ACCOUNTS OF PARTNERS AND OPERATION THEREOF
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4.1 Capital Account. There shall be established for each Partner (or a
Beneficial Owner of Units held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Internal Revenue Code or any other method acceptable to
the General Partner in its sole discretion) on the books and records of the
Partnership a capital account (a "Capital Account"), the balance of which shall
initially be zero. 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 Member shall
be:
(i) credited with the amount of any Capital Contributions made by
such Partner during such Accounting Period;
(ii) credited with any allocations of Profits made to such Partner
for such Accounting Period;
(iii) debited by any allocation of Losses made to such Partners for
such Accounting Period; and
(iv) debited by 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.
4.2 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 day of such Accounting
Period. The General Partner may revise, alter or otherwise modify this method of
allocation as it determines necessary to the extent permitted or required by
Section 706 of the Code and the regulations or ruling promulgated thereunder.
4.3 Redemptions and Allocations to Redeeming Partners.
4.3.1 A Partner may cause the Partnership to redeem Units only in a
Redemption Basket or whole number multiples thereof as set forth in Article 16.
4.3.2 In the event that the Partnership redeems Units of any Partner
(a "Redeeming Partner") on any date other than a Valuation Date, the Partnership
shall allocate Profit or Loss to such Partner for the Accounting Period during
which such Redemption occurs by treating the date of redemption as the last day
of the Accounting Period (an "Interim Valuation Date") solely with respect to
the Units redeemed. A pro rata portion (based on the number of Units outstanding
immediately prior to the redemption) of the Partnership's Profit or Loss for the
Accounting Period through the Interim Valuation Date shall be allocated to the
Redeeming Partner with respect to the Units redeemed. The Interim Valuation Date
shall not be used for the purposes of
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allocating Profit or Loss to any Partner other than the Redeeming Partner or
with respect to any Units other than Units redeemed. For the avoidance of doubt,
it is intended that the Profit or Loss for an Accounting Period during which a
redemption occurs will be adjusted to reflect the allocation of Profit or Loss
to the Redeeming Partner under this Section 4.3.2.
4.4 Allocation of Taxable Income and Losses.
4.4.1 Except as provided in 4.4.3, for each fiscal year of the
Partnership, items of income, deduction, gain, loss, or credit shall be
allocated for income tax purposes among the Partners in such manner as to
equitably reflect the amounts credited or debited to each Partner's Capital
Account for the current and prior fiscal years (or relevant portions thereof).
Allocations under this Section 4.4 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)(4), 1.704-1(b)(4)(i) and 1.704-3(e).
4.4.2 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)(4) through (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 Section 4.4.2 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 Section 4.4.2.
4.5 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 in any case in which the nominee has furnished the
identity of such owner to the Partnership in accordance with Section 6031(c) of
the Code or any other method acceptable to the General Partner in its sole
discretion.
4.6 For the proper administration of the Partnership or for the
preservation of uniformity of the Units, the General Partner shall have sole
discretion to (i) adopt such conventions as it deems appropriate; (ii) make
special allocations for federal income tax purposes of income (including,
without limitation, gross income) or deductions; and (iii) amend the provisions
of this Agreement as appropriate (x) to reflect the proposal or promulgation of
Treasury Regulations under Section 704(b) or Section 704(c) of the Code or (y)
otherwise to preserve or achieve uniformity of the Units.
Article 5
RECORDS AND ACCOUNTING; REPORTS
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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, XX 00000 or such office, including of an
administrative agent, as it may subsequently designate upon notice. 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 of 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 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 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.
5.5 Tax Returns. The General Partner shall cause income tax returns of the
Partnership to be prepared and timely filed with the appropriate authorities.
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5.6 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.
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.
6.5 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
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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.
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 partners 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 of the limited partners);
(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
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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 New York 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.
7.2 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 information, 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.
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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
Partnership purposes so much of its time and attention as is necessary or
advisable to manage properly the affairs of the Partnership;
(b) maintain a Partnership 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 owes no duties, fiduciary or
otherwise, to the Limited Partnership or to the Limited Partners and will have
no liability to the Limited Partnership for breach of contract, or for any other
duty, other than for a breach of this Agreement itself that constitutes a bad
faith violation of the implied covenant of good faith and fair dealing.
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, employee, broker or other agent of the
Partnership or any officer, director, stockholder, partner, employee or agent of
such General Partner, provided that such officer, director, stockholder,
employee, broker or agent of the Partner or officer, employee, partner 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 actions 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.
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Notwithstanding any of the foregoing to the contrary, the provisions of this
Section 7.6.1 and of Section 7.6.2 hereof shall not be construed so as to
relieve (or attempt to relieve) a General Partner (or any employee or other
agent thereof or any 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 Section 7.6.1 and of Section 7.6.2 hereof
to the fullest extent permitted by law.
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, employee and 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
Unit holder, 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 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 officer thereof
or by reason of its being or having been such a General Partner 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
16
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 Section 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 none of
such 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 Section 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 Section 7.6.2 shall be construed to subject any Covered
Person to any liability to which he 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 stockholder, director, officer, employee or agent of any
Affiliate of the General Partner to any liability for any actions of such
General Partner or any obligations arising under or in connection with this
Agreement or the transactions contemplated herby.
7.7 Resolution 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.
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
17
different standards imposed buy 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
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 full and complete authorization and 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, or any shareholder, 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
therefrom.
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 Agreements 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.
Article 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
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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, and no Limited Partner shall be obligated personally for any such
debt, obligation or liability of the Partnership solely by reason of being a
Limited Partner of the Partnership.
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, which shall not be later than the first day of the fiscal quarter
of the partnership next following the date upon which the General Partner has
given its written consent to such substitution.
8.5 Death or Incapacity of Limited Partner. The death or legal incapacity
of a Limited Partner shall not cause a 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 limited by Section 7.5(b), 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;
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(iii) to have furnished to him, 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 him, 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 and description and statement of the Agreed 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
Section 8.6).
Article 9
UNIT CERTIFICATES
9.1 Unit Certificates. Unit Certificates shall be executed on behalf of
the Partnership by any officer of either the General Partner or the Partnership.
9.2 Registration, 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 and subject to the provisions of
Section 9.2(b), the General Partner will provide for the registration and the
transfer of Units. The Transfer Agent is hereby 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 Section 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
20
Certificates evidencing the same aggregate number of Units as was evidenced by
the Certificate so surrendered.
9.2.2 Except as otherwise provided in Section 11.5, the Partnership
shall not recognize any transfer of Units until the Certificates (if applicable)
evidencing such Units are surrendered for registration of transfer and such
Certificates are 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 Section 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
therefor, 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
(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 he 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.
21
9.3.3 As a condition to the issuance of any Certificate under this
Section 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 The General Partner is hereby authorized to cause the Partnership to
issue such additional Units, or 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 (collectively, "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.
9.6 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 ruling.
Article 10
TRANSFER OF INTERESTS
10.1 Transfer.
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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.
10.2.1 Except as set forth in this Section 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
voting Units (excluding for this purpose Units held by the General Partner and
its Affiliates) 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 the
Operating Company 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 as a member of the Operating Companies
or cause the Partnership or the Operating Companies 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 Section 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 Section 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.
23
10.3 Transfer of Units.
10.3.1 Units may be transferred only in the manner described in
Section 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 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
Securities and Exchange Commission, any state securities commission 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.
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) therefor 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
24
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 Section 10.6.
10.6 Redemption of Units for Failure to Provide Tax Certification.
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
Section 10.5.1, The Partnership may redeem the Units of such Limited Partner or
Assignee as follows:
(a) The General Partner shall not later than the 10th day
before the date fixed for redemption, give notice of redemption to the Limited
Partner or Assignee, at his 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, 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 Certificate
evidencing the Redeemable Units, duly endorsed in blank or accompanied by an
assignment duly executed in blank, the Limited Partner or Assignee or his duly
authorized representative shall be entitled to receive the payment therefor.
(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.
25
10.6.3 The provisions of this Section 10.6 shall also be applicable
to Units held by a Limited Partner or Assignee as nominee of a Beneficial Owner.
Article 11
ADMISSION OF PARTNERS
11.1 Admission of Initial Limited Partners and Other Creation Basket
Purchases. Upon the issuance by the Partnership of Units to Initial Limited
Partners and any other purchases 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. 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 no
other rights of a Limited Partner.
11.3 Admission of Successor General Partner. A successor General Partner
approved pursuant to this Section 11.3 or the transferee of or successor to all
of the General Partner's Interest pursuant to Section 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 Section 12 or the transfer of the General
Partner's Interest pursuant to Section 10.2; provided, however, that no such
successor shall be admitted to the Partnership until compliance with the terms
of Section 10.2 has occurred. Any such successor shall carry on the business of
the Partnership without dissolution. In each case, the admission shall
26
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 Section 15, (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 Section
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 Section 15.
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 Section 11.2;
(c) the General Partner is removed;
27
(d) the General Partner (A) makes a general assignment for the
benefit of creditors; (B) files a voluntary bankruptcy petition; (C) files a
petition or answer seeking for itself a reorganization, arrangement,
composition, readjustment liquidation, dissolution or similar relief under any
law; (D) 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 (A) - (C) of this sentence; or (E)
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 Section 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 Section 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; (ii) at any
time that the General Partner ceases to be a General Partner pursuant to Section
12.1.1(b) or is removed pursuant to Section 12.2; or (iv), at any time that the
General Partner voluntarily withdraws by giving at least 90 days' advance notice
of its intention to withdraw to the Limited Partners, such withdrawal to take
effect on the date specified in the notice, if at the time such notice is given
one Person and its Affiliates (other than the General Partner and its
Affiliates) own beneficially or of record or control at least 50% of the
Outstanding Voting Units. If the General Partner gives a notice of withdrawal
pursuant to Section 12.1.1(a), holders of at least a majority of such
Outstanding Units (excluding for purposes of such determination 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 Limited
Partners as provided herein, the Partnership shall be dissolved in accordance
with Section 13. If a successor General Partner is elected, such successor shall
be admitted (subject to Section 12.3) immediately prior to the effective time of
the withdrawal or removal of the Departing Partner and shall continue the
business of the Partnership and the Operating Companies without dissolution.
28
12.2 Removal of the General Partner. The General Partner may be removed
with or without cause if such removal is approved by at least 66 2/3% of the
Outstanding Voting Units (excluding for this purpose Units held by the General
Partner and its Affiliates). Any such action by such Limited Partners for
removal of the General Partner also must provide for the election of a new
General Partner by the holders of a majority of the Outstanding Units (excluding
for this purpose Units held by the General Partner and its Affiliates). Such
removal shall be effective immediately following the admission of the successor
General Partner pursuant to Article 11. The right of such Limited Partners to
remove the General Partner shall not exist or be exercised unless the
Partnership has received an Opinion of Counsel opining as to the matters covered
by a Withdrawal Opinion of Counsel.
12.3 Withdrawal of a Limited Partner. In addition to withdrawal of a
Limited Partner due to its redemption of Unites constituting a Redemption Basket
under Article 16, the General Partner may, at any time, in its sole discretion,
require any Unit holder to withdraw entirely from the Partnership or to withdraw
a portion of his Partner capital account, by giving not less than fifteen (15)
days' advance written notice to the Unit holder 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 made a representation 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 Unit holder thus designated shall withdraw from the Partnership or withdraw
that portion of his Partner capital account specified in such notice, as the cas
may be, as of the close of business on such date as determined by the General
Partner. The Unit holder thus designated shall be deemed to have withdrawn from
the Partnership or to have made a partial withdrawal from his Partner capital
account, as the case may be, without further action on the part of said unit
holder and the provisions of Section 16.1 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:
13.1.1 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 Limited Partners
within ninety (90) days after such event elects to continue the Partnership and
appoints a Successor General Partner; or
13.1.2 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 paragraph 13.2.
13.2 Assumption of Agreements. No vote by the Limited Partners to
terminate the Partnership pursuant to paragraph 13.1.2 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 to
he 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 in accordance pro rata in accordance
29
with their Units. Each Partner shall receive his 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 his Capital Contributions, he 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 limited 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.
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 meting 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. Any Limited Partner may obtain a list of names,
addresses, and Interests of the Limited Partners upon written request to the
General Partner.
Article 15
POWER OF ATTORNEY
15.1 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 his true and lawful agent and attorney-in-fact with full power
and authority in his name, place and xxxxx to:
(a) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) 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, (B) 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, (C) all certificates, documents and other
instruments
30
(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, (D) all certificates, documents and other instruments
relating to the admission, withdrawal, removal or substitution of any Partner or
the Capital Contribution of any Partner, (E) all certificates, documents and
other instruments relating to the determination of the rights, preferences and
privileges of any class or series of Units or other securities issued pursuant
to Section 4.4 and (F) 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 Section ___ or any other provision of 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;
(c) sign, execute and file with the Department of Interior
(including any bureau, office or other unit thereof, whether in Washington,
D.C., or in the field, or any officer or employee thereof), as well as with any
other federal or state agencies, departments, bureaus, offices or authorities,
any documents or instruments related to the Partnership or its business which
the General Partner in its sole discretion determines should be filed,
including, without limitation, all statements of interest and holdings on behalf
of the Partnership or the Partners, and any other statements, notices or
communications now or hereafter required or permitted to be filed under any law,
rule or regulation of the United States or any state.
15.2 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, incompetency, 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
31
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.
Article 16
REDEMPTION OF UNITS
16.1 Redemptions of Redemption Baskets. Limited Partners may require the
Partnership to redeem Units in one or more Redemption Baskets for an amount
equal to the sum of the Net Asset Value represented by such Units, as of the
close of business on the last business day of any calendar month if the
Partnership has received written notice of such desired redemption at least ten
(10) days prior to the last business day of the month-end as of which the
redemption is to occur, or as may otherwise be provided for in the Prospectus.
The General Partner will notify a redeeming Limited Partner in writing within
ten (10) days after the proposed redemption date regarding whether the
redemption has been, or will be, effected on the requested redemption date.
Except as described below, the redemption amount will be paid by the fifteenth
business day of the month following the redemption date. [The General Partner
will redeem Units at the Net Asset Value per Unit on the requested redemption
date unless the number of redemptions would be detrimental to the tax status of
the Partnership, in which case, the General Partner shall select by lot that
number of redemptions as will, in its judgment, not impair the Partnership's tax
status.] The right to obtain redemption is also contingent upon the Partnership
having property sufficient to discharge its liabilities on the redemption date
and may be delayed if the General Partner determines that actions taken to meet
redemption payments would be detrimental to the Partnership or non-redeeming
Limited Partners. Redemption charges for redemption of Units shall be as set
forth in the Prospectus; provided, however, that all redemption charges shall
comply with any restrictions on redemption charges imposed by applicable law or
any exchange.
16.2 Redemption Requests. In order to effect a redemption, a Limited
Partner must furnish the General Partner with a written request for redemption.
The terms of the request for redemption must include: (i) the Units and the date
for which redemption is requested; (ii) an acknowledgement of the basis upon
which valuation of Units being redeemed will be made; and (iii) a representation
by the Limited Partner that he is the lawful owner of the Units being redeemed
and that the Units have not been encumbered in any fashion.
16.3 Required Redemption. The General Partner may, at any time, in its
sole discretion, require any Unit holder to withdraw entirely from the
Partnership or to withdraw a portion of his Partner capital account, by giving
not less than fifteen (15) days' advance written notice to the Unit holder 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
32
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 representation 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 Unit holder 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 Unit holder thus
designated shall be deemed to have withdrawn from the Partnership or to have
made a partial withdrawal from his Partner capital account, as the case may be,
without further action on the part of said unit holder and the provisions of
Section 16.1 shall apply.
Article 17
MISCELLANEOUS
17.1 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) five 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 B hereof. Any Partner may
change his address for the purpose of this Article by giving notice of such
change to the Partnership, such change to become effective on the tenth day
after such notice is given.
17.2 Waiver of Partition. Each Partner hereby irrevocably waives during
the term of the Partnership any right that it or he may have to maintain any
action for partition with respect to any Partnership property.
17.3 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
remained of this Agreement shall not be affected thereby.
17.4 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 15.
17.5 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.
33
17.6 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.
17.7 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.
17.8 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.
34
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:
ORGANIZATIONAL LIMITED PARTNER
Xxxxxxxxxx Holdings, Inc.
By: ______________________________
Name:
Title:
INITIAL LIMITED PARTNER
[_______________]
By: ______________________________
Name:
Title:
35
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
36
