1
EXHIBIT (a)
RESTATED
CERTIFICATE AND AGREEMENT OF
LIMITED - PARTNERSHIP
OF
AMERICAN GENERAL EXCHANGE FUND
2
INDEX
TO
RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
OF
AMERICAN GENERAL EXCHANGE FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
PAGE
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ARTICLE 1 FORMATION
1.1 Formation ................................................................................. A-1
1.2 Name....................................................................................... A-1
1.3 Principal Place of Business ............................................................... A-2
ARTICLE 2 CHARACTER OF THE PARTNERSHIP BUSINESS
2.1 Purpose ................................................................................... A-2
2.2 Operating Powers .......................................................................... A-2
2.3 Investment Limitations .................................................................... A-3
ARTICLE 3 TERM
3.1 Commencement and Termination .............................................................. A-4
ARTICLES 4 CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.1 General Partners' Contributions ........................................................... A-5
4.2 Limited Partners' Contributions ........................................................... A-5
4.3 Shares of Partnership interest ............................................................ A-6
4.4 Computation ............................................................................... A-6
4.5 Contributions ............................................................................. A-6
4.6 Valuation of Property ..................................................................... A-6
4.7 Use of Contributions ...................................................................... A-6
ARTICLE 5 ALLOCATION AND DISTRIBUTION OF PROFITS AND LOSSES
5.1 Allocation of Partnership Income, Gains, Losses, Deductions and Credits for Tax
Purposes ................................................................................... A-6
5.2 Distributions .............................................................................. A-8
5.3 Fiscal Year................................................................................. A-8
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PAGE
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ARTICLE 6 RECORDS, STATEMENTS AND INCOME TAX INFORMATION
6. 1 Records and Accounting ...................................................................... A-9
6. 2 Statements .................................................................................. A-9
6. 3 Income Tax Information ....................................................................... A-9
ARTICLE 7 MEETINGS OF THE PARTNERS
7.1 Action of the Partners ........................................................................ A-9
7.2 Annual Meeting ................................................................................ A-10
7.3 Special Meetings .............................................................................. A-10
7.4.Notes of Special Meetings ..................................................................... A-10
7.5 Voting Lists ........................ ......................................................... A-10
7.6 Proxies ....................................................................................... A-10
7.7 Number of Votes ............................................................................... A-11
ARTICLE 8 GENERAL PARTNERS
8.1 Number and Identity ............................................................................ A-11
8.2 Managing and Non-Managing General Partners ..................................................... A-11
8.3 Management and Control ......................................................................... A-11
8.4 Action by the Managing General Partners ........................................................ A-12
8.5 Action by the Non-Managing General Partners .................................................... A-12
8.6 Limitations on the Authority of the General Partners ........................................... A-12
8.7 Right of General Partners to Become Limited Partners ........................................... A-13
8.8 Withdrawal of a Managing General Partner........................................................ A-13
8.9 Additional or Successor General Partners........................................................ A-13
8.10 Liability to Limited Partners................................................................... A-14
8.11 No Agency ...................................................................................... A-14
8.12 Agreements with Third Parties .................................................................. A-14
ARTICLE 9 LIMITED PARTNERS
9.1 Identity and Contributions of Limited Partners ................................................. A-14
9.2 No Power to Control Business ................................................................... A-14
9.3 Rights of Limited Partners ..................................................................... A-14
9.4 Limitation of Limited. Partners Liability ...................................................... A-15
9.5 Assignment of Shares and Substitution of Limited Partners ...................................... A-15
9.6 Admission of Additional Limited Partners ....................................................... A-16
9.7 Death of a Limited Partner ..................................................................... A-16
9.8 Representations ................................................................................ A-16
9.9 Notice of Change ............................................................................... A-16
9.10 Information on Securities ...................................................................... A-16
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ARTICLE 10 WITHDRAWAL OF PARTNERS AND RETURN OF CONTRIBUTIONS
10.1 Redemption of Shares of Partnership Interest and Return of Contributions........................ A-17
10.2 Partial Returns of Contributions ............................................................... A-18
10.3 Removal of Investment Advisor .................................................................. A-18
ARTICLE 11 DISTRIBUTION ON DISSOLUTION
11.1 Winding Up ..................................................................................... A-18
11.2 Accountants' Statement ......................................................................... A-19
11.3 Gains or Losses in Process of Liquidation ...................................................... X-00
XXXXXXX 00 XXXX XXXXXXXXXXXXX; AMENDMENT OF CERTIFICATE AND AGREEMENT;POWER OF ATTORNEY
12.1 Certificate and Agreement and Other Documentation .............................................. A-19
12.2 Events Requiring Amendment of Certificate and Agreement ........................................ A-19
12.3 Power of Attorney .............................................................................. A-20
12.4 Power of Attorney by Substituted or Additional Limited Partners................................. A-21
12.5 Amendments Requiring Signature by Less Than All Limited Partners .............................. A-22
ARTICLE 13 MISCELLANEOUS MATTERS
13.1 Independent Activities ........................................................................ A-22
13.2 Interested Partners ............................................. ............................. A-22
13.3 Tax Election .................................................................................. X-00
00.0 Xxxxxxxxxxxxx and Indemnification ............................................................. A-22
13.5 Insurance ..................................................................................... A-23
13.6 Custodian ..................................................................................... A-23
13.7 Notices ....................................................................................... A-24
13.8 Captions ............................ ......................................................... A-24
13.9 Variations in Pronouns ........................................................................ A-24
13.10 Certificate and Agreement in Counterparts ..................................................... A-24
13.11 Benefit ................... ................................................................... A-24
13.12 Nonrecourse Creditors ......................................................................... A-24
13.13 Agent for Service of Process .................................................................. A-24
13.14 Principles of Construction; Severability ...................................................... A-24
13-15 California Law ........................... .................................................... A-24
13.16 Integrated Agreement .......................................................................... A-24
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RESTATED
CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
OF
AMERICAN GENERAL EXCHANGE FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
This Restated Certificate and Agreement of Limited
Partnership (the "Certificate and Agreement") has been entered into by the
undersigned General Partners and Limited Partner, for the Purpose of forming a
Limited Partnership pursuant to the Uniform Limited Partnership Act as set
forth in the Corporations Code of the State of California ("Partnership Act"),
with respect to the following recitals of fact:
RECITALS
On December 4, 1975 the General Partners and the Limited Partner
(sometimes collectively referred to herein as the "Partners") formed a Limited
Partnership which will be registered as a diversified management type open-end
investment company under the Investment Company Act of 1940 ("1940 Act").
The Partners desire to amend and restate the Certificate and
Agreement of Limited Partnership recorded on December 4, 1975, as Document
Number 2189, Official Records, County of Los Angeles.
Now, therefore, in consideration of the mutual promises and
undertakings hereinafter contained, it is covenanted and agreed as follows:
ARTICLE I
FORMATION
1.1 Formation. The parties hereto form a Limited Partnership
("Partnership") pursuant to the provisions of the Partnership Act.
1.2 Name. The Partnership shall operate under the firm name of
"American General Exchange Fund" a California Limited Partnership. The
Partnership acknowledges that it is adopting its name through permission of
American General Insurance Company and American General Capital Management,
Inc. ("Capital Management" and collectively, the "American General Companies"),
and agrees that if Capital Management, a successor to its business or an
affiliate should, at any time and for any cause, cease to be the investment
advisor to the Partnership, the Partnership shall at the written request of any
of the American General Companies and/or any such successor eliminate the name
"American General" from the Partnership's name and will not thereafter use the
name "American General" in any form or combination whatsoever in the conduct of
the Partnership's business. The Partnership further acknowledges that the
American General Companies reserve the right to grant the non-exclusive use of
the name "American General" to any other entity, including another investment
company, whether now in existence or hereafter created. The foregoing
agreements on the part of the Partnership are hereby made binding upon its
Partners and creditors and all other persons claiming under or through it.
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1.3 Principal Place of Business. The principle place of business of the
Partnership shall be located at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx
00000. The Managing General Partners (see Section 8.2) may from time to time
establish additional places of business of the Partnership in, such other
locations, inside and outside of California, as they deem necessary or desirable
for the Conduct of the Partnership's business.
ARTICLE 2
CHARACTER OF THE PARTNERSHIP BUSINESS
2.1 Purpose. The purpose of the Partnership is to operate as a
diversified management type open-end investment company pursuant to and in
compliance with the provisions of the 1940 Act.
2.2 Operating Powers. The Partnership shall have the following powers:
(a) To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise sell, assign,
negotiate, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (including, without limitation,
any stocks, shares, bonds, debentures, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe for
the same, or evidencing or representing any other rights or interests
therein, or in any property or assets) created by any issuer
(including, without limitation, any corporation, firm, trust,
association, syndicate, combination organization government or
subdivision); and to exercise, as owner, all rights, powers and
privileges in respect thereof; and to do any and all acts and things
for the preservation, protection, improvement and enhancement in value
of any or all such securities.
(b) To engage personnel and do such other acts and incur such
other expenses on behalf of the Partnership as may be necessary or
advisable in connection with the conduct of Partnership affairs, at
fees which are reasonable for the services performed.
(c) To engage attorneys, accountants, or such other persons as
may be deemed necessary or advisable.
(d) To receive, acquire, buy, sell, exchange, trade and otherwise
deal in and with property needed to carry out the purposes of the
Partnership.
(e) To open, conduct and close accounts with brokers and dealers
and to pay the customary fees and charges applicable to transactions in
all such accounts.
(f) To open, maintain, and close-bank accounts and to draw checks
and other orders for the payment of money.
(g) To enter into, make and perform such contracts, agreements and
other undertakings and to do such other acts, as may be deemed
necessary or advisable, or as may be incidental to or necessary, for
the conduct of the business of the Partnership, including, without
limiting the generality of the foregoing, contracts, agreements,
undertakings, and transactions with any
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Partner or with any other person, firm or corporation having any
business, financial or other relationship with any Partner.
(h) To institute and prosecute litigation arising out of the
regular course of its affairs or in the enforcement of its obligations
due it, including all rights of appeal.
(i) To compromise and settle all any claims against the
Partnership.
(j) To defend any litigation, including all rights of appeal,
whether or not arising in the regular course of its affairs.
(k) To appear before any governmental board or agency or to
otherwise participate in any administrative review or appeal.
(l) To employ one or more investment advisors for the Partnership
to supervise the Partnership's investments and to administer the
affairs of the Partnership subject to the provisions contained in
Section 9.3.
(m) To file and publish all such certificates, notices,
statements or other instruments required by law for the formation and
operation of a limited partnership in any jurisdiction where the
Partnership may elect to do business.
(n) To exercise any and all other powers which may be necessary to
implement the foregoing purposes, policies and powers of the
Partnership and, not inconsistent therewith, including those granted to
limited partnerships under the Partnership Act.
(o) To exercise such other powers as the Managing General
Partners reasonably believe to be necessary to comply with the
provisions of the 1940 Act.
2.3 Investment Limitations. The Partnership may not:
(a) (1) Invest more than 5% of the value of its total assets at
market value at time of purchase in the securities of any one issuer
(other than obligations of the United States government or any
instrumentalities thereof); (2) purchase securities if such purchase
would result in the Partnership owning more than 10% of the outstanding
voting securities of any one issuer at the time of purchase; (3)
invest in securities of companies which have a record, together with
their predecessors, of less than three years of continuous operation
and (4) purchase securities issued by any other investment company or
investment trust.
(b) Purchase or hold securities of any company if, to the
knowledge of the Partnership, any of its General Partners, or officers
or directors of the Partnership's investment advisor, who beneficially
own more than one-half of one percent of the securities of that
company, together own beneficially more than 5% of the securities of
such company.
(c) Borrow money, except from banks for a purpose other than the
purchase of securities, such borrowing not to exceed 5% of the value
of its total assets at market value at the time of borrowing. Any such
borrowing may be secured provided that not more than 10% of the value
of the total assets at market value at the time of pledging may be used
as security for such borrowings.
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(d) Invest in companies for the purpose of exercising control or
management. [The Partnership's Officers may be authorized to vote
proxies issued with respect to its portfolio securities consistent with
its investment objectives.]
(e) Purchase securities on margin or make short sales.
(f) Make loans of money or securities to other persons, provided
that this limitation shall not prevent the purchase of bonds, notes,
debentures or other debt securities which are publicly distributed
or of a type customarily purchased by institutional investors.
(g) Buy or all commodities or commodity contracts.
(h) Invest in real estate (including interests in real estate
investment trusts) or oil or gas mineral exploration or development
programs, except in publicly traded securities of issuers which engage
in such businesses.
(i) Engage in the underwriting of securities except that it may
acquire portfolio securities under circumstances where, if the
securities are later publicly offered or sold by the Partnership, it
might be deemed to be an underwriter for purposes of the Securities Act
of 1933. No more than 10% of the value of the Partnership's net
assets, at the time of acquisition, will be invested in such securities
and in equity securities which are not publicly traded.
(j) Invest more then 25% of its assets at market value at the time
of purchase in securities of companies, all of which conduct theirin
principal activities in the same industry.
(k) Purchase or write any options, puts, calls, straddles, spreads
or combinations thereof.
(1) Invest in or hold warrants unless received with respect to
securities held by the Partnership.
(m) Invest in foreign securities.
The policies and safeguards set forth above may not be changed without a vote of
the Partners, as described in Article 7 hereof.
ARTICLE 3
TERM
3.1 Commencement and Termination. The Partnership shall commence as of the
date of the initial filing of this Certificate and Agreement with the
County Recorder in the County of Los Angeles, of the State of California,
as required by the Partnership Act, and shall continue in existence until
December 31, 2050, unless sooner terminated by the happening of one of the
following events:
(a) The Partnership disposes of all of its assets.
(b) The death, withdrawal, retirement, dissolution, assignment for
the benefit of creditors, filing of a petition for bankruptcy,
adjudication of bankruptcy, insanity or incompetency of any of the
General Partners, except as hereinafter otherwise provided in Section
8.9.
(c) Partners holding a majority of the outstanding shares in the
Partnership vote to terminate the Partnership.
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ARTICLE 4
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.1 General Partners' Contributions. Each of the initial General
Partners has purchased, and/or irrevocably subscribed for the number of Shares
(as defined in Section 4.3) set forth on Schedule A to this Certificate and
Agreement and incorporated herein by this reference, for which he has, or will,
on or prior to the Exchange Date (as defined in Section 4.5) deliver in cash,
and/or securities at their value, determined in accordance with Sections 4.5 and
4.6, $25 per Share.
The initial General Partners (both Managing and Non-Managing) shall as
a group make a capital contribution which shall not be less than 1% of the total
capital contributions of both the Limited Partners and the General Partners. The
General Partners shall as a group own at all times not less than 1% of all the
outstanding shares of the Partnership held by both the General and Limited
Partners or any assignees thereof. Each General Partner, by execution of this
Certificate and Agreement hereby commits and agrees that so long a he is a
General Partner, his Shares held as General Partner will not be tendered for
redemption, redeemed or assigned, nor will he accept distributions in cash if
Shares held by General Partners as a group would thereby constitute less than 1%
of the outstanding Shares. In the event a General Partner withdraws from the
Partnership and the Partnership is continued as provided herein, if such
withdrawal causes the number of shares held by the General Partners as a group
to be less than 1% of the total outstanding Shares of both the Limited Partners
and General Partners, the Non-Managing General Partner(s) shall contribute to
the capital of the Partnership such additional capital or securities to acquire
at net asset value such number of Shares as may be necessary for the General
Partners as a group to hold 1% of the total outstanding Shares; provided,
however, that if another General Partner makes a capital contribution in such
amount as to cause the outstanding Shares of the General Partners as a group to
be more than said 1%, the Non-Managing General Partner(s) shall be permitted to
redeem such Shares no longer necessary to maintain said 1%.
4.2 Limited Partners' Contributions.
(a) The original Limited Partner has purchased the number of
Shares of the Partnership set forth on Schedule "A" to this Certificate
and Agreement (which Schedule is incorporated herein by this
reference) and has contributed $25 (net of applicable sales charges) in
cash and/or securities to the Partnership for each such Share
purchased. Each Additional Limited Partner shall purchase, pursuant to
the initial public offering of the Partnership's Shares, the number of
Shares, which shall be set forth on an amendment to Schedule "A" and
shall contribute $25 (not of applicable sales charges) in cash and/or
securities to the Partnership for each such Share purchased.
(b) Limited Partners cannot be required to make additional
contributions to the Partnership or to lend funds to the Partnership,
and no Limited Partner shall be liable for any additional assessment
therefor.
(c) A subscription fee not to exceed 8% of the value of securities
and cash contributed may be paid by the Partnership as sales charges,
including commissions to Soliciting Dealers and the Dealer Manager(s)
and organizational expenses; and if so paid, shall be charged to the
subscribing Partner's account, except that no subscription fee shall be
charged upon the sale of interests in
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the Partnership to those persons exempted therefrom by the 1940 Act,
including without limitation, General Partners of the Partnership,
directors and officers of the investment advisor and full-time
employees of such entities.
4.3 Shares of partnership interest. All interests in the
Partnership shall be expressed in units of participation (hereinafter
referred to as "Share" or "Shares") or fractions thereof.
4.4 Computation. Upon completion of the Partnership's initial
public offering of its Shares, the value of each Share shall be $25.
Thereafter, the value of Shares shall be computed at the close of
business on each business day that the New York Stock Exchange is open.
4.5 Contributions. Contributions may only be in cash or
securities which are approved by the Managing General Partners. The
Managing General Partners may maintain a list of acceptable securities,
which list is subject to change without notice. All capital
contributions shall be given effect on the day when such capital
contributions are accepted by the Partnership ("Exchange Date") and
shall be valued as of the close of business on the preceding business
day.
4.6 Valuation of Property. The net asset value per Share shall be
determined once each business day as of the close of business on the
New York Stock Exchange. The market value at the Partnership's
portfolio securities shall be determined by appraising securities
traded on a national securities exchange at the last sale price or, if
no sale occurred on that day, at the mean between the closing bid and
asked prices; by appraising all other securities not so traded in like
manner if market quotations are available (or at the mean between the
highest bid and lowest asked prices if there is to last sale price or
closing bid and asked prices); and by appraising all other securities
at fair value as determined in good faith by the Managing General
Partners. The value of receivables shall be deemed to be their face
amount unless the Managing General Partners shall have determined the
value to be less. Dividends shall be treated as a receivable as of the
ex-dividend date and interest shall be accrued. From the total value of
the assets there shall be deducted all indebtedness, expenses and
management charges accrued to the appraisal date, all contractual
obligations, including unpaid distributions payable to Partners of
record on or before the appraisal date, all reserves for taxes, unpaid
redemptions prior to such valuation date and contingencies, and all
other liabilities. The resulting amount, representing the net assets of
the Partnership, shall be divided by the number of Shares then
outstanding and the quotient shall be deemed to be the net asset value
per Share. The net asset value so determined should be effective as of
the close of business next following the receipt by the Partnership of
a tender of a Share for redemption or an order to purchase or sell a
Share.
4.7 Use of Contributions. The aggregate of all capital
contributions shall be, and hereby is agreed to be, available to the
Partnership to carry out the business of the Partnership.
ARTICLE 5
ALLOCATION AND DISTRIBUTION OF PROFITS AND LOSSES
5.1 Allocation of Partnership Income, Gains, Losses,
Deductions and Credits for Tax Purposes. Except with respect to
allocations to Substituted Limited Partners if the Partnership has made
an election pursuant to Section 754 of the Internal Revenue Code of
1954, as amended ("Code") (see
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Section 9.5), the provisions of this section shall govern the allocation of
income, gain, lots, deduction and credits to the Partners for federal income tax
purposes. The provisions of this section shall not affect the amount payable to,
or the entitlement of, any Partner, in connection with distributions under
Section 5.2, returns of contributions under Articles 10 and 11, or any other
rights or obligations of Partners under this Certificate and Agreement.
(a) Gain on Contributed Securities. It is anticipated that securities
contributed by the Partners to the Partnership ("Contributed Securities")
will have a basis for determining gain of loss under the Code ("tax basis")
which is less than the value of such securities as determined pursuant to
Sections 4.5 and 4.6 ("Exchange Date Value"). Moreover, it is anticipated
that the tax basis of one Partner may be different than that of other
Partners receiving equal numbers of Shares of the Partnership.
(i) In order to reasonably approximate a fair allocation of the tax
from sales of Contributed Securities among Partners with differing tax
bases, 1% of each Contribution Gain, as defined below, resulting from the
sale of Contributed Securities by the Partnership shall be allocated among
General Partners in proportion to their respective shares and 99% of the
Contribution Gain shall be allocated among the Limited Partners in
accordance with the following formula:
Partner's Unrealized
Gain
--------------------
Allocable = Contribution x.99 x
----
Share Gain Aggregate Unrealized,
Gains
(ii) In application of the foregoing formula, the terms used shall have
the following meanings:
(1) "Allocable Share" shall mean the amount of Contribution Gain to be
allocated to a specific Partner.
(2) "Contribution Gain" shall mean the amount of capital gain subject
to formula allocable realized upon sale of Contributed Securities, which
amount shall be equal to the lower of (a) the Exchange Date Value of any
such security, less the tax basis thereof at the date of sale; or (b) the
proceeds from the sale of any such security, less the tax basis thereof at
the date of sale.
(3) "Partner's Unrealized Gain" shall consist of the difference between
the Exchange Date Value of the assets contributed by a Partner to the
Partnership pursuant to Section 4.2 less the tax basis on the Exchange Date
of such Partner in such contributed assets. In the event of redemption of
any Shares (other than Shares issued in distributions), such Partner's
Unrealized Gain shall be reduced by the proportion that such Partner's
Shares redeemed bears to such Partner's Shares held prior to such
redemption.
(4) "Aggregate Unrealized Gains" shall mean the total of all Partners'
Unrealized Gains in the Partnership on the date of sale of any of the
Contributed Securities.
(iii) To the extent that the amount of capital gain realized upon the
sale of any of the Contributed Securities exceeds the Contribution Gain
allocated pursuant to the foregoing formula, such excess amount shall be
allocated equally among the total number of Shares outstanding on the date
of sale.
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(b) Capital Gain and Loss Other Than Contribution Gain. Items of
Partnership capital gain and capital loss not constituting Contribution Gain
shall be allocated equally among the total number of Shares outstanding on
the date such item is realized.
(c) Other Allocations. Items of Partnership income, gain, loss,
deduction and credit ("tax items") arising during any Partnership tax year
which have not been allocated pursuant to subsections (a) and (b) above,
shall be allocated to each Partner in the Partnership at any time during
such year in accordance with the following formula:
Partner's = Item Partner's Day-Shares
x --------------------
Share Amount Partnership Day-Shares
In application of the foregoing formula the terms used shall the the
following meanings:
(1) "Partner's Share" shall mean the amount of a tax item to be
allocated to a specific Partner.
(2) "Item Amount" shall mean the total amount of the tax item being
allocated.
(3) "Partner's Day-Shares" shall mean the sum resulting from adding
together the total number of Shares held by a Partner on such day of the
Partnership tax year.
(4) "Partnership Day-Shares" shall mean the sum resulting from adding
together the total number of Shares outstanding in the Partnership on each
day of the Partnership tax year.
5.2 Distributions. The Managing General Partners shall determine the
amounts to be distributed to the holders of Shares and the time or times, when
such distributions shall be made. A holder of a Share shall be entitled to that
portion of any such distribution computed on the basis of a fraction, the
numerator of which shall be the total number of Share (including fractional
Shares) owned by such holder, and the denominator of which shall be the total
number of Partnership Shares outstanding. For this purpose, a person will be
deemed to be a holder of a Share if he is the record holder of the Share, as
evidenced by the recordation in the office of the County Recorder for the County
of Los Angeles, State of California of an amendment to the Certificate and
Agreement which indicates that such person is a Partner of the Partnership. Only
such record holders of Shares shall be entitled to Partnership distributions.
With respect to capital gains, the Managing General Partners will determine
annually what portion, if any, of the Partnership's capital gains will be
distributed. All distributions shall be made in cash except to those Partners
who have properly elected to receive their distributions in Shares. Any income
distributions in Shares will be paid at the net asset value of such Shares on a
date between the record date and the payable date of the distribution which is
fixed by the Managing General Partners in their declaration of such
distribution. To the extent practicable, income distributions will be made
quarterly.
5.3 Fiscal Year, The fiscal year of the Partnership shall be the calendar
year for financial and for Federal income tax purposes.
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ARTICLE 6
RECORDS, STATEMENTS AND INCOME TAX INFORMATION
6.1 Records and Accounting. At all times during the continuance of the
Partnership, books of account, which shall be adequate and appropriate for the
Partnership business, shall be kept. Such books and records shall be kept in
accordance with generally accepted accounting principles and procedures applied
in a consistent manner. Such books and records shall include such separate and
additional accounts for each Partner as shall be necessary to reflect
accurately the rights and interests of the respective Partners and shall
specifically reflect the name and address of each Partner and the number of
Shares held by him for the purpose of determining recipients of distributions
and notices. Except as are required to be held by the Partnership's Custodian
(see Section 13.6), such books of account, together with a copy of the
Certificate and Agreement and any amendments thereto, all documents relating to
the ownership and condition of title of Partnership properties, and copies of
all Partnership tax returns shall at all times be maintained by the Partnership
and each Partner and his duly authorized representative shall have access to
them and the right to inspect and copy them at all reasonable times.
6.2 Statements. The Partnership shall cause certified annual and
uncertified semi-annual financial statements of the operations of the
Partnership to be prepared and forwarded to the Partners. The financial
statements shall include a balance sheet, statement of income, and such
supporting statements as required by the Managing General Partners and by law,
including, without limitation, those required by the California Administrative
Code, Title 10, Subchapters 1 and 2.
6.3 Income Tax Information. Partnership tax returns shall be prepared using
the accrual method. The Partnership shall provide to each Partner information as
to the Partnership's Federal taxable income or loss and each class of income,
gain, loss, deduction or credit that is relevant to reporting Partnership
income. The information shall, also show each Partner's allocated share of each
class of income, gain, loss, deduction or credit. This information shall be
furnished to the Partners as soon as it is available and in any event within 75
days after the close of the Partnership's taxable year.
ARTICLE 7
MEETINGS OF THE PARTNERS
7.1 Action of the Partners. Actions which require the vote of the Limited
Partners pursuant to Section 9.3 of this Certificate and Agreement shall be
taken at a meeting of both the General and Limited Partners at which a quorum is
present. A quorum shall exist if more than 50% of the outstanding Shares are
present at the meeting in person or by proxy. All such meetings shall be held
within the State of California or at such other place as the Managing General
Partners shall designate. The Partners may vote at any such meeting in person
or by proxy. The election of General Partners and ratification or rejection of
the selection of independent public accountants shall require a majority vote of
the Shares present in person or by proxy at a meeting at which a quorum is
present. Termination of the Partnership shall require the vote specified in
Section 3.1. All other actions of the Partners shall require the vote of the
lesser of (i) a majority of the outstanding Shares, or (ii) 67% or more of the
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Shares represented in person or by proxy at a meeting at which a quorum is
present. In the election of General Partners, those candidates receiving the
highest number of votes cast, at a meeting at which a quorum is present in
person or by proxy, up to the number of General Partners proposed to be elected,
shall be elected as General Partners to serve until the next annual meeting or
until their successors are elected and qualified.
7.2 Annual Meeting. An annual meeting of the Partnership shall be held
during the month of April in each year, beginning in 1977, for the purpose of
electing Managing General Partners, ratifying or rejecting the selection of the
independent public accountants for the Partnership, and taking any other action
which the Limited Partners are permitted to take under this Certificate and
Agreement. Non-Managing General Partner(s) shall not be elected annually but
shall serve in such capacity until it withdraws from the Partnership or is
removed by the vote of the Limited Partners. The annual meeting shall be held at
any place, either within or without the State of California, designated by the
General Partners. Written notice stating the place, day and hour of the meeting
shall be mailed to each Partner entitled to vote at the meeting at his last
known post office address as shown on the books of the Partnership not less
than 10 days nor more than 60 days before the date of the meeting. Failure to
receive notice of such annual meeting on the part of any Partner shall not
affect the validity of any act or proceeding at such annual meeting, provided
there is a lawful quorum present thereat. In the event that the annual meeting
shall not be held in any year in the month specified above, a special meeting in
lieu thereof may be held in accordance with Sections 7.3 and 7.4 hereof with
the same force and effect.
7.3 Special Meetings. Special meetings of the Partnership for the purpose
of taking any action with the Limited Partners are permitted to take under this
Certificate and Agreement may be called (i) by a majority vote of the Managing
General Partners; (ii) by Limited Partners representing 10% of the outstanding
Shares of Limited Partnership interest; or (iii) by a. Non-Managing General
Partner pursuant to Section 8.5.
7.4 Notice of Special Meetings. Written notice of each special meeting
stating the place, day and hour of the meeting and indicating briefly the
object or objects thereof shall be mailed by the Partnership to each Partner
entitled to vote at such meeting at his last known post office address as shown
on the books of the Partnership not less than 10 days nor more than 60 days
before the date of the meeting. Failure to receive notice of such special
meeting on the part of any Partner shall not affect the validity of any act or
proceeding at such special meeting, provided there is a quorum present
thereat.
7.5 Voting Lists. The Partnership shall establish a record date not
exceeding 60 days prior to the date of any meeting of the Partners for purposes
of determining eligibility to vote at such meeting and the number of votes to
which each Partner will be entitled, and shall prepare, at least 10 days prior
to said meeting, a list setting forth the name of each Partner and the number of
votes he will be entitled to cast. This list will be available for examination
at the principal office of the Partnership during regular business hours.
7.6 Proxies. A Partner may vote at any meeting of the Partnership by a
proxy executed in writing by the Partner. All such proxies shall be filed with
the Partnership before or at the time of the meeting. No such proxy shall be
valid after eleven months from the date of its execution. The law of California
pertaining to corporate proxies will govern all Partnership proxies.
Notwithstanding that a valid proxy is outstanding, powers of the proxy holder
will be suspended if the person executing the proxy is present at the meeting
and elects to vote in person.
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7.7 Number of Votes. All Shares shall have equal voting rights. Each
Partner shall have the right to vote the number of full and fractional Shares
standing of record in such Partner's name as of the record date set forth in the
notice of meeting.
ARTICLE 8
GENERAL PARTNERS
8.1 NUMBER AND IDENTITY. THE names of the General Partners, their places of
residence and the number of Shares of Partnership interest owned by each of them
are set forth in Schedule "A" to this Certificate and Agreement and are
incorporated herein by this reference. Each such Share will be held by the
General Partners as a General Partner and not as a limited Partner. The General
Partners are listed separately as Managing General Partners and Non-Managing
General Partners. The Managing General Partners shall determine from time to
time the number of persons to be elected as General Partners, provided, if at
any time the number of Managing General Partners is reduced to less than three,
the remaining Managing General Partners shall, within 120 days, call a meeting
of Partners for the purpose of electing an additional Managing General Partner
or Managing General Partners so as to restore the number of Managing General
Partners to at least three.
8.2 MANAGING AND NON-MANAGING GENERAL Partners. Only individuals may act as
Managing General Partners, and all individual General Partners shall act as
Managing General Partners. Any General Partner which is a corporation,
association, partnership, joint venture or trust shall act as a Non-Managing
General Partner. The Partnership shall at all times have at least one corporate
General Partner; provided, however, that in the event of withdrawal (including
removal), dissolution, assignment for the benefit of creditors, filing of a
petition in bankruptcy or adjudication of bankruptcy of a corporate General
Partner, the remaining General Partners shall, within 60 days of such event,
hold a special meeting of the Partnership in accordance with Sections 7.3 and
7.4 hereof for the purpose of electing a successor corporate General Partner,
and the Partnership may continue without a corporate General Partner until said
meeting is held. The Managing General Partners agree that they will not vote to
dissolve the Partnership if there occurs any of the events described in the
preceding sentence affecting a corporate General Partner. A corporate General
Partner may not withdraw from the Partnership until the earlier of: (a) 24
months from the notice of such withdrawal; or (b) the date a successor corporate
General Partner is elected.
8.3 MANAGEMENT AND CONTROL. Subject to the terms of this Certificate and
Agreement, the Partnership will be managed solely by the Managing General
Partners, who will have complete and exclusive control over the management,
conduct and operation of the Partnership's business, and except as otherwise
specifically provided in this Certificate and Agreement, the Managing General
Partners shall have the rights, powers and authority of partners of a
partnership without limited partners under the Partnership Act. Subject always
to the continuing supervision of the Managing General Partners, the Partnership
may contract with one or more banks, trust companies or investment advisors
(including a Non-Managing General Partner or any affiliate thereof) for
performance of such functions as the Managing General Partners may determine,
including, but not by way of limitation, the investment and reinvestment of all
or part of the Partnership's assets and execution of portfolio transactions, and
any or all adminis-
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trative functions. The Managing General Partners may also appoint agents and
officers to perform such other duties on behalf of the Partnership as the
Managing General Partners deem desirable. Such agents or officers need not be
Managing or Non-Managing General Partners or Limited Partners. The Managing
General Partners shall devote themselves to the Partnership's business to the
extent they may determine necessary for the efficient conduct thereof, which
need not, however, occupy their full time. General Partners may also engage in
other businesses, whether or not similar in nature to the business of the
Partnership, subject to the limitations of the 1940 Act.
8.4 Action by the Managing General Partners. The Managing General Partner's
shall act either by majority vote of the Managing General Partners at a meeting
duly called or by unanimous written consent of the Managing General Partners
without a meeting, unless the 1940 Act requires that a particular action be
taken only at a meeting of the Managing General Partners. No single Managing
General Partner shall have authority to act on behalf of the Partnership or to
bind the Partnership. The Managing General Partners shall have fiduciary
responsibility for the safekeeping and use of all funds and assets of the
Partnership whether or not in their immediate possession and control, and shall
not employ, or permit another to employ such funds or assets in any manner
except for the exclusive benefit of the Partnership. Without limiting the
foregoing, the Managing General Partners shall not engage in any activity of the
type prohibited by the California Administrative Code, Title 10, Chapter 3,
Subchapter 2.
The Managing General Partners shall appoint one of their number to be
Chairman. Meetings of the Managing General Partners may be called by the
Chairman or by any two Managing General Partners. The Chairman shall preside at
all meetings of Partners.
8.5 Action by non-managing General Partner. A Non-Managing General Partner
shall take no part in the management, conduct or operation of the Partnership's
business and shall have no authority to act on behalf of the Partnership or to
bind the Partnership; provided, however, that if the Partnership is without at
least one Managing General Partner, the Non-Managing General Partner (or any of
the Non-Managing General Partners if there be more than one) shall, within 60
days of such condition call a special meeting of the Partners pursuant to the
applicable sections of Article 7 [and until such meeting, shall be authorized to
supervise the continuing operations of the Partnership pursuant to the
directives and policies in effect immediately prior to the occurence of such
event.]
8.6 Limitations on the Authority of the General Partners. The General
Partners shall have authority without the prior vote or written consent or
ratification of all the Limited Partners to:
(a) do any act in contravention of this Certificate and Agreement, as
it may be amended, or which would make it impossible to carry on the
ordinary business of the Partnership;
(b) confess a judgment against the Partnership
(c) possess Partnership property, or assign the Partnership's rights in
specific Partnership property, for other than a Partnership purpose; or
(d) admit a person as a General Partner, except in accordance with
Section 8.5 to which all Partners hereby give their advance written consent
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Nothing herein shall preclude dissolution of the Partnership in accordance
with this Certificate and Agreement. In addition, certain actions of the
Managing General Partners shall be subject to the approval of a majority of the
Limited Partners as provided in Section 9.3 below.
8.7 Right of General Partners to Become Limited Partners. A General Partner
may also become a Limited Partner and thereby become entitled to all of the
rights of a Limited Partner to the extent of the Limited Partnership interest so
acquired, and the consent of the Limited Partners need not be obtained. Such
event would not, however, be deemed to reduce any of the General Partner's
liability hereunder.
8.8 Withdrawal of a Managing General Partner. The interest of a Managing
General Partner shall terminate and such party shall have no further right or
power to act as a Managing General Partner (except to execute any amendment to
this Certificate and Agreement to evidence his termination) if he:
(a) dies;
(b) becomes insane;
(c) voluntarily retires upon not less than 180 days' written notice to
the other General Partner; or
(d) is removed or fails to be re-elected by the Limited Partners, as
provided in Section 9.3 below.
Termination of a person's status as a General Partner shall not affect his
status, if any, as a Limited Partner. A General Partner shall not be entitled to
any special payment from the Partnership as a result of termination of his
status as General Partner. A withdrawing General Partner may, if he chooses to
do so, redeem his Shares of Partnership interest in accordance with Section 10.1
or retain his Shares as a Limited Partner.
8.9 Additional or Successor General Partners. A person may be added or
substituted as a General Partner only upon his election by the Partners as
provided herein. Each General Partner, by becoming a General Partner, consents
to the admission as an added or substituted General Partner of any person
elected by the Partners in accordance with this Certificate and Agreement. Any
General Partner who is elected at a meeting of the Partners in accordance with
Section 7.1 hereof, and who shall not be serving as a General Partner at the
time of such election, shall (a) execute a written acceptance and adoption of
all the terms and provisions of the Certificate and Agreement, as the same may
have been amended on form(s) approved by the Managing General Partners, (b)
acquire on or before admission as a General. Partner, Shares having a net asset
value of at least $5,000, and (c) be admitted to the Partnership as a General
Partner effective as of the date of recordation of an Amendment to the
Certificate and Agreement. Any serving General Partner who is not re-elected at
any such meeting in the manner specified in Section 7.1 shall be deemed to have
withdrawn as of the date of such election in accordance with the provisions of
Section 8.8 hereof,
Each of the General Partners agrees that in the event of the death,
withdrawal, retirement, dissolution, assignment for the benefit of creditors,
filing of a petition for bankruptcy, adjudication of bankruptcy, insanity of
incompetency of any General Partner, the remaining General Partner or Partners
shall elect to continue the business of the Partnership and shall file an
appropriate amendment
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to this Certificate and Agreement within 60 days after the event giving rise to
such election. A corporate General Partner shall not withdraw from the
Partnership except as provided in Section 8.2.
In the event that all General Partners die, withdraw, retire, dissolve,
make an assignment for the benefit of creditors, file a petition for bankruptcy,
are adjudicated to be bankrupt, or become insane or incompetent, the Partnership
shall dissolve.
8.10 Liability to Limited Partners. None of the General Partners shall be
liable to any Limited Partner because of any act or failure to act if the act
or omission is within the scope of authority conferred on General Partners by
this Certificate and Agreement or by law and does not constitute willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. Without limiting the foregoing; the
General Partners shall not: (a) be personally liable for the payment of the
amount standing in the individual accounts of the Limited Partners or any
portion thereof, or (b) be liable to any holder of Shares or to any Limited
Partner by reason of any change in the Federal or State income tax laws, or
interpretations thereof, as they apply to the Partnership and the Limited
Partners, whether such change occurs through legislative, judicial or
administrative action.
8.11 No Agency. Nothing in this Agreement shall be construed as
establishing any General Partner as an agent of any Limited Partner or of the
Partnership except as authorized in Section 8.3 of this Certificate and
Agreement.
8.12 Agreements with Third Parties. The Managing General Partners will, to
the extent they are able, contract on behalf of the Partnership with third
parties on terms which limit such third parties' recourse against the
Partnership to the Partnership's assets.
ARTICLE 9
LIMITED PARTNERS
9.1 Identity and Contributions of Limited Partners. The names of the
Limited Partners, their places of residence and the number of Shares of
Partnership interest owned by each of them are set forth in Schedule "A" to this
Certificate and Agreement and are incorporated herein by this reference
9.2 No Power to Control Business. A Limited Partner shall have no right to
and shall take no part in the control of the Partnership's business and shall
have no right or authority to act for or bind the Partnership, but may exercise
the rights and powers of a Limited Partner under this Certificate and Agreement,
including without limitation, the voting rights and the giving of consents
and approvals provided for hereunder. The exercise of such rights and powers are
deemed to be matters affecting the basic structure of the Partnership and not
the control of its business.
9.3 Rights of Limited Partners. Subject to the preceding subsection, the
Limited Partners shall have the right to vote, in accordance with the provisions
of Section 7.1, only upon the following matters affecting the basic structure of
the Partnership, which include the voting, approval, consent or similar
rights required under the 1940 Act for voting security holders:
(a) to elect and remove General Partner(s) in accordance with Section
7.2;
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(x) to approve or disapprove the sale of all or substantially all of
the assets of the Partnership;
(c) to approve any investment advisory contract or terminate any such
existing contract;
(d) to ratify or reject the appointment and to terminate the employment
of the independent public accountants of the Partnership;
(e) to amend this Certificate and Agreement, other than amendments to
admit Additional or Substituted Limited Partners or to return or reduce the
amount of capital contributions of Partners, including, without limitation,
the right to approve or disapprove proposed changes in the investment
limitations set forth in Section 2.3 herein; and the right to approve or
disapprove proposed changes in the nature of the Partnership's business as
such business is described herein; provided, however, that no such amendment
shall conflict with the 1940 Act or the rules and regulations thereunder so
long as the Partnership intends to remain registered thereunder, nor affect
the liability of the General Partners without their consent nor the limited
liability of the Limited Partners as provided in Section 9.4; and
(f) to terminate the Partnership, as provided in Section 3.1 above.
The initial investment advisory contract will be between the Partnership
and American General Capital Management, Inc. Any investment advisory contract
entered into by the Partnership shall provide that it may be terminated at any
time, without the payment of any penalty, by the Managing General Partners or by
a vote of the Limited Partners in accordance with the provisions of this
Section, or by the investment advisor, on not more than 60 days' written notice
to the other party. If an investment advisory contract is terminated or a new
investment advisory contract is approved, this Certificate and Agreement
shall be amended to reflect such event.
The Limited Partners shall have no right or power to cause the termination
and dissolution of the Partnership except as set forth in this Certificate and
Agreement. No Limited Partner shall have the right to bring an action for
partition against the Partnership.
9.4 Limitation of Limited Partners' Liability. Limited Partners shall not
be liable for the debts, obligations or losses of the Partnership, provided,
however, that the capital contributions of a Limited Partner shall be subject
to the risks of the business of the Partnership, and to the claims of the
Partnership's creditors. However, Limited Partners who have received the
return in whole or in part of their capital contribution may be liable to the
Partnership for any sum, not in excess of such return with interest, necessary
to discharge the Partnership's liability to all creditors who extended credit
or whose claims arose before such return.
9.5 Assignment of Shares and Substitution of Limited Partners. A Limited
Partner may assign the whole or any portion of his Limited Partnership interest
only to an existing Limited Partner or to a person satisfying the conditions set
forth below for admission as a Substituted Limited Partner. In order to effect
an assignment of a Partnership interest and/or a substitution as a Limited
Partner, the following conditions must be satisfied: (a) execution by the
assignor of a written instrument of assignment on form(s) approved by the
Managing General Partners ("Partnership Form(s)"); (b) execution by the assignee
of the Partnership Form(s); which include (i) the assignee's written acceptance
and adoption of all the terms and provisions of the Certificate and Agreement,
as the same may have been
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amended, and (ii) if the assignee is a prospective Substituted Limited Partner,
the execution of a power of attorney granting the powers specified in Sections
12.3 and 12.6 hereof; (c) the Partnership Form(s), executed by both the assignor
and assignee, shall be presented to the transfer agent for the Partnership
together with a guarantee issued by a commercial bank or trust company or by a
member firm of a domestic securities exchange with respect to the genuineness
of the signatures of the assignor and assignee; and (d) the recordation of an
amendment to the Certificate and Agreement as required by the Partnership Act.
For purposes of the allocation of Partnership income, gains, losses,
deductions and credits pursuant to Section 5.1 hereof, a Substituted Limited
Partner's allocation shall be computed by using the same formula applicable to
the assignor of such Partnership interest; provided that if the Substituted
Limited Partner acquired less than all of the assignor's Partnership interest,
such allocation will be in proportion to the percentage of the assignor's full
interest so acquired and the allocation formula will be adjusted accordingly.
The amount so allocated to the Substituted Limited Partner shall be subject to
the effect of any basis adjustment resulting from an election, if made, by the
Partnership under Section 754 of the Code.
9.6 Admission of Additional Limited Partners. The Partnership may offer new
shares at net asset value, as determined at the date of exchange. The Managing
General Partners may admit a purchaser of such shares as a Limited Partner,
upon (i) the execution and acknowledgement by such purchaser of such instrument
or instruments as the Managing General Partners may deem necessary or
desirable to effectuate such admission, (ii) the purchaser's written acceptance
and adoption of all the terms and provisions of this Certificate and Agreement,
as the same may have been amended, and (iii) such purchaser paying or
obligating himself to pay, as the Managing General Partners may determine, all
reasonable expenses connected with such admission. In no event shall the
consent of any of the Limited Partners be required to effectuate such admission.
9.7 Death of a Limited Partner. The death of a Limited Partner shall not
dissolve or terminate the Partnership. In the event of such death, the
personal representative of the deceased Limited Partner shall have all the
rights of the Limited Partner in the Partnership to the extent of the deceased's
interest therein for the purpose of settling his estate, including the right
to assign his Shares and to designate his assignee as a Substituted Limited
Partner, subject to the terms and conditions of this Certificate and
Agreement; and his estate shall be liable for all his liabilities as a Limited
Partner.
9.8 Representations. The General Partners shall require each Limited
Partner to represent that, unless otherwise disclosed in writing to the
Partnership, on the date of the Limited Partner's execution hereof:
(a) my securities which he has contributed are not subject to any
restriction on transferability, including but not limited to any
restriction pursuant to any State or Federal Securities Act or regulation
thereunder as to registration or other condition; and
(b) he has unencumbered ownership of any property contributed to the
Partnership.
9.9 Notice of Change. Each of the undersigned Limited Partners agrees to
notify the Partnership immediately if either of the representations in Section
9.8 should become untrue.
9.10 Information on Securities. Each prospective Limited Partner who
contributes securities to the Partnership shall furnish to the Partnership,
prior to the date of any such contribution, information
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satisfactory to the Central Partners as to his date of acquisition and his
adjusted basis for Federal income tax purposes and shall represent and warrant
the accuracy of such information.
ARTICLE 10
WITHDRAWAL OF PARTNERS AN RETURN OF CONTRIBUTIONS
10.1 Redemption of Shares of Partnership Interest and Return of
Contributions. A Limited Partner or, except as provided in Sections 4.1 and 8.2
hereof, a General Partner may redeem all or part of his Shares at any time by
delivering to the Partnership or its designated agent notice of such redemption
executed by the Partner(s) owning such Shares as their names appear on the
Certificate and Agreement, as amended, stating the number of Shares or dollar
amount to be redeemed, and any Share certificates. The signature of such General
or Limited Partner shall be guaranteed by a commercial bank or trust company or
by a member firm of a domestic securities exchange. As an alternative to
delivery to the Partnership or its designated agent, a Partner redeeming may
deliver such notice to any authorized investment dealer, which delivery will be
complete when the Partnership's designated agent, initially American General
Capital Distributors, Inc., Houston, Texas, receives telephone or wire
confirmation of (i) receipt of such notice and the information contained
therein, and (ii) guarantee by such firm of ,delivery of such notice to the
Partnership.
The Partner shall be entitled to payment of the net asset value of his
Shares next computed after such delivery. Such payment may include the return
of the Partner's contribution to the Partnership with respect to the Shares
to be redeemed. A Partner redeeming Shares may, at the sole election of the
Partnership, be tendered as total or partial payment in redemption, any
securities then in the Partnership portfolio (which may include, in whole or in
part, securities of the same company as originally contributed) with a value
together with any cash paid, equal to the net asset value of the Shares redeemed
at such redemption date. The Managing General Partners shall establish
procedures to determine the amount of cash and/or securities to be distributed
to such withdrawing Partner, which procedures may be changed or modified from
time to time in the sole descretion of the Managing General Partners.
The Partnership may suspend redemption during any period when trading on
the New York Stock Exchange is restricted or such Exchange is closed (other than
weekends or holidays) or the Securities and Exchange Commission has by order
permitted such suspension or an emergency exists making disposal of securities
or determination of the net asset value of the Partnership not reasonably
practicable.
Notwithstanding the foregoing, no Partner shall be entitled to receive the
return of any part of the contribution with respect to his Shares unless all
liabilities of the Partnership, except liabilities to General Partners and
to Limited Partners on account of their contributions, have been paid or there
remains property of the Partnership sufficient to pay them.
The Managing General Partners shall cause this Certificate and Agreement to
be amended to reflect the withdrawal of any Partner or the return, in whole or
in part, of the contribution of any Partner.
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10.2 Partial Returns of Contributions. Except upon redemption of a Share or
dissolution of the Partnership, no holder has the right to demand return of any
part of the contribution with respect to his Shares. The Managing General
Partners may, however, from time to time, elect to make partial pro rata returns
of contributions to holders provided that:
(a) an liabilities of the Partnership to persons other than Partners
have been paid, or in good faith determination of the Managing General
Partners, there remains property of the Partnership sufficient to pay them;
and
(b) the Managing General Partners cause this Certificate and Agreement
to be amended to reflect a reduction in contributions.
Each Limited Partner, by becoming a Limited Partner, consents to any such pro
rata distribution theretofor or thereafter made in accordance with such
provisions. Each General Partner, by becoming a General Partner, consents to any
such pro rata distribution theretofore or thereafter made, authorized in
accordance with Section 8.4.
10.3 Removal of Investment Advisor. The first investment advisor for the
Partnership ("Manager") will manage the Partnership's portfolio securities
pursuant to an agreement which includes a provision permitting its termination
without penalty by either party on 60 days' written notice. If Manager or an
affiliate is removed or otherwise ceases to act as the Partnership's investment
advisor, while acting as a Non-Managing General Partner, such Non-Managing
General Partner(s) shall have the right to withdraw from the Partnership and to
receive the full amount of the capital contributed with respect to its Shares;
provided, however, that neither the Non-Managing General Partners's withdrawal
from the Partnership nor the return of its capital contribution may be effective
until the earlier of: (a) 24 months from the notice of such withdrawal, or (b)
the date a successor corporate General Partner is elected.
ARTICLE 11
DISTRIBUTION ON DISSOLUTION
11.1 Winding up. Upon the dissolution and termination of the Partnership,
the Managing General Partners or trustee, if one is appointed, shall proceed to
wind up the affairs of the Partnership and to liquidate. The Partners shall
continue to share profits and losses during liquidation in the same manner as
before dissolution. The proceeds from such liquidation of the Partnership assets
shall be applied and distributed in the following order of priority:
(a) To the payment of debts and liabilities of the Partnership (other
than any loans or advances which may have been made by any of the Partners
to the Partnership) and the expenses of liquidation.
(b) To the setting up of any reserve which the Managing General
Partners or trustee may deem reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Partnership arising out of or
in connection with the Partnership. Such reserve shall be paid over by the
Managing General Partners or trustee to a commercial bank or trust company
to act as escrow agent or to such other person as may be authorized for
such purpose by the 1940 Act. Any such escrow agent shall hold such
reserves for payment of any of the aforementioned contingencies, and,
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at the expiration of such period as the Managing General Partners or trustee
designate, to distribute the balance thereafter remaining in the manner
hereinafter provided.
(c) To the repayment of any loans or advances that may have been made
by any of the Partners to the Partnership, but if the amount available for
such repayment shall be insufficient, then pro rata on account thereof.
(d) Distribution of the remainder pro rata among the General and
Limited Partners in proportion to the number of Shares of the Partnership
held by each.
11.2 Accountants' Statement. Each of the Partners shall be furnished with a
statement prepared by the Partnership's independent certified public accountants
which shall set forth the assets and liabilities of the Partnership as at the
date of complete liquidation. When the Managing General Partners have complied
with the foregoing distribution plan (including payment over to the escrow
agent), the Limited Partners shall cease to be such, and the Managing General
Partners shall execute, acknowledge, and cause to be filed a Certificate of
Cancellation of the Partnership.
11.3 Gains or Losses in Process of Liquidation. Any gain or loss in
disposition of Partnership properties in the process of liquidation shall be
credited or charged among the outstanding Shares of Partnership interest in the
proportion that a Partner's Shares (including, fractional Shares) bears to the
total number of Shares of Partnership interest outstanding.
ARTICLE 12
FUND DOCUMENTATION; AMENDMENT OF CERTIFICATE
AND AGREEMENT; POWER OF ATTORNEY
12.1 Certificate and Agreement and Other Documentation. This Certificate
and Agreement shall constitute a Certificate of Limited Partnership within the
meaning of the Partnership Act, and the General Partners shall promptly cause
it to be filed and recorded in accordance with the Partnership Act in the
County of Los Angeles, State of California, the location of the Partnership's
principal office, and to the extent required by local law, in the appropriate
place in each state in which the Partnership may hereafter establish a place of
business. The Managing General Partners shall also promptly cause to be filed,
recorded and published such Statements of Fictitious Business Name and other
notices, certificates, statements or other instruments required by a provision
of any applicable law of the United States or any state or other jurisdiction
which governs the formation of the Partnership or the conduct of its business
from time to time.
12.2 Events Requiring Amendment of Certificate and Agreement. This
Certificate and Agreement shall be promptly amended, as hereafter provided,
upon the occurrence of any of the following events:
(a) there is a change in the name of the Partnership or in the amount
or character of the contribution of any Limited Partner;
(b) a person is substituted as a Limited Partner;
(c) an additional Limited Partner is admitted;
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(d) a Limited Partner Withdraws;
(e) a Person is admitted as a General Partner;
(f) a General Partner retires, dies, becomes insane, is removed or
fails to be reelected and the business is continued as permitted by Section
8.9;
(g) there is a change in the character of the business of the
Partnership;
(h) there is a false or erroneous statement in this Certificate and
Agreement;
(i) there is a change in the time as stated in this Certificate and
Agreement for the dissolution of the Partnership or for the return of a
contribution; or
(j) the Partners desire to make a change in any other statement in
this Certificate and Agreement in order that it shall accurately represent
the agreement among them.
12.3 Power of Attorney. With respect to this Partnership or any successor
thereto, each of the Limited Partners hereby makes, constitutes and appoints the
initial Managing General Partners of the Partnership listed In Schedule "A" to
this Certificate and Agreement and any of them and each person who shall
hereafter become a Managing General Partner, and additionally appoints the
transfer agent and any successor transfer agent employed by the Partnership
solely with respect to the matters specified herein, with full power of
substitution, the true and lawful attorney of, and in the name, place and stead
of such Limited Partner, with the power from time to time to execute,
acknowledge, make, swear to, verify, deliver, record, file and/or publish: (a) a
Certificate and Agreement of Limited Partnership or counterpart thereof under
the laws of the State of California or any other jurisdiction, any amendment to
any such Certificate and Agreement of Limited Partnership (including, but not
limited to, amendments reflecting the withdrawal of any Partner or the return,
in whole or in part, of the contribution of any Partner or amendments reflecting
the addition or substitution of Limited Partners), or any other document
required from time to time to admit such Limited Partner, to effect his
substitution as a Limited Partner, or to effect the substitution of the Limited
Partner's assignee as a Limited Partner as to any or all Shares of Limited
Partnership interest of the Limited Partner; (b) any amendment to the
Certificate and Agreement of Limited Partnership or counterpart thereof or any
other document required to reflect any action of the Partners provided for in
the Certificate and Agreement of Limited Partnership whether or not such
Limited Partner voted in favor of or otherwise consented to such action; and (c)
any other instrument, certificate or document as may be required by any
regulatory agency, the laws of the United States, any state or any other
jurisdiction in which the Partnership is doing or intends to do business or
which the Managing General Partners deem advisable to file or record, provided
such instrument, certificate or document is in accordance with the terms of the
Certificate and Agreement as then in effect.
Each of the General Partners hereby makes, constitutes and appoints the
initial Managing General Partners of the Partnership listed in Schedule "A" to
this certificate and Agreement and any of them and each person who shall
hereafter become a Managing General Partner, and additionally appoints the
transfer agent and any successor transfer agent employed by the Partnership
solely with respect to the matters specified herein, with full power of
substitution, the true and lawful attorney of, and in the name, place and stead
of such General Partner, with the powers from time to time to execute,
acknowledge, make, swear to, verify, deliver, record, file and/or publish the
documents specified or contemplated by subparts (a), (b) and (c) of the
preceding paragraph.
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Each of the Limited Partners is aware that the terms of the Certificate
and Agreement permit certain amendments of the Certificate and Agreement to be
effected and certain other actions to be taken or omitted by or with respect to
the Partnership, in each case with the approval of less than all the Limited.
Partners, provided that a specified percentage of the Partners shall have voted
in favor of or otherwise consented to such action. Such actions include, without
limitation, admission of new General Partners duly elected at meetings of the
Partners. In the event (i) an amendment of the Certificate and Agreement is
proposed or an action is proposed to be taken or omitted by or with respect to
the Partnership which requires, under the terms of the Certificate and
Agreement, the approval of a specified percentage in interest (but less than
all) of the Partners, (ii) Partners holding the percentage of Partnership
interests in the Partnership specified in the Partnership Certificate and
Agreement as being required for such amendment or action have approved such
amendment or action in the manner contemplated by the Certificate and Agreement,
and (iii) a Limited Partner has failed or refused to approve such amendment or
action (hereinafter referred to as a non-consenting Limited Partner), each
non-consenting Limited Partner agrees that each special attorney specified
above, with full power of substitution, is hereby authorized and powered to
execute, acknowledge, make, swear to, verify, deliver, record, file and/or
publish for and in behalf of such non-consenting Limited Partner, and in his
name, place and stead, any and all instruments and documents which may be
necessary or appropriate to permit such amendment to be lawfully made or action
lawfully taken or omitted. Each consenting and non-consenting Limited Partner is
fully aware that he and each other Limited Partner have executed this special
power of attorney, and that each Limited Partner will rely on the effectiveness
of such powers with a view to the orderly administration of the Partnership's
affairs.
The foregoing grant of authority (i) is a Special Power of Attorney coupled
with an interest and as such shall be irrevocable and shall survive the death or
insanity (or, in the case of a Limited Partner that is a corporation,
association, partnership, joint venture or trust, shall survive the merger
dissolution or other termination of the existence) of the Limited Partner, (ii)
may be exercised for the Limited Partner by a facsimile signature of any
Managing General Partner of the Partnership or by listing all of the Limited
Partners, including such Limited Partner, and executing any instrument with a
single signature of any Managing General Partner acting as attorney-in-fact for
all of them, (iii) shall survive the assignment by the Limited Partner of the
whole or any portion of his interest for any purpose until the substitution is
effective, except that where the assignee of the whole thereof has furnished a
Power of Attorney and has been approved by the Managing General Partners for
admission to the Partnership as a Substituted Limited Partner, this Power of
Attorney shall survive such assignment for the sole purpose of enabling a
Managing General Partner to execute, acknowledge and file any instrument
necessary to effect such substitution and shall thereafter terminate; and (iv)
shall survive the redemption by the Limited Partner of the whole or any portion
of his interest as provided in Section 10.1 hereof provided that where all of
such Limited Partner's interest is so redeemed, the power of attorney shall
survive such redemption for the sole purpose of enabling a Managing General
Partner to execute, acknowledge and file any instrument necessary to effect the
deletion of such person as a Limited Partner.
12.4 Power of Attorney by Substituted or Additional Limited Partners. Under
Section 9.5 hereof, an assignee of a Limited Partner shall be required to
execute a similar power of attorney as that set forth in Section 12.3 hereof as
a condition of his admission as a Substituted Limited Partner, and the Managing
General Partners shall require an additional Limited Partner to execute a
similar power of attorney as a condition of his admission.
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12.5 Amendments Requiring Signature by Less than All Limited Partners. Any
amendment to this Certificate and Agreement substituting a Limited Partner or
adding a General Partner may be signed by any Managing General Partner and by
the person to be substituted as a Limited Partner or added as a General Partner,
and shall also be signed by the assigning Limited Partner, in the case of a
substitution. Any amendment reflecting the determination of the remaining
Managing General Partners to continue the business of the Partnership upon the
retirement, death or insanity of a Managing General Partner need be signed by
only one Managing General Partner. The execution of any such amendment on
behalf of a Limited Partner or any proposed substituted Limited Partner may be
effected by this attorney-in-fact.
ARTICLE 13
MISCELLANEOUS MATTERS
13.1 Independent Activities. Each Partner reserves the right to conduct
activities similar to those conducted by the Partnership, including buying or
selling securities for his own account or for others.
13.2 Interested Partners. Subject to the provisions of Section 10 of the
1940 Act, the fact that a General Partner or one or more of the Limited
Partners is directly or indirectly interested in or connected with any company
or person with which or with whom the Partnership may have dealings, including
but not limited to the payment of brokerage commissions and other expenses,
shall not preclude such dealings or make them void or voidable, and the
Partnership or any of the Partners shall not have any rights in or to such
dealings or any profits derived therefrom.
13.3 Tax Election.
(a) No election shall be made by any Partner to be excluded from the
application of the provisions of Subchapter K of the Code, or from any
similar provisions of state tax laws, and no such election shall be made by
the Partnership.
(b) In the event of the transfer of a Partners interest, or the death
of a Partner, or the distribution by redemption or otherwise of any
Partnership property to any Partner, the Managing General Partners, on
behalf of the Partnership, may, at their option, file an election, in
accordance with applicable Treasury Regulations, to cause the basis of the
Partnership's property to be adjusted for Federal income tax purposes as
provided in Sections 734, 743 and 754 of the Code, as than in effect.
13.4 Reimbursement and Indemnification. Managing General Partners will be
reimbursed by the Partnership for all reasonable out-of-pocket expenses incurred
in organizing the Partnership and in
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performing their duties hereunder. The Partnership shall indemnify each General
Partner (including officers and/or directors of a corporate General Partner and
including former General Partners who have not ceased to be liable as General
Partners under the Partnership Act) against judgments, fines, amounts paid in
settlement, and expenses (including attorneys' fees) reasonably incurred by him
in any civil, criminal or investigative proceeding in which be is involved or
threatened to be involved by reason of his being a General Partner of the
Partnership, provided that he acted in good faith, within what he reasonably
believed to be the scope of his authority, and for a purpose which he reasonably
believed to be within the scope of his authority, and for a purpose which he
reasonably believed to be in the best interests of the Partnership or the
Limited Partners. To the extent that a General Partner has been successful on
the merits or otherwise in defense of any such proceeding or in defense of any
claim or matter therein, he shall be deemed to have acted in good faith and in a
manner he believed to be in the best interests of the Partnership or the Limited
Partners. The determination under any other circumstances as to whether a
General Partner acted in good faith, within what he reasonably believed to be
the scope of his authority, and for a purpose which he reasonably believed to be
in the best interests of the Partnership or the Limited Partners, shall be made
by action of the General Partners who were not parties to such proceedings, or
by independent legal counsel selected by the General Partners (who may be the
regular counsel for the Partnership) in a written opinion. No General Partner
shall be indemnified under this provision against any liability to the
Partnership or its Partners to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. The indemnification provided
hereunder shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any applicable statute, agreement, vote of the
General Partners or Limited Partners, or otherwise.
13.5 Insurance. The General Partners shall procure and maintain insurance
on the Partnership assets and concerning the Partnership's activities
(including actions taken by the General Partners) in an amount and covering
such risks as may be appropriate in the judgment of the Managing, General
Partners, including without limitation insurance against any loss which the
Partnership may have incurred as a result of an unauthorized act of a General
Partner which was not ratified by the Limited Partners pursuant to the
Partnership Act.
13.6 Custodian. All assets of the Partnership shall be held by a Custodian
meeting the requirements of the 1940 Act, and may be registered in the name of
the Partnership or such Custodian or its qualified nominee. The terms of such
Custodian Agreement shall be determined by the Managing General Partners, which
terms shall be in accordance with the provisions of the 1940 Act. Upon the
resignation or inability of the Custodian to serve, the Managing General
Partners shall: (a) use their best efforts to obtain a qualified successor, and
(b) require the cash and securities of the Partnership held by such Custodian to
be delivered directly to the successor. In the event that no qualified
successor can be found, the Managing General Partners shall, before permitting
delivery of such cash and securities to anyone other than a qualified successor,
call a special meeting of the Partnership for the purpose of determining an
acceptable custodian arrangement. Upon such resignation of inability to serve,
such Custodian shall deliver any assets of the Partnership held by it to a
qualified bank or trust company selected by it, such assets to be held subject
to the terms of the agreement which governed such retiring Custodian, pending
action by the Partnership as set forth in this Section. Nothing herein
contained, however, shall prevent the termination of any agreement between the
Partnership and any such Custodian by the Partnership at the discretion of the
Managing General Partners.
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13.7 Notices. All notices required or permitted to be given under this
Certificate and Agreement shall be in writing and shall be given to the parties
at the addresses set forth in Schedule "A" to this Certificate and Agreement
and to the Partnership at its principal office, or at such other address as any
of the parties may hereafter specify in writing to the Partnership.
13.8 Captions. Paragraph titles or captions contained in this Certificate
and Agreement are inserted only as a matter of convenience and for reference and
in no way define, limit, extend or describe the scope of this Certificate and
Agreement or the intent of any provision hereof.
13.9 Variations in Pronouns. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, singular or plural, as the
identity of the person or persons may require.
13.10 Certificate and Agreement in Counterparts. This Certificate and
Agreement may be executed in several counterparts, and as so executed, shall
constitute one Certificate and Agreement, binding on all of the parties hereto,
notwithstanding that all of the parties are not signatory to the original or the
same counterpart.
13.11 Benefit. Except as herein otherwise provided to the contrary, this
Certificate and Agreement shall be binding upon and inure to the benefit of the
parties signatory hereto, and their respective heirs executors, guardians,
representatives, successors and assigns.
13.12 Nonrecourse Creditors. No creditor who makes a nonrecourse loan to
the Partnership will have or acquire at any time, as a result of making the
loan, any direct or indirect interest in the Partnership other than as a
secured creditor.
13.13 Agent for Service of Process. The Managing General Partners shall
take whatever action is necessary to designate an agent at the Partnership's
office in California or such other persons in other jurisdictions as required by
law upon whom service of process upon the Partnership may lawfully be made.
13.14 Principles of Construction; Severability. This Certificate and
Agreement shall be construed to the maximum extent possible to comply with all
of the terms and conditions of the 1940 Act and the Partnership Act. Unless the
Context otherwise requires, the terms utilized herein shall have the respective
meanings attributable thereto under such Acts. If, nevertheless, it shall be
determined by a court of competent jurisdiction that any provision or wording of
this Certificate and Agreement shall be invalid or unenforceable under the 1940
Act, the Partnership Act or other applicable law, such invalidity, or
unenforceability shall not invalidate the entire Certificate and Agreement. In
that case, the Certificate and Agreement shall be construed so as to limit any
term or provision so as to make it enforceable or valid within the requirements
of such law, and in the event such term or provision cannot be so limited, this
Certificate and Agreement shall be construed to omit such invalid or
unenforceable provision.
13.15 California Law. It is the intention of the parties that the internal
laws of the State of California shall govern the validity of this Certificate
and Agreement, the construction of its terms and the interpretation of the
rights and duties of the parties.
13.16 Integrated Agreement. This Certificate and Agreement constitutes the
entire understanding and agreement among the parties hereto with respect to the
subject matter hereof, and there are no agreements, understandings,
restrictions, representations or warranties among the parties other than those
set forth herein.
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