Exhibit 3.1
UNITED STATES OIL FUND, 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 [NAME OF INITIAL LIMITED PARTNER TO BE
INSERTED PRIOR TO EFFECTIVENESS], 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 this Agreement and who is shown as
such on the books and records of the Partnership.
1.4 "Affiliate" shall mean, when used with reference to a specified
Person, (i) any Person who directly or indirectly through one or more
intermediaries controls or is controlled by or is under common control with the
specified Person or (ii) any Person that is an officer of, partner in, or
trustee of, or serves in a similar capacity with respect to, the specified
Person or of which the specified person is an officer, partner or trustee, or
with respect to which the specified Person serves in a similar capacity.
1.5 "Assignee" shall mean a Record Holder that has not been admitted to
the Partnership as a Substituted Limited Partner.
1.6 "Agreement" shall mean this 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 ultimate beneficial owner of Units
held by a nominee which has furnished the identity of the Beneficial Owner in
accordance with Section 6031(c) of the Code (or any other method acceptable to
the General Partner in its sole discretion).
1.9 "Capital Account" shall mean an account established on the books and
records of the Partnership for each Partner as set forth in this Agreement.
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 B 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 investments of
Partnership funds pending utilization, and (iv) proceeds from any Capital
Transaction), less the sum of the following: (x) all amounts expended by the
Partnership pursuant to this Agreement in such period and (y) such working
capital or reserves or other amounts as the General Partner reasonably deems to
be necessary or appropriate for the proper operation of the Partnership's
business or its winding up and liquidation. The General Partner in its sole
discretion may from time to time declare other funds of the Partnership to be
Distributable Cash.
1.18 "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 this Agreement or an assignee who is admitted as a Limited Partner)
at the time of reference thereto, in such Person's capacity as a limited partner
of the Partnership.
1.20 "Management Fee" shall mean the management fee paid to the General
Partner pursuant to this Agreement.
1.21 "Net Asset Value" or "NAV" shall mean the current market value of the
Partnership's total assets, less any liabilities, as reasonably determined by
the General Partner or its designee.
1.22 "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 "Partnership Securities" shall mean any additional Units, options,
rights, warrants or appreciation rights relating thereto, or any other type of
equity security that the Partnership may lawfully issue, any unsecured or
secured debt obligations of the Partnership
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or debt obligations of the Partnership convertible into any class or series of
equity securities of the Partnership.
1.28 "Person" shall mean any natural person, partnership, limited
partnership, trust, estate, corporation, association, custodian, nominee or any
other individual or entity in their own or any representative capacity.
1.29 "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
(b) the Net Asset Value as of the Valuation Time on the Valuation Date
immediately preceding the commencement of such Accounting Period,
adjusted as deemed appropriate by the General Partner to reflect any
Capital Contributions, redemptions, withdrawals, distributions, or other
events occurring or accounted for during such Accounting Period (including
any allocation of Profit or Loss to a Redeeming Partner pursuant to
Article 4.3.2 with respect to such Accounting Period).
If the amount determined pursuant to the preceding sentence is a positive
number, such amount shall be the "Profit" for the Accounting Period and if such
amount is a negative number, such amount shall be the "Loss" for the Accounting
Period.
1.30 "Prospectus" shall mean the United States Oil Fund, LP Prospectus,
dated _______, 2005, as the same may have been amended or supplemented, used in
connection with the offer and sale of interests.
1.31 "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.
1.32 "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.
1.33 "Redeemable Units" shall mean any Units for which a redemption notice
has been given, and has not been withdrawn.
1.34 "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
1.35 "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.
1.36 "Substituted Limited Partner" shall mean a Person who is admitted as
a Limited Partner to the Partnership pursuant to Article 11.2 in place of and
with all the rights of a Limited Partner and who is shown as a Limited Partner
on the books and records of the Partnership.
1.37 "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 within the meaning of the Code, or an Internal Revenue Service Form
W-8BEN or other applicable form in the case of a Limited Partner that is not a
U.S. person.
1.38 "Transfer Agent" shall mean Xxxxx Brothers Xxxxxxxx & Co. or such
bank, trust company or other Person (including, without limitation, the General
Partner or one of its Affiliates) as shall be appointed from time to time by the
Partnership to act as registrar and transfer agent for the Units or any
applicable Partnership Securities.
1.39 "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.
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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 United States Oil Fund, LP;
however, the business of the Partnership may be conducted, upon compliance with
all applicable laws, under any other name designated in writing by the General
Partner to the Limited Partners.
2.3 The Partnership's principal place of business shall be located at 0000
Xxxxxx Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx, 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 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, County of New
Castle. The Partnership may maintain such other offices at such other places, as
the General Partner deem advisable.
2.4 The Partnership is organized within the goal of having acquire its own
and dispose of. To achieve this goal futures contracts for crude oil and/or
other petroleum based fuels on other U.S. and foreign exchanges (collectively,
"Oil Futures Contracts") and other oil interests such as cash settled options on
Oil Futures Contracts, forward contracts for oil, and over-the-counter
transactions that are based on the price of oil, other petroleum based fuels,
Oil Futures Contracts and indices based on the foregoing and short-term United
States government securities, cash-equivalents, or other short-term debt
instruments deemed appropriate by the General Partner, and conducting any other
business or duties authorized by this Agreement, as well as any activities
incidental or necessary to carry out the business and duties set forth in this
Agreement. Net Asset Value of each of its Units correlate to the spot price of
West Texas Intermediate crude oil at Cushing, Oklahoma.
2.5 The term of the Partnership shall be from the date of its formation in
perpetuity, unless earlier terminated in accordance with the terms of this
Agreement.
2.6 The General Partner shall execute, file and publish all such
certificates, notices, statements or other instruments required by law for the
formation or operation of a limited partnership in all jurisdictions where the
Partnership may elect to do business. 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.
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3.1.1 The name of the General Partner is Victoria Bay Asset Management,
LLC, which maintains its principal business office at 0000 Xxxxxx Xxx Xxxxxxx,
Xxxxx 000, Xxxxxxx, XX 00000.
3.1.2 In consideration of management and administrative services rendered
by the General Partner, the Partnership shall pay the Management Fee to the
General Partner (or such other person or entity designated by the General
Partner) including the payment of expenses in the ordinary course of business.
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 ninety-eight percent (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. The General Partner may but shall not be required to make Capital
Contributions to the Partnership on or after the date hereof. If the General
Partner does make a Capital Contribution to the Partnership on or after the date
hereof, it shall be issued Units based on the same terms and conditions
applicable to the purchase of a Creation Basket under Article 16 hereof.
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.
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 Limited Partners, the General
Partner shall not take any action or refuse to take any reasonable action the
effect of which, if taken or not taken, as the case may be, would be to cause
the Partnership, to the extent it would materially and adversely affect the
Limited Partners, to be taxable as a corporation for federal income tax
purposes.
3.1.7 Notwithstanding any other provision of this Agreement, the General
Partner is not authorized to institute or initiate on behalf of, or otherwise
cause, the Partnership to:
(a) make a general assignment for the benefit of creditors;
(b) file a voluntary bankruptcy petition; or
(c) file a petition seeking for the Partnership a reorganization,
arrangement, composition, readjustment liquidation, dissolution
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or similar relief under any law.
3.2 Issuance of Units. Units in the Partnership will only be issued in a
Creation Basket or whole number multiples thereof.
3.3 Initial Limited Partner. The name, business address and Capital
Contribution of the Initial Limited Partner are [INSERT INFORMATION PRIOR TO
EFFECTIVENESS]. The Initial Limited Partner shall purchase the initial Creation
Basket at an initial offering price per Unit equal to the closing price of
near-month oil futures contracts for light, sweet crude oil as listed on the New
York Mercantile Exchange on the last business date prior to the effective date.
3.4 Except as otherwise provided in this Agreement, 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
4.1 Capital Accounts. There shall be established on the books and records
of the Partnership for each Partner (or Beneficial Owner in the case of Units
held by a nominee) a capital account (a "Capital Account"). It is intended that
each Partner's Capital Account shall be maintained at all times in a manner
consistent with Section 704 of the Code and applicable Treasury regulations
thereunder, and that the provisions hereof relating to the Capital Accounts
shall be interpreted in a manner consistent therewith. For each Accounting
Period, the Capital Account of each Member shall be:
(i) credited with the amount of any Capital Contributions made by
such Partner during such Accounting Period;
(ii) credited with any allocation of Profit made to such Partner for
such Accounting Period;
(iii) debited with any allocation of Loss made to such Partners for
such Accounting Period; and
(iv) debited with the amount of cash paid to such Partner as an
amount withdrawn or distributed to such Partner during such Accounting Period,
or, in the case of any payment of a withdrawal or distribution in kind, the fair
value of the property paid or distributed during such Accounting Period.
4.1.1 For any Accounting Period in which additional Units are issued or
redeemed for cash or other property, the General Partner shall, in accordance
with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), adjust the Capital
Accounts of all Partners and the carrying value of each Partnership asset upward
or downward to reflect any unrealized gain or unrealized loss attributable to
each such Partnership asset, as if such unrealized gain or unrealized loss had
been recognized on an actual sale of the asset and had been allocated to the
Partners at such time pursuant to Article 4.2 of this Agreement in the same
manner as any item of gain or loss actually recognized during such period would
have been allocated.
4.1.2 To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required,
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such item of gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Treasury
Regulations.
4.2 Allocation of Profit or Loss. Profit or Loss for an Accounting Period
shall be allocated among the Partners in proportion to the number of Units each
Partner holds as of the Close of Business on the last Business Day of such
Accounting Period. The General Partner may revise, alter or otherwise modify
this method of allocation to the extent it deems necessary to comply with the
requirements of Section 704 or Section 706 of the Code and Treasury Regulations
or administrative rulings thereunder.
4.3 Allocations for Tax Purposes
4.3.1 Except as otherwise provided in this Agreement, for each fiscal year
of the Partnership, items of income, deduction, gain, loss, and credit
recognized by the Partnership for federal income tax purposes shall be allocated
among the Partners in a manner that
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equitably reflects the amounts credited or debited to each Partner's Capital
Account for each Accounting Period during such fiscal year. Allocations under
this Article 4.3 shall be made by the General Partner in accordance with the
principles of Sections 704(b) and 704(c) of the Code and in conformity with
applicable Treasury Regulations promulgated thereunder (including, without
limitation, Treasury Regulations Sections 1.704-1(b)(2)(iv)(f),
1.704-1(b)(4)(i), and 1.704-3(e)).
4.3.2 Notwithstanding anything else contained in this Article 4, if any
Partner has a deficit Capital Account for any Accounting Period as a result of
any adjustment of the type described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d) (6), then the Partnership's
income and gain shall be specially allocated to such Partner in an amount and
manner sufficient to eliminate such deficit as quickly as possible. Any special
allocation of items of income or gain pursuant to this Article 4.3.2 shall be
taken into account in computing subsequent allocations pursuant to this Article
4 so that the cumulative net amount of all items allocated to each Partner
shall, to the extent possible, be equal to the amount that would have been
allocated to such Partner if there had never been any allocation pursuant to the
first sentence of this Article 4.3.2.
4.3.3 In accordance with Section 704(c) of the Code (and the principles
thereof) and the Treasury Regulations issued with respect thereto, income, gain,
loss and deduction with respect to any property contributed to the capital of
the Company and with respect to assets of the Company that have been revalued
under Treasury Regulations Sections 1.704-1(b)(2)(iv)(f), solely for tax
purposes, shall be allocated among the Partners so as to take into account any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its value as of the time of the contribution or
revaluation of Partnership assets, including, but not limited to, special
allocations to a contributing Partner that are required under Code Section
704(c) (and the principles thereof) to be made upon distributions of such
property to any non-contributing Partner.
4.3.4 Allocations that would otherwise be made to a Limited Partner under
the provisions of this Article 4 shall instead be made to the Beneficial Owner
of Units held by a nominee.
4.4 In applying the provisions of this Article 4, the General Partner is
authorized to utilize such reasonable accounting conventions, valuation methods
and assumptions as the General Partner shall determine to be appropriate and in
compliance with the Code and applicable Treasury Regulations. The General
Partner may amend the provisions of this Agreement to the extent it determines
to be necessary to comply with the Code and Treasury Regulations.
Article 5
RECORDS AND ACCOUNTING; REPORTS
5.1 Records and Accounting. The Partnership will keep proper books of
record and account of the Partnership at its office located in 0000 Xxxxxx Xxx
Xxxxxxx, Xxxxx 000, Xxxxxxx, 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
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Partner as fairly presenting the financial position and results of operations of
the partnership during the period covered by the report. The report shall also
contain a description of any material event regarding the business of the
Partnership during the period covered by the report.
5.4 Monthly Reports. Within 30 days after the after the end of each month,
the General Partner shall cause to be delivered to each Person who was a Partner
at any time during the month then ended, a monthly report containing an account
statement, which will include a statement of income (loss) and a statement of
changes in NAV, for the prescribed period. In addition, the account statement
will disclose any material business dealings between the Partnership, General
Partner, commodity trading advisor (if any), futures commission merchant, or the
principals thereof that previously have not been disclosed in the Partnership's
Prospectus or any amendment thereto, other account statements or annual reports.
5.5 Tax Information. The General Partner shall use its best efforts to
prepare and to transmit a U.S. federal income tax form K-1 for each Partner,
Assignee, or Beneficial Owner 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.
5.6 Tax Returns. The General Partner shall cause income tax returns of the
Partnership to be prepared and timely filed with the appropriate authorities.
5.7 Tax Matters Partner. The General Partner is hereby designated as the
Partnership's "Tax Matters Partner," as defined under Section 6231(a)(7) of the
Code. The General Partner is specifically directed and authorized to take
whatever steps the General Partner, in its discretion, deems necessary or
desirable to perfect such designation, including filing any forms or documents
with the U.S. Internal Revenue Service and taking such other action as may from
time to time be required under U.S. Treasury regulations. Any Partner shall have
the right to participate in any administrative proceedings relating to the
determination of Partnership items at the Partnership level. Expenses of such
administrative proceedings undertaken by the Tax Matters Partner shall be
expenses of the Partnership. Each Partner who elects to participate in such
proceedings shall be responsible for any expenses incurred by such Partner in
connection with such participation. The cost of any resulting audits or
adjustments of a Partner's tax return shall be borne solely by the affected
Partner. In the event of any audit, investigation, settlement or review, for
which the General Partner is carrying out the responsibilities of Tax Matters
Partner, the General Partner shall keep the Partners reasonably apprised of the
status and course of such audit, investigation, settlement or review and shall
forward copies of all written communications from or to any regulatory,
investigative or judicial authority with regard thereto.
Article 6
FISCAL AFFAIRS
6.1 Fiscal Year. The fiscal year of the Partnership shall be the calendar
year.
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 there from shall be made upon such signatures as the General Partner
may designate.
6.3 Accounting Decisions. All decisions as to accounting principles,
except as specifically provided to the contrary herein, shall be made by the
General Partner.
6.4 Tax Elections. The General Partner shall, from time to time, make such
tax elections as it deems necessary or desirable in its sole discretion to carry
out the business of the Partnership or the purposes of this Agreement.
Notwithstanding the foregoing, the General Partner shall make a timely election
under Section 754 of the Code.
6.5 Title to the Partnership assets shall be deemed to be owned by the
Partnership as an entity, and no Partner or Assignee, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine. The General Partner hereby declares and
warrants that any Partnership assets for which record title is held in the name
of the General Partner shall be held by the General Partner for the exclusive
use and benefit of the Partnership in accordance with the
8
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 partner as provided in the Act and as otherwise provided by law. Except
as otherwise expressly provided in this Agreement, the General Partner is hereby
granted the right, power and authority to do on behalf of the Partnership all
things which, in its sole judgment, are necessary, proper or desirable to carry
out the aforementioned duties and responsibilities, including but not limited
to, the right, power and authority from time to time to do the following:
(a) the making of any expenditures, the lending or borrowing of money, the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness and the incurring of any
other obligations and the securing of same by mortgage, deed of trust or other
lien or encumbrance;
(b) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having jurisdiction
over the business or assets of the Partnership;
(c) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the Partnership, or the
merger or other combination of the partnership with or into another Person (the
matters described in this clause (c) being subject, however, to any prior
approval that may be required 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 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;
9
(l) the entering into of listing agreements with the American Stock
Exchange and any other securities exchange and the delisting of some or all of
the Units from, or requesting that trading be suspended on, any such exchange;
and
(m) the purchase, sale or other acquisition or disposition of Units.
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.
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 has a responsibility to Limited Partners to
exercise good faith and fairness in all dealings. In the event that a Limited
Partner believes that the General Partner has violated its fiduciary duty to the
Limited Partners, he may seek legal relief individually or on behalf of the
Partnership under applicable laws, including under the Act and under securities
and commodities laws, to recover damages from or require an accounting by the
General Partner. Limited Partners should be aware that performance by the
General Partner of its fiduciary duty is measured by the terms of this Agreement
as well as applicable law. Limited Partners may also have the right, subject to
applicable procedural and jurisdictional requirements, to bring class actions in
federal court to enforce their rights under the federal securities laws and the
rules and regulations promulgated thereunder by the Securities and Exchange
Commission ("SEC"). Limited Partners who have suffered losses in connection with
the purchase or sale of the Units may be able to recover such losses from the
General Partner where the losses result from a violation by the General Partner
of the federal securities laws. State securities laws may also provide certain
remedies to Limited Partners. Limited partners are afforded certain rights to
institute reparations proceedings under the Commodity Exchange Act for
violations of the Commodity Exchange Act or of any rule, regulation or order of
the Commodities Futures Trading Commission ("CFTC") by the General Partner.
7.6 Indemnification
7.6.1 Notwithstanding any other provision of this Agreement, neither a
General Partner nor any employee or other agent of the Partnership nor any
officer, director, stockholder, partner, employee or agent of a General Partner
(a "Protected Person") shall be liable to any Partner or the Partnership for any
mistake of judgment or for any action or inaction taken, nor for any losses due
to any mistake of judgment or to any action or inaction or to the negligence,
dishonesty or bad faith of any officer, 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.
Notwithstanding any of the foregoing to the contrary, the provisions of this
Article 7.6.1 and of Article 7.6.2 hereof shall not be
10
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 Article 7.6.1 and
of Article 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 disinterested person or persons shall not prevent the
recovery from persons as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted in good faith
in the reasonable belief that such Covered Person's action was in the best
interests of the Partnership or to have been liable to the Partnership or its
Limited Partners by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such Covered
Person's office.
The right of indemnification hereby provided shall not be exclusive of or
affect any other rights to which any such Covered Person may be entitled. As
used in this Article 7.6.2, an "interested Covered Person" is one against whom
the action, suit or other proceeding on the same or similar grounds is then or
has been pending and a "disinterested person" is a person against whom 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 Article 7.6.2 shall affect any rights to indemnification to
which personnel of a General Partner, other than directors and officers, and
other persons may be entitled by contract or otherwise under law, nor the power
of the Partnership to purchase and maintain liability insurance on behalf of any
such person.
Nothing in this Article 7.6.2 shall be construed to subject any Covered
Person to any liability to which he 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 hereby.
7.7 Resolutions of Conflicts of Interest; Standard of Care.
7.7.1 Unless otherwise expressly provided in this Agreement or any other
agreement contemplated hereby, whenever a conflict of interest exists or arises
between the General Partner on the one hand, and the Partnership or any Limited
Partner, on the other hand, any resolution or course of action by the General
Partner in respect of such conflict of interest shall be permitted and deemed
approved
11
by all Partners and shall not constitute a breach of this Agreement or of any
agreement contemplated hereby or of a duty stated or implied by law or equity,
if the resolution or course of action is, or by operation of this Agreement is
deemed to be, fair and reasonable to the Partnership. If a dispute arises, it
will be resolved through negotiations or by a court of competent jurisdiction.
Any resolution is deemed to be fair and reasonable to the Partnership if the
resolution is:
- approved by the audit committee of the Partnership (the "Audit
Committee"), although no party is obligated to seek such
approval and the General Partner may adopt a resolution or
course of action that has not received such approval;
- on terms no less favorable to the Limited Partners than those
generally being provided to or available from unrelated third
parties; or
- fair to the Limited Partners, taking into account the totality
of the relationships of the parties involved including other
transactions that may be particularly favorable or
advantageous to the Limited Partners.
7.7.2 Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner is permitted or required to make a decision
(i) in its discretion or under a grant of similar authority or latitude, the
General Partner shall be entitled to the extent permitted by applicable law, to
consider only such interest and factors as it desires and shall have no duty or
obligation to give any consideration to any interest of or factors affecting the
partnership or the Limited Partners, or (ii) in its good faith or under another
express standard, the General Partner shall act under such express standard and
except as required by applicable law, shall not be subject to any other
different standards imposed 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, director, employee, Affiliate or
other person holding a legal or beneficial interest in any entity which is a
Partner, may engage in or possess an interest in other business ventures of
every nature and description, independently or with others, whether such
ventures are competitive with the Partnership or otherwise; and, neither the
Partnership nor the Partners shall have any right by virtue of this Agreement in
or to such independent ventures or to the income or profits derived there from.
7.10 Contracts with the General Partner or its Affiliates. The General
Partner may, on behalf of the Partnership, enter into contracts with any
Affiliate. The validity of any transaction, agreement or payment involving the
partnership and any General Partner or any Affiliate of a General Partner
otherwise permitted by the terms of this 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
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.
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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 dissolution of the Partnership.
8.6 Rights of Limited Partner Relating to the Partnership.
(a) In addition to other rights provided by this Agreement or by
applicable law, and except as otherwise limited under this Agreement, each
Limited Partner shall have the right, for a purpose reasonably related to such
Limited Partner's interest as a limited partner in the Partnership, upon
reasonable demand and at such Limited Partner's own expense:
(i) to obtain true and full information regarding the status
of the business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of
the Partnership's federal, state and local tax returns for each year;
(iii) to have furnished to 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 value of any other Capital
Contribution by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a Partner; and
(vi) to obtain such other information regarding the affairs of
the Partnership as is just and reasonable.
(b) Notwithstanding any other provision of this Agreement, the
General Partner may keep confidential from the Limited Partners and Assignees
for such period of time as the General Partner deems reasonable, any information
that the General Partner reasonably believes to be in the nature of trade
secrets or other information the disclosure of which the General Partner in good
faith believes is not in the best interests of the Partnership or could damage
the Partnership or that the Partnership is required by law or by agreements with
third parties to keep confidential (other than agreements with Affiliates the
primary purpose of which is to circumvent the obligations set forth in this
Article 8.6).
Article 9
UNIT CERTIFICATES
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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, 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 Article 9.2. Upon surrender for registration of
transfer of any Units evidenced by a Certificate, the General Partner on behalf
of the Partnership will execute, and the Transfer Agent will countersign and
deliver, in the name of the holder or the designated transferee or transferees,
as required pursuant to the holder's instructions, one or more new Certificates
evidencing the same aggregate number of Units as was evidenced by the
Certificate so surrendered.
9.2.2 Except as otherwise provided in the Agreement, 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 Article 9.2, the
General Partner may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed with respect thereto.
9.3 Mutilated, Destroyed, Lost or Stolen Certificates.
9.3.1 If any mutilated Certificate is surrendered to the Transfer Agent,
the General Partner on behalf of the Partnership shall execute, and upon its
request, the Transfer Agent shall countersign and deliver in exchange therefore,
a new Certificate evidencing the same number of Units as the Certificate so
surrendered.
9.3.2 The General Partner on behalf of the Partnership shall execute, and
upon its request, the Transfer Agent shall countersign and deliver a new
Certificate in place of any Certificate previously issued if the Record Holder
of the Certificate:
(a) makes proof by affidavit, in form and substance satisfactory to
the General Partner, that a previously issued Certificate has been lost,
destroyed or stolen;
(b) requests the issuance of a new Certificate before the
Partnership has received notice that the Certificate has been acquired by a
purchaser for value in good faith and without notice of an adverse claim;
(c) if requested by the General Partner, delivers to the Partnership
a bond or such other form of security or indemnity as may be required by the
General Partner, in form and substance satisfactory to the General Partner, with
surety or sureties and with fixed or open penalty as the General Partner may
direct, in its sole discretion, to indemnify the Partnership, the General
Partner and the Transfer Agent against any claim that may be made on account of
the alleged loss, destruction or theft of the Certificate; and
(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.
9.3.3 As a condition to the issuance of any Certificate under this Article
9.3, the General Partner may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including, without limitation, the fees and expenses of the
Transfer Agent) connected therewith.
9.4 Record Holder. The Partnership shall be entitled to recognize the
Record Holder as the Limited Partner or Assignee with respect to any Units and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Units on the part of any other Person, whether or not the
Partnership shall have actual or other notice thereof, except as otherwise
provided by law or any applicable rule, regulation, guideline or requirement of
any national securities exchange on which the Units are listed for trading.
Without limiting the foregoing, when a Person (such as a broker, dealer, bank
trust company or clearing corporation or an
14
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 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.
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 Article 10.2.1, the General Partner may
transfer all, but not less than all, of its interest as the general partner to a
single transferee if, but only if, (i) at least a majority of the 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 other
applicable agreements, and (iii) the Partnership receives an Opinion of Counsel
that such transfer would not result in the loss of limited liability of any
Limited Partner or of the Partnership or cause the Partnership to be taxable as
a corporation or otherwise taxed as an entity for federal income tax purposes.
The foregoing notwithstanding, the General Partner is expressly permitted to
pledge its interest as General Partner to secure the obligations of the
Partnership under a Revolving Credit Facility, as the same may be amended,
supplemented, replaced, refinanced or restated from time to time, or any
successor or subsequent loan agreement.
10.2.2 Neither Article 10.2.1 nor any other provision of this Agreement
shall be construed to prevent (and all Partners do hereby consent to) (i) the
transfer by the General Partner of all of its interest as a general partner to
an Affiliate or (ii) the transfer by the General Partner of all its interest as
a general partner upon its merger or consolidation with or other combination
into any other Person or the transfer by it of all or substantially all of its
assets to another Person if, in the case of a transfer described in either
clause (i) or (ii) of this sentence, the rights and duties of the General
Partner with respect to the interest so transferred are assumed by the
transferee and the transferee agrees to be bound by the provisions of this
Agreement; provided, that in either such case, such transferee furnishes to the
Partnership an Opinion of Counsel that such merger, consolidation, combination,
transfer or assumption will not result in a loss of limited liability of any
Limited Partner or of the Partnership or cause the Partnership to be taxable as
a corporation or otherwise taxed as an entity for federal income tax purpose. In
the case of a transfer pursuant to this Article 10.2.2, the transferee or
successor (as the case may be) shall be admitted to the Partnership as the
General Partner immediately prior to the transfer of the interest, and the
business of the Partnership shall continue without dissolution.
10.3 Transfer of Units.
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10.3.1 Units may be transferred only in the manner described in Article
9.2. The transfer of any Units and the admission of any new Partner shall not
constitute an amendment to this Agreement.
10.3.2 Until admitted as a Substituted Limited Partner pursuant to Article
11, the Record Holder of a Unit shall be an Assignee in respect of such Unit.
Limited Partners may include custodians, nominees or any other individual or
entity in its own or any representative capacity.
10.3.3 Each distribution in respect of Units shall be paid by the
Partnership, directly or through the Transfer Agent or through any other Person
or agent, only to the Record Holders thereof as of the Record Date set for the
distribution. Such payment shall constitute full payment and satisfaction of the
Partnership's liability in respect of such payment, regardless of any claim of
any Person who may have an interest in such payment by reason of an assignment
or otherwise.
10.3.4 A transferee who has completed and delivered a Transfer Application
shall be deemed to have (i) requested admission as a Substituted Limited
Partner, (ii) agreed to comply with and be bound by and to have executed this
Agreement, (iii) represented and warranted that such transferee has the capacity
and authority to enter into this Agreement, (iv) made the powers of attorney set
forth in this Agreement, and (v) given the consents and made the waivers
contained in this Agreement.
10.4 Restrictions on Transfers. Notwithstanding the other provisions of this
Article 10, no transfer of any Unit or interest therein of any Limited Partner
or Assignee shall be made if such transfer would (a) violate the then applicable
federal or state securities laws or rules and regulations of the SEC, any state
securities commission, the CFTC, or any other governmental authorities with
jurisdiction over such transfer, (b) cause the Partnership to be taxable as a
corporation or (c) affect the Partnership's existence or qualification as a
limited partnership under the Act. The General Partner may request each record
holder to furnish certain information, including that holder's nationality,
citizenship or other related status. A transferee who is not a U.S. resident may
not be eligible to become a record holder or a Limited Partner if s ownership
would subject the Partnership the risk of cancellation or forfeiture of any of
its assets under any federal, state or local law or regulation. If the record
holder fails to furnish the information or if the General Partner determines, on
the basis of the information furnished by the holder in response to the request,
that such holder is not qualified to become one of a Limited Partner, the
General Partner may be substituted as a holder for the record holder, who will
then be treated as a non-citizen assignee, and the Partnership will have the
right to redeem those securities held by the record holder.
10.5 Tax Certificates.
10.5.1 All Limited Partners or Assignees (or, if the Limited Partner or
Assignee is a nominee holding for the account of a Beneficial Owner, the
Beneficial Owner) are required to provide the Partnership with a properly
completed Tax Certificate.
10.5.2 If a Limited Partner or Assignee (or, if the Limited Partner or
Assignee is a nominee holding for the account of a Beneficial Owner, the
Beneficial Owner) fails to provide the Partnership with a properly completed Tax
Certificate, the General Partner may request at any time and from time to time,
that such Limited Partner or Assignee (or Beneficial Owner) shall, within 15
days after request (whether oral or written) therefore by the General Partner,
furnish to the Partnership, a properly completed Tax Certificate. If a Limited
Partner or Assignee fails to furnish to the General Partner within the
aforementioned 15-day period such Tax Certificate, the Units owned by such
Limited Partner or Assignee (or in the case of a Limited Partner or Assignee
that holds Units on behalf of a Beneficial Owner, the Units held on behalf of
the Beneficial Owner) shall be subject to redemption in accordance with the
provisions of Article 10.6.
10.6 Redemption of Units for Failure to Provide Tax 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 Article
10.5.2, The Partnership may redeem the Units of such Limited Partner or Assignee
as follows:
(a) The General Partner shall not later than the tenth (10th) 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
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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 therefore.
(d) In the event the Partnership is required to pay withholding tax or
otherwise withhold any amount on behalf of, or with respect to, a Limited
Partner or Assignee (or Beneficial Owner) who has failed to provide a properly
completed Tax Certificate, such amounts paid or withheld by the Partnership
shall be deemed to have been paid to such Limited Partner or Assignee (or
Beneficial Owner) as part of the redemption price for the Redeemable Units and
the Partnership shall reduce the amount of the payment made to such Limited
Partner or Assignee (or Beneficial owner) in redemption of such Redeemable Units
by any amounts so withheld.
10.6.2 After the Notice Date, Redeemable Units shall no longer constitute
issued and Outstanding Units and no allocations or distributions shall be made
with respect to such Redeemable Units. In addition, after the Notice Date, the
Redeemable Units shall not be Transferable.
10.6.3 The provisions of this Article 10.6 shall also be applicable to
Units held by a Limited Partner or Assignee as nominee of a Beneficial Owner.
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 Article 11.3 or the transferee of or successor to all
of the General Partner's interest pursuant to Article 10.2 who is proposed to be
admitted as a successor General Partner shall be admitted to the Partnership as
the General Partner, effective immediately prior to the withdrawal or removal of
the General Partner pursuant to Article 12 or the transfer of the General
Partner's interest pursuant to Article 10.2; provided, however, that no such
successor shall be admitted to the Partnership until compliance with the terms
of Article 10.2 has occurred. Any such successor shall carry on the business of
the Partnership without dissolution. In each case, the admission shall be
subject to the successor General Partner executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be requited to effect the
admission.
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11.4 Admission of Additional Limited Partners.
11.4.1 A Person (other than the General Partner, an Initial Limited
Partner or a Substituted Limited Partner) who makes a Capital Contribution to
the Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in this Agreement, (ii) such other
documents or instruments as may be required in the discretion of the General
Partner to effect such Person's admission as an Additional Limited Partner.
11.4.2 Notwithstanding anything to the contrary in this Article 11.4, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person is
recorded on the books and records of the Partnership, following the consent of
the General Partner to such admission.
11.5 Amendment of Agreement and Certificate of Limited Partnership. To
effect the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary and appropriate under the Act to amend the
records of the Partnership and if necessary, to prepare as soon as practical an
amendment of this Agreement and if required by law, to prepare and file an
amendment to the Certificate of Limited Partnership and may for this purpose,
among others, exercise the power of attorney granted pursuant to Article 15.
Article 12
WITHDRAWAL OR REMOVAL OF PARTNERS
12.1 Withdrawal of the General Partner.
12.1.1 The General Partner shall be deemed to have withdrawn from the
Partnership upon the occurrence of any one of the following events (each such
event herein referred to as an "Event of Withdrawal"):
(a) the General Partner voluntarily withdraws from the Partnership
by giving written notice to the other Partners;
(b) the General Partner transfers all of its rights as general
partner pursuant to this Agreement;
(c) the General Partner is removed;
(d) the General Partner (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 Article 12.1.1(d), (e) or (f)
occurs, the withdrawing General Partner shall give written notice to the Limited
Partners within 30 days after such occurrence. The Partners hereby agree that
only the Events of Withdrawal described in this Article 12.1 shall result in the
withdrawal of the General Partner from the Partnership.
12.1.2 Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal will not constitute a breach of this
Agreement under the following circumstances, (i) the General Partner voluntarily
withdraws by giving at least 90 days'
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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 Article 12.1.1(b) or is removed pursuant to
Article 12.2; or (iii), 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 Article 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 Article 13. If a successor
General Partner is elected, such successor shall be admitted immediately prior
to the effective time of the withdrawal or removal of the Departing Partner and
shall continue the business of the Partnership without dissolution.
12.2 Removal of the General Partner. The General Partner may be removed
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.
12.3 Withdrawal of a Limited Partner. In addition to withdrawal of a
Limited Partner due to its redemption of Units constituting a Redemption Basket
under this Agreement, the General Partner may, at any time, in its sole
discretion, require any Limited Partner to withdraw entirely from the
Partnership or to withdraw a portion of his Partner capital account, by giving
not less than fifteen (15) days' advance written notice to the Limited Partner
thus designated. In addition, the General Partner without notice may require at
any time, or retroactively, withdrawal of all or any portion of the capital
account of any Limited Partner: (i) that made a misrepresentation to the General
Partner in connection with its purchase of Units; or (ii) whose ownership of
Units would result in the violation of any law or regulations applicable to the
Partnership or a Partner. The Limited Partner thus designated shall withdraw
from the Partnership or withdraw that portion of his Partner capital account
specified in such notice, as the case may be, as of the Close of Business on
such date as determined by the General Partner. The Limited Partner thus
designated shall be deemed to have withdrawn from the Partnership or to have
made a partial withdrawal from his Partner capital account, as the case may be,
without further action on the part of said Limited Partner and the provisions of
Article 17.6 shall apply.
Article 13
TERMINATION AND DISTRIBUTION
13.1 Termination. The Partnership shall continue in effect from the date
of its formation in perpetuity, unless sooner terminated upon the occurrence of
any one or more of the following events:
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 this Agreement.
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
19
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 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 (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 Article 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 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
20
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, incompetence, disability, incapacity, dissolution,
bankruptcy or termination of any Limited Partner or Assignee and the transfer of
all or any portion of such Limited Partner's or Assignee's Partnership interest
and shall extend to such Limited Partners or Assignee's heirs, successors,
assigns and personal representatives. Each such Limited Partner or Assignee
hereby agrees to be bound by any representation made by the General Partner or
the liquidator acting in good faith pursuant to such power of attorney; and each
such Limited Partner or Assignee hereby waives any and all defenses that may be
available to contest, negate or disaffirm the action of the General Partner or
the liquidator taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
liquidator, within 15 days after receipt of the General Partner's or the
liquidator's request therefore, 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
CREATION OF UNITS
16.1 General. The Partnership will create and redeem Units from time to
time, but only in one or more Creation Baskets or Redemption Baskets (a
Creation/Redemption Basket ("Basket"') equals a block of 100,000 Units). The
creation and redemption of Baskets will only be made in exchange for delivery to
the Partnership or the distribution by the Partnership of the amount of United
States government securities with maturities of two years or less ("Treasuries")
and any cash represented by the Baskets being created or redeemed, the amount of
which will be based on the combined NAV of the number of Units included in the
Baskets being created or redeemed determined on the day the order to create or
redeem Baskets is properly received.
16.2 Creation Procedures. On any business day, a Limited Partner, through
an authorized purchaser, may place an order with the Partnership's marketing
agent to create one or more Baskets. For purposes of processing purchase and
redemption orders, a "business day" means any day other than a day when any of
the American Stock Exchange is closed for regular trading, the New York
Mercantile Exchange or the New York Stock Exchange is closed for regular
trading. Purchase orders must be placed by 4:00 PM New York time or the close of
regular trading on the American Stock Exchange, whichever is earlier. The day on
which the marketing agent receives a valid purchase order is the purchase order
date. By placing a purchase order, the Limited Partner agrees to deposit
Treasuries with the Partnership, or a combination of Treasuries and cash. Prior
to the delivery of Baskets for a purchase order, the Limited Partner must also
have wired to the custodian the non-refundable creation transaction fee
described in this Article.
16.3 Determination of required deposits. The total deposit required to
create each Basket ("Creation Basket Deposit") is an amount of Treasuries and
cash with a value that is in the same proportion to the total assets of the
Partnership (net of estimated accrued but unpaid fees, expenses and other
liabilities) on the date the order to purchase is properly received as the
number of Units to be created under the purchase order is in proportion to the
total number of Units outstanding on the date the order is received. The General
Partner determines, in its sole discretion, the requirements for Treasuries that
may be included in deposits to create Baskets (e.g., the issuer and the maximum
permitted remaining maturity of a Treasury) and publishes, or its agent
publishes on its behalf, such requirements at the beginning of each business
day. The amount of cash deposit required is the difference between the aggregate
market value of the Treasuries included in a Creation Basket Deposit as of 4:00
p.m. on the date the order to purchase properly was made and the total required
deposit.
16.4 Delivery of required deposits. A Limited Partner who places a
purchase order is responsible for transferring the Partnership's account with
the custodian the required amount of Treasuries and cash by the end of the third
business day following the purchase order date. Upon receipt of the deposit
amount, the marketing agent will direct the Depository Trust Company ("DTC") to
credit the number of Baskets ordered to the Limited Partner's DTC account on the
third business day following the purchase order date. The expense and risk of
delivery and ownership of Treasuries until such Treasuries have been received by
the custodian on behalf of the Partnership shall be borne solely by the Limited
Partner.
16.5 Rejection of purchase orders. The General Partner, or its marketing
agent on its behalf, may reject a purchase order or a Creation Basket Deposit
if: (1) it determines that the purchase order or the Creation Basket Deposit is
not in proper form; (2) the
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General Partner believes that the purchase order or the Creation Basket Deposit
would have adverse tax consequences to the Partnership or Limited Partners; (3)
the acceptance or receipt of the Creation Basket Deposit would, in the opinion
of counsel to the General Partner, be unlawful; or (4) circumstances outside the
control of the General Partner, marketing agent or custodian make it, for all
practical purposes, not feasible to process creations of Baskets. None of the
General Partner, marketing agent or custodian will be liable for the rejection
of any purchase order or Creation Basket Deposit.
16.6 Creation Transaction Fee. To compensate the Partnership for its
expenses in connection with the creation of Baskets, a Limited Partner is
required to pay a transaction fee to the Partnership of $1,000 per order to
create Baskets. An order may include multiple Baskets. The transaction fee may
be reduced, increased or otherwise changed by the General Partner. The General
Partner shall notify DTC of any change in the transaction fee and will not
implement any increase in the fee for the creation of Baskets until 30 days
after the date of the notice.
Article 17
REDEMPTION OF UNITS
17.1 General. The procedures by which a Limited Partner can redeem,
through an authorized purchaser, one or more Baskets mirror the procedures for
the creation of Baskets. On any business day, a Limited Partner may place an
order with the marketing agent to redeem one or more Baskets. Redemption orders
must be placed by 4:00 PM New York time or the close of regular trading on the
American Stock Exchange, whichever is earlier. A redemption order so received is
effective on the date it is received in satisfactory form by the marketing
agent. The day on which the marketing agent receives a valid redemption order is
the redemption order date. By placing a redemption order, a Limited Partner
agrees to deliver the Baskets to be redeemed through DTC's book-entry system to
the Partnership not later than the third business day following the effective
date of the redemption order. Prior to the delivery of the redemption
distribution for a redemption order, the Limited Partner must also have wired to
the Partnership's account at the custodian the non-refundable redemption
transaction fee described in this Article.
17.2 Determination of Redemption Distribution. The redemption distribution
from the Partnership consists of a transfer to the redeeming Limited Partner of
an amount of Treasuries with a value that is in the same proportion to the total
assets of the Partnership (net of estimated accrued but unpaid fees, expenses
and other liabilities) on the date the order to redeem is properly received as
the number of Units to be redeemed under the redemption order is in proportion
to the total number of Units outstanding on the date the order is received. The
General Partner, directly or through its agent, will determine the requirements
for Treasuries and the amount of cash, including the maximum permitted remaining
maturity of a Treasury, and the proportions of Treasuries and cash, that may be
included in distributions to redeem Baskets. The marketing agent will publish
such requirements as of 4:00 PM New York time on the redemption order date.
17.3 Delivery of Redemption Distribution. The redemption distribution due
from the Partnership is delivered to the Limited Partner on the third business
day following the redemption order date if, by 9:00 AM New York time on such
third business day, the Partnership's DTC account has been credited with the
Baskets to be redeemed. If the Partnership's DTC account has not been credited
with all of the Baskets to be redeemed by such time, the redemption distribution
is delivered to the extent of whole Baskets received. Any remainder of the
redemption distribution is delivered on the next business day to the extent of
remaining whole Baskets received if the Partnership receives the fee applicable
to the extension of the redemption distribution date which the General Partner
may, from time to time, determine and the remaining Baskets to be redeemed are
credited to the Partnership's DTC account by 9:00 AM New York time on such next
business day. Any further outstanding amount of the redemption order shall be
cancelled. The custodian is also authorized to deliver the redemption
distribution notwithstanding that the Baskets to be redeemed are not credited to
the Partnership's DTC account by 9:00 AM New York time on the third business day
following the redemption order date if the Limited Partner has collateralized
its obligation to deliver the Baskets through DTC's book entry system on such
terms as the General Partner may from time to time determine.
17.4 Suspension or Rejection of Redemption orders. The General Partner
may, in its discretion, suspend the right of redemption, or postpone the
redemption settlement date, (1) for any period during which any of the New York
Mercantile Exchange, the American Stock Exchange or the New York Stock Exchange
is closed other than customary weekend or holiday closings, or trading on the
American Stock Exchange is suspended or restricted, (2) for any period during
which an emergency exists as a result of which delivery, disposal or evaluation
of Treasuries is not reasonably practicable, or (3) for such other period as the
General Partner determines to be necessary for the protection of the Limited
Partners. None of the General Partner, the marketing agent or the custodian will
be liable to any person or in any way for any loss or damages that may result
from any such suspension or
22
postponement. The General Partner will reject a redemption order if the order is
not in proper form or if the fulfillment of the order, in the opinion of its
counsel, might be unlawful.
17.5 Redemption Transaction Fee. To compensate the Partnership for its
expenses in connection with the redemption of Baskets, a Limited Partner is
required to pay a transaction fee to the Partnership of $1,000 per order to
redeem Baskets. An order may include multiple Baskets. The transaction fee may
be reduced, increased or otherwise changed by the General Partner. The General
Partner shall notify DTC of any change in the transaction fee and will not
implement any increase in the fee for the redemption of Baskets until 30 days
after the date of the notice.
17.6 Required Redemption. The General Partner may, at any time, in its
sole discretion, require any Limited Partner to withdraw entirely from the
Partnership or to withdraw a portion of his Partner capital account, by giving
not less than fifteen (15) days' advance written notice to the Limited Partner
thus designated. In addition, the General Partner without notice may require at
any time, or retroactively, withdrawal of all or any portion of the capital
account of any Limited Partner: (i) that the General Partner determines is a
benefit plan investor (within the meaning of the Department of Labor Regulation
(s) 2510.3-101(f)(2)) in order for the assets of the Partnership not to be
treated as plan assets under ERISA; (ii) that made a misrepresentation to the
General Partner in connection with its purchase of Units; or (iii) whose
ownership of Units would result in the violation of any law or regulations
applicable to the Partnership or a Partner. The Limited Partner thus designated
shall withdraw from the Partnership or withdraw that portion of his Partner
capital account specified in such notice, as the case may be, as of the Close of
Business on such date as determined by the General Partner. The Limited Partner
thus designated shall be deemed to have withdrawn from the Partnership or to
have made a partial withdrawal from his Partner capital account, as the case may
be, without further action on the part of said Limited Partner.
Article 18
MISCELLANEOUS
18.1 Notices. Any notice, offer, consent or other communication required
or permitted to be given or made hereunder shall be in writing and shall be
deemed to have been sufficiently given or made when delivered personally to the
party (or an officer of the party) to whom the same is directed, or (except in
the event of a mail strike) 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 C 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.
18.2 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.
18.3 Governing Law, Successors, Severability. This Agreement shall be
governed by the laws of the State of Delaware, as such laws are applied by
Delaware courts to agreements entered into and to be performed in Delaware by
and between residents of Delaware and shall, subject to the restrictions on
transferability set forth herein, bind and inure to the benefit of the heirs,
executors, personal representatives successors and assigns of the parties
hereto. If any provision of this Agreement shall be held to be invalid, the
remained of this Agreement shall not be affected thereby.
Consent to Jurisdiction. The General Partner and the Limited Partners
hereby (1) irrevocably submit to the non-exclusive jurisdiction of any Delaware
state court or federal court sitting in Wilmington, Delaware in any action
arising out of or relating to this Agreement, and (ii) consent to the service of
process by mail. Nothing herein shall affect the right of any party to serve
legal process in any manner permitted by law or affect its right to bring any
action in any other court. Each party agrees that, in the event that any dispute
arising from or relating to this Agreement becomes subject to any judicial
proceeding, such party, to the fullest extent permitted by applicable law,
waives any right it may otherwise have to (a) seek punitive or consequential
damages, or (b) request a trial by jury.
18.5 Entire Agreement. This Agreement constitutes the entire agreement
among the parties; it supercedes any prior agreement or understanding among
them, oral or written, all of which are hereby canceled. This Agreement may not
be modified or amended other than pursuant to Article 15.
18.6 Headings. The headings in this Agreement are inserted for convenience
of reference only and shall not affect interpretation of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or the plural shall include the singular and the plural and pronouns
stated in either the masculine or the neuter gender shall include the masculine,
the feminine and
23
the neuter.
18.7 No Waiver. The failure of any Partner to seek redress for violation,
or to insist on strict performance, of any covenant or condition of this
Agreement shall not prevent a subsequent act which would have constituted a
violation from having the effect of an original violation.
18.8 Legends. If certificates for any interest or interests are issued
evidencing a Limited Partner's interest in the Partnerships, each such
certificate shall bear such legends as may be required by applicable Federal and
state laws, or as may be deemed necessary or appropriate by the General Partner
to reflect restrictions upon transfer contemplated herein.
18.9 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
18.10 Relationship between the Agreement and the Act. Regardless of
whether any provisions of this Agreement specifically refer to particular
Default Rules, (a) if any provision of this Agreement conflicts with a Default
Rule, the provision of this Agreement controls and the Default Rule is modified
or negated accordingly, and (b) if it is necessary to construe a Default Rule as
modified or negated in order to effectuate any provision of this Agreement, the
Default Rule is modified or negated accordingly. For purposes of this Article
18.10, "Default Rule" shall mean a rule stated in the Act that applies except to
the extent it is negated or modified through the provisions of a limited
partnership's Certificate or limited partnership agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first appearing above.
GENERAL PARTNER
Victoria Bay Asset Management, LLC
By:
-------------------------------
Name:
Title:
ORGANIZATIONAL LIMITED PARTNER
Xxxxxxxxxx Holdings, Inc.
By:
-------------------------------
Name:
Title:
INITIAL LIMITED PARTNER
[ ]
-------------
By:
-------------------------------
Name:
Title:
24
EXHIBIT A
ASSETS MANAGEMENT FEE
------ --------------
First $1,000,000,000 0.50% of NAV
After the first $1,000,000,000 0.20% of NAV
Fees and Expenses are calculated on a daily basis and paid on a monthly basis.
2
EXHIBIT B
CERTIFICATE EVIDENCING UNITS REPRESENTING
LIMITED PARTNER INTERESTS IN UNITED STATES OIL FUND, LP
NO. UNITS______
In accordance with the First Amended and Restated Agreement of Limited
Partnership of United States Oil Fund, LP, as amended, supplemented or restated
from time to time (the "Partnership Agreement"), United States Oil Fund, LP, a
Delaware limited partnership (the "Partnership"), hereby certifies that (the
"Holder") is the registered owner of Units representing limited partner
interests in the Partnership (the "Units") transferable on the books of the
Partnership, in person or by duly authorized attorney, upon surrender of this
Certificate properly endorsed. The rights, preferences and limitations of the
Units are set forth in, and this Certificate and the Units represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Partnership Agreement. Copies of the Partnership Agreement are on file at,
and will be furnished without charge on delivery of written request to the
Partnership at, the principal office of the Partnership located 0000 Xxxxxx Xxx
Xxxxxxx, Xxxxx 000 Xxxxxxx, Xxxxxxxxxx 00000. Capitalized terms used herein but
not defined shall have the meanings given them in the Partnership Agreement.
THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF UNITED STATES OIL
FUND, LP THAT THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED IF SUCH TRANSFER WOULD (a) VIOLATE THE THEN APPLICABLE
FEDERAL OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL
AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (b) TERMINATE THE EXISTENCE OR
QUALIFICATION OF UNITED STATES OIL FUND, LP UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (c) CAUSE UNITED STATES OIL FUND, LP TO BE TREATED AS AN
ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR
FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED).
VICTORIA BAY ASSET MANAGEMENT, LLC, THE GENERAL PARTNER OF UNITED STATES OIL
FUND, LP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS SECURITY IF
IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY TO AVOID
A SIGNIFICANT RISK OF UNITED STATES OIL FUND, LP BECOMING TAXABLE AS A
CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX
PURPOSES. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF
ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO THROUGH THE FACILITIES OF
ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR ADMITTED TO
TRADING.
The Holder, by accepting this Certificate, is deemed to have (i) requested
admission as, and agreed to become, a Limited Partner and to have agreed to
comply with and be bound by and to have executed the Partnership Agreement, (ii)
represented and warranted that the Holder has all right, power and authority
and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (iii) granted the powers of attorney provided for in the Partnership
Agreement and (iv) made the waivers and given the consents and approvals
contained in the Partnership Agreement.
This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent and Registrar.
Dated:
Countersigned and Registered by:
as Transfer Agent and Registrar By:
By:
Name:
Authorized Signature By:
3
[Reverse of Certificate]
ASSIGNMENT OF UNITS IN UNITED STATES OIL FUND, LP
FOR VALUE RECEIVED
-----------------------------
(Please print or typewrite name and address of Assignee)
hereby assigns, conveys, sells and transfers unto
--------------------------
(Please insert Social Security or other identifying number of Assignee)
Units representing limited partner interests evidenced by this Certificate,
subject to the Partnership Agreement, and does hereby irrevocably constitute and
appoint as its attorney-in-fact with full power of substitution to transfer the
same on the books of United States Oil Fund LP
Date: NOTE: The signature to any endorsement
hereon must correspond with the name
as written upon the face of this
Certificate in every particular,
without alteration, enlargement or
change.
THE SIGNATURE(S) MUST BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE17d 15
---------------------
(Signature)
---------------------
(Signature)
No transfer of the Units evidenced hereby will be registered on the books of the
Partnership, unless the Certificate evidencing the Units to be transferred is
surrendered for registration or transfer.
4
EXHIBIT C
ADDRESSES FOR NOTICE
5
