Exhibit a(2)
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GAM AVALON MULTI-GLOBAL, L.P.
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LIMITED PARTNERSHIP AGREEMENT
January 2, 2001
TABLE OF CONTENTS
Page
Article I DEFINITIONS.............................................................................................1
Article II ORGANIZATION; ADMISSION OF PARTNERS; DIRECTORS.........................................................5
2.1. FORMATION OF LIMITED PARTNERSHIP.......................................................................5
2.2. NAME...................................................................................................5
2.3. PRINCIPAL AND REGISTERED OFFICE........................................................................5
2.4. DURATION...............................................................................................6
2.5. BUSINESS OF THE FUND...................................................................................6
2.6. GENERAL PARTNER........................................................................................6
2.7. LIMITED PARTNERS.......................................................................................6
2.8. ORGANIZATIONAL LIMITED PARTNER.........................................................................6
2.9. BOTH GENERAL AND LIMITED PARTNER.......................................................................7
2.10. LIMITED LIABILITY......................................................................................7
2.11. DIRECTORS..............................................................................................7
Article III MANAGEMENT; ADVICE AND MANAGEMENT.....................................................................8
3.1. MANAGEMENT AND CONTROL.................................................................................8
3.2. ACTIONS BY DIRECTORS...................................................................................9
3.3. MEETINGS OF PARTNERS...................................................................................9
3.4. ADVICE AND MANAGEMENT.................................................................................10
3.5. CUSTODY OF ASSETS OF THE FUND.........................................................................13
3.6. BROKERAGE.............................................................................................13
3.7. OTHER ACTIVITIES......................................................................................13
3.8. DUTY OF CARE..........................................................................................14
3.9. INDEMNIFICATION.......................................................................................14
3.10. FEES, EXPENSES AND REIMBURSEMENT......................................................................16
Article IV TERMINATION OF STATUS OF GENERAL PARTNER; REMOVAL OF GENERAL PARTNER; TRANSFERS AND REPURCHASES.......18
4.1. TERMINATION OF STATUS OF THE GENERAL PARTNER..........................................................18
4.2. REMOVAL OF GENERAL PARTNER............................................................................18
4.3. TRANSFER OF INTERESTS OF GENERAL PARTNER..............................................................18
4.4. TRANSFER OF INTERESTS OF LIMITED PARTNERS.............................................................19
4.5. REPURCHASE OF INTERESTS...............................................................................19
Article V CAPITAL................................................................................................21
5.1. CONTRIBUTIONS TO CAPITAL..............................................................................21
5.2. RIGHTS OF PARTNERS TO CAPITAL.........................................................................22
5.3. CAPITAL ACCOUNTS......................................................................................22
5.4. ALLOCATION OF NET PROFIT AND LOSS.....................................................................23
5.5. ALLOCATION OF CERTAIN WITHHOLDING TAXES AND OTHER EXPENDITURES........................................23
5.6. RESERVES..............................................................................................24
5.7. ALLOCATION TO AVOID CAPITAL ACCOUNT DEFICITS..........................................................24
5.8. ALLOCATIONS PRIOR TO CLOSING DATE.....................................................................24
5.9. TAX ALLOCATIONS.......................................................................................25
5.10. DISTRIBUTIONS.........................................................................................25
Article VI DISSOLUTION AND LIQUIDATION...........................................................................26
6.1. DISSOLUTION...........................................................................................26
6.2. LIQUIDATION OF ASSETS.................................................................................27
Article VII ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS.........................................................28
7.1. ACCOUNTING AND REPORTS................................................................................28
7.2. DETERMINATIONS BY GENERAL PARTNER.....................................................................28
7.3. VALUATION OF ASSETS...................................................................................28
Article VIII MISCELLANEOUS PROVISIONS............................................................................29
8.1. AMENDMENT OF PARTNERSHIP AGREEMENT....................................................................29
8.2. SPECIAL POWER OF ATTORNEY.............................................................................30
8.3. NOTICES...............................................................................................31
8.4. AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS.........................................................32
8.5. APPLICABILITY OF 1940 ACT AND FORM N-2................................................................32
8.6. CHOICE OF LAW; ARBITRATION............................................................................32
8.7. NOT FOR BENEFIT OF CREDITORS..........................................................................33
8.8. CONSENTS..............................................................................................33
8.9. MERGER AND CONSOLIDATION..............................................................................33
8.10. PRONOUNS..............................................................................................34
8.11. CONFIDENTIALITY.......................................................................................34
8.12. CERTIFICATION OF NON-FOREIGN STATUS...................................................................34
8.13. SEVERABILITY..........................................................................................35
8.14. ENTIRE AGREEMENT......................................................................................35
8.15. DISCRETION............................................................................................35
8.16. COUNTERPARTS..........................................................................................35
GAM AVALON MULTI-GLOBAL, L.P.
LIMITED PARTNERSHIP AGREEMENT
THIS LIMITED PARTNERSHIP AGREEMENT of GAM Avalon Multi-Global, L.P. (the
"Fund") is dated as of January 2, 2001 by and among Global Asset Management
(USA) Inc., a Delaware corporation, as the General Partner, GAM Services, Inc.
as the Organizational Limited Partner, and each person hereinafter admitted to
the Fund and reflected on the books of the Fund as a General Partner or as a
Limited Partner.
WITNESSETH:
WHEREAS, the Fund has heretofore been formed as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act, 6 Del. C.ss.ss.17-101 et.
seq., pursuant to a Certificate of Limited Partnership (the "Certificate") filed
with the Secretary of State of the State of Delaware on August 22, 2000; and
WHEREAS, the parties hereto hereby desire to form and operate the Fund as a
limited partnership under and pursuant to the provisions of the Delaware Act and
agree that the rights, duties and liabilities of the Partners shall be as
provided in the Delaware Act, except as otherwise provided herein; and
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants hereinafter set forth, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement:
"Advice and Management" means those services provided to the Fund by the
General Partner pursuant to Section 3.4(b) hereof.
"Advisers Act" means the Investment Advisers Act of 1940 and the rules,
regulations and orders thereunder, as amended from time to time, or any
successor law.
"Affiliate" means affiliated person as such term is defined in the 1940
Act.
"Agreement" means this Limited Partnership Agreement, as amended and/or
restated from time to time.
"Capital Account" means, with respect to each Partner, the capital account
established and maintained on behalf of each Partner pursuant to Section 5.3
hereof.
"Capital Contribution" means the contribution, if any, made, or to be made,
as the context requires, to the capital of the Fund by a Partner.
"Certificate" means the Certificate of Limited Partnership of the Fund and
any amendments thereto and/or restatements thereof as filed with the office of
the Secretary of State of the State of Delaware.
"Closing Date" means the first date on or as of which a Limited Partner
other than the Organizational Limited Partner is admitted to the Fund.
"Code" means the United States Internal Revenue Code of 1986, as amended
and as hereafter amended from time to time, or any successor law.
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act
as in effect on the date hereof and as amended from time to time, or any
successor law.
"Directors" means Xx. Xxxxxxxx Xxxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X.
XxXxxxx, Xxxxxx Xxxxxx or such other natural persons who, from time to time,
pursuant hereto shall become Directors.
"Fiscal Period" means the period commencing on the Closing Date, and
thereafter each period commencing on the day immediately following the last day
of the preceding Fiscal Period and ending at the close of business on the first
to occur of the following dates:
(1) the last day of a Fiscal Year;
(2) the day preceding the date as of which a contribution to the capital
of the Fund is made by any Partner pursuant to Section 5.1;
(3) the day on which the Fund repurchases all or a portion of the Units of
any Partner pursuant to Section 4.5;
(4) the day as of which the Fund admits a substituted Partner to whom an
Interest (or portion thereof) of a Partner has been Transferred
(unless there is no change of beneficial ownership);
(5) the day as of which any amount is credited to or debited against the
Capital Account of any Partner, other than an amount that is credited
to or debited against the Capital Accounts of all Partners in
accordance with their respective Fund Percentages; or
(6) December 31, or any other date which constitutes the last day of the
taxable year of the Fund.
"Fiscal Year" means the period commencing on the Closing Date and ending on
March 31, 2001, and thereafter each period commencing on April 1 of each year
and ending on March 31 of each year (or on the date of a final distribution
pursuant to Section 6.2 hereof), unless the Directors shall designate another
fiscal year for the Fund. The taxable year of the Fund shall end
on December 31 of each year, or on any other date designated by the General
Partner which is a permitted taxable year end for tax purposes, and need not be
the same as the Fiscal Year.
"Form N-2" means the Fund's Registration Statement on Form N-2 filed with
the Securities and Exchange Commission, as amended from time to time.
"Fund" means the limited partnership governed hereby, as such limited
partnership may from time to time be constituted.
"Fund Percentage" means a percentage established for each Partner on the
Fund's books as of the first day of each Fiscal Period. The Fund Percentage of a
Partner for a Fiscal Period shall be determined by dividing the balance of the
Partner's Capital Account as of the commencement of such Fiscal Period by the
sum of the Capital Accounts of all of the Partners as of the commencement of
such Fiscal Period. The sum of the Fund Percentages of all Partners for each
Fiscal Period shall equal 100%.
"General Partner" means Global Asset Management (USA) Inc., a Delaware
corporation, and any other person or persons admitted to the Fund as a general
partner of the Fund, collectively, in their capacities as general partners of
the Fund, and General Partner means any of the General Partners. Where the term
General Partner of the Fund is used and there is more than one general partner,
such term shall refer to each General Partner. If at any time there is more than
one general partner of the Fund, unless otherwise provided herein, any action
allowed to be taken, or required to be taken, by the General Partners may be
taken only with the unanimous approval of all of the General Partners.
"Independent Directors" means those Directors who are not "interested
persons" of the Fund as such term is defined in the 1940 Act.
"Interest" means the entire ownership interest in the Fund at any
particular time of a Partner or other person to whom an Interest or portion
thereof has been transferred pursuant to Section 4.3 or 4.4 hereof, including
the rights and obligations of such Partner or other person under this Agreement
and the Delaware Act.
"Limited Partner" means any person who shall have been admitted to the Fund
as a limited partner (including any person who is a General Partner when acting
in such person's capacity as a limited partner of the Fund) until the Fund
repurchases the entire Interest of such person as a limited partner pursuant to
Section 4.5 hereof or a substitute Limited Partner or Partners are admitted with
respect to any such person's entire Interest as a limited partner pursuant to
Section 4.4 hereof, in such person's capacity as a limited partner of the Fund.
"Management Fee" means the fee paid to the General Partner out of the
Fund's assets, and debited against Limited Partners' Capital Accounts, as
provided in Section 3.10(a).
"Memorandum" means the Fund's private placement memorandum, as amended from
time to time.
"Net Assets" means the total value of all assets of the Fund, less an
amount equal to all accrued debts, liabilities and obligations of the Fund,
calculated before giving effect to any repurchases of Interests.
"Net Profit" or "Net Loss" means the amount by which the Net Assets as of
the close of business on the last day of a Fiscal Period exceed (in the case of
Net Profit) or are less than (in the case of Net Loss) the Net Assets as of the
commencement of the same Fiscal Period (or, with respect to the initial Fiscal
Period of the Fund, at the close of business on the Closing Date), such amount
to be adjusted to exclude any items to be allocated among the Capital Accounts
of the Partners on a basis which is not in accordance with the respective Fund
Percentages of all Partners as of the commencement of such Fiscal Period
pursuant to Section 5.6 hereof.
"1940 Act" means the Investment Company Act of 1940 and the rules,
regulations and orders thereunder, as amended from time to time, or any
successor law.
"1934 Act" means the Securities Exchange Act of 1934 and the rules,
regulations and orders thereunder, as amended from time to time, or any
successor law.
"Organizational Limited Partner" means GAM Services, Inc.
"Partners" means the General Partner(s) and the Limited Partners,
collectively.
"Person" means any individual, entity, corporation, partnership,
association, limited liability company, joint-stock company, trust, estate,
joint venture, organization or unincorporated organization.
"Portfolio Fund" means a registered investment company, unregistered
general or limited partnership, limited liability company or other pooled
investment vehicle in which the Fund has invested and which is advised by a
Portfolio Manager.
"Portfolio Manager" means an individual or entity designated by the General
Partner to manage a portion of the assets of the Fund, either directly or
through the investment by the Fund in a Portfolio Fund. The term Portfolio
Manager includes Sub-Advisers.
"Related Person" means, with respect to any person, (i) a relative, spouse
or relative of a spouse who has the same principal residence as such person,
(ii) any trust or estate in which such person and any persons who are related to
such person collectively have more than 50% of the beneficial interests
(excluding contingent interests) and (iii) any corporation or other organization
of which such person and any persons who are related to such person collectively
are beneficial owners of more than 50% of the equity securities (excluding
directors' qualifying shares) or equity interests.
"Securities" means securities (including, without limitation, equities,
debt obligations, options, and other "securities" as that term is defined in
Section 2(a)(36) of the 0000 Xxx) and any contracts for forward or future
delivery of any security, debt obligation, currency or commodity, all manner of
derivative instruments and any contracts based on any index or group of
securities, debt obligations, currencies or commodities, and any options
thereon.
"Sub-Adviser" means a Portfolio Manager responsible either (i) for directly
managing a portion of the assets of the Fund in a managed account or (ii) for
managing a special purpose investment vehicle in which the Portfolio Manager and
the Fund are the sole investors.
"Transfer" means the assignment, transfer, sale or other disposition of all
or any portion of an Interest, including any right to receive any allocations
and distributions attributable to an Interest.
"Unit" means the interest of a Partner in the Fund represented by an
original Capital Contribution of $100 at the initial closing of subscriptions
for interests in the Fund, and with a net asset value determined from time to
time thereafter as provided in Section 7.3.
ARTICLE II
ORGANIZATION; ADMISSION OF PARTNERS; DIRECTORS
2.1. FORMATION OF LIMITED PARTNERSHIP. The parties hereto hereby form the Fund
as a limited partnership under and pursuant to the provisions of the Delaware
Act and agree that the rights, duties and liabilities of the Partners shall be
as provided in the Delaware Act, except as otherwise provided herein. The
General Partner shall execute and file in accordance with the Delaware Act any
amendment to the Certificate and shall execute and file with applicable
governmental authorities any other instruments, documents and certificates
which, in the opinion of the General Partner or the Fund's legal counsel, may
from time to time be required by the laws of the United States of America, the
State of Delaware or any other jurisdiction in which the Fund shall determine to
do business, or any political subdivision or agency thereof, or which such legal
counsel may deem necessary or appropriate to effectuate, implement and continue
the valid existence and business of the Fund.
2.2. NAME. The name of the Fund shall be "GAM Avalon Multi-Global, L.P." or such
other name as the General Partner hereafter may adopt upon (i) causing an
appropriate amendment to the Certificate to be filed in accordance with the
Delaware Act and (ii) sending notice thereof to each Partner. The General
Partner hereby grants to the Fund a non-exclusive license to use the name "GAM"
in the name of the Fund for so long as Global Asset Management (USA) Inc. shall
remain the General Partner of the Fund. The Fund hereby acknowledges that it
shall not acquire any legal right or title in or to such name, and agrees to
change its name to a name that does not contain the term "GAM" if Global Asset
Management (USA) Inc. shall cease to be the General Partner of the Fund for any
reason.
2.3. PRINCIPAL AND REGISTERED OFFICE. The Fund shall have its principal office
at the principal office of the General Partner, or at such other place as shall
be designated from time to time by the General Partner. The Fund shall have its
registered office in the State of Delaware at 1013 Centre Road, Wilmington, New
Castle County, Delaware, and shall have Corporation Service Company as its
registered agent for service of process in the State of Delaware, unless a
different registered office or agent is designated from time to time by the
General Partner in accordance with the Delaware Act.
2.4. DURATION. The term of the Fund commenced on the filing of the Certificate
with the Secretary of State of the State of Delaware and shall continue until
the Fund is dissolved pursuant to Section 6.1 hereof.
2.5. BUSINESS OF THE FUND.
(a) The business of the Fund is to purchase, sell (including short sales),
invest and trade in Securities and engage in any financial or derivative
transactions relating thereto. Portions of the Fund's assets (which may
constitute, in the aggregate, all of the Fund's assets) may be invested in
general or limited partnerships and other pooled investment vehicles which
invest and trade in Securities or in separate managed accounts through which the
Fund may invest and trade in Securities, some or all of which may be advised by
one or more Portfolio Managers or Sub-Advisers. The Fund may execute, deliver
and perform all contracts, agreements and other undertakings and engage in all
activities and transactions as the General Partner may deem necessary or
advisable to carry out its objective or business.
(b) The Fund shall operate as a closed-end, management investment company in
accordance with the 1940 Act and subject to any fundamental policies and
investment restrictions set forth in the Form N-2.
2.6. GENERAL PARTNER.
(a) The General Partner may admit to the Fund any person, who shall agree to be
bound by all of the terms of this Agreement as a General Partner, as an
additional General Partner. The General Partner may admit to the Fund as a
substitute General Partner any person to which it has Transferred its Interest
as the General Partner pursuant to Section 4.3 hereof. Such person shall be
admitted immediately prior to the Transfer and shall continue the business of
the Fund without dissolution. The name and mailing address of the General
Partner and the Capital Contribution of the General Partner shall be reflected
on the books and records of the Fund.
(b) Each General Partner shall serve for the duration of the term of the Fund,
unless it ceases to be a general partner of the Fund pursuant to Section 4.1
hereof.
2.7. LIMITED PARTNERS. The General Partner may, at any time and without advance
notice to or consent from any other Partner, admit any person who shall agree to
be bound by all of the terms of this Agreement as an additional Limited Partner.
The General Partner may in its absolute discretion reject subscriptions for
Units in the Fund. The admission of any person as an additional Limited Partner
shall be effective upon the execution and delivery by, or on behalf of, such
additional Limited Partner of this Agreement or an instrument that constitutes
the execution and delivery of this Agreement. The General Partner shall cause
the books and records of the Fund to reflect the name and the required
contribution to the capital of the Fund of such additional Limited Partner. For
all purposes of the Delaware Act, the Limited Partners shall constitute a single
class or group of limited partners of the Fund.
2.8. ORGANIZATIONAL LIMITED PARTNER. Upon the admission to the Fund of any
Limited Partner, the Organizational Limited Partner shall withdraw from the Fund
as the Organizational Limited Partner and shall be entitled to the return of its
Capital Contribution, if any, without interest or deduction, and shall cease to
be a limited partner of the Fund.
2.9. BOTH GENERAL AND LIMITED PARTNER. A Partner may be simultaneously a General
Partner and a Limited Partner, in which event such Partner's rights and
obligations in each capacity shall be determined separately in accordance with
the terms and provisions hereof and as provided in the Delaware Act.
2.10. LIMITED LIABILITY. Except as provided under applicable law, a Limited
Partner shall not be liable for the Fund's obligations in any amount in excess
of the Capital Account balance of such Partner, plus such Partner's share of
undistributed profits and assets. In addition, subject to applicable law, a
Limited Partner shall be obligated to return to the Fund amounts distributed to
the Limited Partner in accordance with this Agreement if, after giving effect to
such distribution, the Fund's liabilities exceed the fair value of the Fund's
assets.
2.11. DIRECTORS.
(a) The number of Directors at the Closing Date shall be fixed at four.
Thereafter, the number of Directors shall be fixed from time to time by the
Directors then in office, which number may be greater, or lesser, than four;
provided, however, that no reduction in the number of Directors shall serve to
effect the removal of any Director. The Organizational Limited Partner hereby
approves the delegation by the General Partner to the Directors, pursuant to
Section 3.1 hereof, of certain of the General Partner's rights and powers.
(b) Each Director shall serve for the duration of the term of the Fund, unless
his or her status as a Director shall be sooner terminated pursuant to Section
2.11(d) hereof. If any vacancy in the position of a Director occurs, including
by reason of an increase in the number of Directors as contemplated by Section
2.11(a) hereof, the remaining Directors may appoint an individual to serve in
such capacity, so long as immediately after such appointment at least two-thirds
of the Directors then serving have been approved by the Partners. The Directors
may call a meeting of Partners to fill any vacancy in the position of a
Director, and shall do so within 60 days after any date on which Directors who
were approved by the Partners cease to constitute a majority of the Directors
then serving.
(c) If no Director remains, the General Partner shall promptly call a meeting of
the Partners, to be held within 60 days after the date on which the last
Director ceased to act in that capacity, for the purpose of determining whether
to continue the business of the Fund and, if the business shall be continued,
approving the appointment of the requisite number of Directors. If the Partners
shall determine at such meeting not to continue the business of the Fund, or if
the approval of the appointment of the requisite number of Directors is not
approved within 60 days after the date on which the last Director ceased to act
in that capacity, then the Fund shall be dissolved pursuant to Section 6.1
hereof and the assets of the Fund shall be liquidated and distributed pursuant
to Section 6.2 hereof.
(d) The status of a Director shall terminate if the Director (i) shall die; (ii)
shall be adjudicated incompetent; (iii) shall resign as a Director (upon not
less than 90 days' prior written notice to the other Directors); (iv) shall be
removed; (v) shall be certified by a physician to be mentally or physically
unable to perform his or her duties hereunder; or (vi) shall be determined to be
ineligible to serve as a director of a registered investment company pursuant to
the 1940 Act.
(e) Any Director may be removed by the vote or written consent of Partners
holding not less than two-thirds of the total number of votes eligible to be
cast by all Partners.
ARTICLE III
MANAGEMENT; ADVICE AND MANAGEMENT
3.1. MANAGEMENT AND CONTROL.
(a) The General Partner hereby irrevocably delegates to the Directors, except
for the power to execute documents on behalf of the Fund and to bind the Fund
and except to the extent any such delegation is not permitted under the Delaware
Act and so long as the Fund shall have Directors, its rights and powers to
manage and control the business affairs of the Fund, including without
limitation the complete authority to oversee and to establish policies regarding
the management, conduct and operation of the Fund's business, and to do all
things necessary and proper to carry out the objective and business of the Fund,
including, without limitation, the power to engage the General Partner to
provide Advice and Management, as well as to exercise such other rights and
powers expressly given to the Directors under this Agreement. The parties hereto
intend that, to the fullest extent permitted by law, and except to the extent
otherwise expressly provided herein, (i) each Director shall be vested with the
same powers and authority on behalf of the Fund as are customarily vested in
each director of a Delaware corporation and (ii) each Independent Director shall
be vested with the same powers and authority on behalf of the Fund as are
customarily vested in each director of a closed-end management investment
company registered under the 1940 Act that is organized as a Delaware
corporation who is not an "interested person" of such company as such term is
defined in the 1940 Act. During any period in which the Fund shall have no
Directors, the General Partner shall manage and control the Fund. Each Director
shall be the agent of the General Partner but shall not, for any purpose, be a
Partner. Notwithstanding the foregoing delegation, the General Partner will not
cease to be the general partner of the Fund and will continue to be liable as
such and in no event shall a Director be considered a general partner of the
Fund by agreement, estoppel or otherwise as a result of the performance of his
or her duties hereunder or otherwise. The General Partner retains only those
rights, powers and duties that have not been delegated hereunder. The Directors
may make Capital Contributions and own Units in the Fund.
(b) Global Asset Management (USA) Inc. shall be the designated tax matters
partner for purposes of Section 6231(a)(7) of the Code. Each Partner agrees not
to treat, on his personal return or in any claim for a refund, any item of
income, gain, loss, deduction or credit in a manner inconsistent with the
treatment of such item by the Fund. The tax matters partner shall have the
exclusive authority and discretion to make any elections required or permitted
to be made by the Fund under any provisions of the Code or any other revenue
laws.
(c) Limited Partners shall have no right to participate in and shall take no
part in the management or control of the Fund's business and shall have no
right, power or authority to act for or bind the Fund. Limited Partners shall
have the right to vote on any matters only as provided in this Agreement or on
any matters that require the approval of the holders of voting securities under
the 1940 Act.
3.2. ACTIONS BY DIRECTORS.
(a) Unless provided otherwise in this Agreement, the Directors shall act only:
(i) by the affirmative vote of a majority of the Directors (which majority shall
include any requisite number of Independent Directors required by the 0000 Xxx)
present at a meeting duly called at which a quorum of the Directors shall be
present either in person or, if permitted by the 1940 Act, by conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other; or (ii) by unanimous written
consent of all of the Directors without a meeting, if permissible under the 0000
Xxx.
(b) The Directors may designate from time to time a Chairman of the Directors,
who shall preside at all meetings. Meetings of the Directors may be called by
the General Partner, the Chairman or any two Directors, and may be held on such
date and at such time and place as the Directors shall determine. Each Director
shall be entitled to receive written notice of the date, time and place of such
meeting within a reasonable time in advance of the meeting. Notice need not be
given to any Director who shall attend a meeting without objecting to the lack
of notice or who shall execute a written waiver of notice with respect to the
meeting. A majority of the Directors then in office shall constitute a quorum at
any meeting.
(c) The Directors may appoint from time to time agents and employees of the Fund
who shall have the same powers and duties on behalf of the Fund as are
customarily vested in officers of a Delaware corporation, and designate them as
officers of the Fund by resolution of the Directors specifying their functions.
3.3. MEETINGS OF PARTNERS.
(a) Actions requiring the vote of the Partners may be taken at any duly
constituted meeting of the Partners at which a quorum is present. Meetings of
the Partners may be called by the General Partner, by the affirmative vote of a
majority of Directors then in office, or by Partners holding at least a majority
of the total number of votes eligible to be cast by all Partners, and may be
held at such time, date and place as the General Partner shall determine in the
case of meetings called by the General Partner or the Partners and at such time,
date and place as the Directors shall determine in the case of meetings called
by the Directors. In each case, the General Partner shall provide notice of the
meeting, stating the date, time and place of the meeting and the record date
therefor, to each Partner entitled to vote at the meeting within a reasonable
time prior thereto. Failure to receive notice of a meeting on the part of any
Partner shall not affect the validity of any act or proceeding of the meeting,
so long as a quorum shall be present at the meeting. Except as otherwise
required by applicable law, only matters set forth in the notice of a meeting
may be voted on by the Partners at a meeting. The presence in person or by proxy
of Partners holding a majority of the total number of votes eligible to be cast
by all Partners as of the record date shall constitute a quorum at any meeting.
In the absence of a quorum, a meeting may be adjourned to the time or times as
determined by the General Partner without additional notice to the Partners.
Except as otherwise required by any provision of this Agreement or of the 1940
Act, (i) those candidates receiving a plurality of the votes cast at any meeting
of Partners shall be elected as Directors and (ii) all other actions of the
Partners taken at a meeting shall require the affirmative vote of Partners
holding a majority of the total number of votes eligible to be cast by those
Partners who are present in person or by proxy at such meeting.
(b) Each Partner shall be entitled to cast at any meeting of Partners a number
of votes equivalent to such Partner's Fund Percentage as of the record date for
such meeting. The General Partner shall establish a record date not less than 10
nor more than 60 days prior to the date of any meeting of Partners to determine
eligibility to vote at such meeting and the number of votes which each Partner
will be entitled to cast thereat, and shall maintain for each such record date a
list setting forth the name of each Partner and the number of votes that each
Partner will be entitled to cast at the meeting.
(c) A Partner may vote at any meeting of Partners by a properly executed proxy
transmitted to the Fund at any time at or before the time of the meeting by
telegram, telecopier or other means of electronic communication or other
readable reproduction as contemplated by the provisions relating to proxies
applicable to Delaware corporations now or hereinafter in effect. A proxy may be
suspended or revoked, as the case may be, by the Partner executing the proxy by
a later writing delivered to the Fund at any time prior to exercise of the proxy
or if the Partner executing the proxy shall be present at the meeting and vote
in person. Any action of the Partners that is permitted to be taken at a meeting
of the Partners may be taken without a meeting if consents in writing, setting
forth the action to be taken, are signed by Partners holding a majority of the
total number of votes eligible to be cast or such greater percentage as may be
required under this Agreement to approve such action.
3.4. ADVICE AND MANAGEMENT.
(a) Among their powers, the Directors shall have the power to engage the General
Partner to provide Advice and Management to the Fund under their direction,
subject to the initial approval thereof prior to the Closing Date by the
Directors (including the vote of a majority of the Independent Directors at a
meeting called for such purpose) and by the Organizational Limited Partner. The
Directors also delegate to the General Partner the rights and powers expressly
given to the General Partner under this Agreement. The authority of the General
Partner granted under this Section 3.4 shall become effective upon such initial
approvals and shall terminate: (i) if any period of 12 consecutive months
following the first 12 consecutive months of the effectiveness of such authority
shall conclude without the approval of the continuation of such authority by
either (A) the vote of a majority (as defined in the 0000 Xxx) of the
outstanding voting securities of the Fund or (B) the Directors, and in either
case, approval by a majority of the Independent Directors by vote cast in person
at a meeting called for such purpose; (ii) if revoked by the Directors or by
vote of a majority (as defined in the 0000 Xxx) of the outstanding voting
securities of the Fund, in either case with 60 days' prior written notice to the
General Partner; or (iii) at the election of the General Partner with 60 days'
prior written notice to the Directors. The authority of the General Partner to
provide Advice and Management pursuant to this Section 3.4 shall automatically
terminate upon the occurrence of any event in connection with the General
Partner, its provision of Advice and Management, this Agreement or otherwise
which constitutes an "assignment" within the meaning of the 1940 Act. If the
authority of the General Partner under this Section 3.4 is terminated as
provided herein, the Directors may appoint, subject to the approval thereof by a
majority of the Independent Directors and by vote of a majority (as defined in
the 0000 Xxx) of the outstanding voting securities of the Fund, a person or
persons to provide Advice and Management to the Fund, and shall cause the terms
and conditions of such appointment to be stated in an agreement executed on
behalf of the Fund and such person or persons. Notwithstanding anything in this
Agreement to the contrary, upon receiving
the requisite approval set forth in the preceding sentence, the Fund, and the
General Partner on behalf of the Fund, shall have the power and authority to
enter into such agreement without any further act, vote or approval of any
Partner.
(b) So long as the General Partner has been and continues to be authorized to
provide Advice and Management, it shall have, subject to any policies and
restrictions set forth in any current offering memorandum issued by the Fund,
this Agreement, the Form N-2 or the 1940 Act, or adopted from time to time by
the Directors and communicated in writing to the General Partner, full
discretion and authority (i) to manage the assets and liabilities of the Fund
using a multi-manager investment management strategy as described in the
Memorandum, (ii) to identify and evaluate Portfolio Managers and Portfolio Funds
and to determine the assets of the Fund to be committed to each Portfolio
Manager and Portfolio Fund from time to time (subject to Section 3.4(b)(15) in
the case of Sub-Advisers), in each case subject to the terms and conditions of
the respective governing documents of each Portfolio Manager and Portfolio Fund,
(iii) to invest directly the assets of the Fund in liquid investments pending
allocation or reallocation of such assets in Portfolio Funds or to ensure the
availability of cash as required by the Fund in the ordinary course of its
business, and (iv) to manage the day-to-day business and affairs of the Fund. In
furtherance of and subject to the foregoing, the General Partner, except as
otherwise provided in this Agreement, shall have full power and authority on
behalf of the Fund:
(1) to purchase, sell, exchange, trade and otherwise deal in and with
Securities and other property of the Fund, including without
limitation interests in Portfolio Funds, and to loan Securities of the
Fund;
(2) to do any and all acts and exercise all rights with respect to the
Fund's interest in any person, firm, corporation, partnership or other
entity, including, without limitation, the voting of limited
partnership interests or shares of Portfolio Funds;
(3) to enter into subscription or other agreements relating to investments
in Portfolio Funds (subject to Section 3.4(b)(15) in the case of
agreements with Sub-Advisers), including without limitation agreements
irrevocably to forego the Fund's right to vote its interests or shares
of the Portfolio Funds;
(4) to enter into agreements with Portfolio Managers and Portfolio Funds
(subject to Section 3.4(b)(15) in the case of agreements with
Sub-Advisers) that provide for, among other things, the payment of
management fees and allocations of profits to Portfolio Managers and
the indemnification by the Fund of Portfolio Managers and Portfolio
Funds to the same or different extent as provided for in respect of
the General Partner, and to terminate such agreements;
(5) to open, maintain and close accounts with brokers and dealers, to make
all decisions relating to the manner, method and timing of Securities
and other investment transactions, to select and place orders with
brokers, dealers or other financial intermediaries for the execution,
clearance or settlement of any transactions on behalf of the Fund on
such terms as the General Partner considers appropriate, and to grant
limited discretionary authorization to such persons with respect to
price, time and other terms of investment and trading transactions;
(6) to borrow from banks or other financial institutions and to pledge
Fund assets as collateral therefor, to trade on margin, to exercise or
refrain from exercising all rights regarding the Fund's investments,
and to instruct custodians regarding the settlement of transactions,
the disbursement of payments to Partners with respect to repurchases
of Units and the payment of Fund expenses, including those relating to
the organization and registration of the Fund;
(7) to issue to any Partner an instrument certifying that such Partner is
the owner of Units;
(8) to call and conduct meetings of Partners at the Fund's principal
office or elsewhere as it may determine, and to assist the Directors
in calling and conducting meetings of the Directors;
(9) to engage and terminate such attorneys, accountants and other
professional advisers and consultants as the General Partner may deem
necessary or advisable in connection with the affairs of the Fund or
as may be directed by the Directors;
(10) subject to Section 3.4(b)(15), to engage the services of persons,
including GAM International Management Limited, to assist the General
Partner in providing, or to provide under the General Partner's
control and supervision, Advice and Management to the Fund at the
expense of the General Partner and to terminate such services;
(11) to assist in the preparation and filing of any required tax or
information returns to be made by the Fund;
(12) as directed by the Directors, to commence, defend and conclude any
action, suit, investigation or other proceeding that pertains to the
Fund or any assets of the Fund;
(13) if directed by the Directors, to arrange for the purchase of any
insurance covering the potential liabilities of the Fund or relating
to the performance of the Directors or the General Partner, or any of
their principals, directors, officers, members, employees and agents;
(14) to execute, deliver and perform such contracts, agreements and other
undertakings, and to engage in such activities and transactions as are
necessary and appropriate for the conduct of the business of the Fund;
and
(15) (A) to commit all or part of the Fund's assets to the discretionary
management of one or more Sub-Advisers, the selection of which shall
be subject to the approval of a majority (as defined in the 0000 Xxx)
of the Fund's outstanding voting securities, unless the Fund receives
an exemption from the provisions of the 1940 Act requiring such
approval, (B) to enter into agreements with the Sub-Advisers that
provide for, among other things, the indemnification by the Fund of
the Sub-Advisers to the same or different extent as provided for in
respect of the General Partner, and to terminate such agreements, and
(C) to authorize the payment
of fees and allocations of profits to Sub-Advisers pursuant to their
respective governing documents.
3.5. CUSTODY OF ASSETS OF THE FUND. Notwithstanding anything to the contrary
contained herein, the General Partner shall not have any authority to hold or
have possession or custody of any funds, Securities or other property of the
Fund. The physical possession of all funds, Securities or other property of the
Fund shall at all times be held, controlled and administered by one or more
custodians retained by the Fund. The General Partner shall have no
responsibility with respect to the collection of income or the physical
acquisition or safekeeping of the funds, Securities or other assets of the Fund,
and all such duties of collection, physical acquisition or safekeeping shall be
the sole obligation of such custodians.
3.6. BROKERAGE. In the course of selecting brokers, dealers and other financial
intermediaries for the execution, clearance and settlement of transactions for
the Fund pursuant to Sections 3.4(b)(5) and (6) hereof, the General Partner may,
subject to such policies as are adopted by the Fund and to the provisions of
applicable law, agree to such commissions, fees and other charges on behalf of
the Fund as it shall deem reasonable in the circumstances, taking into account
all such factors as it deems relevant, including the reliability of the broker,
financial responsibility of the broker, strength of the broker, ability of the
broker to efficiently execute transactions, the broker's facilities, and the
broker's provision or payment of the costs of research and other services which
are of benefit to the Fund and the General Partner and other clients of and
accounts managed by the General Partner, even if the cost of such services does
not represent the lowest cost available. The General Partner shall be under no
obligation to combine or arrange orders so as to obtain reduced charges unless
otherwise required under the Federal securities laws. The General Partner,
subject to such procedures as may be adopted by the Directors, may use
Affiliates of the General Partner as brokers to effect the Fund's Securities
transactions and the Fund may pay such commissions to such brokers in such
amounts as are permissible under applicable law.
3.7. OTHER ACTIVITIES.
(a) The General Partner shall not be required to devote full time to the affairs
of the Fund, but shall devote such time as may reasonably be required to perform
their obligations under this Agreement.
(b) Any Partner, and any Affiliate of any Partner, may engage in or possess an
interest in other business ventures or commercial dealings of every kind and
description, independently or with others, including, but not limited to,
acquisition and disposition of Securities, provision of investment advisory or
brokerage services, serving as directors, officers, employees, advisors or
agents of other companies, partners of any partnership, members of any limited
liability company, or trustees of any trust, or entering into any other
commercial arrangements. No Partner shall have any rights in or to such
activities of any other Partner, or any profits derived therefrom.
(c) The General Partner, and its members, directors, officers, employees and
beneficial owners, from time to time may acquire, possess, manage, hypothecate
and dispose of Securities or other investment assets, and engage in any other
investment transaction, for any account over
which it or they exercise discretionary authority, including their own accounts,
the accounts of their families, the account of any entity in which it or they
have a beneficial interest or the accounts of others for whom they may provide
investment advisory or other services, notwithstanding the fact that the Fund
may have or may take a position of any kind or otherwise; provided, however,
that the General Partner shall not cause the Fund to purchase any asset from or
sell any asset to any such discretionary account without the consent of the
Directors and in accordance with the 1940 Act.
(d) To the extent that at law or in equity the Directors or the General Partner
have duties (including fiduciary duties) and liabilities relating thereto to the
Fund or to any other Partner, any such person acting under this Agreement shall
not be liable to the Fund or to any other Partner for its good faith reliance on
the provisions of this Agreement. The provisions of this Agreement, to the
extent that they restrict the duties and liabilities of the General Partner or
the Directors otherwise existing at law or in equity, are agreed by the Partners
to replace such other duties and liabilities of such person.
3.8. DUTY OF CARE.
(a) The Directors and the General Partner, including any officer, director,
partner, member, principal, employee or agent of the foregoing, shall not be
liable to the Fund or to any of its Partners for any loss or damage occasioned
by any act or omission in the performance of such person's services under this
Agreement, unless it shall be determined by final judicial decision on the
merits from which there is no further right to appeal that such loss is due to
an act or omission of such person constituting willful misfeasance, bad faith,
gross negligence or reckless disregard of such person's duties hereunder.
(b) Limited Partners not in breach of any obligation hereunder or under any
agreement pursuant to which the Limited Partner subscribed for Units shall be
liable to the Fund, any Partner or third parties only as required by the
Delaware Act.
3.9. INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Fund shall, subject to Section
3.9(b) hereof, indemnify each General Partner (including for this purpose each
officer, director, member, partner, principal, employee or agent of, or any
person who controls, a General Partner or a member thereof, and their executors,
heirs, assigns, successors or other legal representatives) and each Director
(and their executors, heirs, assigns, successors or other legal representatives)
(each such person being referred to as an "indemnitee") against all losses,
claims, damages, liabilities, costs and expenses, including, but not limited to,
amounts paid in satisfaction of judgments, in compromise, or as fines or
penalties, and reasonable counsel fees, incurred in connection with the defense
or disposition of any action,
suit, investigation or other proceeding, whether civil or criminal, before any
judicial, arbitral, administrative or legislative body, in which such indemnitee
may be or may have been involved as a party or otherwise, or with which such
indemnitee may be or may have been threatened, while in office or thereafter, by
reason of being or having been a General Partner or Director of the Fund, or the
past or present performance of services to the Fund by such indemnitee, except
to the extent such loss, claim, damage, liability, cost or expense shall have
been finally determined in a decision on the merits in any such action, suit,
investigation or other proceeding to have been incurred or suffered by such
indemnitee by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of such indemnitee's
office. The rights of indemnification provided under this Section 3.9 shall not
be construed so as to provide for indemnification of an indemnitee for any
liability (including liability under federal securities laws which, under
certain circumstances, impose liability even on persons that act in good faith)
to the extent (but only to the extent) that such indemnification would be in
violation of applicable law, but shall be construed so as to effectuate the
applicable provisions of this Section 3.9 to the fullest extent permitted by
law.
(b) Expenses, including reasonable counsel fees, so incurred by any such
indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties) may be paid from time to time by the Fund
in advance of the final disposition of any such action, suit, investigation or
proceeding upon receipt of an undertaking by or on behalf of such indemnitee to
repay to the Fund amounts so paid if it shall ultimately be determined that
indemnification of such expenses is not authorized under Section 3.9(a) hereof;
provided, however, that (i) such indemnitee shall provide security for such
undertaking, (ii) the Fund shall be insured by or on behalf of such indemnitee
against losses arising by reason of such indemnitee's failure to fulfill his or
its undertaking, or (iii) a majority of the Independent Directors (excluding any
Director who is either seeking advancement of expenses hereunder or is or has
been a party to any other action, suit, investigation or proceeding involving
claims similar to those involved in the action, suit, investigation or
proceeding giving rise to a claim for advancement of expenses hereunder) or
independent legal counsel in a written opinion shall determine based on a review
of readily available facts (as opposed to a full trial-type inquiry) that there
is reason to believe such indemnitee ultimately will be entitled to
indemnification.
(c) As to the disposition of any action, suit, investigation or proceeding
(whether by a compromise payment, pursuant to a consent decree or otherwise)
without an adjudication or a decision on the merits by a court, or by any other
body before which the proceeding shall have been brought, that an indemnitee is
liable to the Fund or its Partners by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
such indemnitee's office, indemnification shall be provided pursuant to Section
3.9(a) hereof if (i) approved as in the best interests of the Fund by a majority
of the Independent Directors (excluding any Director who is either seeking
indemnification hereunder or is or has been a party to any other action, suit,
investigation or proceeding involving claims similar to those involved in the
action, suit, investigation or proceeding giving rise to a claim for
indemnification hereunder) upon a determination based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that such indemnitee
acted in good faith and in the reasonable belief that such actions were in the
best interests of the Fund and that such indemnitee is not liable to the Fund or
its Partners by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of such indemnitee's
office, or (ii) the Directors secure a written opinion of independent legal
counsel based upon a review of readily available facts (as opposed to a full
trial-type inquiry) to the effect that such indemnification would not protect
such indemnitee against any liability to the Fund or its Partners to which such
indemnitee 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 indemnitee's office.
(d) Any indemnification or advancement of expenses made pursuant to this Section
3.9 shall not prevent the recovery from any indemnitee of any such amount if
such indemnitee subsequently shall be determined in a decision on the merits in
any action, suit, investigation or proceeding involving the liability or expense
that gave rise to such indemnification or advancement of expenses to be liable
to the Fund or its Partners by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office. In any suit brought by an indemnitee to enforce a right to
indemnification under this Section 3.9 it shall be a defense that, and in any
suit in the name of the Fund to recover any indemnification or advancement of
expenses made pursuant to this Section 3.9 the Fund shall be entitled to recover
such expenses upon a final adjudication that, the indemnitee has not met the
applicable standard of conduct set forth in this Section 3.9. In any such suit
brought to enforce a right to indemnification or to recover any indemnification
or advancement of expenses made pursuant to this Section 3.9, the burden of
proving that the indemnitee is not entitled to be indemnified, or to any
indemnification or advancement of expenses, under this Section 3.9 shall be on
the Fund (or any Partner acting derivatively or otherwise on behalf of the Fund
or its Partners).
(e) An indemnitee may not satisfy any right of indemnification or advancement of
expenses granted in this Section 3.9 or to which he or it may otherwise be
entitled except out of the assets of the Fund, and no Partner shall be
personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided hereunder shall not be exclusive of
or affect any other rights to which any person may be entitled by contract or
otherwise under law. Nothing contained in this Section 3.9 shall affect the
power of the Fund to purchase and maintain liability insurance on behalf of any
General Partner, Director or other person.
(g) The General Partner may enter into agreements indemnifying persons providing
services to the Fund to the same extent as set forth in this Section 3.9.
3.10. FEES, EXPENSES AND REIMBURSEMENT.
(a) As consideration for providing Advice and Management, and for so long as the
General Partner shall provide Advice and Management to the Fund, the Fund will
pay the General Partner a monthly management fee at the annual rate of 2% of the
value of each Limited Partner's Capital Account as of the first business day of
each month (the "Management Fee"), which amount shall be charged as of such date
to the Capital Account of each Limited Partner. The Management Fee will be
computed based on the Capital Account of each Limited Partner as of the end of
business on the last business day of each month, after adjustment for any
subscriptions effective on such date and before giving effect to any repurchase
of Units effective as of such date, and will be due and payable in arrears
within five business days after the end of the month. The General Partner may
waive or reduce the Management Fee calculated with respect to, and deducted
from, the Capital Account of any Limited Partner and may pay all or part of the
Management Fee to third parties for services rendered in connection with the
placement of Units.
(b) The Fund shall compensate each Director for his or her services hereunder as
may be agreed to by the Directors and the General Partner. In addition, the Fund
shall reimburse the
Directors for reasonable out-of-pocket expenses incurred by them in performing
their duties under this Agreement.
(c) The Fund will deduct from all subscriptions for Units in the Fund, and pay
to GAM Services, Inc. or any selling agent appointed by GAM Services, Inc., a
front-end sales charge in an amount not to exceed 5% of the amount of the
subscription, or such lesser amount as shall be agreed with respect to any
investor from time to time by the General Partner and GAM Services, Inc. or any
such selling agent. The Capital Contribution credited to the Capital Account of
each Partner shall be the net amount invested in the Fund after deduction of
such sales charge.
(d) The Fund shall bear all expenses incurred in the business of the Fund other
than those specifically required to be borne by the General Partner pursuant to
this Agreement. Expenses to be borne by the Fund include, but are not limited
to, the following:
(1) all costs and expenses related to portfolio transactions and positions
for the Fund's account, including, but not limited to, brokerage
commissions, research fees, interest and commitment fees on loans and
debit balances, borrowing charges on Securities sold short, dividends
on Securities sold short but not yet purchased, custodial fees, margin
fees, transfer taxes and premiums, taxes withheld on foreign
dividends, and indirect expenses from investments in Portfolio Funds;
(2) all costs and expenses associated with the organization and
registration of the Fund, the offering of Units, and compliance with
any applicable Federal or state laws;
(3) all costs and expenses associated with the organization of Portfolio
Funds managed by Sub-Advisers and with the selection of Portfolio
Managers, including due diligence and travel-related expenses;
(4) the costs and expenses of holding any meetings of any Partners that
are permitted or are required to be held by this Agreement, the 1940
Act or other applicable law;
(5) fees and disbursements of any attorneys, accountants, auditors and
other consultants and professionals engaged on behalf of the Fund;
(6) the costs of a fidelity bond and any liability insurance obtained on
behalf of the Fund, the General Partner or the Directors;
(7) all costs and expenses of preparing, setting in type, printing and
distributing reports and other communications to Limited Partners;
(8) all expenses of computing the net asset value of the Fund and the
Units, including any equipment or services obtained for the purpose of
valuing the Fund's investment portfolio;
(9) all charges for equipment or services used for communications between
the Fund and any custodian or other agent engaged by the Fund;
(10) fees payable to custodians and other persons providing administrative
or transfer agent services to the Fund; and
(11) such other types of expenses as may be approved from time to time by
the Directors, other than those required to be borne by the General
Partner.
The General Partner shall be entitled to reimbursement from the Fund for any of
the above expenses that it pays on behalf of the Fund.
ARTICLE IV
TERMINATION OF STATUS OF GENERAL PARTNER;
REMOVAL OF GENERAL PARTNER;
TRANSFERS AND REPURCHASES
4.1. TERMINATION OF STATUS OF THE GENERAL PARTNER.
(a) A General Partner shall cease to be a general partner of the Fund if the
General Partner (i) shall be dissolved or otherwise shall terminate its
existence; (ii) shall voluntarily withdraw as General Partner; (iii) shall be
removed; (iv) shall transfer its entire Interest as General Partner as permitted
under Section 4.3 hereof and such person to which such Interest is transferred
is admitted as a substitute General Partner pursuant to Section 2.6(a) hereof;
or (v) shall otherwise cease to be a general partner of the Fund under Section
17-402(a) of the Delaware Act.
(b) A General Partner may not withdraw voluntarily as a General Partner until
the earliest of (i) one year from the date on which the General Partner shall
have given the Directors written notice of its intention to effect such
withdrawal (or upon lesser notice if, in the opinion of counsel to the Fund,
such withdrawal is not likely to cause the Fund to lose its partnership tax
classification) or as otherwise permitted by the 1940 Act; (ii) the date on
which the authority of the General Partner to provide Advice and Management is
terminated (other than at the election of the General Partner) pursuant to
Section 3.4(a) hereof, unless within 30 days after such termination the
Directors request the General Partner not to withdraw, in which case 180 days
after the date of such termination, unless a successor general partner is
earlier approved by the Fund; and (iii) the date on which one or more persons
shall have agreed to assume the obligations of the General Partner hereunder
with the approval of the Directors and such other approvals as may be required
by the 1940 Act.
4.2. REMOVAL OF GENERAL PARTNER. Any General Partner may be removed by the vote
or written consent of Partners holding not less than two-thirds of the total
number of votes eligible to be cast by all Partners.
4.3. TRANSFER OF INTEREST OF GENERAL PARTNER. A General Partner may not Transfer
its Interest as the General Partner except to persons who have agreed to be
bound by all of the terms of this Agreement and pursuant to applicable law. By
executing this Agreement, each other Partner shall be deemed to have consented
to any such Transfer permitted by the preceding sentence.
4.4. TRANSFER OF UNITS OF LIMITED PARTNERS.
(a) Units held by a Limited Partner may be Transferred only (i) by operation of
law pursuant to the death, bankruptcy, insolvency or dissolution of such Limited
Partner or (ii) with the written consent of the General Partner (which may be
withheld in the General Partner's sole and absolute discretion). In addition,
the General Partner may not consent to a Transfer of Units of a Limited Partner
unless the person to whom such Units are transferred (or each of such person's
equity owners if such a person is a "private investment company" as defined in
Rule 205-3(d)(3) under the Advisers Act, an investment company registered under
the 1940 Act, or a business development company as defined under the Advisers
Act) is a person whom the General Partner believes meets the requirements of
paragraph (d)(1) of Rule 205-3 under the Advisers Act or successor rule thereto,
or is otherwise exempt from such requirements. If any transferee does not meet
such investor eligibility requirements, the Fund reserves the right to redeem
such investor's Units. In addition to the foregoing, no Limited Partner shall be
permitted to Transfer such Limited Partner's Units unless after such Transfer
the balance of the Capital Account of the transferee, and of the Limited Partner
Transferring less than the Partner's entire Interest, is at least equal to the
amount of the Limited Partner's initial Capital Contribution. Any permitted
transferee shall be entitled to the allocations and distributions allocable to
the Units so acquired and to Transfer such Units in accordance with the terms of
this Agreement, but shall not be entitled to the other rights of a Limited
Partner unless and until such transferee becomes a substituted Limited Partner.
If a Limited Partner Transfers Units with the approval of the General Partner,
the General Partner shall promptly take all necessary actions so that each
transferee or successor to whom such Units is transferred is admitted to the
Fund as a Limited Partner. The admission of any transferee as a substituted
Limited Partner shall be effective upon the execution and delivery by, or on
behalf of, such substituted Limited Partner of this Agreement or an instrument
that constitutes the execution and delivery of this Agreement. Each Limited
Partner and transferee agrees to pay all expenses, including attorneys' and
accountants' fees, incurred by the Fund in connection with such Transfer.
(b) Each Limited Partner shall indemnify and hold harmless the Fund, the General
Partner, the Directors, each other Limited Partner and any Affiliate of the
foregoing against all losses, claims, damages, liabilities, costs and expenses
(including legal or other expenses incurred in investigating or defending
against any such losses, claims, damages, liabilities, costs and expenses or any
judgments, fines and amounts paid in settlement), joint or several, to which
such persons may become subject by reason of or arising from (i) any Transfer
made by such Limited Partner in violation of this Section 4.4 and (ii) any
misrepresentation by such Limited Partner in connection with any such Transfer.
4.5. REPURCHASE OF INTERESTS.
(a) Except as otherwise provided in this Agreement, no Partner or other person
holding Units shall have the right to withdraw or tender Units to the Fund for
repurchase. The Directors may from time to time, in their complete and exclusive
discretion and on such terms and conditions as the Directors may determine,
cause the Fund to repurchase Units pursuant to written tenders. In determining
whether to cause the Fund to repurchase Units pursuant to written tenders, the
Directors shall consider the following factors, among others:
(1) whether any Partners have requested to tender Units to the Fund;
(2) the liquidity of the Fund's assets;
(3) the investment plans and working capital requirements of the Fund;
(4) the relative economies of scale with respect to the size of the Fund;
(5) the history of the Fund in repurchasing Units;
(6) the condition of the securities markets; and
(7) the anticipated tax consequences of any proposed repurchases of Units.
The Directors shall cause the Fund to repurchase Units pursuant to written
tenders only on terms fair to the Fund and to all Partners and persons holding
Interests acquired from Partners, as applicable.
(b) Except as set forth in Sections 4.5(c) and (d) hereof, a General Partner may
tender its Units under Section 4.5(a) hereof only if and to the extent that (1)
such repurchase would not cause the value of the Capital Account of the General
Partner to be less than the value thereof required to be maintained pursuant to
Section 5.1(c) hereof, or (2) in the opinion of legal counsel to the Fund, such
repurchase would not jeopardize the classification of the Fund as a partnership
for U.S. Federal income tax purposes.
(c) More than 180 days after termination of the authority to provide Advice and
Management, the General Partner may, by written notice to the Directors, tender
to the Fund all or any portion of its Capital Account, established and
maintained by it as a general partner of the Fund, which it is not required to
maintain pursuant to Section 5.1(c) hereof until it ceases to be a general
partner of the Fund pursuant to Section 4.1(a) hereof. Within 30 days after the
receipt of such notice, the Directors shall cause the tendered portion of such
Capital Account to be repurchased by the Fund for cash.
(d) If a General Partner ceases to be a general partner of the Fund pursuant to
Section 4.1 hereof and the business of the Fund is continued pursuant to Section
6.1(a)(2) hereof, the former General Partner (or its trustee or other legal
representative) may, by written notice to the Directors within 60 days of the
action resulting in the continuation of the Fund pursuant to Section 6.1(a)(2)
hereof, tender to the Fund all or any portion of its Interest. Within 30 days
after the receipt of such notice, the Directors shall cause such Interest to be
repurchased by the Fund for cash in an amount equal to the balance of the former
General Partner's Capital Account or applicable portion thereof. If the former
General Partner does not tender to the Fund all of its Interest as permitted by
this Section 4.5(d), such Interest shall be thereafter deemed to be and shall be
treated in all respects as the Interest of a Limited Partner.
(e) The General Partner may cause the Fund to repurchase Units of a Limited
Partner or any person acquiring Units from or through a Limited Partner in the
event that the General Partner determines or has reason to believe that:
(1) such Units have been transferred in violation of Section 4.4 hereof,
or such Units have vested in any person by operation of law as the
result of the death, dissolution, bankruptcy or incompetence of a
Partner;
(2) ownership of such Units by a Partner or other person will cause the
Fund to be in violation of, or require registration of any Units
under, or subject the Fund to additional registration or regulation
under, the securities or commodities laws of the United States or any
other relevant jurisdiction;
(3) continued ownership of Units may be harmful or injurious to the
business or reputation of the Fund, the Directors or the General
Partner, or may subject the Fund or any of the Partners to an undue
risk of adverse tax or other fiscal consequences;
(4) any of the representations and warranties made by a Partner in
connection with the acquisition of Units was not true when made or has
ceased to be true; or
(5) it would be in the best interests of the Fund, as determined by the
General Partner, for the Fund to repurchase such Units.
(f) Repurchases of Units by the Fund shall be payable in cash, without interest,
or, in the discretion of the Directors and subject to any applicable rules, in
Securities (or any combination of Securities and cash) of equivalent value. All
such repurchases shall be subject to any and all conditions as the General
Partner may impose and shall be effective as of a date set by the General
Partner after receipt by the Fund of all eligible written tenders of Units. The
amount due to any Partner whose Units are repurchased shall be equal to the net
asset value of the Units repurchased as of the effective date of repurchase,
after giving effect to all allocations to be made to such Partner's Capital
Account as of such date. Notwithstanding anything to the contrary in this
Agreement, and subject to compliance with any applicable rules, a Partner may be
compelled to accept a distribution of any asset in kind from the Fund despite
the fact that the percentage of the asset distributed to such Partner exceeds
the percentage of that asset which is equal to the percentage in which such
Partner shares in distributions from the Fund.
ARTICLE V
CAPITAL
5.1. CONTRIBUTIONS TO CAPITAL.
(a) The minimum initial contribution of each Partner to the capital of the Fund
shall be $50,000 ($25,000 for employees or directors of the General Partner and
its affiliates, and members of their immediate families, and, in the sole
discretion of the General Partner, attorneys, accountants or other professional
advisors engaged on behalf of the Fund, and members of their immediate families)
or such other amount as the General Partner may determine from time to time. The
amount of the initial Capital Contribution of each Partner shall be recorded by
the General Partner upon acceptance as a contribution to the capital of the
Fund.
(b) The Limited Partners may make additional contributions to the capital of the
Fund effective as of such times and in such amounts as the General Partner may
permit, but no Limited
Partner shall be obligated to make any additional contribution to the capital of
the Fund except to the extent provided in Section 5.6 hereof.
(c) A General Partner may make additional contributions to the capital of the
Fund effective as of such times and in such amounts as it may determine, and
shall be required to make additional contributions to the capital of the Fund
from time to time to the extent necessary to maintain the balance of its Capital
Account at an amount, if any, necessary to ensure that the Fund will be treated
as a partnership for Federal income tax purposes. Except as provided above or in
the Delaware Act, no General Partner shall be required or obligated to make any
additional contributions to the capital of the Fund.
(d) Subject to the provisions of the 1940 Act, and except as otherwise permitted
by the General Partner, (i) initial and any additional contributions to the
capital of the Fund by any Partner shall be payable in cash or in such
Securities that the General Partner, in its absolute discretion, may agree to
accept on behalf of the Fund, and (ii) initial and any additional contributions
in cash shall be payable in readily available funds at the date of the proposed
acceptance of the contribution. The Fund shall charge each Partner making a
contribution in Securities to the capital of the Fund such amount as may be
determined by the General Partner not exceeding 2% of the value of such
contribution in order to reimburse the Fund for any costs incurred by the Fund
by reason of accepting such Securities, and any such charge shall be due and
payable by the contributing Partner in full at the time the contribution to the
capital of the Fund to which such charges relate is due. The value of
contributed Securities shall be determined in accordance with Section 7.3 hereof
as of the date of contribution.
(e) The minimum initial and additional contributions set forth in (a) and (b) of
this Section 5.1 may be increased or reduced by the General Partner.
(f) The Fund shall issue additional Units to Partners making additional
contributions. The number of Units shall be determined by dividing the amount of
the additional contribution by the net asset value per Unit as of the date the
contribution is accepted.
5.2. RIGHTS OF PARTNERS TO CAPITAL. No Partner shall be entitled to interest on
such Partner's contribution to the capital of the Fund, nor shall any Partner be
entitled to the return of any capital of the Fund except (i) upon the repurchase
by the Fund of all or a portion of such Partner's Units pursuant to Section 4.5
hereof, (ii) pursuant to the provisions of Section 5.6(b) hereof or (iii) upon
the liquidation of the Fund's assets pursuant to Section 6.2 hereof. No Partner
shall be liable for the return of any such amounts. To the fullest extent
permitted by applicable law, no Partner shall have the right to require
partition of the Fund's property or to compel any sale or appraisal of the
Fund's assets.
5.3. CAPITAL ACCOUNTS.
(a) The Fund shall maintain a separate Capital Account for each Partner.
(b) Each Partner's Capital Account shall have an initial balance equal to the
amount of cash and the value of any Securities (determined in accordance with
Section 7.3 hereof) constituting such Partner's initial contribution to the
capital of the Fund.
(c) Each Partner's Capital Account shall be increased by the sum of (i) the
amount of cash and the value of any Securities (determined in accordance with
Section 7.3 hereof) constituting additional contributions by such Partner to the
capital of the Fund permitted pursuant to Section 5.1 hereof, plus (ii) any
amount credited to such Partner's Capital Account pursuant to Sections 5.4
through 5.6 hereof.
(d) Each Partner's Capital Account shall be reduced by the sum of (i) the amount
of any repurchase of the Units of such Partner or distributions to such Partner
pursuant to Sections 4.5, 5.10 or 6.2 hereof which are not reinvested, plus (ii)
any amounts debited against such Partner's Capital Account pursuant to Sections
5.4 through 5.6 hereof.
(e) In the event all or a portion of the Units of a Partner is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent of the transferred Units.
5.4. ALLOCATION OF NET PROFIT AND LOSS. Subject to Section 5.7 hereof, as of the
last day of each Fiscal Period, any Net Profit or Net Loss for the Fiscal Period
shall be allocated among and credited to or debited against the Capital Accounts
of the Partners in accordance with their respective Fund Percentages for such
Fiscal Period.
5.5. ALLOCATION OF CERTAIN WITHHOLDING TAXES AND OTHER EXPENDITURES.
(a) If the Fund incurs a withholding tax or other tax obligation with respect to
the share of Fund income allocable to any Partner, then the General Partner,
without limitation of any other rights of the Fund or the General Partner, shall
cause the amount of such obligation to be debited against the Capital Account of
such Partner when the Fund pays such obligation, and any amounts then or
thereafter distributable to such Partner shall be reduced by the amount of such
taxes. If the amount of such taxes is greater than any such distributable
amounts, then such Partner and any successor to such Partner's Interest shall
pay to the Fund as a contribution to the capital of the Fund, upon demand to the
General Partner, the amount of such excess. A General Partner shall not be
obligated to apply for or obtain a reduction of or exemption from withholding
tax on behalf of any Partner that may be eligible for such reduction or
exemption; provided that in the event that the General Partner determines that a
Partner is eligible for a refund of any withholding tax, the General Partner
may, at the request and expense of such Partner, assist such Partner in applying
for such refund.
(b) Except as otherwise provided for in this Agreement and unless prohibited by
the 1940 Act, any expenditures payable by the Fund, to the extent determined by
the General Partner to have been paid or withheld on behalf of, or by reason of
particular circumstances applicable to, one or more but fewer than all of the
Partners, shall be charged to only those Partners on whose behalf such payments
are made or whose particular circumstances gave rise to such payments. Such
charges shall be debited from the Capital Accounts of such Partners as of the
close of the Fiscal Period during which any such items were paid or accrued by
the Fund.
5.6. RESERVES.
(a) Appropriate reserves may be created, accrued and charged against Net Assets
and proportionately against the Capital Accounts of the Partners for contingent
liabilities, if any, as of the date any such contingent liability becomes known
to the General Partner, such reserves to be in the amounts which the General
Partner in its sole discretion deem necessary or appropriate. The General
Partner may increase or reduce any such reserves from time to time by such
amounts as it in its sole discretion deems necessary or appropriate. The amount
of any such reserve, or any increase or decrease therein, shall be
proportionately charged or credited, as appropriate, to the Capital Accounts of
those parties who are Partners at the time when such reserve is created,
increased or decreased, as the case may be; provided, however, that if any such
individual reserve item, adjusted by any increase therein, exceeds the lesser of
$500,000 or 1% of the aggregate value of the Capital Accounts of all such
Partners, then the amount of such reserve, increase, or decrease may instead, at
the discretion of the General Partner, be charged or credited to those parties
who were Partners at the time, as determined by the General Partner in its sole
discretion, of the act or omission giving rise to the contingent liability for
which the reserve was established, increased or decreased in proportion to their
Capital Accounts.
(b) If any amount is required by Section 5.6(a) to be charged or credited to a
party who is no longer a Partner, such amount shall be paid by or to such party,
as the case may be, in cash, with interest from the date on which the General
Partner determines that such charge or credit is required. In the case of a
charge, the former Partner shall be obligated to pay the amount of the charge,
plus interest as provided above, to the Fund on demand; provided, however, that
(i) in no event shall a former Partner be obligated to make a payment exceeding
the amount of such Partner's Capital Account at the time to which the charge
relates; and (ii) no such demand shall be made after the expiration of three
years from the date on which such party ceased to be a Partner. To the extent
that a former Partner fails to pay to the Fund, in full, any amount required to
be charged to such former Partner pursuant to paragraph (a), the deficiency
shall be charged proportionately to the Capital Accounts of the Partners at the
time of the act or omission giving rise to the charge to the extent feasible,
and otherwise proportionately to the Capital Accounts of the current Partners.
5.7. ALLOCATION TO AVOID CAPITAL ACCOUNT DEFICITS. To the extent that any debits
pursuant to Sections 5.4 through 5.6 hereof would reduce the balance of the
Capital Account of any Limited Partner below zero, that portion of any such
debits instead shall be allocated to the Capital Account of the General Partner.
Any credits in any subsequent Fiscal Period which otherwise would be allocable
pursuant to Sections 5.4 through 5.6 hereof to the Capital Account of any
Limited Partner previously affected by the application of this Section 5.7
instead shall be allocated to the Capital Account of the General Partner in such
amounts as are necessary to offset all previous debits attributable to such
Limited Partner, pursuant to this Section 5.7, that have not been recovered.
5.8. ALLOCATIONS PRIOR TO CLOSING DATE. Any net cash profits or any net cash
losses realized by the Fund from the purchase or sale of Securities during the
period ending on the day prior to the Closing Date shall be allocated to the
Capital Account of the General Partner. (No unrealized item of profit or loss
shall be allocated pursuant to this Section 5.8 to the Capital Account of any
Partner.)
5.9. TAX ALLOCATIONS. For each taxable year of the Fund, items of income,
deduction, gain, loss or credit shall be allocated for income tax purposes among
the Partners in such a manner as to reflect equitably amounts credited or
debited to each Partner's Capital Account for the current and prior taxable
years (or relevant portions thereof). Allocations under this Section 5.9 shall
be made pursuant to the principles of Sections 704(b) and 704(c) of the Code,
and in conformity with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f),
1.704-1(b)(4)(i) and 1.704-3(e) promulgated thereunder, as applicable, or the
successor provisions to such Section and Regulations. Notwithstanding anything
to the contrary in this Agreement, there shall be allocated to the Partners such
gains or income as shall be necessary to satisfy the "qualified income offset"
requirement of Treasury Regulations Section 1.704-1(b)(2)(ii)(d).
If the Fund realizes net capital gains for Federal income tax purposes for
any taxable year during or as of the end of which one or more Positive Basis
Partners (as hereinafter defined) withdraw from the Fund pursuant to Articles IV
or VI hereof, the General Partner may elect to allocate such net gains as
follows: (i) to allocate such net gains among such Positive Basis Partners, pro
rata in proportion to the respective Positive Basis (as hereinafter defined) of
each such Positive Basis Partner, until either the full amount of such net gains
shall have been so allocated or the Positive Basis of each such Positive Basis
Partner shall have been eliminated, and (ii) to allocate any net gains not so
allocated to Positive Basis Partners to the other Partners in such manner as
shall reflect equitably the amounts credited to such Partners' Capital Accounts.
As used herein, (i) the term "Positive Basis" shall mean, with respect to
any Partner and as of any time of calculation, the amount by which the total of
such Partner's Capital Account as of such time exceeds such Partner's "adjusted
tax basis," for Federal income tax purposes, in such Partner's Interest in the
Fund as of such time (determined without regard to any adjustments made to such
"adjusted tax basis" by reason of any transfer or assignment of such Interest,
including by reason of death), and (ii) the term "Positive Basis Partner" shall
mean any Partner who withdraws from the Fund and who has a Positive Basis as of
the effective date of such Partner's withdrawal.
5.10. DISTRIBUTIONS.
(a) The General Partner may authorize the Fund to make distributions in cash or
in kind at any time to all of the Partners on a pro rata basis in accordance
with the Partners' Fund Percentages.
(b) The General Partner may withhold taxes from any distribution to any Partner
to the extent required by the Code or any other applicable law. For purposes of
this Agreement, any taxes so withheld by the Fund with respect to any amount
distributed by the Fund to any Partner shall be deemed to be a distribution or
payment to such Partner, reducing the amount otherwise distributable to such
Partner pursuant to this Agreement and reducing the Capital Account of such
Partner.
(c) Notwithstanding any provision to the contrary contained in this Agreement,
the Fund and the General Partner on behalf of the Fund shall not make a
distribution to any Partner on account
of such Partner's Interest in the Fund if such distribution would violate
Section 17-607 of the Delaware Act or other applicable law.
ARTICLE VI
DISSOLUTION AND LIQUIDATION
6.1. DISSOLUTION.
(a) The Fund shall be dissolved if at any time there are no Limited Partners or
upon the occurrence of any of the following events:
(1) upon the affirmative vote to dissolve the Fund by both (i) the
Directors and (ii) Partners holding at least two-thirds of the total
number of votes eligible to be cast by all Partners;
(2) upon either of (i) an election by the General Partner to dissolve the
Fund or (ii) a General Partner ceasing to be a general partner of the
Fund pursuant to Section 4.1 hereof (other than in conjunction with a
Transfer of the Interest of a General Partner permitted by Section 4.3
hereof to a person who is admitted as a substitute General Partner
pursuant to Section 2.6(a) hereof), unless (a) as to the event set
forth in clause (ii) above, there is at least one other general
partner of the Fund who is authorized to and does carry on the
business of the Fund, and (b) as to either event, both the Directors
and the Partners holding not less than two-thirds of the total number
of votes eligible to be cast by all Partners shall elect within 60
days after such event to continue the business of the Fund and a
person to be admitted to the Fund, effective as of the date of such
event, as an additional General Partner has agreed to make such
contributions to the capital of the Fund as are required to be made
pursuant to Section 5.1(c) hereof;
(3) upon the failure of Partners to approve successor Directors at a
meeting called by the General Partner in accordance with Section
2.11(c) hereof when no Director remains to continue the business of
the Fund; or
(4) upon the expiration of any two-year period which commences on the date
on which any Limited Partner has submitted a written notice to the
Fund requesting to tender such Partner's entire Interest for
repurchase by the Fund if such Limited Partner has not been permitted
to do so at any time during such period; or
(5) as required by operation of law.
Dissolution of the Fund shall be effective on the later of the day on which
the event giving rise to the dissolution shall occur or, to the extent permitted
by the Delaware Act, the conclusion of any applicable 60-day period during which
the Directors and Partners may elect to continue the business of the Fund as
provided above, but the Fund shall not terminate until the assets of the Fund
have been liquidated in accordance with Section 6.2 hereof and the Certificate
has been canceled.
(b) Except as provided in Section 6.1(a) hereof or in the Delaware Act, the
death, mental illness, dissolution, termination, liquidation, bankruptcy,
reorganization, merger, sale of substantially all of the stock or assets of, or
other change in the ownership or nature of a Partner, the admission to the Fund
of a new Partner, the withdrawal of a Partner from the Fund, or the transfer by
a Partner of such Partner's Interest to a third party shall not cause the Fund
to dissolve.
6.2. LIQUIDATION OF ASSETS.
(a) Upon the dissolution of the Fund as provided in Section 6.1 hereof, the
General Partner shall promptly liquidate the business and administrative affairs
of the Fund, except that if the General Partner is unable to perform this
function, a liquidator elected by Partners holding a majority of the total
number of votes eligible to be cast by all Partners shall promptly liquidate the
business and administrative affairs of the Fund. Net Profit and Net Loss during
the period of liquidation shall be allocated pursuant to Article V hereof.
Subject to the Delaware Act, the proceeds from liquidation (after establishment
of appropriate reserves for all claims and obligations, including all
contingent, conditional or unmatured claims and obligations in such amount as
the General Partner or liquidator shall deem appropriate in its sole discretion
as applicable) shall be distributed in the following manner:
(1) the debts of the Fund, other than debts, liabilities or obligations to
Partners, and the expenses of liquidation (including legal and
accounting expenses incurred in connection therewith), up to and
including the date that distribution of the Fund's assets to the
Partners has been completed, shall first be paid on a pro rata basis;
(2) such debts, liabilities or obligations as are owing to the Partners
shall be paid next in their order of seniority and on a pro rata
basis; and
(3) the Partners shall be paid next on a pro rata basis the positive
balances of their respective Capital Accounts after giving effect to
all allocations to be made to such Partners' Capital Accounts for the
Fiscal Period ending on the date of the distributions under this
Section 6.2(a)(3).
(b) Anything in this Section 6.2 to the contrary notwithstanding, upon
dissolution of the Fund, subject to the Delaware Act and the priorities set
forth in Section 6.2(a), the General Partner or other liquidator may distribute
ratably in-kind any assets of the Fund; provided, however, that if any in-kind
distribution is to be made (i) the assets distributed in kind shall be valued
pursuant to Section 7.3 hereof as of the actual date of their distribution and
charged as so valued and distributed against amounts to be paid under Section
6.2(a) above, and (ii) any profit or loss attributable to property distributed
in-kind shall be included in the Net Profit or Net Loss for the Fiscal Period
ending on the date of such distribution. Notwithstanding anything to the
contrary in this Agreement, the General Partner may compel a Partner to accept a
distribution of any asset in-kind from the Fund notwithstanding that the
percentage of the asset distributed to the Partner exceeds a percentage of that
asset that is equal to the percentage in which such Partner shares in
distributions from the Fund.
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
7.1. ACCOUNTING AND REPORTS.
(a) The Fund shall adopt for tax accounting purposes any accounting method which
the General Partner shall decide in its sole discretion is in the best interests
of the Fund. The Fund's accounts shall be maintained in U.S. currency.
(b) After the end of each taxable year, the Fund shall furnish to each Partner
such information regarding the operation of the Fund and such Partner's Interest
as is necessary for Partners to complete Federal and state income tax or
information returns and any other tax information required by federal or state
law.
(c) Except as otherwise required by the 1940 Act, or as may otherwise be
permitted by rule, regulation or order, within 60 days after the close of the
period for which a report required under this Section 7.1(c) is being made, the
Fund shall furnish to each Limited Partner a semi-annual report and an annual
report containing the information required by the 1940 Act. The Fund shall cause
financial statements contained in each annual report furnished hereunder to be
accompanied by a certificate of independent public accountants based upon an
audit performed in accordance with generally accepted accounting principles. The
Fund may furnish to each Partner such other periodic reports as it deems
necessary or appropriate in its discretion.
(d) The General Partner shall notify the Directors of any change in the
membership of the General Partner within a reasonable time after such change.
7.2. DETERMINATIONS BY GENERAL PARTNER.
(a) All matters concerning the determination and allocation among the Partners
of the amounts to be determined and allocated pursuant to Article V hereof,
including any taxes thereon and accounting procedures applicable thereto, shall
be determined by the General Partner unless specifically and expressly otherwise
provided for by the provisions of this Agreement or as required by law, and such
determinations and allocations shall be final and binding on all the Partners.
(b) The General Partner may make such adjustments to the computation of Net
Profit or Net Loss, or any components (withholding any items of income, gain,
loss or deduction) comprising any of the foregoing as it considers appropriate
to reflect fairly and accurately the financial results of the Fund and the
intended allocation thereof among the Partners.
7.3. VALUATION OF ASSETS.
(a) Except as may be required by the 1940 Act, the General Partner shall value
or have valued any Securities or other assets and liabilities of the Fund (other
than assets invested in Portfolio Funds) as of the close of business on the last
day of each Fiscal Period in accordance with such valuation procedures as shall
be established from time to time by the Directors and which conform to the
requirements of the 1940 Act. Assets of the Fund that are invested in Portfolio
Funds managed by Sub-Advisers shall be valued in accordance with the terms and
conditions of the respective agreements of the Portfolio Funds. Assets of the
Fund invested in Portfolio Funds not managed by Sub-Advisers shall be valued at
fair value, which ordinarily will be the net redemption value determined by
their Portfolio Managers in accordance with the policies established by the
relevant Portfolio Fund. In determining the value of the assets of the Fund, no
value shall be placed on the goodwill or name of the Fund, or the office
records, files, statistical data or any similar intangible assets of the Fund
not normally reflected in the Fund's accounting records, but there shall be
taken into consideration any items of income earned but not received, expenses
incurred but not yet paid, liabilities fixed or contingent, and any other
prepaid expenses to the extent not otherwise reflected in the books of account,
and the value of options or commitments to purchase or sell Securities or
commodities pursuant to agreements entered into prior to such valuation date.
(b) The net asset value of each Unit as of any date shall equal the net asset
value of the Fund, determined as provided in Section 7.3(a), divided by the
number of outstanding Units on such date.
(c) Subject to the provisions of the 1940 Act, the value of Securities and other
assets of the Fund and the net asset value of the Fund and the Units determined
pursuant to this Section 7.3 shall be conclusive and binding on all of the
Partners and all parties claiming through or under them.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1. AMENDMENT OF PARTNERSHIP AGREEMENT.
(a) Except as otherwise provided in this Section 8.1, this Agreement may be
amended, in whole or in part, with the approval of (i) the Directors (including
the vote of a majority of the Independent Directors, if required by the 1940
Act), (ii) the General Partner and (iii) a majority (as defined in the 0000 Xxx)
of the outstanding voting securities of the Fund.
(b) Any amendment that would:
(1) increase the obligation of a Partner to make any contribution to the
capital of the Fund;
(2) reduce the Capital Account of a Partner other than in accordance with
Article V; or
(3) modify the events causing the dissolution of the Fund;
may be made only if (i) the written consent of each Partner adversely
affected thereby is obtained prior to the effectiveness thereof or (ii) such
amendment does not become effective until (A) each Limited Partner has received
written notice of such amendment and (B) any Limited Partner objecting to such
amendment has been afforded a reasonable opportunity (pursuant to such
procedures as may be prescribed by the General Partner) to tender such Partner's
entire Interest for repurchase by the Fund.
(c) The General Partner, at any time without the consent of the other Partners,
may:
(1) restate this Agreement together with any amendments hereto which have
been duly adopted in accordance herewith to incorporate such
amendments in a single, integrated document;
(2) amend this Agreement (other than with respect to the matters set forth
in Section 8.1(b) hereof) to effect compliance with any applicable law
or regulation or to cure any ambiguity or to correct or supplement any
provision hereof which may be inconsistent with any other provision
hereof, provided that such action does not adversely affect the rights
of any Partner in any material respect; and
(3) amend this Agreement to make such changes as may be necessary or
desirable, based on advice of legal counsel to the Fund, to assure the
Fund's continuing eligibility to be classified for U.S. Federal income
tax purposes as a partnership which is not treated as a corporation
under Section 7704(a) of the Code, subject, however, to the limitation
that any amendment to this Agreement pursuant to Sections 8.1(c)(2) or
(3) hereof shall be valid only if approved by the Directors (including
the vote of a majority of the Independent Directors, if required by
the 1940 Act).
(d) The General Partner shall give prior written notice of any proposed
amendment to this Agreement (other than any amendment of the type contemplated
by clause (1) of Section 8.1(c) hereof) to each Partner, which notice shall set
forth (i) the text of the proposed amendment or (ii) a summary thereof and a
statement that the text thereof will be furnished to any Partner upon request.
(e) The General Partner may, with the approval of the Directors, establish
additional classes or series of interests in the Fund having such rights,
privileges and obligations as shall be determined by the General Partner
consistent with the 1940 Act and the Delaware Act.
8.2. SPECIAL POWER OF ATTORNEY.
(a) Each Partner hereby irrevocably makes, constitutes and appoints the General
Partner and each of the Directors, acting severally, and any liquidator of the
Fund's assets appointed pursuant to Section 6.2 hereof with full power of
substitution, the true and lawful representatives and attorneys-in-fact of, and
in the name, place and stead of, such Partner, with the power from time to time
to make, execute, sign, acknowledge, swear to, verify, deliver, record, file
and/or publish:
(1) any amendment to this Agreement which complies with the provisions of
this Agreement (including the provisions of Section 8.1 hereof);
(2) any amendment to the Certificate required because this Agreement is
amended, including, without limitation, an amendment to effectuate any
change in the membership of the Fund; and
(3) all other such instruments, documents and certificates which, in the
opinion of legal counsel to the Fund, from time to time may be
required by the laws of the
United States of America, the State of Delaware or any other
jurisdiction in which the Fund shall determine to do business, or any
political subdivision or agency thereof, or which such legal counsel
may deem necessary or appropriate to effectuate, implement and
continue the valid existence and business of the Fund as a limited
partnership under the Delaware Act.
(b) Each Partner is aware that the terms of this Agreement permit certain
amendments to this Agreement to be effected and certain other actions to be
taken or omitted by or with respect to the Fund without such Partner's consent.
If an amendment to the Certificate or this Agreement or any action by or with
respect to the Fund is taken in the manner contemplated by this Agreement, each
Partner agrees that, notwithstanding any objection which such Partner may assert
with respect to such action, the attorneys-in-fact appointed hereby are
authorized and empowered, with full power of substitution, to exercise the
authority granted above in any manner which may be necessary or appropriate to
permit such amendment to be made or action lawfully taken or omitted. Each
Partner is fully aware that each Partner will rely on the effectiveness of this
special power-of-attorney with a view to the orderly administration of the
affairs of the Fund.
(c) This power-of-attorney is a special power-of-attorney and is coupled with an
interest in favor of the General Partner and each of the Directors, acting
severally, and any liquidator of the Fund's assets, appointed pursuant to
Section 6.2 hereof, and as such:
(1) shall be irrevocable and continue in full force and effect
notwithstanding the subsequent death or incapacity of any party granting this
power-of-attorney, regardless of whether the Fund, the General Partner, the
Directors or any liquidator shall have had notice thereof; and
(2) shall survive the delivery of a Transfer by a Partner of the whole or
any portion of such Partner's Interest, except that where the transferee thereof
has been approved by the General Partner for admission to the Fund as a
substituted Partner, this power-of attorney given by the transferor shall
survive the delivery of such assignment for the sole purpose of enabling the
General Partner, the Directors or any liquidator to execute, acknowledge and
file any instrument necessary to effect such substitution.
8.3. NOTICES. Notices which may or are required to be provided under this
Agreement shall be made to a Partner by hand delivery, regular mail (registered
or certified mail return receipt requested in the case of notice to the General
Partner), commercial courier service, telecopier, or electronic mail (with a
confirmation copy by registered or certified mail in the case of notices to the
General Partner by telecopier or electronic mail), and shall be addressed to the
respective parties hereto at their addresses as set forth on the books and
records of the Fund (or to such other addresses as may be designated by any
party hereto by notice addressed to the General Partner in the case of notice
given to any Partner, and to each of the Partners in the case of notice given to
the General Partner). Notices shall be deemed to have been provided when
delivered by hand, on the date indicated as the date of receipt on a return
receipt or when received if sent by regular mail, commercial courier service,
telecopier or by electronic mail. A document that is not a notice and that is
required to be provided under this Agreement by any party to another party may
be delivered by any reasonable means.
8.4. AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors, assigns, executors, trustees or other legal representatives,
but the rights and obligations of the parties hereunder may not be Transferred
or delegated except as provided in this Agreement and any attempted Transfer or
delegation thereof which is not made pursuant to the terms of this Agreement
shall be void.
8.5. APPLICABILITY OF 1940 ACT AND FORM N-2. THE PARTIES HERETO ACKNOWLEDGE THAT
THIS AGREEMENT IS NOT INTENDED TO, AND DOES NOT, SET FORTH THE SUBSTANTIVE
PROVISIONS CONTAINED IN THE 1940 ACT AND THE FORM N-2 WHICH AFFECT NUMEROUS
ASPECTS OF THE CONDUCT OF THE FUND'S BUSINESS AND OF THE RIGHTS, PRIVILEGES AND
OBLIGATIONS OF THE PARTNERS. EACH PROVISION OF THIS AGREEMENT SHALL BE SUBJECT
TO AND INTERPRETED IN A MANNER CONSISTENT WITH THE APPLICABLE PROVISIONS OF THE
1940 ACT AND THE FORM N-2.
8.6. CHOICE OF LAW; ARBITRATION.
(a) Notwithstanding the place where this Agreement may be executed by any of the
parties hereto, the parties expressly agree that all the terms and provisions
hereof shall be construed under the laws of the State of Delaware, including the
Delaware Act, without regard to the conflict of law principles of such State.
(b) EACH PARTNER AGREES TO SUBMIT ALL CONTROVERSIES ARISING BETWEEN OR AMONG
PARTNERS OR ONE OR MORE PARTNERS AND THE FUND IN CONNECTION WITH THE FUND OR ITS
BUSINESSES OR CONCERNING ANY TRANSACTION, DISPUTE OR THE CONSTRUCTION,
PERFORMANCE OR BREACH OF THIS OR ANY OTHER AGREEMENT, WHETHER ENTERED INTO PRIOR
TO, ON OR SUBSEQUENT TO THE DATE HEREOF, TO ARBITRATION IN ACCORDANCE WITH THE
PROVISIONS SET FORTH BELOW. EACH PARTNER UNDERSTANDS THAT ARBITRATION IS FINAL
AND BINDING ON THE PARTIES AND THAT THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK
REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY TRIAL.
(c) CONTROVERSIES SHALL BE FINALLY SETTLED BY, AND ONLY BY, ARBITRATION IN
ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION (THE "AAA") TO THE FULLEST EXTENT PERMITTED BY LAW. THE PLACE OF
ARBITRATION SHALL BE NEW YORK, NEW YORK. ANY ARBITRATION HEREUNDER SHALL BE
CONDUCTED BEFORE A PANEL OF THREE ARBITRATORS. THE PARTY OR PARTIES INITIATING
ARBITRATION HEREUNDER SHALL APPOINT ONE ARBITRATOR IN THE DEMAND FOR
ARBITRATION. THE PARTY OR PARTIES AGAINST WHOM ARBITRATION IS SOUGHT SHALL
JOINTLY APPOINT ONE ARBITRATOR WITHIN THIRTY BUSINESS DAYS AFTER NOTICE FROM THE
AAA OF THE FILING OF THE DEMAND FOR ARBITRATION. THE TWO ARBITRATORS NOMINATED
BY THE PARTIES SHALL ATTEMPT TO AGREE ON A THIRD ARBITRATOR WITHIN THIRTY
BUSINESS DAYS OF THE APPOINTMENT OF THE SECOND ARBITRATOR. IF THE TWO
ARBITRATORS
FAIL TO AGREE ON THE THIRD ARBITRATOR WITHIN SUCH PERIOD, THEN THE AAA SHALL
APPOINT THE THIRD ARBITRATOR WITHIN THIRTY BUSINESS DAYS FOLLOWING THE
EXPIRATION OF SUCH PERIOD. ANY AWARD RENDERED BY THE ARBITRATORS SHALL BE FINAL
AND BINDING ON THE PARTIES, AND JUDGMENT UPON ANY SUCH AWARD MAY BE ENTERED IN
THE SUPREME COURT OF THE STATE OF NEW YORK AND/OR THE U.S. DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK, OR ANY OTHER COURT HAVING JURISDICTION
THEREOF OR HAVING JURISDICTION OVER THE PARTIES OR THEIR ASSETS. THIS
ARBITRATION AGREEMENT SHALL NOT BE CONSTRUED TO DEPRIVE ANY COURT OF ITS
JURISDICTION TO GRANT PROVISIONAL RELIEF (INCLUDING BY INJUNCTION OR ORDER OF
ATTACHMENT) IN AID OF ARBITRATION PROCEEDINGS OR ENFORCEMENT OF AN AWARD. IN THE
EVENT OF ARBITRATION AS PROVIDED HEREIN, THE ARBITRATORS SHALL BE GOVERNED BY
AND SHALL APPLY THE SUBSTANTIVE (BUT NOT PROCEDURAL) LAW OF DELAWARE, TO THE
EXCLUSION OF THE PRINCIPLES OF THE CONFLICTS OF LAW OF DELAWARE. THE ARBITRATION
SHALL BE CONDUCTED IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE COMMERCIAL
ARBITRATION RULES OF THE AAA. WHERE THOSE RULES ARE SILENT, THE PROCEDURE SHALL
BE AS AGREED BY THE PARTIES, OR IN THE ABSENCE OF SUCH AGREEMENT, AS ESTABLISHED
BY THE ARBITRATORS.
8.7. NOT FOR BENEFIT OF CREDITORS. The provisions of this Agreement are intended
only for the regulation of relations among past, present and future Partners and
the Fund. This Agreement is not intended for the benefit of non-Partner
creditors and no rights are granted to non-Partner creditors under this
Agreement.
8.8. CONSENTS. Any and all consents, agreements or approvals provided for or
permitted by this Agreement shall be in writing and a signed copy thereof shall
be filed and kept with the books of the Fund.
8.9. MERGER AND CONSOLIDATION.
(a) The Fund may merge or consolidate with or into one or more limited
partnerships formed under the Delaware Act or other business entities pursuant
to an agreement of merger or consolidation which has been approved in the manner
contemplated by Section 17-211(b) of the Delaware Act.
(b) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, an agreement of merger or consolidation approved in accordance with
Section 17-211(b) of the Delaware Act may, to the extent permitted by Section
17-211(g) of the Delaware Act, (i) effect any amendment to this Agreement, (ii)
effect the adoption of a new partnership agreement for the Fund if it is the
surviving or resulting limited partnership in the merger or consolidation, or
(iii) provide that the partnership agreement of any other constituent
partnership to the merger or consolidation (including a limited partnership
formed for the purpose of consummating the merger or consolidation) shall be the
partnership agreement of the surviving or resulting limited partnership.
8.10. PRONOUNS. All pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identity of the person or persons,
firm or corporation may require in the context thereof.
8.11. CONFIDENTIALITY.
(a) A Limited Partner may obtain from the General Partner, for any purpose
reasonably related to the Limited Partner's Interest in the Fund, such
information regarding the affairs of the Fund as is just and reasonable under
the Delaware Act, subject to reasonable standards (including standards governing
what information and documents are to be furnished, at what time and location
and at whose expense) established by the General Partner.
(b) Each Limited Partner covenants that, except as required by applicable law or
any regulatory body, such Limited Partner will not divulge, furnish or make
accessible to any other person the name or address (whether business, residence
or mailing) of any Limited Partner (collectively, "Confidential Information")
without the prior written consent of the General Partner, which consent may be
withheld in its sole discretion.
(c) Each Partner recognizes that in the event that this Section 8.11 is breached
by any Partner or any of its principals, partners, members, directors, officers,
employees or agents or any of such Partner's affiliates, including any of such
affiliates' principals, partners, members, directors, officers, employees or
agents, irreparable injury may result to the non-breaching Partners and the
Fund. Accordingly, in addition to any and all other remedies at law or in equity
to which the non-breaching Partners and the Fund may be entitled, such Partners
also shall have the right to obtain equitable relief, including, without
limitation, injunctive relief, to prevent any disclosure of Confidential
Information, plus reasonable attorneys, fees and other litigation expenses
incurred in connection therewith. If any non-breaching Partner or the Fund
determines that any of the other Partners or any of such Partner's principals,
partners, members, directors, officers, employees or agents or any of such
Partner's affiliates, including any of such affiliates' principals, partners,
members, directors, officers, employees or agents, should be enjoined from or
required to take any action to prevent the disclosure of Confidential
Information, each of the other non-breaching Partners agrees to pursue in a
court of appropriate jurisdiction such injunctive relief.
(d) The General Partner shall have the right to keep confidential from the
Limited Partners, for such period of time as the General Partner deems
reasonable, any information which 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 interest of the Fund
or could damage the Fund or its business or which the Fund is required by law or
by agreement with a third party to keep confidential.
8.12. CERTIFICATION OF NON-FOREIGN STATUS. Each Limited Partner or transferee of
an Interest from a Limited Partner that is admitted to the Fund in accordance
with this Agreement shall certify, upon admission to the Fund and at such other
time thereafter as the General Partner may request, whether he is a "United
States Person" within the meaning of Section 7701(a)(30) of the Code on forms to
be provided by the Fund, and shall notify the Fund within 30 days of any change
in such Partner's status. Any Limited Partner who shall fail to
provide such certification when requested to do so by the General Partner may be
treated as a non-United States Person for purposes of U.S. Federal tax
withholding.
8.13. SEVERABILITY. If any provision of this Agreement is determined by a court
of competent jurisdiction not to be enforceable in the manner set forth in this
Agreement, each Partner agrees that it is the intention of the Partners that
such provision should be enforceable to the maximum extent possible under
applicable law. If any provisions of this Agreement are held to be invalid or
unenforceable, such invalidation or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement (or portion
thereof).
8.14. ENTIRE AGREEMENT. This Agreement (including any Schedules attached hereto
which are incorporated herein) constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
It is hereby acknowledged and agreed that the General Partner, without the
approval of any Limited Partner, may enter into written agreements with Limited
Partners, executed contemporaneously with the admission of such Limited Partners
to the Fund, affecting the terms hereof in order to meet certain requirements of
such Limited Partners. The parties hereto agree that any terms contained in any
such other agreement with a Limited Partner shall govern with respect to such
Limited Partner notwithstanding the provisions of this Agreement.
8.15. DISCRETION. To the fullest extent permitted by law, whenever in this
Agreement a person is permitted or required to make a decision (i) in its "sole
discretion" or "discretion" or under a grant of similar authority or latitude,
such person shall be entitled to consider only such interests and factors as it
desires, including its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting the Fund or the
Limited Partners, or (ii) in its "good faith" or under another express standard,
then such person shall act under such express standard and shall not be subject
to any other or different standards imposed by this Agreement or any other
agreement contemplated herein or by relevant provisions of law or in equity or
otherwise.
8.16. COUNTERPARTS. This Agreement may be executed in several counterparts, all
of which together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the same counterpart.
THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS ENTIRETY BEFORE
SIGNING, INCLUDING THE PRE-DISPUTE ARBITRATION CLAUSES SET FORTH IN SECTION 8.6
ON PAGES [32-33] AND THE CONFIDENTIALITY CLAUSES SET FORTH IN SECTION 8.11 ON
PAGE [34].
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GENERAL PARTNER:
GLOBAL ASSET MANAGEMENT (USA) INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chief Operating Officer
ORGANIZATIONAL LIMITED PARTNER
GAM SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
DIRECTORS:
/s/ Xx. Xxxxxxxx Xxxxxxxxx
-----------------------------
Xx. Xxxxxxxx Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. XxXxxxx
------------------
Xxxxxx X. XxXxxxx
/s/ Xxxxxx Xxxxxx
------------------
Xxxxxx Xxxxxx
LIMITED PARTNERS:
Each person who has signed, or has had signed on such person's behalf, a Limited
Partner Signature Page, which shall constitute a counterpart hereof.
