RJO GLOBAL TRUST EIGHTH AMENDED AND RESTATED DECLARATION AND AGREEMENT OF TRUST Dated as of September 26, 2008
EXHIBIT
3.02
RJO
GLOBAL TRUST
EIGHTH
AMENDED AND RESTATED
Dated
as of September 26, 2008
RJO
GLOBAL TRUST
EIGHTH
AMENDED AND RESTATED
TABLE
OF CONTENTS
| Page | ||
| 1. | Declaration of Trust | A-1 |
| 2. | The Trustee | A-1 |
| (a) Term; Resignation | A-1 | |
| (b) Powers | A-1 | |
| (c) Compensation and Expenses of the Trustee | A-1 | |
| (d) Indemnification | A-2 | |
| (e) Successor Trustee | A-2 | |
| (f) Liability of the Trustee | A-2 | |
| (g) Reliance by the Trustee and the Managing Owner; Advice of Counsel | A-3 | |
| (h) Not Part of Trust Estate | A-3 | |
| 3. | Principal Office | A-3 |
| 4. | Business | A-4 |
| 5. | Term, Dissolution, Fiscal Year and Net Asset Value | A-4 |
| (a) Term | A-4 | |
| (b) Dissolution | A-4 | |
| (c) Fiscal Year | A-5 | |
| (d) Net Asset Value | A-5 | |
| 6. | Net Worth of Managing Owner | A-5 |
| 7. | Captial Contributions; Units; Managing Owner's Liability | A-5 |
| (a) Capital Contributions; Units | A-5 | |
| (b) Managing Owner's Liability | A-5 | |
| 8. | Allocation of Profits and Losses | A-6 |
| (a) Capital Accounts and Allocations | A-6 | |
| (b) Allocations of Profit and Loss for Federal Income Tax Purposes | A-6 | |
| (c) Expenses | A-7 | |
| (d) Limited Liability of ▇▇▇▇▇▇▇▇▇▇▇ | ▇-▇ | |
| (e) Return of Capital Contributions | A-8 | |
| 9. | Management of the Trust | A-8 |
| (a) Authority of the Managing Owner | A-8 | |
| (b) Fiduciary Duties | A-9 | |
| (c) Loans; Investments | A-9 | |
| (d) Certain Conflicts of Interest Prohibited | A-9 | |
| (e) Certain Agreements | A-9 | |
| (f) Prohibition on "Pyramiding" | A-10 | |
| (g) Freedom of Action | A-10 | |
| 10. | Audits and Reports to Unitholders | A-10 |
| 11. | Assignability of Units | A-11 |
| 12. | Redemptions | A-12 |
| 13. | Offering of Units | A-13 |
| 14. | Additional Offerings | A-13 |
| 15. | Special Power of Attorney | A-13 |
| 16. | Withdrawal of a Unitholder | A-14 |
| 17. | Benefit Plan Investors | A-14 |
| Page | ||
| 18. | Standard of Liability; Indemnification | A-15 |
| (a) Standard of Liability for the Managing Owner | A-15 | |
| (b) Indemnificatino of the Managing Owner by the Trust | A-15 | |
| (c) Indemnification by the Unitholders | A-16 | |
| 19. | Amendments; Meetings | A-16 |
| (a) Amendments with Consent of the Managing Owner | A-16 | |
| (b) Amendments and Actions without Consent of the Managing Owner | A-16 | |
| (c) Meetings; Other | A-16 | |
| (d) Consent by Trustee | A-17 | |
| 20. | Governing Law | A-17 |
| 21. | Miscellaneous | A-17 |
| (a) Notices | A-17 | |
| (b) Binding Effect | A-17 | |
| (c) Captions | A-17 | |
| 22. | Certain Definitions | A-17 |
| 23. | No Legal Title to Trust Estate | A-17 |
| 24. | Legal Title | A-17 |
| 25. | Creditors | A-17 |
RJO
GLOBAL TRUST
EIGHTH
AMENDED AND RESTATED
This
EIGHTH AMENDED AND RESTATED DECLARATION AND AGREEMENT OF TRUST (“Declaration and
Agreement of Trust”) of RJO
Global Trust (the “Trust”) is made and entered into as of this
26th
day of September, 2008 by and among ▇.▇. ▇’▇▇▇▇▇ Fund Management,
LLC, a Delaware corporation, as a managing owner (the “Managing Owner”),
Wilmington Trust
Company, a Delaware banking corporation, as trustee (the “Trustee”), and
each other party who shall execute a counterpart of this Declaration and
Agreement of Trust as an owner of a unit of beneficial interest of the Trust
(“Units”) or who becomes a party to this Declaration and Agreement of Trust as a
unitholder by execution of a Subscription Agreement and Power of Attorney
Signature Page or otherwise and who is shown in the books and records of the
Trust as a unitholder (individually, a “Unitholder” and, collectively, the
“Unitholders”).
WITNESSETH:
WHEREAS,
the parties hereto desire to operate the Trust for the business and purpose of
issuing Units, the capital of which shall be used to engage in speculative
trading, buying, selling or otherwise acquiring, holding or disposing of futures
and forward contracts on currencies, interest rate, energy and agricultural
products, metals and stock indices, hybrid instruments, swaps, any rights
pertaining thereto and any options thereon or on physical commodities, with the
objective of capital appreciation through speculative trading, and to amend and
restate the Seventh Amended and Restated Declaration and Agreement of Trust of
the Trust in its entirety, except with respect to the First Amendment to the
Sixth Amended and Restated Declaration and Agreement of Trust. The
First Amendment to the Sixth Amended and Restated Declaration and Agreement of
Trust, which only pertains to investors in the Trust as of October 12, 2005 and
has no impact on investments made after such date, shall survive for its limited
purpose and shall be a part of the Eighth Amended and Restated Declaration and
Agreement of Trust.
NOW
THEREFORE, the parties hereto agree as follows:
1. Declaration
of Trust.
The
Trustee hereby declares that it holds the investments in the Trust in trust upon
and subject to the conditions set forth herein for the use and benefit of the
Unitholders. It is the intention of the parties hereto that the Trust
shall be a statutory trust under the Delaware Statutory Trust Act (the “Act”),
and that this Declaration and Agreement of Trust shall constitute the governing
instrument of the Trust. The Trustee has filed the Certificate of
Trust required by Section 3810 of the Act and is hereby authorized and directed
to file a Restated Certificate of Trust to effectuate the change in the name of
the Trust from JWH Global Trust to RJO Global Trust.
Nothing
in this Declaration and Agreement of Trust shall be construed to make the
Unitholders partners or members of a joint stock association except to the
extent that such Unitholders, as constituted from time to time, are deemed to be
partners under the Internal Revenue Code of 1986, as amended (the “Code”), and
applicable state and local tax laws. Notwithstanding the foregoing,
it is the intention of the parties hereto that the Trust be treated as a
partnership for purposes of taxation under the Code and applicable state and
local tax laws. Effective as of the date hereof, the Trustee shall
have all of the rights, powers and duties set forth herein and in the Act with
respect to accomplishing the purposes of the Trust.
2. The Trustee.
(a) Term;
Resignation. (i) Wilmington Trust Company
has been appointed and has agreed to serve as the Trustee of the
Trust. The Trust shall have only one trustee unless otherwise
determined by the Managing Owner. The Trustee shall serve until such
time as the Managing Owner removes the Trustee or the Trustee resigns and a
successor Trustee is appointed by the Managing Owner in accordance with the
terms of Section 2(e) hereof.
(ii)
The Trustee may resign at any time upon the giving of at least 60 days’ advance
written notice to the Trust; provided, that such resignation shall not become
effective unless and until a successor Trustee shall have been appointed by the
Managing Owner in accordance with Section 2(e) hereof. If the
Managing Owner does not act within such 60 day period, the Trustee may apply to
the Court of Chancery of the State of Delaware for the appointment of a
successor Trustee.
(b) Powers. Except
to the extent expressly set forth in this Section 2, the duty and authority
of the Trustee to manage the business and affairs of the Trust are hereby
delegated to the Managing Owner. The Trustee shall have only the
rights, obligations or liabilities specifically provided for herein and in the
Act and shall have no implied rights, obligations or liabilities with respect to
the business or affairs of the Trust. The Trustee shall have the
power and authority to execute,
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deliver, acknowledge and file all necessary documents, including any amendments to or cancellation of the Certificate of Trust, and to maintain all necessary records of the Trust as required by the Act. The Trustee shall provide prompt notice to the Managing Owner of the Trustee’s performance of any of the foregoing. The Managing Owner shall keep the Trustee informed of any actions taken by the Managing Owner with respect to the Trust that affect the rights, obligations or liabilities of the Trustee hereunder or under the Act.
(c) Compensation and Expenses of the
Trustee. The Trustee shall be entitled to receive from the
Trust or, if the assets of the Trust are insufficient, from the Managing Owner,
reasonable compensation for its services hereunder in accordance with the
Trustee’s standard fee schedule, and shall be entitled to be reimbursed by the
Trust or, if the assets of the Trust are insufficient, by the Managing Owner,
for reasonable out-of-pocket expenses incurred by the Trustee in the performance
of its duties hereunder, including without limitation, the reasonable
compensation, out-of-pocket expenses and disbursements of counsel and such other
agents as the Trustee may employ in connection with the exercise and performance
of its rights and duties hereunder, to the extent attributable to the
Trust.
(d) Indemnification. The
Managing Owner agrees, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Trustee and its successors, assigns, legal
representatives, officers, directors, agents and servants (the “Indemnified
Parties”) from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by the Trustee on or
measured by any compensation received by the Trustee for its services hereunder
or as indemnity payments pursuant to this Section 2(d)), claims, actions, suits,
costs, expenses or disbursements (including legal fees and expenses) of any kind
and nature whatsoever (collectively, “Expenses”), which may be imposed on,
incurred by or asserted against the Indemnified Parties in any way relating to
or arising out of the formation, operation or termination of the Trust, the
execution, delivery and performance of any other agreements to which the Trust
is a party or the action or inaction of the Trustee hereunder or thereunder,
except for Expenses resulting from the gross negligence or willful misconduct of
the Indemnified Parties. The indemnities contained in this Section
2(d) shall survive the termination of this Declaration and Agreement of Trust or
the removal or resignation of the Trustee. In addition, the
Indemnified Parties shall be entitled to indemnification from any cash, net
equity in any commodity futures, forward and option contracts, all funds on
deposit in the accounts of the Trust, any other property held by the Trust, and
all proceeds therefrom, including any rights of the Trust pursuant to any
agreements to which the Trust is a party (the “Trust Estate”) to the extent such
expenses are attributable to the formation, operation or termination of the
Trust as set forth above, and to secure the same the Trustee shall have a lien
against the Trust Estate which shall be prior to the rights of the Managing
Owner and the Unitholders to receive distributions from the Trust
Estate. The Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any liens
on any part of the Trust Estate which result from claims against the Trustee
personally that are not related to the ownership or the administration of the
Trust Estate or the transactions contemplated by any documents to which the
Trust is a party.
(e) Successor
Trustee. Upon the resignation or removal of the Trustee,
the Managing Owner shall appoint a successor Trustee by delivering a written
instrument to the outgoing Trustee. Any successor Trustee must
satisfy the requirements of Section 3807 of the Act. Any resignation
or removal of the Trustee and appointment of a successor Trustee shall not
become effective until a written acceptance of appointment is delivered by the
successor Trustee to the outgoing Trustee and the Managing Owner and any fees
and expenses due to the outgoing Trustee are paid. Following
compliance with the preceding sentence, the successor Trustee shall become fully
vested with all of the rights, powers, duties and obligations of the outgoing
Trustee under this Declaration and Agreement of Trust, with like effect as if
originally named as Trustee, and the outgoing Trustee shall be discharged of its
duties and obligations under this Declaration and Agreement of
Trust.
(f) Liability of the
Trustee. Except as otherwise provided in this Section 2,
in accepting the trust created hereby, Wilmington Trust Company acts solely as
Trustee hereunder and not in its individual capacity, and all persons having any
claim against the Trustee by reason of the transactions contemplated by this
Declaration and Agreement of Trust and any other agreement to which the Trust is
a party shall look only to the Trust Estate for payment or satisfaction
thereof. The Trustee shall not be liable or accountable hereunder or
under any other agreement to which the Trust is a party, except for the
Trustee’s gross negligence or willful misconduct. In particular, but
not by way of limitation:
(i)
the Trustee shall have no liability or responsibility for the validity or
sufficiency of this Declaration and Agreement of Trust or for the form,
character, genuineness, sufficiency, value or validity of the Trust
Estate;
(ii) the
Trustee shall not be liable for any actions taken or omitted to be taken by it
in accordance with the instructions of the Managing Owner;
(iii) the
Trustee shall not have any liability for the acts or omissions of the Managing
Owner;
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(iv) the
Trustee shall not be liable for its failure to supervise the performance of any
obligations of the Managing Owner, any commodity broker, any trading advisor,
any selling agent, any additional selling agent, “wholesaler” selling agent or
“correspondent” selling agent;
(v) no
provision of this Declaration and Agreement of Trust shall require the Trustee
to expend or risk funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder if the Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;
(vi) under
no circumstances shall the Trustee be liable for indebtedness evidenced by or
other obligations of the Trust arising under this Declaration and Agreement of
Trust or any other agreements to which the Trust is a party;
(vii) the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Declaration and Agreement of Trust, or to institute,
conduct or defend any litigation under this Declaration and Agreement of Trust
or any other agreements to which the Trust is a party, at the request, order or
direction of the Managing Owner or any Unitholders unless the Managing Owner or
such Unitholders have offered to the Trustee security or indemnity satisfactory
to it against the costs, expenses and liabilities that may be incurred by the
Trustee (including, without limitation, the reasonable fees and expenses of its
counsel) therein or thereby; and
(viii) notwithstanding
anything contained herein to the contrary, the Trustee shall not be required to
take any action in any jurisdiction other than in the State of Delaware if the
taking of such action will (a) require the consent or approval or authorization
or order of or the giving of notice to, or the registration with or taking of
any action in respect of, any state or other governmental authority or agency of
any jurisdiction other than the State of Delaware, (b) result in any fee, tax or
other governmental charge under the laws of any jurisdiction or any political
subdivision thereof in existence as of the date hereof other than the State of
Delaware becoming payable by the Trustee or (c) subject the Trustee to personal
jurisdiction other than in the State of Delaware for causes of action arising
from personal acts unrelated to the consummation by the Trustee of the
transactions contemplated hereby.
(g) Reliance by the Trustee and the
Managing Owner; Advice of Counsel. (i) In the
absence of bad faith on the part of the Trustee or negligence or misconduct on
the part of the Managing Owner, the Trustee and the Managing Owner may
conclusively rely upon certificates or opinions furnished to the Trustee or the
Managing Owner and conforming to the requirements of this Declaration and
Agreement of Trust in determining the truth of the statements and the
correctness of the opinions contained therein, and shall incur no liability to
anyone in acting on any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
which is believed to be genuine and believed to be signed by the proper party or
parties, and need not investigate any fact or matter pertaining to or in any
such document; provided, however, that the Trustee or the Managing Owner shall
have examined any certificates or opinions so as to determine compliance of the
same with the requirements of this Declaration and Agreement of
Trust. The Trustee or the Managing Owner may accept a certified copy
of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and
effect. As to any fact or matter the method of the determination of
which is not specifically prescribed herein, the Trustee or the Managing Owner
may for all purposes hereof rely on a certificate, signed by the president or
any vice-president or by the treasurer or other authorized officers of the
relevant party, as to such fact or matter, and such certificate shall constitute
full protection to the Trustee or the Managing Owner for any action taken or
omitted to be taken by either of them in good faith in reliance
thereon.
(ii) In
the exercise or administration of the Trust hereunder and in the performance of
its duties and obligations under this Declaration and Agreement of Trust, the
Trustee, at the expense of the Trust, (i) may act directly or through its
agents, attorneys, custodians or nominees pursuant to agreements entered into
with any of them, and the Trustee shall not be liable for the conduct or
misconduct of such agents, attorneys, custodians or nominees if such agents,
attorneys, custodians or nominees shall have been selected by the Trustee with
reasonable care and (ii) may consult with counsel, accountants and other skilled
professionals to be selected with reasonable care by the Trustee; provided that
the Trustee shall not allocate any of its internal expenses or overhead to the
account of the Trust. The Trustee shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the opinion or
advice of any such counsel, accountant or other such persons.
(h) Not Part of Trust
Estate. Amounts paid to the Trustee from the Trust
Estate, if any, pursuant to this Section 2 shall not be deemed to be part of the
Trust Estate immediately after such payment.
3. Principal
Office.
The
address of the principal office of the Trust is c/o ▇.▇. ▇’▇▇▇▇▇ Fund
Management, LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇. The Trustee is located at ▇▇▇▇▇▇ Square North,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration. The Trustee
shall receive service of process on the Trust in the State of Delaware at the
foregoing address. In the event Wilmington Trust Company resigns or
is removed as the Trustee, the Trustee of the Trust in the State of Delaware
shall be the successor Trustee.
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4. Business.
The
Trust’s business and purpose is to trade, buy, sell or otherwise acquire, hold
or dispose of all futures contracts including, but not limited to, those on
currencies, interest rates, energy and agricultural products, metals and stock
indices; spot and forward contracts in currencies and precious metals; any
rights pertaining thereto and any options thereon or on physical commodities; as
well as securities and any rights pertaining thereto and any options thereon,
and to engage in all activities necessary, convenient or incidental
thereto. The Trust may also engage in “hedge,” arbitrage and cash
trading of any of the foregoing instruments. The Trust may engage in
such business and purpose either directly or through joint ventures, entities or
partnerships, provided that the Trust’s participation in any of the foregoing
has no adverse economic or liability consequences for the Unitholders, which
consequences would not be present had the Trust engaged in that same business or
purpose directly.
The
objective of the Trust’s business is appreciation of its assets through
speculative trading. The Trust shall have the power to engage in all
activities which are necessary, suitable, desirable, convenient or incidental to
the accomplishment to the foregoing business and purpose. The Trust
shall do so under the direction of the Managing Owner.
The
Managing Owner may designate a trading advisor or trading advisors for the Trust
and may apportion to such trading advisor(s) the management of such Net Assets
as the Managing Owner shall determine in its absolute discretion.
5. Term, Dissolution, Fiscal Year and
Net Asset Value.
(a) Term. The term of
the Trust commenced on the day on which the Certificate of Trust was filed with
the Secretary of State of the State of Delaware pursuant to the provisions of
the Act and shall end upon the first to occur of the following: (1) December 31,
2026; (2) receipt by the Managing Owner of the determination by Unitholders
owning more than 50% of the Units then outstanding to dissolve the Trust, notice
of which is sent by certified mail, return receipt requested, to the Managing
Owner not less than 90 days prior to the effective date of such dissolution; (3)
120 days after either (i) the date of filing by, or against, the Managing Owner
of a petition for relief under the bankruptcy laws, or (ii) the notice of the
retirement, resignation, or withdrawal of the Managing Owner is provided
pursuant to the last sentence of this Section 5(a), unless prior to such 120th
day (A) Unitholders owning more than 50% of the Units then outstanding vote (or
agree in writing) to approve the appointment of one or more successor managing
owners to continue the business of the Trust, or (B) in the event of (i) above,
the bankruptcy court approves the sale and assignment of the interests of the
Managing Owner to a purchaser/assignor and the purchaser/assignor assumes the
duties and obligations of “Managing Owner” and the purchaser/assignor begins
serving as the successor Managing Owner, or (4) 90 days after either (i) the
insolvency of the Managing Owner, or (ii) any other event that would cause the
Managing Owner to cease to be managing owner of the Trust, unless prior to such
90th day Unitholders owning more than 50% of the Units then outstanding vote (or
agree in writing) to approve the appointment of one or more successor managing
owners to continue the business of the Trust; (5) the dissolution of the
Managing Owner; (6) the insolvency or bankruptcy of the Trust; (7) a decline in
the aggregate Net Assets (as defined below) of the Trust to less than $2,500,000
(except as provided in Section 12); (8) a decline in the Net Asset Value per
Unit (as defined below) to $50 or less (except as provided in Section 12); (9)
dissolution of the Trust pursuant hereto; or (10) any other event which shall
make it unlawful for the existence of the Trust to be continued or require
dissolution of the Trust. The Managing Owner shall have no right to retire,
resign or withdraw without first providing not less than 120 days’ prior written
notice to all Unitholders of such proposed action. The Managing Owner shall be
responsible for seeking the requisite vote of (or signatures from) Unitholders
during the applicable period of time for the events covered by Section 5(a)(3)
or 5(a)(4) above.
(b) Dissolution. Upon
the occurrence of an event causing the dissolution of the Trust, the Trust shall
be dissolved and its affairs wound up. Upon the dissolution of the
Trust, the Managing Owner or, in the event that dissolution of the Trust
pursuant to Section 5(a)(5) has caused the Managing Owner to cease to be
managing owner of the Trust, a person or persons approved by the affirmative
vote of more than 50% of the Units then owned by Unitholders, shall wind up the
Trust’s affairs and, in connection therewith, shall distribute the Trust’s
assets in the following manner and order:
(i) FIRST
TO payment and discharge of all claims of creditors of the Trust (including, to
the extent otherwise permitted by law, creditors who are Unitholders), including
by the creation of any reserve that the Managing Owner (or its successor), in
its sole discretion, may consider reasonably necessary for any losses,
contingencies, liabilities or other matters of or relating to the Trust;
provided, however, that if and when the cause for such reserve ceases to exist,
the monies, if any, then in such reserve shall be distributed in the manner
hereinafter provided; and
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(ii) SECOND
TO distribution in cash of the remaining assets to the Unitholders in proportion
to their capital accounts, after giving effect to the allocations pursuant to
Section 8 hereof as if the date of distribution were the end of a calendar
year.
(c) Fiscal
Year. The fiscal year of the Trust shall begin on
January 1 of each year and end on the following
December 31.
(d) Net Asset
Value. The Net Assets of the Trust are its assets less its
liabilities determined in accordance with generally accepted accounting
principles. The Net Asset Value per Unit is the Net Assets of the
Trust divided by the number of Units outstanding, subject to the provision of
Section 8(a) hereof.
A futures
or futures option contract traded on a United States commodity exchange shall be
valued at the settlement price on the date of valuation. If such a
contract held by the Trust cannot be liquidated on the day with respect to which
Net Assets are being determined, the settlement price on the first subsequent
day on which the contract can be liquidated shall be the basis for determining
the liquidating value of such contract for such day, or such other value as the
Managing Owner may deem fair and reasonable. The liquidating value of
a futures, forward or option contract not traded on a United States commodity
exchange shall mean its liquidating value as determined by the Managing Owner on
a basis consistently applied for each different variety of such
contract.
The
Managing Owner may only cause the Trust to invest in joint ventures, entities or
partnerships which conform to the foregoing valuation principles.
Organizational
and initial offering cost reimbursement shall not reduce Net Asset Value for any
purpose, including calculating the redemption value of Units; however, the
amount of organizational and initial offering costs amortized at each month-end
during the amortization period will reduce Net Asset Value as of each such
month-end.
Accrued
incentive fees shall reduce the Net Asset Value of the Trust.
6. Net
Worth of Managing Owner.
The
Managing Owner agrees that at all times so long as it remains the managing owner
of the Trust, it will maintain a net worth at an amount not less than 5% of the
total contributions by all Unitholders to the Trust and all entities of which
the Managing Owner is general partner or managing owner. In no event
shall the Managing Owner be required to maintain a net worth in excess of the
greater of (i) $1,000,000 or (ii) the amount which the Managing Owner is advised
by counsel as necessary or advisable to ensure that the Trust is taxed as a
partnership for federal income tax purposes.
7. Capital
Contributions; Units; Managing Owner’s Liability.
(a) Capital Contributions;
Units. The beneficial interests in the Trust shall consist of
two types: a general liability interest and limited liability
Units. The Managing Owner shall acquire the general liability
interest, and investors shall all acquire limited liability Units.
Upon the
initial contribution by the Managing Owner to the Trust, the Managing Owner
became the holder of the general liability interest of the Trust.
No
certificates or other evidences of beneficial ownership of the Units will be
issued. The Unitholders’ respective capital contributions to the
Trust shall be as shown on the books and records of the Trust.
Every
Unitholder, by virtue of having purchased or otherwise acquired Units, shall be
deemed to have expressly consented and agreed to be bound by the terms of this
Declaration and Agreement of Trust.
Any Units
acquired by the Managing Owner or any of its affiliates will be non-voting, and
will not be considered outstanding for purposes of determining whether the
majority approval of the outstanding Units has been obtained.
The
general liability interest in the Trust held by the Managing Owner will be
non-voting.
(b) Managing Owner’s
Liability. The Managing Owner shall have unlimited liability
for the repayment, satisfaction and discharge of all debts, liabilities and
obligations of the Trust to the full extent, and only to the extent, of the
Managing Owner’s assets.
The
Managing Owner shall be liable for the acts, omissions, obligations and expenses
of the Trust, to the extent not paid out of the assets of the Trust, to the same
extent that the Managing Owner would be so liable if the Trust were a
partnership under the Delaware Revised Uniform Limited Partnership Act and the
Managing Owner were the general partner of such partnership. The
obligations of the Managing Owner under this paragraph shall be evidenced by its
ownership of the general liability interest.
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The
Managing Owner, so long as it is generally liable for the obligations of the
Trust, shall invest in the Trust, as a general liability interest, no less than
1% of the total capital contributions to the Trust (including the Managing
Owner’s contributions). The Managing Owner may (i) withdraw any
interest it may have in excess of such requirement as of any month-end or (ii)
redeem any Units which it may acquire, in each case on the same terms as any
Unitholder (although without early redemption charges).
8. Allocation
of Profits and Losses.
(a) Capital Accounts and
Allocations. A capital account shall be established for each
Unit and for the Managing Owner. The initial balance of each capital
account shall be the aggregate amount contributed to the Trust with respect to a
Unit, which amount shall be equal to the Net Asset Value per Unit on the date
each Unit is purchased after all accrued fees, expenses and Incentive Fee
allocations (other than unamortized organizational and initial offering
costs).
As of the
close of business (as determined by the Managing Owner) on the last business day
of each month, any increase or decrease in the Trust’s Net Assets as compared to
the last such determination of Net Assets shall be credited or charged equally
to the Units of all Unitholders.
In making
the month-end adjustments to the capital accounts described in the preceding
paragraph, capital accounts of all Units shall be adjusted to reflect the
Brokerage Fee as defined in Section 8(c).
(b) Allocation of Profit and Loss for
Federal Income Tax Purposes. As of the end of each fiscal
year, the Trust’s income and expense and capital gain or loss shall be allocated
among the Unitholders (including the Managing Owner on a Unit-equivalent basis)
pursuant to the following provisions of this Section 8(b) for federal income tax
purposes. Allocations of profit and loss shall be pro rata from net
capital gain or loss and net ordinary income or loss realized by the Trust
unless allocation of items of gain or income or loss or expense are necessary to
satisfy the requirements in Sections 8(b)(1)(B) and 8(b)(1)(D) that sufficient
profit and loss be allocated to tax accounts such that tax accounts attributable
to redeemed Units equal distributions in redemption of such
Units. Notwithstanding the foregoing requirement that annual
allocations of profit and loss be pro rata from capital and ordinary income,
gain, loss and expense, adjustments to such allocations shall be made to reflect
the extent to which income or expense is otherwise determined and periodically
allocated to the Unitholders, and such periodic allocations and adjustment shall
be determined in a manner that in the judgment of the Managing Owner is
consistent with the intent of this Section 8(b).
(1) Trust
profit and loss shall be allocated as follows:
(A) For
the purpose of allocating profit or loss among the Unitholders, there shall be
established a tax account with respect to each outstanding Unit and with respect
to the Managing Owner. The initial balance of each tax account shall
be the amount contributed to the Trust for each Unit and the amount contributed
by the Managing Owner. As of the end of each of the first sixty
months after the Trust begins operations, the balance of such tax account shall
be reduced by each Unit’s allocable share of the amount of organizational and
initial offering cost reimbursements amortized as of the end of such month by
the Trust, as provided in Section 8(c). As of the end of each month
after the Trust begins operations, the balance of such tax account shall be
further reduced by each Unit’s allocable share of any amount payable by the
Trust in respect of that month for the costs of the ongoing offering of
Units. The adjustment to reflect the amortization of organizational
and initial offering cost reimbursements as well as ongoing offering costs shall
be made prior to the following allocations of Trust profit and loss (and shall
be taken into account in making such allocations). Tax accounts shall
be adjusted as of the end of each fiscal year and as of the date a Unitholder
redeems any Units as follows:
(i) Each
tax account shall be increased by the amount of profit allocated to the
Unitholder pursuant to Section 8(b)(1)(B) and 8(b)(1)(C) below.
(ii) Each
tax account shall be decreased by the amount of loss allocated to the Unitholder
pursuant to Section 8(b)(1)(D) and 8(b)(1)(E) below and by the amount of any
distributions the Unitholder has received with respect to such
Unit.
(iii) When
a Unit is redeemed, the tax account attributable to such Unit (determined after
making all allocations set forth in Section 8(b)) shall be
eliminated.
(B) Profits
shall be allocated first to each Unitholder who has redeemed any Units during
the fiscal year up to the excess, if any, of the amount received upon redemption
of the Units over the amount in the Unitholder’s tax account attributable to the
redeemed Units.
(C) Profit
remaining after the allocation thereof pursuant to Section 8(b)(1)(B) shall be
allocated next among all Unitholders who hold Units outstanding at the end of
the applicable fiscal year whose capital accounts with respect to such Units are
in excess of their tax accounts in the ratio that each such Unitholder’s excess
bears to all such Unitholders’ excesses. Profit remaining after the
allocation described in the preceding sentence shall be allocated among all
Unitholders in proportion to their holdings of outstanding Units.
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(D) Loss
shall be allocated first to each Unitholder who has redeemed any Units during
the fiscal year up to the excess, if any, of the amount in such Unitholder’s tax
account attributable to the redeemed Units over the amount received upon
redemption of the Units.
(E) Loss
remaining after the allocation thereof pursuant to Section 8(b)(1)(D) shall be
allocated next among all Unitholders who hold Units outstanding at the end of
the applicable fiscal year whose tax accounts with respect to such Units are in
excess of their capital accounts in the ratio that each such Unitholder’s excess
bears to all such Unitholders’ excesses. Loss remaining after the
allocation pursuant to the preceding sentence shall be allocated among all
Unitholders in proportion to their holding of outstanding Units.
(2) In
the event that a Unit has been assigned, the allocations prescribed by this
Section 8(b) shall be made with respect to such Unit without regard to the
assignment, except that in the year of assignment the allocations prescribed by
this Section 8(b) shall, to the extent permitted for federal income tax
purposes, be allocated between the assignor and assignee using the interim
closing of the books method.
(3) The
allocation for federal income tax purposes of profit and loss, as set forth
herein, is intended to allocate taxable profit and loss among Unitholders
generally in the ratio and to the extent that net profit and net loss are
allocated to such Unitholders under Section 8(a) hereof so as to eliminate, to
the extent possible, any disparity between a Unitholder’s capital account and
his tax account with respect to each Unit then outstanding, consistent with the
principles set forth in Section 704(c) of the Code.
(4) Notwithstanding
anything herein to the contrary, in the event that at the end of any Trust
taxable year any Unitholder’s capital account is adjusted for, or such
Unitholder is allocated, or there is distributed to such Unitholder any item
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) in
an amount not reasonably expected at the end of such year, and such treatment
creates a deficit balance in such Unitholder’s capital account, then such
Unitholder shall be allocated all items of income and gain of the Trust for such
year and for all subsequent taxable years of the Trust until such deficit
balance has been eliminated. In the event that any such unexpected
adjustments, allocations or distributions create a deficit balance in the
capital accounts of more than one Unitholder in any Trust taxable, all items of
income and gain of the Trust for such taxable year and all subsequent taxable
years shall be allocated among all such Unitholders in proportion to their
respective deficit balances until such deficit balances have been
eliminated.
(5) The
allocations of profit and loss to the Unitholders shall not exceed the
allocations permitted under Subchapter K of the Code, as determined by the
Managing Owner, whose determination shall be binding.
The
Managing Owner may adjust the allocations set forth in this Section 8(b), in the
Managing Owner’s discretion, if the Managing Owner believes that doing so will
achieve more equitable allocations or allocations more consistent with the
Code.
(c) Expenses.
The Trust
shall pay no later than the tenth Business Day of each month to the Managing
Owner the monthly Brokerage Fee at an annual rate of 5.0% (or approximately
0.4167% per month) of the Trust’s assets (after deduction of the management
fee(s) payable to the Trust’s trading advisor(s)) as of the immediately
preceding month-end (the “Brokerage Fee Rate”).
Any goods
and services provided to the Trust by the Managing Owner shall be provided at
rates and terms at least as favorable as those which may be obtained from third
parties in arm’s-length negotiations. All of the expenses which are
for the Trust’s account shall be billed directly to the Trust, as
appropriate. Appropriate reserves may be created, accrued and charged
against Net Assets for contingent liabilities, if any, as of the date any such
contingent liability becomes known to the Managing Owner.
The Trust
shall bear the costs of the continuous offering of the Units (other than selling
commissions and ongoing compensation), as incurred; provided that the Managing
Owner shall absorb, without reimbursement from the Trust, all such costs to the
extent that such costs exceed 0.5% of the Trust’s average month-end Net Assets
in any fiscal year. The amount of any such costs borne by the Trust
shall be allocated on a pro rata basis to each Unit outstanding at any month-end
(determined prior to any redemptions).
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Net
Assets, for purposes of calculating the 0.5% limitations on continuous offering
costs set forth in this Section 8(c), shall be calculated in the same manner as
calculation of the redemption value of a Unit, i.e., net of all accrued fees and
expenses including any accrued Incentive Fee(s) (but prior to redemption
charges).
In no
event shall organizational and offering expenses (including redemption fees, but
excluding ongoing compensation) exceed 15% of the capital contributions to the
Trust.
The
Managing Owner shall not allocate any of its internal expenses or overhead to
the account of the Trust.
(d) Limited Liability of
Unitholders. Each Unit, when purchased in accordance with this
Declaration and Agreement of Trust, shall, except as otherwise provided by law,
be fully-paid and nonassessable. Any provisions of this Declaration
and Agreement of Trust to the contrary notwithstanding, Unitholders (including
the Managing Owner, except to the extent otherwise provided herein) shall be
entitled to the same limitation on personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
The Trust
will indemnify, to the full extent permitted by law, each Unitholder (other than
the Managing Owner in the event that the Managing Owner acquires Units) against
any claims of liability asserted against such Unitholder solely because such
Unitholder is a beneficial owner of the Trust (other than in respect of taxes
due from such Unitholder as such a beneficial owner).
Every
written note, bond, contract, instrument, certificate or undertaking made or
issued by the Managing Owner shall give notice to the effect that the same was
executed or made by or on behalf of the Trust and that the obligations of any of
the foregoing are not binding upon the Unitholders individually but are binding
only upon the assets and property of the Trust, and that no resort shall be had
to the Unitholders’ personal property for the satisfaction of any obligation or
claim thereunder, and appropriate references may be made to this Declaration and
Agreement of Trust and may contain any further recital which the Managing Owner
deems appropriate, but the omission thereof shall not operate to bind the
Unitholders individually or otherwise invalidate any such note, bond, contract,
instrument, certificate or undertaking.
(e) Return of Capital Contributions. No
Unitholder or subsequent assignee shall have any right to demand the return of
its capital contribution or any profits added thereto, except through redeeming
Units or upon dissolution of the Trust, in each case as provided
herein. In no event shall a Unitholder or subsequent assignee be
entitled to demand or receive property other than cash.
9. Management
of the Trust.
(a) Authority of the Managing
Owner. Pursuant to Section 3806 of the Act, the Trust shall be
managed by the Managing Owner, and the conduct of the Trust’s business shall be
controlled and conducted solely by the Managing Owner in accordance with this
Declaration and Agreement of Trust.
The
Managing Owner, to the exclusion of all other Unitholders, shall control,
conduct and manage the business of the Trust. The Managing Owner
shall have sole discretion in determining what distributions of profits and
income, if any, shall be made to the Unitholders (subject to the allocation
provisions hereof), shall execute various documents on behalf of the Trust and
the Unitholders pursuant to powers of attorney and shall supervise the
liquidation of the Trust if an event causing dissolution of the Trust
occurs.
The
Managing Owner may, in furtherance of the business of the Trust, cause the Trust
to buy, sell, hold or otherwise acquire or dispose of commodities, futures
contracts, options on futures contracts, and spot and forward contracts traded
on exchanges or otherwise, arbitrage positions, repurchase agreements,
interest-bearing securities, deposit accounts and similar instruments and other
assets, and cause the trading of the Trust to be limited to only certain of the
foregoing instruments. The Managing Owner is specifically authorized
to enter into brokerage, custodial and margining arrangements as described in
the prospectus relating to the public offering of the Units, as it may be
supplemented or updated from time to time (the “Prospectus”). The
Managing Owner may engage, and compensate on behalf of the Trust from funds of
the Trust, or agree to share profits and losses with, such persons, firms or
corporations, including (except as described in this Declaration and Agreement
of Trust) the Managing Owner and any affiliated person or entity, as the
Managing Owner in its sole judgment shall deem advisable for the conduct and
operation of the business of the Trust; provided, that no such arrangement shall
allow brokerage commissions paid by the Trust in excess of such amount as
permitted under the North American Securities Administrators Association, Inc.
Guidelines for the Registration of Commodity Pool Programs (the “NASAA
Guidelines”) in effect as of the date of the Prospectus (i.e., 14% annually —
including pit brokerage and service fees — of the Trust’s average Net Assets,
excluding the assets, if any, not directly related to trading
activity). The Managing Owner shall reimburse the Trust, on an annual
basis, to the extent that the Trust’s brokerage commissions have exceeded 14% of
the Trust’s average Net Assets during the preceding year.
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During
any fiscal year of the Trust, if the management fee exceeds the 6% annual
management fee contemplated by the NASAA Guidelines, the Managing Owner shall
reimburse the Trust for such excess.
The
Managing Owner may take such other actions on behalf of the Trust as the
Managing Owner deems necessary or desirable to manage the business of the
Trust.
Any
material change in the Trust’s basic investment policies or structure shall
require the approval of Unitholders owning more than 50% of the Units then
outstanding. In addition, the Managing Owner shall notify Unitholders
of any material changes relating to the Trust as provided in Section 10
hereof.
The
Managing Owner is hereby authorized to perform all duties imposed by Sections
6221 through 6232 of the Code on the Managing Owner as the “tax matters partner”
of the Trust.
(b) Fiduciary
Duties. The Managing Owner shall be under a fiduciary duty to
conduct the affairs of the Trust in the best interests of the Trust, provided
that the Managing Owner shall not be obligated to engage in any conduct on
behalf of the Trust to the detriment of any other commodity pool to which the
Managing Owner owes similar fiduciary duties. Except as otherwise
provided herein or disclosed in the Prospectus, the Unitholders will under no
circumstances be deemed to have contracted away the fiduciary obligations owed
them by the Managing Owner under the common law. The Managing Owner’s
fiduciary duty includes, among other things, the safekeeping of all funds and
assets of the Trust and the use thereof for the benefit of the
Trust. The funds of the Trust will not be commingled with the
funds of any other person or entity (deposit of funds with a commodity or
securities broker, clearinghouse or forward dealer shall not be deemed to
constitute “commingling” for these purposes). The Managing Owner will
take no actions with respect to the property of the Trust which do not benefit
the Trust. The Managing Owner shall at all times act with integrity
and good faith and exercise due diligence in all activities relating to the
conduct of the business of the Trust and in resolving conflicts of
interest.
(c) Loans;
Investments. Except as otherwise provided in Section 8(c), the
Trust shall not make loans to any party. The Managing Owner shall
make no loans to the Trust unless approved by the Unitholders in accordance with
Section 19(a). If the Managing Owner makes a loan to the Trust,
the Managing Owner shall not receive interest in excess of its interest costs,
nor may the Managing Owner receive interest in excess of the amounts which would
be charged to the Trust (without reference to the Managing Owner’s financial
resources or guarantees) by unrelated banks on comparable loans for the same
purpose. The Managing Owner shall not receive “points” or other
financing charges or fees regardless of the amount. The Trust shall
not invest in any debt instruments other than Government Securities and other
Commodity Futures Trading Commission (“CFTC”)-authorized investments, or invest
in any equity security without prior notice to Unitholders.
(d) Certain Conflicts of Interest
Prohibited. No person or entity may receive, directly or
indirectly, any advisory or management fees, profit shares or any profit-sharing
allocation, from joint ventures, partnerships or similar arrangements in which
the Trust participates, for investment advice or management who shares or
participates in any commodity brokerage commissions paid by the Trust; no broker
may pay, directly or indirectly, rebates or give-ups to any trading advisor,
manager or joint venturer, or to the Managing Owner or any of its affiliates;
and such prohibitions may not be circumvented by any reciprocal business
arrangements. No trading advisor shall be affiliated with the Trust’s
commodity broker or any of its affiliates.
(e) Certain Agreements. Any
agreements between the Trust and the Managing Owner or any affiliate of the
Managing Owner, or a trading advisor, shall be terminable by the Trust, without
penalty, on no more than 60 days’ written notice.
In
addition to any specific contract or agreements described herein, the Trust and
the Managing Owner on behalf of the Trust may enter into any other contracts or
agreements specifically described in or contemplated by the Prospectus without
any further act, approval or vote of the Unitholders, notwithstanding any other
provisions of this Declaration and Agreement of Trust, the Act or any applicable
laws, rules or regulations; provided, however, any material change in the
Trust’s basic investment policies or structure shall require the approval of
Unitholders owning more than 50% of the Units then outstanding and the Managing
Owner shall notify Unitholders of any material changes relating to the Trust as
provided in Section 10 hereof.
The
Managing Owner shall not enter into any advisory agreement with any trading
advisor that does not satisfy the relevant experience requirements under the
NASAA Guidelines (i.e., a minimum of three years’ experience in the managed
futures industry).
The
maximum period covered by any contract entered into by the Trust, except for the
various provisions of the Selling Agreement which survive the final closing of
the sale of the Units, shall not exceed one year.
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The
brokerage commissions paid by the Trust shall be competitive. The
Trust shall seek the best price and services available for its commodity
transactions.
▇.▇.
▇’▇▇▇▇▇ & Associates, LLC credits the Trust with interest at 100% of the
Trust’s average daily U.S. dollar balances on deposit with ▇.▇. ▇’▇▇▇▇▇ &
Associates, LLC during each month at 75% of the average 91-day Treasury ▇▇▇▇
rate and at LIBOR less 1.0% in respect of non-U.S. dollar deposits, or as
otherwise disclosed in the prospectus. The economic benefit from the
possession of the Trust’s assets in excess of the interest credited by ▇.▇.
▇’▇▇▇▇▇ & Associates, LLC to the Trust will be retained by ▇.▇. ▇’▇▇▇▇▇
& Associates, LLC. The Trust and the Managing Owner reserve the
right to deposit, at any time, a portion of the Trust assets with a custodian
and engage the services of a third-party cash manager to manage such assets with
the goal of enhancing net return on such assets.”
(f) Prohibition on
“Pyramiding.” The Trust is prohibited from employing the
trading technique commonly known as “pyramiding.” A trading manager
or advisor of the Trust taking into account the Trust’s open-trade equity on
existing positions in determining generally whether to acquire additional
commodity positions on behalf of the Trust will not be considered to be engaging
in “pyramiding.”
(g) Freedom of
Action. The Managing Owner is engaged, and may in the future
engage, in other business activities and shall not be required to refrain from
any other activity nor forgo any profits from any such activity, whether or not
in competition with the Trust. Neither the Trust nor any of the
Unitholders shall have any rights by virtue of this Declaration and Agreement of
Trust in and to such independent ventures or the income or profits derived
therefrom. Unitholders may similarly engage in any such other
business activities. The Managing Owner shall devote to the Trust
such time as the Managing Owner may deem advisable to conduct the Trust’s
business and affairs.
10. Audits
and Reports to Unitholders.
The
Trust’s books shall be audited annually by an independent certified public
accountant. The Trust shall cause each Unitholder to receive
(i) within 90 days after the close of each fiscal year certified financial
statements for the fiscal year then ended, (ii) within 90 days of the end
of each fiscal year (but in no event later than March 15 of each year) such
tax information as is necessary for a Unitholder to complete its federal income
tax return and (iii) such other annual and monthly information as the CFTC
may by regulation require. The Managing Owner shall include in the
annual reports sent to Unitholders an approximate estimate (calculated as
accurately as may be reasonably practicable) of the round-turn equivalent
brokerage commission rate paid by the Trust during the preceding year (including
forward contracts on a futures-equivalent basis for purposes of such
calculation).
Unitholders
or their duly authorized representatives may inspect the books and records of
the Trust, (which do not include records of the Trust’s trades) during normal
business hours upon reasonable written notice to the Managing Owner and obtain
copies of such records upon payment of reasonable reproduction costs; provided,
however, that upon request by the Managing Owner, the requesting Unitholder
shall represent that the inspection and/or copies of such records will not be
used for commercial purposes unrelated to such Unitholder’s interest as a
beneficial owner of the Trust. The Managing Owner shall have the
right to keep confidential from the Unitholders, for such period of time as the
Managing Owner deems reasonable, any information that the Managing Owner
reasonably believes to be in the nature of trade secrets or other information
the disclosure of which the Managing Owner in good faith believes is not in the
best interest of the Trust or could damage the Trust or its business or which
the Trust is required by law or by agreement with a third party to keep
confidential.
The
Managing Owner shall calculate the Net Asset Value per Unit on a monthly basis
and sell and redeem Units at Net Asset Value.
The
Managing Owner shall notify the Unitholders of (i) changes to the trading method
of the Trust’s trading advisor(s) which the Managing Owner believes to be
material, (ii) changes in Brokerage Fee, incentive fee(s) or other fees paid by
the Trust or (iii) material changes in the basic investment policies or
structure of the Trust. The Managing Owner shall so notify
Unitholders, by certified mail or other means of notification providing for
evidence of delivery, prior to any such change. Such notification
shall contain a ballot (if applicable), a description of the Unitholders’ voting
and redemption rights, and a description of any material effect of such
change. The Managing Owner will send written notice to each
Unitholder within seven days of any decline in the Net Asset Value per Unit to
50% or less of such value as of the previous month-end. Any such
notice shall contain a description of the Unitholders’ voting and redemption
rights. The Trust shall pay the cost of any notification delivered
pursuant to this paragraph.
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The
Managing Owner shall prepare or cause to be prepared and shall file on or before
the due date (or any extension thereof) any federal, state or local tax returns
required to be filed by the Trust. The Managing Owner shall cause the
Trust to pay any taxes payable by the Trust; provided, however, that such taxes
need not be paid if the Managing Owner or the Trust is in good faith and by
appropriate legal proceedings contesting the validity, applicability or amount
thereof, and such contest does not materially endanger any right or interest of
the Trust.
The
Managing Owner shall maintain and preserve all required records relating to the
Trust for a period of not less than six years from the receipt of such
records.
In
particular, and not by way of limitation, the Managing Owner will retain all
Subscription Agreement and Power of Attorney Signature Pages submitted by
persons admitted as Unitholders, and all other records necessary to substantiate
that Units are sold only to purchasers for whom the Units are a suitable
investment, for at least six years after Units are sold to such
persons.
The
Managing Owner shall seek the best price and services for the Trust’s trading,
and will, with the assistance of the Trust’s commodity broker(s), make an annual
review of the commodity brokerage arrangements applicable to the
Trust. Not by way of qualifying the Managing Owner’s obligations to
ensure that the Trust’s brokerage arrangements are competitive, but rather as a
means of providing additional information to the Unitholders, in connection with
such review, the Managing Owner will ascertain, to the extent practicable, the
commodity brokerage rates charged to other major commodity pools whose trading
and operations are, in the opinion of the Managing Owner, comparable to those of
the Trust, in order to assess whether the rates charged the Trust are reasonable
in light of the services it receives and the terms upon which the Trust was
promoted to subscribers. If, as a result of such review, the Managing
Owner determines that such rates are unreasonable in light of the services
provided to the Trust and the terms upon which the Trust was promoted, the
Managing Owner will notify the Unitholders, setting forth the rates charged to
the Trust and several funds which are, in the Managing Owner’s opinion,
comparable to the Trust. The Managing Owner shall also make an annual
review of the spot and forward trading arrangements for the Trust in an attempt
to determine whether such arrangements are competitive with those of other
comparable pools in light of the circumstances.
In
addition to the undertakings in the preceding paragraph, the Trust will seek the
best price and services available on its commodity brokerage
transactions. All brokerage transactions will be effected at
competitive rates. Brokerage commissions may not exceed the cap set
forth in Section 9(a). The Managing Owner will annually review the
brokerage rates paid by the Trust to guarantee that the criteria set forth in
this paragraph are followed. The Managing Owner may not rely solely
on the rates charged by other major commodity pools in complying with this
paragraph.
11 Assignability
of Units.
Each
Unitholder expressly agrees that it will not assign, transfer or dispose of, by
gift or otherwise, any of its Units or any part or all of its right, title and
interest in the capital or profits of the Trust in violation of any applicable
federal or state securities laws or, except by involuntary operation of law,
without giving written notice to the Managing Owner. No assignment,
transfer or disposition by an assignee of Units or of any part of its right,
title and interest in the capital or profits of the Trust shall be effective
against the Trust, the Trustee or the Managing Owner until the Managing Owner
has received the written notice of the assignment; the Managing Owner shall not
be required to give any assignee any rights hereunder prior to receipt of such
notice. The Managing Owner may, in its sole discretion, waive any
such notice. No such assignee, except with the consent of the
Managing Owner, may become a substituted Unitholder, nor will the estate or any
beneficiary of a deceased Unitholder or assignee have any right to redeem Units
from the Trust except by redemption as provided in Section 12
hereof. The Managing Owner’s consent is required for the admission of
a substituted Unitholder, and the Managing Owner intends to so consent;
provided, that the Managing Owner and the Trust receive an opinion of counsel to
the Managing Owner and of counsel to the Trust that such admission will not
adversely affect the classification of the Trust as a partnership for federal
income tax purposes; and provided further, that an assignee shall not become a
substituted Unitholder without first having executed an instrument reasonably
satisfactory to the Managing Owner accepting and adopting the terms and
provisions of this Declaration and Agreement of Trust, including a Subscription
Agreement and Power of Attorney Signature Page, a counterpart signature page to
this Declaration and Agreement of Trust or other comparable document, and
without having paid to the Trust a fee sufficient to cover all reasonable
expenses of the Trust in connection with its admission as a substituted
Unitholder. Each Unitholder agrees that with the consent of the
Managing Owner any assignee may become a substituted Unitholder without need of
the further act or approval of any Unitholder. If the Managing Owner
withholds consent, an assignee shall not become a substituted Unitholder, and
shall not have any of the rights of a Unitholder, except that the assignee shall
be entitled to receive that share of capital and profits and shall have that
right of redemption to which its assignor would otherwise have been
entitled. No assignment, transfer or disposition of Units shall be
effective against the Trust or the Managing Owner until the last day of the
month in which the Managing Owner receives notice of such assignment, transfer
or disposition.
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12. Redemptions.
A
Unitholder (including the Managing Owner except to the extent that its power to
redeem is limited by any other provision of this Declaration and Agreement of
Trust) to the extent that it owns Units or any assignee of Units of whom the
Managing Owner has received written notice as described above, may redeem all or
part of its Units, effective as of the close of business (as determined by the
Managing Owner) on the last day of any month, provided, that (i) all
liabilities, contingent or otherwise, of the Trust, except any liability to
Unitholders on account of their capital contributions, have been paid or there
remains property of the Trust sufficient to pay them, (ii) the Unitholder
redeems at least $1,000 of Units, (iii) in the case of partial redemption, such
Unitholder’s investment in the Trust after the partial redemption will be at
least $1,000, and (iv) the Managing Owner shall have timely received a
request for redemption (as provided below). If Units are redeemed by
a Unitholder at a time when there are accrued incentive fee(s) due to the
Trust’s trading advisor(s), the amount of such accrual attributable to the Units
being redeemed will be deducted from the redemption proceeds payable to the
redeeming Unitholder and paid to the Trust’s trading
advisor(s). Units redeemed on or before the end of the eleventh full
calendar month after such Units are issued by the Trust are subject to early
redemption charges of 2% of the Net Asset Value at which they are
redeemed. Such charges will be deducted from redemption proceeds due
to the Unitholder making the redemption and will be paid to the Managing
Owner. Units are issued, for purposes of determining whether an early
redemption charge is due, as of the date as of which the subscription price of
such Units is invested in the Trust, not when subscriptions are submitted by
Unitholders or accepted by the Managing Owner or subscription funds are accepted
into escrow. No redemption charges shall be applicable to Unitholders
who redeem because the Trust’s expenses have been increased.
In the
event that a Unitholder acquires Units as of the end of more than one month,
such Units will be treated on a “first-in, first-out” basis for purposes of
identifying which of such Units are being redeemed so as to determine whether
early redemption charges apply.
Requests
for redemption as of any month-end must be received by the Managing Owner on or
before the fifth business day prior to the month-end of redemption (including
the last business day of the month), or such later date as shall be acceptable
to the Managing Owner.
If as of
the close of business (as determined by the Managing Owner) on any day, the Net
Asset Value of a Unit has decreased to less than 50% of the Net Asset Value per
Unit as of the previous highest month-end Net Asset Value per Unit or to $50 or
less, after adding back all distributions, the Managing Owner shall cause the
Trust to liquidate all open positions as expeditiously as possible and suspend
trading. Within ten business days after the suspension of trading,
the Managing Owner shall declare a Special Redemption Date. Such
Special Redemption Date shall be a business day within 30 business days from the
suspension of trading by the Trust, and the Managing Owner shall mail notice of
such date to each Unitholder and assignee of Units of whom it has received
written notice as described above, by first-class mail, postage prepaid, not
later than ten business days prior to such Special Redemption Date, together
with instructions as to the procedure such Unitholder or assignee must follow to
have its Units redeemed on such Date (only entire, not partial, interests in the
Trust may be redeemed on a Special Redemption Date, unless otherwise determined
by the Managing Owner). Upon redemption pursuant to a Special
Redemption Date, a Unitholder or any other assignee of whom the Managing Owner
has received written notice as described above, shall receive from the Trust an
amount equal to the Net Asset Value of its Units, determined as of the close of
business (as determined by the Managing Owner) on such Special Redemption
Date. No redemption charges shall be assessed on any such Special
Redemption Date. As in the case of a regular redemption, an assignee
shall not be entitled to redemption until the Managing Owner has received
written notice as described above of the assignment, transfer or disposition
under which the assignee claims an interest in the Units to be
redeemed. If, after a Special Redemption Date, the Net Assets of the
Trust are at least $1,000,000 and the Net Asset Value per Unit is in excess of
$25, the Trust may, in the discretion of the Managing Owner, resume
trading.
The
Managing Owner may at any time and in its discretion declare a Special
Redemption Date, should the Managing Owner determine that it is in the best
interests of the Trust to do so. If the Managing Owner declares a
Special Redemption Date, the Managing Owner shall not be required to again call
a Special Redemption Date (whether or not a Special Redemption Date would
otherwise be required to be called as described above); and the Managing Owner
in its notice of a Special Redemption Date may, at its discretion, establish the
conditions, if any, under which other Special Redemption Dates must be called,
which conditions may be determined in the sole discretion of the Managing Owner,
irrespective of the provisions of the preceding paragraph. The
Managing Owner may also, in its discretion, declare additional regular
redemption dates for Units, permit certain Unitholders to redeem at other than
at month-end and waive the notice period otherwise required to effect
redemptions.
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Redemption
payments will be made within ten business days after the month-end of
redemption, except that under special circumstances, including, but not limited
to, inability to liquidate commodity positions as of a redemption date or
default or delay in payments due the Trust from commodity brokers, banks or
other persons or entities, the Trust may in turn delay payment to Unitholders or
assignees requesting redemption of their Units of the proportionate part of the
Net Asset Value of such Units equal to the proportionate part of the Trust’s
aggregate Net Asset Value represented by the sums which are the subject of such
default or delay.
The
Managing Owner may require a Unitholder to redeem all or a portion of such
Unitholder’s Units if the Managing Owner considers doing so to be desirable for
the protection of the Trust, and will use best efforts to do so to the extent
necessary to prevent the Trust from being deemed to hold “plan assets” under the
provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) or
the Code, with respect to any “employee benefit plan” subject to ERISA or with
respect to any “plan” or “account” subject to Section 4975 of the
Code.
13. Offering
of Units.
The
Managing Owner, on behalf of the Trust shall (i) cause to be filed a
Registration Statement or Registration Statements, and such amendments thereto
as the Managing Owner may deem advisable or necessary, with the Securities and
Exchange Commission for the registration and continuous public offering of the
Units, (ii) use its best efforts to qualify the Units for sale under the
securities laws of such States of the United States or other jurisdictions as
the Managing Owner may deem advisable and (iii) take such action with
respect to the matters described in (i) and (ii) as the Managing Owner
may deem advisable or necessary.
Fractional
Units, calculated to five decimal places, may be sold.
All sales
of Units in the United States will be conducted by registered
brokers.
The
Managing Owner shall not accept any subscriptions for Units if doing so would
cause the Trust to hold “plan assets” under ERISA or the Code with respect to
any “employee benefit plan” subject to ERISA or with respect to any “plan” or
“account “ subject to Section 4975 of the Code. If a subscriber
has its subscription reduced for such reason, such subscriber shall be entitled
to rescind its subscription in its entirety even though subscriptions are
otherwise irrevocable.
All
subscriptions will be held in escrow by The Bank of New York Mellon Corporation
(the “Escrow Agent”) until released as of the last business day of the month.
The interest actually earned on subscriptions funds while held by the Escrow
Agent will be invested in the Trust, and each subscriber will be issued
additional Units reflecting the subscriber’s attributable share of such
interest. The Managing Owner may terminate any offering of Units at
any time. The aggregate of all capital contributions shall be
available to the Trust to carry on its business, and no interest shall be paid
by the Trust on any such contributions after such contributions are released by
the Escrow Agent.
14. Additional
Offerings.
The
Managing Owner may, in its discretion, continue, suspend or discontinue the
public offering of the Units, as well as make additional public or private
offerings of Units, provided that the net proceeds to the Trust of any such
sales shall in no event be less than the Net Asset Value per Unit (as defined in
Section 5(d)) at the time of sale (unless the new Unit’s participation in the
profits and losses of the Trust is appropriately adjusted). No
Unitholder shall have any preemptive, preferential or other rights with respect
to the issuance or sale of any additional Units, other than as set forth in the
preceding sentence.
15. Special
Power of Attorney.
Each
Unitholder by virtue of having purchased or otherwise acquired Units does hereby
irrevocably constitute and appoint the Managing Owner and each officer of the
Managing Owner, with full power of substitution, as its true and lawful
attorney-in-fact, in its name, place and stead, to execute, acknowledge, swear
to (and deliver as may be appropriate) on its behalf and file and record in the
appropriate public offices and publish (as may in the reasonable judgment of the
Managing Owner be required by law): (i) this Declaration and
Agreement of Trust, including any amendments and/or restatements hereto duly
adopted as provided herein; (ii) certificates in various jurisdictions, and
amendments and/or restatements thereto; (iii) all conveyances and other
instruments which the Managing Owner deems appropriate to qualify or continue
the Trust in the State of Delaware and the jurisdictions in which the Trust may
conduct business, or which may be required to be filed by the Trust or the
Unitholders under the laws of any jurisdiction or under any amendments or
successor statutes to the Act, to reflect the dissolution or termination of the
Trust or the Trust being governed by any amendments or successor statutes to the
Act or to reorganize or refile the Trust in a different jurisdiction; and
(iv) to file, prosecute, defend, settle or compromise litigation, claims or
arbitrations on behalf of the Trust. The Power of Attorney granted
herein shall be irrevocable and
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deemed to be a power coupled with an interest (including, without limitation, the interest of the other Unitholders in the Managing Owner being able to rely on its authority to act as contemplated by this Section 15) and shall survive and shall not be affected by the subsequent incapacity, disability or death of a ▇▇▇▇▇▇▇▇▇▇.
▇▇. Withdrawal
of a Unitholder.
The Trust
shall be dissolved upon the death, insanity, bankruptcy, retirement,
resignation, expulsion, withdrawal, insolvency or dissolution of the Managing
Owner, or any other event that causes the Managing Owner to cease to be the
managing owner of the Trust, unless the Trust is continued pursuant to the terms
of Section 5(a)(3). In addition, the Managing Owner may withdraw from
the Trust, without any breach of this Declaration and Agreement of Trust, at any
time upon 120 days’ written notice by first class mail, postage prepaid, to the
Trustee, each Unitholder and each assignee of whom the Managing Owner has
notice. If the Managing Owner withdraws from the Trust and all
Unitholders agree in writing to continue the business of the Trust and to the
appointment, effective as of the date of withdrawal of the Managing Owner, of
one or more managing owners, the Managing Owner shall pay all expenses incurred
as a result of its withdrawal. Upon removal or withdrawal, the
Managing Owner shall be entitled to redeem its interest in the Trust at its Net
Asset Value on the next valuation date following the date of removal or
withdrawal.
The
Managing Owner may not assign its general liability interest or its obligation
to manage the Trust without the consent of each Unitholder; provided, however,
that the consent of Unitholders is not required if the Managing Owner assigns
its general liability interest and its obligation to manage the Trust to an
entity controlling, controlled by or under common control with the Managing
Owner, provided that such entity (i) expressly assumes all obligations of the
Managing Owner under this Declaration and Agreement of Trust and (ii) is
entitled to act in the capacity of managing owner for the benefit of the
Trust. The Managing Owner shall notify all Unitholders of such
assignment. The Managing Owner will notify all Unitholders of any
change in the principals of the Managing Owner.
The
death, incompetency, withdrawal, insolvency or dissolution of a Unitholder or
any other event that causes a Unitholder to cease to be a beneficial owner
(within the meaning of the Act) in the Trust shall not terminate or dissolve the
Trust, and a Unitholder, the Unitholder’s estate, custodian or personal
representative shall have no right to redeem or value such Unitholder’s interest
except as provided in Section 12 hereof. Each Unitholder that is a
natural person expressly agrees that in the event of his or her death, he or she
waives on behalf of himself or herself and his or her estate, and directs the
legal representatives of his or her estate and any person interested therein to
waive, the furnishing of any inventory, accounting or appraisal of the assets of
the Trust and any right to an audit or examination of the books of the
Trust. Nothing in this Section 16 shall, however, waive any right
given elsewhere in this Declaration and Agreement of Trust for Unitholders to be
informed of the Net Asset Value of their Units, to receive periodic reports,
audited financial statements and other information from the Managing Owner or
the Trust or to redeem or transfer Units.
17. Benefit
Plan Investors.
Each
Unitholder or assignee that is an “employee benefit plan” as defined in and
subject to ERISA, or a “plan” as defined in Section 4975 of the Code (each such
employee benefit plan and plan, a “Plan”), and each fiduciary thereof who has
caused the Plan to become a Unitholder or assignee (a “Plan Fiduciary”),
represents and warrants that: (a) the Plan Fiduciary has considered
an investment in the Trust by such Plan in light of the risks relating thereto;
(b) the Plan Fiduciary has determined that, in view of such considerations, the
investment in the Trust by the Plan is consistent with the Plan Fiduciary’s
responsibilities under ERISA; (c) the investment in the Trust by the Plan does
not violate, and is not otherwise inconsistent with, the terms of any legal
document constituting the Plan or any trust agreement thereunder; (d) the Plan’s
investment in the Trust has been duly authorized and approved by all necessary
parties; (e) none of the Managing Owner, the Trustee, the Escrow Agent, any of
their respective affiliates or any of their respective agents or
employees: (i) has investment discretion with respect to the
investment of assets of the Plan used to purchase Units; (ii) has authority or
responsibility to or regularly gives investment advice with respect to the
assets of the Plan used to purchase Units for a fee and pursuant to an agreement
or understanding that such advice will serve as a primary basis for investment
decisions with respect to the Plan and that such advice will be based on the
particular investment needs of the Plan; or (iii) is an employer maintaining or
contributing to the Plan; and (f) the Plan Fiduciary: (i) is
authorized to make, and is responsible for, the decision of the Plan to invest
in the Trust, including the determination that such investment is consistent
with the requirement imposed by Section 404 of ERISA that Plan investments be
diversified so as to minimize the risks of large losses; (ii) is independent of
the Managing Owner, the Trustee, the Escrow Agent, and any of their respective
affiliates; and (iii) is qualified to make such investment
decision.
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18. Standard
of Liability; Indemnification.
(a) Standard of Liability for the
Managing Owner. The Managing Owner and its Affiliates, as
defined below, shall have no liability to the Trust or to any Unitholder for any
loss suffered by the Trust which arises out of any action or inaction of the
Managing Owner or its Affiliates, if the Managing Owner, in good faith,
determined that such course of conduct was in the best interests of the Trust,
and such course of conduct did not constitute negligence or misconduct of the
Managing Owner or its Affiliates.
(b) Indemnification of the Managing
Owner by the Trust. To the fullest extent permitted by law,
subject to this Section 18, the Managing Owner and its Affiliates shall be
indemnified by the Trust against any losses, judgments, liabilities, expenses
and amounts paid in settlement of any claims sustained by them in connection
with the Trust; provided that such claims were not the result of negligence or
misconduct on the part of the Managing Owner or its Affiliates, and the Managing
Owner, in good faith, determined that such conduct was in the best interests of
the Trust; and provided further that Affiliates of the Managing Owner shall be
entitled to indemnification only for losses incurred by such Affiliates in
performing the duties of the Managing Owner and acting wholly within the scope
of the authority of the Managing Owner.
Notwithstanding
anything to the contrary contained in the preceding two paragraphs, the Managing
Owner and its Affiliates and any persons acting as selling agent for the Units
shall not be indemnified for any losses, liabilities or expenses arising from or
out of an alleged violation of federal or state securities laws unless
(1) there has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the particular indemnitee and
the court approves indemnification of the litigation costs, or (2) such
claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the particular indemnitee and the court approves
indemnification of the litigation costs, or (3) a court of competent
jurisdiction approves a settlement of the claims against a particular indemnitee
and finds that indemnification of the settlement and related costs should be
made.
In any
claim for indemnification for federal or state securities law violations, the
party seeking indemnification shall place before the court the position of the
Securities and Exchange Commission, the California Department of Corporations,
the Massachusetts Securities Division, the Missouri Securities Division, the
Pennsylvania Securities Commission, the Tennessee Securities Division, the Texas
Securities Board and any other state or applicable regulatory authority with
respect to the issue of indemnification for securities law
violations.
The Trust
shall not bear the cost of that portion of any insurance which insures any party
against any liability the indemnification of which is herein
prohibited.
For the
purposes of this Section 18, the term “Affiliates” shall mean any person acting
on behalf of or performing services on behalf of the Trust
who: (1) directly or indirectly controls, is controlled by, or
is under common control with the Managing Owner; or (2) owns or controls
10% or more of the outstanding voting securities of the Managing Owner; or
(3) is an officer or director of the Managing Owner; or (4) if the
Managing Owner is an officer, director, partner or trustee, is any entity for
which the Managing Owner acts in any such capacity.
Advances
from the funds of the Trust to the Managing Owner or its Affiliates for legal
expenses and other costs incurred as a result of any legal action initiated
against the Managing Owner by a Unitholder are prohibited.
Advances
from the funds of the Trust to the Managing Owner or its Affiliates for legal
expenses and other costs incurred as a result of a legal action will be made
only if the following three conditions are satisfied: (1) the
legal action relates to the performance of duties or services by the Managing
Owner or its Affiliates on behalf of the Trust; (2) the legal action is
initiated by a third party who is not a Unitholder; and (3) the Managing
Owner or its Affiliates undertake to repay the advanced funds, with interest
from the initial date of such advance, to the Trust in cases in which they would
not be entitled to indemnification under the standard of liability set forth in
Section 18(a).
In no
event shall any indemnity or exculpation provided for herein be more favorable
to the Managing Owner or any Affiliate than that contemplated by the NASAA
Guidelines as in effect on the date of this Declaration and Agreement of
Trust.
In no
event shall any indemnification permitted by this subsection (b) of Section
18 be made by the Trust unless all provisions of this Section for the payment of
indemnification have been complied with in all respects. Furthermore,
it shall be a precondition of any such indemnification that the Trust receive a
determination of qualified independent legal counsel in a written opinion that
the party which seeks to be indemnified hereunder has met the applicable
standard of conduct set forth herein. Receipt of any such opinion
shall not, however, in itself, entitle any such party to indemnification unless
indemnification is otherwise proper hereunder. Any indemnification
payable by the Trust hereunder shall be made only as provided in the specific
case.
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In no
event shall any indemnification obligations of the Trust under this subsection
(b) of Section 18 subject a Unitholder to any liability in excess of the
capital contributed by such Unitholder, his or her share of undistributed
profits and assets and the amount of any distributions wrongfully distributed to
such Unitholder.
(c) Indemnification by the
Unitholders. In the event that the Trust is made a party to
any claim, dispute or litigation or otherwise incurs any loss or expense as a
result of or in connection with any activities of a Unitholder, obligations or
liabilities unrelated to the business of the Trust or as a result of or in
connection with a transfer, assignment or other disposition or an attempted
transfer, assignment or other disposition by a Unitholder or an assignee of its
Units or of any part of its right, title and interest in the capital or profits
of the Trust in violation of this Declaration and Agreement of Trust, such
Unitholder shall indemnify and reimburse the Trust for all loss and expense
incurred, including reasonable attorneys’ fees.
The
Managing Owner shall indemnify and hold the Trust harmless from all loss or
expense which the Trust may incur (including, without limitation, any indemnify
payments) as a result of the difference between the standard of liability and
indemnity under the Trading Advisory Agreement(s) and the Customer Agreement, on
the one hand, and the Managing Owner’s standards of liability as set forth
herein, on the other hand.
19. Amendments;
Meetings.
(a) Amendments with Consent of the
Managing Owner. If at any time during the term of the Trust
the Managing Owner shall deem it necessary or desirable to amend this
Declaration and Agreement of Trust, the Managing Owner may proceed to do so,
provided that such amendment shall be effective only if embodied in an
instrument approved by the Managing Owner and, pursuant to a vote called by the
Managing Owner, by the holders of Units representing a majority of the
outstanding Units. Such vote shall be taken at least 30 but not more
than 60 days after delivery by the Managing Owner to each Unitholder of record
by certified mail of notice of the proposed amendment and voting
procedures. Notwithstanding the foregoing, the Managing Owner may
amend this Declaration and Agreement of Trust without the consent of the
Unitholders in order (i) to clarify any clerical inaccuracy or ambiguity or
reconcile any inconsistency (including any inconsistency between this
Declaration and Agreement of Trust and the Prospectus), (ii) to effect the
intent of the allocations proposed herein to the maximum extent possible in the
event of a change in the Code or the interpretations thereof affecting such
allocations, (iii) to attempt to ensure that the Trust is not treated as an
association taxable as a corporation for federal income tax purposes,
(iv) to qualify or maintain the qualification of the Trust as a trust in
any jurisdiction, (v) to delete or add any provision of or to this
Declaration and Agreement of Trust required to be deleted or added by the Staff
of the Securities and Exchange Commission or any other federal agency or any
state “Blue Sky” or similar official or in order to opt to be governed by any
amendment or successor statute to the Act, (vi) to make any amendment to
this Declaration and Agreement of Trust which the Managing Owner deems
advisable, provided that such amendment is for the benefit of and not adverse to
the Unitholders or the Trustee, or that is required by law, (vii) to make
any amendment that is appropriate or necessary, in the opinion of the Managing
Owner, to prevent the Trust or the Managing Owner or its directors, officers or
controlling persons from in any manner being subjected to the provisions of the
Investment Company Act of 1940, as amended, or to avoid causing the assets of
the Trust from being considered for any purpose of ERISA or Section 4975 of the
Code to constitute assets of any “employee benefit plan,” as defined in and
subject to ERISA, or of a “plan,” as defined in and subject to Section 4975 of
the Code.
(b) Amendments and Actions without
Consent of the Managing Owner. In any vote called by the
Managing Owner or pursuant to subsection (c) of this Section 19, upon the
affirmative vote (which may be in person or by proxy) of more than 50% of the
Units then owned by Unitholders, the following actions may be taken with respect
to the Trust, irrespective of whether the Managing Owner
concurs: (i) this Declaration and Agreement of Trust may be
amended, provided, however, that approval of all Unitholders shall be required
in the case of amendments changing or altering this Section 19 or extending the
term of the Trust; in addition, reduction of the capital account of any
Unitholder or assignee or modification of the percentage of profits, losses or
distributions to which a Unitholder or an assignee is entitled hereunder shall
not be effected by any amendment or supplement to this Declaration and Agreement
of Trust without such Unitholder’s or assignee’s written consent; (ii) the
Trust may be dissolved; (iii) the Managing Owner may be removed and
replaced; (iv) a new managing owner or managing owners may be elected if
the Managing Owner withdraws from the Trust; (v) the sale of all or
substantially all of the assets of the Trust may be approved; and (vi) any
contract with the Managing Owner or any affiliate thereof may be disapproved
and, as a result, terminated upon 60 days’ notice.
(c) Meetings;
Other. Any Unitholder upon request addressed to the
Managing Owner shall be entitled to obtain from the Managing Owner, upon payment
in advance of reasonable reproduction and mailing costs, a list of the names and
addresses of record of all Unitholders and the number of Units held by each
(which shall be mailed by the Managing Owner
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to the Unitholder within ten days of the receipt of the request); provided, that the Managing Owner may require any Unitholder requesting such information to submit written confirmation that such information will not be used for commercial purposes. Upon receipt of a written proposal, signed by Unitholders owning Units representing at least 10% of all Units then owned by Unitholders, that a meeting of the Trust be called to vote upon any matter upon which the Unitholders may vote pursuant to this Declaration and Agreement of Trust, the Managing Owner shall, by written notice to each Unitholder of record sent by certified mail within 15 days after such receipt, call a meeting of the Trust. Such meeting shall be held at least 30 but not more than 60 days after the mailing of such notice, and such notice shall specify the date of, a reasonable place and time for, and the purpose of such meeting. Such notice shall establish a record date for Units entitled to vote at the meeting, which shall be not more than 15 days prior to the date established for such meeting.
The
Managing Owner may not restrict the voting rights of Unitholders as set forth
herein.
(d)
Consent by
Trustee. The Trustee’s written consent to any amendment
of this Declaration and Agreement of Trust shall be required, such consent not
to be unreasonably withheld; provided, however, that the Trustee may, in its
sole discretion, withhold its consent to any such amendment that would adversely
affect any right, duty or liability of, or immunity or indemnity in favor of,
the Trustee under this Declaration and Agreement of Trust or any of the
documents contemplated hereby to which the Trustee is a party, or would cause or
result in any conflict with or breach of any terms, conditions or provisions of,
or default under, the charter documents or by-laws of the Trustee or any
document contemplated hereby to which the Trustee is a party; provided further,
that the Trustee may not withhold consent for any action listed in subsections
19(b)(ii)-(vi). Notwithstanding anything to the contrary contained in
this Declaration and Agreement of Trust, the Trustee may immediately resign if,
in its sole discretion, the Trustee determines that the Unitholders’ actions
pursuant to subsections 19(b)(i)-(vi) would adversely affect the Trustee in any
manner.
20. Governing
Law.
The
validity and construction of this Declaration and Agreement of Trust shall be
determined and governed by the laws of the State of Delaware without regard to
principles of conflicts of law; provided, that causes of action for violations
of federal or state securities laws shall not be governed by this Section
20.
21. Miscellaneous.
(a) Notices. All
notices under this Declaration and Agreement of Trust shall be in writing and
shall be effective upon personal delivery, or if sent by first class mail,
postage prepaid, addressed to the last known address of the party to whom such
notice is to be given, upon the deposit of such notice in the United States
mails.
(b) Binding
Effect. This Declaration and Agreement of Trust shall
inure to and be binding upon all of the parties, their successors and assigns,
custodians, estates, heirs and personal representatives. For purposes
of determining the rights of any Unitholder or assignee hereunder, the Trust and
the Managing Owner may rely upon the Trust records as to who are Unitholders and
assignees, and all Unitholders and assignees agree that their rights shall be
determined and they shall be bound thereby.
(c) Captions. Captions
in no way define, limit, extend or describe the scope of this Declaration and
Agreement of Trust nor the effect of any of its provisions. Any
reference to “persons” in this Declaration and Agreement of Trust shall also be
deemed to include entities, unless the context otherwise requires.
22. Certain
Definitions.
[Reserved]
23. No
Legal Title to Trust Estate.
The
Unitholders shall not have legal title to any part of the Trust
Estate.
24. Legal
Title.
Legal
title to all the Trust Estate shall be vested in the Trust as a separate legal
entity; except where applicable law in any jurisdiction requires any part of the
Trust Estate to be vested otherwise, the Managing Owner (or the Trustee, if
required by law) may cause legal title to the Trust Estate or any portion
thereof to be held by or in the name of the Managing Owner or any other person
as nominee.
25. Creditors.
No
creditors of any Unitholders shall have any right to obtain possession of, or
otherwise exercise legal or equitable remedies with respect to, the Trust
Estate.
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IN
WITNESS WHEREOF, the undersigned have duly executed this Eighth Amended and
Restated Declaration and Agreement of Trust and Trust Agreement as of the day
and year first above written.
WILMINGTON
TRUST COMPANY
not
individually but solely as Trustee
|
By:
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇
|
|
Name:
|
▇▇▇▇▇▇ ▇. ▇▇▇▇ |
|
Title:
|
Vice
President
|
▇.▇.
▇’▇▇▇▇▇ FUND MANAGEMENT, LLC
as
Managing Owner
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
| Title: | Senior Vice President |
All
Unitholders now and hereafter admitted as Unitholders of the Trust, pursuant to
powers of attorney now and hereafter executed in favor of, and granted and
delivered to, the Managing Owner.
By: ▇.▇. ▇’▇▇▇▇▇ FUND MANAGEMENT,
LLC
as
Attorney-in-Fact
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
| Title: | Senior Vice President |