Exhibit 4.1
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
FUTURES PORTFOLIO FUND
LIMITED PARTNERSHIP
TABLE OF CONTENTS
Section Page
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1. NAME; FORMATION 1
2. OFFICE 1
3. BUSINESS 1
4. TERM; DISSOLUTION 1
(a) TERM 1
(b) DISSOLUTION 2
5. FISCAL YEAR 2
6. GENERAL PARTNER'S NET WORTH 2
7. CAPITAL CONTRIBUTIONS; OFFERING OF 2
LIMITED PARTNERSHIP INTERESTS
8. ALLOCATION OF PROFITS AND LOSSES;
ACCOUNTING; OTHER MATTERS 3
(a) PARTNERS' ACCOUNTS 3
(b) ALLOCATIONS 3
(c) ALLOCATION OF PROFIT AND LOSS 4
FOR FEDERAL INCOME TAX PURPOSES
(d) DEFINITIONS; ACCOUNTING 5
(e) EXPENSES AND LIMITATIONS 5
(f) LIMITED LIABILITY OF LIMITED PARTNERS 6
(g) RETURN OF LIMITED PARTNER'S CAPITAL CONTRIBUTION 7
(h) DISTRIBUTIONS 7
9. MANAGEMENT 7
(a) MANAGEMENT OF THE PARTNERSHIP 7
(b) TRADING DECISIONS BY THE GENERAL PARTNER 8
(c) CUSTOMER AGREEMENTS 8
(d) ADDITIONAL OBLIGATIONS AND RESPONSIBILITIES 8
OF THE GENERAL PARTNER
10. AUDITS; REPORTS TO LIMITED PARTNERS 10
11. TRANSFER; REDEMPTION OF ▇▇▇▇▇ ▇▇
(▇) ▇▇▇▇▇▇▇▇ ▇▇
(▇) ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. ADMISSION OF ADDITIONAL PARTNERS 11
13. SPECIAL POWER OF ATTORNEY 11
14. WITHDRAWAL OF PARTNERS 12
(a) WITHDRAWAL OF A GENERAL PARTNER 12
(b) WITHDRAWAL OF A LIMITED PARTNER 12
(c) REQUIRED WITHDRAWAL OF A LIMITED PARTNER 12
15. NO PERSONAL LIABILITY FOR RETURN OF CAPITAL 12
16. INDEMNIFICATION 12
(a) INDEMNIFICATION BY THE PARTNERSHIP 12
(b) INDEMNIFICATION BY PARTNERS 13
(c) SURVIVAL OF INDEMNITIES 13
17. AMENDMENTS; MEETINGS; VOTING 13
(a) AMENDMENTS INITIATED BY THE GENERAL PARTNER 13
(b) MEETINGS 14
(c) AMENDMENTS AND ACTIONS INITIATED 14
BY LIMITED PARTNERS
(d) ACTION WITHOUT MEETING 15
18. TRADING SUSPENSION 15
19. GOVERNING LAW 15
20. MISCELLANEOUS 15
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
FUTURES PORTFOLIO FUND LIMITED PARTNERSHIP
This Second Amended and Restated Limited Partnership Agreement
("Agreement") of Futures Portfolio Fund Limited Partnership (the "Fund"), made
in Rockville, Maryland as of November 1, 1995 by and between ▇▇▇▇▇▇ & Company
Inc. (the "General Partner"), and the other parties who shall execute this
Agreement, whether in counterpart, by separate instrument, or otherwise, and
hereafter shall be admitted to the Fund as limited partners in accordance with
the provisions hereof and whose names and addresses shall upon such admission
be added to the books and records of the Fund (collectively "Limited
Partners") (the General Partner and Limited Partners may be collectively
referred to herein as "Partners").
W I T N E S S E T H:
WHEREAS, the Partners have heretofore formed the Fund as a limited
partnership under the State of Maryland, U.S.A., Revised Uniform Limited
Partnership Act (the "Partnership Act"), for the purpose of investing in
commodity interests and securities pursuant to a Limited Partnership Agreement
dated May 1,1995; and
WHEREAS, the Partners desire to amend and restate the said Limited
Partnership Agreement in its entirety as set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. NAME; FORMATION.
The name of the Fund is FUTURES PORTFOLIO FUND LIMITED PARTNERSHIP or
such other name, to the extent permitted by the Partnership Act, as the
General Partner shall hereafter designate in writing to the Limited Partners.
The General Partner has heretofore executed and filed in the Office of the
Secretary of State of Maryland a Certificate of Limited Partnership of the
Fund (the "Certificate of Limited Partnership"), and shall execute, fill,
record, and publish as appropriate such amendments to this Agreement, the
Certificate of Limited Partnership, assumed name certificates, and such other
documents as shall be necessary or advisable as determined by the General
Partner. Each Limited Partner shall furnish to the General Partner a power of
attorney which may be filed with the Certificate of Limited Partnership and
any amendments thereto and such additional information as shall be required
from such Limited Partner to complete such documents and to execute and
cooperate in the filing, recording or publishing of such documents at the
request of the General Partner.
2. OFFICE
The principal office of the Fund is c/o Steben & Company, Inc., ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other place as the
General Partner may designate from time to time.
3. BUSINESS.
The Fund's business and purpose is to trade, buy, sell and otherwise
acquire, hold, dispose of, and deal in on margin or otherwise (I) obligations
of or guaranteed by any government, debt securities, certificates of deposit,
repurchase and reverse repurchase agreements, money market instruments, and
futures and forward contracts with respect to the foregoing ("securities")
(ii) commodities (including any which are now, or may hereafter be, the
subject of commodities or commodities contract trading), futures contracts,
forward contracts, options on futures contracts and physical commodities, spot
(cash) commodities, currencies, financial instruments, and any rights and
interests pertaining hereto ("commodity interests"), and (iii) securities of
and interests in entities engaged directly or indirectly in the trading,
buying, selling, or acquisition, holding, disposition of or dealing in,
securities or commodity interests (securities and commodity interests are
hereinafter sometimes referred to collectively as "securities and commodity
interests"). The objective of the Fund's business is appreciation of its
assets through the investment and speculative trading of securities and
commodity interests.
4. TERM; DISSOLUTION.
(a) TERM. The term of the Fund commenced upon the filing of the
Certificate of Limited Partnership in the Office of the Secretary of State of
Maryland, U.S.A., pursuant to the Partnership Act and shall end upon the first
to
occur of the following: (i) December 31, 2025; (ii) withdrawal, insolvency,
bankruptcy, dissolution, termination, retirement, death or legal incapacity of
the General Partner (unless the Limited Partners shall elect a successor
general partner pursuant to Section 17(c)); (iii) the Partners terminate and
dissolve the Fund pursuant to Section 17; (iv) a decline In the Net Asset
Value of a Unit of Limited Partnership interest as of the end of any month to
or below $350; or (v) the occurrence of any event which shall make it unlawful
for the existence of the Fund to be continued.
(b) DISSOLUTION. Upon the occurrence of an event causing the termination
of the Fund, the Fund shall terminate and be dissolved. Dissolution, payment
of creditors, and distribution of the Fund's assets shall be effected as soon
as practicable in accordance with the Partnership Act, except that the General
Partner and each Limited Partner shall share in the assets of the Fund pro
rata in accordance with such Partner's respective capital account, less any
amount owing by such Partner to the Fund.
5. FISCAL YEAR.
The fiscal year of the Fund shall begin on January 1 of each year and end
on the following December 31.
6. GENERAL PARTNER'S NET WORTH.
The General Partner agrees that at all times, as long as it remains
General Partner of the Fund, it will use its best efforts to maintain its Net
Worth equal to at least the minimum required pursuant to "safe harbor"
guidelines published by the U.S. Internal Revenue Service so as to ensure that
the Fund is classified as a partnership, and not an association taxable as a
corporation, for U.S. federal income tax purposes. Notes and accounts
receivable from and payable to any partnership in which the General Partner
has an interest, interests owned by the General Partner in any other
partnership, secured and unsecured notes of creditworthy obligers (including
notes receivable from the General Partner's "affiliates," as such term is
defined In Regulation S-X of the rules and regulations of the Securities and
Exchange Commission (the "SEC"), and letters of credit shall be included as
assets in calculating Net Worth, and liabilities subordinated to the claims of
general creditors shall be included in calculating Net Worth.
The General Partner may maintain its Net Worth at less than the amount
required by the preceding paragraph of this Section 6 so long as the General
Partner obtains an opinion of counsel that such proposed modification will not
adversely affect the classification of the Fund as a partnership for federal
income tax purposes and will not adversely affect the status of the Limited
Partners as limited partners under the Partnership Act.
7. CAPITAL CONTRIBUTIONS; OFFERING OF UNITS OF LIMITED PARTNERSHIP INTEREST.
At all times, the net asset value of a Unit of General Partnership
Interest shall be equivalent to the Net Asset Value (as defined in Section
8(d)(2)) of a Unit of Class A Limited Partnership Interest. Except as shall be
provided in this paragraph, the General Partner shall not be required to make
any capital contribution to the Fund. Upon determination and dissolution of
the Fund, the General Partner shall contribute to the Fund the lesser of (I)
any deficit balance in its capital account in the Fund or (ii) the excess of
1.01% of the total capital contributions of the Limited Partners over any
capital previously contributed to the Fund by the General Partner. However, if
the General Partner is advised by legal counsel that, in view of the nature of
the services rendered by the General Partner to the Fund, the General Partner
must maintain a capital account balance in the Fund in order for the Fund to
be treated, for federal income tax purposes, as a partnership and not as an
association taxable as a corporation, the General Partner shall, in lieu of
making the above-described contribution, maintain a capital account balance in
the Fund equal to at least 1% of the total capital account balances of all
Partners. If the General Partner maintains such a capital account balance, the
1% allocation specified in Section 8(b) shall not be made.
Interests in the Fund, other than the general partnership interest of the
General Partner, shall be evidenced by Units of Limited Partnership Interest
of the Fund ("Units"). Units may be divided into classes: Class A; Class B;
etc. Class A Units were offered pursuant to the initial offering of Units;
Class B and succeeding classes of Units may be offered at the discretion of
the General Partner. The relative rights and obligations of each class of
Units shall be determined by the General Partner in its sole discretion;
provided, however, that no class of Units shall dilute the capital accounts of
existing Limited Partners.
Units shall be offered for sale pursuant to the Fund's Confidential
Private Offering Memorandum, as amended or supplemented from time to time (the
"Memorandum"). The General Partner on behalf of the Fund shall issue Units to
persons desiring to become Limited Partners, provided that such persons are
determined by the General Partner to be qualified investors and provided their
subscriptions for Units are accepted by the General Partner, which acceptance
the General Partner may withhold in its sole discretion. The minimum
subscription for Units shall be such amount as the
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General Partner may determine from time to time in its sole discretion.
Capital contributions to the Fund shall be made upon execution and
acknowledgment of instruments in form and substance satisfactory to the
General Partner.
The Fund may at any time and from time to time in the sole discretion of
the General Partner offer for sale Units and fractions of Units in such
offerings, at such prices per Unit, in such minimum amounts, for such periods
of time, and on such terms and conditions as the General Partner shall
determine in its sole discretion. The General Partner shall have the right to
admit additional Limited Partners under terms and conditions as shall be in
the sole discretion of the General Partner.
In connection with the Fund's offering of Units as described above and in
the Memorandum, the General Partner, on behalf of the Fund, shall take such
action as it in its sole discretion shall deem advisable or necessary.
All Units subscribed for upon receipt of a check, draft, or other
instrument of a subscriber shall be issued subject to the collection of the
funds represented by such check or draft. In the event that an instrument or a
subscriber for Units representing payment for Units shall be returned unpaid,
the General Partner shall cancel the Units issued to such subscriber
represented by such instrument and, if necessary, shall file an amendment to
the Certificate of Limited Partnership reflecting such cancellation. Any
losses or profits sustained by the Fund in connection with the Fund's business
allocable to such canceled Units shall be deemed an increase or decease in Net
Assets and allocated among the remaining Partners as described in Section 8.
Each Limited Partner agrees to reimburse the Fund for any expense or loss
(including any trading loss) incurred in connection with the issuance and
cancellation of any Units issued to such Partner.
Capital contributions to the Fund shall he made upon execution,
acknowledgment, and delivery of documents in form and substance satisfactory
to the General Partner. No additional contributions of capital shall be
required of any Limited Partner during the term of the Fund. The aggregate of
all capital contributions shall be available to the Fund to carry on its
business and no interest shall be paid by the Fund on any such contributions.
8. ALLOCATION OF PROFITS AND LOSSES; ACCOUNTING; OTHER MATTERS.
(a) PARTNERS' ACCOUNTS. A Capital Account shall be maintained for each
Partner in accordance with the provisions of Section 704(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), as interpreted by
regulations promulgated by the United States Department of the Treasury,
specifically, if valid, paragraph (b)(2)(iv) of Treasury Regulation
Section 1.704-1, 26 C.F.A., Section 1.704-1(b)(2)(iv). The initial
balance of each Partner's Capital Account shall be the amount of his
initial capital contribution to the Fund.
(b) MONTHLY ALLOCATIONS. As of the close of business (as determined by
the General Partner) on the last day of each month during each fiscal
year of the Fund, the following determinations and allocations shall be
made:
(1) The Fund's Net Assets (as defined in Section 8(d)(1), but before
(I) any accrued expenses of the Fund, including, but not limited to,
legal, accounting, auditing and other expenses, (ii) any management
fee payable to the General Partner, and (iii) any management or
incentive fees payable to any trading advisor or advisors or selling
agents) shall be determined.
(2) The Fund's accrued expenses shall then be charged against Net
Assets allocated to that class or classes of Units to which such
expenses are attributable.
(3) Accrued management fees payable to the General Partner shall
then be charged against Net Assets allocated to that class or
classes of Units to which such fees are attributable.
(4) Accrued management and incentive fees, if any, payable to any
trading advisor or advisors or selling agents shall then be charged
against Net Assets allocated to that class or classes of Units to
which such fees are attributable.
(5) Any increase or decrease in Net Assets as compared to the next
previous determination of Net Assets shall then be credited or
charged, as the case may be, to each class of Units in the ratio
that the balance of each class bears to the balance of all classes
(and within each class to the Capital Accounts of each Partner in
the ratio that the balance of each Account bears to the balance of
all Accounts within that class) (except as shall be otherwise
provided pursuant to the terms of the issuance of any class or
classes of Units), except that 1% of any increase or decrease in the
Partnership's Net Assets shall be allocated to the General Partner
(unless the General Partner maintains the capital account balance
specified in Section 7).
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(6) The amount of any distribution to a Partner, any amount paid to
a Partner on redemption of Units, and any amount paid to the General
Partner upon withdrawal of its interest in the Fund, shall then be
charged to that Partner's Capital Account,
(c) ALLOCATION OF PROFIT AND LOSS FOR FEDERAL INCOME TAX PURPOSES. As of
the end of each fiscal year, the Fund's realized profit or loss shall be
allocated among the Partners pursuant to the following subparagraphs for
federal income tax purposes. Such allocations of profit and loss shall be pro
forma from long-term capital gain and loss, short-term capital gain and loss,
Section 1256 gain and loss, and ordinary gain and loss realized by the Fund,
as those terms are defined in the Code.
(1) Net realized profit or loss from the Fund's activities shall be
allocated as follows:
(aa) For the purpose of allocating the Fund's net realized
profit or loss among the Partners, there shall be established
an allocation account with respect to each outstanding Unit.
The initial balance of each allocation account shall be the
amount paid to the Fund for the Unit. Allocation accounts shall
be adjusted as of the end of each fiscal year as follows:
(i) Except with respect to the 1% allocation to the
General Partner pursuant to Section 8(b)(5), each
allocation account shall be increased by the amount of
income allocated to the holder of the Unit pursuant to
subparagraph (cc) below.
(ii) Except with respect to the 1% allocation to the
General Partner pursuant to Section 8(b)(5), each
allocation account shall be decreased by the amount of
expense or loss allocated to the holder of the Unit
pursuant to subparagraph (ee) below and by the amount of
any distribution the holder of the Unit has received with
respect to the Unit (other than on redemption of Units).
(iii) The allocation account with respect to a redeemed
Unit shall be eliminated.
(bb) Net realized profit shall be allocated first to each
Partner who has redeemed a Unit during the fiscal year up to
the excess, if any, of the amount received upon redemption of
the Unit over the allocation account as of the date of
redemption attributable to the redeemed Unit.
(cc) Net realized profit remaining after the allocation thereof
pursuant to subparagraph (bb) above shall be allocated next
among all Partners whose capital accounts are in excess of the
Units' allocation accounts (after the adjustments in
subparagraph (bb) above) in the ratio that each such Partners
excess bears to all such Partners' excesses. In the event that
profit to be allocated pursuant to this subparagraph (cc) is
greater than the excess of all such Partners' capital accounts
over all such allocation accounts, the excess shall be
allocated among all Partners in the ratio that each Partner's
capital account bears to all Partners' capital accounts.
(dd) Net realized loss shall be allocated first to each Partner
who has redeemed a Unit during the fiscal year up to the
excess, if any, of the allocation account as of the date of
redemption attributable to the redeemed Unit over the amount
received upon redemption of the Unit.
(ee) Net realized loss remaining after the allocation thereof
pursuant to subparagraph (dd) above shall be allocated next
among all Partners whose Units' allocation accounts are in
excess of their capital accounts (after the adjustments in
subparagraph (dd) above) in the ratio that each such Partner's
excess bears to all such Partners' excesses. In the event that
loss to be allocated pursuant to this subparagraph (ee) is
greater than the excess of all such allocation accounts over
all such Partners' capital accounts, the excess loss shall be
allocated among all Partners in the ratio that each Partner's
capital account bears to all Partners' capital accounts.
(2) The tax allocations prescribed by this Section 8 shall be made
to each holder of a Unit, whether or not the holder is a substituted
Limited Partner. In the event that a Unit has been assigned, the
allocations prescribed by this Section 8(c) 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(c) shall be divided between the assignor and the assignee based on
the number of months each held the assigned
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Unit. For purposes of this Section 8(c), tax allocations shall be
made to the General Partner's Units of General Partnership Interest
on a Unit-equivalent basis.
(3) The allocation of profit and loss for federal income tax
purposes set forth herein is intended to allocate taxable profit and
loss among Partners generally in the ratio and to the extent that
net profit and net loss are allocated to such Partners under Section
8(b) hereof so as to eliminate, to the extent possible, any
disparity between a Partner's capital account and his allocation
account, consistent with the principles set forth in Section 704 of
the Code.
(4) For purposes of this Section 8(c), "net realized profit" and
"net realized loss" means net income and net loss "recognized" for
federal income tax purposes under the Code.
(d) DEFINITIONS; ACCOUNTING.
(1) NET ASSETS. The Fund's "Net Assets" shall mean the total assets
of the Fund, including all cash and cash equivalents (valued at
cost), accrued interest and the market value of all open positions
and all other assets of the Fund, less: (a) the brokerage and floor
commissions and fees and other transaction costs that would be
payable with respect to the closing of each open securities and
commodity interest position; and (b) all accrued but unpaid expenses
and all other liabilities of the Fund, including, but not limited
to, organizational expenses, any management or incentive fees
accrued or payable to the General Partner or to any trading advisor
or advisors, and any expenses, determined in accordance with the
principles specified in this Section 8(d)(l) or, where no principle
is specified, in accordance with U.S. generally accepted accounting
principles consistently applied under the accrual basis of
accounting. The market value of a security traded on an exchange
shall be its closing price or, if applicable, the average of its
closing bid and asked prices on the date of determination. If the
exchange on which a security is required to be valued is closed, or
if a security is not traded on such an exchange, or if a security
did not trade on such exchange on the date of determination, such
security shall be valued as if the date of determination were the
last previous date on which such exchange was open, or on which such
security traded on such exchange. For this purpose an "exchange"
shall mean the consolidated exchange. In the absence of a readily
ascertainable closing price or bid and asked price, the market value
of a security shall mean its market value as determined by the
General Partner on a basis consistently applied. The market value of
a commodity interest traded on a commodity exchange shall mean the
settlement price on the commodity exchange on which the particular
commodity interest is traded by the Fund on the close of the day
with respect to which Net Assets are being determined; provided that
if a commodity interest could not be liquidated on such day due to
the operation of daily limits or other rules of the commodity
exchange upon which that contract is traded or other otherwise, the
settlement price on the first subsequent day on which the contract
could be liquidated shall be the market value of such contract for
such day. The market value of a forward contract, currency contract
or futures contract traded on a foreign exchange shall mean its
market value as determined by the General Partner on a basis
consistently applied. If the General Partner determines that the
valuation of any security or other property does not fully represent
market value (whether because of arbitrage activity or otherwise),
the General Partner shall value such security or other property as
it reasonably determines and shall set forth the basis of such
valuation in writing in the Fund's records. All values assigned to
securities and other assets by the General Partner pursuant to this
paragraph shall be final and conclusive as to all of the Partners.
(2) NET ASSET VALUE. The "Net Asset Value" of a Unit shall mean the
Net Assets allocated to Capital Accounts represented by Units of
that class of Limited Partnership Interest divided by the number of
Units of such class outstanding on the date of calculation. The "Net
Asset Value" of a class of Units of Limited Partnership Interest
shall be determined by reference to the ratio that the aggregate
Capital Accounts of such class as of the beginning of the month
bears to the aggregate of all Capital Accounts of the Partners as of
such date.
(e) EXPENSES AND LIMITATIONS. The General Partner previously paid all of
the organizational and initial offering expenses of the Fund. The General
Partner shall be compensated for such payment by receipt of a one percent
(1%) organization and offering charge for new investments in the Fund,
unless the General Partner shall elect to waive the charge, in whole or
in part or in respect to any Partner or class of Units.
The Fund shall pay all of its expenses, including expenses for
services provided by the General Partner and its affiliates and by third
parties selected by the General Partner. Such expenses shall include
ordinary and extraordinary legal, accounting, auditing, record keeping,
administration, computer, and clerical expenses (including expenses
incurred in preparing reports and tax information to Limited Partners and
regulatory
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authorities and expenses for specialized administrative services),
printing and duplication expenses, mailing expenses, costs or researching
and performing due diligence on advisors for the Fund (including travel
expenses related to such research and due diligence), the expenses of the
continuing offering of Units (including Blue Sky fees and solicitation
and marketing expenses), and filing fees; provided, however, that the
General Partner shall be obligated to pay the Fund at the end of each
calendar year an amount equal to any ordinary (but not extraordinary)
expenses paid or accrued by the Fund to the extent that such ordinary
expenses exceed one percent (1%) per annum (or a pro rata portion in
respect of partial years calculated by dividing the actual days of
operation of the Fund by the actual number of days in such year) of the
average month-end Net Assets of the Fund.
As compensation for the General Partner's management of the Fund (as
described in Section 9(a)), in the discretion of the General Partner, the
Class A Limited Partners shall pay the General Partner a monthly
management fee, without regard to the profitability of the Fund, equal to
a maximum of 1/6 of 1% of the Net Asset Value of the Class A Limited
Partnership Interests (as defined in Section 8(d)(2)) as of the last day
of each month (2% per annum), and the other classes of Limited Partners
shall pay the General Partner such monthly management fee(s) as shall be
determined by the General Partner in its sole discretion. The management
fee payable to the General Partner shall be paid by the Fund promptly
after the end of the applicable month. Upon notice to the affected
Limited Partners, the General Partner, in its sole discretion, may
increase the management fee payable to the General Partner hereunder or
provide for any additional compensation to be payable to the General
Partner, whether by management fee, incentive fee, brokerage commission
or otherwise.
As compensation for the sales efforts of the Fund's selling agents
(as such term is defined in the Memorandum) and the General Partner, in
the discretion of the General Partner, the Limited Partners shall pay to
the General Partner a monthly sales fee, without regard to the
profitability of the Fund, equal to a maximum of 1/6 of 1% of the Net
Asset Value of the Class A Limited Partnership Interests (as defined in
Section 8(d)(2)) as of the last day of each month (2% per annum), and the
other classes of Limited Partners shall pay the General Partner such
monthly sales fee as shall be determined by the General Partner in its
sole discretion. The sales fee payable to the General Partner shall be
paid by the Fund promptly after the end of the applicable month. The
General Partner shall pay all or any portion of such sales fee to the
selling agents as the General Partner shall negotiate with the selling
agents, and shall retain the excess, if any.
The Fund also shall pay any taxes and all expenses incurred in
connection with its trading and investment activities. Such expenses
shall include but not be limited to all margins, option premiums,
brokerage, floor, exchange, and clearinghouse commissions and fees, NFA
fees, other transaction costs and expenses, management fees, incentive
fees, transmission costs, and related expenses. The Fund also may incur
extraordinary expenses. There shall be no limitation on the amount of the
expenses described in this fifth paragraph of Section 8(e) which shall be
payable by the Fund.
If the Fund shall be deemed to be an entity separately subject to
federal, state, local, or foreign income tax (whether or not such tax
shall be payable or shall have been paid by the Fund or the General
Partner, although the General Partner shall not he obligated to do so),
each Limited Partner shall be liable for and shall pay to the Fund or the
General Partner any income taxes due and payable or paid to such
jurisdiction, within ten days after the General Partner's request
therefor, in an amount equal to the ratio by which the Net Asset Value of
the Limited Partnership Interest(s) held by each Limited Partner shall
bear to the Net Asset Value of Limited Partnership Interests held by all
Limited Partners as of the close of business (as determined by the
General Partner) on the last day or the period for which such tax shall
have been assessed. Alternatively, if the Fund and/or the General Partner
shall have paid any such tat out of its/their own funds (although the
General Partner shall not be obligated to do so), upon a distribution of
funds to a Limited Partner or a redemption of Units by a Limited Partner,
all amounts of such taxes may be deducted from the proceeds of such
distribution or redemption and reimbursed to the Fund and/or the General
Partner.
The General Partner shall deposit in a separate trading account with
one or more registered broker-dealers (which is a member of the National
Association of Securities Dealers, Inc) and/or registered futures
commission merchants and/or foreign exchange brokers or dealers, as
broker(s), such portion of the Fund's assets which the General Partner
shall determine from time to time and shall maintain the balance in
interest-bearing accounts to the maximum extent practicable. All interest
earned on such assets shall be paid to the Fund. 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 General Partner.
(f) LIMITED LIABILITY OF LIMITED PARTNERS. Each Unit, when issued to a
Limited Partner, shall
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be fully paid and non-assessable. A Limited Partner's capital
contribution shall be subject to the risks of the Fund's business.
However, except as provided below, the General Partner shall be liable
for all debts, losses, and other obligations of the Fund to the extent
that the Fund's assets (which shall include amounts contributed by
Limited Partners and paid out in distributions, redemptions, or otherwise
to them, but shall not include any right of contribution from the General
Partner except to the extent previously made by it in accordance with
this Agreement) shall be insufficient to discharge such debts, losses,
and other obligations.
No Limited Partner shall be liable for the Fund's debts, losses, or
other obligations in excess of his unredeemed capital contribution and
undistributed profits if any; provided, however, that if the Fund shall
be unable to pay its debts, losses, and other obligations, a Limited
Partner may be required to repay to the Fund amounts which shall have
been paid to him in compliance with the Partnership Act and this
Agreement and amounts which shall have been paid to him in violation of
the Partnership Act or this Agreement by way of redemption, distribution,
or otherwise together with interest thereon, which shall represent a
return of capital and which shall be necessary to discharge the Fund's
liability to creditors who shall have extended credit to the Fund during
the period the capital contribution shall have been held by the Fund. The
Fund shall make a claim against a Limited Partner with respect to amounts
of his capital distributed to him, received by him upon redemption of
Units, or otherwise paid to him in compliance with the Partnership Act
and this Agreement to the extent provided by applicable law and only if
the assets of the Fund (which shall include amounts contributed by
Limited Partners and paid out in distributions, redemptions, or otherwise
to them, but shall not include any right of contribution from the General
Partner except to the extent previously made by it in accordance with
this Agreement) shall be insufficient to discharge the liabilities of the
Fund which shall have arisen prior to the payment of such amounts. The
Fund shall make a claim against a Limited Partner with respect to amounts
of his capital distributed to him, received by him upon redemption of
Unit(s), or otherwise paid to him in violation of the Partnership Act or
this Agreement only as provided by applicable law.
In addition to the foregoing, Limited Partners may incur liability,
for which there shall be no limitation thereon (i) if the subscription
documentation delivered by a Limited Partner in connection with his
purchase of Units shall contain any misstatements, and (ii) if a Limited
Partner's check, draft, or other instrument representing payment for his
Units shall be returned unpaid and such Partner's Units shall be canceled
by the Fund and losses or expenses shall be incurred as a result thereof
as provided in Section 7.
(g) RETURN OF LIMITED PARTNER'S CAPITAL CONTRIBUTION. Except to the
extent that a Limited Partner shall have the right to withdraw capital
through redemption of Units in accordance with the terms of this
Agreement, no Limited Partner shall have any right to demand the return
of such Limited Partner's capital contribution or any profits added
thereto except, to the extent available, upon dissolution and termination
of the Fund. In no event shall a Limited Partner be entitled to demand or
receive property other than cash. No Partner shall have the right to
bring an action for partition against the Fund.
(h) DISTRIBUTIONS. The General Partner shall have sole discretion in
determining what distributions (other than on redemption of Units), if
any, the Fund will make to its Partners; provided, however, that no
Partner shall receive a distribution to the extent that, after giving
effect to the distribution, all liabilities of the Fund (other than
liabilities to Partners on account of their Fund interests) shall exceed
the fair market value of the Fund's assets. All distributions shall be
pro rata within each class of Units in accordance with the respective
Capital Accounts of the Partners, but may be non-pro rata as among
classes of Units.
If, pursuant to applicable law, the Fund shall have been required to
pay or withhold tax on certain income of the Fund allocable to a Limited
Partner and the Fund and/or the General Partner shall have paid out of
its/their own funds such tax in accordance with Sections 8(e) or 9(f)
(although the General Partner shall not be obligated to do so), upon a
distribution to such Limited Partner all amounts of such taxes may be
deducted from the amount of such distribution and reimbursed to the Fund
and/or the General Partner.
9. MANAGEMENT.
(a) MANAGEMENT OF THE FUND. Except as may be otherwise specifically
provided herein, the General Partner, to the exclusion of all Limited
Partners, shall conduct and manage the business of the Fund, including,
without limitation, the investment of the funds of the Fund. No Limited
Partner shall have the power to transact any business for, represent, act
for, sign for, or bind the General Partner or the Fund. Except as may be
specifically provided otherwise in this Agreement, no Partner, in his
capacity as such, shall be entitled to any salary, draw, or other
compensation from the Fund. Each Limited Partner hereby undertakes to
furnish to the General Partner such additional information as may be
determined by the General Partner to be required or appropriate for the
Fund to open and maintain an account or accounts with securities and
commodity interest
7
brokerage firms for the purpose of investing in or trading securities and
commodity interests.
In addition to and not in limitation of any rights and powers
conferred by law or provisions of this Agreement, and except as limited,
restricted, or prohibited by the express provisions of this Agreement,
the General Partner shall have and may exercise, for and on behalf of the
Fund and all Limited Partners, all powers and rights necessary, proper,
convenient, and advisable to effectuate and carry out the purposes,
business, and objectives of the Fund and shall have and possess the same
rights and powers as any general partner in a partnership without limited
partners formed under the laws of the State of Maryland, U.S.A.
(b) APPOINTMENT OF TRADING ADVISORS. The General Partner shall have
complete discretion, at any time and from time to time, to allocate all
or any portion of the Fund's Net Assets to the management, directly or
indirectly (by means of managed accounts, pool investments, or
otherwise), of one or more trading advisors and to reserve the right to
withdraw Net Assets, in whole or in part, from such trading advisors. The
General Partner shall have complete discretion, at any time and from time
to time, to leverage the trading of any one or more such trading
advisors, through "notional" funding or borrowing of funds or otherwise.
Such trading advisor(s) shall make trading decisions in respect of such
portion of the Fund's Net Assets allocated to such advisor(s), directly
or indirectly, by the General Partner and shall have complete trading
discretion for such Net Assets; provided, however, that the General
Partner may override any trading instructions which the General Partner,
in its discretion, determines to be in violation of any of the Fund's
trading policies then in effect or as and to the extent necessary or
appropriate to ensure compliance with applicable rules and regulations
(including the "plan asset" regulations promulgated under the Employee
Retirement Income Security Act of 1974, as amended) or as and to the
extent necessary to fund distributions or redemptions, to pay the Fund's
expenses, or to effect the allocation or reallocation of the Fund's Net
Assets among the trading advisors for the Fund; and provided, further,
that the General Partner may make trading decisions at any time at which
a trading advisor for the Fund shall become incapacitated or some other
emergency shall arise as a result of which such trading advisor shall be
unable or unwilling to act and the General Partner shall not have
retained a successor trading advisor.
The General Partner shall negotiate and, on behalf of the Fund,
enter into a management agreement with each trading advisor or a
subscription agreement and limited partnership agreement with any
investment pool managed or advised by each trading advisor, including
affiliates of the General Partner, upon such terms and conditions as the
General Partner, in its sole discretion, shall deem to be in the best
interests of the Fund and providing for such form and amount of
compensation to the trading advisor and/or the investment pool and its
general partner(s), selling agents and others, whether or not affiliated
with the General Partner, as the General Partner shall determine.
(c) CUSTOMER AGREEMENTS. The General Partner is hereby authorized on
behalf of the Fund to enter into one or more customer agreements with
securities broker-dealer or -dealers and commodity interest broker or
brokers and/or introducing broker or brokers and/or foreign exchange
broker/dealer or brokers/dealers, which broker/dealer or brokers/dealers
may, in the sole discretion of the General Partner, be affiliated with
the General Partner, and to pay brokerage commissions, markups and fees
to such broker(s)/dealer(s) at such rates as may be mutuaIIy agreed
between the General Partner and such broker(s)/dealer(s).
(d) ADDITIONAL OBLIGATIONS AND RESPONSIBILITIES OF THE GENERAL PARTNER.
The General Partner may take such other actions as it deems necessary or
desirable to manage the business of the Fund, including but not limited
to entering into, executing, and maintaining contracts, agreements and
any and all other instruments and doing and performing all such things as
shall be in furtherance of the Fund's purposes or necessary or
appropriate for the conduct of the Fund's activities, opening and
maintaining bank accounts and depositing into, signing checks, and/or
otherwise drawing upon such accounts on behalf of the Fund, depositing,
withdrawing, paying, retaining, and distributing the Fund's assets in any
manner consistent with the provisions of this Agreement, investing and
directing the investment and reinvestment of assets of the Fund for
management, and authorizing the payment of distributions to Partners and
expenses of the Fund. The General Partner shall be responsible for
preparing and filing in a timely manner all reports, filings, and
registrations required from time to time by applicable regulatory bodies,
exchanges, or boards having appropriate jurisdiction.
The General Partner shall keep at the principal office of the Fund
such books and records relating to the business of the Fund as it in its
sole discretion deems necessary or advisable or as are required by the
Commodity Exchange Act, as amended (the "Commodity Act"), and the
regulations thereunder. To the extent required by SEC and/or CFTC
regulations, such books and records shall be available to Limited
Partners or their authorized attorneys or agents for inspection and
copying during normal business hours of the Fund and, upon
8
request, copies shall be sent to any Limited Partner upon (i) payment by
such Partner of reasonable reproduction and distribution costs and (ii)
receipt by the General Partner of a signed agreement from such Partner
(in form and substance satisfactory to the General Partner) (a) to hold
such information in confidence and to not disclose such information to
any other person and (b) to use the information contained in such books
and records only for Fund business. A Limited Partner must give the
General Partner at least ten business days' prior written notice for such
inspection and copying by the Limited Partner or his authorized attorney.
Any Subscription Agreement and Power of Attorney executed by a Limited
Partner in connection with his purchase of Units shall be retained by the
Fund for such period as is required by law.
No person dealing with the General Partner shall be required to
determine its authority to make any undertaking on behalf of the Fund,
nor to determine any fact or circumstance bearing upon the existence of
its authority.
The General Partner and its affiliates and its and their officers,
directors, principals, and employees shall not be liable, responsible, or
accountable in damages or otherwise to the Fund or to any or the
Partners, or their respective successors or assigns, except by reason of
acts of, or omissions due to, willful malfeasance or gross negligence and
for not having acted in good faith in the reasonable belief that such
person's actions were in. or not opposed to, the best interests of the
Fund.
The General Partner shall devote such time to the Fund's affairs as
shall be required to effectively manage the business and affairs of the
Fund. Subject to the limitations in Section 9(b), the General Partner may
engage in other business or advisory activities and shall not be required
to refrain from any other activity or disgorge any profits from any such
activity, whether as general partner or as trading advisor or both, of
additional partnerships or other entities for investment in securities
and/or commodity interests or otherwise, and shall not be required to
disclose its trading records or those of its affiliates to Limited
Partners. The General Partner may engage and compensate, on behalf of the
Fund and from Fund funds, such persons, firms, or corporations, including
any person or entity affiliated with the General Partner or any other
person or entity, as the General Partner in its sole judgment shall deem
advisable for the conduct and operation of the business of the Fund. Such
an entity may be an affiliate of the General Partner to whom it has
delegated, with supervision, certain functions which it is obligated to
perform for the Fund. The General Partner may contract with any person or
legally qualified entity to sell Units.
The General Partner shall make any and all elections on behalf of
the Fund under the Code and any other applicable federal, state, local,
or foreign tax law as the General Partner shall determine to be in the
best interests of the Fund. The General Partner 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 Lax returns which shall be required
to be filed by the Fund. The General Partner shall cause the Fund to pay
any taxes payable by the Fund; provided, however, that the General
Partner shall not be required to cause the Fund to pay any tax so long as
the General Partner or the Fund shall in good faith and by appropriate
legal proceedings be contesting the validity, applicability, or amount
thereof and such contest shall not materially endanger any right or
interest of the Fund.
The General Partner is hereby authorized to perform all other duties
imposed by Sections 6221 through 6232 of the Code on the General Partner
as "tax matters partner" of the Fund.
The General Partner in its sole discretion may make or refrain from
making the election contemplated by Section 754 of the Code on behalf of
the Fund and determine how to classify items of income, gain, expense or
profit for federal or state income tax purposes on the Fund's tax returns
and the Forms K-1 (or any successor form) transmitted to the Limited
Partners.
Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Fund to comply with any withholding
requirements established under the Code or any other federal, state or
local law including, without limitation, pursuant to Sections 1441, 1442,
1445 and 1446 of the Code. To the extent that the Fund is required to
withhold and pay over to any taxing authority any amount resulting from
the allocation or distribution of income to the Partner or assignee
(including by reason of Section 1446 of the Code), the amount withheld
shall be treated as a distribution of cash in the amount of such
withholding to such Partner.
The General Partner shall prosecute, defend, settle, or compromise
actions or claims at law or in equity at the Fund's expense as the
General Partner may deem appropriate.
Whenever in this Agreement or any other agreement contemplated
herein, the General Partner is
9
permitted or required to make a decision in its "sole discretion"' or
"discretion" or "judgment" or under a grant of similar authority or
latitude, the General Partner shall be entitled to consider only such
interests and factors as it desires and shall have no duty or obligation
to give any consideration to any interest of or factors affecting the
Fund, the Limited Partners or any assignees thereof. Each Limited Partner
and any permitted assignee hereby agrees that any standard of care or
duty imposed in this Agreement or any other agreement contemplated herein
or under the Partnership Act or any other applicable law shall be
modified, waived or limited in each case as required to permit the
General Partner to act under this Agreement or any other agreement
contemplated herein and to make any decision pursuant to the authority
prescribed in this Section 9(e).
10. AUDITS; REPORTS TO LIMITED PARTNERS.
The Fund's books shall be audited annually by an independent
certified public accountant selected by the General Partner. The Fund
shall use its best efforts to cause each Partner to receive: (a) within
90 days after the close of each fiscal year an annual report containing
audited financial statements (including a statement of income and a
statement of financial condition) of the Fund for the fiscal year then
ended, prepared in accordance with generally accepted accounting
principles and accompanied by a report of the independent certified
public accountant which audited such statement, and such other
information as the CFTC, SEC, or NFA from time to time may require; and
(b) within 90 days after the close of each fiscal year such tax
information relating to the Fund as is necessary for such Partner to
complete such Partner's federal income tax return. In addition, the
General Partner shall report or cause to be reported to the Limited
Partners such financial and other information with respect to the Fund as
the CFTC, SEC, or NFA by regulation from time to time may require in
periodic reports. Moreover, if any of the following events occurs, notice
of such event shall be mailed to each Limited Partner within 21 business
days after the occurrence of the event: (i) any change in trading
advisors; (ii) any change in brokers; (iii) any change in general
partners: (iv) any change in the Fund's fiscal year; or (v) any material
change in the Fund's trading policies. As used herein, "material change
in the Fund's trading policies" shall not include changes in securities
or commodity interests traded or modifications of, additions to, or
deletions from any trading advisor's trading methods or strategies.
11. TRANSFER; REDEMPTION OF UNITS.
(a) TRANSFER. Each Limited Partner expressly agrees that he will not
assign, transfer, pledge, encumber or dispose of, by gift or otherwise,
any of his Units or any part or all of his right, title and interest in
the capital or profits of the Partnership without giving prior written
notice of the assignment, transfer, pledge, encumbrance or disposition to
the General Partner and that no assignment, transfer, pledge, encumbrance
or disposition shall be effective against the Partnership or the General
Partner until (I) at least 30 days after the General Partner receives the
written notice described below and (ii) has consented in writing to the
assignment, transfer, pledge, encumbrance or disposition, which consent
the General Partner may withhold in its sole discretion. If such
assignment, transfer, pledge, encumbrance or disposition occurs by reason
of the death of a Limited Partner or assignee, such written notice may be
given by the duly authorized representative of the estate of the Limited
Partner or assignee and shall be supported by such proof of legal
authority and valid assignment as may reasonably be requested by the
General Partner and the General Partner shall consent thereto.
A transferee, pledgee, assignee, or secured creditor shall become a
substituted Limited Partner only if the General Partner first consents to
such substitution in writing, which consent the General Partner may
withhold in its sole discretion.
(b) REDEMPTION. The Partners recognize that the profitability of the Fund
depends upon long-term and uninterrupted investment of capital. It is
agreed, therefore, that Fund profits may be automatically reinvested and
that distributions of capital and profits if any to the Partners shall be
on a limited basis, if at all. Nevertheless, the Partners contemplate the
possibility that one or more of the Limited Partners may elect to realize
and withdraw any profits or may desire to withdraw capital prior to the
termination or dissolution of the Fund. Except as shall be provided
otherwise below, a Limited Partner may withdraw, effective as of the
close of business on the last business day of any month, all or part of
such Partner's unredeemed capital contribution and undistributed profits,
if any, by requiring the Fund to redeem all or part of such Partner's
Units at the Net Asset Value thereof, reduced as hereinafter described
(such withdrawal being herein referred to as "Redemption"); provided,
however, that the Redemption amount must be at least $1,000; and
provided, further, that a Limited Partner may not make a partial
Redemption of Units which would reduce the Net Asset Value of such
Partner's unredeemed Units as of the effective date of Redemption to less
than the amount of the minimum investment then required of new Limited
Partners by the Fund or such Partner's initial investment, whichever is
lesser, and any request for partial redemption will be honored (to the
nearest whole Unit) only to the extent
10
it complies with such limitation. Notwithstanding the foregoing, the
General Partner may, in its sole discretion, expressly waive either of
the foregoing provisos, in whole or in part.
Redemption shall be effective as of the last business day of the
first month ending after a Request for Redemption in proper form has been
received by the General Partner ("Redemption Date"), provided that all
liabilities, contingent or otherwise, of the Fund, except any liability
to Partners on account of their capital contributions, shall have been
paid or there remains property of the Fund sufficient to pay them. As
used herein, "Request for Redemption" shall mean a letter in the form
specified by the General Partner, sent by a Limited Partner and received
by the General Partner at its main business office prior to 5:00 P.M.
(Maryland time) at least fifteen full business days prior to the end of
the month in which such Redemption is to be effective. Forms of Request
for Redemption may be obtained by written request to the General Partner.
If the General Partner shall receive at its main business office a
Request for Redemption on a date less than fifteen full business days
prior to the end of a month, unless the General Partner in its sole
discretion shall waive the untimeliness of such Request, such Redemption
shall be effective as of the close of business on the last day of the
month that immediately follows the month in which the General Partner
shall have received such untimely Request.
Upon Redemption, a Limited Partner shall receive from the Fund for
each Unit redeemed an amount equal to the Net Asset Value of a Unit (as
defined in Section 8(d)(2)) as of the Redemption Date less any amount
owing by such Partner to the Fund or the General Partner pursuant to
Sections 7, 8(c), 8(e) and 16(b). All amounts owed to the Fund under
Sections 7, 8(c), 8(e) and 16(b) by the Partner to whom such Unit was
sold as well as all amounts owed by all subsequent holders of such Unit
shall be deducted from the proceeds upon Redemption. The General Partner
shall endeavor to pay a reasonable percentage of the redemption amount
within 30 days after the Redemption Date and the remainder no later than
10 days after the receipt by the Fund of the Fund's final net asset
valuation for the applicable month, except that under special
circumstances, including, but not limited to, the inability on the part
of the Fund to liquidate investments or the default or delay in payments
due the Fund from brokers, banks, or other persons, or the General
Partner's decision, in the exercise of its sole discretion, not to
liquidate securities on a disadvantageous basis, or the practical
impossibility of accurately valuing the redeemed Unit prior to receipt of
the Fund's annual accounting the Fund may delay payment to Partners
requesting Redemption of the proportionate part of the Redemption amount
represented by the sums which are the subject of such default or delay.
The General Partner, for and on behalf of the Fund and each Partner,
is authorized to execute, file, record, and publish such amendments to
this Agreement and to the Certificate of Limited Partnership as may be
necessary or desirable to reflect any Redemption pursuant to this Section
11(b)
12. ADMISSION OF ADDITIONAL PARTNERS.
At any time and from time to time, the General Partner, in its
discretion, may admit additional Limited Partners. The General Partner,
in its discretion, may admit any permitted transferee, assignee, pledgee,
or secured creditor of Units as a substituted Limited Partner in
accordance with Section 11(a). Additional general partners may be
admitted to the Fund in accordance with and to the extent permissible
under the Partnership Act, but only (a) with the consent of the General
Partner and more than 50% of the Units then-owned by Limited Partners, or
(b) with the consent of all the Limited Partners, or (c) in the sole
discretion of the General Partner, if such general partner(s) are
affiliates of the General Partner. The General Partner is authorized to
execute, file, record, and publish, for and on behalf of the Fund and
each Partner, such amendments to this Agreement and the Certificate of
Limited Partnership as may be necessary or desirable to reflect the
admission or substitution of a Partner.
13. SPECIAL POWER OF ATTORNEY.
Each Limited Partner, by the execution of this Agreement, does
irrevocably constitute and appoint the General Partner and any successor
general partner, with full power of substitution, as such Limited
Partner's true and lawful attorney-in-fact, in his name, place, and
▇▇▇▇▇, to execute, acknowledge, swear to, file, and record on his behalf
in the appropriate public offices, and publish if necessary: (a) this
Agreement and the Certificate of Limited Partnership and any amendments
thereto; (b) all instruments which the General Partner, in its sole
discretion, deems necessary or appropriate to reflect any amendment,
change, or modification of this Agreement and the Certificate of Limited
Partnership made in accordance with the terms of this Agreement; (C)
assumed name certificates; (d) all instruments which the General Partner
deems necessary or appropriate to qualify the Fund to do business as a
foreign limited partnership in any jurisdiction; (e) instruments which
may be required to be filed by the Fund under the law, rule, or
regulation of any United States federal, state, or foreign governmental
authority or any self- regulatory authority for which the General Partner
in its sole discretion shall
11
deem necessary or appropriate to file; or (f) instruments which shall be
required to effect the continuation of the Fund, the admission of a
subscriber for Units as a Limited Partner or of others as additional or
substituted Limited Partners, or the termination and dissolution of the
Fund, provided that such continuation, admission, and termination and
dissolution shall be in accordance with the terms or this Agreement.
The power of attorney granted herein shall be irrevocable and deemed
to be a power coupled with an interest and shall survive the insolvency,
disability, legal incompetency, death, dissolution, liquidation, or
termination of a Limited Partner. In addition, this power of attorney
shall survive the transfer, assignment, pledge, or encumbrance by a
Limited Partner of any or all of his Units, except that where the
transferee, assignee, pledgee, or creditor thereof shall have been
approved by the General Partner for admission to the Fund as a
substituted Limited Partner, the power of attorney of the transferor,
assignor, pledgor, or debtor shall survive the transfer, assignment,
pledge, or encumbrance for the sole purpose of enabling the General
Partner to execute, acknowledge, and file any instrument necessary to
effect such substitution. The General Partner may exercise this power of
attorney for each Limited Partner by a facsimile signature of the General
Partner or by listing all of the Limited Partners executing any
instrument with the single signature of the General Partner acting as
attorney-in-fact for all of them. Each Limited Partner hereby agrees to
be bound by any representation made by the General Partner and by any
successor thereto acting in good faith pursuant to such power of
attorney, and each Limited Partner hereby waives any and all defenses
which may be available to contest, negate, or disaffirm the action of the
General Partner and any successor thereto taken in good faith under such
power of attorney. Each Limited Partner agrees to execute a special power
of attorney on a document separate from this Agreement. In the event of
any conflict between this Agreement and any instruments filed by such
attorney-in-fact pursuant to the power of attorney granted in this
Section 13, this Agreement shall control.
14. WITHDRAWAL OF PARTNERS.
(a) WITHDRAWAL OF A GENERAL PARTNER. The Fund shall terminate and
dissolve upon the withdrawal, insolvency, legal incapacity, death, or
removal of the General Partner and any additional general partner
appointed by the General Partner pursuant to Section 12 (unless the
Limited Partners shall elect a successor general partner pursuant to
Section 17(c)). The General Partner shall not withdraw from the Fund
unless it shall have given the Limited Partners at least 60 days' prior
written notice of its intention to withdraw.
(b) WITHDRAWAL OF A LIMITED PARTNER. The withdrawal, insolvency,
disability, legal incompetency, death, liquidation, termination, or
dissolution of a Limited Partner shall not terminate or dissolve the
Fund, and such Limited Partner, his estate, custodian, or personal
representative, shall have no right to withdraw or value such Limited
Partner's interest in the Fund except as provided in Section 11. Each
Limited Partner expressly agrees that in the event of such Limited
Partner's death, he waives on behalf of himself and his estate, and such
Limited Partner directs the legal representative of his estate and any
person interested therein to waive, the furnishing of any inventory,
accounting, or appraisal of the assets of the Fund and any right to an
audit or examination of the books and records of the Fund.
(c) REQUIRED WITHDRAWAL OF A LIMITED PARTNER. The General Partner may, in
its sole discretion at any time and from time to time, require any
Limited Partner to withdraw entirely from the Fund or to withdraw a
portion of such Limited Partner's unredeemed capital contribution and
undistributed profits, if any, by giving notice in writing to the Limited
Partner thus designated. The Limited Partner thus designated shall
withdraw from the Fund or withdraw that portion of such Limited Partner's
unredeemed capital contribution and undistributed profits, if any,
specified in such notice, as the case may be, as of the end of the month
specified for such withdrawal in such notice, which notice shall be
mailed, return receipt requested, to the Limited Partner thus designated
at least five days prior to such month-end and such Limited Partner shall
be deemed to have withdrawn from the Fund or to have made a partial
withdrawal of such Partner's capital contribution as of the end of such
month, as the case may be, without further action on the part of said
Limited Partner. The General Partner is hereby authorized to cancel the
appropriate number of Units issued to such Limited Partner in respect of
such withdrawal and pay an amount equal to the Net Asset Value of such
Units to such Limited Partner as provided in Section 11(b). The General
Partner, on behalf of the Fund and each Partner, is authorized to
execute, file, record, and publish such amendments to this Agreement and
to the Certificate of Limited Partnership as may be necessary to reflect
any required withdrawal of a Limited Partner pursuant to this Section
14(c).
15. NO PERSONAL LIABILITY FOR RETURN OF CAPITAL.
The General Partner shall not be personally liable for the return or
repayment of all or any portion of the capital contribution or profits of
any Partner, it being expressly agreed that any such return of capital
12
contribution or profits made pursuant to this Agreement shall be made
solely from the assets (which shall not include any right of contribution
from the General Partner except to the extent previously made pursuant to
this Agreement) of the Fund.
16. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE FUND. The Fund shall indemnity, defend, and
hold harmless the General Partner, and the employees and affiliates of
the General Partner, and the directors, officers, and employees of any
such affiliates, from and against any loss, liability, damage, cost, or
expense (including legal fees and expenses incurred in the defense or
settlement of any demands, claims, or lawsuits) actually and reasonably
incurred arising from actions or omissions concerning the business or
activities undertaken by or on behalf of the Fund, including, without
limitation, any demands, claims, or lawsuits initiated by a Limited
Partner, or resulting from or relating to the offer and sale of the Units
pursuant to the Memorandum; provided, that the conduct of such person or
entity did not constitute willful malfeasance or gross negligence and was
done in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interests of the Fund. The termination of any
action, proceeding, or claim by judgment, order, or settlement shall not,
of itself, create a presumption that the conduct in question was not
undertaken in good faith and in a manner reasonably believed to be in, or
not opposed to, the best interests of the Fund. Notwithstanding the
foregoing provisions of this Section 16(a), in any action or proceeding
brought by a Limited Partner in the right of the Fund to which the
General Partner or any other party indemnified pursuant to the foregoing
are party defendants, any such person shall be indemnified only to the
extent and subject to the conditions specified in the Partnership Act.
To the extent that the General Partner or other person to be
indemnified has been wholly successful on the merits or otherwise in the
defense of any action, proceeding, or claim refereed to in the preceding
paragraph, the Fund shall indemnify such person against the reasonable
expenses, including attorneys fees, actually and necessarily incurred by
such person in connection with such defense. Except as provided in the
preceding sentence, any indemnification permitted by this Section 16(a),
unless ordered by a court, shall be made by the Fund only upon the
opinion of independent legal counsel that indemnification is proper in
the circumstances because the applicable standard of conduct has been met
by the General Partner or other person to be indemnified.
Expenses incurred in defending a threatened or pending civil,
administrative, or criminal action, suit, or proceeding against the
General Partner with respect to its activities an general partner of the
Fund may be paid by the Fund in advance of the final disposition of such
action, suit, or proceeding if (I) the legal action shall relate to the
performance of duties or services by the General Partner on behalf of the
Fund, and (ii) the legal action shall be initiated by a third party who
shall not be a Limited Partner, and (iii) the General Partner shall
undertake to repay the advanced funds to the Fund in cases in which it
shall not be entitled to indemnification.
Nothing contained in this Section 16(a) shall increase the liability
of any Limited Partner to the Fund beyond the amount of such Partner's
unredeemed capital contribution and undistributed profits, if any, and
any distributions and amounts received upon redemption of Units together
with interest thereon. All rights to indemnification and payment of legal
fees and expenses shall not be affected by the termination of the Fund or
the withdrawal, insolvency, disability, legal incompetency, or death of
the General Partner or of any successor general partner. The General
Partner shall be entitled to rely on advice of counsel and any act or
omission of the General Partner pursuant to such advice shall, in no
event, subject the General Partner to liability to the Fund or to the
Limited Partners. No person will be exculpated or exonerated from
liability, or indemnified against loss for violations of federal or state
securities laws, or for any other intentional or criminal wrongdoing.
(b) INDEMNIFICATION BY PARTNERS. In the event that the Fund or the
General Partner 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 Partner's obligations or liabilities unrelated to the Fund's
business or any purported transfer, assignment, pledge, or encumbrance of
Units in violation of Section 11(a), such Partner shall indemnify and
reimburse the Fund and the General Partner for all loss and expense
incurred, including attorneys' and accountants' fees and expenses, tax
liabilities, or loss of tax benefits.
(c) SURVIVAL OF INDEMNITIES. All rights to indemnification permitted in
this Agreement and payment of associated expenses shall not be affected
by the termination and dissolution of the Fund or the removal,
withdrawal, insolvency, disability, legal incompetency, or death of the
General Partner.
17. AMENDMENTS; MEETINGS; VOTING.
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(a) AMENDMENTS INITIATED BY THE GENERAL PARTNER. If, at any time during
the term of the Fund, the General Partner shall deem it necessary or
desirable to amend this Agreement, such amendment shall be effective only
if embodied in an instrument signed by the General Partner and by Limited
Partners owning more than 50% of the Units then-owned by Limited Partners
and if made in accordance with and to the extent permissible under the
Partnership Act. Any amendment to this Agreement which shall have been
approved by the percentage of outstanding Units prescribed above shall be
deemed to have been approved by all Limited Partners and all outstanding
Units. Notwithstanding the foregoing, the General Partner is hereby
authorized to amend this Agreement without the consent of Limited
Partners in order to (i) clarify any inaccuracy or ambiguity or reconcile
any inconsistency, or to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, (ii) change this
Limited Partnership Agreement in any manner that is appropriate or
necessary to qualify or maintain the qualification of the Fund as a
limited partnership or a partnership in which the Limited Partners have
limited liability under the laws of any state or that is appropriate or
necessary to ensure that the Fund will not be treated as an association
taxable as a corporation for federal income tax purposes, (iii) change
the Limited Partnership Agreement in any manner that does not adversely
affect the Limited Partners in any material respect or that is required
or contemplated by other provisions of this Limited Partnership
Agreement, (iv) make any amendment that is appropriate or necessary, in
the sole discretion of the General Partner, to prevent the Fund or to
subject the Fund to the "plan asset" regulations adopted under the
Employee Retirement Income Security Act of 1974, as amended, including
any amendment necessary or appropriate to comply with such regulations,
(v) amend the provisions of Section 8 relating to the allocation of
profits, losses, and distributions among the Partners if the Fund shall
be advised at any time by its legal counsel, accountants, or auditors
that the allocations provided in Section 8 are unlikely to be respected
for United States federal income tax purposes, provided that new
allocations made by the General Partner in reliance upon the advice of
the legal counsel, accountants, or auditors described above shall be
deemed to be made pursuant to the obligations of the General Partner to
the Fund and the Limited Partners and no such new allocations shall give
rise to any claim or cause of action by any Limited Partner, or (vi) make
any other amendment similar to the foregoing. Any such amendment shall be
effective when signed by the General Partner. Any supplemental or
amendatory agreement shall be adhered to and have the same effect from
and after its effective date as if the same had originally been embodied
in, and formed a part of, this Agreement; provided, however, that,
without the consent of all Partners, no such supplemental or amendatory
agreement shall change or alter the provisions of this proviso, reduce
the capital account of any Partner, or modify the percentage of profits,
losses, or distributions to which any Partner is entitled.
(b) MEETINGS. Any Limited Partner, upon written request addressed to the
General Partner, at such Limited Partner's expense, shall be entitled to
obtain from the General Partner a list of the names and addresses of
record of all Limited Partners and the number of Units owned by each,
provided that such request is made in order to allow such Limited Partner
to communicate with other Limited Partners concerning the business of the
Fund, is reasonable, just and non-commercial. The General Partner, in its
discretion, may require a Limited Partner requesting a list of Limited
Partners to furnish to the General Partner an affidavit (in such form and
substance as shall be determined by the General Partner) that the Limited
Partner's request is not desired for a purpose which is in the interest
of a business or object other than the business of the Fund and agreeing
to maintain in confidence, and not disclose, the contents of the list and
the information contained therein. Upon receipt of a written request,
signed by Limited Partners owning at least 10% of the Units then-owned by
Limited Partners, that a meeting of the Fund be called to vote upon any
matter upon which the Limited Partners may vote pursuant to this
Agreement, the General Partner, by written notice to each Limited Partner
of record mailed within 30 days after such receipt, shall call a meeting
of the Fund. 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, a reasonable place and time, and the purpose of such meeting.
Partners may vote in person or by proxy at any meeting of the Fund.
(c) AMENDMENTS AND ACTIONS INITIATED BY LIMITED PARTNERS. At any meeting
called pursuant to Section 17(b), upon the affirmative vote (which may be
in person or by proxy) of Limited partners owning more than eighty
percent (80%) of the Units then-owned by Limited Partners, the following
actions may be taken: (i) this Agreement may be amended in accordance
with and only to the extent permissible under the Partnership Act;
provided, however that consent of all Limited Partners shall be required
in the case of amendments which require the consent of all Limited
Partners, i.e., changing or altering this Section 17, extending the term
of the Fund, reducing the capital account of any Limited Partner or
modifying the percentage of profits, losses or distributions to which any
Limited Partner is entitled; in addition, reduction of the capital
account of any assignee or modification of the percentage of profits,
losses or distributions to which an assignee is entitled hereunder shall
not be effected by the amendment or supplement to this Limited
Partnership Agreement without such assignee's written consent; (ii) the
Fund may be dissolved; (iii) the General Partner may be removed and
replaced on 90 days' prior written notice to the General Partner; (iv) a
new general partner or
14
general partners may be elected if the General Partner in accordance with
the terms hereof withdraws from the Fund or is removed in accordance with
this Section17(c); and (v) any contract with the General Partner or any
affiliate thereof may be terminated upon 60 days' notice; provided,
however, that no action described above shall be taken unless independent
legal counsel approved by Limited Partners owning more than eighty
percent (80%) of the Units then owned by Limited Partners shall render a
written opinion to the effect that the action to be taken shall not
adversely affect the status of the Limited Partners as limited partners
under the Partnership Act, and under the limited partnership act of any
state in which the Fund may be deemed to be doing business, or the
classification of the Fund as a partnership for United States federal
income tax purposes, and shall be permitted under the Partnership Act,
and the limited partnership act of any state in which the Fund may be
deemed to be doing business (or, in lieu of such an opinion, a court of
competent jurisdiction shall render a final order to such effect; the
term "final order" shall mean an order that is not subject to any further
court proceedings for appeal, review, or modification). Any action which
shall have been approved by the percentage of outstanding Units
prescribed above shall be deemed to have been approved by all Limited
Partners and all outstanding Units.
(d) ACTION WITHOUT MEETING. Notwithstanding contrary provisions of this
Section 17 covering notices to, meetings of, and voting by Limited
Partners, any action required or permitted to be taken at a meeting of
Limited Partners may be taken by Limited Partners without a meeting,
without prior notice, and without a vote if a consent in writing, setting
forth the action so taken, shall be signed by the Limited Partners owning
Units having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting of Limited
Partners at which all outstanding Units were present and voted. Notice of
the taking of action by Limited Partners without a meeting by less than
unanimous consent of Limited Partners shall be given to those Limited
Partners who shall not have consented in writing within seven business
days after the occurrence thereof.
18. TRADING SUSPENSION.
If the Fund's Net Assets decline to 65% or less of the greater of
(I) its initial Net Assets at the start of trading or (ii) its Net Assets
at the start of any fiscal year of the Fund (in both cases after
deduction of sales commissions, the organization and offering charge, and
brokers' due diligence fees, if any, and disregarding capital additions
and redemptions), the Fund will suspend trading and liquidate its
securities and commodity interest positions as promptly as practicable
thereafter and, as soon as practicable, redeem its interest(s) in other
investment pool(s).
If trading is suspended, the General Partner will inform each
Limited Partner promptly of the suspension. Any Limited Partner may, at
that time, elect to withdraw from the Fund before trading is resumed.
19. GOVERNING LAW.
The validity and construction of this Agreement shall be governed
by, and construed in accordance with, the substantive law of the State of
Maryland, U.S.A. (excluding the law thereof which requires the
application of or reference to the law of any other jurisdiction).
20. MISCELLANEOUS.
(a) PRIORITY AMONG LIMITED PARTNERS. Except as otherwise may be
specifically set forth in this Agreement, no Limited Partner shall be
entitled to any priority or preference over any other Limited Partner in
regard to the affairs of the Fund.
(b) NOTICES. All notices under this Agreement (other than requests for
Redemption of Units, notices of assignment, transfer or pledge of Units,
and reports by the General Partner to the Limited Partners) shall be in
writing and shall be effective upon personal delivery or, if sent by
registered or certified 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 mail. Requests for Redemption
of Units and notices of assignment, transfer, or pledge of Units shall be
effective upon timely receipt by the General Partner. Reports by the
General Partner to the Limited Partners shall be in writing and shall be
sent by first class or express mail (or the equivalent thereof) to the
last known address of each Limited Partner. Any Limited Partner who is
not a resident of the United States shall appoint in writing to the Fund
a resident of the United States as such Partner's agent for service of
process and receipt of notices under this Agreement. Each Limited Partner
shall furnish in writing and maintain on file with the Fund a current
United States mailing address.
(c) BlNDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon, all of the
15
Partners, their successors, assigns as permitted herein, custodians,
estates, heirs, and personal representatives. For purposes of determining
the rights of any Partner hereunder, the Fund and the General Partner may
rely upon the Fund's records as to who are Partners, and all Partners
agree that their rights shall be determined and that they shall be bound
thereby, including all rights which they may have under Section 17.
(d) CREDITORS. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors or other third parties of the
Fund or of any Partner.
(e) DISPUTE RESOLUTION. The parties hereto agree that any dispute between
a Limited Partner and the General Partner (or affiliate), selling agent,
broker, trading advisor, general partner, or the Fund relating to this
Agreement or the operation of the Fund shall be resolved exclusively by
arbitration, pursuant to the procedures specified in the arbitration
clause to the Fund's subscription agreement and power of attorney, unless
the Limited Partner declines to accept the arbitration clause, in which
case the dispute shall be resolved within the state of the General
Partner's principal place of business. Accordingly, the parties consent
and submit to the jurisdiction of the federal and state courts and any
applicable arbitral body located within the state of the General
Partner's principal place of business. The parties further agree that any
such action or proceeding brought by a party to enforce any right, assert
any claim, or obtain any relief whatsoever in connection with this
Agreement shall be brought by such party exclusively in the federal or
state courts, or if appropriate before an applicable arbitral body,
located within the state of the General Partner's principal place of
business.
(f) SEVERABlLTY. If any provision of this Agreement, or the application
of any provision to any person or circumstance, shall be held to be
inconsistent with any present or future law, ruling, rule, or regulation
of any court or governmental or regulatory authority having jurisdiction
over the subject matter hereof such provision shall be deemed to be
rescinded or modified in accordance with such law, ruling, rule, or
regulation, and the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those as to which
it shall be held inconsistent, shall not be affected
(g) CAPTIONS. Captions in no way define, limit, extend, or describe the
scope of this Agreement nor the effect of any of its provisions.
(h) ENGLISH USAGE. Unless the context indicates that such reading would
be inappropriate, words of any gender herein shall be deemed to include
any other gender, a reference to the singular shall include the plural,
and vice versa, and the term "person" shall include individuals,
corporations, firms, partnerships, trusts, and other forms of
associations.
(i) COUNTERPARTS. This Agreement may be executed in counterparts, and all
so executed shall constitute one agreement binding on all of the parties
hereto, notwithstanding that all of the parties shall not be signatory to
the original or the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
General Partner:
▇▇▇▇▇▇ & COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
Additional Limited Partners:
By: ▇▇▇▇▇▇ & COMPANY, INC.
General Partner, as
Authorized Agent and
Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
16