EXHIBIT A
______________________________
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AH&H PARTNERS FUND LIMITED PARTNERSHIP
______________________________
As of January 1, 1996
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
AH&H PARTNERS FUND LIMITED PARTNERSHIP
A MASSACHUSETTS LIMITED PARTNERSHIP
TABLE OF CONTENTS
Heading/
Article Page
-------- ----
Defined Terms............................................... 1
Organization of the Partnership............................. 8
Article 1. Name of the Partnership................... 8
Article 2. Purposes and Powers of the Partnership.... 8
Article 3. Term of the Partnership................... 10
Article 4. Principal Place of Operation.............. 10
Article 5. Fiscal Year............................... 11
Partners and Their Rights and Obligations................... 11
Article 6. Capital Contributions..................... 11
Article 7. Admission of New Partners; Additional
Capital Contributions Prom Existing
Partners.................................. 12
Article 8. Management................................ 15
Article 9. Liability of Partners..................... 22
Article 10. Indemnification........................... 22
Article 11. Withdrawal or Retirement
of General Partner........................ 25
Article 12. Transferability of a Limited
Partner's Interest; Substituted
Limited Partners; Withdrawal of a
Limited Partner........................... 27
Capital Accounts, Tax Allocations and Distributions......... 28
Article 13. Capital Accounts.......................... 28
Article 14. Tax Allocations........................... 33
Article 15. Distributions Prior to Liquidation........ 37
Article 16. Removal of Limited Partners............... 39
Termination................................................. 40
Article 17. Dissolution............................... 40
Article 18. Termination............................... 40
Miscellaneous............................................... 42
Article 19. Certain Limitations on Withdrawal
and Dissolution........................... 42
Article 20. Portfolio Valuation....................... 43
Article 21. Books and Records......................... 44
-i-
Heading/
Article Page
-------- ----
Article 22. Financial Reports......................... 44
Article 23. Inspection of Books and Records........... 45
Article 24. Partner's Investment Intent
and Transfer of Interests................. 45
Article 25. Amendments................................ 46
Article 26. Prohibition of Certain Transfers;
Tax Elections............................. 48
Article 27. General Provisions........................ 48
-ii-
THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP made and
entered into as of the 1st day of January, 1996, by and among ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& ▇▇▇▇, Inc., a Massachusetts corporation, as Advisory General Partner, the
Managing General Partners whose names appear on SCHEDULE A attached hereto
and the Persons whose names appear on SCHEDULE A attached hereto as Limited
Partners.
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇. ▇. ▇▇▇▇▇ III, as the initial limited partner, and the
Advisory General Partner formed AH&H PARTNERS FUND LIMITED PARTNERSHIP (the
"Partnership") pursuant to an Agreement of Limited Partnership dated June 8,
1990 (the "Original Agreement"); and
WHEREAS, as of September 13, 1990, the Original Agreement was restated in
the form of an Amended and Restated Agreement of Limited Partnership of the
Partnership, reflecting, among other things, the withdrawal of ▇▇▇▇▇ ▇. ▇▇▇▇▇
III as the initial limited partner; and
WHEREAS, the Second Amended and Restated Agreement of Limited Partnership
was adopted as of the 1st day of April 1992 (the "Second Amended Agreement");
and
WHEREAS, the Second Amended Agreement has been amended on certain
occasions to reflect the admission or withdrawal of certain persons as
limited partners of the Partnership; and
WHEREAS, the Limited Partners and the Advisory General Partner desire to
amend and restate the Second Amended Agreement and to continue the
Partnership in accordance with the terms of this Third Amended and Restated
Agreement of Limited Partnership.
NOW, THEREFORE, in consideration of the mutual promises and agreements
made herein, the parties, intending to be legally bound, hereby agree as
follows:
DEFINED TERMS
The defined terms used in this Agreement shall, unless the context
otherwise requires, have the meanings specified below. The singular shall
include the plural and the masculine gender shall include the feminine, the
neuter and vice versa, as the context requires.
"Accountants" means the certified public accountants of the Partnership
as may be selected by the Managing General Partners from time to time.
"Act" means the Massachusetts Uniform Limited Partnership Act (M.G.L.
Ch. 109), as amended from time to time, and any successor to such Act. Any
reference to any section of the Act shall mean such section as in effect on
the date hereof and shall, as appropriate, refer to any additional,
replacement or substitute section of the Act or any successor act pertaining
to the subject matter thereof.
"Additional Limited Partner" means any Person admitted to the
Partnership pursuant to Article 6 or Article 7 as of a date after
December 31, 1995 and shown as a Limited Partner on the books and
records of the Partnership.
"Adjusted Net Asset Value" means, as of any Valuation Date, the
Partnership's Net Asset Value as of such Valuation Date (without reduction
for any distributions as of such Valuation Date or any advisory fees payable
by the Partnership as of such Valuation Date that are allocable to the
Partners' Capital Accounts as of such Valuation Date) adjusted by (x)
subtracting the amount of Capital Contributions made since the prior
Valuation Date and (y) adding the amount of money and the fair market value
of Securities distributed since the prior Valuation Date (including money and
Securities distributed as of the prior Valuation Date but excluding money and
Securities distributed as of the applicable Valuation Date).
"Advisory Fees and Allocations" means the fees paid or reallocations made
to the Advisory General Partner pursuant to the Investment Management
Agreement.
"Advisory General Partner" means AH&H, in its capacity as advisory
general partner of the Partnership, and/or any other Person that becomes a
successor or additional Advisory General Partner of the Partnership as
provided herein, in such Person's capacity as a advisory general partner of
the Partnership.
"Affiliate" means, when used with reference to a specified Person, (i)
any other Person directly or indirectly owning, controlling or holding with
power to vote 5% or more of the outstanding voting securities of such Person,
(ii) any other Person 5% or more of whose outstanding voting securities are
directly or indirectly owned, controlled or held with power to vote by such
Person, (iii) any other Person directly or indirectly controlling, controlled
by or under common control with such Person, or (iv) any officer, director,
partner or employee of such Person.
-2-
"Agreement" means this Third Amended and Restated Agreement of Limited
Partnership, as originally executed, and as amended, modified, supplemented
or restated from time to time, as the context requires.
"AH&H" means ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., a Massachusetts corporation.
"Allocation Deficit" means, with respect to any Managing General Partner
or Limited Partner for any Performance Allocation Period, the amount, if any,
by which (i) the sum of such Partner's Base Amounts for Valuation Periods
included in such Performance Allocation Period exceeds (ii) the sum of the
adjustments made to such Partner's Capital Account pursuant to Article 13(d)
of the Partnership Agreement, as of Valuation Dates included in such
Performance Allocation Period.
"Applicable Percentage" has the meaning assigned thereto from time to
time in the Investment Management Agreement.
"Base Amount" means, with respect to any Partner for any Valuation Period
included in a particular Performance Allocation Period, the Applicable
Percentage of the balance in such Partner's Capital Account as of the first
day of such Performance Allocation Period (as determined after all
allocations and distributions made to such Partner as of dates prior to such
first day have been charged or credited thereto, as the case may be, but
before any Capital Contributions made by such Partner as of such first day
have been credited thereto), computed, solely for purposes of this
definition, with the following adjustments:
(a) there shall be added to such Partner's opening Capital Account
balance for such Performance Allocation Period any Shortfall of such
Partner for the immediately preceding Performance Allocation Period
(computed, except as provided in clause (c) below, without regard
to any adjustments to such Shortfall on account of distributions to
such Partner during the applicable Performance Allocation Period);
(b) for such Valuation Period, there shall be added to such Partner's
opening Capital Account balance for such Performance Allocation
Period all Capital Contributions made by such Partner during such
Valuation Period and during any prior Valuation Period included in
such Performance Allocation Period; and
(c) upon each distribution to such Partner as of a date during such
Valuation Period, there shall be subtracted, for purposes of
determining such Partner's Base Amounts
-3-
for subsequent Valuation Periods included in such Performance
Allocation Period, from such Partner's opening Capital Account
balance for such Performance Allocation Period (as determined after
taking into account all prior adjustments thereto made on account of
any Shortfall of such Partner for the immediately preceding
Performance Allocation Period pursuant to clause (a), any prior
Capital Contributions made by such Partner during such Performance
Allocation Period pursuant to clause (b) and any distributions made
to such Partner as of prior dates during such Performance Allocation
Period pursuant to this clause (c) an amount equal to such
distribution.
"Book Loss" means, for any Valuation Period, the amount, if any, by which
(i) the Partnership's Net Asset Value as of the immediately preceding
Valuation Date (after the payment of all Fixed Management Fees payable as of
such preceding Valuation Date but before any distributions as of such
preceding Valuation Date) exceeds (ii) the Partnership's Adjusted Net Asset
Value as of the Valuation Date included in such Valuation Period.
"Book Profit" means, for any Valuation Period, the amount, if any, by
which (i) the Partnership's Adjusted Net Asset Value as of the Valuation Date
included in such Valuation Period exceeds (ii) the Partnership's Net Asset
Value as of the immediately preceding Valuation Date (after payment of all
Fixed Management Fees but before any distributions as of the preceding
Valuation Date.
"Business Day" means any day that is not a Saturday, Sunday or legal
holiday in Boston, Massachusetts and on which all securities exchanges on
which Securities owned by the Partnership trade are open.
"Capital Account" means, with respect to any Partner, the Capital Account
established and maintained for such Partner pursuant to Article 13.
"Capital Contribution" means, at any specified time, the total amount of
money and the fair market value of any property contributed to the
Partnership by all the Partners or any class of Partners or any one Partner,
as the case may be (or the predecessor holders of the Interest of such
Partners or Partner).
"Certificate" means the Certificate of Limited Partnership as originally
filed on behalf of the Partnership with the Secretary of the Commonwealth
pursuant to the Act, and as amended, modified, supplemented or restated from
time to time, as the context requires.
-4-
"Closing" means any closing of the sale of one or more Interests in the
Partnership (or portions thereof) to one or more Additional Limited Partners
pursuant to Article 6 or Article 7.
"Code" means the Internal Revenue Code of 1986, as amended (or any
corresponding provision of any predecessor or successor law).
"Commonwealth" means the Commonwealth of Massachusetts.
"Fixed Management Fee" means the portion, if any, of the Advisory Fees
and Allocations which is determined on a basis other than the investment
performance of the Partnership.
"General Partners" means the Managing General Partners and the Advisory
General Partner or Partners.
"Interest" means the interest of a Partner in the Partnership as
determined under this Agreement. Reference to a majority or a specified
percentage of Interests of the Limited Partners means Limited Partners whose
combined Capital Account balances represent over 50% or such specified
percentage of the aggregate Capital Account balances of all Limited Partners,
except that for purposes of any matter contemplated by Article 8(f), a
majority of Interests of the Limited Partners shall mean (A) Limited Partners
whose combined Capital Account balances represent 67% or more of the
Interests present at a duly called meeting of Partners if the Limited
Partners whose Capital Account balances represent 50% or more of the
aggregate Capital Account balances of the Limited Partners are present at
such meeting or (B) Limited Partners whose Capital Account balances
represents more than 50% of the aggregate Capital Account balances of all
Limited partners, whichever is less.
"Investment Advisor" means AH&H, in its capacity as investment advisor to
the Partnership, or any replacement or additional investment advisor as
selected by the Managing General Partners in accordance with Article 8(a) of
this Agreement and the Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, and the rules and regulations of the Securities and Exchange
Commission thereunder, as the same may be amended from time to time and shall
include, as applicable, any exemptive order from the requirements of the
Investment Company Act granted to the Partnership by the Securities and
Exchange Commission.
-5-
"Investment Management Agreement" means the Investment Management
Agreement between the Partnership and the Investment Advisor, including any
and all amendments and renewals thereof and all successors thereto and any
other investment management agreement with any Investment Advisor.
"Limited Partner" means any Person who is a limited partner of the
Partnership as shown on the books and records of the Partnership (including
Additional Limited Partners and Substituted Limited Partners) at the time of
reference thereto, in such Person's capacity as a limited partner of the
Partnership.
"Managing General Partner" means any person who is a managing general
partner of the Partnership as shown on the books and records of the
Partnership at the time of reference thereto, in such person's capacity as a
managing general partner of the Partnership.
"Net Asset Value" shall have the meaning used in Article 20.
"Opening Date" shall mean each January l, April 1, July 1, and October 1
before the dissolution of the Partnership and any other dates selected by the
Advisory General Partner.
"Partner" means any General Partner or Limited Partner.
"Partnership" means the limited partnership formed and continued by and
governed under and pursuant to this Agreement, as said limited partnership
may from time to time be constituted.
"Performance Allocation Date" has the meaning assigned thereto in the
Investment Management Agreement.
"Performance Allocation Period" has the meaning assigned thereto in the
Investment Management Agreement.
"Performance Allocation" means that portion, if any, of the Advisory Fees
and Allocations determined on the basis of the investment performance of the
Partnership during any Performance Allocation Period.
"Person" means any individual, corporation, partnership, trust,
unincorporated organization or association, or other entity.
"Securities" shall have the meaning as set forth in Article 2(a) hereof.
"Securities Act" means the Securities Act of 1933, as amended and in
effect from time to time and any successor thereto.
-6-
"Shortfall" means, with respect to any Partner for any Performance
Allocation Period, the amount, if any, of such Partner's Allocation Deficit
for such Performance Allocation Period, computed with the following
adjustments:
(a) in computing such Partner's Allocation Deficit for such Performance
Allocation Period, there shall be added to the sum of such Partner's
Base Amounts for Valuation Periods included in such Performance
Allocation Period the amount of such Partner's Shortfall, if any,
for the immediately preceding Performance Allocation Period (taking
into account all adjustments to such prior Shortfall pursuant to
clause (b) on account of distributions to such Partner); and
(b) for each distribution to such Partner pursuant to Article 15(b) as
of a date during the period beginning on the Performance Allocation
Date closing such Performance Allocation Period and ending on the
date immediately preceding the next Performance Allocation Date,
there shall be subtracted from such Partner's Allocation Deficit for
such Performance Allocation Period (as determined after reducing
such Allocation Deficit pursuant to this clause (b) for all
distributions, in the order made, to such Limited Partner pursuant
to Article 15(b) as of prior dates during the period beginning on
the Performance Allocation Date closing such Performance Allocation
Period and ending on the date immediately preceding the next
Performance Allocation Date) all distributions, in the order made,
to such Partner pursuant to Article 15(b) as of prior dates during
the period beginning on the Performance Allocation Date closing such
Performance Allocation Period and ending on the next following
Performance Allocation Date).
"Substituted Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to the provisions of Article 12 and
shown as a Limited Partner on the books and records of the Partnership.
"Tax Account" means, with respect to any Partner, the Tax Account
established and maintained for such Partner pursuant to Article 13.
"Treasury Regulations" means the Income Tax Regulations promulgated under
the Code. References to specific sections of the Treasury Regulations shall
be to such sections as amended, supplemented or superseded by Treasury
Regulations currently in effect.
-7-
"Valuation Date" means (i) the calendar day immediately preceding each
Opening Date before the final liquidation of the Partnership (or, at the
election of the Advisory General Partner, if any such day is not a Business
Day, on the Business Day immediately preceding the day which otherwise would
be the applicable Valuation Date) and (ii) the date as of which the
Partnership is liquidated.
"Valuation Period" means each period ending on a Valuation Date and
beginning on the day after the immediately preceding Valuation Date.
"Withdrawal" means, (i) in the case of a Partner who is a natural person,
the death of such Partner or the adjudication that such Partner is
incompetent, (ii) in the case of a Partner that is not a natural person, the
occurrence of any event described in Section 23(7) through Section 23(10) of
the Act, and (iii) in the case of any General Partner, the occurrence of any
event described in Section 23(4) or Section 23(5) of the Act.
ORGANIZATION OF THE PARTNERSHIP
Article 1. NAME OF THE PARTNERSHIP. The Partnership shall continue to
conduct its operations under the name of "AH&H Partners Fund Limited
Partnership."
Article 2. PURPOSES AND POWERS OF THE PARTNERSHIP.
(a) The Partnership has been organized for the purpose of seeking
capital appreciation through its trading activities in Securities as
described below, and to engage in all activities and transactions as
the Managing General Partners may deem necessary or advisable in
connection therewith, including, without limitation:
(i) To invest in, purchase or otherwise acquire and hold, sell,
trade, transfer, exchange or otherwise dispose or realize upon
securities of any and all types and descriptions (whether or
not readily marketable or subject to a resale restriction in
the absence of an effective registration statement under the
Securities Act, or an exemption from such registration
requirement) including, but not limited to, shares of capital
stock, preferred stock, bonds, notes, debentures, convertible
equity securities, convertible debt instruments, trust
receipts, mortgages, evidences of indebtedness, certificates
of deposit, certificates of interest or participation in any
profit-sharing agreements,
-8-
partnership or joint venture interests (including limited
partnership interests), collateral trust certificates, voting
trust certificates, currencies, commodities, fixed and/or
variable annuities, options, certificates, receipts, warrants,
futures contracts and other instruments representing rights to
receive, purchase, sell or subscribe for any of the foregoing
or representing any other rights or interest therein or in any
other property or assets, and any and all other interests,
certificates, instruments and documents whether now known or
hereafter devised which are or may hereafter be commonly known
or referred to as securities (all such items being herein
collectively referred to as Securities);
(ii) To sell Securities short and to cover such sales;
(iii) To sell or otherwise convey all or substantially all, or part,
of the Securities or other assets or property of the
Partnership;
(iv) To possess, transfer, mortgage, pledge, hypothecate, create or
suffer the creation of security interests in, or otherwise
effect transactions in and with, and to exercise all rights,
powers, privileges and other incidents of ownership and
possession with respect to, Securities held or owned by the
Partnership with the intention of preserving, protecting,
improving or enhancing the value thereof;
(v) To borrow or raise moneys and, from time to time, to issue,
accept, endorse, and execute promissory notes, drafts, bills
of exchange, warrants, bonds, debentures and other negotiable
or non-negotiable instruments and other evidences of
indebtedness, to borrow money for the purpose of paying the
purchase price of Securities, to finance the purchase of
Securities by securing the payment of any indebtedness by the
mortgage, pledge, conveyance, assignment in trust of, or the
creation of a security interest in, the whole or any part of
any property of the Partnership, whether at the time owned or
thereafter acquired;
(vi) To engage in arbitrage transactions, including, without
limitation, risk arbitrage, "riskless" arbitrage, hedge
arbitrage, option arbitrage,
-9-
international securities arbitrage and currency arbitrage in
connection with international securities arbitrage;
(vii) To the extent permitted by applicable law, to make loans to
one or more Limited Partners the repayment of which is
secured by a pledge of that Partner's Capital Account balance
and which must be repaid in full, with interest, on the next
Opening Date; and to have all other powers available to it as
a limited partnership under the Act and under the laws of
other jurisdictions in connection with the conduct of its
business and to carry out the purposes of the Partnership,
except as and to the extent expressly limited or prohibited
by this Agreement; and
(viii) To enter into, make and perform all contracts agreements and
other undertakings and to do all things necessary, advisable,
incidental or convenient to the carrying out of any of the
foregoing purposes and powers and for carrying out the intent
of this Agreement.
Notwithstanding the foregoing, the Partnership (A) shall not engage in any
activity in which a closed-end, non-diversified management investment company
registered under the Investment Company Act may not engage and (B) shall not,
unless consented to by 75% in Interest of the Limited Partners, (i) purchase
any Securities if to do so would require any General Partner or the
Partnership to register under the Commodity Exchange Act, (ii) carry on any
operations or conduct regular business as a broker-dealer, (iii) knowingly
perform any act which would subject any Limited Partner to liability as a
general partner in any jurisdiction, or (iv) make investments constituting
greater than 25% of the Partnership's Net Asset Value in "short" positions
(said Net Asset Value being determined as of the preceding Valuation Date).
Article 3. TERM OF THE PARTNERSHIP. The Partnership commenced on June
8, 1990 and shall continue until December 31, 2050 unless terminated earlier
pursuant to Article 17.
Article 4. PRINCIPAL PLACE OF OPERATION. The office of the Partnership
shall be at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other
place or places, from time to time, as may be specified in a notice given by
the Advisory General Partner to all the Limited Partners and the Managing
General Partners. For purposes of the Act, the Advisory General Partner
shall initially be the Partnership's agent for service of process. The
Managing
-10-
General Partners may appoint a successor agent for service of process from
time to time.
Article 5. FISCAL YEAR. The fiscal year of the Partnership shall be the
period ending on December 31st of each year, or if permitted by the
Commissioner of Internal Revenue, such other fiscal year as the Managing
General Partners shall determine from time to time but only with the consent
of a majority in Interest of the Limited Partners.
PARTNERS AND THEIR RIGHTS AND OBLIGATIONS
Article 6. CAPITAL CONTRIBUTIONS.
(a) Each Partner has contributed to the Partnership the amount of cash
set forth beside his or its name on SCHEDULE A hereto. Except as
specifically provided in this Article 6 or elsewhere in this
Agreement or in the Act, no Managing General Partner or Limited
Partner will be required to make any further contribution of cash or
other property to the Partnership.
(b) All Capital Contributions shall be made in cash.
(c) Upon any admission of one or more Additional Limited Partners to the
Partnership, additional Capital Contribution to the Partnership by
one or more existing Limited Partners or adjustment to the Partners'
Capital Accounts pursuant to Article 13, the Advisory General
Partner shall contribute to the capital of the Partnership cash in
such amount, if any, as is necessary for the Advisory General
Partner's Capital Account balance to equal the lesser of (i) l% of
the sum of the positive Capital Account balances of all of the
Partners or (ii) the greater of (a) $500,000 or (b) 0.2% of the sum
of the positive Capital Account balances of all of the Partners.
For as long as the Advisory General Partner retains its status as
such, it shall not liquidate its Interests held by it as Advisory
General Partner or accept any distribution if the Interests held
by the Advisory General Partner would thereby be less than the
amounts set forth in the preceding sentence. There shall not be any
minimum Capital Contribution requirements from the Managing General
Partners.
(d) Except as otherwise provided herein, and subject to applicable law
with respect to the rights of creditors of the Partnership, no
Partner shall have any right to demand or receive the return of his
Capital Contribution or Capital Account. No Partner shall be
entitled to
-11-
interest on his Capital Contribution or on the balance in his
Capital Account. No Limited Partner or Managing General Partner
shall have the right to receive property other than cash in return
for his Capital Contribution or Capital Account.
(e) Any Partner with a deficit in his Capital Account following the
distribution of proceeds in liquidation of the Partnership or his
entire interest in the Partnership shall be required to restore the
amount of such deficit to the Partnership by the end of the taxable
year of liquidation, or within ninety (90) days after the date of
such liquidation, whichever is later, which amount shall be applied
first to the payment of any then outstanding debts and liabilities
of the Partnership, and any excess shall be paid to the Partners in
proportion to their then respective positive Capital Account
balances. This provision shall not inure to the benefit of creditors
of the Partnership who extend nonrecourse loans to the Partnership.
Article 7. ADMISSION OF NEW PARTNERS: ADDITIONAL CAPITAL CONTRIBUTIONS
FROM EXISTING PARTNERS.
(a) The Managing General Partners may at any time admit, subject to the
provisions of this Agreement, one or more additional Managing
General Partners. The Advisory General Partner may on any Opening
Date admit one or more additional Advisory General Partners but only
with the consent of all of the Limited Partners.
(b) The names and addresses of the General Partners and the Interests
initially owned by each of them are set forth on SCHEDULE A to this
Agreement. The General Partners are listed separately as Managing
General Partners and the Advisory General Partner. The Managing
General Partners shall determine the number of persons to serve
as Managing General Partners; provided that initially there shall be
three Managing General Partners. Except as the Managing General
Partners shall otherwise determine, there shall not be any minimum
Capital Contribution required of a Managing General Partner. If at
any time a Managing General Partner resigns, is removed, dies,
becomes bankrupt or incapacitated, or retires, the remaining
Managing General Partners shall, within 90 days, call a meeting of
Managing General Partners for the purpose of determining to continue
the Partnership, without dissolution, and, in their discretion (but
subject to the requirements of Article 8(m) hereof) to elect an
additional Managing General
-12-
Partner or Managing General Partners to serve until their successors
are duly elected and admitted, or for the purpose of reducing the
number of Managing General Partners. Pending such determination to
continue the Partnership, the Partnership will continue without
dissolution. Only individuals may act as Managing General Partners,
and all General Partners who are individuals shall act as Managing
General Partners. Any General Partner which is a corporation,
partnership, trust, joint venture or association shall act as a
Advisory General Partner. Except as expressly provided in this
Agreement to the contrary, a Advisory General Partner as such shall
take no part in the management, conduct or operation of the
Partnership's business (other than in a capacity as Investment
Advisor) and shall have no authority in its capacity as a Advisory
General Partner to act on behalf of the Partnership or to bind the
Partnership except at the direction of the Managing General
Partners.
(c) Subject to applicable Federal and state securities and other laws,
with the consent of the Advisory General Partner, any Partner may
make an additional Capital Contribution to the Partnership on any
Opening Date. A Partner making such an additional Capital
Contribution shall provide written notice to the Advisory General
Partner at least ten (10) business days before the effective date of
the contribution stating the intended amount and effective date.
The amount of permitted contribution on any Opening Date shall be as
determined by the Advisory General Partner in its sole discretion.
The additional Capital Contribution shall be paid to the Partnership
no later than the close of business on the Opening Date. The
Advisory General Partner may designate, by providing written notice
to all Limited Partners at least fifteen (15) business days before
an Opening Date, a minimum dollar amount for additional Capital
Contributions. If such designation is made, such amount shall remain
the minimum until it is changed by a subsequent notice, and the
Advisory General Partner need not, but may, accept any additional
Capital Contribution from a Limited Partner for any amount which
is less than the minimum then in effect.
(d) As of any Opening Date, the Advisory General Partner, in its sole
discretion, may admit Additional Limited Partners upon the
contribution to the Partnership of an amount to be determined by the
Advisory General Partner.
-13-
(e) The Advisory General Partner may require, as a condition to the
admission of an Additional Limited Partner or to the acceptance of
an additional Capital Contribution from an existing Limited Partner,
that such Additional Limited Partner or such existing Partner, make
such representations and warranties and execute such instrument or
instruments as the Advisory General Partner may deem necessary or
desirable in connection therewith. Without limiting the foregoing,
in the case of admission of an Additional Limited Partner, the
Advisory General Partner shall require such new partner to execute a
written acceptance of all of the terms and provisions of this
Agreement.
(f) After the admission of an Additional Limited Partner or the
acceptance of an additional Capital Contribution from an existing
Limited Partner, the Advisory General Partner shall make any
required filings under applicable law and shall amend SCHEDULE A to
reflect such admission or additional Capital Contribution.
(g) The admission of an Additional Limited Partner or the acceptance of
an additional Capital Contribution from one or more existing
Partners shall not cause the dissolution or termination of the
Partnership.
(h) Notwithstanding any other provision of this Agreement and except as
required by the Act, the Advisory General Partner shall not permit
any Limited Partner to make an additional Capital Contribution (and
no Limited Partner shall be entitled to make such an additional
Capital Contribution) or admit any Additional Limited Partner to
the Partnership if such contribution or admission (i) would require
the Partnership to register the Interests under the Securities Act,
the Securities Exchange Act of 1934 or any state securities laws,
unless a majority of the Managing General Partners determine that
such registration is in the best interest of the Partnership, or
(ii) would cause the Partnership to be classified as an association
taxable as a corporation or a publicly traded partnership for
Federal income tax purposes.
Article 8. MANAGEMENT.
(a) Subject to the terms of this Agreement, the Act and the Investment
Company Act, the Partnership shall be managed by the Managing
General Partners, who will have complete and exclusive control over
the management, conduct and
-14-
operation of the Partnership's business, and, except as otherwise
specifically provided in this Agreement, the Managing General
Partners shall have the rights, powers and authority, on behalf of
the Partnership and in its name, to exercise all of the rights,
powers and authority of partners of a partnership without limited
partners under the Act. Without limiting the generality of the
foregoing, the Managing General Partners shall have all of the
powers and rights of a general partner under the Act including,
without limitation, the power on behalf and in the name of the
Partnership:
(i) To purchase (long, short or any combination thereof), or
otherwise acquire Securities and to hold, mortgage, pledge,
sell, exchange or otherwise dispose of Securities and any
other personal property; to make payment therefor in any
lawful manner; and to exercise, as owner or holder of any
Securities, any and all rights, powers and privileges in
respect thereof, including the assignment of proxies;
(ii) To lend money or Securities or to borrow money or Securities
for lawful Partnership purposes, and to give security
therefor upon such terms as the Managing General Partners
deem proper for the benefit of the Partnership;
(iii) To take any and all action and make any and all elections, as
is permitted for the Managing General Partners in this
Agreement;
(iv) To reform the Partnership in or to license or qualify the
Partnership to transact business in one or more jurisdictions
other than the Commonwealth if the Managing General Partners
determine that such action would be in the best interest of
the Partnership;
(v) To perform any act, to engage in any kind of activity, and to
execute, amend, deliver and perform contracts and other
instruments of any kind necessary to, or in connection with
or convenient or incidental to, the accomplishment of the
purposes of the Partnership, so long as said activities and
contracts may be lawfully carried on or performed by a
partnership under applicable laws and in accordance with this
Agreement;
-15-
(vi) If there is a determination by the Internal Revenue Service,
which in the opinion of counsel is likely to be sustained by
a court of competent jurisdiction, or if at any time in the
opinion of counsel there is a substantial risk that the
Partnership will or, at some future date, would be classified
as an association taxable as a corporation or a publicly
traded partnership for federal income tax purposes, the
Managing General Partners may take such steps as they deem
necessary or desirable to minimize the adverse tax
consequences of such classification including, without
limitation, to amend this Agreement to the extent necessary
to ensure that the Partnership will be classified as a
partnership that is not a publicly traded partnership or to
cause the Partnership or a successor entity to qualify as a
"regulated investment company" under the Code or to liquidate
the Partnership in a prompt and orderly fashion, all as
determined by the Managing General Partners in their sole
discretion;
(vii) To maintain accounts (including margin accounts) with brokers
and dealers; and to open, maintain and close bank accounts
and draw checks or other orders for the payment of moneys,
with such signatories as the Managing General Partners shall
determine from time to time;
(viii) To retain attorneys, accountants, consultants, custodians,
transfer agents and other independent contractors;
(ix) To execute in the name of and on behalf of the Partnership:
(1) the Investment Management Agreement between the
Partnership and AH&H and to execute such other investment
management or advisory agreement with any other investment
advisor selected by the Managing General Partners in
accordance with this Agreement; (2) any and all partnership
agreements, certificates, instruments and any documents
required by any buyer or seller from time to time in
connection with the acquisition, sale or ownership of any
Securities; and (3) any and all agreements and other
documents committing the Partnership with respect to options,
futures, puts, calls, trades on margin, borrowing from banks
and/or brokers, and otherwise using credit balances, lines of
credit, and overdraft privileges; and
-16-
(x) To maintain one or more offices within or without the
Commonwealth.
To the extent permitted under the Act and the Investment Company Act, the
Managing General Partners shall be entitled to delegate any such rights and
powers to the Advisory General Partner. The Managing General Partners may
contract on behalf of the Partnership with one or more banks, trust
companies, investment advisers or other Persons for the performance of such
functions as the Managing General Partners may determine, but subject always
to the Managing General Partners' continuing supervision, including, but not
by way of limitation, the investment and reinvestment of all or part of the
Partnership's assets and execution of portfolio transactions, and any or all
administrative functions. Subject to the provisions of the Investment
Company Act, the Advisory General Partner or an Affiliate of a General
Partner may act as an investment adviser to the Partnership and shall be
compensated for such services in accordance with the terms of the Investment
Management Agreement which may be executed by the Partnership and the
Advisory General Partner or any such Affiliate. The Managing General
Partners may also appoint agents to perform such other duties on behalf of
the Partnership as the Managing General Partners deem desirable.
(b) The Managing General Partners shall not be obligated to do or
perform any act or thing in connection with the Partnership not
expressly set forth herein. Each General Partner will devote such
time as such General Partner deems appropriate to the activities of
the Partnership and shall not be required to devote any minimum
amount of time to the affairs of the Partnership. Subject to the
requirements of the Investment Company Act, each of the Managing
General Partners, the Advisory General Partner or any of their
respective Affiliates may, for its own account, enter into, engage
in and conduct any business or ventures, independently or with
others, including without limiting the generality of the foregoing,
any business dealing with Securities, whether or not competitive
with the Partnership, and neither the Partnership, nor the Partners
thereof as such, shall have any right in and to such independent
ventures or the profits derived therefrom.
(c) The Managing General Partners may cause title to all or any portion
of the assets of the Partnership, including, without limitation,
title to the Securities, to be held in the name of a nominee or
trustee, in street name or in such other manner as the Managing
General Partners may, from time to time, deem advisable.
-17-
(d) Except as otherwise expressly provided herein, in all matters
relating to or arising out of the conduct of the operation of the
Partnership, the decision of a majority in number of the Managing
General Partners present at a meeting of the Managing General
Partners at which a quorum is present shall be the decision of the
Partnership; provided, however, with respect to any matter that the
Investment Company Act requires the approval of a specified
percentage of the Managing General Partners who are not "interested
persons" of the Partnership or requires the approval of the Limited
Partners, the decision of the Partnership shall be determined in
accordance with such requirements.
(e) Except as otherwise required by the Investment Company Act, at any
meeting of the Managing General Partners, a majority of the Managing
General Partners present in person or by telephone shall constitute
a quorum. Except as otherwise expressly required by the Investment
Company Act, the Managing General Partners may also act by a written
instrument signed by a majority of the Managing General Partners.
No single Managing General Partner shall have authority to act on
behalf of the Partnership or to bind the Partnership unless
appropriately authorized by the required vote of the Managing
General Partners. The Managing General Partners may elect a
Chairman who shall preside at meetings and such other agents or
officers of the Partnership as they may deem advisable to conduct
its business affairs.
(f) Except as provided in this Agreement, no Limited Partner who is not
also a General Partner shall take any part in the control or
management of the operation of the Partnership, nor shall any
Limited Partner (other than a Limited Partner who is also a General
Partner and is acting in his capacity as a General Partner) have any
authority or power to act for or on behalf of the Partnership in any
respect whatsoever. Under the circumstances provided by the
Investment Company Act, the Limited Partners shall have the right to
vote on the following matters relating to the business of the
Partnership, which vote shall in any case be taken at a meeting of
the Partners called and held pursuant to the provisions hereof:
(1) the election of Managing General Partners of the
Partnership when so required pursuant to Article 8(m) or the removal
of a Managing General Partner when permitted by the Investment
Company Act;
-18-
(2) the approval or termination of any Investment Management
Agreement or underwriting contract (which may be with the Advisory
General Partner or an affiliate of the Advisory General Partner);
(3) the approval or ratification of Accountants;
(4) changes in any fundamental investment objective, policy
or restriction to the extent such approval is required by the
Investment Company Act; and
(5) Any other matters that the Investment Company Act
requires to be approved by the Limited Partners of the Partnership.
(g) Subject to the limitations contained herein, the General Partners
are authorized to pay out of the assets of the Partnership all
legal, printing and other fees and expenses of operating and
maintaining the Partnership and of conducting the business of the
Partnership including, without limitation, all taxes, if any,
imposed on the Partnership and all expenses with respect to buying,
owning, holding and selling the Securities, including brokerage
expenses and legal fees and all other expenses relating to the
operation of the Partnership. Notwithstanding the foregoing, the
Advisory General Partner will pay (i) all of the accounting and
custodial fees and expenses incurred by the Partnership from and
after the effective date of this Agreement in connection with the
ongoing operation of the Partnership (including without limitation,
the fees and expenses associated with the preparation and furnishing
of reports to the Partners), (ii) all of the expenses of the
Partnership in connection with offerings of Interests from and after
the effective date of this Agreement and (iii) all of the expenses
of the Partnership in connection with redemptions of Interests from
and after the effective date of this Agreement.
(h) The Limited Partners acknowledge that decisions regarding
investments or potential investments involve the exercise of
judgment and the risk of loss. The Limited Partners authorize the
General Partners to exercise judgment in making decisions, including
without limitation, decisions to invest, decisions not to invest and
decisions as to the holding and disposing of investments. The
General Partners are authorized to reinvest all interest income and
cash dividends paid or declared on Securities held in the
Partnership's investment portfolio; provided, however, that the
-19-
General Partners may not reinvest interest income or dividends to
the extent that such funds are needed to make the distributions
required by this Agreement.
(i) Any obligation of a Partner to return money or other property paid
or distributed in violation of this Agreement or of applicable law
may be compromised by the General Partners without the consent of
the Limited Partners.
(j) The Partners acknowledge that the Advisory General Partner has
contributed certain amounts to the Partnership to enable the
Partnership to pay, or to reimburse Partners for the payment of, the
Partnership's legal fees and expenses in connection with the
organization and syndication of the Partnership and that the
Partnership has made the election allowed by Section 709(b) of the
Code with respect to all of its organizational expenses. The
Advisory General Partner shall be allocated all book and tax items
of the Partnership resulting from the use of such contributions
by the Partnership to pay such legal fees and expenses,
notwithstanding the fact that the Advisory General Partner has been
reimbursed for a portion of such expenses pursuant to the Second
Amended Agreement. Neither the contributions to be made by the
Advisory General Partner nor the special allocations to be made
to the General Partner pursuant to this Section 8(j) shall be taken
into account in determining the balance in the Advisory General
Partner's Tax Account or Capital Account for purposes of Articles
6(d), 11(f), 13(c), 13(d) and 13(e) and Articles 14 and 15.
(k) Subject to the rights of the Advisory General Partner set forth in
Article 6, a General Partner may also become a Limited Partner
without obtaining the consent of the Limited Partners and thereby
become entitled to all the rights of a Limited Partner to the extent
of the Limited Partnership interest so acquired. Such event shall
not, however, be deemed to reduce or otherwise affect any of the
General Partner's liability hereunder as a General Partner.
Termination of a person's status as a General Partner shall not
affect his status, if any, as a Limited Partner. A General Partner
shall not be entitled to any special payment from the Partnership
as a result of the termination of his status as General Partner.
-20-
(l) A Managing General Partner shall have no further right or power to
act as a Managing General Partner (except to execute any amendment
to this Agreement to evidence his withdrawal) if he:
(1) dies, becomes bankrupt or is incapacitated;
(2) voluntarily retires upon not less than 90 days' written notice
to the other Managing General Partners or the Advisory General
Partner unless such notice is waived;
(3) is removed (i) by the other Managing General Partners pursuant
to a vote taken at a meeting of the Managing General Partners
held in accordance with the provisions of Article 8(e) or (ii)
by the Limited Partners in accordance with the Investment
Company Act; or
(4) fails to be elected at a meeting of Limited Partners called for
such purpose, provided that such withdrawal shall not occur
until his successor has been duly elected and admitted to the
Partnership as a Managing General Partner, and provided,
further, that the failure of any Managing General Partner to be
reelected shall not cause a dissolution of the Partnership and
the business and operations of the Partnership shall be
continued by all remaining and successor Managing General
Partners.
(m) Between meetings of Partners, the Managing General Partners may
elect one or more additional Managing General Partners to fill
vacancies (whether or not created by an increase in the number of
Managing General Partners) in the number of Managing General
Partners. The number of Managing General Partners shall be fixed
from time to time by the Managing General Partners but shall be not
less than one. Subject to the provisions of Article 8(l), each
Managing General Partner shall serve as a Managing General Partner
until the next meeting of Partners called for the election of
Managing General Partners and until his respective successor is
duly elected and admitted. If at any time more than a majority of
the Managing General Partners serving as such shall not have been
elected at a meeting of Partners, then the Managing General Partners
shall as promptly as possible and in any event within 60 days cause
a meeting of Partners to be held for the purpose
-21-
of electing Managing General Partners (unless the Securities and
Exchange Commission shall by order extend such period) consistent
with the requirements of the Investment Company Act.
(n) Managing General Partners may receive compensation for their
services as Managing General Partners (as determined by the Managing
General Partners from time to time) and will be reimbursed for all
reasonable out-of-pocket expenses incurred in performing their
duties hereunder.
(o) The Advisory General Partner shall perform all duties imposed on a
"tax matters partner" of the Partnership by Sections 6221 through
6232 of the Code and shall make any and all filings as may be
necessary or appropriate in order to comply with any Securities Laws
(as defined in Article 24).
Article 9. LIABILITY OF PARTNERS.
(a) The General Partners shall have liability for the repayment,
satisfaction and discharge of the debts, liabilities and obligations
of the Partnership only as and to the extent provided by the Act
applicable to a general partner of a limited partnership which has
filed a Certificate thereunder.
(b) No Limited Partner, as such, shall be personally liable for the
obligations of the Partnership except to the extent provided by the
Act or by the deficit restoration provisions of Article 6(e).
Article 10. INDEMNIFICATION.
(a) No General Partner shall have any liability to the Partnership or to
any Partner for any loss suffered by the Partnership which arises
out of any action or inaction of any General Partner except with
respect to any matter as to which such General Partner shall have
been finally adjudicated in a decision on the merits to be liable to
the Partnership or its Partners by reason of wilful misfeasance,
gross negligence, bad faith or reckless disregard of such General
Partner's duties under this Agreement. Except with respect to the
obligations set forth in Sections 6(c) and (e), each General
Partner, each officer, director, partner, employee or agent of a
General Partner and each officer of the Partnership (the "Covered
Persons") shall be indemnified by the Partnership against any
losses,
-22-
judgments, liabilities, expenses and amounts paid in settlement of
any claims sustained by it in connection with the Partnership,
including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees
reasonably incurred by any Covered Person in connection with the
defense or disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have
been involved as a party or otherwise or with which such person may
be or may have been threatened, while in office or thereafter,
by reason of being or having been such a General Partner or any
other person serving in the capacities referenced above, except with
respect to any matter as to which such Covered Person's actions or
failure to act shall have been finally adjudicated in a decision on
the merits to constitute wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including counsel
fees so incurred by any such Covered Person (but excluding amounts
paid in satisfaction of judgments, in compromise or as fines or
penalties), may be paid from time to time by the Partnership in
advance of the final disposition of any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Partnership if it is
ultimately determined that indemnification of such expenses is not
authorized under this provision, provided that (a) such Covered
Person shall provide security for his undertaking, (b) the
Partnership shall be insured against losses arising by reason of
such Covered Person's failure to fulfill his undertaking, or (c) a
majority of the Managing General Partners who are disinterested
persons (as defined in Article 10(b)(1)) and who are not interested
persons (as that term is defined in the Investment Company Act)
(provided that a majority of such Managing General Partners then in
office act on the matter), or independent legal counsel in a written
opinion, shall determine, based on a review of readily available
facts (but not a full trial-type inquiry), that there is reason to
believe such Covered Person ultimately will be entitled to
indemnification.
(b) As to any matter disposed of (whether by a compromise payment,
pursuant to a consent decree or otherwise) without an adjudication
or a decision on the merits by a court, or by any other body before
which the proceeding was brought, that such Covered Person's actions
or
-23-
failure to act constituted wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office, indemnification shall be
provided if (i) approved as in the best interests of the
Partnership, after notice that the matter involves such
indemnification, by at least a majority of the Managing General
Partners who are disinterested persons and are not interested
persons (as defined in the Investment Company Act) (provided that a
majority of such Managing General Partners then in office act on the
matter), upon a determination, based upon a review of readily
available facts (but not a full trial-type inquiry) that such
Covered Person acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the
Partnership and such Covered Person's actions or failure to act did
not constitute wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
Covered Person's office, or (ii) there has been obtained an opinion
in writing of independent legal counsel, based upon a review of
readily available facts (but not a full trial-type inquiry) to the
effect that it appears that such indemnification would not protect
such Covered Person against any liability to which such Covered
Person would otherwise be subject by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. Any approval pursuant to
this Article 10(b) shall not prevent the recovery from any Covered
Person of any amount paid to such Covered Person in accordance with
this Article as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to
have been liable by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
(1) The right of indemnification hereby provided shall not
be exclusive of or affect any other rights to which any such Covered
Person may be entitled. As used in this Article 10, the term
"Covered Person" shall include such person's heirs, executors and
administrators, and a "disinterested person" is a person against
whom none of the actions, suits or other proceedings in question or
another action, suit or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this
Article shall affect any rights to indemnification to which
personnel
-24-
of the Partnership, other than General Partners and officers, and
other persons may be entitled by contract or otherwise under law,
nor the power of the Partnership to purchase and maintain liability
insurance on behalf of any person.
Article 11. WITHDRAWAL OR RETIREMENT OF GENERAL PARTNERS.
(a) Subject to the Advisory General Partner's giving to each of the
Managing General Partners and Limited Partners at least sixty (60)
days' prior written notice of its intention to retire after the
close of any calendar month, the Advisory General Partner may retire
from the conduct of the operation of the Partnership as of the close
of such specified calendar month; provided, however, that no such
withdrawal or retirement of the Advisory General Partner shall be
effective until the Managing General Partners have selected in
accordance with the terms of the Agreement a new Advisory General
Partner or have approved the dissolution of the Partnership. A
Managing General Partner may withdraw as a General Partner from the
Partnership upon delivery of notice to such effect delivered to the
Advisory General Partner or on such later date specified in such
notice.
(b) In the event of the Withdrawal or retirement of any General Partner,
such General Partner shall cease immediately to be a General Partner
and the full extent of his or its Interest in the Partnership shall
be converted to that of a Limited Partner therein (with the same
Capital Account as such General Partner had prior to his Withdrawal
or retirement), with the same rights granted a Limited Partner by
this Agreement. Neither the estate nor the representatives of such
converting General Partner shall have any interest whatsoever as a
General Partner in the Partnership.
(c) In the event of the Withdrawal or retirement of a General Partner,
the remaining General Partner(s) (if at that time there is more than
one General Partner) may continue the business and affairs of the
Partnership until the end of the term of the Partnership. The right
to continue the business of the Partnership shall not, without the
consent of AH&H or its legal representative, include the right to
use the name "AH&H" in any name under which the Partnership has done
or will do business.
-25-
(d) In the event that no Managing General Partner shall remain for the
purposes of electing whether to continue the business of the
Partnership as provided in this Article 11, then the Advisory
General Partner shall promptly call a meeting of the Limited
Partners to be held within 90 days of the date the last Managing
General Partner ceased to act in such capacity for the purpose of
determining whether to elect one or more successor Managing General
Partners who, if elected, and upon the assent of the Advisory
General Partner, will continue the business of the Partnership. For
the period of time from the date when the last acting Managing
General Partner shall have ceased to serve in such capacity until
the date of admission of one or more successor Managing General
Partners (if elected), the Advisory General Partner shall continue
the business and operations of the Partnership without dissolution
and shall be permitted to engage in the management, conduct and
operation of the business of the Partnership and, otherwise, to
exercise during such period all of the powers of the Managing
General Partners hereunder. If at the meeting called by the Advisory
General Partner pursuant to the foregoing provisions of this Article
11(d) the Partners shall determine not to elect one or more
successor Managing General Partners, then the Partnership shall
dissolve in accordance with Article 17 hereof and the assets of the
Partnership shall be distributed on dissolution pursuant to Article
18 hereof.
(e) In the event of the Withdrawal or retirement of the then sole
remaining General Partner, the Partnership shall be liquidated as
provided in Article 18 unless all of the Limited Partners consent to
designate one or more successor General Partners within 90 days of
such Withdrawal or retirement. Any such designee shall be admitted
as a successor General Partner only upon agreeing to be bound by the
provisions of this Agreement. The admission of such a successor
General Partner shall occur, and for all purposes shall be deemed to
have occurred, prior to the Withdrawal or retirement of its
predecessor.
(f) Upon its admission to the Partnership, a successor Advisory General
Partner shall contribute cash in such amount to the Partnership as
is necessary for the sum of the Advisory General Partners' Capital
Account balances to equal at least the lesser of (i) 1% of the sum
of the positive Capital Account balances of all of the Partners or
(ii) the greater of (a) $500,000 or (b) 0.2% of the
-26-
sum of the positive Capital Account balances of all of the Partners.
A successor Advisory General Partner or its predecessor shall make
such amendments to the Certificate and this Agreement and file for
recordation such amendments or other documents or instruments as are
necessary to reflect the termination of the interest of the
predecessor as a General Partner and the fact that the successor is
a successor Advisory General Partner, all without the consent of the
Limited Partners.
(g) A General Partner that Withdraws, retires or assigns its entire
Interest in the Partnership shall remain liable for obligations and
liabilities incurred by it before the effective time of its
Withdrawal, retirement or assignment, but shall not be liable as a
General Partner for any obligation or liability incurred on account
of the activities of the Partnership from and after the time such
Withdrawal, retirement or assignment shall have become effective.
Article 12. TRANSFERABILITY OF A LIMITED PARTNER'S INTEREST; SUBSTITUTED
LIMITED PARTNERS; WITHDRAWAL OF A LIMITED PARTNER
(a) No Limited Partner may voluntarily sell, assign, pledge, encumber,
hypothecate or otherwise transfer, including without limitation, a
transfer by will or the laws of intestacy (collectively, a
"disposition") all or any part of his or its Interest in the
Partnership without the prior written consent of the Advisory
General Partner in its sole discretion. Upon the Withdrawal of
any individual Limited Partner, the Advisory General Partner may,
subject to the requirements of the Investment Company Act, at its
election, redeem all of that Limited Partner's Interest from the
estate of the Limited Partner on any Opening Date and may treat such
Limited Partner as having tendered the Limited Partner's entire
Interest for purposes of Article 15(b). Any purported disposition
of an Interest (or portion thereof or interest therein) that is not
made in compliance with this Agreement shall be null and void and of
no force or effect whatsoever.
(b) A transferee of all or any part of a Limited Partner's Interest
shall be admitted to the Partnership as a Substituted Limited
Partner only upon (i) the written consent of the Advisory General
Partner, which consent the Advisory General Partner may withhold for
any reason
-27-
or no reason and may give subject to such terms and conditions as
the Advisory General Partner, in its sole discretion, may determine,
and (ii) compliance with the provisions of Article 24.
(c) In determining whether or not to consent to any proposed disposition
or proposed admission of a Substituted Limited Partner, the Advisory
General Partner may request such information from the parties to
such proposed disposition or from such proposed Substituted Limited
Partner as the Advisory General Partner, in its sole discretion,
considers relevant to its determination. Persons from whom
information is requested pursuant to this Article 12 shall furnish
the requested information to the Advisory General Partner.
(d) In the event of the Withdrawal of any Limited Partner, his or its
legal representatives shall have the status of an assignee of the
Limited Partner, unless and until the Advisory General Partner
shall, in its sole discretion, permit such legal representatives to
become a Substituted Limited Partner. The Withdrawal of a Limited
Partner shall not dissolve the Partnership if, on the date of such
Withdrawal, there remains at least one Limited Partner that is not a
General Partner. Nothing in this Article 12 shall otherwise affect
any rights or liabilities of the Partner who has Withdrawn that
arose prior to such Withdrawal.
CAPITAL ACCOUNTS, TAX ALLOCATIONS AND DISTRIBUTIONS
Article 13. CAPITAL ACCOUNTS.
(a) CAPITAL ACCOUNTS. The Partnership shall establish for each Partner
a capital account for income tax accounting purposes ("Tax Account")
and a capital account for Partnership accounting purposes ("Capital
Account"). The initial balance of a Partner's Tax Account and
Capital Account shall be the amount of cash contributed to the
Partnership by the Partner and shall be adjusted as provided in this
Article.
(b) ADJUSTMENTS TO TAX ACCOUNTS. The initial balance of the Tax Account
of each Partner shall be:
(i) Increased by (a) any cash contributed to the Partnership by
the Partner in addition to the initial Capital Contribution
made by the Partner;
(b) the Partner's distributive share of Partnership
-28-
taxable income and gains; and (c) the Partner's distributive
share of Partnership income exempt from Federal income
taxation; and
(ii) Decreased by (a) the amount of cash and the Partnership's
adjusted basis in other property distributed to the Partner;
(b) the Partner's distributive share of Partnership taxable
losses and deductions; and (c) the Partner's distributive
share of Partnership expenditures that are not deductible by
the Partnership in computing its taxable income or loss and
that are not properly treated as capital expenditures.
(c) ADJUSTMENTS TO CAPITAL ACCOUNTS. The initial balance of the Capital
Account of each Partner shall be:
(i) Increased by (a) any cash contributed to the Partnership by
the Partner in addition to the initial Capital Contribution
made by the Partner, and (b) the positive adjustments to such
Partner's Capital Account in accordance with Article 13(d),
13(e) and 13(f) below (including positive adjustments that
have been made pursuant to Article 13(d) and 13(e) of the
predecessor Second Amended Agreement); and
(ii) Decreased by (a) the amount of cash and the fair market value
of other property distributed to such Partner; (b) the
portion of the Advisory Fees and Allocations allocated
pursuant to Article 13(e) below; and (c) the negative
adjustments to such Partner's Capital Account in accordance
with Article 13(d) and 13(f) below (including negative
adjustments that have been made pursuant to Article 13(d) and
13(e) of the predecessor Second Amended Agreement).
(d) ADJUSTMENTS TO CAPITAL ACCOUNTS AS OF VALUATION DATES. As of each
Valuation Date, the Partnership shall determine its Adjusted Net
Asset Value and allocate the Book Loss or Book Profit, as the case
may be, for the Valuation Period that includes such Valuation Date
in accordance with this Article 13(d).
(i) Subject to Article 13(e), a Book Loss for any Valuation
Period shall be charged to the Partners' Capital Accounts pro
rata based upon the balances in such Capital Accounts
immediately before the applicable Valuation Date.
-29-
(ii) Subject to Article 13(e), a Book Profit for any Valuation
Period shall be credited to the Partners' Capital Accounts
based upon the balances in such Capital Accounts immediately
before the applicable Valuation Date.
(e) ALLOCATION OF ADVISORY FEES AND ALLOCATIONS. Notwithstanding Article
13(d), the special rules set forth in this Article 13(e) shall
govern the allocation of the Partnership's Advisory Fees and
Allocations.
(i) On each Valuation Date, the Fixed Management Fee payable on
or prior to such Valuation Date shall be allocated among the
Capital Accounts of each General and Limited Partners pro
rata based upon their Capital Account balances on such
Valuation Date.
(ii) Any Performance Allocation due to the Advisory General
Partner from the Partnership shall be satisfied by the
reallocation and transfer to the Capital Account of the
Advisory General Partner from the Capital Account of each
General Partner and Limited Partner the amounts determined as
set forth below:
(A) Any Performance Allocation shall be allocated to each
General and Limited Partner as of such Performance
Allocation Date in an amount equal to such Partner's
Allocation Amount. A General Partner's and Limited
Partner's Allocation Amount as of any Valuation Date
shall mean fifteen percent (15%) of the amount, if any,
by which (x) the sum of the adjustments to such
Partner's Capital Account pursuant to Article 13(d), net
of the portion of the Fixed Management Fee allocated to
such Partner's Capital Account pursuant to Article
13(e)(i), as of Valuation Dates included in the
Performance Allocation Period ending on such Performance
Allocation Date exceeds (y) the sum of (A) such
Partner's Shortfall, if any, for the immediately
preceding Performance Allocation Period plus (B) the sum
of such Partner's Base Amounts for Valuation Periods
included in the Performance Allocation Period ending on
such Performance Allocation Date. For purposes of
computing a Shortfall for a Partner who has been a
Partner for less than one year, the period beginning
-30-
on such Partner's admission to the Partnership and
ending on the Performance Allocation Date shall be
treated as the Performance Allocation Period. Any
reallocation and transfer to the Advisory General
Partner's Capital Account from the Capital Account of a
General Partner or Limited Partner as of a Performance
Allocation Date pursuant to this Article 13(e)(ii) shall
be made from allocations of Book Profit to such General
Partner or Limited Partner pursuant to Article 13(d) as
of the Valuation Dates included in the Performance
Allocation Period in reverse chronological order.
(B) Notwithstanding the foregoing, a General Partner's or
Limited Partner's Allocation Amount as of any
Performance Allocation Date occurring other than in
December shall mean (x) fifteen percent (15%) of the
amount, if any, by which (A) the sum of the adjustments
to such Partner's Capital Account pursuant to Article
13(d), net of the portion of the Fixed Management Fee
allocated to such Partner's Capital Account pursuant to
Article 13(e)(i), as of Valuation Dates included in the
period beginning on the first day of the immediately
preceding Performance Allocation Period (or the date of
the Partner's admission to the Partnership) and ending
on such Performance Allocation Date (without reduction
for any such amounts, if any, as were allocated to the
Partner pursuant to this Article 13(e)(ii) as of the
immediately preceding Performance Allocation Date)
exceeds (B) the sum of (1) such Partner's Shortfall for
the second preceding Performance Allocation Period plus
(2) the sum of such Partner's Base Amounts for Valuation
Periods included in the period beginning on the first
day of the immediately preceding Performance Allocation
Period and ending on such Performance Allocation Date
(treating such period as a single Performance Allocation
Period for purposes of computing such Partner's Base
Amounts for Valuation Periods included in such period),
minus (y) the amount, if any, that was reallocated and
transferred from such Partner's Capital Account to the
Advisory General Partner's Capital Account pursuant to
this Article
-31-
13(e)(ii) as of the immediately preceding Performance
Allocation Date. Any reallocation and transfer to the
Advisory General Partner's Capital Account from the
Capital Account of a General Partner or Limited Partner
as of a Performance Allocation Date pursuant to this
Article 13(e)(ii) shall be made from allocations of Book
Profit to such General Partner or Limited Partner
pursuant to Article 13(d) as of the Valuation Dates
included in the Performance Allocation Period in reverse
chronological order.
(C) In the event that the aggregate amount of the Partners'
Allocation Amounts with respect to any Performance
Allocation Period is less than the Performance
Allocation with respect to such Performance Allocation
Period, the remaining portion of the Performance
Allocation shall be allocated to the Advisory General
Partner. In the event that the aggregate amount of the
Partners' Allocation Amounts with respect to any
Performance Allocation Period is more than the
Performance Allocation with respect to such Performance
Allocation Period, the Advisory General Partner shall
adjust the amount of the Performance Allocation i.e.,
allocated and transferred from each Partner's Capital
Account to the Capital Account of the Advisory General
Partner in any manner that the Advisory General Partner
determines to be equitable and, in the absence of such a
determination, pro rata among the Partners on the basis
of their Allocation Amounts.
(f) COMPLIANCE WITH REGULATIONS. Notwithstanding any other provision of
this Agreement to the contrary, the foregoing provisions of Article
13 shall be construed so as to comply with the provisions of
Treasury Regulation 1.704-1.
Article 14. TAX ALLOCATIONS. Subject to Article 14(e) and 14(f) below
and the terms of the Investment Management Agreement, all items of income,
gain, loss and deduction (including items of income or gain which are not
subject to Federal income taxation and items which are not deductible or
properly treated as capital
-32-
expenditures for Federal income tax purposes) shall for tax purposes be
allocated among the Partners as follows:
(a) Except as otherwise provided in paragraph (c) below, Profit or Loss
(as defined below) which properly relates to an Accounting Period
shall be allocated to all Partners in proportion to their respective
Capital Account balances (determined on the basis of Capital Account
balances as of the beginning of the applicable Accounting Period).
(b) After all adjustments to Capital Accounts under Article 13(c) have
been made for the applicable Accounting Period and after all the
allocations under Article 13(e) and paragraph (a) above have been
made (but prior to making adjustments to take account of
distributions under Articles 15 and 18 made as of the same time or
as a result of the same event giving rise to such allocation), the
extent to which a Partner's Capital Account exceeds his Tax Account
("Positive Disparity") or the extent to which a Partner's Capital
Account is less than his Tax Account ("Negative Disparity") shall
be determined. Capital Gain and Capital Loss shall then be
allocated as follows:
(i) CAPITAL GAIN.
(A) A Capital Gain realized during any Accounting Period
within a fiscal year of the Partnership that commences
on the day following a Valuation Date and continues
through the next successive Valuation Date shall be
allocated at the end of the fiscal year (A) first to
those Partners whose Interests were completely redeemed
on the Valuation Date on which the Accounting Period
ends in proportion to the respective Positive
Disparities of such Partners, and (B) then to those
Partners whose Interests in the Partnership were
completely redeemed on a subsequent Valuation Date
during the fiscal year in proportion to the respective
Positive Disparities of such Partners. For purposes of
clause (B) of the preceding sentence, in the event that
there are multiple subsequent Valuation Dates during
the fiscal year on which the Interests of one or more
Partners were completely redeemed, the allocation of
Capital Gain shall be made separately with respect to
each such Valuation Date in chronological order.
-33-
(B) Capital Gain remaining after the allocations under
Article 14(b)(i)(A) have been made shall be allocated to
the remaining Partners who were Partners during such
period to the extent of and in proportion to the
respective Positive Disparities of such Partners.
(ii) CAPITAL LOSS
Capital Loss realized between any Valuation Date and the next
succeeding Valuation Date shall be allocated among the
Partners who were Partners during such period on the
following basis:
(A) Capital Loss realized during any Accounting Period
within a fiscal year of the Partnership's that commences
on the day following a Valuation Date and continues
through the next successive Valuation Date shall be
allocated at the end of the fiscal year (A) first to
those Partners whose Interests were completely redeemed
on the Valuation Date on which the Accounting Period
ends in proportion to the respective Negative
Disparities of such Partners, and (B) then to those
Partners whose Interests in the Partnership were
completely redeemed on a subsequent Valuation Date
during the fiscal year in proportion to the respective
Negative Disparities of such Partners. For purposes of
clause (B) of the preceding sentence, in the event that
there are multiple subsequent Valuation Dates during the
fiscal year on which the Interests of one or more
Partners were completely redeemed the allocation of
Capital Loss shall be made separately with respect to
each such Valuation Date in chronological order.
(B) Capital Loss remaining after the allocations under
Article 14(c)(ii)(A), have been made shall be allocated
to the remaining Partner who were Partners during such
period to the extent of and in proportion to the
respective Negative Disparities of such Partners.
(iii) NET CAPITAL GAIN OR NET CAPITAL LOSS. If after the foregoing
allocations of Capital Gain and Capital Loss, above, there
remains Capital Gain and/or Capital Loss realized between any
Valuation Date
-34-
and the next succeeding Valuation Date to be allocated, the
remaining Net Capital Gain or Net Capital Loss, as the case
may be, shall be allocated among all Partners who were
Partners during such period in the ratio that each Partner's
Capital Account balance (after all allocations pursuant to
Article 13(c)) bears to the balance of the Capital Accounts
of all Partners (after all allocations pursuant to Article
13(c)).
(c) If the Capital Gain allocated pursuant to Article 14(b)(i) is
insufficient to eliminate the Positive Disparity attributable to the
Capital Accounts of all Partners (including the General Partners)
whose Interests are completely redeemed during the fiscal year, or
the Capital Loss allocated pursuant to Article 14(b)(ii) is
insufficient to eliminate the Negative Disparity attributable to the
Capital Accounts of all Partners (including any General Partner)
whose Interests are completely redeemed during the fiscal year, then
Profit (and if necessary, items of income) which properly relates to
an Accounting Period shall first be allocated, pro rata, to those
Partners whose Capital Accounts have a Positive Disparity remaining
after the allocation pursuant to Article 14(b)(i) to the extent
necessary to eliminate such remaining Positive Disparity, or Loss
(and if necessary, items of deduction) which properly relates to an
Accounting Period shall first be allocated, pro rata, to those
Partners whose Capital Accounts have a Negative Disparity remaining
after the allocation pursuant to Article 14(b)(ii) to the extent
necessary to eliminate such remaining Negative Disparity.
(d) For purposes of this Article 14, the following terms shall have the
following meanings:
(i) "Accounting Period" shall mean the fiscal year of the
Partnership or, to the extent required, any period of shorter
duration from the end of the last preceding Accounting Period
until any of the Valuation Dates referred to in Article
13(d), above.
(ii) "Capital Gain" or "Capital Loss' shall mean the gain or loss
recognized by the Partnership for Federal income tax purposes
attributable to a capital asset, including the gain or loss
attributable to a regulated futures contract, as
-35-
defined by Section 1256 of the Code, and any other asset the
recognition of gain or loss with respect to which, for
Federal income tax purposes, is not dependent upon the sale
or other disposition thereof.
(iii) "Net Capital Gain" shall mean the excess of Capital Gain over
Capital Loss.
(iv) "Net Capital Loss" shall mean the excess of Capital Loss over
Capital Gain.
(v) "Profit" or "Loss" shall mean the net income or net loss of
the Partnership (other than Capital Gain or Capital Loss), as
determined in accordance with the principles employed by the
Partnership for Federal income tax purposes, exclusive of any
organizational or syndication expenses that are specially
allocated to the General Partner pursuant to Article 8(j) and
without reduction for any fees under the Investment
Management Agreement.
(e) ACCOUNTING CONVENTIONS. To determine possible varying interests of
Partners during a taxable year, the Partnership shall use the
interim closing of the books method, and all profit, gain or loss
(including each item of income or expense) shall be allocated as
realized or accrued by the Partnership.
(f) COMPLIANCE WITH CODE AND REGULATIONS. Notwithstanding any
provisions of this Agreement to the contrary, the foregoing
provisions of Article 14 shall be construed so as to comply with the
provisions of Section 706 of the Code and the Treasury Regulations
thereunder and Treasury Regulation Section 1.704-1.
Article 15. DISTRIBUTIONS PRIOR TO LIQUIDATION.
(a) Except as provided in this Article 15, the Managing General Partners
shall have complete discretion in the timing and amounts, if any, of
distributions made prior to liquidation of the Partnership. Any
distributions not provided for in this Article 15 shall be made pro
rata to the Partners in proportion to their respective Capital
Account balances as of the last Valuation Date.
(b) As of each Valuation Date in March, June, September and December of
each year (commencing with the Valuation Date in March 1996), the
Partnership shall offer to redeem such percentage of the Interests
in the
-36-
Partnership held by Limited Partners as a majority of the Managing
General Partners shall determine to be in the best interests of the
Partnership, provided that such offer shall not be for less than the
minimum percentage of Interests nor more than the maximum percentage
of Interests that is permitted by the Investment Company Act. The
redemption price shall, unless otherwise permitted by the Investment
Company Act, be the pro rata share on the basis of the Capital
Account balances of Net Asset Value of the Partnership represented
by the Interests accepted for redemption as of the Valuation Date
immediately preceding the Opening Date. Any request to redeem
Interests of a Limited Partner in whole or in part pursuant to this
Article 15(b) must be submitted to the Advisory General Partner at
least 10 calendar days prior to the Valuation Date immediately
proceeding such Opening Date. The Partnership shall comply with
such notice requirements and any other procedural requirements for
the redemption of Interests by the Partnership as shall be necessary
to comply with the Investment Company Act. If the Investment
Company Act shall be amended or interpreted by a court or the
Securities and Exchange Commission at any time to alter the
requirements imposed upon the Partnership to permit redemptions of
the Interests, this Article 15(b) shall be automatically amended to
the extent necessary to comply with such requirements. If Limited
Partners tender for redemption a greater percentage of Interests
than the Partnership has offered to redeem, such tendered Interests
shall be redeemed pro rata on the basis of the Capital Account
balances represented by Interests tendered, unless the Managing
General Partners determine that some other method of allocation is
permitted by the Investment Company Act and is in the best interests
of the Partnership. The Partnership shall not suspend or postpone a
redemption offer except pursuant to a vote of a majority of the
Managing General Partners, including a majority of the Managing
General Partners who are not interested persons of the Partnership
(as defined in the Investment Company Act), and only: (A) for any
period during which the New York Stock Exchange or any other market
in which the Securities owned by the Partnership are principally
traded is closed, other than customary weekend and holiday closings,
or during which trading in such market is restricted; (B) for any
period during which an emergency exists as a result of which
disposal by the Partnership of Securities owned by it is not
reasonably practicable, or during which it is not reasonably
practicable for the Partnership fairly to determine its
-37-
Net Asset Value; or (C) for such other periods as the Securities and
Exchange Commission may by rule or order permit. The Partnership may
deduct from any distribution to a Limited Partner pursuant to this
Article 15(b) a fee to compensate the Partnership for its or its
agent's expenses in connection with such redemption offer on the
following basis (which expenses shall be specifically allocated to
such Limited Partner for federal income tax purposes): if the
applicable Valuation Date is not in December and such Limited
Partner was not a Limited Partner on April 1, 1992 and has been a
Limited partner for two (2) years or less as of such Valuation Date,
such Limited Partner shall pay to the Partnership, out of the
proceeds of such redemption unless waived by the Advisory General
Partner in its sole discretion, a redemption fee equal to (a) if
such Limited partner has been a Limited Partner for one (1) year or
less as of the applicable Valuation Date, one percent (1%) of the
proceeds of such redemption or (b) if such Limited Partner has been
a Limited Partner for more than one (1) year but not more than two
(2) years as of the applicable Valuation Date, one-half of one-half
percent (.50%) of the proceeds of such redemption. A Limited
Partner may not cause a partial redemption of his Interest to the
extent that such Limited Partner's Capital Account balance
immediately after such partial redemption would be less than the
minimum Capital Account requirements established by the Managing
General Partners from time to time.
(c) In its sole discretion under extenuating circumstances, the Advisory
General Partner may at any time remit Partnership funds to or on
behalf of a Limited Partner (provided that such Limited Partner is
not an affiliated person or interested person (as defined in the
Investment Company Act) of the Partnership) as an advance against
the proceeds of a complete or partial redemption of such Limited
Partner's Interest made in accordance with Article 15(b) as of the
next following Opening Date. Such advance shall be a recourse loan
by the Partnership to such Limited Partner secured by such Limited
Partner's Interest, shall bear interest at a commercially reasonable
rate determined by the Advisory General Partner and shall be
repayable in full on the next Opening Date whether or not the
Limited Partner's Interest is redeemed on such Opening Date in
accordance with Article 15(b) of this Agreement.
-38-
(d) Notwithstanding any other provision of this Article: (i) no
distribution may be made pursuant to this Article to the extent the
Advisory General Partner determines that the distribution would be
likely to cause the Partner all or a portion of whose Interest is
being redeemed to have a negative Capital Account balance; and
(ii) any Limited Partner who receives proceeds of a redemption in
excess of such Limited Partner's positive Capital Account balance as
of the time he receives those proceeds shall return the excess to
the Partnership within 10 days after the Managing General Partner
delivers a Notification to him requesting the return of such excess;
(e) Each General Partner may withdraw amounts from its Capital Account
as of any Valuation Date in June or December; provided that all
liabilities, contingent or otherwise, of the Partnership, except any
liability to Partners on account of their Capital Contributions,
have been paid or there remains property of the Partnership, in the
reasonable opinion of the Advisory General Partner sufficient to pay
them; and provided further that a Managing General Partner shall
withdraw amounts from his Capital Account only with the consent of
the Advisory General Partner. The Advisory General Partner may not
withdraw funds pursuant to this paragraph to the extent that such
withdrawal would reduce its Capital Account balance as of the
Opening Date following the applicable Valuation Date below the
lesser of (i) 1% of the sum of the positive Capital Account balances
of all of the Partners as of such Opening Date or (ii) the greater
of (a) $500,000 or (b) 0.2% of the sum of the positive Capital
Account balances of all of the Partners.
Article 16. REMOVAL OF LIMITED PARTNERS. The Advisory General Partner,
in its sole discretion and without the consent of the Limited Partners, may,
effective as of any Valuation Date, require any Limited Partner to tender his
entire Interest as a whole for redemption pursuant to Article 15(b) in the
event that the Limited Partner does not maintain a minimum amount in its
Capital Account as shall be determined from time to time by the Managing
General Partners and notified to the Limited Partners, provided that no new
minimum Capital Account requirement shall be in effective until 90 days after
notice to the Limited Partners.
-39-
TERMINATION
Article 17. DISSOLUTION. The Partnership shall dissolve and terminate
upon the earliest to occur of (i) the expiration of the term specified in
Article 3, (ii) the Withdrawal or retirement of a sole remaining Managing
General Partner or Advisory General Partner unless all of the Limited
Partners appoint a successor Managing General Partner or Advisory General
Partner, as the case may be, in accordance with Article 11, (iii) such time
as the Managing General Partners shall determine, in writing, to liquidate
and dissolve and not to reconstitute the Partnership, (iv) the written
election of at least 75% in Interest of the Limited Partners to liquidate and
dissolve and not to reconstitute the Partnership, or (v) the occurrence of
any event requiring the dissolution of the Partnership under the Act.
Article 18. TERMINATION.
(a) Upon termination of the Partnership, the Partnership shall be
liquidated in an orderly manner. The Advisory General Partner shall
be the liquidator ("Liquidator") to wind up the affairs of the
Partnership pursuant to this Agreement; provided, however, that if
there is no remaining Advisory General Partner, then a majority in
interest of the Limited Partners shall vote to appoint a Liquidator
to act in place of the Advisory General Partner. Immediately prior
to the final distribution of Partnership assets, the Liquidator
shall cause a valuation of the Partnership's investment portfolio to
be made. In connection therewith, the Liquidator is authorized to
convert the non-cash assets of the Partnership into cash to the
extent determined by the Liquidator, in its sole discretion. The
Liquidator is further authorized to sell, exchange or otherwise
dispose of the assets of the Partnership, or (subject to Article
19(b)) to distribute Partnership assets in cash or in kind, or
partly in cash and partly in kind, in such reasonable manner as the
Liquidator shall determine. The Liquidator shall also take all
action necessary to deregister the Partnership under the Investment
Company Act. The expenses incurred by the Liquidator shall be borne
by all the Partners in proportion to their respective Capital
Accounts. The Liquidator shall endeavor to dispose of or distribute
all Partnership assets within six (6) months of termination, but
shall not be bound to do so nor be liable in any way to any Limited
Partner for any loss attributable to any of his acts or omissions
taken in good faith in connection with the winding up of the
Partnership and distribution of the assets. The
-40-
Liquidator may consult with legal counsel and accountants with
respect to winding up the Partnership and distribution of the assets
and shall be justified in acting or omitting to act in accordance
with the advice or opinion of such legal counsel or accountants.
(b) Upon dissolution and termination of the Partnership, its assets
shall be applied in the following order of priority:
(i) To the payment of the debts and liabilities of the
Partnership and the expenses of liquidation;
(ii) To the setting up of any reserves which the Liquidator shall
deem reasonably necessary for contingent or unforeseen
liabilities or obligations of the Partnership or of the
Liquidator arising out of or in connection with the
Partnership or its liquidation (such reserves shall be paid
over by the Liquidator to an escrow agent, to be held by it
for the purpose of disbursing such reserves in payment of any
of the aforementioned contingencies, and at the expiration of
such period as the Liquidator shall deem advisable to
distribute the balance thereafter remaining in the manner
provided in the following subdivisions hereof);
(iii) To the repayment of the balance remaining due on any loans or
advances by the Partners to the Partnership, together with
the interest accrued thereon, if any, but if the amount
available for such repayment shall be insufficient, then to
all of the Partners whose loans or advances have not been
repaid so that each such Partner shall receive the same
percentage of his loan or advance not repaid;
(iv) To the payment of any management fee due the Investment
Advisor under an Investment Management Agreement; and
(v) To the payment to the Partners of their then respective
positive Capital Account balances after all Capital Account
adjustments.
(c) None of the General Partners or their respective assets shall be
subject to any personal liability for repayment of the capital
contributed or amounts, whether positive or negative, in the Capital
Account of any Limited Partner, except to the extent required by
law.
-41-
(d) After the dissolution of the Partnership and the
distribution of its assets, the Liquidator shall execute,
acknowledge and cause to be filed a certificate of cancellation of
the Partnership's Certificate of Limited Partnership.
(e) Within six (6) months after the termination of the
Partnership, the Liquidator shall arrange for the preparation of a
report from the Partnership with respect to final payments on
liquidation and shall furnish to each Limited Partner a copy of
such report upon its completion.
MISCELLANEOUS
Article 19. CERTAIN LIMITATIONS ON WITHDRAWAL AND DISSOLUTION.
(a) Each Partner, including each Limited Partner, shall be
entitled to receive for or on account of any permitted redemption
or withdrawal of such Partner, dissolution of the Partnership or
otherwise only such cash or other property as is expressly provided
in this Agreement in such event, and no Partner shall have any
right to receive the fair value of his or its interest in the
Partnership determined in any manner other than as expressly
provided in this Agreement or to receive any other amount, property
or assets not expressly provided in this Agreement.
(b) Upon a permitted redemption or withdrawal of a Partner or
dissolution of the Partnership and subject to the requirements of
the Investment Company Act, the Advisory Partner may, in its sole
discretion, distribute to any Partner and such Partner shall accept
the distribution of an asset in cash or in kind, or partly in cash
and partly in kind; provided, however, that the Partnership shall
make no distribution in kind to a Limited Partner if such
distribution is in excess of 50% of such Partner's Capital Account
prior to the distribution. With respect to any distribution in kind
by the Partnership, the date of determination of the value (in
accordance with Article 20) of any Securities so distributed shall
be such date as the Advisory General Partner shall, in its sole
discretion, select, which date shall be within ten (10) days of the
date of any such distribution.
-42-
Article 20. PORTFOLIO VALUATION.
(a) As of any Valuation Date and as of the Friday of each
week, the net fair market value of the Partnership's assets ("Net
Asset Value") shall be determined. The Net Asset Value shall
include the total of realized and unrealized profits, gains and
losses, all dividends, interest and other income and shall be net
of all Partnership expenses and deferred costs, whether paid or
accrued (other than those allocable to the General Partner pursuant
to Article 8(j)); in determining the Net Asset Value of the
Partnership for purposes of Article 15(b), the admission of any new
Limited Partners or additional contributions to this Partnership,
Net Asset Value shall be adjusted to reflect an accrual for the
Advisory Fees and Allocations that is payable by the Partnership on
the relevant Valuation Date; provided further that if the relevant
Valuation Date is not a date on which any Performance Allocation is
payable or determined, the Net Asset Value shall be adjusted to
reflect an accrual equal to the Performance Allocation that would
be payable if the relevant Performance Allocation Period ended on
such Valuation Date.
(b) Subject to any procedures as the Managing General Partners
adopt from time to time, the fair market value of Securities held
in the Partnership's investment portfolio shall be determined by
the Advisory General Partner in good faith using reasonable methods
of valuation that are consistent with industry practice. In making
its determination, the Advisory General Partner may, but is not
required to, value Securities at their last closing "bid" price
with respect to a "long" position and their last closing "asked"
price with respect to a short position. In the event that the
transfer of Securities by the Partnership is restricted in any
manner, the Advisory General Partner may, subject to such
procedures as the Managing General Partners shall adopt from time
to time, may value the Securities at such lesser amount as it
deems, in its sole and absolute discretion, reflects the value of
such Securities after taking into account the restrictions
applicable to their transfer by the Partnership.
(c) The value of the Partnership portfolio as of any Valuation
Date shall be reduced by all accrued but unpaid expenses of the
Partnership with respect to the particular valuation period, all as
determined by the Advisory General Partner in its discretion.
-43-
Article 21. BOOKS AND RECORDS. The books and records of the Partnership
shall be kept on an accrual basis and shall be maintained on a basis
appropriate for Federal income tax purposes consistently applied, and shall
show all revenues, costs, expenditures, assets, liabilities, profits and
losses, if any, of the Partnership, as well as all profits, losses, and
gains. Such books and records shall include a copy of the Certificate and
this Agreement and any and all amendments thereto.
Article 22. FINANCIAL REPORTS. The following financial reports and
statements shall be furnished to the Partners:
(i) As soon as available and in any event
(unless the Advisory General Partner has not received
necessary information from third parties) no later than
thirty (30) days prior to the date required for the timely
filing of an individual Partner's Federal income tax return
on a calendar year basis, a report prepared by the
Partnership or its accountants indicating to each Partner
his share in the profits and losses of the Partnership for
such year for Federal income tax purposes.
(ii) As soon as available and in any event within
sixty (60) days after each Valuation Date, financial
statements of the Partnership consisting of a balance sheet
in which the assets are valued in accordance with Article 20
hereof, and a statement of income and statement of cash flow
prepared in accordance with general accepted accounting
principles. The cost of the preparation of such financial
statements shall be paid by the Advisory General Partner and
not out of the Partnership's assets. At such time the
Advisory General Partner shall also provide the Partners
with such narrative and other financial and related
information as it deems appropriate. All such financial
statements and information shall be prepared in accordance
with generally accepted accounting principles consistently
applied but need not be audited.
(iii) Within the time period presented by the
Investment Company Act, such other reports and audited and
unaudited financial statements as shall be required under
the Investment Company Act.
Article 23. INSPECTION OF BOOKS AND RECORDS. The books and records of
the Partnership shall be located at its principal place of business and
shall be available for inspection by the Partners and their authorized
representatives, who may make copies thereof
-44-
and take extracts therefrom during usual business hours in accordance with
the Act. Each Partner shall bear all expenses incurred in any such
examination made for or on his behalf, and covenants that in the exercise of
his rights hereunder, he will cause no unreasonable interference with or
disruption of the business and operations of the Partnership. All decisions
as to accounting principles and elections, whether for book or tax purposes
(and such decisions may be different for each such purpose) shall be made by
the Advisory General Partner.
Article 24. PARTNER'S INVESTMENT INTENT AND TRANSFER OF INTERESTS.
(a) Each of the Partners, by execution of this Agreement,
hereby acknowledges and represents, and any transferee of any
Interest and any Additional Limited Partner or Substituted Partner
by execution of an appropriate supplement to this Agreement shall
be required to acknowledge and represent, that he is acquiring his
respective interest in the Partnership for his own account, for
investment and not with a view to, or in connection with, any sale,
distribution or fractionalization thereof within the meaning of
either (i) the Securities Act, (ii) the Securities Exchange Act of
1934, as amended, or (iii) any applicable state securities laws
which may be or become applicable (said laws in the immediately
preceding clauses (i), (ii) and (iii) being referred to in this
Agreement as "Securities Laws").
(b) No sale, transfer, assignment, exchange or other
disposition or transfer of any Interest in the Partnership may be
made except in compliance with the Securities Laws and rules and
regulations of any governmental authority with jurisdiction over
such disposition, and the Advisory General Partner may require as a
condition of any transfer of such interest that the transferor
and/or the transferee (i) assume all costs incurred by the
Partnership in connection with any transfer, (ii) furnish a written
opinion of legal counsel satisfactory to the Partnership, both as
to such legal counsel and opinion, that the proposed transfer is
exempt from the registration and other applicable provisions of the
Securities Laws and otherwise complies with law, and (iii) execute
such instrument or instruments as the Advisory General Partner may
deem necessary or desirable in connection therewith. Without
limiting the foregoing, in the case of admission of a new Partner,
the Advisory General Partner shall require such new Partner to
execute (and it shall be a
-45-
precondition to such admission that such new Partner execute) a
written acceptance and adoption of all of the terms and provisions
of this Agreement, as then amended.
(c) Any sale, exchange or other disposition or transfer in
contravention of any of the provisions of this Article 24 or other
provisions of this Agreement shall be void and ineffectual, and
shall not bind the Partnership or be recognized by it.
Article 25. AMENDMENTS.
(a) This Agreement may be amended or modified by the Advisory
General Partners with the consent of 75% in Interest of the Limited
Partners, PROVIDED, HOWEVER, that (i) no amendment shall increase
the liability or obligations of any Partner without the written
consent of such Partner, (ii) except as otherwise specifically
provided herein, no amendment shall reduce any Partner's rights to
share in the Partnership's cash flow, net cash proceeds, or
profits, losses and credits without the written consent of such
Partner, (iii) this Article 25 may not be amended without the
consent of all of the Partners and (iv) no consent is required with
respect to an amendment (A) to SCHEDULE A hereto to reflect the
admission of new Partners, additional Capital Contributions by
existing Partners, the redemption of Interests or any change in a
Partner's Interest in the Partnership to the extent authorized
hereby, (B) to the allocation provisions of Articles 13 and 14 to
the extent that, in the opinion of counsel to the Partnership, such
amendment is recommended to ensure that the allocations comply with
Regulations (including any proposed Regulations) issued under
Sections 704(b), 704(c) or 706 of the Code, or (C) to delete or add
any provision recommended by counsel to be so deleted or added by
any state, Federal or other governmental "Blue Sky" or securities
commission, agency or official provided that such amendment does
not adversely affect the Partners.
(b) In addition to any amendments otherwise authorized hereby,
this Agreement may be amended from time to time by the Advisory
General Partners without the consent of any of the Limited Partners
(1) to add to the representations, duties or obligations of the
General Partners or surrender any right or power granted to the
General Partners herein, (2) to cure any ambiguity or correct or
supplement any provisions hereof which may be inconsistent with any
other provision hereof, or correct
-46-
any printing, stenographic or clerical errors or omissions; or (3)
to conform to any safe harbor provisions which would preserve the
substantial economic effect or alternative economic effect
characterization of the allocations of profits and losses; (4) to
provide any necessary information regarding the Limited Partners,
or any additional or successor General Partner; provided, however,
that no amendment shall be adopted pursuant to this Article 25(b)
unless such amendment would not alter the Interest of a Partner in
profits or losses, rights to redemptions or rights to distributions
and such amendment is not materially adverse to the interests of
the Limited Partners, and such amendment would not, in the opinion
of counsel for the Partnership, alter, or result in the alteration
of, the limited liability of the Limited Partners or the status of
the Partnership as a partnership that is not a publicly traded
partnership for federal income tax purposes.
(c) Upon the adoption of any amendment to this Agreement, the
amendment shall be executed by the Advisory General Partner on
behalf of itself and all the Managing General Partners and Limited
Partners and, if required by the Act, an amendment to the
Certificate shall be filed in the proper records of the
Commonwealth and of each jurisdiction in which recordation is
necessary for the Partnership to conduct business or to preserve
the limited liability of the Limited Partners.
Article 26. PROHIBITION OF CERTAIN TRANSFERS; TAX ELECTIONS.
(a) Notwithstanding any other provision of this Agreement, no
sale or exchange of all or any part of any Partner's Interest in
the Partnership may be made if (i) the Interest sought to be sold
or exchanged, when added to the total of all other Interests in the
Partnership sold or exchanged within the period of twelve
consecutive months prior to the proposed date of sale or exchange,
could, in the opinion of tax counsel to the Partnership, result in
the termination of the Partnership under Section 708 of the Code or
the treatment of the Partnership as a publicly traded partnership
under Section 7704 of the Code or (ii) the initial offering price
of each Interest held by any Limited Partner after such transfer
would be less than $20,000. In no event may any Interest be
subdivided for resale into Interests whose initial offering price
would be less than $20,000.
-47-
(b) The Advisory General Partners, in its sole discretion,
shall make all tax elections on behalf of the Partnership. In the
event that the Partnership redeems all or any portion of a
Partner's interest in the Partnership, or a Partner transfers all
or any portion of his interest in the Partnership to a new Partner,
the Partnership (i) shall, if determined by the Managing General
Partners, file an election under Section 754 of the Code (or any
successor statute) so that the basis of the Partnership property
may be adjusted as a result of such redemption or transfer in
accordance with Section 734 or Section 743 of the Code, and (ii) if
such an election is made, shall for tax purposes, so adjust the
basis of the property held by the Partnership. No Partner shall
have the right to demand the benefit of any election under Code
Section 754.
Article 27. GENERAL PROVISIONS.
(a) NOTICE. For the purposes of this Agreement, all notices
given hereunder shall be made in writing either by delivering such
notice in person or by mailing such notice, by registered or
certified mail, return receipt requested, postage and registration
or certification fees prepaid, or by telecopier or other facsimile
transmission (i) if to the Advisory General Partner or the
Partnership, care of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: President and (ii) if to any
Managing General Partner or any Limited Partner, at its respective
address set forth below its name on SCHEDULE A attached hereto.
Any party may change its address for purposes of this Article by
written notice given in accordance with this Article 27(a). All
notices will be deemed given three (3) days after mailing the
notice or upon delivery if hand delivered or if sent by telecopier
or by other facsimile transmission.
(b) POWER OF ATTORNEY. Each of the Limited Partners hereby
constitutes and appoints each General Partner and each Managing
General Partner hereby constitutes the Advisory General Partner and
each other Managing General Partner, and each of them, to be its
true and lawful attorney(s) in its name, place and stead, to make,
execute, sign, acknowledge and file:
(i) The Certificate of Limited Partnership filed
pursuant to the Act, this Agreement and any other document,
instrument or agreement contemplated thereby;
-48-
(ii) Any other certificate or instrument which
may be required to be filed by the Partnership under the
laws of the Commonwealth of Massachusetts, or in order to
qualify as a foreign limited partnership doing business in
any other state or jurisdiction as required in connection
with the Partnership business;
(iii) Any and all amendments, modifications or
restatements of the instruments described in the preceding
subparagraphs (i) and (ii), including without limitation,
amendments, modifications or restatements necessary to admit
Partners to the Partnership, to reflect any change in or
transfer of a Partner's interest in the Partnership, or
relating to the admission or increased contribution of a
Partner;
(iv) Any other instruments determined by the
General Partner to be necessary or desirable in connection
with the proper conduct of the business of the Partnership
and cancellation of its Certificate of Limited Partnership
as amended from time to time.
It is expressly understood and intended by each of the Partners that the
grant of the foregoing power of attorney under this Article 27(b) is coupled
with an interest and is irrevocable and shall survive the death or incapacity
of each Partner. Such power of attorney shall survive the delivery of an
assignment or other attempted transfer by any of the Partners of the whole or
any portion of his Partnership interest, except that where an assignee or
transferee of such Interest has been approved as a substitute Limited
Partner, then such power of attorney of the assignor of the Limited Partner
shall survive the delivery of such assignment or transfer for the sole
purpose of enabling the General Partner(s) to execute, acknowledge and file
any and all instruments necessary to effect such substitution. Each Partner
shall execute and deliver to the Advisory General Partner within five (5)
days after receipt of the Advisory General Partner's request therefor such
further designations, powers-of-attorney and other instruments as the
Advisory General Partner deems necessary or appropriate to carry out the
terms of this Agreement.
(c) CONFIDENTIALITY. Each Partner acknowledges that it will
have access to confidential information of the Partnership
concerning its investments, strategies, Partners and related
matters. Each Partner hereby agrees that it will hold all such
information in strict confidence and will not disclose any such
confidential information to third parties.
-49-
(d) ADDITIONAL DOCUMENTS. Each Partner hereby agrees to
execute all certificates, counterparts, amendments, instruments or
documents that may be required by the laws of the various states
and other jurisdictions in which the Partnership operates or
desires to operate to conform with such laws governing limited
partnerships.
(e) COUNTERPARTS. This Agreement or any amendment or
supplement thereto may be signed in any number of counterparts,
each of which shall be an original, but all of which taken together
shall constitute one Agreement.
(f) LOANS AND INTEREST. No interest shall be paid on the
Capital Contributions of the Limited Partners. Nevertheless, any
Limited Partner may make unsecured loans to the Partnership on
terms to which such lending Limited Partner and the General
Partners agree.
(g) NO SPECIFIC SHARE. The Partners shall have no share in or
right to a particular share of the Partnership assets, except as
expressly provided in this Agreement.
(h) TABLE OF CONTENTS AND HEADINGS. The table of contents and
the headings are inserted in this Agreement for convenience only
and shall not control or affect the meaning or construction of any
of the provisions of hereof.
(i) METHOD OF GIVING CONSENT. Any consent required by this
Agreement may be given by: (i) a written approval given by the
approving Partner and received by the Advisory General Partner at,
prior to or subsequent to the doing of the act or thing for which
the approval is solicited; or (ii) the affirmative vote by the
approving Partner to the doing of the act or thing for which the
approval is solicited at any meeting called and held pursuant to
this Article 27(i). Any matter requiring the consent of all or any
of the Partners or Limited Partners pursuant to this Agreement may
be considered at a meeting of the Partners held not less than 7 nor
more than 60 days after notice thereof shall have been given by the
General Partners to all Partners. Such meeting may be called by
the Advisory General Partners or a majority of the Managing General
Partners, in their discretion, at any time and notice therefor
shall be given by the General Partner upon the written request of
66 2/3% in Interest of the Limited Partners. Any such Notification
shall state briefly the purpose, time and place of the meeting.
All such meetings shall be held within or
-50-
outside the Commonwealth at such locations as the Advisory General
Partner may designate. Partners may vote in person or by proxy in
accordance with the procedures reasonably established by the
Advisory General Partners.
(j) RIGHTS AND REMEDIES. Except as otherwise expressly
provided herein, all rights and remedies herein provided shall be
cumulative, shall not exclude any other right or remedy available
under law, and all of such rights and remedies may be exercised and
enforced separately or concurrently and as often as occasion
therefor shall arise. In order to effectuate and carry out the
purposes of this Agreement, the parties hereto shall have the right
to specifically enforce the provisions hereof or to enjoin their
violation.
(k) BINDING ON SUCCESSORS. This Agreement shall be binding
upon and shall inure to the benefit of the parties signatory hereto
and their successors, permitted assigns and legal representatives.
(l) PRINCIPLES OF CONSTRUCTION. This Agreement shall be
construed to the maximum extent possible to comply with all the
provisions of the Investment Company Act and the Act. If,
nevertheless, it shall be determined by a court of competent
jurisdiction that any provision or wording of this Agreement shall
be invalid or unenforceable under the Investment Company Act, the
Act or other applicable law, such invalidity or unenforceability
shall not invalidate the entire Agreement. In that case, this
Agreement shall be construed so as to limit any term or provision
so as to make it enforceable or valid within the requirements of
such law, and, in the event such term or provision cannot be so
limited, this Agreement shall be construed to omit such invalid or
unenforceable provision.
(m) ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter
hereof and it supersedes any prior agreement or arrangement between
the parties relative to the subject matter hereof.
(n) APPLICABLE LAW. This Agreement and the rights, powers,
duties and remedies of the Partners with respect to each other
shall be governed and construed in accordance with the laws of the
Commonwealth of Massachusetts.
[remainder of page intentionally left blank]
-51-
IN WITNESS WHEREOF, the parties have executed this Third Amended and
Restated Agreement of Limited Partnership as an instrument under seal as of
the day and year first set forth above.
ADVISORY GENERAL PARTNER:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇, III
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, III
MANAGING GENERAL PARTNER:
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, III
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
LIMITED PARTNERS:
THOSE PERSONS LISTED ON SCHEDULE A
ATTACHED HERETO AS LIMITED PARTNERS
-52-