FORM OF UNITED STATES GASOLINE FUND, LP AUTHORIZED PURCHASER AGREEMENT
FORM
OF
This
United States Gasoline Fund, LP Authorized Purchaser Agreement (the
“Agreement”), dated as of
__________________, 2008 is entered into by and among United States Gasoline
Fund, LP (the “Fund”) Victoria Bay Asset Management, LLC, a Delaware limited
liability company and the general partner of United States Gasoline Fund, LP
(the “General Partner”), on behalf of itself and as General Partner of United
States Gasoline Fund, LP, and [AUTHORIZED
PURCHASER]., a [STATE/ TYPE OF ENTITY]
(the
“Authorized Purchaser”).
SUMMARY
The
General Partner serves in its capacity as General Partner of United States
Gasoline Fund, LP (the “Fund”) pursuant to the Limited Partnership Agreement
dated as of the day the first Creation Basket is sold and the proceeds are
invested (substantially in the form attached hereto) between the General Partner
and the Limited Partners of the Fund (the “Partnership Agreement”). ▇▇▇▇▇
Brothers ▇▇▇▇▇▇▇▇ Co. (the “Administrator” or “Custodian”) and ALPS Distributors
(the “Marketing Agent”) each serve as agents of the General Partner for all
purposes of this Agreement, and all references to agreements, obligations or
duties of the Administrator, Custodian or Marketing Agent herein shall be deemed
references to agreements, obligations of duties of the General Partner acting
through the relevant agent. As provided in the Partnership Agreement and
described in the Fund’s prospectus (the “Prospectus”), Units of fractional
undivided beneficial interest in and ownership of the limited partnership (the
“Units”) may be created or redeemed through the Marketing Agent by the
Authorized Purchaser in aggregations of one hundred thousand (100,000) Units
(each aggregation, a “Creation Basket” or “Redemption Basket,” respectively;
collectively, “Baskets”). Creation Baskets are offered only pursuant to the
registration statement of the Fund on Form S-1, as amended (Registration No.:
333-142206), as declared effective by the Securities and Exchange Commission
(the “SEC”) and as the same may be amended from time to time thereafter
(collectively, the “Registration Statement”). Authorized Purchasers are the only
persons that may place orders to create and redeem Creation Baskets or
Redemption Baskets.
Capitalized
terms used but not defined in this Agreement shall have the meanings assigned
to
such terms in the Prospectus. To the extent there is a conflict between any
provision of this Agreement other than the indemnities provided in Section
9 and
the provisions of the Prospectus, the provisions of the Prospectus shall
control.
To
give
effect to the foregoing premises and in consideration of the mutual covenants
and agreements set forth below, the parties hereto agree as
follows:
Section
1. Order Placement.
To
place
an order for the creation or redemption of one or more Baskets, an Authorized
Purchaser must follow the procedures for creation and redemption referred to
in
Section 3 of this Agreement and attached to this Agreement as Exhibit A;
provided, however, that in the case of an Authorized Purchaser’s initial order
to purchase one or more Creation Baskets on the first day the Baskets are to
be
offered and sold, the procedures for creation will be as attached to this
Agreement as Exhibit A-1.
Section
2. Status and Obligations of Authorized Purchaser.
The
Authorized Purchaser represents and warrants and covenants the following:
(a) The
Authorized Purchaser is a participant of the Depository Trust Company (“DTC”)
(as such a participant, a “DTC Participant”). If the Authorized Purchaser ceases
to be a DTC Participant, the Authorized Purchaser shall give prompt notice
to
the General Partner of such event, and this Agreement shall terminate
immediately as of the date the Authorized Purchaser ceased to be a DTC
Participant.
(b) Unless
Section 2(c) applies, the Authorized Purchaser either (i) is registered as
a
broker-dealer under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and is a member in good standing of the Financial
Industry Regulation
Association (“FINRA”),
or
(ii) is exempt from being, or otherwise is not required to be, licensed as
a
broker-dealer or a member of FINRA,
and in
either case is qualified to act as a broker or dealer in the states or other
jurisdictions where the nature of its business so requires. The Authorized
Purchaser will maintain any such registrations, qualifications and membership
in
good standing and in full force and effect throughout the term of this
Agreement. The Authorized Purchaser will comply with all applicable federal
law,
the laws of the states or other jurisdictions concerned, and the rules and
regulations promulgated thereunder, including, but not limited to those
applicable to securities and commodities transactions, and with the
Constitution, By-Laws and Conduct Rules of FINRA
(if it
is a FINRA
member)
to the extent the foregoing relate to the Authorized Purchaser’s transactions
in, and activities with respect to the Baskets. The Authorized Purchaser will
not directly or indirectly offer, sell or deliver Units in or from any state
or
jurisdiction where they may not lawfully be offered, sold and/or
delivered.
(c) If
the
Authorized Purchaser is offering or selling Units in jurisdictions outside
the
several states, territories and possessions of the United States and is not
otherwise required to be registered, qualified or a member of FINRA
as set
forth in Section 2(b) above, the Authorized Purchaser will (i) observe the
applicable laws of the jurisdiction in which such offer and/or sale is made,
(ii) comply with the full disclosure requirements of the Securities Act of
1933,
as amended (the “1933 Act”) and the Commodities Exchange Act (the “CEA”), and
the rules and regulations promulgated thereunder, and (iii) conduct its business
in accordance with the spirit of the FINRA
Conduct
Rules, in each case to the extent the foregoing relate to the Authorized
Purchaser’s transactions in, and activities with respect to the Baskets.
(d) The
Authorized Purchaser has written policies and procedures reasonably designed
to
comply with the money laundering and related provisions of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept
and
Obstruct Terrorism Act of 2001 (the “PATRIOT Act”), and the regulations
promulgated thereunder, if the Authorized Purchaser is subject to the
requirements of the PATRIOT Act.
(e) The
Authorized Purchaser has the capability to send and receive communications
via
an authenticated telecommunication facility to and from the General Partner
and
its agents, ALPS Distributors, Inc. and ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. The
Authorized Purchaser shall confirm such capability to the satisfaction of the
General Partner and the Marketing Agent by the end of the Business Day (as
defined in Section 6) before placing its first order with the Marketing Agent
(whether such order is to create or to redeem Baskets). If required by the
Marketing Agent, the Administrator or the Custodian with respect to authorized
telecommunications by telephonic facsimile, the Authorized Purchaser shall
enter
into a separate agreement with the Marketing Agent, the Administrator or the
Custodian, as the case may be, indemnifying such party with respect to its
communications by telephonic facsimile.
(f) Because
new Baskets can be created and Units therein issued on an ongoing basis, at
any
point during the life of the partnership, a “distribution,” as such term is used
in the 1933 Act, may be occurring with respect to resales of these Units. The
Authorized Purchaser is cautioned that some of its activities may result in
its
being deemed a participant in a distribution in a manner that would render
it a
statutory underwriter and subject it to the prospectus-delivery and liability
provisions of the 1933 Act. The Authorized Purchaser should review the “What is
the Plan of Distribution?” portion of the Prospectus and consult with its own
counsel in connection with entering into this Agreement and placing an Order
(as
defined in Section 3). In addition to satisfying the prospectus-delivery and
disclosure requirements of the 1933 Act, the Authorized Purchaser and any other
participant in the distribution of the Units purchased by the Authorized
Purchaser also has the obligation to comply with the disclosure delivery
requirements under the CEA, including, with respect to the CEA, the requirement
that the Authorized Purchaser provide an acknowledgement of receipt of the
Prospectus (the “CEA Acknowledgement”) by it to the Fund, directly or through
its agent, the Marketing Agent, prior to payment of the purchase price for
any
Creation Basket to the Fund and, to the extent required by the CEA or any
regulations thereunder, the CEA Acknowledgments contemplated by Section 13
hereof. To the extent the Authorized Purchaser has distributed a Preliminary
Prospectus to prospective investors, if the Authorized Purchaser has been
notified by the General Partner of material changes made to that document as
compared to the final Prospectus, the Authorized Purchaser shall give notice
to
any prospective investor who received the Preliminary Prospectus of such
material change prior to a sale.
Section
3. Orders.
(a) All
orders to create or redeem Baskets shall be made in accordance with the terms
of
the Prospectus, this Agreement and the creation and redemption procedures
attached hereto as Exhibit A (the “ Procedures”), except in the case of an
Authorized Purchaser’s initial order to purchase one or more Creation Baskets on
the first day the Baskets are to be offered and sold which will be governed
by
the procedures set forth in Exhibit A-1. Each party will comply with such
foregoing terms to the extent applicable to it. The General Partner may issue
additional or other procedures from time to time relating to the manner of
creating or redeeming Baskets and the Authorized Purchaser will comply with
such
procedures. The Authorized Purchaser hereby consents to the use of recorded
telephone lines; provided that the General Partner shall promptly provide copies
of recordings of any such calls to the Authorized Purchaser upon reasonable
request by the Authorized Purchaser unless such recordings have been erased
or
destroyed prior to receipt of such request in the normal course of business
in
accordance with the recording party’s general record keeping policies and
procedures. The General Partner shall take such actions as necessary to satisfy
Authorized Purchasers’ reasonable request for copies of recordings.
(b) The
Authorized Purchaser acknowledges and agrees it is acting solely as principal
and not on behalf of any party for which it is acting (whether such party is
a
customer or otherwise), and that each order to create a Basket (a “Purchase
Order”) and each order to redeem a Basket (a “Redemption Order,” and each
Purchase Order and Redemption Order, an “Order”) may not be withdrawn by the
Authorized Purchaser. A form of Purchase/Redemption Order is attached hereto
as
Exhibit B.
(c) The
General Partner acting by itself or through the Marketing Agent shall have
the
absolute right, but shall have no obligation, to reject any Purchase Order
or
Creation Basket Deposit (as defined in Section 6) (i) determined by the General
Partner not to be in proper form; (ii) that, in the opinion of nationally
recognized outside counsel, the General Partner would have adverse tax
consequences to the Fund; (iii) the acceptance or receipt of which would, in
the
opinion of nationally recognized outside counsel to the General Partner, be
unlawful; or (iv) if circumstances outside the control of the General Partner,
the Marketing Agent or the Custodian make it for all practical purposes not
feasible to process creations of Creation Baskets. None of the General Partner,
the Marketing Agent or the Custodian shall be liable to any person by reason
of
the rejection of any Purchase Order or Creation Basket Deposit.
(d) The
General Partner acting by itself or through the Marketing Agent may, in its
sole
discretion, reject any Redemption Order (i) determined by the General Partner
not to be in proper form (ii) the fulfillment of which its counsel advises
may
be illegal under applicable laws and regulations, or (iii) if circumstances
outside the control of the General Partner, the Marketing Agent or the Custodian
make it for all practical purposes not feasible for the Units to be delivered
under the Redemption Order.
Section
4. Fees.
In
connection with each Order by an Authorized Purchaser to create or redeem one
or
more Baskets, the General Partner shall charge, and the Authorized Purchaser
shall pay to the General Partner, the Transaction Fee prescribed in the
Prospectus applicable to such creation or redemption. The initial Transaction
Fee shall be one thousand dollars ($1,000). The Transaction Fee may be adjusted
from time to time as set forth in the Prospectus.
Section
5. Authorized Persons.
Concurrently
with the execution of this Agreement and as requested in writing from time
to
time thereafter, the Authorized Purchaser shall deliver to the General Partner
and the Marketing Agent, notarized and duly certified as appropriate by its
secretary or other duly authorized official, a certificate in the form of
Exhibit C setting forth the names and signatures of all persons authorized
to
give instructions relating to activity contemplated hereby or by any other
notice, request or instruction given on behalf of the Authorized Purchaser
(each, an “Authorized Person”). The General Partner or the Marketing Agent may
accept and rely upon such certificate as conclusive evidence of the facts set
forth therein and shall consider such certificate to be in full force and effect
until the General Partner receives a superseding certificate bearing a
subsequent date. Upon the termination or revocation of authority of any
Authorized Person by the Authorized Purchaser, the Authorized Purchaser shall
give immediate written notice of such fact to the General Partner and the
Marketing Agent, and such notice shall be effective upon receipt by the General
Partner.
Section
6. Creation Procedures.
On
any
Business Day, an Authorized Purchaser may place an order with the Marketing
Agent to create one or more Creation Baskets in accordance with this Section
6
and the Procedures. For purposes of processing Purchase and Redemption Orders,
a
“Business Day” means any day other than a day when any of the American Stock
Exchange, the New York Mercantile Exchange or the New York Stock Exchange is
closed for regular trading. Purchase orders must be placed by 12:00 PM New
York
time or the close of regular trading on the American Stock Exchange, whichever
is earlier, except in the case of an Authorized Purchaser’s initial order to
purchase one or more Creation Baskets on the first day the Baskets are to be
offered and sold, when such orders shall be placed by 9:00 AM New
York
time on the day agreed to by the General Partner and the Authorized Purchaser.
The day on which the Marketing Agent receives a valid Purchase Order is the
Purchase Order Date.
By
placing a Purchase Order, an Authorized Purchaser agrees to (1)
deposit
Treasuries, cash, or a combination of Treasuries and cash with the Custodian of
the Fund,
and (2)
if required by the General Partner in its sole discretion, enter into or arrange
for a block trade, an exchange for physical or exchange for swap, or any other
over-the-counter energy transaction (through itself or a designated acceptable
broker) with the Fund for the purchase of a number and type of futures contracts
at the closing settlement price for such contracts on the Purchase Order Date,
as specified in the Purchase Order Form (see Exhibit B). Failure to consummate
(1) and (2) above shall result in the cancellation of the order. The number
and
type of contracts specified shall be determined by the General Partner, in
its
sole discretion, to meet the Fund’s investment objective and shall be purchased
as a result of the Authorized Purchaser’s purchase of Units.
Prior
to
the delivery of Baskets for a Purchase Order, the Authorized Purchaser must
also
have wired to the Custodian the non-refundable transaction fee due for the
Purchase Order. “ Treasuries” shall be any U.S. treasury security with two years
or less remaining to maturity with an aggregate market value, as determined
in
the sole discretion of the Administrator using the valuation procedures set
forth in Exhibit D, that together with any cash amount, will equal the purchase
price of the Creation Basket being purchased.
The
total
deposit required to create each basket (“Creation Basket Deposit”) will be an
amount of Treasuries and cash that is in the same proportion to the total assets
of the Fund (net of estimated accrued but unpaid fees, expenses and other
liabilities) on the date the order to purchase is properly received as the
number of Units to be created under the Purchase Order is in proportion to
the
total number of Units outstanding on the date the order is received.
The
General Partner determines, directly in its sole discretion, or in consultation
with the Administrator, the requirements for Treasuries and/or the amount of
cash, including the maximum permitted remaining maturity of a Treasury and
the
proportions of Treasuries and cash, that may be included in deposits to create
Baskets. The Marketing Agent will publish such requirements at the beginning
of
each Business Day. Unless otherwise determined by the General Partner, if
Treasuries and cash are to be deposited, the amount of the cash deposit required
will be the difference between (i) the aggregate market value of the Treasuries
required to be included in a Creation Basket Deposit as of 4:00 PM New York
time
on the Purchase Order Date
and (ii)
the total required deposit.
An
Authorized Purchaser who places a Purchase Order is responsible for transferring
to the Fund’s account with the Custodian the required amount of Treasuries
and/or cash by the end of the third Business Day following the Purchase Order
Date,
except
in the case of an Authorized Purchaser’s initial order to purchase one or more
Creation Baskets on the first day the Baskets are to be offered and sold when
the Creation Basket Deposit will be due by 12:00 PM New York time on the date
the Purchase Order was accepted by the Marketing Agent. Upon receipt of the
deposit amount, the Administrator will cause DTC to credit the number of Baskets
ordered to the Authorized Purchaser’s DTC account on the third Business Day
following the Purchase Order Date,
except
in the case of an Authorized Purchaser’s initial order to purchase one or more
Creation Baskets, when the Administrator will cause DTC to credit the number
of
Baskets so ordered upon confirmation by the Custodian that the Creation Basket
Deposit has been received by the Custodian. The expense and risk of delivery
and
ownership of Treasuries until such Treasuries have been received by the
Custodian on behalf of the Fund shall be borne solely by the Authorized
Purchaser.
Section
7. Redemption Procedures.
On
any
Business Day, an Authorized Purchaser may place an order with the Marketing
Agent to redeem one or more Redemption Baskets in accordance with this Section
7
and the Procedures. Redemption Orders must be placed by 12:00 PM New York time
or the close of regular trading on the American Stock Exchange, whichever is
earlier. A Redemption Order so received is effective on the date it is received
in satisfactory form by the Marketing Agent. The day on which the Marketing
Agent receives a valid Redemption Order is the “Redemption Order Date”. By
placing a Redemption Order, an Authorized Purchaser agrees to (1)
deliver
the Redemption Basket to be redeemed through DTC’s book-entry system to the
Fund’s account with the Custodian not later than 3:00 PM New York time on the
third Business Day following the effective date of the Redemption
Order
(“Redemption Distribution Date”), and (2) if required by the General Partner in
its sole discretion, enter into or arrange for a block trade, an exchange for
physical or exchange for swap, or any other over-the-counter energy transaction
(through itself or a designated acceptable broker) with the Fund for the sale
of
a number and type of futures contracts at the closing settlement price for
such
contracts on the Redemption Order Date, as specified in the Redemption Order
Form (see Exhibit B). Failure to consummate (1) and (2) above shall result
in
the cancellation of the order. The number and type of contracts specified shall
be determined by the General Partner, in its sole discretion, to meet the Fund’s
investment objective and shall be sold as a result of the Authorized Purchaser’s
sale of Units.
Prior
to the delivery of the redemption distribution for a Redemption Order, the
Authorized Purchaser must also have wired to the Fund’s account at the Custodian
the non-refundable Transaction Fee due for the Redemption Order.
The
redemption distribution from the Fund consists of a transfer to the redeeming
Authorized Purchaser of an amount of Treasuries and/or cash with a value that
is
in the same proportion to the total assets of the Fund (net of estimated accrued
but unpaid fees, expenses and other liabilities) on the date the order to redeem
is properly received as the number of Units to be redeemed under the Redemption
Order is in proportion to the total number of Units outstanding on the date
the
order is received. The General Partner, directly or in consultation with the
Administrator, will determine the requirements for Treasuries and/or the amount
of cash, including the maximum permitted remaining maturity of a Treasury,
and
the proportions of Treasuries and cash, that may be included in distributions
to
redeem Baskets. The Marketing Agent will publish such requirements as of 4:00
PM
New York time on the Redemption Order Date.
The
redemption distribution due from the Fund is delivered to the Authorized
Purchaser on the Redemption Distribution Date if, by 3:00 PM New York time
on
such Redemption Distribution Date, the Fund’ s DTC account has been credited
with the Baskets to be redeemed. If the Fund’s DTC account has not been credited
with all of the Baskets to be redeemed by such time, the redemption distribution
is delivered to the extent of whole Baskets received. Any remainder of the
redemption distribution is delivered on the next Business Day to the extent
of
remaining whole Baskets received if the Fund receives the fee applicable to
the
extension of the Redemption Distribution Date which the General Partner may,
from time to time, determine and the remaining Baskets to be redeemed are
credited to the Fund’s DTC account by 9:00 AM New York time on such next
Business Day. Any further outstanding amount of the Redemption Order may be
cancelled at the election of the General Partner. Pursuant to instruction from
the General Partner, the Custodian may also deliver the redemption distribution
notwithstanding that the Baskets to be redeemed are not credited to the Fund’s
DTC account by 3:00 PM New York time on the Redemption Distribution Date if
the
Authorized Purchaser has collateralized its obligation to deliver the Baskets
through DTC’s book entry system on such terms as the General Partner may from
time to time determine.
The
General Partner may, in its discretion, suspend the right of redemption, or
postpone the Redemption Distribution Date, (1) for any period during which
the
American Stock Exchange or the New York Mercantile Exchange is closed other
than
customary weekend or holiday closings, or trading on the American Stock Exchange
or the New York Mercantile Exchange is suspended or restricted or (2) for any
period during which an emergency exists as a result of which delivery, disposal
or evaluation of Treasuries or other assets of the Fund is not reasonably
practicable. None of the General Partner, the Marketing Agent, the Administrator
or the Custodian will be liable to any person or in any way for any loss or
damages that may result from any such suspension or postponement.
Section
8. Role of Authorized Purchaser.
(a) The
Authorized Purchaser acknowledges that, for all purposes of this Agreement,
the
Authorized Purchaser is and shall be deemed to be an independent contractor
and
has and shall have no authority to act as agent for the Fund, the Marketing
Agent, the Administrator, the Custodian or the General Partner in any matter
or
in any respect.
(b) The
Authorized Purchaser will, to the extent reasonably practicable, make itself
and
its employees available, upon request, during normal business hours to consult
with the General Partner and the Marketing Agent concerning the performance
of
the Authorized Purchaser’s responsibilities under this Agreement; provided that
the Authorized Purchaser shall be under no obligation to divulge or otherwise
discuss any information that the Authorized Purchaser believes (i) is
confidential or proprietary in nature or (ii) the disclosure of which to third
parties would be prohibited.
(c) Notwithstanding
the provisions of Section 8(b), the Authorized Purchaser will maintain records
of all sales of Creation Baskets made by or through it and, upon reasonable
request of the General Partner, except if prohibited by applicable law and
subject to any privacy obligations or other obligations arising under federal
or
state securities laws it may have to its customers, will furnish the General
Partner with the names and addresses of the purchasers of such Creation Baskets
and the number of Creation Baskets purchased if and to the extent that the
General Partner has been requested to provide such information to the
Commodities Futures Trading Commission, Securities Exchange Commission, National
Association of Securities Dealers, or Internal Revenue Service (“Fund
Regulators”). For the avoidance of doubt, all such information provided by the
Authorized Purchaser shall be Confidential Information (as defined in Section
18) and shall not be used for any purpose other than to satisfy requests of
Fund
Regulators.
(d) The
Fund
may from time to time be obligated to deliver prospectuses, proxy materials,
annual or other reports of the Fund or other similar information (“Fund
Documents”) to its limited partners. The Authorized Purchaser agrees (i) subject
to any privacy obligations or other obligations arising under federal or state
securities laws it may have to its customers, to reasonably assist the General
Partner in ascertaining certain information regarding sales of Creation Baskets
made by or through the Authorized Purchaser that is necessary for the Fund
to
comply with such obligations upon written request of the General Partner or
(ii)
in lieu thereof, and at the option of the Authorized Purchaser, the Authorized
Purchaser may undertake to deliver Fund Documents to the Authorized Purchaser’s
customers that custody Units with the Authorized Purchaser, after receipt from
the Fund of sufficient quantities of such Fund Documents to allow mailing
thereof to such customers. The expenses associated with such transmissions
shall
be borne by the General Partner in accordance with usual custom and practice
in
respect of such communications. The General Partner agrees that the names,
addresses and other information concerning the Authorized Purchaser’s customers
are and shall remain the sole property of the Authorized Purchaser, and none
of
the General Partner, the Fund or any of their respective affiliates shall use
such names, addresses or other information for any purposes except in connection
with the performance of their duties and responsibilities hereunder and except
to the extent necessary for the Fund to meet its regulatory requirements as
set
forth in Section 8(b) and in this Section 8(c) of the Agreement.
Section
9. Indemnification.
(a) Indemnification
of Authorized Purchaser. The General Partner agrees to indemnify, defend and
hold harmless the Authorized Purchaser, its partners, stockholders, members,
directors, officers, employees, affiliates, agents and any person who controls
such persons within the meaning of Section 15 of the 1933 Act or Section 20
of
the Exchange Act, and the successors and assigns of all of the foregoing persons
(each a “GP Indemnified Person”), from and against any loss, damage, expense,
liability or claim (including reasonable attorney fees and the reasonable cost
of investigation) which the Authorized Purchaser or any such person may incur
under the 1933 Act, the Exchange Act, the CEA, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or
is
based upon:
(1) any
untrue statement or alleged untrue statement of a material fact contained in
the
Registration Statement (or in the Registration Statement as amended or
supplemented) or in a Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include the Prospectus and the Prospectus as amended
or supplemented) or any omission or alleged omission to state a material fact
required to be stated in either such Registration Statement or such Prospectus
or necessary to make the statements made therein not misleading, except insofar
as any such loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information concerning the Authorized
Purchaser furnished in writing by or on behalf of the Authorized Purchaser
to
the General Partner expressly for use in such Registration
Statement;
(2) any
untrue statement or alleged untrue statement of a material fact or breach by
the
General Partner of any representation or warranty contained in this
Agreement;
(3) the
failure by the General Partner, the Fund or their respective agents to perform
when and as required, any agreement, obligation, duty or covenant contained
herein;
(4) the
failure by the General Partner, the Fund or their respective agents to comply
with applicable laws and the rules and regulations of any governmental entity
or
any self-regulatory organization to the extent the foregoing relates to
transactions in, and activities with respect to Baskets; or
(5) the
Authorized Purchaser’s performance of its duties under this Agreement except in
the case of this clause (5), for any loss, damage, expense, liability or claim
resulting from the gross negligence or willful misconduct of the Authorized
Purchaser.
In
no
case is the indemnity of the General Partner in favor of the Authorized
Purchaser and such other persons as are specified in this Section 9(a) to be
deemed to protect the Authorized Purchaser and such persons against any
liability to the General Partner or the Fund to which the Authorized Purchaser
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
If
any
action, suit or proceeding (each, a “Proceeding”) is brought against a GP
Indemnified Person or any such person in respect of which indemnity may be
sought against the General Partner pursuant to the foregoing paragraph, such
GP
Indemnified Person shall promptly notify the General Partner in writing of
the
institution of such Proceeding, provided, however, that the omission to so
notify the General Partner shall not relieve the General Partner or the Fund
from any liability which it may have to the GP Indemnified Person except to
the
extent that it has been materially prejudiced by such failure and has not
otherwise learned of such Proceeding. The GP Indemnified Person shall have
the
right to employ its own counsel in any such case and the fees and expenses
of
such counsel shall be borne by the General Partner and the Fund and paid as
incurred (it being understood, however, that the General Partner shall not
be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the GP Indemnified Persons who are parties to
such Proceeding) or for the expenses and fees incurred with respect to matters
that are not indemnifiable in accordance with the preceding paragraph. A GP
Indemnified Person shall give the General Partner reasonable prior notice of
settlement of any Proceeding in respect of which indemnity may be sought against
the General Partner pursuant to this Section 9(a), provided, however that the
omission to so notify the General Partner shall not relieve the General Partner
or the Fund from any liability which it may have to the GP Indemnified Person.
(b) The
Authorized Purchaser agrees to indemnify, defend and hold harmless each of
the
Fund, the General Partner and its partners, stockholders, members, directors,
officers, employees and any person who controls the General Partner within
the
meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act, and
the
successors and assigns of all of the foregoing persons (each, an “AP Indemnified
Person”), from and against any loss, damage, expense, liability or claim
(including reasonable attorney fees and the reasonable cost of investigation)
which the AP Indemnified Person may incur as a result of or in connection with
any untrue statement or alleged untrue statement of a material fact contained
in
and in conformity with information furnished in writing by or on behalf of
the
Authorized Purchaser to the General Partner expressly for use in the
Registration Statement (or in the Registration Statement as amended or
supplemented by any post-effective amendment thereof) or in a Prospectus, or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in
such
Registration Statement or such Prospectus or necessary to make such information
not misleading.
The
Authorized Purchaser will also indemnify each AP Indemnified Person from and
against any loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which such AP Indemnified Person may incur as a result
of
or in connection with any actions of an AP Indemnified Person in accordance
with
any instructions by the Authorized Purchaser except in the case of any loss,
damage, expense, liability or claim resulting from the gross negligence or
willful misconduct of an AP Indemnified Person. In no case is the indemnity
of
the Authorized Purchaser in favor of each AP Indemnified Person to be deemed
to
protect the AP Indemnified Person and such persons against any liability to
the
Authorized Purchaser to which the AP Indemnified Person would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in
the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
If
any
Proceeding is brought against an AP Indemnified Person, such AP Indemnified
Person shall promptly notify the Authorized Purchaser in writing of the
institution of such Proceeding; provided, however, that the omission to so
notify the Authorized Purchaser shall not relieve the Authorized Purchaser
from
any liability which it may have to such AP Indemnified Person except to the
extent that it has been materially prejudiced by such failure and has not
otherwise learned of such Proceeding. The AP Indemnified Person or such person
shall have the right to employ its own counsel and the fees and expenses of
such
counsel shall be borne by the Authorized Purchaser and paid as incurred (it
being understood, however, that the Authorized Purchaser shall not be liable
for
the expenses of more than one separate counsel (in addition to any local
counsel) in any one Proceeding or series of related Proceedings in the same
jurisdiction representing the AP Indemnified Persons who are parties to such
Proceeding) or for the expenses and fees incurred with respect to matters that
are not indemnifiable in accordance with the preceding paragraph. An AP
Indemnified Person shall give the Authorized Purchaser reasonable prior notice
of settlement of any Proceeding in respect of which indemnity may be sought
against the Authorized participant pursuant to this Section 9(b), provided,
however that the omission to so notify the General Partner shall not relieve
the
General Partner or the Fund from any liability which it may have to the GP
Indemnified Person.
(c) The
indemnity agreements contained in this Section 9 and the covenants, warranties
and representations of the General Partner contained in this Agreement shall
remain in full force and effect regardless of any investigation made by or
on
behalf of the Authorized Purchaser, its partners, stockholders, members,
directors, officers, employees and or any person (including each partner,
stockholder, member, director, officer or employee of such person) who controls
the Authorized Purchaser within the meaning of Section 15 of the 1933 Act or
Section 20 of the Exchange Act, or by or on behalf of each of the General
Partner, the Fund, their partners, stockholders, members, directors, officers,
employees or any person who controls the General Partner or the Fund within
the
meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the initial issuance and
delivery of the Units. The General Partner and the Authorized Purchaser agree
promptly to notify each other of the commencement of any Proceeding against
it
and, in the case of the General Partner, against any of the General Partner’s
officers or directors in connection with the issuance and sale of the Units,
or
in connection with the Registration Statement or the Prospectus.
Section
10.
(a) Limitation
of Liability.
None
of
the General Partner, the Authorized Purchaser, the Marketing Agent, the
Administrator, or the Custodian, shall be liable to each other or to any other
person, including any party claiming by, through or on behalf of the Authorized
Purchaser, for any losses, liabilities, damages, costs or expenses arising
out
of any mistake or error in data or other information provided to any of them
by
each other or any other person or out of any interruption or delay in the
electronic means of communications used by them.
(b) Tax
Liability.
The
Authorized Purchaser shall be responsible for the payment of any transfer tax,
sales or use tax, stamp tax, recording tax, value added tax and any other
similar tax or government charge applicable to the creation or redemption of
any
Basket made pursuant to this Agreement, regardless of whether or not such tax
or
charge is imposed directly on the Authorized Purchaser. To the extent the
General Partner or the Fund is required by law to pay any such tax or charge,
the Authorized Purchaser agrees to promptly indemnify such party for any such
payment, together with any applicable penalties, additions to tax or interest
thereon.
Section
11. Acknowledgment.
The
Authorized Purchaser acknowledges receipt of a copy of the Prospectus and
represents that it has reviewed and understands such document.
Section
12. Effectiveness and Termination.
Upon
the
execution of this Agreement by the parties hereto, this Agreement shall become
effective in this form as of the date first set forth above, and may be
terminated at any time by any party upon thirty (30) days prior written notice
to the other parties unless earlier terminated: (i) in accordance with Section
2(a); (ii) upon notice to the Authorized Purchaser by the General Partner in
the
event of a breach by the Authorized Purchaser of this Agreement or the
procedures described or incorporated herein; or (iii) at such time as the Fund
is terminated.
Section
13. Marketing Materials; Representations Regarding Baskets; Identification
in
Registration Statement.
(a) The
Authorized Purchaser represents, warrants and covenants that, (i) without the
written consent of the General Partner, the Authorized Purchaser will not make,
or permit any of its representatives to make, in connection with any sale or
solicitation of a sale of Baskets any representations concerning the Units
or
the General Partner, the Fund or any AP Indemnified Person other than
representations consistent with (A) the then-current Prospectus of the Fund,
(B)
printed information approved by the General Partner as information supplemental
to such Prospectus or (C) any promotional materials or sales literature
furnished to the Authorized Purchaser by the General Partner, and (ii) the
Authorized Purchaser will not furnish or cause to be furnished to any person
or
display or publish any information or material relating to the Baskets, any
AP
Indemnified Person or the Fund that is not consistent with the Fund’s then
current Prospectus. Copies of the then-current Prospectus of the Fund and any
such printed supplemental information will be supplied by the General Partner
to
the Authorized Purchaser in reasonable quantities upon request.
(b) The
Authorized Purchaser agrees to comply with the prospectus and disclosure
delivery requirements of the federal securities and commodities laws. In
connection therewith, the Authorized Purchaser will provide each prospective
purchaser with a copy of the Fund’s Prospectus and, to the extent required under
the CEA or regulations promulgated thereunder, obtain (or require any
participant in the distribution of Units in a Creation Basket the Authorized
Purchaser has purchased to obtain) the CEA Acknowledgment from any such
purchaser prior to receipt of payment from the purchaser. The Authorized
Purchaser shall (or shall require any participant in distribution of such Units
in a Creation Basket the Authorized Purchaser has purchased) maintain each
such
CEA Acknowledgement until the termination of this Agreement, and provide a
copy
to the General Partner upon reasonable request.
(c) The
Authorized Purchaser hereby agrees that for the term of this Agreement the
General Partner or its agent, the Marketing Agent, may deliver the then-current
Prospectus, and any supplements or amendments thereto or recirculation thereof,
to the Authorized Purchaser in Portable Document Format (“PDF”) via electronic
mail to __________________ in lieu of delivering the Prospectus in paper form.
The Authorized Purchaser may revoke the foregoing agreement at any time by
delivering written notice to the General Partner and, whether or not such
agreement is in effect, the Authorized Purchaser may, at any time, request
reasonable quantities of the Prospectus, and any supplements or amendments
thereto or recirculation thereof, in paper form from the General Partner or
its
agent, the Marketing Agent. The Authorized Purchaser acknowledges that it has
the capability to access, view, save and print material provided to it in PDF
and that it will incur no appreciable extra costs by receiving the Prospectus
in
PDF instead of in paper form. The General Partner will, when requested by the
Authorized Purchaser, make available at no cost the software and technical
assistance necessary to allow the Authorized Purchaser to access, view and
print
the PDF version of the Prospectus.
(d) For
as
long as this Agreement is effective, the Authorized Purchaser agrees to be
identified as an authorized purchaser of the Fund at the General Partner’s
discretion (i) in the section of the Prospectus included within the Registration
Statement entitled “Creation and Redemption of Units,” and in any other section
as may be required by the SEC and (ii) on the Fund’s website. Upon the
termination of this Agreement, (i) during the period prior to when the General
Partner qualifies and elects to file on Form S-3, the General Partner will
remove such identification from the Prospectus in the amendment of the
Registration Statement next occurring after the date of the termination of
this
Agreement and, during the period after when the General Partner qualifies and
elects to file on Form S-3, the General Partner will promptly file a current
report on Form 8-K indicating the withdrawal of the Authorized Purchaser as
an
authorized purchaser of the Fund and (ii) the General Partner will promptly
update the Fund’s website to remove any identification of the Authorized
Purchaser as an authorized purchaser of the Fund.
Section
14. Certain Covenants of the General Partner.
The
General Partner, on its own behalf and on behalf of the Fund, covenants and
agrees:
(a) to
notify
the Authorized Purchaser promptly of the happening of any event during the
term
of this Agreement which could require the making of any change in the Prospectus
then being used so that the Prospectus would not include an untrue statement
of
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, and, during such time, to prepare and deliver or otherwise make
available, at the expense of the Fund, to the Authorized Purchaser copies of
such amendments or supplements to such Prospectus as may be necessary to reflect
any such change at such time and in such numbers as necessary to enable the
Authorized Purchaser to comply with any obligation it may have to deliver such
revised, supplemented or amended Prospectus to customers.
(b) to
cause
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, LLP,
accountants to the Fund, to deliver, at each time (i) the Registration Statement
or the Prospectus is amended or supplemented by the filing of a post-effective
amendment, (ii) a new Registration Statement is filed to register additional
Baskets in reliance on Rule 429 of the 1933 Act, and (iii) there is financial
information incorporated by reference into the Registration Statement or the
Prospectus, letters dated such dates and addressed to the Authorized Purchaser,
containing statements and information of the type ordinarily included in
accountants’ letters to underwriters with respect to the financial statements
and other financial information contained in or incorporated by reference into
the Registration Statement and the Prospectus;
(c) to
deliver to the Authorized Purchaser, at each time (i) the Registration Statement
or the Prospectus is amended or supplemented by the filing of a post-effective
amendment, (ii) a new Registration Statement is filed to register additional
Baskets in reliance on Rule 429 of the 1933 Act, and (iii) there is financial
information incorporated by reference into the Registration Statement or the
Prospectus, a certification by a duly authorized officer of the General Partner
in the form attached hereto as Exhibit E. In addition, any certificate signed
by
any officer of the General Partner and delivered to the Authorized Purchaser
or
counsel for the Authorized Purchaser pursuant hereto shall be deemed to be
a
representation and warranty by the General Partner as to matters covered thereby
to the Authorized Purchaser;
(d) to
furnish directly or through the Marketing Agent to the Authorized Purchaser,
at
each time (i) the Registration Statement or the Prospectus is amended or
supplemented by the filing of a post-effective amendment, (ii) a new
Registration Statement is filed to register additional Baskets in reliance
on
Rule 429 of the 1933 Act, and (iii) there is financial information incorporated
by reference into the Registration Statement or the Prospectus, such documents
and certificates in the form as reasonably requested; and
(e) to
cause
the Fund to file a post-effective amendment to the Registration Statement no
less frequently than once per calendar quarter on or about the same time that
the Fund files a quarterly or annual report pursuant to Section 13 or 15(d)
of
the Exchange Act (including the information contained in such report), until
such time as the Fund’s reports filed pursuant to Section 13 or 15(d) of the
Exchange Act are incorporated by reference in the Registration
Statement.
Section
15. Third Party Beneficiaries.
Each
AP
Indemnified Person, to the extent it is not a party to this Agreement, is a
third-party beneficiary of this Agreement and may proceed directly against
the
Authorized Purchaser (including by bringing proceedings against the Authorized
Purchaser in its own name) to enforce any obligation of the Authorized Purchaser
under this Agreement which directly or indirectly benefits such AP Indemnified
Person. Each GP Indemnified Person, to the extent it is not a party to this
Agreement, is a third-party beneficiary of this Agreement and may proceed
directly against the General Partner, the Fund or their respective agents
(including by bringing proceedings against the General Partner, the Fund or
their respective agents in its own name) to enforce any obligation of the
General Partner, the Fund or their agents under this Agreement which directly
or
indirectly benefits such GP Indemnified Person.
Section
16. Force Majeure.
No
party
to this Agreement shall incur any liability for any delay in performance, or
for
the non-performance, of any of its obligations under this Agreement by reason
of
any cause beyond its reasonable control. This includes any act of God or war
or
terrorism, any breakdown, malfunction or failure of transmission in connection
with or other unavailability of any wire, communication or computer facilities,
any transport, port, or airport disruption, industrial action, acts and
regulations and rules of any governmental or supra national bodies or
authorities or regulatory or self-regulatory organization or failure of any
such
body, authority or organization for any reason, to perform its obligations.
Section
17. Miscellaneous.
(a) Entire
Agreement. This Agreement (including any schedules and exhibits attached hereto
and thereto) contains all of the agreements among the parties hereto (and
thereto) with respect to the transactions contemplated hereby (and thereby)
and
supersedes all prior agreements or understandings, whether written or oral,
among the parties with respect thereto.
(b) Amendment
and Modification. This Agreement may be amended, modified or supplemented only
by a written instrument executed by all the parties.
(c) Successors
and Assigns; Assignment. All the terms and provisions of this Agreement shall
be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement shall not be assigned by any
party without the prior written consent of the other parties and any assignment
without such consent shall be null and void.
(d) Waiver
of
Compliance. Except as otherwise provided in this Agreement, any failure of
any
of the parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party entitled to the benefits thereof only by
a
written instrument signed by the party granting such waiver, but any such
waiver, or the failure to insist upon strict compliance with any obligation,
covenant, agreement or condition herein, shall not operate as a waiver of,
or
estoppel with respect to, any subsequent or other failure or
breach.
(e) Severability.
The parties hereto desire that the provisions of this Agreement be enforced
to
the fullest extent permissible under the law and public policies applied in
each
jurisdiction in which enforcement is sought. Accordingly, in the event that
any
provision of this Agreement would be held in any jurisdiction to be invalid,
prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such
provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited
or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
(f) Notices.
All notices, waivers, or other communications pursuant to this Agreement shall
be in writing and shall be deemed to be sufficient if delivered personally,
by
facsimile (and, if sent by facsimile, followed by delivery by
nationally-recognized express courier), sent by nationally-recognized express
courier or mailed by registered or certified mail (return receipt requested),
postage prepaid, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(1) if
to
General Partner, to:
Victoria
Bay Asset Management, LLC
▇/▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇.▇.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
(2) if
to the
Authorized Purchaser, to:
All
such
notices and other communications shall be deemed to have been delivered and
received (i) in the case of personal delivery or delivery by facsimile or
e-mail, on the date of such delivery if delivered during business hours on
a
Business Day or, if not delivered during business hours on a Business Day,
the
first Business Day thereafter, (ii) in the case of delivery by
nationally-recognized express courier, on the first Business Day following
dispatch, and (iii) in the case of mailing, on the third Business Day following
such mailing.
(g) Governing
Law; Jurisdiction.
(1) All
questions concerning the construction, interpretation and validity of this
Agreement and all transactions hereunder shall be governed by and construed
and
enforced in accordance with the domestic laws of the State of New York, without
giving effect to any choice or conflict of law provision or rule (whether in
the
State of New York or any other jurisdiction) that would cause the application
of
the laws of any jurisdiction other than the State of New York. In furtherance
of
the foregoing, the internal law of the State of New York will control the
interpretation and construction of this Agreement, even if under such
jurisdiction’s choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily or necessarily apply.
(2) Each
party irrevocably consents and agrees, for the benefit of the other parties,
that any legal action, suit or proceeding against it with respect to its
obligations, liabilities or any other matter arising out of or in connection
with this Agreement or any related agreement may be brought in the courts of
the
State of New York and hereby irrevocably consents and submits to the
non-exclusive jurisdiction of each such court in personam, generally and
unconditionally with respect to any action, suit or proceeding for itself and
in
respect of its properties, assets and revenues. Each party irrevocably waives
any immunity to jurisdiction to which it may otherwise be entitled or become
entitled (including sovereign immunity, immunity to pre-judgment attachment
and
execution) in any legal suit, action or proceeding against it arising out of
or
based on this Agreement or any related agreement or the transactions
contemplated hereby or thereby which is instituted in any court of the State
of
New York.
The
provisions of this Section 17(g) shall survive any termination of this
Agreement, in whole or in part.
(h) No
Partnership. Nothing in this Agreement is intended to, or will be construed
to
constitute the General Partner or the Fund, on the one hand, and the Authorized
Purchaser or any of its Affiliates, on the other hand, as partners or joint
venturers; it being intended that the relationship between them will at all
times be that of independent contractors.
(i) Interpretation.
The article and section headings contained in this Agreement are solely for
the
purpose of reference, are not part of the agreement of the parties and shall
not
in any way affect the meaning or interpretation of this Agreement.
(j) No
Strict
Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rule
of
strict construction will be applied against any party.
(k)
Counterparts;
Facsimile Signatures. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Facsimile counterpart
signatures to this Agreement shall be acceptable and binding.
(l) Other
Usages. The following usages shall apply in interpreting this Agreement: (i)
references to a governmental or quasigovernmental agency, authority or
instrumentality shall also refer to a regulatory body that succeeds to the
functions of such agency, authority or instrumentality; and (ii) “including”
means “including, but not limited to.”
Section
18. Confidentiality.
(a)
The
General Partner and the Authorized Purchaser shall maintain in confidence,
use
only for the purposes provided for in this Agreement, and not disclose to any
third party, without first obtaining the other party’s consent in writing, any
and all Confidential Information (as defined below) such party receives from
the
other party; provided, however, that either party may disclose Confidential
Information received from the other party to those of its Representatives as
may
be necessary for such party to carry out its obligations under this Agreement.
“Confidential
Information” shall mean all information or data of a party or its customers that
is disclosed to or received by the other party, whether orally, visually or
in
writing, in any form, including, without limitation, information or data which
relates to such party’s business or operations, research and development,
marketing plans or activities, or actual or potential products.
(b)
Notwithstanding
the provisions of this Agreement to the contrary, a party shall have no
liability to the other party for the disclosure or use of any Confidential
Information of the other party if the Confidential Information:
(1) is
known
to such party at the time of disclosure other than as the result of a breach
of
this Section 18 by such party;
(2) has
been
or becomes publicly known, other than as the result of a breach of this Section
18 by such party, or has been or is publicly disclosed by the other
party;
(3) is
received by such party after the date of this Agreement from a third party
(unless such third party breaches an obligation of confidentiality to the other
party); or
(4) is
required to be disclosed by law or similar compulsion or in connection with
any
legal proceeding or request for information on behalf of a governmental
authority or self-regulatory organization, provided that such party shall
promptly inform the other party in writing of such requirement and that such
disclosure shall be limited to the extent so required.
(c)
The
parties recognize and acknowledge that a breach or threatened breach by a party
of the provisions of this Section 18 may cause irreparable and material loss
and
damage to the other party which cannot be adequately remedied at law and that,
accordingly, in addition to, and not in lieu of, any damages or other remedy
to
which the non-breaching party may be entitled, the issuance of an injunction
or
other equitable remedy (without the requirement that a bond or other security
be
posted) is an appropriate remedy for the non-breaching party for any breach
or
threatened breach of the obligations set forth in this Section 18.
(d)
Each
party agrees that it will use the same degree of care, but no less than a
reasonable degree of care, in safeguarding the Confidential Information of
the
other party as it uses for its own Confidential Information of a similar nature.
Each party shall promptly notify the other party in writing of any misuse,
misappropriation or unauthorized disclosure of the Confidential Information
of
the other party that may come to such party’s attention.
(e)
Upon
the
termination of this Agreement, if requested in writing by the other party,
each
party shall, at such party’s option, promptly destroy or return to the other
party all Confidential Information received from the other party, all copies
and
extracts of such Confidential Information and all documents or other media
containing any such Confidential Information.
IN
WITNESS WHEREOF, the Authorized Purchaser and the General Partner have caused
this Agreement to be executed by their duly authorized representatives as of
the
date first set forth above.
VICTORIA
BAY ASSET MANAGEMENT, LLC
By: _____________________________
Name:
Title:
Address:
Telephone:
Facsimile:
[AUTHORIZED
PURCHASER]
By: _____________________________
Name:
Title:
Address:
Telephone:
Facsimile:
EXHIBIT
A
CREATION
AND REDEMPTION PROCEDURES
Scope
of
Procedures and Overview
These
procedures (the “Procedures ”) describe the processes by which one or more
Baskets of United States Gasoline Fund, LP Units (the “Units” ) may be purchased
by an Authorized Purchaser, or, once Units have been issued, redeemed by an
Authorized Purchaser. Units may be created or redeemed only in blocks of 100,000
Units (each such block, a “Basket”).
For
purposes of these Procedures, a “Business Day” is defined as any day other than
a day on which the American Stock Exchange (“AMEX”), the New York Mercantile
Exchange (“NYMEX”) or the New York Stock Exchange (“NYSE”) is closed for regular
trading.
Baskets
are issued pursuant to the Prospectus, which will be delivered by the Marketing
Agent to each Authorized Purchaser prior to its execution of the Authorized
Purchaser Agreement, and are issued and redeemed in accordance with the
Authorized Purchaser Agreement. Baskets may be issued and redeemed on any
Business Day by the Marketing Agent in exchange for cash and/or Treasuries,
which the Custodian receives from Authorized Purchasers or transfers to
Authorized Purchasers, in each case on behalf of the Fund.
Upon
acceptance of the Authorized Purchaser Agreement, the Marketing Agent will
assign a personal identification number (a “PIN number”) to each Authorized
Person authorized to act for the Authorized Purchaser. This will allow the
Authorized Purchaser through its Authorized Person(s) to place Purchase Order(s)
or Redemption Order(s) for Baskets.
Important
Notes:
Any
Order
is subject to rejection by the General Partner or the Marketing Agent, as agent
of the General Partner, for the reasons set forth in the Authorized Purchaser
Agreement.
All
Orders are subject to the provisions of the Partnership Agreement, the
Prospectus and the Authorized Purchaser Agreement relating to unclear or
ambiguous instructions.
The
Authorized Purchaser, and each distributor offering and selling Units as part
of
the distribution of such Units, shall comply with the prospectus delivery and
disclosure requirements of the 1933 Act as well as the analogous requirements
under the CEA, including, the requirement that prospective investors provide
an
acknowledgement of receipt of such disclosure materials prior to the payment
for
any Units to the extent the foregoing relates to the Authorized Purchaser’s
transactions in, and activities with respect to, Units.
CREATION
PROCESS
An
Order
to purchase one or more Baskets placed by an Authorized Purchaser with the
Marketing Agent by 12:00 PM New York time or the close of regular trading on
the
AMEX, whichever is earlier (the “Order Cut-Off Time”) on a Business Day (such
day, “CREATION T”) results in the transfer to the Authorized Purchaser’s account
at The Depository Trust Company (“DTC”) of Baskets the Authorized Purchaser has
purchased, in most instances, by 9:00 AM New York time on CREATION T+3:
CREATION
PROCEDURES
1. By
the
Order Cut-Off Time (the earlier of the close of regular trading on the AMEX
or
12:00 PM New York time), an Authorized Person of the Authorized Purchaser calls
the Marketing Agent at (▇▇▇) ▇▇▇-▇▇▇▇ to notify such agent that the Authorized
Purchaser wishes to place a Purchase Order to create an identified number of
Baskets and to request that it be provided with an order number (an “Order
Number”). The Authorized Person provides a PIN number as identification. The
Marketing Agent provides the Authorized Purchaser with an Order Number for
the
Authorized Purchaser’s Purchase Order Form. The Authorized Purchaser then
completes and faxes to the Marketing Agent the Purchase Order Form included
as
Exhibit B to the Authorized Purchaser Agreement. The Purchase Order Form must
include the Authorized Person’s signature, the number of Baskets being
purchased, and the Order Number.
2. If
the
Marketing Agent has not received the Purchase Order Form from the Authorized
Purchaser within 15 minutes after the Marketing Agent receives the phone call
from the Authorized Purchaser referenced in item (1) above, the Marketing Agent
places a phone call to the Authorized Purchaser to enquire about the status
of
the Order. If the Authorized Purchaser does not fax the Purchase Order Form
to
the Marketing Agent within 15 minutes after the Marketing Agent’s phone call,
the Authorized Purchaser’s Order is cancelled. The Marketing Agent will then
notify the Authorized Purchaser that the Order has been cancelled via telephone
call.
3. By
placing a Purchase Order, an Authorized Purchaser agrees to (1) deposit
Treasuries, cash, or a combination of Treasuries and cash with the Custodian
of
the Fund, and (2)
if
required by the General Partner in its sole discretion, enter into or arrange
for a block trade, an exchange for physical or exchange for swap, or any other
over-the-counter energy transaction (through itself or a designated acceptable
broker) with the Fund for the purchase of a number and type of futures contracts
at the closing settlement price for such contracts on the Purchase Order Date,
as specified in the Purchase Order Form (see Exhibit B). Failure to consummate
(1) and (2) above shall result in the cancellation of the order. The number
and
type of contracts specified shall be determined by the General Partner, in
its
sole discretion, to meet the Fund ’s investment objective and shall be purchased
as a result of the Authorized Purchaser’s purchase of Units. If
the
Marketing Agent has received the Authorized Purchaser’s Purchase Order Form on
time in accordance with the preceding timing rules, then by 1:00 PM New York
time the Marketing Agent returns to the Authorized Purchaser a copy of the
Purchase Order Form submitted, marking it “Affirmed.” The
Marketing Agent shall also have completed Part II of the Purchase Order Form,
which includes the specific number and type of futures contracts to be purchased
at the closing settlement price on the Purchase Order Date.
4. Based
on
the Purchase Orders placed with it on CREATION T, the Marketing Agent sends
a
facsimile to the Transfer Agent indicating the total number of creation Units
and total amount of cash and/or Treasuries for which the Marketing Agent will
require an allocation into the custodial accounts
of,
respectively, the Authorized Purchaser and the Fund on CREATION T+3. If the
Marketing Agent rejects a Purchase Order pursuant to the Authorized Purchaser
Agreement after the foregoing messages are given to the Custodian, the Marketing
Agent will notify the Transfer Agent of such rejection as
soon
as practicable
but, in
any event, by 1:30 PM New York time the same day, identifying the Authorized
Purchaser whose Purchase Order was rejected and the amount of Units contained
in
the rejected Purchase Order. The Transfer Agent will address any such rejection
notifications received after 1:30 PM New York time only on a best efforts basis.
REDEMPTION
PROCESS
An
order
to redeem one or more Baskets placed by an Authorized Purchaser with the
Marketing Agent by 12:00 PM New York time or the close of regular trading on
the
AMEX, whichever is earlier, on a Business Day (such day, “REDEMPTION T”) results
in the following taking place by 3:00 p.m. New York time on REDEMPTION
T+3:
Transfer
to the account at DTC and the subsequent cancellation of the relevant number
of
the Authorized Purchaser’s Baskets; and
Transfer
to the Authorized Purchaser by credit to the Authorized Purchaser’s account of
cash and Treasuries, if any, in the relevant amount(s) corresponding to the
Baskets delivered for redemption (the “Redemption Distribution”).
REDEMPTION
PROCEDURES
REDEMPTION
T (REDEMPTION ORDER TRADE DATE)
1. By
the
Order Cut-off Time, an Authorized Person of the Authorized Purchaser calls
the
Marketing Agent at (303) 623ÿ to notify the Marketing Agent that the Authorized
Purchaser wishes to place a Redemption Order with the Marketing Agent to redeem
an identified number of Baskets and to request that the Marketing Agent provide
an Order Number. The Authorized Person provides a PIN number as identification
to the Marketing Agent. The Marketing Agent provides the Authorized Purchaser
with an Order Number for the Authorized Purchaser’s Redemption Order Form. The
Authorized Purchaser then completes and faxes to the Marketing Agent the
Redemption Order Form included as Exhibit B to the Authorized Purchaser
Agreement. The Redemption Order Form must include the Authorized Person’s
signature, the number of Baskets being redeemed, and the Order Number previously
provided by the Marketing Agent.
2. If
the
Marketing Agent has not received the Redemption Order Form from the Authorized
Purchaser within 15 minutes after the Marketing Agent receives the phone call
from the Authorized Purchaser referenced in item (1) above, the Marketing Agent
places a phone call to the Authorized Purchaser to enquire about the status
of
the Order. If the Authorized Purchaser does not fax the Redemption Order Form
to
the Marketing Agent within 15 minutes after the Marketing Agent’s phone call,
the Authorized Purchaser’ s Order is cancelled. The Marketing Agent will then
notify the Authorized Purchaser that the Order has been cancelled via telephone
call and via fax.
3. By
placing a Redemption Order, an Authorized Purchaser agrees to (1) deliver the
Redemption Basket to be redeemed through DTC’s book-entry system to the Fund’ s
account with the Custodian not later than 3:00 PM New York time on the third
Business Day following the effective date of the Redemption Order, and (2)
if
required by the General Partner in its sole discretion, enter into or arrange
for a block trade, an exchange for physical or exchange for swap, or any other
over-the-counter energy transaction (through itself or a designated acceptable
broker) with the Fund for the sale of a number and type of futures contracts
at
the closing settlement price for such contracts on the Purchase Order Date,
as
specified in the Redemption Order Form (see Exhibit B). Failure to consummate
(1) and (2) above shall result in the cancellation of the order. The number
and
type of contracts specified shall be determined by the General Partner, in
its
sole discretion, to meet the Fund ’s investment objective and shall be sold as a
result of the Authorized Purchaser’s sale of Units. If
the
Marketing Agent has received the Authorized Purchaser’s Redemption Order Form on
time in accordance with the preceding timing rules, then by 1:00 PM New York
time the Marketing Agent returns to the Authorized Purchaser a copy of the
Redemption Order Form submitted, marking it “Affirmed.” The Marketing Agent
shall
indicate
on the
Redemption Order Form the amount of Treasuries and/or cash, if any, to be
delivered in the Redemption Distribution, and provides details of the method
of
payment to be used for the Transaction Fee and the method of delivery of the
Treasuries and/or cash portion, if any, of the Redemption Distribution.
The
Marketing Agent shall also indicate on the returned Redemption Order Form the
specific number and type of futures contracts to be sold at the closing
settlement price for such contracts on the Redemption Order Date.
4. By
1:00
PM New York time, the Marketing Agent sends a facsimile containing instructions
to the Transfer Agent to transfer on REDEMPTION T+3 from the custodial accounts
of, respectively, the Authorized Purchaser and the Fund (“deallocate”) the total
number of creation Units and the total amount of cash and/or Treasuries required
to settle the Redemption Orders received by the Marketing Agent on REDEMPTION
T.
If the Marketing Agent rejects a Redemption Order pursuant to the Authorized
Purchaser Agreement after the foregoing message is sent, the Marketing Agent
will notify the Transfer Agent of such rejection as
soon as
practicable
but, in
any event, by 1:30 pm New York time the same day, identifying the Authorized
Purchaser whose Redemption Order was rejected and the amount of Units contained
in the rejected Redemption Order. The Transfer Agent will address any such
rejection notifications received after 1:30 pm New York time only on a best
efforts basis.
REDEMPTION
T+3
1. By
3:00
PM New York time, the Authorized Purchaser delivers free to the relevant account
at DTC the Baskets to be redeemed.
2. If
the
Custodian does not receive from a redeeming Authorized Purchaser all Units
comprising the Baskets being redeemed by 3:00 PM New York time, (i) the
Custodian will, only upon instruction from the General Partner, settle the
Redemption Order to the extent of whole Baskets received from the Authorized
Purchaser and (ii) the Marketing Agent will keep the redeeming Authorized
Purchaser’s Redemption Order open until 9:00 AM New York time on the following
Business Day (REDEMPTION T+4) as to the balance of the Redemption Order (such
balance, the “Suspended Redemption Order”). For each day (whether or not a
Business Day) the Redemption Order is held open, the Authorized Purchaser will
be charged the greater of $300 or $30 times the number of Units included in
the
Suspended Redemption Order, as determined in the sole discretion of the Fund.
REDEMPTION
T+4
1. By
9:00
AM New York time, the redeeming Authorized Purchaser must deliver free to the
account at DTC the Basket(s) comprising the Suspended Redemption Order. The
Marketing Agent will settle the Suspended Redemption Order to the extent of
whole Baskets received. Any balance of the Suspended Redemption Order may be
cancelled at the discretion of the General Partner.
2. The
sequence of instructions and events related to the settlement of the Suspended
Redemption Order on REDEMPTION T+4 will be made in the manner provided for
a
Redemption Order under REDEMPTION T+3.
*
* *
*
EXHIBIT A-1
INITIAL
CREATION PROCEDURES
Scope
of
Procedures and Overview
These
procedures (the “Initial Procedures”) describe the process by which one or more
Baskets of United States Gasoline Fund, LP Units (the “Units”) may be purchased
by an Authorized Purchaser. Units may be created only in blocks of 100,000
Units
(each such block, a “Basket”).
For
purposes of these Initial Procedures, a “Business Day” is defined as any day
other than a day on which the American Stock Exchange (“AMEX”), the New York
Mercantile Exchange (“NYMEX”) or the New York Stock Exchange (“NYSE”) is closed
for regular trading.
Baskets
are issu ed pursuant to the Prospectus, which will be delivered by the Marketing
Agent to the Authorized Purchaser prior to its execution of the Authorized
Purchaser Agreement, and are issued in accordance with the Authorized Purchaser
Agreement. Baskets may be issued on any Business Day by the Marketing Agent
in
exchange for cash and/or Treasuries, which the Custodian receives from the
Authorized Purchaser on behalf of the Fund.
Upon
acceptance of the Authorized Purchaser Agreement, the Marketing Agent will
assign a personal identification number (a “PIN number”) to the Authorized
Person authorized to act for the Authorized Purchaser. This will allow the
Authorized Purchaser through its Authorized Person(s) to place the initial
Purchase Order for Baskets.
It
is
anticipated that on the effective date (the date the SEC declares the
registration statement relating to the Fund effective), the initial Authorized
Purchaser will, though it is under no obligation to do so, purchase one or
more
Creations Baskets at a price per Unit of $50.00 It is expected the proceeds
of
that purchase will be invested on that day and that Fund’s initial per unit net
asset value will be established as of 4:00 p.m. New York City time that day.
The
Units are expected to begin trading on the day following the effective date.
Units offered in Creation Baskets on any day after the effective date will
be
offered at the per Unit asset value as of the earlier of 4:00 p.m. New York
time
or the close of trading on the NYSE.
Important
Notes:
Any
Order
is subject to rejection by the General Partner or the Marketing Agent, as agent
of the General Partner, for the reasons set forth in the Authorized Purchaser
Agreement.
All
Orders are subject to the provisions of the Partnership Agreement, the
Prospectus and the Authorized Purchaser Agreement relating to unclear or
ambiguous instructions.
The
Authorized Purchaser, and each distributor offering and selling Units as part
of
the distribution of such Units, shall comply with the prospectus delivery and
disclosure requirements of the 1933 Act as well as the analogous requirements
under the CEA, including, the requirement that prospective investors provide
an
acknowledgement of receipt of such disclosure materials prior to the payment
for
any Units to the extent the foregoing relates to the Authorized Purchaser’s
transactions in, and activities with respect to Units.
CREATION
PROCESS
An
Order
to purchase one or more of the initial Baskets placed by the Authorized
Purchaser with the Marketing Agent by 9:00 AM New York time (the “Order Cut-Off
Time”) on a Business Day (such day, “CREATION T”) results in the transfer to the
Authorized Purchaser’s account at The Depository Trust Company (“DTC”) of
Baskets the Authorized Purchaser has purchased by 12:00 PM New York time on
CREATION T+0 if payment for such Baskets has been received by the Custodian
prior to that time:
CREATION
PROCEDURES
1. By
the
Order Cut-Off Time (the earlier of the close of regular trading on the AMEX
or
9:00 AM New York time), an Authorized Person of the Authorized Purchaser calls
the Marketing Agent at (▇▇▇) ▇▇▇-▇▇▇▇ to notify such agent that the Authorized
Purchaser wishes to place a Purchase Order to create an identified number of
Baskets and to request that it be provided with an order number (an “Order
Number”). The Authorized Person provides a PIN number as identification. The
Marketing Agent provides the Authorized Purchaser with an Order Number for
the
Authorized Purchaser’s Purchase Order Form. The Authorized Purchaser then
completes and faxes to the Marketing Agent the Purchase Order Form included
as
Exhibit B to the Authorized Purchaser Agreement. The Purchase Order Form must
include the Authorized Person’s signature, the number of Baskets being
purchased, and the Order Number.
2. If
the
Marketing Agent has not received the Purchase Order Form from the Authorized
Purchaser within 15 minutes after the Marketing Agent receives the phone call
from the Authorized Purchaser referenced in item (1) above, the Marketing Agent
places a phone call to the Authorized Purchaser to enquire about the status
of
the Order. If the Authorized Purchaser does not fax the Purchase Order Form
to
the Marketing Agent within 15 minutes after the Marketing Agent’s phone call,
the Authorized Purchaser’s Order is cancelled. The Marketing Agent will then
notify the Authorized Purchaser that the Order has been cancelled via telephone
call.
3. By
placing a Purchase Order, an Authorized Purchaser agrees to (1) deposit
Treasuries, cash, or a combination of Treasuries and cash with the Custodian
of
the Fund, and (2) if required by the General Partner in its sole discretion,
enter into or arrange for a block trade, an exchange for physical or exchange
for swap, or any other over-the-counter energy transaction (through itself
or a
designated acceptable broker) with the Fund for the purchase of a number and
type of futures contracts at the closing settlement price for such contracts
on
the Purchase Order Date, as specified in the Purchase Order Form (see Exhibit
B). Failure to consummate (1) and (2) above shall result in the cancellation
of
the order. If
the
Marketing Agent has received the Authorized Purchaser’s Purchase Order Form on
time in accordance with the preceding timing rules, then by 10:00 AM New York
time the Marketing Agent returns to the Authorized Purchaser a copy of the
Purchase Order Form submitted, marking it “Affirmed.” The
Marketing Agent shall also have completed Part II of the Purchase Order Form,
which includes the specific number and type of futures contracts to be purchased
at the closing settlement price on the Purchase Order Date.
4. Based
on
the Purchase Orders placed with it on CREATION T, the Marketing Agent sends
a
facsimile to the Transfer Agent indicating the total number of creation Units
and total amount of cash and/or Treasuries for which the Marketing Agent will
require an allocation into the custodial accounts
of,
respectively, the Authorized Purchaser and the Fund on CREATION T+0 once the
Custodian confirms to the Transfer Agent that the payment for such Baskets
in
same day funds has been received by it from the Authorized Purchaser. If the
Marketing Agent rejects a Purchase Order pursuant to the Authorized Purchaser
Agreement after the foregoing messages are given to the Custodian, the Marketing
Agent will notify the Transfer Agent of such rejection as soon as practicable
but, in any event, by 10:30 AM New York time the same day, identifying the
amount of cash and/or Treasuries contained in the rejected Purchase Order.
The
Transfer Agent will address any such rejection notifications received after
10:30 AM New York time only on a best efforts basis.
EXHIBIT
B
UNITED
STATES GASOLINE FUND, LP
PURCHASE/REDEMPTION
ORDER FORM
CONTACT
INFORMATION FOR ORDER EXECUTION:
Telephone
order number: Telex
Number
Facsimile
number: Business
Number
ALL
ITEMS
IN PART I MUST BE COMPLETED BY AN AUTHORIZED PURCHASER. THE GENERAL PARTNER
AND/OR THE MARKETING AGENT, IN THEIR DISCRETION, MAY REJECT ANY ORDER NOT
SUBMITTED IN COMPLETE FORM.
I. TO
BE COMPLETED BY AUTHORIZED PURCHASER:
|
Date:
|
Time:
|
|
Broker
Name:
|
Firm
Name:
|
|
NSCC
Participant Number:
|
DTC
Participant Number:
|
|
Telex
Number:
|
|
|
Fax
Number:
|
Type
of
Order (Check One)
Amount
Created Units (100,000
Units) ___________
Amount
Written Out ___________
Amount
Redeemed Units (100,000 Units) _____________
Amount
Written Out: ___________
Order
#: ____________________
Check
One:
____ Agree
to
purchase or arrange to purchase futures contracts, exchange for swaps, exchange
for physical or other over-the-counter transaction in amount and type or form
specified in Part II by the Marketing Agent
____ Agree
to
sell or arrange to sell futures contracts, exchange for swaps, exchange for
physical or other over-the-counter transaction in amount and type specified
in
Part II by Marketing Agent
Authorized
Person’s Signature ________________________________
TO
BE COMPLETED BY ALPS DISTRIBUTORS, INC.:
This
certifies that the above order has been:
___________
Accepted
by the
Marketing Agent (for purchase or redemption)
Futures
contracts to be _____ purchased _____ sold:
Type:
_________________________
Month/
Year (e.g., 12 month strip beginning N07 and ending O08):
________________
Quantity:
______________________
Contracts:
_____________________
Closing
Settlement Price: ___________________
| ____ |
Exchange
for swaps, exchange for physical or other over-the-counter transaction
entered into
in form acceptable to United States Gasoline Fund,
LP
|
___________
Declined
-
Reason: ________________________________________________
_____________
__________
_______________________
Date Time Authorized
Signature
EXHIBIT
C
UNITED
STATES GASOLINE FUND, LP
FORM
OF
CERTIFIED AUTHORIZED PERSONS
OF
AUTHORIZED PURCHASER
The
following are the names, titles and signatures of all persons (each an
“Authorized Person”) authorized to give instructions relating to any activity
contemplated by the United States Gasoline Fund, LP Authorized Purchaser
Agreement or any other notice, request or instruction on behalf of the
Authorized Purchaser pursuant to the aforementioned agreement.
Authorized
Purchaser: _______________________
Name:
_________________________
Title: _________________________
Signature:
_________________________
Name:
_________________________
Title:
_________________________
Signature:
_________________________
Name: _________________________
Title: _________________________
Signature: _________________________
The
undersigned, [name], [title] of [company], does hereby certify that the persons
listed above have been duly elected to the offices set forth beneath their
names, that they presently hold such offices, that they have been duly
authorized to act as Authorized Persons pursuant to the United States Gasoline
Fund, LP Authorized Purchaser Agreement by and between [Authorized
Purchaser] and
the
General Partner of United States Gasoline Fund, LP, dated ___________________,
and that their signatures set forth above are their own true and genuine
signatures.
IN
WITNESS WHEREOF, the undersigned has hereby set his/her hand and the seal of
[company] on the date set forth below.
Subscribed
and sworn to before me
this
___
day of ___________, ______.
By:
Name: _________________________
Signature:
_________________________
Notary
Public
EXHIBIT
D
BBH
Pricing Policies
Futures,
Forwards, Swaps, Options and Treasuries
The
pricing policies stated below are used for all BBH clients,
including Mutual Fund Registered Investment Companies. These policies have
been
audited by numerous accounting firms during annual fund audits.
Futures
Futures
traded on exchanges are valued using the closing settlement prices quoted on
the
relevant exchange and obtained from pricing sources, typically Bloomberg or
Reuters.
Forward
Currency Contracts
BBH
obtains the WM Reuters London Close closing spot rates and the WM Reuters London
Close forward point rates on a daily basis. The currency forward contract
pricing model derives the differential in point rates to the expiration date
of
the forward and calculates its present value. The forward is valued at the
net
of the present value and the spot rate.
Swaps
Swaps
and
other similar derivative or contractual type instruments are valued at a price
provided by a single broker or dealer, typically the counterparty. If no such
price is available, the contract is valued at a price at which the counterparty
to such contract would repurchase the instrument or terminate the
contract.
Options
Option
contracts on securities, currencies, indices, futures contracts, commodities
and
other instruments shall be valued at the last sale price on the exchange or
market that is the Primary Market. If a contract did not trade on the Primary
Market, it shall be valued at the last sale price on another exchange or market
where it did trade. If there is no such sale price, the value shall be the
most
recent bid quotation.
Sale
prices and bid quotations indicated above shall be supplied by a Pricing Service
(Reuters, Bloomberg, IDC, etc.). If a Pricing Service is not able to provide
such sale prices or bid quotations, the value shall be determined by taking
the
mean between the bid and the asked quotations provided by a single broker or
dealer, unless the broker or dealer can only provide a bid quotation, in which
case the value shall be such bid quotation.
Except
as
provided below, OTC currency options are valued by uploading the applicable
implied volatility rates from Reuters or Bloomberg. Other inputs are either
uploaded (interest rates, spots) or are specified when the ticker symbols are
set up (expiration date, strike). OTC currency options are then priced by using
the ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ modified Black-Scholes formula, which adjusts for a
constant yield versus a fixed dividend.
Except
as
provided below, OTC equity/index options are priced according to the contract
specifications (days to expiration, current spot index level, interest rates,
dividends, strike price) using the Black-Scholes pricing model, modified for
dividends. The volatility input assumption is interpolated from the previous
day’s price.
US
Treasuries
BBH
uses
an evaluated bid supplied by IDC for treasury prices.
▇
▇▇▇▇▇▇▇
▇
▇▇▇▇▇▇
▇▇▇▇▇▇ GASOLINE FUND, LP
OFFICER’S
CERTIFICATE
The
undersigned, a duly authorized officer of Victoria Bay Asset Management, LLC,
a
Delaware limited liability company (the “General Partner”), and pursuant to
Section 13(d) of the United States Gasoline Fund, LP Authorized Purchaser
Agreement (the “Agreement”), dated as of _____________________, by and between
the General Partner and [Authorized
Purchaser],
(“the
Authorized Purchaser”), hereby certifies that:
1. Each
of
the following representations and warranties of the General Partner is true
and
correct in all material respects as of the date hereof:
(a) the
Prospectus does not contain an untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; the Registration Statement complies in all material respects
with the requirements of the 1933 Act and the Prospectus complies in all
material respects with the requirements of the 1933 Act and any statutes,
regulations, contracts or other documents that are required to be described
in
the Registration Statement or the Prospectus or to be filed as exhibits to
the
Registration Statement have been so described or filed; the conditions to the
use of Form S-1 or S-3, if applicable, have been satisfied; the Registration
Statement does not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus does not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the General Partner makes no warranty or representation with respect to
any
statement contained in the Registration Statement or any Prospectus in reliance
upon and in conformity with information concerning the Authorized Purchaser
and
furnished in writing by or on behalf of the Authorized Purchaser to the General
Partner expressly for use in the Registration Statement or such Prospectus;
and
neither the General Partner nor any person known to the General Partner acting
on behalf of the Fund has distributed nor will distribute any offering material
other than the Registration Statement or the Prospectus;
(b) the
Fund
has been duly formed and is validly existing as an investment fund under the
laws of the State of Delaware, as described in the Registration Statement and
the Prospectus, and as described in the Prospectus, the Marketing Agent is
authorized to issue and deliver the Baskets to the Authorized
Purchaser;
(c) the
General Partner has been duly organized and is validly existing as a limited
liability company in good standing under the laws of the State of Delaware,
with
full power and authority to conduct its business as described in the
Registration Statement and the Prospectus, and has all requisite power and
authority to execute and deliver this Agreement;
3
(d) the
General Partner is duly qualified and is in good standing in each jurisdiction
where the conduct of its business requires such qualification; and the Fund
is
not required to so qualify in any jurisdiction;
(e) the
outstanding Units have been duly and validly issued and are fully paid and
non-assessable and free of statutory and contractual preemptive rights, rights
of first refusal and similar rights;
(f) the
Units
conform in all material respects to the description thereof contained in the
Registration Statement and the Prospectus and the holders of the Units will
not
be subject to personal liability by reason of being such holders;
(g) this
Agreement has been duly authorized, executed and delivered by the General
Partner and constitutes the valid and binding obligations of the General
Partner, enforceable against the General Partner in accordance with its
terms;
(h) the
General Partner is not in breach or violation of or in default under (nor has
any event occurred which with notice, lapse of time or both would result in
any
breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a part of such indebtedness
under) its constitutive documents, or any indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the General Partner
is
a party or by which any of them or any of their properties may be bound or
affected, and the execution, delivery and performance of this Agreement, the
issuance and sale of Units to the Authorized Purchaser hereunder and the
consummation of the transactions contemplated hereby does not conflict with,
result in any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result
in
any breach or violation of or constitute a default under), respectively, the
amended and restated limited liability company agreement of the General Partner,
or any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the General Partner is a party or by which,
respectively, the General Partner or any of its properties may be bound or
affected, or any federal, state, local or foreign law, regulation or rule or
any
decree, judgment or order applicable to the General Partner or the Fund;
(i)
no
approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency is required in connection with the issuance and sale of Creation
Baskets to the Authorized Purchaser hereunder or the consummation by the General
Partner or the Fund of the transactions contemplated hereunder other than
registration of the Units under the 1933 Act and the filing of the Prospectus
with the National Futures Association, which has been effected, and any
necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Units are being offered or under the rules and
regulations of the American Stock Exchange;
4
(j) except
as
set forth in the Registration Statement and the Prospectus (i) no person has
the
right, contractual or otherwise, to cause the Fund to issue or sell to it any
Units or other equity interests of the Fund, and (ii) no person has the right
to
act as an underwriter or as a financial advisor to the Fund in connection with
the offer and sale of the Units, in the case of each of the foregoing clauses
(i), and (ii), whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Units as contemplated thereby or
otherwise; no person has the right, contractual or otherwise, to cause the
General Partner on behalf of the Fund or the Fund to register under the 1933
Act
any other equity interests of the Fund, or to include any such shares or
interests in the Registration Statement or the offering contemplated thereby,
whether as a result of the filing or effectiveness of the Registration Statement
or the sale of the Units as contemplated thereby or otherwise;
(k) each
of
the General Partner and the Fund has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has obtained
all
necessary authorizations, consents and approvals from other persons, in order
to
conduct its respective business; the General Partner is not in violation of,
or
in default under, or has not received notice of any proceedings relating to
revocation or modification of, any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or rule or
any
decree, order or judgment applicable to the General Partner;
(l) all
legal
or governmental proceedings, affiliate transactions, off-balance sheet
transactions, contracts, licenses, agreements, leases or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement have been
so
described or filed as required;
(m) except
as
set forth in the Registration Statement and the Prospectus, there are no
actions, suits, claims, investigations or proceedings pending or threatened
or
contemplated to which the General Partner or the Fund, or any of the General
Partner’s directors or officers, is or would be a party or of which any of their
respective properties are or would be subject at law or in equity, before or
by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency;
(n) [______________],
whose report on the audited financial statements of the Fund is filed with
the
SEC as part of the Registration Statement and the Prospectus, are independent
public accountants as required by the 1933 Act;
(o) the
audited financial statement(s) included in the Prospectus, together with the
related notes and schedules, presents fairly the financial position of the
Fund
as of the date indicated and has been prepared in compliance with the
requirements of the 1933 Act and in conformity with generally accepted
accounting principles; there are no financial statements (historical or pro
forma) that are required to be included in the Registration Statement and the
Prospectus that are not included as required; and the Fund does not have any
material liabilities or obligations, direct or contingent (including any
off-balance sheet obligations), not disclosed in the Registration Statement
and
the Prospectus;
5
(p) subsequent
to the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been (i) any material adverse
change, (ii) any transaction which is material to the General Partner or the
Fund taken as a whole, (iii) any obligation, direct or contingent (including
any
off-balance sheet obligations), incurred by the General Partner or the Fund,
which is material to the Fund, (iv) any change in the Units purchased by the
Authorized Purchaser or outstanding indebtedness of the General Partner or
the
Fund or (v) any dividend or distribution of any kind declared, paid or made
on
such Units;
(q) the
Fund
is not and, after giving effect to the offering and sale of the Units, will
not
be an “investment company” or an entity “controlled” by an “investment company,”
as such terms are defined in the Investment Company Act;
(r) except
as
set forth in the Registration Statement and the Prospectus, the General Partner
and the Fund own, or have obtained valid and enforceable licenses for, or other
rights to use, the inventions, patent applications, patents, trademarks (both
registered and unregistered), tradenames, copyrights, trade secrets and other
proprietary information described in the Registration Statement and the
Prospectus as being owned or licensed by them or which are necessary for the
conduct of their respective businesses, (collectively, “Intellectual Property”);
(i)
to
the knowledge of the General Partner or the Fund, there are no third parties
who
have or will be able to establish rights to any Intellectual Property, except
for the ownership rights of the owners of the Intellectual Property which is
licensed to the General Partner or the Fund;
(ii)
to
the knowledge of the General Partner or the Fund, there is no infringement
by
third parties of any Intellectual Property;
(iii)
there is no pending or, to the knowledge of the General Partner or the Fund,
threatened action, suit, proceeding or claim by others challenging the General
Partner or the Fund’s rights in or to any Intellectual Property, and the General
Partner and the Fund are unaware of any facts which could form a reasonable
basis for any such claim;
(iv)
there is no pending or, to the knowledge of the General Partner or the Fund,
threatened action, suit, proceeding or claim by others challenging the validity
or scope of any Intellectual Property as to which the General Partner and the
Fund have no knowledge of any such pending or threatened claims, and the General
Partner and the Fund are unaware of any facts which could form a reasonable
basis for any such claim;
(v)
there
is no pending or, to the knowledge of the General Partner or the Fund,
threatened action, suit, proceeding or claim by others that the General Partner
or the Fund infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the General Partner
and
the Fund are unaware of any facts which could form a reasonable basis for any
such claim; and
(vi)
to
the knowledge of the General Partner or the Fund, there is no patent or patent
application that contains claims that interfere with the issued or pending
claims of any of the Intellectual Property; and
(s) all
tax
returns required to be filed by the General Partner have been filed, and all
taxes and other assessments of a similar nature (whether imposed directly or
through withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have been paid;
and no tax returns or tax payments are due with respect to the Fund as of the
date of this Agreement;
6
(t) the
General Partner has not sent or received any communication regarding termination
of, or intent not to renew, any of the contracts or agreements referred to
or
described in, or filed as an exhibit to, the Registration Statement, and no
such
termination or non-renewal has been threatened by the General Partner or any
other party to any such contract or agreement;
(u) on
behalf
of the Fund, the General Partner has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 and 15d-14
under
the Exchange Act, giving effect to the rules and regulations, and SEC staff
interpretations (whether or not public), thereunder)); such disclosure controls
and procedures are designed to ensure that material information relating to
the
Fund, is made known to the General Partner, and such disclosure controls and
procedures are effective to perform the functions for which they were
established; on behalf of the Fund, the General Partner has been advised of:
(i)
any significant deficiencies in the design or operation of internal controls
which could adversely affect the Fund’s ability to record, process, summarize,
and report financial data; and (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Fund’s internal
controls; any material weaknesses in internal controls have been identified
for
the Fund’s auditors;
(w) any
statistical and market-related data included in the Registration Statement
and
the Prospectus are based on or derived from sources that the General Partner
believes to be reliable and accurate, and the General Partner has obtained
the
written consent to the use of such data from such sources to the extent
required; and
(x) neither
the General Partner, nor any of the General Partner’s directors, members,
officers, affiliates or controlling persons has taken, directly or indirectly,
any action designed, or which has constituted or might reasonably be expected
to
cause or result in, under the Exchange Act or otherwise, the stabilization
or
manipulation of the price of any security or asset of the Fund to facilitate
the
sale or resale of the Units.
For
purposes hereof, the term “ Registration Statement” shall mean the Registration
Statement as amended or supplemented from time to time to the date hereof,
the
term “Preliminary Prospectus” shall mean the preliminary prospectus dated
______________, relating to the Units and any other prospectus dated prior
to
effectiveness of the Registration Statement relating to the Units, and the
term
“Prospectus” shall mean the Prospectus as amended or supplemented from time to
time to the date hereof.
2. Each
of
the obligations of the General Partner to be performed by it on or before the
date hereof pursuant to the terms of the Agreement, and each of the provisions
thereof to be complied with by the General Partner on or before the date hereof,
has been duly performed and complied with in all material respects. Capitalized
terms used, but not defined herein shall have the meanings assigned to such
terms in the Agreement.
7
IN
WITNESS WHEREOF, I have hereunto, on behalf of the General Partner, subscribed
my name this ___ day of ________, ____.
By:
________________________
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
President
I,
▇▇▇▇▇▇
▇▇▇, in my capacity as Secretary, hereby certify that ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is
the
duly elected President of the General Partner, and that the signature set forth
immediately above is his genuine signature.
IN
WITNESS WHEREOF, I have hereunto set my hand as of the date first set forth
above.
By:
________________________
Name:
▇▇▇▇▇▇ ▇▇▇
Title:
Secretary
8