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LP AGREEMENT

Limited Partnership Agreement

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New York Oil ETF, LP

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Title: LP AGREEMENT
Governing Law: Delaware     Date: 5/16/2005

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Exhibit 3.1

NEW YORK OIL ETF, LP
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP

     This First Amended and Restated Agreement of Limited Partnership (this “Agreement”), executed on [DATE] , is among Standard Asset Management, LLC, a Delaware limited liability company, as General Partner, Wainwright Holdings, Inc., a Delaware corporation, as the Organizational Limited Partner, and the Initial Limited Partner, as a Limited Partner, together with any Persons who shall hereafter be admitted as Partners in accordance with this Agreement.

     NOW THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound, the Partners hereby agree as follows:

Article 1
DEFINITIONS

     As used in this Agreement, the following terms shall have the following meanings:

     1.1 “Accounting Period” means the period (i) beginning on either (A) the date of this Agreement or (B) the first day following the last day of the immediately preceding Accounting Period, as the case may be, and (ii) ending on the earliest of (A) the last Business Day of a month, (B) the effective date of dissolution of the Company, and (C) such other day or days in addition thereto or in substitution therefor as may from time to time be determined by the General Partner in its discretion either in any particular case or generally.

     1.2 “Act” shall mean the Revised Uniform Limited Partnership Act of the State of Delaware, as amended from time to time.

     1.3 “Additional Limited Partner” shall mean a Person admitted to the Partnership as a Limited Partner pursuant to Section 11.4 and who is shown as such on the books and records of the Partnership.

     1.4 “Affiliate” shall mean, when used with reference to a specified Person, (i) any Person who directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the specified Person or (ii) any Person that is an officer of, partner in, or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the specified person is an officer, partner or trustee, or with respect to which the specified Person serves in a similar capacity.

 


 

     1.5 “Assignee” shall means Record Holder that has not been admitted to the Partnership a Substituted Limited Partner.

     1.6 “Agreement” shall mean this Agreement of Limited Partnership, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires.

     1.7 “Business Day” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States shall not be regarded as a Business Day.

     1.8 “Capital Account” means, an account established on the books and records of the Company for each Partner as set forth in Section 4.1.

     1.9 “Capital Contribution” shall mean the total amount of money or agreed upon value of property contributed to the Partnership by all the Partners or any class of Partners or any one Partner, as the case may be (or the predecessor holders of the Interests of such Partner or Partners).

     1.10 “Capital Transaction” shall mean a sale of all or substantially all of the assets of the Partnership not in the ordinary course of business.

     1.11 “Certificate” shall mean a certificate, substantially in the form of Exhibit B to this Agreement or in such other forms as may be adopted by the General Partner in its sole discretion, issued by the Partnership evidencing ownership of one or more Units.

     1.12 “Close of Business” means 5:00 PM (New York City time).

     1.13 “Creation Basket” shall mean 100,000 shares of the Partnership.

     1.14 “Departing Partner” shall mean a former General Partner, from and after the effective date of any withdrawal or removal of such former General Partner

     1.15 “Distributable Cash” shall mean with respect to any period all cash revenues of the Partnership (not including (i) Capital Contributions, (ii) funds received by the partnership in respect of indebtedness incurred by the Partnership, (iii) interest or other income earned on temporary investment of Partnership funds pending utilization, and (iv) proceeds from any Capital Transaction), less the sum of the following: (x) all amounts expended by the Partnership pursuant to this Agreement in such period and (y) such working capital or reserves or other amounts as the General Partner reasonably deems to be necessary or appropriate for the proper operation of the Partnership’s business or its winding up and liquidation. The General Partner in its sole discretion may from time to time declare other funds of the Partnership to be Distributable Cash.

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     1.16 “General Partner” shall mean Standard Asset Management, LLC, a Delaware limited liability company, or any Person who, at the time of reference thereto, serves as a general partner of the Partnership.

     1.17 “Initial Limited Partner” shall mean [NAME] , in its capacity as a Limited Partner.

     1.18 “Limited Partner” shall mean the Organizational Limited Partner prior to its withdrawal from the Partnership and any other Person who is a limited partner (whether the Initial Limited Partner, a Limited Partner admitted pursuant to Section 11 or an assignee of an Interest who is admitted as a Limited Partner) at the time of reference thereto, in such Person’s capacity as a limited partner of the Partnership.

     1.19 “Management Fee” shall mean the management fee paid to the General Partner pursuant to Section 3.1.2.

     1.20 “Net Asset Value” means the net asset value of the Partnership as determined by the General Partner in accordance with the current Prospectus of the Partnership.

     1.21 “Opinion of Counsel” means a written opinion of counsel (who may be regular counsel to the Partnership or the General Partner) acceptable to the General Partner.

     1.22 “Organizational Limited Partner” shall mean Wainwright Holdings, Inc., a Delaware corporation, in its capacity as the organizational limited partner of the Partnership pursuant to this Agreement.

     1.23 “Outstanding” shall mean, with respect to the Units or other partnership securities, as the case may be, all Units or other partnership securities of that are issued by the Partnership and reflected as outstanding on the Partnership’s books and records as of the date of determination.

     1.24 “Partner” shall mean the General Partner or any Limited Partner. “Partners” shall mean the General Partner and all Limited Partners (unless otherwise indicated).

     1.25 “Partnership” shall mean the limited partnership hereby formed, as such limited partnership may from time to time be constituted.

     1.26 “Person” shall mean any natural person, partnership, limited partnership, trust, estate, corporation, association, custodian, nominee or any other individual or entity in its own or any representative capacity.

     1.27 “Profits or Losses” shall mean, with respect to any given Accounting Period, the excess (if any) of:

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(i)  

the Net Asset Value of the Company as of the Valuation Time on the Valuation Date for such Accounting Period (after giving effect to adjustments deemed appropriate by the General Partner (including taking into account any distributions made during such Accounting Period)), over

 

 

(ii)  

the Net Asset Value of the Company as of the Valuation Time on the Valuation Date immediately preceding the commencement of such Accounting Period (after giving effect to adjustments deemed appropriate by the General Partner (including taking into account any redemptions that occur during such Accounting Period and any Capital Contributions received during such Accounting Period)).

 

 

If the amount determined pursuant to the preceding sentence is a positive number, such amount shall be the “Profit” for the Accounting Period and if such amount is a negative number, such amount shall be the “Loss” for the Accounting Period.

     1.28 “Prospectus” shall mean the New York Oil ETF, LP Prospectus, dated ___, 2005, as the same may have been amended or supplemented, used in connection with the offer and sale of Interests.

     1.29 “Profits or Losses” shall mean the profits or losses of the Partnership for Federal income tax purposes including, without limitation, each item of Partnership income, gain, loss, deduction or credit.

     1.30 “Record Date” shall mean the date established by the General Partner for determining (a) the identity of Limited Partners (or Assignees if applicable) entitled to notice of, or to vote at any meeting of Limited Partners or entitled to vote by ballot or give approval of Partnership action in writing without a meeting or entitled to exercise rights in respect of any action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution.

     1.31 “Record Holder” shall mean the Person in whose name such Unit is registered on the books of the Transfer Agent as of the close of business on a particular Business Day.

     1.32 “Redeemable Units” shall mean any Units for which a redemption notice has been given, and has not been withdrawn.

     1.33 “Revolving Credit Facility” shall mean means a revolving credit facility for a maximum amount of $50 million which the Partnership has entered into with a syndicate of commercial banks.

     1.34 “Substituted Limited Partner” shall mean a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 11.2 in place of and with all the

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rights of a Limited Partner and who is shown as a Limited Partner on the books and records of the Partnership.

     1.35 “Tax Certificate” means a Form W-9 (or the substantial equivalent thereof) in the case of Limited Partner that is a U.S. person or a Form W-8BEN or other applicable form in the case of a Limited Partner that is not a U.S. person.

     1.36 “Tax Matters Partner” means the General Partner as set forth in Section 5.6.

     1.37 “Transfer Agent” shall mean [___] or such bank, trust company or other Person (including, without limitation, the General Partner or one of its Affiliates) as shall be appointed from time to time by the Partnership to act as registrar and transfer agent for the Units or any applicable Partnership Securities.

     1.38 “Transfer Application” shall mean an application and agreement for transfer of Units in the form set forth on the back of a Unit Certificate or in a form substantially to the same effect in a separate instrument.

     1.39 “Underwriter” shall mean each Person named as an underwriter in the Underwriting Agreement who purchased Units pursuant thereto.

     1.40 “Underwriting Agreement” shall mean the underwriting agreement dated [___] , among the Underwriters, the Partnership, the Operating Companies and the General Partner providing for the purchase Units by such Underwriter.

     1.41 “Unit” shall mean an interest of a Limited Partner or an assignee of the Partnership representing such fractional part of the interests of all Limited Partners and assignees as shall be determined by the General Partner pursuant to this Agreement.

     1.42 “Valuation Date” means, (i) the last Business Day of any Accounting Period, (ii) such other relevant date as required pursuant to this Agreement, and (iii) such other days as the General Partner in its sole discretion may from time to time determine.

     1.43 “Valuation Time” means (i) Close of Business on a Valuation Date or (ii) such other time or day as the Managing Member in its discretion may determine from time to time either in any particular case or generally.

Article 2
FORMATION

     2.1 The General Partner and the Organizational Limited Partner have previously formed the Partnership as a limited partnership pursuant to the Act and hereby amend and restate the original Agreement of Limited Partnership of the Partnership in its entirety. This amendment and restatement shall become effective on the date of this Agreement. The rights and liabilities of the Partners shall be as provided in the Act, except as herein otherwise expressly provided. The Partnership shall continue without interruption as a limited partnership pursuant to the provisions of the Act.

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     2.2 The name of the Partnership shall be New York Oil ETF, LP; however the business of the Partnership may be conducted, upon compliance with all applicable laws, under any other name designated in writing by the General Partner to the Limited Partners.

     2.3 The Partnership’s principal place of business shall be located at 1320 Harbor Bay Parkway, Suite 145, Alameda, CA 94502, or such other place as the General Partner may designate from time to time. The Registered Agent for the Partnership is Corporation Service Company and the registered office is located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, County of New Castle. The Partnership may maintain such other offices at such other places, as the General Partner deem advisable.

     2.4 The investment objective of the Partnership is for the net asset value of the shares issued by the Partnership to reflect the performance of the price of light, sweet crude oil, less the Partnership’s expenses. The Partnership invests in Oil Futures Contracts, which are futures contracts for light, sweet crude oil that are traded on the New York Mercantile Exchange, and other oil interests such as options on oil futures contracts and forward contracts for oil.

     2.5 The term of the Partnership shall be from the date of its formation in perpetuity, unless earlier terminated in accordance with the terms of Article 13.

     2.6 The General Partner shall execute, file and publish all such certificates, notices, statements or other instruments required by law for the formation or operation of a limited partnership in all jurisdictions where the Partnership may elect to do business. A copy of this Agreement may be filed as the Certificate of Limited Partnership of the Partnership. The General Partner shall not be required to deliver or mail to Limited Partners a copy of the certificate of limited partnership of the Partnership or any certificate of amendment thereto.

     2.7 The Partnership shall be empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes, business, protection and benefit of the Partnership.

     2.8 The business and affairs of the General Partner shall be managed by seven directors, four of whom may also be executive officers of the General Partner. The General Partner shall establish and maintain an audit committee in compliance with, and granted the requisite authority and funding pursuant to, any applicable (1) federal securities laws and regulations, including the Sarbanes-Oxley Act of 2002, and (2) rules, policies and procedures of any national securities exchange on which the securities issued by the Partnership are listed and traded.

Article 3
PARTNERS AND CAPITAL CONTRIBUTIONS

     3.1 General Partner.

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              3.1.1 The name of the General Partner is Standard Asset Management, LLC, and maintains its principal business office at 1320 Harbor Bay Parkway, Suite 145, Alameda, CA 94502.

              3.1.2 In consideration of management and administrative services rendered by the General Partner, the Company shall pay the Management Fee to the General Partner (or such other person or entity designated by the General Partner). The Management Fee shall be payable monthly in advance as set forth in the then current [Management Agreement (Insert appropriate title of agreement)] with the General Partner, determined as of the beginning of Close of Business as of the last Business Day of the preceding month and due and payable on the first Business Day of such month. The initial Management Fee shall be set forth on Exhibit C attached hereto, as may be amended from time to time. The General Partner may, in its sole discretion, waive all or part of the Management Fee.

              3.1.3 In connection with the formation of the Partnership under the Act, the General Partner acquired a 2% interest in the profits and losses of the Partnership, was admitted as the General Partner of the Partnership and later made an initial capital contribution to the Partnership in the amount of $20.00, and the Organizational Limited Partner acquired a 98% interest in the profits and losses of the Partnership, was admitted as a Limited Partner of the Partnership and later made an initial capital contribution to the Partnership in the amount of $980.00. As of the date hereof, the interest of the Organizational Limited Partner shall be redeemed, the initial capital contribution of the Organizational Limited Partner shall be refunded, and the Organizational Limited Partner shall thereupon withdraw and cease to be a Limited Partner. Ninety-eight percent (98%) of any interest or other profit that may have resulted from the investment or other use of such initial capital contributions shall be allocated and distributed to the Organizational Limited Partner, and the balance thereof shall be allocated and distributed to the General Partner. As of the first date of the offering, the General Partner shall be issued an appropriate number of Units based on its initial capital contribution and on the initial offering price specified in Section 3.2. The General Partner may but shall not be required to make any Capital Contributions to the Partnership on or after the date hereof. If the General Partner does make any Capital Contributions to the Partnership on or after the date hereof, it shall be issued an appropriate number of Units based on the net asset value per Unit as of the date of issuance.

              3.1.4 The General Partner may not, without written approval of the specific act by all of the Limited Partners or by other written instrument executed and delivered by all of the Limited Partners subsequent to the date of this Agreement, take any action in contravention of this Agreement, including, without limitation, (i) any act that would make it impossible to carry on the ordinary business of the Partnership, except as otherwise provided in this Agreement; (ii) possess Partnership property, or assign any rights in specific Partnership property, for other than a Partnership purpose; (iii) admit a Person as a Partner, except as otherwise provided in this Agreement; (iv) amend this Agreement in any manner, except as otherwise provided in this Agreement or applicable law; or (v) transfer its interest as general partner of the Partnership, except as otherwise provided in this Agreement. C

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              3.1.5 Other than in connection with the issuance or redemption of Units, or upon termination of the Partnership as contemplated by this Agreement, the General Partner may not sell, exchange or otherwise dispose of all or substantially all of the Partnership’s assets in a single transaction or a series of related transactions (including by way of merger, consolidation or other combination with any other Person) or approve on behalf of the Partnership the sale, exchange or other disposition of all or substantially all of the assets of all of Partnership, taken as a whole, without the approval of at least a majority of the Limited Partners; provided, however, that this provision shall not preclude or limit the General Partner’s ability to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of the Partnership’s assets and shall not apply to any forced sale of any or all of the Partnership’s assets pursuant to the foreclosure of, or other realization upon, any such encumbrance.

              3.1.6 Unless approved by a majority of the Partners, the General Partner shall not take any action or refuse to take any reasonable action the effect of which, if taken or not taken, as the case may be, would be to cause the Partnership, to the extent it would materially and adversely affect the Limited Partners, to be taxable as a corporation for federal income tax purpose.

              3.1.7 Notwithstanding any other provision of this Agreement, the General Partner is not authorized to institute or initiate on behalf of, or otherwise cause, the Partnership to:

                        (a) make a general assignment for the benefit of creditors;

                        (b) file a voluntary bankruptcy petition; or

                        (c) file a petition seeking for the Partnership a reorganization, arrangement, composition, readjustment liquidation, dissolution or similar relief under any law.

     3.2 Initial Limited Partner. The name, business address and Capital Contribution of the Initial Limited Partner are [insert information] . The Initial Limited Partner shall purchase the initial Creation Basket of 500,000 Units at an initial offering price per share equal to the opening of near-month Oil Futures Contracts as traded and reported on the New York Mercantile Exchange on the first day of the offering.

     3.3 No Partner shall have any right to demand or receive the return of his Capital Contribution to the Partnership. No Partner shall be entitled to interest on any Capital Contribution to the Partnership or on such Partner’s capital account.

Article 4
ALLOCATION OF PROFITS OR LOSSES; DISTRIBUTIONS

     4.1 Capital Account. There shall be established for each Partner (or a beneficial owner of Units held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Internal Revenue Code or any other method acceptable to the General

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Partner in its sole discretion (a “Beneficial Owner”)) on the books and records of the Partnership a capital account (a “Capital Account”), the balance of which shall initially be zero. It is intended that each Partner’s Capital Account shall be maintained at all times in a manner consistent with Section 704 of the Code and applicable Treasury regulations thereunder, and that the provisions hereof relating to the Capital Accounts shall be interpreted in a manner consistent therewith. For each Accounting Period, the Capital Account of each Member shall be:

               (i) credited with the amount of any Capital Contributions made by such Partner during such Accounting Period;

               (ii) credited with any allocations of Profits made to such Partner for such Accounting Period;

               (iii) debited by any allocation of Losses made to such Partners for such Accounting Period; and

               (iv) debited by the amount of cash paid to such Partner as an amount withdrawn or distributed to such Partner during such Accounting Period, or, in the case of any payment of a withdrawal or distribution in kind, the fair value of the property paid or distributed during such Accounting Period.

     4.2 Allocation of Profits and Losses. Except as provided in this Article 4, as of the Valuation Time on each Valuation Date (prior to giving effect to any redemptions occurring on such date), the Partnership’s Profits and Losses for such Accounting Period shall be allocated among the Partners pro rata based on their Units.

     4.3 Allocations to Redeeming Partners. In the event that the Partnership redeems Units of any Partner (a “Redeeming Partner”) on any date other than a Valuation Date, the Partnership shall allocate Profit or Loss to such Partner for such Accounting Period by treating the date of redemption as a Valuation Date (an “Interim Valuation Date”) solely with respect to the Units redeemed. A pro rata portion (based on the number of Units outstanding immediately prior to the redemption) of the Partnership’s Profit or Loss for the Accounting Period through the Interim Valuation Date shall be allocated to the Redeeming Partner with respect to the Units redeemed. No Profits or Losses shall be allocated to any Partners other than the Redeeming Partner on an Interim Valuation Date. For the avoidance of doubt, it is intended that the Profits and Losses for an Accounting Period will be adjusted as necessary to reflect the allocation of Profits or Losses to the Redeeming Partner under this Section 4.3.

     4.4 Allocation of Taxable Income and Losses.

            4.4.1 Except as provided in 4.4.3, for U.S. federal income tax purposes, each item of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners as nearly as possible in the same manner as the corresponding item of income, expense, gain or loss is allocated pursuant to the other provisions of this Article 4. The General Partner shall be authorized in its discretion to make appropriate A

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adjustments to the allocation of items pursuant to this Article 4 to comply with Section 704 of the Code and applicable Treasury regulations thereunder.

            4.4.2 Notwithstanding anything else contained in this Article 4, if any Partner has a deficit Capital Account for any Accounting Period as a result of any adjustment of the type described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4) through (6), then the Partnership’s income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate such deficit as quickly as possible. Any special allocation of items of income or gain pursuant to this Section 4.4.2 shall be taken into account in computing subsequent allocations pursuant to this Article 4 so that the cumulative net amount of all items allocated to each Partner shall, to the extent possible, be equal to the amount that would have been allocated to such Partner if there had never been any allocation pursuant to the first sentence of this Section 4.4.2.

            4.4.3 In accordance with Section 704(c) of the Code (and the principles thereof) and the Treasury Regulations issued with respect thereto, income, gain, loss and deduction with respect to any property contributed to the capital of the Company and with respect to assets of the Company that have been revalued under Treasury Regulations Sections 1.704-1(b)(2)(iv), solely for tax purposes, shall be allocated among the Partners so as to take into account any variation between the adjusted basis of such property to the Partnership for Federal income tax purposes and its value as of the time of the contribution or revaluation of Partnership assets, including, but not limited to, special allocations to a contributing Partner that are required under Code Section 704(c) (and the principles thereof) to be made upon distributions of such property to any non-contributing Partner. This provision shall be construed to authorize the General Partner to utilize such reasonable method or methods to take into account any such variation as the General Partner shall determine to be appropriate and in compliance with Treasury Regulation Section 1.704-3(e)(3).

     4.5 The Partnership intends to allocate the Profits or Losses for an Accounting Period to those person who hold the Units as of the Close of Business as of the last Business Day of the Accounting Period. The General Partner may revise, alter or otherwise modify this method of allocation as it determines necessary to the extent permitted or required by Section 706 of the Code and the regulations or ruling promulgated thereunder.

     4.6 Allocations that would otherwise be made to a Limited Partner under the provisions of this Article 4 shall instead be made to the beneficial owner of Units held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the General Partner in its sole discretion.

     4.7 For the proper administration of the Partnership or for the preservation of uniformity of the Units, the General Partner shall have sole discretion to (i) adopt such conventions as it deems appropriate; (ii) make special allocations for federal income tax purposes of income (including, without limitation, gross income) or deductions; and (iii) amend the provisions of this Agreement as appropriate (x) to reflect the proposal or

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promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of the Code or (y) otherwise to preserve or achieve uniformity of the Units.

Article 5
RECORDS AND ACCOUNTING; REPORTS

     5.1 Records and Accounting. The Partnership will keep proper books of record and account of the Partnership at its office located in 1320 Harbor Bay Parkway, Suite 145, Alameda, CA 94502 or such office, including of an administrative agent, as it may subsequently designate upon notice. These books and records are open to inspection by any person who establishes to the Partnership’s satisfaction that such person is a Limited Partner upon reasonable advance notice at all reasonable times during the usual business hours of the Partnership.

     5.2 Annual Reports. Within 90 days after the end of each fiscal year, the General Partner shall cause to be delivered to each Person who was a Partner at any time during the fiscal year, an annual report containing the following:

            (i) financial statements of the Partnership, including, without limitation, a balance sheet as of the end of the Partnership’s fiscal year and statements of income, Partners’ equity and changes in financial position, for such fiscal year, which shall be prepared in accordance with generally accepted accounting principles consistently applied and shall be reviewed by a firm of independent certified public accountants,

            (ii) a general description of the activities of the Partnership during the period covered by the report, and

            (iii) a report of any material transactions between the Partnership and the General Partner or any of its Affiliates, including fees or compensation paid by the Partnership and the services performed by the General Partner or any such Affiliate of or such fees or compensation.

     5.3 Quarterly Reports. Within 45 days after the end of each quarter of each fiscal year, the General Partner shall cause to be delivered to each Person who was a Partner at any time during the quarter then ended, a quarterly report containing a balance sheet and statement of income for the period covered by the report, each of which may be unaudited but shall be certified by the General Partner as fairly presenting the financial position and results of operations of the partnership during the period covered by the report. The report shall also contain a description of any material event regarding the business of the Partnership during the period covered by the report.

     5.4 Tax Information. The General Partner shall use its best efforts to prepare and to transmit a U.S. federal income tax form K-1 for each Partner, Assignee, or Beneficial Owner a report setting forth in sufficient detail such transactions effected by the Partnership during each Fiscal Year as shall enable each Partner, Assignee, or

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beneficial owner to prepare its U.S. federal income tax return, if any, within a reasonable period after the end of such Fiscal Year.

     5.5 Tax Returns. The General Partner shall cause income tax returns of the Partnership to be prepared and timely filed with the appropriate authorities.

     5.6 Tax Matters Partner. The General Partner is hereby designated as the Partnership’s “Tax Matters Partner,” as defined under Section 6231(a)(7) of the Code. The General Partner is specifically directed and authorized to take whatever steps the General Partner, in its discretion, deems necessary or desirable to perfect such designation, including filing any forms or documents with the U.S. Internal Revenue Service and taking such other action as may from time to time be required under U.S. Treasury regulations. Any Partner shall have the right to participate in any administrative proceedings relating to the determination of Partnership items at the Partnership level. Expenses of such administrative proceedings undertaken by the Tax Matters Partner shall be expenses of the Partnership. Each Partner who elects to participate in such proceedings shall be responsible for any expenses incurred by such Partner in connection with such participation. The cost of any resulting audits or adjustments of a Partner’s tax return shall be borne solely by the affected Partner. In the event of any audit, investigation, settlement or review, for which the General Partner is carrying out the responsibilities of Tax Matters Partner, the General Partner shall keep the Partners reasonably apprised of the status and course of such audit, investigation, settlement or review and shall forward copies of all written communications from or to any regulatory, investigative or judicial authority with regard thereto.

Article 6
FISCAL AFFAIRS

     6.1 Fiscal Year. The fiscal year of the Partnership shall be the calendar year.

     6.2 Partnership Funds. Pending application or distribution, the funds of the Partnership shall be deposited in such bank account or accounts, or invested in such interest-bearing or non-interest bearing investment, including, without limitation, checking and savings accounts, certificates of deposit and time or demand deposits in commercial banks, U.S. government securities and securities guaranteed by U.S. government agencies as shall be designed by the General Partner. Such funds shall not be commingled with funds of any other Person. Withdrawals therefrom shall be made upon such signatures as the General Partner may designate.

     6.3 Accounting Decisions. All decisions as to accounting principles, except as specifically provided to the contrary herein, shall be made by the General Partner on a basis that is acceptable to the Partnership’s independent certified public accountants.

     6.4 Tax Elections. The General Partner shall, from time to time, make such tax elections as it deems necessary or desirable in its sole discretion to carry out the business of the Partnership or the purposes of this Agreement.

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     6.5 Title to the Partnership assets shall be deemed to be owned by the Partnership as an entity, and no Partner or Assignee, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine. The General Partner hereby declares and warrants that any Partnership assets for which record title is held in the name of the General Partner shall be held by the General Partner for the exclusive use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use its reasonable efforts to cause record title to such assets (other than those assets in respect of which the General Partner determines that the expense and difficulty of conveyancing makes transfer of record title to the Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable; provided, that prior to the withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner will use reasonable efforts to effect the transfer of record title to the Partnership and, prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the Partnership. All Partnership Assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which record title to such Partnership assets are held.

Article 7
RIGHTS AND DUTIES OF THE GENERAL PARTNER

     7.1 Management Power. The General Partner shall have exclusive management and control of the business and affairs of the Partnership, and all decisions regarding the management and affairs of the partnership shall be made by the General Partner. The General Partner shall have all the rights and powers of general partners as provided in the Act and as otherwise provided by law. Except as otherwise expressly provided in this Agreement, the General Partner is hereby granted the right, power and authority to do on behalf of the Partnership all things which, in its sole judgment, are necessary, proper or desirable to carry out the aforementioned duties and responsibilities, including but not limited to the right, power and authority from time to time to do the following:

            (a) incur all expenditures permitted by this Agreement;

            (b) employ and dismiss from employment any and all employees, agents, independent contractors, attorneys and accountants;

            (c) enter into any sales, agency or dealer agreements with respect to the sale of Interests to Additional Limited Partners;

            (d) admit an assignee of a Limited Partner’s Interest as a Limited Partner in the Partnership without the consent of any Limited Partner;

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            (e) to the extent that funds of the Partnership are, in the General Partner’s judgment, not required for the conduct of the Partnership’s business, temporarily invest the excess funds in the manner set forth in paragraph 6.2;

            (f) prosecute and protect and defend or cause to be protected and defended all patents, patent rights, trade names, trademarks and service marks, and all applications with respect thereto that may be held by the Partnership;

            (g) borrow money on behalf of the Partnership from lenders other than a General Partner or his or its Affiliates and to give as security for any such loan a security interest in any or all assets of the Partnership;

            (h) consummate the various transactions contemplated by the private placement memorandum used in connection with the placement of Interests; and

            (i) enter into, execute, amend, supplement, acknowledge and deliver any and all contracts, agreements, licenses or other instruments (including without limitation those agreements with Affiliates of the General Partner described in the Placement Memorandum necessary, proper or desirable to carry out the purposes of the Partnership.

     7.2 The General Partner will use its best efforts to cause the Partnership to be formed, reformed, qualified or registered under assumed or fictitious name statutes or similar laws in any state in which the Partnership owns property or transacts business if such information, reformation, qualification or registration is necessa


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