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)
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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
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(ii)
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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)).
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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.
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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
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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
