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. align
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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
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