Common use of Reports to Limited Partners Clause in Contracts

Reports to Limited Partners. Within 90 days after the end of each fiscal year of the Partnership, the General Partners will deliver to each Limited Partner such information as is necessary for the preparation by such Limited Partner of his federal income tax return, and state income or other tax returns. Within 120 days after the end of each Partnership fiscal year, the General Partners will deliver to each Limited Partner an annual report which includes audited financial statements of the Partnership prepared in accordance with generally accepted accounting principles, and which contains a reconciliation of amounts shown therein with amounts shown on the method of accounting used for tax reporting purposes. Such financial statements include a profit and loss statement, a balance sheet of the Partnership, a Cash Flow statement and a statement of changes in financial position. The annual report for each year reports on the Partnership's activities for that year, identifies the source of Partnership Distributions, sets forth the compensation paid to the General Partners and their Affiliates and a statement of the services performed in consideration therefor and contains such other information as is deemed reasonably necessary by the General Partners to advise the Limited Partners of the affairs of the Partnership. For as long as the Partnership is required to file quarterly reports on Form 10-Q with the Securities and Exchange Commission, the information contained in each such report for a quarter shall be sent to the Limited Partners within 60 days after the end of such quarter. If and when such reports are not required to be filed, each Limited Partner will be furnished, within 60 days after the end of each of the first three quarters of each Partnership fiscal year, an unaudited financial report for that period including a profit and loss statement, a balance sheet and a Cash Flow statement. The foregoing reports for any period in which fees are paid to the General Partners or their Affiliates for services shall set forth the fees paid and the services rendered. PLAN OF DISTRIBUTION Subject to the conditions set forth in this Prospectus and in accordance with the terms and conditions of the Partnership Agreement, the Partnership offers through qualified broker dealers on a best efforts basis, a maximum of 300,000 Units ($30,000,000) of Limited Partnership Interest at $100 per Unit. The minimum subscription is twenty (20) Units ($2,000). Participating Broker Dealers will receive sales commissions of five percent (5%) of Gross Proceeds for subscriptions where investors elect to receive cash distributions and sales commissions of nine percent (9%) of Gross Proceeds will be paid for subscriptions where investors elect to reinvest their Earnings and acquire additional Units in the Partnership. Additionally, Participating Broker Dealers may be entitled to receive up to one-half of one percent (.5%) of the Gross Proceeds for bona fide due diligence expenses, and certain other expense reimbursements and sales seminar expenses payable by the Partnership. Although total sales commissions payable could equal nine percent (9%), the Partnership anticipates, based on historical experience, that the total sales commissions payable will not exceed (7.6%). This number is based upon the General Partners' assumption, based on historical experience, that sixty-five percent (65%) of investors will elect to compound earnings and receive additional Units, thirty-five percent (35%) of investors will elect to receive distributions,. In no event will the total of all compensation payable to Participating Broker Dealers, including sales commissions, expense reimbursements, sales seminars and/or due diligence expenses exceed ten percent (10%) of the program proceeds received plus an additional (0.5%) for bona fide due diligence expenses as set forth in Rule 2810 of the NASD Conduct Rules. Further, in no event shall any individual Participating Broker Dealer receive total compensation including sales commissions, expense reimbursements, sales seminar or expense reimbursement exceed (10%) of the gross proceeds of their sales plus an additional (0.5%) for bona fide due diligence expenses as set forth in Rule 2810 of the NASD Conduct Rules (the Compensation Limitation). Units may also be offered or sold directly by the General Partners for which they will receive no sales commissions. No commissions will be paid on any Units acquired by Partners in lieu of Periodic Cash Distributions The Partnership will not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of the Units. Participating Broker Dealers are not obligated to obtain any subscriptions, and there is no assurance that any Units will be sold. The Participating Broker Dealers shall not directly or indirectly finance or arrange for the financing of, purchase of any Units, nor shall the proceeds of this Offering be used either directly or indirectly to finance the purchase of any Units. The Selling Agreement provides that with respect to any liabilities arising out of the Securities Act of 1933, as amended, the General Partners shall indemnify the Participating Broker Dealer. To the extent that indemnification provisions purport to include indemnification for liabilities arising under the Securities Act of 1933, such indemnification, in the opinion of the Securities and Exchange Commission is contrary to public policy and therefore unenforceable. Each subscriber will be required to comply with (i) the minimum purchase requirement and investor suitability standard of his state of residence or (ii) the investor suitability standard imposed by the Partnership in the event that his state of residence does not impose such a standard (See "INVESTOR SUITABILITY STANDARDS"). In order to purchase any Units, the subscriber must complete and execute the Signature Page for the Subscription Agreement. Any subscription for Units must be accompanied by tender of the sum of $100 per Unit. The Signature Page is set forth at the end of this Prospectus at Exhibit B-x. By executing the Signature Page for the Subscription Agreement, the subscriber agrees to all of the terms of the Partnership Agreement including the grant of a power of attorney under certain circumstances. Limited Partnership Interests will be evidenced by a written Partnership Agreement and each Limited Partner will receive a Certificate of Limited Partnership Interest indicating the extent of his interest in the Partnership. Subscription Agreements from prospective investors will be accepted or rejected by the General Partners within thirty (30) days after their receipt. Subscriptions will be effective only on acceptance by the General Partners and the right is reserved to reject any subscription in whole or in part" for any reason. The General Partners and their Affiliates may, in their discretion, purchase Units for their own. The maximum amount of Units that may be purchased by the General Partners or their Affiliates is $50,000 (500 Units). Purchases of such Units by the General Partners or their Affiliates will be made for investment purposes only on the same terms, conditions and prices as to unaffiliated parties. It is not anticipated that the General Partners or their Affiliates will purchase Units for their own accounts.

Reports to Limited Partners. Within 90 days after the end of each fiscal year of the Partnership, the General Partners will deliver to each Limited Partner such information as is necessary for the preparation by such Limited Partner of his federal income tax return, and state income or other tax returns. Within 120 days after the end of each Partnership fiscal year, the General Partners will deliver to each Limited Partner an annual report which includes audited financial statements of the Partnership prepared in accordance with generally accepted accounting principles, and which contains a reconciliation of amounts shown therein with amounts shown on the method of accounting used for tax reporting purposes. Such financial statements include a profit and loss statement, a balance sheet of the Partnership, a Cash Flow statement and a statement of changes in financial position. The annual report for each year reports on the Partnership's activities for that year, identifies the source of Partnership Distributions, sets forth the compensation paid to the General Partners and their Affiliates and a statement of the services performed in consideration therefor and contains such other information as is deemed reasonably necessary by the General Partners to advise the Limited Partners of the affairs of the Partnership. For as long as the Partnership is required to file quarterly reports on Form 10-Q with the Securities and Exchange Commission, the information contained in each such report for a quarter shall be sent to the Limited Partners within 60 days after the end of such quarter. If and when such reports are not required to be filed, each Limited Partner will be furnished, within 60 days after the end of each of the first three quarters of each Partnership fiscal year, an unaudited financial report for that period including a profit and loss statement, a balance sheet and a Cash Flow statement. The foregoing reports for any period in which fees are paid to the General Partners or their Affiliates for services shall set forth the fees paid and the services rendered. PLAN OF DISTRIBUTION Subject to the conditions set forth in this Prospectus and in accordance with the terms and conditions of the Partnership Agreement, the Partnership offers through qualified broker dealers on a best efforts basis, a maximum of 300,000 Units ($30,000,000) of Limited Partnership Interest at $100 per Unit. The minimum subscription is twenty (20) Units ($2,000). Participating Broker Dealers will receive sales commissions of five percent (5%) of Gross Proceeds for subscriptions where investors elect to receive cash distributions and sales commissions of nine percent (9%) of Gross Proceeds will be paid for subscriptions where investors elect to reinvest their Earnings and acquire additional Units in the Partnership. Additionally, Participating Broker Dealers may be entitled to receive up to one-half of one percent (.5%) of the Gross Proceeds for bona fide due diligence expenses, and certain other expense reimbursements and sales seminar expenses payable by the Partnership. Although total sales commissions payable could equal nine percent (9%), the Partnership anticipates, based on historical experience, that the total sales commissions payable will not exceed (7.6%). This number is based upon the General Partners' assumption, based on historical experience, that sixty-five percent (65%) of investors will elect to compound earnings and receive additional Units, thirty-five percent (35%) of investors will elect to receive distributions,. In no event will the total of all compensation payable to Participating Broker Dealers, including sales commissions, expense reimbursements, sales seminars and/or due diligence expenses exceed ten percent (10%) of the program proceeds received plus an additional (0.5%) for bona fide due diligence expenses as set forth in Rule 2810 of the NASD Conduct Rules. Further, in no event shall any individual Participating Broker Dealer receive total compensation including sales commissions, expense reimbursements, sales seminar or expense reimbursement exceed (10%) of the gross proceeds of their sales plus an additional (0.5%) for bona fide due diligence expenses as set forth in Rule 2810 of the NASD Conduct Rules (the Compensation Limitation). Units may also be offered or sold directly by the General Partners for which they will receive no sales commissions. No commissions will be paid on any Units acquired by Partners in lieu of Periodic Cash Distributions The Partnership will not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of the Units. Participating Broker Dealers are not obligated to obtain any subscriptions, and there is no assurance that any Units will be sold. The Participating Broker Dealers shall not directly or indirectly finance or arrange for the financing of, purchase of any Units, nor shall the proceeds of this Offering be used either directly or indirectly to finance the purchase of any Units. The Selling Agreement provides that with respect to any liabilities arising out of the Securities Act of 1933, as amended, the General Partners shall indemnify the Participating Broker Dealer. To the extent that indemnification provisions purport to include indemnification for liabilities arising under the Securities Act of 1933, such indemnification, in the opinion of the Securities and Exchange Commission is contrary to public policy and therefore unenforceable. Each subscriber will be required to comply with (i) the minimum purchase requirement and investor suitability standard of his state of residence or (ii) the investor suitability standard imposed by the Partnership in the event that his state of residence does not impose such a standard (See "INVESTOR SUITABILITY STANDARDS"). In order to purchase any Units, the subscriber must complete and execute the Signature Page for the Subscription Agreement. Any subscription for Units must be accompanied by tender of the sum of $100 per Unit. The Signature Page is set forth at the end of this Prospectus at Exhibit BX-x. By executing the Signature Page for the Subscription Agreement, the subscriber agrees to all of the terms of the Partnership Agreement including the grant of a power of attorney under certain circumstances. Limited Partnership Interests will be evidenced by a written Partnership Agreement and each Limited Partner will receive a Certificate of Limited Partnership Interest indicating the extent of his interest in the Partnership. Subscription Agreements from prospective investors will be accepted or rejected by the General Partners within thirty (30) days after their receipt. Subscriptions will be effective only on acceptance by the General Partners and the right is reserved to reject any subscription in whole or in part" for any reason. The General Partners and their Affiliates may, in their discretion, purchase Units for their own. The maximum amount of Units that may be purchased by the General Partners or their Affiliates is $50,000 (500 Units). Purchases of such Units by the General Partners or their Affiliates will be made for investment purposes only on the same terms, conditions and prices as to unaffiliated parties. It is not anticipated that the General Partners or their Affiliates will purchase Units for their own accounts.