Common use of Restrictions on the Authority of the General Partner Clause in Contracts

Restrictions on the Authority of the General Partner. A. Anything in this Agreement to the contrary notwithstanding, it is agreed that: (i) the General Partner and its Affiliates shall not take any action with respect to the assets or property of the Partnership which does not benefit primarily the Partnership, including: (a) the utilization of Partnership funds as compensating balances for the benefit of the General Partner or an Affiliate of the General Partner; and (b) the commitment of future production from Partnership Properties; (ii) all benefits from marketing arrangements or other relationships affecting property of the General Partner or its Affiliates and the Partnership shall be fairly and equitably apportioned according to the respective interests of each; (iii) neither the General Partner nor any Affiliate may profit itself by Development Drilling, Identified Development Drilling or Improved Recovery operations in contravention of its fiduciary obligation to the Partnership; and (iv) neither the General Partner nor any Affiliate shall render to the Partnership any oil field, equipage, drilling or other services nor sell or lease to the Partnership any equipment or supplies unless: (a) such Person is engaged, independently of the Partnership and as an ordinary and ongoing business, in the business of rendering such services or selling or leasing such equipment and supplies to a substantial extent to other Persons in the oil and gas industry in addition to drilling and income programs in which the General Partner and its Affiliates have an interest; (b) the compensation, price or rental therefor is competitive with the compensation, price or rental of other Persons in the area engaged in the business of rendering comparable services or selling or leasing comparable equipment and supplies which could reasonably be made available to the Partnership; and (c) the drilling services are billed on either a per foot, per day or per hour rate, or some combination thereof; provided that, if such Person is not engaged in a business within the meaning of subdivision (a), then such compensation, price or rental shall be the cost of such services, equipment or supplies to such Person or the competitive rate which could be obtained in the area, whichever is less. B. The General Partner shall not have the authority to: (i) do any act in contravention of this Agreement or which would make it impossible to carry on the ordinary business of the Partnership; (ii) confess a judgment against the Partnership; (iii) possess Partnership Property or assign, pledge or hypothecate rights in specific Partnership Property for other than a Partnership purpose except as otherwise permitted in Section 4.3D; (iv) admit a Person as a General Partner or a Substituted Limited Partner or permit any transfer of Units except as otherwise provided herein; or (v) knowingly perform any act which would result in loss of the Depositary's or any Substituted Limited Partner's status as a limited partner under the Act or the laws of the State or the loss of limited liability under the laws of any other jurisdiction in which the Partnership is doing business, or would subject the Depositary or any Unit Holder to liability as a general partner in any jurisdiction including use of the Depositary's or a Unit Holder's name in conducting the business of the Partnership. C. The General Partner shall not lease, sell, abandon or otherwise dispose of any assets of the Partnership to the General Partner or to any of its Affiliates, except as otherwise permitted by this Agreement; provided, however, that if the Partnership should own any inventory or other materials, such inventory or materials may be transferred to the General Partner or any of its Affiliates at the applicable rates set forth in the standard form of accounting procedure then recommended by the Council of Petroleum Accountants Societies of North America. D. Notwithstanding any other provision of this Agreement to the contrary, without the prior Consent of Unit Holders owning 50% or more of the outstanding Units granted pursuant to the provisions of Article Twelve of this Agreement, the General Partner shall not: (i) lease, sell or dispose of all or substantially all of the Partnership's assets except pursuant to Article Nine of this Agreement; (ii) make, exercise or deliver any general assignment for the benefit of the Partnership's creditors; or (iii) except as set forth in Sections 8.1F or 11.1A, amend any provision of this Agreement.

Restrictions on the Authority of the General Partner. A. Anything in this Agreement to the contrary notwithstanding, it is agreed that: (i) the General Partner and its Affiliates shall not take any action with respect to the assets or property of the Partnership which does not benefit primarily the Partnership, including: (a) the utilization of Partnership funds as compensating balances for the benefit of the General Partner or an Affiliate of the General Partner; and (b) the commitment of future production from Partnership Properties; (ii) all benefits from marketing arrangements or other relationships affecting property of the General Partner or its Affiliates and the Partnership shall be fairly and equitably apportioned according to the respective interests of each; (iii) neither the General Partner nor any Affiliate may profit itself by Development Drilling, Identified Development Drilling or Improved Recovery operations in contravention of its fiduciary obligation to the Partnership; and (iv) neither the General Partner nor any Affiliate shall render to the Partnership any oil field, equipage, drilling or other services nor sell or lease to the Partnership any equipment or supplies unless: (a) such Person is engaged, independently of the Partnership and as an ordinary and ongoing business, in the business of rendering such services or selling or leasing such equipment and supplies to a substantial extent to other Persons in the oil and gas industry in addition to drilling and income programs in which the General Partner and its Affiliates have an interest; (b) the compensation, price or rental therefor is competitive with the compensation, price or rental of other Persons in the area engaged in the business of rendering comparable services or selling or leasing comparable equipment and supplies which could reasonably be made available to the Partnership; and (c) the drilling services are billed on either a per foot, per day or per hour rate, or some combination thereof; provided that, if such Person is not engaged in a business within the meaning of subdivision (a), then such compensation, price or rental shall be the cost of such services, equipment or supplies to such Person or the competitive rate which could be obtained in the area, whichever is less. B. The General Partner shall not have the authority to: (i) do any act in contravention of this Agreement or which would make it impossible to carry on the ordinary business of the Partnership; (ii) confess a judgment against the Partnership; (iii) possess Partnership Property or assign, pledge or hypothecate rights in specific Partnership Property for other than a Partnership purpose except as otherwise permitted in Section 4.3D; (iv) admit a Person as a General Partner or a Substituted Limited Partner or permit any transfer of Units except as otherwise provided herein; or (v) knowingly perform any act which would result in loss of the Depositary's or any Substituted Limited Partner's status as a limited partner under the Act or the laws of the State or the loss of limited liability under the laws of any other jurisdiction in which the Partnership is doing business, or would subject the Depositary or any Unit Holder to liability as a general partner in any jurisdiction including use of the Depositary's or a Unit Holder's name in conducting the business of the Partnership. C. The General Partner shall not lease, sell, abandon or otherwise dispose of any assets of the Partnership to the General Partner or to any of its Affiliates, except as otherwise permitted by this Agreement; provided, however, that if the Partnership should own any inventory or other materials, such inventory or materials may be transferred to the General Partner or any of its Affiliates at the applicable rates set forth in the standard form of accounting procedure then recommended by the Council of Petroleum Accountants Societies of North America. D. Notwithstanding any other provision of this Agreement to the contrary, without the prior Consent of Unit Holders owning 50% or more of the outstanding Units granted pursuant to the provisions of Article Twelve of this Agreement, the General Partner shall not: (i) lease, sell or dispose of all or substantially all of the Partnership's assets except pursuant to Article Nine of this Agreement; (ii) make, exercise or deliver any general assignment for the benefit of the Partnership's creditors; or (iii) except as set forth in Sections 8.1F or 11.1A11.lA, amend any amenx xxx provision of this Agreement.