Attached files
file | filename |
---|---|
EXCEL - IDEA: XBRL DOCUMENT - SQN AIF IV, L.P. | Financial_Report.xls |
EX-5.1 - EX-5.1 - SQN AIF IV, L.P. | d29970_ex5-1.htm |
EX-8.1 - EX-8.1 - SQN AIF IV, L.P. | d29970_ex8-1.htm |
EX-23.2 - EX-23.2 - SQN AIF IV, L.P. | d29970_ex23-2.htm |
EX-23.1 - EX-23.1 - SQN AIF IV, L.P. | d29970_ex23-1.htm |
SECURITIES AND EXCHANGE COMMISSION
Form S-1
UNDER
THE SECURITIES ACT OF 1933
Delaware |
7359 |
36-4740732 |
||||
(State or
other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
New York, New York 10038
(212) 422-2166
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
President and Chief Executive Officer
SQN Capital Management, LLC
110 William Street, 26th Floor
New York, New York 10038
(212) 422-2166
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
John T. Bradley, Esq.
Rushika Kumararatne, Esq.
Troutman Sanders LLP
5 Park Plaza, Suite 1400
Irvine, California 92614
(949) 622-2700 / (949) 622-2739 (fax)
Large accelerated
filer o |
Accelerated filer o |
|||||
Non-accelerated
filer x (Do not check if a smaller reporting company) |
Smaller reporting company o |
Title of Each Class of Securities to be Registered |
|
Amount to be Registered |
|
Proposed Maximum Offering Price per Unit |
|
Proposed Maximum Aggregate Offering Price |
|
Amount of Registration Fee |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Limited Partnership Units |
200,000 |
$1,000 |
$ | 200,000,000 | $27,280 | * |
(*) |
The Registrant previously paid the registration fee in connection with a prior filing of this Registration Statement |
Minimum Offering Proceeds 1,200 Units ($1,200,000)
Maximum Offering Proceeds 200,000 Units ($200,000,000)
|
A substantial portion, and possibly all, of the cash distributions you receive from us will be a return of capital and not a return on capital. The sources of Distributable Cash are: (i) cash from operations; and (ii) offering proceeds. Unlimited amounts from either source may be used for distributions to investors. As a result, the amounts paid as cash distributions will reduce the amount of funds available for investment. When we use the phrase return of capital we mean a return of your initial investment without any growth. When we use the term return on capital we mean a return of growth on your initial investment in addition to the return of your initial investment. |
|
This is a blind-pool offering because we have not specifically identified our investments and likely will not have done so at the time you invest. As a result, you cannot evaluate the risks of, or potential returns from, any of our investments at the time you invest. |
|
Our lack of operating history and our General Partners and our Investment Managers limited operating history decreases your ability to evaluate your investment. |
|
We will not apply for an advance ruling from the Internal Revenue Service as to any federal tax consequences of an investment in us, and if the Internal Revenue Service classifies us as a corporation you will lose tax benefits. |
|
Since there is no public market for our units, an investment in our units is considered illiquid. You should be prepared to hold your units for the life of the fund, which is anticipated to be approximately five to seven years, but may be longer. |
|
You will have very limited voting rights and you must rely on our General Partner, our Investment Manager and their affiliates to manage us. |
|
A prolonged economic recession or changes in general economic conditions, or both, including fluctuations in demand for equipment and other portfolio assets, lease rates, and interest rates may result in delays in investment and reinvestment, delays in leasing, re-leasing and disposition of equipment, and reduced returns on capital. |
|
Our performance will be subject to the risk of lease and other investment defaults. Uncertainties associated with the equipment leasing and financing industry may have an adverse effect on our business and may adversely affect our ability to provide you any economic return from our units or a complete return of your capital. |
|
Our success will depend in part on our ability to realize residual value from a portion of our assets and equipment once the leases on those assets and equipment terminate. |
|
Our General Partner, our Investment Manager and their affiliates will receive significant compensation from us, which will reduce distributions to you. |
|
There are potential conflicts of interest between us and our General Partner, our Investment Manager and their affiliates. |
|
There are material federal income tax risks associated with this offering. |
|
You may incur tax liabilities in excess of cash distributions you receive from us in a particular year. |
Offering |
Price to Public |
Selling Commissions(1) |
Proceeds to Us(2) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Per Unit
|
$ | 1,000 | $ | 100 | $ | 900 | ||||||||
Total Minimum
Offering |
$ | 1,200,000 | $ | 120,000 | $ | 1,080,000 | ||||||||
Total Maximum
Offering |
$ | 200,000,000 | $ | 20,000,000 | $ | 180,000,000 |
(1) |
Includes Underwriting Fees and Sales Commissions. Underwriting Fees are to be paid by us to our selling agent or selling agents. Our initial selling agent will be SQN Securities, LLC. Sales Commissions are to be paid by us to Selling Dealers. |
(2) |
Before deducting organizational and offering expenses to be paid by us out of the proceeds of this offering. We will not pay any Underwriting Fees or Sales Commissions in connection with units sold, if any, to our General Partner or its affiliates. See Estimated Use of Proceeds. |
vi | ||||||
vi | ||||||
vi | ||||||
vii | ||||||
ix | ||||||
x | ||||||
x | ||||||
xi | ||||||
1 | ||||||
1 | ||||||
7 | ||||||
13 | ||||||
14 | ||||||
14 | ||||||
17 | ||||||
18 | ||||||
18 | ||||||
22 | ||||||
27 | ||||||
30 | ||||||
33 | ||||||
34 | ||||||
34 | ||||||
34 | ||||||
34 | ||||||
35 | ||||||
35 | ||||||
36 | ||||||
36 | ||||||
36 | ||||||
36 | ||||||
37 | ||||||
37 | ||||||
37 | ||||||
38 | ||||||
39 | ||||||
42 | ||||||
42 | ||||||
42 | ||||||
43 |
44 | ||||||
44 | ||||||
44 | ||||||
44 | ||||||
44 | ||||||
45 | ||||||
46 | ||||||
50 | ||||||
50 | ||||||
50 | ||||||
52 | ||||||
53 | ||||||
53 | ||||||
53 | ||||||
53 | ||||||
54 | ||||||
54 | ||||||
54 | ||||||
55 | ||||||
60 | ||||||
61 | ||||||
62 | ||||||
62 | ||||||
62 | ||||||
62 | ||||||
62 | ||||||
62 | ||||||
62 | ||||||
63 | ||||||
64 | ||||||
64 | ||||||
65 | ||||||
66 | ||||||
67 | ||||||
68 | ||||||
69 | ||||||
70 | ||||||
70 | ||||||
71 | ||||||
73 | ||||||
73 | ||||||
74 | ||||||
74 | ||||||
75 | ||||||
75 | ||||||
76 | ||||||
76 | ||||||
77 | ||||||
77 |
77 | ||||||
77 | ||||||
78 | ||||||
79 | ||||||
79 | ||||||
79 | ||||||
80 | ||||||
80 | ||||||
80 | ||||||
81 | ||||||
82 | ||||||
82 | ||||||
82 | ||||||
83 | ||||||
84 | ||||||
84 | ||||||
84 | ||||||
85 | ||||||
85 | ||||||
86 | ||||||
87 | ||||||
87 | ||||||
87 | ||||||
87 | ||||||
87 | ||||||
87 | ||||||
88 | ||||||
88 | ||||||
88 | ||||||
88 | ||||||
89 | ||||||
89 | ||||||
90 | ||||||
90 | ||||||
91 | ||||||
91 | ||||||
91 | ||||||
92 | ||||||
92 | ||||||
93 | ||||||
94 | ||||||
94 | ||||||
94 | ||||||
94 | ||||||
95 | ||||||
95 | ||||||
95 | ||||||
95 | ||||||
96 | ||||||
96 |
97 | ||||||
97 | ||||||
98 | ||||||
99 | ||||||
99 | ||||||
99 | ||||||
100 | ||||||
101 | ||||||
101 | ||||||
101 | ||||||
102 | ||||||
102 | ||||||
102 | ||||||
F-1 | ||||||
A-1 | ||||||
B-1 | ||||||
C-1 | ||||||
II-7 | ||||||
II-8 |
|
have adequate financial means; |
|
do not need liquidity of your investment; and |
|
are able to withstand the risks inherent in a long-term investment, which we expect will be approximately five to seven years, but may be longer. |
|
a net worth of at least $70,000 plus at least $70,000 of annual gross income; or |
|
a net worth of at least $250,000. |
|
Alabama Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and similar equipment leasing programs may not exceed 10% of your liquid net worth. |
|
California Investors. You must have either (i) a liquid net worth of not less than $100,000 and a gross annual income of not less than $75,000, or (ii) a liquid net worth of $250,000, in both instances exclusive of your home, home furnishings and automobiles. |
|
Connecticut Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Florida Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Illinois Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Iowa Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and our affiliates may not exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. |
|
Kansas Investors. Under suitability guidelines of the Office of the Kansas Securities Commissioner, you are cautioned to carefully evaluate whether your aggregate investment in us and other similar investments should exceed 10% of your liquid net worth. Liquid net worth is that portion of your total net worth, or total assets minus total liabilities, that is comprised of cash, cash equivalents and readily marketable securities. Readily marketable securities may include investments in an IRA or other retirement plan that can be liquidated within a short time, less any income tax or other penalties that may apply for early distribution. |
|
Kentucky Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us may not exceed 10% of your net worth. |
|
Maine Investors. It is recommended by the Maine Office of Securities that Maine investors not invest, in the aggregate, more than 10% of their liquid net worth in this and similar direct participation investments. Liquid net worth is defined as that portion of net worth that consists of cash, cash equivalents, and readily marketable securities. |
|
Massachusetts Investors. Under suitability guidelines of the Massachusetts Securities Division, you are cautioned to carefully evaluate whether your aggregate investment in us and other similar investments should exceed 10% of your liquid net worth. Liquid net worth is that portion of your total net worth, or total assets minus total liabilities, that is comprised of cash, cash equivalents and readily marketable securities. Readily marketable securities may include investments in an IRA or other retirement plan that can be liquidated within a short time, less any income tax or other penalties that may apply for early distribution. |
|
Michigan Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and our Affiliated Programs may not exceed 10% of your liquid net worth. |
|
Missouri Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
New Jersey Investors. You must have (i) an annual gross income of at least $60,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $60,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $225,000 in excess of your invested capital. It is recommended by the New Jersey Office of the Attorney General that New Jersey investors not invest, in the aggregate, more than 10% of their liquid net worth in this and similar direct participation investments. Liquid net worth is defined as that portion of net worth which consists of cash, cash equivalents and readily marketable securities. |
|
New Mexico Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and in Affiliated Programs may not exceed 10% of your liquid net worth, calculated exclusive of your home, home furnishings and automobiles. |
|
New York Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
North Carolina Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
Ohio Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and in Affiliated Programs may not exceed 10% of your liquid net worth, calculated exclusive of your home, home furnishings and automobiles. |
|
Oklahoma Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us may not exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. |
|
Oregon Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
Pennsylvania Investors. Because the minimum offering amount is less than $20,000,000, which represents 10% of the maximum offering amount, you are cautioned to carefully evaluate the programs ability to fully accomplish its stated objectives and to inquire as to the current dollar volume of program subscriptions. In addition, subscription proceeds of Pennsylvania investors will be held in an escrow account until we receive and accept subscriptions for at least $10,000,000 in offering proceeds. We must offer you the opportunity to rescind your subscription if we have not received subscriptions for $10,000,000 within 120 days of the date the escrow agent receives your subscription proceeds. We must repeat this offer to you every 120 days during the Offering Period until we have received and accepted subscriptions for $10,000,000. |
|
Rhode Island Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
South Carolina Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Texas Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
Tennessee Investors. You must have (i) a minimum annual gross income of $100,000; and (ii) a minimum net worth of $100,000; or (iii) a minimum net worth of $500,000, calculated exclusive of home, home furnishings and automobile. In addition, your investment in us must not exceed 10% of your liquid net worth. |
|
Vermont Investors. You must meet the general investor suitability requirements set forth above. In addition, your maximum investment in us and our affiliates may not exceed 10% of your net worth. |
|
Virginia Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Washington Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
any income or gain realized from an investment in our units could be unrelated business taxable income (UBTI), which is subject to the unrelated business income tax; |
|
for ERISA Plans and IRAs, ownership of our units may cause a pro rata share of our assets to be considered plan assets for the purposes of ERISA and the excise taxes imposed by ERISA and the Code; |
|
any entity that is exempt from federal income taxation will be unable to take full advantage of any tax benefits generated by us; and |
|
charitable remainder trusts that have any UBTI will be subject to an excise tax equal to 100% of such UBTI. |
advantageous for your plan or organization. See the Risk Factors, Material U.S. Federal Income Tax Consequences and Investment by ERISA Plans and IRAs sections of this prospectus.
|
meet the minimum income, net worth standards and other investor suitability requirements specified above; |
|
are prepared to hold your investment in us for our entire term, which we expect will be approximately five to seven years, but may be longer; |
|
have no need for your investment in us to be liquid; and |
|
are prepared to assume the substantial risks associated with an investment in us. |
Q-1. |
What is SQN AIF IV, L.P. and what does it do? |
A-1. |
We are a form of investment opportunity that is commonly referred to as a direct participation program. That means you will beneficially own a pro-rata share of the equipment and other assets in which we invest and that you are eligible to receive the tax benefits inherent in the ownership of certain leased equipment and other assets. |
Q-2. |
What types of investments will be in our portfolio? |
A-2. |
Although the composition of our portfolio cannot be determined at this stage, we expect to invest in equipment and other assets that are considered essential use or core to a business or operation in the agricultural, energy, environmental, medical, manufacturing, technology, and transportation industries. Our Investment Manager also may identify other assets or industries that meet our investment objectives. We expect to invest in equipment and other assets located primarily within the U.S., Canada and the European Union but may also make investments in other parts of the world. |
Q-3. |
What is the expected credit quality of the counterparties and what are the terms of the investments that will make up the portfolio? |
A-3. |
We will invest in a variety of credit qualities ranging from small private businesses, publicly listed entities, international organizations, colleges and universities, hospitals, governments and municipalities. Our Investment Manager is primarily an asset investor and will look at the underlying credit quality as further investment enhancement. In all cases, the investment committee of our Investment Manager, when contemplating investments, will consider a range of factors including, but not limited to, the following: |
|
the remaining economic useful life of the equipment or other assets; |
|
the anticipated residual value of the equipment or other assets; |
|
whether the equipment or other assets are new or used and their condition; |
|
required registrations; |
|
regulatory considerations; |
|
portfolio diversification; |
|
how essential the equipment or other assets are to the operations of the business; and |
|
the cash flow profile of the equipment or other assets, and the depth of the market and exit mechanisms. |
Q-4. |
What are the investor suitability requirements for this investment? |
A-4. |
In general, you must have either (i) a net worth of at least $70,000, plus at least $70,000 of annual gross income, or (ii) a net worth of at least $250,000. Net worth is determined excluding your investment in us, the equity in your home, your home furnishings and your automobiles. Some states impose higher suitability requirements. If your states suitability requirements are less restrictive than our general investor suitability requirements, our general investor suitability requirements will apply. In addition, residents of certain states are required to meet suitability requirements that differ or are in addition to the general investor suitability requirements. Also, the minimum investment amount for most investors is 5 units ($5,000). Since there is no public market for our units, an investment in our units is considered illiquid. You should invest in us only if you are prepared to hold your units for the life of the Fund which is anticipated to be approximately five to seven years, but may be longer. |
Q-5. |
Who are our General Partner, SQN AIF IV GP, LLC, and our Investment Manager, SQN Capital Management, LLC? |
A-5. |
Our General Partner, SQN AIF IV GP, LLC, was formed in August 2012 as a limited liability company to serve as the general partner of publicly registered equipment leasing programs managed by our Investment Manager. Our General Partner is wholly-owned by our Investment Manager, |
SQN Capital Management, LLC, which was formed in December 2007 to manage direct participation programs. |
Q-6. |
What can you expect happens after you invest in us? |
A-6. |
Once our General Partner has accepted your subscription, you will receive a confirmation letter indicating our acceptance of your investment and a copy of your fully executed subscription agreement. We have three phases of different lengths. It is very important to be aware of how we will operate during these three phases so you can evaluate this investment opportunity. |
interests of our limited partners to reinvest, we may do so. It is our intention to wind down the portfolio and distribute proceeds to you and our other limited partners during the Liquidation Period.
Q-7. |
What will be the terms of the investments? |
A-7. |
We expect our investments to meet economic and legal standards that our Investment Manager has derived from its experience in the equipment lease investment and finance business. In general, we expect that the investment documents will be enforceable contracts that create non-cancelable obligations of the lessee or other counterparty with respect to timely payments, insurance, proper maintenance of the assets or equipment in which we invest, and, if applicable, the return of such assets or equipment in a specified condition. Often such investment documents will create rights for us in the event of a failure of the lessee or other counterparty to perform its payment and other obligations over and above the obligation to cure such a failure. In addition, such investment documents also may include guarantees by parent companies, affiliates, and individual owners of such lessees and other counterparties of such entities obligations to us under the investment documents. |
Q-8. |
Are there tax benefits and consequences of investing in us? |
A-8. |
We, as a limited partnership, will not pay income taxes ourselves. Instead, all of our taxable income or losses and other tax items will be passed through to you and our other limited partners. Our General Partner anticipates that during our early years, income taxes on distributions to you and to our other limited partners will be, to an extent, tax-deferred by operating losses and depreciation deductions available from the portion of our equipment leased to third party end users under our operating leases, but not under its full payout leases or other investments. |
Q-9. |
Will you be able to sell your investment in our units? |
A-9. |
Since there is no public market for our units, an investment in our units is considered illiquid. You should only invest money that you can afford to have unavailable for at least seven years. Our units will not be listed on any national securities exchange at any time and we will take steps to ensure that no public trading market develops for our units. Also, in any calendar year, we are limited as to the number of units we may redeem so that we will not be treated as a publicly traded partnership for tax purposes. In addition, the redemption price for your units is unlikely to reflect the fair market value of your units at the time of redemption, particularly during the Liquidation Period. You may realize a greater return by holding on to your units for the duration of our term. |
Q-10. |
Where can I get more information? |
A-10. |
We have filed a registration statement on Form S-1 with the Securities and Exchange Commission (the SEC) regarding the units we offer by this prospectus and we will file periodic reports and other information with the SEC. These documents are available at the SECs web site at http://www.sec.gov. After you are an investor in us, you may contact Investor Relations regarding your account information. The telephone number is (800) 258-6610. You are urged to thoroughly discuss an investment in us with your financial, tax and legal advisors. |
The
Partnership |
We
are a Delaware limited partnership formed on August 10, 2012. The address of our principal executive office is 110 William Street, 26th Floor, New
York, New York 10038. Our telephone number is (212) 422-2166. |
|||||
We
will operate a fund in which the capital you invest will be pooled with capital invested by other investors. This pool of capital will then be used to
invest in business-essential, revenue-producing (or cost-saving) equipment and Other Physical Assets with substantial economic lives and, in many
cases, associated revenue streams. The pooled capital contributions also will be used to pay fees and expenses associated with our organization and
this offering and to fund a capital reserve. We will not borrow funds, but will instead use only our net proceeds from this offering and funds
generated from our operations, less capital reserves, to make investments. |
||||||
Many
of our investments will be structured as full payout or operating equipment leases. In addition, we intend to invest by way of participation agreements
and residual sharing agreements where we acquire an interest in a pool of equipment or other assets or rights to the equipment or other assets, at a
future date. We also may structure investments as project financings that are secured by, among other things, essential use equipment and/or assets.
Finally, we may use other investment structures, such as vendor and rental programs, which our Investment Manager believes will provide us the
appropriate level of security, collateralization, and flexibility to optimize our return on investment while protecting against downside risk. In many
cases, the structure will include us holding title to or a priority or controlling position in the equipment or other asset. |
||||||
Although the composition of our portfolio cannot be determined at this stage, we expect to invest in assets and equipment that are considered
essential use or core to a business or operation in the agricultural, energy, environmental, medical, manufacturing, technology, and transportation
industries. Our Investment Manager also may identify other assets or industries that meet our investment objectives. We expect to invest in assets and
equipment located primarily within the U.S., Canada and the European Union but may also make investments in other parts of the world. See the
Investment Objectives and Strategies section of this prospectus beginning on page 50. |
We
expect that we will conduct our activities for approximately five to seven years and divide the life of the Fund into three periods: |
||||||
Offering Period. We will raise money from investors during this period which we expect will last for up to two years
from the date of this prospectus. Our initial closing will occur after we have raised $1,200,000 (excluding cash subscriptions, if any, from our
General Partner or its affiliates and from residents of Pennsylvania). After we have raised a minimum of $1,200,000, we will continue to hold regular
closings to admit new investors until the earlier of (i) two years from the date hereof, or (ii) the date that we have raised
$200,000,000. |
||||||
Operating Period. The Operating Period will commence after the initial closing at which time we will begin investing
offering proceeds in business-essential, revenue-producing (or cost-saving) equipment and Other Physical Assets with substantial economic lives and, in
many cases, associated revenue streams. We anticipate that the Operating Period will overlap with the Offering Period and, unless extended by our
General Partner in its sole discretion, will last for three years from the date it begins. During the Operating Period, we will continue to invest and
re-invest in business-essential, revenue-producing (or cost-saving) equipment and Other Physical Assets with substantial economic lives and, in many
cases, associated revenue streams. |
||||||
Liquidation Period. Unless extended by our General Partner in its sole discretion, the Liquidation Period will last
two years. During the Liquidation Period we will make irregular distributions to you and our other limited partners as the investments in the portfolio
mature. We generally will not reinvest the proceeds from investments during this period. It is our intention to wind down the portfolio and distribute
proceeds to you and the other limited partners during this period. |
||||||
We
are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. We could remain an
emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross
revenues exceed $1,000,000,000, (ii) the date that we become a large accelerated filer, as defined in the Securities Exchange Act
of 1934, as amended, which would occur if the market value of our common units that are held by non-affiliates exceeds $700,000,000 as of
the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than
$1,000,000,000 in non-convertible debt during the preceding three-year period. Emerging growth companies |
may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, Section 107(b) of the JOBS Act also provides that an emerging growth company may take advantage of the extended transition period for complying with new or revised accounting standards. In other words, an emerging growth company may delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to opt out of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
Management |
Our
General Partner, SQN AIF IV GP, LLC, and our Investment Manager, SQN Capital Management, LLC, will manage all aspects of our business. Our General
Partner will manage all of our day to day activities and operations and our Investment Manager will make all of our investment decisions and manage our
investment portfolio. The principal office of our General Partner and Investment Manager is 110 William Street, 26th Floor, New York, New York 10038,
and their telephone number is (212) 422-2166. Jeremiah J. Silkowski is the President and CEO of our General Partner and our Investment Manager and
would be considered our promoter. Jeremiah J. Silkowski and Michael Miroshnikov are the current |
|||||
members of our Investment Managers investment committee. We anticipate appointing a Vice President level individual as the third member
of the investment committee. Mr. Silkowski will maintain ultimate investment discretion on the funding of any transactions and Mr. Silkowskis
approval will be needed to approve all such funding. The members of our Investment Managers investment committee may be contacted at SQN Capital
Management, LLC, 110 William Street, 26th Floor, New York, New York 10038, telephone (212) 422-2166. See the Management Investment
Committee section of this prospectus beginning on page 43. |
The
management team of our General Partner, our Investment Manager and their affiliates has substantial experience in the lease investment and finance
industries. See the Management section of this prospectus beginning on page 42. |
||||||
Investment
Objectives |
Our
investment objectives are to: |
|||||
preserve, protect and return your invested capital; |
||||||
generate quarterly cash distributions to you and our other partners during the Operating Period; |
||||||
during the period from the date of the initial closing through the end of the Operating Period make investments in
business-essential, revenue-producing (or cost-saving) equipment and Other Physical Assets with substantial economic lives and, in many cases,
associated revenue streams; |
||||||
during the Liquidation Period wind down our portfolio and distribute the proceeds therefrom to you and our other limited
partners; |
||||||
generate investment returns that are not correlated to stock, bond, real estate or commodity markets; and |
||||||
generate a favorable total return on your investment. |
||||||
During the Operating Period, we plan to make quarterly distributions of cash to you and our other partners, if, in our Investment
Managers opinion, such distributions are in our best interests. Therefore, the amount and rate of cash distributions could vary and are not
guaranteed. The targeted distribution rate is 6.5% annually, paid quarterly as 1.625%, of your capital contribution. |
||||||
See
the Investment Objectives and Strategies section of this prospectus beginning on page 50 and the Income, Losses and
Distributions section of this prospectus beginning on page 62. |
||||||
Most,
if not all, of our equipment under our operating leases in the U.S., but not under our full payout leases or other investments, is expected to be
depreciated using accelerated depreciation methods under the Modified Accelerated Cost Recovery System. See the Material U.S. Federal Income Tax
Consequences section of this prospectus beginning on page 64. |
Risk
Factors |
Investing in our units involves a high degree of risk. Accordingly, you should read this entire prospectus, including the section entitled
Risk Factors, before making an investment decision. |
|||||
A substantial portion, and possibly all, of the cash distributions you receive from us will be a return of capital and not a
return on capital. The sources of Distributable Cash are: (i) cash from operations; and (ii) offering proceeds. Unlimited amounts from either source
may be used for distributions to investors. As a result, the amounts paid as cash distributions will reduce the amount of funds available for
investment in equipment. |
||||||
This is a blind-pool offering because we have not specifically identified our investments at the time you
invest. As a result, you cannot evaluate the risks of, or potential returns from, any of our investments at the time you invest. |
||||||
Our units will not be listed on any stock exchange or interdealer quotation system, and there are significant restrictions
in our partnership agreement on your ability to transfer your units. We do not intend to assist in the development of any secondary market for, or
provide qualified matching services for purchasers and sellers of our units. Any sale that you may be able to arrange for your units, including the
redemption of units by us, which is at our General Partners sole discretion, is likely to be at a substantial discount to your investment,
partnership equity per unit or other measures of value. Therefore, your units will effectively be illiquid. You should be prepared to hold your units
for the life of the Fund, which is anticipated to be approximately five to seven years, but may be longer. |
||||||
You will have very limited voting rights and you must rely on our General Partner, our Investment Manager and their
affiliates to manage us. |
||||||
A prolonged economic recession or changes in general economic conditions, or both, including fluctuations in demand for
equipment and other portfolio assets, lease rates, and interest rates may result in delays in investment and reinvestment, delays in leasing,
re-leasing and disposition of equipment, and reduced returns on capital. |
Higher than expected lease and other investment defaults may result in our inability to fully recover our investment or
expected income from the affected equipment or physical assets and could reduce our cash distributions to you and our other limited partners.
Uncertainties associated with the equipment leasing industry may have an adverse effect on our business and may adversely affect our ability to provide
you any economic return from our units or a complete return of your capital. |
||||||
Our success will depend in part on our ability to realize residual value from a portion of our assets and equipment once the
leases on those assets and equipment terminate. |
||||||
Our General Partner, our Investment Manager and their affiliates will receive significant compensation from us, which will
reduce distributions to you. |
||||||
There are potential conflicts of interest between us and our General Partner, our Investment Manager and their
affiliates. |
||||||
There are material income tax risks associated with this offering. |
||||||
See
the Risk Factors section of this prospectus beginning on page 18. |
||||||
Income,
Losses, and Distributions |
Our
income, losses and distributions will be allocated 99% to you and our other limited partners and 1% to our General Partner until you and our other
limited partners have received total distributions equal to your and their capital contributions plus an 8% per annum, compounded annually, cumulative
return on your and their capital contributions. After such time, all distributed Distributable Cash will be allocated 80% to you and our other limited
partners and 20% to our General Partner. Until the end of the Operating Period (and in certain circumstances, during the Liquidation Period), we may
invest our Net Disposition Proceeds in additional investments. See the Income, Losses and Distributions section of this prospectus
beginning on page 62. |
|||||
Material
U.S. Federal Income Tax Consequences |
This
prospectus has a discussion of material U.S. Federal income tax consequences relating to an investment in our units. Our counsel, Troutman Sanders LLP,
is of the opinion that we will be treated as partnership and not an association taxable as a corporation for federal income tax purposes and that we
will not be a publicly traded partnership within the meaning of Section 7704 of the Code. For a more complete description of the Federal
income tax consequences you should read the Material U.S. Federal Income Tax Consequences section of this prospectus beginning on page
64. Investors should |
consult with their tax and financial advisors to determine whether an investment in our units is suitable for their
portfolio. |
||||||
Investor
Suitability Requirements |
The
units are a long-term investment. Investors must satisfy minimum net worth and income requirements. We have established minimum investor suitability
requirements and many state securities commissioners have established investor suitability standards different from these minimum standards which apply
to investors in their respective jurisdictions. See the Investor Suitability section of this prospectus beginning on page
vi. |
|||||
Glossary |
In
general, defined terms in this prospectus have the meanings assigned to them in the Glossary to this prospectus, or if not defined therein, in our
partnership agreement, which is attached as Appendix A to this prospectus. |
Securities
Offered |
A
minimum of 1,200 units ($1,200,000) and a maximum of 200,000 units ($200,000,000). Our General Partner and Investment Manager have determined that the
minimum offering amount represents a level of subscription proceeds which will enable our portfolio to be sufficiently diversified. Our General Partner
and Investment Manager have limited our maximum offering amount to 200,000 units ($200,000,000). |
|||||
Minimum
Investment |
You
must purchase a minimum of 5 units for an aggregate of $5,000. However, the minimum may be waived by our General Partner, at its sole discretion, on a
case-by-case basis. |
|||||
Offering
Period |
The
earlier of (i) two years from the date hereof, or (ii) the date that we have raised $200,000,000. This offering will terminate if we do not receive and
accept subscriptions for the minimum offering amount of 1,200 units ($1,200,000), excluding cash subscriptions, if any, from our General Partner or its
affiliates and from residents of Pennsylvania, on or prior to one year from the date of this prospectus. As state securities registrations are
generally approved in one year increments, we will only be permitted to continue to offer limited partner interests after one year from the date of
this prospectus in those states in which we successfully renew our state securities registrations. |
Escrow |
We
will deposit your investment in an interest-bearing escrow account until we have received the minimum offering amount or one year from the date of this
prospectus, whichever is earlier. If we have not received the minimum offering amount by such date, all of your funds will be promptly returned to you
with any interest earned, and without deduction for any fees. If we receive the minimum offering amount on or before one year from the date of this
prospectus, however, then: |
|||||
you will be admitted as a limited partner, in our General Partners discretion; |
||||||
your escrowed subscription proceeds will be delivered to us for use as described in this prospectus; and |
||||||
the interest earned on your escrowed subscription proceeds, net of bank fees, will be paid to you in cash. |
||||||
Estimated
Use of Proceeds |
We
expect that: |
|||||
approximately 87.5% of the gross proceeds of this offering will be available for investment and to pay fees associated with
such investments; |
||||||
0.5% of the gross proceeds of this offering will be used to fund a capital reserve; and |
||||||
the remaining 12% of the gross proceeds of this offering will be used to pay fees and expenses related to our organization
and this offering, including fees to be paid to our selling agent and commissions to be paid to third party
broker-dealers. |
||||||
We
will not borrow funds, but will instead use only our net proceeds from this offering and funds generated from our operations, less
capital reserves, to make investments. |
||||||
See
the Estimated Use of Proceeds section of this prospectus beginning on page 13. |
||||||
Fees of Our
General Partner, its Affiliates and Certain Non-Affiliates |
Our
General Partner, our Investment Manager and their affiliates, including SQN Securities, LLC in its capacity as our selling agent, and certain
non-affiliates (namely, Selling Dealers) will receive fees and compensation from the offering of our units, including the following: |
|||||
Underwriting Fees: We will pay 3% of the gross proceeds of this offering (excluding proceeds, if any, we receive from
the sale of our units to our General Partner or its affiliates) to our selling agent or selling agents. While SQN Securities, LLC will initially act as
our exclusive selling agent, we may engage additional selling agents in the future. From these Underwriting Fees, a selling agent may pay Selling
Dealers as a marketing reallowance an aggregate of up to 1% of the offering proceeds of the units sold by such Selling Dealers. This marketing
reallowance may be paid to |
Selling Dealers that actively assist in marketing efforts to reimburse them for permissible marketing expenses. This fee will vary, and
may be up to 1%, depending upon separately negotiated agreements with each Selling Dealer. |
||||||
Sales Commissions: We will pay up to 7% of the gross proceeds of this offering (excluding proceeds, if any, we
receive from the sale of our units to our General Partner or its affiliates) to Selling Dealers. |
||||||
Organizational and Offering Expense Allowance: Our General Partner will receive an organizational and offering
expense allowance (the Organizational and Offering Expense Allowance) of up to 2% of our offering proceeds to reimburse it for expenses
incurred in preparing us for registration or qualification under federal and state securities laws and subsequently offering and selling our units. The
Organizational and Offering Expense Allowance will be paid out of the proceeds of this offering. The Organizational and Offering Expense Allowance will
not exceed the actual fees and expenses incurred by our General Partner and its affiliates. Because organizational and offering expenses will be paid
as and to the extent they are incurred, organizational and offering expenses may be drawn disproportionately to the gross proceeds of each
closing. |
||||||
Management Fee: During the Operating Period and the Liquidation Period, our Investment Manager will receive a
management fee in an amount equal to the greater of (i) 2.5% per annum of the aggregate offering proceeds, or (ii) $125,000, payable monthly, until
such time as an amount equal to at least 15% of our limited partners capital contributions has been returned to them, after which the monthly
management fee will equal 100% of the management fee as initially calculated above, less 1% for each additional 1% of our limited partners
capital contributions returned to them, such amounts to be measured on the last day of each month, such that, for example, after the return of 16% of
our limited partners capital contributions, the monthly management fee will equal 99% of the management fee payable as initially calculated
above. In determining the Management Fees, amounts payable in respect of the 8% per annum cumulative return (including our targeted distributions of
6.5% annually) shall not be considered a return of our limited partners capital contributions regardless of when received or the tax treatment
attributable to such amounts. The amount of the Management Fee payable in any year will be reduced to the extent that it would exceed the maximum
amount of fees that are permissible under the |
Statement of Policy on Equipment Programs of the North American Securities Administrators Association, Inc. (NASAA
Guidelines). |
||||||
Distributions and Promotional Interest. Our General Partner will initially receive 1% of all distributed
Distributable Cash. Our General Partner will have a Promotional Interest in us equal to 20% of all distributed Distributable Cash after we have
provided a return to our limited partners of their respective capital contributions plus an 8% per annum, compounded annually, cumulative return on
their capital contributions. |
||||||
Our General
Partners and Investment Managers Relationship with Us May be Conflicted |
Our
General Partner, our Investment Manager and their affiliates may be subject to conflicts of interest because of their relationship to us. These
potential conflicts include: |
|||||
our General Partner, our Investment Manager and their affiliates may compete with us; |
||||||
no independent underwriter conducted due diligence with respect to this offering; |
||||||
we and our General Partner, our Investment Manager and their affiliates are not represented by separate
counsel; |
||||||
we will rely on employees of our General Partner, our Investment Manager and their affiliates; |
||||||
the resolution of conflicts will be undertaken by the investment committee of our Investment Manager; and |
||||||
our General Partner will act as our tax matters partner. |
||||||
See
the Conflicts of Interest and Fiduciary Responsibilities section of this prospectus beginning on page 34 and the Other
Programs Managed by Our Investment Manager or its Affiliates section of this prospectus beginning on page 46. |
||||||
Partnership
Agreement |
You
and the other purchasers of our units will be our limited partners. Our partnership agreement will govern the following: |
|||||
our activities; |
||||||
the relationships among you and our other limited partners; and |
||||||
the relationship between our General Partner, our Investment Manager and their affiliates, on the one hand, and you and our
other limited partners, on the other hand. |
The
following is a brief summary of some of the principal provisions of our partnership agreement, apart from the income, loss and distribution allocation
provisions and the fees of our General Partner, our Investment Manager and their affiliates described previously in this summary. See the Summary
of Our Partnership Agreement section of this prospectus beginning on page 87. In addition, you should read the form of our partnership
agreement, which is included as Appendix A to this prospectus. |
||||||
Voting rights: You will have one vote for each unit you purchase. You and our other limited partners are entitled to
vote on specified fundamental matters, such as: |
||||||
amendments to our partnership agreement; |
||||||
removal of our General Partner and election of a substitute general partner; |
||||||
our merger with another entity; |
||||||
the sale of all, or substantially all, of our assets (except during the Liquidation Period); or |
||||||
our dissolution. |
||||||
Otherwise, you and our other limited partners have no participation in determining our operations or policies. |
||||||
Meetings: Our General Partner, or our limited partners holding 10% or more of our outstanding units, may call a
meeting of the limited partners on matters on which they are entitled to vote. |
||||||
Limited liability: So long as you do not participate in the control of our business and otherwise act in conformity
with our partnership agreement, your liability as a limited partner will be limited to the amount of your invested capital, plus your share of any of
our undistributed profits and assets. |
||||||
Transferability of units: Our partnership agreement restricts the transfer of units so that we will not be treated as
a publicly traded partnership for federal income tax purposes and will not be taxed as a corporation. As a result of these restrictions,
you probably will not be able to transfer your units if, or when, you want to. |
||||||
Removal of general partner: Our General Partner may be removed only on a vote of limited partners holding a majority
of our outstanding units. Neither our General Partner nor any of its affiliates may participate in any vote by you and our other limited partners to
remove our General Partner as general partner. |
Amendment of partnership agreement: Our partnership agreement generally may be amended by the vote of limited
partners holding a majority of our outstanding units. However, no amendment may be made that would change any partners interest in distributions
without the consent of all affected partners. |
||||||
Term: Our term will end at midnight on December 31, 2036, unless we are sooner dissolved or our term is terminated by
our General Partner. |
||||||
Fiduciary Duties of our Investment Manager: The fiduciary duties of our Investment Manager have been modified because
our Investment Manager has sponsored and managed, continues to sponsor and manage, and may in the future sponsor and manage, other equipment funds
similar to us. |
||||||
Subscription Procedure |
You
must fill out and sign a subscription agreement, the form of which is attached to this prospectus as Appendix C, in order to purchase our units. You
should send your subscription agreement and a check for the purchase price of your units as instructed in the subscription agreement. Wire transfer
instructions are available on request. |
|||||
Closings |
We
will hold the initial closing of this offering when we receive subscription proceeds of at least $1,200,000, excluding subscription proceeds, if any,
from Pennsylvania residents and from our General Partner and its affiliates. At that time, we will (i) admit investors as limited partners, (ii)
receive the escrowed subscription proceeds from the escrow agent, and (iii) pay to the investors in cash the interest earned on each of their escrowed
subscription proceeds, net of bank fees. After the initial closing, we will hold regular closings until we have sold all of the units or this offering
closes, whichever comes first. |
Minimum Offering |
Maximum Offering |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amount |
Percent |
Amount |
Percent |
||||||||||||||||
Gross
Offering Proceeds |
$ | 1,200,000 | 100.00 | % | $ | 200,000,000 | 100.00 | % | |||||||||||
Less
Underwriting Fees(1) |
36,000 | 3.00 | % | 6,000,000 | 3.00 | % | |||||||||||||
Less Sales
Commissions(2) |
84,000 | 7.00 | % | 14,000,000 | 7.00 | % | |||||||||||||
Less
Organizational and Offering Expense Allowance(3) |
24,000 | 2.00 | % | 4,000,000 | 2.00 | % | |||||||||||||
Net Offering
Proceeds |
1,056,000 | 88.00 | % | 176,000,000 | 88.00 | % | |||||||||||||
Capital
Reserves(4) |
6,000 | 0.50 | % | 1,000,000 | 0.50 | % | |||||||||||||
Total
Proceeds Available for Investment(5) |
1,050,000 | 87.50 | % | 175,000,000 | 87.50 | % |
(1) |
We will pay 3% of the gross proceeds of this offering (excluding proceeds, if any, we receive from the sale of our units to our General Partner or its affiliates) to the selling agent or selling agents. From these Underwriting Fees, the selling agent may pay Selling Dealers as a marketing reallowance an aggregate of up to 1% of the offering proceeds of the units sold by such Selling Dealers. This marketing reallowance may be paid to Selling Dealers that actively assist in marketing efforts, to reimburse them for permissible marketing expenses. This fee will vary, and may be up to 1%, depending upon separately negotiated agreements with each Selling Dealer. |
(2) |
We will pay up to 7% of the gross proceeds of this offering (excluding proceeds, if any, we receive from the sale of our units to our General Partner or its affiliates) to Selling Dealers. |
(3) |
Includes expenses incurred in connection with our organization and expenses incurred in connection with the offering and the sale of our units other than Sales Commissions and Underwriting Fees. The Organizational and Offering Expense Allowance will be paid out of the proceeds of this offering as expenses are incurred and will be capped at the lesser of 2% of the maximum possible gross proceeds of this offering (assuming all 200,000 units are sold in this offering) and expenses actually incurred. Because organizational and offering expenses will be paid as and to the extent they are incurred, organizational and offering expenses may be drawn disproportionately to the gross proceeds of each closing. |
(4) |
We will initially establish capital reserves in an amount equal to 0.5% of offering proceeds for general working capital purposes. This amount may fluctuate from time to time as our General Partner determines the level of reserves necessary for our proper operation in the exercise of its business judgment. Any net offering proceeds not used to acquire portfolio investments or needed as capital reserves will be returned to our limited partners as described under Investment Objectives and Strategies beginning on page 50 of this prospectus. |
(5) |
Represents the amount available to pay the cash portion of the purchase price of equipment or other assets plus related acquisition expenses and management fees. We will not borrow funds, but will instead use only our net proceeds from this offering and funds generated from our operations, less capital reserves, to make investments. |
Entity Receiving Compensation |
Type of Compensation |
Estimated Amount |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
COMPENSATION RELATED TO OUR ORGANIZATION AND OFFERING |
|||||||||||
Selling
Agent |
Underwriting Fees. We will pay 3% of the gross proceeds of this offering (excluding proceeds, if any, we receive from the sale of our
units to our General Partner or its affiliates) to the selling agent. From these Underwriting Fees, the selling agent may pay Selling Dealers as a
marketing reallowance an aggregate of up to 1% of the offering proceeds of the units sold by such Selling Dealers. This marketing reallowance may be
paid to Selling Dealers that actively assist in marketing efforts to reimburse them for permissible marketing expenses. This fee will vary, and may be
up to 1%, depending upon separately negotiated agreements with each Selling Dealer. |
Because Underwriting Fees are based upon the number of units sold, the total amount of Underwriting Fees cannot be determined until this
offering is complete. Underwriting Fees of up to $36,000 will be paid if the minimum number of 1,200 units is sold in this offering. Underwriting Fees of up to $6,000,000 will be paid if the maximum number of 200,000 units is sold in this offering. |
|||||||||
Selling
Dealers |
Sales Commissions. We will pay up to 7% of the gross proceeds of this offering (excluding proceeds, if any, we receive from the sale of
our units to our General Partner or its affiliates) to Selling Dealers. Our General Partner and its affiliates do not currently intend to purchase any
of our units offered hereby. |
Because Sales Commissions are based upon the number of units sold by the Selling Dealers, the total amount of Sales Commissions cannot be
determined until this offering is complete. Sales Commissions of up to $84,000 will be paid if the minimum number of 1,200 units is sold in this offering. Sales Commissions of up to $14,000,000 will be paid if the maximum number of 200,000 units is sold in this offering. |
Entity Receiving Compensation |
Type of Compensation |
Estimated Amount | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
General
Partner and affiliates |
Organizational and Offering Expense Allowance. We will pay our General Partner an allowance for organizational and offering expenses
out of the proceeds of this offering. The amount of the Organizational and Offering Expense Allowance is based upon the number of units sold, including
units, if any, sold to our General Partner or its affiliates. Total organizational and offering expenses payable or reimbursable by us may not exceed
2% of the maximum offering proceeds. The Organizational and Offering Expense Allowance will not exceed the actual fees and expenses incurred by our
General Partner or its affiliates in connection with our organization and this offering. Because organizational and offering expenses will be paid as
and to the extent they are incurred, they may be drawn disproportionately to the gross proceeds of each closing. |
Because the Organizational and Offering Expense Allowance is based upon the total amount of organizational and offering expenses incurred by
our General Partner or its affiliates, the total amount of the Organizational and Offering Expense Allowance cannot be determined until this offering
is complete. Notwithstanding the number of units sold in the offering, the total Organizational and Offering Expense Allowance payable by us may not
exceed 2% of the maximum offering proceeds, or $4,000,000. |
|||||||||
COMPENSATION RELATED TO OUR OPERATION AND LIQUIDATION |
|||||||||||
Investment
Manager |
Management Fee. During the Operating Period and the Liquidation Period, we will pay our Investment Manager a management fee in an
amount equal to the greater of (i) 2.5% per annum of the aggregate offering proceeds, or (ii) $125,000, payable monthly, until such time as an amount
equal to at least 15% of our limited partners capital contributions has been returned to them, after which we will pay our Investment Manager a
monthly management fee equal to 100% of the management fee as initially calculated above, less 1% for each additional 1% of our limited partners
capital contributions returned to them, such amounts to be measured on the last day of each month, such that, for example, after the return of 16% of
our limited partners capital contributions, we will pay our Investment Manager a monthly management fee equal to 99% of the management fee
payable as initially calculated above. In determining the Management Fees, amounts payable in respect of the 8% per annum cumulative return (including
our targeted distributions of 6.5% annually) shall not be considered a return of our limited |
The
total amount of the Management Fee to be paid each month cannot be determined because it is based on the aggregate offering proceeds. |
Entity Receiving Compensation |
Type of Compensation |
Estimated Amount | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
partners capital contributions regardless of when received or the tax treatment attributable to such amounts. The amount of the Management Fee payable in any year will be reduced for that year to the extent it would otherwise exceed the maximum amount of fees that are permissible under the NASAA Guidelines. The Management Fee will be paid for services rendered by our Investment Manager and its affiliates in determining portfolio and investment strategies and generally managing or supervising the management of the investment portfolio. Our Investment Manager will supervise performance of all management activities, including, among other activities: |
||||||||||
the acquisition and financing of the investment portfolio and the collection of lease and other revenues; |
||||||||||
monitoring compliance by lessees and other counterparties with their contract terms; |
||||||||||
assuring that investment assets are used in accordance with all operative contractual arrangements; |
||||||||||
paying operating expenses and arranging for necessary maintenance and repair of equipment and property in the event a lessee
fails to do so; |
||||||||||
monitoring property, sales and use tax compliance; |
||||||||||
originating and servicing our investment portfolio; and |
||||||||||
preparation of operating financial data (excluding financial statements and tax matters). |
||||||||||
General
Partner and affiliates |
Reimbursement of Operating and Administrative Expenses. We may reimburse our General Partner, our Investment Manager and their
affiliates for expenses they pay on our behalf. These reimbursements will include: |
The
total amount of operating and administrative expenses cannot be determined at this time. |
||||||||
the actual cost to our General Partner, our Investment Manager or their affiliates of services, goods and materials used for
and by us and obtained from unaffiliated parties; and |
Entity Receiving Compensation |
Type of Compensation |
Estimated Amount |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
the cost of administrative services provided by our General Partner, our Investment Manager and their affiliates and
necessary or prudent for our operation, provided that reimbursement for administrative services will be at the lower of (i) the actual cost of such
services, or (ii) the amount that we would be required to pay to independent parties for comparable services. |
|||||||||||||
General
Partner and affiliates |
Distributions and Promotional Interest. Our General Partner will initially have a Promotional Interest in us equal to 1% of all
distributed Distributable Cash. Our General Partner will have a Promotional Interest in us equal to 20% of all distributed Distributable Cash after we
have provided a return to our limited partners of their respective capital contributions plus an 8% per annum, compounded annually, cumulative return
on their capital contributions. Our General Partner will not contribute any cash to us in return for such 20% Promotional Interest. The amount of the
Promotional Interest payable in any year will be reduced for that year to the extent it would otherwise exceed the maximum amount of fees that are
permissible under the NASAA Guidelines. |
The
total amount of distributions and Promotional Interest cannot be determined because it will depend upon the amount by which our income from operations
and from the disposition of investments exceeds our expenses as well as whether the required investor return has been achieved. |
|
the demand for the leases we provide; |
|
profitability of our operations; |
|
lease and other investment defaults; |
|
prevailing economic conditions; and |
|
government regulations. |
|
during the Liquidation Period, cash distributions will be irregular while our investments are being disposed of; and |
|
large returns of capital during our term will reduce the cash available for future distributions. |
associated with the investment in our units as you do not have information about the transactions we will enter into, including:
|
the types, ages, manufacturers, model or condition of the equipment and other assets in our portfolio; |
|
the identity, financial condition and creditworthiness of the end-users; |
|
the terms and conditions of the transactions; |
|
the type of collateral securing the investment; |
|
the purchase price that will be paid for our investments; or |
|
the expected residual value of the investments. |
|
an Offering Period of up to two years; |
|
an Operating Period of three years will begin after the initial closing, which we expect will overlap with the Offering Period; and |
|
a subsequent Liquidation Period of approximately two years, during which our investments will either mature or be sold. |
|
the ability of our Investment Manager to source appropriate transactions for us in a timely manner; |
|
the quality of the investment decisions our Investment Manager makes, especially relating to the types of investments we make, the timing and management of those investments, assessments of potential end-users and the residual value of our investments; and |
|
our Investment Managers ability to extract maximum value from assets and equipment once they reach the end of the lease term. |
|
we have no obligation to redeem any of your units; |
|
we will not maintain a cash reserve for this purpose; and |
|
in any given year our total unit transfers, including redemptions of our units, may not exceed 2% of our total capital or profits interests. |
|
the right to remove our General Partner and elect a substitute general partner; |
|
the right to approve certain amendments to our partnership agreement; or |
|
the right to take other specified actions under our partnership agreement. |
|
changes in economic conditions, including fluctuations in demand for equipment and other assets, interest rates and inflation rates; |
|
the quality of the equipment or other assets we acquire and lease or finance; |
|
the continuing strength of equipment manufacturers; |
|
the timing of our investments and our ability to forecast technological advances; |
|
technological and economic obsolescence of the equipment and other assets we acquire; |
|
defaults by our lessees or other counterparties; and |
|
increases in our expenses, including labor, tax and insurance expenses. |
levels of capital expenditure by businesses may result in more used equipment becoming available on the market and downward pressure on prices and lease rates due to excess inventory. Periods of low interest rates exert downward pressure on lease rates and may result in less demand for lease financing. There can be no assurance as to what future developments may occur in the economy in general or in the demand for equipment and lease financing in particular.
|
we may experience difficulties and delays in recovering the equipment or other asset from the defaulting party; and |
|
we may be unable to enforce important contract provisions against the insolvent party, including the contract provisions that require the equipment or other asset to be returned to us in good condition. |
|
enforcing a lessees or borrowers contract obligations; |
|
recovering the equipment or other asset from the defaulting party; |
|
transporting, storing, and repairing the equipment or other asset; and |
|
finding a new lessee or purchaser for the equipment or other asset. |
|
it is often relatively easy for new entrants to enter the equipment leasing industry as lessors; |
|
leasing companies often act irrationally or unprofitably to gain market share, reducing the availability of attractive lease transactions to other lessors in the market; and |
|
lease transactions are not always written in a manner which provide the lessor with an appropriate rate of return for the risk being assumed. |
|
a large number of national, regional and local banks, savings banks, leasing companies and other financial institutions; |
|
captive finance and leasing companies affiliated with major equipment manufacturers; and |
|
other sources of equipment lease financing, including other publicly-offered partnerships. |
|
whether the original lessee wants to keep the equipment or other asset; |
|
the cost of comparable new equipment or other asset; |
|
whether the leased equipment or other asset is obsolete or in poor condition; and |
|
whether there is a secondary market for the type of used equipment or other asset. |
|
the general market value for the equipment or other asset at the time we are attempting to remarket that equipment or other asset; |
|
the cost of new equipment or other asset at the time we are remarketing the used equipment or other asset; |
|
technological and regulatory developments since our initial purchase of the equipment or other asset which could reduce the market value of the equipment or other asset; |
|
general economic conditions and the conditions in industry-specific market sectors; and |
|
the condition of the equipment or other asset returned to or repossessed by us. |
|
our co-venturer may have business or economic objectives or interests that are inconsistent with ours and it may want to manage the joint venture in ways that do not maximize our return; |
|
actions by a co-venturer might subject equipment or other asset leases owned by the joint venture to liabilities greater than those we contemplate; and |
|
when more than one person owns property, there may be a stalemate on decisions, including decisions regarding a proposed sale or other transfer of the equipment or other assets. |
proposed sale of the equipment or other assets, we may not have the resources to do so. See the Conflicts of Interest and Fiduciary Responsibilities We May Enter Into Joint Ventures With Affiliated Programs section of this prospectus.
|
with foreign clients; |
|
where the equipment or other asset is permanently or temporarily located outside the U.S.; or |
|
where the contracts are governed by foreign laws. |
|
we may have difficulty enforcing our rights under foreign contracts; |
|
we may have difficulty repossessing our equipment or other assets outside the U.S.; |
|
legal costs may be higher outside the U.S.; |
|
foreign governments may confiscate equipment or other assets, nationalize equipment, retrospectively change laws, impose new or changed fees, duties or taxes or impose foreign exchange restrictions which hamper our ability to receive payment in the U.S.; |
|
foreign courts may not recognize judgments obtained in U.S. courts; |
|
we may have documentary risks where contracts are written in a language other than English; |
|
complications may arise from interpretations of tax or legal codes and any regulatory registration requirements; |
|
changes in, or interpretations of, foreign laws and regulations may adversely affect our ability to enter into leases, sell equipment or other assets or repatriate profits to the U.S.; |
|
the income earned in foreign jurisdictions may be subject to withholding and/or income taxes, and depending on the foreign country, the U.S. may not have a tax treaty in place to reduce or eliminate the tax; and |
|
the U.S. tax code imposes restrictions on the use of foreign tax credits, which may prevent you from claiming full credit for your share of foreign taxes. See the Material U.S. Federal Income Tax Consequences section of this prospectus. |
|
our partnership agreement does not prohibit our General Partner, our Investment Manager or any of their affiliates from competing with us for investments and engaging in other types of business; |
|
the initial selling agent, which is an affiliate of our General Partner and our Investment Manager and not an independent securities firm, will review and perform due diligence on us and the information in this prospectus and thus its review cannot be considered an independent review and may not be as meaningful as a review conducted by an unaffiliated broker-dealer; |
|
the lack of separate legal representation for us and our General Partner and our Investment Manager and lack of arms-length negotiations regarding compensation payable to our General Partner and our Investment Manager; |
|
we will pay fees to our General Partner, our Investment Manager and their affiliates including the initial selling agent, before distributions are paid to you and other partners even if we do not generate profits; |
|
we rely on the employees of our General Partner, our Investment Manager and their affiliates; |
|
the resolution of conflicts will be undertaken by the investment committee of our Investment Manager; and |
|
our General Partner will act as our tax matters partner, and will negotiate with the Internal Revenue Service (IRS) to settle tax disputes that would bind us and our other partners; those negotiations might not be in your best interests given your individual tax situation. |
computer and telecommunications and related equipment, and their ability to protect those systems against damage or disruptions from such contingencies as:
|
power loss; |
|
acts of God, such as earthquakes, etc.; |
|
telecommunications failure; |
|
acts of terrorism; |
|
computer intrusions; and |
|
viruses and similar adverse events. |
|
which program has been seeking investments for the longest period of time; |
|
whether the program has the cash required for the investment; |
|
the effect the investment would have on the programs cash flow; |
|
whether the investment would further diversify, or unduly concentrate, the programs investments in a particular lessee or borrower, class or type of equipment, location, industry, etc.; and |
|
whether the term of the investment is within the term of the program. |
reports to you. See the Management Compensation and Reports to Limited Partners sections of this prospectus.
further growth in its assets under management. Our Investment Managers future success will depend on the ability of its officers and key employees to implement and improve its operational, financial and management controls, reporting systems and procedures, and manage a growing number of assets and investment funds. Our Investment Manager, however, may not implement improvements to its management information and control systems in an efficient or timely manner and may discover deficiencies in its existing systems and controls. Thus, our Investment Managers anticipated growth may place a strain on its administrative and operations infrastructure, which could increase its costs and reduce its efficiency and could negatively impact our operating results.
|
tax losses realized by us would not pass through to you; |
|
we would be taxed at income tax rates applicable to corporations, which would reduce our cash distributions to you and our other partners; and |
|
our distributions to you and our other partners would be taxable to you and our other limited partners as dividend income to the extent of our current and accumulated earnings and profits. |
|
investment objectives; |
|
references to future operating results, credit availability and financial success; |
|
expected distributions; |
|
business strategy; |
|
competitive strengths and goals; and |
|
other similar matters. |
|
changes in economic conditions, including fluctuations in demand for equipment or other assets, interest rates and inflation rates; |
|
the quality of equipment and other assets we acquire and lease or finance; |
|
the continuing strength of equipment and other manufacturers; |
|
the timing of our equipment and other asset purchases and our ability to forecast technological advances; |
|
technological and economic obsolescence of the equipment and other assets we acquire; |
|
defaults by our lessees or other counterparties; and |
|
increases in our expenses. |
|
limit the actions our General Partner may take on our behalf; |
|
limit the compensation and fees we will pay our General Partner, our Investment Manager and their affiliates; and |
|
limit the expenses for which we will reimburse our General Partner, our Investment Manager and their affiliates. |
|
the amount and timing of asset and equipment purchases and sales; |
|
cash expenditures; |
|
financing; and |
|
the creation, reduction or increase of reserves. |
necessary to meet our obligations. Because our General Partner may be exposed to liability to our creditors if our reserves are insufficient to pay our contingent liabilities, our General Partner may have a conflict of interest in allocating our cash flow between distributions to you and our other partners or to our reserve accounts. To the extent that our General Partner increases the amount of cash it allocates to reserves, the amount of Distributable Cash to you and our other partners will decrease and our General Partners exposure to our contingent liabilities may be lessened.
|
have different investment objectives; or |
|
are specified equipment programs, as defined under relevant securities regulations or state securities guidelines. |
|
which program has been seeking investments for the longest period of time; |
|
whether the program has the cash required for the investment; |
|
whether the amount of debt to be incurred with respect to the investment is acceptable for the program; |
|
the effect the investment would have on the programs cash flow; |
|
whether the investment would further diversify, or unduly concentrate, the programs investments in a particular lessee, class or type of equipment or other asset, location, industry, etc.; and |
|
whether the term of the investment is within the term of the program. |
|
we and the other program have substantially similar investment objectives; |
|
we and the other program invest on substantially the same terms; |
|
there are no duplicate fees; |
|
our General Partners compensation in us and the other program is substantially the same; |
|
we have the right of first refusal to buy any investment the other program wants to sell; and |
|
the joint venture is entered into either for the purpose of effecting appropriate diversification for us and the other program, or for the purpose of relieving our General Partner or its affiliates from a commitment entered into for the purposes of: |
|
facilitating our acquisition of equipment or other assets or investments; or |
|
any other lawful purpose related to our business. |
|
We have no obligation to redeem your units at any time for any reason. Our General Partner may decline your redemption request in its sole discretion. For example, if our General Partner determines that we do not have the necessary cash flow, taking into account future distributions to our other partners and foreseeable investments, reinvestments, and operating expenses, your request may be declined. In addition, our General Partner may conclude that the requested redemption might cause our total unit transfers in the year to exceed 2% of our total capital or profits interests, which is not permitted under our partnership agreement. See Appendix A to this prospectus. All of these determinations will be made in our General Partners sole discretion. |
|
Our General Partner also has determined the redemption price of our units. To the extent the redemption price, or the provisions for determining the redemption price in certain circumstances, includes any subjective decisions, they will fall within the discretion of our General Partner. |
|
share in our income, losses and distributions on the same basis as you and our other partners as described in the Income, Losses and Distributions section of this prospectus beginning on page 62; and |
|
have the same voting rights, except that they are prohibited from voting on the removal of our General Partner as general partner and the appointment of a successor general partner. |
|
issue any units after this offering terminates or issue units in exchange for property; |
|
make loans to our General Partner, our Investment Manager or their affiliates; |
|
receive loans from our General Partner, our Investment Manager or their affiliates unless the loan has a term of 12 months or less from the date on which it was made and any interest or other financing charges or fees we pay do not exceed the lower of the following: |
|
if our General Partner, our Investment Manager or an affiliate borrowed to make the loan, the rate of interest and other amounts paid or payable by our General Partner, our Investment Manager or the affiliate in connection with the borrowing; or |
|
if our General Partner, our Investment Manager or an affiliate did not borrow to make the loan, the rate of interest and other amounts paid or payable in an arms-length borrowing that we could obtain, without reference to our General Partners, our Investment Managers or the affiliates financial abilities or guarantees; |
|
invest in or underwrite the securities of other partnership programs; |
|
operate in a manner that would cause us to be classified as an investment company for purposes of the Investment Company Act of 1940, as amended; |
|
grant our General Partner, our Investment Manager or any of their affiliates exclusive listing rights to sell our investments or other assets; |
|
permit our General Partner, our Investment Manager or any of their affiliates to receive a fee or commission in connection with the reinvestment of our cash from sales or operations, or the resale, re-lease, exchange or refinancing of equipment, except as permitted by our partnership agreement and in the Management Compensation section of this prospectus beginning on page 14; |
|
grant our General Partner, our Investment Manager or any of their affiliates any rebates or give-ups or participate in any reciprocal business arrangements with them that would circumvent the restrictions in our partnership agreement, including the restrictions applicable to transactions with affiliates of our General Partner; |
|
permit our General Partner, directly or indirectly, to pay or award any commissions or other compensation to any person engaged by a potential investor for investment advice as an inducement to the advisor to advise the purchaser of our units; but this does not prohibit the normal sales commissions and other compensation payable to the selling agent as described in the Plan of Distribution section of this prospectus beginning on page 97; |
|
purchase or lease any equipment or other asset from, or sell or lease equipment or other assets to our General Partner, our Investment Manager or their affiliates or any investment program in which they have an interest. However, if the conditions set forth below are met, we expect that we will acquire substantially all of our equipment and other assets from our Investment Manager or its affiliates (other than affiliated equipment leasing and finance programs), provided that they acquire the equipment or other assets on a temporary or interim basis in order to facilitate our acquisition of the equipment or other assets or our financing needs. The conditions referred to above are the following: |
|
we shall not purchase or lease equipment from nor sell or lease equipment to, our General Partner including equipment in which our General Partner has an interest, except that we may lease equipment to our General Partner under a lease arrangement made at the outset and on terms no more favorable to our General Partner than those offered other persons and fully described in this prospectus. Notwithstanding the foregoing, we may purchase new equipment from our General Partner if such person is in the business of manufacturing and selling such equipment to persons not affiliated with us, the transaction occurs at the formation of our offering and the terms thereof are fully described in this prospectus, the equipment is sold at the lower of manufacturers cost |
without mark up or fair market value, and the equipment is subject to a prearranged lease. Such equipment may not be leased to our General Partner. |
|
our Investment Manager or its affiliates hold the equipment or other assets only on an interim basis, generally not longer than six months, for purposes of facilitating their acquisition by us, borrowing money or obtaining financing for us or for other purposes related to our business; |
|
our Investment Manager determines that the acquisition of equipment or other assets is in our best interests; |
|
we acquire the equipment or other assets at a price no greater than the cost to our Investment Manager or its affiliates, as adjusted for intervening operations, plus compensation permitted under our partnership agreement and described in this prospectus; |
|
there is no difference in the interest terms of any financing secured by the equipment or other assets at the time acquired by our Investment Manager or its affiliates, and the time acquired by us, although there may be different interest terms if the applicable financing is provided through a different credit facility or different lender; and |
|
our Investment Manager or its affiliates do not benefit from the transaction apart from compensation permitted under our partnership agreement and described in this prospectus. See We May Enter Into Joint Ventures With Affiliated Programs above and the Investment Objectives and Strategies Management, Origination and Servicing Agreement section of this prospectus beginning on page 60. |
|
specified equipment programs will have first preference for investment opportunities which meet their investment guidelines; |
|
the period of time in which the funds have been seeking investments; |
|
the size of the investment opportunity and the cash available to the funds to make such an investment; |
|
the extent to which the investment will contribute to each fund meeting its investment objectives, including the objective of portfolio diversification; |
|
the duration of the investment and the remaining duration of each fund; and |
|
the anticipated cash flow and performance effect of the investment on each fund. |
|
to account to us and hold as trustee for us any property, profit or benefit derived by our General Partner in the conduct or winding up of our business or affairs or derived from a use by our General Partner of partnership property, including the appropriation of a partnership opportunity; |
|
to refrain from dealing with us in the conduct or winding up of our business or affairs as or on behalf of a party having an interest adverse to us; and |
|
to refrain from competing with us in the conduct of our business or affairs before our dissolution. |
|
they determined in good faith that the course of conduct was in our best interest; |
|
they were acting on behalf of, or performing services for, us; and |
|
their course of conduct did not constitute negligence or misconduct. |
and their affiliates to only those instances where their course of conduct did not constitute negligence or misconduct. In the absence of such a provision, Delaware law would limit liability for those instances where their course of conduct did not constitute gross negligence, reckless conduct, intentional misconduct or a knowing violation of law. This provision in our partnership agreement is therefore beneficial to our limited partners and detrimental to our General Partner, our Investment Manager and their affiliates, because our General Partner, our Investment Manager and their affiliates could have liability under our partnership agreement for certain actions and inactions that they would not otherwise have liability for under Delaware law.
|
there has been a judgment on the merits in favor of our General Partner, our Investment Manager or their affiliates or the claims were dismissed on the merits by the court; |
|
the court has been advised by us of the position of the SEC and applicable state securities law authorities on the issue of indemnification for securities law violations; and |
|
the court approves the indemnification of litigation and/or settlement costs. |
Name |
Age |
Position |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jeremiah J.
Silkowski |
37 |
President and Chief Executive Officer |
||||||||
David Charles
Wright |
54 |
Chief
Financial Officer |
||||||||
Michael C.
Ponticello |
34 |
Senior Vice President and National Sales Manager |
||||||||
Michael
Miroshnikov |
29 |
Vice
President, Investments |
||||||||
Matthew Leszyk
|
33 |
Vice
President |
Name |
Age |
Position |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jeremiah J.
Silkowski |
37 |
President, Chief Executive Officer and Managing Director |
||||||||
David Charles
Wright |
54 |
Chief
Financial Officer |
||||||||
Michael C.
Ponticello |
34 |
Senior Vice President and National Sales Manager |
||||||||
Michael
Miroshnikov |
29 |
Vice
President, Investments |
||||||||
Matthew Leszyk
|
33 |
Vice
President |
investment committee. Mr. Silkowski will maintain ultimate investment discretion on the funding of any transactions and Mr. Silkowskis approval will be required prior to the funding of all such transactions.
As of the Date Hereof |
Minimum Offering $1,200,000 |
Maximum Offering $200,000,000 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Units ($1,000
per unit)(1) |
1 | 1,200 | 200,000 | |||||||||||
Total
Capitalization |
$ | 1,100 | $ | 1,200,100 | $ | 200,000,100 | ||||||||
Less: Public
Offering Expenses(2) |
| 144,000 | 24,000,000 | |||||||||||
Net
Capitalization |
$ | 1,100 | 1,056,100 | 176,000,100 |
(1) |
We were originally capitalized by a contribution of $100 by our General Partner and $1,000 contributed by SQN Capital Management, LLC, our Original Limited Partner. In addition, our General Partner loaned us $1,000 for incidental costs that may arise in connection with our formation. Our Original Limited Partner made its initial cash payment to us of $500, and at September 30, 2012, we recorded a subscription receivable of $500 from our Investment Manager for the remaining unpaid portion of the amount payable for our initial limited partnership interest. As of the date of this prospectus, our Original Limited Partner has paid the balance of $500 for the initial limited partnership interest. Our Original Limited Partner will withdraw its capital contribution upon our achieving the minimum offering of units and admitting investors as limited partners. |
(2) |
Public offering expenses for the offering include: (a) Underwriting Fees of up to 3%, (b) Sales Commissions of up to 7%, and (c) organizational and offering expenses of up to 2%. See Estimated Use of Proceeds. |
|
SQN I during a four-year liquidation period that began on February 12, 2011 and is anticipated to end on February 11, 2015. |
|
SQN II during a four-year liquidation period that began on April 15, 2012 and is anticipated to end on April 14, 2016. |
|
SQN SOF during an anticipated five-year liquidation period beginning on September 15, 2015 and ending on September 14, 2020. |
|
SQN III during an anticipated four-year liquidation period beginning on the first day following the end of the operating period, unless such four year period is extended by SQN IIIs general partner in its sole discretion. |
(All amounts in U.S. Dollars of Original Acquisition Cost)
Fund |
Leased Equipment |
Other Transactions |
Total Investments |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SQN I
|
$ | 7,759,800 | $ | 75,000 | $ | 7,834,800 | ||||||||
SQN II
|
9,328,973 | 1,323,113 | 10,652,086 | |||||||||||
SQN SOF
|
3,084,710 | 2,710,226 | 5,794,936 | |||||||||||
SQN III
|
4,798,981 | 1,410,810 | 6,209,791 | |||||||||||
Total
|
$ | 24,972,464 | $ | 5,519,149 | $ | 30,491,613 |
Fund |
Leased Equipment |
Other Transactions |
Total Investments |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SQN I
|
$ | 5,064,847 | $ | 75,000 | $ | 5,139,847 | ||||||||
SQN II
|
6,950,088 | 1,323,113 | 8,273,201 | |||||||||||
SQN SOF
|
2,938,058 | 2,710,226 | 5,648,284 | |||||||||||
SQN III
|
4,798,981 | 1,410,810 | 6,209,791 | |||||||||||
Total
|
$ | 19,751,974 | $ | 5,519,149 | $ | 25,271,123 |
transactions, participation agreements, and purchases of residual interests. We will generally make investments in the U.S., Canada and the European Union but may invest in other countries or regions of the world. We intend to invest in as much as $400,000,000 of original equipment or other asset cost.
(1) |
Extend the term for an agreed upon rental amount which may be for the same amount or a discounted amount. In some cases, such as in vessels or modular building transactions, the extension rate may be higher than the original rate. |
(2) |
Purchase the equipment or other assets from us at an agreed price. |
(3) |
Return the equipment or other assets to us which includes, among other things, records, manuals, power cables, and all components. There are also certain usage standards that have to be met otherwise the end-user must pay a stipulated loss amount for the condition of the equipment or other assets. In many cases it is not economical for them to return the equipment or other assets. |
|
our Investment Manager determines, in its sole discretion, that making the investment is in our best interests; |
|
the investment is purchased by us at a purchase price that does not exceed the sum of: |
|
the cost to the affiliate of our Investment Manager of acquiring and holding the investment (as determined under GAAP and as adjusted for any income received, capital or investment returned and reasonable and necessary expenses paid or incurred while holding the investment); plus |
|
any compensation to which the Investment Manager and any affiliate of our Investment Manager is entitled to under our partnership agreement; |
|
there is no difference in the interest terms of any indebtedness secured by the investment at the time it is acquired by the affiliate of our Investment Manager and the time the investment is acquired by us, although there may be different interest terms if the applicable financing is provided through a different credit facility or different lender; |
|
neither our Investment Manager nor any affiliate of our Investment Manager receives any other benefit, other than compensation permitted by our partnership agreement, as a result of us purchasing the investment; and |
|
at the time of transfer of the investment to us, the affiliate of our Investment Manager had held the investment on a temporary or interim basis (generally not longer than six months) for the purposes of: |
|
facilitating the acquisition of the investment by us; or |
|
any other lawful purpose related to our business. |
|
that our distributions to you and our other limited partners will be in any specific amount; or |
|
whether or when our distributions to you and our other limited partners will be made. |
|
Full payout leases generally are leases under which the rent over the initial term of the lease will return our invested capital plus an appropriate return without consideration of the residual value, and where the lessee may acquire the equipment or other assets at the end of the lease term. |
|
Operating leases generally are leases under which the aggregate non-cancelable rental payments during the original term of the lease, on a net present value basis, are not sufficient to recover the purchase price of the equipment or other assets leased under the lease. |
Equipment/Asset Category |
Example Equipment/Asset |
|||||
---|---|---|---|---|---|---|
Agricultural
|
Intermediate bulk containers |
|||||
Medical
|
Magnetic resonance imaging machines |
|||||
Manufacturing
|
Machine tools and production line facilities |
|||||
Technological
|
Information technology infrastructure |
|||||
Transportation
|
Tractors, trailers, and railcars |
|||||
Energy
|
Energy efficient lighting and battery technology |
|||||
Environmental
|
Waste
management equipment |
|||||
Infrastructure
|
Hydro-electric projects |
|||||
Other
|
Anaerobic digestion and furniture and fixtures |
|
Banks companies that are either majority owned by, or affiliated with, a bank. |
|
Industrial companies that are majority owned by an industrial or non-financial services parent company. |
|
Independent public or privately owned and operated finance companies that offer leases or loans directly to businesses and are not affiliated with any particular manufacturer or dealer. |
|
Captive companies that are primarily engaged in supporting the financing or leasing of a parent companys products. |
|
Annual world leasing volume is in excess of $616 billion. |
|
2010 marked a return to growth for global leasing, with a 10.7% increase in leasing volume over 2009. |
|
North America comprises approximately 34.6% of annual world leasing volume, Europe comprises of 34.4% and Asia comprises of 24.1%. |
|
With Asia leading the way due primarily to the expansion of leasing in the Peoples Republic of China, percentage growth from 2009 to 2010 are as follows: Asia 31.7%, North America 11.8% and Europe 0.5%. |
|
The top 15 countries, measured by way of annual leasing volume (in parentheses), are as follows: United States of America ($194 billion), Peoples Republic of China ($64 billion), Germany ($52 billion), Japan ($51 billion), France ($31 billion), Italy ($25 billion), Russia ($21 billion), Canada, ($16 billion), Brazil ($15 billion), United Kingdom ($13 billion), Australia ($10 billion), Switzerland ($10 billion) Spain ($10 billion), Poland ($10 billion) and Sweden ($9 billion). |
|
Origination We expect our Investment Manager (directly and through its affiliates) and possibly independent third parties, will originate all of our investments. See Management, Origination and Servicing Agreement, below. Through an internal sales force, our Investment Manager and its affiliates will originate transactions through an established network of end-users that include small private businesses, publicly listed entities, international organizations, colleges and universities, hospitals, governments, municipalities, banks, investor groups, other leasing and finance companies and individuals. An increasing portion of new business will be generated from vendors and manufacturers with which our affiliates have established, are establishing, or will establish proprietary relationships as a funding source. We also will originate transactions from the existing customers of our Investment Manager and its affiliates and by referral. |
|
Underwriting Our Investment Manager along with other affiliates of our General Partner will underwrite and service all of our investments. |
between 36 and 60 months. All transactions must be clearly summarized enabling the investment committee of our Investment Manager to understand:
|
the structure of the transaction; |
|
the source of the transaction; |
|
the documentation; |
|
the equipment or other assets being financed and the security they represent; |
|
how the equipment or other assets are to be acquired; |
|
the amount of residual risk within the transaction and the expected exit route or how the residual will be recovered; |
|
the return that we anticipate from the transaction; |
|
how the counterparty expects to benefit from the transaction; |
|
the risks that are inherent within the transaction; |
|
how the counterparty expects to be able to repay all monies due under the transaction; |
|
any additional security that is being made available to support the transaction; |
|
any third party security interests that may affect the equipment or other assets being financed; and |
|
all other relevant information. |
|
if available, audited financial statements for the last two years; |
|
unaudited financial statements for the latest completed quarter; |
|
budget or forecast for the latest fiscal year; |
|
confirmation that current customers are up to date with their payments or proposals clearly demonstrating how arrears will be brought up to date; |
|
details of current levels of exposure within existing transactions aggregated with the new proposal; and |
|
details of existing credit facilities, the remaining availability and any financial covenants affecting the counterparty, lessee, guarantor, or other parties. |
|
its structure; |
|
its management structure and an overview of the experience of the key members of the management team; |
|
an up to date business plan; |
|
its marketing plan and any intelligence on its market share, market penetration and major competitors; |
|
an analysis of its strengths, weaknesses, opportunities, and threats; |
|
an overview of its customer base; and |
|
details of any recent press or internet coverage. |
Proposal
Format |
A
proposal for all transactions should be presented for credit underwriting in a standard and consistent format containing all relevant information and a
supporting summary advocating the transaction. |
|||||
Searches |
Searches will be undertaken for all companies other than for widely followed listed companies. Similarly, key directors will be checked and
verified. This process should also be applied to equipment suppliers. In the event of any cash payments being made within the structure of the
transaction, full compliance with the anti-money laundering regulations must be undertaken and the identities of any counterparty must be established
and documented. |
|||||
Approval |
All
transactions must be approved by vote of the investment committee of our Investment Manager. Jeremiah J. Silkowski will maintain ultimate investment
discretion and will approve all transactions. |
|||||
Site
Inspection |
All
customers should be visited, at least once, at their premises either prior to the first drawdown or by way of asset inspection before
funding. |
|||||
Reviews |
After
the first anniversary of the funding of a transaction or the production of the final accounts of the company whichever is later, a review of its or any
guarantors creditworthiness will be undertaken. For transactions of three years or less one such review will be undertaken and for transactions
of a longer duration a review will be undertaken on the second anniversary. The review summary shall recommend if any further reviews should be
undertaken. Transactions with payments delinquent to us for more than 30 days will be subjected to a formal review. Reviews notwithstanding, all
customers and credits will be continuously monitored by way of press tracking and industry intelligence. |
|
Automatic billing extension Our lease documentation will require the lessee to provide notice before the lease matures in order to arrange for disposition of the equipment or other asset. If the lessee does not provide this notice, then they will automatically be billed for continued use until proper notice is delivered. |
|
Re-leasing to lessee We anticipate that a significant amount of our equipment and other assets will be re-leased to the current lessee at the end of the initial lease term. |
|
Sold in place to lessee We anticipate that we will sell the majority of our equipment and other assets in place to the original lessee at the end of its lease, re-lease or automatic billing extension period. |
|
Resale market On a limited basis, we may sell equipment and other assets that are not sold in place to the lessee at the end of its lease, re-lease or automatic billing extension period either to the original vendor or to a variety of used equipment dealers or other end-users. |
|
secondary market publications; |
|
interviews with manufacturers and used equipment dealers; |
|
auction sales guides; |
|
historical sales data; |
|
industry organizations; |
|
valuation companies; |
|
ongoing communications with the end-users; and |
|
the prior experience of our Investment Managers management as to propensity to re-lease or be sold in place. |
|
the type and intended use of the equipment or other assets; |
|
the business, operations and financial condition of the lessee; |
|
any regulatory considerations; and |
|
the tax consequences and accounting treatment of the lease transaction. |
|
paying rent without deduction or offset of any kind; |
|
bearing the risk of equipment or other asset loss and maintaining both casualty and liability insurance on the equipment or other asset; |
|
paying sales, use or similar taxes relating to the lease or other use of the equipment or other asset; |
|
paying all miscellaneous charges such as documentation fees, late charges, charges for returned checks and similar fees and costs; |
|
indemnifying us against any liability resulting from any act or omission of the lessee or its agents related to the equipment or other asset; |
|
maintaining the equipment or other asset in good working order and condition during the term of the lease; |
|
notifying us and obtaining our approval for moving the equipment or other asset; and |
|
requiring our prior written consent before assigning or subleasing the equipment or other asset. |
|
international banks and investment banks; |
|
other leasing companies; |
|
regional and national commercial banks; and |
|
captive finance companies of large manufacturers. |
|
the business objectives of the seller in selling the portfolio; |
|
the amount of the equipment and other assets and the number of leases in the portfolio; |
|
how the leases were originated, whether directly with the end-user or through vendors or brokers; |
|
the portfolio characteristics, including geographic and lessee and/or borrower concentrations, equipment and other asset cost range, types of leases and the original and remaining terms of the leases; |
|
the sellers credit decision process; |
|
the sellers lease documentation and any material variations from industry practices; |
|
the sellers servicing policies; and |
|
the portfolios aging, performance and default history, including the default history of other portfolios sold by the seller. |
|
who the seller is and its overall industry reputation; |
|
the performance of other portfolios we may have acquired from the seller; |
|
the effect of the acquisition on our own portfolio; and |
|
credit enhancements available from the seller, such as guarantees or additional security. |
that a material portion of the equipment, other assets and the related leases in a portfolio offered to us will not conform to these criteria. We will consider a portfolio for acquisition only when:
|
at least two-thirds of the equipment leases, by book value, conform to our equipment type and market criteria; or |
|
our Investment Managers investment committee believes that the lessees are creditworthy and that such acquisition is strategically beneficial to meet our investment objectives. |
|
determine whether to approve transactions and portfolio purchases; |
|
determine whether to approve transactions that vary from standard credit criteria and policies; |
|
resolve conflicts, if any, that may arise in the allocation of investments between us and our Investment Manager or among us and other programs managed by our Investment Manager or its affiliates as described in the Conflicts of Interest and Fiduciary Responsibilities Our General Partner, Our Investment Manager and Their Affiliates Will Engage in Activities That Compete With Us section of this prospectus; and |
|
advise our General Partner and our Investment Manager with respect to any other matters submitted to the investment committee of our Investment Manager for its evaluation, as determined in the discretion of our Investment Manager. |
|
temporarily acquire equipment and other assets from third parties on our behalf; |
|
originate leases with third parties on our behalf, including equipment and other assets directly leased to end-users and equipment and other assets already subject to leases; |
|
negotiate and arrange portfolio acquisitions, participatory interests in assets or equipment; |
|
negotiate and arrange vendor programs and residual sharing agreements; and |
|
purchase existing portfolios of equipment leases. |
at such time. During the Operating Period, we will have a right of first refusal, subject to the existing rights of the Prior Funds (which will be in different stages in their respective investment cycles), on all transactions originated by our affiliates that meet our investment objectives. We will acquire the equipment or other assets at a price no greater than the cost to the affiliates of our Investment Manager, as adjusted for intervening operations, plus compensation permitted under our partnership agreement and described in this prospectus.
|
underwriting; |
|
receivables management; |
|
re-leasing or selling the equipment or other assets after the termination of a lease or other contract; and |
|
marketing our services. |
|
the amount distributed must include an amount of net proceeds from sales and refinancing of our equipment and other asset investments, if any, sufficient for you and our other partners to pay your federal, state and local income taxes, if any, resulting from those sales, based on our assumption that you and our other investors are in a 30% tax bracket. |
|
cash from operations; and |
|
cash from sales or refinancings. |
(1) |
it consists of a system that lists customers bid and ask quotes in order to match sellers and buyers; |
(2) |
deals occur either by matching the list of interested buyers to interested sellers or by bidding on listed interests; |
(3) |
sellers cannot enter into a binding agreement to sell their interest until at least 15 days after information regarding their offering is made available to potential buyers; |
(4) |
the closing of the sale does not occur until at least 45 days after information about the offering is made available; |
(5) |
the matching service only displays quotes that express interest in trading but do not represent firm commitments to buy or sell at the quoted price; |
(6) |
the sellers information is removed from the matching service within 120 days after the posting and, if removed for any reason other than a sale, no offer to sell from that seller is entered into the matching service for at least 60 days; and |
(7) |
the percentage of interests in the capital or profits transferred during the tax year (other than through private transfers) does not exceed 10% of the total interests in partnership capital or profits. |
our partnership agreement, our General Partner will refuse to recognize or give effect to any assignment of our units for any purpose (including recognizing any right of the transferee, such as the right of the transferee to receive directly or indirectly our distributions or to acquire an interest in our capital or profits) that it knows or has reason to know occurred on an established securities market or a secondary market (or the substantial equivalent thereof), within the meaning of Section 7704 of the Code and the Treasury Regulations and published notices promulgated thereunder, or to permit, recognize or give effect to any assignment of units that would result in the transfer of more than 2% of our units in any year other than those that our General Partner determines in good faith fall within certain safe harbor provisions under Treasury Regulation Section 1.7704-1. See Summary of Our Partnership Agreement Transfer of Units and Redemption of Units Restrictions on Redemption of Units. This is pursuant to a safe harbor under Treasury Regulation Section 1.7704-1 that provides that a secondary market or its equivalent will not exist if the sum of the interests in partnership capital or profits attributable to those partnership interests that are sold, redeemed, or otherwise disposed of during the partnerships taxable year and do not fall within other safe harbor provisions does not exceed 2% of the total interests in partnership capital or profits. In determining whether we satisfy the 2% safe harbor, redemptions of our units pursuant to Section 13.5 of our partnership agreement will be counted.
during the year using any method permissible under Code Section 706 that our General Partner may select. If any partners hold their units for less than the entire year, they will be allocated income and loss using such method as selected by our General Partner that reflects such part-year ownership as is permissible under Code Section 706. For purposes of allocating income or loss among our partners, we will treat our operations as occurring ratably over each fiscal year in other words, we will assume that income and loss are spread evenly over the fiscal year. Thus, if some limited partners are admitted after others, those limited partners admitted later may receive a smaller portion of each item of our net profits and net losses than the limited partners who were admitted earlier. Nevertheless, those limited partners still will be obligated to make the same capital contributions to us for their interests as the limited partners who were admitted previously. In addition, where a limited partner transfers units during a taxable year, a limited partner may be allocated net profits for a period for which such limited partner will not receive a corresponding cash distribution. Moreover, depreciation or other cost recovery with respect to our assets may create a deferral of tax liability during your ownership of our units. Larger cost recovery deductions in the early years may reduce or eliminate our taxable income in the initial years of our operations. This deferral, however, will be offset in later years, when smaller depreciation and cost recovery deductions will offset less of our income, while an increasing portion of our revenue must be applied to reduce debt principal. In later years, it is possible that taxable income will exceed cash distributions.
income as it accrues, even if not yet received; (iv) our financial assets may be subject to specific tax rules governing the timing of any inclusions of income and loss irrespective of any cash generated by our assets; (v) certain rules, such as the at-risk rules and the tax-exempt leasing rules, may prevent losses attributable to some of our investments in assets from being used to offset income attributable to our other investments in assets, with the result that our taxable income (and your share thereof) may be greater than our overall income (and your share thereof). Moreover, allowable at-risk losses may not offset our income from our lending activities under the passive loss rules; and (vi) we may need to disproportionately allocate our income on a per unit basis to equalize the limited partners capital accounts (as adjusted by certain items) on a per unit basis. Therefore, the cash distributions that we make to you may be greater or less than your share of our taxable income in any given year.
(a) |
the allocation has economic effect and is substantial, or |
(b) |
the partners can show that the allocation accords with each partners respective interest in us, and |
(c) |
in the case of either (a) or (b), the allocation complies with special rules requiring that partners receiving allocations of losses or deductions generated by purchasing assets with borrowed money be charged back income and gain as those funds are repaid. |
|
the allocation must be reflected by an increase or decrease in the relevant partners capital account, as those accounts are maintained in accordance with the Treasury Regulations; |
|
liquidation proceeds must be distributed in accordance with the partners positive capital account balances; and |
|
the partnership agreement must provide that if a partner will have a deficit balance in his or her capital account upon liquidation of the partnership, the partner must be required to restore the deficit amount to the partnership, so that amount may be distributed to other partners with positive capital account balances. However, the Treasury Regulations provide that in the absence of an obligation to restore the deficit, the partnership agreement must contain a qualified income offset provision. A qualified income offset provision mandates that when a partner receives a distribution from the partnership that causes a deficit in the partners capital account or increases a preexisting deficit, that partner must be allocated income and gains as quickly as possible to eliminate any deficit balance in his or her capital account that is greater than any amount that he or she is obligated to restore. |
(1) |
It requires that all allocations of income, gains, losses, deductions and distributions are reflected by an increase or decrease in the relevant partners capital accounts. |
(2) |
All partners who are allocated losses and deductions generated by assets acquired with borrowed money will be charged back income and gains generated by those assets. |
(3) |
Although no partner (other than our General Partners limited commitment) having a deficit balance in his or her capital account after the final liquidating distribution will be required to make a cash contribution to us to eliminate the deficit, our partnership agreement contains a provision for a qualified income offset and requires that, upon liquidation, our assets generally will be distributed to our partners first to the extent of any unreturned capital contributions and thereafter in the same manner as current distributions (which should correspond with such partners positive capital accounts). |
Regulations that takes into account the varying interests of the partners in the partnership during that year. Our partnership agreement provides that our items will, to the extent necessary in order to comply with Code Section 706(d), be allocated on a daily, monthly or other basis as determined by our General Partner using any permissible method under Code Section 706(d) and the Treasury Regulations promulgated thereunder. If, as a result, an amount of profit or loss allocated to a partner is limited compared to what would otherwise have been the case with respect to the general rules regarding the allocation of profits and losses, such excess will be allocated to the other partners in relation to the amounts otherwise allocated to them. As a result, if some limited partners are admitted after others, they may receive a smaller portion of our profits and losses even though they are required to contribute the same amount as those limited partners who were admitted earlier. As stated above, some of this disparity results from a timing issue that will resolve itself over the life of the fund due to our allocation provisions beginning in our first fiscal year. However, a portion of this disparity may result from the receipt of additional cash distributions by those partners who invested earlier.
represented by assets placed in service in other years) will be equal to (i) the capital contributions (as such term is defined in our partnership agreement) of such limited partner (provided that funds for such capital contributions are not from borrowed amounts other than amounts: (A) for which the limited partner is personally liable for repayment, or (B) for which property other than units are pledged as security for such borrowed amounts, but only to the extent of the fair market value of such pledged property and provided further that such capital contributions are invested in assets or otherwise expended in connection with our organization or leasing activities (or are subject to the rights of our creditors for amounts incurred by it with respect to same)), less (ii) the sum determined on a cumulative basis of (A) the total net losses with respect to such assets that have been allowed as deductions to the limited partner under the at risk rules and (B) cash distributions received by the limited partner with respect to the aforementioned assets, plus (iii) the limited partners distributive share, determined on a cumulative basis, of total net profits with respect to our assets. We expect that your at-risk basis will be less than your investment in us due to fees and the amount of your investment allocable to our lending activities.
(1) |
aircraft registered in the U.S. that are operated to and from the U.S.; |
(2) |
some railroad rolling stock used within and without the U.S.; |
(3) |
vessels documented under the laws of the U.S. that are operated in the foreign or domestic commerce of the U.S.; and |
(4) |
containers owned by a U.S. taxpayer that are used in the transportation of property to and from the U.S. |
|
the assets ADR Class Life, which generally is longer than the 3-year, 5-year or 7-year periods permitted for property not leased to tax-exempt entities; or |
|
125% of the term of the lease, including all options to renew as well as some successor leases for the asset. |
(1) |
property that is used predominantly by a tax-exempt entity in an unrelated trade or business, if the entity pays unrelated business income tax on the income from the trade or business; |
(2) |
property leased to a tax-exempt entity under a short-term lease, meaning a lease that has a term of either less than one year, or less than 30% of the propertys ADR Class Life as long as that is less than three years; and |
(3) |
certain high-technology equipment. |
if the face amount of the debt being discharged were greater than the tax basis of the asset, even though we will not receive cash.
discount bonds or short-term obligations that we may acquire at a discount. Thus, it is likely that most of any gain upon the sale of your units will be treated as ordinary income.
current distributions. Provided that such termination does not occur very early during our existence, we expect that the distributions to our limited partners (including our General Partner to the extent it owns units) upon such termination will be proportionate based on the number of units owned by each limited partner as of the liquidation date because of the manner in which profits and losses are allocated among our limited partners during our early fiscal years. Sales and other dispositions of our assets would have the tax consequences described in Sale or Other Disposition of Our Property. Cash distributions made at liquidation that exceed the tax basis of your interest in us generally would be taxable as capital gain, provided your units constitute capital assets in your hands. Cash distributions in amounts less than your basis may result in a loss, generally a capital loss, which would be subject to the general limitations on deductibility of capital losses.
were considered to be a reportable transaction, then our partners would be required to adequately disclose such transactions on their income tax return and we would be required to disclose such transactions on our information return. We do not expect that, under current regulations, an investment in our units or our investments in assets will constitute reportable transactions, because it is expected that the requisite magnitude of losses, if any, will not be incurred, and the disclosure and list maintenance requirements for such transactions are therefore not applicable. It is possible, however, that we may lease an asset or group of assets that experience losses that meet the threshold or we may incur losses exceeding the threshold in a lending transaction subject to these rules. Nevertheless, because we have not yet made any investments, we do not know whether any of our transactions would be reportable transactions.
dividends, rents, compensation and other fixed or determinable annual or periodical gains, profits and income. If the payee is a foreign financial institution, it must enter into an agreement with the U.S. Treasury requiring, among other things, that it undertake to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements. Prospective investors are advised to consult their tax advisors regarding this legislation and the potential implications of this legislation on their particular circumstances.
consider the fact that there will not be any market for our units when determining their ability to satisfy such mandatory distribution requirements.
|
perform its duties with the skill, prudence and diligence of a prudent person acting in a like capacity and familiar with such matters; |
|
diversify the plans investments so as to minimize the risk of large losses unless it is not prudent to do so; and |
|
act in accordance with the plans governing documents. |
|
fiduciaries or other service providers of the ERISA Plan or IRA; |
|
an employer whose employees are covered by the ERISA Plan; |
|
certain employers, officers, directors, certain shareholders and other owners of the company sponsoring the ERISA Plan; and |
|
persons and legal entities sharing certain family or ownership relationships with other disqualified persons. |
|
sale, exchange or leasing of property between an ERISA Plan or IRA and a disqualified person; |
|
direct or indirect transfers of an ERISA Plans or IRAs assets to, or use by or for the benefit of, a disqualified person; |
|
the use of an ERISA Plans or IRAs assets by a fiduciary for his or her personal benefit; and |
|
a fiduciary receiving cash or other consideration for his or her own benefit from a third party in connection with a transaction involving the assets of an ERISA Plan or IRA. |
|
our units are publicly offered, which means that among other things our units must be freely transferable and part of a class of units that is widely held as those terms are defined by ERISA; |
|
less than 25% of the value of any class of our units are owned by ERISA Plans, IRAs, and certain other employee benefit investors; or |
|
we are an operating company. |
|
the purchase is prudent in light of the illiquid nature of our units and potential minimum required distributions from the ERISA plan or IRA; |
|
the investment will provide sufficient cash distributions in light of required benefit payments and other needs for liquidity; |
|
the evaluation of the investment has properly taken into account the potential costs of determining and paying any amounts of federal income tax that may be owed on UBTI derived from us; and |
|
the fair market value of our units will be sufficiently ascertainable, and with sufficient frequency, to enable the ERISA Plan or IRA to value its assets in accordance with the rules and policies applicable to the ERISA Plan or IRA. |
|
reduce our yield on leveraged investments; and |
|
reduce the amount of financing we may be able to obtain because of a reduction in the value of our fixed-rate leases and secured financings. |
|
obligations that are specifically nonrecourse to us; or |
|
the repayment of your capital contribution. |
|
60 days advance written notice to you and our other limited partners; |
|
obtaining an opinion of counsel that the withdrawal will not cause our termination as a limited partnership or materially and adversely affect our federal tax status as a partnership; and |
|
the selection of a substitute general partner by limited partners owning a majority of our units. |
|
in a voluntary withdrawal, it provides for a non-interest bearing unsecured promissory note with principal payable only from distributions from us that our General Partner otherwise would have received; or |
|
in an involuntary removal, it provides for a rate of interest equal to the lesser of the rate we would obtain from an unrelated bank lender for an unsecured 60-month loan or the Prime Rate of interest published in the Money Rates section of the Wall Street Journal, plus 4%, and provides for payment of principal and interest in 60 equal monthly installments. |
|
you and the assignee sign a document that our General Partner reasonably determines satisfies the following: |
|
states your intention that the assignee is to become a substitute limited partner, if that is the case; |
|
shows that there is a legal transfer and binds the assignee to all of the terms and provisions of our partnership agreement; |
|
includes a representation by both you and the assignee that the assignment or transfer complies with all applicable laws, including the applicable minimum investment and investor suitability requirements under state securities laws; and |
|
the assignee pays us a fee that will not exceed $150 for our expenses. |
|
to a minor or incompetent person unless a guardian, custodian or conservator has been appointed for the person; |
|
to any person if, in our counsels opinion, the assignment would terminate our taxable year or adversely affect our status as a limited partnership for federal income tax purposes; |
|
to any person if, in our counsels opinion, the assignment would affect our existence or qualification as a limited partnership under Delaware law or the laws of any other jurisdiction in which we conduct business; |
|
to any person not permitted, in our counsels opinion, to be an assignee under applicable law, including federal and state securities laws; |
|
if the assignment is for less than 5 units unless the assignment is for all of your units; |
|
if the assignment would result in your keeping a portion of your units that is less than the greater of: |
|
5 units; or |
|
the minimum number of units required to be purchased under the minimum investment standards applicable under the state securities laws to your initial purchase of units; or |
|
if, in our counsels opinion, the effect of the assignment would be to cause the equity participation in us by certain benefit plan and IRA investors to equal or exceed 25% of the value of any class of our total outstanding units at any time. |
maintain. You also will have the right to have a copy of a list of our limited partners (the Participant List described below) mailed to you for a reasonable copying charge. However, you must first certify that the list will not be:
|
reproduced and sold to another party; |
|
used for any commercial purpose unrelated to your interest in partnership matters; or |
|
used for an unlawful purpose. |
|
an amendment of our partnership agreement, subject to certain limitations discussed in Amendment by Limited Partners Without Our General Partners Concurrence, below; |
|
our dissolution; |
|
the removal of our General Partner and the election of one or more substitute general partners; |
|
the sale of all or substantially all of our assets, except in connection with securitization financings or sales in the ordinary course of liquidating our investments after the Operating Period; and |
|
the cancellation of any contract for services to us with our General Partner or its affiliates, subject to certain exceptions, such as the Management, Origination and Servicing Agreement, without penalty on 60 days notice. |
|
change how our partnership agreement can be amended, will require the consent of all of our limited partners; |
|
alter the rights, powers, duties or obligations of our General Partner, will require our General Partners consent; or |
|
adversely affect any partners share of our cash distributions will require the consent of each partner affected by the change. |
|
adding to our General Partners duties or obligations, or surrendering any of its rights or powers; |
|
curing any ambiguity in, or correcting or supplementing any provision of, our partnership agreement; |
|
preserving our status as a limited partnership for federal income tax purposes; |
|
deleting or adding any provision that the SEC or any other regulatory body or official requires to be deleted or added; or |
|
changing our name or the location of our principal office. |
|
withdrawal or removal of our General Partner if a substitute general partner has not been admitted; |
|
our dissolution is approved on a vote of limited partners owning a majority of our units; |
|
the sale of all or substantially all of our assets other than in connection with a financing transaction, such as a securitization; |
|
the expiration of our term; or |
|
any other event which would cause us to dissolve under Delaware law. |
|
All of our assets must be appraised by a competent, independent expert, which our partnership agreement defines as a person with no material current or prior business or personal relationship with our General Partner or its affiliates, who is engaged to a substantial extent in the business of rendering appraisals and who is qualified to perform the work. If the appraisal will be included in a prospectus used to offer the securities of a roll-up entity, the appraisal must be filed with the SEC and the states as an exhibit to the registration statement for the offering. Our assets must be appraised on a consistent basis, and the appraisal must be based on an evaluation of all relevant information and indicate the value of our assets as of a date immediately prior to the announcement of the proposed roll-up transaction. The appraisal must assume an orderly liquidation of our assets over a 12 month period. The terms of the engagement of the independent expert must clearly state that the engagement is for the benefit of us and our limited partners. A summary of the independent appraisal, indicating all material assumptions underlying the appraisal, must be included in a report to our limited partners in connection with the proposed roll-up transaction. Accordingly, an issuer using the appraisal shall be subject to liability for violation of Section 11 of the Securities Act of 1933, as amended, and comparable provisions under state law for any material misrepresentations or material omissions in the appraisal. |
|
The sponsor of the proposed roll-up transaction must offer to our limited partners who vote no on the proposal the option of either: |
|
accepting the roll-up securities; or |
|
one of the following: |
|
remaining as limited partners in us on the same terms and conditions as existed previously; or |
|
receiving cash equal to the limited partners pro rata share of the appraised value of our net assets. |
|
We may not participate in any proposed roll-up transaction that would result in our limited partners having voting rights that are less than those provided for under our partnership agreement. If the roll-up entity is a limited partnership, the voting rights of our limited partners must correspond to the voting rights provided for in our partnership agreement to the greatest extent possible. |
|
We may not participate in any proposed roll-up transaction that includes provisions that would operate to materially impede or frustrate the accumulation of units by any purchaser of the securities of the roll-up entity (except to the minimum extent necessary to preserve the tax status of the roll-up entity). |
We may not participate in any proposed roll-up transaction that would limit the ability of a limited partner to exercise the voting rights of that limited partners units of the roll-up entity on the basis of the number of our units held by that limited partner. |
|
We may not participate in any proposed roll-up transaction in which our limited partners rights of access to the records of the roll-up entity would be less than those provided for under our partnership agreement. |
|
We may not participate in any proposed roll-up transaction in which any of the costs of the transaction would be borne by us if the roll-up transaction is not approved by our limited partners. |
|
during the Offering Period and Operating Period, the redemption price will equal not less than $850 per unit, less distributions previously paid to you; or |
|
during the Liquidation Period, the redemption price will equal the equity for one unit as set forth on our balance sheet in our most recent periodic report filed with the SEC before your redemption request, less distributions paid to you since the date of the balance sheet. |
|
first, to hardship redemptions (e.g., requests arising from death, major medical expense, family emergency, disability, a material loss of family income, etc.); |
|
second, to provide liquidity for ERISA Plans or IRAs to meet required distributions; and |
|
third, to all other redemption requests. |
|
recapture of your cost recovery deductions on our equipment and other assets leased to others under operating leases; |
|
our substantially appreciated inventory items; and |
|
our unrealized receivables. |
|
Our audited financial statements for the fiscal year prepared in accordance with GAAP, including a balance sheet and related statements of operations, cash flows and changes in partners equity, accompanied by an auditors report containing an opinion of our independent accountants. |
|
A breakdown, by source, of distributions made during the year to you and to our General Partner. |
|
A status report with respect to each item of equipment and other assets that individually represent at least 10% of the aggregate purchase price of our investments at the end of the year, if any, including information relevant to the condition and use of the equipment and other assets. |
|
A detailed statement of: |
|
the services rendered and compensation paid or reimbursed to our General Partner and its affiliates; and |
|
a summary of the terms and conditions of any contract with our General Partner or its affiliates that was not filed as an exhibit to the registration statement of which this prospectus forms a part. |
|
Our General Partners allocation of costs and expenses reimbursed by us to our General Partner and its affiliates will be included within the scope of our annual audit by our independent public accountants. |
|
Information regarding investments made by us during the fiscal year, until all of the capital contributions to us by you and our other limited partners have been invested, reinvested or committed |
to investment and reserves, used to pay permitted fees or returned to you and our other limited partners in accordance with our partnership agreement. |
|
A customer account statement. |
|
Our unaudited financial statements for the quarter, including a balance sheet and related statements of operations, cash flows and changes in partners equity; or if our units are registered under Section 12(g) of the Securities Exchange Act of 1934, as amended, which we anticipate, a copy of our Quarterly Report on Form 10-Q filed by us with the SEC. |
|
A detailed statement of: |
|
the services rendered and compensation paid, and any expenses reimbursed, to our General Partner or its affiliates, and |
|
a summary of the terms and conditions of any contract with our General Partner or its affiliates that was not filed as an exhibit to the registration statement of which this prospectus forms a part. |
|
Information regarding investments made by us during the quarter, until all of the capital contributions to us by you and our other limited partners have been invested, reinvested or committed to investment and reserves, used to pay permitted fees or returned to you and our other limited partners in accordance with our partnership agreement. |
|
reports and statements required by our partnership agreement to be distributed to you and our other limited partners; and |
|
reports required to be filed with the administrators under the applicable state securities laws, regulations or policies, which may include copies of our SEC filings under the Securities Exchange Act of 1934, as amended. |
satisfaction of the escrow condition, any interest that accrues on the funds held in the escrow account or the subscription account will be distributed in cash to the subscribers whose funds were held in the escrow account and allocated among them based on the amounts of their respective subscriptions and the number of days that those amounts were on deposit in the escrow account.
|
a brochure entitled SQN AIF IV, L.P.; and |
|
possibly other supplementary materials. |
|
they must be preceded or accompanied by this prospectus; |
|
they do not include all of the information set forth in this prospectus; |
|
they will not contain any material information that is not also set forth in this prospectus; and |
|
they should not be considered a part of, or incorporated into, this prospectus or the registration statement of which this prospectus is a part. |
|
that the purpose of the meeting is to offer our units for sale; |
|
the minimum purchase price of our units; and |
|
the name of the selling agent selling our units. |
registered public accounting firm, upon the authority of said firm as experts in accounting and auditing in giving such report.
(i) |
any other Person directly or indirectly controlling, controlled by or under common control with such Person; |
(ii) |
any other Person owning or controlling 10% or more of the outstanding voting securities of such Person; |
(iii) |
any officer, director or partner of such Person; and |
(iv) |
if such Person is an officer, director or partner, any other Person for which such Person acts in such capacity. |
(i) |
the date on which the Maximum Offering has been sold; |
(ii) |
two years after the Effective Date (subject, as to a particular jurisdiction, to the renewal, requalification or consent of the Administrator requiring the renewal, requalification or consent of the Offering with respect to the extension of the Offering Period beyond one year following the Effective Date in such Administrators jurisdiction); or |
(iii) |
any earlier date after the Effective Date as may be determined by our General Partner in its sole discretion. |
(i) |
all costs and expenses incurred in connection with, and in preparing us for, qualification under federal and state securities laws and the securities laws of any other jurisdiction in which units may be offered or sold and subsequently offering and distributing the units to the public (except Underwriting Fees and Sales Commissions) including, without limitation: |
(A) |
printing costs; |
(B) |
registration and filing fees; |
(C) |
attorneys, accountants and other professional fees; and |
(ii) |
the direct costs of salaries to, and expenses (including costs of travel) of, officers and directors of our General Partner or any Affiliate of our General Partner while engaged in organizing us and registering, offering and selling the units, but shall not include amounts that are included within the 10% underwriting compensation limit as defined in FINRA Conduct Rule 2310. |
SQN AIF IV
GP, LLC |
|||||||
F-2 | |||||||
F-3 | |||||||
F-4 | |||||||
SQN AIF IV,
L.P. |
|||||||
F-6 | |||||||
F-7 | |||||||
F-8 |
SQN AIF IV GP, LLC
October 11, 2012
Assets |
|||||||
Cash and cash
equivalents |
$ | 1,000,000 | |||||
Due from SQN
AIF IV, L.P. |
1,000 | ||||||
Investment in
SQN AIF IV, L.P. |
100 | ||||||
Total
Assets |
$ | 1,001,100 | |||||
Liabilities and Members Equity |
|||||||
Members
equity |
$ | 1,001,100 | |||||
Total
Liabilities and Members Equity |
$ | 1,001,100 |
Notes to Financial Statement
September 30, 2012
Nature of Operations and Organization |
2. |
Summary of Significant Accounting Policies |
Notes to Financial Statement (Continued)
September 30, 2012
3. |
Related Party Transactions |
SQN AIF IV, L.P.
October 11, 2012
Assets |
|||||||
Cash and cash
equivalents |
$ | 1,600 | |||||
Total Assets
|
$ | 1,600 | |||||
Liabilities and Partners Equity |
|||||||
Due to SQN
AIF IV GP, LLC |
$ | 1,000 | |||||
Total
Liabilities |
$ | 1,000 | |||||
Partners Equity |
|||||||
Limited
Partner |
$ | 1,000 | |||||
General
Partner |
100 | ||||||
Less:
Subscription receivable |
(500 | ) | |||||
Total
Partners Equity |
600 | ||||||
Total
Liabilities and Partners Equity |
$ | 1,600 |
Notes to Financial Statement
September 30, 2012
1. |
Nature of Operations and Organization |
2. |
Summary of Significant Accounting Policies |
Notes to Financial Statement (Continued)
September 30, 2012
3. |
Capital Contributions |
4. |
Related Party Transactions |
LIMITED PARTNERSHIP
OF
SQN AIF IV, L.P.
Page |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
ARTICLE I DEFINITIONS |
A-1 | |||||||||
1.1 |
Defined Terms |
A-1 | ||||||||
ARTICLE II FORMATION OF PARTNERSHIP |
A-12 | |||||||||
2.1 |
Formation of Partnership |
A-12 | ||||||||
ARTICLE III NAME |
A-12 | |||||||||
3.1 |
Name
|
A-12 | ||||||||
ARTICLE IV PLACES OF BUSINESS |
A-12 | |||||||||
4.1 |
Principal Place of Business |
A-12 | ||||||||
4.2 |
Other
Places of Business |
A-12 | ||||||||
4.3 |
Registered Office and Registered Agent |
A-12 | ||||||||
ARTICLE V NAMES AND ADDRESSES OF PARTNERS |
A-13 | |||||||||
5.1 |
Names
and Addresses of Partners |
A-13 | ||||||||
ARTICLE VI PURPOSES AND OBJECTIVES |
A-13 | |||||||||
6.1 |
Purposes |
A-13 | ||||||||
6.2 |
Investment Objectives |
A-13 | ||||||||
ARTICLE VII TERM |
A-13 | |||||||||
7.1 |
Term
|
A-13 | ||||||||
ARTICLE VIII PARTNERS AND CAPITAL |
A-13 | |||||||||
8.1 |
General Partner |
A-13 | ||||||||
8.2 |
Original Limited Partner |
A-13 | ||||||||
8.3 |
Limited Partners and Maximum Offering |
A-13 | ||||||||
8.4 |
Subscription Documents and Suitability |
A-13 | ||||||||
8.5 |
Payment of Subscription Price of Units |
A-14 | ||||||||
8.6 |
Minimum Subscription Amount |
A-14 | ||||||||
8.7 |
Subscriptions for Units by General Partner and its Affiliates |
A-14 | ||||||||
8.8 |
Partnership Closings |
A-14 | ||||||||
8.9 |
Acceptance of Units |
A-14 | ||||||||
8.10 |
Admission to Partnership as Limited Partners |
A-14 | ||||||||
8.11 |
Escrow Account and Subscription Account |
A-14 | ||||||||
8.12 |
Separate Escrow Account for Residents of Pennsylvania |
A-15 | ||||||||
8.13 |
Partnership Capital |
A-15 | ||||||||
8.14 |
Capital Accounts |
A-16 | ||||||||
8.15 |
Limitations on Additional Capital Contributions |
A-17 | ||||||||
8.16 |
Loans
by Partners |
A-17 | ||||||||
ARTICLE IX POWERS, RIGHTS AND DUTIES OF GENERAL PARTNER |
A-17 | |||||||||
9.1 |
Extent of Powers and Duties |
A-17 | ||||||||
9.2 |
Limitations on the Exercise of Powers of General Partner |
A-21 | ||||||||
9.3 |
Limitation on Liability of General Partner and its Affiliates; Indemnification |
A-24 | ||||||||
9.4 |
Compensation of General Partner and its Affiliates |
A-25 | ||||||||
9.5 |
Other
Interests of the General Partner and its Affiliates |
A-27 | ||||||||
9.6 |
Minimum Requirement for Investments/Maximum Front-End Fees |
A-28 |
(continued)
Page | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
ARTICLE X OWNERS AND LIABILITIES OF LIMITED PARTNERS |
A-29 | |||||||||
10.1 |
Absence of Control Over Partnership Business |
A-29 | ||||||||
10.2 |
Limited Liability |
A-29 | ||||||||
ARTICLE XI DISTRIBUTIONS AND ALLOCATIONS |
A-29 | |||||||||
11.1 |
Distribution of Distributable Cash |
A-29 | ||||||||
11.2 |
Allocations of Income and Loss |
A-29 | ||||||||
11.3 |
Distributions and Allocations Among the Limited Partners |
A-32 | ||||||||
11.4 |
Tax
Allocations: Code Section 704(c); Revaluations |
A-33 | ||||||||
11.5 |
Return of Uninvested Capital Contribution |
A-33 | ||||||||
11.6 |
No
Distributions in Kind |
A-33 | ||||||||
11.7 |
Partnership Entitled to Withhold Taxes |
A-33 | ||||||||
ARTICLE XII WITHDRAWAL OF GENERAL PARTNER |
A-34 | |||||||||
12.1 |
Voluntary Withdrawal |
A-34 | ||||||||
12.2 |
Involuntary Withdrawal |
A-34 | ||||||||
12.3 |
Consequences of Withdrawal |
A-34 | ||||||||
12.4 |
Liability of Withdrawn General Partner |
A-35 | ||||||||
12.5 |
Notice of Withdrawal; Admission of Substitute General Partner; Dissolution if No Substitute General Partner Approved |
A-35 | ||||||||
ARTICLE XIII TRANSFER OF UNITS |
A-35 | |||||||||
13.1 |
Withdrawal of a Limited Partner |
A-35 | ||||||||
13.2 |
Assignment |
A-35 | ||||||||
13.3 |
Substitution |
A-37 | ||||||||
13.4 |
Status of an Assigning Limited Partner |
A-37 | ||||||||
13.5 |
Limited Right of Presentment for Redemption of Units |
A-37 | ||||||||
ARTICLE XIV DISSOLUTION AND WINDING-UP |
A-39 | |||||||||
14.1 |
Events Causing Dissolution |
A-39 | ||||||||
14.2 |
Winding Up of the Partnership; Capital Contribution by the General Partner On Dissolution |
A-39 | ||||||||
14.3 |
Application of Liquidation Proceeds On Dissolution |
A-40 | ||||||||
14.4 |
No
Recourse Against Other Partners |
A-41 | ||||||||
ARTICLE XV FISCAL MATTERS |
A-41 | |||||||||
15.1 |
Title
to Property and Bank Accounts |
A-41 | ||||||||
15.2 |
Maintenance of and Access to Basic Partnership Documents |
A-41 | ||||||||
15.3 |
Financial Books and Accounting |
A-42 | ||||||||
15.4 |
Fiscal Year |
A-42 | ||||||||
15.5 |
Reports |
A-43 | ||||||||
15.6 |
Tax
Returns and Tax Information |
A-44 | ||||||||
15.7 |
Accounting Decisions |
A-45 | ||||||||
15.8 |
Federal Tax Elections |
A-45 | ||||||||
15.9 |
Tax
Matters Partner |
A-46 |
(continued)
Page | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
ARTICLE XVI MEETINGS AND VOTING RIGHTS OF THE LIMITED PARTNERS |
A-47 | |||||||||
16.1 |
Meetings of the Limited Partners |
A-47 | ||||||||
16.2 |
Voting Rights of the Limited Partners |
A-48 | ||||||||
16.3 |
Limitations on Action by the Limited Partners |
A-48 | ||||||||
ARTICLE XVII AMENDMENTS |
A-49 | |||||||||
17.1 |
Amendments by the General Partner |
A-49 | ||||||||
ARTICLE XVIII POWER OF ATTORNEY |
A-49 | |||||||||
18.1 |
Appointment of Attorney-in-Fact |
A-49 | ||||||||
18.2 |
Amendments to Agreement and Certificate of Limited Partnership |
A-50 | ||||||||
18.3 |
Power
Coupled With an Interest |
A-50 | ||||||||
ARTICLE XIX GENERAL PROVISIONS |
A-50 | |||||||||
19.1 |
Notices, Approvals and Consents |
A-50 | ||||||||
19.2 |
Further Assurances |
A-51 | ||||||||
19.3 |
Captions |
A-51 | ||||||||
19.4 |
Binding Effect |
A-51 | ||||||||
19.5 |
Severability |
A-51 | ||||||||
19.6 |
Integration |
A-51 | ||||||||
19.7 |
Applicable Law |
A-51 | ||||||||
19.8 |
Counterparts |
A-51 | ||||||||
19.9 |
Creditors |
A-51 | ||||||||
19.10 |
Successors and Assigns |
A-51 | ||||||||
19.11 |
Waiver of Action for Partition |
A-52 |
OF
SQN AIF IV, L.P.
(i)
|
legal fees and expenses; |
(ii)
|
travel and communication expenses; |
(iii)
|
costs of credit reports, appraisals and reference materials used to evaluate transactions; |
(iv)
|
non-refundable option payments on Investments not acquired; |
(v)
|
accounting fees and expenses; |
(vi)
|
insurance costs; |
(vii)
|
initial direct costs, as that term is defined under United States generally accepted accounting principles (GAAP), which includes any origination fees paid by the Investment Manager or its Affiliates to any Person, including its or its Affiliates employees, with respect to acquiring and holding Investments on a temporary basis before they are purchased from the Investment Manager or its Affiliates by the Partnership; and |
(viii)
|
miscellaneous other expenses, however designated. |
(i)
|
reduced for any items described in Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6); |
(ii)
|
increased for any amount which the Partner is obligated to restore, because of a promissory note to the Partnership or otherwise, or is deemed obligated to |
restore pursuant to the penultimate sentence in each of Regulations Sections 1.704-2(g) (1) (ii) and 1.704-2(i) (5) (relating to Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, respectively). |
(i)
|
all distributions previously made to the Limited Partner by the Partnership which are deemed by the General Partner to reduce the Limited Partners Capital Contribution under Section 11.3(d)(ii); and |
(ii)
|
all payments previously made to the Limited Partner in Redemption of a portion or all of the Limited Partners Units under Section 13.5. |
(i)
|
any other Person directly or indirectly controlling, controlled by or under common control with such Person; |
(ii)
|
any other Person owning or controlling 10% or more of the outstanding voting securities of such Person; |
(iii)
|
any officer, director or partner of such Person; and |
(iv)
|
if such Person is an officer, director or partner, any other Person for which such Person acts in such capacity. |
(i)
|
the General Partner and its Affiliates; |
(ii)
|
the Selling Agent and any registered representative or principal of the Selling Agent; |
(iii)
|
registered investment advisors and their clients; and |
(iv)
|
investors who buy Units through the officers and directors of the General Partner. |
(i)
|
as to the General Partner, its initial $100 contribution to the capital of the Partnership plus any additional amounts as may be contributed to the capital of the Partnership by the General Partner; and |
(ii)
|
as to any Limited Partner, including Affiliated Limited Partners, the gross amount of investment in the Partnership actually paid by the Limited Partner, i.e. the Unit Price, without deduction for Front-End Fees (whether payable by the Partnership or not); |
(i)
|
consent given by vote at a meeting called and held in accordance with the provisions of Section 16.1; |
(ii)
|
the written consent without a meeting of any Person to do the act or thing for which the consent is solicited; or |
(iii)
|
the act of granting the consent. |
(i)
|
its chairmen, directors, presidents, or other executive or senior officers; |
(ii)
|
any holder of a 5% or greater equity interest in the General Partner or its Affiliate; or |
(iii)
|
any Person having the power to direct or cause the direction of the General Partner or its Affiliate, whether through the ownership of voting securities, by contract or otherwise. |
(i)
|
any extension of credit or loan of money to the Partnership or its subsidiaries that is secured by a security interest in the Partnerships Investments or other tangible or intangible personal property of the Partnership or any Lease of any such property; |
(ii)
|
any notes issued in connection with a securitization of Investments, or receivables therefrom; or |
(iii)
|
any transaction in which the Partnerships Investments are sold to a Person for purposes of securitization and with customary retained rights or interests. |
(i)
|
the initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset at the time of such contribution; |
(ii)
|
the Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values at the time specified in Treas. Reg. Section 1.704-1(b)(2)(iv)(f)(5) if the Partnership so elects; |
(iii)
|
the Gross Asset Value of any Partnership asset distributed to any Partner shall be the gross fair market value of such asset on the date of distribution; |
(iv)
|
to the extent not otherwise reflected in the Partners Capital Accounts, the Gross Asset Values of Partnership assets shall be increased (or decreased) to appropriately reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b); and |
(v)
|
if on the date of contribution of an asset or a revaluation of an asset in accordance with clauses (ii) through (iv), above, the adjusted tax basis of such asset differs from its fair market value, the Gross Asset Value of such asset shall thereafter be adjusted by reference to the depreciation method described in Treas. Reg. Section 1.704-1(b) (2) (iv) (g) (3). |
(i)
|
any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Income or Loss shall be applied to increase such taxable income or reduce such loss; |
(ii)
|
any expenditure of the Partnership described in Code Section 705(a)(2)(B), or treated as such pursuant to Treas. Reg. Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Income or Loss, shall be applied to reduce such taxable income or increase such loss; |
(iii)
|
gain or loss resulting from a taxable disposition of any asset of the Partnership shall be computed by reference to the Gross Asset Value of such asset and the special depreciation calculations described in Treas. Reg. Section 1.704-1(b)(2)(iv)(g), notwithstanding that the adjusted tax basis of such asset may differ from its Gross Asset Value; |
(iv)
|
in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss for such Fiscal Year, there shall be taken into account depreciation, amortization or other cost recovery deductions determined pursuant to the method described in Treas. Reg. Section 1.704-1(b)(2)(iv)(g)(3); |
(v)
|
in the event the Gross Asset Value of any Partnership asset is adjusted pursuant to clause (ii) of Section 1.1(44), the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Income or Loss; |
(vi)
|
to the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) is required, pursuant to Treas. Reg. Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partners interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Income or Loss; and |
(vii)
|
any items which are specially allocated pursuant to Section 11.2(b), (c), (d), (e), (f), (g) or (h) shall not be taken into account in computing Income or Loss. |
(i)
|
approve significant transactions and transactions which differ from the standards and procedures the Investment Committee has established; |
(ii)
|
pursuant to Section 9.5, resolve conflicts in allocating Investments among Affiliated Programs; and |
(iii)
|
consider any other matter submitted to the Investment Committee for its review by the General Partner. |
(i)
|
the future amounts payable under any Lease and in the related Equipment or Other Physical Assets; or |
(ii)
|
payments due under any Financing Transaction and in any property securing the Financing Transaction. |
(i)
|
any Person who owns at least a portion of a Unit and who has been admitted to the Partnership as a Limited Partner, including Affiliated Limited Partners; and |
(ii)
|
any Person who becomes a Substitute Limited Partner in accordance with this Agreement; |
in any year will be reduced to the extent that it would exceed the maximum amount of fees that are permissible under the NASAA Guidelines.
(i)
|
personally delivered to the Person; |
(ii)
|
sent by registered, certified or regular mail, postage prepaid or by a national recognized courier to such Person at the last known address of the Person; or |
(iii)
|
sent by facsimile, with receipt confirmed by telephone during normal business hours. |
(i)
|
the date on which the Maximum Offering has been sold; |
(ii)
|
two years after the Effective Date (subject, as to a particular jurisdiction, to the renewal, requalification or consent of the Administrator requiring the renewal, requalification or consent of the Offering with respect to the extension of the |
Offering Period beyond one year following the Effective Date in such Administrators jurisdiction); or |
(iii)
|
any earlier date after the Effective Date as may be determined by the General Partner in its sole discretion. |
(i)
|
all costs and expenses incurred in connection with, and in preparing the Partnership for, qualification under federal and state securities laws and the securities laws of any other jurisdiction in which Units may be offered or sold and subsequently offering and distributing the Units to the public (except Underwriting Fees and Sales Commissions) including, without limitation: |
(A)
|
printing costs; |
(B)
|
registration and filing fees; |
(C)
|
attorneys, accountants and other professional fees; and |
(ii)
|
the direct costs of salaries to, and expenses (including costs of travel) of, officers and directors of the General Partner or any Affiliate of the General Partner while engaged in organizing the Partnership and registering, offering and selling the Units, but shall not include amounts that are included within the 10% underwriting compensation limit as defined in FINRA Conduct Rule 2810. |
1.704-2(i) (3), and such additional amount as shall be treated as Partner Nonrecourse Debt Minimum Gain pursuant to Treas. Reg. Section 1.704-2(j) (1) (iii).
(i)
|
Acquisition Fees; |
(ii)
|
Acquisition Expenses; and |
(iii)
|
all liens and encumbrances on the Investment, but excluding points and prepaid interest. |
(i)
|
a transaction involving securities of the Partnership if they have been listed on a national securities exchange for at least 12 months; or |
(ii)
|
a transaction involving only the conversion of the Partnership to corporate, trust or association form if, as a consequence of the transaction, there will be no significant adverse change in: |
(A)
|
Limited Partners voting rights; |
(B)
|
the term of existence of the Partnership; |
(C)
|
the compensation of the General Partner or its Affiliates from the Partnership; |
(D)
|
the Partnerships investment objectives; or |
(E)
|
the income taxation of the Partnership or the Limited Partners. |
notify the Limited Partners of the change in writing no later than 60 days following the effective date of the change.
(i)
|
acquire, invest in, purchase, own, hold, lease, re-lease, finance, refinance, loan, borrow, manage, maintain, operate, improve, upgrade, modify, exchange, assign, encumber, create or receive security interests in, pledge, sell, transfer or otherwise dispose of, and in all respects otherwise deal in or with, Investments of all kinds; and |
(ii)
|
engage in any and all businesses and to do any and all things permitted to a limited partnership under the Delaware Act. |
(i)
|
who represent that they have either: |
(A)
|
an annual gross income of at least $70,000 and a Net Worth of at least $70,000; or |
(B)
|
a Net Worth of at least $250,000; or |
(ii)
|
who satisfy the suitability standards applicable in the state or other jurisdiction of their residence or domicile as set forth in the Prospectus if those standards are more stringent than the standards described in clause (i) above. |
as provided in Section 8.12, all subscription funds shall be held by the Partnership in the Subscription Account until the General Partner either accepts or rejects the subscription as described below.
(i)
|
the return of the Limited Partners Capital Contribution or Capital Account; |
(ii)
|
the Limited Partners share of Income or Loss or items thereof or any amounts required to be specially allocated; or |
(iii)
|
the Limited Partners share of Distributable Cash. |
(i)
|
the amount of any additional money contributed by the Partner to the Partnership; |
(ii)
|
the fair market value of any property contributed by the Partner to the Partnership (net of liabilities secured by the contributed property that the Partnership is considered to assume under Code Section 752); and |
(iii)
|
allocations to the Partner of Income (or items thereof), including, but not limited to, items of income and gain specially allocated pursuant to Section 11.2(b), (c), (d), (e), (f), (g) or (h). |
(i)
|
the amount of money distributed to or on behalf of the Partner by the Partnership; |
(ii)
|
the fair market value of any property distributed to or on behalf of the Partner by the Partnership (net of liabilities secured by the distributed property that the Partner is considered to assume under Code Section 752); and |
(iii)
|
allocations to the Partner of Loss (or items thereof), including but not limited to items of loss and deduction specially allocated pursuant to Section 11.2(b), (c), (d), (e), (f), (g) or (h). |
(i)
|
to acquire, invest in (directly or indirectly), purchase, own, hold, lease, re-lease, finance, refinance, borrow, loan, manage, maintain, operate, improve, upgrade, modify, exchange, assign, encumber, create and receive security interests in, pledge, sell, transfer or otherwise dispose of, and in all respects otherwise deal in or with, Investments and other tangible or intangible property (including securities, debt instruments, contract rights, lease rights, equity interests and, to the extent permitted by Section 9.1(b)(xix), joint ventures), and to contract with others to do the same on behalf of the Partnership; |
(ii)
|
to select and supervise the activities of any Equipment and Other Physical Asset management agents for the Partnership; |
(iii)
|
to assure the proper application of revenues of the Partnership; |
(iv)
|
to maintain proper books of account for the Partnership and to prepare reports of operations and tax returns required to be furnished to the Partners pursuant to this Agreement or to taxing bodies or other governmental agencies, including Administrators, in accordance with applicable laws and regulations; |
(v)
|
to enter into the Selling Agent Agreement with the Selling Agent to provide for the offer and sale of Units; |
(vi)
|
to enter into the Management, Origination and Servicing Agreement with the Investment Manager to provide for the services described therein; |
(vii)
|
to invest any and all funds held by the Partnership; |
(viii)
|
to designate depositories of the Partnerships funds, and establish the terms and conditions of the deposits and drawings on the deposits; |
(ix)
|
without the Consent of a Majority Interest under Section 9.2(i), to enter into Financing Transactions and otherwise to borrow money or procure extensions of credit for the Partnership (except that neither the Partnership nor the General Partner shall borrow money solely for the purpose of making Cash Distributions during the Operating Period that the Partnership would otherwise be unable to make) and, in connection therewith, to execute, seal, acknowledge and deliver agreements, promissory notes, guarantees and other written documents evidencing Financing Transactions or constituting obligations or evidences of Indebtedness and to pledge, hypothecate, mortgage, assign, transfer or convey mortgages or security interests in Investments or any other assets of the Partnership as security for Financing Transactions; |
(x)
|
to hold all or any portion of the Investments and other assets of the Partnership in the name of one or more trustees, nominees, or other entities or agents of or for the Partnership; |
(xi)
|
to acquire and enter into any contract that the General Partner deems necessary or appropriate for the protection of the Partnership and (subject to Sections 9.2(b), 9.2(c) and 9.2(g)) the General Partner, for the conservation of Partnership assets, or for any other purpose convenient or beneficial to the Partnership; |
(xii)
|
to employ agents, employees, managers, accountants, attorneys, consultants and other persons in the operation and management of the business of the Partnership including, but not limited to, Affiliates of the General Partner, supervisory managing agents, management agents, and lease, loan or securities brokers, on terms and for compensation as the General Partner shall determine, provided, however, that, with respect to services provided by the General Partner or its Affiliates, compensation for those services shall be limited as specifically set forth in this Agreement; |
(xiii)
|
to cause the Partnership to make or revoke any of the elections referred to in Sections 108, 732, 754 and 1017 of the Code or any similar provisions enacted in lieu of those elections; |
(xiv)
|
to select as the accounting year for the Partnership the calendar year or any other fiscal year as may be permitted under the Code or Treasury Regulations or approved by the IRS; |
(xv)
|
to determine the accounting method or methods to be used by the Partnership (the Partnership intends, at least initially, to use the accrual method of accounting in maintaining its books and records) in accordance with the Code or Treasury Regulations; |
(xvi)
|
to require in all Partnership obligations to any Person other than a Limited Partner, acting as a Limited Partner, that the General Partner shall not have any personal liability on those obligations, and that the person or entity contracting with the Partnership must look solely to the Partnership and its assets for satisfaction; |
(xvii)
|
to invest the Gross Offering Proceeds and Net Offering Proceeds temporarily in short term, highly liquid investments where there is appropriate safety of principal, before the funds are used to make or acquire Investments; |
(xviii)
|
to execute or sign, individually or jointly, a check or certificate on behalf of the Partnership; |
(xix)
|
to cause the Partnership to invest in a joint venture to own one or more Investments with any one or more Affiliated Programs if the General Partner determines, in its sole discretion, that: |
(A)
|
doing so would be in the best interest of the Partnership and the Affiliated Program; |
(B)
|
the Partnership and the Affiliated Program would have substantially identical investment objectives; |
(C)
|
there would be no duplicate fees; |
(D)
|
the compensation of the sponsor of the Affiliated Program would be substantially identical to the compensation of the General Partner from the Partnership; |
(E)
|
the Partnership would have the right of first refusal to purchase any Investment jointly owned with the Affiliated Program that the Affiliated Program wishes to sell; |
(F)
|
the respective investments in the Investment by the Partnership and the Affiliated Program would be on substantially the same terms and conditions; and |
(G)
|
the joint venture would be entered into either for the purpose of effecting appropriate diversification for the Partnership and the Affiliated Program, or for the purpose of relieving the General Partner or its Affiliates from a commitment entered into pursuant to Section 9.2(b); |
(xx)
|
to pay, extend, renew, modify, adjust, submit to arbitration, prosecute, defend or compromise, on any terms as it may determine and on any evidence as it deems sufficient, any obligation, suit, liability, cause of action or claim, including those relating to federal, state or local taxation, either in favor of or against the Partnership; |
(xxi)
|
to establish and maintain Reserves, and to increase or reduce the amounts of the Reserves, as it deems appropriate from time to time, but initially the Partnerships Reserves shall not be less than an amount equal to 0.5% of the Gross Offering Proceeds; |
(xxii)
|
subject to Section 8.3, to do all things necessary or advisable, in its sole discretion, to effect the admission of the Limited Partners, including, but not limited to, registering the Units under the Securities Act and effecting the qualification of, or obtaining exemptions from the qualification of, the Units for sale with Administrators, and determining that the purchase of Units is a suitable and appropriate investment for each Limited Partner, based on information provided by each Limited Partner regarding his financial situation and investment objectives; |
(xxiii)
|
to enter into the Escrow Agreement on behalf of the Partnership and provide for compensation to the Escrow Agent that the General Partner deems reasonable under the circumstances; |
(xxiv)
|
to cause the Partnership to redeem, or not Redeem, Units, in its sole discretion, if a Limited Partner requests the Partnership to redeem a portion or all of the Limited Partners Units as provided in Section 13.5; |
(xxv)
|
to cause the Partnership to obtain and pay the premiums with respect to insurance policies covering all risks the General Partner deems reasonably necessary to protect the interests of the Partnership; provided that the General Partner, its Affiliates and their respective employees and agents may be named as additional insured parties under the insurance policies only if doing so does not increase the cost of premiums payable by the Partnership or if the additional cost, if any, is paid by the General Partner and its Affiliates; and provided further, that the Partnership shall not incur or assume the cost of any portion of any insurance which insures any party against any liability the indemnification of which is prohibited by Section 9.3(b); |
(xxvi)
|
subject to the limitations and requirements of Section 11.1(b), (A) to reinvest all or a substantial portion of the Net Disposition Proceeds in additional Investments during the Operating Period, and (B) to reinvest Net Disposition Proceeds in additional Investments during the Liquidation Period if, in the Investment Managers sole discretion, such reinvestment would be in the best interests of the Limited Partners; |
(xxvii)
|
to manage and supervise all marketing and investor relations matters; |
(xxviii)
|
subject to Section 9.2(m), to enter into on behalf of the Partnership arrangements with itself or its Affiliates to provide services for the Partnership, if necessary, in addition to those provided for under this Agreement or the Management, Origination and Servicing Agreement, which additional arrangements must meet the following criteria: |
(A)
|
the compensation, price or fee charged for providing the services must be comparable and competitive with the compensation, price or fee of any other Person who is rendering comparable services or selling or leasing comparable goods and materials which could reasonably be made available to the Partnership; |
(B)
|
the fees and other terms of the contract shall be fully disclosed to the Limited Partners; and |
(C)
|
the General Partner or its Affiliate providing the services must be independently engaged in the business of providing those services to Persons other than Affiliates of the General Partner; and |
(xxix)
|
to take all actions and execute all documents and other instruments as the General Partner may deem necessary, convenient or advisable to accomplish or further the purposes or objectives of the Partnership or to protect and preserve Partnership assets. |
(i)
|
the General Partner determines, in its sole discretion, that making the Investment is in the best interests of the Partnership; |
(ii)
|
the Investment is purchased by the Partnership at a Purchase Price that does not exceed the sum of: |
(A)
|
the cost to the General Partner or the Affiliate of acquiring and holding the Investment (as determined under GAAP and as adjusted for any income received, capital or investment returned and reasonable and necessary expenses paid or incurred while holding the Investment); plus |
(B)
|
any compensation to which the General Partner and any Affiliate of the General Partner is entitled to under this Agreement; |
(iii)
|
there is no difference in the interest terms of any Indebtedness secured by the Investment at the time it is acquired by the General Partner or its Affiliate and the time the Investment is acquired by the Partnership, although there may be different interest terms if the applicable financing is provided through a different credit facility or different Lender; |
(iv)
|
neither the General Partner nor any Affiliate of the General Partner receives any other benefit, other than compensation permitted by this Agreement, as a result of the Partnership purchasing the Investment; and |
(v)
|
at the time of transfer of the Investment to the Partnership, the General Partner or its Affiliate had held the Investment on a temporary or interim basis (generally not longer than 6 months) for the purposes of: |
(A)
|
facilitating the acquisition of the Investment by the Partnership; or |
(B)
|
any other lawful purpose related to the business of the Partnership. |
(i)
|
any interest or other financing charges or fees payable by the Partnership in connection with the loan shall not exceed the lesser of the following: |
(A)
|
the rate of interest and other amounts paid or payable by the General Partner or the Affiliate in connection with the loan (if the General Partner or the Affiliate borrowed money for the specific purpose of making the loan); or |
(B)
|
the rate of interest and other amounts that would be charged to the Partnership (without reference to the General Partners or the Affiliates financial abilities or guarantees) by unrelated lending institutions on a comparable loan for the same purpose in the same geographic area (if neither the General Partner nor the Affiliate borrowed money to make the loan); and |
(ii)
|
all payments of principal and interest on the loan must be due and payable within 12 months after the date on which the loan is made. |
(i)
|
An appraisal of all Partnership assets shall be obtained from a competent Independent Expert. If the appraisal will be included in a prospectus used to offer the securities of a Roll-Up Entity, the appraisal shall be filed with the Commission and applicable Administrators as an exhibit to the registration statement for the offering. Partnership assets shall be appraised on a consistent basis. The appraisal shall be based on an evaluation of all relevant information, and shall indicate the value of the Partnerships assets as of a date immediately prior to the announcement of the proposed Roll-Up transaction. The appraisal shall assume an orderly liquidation of Partnership assets over a 12-month period. The terms of the engagement of the Independent Expert shall clearly state that the engagement is for the benefit of the Partnership and its Limited Partners. A summary of the independent appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to the Limited Partners in connection with a proposed Roll-Up transaction. |
(ii)
|
The Person sponsoring the Roll-Up transaction shall offer to Limited Partners who vote no on the proposal the choice of: |
(A)
|
accepting the securities offered in the proposed Roll-Up transaction; or |
(B)
|
one of the following: |
(1)
|
remaining as Limited Partners, and preserving their Units in the Partnership on the same terms and conditions as existed previously; or |
(2)
|
receiving cash in an amount equal to the Limited Partners pro-rata share of the appraised value of the net assets of the Partnership. |
(iii)
|
The Partnership shall not participate in any proposed Roll-Up transaction that would result in Limited Partners having voting rights which are less than those provided for under this Agreement. If the Roll-Up Entity is a limited partnership, the voting rights of Limited Partners shall correspond to the voting rights provided for in this Agreement to the greatest extent possible. If the Roll-Up Entity is a corporation, then the democracy rights of Limited Partners shall correspond to the democracy rights provided for in this Agreement to the greatest extent possible. |
(iv)
|
The Partnership shall not participate in any proposed Roll-Up transaction that includes provisions which would operate to materially impede or frustrate the accumulation of shares by any purchaser of the securities of the Roll-Up Entity (except to the minimum extent necessary to preserve the tax status of the entity). The Partnership shall not participate in any proposed Roll-Up transaction that would limit the ability of a Limited Partner to exercise the voting rights of the securities of the Roll-Up Entity on the basis of the number of Units held by that Limited Partner. |
(v)
|
The Partnership shall not participate in any proposed Roll-Up transaction in which Limited Partners rights of access to the records of the Roll-Up Entity will be less than those provided for under this Agreement. |
(vi)
|
The Partnership shall not reimburse the sponsor of a proposed Roll-Up for the costs of its proxy contest, nor bear any other costs of the transaction if the Roll-Up is not approved by a Majority Interest. |
(i)
|
Except as specifically permitted by this Agreement and the Management, Origination and Servicing Agreement, the Partnership shall not enter into any agreements, contracts or arrangements with the General Partner, any Affiliate of the General Partner or any Affiliated Program not otherwise discussed in this Agreement or the Prospectus. |
(ii)
|
Except as permitted by Section 9.4, the General Partner and its Affiliates shall not receive, directly or indirectly, a commission or fee in connection with the reinvestment of Net Disposition Proceeds in new Investments. |
(iii)
|
Neither the General Partner nor any of its Affiliates may receive any rebates or give-ups, nor may the General Partner or any of its Affiliates participate in any reciprocal business arrangements that could have the effect of circumventing any of the provisions of this Agreement. |
the potential investor concerning the Units. Provided, however, this Section 9.2(h) shall not prohibit the payment to any such Person of the Underwriting Fees or Sales Commissions in accordance with the terms of this Agreement and the Selling Agent Agreement.
(i)
|
a written contract shall precisely describe the services to be rendered and all compensation to be paid; |
(ii)
|
the contract may be modified only by a Majority vote of the Limited Partners, and the contract shall contain a clause allowing its termination without penalty by a Majority vote of the Limited Partners on 60 days notice to the General Partner or its Affiliates, as the case may be; |
(iii)
|
the compensation, price or fee charged for providing the services must be comparable and competitive with the compensation, price or fee of any other Person who is rendering comparable services or selling or leasing comparable goods and materials which could reasonably be made available to the Partnership; |
(iv)
|
the fees and other terms of the contract shall be fully disclosed to the Limited Partners; and |
(v)
|
the General Partner or its Affiliate must be independently engaged in the business of providing the services to Persons other than Affiliates of the General Partner and at least 75% of its gross revenue from providing the services must be derived from Persons other than the General Partner or its Affiliates. |
(i)
|
the General Partner and its Affiliates determined in good faith that the course of conduct was in the best interest of the Partnership; |
(ii)
|
the General Partner and its Affiliates were acting within the scope of authority on behalf of, or performing services for, the Partnership; and |
(iii)
|
the course of conduct did not constitute negligence or misconduct of the General Partner or its Affiliates. |
(i)
|
the General Partner and its Affiliates determined in good faith that the course of conduct that caused the loss or liability was in the best interest of the Partnership; |
(ii)
|
the General Partner and its Affiliates were acting within the scope of authority on behalf of, or performing services for, the Partnership; and |
(iii)
|
the liability or loss was not the result of negligence or misconduct by the General Partner or its Affiliates. |
(i)
|
there has been a successful adjudication on the merits of each count involving securities law violations as to the particular indemnitee and a court of competent jurisdiction has approved indemnification of the litigation costs; or |
(ii)
|
the claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee and a court of competent jurisdiction has approved indemnification of the litigation costs; or |
(iii)
|
a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and a court of competent jurisdiction has found that indemnification of the settlement and related costs should be made. |
(i)
|
Except as otherwise provided in this Section 9.4(f), Partnership expenses (including Acquisition Expenses) other than those reimbursed in accordance with Sections 9.4(b) through (d) of this Section 9.4 shall be billed directly to and paid by the Partnership. |
(ii)
|
Subject to clause (iv), the General Partner and its Affiliates may be reimbursed for the actual cost of goods, materials and services used for or by the Partnership and obtained by it or them from non-Affiliates of the General Partner. |
(iii)
|
Subject to clause (iv), the General Partner and its Affiliates may be reimbursed for the administrative services reasonably necessary, convenient or advisable, in the discretion of the General Partner and/or the Investment Manager, to the prudent operation of the Partnership (including, without limitation, legal, accounting, remarketing and agency expenses) provided that the reimbursement shall not exceed the lesser of: |
(A)
|
its or their actual cost; or |
(B)
|
the amount the Partnership would be required to pay to non-Affiliates for comparable administrative services in the same geographic location; and |
(iv)
|
The General Partner and its Affiliates shall not be reimbursed by the Partnership for amounts expended by them with respect to the following: |
(A)
|
salaries, fringe benefits, travel expenses or other administrative items incurred by or allocated to any Controlling Person of the General Partner or its Affiliates; or |
(B)
|
rent, depreciation, utilities, capital equipment or, subject to clause (iii), other administrative items. |
resolved by the Investment Committee, which will evaluate the suitability of all prospective Investments. If the Investments available from time to time to the Partnership and to other Affiliated Programs are less than the aggregate amount of the Investments then sought by them, an available Investment shall be allocated by the General Partner to an Affiliated Program (including the Partnership) after taking into consideration at least the following factors:
(i)
|
which Affiliated Program has been seeking Investments or reinvesting Cash Flow from its Investments for the longest period of time; |
(ii)
|
whether the Affiliated Program has the cash required for the Investment; |
(iii)
|
whether the amount of debt to be incurred with respect to the Investment is acceptable for the Affiliated Program; |
(iv)
|
the effect the Investment would have on the Affiliated Programs cash flow; |
(v)
|
whether the Investment would further diversify, or unduly concentrate, the Affiliated Programs Investments in a particular lease, class or type of equipment, location, industry, etc.; and |
(vi)
|
whether the term of the Investment is within the term of the Affiliated Program. |
(i)
|
the right to participate in or have any control over the Partnerships business; |
(ii)
|
the right or authority to act for, or to bind or otherwise obligate, the Partnership (except if the Limited Partner also is a General Partner, and then only in its capacity as a General Partner); |
(iii)
|
the right to have the Partnership dissolved and liquidated, except as provided in Section 16.2 through the Consent or vote of the Majority Interest of the Limited Partners; or |
(iv)
|
the right to have all or any part of the Limited Partners Capital Contribution or Capital Account returned, except as provided in this Agreement. |
(i)
|
have any further obligations to the Partnership; |
(ii)
|
be subject to any additional Assessment; or |
(iii)
|
be required to make any additional Capital Contribution to, or to loan any funds to, the Partnership. |
(i)
|
first, prior to Payout, 1% to the General Partner and 99% to the Limited Partners; and |
(ii)
|
thereafter, 20% to the General Partner and 80% to the Limited Partners. |
Capital Accounts of the Partners in a manner that as closely as possible gives economic effect to the provisions of Articles IX, XI, XIV and the other relevant provisions of this Agreement.
(i)
|
Minimum Gain Charge-Back. Notwithstanding any other provision of this Article XI, if there is a net decrease in Partnership Minimum Gain or in any Partner Nonrecourse Debt Minimum Gain during any Fiscal Period, before any other allocation under this Article XI each Partner shall be specially allocated items of Partnership Income and gain for the Fiscal Period (and, if necessary, subsequent Fiscal Periods) in an amount and manner required by Treas. Reg. Sections 1.704-2(f) and 1.704-2(i) (4) or any successor provisions. The items to be so allocated shall be determined in accordance with Treas. Reg. Section 1.704-2(j) (2) or any successor provision. |
(ii)
|
Partnership Nonrecourse Deductions. Partnership Nonrecourse Deductions for any Fiscal Period shall be allocated 99% to the Limited Partners and 1% to the General Partner. |
(iii)
|
Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any Fiscal Period shall be allocated to the Partner who made or guaranteed or is otherwise liable with respect to the loan to which the Partner Nonrecourse Deductions are attributable in accordance with the principles of Treas. Reg. Section 1.704-2(i) or any successor provision. |
(iv)
|
Qualified Income Offset. If in any Fiscal Period, any Partner has an Adjusted Capital Account Deficit, whether resulting from an unexpected adjustment, allocation or distribution described in Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) or otherwise, the Partner shall be allocated items of Partnership Income (consisting of a pro rata portion of each item of Partnership Income for the Fiscal Period, including gross income and gain for such Fiscal Period) sufficient to eliminate the Adjusted Capital Account Deficit as quickly as possible, to the extent required by Treas. Reg. Section 1.704-1(b)(2)(ii)(d); provided that an allocation pursuant to this Section 11.2(b)(iv) shall be made only if and to the extent that the Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article XI have been tentatively made as if this Section 11.2(b)(iv) were not in the Agreement. It is the intention of the parties that this allocation provision constitute a qualified income offset within the meaning of Treas. Reg. Section 1.704-1(b)(2)(ii)(d). |
(v)
|
Gross Income Allocation. In the event any Partner has a deficit Capital Account at the end of any Fiscal Period that is in excess of the sum of the amount such Partner is obligated to restore pursuant to the penultimate sentences of Treas. Reg. Sections 1.704-2(g)(1) and 1.704 2(i)(5), each such Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible; provided that an allocation pursuant to this Section 11.2(b)(v) shall be made only if and to the extent that such Partner would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article XI have been made as if Section 11.2(b)(iv) and this Section 11.2(b)(v) were not in the Agreement. |
(vi)
|
Curative Allocations. The special allocations provided for in Section 11.2(e) and in Sections 11.2(b)(i) through (iv) are intended to comply with Treas. Reg. Sections 1.704-1 and 1.704- 2. To the extent that any of those special allocations have been made, subsequent allocations of Income, Loss and items |
thereof (curative allocations) shall be made as soon as possible and in a manner so as to cause, to the extent possible without violating the requirements of Treas. Reg. Sections 1.704-1 and 1.704-2, the Partners Capital Account balances to be as nearly as possible in the same proportions in which they would have been had the special allocations not occurred. In making these curative allocations, due regard shall be given to the character of the Income and Loss and items thereof that were originally allocated under the provisions of Section 11.2(a) and Sections 11.2(b) (i) through (iv) in order to put the Partners as nearly as possible in the positions in which they would have been had those special allocations not occurred. |
(vii)
|
Loss Limitation. Losses allocated pursuant to Section 11.2(a) hereof shall not exceed the maximum amount of Losses that can be allocated without causing any Partner to have an Adjusted Capital Account Deficit at the end of any Fiscal Period. In the event some but not all of the Partners would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 11.2(a) hereof, the limitation set forth in this Section 11.2(b)(vii) shall be applied on a Partner by Partner basis and Losses not allocable to any Partner as a result of such limitation shall be allocated to the other Partners in accordance with the positive balances in such Partners Capital Accounts so as to allocate the maximum permissible Losses to each Partner under Treas. Reg. Section 1.704-1(b)(2)(ii)(d). |
(i)
|
first, the Operations and Sales of the Partnership shall be deemed to have occurred ratably over the Fiscal Year, irrespective of the actual results of Operations or Sales of the Partnership; |
(ii)
|
second, all Income and Loss for the Fiscal Year shall be allocated among the Limited Partners in the ratio that the number of Units held by each Limited Partner multiplied by the number of days in the Fiscal Year that the Units were held by the Limited Partner bears to the sum of that calculation for all Limited Partners; and |
(iii)
|
third, all quarterly distributions of cash made to the Limited Partners under Section 11.1 shall be distributed among the Limited Partners in the ratio that the number of Units held by each Limited Partner multiplied by the number of days in the quarterly period preceding the quarterly period in which the distribution is made that the Units were held by the Limited Partner bears to the sum of that calculation for all Limited Partners. If the General Partner determines at any time that the sum of the quarterly period distributions made to any Limited Partner during or with respect to a Fiscal Year does not (or will not) properly reflect the Limited Partners share of the total distributions made or to be made by the Partnership for the Fiscal Year, the General Partner shall, as soon as practicable, make a supplemental distribution to the Limited Partner, or withhold from a subsequent distribution that otherwise would be payable to the Limited Partner, an amount that will cause the total distributions to the Limited Partner for the Fiscal Year to be the proper amount. |
(i)
|
first, in reduction of the Limited Partners Unpaid Cumulative Return, to the extent thereof, as determined immediately before the distribution; and |
(ii)
|
thereafter, in reduction of the Limited Partners Adjusted Capital Contribution, as determined immediately before the distribution. |
payment only if it determines that the Partner is not likely to be entitled to distributions within 12 months from the date of the withholding or payment by the Partnership in an amount sufficient to pay the excess and interest.
(i)
|
the Limited Partners have received 60 days advance written notice of the General Partners intention to withdraw; |
(ii)
|
the Partnership has received an opinion of Counsel to the effect that the withdrawal will not constitute a termination of the Partnership as a limited partnership under the Delaware Act or otherwise materially adversely affect the status of the Partnership for federal income tax purposes; and |
(iii)
|
a Substitute General Partner has been selected, and the Substitute General Partner has: |
(A)
|
consented to its admission as General Partner; |
(B)
|
received the written Consent of a Majority Interest to its admission as General Partner; and |
(C)
|
a Net Worth sufficient, in the opinion of Counsel, for the Partnership to continue to be classified as a partnership for federal income tax purposes and to satisfy the Net Worth requirements for sponsors under applicable laws, rules, regulations and policies of Administrators. |
(i)
|
the Partnership shall pay to the withdrawn General Partner the fair market value of the Partnership Interest then held by the General Partner, calculated in the manner set forth in subsection (b), below, and payable as set forth in subsection (c), below; and |
(ii)
|
an amount equal to the difference between any fees accrued but not yet paid to the General Partner, plus all other amounts due and owing to the General Partner by the Partnership, minus any amounts due and owing by the General Partner to the Partnership, which shall be payable in cash within 30 days of the date of withdrawal, by the debtor party to the creditor party. |
(i)
|
the rate of interest (inclusive of any points or other loan charges) that the Partnership would be required to pay to an unrelated bank or commercial lending institution for an unsecured, 60 month loan of like amount; or |
(ii)
|
the Prime Rate of interest published in the Money Rates section of the Wall Street Journal, plus 4%. |
(i)
|
the Limited Partner and the Assignee each execute a written Assignment, which: |
(A)
|
sets forth the terms of the Assignment; |
(B)
|
in the case of Assignments other than by operation of law, states the intention of the Limited Partner that the Assignee shall become a Substitute Limited Partner and, in all cases, evidences the acceptance by the Assignee of all of the terms and provisions of this Agreement; and |
(C)
|
includes a representation by both the Limited Partner and the Assignee that the Assignment was made in accordance with all applicable laws and regulations (including, without limitation, the minimum investment and investor suitability requirements as may then be applicable under state securities laws); and |
(ii)
|
the Assignee pays to the Partnership an aggregate amount, not exceeding $150, for expenses reasonably incurred by the Partnership in connection with processing the Assignment. |
(i)
|
to a minor or incompetent (unless a guardian, custodian or conservator has been appointed to handle the affairs of that Person); |
(ii)
|
to any Person if, in the opinion of Counsel, the Assignment would result in the termination of the Partnerships taxable year or its status as a partnership for federal income tax purposes, provided that the Partnership may permit the Assignment to become effective if and when, in the opinion of Counsel, the Assignment would no longer result in the termination of the Partnerships taxable year or its status as a partnership for federal income tax purposes; |
(iii)
|
to any Person if the Assignment, in the opinion of Counsel, would affect the Partnerships existence or qualification as a limited partnership under the Delaware Act or the applicable laws of any other jurisdiction in which the Partnership is then conducting business; |
(iv)
|
to any Person not permitted, in the opinion of Counsel, to be an Assignee under applicable law, including, without limitation, applicable federal and state securities laws; |
(v)
|
if the Assignment would result in the transfer of less than 5 Units (unless the Assignment includes all of the Units owned by the Limited Partner); |
(vi)
|
if the Assignment would result in the retention by the Limited Partner of a portion of his Units representing less than the greater of 5 Units or the minimum number of units required to be purchased under the minimum investment standards applicable under state securities laws to applicable Limited Partners initial purchase of the Units; or |
(vii)
|
if, in the opinion of Counsel, the effect of the Assignment would be to cause the equity participation in the Partnership by benefit plan investors (within the meaning of Department of Labor Reg. Section 2510.3-101(f)) and possibly other tax-exempt investors (as determined by the General Partner after consultation with Counsel) to equal or exceed 25% of the Partnerships total outstanding Units. |
(i)
|
the General Partner has reasonably determined that all of the conditions specified in Section 13.2 have been satisfied and no adverse effect to the Partnership will result from the admission; and |
(ii)
|
the Assignee has executed a transfer agreement and the other forms, including a power of attorney to the effect required by Article XVIII, as the General Partner reasonably may require to comply with this Article XIII. |
(i)
|
The Partnership shall never be required to Redeem any Units of any Limited Partner and shall do so only with the prior Consent of the General Partner, which is in the sole discretion of the General Partner. In this regard, the General Partner may take into consideration the time of year during which a Redemption request is made, and the effect making a Redemption would have on the Partnerships compliance with the 2% limitation described in clause (ii), below. |
(ii)
|
The Partnership shall not, in any calendar year, Redeem Units that, in the aggregate with all Units otherwise transferred in that calendar year, would exceed 2% of the Partnerships total capital or profits interests as of the last day of that year. |
(iii)
|
No Reserves shall be established by the Partnership for the Redemption of Units. The availability of funds for the Redemption of any Unit shall be subject to the availability of sufficient Cash Flow. Furthermore, Units may be Redeemed only if the Redemption would not impair the capital or the Operations of the Partnership and would not result in the termination under the Code of the Partnerships taxable year or its federal income tax status as a partnership, all as determined in the sole discretion of the General Partner. |
(iv)
|
The Partnership may charge a reasonable administrative fee as determined by the General Partner in its sole discretion. |
(i)
|
during the Offering Period and Operating Period, the Redemption price will equal not less than $850 per Unit, less 100% of previous distributions paid to the Limited Partner per Unit; or |
(ii)
|
during the Liquidation Period, the Redemption price will equal the equity per Unit as set forth on the Partnerships balance sheet in its most recent periodic report filed with the Commission before the Redemption request, less 100% of any distributions paid to the Limited Partner per Unit since the date of the balance sheet. |
(i)
|
personally delivered with receipt acknowledged; or |
(ii)
|
mailed by certified mail, return receipt requested, postage prepaid, to the General Partners address set forth in this Agreement. |
(i)
|
stating the number, if any, of the Units to be Redeemed; and |
(ii)
|
if appropriate: |
(A)
|
stating the date of the Redemption of the Units, which shall be a date within 30 days following the date of the Notice; |
(B)
|
stating the Applicable Redemption Price with respect to the Units to be Redeemed; and |
(C)
|
advising the Limited Partner that not less than 10 days before the Redemption date stated in the Notice (the Delivery Date) the Limited Partner must duly execute and deliver to the Partnership all transfer instruments and other documents requested by the Partnership to evidence the Redemption of the Units. In the General Partners discretion, these transfer instruments and documents may be prepared by the Partnership for execution by the Limited Partner and enclosed with the Notice. |
(i)
|
all of the Limited Partners transfer instruments and other documents requested by the Partnership are duly executed and returned to the Partnership no later than the Delivery Date stated in the Notice; and |
(ii)
|
the transfer instruments and other documents are in good order and acceptable to the General Partner, in its sole discretion. |
(i)
|
the General Partner with the Consent of a Majority Interest; |
(ii)
|
the Consent of a Majority Interest without action by the General Partner. |
(iii)
|
the Sale of all or substantially all of the assets of the Partnership not constituting a Financing Transaction, but only with the vote or Consent of the Majority Interest; |
(iv)
|
the expiration of the Partnerships term as set forth in Section 7.1; or |
(v)
|
any other event that causes the dissolution or winding-up of the Partnership under the Delaware Act. |
(i)
|
all Income or Loss or items thereof, and all amounts required to be specially allocated for the period before final termination, shall be allocated among the Capital Accounts of the Partners in accordance with Article XI; |
(ii)
|
if after all requirements of clause (i) of this Section 14.2(c) have been accomplished, the General Partner has a deficit balance in its Capital Account, then within 30 days the General Partner shall contribute the amount of the deficit balance to the Partnership as a Capital Contribution, provided that for this purpose, any payments made by the General Partner as co-signatory or guarantor of any Indebtedness of the Partnership that has not yet been reimbursed to the General Partner by the Partnership at the time of dissolution of the Partnership, and any amounts due and unpaid to the General Partner with respect to any Partnership Loans at the time of dissolution, shall be deemed to be Capital Contributions by the General Partner to the Partnership and any obligation of the Partnership to reimburse or repay those amounts to the General Partner shall then cease; |
(iii)
|
the proceeds from Sales or other dispositions of all other assets of the Partnership shall be applied and distributed in liquidation of the Partnership as provided in Section 14.3; and |
(iv)
|
the General Partner (or any other Person effecting the winding-up) shall file all certificates and other documents as may be required by the Delaware Act, the Code and any other applicable laws to terminate the Partnership. |
(i)
|
first, to the payment of creditors of the Partnership in the order of priority as provided by law, except obligations to Partners or their Affiliates; |
(ii)
|
next, to setting up any Reserve that the General Partner (or any other Person effecting the winding-up) determines is reasonably necessary for any contingent or unforeseen liability or obligation of the Partnership or the General Partner; the Reserve may, in the sole discretion of the General Partner (or the other Person effecting the winding-up) be deposited with an escrow agent selected by it to be held in escrow for the purpose of disbursing the Reserve in payment of any of the aforementioned contingencies, and at the expiration of the period that the General Partner (or the other Person effecting the winding-up) deems |
advisable, to distribute the remaining balance as provided in subsections (iii) through (vi), below; |
(iii)
|
next, to the payment of all obligations to the Partners in proportion to, and to the extent of, advances made by them to the Partnership under the provisions of this Agreement; |
(iv)
|
next, to the payment of all reimbursements to which the General Partner and its Affiliates may be entitled under this Agreement; |
(v)
|
next, to the Limited Partners pro rata in proportion to their respective Adjusted Capital Contributions; |
(vi)
|
next, prior to Payout, 1% to the General Partner and 99% to the Limited Partners; and |
(vii)
|
thereafter, 20% to the General Partner and 80% to the Limited Partners. |
(i)
|
the Participant List; |
(ii)
|
a copy of the certificate of limited partnership and all amendments thereto, together with executed copies of any powers of attorney under which the certificate or any amendment thereto has been executed; |
(iii)
|
copies of this Agreement and any amendments hereto; |
(iv)
|
copies of the audited financial statements of the Partnership for the three most recently completed Fiscal Years, including, in each case, the balance sheet and related statements of operations, cash flows and changes in Partners equity at or for those Fiscal Years, together with the reports of the Partnerships independent auditors with respect thereto; |
(v)
|
copies of the Partnerships federal, state and local income tax returns and reports, if any, for its three most recently completed Fiscal Years; |
(vi)
|
records as required by applicable tax authorities, including those specifically required to be maintained by reportable transactions, if so required of the Partnership; and |
(vii)
|
investor suitability records for Units sold for a period of no less than six years. |
(i)
|
a reasonable copying charge; |
(ii)
|
providing reasonable advance written notice to the General Partner that states the date and time of the intended visit and identifies with reasonable specificity the documents that the Limited Partner or his representative wishes to examine or copy; and |
(iii)
|
in the case of copying the Participant List, compliance with Section 15.2(c). |
(i)
|
permit a Limited Partner or his representative to examine the Participant List at the General Partners principal office during normal business hours and with reasonable notice to the General Partner; or |
(ii)
|
mail a copy of the Participant List to the Limited Partner or his representative as required by Section 15.2(c); |
(i)
|
a report containing the same financial information as is contained in the Partnerships quarterly report on Form 10-Q filed with the Commission under the Securities Exchange Act of 1934, as amended; |
(ii)
|
a detailed statement identifying any services rendered or to be rendered to the Partnership by the General Partner or any of its Affiliates and the compensation received therefor and summarizing the terms and conditions of any contract that was not filed as an exhibit to the Registration Statement; and the requirement for this statement shall not be circumvented by lump-sum payments to non-Affiliates who then disburse the funds to, or for the benefit of, the General Partner or its Affiliates; and |
(iii)
|
until all Capital Contributions have been invested or committed to investment in Investments and Reserves, used to pay permitted Front-End Fees or returned to the Limited Partners (as provided in Section 11.5), a special report concerning all Investments made during the Fiscal Quarter which shall include: |
(A)
|
a description of the types of Investments made; |
(B)
|
the total Purchase Price paid for each category of Investment; |
(C)
|
the amounts of cash used to acquire the Investments; |
(D)
|
the Acquisition Fees and Acquisition Expenses paid, identified by party, in connection therewith; and |
(E)
|
the amount of Capital Contributions, if any, that remains unexpended and uncommitted to pending Investments as of the end of the Fiscal Quarter. |
(i)
|
financial statements for the Partnership for the Fiscal Year, including a balance sheet as of the end of the Fiscal Year and related statements of operations, cash flows and changes in Partners equity, which shall be prepared in accordance with Section 15.3 and shall be accompanied by an auditors report containing an opinion of the Accountants; |
(ii)
|
an analysis prepared by the General Partner (which need not be audited, but shall be reviewed by the Accountants) of distributions made to the General Partner and the Limited Partners during the Fiscal Year, separately identifying the portion (if any) of the distributions from: |
(A)
|
Cash Flow during the period; |
(B)
|
Cash Flow from prior periods that had been held as Reserves; |
(C)
|
Cash Flow and/or Distributable Cash from Sales and refinancings; and |
(D)
|
Capital Contributions originally used to establish a Reserve; |
(iii)
|
a status report with respect to each Investment that individually represents at least 10% of the aggregate Purchase Price of the Partnerships Investments held at the end of the Fiscal Year, which report shall state: |
(A)
|
the condition of the Equipment and each material item thereof and of any collateral securing any Investment to which the report applies; |
(B)
|
how the Equipment or collateral was being used as of the end of the Fiscal Year (e.g., leased, operated directly by the Partnership, or held for lease, repair or Sale); |
(C)
|
the projected or intended use of the Equipment or collateral during the next following Fiscal Year (e.g., renew lease, lease, retire or Sale); |
(D)
|
the remaining term of the Investment; and |
(E)
|
such other information as may be relevant to the value or use of the Equipment or collateral as the General Partner, in good faith, deems appropriate, including a description of the method used or basis for valuation; |
(iv)
|
a breakdown of all fees and other compensation paid, and all costs and expenses reimbursed, to the General Partner or its Affiliates by the Partnership during the Fiscal Year identified (and properly allocated) as to type and amount: |
(A)
|
in the case of any fees and other compensation, the breakdown shall provide the information required under Section 15.5(a)(ii); and |
(B)
|
in the case of reimbursed costs and expenses, the General Partner shall also prepare an allocation of the total amount of all those items in accordance with this Agreement. The cost and expense allocation shall be reviewed by the Accountants in connection with their audit of the financial statements of the Partnership for the Fiscal Year in accordance with the American Institute of Certified Public Accountants United States Auditing standards relating to special reports and such Accountants shall state that, in connection with the performance of the audit, they reviewed, at a minimum, the time records of, and the nature of the work performed by, individual employees of the General Partner or its Affiliates, the cost of whose services were reimbursed. The additional costs of the special review required by this clause shall be itemized by the Accountants on a Program by Program basis and shall be reimbursed to the General Partner by the Partnership only to the extent that the reimbursement, when added to the cost for administrative services rendered, does not exceed the amount the Partnership would be required to pay independent third-parties for comparable administrative services in the same geographic location; and |
(v)
|
a special report containing the information required by Section 15.5(a)(iii). |
(i)
|
reports and statements required by this Agreement to be distributed to Limited Partners; or |
(ii)
|
reports required to be filed with the Administrator by state securities laws, regulations or policies. |
(i)
|
prepare, or cause the Accountants to prepare, in accordance with applicable laws and regulations, the Partnerships tax returns (federal, state, local and |
foreign, if any) for each Fiscal Year within 75 days after the end of the Fiscal Year; and |
(ii)
|
deliver to each Partner within 75 days after the end of the Fiscal Year a Schedule K-1 or other statement permitted under the Code or by the IRS setting forth the Partners share of the Partnerships Income or Loss for the Fiscal Year. |
(i)
|
the Partnership shall be authorized and directed to elect the safe harbor; |
(ii)
|
the Partnership and each of its Partners (including any Person to whom a Partnership Interest is transferred in connection with the performances of services) shall comply with all requirements of the safe harbor with respect to all Partnership Interests transferred in connection with the performance of services while the election remains effective; and |
(iii)
|
the General Partner, in its sole discretion, may cause the Partnership to terminate the safe harbor election, which determination may be made in the best interests of the General Partner. |
(i)
|
to the extent and in the manner required by applicable law and regulations, the Tax Matters Partner shall furnish the name, address, number of Units and taxpayer identification number of each Limited Partner to the Secretary of the Treasury or his delegate (the Secretary); and |
(ii)
|
to the extent and in the manner required by applicable law and regulations, the Tax Matters Partner shall keep each Limited Partner informed of administrative and judicial proceedings for the adjustment at the Partnership level of any item required to be taken into account by a Limited Partner for income tax purposes (these judicial proceedings are referred to hereinafter as judicial review). |
(i)
|
to enter into any settlement with the IRS with respect to any tax audit or judicial review of the Partnership, in which agreement the Tax Matters Partner may expressly state that the agreement shall bind the other Partners, except that the settlement agreement shall not bind any Partner who (within the time prescribed pursuant to Section 6224(c)(3) of the Code and regulations thereunder) files a statement with the IRS providing that the Tax Matters Partner does not have authority to enter into a settlement agreement on the behalf of the Partner; |
(ii)
|
if a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a Partner for tax purposes (a final adjustment) is mailed to the Tax Matters Partner, to seek judicial review of the final adjustment, including the filing of a petition for readjustment with the Tax Court, the District Court of the United States for the district in which the Partnerships principal place of business is located, the United States Court of Claims or any other appropriate forum; |
(iii)
|
to intervene in any action brought by any other Partner for judicial review of a final adjustment relating to the Partnership; |
(iv)
|
to file a request for an administrative adjustment relating to the Partnership with the IRS at any time and, if any part of the request is not allowed by the IRS, to file a petition for judicial review with respect to the request; |
(v)
|
to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item of the Partnership required to be taken in to account by a Partner for tax purposes, or an item affected by the item; and |
(vi)
|
to take any other action on behalf of the Partners or the Partnership in connection with any administrative or judicial tax proceeding to the extent permitted by applicable law or regulations. |
(i)
|
personally or by certified mail (if a meeting is being called or a Consent action is being solicited, by the General Partner on the request of the Limited Partners); or |
(ii)
|
by regular mail (if a meeting is being called or a Consent action is being solicited, by the General Partner). |
Consent in lieu thereof, or any adjournment thereof, the General Partner or the Limited Partners requesting the meeting may fix, in advance, a date as the record date, which shall be a date not more than 60 days nor less than 10 days prior to the meeting (or Consent action), for the purpose of that determination.
(i)
|
amend this Agreement; |
(ii)
|
dissolve the Partnership; |
(iii)
|
remove the General Partner and elect one or more Substitute General Partners; |
(iv)
|
approve or disapprove of the Sale or series of Sales of all, or substantially all, of the assets of the Partnership, except any Sale or series of Sales that is in connection with a Financing Transaction or in the ordinary course of liquidating the Partnerships Investments after the Operating Period; and |
(v)
|
modify or terminate on 60 days notice any contract or arrangement with the General Partner or any of its Affiliates to provide goods or services for the Partnership other than this Agreement, the Management, Origination and Servicing Agreement and all other contracts specifically authorized under this Agreement. |
(i)
|
allow the Limited Partners to take part in the control or management of the Partnerships business or otherwise subject a Limited Partner to liability as a general partner under the Delaware Act or under the laws of any other jurisdiction in which the Partnership may be qualified or own an Investment; |
(ii)
|
alter the rights, powers, duties or obligations of the General Partner without the Consent of the General Partner; |
(iii)
|
contract away the fiduciary duty owed to any Limited Partner by the General Partner; |
(iv)
|
except in connection with the offer and sale of the Units as provided in this Agreement, alter the interest of any Partner in any item of Income or Loss or in distributions without the consent of each affected Partner; or |
(v)
|
Without the consent of all of the Limited Partners, amend the provisions of this Agreement relating to how this Agreement may be amended. |
(i)
|
to add to the representations, duties or obligations of the General Partner or to surrender any right or power granted to the General Partner in this Agreement; |
(ii)
|
to cure any ambiguity in this Agreement, to correct or supplement any provision in this Agreement that may be inconsistent with any other provision in this Agreement, or to add any provision to this Agreement with respect to matters or questions arising under this Agreement that is not inconsistent with the other provisions of this Agreement; |
(iii)
|
to preserve the status of the Partnership as a partnership for federal income tax purposes, or as a limited partnership under the Delaware Act or any comparable law of any other state in which the Partnership may be required to be qualified; |
(iv)
|
to delete any provision of this Agreement, or add any provision to this Agreement, required to be so deleted or added by the staff of the Commission, by any other federal or state regulatory body or other agency (including, without limitation, any blue sky commission), or by any Administrator or similar such official; |
(v)
|
to permit the Units to fall within any exemption from the definition of plan assets contained in Section 2510.3-101 of Title 29 of the Code of Federal Regulations or any successor regulation or law; |
(vi)
|
if the Partnership is advised by Counsel, the Accountants or the IRS that any allocation of Income, Loss or distribution provided for in this Agreement is unlikely to be respected for federal income tax purposes, the General Partner may amend the allocation provisions of this Agreement, in accordance with that advice to the minimum extent necessary to comply with federal income tax requirements and still effect, as nearly as practicable, the original plan of allocations and distributions set forth in this Agreement; and |
(vii)
|
to change the name of the Partnership or the location of its principal office. |
(i)
|
this Agreement, the Partnerships certificate of limited partnership and any amendment of any thereof, including, without limitation, amendments reflecting the addition of any Person as a Partner or any admission or substitution of other Partners (or the Capital Contribution made by any Person or by any Partner) and any other document, certificate or instrument required to be executed and delivered, at any time, in order to reflect the admission of any Partner (including, without limitation, any Substitute General Partner and any Substitute Limited Partner) to the Partnership; |
(ii)
|
any other document, certificate or instrument required to reflect any action of the Partners duly taken in the manner provided for in this Agreement, whether |
or not the Limited Partner voted in favor of or otherwise Consented to the action; |
(iii)
|
any other document, certificate or instrument that may be required by any regulatory body or other agency or the applicable laws of the United States, any state or any other jurisdiction in which the Partnership is doing or intends to do business or that the General Partner deems advisable; |
(iv)
|
any certificate of dissolution or cancellation of the certificate of limited partnership that may be reasonably necessary to effect the termination of the Partnership; and |
(v)
|
any instrument or documents required to continue or terminate the business of the Partnership under Section 12.5 and Article XIV; provided that no attorney-in-fact shall take any action as attorney-in-fact for any Limited Partner if the action could in any way increase the liability of the Limited Partner beyond the liability expressly set forth in this Agreement or alter the rights of the Limited Partner under Article XI, unless (in either case) the Limited Partner has given a power of attorney to the attorney-in-fact expressly for that purpose. |
(i)
|
is a special power of attorney coupled with an interest in favor of the attorney-in-fact and shall be irrevocable and shall survive the death, incapacity, insolvency, dissolution or termination of the Limited Partner; |
(ii)
|
may be exercised for the Limited Partner by a signature of the attorney-in-fact or by listing or referring to the names of all of the Limited Partners, including that Limited Partner, and executing any instrument with a single signature of any one of the attorneys-in-fact acting as attorney-in-fact for all of them; and |
(iii)
|
shall survive the Assignment by any Limited Partner of all or any portion of the Limited Partners Units, provided that, if any Assignee of all of a Limited Partners Units has furnished to the General Partner a power of attorney complying with the provisions of Section 18.1 and the admission to the Partnership of the Assignee as a Substitute Limited Partner has been approved by the General Partner, this power of attorney shall survive the Assignment with respect to the assignor Limited Partner for the sole purpose of enabling the attorneys-in-fact to execute, acknowledge and file any instrument necessary to effect the Assignment and admission and shall thereafter terminate with respect to the assignor Limited Partner. |
(i)
|
if to the Partnership: SQN AIF IV, L.P., c/o SQN AIF IV GP, LLC, 110 William Street, 26th Floor, New York, New York 10038; Telephone Number: (212) 422-2166; Fax Number: (877) 214-1425. |
(ii)
|
if to the General Partner: SQN AIF IV GP, LLC, 110 William Street, 26th Floor, New York, New York 10038; Telephone Number: (212) 422-2166; Fax Number: (877) 214-1425. |
(iii)
|
if to any Limited Partner, at the address set forth in the Limited Partners Subscription Agreement unless a different address has been provided to the Partnership under Section 5.1. |
Agreement. Notwithstanding the assignment, if any, however, the General Partner, and not the assignee, shall remain solely liable for the General Partners obligations under this Agreement.
GENERAL PARTNER: |
||||||||||||||
SQN AIF IV GP, LLC |
||||||||||||||
By: |
||||||||||||||
Name: |
||||||||||||||
Its: |
||||||||||||||
ORIGINAL LIMITED PARTNER: |
||||||||||||||
SQN CAPITAL MANAGEMENT, LLC |
||||||||||||||
By: |
||||||||||||||
Name: |
||||||||||||||
Its: |
||||||||||||||
LIMITED PARTNERS: |
||||||||||||||
By: |
SQN AIF IV GP, LLC, as Attorney in Fact |
|||||||||||||
By: |
||||||||||||||
Name: |
||||||||||||||
Its: |
|
SQN Alternative Investment Fund I, LLC (SQN I), a private program created in December 2007 that entered a four-year liquidation period that began on February 12, 2011 and is anticipated to end on February 11, 2015; |
|
SQN Alternative Investment Fund II, LLC (SQN II), a private program created in April 2009 that entered a four-year liquidation period that began on April 15, 2012 and is anticipated to end on April 14, 2016; |
|
SQN Special Opportunity Fund, LLC (SQN SOF), a private program created in September 2010; and |
|
SQN Alternative Investment Fund III L.P. (SQN III), a publicly registered program created in March 2010. |
December 31, 2011
(Unaudited)
SQN I |
SQN II |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
% of Dollar Amount Raised |
% of Dollar Amount Raised |
||||||||||||||||||
Dollar amount
offered |
$ | 15,000,000 | $ | 15,000,000 | |||||||||||||||
Dollar amount
raised |
$ | 6,957,500 | 100.00 | % | $ | 6,870,500 | 100.00 | % | |||||||||||
Less offering
expenses: |
|||||||||||||||||||
Sales
commissions and discounts retained by affiliates |
$ | | 0.00 | % | $ | | 0.00 | % | |||||||||||
Organizational and offering expenses |
$ | 137,985 | 1.98 | % | $ | 148,861 | 2.17 | % | |||||||||||
Investor
relations |
$ | | 0.00 | % | $ | | 0.00 | % | |||||||||||
Reserves
|
$ | 50,000 | 0.72 | % | $ | 50,000 | 0.73 | % | |||||||||||
Offering
proceeds available for investment |
$ | 6,819,515 | 98.02 | % | $ | 6,721,639 | 97.83 | % | |||||||||||
Total
proceeds invested as of 12/31/11 |
$ | 7,834,800 | 112.61 | % | $ | 10,652,086 | 155.04 | % | |||||||||||
Percent
leverage (mortgage financing divided by total acquisition cost) |
0.00 | % | 0.00 | % | |||||||||||||||
Date offering
began |
12-Feb-08 |
15-Apr-09 |
|||||||||||||||||
Length of
offering (in months) |
13 |
15 |
|||||||||||||||||
Months to
invest 90% of amount available for investment |
10 |
13 |
|||||||||||||||||
Prior performance is not indicative of future performance.
December 31, 2011
(Unaudited)
Program Name |
SQN I |
SQN II |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Date offering
commenced |
12-Feb-08 | 15-Apr-09 | ||||||||
Dollar amount
raised |
$ | 6,957,500 | $ | 6,870,500 | ||||||
Amount paid to
SQN Capital Management, LLC and affiliates: |
||||||||||
Underwriting
fees |
$ | | $ | | ||||||
Organizational
and offering expenses |
$ | 137,985 | $ | 148,861 | ||||||
Other
|
$ | | $ | | ||||||
Dollar amount
of cash generated from operations before deducting payments to sponsor |
$ | 2,358,894 | $ | 2,788,411 | ||||||
Amount paid to
sponsor from operations: |
||||||||||
Management
fees |
$ | 976,507 | $ | 976,000 | ||||||
Acquisition
fees |
$ | | $ | | ||||||
Debt placement
fees |
$ | | $ | | ||||||
Remarketing
fees |
$ | | $ | | ||||||
Administrative
expense reimbursements |
$ | | $ | | ||||||
Other fees
|
$ | | $ | |
Prior performance is not indicative of future performance.
December 31, 2011
(Unaudited)
Prior performance is not indicative of future performance.
December 31, 2011
(Unaudited)
SQN I |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended December 31, |
||||||||||||||||
2011 |
2010 |
2009 |
||||||||||||||
Revenue
|
$ | 123,907 | $ | 352,034 | $ | 458,103 | ||||||||||
Profit on
sale of assets |
133,504 | 96,679 | | |||||||||||||
Gross revenue
|
$ | 257,411 | $ | 448,713 | $ | 458,103 | ||||||||||
Less: |
||||||||||||||||
Management
fees Manager |
211,725 | 211,725 | 234,436 | |||||||||||||
Professional
fees |
67,619 | 59,865 | 76,555 | |||||||||||||
Fund
administration expense |
15,127 | 18,938 | 21,000 | |||||||||||||
Depreciation
|
2,720 | 74,095 | 50,644 | |||||||||||||
Other
expenses |
1,752 | 3,691 | 4,120 | |||||||||||||
Foreign
currency transaction loss (gain) |
(15,724 | ) | (100,237 | ) | 100,511 | |||||||||||
Net income
(loss) |
$ | (25,808 | ) | $ | 180,636 | $ | (29,163 | ) | ||||||||
Net income
(loss) allocable to investors |
$ | (25,550 | ) | $ | 178,830 | $ | (28,871 | ) | ||||||||
Taxable
income (loss) |
||||||||||||||||
from operations |
$ | (70,732 | ) | $ | 161,612 | $ | (19 | ) | ||||||||
from gain (loss) on sale |
$ | 126,870 | $ | (27,385 | ) | $ | | |||||||||
Cash
generated from operations |
$ | 300,995 | $ | 510,866 | $ | 547,158 | ||||||||||
Cash
generated from sales |
493,002 | 518,977 | | |||||||||||||
Cash
generated from refinancing |
| | | |||||||||||||
Cash
generated from operations, sales and refinancing |
$ | 793,997 | $ | 1,029,843 | $ | 547,158 | ||||||||||
Less: |
||||||||||||||||
cash distributions to investors from operations, sales, and refinancing |
976,018 | 418,337 | 307,936 | |||||||||||||
cash distributions to Investment Manager from operations, sales and refinancing |
| | | |||||||||||||
Cash
generated from operations, sales and refinancing |
$ | (182,021 | ) | $ | 611,506 | $ | 239,222 | |||||||||
Tax and
Distribution Data per $1,000 Invested |
||||||||||||||||
Federal
income tax results: |
||||||||||||||||
Taxable
income (loss): |
||||||||||||||||
from operations |
$ | (0.01 | ) | $ | 0.02 | $ | 0.00 | |||||||||
from gain on sales |
$ | 0.02 | $ | 0.00 | $ | | ||||||||||
Cash
distributions to investors source |
||||||||||||||||
Investment income |
$ | 0.04 | $ | 0.06 | $ | 0.05 | ||||||||||
Return of capital |
0.10 | | | |||||||||||||
Total
|
$ | 0.14 | $ | 0.06 | $ | 0.05 | ||||||||||
Cash
distributions to investors source |
||||||||||||||||
Operations (current and/or prior periods) |
$ | 0.04 | $ | 0.06 | $ | 0.05 | ||||||||||
Sales |
0.10 | | | |||||||||||||
Refinancing |
| | | |||||||||||||
Total
|
$ | 0.14 | $ | 0.06 | $ | 0.05 | ||||||||||
Amount
remaining invested in fund assets at December 31, 2011 |
65.6 | % |
Prior performance is not indicative of future performance.
December 31, 2011
(Unaudited)
SQN II |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Years Ended December 31, |
Period from April 15, 2009 (Commencement of Operations) through December 31, |
|||||||||||||||
2011 |
2010 |
2009 |
||||||||||||||
Revenue
|
$ | 772,174 | $ | 559,123 | $ | 86,261 | ||||||||||
Profit on
sale of assets |
692,700 | | | |||||||||||||
Gross revenue
|
$ | 1,464,874 | $ | 559,123 | $ | 86,261 | ||||||||||
Less: |
||||||||||||||||
Impairment
loss |
| 168,999 | | |||||||||||||
Management
fees Manager |
360,000 | 360,000 | 256,000 | |||||||||||||
Professional
fees |
67,197 | 124,860 | 15,000 | |||||||||||||
Fund
administration expense |
17,281 | 30,938 | 21,250 | |||||||||||||
Depreciation
|
109,295 | 87,698 | | |||||||||||||
Other
expenses |
23,317 | 1,877 | 1,071 | |||||||||||||
Foreign
currently transaction loss (gain) |
65,517 | 142,111 | (10,284 | ) | ||||||||||||
Net income
(loss) |
$ | 822,267 | $ | (357,360 | ) | $ | (196,776 | ) | ||||||||
Net income
(loss) allocable to investors |
$ | 814,044 | $ | (353,786 | ) | $ | (194,808 | ) | ||||||||
Taxable
income(loss): |
||||||||||||||||
from operations |
$ | 940,673 | $ | 84,089 | $ | (118,155 | ) | |||||||||
from gain (loss) on sale |
$ | 210,508 | $ | | $ | | ||||||||||
Cash
generated from operations |
$ | 910,290 | $ | 1,153,270 | $ | (251,149 | ) | |||||||||
Cash
generated from sales |
2,927,684 | | | |||||||||||||
Cash
generated from refinancing |
| | | |||||||||||||
Cash
generated from operations, sales and refinancing |
$ | 3,837,974 | $ | 1,153,270 | $ | (251,149 | ) | |||||||||
Less: |
||||||||||||||||
cash distributions to investors from operations, sales and refinancing |
410,731 | 322,174 | 35,277 | |||||||||||||
cash distributions to Investment Manager from operations, sales and refinancing |
| | | |||||||||||||
Cash
generated (deficiency) from operations, sales and refinancing |
$ | 3,427,243 | $ | 831,096 | $ | (286,426 | ) | |||||||||
Tax and
Distribution Data per $1,000 Invested |
||||||||||||||||
Federal
income tax results |
||||||||||||||||
Taxable
income (loss): |
||||||||||||||||
from operations |
$ | 0.14 | $ | 0.01 | $ | (0.06 | ) | |||||||||
from gain on sales |
$ | 0.03 | $ | | $ | | ||||||||||
Cash
distributions to investors source |
||||||||||||||||
Investment income |
$ | 0.06 | $ | 0.05 | $ | 0.02 | ||||||||||
Return of capital |
| | | |||||||||||||
Total
|
$ | 0.06 | $ | 0.05 | $ | 0.02 | ||||||||||
Cash
distributions to investors source |
||||||||||||||||
Operations (current and/or prior periods) |
$ | 0.06 | $ | 0.05 | $ | 0.02 | ||||||||||
Sales |
| | | |||||||||||||
Refinancing |
| | | |||||||||||||
Total
|
$ | 0.06 | $ | 0.05 | $ | 0.02 | ||||||||||
Amount
remaining invested in fund assets at December 31, 2011 |
77.7 | % |
Prior performance is not indicative of future performance.
December 31, 2011
(Unaudited)
Prior performance is not indicative of future performance.
December 31, 2011
(Unaudited)
SQN I |
||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Type of Asset |
Date Acquired |
Date Sold |
Total Acquisition Cost |
Cash Proceeds |
Profit (Loss) |
Investment Term (Months) |
||||||||||||||||||||||
IT
Infrastructure |
2008 | 2008 | $ | 14,276 | $ | 12,141 | $ | (2,135 | ) | 3 | ||||||||||||||||||
IT
Infrastructure |
2008 | 2008 | $ | 103,505 | $ | 107,217 | $ | 3,712 | 5 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2008 | $ | 175,269 | $ | 178,321 | $ | 3,052 | 5 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2008 | $ | 8,438 | $ | 9,832 | $ | 1,394 | 6 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2008 | $ | 6,233 | $ | 6,976 | $ | 743 | 9 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2008 | $ | 3,064 | $ | 4,658 | $ | 1,594 | 24 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 30,137 | $ | 52,883 | $ | 22,746 | 24 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 41,208 | $ | 81,553 | $ | 40,345 | 26 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 4,729 | $ | 6,608 | $ | 1,879 | 27 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 19,470 | $ | 37,313 | $ | 17,843 | 29 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 1,044 | $ | 3,841 | $ | 2,797 | 29 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 8,559 | $ | 14,759 | $ | 6,200 | 29 | |||||||||||||||||||
Industrial
Equipment |
2008 | 2010 | $ | 3,435 | $ | 3,586 | $ | 151 | 30 | |||||||||||||||||||
Modular
Accommodations |
2008 | 2010 | $ | 275,066 | $ | 429,175 | $ | 154,109 | 31 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 11,890 | $ | 46,940 | $ | 35,050 | 33 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 15,223 | $ | 27,924 | $ | 12,701 | 33 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 33,834 | $ | 38,485 | $ | 4,651 | 33 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 12,081 | $ | 18,741 | $ | 6,660 | 33 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 4,030 | $ | | $ | (4,030 | ) | 35 | ||||||||||||||||||
IT
Infrastructure |
2008 | 2010 | $ | 1,627 | $ | | $ | (1,627 | ) | 35 | ||||||||||||||||||
Modular
Accommodations |
2008 | 2010 | $ | 161,639 | $ | 231,484 | $ | 69,845 | 27 | |||||||||||||||||||
Modular
Accommodations |
2008 | 2010 | $ | 215,505 | $ | 299,594 | $ | 84,089 | 11 | |||||||||||||||||||
Retail
Equipment |
2010 | 2011 | $ | 85,706 | $ | 124,970 | $ | 39,264 | 29 | |||||||||||||||||||
Furniture and
Fixtures |
2008 | 2011 | $ | 152,267 | $ | 210,320 | $ | 58,053 | 35 | |||||||||||||||||||
Medical
Equipment |
2008 | 2011 | $ | 82,381 | $ | 122,765 | $ | 40,384 | 29 | |||||||||||||||||||
IT
Infrastructure |
2009 | 2011 | $ | 550,045 | $ | 728,386 | $ | 178,341 | 38 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2011 | $ | 481,093 | $ | 570,680 | $ | 89,587 | 37 | |||||||||||||||||||
IT
Infrastructure |
2008 | 2011 | $ | 18,987 | $ | 32,666 | $ | 13,679 | 42 | |||||||||||||||||||
Medical
Equipment |
2008 | 2011 | $ | 174,212 | $ | 233,843 | $ | 59,631 | 39 |
Prior performance is not indicative of future performance.
December 31, 2011
(Unaudited)
SQN II |
||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Type of Asset |
Date Acquired |
Date Sold |
Total Acquisition Cost |
Cash Proceeds |
Profit (Loss) |
Investment Term (Months) |
||||||||||||||||||||||
Modular
Accommodations |
2010 | 2011 | $ | 1,077,527 | $ | 1,497,905 | $ | 420,378 | 11 | |||||||||||||||||||
Modular
Accommodations |
2010 | 2011 | $ | 1,301,358 | $ | 2,127,265 | $ | 825,907 | 13 |
Prior performance is not indicative of future performance.
SQN AIF IV, L.P.
INSTRUCTIONS FOR COMPLETING THE SUBSCRIPTION AGREEMENT
A. INVESTMENT |
Complete all of the information requested in section 1. |
|||||
Each unit costs $1,000. |
||||||
The minimum initial investment is 5 units ($5,000). |
||||||
B. REGISTRATION INFORMATION |
Complete all of the information requested in sections 2(a) through (c). If you are not a United States citizen, please
specify the country of which you are a citizen. |
|||||
Complete section 3(c) only if you are investing in us as an IRA, ERISA Plan, Keogh plan or trust. |
||||||
C.
FORM OF OWNERSHIP |
Mark only one box in section 2. |
|||||
Consult your registered representative or investment advisor with any questions about designating the form of
ownership. |
||||||
D.
DIRECT DEPOSIT AND ALTERNATIVE PAYEES ELECTION |
All subscribers except IRAs should complete section 6 if you wish to have our distributions to you sent to an address
different from the address shown in section 3(a), and you should complete that section if you want direct deposit. |
|||||
E. SIGNATURES AND INITIALS |
All investors must sign and initial the various items in section 8 to the extent applicable as indicated in the form. The
signature of an authorized partner, manager or officer is required for a partnership, limited liability company or corporate
investor. |
|||||
F. SUBSCRIPTION CHECKS, MAILING INSTRUCTIONS AND CONFIRMATIONS |
If your registered representative or investment advisor notifies you that the sale of 1,200 units (or 10,000 units in the
case of residents of Pennsylvania) has not been completed, checks should be made payable to Signature Bank as Escrow Agent for SQN AIF IV,
L.P. Otherwise, checks should be made payable to SQN AIF IV, L.P. Subscription Account. Pending receipt of subscriptions
for 1,200 units, the Selling Agent and the General Partner shall (i) deposit all subscription proceeds with the Escrow Agent no later than 12:00 p.m.
ET on the business day after receipt and (ii) deliver to the Escrow Agent a copy of the Subscription Agreement. Wire transfer instructions are
available on request. |
|||||
Mailing: |
||||||
IRAs, ERISA Plans and Keogh plan investors should mail all of their subscription documents with their check and transfer
instructions to their designated custodian. |
||||||
All other investors should mail all their subscription documents with their check and transfer instructions to their
investment advisor, registered representative or the General Partner at the address below: |
||||||
SQN AIF IV GP,
LLC |
||||||
110 William
Street, 26th Floor |
||||||
New York, New
York 10038 |
||||||
Telephone:
(800) 258-6610 |
||||||
Fax: (877)
214-1475 |
Mail your signed Subscription Agreement as set forth above. We will send you a confirmation letter for your records after
your subscription to purchase units in us has been approved by our general partner and we will return a copy of the signed Subscription Agreement to
you for your records. |
|
No offer to sell our units to you may be made except by means of this Prospectus. |
|
You should not rely on any oral statements made by any person, or on any written information other than this Prospectus or supplements to this Prospectus in deciding whether or not to purchase our units. |
|
An investment in our units involves certain risks including, without limitation, the matters set forth in this Prospectus under the captions Risk Factors, Conflicts of Interest and Fiduciary Responsibilities, Investment Objectives and Strategies, and Material U.S. Federal Income Tax Consequences. |
|
The representations you make in the Investor Suitability Requirements General Subscriber Representations section are not a waiver of any of your rights under the Delaware Revised Uniform Limited Partnership Act or applicable federal and state securities laws. |
|
Our units are subject to substantial restrictions on transferability. |
|
There will be no public market for our units. |
|
It may not be possible for you to readily liquidate your units, if at all, even in the event of an emergency. |
|
Any transfer of units is subject to our approval and must comply with the terms of Article XIII of our partnership agreement. |
|
Alabama Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and similar equipment leasing programs may not exceed 10% of your liquid net worth. |
|
California Investors. You must have either (i) a liquid net worth of not less than $100,000 and a gross annual income of not less than $75,000, or (ii) a liquid net worth of $250,000, in both instances exclusive of your home, home furnishings and automobiles. |
|
Connecticut Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Florida Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Illinois Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Iowa Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and our affiliates may not exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. |
|
Kansas Investors. Under suitability guidelines of the Office of the Kansas Securities Commissioner, you are cautioned to carefully evaluate whether your aggregate investment in us and other similar investments should exceed 10% of your liquid net worth. Liquid net worth is that portion of your total net worth, or total assets minus total liabilities, that is comprised of cash, cash equivalents and readily marketable securities. Readily marketable securities may include investments in an IRA or other retirement plan that can be liquidated within a short time, less any income tax or other penalties that may apply for early distribution. |
|
Kentucky Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us may not exceed 10% of your net worth. |
|
Maine Investors. It is recommended by the Maine Office of Securities that Maine investors not invest, in the aggregate, more than 10% of their liquid net worth in this and similar direct participation investments. Liquid net worth is defined as that portion of net worth that consists of cash, cash equivalents, and readily marketable securities. |
|
Massachusetts Investors. Under suitability guidelines of the Massachusetts Securities Division, you are cautioned to carefully evaluate whether your aggregate investment in us and other similar investments should exceed 10% of your liquid net worth. Liquid net worth is that portion of your total net worth, or total assets minus total liabilities, that is comprised of cash, cash equivalents and readily marketable securities. Readily marketable securities may include investments in an IRA or other retirement plan that can be liquidated within a short time, less any income tax or other penalties that may apply for early distribution. |
|
Michigan Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and our Affiliated Programs may not exceed 10% of your liquid net worth. |
|
Missouri Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
New Jersey Investors. You must have (i) an annual gross income of at least $60,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $60,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $225,000 in excess of your invested capital. It is recommended by the New Jersey Office of the Attorney General that New Jersey investors not invest, in the aggregate, more than 10% of their liquid net worth in this and similar direct participation investments. Liquid net worth is defined as that portion of net worth which consists of cash, cash equivalents and readily marketable securities. |
|
New Mexico Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and in Affiliated Programs may not exceed 10% of your liquid net worth, calculated exclusive of your home, home furnishings and automobiles. |
|
New York Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
North Carolina Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
Ohio Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us and in Affiliated Programs may not exceed 10% of your liquid net worth, calculated exclusive of your home, home furnishings and automobiles. |
|
Oklahoma Investors. You must meet the general investor suitability requirements set forth above. In addition, your investment in us may not exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. |
|
Oregon Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
Pennsylvania Investors. Because the minimum offering amount is less than $20,000,000, which represents 10% of the maximum offering amount, you are cautioned to carefully evaluate the programs ability to fully accomplish its stated objectives and to inquire as to the current dollar volume of program subscriptions. In addition, subscription proceeds of Pennsylvania investors will be held in an escrow account until we receive and accept subscriptions for at least $10,000,000 in offering proceeds. We must offer you the opportunity to rescind your subscription if we have not received subscriptions for $10,000,000 within 120 days of the date the escrow agent receives your subscription proceeds. We must repeat this offer to you every 120 days during the Offering Period until we have received and accepted subscriptions for $10,000,000. |
|
Rhode Island Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
South Carolina Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Texas Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
|
Tennessee Investors. You must have (i) a minimum annual gross income of $100,000; and (ii) a minimum net worth of $100,000; or (iii) a minimum net worth of $500,000, calculated exclusive of home, home furnishings and automobile. In addition, your investment in us must not exceed 10% of your liquid net worth. |
|
Vermont Investors. You must meet the general investor suitability requirements set forth above. In addition, your maximum investment in us and our affiliates may not exceed 10% of your net worth. |
|
Virginia Investors. You must have (i) an annual gross income of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 in excess of your invested capital; or (ii) a net worth (determined with the same exclusions) of at least $150,000. |
|
Washington Investors. You must meet the general investor suitability requirements set forth above. In addition, in no event may you invest more than 10% of your net worth, calculated exclusive of home, home furnishings and automobiles. |
SQN AIF IV, L.P.
A Delaware Limited Partnership
Please complete electronically for expedited processing
1.
Initial Investment: |
|||||||||||||||
($5,000
minimum) |
Initial Subscription Amount: $___________________________________ |
||||||||||||||
(Please
complete the blanks) |
No. of Initial Units ($1,000 per Unit): ____________________________ |
||||||||||||||
2.
Form of Ownership: |
|||||||||||||||
(check only
one box) |
o Individual |
o Corporation |
o Joint Tenants |
||||||||||||
o Limited Liability Co. |
o Community Property |
o ERISA Plan |
|||||||||||||
o Tenants in Common |
o Trust |
o Custodial Agent |
|||||||||||||
o IRA or Keogh |
o Partnership |
o Other Benefit Plan Investor |
|||||||||||||
o Other ____________ |
|||||||||||||||
3.
Registration Information: (Please type and complete (a) and (b) if applicable) |
|||||||||||||||
(a)
Individual Subscriber(s) Information |
Investor Name |
|||||||||||||||
Social
Security No. |
Date of
Birth |
||||||||||||||
Telephone No. |
|||||||||||||||
Address |
|||||||||||||||
City |
State |
Zip
Code |
|||||||||||||
Citizenship:
(check one) |
o U.S. Citizen |
o U.S. Resident Alien |
|||||||||||||
o Non-Resident of U.S. (Resident Country: ______________________________) |
|||||||||||||||
Co-Investor Name |
|||||||||||||||
Social
Security No. |
Date of
Birth |
||||||||||||||
Telephone No. |
|||||||||||||||
Address |
|||||||||||||||
City |
State |
Zip
Code |
|||||||||||||
Citizenship:
(check one) |
o U.S. Citizen |
o U.S. Resident Alien |
|||||||||||||
o Non-Resident of U.S. (Resident Country: _____________________________) |
|||||||||||||||
(b)
Entity Subscriber Information (Including Trusts): |
|||||||||||||||
Entity
Name |
|||||||||||||||
Tax
I.D. No. |
Formation Date |
||||||||||||||
Jurisdiction of Formation |
State
File No. |
||||||||||||||
Address |
|||||||||||||||
City |
State |
Zip
Code |
|||||||||||||
Authorized Person/Trustee(s) |
Telephone No. |
(c)
Custodial Accounts: (If applicable) |
|||||||||||||||
Custodian Name |
Custodian Acct. No. |
||||||||||||||
Tax
I.D. No. |
|||||||||||||||
Address |
|||||||||||||||
City |
State |
Zip
Code |
|||||||||||||
Contact
Name |
Telephone No. |
||||||||||||||
4.
Broker-Dealer or Investment Advisor: |
|||||||||||||||
Firm
Name |
CRD
No. |
||||||||||||||
Firm
Representative |
CRD
No. |
5.
Disclosure Authorization: |
|||||||||||||||
(Check One) |
|||||||||||||||
o SQN Capital Management, LLC is authorized and instructed to provide the above named Broker-Dealer,
including its representatives and agents, with all information regarding my/our investment, including without limitation all statements, confirmations,
notices and annual tax information on Schedule K-1. |
|||||||||||||||
o Do not disclose information regarding my investment to anyone without my prior written
instruction. |
|||||||||||||||
6.
Direct Deposit and Alternative Payee Elections: |
Check
if: |
o You want your distributions sent to your custodial account indicated in Section 3(c). |
|||||
o You want your distributions sent to you by direct deposit, or to a different Payee and Address and complete
the following section: |
Payee
Name |
|||||||||||||||
ABA
(Routing) No. |
Account
No. |
||||||||||||||
Account
Type |
Account
Holder |
||||||||||||||
Address |
|||||||||||||||
City |
State |
Zip
Code |
|||||||||||||
7.
Supporting Documentation |
Note to
Corporations: |
Please attach a copy of the corporate resolution to purchase units and articles of incorporation and by-laws, as amended. |
|||||
Note to
Partnerships: |
Please attach a copy of the current partnership agreement, as amended. |
|||||
Note to
Trusts: |
Please attach a copy of the instrument creating the trust, as amended. |
|||||
Note to
Estates: |
Please attach a copy of the will and letters testamentary no more than 60 days old. |
|||||
Note to
LLCs: |
Please attach a copy of the limited liability company resolution to purchase units and articles of organization and operating agreement, as
amended. |
(Initials____)
(Initials____) |
you are not
subject to backup withholding because (a) you are exempt from backup withholding under §3406(g)(1) of the Internal Revenue Code and the related
regulations, or (b) you have not been notified by the Internal Revenue Service (IRS) that you are subject to backup withholding as a result of failure
to report all interest or dividends, or (c) the IRS has notified you that you are no longer subject to backup withholding; |
||||||
OR |
|||||||
(Initials____)
(Initials____) |
the undersigned
is subject to backup withholding. |
8. Initials and Signatures: |
|||||||
The
undersigned confirms that he/she/it: |
|||||||
(Initials____)
(Initials____) |
Received the
Prospectus at least 5 business days prior and has read this Subscription Agreement. |
||||||
(Initials____)
(Initials____) |
Has received a
copy of the disclosures contained in the section entitled Investor Suitability Requirements hereof. |
||||||
(Initials____)
(Initials____) |
Acknowledges that
an investment in us is not liquid. |
||||||
(Initials____)
(Initials____) |
Declares that, to
the best of his/her/its knowledge, all applicable information in this Subscription Agreement is accurate and may be relied on by our general
partner. |
||||||
(Initials____)
(Initials____) |
Appoints our
general partner as his/her/its attorney-in-fact as described in paragraph 2 under the section entitled Investor Suitability Requirements
below. |
||||||
(Initials____)
(Initials____) |
Meets the minimum
income and net worth standards set forth in the Prospectus AND if he/she/it resides in a state for which more stringent suitability standards are
required, as described in the Prospectus, he/she/it meets such applicable standards. |
||||||
(Initials____)
(Initials____) |
Is purchasing the
units for his/her/its own account and not with a view to distribution. |
||||||
(Initials____)
(Initials____) |
Will inform us of
any change in residence. |
Your Subscription cannot be accepted without your initials and signature(s) |
|||||||||||||||
Sign Here: X |
|||||||||||||||
Authorized Signature |
Date |
||||||||||||||
Sign Here: X |
|||||||||||||||
Authorized Signature |
Date |
||||||||||||||
(If entity: Custodian/Trustee/Officer/Partner) |
|||||||||||||||
Sign Here: X |
|||||||||||||||
Authorized Signature |
Date |
||||||||||||||
Name |
|||||||||||||||
Title |
|||||||||||||||
9. Investment Check and Subscription Agreement: |
|||||||||||||||
Return the completed Subscription Agreement, your Taxpayer Identification Certification, with a check for your initial subscription amount as
set forth in Section 1 hereof made payable as indicated in Paragraph F of the Instructions for Completing the Subscription Agreement to your registered
representative or investment advisor. |
|||||||||||||||
Acceptance of Subscription Agreement by: |
|||||||||||||||
SQN AIF IV, L.P. By: SQN AIF IV GP, LLC, General Partner |
|||||||||||||||
By: |
|||||||||||||||
Authorized Signature |
Date |
1. |
Subscription for Units. |
|
I, by signing my name in Section 8 hereof: |
(a) |
subscribe for the number of units and dollar subscription amount set forth in Section 1 hereof; |
(b) |
agree to become a limited partner of SQN AIF IV, L.P. (SQN IV) on the acceptance of my subscription by SQN AIF IV GP, LLC, the general partner of SQN IV (the General Partner); and |
(c) |
adopt and agree to be bound by each and every provision of SQN IVs partnership agreement (the Partnership Agreement) and my Subscription Agreement. |
|
I am tendering good funds with my Subscription Agreement in full payment for the units I have subscribed for (if I am required to do so under Section 1 hereof) at the per unit subscription price applicable to me. |
2. |
Appointment of the General Partner as the Subscribers Attorney-in-Fact. |
|
By signing my name in Section 5 hereof (and effective on my admission as a limited partner of SQN IV), I hereby make, constitute and appoint the General Partner, each authorized officer of the General Partner and each person who may thereafter become a substitute general partner of SQN IV, with full power of substitution, as my true and lawful attorney-in-fact, in my name, place and stead, to the full extent and for the purposes and duration set forth in Article XVIII of the Partnership Agreement (all of the terms of which are hereby incorporated in this Subscription Agreement by this reference). |
|
Such purposes include, without limitation, the power to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and publish any of the following: |
(a) |
the Partnership Agreement, certificates of limited partnership and any amendment thereof, including amendments reflecting the admission or substitution of any general partner or limited partner (or their capital contributions) and any other document, certificate or instrument required to reflect the admission of any partner (including any substitute general partner and any substitute limited partner); |
(b) |
any other document, certificate or instrument required to reflect any action of the partners provided for in the Partnership Agreement (whether or not I voted in favor of or otherwise consented to the action); |
(c) |
any other document, certificate or instrument that may be required by any regulatory body or other agency or the applicable laws of the United States, any state or any other jurisdiction in which SQN IV is doing or intends to do business or that the General Partner deems advisable; |
(d) |
any certificate of dissolution or cancellation of the certificate of limited partnership that may be reasonably necessary to effect the termination of SQN IV; and |
(e) |
any instrument or papers required to continue or terminate the business of SQN IV under Section 12.5 or Article XIV of the Partnership Agreement; provided that no such attorney-in-fact shall take any action as attorney-in-fact for me if the action could in any way increase my liability beyond the liability expressly set forth in the Partnership Agreement or alter my rights under Article XI of the Partnership Agreement, unless (in either case) I have given a power of attorney to the attorney-in-fact expressly for that purpose. |
|
The foregoing appointment shall not in any way limit the authority of the General Partner as my attorney-in-fact under Article XVIII of the Partnership Agreement. The power of attorney hereby granted is coupled with an interest, is irrevocable and shall survive my death, incapacity, insolvency, dissolution or termination or my delivery of any assignment of all or any portion of my units. |
3. |
General Subscriber Representations. |
|
As a condition to my being admitted as a limited partner of SQN IV, I represent and warrant to the General Partner and SQN IV that I have reviewed all applicable investor suitability requirements with my financial adviser and, based on such review, further represent and warrant to the General Partner and SQN IV that I: |
(a) |
either: |
(i) |
have annual gross income of at least $70,000, plus a net worth of at least $70,000 (exclusive of my investment in SQN IV, home furnishings, automobiles and equity in my home), or a net worth of at least $250,000 (determined in the same manner); or |
(ii) |
meet any higher investor gross income and/or net worth standards applicable to residents of my State, as set forth in the Investor Suitability section of the Prospectus (which begins on page vi of the Prospectus); |
(b) |
if I am investing as an ERISA Plan, IRA, HR-10 (Keogh) plan or other benefit plan or trust or other Benefit Plan Investor, I have accurately been identified as such in Section 2(d) hereof and Section 3 hereof; |
(c) |
have been accurately identified in Section 2(b) hereof as either a U.S. Citizen or a non-U.S. Citizen; |
(d) |
I meet the suitability requirements that are applicable to investors that are resident in my state of residence; and |
(e) |
if I am an individual, I am not less than 21 years of age. |
|
If I am investing in a fiduciary or representative capacity, the investment is being made for one or more persons, entities or trusts, all of which meet the applicable suitability requirements described above. |
4. |
Additional Fiduciary and Entity Representations. |
|
If the person signing this Subscription Agreement is doing so on behalf of another person or entity who is the subscriber, including, without limitation, a corporation, a partnership, an IRA, an ERISA Plan, a Keogh plan, a trust or other Benefit Plan Investor, the signatory, by signing his/her/its name in Section 8 hereof, attests that: |
(a) |
he or she is duly authorized to: |
(i) |
execute and deliver this Subscription Agreement; and |
(ii) |
bind the Subscriber by signing this Subscription Agreement; and |
(b) |
this investment is an authorized investment for the Subscriber under applicable documents and/or agreements (articles of incorporation or corporate bylaws or action, partnership agreement, trust indenture, etc.) and applicable law. |
|
prospectuses; |
|
prospectus supplements; |
|
prospectus amendments; |
|
annual, quarterly and periodic reports; |
|
notices; and |
|
supplemental sales material (collectively Offering Materials). |
|
posting Offering Materials to SQN Capital Management, LLCs Internet website (http://www.sqncapital.com), whereby investors will be notified that such materials are available for viewing on the website by e-mail, physical mail or telephone; |
|
sending e-mails to investors containing Offering Materials (including portable document format (.pdf) of such material); and |
|
sending CD-ROMs to investors containing Offering Materials (including portable document format (.pdf) of such material). |
Signature |
Date |
E-mail Address (please print, and include domain extension [.com, .net, etc.])
PROSPECTUS
SEC
registration fee |
$ | 27,280 | ||||
FINRA filing
fee |
30,500 | |||||
State Blue
Sky registration fees (excluding legal fees) |
150,000 | |||||
Printing and
engraving expenses |
125,000 | |||||
Legal fees
(including Blue Sky) and expenses |
250,000 | |||||
Accounting
fees and expenses |
40,000 | |||||
Miscellaneous
|
3,360,000 | |||||
Total
|
$3,982,780 |
(a) |
Exhibits: |
Exhibit Number |
Description |
|||||
---|---|---|---|---|---|---|
1.1 |
Form
of Selling Agent Agreement with SQN Securities, LLC* * |
|||||
1.2 |
Form
of Selling Dealer Agreement* * |
|||||
3.1 |
Amended and Restated Certificate of Limited Partnership of SQN AIF IV, L.P.* * |
|||||
4.1 |
Amended and Restated Agreement of Limited Partnership of SQN AIF IV, L.P. (included as Appendix A to the prospectus)* |
|||||
4.2 |
Form
of Subscription Agreement (included as Appendix C to the prospectus)* |
|||||
5.1 |
Opinion of Troutman Sanders LLP* |
|||||
8.1 |
Opinion of Troutman Sanders LLP with respect to certain tax matters* |
|||||
10.1 |
Form
of Escrow Agreement* * |
|||||
10.2 |
Form
of Management, Origination and Servicing Agreement* * |
|||||
23.1 |
Consent of Holtz Rubenstein Reminick LLP SQN AIF IV GP, LLC* |
|||||
23.2 |
Consent of Holtz Rubenstein Reminick LLP SQN AIF IV, L.P.* |
|||||
23.3 |
Consent of Troutman Sanders LLP (included in Exhibit 5.1)* |
|||||
23.4 |
Consent of Troutman Sanders LLP (included in Exhibit 8.1)* |
|||||
24.1 |
Power of Attorney* * |
|||||
101 |
Interactive Data Files* |
* |
Filed herewith. |
** |
Previously filed as an exhibit to the Registration Statement filed on October 23, 2012. |
(b) |
Financial Statement Schedules |
(i) |
To include any prospectus required by section 10(a) (3) of the Securities Act of 1933; |
(ii) |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§ 230.424(b) of this chapter) if, in the aggregate, the |
changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; and |
(iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) |
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) |
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the registrant hereby undertakes that in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) |
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424 of this chapter); |
(ii) |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) |
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(5) |
That all post-effective amendments will comply with the applicable forms, rules and regulations of the Securities and Exchange Commission in effect at the time such post-effective amendments are filed. |
(b) |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
(c) |
The undersigned registrant hereby undertakes that: |
(1) |
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or |
497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(2) |
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
Acquisition of Assets by Programs
SQN I |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Lessee |
Type of Asset |
Year Acquired |
Acquisition Cost |
|||||||||||||
A.R.G.
Electrodesign Limited |
Industrial
Equipment |
2008 |
$ | 3,435 | ||||||||||||
Biwater
Treatment Limited |
IT
Infrastructure |
2008 |
$ | 14,276 | ||||||||||||
Biwater
Treatment Limited |
IT
Infrastructure |
2008 |
$ | 6,233 | ||||||||||||
Chandler
Chicco (UK) Limited |
IT
Infrastructure |
2008 |
$ | 8,559 | ||||||||||||
Crosby Capital
Partners Limited |
IT
Infrastructure |
2008 |
$ | 550,045 | ||||||||||||
Crosby Capital
Partners Limited |
Furniture and
Fixtures |
2008 |
$ | 152,267 | ||||||||||||
Crosby Capital
Partners Limited |
IT
Infrastructure |
2008 |
$ | 481,093 | ||||||||||||
Hartpury
College |
Modular
Accommodations |
2008 |
$ | 262,349 | ||||||||||||
Killik &
Co. |
IT
Infrastructure |
2008 |
$ | 19,470 | ||||||||||||
Killik &
Co. |
IT
Infrastructure |
2008 |
$ | 1,044 | ||||||||||||
Killik &
Co. |
IT
Infrastructure |
2008 |
$ | 4,729 | ||||||||||||
Killik &
Co. |
IT
Infrastructure |
2008 |
$ | 12,081 | ||||||||||||
Killik &
Co. |
IT
Infrastructure |
2008 |
$ | 33,834 | ||||||||||||
Killik &
Co. |
IT
Infrastructure |
2008 |
$ | 11,890 | ||||||||||||
Killik &
Co. |
IT
Infrastructure |
2008 |
$ | 15,223 | ||||||||||||
Littlewoods
Finance Company Limited |
IT
Infrastructure |
2008 |
$ | 103,505 | ||||||||||||
Littlewoods
Finance Company Limited |
IT
Infrastructure |
2008 |
$ | 175,269 | ||||||||||||
Nearby Stores
Limited |
IT
Infrastructure |
2008 |
$ | 4,030 | ||||||||||||
Nearby Stores
Limited |
IT
Infrastructure |
2008 |
$ | 1,627 | ||||||||||||
OMX Securities
Limited |
IT
Infrastructure |
2008 |
$ | 41,208 | ||||||||||||
OMX Securities
Limited |
IT
Infrastructure |
2008 |
$ | 30,137 | ||||||||||||
Pall Mall
Partners Limited |
IT
Infrastructure |
2008 |
$ | 18,987 | ||||||||||||
Pall Mall
Partners Limited |
IT
Infrastructure |
2008 |
$ | 3,064 | ||||||||||||
Princes
Limited |
IT
Infrastructure |
2008 |
$ | 8,438 | ||||||||||||
Robert Gordon
University |
Modular
Accommodations |
2008 |
$ | 275,066 | ||||||||||||
Whipps Cross
University Hospital NHS Trust |
Medical
Equipment |
2008 |
$ | 14,821 | ||||||||||||
Pro Buyer
Homes Inc. |
IT
Infrastructure |
2008 |
$ | 54,500 | ||||||||||||
Tidel
Engineering Inc. |
Retail
Equipment |
2008 |
$ | 85,706 | ||||||||||||
Hodge Hill
School |
Modular
Accommodations |
2008 |
$ | 161,639 | ||||||||||||
Vets4Pets
Limited |
Medical
Equipment |
2008 |
$ | 174,212 | ||||||||||||
WellPict
European |
Agricultural
Equipment |
2008 |
$ | 378,598 | ||||||||||||
Unilever
United States Inc. |
Agricultural
Equipment |
2008 |
$ | 3,514,820 | ||||||||||||
Velocity
Express Inc. |
IT
Infrastructure |
2009 |
$ | 46,993 | ||||||||||||
Vets4Pets
Limited |
Medical
Equipment |
2009 |
$ | 82,381 | ||||||||||||
Vets4Pets
Limited |
Medical
Equipment |
2009 |
$ | 81,645 | ||||||||||||
John
Cunningham and Associates |
IT
Infrastructure |
2010 |
$ | 301,355 | ||||||||||||
BOSHire
Limited |
Modular
Accommodations |
2010 |
$ | 215,505 | ||||||||||||
Vets4Pets
Limited |
Medical
Equipment |
2010 |
$ | 164,685 | ||||||||||||
MDO
Office |
Furniture and
Fixtures |
2010 |
$ | 75,000 | ||||||||||||
John
Cunningham and Associates |
Furniture and
Fixtures |
2011 |
$ | 95,778 | ||||||||||||
Beavis Morgan
LLC |
Furniture and
Fixtures |
2011 |
$ | 149,303 |
Prior performance is not indicative of future performance.
SQN II |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Lessee |
Type of Asset |
Year Acquired |
Acquisition Cost |
|||||||||||||
WellPict
European |
Agricultural |
2009 |
$ | 390,172 | ||||||||||||
Falcon Group
Administrative Service |
IT
Infrastructure |
2009 |
$ | 289,275 | ||||||||||||
WCUK-1 |
Furniture and
Fixtures |
2009 |
$ | 120,103 | ||||||||||||
Cabin
Centre |
Furniture and
Fixtures |
2009 |
$ | 600,861 | ||||||||||||
Arbis
LLP |
Modular
Accommodations |
2009 |
$ | 83,782 | ||||||||||||
Business
Environment Limited |
Furniture and
Fixtures |
2009 |
$ | 709,130 | ||||||||||||
BOSHire
Limited |
Modular
Accommodations |
2010 |
$ | 1,077,527 | ||||||||||||
Primary Plus
Limited |
Modular
Accommodations |
2010 |
$ | 1,330,687 | ||||||||||||
Sugal Idal
Industrias de Alimentacao |
Agricultural
Equipment |
2010 |
$ | 1,301,358 | ||||||||||||
Kitsons
Limited Liability Partnership |
IT
Infrastructure |
2010 |
$ | 504,737 | ||||||||||||
The Cobra
Group PLC |
IT
Infrastructure |
2010 |
$ | 291,400 | ||||||||||||
John
Cunningham and Associates |
IT
Infrastructure |
2010 |
$ | 191,576 | ||||||||||||
Business
Environment |
Furniture and
Fixtures |
2011 |
$ | 937,499 | ||||||||||||
Analysys Mason
Limited |
Furniture and
Fixtures |
2011 |
$ | 491,012 | ||||||||||||
Romney
Hydropower Company Limited |
Hydro Electric
Generation Plant |
2011 |
$ | 1,323,113 | ||||||||||||
Barfield,
Inc. |
Aircraft
Rotables |
2011 |
$ | 875,414 | ||||||||||||
National Jet
Systems Pty. Ltd. |
Aircraft
Rotables |
2011 |
$ | 134,440 |
SQN III |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Lessee |
Type of Asset |
Year Acquired |
Acquisition Cost |
|||||||||||||
The Rangers
Football Club P.L.C. |
Stadium Sound
System |
2011 |
$ | 1,044,640 | ||||||||||||
Eco Plastics Limited |
Bottle Recycling
and Extrusion Production Line |
2011 |
$ | 2,943,612 | ||||||||||||
Sceptre
Leisure PLC |
Entertainment and
Leisure |
2011 |
$ | 810,729 | ||||||||||||
Romney
Hydropower Company Limited |
Hydro Electric
Generation Plant |
2011 |
$ | 1,410,810 |
Prior performance is not indicative of future performance.
SQN AIF IV, L.P. |
||||||||||
By: |
SQN AIF IV GP, LLC, its General Partner |
|||||||||
/s/ JEREMIAH J. SILKOWSKI |
||||||||||
Name: Jeremiah J. Silkowski |
||||||||||
Title: President and Chief Executive Officer |
Signature |
Title(s) |
Date |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
/s/
JEREMIAH J. SILKOWSKI Jeremiah J. Silkowski |
President and Chief Executive Officer (Principal Executive Officer) |
December 5, 2012 |
|||||||||
/s/
DAVID C. WRIGHT David C. Wright |
Chief Financial Officer (Principal Financial and Accounting Officer) |
December 5, 2012 |
Exhibit Number |
Description |
|||||
---|---|---|---|---|---|---|
1.1 |
Form
of Selling Agent Agreement with SQN Securities, LLC* * |
|||||
1.2 |
Form
of Selling Dealer Agreement* * |
|||||
3.1 |
Amended and Restated Certificate of Limited Partnership of SQN AIF IV, L.P.* * |
|||||
4.1 |
Amended and Restated Agreement of Limited Partnership of SQN AIF IV, L.P. (included as Appendix A to the prospectus)* |
|||||
4.2 |
Form
of Subscription Agreement (included as Appendix C to the prospectus)* |
|||||
5.1 |
Opinion of Troutman Sanders LLP* |
|||||
8.1 |
Opinion of Troutman Sanders LLP with respect to certain tax matters* |
|||||
10.1 |
Form
of Escrow Agreement* * |
|||||
10.2 |
Form
of Management, Origination and Servicing Agreement* * |
|||||
23.1 |
Consent of Holtz Rubenstein Reminick LLP SQN AIF IV GP, LLC* |
|||||
23.2 |
Consent of Holtz Rubenstein Reminick LLP SQN AIF IV, L.P.* |
|||||
23.3 |
Consent of Troutman Sanders LLP (included in Exhibit 5.1)* |
|||||
23.4 |
Consent of Troutman Sanders LLP (included in Exhibit 8.1)* |
|||||
24.1 |
Power of Attorney* * |
|||||
101 |
Interactive Data Files* |
* |
Filed herewith. |
** |
Previously filed as an exhibit to the Registration Statement filed on October 23, 2012. |