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EXHIBIT 10.16
CSI INVESTMENT PARTNERS II, L.P.
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
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CSI INVESTMENT PARTNERS II, L.P.
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated November 15,
1997, among Credentials II G.P. L.P., a Delaware limited partnership (the
"General Partner"), and LINCOLNSHIRE EQUITY FUND, L.P., a Delaware limited
partnership ("Fund") and the parties named in Schedule B annexed to this
Agreement.
W I T N E S S E T H:
WHEREAS, the undersigned are executing this Amended and Restated Agreement
of Limited Partnership, as reformed (the "Agreement") for the purpose of
amending the provisions of a certain agreement of limited partnership,
originally dated as of November 6, 1996 (the "Original Agreement"), with respect
to a Delaware limited partnership formed under the name CSI Investment Partners
II, L.P., pursuant to the Original Agreement and a Certificate of Limited
Partnership filed with the Delaware Secretary of State on November 4, 1996 (as
amended, supplemented or restated from time to time, the "Certificate"), in
accordance with the provisions of the Delaware Revised Uniform Limited
Partnership Act as subsequently amended as described below; and
WHEREAS, the Original Agreement was amended and restated as of May 9, 1997
and that amendment included the addition of a new class of limited partners
denominated as Class B Limited Partners (now hereinafter defined as Withdrawing
Class B Limited Partners) and set forth relative rights of the Limited Partners
and Class B Partners with respect to the Partnership; and
WHEREAS, in June 1997, the parties to the Original Agreement, as amended
and restated, executed Amendment No. 1 to that agreement and the provisions of
that amendment are now set forth herein; and
WHEREAS, the parties to this Agreement executed an Amended and Restated
Agreement of Limited Partnership, dated October 7, 1997 in order to effectuate
their desire to reform this Agreement to reflect their true intentions and
agreement and their desire that this Agreement, as reformed and revised, not be
interpreted or deemed to constitute, a new contract or agreement or an amendment
of the contract existing prior to the date of the October 7, 1997 amendment and
restatement, but rather a reformation of the then existing agreement effected to
express the true intentions and agreements of the parties to this Agreement; and
WHEREAS, the parties to this Agreement now desire to amend the Agreement
to provide for the distribution to the Withdrawing Class B Limited Partners of
certain shares of Company Stock, the
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withdrawal of such Withdrawing Class B Limited Partners from the
Partnership and the other matters set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein made, and intending to be legally bound, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
The defined terms used in this Agreement, unless the context otherwise
requires, shall have the meanings specified in this Article I and in the
Preambles to this Agreement.
"Accountants" shall mean such firm of independent public accountants as
the General Partner may appoint, from time to time, as provided in Section
5.1.1(f).
"Act" shall mean the Delaware Revised Uniform Limited Partnership Act, as
the same may be amended from time to time, and any successor to such Act.
"Affiliate" shall have the meaning ascribed thereto by Rule 12b-2 under
the Securities Exchange Act of 1934, as amended, as in effect on the date
hereof.
"Agreement" shall mean this Amended and Resatated Agreement
of Limited Partnership.
"Capital Account" when used in respect to any Partner shall mean any
Capital Contribution or Contributions actually made by such Partner to the
Partnership, increased by the amount of all income and gains credited to the
Capital Account of such Partner pursuant to Section 4.4. hereof and decreased by
the sum of (a) all amounts of cash and assets distributed by the Partnership to
such Partner pursuant to Sections 4.1 and 4.2 and (b) the amount of all losses
charged to the Capital Account of such Partner pursuant to Section 4.3. This
provision and the other provisions of this Agreement relating to the maintenance
of Capital Accounts are intended to comply with Treasury Regulation Section
1.704-1(b) and shall be interpreted and applied in a manner consistent with such
Regulations. Therefore, notwithstanding anything contained herein to the
contrary and in further defining the method in which the Capital Accounts of the
Partners shall, in all respects, be maintained in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv), and any optional charges, credits or
adjustments to such Capital Accounts by the Partners which are provided for in
such Regulations, and are otherwise proper under state law and this Agreement,
and which are made by the Partnership and shall be made with any and all
correlative adjustments to the Capital Accounts of the Partners required by
Treasury Regulation Section 1.704-1(b)(2)(iv).
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"Capital Contributions" shall mean the capital contributions made in cash
to the Partnership pursuant to Article III by the Partners or, as the context
requires, by the General Partner and the Limited Partners or, when such term is
used in the singular, by any one Partner (or, in all cases, by the predecessor
holders of the Interests of such Partner or Partners), as set forth in Schedule
A hereto.
"Cash Flow" for a Fiscal Year shall mean the aggregate cash receipts of
the Partnership for such Fiscal Year from all sources (including sales of
assets, refinancing of debt and amounts released from reserves no longer deemed
necessary by the General Partner for the operation of the Partnership), other
than receipts in respect of Capital Contributions, reduced by (i) appropriations
for reserves which the General Partner may deem reasonably necessary for the
discharge of the liabilities and obligations of the Partnership and (ii)
repayment of the principal amount of Partnership debt.
"Certificate" shall mean the Certificate of Limited Partnership of the
Partnership, filed with the Delaware Secretary of State, as such Certificate may
be amended or restated from time to time.
"Code" shall mean the Internal Revenue Code of 1986 and any amendments or
additions thereto, and any predecessor or successor statute.
"Company" shall mean Credentials Services International, Inc., a Delaware
corporation, and its successors and assigns.
"Company Stock" shall mean the issued and outstanding common Stock, $.01
par value per share, of the Company.
"Consent" shall mean the consent of a Person, given as provided in Section
10.1 to do the act or thing for which the consent is solicited, or the act of
granting such consent, as the context may require. Reference to the Consent or
other action of a majority or specified percentage in Interest of the Limited
Partners shall mean, respectively, the Consent or other action of the Limited
Partners whose aggregate Profit Percentages in the Partnership as of the time
such Consent is given or required represent more than fifty percent (50%), or
not less than the specified percentage, as the case may be, of the aggregate
Profit Percentages of all Limited Partners.
"Corporate Fund G.P." shall mean Credentials G.P., L.P., a separate
limited partnership organized under Delaware law which is the general partner of
CIS Acquisition Partners, L.P.
"Designated Class A Stock" shall mean the aggregate of 35,910 shares of
common stock of the Company evidenced by stock certificate number 3 which is
issued to the Partnership.
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"Designated Withdrawing Class B Management Stock" shall mean the aggregate
of 3,990 shares of common stock of the Company.
"Fair Market Value" shall mean the value of Partnership assets, including
the Company Stock, as determined in good faith by the General Partner after
consultation with the Accountants.
"Fiscal Year" shall mean the fiscal year commencing on January 1 of each
year and ending on December 31 of the same year or, in the case of the first and
last fiscal years, the fraction thereof which commences on the date on which the
Partnership is formed under the Act (in the case of the first fiscal year) or
which ends on the date on which the winding up of the Partnership is completed
(in the case of the last fiscal year).
"Fund" shall have the meaning given to such term in the preamble of this
Agreement.
"Fund G.P." shall mean Lincolnshire Equity Partners, L.P., a Delaware
limited partnership, the general partner of Fund.
"Gain From Sale" shall mean any income or gain of the Partnership for
federal income tax purposes resulting from the sale of Company Stock or any
other transaction the proceeds of which, in accordance with generally accepted
accounting principles, are considered capital in nature, except that if the
value of the Company Stock or other asset as carried on the books of the
Partnership differs from its adjusted basis for federal income tax purposes at
the time of such transaction, such income or gain will be calculated with
reference to such value. In the event the value of any asset of the Partnership
as carried on the books of the Partnership is adjusted (except in the case of an
adjustment pursuant to section 734(b) or section 743(b) of the Code) to Fair
Market Value, the amount of such adjustment shall be taken into account at the
time of such adjustment as gain or loss from the disposition of such asset for
purposes of computing Gains from Sale or Losses from Sale.
"General Partner" shall mean Credentials II G.P. L.P., a Delaware limited
partnership, its successors or any other Person that becomes the successor
General Partner of the Partnership as provided herein, in all cases in such
Person's capacity as the General Partner of the Partnership.
"Incapacity" or "Incapacitated" shall mean, as to any Person, the
adjudication of bankruptcy, incompetence or insanity, or the death, dissolution
or termination (other than by merger or consolidation), as the case may be, of
such Person.
"Interest" shall mean the entire interest of a Partner in the Partnership
at any particular time, including the right of such Partner to any and all
benefits to which such Partner may be entitled as provided in this Agreement,
together with the
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obligations of such Partner to comply with all of the terms and provisions of
this Agreement.
"Limited Partners" shall mean, collectively, the Limited Partners (which,
as of this date, consists solely of the Fund) and the Withdrawing Class B
Partners (until their withdrawal from the Partnership in accordance with the
terms of this Agreement) and any other Person admitted to the Partnership as a
Limited Partner as provided in this Agreement, and any Substituted Limited
Partner, with respect to each such Person, in such Person's capacity as a
limited partner of the Partnership and provided such Person has not withdrawn or
been removed as a Limited Partner.
"Limited Partner" shall mean one of the Limited Partners.
"Liquidation Trustee" shall mean a Person selected by a majority in
Interest of the Limited Partners to act as a liquidating trustee as provided in
Section 7.5.1.
"LMI" shall mean Lincolnshire Management, Inc., a Delaware corporation,
and its successors and assigns.
"LMI Management Consulting Agreement" shall mean that certain Management
Agreement, dated September 30, 1994, as heretofore or hereafter amended, between
the Company and LMI.
"Losses From Sale" shall mean any net loss of the Partnership for federal
income tax purposes resulting from the sale of Company Stock or any other
transaction the proceeds of which, in accordance with generally accepted
accounting principles, are considered capital in nature, except that if the
value of the Company Stock or other asset as carried on the books of the
Partnership differs from its adjusted basis for federal income tax purposes at
the time of such transaction, such loss shall be calculated with reference to
such value. In the event the value of any asset of the Partnership as carried on
the books of the Partnership is adjusted (except in the case of an adjustment
pursuant to section 734(b) or section 743(b) of the Code) to Fair Market Value,
the amount of such adjustment shall be taken into account at the time of such
adjustment as gain or loss from the disposition of such asset for purposes of
computing Gains from Sale or Losses from Sale.
"Net Cash Flow" for any period shall be an amount equal to Cash Flow
reduced by Partnership Expenses.
"Net Gain From Sale" means, for each Fiscal Year or other period, the
excess of the sum of the Gains from Sale over the sum of the Losses from Sale
recognized by the Partnership during such period.
"Net Income or Net Loss" means for each fiscal year or other period, an
amount equal to the Partnership's taxable income or
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loss for such year or period, determined in accordance with Section 703(a) of
the Code with the following adjustments: (i) any income of the Partnership that
is exempt from Federal income tax and is not otherwise taken into account in
computing Net Income or Net Loss pursuant to this definition shall be added to
such taxable income or loss; and (ii) any expenditures of the Partnership
described in Section 705(a)(2)(B) of the Code or treated as Code Section
705(a)(2)(B) expenditures pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Net
Income or Net Loss pursuant to this definition shall be subtracted from such
taxable income or loss.
"Net Loss From Sale" means, for each fiscal year or other period, the
excess of the sum of the Losses From Sale over the sum of the Gains From Sale
recognized by the Partnership during such period.
"Net Sales Proceeds" shall mean the net proceeds from the sale or other
disposition of Partnership assets by the Partnership, after deduction for (i)
any expenses incurred with respect to such sale or other disposition and (ii)
reserves which the General Partner may deem reasonably necessary for the
discharge of the liabilities and obligations of the Partnership.
"Partner" shall mean one of the Partners.
"Partners" shall mean the General Partner and the Limited Partners,
collectively, unless otherwise indicated, until the withdrawal from the
Partnership of the Withdrawing Class B. Limited Partners whereupon the Partners
shall be the General Partner and the Limited Partners.
"Partnership" shall mean the limited partnership created by the Original
Agreement and the Certificate, as such limited Partnership may be constituted
from time to time hereafter.
"Partnership Expenses" shall mean the expenses of the Partnership
described in Section 5.6.
"Person" shall mean any individual, partnership, corporation,
unincorporated organization or association, trust or other entity.
"Regulations" shall mean the regulations issued by the United States
Internal Revenue Service under the Code.
"Restricted Stock Agreement" shall mean the agreement between and among
the Company, the Withdrawing Class B Limited Partner and the Company which
provides for the vesting of Company shares in accordance with the vesting
provisions provided for in this Agreement prior to its amendment and restatement
in November __, 1997. The Restricted Stock Agreement shall provide for the
escrow of shares prior to vesting and shall require the
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Withdrawing Class B Limited Partners to exercise recourse promissory notes
payable to the Partnership in consideration for the capital contribution
requirements for Withdrawing Class B Limited Partners under this Agreement.
"Sale of the Company" shall mean the sale, assignment or transfer of all
of the then outstanding capital stock of the Company, by way of merger,
consolidation or sale or exchange of shares of capital stock, or the sale or
exchange of all or substantially all of the assets and business of the Company,
for cash, securities or other property (or any combination thereof), to any one
or more parties who are not Affiliates of the Company or of the Partnership in
one or more series of related transactions.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Substituted Limited Partner" shall mean any Person admitted to the
Partnership as a Limited Partner pursuant to the provisions of Section 7.3.
"Transfer" shall mean any sale, exchange, transfer, pledge, mortgage,
hypothecation, grant of a security interest in, assignment or other disposition
by a Limited Partner of all or any fraction of its Interest in the Partnership
as permitted pursuant to the terms of Article VII.
"Unrecovered Capital" shall mean, with respect to each Limited Partner and
the General Partner, the excess of the Capital Contributions made with respect
to each such Partner's Interest over the aggregate distributions of Net Cash
Flow and Net Sales Proceeds pursuant to Sections 4.1(a) to such Partner on
account of such Partner's Interest.
"Withdrawing Class B Limited Partners" or "Withdrawing Class B Partners"
shall mean the Limited Partners who became Limited Partners pursuant to the May
9, 1997 amendment to this Agreement and who are withdrawing as Partners of the
Partnership and whose names are set forth on Schedule B hereto.
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ARTICLE II
REFORMATION OF AGREEMENT; ORGANIZATION
2.1 Reformation of Agreement. This Agreement was reformed so that
amendments made May 9, 1997 ("May 9 Writing") would give effect to agreements
reached on or about October 18, 1996 between the Company and certain of its
executive officers and key employees who are the persons named as Withdrawing
Class B Limited Partners herein. Each of the parties hereto hereby agrees and
confirms that as a result of a mutual mistake made by each of the parties to the
May 9 Writing, the provisions included in the May 9 Writing relating to the
Preferred Return set forth in Section 4.2 of the May 9 Writing did not correctly
reflect the mutual intention and agreement of the parties hereto. The parties
hereto hereby agree and confirm that because the above-mentioned provision in
the May 9 Writing did not reflect their mutual intentions and agreement that it
is not, and never was, part of the contract created among them. The parties
hereto have therefore reformed this Agreement to reflect their true intentions
and agreement and this Agreement, as reformed and revised, is not, and shall not
be interpreted or deemed to constitute, a new contract or agreement or an
amendment of the contract existing prior to the date of reformation, but rather
a reformation of the existing agreement effected to express the true intentions
and agreements of the parties hereto.
2.2 Continuation. The Partnership was formed pursuant to the Original
Agreement and the Certificate filed under the Act and the Partners desire to
continue the Partnership pursuant to the provisions of the Act. The rights and
liabilities of the Partners shall be as provided in the Act, except as herein
otherwise expressly provided to the extent permitted by the Act.
2.3 Name. The name of the Partnership is and shall continue to be "CSI
Investment Partners II, L.P." or such other name as the General Partner shall
determine on notice to the Partners.
2.4 Place of Business and Office; Registered Agent. The Partnership shall
maintain its principal place of business at c/o Lincolnshire Management, Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as the General
Partner shall determine. The registered agent of the Partnership is National
Registered Agents, Inc. Notice of any change of such principal office or
registered agent shall be given to all Partners on or before the date of any
such change.
2.5 Purpose. The principal purpose of the Partnership is to acquire, hold
and dispose of Company Stock to purchase Company Stock and any other form of
security, investment or instrument of the Company or any of its subsidiaries
selected by the General Partner, and to do every over thing incidental or
related to such activities or intended to enhance the value of the Partnership's
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assets as the General Partner may deem appropriate, subject to
the provisions of this Agreement.
2.6 Term. The term of the Partnership commenced on the filing of the
certificate with the Delaware Secretary of State in accordance with the Act and
shall continue in full force and effect until the earlier of (a) December 31,
2026, or (b) dissolution prior thereto pursuant to the provisions hereof.
2.7 Qualification in Other Jurisdictions. The General Partner shall cause
the Partnership to be qualified, formed, reformed or registered under foreign
limited partnership statutes or similar laws in any jurisdiction in which the
Partnership owns property or transacts business if such qualification,
formation, reformation or registration is required in order to protect the
limited liability of the Limited Partners or to permit the Partnership lawfully
to own property or transact business in such jurisdiction, and shall cause the
Partnership not to transact business in any such jurisdiction until it is so
qualified, formed, reformed or registered. The General Partner shall execute,
file and publish all such certificates, notices, statements or other instruments
necessary to permit the Partnership to conduct business as a limited partnership
in all jurisdictions where the Partnership elects to do business and to maintain
the limited liability of the Limited Partners.
ARTICLE III
PARTNERS AND CAPITAL
3.1 General Partner.
3.1.1 The General Partner is, and shall continue to be, Credentials
II G.P. L.P., a Delaware limited partnership, and/or any other Person who
becomes the successor General Partner as provided herein. The address and
Capital Contribution of the General Partner are set forth on Schedule A hereto.
3.1.2 The General Partner shall not be required to lend any funds or
to make Capital Contributions to the Partnership in addition to that set forth
on said Schedule A; provided, however, that if the General Partner or any
Affiliate of the General Partner lends funds to the Partnership, the terms of
such lending (i) must be as favorable to the Partnership as the terms that could
have been obtained at the time of such lending from a Person that was not the
General Partner or its Affiliate and (ii) may provide for (a) the grant of a
security interest in favor of the General Partner or such Affiliate in any or
all of the assets of the Partnership and (b) the repayment of such loans to the
General Partner or any such Affiliate prior to the satisfaction of any of the
Partnership's other obligations upon the dissolution, liquidation or winding up
of the Partnership.
3.2 Limited Partners.
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3.2.1 The names, addresses and Capital Contributions of the Limited
Partners are set forth on Schedule A hereto and all such Limited Partners are
admitted to the Partnership as limited partners. The Capital Contributions of
the Limited Partners have been received by the Partnership on or before the date
of this Agreement.
3.2.2 Other than the Capital Contributions received by the
Partnership from the Limited Partners on or before the date of this Agreement,
no Limited Partner shall be required to make any Capital Contributions or lend
any funds to the Partnership; provided, however, that if any Limited Partner or
any Affiliate of any Limited Partner lends funds to the Partnership, the terms
of such lending must be as favorable to the Partnership as the terms that could
have been obtained at the time of such lending from a Person that was not such
Limited Partner or an Affiliate of such Limited Partner; provided, however, that
any loan by any Limited Partner or Affiliate may be made on such terms and
subject to such security as are applicable to loans made by the General Partner
under Section 3.1.2 hereof.
3.3 Partnership Capital and Loans.
3.3.1 The General Partner's Contributions to the Partnership's
capital shall equal its Capital Contributions as set forth on Schedule A. Each
Limited Partner has contributed to the Partnership in cash one hundred percent
(100%) of the Capital Contribution to the Partnership's capital required to be
made by such Limited Partner as set forth on Schedule A.
3.3.2 No Partner shall be paid interest by the Partnership or by the
General Partner on, or in respect of, any Capital Contribution to the
Partnership or on such Limited Partner's Capital Account.
3.3.3 No Limited Partner shall have any right to demand the return
of its Capital Contribution other than upon dissolution of the Partnership
pursuant to Article VIII. The General Partner shall have no personal liability
to the Limited Partners for the return of their Capital Contributions or
repayment of any loans they may make to the Partnership, and shall be under no
obligation to distribute any amount to the Partners, unless, prior thereto, all
liabilities of the Partnership to Persons other than Partners shall have been
paid or, in the good faith determination of the General Partner, there shall
remain in the Partnership, following the distribution, property sufficient to
pay such liabilities.
3.4 Liability of Partners. Except as specifically set forth herein, no
Limited Partner shall have any personal liability whatever in his or its
capacity as a Limited Partner, whether to the Partnership, to any of the
Partners or to the creditors of the Partnership, for the debts, liabilities,
contracts or any other obligations of the Partnership or for any
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losses of the Partnership. Subject to the provisions of the Act, a Limited
Partner shall be liable only to make its Capital Contribution and shall not be
required to lend any other funds to the Partnership, or after its Capital
Contribution shall have been paid in full, to make any further Capital
Contribution to the Partnership or to repay to the Partnership, any Partner or
any creditor of the Partnership all or any fraction of any negative amount of
such Limited Partner's Capital Account.
3.5 Withdrawing Class B Limited Partners.
3.5.1 The names, addresses and contingent Common Stock ownership of
each of the Withdrawing Class B Limited Partners are set forth on Schedule B
hereto.
3.5.2 Capital Contributions. None of the Withdrawing Class B Limited
Partners has made any Capital Contributions to the Partnership and each
Withdrawing Class B Limited Partner's initial Capital Account in the Partnership
shall be zero.
3.6 Status of Limited Partners.
3.6.1 The Limited Partners shall not participate or take part in the
control of the Partnership business and shall have no right or authority to act
for, or bind, the Partnership.
3.6.2 Unless named in this Agreement, or unless admitted to the
Partnership as the General Partner, a Limited Partner or a Substituted Limited
Partner, as provided in this Agreement, no Person shall be considered a Partner.
The Partnership and the General Partner need deal only with Persons so named or
admitted as Partners. Neither the General Partner nor the Partnership shall be
required to deal with any other Person merely because of an assignment or
transfer of a Partnership Interest to such Person as a result of an assignment
thereof or a transfer thereof by reason of the Incapacity of a Partner. Any
distribution by the Partnership to the Person shown on the Partnership's books
and records as a Partner or to its legal representatives, or the permitted
assignee of the right to receive Partnership distributions as provided herein,
shall acquit the Partnership and the General Partner of any liability to any
other Person who may be interested in such distribution by reason of any other
assignment by the Partner or by reason of his Incapacity, or for any other
reason.
3.6.3 The General Partner also may be a Limited Partner of the
Partnership, upon acquiring the Interest of a Limited Partner. The General
Partner shall, in its capacity as a Limited Partner, be entitled to participate
in any Consent of the Limited Partners, and the Interest of the General Partner
as a Limited Partner shall be counted in any computations required in any such
Consent.
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ARTICLE IV
DISTRIBUTIONS; ALLOCATIONS
4.1 Distributions Prior to Termination and Dissolution of
the Partnership.
(a) Net Cash Flow and Net Sales Proceeds shall be distributed to the
Partners, 99% to the Limited Partners and 1% to the General Partner.
(b) All distributions of Net Cash Flow and Net Sales Proceeds made
within any Fiscal Year shall be subject to adjustment by reference to the
Partnership's financial statements for such Fiscal Year. If any additional
amount is to be distributed or paid by reason of such financial statements, such
additional amount shall be deemed distributed for such Fiscal Year; and if any
excess amount was distributed for such Fiscal Year as reflected by such
financial statements, the excess amount shall be taken into account in
determining subsequent distributions or payments.
4.2 Withdrawals of and Distributions to Withdrawing Class B Limited
Partners.
4.2.1 Effective upon execution of a Restricted Stock Agreement by
the Withdrawing Class B Limited Partner, each of the Withdrawing Class B Limited
Partners hereby withdraws as a limited partner in the Partnership. Subject to
the Restricted Stock Agreement, the Partnership hereby distributes the
Withdrawing Class B Management Stock on behalf of the Withdrawing Class B
Limited Partners in the amounts and in the manner set forth on Schedule B. The
remaining Company Stock held by the Partnership (consisting of 35,910 shares of
Company Stock) shall continue to be owned and held by the Partnership for the
benefit of the General Partner and the Limited Partner. None of the Withdrawing
Class B Limited Partners shall have any direct, indirect, vested or contingent
right in the Partnership or its property, including without limitation, the
Company Stock held by the Partnership.
4.3 Allocation of Net Income and Net Loss.
(a) Net Income and Net Gain From Sale. Net Income and Net Gain From
Sale for any Fiscal Year shall be allocated in such manner as equitably reflects
amounts of cash distributed (or, in the case of unrealized income, amounts to be
distributed) to the Limited Partners and the General Partner pursuant to Section
4.1(a).
(b) Net Loss and Net Loss From Sale. Net Loss and Net Loss From Sale
for any fiscal year shall be allocated, to the extent of prior allocations of
Net Income and/or Net Gain From Sale, in the reverse order and priority that Net
Income and/or Net Gain From Sale have been allocated pursuant to
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Section 4.3(a). Net Loss and Net Loss From Sale in excess of any Net Income
and/or Net Gain From Sale shall be allocated among the General Partner and
Limited Partners pro rata in accordance with the positive balances in their
Capital Accounts.
(c) Deficits in Capital Accounts. The Net Loss and Net Loss From
Sale allocated pursuant to Section 4.3(b) hereof shall not exceed the maximum
amount of losses that can be so allocated without causing any Limited Partner to
have a deficit in his Capital Account at the end of any Fiscal Year. In the
event that some but not all of the Limited Partners would have a deficit in his
Capital Account as a consequence of an allocated Net Loss or Net Loss From Sale
pursuant to Section 4.3(b), the limitation set forth in this Section 4.3(c)
shall be applied on a Limited Partner by Limited Partner basis so as to allocate
the maximum permissible losses to each Limited Partner under Section
1.704-1(b)(2)(ii)(d) of the Regulations. All Net Loss and/or Net Loss From Sale
in excess of the limitation set forth in this Section 4.3(c), shall be allocated
among the Partners in accordance with their interests in the Partnership as
determined under the Regulations. Offsetting allocations of Net Income and Net
Gain From Sale shall be made in subsequent Fiscal Years so as to achieve as
nearly as possible the results that would have been achieved had this Section
4.3(c) not been included in this Agreement.
(d) Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations, or distributions described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4) or Regulations Section 1.704-1(b)(2)(ii)(d)(6),
or otherwise, which results in such Partner having a Capital Account deficit,
items of Partnership income and gain shall be specially allocated to each such
Partner in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, the Capital Account deficit of such Partner as quickly as
possible, provided that an allocation pursuant to this Section 4.3(d) shall be
made if and only to the extent that such Partner would have an Adjusted Capital
Account Deficit after all other allocations provided for in this Article IV have
been tentatively made as if this Section 4.3(d) were not in the Agreement.
(e) Tax Allocations on Gross-Up. In accordance with Code Section
704(c) and the Treasury Regulations thereunder, income, gain, loss and deduction
with respect to any property (other than cash) contributed to the capital of the
Partnership shall be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial fair market value as determined by
the General Partner for entry on the books of the Partnership. In the event the
value of any Partnership asset on the books of the Partnership is adjusted
(except in the case of an adjustment pursuant to Section 734(b) or Section
743(b) of the Code) to its Fair Market Value,
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subsequent allocations of income, gain, loss and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such
asset for federal income tax purposes and such value in the same manner as under
Section 704(c) of the Code and the Treasury regulations thereunder. Any
elections or other decisions relating to such allocations shall be made by the
General Partner in any manner that reasonably reflects the purposes and
intention of this Agreement. Allocations pursuant to this Section 4.3(c) are
solely for the purposes of federal, state and local taxes and shall not affect,
or in any way be taken into account in computing, any Partner's Capital Account
or share of Net Income, Net Gain From Sale, Net Loss, Net Loss From Sale or
other items, or distributions pursuant to any provision of this Agreement.
In any event the value of any Partnership asset is adjusted pursuant
to Regulations Section 1.704-1(b)(2)(iv)(f), subsequent allocations of income,
gain, loss, and deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for Federal income tax
purposes and its value in the same manner as under Code Section 704(c) and the
Regulations thereunder. [It is understood that the admission of the Withdrawing
Class B Limited Partners is an event described in Regulation Section
1.704-1(b)(2)(iv)(f), and the assets of the Partnership as of the date hereof
shall be revalued and any income or loss resulting therefrom shall be allocated
among the Limited Partners and the General Partner pursuant to such Regulation.
4.4 Determination of Distributions and Allocations Among Limited Partners.
Unless the context requires otherwise, all Net Cash Flow, Net Sale Proceeds, Net
Income and Net Gain From Sale distributed or allocated to the Limited Partners
generally shall be distributed or allocated to each such Limited Partner
entitled to such distribution or allocation in proportion to the Interests of
each such Limited Partner as set forth on Schedule A. Net Loss and Net Loss From
Sale allocable to the Partners or to the Limited Partners shall be allocated in
proportion to the Capital Contributions made by such Limited Partners.
4.5 Distribution and Payments In-Kind. The General Partner, in its sole
discretion, may distribute Partnership assets in kind to the General Partner
and/or the Limited Partners at such times and in such amounts as cash could be
distributed to such Partners. Any unrealized gain or unrealized loss with
respect to any asset distributed in kind shall be reflected in such Partners'
Capital Accounts as if such asset had been sold for its Fair Market Value on the
date of distribution, the proceeds derived therefrom had been distributed to the
Partner receiving the asset, and the amount of gain or loss with respect thereto
had been allocated to such Partners pursuant to Section 4.3.
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4.6 The Partnership shall not be responsible for, and shall not be
required to pay or to reimburse, any of the Limited Partners for all or any
portion of federal, state or other tax liabilities arising out of their
acquisition of Interests in the Partnership or by reason of any Net Income
allocations to, or distributions of, Net Cash Flow and/or Net Gain From Sale to
any of the Limited Partners.
ARTICLE V
RIGHTS AND DUTIES OF THE GENERAL PARTNER
5.1 Management and Administration.
5.1.1 Except as otherwise expressly provided herein or by law, the
General Partner is hereby vested with the full, exclusive and complete right,
power and discretion to operate, manage and control the affairs of the
Partnership and to make all decisions affecting Partnership affairs, as deemed
proper, necessary or advisable by the General Partner to carry on the business
of the Partnership as described in Section 2.5 and the General Partner shall
have all of the rights, powers and obligations of a general partner of a general
or limited partnership under the Act and otherwise as provided by law.
Without limiting the generality of the foregoing, all of the
Partners hereby specifically agree and consent that the General Partner may, on
behalf of the Partnership, at any time, from time to time and without further
notice to or Consent from any other Partner, do the following, directly or
indirectly through a subsidiary:
(a) purchase of Company Stock or any other
class of capital stock of the Company now or hereafter authorized or debt
instruments issued by the Company or options, warrants or other rights to
purchase any of the foregoing for the Partnership as contemplated by Section 2.5
hereof;
(b) sell all or any part of the Partnership's
assets (including all or part of the Company Stock) whether for cash or
securities and on such reasonable terms as the General Partner shall determine
to be appropriate;
(c) pledge, hypothecate and/or grant or assign
a security interest in all or any portion of the Company Stock owned of record
and/or beneficially by the Partnership to any one or more Persons as a condition
or in consideration of, in connection with or in order to secure or
collateralize any loans or advances made by any of such Persons to the Company
and/or the Partnership;
(d) vote the Company Stock owned by the
Partnership, enter into, and perform under, any stockholders agreement, voting
trust, proxy or other agreement governing the Company Stock and act as a
stockholder of the Company with
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whatever power the Partnership has by virtue of its percentage ownership of the
Company Stock, by contract or otherwise;
(e) incur all expenditures permitted by this Agreement,
and, to the extent that funds of the Partnership are available, pay all
expenses, debts and obligations of the Partnership;
(f) engage, compensate and discharge any agent,
attorney, employee, accountant, consultant or other person, including anyone
who, in addition to acting in such capacity, may also be a General Partner,
Affiliate, or Limited Partner hereunder (or officer, director or equity owner
thereof), at such compensation and upon such terms and conditions as the General
Partner may deem appropriate;
(g) maintain such bank accounts on behalf of the
Partnership and make such signature arrangements with respect thereto, as the
General Partner shall determine to be appropriate;
(h) enter into agreements with any and all persons,
entities and governmental agencies with respect to the financing and operating
of the Partnership business upon such terms as the General Partner deems
appropriate;
(i) compromise, submit to arbitration, ▇▇▇ on or defend
all claims in favor of or against the Partnership;
(j) do all acts it deems necessary or appropriate to
further the Partnership business or for the protection and preservation of the
Partnership assets;
(k) determine the appropriate accounting method or
methods to be used by the Partnership;
(l) amend this Agreement to reflect the substitution or
addition of a Limited Partner or a General Partner or the reduction of Capital
Accounts upon the return of capital to the Partners;
(m) cause the Partnership to enter into transactions in
which the General Partner or Affiliates have an interest including, but not
limited to, transactions which involve the purchase or sale of any property or
securities to or from the Partnership, and transactions in which (i) services
will be rendered for or by the Partnership, or (ii) fees or commissions will be
received by the General Partner or Affiliates from the Partnership (or officer,
director or equity owner thereof);
(n) enter into, execute, amend, supplement, acknowledge
and deliver any and all contracts, agreements or
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other instruments as the General Partner shall determine to be appropriate in
furtherance of the purposes of the Partnership;
(o) pending cash distributions to the Partners, invest in
short-term investments;
(p) admit an assignee of all or any fraction of a Limited
Partner's Interest or the General Partner's Interest to be a Substituted Limited
Partner or a substituted General Partner in the Partnership pursuant to and
subject to the terms of Section 7.3 or 6.1, respectively;
(q) be responsible for providing those administrative
services to the Partnership deemed necessary by the General Partner, including,
without limitation, making any filings necessary on behalf of the Partnership in
Delaware and such other jurisdictions in which the Partnership owns property or
transacts business;
(r) act as "tax matters partner" of the Partnership for
tax purposes;
(s) cause the Partnership and/or the Company or its
subsidiaries to borrow money for Partnership or Company purposes, respectively,
from such lenders, in such amounts, at such times and on such terms as the
General Partner determines appropriate to repay, refinance and/or renegotiate
such borrowings, and to grant security for such borrowings to the lender or
lenders thereof, including pledging the Company Stock.
5.1.2 Third parties dealing with the Partnership may rely
conclusively upon any certificate of the General Partner to the effect that it
is acting on behalf of the Partnership. The signature of the General Partner
shall be sufficient to bind the Partnership, in every manner, to any agreement
or on any document including, but nor limited to, documents drawn or agreements
made in connection with the acquisition or disposition of any assets or
properties in furtherance of the purposes of the Partnership.
5.2 Restrictions on the Authority of the General Partner. Without
the Consent of more than fifty percent (50%) in Interest of the Limited
Partners, the General Partner shall not have the authority (i) to admit a Person
as a Partner, except as provided in this Agreement or (ii) to elect to dissolve
the Partnership, except that no Consent of the Limited Partners shall be
required and the General Partner shall have the authority to elect to dissolve
the Partnership as provided in Section 8.1. Without the Consent of more than
fifty percent (50%) in Interest of the Limited Partners, the General Partner
shall not have the authority to offer and sell limited partnership Interests in
the Partnership and admit such persons as additional Limited Partners.
5.3 Duties and Obligations of the General Partner.
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5.3.1 The General Partner shall take all action which may be
necessary or appropriate for the continuation of the Partnership's valid
existence as a limited partnership under the laws of Delaware and of each other
jurisdiction in which such existence is necessary to protect the limited
liability of the Limited Partners or to enable the Partnership to conduct the
business in which it is engaged.
5.3.2 The General Partner shall at all times conduct its affairs and
the affairs of the Partnership in such a manner that no Limited Partner, in its
capacity as a limited partner, shall have any personal liability with respect to
any Partnership liability or obligation, except as expressly assumed by any
Limited Partner.
5.3.3 The General Partner shall prepare or cause to be prepared, and
shall file on or before the due date (or any extension thereof), any tax returns
required to be filed by the Partnership. The General Partner shall cause the
Partnership to pay any taxes payable by the Partnership (it being understood
that the expenses of preparation and filing of such tax returns, and the amounts
of such taxes, are expenses of the Partnership and not of the General Partner);
provided, however, that the General Partner shall not be required to cause the
Partnership to pay any tax so long as either the General Partner or the
Partnership is in good faith and by appropriate legal proceedings, contesting
the validity, applicability or amount thereof, and such contest does not
materially endanger any right or interest of the Partnership.
5.4 Other Business of Partners.
5.4.1 The General Partner shall devote to the Partnership such time
and effort as the General Partner determines shall be necessary to conduct the
Partnership's business and affairs in an appropriate manner. Subject to the
foregoing, any Partner and any Affiliate of any Partner may engage in or possess
any interest in other business ventures of any kind, nature or description,
independently or with another, whether such ventures are competitive with the
Partnership, or otherwise.
5.4.2 Except as otherwise provided in this Section 5.4, neither the
Partnership nor any Partner shall have any rights or obligations by virtue of
this Agreement or the Partnership relation created hereby in or to any such
independent ventures or in or to the income or profits or losses derived
therefrom.
5.4.3 The Limited Partners recognize and Consent that the General
Partner or Affiliates of the General Partner (including LMI and its respective
officers, directors, shareholders, partners and other Affiliates) may engage in
other activities and may receive other fees and/or annual retainers
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from the Company and the Company's subsidiaries, including, but not limited to,
the LMI Management Consulting Agreement and, except as specifically provided
herein, neither the Partnership nor any Partner shall have any interest therein
by virtue of this Agreement or the Partnership relation created hereby.
5.4.4 Subject to the provisions of Section 5.2, the Limited Partners
hereby further Consent that the General Partner may offer to any Limited Partner
or Affiliate thereof or any other Person or Persons, in any capacity, the
opportunity to invest in, or to make loans to, the Partnership, the Company or
the Company's subsidiaries and no other Partner shall have any right to
participate or any interest therein by virtue of this Agreement or the
partnership relation created hereby.
5.5 Compensation of General Partner.
5.5.1 The General Partner shall not receive any salary, fees,
profits, distributions or compensation from the Partnership, except as provided
in Article IV and this Article V.
5.6 Allocation of Expenses.
5.6.1 The Partnership shall bear or pay from its own resources all
expenses incurred in connection with the General Partner's rent and general
office overhead, including clerical, bookkeeping and administrative costs,
salaries of personnel, payroll taxes and employee costs related to such
salaries, telephone charges, office supplies and office equipment expenses and
other like expenses related to the Partnership. All Partnership Expenses (as
defined below) shall be paid out of Cash Flow arising from short term
investments, to the extent funds arising therefrom are available, and thereafter
from other amounts of Cash Flow or, in the event of any insufficiency of Cash
Flow in any Fiscal Year, shall be paid out of any other cash funds of the
Partnership. To the extent the General Partner incurs any Partnership Expenses
on behalf of the Partnership, the Partnership shall promptly reimburse the
General Partner for such Partnership Expenses. Partnership Expenses shall
include the following:
(a) all filing fees or other similar fees payable from time to time
in respect of this Agreement or the Partnership;
(b) all taxes or governmental charges, all brokerage fees,
commissions, bank charges, transfer fees, filing fees, lawyers' and accountants'
costs, agents', consultants', experts, and other professional fees and any other
duties, charges or fees, whether in connection with the constitution of, or
increase in, Partnership assets or, the sale or purchase of, or proposed sale or
purchase of, Partnership assets and which may have become or may be payable in
respect of, or prior to, or upon the occasion of, the transaction or dealing, or
attempted or proposed transaction or dealing;
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(c) all expenses incurred in relation to the registration of
Partnership assets in the name of the General Partner or its nominee, or the
custody of the documents of title thereto;
(d) all taxes payable in respect of the acquisition of, holding of,
or dealing with investments or other assets of the Partnership;
(e) the remuneration and expenses of the Accountants and other costs
incurred in connection with the preparation of the financial statements referred
to in Section 12.2 hereof;
(f) the costs of maintaining records and books of account in
relation to the business of the Partnership referred to in Section 12.1;
(g) any interest on, and other costs and expenses with respect to,
borrowings effected pursuant to Article IX hereof;
(h) all costs and expenses incurred in relation to convening and
holding meetings of the Limited Partners pursuant to Article IX hereof;
(i) all costs and expenses of, or incidental to, the preparation of
amendments to this Agreement as referred to in Article VIII;
(j) all costs and expenses of and incidental to the preparation and
dispatch to Partners of all checks, warrants, reports, circulars, forms and
notices and any other documents necessary or desirable in connection with the
business and administration of the Partnership;
(k) all costs and expenses incurred as a result of the
termination of the Partnership and the realization of the
Partnership assets;
(l) the remuneration and expenses of legal counsel to the
Partnership and any costs and expenses of any litigation involving the
Partnership and the amount of any judgment or settlement paid in connection
therewith, excluding, however the costs and expenses of any litigation, judgment
or settlement in which the conduct of the General Partner is found to have
violated the standard of conduct set forth in Section 5.7;
(m) any other costs in connection with the organization or
administration of the Partnership or otherwise that may be authorized by this
Agreement or approved by the Consent of more than fifty percent (50%) in
Interest of the Limited Partners; and
(n) all expenses incurred in the collection of Cash Flow.
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5.7 Exculpation; Indemnification of the General Partner by the
Partnership. Neither the General Partner nor any of its Affiliates (including,
but not limited to, LMI) nor its or their officers, directors, shareholders,
partners, members, employees or agents (individually, an "Indemnitee" and
collectively, "Indemnitees") shall be liable, responsible or accountable in
damages or otherwise to the Partnership or any Limited Partner for any loss,
damage or tax liability incurred by reason of any act or omission performed or
omitted by the Indemnitee on behalf of the Partnership, or in furtherance of the
interests of the Partnership, provided that the Indemnitee committed no act of
gross negligence or willful misconduct with respect to such acts or omissions.
The Partnership, out of its assets and not out of the separate assets of the
General Partner or any Limited Partner, shall indemnify and hold harmless, to
the fullest extent permitted by law, the Indemnitee who was or is a party to or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding whether civil, criminal, administrative or investigative
(including any action by or in the right of the Partnership), by reason of any
acts or omissions or alleged acts or omissions arising out of such Person's
activities as General Partner, Affiliate, officer, director, shareholder,
partner, member, employee or agent thereof, if such activities were performed
either on behalf of the Partnership or in furtherance of the interests of the
Partnership, against losses, damages and expenses for which such Person has not
otherwise been reimbursed (including attorneys' fees and charges, judgments,
fines and amounts paid in settlement) actually incurred by such Person in
connection with such action, suit or proceeding, so long as such Person
committed no act of gross negligence or willful misconduct with respect to such
acts or omissions and, with respect to any criminal action or proceeding, had no
reasonable cause to believe and did not believe his conduct was unlawful, and
provided that the satisfaction of any indemnification and any holding harmless
shall be from and limited to Partnership Assets and no Limited Partner shall
have any personal liability on account thereof. The indemnification for
attorneys' fees and charges contained herein shall include the legal costs
incurred by a party to enforce its rights under this Agreement. The General
Partner and LMI may consult with the Accountants and counsel to the Partnership
in respect of Partnership affairs and shall be fully protected and justified in
any action or inaction which is taken or omitted in good faith, in reliance upon
and in accordance with the opinion or advice of such counsel or Accountants. In
determining whether an Indemnitee acted with the requisite degree of care, the
Indemnitee shall be entitled to rely on reports and written statements of the
directors, officers and employees of the Company unless the Indemnitee to be
exculpated hereby had reason to believe that such reports or statements were not
true and complete. For the purposes of this Section 5.7, the directors, officers
and employees of the Company and its subsidiary corporations, if any, solely by
reason of such positions, shall not be deemed to be Affiliates of the General
Partner.
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ARTICLE VI
TRANSFERABILITY OF THE GENERAL PARTNER'S INTEREST
6.1 Assignment of the General Partner's Interest. Without the prior
Consent of more than fifty percent (50%) in Interest of the Limited Partners,
the General Partner shall not after the date hereof enter into any agreement as
a result of which any Person (other than Fund G.P., LMI, Corporate Fund G.P., a
Person which is a partnership of which the General Partner, Fund G.P., Corporate
Fund G.P., LMI or the general partner of the General Partner is the general
partner, or which succeeds to the business, substantially as an entirety of the
General Partner, Fund G.P., Corporate Fund G.P., LMI or the general partner of
the General Partner or which is wholly-owned, directly or indirectly, by the
General Partner, Fund G.P., Corporate Fund G.P., LMI or the general partner of
the General Partner or which is another Affiliate of the General Partner, Fund
or LMI) shall have all or any part of the general partnership interest in the
Partnership. In connection with any assignment of all or any part of the General
Partner's general partnership interest in the Partnership, an appropriate
amendment to the Certificate shall be timely filed in accordance with the Act
and the Partnership shall not be dissolved. The Limited Partners consent to the
continuation of the business of the Partnership following any assignment of the
General Partner's Interest to a person described in the parenthetical clause of
the first sentence of this Section 6.1 and to the appointment of such Person as
a substitute General Partner of the Partnership.
6.2 Resignation or Withdrawal of the General Partner. Except in connection
with an assignment permitted by Section 6.1, without the prior Consent of more
than fifty percent (50%) in Interest of the Limited Partners, the General
Partner may not resign or withdraw from the Partnership. Except as required by
the Act no event shall be deemed to be an "event of withdrawal" pursuant to
Section 17-402 of the Act that is not expressly referred to in this Article VI.
6.3 Removal of the General Partner. The General Partner may be removed
only for Cause on not less than nine (9) months' notice from the Limited
Partners, or their representative duly appointed for the purpose of giving such
notice, with the Consent of at least ninety percent (90%) in Interest of the
Limited Partners. "Cause" means the General Partner committed an act of gross
negligence or willful misconduct.
6.4 Incapacity of the General Partner. In the event of the Incapacity of
the General Partner, the Partnership shall be dissolved, subject to the
provisions of Section 6.5.
6.5 Continuation of the Partnership.
6.5.1 In the event of the Incapacity, removal,
withdrawal or resignation of the General Partner, the Partnership
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shall be dissolved, unless the Limited Partners shall, within ninety (90) days
after the occurrence of any such event, elect, by the Consent of all the Limited
Partners, to continue the Partnership upon the same terms and conditions as are
set forth in this Agreement, except as required by the last sentence of this
Section 6.5.1. In the event the election described in the first sentence of this
Section 6.5.1 is made, the Limited Partners unanimously shall elect a new
General Partner to serve as the General Partner of the Partnership, and such
election shall be deemed to have occurred immediately prior to the occurrence of
an event described in the first sentence of this Section 6.5.1. The newly
appointed General Partner, if it so desires to serve, shall be required to
purchase the interest of the prior General Partner for an amount equal to the
greater of the Fair Market Value, or the liquidation value, thereof, determined
by the Accountants.
6.5.2 Upon the General Partner ceasing to be the General Partner of
the Partnership as provided in this Agreement, other than in connection with an
assignment permitted by Section 6.1 above, its liability as the General Partner
shall cease as provided in Section 6.6, and the Partnership shall promptly file
an amendment to the Partnership's Certificate and otherwise take all steps
reasonably necessary under the Act to cause such cessation of liability.
6.5.3 Upon the General Partner ceasing to be the General Partner of
the Partnership as provided in this Agreement other than in connection with an
assignment permitted by Section 6.1 above, the designees of the General Partner
and its Affiliates shall tender their resignations from all directorships and
officerships held by them in the Company and its subsidiaries, if any.
6.6 Liability of a Withdrawn or Removed General Partner. Subject to the
provisions concerning exculpation and indemnification contained in Section 5.7,
a General Partner which shall become Incapacitated, withdraw, be removed or
resign from the Partnership, shall remain liable for obligations and liabilities
incurred by it as General Partner prior to the time such Incapacity, withdrawal,
removal or resignation shall have become effective, but it shall be free of any
obligation or liability incurred on account of the activities of the Partnership
from and after the time such Incapacity, withdrawal, removal or resignation
shall have become effective.
ARTICLE VII
TRANSFERABILITY OF A LIMITED PARTNER'S INTEREST
7.1 Restrictions on Transfer of Interests.
7.1.1 Notwithstanding any other provisions of this Section 7.1, no
Transfer of all or any fraction of a Limited Partner's Interest may be made
without (a) the prior written
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Consent of the General Partner, which Consent may be withheld for any reason in
the General Partner's sole and absolute discretion, and (b) the receipt by the
General Partner not less than ten (10) days prior to the date of any proposed
transfer of a written opinion of responsible counsel (who may be counsel for the
Partnership), satisfactory in form and substance to the General Partner to the
effect that such Transfer would not result in any adverse legal or regulatory
consequences to the Partnership or any Partner thereof, including but not
limited to:
(i) a violation of the Securities Act of 1933, as
amended, or any "Blue Sky" laws or other securities or other laws or regulations
of the United States or any state of the United States or any over jurisdiction
applicable to the Partnership or the Interest to be transferred;
(ii) the loss by the Partnership of its status as a
partnership for tax purposes; or
(iii) the termination of the Partnership pursuant to
Section 708(b)(1)(B) of the Code; provided, however, that: clause (i) of the
foregoing provisions of this Section 7.1.1 shall not apply to a Transfer by a
Limited Partner to a Person which succeeds to its business substantially as an
entirety, or which, directly or indirectly, owns all the outstanding equity
securities of such Limited Partner or is a wholly-owned subsidiary of such
Limited Partner (or of the Person of which such Limited Partner, directly or
indirectly, is a wholly-owned subsidiary); provided further, however, that the
General Partner may not consent to the transfer of Interests of a Limited
Partner who has a relationship with the General Partner as described in Section
3.03(9) of Revenue Procedure 89-12 as modified, supplemented or superseded in
relevant part (a "Related Limited Partner") so as to reduce the aggregate
Interest of such Related Limited Partner (after taking into account the proposed
transfer) to less than 66% the original Interests of such Related Limited
Partner. The General Partner agrees to cooperate with any Limited Partner making
a Transfer by providing promptly such records and other factual information as
may be reasonably requested with respect to any proposed Transfer. Each Limited
Partner hereby severally agrees that it will not transfer all or any fraction of
its Interest in the Partnership except as permitted by this Agreement.
7.1.2 In no event shall all or any part of an Interest be
transferred to a minor or an incompetent except in trust or by will or intestate
succession.
7.1.3 The transferring Limited Partner agrees that it will pay all
reasonable expenses, including attorneys' fees, incurred by the Partnership in
connection with such Transfer.
7.1.4 Any Person which acquires all or any fraction of the Interest
of a Limited Partner shall be obligated to pay to
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the Partnership the appropriate portion of any amounts thereafter becoming due
in respect of the unpaid Capital Contributions committed to be made by its
predecessor in interest and shall succeed to the appropriate part of the Capital
Account of its predecessor in interest. Each Limited Partner agrees that,
notwithstanding the Transfer of all or any fraction of its Interest, as between
it and the Partnership, it will remain liable for the unpaid Capital
Contributions as required to be made with respect to its interest prior to the
time, if any, when the purchaser, assignee or transferee of such Interest, or
fraction thereof, is admitted as a Substituted Limited Partner.
7.1.5 Notwithstanding anything herein to the contrary, in no event
may an Interest of a Limited Partner be transferred, unless such Interest
represents either original aggregate Capital Contributions to the Partnership of
at least $10,000 or such Limited Partner's entire Interest.
7.2 Assignees.
7.2.1 The Partnership shall not recognize for any purpose any
purported Transfer of all or any fraction of the Interest of a Limited Partner,
unless the provisions of Section 7.1 shall have been complied with and there
shall have been filed with the Partnership a dated notice of such Transfer, in
form satisfactory to the General Partner, executed and acknowledged by both the
seller, assignor or transferor and the purchaser, assignee or transferee, and
such notice (i) contains the agreement of the purchaser, assignee or transferee,
satisfactory to the General Partner, to be bound by all the applicable terms and
provision of this Agreement and (ii) represents that such Transfer was made in
accordance with all applicable laws and regulations.
7.2.2 Unless and until an assignee of an Interest becomes a
Substituted Limited Partner, such assignee shall not be entitled to give
Consents with respect to such Interest.
7.2.3 Subject to Section 7.1.4 any Limited Partner which shall
transfer all of its Interest shall cease to be a Limited Partner, except that,
unless and until a Substituted Limited Partner is admitted in its stead, such
assigning Limited Partner shall retain the statutory rights of the assignor of a
limited partner's interest under the Act.
7.2.4 Anything herein to the contrary notwithstanding, both the
Partnership and the General Partner shall be entitled to treat the assignor of
an Interest as the absolute owner thereof in all respects, and shall incur no
liability for distributions made in good faith to it, until such time as a
written assignment that conforms to the requirements of this Article VII has
been received by the Partnership and accepted by the General Partner.
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7.2.5 A Person who is the assignee of all or any fraction of the
Interest of a Limited Partner as permitted hereby but does not become a
Substituted Limited Partner and who desires to make a further Transfer of such
Interest, shall be bound by all of the provisions of this Article VII to the
same extent and in the same manner as any Limited Partner desiring to make a
Transfer of its Interest.
7.3 Substituted Limited Partners.
7.3.1 No Limited Partner shall have the right to substitute a
purchaser, assignee, transferee, donee, heir, legatee, distributee or other
recipient of all or any fraction of such Limited Partner's Interest as a Limited
Partner in its place. Any such purchaser, assignee, transferee, donee, heir,
legatee, distributee or other recipient of an Interest (whether pursuant to a
voluntary or involuntary Transfer) shall be admitted to the Partnership as a
Substituted Limited Partner only (i) with the written Consent of the General
Partner which Consent may be withheld for any reason in the General Partner's
sole discretion, (ii) by satisfying the requirements of Sections 7.1 and 7.2,
(iii) upon the receipt of all necessary governmental consents, and (iv) upon an
amendment to this Agreement and the Certificate, if required, and the recording
of all amendments and other documents required to be recorded in the proper
records of each jurisdiction in which such recordation is necessary to qualify
the Partnership to conduct business or to preserve the limited liability of the
Limited Partners.
7.3.2 Each Substituted Limited Partner, as a condition to its
admission as a Limited Partner, shall execute and acknowledge such other
instruments, in form and substance satisfactory to the General Partner, as the
General Partner reasonably deems necessary or desirable to effectuate such
admission and to confirm the agreement of the Substituted Limited Partner to be
bound by all the terms and provisions of this Agreement with respect to the
Interest acquired. All reasonable expenses, including attorneys' fees, incurred
by the Partnership in this connection shall be borne by such Substituted Limited
Partner.
7.3.3 Until an assignee shall have been admitted to the Partnership
as a Substituted Limited Partner pursuant to Section 7.3.1, such assignee shall
be entitled to all of the rights of an assignee of a limited partnership
interest under the Act.
7.4 Incapacity of a Limited Partner. In the event of the Incapacity of a
Limited Partner, the Partnership shall not terminate, and the Limited Partner's
trustee in bankruptcy or other legal representative shall have only the rights
of a transferee of the right to receive Partnership distributions applicable to
the Interest of such Incapacitated Limited Partner as provided herein. Any
Transfer from such trustee in bankruptcy
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or legal representative shall be subject to the provisions of this Agreement.
7.5 Transfers During a Fiscal Year. In the event of the Transfer of a
Partner's Interest at any time other than the end of a Fiscal Year, the
distributive share of the various items of Partnership profit, income, gain,
deduction, loss, credit and allowance computed for tax purposes shall be
allocated between the transferor and the transferee in the ratio of the number
of days in the Fiscal Year before and after the Transfer or in such other manner
as the General Partner determines to be fair under the circumstances, including,
without limitation, a closing of the books of the Partnership.
7.6 Restrictions Upon Transfer of Withdrawing Class B Partners' Interests.
Any Company Stock distributed to the Withdrawing Class B Limited Partners in
connection with the withdrawal from the Partnership by such persons shall be
deposited into escrow with the Company's secretary acting as escrow agent. The
escrow agreement shall provide that the shares held in escrow may not be sold,
assigned, pledged or otherwise encumbered or transfer prior to the time the
shares are released from escrow. The shares shall be released from escrow in
accordance with the terms of the Restricted Stock Agreement.
ARTICLE VIII
DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP
8.1 Dissolution. The Partnership shall be dissolved, upon
the happening of any of the following events:
(i) the expiration of its term;
(ii) the failure of the Limited Partners to elect to continue the
Partnership as provided, and upon the occurrence of an event specified in
Section 6.5.1;
(iii) at least three (3) months prior written notice to the
Limited Partners of the election to dissolve the Partnership by the
General Partner if at any time the Fair Market Value of the Partnership
assets, less the face amount of the liabilities of the Partnership, shall
be less than ten percent (10%) of the original Capital Contributions;
(iv) the sale of or other disposition by the Partnership of all
or substantially all of the Company Stock, and any other assets of the
Partnership, unless the General Partner determines that the continued
existence of the Partnership is necessary or desirable;
(v) termination required by operation of law; or
(vi) the Consent of the General Partner and fifty percent (50%)
in Interest of the Limited Partners.
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29
Dissolution of the Partnership shall be effective on the day on which the event
occurs giving rise to the dissolution, but the Partnership shall not terminate
until the Certificate has been canceled and the assets of the Partnership have
been distributed as provided in Section 8.2.
8.2 Liquidation.
8.2.1 Upon dissolution of the Partnership, the General Partner or,
if there is none, a Person selected by a majority in interest of the Limited
Partners to act as a liquidating trustee (the "Liquidating Trustee") shall wind
up the affairs of the Partnership and proceed within a reasonable period of time
to sell or otherwise liquidate the assets of the Partnership and, after paying
or making due provision by the setting up of reserves for all liabilities to
creditors of the Partnership, to distribute the assets among the Partners in
accordance with the provisions for the making of distributions set forth in
Section 8.2.2 of this Agreement. Notwithstanding the foregoing, in the event
that the General Partner or the Liquidating Trustee shall, in its absolute
discretion, determine that a sale or other disposition of part or all of the
Partnership's investments would cause undue loss to the Partners or otherwise be
impractical or imprudent, the General Partner or the Liquidating Trustee may
either defer liquidation of, and withhold from distribution for a reasonable
time, any investments or distribute part or all of such investments to the
Partners, or to a liquidating trust for their benefit, in kind as provided in
Sections 8.2.2 and 4.6 hereof.
8.2.2 If the Fair Market Value of Partnership assets to be
distributed in kind exceeds ("unrealized gain") or is less than ("unrealized
loss") the Partnership basis in such assets, to the extent not otherwise
recognized to the Partnership, such unrealized gain or unrealized loss shall be
taken into account in computing income, losses and gains for such Fiscal Year
for all purposes of crediting or charging the Capital Accounts of the Partners
pursuant to Section 4.3 and this Section as if such assets had been sold for
their Fair Market Value on the date of distribution. Thereupon, all of the
assets of the Partnership, or the proceeds therefrom, shall be distributed or
used as follows and in the following order of priority:
(i) for the payment of the debts and liabilities of the
Partnership, including, without limitation, any amounts due to the General
Partner pursuant to Section 5.6, and the expenses of liquidation;
(ii) to the setting up of any reserves which the General Partner
or the Liquidating Trustee may deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the Partnership;
and
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30
(iii) to the Limited Partners and the General Partner in an amount
equal to the positive balances in their respective Capital Accounts as
determined after taking into account all Capital Account adjustments for
all of the Partnership's taxable years including the Partnership's taxable
year during which such liquidation occurs. The amount of such distribution
in kind for such purposes of this Section 8.2.2(iii) shall be equal to the
Fair Market Value of the assets so distributed.
8.2.3 When the General Partner or the Liquidating Trustee has
complied with the foregoing liquidation plan, the Partners shall execute,
acknowledge and cause to be filed, in accordance with the Act and the laws of
such jurisdictions in which the Partnership is qualified to transact business,
an instrument or instruments evidencing the cancellation of the Certificate and
termination of the Partnership.
ARTICLE IX
AMENDMENTS
9.1 Adoption of Amendments; Limitations Thereon.
9.1.1 By their execution of this Agreement, the Limited Partners
have thereby signified their approval of all Amendments to the Original
Agreement set forth in this Agreement.
9.1.2 This Agreement is subject to amendment only with the written
Consent of the General Partner and more than fifty percent (50%) in Interest of
the Limited Partners; provided, however, that no amendment to this Agreement
may:
(a) increase the Capital Contributions required to be made by any
Partner or require any Partner to make a loan to the Partnership; convert
a Limited Partner's Interest into a General Partner's Interest; modify the
limited liability of a Limited Partner; or increase the liabilities or
responsibilities of, or diminish the protections of, any Partner under
this Agreement; in each case, without the Consent of each such affected
Partner; and provided, further, that no amendment which would increase the
Capital Contributions required to be made by any Partner may be adopted
unless all of the Partners are offered the opportunity to increase their
Capital Contributions on a pro rata basis;
(b) alter the Interest of any Partner in income, gains, losses or
distributions of the Partnership or amend or modify any portion of Article
IV without the Consent of each Partner adversely affected by such
amendment or modification; provided, however, that the admission of
additional Limited Partners and General Partners shall constitute such an
alteration, amendment or modification;
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31
(c) amend or modify any provision of Article VII in a manner that
would further restrict the transferability of a Limited Partner's Interest
without the Consent of all of the Limited Partners;
(d) amend any provisions hereof which require the Consent, action
or approval of a specified percentage in Interest of the Limited Partners
without the Consent of such specified percentage in Interest of the
Limited Partners;
(e) cause the Partnership to lose its status as a partnership for
federal income tax purposes; or
(f) amend this Section 9.1.1 without the Consent of all of the
Limited Partners.
9.1.3 Notwithstanding any provision hereof and in addition to any
amendments otherwise authorized hereby, this Agreement may be amended from time
to time by the General Partner (i) to add to the representations, duties or
obligations of the General Partner or surrender any right or power granted to
the General Partner herein; (ii) to cure any ambiguity or correct or supplement
any provision hereof which may be inconsistent with any other provision hereof,
or correct any printing, stenographic or clerical errors or omissions; (iii) to
withdraw one or more Limited Partners, in accordance with the terms of this
Agreement; (iv) to amend Schedule A hereto to provide any necessary information
regarding any Partner; and (v) to reflect any change in the amount of the
Capital Contribution of any Partner in accordance with the terms of this
Agreement; provided, however, that no amendment shall be adopted pursuant to
this Section 9.1.2 if (a) such amendment would alter the Interest of a Partner
in income, gains or losses or distributions or is adverse to the Interests of
the Limited Partners, or (b) such amendment would, in the opinion of counsel for
the Partnership, alter or result in the alteration of the limited liability of
the Limited Partners or the status of the Partnership as a partnership for
federal income tax purposes. The General Partner shall send each Limited Partner
a copy of any amendment adopted pursuant to this Section 9.1.2.
9.1.4 Upon the adoption of any amendment to this Agreement, the
amendment shall be executed by the General Partner and all of the Limited
Partners and shall be duly filed in the proper records of each jurisdiction in
which filing is necessary for the Partnership to conduct business or to preserve
the limited liability of the Limited Partners. Any such amendment may be
executed by the General Partner on behalf of the Limited Partners pursuant to
the power of attorney granted in Article X.
9.2 Amendment of Certificate. In the event this Agreement shall be amended
pursuant to this Article IX, the General Partner shall amend the Certificate to
reflect such change if the General Partner deems such amendment to be necessary
and shall make any
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32
other filings or publications required or desirable to reflect such amendment,
including any required filing for recordation of the Certificate or other
similar document.
ARTICLE X
CONSENTS, VOTING AND MEETINGS
10.1 Method of Giving Consent. Any Consent required by
this Agreement may be given as follows:
(a) by a written Consent given by the consenting Partner at or
prior to the doing of the act or thing for which the Consent is solicited,
provided that such Consent shall not have been nullified by either (i)
notice to the General Partner by the Consenting Partner at or prior to the
time of, or the negative vote by such Consenting Partner at, any meeting
held to consider the doing of such act or thing, or (ii) notice to the
General Partner by the Consenting Partner prior to the doing of any act or
thing, the doing of which has not been made the subject of an approval at
such a meeting; or
(b) by the affirmative vote by the Consenting Partner to the
doing of the act or thing for which the Consent is solicited at any
meeting called and held to consider the doing of such act or thing.
10.2 Meetings. Any matter (regardless of whether such matter requires the
Consent of all or any of the Limited Partners pursuant to this Agreement) may be
considered at a meeting of the Limited Partners held not less than twenty-eight
(28) days after notice thereof shall have been given by the General Partner to
all Limited Partners. Such notice (i) may be given by the General Partner, in
its discretion, at any time, and (ii) shall be given by the General Partner
within thirty (30) days after receipt by the General Partner of a request for
such a meeting made by at least fifty percent (50%) in Interest of the Limited
Partners. Any such notice shall state briefly the purposes, time and place of
the meeting. All such meetings shall be held at the principal office of the
Partnership or at such other reasonable place as the General Partner shall
designate and during normal business hours.
10.3 Record Dates. The General Partner may set in advance a date for
determining the Limited Partners entitled to notice of and to vote at any
meeting. No record date shall be more than sixty (60) days nor less than ten
(10) days prior to the date of the meeting to which such record date relates.
10.4 Submissions to Limited Partners. The General Partner shall give all
of the Limited Partners entitled to vote thereon notice of any proposal or other
matter required by any provision of this Agreement or by law to be submitted for
the consideration and approval of the Limited Partners or any class thereof.
Such
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33
notice shall include any information required by the relevant provisions of this
Agreement or by law. Neither the General Partner nor the Partnership shall
solicit, request or negotiate for or with respect to any proposed waiver or
amendment of any of the provisions of this Agreement or the Certificate or any
Consent by the Limited Partners unless each Limited Partner entitled to vote
thereon shall be informed thereof by the General Partner or the Partnership, as
the case may be, and shall be afforded the opportunity of considering the same
and shall be supplied with sufficient information to enable such Limited Partner
to make an informed decision with respect thereto. Neither the General Partner
nor the Partnership shall, directly or indirectly, pay or cause to be paid any
remuneration, fee or other consideration to any Limited Partner for or as an
inducement to the entering into by such Limited Partner of any waiver or
amendment of any of the terms and provisions of this Agreement or the
Certificate or the giving of any Consent, unless such remuneration is
concurrently paid on the same terms, in proportion to their respective Limited
Partner Interests, to all the then Limited Partners entitled to vote thereon.
ARTICLE XI
POWER OF ATTORNEY
Each Partner, by its execution hereof, hereby irrevocably makes,
constitutes and appoints the General Partner as its true and lawful agent and
attorney-in-fact, with full power of substitution and full power and authority
in its name, place and stead, to make, execute, sign, acknowledge, swear to,
record, publish and file in such Partner's or such Partner's assignee's name,
place and stead: (i) any and all counterparts of this Agreement and any and all
amendments hereto to which such Partner is a signatory; (ii) the original
certificate of limited partnership of the Partnership and all amendments thereto
required or permitted by law or the provisions of this Agreement; (iii) all
certificates and other instruments deemed advisable by the General Partner to
carry out the provisions of this Agreement and any applicable law or to permit
the Partnership to become or to continue as a limited partnership or partnership
wherein the limited partners have limited liability in each jurisdiction where
the Partnership may be doing business; (iv) all instruments that the General
Partner deems appropriate to reflect a change or modification of this Agreement
including, without limitation, the admission of additional Limited Partners, the
substitution of any assignee as a Substituted Limited Partner or substituted
General Partner, and the forfeiture by Limited Partners of their interests,
pursuant to the provisions of this Agreement; (v) all conveyances and other
instruments or documents deemed advisable by the General Partner, including
without limitation, those to effect the dissolution and termination of the
Partnership; (vi) all fictitious or assumed name certificates required or
permitted to be filed on behalf of the Partnership; (vii) any changes in this
Agreement as are required or are desirable in the judgment of the General
Partner in order to comply with the laws
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34
of Delaware or the Code; (viii) all insertions and/or corrections to any
documents executed by such Partner in connection with such Partner's admission
as a Limited Partner of the Partnership, including, without limitation, filling
in blank addresses, dollar amounts, schedules of Capital Contributions and
subscription agreements, if any, executed by such Partner; and (ix) all other
instruments which may be required or permitted by law to be filed, recorded or
published on behalf of the Partnership. Any person dealing with the Partnership
may presume conclusively and rely upon the fact that any instrument referred to
above is authorized, valid and binding, without further inquiry.
The foregoing power of attorney:
(a) is coupled with an interest, shall be irrevocable and shall
survive the Incapacity of the Partner in respect of which such power of
attorney may be exercised;
(b) may be exercised by the General Partner, or the officers and
directors of the general partner of the General Partner either by signing
separately as attorney-in-fact for each Partner or, after listing all of
the Partners executing an instrument, by a single signature of the General
Partner, any such officer or director acting as attorney-in-fact for all
of them; and
(c) shall survive the delivery of an assignment by a Partner of
the whole or any fraction of its Interest, except that, where the assignee
of the whole of such Partner's Interest has been approved by the General
Partner for admission to the Partnership as a Substituted Limited Partner,
the power of attorney of the assignor shall survive the delivery of such
assignment for the sole purpose of enabling the General Partner or the
officers and directors of the general partner of the General Partner to
execute, swear to, acknowledge and file any instrument necessary or
appropriate to effect such substitution.
Each Partner shall execute and deliver to the General Partner within
fifteen (15) days after receipt of the General Partner's request therefor such
further designations, powers-of-attorney and other instruments as the General
Partner reasonably deems necessary to carry out the terms of this Agreement.
ARTICLE XII
RECORDS AND ACCOUNTING; REPORTS; FISCAL AFFAIRS
12.1 Records and Accounting.
12.1.1 Proper and complete records and books of account of the
business of the Partnership, including a list of the names, addresses and
Interests of all Limited Partners, shall be maintained at the Partnership's
principal place of business. Any Partner, or its duly authorized representative,
shall be
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35
entitled to a copy of the list of names, addresses and Interests of the Limited
Partners, provided such information shall be used only for Partnership purposes.
Each Partner and its duly authorized representatives may visit and inspect any
of the properties of the Partnership or the offices of the General Partner,
examine their books of account, records, reports and other papers (to the extent
the same pertain to the Partnership) which are not legally required to be kept
confidential or secret, make copies and extracts therefrom, and discuss the
affairs, finances and accounts of the Partnership with the General Partner, all
at such reasonable times and as often as may be reasonably requested.
12.1.2 The books and records of the Partnership shall be kept in
accordance with the accrual basis method of accounting and in such a way as
shall permit the preparation of the financial statements referred to in Section
11.2.1. The accrual basis method of accounting shall be followed by the
Partnership for tax purposes, and the taxable year of the Partnership shall be
its Fiscal Year.
12.2 Annual Reports.
12.2.1 Within one hundred twenty (120) days after the end of each
Fiscal Year, the General Partner shall cause to be delivered to each Limited
Partner an annual report containing the following:
(a) financial statements of the Partnership, including, without
limitation, a balance sheet as of the end of the Fiscal Year and
statements of income, Partners' equity and cash flows for such Fiscal
Year; and
(b) a statement, in reasonable detail, showing the Capital
Account of such Limited Partner and computing the distributions to such
Limited Partner during such Fiscal Year.
12.2.2 No value shall ever be attributed to the firm name of the
Partnership, or the right of its use, or to the goodwill appertaining to the
Partnership or its business, either during the continuation of the Partnership
or in the event of its dissolution or termination. Liabilities shall be
determined in accordance with the method of accounting employed by the
Partnership and may include reserves for estimated accrued expenses and reserves
for unknown or untaxed liabilities or contingencies.
12.3 Tax Information. Within ninety (90) days after the end of each Fiscal
Year, the General Partner will cause to be delivered to each Person who was a
Partner at any time during such Fiscal Year a Form K-l and such other
information, if any, with respect to the Partnership as may be necessary for the
preparation of such Partner's income tax returns, including a
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36
statement showing such Partner's shares of income, gain or loss and credits for
such Fiscal Year for income tax purposes.
12.4 Partnership Funds. The funds of the Partnership may be deposited in
the name of the Partnership in one or more bank accounts in one or more banks.
Withdrawals therefrom shall be made upon such signature(s) as the General
Partner may designate. No funds of the Partnership shall be kept in any account
other than a Partnership account; funds shall not be commingled with the funds
of any other Person; and the General Partner shall not employ, or permit any
other Person to employ, such funds in any manner except for the benefit of the
Partnership.
12.5 Elections. The determination of the General Partner with respect to
the treatment of any item or its allocation for federal, state or local tax
purposes shall be binding upon all of the Partners so long as such determination
shall not be inconsistent with any express term hereof and provided that the
Accountants shall not disagree therewith.
12.6 Other Information. With reasonable promptness, the General Partner
will deliver, to the extent it may lawfully be disclosed, such other information
available to the General Partner, including financial statements and
computations, relating to the Partnership as any Limited Partner may from time
to time reasonably request.
ARTICLE XIII
REPRESENTATIONS AND WARRANTIES OF THE LIMITED PARTNERS
Each Limited Partner is fully aware that the Partnership and the General
Partner are relying upon the truth and accuracy of the following representations
by each of the Limited Partners. Each of the Limited Partners hereby represents
and warrants that:
(a) Such Limited Partner (i) if an individual, has full power
and is legally competent to enter into the Agreement, (ii) if an entity is
duly organized, validly existing and in good standing under the laws of
its state or country of organization, has full power and authority to
enter into this Agreement, and (iii) the execution of this Agreement and
the consummation of the transactions contemplated hereby will not
constitute a violation of, or a default under, or conflict with, any
conduct, commitment, agreement, understanding, arrangement or restriction
of any kind to which such Limited Partner is a party or by which such
Limited Partner is bound.
(b) The Partnership has made available to such Limited Partner
its advisors and designated representatives, if any, for a reasonable time
prior to the execution hereof the opportunity to ask questions and receive
answers concerning the terms and conditions of an investment in the
Partnership and to obtain such information and documents which the
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37
Partnership possesses or can acquire without unreasonable effort or
expense. Such Limited Partner, its advisors and designated
representatives, if any, have received all such additional information
requested. Such Limited Partner is not relying on the Partnership or the
General Partner for guidance with respect to tax and other applicable laws
of any jurisdiction or any other economic considerations.
(c) Such Limited Partner is acquiring its Interest for its own
account, for investment and not with a view to, or for resale in
connection with, the distribution thereof or with any present intention of
distributing or reselling any portion thereof.
(d) This Agreement is the valid and binding obligation of such
Limited Partner, enforceable against such Limited Partner in accordance
with its terms.
ARTICLE XIV
MISCELLANEOUS
14.1 Notices.
14.1.1 Any notice to any Limited Partner shall be given at the
address of such Partner set forth in Schedule A hereto or at such other mailing
address of which such Limited Partner shall advise the General Partner in
writing. Any notice to the Partnership or the General Partner shall be given at
the principal office of the Partnership as set forth in Section 2.4. The General
Partner may at any time change the location of such office. Notice of any such
change shall be given to the Partners on or before the date of any such change.
14.1.2 Unless otherwise provided herein, all notices required under
the terms and provisions hereof shall be in writing, either delivered by hand,
by first class mail, by overnight courier or by telex, telecopier or telegram,
including by facsimile transmission, and any such notice shall be effective when
actually given in person, if by hand, when transmitted, upon receipt of a
legible facsimile transmission, if given by telecopier, when transmitted, upon
receipt of a legible transmission, if given by telex or telegram, on the first
business day after delivery when delivered by overnight courier, or on the third
business day after the day when deposited with the United States mail, postage
prepaid.
14.2 Governing Law; Severability of Provisions. It is the intention of the
parties that the internal laws of Delaware and, in particular, the provisions of
the Act shall govern the validity of this Agreement, the construction of its
terms and interpretation of the rights and duties of the Partners. If any
portion of this Agreement shall be held to be invalid, the remainder of this
Agreement shall not be affected thereby.
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38
14.3 Entire Agreement. This Agreement constitutes the entire agreement
among the Partners; it supersedes any prior agreement or understanding among
them, oral or written other than each Limited Partner's Subscription Agreement
with respect to such Partner's Interest, which is hereby incorporated herein by
reference. There are no representations, agreements, arrangements or
understandings, oral or written between or among the Partners relating solely to
the subject matter of this Agreement which are not fully expressed herein other
than each Limited Partner's Subscription Agreement. This Agreement may not be
modified or amended other than pursuant to Article IX.
14.4 Headings, etc. The headings in this Agreement are inserted for
convenience of reference only and shall not affect the interpretation of this
Agreement. Wherever from the context it appears appropriate, each term stated in
either the singular or the plural shall include the singular and the plural, and
pronouns stated in either the masculine or the neuter gender shall include the
masculine, the feminine and the neuter.
14.5 Binding Provisions. The covenants and agreements contained herein
shall be binding upon and inure to the benefit of the heirs, executors,
administrators, personal or legal representatives, permitted successors and
assigns of the respective parties hereto.
14.6 No Waiver. The failure of any Partner to seek redress for violation,
or to insist on strict performance, of any covenant or condition of this
Agreement shall not prevent a subsequent act which would have constituted a
violation from having the effect of an original violation.
14.7 Confidentiality. Each Limited Partner will maintain the
confidentiality of non-public information regarding the Partnership, the
Company, the General Partner and any Affiliate of any of them received by such
Limited Partner pursuant to this Agreement in accordance with such procedure, as
it applies generally to information of this kind.
14.8 No Right to Partition. Except as otherwise expressly provided in this
Agreement, the Partners, on behalf of themselves and their shareholders,
partners, heirs, executors, administrators, personal or legal representatives,
successors and assigns, if any, hereby specifically renounce, waive and forfeit
all rights, whether arising under contract or statute or by operation of law, to
seek, bring or maintain any action in any court of law or equity for partition
of the Partnership or any asset of the Partnership, or any interest which is
considered to be Partnership property, regardless of the manner in which title
to any such property may be held.
14.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument,
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provided that each such counterpart shall be executed by the General Partner.
14.10 No Third Party Beneficiary. Nothing contained in this Agreement
shall be deemed to create any third party beneficiary status or grant any rights
to any Capital Contributions to any party who is not a Partner.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Agreement as of the date first above written.
GENERAL PARTNER:
By: Credentials II G.P., Inc.
Its General Partner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
WITHDRAWING CLASS
B LIMITED PARTNERS LIMITED PARTNER
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ LINCOLNSHIRE EQUITY FUND, L.P.
-----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: Lincolnshire Equity
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Partners, L.P.
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Its General Partner
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: Lincolnshire Equity,
----------------------- Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Its General Partner
/s/ M. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
M. ▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Vice President
-----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
- 39 -
41
Schedule A
CAPITAL CONTRIBUTIONS AND PROFIT PERCENTAGES
OF
CSI INVESTMENT PARTNERS II, L.P.
Aggregate Capital Profit
Name and Address of Partner Contribution(s) Percentage
--------------------------- ----------------- ----------
Credentials II G.P. L.P. 20,000.00 1%
c/o Lincolnshire Management, Inc. (11/07/96)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 10,000.00
(04/14/97)
Limited Partner
Lincolnshire Equity Fund, L.P. 1,980,000.00 99%
c/o Lincolnshire Management, Inc. (11/07/96)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 990,000.00
(01/14/97)
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42
Schedule B
Withdrawing Class B LIMITED PARTNERS
Name Number of Shares
-------------------- ----------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1,296.75
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 39.90
▇▇▇▇▇▇ ▇▇▇▇▇▇ 578.55
M. ▇▇▇▇▇▇ ▇▇▇▇▇▇ 598.50
▇▇▇▇▇ ▇. ▇▇▇▇▇ 379.05
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. 458.85
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 299.25
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 39.90
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 99.75
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 99.75
▇▇▇▇ ▇. ▇▇▇▇▇ 99.75
-----
TOTAL 3,990.00
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