SECOND AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP OF
COMPREHENSIVE SOFTWARE SYSTEMS LTD.
THIS SECOND AMENDMENT is made this _____________ day of ____, 1994,
by and between CSS Management, Inc., a Colorado corporation as "General
Partner"; BHC Securities, Inc., Comprehensive Securities Systems, Inc.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Inc., ▇▇▇▇ ▇▇▇▇▇, Inc., ▇▇▇▇▇▇▇▇ & Company Securities, Inc.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., Southwest Securities, Inc. ▇▇▇▇▇▇▇▇ Inc.
and TransTerra Co. as "Limited Partners"; and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Services, Inc.
as the New Limited Partner ("▇▇▇▇▇▇").
WHEREAS, Comprehensive Software Systems Ltd. (the "Partnership") was
formed on February 4, 1993, by the General Partner and the Limited Partners
for the purpose of providing consulting services and to develop software for
securities broker-dealers, banks and other financial institutions utilizing
state of the art hardware and software techniques (the "Software"); and
WHEREAS, the Partnership amended its Agreement of Limited Partnership on
__________________, 1993, to provide for the expansion of the purpose of the
Partnership to include the development of a Fund Server for the Mutual Fund
industry and to develop an imaging system to support current and future
development ventures (the "New Ventures"); and
WHEREAS, ▇▇▇▇▇▇ is interested in investing in the Partnership and
related entities in exchange for a non-exclusive license to use the Software
and the New Ventures; and
WHEREAS, ▇▇▇▇▇▇ is to have the same rights as the other limited partners
to share in the economic benefits of the partnership as more fully set forth
in the partnership agreement; and
WHEREAS, the parties have determined the amount of the capital
contributions to be made by ▇▇▇▇▇▇ as consideration for its interest in the
Partnership based upon their determination of the current value of the
assets of the Partnership, including the services performed and economic
risks taken in producing such assets;
NOW THEREFORE, in consideration for the mutual promises and conditions
set forth herein, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
I. AMENDMENTS TO THE AGREEMENT OF LIMITED PARTNERSHIP. The General
Partner, Limited Partners and ▇▇▇▇▇▇ hereby agree add a new section 3.4 as
defined below and to delete Sections 1.4, 1.5, 2.11, 4.1, 4.2, 4.6, 10.3(d),
10.4, and 11.14 and replace them with the following:
1.4 REGISTERED AGENT. The name and address of the registered agent of
the Partnership for service of process in the State of Colorado is ▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.5 ADDRESS OF GENERAL AND LIMITED PARTNERS.
(a) The name business address and facsimile numbers of the General
Partner is as follows:
CSS Management, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The names, business addresses and facsimile numbers of the
Limited Partners are as follows:
BHC Securities, Inc. ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Comprehensive Securities Systems, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, Inc. ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ & Company Securities, Inc. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Services, Inc. ______________________________
______________________________
( )___________________________
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▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Southwest Securities, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇, Inc. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
TransTerra Co. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
2.11 LIMITED PARTNERS shall mean BHC Securities, Inc., Comprehensive
Securities Systems, Inc., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Inc., ▇▇▇▇ ▇▇▇▇▇, Inc., ▇▇▇▇▇▇▇▇ &
Company Securities, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Services, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Associates, Inc., Southwest Securities, Inc., ▇▇▇▇▇▇▇▇ Inc. and TransTerra
Co. and any Person who succeeds them as Limited Partners, but shall not
include a Special Limited Partner.
3.4 CAPITAL CONTRIBUTION OF THE NEW LIMITED PARTNER. ▇▇▇▇▇▇ shall make
an initial capital contribution to the Partnership of on the date of the
execution of this Agreement. Thereafter, Subsequent Monthly Capital
Contributions of shall be payable the first business day of each
month commencing September 1994 through January 1996.
4.1 SHARING RATIOS. The Initial and Subsequent Sharing Ratios of the
Partners shall be as follows:
NAME OF PARTICIPANT INITIAL SUBSEQUENT
SHARING SHARING
RATIOS RATIOS
BHC Securities, Inc.
Comprehensive Securities Systems, Inc.
CSS Management, Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Inc.
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▇▇▇▇ ▇▇▇▇▇, Inc.
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▇▇▇▇▇▇▇▇ & Company Securities, Inc.
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▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
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Southwest Securities, Inc.
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▇▇▇▇▇▇▇▇ Inc.
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TransTerra Co. 10.89% 6.25%
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Services, Inc.
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TOTALS
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The Initial Sharing Ratios shall apply to all allocations of Net Loss before
Project Completion; and the Subsequent Sharing Ratios shall apply for all
periods thereafter during which Project Completion remains attained in
accordance with the definition thereof contained in Section 2.18 hereof.
Distributions from operations or from a sale or other disposition of all, or
a substantial portion, of the assets of the Partnership shall be made in
proportion to Subsequent Sharing Ratios, in the same manner as the
distribution of proceeds of liquidation in Section 10.3(d) below, regardless
of the status of Project Completion.
4.2 ALLOCATION OF NET PROFIT AND NET LOSS. Subject to Sections 4.3, 4.4 and
4.5 hereof, Net Profit and Net Loss shall be allocated among the Partners as
follows:
(a) Net Loss shall be allocated among Partners in proportion to
their Initial or Subsequent Sharing Ratios, as the case may be,
provided, however, no amount of Net Loss shall be allocated to a Partner
with a negative balance in its Capital Account in excess of the amount
such Partner is obligated to restore to the Partnership, or deemed to
be obligated to restore to the Partnership pursuant to Treasury
Regulation Section 1.704. Any Net Loss that cannot be allocated to a
Partner because it has a negative balance in its Capital Account in
excess of the amount it is obligated, or deemed to be obligated, to
restore to the Partnership shall be allocated among the remaining
Partners without such excess amounts of negative balances in their
Capital Accounts in proportion to their applicable Initial or
Subsequent Sharing Ratios.
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(b) Net Income from operations shall be allocated among the
Partners in proportion to the amount of actual distributions of
Distributable Cash made in the current and all prior fiscal years,
to the extent of such actual distributions.
(c) Net Income from operations in excess of the amount of actual
distributions of Distributable Cash in the current and all prior
fiscal years shall be allocated in proportion to Subsequent Sharing
Ratios.
(d) Net Income from a sale or other disposition of all, or a
substantial portion, of the assets of the Partnership shall be allocated
among the Partners so as to cause the Capital Accounts of all Partners
to be in proportion to the Subsequent Sharing Ratios of the Partners.
4.6 DISTRIBUTIONS OF DISTRIBUTABLE CASH. Any Distributable Cash shall be
distributed to the Partners in accordance with the Subsequent Sharing Ratios
set forth in Section 4.1 at such times and in amounts as determined by the
Board of Directors of the General Partner, in its discretion; provided that
all Distributable Cash on hand shall be distributed at least annually within
one hundred twenty (120) days after the expiration of each fiscal year of the
Partnership. Notwithstanding any other provision hereof, if the Partnership
reports any taxable income for any fiscal year, the Partnership shall make a
good faith effort to distribute sufficient cash distributions to its Limited
Partners so that they would be able to pay federal, state, and local income
taxes with such distributions on such income at the highest effective rate
that any Limited Partner is subject to for such fiscal year. The Board of
Directors of the General Partner may from time to time also allow a Partner
to withdraw Distributable Cash from the Partnership, without concurrent
distributions to other Partners in accordance with the Sharing Ratios, if
agreed to in writing by all Partners. Such draws shall be repaid to the
Partnership from future distributions of Distributable Cash to the Partner.
10.3 (d) To the Partners in accordance with their Subsequent Sharing Ratios.
If at the time of liquidation the General Partner shall determine that an
immediate sale of part or all or the Partnership assets would cause undue
loss to the Partners, the General Partner may, in order to avoid loss, either
defer liquidation and retain the assets or distribute the assets to the
Partners in kind. In the event that the General Partner elects to distribute
such assets in kind, in determining the Partners' Subsequent Sharing Ratios
applicable to the distribution, the assets shall first be assigned a value
and the unrealized appreciation or depreciation in value of the assets shall
be allocated
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to the Partner's capital accounts, as if such assets had been sold and the
gain or loss allocated in the manner described in Article IV.
10.4 DEFICIT CAPITAL ACCOUNTS. It is understood and agreed that one purpose
of the provisions of Section 4.2, 4.3, 4.4, 4.5 and 4.7 is to ensure that
none of the Partners has a negative balance in their Capital Account upon
liquidation and to ensure that all allocations under this Partnership
Agreement will be respected by the Internal Revenue Service. The Partners and
the Partnership do not intend or expect that any Partner will have a negative
balance in its Capital Account upon liquidation, after all capital Account
adjustments for gain on sale or distribution, and the actual distribution of
proceeds, and the provisions of this Agreement shall be construed and
interpreted to give effect to such intention. No Partner shall have any
obligation upon dissolution of the Partnership or at any other time to
restore a negative balance in its Capital Account.
11.4 LIMITATION ON USE IN CASE OF DISTRIBUTION OF SOFTWARE. To the extent
that any of the Partners receive rights to any of the assets of the
Partnership by distribution in liquidation or otherwise, such Partners agree
that they will be subject to and shall comply with the limitations on the use
of Partnership software and the confidentiality provisions contained herein,
subject however to the terms of any other agreement the Partners may enter
into with the Partnership or among themselves which shall govern. The terms
of this Section 11.14 shall survive any termination of this Agreement. Each
Partner or Affiliate of the Partner shall have a worldwide, personal,
nontransferable, and nonexclusive right to reproduce, modify, translate, and
use the software. The software shall be used only for the processing of the
brokerage business of the Partner or an Affiliate of the Partner, including,
but not limited to, correspondent business on either a fully disclosed or
omnibus basis, and shall not be used in the operation of a service bureau or
sold or otherwise made available for use by a non-Affiliated entity without
the payment to the Partnership of additional consideration which is
commercially reasonable for the non-Affiliated services being provided. Such
compensation shall be mutually agreed upon by the user and the Partnership.
The software and any modifications, changes, enhancements, conversions,
upgrades or additions made to the software, made by the Partnership or a
third party on the Partnership's behalf, shall be the sole and exclusive
property of the Partnership, including all applicable rights to patents,
copyrights, trademarks and trade secrets inherent therein and appurtenant
thereto. Any modifications, changes, enhancements, conversions, upgrades or
additions made to the software by a Partner or an Affiliate of the Partner
or a third party on the Partner's or an Affiliate's behalf ("Permitted
Modifications") shall be the sole and exclusive property of such Partner or
Affiliate, including all applicable rights to patents, copyrights, trademarks
and trade secrets inherent therein and appurtenant thereto and the Partner
or its Affiliate shall have the right to use the Permitted Modifications
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without charge pursuant to the terms of the License Agreement.
Notwithstanding the above, nothing herein shall prevent the making of
modifications, changes, enhancements, upgrades or additions or developing any
new software products by a Partner which produce the same or similar results,
data, reports or information produced by the Permitted Modifications. Each
Partner shall not sell, transfer, publish, disclose, display or otherwise
make available to others (except for Affiliates) any source code, object
code, documentation or other material relating to the software. Each Partner
shall obtain agreements from its employees and the Affiliates' employees
maintaining confidentiality of, and prohibiting unauthorized use or
disclosure of, the source code or object code of the software or of any
portion of the software, or any of the algorithms or logic contained therein.
Without limitation of the foregoing, a Partner shall advise the other
Partners immediately in the event that the Partner learns or has reason to
believe that any person who has had access to the software, or any portion
thereof, has violated or intends to violate the terms of this Section; and
the Partner will (at such Partner's own expense), cooperate with the other
Partners in seeking injunctive or other equitable relief against such Person.
II. AMENDMENTS TO FIRST AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP. The
General Partner, Limited Partners and ▇▇▇▇▇▇ hereby agree to amend and
restate the First Amendment to the Agreement of Limited Partnership as
follows:
1. MONTHLY CONTRIBUTIONS OF PARTNERS. The Limited Partners and
▇▇▇▇▇▇ agree to make the following monthly contributions IN ADDITION to
the current contributions being made by the Limited Partners pursuant to
Article 3.1 and by ▇▇▇▇▇▇ pursuant to Article 3.4 of the Partnership
Agreement:
Partner Amount Paid/Mo. Amount Paid/Mo. Amount Paid/Mo.
------- from Oct. 93 - Mar. 94 from Apr. 94 - Sept. 94 Oct. 94 - End
---------------------- ----------------------- ---------------
BHC Securities, Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Inc.
▇▇▇▇ ▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇▇ & Company
Securities, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Services, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Associates, Inc.
Southwest Securities, Inc.
▇▇▇▇▇▇▇▇ Inc.
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TransTerra Co. $16,995.41 $5,949.81 $2,718.75
* Payments shall begin September 1, 1994.
3. SHARING RATIOS. The Initial and Subsequent Sharing Ratios
described in Article IV of the Partnership Agreement shall be unaffected
except as specifically stated in Section I above. The General Partner is not
required to contribute additional capital hereunder (the "Non-Contributing
Partner").
4. RIGHT TO USE NEW SYSTEM. Any technology developed by the Partnership
pursuant to the New Ventures shall be the exclusive property of the
Partnership. Except for Comprehensive Securities Systems, Inc., each of the
other Limited Partners and ▇▇▇▇▇▇, (the "Brokers") shall have a right to use
any marketable system which is developed pursuant to the New Venture (the
"New System") pursuant to a licensing agreement which shall be substantially
in the form of the License Agreement attached as Exhibit B to the First
Amendment to the Participation and Shareholder Agreement dated on even date
herewith, between the parties.
III. AGREEMENT OF ▇▇▇▇▇▇ TO ABIDE BY ALL TERMS AND CONDITIONS OF THE
AGREEMENT OF LIMITED PARTNERSHIP. By executing this Amendment below ▇▇▇▇▇▇
represents, warrants and agrees that:
(a) ▇▇▇▇▇▇ has received an executed copy of the Agreement of Limited
Partnership and the First Amendment thereto, and along with the amendments
expressed herein, ▇▇▇▇▇▇ agrees to abide and be bound by the terms and
conditions contained therein;
(b) ▇▇▇▇▇▇ understands and agrees to be bound by the confidentiality
provisions contained in the Agreement of Limited Partnership; and
(c) ▇▇▇▇▇▇ knows of no reason why it cannot enter into this Agreement
and become a Limited Partner in Comprehensive Software Systems, Ltd. and that
doing so will not cause a breach of any agreements or create any liability
for the General Partner, Limited Partners or ▇▇▇▇▇▇ except those liabilities
expressed herein.
IV. CONSENT AND AGREEMENT OF THE GENERAL PARTNER AND LIMITED PARTNERS. The
General Partner and the Limited Partners hereby expressly agree to the
admission of ▇▇▇▇▇▇ as a Limited Partner in Comprehensive Software Systems,
Ltd. In addition, the General Partner and the Limited Partners hereby
understand, acknowledge and agree to the modifications in the Initial and
Subsequent Sharing Ratios as defined above. Except as expressly stated above,
the Capital Contributions of the General Partner, Limited Partners and ▇▇▇▇▇▇
shall not be affected by this amendment.
V. SURVIVAL OF THE PARTNERSHIP. In the event of any conflict between the
Partnership Agreement, the First Amendment and this Second Amendment, the
terms and conditions of the First Amendment shall control over the
Partnership Agreement and the terms and conditions of
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the Second Amendment shall control over both the First Amendment and the
Second Amendment. All other terms and conditions of the Partnership Agreement
are hereby ratified and remain in full force and effect.
VI. SIGNATURES AND COUNTERPARTS. This Agreement may be signed in
counterpart, which when held together shall be deemed an original. Facsimile
signatures shall be treated as originals.
DATED the day and year first written above.
CSS MANAGEMENT, INC. BHC SECURITIES, INC.
----------------------------------- -------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By:
------------------------------- ---------------------------
Its: President Its:
------------------------------- ---------------------------
COMPREHENSIVE SECURITIES ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ INC.
SYSTEMS, INC.
----------------------------------- -------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By:
------------------------------- ---------------------------
Its: President Its:
------------------------------- ---------------------------
▇▇▇▇ ▇▇▇▇▇, INC. ▇▇▇▇▇▇▇▇ & COMPANY
SECURITIES, INC.
----------------------------------- -------------------------------
By: By:
------------------------------- ---------------------------
Its: Its:
------------------------------- ---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC. SOUTHWEST SECURITIES, INC.
----------------------------------- -------------------------------
By: By:
------------------------------- ---------------------------
Its: Its:
------------------------------- ---------------------------
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▇▇▇▇▇▇▇▇ INC. TRANSTERRA CO.
/s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------- -------------------------------
By: By: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------- ---------------------------
Its: Its: Chairman
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SERVICES, INC.
-----------------------------------
By:
------------------------------
Its:
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