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EXHIBIT 10.18
GENERAL PARTNERSHIP AGREEMENT
OF
DAP/LUBECO PARTNERSHIP
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TABLE OF CONTENTS
ARTICLE 1. FORMATION OF PARTNERSHIP............................................................... 1
1.1 Execution and Filing of Agreement.................................................... 1
1.2 Full Compliance...................................................................... 1
ARTICLE 2.-- NAME OF PARTNERSHIP................................................................... 2
ARTICLE 3.-- BUSINESS OF THE PARTNERSHIP........................................................... 2
ARTICLE 4.-- NAMES AND ADDRESS OF PARTNERS......................................................... 2
ARTICLE 5.-- PARTNERSHIP UNITS AND PERCENTAGES..................................................... 2
ARTICLE 6.-- TERM.................................................................................. 3
ARTICLE 7.-- BUSINESS OFFICES...................................................................... 3
ARTICLE 8.-- CAPITAL AND CONTRIBUTIONS............................................................. 3
8.1 Initial Capital Contributions........................................................ 3
8.2 Capital Calls........................................................................ 3
8.3 Non-Contribution by Partners......................................................... 3
8.4 Interest on Capital Contributions.................................................... 3
8.5 Withdrawal and Return of Capital Contributions....................................... 4
ARTICLE 9. DISTRIBUTIONS.......................................................................... 4
9.1 Distributions as Between Partners.................................................... 4
9.2 Timing of Distributions and Discretion of Partners as to Reinvestment................ 4
9.3 Distributions of Capital............................................................. 4
ARTICLE 10. ALLOCATION OF PROFITS AND LOSSES FOR TAX PURPOSES..................................... 4
10.1 General Allocation of Profits and Losses............................................. 4
10.2 Regulator Allocations................................................................ 5
(b) Allocation in the Event of Section 754 Election............................. 5
10.3 Curative Allocations................................................................. 5
10.4 Special Tax Allocations.............................................................. 6
(a) Contributed Property........................................................ 6
(b) Adjusted Property........................................................... 6
(c) Recapture of Deductions and Credits......................................... 6
(d) Binding Nature of Elections Made............................................ 6
10.5 Allocation in the Event of Transfer.................................................. 6
ARTICLE 11. BOOKS OF ACCOUNT, RECORDS AND REPORTS................................................. 7
11.1 Responsibility for Books and Records................................................. 7
11.2 Reports to Partners.................................................................. 7
11.3 Additional Reports................................................................... 7
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GENERAL PARTNERSHIP AGREEMENT
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ARTICLE 12. FISCAL YEAR........................................................................... 8
ARTICLE 13. PARTNERSHIP FUNDS..................................................................... 8
ARTICLE 14. TRANSFERS OF INTERESTS................................................................ 8
ARTICLE 15. JOINT AGREEMENT....................................................................... 8
ARTICLE 16. DEFINITIONS........................................................................... 8
16.1 Act.................................................................................. 8
16.2 Agreed Value......................................................................... 8
16.3 Agreement............................................................................ 9
16.4 Bankruptcy........................................................................... 9
16.5 Capital Account...................................................................... 10
16.6 Capital Contribution................................................................. 11
16.7 Code................................................................................. 11
16.8 Incapacity........................................................................... 11
16.9 Interest............................................................................. 11
16.10 General Partner or Partner........................................................... 11
16.11 Majority of Partners................................................................. 11
16.12 Net Cash Flow........................................................................ 11
16.13 Partnership Percentages, Partnership Interests and Partnership Units................. 12
16.14 Tax Matters Partner.................................................................. 12
16.15 Taxable Income and Tax Losses........................................................ 12
ARTICLE 17. RELIANCE BY THIRD PARTIES............................................................. 12
ARTICLE 18. TITLE TO PARTNERSHIP ASSETS........................................................... 13
ARTICLE 19. DISSOLUTION OF THE PARTNERSHIP........................................................ 13
ARTICLE 20. WINDING UP, TERMINATION,
AND LIQUIDATING DISTRIBUTIONS.............................................. 13
20.1 Winding Up........................................................................... 13
20.2 Distributions........................................................................ 14
20.3 Deficit Account Restoration.......................................................... 14
20.4 Final Reports........................................................................ 15
ARTICLE 21. WAIVER OF PARTITION................................................................... 15
ARTICLE 22. NOTICES............................................................................... 15
ARTICLE 23. GOVERNING LAWS........................................................................ 15
ARTICLE 24. EFFECT................................................................................ 15
ARTICLE 25. PRONOUNS AND NUMBER................................................................... 15
ARTICLE 28. COUNTERPARTS........................................................................... 16
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GENERAL PARTNERSHIP AGREEMENT
OF
DAP/LUBECO PARTNERSHIP
This General Partnership Agreement (the "Agreement") is made and
entered into as of the 1st day of March, 1997, by and between DAP/LUBECO CORP.,
a Nevada corporation, and LUBECO MANAGEMENT, INC., a Delaware corporation,
(sometimes individually referred to herein as a "Partner" or collectively as the
"Partners").
W I T N S S E T H:
WHEREAS, DAP/LUBECO CORP. is a wholly-owned subsidiary of Discount Auto
Parts, Inc., a Florida corporation ("DAP"); and
WHEREAS, LUBECO MANAGEMENT, INC. is a wholly-owned subsidiary of QLube,
Inc., a Delaware corporation ("QLUBE") ; and
WHEREAS, DAP and QLUBE have entered into that certain Master Joint
Business Agreement dated as of the 1st day of January, 1997 (the "Joint
Agreement"), a copy of which is attached hereto as Schedule "A" and made a part
hereof; and
WHEREAS, paragraph 3 of the Joint Agreement contemplates the formation
of an entity to own and operate the business described in the Joint Agreement;
and
WHEREAS, DAP and QLUBE have determined that a Nevada general
partnership is an appropriate form of entity to conduct such business pursuant
to the terms and conditions of the Joint Agreement and would like to own and
control their interests in the partnership through the Partners.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained in this Agreement, the parties agree as follows:
ARTICLE 1. FORMATION OF PARTNERSHIP
The Partners hereby form a Partnership (the "Partnership") pursuant to the
Hawaii Uniform Partnership Act (the "Act") as adopted under Nevada Revised
Statutes Chapter 87. The rights and duties of the Partners shall be as provided
in the Act except as modified by this Agreement.
1.1 EXECUTION AND FILING OF AGREEMENT:
The parties hereto shall execute promptly all certificates and
other documents which are needed to accomplish all filing,
recording, publishing and other acts appropriate to comply
with all requirements for the formation and operation of a
general partnership under the laws of the State of Hawaii and
for the formation, qualification and operation of a general
partnership in all other jurisdictions where the Partnership
shall propose to conduct business.
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1.2 FULL COMPLIANCE:
Prior to or concurrently with the conducting of any business
in any jurisdiction, the Partnership shall comply, to the full
extent permitted by the laws of such jurisdiction, with all
requirements for the qualification or formation of the
Partnership to conduct business as a general partnership in
such jurisdiction.
ARTICLE 2. -- NAME OF PARTNERSHIP
The business of the Partnership shall be conducted under the name "DAP/LUBECO
Partnership" or such other name as the Partners shall hereafter determine.
Subject to all applicable laws, the business of the Partnership may be conducted
under any other name or names as a majority in interest of the Partners deem
appropriate to comply with the laws of the jurisdictions in which the
Partnership does business.
ARTICLE 3. -- BUSINESS OF THE PARTNERSHIP
The purpose and business of the Partnership shall be to engage in any business
which may lawfully be conducted by the Partnership under Hawaii Revised
Statutes, including the business of operation of real property investment,
management and leasing. The Partnership's business may include, without
limitation, the acquisition, development, management, operation and disposition
of real, personal and intangible property, the carrying on of any business or
activities relating thereto or arising therefrom, the entering into of any
partnership, joint venture or other similar arrangement to engage in any of the
foregoing or the ownership of interests in any entity engaged in any of the
foregoing, and anything incidental or necessary to the foregoing.
ARTICLE 4. -- NAMES AND ADDRESS OF PARTNERS
The names and addresses of the General Partners are:
DAP/LUBECO CORP.
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Attention: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇
LUBECO MANAGEMENT, INC.
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ARTICLE 5. -- PARTNERSHIP UNITS AND PERCENTAGES
The Initial Partnership Percentages of the Partners and Units to be owned by
each such Partner shall be as detailed on the Schedule A attached hereto and
incorporated herein by this reference.
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ARTICLE 6. -- TERM
The term of the Partnership began as the effective date of this Agreement and
shall continue until the earliest of:
(i) the termination of the Joint Agreement;
(ii) Twenty (20) years; or
(iii) an act or event of dissolution otherwise specified in this
Agreement or the Joint Agreement or by the law as one
effecting dissolution.
ARTICLE 7. -- BUSINESS OFFICES
The principal place of business of the Partnership shall be at ▇▇▇▇ ▇▇▇▇▇▇▇▇
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interest of the Partners may from time to time determine.
ARTICLE 8. -- CAPITAL AND CONTRIBUTIONS
8.1 INITIAL CAPITAL CONTRIBUTIONS:
The Partners initially shall make Capital Contributions in
property totalling One Hundred Thousand and NO/100 Dollars
($100,000.00) and among them in accordance with Partnership
Unit Percentages in the amounts detailed on the attached
Schedule "B". The Partners' initial Capital Contributions
shall be made as soon as practicable after execution of this
Agreement.
8.2 CAPITAL CALLS:
In addition to the Capital Contributions required by Paragraph
8.1, any additional capital contributions shall be made, if at
all, in accordance with the provisions of subparagraph b of
paragraph 4 the Joint Agreement.
8.3 NON-CONTRIBUTION BY PARTNERS:
If any Partner fails to pay all or any portion of an
additional assessment called pursuant to Paragraph 8.2 (an
"Assessment Payment") in a timely manner, then, in that event,
the contributing Partner may make an additional contribution
to cover the amount needed and the non-contributing Partners
shall be liable to the Partnership as provided for in
subparagraph b of paragraph 4 of the Joint Agreement.
8.4 INTEREST ON CAPITAL CONTRIBUTIONS:
No Partner shall be entitled to interest on any Capital
Contribution, except as otherwise may be provided for in the
Joint Agreement.
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8.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS:
No Partner shall be entitled to withdraw any part of such
Partner's Capital Contribution, or to receive any
distributions from the Partnership except as provided by the
Joint Agreement.
ARTICLE 9. DISTRIBUTIONS
9.1 DISTRIBUTIONS AS BETWEEN PARTNERS:
Except as may otherwise be provided in the Joint Agreement,
the Partnership may distribute all or a portion of the Net
Cash Flow among the Partners in accordance with their
respective Partnership Percentages.
9.2 TIMING OF DISTRIBUTIONS AND DISCRETION OF PARTNERS AS TO
REINVESTMENT:
Partnership distributions, if any, will be made to those
persons recognized on the books of the Partnership as Partners
or as assignees of Interests on the day of the distribution.
To the extent permitted by law and as permitted by any loan
agreements entered into by the Partnership, the Partnership's
Net Cash Flow may in whole or in part be reinvested in the
Partnership's business or distributed to the Partners, as
determined by a majority in interest of the Partners.
9.3 DISTRIBUTIONS OF CAPITAL:
Except as may otherwise be provided for in the Joint
Agreement, the Partners may from time to time, by majority
vote, cause the Partnership to distribute cash and/or other
property to the Partners as a return of capital. Distributions
made pursuant to this Paragraph 9.3 need not be made in
accordance with the Partner's units or capital accounts.
Rather, distributions pursuant to this Paragraph 9.3 can be
made to any Partner, as long as that distribution is
designated as a "return of capital;" provided, however, that
distributions under this Paragraph 9.3 may only be made to a
Partner to the extent of the positive balance in that
Partner's capital account and provided, further, that no
distribution under this Paragraph 9.3 may be made that is not
pro rata to all partners without the express written consent
of a majority of the Partners.
ARTICLE 10. ALLOCATION OF PROFITS AND LOSSES FOR TAX PURPOSES
10.1 GENERAL ALLOCATION OF PROFITS AND LOSSES:
Except as otherwise provided in this Agreement or the Joint
Agreement, the profits and losses of the Partnership arising
during any taxable year of the Partnership shall be allocated
among the Partners in accordance with their respective
Partnership Percentages; provided, however, that in accordance
with Section 704(c) of the Code and the Treasury Regulations
thereunder, income, gain, loss, and deduction with respect to
any property contributed to the capital of the Partnership
shall, solely for tax purposes, be allocated among the
Partners so as to take account of any variation between the
adjusted basis of
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such property to the Partnership for federal income tax
purposes and its agreed upon fair market value at the time of
contribution.
10.2 REGULATOR ALLOCATIONS:
(a) MINIMUM GAIN CHARGEBACK:
Notwithstanding any other provision of this Paragraph
10, if there is a net decrease in Partnership minimum
gain during any Partnership fiscal year, and if a
Partner would otherwise have an adjusted capital
account deficit at the end of that year (after giving
effect to all other adjustments to the Partners'
capital account with respect to that year), that
Partner shall be specially allocated items of
Partnership income and gain for such year (and, if
necessary, for subsequent years) in an amount and
manner sufficient to eliminate the adjusted capital
account deficit as quickly as possible. The items to
be so allocated shall be determined in accordance
with Treasury Regulation Section
1.704-1(b)(4)(iv)(e). This Paragraph 10.3 is intended
to comply with the minimum gain chargeback
requirement in the Treasury Regulations and shall be
interpreted consistently therewith.
(b) ALLOCATION IN THE EVENT OF SECTION 754 ELECTION:
To the extent an adjustment to the adjusted tax basis
of any Partnership asset pursuant to Code Section
734(b) or Section 743(b) is required, pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to
be taken into account in determining capital
accounts, the amount of that adjustment to the
capital accounts shall be treated as an item of gain
(if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases the basis of the
asset), and that gain or loss shall be specially
allocated to the Partners in the manner consistent
with the manner in which their capital accounts are
required to be adjusted pursuant to that Treasury
Regulation.
10.3 CURATIVE ALLOCATIONS:
The allocations set forth in Paragraphs 10.2 and 10.3 of this
Agreement (the "regulatory allocations") are intended to
comply with certain requirements of Treasury Regulation
Section 1.704-1(b). Notwithstanding any other provisions of
this Paragraph 10 (other than the regulatory allocations), the
regulatory allocations shall be taken into account in
allocating other profits, losses and items of income, gain,
loss and deduction among the Partners so that, to the extent
possible, the net amount of the allocations of other profits,
losses and other items in the regulatory allocations to each
Partner shall be equal to the net amount that would have been
allocated to each Partner if the regulatory allocations had
not occurred.
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10.4 SPECIAL TAX ALLOCATIONS:
(a) CONTRIBUTED PROPERTY:
In accordance with Code Section 704(c) and the
Treasury Regulations thereunder, income, gain, loss
and deduction with respect to any property
contributed to the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to
take account of any variation between the adjusted
basis of that property to the Partnership for federal
income tax purposes and its initial agreed value
(computed in accordance with Paragraph 16.2(a)
hereof).
(b) ADJUSTED PROPERTY:
In the event the agreed value of any Partnership
asset is adjusted pursuant to Paragraph 16.2(b)
hereof, subsequent allocations of income, gain, loss
and deduction with respect to that asset shall take
into account any variation between the adjusted basis
of that asset for federal income tax purposes and its
agreed value in the same manner as the variation
between federal income tax basis and agreed value is
taken into account under Paragraph 10.5(a) with
respect to contributed property.
(c) RECAPTURE OF DEDUCTIONS AND CREDITS:
If any "recapture" of deductions or credits
previously claimed by the Partnership is required
under the Code upon the sale or other taxable
disposition of any Partnership property, those
recaptured deductions or credits shall, to the extent
possible, be allocated to the Partners pro rata in
the same manner that the deductions and credits
giving rise to the recapture items were originally
allocated using the "first-in, first-out" method of
accounting; provided, however, that this Paragraph
10.4(c) shall only affect the characterization of
income allocated among the Partners for tax purposes.
(d) BINDING NATURE OF ELECTIONS MADE:
Any elections or other decisions relating to the
allocations under this Paragraph 10.5 shall be made
by majority vote of the Partners in any manner that
reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Paragraph
10.4 are solely for 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 profits, losses, other items or
distributions pursuant to any provision of this
agreement.
10.5 ALLOCATION IN THE EVENT OF TRANSFER:
In the event additional or substituted Partners are admitted
to the Partnership, the profits and losses allocated to the
Partners for that fiscal year shall be allocated among them in
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accordance with Code Section 706, using any convention
permitted by law and selected by the Partners.
ARTICLE 11. BOOKS OF ACCOUNT, RECORDS AND REPORTS
11.1 RESPONSIBILITY FOR BOOKS AND RECORDS:
Proper and complete records and books of account shall be kept
for the Partnership's business as are usually entered into
records and books of account maintained by persons engaged in
businesses of a like character, including a capital account
for each Partner. The Partnership books and records shall be
prepared in accordance with generally accepted accounting
practices, consistently applied, and shall be kept on the
accrual basis, except in circumstances in which the Partners
determine that another basis of accounting will be in the best
interests of the Partnership. The books and records shall at
all times be maintained at the principal place of business of
the Partnership and shall be open to the inspection and
examination of the Partners or their duly authorized
representatives during reasonable business hours. It is
anticipated the Partnership will engage the services of Q
Lube, Inc., a Delaware corporation, to administer the day to
day operation and management of the Partnership's business and
such other matters as may be delegated by the Partnership.
11.2 REPORTS TO PARTNERS:
As soon as practicable in the particular case, the Partnership
or its designee, shall deliver to each Partner:
(a) Such information concerning the Partnership after the
end of each fiscal year as shall be necessary for the
preparation by such Partner of such Partner's income
or other tax returns;
(b) An unaudited statement as of the end of and for each
fiscal year, a profit and loss statement and a
balance sheet of the Partnership and a statement
showing the amounts allocated to or against each
Interest during that year;
(c) If feasible, on or before March 15 of each year, a
statement setting forth projected Taxable Income or
Tax Losses to be generated by the Partnership for the
fiscal year; and
(d) Other information as may be reasonably necessary for
the Partners to be advised of the results of
operations of the Partnership.
11.3 ADDITIONAL REPORTS:
The Partnership or its designee may prepare and deliver to the
Partners from time to time during each fiscal year, in
connection with distributions or otherwise, unaudited
statements showing the results of operations of the
Partnerships to the date of that statement.
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ARTICLE 12. FISCAL YEAR
The fiscal year of the Partnership shall end on the Tuesday closest to May 31st
of each year, whether such day occurs prior to or subsequent to May 31st.
ARTICLE 13. PARTNERSHIP FUNDS
The funds of the Partnership shall be deposited in such bank account or
accounts, or invested in such interest-bearing or non-interest-bearing
investments, as the Partners may from time to time designate or as a majority in
interest of the Partners may from time to time designate. All withdrawals from
any such bank accounts shall be made by the duly authorized agent or agents of
the Partnership. Partnership funds shall be held in the name of the Partnership
and shall not be commingled with those of any other person.
ARTICLE 14. TRANSFERS OF INTERESTS
No Partner may transfer any interest in the Partnership, except as may otherwise
provided and authorized in the Joint Agreement or by a majority in interest of
the Partners.
ARTICLE 15. JOINT AGREEMENT
Notwithstanding any contrary provision of this Agreement, the terms and
conditions of the Joint Agreement, as now existing or hereafter amended, shall
govern the rights and responsibilities of the Partners to the extent of any
conflicting provision herein or to the extent any aspect of the Partnership
business relationship has not otherwise been addressed herein.
ARTICLE 16. DEFINITIONS
16.1 ACT:
"Act" means the Nevada Uniform Partnership Act, Chapter 87,
Nevada Revised Statutes or any successor act enacted by the
State of Nevada.
16.2 AGREED VALUE:
"Agreed Value" means with respect to any Partnership asset,
the asset's adjusted basis for federal income tax purposes,
except as follows:
(a) the initial agreed value of any asset contributed by
a Partner to the Partnership shall be the gross fair
market value of that asset, as determined by the
contributing partner and the Partnership;
(b) the agreed value of all Partnership assets shall be
adjusted to equal their respective gross fair market
values, as determined by the Partners, as of the
following times:
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(c) the acquisition of an additional interest in the
Partnership after the effective date by any new or
existing Partner in exchange for more than a de
minimis capital contribution;
(d) the distribution by the Partnership to a Partner of
more than a de minimis amount of Partnership property
as consideration for an interest in the partnership
if the Partner reasonably determines that such
adjustment is necessary or appropriate to reflect the
relative economic interest of the partners of the
Partnership; and
(e) the liquidation of the Partnership within the meaning
of Treasury Regulation Section 1.704-1(b)(2)(ii)(g);
(f) the agreed value of any Partnership asset distributed
to any partner shall be the gross fair market value
of that asset on the date of distribution; and
(g) if an election under Code Section 754 has been made,
the agreed value of Partnership assets shall be
increased (or decreased) to reflect any adjustments
to the adjusted basis of the assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to
the extent that those adjustments are taken into
account in determining capital accounts pursuant to
Treasury Regulation Section 1.704- 1(b)(2)(iv)(m) and
Paragraph 10.3 hereof; provided, however, that agreed
value shall not be adjusted pursuant to this
Paragraph 16.2(d) to the extent that the Partners
determine that an adjustment pursuant to Paragraph
16.2(b) hereof is necessary or appropriate in
connection with a transaction that would otherwise
result in an adjustment pursuant to this Paragraph
16.2(d).
If the agreed value of an asset has been determined or
adjusted pursuant to Paragraph 16.2(a), 16.2(b) or 16.2(c)
hereof, that agreed value shall thereafter be adjusted by the
depreciation, if any, taken into account with respect to that
asset for purposes of computing profits and losses.
16.3 AGREEMENT:
"Agreement" means this Partnership Agreement, as amended,
modified, or supplemented from time to time.
16.4 BANKRUPTCY:
"Bankruptcy" shall be deemed to have occurred with respect to
any Partner Sixty (60) days after the happening of any of the
following:
(a) the filing of an application by a Partner for, or a
consent to, the appointment of a trustee of the
Partner's assets;
(b) the filing by a Partner of a voluntary petition in
bankruptcy or the filing of a pleading in any court
of record admitting in writing the Partner's
inability to pay the Partner's debts as they become
due;
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(c) the making by a Partner of a general assignment for
the benefit of creditors;
(d) the filing by a Partner of an answer admitting the
material allegations of, or consenting to, or
defaulting in answering a bankruptcy petition filed
against the Partner in any bankruptcy proceeding; or
(e) the entry of an order, judgment, or decree by any
court of competent jurisdiction adjudicating a
Partner a bankrupt or appointing a trustee of the
Partner's assets, and that order, judgment, or decree
continuing unstayed and in effect for a period of
sixty (60) days.
16.5 CAPITAL ACCOUNT:
"Capital Account" means with respect to each Partner, the
account established on the books and records of the
Partnership for each Partner under Paragraph 11.1. Each
Partner's Capital Account shall initially equal the cash and
the agreed value of property (net of liabilities assumed or to
which the property is subject) contributed by the Partner to
the Partnership, and during the term of the Partnership shall
be:
(a) increased by the amount of:
(1) Taxable Income allocated to the Partner,
other than Taxable Income attributable to
the difference between the agreed value and
adjusted basis of the property at
contribution, and
(2) any money and the agreed value of property
(net of any liabilities assumed or to which
the property is subject) subsequently
contributed to the Partnership, and
(b) decreased by the amount of:
(1) Tax Losses allocated to the Partner, except:
(i) Tax Losses attributable to
depreciation of contributed
property, which shall decrease
Capital Accounts only to the extent
of depreciation computed as if the
property were purchased by the
Partnership at its agreed value, and
(ii) Tax Losses attributable to the
difference between the agreed value
and adjusted basis of property at
contribution (which shall not
decrease the contributing Partner's
Capital Account), and
(2) All cash and the agreed value of property
(net of liabilities assumed or to which the
property is subject) distributed to such
Partner, and shall otherwise be kept in
accordance with applicable Treasury
Regulations.
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16.6 CAPITAL CONTRIBUTION:
"Capital Contribution" means the amount of money or the agreed
value of other property contributed to the Partnership by a
Partner, reduced by the amount of indebtedness to which the
non-cash property is subject to at the time of transfer and
the amount of any other indebtedness assumed by the
Partnership in connection with the contribution to the
Partnership.
16.7 CODE:
"Code" means the Internal Revenue Code of 1986, as amended,
modified, or rescinded from time to time, or any similar
provision of succeeding law.
16.8 INCAPACITY:
"Incapacity" or "Incapacitated" means the incompetence,
insanity, interdiction, death, disability, or incapacity, as
the case may be, of any Partner.
16.9 INTEREST:
"Interest" means the entire ownership interest of a Partner in
the Partnership.
16.10 GENERAL PARTNER OR PARTNER:
"General Partner" or "Partner" in the singular means either of
DAP/LUBECO Corp. or Lubeco Management, Inc.. "General
Partners" or "Partners" shall mean both of the previously
described entities. In the event that both either Partner is
at any time no longer a Partner, or is replaced by vote of the
Partners as provided herein, the term shall mean the party or
parties then acting in that capacity.
16.11 MAJORITY OF PARTNERS:
"Majority of Partners" (rather than meaning the majority of
the number of the Partners of the Partnership) means the
majority of the Partnership Units or Partnership Percentages.
16.12 NET CASH FLOW:
"Net Cash Flow" with respect to any fiscal period means all
cash revenues of the Partnership during that period (including
interest or other earnings on the funds of the Partnership"),
less the sum of the following to the extent made from those
cash revenues:
(a) All principal and interest on any indebtedness of the
Partnership;
(b) All expenses incurred incident to the operations of
the Partnership's business; and
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(c) Funds set aside as reserves for contingencies,
working capital, debt service, taxes, insurance, or
other costs or expenses incident to the conduct of
the Partnership's business, which the General Partner
deems reasonably necessary or appropriate.
16.13 PARTNERSHIP PERCENTAGES, PARTNERSHIP INTERESTS AND PARTNERSHIP
UNITS:
"Partnership Percentages," "Partnership Interests" and
"Partnership Units" as used in this Agreement are different
measuring tools to determine each Partner's interest in the
Partnership. All three terms reflect the same item; the amount
of the Partnership so owned by each such Partner. Partnership
Units can be converted into Partnership Percentages by
calculating the number of Partnership Units owned by a Partner
and dividing such number of units by the total number of units
owned by all Partners in the Partnership. Partnership
Percentages can likewise be converted into Partnership Units
by multiplying the Partnership Percentage of a Partner by the
total number of Partnership Units then outstanding.
Partnership Interests shall be the entire interest in the
Partnership owned by any one (or, as the case may be, more)
Partner, whether reflected in Units or Percentages.
16.14 TAX MATTERS PARTNER:
DAP/LUBECO CORP. is designated the "Tax Matters Partner," as
that term is defined in Code Section 6231 and any similar
provisions of state or local law, and is authorized and
required to represent the Partnership (at the Partnership's
expense) in connection with all examinations of the
Partnership's affairs by tax authorities, including resulting
administrative and judicial proceedings and to expend
Partnership funds for professional services and costs
associated therewith. The Partners agree to cooperate with the
"Tax Matters Partner" and to do or refrain from doing any or
all things reasonably required by the "Tax Matters Partner" to
conduct those proceedings.
16.15 TAXABLE INCOME AND TAX LOSSES:
"Taxable Income" and "Tax Losses," respectively, shall mean
the net income or net losses of the Partnership as determined
for federal income tax purposes, and all items required to be
separately stated by Code Section 702 and the Treasury
Regulations thereunder.
ARTICLE 17. RELIANCE BY THIRD PARTIES
Notwithstanding any other provision in this Agreement to the contrary:
17.1 No seller, lender or purchaser, including any purchaser of
property from the Partnership or any other person dealing with
the Partnership, shall be required to look to the application
of proceeds hereunder or verify any representation by a
Partner as to the extent of the interest in the assets of the
Partnership that the Partners are entitled to encumber, sell
or otherwise use, any seller, lender, purchaser or other
person dealing with the Partnership shall be entitled to rely
exclusively on the representations of the
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Partners as to their authority to enter into any kind of
arrangement intended to bind the Partnership, including,
without limitation, any financing, purchasing or selling of
real property and shall be entitled to deal with a Partner as
if such Partner were the sole party in interest therein, both
legally and beneficially; and
17.2 Every instrument purporting to be the action of the
Partnership and executed by a Partner (or any person,
including employees of the Partnership, authorized from time
to time by the Managing General Partner to execute such
instruments) shall be conclusive evidence in favor of every
person relying thereon or claiming thereunder that, at the
time of delivery thereof, this Agreement was in full force and
effect and that the execution and delivery of that instrument
was duly authorized by the Managing General Partner and the
Partners.
ARTICLE 18. TITLE TO PARTNERSHIP ASSETS
Title to Partnership property, whether real, personal or mixed, tangible or
intangible, shall be deemed to be owned by the Partnership as an entity, and no
Partner, individually or collectively, shall have any ownership interest in
Partnership property or any portion thereof. Title to any or all of the
Partnership property may be held in the name of the Partnership, any (or more
than one) Partner or one or more nominees, as the Partners shall determine. The
Partners hereby agree that any Partnership property for which legal title is
held in the name of a Partner shall be held in trust by such Partner or Partners
for the use and benefit of the Partnership in accordance with the terms and
provisions of this Agreement. All Partnership property shall be recorded as
property of the Partnership on its books and records, irrespective of the name
in which legal title to the Partnership property is held.
ARTICLE 19. DISSOLUTION OF THE PARTNERSHIP
The happening of any one of the following events shall work an immediate
dissolution of the Partnership:
19.1 The sale or other disposition of all or substantially all of
the assets of the Partnership;
19.2 The affirmative vote for dissolution of the Partnership by
Partners having at least Seventy Five (75%) percent of the
aggregate Partnership Percentages;
19.3 The Bankruptcy or Incapacity of any Partner; provided that the
remaining Partners shall continue the business of the
Partnership within the meaning of Nevada Revised Statutes
ss.425 unless the Partnership is dissolved under subparagraph
19.2 above;
19.4 The expiration of the term of the Partnership, as provided in
Article 6 above; or.
19.5 The termination of the Joint Agreement.
ARTICLE 20. WINDING UP, TERMINATION,
AND LIQUIDATING DISTRIBUTIONS
20.1 WINDING UP:
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If the Partnership is dissolved on account of the occurrence
of an event described in Article 19 above, and its business is
not continued under Paragraph 20.3, the Partners or their
successors shall commence to wind up the affairs of the
Partnership and to liquidate the Partnership's assets. The
Partners shall continue to share profits and losses during the
period of liquidation in accordance with Paragraph 10.
Following the occurrence of any of the events set forth in
Paragraph 19 the Partners shall determine whether the assets
of the Partnership are to be sold or whether the assets are to
be distributed to the Partners. If assets are distributed to
the Partners, all such assets shall be valued at their then
fair market value as determined by the Partners and the
difference, if any, of the fair market value over (or under)
the adjusted basis of such property to the Partnership shall
be credited (or charged) to the Capital Accounts of the
Partners in accordance with the provisions of Paragraph 10.
Such fair market value shall be used for purposes of
determining the amount of any distribution to a Partner
pursuant to Paragraph 20.2. If the Partners are unable to
agree on the fair market value of any asset of the
Partnership, the fair market value shall be the average of two
appraisals, one prepared by a qualified appraiser selected by
Partners having fifty percent (50%) or more of the aggregate
Partnership Percentages, and the other selected by the
remaining Partners.
20.2 DISTRIBUTIONS:
Subject to the right of the Partners to set up such cash
reserves as may be deemed reasonably necessary for any
contingent or unforeseen liabilities or obligations of the
Partnership, the proceeds of the liquidation and any other
funds of the Partnership shall be distributed:
(a) To creditors, in the order of priority as provided by
law except those liabilities to Partners in their
capacities as Partners;
(b) To the Partners for loans, if any, made by them to
the Partnership, or reimbursement for Partnership
expenses paid by them;
(c) To the Partners in proportion to their respective
Capital Accounts until they have received an amount
equal to their Capital Accounts immediately prior to
such distribution, but after adjustment for gain or
loss with respect to the disposition of the
Partnership's assets incident to the dissolution of
the Partnership and the winding up of its affairs,
whether or not the disposition occurs prior to the
dissolution of the Partnership; and
(d) To the Partners in accordance with their Partnership
Percentages.
20.3 DEFICIT ACCOUNT RESTORATION:
If, upon the dissolution and liquidation of the Partnership,
after crediting all income upon sale of the Partnership's
assets that have been sold and after making the allocations
provided for in Paragraph 20.1, any Partner has a negative
Capital Account, then the Partner shall be obligated to
contribute to the Partnership an amount equal to the negative
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Capital Account for distribution to the creditors, or to
Partners with positive Capital Account balances, in accordance
with this Paragraph.
20.4 FINAL REPORTS:
Within a reasonable time following the completion of the
liquidation of the Partnership's properties, the Partners
shall be provided with a statement that shall set forth the
assets and liabilities of the Partnership as of the date of
the complete liquidation, each Partner's portion of
distributions pursuant to Paragraph 20.2, and the amounts paid
to the Partner pursuant to Paragraph 20.2.
20.5 TERMINATION:
Upon the completion of the liquidation of the Partnership and
the distribution of all Partnership funds, the Partnership
shall terminate.
ARTICLE 21. WAIVER OF PARTITION
Each Partner hereby waives any right to partition or the right to take any other
action which might otherwise be available to such Partner for the purpose of
severing such Partner's relationship with the Partnership or such Partner's
interest in the assets and properties held by the Partnership from the interest
of the other Partners until the dissolution of the Partnership.
ARTICLE 22. NOTICES
All notices and demands required or permitted under this Agreement shall be in
writing and may be sent by certified or registered mail or similar delivery
service, postage prepaid, to the Partners at their addresses as shown from time
to time on the records of the Partnership, and shall be deemed given when mailed
or delivered to the service.
ARTICLE 23. GOVERNING LAWS
This Agreement and the rights of the parties hereunder shall be governed by and
interpreted in accordance with the laws of the State of Nevada.
ARTICLE 24. EFFECT
Except as herein otherwise specifically provided, this Agreement shall be
binding upon and inure to the benefit of the parties and their legal
representatives, heirs, personal representatives, administrators, executors,
successors, and assigns.
ARTICLE 25. PRONOUNS AND NUMBER
Whenever it appears appropriate from the context, each term stated in either the
singular or the plural shall include the singular and the plural, and pronouns
stated in either the masculine, the feminine or the neuter gender shall include
the masculine, feminine and neuter.
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ARTICLE 26. CAPTIONS
Captions or Paragraph headings contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.
ARTICLE 27. PARTIAL ENFORCEABILITY
If any provision of this Agreement, or the application of the provision to any
person or circumstance shall be held invalid, the remainder of this Agreement,
or the application of that provision to persons or circumstances other than
those with respect to which it is held invalid, shall not be affected thereby.
ARTICLE 28. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
instrument. This Agreement may contain more than one counterpart of the
signature page and may be executed by the affixing of the signatures of each of
the Partners to one of these counterpart signature pages. All the counterpart
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 1st day of
July, 1997.
DAP/LUBECO CORP.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as its President
LUBECO MANAGEMENT, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
, as its VP
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SCHEDULE A
MASTER JOINT BUSINESS AGREEMENT
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SCHEDULE B
PARTNERSHIP UNITS AND PERCENTAGES
The Initial Partnership Percentages of the Partners and Units to be owned by
each such Partner shall be the following percentages:
Name of Partners Units Percentage Initial Contribution
---------------- ----- ---------- --------------------
Lubeco Management, 49 49% $49,000.00
Inc.
DAP/LUBECO 51 51% $51,000.00
Corp.
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