Exhibit 1.3
AGREEMENT OF LIMITED PARTNERSHIP
OF
FIXED INCOME SECURITIES, LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP OF Fixed Income Securities, Limited
Partnership, (the "Agreement") is entered into by and among Sterling Resources,
Inc., a Texas corporation ("Sterling") as general partner (hereinafter the
"General Partner"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇
▇. ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as limited partners (hereinafter the "Limited
Partners").
ARTICLE I
DEFINITIONS
Section 1.01. Terms Defined. When used in this Agreement, the following terms
have the meanings set forth below:
"Act" means the Texas Revised Limited Partnership Act, as it may be amended
from time to time.
"Additional Capital Contribution" has the meaning set forth in Section 3.02
herein.
"Affiliate" means a person, entity or organization directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common
control with the person, entity or organization in question. The term
"control," as used in the immediately preceding sentence, means, with respect to
an entity that is a corporation, the right to exercise, directly or indirectly,
more than 50% of the voting rights attributable to the shares of such
corporation and, with respect to a person or organization that is not a
corporation, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such person or
organization.
"Budget" means an annual budget prepared by the Managing Partner and
approved by a Majority in Interest of the Partners, which Budget shall consist
of (i) a Capital Budget for the Business which shall be an estimate of all
capital expenditures to be made during the Year, and (ii) an Operating Budget
which shall be an estimate of all of the expenses necessary to operate the
Business.
"Business" means owning and operating a business that purchases, markets,
sells, brokers, and trades bonds and other marketable securities.
"Capital Account" has the meaning set forth in Section 3.03.
"Capital Contribution" means the cash and the fair market value of property
other than cash (net of liabilities which the Partnership assumes or takes the
property subject to) contributed to the capital of the Partnership by a Partner.
"Cash Flow" means the net income or net loss of the Partnership determined
in accordance with the method of accounting utilized by the Partnership pursuant
to Section 7.02 adjusted as follows:
(i) there shall be added to such net income or loss (a) the amount
charged for depreciation and any other deduction not involving a cash
expenditure; (b) to the extent not included in income, the net proceeds
received by reason of sale, of a part or parts (but less than all) of the
Business, not in connection with the dissolution of the Partnership;
(c) the proceeds of any borrowing by the Partnership; and (d) cash
contributions to the Partnership; and
(ii) there shall be subtracted from such net income or loss (a) the
amount of principal payments on Partnership debt; (b) amounts paid for
non-deductible capital expenditures and other cash sums expended for items
not deducted in determining net income or loss of the Partnership; and (c)
a cash reserve in the amount provided for in Section 4.08.
"Certificate" means the Certificate of Limited Partnership of the
Partnership, as it may be amended, from time to time in accordance with the Act.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"General Partner" mean Sterling Resources, Inc., as long as such party
continues as general partner hereunder, and any other party who has been
admitted as, and continues to be, a general partner of the Partnership.
"Limited Partners" means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as long as each such party continues as a
limited partner hereunder, and any other party who has been admitted as, and
continues to be, a limited partner of the Partnership.
"Liquidating Event" means the sale, or exchange of all or substantially all
of the Business, or other transaction which, individually or together with any
similar transaction or transactions, results in the disposition of all or
substantially all of the Business and occurs in the course of liquidation of the
Partnership or upon and with respect to which event the Partnership is dissolved
and wound up and all payments, including payments on any promissory notes, have
been received.
"Major Capital Event" means an event (other than a Liquidating Event)
arising other than in the ordinary course of the Partnership's business,
including, without limitation, (i) the sale of less than substantially all of
the Business; or (ii) a borrowing or refinancing. The Managing Partner's
designation of an event as a Major Capital Event shall be binding upon the
Partners and the Partnership absent manifest error.
"Major Decision" has the meaning set forth in Section 4.04.
"Majority in Interest" means Partners owning more than 50% of the
Partnership Interests.
"Managing Partner" means the acting president of the General Partner,
Sterling Resources, Inc., as long as he or she shall continue as the managing
partner pursuant to Article IV herein.
"Minimum Gain" has the meaning set forth in Section 6.05.
"Operations" means all activities of the Partnership not constituting a
Major Capital Event or a Liquidating Event.
"Negative Cash Flow" has the meaning set forth in Section 3.02.
"Nonrecourse Debt" has the meaning set forth in Section 6.05.
"Nonrecourse Deductions" has the meaning set forth in Section 6.05.
"Partners" means the General Partners and the Limited Partners. "Partner"
means any one of the Partners.
"Partnership" means the limited partnership created and existing pursuant
hereto.
"Partnership Interest" means a Partner's interest, expressed as a
percentage in Section 3.07, in the assets, income, gains, losses, deductions,
tax credits and distributions of the Partnership.
"Treasury Regulations" means the Income Tax Regulations promulgated under
the Code, as amended from time to time.
"Transfer" means the sale, transfer, conveyance, assignment, pledge,
hypothecation, mortgage or other encumbrance or disposition of all or any part
of a Partnership Interest.
"Unanimous Decision" has the meaning set forth in Section 4.05.
"Unreturned Capital Contributions" means, as to each Partner, the aggregate
Capital Contributions made to the Partnership by such Partner reduced by the
aggregate distributions to such Partner from the Partnership.
Section 1.02. Number and Gender. Whenever the context requires, references in
this Agreement to the singular number include the plural, and the plural number
includes the singular, and words denoting gender include the masculine, feminine
and neuter.
ARTICLE II
FORMATION, NAME, PRINCIPAL
PLACE OF BUSINESS, PURPOSES AND TERM
Section 2.01. Formation. (a) The Partners hereby create and establish the
Partnership as a limited partnership pursuant to the Act for the purposes
hereinafter described. The Partners agree and obligate themselves to execute,
acknowledge, file, record and publish, as necessary, such amendments to this
Agreement as may be required by the terms hereof or by law and such other
certificates and documents as may be appropriate to comply with the requirements
of law for the continuation, preservation and operation of the Partnership as a
limited partnership.
(b) The Managing Partner shall, as promptly as possible following the
execution of this Agreement, cause the due filing and recording of the
Certificate with the Secretary of State of the State of Texas in accordance with
the provisions of the Act.
Section 2.02. Name. The business of the Partnership shall be conducted under
the name "Fixed Income Securities, Limited Partnership" or such other name as
the Managing Partner may designate by written notice delivered to the Partners.
Section 2.03. Principal Place of Business - Principal Office. The principal
place of business and the principal office of the Partnership shall be at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The Managing Partner may
change the principal place of business of the Partnership to any other place
within the State of Texas upon ten days written notice to the Limited Partners.
Section 2.04. Purposes. The purposes of the Partnership are:
(a) to acquire, own, and operate the Business;
(b) to manage, maintain, or otherwise deal with the Business as
contemplated by the terms of this Agreement; and
(c) to do all other acts and things necessary, incidental or
convenient to carry on the Partnership business as contemplated under this
Agreement.
Section 2.05. Term. The Partnership shall continue until terminated pursuant
to Section 10.01.
ARTICLE III
CAPITAL CONTRIBUTIONS - PARTNERSHIP INTERESTS
Section 3.01. Initial Capital Contributions.
(a) General Partners. Upon the execution of this Agreement, each General
Partner shall make an initial Capital Contribution to the Partnership of
$100.00.
(b) Limited Partners. Upon the execution of this Agreement, each Limited
Partner shall make an initial Capital Contribution to the Partnership of
$9,900.00.
Section 3.02. Additional Capital Contributions. Each Partner shall make, but
shall not be liable to make, additional Capital Contributions ("Additional
Capital Contributions") to the Partnership in an amount equal to such Partner's
pro rata share, based on its respective Partnership Interest, of all Negative
Cash Flow from Operations of the Partnership. For purposes of this
Section 3.02, Negative Cash Flow means the amount by which cash expenditures of
the Partnership exceed cash receipts of the Partnership. A Partner's pro rata
share is the product of the Additional Capital Contribution then due multiplied
by such Partner's Partnership Interest. Such Partner's pro rata share shall be
paid to the Partnership no later than the date specified by the Managing
Partner.
Section 3.03. Capital Accounts. (a) The Partnership shall establish and
maintain a capital account ("Capital Account") for each Partner in accordance
with Section 704(b) of the Code and Treasury Regulations
Section 1.704-1(b)(2)(iv). On the effective date hereof, there shall be
credited to the Capital Account of each Partner the cash amount and the fair
market value of any Capital Contribution made by such Partner to the
Partnership. Except as otherwise provided in this Agreement, the Capital
Account balance of each Partner shall be credited (increased) by (i) the amount
of money contributed by such Partner to the capital of the Partnership, (ii) the
fair market value of property contributed by such Partner to the capital of the
Partnership (net of liabilities secured by such property that the Partnership
assumes or takes subject to), and (iii) such Partners allocable share of
Partnership income and gain (or items thereof) including income and gain exempt
from federal taxation, and the Capital Account balance of each Partner shall be
debited (decreased) by (i) the amount of cash distributed to such Partner,
(ii) the fair market value of property distributed to such Partner (net of
liabilities secured by such property which the Partner assumes or takes subject
to), and (iii) such Partner's share of Partnership losses, depreciation and
other deductions, including such Partner's share of expenditures of the
Partnership described in Section 705(a)(2)(B) of the Code. Notwithstanding the
foregoing, a Partner's Capital Account shall not be adjusted to reflect gain or
loss attributable to the disposition of property contributed by such Partner to
the extent such Partner's Capital Account reflected such inherent gain or loss
in the property on the date of its contribution to the Partnership.
(b) Upon the transfer of a Partnership Interest, the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to the
transferred interest, except to the extent provided in Treasury Regulations
Section 1.704-1(b)(2)(iv)(m).
Section 3.04. Failure to Make Additional Capital Contributions. If any
Partner (herein called "Failing Partner") shall fail or refuse to make any
Additional Capital Contribution when required, and such failure or refusal shall
have continued for a period of five days following receipt of written demand
therefor by the Managing Partner, then after the expiration of an additional
five day grace period (herein called the "Failure Date") the other Partners, in
proportion to the Partnership Interests of such Partners who exercise the
following election (collectively the "Curing Partner"), may, at their sole
discretion, do either of the following, in addition to pursuing any other
remedies available at law:
(a) Loan to the Failing Partner through a nonrecourse contribution to
the Partnership on behalf of the Failing Partner the amount of the Failing
Partner's required Additional Capital Contribution, in which event the
Failing Partner and its Partnership Interest shall be credited with such
Additional Capital Contribution and said loan advance shall bear interest
at the rate of the lesser of (1) the Wall Street Journal prime rate as
quoted in the money rates section of the Wall Street Journal which is also
the base rate on corporate loans at large United States money center
commercial banks as its prime commercial or similar reference interest
rate, with adjustments to be made on the same date as any change in the
rate, and (2) the maximum rate permitted by applicable law, (the "Interest
Rate"). Thereafter, all Partnership distributions or withdrawals
attributable to the Failing Partner's Partnership Interest shall be paid
directly to the Curing Partner until such time as all such loan amounts so
advanced, together with accrued interest, have been fully repaid. Further,
the Curing Partner shall have and is hereby granted a security interest in
and lien upon the Failing Partners Partnership Interest to secure the
repayment of said loan advances and the accrued interest and shall have all
rights to which a secured party is entitled under the Texas Uniform
Commercial Code, as amended, including foreclosure.
(b) Advance, for its own capital account, the Additional Capital
Contribution required of the Failing Partner, and cause the Partnership
Interests of the Partners to be recalculated as of the date the Additional
Capital Contribution is made in the manner set forth below. For purposes
of such recalculation the Curing Partner shall be deemed to have
contributed to the capital of the Partnership an amount equal to 150% of
the sum of (i) the actual amount so contributed by the Curing Partner, plus
(ii) interest on such amount at the rate set forth in (a) above from the
date of such contribution through the date of recalculation of the
Partnership Interests.
For purposes of the foregoing, the Partnership Interests shall be
recalculated and reallocated, effective as of the date of such election by the
Curing Partner, in accordance with the following procedures:
(i) The "Deemed Capital" of each of the Partners shall be computed as
of the date of the default by the Failing Partner. For purposes hereof the
"Deemed Capital" of each Partner includes (i) the aggregate amount of any
Capital Contributions to the Partnership made by such Partner, less any
prior distributions of Cash Flow to such Partner that are attributable to
any previous sale or other capital transaction with respect to the
Business, (ii) the aggregate amount of indebtedness for which such Partner
or any of its Affiliates is or are personally liable in connection with the
Business, including such Partner's then applicable Partnership Interest of
any recourse indebtedness of the Partnership, (iii) any other liabilities
for which such Partner is personally liable, either to the other Partners
or to any third party, in connection with the Partnership or the Business,
less any portion of such liabilities against which the Partner in question
has been indemnified by the other Partner, and (iv) the amount of the
Additional Capital Contribution for which the Curing Partner receives
credit pursuant hereto.
(ii) The new Partnership Interest of the Curing Partner shall be the
ratio (expressed as a percentage) which the Deemed Capital of the Curing
Partner bears to the aggregate Deemed Capital of the Partners.
(iii) The new Partnership Interest of the Failing Partner shall be the
difference between 100% and the new Partnership Interest of the Curing
Partner.
Section 3.05. Other Matters Relating to Capital Contributions. (a) Loans by a
Partner to the Partnership shall not be considered contributions to the capital
of the Partnership.
(b) No Partner shall be required to make contributions to the capital of the
Partnership except to the extent provided by this Article III.
(c) No Partner shall be entitled to withdraw, or to obtain a return of, any
part of his contribution to the capital of the Partnership, or to receive
property or assets other than cash in return thereof, and no Partner shall be
liable to any other Partner for a return of his contributions to the capital of
the Partnership, except as provided in this Agreement.
(d) No Partner shall be entitled to priority over any other Partner, either
with respect to a return of his contributions to the capital of the Partnership,
or to allocations of taxable income, gains, losses or credits, or to
distributions, except as provided in this Agreement.
(e) No interest shall be paid on any Partner's Capital Contribution or
Additional Capital Contribution.
Section 3.06. Deficit Capital Account Balances. Upon liquidation of the
Partnership, no Limited Partner with a deficit balance in its Capital Account
shall have any obligation to restore such deficit balance, or to make any
contribution to the capital of the Partnership, except to the extent such
Limited Partner is personally liable to make contributions to the capital of the
Partnership pursuant to Article III of this Agreement. Upon liquidation of the
Partnership, the General Partners shall be obligated to contribute to the
capital of the Partnership within 90 days after the date of such liquidation an
amount equal to its deficit Capital Account balance, which amount shall be paid
to the creditors of the Partnership or distributed to the other Partners in
accordance with their positive Capital Account balances.
Section 3.07. Partnership Interests. The Partnership Interest of each Partner
shall initially be as follows:
GENERAL PARTNER:
Sterling Resources, Inc. 50,000
TOTAL GENERAL PARTNER INTEREST: 50,000
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LIMITED PARTNERS:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,245,600
▇▇▇▇ ▇. ▇▇▇▇▇▇ 584,400
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 572,950
▇▇▇▇ ▇▇▇▇▇▇ 572,950
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 551,950
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 108,250
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 108,250
▇▇▇▇▇▇ ▇. ▇▇▇▇ 75,800
▇▇▇ ▇. ▇▇▇▇▇▇ 70,350
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 59,500
TOTAL LIMITED PARTNER 4,950,000
INTERESTS: ---------
TOTAL 5,000,000
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ARTICLE IV
RIGHTS AND POWERS OF THE MANAGING PARTNER
Section 4.01. Appointment of Managing Partner. The Partners have designated
and do hereby designate the acting president of the General Partner, Sterling
Resources, Inc., to be the Managing Partner.
Section 4.02. Duties of Managing Partner. The Managing Partner shall be
solely responsible for the operation and management of the business of the
Partnership, and, except as otherwise expressly provided in this Agreement,
shall possess all rights and powers generally conferred by applicable law or
necessary, advisable or consistent in connection therewith.
Section 4.03. Illustrative Rights and Powers. In addition to any other rights
and powers that it may possess by law, the Managing Partner shall have all the
specific rights and powers required or appropriate to the operation and
management of the business of the Partnership which, by way of illustration, but
not by way of limitation, shall include the right and power, subject to the
provisions of Sections 4.04 and 4.05:
(a) to make any expenditures and to incur any obligations it
considers necessary or desirable for the conduct of the activities of the
Partnership;
(b) to negotiate and execute on behalf of the Partnership any
contracts under such terms and obligations as it in its sole and absolute
discretion considers necessary, appropriate or desirable for the conduct of
Partnership operations or the implementation of its powers of the
Partnership's objectives under this Agreement;
(c) to perform all obligations of the Partnership and to enforce all
rights of the Partnership under the terms and conditions of contracts and
agreements entered into by the Partnership;
(d) to coordinate all accounting and clerical functions of the
Partnership and employ and compensate and dismiss from employment such
employees, agents, independent contractors, brokers, attorneys and
accountants as may from time to time be required to carry on the business
of the Partnership;
(e) to acquire, hold, dispose, mortgage, pledge, encumber,
hypothecate or exchange any of the assets of the Partnership;
(f) to use any of the assets of the Partnership (including without
limitation cash on hand) for any purpose or on any terms it deems desirable
in furtherance of the Partnership's objectives;
(g) to borrow money on behalf of the Partnership or cause the
Partnership to borrow money, including, subject to the provisions of
Section 12.01, causing the Partnership to borrow money from it;
(h) to refinance debt obligations related in any way to the assets of
the Partnership;
(i) to repay, in whole or in part, refinance, modify, consolidate or
extend debt obligations of the Partnership;
(j) to acquire and maintain insurance covering Partnership assets;
(k) to control any matters affecting the rights and obligations of
the Partnership, including the conduct of litigation and other incurring of
legal expense, and to settle claims and litigation;
(l) to distribute Partnership cash;
(m) to form limited or general partnerships, joint ventures, trusts,
corporations or other relationships, joint ventures, trusts, corporations
or other relationships it deems desirable in furtherance of the
Partnership's objectives;
(n) to do all acts and things necessary or desirable to accomplish
the objectives of the Partnership;
(o) to apply for and obtain governmental approvals or certificates
with respect to Partnership operations or the ownership or use of its
properties or assets;
(p) to open and maintain bank accounts on behalf of the Partnership;
(q) to develop and maintain the Business in accordance with the
Budget and to enter into agreements with others with respect to such
development or maintenance, which documents and agreements may contain such
terms, provisions and conditions as the Managing Partner in its discretion
reasonably approves and which comply with the Budget; and
(r) to execute, acknowledge, deliver, file and record instruments or
documents affecting the foregoing.
Section 4.04. Major Decisions. All Major Decisions with respect to the
Partnership's business shall require the approval of a Majority in Interest of
the Partners. Accordingly, notwithstanding anything to the contrary, no
Partner, including the Managing Partner, has the right or the power to make any
Major Decision on behalf of the Partnership unless and until it has been
authorized by a Majority in Interest of the Partners. The term "Major Decision"
as used in this Agreement means any decision with respect to the following
matters:
(a) the approval of any tax election that adversely affects a Limited
Partner;
(b) the removal of the Managing Partner pursuant to Section 4.13;
(c) except as provided in Section 4.05, all financing or refinancing
(whether interim, permanent or otherwise) for which the Partnership or its
assets are liable;
(d) the approval of the Budget;
(e) the sale or disposition of the Business, or any portion thereof;
(f) the dissolution and termination of the Partnership; and
(g) except as provided in Section 5.06, Article VIII and Article IX,
the transfer by a Partner of its Partnership Interest.
Section 4.05. Unanimous Decisions. All Unanimous Decisions with respect to
the Partnership's business shall require the approval of all of the Partners.
Accordingly, notwithstanding anything to the contrary, no Partner, including the
Managing Partner, has the right or power to make any Unanimous Decision on
behalf of the Partnership until it has been authorized by all Partners. The
term "Unanimous Decision" as used in the Agreement, means any decision with
respect to the following matters:
(a) any financing or refinancing (whether interim, permanent or
otherwise) for which any Partner is liable; and
(b) any loan from the Partnership to a Partner or its Affiliates.
Section 4.06. Authority to Acquire, Develop and Operate the Business. Without
the necessity of any further consent or approval (except as provided in
Sections 4.04 and 4.05), the Managing Partner is authorized to take all actions,
obtain all permits, and execute all documents reasonably necessary to close the
acquisition of the Business by the Partnership and to develop, operate and
manage the Business.
Section 4.07. Management of Business. The Managing Partner shall operate and
manage the Business on a day-to-day basis within the financial parameters
imposed by the Budget, and shall perform for the Partnership all other
management services with respect to the Business and the business of the
Partnership. The Managing Partner shall have the right, in its sole discretion,
to employ any competent management company as it shall select to perform said
management services.
Section 4.08. Operating Reserve Account. To the extent funds of the
Partnership are sufficient therefor, the Managing Partner shall maintain an
adequate reserve for operating expenses, in such amount as provided in the
Budget or if not so provided, as deemed necessary by the Managing Partner for
the proper conduct of the business of the Partnership and the operation of the
Business.
Section 4.09. Payment of Costs and Expenses. The Partnership shall be
responsible for paying all costs and expenses of forming and continuing the
Partnership, owning, operating and holding the Business, and conducting the
business of the Partnership, including, without limitation, costs of utilities,
costs of furniture, fixtures, equipment and supplies, insurance premiums,
property taxes, advertising expenses, accounting costs, legal expenses and costs
of office supplies. If any such costs and expenses are or have been paid by the
Managing Partner or any of its Affiliates on behalf of the Partnership, then the
Managing Partner (or its Affiliates) shall be entitled to be reimbursed for such
payment as long as such costs or expenses were reasonably necessary and
reasonable in amount.
Section 4.10. Exercise of Rights and Powers. The business of the Partnership
shall be operated and managed by the Managing Partner to the best of its
ability, in a careful and prudent manner and in accordance with good industry
practice. The authority of the Managing Partner to take any action required or
permitted under this Agreement shall in all respects be exercised in its sole
and absolute discretion, and the Managing Partner shall be required to devote
only such time to the performance of its duties and obligations hereunder as it,
in its sole and absolute discretion, determines to be necessary or advisable.
Except as otherwise provided in Section 11.01, the Managing Partner shall be
entitled to deal with its Affiliates in the performance of its duties and
obligations under this Agreement, as long as all terms and conditions of such
dealings are not materially more onerous than, or substantially different from,
the prevailing market terms, conditions and prices available from non-affiliated
third parties.
Section 4.11. Compensation. Except as otherwise expressly provided herein,
the Managing Partner and its Affiliates shall not be entitled to receive any
compensation from the Partnership. This Section 4.11 does not in any way limit
the Managing Partner's right to reimbursement pursuant to Section 4.09.
Section 4.12. Liability. The Managing Partner shall perform its duties under
this Agreement with ordinary prudence and in a manner reasonable under the
circumstances. The Managing Partner shall not be liable to the Partnership or
the Partners for any loss or liability caused by any act, or by the failure to
do any act, unless such loss or liability arises from the Managing Partner's
intentional misconduct, gross negligence or fraud. In no event shall the
Managing Partner be liable by reason of a mistake in judgment made in good
faith, or action or lack of action based on the advice of legal counsel.
Further, the Managing Partner shall in no event be liable for its failure to
take any action unless it is specifically required to take such action under the
terms of this Agreement.
Section 4.13. Removal of Managing Partner. (a) The Managing Partner hereby
covenants and agrees not to retire or withdraw from the Partnership as Managing
Partner without the prior written consent of a Majority in Interest of the
Partners.
(b) A Majority in Interest of the Partners may remove the Managing Partner
upon (but only upon) the occurrence of any of the following events:
(i) any act of the Managing Partner, or its Affiliates, in
contravention of the terms or intent of any provision contained in this
Agreement;
(ii) the bankruptcy or insolvency (as defined in Section 10.01) of the
Managing Partner;
(iii) entry of a final judgment by a court of competent jurisdiction to
the effect that the Managing Partner has been guilty of intentional
misconduct, gross negligence or fraud in connection with any duty or
obligation hereunder;
(iv) the misfeasance, malfeasance or nonfeasance of the Managing
Partner in connection with its duties under this Agreement;
(v) the indictment of the Managing Partner, or an Affiliate of the
Managing Partner, of any crime under the laws of the United States or any
of its states or possessions;
(vi) the application or appropriation of Partnership funds in a manner
contrary to this Agreement;
(vii) the appointment of a receiver for all or substantially all of the
assets of the Managing Partner and the failure to have such receiver
discharged within 30 days of such appointment; or
(viii) the bringing of any legal action against the Managing Partner by
a creditor of the Managing Partner, or an Affiliate of the Managing
Partner, resulting in the attachment, garnishment or sequestration of the
Managing Partner's interest in the Partnership and the failure of the
Managing Partner to have such attachment, garnishment or sequestration
discharged within 30 days of such event.
Upon the removal of the Managing Partner, the Managing Partner shall retain its
Partnership Interest as a Limited Partner with all the rights and duties
pertaining thereto.
(c) Upon the removal of the Managing Partner pursuant to paragraph (b) above
a new Managing Partner shall be elected by a vote of a Majority in Interest of
the remaining Partners.
Section 4.14. Tax Matters Partner. The Managing Partner is designated the Tax
Matters Partner (the "TMP") as defined in Section 6231(a)(7) of the Code with
respect to operations conducted by the Partnership. The TMP shall comply with
the requirements of Sections 6221 through 6232 of the Code and the Treasury
Regulations promulgated thereunder, and the Partners further agree as follows:
(a) The TMP shall have a continuing obligation to provide the
Internal Revenue Service with sufficient information so that proper notice
can be mailed to all Partners as provided in Section 6223 of the Code, and
the Partners shall furnish the TMP with such information (including
information specified in Section 6230(e) of the Code) as the TMP may
reasonably request for such purpose.
(b) The TMP shall keep each Partner informed of all administrative
and judicial proceedings for the adjustment of Partnership items (as
defined in Section 6231(a)(3) of the Code and regulations promulgated
thereunder) at the Partnership level. Without limiting the generality of
the foregoing sentence, within 15 days of receiving any written or oral
notice of the time and place of a meeting or other proceeding from the
Internal Revenue Service regarding a Partnership proceeding (and, in any
event, within a reasonable time prior to such meeting or proceeding), the
TMP shall furnish a copy of such written communication or notice, or inform
the Partners in writing of the substance of any such oral communication.
This obligation of the TMP to inform the Partners includes routine and
minor events.
(c) If any administrative proceeding contemplated under Section 6223
of the Code has begun, the Partners shall, upon request by the TMP, notify
the TMP of any treatment of any Partnership item on their federal income
tax returns that is or may be inconsistent with the treatment of that item
on the Partnership's return.
(d) Any Partner who enters into a settlement agreement with the
Secretary of the Treasury with respect to Partnership items shall notify
the other Partners of such settlement agreement and its terms within 30
days after the date of such settlement.
(e) If the TMP elects not to file suit concerning an administrative
adjustment or request for administrative adjustment and another Partner
intends to file such a suit, such other Partner shall notify all Partners
of such intention, and the forum in which such suit is to be filed shall be
the form designated by a majority in interest of those Partners who express
a preference.
(f) Each Partner shall be entitled to participate in all
administrative proceedings with the Internal Revenue Service, as provided
by Code Section 6224(a).
(g) The obligations imposed on the TMP and participation rights
afforded the Partners by this Agreement and Sections 6221 through 6232 of
the Code may not be restricted or limited in any fashion by the TMP or any
Partner or Partners without the written consent of all of the Partners.
(h) The TMP shall have, in its sole discretion, the right to extend
the statute of limitations, file a request for an administrative
adjustment, file suit concerning any tax refund or deficiency relating to
any Partnership administrative adjustment or enter into any settlement
agreement relating to any Partnership item of income, gain, loss, deduction
or credit for any taxable year of the Partnership.
ARTICLE V
LIMITED PARTNER MATTERS
Section 5.01. Limitation of Liability. Except as otherwise provided in the
Act or by other applicable law, no Limited Partner shall be bound by, or
personally liable for, obligations or liabilities of the Partnership beyond the
amount of its required contributions to the capital of the Partnership, and no
Limited Partner shall be required to contribute any capital to the Partnership
in excess of the contributions for which he is personally liable for under
Article III.
Section 5.02. Management. No Limited Partner shall participate in the
operation or management of the business of the Partnership, or transact any
business for or in the name of the Partnership, nor shall any Limited Partner
have any right or power to sign for or bind the Partnership in any manner.
The power of the Limited Partners to consent to and approve of certain matters
under the provisions of this Agreement shall be exercised under and in
conformity with the provisions of the Act so as not to constitute taking part
in the control of the business of the Partnership.
Section 5.03. Consents. No action requiring the consent or approval of the
Limited Partners under the provisions of this Agreement may be taken unless the
written consent or approval of the requisite number of Limited Partners is
obtained.
Section 5.04. Power of Attorney. (a) Each Limited Partner hereby irrevocably
severally appoints and constitutes the Managing Partner, its successors and
assigns hereunder as its true and lawful attorney-in-fact, with full power and
authority, on its behalf and in its name, to execute, acknowledge, swear to,
deliver and, where appropriate, file in such offices and places as may be
required by law:
(i) any amendment to this Agreement and the Certificate required by a
change in the name of the Partnership, a change of the name or address of
the registered agent of the Partnership, the withdrawal of a General
Partner, or the admission of any party to the Partnership as a General
Partner, if such admission is in compliance with the applicable provisions
hereof; and
(ii) any amendment to this Agreement upon compliance with
Section 12.02.
(b) The power of attorney granted by the Limited Partners to the Managing
Partner under paragraph (a) above is a special power coupled with an interest
and is irrevocable, and may be exercised by any party who at the time of
exercise is a Managing Partner of the Partnership. Such power of attorney shall
survive the death or legal disability of a Limited Partner and any transfer or
abandonment of his Partnership Interest, or his withdrawal from the Partnership.
Section 5.05. Death, Bankruptcy, Etc. In no event shall the death,
incompetency, bankruptcy, insolvency or other incapacity of a Limited Partner
operate to dissolve the Partnership.
Section 5.06. Encumbrance of Limited Partner's Interest. A Limited Partner
may not pledge, mortgage, hypothecate or otherwise encumber his Partnership
Interest for any purpose whatsoever.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.01. Allocation of Net Income and Losses from Operations. Net income
and loss for each fiscal year from Operations ("Net Income" or "Net Loss") shall
be determined in accordance with the method of accounting and books and records
of the Partnership. Except as provided in Section 6.09(b), income and losses
shall be allocated among the Partners as set forth below.
(a) Net Income shall be allocated to the Partners pro rata in
accordance with their Partnership Interests.
(b) Net Loss shall be allocated to the Partners pro rata in
accordance with their Partnership Interests.
Section 6.02. Distributions of Cash Flow from Operations. The Managing
Partner shall distribute Cash Flow from Operations, when available, annually to
the Partners. Cash Flow shall be distributed as follows:
(a) first, to the Limited Partners pro rata in an amount equal to
each Limited Partner's Unreturned Capital Contribution.
(b) next, to the General Partners pro rata in an amount equal to each
General Partner's Unreturned Capital Contribution.
(c) thereafter, to the Partners in accordance with their Partnership
Interests.
Section 6.03. Allocation of Items of Income and Losses upon a Major Capital
Event or Liquidating Event. Except as otherwise provided in Section 6.09(b),
income and losses recognized by the Partnership upon the occurrence of a Major
Capital Event or Liquidating Event shall be allocated among the Partners as
follows:
(a) Income and gain shall be allocated as follows:
(i) first, to the Limited Partners with deficit Capital Account
balances in an amount equal to their deficit balances, in proportion
to the amounts of the deficit balances.
(ii) next, to the General Partners pro rata in such amounts as
will cause each General Partner's deficit Capital Account balance to
equal zero.
(iii) next, to the Limited Partners in proportion to their
Unreturned Capital Contributions until the credit balance of each
Limited Partner's Capital Account equals the Limited Partner's
Unreturned Capital Contributions.
(iv) next, to the General Partners pro rata in such amounts as
are necessary to cause the credit balance of each General Partner's
Capital Account to equal its Unreturned Capital Contribution.
(v) thereafter, to the Partners in accordance with their
Partnership Interests.
(b) Losses and deductions shall be allocated as follows:
(i) first, to the General Partners pro rata in such amounts as
will cause each General Partner's Capital Account to equal its
Unreturned Capital Contribution.
(ii) next, to the Limited Partners with a positive balance in
their Capital Accounts in excess of their Unreturned Capital
Contributions, in the ratio of such excess positive balances, in such
amounts necessary to reduce each such Partner's positive Capital
Account balance to an amount equal to its Unreturned Capital
Contributions.
(iii) next, to the General Partners pro rata in such amounts as
will cause each General Partner's Capital Account to be equal to zero.
(iv) next, to the Limited Partners with a positive balance in
their Capital Accounts in the ratio of such positive balances, in
amounts equal to such positive balances.
(v) thereafter, to the General Partners pro rata in accordance
with their Partnership Interests.
Section 6.04. Distributions of Cash Flow from Major Capital Events. Cash Flow
arising from a Major Capital Event shall be distributed as follows:
(a) first, to the Limited Partners in an amount equal to their
Unreturned Capital Contributions.
(b) next, to the General Partners pro rata, in an amount equal to the
General Partners' Unreturned Capital Contributions.
(c) thereafter, to the Partners in accordance with their Partnership
Interests.
Section 6.05. Minimum Gain and Qualified Income Offset.
(a) Definitions. For purposes of this Article VI, the following terms shall
have the meanings set forth below:
(i) "Minimum Gain" means the aggregate amount of gain (of whatever
character), if any, that would be realized by the Partnership if it
disposed of (in a taxable transaction) Partnership property subject to
Nonrecourse Debt in full satisfaction thereof, as provided in Treasury
Regulations Section 1.704-1(b)(4)(iv)(c). For purposes of determining the
amount of Minimum Gain (1) the adjusted basis of Partnership property
subject to two or more liabilities of equal priority shall be allocated
among such liabilities in proportion to the outstanding balance of such
liabilities, and (2) the adjusted basis of partnership property subject to
two or more liabilities of unequal priority shall be allocated to the
liabilities of an inferior priority (in accordance with (1) above) only to
the extent of the excess, if any, of the adjusted tax basis of such
property over the aggregate outstanding balance of the liabilities of
superior priority. Only the portion of the property's adjusted basis
allocated to Nonrecourse Debt shall be used in computing Minimum Gain. If
the Partnership property subject to Nonrecourse Debt is properly reflected
on the books of the Partnership at a book value that differs from the
adjusted tax basis (as provided under Treasury Regulation
Sections 1.704-1(b)(2)(iv)(d) and (f)), the determination of a Partner's
distributive share of Minimum Gain shall be made with reference to such
book value. A Partner's share of partnership Minimum Gain at the end of
any Partnership taxable year equals the aggregate Nonrecourse Deductions
allocated to such partner (and such Partner's interest) up to that time,
less such Partner's aggregate share of the net decreases in Partnership
Minimum Gain up to that time.
(ii) "Nonrecourse Debt" means a liability of the Partnership (or
portion thereof) with respect to which none of the Partners has any
economic risk of loss, other than through their interests, as Partners, in
the Partnership assets subject to the liability, as provided in Treasury
Regulation Section 1.704-1(b)(4)(iv)(g).
(iii) "Nonrecourse Deduction" means loss, deduction or Code
Section 705(a)(2)(B) expenditure (or item thereof) of the Partnership
attributable to Nonrecourse Debt. The amount of Nonrecourse Deductions for
the Partnership's taxable year shall equal the net increase, if any, in the
amount of Partnership Minimum Gain during such taxable year. In
determining such net increase for a Partnership taxable year in which the
Capital Accounts of the Partners are increased (pursuant to Treasury
Regulation 1.704-1(b)(2)(iv)(f) to reflect a revaluation of Partnership
property subject to Nonrecourse Debt, any decrease in Partnership Minimum
Gain attributable to such revaluation shall be added back to the net
increase or decrease otherwise determined. Nonrecourse Deductions of the
Partnership shall consist first of depreciation or cost recovery deductions
with respect to items of Partnership property subject to Nonrecourse Debt
to the extent of the increase in Minimum Gain attributable to such
Nonrecourse Debt, with the remainder of the Nonrecourse Deductions, if any,
made up of a pro rata portion of the Partnership's other items of
deduction, loss and Code Section 705(a)(2)(b) expenditures for that year.
If, however, such depreciation or cost recovery deductions exceed the net
increase in Partnership Minimum Gain, a proportionate share of each such
deduction shall constitute a Nonrecourse Deduction. In addition, if the
net increase in Partnership Minimum Gain during the Partnership's taxable
year exceeds the total amount of items of Partnership loss, deduction and
Code Section 705(a)(2)(B) expenditures for such year, then an amount of
Partnership loss, deduction and Code Section 705(a)(2)(B) expenditures for
the Partnership's succeeding taxable year (or years) equal to such excess,
shall constitute Nonrecourse Deductions, as if there had been a net
increase in Partnership Minimum Gain during such succeeding year (or years)
in the amount of such excess.
(b) Minimum Gain Chargeback. Notwithstanding anything else to the contrary
contained herein, if there is a net decrease in Partnership Minimum Gain during
a Partnership taxable year, all Partners with a deficit Capital Account balance
at the end of such year (excluding from each Partner's deficit Capital Account
balance any amount that such Partner is obligated to restore) will be allocated,
before any other allocation is made hereunder, items of income and gain for such
year (and, if necessary, subsequent years) in the amount and in the proportions
needed to eliminate any deficit that exceeds those amounts that the Partner is
obligated to restore as quickly as possible. For purposes of the preceding
sentence, a Partner's Capital Account shall be reduced for (i) any distributions
that, as of the end of such year, reasonably are expected to be made to such
Partner to the extent they exceed offsetting increases to such Partner's Capital
Account that reasonably are expected to occur during (or prior to) the
Partnership taxable years in which such distributions reasonably are expected to
be made, (ii) adjustments that as of the end of such year reasonably are
expected to be made for depletion adjustments, and (iii) allocations that, as of
the end of such year, reasonably are expected to be made pursuant to Code
Section 704(e)(2) (dealing with family partnerships), Code Section 706(d)
(dealing with changes in Partners' interests) and Treasury Regulation
Section 1.751-1 (dealing with unrealized receivables and inventory items), all
as described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d). For purposes
of this paragraph, the amount of a Partner's share of Minimum Gain shall be
added to the limited dollar amount, if any, of the deficit balance in such
Partner's Capital Account that such Partner is obligated to restore to determine
if a Partner has a deficit Capital Account balance.
The Minimum Gain chargeback allocated in any taxable year shall consist
first of gains recognized from the disposition of items of Partnership property
subject to Nonrecourse Debt of the Partnership to the extent of the decrease in
Minimum Gain attributable to the disposition of such items of property with the
remainder of such Minimum Gain chargeback, if any, made up of a pro rata portion
of the Partnership's other items of income and gain for that year. If, however,
such gains exceed the amount of the Minimum Gain chargeback, a proportionate
share of each such gain shall constitute a part of the Minimum Gain chargeback.
A Partner's share of the net decrease of Partnership Minimum Gain during a
Partnership taxable year equals an amount that bears the same relation to the
net decrease in Partnership Minimum Gain during such year as such Partner's
share of Partnership Minimum Gain at the end of the prior taxable year of the
Partnership (or, if later, at the time immediately following the last time that
the Capital Account of the Partners are increased pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(f) to reflect a revaluation of Partnership
property subject to Nonrecourse Debt) bears to the amount of Partnership Minimum
Gain at the end of such prior taxable year (or such later date). In addition,
if there is a decrease in Partnership Minimum Gain in a taxable year of the
Partnership (whether or not there is a net decrease in Partnership Minimum Gain
during such year) attributable to the revaluation of Partnership Property
subject to Nonrecourse Debt, each Partner's share of Partnership Minimum Gain as
of the time of such revaluation shall be reduced by the amount of the increase
in such Partner's Capital Account attributable to such revaluation to the extent
of the reduction in Minimum Gain caused by such revaluation. For purposes of
clause (i) of this Section 6.05(b), offsetting increases to a Partner's Capital
Account shall not include income and gain that is expected to be allocated to
such Partner pursuant to the Minimum Gain chargeback.
(c) Qualified Income Offset Provision. Notwithstanding anything else to the
contrary contained herein, to the extent the allocation of any loss or deduction
would cause the deficit Capital Account balance of any Partner to exceed that
Partner's share of Minimum Gain, such Partner will not be allocated a loss or
deduction which will cause or increase a deficit balance in such Partner's
Capital Account in excess of his share of the Minimum Gain plus any dollar
amount of such deficit balance that the Partner is obligated to restore, upon
liquidation, as of the end of the Partnership's taxable year to which such
allocation relates. For purposes of this subsection, the Capital Account of
each Partner shall be reduced (i) for any distributions that, as of the end of
such year, reasonably are expected to be made to such Partner to the extent they
exceed offsetting increases to such Partner's Capital Account that reasonably
are expected to occur during (or prior to) the Partnership taxable years in
which such distributions reasonably are expected to be made, (ii) adjustments
that as of the end of such year reasonably are expected to be made for depletion
adjustments, and (iii) allocations that, as of the end of such year, reasonably
are expected to be made pursuant to Code Section 704(e)(2) (dealing with family
partnerships), Code Section 706(d) (dealing with changes in Partners' interests)
and Treasury Regulation Section 1.751-1 (dealing with unrealized receivables and
inventory items), all as described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d). A Partner who unexpectedly receives an
adjustment, allocation or distribution described immediately above which causes
or increases a deficit balance in such Partner's Capital Account (in excess of
any dollar amount of such deficit balance that such Partner is obligated to
restore upon liquidation, as of the end of the Partnership's taxable year to
which such allocation relates) and which causes the deficit Capital Account
balance of such Partner to exceed that Partner's share of Minimum Gain, will be
allocated items of income and gain in an amount and manner sufficient to
eliminate such deficit balance as quickly as possible.
To the extent this Section 6.05(c) prevents the allocation of a deduction
or loss to a Partner, such deduction or loss shall be allocated between the
Partners in accordance with their interests in the Partnership as determined
under Treasury Regulation Section 1.704-1(b)(3).
Section 6.06. Distributions upon Liquidation of Partnership. (a) Upon
liquidation (as defined in Section 6.06(b) hereof) of the Partnership the assets
of the Partnership shall be distributed no later than the later of 90 days after
the date of such liquidation or the end of the Partnership's taxable year in
which the liquidation occurs and shall be applied in the following order of
priority:
(i) to the payment of debts and liabilities of the Partnership
(including amounts owed to Partners or former Partners).
(ii) unless inconsistent with Treasury Regulation
Section 1.704-1(b)(2)(ii)(b), to set up any reserves which the Managing
Partner deems reasonably necessary for contingent or unforeseen liabilities
or obligations of the Partnership arising out of or in connection with the
business of the Partnership.
(iii) after all Capital Account adjustments for the Partnership's
taxable year in which the liquidation occurs (including without limitation
adjustments required under Treasury Regulation
Section 1.704-1(b)(2)(iv)(e), relating to distributions in kind), to the
Partners in accordance with their positive Capital Account balances.
(b) For purposes of this Section 6.06, a liquidation of the Partnership
shall occur upon the earlier of:
(i) the date on which the Partnership is terminated under
Section 708(b)(1)A of the Code (or any successor provision thereto).
(ii) the date upon which the Partnership is terminated under
Article X.
(iii) the date upon which a Liquidating Event occurs (and all payments,
including payments on any promissory notes, have been received).
Section 6.07. Liquidation of Partner's Interest. If a Partner's interest in
the Partnership is to be liquidated, liquidating distributions shall be made in
accordance with the positive Capital Account balance of such Partner, as
determined after taking into account all Capital Account adjustments for the
Partnership's taxable year during which such liquidation occurs, by the end of
the taxable year, or if later, within 90 days after the date of such
liquidation. Where a Partner's interest is to be liquidated by a series of
distributions, such Partner's interest shall not be considered liquidated until
the final distribution has been made. For purposes of this Section 6.07, a
liquidation of a Partner's interest in the Partnership means the termination of
the Partner's entire interest in the Partnership by means of a distribution or
series of distributions to the Partner by the Partnership. Where a Partner's
interest is to be liquidated by a series of distributions, the interest shall
not be considered as liquidated until the final distribution has been made.
Section 6.08. In-Kind Distributions. (a) Prior to a distribution of property
(other than cash and other than in complete liquidation of the Partnership or a
Partner's interest in the Partnership), the Capital Accounts of the Partners
shall be adjusted to reflect the manner in which the unrealized income, gain,
loss and deduction inherent in such property (that has not previously been
reflected in the Capital Accounts) would be allocated among the Partners if
there were a taxable disposition of the property on the date of distribution.
(b) If the distribution of property (other than cash) is to a Partner in
complete liquidation of the Partner's interest in the Partnership or in
liquidation of the Partnership, prior to such distribution the Capital Accounts
of all the partners shall be adjusted to reflect the manner in which the
unrealized income, gain, loss and deduction inherent in all the Partnership's
property (that has not previously been reflected in the Capital Accounts) would
be allocated among the Partners if there was a taxable disposition of all such
property on the date of the liquidating distribution.
Section 6.09. Additional Tax Allocation Provisions. (a) Notwithstanding
anything to the contrary contained herein, items of income, gain, loss and
deduction with respect to property, other than cash, contributed to the
Partnership by a Partner or with respect to an adjustment to the Partners'
Capital Accounts to reflect a revaluation of the property of the Partnership,
shall be allocated among the Partners so as to take into account the variation
between the basis of the contributed property to the Partnership and its fair
market value at the time of contribution or, in the case of a revaluation of the
property of the Partnership, so as to take into account the adjustments to the
Partners' Capital Accounts as provided in Section 704(c) of the Code and
Regulations thereunder and Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)
and 1.704-1(b)(2)(iv)(g). Any provision contained herein to the contrary
notwithstanding, no such revaluation of the property of the Partnership shall
occur without the consent of a Majority in Interest of the Partners.
(b) As between a Partner who has transferred all or part of its interest in
the Partnership and its transferee, all items of income, gain, deduction and
loss, for any year shall be apportioned on the basis of the number of days in
each such year that each was the holder of such interest (making adjustments
necessary to comply with the provisions of Section 706(d)(2) of the Code),
without regard to the results of the Partnership's operations during the period
before and after the date of such transfer, provided that if both the transferor
and transferee consent thereto a special closing of the books shall be had as of
the effective date of such transfer and the apportionment of items of income and
gain, and deduction and loss, shall be made on the basis of actual operating
results, and provided further that in the case of a dilution of a Partner's
Partnership Interest pursuant to Section 3.04, a special closing of the books
shall be had as of the effective date of the dilution, and the apportionment of
items of income and gain and deduction and loss shall be made on the basis of
actual operating results. Notwithstanding the above, gain or loss resulting
from a Major Capital Event or a Liquidating Event shall be allocated only to
those persons who are Partners as of the date on which such transaction is
consummated.
Section 6.10. Miscellaneous. (a) All allocations and distributions to the
Partners pursuant to this Article VI shall be made to the Partners according to
the books and records of the Partnership.
(b) If any assets of the Partnership are distributed to the Partners in
kind, the Partners shall own and hold the same as tenants in common.
ARTICLE VII
FISCAL MATTERS
Section 7.01. Fiscal Year. The fiscal year of the Partnership shall be the
calendar year.
Section 7.02. Books and Records. The Managing Partner shall keep, or cause to
be kept, at the expense of the Partnership, full and accurate books and records
of all transactions of the Partnership in accordance with accepted accounting
principles, consistently applied. All of such books and records shall, at all
times, be maintained at the principal place of business of the Partnership and
the Limited Partners shall have the right to inspect and copy any of them, at
their own expense, during normal business hours.
Section 7.03. Reports and Statements. (a) Within 90 days after the end of
each fiscal year of the Partnership, the Managing Partner shall, at the expense
of the Partnership, cause to be delivered to each Limited Partner such financial
statements and such other information as the Managing Partner believes to be
necessary for the Limited Partners to be advised of the financial status and
results of operations of the Partnership.
(b) The Managing Partner shall report to the Limited Partners any
significant development materially adversely affecting the Partnership, its
business, property or assets, as soon as practicable following the occurrence of
such development.
(c) By the fifteenth of the first calendar month in each quarter of the
fiscal year, the Managing Partner shall provide to each Limited Partner an
operating statement for the Business. The operating statements shall set forth
all receipts and expenditures of the Partnership for the prior quarter of the
fiscal year, a comparison of such receipts and expenditures with those provided
for in the Budget, and an explanation of each item which varies 5% or more from
the Budget.
Section 7.04. Audit. A Majority in Interest of the Limited Partners shall be
entitled to require an audit of the books and records of the Partnership to be
conducted at any time (but not more frequently than once each calendar year).
Any such audit so required shall be conducted at the expense of the Partnership.
Section 7.05. Tax Returns. The Managing Partner shall cause to be prepared
and delivered to the Partners, not later than 105 days after the end of each
fiscal year of the Partnership, or a valid extension of the income tax returns,
at the expense of the Partnership, all federal and any required state and local
income tax returns for the Partnership for the preceding fiscal year. In the
event of an audit of the Partnership's income tax returns, the Managing Partner
shall retain, at the expense of the Partnership, accountants and other
professionals to participate in such audit in order to contest assertions by
the auditing agent that may be materially adverse to the Partners.
Section 7.06. Bank Accounts. The Managing Partner, in the name of the
Partnership, shall open and maintain a special bank account or accounts in a
bank or savings and loan association, the deposits of which are insured by an
agency of the United States government, in which shall be deposited all funds of
the Partnership. There shall be no commingling of the property and assets of
the Partnership with the property and assets of any other party.
Section 7.07. Tax Elections. Subject to Section 4.04 herein, the Managing
Partner shall be entitled to determine all Federal income tax elections
available to the Partnership.
Section 7.08. Withholding. If the Partnership has any income or losses that
are effectively connected or treated as effectively connected with the conduct
of a trade or business within the United States, the Partnership shall deduct
and withhold a tax equal to 20 percent of any amount actually distributed or
deemed distributed to any Partner who has not executed and delivered to the
Partnership a Certification of Non-Foreign Status prior to the distribution.
The Partners shall timely supplement or re-execute the certifications as
required by the General Partner or the Internal Revenue Service. Each Partner
agrees to notify the General Partner of any change in its status within 30 days
of such change.
ARTICLE VIII
TRANSFERS
Section 8.01. Restriction on Transfers. Except as otherwise provided in
Section 5.06, and except as expressly permitted under the terms and provisions
of this Article VIII, no Partnership Interest shall be Transferred without the
written consent of a Majority in Interest of the Partners.
Section 8.02. Transfers Requiring Consent. The following dispositions of a
Partnership Interest shall require consent as stated below:
(a) No Transfers of any Partnership Interest in whole or in part will
be permitted if it would cause the termination of the Partnership for
Federal income tax purposes or cause the Partnership to be taxed other than
as a partnership, unless all the Partners agree in writing to such a
disposition. Counsel for the Partnership may give its opinion to the
Managing Partner as to whether or not such Transfer would cause such a tax
effect for Federal income tax purposes and the opinion shall be conclusive
and binding upon all Partners.
(b) No Partnership Interest or any portion thereof shall be
Transferred to a minor or an incompetent, without the prior written consent
of all Partners.
(c) No Transfer of the Managing Partner's Partnership Interest shall
be permitted without the prior written consent of all Partners.
(d) No Transfer of any Partnership Interest of any Partner shall be
permitted without the prior written consent of the Managing Partner if such
Transfer requires the consent of a third party under any joint venture
agreement, partnership agreement or other agreement to which the
Partnership is a party.
Section 8.03. Permitted Sales after Right of First Refusal Is Given. Unless
such Transfer is prohibited by Section 8.02 above, any Partner receiving from a
single third party (the "Offeror") a bona fide offer (the "Offer") in writing
signed by the Offeror for the purchase of all or a part of such Partner's
Partnership Interest (the "Offered Interest"), then the Partner who received
such Offer (the "Selling Partner") shall, if it wishes to accept the Offer,
promptly forward a true and correct copy thereof to the other Partners (whether
one or more, the "Non-Selling Partner") within ten days of the date of the
Offer. The Offer shall be sent by certified or registered mail, return receipt
requested. The Non-Selling Partner shall have the exclusive right and option
for 30 days following the receipt of said Offer to purchase all, but not less
than all, of the Offered Interest on the terms and conditions set forth in the
Offer. The Non-Selling Partner shall exercise its option to purchase the
Offered Interest and thereby accept the Offer of the Selling Partner by actual
delivery to the Selling Partner, within the aforesaid 30 day period, written
notice of such election or by sending such written notice of election by
certified or registered mail, return receipt requested, properly stamped and
addressed to the address of the Selling Partner. The Non-Selling Partner shall
be deemed to have elected not to purchase the Offered Interest if it fails to
timely provide written acceptance. Each Non-Selling Partner who elects to so
purchase the Offered Interest pursuant to the Offer (the "Electing Partner")
shall have the right to purchase that proportion of the Offered Interest which
the Partnership Interest owned by such Electing Partner bears to the total
Partnership Interests owned by all Electing Partners. The Electing Partner
shall be obligated to close no later than 90 days after the date of the Offer.
If the Non-Selling Partner does not elect to purchase all of the Offered
Interest, the Selling Partner may sell the Offered Interest; provided, however,
that the sale (i) shall not be made at a price lower than the price offered to
the Non-Selling Partner, (ii) is not made to any person other than the original
Offeror, (iii) is on the same terms and conditions as those specified in the
Offer, and (iv) is consummated within 90 days after the lapse of all options
arising in connection with the offer.
If the Offeror or the terms or conditions of the proposed sale are changed
or the Offered Interest has not been sold prior to the lapse of the aforesaid 90
day period, the Selling Partner must make a new Offer, pursuant to the
procedures in this Section 8.03, to the Non-Selling Partner prior to selling the
Offered Interest. If the Non-Selling Partner elects to purchase the Offered
Interest, then the closing of said purchase shall take place at the office of
the Partnership.
Section 8.04. Permitted Transfers to Specified Parties. Unless Transfer is
prohibited by subsections 8.02(a), (c), or (d) above, then notwithstanding the
provisions of Section 8.03 above, a Partner may Transfer all or any part of its
Partnership Interest to another Partner, an Affiliate of any partner, his
spouse, his parents, his children, his grandchildren, his brothers, his sisters
or to a trust for the sole benefit of one or more of the aforementioned parties
(herein called a "Permitted Transferee"). A Permitted Transfer may be by will
or intestate succession or by inter vivos Transfer. Any inter vivos Transfer
made pursuant to this Section 8.04 (other than a Transfer to another Partner)
shall not become effective until the other Partners have received from the
Permitted Transferee an irrevocable power of attorney appointing the Partner
transferring such Partnership Interest or portion thereof as the
attorney-in-fact for said Permitted Transferee with full power and authority to
deal in any way with such Partnership Interest, or portion thereof, as the case
may be. Further, the power of attorney shall provide that in the event of the
death of the attorney-in-fact the Permitted Transferee will within 90 days after
said death appoint one person to deal with the Partnership Interest of all
Permitted Transferees and having failed to do so a Majority in Interest of the
other Partners shall have the right to appoint a substitute attorney-in-fact to
deal with such Partnership Interest or portion thereof, as the case may be.
Said power of attorney shall be binding upon the Permitted Transferee, his
heirs, successors and assigns. A Transfer pursuant to this Section 8.04 shall
not relieve the Transferor from any of its obligations to the Partnership under
this Agreement.
Section 8.05. Buy-Sell Agreement. At any time and from time to time, any
Partner (the "Initiating Partner") may purchase the Partnership Interest of any
other Partner (the "Responding Partner") or sell its Partnership Interest to the
Responding Partner upon the following terms:
(a) The Initiating Partner shall notify the Responding Partner in
writing of its offer to purchase the Partnership Interest of the Responding
Partner or to sell such Initiating Partner's Partnership Interest to the
Responding Partner. This offer to buy or sell shall state a valuation of
the assets of the Partnership (the "Option Value"). The price payable as
to any Partner (the "Option Price") shall be that amount which the Partner
would receive pursuant to Section 6.06 of this Agreement if the Partnership
were to be liquidated following the sale of its assets for cash in an
amount equal to the Option Value.
(b) Within 60 days after the receipt of such offer, the Responding
Partner shall deliver to the Initiating Partner written notification of
either:
(i) Such Responding Partner's agreement to sell its Partnership
Interest at the Option Price applicable to the Responding Partner; or
(ii) Such Responding Partner's election to purchase the entire
Partnership Interest of the Initiating Partner at the Option Price
applicable to the Initiating Partner.
Failure by the Responding Partner to respond within 60 days shall be deemed
to be an election to proceed under (b)(i) above.
(c) The Purchasing Partner (herein so called) in addition to paying
at the closing the Option Price shall be obligated to loan to the
Partnership an amount sufficient to discharge at the closing all
outstanding and unpaid obligations of the Partnership to the Selling
Partner (herein so called) as of such time, except any loans to the
Partnership permitted by this Agreement which are secured by liens against
the Business or any part thereof.
(d) Any such purchase or sale shall be accomplished as follows:
(i) Twenty percent of the Option Price, unless otherwise agreed,
shall be paid in cash at closing with the remainder evidenced by a
promissory note, secured by the Partnership Interest, payable in five
equal annual installments and bearing interest at a rate of the lesser
of (1) the Wall Street Journal prime rate as quoted in the money rates
section of the Wall Street Journal which is also the base rate on
corporate loans at large United States money center commercial banks
as its prime commercial or similar reference interest rate, with
adjustments to be made on the same date as any change in the rate, and
(2) the maximum rate permitted by applicable law.
(ii) Closing shall take place 30 days after the response date
referred to above, or after the Responding partner delivers the
written notice set forth above, whichever date is earlier.
(e) Upon receipt of the Option Price, the Selling Partner shall
execute and deliver all documents reasonably required to transfer the
Partnership Interest in the Partnership being sold. The Selling Partner
shall also execute such resignations and other documents as may be
reasonably required by counsel for the Partnership to accomplish the
withdrawal of the Selling Partner as a Partner of the Partnership and the
Purchasing Partner shall assume all of the Selling Partner's obligations to
the Partnership and the General Partners under any loans to the Partnership
permitted by this Agreement, such assumptions to be in form reasonably
satisfactory to counsel for the Selling Partner.
It is expressly agreed that the remedy at law for breach of any of the
obligations set forth in this Section 8.05 is inadequate in view of (i) the
complexities and uncertainties in measuring the actual damages that would
be sustained by reason of the failure of a Partner to comply fully with
each of said obligations, and (ii) the uniqueness of the Partnership
business and Partners' relationship. Accordingly, each of the aforesaid
obligations shall be, and is hereby expressly made, enforceable by specific
performance.
Section 8.06. Assumption by Transferee. Any Transferee to whom all or any
part of a Partnership Interest may be Transferred pursuant to this Agreement
shall take such Partnership Interest subject to all of the terms and conditions
of this Agreement and shall not be considered to have title thereto until said
Transferee shall have accepted and assumed the terms and conditions of this
Agreement by a written agreement to that effect delivered to the other Partners,
at which time such Transferee shall be admitted as a substitute Partner and
shall succeed to all rights of its Transferor except as such rights may be
otherwise limited by other provisions of this Agreement. Anything contained in
this Section 8.06 to the contrary notwithstanding, the assumption by the
Transferee of the Partnership Interest being Transferred shall not relieve the
Transferor of such Partnership Interest of its obligations hereunder unless such
Transferor is released by written consent of all Partners or the Transfer was
made pursuant to Section 8.03.
Section 8.07. Cost of Transfers. The Transferor and, if it fails or refuses
to do so, then the Transferee, of any Partnership Interest shall reimburse the
Partnership for all costs incurred by the Partnership resulting from any
Transfer.
Section 8.08. Effect of Attempted Disposition in Violation of this Agreement.
Any attempted Transfer of any Partnership Interest in breach of this Agreement
shall be null and void and of no effect whatever.
ARTICLE IX
RESIGNATION AND WITHDRAWAL OF A
GENERAL PARTNER; ADMISSION OF A NEW GENERAL PARTNER
Section 9.01. Voluntary Resignation or Withdrawal of a General Partner. A
General Partner may not withdraw its interest in the Partnership, Transfer its
interest to any person or admit any person as a substitute General Partner
except as provided in Section 4.13, Article VIII or this Article IX.
Section 9.02. Substitute and Additional General Partners. To the extent
permitted under Texas law, the General Partners may, with the consent of a
Majority in Interest of the Partners, at any time designate additional persons
to be General Partners, whose interest in the Partnership shall be such as shall
be agreed upon by the General Partners and such additional General Partners, so
long as the Partnership Interest of the Limited Partners are not affected
thereby.
Section 9.03. Admission of a Successor General Partner. Any successor person
or entity shall be admitted as a General Partner of the Partnership if the
following terms and conditions are satisfied:
(a) the written consent of at least a Majority in Interest of the
Partners to the admission of such person or entity as a General Partner is
obtained.
(b) the successor person or entity has accepted and assumed all the
terms and provisions of this Agreement.
(c) if the successor entity is a corporation, it has provided counsel
for the Partnership with a certified copy of a resolution of its Board of
Directors authorizing it to become a General Partner under the terms and
conditions of this Agreement.
(d) the successor person or entity has executed this Agreement and
such other documents or instruments as may be required or appropriate in
order to effect the admission of such person or entity as a General
Partner.
ARTICLE X
DISSOLUTION
Section 10.01. Dissolution. (a) It is the intention of the Partners that the
business of the Partnership be continued by the Partners, or those remaining,
pursuant to the provisions of this Agreement, notwithstanding the occurrence of
any event that would result in a statutory dissolution of the Partnership
pursuant to the laws of the State of Texas, and no Partner shall be released or
relieved of any duty or obligation hereunder by reason thereof; provided,
however, that the business of the Partnership shall be terminated, its affairs
wound-up and its property and assets distributed in liquidation on the earlier
to occur of:
(i) December 31, 2033;
(ii) a determination by a Majority in Interest of the Partners that
the business of the Partnership should be terminated;
(iii) the bankruptcy or insolvency of the Partnership;
(iv) subject to the provisions of paragraph (b) below, the death,
incompetency, bankruptcy, insolvency, withdrawal or removal from the
Partnership of a General Partner; or
(v) the date upon which the Partnership is terminated under
Section 6.06(b).
For purposes of this Agreement, bankruptcy shall be deemed to have occurred when
the party in question files a petition under any section or chapter of the
Federal Bankruptcy Code, as amended, or an order for relief under Title 11 of
the United States Code is entered against it, and insolvency shall be deemed to
have occurred when the party in question admits in writing that its assets are
insufficient to pay its liabilities as they mature.
(b) Upon the occurrence of any event set forth in subparagraph (iv) of
paragraph (a) above with respect to a General Partner, the business of the
Partnership shall be continued pursuant to the provisions of this Agreement if
(i) there remains at least one General Partner, or (ii) if there is no remaining
General Partner, a Majority in Interest of the Limited Partners shall elect in
writing, within a period of 90 days from the date of such occurrence, that it be
so continued and shall designate one or more parties to be admitted to the
Partnership as a General Partner. Any such designated party shall upon
admission to the Partnership succeed to all of the rights and powers of a
General Partner hereunder, provided that former General Partners shall retain
and be entitled to their share of profits, losses, distributions, and capital
associated with the General Partners' Partnership Interests.
Section 10.02. Wind-Up of Affairs. As expeditiously as possible following the
occurrence of an event giving rise to a liquidation of the Partnership, the
Managing Partner (or a special liquidator who may be appointed by a Majority in
Interest of Limited Partners if the termination results from the circumstance
described in Section 10.01(a)(iv) above) shall wind-up the affairs of the
Partnership, sell its property and assets for cash at the highest price
reasonably obtainable and distribute the proceeds in accordance with
Section 6.06 in liquidation of the Partnership. In no event shall there be a
distribution of the property and assets of the Partnership in kind, unless a
Majority in Interest of the Partners approve such distribution.
ARTICLE XI
INDEMNIFICATION
If a General Partner (whether acting as the Managing Partner, a General
Partner or, at the request of the Partnership, as a representative of another
enterprise) or a representative of such General Partner (a "Partnership
Functionary") is, was or is threatened to be made a named defendant or
respondent in a threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, arbitrative, or investigative, any
appeal in such an action, suit or proceeding, and any inquiry or investigation
that could lead to such an action, suit or proceeding (herein collectively
referred to as a "Proceeding"), by reason of the fact that such person was or is
serving as a Partnership Functionary, then the Partnership shall (i) indemnify
such Partnership Functionary against judgments, penalties (including excise and
similar taxes), fines, settlements, and reasonable expenses actually incurred in
connection with such Proceeding, and (ii) pay or reimburse the Partnership
Functionary, in advance of the final disposition of the Proceeding, reasonable
expenses incurred in connection with the Proceeding, all to the fullest extent
permitted by the Act.
ARTICLE XI
INDEMNIFICATION
Section 12.01. Loans to the Partnership. If a Partner or its Affiliates (the
"Loaning Partner") loans funds to the Partnership, the Loaning Partner shall not
charge the Partnership interest greater than the lesser of (i) the Loaning
Partner's actual interest cost incurred in securing the funds loaned to the
Partnership, (ii) the highest lawful rate, or (iii) the rate that would be
charged to the Partnership by unrelated banks on comparable loans for the same
purpose; and the Loaning Partner shall not charge the Partnership points or
other financing charges or fees in any amount greater than the financing charges
or fees actually incurred by the Loaning Partner in connection with the loan to
the Partnership.
Section 12.02. Amendments. In addition to the right of the Managing Partner
to amend certain of the provisions of this Agreement by reason of the power of
attorney granted to the Managing Partner under Section 5.04, a Majority in
Interest of the Partners may, by instrument in writing, amend any of the other
provisions hereof, except for those provisions that affect the rights of
Partners to share income, distributions and loss and require Partners to make
additional contributions, which provisions may be amended only upon the written
consent of all Partners affected thereby.
Section 12.03. Other Activities. Partner may engage or possess an interest in
other business ventures of any nature and description, independently or with
others, including, without limitation, businesses similar to the Business), and
neither the Partnership nor any of the other Partners shall have any right by
virtue of this Agreement in and to such other ventures or to the income or
property derived therefrom.
Section 12.04. Partition. No Partner shall be entitled to a partition of the
Business or any other property or assets of the Partnership, notwithstanding any
provision of law to the contrary.
Section 12.05. Notices. Any notice required or permitted to be delivered to
any Partner under the provisions of this Agreement shall be deemed delivered,
whether actually received or not, when deposited in a United States Postal
Service depository, postage prepaid, registered or certified, return receipt
requested, and addressed to the Partner at the address specified on the
signature pages hereof, or such other address as shall be specified by written
notice delivered to the Managing Partner.
Section 12.06. Provisions Severable. Every provision of this Agreement is
intended to be severable and, if any term or provision hereof is illegal or
invalid for any reason whatsoever, such illegality or invalidity shall not
affect the validity of the remainder of this Agreement.
Section 12.07. Counterparts. This Agreement, and any amendments hereto, may
be executed in counterparts, each of which shall be deemed an original, and such
counterparts shall constitute but one and the same instrument.
Section 12.08. Headings. The headings of the various sections of this
Agreement are intended solely for convenience of reference, and shall not be
deemed or construed to explain, modify or place any construction upon the
provisions hereof.
Section 12.09. Successors and Assigns. This Agreement and any amendments
hereto shall be binding upon and, to the extent expressly permitted by the
provisions hereof, shall inure to the benefit of the Partners and their
respective heirs, legal representatives, successors and assigns. Furthermore,
with respect to any successors or assigns, it is agreed that:
(a) The Business shall be determined to have an agreed value (the
"Agreed Value") upon the effective date of admission of any successor or
assignee Partner. The Agreed Value shall be unconditionally binding
throughout the life of the Partnership.
(b) The Partners understand that for federal income tax purposes the
Partnership's adjusted basis of the Business is not equal to the Agreed
Value.
Section 12.10. Amendment of Certificate. If a Transfer of a Partnership
Interest shall take place pursuant to the provisions of Article VIII or
Article IX, then unless the Partnership is dissolved by such Transfer, the
continuing Partners shall promptly thereafter cause to be filed with the proper
authority an Amended Certificate of Limited Partnership and such other
certificates of fictitious or assumed names of the Partnership as may be deemed
necessary or desirable by the Managing Partner.
Section 12.11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas and all obligations
of one Partner to another are performable in Dallas County, or at the site of
the Business.
IN WITNESS WHEREOF, the Partners have executed this Agreement this ____ day
of _______________, 20__.
GENERAL PARTNER:
STERLING RESOURCES, INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
Address: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LIMITED PARTNERS:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
STATE OF COLORADO )
)
COUNTY OF EL PASO )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as President of Sterling Resources, Inc., known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged to
me that he executed the same in the capacity, for the purposes and consideration
therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of ______________,
20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF COLORADO )
)
COUNTY OF EL PASO )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF COLORADO )
)
COUNTY OF EL PASO )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that she executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF __________ )
)
COUNTY OF __________ )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF __________ )
)
COUNTY OF __________ )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇ ▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF COLORADO )
)
COUNTY OF __________ )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF __________ )
)
COUNTY OF __________ )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF __________ )
)
COUNTY OF __________ )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF __________ )
)
COUNTY OF __________ )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇▇▇ ▇. ▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF __________ )
)
COUNTY OF __________ )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires:
STATE OF __________ )
)
COUNTY OF __________ )
BEFORE ME, the undersigned Notary Public, on this day personally appeared
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this the ____ day of __________, 20__.
-------------------------------------------
Notary Public
My Commission Expires: