Exhibit 2
LIMITED PARTNERSHIP AGREEMENT
OF
▇▇▇▇▇▇▇▇▇▇▇▇ Investments Limited Partnership, III
a Delaware limited partnership
TABLE OF CONTENTS
Page No.
ARTICLE I
FORM AND INTERPRETATION
Definitions 5
Captions and Certain Terms 9
Severability 9
Limitation of Grant 9
ARTICLE II
ORGANIZATION OF PARTNERSHIP
Formation, Name, Office and Registered Agent 9
Purpose of Partnership 10
Term of Partnership 11
Authorized Acts 11
Co-Ownership of Partnership Interests 12
Representations and Warranties of the Limited Partners 12
ARTICLE III
PARTNERSHIP CAPITAL
Capital Contributions 14
Capital Account 15
Expenses Paid by Partners 16
Loans by Partners; Restrictions on Borrowing 16
ARTICLE IV
PROFITS AND LOSSES AND TAXABLE INCOME AND TAXABLE LOSS
Allocations 16
ARTICLE V
DISTRIBUTIONS, WITHDRAWLS AND LOANS
Distributions 18
Limitation on Distributions to Partners 20
ARTICLE VI
AUTHORITY, DUTIES, AND LIABILITIES OF PARTNERS
Duties of Managing General Partner 20
Managing General Partner's Fees and Expenses 20
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Authority of Managing General Partner 21
Special Limitation 22
Dealing with Affiliates 23
Indemnification of Managing General Partner 23
Liability of Limited Partners 23
Authority of Limited Partners and Non-Managing General Partners 23
ARTICLE VII
TRANSFER OF PARTNERSHIP INTERESTS
Limited Partners 24
Managing General Partner 24
Restriction on Transfer 24
Admission of Substitute Partner 25
Rights of Partner After Assignment and Substitution 25
Allocations and Distributions After Assignment 25
ARTICLE VIII
RETIREMENT, WITHDRAWL OR REMOVAL OF PARTNERS
Withdrawal of Managing General Partner or Limited Partner 26
Retirement, Removal, or Withdrawal of Managing General Partner 27
Retirement of Limited Partner 27
Rights of Partner After Retirement, Removal, or Withdrawal 27
ARTICLE IX
DISSOLUTION
Events of Dissolution 28
Winding Up and Distributions 28
Distribution of Liquidation Proceeds and Assets and Allocation
of Gains and Losses 29
Limitation of Liability of Partners 29
Waiver of Right of Partition of Assets 29
ARTICLE X
ACCOUNTING YEAR, BOOKS, RECORDS, AND REPORTS
Books and Records 29
Reports 30
Bank Accounts 30
Tax Elections 30
Accounting Method and Fiscal Year 30
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ARTICLE XI
GENERAL PROVISIONS
Power of Attorney 31
Partnership Contracts 31
Conveyances 31
Notices 32
Consents 32
Meetings 32
Binding Effect; Counterparts 33
Choice of Law 33
Complete Agreement; Modification 33
Evidence of Partnership Interests 33
Tax Matters Partner 34
Gender and Number 34
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▇▇▇▇▇▇▇▇▇▇▇▇ INVESTMENTS LIMITED PARTNERSHIP III AGREEMENT
This Limited Partnership Agreement ("Agreement") is entered into, pursuant
to the provisions of the Delaware Uniform Limited Partnership Act, and shall be
retroactively effective as of the date of filing of the Certificate of Limited
Partnership with the Delaware Secretary of State, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇., a resident of Massachusetts whose address is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (as the "Managing General Partner"). ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇, both residents of Florida, whose address is ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, are the only limited partner in the
Partnership. This Agreement is on the following terms and conditions:
ARTICLE I
FORM AND INTERPRETATION
1. Definitions. The following capitalized terms, as used in this Agreement
and in the attached exhibits, which constitute a part of this Agreement, have
the meanings ascribed to them below and include the plural as well as the
singular number:
"Act" means the Delaware law pertaining to Limited Partnerships, as
amended, or any subsequent Delaware law concerning partnerships that are enacted
in substitution for the Act.
"Affiliate" of a Partner means (1) another Partner of the Partnership; (2)
a legal or personal representative of any Partner; (3) the Partner's lineal
descendants and spouse (other than a spouse who is legally separated from the
Partner under a decree of divorce or separate maintenance); (4) a trustee of a
trust for the benefit of any Person referred to in clause (1), (2) or (3); (5) a
Person, other than an individual, of which 80% or more of the voting or equity
interests is owned directly or indirectly by a Partner and/or one or more of the
Persons referred to in clauses (1) through (4); (6) a Person owning 80% or more
of the voting or equity interests of a Partner that is not an individual; or (7)
a Person other than an individual, 80% or more of the voting or equity interests
of which is owned by the same Person that owns 80% or more of the voting or
equity interests of a Partner that is not an individual.
"Agreement" means this Limited Partnership Agreement as originally
executed and as subsequently amended or supplemented from time to time in
accordance with section 54.
"Assignment" means a sale, exchange, gift, pledge, transfer or disposition
of any kind whatsoever and, in the case of a Person that is not an individual,
it includes the sale, exchange, pledge, transfer or disposition of a majority of
either voting control or the equity interests in such Person.
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"Bankruptcy" means taking advantage of any bankruptcy or insolvency act
(including the Bankruptcy Reform Act of 1978 or similar law, and also any
proceeding under state or local insolvency or debtor relief laws), or a final
adjudication of insolvency or an assignment of a major portion of a Person's
assets for the benefit of creditors.
"Capital Account" has the meaning set forth in section 12.
"Capita1 Contribution" means the total amount of cash, and net fair market
value of securities and other property contributed by a Partner to the equity of
the Partnership, or agreed to be contributed by a Partner to the equity of the
Partnership, pursuant to section 11(a), and reduced by any return of capital to
the Partner within the meaning of section 11(c). Any reference in this Agreement
to the Capital Contribution of either a Partner or an assignee of a Partner
shall include the Capital Contribution of any prior Partner to whose Partnership
Interest the then existing Partner or assignee succeeded.
"Cash Flow" means the excess of cash derived by the Partnership from all
sources, including from capital contributions, loans, sales of securities and
other activities, (but excluding cash derived from the winding-up and
liquidation of the Partnership pursuant to section 37) over the sum of all cash
disbursements, including repayments of loans from Partners, loans to Partners
for the Partnership, and distributions to Partners pursuant to section 16(a) or
(b) (but excluding disbursements pursuant to section 16(c), plus a reasonable
allowance for reserves for repairs, investments in Property (including
Marketable Securities), replacements, contingencies and anticipated obligations
(including debt service, capital improvements and replacements to the extent not
funded by reserves) as reasonably determined by the Managing General Partner.
Notwithstanding the preceding sentence, in determining the reasonable allowance
for reserves, the Managing General Partner shall reduce such allowance to the
extent necessary to ensure that annual distributions of Cash Flow to each
Partner will be in an amount at least equal to the annual income tax liability
(exclusive of income tax liability resulting from a transaction pursuant to
section 16(b) or (c)) of each such Partner (determined assuming that the maximum
possible income tax rate is applicable) resulting from the allocation to the
Partner of his share of the Partnership's Taxable Income and Taxable Loss. Cash
Flow is to be calculated separately for each Partner on the theory that each
Partner owns the assets of the Partnership contributed by such Person directly.
For this purpose, if a Partner has contributed Marketable Securities to the
Partnership, such Marketable Securities (including stock dividends thereon,
stock splits or other recapitalization) shall be allocated to the contributing
Partner (or such Partner's assigns). In addition, Cash Flow shall be calculated
and distributed separately for each of the Class A Partnership Interest and the
Class B Partnership Interest and the assets of the Partnership allocated to such
interests.
"Class A Partnership Interest" means an interest in the Partnership
represented by the Capital Account associated only with the Partnership's
ownership of those assets listed on Exhibit A-1 attached hereto and made a part
hereof (the "Class A Properties"), and the right to receive a percentage share
of the income, gain, loss, deduction, cash and
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other distributions and liquidation proceeds associated with such property, all
subject to and interpreted in accordance with the terms of this Agreement. A
Class A Partnership Interest may be expressed in units with each unit
representing ownership of a one percent interest in the Class A Properties.
"Class B Partnership Interest" means an interest in the Partnership
represented by a partner's Capital Account relating to all assets of the
Partnership other than those assets listed on Exhibit A-1 attached hereto and
made apart hereof, (i.e., excluding the Capital Account relating to the Class A
Properties), and the right to receive his percentage share of the income, gain,
loss, deduction, cash and other distributions and liquidation proceeds of the
Partnership (other than those associated with Class A Partnership Interests),
all subject to and interpreted in accordance with the terms of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or any
subsequent federal law concerning income taxes that is enacted in substitution
for the Code.
"General Partner" Means any Person admitted as a general partner in
accordance with this agreement.
"General Partnership Interest" means the Partnership Interest of a
Managing General Partner, in his capacity as a Managing General Partner.
"Limited Partner" means any Person admitted as a limited partner in
accordance with this Agreement.
"Limited Partnership Interest" means the Partnership Interest of a Limited
Partner, in the capacity as a Limited Partner.
"Majority in Interest" when used in regard to the degree of consent,
approval or agreement required among the Partners, means Partners whose
aggregate Percentage Interests constitute over 50% of the total aggregate
Percentage Interests then outstanding.
"Managing General Partner" means the Person designated in this Agreement
as the general partner responsible for management of the affairs of the
Partnership, including all voting rights with respect to, and control over,
Marketable Securities, and thereafter any Person which becomes a general partner
responsible for management of the affairs of the Partnership pursuant to this
Agreement, in the Person's capacity as a managing general partner of the
Partnership.
"Marketable Securities" means securities, including stock, which are
traded on an established securities market, whether or not registered under the
Securities Act of 1933.
"Partner" means each Person which is a Managing General Partner or a
Limited Partner.
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"Partnership" means the ▇▇▇▇▇▇▇▇▇▇▇▇ Investments Limited Partnership III,
the limited partnership formed in accordance with the Act pursuant to this
Agreement.
"Partnership Interest" includes only a Partner's Capital Contribution and
right to receive his Percentage Interest and excludes Partnership Rights.
"Partnership Rights" excludes the Partnership Interest of a Partner, and
includes, in addition to other rights provided in this Agreement, the rights
provided to him by the Act except to the extent such rights are inconsistent
with the provisions of this Agreement.
"Percentage Interest" shall mean a partner's percentage share from time to
time of the Net Profits and Net Losses, taxable income or taxable loss, Cash
Receipts, cash and other distributions and liquidation proceeds of the capital
of the Partnership attributable to a particular class of Partnership Interests
all subject to and interpreted in accordance with the terms of this Agreement.
The Percentage Interest of partners for each class of Partnership Interests
shall be proportionate to the Capital Accounts of the partners in that class of
Partnership Interest at all times so that, for example, if a Partner's Capital
Account in one class is 100 and the aggregate of all Capital Accounts in the
same class of Partnership Interest is 1000, the partner's Percentage in that
class of the Partnership is 10%. Except as otherwise provided in this Agreement,
in the event of a change among the partners in the Percentage Interest in the
Partnership during the year, the Partnership shall use a closing-of-the-books
method with respect to such change or changes in Percentage Interest in
computing a partner's share of profits and losses, taxable income and taxable
losses, and entitlement to distributions during such year.
"Person" means any individual and any general or limited partnership,
corporation, estate, joint venture, trust, business trust, cooperative,
association or other organization.
"Profits and Losses" means the annual net income or loss of the
Partnership determined on a generally accepted accounting principles basis, as
disclosed on the annual financial statements of the Partnership, except that
Profits and Losses shall be computed separately for each of the Class A
Partnership Interests and Class B Partnership Interests. If the Partners have
elected for the Partnership to be excluded from the application of Subchapter K
of Chapter 1 of the Code, the provisions relating to Profits and Losses shall be
of no effect during such period at the Partnership level, but will be separately
computed for each Partner.
"Property" means any real, personal, tangible or intangible property
contributed by a Partner to the equity of the Partnership or otherwise acquired
by the Partnership.
"Pro Rata" means in the proportion that the Percentage Interest of each
Partner bears to the total Percentage Interests of all the Partners.
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"Retirement" means the death, Bankruptcy, adjudication of incompetency as
determined by a court of appropriate jurisdiction, dissolution and liquidation
or termination of existence, merger or consolidation (except as provided in
sections 33 and 34) of a Partner, or the sale, lease or other disposition of all
or substantially all the property of a Partner (except as provided in sections
33 and 34).
"Taxable Income or Taxable Loss" means the net income or loss of the
Partnership for federal income tax purposes, as determined at the close of the
Partnership's fiscal year by the accountants employed by the Partnership to
prepare its income tax returns. If the Partners have elected for the Partnership
to be excluded from the application of Subchapter K of Chapter 1 of the Code,
the provision shall be of no effect for federal income tax purposes during such
period, but will be separately computed for each Partner.
2. Captions and Certain Terms. The titles and captions preceding the text
of the articles and sections of this Agreement are solely for convenience of
reference and neither constitute a part of this Agreement nor affect its
meaning, interpretation, or effect. The words "hereby," "herein," "hereof,"
"hereto," "hereunder," and terms of similar import refer to this Agreement as a
whole and not to any particular article, section, subsection or other part of
this Agreement.
3. Severability. If any article, section or other provision of this
Agreement, or its application, is held to be invalid, illegal or unenforceable
in any respect or for any reason, the remainder of this Agreement and the
application of such article, section or other provision to a person or
circumstance with respect to which it is valid, legal and enforceable is not
affected.
4. Limitation of Grant. Nothing in this Agreement, whether express or
implied, is intended or may be construed to confer upon, or to grant to, any
creditor or any other Person (other than the Partners and their legal and
personal representatives, heirs, successors and permitted assignees) any right,
remedy or claim under or because of this Agreement or any covenant, condition or
stipulation of it.
ARTICLE II
ORGANIZATION OF PARTNERSHIP
5. A. Formation, Name, Office and Registered Agent. The Partnership was
organized as of the effective date of this Agreement and the signatories to this
Agreement constitute the members of this Partnership under the Act as of such
date and as of the date hereof. The rights and obligations of the Partners are
determined by the Act, except as otherwise expressly provided in this Agreement.
The name of the Partnership is "▇▇▇▇▇▇▇▇▇▇▇▇ INVESTMENTS LIMITED PARTNERSHIP
III."
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The record keeping office of the Partnership and its principal place of business
are located at the residence of the Managing General Partner where the Managing
General Partner performs administrative services on behalf of the Partnership.
The Partnership does not have a principal business office. The Managing General
Partner may change the name of the Partnership or may designate the location of
its principal business office at any time and from time to time by giving
written notice of such change to each Partner. The registered agent and
registered office of the Partnership is The Corporation Trust Company, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
B. General and Limited Partners. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇. is the
initial General Partner of the Partnership. The limited partners of the
Partnership are ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇.
C. Certificate of Limited Partnership. In connection with the
execution of this Agreement, the Managing General Partner signed a certificate
of limited partnership, pursuant to the Act. The Managing General Partner shall
cause the certificate to be filed with the Delaware Secretary of State. The
certificate also has been amended to implement the change in General Partners.
The Managing General Partner shall amend the certificate when required under
this Agreement and shall execute the amended certificate as required by the Act.
6. Purpose of Partnership
(a) Except as provided in 6(c) below, the purposes of the
Partnership are to:
(i) invest in, own, sell, acquire, manage and exercise the
voting rights associated with Marketable Securities,
(ii) after approval by a Majority in Interest, acquire, hold,
sell, own, improve, develop or lease other types of property in addition to
Marketable Securities, and
(iii) engage in any other lawful activity for profit approved
by an affirmative vote of a Majority in Interest.
(b) Notwithstanding Section 6(a), unless unanimously approved by the
Partners, the Partnership shall not engage in any activity(ies) which would
result, based upon opinion of tax counsel, in the characterization of the
Partnership as an investment company as that term is used in Section 721(b) or
any successor provision of the Code.
(c) Subsequent to the date of commencement of existence of the
Partnership, the Partners may make the election set forth in Treas. Reg. ss.
1.761-2 to have the Partnership excluded from the application of Subchapter K of
Chapter 1 of the Code until such time as a Majority in Interest determine to
have the Partnership engage in an
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activity other than investing in Marketable Securities and other intangible
assets. Until such time as the Partnership engages in other than investment
activities, and if the aforementioned election is made, it is the intention of
the Partners that the Partnership shall be only for investment purposes and
shall not actively conduct business. It is the intention of the Partners that
the Partnership shall have legal title to, and ownership of, Marketable
Securities so as to effectuate the co-ownership of the Marketable Securities by
the Partners. As is evidenced by various provisions of this Agreement, each
Partner reserves the right separately to take or dispose of their shares or
interests in the Marketable Securities and the other assets contributed by such
Partner to the Partnership. Further, during the period Subchapter K does not
apply to the Partnership, this Agreement is to be interpreted in a manner that
will give effect to such election.
7. Term of Partnership. The term of the Partnership shall continue until
the earlier of (i) December 31, 2020, or (ii) the death or adjudication of
incompetency as determined by a court of appropriate jurisdiction of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, unless the Partnership is earlier dissolved and terminated under
this Agreement.
8. Authorized Acts. In furtherance of its purposes, but subject to every
other provision of this Agreement, the Partnership, through, and only through,
the actions of the Managing General Partner acting alone, is authorized to do
the following:
(a) acquire by purchase, lease or otherwise, any real or personal,
tangible or intangible property that may be necessary, convenient or incidental
to the accomplishment of the purposes of the Partnership;
(b) construct, operate, maintain, finance, improve, own, sell,
convey, exchange, assign, mortgage or lease any property (or a part thereof) as
may be necessary, convenient or incidental to the accomplishment of the
purposes of the Partnership;
(c) borrow money and issue evidences of indebtedness in furtherance
of any purpose of the Partnership and secure the same by a mortgage, pledge,
security interest or other liens on the property, any part thereof, any interest
therein or on any improvements thereto;
(d) prepay, in whole or in part, refinance, increase, renew, modify
or extend any indebtedness of the Partnership and, in connection therewith,
extend, renew or modify any mortgage, pledge, security interest or other lien
affecting any property;
(e) invest and reinvest the assets of the Partnership in, and
purchase, acquire, hold, sell, transfer and exchange securities of all kinds,
including Marketable Securities;
(f) lend money to Partners;
(g) exercise the voting rights associated with property owned by the
Partnership; and
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(h) enter into any activity and perform and carry out any contract
in connection with, or necessary or incidental to, the accomplishment of the
purposes of the Partnership.
9. Co-Ownership of Partnership Interests. Any consent required by a
Partner shall require the action or vote of each Person (or in such other manner
as such Persons have designated in writing to the Partnership) having an
interest in such Partnership Interest, with a majority approval needed for
consent. On the death of a co-owner of a Partnership Interest held in either
joint tenancy with right of survivorship or tenancy by the entirety, the
Partnership Interest is owned solely by the survivor as a Partner, and not as an
assignee. The Partnership need not (although it may) recognize the death of a
co-owner of a Partnership Interest until the Managing General Partner receives
notice of the death. A co-owner of a Partnership Interest may sever the tenancy
by giving to the Managing General Partner notice to that effect, and signed by
the co-owner requesting the severance in the case of a joint tenancy, and by
both co-owners in the case of a tenancy by the entirety. Upon receipt of the
notice and the certificate evidencing the Partnership Interest owned by the
co-owners, the Managing General Partner shall cause the Partnership Interest to
be allocated as directed by the co-owners and shall indicate on the Partnership
records such allocation. In absence of joint direction, the interests shall be
allocated between the owners as the severed ownership interests would be valued
for federal estate tax purposes.
10. Representations and Warranties of the Limited Partners. As a condition
to becoming a Limited Partner of the Partnership, each Limited Partner
represents, warrants, and covenants to each Managing General Partner and the
Partnership as follows:
(a) He will not assign, sell, mortgage, pledge, or otherwise
transfer or encumber any of his rights under this Agreement except as expressly
permitted under this Agreement and applicable laws;
(b) He was granted full and unrestricted access to the Partnership's
business premises, offices and properties and its business, partnership and
financial books and records as he required, and was permitted to examine the
foregoing, to question the Managing General Partner, and to make all other
investigations that he considered appropriate to determine or verify the
business or condition (financial or otherwise) of the Partnership and to
consummate the transactions contemplated by this Agreement;
(c) The Partnership furnished him all additional information
concerning the Partnership's business and affairs that he requested;
(d) He was permitted to ask questions of, and to receive answers
from, the Managing General Partner concerning the terms and conditions of an
investment in a Limited Partnership Interest, and to obtain all additional
information he considered necessary to verify the accuracy of the information
received by him from the Managing
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General Partner, and he understands the risks associated with an investment in
the Partnership and that such an investment is highly speculative;
(e) Because of his considerable knowledge and experience in
financial and business matters in general and securities investments in
particular, he is able to evaluate the merits, risks, and other factors bearing
on the suitability of a Limited Partnership Interest as an investment;
(f) His income and net worth are such that he is not now, and does
not contemplate being, required to dispose of any investment in the Partnership
to satisfy any existing or expected obligation, and he is otherwise fully able
to bear the economic risks of his proposed investment in the Partnership,
including the risk of losing all or any part of his investment in the
Partnership and the probable inability to sell, transfer, or pledge, or
otherwise dispose of an investment in the Partnership for an indefinite period;
(g) He is acquiring a Limited Partnership Interest solely for his
own account, as principal, for investment purposes and not with a view to or for
resale in connection with any distribution or underwriting of any Partnership
Interests;
(h) He understands that the Limited Partnership Interest that he
will purchase has not been and will not be registered under either the
Securities Act of 1933 or any state securities law, that he must hold the
Limited Partnership Interest indefinitely unless the Partnership Interests are
subsequently registered under those laws or transferred in reliance on advice of
counsel satisfactory to the Partnership that registration under those laws is
not required, and that stop-transfer instructions will be noted in the
appropriate records of the Partnership;
(i) He understands that the document evidencing a Limited
Partnership Interest acquired by him will bear the following legend:
These securities have not been registered under either the
Securities Act of 1933 or any state securities law and were acquired
pursuant to an investment representation by the record owner. These
securities are not transferable absent either registration under the
Act and every applicable state securities law or advice of counsel
satisfactory to the Partnership that registration in not required.
Additionally, these securities are subject to certain transfer
restrictions set forth in the Limited Partnership Agreement of the
Partnership. Reference may be made to the Limited Partnership
Agreement for the details of those restrictions.
(j) He understands that a legend substantially identical to the one
described above will be placed on every new document issued upon a transfer of a
Limited Partnership Interest;
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(k) He shall not sell, transfer, pledge, or otherwise dispose of any
part of his Limited Partnership Interest, unless the Partnership Interests are
registered under the Securities Act of 1933 and under every applicable state
securities law or unless the Partnership is furnished with advice of counsel
satisfactory to it that registration under those laws is not required; and
(l) He understands that the Partnership does not file periodic
reports with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934.
ARTICLE III
PARTNERSHIP CAPITAL
11. Capital Contributions.
(a) Upon executing this Agreement, each Partner shall make or has
made a Capital Contribution in the amount and of the type, and initially shall
have a Percentage Interest equal to the percentage, set forth opposite his name
on Exhibit A. Partners may make (but Limited Partners are not required to make)
additional Capital Contributions at such time and in such amount as they in
their sole discretion shall determine but only if the Managing General Partner
and a Majority in Interest consent to such additional Capital Contributions.
Upon the assignment of any Partnership Interest, the making of an additional
Capital Contribution or any return of a Capital Contribution, or any
substitution of a Partner, Exhibit A shall be amended to accurately reflect the
name, address, Capital Contribution and Percentage Interest of each Partner.
Each Partner will also be assigned either or both a Class A and Class B
Partnership Interest depending on the assets contributed by each Partner and as
they shall mutually agree at the time of contribution.
(b) Notwithstanding (a) above, no Capital Contributions shall be
made or permitted by any Partner which would result, directly or indirectly, in
the Partnership being treated as an investment company under section 721(b) of
the Code, and any such attempted Capital Contribution shall be void ab initio.
The Managing General Partner shall withhold its consent to the making of an
additional Capital Contribution, unless it has satisfied itself (by seeking
advice of legal counsel or otherwise) that the making of the additional Capital
Contribution will not result, directly or indirectly, in the Partnership being
treated as an investment company under section 721(b) of the Code.
(c) A Partner shall not receive from the Managing General Partner or
out of Partnership Property, and the Managing General Partner and the
Partnership shall not return to a Partner, any part of his Capital Contribution,
except as set forth in Articles V, VIII and IX of this Agreement and such
distribution is determined to be a return of a Partner's Capital Contribution,
and then only if all liabilities of the Partnership, except liabilities to the
Partners on account of their Capital Contributions,
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have been paid or there remains property of the Partnership sufficient to pay
them. The Partnership shall not pay interest on Capital Contributions, and, a
Partner may demand and receive only cash in return for his Capital Contribution,
except to the extent provided for in Articles V and IX of this Agreement or
unless the Liquidator (as defined in section 37) decides to distribute
Partnership property in kind upon the dissolution, winding-up, and termination
of the Partnership, or unless the distribution of property to a Partner is
unanimous1y approved by the Partners. Each Partner, by signing this Agreement
or a counterpart of it, consents to all distributions authorized by this
Agreement and releases all other Partners from all liability to both him and the
Partnership for all distributions made in accordance with this Agreement.
12. Capital Account
(a) The Managing General Partner shall establish and maintain a
Capital Account for each Partner in the Partnership's books of account. Capital
Accounts shall be maintained and adjusted in accordance with generally accepted
accounting principles. A Limited Partner shall not be obligated to restore a
deficit balance in its Capital Account, except to the extent required by the
Act. Consistent with these capital account maintenance rules, the Managing
General Partner shall credit to each Partner's Capital Account the amounts of
the Partner's Capital Contributions and any Profits allocated to the Partner.
The Managing General Partner shall charge to or deduct from each Partner's
Capital Account the amounts of all distributions (in cash or other property) or
the Partner and any Losses allocated to the Partner. If any interest in the
Partnership is transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferror to the extent
it relates to the transferred interest.
(b) The provisions of this section and the other provisions of this
Agreement pertaining to the maintenance of Capital Accounts are intended to
comply with Treasury Regulation Section 1.704-1(b) (or any successor provision
thereto), and shall be interpreted and applied in a manner consistent with such
Regulations. In the event that Managing General Partner determines that it is
prudent to modify the manner in which the Capital Accounts are computed in order
to comply with such Regulations, provided that it is not likely to have a
material effect on the amounts distributable to any Partner without such
Partner's consent and upon receipt of an opinion of tax counsel to the
Partnership concluding that such modification will be given effect for federal
income tax purposes, the Managing General Partner may make such modification.
(c) The Managing General Partner shall revalue the Partnership's
Property (based on its fair market value as of the moment immediately preceding
the relevant event) and shall adjust Capital Accounts to take into account any
resulting Profit or Loss (determined as if the Partnership sold all its Property
for cash equal to the Property's fair market value) upon the occurrence of
either of the following events: (1) the making by any Partner of any non-Pro
Rata additional Capital Contribution, (2) the partial or complete withdrawal of
a Partner's Partnership Interest, or (3) the admission of a Partner.
15
(d) For the purposes of determining Percentage Interests, making
allocations and distributions pursuant to Articles IV and V, and wherever else
relevant in this Agreement, multiple Capital Accounts shall be maintained for
each partner who owns more than one class of Partnership Interest. A combined
Capital Account shall also be maintained for each partner who has more than one
class of Partnership Interest. The combined Capital Account shall be relevant
for determining the total amount of distributions to a Partner in the event of
the liquidation of the Partnership. In the event that a Partner with more than
one class of Partnership Interest has a positive combined Capital Account
balance at the time of the liquidation of the Partnership, but has a deficit in
one of the separate Capital Accounts, liquidating distributions shall be made
only to the extent of the net positive balance.
13. Expenses Paid by Partners. Any Partnership expense reasonably paid by
any Partner on behalf of the Partnership is an indebtedness of the Partnership
to the Partner and does not increase the Partner's Partnership Interest or
Percentage Interest. The Partnership shall reimburse the Partner as soon as
practicable and may pay interest on the indebtedness.
14. Loans by Partners; Restrictions on Borrowing. The Managing General
Partner may borrow money on behalf of the Partnership from any Partner in such
amounts and for such purposes as it considers necessary, convenient or
incidental to the accomplishment of the purposes of the Partnership. Each loan
to the Partnership by a Partner (excluding reimbursable expenses) shall be
evidenced by a promissory note or similar instrument of the Partnership, may be
secured by a lien on the Property, may bear interest at a rate determined by
agreement between such Partner and the Managing General Partner and may be
subject to such other terms and conditions as are agreed to by such Partner and
the Managing General Partner. The Partnership may prepay each loan from a
Partner in whole or in part, at any time and from time to time, without premium
or penalty. The Managing General Partner may not borrow money from persons other
than Partners or pledge Partnership assets without the express written consent
of the non-managing general partner.
ARTICLE IV
PROFITS AND LOSSES AND TAXABLE INCOME AND TAXABLE LOSS
15. Allocations.
(a) Allocation of Profits and Losses.
(i) Profits and Losses of the Partnership shall be determined
for each fiscal year of the Partnership in accordance with the cash method of
accounting, with such exceptions thereto as are set forth in this Agreement, and
otherwise in accordance with generally accepted accounting principles applied in
a consistent manner.
16
(ii) Except as otherwise provided, the Partnership's Losses,
if any, arising in a fiscal year shall be allocated among the Partners as
follows:
(1) FIRST: To the extent of the aggregate positive
Capital Account balances of the Partners as of the end of the fiscal year, Pro
Rata to the Partners taking into account any changes in Partnership Percentage
Interests during the fiscal year.
(2) SECOND: Pro Rata, to the Managing General Partner.
(iii) Profits arising in a fiscal year shall be allocated
among the Partners as follows:
(1) FIRST: To the Managing General Partner until Profits
allocated to the Managing General Partner during the term of the Partnership
pursuant to this Section 15(a)(ii)(1) equal Losses allocated to the Managing
General Partner during the term of the Partnership pursuant to Section
15(a)(ii)(2) then
(2) SECOND: To the Partners Pro Rata taking into account
any changes in Partnership Percentage Interests during the fiscal year.
(b) Allocation of Taxable Income and Taxable Loss.
(i) Except as otherwise provided in this section l5(b),
allocations of tax items among the Partners shall be consistent with
corresponding book (Profits and Losses) items (if any). For tax purposes,
Profits and Losses, or any item thereof, shall be appropriately adjusted to
reflect Taxable Income and Taxable Loss, or any item thereof, as determined
under the Code and shall be allocated among the Partners in such a manner as to
comply with the provisions of the Code and Regulations thereunder (including, if
necessary, the "minimum gain chargeback provisions" of the Regulations under
Section 704 of the Code). For example, any gain or loss recognized by the
Partnership with respect to property contributed to the Partnership by a Partner
shall be shared among the Partners so as to take account of the variation, if
any, between the basis of the property to the Partnership and its fair market
value at the time of contribution or revaluation, whichever is applicable, so as
to comply with the requirements of Section 704 of the Code. Thus, for example,
if a Partner contributes Property to the Partnership whose agreed fair market
value exceeds its adjusted basis in the hands of the contributing Partner
("built-in gain"), and there have been no events giving rise to a revaluation,
built-in gain with respect to such contributed Property shall first be allocated
to such contributing Partner when the Partnership recognizes gain upon a
disposition of such contributed Property, but not in an amount in excess of such
built-in gain; the remaining balance of such recognized gain, if any, shall be
allocated among the Partners as set forth herein. The allocation of built-in
gain to a contributing Partner shall not increase such Partner's Capital
Account, because such gain was already taken into account when the built-in gain
property was contributed to the Partnership. A Partner
17
who contributes property other than cash shall provide the Managing General
Partner with information necessary to verify the contributing Partner's adjusted
tax basis in the items of property contributed by him to the Partnership.
(ii) Generally, except as provided in section l5(b)(i),
Taxable Income and Taxable Loss (and each such income and loss item) shall be
allocated Pro Rata among the Partners. In the event, however, that non-Pro Rata
distributions of property are made to a Partner or the net proceeds from the
sale of property are distributed non-Pro Rata to a Partner, Taxable Income and
Taxable Loss derived from such distributions or sales shall be allocated 100% to
such Partner, subject only to such modifications as are necessary to comply with
Section 704 of the Code. In addition, no allocations of Taxable Loss shall be
made to a Limited Partner that would create a deficit balance in the Limited
Partner's Capital Account.
ARTICLE V
DISTRIBUTIONS, WITHDRAWALS AND LOANS
16. Distributions
(a) Cash Flow Distributions. Cash Flow is to be distributed
periodically as the Managing General Partner shall determine.
(b) Partial or Complete Withdrawal by a Partner From the
Partnership.
(i) In the event of a partial or complete withdrawal of a
Partner from the Partnership pursuant to Article VIII, the Managing General
Partner shall, as promptly as is reasonably possible, distribute to the Partner
any assets then owned by the Partnership that were previously contributed by
such Partner to the Partnership but this distribution shall be limited to the
extent it would cause the Capital Account of such Partner to be negative. If the
Partner has a positive Capital Account balance, then the Partnership shall
distribute to the Partner his Pro Rata share of the Marketable Securities, cash
and other readily divisible assets of the Partnership. The withdrawing Partner
shall also be entitled to receive cash equal in value to his Pro Rata share of
the fair market value (as reasonably determined by the Managing General Partner)
of any non-readily divisible assets owned by the Partnership. The Managing
General Partner shall, as promptly as possible, distribute this additional
amount of cash, if any, to the withdrawing Partner. Cash distributions to the
withdrawing Partner shall be reduced by such Partner's Pro Rata share of the
liabilities of the Partnership and by any expenses incurred by the Partnership
with respect to the withdrawal of the Partner.
(ii) A Partner may request that all or a portion of the
Marketable Securities subject to the requested withdrawal be sold by the
Partnership and the net proceeds (after selling and other expenses) distributed
as directed by him. In the
18
event that the Managing General Partner is unable or unwilling to sell these
Marketable Securities, it shall distribute them to the Partner, unless it is
notified by the Partner to cancel the withdrawal.
(iii) The Managing General Partner shall not be required to
distribute to the requesting Partner any assets that the Partnership is legally
restricted or prohibited from distributing to the Partner, unless steps can be
taken to remove the restriction or prohibition; in which case the requesting
Partner shall be charged with the expense of removing such restriction or
prohibition. Any distribution hereunder shall also be subject to the limitations
set forth in sections 11(c) and 17, respectively.
(b) Liquidating Distributions. The net proceeds from liquidation of
the Partnership's assets pursuant to its dissolution, winding-up, and
termination shall be distributed, and all Profits and Losses resulting from the
liquidation of the Partnership Property shall be allocated, among the Partners
in the proportions and orders of priority specified in this section 16(c).
(i) The Liquidator shall distribute the net proceeds from
liquidation of the Partnership's assets as follows:
(1) FIRST: To pay all the liabilities of the Partnership
that are then due and payable, except for both Capital Contributions of Partners
and liabilities to the Partners, in the order of priority required by Delaware
law; then
(2) SECOND: To establish any reasonable reserve that the
Liquidator may determine is required for unpaid, future, or contingent
liabilities or obligations of the Partnership; then
(3) THIRD: To pay all liabilities of the Partnership to
the Partners; Pro Rata according to the amounts of their respective liabilities;
then
(4) FOURTH: To the Partners to the extent of any
positive balances in their Capital Accounts, Pro Rata according to the amounts
of their respective positive balances; then
(5) FIFTH: Any remaining net proceeds shall be
distributed Pro Rata among the Partners.
(ii) Any Profits and Losses and Taxable Income and Taxable
Loss resulting from the disposition of the Partnership's assets in the process
of liquidation shall be allocated among the Partners in the manner provided in
section l5. Any Property distributed in kind in the liquidation shall be valued
and treated as if the Property were sold and the cash proceeds were distributed.
The Profits and Losses
19
arising from the constructive sale of the Property described in the preceding
sentence shall be allocated among the Partners in the manner provided in section
15.
17. Limitation on Distributions to Partners. A Partner may receive
distributions from the Partnership only to the extent the Partnership's total
assets exceed its total liabilities, other than liabilities to the Partners on
account of their Capital Contributions.
ARTICLE VI
AUTHORITY, DUTIES, AND LIABILITIES OF PARTNERS
18. Duties of Managing General Partner. The Managing General Partner, and
no other Partners, shall manage the affairs of the Partnership, shall apply
himself diligently for the Partnership, and shall devote to the Partnership such
time as is necessary and appropriate to manage the business of the Partnership.
The Managing General Partner is not required to devote all its business time to
the Partnership, and it may engage in other business ventures and employment,
including those in competition with the Partnership. In the performance of its
duties, the Managing General Partner may hire employees and agents of the
Partnership and generally shall supervise and direct all the daily operations of
the Partnership.
19. Managing General Partner's Fees and Expenses.
(a) Fees to Managing General Partner. In consideration for
performing services described herein, the Managing General Partner may be paid a
fee as agreed to by a Majority in Interest. Such fees shall be deemed earned
when the services have been performed and, regardless of when paid, shall be
non-executory from the date earned and shall be the obligation of the
Partnership from and after that date.
(b) Expenses. Except as otherwise provided herein, the Partnership
shall pay all expenses of the Partnership (which expenses may be either billed
directly to the Partnership or reimbursed to the Managing General Partner) which
may include, but are not limited to: (i) all costs of borrowed money, taxes and
assessments on the Property and other taxes applicable to the Partnership; (ii)
all costs for goods and materials, whether purchased by the Partnership directly
or by the Managing General Partner on behalf of the Partnership; (iii) legal,
audit, accounting, brokerage and other professional fees; (iv) fees and expenses
paid to independent contractors, mortgage bankers, brokers, insurance brokers
and other agents; (v) expenses of organizing, revising, amending, converting,
modifying or terminating the Partnership; (vi) expenses in connection with
distributions made by the Partnership to, and communications and bookkeeping
work necessary in maintaining relations with, Partners; (vii) expenses in
connection with preparing and mailing reports to Partners; (viii) costs of any
accounting, statistical or bookkeeping equipment necessary for the maintenance
of the books and records of the Partnerships; (ix) the cost of preparation and
dissemination of informational material and documentation relating to the
Partnership; (x) except with respect to litigation solely
20
among the Partners as such, costs incurred in connection with any litigation in
which the Partnership is involved, as well as in the examination, investigation
or other proceedings, conducted against the Partnership by any regulatory
agency, including legal and accounting fees incurred in connection therewith;
(xi) costs of any computer services or equipment or services of personnel used
for or by the Partnership; and (xii) expenses of professionals employed by the
Partnership in connection with any of the foregoing, including attorneys,
accountants and appraisers.
20. Authority of Managing General Partner. Except as otherwise provided
herein, the Managing General Partner may bind the Partnership to do all acts
that are necessary, appropriate, or incidental to the accomplishment of the
purposes of the Partnership. Any person dealing with the Partnership or the
Managing General Partner may rely on a certificate signed by the Managing
General Partner as to the identity of any Partner, the existence or absence of
any fact or condition that is necessary to permit action by either the
Partnership or the Managing General Partner or germane in any other way to the
affairs of the Partnership, and the persons who are authorized to execute and
deliver any documents or instruments of or on behalf of the Partnership. Without
limiting the generality of the foregoing, the Managing General Partner is
specifically authorized to do the following:
(a) to negotiate and enter into leases and agreements with land or
building owners or other Persons, and to incur obligations for, and on behalf
of, the Partnership in connection with Partnership business;
(b) to borrow money on behalf of the Partnership and, as security
therefore, to encumber the Property;
(c) to prepay, in whole or in part, refinance, increase, modify or
extend any obligation affecting the Property;
(d) to sell, exchange, convey and lease the Property;
(e) to employ from time to time, at the expense of the Partnership,
other Persons required for the operation and management of the Partnership
business, including accountants, attorneys and others, who may be Partners, on
such terms and for such compensation as the Managing General Partner determines
to be reasonable and this may include Persons which are Affiliates;
(f) to pay all attorney's and accountant's fees and other costs
incurred in connection with the formation of the Partnership business and the
completion of all steps necessary or advisable for the Partnership to comply
with applicable laws;
(g) to assume the responsibilities imposed on the Managing General
Partner by the Act;
21
(h) to compromise, arbitrate or otherwise adjust claims in favor of
or against the Partnership and to carry such insurance as the Managing General
Partner considers advisable;
(i) to exercise the voting rights associated with the securities and
other Property owned by the Partnership;
(j) to commence or defend litigation with respect to the Partnership
or any assets of the Partnership as the Managing General Partner considers
advisable, at the expense of the Partnership;
(k) to make, execute, acknowledge and deliver documents of transfer
and conveyance and any other instruments that may be necessary or appropriate to
carry out its powers; and
(l) to do all such acts and take all such proceedings and execute
all such rights and privileges, although not specifically mentioned herein, as
the Managing General Partner considers necessary to conduct the business of the
Partnership and to carry out the purposes of the Partnership.
Notwithstanding the foregoing, the Managing General Partner shall
not take any of the fo11owing actions without the consent of a Majority in
Interest:
(1) assign all or any part of the property for the
benefit of its creditors or confess a judgment against the Partnership;
(2) take any action in contravention of the Act, the
certificate of limited partnership or this Agreement;
(3) sell, lease, transfer, assign, pledge or encumber
the property of the Partnership (except with respect to transactions to which
section 32 or section 37 applies);
(4) loan an amount of money in excess of $100,000 to a
Partner; or
(5) admit a Person as a Managing General Partner of the
Partnership.
21. Special Limitation. During the period the Partners have determined
that the Partnership will only be availed of only for investment purposes, which
shall be the period, if any, contemplated by Section 6(c), the Managing General
Partner may not purchase, sell, or exchange Marketable Securities or assets that
pertain to a Class B Partnership Interest without the consent of the Partners to
whom the Marketable Securities are deemed owned or allocated for federal income
tax purposes, but the
22
Managing General Partner shall have voting rights and all other aspects of
management and control over such Marketable Securities and assets to which a
Class B Partnership Interests pertains.
22. Dealing with Affiliates. The Managing General Partner may employ and
enter into contracts and other arrangements with any Person, including an
Affiliate, and may obligate the Partnership to pay reasonable compensation for
services rendered by such Persons on terms that, in the judgment of the Managing
General Partner, are not less favorable to the Partnership than would be
available from an unrelated party.
23. Indemnification of Managing General Partner. The Managing General
Partner need not secure the performance of its duties by bond or otherwise. A
Managing General Partner is not liable, responsible, or accountable in damages
or otherwise to any Partner or to the Partnership for any act taken or omission
made in good faith on behalf of the Partnership and in a manner that such
Managing General Partner reasonably believes to be within the scope of the
authority granted to it by this Agreement and in the best interest of the
Partnership, except for gross negligence or willful misconduct. Any loss,
expense (including attorneys' fees) or damage incurred by a Managing General
Partner by reason of any act or omission by it in good faith on behalf of the
Partnership and in a manner that it reasonably believes to be within the scope
of the authority granted to it by this Agreement and in the best interest of the
Partnership (but not, in any event, any loss, expense or damage incurred by a
Managing General Partner by reason of gross negligence or willful misconduct)
shall be paid to the indemnified Managing General Partner from the Partnership's
assets, to the extent available.
24. Liability of Limited Partners. The liability of each Limited Partner
is limited to its Capital Contributions. Except as provided by the Act, a
Limited Partner is not required to contribute money to, or for the liabilities
of the Partnership, and is not personally liable for any loss, liability or
other obligations of the Partnership.
25. Authority of Limited Partners and Non-Managing General Partners. The
Limited Partners shall not participate in the management of, or have any control
over, the business or policies of the Partnership, nor any control over
Marketable Securities, except as required by the Act or permitted by section 20,
and the Limited Partners shall not transact any business in the name of the
Partnership. Notwithstanding the foregoing, the Partners may make the election
set forth in Treas. Reg. ss. 1.761-2 to have the Partnership excluded from the
provisions of Subchapter K of Chapter 1 of the Code. In the event a Partner
ceases (whether through removal, death, or resignation) to serve as Managing
General Partner, a Majority in Interest of the Partners shall appoint another
Partner to serve as the Managing General Partner.
23
ARTICLE VII
TRANSFER OF PARTNERSHIP INTERESTS
26. Limited Partners. A Limited Partner shall not pledge, encumber or
hypothecate his interest in the Partnership without the consent of the Managing
General Partner. Otherwise, subject to sections 28 and 29, and only if the
Managing General Partner consents, a Limited Partner may make an Assignment of a
Limited Partnership Interest. However, an Assignment does not relieve the
Limited Partner of his obligations and liabilities under this Agreement, or
constitute the assignee a Limited Partner, or confer on the assignee any
Partnership Rights. An assignee of a Limited Partner's Partnership Interest may
be admitted and substituted as a Limited Partner and acquire Partnership Rights
only upon the satisfactory completion of the requirements specified in section
29. The failure or refusal of the Managing General Partner to consent to the
admission of an assignee as a Limited Partner does not affect the right of the
assignee to the Partnership Interest of his predecessor in interest.
27. Managing General Partner. Subject to section 28, a Managing General
Partner may make an Assignment, directly or indirectly, of all or any part of
its Partnership Interest. However, an Assignment does not relieve such Managing
General Partner of its obligations and liabilities under this Agreement, or
constitute the assignee a Managing General Partner, or confer on the assignee
any Partnership Rights. Subject to section 28, and only if a Majority in
Interest consents, a Managing General Partner may make an Assignment of both its
Partnership Interest and its Partnership Rights if the assignee assumes in
writing all such Managing General Partner's obligations and liabilities under
this Agreement and if all the applicable requirements of section 29 are
satisfied. Upon compliance with the immediately preceding sentence, an assignee
of such Managing General Partner has all the rights and powers granted to such
Managing General Partner under this Agreement and has all the obligations and
liabilities of such Managing General Partner under this Agreement.
28. Restriction on Transfer. Notwithstanding any other provision of this
Agreement, an assignment of a Partnership Interest shall not be made, and
consent thereto shall be withheld:
(a) Unless the Managing General Partner has satisfied itself (by
seeking advice of legal counsel or otherwise, with any resulting Partnership
expense to be reimbursed by the assignor) that the assignment will not have any
significant adverse tax effect upon the Partnership or the other Partners;
(b) Unless the Managing General Partner has satisfied itself (by
advice of legal counsel, with any resulting Partnership expense to be reimbursed
by the assignor) that the proposed assignment may be made without registration
under any applicable securities law; and it will not violate any applicable
securities law (including investor
24
suitability standards);
(c) If the Assignment is sought to be made to:
(i) a minor or incompetent, except if made by will or
intestate succession, or
(ii) to a Person which is not an Affiliate.
29. Admission of Substitute Partner. Subject to the other provisions of
this Agreement, an assignee of a Partnership Interest may be admitted as a
Partner and granted Partnership Rights only if:
(a) the Assignment is made pursuant to a written instrument in a
form satisfactory to the Managing General Partner and specifies the intention of
the assignor that the assignee be substituted as a Partner;
(b) the Managing General Partner consents to the admission by
executing two counterparts of this Agreement that evidences the Partnership
Rights of the assignee, and if the assignee is to be admitted as a Partner a
Majority in Interest consent to the admission;
(c) the assignee accepts, signs and agrees to be bound by this
Agreement, by executing two counterparts of this Agreement, including an amended
Exhibit A, and such other documents or instruments as the Managing General
Partner requires to effect the admission of the assignee as a Partner;
(d) the assignee provides the Managing General Partner with evidence
satisfactory to it of the assignee's authority to become a Partner under the
terms of this Agreement;
(e) the assignee pays all filing, publication and other costs
(including reasonable attorneys' fees) incurred by either the Partnership or the
Managing General Partner in connection with the admission and substitution of
the assignee as a Partner. Notwithstanding an assignee's satisfaction of any or
all of the conditions specified above, the Managing General Partner, in its
absolute discretion, may refuse to consent to the assignee's admission as a
Partner, in which event the assignee will not obtain any Partnership Rights, but
will retain only the rights of an assignee under sections 26 or 27.
30. Rights of Partner After Assignment and Substitution. Upon the
Assignment of all his Partnership Interest, and the admission of a substitute
partner, a Partner shall cease to be a Partner and to have any Partnership
Rights.
31. Allocations and Distributions After Assignment. For the purposes of
allocations of Profits and Losses, Taxable Income or Taxable Loss, and
distributions, an Assignment of a Partnership Interest is effective as to the
Partnership, and shall be
25
reflected in the records of the Partnership, as of the date that the Managing
Genera1 Partner receives written notice of the Assignment. The Taxable Income or
Taxable Loss, Profits and Losses and cash and other distributions in respect of
the assigned Partnership Interest with respect to the fiscal year in which the
Assignment of the Partnership Interest occurs shall be divided between the
assignor and the assignee according to the method provided to the Managing
General Partner by the assignor and the assignee, so long as such method is
permitted under the Code and does not adversely affect the other Partners or the
Partnership from a tax or economic perspective. The method of allocation shall
be provided to the Managing General Partner in the written notice of the
Assignment. Any additional costs for computing the allocations hereunder shall
be paid by the assignor or assignee, as the case may be. The written notice
referred to above shall also contain information as to whether the assignor or
assignee shall be responsible for the payment of such additional cost, if any.
ARTICLE VIII
RETIREMENT, WITHDRAWAL, OR REMOVAL OF PARTNERS
32. Withdrawal of Managing General Partner or Limited Partner.
(a) A Limited Partner may, at any time, withdraw all or part of his
Partnership Interest from the Partnership by providing written notice thereof to
the Managing General Partner. Immediately after the receipt of such written
notice from a Partner, the Managing General Partner shall make the appropriate
distributions to the Partner in partial or complete redemption of his
Partnership Interest as set forth in section 16(b).
(b) A partial withdrawal by a Partner shall be made in increments of
one tenth (1/10th) of one percent (1%) of a Percentage Interest. The written
notice of withdrawal from a Partner to the Managing General Partner must state
whether the withdrawal is a partial or complete withdrawal and, if a partial
withdrawal, must state the Percentage Interest that is being withdrawn. A
Partner shall not make a partial withdrawal that will result in his remaining
Percentage Interest becoming less than one tenth (1/10th) of one percent (1%)
immediately after the withdrawal.
(c) The Managing General Partner agrees that it will fully cooperate
to the extent permitted by law to accomplish a withdrawal requested by a Partner
hereunder. It also agrees that it will not take any action that will obstruct or
render impossible the application of this section 32 (such as to pledge the
Partnership's Marketable Securities as collateral to creditors of the
Partnership), unless such action is essential to accomplish the purposes of the
Partnership.
(d) The partial withdrawal of a Limited Partner does not dissolve or
terminate the Partnership unless there is only one Partner then remaining. The
remaining Partners shall amend this Agreement to reflect the partia1 or complete
withdrawal of the
26
Partner from the Partnership, if and to the extent necessary.
(e) Upon the giving of the notice of withdrawal pursuant to
Paragraph (a), and upon the dissolution of the Partnership, the voting rights
with respect to any Marketable Securities allocable to the Percentage Interest
being withdrawn shall be vested in the withdrawing Partner or Partners, and the
Partnership shall have no voting rights with respect to such stock.
(f) The complete withdrawal of all the Limited Partners shall
constitute a dissolution of the Partnership pursuant to Article IX.
33. Retirement, Removal, or Withdrawal of Managing General Partner. The
Managing General Partner may withdraw any part of its General Partnership
Interest without the consent of a Majority in Interest. The Retirement, removal,
or withdrawal of the Managing General Partner shall dissolve the Partnership
only if there is no successor General Partner. Notwithstanding the foregoing or
anything else in this Agreement to the contrary, a merger, consolidation, or
reorganization of a Managing General Partner who is not a natural person, or a
sale of all or substantially all its assets that includes its Partnership
Interest, is not a Retirement or withdrawal of such Managing General Partner if
the resulting, surviving or acquiring Person is an Affiliate and becomes
substituted as the Managing General Partner of the Partnership. The resulting,
surviving or acquiring Person is substituted as the Managing General Partner
without further act if it gives notice of the substitution to the Partners
before the effective date of the merger, consolidation, reorganization or sale.
Each Partner consents to the admission and substitution of such substitute
Managing General Partner pursuant to this section 33, and no further consent or
approval of any Partner is required.
34. Retirement of Limited Partner. The Retirement of a Limited Partner
does not dissolve or terminate the Partnership except as provided in section
36(g), but the legal or personal representatives, heirs, successors, assignees,
or stockholders of a Retired Limited Partner, subject to section 26, shall
succeed to the Partnership Interests of the Retired Limited Partner and may make
an Assignment of the Partnership Interests within the limitations set forth in
this Agreement.
35. Rights of Partner After Retirement, Removal, or Withdrawal. A Partner
ceases to have any Partnership Rights upon his Retirement, removal, or complete
withdrawal from the Partnership. However, until the appropriate distributions,
if any, are made to a Retired, removed, or withdrawn Partner for his Partnership
Interest, the Retired, removed, or withdrawn Partner is entitled to receive the
allocations of Profits and Losses, Taxable Income or Taxable Loss and all
distributions referred to in section 16 applicable to his Partnership Interest.
27
ARTICLE IX
DISSOLUTION
36. Events of Dissolution. The Partnership shall be dissolved, and unless
reconstituted shall be terminated, upon:
(a) the expiration of its term;
(b) the vote of a Majority in Interest to dissolve the Partnership;
(c) the Partnership being adjudicated insolvent or bankrupt;
(d) the Retirement, removal, or withdrawal of the Managing General
Partner;
(e) the death of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇; or
(f) the sale of all or substantially all of the Partnership's
Property.
(g) the complete withdrawal of the Limited Partners.
37. Winding Up and Distributions. Upon the dissolution of the Partnership
pursuant to section 36, and unless the Partnership is reconstituted, the winding
up of the Partnership's business and the liquidation and distribution of
Partnership assets must be carried out with due diligence and in a timely
manner, and consistent with both the requirements of applicable law and the
following provisions of this section:
(a) The Managing General Partner shall be responsible for taking all
actions relating to the winding up, liquidation, and distribution of assets of
the Partnership, unless its Retirement, removal, or withdrawal causes the
dissolution, in which case the fiscal agent, liquidator, or receiver appointed
(without judicial action) by a Majority in Interest shall be so responsible. The
Managing General Partner, or the appointed fiscal agent, liquidator, or
receiver, is referred to in this Agreement as the "Liquidator." A Limited
Partner can be appointed to be the Liquidator. The Liquidator shall file all
certificates or notices of the dissolution of the Partnership as required by
law. Upon the complete liquidation and distribution of the Partnership assets,
the Partnership shall terminate, and the Liquidator shall execute, acknowledge,
and cause to be filed all certificates and notices required by law to terminate
the Partnership.
(b) The Liquidator shall proceed without unnecessary delay to sell
and otherwise liquidate the Partnership's assets. Unless directed otherwise by a
Majority in Interest, all Marketable Securities, cash and other readily
divisible or fungible assets of the Partnership shall be distributed directly to
the Partners in the manner set forth in
28
section 16(c)(i). The Liquidator shall promptly sell the other assets of the
Partnership unless it determines that an immediate sale of part or all of such
assets would cause undue loss to the Partners. In such case, the Liquidator, to
avoid such loss, may defer the liquidation of the Partnership assets for a
reasonable time, except for those liquidations that are necessary to satisfy the
debts and liabilities of the Partnership to persons and parties other than the
Partners. The Liquidator shall distribute the proceeds from the liquidation of
the Partnership's assets as provided in section 16(c).
(c) Upon the dissolution of the Partnership pursuant to section 36,
and unless the Partnership is reconstituted, the Liquidator shall cause the
accountants for the Partnership to prepare within ninety (90) days after the
occurrence of the event of dissolution, and immediately thereafter shall furnish
to each Partner, a statement setting forth the assets and liabilities of the
Partnership as of the date of its dissolution. The Liquidator, promptly
following the complete liquidation and distribution of the Partnership's assets,
shall cause the Partnership's accountants to prepare, and the Liquidator shall
furnish to each person who is a Partner immediately before the dissolution, a
statement showing the manner in which the Partnership assets were liquidated and
distributed.
38. Distribution of Liquidation Proceeds and Assets and Allocation of
Gains and Losses. Subject to the last sentence of 12(d), the net proceeds from
liquidation of the Partnership's assets and the unliquidated Property of the
Partnership shall be distributed, and all Profits and Losses resulting from the
liquidation of the Partnership shall be allocated, among the Partners in the
proportions and orders of priority specified in section 16(c).
39. Limitation of Liability of Partners. Upon the dissolution of the
Partnership and the distribution of the net liquidation proceeds pursuant to
section 36 and section 16(c), each Partner shall look solely to the assets of
the Partnership for the payment of his unreturned Capital Contributions, and if
the Partnership's assets remaining after the payment or discharge of the debts
and liabilities of the Partnership are insufficient to pay the full amount of
the unreturned Capital Contributions of each Partner, the Partner shall have no
recourse or claim against any Partner or the Partnership with respect to its
unreturned Capital Contributions, except for claims for fraud, gross negligence,
or breach of fiduciary duty.
40. Waiver of Right of Partition of Assets. Each Partner, and for his
heirs, successors, and assigns, waives his right to the partition of the assets
of the Partnership upon the dissolution and liquidation of the Partnership.
ARTICLE X
ACCOUNTING YEAR, BOOKS, RECORDS, AND REPORTS
41. Books and Records. In accordance with the Act, the Managing General
Partner shall maintain at the principal office of the Partnership a complete and
accurate
29
set of books of records and accounts, in which it shall make full and complete
entries of all dealings or transactions relating to the Partnership's business
and where it shall keep all supporting documentation of transactions with
respect to the conduct of the Partnership's business. The Managing General
Partner may delegate responsibility to those persons as a Majority in Interest
agree to compile and maintain all required information and prepare all required
materials provided for in this Agreement. Each Partner or his duly authorized
representative, upon five days' advance notice to the Managing General Partner,
may examine during normal business hours the books of the Partnership and all
other records and information concerning the operation of the Partnership.
42. Reports. If requested by a Partner at least 30 days prior to the end
of a quarter, within 60 days after the end of each fiscal quarter in each fiscal
year of the Partnership, the Managing General Partner shall cause to be prepared
and sent to each Partner a balance sheet, income statement and cash flow
statement of the Partnership for and as of the end of that fiscal quarter, in
each case unaudited but accompanied by a report of the activities of the
Partnership for that quarter. Within 90 days after the end of each fiscal year
of the Partnership, the Managing General Partner shall cause to be prepared and
sent to each Partner a financial report consisting of (a) a balance sheet as of
the end of the fiscal year; (b) statements of income, partner's equity, and
changes in financial position for the fiscal year; (c) if requested by a
Partner, the opinion of the Partnership's certified public accountant concerning
the foregoing financial statements; (d) a summary of the Partnership's
activities for the fiscal year; (e) a statement showing the distributions to
each Partner during the fiscal year and identifying any distributions which
constitute a return of Capital Contribution; and (f) a statement showing the
amount of Taxable Income or Taxable Loss, and listing each item of income, gain,
loss, deduction, or credit allocated or charged against the Partner for federal
and state income tax purposes.
43. Bank Accounts. The Managing General Partner shall maintain the bank
accounts of the Partnership in such financial institutions as the Managing
General Partner considers appropriate. The Managing General Partner shall make
or permit withdrawals from the Partnership's bank accounts on the signature of
the Managing General Partner or on such other signatures as the Partners shall
designate in writing.
44. Tax Elections. If the Partnership has not made the election set froth
in Treas. Reg. ss. 1.761-2, or if Subchapter K of Chapter 1 of the Code applies
to the Partnership, the Partnership shall file an election under Section 754 of
the Code, relating to the optional adjustment to the basis of partnership
property, at the first time it is permitted to do so after the beginning of the
term of this Partnership. The Managing General Partner shall make or waive, at
its discretion, all other tax elections required or permitted to be made by the
Partnership under the Code.
45. Accounting Method and Fiscal Year. The Managing General Partner shall
maintain the Partnership records and books of accounts in accordance with the
cash
30
method of accounting, with such modifications as are set forth in this
Agreement, and otherwise in accordance with genera11y accepted accounting
principles consistently applied. The fiscal year of the Partnership is the
calendar year.
ARTICLE XI
GENERAL PROVISIONS
46. Power of Attorney. Each Limited Partner (including each substitute
Limited Partner), by executing a counterpart of this Agreement, irrevocably
constitutes and appoints, with full power of substitution, the Managing General
Partner as his true and lawful attorney-in-fact, with full power and authority
in his name, place and ▇▇▇▇▇ to make, execute, acknowledge, deliver, swear to,
publish, record and file:
(a) any certificate or other instrument that may be required to be
fi1ed, published or recorded by the Partnership under the Act or any other law
of Delaware or that the Managing Genera1 Partner considers advisable to file,
publish or record;
(b) all documents (including schedules and amendments to this
Agreement) that may be required to effect the continuation or reinstatement of
the Partnership, admit an additional or substitute Partner (other than any
approval required of Limited Partners), reduce the Capital Contributions of a
Partner, or dissolve and terminate the Partnership; and
(c) all amendments to this Agreement adopted in accordance with
section 54. The foregoing power of attorney is coupled with an interest,
resulting from each Limited Partner's reliance on the power of the
attorney-in-fact to act as contemplated by this Agreement for the purposes
described in this section 46. The foregoing power of attorney shall survive the
Retirement of a Limited Partner and the Assignment by any Limited Partner of all
or any part of his Partnership Interest, except that when an assignee is granted
Partnership Rights and admitted as a substitute Limited Partner the power of
Attorney of the assignor Limited Partner shall survive the Assignment only for
the purpose of enabling the non-managing General Partner to make, execute,
acknowledge, deliver, swear to, publish, record and file every instrument
necessary to effect the substitution.
47. Partnership Contracts. The Managing General Partner may enter into
agreements and contracts on behalf of the Partnership only if they are in
writing and clearly indicate to the other parties that the Partnership is a
general partnership of which the Managing General Partner is a general partner.
48. Conveyances. Subject to section 20, the Managing General Partner may
sign any deed, mortgage, lease, ▇▇▇▇ of sale, security agreement, pledge,
contract or other instrument or commitment purporting to convey or encumber any
of the Partnership's Property or any interest therein, whether now or
subsequently owned or leased at any
31
time by the Partnership, and no other signature is required.
49. Notices. To be effective, a notice required or permitted by this
Agreement must be in writing, or by telegram, telex or telecopy if promptly
confirmed in writing. A notice is given when delivered or, if mailed, when
deposited in a United States postal service letterbox to be sent by first class,
postage prepaid, certified mail, with return receipt requested (whether or not
the sender receives the return receipt), and addressed, if to a Partner, at his
registered address listed on Exhibit A and, if to the Managing General Partner
or the Partnership, to the attention of such Managing General Partner at the
Partnership's principal business office.
50. Consents. Any consent required by this Agreement may be given as
follows:
(a) by a writing given by the consenting Partner and received by the
Managing General Partner or other appropriate recipient at or before the
occurrence of the action or other thing for which the consent was solicited,
unless the consent is nullified by:
(i) A writing from the consenting Partner that is received by
the Managing General Partner before the occurrence of the action or other thing
for which the consent was so1icited; or
(ii) the negative vote by the consenting Partner at any
meeting called for the purpose of considering the action or other thing.
(b) by the affirmative vote of the consenting Partner at any meeting
called for the purpose of considering the action or other thing for which the
Partner's consent was solicited.
51. Meetings. The Managing General Partner may call meetings of the
Partners for any purpose, at any, time. The Managing General Partner shall call
a meeting of the Partners within 30 days after he receives from a Majority in
Interest a written request for a meeting, stating the purpose of the requested
meeting and the matters proposed for consideration. Meetings of the Partners may
be held at such time, date and place as the Managing General Partner designates.
The Managing General Partner shall give notice of any meeting of the Partners
not less than ten nor more than 60 days before the date of the meeting, to each
Partner at his registered address listed on Exhibit A. The notice shall state
the time, date and place of the meeting, the purpose of the meeting and the
Partner at whose direction or request the meeting is called. Except in the case
of emergency, meetings of the Partnership shall be held in Delaware or South
Carolina. If a meeting is adjourned to another time or place, notice of the
adjourned meeting is not required if the time and place of the adjournment is
announced at the called meeting. The presence in person or by proxy of a
Majority in Interest constitutes a quorum at a meeting. Any notice of a meeting
required by this section may be waived in writing at, before or after the
meeting and shall be deemed to be waived by each Partner
32
who is present in person or by proxy at the meeting. Only those persons who are
Partners at the close of business on the day before the meeting are entitled to
vote at the meeting. Any Partner entitled to vote at a meeting may authorize any
person to act for him by written proxy if a copy of the proxy is delivered to
the Managing General Partner before the commencement of the meeting. To be
effective, a proxy must be signed by the Partner (and, if applicable, each
co-owner) or his duly appointed attorney-in-fact, and no proxy shall be valid
for more than 11 months after its date. A proxy is revocable at the pleasure of
the Partner granting it.
52. Binding Effect; Counterparts. The covenants and agreements contained
in this Agreement are binding on, and inure to the benefit of, the legal and
personal representatives, heirs, successors and permitted assignees of the
parties to this Agreement. The parties may execute this Agreement in any number
of counterparts, each of which will be an original, but all of which together
will constitute one and the same agreement.
53. Choice of Law. This Agreement and the rights and obligations of the
Partners under it are governed by, and construed and enforced in accordance
with, the laws of Delaware.
54. Complete Agreement; Modification. This Agreement contains the final,
complete and exclusive expression of the understanding among the Partners with
respect to the Partnership and its purposes and objectives and supersedes any
prior or contemporaneous agreement or representation, oral or written, by any of
them. Except to admit a new or a substitute Partner or to reflect the withdrawal
or Retirement of a Partner, this Agreement and every provision of it may be
modified or amended only by an agreement in writing signed by or on behalf of
all Partners.
55. Evidence of Partnership Interests. The Partnership Interest of each
Partner is evidenced exclusively by a counterpart of this Agreement (including
Exhibit A) that has been signed and dated by the Managing General Partner.
56. Tax Matters Partner. The Managing General Partner or its designee
shall be the "tax matters partner" of the Partnership for federal income tax
purposes. Pursuant to Section 6223(c)(2) of the Code, upon receipt of notice
from the Internal Revenue Service of the beginning of an administrative
proceeding with respect to the Partnership, the Managing General Partner, as the
tax matters partner, shall furnish the Internal Revenue Service with the names,
addresses, and Percentage Interests of each of the Partners. The Managing
General Partner agrees not to enter into a settlement agreement pursuant to
Section 6224 of the Code without providing at least 30 days advance written
notice to each Partner. As tax matters partner, the Managing General Partner
shall have absolute discretion regarding whether to seek judicial review of any
administrative determination and, if it determines to seek judicial review of
Internal Revenue Service action pursuant to Section 6226 of the Code, then the
Managing General Partner shall select the judicial forum for such review. The
tax matters partner shall receive no compensation for its services as such. The
Partnership shall bear all third party costs and
33
expenses incurred by the tax matters partner in performing its duties as such.
Nothing herein shall be construed to restrict the Partnership from engaging an
accounting firm or law firm to assist the tax matters partner in discharging its
duties hereunder.
57. Gender and Number. As used in this Agreement, the masculine gender
includes the feminine and neuter, and the singular includes the plural.
58. Title. Title to any Property acquired by the Partnership shall be
taken in the name of the Partnership.
IN WITNESS WHEREOF, this agreement has been executed by or on behalf of each
Partner as of the date written beside his name.
GENERAL PARTNER:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇. 9/27/00
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇. Date
LIMITED PARTNERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ 9/25/00
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ Date
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ 9/25/00
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ Date
34
ADDENDUM NO. 1 TO THE
LIMITED PARTNERSHIP AGREEMENT OF
▇▇▇▇▇▇▇▇▇▇▇▇ INVESTMENTS LIMITED PARTNERSHIP III
This is Addendum No. 1 (the "Addendum"), to the Limited Partnership
Agreement (the "Agreement") of ▇▇▇▇▇▇▇▇▇▇▇▇ Investments Limited Partnership III,
a Delaware limited partnership the "Partnership"), entered into by and among
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇., as the Managing General Partner, and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, as limited partners ("▇. ▇▇▇▇▇▇▇▇▇▇▇▇
and G ▇▇▇▇▇▇▇▇▇▇▇▇," respective1y) effective as of August 1, 2000.
ADDENDUM
In addition to the Managing General Partner, the following individual is
authorized to make withdrawals from the Partnership's bank accounts:
▇▇ ▇▇▇▇
The parties hereto have executed this Addendum effective as of the date
and year stated above.
MANAGING GENERAL PARTNER
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
LIMITED PARTNERS
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇