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EXHIBIT 7.t
XXX AND XXX XXXXXXXX FAMILY LIMITED PARTNERSHIP
This Agreement of Limited Partnership (Agreement) is made and entered
into as of this 9th day of December, 1997, by Xxxxx X. Xxxxxxxx and Melody Xxx
Xxxxxxxx as the initial general partners (together with any subsequently
admitted general partner, the General Partners) and the persons listed on
Schedule A as the initial limited partners (together with any subsequently
admitted limited partner, the Limited Partners). The General Partners and
Limited Partners are referred to collectively as Partners.
ARTICLE 1
ORGANIZATION
1.1 Formation. The Partners hereby form a limited partnership (the
Partnership) pursuant to the California Revised Limited Partnership Act. The
Managing General Partner shall cause to be recorded a Certificate of Limited
Partnership and any amendments thereto or additional documents as may be
appropriate to form a limited partnership pursuant to California law. The
General Partners shall not be required to deliver or mail to any Limited Partner
a copy of the Certificate of Limited Partnership or any Certificate of
Amendment.
1.2 Name. The Partnership shall operate under the name Xxx and Xxx
Xxxxxxxx Family Limited Partnership, or such other name as the Managing General
Partner from time to time may select.
1.3 Principal Office. The principal office of the Partnership shall
be located at 0000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, or such other
location as the Managing General Partner may determine.
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1.4 Purposes. The purposes of the Partnership are to acquire, own,
manage and sell or otherwise dispose of property for investment purposes.
1.5 Term. The Partnership shall commence as a limited partnership
upon the filing of its Certificate of Limited Partnership and shall continue
until terminated as provided below.
1.6 Definitions. Defined words or phrases are in italics the first
time they appear. Except as otherwise specified, definitions are contained in
Article 9.
ARTICLE 2
MANAGEMENT
2.1 Management of Partnership Affairs. The General Partners hereby
select Xxxxx X. Xxxxxxxx as the initial Managing General Partner. The Managing
General Partner shall be responsible for the administration and management of
the Partnership. The Managing General Partner's signature shall be sufficient to
bind the Partnership, and no third party shall have a duty to inquire into the
authority of the Managing General Partner to bind the Partnership. Except as
otherwise specifically provided, the General Partners other than the Managing
General Partner shall not be responsible for the management of the Partnership,
shall not have authority to bind the Partnership, and agree not to take any
action to bind the Partnership. A Managing General Partner shall be selected and
removed by Partners owning more than 50% of the General Partner Units owned by
Partners. Except as otherwise specifically provided, the decision of Partners
owning more than 50% of the General Partner Units owned by Partners shall be
deemed a decision of all of the General Partners. Unless the General Partners
elect a new Managing Partner, on the occurrence of an Event of Withdrawal (see
paragraph 6.7 below) of the Managing General Partner, the
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General Partner holding the greatest number of General Partner Units shall
become the Managing General Partner.
2.2 Authority of Managing General Partner. The Managing General
Partner is authorized:
(a) To invest and reinvest available funds in investments
that, in the judgment of the Managing General Partner, are consistent
with the purposes of the Partnership.
(b) To vote or give proxies to vote any stock or other voting
security, to exercise management rights as a general partner or as a
manager or member of a limited liability company, and to enter into or
oppose, alone or with others, voting trusts, mergers, consolidations,
foreclosures, liquidations, reorganizations or other changes in the
financial structure of any business organization or buy-sell, stock
restriction or stock redemption agreement.
(c) To expend Partnership funds or to borrow as the Managing
General Partner deems appropriate.
(d) To collect obligations payable to the Partnership and take
any lawful means for the recovery thereof by legal process or otherwise,
and to execute and deliver a satisfaction and release therefor, together
with the right to compromise any claim.
(e) To lease, sell, exchange, pledge, encumber or grant an
option for the sale of all or any portion of the real and personal
property of the Partnership, at such rental, price or amount for each,
and upon such other terms, as the Managing General Partner deems proper.
(f) To perform all of the Partnership's obligations under any
agreement entered into by the Partnership.
(g) To select and retain accountants, attorneys and other
advisers (including investment advisers) to provide services for the
Partnership.
(h) To execute, acknowledge and deliver any and all
instruments to effectuate the foregoing.
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(i) To take any other action deemed desirable by the Managing
General Partner to further the purposes of the Partnership.
2.3 Compensation. The Managing General Partner may be paid reasonable
compensation for services rendered to the Partnership and shall be reimbursed
for any expense properly incurred on behalf of the Partnership.
2.4 Related Party Transactions. The Managing General Partner may
cause the Partnership to obtain products or services from entities controlling,
controlled by or under common control with any General Partner and to pay such
entities reasonable fees for such products and services.
2.5 Books and Records. The Partnership's books and records shall be
maintained by the Managing General Partner at the principal office of the
Partnership and shall reflect clearly and accurately all transactions and other
matters relative to the Partnership's activities as are usually maintained for
similar activities.
2.6 Registration of Assets. Partnership cash and equivalents shall be
held in one or more bank, brokerage or other investment accounts established in
the name of the Partnership. Any other Partnership asset may be held either in
the name of the Partnership or in the name of any Partner as nominee, provided,
that the nominee Partner first files a written statement with the books and
records of the Partnership acknowledging the nominee relationship and describing
the Partnership asset to be held in the nominee Partner's name. If the statement
is properly filed, the Partnership shall be responsible to the nominee Partner
for any action, payment or liability incurred by the nominee Partner in holding
legal title to the asset.
2.7 Tax Matters Partner. The Managing General Partner shall be the
Partnership's Tax Matters Partner as defined in Code Section 6231(a)(7). The
Managing
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General Partner may appoint a new Tax Matters Partner who shall act at the
direction of the Managing General Partner.
2.8 Accounting Conventions. The Partnership shall keep its accounting
records and shall report its income for income tax purposes on a calendar year
basis using such method of accounting as the Managing General Partner shall
determine.
ARTICLE 3
ADMISSIONS AND CAPITAL CONTRIBUTIONS
3.1 Partnership Units. The Partnership shall have two classes of
Units, General Partner Units and Limited Partner Units. Only a General Partner
may hold General Partner Units. Both General and Limited Partners may hold
Limited Partner Units.
3.2 Initial Capital Contributions. The initial Partners shall make
capital contributions and receive Units as shown on Schedule A.
3.3 Admission of New Limited Partners. A person may be admitted to
the Partnership as a Limited Partner as follows:
(a) Transferee of Units. A Family Member who receives Units in
a Transfer permitted under Article 6 shall be admitted on signing a
Joinder Agreement. A transferee who is not a Family Member who receives
Units in a Transfer permitted under Article 6 shall be admitted only
after the Managing General Partner consents in writing (such consent
shall be completely within the Managing General Partner's discretion and
may be withheld for any reason) and the transferee signs a Joinder
Agreement.
(b) Additional Capital Contributions. If the Managing General
Partner determines that a Family Member should be admitted and issued
Limited Partner Units in exchange for a capital contribution, the
Managing General Partner shall notify all Partners of the capital
contribution proposed to be made by the Family Member. After the
procedures of paragraph 3.5 have been completed, the Family Member shall
be admitted on contributing only that portion, if any, of the capital
contribution not contributed by Partners in exchange for an appropriate
number of Units and signing a Joinder Agreement.
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Any other person may be admitted as a Limited Partner with the approval of all
Partners and completion of the procedures of paragraph 3.5, on contributing that
portion, if any, of the capital contribution not contributed by Partners in
exchange for an appropriate number of Units and signing a Joinder Agreement.
3.4 Admission of New General Partner. Any Family Member may be
admitted to the Partnership as a General Partner, with the approval of Partners
owning more than 50% of the Units owned by Partners in each class, on acquiring
one or more General Partner Units and signing a Joinder Agreement. Any other
person may be admitted as a General Partner with the approval of all Partners,
on acquiring one or more General Partner Units and signing a Joinder Agreement.
3.5 Additional Contributions. No Limited Partner shall be required to
make any capital contribution in addition to that Partner's initial capital
contribution. If the Managing General Partner determines that an additional
capital contribution is required, each Partner owning Limited Partner Units
shall have the right to contribute the same proportion of the additional capital
as the number of the Partner's Limited Partner Units bears to the total number
of Limited Partner Units then outstanding. The Partnership shall issue an
appropriate number of Limited Partner Units in exchange for such contribution.
3.6 General Partner Ownership. The General Partners shall in the
aggregate own 1% of the capital of the Partnership. If an additional capital
contribution is made and Limited Partner Units are issued, then simultaneously
with the contribution the General Partners shall in the aggregate contribute 1%
of the total additional capital contribution by Partners and shall receive an
appropriate number of General Partner Units in exchange for
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such contribution. If capital is distributed and Limited Partner Units are
redeemed, then simultaneously with the redemption the General Partners shall in
the aggregate receive 1% of the total capital distributed and an appropriate
number of their General Partner Units shall be redeemed in exchange for such
distribution. Each such General Partner's additional receipt or redemption of
General Partner Units shall be in the same proportion as the number of the
General Partner's General Partner Units bears to the total number of General
Partner Units owned by the Managing General Partner and all other General
Partners, unless they agree otherwise.
ARTICLE 4
DISTRIBUTIONS
4.1 Income Flow. The Partnership shall distribute the Income Flow of
the Partnership as the Managing General Partner decides.
4.2 Distributions for Taxes. If the Managing General Partner
determines that distributions under the preceding paragraph 4.2 are insufficient
to enable the Partners to pay federal and state income taxes attributable to
Partnership items, then the Partnership shall make additional distributions as
the Managing General Partner decides for that purpose.
4.3 Other Distributions. The Partnership may make other distributions
with the approval of the Partners owning all of the Units owned by Partners in
each class.
4.4 Division of Distributions. Of any distribution, 1% shall go
ratably to the General Partners, as such, and 99% shall go ratably to the
holders of Limited Partner Units.
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ARTICLE 5
ALLOCATIONS
5.1 Capital Accounts. The Partnership shall maintain a capital
account for each Partner according to the regulations under Code Section 704. A
Partner's capital account initially shall be the agreed value of initial capital
contributed by such Partner as shown on Schedule A. Each Partner's capital
account shall thereafter be credited with the amount of the Partner's additional
cash contributions (if any), the agreed value of the Partner's additional
contributions of property (if any), and the Partner's share of Tax Profits
excluding Built-in Gains and Built-in Losses and shall be debited with the
amount of cash withdrawals and distributions, the agreed value of property
distributions and the Partner's share of Tax Losses excluding Built-in Gains and
Built-in Losses. If Units are Transferred, the portion of the transferor's
capital account attributable to the transferred Units shall be added to the
transferee's capital account (and subtracted from the transferor's capital
account), together with any increase appropriate pursuant to an election under
Code Section 754. If there is a redemption or additional capital contribution,
the Managing General Partner may elect to revalue the Partnership's property
according to the principles of Treasury Regulations Section 1.704-1(b)(2)(iv)(f)
and maintain the capital accounts consistent with that revaluation according to
the principles of Treasury Regulations Section 1.704-1(b)(2)(iv)(g).
5.2 Allocations of Tax Profits and Tax Losses.
(a) Built-in Gains and Built-in Losses. Built-in Gains and
Built-in Losses shall be allocated to the contributing Partners
according to the principles of Code Section 704(c) and the regulations
thereunder. If a contributing Partner has made a gift of some part or
all of the Partner's Units, a ratable portion of the Built-in Gains or
Built-in Losses otherwise allocable to the contributing Partner
hereunder shall instead be allocated to the current
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holder of such Units. The portion of the Built-in Gains and Built-in
Losses to be allocated to each Unit received in exchange for a capital
contribution shall be in the same proportion as the value of that Unit
bears to the total value of all Units received in such exchange.
(b) Remaining Tax Profits and Tax Losses. Of Tax Profits and
Tax Losses remaining after the allocations, if any, required by
subparagraph (a) above, 1% shall be allocated ratably to the General
Partners, as such, and 99% shall be allocated ratably to the holders of
Limited Partner Units.
(c) Allocations Following a Revaluation. In the event that the
Managing General Partner elects to revalue the Partnership's property as
provided in paragraph 5.1, subsequent allocations of Tax Profits and Tax
Losses shall be made according to the principles of Treasury Regulations
Section 1.704-1(b)(4).
(d) Authority to Vary Allocations. The Managing General
Partner has the authority to vary these allocations to the extent
necessary to comply with federal income tax laws.
ARTICLE 6
TRANSFERS AND WITHDRAWALS
6.1 Transfers to Partners. Any Limited Partner Unit may be
Transferred to any Partner at any time. Any General Partner Unit may be
Transferred only to another General Partner or to any person who in conjunction
with such Transfer is admitted as a General Partner.
6.2 Transfers to Family Members. Any Limited Partner Unit may be
Transferred at any time to any Family Member who is not already a Partner. The
transferee Family Member shall in conjunction with such Transfer be admitted to
the Partnership as a Limited Partner on signing a Joinder Agreement.
6.3 Restricted Transfers to Others. Any Limited Partner Unit may be
Transferred to any transferee other than a Partner or a Family Member only after
the Managing General Partner consents in writing (such consent shall be
completely within
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the Managing General Partner's discretion and may be withheld for any reason);
and if such consent is withheld, only if the transferor first offers to the
Partnership and then to the other Partners the right to purchase all such Units
proposed to be Transferred (Offered Units) at the price and terms set forth
below:
(a) Third Party Sales. If the proposed Transfer is a third
party sale, the seller shall provide written notice (Original Notice) to
the Managing General Partner of the identity of the proposed transferee
and the date, price and terms of the proposed Transfer at least 120 days
before the date of the proposed sale. The Managing General Partner then
may cause the Partnership to purchase all, but not less than all, of the
Offered Units on the same terms and conditions, or, within 60 days of
receiving the Original Notice, provide all the Partners written notice
of their option to purchase among any one or more of the Partners all,
but not less than all, of the Offered Units and the terms and conditions
of sale. The Partnership or the Partners may exercise their options to
purchase Offered Units by giving written notice to the seller within 90
days after the Managing General Partner receives the Original Notice. If
the Partners offer to purchase more than the Offered Units, the Offered
Units shall be purchased by each such purchasing Partner in the same
proportion as that Partner's number of Units of the same class, if any,
otherwise of all classes, bears to the aggregate number of Units of the
same class or of all classes, as the case may be, owned by the Partners
exercising their options to purchase under this subparagraph. The
purchase price of the Offered Units shall be the price specified in the
Original Notice to be paid on the date or dates specified in the
Original Notice.
(b) Other Transfers. If the proposed Transfer is not a third
party sale, then the transferor (or the Managing General Partner on the
transferor's behalf) shall provide written notice (Original Notice) to
the Managing General Partner of the identity of the proposed transferee
and the date and terms of the proposed Transfer. Within 45 days after
receipt of the Original Notice, the Managing General Partner shall
determine the fair value of the Offered Units (as described in
subparagraph 6.3(c)) and shall give the Partners written notice thereof
(Value Notice). The Managing General Partner then may cause the
Partnership to elect to purchase all, but not less than all, of the
Offered Units on the terms and conditions set forth below, or, within 15
days after the date of the Value Notice, provide all the Partners (other
than the transferor) written notice of their option to purchase among
any one or more of those Partners all, but not less than all, of the
Offered Units at the Units' fair value. The Partnership or the Partners
may exercise their options to purchase the Offered Units by giving
written notice to the transferor within 45 days after the date of the
Value Notice. If the Partners offer to purchase more than the Offered
Units, the Offered Units shall be purchased by each such purchasing
Partner in the same proportion as that
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Partner's number of Units of the same class, if any, otherwise of all
classes, bears to the aggregate number of Units of the same class or of
all classes, as the case may be, owned by the Partners exercising their
options to purchase under this subparagraph, or as they otherwise may
agree. The purchase price shall be the fair value of the Units
determined as provided in subparagraph 6.3(c) to be paid within 120 days
of the Original Notice.
(c) Fair Value. The fair value of a Unit for purposes of this
Article 6 shall be the amount agreed upon between the holder and the
Partnership or, in the absence of agreement, the amount determined to be
the value of the distribution rights with respect to the Unit by an
independent appraiser selected by the Partnership and reasonably
acceptable to the holder.
(d) Installment Payments. Notwithstanding the above, that
portion of the purchase price under subparagraph 6.3(a) or 6.3(b)
payable by any purchaser may be paid by a note from any purchaser in an
amount equal to that portion payable in 15 or less (as determined by the
purchaser) equal annual installments commencing on the date of closing
evidenced by such note bearing interest at the minimum rate necessary to
avoid the imputation of income or gift for federal tax purposes. Each
such note shall contain full rights of prepayment without penalty or
premium, and such other terms and conditions as the maker and the payee
of the note shall determine.
(e) Completion of Proposed Transfer. If the options described
above are not exercised, the proposed Transfer of the Units may occur on
the date and on the same terms and conditions as set forth in the
Original Notice. Subsequent Transfers of those Units shall be subject to
the provisions of this Article 6.
(f) Rights of Transferees. A transferee of Units who is not a
Partner or a Family Member shall become a Partner only with the approval
of all Partners and on signing a Joinder Agreement. A Partner who ceases
to be a Family Member, but whose Units are not purchased under this
paragraph 6.3, shall be considered a transferee not admitted as a
Partner and may not exercise any of the rights of a Partner.
6.4 Securities Law Transfer Restrictions. All Partners acknowledge
that the Units have not been registered under the Securities Act of 1933, as
amended (the 1933 Act), in reliance on applicable exemptions. Therefore, the
Partners hereby agree that Units shall be nontransferable, except in compliance
with the 1933 Act and applicable state securities laws, and any attempted
Transfer not in compliance shall be void. As an
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additional condition precedent to the Transfer of any Units, the Managing
General Partner may require an opinion of counsel satisfactory to the Managing
General Partner that such Transfer will be made in compliance with the 1933 Act
and applicable state securities laws, and such transferor shall be responsible
for paying any attorneys' fees incurred in connection with the opinion.
6.5 Unauthorized Transfers. If a Partner attempts to make a Transfer
which is not authorized hereunder, the transferor shall be deemed to have
provided the Original Notice as described in subparagraph 6.3(b) on the date on
which the Managing General Partner receives written or actual notice of the
unauthorized Transfer.
6.6 Rights of Assignees. A transferee who is not admitted as a
Partner shall have only the rights of an assignee. An assignee of Units who is
not a Partner shall not be entitled to interfere in the management of the
Partnership's affairs, vote, receive any information of Partnership transactions
or inspect the Partnership books. The assignee shall merely be entitled to
receive, in accordance with the terms of the assignment, the distributions to
which the assignor otherwise would be entitled.
6.7 Withdrawal of General Partner. On the occurrence of an Event of
Withdrawal of a General Partner, any remaining General Partner may elect to
continue the Partnership. Each remaining General Partner will be deemed to have
elected to continue the Partnership following an Event of Withdrawal of a
General Partner unless all remaining General Partners give written notice to the
Partners within 30 days of such Event of Withdrawal that the remaining General
Partners do not elect to continue the Partnership. If the Partnership is
continued, the General Partner Units held by any withdrawn General Partner not
otherwise passing to a General Partner shall be purchased
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by any one or more of the continuing or new General Partners (but as to the
continuing General Partners, in the same proportion as that General Partner's
number of General Partner Units bears to the aggregate number of General Partner
Units owned by all continuing General Partners, unless they agree otherwise) at
fair value as described in subparagraph 6.3(c) payable within 90 days of the
Notice of Withdrawal. For purposes of this paragraph, except as specifically
provided in subparagraph 6.7(b), a withdrawing General Partner shall be deemed
to have given Notice of Withdrawal on the date on which the Managing General
Partner receives written or actual notice of an Event of Withdrawal described
below with respect to such Partner, or, if the Managing General Partner is the
withdrawing General Partner, then on the date on which any General Partner
receives written or actual notice of an Event of Withdrawal with respect to the
Managing General Partner. A withdrawn General Partner that owns Limited Partner
Units shall continue as a Limited Partner with the rights and obligations
provided Limited Partners under this Agreement. The following shall constitute
Events of Withdrawal:
(a) The death, bankruptcy, adjudicated incompetency,
dissolution or termination (in the case of an entity) of a General
Partner.
(b) The voluntary withdrawal of a General Partner or attempted
Transfer of a General Partner's interest in violation of paragraph 6.1.
Each General Partner agrees not to withdraw as General Partner without
giving 60 days' prior written notice of withdrawal to the Partners.
6.8 Withdrawal of Limited Partners. No Limited Partner may withdraw
prior to the liquidation of the Partnership except by following the procedures
of this paragraph 6.8.
(a) A Limited Partner has five opportunities to withdraw
completely from the Partnership prior to the termination of the
Partnership, in 2003, 2013, 2028, 2048 and 2073, each of which is
referred to in this paragraph 6.8 as a "withdrawal year." By March 1st
of each withdrawal year, the Managing General Partner shall provide
written notice to each Limited Partner of the purchase price for that
withdrawal year described in
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subparagraph 6.8(b). A Limited Partner thereafter may elect to withdraw
from the Partnership in that withdrawal year by giving written notice to
the Managing General Partner on or before May 1st of that withdrawal
year.
(b) The Partnership shall purchase all of the Units of a
Limited Partner who has withdrawn. The purchase price per Unit shall be
determined by multiplying the value of the assets of the Partnership on
January 1st of that withdrawal year, as determined by appraisal, by the
percentage listed below for that withdrawal year and then dividing that
product by the aggregate number of General and Limited Partner Units
then outstanding. The appraisals shall be prepared by a person or
business entity experienced in appraising partnerships selected by the
Managing General Partner for the purpose of valuing the assets of the
Partnership.
Withdrawal Year Percentage
--------------- ----------
2003 25%
2013 30%
2028 40%
2048 50%
2073 75%
(c) The aggregate purchase price shall be paid in cash or
property on the July 1st of the withdrawal year in which a Limited
Partner withdraws. Any part or all of the purchase price may be paid by
a note from the Partnership in an amount equal to that portion payable
in 5 or less (as determined by the Managing General Partner) equal
annual installments commencing on the July 1st of that withdrawal year
and evidenced by such note bearing interest at the minimum rate
necessary to avoid the imputation of income and gift for federal tax
purposes. Each such note shall contain full rights of prepayment without
penalty or premium, and such other terms and conditions as the maker and
the payee of the note shall determine.
ARTICLE 7
RIGHTS AND OBLIGATIONS OF PARTNERS
7.1 Liability of Partners. The General Partners, as such, shall have
unlimited liability for the satisfaction of all obligations of the Partnership
in excess of its assets, except as otherwise agreed with creditors. No Limited
Partner, as such, shall be liable for the satisfaction of Partnership
obligations.
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7.2 Management Responsibility. No Limited Partner, as such, shall
take part in the management of the activities of the Partnership. Except as
otherwise specifically provided, all management responsibility is vested in the
Managing General Partner.
7.3 Authority to Act. No Limited Partner, as such, shall have the
power to act on behalf of or bind the Partnership. Except as otherwise
specifically provided, all authority to act on behalf of the Partnership is
vested in the Managing General Partner.
7.4 Partners' Meeting. A meeting of the Partners may be held at any
time by written notice to the Partners by the Managing General Partner (or
within 10 days after receipt of a written request of Partners owning more than
30% of the Units owned by Partners in either class) at a reasonably convenient
date, time and place determined by the Managing General Partner. The purpose of
the meeting shall be for the Managing General Partner to inform the Partners of
the results of operations, the status of Partnership investments and the
Managing General Partner's plans for the future operation of the Partnership.
7.5 Fiduciaries as Partners. A Partner may own one or more Units in a
fiduciary capacity, such as a trustee under a trust instrument, as executor or
as a personal representative of an estate or as custodian. Such fiduciary shall
have no interest or obligation individually with respect to any such Units, but
shall be considered as acting solely in such fiduciary capacity. If a Partner
acting in a fiduciary capacity ceases to act as such, the successor fiduciary
shall be a Partner in the same fiduciary capacity with the same rights and
obligations as the predecessor fiduciary. A person may be a Partner in an
individual capacity and a Partner in one or more fiduciary capacities.
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7.6 Exculpation. No General Partner shall be liable to any of the
Partners for Good Faith Errors (meaning mistakes of judgment or losses due to
such mistakes or to the negligence or bad faith of any employee, broker, adviser
or other agent or representative of the Partnership, provided that such agent or
representative was selected with reasonable care). The General Partners may
consult with legal counsel selected by the Managing General Partner and shall
have no liability for the consequences of any action or omission resulting from
good faith reliance on the advice of such counsel. The exculpation provided in
this paragraph 7.6 also shall apply to the agents, employees and other legal
representatives of each General Partner.
7.7 Indemnification. The Partnership shall indemnify and hold
harmless each General Partner from and against any loss or expense incurred by
reason of the fact that the General Partner is or was a General Partner of the
Partnership, including without limitation any judgment, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action or proceeding, provided such loss or
expense resulted from Good Faith Errors or from action or inaction taken in good
faith for a purpose which the General Partner reasonably believed to be in, or
not opposed to, the best interests of the Partnership. The indemnification
provided in this paragraph 7.7 also shall apply to the agents, employees and
other legal representatives of each General Partner.
ARTICLE 8
PARTNERSHIP DISSOLUTION AND LIQUIDATION
8.1 Dissolution of Partnership. The Partnership shall be dissolved
upon the first to occur of the following:
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(a) December 31, 2096.
(b) The vote of Partners owning all of the Units owned by
Partners in each class.
(c) An Event of Withdrawal with respect to the last remaining
General Partner; provided, however, that the Partnership may be
continued under the terms and conditions of this Agreement if Partners
owning more than 50% of the Limited Partner Units owned by Partners
agree by written consent within 90 days of such terminating event to
elect a new General Partner. All Limited Partners agree to elect the
General Partner selected by such majority.
8.2 Disposition of Assets. On dissolution of the Partnership, the
Managing General Partner or, if there is no General Partner, a liquidator
selected by Partners owning more than 50% of the Limited Partner Units owned by
Partners, shall immediately commence to wind up the Partnership's affairs.
Partnership assets shall first be used to pay or provide for the payment of any
obligations, and the balance shall be distributed to the Partners as provided in
Article 4.
ARTICLE 9
DEFINITIONS
The terms set forth below shall have the following meanings in this
Agreement:
Built-in Gains means allocations pursuant to Code Section 704(c)
taken into account in determining Tax Profits or Tax Losses, to the extent such
allocations are attributable to the excess of the agreed value over the tax
basis, both as shown on Schedule A, of property contributed to the Partnership.
Built-In Losses means allocations pursuant to Code Section 704(c)
taken into account in determining Tax Profits or Tax Losses, to the extent such
allocations are attributable to the excess of tax basis over agreed value, both
as shown on Schedule A, of property contributed to the Partnership.
Code means the Internal Revenue Code of 1986, as from time to
time amended. A reference to a Section of the Code shall refer to the
corresponding provision of any successor statute.
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Family Member means (i) Xxxxx X. Xxxxxxxx and Xxxxxx Xxx
Xxxxxxxx; (ii) a descendant of Xxxxx X. Xxxxxxxx and Melody Xxx Xxxxxxxx; (iii)
any estate, trust, guardianship, custodianship or other fiduciary arrangement
for the primary benefit of any one or more individuals named or described in (i)
and (ii) above; (iv) a trust for the benefit of a spouse or surviving spouse of
a descendant of Xxxxx X. Xxxxxxxx and Melody Xxx Xxxxxxxx if such spouse or
surviving spouse is entitled only to income distributions during such spouse's
or surviving spouse's lifetime and, on termination of the trust, its principal
(other than any portion of the principal subject to the right of recovery
available to the spouse's estate under Code Section 2207A, to the extent such
right of recovery is actually exercised) is distributed to one or more
individuals or entities named or described in (i), (ii) and (iii) above; and (v)
any corporation, partnership, limited liability company or other business
organization controlled by and substantially all of the interests in which are
owned, directly or indirectly, by any one or more individuals or entities named
or described in (i), (ii), (iii) and (iv) above. The determination of whether an
individual or entity is a Family Member shall be made by the Managing General
Partner and, if made in good faith, shall bind all persons.
Income Flow for a period means the amount of all cash receipts of
the Partnership during the period (other than capital contributions, borrowings,
dispositions of investments, and similar items ordinarily credited to principal
under California fiduciary accounting principles), plus the amount of all
reductions during the period in reserves established by the Managing General
Partner from cash receipts that otherwise would have been Income Flow during
prior periods, minus the amount of (i) operating and other recurring expenses
and all expenses ordinarily charged to income under California fiduciary
accounting principles, (ii) nonrecurring expenses ordinarily charged to
principal under California fiduciary accounting principles to the extent the
other cash of the Partnership is insufficient to pay such expenses and (iii) the
amount of all increases during the period in reserves established by the
Managing General Partner from cash receipts that otherwise would have been
included in Income Flow. In determining Income Flow, the Managing General
Partner shall establish reasonable reserves for necessary purposes of the
Partnership and shall adjust the levels of such reserves each time Income Flow
is determined.
Joinder Agreement means an agreement substantially in the form of
the attached Schedule B.
Notice of Withdrawal means notice of an Event of Withdrawal of a
General Partner delivered to or deemed received by the Partnership.
Tax Profits and Tax Losses for any taxable year means the net
income or loss of the Partnership as reported for federal income tax purposes as
to such taxable year, calculated by (i) including all amounts allocated to all
Unit holders under Sections 702(a)(1) through 702(a)(8) of the Code, (ii)
increased by tax-exempt income and (iii) decreased by expenditures described in
Code Section 705(a)(2)(B).
EXHIBIT 7.t - 18
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Transfer means (i) any disposition, directly or indirectly, by
operation of law or otherwise, voluntarily or involuntarily, by intestacy, will,
trust or estate distribution, or inter vivos action, including any sale, gift,
pledge, encumbrance or other creation of a security interest, attachment, the
creation of any interest in the Partnership or distribution from the Partnership
for the benefit of creditors, and (ii) any event that results in a holder of one
or more Units ceasing to be a Family Member, including a change in family
relationship due to divorce, adoption, a change in beneficiaries (in the case of
a fiduciary arrangement), and a change in ownership or control (in the case of a
business organization). Transfer shall not include (i) the creation or
acquisition of a community or marital property interest in a Unit by a spouse of
a Unit holder as long as the spouse is not a registered owner and exercises no
management, dominion, or control over such Unit, (ii) a transfer to (but not
from) the executor, administrator, or other legal representative of the estate
of a deceased Unit holder, or (iii) a transfer to the guardian or conservator
for a legally adjudicated incompetent Unit holder.
Unit means an interest in the Partnership.
ARTICLE 10
MISCELLANEOUS
10.1 Waiver of Partition. Each Partner hereby waives any right to seek
a court decree of dissolution or partition or to seek the appointment by a court
of a liquidator for the Partnership.
10.2 Right to Distribution In Kind. No Partner shall have any right to
demand or receive any particular property on liquidation of the Partnership or
to demand the return of the Partner's capital contribution to the Partnership.
The property to be received by any Unit holder on liquidation of the Partnership
shall be determined by the Managing General Partner, except that no holder shall
be required to accept a distribution in kind in excess of the holder's
fractional interest in the Partnership (Units owned by such holder divided by
total Units outstanding) without the holder's consent.
EXHIBIT 7.t - 19
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10.3 Integrated Agreement. This Agreement constitutes the entire
agreement among the parties. It supersedes any prior agreements, negotiations or
understandings among them, and it may be amended only as provided in Article 11.
10.4 Binding Agreement. This Agreement shall bind the executors,
administrators, estates, heirs and legal successors of the parties hereto.
10.5 Governing Law. Except as otherwise specifically provided,
California law shall govern this Agreement and all questions arising hereunder.
10.6 Notices. All notices, offers and acceptances and other
communications hereunder required to be in writing shall be delivered in person,
by telecopy with confirmation or by overnight delivery service with receipt, or
shall be deposited in the United States Mail, postage prepaid, by certified or
registered mail, return receipt requested, to the address shown on Schedule A. A
communication shall be deemed received: (i) if by personal delivery, on the date
delivered, (ii) if by telecopy, on the date confirmed, (iii) if by overnight
delivery service, on the date delivered and (iv) if by mail, five days after
mailing.
10.7 Power of Attorney. Each of the Partners does hereby irrevocably
appoint the Managing General Partner or the Managing General Partner's legal
representative with full power of substitution, as the Partner's attorney with
full power and authority for such Partner to execute, swear to, acknowledge,
deliver and file or record in the appropriate public offices (i) all
certificates and other instruments (including counterparts of this Agreement)
and all amendments thereto which the Managing General Partner deems appropriate
to qualify, or continue the qualification of, the Partnership as a limited
partnership in any jurisdiction in which the Partnership has operations, (ii)
all instruments
EXHIBIT 7.t - 20
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that the Managing General Partner deems appropriate to reflect any modification
of this Agreement, (iii) all conveyances and other instruments that the Managing
General Partner deems appropriate to reflect the dissolution and liquidation of
the Partnership, and (iv) all forms of consent that may be appropriate to admit
a new Partner and all other instruments that the Managing General Partner deems
appropriate relating to the admission of a new Partner. The foregoing power of
attorney is irrevocable and a power coupled with an interest and shall survive
the death, dissolution or legal termination of a Partner.
10.8 Counterparts. This Agreement may be executed in multiple
counterparts.
ARTICLE 11
AMENDMENTS
This Agreement shall not be amended to change any Unit holder's share of
liabilities or distributions without the consent of such holder. Subject to the
preceding sentence, this Agreement may be amended with the consent of Partners
owning all of the Units owned by Partners in each class. The Managing General
Partner shall amend Schedule A of this Agreement to reflect admissions and
withdrawals of Partners, Transfers of Units, capital contributions (including
tax basis and agreed value) and redemptions of Units.
EXHIBIT 7.t - 21
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This Agreement is executed as of the date first written above by the
Partners.
GENERAL PARTNER LIMITED PARTNER
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxxxxx
--------------------------------- ---------------------------------
Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxx
/s/ Xxxxxx Xxx Xxxxxxxx /s/ Melody Xxx Xxxxxxxx
--------------------------------- ---------------------------------
Melody Xxx Xxxxxxxx Melody Xxx Xxxxxxxx
EXHIBIT 7.t - 22
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SCHEDULE A
INITIAL CAPITALIZATION
Initial Capital Contribution Units Issued
---------------------------- ------------
Partner Tax Basis Agreed Value General Partner Limited Partner
--------- ------------ --------------- ---------------
Xxxxx X. Xxxxxxxx 500 49,500
0000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
SSN:
Melody Xxx Xxxxxxxx 500 49,500
0000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
SSN:
------- ------- ------- --------
Totals 1,000 99,000
EXHIBIT 7.t - 23
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SCHEDULE B
JOINDER AGREEMENT
This Agreement is made and entered into this _____ day of __________, by
and between Xxxxx X. Xxxxxxxx (the Managing General Partner) acting on behalf of
Xxx and Xxx Xxxxxxxx Family Limited Partnership (the Partnership), and the
person whose signature appears below (New Partner).
1. Admission. The New Partner, who is a Family Member as
defined in the agreement evidencing the Partnership (Partnership Agreement) or
whose admission to the Partnership is approved by the Managing General Partner
pursuant to the Partnership Agreement, is hereby admitted to the Partnership as
a limited/general partner and shall have all the rights and be subject to all
the obligations of limited/general partner under the Partnership Agreement.
2. Agreement to Be Bound By Partnership Agreement. The New
Partner acknowledges receipt of a copy of the Partnership Agreement as currently
amended. The New Partner agrees to be bound by all the terms and conditions of
the Partnership Agreement.
3. Capital Contribution. The New Partner shall make a
contribution to capital (if any) as shown on an amendment to Schedule A to the
Partnership Agreement.
4. Counterparts. This Agreement may be executed in multiple
counterparts.
This Agreement is executed as of the date first written above.
Managing General Partner
--------------------------------------
New Partner
--------------------------------------
EXHIBIT 7.t - 24
