Exhibit I
LIMITED PARTNERSHIP AGREEMENT
OF
XXXXXX XXXXXX, LTD.
LIMITED PARTNERSHIP AGREEMENT
-----------------------------
XXXXXX POWERS, LTD
------------------
This Limited Partnership Agreement is executed this 15th day of October,
1993, by and between Xxxxxx Cable Communications, Inc. a Wyoming corporation
(the "General Partner") as genera] partner and the persons executing this
Agreement as Limited Partners. The General Partner and Limited Partners are
collectively referred to as the "Partners."
ARTICLE I
FORMATION OF LIMITED PARTNERSHIP;
NAME; PRINCIPAL PLACE OF BUSINESS
Section 1.1 Formation. The parties hereby form a limited partnership
pursuant to the provisions of the Colorado Uniform Limited Partnership Act of
1981 (the "Act"). The parties shall execute and cause to be recorded a
Certificate of Limited Partnership and any additional documents as may be
necessary or appropriate to form a limited partnership pursuant to the laws of
the State of Colorado. The Partnership need not deliver a copy of the
Certificate of Limited Partnership to any Partner.
Section 1.2 Name. The Partnership shall operate under the name of Xxxxxx
Powers, Ltd.
Section 1.3 Principal Place of Business. The principal place of business of
the Partnership shall be at 000 Xxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx, 00000.
The business of the Partnership may also be conducted at such other or
additional place or places as may be designated by the General Partner.
ARTICLE II
PURPOSE OF THE PARTNERSHIP
The Partnership is one of two Colorado limited partnerships which are being
formed pursuant to a certain agreement dated October 15, 1993, between Metro
Capital Corporation, a Wyoming corporation, Xxxxx Xxxx, Xxxxxxx Xxxxxxx and
Xxxxxx Golf, L.L.C., a Colorado limited liability company (the "Agreement"), for
purposes of acquiring certain real property located in the city of Colorado
Springs, Colorado, consisting of approximately 90 acres located on or near
Powers Boulevard, as specifically described in Exhibit A attached hereto (the
"Powers Boulevard Property"). This Partnership is being formed to acquire and
hold title to approximately 55 acres of the Powers Boulevard Property (the
"Metro Property"). The Partnership will hold the Metro Property for investment
and development, and may sell, hypothecate, or otherwise deal with the Metro
Property, and may take such other actions as may be necessary or appropriate to
accomplish such purposes.
-1-
ARTICLE III
TERMS OF THE PARTNERSHIP
The Partnership shall commence as of the date the Certificate of Limited
Partnership is filed in the office of the Colorado Secretary of State and shall
continue until such date as all of the Metro Property is sold, unless dissolved
earlier by operation of law or as provided in this Agreement. ln any event, the
Partnership shall terminate no later than December 31, 2020.
ARTICLE IV
ACCOUNTING FOR THE PARTNERSHIP
Section 4.1 Financial Statements. The General Partner shall cause financial
statements of the operations of the Partnership to be prepared and distributed
on a periodic basis as is reasonable in accordance with the character of the
operations of the Partnership to each Limited Partner. Such financial statements
need not be audited, however, upon the request of any Partner such financial
statements shall be audited.
Section 4.2 Access to Accounting Records. Any Limited Partner shall have
reasonable access to the accounting records of the Partnership during regular
business hours of the Partnership.
Section 4.3 Income Tax Information. The General Partner shall provide to
each Limited Partner information on the Partnership's taxable income or loss and
each item of income, gain, loss, deduction or credit that is relevant to
reporting Partnership income. The information shall also show each Partner's
distributive share of each item of income, gain, loss, deduction or credit. This
information shall be furnished to the Limited Partners within 75 days of the
close of the Partnership's taxable year.
ARTICLE V
CAPITAL CONTRIBUTIONS
Section 5.1 Initial Capital Contributions. The initial capital
contributions to the Partnership shall be made by the Partners in the amounts
shown on Exhibit "B" attached hereto and made a part hereof. The Partners shall
not be required to make any additional capital contributions to the Partnership
in excess of the amounts shown on Exhibit "B".
Section 5.2 Additional Capita] Contributions. Any additional capital
required may be contributed by the parties pro rata in accordance with their
respective interests in the Partnership. If any party determines not to
contribute such additional capital, the other party may at its option:
(i) cause the sale of the partnership assets and the winding up and
dissolution of the partnership;
-2-
(ii) purchase the partnership interest of the non-contributing party
which interest shall be valued as hereinafter provided; or
(iii) contribute the additional capital in excess of its proportionate
share on the terms hereinafter provided.
The non-contributing party's partnership interest shall be valued for
purposes of subparagraph (ii) above by each party retaining at its own expense
an appraiser qualified to value such interest. Each of the two appraisers so
retained shall submit their appraisals and the value of the partnership interest
shall be the average of the two appraisals, i.e., one-half the sum of the two
appraisals.
A party who contributes additional capital pursuant to subparagraph (iii)
above shall receive repayment of such capital from the first funds available
therefor, prior to payment of any funds (whether as distributions, fees or
otherwise) to the other party, together with interest thereon at five (5) points
above prime rate (as established by First interstate Bank of Denver, N.A.)
Section 5.3 Loans. If the Partnership requires additional capital, the
General Partner is authorized to cause the Partnership to borrow money upon such
terms as the General Partner, in its sole discretion, may determine, and to
mortgage, pledge or hypothecate the assets of the Partnership in connection with
such borrowings.
Section 5.4 No Return of Capital Contribution. Except as otherwise
expressly provided herein, no Partner shall be entitled to a return of its
capital contribution.
ARTICLE VI
PROFITS AND LOSSES
Section 6.1 Determination. All profits or net losses of the Partnership
shall be determined in accordance with generally accepted accounting principles
consistently applied.
Section 6.2 Special Allocation of Profits and Losses. Until such time as
the general partner has received distributions of profits equal to $600,000
(being the amount advanced by Xxxxxx to purchase and develop the Powers
Boulevard Property), plus interest thereon at the rate of 85% per annum,
compounded annually from the date of purchase of the Powers Property through
payment in full of such amount but in no event to exceed $100,000), the General
Partner shall receive 100% of the profits and losses of the Partnership.
Section 6.3 Profits. Once the General Partner has received the return of
the amount specified in Section 6.2, the annual net profits of the Partnership,
if any, shall be allocated to the Partners as follows:
(a) Eighty one percent to the General Partner; and
-3-
(b) Nineteen percent to the Limited Partners in proportion to their
capital accounts.
Section 6.4 Losses. Once the Genera] Partner has received the return of the
amount specified in Section 6.2, the annual net losses of the Partnership, if
any, shall be allocated in the proportions set forth in Section 6.3.
ARTICLE VII
CAPITAL ACCOUNTS
An individual capital account shall be maintained for each Partner. The
capital interest of a Partner shall consist of the original contribution of
capital, if any, increased by (1) any additional contributions to capital, and
(2) such Partner's share of Partnership profits, and decreased by (l)
distributions to such Partner in reduction of Partnership capital and (2) such
Partners's share of Partnership losses.
ARTICLE VII
CASH FLOW
Section 8.1 Definition of Cash F]ow. Cash flow shall be the net cash
available to the Partnership, determined on a monthly basis after the payment of
(or reserve for the payment of) all accrued expenses of the Partnership.
Section 8.2 Distributions of Cash Flow. At least once each calendar quarter
(and subject to conditions upon distributions which may be imposed by lenders)
the cash flow of the Partnership, if any, shall be distributed to the Partners
in the proportions set forth in Sections 6.2 and/or 6.3, as applicable at the
time.
ARTICLE IX
ADMINISTRATIVE PROVISIONS
Section 9.1 Management and Tax Matters Partner. All of the business of the
Partnership, including, but not limited to decisions on all tax elections, shall
be under the exclusive management of the General Partner. The Limited Partners
shall not participate in the management of the business of the partnership. The
General Partner, or any other General Partner subsequently selected, shall be
the Tax Matters Partner for purposes of Section 6~31(a)(7) of the Code, and
shall have all authority granted by the Code to the Tax Matters Partner,
including the authority, without the consent of any other Partner to do any and
all of the following:
(a) Enter into a settlement agreement with the Internal Revenue
Service which purports to bind Partners other than the Tax Matters Partner;
(b) File a petition as contemplated by Section 6226(a) or 6228 of the
Code;
-4-
(c) Intervene in any action as contemplated in Section 6226(b)(5) of
the Code;
(d) File any request contemplated in Section 6227(b) of the Code; and
(e) Enter into an agreement extending the period of limitations as
contemplated in Section 6229(1)(b) of the Code.
Section 9.2 Time Devoted By General Partner. The parties understand that
the General Partner and its management have other business activities which over
the year take the major part of the respective total time devoted to business
matters. Accordingly, the General Partner is required to devote to the business
of the Partnership only the time and attention as it in its sole discretion
shall deem appropriate.
Section 9.3 Limitation on Liability of Genera] Partner Indemnification.
(a) The General Partner shall have no liability, responsibility or
accountability in damages or otherwise to any other partner or the
Partnership for, and the Partnership agrees to indemnify, pay, protect and
hold harmless the General Partner (on the demand of and to the satisfaction
of the General Partner) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
proceedings, costs, expenses and disbursements of any kind or nature
whatsoever (including without limitation all costs and expenses of defense,
appeal and settlement of any and all suits, actions, or proceedings
instituted against such General Partner or the Partnership and all costs of
investigation in connection therewith) which may be imposed on, incurred by
or asserted against such General Partner or the Partnership in any way
relating to or arising out of, or alleged to relate to or arise out of, any
action or inaction on the part of the Partnership or on the part of such
General Partner; provided the General Partner shall be liable, responsible
and accountable, and the Partnership shall not be liable to the General
Partner, for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, proceedings, costs, expenses or
disbursements resulting from the General Partner's own negligence,
misconduct or other breach of fiduciary duty to the Partnership or any
Partner. If any action, suit or proceeding shall be pending or threatened
against the Partnership or the General Partner relating to or arising, or
alleged to relate to arise, out of any such action or non-action, the
General Partner shall have the right to employ, at the expense of the
Partnership, separate counsel of the General Partner's choice in such
action, to represent the General Partner in such suit or proceeding. The
satisfaction of the obligations of the Partnership under this Section shall
be from and limited to the assets of the Partnership and no Partner shall
have any personal liability on account thereof. The General Partner shall
have the right to xxxx the Partnership for, or otherwise request the
Partnership to pay, at any time and from time to time after the General
Partner has become obligated to make payment therefor, any and all amounts
for which the General Partner believes in good faith that such General
Partner is entitled to indemnification under this Section. The Partnership
shall pay any and all such bills and honor any and all such requests for
payment within 60 days after such xxxx or request is received by the
General Partner. If a final determination is made that the Partnership is
not so obligated in respect of any amount paid by it to the General
Partner, the General Partner shall refund such amount within 180 days of
such final determination.
-5-
(b) The Partnership shall indemnify, to the extent of the Partnership
assets, each Limited Partner against any claims of liability asserted
against a Limited Partner solely because it is a Limited Partner in the
Partnership.
Section 9.4 Limited Liability of Limited Partners. No Limited Partner shall
be liable for the debts, liabilities, contracts or any other obligations of the
Partnership. Except as otherwise provided by applicable state law, a Limited
Partner shall be liable only to make its capital contribution and shall not be
required to lend any funds to the Partnership or, after the original capital
contribution shall have been paid, to make any further contributions in excess
of such original capital contribution to the Partnership. No General Partner
shall have any personal liability for the repayment of the capital contribution
of any Limited Partner. Except as otherwise provided in this Agreement, a
Limited Partner shall not take part in, or interfere in any manner with, the
conduct or control of the business of the Partnership and shall have no right or
authority to act for or bind the Partnership.
Section 9.5 Power of Attorney. Each Partner hereby irrevocably designates
and appoints the General Partner and any successor, with full power of
substitution, the partner's true and lawful attorney-in-fact and agent with full
power and authority in its name, place and stead to make, execute and
acknowledge, deliver, file and record in appropriate public offices:
(a) Any Amended Certificate of Limited Partnership pursuant to the
Act, any instrument to amend such Certificate of Limited Partnership
pursuant to the Act or any successor thereto, and any other document or
instrument deemed by any of them to be necessary or appropriate, or which
is required to establish or maintain the Partnership as a limited
partnership under the laws of the State of Colorado;
(b) All other instruments and other documents as may be required by
law or appropriate to the conduct of the Partnership's business in the
exercise by the General Partner of its authority under this Agreement;
(c) Any documents or instruments which a General Partner may deem
appropriate to: (i) evidence the dissolution or accomplish the termination
of the Partnership in accordance with this Agreement, including without
limitation, deeds or instruments of conveyance; and (ii) any instrument to
revoke the Certificate of Limited Partnership;
(d) Any amendment to this Agreement of Limited Partnership.
It is expressly agreed by each of the Partners that the foregoing power of
attorney is and shall be deemed to be coupled with an interest and shall survive
the death of a Partner or the assignment of his Partnership interest. Each
Limited Partner shall execute such instruments as the General Partner may deem
appropriate to give evidence of the granting of the foregoing power of attorney,
whether by executing a separate counterpart thereof or otherwise.
-6-
ARTICLE X
DEATH OR WITHDRAWAL OF A PARTNER
Section 10.1 Withdrawal of a General Partner. If the General Partner
withdraws, becomes bankrupt or is dissolved, the Partnership shall dissolve
unless there is another General Partner of this Partnership at that time and the
business of the Partnership is continued by that remaining General Partner. If
no General Partner remains, the Partnership shall thereafter conduct only
activities necessary to wind up its affairs unless, within ninety (90) days
after one of the listed events, all the remaining Partners elect in writing to
continue the Partnership. If an election to continue the Partnership is made by
all the remaining Partners, then:
(a) If there is no remaining General Partner, a successor General
Partner shall be selected.
(b) The Partnership shall continue until the end of the term for which
it is formed, or until the subsequent death, withdrawal, incapacity or
bankruptcy of the General Partner, in which event all remaining Partners
shall again elect whether they wish to continue the Partnership operations.
(c) The incapacitated, withdrawn, or bankrupt General Partner or the
successor in interest of the deceased or dissolved General Partner shall
become a Limited Partner with the same share of profits or losses of the
Partnership as before the event and shall have all the rights of a Limited
Partner.
(d) All necessary steps shall be taken to amend the Certificate of
Limited Partnership.
For purposes of this Section, an individual General Partner (if there be
one) shall be deemed to be incapacitated if he or she is disabled and unable to
take an active part in the management of the Partnership business for a
continuous period of at least six (6) months.
Section 10.2 Death of a Limited Partner. The death of a Limited Partner
shall not dissolve the Partnership. If a Limited Partner dies, the personal
representative or other successor in interest of the deceased Limited Partner
shall have all the rights and privileges of a Limited Partner.
ARTICLE XI
TRANSFER OF A PARTNERSHIP INTEREST
Section 11.1 Transfer of Limited Partner's Interest. Except as provided
elsewhere in this Agreement, no assignee of the whole or any portion of a
Limited Partner's interest in the Partnership who is not already a Partner in
the Partnership shall have the right to become a substituted Limited Partner in
place of the assignor unless:
-7-
(a) The assignor shall designate such intention in the instrument of
assignment;
(b) The written consent of the General Partner and each Limited
Partner, in each of its sole discretion, to such substitution shall be
obtained, which consent may be withheld for any reason;
(c) The instrument of assignment shall be in a form and substance
satisfactory to the General Partner;
(d) The assignor and assignee named therein shall execute and
acknowledge such other instrument or instruments as the General Partner may
deem necessary or desirable to effectuate such admission, including but not
limited to an appropriate power of attorney;
(e) The assignee shall accept, adopt and approve in writing all of the
terms and provisions of this Agreement as the same may have been amended;
(f) Such assignee shall pay or, at the election of the General
Partner, obligate himself to pay all reasonable expenses connected with
such admission; and
(g) By such transfer, the assignor does not violate the registration
provisions of the Securities Act of 1933, as amended, or the qualification
provisions of the Colorado Securities Act or other applicable state
securities laws.
Section 11.2 Further Restrictions on Transfers. No Partner shall make any
transfer or assignment of all or any part of its interest in this Partnership if
said transfer or assignment would, when considered with all other transfers
during the same applicable twelve-month period, cause a termination of this
Partnership for Federal or applicable state income tax purposes.
Section 11.3 Additional Restrictions. THE LIMITED PARTNERSHIP INTEREST
REPRESENTED BY THIS AGREEMENT HAS NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED
UNDER ANY STATE SECURITIES LAW. SUCH INTEREST MAY NOT BE OFFERED FOR SALE, SOLD,
DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED TO ANY PERSON IN THE
ABSENCE OF AN OPINION OF COUNSEL SATISFACTORY TO THE GENERAL PARTNER THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
Section 11.4 Notice of Transfer to Internal Revenue Service. Whenever a
transfer of a Partner's interest has been effected in compliance with this
Article XI, the General Partner shall promptly report such transfer to the
internal Revenue Service if at the time of the transfer the Partnership
possessed " unrealized receivables" or "substantially appreciated inventory
items, " as those terms are used in the Code. Such notification shall include
the names of the transferror and the transferee, together with such additional
information as may be required by law. Each Partner agrees to promptly advise
the Partnership of any proposed transfers of interests in the Partnership, and
to provide such assistance to the General Partner as may be necessary to enable
it to give the notice required hereunder.
-8-
ARTICLE XII
DISSOLUTION AND TERMINATION OF THE PARTNERSHIP
Section 12.1 Right to Dissolve the Partnership. Except as provided in
Section 10. l, no Partner shall have the right to cause dissolution of the
Partnership before the expiration of the term for which it is formed.
Section 12.2 Winding, Up the Partnership. In the event of a sale or
disposition of substantially all of the assets of the Partnership, or a
withdrawal of the sole remaining General Partner and the remaining partners do
not elect to continue the Partnership pursuant to Article X, the Partnership
shall immediately commence to wind up its affairs. The Partners shall continue
to share profits or losses during liquidation in the same proportion as before
dissolution. Nothing herein shall prohibit any partner from exercising the right
of redemption in any foreclosure action on partnership assets, provided that
such partner complies with the provisions of this Article XII. The proceeds from
liquidation of the Partnership assets shall be applied as follows:
(a) Payment to creditors of the Partnership, including Partners, in
the order of priority provided by law.
(b) Pro rata payment to the Partners of the credit balances in their
respective capital accounts.
(c) The balance, if any, shall be distributed to all Partners in the
proportions set forth in Sections 6.2 and/or 6.3, as applicable at the
time.
(d) Such distributions may be made in kind and, if so, shall be valued
at the fair market value thereof.
Section 12.3 Gains or Losses in Process of Liquidation. Any gain or loss on
disposition of Partnership properties in the process of liquidation shall be
credited or charged to the Partners in the proportions set forth in Sections 6.2
and/or 6.3. as applicable at the time. Any property distributed in kind in the
liquidation shall be valued and treated as though the property were sold and the
cash proceeds were distributed. The difference between the value of property
distributed in kind and its book value shall be treated as a gain or loss on
sale of the property and shall be credited or charged to the Partners in the
proportions of their interest in profits as specified in Section 6.2 and/or 6.3,
as applicable at the time.
Section 12.4 Waiver of Right to Decree of Dissolution. The parties hereby
agree that irreparable damage would be done to the goodwill and reputation of
the Partnership if any Partner should bring an action in court to dissolve the
Partnership. Care has been taken in this Agreement to provide a fair and just
payment in liquidation of the interest of all Partners.
-9-
Accordingly, each party hereby waives and renounces his right to such a court
decree of dissolution or to seek the appointment by the court of a liquidator
for the Partnership.
ARTICLE III
AMENDMENTS
This Partnership Agreement may be amended by the General Partner in order
to clarify any ambiguity or in any other manner which will not effect a material
change in the rights of any Partner. This Partnership Agreement may be amended
in any other particular by a written agreement executed by the General Partner
and a majority in interest of the Limited Partners.
ARTICLE XIV
DISPUTES
Any disputes hereunder shall be submitted by the parties to binding
arbitration conducted pursuant to the rules of the American Arbitration
Association.
IN WITNESS WHEREOF the parties hereto have executed this Agreement of
Limited Partnership the day and year first above written.
GENERAL PARTNER:
XXXXXX CABLE COMMUNICATIONS, INC.
By: /S/ XXXXXX X. XXXXXXXXXX
-------------------------------------------
..........................., President
LIMITED PARTNERS:
POWERS GOLF
By: /S/ XXXX XXXXXXX
-------------------------------------------
Name: XXXX XXXXXXX
Title: Co-Manager
By: /S/ XXXXX X. XXXX
-------------------------------------------
Name: Xxxxx X. Xxxx
Title: Co-Manager
-10-
EXHIBIT A
MAP OF POWERS BOULEVARD PROPERTY
-11-
EXHIBIT B
LIMITED PARTNERS
Name Address Contribution
---- ------- ------------
Undivided interest in the
Purchase Agreement for the
Powers Boulevard Property.
GENERAL PARTNERS
----------------
Name Address Contribution
---- ------- ------------
Xxxxxx Cable 000 Xxxxxxx Xxxx Xxxxx Cash of $250,000.
Communications, Inc. Xxxxxxxx, XX 00000
-12-
