Exhibit 10.4
Edge Group II Limited Partnership
AGREEMENT OF LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP, entered into and effective as
of ________, 1991, by and among XXXX XXXXXXXXX, and NAPAMCO. LTD., with
offices at one Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxxx 00000, as
general partners (hereinafter referred to as the "General Partner") and
each of the other parties executing this Agreement or counterpart hereof as
limited partners (the "Limited Partners") (the General Partner and the
Limited Partners shall hereinafter be referred to collectively as the
"Partners").
W I T N E S S E T H
ARTICLE 1
(S) 1.1 Formation of Partnership
The parties hereto hereby form, pursuant to the Uniform Limited
Partnership Act of the State of Connecticut, a Limited Partnership, which
organization is referred to as the "Partnership."
(S) 1.2 Organization Certificates
The parties hereto shall immediately execute all such
certificates and other documents conforming hereto and do all such filing,
recording, publishing and other acts as may be appropriate to comply with
all requirements for the laws of the State of Connecticut. The parties
hereto also agree to execute all such certificates and other documents
conforming hereto and to do all such filing, recording, publishing and
other acts as may be appropriate to comply with the requirement of law for
the jurisdictions where the Partnership shall desire to conduct business.
Prior to conducting any business in any jurisdiction, the Partnership shall
comply with all requirements for the qualification of the Partnership to
conduct business as a limited partnership in such jurisdiction.
(S) 1.3 Partnership Name
The business of the Partnership shall be conducted under the name
"Edge Group II Limited Partnership" in those jurisdictions where such name
is permitted and under such variations of this name as the General Partner
deems appropriate to comply with the laws of the other jurisdictions in
which the Partnership does business. This name and all variations thereof
are acknowledged to be the sole property of the General Partner who hereby
consents to the use thereof by the Partnership. The General Partner, his
successors and assigns, shall be free to use the said name and all
variations thereof in connection with other ventures.
(S) 1.4 Rejection
The General Partner, in his sole absolute discretion, may, at any
time prior to the date the Partnership becomes effective, reject any
subscription for any reason.
ARTICLE 2
(S) 2.1 Definitions
Whenever in this Agreement, the following terms shall have the
meanings respectively assigned to them in this (S) 2.1:
2.1.a "Agreement" means this Agreement of Limited
Partnership as it may be further amended from time to time.
2.1.b "Capital Contribution" shall mean the amount of
money which a Partner has contributed to the Partnership towards
meeting such Partner's Capital Commitment.
2.1.c "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time, and regulations thereunder at the
time of reference thereto.
2.1.d "Consent of the Partners" means the written
consent or approval of Partners (General and Limited) whose aggregate
Capital Contributions represent at least sixty percent (60%) of the
aggregate Capital Contributions, which consent or approval shall be
obtained prior to the taking of the action for which it is required
hereunder.
2.1.e "Events of Bankruptcy" means, as to a General
Partner:
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2.1.e.i its or his admission, in writing, of
its or his inability to pay its or his debts generally as
they become due;
2.1.e.ii its or his filing a petition in
bankruptcy or for reorganization or for adoption of an
arrangement under the Bankruptcy Act;
2.1.e.iii its or his making an assignment for the
benefit of creditors;
2.1.e.iv its or his consenting to the
appointment of a receiver for all or a substantial part of
its or his property;
2.1.e.v its or his being adjudicated as
bankrupt;
0.0.x.xx the entry of a court order appointing a
receiver or trustee(s) for all or a substantial part of its
or his property without its or his consent, which order
shall not be vacated, set aside or stayed within sixty (60)
days from the date of entry; and/or
2.1.e.vii the assumption of custody or
sequestration by a court of competent jurisdiction of all or
substantially all of its or his property, which custody or
sequestration shall not be suspended or terminated within
sixty (60) days from its inception.
2.1.f "Limited Partner or Limited Partners" means any or all
of those persons designated as Limited Partners in the Partnership
Certificate or any person who becomes a substitute Limited Partner as
provided herein, in each person's capacity as a Limited Partner of the
Partnership.
2.1.g "Partner" means a General Partner or Limited Partner.
2.1.h "Partnership" means the Limited Partnership governed by
this Agreement as said Limited Partnership may from time to time be
constituted as amended.
2.1.i "Partnership Properties" shall mean all interests,
properties and rights of any type owned by the Partnership.
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2.1.j "Joint Venture Agreement" shall mean the Joint
Venture Agreement to be entered into between this Partnership and Edge
Petroleum Corporation at or before the Funding Date to form the Edge
Group Joint Venture II.
2.1.k "Funding Date" shall mean the date upon which this
Partnership makes its initial Capital Contribution to the Edge Group
Joint Venture II and EPC make its Capital Contribution to the Edge
Group Joint Venture II.
2.1.l "EPC" shall mean Edge Petroleum Corporation, a to
be formed Texas Corporation with which this Partnership will enter
into a Joint Venture for the generation, development and marketing of
oil and gas Prospects, substantially as set forth in the Private
Placement Memorandum dated December 13, 1990 relating to the offer and
sale of Partnership interests in this Partnership.
2.1.m "Capital Commitment" of a Partner shall mean the
amount of capital such Partner has committed to contribute to the
Partnership, including the amount paid on Closing and the amount due
on or before July 1, 1992. Each Partner's Capital Commitment is set
forth on the signature page of this Agreement.
2.1.n "Simulated Depletion Deductions" means the
simulated depletion allowance computed by the Partnership with respect
to each oil and gas property by using either the cost depletion method
or the percentage depletion method (computed in accordance with
Internal Revenue Code Section 613 at the rates specified in Section
613(c)(5) without regard to the limitation of Section 613A, which
theoretically could apply to any partner) for each taxable year that
the property is owned by the Partnership and subject to depletion, in
accordance with Treas.Reg. Section 1.704-1(b)(2)(iv)(k).
2.1.o "Simulated Gains" and "Simulated Losses" mean,
respectively, the simulated gains or simulated losses computed by the
Partnership with respect to its oil and gas properties pursuant to
Treas.Reg Section 1.704-1(b)(2)(iv)(k).
2.1.p "Limited Partner Percentage" shall mean for each
Limited Partner as of any date the amount of such Limited Partner's
Capital Account divided by the sum of Capital Accounts of all Limited
Partners as of such date.
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2.1.q "Cash Flow" means the Gross Cash Proceeds from Partnership
Operations less the portion thereof used to pay Partnership expenses.
ARTICLE 3
(S) 3.1 Purposes and Powers of the Partnership
The principal purpose of the Partnership shall be to enter into
(or ratify, if such Agreement has already been entered into) the Joint
Venture Agreement with EPC for the purpose of engaging in the business of
prospect generation and sales, and activities relating thereto, within the
Continental United States and off shore state waters as described in a
Private Placement Memorandum for the Partnership dated December 13, 1990 to
which this Agreement was attached as an Exhibit. The purposes of this
Partnership may be accomplished through:
3.1.a the employment of such parties and personnel and
such legal, accounting, geological, geophysical and
engineering services and advice as the General Partner deems
advisable;
3.1.b the payment (or where appropriate in the judgment
of the General Partner, the failure to make payment) of
delay rentals on leases or leasehold interests;
3.1.c the making or giving of dryhole or bottomhole
contributions in the form of acreage, money or both;
3.1.d the execution and amendment of all documents or
instruments of any kind which the General Partner may deem
appropriate for carrying out the purposes of the Partnership;
3.1.e the purchase and establishment of inventories of pipe and
other equipment and material;
3.1.f the borrowing of money or the incurring of purchase money
or other debt for Partnership purposes and the mortgaging and pledging
of Partnership Properties for the repayment of any such debt; no
person or entity to which any such debt is owed shall be required to
inquire as to the purposes for which such debt is incurred and, as
between the Partnership and such person or entity, it shall be
conclusively presumed that the proceeds of such loan are to be and
will be used for purposes authorized under the terms of this
Agreement;
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3.1.g the holding of Partnership Properties in the name of a
nominee chosen by the General Partner if it shall deem such action
appropriate;
3.1.h the administration of non-producing properties;
3.1.i the sale, relinquishment, release, Farm Out or other
disposition of any producing and non-producing leases, leasehold
interests or contractual rights to acquire such interests or undivided
interest therein (even if such sale or disposition results in the sale
of all or substantially all of the assets of the Partnership), which,
in the judgment of the General Partner, should be sold, released,
farmed out, relinquished or otherwise disposed of;
3.1.j the producing, treating, transporting and marketing of
oil and gas and the execution of division orders, gas sales contracts
and other marketing agreements;
3.1.k to execute (if it has not already been executed) or
amend the Joint Venture Agreement or other joint venture or general or
limited partnership agreements or any other agreements or undertakings
which the General Partner may determine in its sole discretion is
necessary or advisable in order to carry out the purposes of the
Partnership, to furnish and give consents and to perform and to
transact business under the Joint Venture Agreement, and other
agreements in a manner which the General Partner deems in its
discretion is necessary or desirable in order to carry out the
purposes of the Partnership.
3.1.l associating the partnership with others in
partnerships, joint ventures and other associations.
3.1.m to enter into, make, amend and perform all such
contracts, agreements and other undertakings as the General Partner in
its sole discretion may determine to be necessary or advisable or
incident to the carrying out of the objects and purposes of the
Partnership.
3.1.n to do any and all acts required of the Partnership,
and exercise all rights of the Partnership, with respect to the
Partnership's interest in any Selected Company.
3.1.o to take such other actions as may be necessary or
advisable in connection with the foregoing.
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3.1.p to consult with legal counsel and with independent
public accountants selected by the General Partner on behalf and at
the expenses of the Partnership (and any action which the General
Partner takes or omits to take in good faith in reliance upon and in
accordance with the opinion or advice of such counsel or accountants
shall afford full protection and justification for the General Partner
with respect to the action taken or omitted).
ARTICLE 4
(S) 4.1 Principal Office
The executive officers of the Partnership are at Xxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxxx 00000, and the Partnership shall
conduct business at such location and any additional locations as may from
time to time be determined by the General Partner.
(S) 4.2 Term of Partnership
The Partnership shall be effective from and after the date set
forth in the first sentence of this Agreement. The Partnership shall
continue in existence until December 31, 2025, unless sooner terminated
pursuant to any provisions of the Connecticut Limited Partnership Act.
ARTICLE 5
(S) 5.1 Commitment of General Partner
The General Partner shall contribute $100 to the capital of the
Partnership. Other than the as required by (S) 12.2.c, 12.2.d, the General
Partner is not committed to (but may) contribute any other cash or property
and may do so as a Limited Partner.
ARTICLE 6
(S) 6.1 Payments of the Capital Contributions of the Limited Partners
Each Limited Partner shall contribute the sum $70,500 per unit to
the Capital of the Partnership, payable $60,500 by certified or bank check
or checks at closing (or by authorization as provided in the Subscription
Agreement), and $10,000 due on or before July 1, 1992.
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(S) 6.2 Nature of Contributions
No Limited Partner shall be required to contribute any capital to
the partnership other than as provided in paragraph 6 hereof or to lend any
funds to the Partnership. No interest shall be paid to a Limited Partner on
any capital contributed to the Partnership pursuant to this paragraph 6 and
except as otherwise provided herein no Partner may withdraw his Capital
Contribution.
(S) 6.3 Defaults in Payment of Capital Contributions
It shall constitute an "Event of Default" for any Limited Partner
to fail to pay the $10,000 due on or before July 1, 1992, if such failure
to pay continues for a period of 10 days after notice of such failure to
pay has been given to the Limited Partner by the General Partner. Upon the
occurrence of an Event of Default, the General Partner shall have full
power, in its sole discretion, without prejudice to any other rights the
Partnership may have under this Agreement, to do any one or more of the
following:
(a) to allow the defaulting Limited Partner to continue as a Limited
Partner and credit any distributions to which the defaulting Limited
Partner is then or thereafter may become entitled against such Limited
Partner's obligation to the Partnership; or
(b) to cause suit to be brought against the defaulting Limited
Partner to collect all of any part of the unpaid portion of the Capital
Commitment of such defaulting Limited Partner, together with (i) interest
at the rate of 18% per annum or, if lower, the maximum rate permitted by
law, from the date on which such defaulting Limited Partner's Capital
Commitment was first due to be paid to the Partnership and (ii) all
collection expenses, including attorneys' fees incurred by the Partnership
in connection with the collection of the unpaid portion of such Limited
Partner's Capital Commitment; or
(c) to require the defaulting Limited Partner (and the defaulting
Limited Partner will be obligated) to sell to the General Partner, a third
party and/or to some or all of the other Limited Partners who wish to
purchase the defaulting Limited Partner's entire interest in the
Partnership for such price as the General Partner in good faith shall
determine to be fair and reasonable. In making such determination, the
General Partner shall give consideration to the amount of such defaulting
Limited Partner's Capital Account as at the end of the quarter immediately
preceding the occurrence of the Event of Default, less any subsequent
distributions therefrom. The amount of the defaulting Limited Partner's
Capital Commitment which remains unpaid at the time of the Event of Default
shall be deducted from the purchase price of such defaulting Limited
Partner's interest and each Partner who purchases a portion of the
defaulting Limited Partner's interest in the Partnership shall assume
responsibility for payment
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of a corresponding portion of the defaulting Limited Partner's unpaid
Capital Commitment. The remaining portion of the purchase price shall be
paid to the defaulting Limited Partner, provided that the General Partner
may impose a charge deductible therefrom not in excess of 4% of such
purchase price to cover reasonable expenses incurred in effecting the sale
of the defaulting Limited Partner's interest in the Partnership; or
(d) to terminate all the unpaid Capital Commitment of such defaulting
Limited Partner, in which event:
(i) the Partnership may make available to the General Partner,
third parties and/or some or all of the other Limited Partners the ability
to assume part of all the defaulting Limited Partner's unpaid Capital
Commitment, in which event such Partners shall pay for their respective
additional Capital Commitments;
(ii) such defaulting Limited Partner shall have no further right to
make any Capital Contributions to the Partnership and such Limited
Partner's Partnership Percentage shall be reduced to zero; and
(iii) such defaulting Limited Partner's sole right thereafter shall
be to receive distributions from the Partnership, in accordance with
Section 8.2, up to (but not more than) an amount equal to such Partner's
Capital Account as of the date of default, plus or minus such Partner's pro
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rata share of allocations pursuant to Section 8.2 not yet made to such
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Partner's Capital Account as of the date of default, if any, and less a
charge, not in excess of 4% of the amount to be distributed to the
defaulting Limited Partner, to cover reasonable expenses incurred in
connection with such defaulting Limited Partner's default, but in all other
respects such defaulting Limited Partner shall remain subject to all other
terms and conditions of this Agreement, including all liabilities
hereunder, as if such Event of Default had not occurred.
(e) The profits allocable to a defaulting Limited Partner will be
equal to 50% of the profits (but 100% of the losses) otherwise alocable to
such defaulting Limited Partner under Section 8.2. The 50% of the profits
not allocated to a defaulting Limited Partner will be allocated among the
remaining Partners not then in default on the basis of their respective
Capital Contributions.
(f) Capital Accounts and Partnership Percentages shall be adjusted to
reflect the purchase, pursuant to Section 6.3(c), of any part of a
defaulting Limited Partner's interest in the Partnership by the remaining
Partners and the assumption of any unpaid Capital Commitment of such
defaulting Limited Partner. In the event some or all the remaining Partners
assume part or all the unpaid Capital Commitment of a defaulting Limited
Partner pursuant to Section 6.3(c), each non-defaulting Partner's
Partnership Percentage shall be adjusted to reflect such Partner's share of
the total Capital Commitments of all non-defaulting Partners.
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Percentage shall be adjusted to reflect such Partner's share of the total
Capital Commitments of all non-defaulting Partners.
ARTICLE 7
(S) 7.1 Fiscal Year and Accounting
The fiscal year of the Partnership shall be the calendar year and
the books of the Partnership shall be kept on a cash, accrual or such other
basis as the General Partner shall determine and shall be kept in
accordance with the accounting principles employed by the Partnership for
federal income tax purposes.
(S) 7.2 Capital Accounts
7.2.a A separate capital account shall be maintained for
each Partner to which his contributions and his allocable share of
income and gains shall be credited, and his distributions, and his
allocable share of deductions and losses shall be charged. The capital
accounts are intended to comply with Treasury Regulation (S) 1.704-
1(b) and shall be maintained and adjusted in a manner consistent with
such Regulation.
7.2.b A Partnership's Capital Account shall be increased
by the amount of Simulated Gains allocated to such Partnership, and
decreased by the amount of Simulated Depletion Deductions and
Simulated Losses allocated to such Partnership. Simulated Depletion
shall be allocated to the Partnership in the same proportion as such
Partners were properly allocated the adjusted tax basis of such
property. The aggregate Capital Account adjustments for simulated
percentage depletion allowances with respect to an oil and gas
property of the Partnership shall not exceed the aggregate adjusted
tax basis allocated to the Partnership with respect to such property.
The Capital Accounts of the Partners shall be adjusted upward by the
amount of any Simulated Gain in proportion to such Partner's allocable
shares of the portion of the total amount realized from the
disposition of such property that exceed the Partnership's simulated
adjusted basis in such property. The Capital Accounts of such Partners
shall be adjusted downward by the amount of any Simulated Loss in
proportion to such Partner's allocable shares of the total amount
realized from the disposition of such property that represents
recovery of the Partnership's simulated adjusted basis in such
property.
7.2.c Minimum Gain Chargeback. Notwithstanding any other
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provision of this Article, if there is a net decrease in Partnership
Minimum Gain, as defined in Temp. Reg. Section 1.704-1(b)(4)(iv)(c),
during any
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Partnership fiscal year each Partner shall be allocated items of
Partnership income and gain in accordance with Temp.Reg. Section
1.704-1(b) (4) (iv) (e). This Section 7.2(c) is intended to comply
with the minimum gain chargeback requirement in such Section of the
Regulations and shall be interpreted consistently therewith.
7.2.d Transfer of Interest. In the event any interest in
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the Partnership is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the
transferee to the extent it relates to the transferred interest.
(S) 7.3 Deduction of Intangible Drilling and Development Costs
The Partnership shall elect to deduct intangible drilling and
development costs currently as an expense for income tax purposes and shall
use its best efforts to require any partnership, joint venture or other
arrangement in which it is a party and which incurs such costs to make a
similar election.
(S) 7.4 Elections by Partnership as to Optional Adjustments to Basis
In case of a distribution of property within the provisions of
(S) 734 of the Code or in the case of a transfer of a Partnership interest
permitted by this Agreement made within the provisions of (S) 743 of the
Code, the General Partner, on behalf of the Partnership may, at its option,
file an election under (S) 754 of such Code in accordance with the
procedures set forth in the applicable Treasury Regulations. If such an
election is filed, the General Partner will at no time be required to
provide any additional accounting or tax information with respect to any
adjustment to basis for any Limited Partner.
(S) 7.5 Election with Respect to Taxation as Partnership
Neither the Partnership nor any Partner thereof will elect under
(S) 651 of the Internal Revenue Code of 1986 to be excluded from the
application of any of the provisions of Subchapter K, Chapter 1 thereof.
ARTICLE 8
(S) 8.1 Determination of Profit and Loss
At the end of each fiscal year of the Partnership or at the end
of such intervening accounting period as the General Partner may select,
all Partnership revenues, proceeds, costs and expenses shall be determined
and allocated to the Partnership interest of each Partner for the
accounting period then ending in accordance with the provisions of this
Article.
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(S) 8.2 Allocations of Income, Gains, Losses, Deductions and Distributions
Income, Gains, Losses, Deductions and Distributions shall be
allocated among the Partners as follows:
Income, Gains, Losses, Deductions and Distributions shall be
allocated and distributed 1 percent to the General Partner and 99 percent
to the Limited Partners until such time as the amounts of cash and the fair
market value of other consideration distributed to the Limited Partners
(either during the term of the Partnership or incident to liquidation of
the Partnership) equals 150 percent of their Capital Contribution to the
Partnership. Thereafter, such items shall be allocated 25 percent to the
General Partner and the balance shall be allocated to the Limited Partners
(including the General Partner if and to the extent he invests as a Limited
Partner). Allocations and distributions to the Limited Partners shall be
allocated to each Limited Partner in accordance with his Limited
Partnership Percentage.
Notwithstanding anything contained herein to the contrary, no
distribution may be made to or loss allocated to a Limited Partner which
would render such Limited Partner a deficit Capital Account.
ARTICLE 9
(S) 9.1 Rights, Representations and Covenants of Limited Partners
9.1.a No Limited Partner shall be personally liable for
any of the debts of the Partnership or any of the losses thereof
beyond the amount of his agreed Capital Contribution. No Limited
Partner shall be responsible for any losses of any other Limited
Partner. No Limited Partner shall take part in the control or
management of the business or transact any business for the
Partnership and no Limited Partner shall have the power to sign
for or to bind the Partnership. No salary shall be paid to any
Limited Partner nor shall any Limited Partner have a drawing
account. No Limited Partner shall be entitled to the return of
his contribution.
9.1.b Each Limited Partner shall be personally obligated
to make payment of the amount he agreed to contribute to the
Capital of the Partnership upon execution of his Subscription
Agreement to the Partnership.
9.1.c In addition to other rights which a Limited
Partner may have, each Limited Partner has the right to bring a
derivative action against the General
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Partner in order to recover damages or otherwise seek relief from the
General Partner for a breach by the latter of his fiduciary
obligations to the Partnership.
(S) 9.2 Assignments by Limited Partner
9.2.a A Limited Partner may not sell, assign or transfer
his interest in the Limited Partnership to a successor Limited Partner
whether voluntarily or by operation of law unless the General Partner,
in his sole discretion, consents in writing to the sale, assignment or
transfer. Provided that such written consent is obtained, the
purchaser, assignee or transferee shall become a substitute Limited
Partner only if:
9.2.a.i the interest sold, assigned, or
transferred is not less than the total interest of the
transferor Limited Partner in the Partnership unless,
in the opinion of the General Partner, the Limited
Partner has a sufficient interest to be divided; and
9.2.a.ii the purchaser, assignee or
transferee shall consent in writing, in form satisfactory
to the General Partner, to be bound by the terms of the
Limited Partnership Agreement in the place and stead of
the assigning Limited Partner.
9.2.b A Limited Partner, without the consent of the
General Partner, may assign to any person all or any portion of his
right to receive distributions hereunder, provided, however, that such
assignment shall not be binding on the Partnership until the General
Partner shall have received a certified copy of such assignment.
9.2.c No sale or assignment of an interest in the
Partnership by a Limited Partner shall be effective until all
certificates or other documents have been performed which are
necessary to constitute the assignee a substitute Limited Partner in
the Limited Partnership in all jurisdictions in which it does business
and the General Partner approves the written assignment and said
assignment is recorded on the books of the Partnership. Each Limited
Partner agrees, upon request of the General Partner, to execute such
certificates or other documents and to perform such acts as may be
required to preserve such status and that Xxxx Xxxxxxxxx, the
individual General Partner, may execute such certificates or other
instruments or documents on behalf of each Limited
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Partner pursuant to the Power of Attorney granted by each Limited
Partner to the General Partner.
9.2.d Assignment, with or without the consent of the
General Partner, will not release the Limited Partner from his
obligation to pay his Capital Contribution.
(S) 9.3 ASSIGNEES
9.3.a In the event of the decease or incapacity of any
Limited Partner, his legal representative(s) shall have the same
status as an assignee of the Limited Partner unless and until the
General Partner shall permit such legal representative(s) to become a
Substitute Limited Partner on the terms and conditions as herein
provided. The death of a Limited Partner shall not dissolve the
Partnership.
9.3.b An assignee of a Limited Partner who does not
become a Substitute Limited Partner in accordance with (S) 9.2
shall, if such assignment is in compliance with the terms of this
Agreement, have the right to receive the same share of profits, losses
and distributions of the Partnership to which the assigning Limited
Partner would have been entitled if no such assignment had been made
by such Limited Partner.
9.3.c Any Limited Partner who shall assign all his
interest in the Partnership shall cease to be a Limited Partner of the
Partnership, and shall no longer have any rights or privileges or
obligations if a Limited Partner is admitted to the Partnership as a
Substitute Limited Partner in accordance with (S) 9.2, provided,
however, that said assigning Limited Partner shall retain the
statutory rights and be subject to the statutory obligations of an
assignor Limited Partner under the Uniform Act as well as the
obligations to make the Capital Contributions attributable to the
interest in question, if any portion thereof remains unpaid.
9.3.d In the event of any assignment of a Limited
Partner's interest as a Limited Partner, there shall be filed with the
Partnership a duly executed and acknowledged counterpart of the
instrument making such assignment, such interest must evidence the
written acceptance of the assignee to all the terms and provisions of
this Agreement; and if such instrument is not so filed, the
Partnership need not recognize any such assignment for any purpose.
9.3.e An assignee of a Limited Partner's interest as a
Limited Partner who does not become a
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Substitute Limited Partner as provided in (S) 9.2 and who desires to make a
further assignment of his interest shall be subject to the provisions of
this Article 9 to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of his interest.
ARTICLE 10
(S) 10.1 Rights, Representations and Covenants of the General Partner
10.1.a The General Partner shall have full, exclusive and
complete discretion in the management and control of the affairs of the
Partnership for the purposes herein stated, shall make all decisions
affecting Partnership affairs and shall have full power and authority to
execute, amend and deliver on behalf of the Partnership such documents or
instruments relating to Partnership affairs as may in his opinion be
appropriate in the conduct of Partnership business, including, without
limitation, joint venture agreements, operating agreements, division
orders, gas sales contracts, unitization agreements, gasoline plan
contracts, recycling agreements, production payments, contracts, notes,
mortgages and deeds of trust. No person, firm or corporation dealing with
the Partnership shall be required to inquire into the authority of the
General Partner to take any action or make any decision.
10.1.b The General Partner shall devote such portion of
his time as is reasonably needed to carry out the operations contemplated
under this Agreement and shall make available at all reasonable times his
offices, organization, and facilities to carry out the purposes of the
Partnership.
10.1.c The General Partner shall, in addition to other
duties, maintain complete and accurate records and accounts of all income
and expenditures and furnish the Limited Partners with statements of
account from time to time, together with all necessary tax reporting
information. Such records and accounts shall likewise be available for
inspection and audit by any Limited Partner or his duly authorized
representative (at the expenses of such Limited Partner) during business
hours at one of the executive offices of the Partnership; however, the
General Partner shall not be required to maintain such records and material
referred to herein for a period in excess of five (5) years from the date
of the making or receipt thereof.
10.1.d The Partnership, to the extent of its assets, will
indemnify the General Partner and, in the
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sole discretion of the General Partners, their agents, employees,
advisors and consultants, against any loss or liability resulting from
good faith acts or omissions to act on its part on behalf of the
Partnership and, in any event, to the extent permissible under the
laws of the State of Connecticut. The General Partner shall not have
any liability for any failure or misfeasance on his part, other than a
willful failure or misfeasance with respect to his obligations under
the Agreement.
10.1.e Whenever a conflict of interest exists or arises
between the General Partner, on the one hand, and the Partnership or a
Limited Partner, on the other hand, the General Partner shall resolve
such conflict of interest, take such action or provide such terms
considering, in each case, the relative interests of each party to
such conflict, agreement, transaction or situation and the benefits
and burdens relating to such interest, any customary or accepted
industry practices, and any applicable generally accepted
accounting or engineering practices or principles, and in the absence
of bad faith by the General Partner, the resolution, action or terms
so made, taken or provided by the General Partner shall not constitute
a breach of this Agreement, or any other agreement contemplated herein
or a breach of any standard of care or duty imposed herein or under
Connecticut law or any other applicable law, rule or regulation.
(S) 10.2 Assignment by General Partner
The General Partner shall not sell, assign or otherwise dispose of all
or any portion of his interest in the Partnership as General Partner
without prior consent; provided, however, such consent shall not be
required, if such sale or assignment relates only to the General Partner's
right to receive distributions hereunder or is required by another
provision of this Agreement.
(S) 10.3 Fees and Reimbursement to General Partner
The Partnership shall reimburse the General Partner for all expenses
and costs incurred in connection with the business of the Partnership.
Additionally, for a period of five years from the date of this Agreement,
the Partnership shall pay to the General Partner an annual management fee
equal to 2 percent of the aggregate capital commitments of the Limited
Partners. If proceeds are not available to pay the management fee, the fee
shall accrue, and be paid from the first revenue from operations which
becomes available.
Following the expiration of five years from the date hereof, the
Partnership shall pay to the General Partner a
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Management Fee equal to 3 percent of the Cash Flow of the Partnership.
ARTICLE 11
(S) 11.1 General Partner's Withdrawal from the Partnership
The General Partner may not withdraw as General Partner from the
Partnership without prior Consent, unless Xxxxxxx Xxxxxxx agrees to serve
as substitute individual General Partner.
(S) 11.2 Death or Incapacity of Xxxx Xxxxxxxxx
In the event Xxxx Xxxxxxxxx dies or for any reason ceases to be
an individual General Partner or is adjudicated to be mentally incompetent,
Xxxxxxx Xxxxxxx shall serve as substitute or additional individual General
Partner, as the case may be, if he accepts such appointment, at the time.
ARTICLE 12
(S) 12.1 Termination and Dissolution of the Partnership
The Partnership shall be dissolved on December 31, 2025, or upon
the prior occurrence of any event causing a dissolution of the Partnership
under the Uniform Limited Partnership Act of the State of Connecticut. The
Partnership shall also be dissolved upon (a) the occurrence of any event
which makes it unlawful for the Partnership business to be continued,
unless such event can be and is remedied within a reasonable period of time
not to exceed six (6) months; (b) the sale or other disposition of
substantially all interests in oil and gas acreage and leases and other
Partnership assets, or (c) the bankruptcy of a General Partner, unless a
surviving General Partner elects to continue as General Partner.
The Partnership shall not be dissolved by reason of the death,
withdrawal or expulsion of a Limited Partner or upon the admission of a new
Limited Partner.
(S) 12.2 Winding Up and Distribution
In the event of the dissolution of the Partnership, the General
Partner shall wind up the affairs of the Partnership and, after payment of
all third-party liabilities of the Partnership, shall distribute the
remaining assets of the Partnership in cash or in kind to the General
Partner and to the Limited Partners in accordance with their respective
Capital Account balances.
12.2.a Distribution to the Limited Partners
hereunder shall be allocated to each Limited Partner in
accordance with his Limited Partnership Percentage.
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12.2.b Any property distributed in kind in liquidation
shall be treated as if the property were sold for its fair market
value and any deemed gain or loss shall be credited to the Partners
in accord with this Agreement.
12.2.c If there should be a deficit in any Partner's
capital account, the Partner shall be required to make a Capital
Contribution equal to the deficit amount. Such contribution shall be
made not later than the end of the Partnership year in which such
Partners' interest is liquidated, or, if later, within 90 days of the
date of such liquidation.
12.2.d Notwithstanding anything contained herein to the
contrary, if on or during liquidation the respective Partners'
Capital Accounts do not reflect the allocation percentages provided
in Section 8.2, then the Capital Accounts, to the extent necessary,
shall be reallocated to reflect such allocation percentages.
(S) 12.3 Option of General Partner
If the Partnership is terminated without approval of the General
Partner, the General Partner shall have an option to purchase for cash all
assets of the Partnership at the aggregate amount computed by taking (as of the
December 31 last preceding such termination):
(a) The sum of (i) cash on hand, prepaid expenses and accounts
receivable; (ii) 66-2/3 percent of the future net revenues of all proven
developed oil and gas leases, royalties, overriding royalties and other
proven interest in oil and gas properties estimated by an independent
engineer in accordance with accepted practices, discounted to present
worth by an annual factor of 10 percent, which factor is subject to
increase (but not decrease) in the same proportion that the New York
Federal Reserve Bank Discount Rate (the "Discount Rate") at the time of
calculation exceeds the Discount Rate at the effective date hereof and
(iii) the present value of all other assets, less estimated cost of sale,
as determined by an independent appraiser, in the business of making such
appraisals; and subtracting therefrom an amount as determined in paragraph
12.3(b), below.
(b) An amount equal to all debts, accrued expenses and
obligations of the Partnership of every kind and nature, including the
discounted present value of payment due or to become due to the General
Partner.
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ARTICLE 13
(S) 13.1 Independent Activities
All partners may, notwithstanding the existence of this
Agreement, engage in whatever activities they choose, whether the same be
competitive with the Partnership or otherwise, without having or incurring
any obligations to offer any interest in such activities to any party
hereto. Neither this Agreement nor any activity undertaken pursuant hereto
shall prevent the General Partner from engaging as they intend to do in the
exploration for and production of oil, gas and other minerals,
individually, jointly with others, or as a party of any other association
to which the General Partner is or may become a party, except to the extent
provided herein.
ARTICLE 14
(S) 14.1 NOTICES
Any and all notices called for under this Agreement shall be
deemed adequately given, as and when postmarked, if in writing and sent
registered or certified mail, postage prepaid, to the party or parties for
whom such notices are intended. All such notices in order to be effective
shall be addressed to the last address of record on the partnership books
when given by the General Partner and intended for the Limited Partners;
and, to the address of the Partnership when given by the Limited Partners
and intended for the General Partner. Any Limited Partner may change his
address by giving notice, in writing, to the General Partner and the
General Partner may change the address of the Partnership by giving such
notice to all Limited Partners. Commencing on the fifth day after giving of
such notice, such newly designated address shall be such Partner's address
for the purpose of all notices of other communications required or
permitted to be given pursuant to this Agreement.
(S) 14.2 LAW GOVERNING
This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut.
(S) 14.3 AMENDMENTS
The General Partner may propose in writing to the Limited
Partners the adoption of an amendment to this Agreement, and if within
sixty (60) days of the sending of such proposal, the consent of the
Partners shall have been given, the amendment shall be deemed adopted,
except that all Partners must give their consent in writing to any
amendment which would (i) extend the term of the Partnership as set forth
in Section 4.2 hereof, (ii) amend
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Sections 8.2, 12.2 or 12.3, (iii) amend this Section 14.3 or (iv) in any
manner increase the liability of the Limited Partners.
(S) 14.4 Successors and Assigns
This Agreement and all the terms and provisions hereof shall be
binding upon and shall enure to the benefit of the Partners, their
respective legal representatives, heirs, successors and assigns.
(S) 14.5 Counterparts
This Agreement may be executed in several counterparts and all so
executed shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the original or the
same counterpart, except that no counterpart shall be binding unless signed
by the General Partner.
Individuals Entities
------------------------------- ----------------------------
Individual Limited Partner Name of Entity
By:_________________________
Signature and Title
$________________________
Total Capital Commitment
$________________________
Amount Due on or before
July 1, 1992
EDGE GROUP II LIMITED PARTNERSHIP
By:______________________________
its General Partner
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[INDIVIDUAL]
STATE OF _____________________)
: ss.:
COUNTY OF ____________________)
On ____________________, 199_, before me personally appeared
_______________________, known to me as the person(s) whose name(s) is
subscribed to the foregoing Agreement of Limited Partnership and acknowledged
that he/she/they executed the same.
______________________________
Notary Public
[CORPORATE]
STATE OF _____________________)
: ss.:
COUNTY OF ____________________)
On ____________________, 199_, before me personally appeared
_______________________, to me known and who, being by me duly sworn, did depose
and say that s/he is the _______________________ of ______________________,
a _______________________ corporation, the corporation which executed the
foregoing Limited Partnership Agreement, that s/he knows the seal of said
corporation; that the seal affixed to said Agreement is such corporate seal;
that it was so affixed by authority of the corporation; and that s/he signed
his/her name thereto by like authority.
______________________________
Notary Public
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[PARTNERSHIP]
STATE OF _________________)
: ss.:
COUNTY OF ________________)
On ___________, 199_, before me personally appeared _________________,
to me known and who, being by me duly sworn, did depose and say that s/he is a
General Partner of _____________, a ______________ partnership, the partnership
which executed the foregoing Limited Partnership Agreement, that s/he being
authorized to do so, did execute it on the partnership's behalf.
_________________________
Notary Public
[TRUST]
STATE OF _________________)
: ss.:
COUNTY OF ________________)
On ___________, 199_, before me personally appeared _________________,
to me known and who, being by me duly sworn, did depose and say that s/he is a
trustee of _____________, a trust, that the trust executed the foregoing Limited
Partnership Agreement, that s/he being authorized to do so, did execute it on
the trust's behalf.
_________________________
Notary Public
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