EXHIBIT 10.2
AGREEMENT OF LIMITED PARTNERSHIP
OF
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THIS AGREEMENT OF LIMITED PARTNERSHIP (the "Agreement") is entered into
as of this 4th day of November, 2005, by and among ______________________, as
general partner ("General Partner") and those persons who have executed this
Agreement, and whose names and residences are set forth in Schedule A annexed
hereto, as limited partners (the "Limited Partners"). The General Partner and
the Limited Partners are referred to herein collectively as the "Partners."
WHEREAS, the General Partner formed a limited partnership under the
laws of the State of Delaware;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto, intending to be legally bound hereby, agree as
follows:
ARTICLE I.
THE LIMITED PARTNERSHIP
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Section 1.1. Formation. The Partnership was formed as a limited
partnership pursuant to the Delaware Revised Uniform Limited Partnership Act.
Section 1.2. Certificate of Limited Partnership. The Certificate was
filed in the office of the Delaware Secretary of State on ________________. The
Partners, acting directly or through an attorney-in-fact, shall execute such
further documents (including amendments to the Certificate) and take such
further action as shall be appropriate to comply with all requirements of law
for the formation and operation of a limited partnership in the State of
Delaware and all other counties and states where the Partnership may elect to do
business.
Section 1.3. Name. The name of the Partnership shall be
________________________________________ but the business of the Partnership may
be conducted under any other name designated by the General Partner provided
that the General Partner shall notify the Limited Partners of such proposed name
change at least 30 days prior to the effective date thereof.
Section 1.4. Purposes. The purposes of the Partnership are (i) to
acquire (by capital contribution, loan or otherwise), own, manage, operate,
rent, pledge, assign, sell and otherwise deal with real and personal property,
tangible or intangible, or any interest therein, wherever situated, including,
without limitation, interests in any corporation, limited liability company,
partnership, joint venture or other form of business association, whether or not
such entity has its activities or assets outside of the United States, whether
or not such entity's activities could be considered high risk, and whether or
not such entity is controlled by a Partner or person or entity related to a
Partner (including, without limitation, a family member); interests in
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securities of any government, state, district, municipality, or other political
or governmental division or subdivision; and interests in stocks, bonds,
mortgages, debentures, notes, warrants, options, certificates of deposit, money
market accounts, commercial paper, evidences of indebtedness or other
obligations, securities or investment accounts of any type however evidenced;
and (ii) to conduct such other activities as may in the discretion of the
General Partner be reasonably related to the purposes set forth in clause (i)
above.
Section 1.5. Registered Agent and Office. The registered office of the
Partnership shall be located at 000 Xxxxxx Xxxx, Xxxxx X, Xxxx xx Xxxxx, Xxxxxx
of Kent, State of Delaware. United Corporate Services, Inc. shall be the
registered agent of the Partnership for service of process. The General Partner
may, at any time and from time to time, change the location of the Partnership's
registered office or registered agent as it may from time to time determine upon
notice of such change to all Partners. The principal place of business of the
Partnership and the office of the General Partner shall be established at 000
Xxxxxx Xxxxxx, 0xx Xxxxx Xxxxxx, Xxxxxxxx, XX 00000, or at such other location
as may be selected from time to time by the General Partner.
Section 1.6. Fiscal Year. The fiscal year of the Partnership shall be
the calendar year (the "Partnership Year").
ARTICLE II.
DEFINITIONS
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The following defined terms used in this Agreement shall have the
respective meanings specified below.
Section 2.1. Bankruptcy. The "Bankruptcy" of a Partner shall mean (i)
the filing by a Partner of a voluntary petition seeking liquidation,
reorganization, arrangement or readjustment, in any form, of his debts under
Title 11 of the United States Code or any other foreign, federal or state
insolvency law, (ii) the making by a Partner of any assignment for the benefit
of his creditors, or (iii) the expiration of sixty (60) days after the filing of
an involuntary petition under Title 11 of the United States Code, an application
for the appointment of a receiver for the assets of a Partner, or an involuntary
petition seeking liquidation, reorganization, arrangement or readjustment of his
debts under any other foreign, federal or state insolvency law, provided that
the same shall not have been vacated, set aside or stayed within such sixty-day
period, or immediately upon a Partner's filing an answer consenting to or
acquiescing in any such petition.
Section 2.2. Capital Account. As of any date, the "Capital Account" of
any Partner is equal to his actual Capital Contributions paid or contributed to
the Partnership, (i) increased to reflect his allocable share of Partnership
Profits for each Fiscal Year (or fraction thereof), and (ii) decreased to
reflect his allocable share of Partnership Losses for each Fiscal Year (or
fraction thereof) and the amount of all distributions by the Partnership to the
Partner. For purposes of the preceding sentence, the amount of any distribution
of property other than cash by the Partnership shall be the fair market value of
such property net of liabilities secured by such property which the Partner
assumes or takes subject to. Each Partner's Capital Account shall be adjusted as
necessary to reflect expenditures of the Partnership that are not deductible in
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computing its taxable income and not properly chargeable to capital (including,
for this purpose, any losses disallowed under Code Section 267(a)(8) or 707(b)),
to the extent that such adjustments are not otherwise effected through the
allocations made pursuant to Article 5. Adjustments made under the preceding
sentence shall be allocated in the same ratio that Profits or Losses (as the
case may be) are allocated for the Fiscal Year (or fraction thereof) in which
such expenditures are incurred. Any transferee of an interest in the Partnership
shall succeed to the Capital Account corresponding to the transferred interest.
Section 2.3. Capital Contribution. The "Capital Contribution" of a
Partner shall be the sum of the amounts of money and the fair market value of
any shares contributed by or on behalf of such Partner to the capital of the
Partnership.
Section 2.4. Code. "Code" shall mean the Internal Revenue Code of 1986,
as amended, or the corresponding provisions of any successor statute.
Section 2.5. Family Member. "Family Member" means the descendants or
spouse of a Partner.
Section 2.6. Fiscal Year. "Fiscal Year" shall mean the calendar year.
Section 2.7. General Partner. "General Partner" shall mean Gift
Liquidators, Inc. and any successor general partner.
Section 2.8. Interest. "Interest" shall mean the percentage interest in
the Partnership of a Partner. The Interest of a Partner shall be a fraction
having as its numerator the Capital Account of that Partner, and having as its
denominator the Capital Accounts of all of the Partners. The Interests of the
General Partner and the Limited Partners are shown on Schedule A, as of the most
recent revision thereof.
Section 2.9. Limited Partners. "Limited Partners" shall mean those
individuals and entities whose names and addresses are set forth as limited
partners in this Agreement as amended from time to time.
Section 2.10. Partner. "Partner" shall refer to all Limited Partners
and the General Partner.
Section 2.11. Profits and Losses. "Profits" and "Losses" shall mean,
for any fiscal period, an amount equal to the Partnership's taxable income or
loss for such year or period, determined in accordance with Code Section 703(a)
(for this purpose, all items of income, gain, loss, or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits and Losses shall
be added to such taxable income or loss; and
(b) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Profits and Losses shall be subtracted from such taxable
income or loss.
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ARTICLE III.
CAPITAL CONTRIBUTIONS
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Section 3.1. Initial Contributions. The Partners have contributed to
the capital of the Partnership certain shares of common stock of Eternal
Enterprise, Inc. in the amount and of the type indicated in Schedule B hereto.
The General Partner has contributed to the capital of the Partnership
by assuming certain Promissory Notes (the "Notes") issued by the Limited
Partnership to the Limited Partners pursuant to the Contribution Agreement,
dated November 4, 2005, between the Limited Partnership and the Limited Partners
(the "Contribution Agreement") as further set forth on Schedule B hereto.
Section 3.2. Additional Contributions and Withdrawals. No Partner shall
be required to make any contribution to the capital of the Partnership other
than the contributions set forth in this Article 3. No Partner shall have the
right to withdraw or demand a return of all or any part of his Capital
Contribution during the term of the Partnership. No interest shall be paid on
Capital Contributions.
Section 3.3. Negative Capital Accounts. At no time during the term of
the Partnership or upon dissolution and liquidation thereof shall a Limited
Partner with a negative balance in his Capital Account have any obligation to
the Partnership or the other Partners to restore such negative balance, except
(i) as may be required by law, or (ii) in respect of any negative balance
resulting from a withdrawal of capital or dissolution in contravention of this
Agreement.
ARTICLE IV.
COSTS AND EXPENSES
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The Partnership shall reimburse the General Partner for all costs and
expenses incurred in managing and operating the Partnership.
ARTICLE V.
DISTRIBUTIONS OF CASH
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ALLOCATIONS OF PROFITS AND LOSSES
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Section 5.1. Distributions.
(a) The General Partner may make distributions from time to time from
assets of the Partnership that are not required, in the sole judgment of the
General Partner, for the establishment of reasonable reserves. Distributions
shall be made to the Partners in proportion to their respective positive Capital
Account balances; provided, however, that no distribution shall be made to any
Limited Partner to the extent that it results or is likely to result in a
negative Capital Account balance for such Limited Partner.
(b) To the extent that the General Partner determines that the net
positive cash flow of the Partnership permits, the General Partner shall make
distributions sufficient to allow the Partners to satisfy their tax liabilities
attributable to their ownership of Interests in the Partnership.
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Section 5.2. Distributions Upon Liquidation. All distributions by the
Partnership upon its final liquidation and dissolution shall be made to the
Partners in accordance with the positive balances in the Partners' Capital
Accounts, after adjustment to reflect all Profits and Losses (including
unrealized appreciation and depreciation allocable in accordance with Section
9.4 as Profits and Losses) for the Fiscal Year in which such liquidation and
dissolution occurs.
Section 5.3. General Partner's Deficit Payback Obligation. Following
the distribution of liquidation proceeds, if any General Partner has a deficit
balance in his Capital Account, such General Partner shall be obligated to
restore such deficit balance for payment to Partners with positive Capital
Account balances or to creditors of the Partnership.
Section 5.4. Allocations of Profits and Losses. Profits and Losses for
each Fiscal Year of the Partnership shall be allocated among the Partners in
proportion to the average daily balances in their respective Capital Accounts;
provided, however, that no Loss shall be allocated to any Limited Partner to the
extent that it results or is likely to result in a negative Capital Account
balance for such Limited Partner.
Section 5.5. Credits. For all income tax purposes, credits of the
Partnership claimed for a Fiscal Year shall be allocated among the Partners in
proportion to the net amount of Profits or Losses allocated among the Partners
for such Fiscal Year under Section 5.4.
Section 5.6. Allocations with Respect to Contributed Shares. Income,
gain, loss and deduction with respect to any property contributed to the capital
of the Partnership shall, solely for tax purposes, be allocated among the
Partners so as to take account of any variation between the adjusted basis of
such property to the Partnership for federal income tax purposes and its initial
fair market value, in accordance with Code Section 704(c) and the Treasury
Regulations in effect thereunder. Any elections or decisions relating to such
allocations shall be made by the General Partner in any manner, consistent with
such Regulations, that reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section 5.6 are solely for purpose of
federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or share of Profits,
Losses, other items, or distributions pursuant to any provision of this
Agreement, except as such Regulations may otherwise require.
Section 5.7. Qualified Income Offset. Notwithstanding Section 5.4
above, if one or more Limited Partners receives (i) an unexpected allocation
pursuant to Section 706(d) of the Code as a result of a transfer of an Interest
in the Partnership or pursuant to the regulations under Section 751 of the Code
as a result of the distribution of unrealized receivables to a Partner or (ii)
an unexpected distribution that exceeds increases during the taxable year in the
Capital Accounts of the Limited Partners to whom such distributions are made,
income and gain of the Partnership shall be allocated pro rata to such Partners
until such deficit balance in the Capital Accounts caused by such unexpected
allocation or distribution and in excess of the dollar amount any such Partner
is obligated to contribute to the Partnership is eliminated.
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Section 5.8. Partnership Adjustments. Any increase or decrease in
amount of any item of income, gain, loss, deduction or credit attributable to an
adjustment to the basis of Partnership assets made pursuant to a valid election
under Sections 734, 743 and 754 of the Code, and pursuant to corresponding
provisions of applicable state and local income tax laws, shall be charged or
credited, as the case may be, and any increase or decrease in the amount of any
item of credit or tax preference attributable to any such adjustment shall be
allocated, to the Capital Accounts of those Partners entitled thereto under such
laws. Any such election, however, shall be made in the sole discretion of the
General Partner.
Section 5.9. Allocations and Distributions with Respect to Transferred
Interests. Profits, gains, Losses, deductions and credits allocated to a
Partnership interest assigned during a Fiscal Year of the Partnership and
distributions with respect thereto shall be allocated or distributed, as the
case may be, to the person who was the holder of such Interest during such
Fiscal Year on the basis of an interim closing or closings of the Partnership's
books or in any other manner determined by the General Partner to be required by
the Code or advisable in light of positions (published or unpublished) taken or
likely to be taken by the Internal Revenue Service.
Section 5.10. Time of Allocations. Except as otherwise provided in this
Agreement, or as required by Section 755 of the Code, allocations pursuant to
this Article 5 shall be made as of the last day of each Fiscal Year.
Section 5.11. Compliance with Section 704(b). The foregoing provisions
and the other provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Treasury Regulations Section
1.704-1(b), and shall be interpreted and applied in a manner consistent with
such Regulations. In the event the General Partner shall determine that it is
prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto, are computed in order to comply with such Regulations, the
General Partner may make such modification, provided that it is not likely to
have a material effect on the amounts distributable to any Partner upon the
dissolution of the Partnership.
ARTICLE VI.
MANAGEMENT
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Section 6.1. Rights and Duties of Limited Partners.
Except as may hereafter be required or permitted by the Delaware
Revised Uniform Limited Partnership Act or as specifically provided herein, the
Limited Partners in such capacity shall take no part whatever in the control,
management, direction or operation of the affairs of the Partnership and shall
have no power to act for or bind the Partnership.
Section 6.2. Powers of the General Partner.
(a) Subject to the limitations set forth in this Agreement, the General
Partner shall perform or cause to be performed all management and operational
functions relating to the business of the Partnership. Without limiting the
generality of the foregoing, the General Partner is authorized on behalf of the
Partnership, without the consent of any Limited Partner, to:
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(i) invest and expend the capital and revenues of the Partnership
in furtherance of the Partnership's business and pay, in accordance with the
provisions of this Agreement, all expenses, debts and obligations of the
Partnership to the extent that funds of the Partnership are available therefor;
(ii) enter into agreements and contracts with any person,
terminate any such agreements and institute, defend and settle litigation
arising therefrom, and give receipts, releases and discharges with respect to
all of the foregoing and any matters incident thereto;
(iii) maintain, at the expense of the Partnership, adequate
records and accounts of all operations and expenditures and furnish the Partners
with the reports referred to in Section 7.3;
(iv) purchase, at the expense of the Partnership, liability,
casualty, fire and other insurance and bonds to protect the Partnership's
properties, business, Partners and employees and to protect the General Partner;
(v) borrow funds needed for the operations of the Partnership,
including obtaining loans from any Partner from time to time and, in connection
therewith, issue notes, debentures and other debt securities and mortgage,
pledge, encumber or hypothecate the assets of the Partnership;
(vi) sell, lease, trade, exchange or otherwise dispose of all or
any portion of the property or assets of the Partnership;
(vii) employ, at the expense of the Partnership, consultants,
accountants, attorneys, brokers, engineers, escrow agents and others and
terminate such employment;
(viii) execute and deliver purchase agreements, notes, leases,
subleases, applications, transfer documents and other instruments necessary or
incidental to the conduct of the business of the Partnership;
(ix) permit an assignment of a Limited Partner's interest in the
Partnership and admit an assignee of a Limited Partner's interest as a
substituted Limited Partner in the Partnership, pursuant to and subject to the
limitations of Sections 8.2 and 8.5, respectively; and
(x) bring, defend and settle claims or litigation in the name of
the Partnership.
By executing this Agreement, each Limited Partner shall be deemed to
have consented to any exercise by the General Partner of any of the foregoing
powers. Any third party may rely on the signature of an officer of the General
Partner as a valid exercise or execution of any of the foregoing powers on
behalf of the Partnership.
(b) To the extent the General Partner determines that it is required or
otherwise in the best interests of the Partnership, the General Partner may
acquire, hold and transfer, or cause to be acquired, held and transferred, any
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property of the Partnership in the name of the General Partner or a nominee,
agent or trustee for the Partnership (including any General Partner acting as
such) and enter into, or cause to be entered into, agreements or transactions
for, and on behalf of, the Partnership, in the name of the General Partner or
such nominee, agent or trustee; provided that such General Partner or such
nominee, agent or trustee, in so acting, shall act solely as agent for, and on
behalf of, the Partnership and will use its best efforts to conduct the business
of the Partnership so as to insure that each party to any such material
agreement or transaction shall be given actual notice that the entire beneficial
interest in such agreement or transaction (including, without limitation, any
assets covered thereby) is in the Partnership, rather than such General Partner
or any such other person. All title to property beneficially owned by the
Partnership and held by such General Partner or such nominee, agent or trustee
shall be held in the name of the latter solely as nominee, agent or trustee for,
and on behalf of, the Partnership.
Section 6.3. Exculpation. The General Partner shall not be liable, in
damages or otherwise, to the Partnership or to any of the Partners for any act
or omission performed or omitted by such General Partner pursuant to the
authority granted by this Agreement, unless such act or omission results from
willful misconduct or bad faith. The Partnership shall indemnify, defend and
hold harmless the General Partner from and against any and all claims or
liabilities of any nature whatsoever, including reasonable attorneys' fees,
arising out of or in connection with any action taken or omitted by the General
Partner pursuant to the authority granted by this Agreement, except where
attributable to the willful misconduct or bad faith of the General Partner. The
General Partner shall be entitled to rely on the advice of counsel, accountants
or other independent experts experienced in the matter at issue, and any act or
omission of a General Partner pursuant to such advice shall in no event subject
such General Partner to liability to the Partnership or any Partner. The
Partnership shall advance funds to any General Partner for the costs of
defending any claim upon receipt of an undertaking from such General Partner to
repay such amounts to the Partnership upon any judicial determination that such
General Partner is not entitled to indemnification under this Section 6.3.
Section 6.4. Other Activities. Any Partner may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, whether presently existing or hereafter created, and neither the
Partnership nor any Partner shall have any rights in or to such independent
ventures or the income or profits derived therefrom.
Section 6.5. Transactions with General Partner. This Agreement shall
not preclude transactions between the Partnership and the General Partner acting
in and for its own account, provided that any services performed by any General
Partner are services that the General Partner reasonably believes to be in the
best interests of the Partnership.
Section 6.6. Removal of General Partner. Any General Partner may be
removed from the Partnership only for cause and only by action of the Limited
Partners whose Interests in the Partnership aggregate more than eighty-seven
percent (87%). "Cause" shall mean any action by such General Partner
constituting fraud against the Partnership, or any reckless or willful violation
by such General Partner of the specific terms of this Agreement. "Action of the
Limited Partners" shall mean action by written instrument signed by the
requisite number of Limited Partners specifically setting forth the cause for
removal. The removal of a General Partner shall not constitute a waiver or
exculpation by the Partnership or any Partner of any liability which such
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General Partner may have to the Partnership or any Partner in respect of the
cause for his removal, and such General Partner, even though removed, shall
remain entitled to exculpation and indemnification from the Partnership pursuant
to Section 6.3 with respect to any matter arising prior to his removal; and
provided, further, that in the event of the removal of any General Partner which
is the sole remaining General Partner, the Partnership shall be dissolved,
unless reconstituted by the selection of a substitute General Partner as
provided in Article 9 or in accordance with Section 8.1(c).
Section 6.7. Valuation of Interests of General Partner. In the event of
removal of the General Partner with cause as hereinabove provided, the value of
the General Partner's Interest in the Partnership shall be the amount of its
Capital Account as shown on the audited financial statements of the Partnership
for the most recently-completed Fiscal Year of the Partnership, and such amount
shall be paid to the removed General Partner in 20 equal quarterly installments,
without interest, commencing at the end of the first full calendar quarter
following such removal.
Section 6.8. Additional Effects of Removal of General Partner. If any
General Partner is removed with cause, the removed General Partner shall receive
payment in cash of all amounts accrued and owing to such General Partner, as of
the date of removal including all loans made by such General Partner to the
Partnership.
Section 6.9. Tax Status of the Partnership. The General Partner
covenants and agrees to use its best efforts to establish and maintain the
classification of the Partnership as a partnership for federal income tax
purposes and not as an association taxable as a corporation.
ARTICLE VII.
ACCOUNTS
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Section 7.1. Books. The General Partner shall maintain complete and
accurate books of account of the Partnership's affairs at its principal office
as provided in Section 1.5. Such books of account shall include a list of the
names and addresses of all Limited Partners and the Interest held by each
Limited Partner. Each Limited Partner shall have the right to inspect the
Partnership's books and records (including the list of the names and addresses
of Limited Partners) at the offices of the General Partner upon reasonable
notice.
Section 7.2. Partners' Accounts. Separate Capital Accounts shall be
maintained for each Partner, including any permitted transferee of a Partner.
Section 7.3. Tax Returns and Information.
(a) Within a reasonable time following the end of each Partnership
Fiscal Year, the General Partner shall provide to each Limited Partner the
information concerning the Partnership necessary for the preparation of the
Limited Partner's income tax return(s). With the sole exception of mathematical
errors in computation, the information contained therein shall be deemed
conclusive and binding upon such Limited Partner unless written objection shall
be lodged with the General Partner within ninety (90) days after the giving of
such reports to such Limited Partner.
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(b) The General Partner shall prepare or cause to be prepared and filed
all federal, state and local tax returns of the Partnership (the "Returns") for
each year for which such Returns are required to be filed. The General Partner
may (but need not), in its sole and absolute discretion, make any elections
under the Code, and the General Partner shall be absolved from all liability for
any and all consequences to any previously admitted or subsequently admitted
Limited Partners resulting from making or failing to make any such election.
(c) The General Partner shall be the "tax matters partner," as such
term is defined in Section 6231(a)(7) of the Code.
ARTICLE VIII.
TRANSFERS
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Section 8.1. General Partner.
(a) No General Partner shall resign or withdraw from the Partnership as
a General Partner without (i) the approval, written consent or ratification of
the Limited Partners whose Interests aggregate more than fifty percent (50%) of
the aggregate limited partnership interests, (ii) providing one or more
successor General Partner in accordance with Section 8.1(c) (to whom the
resigning General Partner shall assign his Interest as General Partner in the
Partnership), and (iii) delivering to the Partnership an opinion of the
Partnership's counsel that such resignation or withdrawal would not subject the
Partnership to federal income taxation as an association taxable as a
corporation and not as a partnership (a "Permitted Withdrawal"). The withdrawing
General Partner shall receive upon such withdrawal an amount equal to the
balance of his Capital Account as of the end of the month in which such
Permitted Withdrawal takes place (based on an unaudited interim closing of the
Partnership's books as of the end of such month), such payment to be made
promptly following the end of such month. The withdrawing General Partner shall
not participate thereafter in any Profits or Losses of the Partnership accruing
after the date of resignation or withdrawal or have any rights and powers of a
General Partner hereunder. Except as provided in Section 8.1(f), no General
Partner may dispose of his Interest in the Partnership except to a successor
General Partner.
(b) Any other provision of this Agreement to the contrary
notwithstanding, if any General Partner resigns or withdraws from the
Partnership in violation of this Agreement, it shall not in respect of such
resignation or withdrawal be entitled to the return of, or any payment in
respect of, its Capital Contribution, and shall not be entitled to continue to
participate in any Profits or Losses of the Partnership accruing after the date
of such resignation or withdrawal or have any other rights and powers of a
General Partner hereunder. In the event of such resignation or withdrawal by a
General Partner, the Limited Partners, acting pursuant to Section 9.1, shall
elect whether to carry on the business of the Partnership by election of one or
more substitute General Partner.
(c) So long as there is at least one General Partner remaining, a new
General Partner may be admitted to the Partnership as a successor General
Partner. Such admission to the Partnership shall be effected by the approval,
written consent or ratification of the General Partner and of Limited Partners
whose Interests aggregate more than fifty percent (50%).
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(d) A General Partner may not transfer any or all of its interest in
the Partnership in a manner which will result in the "termination" of the
Partnership under Section 708 of the Code or constitute an event of default (or
an event which, upon notice of the passage of time, or both, would constitute a
default) under any agreement or instrument by which the Partnership borrowed
money or by which its property is encumbered, or which would result in such
General Partner (or its successor) owning an interest in the Partnership of less
than one percent (1%), and any attempt to do so shall be null and void.
(e) If a General Partner acquires an interest as a Limited Partner,
such person shall, with respect to such interest, enjoy all of the rights and be
subject to all of the obligations and duties of a Limited Partner to the extent
of such interest.
(f) Upon the death or incapacity of any individual General Partner,
such person's Interest in the Partnership shall become an Interest as a Limited
Partner, and such person's executors, administrators or legal representatives
shall become substituted Limited Partners within the meaning of Section 8.5.
Section 8.2. Transfer of Limited Partner's Interest.
(a) A Limited Partner has no right to withdraw or resign from the
Partnership. Subject to any restrictions on transferability by operation of law
or contained elsewhere in this Agreement, a Limited Partner may assign in
writing his Interest in the Partnership, provided:
(i) except as otherwise consented to by the General Partner, the
assignee consents in writing in form satisfactory to the General Partner to be
bound by the terms of this Agreement, including, without limitation, the
agreements contained in Article 10, as if it were the assignor;
(ii) the assignment will not jeopardize the status of the
Partnership as a partnership for federal income tax purposes, cause a
termination of the Partnership for the purposes of the then-applicable
provisions of the Code, or violate or cause the Partnership to violate, any
applicable law or governmental rule or regulation, including, without
limitation, any applicable federal or state securities law;
(iii) if requested by the General Partner, an opinion from
counsel to the assignee (which counsel and opinion shall be satisfactory to
counsel for the Partnership) is furnished to the Partnership stating that, in
the opinion of said counsel, such assignment would not jeopardize the status of
the Partnership as a partnership for federal income tax purposes, or cause a
termination of the Partnership for the purposes of the then applicable
provisions of the Code, or violate, or cause the Partnership to violate, any
applicable law or governmental rule or regulation, including without limitation,
any applicable federal or state securities law or cause the Partnership to be
subject to any reporting requirements of any applicable federal or state
securities law; and
(iv) the balance of this Section 8.2 is complied with, and
(unless otherwise consented to by the General Partner) the assignment is one of
the following:
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(1) The transfer by a Limited Partner of all or part of his
Partnership Interest, whether on death or by inter vivos transfer (in trust or
otherwise), to or for the benefit of a Family Member, or to a marital trust for
the surviving spouse of a Limited Partner, or the transfer by a Limited Partner
which is a trust to any Family Member who is a beneficiary thereof in accordance
with the terms of the trust instrument; provided, however, that no direct
assignment to a minor or incompetent is permitted except by will or intestate
succession; or
(2) Any transfer of the Partnership Interest of a deceased
or incapacitated Limited Partner by his or her executors, administrators or
legal representatives, as substituted Limited Partners under Section 8.1(f), to
accomplish any transfer under subparagraph (1) above; or
(3) The transfer by a Limited Partner of all or part of its
Limited Partnership Interest to any other Partner or Partners; or
(4) The transfer is subject to a right of first refusal
either by the Partnership or, if the Partnership declines to exercise such
right, by such Partners as the General Partner may designate.
By executing this agreement, each Limited Partner shall be
deemed to have consented to any assignment consented to by the General Partner.
(b) Each Limited Partner agrees, upon request of the General Partner,
to execute such certificates or other documents and perform such acts as the
General Partner deems appropriate to preserve the status of the Partnership as a
limited partnership after the completion of any assignment of an Interest in the
Partnership under the laws of the jurisdiction in which the Partnership is doing
business. For purposes of this Section 8.2, any transfer of an Interest in the
Partnership, whether voluntary or by operation of law, shall be considered an
assignment.
(c) Each assigning Limited Partner agrees to pay upon request of the
General Partner, prior to the time the General Partner consents to an assignment
of his or her Interest in the Partnership, all reasonable expenses, including
attorneys fees, incurred by the Partnership in connection with such assignment.
(d) The General Partner has the right to compel the Limted Partners to
exchange their partnership interests for shares of common stock of the General
Partner at any time after the date hereof, upon five business days' written
notice.
Section 8.3. Assignee's Rights. Any purported assignment of an Interest
in the Partnership which is not in compliance with this Agreement is hereby
declared to be null and void and of no force and effect whatsoever. A permitted
assignee of any Interest in the Partnership shall be entitled to receive
distributions of cash or other property from the Partnership and to receive
allocations of the income, gains, credits, deductions, Profits and Losses of the
Partnership attributable to such Interest after the effective date of the
assignment. The "effective date" of an assignment of an Interest in the
Partnership under the provisions of this Section 8.3, except as otherwise
consented to by the General Partner, shall be the first day of the first
calendar month following receipt by the General Partner of written notice of
assignment and fulfillment of all conditions precedent to such assignment
provided for in this Agreement.
12
Section 8.4. Satisfactory Written Assignment Required. Anything herein
to the contrary notwithstanding, both the Partnership and the General Partner
shall be entitled to treat the assignor of an Interest in the Partnership as the
absolute owner thereof in all respects, and shall incur no liability for
distributions made in good faith to such assignor, until such time as a written
assignment that conforms to the requirements of this Article 8 has been received
by, and accepted and recorded on the books of, the Partnership.
Section 8.5. Substituted Limited Partner. In addition to the
requirements of Section 8.2, the assignee of all or any part of an Interest in
the Partnership may become a substituted Limited Partner in place of or, in the
case of an assignment of part of an Interest, in addition to his or her
assignor, only upon the written consent of the General Partner, which consent
may be withheld in the sole and absolute discretion of the General Partner. By
executing this Agreement, each Limited Partner shall be deemed to have consented
to any substitution or addition of an assignee of an assigning Limited Partner
if permitted by the General Partner.
Section 8.6. Substitution Required for Vote. Unless and until an
assignee of all or part of an interest in the Partnership becomes a substituted
or additional Limited Partner, such assignee shall not be entitled to exercise
any vote with respect to such interest.
Section 8.7. Death, Bankruptcy or Incapacity of a Limited Partner. The
death, bankruptcy or adjudicated incompetency of a Limited Partner shall not
cause a dissolution of the Partnership, but the rights of such Limited Partner
to share in the Profits and Losses of the Partnership, to receive distributions
and to assign his or her interest in the Partnership pursuant to Section 8.2 or
to cause the substitution of a substitute Limited Partner pursuant to Section
8.5 shall, on the happening of such an event, devolve on his or her executor,
administrator, guardian or other legal representative ("Personal
Representative") for the purpose of settling his or her estate or administering
his or her property, subject to the terms and conditions of this Agreement, and
the Partnership shall continue as a limited partnership. Such Personal
Representative, however, shall become a substituted Limited Partner only as
provided in Section 8.5 with respect to an assignee of a Limited Partner's
interest in the Partnership, and any transfer by such Personal Representative
shall be made only as provided in Section 8.2. The estate of the Limited Partner
shall be liable for all the obligations of the deceased, bankrupt or
incapacitated Limited Partner under this Agreement.
ARTICLE IX.
DISSOLUTION
-----------
Section 9.1. Events of Dissolution. The Partnership shall continue
until the earliest to occur of the following events, which shall cause an
immediate dissolution of the Partnership:
(a) the removal, withdrawal, resignation, liquidation, dissolution,
bankruptcy, death or incapacity (an "Event of Withdrawal") of a General Partner
(subject to the right to continue the Partnership pursuant to this Section 9.1),
13
provided, however, that upon the occurrence of an Event of Withdrawal, the
Partnership shall not be dissolved if (1) at the time of such Event of
Withdrawal there is at least one remaining General Partner and such General
Partner continues to carry on the business of the Partnership, or (2) within
ninety (90) days after such Event of Withdrawal, all remaining Partners agree in
writing to continue the Partnership and to elect one or more successor General
Partners, effective as of the occurrence of such Event of Withdrawal (the
"Continuation"). Each Partner hereby agrees that if Partners holding a majority
of the remaining Interests in the Partnership (the "Majority Partners") agree to
the Continuation, the person elected as successor General Partner by the
Majority Partners shall be authorized to exercise the Power of Attorney provided
under Article 10 to execute a proxy under Section 12.3 to consent to the
Continuation on behalf of any Limited Partner who is not one of the Majority
Partners;
(b) the written consent of the General Partner and of the Limited
Partners whose Interests aggregate more than fifty percent (50%).
Section 9.2. Final Accounting. Upon the dissolution of the Partnership
and the failure to continue or reconstitute the Partnership as provided in
Section 9.1, a proper accounting shall be made from the date of the last
previous accounting to the date of dissolution.
Section 9.3. Liquidation. Upon the dissolution of the Partnership and
the failure to continue or reconstitute the Partnership as provided in Section
9.1, the General Partner or, if there is no General Partner, a person selected
by the Limited Partners whose Interests aggregate more than fifty percent (50%),
shall act as liquidator to wind up the affairs of the Partnership. The
liquidator shall have full power and authority to sell, assign and encumber any
or all of the Partnership's assets and to wind up and liquidate the affairs of
the Partnership in an orderly and business-like manner. All proceeds from
liquidation shall be distributed in the following order of priority: (i) to the
payment of the debts and liabilities of the Partnership and expenses of
liquidation, (ii) to the setting up of such reserves as the liquidator may
reasonably deem necessary for any contingent liability of the Partnership, and
(iii) the balance to the Partners in accordance with Section 5.2.
Section 9.4. Distribution in Kind. If the liquidator shall determine
that a portion of the Partnership's assets should be distributed in kind to the
Partners, such person shall obtain an independent appraisal of the fair market
value of each such asset as of a date reasonably close to the date of
liquidation. Any unrealized appreciation or depreciation with respect to such
assets shall be allocated among the Partners (in accordance with Article 5,
assuming that the property were sold for the appraised value) and distribution
of any such assets in kind to a Partner shall be considered a distribution of an
amount equal to the assets' appraised fair market value for purposes of Sections
5.2 and 9.3.
Section 9.5. Cancellation of Certificate. Upon the completion of the
distribution of Partnership assets as provided in Section 9.3 and 9.4, the
Partnership shall be terminated and the person acting as liquidator shall cause
the cancellation of the Certificate of Limited Partnership and shall take such
other actions as may be necessary or appropriate to terminate the Partnership.
14
ARTICLE X.
POWER OF ATTORNEY
-----------------
Section 10.1. Appointment of the General Partner. Each Limited Partner,
by the execution of this Agreement, does irrevocably constitute and appoint the
General Partner as his true and lawful attorney, in his name, place and xxxxx,
to execute, acknowledge, swear to, deliver, record and file (i) this Agreement
and any amendment to this Agreement, (ii) the original Certificate and all
amendments thereto required or permitted by law or the provisions of this
Agreement, (iii) all certificates and other instruments deemed necessary or
advisable by the General Partner to carry out the provisions of this Agreement
or to qualify or continue the Partnership as a limited partnership or
partnership wherein the Limited Partners have limited liability in the states
where the Partnership may be doing business, (iv) all instruments that the
General Partner deems appropriate to reflect a change or modification of this
Agreement or the Partnership in accordance with this Agreement, including,
without limitation, the substitution of assignees as substituted Limited
Partners pursuant to Section 8.5, (v) all conveyances and other instruments
deemed necessary or advisable by the General Partner to effect the dissolution
and termination of the Partnership, (vi) all fictitious or assumed name
certificates required or permitted to be filed on behalf of the Partnership,
(vii) a proxy under Section 12.3 giving such Limited Partner's consent to a
Continuation pursuant to Section 9.1, and (viii) all other instruments or papers
which may be required or permitted by law to be filed on behalf of the
Partnership.
Section 10.2. Duration of Power. The power of attorney granted pursuant
to Section 10.1: (i) is coupled with an interest and shall be irrevocable and
survive the death, incompetency, bankruptcy or dissolution of the grantor; (ii)
may be exercised by the General Partner either by signing separately as
attorney-in-fact for each Limited Partner or, after listing all of the Limited
Partners executing an instrument, by signature of the General Partner acting as
attorney-in-fact for all of them; and (iii) shall survive the delivery of an
assignment by a Limited Partner of the whole or any fraction of his or her
interest in the Partnership except that, where the assignee of the whole of such
Limited Partner's interest in the Partnership has been approved by the General
Partner for admission to the Partnership as a substituted Limited Partner the
power of attorney of the assignor shall survive the delivery of such assignment
for the sole purpose of enabling the General Partner to execute, acknowledge,
swear to, deliver, record and file any instrument necessary or appropriate to
effect such substitution. In the event of any conflict between this Agreement
and any document, instrument, conveyance or certificate executed or filed by the
General Partner pursuant to such power of attorney, this Agreement shall
control.
Section 10.3. Further Assurances. Each Limited Partner shall execute
and deliver to the General Partner, within five (5) days after the receipt of
the General Partner's request therefore, such further designations, powers of
attorney and other instruments as the General Partner deems necessary or
appropriate to carry out the provisions of this Agreement.
15
ARTICLE XI.
AMENDMENTS TO AGREEMENT
-----------------------
Amendments to this Agreement which are of an inconsequential nature (as
reasonably determined by the General Partner) and do not affect the rights of
the Limited Partners in any material respect, or which are contemplated by this
Agreement (including, without limitation, those contemplated by Article 8), may
be made by the General Partner through use of the power of attorney granted in
Article 10. Any other amendments shall be made upon the approval or written
consent of the Partners holding seventy-five percent (75%) of the Interests in
the Partnership. Notwithstanding anything to the contrary contained in the
foregoing and except where approval of the Limited Partners is specifically
provided for elsewhere in this Agreement (including, without limitation, in
Sections 8.1 and 9.1), without the approval or written consent of each of the
Limited Partners, no amendment shall remove the General Partner, limit the
powers of the General Partner, cause the Partnership to become a general
partnership, alter the liability of any Limited Partner, alter any Limited
Partner's percentage interest in Profits and Losses or distributions or alter
the provisions of this Article 11. The General Partner shall give written
notice, in accordance with Section 13.1 hereof, to all Limited Partners promptly
after any amendment has become effective, other than amendments solely for the
purposes of the admission of substituted Limited Partners.
ARTICLE XII.
MEETINGS OF THE PARTNERS
------------------------
Section 12.1. Meetings. All meetings of the Limited Partners, for any
purpose, may be called by the General Partner.
Section 12.2. Proxy. Each Limited Partner may authorize any person or
persons to act for him by proxy in all matters in which a Limited Partner is
entitled to participate. Every proxy must be signed by the Limited Partner or
his attorney in fact (other than the General Partner pursuant to the general
power of attorney granted herein, except as otherwise provided in clause (vii)
of Section 10.1). No proxy shall be valid after the expiration of six (6) months
from the date thereof. Every proxy shall be revocable by the Limited Partner
executing it.
Section 12.3. Written Consents. Whenever Limited Partners are required
or permitted to take any action by vote, such action may be taken by a written
consent setting forth the action so taken and signed by the Limited Partners
whose Interests aggregate at least the minimum level that would be necessary to
authorize or take such action.
ARTICLE XIII.
NOTICES
-------
Section 13.1. Method for Notices. All notices hereunder (i) shall be
sent by first class mail to the address set forth for the addressee herein
(except that any Partner may from time to time give notice changing his address
for that purpose), and (ii) shall be effective on the date of mailing.
16
Section 13.2. Computation of Time. In computing any period of time
under this Agreement, the day of the act, event or default from which the
designated period of time begins to run shall not be included. The last day of
the period so computed shall be included, unless it is a Saturday, Sunday or
legal holiday, in which event the period shall run until the end of the next day
which is not a Saturday, Sunday or legal holiday.
ARTICLE XIV.
GENERAL PROVISIONS
------------------
Section 14.1. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof,
and supersedes any prior agreement or understanding among the parties hereto
with respect to the subject matter hereof.
Section 14.2. Amendment; Waiver. Except as provided otherwise herein,
this Agreement may not be amended nor may any rights hereunder be waived except
by an instrument in writing signed by the party sought to be charged with such
amendment or waiver.
Section 14.3. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
giving effect to the provisions, policies or principles thereof relating to
choice or conflict of laws.
Section 14.4. Binding Effect. Except as provided otherwise herein, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective legal representatives, heirs, successors and
assigns.
Section 14.5. Counterparts. This Agreement may be executed either
directly or by an attorney-in-fact, in any number of counterparts of the
signature page, each of which shall be considered an original.
Section 14.6. Separability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 14.7. Headings. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
Section 14.8. Gender and Number. Pronouns of the masculine gender are
used in this Agreement for convenience of expression only, and all pronouns
shall be deemed to include their masculine, feminine and neuter counterparts
whenever the context requires. Whenever required by the context, singular terms
shall include the plural and plural terms shall include the singular.
Section 14.9. Waiver of Partition. Each Partner hereby irrevocably
waives, during the term of the Partnership, any right that he may have to
maintain any action for partition with respect to any Partnership property.
17
IN WITNESS WHEREOF the parties hereto have executed this Agreement,
either directly or by an attorney-in-fact, to be effective as of the day and
year first above written. This Agreement may be executed in counterparts, all of
which taken together shall constitute the entire Agreement.
General Partner:
-----------------------------------------
By:
-------------------------------------
Name:
---------------------
Title:
---------------------
Limited Partners:
By:
-------------------------------------
--------------------
By:
-------------------------------------
--------------------
By:
-------------------------------------
--------------------
By:
-------------------------------------
--------------------
By:
-------------------------------------
--------------------
18
SCHEDULE A
PARTNERSHIP INTERESTS
---------------------
AS OF NOVEMBER 4, 2005
----------------------
General Partner: Interest
---------------- --------
------------------ -----
------------------
------------------
Limited Partner:
----------------
------------------ ------
------------------ ------
------------------ ------
------------------ ------
------------------ ------
19
SCHEDULE B
CAPITAL CONTRIBUTIONS
Amount
Partners or Value (US$)
-------- --------------
General Partner:
----------------
------------------ ------------
Limited PartnerS:
----------------
------------------ ------------
------------------ ------------
------------------ ------------
------------------ ------------
------------------ ------------
20
