Exhibit 3.28
MAXI DRUG SOUTH, L.P.
AGREEMENT OF LIMITED PARTNERSHIP
Dated as of January 8, 2002
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MAXI DRUG SOUTH, L.P.
AGREEMENT OF LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP, dated as of January 8, 2002 (this
"Agreement"), of Maxi Drug South, L.P. (the "PARTNERSHIP") is entered into by
and among Maxi Drug, Inc., a Delaware corporation, as general partner (the
"GENERAL PARTNER"), and Maxi Drug North, Inc., a Delaware corporation and the
other signatories hereto from time to time admitted as limited partners (the
"LIMITED PARTNERS").
RECITAL:
WHEREAS, the General Partner and the Limited Partners desire to form a
limited partnership under and pursuant to the Delaware Revised Uniform Limited
Partnership Act, 6 DEL. C. Section 17-101 ET SEQ. (as from time to time amended
and including any successor statute of similar import, the "ACT"):
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Certain capitalized terms used in this Agreement shall have the meanings
set forth below or in the Section of this Agreement referred to below:
"ACCOUNTANTS" shall mean Xxxxxx Xxxxxxxx XXX, Xxxxxx, Xxxxxxxxxxxxx or any
successor firm of independent certified public accountants selected by the
General Partner.
"ACT" - Recital.
"ADJUSTED CAPITAL ACCOUNT BALANCE" shall mean, with respect to any Partner
for any Fiscal Period, the balance, if any, in such Partner's Capital Account as
of the end of such Fiscal Period, after giving effect to the following
adjustments: (i) credit to such Capital Account any amounts that such Partner is
obligated to restore under this Agreement or otherwise, or is deemed obligated
to restore as described in the penultimate sentences of Regulations Section
1.704-2(g)(l) and Regulations Section 1.704-2(i)(5); and (ii) debit to such
Capital Account the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted
Capital Account Balance is intended to comply with the provisions of Regulations
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"AFFILIATE" shall mean, as to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person,
which shall include any other Person that owns beneficially, directly or
indirectly, 25% or more of the outstanding
capital stock, shares or equity interests of such Person or of any other Person
controlling, controlled by or under common control with such Person.
"AGREEMENT" - Preamble.
"BOOK GAIN" or "BOOK LOSS" shall mean the gain or loss recognized by the
Partnership for book purposes in any Fiscal Period by reason of the sale,
exchange or other disposition of any Partnership asset. Such Book Gain or Book
Loss shall be computed by reference to the Book Value of such asset as of the
date of such sale, exchange or other disposition, rather than by reference to
the tax basis of such asset as of such date, and each and every reference herein
to "gain" or "loss" shall be deemed to refer to Book Gain or Book Loss, rather
than to tax gain or tax loss, unless the context manifestly requires otherwise.
"BOOK VALUE" of an asset shall mean, as of any particular date, the value
at which the asset is properly reflected on the books and records of the
Partnership as of such date. The initial Book Value of each asset shall be its
cost, unless such asset was contributed to the Partnership by a Partner, in
which case the initial Book Value shall be the fair market value of such asset
as stated in Section 3.1 (or, if no such value is stated in Section 3.1, as
otherwise reasonably determined by the General Partner), and such Book Value
shall thereafter be adjusted for Depreciation with respect to such asset rather
than for the cost recovery deductions to which the Partnership is entitled for
income tax purposes with respect thereto. The Book Values of all Partnership
assets shall be adjusted to equal their respective fair market values, as
determined by the General Partner, as of the following times: (i) the
acquisition of an additional interest in the Partnership by any new or
existing Partner in exchange for more than a de minimis additional Capital
Contribution; (ii) the distribution by the Partnership to a Partner of more than
a de minimis amount of Partnership assets, including money, if, as a result of
such distribution, such Partner's interest in the Partnership is reduced; and
(iii) except as provided in Regulations Section 1.704-1(b)(2)(iv)(l), the
liquidation of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g).
"BUSINESS" - Section 2.6.
"BUSINESS DAY" shall mean a day on which banks are open for business in
Providence, Rhode Island.
"CAPITAL ACCOUNT" - Section 3.3.
"CAPITAL CONTRIBUTION" shall mean the amount of cash and the agreed fair
market value of any property contributed to the Partnership by a Partner.
"CERTIFICATE" - the Certificate of Limited Partnership of the Partnership
as filed with the Secretary of State of the State of Delaware, as it shall be
amended and in effect from time to time.
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"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and any subsequent federal law of similar import, and, to the extent
applicable, any Regulations promulgated thereunder.
"DEPRECIATION" shall mean, for each Fiscal Period, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such year or other period for federal income tax
purposes, except that if the Book Value of an asset differs from its adjusted
basis for federal income tax purposes at the beginning of any such year or other
period, Depreciation shall be an amount that bears the same relationship to the
Book Value of such asset as the depreciation, amortization, or other cost
recovery deduction computed for tax purposes with respect to such asset for the
applicable period bears to the adjusted tax basis of such asset at the beginning
of such period, or if such asset has a zero adjusted tax basis, Depreciation
shall be an amount determined under any reasonable method selected by the
General Partner.
"EFFECTIVE DATE" shall mean the date of this Agreement.
"ENTITY" shall mean any general partnership, limited partnership, limited
liability partnership, corporation, joint venture, limited liability company,
trust, business trust, cooperative or association.
"FISCAL PERIOD" shall mean an accounting period for which the Profit or
Loss of the Partnership is computed. The first fiscal period of the Partnership
shall commence on the date hereof. Each Fiscal Period thereafter shall commence
on the day immediately following the last day of the immediately preceding
Fiscal Period. Each Fiscal Period shall end on the earliest to occur after the
commencement of such Fiscal Period of (i) the end of a fiscal year of the
Partnership, (ii) immediately prior to (a) the "liquidation" (within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(g)) of any Partner's interest in the
Partnership, or (b) a change in the interest of any Partner in the Partnership,
or (iii) the date on which the Partnership is terminated pursuant to the
provisions of Article 10.
"GENERAL PARTNER" - shall mean Maxi Drug, Inc., a Delaware corporation, or
any Person who subsequently becomes an additional or substitute General Partner
in accordance with this Agreement, in such Person's capacity as a general
partner of the Partnership.
"LIMITED PARTNERS" shall mean Maxi Drug North, Inc., a Delaware
corporation, together with any Person who becomes a substituted or additional
Limited Partner as provided herein and is listed as a Limited Partner of the
Partnership in the books and records of the Partnership.
"NOTICE" shall have the meaning set forth in Section 11.1.
"PARTNER" shall mean any General or Limited Partner.
"PARTNERSHIP" shall mean the limited partnership formed and operated in
accordance
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with this Agreement, as said limited partnership may from time to time be
constituted.
"PERCENTAGE INTEREST" shall mean the percentage interest of a Partner in
the Partnership at any particular time (but excluding any claims which such
Partner may have against the Partnership as a creditor), as from time to time
reflected on Schedule A hereto, as amended.
"PERSON" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such individual
or Entity where the context so admits.
"PROFIT" and "LOSS" shall mean, for each Fiscal Period, an amount equal to
the Partnership's taxable income or loss for such year or period, determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, 1oss, or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:
(i) any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profit or Loss
pursuant to this provision shall be added to such taxable income or loss;
(ii) any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations,
and not otherwise taken into account in computing Profit or Loss pursuant
to this provision, shall be subtracted from such taxable income or loss;
(iii) Book Gain or Book Loss from the sale or other disposition of any
asset of the Partnership shall be taken into account in lieu of any tax
gain or tax loss recognized by the Partnership by reason of such sale or
other disposition;
(iv) in lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Fiscal Period,
computed as provided in this Agreement; and
(v) excluding any amounts specially allocated under Section 5.5 or
5.6,
If the Partnership's taxable income or loss for such Fiscal Period, as
adjusted in the manner provided above, is a positive amount, such amount shall
be the Partnership's Profit for such Fiscal Period, and if negative, such amount
shall be the Partnership's Loss for such Fiscal Period.
In the event that the Book Value of the Partnership assets is adjusted
pursuant to the last sentence of the definition of Book Value, the amount of
such adjustment shall be included in
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computing Profit or Loss. If any Partnership asset is distributed in kind
(whether in connection with the liquidation of the Partnership or otherwise),
the Partnership shall be deemed to have realized Profit or Loss thereon in the
same manner as if the Partnership had sold such asset for an amount equal to
its fair market value on the date of distribution, as determined by the General
Partner.
"REGULATIONS" shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
"REGULATORY ALLOCATIONS" shall have the meaning set forth in Section 5.6.
ARTICLE 2.
FORMATION OF LIMITED PARTNERSHIP
2.1. FORMATION. The parties, by execution of this Agreement, hereby
enter into and join together in, and do hereby form, the Partnership as a
limited partnership under and pursuant to the Act. Each party hereto represents
and warrants that it is duly authorized to join in this Agreement and that the
Person executing this Agreement on its behalf is duly authorized to do so.
2.2. PARTNERSHIP NAME. The name of the Partnership shall be "Maxi Drug
South, L.P.". The Business of the Partnership shall be conducted under such name
or such other name or names as the General Partner shall from time to time
select.
2.3. THE CERTIFICATE, ETC. The Partners hereby agree to execute, and the
General Partner agrees to file and record, all such certificates and documents,
including amendments to the Certificate, and to do such other acts as may be
appropriate to comply with all requirements for the formation, continuation and
operation of a limited partnership, the ownership of property, and the conduct
of business under the laws of the State of Delaware or Rhode Island and any
other jurisdiction in which the Partnership may own property or conduct
business, including, without limitation, qualification of the Partnership as a
foreign limited partnership in any state in which such qualification is
required.
2.4. PRINCIPAL BUSINESS OFFICE, REGISTERED OFFICE AND REGISTERED AGENT.
The principal business office of the Partnership will be located at 00 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxx Xxxxxx 00000, or at such other location as may hereafter
be determined by the General Partner. The registered office of the Partnership
will be 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000. The
registered agent for service of process on the Partnership will be Corporation
Service Company, whose address is 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000,
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Xxxxxxxxxx, Xxxxxxxx 00000. The registered office and the registered agent of
the Partnership may be changed by the General Partner from time to time in
accordance with the then applicable provisions of the Act and any other
applicable laws. The Limited Partners shall be notified by the General Partner
of any change in such principal business office, registered office or registered
agent for service of process within fifteen (15) Business Days of the date of
such change.
2.5. TERM OF PARTNERSHIP. The term of the Partnership commenced on the
date of the initial filing of the Certificate with the office of the Secretary
of State of the State of Delaware, and unless the Partnership is sooner
dissolved and terminated pursuant to the provisions of Section 10.1, shall be
perpetual.
2.6. PURPOSES. The purposes of the Partnership are to acquire, develop,
improve, lease, maintain, own, operate, manage, mortgage, hold, sell, exchange,
dispose of and otherwise deal in and with the business of owning and operating
pharmacies, and to conduct all activities necessary or convenient in connection
therewith (such activities, the "BUSINESS").
2.7. POWERS. In furtherance of its purposes, but subject to all of the
provisions of this Agreement, the Partnership shall have the power and is hereby
authorized:
(a) to acquire, including from Affiliates, real and/or personal
property as may be necessary, appropriate, convenient or incidental to the
accomplishment of the purposes of the Partnership;
(b) to borrow money and issue evidences of indebtedness,
including from and to Affiliates, in furtherance of any or all of the purposes
of the Partnership, and secure the same by mortgage, pledge or other lien on any
assets of the Partnership;
(c) to invest, including in Affiliates, any funds of the
Partnership pending distribution or payment of the same pursuant to the
provisions of this Agreement;
(d) to prepay in whole or in part, refinance, recast, increase,
modify or extend any indebtedness of the Partnership, and in connection
therewith execute any extensions, renewals or modifications relating thereto;
(e) to engage Persons to provide services to the Partnership and
to enter into contracts and agreements with such Persons, including Affiliates,
in furtherance of the purposes of the Partnership;
(f) to enter into partnerships or other ventures with other
Persons, including Affiliates, in furtherance of the purposes of the
Partnership; and
(g) to do such other things and engage in such other activities
related to the foregoing as may be necessary, convenient or advisable with
respect to the conduct of the
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Business of the Partnership, and have and exercise all of the powers and rights
conferred upon limited partnerships formed pursuant to the Act.
ARTICLE 3.
CAPITALIZATION
3.1. CAPITAL CONTRIBUTIONS.
(a) GENERAL PARTNER. The General Partner has, as of the
Effective Date, transferred to the Partnership certain assets which shall
constitute the General Partner's initial Capital Contribution hereunder, in
exchange for the Percentage Interest reflected on Schedule A hereto.
(b) LIMITED PARTNER. The Limited Partner has, as of the
Effective Date, transferred to the Partnership certain assets which shall
constitute the Limited Partner's initial Capital Contribution hereunder, in
exchange for the Percentage Interest reflected on Schedule A hereto.
3.2. ADDITIONAL CAPITAL CONTRIBUTIONS; LOANS. The Partners may, from
time to time, if the General Partner determines that additional funds or
property are required by the Partnership for any reason, make additional Capital
Contributions to the Partnership and correspondingly amend the Percentage
Interests reflected on Schedule A hereto. The General Partner may, if it deems
it appropriate to do so, make loans to the Partnership or cause or permit
Affiliates of the General Partner to make loans to the Partnership, on such
terms as the General Partner deems advisable.
3.3. CAPITAL ACCOUNTS. A separate capital account (a "CAPITAL ACCOUNT")
shall be established and maintained for each Partner, including any substituted
or additional Partner who shall hereafter acquire an interest in the
Partnership, in accordance with the following provisions:
(a) To each Partner's Capital Account there shall be credited
the amount of cash and the fair market value of any other property actually
contributed to the Partnership by such Partner in accordance with Section 3.1 or
3.2, such Partner's allocable share of Profit, the amount of any Partnership
liabilities that are assumed by such Partner or that are secured by any
Partnership property distributed to such Partner, and (to the extent not already
included in Profit) any items in the nature of income or gain which are
specially allocated to such Partner pursuant to Section 5.5 or 5.6 hereof.
(b) To each Partner's Capital Account there shall be debited the
amount of cash and the fair market value of any Partnership property distributed
to such Partner pursuant to any provision of this Agreement (but excluding
amounts paid to a Partner in its capacity as a creditor of the Partnership),
such Partner's allocable share of Loss, the amount of any liabilities of such
Partner that are assumed by the Partnership or that are secured by any property
contributed by such Partner to the Partnership, and (to the extent not already
included in Loss) any items in the nature of expenses or losses which are
specially allocated to such Partner pursuant to Section 5.5 or 5.6 hereof.
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(c) The provisions of this Agreement relating to the maintenance
of Capital Accounts are intended to comply with Regulations Sections 1.704-1(b)
and 1.704-2, and shall be interpreted and applied in a manner consistent with
such Regulations.
(d) A Partner shall not be entitled to withdraw any part of the
Capital Account of such Partner or to receive any distributions from the
Partnership except as provided in Article 6; nor shall a Partner be entitled to
make any loan or Capital Contribution to the Partnership other than as expressly
provided herein. No loan made to the Partnership by any Partner shall constitute
a Capital Contribution to the Partnership for any purpose, and no payments
of interest, principal or premium thereon shall constitute a distribution out of
a Capital Account.
(e) Except as expressly required by this Agreement or the Act,
no Partner shall have any liability for the return of the Capital Contribution
of any other Partner. A Partner who has more than one interest in the
Partnership shall have a single Capital Account that reflects all such
interests, regardless of the class of interest owned and regardless of the time
or manner in which the interests were acquired.
3.4. TRANSFER OF CAPITAL ACCOUNTS. In the event all or any portion of an
interest in the Partnership is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent it relates to the transferred interest in the Partnership, and
reference in this Agreement to a Capital Contribution of or an allocation or
distribution to a transferee Partner shall include a Capital Contribution of or
allocation or distribution previously made to its transferor Partner on account
of the transferred Partnership interest.
3.5. DEFICIT CAPITAL ACCOUNTS. Except as required by the Act, no Partner
with a deficit in its Capital Account shall be obligated to restore such deficit
balance or make a Capital Contribution to the Partnership solely by reason of
such deficit.
3.6. ADDITIONAL LIMITED PARTNERS. The General Partner may admit any
additional limited partners to the Partnership from time to time on terms and
conditions that the General Partner deems fair and reasonable, in each such
case without the prior consent of the Limited Partners.
ARTICLE 4.
BOOKS; REPORTS; TAX ELECTIONS; ACCOUNTS
4.1. BOOKS AND RECORDS. The General Partner shall keep, or cause to be
kept, complete and accurate books of account and records of the Partnership. The
books of the Partnership shall be kept on the accrual basis of accounting and
all such books and records shall at all times be maintained or made available at
the principal business office of the Partnership. The General Partner shall also
maintain all such other books and records as shall from time to time be required
by the Act.
4.2. FILING OF RETURNS AND OTHER WRITINGS; TAX MATTERS PARTNER. The
General Partner shall
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cause the preparation and timely filing of all Partnership tax returns and
shall, on behalf of the Partnership, timely file all other writings required by
any governmental authority having jurisdiction to require such filing. The
General Partner shall serve as the "tax matters partner" for purposes of Section
6231 of the Code, and shall make such tax elections and other determinations as
it deems appropriate.
4.3. FISCAL YEAR. Except as may be otherwise determined from time to
time by the General Partner or as otherwise required by the Code, the fiscal
year of the Partnership shall end on May 31 of each year.
ARTICLE 5.
ALLOCATIONS
5.1. ALLOCATION OF PROFIT AND LOSS. Subject to the special allocations
set forth in Section 5.5 or 5.6, Profit and Loss of the Partnership for each
Fiscal Period shall be allocated in accordance with each Partner's Percentage
Interest.
5.2. ALLOCATIONS FOR TAX AND BOOK PURPOSES. Except as otherwise
provided herein, any allocation to a Partner for a Fiscal Period of a portion of
the Profit or Loss, or of a specially allocated item, shall be determined to be
an allocation to that Partner of the same proportionate part of each item of
income, gain, loss, deduction, actual or deemed Code Section 705(a)(2)(B)
expenditure, tax exempt income or credit, as the case may be, as is earned,
realized or available by or to the Partnership for federal (and, if applicable,
state and local income) tax purposes.
5.3. CERTAIN ACCOUNTING MATTERS. For purposes of determining the Profit,
Loss or any other items allocable to any period, Profit, Loss and any such other
items shall be allocated on a daily, monthly or other basis, as determined by
the General Partner using any permissible method under Section 706 of the Code
and the Regulations thereunder.
5.4. TAX ALLOCATIONS: CODE SECTION 704(c). In accordance with Code
Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction
with respect to any property contributed to the capital of the Partnership
shall, solely for income 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 fair market value at the
time of contribution. In the event that the Book Value of any Partnership asset
is subsequently adjusted in accordance with the last sentence of the definition
of Book Value, any allocation of income, gain, loss and deduction with respect
to such asset shall thereafter take account of any variation between the
adjusted tax basis of the asset to the Partnership and its Book Value in the
same manner as under Section 704(c) of the Code and any Regulations promulgated
thereunder. Any elections or other decisions relating to such allocations shall
be made by the General Partner in its sole and absolute discretion. Allocations
pursuant to this Section are solely for purposes 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 Profit, Loss or distributions pursuant
to any provision of this Agreement.
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5.5. COMPLIANCE WITH SECTION 704(b).
(a) QUALIFIED INCOME OFFSET. If any Partner unexpectedly
receives an adjustment, allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and
gain shall be specially allocated to such Partner in accordance with the
requirements of Regulations Section 1.704-1(b)(2)(ii)(d). This Section 5.5(a) is
intended to comply with the qualified income offset provision of such
Regulations Section, and shall be interpreted consistently therewith.
(b) GROSS INCOME ALLOCATION. If any Partner would otherwise have
an Adjusted Capital Account Balance deficit as of the last day of any Fiscal
Period, items of income and gain of the Partnership shall be specially allocated
to such Partner (in the manner specified in Section 5.5(a) hereof) so as to
eliminate such Adjusted Capital Account Balance deficit as quickly as possible,
provided that an allocation pursuant to this Section 5.5(b) shall be made only
if and to the extent that such Partner would have an Adjusted Capital Account
Balance deficit after all other allocations provided for in this Agreement have
been tentatively made as if this Section 5.5(b) were not in this Agreement.
(c) LIMITATION ON LOSS ALLOCATIONS. No item of deduction or loss
of the Partnership shall be allocated to a Partner if such allocation would
cause or increase an Adjusted Capital Account Balance deficit. In the event that
some but not all of the Partners would have Adjusted Capital Account Balance
deficits as a result of an allocation of Loss pursuant to this Article 5, the
limitation set forth in this Section 5.5(c) shall be applied on a Partner by
Partner basis so as to allocate the maximum permissible Loss to each Partner
under Regulations Section 1.704-1(b)(2)(ii)(d).
(d) MINIMUM GAIN CHARGEBACK. Notwithstanding any other provision
of this Article 5, if there is a net decrease in partnership minimum gain or
partner minimum gain (as such terms are defined in Regulations Section 1.704-2)
during any Fiscal Period, prior to any other allocation pursuant hereto, items
of Partnership income and gain for such Fiscal Period (and, if necessary, for
subsequent fiscal years or periods) shall be specially allocated among the
Partners in accordance with Regulations Sections 1.704-2(f) and (i). The items
to be so allocated shall be determined in accordance with Regulations Sections
1.704-2(f)(6) and (j)(2).
(e) PARTNER NONRECOURSE DEDUCTIONS. "Partner nonrecourse
deductions" (as such term is defined in Regulations Section 1.704-2(i)) for any
Fiscal Period shall be specially allocated to the Partners in accordance with
the requirements of such Regulations Section.
(f) NONRECOURSE DEDUCTIONS. "Nonrecourse deductions" (as such
term is defined in Regulations Section 1.704-2(b)) for any Fiscal Period shall
be allocated among the Partners in proportion to their Percentage Interests or
as otherwise required by such Regulations Section.
5.6. CURATIVE ALLOCATIONS. The allocations set forth in Section 5.5 (the
"REGULATORY ALLOCATIONS") are intended to comply with certain requirements of
Regulations Sections 1.704-
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1(b) and 1.704-2. The Regulatory Allocations may not be consistent with the
manner in which the Partners intend to divide Profits, Losses and similar items.
Accordingly, Profit, Loss and other items will be reallocated among the Partners
(in the same Fiscal Period, and to the extent necessary, in subsequent Fiscal
Periods) in a manner consistent with Regulations Sections 1.704-1(b) and 1.704-2
so as to prevent the Regulatory Allocations from distorting the manner in which
Profit, Loss and other items are intended to be allocated among the Partners
pursuant to Article 5.
ARTICLE 6.
DISTRIBUTIONS
6.1. DISTRIBUTIONS OTHER THAN UPON LIQUIDATION. The General Partner
shall make distributions to the Partners in proportion to the Partners'
Percentage Interests, in cash or property, at such times and in such amounts as
the General Partner shall determine, provided that no Partner's Adjusted Capital
Account Balance shall fall below zero (or become more negative) as a result of
such distribution.
6.2. DISTRIBUTIONS IN LIQUIDATION. At the close of the term of the
Partnership, or upon its earlier liquidation and dissolution in accordance with
Section 10.1, the Partnership's assets, including the proceeds from the sale,
exchange or other disposition thereof, shall be applied and distributed in the
following order of priority:
(i) to the payment of any debts and liabilities of the
Partnership (including debts and liabilities to Partners);
(ii) to the setting up of reserves to provide for any contingent,
conditional or unmatured liabilities or obligations of the Partnership; and
(iii) to the Partners in proportion to and to the extent of the
positive balances of the Capital Accounts of the Partners (after reflecting
in such Capital Accounts all adjustments thereto necessitated by all
Partnership transactions for the fiscal year or other period of the
Partnership in which the liquidation of the Partnership occurs prior to or
simultaneously with such distribution).
All payments under this Section 6.2 shall be made as soon as reasonably
practicable and in any event by the end of the fiscal year in which such
liquidation or winding up occurs or, if later, within ninety (90) days after the
date of such liquidation or the date such winding up occurs.
ARTICLE 7.
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
7.1. LIMITED LIABILITY. No Limited Partner shall be personally liable
for any of the debts, liabilities, obligations or contracts of the Partnership,
nor shall a Limited Partner be required to
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lend any funds to the Partnership. A Limited Partner shall only be liable to
make payment of such Limited Partner's Capital Contributions as and when due
hereunder. If and to the extent a Limited Partner's Capital Contributions shall
be fully paid, the Limited Partner shall not, except as required by the express
provisions of the Act regarding repayment of sums wrongfully distributed to the
Limited Partner, be required to make any further contributions to the
Partnership.
7.2. NO CONTROL. No Limited Partner shall participate in the management
or control of the business of, or transact any business for, the Partnership. No
Limited Partner shall have the power to sign for or bind the Partnership. No
Limited Partner shall have the right to have the Partnership dissolved or
liquidated or to have its Capital Contributions returned except as provided in
this Agreement.
ARTICLE 8.
RIGHTS AND OBLIGATIONS OF GENERAL PARTNER
8.1. IN GENERAL. The General Partner shall have complete and exclusive
discretion in the management and control of the affairs and business of the
Partnership and all powers necessary, desirable, convenient or appropriate to
carry out the purposes, conduct the business, exercise the powers and administer
the affairs of the Partnership. The General Partner shall possess and enjoy,
subject to the provisions of this Agreement, with respect to the Partnership all
of the rights and powers of a partner of a partnership without limited partners
to the extent permitted by Delaware law.
8.2. DELEGATION OF POWERS AND DUTIES. Except as otherwise provided under
this Agreement or by law, the General Partner may delegate all or any of its
duties to any of its officers, employees, partners, and agents and in
furtherance of such delegation may elect, employ, contract or deal with any
Person (including any Affiliate of the General Partner).
8.3. RELIANCE BY THIRD PARTIES. No person dealing with the Partnership,
or its assets, whether as mortgagee, assignee, purchaser, lessee, grantee or
otherwise shall be required to investigate the authority of the General Partner
in purchasing, selling, assigning, leasing, mortgaging, conveying or otherwise
dealing with any Partnership asset nor shall any such purchaser, seller,
assignee, lessee, mortgagee, grantee or other Person entering into a contract
with the Partnership be required to inquire as to whether the approval of the
Partners for any such purchase, sale, assignment, lease, mortgage, transfer or
other transaction has been first obtained. Any such Person shall be conclusively
protected in relying upon a certificate of authority or any other material fact
signed by the General Partner, or in accepting any instrument signed by the
General Partner in the name and on behalf of the Partnership or the General
Partner.
8.4. LIABILITY FOR ACTS OR OMISSIONS AND INDEMNIFICATION. Subject to the
fiduciary duties of a general partner to a limited partner as provided by law,
the General Partner and its Affiliates shall have no liability to the
Partnership or to any Partner for any loss suffered by the Partnership which
arises out of any action or inaction of the General Partner or its Affiliates if
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the General Partner or its Affiliates, in good faith, determined that such
course of conduct is in, or not opposed to, the best interest of the
Partnership, and such course of conduct did not constitute gross negligence or
willful misconduct of the General Partner or its Affiliates. To the fullest
extent permitted by law, the General Partner and its Affiliates shall be
indemnified by the Partnership against any losses, judgments, liabilities,
expenses and amounts paid in settlement of any claims sustained by them in
connection with the Partnership, provided that the same were not the result of
gross negligence or willful misconduct on the part of the General Partner or its
Affiliates. Any claim for indemnification shall be paid from, and only to the
extent of, the Partnership's assets and no Partners shall have any personal
liability on account thereof.
8.5. OTHER INTERESTS OF THE GENERAL PARTNER AND ITS AFFILIATES. Except
as otherwise provided in this Agreement, the General Partner and any Affiliates
of the General Partner may engage in or possess an interest in other business
ventures (not connected with the Partnership) of every kind and description,
independently or with others. Neither the Partnership nor the Limited Partners
shall have any rights in and to such other accounts, partnerships or other
ventures or the income or profits therefrom by reason of the General Partner's
position with the Partnership.
ARTICLE 9.
TRANSFERS OF PARTNERSHIP INTERESTS
9.1. ASSIGNMENT. No Limited Partner may assign all or any part of its
interest in the) Partnership without the consent of the General Partner.
9.2. SUBSTITUTION. The General Partner shall admit to the Partnership as
a substitute Limited Partner any permitted assignee of a Limited Partner's
interest in the Partnership.
9.3 RIGHTS OF SUCCESSORS OF A LIMITED PARTNER ON BANKRUPTCY,
INSOLVENCY, ETC. The bankruptcy, insolvency, dissolution or other termination of
any Limited Partner shall not dissolve the Partnership. In such event, the legal
representative or successor in interest to such Limited Partner shall have all
the rights and be subject to all the same limitations as the Limited Partner
under this Agreement, including without limitation the right to assign the
Limited Partner's interest in the Partnership, subject to the provisions of this
Article 9, and to become a substitute Limited Partner.
9.4. STATUS OF AN ASSIGNING LIMITED PARTNER. Any Limited Partner who
shall assign all of its Limited Partner interest in the Partnership in
accordance with Section 9.1 shall cease to be a Limited Partner of the
Partnership, and shall no longer have any of the rights or privileges of a
Limited Partner, except that unless and until a substitute Limited Partner is
admitted in its stead, such assigning Limited Partner shall retain the statutory
rights of an assignor of a limited partnership interest under the Act.
9.5. WITHDRAWAL OF LIMITED PARTNERS. Except upon transfer of a Limited
Partner's entire
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Limited Partner interest in the Partnership and the admission of the transferee
as a substituted Limited Partner in compliance with the terms hereof, no Limited
Partner shall have the right to withdraw from the Partnership except with the
consent of all of the Partners.
ARTICLE 10.
TERMINATION
10.1. DISSOLUTION AND WINDING UP. The Partnership shall be dissolved and
its affairs wound up on the first to occur of the following:
(a) an election to dissolve the Partnership made in writing by
the General Partner with the consent of a majority of the Limited Partners;
(b) the sale or other disposition of all or substantially all of
the assets of the Partnership, unless the General Partner elects to continue the
Partnership business solely for the purpose of the receipt and collection of a
note and payments thereon or the collection of any other consideration to be
received in exchange for the assets of the Partnership (which activities shall
be deemed to be a part of such sale or other dispositions and the winding-up of
the affairs of the Partnership) or, with the approval of a majority of the
Limited Partners, for any other purpose;
(c) the expiration of the term specified in Section 2.5
(including any extension, if applicable); or
(d) any other event which causes the dissolution and/or
winding-up of the Partnership under the Act.
Dissolution of the Partnership shall be effective on the day on which the
event occurs giving rise to the dissolution, but the Partnership shall not
terminate until the assets of the Partnership shall have been distributed as
provided herein and a certificate of cancellation shall have been filed with the
Secretary of State of the State of Delaware.
10.2. DISTRIBUTIONS UPON DISSOLUTION. Upon the dissolution of the
Partnership, the General Partner, or if there is none, such other Person as is
required by law to wind up the Partnership's affairs, shall proceed with the
liquidation of the Partnership. During the period of dissolution and winding up
of the Partnership, the General Partner or any Person performing such action may
exercise all of the powers granted to the General Partner herein, and may adopt
such plan, method or procedure as may be deemed reasonable in order to
effectuate an orderly winding-up.
ARTICLE 11.
MISCELLANEOUS
11.1. NOTICES. Any notices, consents, approvals, offers, elections and
other communications required or permitted under this Agreement ("NOTICE") shall
be deemed adequately given only if
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in writing and the same shall be delivered either in hand or by mail or Federal
Express or similar expedited commercial carrier, addressed to the recipient of
the notice, postpaid and registered or certified with return receipt requested
(if by mail), or with all freight charges prepaid (if by Federal Express or
similar carrier).
11.2. WORD MEANINGS. The words such as "herein", "hereinafter", "hereof"
and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural and the masculine gender shall include the
feminine and neuter, and vice versa, unless the context otherwise requires.
11.3. BINDING PROVISIONS. The covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, the heirs, legal
representatives, successors and assigns of the respective parties hereto.
11.4. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware. In the event of a conflict
between any provision of this Agreement and any non-mandatory provision of the
Act, the provision of this Agreement shall control and take precedence.
11.5. SEPARABILITY OF PROVISIONS. Each provision of this Agreement shall
be considered separable and if for any reason any provision or provisions herein
are determined to be invalid, unenforceable or illegal under any existing or
future law, such invalidity, unenforceability or illegality shall not impair the
operation of or affect those portions of this Agreement which are valid,
enforceable and legal.
11.6. SECTION TITLES. Section titles are for descriptive purposes only
and shall not control or alter the meaning of this Agreement as set forth in
the text.
11.7. FURTHER ASSURANCES. The Partners shall execute and deliver such
further instruments and do such further acts and things as may be required to
carry out the intent and purposes of this Agreement.
11.8. ENTIRE AGREEMENT. This Agreement and the schedules and exhibits
attached hereto constitute the entire agreement between the parties hereto with
respect to the transactions contemplated herein, and supersede all prior
understandings or agreements between the parties.
11.9. WAIVER. The failure by any party hereto to insist upon or to
enforce any of its rights shall not constitute a waiver thereof, and nothing
shall constitute a waiver of such party's right to insist upon strict compliance
with the provisions hereof. No delay in exercising any right, power or remedy
created hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or remedy by any such party preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. No waiver by any party hereto to any breach of or default in any term or
condition of this Agreement shall constitute a
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waiver of or assent to any succeeding breach of or default in the same or any
other term or condition hereof. Each party hereto may waive the benefit of any
provision or condition for its benefit contained in this Agreement, but only if
such waiver is evidenced by a writing signed by such party.
11.10. AMENDMENTS. The Agreement may not be amended except by an
instrument in writing signed by all the Partners.
11.11. AGREEMENT IN COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be considered an original and all
shall constitute one and the same Agreement, binding upon all of the parties
hereto, notwithstanding that all of the parties may not be signatories to the
same counterpart.
11.12. PARTITION. No Partner nor any successor-in-interest to any Partner
shall have the right while this Agreement remains in effect to have any property
of the Partnership partitioned, or to file a complaint or institute any
proceeding at law or in equity to have such property of the Partnership
partitioned and each Partner, on behalf of such Partner and such Partner's
successors, representatives, heirs and assigns, hereby waives any such right. It
is the intention of the Partners that the rights of the parties hereto and their
successors-in-interest to Partnership property, as among themselves, shall be
governed by the terms of this Agreement, and that the rights of the Partners and
their successors-in-interest to assign, transfer, sell or otherwise dispose of
any interest in the Partnership shall be subject to the limitations and
restrictions set forth in this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement under seal as of the day and year first above written.
GENERAL PARTNER:
MAXI DRUG, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx
President and Chief Executive Officer
LIMITED PARTNER:
MAXI DRUG NORTH, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx
President and Chief Executive Officer
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MAXI DRUG SOUTH, L.P.
SCHEDULE A
NAMES, ADDRESSES AND SUBSCRIPTIONS OF THE PARTNERS
Name and Address Contribution Percentage Interest
---------------- ------------ -------------------
Maxi Drug, Inc. $ 500 50%
00 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Maxi Drug North, Inc. $ 500 50%
000 Xxxx Xxxxxx
Xxxxx, XX 00000
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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TABLE OF CONTENTS
(continued)
-20-
TABLE OF CONTENTS
(continued)
Page
----
ARTICLE 9. TRANSFERS OF PARTNERSHIP INTERESTS 13
9.1. Assignment 13
9.2. Substitution 13
9.3. Rights of Successors of a Limited Partner on Bankruptcy, Insolvency, Etc 14
9.4. Status of an Assigning Limited Partner 14
9.5. Withdrawal of Limited Partners 14
ARTICLE 10. TERMINATION 14
10.1. Dissolution and Winding Up 14
10.2. Distributions Upon Dissolution 15
ARTICLE 11. MISCELLANEOUS 15
11.1. Notices 15
11.2. Word Meanings 15
11.3. Binding Provisions 15
11.4. Applicable Law 15
11.5. Separability of Provisions 15
11.6. Section Titles 16
11.7. Further Assurances 16
11.8. Entire Agreement 16
11.9. Waiver 16
11.10. Amendments 16
11.11. Agreement in Counterparts 16
11.12. Partition 16
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