Exhibit 3.35
LIMITED PARTNERSHIP AGREEMENT
OF
INNOVEX SUPPORT SERVICES LIMITED PARTNERSHIP
As of June 6, 2001
LIMITED PARTNERSHIP AGREEMENT
OF
INNOVEX SUPPORT SERVICES LIMITED PARTNERSHIP
THIS AGREEMENT made as of June 6, 2001 between INNOVEX AMERICA HOLDING COMPANY,
a Delaware corporation, as the general partner (the "GENERAL PARTNER") and
INNOVEX NEVADA LIMITED PARTNERSHIP, as a limited partner (and together with any
other persons who become limited partners of the Partnership as provided herein,
collectively, the "LIMITED PARTNERS", and individually, a "LIMITED PARTNER"; and
the Limited Partners together with the General Partner, the "PARTNERS").
WHEREAS, the Partners desire to form a limited partnership
pursuant to the Revised Uniform Limited Partnership Act of the State of North
Carolina (the "ACT").
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the undersigned hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Capitalized terms used herein and not otherwise defined shall
have the meanings set forth below:
(a) "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with
respect to any Limited Partner, the deficit balance, if any, in such Limited
Partner's Capital Account as of the end of the relevant Fiscal Year, after
giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts
which such Limited Partner is obligated to restore pursuant to any provision of
this Agreement or is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Section 1.704-2(g)(l) and 1.704-2(i)(5);and
(ii) Debit to such Capital Account the items
described in Sections 1.704-1(b)(2)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-l(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-l(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.
(b) "AFFILIATE" shall mean with respect to any Partner,
any Person that directly, or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Partner.
(c) "CAPITAL CONTRIBUTION" means, with respect to any
Partner, the amount of money and the initial Gross Asset Value of any property
(other than money) contributed to the Partnership with respect to the Interest
held by such Partner. The principal amount of a promissory note which is not
readily traded on an established securities market and which is contributed to
the Partnership by a Partner who is the maker of the note shall not be included
in the Capital Account of any Partner until the Partnership makes a taxable
disposition of the note or until (and to the extent) principal payments are made
on the note, all in accordance with Regulations Section 1.704-l(b)(2)(iv)(d)(2).
(d) "CERTIFICATE" means the Certificate of Limited
Partnership relating to the Partnership filed in the office of the Secretary of
State of the State of North Carolina as amended from time to time in accordance
with the terms hereof and the Act.
(e) "CODE" means the Internal Revenue Code of 1986, as
amended from time to time (and any corresponding provisions of succeeding law).
(f) "DEPRECIATION" means, for each Fiscal Year, an amount
equal to the depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such Fiscal Year, except that if the
Gross Asset Value of an asset differs from its adjusted basis for federal income
tax purposes at the beginning of such Fiscal Year, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such Fiscal Year bears to such beginning adjusted tax basis; provided,
however, that if the adjusted basis for federal income tax purposes of an asset
at the beginning of such Fiscal Year is zero, Depreciation shall be determined
with reference to such beginning Gross Asset Value using any reasonable method
selected by the General Partner.
(g) "FISCAL YEAR" is defined in Section 6.1.
(h) "GOVERNMENTAL OR REGULATORY BODY" means any court,
tribunal, arbitrator or any government or political subdivision thereof, whether
federal, state, county, local or foreign, or any agency, authority, official or
instrumentality of any such government or political subdivision.
(i) "GROSS ASSET VALUE" means, with respect to any asset,
the asset's adjusted basis for federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the gross fair market value
of such asset, as determined by the contributing Partner and the General
Partner, provided that the initial Gross Asset Values of the assets contributed
to the Partnership pursuant to Section 3.1 hereof shall be as set forth in such
Section, and provided further that, if the contributing Partner is a General
Partner, the determination of the fair market value of any other contributed
asset shall require the consent of all of the Limited Partners;
-2-
(ii) The Gross Asset Values of all Partnership assets
shall be adjusted to equal their respective gross fair market values, as
determined by the General Partner, as of the following times: (a) the
acquisition of an additional Interest by any new or existing Partner in exchange
for more than a de minimis Capital Contribution; (b) the distribution by the
Partnership to a Partner of more than a de minimis amount of assets as
consideration for a Partnership Interest; and (c) the liquidation of the
Partnership within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g):
provided, however, that adjustments pursuant to clauses (a) and (b) above shall
be made only if the General Partner reasonably determines that such adjustments
are necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;
(iii) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be adjusted to equal the gross fair market
value of such asset on the date of distribution as determined by the distributee
and the General Partner, provided that, if the distributee is a General Partner,
the determination of the fair market value of the distributed asset shall
require the consent of all of the Limited Partners;
(iv) The Gross Asset Values of Partnership assets
shall be increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but
only to the extent that such adjustments are taken into account in determining
Capital Accounts pursuant to Regulation Section 1.704-1(b)(2)(iv)(m); and
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
Section l.l(h)(i), Section l.l(h)(ii), or Section l.l(h)(iv) such Gross Asset
Value shall be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.
(j) "INTEREST" when used in reference to an interest in
the Partnership means the entire ownership interest of a Partner in the
Partnership at any particular time.
(k) "LAW" means any law, statute, rule, regulation,
ordinance and other pronouncement having the effect of law of any Governmental
or Regulatory Body.
(l) "NET CASH FLOW" shall mean all cash, revenues and
funds received by the Partnership from Partnership operations, less the sum of
the following to the extent paid or set aside by the Partnership: (i) all
principal and interest payments on indebtedness of the Partnership and all other
sums paid to lenders; (ii) all cash expenditures incurred in the normal
operation of the Partnership's business; and (iii) Reserves. Net Cash Flow shall
not be reduced by non-cash charges, including depreciation and amortization, if
any.
(m) "NONRECOURSE DEDUCTIONS" has the meaning set forth in
Section 1.7042(b)(1) of the Regulations.
-3-
(n) "NONRECOURSE LIABILITY" has the meaning set forth in
Section 1.7042(b)(3) of the Regulations.
(o) "ORGANIZATION EXPENSES" means the reasonable
out-of-pocket expenses incurred by the General Partner in connection with the
organization of the Partnership (including, without limitation, fees and
disbursements of attorneys and other professionals and other fees and expenses).
(p) "PARTNER NONRECOURSE DEBT" has the meaning set forth
in Section 1.704-2(b)(4) of the Regulations.
(q) "PARTNER NONRECOURSE DEBT MINIMUM GAIN" means an
amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership
Minimum Gain that would result if such Partner Nonrecourse Debt were treated as
a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of
the Regulations.
(r) "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set
forth in Sections 1.704-2(i)( 1) and 1.704-2(i)(2) of the Regulations.
(s) "PARTNERSHIP MINIMUM GAIN" has the meaning set forth
in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.
(t) "PARTNERSHIP" means Innovex Support Services Limited
Partnership, a North Carolina limited partnership.
(u) "PROFITS" and "LOSSES" respectively, shall mean, for
each fiscal year or other period, an amount equal to the Partnership's taxable
income or taxable loss for such fiscal year or other period, determined in
accordance with Section 703(a) of the Code and adjusted as provided below. All
items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(l) will be included in taxable income or taxable
loss for this purpose and the following adjustments will be made:
(i) Any income of the Partnership that is exempt from
federal income tax or not otherwise taken into account in computing Profits or
Losses pursuant to this definition will be added to such taxable income or
taxable loss;
(ii) Any expenditures of the Partnership described in
Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
under Treasury Regulation Section 1.704-l(b)(2)(iv)(i), and not otherwise taken
into account in computing Profits or Losses pursuant to this definition, will be
subtracted from such taxable income or taxable loss;
(iii) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to Section l.l(i)(ii) or Section
l.l(i)(iv), the amount of such adjustment shall be taken into account as gain or
loss from the disposition of such asset for purposes of computing Profits or
Losses;
-4-
(iv) Gain or loss resulting from any disposition of
Property with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the Property
disposed of, notwithstanding that the adjusted tax basis of such Property
differs from its Gross Asset Value;
(v) 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
Year, computed in accordance with Section 1.1 (f);
(vi) To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b) or Code Section
743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(4) to be
taken into account in determining Capital Accounts as a result of a distribution
other than in liquidation of a Partner's Interest, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset an shall be taken into account for purposes of
computing Profits or Losses; and
(vii) Notwithstanding any other provision of this
Section 1.1 (u), any items which are specially allocated pursuant to Section 4.3
or Section 4.4 hereof shall not be taken into account in computing Profits or
Losses.
The amounts of the items of Partnership income, gain, loss, or deduction
available to be specially allocated pursuant to Sections 4.3 and 4.4 hereof
shall be determined by applying rules analogous to those set forth in such
Sections (i) through (vi) above.
(v) "PERSON" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, and a government or other department or agency thereof.
(w) "REGULATIONS" means the Income Tax Regulations,
including Temporary Regulations, promulgated under the Code, as such regulations
may be amended from time to (including corresponding provisions of succeeding
regulations).
(x) "RESERVES" shall mean funds set aside or amounts
allocated to reserves which are maintained in amounts deemed sufficient by the
General Partner for working capital and to pay taxes, insurance, debt service or
other costs or expenses incident to the ownership or operation of the
Partnership's business.
(y) "REGULATORY ALLOCATIONS" shall have the meaning set
forth in Section 7.3 hereof.
(z) "TAX" and "TAXES" means all taxes or other
assessments imposed by any Governmental or Regulatory Body, including income,
excise, property, sales, use, ad valorem, and franchise taxes.
-5-
(aa) "TAX RETURN" means any return, report, information
return, or other document (including any related or supporting information)
filed or required to be filed with any Governmental or Regulatory Body in
connection with the determination, assessment or collection of any Tax or the
administration of any laws, regulations or administrative requirements relating
to any Tax.
ARTICLE II
NAME, PURPOSES AND POWERS AND PLACE OF BUSINESS
2.1 Name. The name of the Partnership is Innovex Support Services
Limited Partnership. Subject to all applicable laws, the business of the
Partnership may. however, be conducted under any other name or names agreed upon
by the Partners. The Partnership's name shall be registered or filed in each
state in which registration or filing is required.
2.2 Purposes and Powers. (a) The general nature of the business of
the Partnership shall be to act as a professional employer organization
providing marketing services to the pharmaceutical, medical products and related
industries, predominantly through manufacturers' and independent sales
representatives, as well as business marketing consulting services, market
research and analysis services and educational and training services to the
pharmaceutical, medical products and related industries, and to engage in such
other activities as the General Partner may from time to time determine.
(b) The Partnership may execute, deliver and perform all
contracts and undertakings and engage in any and all activities and transactions
as may in the sole determination of the General Partner be necessary or
advisable to carry out the foregoing objects and purposes, including but not
limited to: borrowing money for the purposes of the Partnership from any source;
pledging or mortgaging all or any part of the properties of the Partnership;
acquiring insurance and taking all other actions necessary or appropriate to
protect the Partnership, the Partners and the Partnership's properties; selling,
exchanging or otherwise disposing of any or all of the assets of the Partnership
for cash, stock, securities or any combination thereof upon such terms and
conditions as the Partners may from time to time determine; entering into
contractual relationships with third parties, including clients and vendors; and
employing such agents, managers, and employees as may be necessary to carry out
the purposes of the Partnership.
2.3 Registered Office and Agent; Place of Businesses. The location
of the principal place of business of the Partnership will be 00 Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 or such other location as may be
determined by the General Partner. The Partnership may have additional places of
business at such locations as the General Partner may from time to time
determine. The "resident" agent in New Jersey for service of process on the
Partnership in the State of New Jersey at such registered office is the
Corporation Trust Corporation, 000 Xxxx
-0-
Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000. Such resident agent may be changed as
the General Partner may from time to time designate by notice to the Limited
Partners.
2.4 Power of Attorney; Compliance with Act
A. The Limited Partners hereby irrevocably constitute
and appoint the General Partner, with full power of substitution and
resubstitution, as the Limited Partners' true and lawful attorney-in-fact with
full power and authority to act in the Limited Partners' name, place and stead
to:
(1) make, execute, swear to, seal, acknowledge,
deliver, file and record in the appropriate public offices (a)
all certificates, documents and other instruments (including,
without limitation, this Agreement and the Certificate and all
amendments or restatements thereof) that the General Partner
deems appropriate or necessary to form, qualify or continue
the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners
have limited liability to the extent provided by applicable
law) in the States of North Xxxxxxxx and New Jersey and in all
other jurisdictions in which the Partnership may or plans to
conduct business or own property; (b) all instruments that the
General Partner deems appropriate or necessary to reflect any
amendment, change, modification or restatement of this
Agreement in accordance with its terms; (c) all conveyances
and other instruments or documents that the General Partner
deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this
Agreement, including, without limitation, a certificate of
cancellation; (d) all instruments relating to the admission,
withdrawal, removal or substitution of any Partner pursuant to
the terms hereof or the Capital Contribution of any Partner;
(e) any agreements, waivers or other instruments required by
any state or local tax authority to enable the Partnership to
file combined, consolidated or similar state or local income
tax Returns and/or to pay state and local taxes on behalf of
the Partnership or all of the Partners; and (f) all documents
and other instruments relating to the determination of the
rights, preferences and privileges of Partnership Interests;
and
(2) execute, swear to, seal, acknowledge and
file all ballots, consents, approvals, waivers, certificates
and other instruments appropriate or necessary, in the sole
and absolute discretion of the General Partner, to make,
evidence, give, confirm or ratify any vote, consent, approval,
agreement or other action which is made or given by the
Partners hereunder or is consistent with the terms of this
Agreement or appropriate or necessary, in the sole and
absolute discretion of the Genera] Partner, to effectuate the
terms or intent of this Agreement.
B. Nothing contained herein shall be construed as
authorizing the General Partner to amend this Agreement except as may be
otherwise expressly provided for in this Agreement.
-7-
C. The foregoing power of attorney is irrevocable and
coupled with an interest, in recognition of the fact that each of the Partners
will be relying upon the power of the General Partner to act as contemplated by
this Agreement in any filing or other action by it as contemplated herein, and
it shall survive and not be affected by the subsequent incapacity of any Limited
Partner or assignee and the transfer of all or any portion of such Limited
Partner's or assignee's Partnership Interest and shall extend to such Limited
Partner's or assignee's heirs, successors, assigns and personal representatives.
Each such Limited Partner or assignee hereby waives any and all defenses which
may be available to contest, negate or disaffirm the action of the General
Partner, taken in good faith under such power of attorney. Each Limited Partner
or Assignee shall execute and deliver to the General Partner, within 15 days
after receipt of the General Partner's request therefor, such further
designation, powers of attorney and other instruments as the General Partner, as
the case may be, reasonably deems necessary to effectuate this power of
attorney.
2.5 Term. The Term of the Partnership commenced on June 6, 2001,
the date the Certificate was filed with the Secretary of the State of North
Carolina in accordance with the Act, and shall continue until the Partnership is
dissolved and terminated pursuant to the provisions of Article IX or as
otherwise provided by law.
ARTICLE III
CAPITAL CONTRIBUTIONS
3.1 Limited Partner's Capital Contribution. Each of the Limited
Partners shall make a capital contribution to the capital of the Partnership of
such assets or amounts more particularly set forth on Schedule 3.1 attached
hereto.
3.2 General Partner's Capital Contribution. The General Partner
shall make a capital contribution to the capital of the Partnership of such
assets or amounts more particularly set forth on Schedule 3.2 attached hereto.
3.3 Additional Capital Contributions. If the Partners shall
determine that additional capital contributions are required to carry out the
purposes of the Partnership, the Partners shall make such additional capital
contributions in proportion to the Partners' respective Interests.
3.4 Interest on Capital Contributions. No Partner shall be
entitled to interest on or with respect to any Capital Contribution and Capital
Account.
3.5 Withdrawal and Return of Capital Contribution. No Partner
shall be entitled to withdraw any part of such Partner's Capital Contribution or
to receive any distributions from the Partnership, except as provided in this
Agreement.
3.6 Capital Accounts. The Partnership shall establish and maintain
in the books of the Partnership a "Capital Account" for each Partner, as
follows:
-8-
(i) To each Partner's Capital Account there shall be credited
such Partner's Capital Contributions, such Partner's distributive share of
Profits, and any items in the nature of income or gain which are specially
allocated pursuant to Section 4.1 or Section 4.2 hereof, and the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
asset distributed to such Partner.
(ii) To each Partner's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any asset distributed to such
Partner pursuant to any provision of this Agreement, such Partner's distributive
share of Losses and any items in the nature of expenses or losses which are
specially allocated pursuant to Section 4.1 or Section 4.2 hereof, and the
amount of any liabilities of such Partner assumed by the Partnership or which
are secured by any asset contributed by such Partner to the Partnership;
(iii) In the event all or a portion of a Partnership Interest
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;
(iv) In determining the amount of any liability for purposes
hereof there shall be taken into account Code Section 752 and any other
applicable provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-l(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 (including, without limitation, debits or
credits relating to liabilities which are secured by contributed or distributed
assets or which are assumed by the Partnership or any Partner), 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 pursuant to Article IX hereof upon the
liquidation of the Partnership. The Genera] Partner also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-l(b)(2)(iv)(q) and (ii) make any appropriate
modifications in the event unanticipated events (for example, the acquisition by
the Partnership of oil or gas properties) might otherwise cause this Agreement
not to comply with Regulations Section 1.704-1(b).
ARTICLE IV
ALLOCATION OF INCOME AND LOSSES
-9-
4.1 Profits and Losses, (a) Profits and Losses of the Partnership
shall be allocated to the Partners in accordance with their Interests.
(b) The Losses allocated pursuant to Section 4.1(a) hereof shall not
exceed the maximum amount of Losses that can be so allocated without causing a
Limited Partner to have Adjusted Capital Account Deficit at the end of any
Fiscal Year. In the event some but not all of the Limited Partners would have
Adjusted Capital Account Deficits as a consequence of any Losses allocated
pursuant to Section 4.1(a) hereof, the limitation set forth in this Section 4.1
(b) shall be applied on a Limited Partner by Limited Partner basis so as to
allocate the maximum Losses to each Limited Partner under Section
1.704-l(b)(2)(ii)(d) of the Regulations. All Losses in excess of the limitations
set forth in this Section 4.1(b) shall be allocated to the General Partner.
4.2 Special Allocations. The following special allocations shall
be made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise provided
in Section 1.704-2(f) of the Regulations, notwithstanding any other provision of
this Article IV, if there is a net decrease in Partnership Minimum Gain, during
any Fiscal Year, each Partner shall be specially allocated items of Partnership
income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal
Years) in an amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Sections 1.704-2(f)(6) and 1.702(j)(2) of the Regulations. This Section
4.2(a) is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(f) of the Regulations and shall be interpreted consistently
therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise
provided in Section 1.704-2(j)(4) of the Regulations, notwithstanding any other
provision of this Article IV, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal
Year, each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of
Partnership income and gain for such Fiscal Year (and, if necessary, subsequent
Fiscal Years) in an amount equal to such Partner's share of the net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Section 1.704-2(i)(4) of the Regulations.
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto,
the items to be so allocated shall be determined in accordance with Sections
1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section
4.2(b) is intended to comply with the minimum gain chargeback
-10-
requirement in Section 1.704-2(1) (4) of the Regulations and shall be
interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Limited
Partner unexpectedly receives any adjustments, allocations, or distributions
described in Section 1.704-l(b)(2)(ii)(d)(4), Section 1.704-l(b)(2)(ii)(d)(5),
or Section 1.704-1(b)-(2)(ii)(d)(6) of the Regulations, items of Partnership
income and gain shall be specially allocated to such Limited Partner in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such Limited Partner as
quickly as possible, provided that an allocation pursuant to this Section 4.3(c)
shall be made only if and to the extent that such Limited Partner would have an
Adjusted Capital Account Deficit after all other allocations provided for in
this Article IV have been tentatively made as if this Section 4.2(c) were not in
the Agreement.
(d) Gross Income Allocation. In the event any Limited
Partner has a deficit Capital Account at the end of any Fiscal Year which is in
excess of the sum of (i) the amount such Limited Partner is obligated to restore
pursuant to any provision of this Agreement, and (ii) the amount such Limited
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Sections 1.704-2(g)(l) and 1.704-2(i)(5) of the Regulations, such
Limited Partner shall be specially allocated items of Partnership income and
gain in the amount of such excess as quickly as possible, provided that an
allocation pursuant to this Section 4.2(d) shall be made only if and to the
extent that such Limited Partner would have a deficit Capital Account in excess
of such sum after all other allocations provided for in this Article IV have
been made as if Section 4.2(c) hereof and this Section 4.2(d) were not in the
Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for
any Fiscal Year shall be specially allocated among the Partners in proportion to
their Interests.
(f) Partner Nonrecourse Deductions. Any Partner
Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the
Partner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Regulations Section 1.704-2(i) (1).
(g) Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Code Section
734(b) or Code Section 743(b) is required pursuant to Regulations Section
1.704-l(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(2) to be
taken into account in determining Capital Accounts as the result of a
distribution to a Partner in complete liquidation of its Interest, the amount of
such adjustment to Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such gain or loss shall be specially allocated to the
Partners in accordance with their interests in the Partnership in the event
Regulations Section 1.704-l(b)(2)(iv)(m)(2) applies, or to the Partner to whom
such distribution was made in the event Regulations Section 1.704-1 (b)(2)
(iv)(m)(4) applies.
4.3 Curative Allocations. The allocations set forth in Sections
4.2(a), 4.2(b), 4.2(c), 4.2(d), 4.2(e), 4,2(f), and 4.2(g) hereof (the
"Regulatory Allocations") are intended to comply
-11-
with certain requirements of the Regulations. It is the intent of the Partners
that, to the extent possible, all Regulatory Allocations shall be offset either
with other Regulatory Allocations or with special allocations of other items of
Partnership income, gain, loss, or deduction pursuant to this Section 4.3.
Therefore, notwithstanding any other provision of this Article IV (other than
the Regulatory Allocations), the General Partner shall make such offsetting
special allocations of Partnership income, gain, loss, or deduction in whatever
manner they determine appropriate so that, after such offsetting allocations are
made, each Partner's Capital Account balance is, to the extent possible, equal
to the Capital Account balance such Partner would have had if the Regulatory
Allocations were not part of the Agreement and all Partnership items were
allocated pursuant to Section 4.1. In exercising its discretion under this
Section 4.3, the General Partner shall take into account future Regulatory
Allocations under Sections 4.2(a) and 4.2(b) that, although not yet made, are
likely to offset other Regulatory Allocations previously made under Section
4.2(e) and 4.2(f).
4.4 Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or
any other items allocable to any period, Profits, Losses, and any such other
items shall be determined on a daily, monthly, or other basis, as determined by
the General Partner using any permissible method under Code Section 706 and the
Regulations thereunder.
(b) The Partners are aware of the income tax consequences
of the allocations made by this Article IV and hereby agree to be bound by the
provisions of this Article IV in reporting-their shares of Partnership income
and loss for income tax purposes.
(c) For purposes of determining a Partner's proportionate
share of the "excess nonrecourse liabilities" of the Partnership within the
meaning of Section 1.752-3(a)(3) of the Regulations, the Partners interests
in Partnership profits are in proportion to their sharing of Profits hereunder.
4.5 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 assets 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 Gross Asset Value (computed in
accordance with Section 1.l(i)(i) of the definition hereunder).
In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to clause (ii) of the definition of Gross Asset Value hereof,
subsequent allocations of income, gain, loss, and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Regulations thereunder.
Any elections or other decisions relating to such allocations shall be
made by the General Partner in any manner that reasonably reflects the purpose
and intention of this Agreement.
-12-
Allocations pursuant to this Section 4.5 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 Profits, Losses, other
items, or distributions pursuant to any provision of this Agreement.
ARTICLE V
DISTRIBUTIONS
5.1 Distributions General. Distributions of Partnership assets
shall be made only in accordance with this Article V and Article IX, and no
distribution shall be made in violation of the Act. Reimbursements received by
the General Partner or its Affiliates pursuant to Section 7.10 are not, and
shall not be deemed to be, distributions pursuant to this Article V or Article
IX.
5.2 Net Cash Flow. Except as otherwise provided in Article IX
hereof, Net Cash Flow, if any, shall be distributed to the Partners at such
times and in such aggregate amounts as shall be determined by the General
Partner, in accordance with the Partners' respective Interests at the time of
such distribution.
5.3 Distributions Upon Final Liquidation. Upon a final liquidation
of the Partnership in accordance with Article IX, all of the Partnership's
assets shall be distributed as set forth in Section 9.2.
5.4 Amounts Withheld. All amounts withheld pursuant to the Code or
any provision of any state or local tax law with respect to any payment or
distribution to the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article V for all purposes under this Agreement. The
General Partner is authorized to withhold from distributions, or with respect to
allocations, to the Partners and to pay over to any federal, state or local
government any amounts required to be so withheld pursuant to the Code or any
provisions of any other federal, state, or local law, and shall allocate any
such amounts to the Partners with respect to which such amount was withheld.
5.5 Distributions in Kind. No right is given to any Partner to
demand and receive assets other than cash.
ARTICLE VI ACCRUAL
ACCOUNTING Basis
6.1 Accrual Basis: Fiscal Year, The Partnership shall use an
accrual basis method of accounting in conformity with Generally Accepted
Accounting Principles, consistently applied, and a fiscal year ("Fiscal Year")
for financial reporting and tax purposes ending December 31st of each year.
ARTICLE VII
-13-
MANAGEMENT
7.1 General Partner. The General Partner shall be responsible for
the management of the Partnership. The Limited Partners shall not take part in
the management or control of the Partnership business and shall have no right or
authority to act for the Partnership.
7.2 Powers of General Partner. The General Partner shall have
exclusive management and control of the business and affairs of the Partnership,
and, subject to Section 7.4 below, shall have the power and authority to do all
things necessary or proper to carry out the purposes of the Partnership,
including, but not limited to designating certain officers to carry out the
foregoing. The General Partner will implement policies and procedures for the
operation of the business of the Partnership. The General Partner may change
such policies and procedures in its sole discretion at any time.
7.3 Retention or Employment of Other Persons. The General Partner
may, at the expense of the Partnership, retain or employ such Persons as it
deems advisable for the operation and management of the Partnership or the
satisfaction of its obligations set forth in Section 7.2; including without
limitation, the hiring of the employees and officers of the General Partner as
employees and officers of the Partnership. Any such employees and officers shall
have full access and use of any and all facilities, equipment and/or personnel
of the Partnership in order to fulfill his/her employment obligations as
determined by the General Partner.
7.4 Limitations Upon the Authority of the General Partner.
(a) In addition to other acts expressly prohibited or restricted by
this Agreement or by law the General Partner is expressly prohibited from the
following without the consent of all of the Partners:
(i) Doing any act in contravention of this Agreement;
(ii) Admitting a person as a Limited Partner or General
Partner except as provided in this Agreement;
(iii) Possessing or in any manner dealing with the property
of the Partnership or assigning the rights of the Partnership in any Partnership
property for other than Partnership purposes;
(iv) Confessing judgment against the Partnership;
(v) Requiring any Partner to make any contribution to the
capital of the Partnership not provided for herein; or
-14-
(vi) Dissolving and germinating the Partnership.
(b) In addition to other acts expressly prohibited or restricted
by this Agreement or by law the General Partner is expressly prohibited from
selling, exchanging, leasing, mortgaging, pledging or otherwise transferring all
or substantially all of the assets of the Partnership without the consent of the
Partners.
7.5 Other Activities of General Partners. The General Partner
shall not be required to devote full time to the management of the Partnership,
but shall devote such time, effort and skill as may be reasonably required to
implement the Partnership's purposes; but nothing contained herein shall
preclude the employment pursuant to Section 7.2 of any agent or other third
party for the operation and management of all or any portion of the Partnership.
7.6 Other Investments by Partners. No Partner shall be prohibited
from owning, operating or investing in, either directly or indirectly, other
businesses of any nature or description, independently or with others, whether
or not in competition with the Partnership, and the other Partners shall not
have any rights by virtue of this Agreement in respect of such other businesses
or the income or profits derived therefrom.
7.7 Consent or Approval Deemed Granted. At any time that the
General Partner is required by law or by this Agreement, to obtain any consent
or approval of any Limited Partner, if the General Partner sends a request for
such consent or approval to the Limited Partners by first class mail or by
messenger to such address as such Limited Partner shall have notified the
General Partner, and thirty days have elapsed since the mailing' or delivery by
messenger of such request, and the General Partner has not received a response
to such request, then such Limited Partner shall be deemed to have granted such
requested consent or approval.
7.8 Tax Matters Partner. The General Partner shall be the Tax
Matters Partner, within the meaning of Section 6231(a)(7) of the Code, for all
purposes of the Code. Each of the Partners, by execution of this Agreement,
specifically consents to such designation, and acknowledges that such Tax
Matters Partner shall cause the preparation of all tax returns of the
Partnership, and shall have all powers necessary to carry out such duties.
7.9 Certificate of Limited Partnership The General Partner shall
file amendments to the Certificate and do all the things to maintain the
Partnership as a limited partnership (or a partnership in which the limited
partners have limited liability) under the Laws of the State of North Carolina
and each other state or jurisdiction, in which the Partnership may elect to do
business or own property. The Genera] Partner shall cause to be filed such other
certificates or documents as may be reasonable and necessary or appropriate for
the formation, continuation, qualification or operation of a limited partnership
(or a partnership in which the limited partners have limited liability to the
extent provided by applicable Law) in the State of North Carolina and any other
state or jurisdiction, in which the partnership may elect to do business or own
property.
7.10 Reimbursement of the General Partner
-15-
A. Except as provided in this Section 7.10 and elsewhere
in this Agreement (including the provisions of Articles IV, V and IX regarding
distributions, payments, and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
B. The General Partner shall be reimbursed on a monthly
basis, or such other basis as the General Partner may reasonably determine, for
all expenses it incurs relating to the ownership and operation of, or for the
benefit of, the Partnership (including, without limitation, (i) expenses
relating to the ownership of interests in and operation of the Partnership and
management and administration of any subsidiaries of the Partnership such as
audit expenses and filing fees, (ii) compensation of the General Partner's
officers and employees, and (iii) director fees and expenses; provided that the
amount of such reimbursement shall be reduced by any interest earned by the
General Partner with respect to bank accounts or other instruments or accounts
held by it on behalf of the Partnership. The General Partner shall determine in
good faith the amount of expenses incurred by it, as the case may be, related to
the ownership and operation of, or for the benefit of, the Partnership. In the
event that certain expenses are incurred for the benefit of the Partnership and
other entities (including the General Partner) such expenses will be allocated
to the Partnership and such other entity in such manner as the General Partner
determines to be fair and reasonable. The Limited Partners acknowledge that all
such expenses of the General Partner are deemed to be incurred for the benefit
of the Partnership. Such reimbursements shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 7.11 hereof, except to the extent such reimbursements have already been
received. All payments and reimbursements hereunder shall be characterized for
federal income tax purposes as expenses of the Partnership incurred on its
behalf and not as expenses of the General Partner.
7.11 Indemnification
The Partnership shall indemnify and hold each Partner harmless for and
from all assessments, costs, damages, expenses, fines, judgments, liabilities,
losses, penalties, and reasonable attorney's and paralegal's fees and
disbursements that the Partner may incur as a result of the Partner's status as
a Partner or in the course of the performance of the Partner's rights and
obligations under this Agreement, including without limitation, the General
Partner's rights and obligations as the General Partner; provided, however, a
Partner shall not be indemnified by the Partnership for any of the foregoing
resulting from the Partner's fraud, gross negligence, willful misconduct, or
intentional breach of any provision of this Agreement. Any indemnification
pursuant to this Section 7.11 shall be made only out of the assets of the
Partnership, and neither the General Partner nor any Limited Partner shall have
any obligation to contribute to the capital of the Partnership or otherwise
provide funds to enable the Partnership to fund its obligations under this
Section 7.11. The Partnership shall have the power, but not the obligation, at
the sole discretion of the General Partner, to indemnify any individual who is
or was an employee, officer, director or agent of either the Partnership or any
Partner to the same extent as if such individual was a Partner.
-16-
7.12 Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in
this Agreement, the General Partner shall not be liable for monetary damages to
the Partnership, any Partners or any assignees for any losses, claims, damages,
liabilities, expenses, judgments, fines, settlements or other amounts incurred
due to acts or omissions of the General Partner, except if such losses, claims,
damages, liabilities, expenses, judgments, fines, settlements or other amounts
arose out of or resulted from gross negligence, fraud, intentional misconduct or
a knowing violation of Law by the General Partner when it had reasonable cause
to believe such action giving rise to the violation was unlawful.
B. Subject to its general powers and authorizations as
the General Partner set forth in this Article VII, the General Partner may
exercise any of the powers granted to it by this Agreement and perform any of
the duties imposed upon it hereunder either directly or by or through its
agents. The General Partner shall not be responsible for any willful misconduct
or gross negligence on the part of any such agent appointed or engaged by it in
good faith.
C. Any amendment, modification or repeal of this Section
7.12 or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the Genera] Partner's liability to the Partnership and
the Limited Partners under this Section 7.12 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or
relating to acts or events occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
7.13 Reorganization of Partnership. The General Partner shall have
the power and authority to change or reorganize the Partnership into any other
legal form without the consent of the Limited Partners, so long as it does not
materially and adversely affect the Limited Partners for federal income tax
purposes.
ARTICLE VIII
TRANSFERS OF INTEREST BY THE PARTNERS
8.1 Assignment of Limited Partner's Interest. A Limited Partner's
Interest shall not be sold, transferred, assigned, pledged or otherwise disposed
of, in whole or in part, without the prior written consent of all of the
Partners to such transfer; provided, however, that consent of the Partners shall
not be required for a transfer by a Partner to either an Affiliate of such
Partner or to another Partner.
8.2 Transfer of General Partner's General Partner Interest
(a) The General Partner may, at any time and in its
exclusive discretion, (i) transfer all or part of its General Partner Interest
and (ii) withdraw as General Partner, including
-17-
pursuant to a merger, consolidation or other combination of the Partnership with
another entity now or hereafter permitted under the Act.
(b) A transferee of a General Partnership Interest is
admitted as a General Partner only if the admission as a General Partner is
approved by the written consent of two-thirds (2/3) in interest of the
Interests held by the Limited Partners, which the Limited Partners may give or
withhold in their exclusive discretion.
(c) A transferee who acquires any interest from a General
Partner, but who is not admitted as a General Partner, has no authority to act
for or bind the Partnership, or otherwise to be treated as a General Partner.
Such transferee in this situation is a Limited Partner.
ARTICLE IX
DISSOLUTION OF THE PARTNERSHIP
9.1 Events of Dissolution. The Partnership may be dissolved upon
the happening of the first to occur of the following events:
(a) by the unanimous written consent of all of the
Partners; or
(b) with respect to the last remaining General Partner,
the resignation, withdrawal, bankruptcy, death, dissolution, incompetency or
removal as provided by law, of such General Partner, unless within ninety (90)
days from the occurrence of any event described above the remaining Partners
elect in writing to continue the business of the Partnership, and select in
writing and admit a new General Partner (the admission of a new General Partner
shall be effective on the date an amendment to the Certificate of Limited
Partnership is filed under the Act).
9.2 Distribution of Assets Upon Dissolution. Upon dissolution of
the Partnership, the General Partner shall proceed to wind up the affairs of the
Partnership, liquidate the remaining assets of the Partnership and terminate the
Partnership. The proceeds of such liquidation shall be applied in the following
order of priority:
(1) First, to the expenses of such liquidation;
(2) Second, to the debts and liabilities of the Partnership,
if any, in the order of priority provided by law;
(3) Third, a reasonable reserve shall be set up to provide for
any contingent or unforeseen liabilities or obligations of the Partnership to
third parties (to be held and disbursed, at the discretion of the General
Partner, by an escrow agent selected by it); provided that at the expiration of
such period of time as the General Partner may deem advisable, the balance of
such reserves remaining after the payment of such contingencies or liabilities
shall be distributed as hereinafter provided; and
-18-
(4) Finally, among the Partners in accordance with the
positive balances in their Capital Accounts.
9.3 Form of Payments Upon Dissolution. All payments pursuant to
Section 9.2 shall be made in cash unless the General Partner shall determine
that any such payment shall be made in kind, or partly in cash and partly in
kind.
9.4 Termination of Partnership and Cancellation of Certificate of
Limited Partnership. Upon the completion of the liquidation of the Partnership
and the distribution of all cash and property as provided in Section 9.2 hereof,
the Partnership shall be terminated, a certificate of cancellation shall be
filed, and all qualifications of the Partnership as a foreign limited
partnership in any jurisdiction other than the State of North Carolina shall be
canceled and such other actions as may be necessary to terminate the Partnership
shall be taken.
ARTICLE X
BOOKS AND RECORDS; FINANCIAL STATEMENTS AND REPORTS
10.1 Books and Records: Inspection. The General Partner shall keep
the books of account of the Partnership in accordance with generally accepted
accounting practices, taking into account that the Partnership shall use an
accrual basis method of accounting. Each Partner shall have full right and power
to examine such books of accounts and all other records and accounts of the
Partnership at the principal office of the Partnership during regular business
hours and on reasonable notice.
10.2 Tax Information for Partners. The Partnership shall provide to
each Partner information that is relevant to reporting Partnership income. The
information shall enable each Partner to prepare its federal, state and local
income tax returns. This information shall be furnished to the Partners as
promptly as practicable.
10.3 Bank Accounts. All funds of the Partnership shall be deposited
in its name in an account or accounts maintained with such bank(s) as is (are)
determined by the General Partner. The funds of the Partnership shall not be
commingled with the funds of any other Person. Checks shall be drawn upon the
Partnership account or accounts only for the purposes of the Partnership and
shall be signed by the General Partner or such Person or Persons as are
authorized by the General Partner.
-19-
ARTICLE XI
BINDING, EFFECT, AMENDMENTS, CONSENTS AND NOTICES
11.1 Successors and Assigns. Except as otherwise specifically
herein provided, this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the respective parties hereto.
11.2 Amendment. This Agreement may only be amended with the consent
of all of the Partners.
11.3 Consents and Waivers. No consent to a change in, or waiver of
any breach of, any of the terms of this Agreement shall be effective unless such
consent or waiver is in writing and signed by the Partner against which such
consent or waiver is claimed. No consent or waiver shall be deemed a consent or
waiver with respect to any term or breach other than that as to which it has
been specifically given.
11.4 Notice. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any party to any other
party shall be in writing and shall be deemed to have been given (a) upon
personal delivery, if delivered by hand, (b) three days after the date of
deposit in the mails, or (c) the next business day if sent by facsimile
transmission or by an overnight courier service, and in each case of mailing,
postage prepaid and at the principal corporate office of the party or such other
address as such party may have fixed by notice to the other parties.
ARTICLE XII
MISCELLANEOUS
12.1 Sole Agreement. This Agreement supersedes all prior agreements
and understandings among the Partners with respect to the subject matter hereof.
12.2 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
12.3 Third Party Claims. No Person other than a Partner shall have
any legal or equitable right, remedy or claim under or in respect of this
Agreement.
12.4 Partition. The Partners hereby waive all rights to bring an
action for partition of Partnership property or any like remedy which would
result in the enforced sale of such property.
-20-
12.5 Severability. If any provision of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
12.6 Further Assurances. Each Partner shall execute such deeds,
assignments, endorsements, evidences of transfer and other instruments and
documents and shall give such further assurances as shall be necessary to
perform its obligations hereunder.
12.7 Governing Law. This Agreement, and the rights of the Partners
hereunder, shall be governed by and construed in accordance with the laws of the
State of North Carolina.
12.8 Headlines. The headings of this Agreement are for purposes or
references only and shall in no way affect any of the terms or provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
INNOVEX AMERICA HOLDING COMPANY,
as the General Partner
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxx Xxxxxxx, President
INNOVEX NEVADA LIMITED
PARTNERSHIP
as a Limited Partner
By: Quintiles Pacific, Inc., General Partner
By: /s/ Xxxx Xxxxxxx
---------------------------
Xxxx Xxxxxxx
Vice President
-21-
SCHEDULE 3.1
Limited Partner's Capital Contribution
Innovex Nevada Limited Partnership will transfer $9,900 cash in exchange for a
99% limited partnership interest in Innovex Support Services Limited Partnership
SCHEDULE 3.2
General Partner's Capital Contribution
Innovex America Holding Company will transfer $100 cash in exchange for a 1%
general partnership interest in Innovex Support Services Limited Partnership
