SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CAPROCK FIBER NETWORK, LTD.
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.01 Terms Defined . . . . . . . . . . . . . . . . . . . . . . . .2
1.02 Number and Gender . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE II
GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.01 Continuation; Admission . . . . . . . . . . . . . . . . . . .5
2.02 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.03 Principal Place of Business; Registered Office; Registered
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.04 Purposes. . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.05 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE III
CAPITAL CONTRIBUTIONS - PARTNERSHIP INTERESTS. . . . . . . . . . . . . . . .6
3.01 Initial Capital Contributions . . . . . . . . . . . . . . . .6
3.02 Additional Capital Contributions. . . . . . . . . . . . . . .6
3.03 Failure to Make Required Contributions. . . . . . . . . . . .6
3.04 Capital Accounts. . . . . . . . . . . . . . . . . . . . . . .6
3.05 Partner Loans . . . . . . . . . . . . . . . . . . . . . . . .7
3.06 Other Matters Relating to Capital Contributions . . . . . . .7
3.07 Deficit Capital Account Balances. . . . . . . . . . . . . . .7
ARTICLE IV
RIGHTS AND POWERS OF THE GENERAL PARTNER . . . . . . . . . . . . . . . . . .8
4.01 Duties of General Partner . . . . . . . . . . . . . . . . . .8
4.02 Reliance by Third Parties . . . . . . . . . . . . . . . . . .8
4.03 Management of Business. . . . . . . . . . . . . . . . . . . .8
4.04 Operating Reserve Account . . . . . . . . . . . . . . . . . .9
4.05 Payment of Costs and Expenses . . . . . . . . . . . . . . . .9
4.06 Exercise of Rights and Powers . . . . . . . . . . . . . . . .9
4.07 Compensation. . . . . . . . . . . . . . . . . . . . . . . . .9
4.08 Liability . . . . . . . . . . . . . . . . . . . . . . . . . .9
4.09 Indemnification . . . . . . . . . . . . . . . . . . . . . . .9
4.10 Tax Matters Partner . . . . . . . . . . . . . . . . . . . . 10
4.11 Guaranty of Debt; Guaranty and Commitment Fees. . . . . . . 11
4.12 Construction Management . . . . . . . . . . . . . . . . . . 11
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4.13 Network Administration. . . . . . . . . . . . . . . . . . . 12
ARTICLE V
LIMITED PARTNER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.01 Limitation of Liability . . . . . . . . . . . . . . . . . . 12
5.02 Management. . . . . . . . . . . . . . . . . . . . . . . . . 12
5.03 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.04 Power of Attorney . . . . . . . . . . . . . . . . . . . . . 12
5.05 Death, Bankruptcy, Etc. . . . . . . . . . . . . . . . . . . 13
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . 13
6.01 Allocation of Net Income and Loss from Operations . . . . . 13
6.02 Distributions of Cash Flow from Operations
and Major Capital Events. . . . . . . . . . . . . . . . . . 14
6.03 Limitations on Allocations. . . . . . . . . . . . . . . . . 14
6.04 Distributions Upon Liquidation of Partnership . . . . . . . 16
6.05 Liquidation of Partners Interest. . . . . . . . . . . . . . 16
6.06 In-Kind Distributions . . . . . . . . . . . . . . . . . . . 17
6.07 Additional Tax Allocation Provisions. . . . . . . . . . . . 17
ARTICLE VII
FISCAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.01 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . 18
7.02 Books and Records . . . . . . . . . . . . . . . . . . . . . 18
7.03 Reports and Statements. . . . . . . . . . . . . . . . . . . 18
7.04 Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.05 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . 19
7.06 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . 19
7.07 Tax Elections . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.01 Restriction on Transfers. . . . . . . . . . . . . . . . . . 19
8.02 Permitted Sales after Right of First Refusal Is Given . . . 19
8.03 Permitted Transfers . . . . . . . . . . . . . . . . . . . . 20
8.04 Assumption by Transferee. . . . . . . . . . . . . . . . . . 21
8.05 Cost of Transfers . . . . . . . . . . . . . . . . . . . . . 21
8.06 Effect of Attempted Disposition in Violation of this
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 21
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ARTICLE IX
RESIGNATION, WITHDRAWAL AND REMOVAL OF GENERAL PARTNER:
ADMISSION OF NEW GENERAL PARTNER . . . . . . . . . . . . . . . . . . . . . 21
9.01 Voluntary Resignation or Withdrawal of the General Partner. 21
9.02 Substitute and Additional General Partners. . . . . . . . . 21
9.03 Admission of a Successor General Partner. . . . . . . . . . 21
ARTICLE X
DISSOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.01 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . 22
10.02 Wind-Up of Affairs. . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.01 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . 23
11.02 Other Activities. . . . . . . . . . . . . . . . . . . . . . 23
11.03 Partition . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.05 Provisions Severable. . . . . . . . . . . . . . . . . . . . 23
11.06 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 23
11.07 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.08 Successors and Assigns. . . . . . . . . . . . . . . . . . . 24
11.09 APPLICABLE LAW. . . . . . . . . . . . . . . . . . . . . . . 24
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CAPROCK FIBER NETWORK, LTD.
This Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. (the "Agreement") is entered into by and among
CapRock Systems, Inc., a Texas corporation ("CapRock") as the general partner
(the "General Partner"), and Xxxx X. Xxxxxxxx, Xx. ("Xxxx Xxxxxxxx"),
Xxxxxxxx Xxxxxx Xxxxxxxx ("Xxxxx Xxxxxxxx"), Xxxxxxx X. Xxxxxxxx ("Xxxxxxx
Xxxxxxxx"), Xxxxxxx X. Xxxxxxxx ("Xxx Xxxxxxxx"), Xxxxxxxx X. Xxxxxxxx ("Xxx
Xxxxxxxx"), Xxxxxxxx X. Xxxxxx ("Xxxxxx Xxxxxx"), Xxxxxxxxxxx X. Xxxxxxxx
("Xxxxx Xxxxxxxx"), Xxxxx X. Xxxxxxxx ("Xxxxx Xxxxxxxx") (collectively, the
"Xxxxxxxx Family"), Xxxx Xxxxxxxx ("Xxxxxxxx"), Xxxx X. Xxxxxxxx, Xx.
("Xxxxxxxx"), The Hayden Company, a Texas corporation ("Hayden"), Xxx X.
Xxxxxxxx, Xx. ("Xxxxx Xxxxxxxx"), and The Florida Company, a Texas
corporation ("Florida") as the limited partners (the "Limited Partners").
R E C I T A L S:
A. CapRock Fiber Network, Ltd., a Texas limited partnership (the
"Partnership") was formed by that certain Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. (the "Original Agreement).
B. The Original Agreement was amended and restated by that certain
Amended and Restated Agreement of Limited Partnership of CapRock Fiber
Network, Ltd. dated May 31, 1993 (the "Amended Agreement").
C. The General Partner and the Limited Partners desire to amend the
Amended Agreement to (i) admit Hayden, Florida and Xxxxx Xxxxxxxx as Limited
Partners, (ii) increase the interests in the Partnership of Xxxxxxxx and
Langdale, (iii) amend the allocation and distribution provisions to account
for a construction loan which has been guaranteed by certain of the Partners,
(iv) modify the purposes of the Partnership, and (v) otherwise amend the
Amended Agreement as set forth herein.
AGREEMENT:
NOW THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the General Partner and the
Limited Partners agree as follows:
ARTICLE I
DEFINITIONS
1.01 TERMS DEFINED. When used in this Agreement, the following terms
shall have the meanings set forth below:
"Act" shall mean the Texas Revised Limited Partnership Act as set
forth in Vernon's Revised Civil Statutes Annotated Article 6132a-1, as
subsequently amended.
"Affiliate" shall mean a Person who is (i) directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under
common control with the Person in question, or (ii) a spouse, child,
grandchild, parent, sibling or any Person controlled by any of the
foregoing, of the Person in question, or in case of a Person other than an
individual, the individual who controls the Person in question. For
example, a trust for the benefit of the grandchild of the controlling
shareholder of a Partner that is a corporation, would be treated as an
Affiliate. The term "control," as used in the immediately preceding
sentence, means, with respect to an entity that is a corporation, the right
to exercise, directly or indirectly, more than 50% of the voting rights
attributable to the shares of such corporation and, with respect to a
Person that is not a corporation, the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies
of such Person.
"Capital Contribution" shall mean the cash and the fair market value
of property other than cash (net of liabilities which the Partnership
assumes or takes the property subject to) contributed to the capital of the
Partnership by a Partner.
"Cash Flow" shall mean, for the period in question, or in the case of
a Major Capital Event, the event in question, the amount by which the
aggregate cash receipts of the Partnership from any source (including loans
and Capital Contributions) exceed the sum of the cash expenditures of the
Partnership plus a cash reserve in the amount determined by the General
Partner to be sufficient to meet the working capital requirements of the
Partnership.
"Certificate" shall mean the Amended and Restated Certificate of
Limited Partnership to be filed upon behalf of the Partnership with the
Secretary of State of Texas in accordance with all applicable statutes.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations thereunder.
"Commitment Fee" shall mean a fee payable to each Guarantor in an
amount equal to 1% of such Guarantor's Guaranty.
"Construction Lender" shall mean Bank One, Texas, National
Association, or such other Person who refinances the Construction Loan or
becomes a successor in interest to Bank One, Texas, National Association
with respect to the Construction Loan.
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"Construction Loan" shall mean the loan made by the Construction
Lender to the Partnership in an amount sufficient to construct, and
initiate operations of, the Network.
"General Partner" shall mean CapRock, so long as such Person shall
continue as a general partner hereunder, and any other Person who has been
admitted as and continues to be, a general partner of the Partnership.
"Guarantors" shall mean Xxxx Xxxxxxxx, Xxxxxx, Florida, Xxxxx Xxxxxxxx
and Xxxx Xxxxxxxx.
"Guaranty" shall mean with respect to each Guarantor, the limited and
several amount of the Construction Loan which has been personally
guaranteed by such Guarantor in accordance with Section 4.11.
"Guaranty Fee" shall mean an annual amount payable to each Guarantor
equal to 7% (pro-rated for partial years) of the product of (i) the amount
of such Guarantor's Guaranty multiplied by (ii) a fraction, the numerator
of which is the lesser of (A) $8,000,000, or (B) the average outstanding
daily principal under the Construction Loan during the applicable period
and the denominator of which is $8,000,000.
"Limited Partners" shall mean Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxx Xxxxxxxx, Xxxxxx Xxxxxx, Xxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxxx
Xxxxxxxx, Xxxxxxxx, Thompson, Hayden, Florida and Xxxxx Xxxxxxxx so long as
each such Person shall continue as a limited partner hereunder, and any
other Person who has been admitted as, and who continues to be, a limited
partner of the Partnership.
"Liquidating Event" shall mean the sale, condemnation or exchange of
all or substantially all of the Network or other transaction which,
individually or together with any similar transaction or transactions,
results in the disposition of all or substantially all of the Network and
occurs in the course of liquidation of the Partnership, or upon and with
respect to which event the Partnership is wound up and all payments,
including payments on any promissory notes, have been received.
"Major Capital Event" shall mean any event (excluding a Liquidating
Event) arising other than in the ordinary course of the Partnership's
business, including, without limitation, (i) the sale, exchange or
disposition of less than substantially all of the Network; (ii) a
condemnation or disposition of less than substantially all of the Network;
(iii) the recovery of damage awards or settlements or insurance proceeds
from the loss of or damage to the Network, and (iv) a borrowing or
refinancing by the Partnership. The General Partner's designation of an
event as a Major Capital Event shall be binding upon the Partners and the
Partnership absent manifest error.
"Majority in Interest" shall mean Partners (or Partners of a
designated class) owning more than 50% of the Partnership Interests (or
Partnership Interests of the designated class).
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"Network" shall mean the fiber optic telecommunications network to be
constructed, maintained and operated by the Partnership and initially
located between Corpus Christi and Houston, Texas, as may be expanded or
modified by agreement among the General Partner and a Majority in
Interest of the Limited Partners.
"Operations" shall mean all activities arising in the ordinary course
of the Partnership's business not constituting a Major Capital Event or a
Liquidating Event.
"Partners" shall mean the General Partner and the Limited Partners.
"Partner" shall mean any one of the Partners.
"Partnership" shall mean the limited partnership created and existing
pursuant hereto.
"Partnership Interest" shall mean a Partner's interest, expressed as a
percentage in Exhibit "A" in the income, gains, losses, deductions, tax
credits, voting rights and distributions of the Partnership as may be
affected by the provisions of this Agreement and as may thereafter be
adjusted.
"Person" shall mean an individual, partnership, joint venture,
corporation, limited liability company, trust, estate or other entity or
organization.
"Preferred Return" shall mean, with respect to each Guarantor, a
cumulative rate of return equal to twelve percent (12%) per annum,
compounded annually, on such Guarantor's Unreturned Capital Contributions.
"Proceeding" means any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such an action, suit or proceeding, and any
inquiry or investigation that could lead to such an action, suit or
proceeding.
"Section" shall mean any section or subsection in this Agreement.
"Service" shall mean the Internal Revenue Service.
"The Xxxxxxxx Family" shall mean Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxx Xxxxxxxx, Xxxxxx Xxxxxx, Xxx Xxxxxxxx, Xxxxx Xxxxxxxx
and Xxxxx Xxxxxxxx.
"Transfers" shall mean the sale, transfer, conveyance, assignment,
pledge, hypothecation, mortgage or other encumbrance or disposition of all
or any part of a Partnership Interest.
"Unpaid Preferred Return" shall mean, as to each Guarantor, an amount
equal to such Guarantor's Preferred Return less distributions previously
made to such Guarantor pursuant to Section 6.02 (a)from and after the date
of this Agreement.
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"Unreturned Capital Contributions" shall mean, as to each
Guarantor, the aggregate Capital Contributions made to the Partnership
by such Guarantor from and after the date of this Agreement pursuant to
Section 3.02(b), reduced by the aggregate distributions to such
Guarantor from and after the date of this Agreement from the Partnership
pursuant to Section 6.02(b).
1.02 NUMBER AND GENDER. Whenever the context requires, references in
this Agreement to the singular number shall include the plural, and the
plural number shall include the singular, and words denoting gender shall
include the masculine, feminine and neuter.
ARTICLE II
GENERAL
2.01 CONTINUATION; ADMISSION.
(a) The Partners hereby continue the Partnership as a limited
partnership pursuant to the Act for the purposes described in Section
2.04. The General Partner shall execute and file on behalf of the
Partners and the Partnership a Certificate in accordance with applicable
statutory requirements in such offices and places as may be required by
the laws of the State of Texas.
(b) As of the effective date of this Agreement, Hayden, Florida
and Xxxxx Xxxxxxxx are admitted to the Partnership as Limited Partners,
and the Partnership Interests of the Partners shall be as set forth in
Exhibit "A".
2.02 NAME. The business of the Partnership shall be conducted under the
name "CapRock Fiber Network, Ltd."
2.03 PRINCIPAL PLACE OF BUSINESS; REGISTERED OFFICE; REGISTERED AGENT. The
principal place of business, the principal office and the registered office of
the Partnership shall be at 00000 Xxxx Xxxx, Xxxxx 0000, Xxxxxxx 00, Xxxxxx,
Xxxxx 00000. The General Partner may change the principal place of business of
the Partnership to any other place upon ten (10) days written notice to the
Limited Partners. The registered agent shall be Xxxx X. Xxxxxxxx, Xx.
2.04 PURPOSES. The purposes of the Partnership shall be:
(a) to finance, construct, own and operate the Network;
(b) to perform all acts which are appropriate or necessary in
conjunction with the Partnership financing, constructing, owning
and operating the Network; and
(c) to do any and all other acts and things necessary,
incidental or convenient to carry on the Partnership business as
contemplated under this Agreement.
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2.05 TERM. The Partnership shall continue until terminated pursuant to
Section 10.01.
ARTICLE III
CAPITAL CONTRIBUTIONS - PARTNERSHIP INTERESTS
3.01 INITIAL CAPITAL CONTRIBUTIONS. As of the effective date of this
Agreement, the Partnership has issued Partnership Interests to each of the
Guarantors in consideration of their Guaranties. Each of the other Partners,
or their predecessor's in interest, has previously contributed cash or
property to the Partnership.
3.02 ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) No Partner shall be obligated to make any Capital Contributions
to the Partnership.
(b) If a Guarantor makes payments to the Construction Lender pursuant
to its obligation under the applicable Guaranty, such payment shall be
treated as a Capital Contribution to the Partnership.
3.03 FAILURE TO MAKE REQUIRED CONTRIBUTIONS. Any Guarantor who fails or
refuses to make any payment to the Construction Lender required under such
Guarantor's Guaranty by any applicable due date (including all extensions and
cure periods) shall forfeit its Partnership Interest (but in the cases of
Langdale and Xxxx Xxxxxxxx, only the portion of their respective Partnership
Interest received as consideration for their Guaranty) to the remaining
Guarantors, who shall be entitled to receive such interest pro rata based
upon the amount of such Guarantors' Guaranties. Such forfeiture will occur
automatically upon such failure or refusal to pay without necessity of any
further action.
3.04 CAPITAL ACCOUNTS. The Partnership shall establish and maintain a
capital account ("Capital Account") for each Partner in accordance with Section
704(b) of the Code and Treasury Regulations Section 1.704-1(b)(2)(iv). Except as
otherwise provided in this Agreement, the Capital Account balance of each
Partner shall be credited (increased) by (i) the amount of cash contributed or
deemed contributed by such Partner to the capital of the Partnership, (ii) the
fair market value of property contributed or deemed contributed by such Partner
to the capital of the Partnership (net of liabilities secured by such property
that the Partnership assumes or takes subject to), (iii) such Partner's
allocable share of Partnership income and gain (or items thereof) including
income and gain exempt from federal taxation, and (iv) such Partner's share of
any increase in basis of Partnership "Section 38" property pursuant to Section
48(q) of the Code, and the Capital Account balance of each Partner shall be
debited (decreased) by (i) the amount of cash distributed to such Partner, (ii)
the fair market value of property distributed to such Partner (net of
liabilities secured by such property which the Partner assumes or takes subject
to), (iii) such Partner's share of Partnership losses, depreciation and other
deductions, including such Partner's share of expenditures of the Partnership
described in Section 705(a)(2)(B) of the Code and (iv) such Partner's share of
any
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reduction in basis of Partnership "Section 38" property pursuant to Section
48(q) of the Code. A Partner's share of any basis reduction or increase
pursuant to Section 48(q) of the Code shall be determined in the manner
prescribed by Treasury Regulations Section 1.46-3(f). Notwithstanding the
foregoing, a Partner's Capital Account shall not be adjusted to reflect gain
or loss attributable to the disposition of property contributed by such
Partner to the extent such Partner's Capital Account reflected such inherent
gain or loss in the property on the date of its contribution to the
Partnership.
3.05 PARTNER LOANS. A Partner, or an Affiliate of a Partner, may, but is
not obligated to, loan or cause to be loaned to the Partnership such
additional sums as the General Partner deems appropriate or necessary for the
conduct of the Partnership's business. Loans made by a Partner, or an
Affiliate of a Partner, shall be upon such terms and for such maturities as
the General Partner deems reasonable in view of all the facts and
circumstances and the repayment of which may be designated in priority to
distributions of Cash Flow.
3.06 OTHER MATTERS RELATING TO CAPITAL CONTRIBUTIONS.
(a) Loans by any Partner to the Partnership shall not be
considered contributions to the capital of the Partnership.
(b) No Partner shall be required to make contributions to the
capital of the Partnership except to the extent expressly provided by
this Article III.
(c) No Partner shall be entitled to withdraw, or to obtain a return
of, any part of his or her contribution to the capital of the
Partnership, or to receive property or assets other than cash in return
thereof, and no Partner shall be liable to any other Partner for a
return of his or her contributions to the capital of the Partnership,
except as provided in this Agreement.
(d) No Partner shall be entitled to priority over any other
Partner, either with respect to a return of his or her contributions to
the capital of the Partnership, or to allocations of taxable income,
gains, losses or credits, or to distributions, except as provided in
this Agreement.
(e) No interest shall be paid on any Partner's Capital Contributions.
3.07 DEFICIT CAPITAL ACCOUNT BALANCES. Upon liquidation of the
Partnership, no Limited Partner with a deficit balance in his or her Capital
Account shall have any obligation to restore such deficit balance, or to make
any contribution to the capital of the Partnership. Upon liquidation of the
Partnership, the General Partner shall be obligated to contribute to the
capital of the Partnership within ninety (90) days after the date of such
liquidation an amount equal to the lesser of its deficit Capital Account
balance or 1.01% of the aggregate Limited Partner Capital Contributions less
the aggregate Capital Contributions previously made by the General Partner
which amount shall be paid to the creditors of the Partnership or distributed
to the other Partners in accordance with their positive Capital Account
balances.
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ARTICLE IV
RIGHTS AND POWERS OF THE GENERAL PARTNER
4.01 DUTIES OF GENERAL PARTNER. The General Partner shall have full,
exclusive and complete discretion to manage and control the business and
affairs of the Partnership, to make all decisions affecting the business and
affairs of the Partnership, and to take all actions it deems necessary or
appropriate to accomplish the purposes of the Partnership. The rights, powers
and authorities of the General Partner shall include, without limitation,
absolute authority to (i) perform all acts, make all decisions and perform
all duties which are appropriate or necessary in conjunction with the
fulfillment of the Partnership purposes, and (ii) negotiate, execute and
deliver any and all documents appropriate or necessary to accomplish any of
the foregoing. The rights, powers and authorities of the General Partner
pursuant to this Agreement shall be liberally construed to encompass all acts
and activities in which a Limited Partnership may engage under the act. The
expression of any power, authority or right of the General Partner in this
Agreement shall not limit or exclude any other power, authority or right
which is not specifically or expressly set forth in this Agreement or the act.
4.02 RELIANCE BY THIRD PARTIES. Notwithstanding any other provision of
this Agreement to the contrary, no lender or purchaser, including any
purchaser of property from the Partnership or any other person dealing with
the Partnership, shall be required to look to the application of proceeds
hereunder or to verify any representation by the General Partner as to the
extent of the interest in the assets of the Partnership that the General
Partner is entitled to encumber, sell or otherwise use, and any such lender
or purchaser shall be entitled to rely exclusively on the representations of
the General Partner as to its authority to enter into such financing or sale
arrangement and shall be entitled to deal with the General Partner as to its
authority to enter into such financing or sale arrangement and shall be
entitled to deal with the General Partner as if it were the sole party in
interest therein, both legally and beneficially. In no event shall any Person
dealing with the General Partner's representative with respect to any
business or property of the Partnership be obligated to ascertain that the
terms of this Agreement have been complied with, or be obligated to inquire
into the necessity or expedience of any act or action of the General Partner
or the General Partner's representative. Every contract, agreement, deed,
mortgage, security agreement, promissory note or other instrument or document
executed by the General Partner or the General Partner's representative with
respect to the business or property of the Partnership shall be conclusive
evidence in favor of any and every Person relying thereon or claiming
thereunder that (a) at the time of the execution and/or delivery thereof;
this Agreement was in full force and effect, (b) such instrument or document
was duly executed in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership, and (c) the General Partner or
the General Partner's representative was duly authorized and empowered to
execute to deliver any and every such instrument or document for and on
behalf of the Partnership.
4.03 MANAGEMENT OF BUSINESS. The General Partner shall operate and
manage the business of the Partnership on a day-to-day basis. Notwithstanding
the foregoing, the General Partner shall have the right, in its sole
discretion, to employ any competent management company as it shall select to
perform said management services.
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4.04 OPERATING RESERVE ACCOUNT. To the extent funds of the Partnership
are sufficient therefor, the General Partner shall maintain an adequate
reserve for operating expenses and capital expenditures as deemed necessary
by the General Partner for the proper conduct of the business of the
Partnership.
4.05 PAYMENT OF COSTS AND EXPENSES. The Partnership shall be responsible
for paying all costs and expenses of forming and continuing the Partnership,
and conducting the business of the Partnership, including, without
limitation, costs of utilities, costs of furniture, fixtures, equipment and
supplies, insurance premiums, property taxes, accounting costs, legal
expenses and office supplies. If any such costs and expenses are or have been
paid by the General Partner, or any of its Affiliates, on behalf of the
Partnership, then such General Partner (or its Affiliates) shall be entitled
to be reimbursed for such payment so long as such cost or expense was
reasonably necessary and was reasonable in amount.
4.06 EXERCISE OF RIGHTS AND POWERS. The General Partner shall endeavor
to operate and manage the business of the Partnership to the best of its
ability, in a careful and prudent manner and in accordance with good industry
practice. The authority of the General Partner to take any action required or
permitted under the provisions of this Agreement shall in all respects be
exercised in its sole and absolute discretion, and the General Partner shall
be required to devote only such time to the performance of its duties and
obligations hereunder as it shall, in its sole and absolute discretion,
determine to be necessary or advisable. The General Partner shall be entitled
to deal with its Affiliates in the performance of its duties and obligations
under this Agreement, so long as the material terms and conditions of such
dealings are not substantially different from the prevailing market terms,
conditions and prices available from non-Affiliated third parties.
4.07 COMPENSATION. Except as otherwise expressly provided in this
Agreement, the General Partner and its Affiliates shall not be entitled to
receive any compensation from the Partnership. This Section 4.07 does not in
any way limit the General Partner's right to reimbursement pursuant to
Section 4.05.
4.08 LIABILITY. The General Partner shall endeavor to perform its duties
under this Agreement with ordinary prudence and in a manner reasonable under
the circumstances. The General Partner shall not be liable to the Partnership
or the Limited Partners for any loss or liability caused by any act, or by
the failure to do any act, unless such loss or liability arises from the
General Partner's intentional misconduct, gross negligence or fraud. In no
event shall the General Partner be liable by reason of a mistake in judgment
made in good faith, or action or lack of action based on the advice of legal
counsel. Further, the General Partner shall in no event be liable for its
failure to take any action unless it is specifically directed to take such
action under the terms of this Agreement.
4.09 INDEMNIFICATION. Upon the determInation as set forth in Section
11.06 of the Act that such indemnification is permissible under Section 11.02
of the Act, the Partnership (but not the Limited Partners) hereby indemnifies
and holds harmless any person or entity who is or was a General Partner (and
its Affiliates) against any and all losses, costs, expenses (including
reasonable attorneys' fees), penalties, taxes, fines, settlements, damages
and judgments resulting from the fact
9
the General Partner was, is or is threatened to be named a defendant or
respondent in a Proceeding because such person was or is a General Partner in
the Partnership, even if such losses, costs, expenses etc. were the result of
the General Partner's own negligence. This indemnification shall only be
effective if the General Partner (i) acted in good faith, (ii) reasonably
believed that in instances that the General Partner was acting in its
official capacity that its conduct was in the Partnership's best interest and
in all other instances that the General Partner's conduct was not opposed to
the Partnership's best interests, and (iii) in a criminal proceeding, had no
cause to believe its conduct was unlawful. Notwithstanding the foregoing,
this indemnification shall in no event be applicable to a Proceeding in which
the General Partner has been found to be liable for intentional misconduct,
gross negligence or fraud in the performance of the General Partner's duty to
the Partnership or the Limited Partners.
4.10. TAX MATTERS PARTNER.
(a) The General Partner is hereby designated as the "tax matters
partner" of the Partnership (as defined in the Code) and is authorized and
required to represent the Partnership (at the Partnership's expense) in
connection with all examinations of the Partnership's affairs by tax
authorities, including resulting administrative and judicial proceedings,
and to expend Partnership finds for professional services and costs
associated therewith. The Limited Partners agree to cooperate with the
General Partner and to do or refrain from doing any or all things
reasonably required by the General Partner to conduct such proceedings.
(b) The General Partner is authorized to:
(i) enter into a settlement agreement with the Service with
respect to any tax audit or judicial review, in which agreement the
General Partner may expressly state that the agreement will bind all
Partners;
(ii) file a petition for judicial review of a final
administrative adjustment pursuant to section 6226 of the Code;
(iii) intervene in any action brought by any other Partner
for judicial review of a final administrative adjustment;
(iv) file a request for an administrative adjustment with
the Service at any time and, if any part of the request is not allowed
by the Service, to file a petition for judicial review with respect to
the request; and
(v) take any other action on behalf of the Partners or the
Partnership in connection with any administrative or judicial tax
proceeding to the extent permitted by applicable law or regulations.
(c) The Partnership will reimburse the General Partner for all
expenses incurred by it in connection with any administrative or judicial
proceeding with respect to the tax liabilities of the Partners.
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4.11. GUARANTY OF DEBT; GUARANTY AND COMMITMENT FEES.
(a) The Guarantors shall severally guaranty the Construction Loan
in the following amounts:
Xxxx Xxxxxxxx $1,000,000
Hayden 2,000,000
Xxxxx Xxxxxxxx 1,000,000
Florida 1,000,000
Langdale 3,000,000
If, for any reason, the Guarantors make payments to the
Construction Lender in satisfaction of all or a portion of their
obligation under their Guarantees, then each Guarantor making such
payment shall receive an additional Partnership Interest in the
Partnership as a Limited Partner equal to 3.00% (after issuance) for
each $1 million paid to the Construction Lender pursuant to such
Guaranty, pro rated for lesser amounts. The additional Partnership
Interest issuable to the Guarantors pursuant to this Section 4.11(a)
shall be derived solely out of the Partnership Interests of the Limited
Partners, including the Partnership Interests of the Guarantors existing
as of the date immediately prior to the effective date of this
Agreement, other than from the Partnership Interests of Xxxxx Xxxxxxxx,
Hayden and Florida. In accordance with Section 3.02(b), amounts paid
pursuant to the Guaranties will be treated as Capital Contributions to
the Partnership.
(b) The Partnership shall pay to the Guarantors the Guaranty Fee.
The Guaranty Fee shall be payable quarterly in arrears commencing
September 30, 1996. The accrued but unpaid Guaranty Fee shall accrue
interest at a rate equal to 12% per annum commencing from and after July
1, 1997. Such interest rate will increase 2% per annum commencing on
July 1, 1998 and each subsequent anniversary date.
(c) The Partnership shall pay the Commitment Fee to each Guarantor.
The accrued but unpaid Commitment Fee shall accrue interest at a rate
equal to 12% per annum commencing from and after July 1, 1997. Such
interest rate will increase 2% per annum commencing on July 1, 1998 and
each subsequent anniversary date.
4.12 CONSTRUCTION MANAGEMENT. CapRock shall manage the construction and
development of the Network on behalf of the Partnership. The Partnership
shall pay to CapRock a fee in an amount equal to the sum of (i) 4% of the
actual cost of constructing the entire Network payable monthly at a minimum
of $15,000 per month commencing on February 1, 1996 and ending on the date
the final payment is made to C&B Associates by the Partnership under all of
its contracts for the construction of the entire Network and (ii) 5% of the
excess of the projected costs of construction and capital expenditures as set
forth in the budget submitted to the Construction Lender ($11,403,845), less
the actual construction costs and capital expenditures incurred in the
construction and start-up of the Network which amount is payable on the date
of the last payment due under (i) above, and is being paid as an inducement
to minimize the cost of the Network's construction and start-up. The
management of the construction and development of the Network shall be
conducted
11
pursuant to that certain Construction Management Agreement to be entered into
between the Partnership and CapRock.
4.13. NETWORK ADMINISTRATION. The Partnership shall retain CapRock
Communications Corp., a Texas corporation, to operate and manage the Network
in accordance with that certain Management and Administration Agreement to be
entered into between the Partnership and CapRock Communications Corp.
ARTICLE V
LIMITED PARTNER MATTERS
5.01 LIMITATION OF LIABILITY. No Limited Partner shall be bound by, or
personally liable for, obligations or liabilities of the Partnership beyond
the amount of his or its required contributions to the capital of the
Partnership, and no Limited Partner shall be required to contribute any
capital to the Partnership in excess of the contributions for which he or it
is personally liable for under Article III.
5.02 MANAGEMENT. No Limited Partner shall participate in the operation
or management of the business of the Partnership, or transact any business
for or in the name of the Partnership, nor shall any Limited Partner have any
right or power to sign for or bind the Partnership in any manner. The right
of the Limited Partners to consent to and approve of certain matters under
the provisions of this Agreement shall not be deemed a participation in the
operation and management of the business of the Partnership, or the exercise
of control over the Partnership's affairs.
5.03 CONSENTS. Any action requiring the consent or approval of the
Limited Partners under the provisions of this Agreement shall be taken only
if the consent or approval of the requisite number of Limited Partners is
evidenced by written instrument executed by such Limited Partners.
5.04 POWER OF ATTORNEY
(a) Each Limited Partner hereby irrevocably severally appoints and
constitutes the General Partner, its successors and assigns hereunder as
its true and lawful attorney-in-fact, with full power and authority, on its
behalf and in its name, to execute, acknowledge, swear to, deliver and,
where appropriate, file in such offices and places as may be required by
law:
(i) the Certificate, and any amendment thereto; and
(ii) any amendment to this Agreement upon compliance with
Article VIII, Article IX or Section 11.01.
(b) The power of attorney granted by the Limited Partners to the
General Partner under paragraph (a) above is a special power coupled with
an interest and is irrevocable, and may be exercised by any Person who at
the time of exercise is a General Partner of the
12
Partnership. Such power of attorney shall survive the death or legal
disability of a Limited Partner ant any Transfers or abandonment of its
Partnership Interest, or its withdrawal from the Partnership.
5.05 DEATH, BANKRUPTCY, ETC. In no event shall the death, incompetency,
bankruptcy, insolvency or other incapacity of a Limited Partner operate to
dissolve the Partnership.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.01 ALLOCATION OF NET INCOME AND LOSS FROM OPERATIONS. Net income and
loss for each fiscal year from Operations shall be determined for financial
accounting purposes in accordance with the method of accounting used for
federal income tax purposes and the books and records of the Partnership.
Except as provided in Sections 6.03 and 6.07(b), income, gain, loss and
deduction shall be allocated among the Partners as set forth below.
(a) Net income and gain shall be allocated to the Partners as
follows:
(i) First, to the Partners pro rata in accordance with,
and in an amount equal to the difference between (A) the sum of the
Cash Flow from Operations and Major Capital Events then
distributable plus the aggregate amount of Cash Flow from
Operations and Major Capital Events previously distributed to the
Partners pursuant to Section 6.02(a), over (b) the aggregate amount
of net income and gain previously allocated to such Partners
pursuant to this Section 6.01(a)(i);
(ii) Next, to the Partners pro rata in accordance with, and
in an amount equal to, the difference between the aggregate net
loss and deduction previously allocated to the partners pursuant to
Section 6.01(b) over the aggregate amount of net income and gain
previously allocated to such Partners pursuant to this Section
6.01(a)(ii);
(iii) Next, to the Partners pro rata in accordance with, and
in an amount equal to the difference between (A) the sum of the
Cash Flow from Operations and Major Capital Events then
distributable plus the aggregate amount of Cash Flow from
Operations and Major Capital Events previously distributed to the
Partners pursuant to Section 6.02(c), over (b) the aggregate amount
of net income and gain previously allocated to such Partners
pursuant to this Section 6.01(a)(iii); and
(iv) Thereafter, 1% to the General Partner, 19.5% to
Xxxxxxxx, 4.5% to Langdale and the remainder among the Partners
(including Xxxxxxxx and Xxxxxxxx) pro rata in accordance with their
Partnership Interests.
(b) Net loss and deduction shall be allocated to the Partners as
follows:
13
(i) First, to the Partners pro rata in accordance with, and
in an amount equal to, their positive Capital Account balances; and
(ii) Thereafter, to Partners pro rata in accordance with
their Partnership Interests.
(c) Notwithstanding anything to the contrary in Section 6.01(b),
any item of net loss or deduction that is attributable to a partner
nonrecourse debt must be allocated to the Partner that bears the
economic risk of loss for such debt as determined under Code Sections
704 and 752, and the Treasury Regulations thereunder. If more than one
Partner bears the economic risk of loss for a partner nonrecourse debt,
any net loss attributable to such debt must be allocated among such
Partners in accordance with the ratios in which the Partners share the
economic risk of loss for such partner nonrecourse debt.
6.02 DISTRIBUTIONS OF CASH FLOW FROM OPERATIONS AND MAJOR CAPITAL
EVENTS. The General Partner shall distribute Cash Flow from Operations and
Major Capital Events when available to the Partners. Notwithstanding the
frequency or amounts of distributions, Cash Flow shall be distributed as
follows:
(a) First, to the Guarantors pro rata in accordance with their
Unpaid Preferred Return, in such amount and until such time as each such
Guarantor's Unpaid Preferred Return has been reduced to zero;
(b) Next, to the Guarantors pro rata in accordance with their
Unreturned Capital Contributions, in such amount and until such time as
each such Guarantor's Unreturned Capital Contributions has been reduced
to zero;
(c) Next, to the Partners pro rata in accordance with their
Partnership Interests until such time as the Guaranties of each
Guarantor other than Langdale have been released in their entirety by
the Construction Lender; and
(d) Thereafter, 1% to the General Partner, 19.5% to Xxxxxxxx, 4.5%
to Langdale and the remainder among the Partners (including Xxxxxxxx and
Langdale) pro rata in accordance with their Partnership Interests.
6.03 LIMITATIONS ON ALLOCATIONS.
(a) MINIMUM GAIN CHARGEBACK. Notwithstanding any provision of
this Article VI, if there is a net decrease in Partnership minimum gain
during any fiscal year or other period, prior to any other allocation
pursuant hereto, each Partner shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent
years) in an amount and manner required by Treasury Regulation Sections
1.704-1T(b)(4)(iv)(e) and (h) and Section 1.704-2. Notwithstanding any
provision of this Article VI, if there is a net decrease in partner
nonrecourse debt minimum gain, any Partner with a share of that partner
nonrecourse debt minimum gain as of the beginning of such year shall be
allocated items of
14
income and gain for the year (and, if necessary, for succeeding years)
equal to that Partner's share of the net decrease in the partner
nonrecourse debt minimum gain, as provided in Treasury Regulation
Section 1.704-2(i)(4).
(b) QUALIFIED INCOME OFFSET. Any Partner who unexpectedly
receives an adjustment, allocation or distribution described in Treasury
Regulation Section 1.704-1(b)(2) (ii)(d)(4), (5) or (6) that causes or
increases a negative balance in its Capital Account beyond the sum of
the amount of such Partner's obligation to restore its deficit Capital
Account plus its share of minimum gain shall be allocated items of
income and gain sufficient to eliminate such increase or negative
balance caused thereby, as quickly as possible, to the extent required
by such Treasury Regulation.
(c) GROSS INCOME ALLOCATION. If any Partner has a deficit
Capital Account at the end of any Partnership fiscal year which is in
excess of the sum of (i) the amount such Partner is obligated to restore
pursuant to any provision of this Agreement and (ii) the amount such
Partner is deemed to be obligated to restore pursuant to Treasury
Regulation Section 1.704-2, each such 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 6.03(c) shall be made only if and to the extent that such
Partner would have a deficit Capital Account in excess of such sum after
all other allocations provided for in this Article VI have been made as
if this Section 6.03(c) were not in this Agreement.
(d) SECTION 704(b) LIMITATION. Notwithstanding any other
provision of this Agreement to the contrary, no allocation of any item
of income or loss shall be made to a Partner if such allocation would
not have "economic effect" pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii) or otherwise be in accordance with its interest in the
Partnership within the meaning of Treasury Regulation Sections
1.704-1(b)(3) and 1.704-2. To the extent an allocation cannot be made to
a Partner due to the application of this Section 6.03(d), such
allocation shall be made to the other Partner(s) entitled or required to
receive such allocation hereunder.
(e) CURATIVE ALLOCATIONS. Any allocations of items of income,
gain, or loss pursuant to Sections 6.03(a)-(d) shall be taken into
account in computing subsequent allocations pursuant to this Article VI,
so that the net amount of any items so allocated and the income, losses
and other items allocated to each Partner pursuant to this Article VI
shall, to the extent possible, be equal to the net amount that would
have been allocated to each Partner had no allocations ever been made
pursuant to Sections 6.03(a)-(d).
(f) MINIMUM ALLOCATIONS TO GENERAL PARTNER. If at any time the
allocation provisions of this Agreement do not result in the General
Partners being allocated at least one percent of all material items of
income, gain, loss, deduction or credit, the General Partner shall be
allocated so much of those items as will cause it at all times during the
existence of the Partnership to be allocated at least one percent of
those items.
15
6.04 DISTRIBUTIONS UPON LIQUIDATION OF PARTNERSHIP.
(a) Upon liquidation of the Partnership the assets of the
Partnership shall be distributed no later than the later of 90 days
after the date of such liquidation or the end of the Partnership s
taxable year in which the liquidation occurs and shall be applied in the
following order of priority:
(i) To the payment of debts and liabilities of the
Partnership (including amounts owed to Partners or former
Partners);
(ii) Unless inconsistent with Treasury Regulation Section
1.704-1(b)(2)(ii)(b), or any successor provision, to set up any
reserves which the General Partner deems reasonably necessary for
contingent or unforeseen liabilities or obligations of the
Partnership arising out of or in connection with the business of
the Partnership; and
(iii) After all Capital Account adjustments for the
Partnership s taxable year in which the liquidation occurs
(including without limitation adjustments required under Treasury
Regulation Section 1.704-1(b)(2)(iv)(e), relating to
distributions in kind), to the Partners in accordance with each
Partner's positive Capital Account balance in the same order as
distributions are made in Section 6.02.
(b) If a transfer of an interest in the Partnership results in a
termination of the Partnership for federal income tax purposes under
Section 708(b)(1)(B) of the Code (or any successor provision thereto),
Section 6.04(a) shall not apply and a Partner's portion of the
constructive liquidating distribution of the Partnership s assets that
is deemed to occur under Treasury Regulation Section 1.708-1(b)(1)(iv)
(or any similar or successor provision) shall be determined in
accordance with the Capital Accounts of the Partners as determined after
taking into account all Capital Account adjustments for the
Partnership's taxable year ending on the date of such termination.
6.05 LIQUIDATION OF PARTNERS INTEREST. Except as may otherwise be
required in this Agreement, if a Partner's interest in the Partnership is to
be liquidated, liquidating distributions shall be made in accordance with the
positive Capital Account balance of such Partner, as determined after taking
into account all Capital Account adjustments for the Partnership's taxable
year during which such liquidation occurs, by the end of the taxable year, or
if later, within ninety (90) days after the date of such liquidation. If a
Partner's interest is to be liquidated, it has a negative Capital Account
balance and it is obligated to restore some or all of its negative Capital
Account upon liquidation of the Partnership pursuant to Section 3.06, then
such Partner shall, by the end of the taxable year or, if earlier, within
ninety (90) days of the date of such liquidation, contribute cash to the
Partnership in an amount equal to its negative Capital Account or such lesser
amount as provided in Section 3.06. Where a Partner's interest is to be
liquidated by a series of distributions, such Partner's interest shall not be
considered liquidated until the final distribution has been made. For
purposes of this Section 6.06, a liquidation of a Partner's interest in the
Partnership means the termination of the
16
Partner s entire interest in the Partnership by means of a distribution or
series of distributions to the Partner by the Partnership.
6.06 IN-KIND DISTRIBUTIONS.
(a) Prior to a distribution of property (other than cash and
other than in complete liquidation of the Partnership or a Partner's
interest in the Partnership), the Capital Accounts of the Partners shall
be adjusted to reflect the manner in which the unrealized income, gain,
loss and deduction inherent in such property (that has not previously
been reflected in the Capital Accounts), would be allocated among the
Partners if there were a taxable disposition of the property on the date
of distribution.
(b) If the distribution of property (other than cash) is to a
Partner in complete liquidation of the Partner's interest in the
Partnership or in liquidation of the Partnership, prior to such
distribution, the Capital Accounts of all the Partners shall be adjusted
to reflect the manner in which the unrealized income, gain, loss and
deduction inherent in all the Partnership's property (that has not
previously been reflected in the Capital Accounts) would be allocated
among the Partners if there was a taxable disposition of all such
property on the date of the liquidating distribution.
(c) If any assets of the Partnership are distributed to the
Partners in kind, the Partners shall own and hold the same as tenants in
common.
6.07 ADDITIONAL TAX ALLOCATION PROVISIONS.
(a) For income tax purposes, allocations of income and loss (and
items thereof) shall be made in accordance with the foregoing
allocations of income, gain and loss for financial purposes.
(b) Notwithstanding anything to the contrary contained herein,
items of income, gain, loss and deduction with respect to property,
other than cash, contributed to the Partnership by a Partner or with
respect to an adjustment to the Partners' Capital Accounts to reflect a
revaluation of the Network, shall be allocated among the Partners so as
to take into account the variation between the basis of the property to
the Partnership and its fair market value at the time of contribution
or, in the case of a revaluation of the Network, the variation between
the basis of the Network to the Partnership and its fair market value as
of the date of revaluation, as provided in Section 704(c) of the Code
and Regulations thereunder and Treasury Regulations Section
1.704-1(b)(2)(iv)(g).
(c) As between a Partner who has transferred all or part of its
interest in the Partnership and its transferee, all items of income, gain,
deduction and loss, for any year shall be apportioned on the basis of the
number of days in each such year that each was the holder of such interest
(making any adjustments necessary to comply with the provisions of Section
706(d)(2) of the Code), without regard to the results of the Partnership's
operations during the period before and after the date of such transfer,
provided that if both the
17
transferor and transferee consent thereto a special closing of the books
shall be had as of the effective date of such transfer and the
apportionment of items of income and gain, and deduction and loss, shall
be made on the basis of actual operating results. Notwithstanding the
above, gain or loss resulting from a Major Capital Event or a
Liquidating Event shall be allocated only to those persons who are
Partners as of the date on which such transaction is consummated.
ARTICLE VII
FISCAL MATTERS
7.01 FISCAL YEAR. The fiscal year of the Partnership shall be as
required under Section 706 of the Code.
7.02 BOOKS AND RECORDS. The General Partner shall keep, or cause to be
kept, at the expense of the Partnership, full and accurate books and records
of all transactions of the Partnership in accordance with accepted accounting
principles, consistently applied. Among such books and records the General
Partner shall keep:
(a) A current list of the following items:
(i) the name and mailing address of each Partner,
separately identifying in alphabetical order the General Partners and
the Limited Partners:
(ii) the last known street address of the business or
residence of each General Partner; and
(iii) the Partnership Interest of each Partner.
(b) Copies of the Partnership's federal, state and local tax
returns for each of the Partnership's six most recent tax years;
(c) A copy of this Agreement, the Certificate, all amendments and
restatements and executed copies of any powers of attorney under which
this Agreement, the Certificate and any and all Amendments or
restatements thereto have been executed. All of such books and records
shall, at all times, be maintained at the principal place of business of
the Partnership and the Limited Partners shall have the right to inspect
and copy any of them, at their own expense, during normal business hours.
7.03 REPORTS AND STATEMENTS.
(a) Within 90 days after the end of each fiscal year of the
Partnership, the General Partner shall, at the expense of the
Partnership, cause to be delivered to each Limited Partner such
financial statements and such other information as the General Partner
believes to be
18
necessary for the Limited Partners to be advised of the financial status
and results of operations of the Partnership.
(b) The General Partner shall report to the Limited Partners any
significant development materially adversely affecting the Partnership,
its business, property or assets, as soon as practicable following the
occurrence of such development.
(c) The General Partner shall provide to the Guarantors a copy of
the financial statements which the Partnership provides to the
Construction Lender, contemporaneously with the delivery of such
documents to the Construction Lender, and such other information which
is provided to the Limited Partners.
7.04 AUDIT. A Limited Partner may require an audit of the books and
records of the Partnership to be conducted at any time (but not more
frequently than once each calendar year). Any such audit so required shall be
conducted by auditors selected by such Limited Partner at the expense of the
Partnership.
7.05 TAX RETURNS. The General Partner shall cause to be prepared and
delivered to the Partners on or before seventy-five days following the end of
each fiscal year, at the expense of the Partnership, all federal and any
required state and local income tax returns for the Partnership for the
preceding fiscal year. In the event the Partnership's income tax returns are
audited, the General Partner shall retain, at the expense of the Partnership,
accountants and other professionals to participate in such audit in order to
contest assertions by the auditing agent that may be materially adverse to
the Partners.
7.06 BANK ACCOUNTS. The General Partner, in the name of the
Partnership, shall open and maintain a special bank account or accounts in a
bank or savings and loan association, the deposits of which are insured by an
agency of the United States government, in which shall be deposited all
fluids of the Partnership. There shall be no commingling of the property and
assets of the Partnership with the property and assets of any other party.
7.07 TAX ELECTIONS. The General Partner shall be entitled to determine
all Federal income tax elections available to the Partnership.
ARTICLE VIII
TRANSFERS
8.01 RESTRICTION ON TRANSFERS. Except as expressly permitted under the
terms and provisions of this Article VIII, no Partnership Interest shall be
Transferred without the written consent of the General Partner.
8.02 PERMITTED SALES AFTER RIGHT OF FIRST REFUSAL IS GIVEN. Except for
a Transfer from one Partner to another in which case this Section does not
apply, if a Partner receives an offer (the "Offer") for the purchase of all
or a part of such Partner's Partnership Interest (the "Offered
19
Interest"), then the Partner who received such Offer (the "Selling Partner")
shall, if it wishes to accept the Offer, promptly forward a true and correct
copy thereof to the other Partners (whether one or more, the "Non-Selling
Partner") within ten (10) days of the date of the Offer. The Non-Selling
Partner shall have the exclusive right and option for sixty (60) days
following the receipt of said Offer (unless extended as provided in the last
paragraph hereof) to purchase all, but not less than all, of the Offered
Interest on the terms and conditions set forth in the Offer. The Non-Selling
Partner shall exercise its option to purchase the Offered Interest by actual
delivery to the Selling Partner, within the aforesaid sixty (60) day period,
written notice of such election. The Non-Selling Partner shall be deemed to
have elected not to purchase the Offered Interest if it fails to timely
provide written acceptance. Each Non-Selling Partner who elects to so
purchase the Offered Interest pursuant to the Offer (the "Electing Partner")
shall have the right to purchase that proportion of the Offered Interest
which the amount such Electing Partner elects to purchase bears to the total
amount which the Electing Partners elected to purchase. The Electing Partner
shall be obligated to close no later than ninety (90) days after the date of
the Offer.
If the Non-Selling Partner does not elect to purchase all of the Offered
Interest, the Selling Partner may sell the Offered Interest; provided,
however, that the sale (i) shall not be made at a price lower than the price
offered to the Non-Selling Partner, (ii) is not made to any person other than
the original offeror, (iii) is on the same terms and conditions as those
specified in the Offer, and (iv) is consummated within ninety (90) days after
the lapse of all options arising in connection with the offer.
If the offeror, terms or conditions of the proposed sale are changed or
such Offered Interest has not been sold prior to the lapse of the aforesaid
ninety (90) day period, the Selling Partner must make a new offer, pursuant
to the procedures in this Section 8.02, to the Non-Selling Partner prior to
selling such Offered Interest. If the Non-Selling Partner elects to purchase
all of the Offered Interest, then the closing of said purchase shall take
place at the office of the Partnership.
Notwithstanding anything else to the contrary in this Section 8.02, if
the Selling Partner is Xxxxxxxx or a member of the Xxxxxxxx Family, then
Xxxxxxxx and the Xxxxxxxx Family shall have the first and exclusive right to
acquire the Offered Interest prior to any other Partner having such right. If
neither Xxxxxxxx nor a member of the Xxxxxxxx Family elects to purchase all
of the Offered Interest within sixty (60) days following receipt of the
Offer, then the remaining Partners shall have the right for twenty (20) days
following such sixty (60) day period to acquire the Offered Interest.
8.03 PERMITTED TRANSFERS. Notwithstanding anything else in this
Agreement to the contrary:
(a) a Partner may Transfer all or any portion of a Partnership
Interest to another Partner without the consent of any Partner; and
(b) a Guarantor may Transfer all or any portion of the Partnership
Interest which it receives in exchange for its Guaranty, or pursuant to
Section 3.03 or 4.11, to an Affiliate without the consent of any Partner.
20
8.04 ASSUMPTION BY TRANSFEREE. Any transferee to whom all or any part
of a Partnership Interest may be Transferred pursuant to this Agreement shall
take such Partnership Interest subject to all of the terms and conditions of
this Agreement and shall not be considered to have title thereto until said
transferee shall have accepted and assumed the terms and conditions of this
Agreement by a written agreement to that effect delivered to the other
Partners, at which time such transferee shall be admitted as a substitute
Partner and shall succeed to all rights of its transferor except as such
rights may be otherwise limited by other provisions of this Agreement.
8.05 COST OF TRANSFERS. The transferor and, if it fails or refuses to
do so, then the transferee, of any Partnership Interest shall reimburse the
Partnership for all costs incurred by the Partnership resulting from any
Transfer.
8.06 EFFECT OF ATTEMPTED DISPOSITION IN VIOLATION OF THIS AGREEMENT.
Any attempted Transfer of any Partnership Interest in breach of this
Agreement shall be null and void and of no effect whatever.
ARTICLE IX
RESIGNATION, WITHDRAWAL AND REMOVAL OF
GENERAL PARTNER: ADMISSION OF NEW GENERAL PARTNER
9.01 VOLUNTARY RESIGNATION OR WITHDRAWAL OF THE GENERAL PARTNER. The
General Partner may not withdraw its interest in the Partnership, Transfer
its interest to any Person or admit any Person as a substitute General
Partner except as provided in Article VIII or this Article IX.
9.02 SUBSTITUTE AND ADDITIONAL GENERAL PARTNERS. To the extent
permitted under Texas law, the General Partner may at any time designate
additional Persons to be General Partners, whose interest in the Partnership
shall be such as shall be agreed upon by the General Partner and such
additional General Partners, so long as the Partnership Interest of the
Limited Partners shall not be affected thereby.
9.03 ADMISSION OF A SUCCESSOR GENERAL PARTNER. Any successor Person
shall be admitted as a General Partner of the Partnership if the following
terms and conditions are satisfied:
(a) The successor Person shall have accepted and assumed all the
terms and provisions of this Agreement and the Shareholders' Agreement
governing the General Partner;
(b) If the successor Person is a corporation, it shall have
provided counsel for the Partnership with a certified copy of a
resolution of its Board of Directors authorizing it to become a General
Partner under the terms and conditions of this Agreement; and
(c) The successor Person shall have executed this Agreement and
such other documents or instruments as may be required or appropriate in
order to effect the admission of such Person as a General Partner.
21
ARTICLE X
DISSOLUTION
10.01 DISSOLUTION.
(a) It is the intention of the Partners that the business of the
Partnership be continued by the Partners, or those remaining, pursuant to the
provisions of this Agreement, notwithstanding the occurrence of any event
which would result in a statutory dissolution of the Partnership pursuant to
the laws of the State of Texas, and no Partner shall be released or relieved
of any duty or obligation hereunder by reason thereof; provided, however,
that the business of the Partnership shall be terminated, its affairs
wound-up and its property and assets distributed in liquidation on the
earlier to occur of:
(i) December 31, 2025;
(ii) a determination by the General Partner that the
business of the Partnership should be terminated;
(iii) the bankruptcy or insolvency of the Partnership;
(iv) subject to the provisions of paragraph (b) below, the
death, incompetency, bankruptcy, insolvency, withdrawal or removal
from the Partnership of the last remaining General Partner;
(vi) the date upon which a Liquidating Event occurs, and all
payments have been received;
(vii) entry of a decree of judicial dissolution; or
(viii) the date voting control of the General Partner is no
longer held by Thompson, Langdale, a family member of either one or
an Affiliate of either one.
For purposes of this Agreement, bankruptcy shall be deemed to have occurred
when the party in question files a petition under any section or chapter of
the Federal Bankruptcy Code, as amended, or becomes subject to an order for
relief under Title 11 of the United States Code Annotated or is declared
bankrupt or insolvent in a state bankruptcy or insolvency hearing.
(b) Upon the occurrence of any event set forth in subparagraph (iv)
of paragraph (a) above with respect to the last remaining General Partner,
the business of the Partnership shall be continued pursuant to the
provisions of this Agreement if, within a period of 90 days from the date
of such occurrence, each of the Limited Partners shall elect in writing
that it be so continued and shall designate one or more parties to be
admitted to the Partnership as a General Partner. Any such party shall upon
admission to the Partnership succeed to all of the rights and powers of a
General Partner hereunder, provided that the former General
22
Partner shall retain and be entitled to its share of profits, losses,
distributions, and capital associated with the General Partner's
Partnership Interest.
10.02 WIND-UP OF AFFAIRS. As expeditiously as possible following the
occurrence of an event giving rise to a termination of the business of the
Partnership, the General Partner (or a special liquidator who may be
appointed by the Limited Partners if the termination results from a
circumstance described in Section 10.01 (a)(iv) above relative to the General
Partners) shall wind-up the affairs of the Partnership, sell its property and
assets for cash at the highest price reasonably obtainable, distribute the
proceeds in accordance with Section 6.04 in liquidation of the Partnership
and file a certificate of cancellation with the Secretary of State of Texas.
ARTICLE II
MISCELLANEOUS
11.01 AMENDMENTS. Unless otherwise expressly provided herein, this
Agreement may not be amended without the written consent of the General
Partner and a Majority in Interest of the Limited Partners.
11.02 OTHER ACTIVITIES. Any Partner may engage or possess an interest
in other business ventures of every nature and description, independently or
with others, including, without limitation, the acquisition, construction,
ownership, leasing, operation and management of projects similar to the
Partnership's business), and neither the Partnership nor any of the other
Partners shall have any right by virtue of this Agreement in and to such
other ventures or to the income or property derived therefrom.
11.03 PARTITION. No Partner shall be entitled to a partition of the
Network or any other property or assets of the Partnership, notwithstanding
any provision of law to the contrary.
11.04 NOTICES. Any notice required or permitted to be delivered to any
Partner under the provisions of this Agreement shall be deemed delivered,
whether actually received or not, when deposited in a United States Postal
Service depository, postage prepaid, registered or certified, return receipt
requested, and addressed to the Partner at the address specified on the
signature pages hereof, or such other address as shall be specified by
written notice delivered to the General Partner.
11.05 PROVISIONS SEVERABLE. Every provision of this Agreement is
intended to be severable and, if any term or provision hereof is illegal or
invalid for any reason whatsoever, such illegality or invalidity shall not
affect the validity of the remainder of this Agreement.
11.06 COUNTERPARTS. This Agreement, and any amendments hereto, may be
executed in counterparts, each of which shall be deemed an original, and such
counterparts shall constitute but one and the same instrument.
23
11.07 HEADINGS. The headings of the various Sections are intended
solely for convenience of reference, and shall not be deemed or construed to
explain, modify or place any construction upon the provisions hereof.
11.08 SUCCESSORS AND ASSIGNS. This Agreement and any amendments hereto
shall be binding upon and, to the extent expressly permitted by the
provisions hereof, shall inure to the benefit of the Partners and their
respective heirs, legal representatives, successors and assigns.
11.09 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the Partners have executed this Agreement this 31
day of October, 1996 effective for all purposes as of July 1, 1996.
GENERAL PARTNER:
CAPROCK SYSTEMS, INC.
a Texas corporation
By: /s/ Xxxx X. Xxxxxxxx, Xx.
---------------------------
Name: Xxxx X. Xxxxxxxx, Xx.
Its: President
Address: 00000 Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
24
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Address: 0000 Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
25
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Address: 0000 Xxxxxxxxx Xx.
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
26
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxx
Address: 4425 Xxxx
Xxxxxx, 75205
Facsimile:
----------------
27
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Address: X.X. Xxx 0000
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
28
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxxxxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Address: 0000 Xxxxxxx
Xxxxxx, XX 00000
Facsimile:
------------------
29
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Address: 0000 Xxxxx Xxxxx Xxxx.
-----------------------
Xxxxxx XX 00000
-----------------------
Facsimile: (000) 000-0000
-----------------------
30
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
The Florida Company, a Texas Corporation
By: /s/ Xxx X. Xxxxxxxx, Xx.
-----------------------------
Name: Xxx X. Xxxxxxxx, Xx.
----------------------------
Its: President
----------------------------
Address: 0000 Xxxxx Xxxx
-----------------------
Xxxxxx, XX 00000
-----------------------
Facsimile: 214 / 357-3490
-----------------------
31
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxx X. Xxxxxxxx, Xx
Address: 0000 Xxxxx Xxxx
-----------------------
Xxxxxx, XX 00000
-----------------------
Facsimile: 214 / 357-3490
-----------------------
32
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
THE HAYDEN COMPANY
a Texas corporation
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxxx
----------------------------
Its: President
-----------------------------
Address: Two Turtle Creek Village
------------------------
0000 Xxx Xxxx Xxx., Xxxxx 0000
------------------------
Xxxxxx, XX 00000-0000
------------------------
Facsimile: (000) 000-0000
-----------------------
33
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxxx Xxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxx
Address: 0000 Xxxxxxxxx Xxxxxxx
------------------------
Xxxxxx, XX 00000
------------------------
Facsimile:
-----------------------
34
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Address: 0000 Xxxxxxxxx #000
-----------------------
Xxxxxx, XX 00000
-----------------------
Facsimile: 000-000-0000
-----------------------
35
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxx X. Xxxxxxxx, Xx.
Address: Two Turtle Creek Village
------------------------
0000 Xxx Xxxx Xxx. Xxxxx 0000
------------------------
Xxxxxx, XX 00000-0000
------------------------
Facsimile: 214 / 443-9299
-----------------------
36
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Second Amended and Restated Agreement of Limited Partnership of
CapRock Fiber Network, Ltd. By execution hereof, the undersigned agrees to be
bound by, and perform in accordance with, such Partnership Agreement.
LIMITED PARTNER:
/s/ Xxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxx X. Xxxxxxxx, Xx.
Address: 00000 Xxxx Xxxx, Xxx 0000
------------------------
Xxxxxx, XX 00000
------------------------
Facsimile: (000) 000-0000
-----------------------
37
EXHIBIT "A"
THE PARTNERS; PARTNERSHIP INTERESTS
The General Partner: Partnership Interests:
CapRock Systems, Inc. 1.00%
The Limited Partners:
Xxxxxxx X. Xxxxxxxx 1.55%
Xxxxxxx X. Xxxxxxxx 1.55%
Xxxxxxxx X. Xxxxxx 1.55%
Xxxxxxxx X. Xxxxxxxx 1.55%
Xxxxxxxxxxx X. Xxxxxxxx 1.55%
Xxxxx.X. Xxxxxxxx 1.55%
The Florida Company 2.67%
Xxx X. Xxxxxxxx, Xx. 2.67%
The Hayden Company 5.34%
Xxxxx Xxxxxxxx 6.22%
Xxxx X. Xxxxxxxx, Xx. 8.87%
Xxxx Xxxxxxxx 46.79%
Xxxx X. Xxxxxxxx, Xx. 17.14%
------
100.00%
38
AMENDMENT NO. 1 TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF CAPROCK FIBER NETWORK, LTD.
This Amendment No. 1 (this "AMENDMENT") to the Second Amended and
Restated Agreement of Limited Partnership (the "AGREEMENT") of CapRock Fiber
Network, Ltd., a Texas limited partnership (the "PARTNERSHIP"), is entered
into by and among CapRock Systems, Inc., a Texas corporation as the general
partner of the Partnership (the "GENERAL PARTNER"), and Xxxxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxxxx, Xxxxxxxx X. Xxxxxx, Xxxxxxxx X Xxxxxxxx, Xxxxxxxxxxx X.
Xxxxxxxx, Xxxxx X. Xxxxxxxx, The Florida Company, a Texas corporation, Xxx X.
Xxxxxxxx, Xx., The Hayden Company, a Texas corporation, Xxxxx Xxxxxxxx, Xxxx
X. Xxxxxxxx, Xx., Xxxx Xxxxxxxx, Xxxx X. Xxxxxxxx, Xx., and Xxx Xxxxx
(individually, a "LIMITED PARTNER" and collectively, the "LIMITED PARTNERS").
The General Partner and the Limited Partners are sometimes individually
referred to herein as a "PARTNER" and sometimes collectively referred to
herein as the "PARTNERS".
BACKGROUND
The Partners entered into that certain Agreement of Limited Partnership of
CapRock Fiber Network, Ltd., which was amended effective as of May 31, 1993, and
further amended by the terms of the Agreement effective as of July 1, 1996.
The Partners recognize the dedicated service, leadership, and other
contributions of Xxx Xxxxx ("XXXXX") to the Partnership and, therefore, desire
to amend the Agreement, effective as of September 1, 1997, to admit Xxxxx as a
Limited Partner upon the terms and conditions of this Amendment.
Xxxxx desires to become a Limited Partner upon the terms and conditions of
this Amendment and the Agreement.
THEREFORE, in consideration of the foregoing, and other good and valuable
consideration, the receipt and sufficiency of which all parties acknowledge, the
parties hereto agree as follows:
AMENDMENT TO THE AGREEMENT
1. The definition of "Limited Partners" contained in SECTION 1.01 of the
Agreement is hereby deleted and replaced in its entirety by the following:
"Limited Partners" shall mean Xxxxxxx X. Xxxxxxxx, Xxxxxxx X.
Xxxxxxxx, Xxxxxxxx X. Xxxxxx, Xxxxxxxx X. Xxxxxxxx, Xxxxxxxxxxx X.
Xxxxxxxx, Xxxxx X. Xxxxxxxx, The Florida Company, Xxx X. Xxxxxxxx, Xx., The
Hayden Company, Xxxxx Xxxxxxxx, Xxxx X. Xxxxxxxx, Xx., Xxxx Xxxxxxxx, Xxxx
X. Xxxxxxxx, Xx. and Xxx Xxxxx.
2. SECTION 2.01(b) is hereby deleted and replaced in its entirety by the
following:
"(b) As of the effective date of this Agreement, Hayden, Florida and
Xxxxx Xxxxxxxx are admitted to the Partnership as Limited Partners."
3. SECTION 2.01 is hereby amended by adding the following subsection (c):
"(c) As of the effective date of Amendment No 1 to this Agreement, Xxx
Xxxxx is hereby admitted to the Partnership as a Limited Partner, and the
Partnership Interests of the Partners shall be as set forth in Exhibit "A"
to the Amendment No. 1 to this Agreement."
4. The Agreement is hereby further amended by adding the following
ARTICLE XII:
"ARTICLE XII
MERGER AND EXCHANGE
12.01 MERGER. The General Partner, on behalf of and in the name
of the Partnership, may adopt a plan of merger pursuant to which the
Partnership may merge with one or more domestic or foreign partnerships or
other entities.
12.02 EXCHANGE. The General Partner, on behalf of and in the name
of the Partnership, may adopt a plan of exchange by which a domestic or
foreign partnership, or other entity acquires all of the outstanding
Partnership Interests of the Partnership in exchange for cash or securities
of the acquiring domestic or foreign partnership."
5. Each of the remaining articles, sections, terms, and provisions of the
Agreement shall remain in full force and effect, and shall be enforceable
against the Partners in accordance with their terms.
6. Capitalized terms not otherwise defined in this Amendment shall have
the meanings assigned to such terms in the Agreement.
IN WITNESS WHEREOF, the Partners have executed this Amendment to be
effective the 1st day of September, 1997.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Dated to be effective as of September 1, 1997.
GENERAL PARTNER:
CAPROCK SYSTEMS, INC.,
a Texas corporation
By: /s/ Xxxx Xxxxxxxx, Xx.
---------------------------------------------
Name: Xxxx Xxxxxxxx, Xx.
Title: President
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxxx X. Xxxxxxxx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxxxxxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxxxxxxx X. Xxxxxxxx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxx X. Xxxxxxxx, Xx.
----------------------------------------
Xxx X. Xxxxxxxx, Xx.
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxx X. Xxxxxxxx, Xx.
------------------------------------------
Xxxx X. Xxxxxxxx, Xx.
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxxxxxx Xxxxxxxx
-------------------------------------
Xxxxxxxx Xxxxxxxx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxx X. Xxxxxxxx, Xx
---------------------------------------
Xxxx X. Xxxxxxxx, Xx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxx Xxxxx
----------------------------------
Xxx Xxxxx
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
THE FLORIDA COMPANY,
a Texas corporation
By:/s/ Xxx X. Xxxxxxxx, Xx.
-----------------------------------------
Name: Xxx X. Xxxxxxxx, Xx.
Title: President
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
THE HAYDEN COMPANY,
a Texas corporation
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
LIMITED PARTNER SIGNATURE PAGE
This Limited Partner Signature Page is attached to, and made a part of,
that certain Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of CapRock Fiber Network, Ltd. By execution hereof, the
undersigned agrees to be bound by, and perform in accordance with, the Second
Amended and Restated Agreement of Limited Partnership of CapRock Fiber Network,
Ltd. as amended by Amendment No. 1.
Dated to be effective as of September 1, 1997.
LIMITED PARTNER:
/s/ Xxxx Xxxxxxxx
---------------------------------------
Xxxx Xxxxxxxx
AMENDMENT NO. 1 TO THE SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF CAPROCK FIBER NETWORKS LTD.
EXHIBIT A
GENERAL PARTNER: PARTNERSHIP INTEREST:
CapRock Systems, Inc. 1.72375%
LIMITED PARTNERS:
Xxxx Xxxxxxxx 38.99919%
The Hayden Company 3.94493%
Xxx X. Xxxxxxxx, Xx 1.97246%
The Florida Company 1.97246%
Xxx X. Xxxxx 1.50000%
Xxxx X. Xxxxxxxx, Xx. 6.55635%
Xxxxxxxx X. Xxxxxxxx 4.58389%
Xxxxxxx X. Xxxxxxxx 1.14597%
Xxxx X. Xxxxxxxx, Xx. 31.87113%
Xxxxxxx X. Xxxxxxxx 1.14597%
Xxxxxxxx X. Xxxxxx 1.14597%
Xxxxxxxx X. Xxxxxxxx 1.14597%
Xxxxxxxxxxx X. Xxxxxxxx 1.14597%
Xxxxx X. Xxxxxxxx 1.14597%
Total: 100.00000%
CONTRIBUTION AGREEMENT
AND AMENDMENT
This Contribution Agreement (the "Agreement") is entered into by and
among Xxxx W, Xxxxxxxx, Jr. ("Xxxx"), Greenway Holdings, L.P., a Texas
limited partnership (the "Partnership"), and for a limited purpose, CapRock
Systems, Inc. ("CapRock Systems"), a Texas corporation and the general
partner of CapRock Fiber Network, Ltd., a Texas limited Partnership ("CapRock
Fiber") and a majority in interest of the limited partners in CapRock Fiber.
R E C I T A L S:
A. Xxxx desires to contribute his entire ownership interest (the "CapRock
Fiber Interest") in CapRock Fiber to the Partnership in exchange for a 1%
general partnership interest and a 93.7289% limited partnership interest in the
Partnership (the "Partnership Interests"). The limited partnership interest will
be issued one-half to Xxxx, and the balance to his wife, Xxxxxxx X. Xxxxxxxx.
B. By execution of this Agreement, CapRock Systems and a majority in
interest of the limited partners evidence their consent to the contribution of
the CapRock Fiber Interest and amend the Second Amended and Restated Agreement
of Limited Partnership of CapRock Fiber Network, Ltd. (the "CapRock Fiber
Agreement") to reflect the change in partner.
A G R E E M E N T:
IT IS THEREFORE AGREED:
1. CONTRIBUTION. For valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Xxxx hereby agrees to contribute, and does
hereby contribute, to the Partnership, and the Partnership hereby agrees to
accept, and does hereby accept, the CapRock Fiber Interest.
2. CONSIDERATION. For and in consideration of the contribution of the
CapRock Fiber Interest by Xxxx to the Partnership, the Partnership hereby issues
to Xxxx and Xxxxxxx the Partnership Interests.
3. AMENDMENT. By execution of this Agreement, CapRock Systems and a
majority in interest of the limited partners in CapRock Fiber, in accordance
with Section 11.01 of the CapRock Fiber Agreement, hereby amend the CapRock
Fiber Agreement to admit the Partnership to CapRock Fiber pursuant to this
Agreement. Exhibit "A" to the CapRock Fiber Agreement is amended and restated in
the manner set forth on Exhibit "A" attached to this Agreement.
4. AGREEMENT OF THE PARTNERSHIP. The Partnership hereby accepts, assumes
and agrees to be bound by, and to perform in accordance with, all of the terms
and provisions of the CapRock Fiber Agreement.
5. MISCELLANEOUS. This Agreement (i) shall be binding upon and shall
inure to the
benefit of the parties hereto and their respective heirs, representatives,
administrators, successors and assigns; (ii) may not in any way be altered,
amended, modified or upgraded except by an instrument in writing signed by
the parties hereto; (iii) and the rights of the parties hereto shall be
governed by and construed in accordance with the laws of the State of Texas;
and (iv) may be executed in multiple counterparts, each of which shall
constitute an original.
IN WITNESS WHEREOF, this Agreement is executed as of the 29th day of
December, 1997.
THE PARTNERSHIP;
GREENWAY HOLDINGS, L,P,
a Texas limited partnership
By: /s/ Xxxx X. Xxxxxxxx, Xx.
------------------------------------
Xxxx X. Xxxxxxxx, Xx.
Its: General Partner
/s/ Xxxx X. Xxxxxxxx, Xx.
------------------------------------
Xxxx X. Xxxxxxxx, Xx.
By execution hereof, the undersigned, who constitute the general partner
and a majority in interest of the limited partners in CapRock Fiber, consent to
the contribution of the Partnership interests to the Partnership, and the
amendment of the CapRock Fiber Agreement.
CapRock Systems, Inc.
/s/ Xxxx X. Xxxxxxxx, Xx. /s/ Xxxx X. Xxxxxxxx, Xx.
------------------------------------- ----------------------------------
Xxxx X. Xxxxxxxx, Xx., President Xxxx X. Xxxxxxxx, Xx.
/s/ Xxxx Xxxxxxxx
-------------------------------------
Xxxx Xxxxxxxx
2
EXHIBIT "A"
THE PARTNERS: PARTNERSHIP INTERESTS
The General Partner: Partnership Interests:
CapRock Systems, Inc 1.72375%
The Limited Partners:
Xxxxxxx X. Xxxxxxxx 1.14597%
Xxxxxxx X. Xxxxxxxx 1.14597%
Xxxxxxxx X. Xxxxxx 1.14597%
Xxxxxxxx X. Xxxxxxxx 1.14597%
Xxxxxxxxxxx X. Xxxxxxxx 1.14397%
Xxxxx X. Xxxxxxxx 1.14597%
The Florida Company 1.97246%
Xxx X. Xxxxxxxx, Xx. 1.97246%
The Hayden Company 3.94493%
Xxxxx Xxxxxxxx 4.58389%
Xxxx X. Xxxxxxxx, Xx. 6.55635%
Xxxx Xxxxxxxx 38.99919%
Greenway Holdings, L.P. 31.87113%
Xxx Xxxxx 1.50000%
---------
100.00000%
3
