Exhibit C
CARDINAL PARTNERS, L.P.
LIMITED PARTNERSHIP AGREEMENT
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Dated as of February 12, 1999
THE LIMITED PARTNERSHIP INTERESTS OF CARDINAL PARTNERS, L.P. HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), THE
SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE
UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS.
SUCH LIMITED PARTNERSHIP INTERESTS ARE BEING ACQUIRED FOR INVESTMENT ONLY, AND
NEITHER SUCH INTERESTS NOR ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE
WITH (I) THE ACT AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS
AND CONDITIONS OF THIS PARTNERSHIP AGREEMENT. THEREFORE, PURCHASERS OF SUCH
INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
CARDINAL PARTNERS, L.P.
LIMITED PARTNERSHIP AGREEMENT
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Dated as of February 12, 1999
The undersigned hereby form, as of the day and year first above written, a
limited partnership (the "Partnership") pursuant to the Texas Revised Limited
Partnership Act, as may be hereafter amended from time to time (the "Texas
Act"), which limited partnership shall be governed by and operated pursuant to
the terms and provisions of this Limited Partnership Agreement (the
"Agreement").
ARTICLE I
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GENERAL PROVISIONS
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SECTION 1.01. Terms Defined. When used in this Agreement, the following
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terms shall have the meaning set forth below:
"Accounting Period" shall mean the period beginning at the opening of
business on any Adjustment Date and continuing until the close of business on
the day immediately preceding the next Adjustment Date.
"Additional Capital Contribution" shall mean the amount, if any, of the
additional contributions of cash and the fair market value of Securities other
than cash (net of liabilities which the Partnership assumes or takes the
property subject to) made to the Partnership by Partners in excess of their
initial Capital Contributions.
"Adjustment Date" shall have the meaning set forth in section 3.04(b)
hereof.
"Affiliate" of any Partner shall mean (i) any shareholder, director,
officer, partner, employee, family member (related no more distantly than the
second degree), agent (including, but not limited to, attorneys and accountants)
of any Partner or (ii) any entity owning directly or indirectly, any entity
owned directly or indirectly by, or any entity under common ownership with any
Partner or any Person or other entity described in (i) above. An "Affiliate" of
any person or entity other than a Partner or person described in (i) above shall
mean a person, entity or organization, directly or indirectly, through one or
more intermediaries, controlling, controlled by, or under common control with
the person, entity or organization in question. 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 fifty percent (50%) of the
voting rights attributable to the shares of such corporation and, with respect
to a person or organization 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 or organization.
"Capital Account" shall have the meaning set forth in Section 3.04 hereof.
"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
Partners.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules promulgated by the Internal Revenue Service thereunder.
"Fiscal Year" shall mean the annual accounting period employed by the
Partnership for tax and financial purposes, which shall commence on January 1
(except for the first year of the Partnership) and shall end on December 31 of
each calendar year.
"General Partner" shall mean Cardinal Investment Company, Inc., along with
any successor General Partner.
"Limited Partners" shall mean the persons and/or entities listed in
Schedule A as Limited Partners from time to time and who have executed a
counterpart of this Agreement or an amendment to this Agreement pursuant to
which such Limited Partner has agreed to become subject to the terms of this
Agreement.
"Net Profits or Net Losses" shall mean the net profits or net losses of the
Partnership for each Accounting Period or Fiscal Year, as applicable, consisting
of ordinary income or loss, unrealized capital gains or losses with respect to
Securities and the realized capital gain or losses with respect to the
disposition of Securities.
"Partner" or "Partners" shall mean all persons or entities which are, or
subsequently will become, General Partners and all Limited Partners of the
Partnership.
"Partnership Functionary" shall have the meaning given it in Article IX.
"Partnership Percentage" of each Partner during any Accounting Period shall
be determined as of the beginning of each Accounting Period and shall be deemed
constant throughout such Accounting Period. It shall be the ratio of such
Partner's Capital Account at the opening of business on the Adjustment Date upon
which such Accounting Period commences to the aggregate of the Capital Accounts
of all of the Partners at the opening of business on such Adjustment Date in
each case after giving effect to any distributions or contributions, as the
case may be, made, or deemed
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to have been made, on or prior to the opening of business on the first day of
such Accounting Period. Each Partner's Partnership Percentage shall be computed
to four (4) decimal places and rounded to three (3) decimal places, and the sum
of the Partnership Percentages shall be one hundred percent (100%). Each Partner
shall have and own during such Accounting Period an undivided interest in the
Partnership equal to his Partnership Percentage.
"Portfolio Value" shall mean the value of all assets of the Partnership,
excluding, however, cash, cash equivalents and money-market instruments,
determined at the times specified in and in accordance with Section 1.08 hereof.
"Proceeding" shall have the meaning given it in Article IX hereof.
"Schedule" shall mean the schedule entitled "Schedule A - Capital
Contributions" which is attached hereto and made a part of this Agreement and
which may be amended from time to time by the General Partner to the extent
required to reflect changes in ranks of the Limited Partners.
"Security" and "Securities" shall mean the capital stock, preorganization
certificates and subscriptions, and warrants, and convertible instruments,
bonds, debentures and notes of any person, corporation, government or entity
whatsoever, and rights and options relating thereto, and interests or shares in
any mutual fund and commodity positions, including put and call options written
by the Partnership or by others.
"TMP" shall mean the Tax Matters Partner for purposes of Section 2.05
hereof.
"Treasury Regulations" shall mean the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time.
"Valuation Date" shall mean the close of business on the last day of each
fiscal quarter (unless such date is not a trading day on the New York Stock
Exchange, in which case the Valuation Date shall be the close of business on the
next succeeding day which is a trading day on the New York Stock Exchange)
during each Fiscal Year.
SECTION 1.02. Partnership Name; Registered Office and Registered Agent.
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The Partnership shall do business under the name of Cardinal Partners, L.P. The
registered office of the Partnership (which shall also be the Partnership's
principal office) shall be 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxxx 00000,
and the Partnership's registered agent at such address shall be Cardinal
Investment Company, Inc.
SECTION 1.03. Books and Records. The General Partner shall keep, or
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cause to be kept, at the expense of the Partnership, for each Fiscal Year a full
and accurate set of books and records of all transactions of the Partnership in
accordance with generally accepted accounting principles, consistently applied.
All of such books and records shall, at all times, be maintained at the
principal
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place of business of the Partnership and all Partners or their agents,
accountants or attorneys shall have the right to inspect and copy any of them,
at their own expense, during normal business hours.
SECTION 1.04. Liability of Partners. The names of all of the initial
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Partners and the amounts of their respective initial Capital Contributions are
set forth on the Schedule.
(a) The General Partner shall have unlimited liability for the repayment
and discharge of all debts and obligations of the Partnership attributable to
any Fiscal Year or part thereof during which he is or was the General Partner of
the Partnership. Notwithstanding any other provision in this Agreement, in no
event shall any Limited Partner (or former Limited Partner) be obligated to make
any additional contribution whatsoever to the Partnership or have any liability
for the repayment and discharge of the debts and obligations of the Partnership
beyond the amount that such Limited Partner or former Limited Partner has
contributed to the Partnership pursuant to Sections 3.01 and 3.02. The Partners
recognize and agree that earnings retained in the Partnership pursuant to
Section 4.01 become assets of the Partnership subject to the claims of its
creditors.
(b) As used in this Agreement, the term "former Limited Partner" refers to
such persons as hereafter from time to time cease to be Limited Partners
pursuant to the terms and provisions of this Agreement.
SECTION 1.05. Purposes of Partnership. The Partnership is organized for
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the following objects and purposes:
(a) to invest, buy, hold, sell and trade, on margin or otherwise, in
Securities, to sell Securities short (subject to the limits contained in
Section 1.06 hereof) and cover such sales, to invest in currencies and stock
indexes, and to lend funds or Securities of the Partnership, either with or
without security;
(b) to acquire, hold, sell and trade certificates of deposit, U.S. Treasury
Bills, Notes and Bonds;
(c) to enter into, make and perform all contracts and other undertakings,
to engage in all activities and transactions and to incur expenses on behalf of
the Partnership as the General Partner may deem necessary or advisable to the
carrying out of the foregoing objects and purposes, including without
limitation:
(i) to purchase, hold, sell, exchange, transfer, mortgage, pledge and
otherwise acquire and dispose of and exercise all rights, powers,
privileges and other incidents of ownership, or possession with respect to
Securities;
(ii) to acquire or convert a long position or a short position with
respect to any Security and to make purchases or sales increasing,
decreasing or liquidating such position or changing from a long position to
a short position or from a short position to a long
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position, without any limitation as to the frequency of the fluctuation in
such positions or as to the frequency of the changes in the nature of such
positions;
(iii) to borrow or raise monies, whether on margin or otherwise, and,
from time to time without limitation as to amount or manner and time of
repayment, to issue, accept, endorse and execute evidences of indebtedness,
and to secure the payment of such or other obligations of the Partnership
by mortgage upon, or hypothecation or pledge of, all or part of the
property of the Partnership, whether at the time owned or thereafter
acquired, subject to the limitations imposed by Section 2.02 hereof;
(iv) to maintain for the conduct of Partnership affairs one or more
offices and in connection therewith rent or acquire office space, engage
personnel, whether part-time or full-time, and do such other acts and incur
such expenses as the General Partner may deem necessary or advisable in
connection with the maintenance and administration of such office or
offices; and
(v) to engage attorneys, accountants, custodians, information
services, investment counselors or such other persons as the General
Partner may deem necessary or advisable.
SECTION 1.06. Certain Activities of Partners. Except to the extent that
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the General Partner shall have determined that no applicable law, rule and
regulation will be violated thereby, the Partnership shall not invest in
Securities of any publicly held business or economic entity in which any Partner
or an Affiliate of a Partner is a director, officer or ten percent (10%)
shareholder. Each Partner agrees to promptly so notify the General Partner if
or when such Partner or such Partner's Affiliates become or begin a process of
becoming a director, officer or ten percent (10%) shareholder of any publicly
held business or economic entity.
SECTION 1.07. Assignability of Interest. Except as provided in Section
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1.09 below or with the consent of the General Partner which consent may be
withheld by the General Partner in its sole discretion, a Partner may not assign
his interest in the Partnership or pledge, mortgage or hypothecate his interest
in the Partnership, in whole or in part, to any person, firm, corporation or
other entity except by last will and testament or, if required, by operation of
law, and any such attempted assignment shall be void. Any such permitted
assignee shall not become a substituted partner unless the General Partner so
consents thereto and the assignee executes all documents required by the General
Partner in connection therewith.
SECTION 1.08. Method of Valuation. On each Valuation Date and on such
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other dates as an evaluation is to be determined in accordance with the terms of
this Agreement, the General Partner shall determine or cause to be determined
the Portfolio Value. For the purposes of this Agreement, the value of any
Security shall be determined as follows:
(a) marketable Securities listed on a national securities exchange or
National Association of Securities Dealers' Automated Quotation National Market
System will be valued at the last sales
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price on the date of valuation, or in the absence of a sale on such date, at the
last bid price on the date of valuation;
(b) marketable Securities traded in the over-the-counter market and
reported in the National Association of Securities Dealers' Automated Quotation
system will be valued at the closing bid price as reported by such system;
(c) Securities (other than Securities of a type specified in clause (a) or
(b) above) for which prices are regularly quoted by recognized dealers all or a
portion of which are immediately salable under regulations of the Securities and
Exchange Commission will be valued at the most recent market price; and
(d) all other Securities will be valued at cost or such other value as may
be reasonably determined by the General Partner.
SECTION 1.09. Purchase Option. The General Partner or the Partnership
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shall have the right, but never the obligation, to purchase all, but not less
than all, of any Limited Partner's interest in the Partnership as of the end of
any fiscal quarter. In order to exercise the option herein granted, the General
Partner or the Partnership must notify the affected Limited Partner of its
intent to purchase at least ten days before the last day of the fiscal quarter,
which shall be the effective date of the purchase. The purchase price for the
limited partnership interest being acquired shall be equal to the selling
Limited Partner's Capital Account (as adjusted pursuant to Section 3.04 hereof)
as of the close of business on the last day of the fiscal quarter. The General
Partner or the Partnership, as the case may be, shall pay the purchase price to
the selling Limited Partner as soon as reasonably practicable after the books
of the Partnership are closed with respect to such fiscal quarter (and if such
fiscal quarter is the last quarter of the Fiscal Year, as soon as reasonably
practicable after the Partnership's information tax return for such Fiscal Year
has been prepared).
ARTICLE II
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MANAGEMENT OF PARTNERSHIP
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SECTION 2.01. Management Generally. The management of the Partnership
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shall be vested exclusively in the General Partner. The Limited Partners shall
have no part in the management of the Partnership and shall have no power,
authority or right to act on behalf of the Partnership in connection with any
matter, except as may be otherwise provided for in this Agreement.
SECTION 2.02. Power and Authority of General Partner. Subject to the
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limitations contained herein, the General Partner shall have the power and
authority, and without the consent of any Limited Partners, in the name and on
behalf of the Partnership to carry out any and all of the objects and purposes
of the Partnership set forth in subsections (a) and (b) of Section 1.05 and to
perform all acts and enter into and perform all contracts and other undertakings
which he may
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reasonably deem necessary or advisable or incidental thereto, including without
limitation, the power and authority to:
(a) open, maintain, conduct and close custodian accounts for securities and
monies;
(b) open, maintain, conduct and close accounts, including margin accounts,
with brokers, including holding securities in street name;
(c) open, maintain, and close bank accounts and draw checks or other orders
for the payment of monies;
(d) lend, with or without security, any of the funds or properties of the
Partnership and from time to time-without limit as to amount, borrow or raise
funds and secure the payment of obligations of the Partnership by mortgage upon,
or pledge or hypothecation of, all or any part of the property of the
Partnership;
(e) execute, deliver, acknowledge and file in the name and on behalf of the
Partnership (i) a Certificate of Limited Partnership and, as required by law,
any amendment or supplement thereto and (ii) all other documents required by law
for the operation of the Partnership's business (including, but not limited to,
assumed name certificates);
(f) appoint, engage or retain persons to serve as officers, managers of
the Partnership or as a Partnership Functionary, share personnel, equipment,
office space, supplies and other services with other persons, partnerships or
corporations (including, without limitation, those of Cardinal, or any
Affiliate or parent thereof) and, if required, to pay a fair allocated share of
such expenses;
(g) do any and all acts on behalf of the Partnership, and exercise all
rights of the Partnership, with respect to its Securities or its interest in any
person, firm, corporation or other entity, including, without limitation, the
voting of Securities, the negotiation and payment of commissions in amounts in
excess of any so-called minimum commission, participation in arrangements with
creditors, the institution of suits and administrative proceedings and other
like or similar matters;
(h) act and incur expenses for and on behalf of the Partnership in all
matters incidental to the foregoing (if any such costs and expenses are or have
been paid by the General Partner on behalf of the Partnership, then the General
Partner shall be entitled to reimbursement therefor so long as such costs and
expenses were reasonably necessary and reasonable in amount);
(i) select a method of accounting (consistent with generally accepted
accounting principles) for tax and financial reporting purposes for the
Partnership; and
(j) except as otherwise provided in Sections 2.05 hereof, make all Federal
income tax elections available to the Partnership.
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SECTION 2.03. Reliance by Third Parties. Persons dealing with the
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Partnership are entitled to rely conclusively upon a certificate of the General
Partner to the effect that he is the General Partner and upon the power and
authority of the General Partner as herein set forth.
SECTION 2.04. Activity of General Partner. The General Partner hereby
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agrees to use its reasonable efforts in connection with the purposes and
objects of the Partnership and shall devote to such purposes and objects such
time and activity during normal business days and hours as may be reasonably
necessary, in its reasonable discretion, for the management of the affairs of
the Partnership; provided, however, that nothing contained in this Section 2.04
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shall preclude the General Partner from acting as a director, officer, agent or
employee of any corporation, a partner of any partnership, an investment
counselor or advisor to any person, firm, corporation or other entity, a trustee
of any trust, an executor or administrator of any estate, or an administrative
official of any other business entity, or from participating in profits derived
from the investments of any such corporation, trust, estate, partnership or
other business entity or person. The General Partner may engage or possess an
interest in other business ventures of every nature and description,
independently or with others, including, without limitation, performing the same
or similar services as contemplated by this Agreement with or for other
entities, 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. In carrying out its duties, the General
Partner may appoint, engage or retain persons to serve as officers or managers
of the Partnership or as a Partnership Functionary and to delegate to such
persons such of its duties as the General Partner may determine in its
reasonable discretion.
SECTION 2.05. Certain Tax Matters.
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(a) The General Partner shall be designated the TMP as defined in Section
6231(a)(7) of the Code with respect to operations conducted by the Partnership.
The TMP shall comply with the requirements of Sections 6221 through 6232 of the
Code and the Treasury Regulations promulgated thereunder, and the Partners
further agree as follows:
(b) The TMP shall have a continuing obligation to provide the Internal
Revenue Service with sufficient information so that proper notice can be mailed
to all Partners as provided in Section 6223 of the Code, and the Partners shall
furnish the TMP with such information (including information specified in
Section 6230(e) of the Code) as the TMP may reasonably request for such purpose.
(c) The TMP shall keep each Partner informed of all administrative and/or
judicial proceedings for the adjustment of Partnership items (as defined in
Section 6231(a)(3) of the Code and regulations promulgated thereunder) at the
Partnership level.
(d) If any administrative proceeding contemplated under Section 6223 of the
Code has begun, the Partners shall, upon request by the TMP, notify the TMP of
their treatment of any
8
Partnership item on their federal income tax return which is or may be
inconsistent with the treatment of that item on the Partnership's return.
(e) Any Partner who enters into a settlement agreement with the Secretary
of the Treasury with respect to Partnership items shall notify the other
Partners of such settlement agreement and its terms within 30 days after the
date of such settlement.
(f) If the TMP elects not to file suit concerning an administrative
adjustment or request for administrative adjustment and another Partner elects
to file such a suit, such other Partner shall notify all Partners of such
intention and the forum or forums in which such suit shall be filed shall be
agreed to by all of the Partners.
(g) Each Partner shall be entitled to participate in all administrative
proceedings with the Internal Revenue Service, as provided by Code Section
6224(a).
(h) The obligations imposed on the TMP and participation rights afforded
the Partners by this Agreement and Sections 6221 through 6232 of the Code may
not be restricted or limited in any fashion by the TMP or any Partner or
Partners without the written consent of all of the Partners.
(i) The TMP shall have, subject to the prior approval of Partners holding a
majority of Partnership Percentages, the right to extend the statute of
limitations, file a request for an administrative adjustment, file suit
concerning any tax refund or deficiency relating to any Partnership
administrative adjustment or enter into any settlement agreement relating to any
Partnership item of income, gain, loss, deduction or credit for any taxable year
of the Partnership.
SECTION 2.06. Facilities. The Partnership shall share office space with
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Cardinal Investment Company, Inc. and, in exchange therefor, the Partnership
shall pay to Cardinal a portion of the management fee provided in Section 2.07
below.
SECTION 2.07. Compensation. The General Partner shall charge a
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management fee equal to one percent (1%) of the value of total assets of the
Partnership (such valuation to be determined in good faith by the General
Partner). Such management fee shall be accrued against the Capital Accounts of
the Partners of the Partnership at the end of each fiscal quarter of the
Partnership at a rate of one quarter of one percent (0.25%) of the value of
total assets as of the end of each fiscal quarter. If a Limited Partner
withdraws capital at a time other than the end of a Fiscal Year in accordance
with Section 4.02, the Partnership may, in the sole discretion of the General
Partner, charge the Limited Partner a withdrawal fee equal to two percent (2%)
of the capital being withdrawn to cover any costs associated with liquidating
Securities to allow the Partnership to pay such withdrawal, along with any other
administrative costs associated with the withdrawal. This Section 2.07 does not
in any way limit the General Partner's right to reimbursement of costs and
expenses incurred on behalf of the Partnership pursuant to Section 2.02(h).
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SECTION 2.08. Liability. The General Partner shall perform his duties
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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, intentional violation of
applicable law, or fraud. The General Partner shall be entitled to deal with
his Affiliates in the performance of his duties and obligations under this
Agreement, unless expressly prohibited therefrom by a specific provision hereof.
SECTION 2.09. Removal of General Partner. Partners owning Partnership
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interests representing three-fourths (3/4) of the Partnership Percentages shall
be entitled to remove the General Partner at any time and for any reason, with
or without cause, and Limited Partners may by a majority of Partnership
Percentages (a) elect a substitute or successor General Partner who shall
thereafter be admitted as the General Partner and (b) elect to reconstitute the
Partnership and continue its business. Upon the removal of the General Partner,
(i) the General Partner may, at its option, retain its Partnership interest as a
Limited Partner with all of the rights and duties pertaining thereto and (ii)
all Limited Partners shall be entitled to withdraw from the Partnership as of
the date of removal of the General Partner and receive the positive balance of
their respective Capital Accounts in cash in accordance with Section 6.02
hereof. If the Limited Partners by majority of Partnership Percentages elect to
continue the Partnership and to replace the General Partner, the removal of the
General Partner shall be effective immediately after the time that such
successor General Partner is appointed and admitted to the Partnership.
SECTION 2.10. Power of Attorney.
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(a) Each Limited Partner hereby irrevocably severally appoints and
constitutes the General Partner, his 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) any amendment to this Agreement, and as contemplated by Section
2.02(e) hereof, the Certificate of Limited Partnership, required by a
change in the name of the Partnership, a change of the name or address of
the registered agent of the Partnership, the withdrawal of the General
Partner, or the admission of any party to the Partnership as a General
Partner, if such admission is in compliance with the applicable provisions
hereof; and
(ii) any amendment to this Agreement upon compliance with Section
10.03.
(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 party who at the time of
exercise is a General Partner of the Partnership. Such power of attorney shall
survive the death or legal incapacity of a Limited Partner and any assignment
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or abandonment of all or any portion of his interest in the Partnership or his
withdrawal from the Partnership.
SECTION 2.11. Section 754 Election. Upon election by the General Partner
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in its sole discretion, the Partnership shall file such documents and take such
other action as may be necessary to make the election provided by Section 754 of
the Internal Revenue Code of 1986, as amended.
ARTICLE III
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CAPITAL ACCOUNTS OF PARTNERS; ALLOCATIONS
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SECTION 3.01. Capital Contributions. Each Partner has made an initial
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Capital Contribution in cash in the amount set forth opposite such Partner's
name in the Schedule. After the formation of the Partnership, any new Partner
may make initial Capital Contributions in any amount approved by the General
Partner and shall be bound by the provisions of this Agreement. Additional
Capital Contributions to the Partnership may be made by Partners only in
accordance with the provisions of Section 3.02.
SECTION 3.02. Additional Capital Contributions. At the beginning of any
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fiscal quarter of the Partnership, any Partner may make Additional Capital
Contributions to the Partnership as long as such Additional Capital Contribution
is delivered within five days after the first day that begins such quarter and
the General Partner, in its sole discretion has approved such Additional Capital
Contribution. All Additional Capital Contributions made within five days after
the first day of a fiscal quarter shall be deemed to have been made on the
opening of business on the first day of such fiscal quarter for purposes of
determining an Adjustment Date for purposes of Section 3.04(b). All Additional
Capital Contributions shall be delivered to the General Partner for the benefit
of the Partnership in cash, certified or cashier's check or Federal funds wire
transfer.
SECTION 3.03. Partnership Percentages. A Partnership Percentage shall be
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determined for each Partner for each Accounting Period and shall be set forth in
a schedule which shall be filed with the records of the Partnership.
SECTION 3.04. Capital Accounts.
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(a) Unless and until the General Partner determines that such would not be
in the best interest of the Partners and the Partnership (in which case Capital
Accounts shall be maintained in accordance with generally accepted accounting
principles), 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). If the General Partner
makes the determination provided in the preceding sentence, he shall promptly
give notice to the Partners of such decision, prior to taking any action
hereunder, with such notice to include a description of the proposed change and
its consequences. Except as provided in, Section 3.04(b) and otherwise by this
Agreement, the Capital Account balance of each Partner shall be credited
(increased) by (i) the
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amount of money contributed by such Partner to the capital of the Partnership,
(ii) the fair market value of property 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), and (iii) such Partner's allocable
share of Partnership income and gain (or items thereof) as determined for
Capital Account purposes in accordance with Regulations Section 1.704-
1(b)(2)(iv), including income and gain exempt from federal taxation, 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), and (iii) of such
Partner's share of Partnership losses, depreciation and other deductions, as
determined for Capital Account purposes in accordance with Regulations Section
1.704-1(b)(2)(iv), including such Partner's share of expenditures of the
Partnership described in Section 705(a)(2)(B) of the Code. 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.
(b) On the opening of business on any Adjustment Date, 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 were a taxable disposition of all such
property on such Adjustment Date. "Adjustment Date" means the effective day (i)
of a distribution of cash and/or property to a Partner in complete or partial
liquidation of such Partner's interest in the Partnership (including
distributions made pursuant to Sections 4.01 and 4.02 hereof); (ii) of a
distribution in liquidation of the Partnership; (iii) the admission to the
Partnership of one or more Limited Partners pursuant to Section 5.01 hereof;
(iv) of any other non-pro rata contribution to or distribution from the
Partnership, including, without limitation, Additional Capital Contributions; or
(v) of the day after the last day of the Fiscal Year.
SECTION 3.05. Deficit Capital Account Balances. Upon liquidation of the
--------------------------------
Partnership, no Limited Partner with a deficit balance in its Capital Account
shall have any obligation to restore such deficit balance, or to make any
contribution to the capital of the Partnership, except to the extent such
Limited Partner is personally liable to make contributions to the capital of the
Partnership pursuant to Section 1.04 of this Agreement. 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 his deficit Capital Account balance 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.
SECTION 3.06. Allocation of Net Profits and Net Loss.
----------------------------------------
(a) Net Profits and Net Losses for each Accounting Period from the
operations of the Partnership shall be determined in accordance with the
method of accounting and books and records of the Partnership. Except as
provided in Sections 3.06(b), (c) and
12
(d) and 3.07, Net Profits and Net Losses attributable to each Accounting
Period shall be allocated among the Partners as follows:
(i) First, each Partner shall preliminarily be allocated Net Profits
and Net Losses during the Accounting Period, pro rata in accordance
with their Partnership Percentages for such Accounting Period; and
(ii Second, notwithstanding Section 3.06(a)(i), at the end of each
Fiscal Year, after giving effect to the allocations provided for in
Section 3.06(a)(i), 20% of the amount, if any, by which Net Profits
for each Accounting Period in such Fiscal Year exceed Net Losses for
each accounting period in such Fiscal Year shall be reallocated to the
General Partner.
(b) Notwithstanding anything to the contrary contained herein, items of
income, gain, loss and deduction with respect to an adjustment to the Partners'
Capital Accounts pursuant to Section 3.04(b) to reflect a revaluation of the
property of the Partnership shall be allocated among the Partners so as to take
account of the adjustments to the Partner's Capital Accounts as required in
Treasury Regulation Sections 1.704-1(b)(2)(iv)(f) and 1.704-1(b)(2)(iv)(g), as
currently in effect.
(c) In accordance with Code Sections 704(b), 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to (i) any property
contributed to the capital of the Partnership, and (ii) all property owned by
the Partnership on each Adjustment Date, shall, solely for tax purposes, be
allocated among the Partners so as to take account of any variation between the
adjusted basis of such property to the Partnership for federal income tax
purposes and its value on, as the case may be, the date of contribution or the
Adjustment Date.
(d) For income tax purposes, allocations of income or loss (and items
thereof) shall be made in accordance with the foregoing allocations of income
and loss for financial purposes.
(e) 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 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 the General Partner
in its sole discretion so determines 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.
SECTION 3.07. Qualified Income Offset Provision. Notwithstanding anything
---------------------------------
else to the contrary contained herein, to the extent that the allocation of any
loss or deduction would cause the deficit Capital Account balance of any Partner
to exceed the dollar amount that such Partner is obligated to restore upon
liquidation of the Partnership as of the end of the Partnership's taxable year
13
to which such allocation relates, such Partner will not be allocated a loss or
deduction which will cause or increase a deficit balance in such Partner's
Capital Account in excess of such amount. For purposes of this subsection, the
Capital Account of each Partner shall be reduced (a) for any distributions that,
as of the end of such year, reasonably are expected to be made to such Partner
to the extent they exceed offsetting increases to such Partner's Capital Account
that reasonably are expected to occur during (or prior to) the Partnership
taxable years in which such distributions reasonably are expected to be made,
(b) adjustments that as of the end of such year reasonably are expected to be
made for depletion adjustments, and (c) allocations that, as of the end of such
year, reasonably are expected to be made pursuant to Code Section 704(e)(2)
(dealing with family partnerships), Code Section 706(d) (dealing with changes in
Partners' interests) and Treasury Regulation Section 1.751-1 (dealing with
unrealized receivables and inventory items), all as described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d). A Partner who unexpectedly receives an
adjustment, allocation or distribution described immediately above which causes
or increases a deficit balance in such Partner's Capital Account (in excess of
any dollar amount of such deficit balance that such Partner is obligated to
restore upon liquidation, as of the end of the Partnership's taxable year to
which such allocation relates) will be allocated items of income and gain in an
amount and manner sufficient to eliminate such deficit balance as quickly as
possible.
To the extent this Section 3.07 prevents the allocation of a deduction or
loss to a Partner, such deduction or loss shall be allocated between the
Partners in accordance with their interests in the Partnership as determined
under Treasury Regulation Section 1.704-1(b)(3).
ARTICLE IV
----------
EARNINGS DISTRIBUTIONS AND WITHDRAWAL OF CAPITAL
------------------------------------------------
SECTION 4.01. Earnings Distributions. Unless the General Partner, in its
----------------------
sole discretion, decides otherwise, all available cash for each Fiscal Year from
the operations of the Partnership shall be retained by the Partnership. The
General Partner may, in its sole discretion, make such distributions of cash to
enable each Partner to pay his or her federal income liability with respect to
such Partner's distributable share of the Partnership's federal income tax
liability.
SECTION 4.02. Withdrawals. Should any Limited Partner desire to withdraw
-----------
any portion of the positive balance of his Capital Account (as adjusted pursuant
to Article VII hereof), other than the distributions contemplated by Section
4.01 hereof, such Limited Partner or Partners shall notify the General Partner
in writing of such intent no later than thirty (30) days before the end of the
Fiscal Year. Any such withdrawal may only be effective as of the end of a
Fiscal Year. All such withdrawals from the Capital Accounts of the withdrawing
Limited Partner or Partners shall be paid in cash or, at the sole option of the
General Partner, by distribution of Partnership property valued in accordance
with this Agreement to the withdrawing Limited Partner or Partners by the
Partnership as soon as reasonably practicable after the books of the Partnership
are closed with respect to such Fiscal Year and the Partnership's information
tax return for such Fiscal Year has been prepared. The General Partner may, at
its sole option, estimate the withdrawing Limited Partner's Capital Account
14
as of the end of the Fiscal Year taking into account, inter alia, the amount, if
----------
any, of Net Profits that may be allocated to the General Partner pursuant to
Section 3.06(a)(ii), and may make a payment in partial satisfaction of the
amount that the Limited Partner's seeks to withdraw, before the books are closed
and the Partnership's information tax returns are completed for such Fiscal
Year. The General Partner may, in its sole discretion, permit a Limited Partner
to withdraw any portion of the positive balance of his Capital Account as
permitted in this Section 4.02 at the end of each fiscal quarter of the
Partnership in the case of special circumstances. However, any such withdrawal
shall comply in all respects with the provisions of this Agreement applicable to
annual withdrawals of capital specified in this Section 4.02.
SECTION 4.03. Audit. In the event that the Partnership makes any
-----
distributions pursuant to the terms of this Agreement, which, after a
Partnership audit, are determined to be in excess of the distribution properly
allowable hereunder, such Partner shall promptly return to the Partnership such
excess together with interest thereon from the date of receipt of such excess
to the date of repayment at the prime or base rate of interest announced from
time to time by NationsBank of Texas, N.A., or its successor.
ARTICLE V
---------
ADMISSION OF NEW PARTNERS
-------------------------
SECTION 5.01. New Limited Partners. The General Partner may admit,
--------------------
effective at the beginning of any Fiscal Year, one or more new Limited Partners
and determine the terms and conditions thereof, so long as they are identical to
the terms and provisions of this Agreement, subject only to the condition that
each such new Limited Partner shall execute an appropriate amendment or
supplement to this Agreement pursuant to which he agrees to be bound by the
terms and provisions hereof. Admission of one or more new Limited Partners
shall not be a cause for dissolution of the Partnership. Upon the admission of
one or more new Limited Partners, the Capital Account of each Partner shall be
adjusted as contemplated by Section 3.04 hereof.
ARTICLE VI
----------
WITHDRAWAL, DEATH OR INSANITY OF PARTNERS
-----------------------------------------
SECTION 6.01. Withdrawal of General Partner.
-----------------------------
(a) Should the General Partner desire to withdraw from the Partnership, he
shall notify the Limited Partners of such intent prior to the end of the then-
current Fiscal Year with his withdrawal to be effective on and as of midnight on
December 31 of such Fiscal Year. The withdrawal of the General Partner shall
dissolve the Partnership unless prior to the effective date of such withdrawal
the Limited Partners owning Partnership interests representing a majority of
Partnership Percentages shall have selected a successor general partner and such
person, firm, corporation, partnership or other entity who shall have been
admitted as a General Partner, who shall
15
have entered into an amendment to this Agreement assuming the responsibilities
of the General Partner hereunder and who shall have received a Capital Account,
by contribution or transfer of interest, in an amount approved by Limited
Partners owning Partnership interests representing a majority of Partnership
Percentages, in which case the Partnership shall not be dissolved. Subject to
Sections 1.04 and 6.03, upon withdrawal, the General Partner shall be entitled
to receive his positive Capital Account balance (as adjusted pursuant to Section
3.04 hereof as the same is shown in the Partnership's books and records) as of
the end of such Fiscal Year, not later than the tenth day following the day the
books of the Partnership are closed and the Partnership's tax return for such
Fiscal Year is completed. No approval or consent of any Limited Partner shall be
required for the withdrawal of such incumbent General Partner, whether or not
such withdrawal ultimately results in termination and liquidation of the
Partnership.
(b) The withdrawal of the incumbent General Partner, without due succession
of another General Partner, shall cause the Partnership to terminate, and
Limited Partners holding Partnership interests representing a majority of
Partnership Percentages may select one or more persons, firms, corporations or
other entities (the "Terminating Party") to wind up the affairs of the
Partnership in due course and discharge the functions exercised by the General
Partner under Sections 7.01 and 7.02, and the interest in the Partnership of the
General Partner shall continue at the risk of the Partnership business until the
affairs of the Partnership have been wound up in due course.
(c) In the event of an event of withdrawal (as defined in the Texas Act) of
the General Partner, other than his or its removal or voluntary withdrawal
provided for above, which results in the termination and liquidation of the
Partnership, the interest in the Partnership of such General Partner shall
continue at the risk of Partnership business until the affairs of the
Partnership have been wound up in due course in accordance with Sections 7.01
and 7.02 hereof, and his or its legal representative shall be entitled to
receive the positive balance of his or its Capital Account in accordance with
Sections 7.01 and 7.02 hereof, except as provided in Sections 1.04 and 6.03
hereof.
SECTION 6.02. Withdrawal, Death, etc., of Limited Partner.
-------------------------------------------
(a) Except as otherwise provided in Sections 2.06 and 2.10 hereof, should a
Limited Partner or Limited Partners desire to withdraw from the Partnership, it
or they shall notify the General Partner of such intent no later than thirty
days before the end of the then current Fiscal Year of its or their withdrawal
to be effective on and as of midnight on the last day of such Fiscal Year,
unless the Partnership is terminated earlier. Except as provided in Section
6.03, the Limited Partner shall be entitled to receive the positive balance of
his Capital Account (as adjusted pursuant to Section 3.04 hereof) as the same is
shown on the Partnership's books and records as of the effective day of such
withdrawal. The Capital Accounts of the withdrawing Limited Partner shall be
paid in cash or, at the sole option of the General Partner, by distribution of
Partnership property valued in accordance with this Agreement to the withdrawing
Limited Partner by the Partnership as soon as reasonably practicable after the
books of the Partnership are closed with respect to such Fiscal Year and the
Partnership's information tax return for such Fiscal Year has been prepared.
The General Partner may, at its sole option, estimate the withdrawing Limited
Partner's Capital Account as of the
16
end of the Fiscal Year, and may make a payment in partial satisfaction of the
Capital Account of the withdrawing the Limited Partner, before the books are
closed and the Partnership's information tax returns are completed for such
Fiscal Year.
(b) The withdrawal, liquidation, death or insanity of a Limited Partner
shall not dissolve the Partnership.
(c) In the event of the liquidation, death or insanity of a Limited
Partner, the positive Capital Account balance (as adjusted pursuant to Section
3.04 hereof) of such Limited Partner shall be paid to the legal representative
of such liquidated, deceased or insane Limited Partner following the close of
the Fiscal Year in accordance with the provisions of Section 6.02(a) as if such
deceased or insane Limited Partner had voluntarily withdrawn from the
Partnership, except as provided in Section 6.03 hereof. In the event of the
liquidation, death or insanity of a Limited Partner, the legal representatives
of such Limited Partner may, with the written approval of the General Partner,
continue as a Limited Partner after the end of the Fiscal Year during which such
event occurred. The interest of a Limited Partner who dies or becomes insane,
or the interest of the legal representatives of such Limited Partner, shall not
after the end of such Fiscal Year be included as an asset of the Partnership nor
included in calculating Partnership Percentages or a majority of Partnership
Percentages of the Limited Partners under Sections 6.01, 7.01 or 10.03;
provided, however, in the event the General Partner has approved the continuance
--------
of a Limited Partner's legal representatives as a Partner of the Partnership
pursuant to the preceding sentence, such Partnership Percentages shall be so
included in such calculations.
SECTION 6.03. Limitations on Withdrawal of Capital Account; Prorated
------------------------------------------------------
Distributive Share. The right of any withdrawn, terminated, liquidated,
------------------
deceased or insane Partner or his legal representative to have distributed the
positive balance of such Partner's Capital Account is subject to the reasonable
provision by the General Partner, the successor General Partner or the
Terminating Party, as appropriate, for all Partnership liabilities in accordance
with the Texas Act and for reserves for contingencies, which reserves shall be
held in escrow. The unused portion of any reserve shall be distributed after
the General Partner shall have determined that the need therefor shall have
ceased.
ARTICLE VII
-----------
DURATION AND TERMINATION OF PARTNERSHIP
---------------------------------------
SECTION 7.01. Dissolution and Wind-up of Affairs.
----------------------------------
(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
17
terminated, its affairs wound-up and its property and assets distributed in
liquidation on the earlier to occur of:
(i) December 31, 2010;
(ii) a determination by holders of Partnership interests representing
a majority of Partnership Percentages that the business of the Partnership
should be terminated;
(iii) the bankruptcy or insolvency of the Partnership;
(iv) subject to Section 6.01 hereof and the provisions of paragraph
(b) below, the occurrence of an event of withdrawal (as defined in the
Texas Act) with respect to a General Partner; or
(v) the date upon which the Partnership is terminated under Section
7.02(c). 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 an order for relief
under Title 11 of the United States Code Annotated is entered against it,
and insolvency shall be deemed to have occurred when the party in question
admits in writing that its assets are insufficient to pay its liabilities
as they mature.
(b) Upon the occurrence of any event set forth in subparagraph (iv) of
paragraph (a) above with respect to a General Partner, the business of the
Partnership shall be continued pursuant to the provisions of this Agreement if
there (i) remains at least one General Partner, or (ii) is no remaining General
Partner, the Limited Partners unanimously shall elect a new General Partner in
accordance with Section 6.01 hereof.
(c) 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 Limited Partners owning
a majority of Partnership Percentages if the termination results from the
circumstance described in Section 7.01 (a)(iv) above) shall wind-up the affairs
of the Partnership, sell its property and assets for cash at the highest price
reasonably obtainable and distribute the proceeds in accordance with Section
7.02 in liquidation of the Partnership.
SECTION 7.02. Termination and Liquidation.
---------------------------
(a) Upon liquidation (as defined in Section 7.02(c) hereof) of the
Partnership, the assets of the Partnership shall be distributed as soon as
practicable 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);
18
(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 reasonably determines to be 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.
(b) For purposes of this Section 7.02, a liquidation of the Partnership
shall occur upon the date upon which the Partnership is terminated under Section
7.01.
SECTION 7.03. Liquidation of Partner's Interest. 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 (including
Section 3.04 hereof) for the Partnership's taxable year during which such
liquidation occurs. 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 7.03,
a liquidation of a Partner's interest in the Partnership means the termination
of the Partner's entire interest in the Partnership by means of a distribution
or series of distributions to the Partner by the Partnership. Where a Partner's
interest is to be liquidated by a series of distributions, the interest shall
not be considered as liquidated until the final distribution has been made.
ARTICLE VIII
------------
REPORTS TO PARTNERS
-------------------
SECTION 8.01. Financial Statements. Unaudited financial statements as of
--------------------
the close of each calendar year of the Partnership shall be prepared by the
General Partner and distributed to all of the Partners. Such financial
statements shall include a report of the amount of such Partner's Capital
Account at and as of the end of such calendar year, determined pursuant to
Section 3.04.
SECTION 8.02. Tax Returns. As soon as possible after the end of each
-----------
Fiscal Year, the General Partner shall cause to be prepared and mailed to each
Partner or other person who was a Partner at any time during such Fiscal Year
(or his legal representative) Internal Revenue Service Form K-1 and such other
information as shall be necessary for such Partner or former Partner (or his
legal representative) to prepare his income tax returns in accordance with the
laws, rules and regulations then prevailing.
19
ARTICLE IX
INDEMNIFICATION
---------------
If a General Partner, or any person appointed by the General Partner as a
manager, officer or other agent (whether acting as the General Partner or, at
the request of the Partnership in connection with Securities held by the
Partnership, as a representative of another enterprise) or a representative of
such General Partner (a "Partnership Functionary") is, was or is threatened to
be made a named defendant or respondent in a 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 (herein collectively referred to as a "Proceeding"), by reason of the
fact that such person was or is serving as a Partnership Functionary in
accordance with the provisions of this Agreement, then the Partnership shall (i)
indemnify such Partnership Functionary against judgments, penalties (including
excise and similar taxes), fines, settlements, and reasonable expenses actually
incurred in connection with such Proceeding, and (ii) pay or reimburse the
Partnership Functionary, in advance of the final disposition of the Proceeding,
reasonable expenses incurred in connection with the Proceeding, all to the
fullest extent permitted by the Texas Act.
ARTICLE X
---------
MISCELLANEOUS
-------------
SECTION 10.01. Expenses. The Partnership shall bear the pre-organizational
--------
and organizational expenses of the Partnership.
SECTION 10.02. General. This Agreement (a) shall be binding on the legal
-------
representatives, executors, administrators, estates, heirs, successors and
permitted assigns of the Partners, (b) shall be governed by, and construed in
accordance with, the laws of the State of Texas, and (c) this Agreement and any
amendment hereto may be executed in several counterparts with the same effect as
if the parties executing the several counterparts had all executed one
counterpart as of the date and year first above written on this Agreement or on
any amendment to this Agreement; provided, however, that the several
-------- -------
counterparts, in the aggregate, shall have been signed by all of the Partners.
SECTION 10.03. Amendments to Partnership Agreement. The terms and
-----------------------------------
provisions of this Agreement may be amended at any time and from time to time
(a) in accordance with Section 2.11 hereof or (b) with the written consent of
Limited Partners holding a majority of Partnership Percentages and the written
consent of the General Partner.
SECTION 10.04. Notices. Each notice relating to this Agreement shall be in
-------
writing and delivered in person or by registered or certified mail, return
receipt requested. All notices to the Partnership or to the General Partner
shall be addressed to the Partnership's principal office and place of business.
All notices addressed to a Limited Partner shall be addressed to such Limited
Partner
20
at the address set forth in the Schedule as then in effect. Any Partner
may designate a new address by notice to that effect given to the Partnership.
Unless otherwise specifically provided in this Agreement, a notice shall be
deemed to have been effectively given five (5) days after being mailed by
registered or certified mail, return receipt requested, to the proper address or
delivered in person.
SECTION 10.05. Number and Gender of Words. Whenever in this Agreement the
--------------------------
singular number is used, the same shall include the plural, where appropriate,
and vice versa; and words of any gender shall include all other genders where
appropriate.
SECTION 10.06. Headings. The titles of the Articles and the headings of
--------
the Sections of this Agreement are for convenience of reference only and are not
to be considered in construing the terms and provisions of this Agreement.
SECTION 10.07. Partition. No Partner shall be entitled to a partition of
---------
any property or assets of the Partnership, notwithstanding any provision of law
to the contrary.
SECTION 10.08. 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.
SECTION 10.09. Partner Activities. Except as provided in Sections 2.04 and
------------------
2.09, but otherwise notwithstanding anything to the contrary contained in or
inferable from this Agreement, the Texas Act or any other statute or principle
of law, neither the Partners nor any of their Affiliates shall be prohibited or
restricted in any way from investing in or conducting, either directly or
indirectly, and may invest in and/or conduct, either directly or indirectly,
businesses of any nature whatsoever, including the ownership and operation of
businesses or properties similar to or in the same geographical area as those
held by the Partnership. Any such investment in or conduct of any such business
by a Partner or Affiliate thereof shall not give rise to any claim for an
accounting by the other Partners or the Partnership or any right to claim any
interest therein or the profits therefrom.
SECTION 10.10. Spouses as Parties. The parties hereto agree that, if
------------------
applicable, the spouse of each Limited Partner shall be deemed to be a party to
this Agreement, shall be bound by all of terms and conditions hereof and shall
so signify by executing this Agreement.
21
IN WITNESS WHEREOF, the undersigned have hereto set their hands as of the
day and year first above written.
GENERAL PARTNER:
CARDINAL INVESTMENT COMPANY, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
LIMITED PARTNERS:
-------------------------------------
Xxxxxx Xxxxxx
XXXXX XXXXXXXXXX XXXXXXX TRUST
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
-------------------------------------
Xxxxxxxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxx
22
-------------------------------------
Xxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
-------------------------------------
Xxxxx Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxxxxx Xxxxxxxx
-------------------------------------
Xxxx Xxxxxxx
-------------------------------------
Xxxx XxXxxxxx
-------------------------------------
Xxxxx Xxxxxxxxxxxx
-------------------------------------
Xxxx Xxxxxxxxxxxx
23
-------------------------------------
Xxxxx Xxxxxxxxxxxx
-------------------------------------
Xxxx Xxxxxxxxxxxx
XXXXXX XXXXX TRUST
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
-------------------------------------
Dee Xxx Xxxxx
XXXXX XXXXX TRUST
By:
---------------------------------
Name:
--------------------------------
Title:
-------------------------------
-------------------------------------
Xxxxxxxx X. Xxxxx
XXXXXXX XXXXX TRUST
By:
---------------------------------
Name:
--------------------------------
Title:
-------------------------------
24
-------------------------------------
Xxxx Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxx III
XXXX X. XXXX TRUST
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
-------------------------------------
Xxxxxxx X. Xxxx
-------------------------------------
Xxxx X. Xxxxxx
JET LAND & CATTLE COMPANY
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
-------------------------------------
Xxxxxxxx X. Xxxxxx
--------------------------------------------------
Xxxxxx Xxxxxx
25
