AGREEMENT OF LIMITED PARTNERSHIP OF
Gemini Health Technologies L.P.
A DELAWARE LIMITED PARTNERSHIP
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THIS AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") of Gemini Health
Technologies L.P. (the "Partnership") dated as of the 18th day of June, 1998 is
entered into by and between EPi Health Technologies, Inc., a Delaware
corporation, as general partner (the "Company" or the "General Partner") and
Krishna and Shaskikala Xxxxxxxxx, as limited partners (collectively the
"Jayaramans" or the "Limited Partners" and collectively with the General
Partner, the "Partners").
RECITALS
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WHEREAS, the Partners desire to form a limited partnership under the
Act for the purposes and on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
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DEFINITIONS AND INTERPRETATION
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1.1 Definitions: For purposes of this Agreement, the following capitalized
terms are defined as follows:
1.1.1 "Act" shall mean the Revised Limited Partnership Act of the
State of Delaware, as amended, replaced, modified or
supplemented from time to time.
1.1.2 "Adjusted Capital Account Deficit" shall mean, with respect
to any Partner, the deficit balance, if any, in such
Partner's Capital Account as of the end of the relevant
Fiscal Year, after giving effect to the following
adjustments:
(i) Credit to such Capital Account any amounts which such
Partner is obligated to restore or is deemed to be
obligated to restore pursuant to Regulation Section
1.704- 1(b)(2)(ii)(C); and
(ii) Debit to such Capital Account the items described in
Regulation Section 1.704- 1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit
is intended to comply with the provisions of Regulation
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently.
1.1.3 "Affiliate" of a Person shall mean any other Person that
directly or indirectly, through one or more intermediaries,
has control of, is controlled by or is under common control
with, such first Person. For the purpose of this definition,
"control" (including with correlative meanings, the terms
"controlling", "controlled by", and "under common control
with") as applied to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person,
whether through ownership of voting securities or by
contract or otherwise.
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1.1.4 "Agreement" shall mean this Agreement of the Limited
Partnership of the Partnership, as it may be amended from
time to time.
1.1.5 "Book Basis" of a Partnership asset shall mean the asset's
adjusted tax basis, as determined for federal income tax
purposes; provided, however, that (i) if Property is
contributed to the Partnership the initial Book Basis of
such Property shall be its fair market value on the date of
contribution; (ii) if the Capital Accounts of the
Partnership are adjusted pursuant to Regulation Section
1.704-1(b)(2)(iv)(f) to reflect the fair market value of the
Partnership's assets, the Book Basis of each such asset
shall be adjusted to equal its fair market value as of the
time of such adjustment in accordance with such Regulation;
and (iii) the Book Basis of all assets shall be adjusted
thereafter by depreciation and amortization as provided in
Regulation Section 1.704-1(b)(2)(iv)(g).
1.1.6 "Business Day" shall mean a day other than a Saturday,
Sunday or day on which banks in the State of Florida are
required or authorized to close.
1.1.7 "Capital Account" for any Partner shall mean such Partner's
capital account determined in accordance with Section 4.1.
1.1.8 "Capital Contributions" for any Partner shall mean the
contribution(s) by such Partner of Property to the capital
of the Partnership.
1.1.9 "Certificate of Limited Partnership" shall mean the
Certificate of Limited Partnership of the Partnership in the
form attached hereto as Exhibit A.
1.1.10 "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated
thereunder.
1.1.11 "Commission" shall mean the United States Securities and
Exchange Commission.
1.1.12 "Common Stock" has the meaning set forth in the Exchange
Agreement.
1.1.13 "Contribution Agreement" shall mean the Contribution
Agreement dated as of the Effective Date between the
Partnership, the Limited Partners and the Company in the
form attached hereto as Exhibit B.
1.1.14 "Deemed Value" shall mean as of any date, the total number
of share of Common Stock issued and outstanding as of the
close of business on such date (excluding any treasury
shares) multiplied by the Fair Market Value of a share of
Common Stock on such date divided by the Percentage Interest
of the Company on such date.
1.1.15 "Earn-Outs" shall mean the additional shares of Common Stock
that may be issued pursuant to (i) Section 3.6 of the
Agreement of Merger and Plan of Reorganization among
Electropharmacology, Inc., EPi Sub Inc. and HealthTech
Development Inc. and (ii) Section 4.1 of the Contribution
Agreement.
1.1.16 "Effective Date" shall mean the date of this Agreement.
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1.1.17 "Exchange Agreement" shall mean the Unit Exchange Agreement
dated as of the Effective Date among the Partnership, the
Company and Gemini in the form attached hereto as Exhibit C.
1.1.18 "Fair Market Value" shall mean, with respect to a share of
Common Stock, the average of the daily market price for the
ten (10) consecutive trading days immediately preceding the
valuation date. The market price for each such trading day
shall be: (i) if the Common Stock is listed or admitted to
trading on any securities exchange or the National Market
System of The Nasdaq Stock Market, the closing price,
regular way, on such day, or if no such sale takes place on
such day, the average of the closing bid and asked prices on
such day, (ii) if the Common Stock is not listed or admitted
to trading on any securities exchange or the National Market
System of The Nasdaq Stock Market, the last reported sale
price on such day or, if no sale takes place on such day,
the average of the closing bid and asked prices on such day,
as reported by a reliable quotation source designated by the
Committee, or (iii) if the Common Stock is not listed or
admitted to trading on any securities exchange or the
National Market System of The Nasdaq Stock Market and no
such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid
and low asked prices on such day, as reported by a reliable
quotation source designated by the Company, or if there
shall be no bid and asked prices on such day, the average of
the high bid and low asked prices, as so reported, on the
most recent day (not more than 10 days prior to the date in
question) for which prices have been so reported; provided
that if there are no bid and asked prices reported during
the 10 days prior to the date in question, the Fair Market
Value of the Common Stock shall be determined by the Company
acting in good faith on the basis of such quotations and
other information as it considers, in its reasonable
judgment, appropriate and provided further that, in
connection with determining the Deemed Value of the
Partnership Units for purposes of determining the number of
additional Partnership Units issuable upon a Capital
Contribution funded by an offering of Common Stock, then the
Fair Market Value of the Common Stock shall be the offering
price per share of the Common Stock sold.
1.1.19 "Fiscal Year" shall mean the year end of the Partnership as
determined pursuant to Section 9.4.
1.1.19a "Gemini" shall mean Gemini Biotech L.P., a Texas limited
partnership.
1.1.20 "Gemini Non-Competition Agreement" shall mean the
Non-Competition Agreement dated as of the Effective Date
between the Partnership, Gemini and certain Affiliates of
Gemini in the form attached hereto as Exhibit D.
1.1.21 "General Partner" shall mean EPi HealthTech Inc., a Delaware
corporation, and any other Person permitted to act as a
general partner from time to time pursuant to the provisions
of this Agreement, for so long as such Person is a General
Partner hereunder.
1.1.22 "IRS" shall mean the U.S. Internal Revenue Service.
1.1.23 "Limited Partners" shall mean Krishna Jayarmanan and
Xxxxxxxxxx Xxxxxxxxx.
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1.1.24 "Net Profits" or "Net Loss" shall mean for each Fiscal Year
or other period, the taxable income or loss of the
Partnership determined in accordance with the accounting
methods used by the Partnership for U.S. federal income tax
purposes with the following adjustments:
(i) all items of income gain, loss or deduction
allocated pursuant to Section 4.4 shall not be taken
into account in computing taxable income or loss;
(ii) any income of the Partnership that is exempt
from U.S. federal income taxation and not otherwise
taken into account in computing Net Profits and Net
Losses shall be added to such taxable income or loss;
(iii) if the book value for Capital Account purposes
of any asset differs from its adjusted basis for U.S.
federal income tax purposes, any gain or loss
resulting from a disposition of such asset shall be
calculated with reference to such book value;
(iv) upon an adjustment to the book value for Capital
Account purposes of any asset, the amount of the
adjustment shall be included as gain or loss in
computing such taxable income or loss;
(v) if the book value for Capital Account purposes of
any asset differs from its adjusted basis for U.S.
federal income tax purposes the amount of
depreciation, amortization or other cost recovery
deductions with respect to such asset shall for
purposes of determining Net Profits and Net Losses be
an amount that bears the same ratio to such book
value for Capital Account purposes as the U.S.
federal income tax depreciation, amortization or
other cost recovery deductions bears to such adjusted
basis; and
(vi) except for items in (i) above, any expenditures
of the Partnership not deductible in computing
taxable income or loss, not properly capitalizable
and not otherwise taken into account in computing Net
Profits and Net Losses pursuant to this definition
shall be treated as deductible items.
1.1.25 "Nonrecourse Deductions" has the meaning given in Regulation
Section 1.704-2(b)(1).
1.1.26 "Nonrecourse Liability" has the meaning given in Regulation
Section 1.752-1(a)(2).
1.1.27 "Option Plan" shall mean the 1993 Stock Option Plan of the
Company, as amended December 13, 1996.
1.1.28 "Partner Minimum Gain" shall mean an amount, with respect to
each Partner Nonrecourse Debt, equal to Partnership Minimum
Gain that would result if such Partner Nonrecourse Debt were
treated as a Nonrecourse Liability, determined in accordance
with Regulations Section 1.740-2(i)(3).
1.1.29 "Partner Nonrecourse Debt" has the meaning given in
Regulation Section 1.704-2(b)(4).
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1.1.30 "Partner Nonrecourse Debt Minimum Gain" shall mean an
amount, with respect to each Partner Nonrecourse Debt, equal
to the Partnership Minimum Gain that would result if such
Partner Nonrecourse Debt were treated as a Nonrecourse
Liability, determined in accordance with Regulation Section
1.704-2(i)(3).
1.1.31 "Partner Nonrecourse Deductions" shall mean the partner
nonrecourse deductions as defined in Regulations Section
1.704-(2)(i)(2).
1.1.32 "Partners" shall mean the General Partner and the Limited
Partners.
1.1.33 "Partnership" shall mean Gemini Health Technologies L.P., a
Delaware limited partnership.
1.1.34 "Partnership Units" shall mean the interest in the
Partnership of a Partner. A Partner's ownership equity
interest in the Partnership is represented by the number of
Partnership Units such Partner holds, as set forth on
Exhibit E of this Agreement, which may be modified from time
to time when additional Partnership Units are issued or
Partnership Units are exchanged or assigned.
1.1.35 "Partnership Minimum Gain" has the meaning given in
Regulation Section 1.704-2(b)(2) and 1.704-2(d).
1.1.36 "Percentage Interest" shall mean the ratio, expressed as a
percentage, that the number of Partnership Units held by a
Partner bears to the total number of Partnership Units
outstanding.
1.1.37 "Permitted Transferee" shall mean, (i) in the case of the
Company, any Affiliate of the Company and (ii) in the case
of Gemini, Xxxxxxx Xxxxxxxxx and Xxxxxxxxxx Xxxxxxxxx.
1.1.38 "Person" shall mean an individual, proprietorship, trust,
estate, partnership, joint venture, association, company,
limited liability company, corporation or other entity.
1.1.39 "Property" shall mean all assets and properties of every
kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether
absolute, accrued, contingent, fixed or otherwise and
wherever situated), including cash, cash equivalents,
general intangibles, real estate, equipment, inventory,
goods and intellectual property.
1.1.40 "Regulations" shall mean the Income Tax Regulations,
including Temporary Regulations, promulgated under the Code,
as such regulations may be amended from time to time
(including corresponding provisions of succeeding
regulations).
1.1.41 "Securities Act" shall mean the Securities Act of 1933, as
amended and the rules and regulations promulgated
thereunder.
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1.1.42 "Technology" shall mean all technologies, patented or
unpatented, patentable or unpatentable, developed by or on
behalf of, or assigned or assignable to Company or Gemini.
1.1.43 "Transfer" shall mean any transfer, alienation, sale,
assignment, pledge or other disposition or encumbrance,
whether voluntarily or involuntarily, and shall include any
direct or indirect change in control of a Person.
1.2 Interpretation: The following provisions shall govern the
interpretation of this Agreement:
1.2.1 The singular form of any word used herein, including the
terms defined in Section 1.1., include the plural, and vice
versa, unless the context otherwise requires. The use herein
of a pronoun of any gender shall include correlative words
of the other gender.
1.2.2 Unless otherwise expressly indicated, all references herein
to "Articles", "Sections" and other subdivisions hereof are
to the corresponding Articles, Sections or subdivisions of
this Agreement; and the words "herein", "hereof",
"hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Article,
Section or subdivision hereof.
1.2.3 The headings or titles of the several Articles and Sections
hereof, and any table of contents appended to copies hereof,
shall be solely for convenience of reference and shall not
affect the meaning, construction or effect of this
Agreement.
1.2.4 Each reference herein to any agreement, instrument or other
document shall mean such agreement, instrument or document
as from time to time amended, modified or supplemented in
accordance with the terms hereof and thereof. The term
"including" shall be construed to mean "including but not
limited to."
ARTICLE 2
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ORGANIZATION AND PURPOSE
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2.1 Formation: Subject to the provisions of this Agreement, the Partnership
shall be a limited partnership pursuant to the provisions of the Act.
The rights and obligations of the Partners and the administration and
termination of the Partnership shall be governed by this Agreement and
the Act.
2.2 Name: The name of the Partnership shall be, and the business of the
Partnership shall be conducted under the name of, "Gemini Health
Technologies L.P." The Partnership's business may be conducted under
any other name or names deemed advisable by the General Partner,
including the name of the General Partner or any Affiliate of the
General Partner.
2.3 Purpose: The purpose and business of the Partnership shall be to,
directly or indirectly:
2.3.1 develop and exploit the Technology in such manner as the
General Partner deems appropriate;
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2.3.2 acquire, hold, own, operate, lease, manage, maintain,
improve, repair, replace, reconstruct, sell or otherwise
dispose of and use the Property of the Partnership; and
2.3.3 enter into any lawful transaction and engage in any lawful
activity incidental to or in furtherance of the foregoing
purposes.
2.4 Registered Office and Principal Place of Business: The registered
office of the Partnership in the State of Delaware shall be located at
c/o Corporation Service Company, 0000 Xxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx, 00000, and the registered agent for service of process on the
Partnership at such registered office shall be Corporation Service
Company. The principal office of the Partnership shall be 0000 X.X.
00xx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxx 00000 or such other place
as the General Partner may from time to time designate.
2.5 Term: The Partnership's term shall commence on the filing of the
Certificate of Limited Partnership with the Secretary of State of the
State of Delaware and shall terminate on December 31, 2047 or as
otherwise provided by this Agreement or by law.
2.6 Documents: The Partnership shall file the documents necessary to comply
with the requirements of the laws of the State of Delaware for the
formation, continuation and operation of a limited partnership. The
General Partner agrees to execute all documents and to undertake all
other acts, as reasonably may be deemed necessary, in order to comply
with the requirements of the laws of the State of Delaware for the
continuation and operation of limited partnerships.
2.7 Title to Partnership Property: All Property owned by the Partnership,
whether real or personal, tangible or intangible, shall be owned by the
Partnership as an entity, and no Partner, individually, shall have any
ownership interest in any such Property.
2.8 Qualifications: The General Partner shall cause the Partnership to
comply with the laws of any jurisdiction where the Partnership engages
in business for the operation of a foreign limited partnership. The
General Partner agrees to execute and deliver all documents and to
undertake all other acts, as reasonably may be deemed necessary, in
order to comply with the requirements of the laws of any other
jurisdiction where the Partnership engages in business for the
formation, continuation and operation of a foreign limited partnership.
ARTICLE 3
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CAPITAL CONTRIBUTIONS AND
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FINANCIAL OBLIGATIONS OF PARTNERS
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3.1 Initial Capital Contributions.: On the Effective Date, (i) the Company
shall make an initial Capital Contribution to the Partnership of the
Company Contributed Property (as defined in the Contribution Agreement)
and (ii) Jayaramans shall make an initial Capital Contribution to the
Partnership of the Jayaramans Contributed Property (as defined in the
Jayarmans Contribution Agreement). On the Effective Date, the Company
and Gemini shall each own the number of Partnership Units set forth on
Exhibit E.
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3.2 Additional Capital Contributions: No Partner is required to make any
additional Capital Contribution to the Partnership beyond its initial
Capital Contribution, provided that if the Company (i) makes a primary
offering of Common Stock, it shall invest the net proceeds of such
offering in the Partnership in exchange for a number of Partnership
Units determined as set forth below and (ii) if the Company issues any
shares of Common Stock in exchange for Property, it shall contribute
such Property to the Partnership in exchange for a number of
Partnership Units determined as set forth below. The number of
Partnership Units to be issued pursuant to clauses (i) and (ii) shall
be calculated as follows:
APU = (CC/DV) x TPU
where
APU = number of additional Partnership Units to be issued
CC = in the ease of a contribution of Property other
than cash, the fair value of the Capital
Contribution; in the case of a contribution of cash,
the amount of such cash, provided, however, that in
the case of a contribution by the Company of cash
proceeds from a public or private Common Stock
offering, the amount of cash for this purpose shall
be determined without reduction for expenses of such
offering
DV = Deemed Value of the Partnership Units as of the date
of such Capital Contribution
TPU = total number of Partnership Units outstanding
immediately prior to the Capital Contribution
3.3 Issuance of Common Stock Pursuant to Options: If at any time the
Company issue shares of Common Stock pursuant to the Option Plan, it
will contribute the proceeds therefrom (if any) to the Partnership as
an additional Capital Contribution.
3.4 Issuance of Common Stock Pursuant to Earn-Outs: If at any time the
Company issue shares of Common Stock pursuant to the Earn-Outs, the
Partnership shall issue to the Company additional Partnership Units
equal to the number of shares of Common Stock so issued, it being
agreed that such Partnership Units shall be issued notwithstanding that
no proceeds are received by the Company with respect to such issuance.
The number of shares of Common Stock to be issued pursuant to this
Section 3.4, shall be adjusted in accordance with the provisions of
Article III of the Exchange Agreement, if applicable.
3.5 No Interest on Contributions or Capital Accounts: No Partner shall be
entitled to interest on its Capital Contributions or on balances in its
Capital Account..
3.6 Return of Capital Contributions and Capital Accounts: No Partner shall
be entitled to withdraw any part of its Capital Contribution or its
Capital Account or receive any distribution from the Partnership,
except as specifically provided in this Agreement. Except as otherwise
provided herein, there shall be no obligation to return to any Partner
or withdrawn Partner any part of such Partner's Capital Contribution or
its Capital Account for so long as the Partnership continues in
existence.
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3.7 Liability of Limited Partners: Except to the extent provided by
applicable law, no Limited Partner shall be liable for any of the
debts, liabilities, contracts or other obligations of the Partnership.
Except to the extent provided herein and by applicable law, a Limited
Partner shall have no liability in excess of the amount of its Capital
Contributions and its share of the Partnership's Property and
undistributed profits and shall not be required to repay to the
Partnership, to any Partner or to any creditor of the Partnership any
portion or all of any negative balance of its Capital Account.
3.8 Liability of General Partner: The General Partner is not personally
liable to the Limited Partners for repayment of the Limited Partners'
Capital Contribution. The General Partner shall have unlimited
liability for the debts, liabilities, obligations and losses of the
Partnership.
ARTICLE 4
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CAPITAL ACCOUNTS
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ALLOCATIONS OF NET PROFITS AND NET LOSSES AND TAX MATTERS
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4.1 Capital Accounts: A separate capital account (a "Capital Account")
shall be established and maintained for each Partner. The Capital
Account of each Partner shall be credited with such Partner's Capital
Contributions, all Net Profits allocated to such Partner pursuant to
Section 4.2 including any items of income or gain specially allocated
pursuant to Section 4.3 and the amount of any Partnership liabilities
assumed by such Partner or which are secured by any Property
distributed to such Partner; and shall be debited with all Net Losses
allocated to such Partner pursuant to Section 4.2 including any items
of loss or deduction of the Partnership specially allocated to such
Partner pursuant to Section 4.3, all cash and the fair market value of
any Property (net of liabilities assumed by such Partner and the
liabilities to which such Property is subject) distributed by the
Partnership and the amount of any liabilities of such Partner assumed
by the Partnership or which are secured by any Property contributed by
such Partner to the Partnership. To the extent not provided for in the
preceding sentence, the Capital Accounts of the Partners shall be
adjusted and maintained in accordance with the rules of Regulation
Section 1.704-1(b)(2)(iv), as the same may be amended or revised. Any
references in any Section of this Agreement to the Capital Account of a
Partner shall be deemed to refer to such Capital Account as the same
may be credited or debited from time to time as set forth above. In the
event of any transfer of any Partnership Interest in accordance with
the terms of the Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred
Interest.
4.2 Allocations of Net Profits and Net Losses: Except as otherwise provided
in this Agreement, Net Profits and Net Losses of the Partnership shall
be allocated among the Partners in accordance with their Percentage
Interests.
4.3 Mandatory Allocations:
4.3.1 Minimum Gain Chargeback: Except as otherwise provided in
Regulation Section 1.704- 2(f), notwithstanding any other
provisions of this Article 4, if there is a net decrease in
Partnership Minimum Gain for any Fiscal Year, each Partner
shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in
an amount equal to the such Partner's share of the net
decrease in Partnership Minimum Gain, as determined under
Regulation Section 1.704-2(g). Allocations pursuant to the
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previous sentence shall be made in proportion to the
respective amounts required to allocated to each Partner
pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulation Sections
1.704-2(f)(6) and 1.704-2(j)(2). This Section 4.3.1 is
intended to comply with the minimum gain chargeback
requirement in such sections of the Regulations and shall be
interpreted consistently therewith.
4.3.2 Partner Minimum Gain Chargeback: Except as otherwise
provided in Section 1.704- 2(i)(4) of the Regulations,
notwithstanding any other provision of this Article 4, if
there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt for any Fiscal Year, each
Partner who has a share of the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulation Section 1.704- 2(i)(5), shall be
specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount
equal to the such Partner's share of the net decrease in
Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulation
Section 1.704-2(i)(4). Allocations pursuant to the previous
sentence shall be made in proportion to the respective
amounts required to allocated to each Partner pursuant
thereto. The items to be so allocated shall be determined in
accordance with Regulation Section 1.704-2(i)(4) and
1.704-2(j)(2). This Section 4.3.2 is intended to comply with
the partner minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted
consistently therewith.
4.3.3 Qualified Income Offset: In the event any Limited Partner
unexpectedly receives any adjustments, allocations or
distributions described in Regulation Sections 1.704-
1(b)(2)(ii)(d)(4), (5) or (6) that cause or increase an
Adjusted Capital Account Deficit of such Partner, items of
income and gain shall be specially allocated to such Partner
in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, the Adjusted Capital
Account Deficit of such Partner as quickly as possible. This
Section 4.3.3 is intended to constitute a "Qualified Income
Offset" within the meaning of Regulation Section
1.704-1(b)(2)(ii) and shall be interpreted consistently
therewith.
4.3.4 No Excess Deficit: To the extent that any Partner has or
would have, as a result of any allocation of Partnership
loss (or item thereof), an Adjusted Capital Account Deficit,
such amount of Partnership loss (or item thereof) shall be
allocated to the other Partners in accordance with Section
4.2, but in a manner which will not produce an Adjusted
Capital Account Deficit at to such Partners.
4.3.5 Gross Income Allocation: In the event any Partner has a
deficit Capital Account balance at the end of any Fiscal
Year or other period that is in excess of the Adjusted
Capital Account Deficit for such Partner, then 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 4.3.5
shall be made only if and to the extent that such Partner
would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Agreement have been
tentatively made as if this Section 4.3.5 were not in this
Agreement.
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4.3.6 Nonrecourse Deductions: Nonrecourse Deductions for any
Fiscal Year shall be allocated to the Partners in accordance
with their Percentage Interest.
4.3.7 Partner Nonrecourse Deductions: Partner Nonrecourse
Deductions for any Fiscal Year shall be allocated to the
Partner who bears the economic risk of loss with respect to
the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with
Regulation Section 1.704-2(i)(1).
4.4 Tax and Code Section 704(c) Allocations: For U.S. Federal income tax
purposes only, each item of income, gain, loss and deduction of the
Partnership shall be allocated among the Partners in the same manner as
the corresponding items of Net Profits and Net Losses and specially
allocated items are allocated for Capital Account purposes; provided
that with respect to any Property of the Partnership that has been
reflected in the Partners' Capital Accounts at a value that differs
from the adjusted basis for U.S. Federal income tax purposes of the
Property, items of depreciation, amortization, and gain or loss, as
computed for federal income tax purposes, shall be allocated between
the Partners so as to take account of the variation between the
adjusted basis, for U.S. Federal income tax purposes, of such Property
and the value at which such Property is reflected in the Partners'
Capital Accounts, in accordance with Code Section 704(c) and Regulation
Sections 1.704-1(b)(2)(iv)(g) and 1.704-1(b)(4)(i).
4.5 Reversal of Allocations: Any special allocations of items of income,
gains, losses or deductions pursuant to Section 4.3 shall, to the
extent possible, be reversed in computing subsequent allocations of Net
Profits and Net Loss pursuant to this Article 4, so that the net amount
of any item so allocated and the Net Profits and Net Loss and all other
items allocated to each Partner pursuant to this Article 4 shall, to
the extent possible, equal the net amount that would have been
allocated to each such Partner pursuant to the provisions of this
Article 4 had such special allocations pursuant to Section 4.3 not been
made.
4.6 Revaluation Adjustments: The General Partner, upon advice of the
Partnership's tax counsel that the Partnership is authorized pursuant
to the provisions of Regulation Section 1.704-1(b)(2)(iv)(f), and that
it is in the Partners' interest to do so, shall cause an increase or
decrease in the Partners' Capital Accounts to reflect a revaluation of
Partnership Property (including intangible assets such as goodwill) on
the Partnership books. Any such revaluation shall be made strictly in
compliance with the provisions of Regulation Section
1.704-1(b)(2)(iv)(f).
4.7 Required General Partner Allocation: Notwithstanding anything to the
contrary contained herein, unless otherwise required by Code Section
734(b) or 704(c) or the Regulations applicable thereto, the interest of
the General Partner in each material item of Partnership income, gain,
loss, deduction or credit shall be equal to at least one percent (1%)
at all times during the existence of the Partnership.
ARTICLE 5
---------
DISTRIBUTIONS
-------------
11
5.1 Distributions: Subject to Section 8.3, the amount and timing of
distributions by the Partnership shall be determined in the discretion
of the General Partner. Subject to Section 8.3, all distributions to
the Partners shall be in proportion to their Partnership Units. For
purposes of this Section 5.1 the Partnership Units of the Partners
shall be determined as of the date of any such distribution.
5.2 Nature of Distributions: Distributions may be made in cash or other
Property, or both, in the discretion of the General Partner.
ARTICLE 6
---------
POWERS AND OBLIGATIONS OF THE PARTNERS
--------------------------------------
6.1 General Partner to Manage Business: The General Partner shall be
responsible for managing the affairs of the Partnership. The General
Partner shall have complete and exclusive discretion in the management
and control of the affairs and business of the Partnership and shall
possess all powers necessary, convenient or appropriate to carrying out
the purposes and business of the Partnership; provided however, that
the day to day activities of the Partnership shall be managed by the
Partnership's officers, chosen by and subject to the supervision of the
General Partner. The General Partner shall make all Partnership
decisions, and shall specifically have the authority to hire attorneys,
accountants, and any other consultants or employees. The Limited
Partners hereby consent to the exercise by the General Partner of the
powers conferred on it under this Agreement.
6.2 Powers of General Partner: The General Partner shall possess and enjoy,
without the need to obtain the consent of the Limited Partners, all the
rights and powers necessary or desirable to carry out the purposes and
business of the Partnership, and all of the power and authority as may
be specifically stated in this Agreement or as may be otherwise
provided by law, including, but not limited to, the power to:
6.2.1 make all decisions concerning the operational aspects of the
Partnership;
6.2.2 pay from Partnership assets all expenses of organizing and
conducting the business of the Partnership;
6.2.3 make and enter into such contracts and incur expenses on
behalf of the Partnership as the General Partner deems
necessary or appropriate for the efficient conduct and
operation of the Partnership's business;
6.2.4 open bank accounts, savings accounts and other accounts and
designate authorized signatories for such accounts;
6.2.5 compromise, submit to arbitration, xxx on or defend all
claims in favor of or against the Partnership; commence or
defend litigation that pertains to the Partnership or any
Partnership Property, and arrange for the settlement of any
pending or threatened litigation, by or against the
Partnership, through compromise, arbitration or otherwise;
12
6.2.6 do all acts the General Partner deems necessary or
appropriate for the protection and preservation of the
Partnership's Property;
6.2.7 make distributions and allocations to the Partners in
accordance with Article 5 hereof;
6.2.8 designate officers of the Partnership as authorized
signatories with the authority to execute on behalf of the
Partnership any documents or instruments of any kind that
the General Partner may deem appropriate or advisable to
carry out the purposes of the Partnership;
6.2.9 arrange for the preparation, execution and filing of
federal, state and local income tax returns and pay any
taxes on behalf of the Partnership, and contest any
determination by the Internal Revenue Service that the
General Partner deems to be adverse to the best interest of
the Partnership;
6.2.10 make all payments required of the Partnership under the
terms of this Agreement, including such payments, fees and
reimbursements as the General Partner, or any of its
Affiliates, may be entitled to receive under the terms of
this Agreement;
6.2.11 invest Partnership funds on a temporary basis pending
distribution, in such investments as the General Partner
determines appropriate;
6.2.12 employ Persons (including any Affiliate of a General
Partner) for the operation and management of the Partnership
and engage such other experts and advisers as the General
Partner may deem necessary or advisable, in each case, on
such terms and for such compensation (including bonuses and
benefits) as the General Partner may determine;
6.2.13 sell, license or otherwise dispose of any or all of the
Property of the Partnership;
6.2.14 enter into business asset or equity acquisitions, joint
ventures and other strategic alliances, including mergers
and consolidations;
6.2.15 enter into financing arrangements or borrow money on behalf
of the Partnership, and secure any such financings or
borrowings by granting security interests and other liens on
the Partnership's Property;
6.2.16 approve the annual business plan for the Partnership,
including the capital and operating budgets for the
Partnership;
6.2.17 take any action for the (A) commencement of a voluntary case
under applicable bankruptcy, insolvency or similar law now
or hereinafter in effect, (B) consent to the entry of any
order for relief in an involuntary case under any such law
to the extent that the giving or withholding of such consent
is within the Partnership's discretion, (C) consent to the
appointment or taking possession of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar
official) of the Partnership or of any substantial part of
the Partnership's Property or (D) making by the Partnership
of a general assignment for the benefit of creditors;
13
6.2.18 enter into any transaction with an Affiliate of a General
Partner, provided that such transaction is on arms' length
terms and conditions; and
6.2.19 call a meeting of Partners from time to time as the General
Partner deems necessary or advisable.
6.3 Other Interests of Partners: The General Partner shall conduct all of
its business through the Partnership. The Limited Partners and their
Affiliates shall be prohibited from competing with the Partnership to
the extent set forth in the Gemini Non-Competition Agreement.
6.4 Limited Authority of Limited Partners: The Limited Partners shall not:
6.4.1 take part in the control of the business of the Partnership;
6.4.2 execute any document that binds or purports to bind the
Partnership;
6.4.3 hold itself out as having the power or authority to bind the
Partnership;
6.4.4 undertake any obligation or responsibility on behalf of the
Partnership;
6.4.5 bring any action for partition or sale in connection with
any Property of the Partnership, whether real or personal,
or register or permit any lien or charge in respect of such
Property; or
6.4.6 take any action that may jeopardize the status of the
Partnership as a limited partnership for U.S. Federal income
tax purposes.
6.5 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 Property 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 arrangements and
shall be entitled to deal with the General Partner as if it was the
sole party in interest therein, both legally and beneficially. In no
event shall any Person dealing with the General Partner or the General
Partner's representatives 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 enquire into the
necessity or expedience of any act or action of the General Partner or
the General Partner's representative; and every contract, agreement,
deed, mortgage, security agreement, promissory note or other instrument
or document executed by the General Partner or the General Partner's
representatives with respect to any 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 representatives were duly
14
authorized and empowered to execute and deliver any and every such
instrument or document for and on behalf of the Partnership.
6.6 Compensation, Expenses and Reimbursement of the General Partner: All
expenses incurred in connection with the organization of the
Partnership shall be borne by the Partnership. The General Partner
shall be reimbursed on a monthly basis for all fair and reasonable
expenses it incurs or makes on behalf of the Partnership (including
amounts paid to any Person to perform services for the Partnership or
the General Partner or who is an employee of the Partnership or the
General Partner). Such reimbursement shall be in addition to any
reimbursement to a General Partner as a result of indemnification
pursuant to Section 6.7 hereof.
6.7 Indemnification of Partners:
6.7.1 The Partnership shall indemnify and hold harmless the
Partners, their respective Affiliates, all of their
respective officers, directors, partners, stockholders,
employees, and agents and all of the officers, employees and
agents of the Partnership (individually, an "Indemnitee"),
from and against any and all losses, claims, demands, costs,
damages, liabilities, and expenses of any nature (including
attorneys' fees and disbursements), judgments, fines,
settlements, and other amounts arising from any and all
claims, demands, actions, suits, or proceedings, civil,
criminal, administrative or investigative, in which an
Indemnitee may be involved, or threatened to be involved, as
a party or otherwise ("Losses"), arising out of or
incidental to the business of the Partnership, regardless of
whether an Indemnitee continues to be a Partner, an
Affiliate, or an officer, director, partner, stockholder,
employee, or agent of a Partner or of an Affiliate at the
time any such Loss is paid or incurred, if the Indemnitee's
conduct did not constitute willful misconduct. The
termination of any action, suit, or proceeding by settlement
or upon a plea of nolo contendere, or its equivalent, shall
not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee's actions
constituted willful misconduct.
6.7.2 Expenses (including legal fees and expenses) incurred in
defending any proceeding subject to subsection (a) of this
Section 6.7 shall be paid by the Partnership in advance of
the final disposition of such proceeding upon receipt of an
undertaking (which need not be secured) by or on behalf of
the Indemnitee to repay such amount if it shall ultimately
be determined, by a court of competent jurisdiction or
otherwise, that the Indemnitee is not entitled to be
indemnified by the Partnership as authorized hereunder.
6.7.3 The indemnification provided by this Section 6.7 shall be in
addition to any other rights to which each Indemnitee may be
entitled under any agreement, as a matter of law or
otherwise, both as to action in the Indemnitee's capacity as
General Partner or as a partner, stockholder, officer,
director, employee or agent of a Partner, or as to action in
the Indemnitee's capacity as a Person serving at the request
of the Partnership as set forth above, and shall continue as
to an Indemnitee who has ceased to serve in such capacity
and shall inure to the benefit of the heirs, successors,
assigns, administrators and personal representatives of the
Indemnitee. Such indemnification, however, shall only apply
to Losses incurred by virtue of the Indemnitee's status as
General Partner, Affiliate or officer, director, partner,
stockholder, employee or agent thereof, and not as to Losses
15
incurred in other capacities (for example, by virtue of
otherwise contracting with the Partnership).
6.7.4 The Partnership may purchase and maintain insurance on
behalf of any one or more Indemnitees and other such Persons
as the Partnership shall determine against any liability
that may be asserted against or expense that may be incurred
by such Person in connection with the Partnership's
activities, whether or not the Partnership would have the
power to indemnify such Person against such liability under
the provisions of this Agreement.
6.7.5 Any indemnification hereunder shall be satisfied only out of
the assets of the Partnership and no Partner shall be
subject to personal liability by reason of these
indemnification provisions.
6.7.6 An Indemnitee shall not be denied indemnification in whole
or in part under this Section 6.7 because the Indemnitee had
an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
6.7.7 The provisions of this Section 6.7 are for the benefit of
the Indemnitees and the heirs, successors, assigns,
administrators and personal representatives of the
Indemnitees and shall not be deemed to create any rights for
the benefit of any other Persons.
6.7.8 Any Person that proposes to assert the right to be
indemnified under this Section 6.7 shall, promptly after
receipt of notice of any action that is subject to
indemnification hereunder, notify the Partnership of the
commencement of such action, enclosing a copy of all papers
served. The failure so to notify the Partnership of any such
action shall not relieve it from any liability that it may
have to any Indemnitees hereunder, unless the Partnership is
prejudiced thereby. In case any such action shall be brought
and notice given to the Partnership of the commencement
thereof, the Partnership shall be entitled to participate
in, and to assume the defense thereof, with counsel
reasonably satisfactory to the Indemnitee, and after notice
from the Partnership to such Indemnitee of its election so
to assume the defense thereof, the Partnership shall not be
liable to such Indemnitee for any legal or other expenses,
except as provided below and except for the reasonable costs
of investigation subsequently incurred by such Indemnitee at
the request of the Partnership in connection with the
defense thereof. The Indemnitee shall have the right to
employ separate counsel and to participate in (but not
control) any such action,but the fees and expenses of such
counsel shall be the expense of such Indemnitee unless (i)
the employment of counsel by such Indemnitee has been
authorized by the Partnership, (ii) the employment of
separate counsel is necessitated by a conflicting interest
among the Indemnitees or (iii) the Partnership shall not in
fact have employed counsel to assume the defense of such
action. In each such case, the fees and expenses of counsel
shall be at the expense of the Partnership. The Partnership
shall not be liable for any settlement of any action or
claims affected without its written consent unless the
Partnership has failed to assume the defense of any such
action or claims.
6.8 Liability of the General Partner: The General Partner and its
Affiliates and all officers, directors, partners, stockholders,
employees and agents of the General Partner and its Affiliates shall
not be
16
liable to the Partnership or to the Limited Partners for any losses
sustained or liabilities incurred as a result of any act or omission of
the General Partner, its Affiliates or any such officers, directors,
partners, stockholders, employees or agents if (i) the General Partner,
such Affiliate, or such officer, director, partner, stockholder,
employee or agent acted in good faith and in a manner it, he or she
reasonable believed to be in, or not opposed to, the best interests of
the Partnership, and (ii) the conduct of the General Partner, such
Affiliate or such officer, director, partner, stockholder, employee or
agent did not constitute willful misconduct. For purposes of this
Agreement, any act or omission, if done or omitted to be done in
reliance upon the advice of legal counsel or accountants selected with
reasonable care, shall be conclusively presumed to have been done or
omitted to be done in good faith and not to constitute willful
misconduct.
6.9 Reliance by General Partner: The General Partner may rely and shall be
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties. The General Partner may consult with legal counsel,
and other consultants and advisers selected by it, and any advice of
such Person as to matters which the General Partner believes to be
within such Person's professional experience shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by the General Partner hereunder in good faith and in
accordance with such advice.
6.10 Conversion to Corporate Form: If the General Partner shall determine
that it is desirable or helpful for the business of the Partnership to
be conducted in a corporate rather than in a partnership form, the
General Partner may incorporate the Partnership or take such other
action as it may deem advisable in light of such changed conditions,
including, without limitation, dissolving the Partnership, provided
that, the General Partner may not incorporate the Partnership within
two (2) years from the Effective Date without the consent of the
Limited Partners if to do so would have material adverse tax
consequences to the Limited Partners. In connection with any such
incorporation of the Partnership, the Partners shall receive, in
exchange for their Partnership Units, shares of capital stock of such
corporation having the same relative rights and preferences as to
dividends and distributions and the same voting and transfer rights,
subject in each case to any modifications required solely as a result
of the conversion to corporate form (all such rights and preferences
being referred to, collectively, as "Equity Rights"), as are set forth
in this Agreement as among the holders of interests in the Partnership.
17
ARTICLE 7
---------
TRANSFERS OF PARTNERSHIP UNITS AND WITHDRAWALS OF PARTNERS
----------------------------------------------------------
7.1 General Restriction on Transfer of Partnership Units: Except as
specifically set forth in this Article 7, neither the General Partner
nor the Limited Partners may Transfer any Partnership Units.
7.2 Transfers Pursuant to Exchange Agreement: Subject to Section 7.4, the
Limited Partners shall be permitted to exchange Partnership Units for
shares of Common Stock pursuant to the terms and conditions set forth
in the Exchange Agreement.
7.3 Assignments to Permitted Transferee: Subject to Section 7.4, the
General Partner may at any time assign its Partnership Units to a
Permitted Transferee and the Limited Partners, with the consent of the
General Partner (such consent not to be unreasonably withheld) may
assign its Partnership Units to a Permitted Transferee; provided that
in all such cases such Partner and its Permitted Transferee complies
with Section 7.5.
7.4 Specific Restrictions on Transfer of Partnership Units:
7.4.1 No exchange or assignment of a Partnership Unit may be made
if such exchange or assignment (i) would violate the then
applicable federal or state securities laws or rules and
regulations of the Commission, state securities commission,
or rules and regulations of any other government agencies
with jurisdiction over such exchange or assignment or (ii)
would affect the Partnership's existence or qualification
under the Act. If an exchange or assignment of a Partnership
Unit is otherwise permitted hereunder, notwithstanding any
provision hereof, no Partner shall exchange or assign all or
any portion of such Partner's Partnership Units unless and
until such Partner, upon the request of the Partnership,
delivers to the Partnership an opinion of counsel, addressed
to the Partnership, reasonably satisfactory to the
Partnership, to the effect that (A) such Partnership Unit
has been registered under the Securities Act and any
applicable state securities laws, or that the proposed
transfer of such Partnership Unit is exempt from any
registration requirements imposed by such laws and that the
proposed exchange or assignment does not violate any other
applicable requirements of federal or state securities laws
and (B) that such exchange or assignment shall not adversely
affect the tax status of the Partnership. Such opinion shall
not be deemed delivered until the Partnership confirms to
such Partner that such opinion is acceptable.
7.4.2 Notwithstanding the other provisions of this Agreement, the
General Partner shall monitor the exchange or assignment of
Partnership Units to determine (i) if such Partnership Units
are being traded on an "established securities market" or a
"secondary market (or the substantial equivalent thereof)"
within the meaning of Section 7704 of the Code, and (ii)
whether additional exchanges or assignments of Partnership
Units would result in the Partnership being unable to
qualify for at least one of the "safe harbors" set forth in
Regulations Section 1.7704-1 (or such other
18
guidance subsequently published by the Internal Revenue
Service setting forth safe harbors under which Partnership
Units shall not be treated as "readily tradable on a
secondary market (or the substantial equivalent thereof)"
within the meaning of section 7704 of the Code) (the "Safe
Harbors"). The General Partner shall take (and cause its
Affiliates to take) all steps reasonably necessary or
appropriate to prevent any trading of Partnership Units or
any recognition by the Partnership of exchanges or
assignments made on such markets and, except as otherwise
provided herein, to ensure that at least one of the Safe
Harbors is met.
7.5 Requirements for Transfers: Notwithstanding anything to the contrary
contained herein, in order for an assignment to take place pursuant to
Section 7.3:
7.5.1 the assignee must execute a counterpart of this Agreement or
otherwise agree in writing to be bound by its terms;
7.5.2 there shall have been compliance with relevant requirements
of the Act and all other applicable legislation, including
securities legislation;
7.5.3 in the case of an assignment to a Permitted Transferee,
evidence reasonably satisfactory to the General Partner must
have been produced to the effect that the assignor is a
Permitted Transferee and that such assignment will not
result in a lien or charge upon or against Partnership
assets; and
7.6 the General Partner, acting reasonably, must be satisfied
that (i) the assignment or the assignee will not impair the
ability of the Partnership to be taxed as a partnership for
federal income tax purposes and (ii) the assignment will not
cause the Partnership's tax year to close or the Partnership
to terminate for federal income tax purposes under Section
708 of the Code.
7.7 Documentation and Costs: Any assignee shall execute any and all
documents reasonably requested by the General Partner and shall pay all
reasonable expenses incurred by the Partnership in connection with the
assignment of Partnership Units, including the cost of the preparation,
filing and publishing of any amendment to this Agreement.
7.8 Withdrawal: No Partner may withdraw from the Partnership without the
prior written consent of the General Partner, which consent shall be
within the absolute discretion of the General Partner.
7.9 Invalid Transfer: Any Transfer of a partnership interest that does not
comply with the provisions of this Agreement shall be invalid and shall
not vest any interest in the assignee.
ARTICLE 8
---------
DISSOLUTION AND LIQUIDATION
---------------------------
8.1 Dissolution: The Partnership shall dissolve on the first to occur of the
following:
19
8.1.1 The expiration of the term of the Partnership as provided in
Section 2.5;
8.1.2 The sale of all of the assets of the Partnership and the
collection and distribution of all proceeds (including
interest on deferred payments) from such sale;
8.1.3 The exchange pursuant to the Exchange Agreement of all of
the Partnership Units held by the Limited Partners;
8.1.4 At such time as required by the Act; or
8.1.5 The determination of the Partners to dissolve the
Partnership.
8.2 Continuation of Partnership: To the extent permitted by the Act, upon
dissolution of the Partnership in accordance with Section 8.1.4 the
remaining Partners may elect to reconstitute the Partnership and
continue its business on the same terms and conditions set forth in
this Agreement if on the affirmative vote of the holders of a majority
of Partnership Units. the Partners agree in writing (a) to continue the
business of the Partnership and (b) to the appointment, if necessary,
of a successor General Partner. Unless such an election is made within
90 days after dissolution, the Partnership shall conduct only
activities necessary to wind up its affairs. If such an election is
made within 90 days after dissolution, then (i) the reconstituted
Partnership shall continue until dissolved in accordance with this
Article 8 and (ii) all necessary steps shall be taken to cancel this
Agreement and the Certificate of Limited Partnership and to enter into
a new partnership agreement and certificate of limited partnership.
8.3 Winding Up Affairs and Liquidation: Upon the dissolution of the
Partnership, the General Partner or the Persons required or permitted
by law to carry out the winding up of the affairs of the Partnership
(the "Liquidator") shall promptly notify all Partners of such
dissolution, shall proceed to the liquidation of the assets of the
Partnership by converting such assets to cash insofar as deemed
practicable by the General Partner or the Liquidator, shall wind up the
affairs of the Partnership, and, after paying or providing for the
payment of all liabilities and obligations of the Partnership, shall
distribute the proceeds of liquidation and other assets of the
Partnership as provided by law and the terms of this Agreement.
8.4 Distribution on Dissolution: The proceeds of liquidation and other
assets of the Partnership shall be applied and distributed in the
following order of priority:
8.4.1 To the payment of debts and liabilities of the Partnership
(including any loans and advances that may have been made by
any of the Partners, or amounts owing to any of the
Partners) and the expenses of liquidation;
8.4.2 To the setting up of any reserves that the General Partner
or the Liquidator may deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the
Partnership, which reserves shall be paid over to an escrow
holder approved by the General Partner or the Liquidator to
be held for the purpose of disbursing such reserves in
payment of any of the aforementioned contingencies, and, at
the expiration of such period, as the General Partner or the
Liquidator shall deem advisable, to distribute the balance
thereafter remaining in the manner hereinafter provided; and
20
8.4.3 Any balance then remaining shall be distributed to the
Partners in accordance with their Capital Accounts. Each
Partner shall look solely to the assets of the Partnership
for the return of its Capital Contribution and shall have no
right or power to demand or receive any specific Property
other than cash from the Partnership. No Partner shall have
priority over any other Partner as to the return of its
Capital Contributions, distributions or allocations.
8.5 Assets Other Than Cash: Assets of the Partnership, with the approval of
the General Partner, may be distributed in kind on the basis of their
then appraised value. For purposes of making such distribution only,
the unrealized profit or loss on any such asset (based on its fair
market value) shall be first allocated among the Partners and the
distribution of the asset shall be treated as a distribution of cash
equal to the fair market value of such asset.
ARTICLE 9
---------
FISCAL MATTERS
--------------
9.1 Books and Records: The Partnership shall keep complete and up to date
books and records at its office setting forth a true and accurate
account of all business transactions arising out of and in connection
with the conduct of the Partnership's business. The Partnership shall
also maintain at its office the following:
9.1.1 A current list of each Partner set forth in alphabetical
order, together with each Partner's Capital Contributions
and Partnership Units;
9.1.2 A copy of the certificate of limited partnership of the
Partnership and all certificates of amendment thereto,
together with executed copies of any powers of attorney
pursuant to which any certificate has been executed;
9.1.3 Copies of the Partnership's federal, state and local income
tax or information returns and reports, if any, for the six
(6) most recent Fiscal Years;
9.1.4 Copies of the original of this Agreement and all amendments
thereto;
9.1.5 Financial statements of the Partnership for the six (6) most
recent Fiscal Years; and
9.1.6 The Partnership's books and records for the then current
year and the past three (3) Fiscal Years.
The General Partner shall make available to the Partnership's auditors
or accountants or other duly authorized representatives of the
Partnership such information and material as may be required by such
auditors, accountants or authorized representatives and shall otherwise
give such cooperation as may be reasonably necessary for the auditors,
accountants or authorized representatives to carry out their duties to
the Partnership in accordance with the provisions hereof.
21
9.2 Access to Books and Records: Upon the reasonable request of the Limited
Partners, the General Partner shall promptly deliver to the Limited
Partners, at the Limited Partners' expense, the current list of
Partners, a copy of the certificate of limited partnership of the
Partnership and all amendments thereto, copies of this Agreement and
all amendments thereto and a copy of any state filings by the
Partnership. A Limited Partner shall have the right on reasonable
request to inspect and copy during normal business hours any of the
Partnership's records required to be maintained pursuant to Section 9.1
(other than those deemed by the General Partner to be confidential) and
to obtain from the General Partner promptly after becoming available, a
copy of the Partnership's federal, state and local income tax or
information returns and reports for each Fiscal Year. The General
Partner shall promptly furnish to a Limited Partner a copy of any
amendment to this Agreement executed by the General Partner pursuant to
a power of attorney from a Limited Partner.
9.3 Tax Returns: The General Partner shall cause the Partnership to file
when due all federal, state and local income tax or information returns
due under laws in force in the United States and to withhold and remit
to the appropriate governmental agencies any amounts required to be
paid under applicable laws.
9.4 Fiscal Year: The "Fiscal Year" of the Partnership shall mean the year
as determined under Code Section 706(b).
9.5 Accounting and Tax Elections: All decisions as to accounting matters
and all elections required or permitted to be made by the Partnership
under the Code, including elections pursuant to Code Sections 732(d)
and 754 (or corresponding provisions of succeeding law or state law)
shall be made by the General Partner.
9.6 Information for the General Partner: The Partnership shall prepare all
such records and information as may be necessary for the General
Partner to use for the proper filing of all documents required to be
filed by the General Partner with the Commission.
ARTICLE 10
----------
MISCELLANEOUS PROVISIONS
------------------------
10.1 Notices: Except as otherwise provided herein, any notice, consent,
waiver, offer, request, or vote, required hereunder shall be in
writing, and shall be deemed to have been validly served, given or
delivered (i) upon delivery thereof if delivered by messenger or
courier service to the Partner to be notified, or (ii) upon
acknowledgment of receipt thereof if transmitted to a valid telecopier
number for the Partner to be notified; in each case the Partner is to
be notified at the address and telecopier numbers on Exhibit E.
10.2 Limited Power of Attorney: The Limited Partners, by the Limited
Partners' execution of this Agreement, irrevocably constitute and
appoint the General Partner as the Limited Partners' true and lawful
attorney and agent, with full power and authority in the Limited
Partners' name, place
22
and stead to execute, acknowledge and deliver and to file or record in
any appropriate public office:
10.2.1 this Agreement and counterparts thereof;
10.2.2 all instruments that the General Partner deems appropriate
to reflect any amendment, change or modification to the
Partnership or to this Agreement in accordance with the
terms hereof; including, without limitation, any amendment
to this Agreement and/or to any certificate or other
instrument that may be necessary, desirable or appropriate
to reflect or comply with the provisions of Sections 2.1 and
2.8;
10.2.3 all certificates and instruments and amendments thereto that
the General Partner deems necessary or appropriate to form,
qualify or continue the qualification of the Partnership in
or otherwise comply with the laws of any jurisdiction where
the Partnership may do business or own or lease Property in
order to maintain the limited liability of the Limited
Partners and to comply with all applicable laws of such
jurisdiction;
10.2.4 all conveyances and instruments that the General Partner
deems appropriate or necessary to reflect the dissolution
and termination of the Partnership pursuant to the terms of
this Agreement;
10.2.5 any and all other certificates and instruments that may be
required to be filed by the Partnership under the laws of
the United States or in any jurisdiction therein; and
10.2.6 all transfers, certificates and other documents and to make
all such statements as may, in the opinion of the General
Partner, be necessary or desirable in order to carry through
to completion any exchange or assignment of a Partnership
Unit pursuant to the terms of this Agreement.
This power of attorney shall be deemed to be coupled with an interest
and shall survive the exchange or assignment by the Limited Partners of
their Partnership Units. Notwithstanding the existence of this power of
attorney, each Limited Partner agrees to join in the execution,
acknowledgement and delivery of the instruments referred to above if
requested to do so by the General Partner. The power of attorney
granted to the General Partner is a limited power of attorney that does
not authorize the General Partner to act on behalf of the Limited
Partners except to execute the documents described in this Section
10.2.
10.3 Integration: This Agreement, the agreements referred to herein and the
agreements referred to therein set forth the entire agreement between
the parties with regard to the subject matter hereof. No other
agreements, covenants, representations or warranties, express or
implied, oral or written, have been made by any party to the other with
respect to the subject matter of this Agreement. All prior and
contemporaneous conversations, negotiations, possible and alleged
agreements and representations, covenants, and warranties with respect
to the subject matter hereof are waived, merged herein and therein and
superseded hereby and thereby.
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10.4 Applicable Law: This Agreement shall be governed by, construed and
enforced in accordance with the internal laws of the State of Delaware.
10.5 Counterparts: This Agreement may be executed in counterparts and all
counterparts so executed shall constitute one Agreement binding on all
the parties. It shall not be necessary for each party to execute the
same counterparts.
10.6 Severability: In case any one or more of the provisions contained in
this Agreement or any application of the provisions shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions or the remaining
applications shall not in any way be affected or impaired.
10.7 Captions: The captions and headings in this Agreement are for
convenience only and shall not be considered in interpreting any
provision of this Agreement.
10.8 Binding Effect: Except as otherwise provided to the contrary, this
Agreement shall be binding upon, and inure to the benefit of, the
Partners and their respective heirs, executors, administrators,
successors and assigns.
10.9 Gender and Number: Whenever required by the context, the singular shall
be deemed to include the plural, and the plural shall be deemed to
include the singular, and the masculine, feminine and neuter genders
shall each be deemed to include the other.
10.10 Amendment: Except as otherwise provided, this Agreement may be amended
in whole or in part only by an agreement in writing signed by the
General Partner and all the Limited Partners.
10.11 Exhibits: Exhibits referred to in this Agreement are incorporated by
reference into this Agreement.
10.12 Partnership Tax Audits: The General Partner is designated as the
Partnership's "Tax Matters Partner" (the "TMP") in accordance with the
provisions of Code Section 6231(a)(7). The TMP shall receive no
compensation for its services as the TMP.
10.13 Arbitration: Any controversy or claim arising out of or relating to any
interpretation, breach or dispute concerning any of the terms or
provisions of this Agreement, which is settled in writing within thirty
(30) days after it arises, shall be settled by arbitration in Delaware
or such other jurisdiction as the parties may agree upon, in accordance
with the laws of the State of Delaware and under the rules then
obtaining of the American Arbitration Association (or any successor
thereto), and judgment upon the award rendered in said arbitration
shall be final and may be entered in any court in the State of Texas or
Florida or elsewhere having jurisdiction thereof. Any party hereto may
apply for such arbitration.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EPi HealthTech Inc.
By: s/ Xxxx Xxx
-------------------------------------
Xxxx Xxx, President
s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxxx
s/ Xxxxxxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxxxxxx Xxxxxxxxx
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