EXHIBIT 2
LIMITED PARTNERSHIP AGREEMENT OF
JMS GROUP LIMITED PARTNERSHIP
THE LIMITED PARTNERSHIP INTERESTS IN JMS GROUP LIMITED PARTNERSHIP (THE
"INTERESTS") ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 5
OF THIS AGREEMENT. THE INTERESTS HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER (i) CHAPTER 90 OF THE NEVADA REVISED STATUTES (THE
"NEVADA ACT"), (ii) UNDER ANY OTHER STATE SECURITIES LAWS, OR (iii) UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "FEDERAL ACT"). NEITHER
THE INTERESTS NOR ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE
WITH THE TERMS AND CONDITIONS OF SECTION 5 OF THIS AGREEMENT AND (i) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE NEVADA ACT OR IN A TRANSACTION
THAT IS EXEMPT FROM REGISTRATION UNDER THE NEVADA ACT OR THAT IS OTHERWISE IN
COMPLIANCE WITH THE NEVADA ACT, (ii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER ANY OTHER APPLICABLE STATE SECURITIES LAWS OR IN A TRANSACTION
THAT IS EXEMPT FROM REGISTRATION UNDER SUCH SECURITIES LAWS OR THAT IS
OTHERWISE IN COMPLIANCE WITH SUCH SECURITIES LAWS, AND (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE FEDERAL ACT OR IN A TRANSACTION THAT
IS EXEMPT FROM REGISTRATION UNDER THE FEDERAL ACT OR THAT IS OTHERWISE IN
COMPLIANCE WITH THE FEDERAL ACT.
This LIMITED PARTNERSHIP AGREEMENT OF JMS GROUP LIMITED PARTNERSHIP is
entered into and shall be effective, as of the Effective Date, among the
Persons whose signatures appear below, and such additional Persons as are
hereafter admitted as Partners of the Partnership.
SECTION 1
DEFINITIONS
1.1 Definitions. The following capitalized words and phrases have
the indicated meanings in this Agreement:
"Act" means Chapter 88 of the Nevada Revised Statutes, known
as the Uniform Limited Partnership Act, as amended from time to time (and any
corresponding provisions of succeeding law).
"Agreement" means this Limited Partnership Agreement, as
amended from time to time. Words such as "herein," "hereinafter," "hereof,"
"hereto," and "hereunder," refer to this Limited Partnership Agreement as a
whole, unless the context otherwise requires.
"Book Depreciation" for each Fiscal Period means an amount
computed for such period with respect to the depreciable assets of the
Partnership in the manner provided in Regulations Section
1.704-1(b)(2)(iv)(g)(3).
"Capital Account" means, with respect to any Partner, the
capital account maintained for such Partner, and such capital account, as of
any particular date, shall be:
(i) The amount of cash plus the agreed upon net
fair market value (as of the date of contribution) of any
other property that has been contributed by such Partner to
the Partnership as of such date; plus
(ii) The aggregate amount of the Partnership's
Net Profit that has been allocated to such Partner as of such
date pursuant to Section 4.2 hereof and the last paragraph of
this definition of "Capital Account"; minus
(iii) The aggregate amount of the Partnership's
Net Loss that has been allocated to such Partner as of such
date pursuant to Section 4.2 hereof and the last paragraph of
this definition of "Capital Account"; minus
(iv) The sum of all distributions of cash and
the agreed upon net fair market value (as of the date of
distribution) of any other property that has been distributed
to such Partner by the Partnership as of such date.
The provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Regulations Section 1.704-1(b) and shall
be interpreted and applied in a manner consistent with such Regulation. In the
event that any Interest is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred Interest.
The General Partner shall determine the gross fair market value, as of each
Valuation Date, of each asset owned by the Partnership at the opening of
business on such Valuation Date, and shall adjust the book value of each such
asset to equal such gross fair market value. The Partnership shall be deemed to
have sold all of its assets for such values as of such Valuation Date. Any gain
or loss deemed to have been realized by the Partnership as a result of such
deemed sale of its assets shall be treated as an additional item of Net Profit
or Net Loss, as the case may be, and shall be allocated to the Partners as
provided in Section 4.2 hereof.
"Certificate" means the Certificate of Limited Partnership of
the Partnership.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time (or any corresponding provisions of succeeding law).
"Disabled General Partner" means a General Partner who
suffers or sustains a Disabling Event.
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"Disabling Event" means: (i) the death or dissolution and
liquidation of a General Partner; or (ii) a determination by a court of
competent jurisdiction that a General Partner is legally incompetent.
"Effective Date" means the date on which the Certificate was
filed with the Nevada Secretary of State.
"Family Members" means
(i) Xxxx X. Xxxxxxxxxx, his descendants and any
trust created and existing for the primary benefit of any one
or more of any such Persons; and
(ii) a trust established for the primary benefit
of a spouse of a descendant of Xxxx X. Xxxxxxxxxx, where such
spouse does not possess a power of appointment or other power
of disposition over the property in such trust, other than a
power exercisable only in favor of descendants of Xxxx X.
Xxxxxxxxxx, and where the remainder interest in such trust
shall in all events be distributed to Persons described in
the immediately preceding clause (i) or in this clause (ii).
For the purpose of this definition, references to descendants
shall be deemed to include at any given time only persons who prior to that
time were (i) born in wedlock, (ii) born out of wedlock to natural parents who
subsequently married each other, or (iii) legally adopted before reaching the
age of majority.
"Fiscal Period" shall mean the fiscal year of the
Partnership. The Fiscal Period shall end on the last day of the calendar year.
"General Partner" shall mean SJL Management Company, LLC,
together with any Persons hereafter admitted to the Partnership as substituted
or additional General Partners.
"Interest" means an interest of a Partner in the Partnership,
including any and all rights to which such Partner may be entitled as provided
in this Agreement, together with all obligations of such Partner to comply with
the terms and provisions of this Agreement. A Partner's Interest shall
constitute such Partner's entire interest in the Partnership and shall include,
but not be limited to such Partner's Capital Account.
"Limited Partners" shall mean the 1999 Xxxxxxxxxx Holdings
Trust, Xxxxxxx Xxxxxxxxxx and Xxxx Xxxxxxxxxx, together with such Persons as
may hereafter be admitted to the Partnership as substituted or additional
Limited Partners, all of which are referred to herein individually as a
"Limited Partner" and collectively as the "Limited Partners."
"Net Profit" or "Net Loss" of the Partnership, as the case
may be, for each Fiscal Period shall be an amount equal to the Partnership's
taxable income or loss for such period as determined under Code Section 703(a),
except that (i) such Net Profit or Net Loss shall be computed as if items of
tax-exempt income and nondeductible, noncapital expenditures (under Code
Section 705(a)(1)(B) and 705(a)(2)(B)) realized and incurred by the Partnership
during such period were included in the computation of taxable income or loss,
(ii) Book Depreciation for such period shall be taken into account in computing
such taxable income or loss in lieu of
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any amortization, depreciation or cost recovery deductions to which the
Partnership is entitled for such period; (iii) gain or loss resulting from any
disposition of property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the book value of
such property as adjusted pursuant to the definition of "Capital Account"
above, notwithstanding that the adjusted tax basis of such property differs
from its book value as so adjusted; and (iv) items that are required to be
specifically allocated under Code ss. 704(c) shall not be taken into account in
computing such taxable income or loss.
"Partner" means any Person that is or becomes a party to this
Agreement.
"Partnership" means JMS Group Limited Partnership, a Nevada
limited partnership.
"Person" means any individual, firm, corporation, trust or
other entity.
"Regulations" means 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).
"Valuation Date" means any date designated by the General
Partner, provided that on such date either:
(i) a contribution is made to the capital of
the Partnership by one or more Partners under Section 4.1(b)
hereof or by a Person being admitted as a Partner under
Section 5.1 hereof, other than contributions made by all of
the Partners in proportion to their respective Capital
Account balances as of such date, or
(ii) a distribution of cash or other property is
made by the Partnership to one or more Partners under Section
4.3 hereof other than a distribution made to all of the
Partners in proportion to their respective Capital Account
balances as of such date.
"Withheld Taxes" has the meaning ascribed to it in Section
4.3(b) hereof.
SECTION 2
FORMATION; PURPOSE; TERM
2.1 Effective Date. The Partnership is formed as of the time when
the Certificate was filed and became effective pursuant to Nev. Rev. Xxxx.xx.
88.350.
2.2 Name. The name of the Partnership shall be JMS Group Limited
Partnership, and all business of the Partnership shall be conducted in such
name or in any other name or names that are selected by the General Partner.
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2.3 Registered Agent and Registered Office. The registered agent
of the Partnership shall be Corporation Services Company and its registered
office shall be located at 000 Xxxxx Xxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxx Xxxxx,
Xxxxxx 00000-0000, or at such other place as the General Partner may from time
to time designate.
2.4 Purpose. The primary purpose of the Partnership shall be to
invest and reinvest the property contributed to the Partnership or later
acquired by the Partnership for current income production and for long term
appreciation and to engage in such other activities and businesses as the
General Partner, in its sole discretion, deems appropriate. Without limiting
the generality of the foregoing, it is anticipated that the Partnership will
assist in maintaining and centralizing control of the Partnership property;
avoiding undue fractionalization of interests in the Partnership property;
providing flexibility not available through other types of entities; and
promoting knowledge and communication among Family Members regarding the
Partnership property.
2.5 Term. The term of the Partnership shall commence upon the
Effective Date and shall continue until December 31, 2099, or, if earlier,
until the Partnership is dissolved, liquidated, and terminated pursuant to
Section 6 hereof.
SECTION 3
MANAGEMENT
3.1 In General. All decisions relating to the business and
affairs of the Partnership and all designations and elections required or
permitted to be made by the Partners under this Agreement shall be made by the
General Partner.
3.2 Investment Advisors. The General Partner shall be authorized
to engage investment advisors for the Partnership and to delegate to them full
power and authority to decide upon and to order sales of Partnership property
and to decide upon and to order purchases of assets by the Partnership. Any
such delegation of authority may be general or may contain such conditions and
restrictions as may be determined by the General Partner.
3.3 Third Party Reliance. No Person dealing with the Partnership
shall be required to inquire into the authority of the General Partner to act
on behalf of the Partnership or to bind the Partnership, but any such Person
shall be entitled to rely entirely on action taken on behalf of the Partnership
through a written instrument signed by the General Partner, including, without
limitation, action taken to delegate investment authority pursuant to Section
3.2 hereof.
3.4 Limited Partners' Participation in Management. The Limited
Partners, in their capacity as such, shall not participate in the management of
the Partnership and shall have no right or authority to act for or bind the
Partnership or the Partners.
3.5 Records and Access to Information. The Partnership shall keep
only such records as shall be determined by the General Partner to be
appropriate, and the Partners shall have access to such records during normal
business hours upon reasonable notice to the General Partner.
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3.6 Banking and Custody of Assets. The funds of the Partnership
shall be kept in one or more separate bank accounts in the name of the
Partnership in such banks or other federally insured depositories as may be
designated by the General Partner or shall otherwise be invested in the name of
the Partnership in such manner and upon such terms and conditions as may be
designated by the General Partner. All withdrawals from any such bank accounts
or investments established by the Partners hereunder shall be made on such
signature or signatures as may be designated by the General Partner. The funds
and other assets of the Partnership may also be held in an account with such
brokerage firms as may be designated by the General Partner.
3.7 Accommodation Guaranties and Pledges. The Partnership shall
have the power and authority to act as a guarantor or endorser of any
obligation, and to pledge, encumber of hypothecate any of its assets to secure
any obligation, of any Person, even if such Person is not a Partner nor related
to a Partner.
SECTION 4
FINANCIAL MATTERS
4.1 Capital Contributions.
(a) Initial Capital Contributions. The initial capital
contributions and the opening Capital Account balances of the Partners are as
follows:
Initial Capital Opening Capital
Partner Contribution Account Balance
JL Management Company, LLC, 30,000 shares of common $687,188
General Partner stock of Mohawk Industries,
Inc.
0000 Xxxxxxxxxx Holdings 3,436,478 shares of common $78,766,824
Trust, Limited Partner stock of Mohawk Industries,
Inc.
$50,000 cash
519,090 shares of common
Xxxxxxx Xxxxxxxxxx, Limited stock of Mohawk Industries,
Partner Inc. $11,890,405
Xxxx Xxxxxxxxxx, 36 shares of common stock of $825
Limited Partner Mohawk Industries, Inc.
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The opening Capital Account balance of a Partner is equal to the agreed upon
net fair market value of such Partner's initial capital contribution. The value
of any property contributed to the Partnership shall be adjusted for all
purposes of this Agreement to reflect any value determined in a final valuation
report obtained or accepted by the Partnership in connection with the
contribution.
(b) Other Contributions. No Partner shall be required to
make additional contributions to the Partnership. No Partner shall be permitted
to make additional contributions to the Partnership without the consent of the
General Partner.
(c) Interest On and Return of Capital. Each Partner
acknowledges that such Partner's return on its Capital Account will be limited
to allocations of Net Profit and Net Loss as set forth in Section 4.2 hereof,
and except as otherwise provided in Section 6 hereof, no Partner shall have the
right to interest on its Capital Account or the right to demand or to receive
the return of all or any part of such Partner's Capital Account or
contributions to the Partnership.
4.2 Allocations
(a) Allocation of Profits and Losses. Except as
otherwise provided in paragraph (b) below, the Partnership's Net Profit or Net
Loss, as the case may be, for each Fiscal Period of the Partnership and each
item of income, gain, loss, deduction or credit of the Partnership for federal
or state income tax purposes shall be allocated to the Partners in proportion
to the balances standing in their respective Capital Accounts as of the
beginning of such period; provided, however, that such allocations among the
Partners with respect to periods within such Fiscal Period shall be made in a
manner the General Partner determines is appropriate to reflect any change in
the proportionate Capital Account balances of the Partners during such Fiscal
Period.
(b) Section 704(c) Items. Tax items with respect to
property that is subject to Code Section 704(c) or the Regulations thereunder
shall be allocated in accordance with said provision and Regulations. Each
Partner acknowledges that taxable income or loss will be allocated to such
Partner individually upon a sale by the Partnership of property that such
Partner has contributed to the Partnership to reflect any difference between
such Partner's basis in the property and its fair market value at the time of
the contribution. Any such sale of property contributed by more than one
Partner shall be a sale of property consisting pro rata of amounts of such
property contributed by each such Partner, and each Partner hereby consents to
such pro rata sales of contributed property. Any tax item that is required by
Regulations Section 1.704-1(b)(2)(iv)(f) to be allocated in accordance with the
principles of Code Section 704(c) shall be so allocated.
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4.3 Distributions.
(a) Distributions to Partners. The cash or other assets
of the Partnership may be distributed by the Partnership to the Partners, at
such times and in such amounts as the General Partner may reasonably determine,
in proportion to the positive balances, if any, standing in the Partners'
respective Capital Accounts, taking into account the reasonable capital needs
of the Partnership. Prior to a distribution in kind of property of the
Partnership, in liquidation or otherwise, the difference between the value of
the property to be distributed and its book value shall be credited or charged,
as appropriate, to the Partners' Capital Accounts in proportion to their
respective positive Capital Account balances, if any, as of such time (but said
adjustment to Capital Accounts is not intended to duplicate any adjustment to
Capital Accounts by reason of a revaluation of Partnership assets pursuant to
the definition of "Capital Accounts" in Section 1.1 above).
(b) Withholding. The Partnership shall withhold and pay
over to the applicable taxing authorities all taxes or withholdings, and all
interest, penalties, additions to tax, and similar liabilities in connection
therewith (hereinafter "Withheld Taxes") to the extent that the Partnership
determines that such withholding and/or payment is required by any law, rule,
or regulation. The Partnership shall determine to which Partners such Withheld
Taxes are attributable. All amounts withheld pursuant to this Section 4.3(b)
with respect to any allocation or distribution to any Partner shall be treated
as amounts distributed to such Partner pursuant to Section 4.3(a) hereof for
all purposes of this Agreement.
SECTION 5
PARTNERS
5.1 Admission. The initial Partners of the Partnership are as
follows:
Partner
SJL Management Company, LLC, General Partner
1999 Xxxxxxxxxx Holdings Trust, Limited Partner
Xxxxxxx Xxxxxxxxxx, Limited Partner
Xxxx Xxxxxxxxxx, Limited Partner
Except as otherwise provided in this Section 5, no Person
shall be admitted to the Partnership as either a general or a limited partner
without the consent of the General Partner.
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5.2 Transfer of Partnership Interests.
(a) Transfers by Limited Partners. No Limited Partner
shall sell, assign, transfer, mortgage, pledge, encumber, hypothecate or
otherwise dispose of all or any part of such Limited Partner's Interest to any
Person without the prior or simultaneous written consent of the General Partner
to any such proposed disposition. A transferee of all or part of a Limited
Partner's Interest may be admitted as a Partner only upon the approval of the
General Partner, which may be granted or withheld in the sole and absolute
discretion of the General Partner, and unless so admitted shall, any other
provision hereof notwithstanding, have only the share of Partnership capital,
Net Profit, Net Loss, allocations and distributions attributable to the
Interest or portion thereof that is the subject of the transfer.
(b) Transfers by General Partner. The General Partner
covenants and agrees that it will not sell, assign, transfer, mortgage, pledge,
encumber, hypothecate or otherwise dispose of all or any part of its Interest
in the Partnership as General Partner to any Person without first having
obtained the written consent of all of the Partners to any such proposed
disposition. In the event the General Partner transfers full and complete
ownership of all or any portion of its interest in the Partnership as General
Partner in compliance with the provisions of this Section 5.2(b), the
Partnership shall continue, and the transferee of such interest shall be
admitted to the Partnership as a General Partner with the same interest in
Partnership Net Profit or Net Loss, tax items, capital and distributions, the
same obligations with respect to contributions to the capital of the
Partnership, and the same rights and obligations to participate in the
management of the Partnership, as the transferring General Partner had with
respect to the transferred interest in the Partnership; provided, however, that
any such transferee shall be subject to the terms and conditions of this
Agreement and shall promptly execute and deliver to the Partnership such
documents as may be necessary or appropriate, in the opinion of counsel to the
Partnership, to reflect such transferee's admission to the Partnership as a
General Partner and its agreement to be bound by all of the terms and
conditions of this Agreement.
(c) Attempted Transfers in Contravention. Any attempted
transfer of an Interest in contravention of this Section 5.2 shall be void and
shall not bind or be recognized by the Partnership. Transfers restricted by
this Section 5 shall include both voluntary and involuntary transfers and
transfers by operation of law, except as otherwise expressly provided herein.
5.3 Excepted Transfers. Notwithstanding any other provision of
this Agreement to the contrary, if
(a) any economic interest of a Partner in the
Partnership is transferred by gift, sale, as a result of the death or legal
incompetency of a Partner, or upon distribution to a beneficiary of a trust
that is a Partner, whether such distribution is by operation of law or
otherwise; and
(b) the transferee is a Family Member, or, upon the
death of any Partner, his or her duly qualified and acting personal
representative, provided in the latter case that all Persons who are to receive
any part of such interest under the terms of such Partner's Will or under the
applicable laws of intestate succession are Family Members;
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the transfer shall be valid, but the transferee shall have only the status of
an assignee and shall not be entitled to become or to exercise any rights of a
Partner. The transferee may become a substituted Limited Partner only upon the
written approval of the General Partner, which may be granted or withheld in
the sole and absolute discretion of the General Partner. If the economic
interest transferred was that of a General Partner, the transferee may be
admitted to the Partnership as a General Partner only with the written consent
of all of the Partners, which they may grant or withhold in their sole and
absolute discretion, and upon compliance with the document delivery
requirements of Section 5.2(b) above. Upon the death of a Partner, unless all
Persons who are to receive any part of such Partner's economic interest under
the terms of such Partner's Will or under the applicable laws of intestate
succession are Family Members, the Partnership shall have the right,
exercisable by delivering written notice to the personal representative of such
Partner's estate within ninety (90) days of the appointment of such personal
representative, to purchase such interest for the amount of such Partner's
Capital Account at the time of his or her death.
5.4 Form of Transfers. A Limited Partner may transfer all or any
part of such Limited Partner's economic interest in the Partnership, subject to
compliance with the other provisions of this Section 5, if the transferor and
transferee Partners and, if applicable, the General Partner, execute an
Assignment substantially in the form of Exhibit A or A-1, as applicable,
attached hereto and incorporated herein by this reference. The General
Partner's execution of such Assignment shall signify, if applicable, the
consent of the General Partner to such transfer.
SECTION 6
DISSOLUTION, LIQUIDATION AND TERMINATION OF PARTNERSHIP
6.1 Dissolving Events. The Partnership shall be dissolved,
liquidated and terminated only upon the happening of any of the following
events:
(a) The expiration of the term provided in Section 2.5
above;
(b) The election by the General Partner to terminate the
Partnership; or
(c) The happening of a Disabling Event unless:
(i) there is any other acting General Partner
willing to continue the Partnership; provided, however, that
the interest of the Disabled General Partner shall thereupon
be converted to the interest of a Limited Partner in the
Partnership; or
(ii) within the ninety (90) day period
immediately following the happening of such Disabling Event,
the Limited Partners unanimously consent to continue the
Partnership and elect a new General Partner. Upon such
consent to continue the Partnership, the personal
representative or beneficiary of the Disabled General Partner
shall succeed to such Partner's interest in the Partnership
in the same manner and on the same terms as provided in
Section 5.2(b) hereof; provided, however, that the interest
of the disabled General Partner
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shall thereupon be converted to the interest of a Limited
Partner in the Partnership.
6.2 No Withdrawal or Dissolution. No Partner shall at any time
withdraw from the Partnership. No Partner shall take any action to dissolve the
Partnership except as expressly contemplated by this Agreement.
6.3 Method of Liquidation. Upon the happening of any of the
events specified in Section 6.1 above that require the Partnership to be
dissolved, liquidated and terminated, the Partnership shall continue solely for
the purposes of winding up its affairs in an orderly manner, liquidating its
assets, and satisfying the claims of its creditors and Partners. The General
Partner who is not a Disabled General Partner, or, if there is no General
Partner who is not a Disabled General Partner, the Person designated in writing
by the Limited Partners, shall be responsible for overseeing the winding up and
dissolution of the Partnership. The assets of the Partnership shall be
liquidated only to the extent determined to be appropriate by the Person
overseeing the winding up, and the proceeds thereof, together with such assets
as the Person overseeing the winding up determines to distribute in kind, shall
be applied and distributed in the following order:
(a) To the payment of the debts and liabilities of the
Partnership other than to Partners and to the expenses of liquidation in the
order of priority as provided by law; then to
(b) The establishment of any reserves which the Person
overseeing the winding up deems necessary for any contingent or unforeseen
liabilities or obligations of the Partnership; provided, however, that any such
reserves shall be paid over to a bank or other designated agent to be held in
escrow for the purpose of paying any such contingent or unforeseen liabilities
or obligations and, at the expiration of such period as the Person overseeing
the winding up deems advisable, of distributing the balance of such reserves in
the manner hereinafter provided in this Section; then to
(c) The repayment of any liabilities or debts, other
than Capital Accounts, of the Partnership to any of the Partners; then to
(d) The Partners in proportion to the positive balances,
if any, then standing in their respective Capital Accounts.
A reasonable time shall be allowed for the orderly liquidation of the
Partnership's assets pursuant to this Section 6.3 in order to minimize the
losses normally attendant upon such a liquidation. The Partnership shall
terminate when all of its assets shall have been applied and distributed in
accordance with the provisions of this Section 6.3. The establishment of any
reserves in accordance with the provisions of this Section 6.3 shall not have
the effect of extending the term of the Partnership, but any such reserves
shall be distributed in the manner provided in this Section 6.3 upon expiration
of the period of such reserves.
6.4 Negative Capital Accounts. No Partner with a deficit balance
in its Capital Account shall have any obligation to make any contribution to
the capital of the Partnership with
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respect to such deficit, and such deficit shall not be considered a debt owed
to the Partnership or to any other Person.
6.5 Limitations on Rights of Partners. (a) Each Partner shall
look solely to the assets of the Partnership for the return of its capital
contributions, and (b) no Partner shall have priority over any other Partner as
to the return of its capital contributions, distributions, or allocations.
SECTION 7
AMENDMENTS
No change or modification of this Agreement shall be valid or binding
upon a Partner, nor shall any term or condition of this Agreement be considered
waived by a Partner, unless the change, modification or waiver is in writing
and is signed by such Partner. Notwithstanding the foregoing, an amendment to
this Agreement shall be valid and binding on all Partners if its purpose is to
reflect the admission of a new Partner or the transfer of an interest in the
Partnership (in either case in compliance with the other provisions of this
Agreement), and it is signed by the Partners having the power to approve such
admission or transfer and, as the case may be, the newly admitted Partner or
the transferor and transferee Partners.
SECTION 8
MISCELLANEOUS
8.1 Notices. Except as otherwise specifically provided herein,
whenever any notice or other communication is required or permitted to be given
hereunder, such notice or other communication shall be in writing and shall be
(as elected by the party giving such notice)
(a) delivered in person; or
(b) sent by U.S. registered or certified mail, return
receipt requested, postage prepaid to the person to whom the notice is intended
to be given at the address it has previously furnished in writing to the
Partnership or to its last known address. Any notice or other communication
delivered in person shall be deemed effectively given when delivered, and any
notice or other communication mailed as hereinabove provided shall be deemed
effectively given on the date of mailing.
8.2 Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon the Partners and their respective legal
representatives, transferees, heirs, successors and assigns, subject to the
limitations in Section 5 hereof.
8.3 Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of the prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of the provision in any other
jurisdiction.
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8.4 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all of the Partners had signed the same
document. All counterparts shall be construed together and shall constitute one
agreement.
8.5 Construction. This Agreement shall be interpreted and
construed in accordance with the internal laws of the State of Nevada. The
Article, Section and other headings herein (except for the definitions in
Section 1.1) have been inserted for convenience of reference only and shall not
control or affect the meaning or construction of any of the terms or provisions
herein. As used in this Agreement, the singular shall include the plural, the
plural shall include the singular, and the masculine, feminine or neuter gender
shall each include both other genders, all as appropriate in the given context.
8.6 Investment Representations of Limited Partners.
(a) Each Limited Partner does hereby represent and
warrant to the Partnership and to the General Partner that such Limited Partner
has acquired its Interest for investment solely for its own account, with the
intention of holding such Interest for investment, without any intention of
participating directly or indirectly in any distribution of any portion of such
Interest, and without the financial participation of any other Person in
acquiring such Interest.
(b) Each Limited Partner does hereby acknowledge that it
is aware that its Interest has not been registered (a) under the Securities Act
of 1933, as amended (the "Federal Act"), or (b) under any state securities
laws. Each Limited Partner further understands and acknowledges that its
representations and warranties contained in this Section 8.6 are being relied
upon by the Partnership and by the General Partner as the basis for the
exemption of the Limited Partners' Interests from the registration requirements
of the Federal Act and from the registration requirements of applicable state
securities laws. Each Limited Partner further acknowledges that the Partnership
will not and has no obligation to recognize any sale, transfer or assignment of
all or any part of its Interest to any Person unless and until the provisions
of Section 5 hereof have been fully satisfied.
(c) Each Limited Partner hereby acknowledges that prior
to its execution of this Agreement, it has received a copy of this Agreement
and a copy of the Certificate and that it has examined such documents or caused
such documents to be examined by its representative or attorney. Each Limited
Partner hereby further acknowledges that it or its attorney is familiar with
this Agreement, with the Certificate, and with the Partnership's intention to
invest and reinvest its assets in such manner as the General Partner
determines, subject to the limitations set forth above. Each Limited Partner
further acknowledges that it does not desire any further information or data
relating to the Partnership, its assets or the General Partner. Each Limited
Partner hereby acknowledges that it understands that the purchase of its
interest in the Partnership is a speculative investment involving a high degree
of risk and does hereby represent that it has a net worth sufficient to bear
the economic risk of investing in the Partnership and to justify its investing
in a highly speculative venture.
(d) Each Limited Partner hereby acknowledges and agrees
that the legend reflecting the restrictions imposed on the transfer of its
Interest pursuant to Section 5 hereof,
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under the Federal Act and under any state securities law shall be placed on the
first page of this Agreement.
8.7 Power of Attorney. Each Limited Partner does hereby
irrevocably constitute and appoint the General Partner as its true and lawful
agent and attorney-in-fact, in its name, place and stead, to make, execute,
consent to, swear to, acknowledge, record and file:
(a) A Certificate of Limited Partnership under the
applicable laws of the State of Nevada and under the applicable laws of any
other jurisdiction in which the General Partner deems such filing to be
necessary or desirable;
(b) Any and all amendments or modifications to said
Certificate which may be deemed necessary or appropriate by the General Partner
to reflect any amendment or modification to this Agreement made in compliance
with Section 7; and
(c) All certificates and other instruments which may be
required to effectuate the dissolution and termination of the Partnership
pursuant to the provisions of this Agreement.
It is expressly understood, intended and agreed by each Limited
Partner for itself, and its successors and assigns, that the grant of the power
of attorney to the General Partner pursuant to this Section 8.7 is coupled with
an interest, is irrevocable and shall survive the death or legal incompetency
of the Limited Partner or the assignment of its interest in the Partnership.
8.8 Accounting.
(a) The annual accounting period of the Partnership
shall end on the last day of the calendar year.
(b) The Partnership's books of account shall be
maintained, and its income, gains, losses and deductions shall be determined
and accounted for in accordance with such method of accounting as may be
adopted for the Partnership for federal income tax purposes.
(c) At the close of each taxable year of the
Partnership, the Partnership, at the election of the General Partner, shall
have unaudited financial statements prepared and distributed to each Partner.
Such financial statements shall reflect the results of the operations of the
Partnership for such year, the unpaid balance due on all obligations of the
Partnership, each Partner's share of the Net Profit or Net Loss of the
Partnership for such year, each Partner's distributive share of all tax items
of the Partnership for such year, and all other information as may be required
to enable each Partner to prepare its federal, state and local income tax
returns in accordance with all then applicable laws, rules and regulations. The
Partnership also shall cause to be prepared and filed all federal, state and
local income tax returns required of the Partnership for each taxable year, and
may, in the sole discretion of the General Partner, distribute such tax returns
to each Partner in lieu of distributing such unaudited financial statements.
(d) The Partnership's books of account shall be kept at
such locations as may be designated by the General Partner, and each Partner
shall have access thereto during normal business hours upon reasonable notice
to the General Partner.
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(e) The decision to make or not to make any tax
election, including, without limitation, the election under Section 754 of the
Code, shall be in the sole discretion of the General Partner.
8.9 Arbitration.
(a) Any controversy, dispute or claim arising out of or
relating to this Agreement or any transaction hereunder shall be settled by a
single arbitrator appointed in accordance with this Section 8.9. This agreement
to arbitrate shall be specifically enforceable under the prevailing arbitration
law of the state in which the arbitration is convened.
(b) The arbitration shall be conducted in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
(the "AAA") then in effect. The party desiring the arbitration (the "Claimant")
shall give to the other party or parties (the "Respondent") written notice of
the Claimant's desire to arbitrate, specifying the questions to be arbitrated
and naming an arbitrator agreeable to the Claimant. Within a reasonable time
thereafter, not exceeding thirty (30) days, the Respondent shall give in like
manner written notice, specifying any additional questions to be arbitrated and
either agreeing to the arbitrator named by the claimant or naming an alternate
arbitrator. If the parties are unable to agree on an arbitrator within thirty
(30) days thereafter, the parties shall immediately notify the AAA and the AAA
shall appoint the arbitrator in accordance with its then existing rules for
appointment of an arbitrator from the AAA's National Panel of Commercial
Arbitrators. The arbitration shall be conducted in the state in which the
Respondent is domiciled at the time the arbitration is convened. The award
rendered by the arbitrator shall be final, and judgment may be entered upon the
award in any court having jurisdiction of the matter.
(c) For the purpose of enforcing any arbitration award
granted herein or enforcing any other provisions or rights hereunder, the
parties hereby agree and consent to in personam jurisdiction in the courts of
the State of Nevada or the domicile of any party at the time of such
enforcement, at the selection of the Person instituting such enforcement.
(d) As a part of the arbitration award and in addition
to such other relief as may be granted, the prevailing party in the arbitration
proceeding shall be entitled to the costs of arbitration, including reasonable
attorneys' fees as determined by the arbitrator, together with any costs,
including reasonable attorneys' fees as determined by the court, incurred by
the prevailing party in court enforcement of the arbitration award after it is
rendered by the arbitrator. If any party voluntarily dismisses a claim or
counterclaim, the other party shall be considered the prevailing party with
respect to such claim or counterclaim.
[SIGNATURES BEGIN ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have executed, sealed and
delivered this Agreement as of the Effective Date.
GENERAL PARTNER
SJL Management Company, LLC
By: 1999 Xxxxxxxxxx Holdings Trust, Member
By: Bessemer Trust Company, Trustee
By: (SEAL)
----------------------------
Title:
-------------------------------
By: (SEAL)
----------------------------------
Xxxxxxx Xxxxxxxxxx, Member
By: (SEAL)
----------------------------------
Xxxx Xxxxxxxxxx, Member
By: (SEAL)
----------------------------------
Xxxxxxx X. Xxxxx, Member
LIMITED PARTNERS
1999 Xxxxxxxxxx Holdings Trust,
Limited Partner
By: Bessemer Trust Company, Trustee
By: (SEAL)
----------------------------
Title:
-------------------------------
(SEAL)
-------------------------------------
Xxxxxxx Xxxxxxxxxx, Limited Partner
(SEAL)
-------------------------------------
Xxxx Xxxxxxxxxx, Limited Partner
-16-
EXHIBIT A
SALE AND ASSIGNMENT OF LIMITED PARTNERSHIP
INTERESTS OF JMS GROUP LIMITED PARTNERSHIP
1.
By the signatures below, the Transferor and Transferee named below agree to the
transfer of the portion of the Transferor's economic interest in the
Partnership set forth below (the "Transferred Interest") from the Transferor to
the Transferee, effective on the date hereof, in exchange for a promissory note
in the amount of _____________ Dollars ($____________) (the "Note"), and the
Transferee acknowledges that it shall have only the status of an assignee and
shall not be entitled to become or to exercise any rights of a Partner, and
further acknowledges: (i) that the Transferee has received this instrument of
sale and assignment of the Transferred Interest and holds the Transferred
Interest for investment; (ii) that the Transferee is aware that the Transferred
Interest has not been registered under the Securities Act of 1933, as amended,
under Chapter 90 of the Nevada Revised Statutes, or under any other state
securities law; and (iii) that the Partnership will not and has no obligation
to recognize any sale, transfer or assignment of an interest in the Partnership
to any Person unless and until the provisions of Section 5 of the Limited
Partnership Agreement of JMS Group Limited Partnership, as amended (the
"Agreement") have been fully satisfied. Except as the context otherwise
requires, capitalized terms used in this Assignment have the same meanings that
such terms have in the Agreement.
2.
The Transferor and Transferee agree that an appraisal of the fair market value
of the Transferred Interest as of the date hereof shall be prepared within a
reasonable time after the date hereof by an unrelated, independent appraisal
firm selected by the Transferor and Transferee. If the fair market value of the
Transferred Interest as determined by such appraisal is less than or greater
than the initial purchase price paid by the Transferee under paragraph 1
hereunder, the principal balance of the Note shall be reduced or increased, as
appropriate, by the execution of a replacement Note and the cancellation of the
original Note, so that the purchase price of the Transferred Interest shall be
equal to such fair market value as so determined.
PAGE 2 OF EXHIBIT A
Date of Transfer: ________________________
Portion of Interest Subject to Transfer: ________ of Transferor's Total
Economic Interest
Transferor:
_______________________ Signed: _____________________________(SEAL)
Transferee:
_______________________ Signed: _____________________________(SEAL)
General Partner:
SJL Management Company, LLC
By: 1999 Xxxxxxxxxx Holdings Trust, Member
By: Bessemer Trust Company, Trustee
By: (SEAL)
-------------------------------
Title:
----------------------------------
By: (SEAL)
-----------------------------------
Xxxxxxx Xxxxxxxxxx, Member
By: (SEAL)
-----------------------------------
Xxxx Xxxxxxxxxx, Member
By: (SEAL)
-----------------------------------
Xxxxxxx X. Xxxxx, Member
EXHIBIT A-1
ASSIGNMENT OF LIMITED PARTNERSHIP
INTERESTS OF JMS GROUP LIMITED PARTNERSHIP
By the signatures below, the Transferor and Transferee named below agree to the
transfer of the portion of the Transferor's economic interest in the
Partnership set forth below (the "Transferred Interest") from the Transferor to
the Transferee, as a gift, effective on the date hereof, and the Transferee
acknowledges that it shall have only the status of an assignee and shall not be
entitled to become or to exercise any rights of a Partner, and further
acknowledges: (i) that the Transferee has received this instrument of
assignment of the Transferred Interest and holds the Transferred Interest for
investment; (ii) that the Transferee is aware that the Transferred Interest has
not been registered under the Securities Act of 1933, as amended, under Chapter
90 of the Nevada Revised Statutes, or under any other state securities law; and
(iii) that the Partnership will not and has no obligation to recognize any
sale, transfer or assignment of an interest in the Partnership to any Person
unless and until the provisions of Section 5 of the Limited Partnership
Agreement of JMS Group Limited Partnership, as amended (the "Agreement") have
been fully satisfied. Except as the context otherwise requires, capitalized
terms used in this Assignment have the same meanings that such terms have in
the Agreement.
Date of Transfer: ________________________
Portion of Interest Subject to Transfer: ________ of Transferor's Total
Economic Interest
Transferor:
_______________________ Signed: _____________________________(SEAL)
Transferee:
_______________________ Signed: _____________________________(SEAL)
General Partner:
SJL Management Company, LLC
By: 1999 Xxxxxxxxxx Holdings Trust, Member
By: Bessemer Trust Company, Trustee
By: (SEAL)
-------------------------------
Title:
----------------------------------
By: (SEAL)
-----------------------------------
Xxxxxxx Xxxxxxxxxx, Member
By: (SEAL)
-----------------------------------
Xxxx Xxxxxxxxxx, Member
By: (SEAL)
-----------------------------------
Xxxxxxx X. Xxxxx, Member
