LIMITED PARTNERSHIP AGREEMENT
OF
FW INTEGRATED ORTHOPAEDICS INVESTORS, L.P.
This Limited Partnership Agreement ("Agreement") of FW Integrated
Orthopaedics Investors, L.P. is made and entered into effective as of the
day of December, 1997 (the "Effective Date"), by and among Group 31, Inc.,
a Texas corporation ("Group 31"), as the general partner and Keystone,
Inc., a Texas corporation ("Keystone"), FW Strategic Partners, L.P., a
Delaware limited partnership ("Strategic"), and FW Integrated Orthopaedics
Coinvestment Partners, L.P., a Texas limited partnership ("Coinvestors"),
as the limited partners.
WITNESSETH:
For and in consideration of the mutual covenants set forth herein and
for other good and valuable consideration, the adequacy, receipt, and
sufficiency of which are hereby acknowledged, Group 31, Keystone,
Strategic, and Coinvestors (collectively, the "Partners" and individually,
a "Partner") hereby agree as follows:
ARTICLE I
ORGANIZATION AND PURPOSE
Section 1.01. Formation of Limited Partnership. The Partners hereby
agree to become partners and to form a limited partnership (the
"Partnership") pursuant to Article 6132a-1 Tex. Rev. Civ. Stat. ▇▇▇., known
as the Texas Revised Limited Partnership Act (the "Act"). Group 31 shall
be the general partner and is hereinafter sometimes referred to in such
capacity as the "General Partner." Keystone, Strategic, and Coinvestors
shall be the limited partners and are hereinafter sometimes referred to in
such capacity individually as a "Limited Partner" or collectively as the
"Limited Partners."
Section 1.02. Name. The name of the Partnership shall be FW
Integrated Orthopaedics Investors, L.P. All business and affairs of the
Partnership shall be conducted solely under, and all Partnership Assets (as
that term is defined in Section 1.04) shall be held solely in, such name
unless otherwise determined by the General Partner.
Section 1.03. Effective Date and Term. The Partnership shall be in
effect for a term beginning on the Effective Date and shall continue under
this Agreement (as amended from time to time) until dissolved upon the
occurrence of an event that causes the dissolution of the Partnership in
accordance with the provisions of this Agreement, and thereafter to the
extent provided by applicable law, until wound up and terminated as
provided herein.
Section 1.04. Purposes and Scope of Business. The business and
purposes of the Partnership are to buy, sell, exchange or otherwise
acquire, hold, trade, invest in, and deal with the securities of Integrated
Orthopaedics, Inc., a Texas corporation ("Integrated"), including without
limitation, common or preferred stock, bonds, debentures, notes, warrants,
options and all other rights of every kind and description (collectively,
the "Securities"), whether such Securities are acquired directly or
indirectly through partnerships, joint ventures or otherwise, and to
borrow, on margin or otherwise, such funds (in addition to the capital
contributions provided for herein) that the General Partner determines to
be necessary or advisable to conduct the business of the Partnership and to
carry out the foregoing. Subject to the terms and conditions of this
Agreement, the Partnership shall have the power and authority to do all
such other acts and things as may be necessary, desirable, expedient,
convenient for, or incidental to, the furtherance and accomplishment of the
foregoing objectives and purposes and for the protection and benefit of the
Partnership. The assets of the Partnership, whether now or hereafter
owned, are sometimes referred to as the "Partnership Assets."
Section 1.05. Documents. The General Partner, or anyone designated
by the General Partner, is hereby authorized to execute a certificate of
limited partnership of the Partnership ("Certificate of Limited
Partnership") in accordance with the Act and cause the same to be filed in
the office of the Secretary of State of the State of Texas in accordance
with the provisions of the Act. The Partnership shall promptly execute and
duly file with the proper offices in each state in which the Partnership
may conduct the activities hereinafter authorized, one or more certificates
as required by the laws of each such state in order that the Partnership
may lawfully conduct the business, purposes, and activities herein
authorized in each such state, and the Partnership shall take any other
action or measures necessary in such state or states for the Partnership to
conduct such activities.
Section 1.06. Principal Place of Business. The principal place of
business of the Partnership shall be ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or at such other place or places as may be approved by
the General Partner. The General Partner shall be responsible for
maintaining at the Partnership's principal place of business those records
required by the Act to be maintained there.
Section 1.07. Registered Agent and Office. The Registered Agent (as
defined in the Act) for the Partnership shall be ▇. ▇. ▇▇▇▇▇▇. The
Registered Office (as defined in the Act) of the Partnership shall be ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
Section 1.08. Certain Definitions.
(a) "Valuation Date" shall mean any date that the Securities or
other Partnership Assets are valued for any reason.
(b) "Value" shall mean (i) with respect to any Security:
(A) for marketable Securities listed on a national
Securities exchange or authorized for trading on the National
Market System Quotations, the last sales price on the Valuation
Date, or in the absence of a sale on such date, the mean
between the "bid" and "asked" prices on such day, or if no such
"bid" and "asked" prices exist, by such method as the General
Partner reasonably determines will reflect the fair market
value, provided, that if a Security is listed on more than one
exchange, the General Partner shall use the price on the New
York Stock Exchange, if available, or, if not, the price on the
exchange selected by the General Partner;
(B) for marketable Securities traded in the
over-the-counter market and reported in the National
Association of Securities Dealers' Automated Quotation System,
the closing bid price on the Valuation Date as reported by such
system if held long and its closing "asked" price if held
short, provided, that if such price is not available, the
Securities shall be valued by such method as the General
Partner reasonably determines will reflect their fair value;
(C) for Securities not specified in (A) or (B) above, and
for which prices are regularly quoted (on a daily basis) by at
least two (2) independent recognized dealers, the most recent
market prices as reported by such dealers;
(D) for exchange-traded options, the closing price on the
Valuation Date on the principal exchange on which the option is
traded, and for non-exchange traded options, the value of the
options as reasonably determined by the General Partner using
standard option pricing models; and
(E) for all other Securities, the cost of or such other
value as reasonably determined by the General Partner.
Foreign Securities listed on a recognized exchange shall be
included in (A) above; those regularly reported on a recognized
automated quotation system shall be included in (B) above; and
those regularly quoted (on a daily basis) by at least two (2)
independent recognized dealers shall be included in (C) above;
and
(ii) with respect to any other Partnership Asset the market
value of such Partnership Asset as of the Valuation Date as reasonably
determined by the General Partner.
ARTICLE II
OPERATIONS
Section 2.01. Management of Partnership.
(a) The right to manage, control, and conduct the business and
affairs of the Partnership shall be vested solely in the General Partner.
Except as provided in Sections 2.01(b) and 7.01, the Limited Partners shall
not take part in the management of the affairs of the Partnership and under
no circumstances may the Limited Partners control the Partnership business
or sign for or bind the Partnership. Without limiting the generality of
the foregoing, and notwithstanding anything to the contrary contained in
this Agreement, the General Partner shall have the exclusive authority to
act for and on behalf of the Partnership, including, without limitation,
causing the Partnership to enter into acquisition agreements related to the
acquisition of Integrated, and documents and other instruments related
thereto, and no third party shall ever be required to inquire into the
authority of the General Partner to take such action on behalf of the
Partnership. Except as expressly limited in this Agreement, the General
Partner shall have the rights, authority, and powers of general partners
with respect to the Partnership business and the Partnership Assets as set
forth in the Act as in effect upon the Effective Date of this Agreement.
The General Partner shall not be required to devote its full time and
attention to the business of the Partnership, but only such time as it
deems necessary for the proper conduct of the Partnership's affairs.
(b) No act shall be taken, sum expended or obligation incurred by
the General Partner for or on behalf of the Partnership with respect to a
matter within the scope of any of the following major decisions ("Major
Decisions") affecting, directly or indirectly, the Partnership, or the
Partnership Assets, unless approved as described in subsection 2.01(c):
(i) Financing or refinancing the Partnership or the
Partnership Assets, including, without limitation, the granting
of any mortgages, pledges, or other encumbrances of the
Partnership Assets in connection therewith (other than in the
ordinary course of business);
(ii) Selling, exchanging or otherwise conveying or
disposing of any interest in all or any portion of the Securities
or any other Partnership Asset, including, without limitation, by
merger or consolidation, except for disposition or replacement of
personal property in the ordinary course of business;
(iii)Admitting a New Partner (as defined in Section 5.05) to the
Partnership;
(iv) Seeking or allowing the Partnership to seek protection from
creditors under any state or federal law, code, or statute;
(v) Initiating, settling, or compromising any material litigation
matters involving the Partnership;
(vi) Voting the Securities with respect to material matters,
including, without limitation, the election of directors of Integrated; or
(vii)Dissolving the Partnership pursuant to Article 6.02(d).
(c) No Major Decision may be made or effected by or on behalf of the
Partnership without the approval of the Partners holding 75% of all
Percentage Interests (as defined in Section 4.01) in the Partnership. As
used in this Agreement, "Approved by the Partners," "Approval of the
Partners," and other like terms shall mean the approval or consent of the
Partners holding 75% of the Percentage Interests in the Partnership. The
General Partner may at any time propose an action requiring Approval of the
Partners to the Limited Partners by giving written notice to the Limited
Partners. Within ten days after receipt of such notice, each Partner shall
indicate, in writing, to the General Partner, his or its approval or
disapproval of such Major Decision; provided, that, in the event any
Partner does not respond in such 10-day period, such Partner shall be
deemed to have disapproved such Major Decision. If Partners holding 75% of
the Percentage Interests in the Partnership approve of, consent to, or
otherwise take any action contemplated by this Section 2.01, such action
shall neither require any further polling of any other Partners, nor
require any further approval, consent, or action of any other Partners. In
the event Partners holding less than 75% of the Percentage Interests of the
Partners with respect to a Major Decision have approved or consented to
such Major Decision within the aforementioned 10-day period, such action
shall constitute disapproval by the Partners of such Major Decision.
Section 2.02. Affiliates. The General Partner shall have the right
to cause the Partnership to enter into contracts or otherwise deal with any
affiliates of any Partner in any capacity, including, without limitation,
in connection with the financing, management, and development of the
Partnership Assets, except that the terms of any such arrangement shall be
commercially reasonable and competitive with amounts that would be paid to
third parties on an "arms-length" basis.
Section 2.03. Expenses. The Partnership shall pay or reimburse the
General Partner and the Tax Matters Partner (as defined in Section 2.05)
for all direct, out-of-pocket expenses incurred by them with respect to
their respective duties under Section 2.01 and Section 2.05 to the
Partnership, including, without limitation, salaries, accounting expenses,
insurance premiums attributable directly to the Partnership, legal fees,
and other direct costs associated with the formation and operation of the
Partnership.
Section 2.04. Exculpation; Indemnity.
(a) Neither a Partners nor any affiliate of any Partner
(individually, an "Actor", and collectively, the "Actors") shall be liable
to the Partnership or any other Partner for (i) any act or omission taken
or suffered by any Actor in connection with the conduct of the Partnership
business, unless such act or omission constitutes bad faith, willful
misconduct, fraud or misappropriation or conversion of funds by such Actor,
(ii) any act or omission taken or suffered by any Actor in the good faith
exercise of discretion or judgment of the Actor as provided by this
Agreement, unless such act or omission constitutes bad faith, willful
misconduct, fraud or misappropriation or conversion of funds by such Actor,
or (iii) any action or omission taken or suffered by any other Partner.
(b) To the fullest extent allowed or permitted under any provision of
applicable law, including, without limitation, the Act, the Partnership
shall indemnify, defend, and hold harmless each Partner or any officer,
shareholder, director, or agent of such Partners (with such Partner,
officer, shareholder, director, or agent being referred to as an
"Indemnitee") to the extent of the Partnership Assets, from and against any
losses, expenses, judgments, fines, settlements, and damages (collectively,
"Liabilities") incurred by the Partnership or such Indemnitee arising out
of any claim based upon acts (including, without limitation, negligent
acts) performed or omitted to be performed by the Partnership or such
Indemnitee in connection with the business of the Partnership, including,
without limitation, costs, expenses, and attorneys' fees expended in the
settlement or defense of any such Liability, unless, in each case, such
Liability results from such Indemnitee's own bad faith, willful misconduct,
fraud or misappropriation or conversion of funds.
Section 2.05. Tax Matters Partner. The General Partner shall act as
the "Tax Matters Partner" for federal income tax purposes. The Tax Matters
Partner shall mean the Partner (a) designated as the "tax matters partner"
within the meaning of Section 6231(a)(7) of the Internal Revenue Code of
1986, as amended from time to time (or any corresponding provisions of
succeeding law, collectively the "Code") and (b) whose responsibilities as
Tax Matters Partner include, where appropriate, commencing on behalf of the
Partnership certain judicial proceedings regarding Partnership federal
income tax items and informing all Partners of any administrative or
judicial proceeding involving federal income taxes. In exercising its
responsibilities as Tax Matters Partner, the General Partner shall have the
final decision making authority with respect to all federal income tax
matters involving the Partnership. Any direct out-of-pocket expense
incurred by the Tax Matters Partner in carrying out its responsibilities
and duties under this Agreement shall be allocated to and charged to the
Partnership as an expense of the Partnership for which the Tax Matters
Partner shall be reimbursed.
ARTICLE III
FINANCING
Section 3.01. Capital Contributions.
(a) Each of the Partners agrees to contribute (the "Initial Capital
Contributions") to the capital of the Partnership on the Effective Date the
amount in cash set forth opposite each Partner's name on the attached
Exhibit A which is made a part of this Agreement for all purposes.
(b) If at any time the General Partner determines, in its sole
discretion, that additional funds are needed for (i) any direct
out-of-pocket costs and expenses incurred by the Partnership in connection
with the formation, financing, and operation of the Partnership, including,
without limitation, any amounts required to repay indebtedness of the
Partnership incurred in connection with the acquisition of the Securities,
and (ii) any other sums of money needed, in the sole opinion of the General
Partner, for the normal day-to-day business and affairs of the Partnership,
then from time to time the General Partner may make a written call for such
funds ("Call"). Within 30 days after the General Partner gives written
notice of the Call, the Partners may, but shall not be obligated to, make
such additional capital contributions to the Partnership, pro rata in
accordance with their Percentage Interests (with each such contribution
being referred to as an "Additional Capital Contribution"). If any Partner
elects not to deliver (the "Non-Contributing Partner") to the General
Partner for the use of the Partnership his or its pro rata portion of any
Call (with such portion not being contributed being referred to herein as
the "Defaulted Amount") within the time prescribed above, the other
Partners shall have the right, but not the obligation, without further
notice, to advance for his or its own capital account all or a portion of
the Defaulted Amount (with any Partner contributing a portion of the
Defaulted Amount being referred to as a "Contributing Partner"); provided,
however, that if more than one Partner desires to be a Contributing Partner
and to advance a portion of the Defaulted Amount, each such Contributing
Partner shall only advance his or its pro rata portion of the Defaulted
Amount as among all Contributing Partners. Notwithstanding anything
contained in this Agreement to the contrary, each Partner shall have the
right to contribute his or its pro rata portion of any Additional Capital
Contributions (except to the extent such Additional Capital Contribution is
from a New Partner as part of his or its initial contribution to the
capital of the Partnership) pro rata in accordance with his or its then
existing Percentage Interest in order to maintain such Partner's Percentage
Interest in the Partnership.
Section 3.02. Capital Accounts. The amount of a Partner's capital
account ("Capital Account") in the Partnership shall be determined
according to Regulations Section 1.704-(b)(2)(iv), including by:
(a) crediting to such account (i) all contributions to the
Partnership made by or on behalf of such Partner or his or its predecessor
in interest, including the Value of any property contributed (less any
liabilities assumed by the Partnership or to which any property may be
subject) and (ii) all gains and income of the Partnership allocated to such
Partner or his or its predecessor in interest; and
(b) debiting to such account (i) all distributions from the
Partnership made to or on behalf of such Partner or his or its predecessor
in interest, including the Value of any property distributed (less any
liabilities assumed by the Partner or to which any property may be subject)
and (ii) all losses and deductions of the Partnership allocated to such
Partner or his or its predecessor in interest.
Section 3.03. Limited Liability of the Limited
Partners. Notwithstanding anything contained in this Agreement to the
contrary, the liability of each Limited Partner for any of the debts,
losses, or obligations of the Partnership shall be limited to the amount of
the sum of such Limited Partner's capital contributions pursuant to Section
3.01 hereof. Accordingly, no Limited Partner shall be obligated to provide
additional capital to the Partnership or its creditors by way of
contribution, loan, or otherwise beyond the amount of the capital
contributions required of such Limited Partner pursuant to Section 3.01
hereof. Except as provided in the Act, no Limited Partner shall have any
personal liability whatsoever, whether to the Partnership or any third
party, for the debts of the Partnership or any of its losses beyond the
amount of such Limited Partner's capital contributions.
Section 3.04. Treatment of Capital Contributions. Except as provided
in this Agreement to the contrary, no Partner shall be entitled to interest
on his or its contributions to the capital of the Partnership nor shall any
Partner be entitled to demand the return of all or any part of such
contributions to the capital of the Partnership.
Section 3.05. Benefits of Agreement. Nothing in this Agreement, and,
without limiting the generality of the foregoing, in this Article III,
expressed or implied, is intended or shall be construed to give to any
creditor of the Partnership or to any creditor of any Partner or any other
person or entity whatsoever, other than the Partners and the Partnership,
any legal or equitable right, remedy, or claim under or in respect of this
Agreement or any covenant, condition, or provision herein contained, and
such provisions are and shall be held to be for the sole and exclusive
benefit of the Partners and the Partnership.
ARTICLE IV
ACCOUNTING, ALLOCATIONS, AND CURRENT DISTRIBUTIONS
Section 4.01. Percentage Interests. Except as may be adjusted
pursuant to Section 4.02, for purposes of allocating profits and losses in
accordance with Section 4.03, and for purposes of distributions under
Section 4.07, each Partner shall have the percentage interest in the
Partnership (collectively the "Percentage Interests" and individually a
"Percentage Interest") set forth opposite his or its name on the attached
Exhibit A which is made a part of this Agreement for all purposes.
Section 4.02. Adjustments to Percentage Interests.
(a) If (i) any Partner elects to become a Contributing Partner under
Section 3.01(b) and contributes a share of the Defaulted Amount, (ii) more
than a de minimis Additional Capital Contribution is made other than pro
rata by Percentage Interests, as among the Partners, or (iii) a New Partner
is admitted to the Partnership in accordance with Section 5.05 (with each
such event described in Section 4.02(a)(i), (ii), or (iii) being referred
to as an "Adjusting Event"), then the Percentage Interests of the Partners
shall be immediately adjusted such that the Percentage Interest of each
Partner equals a fraction, expressed as a percentage, in which the
numerator equals the Current Value (as defined in Section 4.02(b)) of such
Partner's interest in the Partnership, and the denominator equals the Net
Value of the Partnership Assets (as defined in Section 4.02(b)). If the
Percentage Interests of any Partners are adjusted pursuant to this Section
4.02(a), no Partner shall have the right to modify, rectify, or undo such
adjustments thereafter, and such adjustments shall be made without the need
for any further act or writing to effect any such adjustment. Each Partner
hereby appoints the General Partner as his or its duly authorized agent and
attorney-in-fact for purposes of preparing and executing any amendments to
this Agreement necessary or desirable to reflect any adjustment of
Percentage Interests under this Section 4.02(a). The rights granted to any
Partner under this Section 4.02 shall be such Partner's sole and exclusive
remedy for seeking relief with respect to any Adjusting Event.
(b) For purposes of this Agreement, the "Net Value of the Partnership
Assets" shall mean the net fair market value of all of the Partnership
Assets at the time the Adjusting Event occurs, as determined by the General
Partner in its sole discretion, and such Net Value of the Partnership
Assets shall include the value of the contributions made in connection with
the Adjusting Event. The Partners agree that because of the difficulty of
valuing an interest in the Partnership due to the unique nature of the
Partnership Assets, the General Partner is granted the sole discretion to
determine such values and shall take into account whatever factors it deems
appropriate to reflect such values, including, without limitation, the
dollar value of all contributions to date and any other reasonable methods
for determining the value of all of the Partnership Assets at the time of
the Adjusting Event. Without limiting the foregoing, the General Partner
may deem the Net Value of the Partnership Assets to equal the historical
net cost of those assets. The "Current Value" of any Partner's interest in
the Partnership shall be a dollar amount equal to the sum of (i) an amount
equal to such Partner's Percentage Interest immediately prior to the
Adjusting Event multiplied by the Net Value of the Partnership Assets
determined above excluding the net fair market value (as determined by the
General Partner) of any contributions associated with the Adjusting Event,
plus, (ii) the net fair market value (as determined by the General Partner)
of any contributions made by such Partner associated with the Adjusting
Event. Each Partner's Percentage Interest shall be immediately adjusted to
reflect such valuation by the General Partner, effective as of the date of
such Adjusting Event.
Section 4.03. Tax Status, Reports, and Allocations.
(a) Notwithstanding any provision contained in this Agreement to the
contrary, solely for federal income tax purposes, each of the Partners
hereby recognizes that the Partnership will be subject to all provisions of
Subchapter K of the Code; provided, however, that the filing of United
States Partnership Returns of Income shall not be construed to extend the
purposes of the Partnership or expand the obligations or liabilities of the
Partners.
(b) The General Partner or, at its discretion, an accountant
("Accountant") selected by the General Partner shall prepare or cause to be
prepared all tax returns and statements, if any, that must be filed on
behalf of the Partnership with any taxing authority and shall timely file
such returns or statements.
(c) For accounting and federal and (if any) state income tax
purposes, all income, deductions, credits, gains and losses shall be
allocated to the Partners pro rata in accordance with their respective
Percentage Interests.
Section 4.04. Minimum Gain and Income Offsets.
(a) Definitions.
(i) "Partner Minimum Gain" shall be "partner nonrecourse debt
minimum gain," as defined in Regulations Section 1.704-2(i)(2) and
determined in accordance with Regulations Sections 1.704-2(i)(3) and
1.704-2(k).
(ii) "Partner Nonrecourse Debt" has the meaning set forth in
Regulations Sections 1.704-2(b)(4) and 1.704-2(i).
(iii) "Partner Nonrecourse Deduction" has the meaning set
forth in Regulations Section 1.704-2(i).
(iv) "Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(d) and shall be determined in accordance
with the provisions of Regulations Section 1.704-2(k).
(v) "Regulations" means the temporary and permanent Income Tax
Regulations promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of
succeeding Regulations).
(b) Minimum Gain.
(i) Notwithstanding any other provision of this Agreement to
the contrary, if the Partnership Minimum Gain on the last day of any
fiscal year is less than the Partnership Minimum Gain on the last day
of the immediately preceding fiscal year, then (before any other
allocation of Partnership items for such year under this Agreement,
other than as provided in paragraph (ii) below) there shall be
specially allocated to each Partner items of Partnership income and
gain for such year (and, if necessary, subsequent fiscal years) in an
amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain (determined in accordance with Regulations
Section 1.704-2(g)). The items to be so allocated shall be determined
in accordance with Regulations Sections 1.704-2(f)(6) and
1.704-2(j)(2)(i) and (iii). This Section 4.04(b)(i) is intended to
comply with the minimum gain chargeback requirement in Regulations
Section 1.704-2(f) and shall be interpreted consistently therewith.
(ii) Subsequent to any allocations under Section
4.04(b)(i) above, other than allocations of gain from the disposition
of property subject to Partner Nonrecourse Debt, if Partner Minimum
Gain on the last day of any fiscal year is less than the Partner
Minimum Gain on the last day of the immediately preceding fiscal year,
then, except as provided herein, each Partner shall be specially
allocated items of Partnership income and gain for such year (and, if
necessary, subsequent fiscal years) in an amount equal to that
Partner's share, if any, (determined in accordance with Regulations
Section 1.704-2(i)(4)) of the net decrease in Partner Minimum Gain
(such net decrease to be determined in a manner consistent with the
provisions of Regulations Section 1.704-2(d) and 1.704-2(g)(3)). The
items to be so allocated shall be determined in accordance with the
provisions of Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii)
and (iii). Notwithstanding the foregoing, no such special allocations
of income and gain shall be made to the extent that the net decrease
in Partner Minimum Gain described above arises because the liability
ceases to be Partner Nonrecourse Debt due to a conversion,
refinancing, or other change in the debt instrument that causes it to
become partially or wholly a nonrecourse liability within the meaning
of Regulations Section 1.752-1(a)(2). This Section 4.04(b)(ii) is
intended to comply with the chargeback and other provisions of
Regulations Section 1.704-2(i) and shall be interpreted consistently
therewith.
(c) Qualified Income Offset. Notwithstanding any other provision of
this Agreement, if during any fiscal year any Partner (i) is allocated
pursuant to Code Section 706(d) or Regulations Section 1.751-1(b)(2)(ii)
any loss, items of loss, deductions, or Code Section 705(a)(2)(B)
expenditures, (ii) is distributed any cash or property from the Partnership
and such distributions exceed offsetting increases to such Partner's
Capital Account that are reasonably expected to occur during such year, or
(iii) receives any other adjustment, allocation, or distribution described
in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) and, as a
result of such adjustment, allocation, or distribution, such Partner has a
Qualified Income Offset Amount (as hereinafter defined), then items of
income and gain (including gross income) for such fiscal year or other
period (and, if necessary, subsequent fiscal years) shall (prior to any
allocation pursuant to Section 4.03 hereof) be allocated to such Partner in
an amount equal to his Qualified Income Offset Amount; provided, however,
that any allocation of income or gain shall be required under this sentence
only if and to the extent that such Partner would have a Qualified Income
Offset Amount after all other allocations provided for in this Agreement
have been tentatively made as if Sections 4.04(b) and (c) were not
contained herein. As used herein, the term "Qualified Income Offset
Amount" for a Partner means the excess, if any, of (x) the negative balance
a Partner has in its Capital Account following the adjustment, allocation,
or distribution described in the preceding sentence, over (y) the maximum
amount that it is obligated (or is deemed to be obligated) to restore to
the Partnership upon liquidation as determined in accordance with
Regulations Sections 1.704-2(f), (g), and (i). This Section 4.04(c) is
intended to satisfy the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
Section 4.05. Accounting.
(a) The fiscal year of the Partnership shall end on the last day of
December of each year.
(b) The books of account of the Partnership shall be kept and
maintained at all times at the principal place of business of the
Partnership or at such other place or places approved by the General
Partner. The books of account shall be maintained according to federal
income tax principles using the accrual method of accounting, consistently
applied, and shall show all items of income and expense.
(c) The General Partner shall cause a balance sheet of the
Partnership dated as of the end of the fiscal year and a related statement
of income or loss for the Partnership for such fiscal year to be prepared
by the Accountant and furnished, at the expense of the Partnership, to each
of the Partners on an annual basis, within 90 days after the close of each
fiscal year.
(d) Each Partner shall have the right at all reasonable times during
usual business hours to audit, examine, and make copies of or extracts from
the books of account of the Partnership. Such right may be exercised
through any agent or employee of such Partner designated by it or by an
independent certified public accountant designated by such Partner. Each
Partner shall bear all expenses incurred in any examination made on behalf
of such Partner.
Section 4.06. Bank Accounts. Funds of the Partnership shall be
deposited in a Partnership account or accounts in the bank or banks as
selected by the General Partner. Withdrawals from bank accounts shall only
be made by the General Partner or such other parties as may be approved by
the General Partner.
Section 4.07. Current Distributions to Partners. Except as provided
in Section 6.05 in connection with the termination and liquidation of the
Partnership, the General Partner shall distribute funds at such times and
in such amounts as it may determine, in its sole discretion, provided, that
such funds shall be distributed by the General Partner to the Partners pro
rata in accordance with their respective Percentage Interests at the time
of the distribution. In determining the amount of funds to distribute
pursuant to this Section, the General Partner may consider such factors as
the need to allocate funds to any reserves for Partnership contingencies,
Partnership indebtedness or any other Partnership purposes that the
General Partner deems necessary or appropriate.
Section 4.08. Changes in Percentage Interests. If a Partner's
Percentage Interest changes during any fiscal year, the allocations to be
made pursuant to this Agreement shall be made in accordance with Section
706 of the Code, using any convention permitted by Section 706 of the Code
and the Regulations promulgated thereunder and selected by the General
Partner so as to equitably effectuate the allocations of this Article IV.
ARTICLE V
ASSIGNMENT
Section 5.01. Prohibited Transfers. Except as specifically provided
in this Article V and in Section 7.01, no Limited Partner may sell,
transfer, assign, mortgage, hypothecate, or otherwise encumber or permit or
suffer any encumbrance of all or any part of his or its interest in the
Partnership unless prior written consent is obtained from the General
Partner, and no General Partner may sell, transfer, assign, mortgage,
hypothecate, or otherwise encumber or permit or suffer any encumbrance of
all or any part of his or its interest in the Partnership without obtaining
prior written Approval of the Partners. Any attempt so to transfer or
encumber any such interest shall be null and void, ab initio. The Partners
will be excused from accepting the performance of and rendering performance
to any person other than the Partner hereunder (including any trustee or
assignee of or for such Partner) as to whom such prior written consent has
not been rendered.
Section 5.02. Further Restrictions on Transfer.
(a) In the event of any assignment or transfer permitted under this
Article, the interest so assigned or transferred shall remain subject to
all terms and provisions of this Agreement; the assignee or transferee
shall be deemed, by accepting the interest so assigned or transferred, to
have assumed all the obligations hereunder relating to the interests or
rights so assigned or transferred and shall agree in writing to the
foregoing if requested by the General Partner. Any transferee or assignee
of the interest of a Partner shall be entitled only to receive
distributions hereunder until such transferee or assignee has been admitted
as a Substituted Partner; provided, however, that such transferee or
assignee shall be subject to the Additional Capital Contribution provisions
of Article III and that the Percentage Interest of such transferee or
assignee shall be subject to reallocation pursuant to Section 4.02 in the
event of an Adjusting Event. Until such transferee or assignee (other than
an existing Partner) is admitted to the Partnership as a Substituted
Partner, the Partner transferring all or any portion of his or its interest
to such assignee or transferee shall remain primarily and directly liable
for the performance of all his or its obligations under this Agreement.
After the admission of such assignee or transferee as a Substituted
Partner, such transferor Partner shall only be primarily and directly
liable under this Agreement or otherwise for any obligations or liabilities
accruing prior to the effective time of the admission of such Substituted
Partner, unless such transferor Partner is released in writing from such
obligations or liabilities by the General Partner and such release is
Approved by the Partners.
(b) Any Partner making or offering to make a transfer of all or any
part of his or its interest in the Partnership shall indemnify and hold
harmless the Partnership and all other Partners from and against any costs,
damages, claims, suits, or fees suffered or incurred by the Partnership or
any such other Partner arising out of or resulting from any claims by the
transferee of such Partnership interest or any offerees of such Partnership
interest in connection with such transfer or offer.
Section 5.03. Substituted Partner. Except as otherwise provided in
Section 7.01 hereof, an assignee or transferee (other than an existing
Partner) of the interest of a Partner may be admitted as a substitute
partner ("Substituted Partner") only with the written consent of the
General Partner, which such consent shall be granted or denied in the sole
discretion of the General Partner. Unless the assignee is already a
General Partner, any assignee of a Partnership interest to whose admission
such consent is given shall become and shall have only the rights and
duties of a Limited Partner and the assigned Partnership interest shall
thereafter be a Limited Partner's interest. Upon the receipt by the
General Partner of an appropriate supplement to this Agreement pursuant to
which such Substituted Partner agrees to be bound by all the terms and
provisions of this Agreement, the General Partner shall reflect the
admission of a Substituted Partner and the withdrawal of the transferring
Partner, if appropriate, by preparing a supplemental Exhibit, dated as of
the date of such admission and withdrawal, and by filing it with the
records of the Partnership. Any Substituted Partner shall, if required by
the General Partner, prior to such admission, also execute any other
documents requested by the General Partner, including, without limitation,
an irrevocable power of attorney in form satisfactory to the General
Partner appointing the General Partner as such person's attorney-in-fact
with full power to execute, swear to, acknowledge, and file all
certificates and other instruments necessary to carry out the provisions of
this Agreement, including, without limitation, such undertakings as the
General Partner may require for the payment of all fees and costs necessary
to effect any such transfer and admission. At the General Partner's sole
discretion, the transferor and transferee of the transferred interest shall
be responsible for the costs associated with the transfer of the interest,
including, without limitation, reasonable attorney's fees. Upon admission,
such Substituted Partner shall be subject to all provisions of this
Agreement in the place and stead of his assignor as if the Substituted
Partner originally was a party to this Agreement.
Section 5.04. Basis Adjustment. The Tax Matters Partner may cause,
in its sole and absolute discretion, the Partnership to elect pursuant to
Section 754 of the Code and the Regulations thereunder to adjust the basis
of the Partnership Assets as provided by Sections 743 or 734 of the Code
and the Regulations thereunder.
Section 5.05. Admission of Additional Partners.
(a) When Approved by the Partners, a new Partner (each a "New
Partner") may be admitted to the Partnership; provided, however, that such
New Partner shall (i) be admitted for fair value, as determined by the
General Partner in its reasonable discretion and in a manner consistent
with the reallocation of Percentage Interests set forth in Section 4.02,
and (ii) execute an appropriate supplement to this Agreement and to Exhibit
A pursuant to which he agrees to be bound by all the terms and provisions
of this Agreement.
(b) Upon the receipt of the supplement described in Section 5.05(a),
the General Partner shall reflect the admission of the New Partner and the
reallocation of Percentage Interests by preparing a supplemental or
restated Exhibit A, dated as of the date of such admission, and filing it
with the records of the Partnership. The admission of a New Partner shall
not cause the dissolution of the Partnership. Upon the admission of a New
Partner pursuant to Section 5.05(a), the Percentage Interests shall be
reallocated, with the New Partner receiving the Percentage Interest
calculated in accordance with Section 4.02 that reflects, as determined by
the General Partner in its sole discretion, the ratio of the New Partner's
contribution to the Value of the Partnership Assets, which the General
Partner may determine based on the aggregate Capital Contributions to the
Partnership, and with the Percentage Interests of each existing Partner
being adjusted in accordance with Section 4.02(a)(B).
Section 5.06. Other Restricted Transfers. Notwithstanding any other
provision herein to the contrary, unless prior written consent is given by
the General Partner, no transfer of any interest in the Partnership may be
made to any person who is related (within the meaning of Regulations
Section 1.752-4(b)) to any lender of the Partnership whose loan constitutes
a nonrecourse liability of the Partnership.
ARTICLE VI
WITHDRAWAL, DISSOLUTION, TERMINATION, AND LIQUIDATION
Section 6.01. Withdrawal. No Limited Partner shall at any time
retire or withdraw from the Partnership without obtaining the prior written
consent of the General Partner, and the General Partner shall not at any
time retire or withdraw from the Partnership without obtaining the prior
written Approval of the Partners. Retirement or withdrawal by any Partner
in contravention of this Section 6.01 shall subject such Partner to
liability for all damages caused any other Partner (other than a Partner
who is, at the time of such withdrawal, in default under this Agreement) by
such retirement or withdrawal and the consequential dissolution of the
Partnership.
Section 6.02. Dissolution of the Partnership. The Partnership shall
be dissolved upon the occurrence of any of the following:
(a) The withdrawal, as defined in the Act, of a General Partner,
unless:
(i) the remaining General Partner, if any, elects in
writing within 90 days after such event to reconstitute the
Partnership, to continue as the General Partner, and to continue
the Partnership and its business, or
(ii) if there is no remaining General Partner, within 90
days after such event, the Limited Partners constituting Approval
of the Partners agree to appoint in writing a successor General
Partner, as of the date of the withdrawal of the General Partner,
and agrees to reconstitute the Partnership and to continue the
business of the Partnership, and such successor General Partner
agrees in writing to accept such election; or
(b) The sale or other disposition, not including an exchange, of
substantially all of the assets of the Partnership (except under
circumstances where all or a portion of the purchase price is payable after
the closing of the sale or other disposition);
(c) December 31, 2047; or
(d) Subject to any obligations of the Partnership, when Approved by
the Partners.
Nothing contained in this Section 6.02 is intended to grant to any Partner
the right to dissolve the Partnership at will (by retirement, resignation,
withdrawal, or otherwise) or to exonerate any Partner from liability to the
Partnership and the remaining Partners if he or it dissolves the
Partnership at will.
Section 6.03. Continuation and Reconstitution of Partnership. If the
Partnership is continued as provided in Section 6.02(a)(i) or (ii), then,
as of the date of withdrawal, the General Partner with respect to which an
event of withdrawal under Section 6.02 has occurred (or his or its estate
or successor in interest) (the "Withdrawing General Partner") shall have
none of the powers of a General Partner under this Agreement or applicable
law and shall have only the rights and powers of an assignee of a Partner
hereunder to share in any Partnership profits, losses, gains, and
distributions in accordance with his or its Percentage Interest and shall
have no other rights or powers of a Partner hereunder; provided, however,
that any Withdrawing General Partner shall be subject to the Additional
Capital Contribution provisions of Article III and that the Percentage
Interest of such Withdrawing General Partner shall be subject to
reallocation under Section 4.02 in the event of any Adjusting Event.
Section 6.04. Withdrawal, etc. of a Limited Partner. The withdrawal,
termination (in the case of a Limited Partner that is a partnership or a
trust), dissolution (in the case of a Limited Partner that is a corporation
or limited liability company), retirement, or adjudication as a bankrupt of
a Limited Partner (the "Withdrawing Limited Partner") shall not dissolve
the Partnership, but the rights of such Limited Partner to share in the
profits and losses of the Partnership and to receive distributions of
Partnership funds shall, upon the happening of such an event, pass to the
Limited Partner's successors in interest subject to the Agreement, and the
Partnership shall continue as a limited partnership.
Section 6.05. Termination and Liquidation of the Partnership.
(a) Upon dissolution of the Partnership unless continued pursuant to
Section 6.02, the Partnership shall be terminated as rapidly as business
circumstances will permit. At the direction of the General Partner, or a
Partner approved by the Limited Partners if the dissolution of the
Partnership is caused by the withdrawal of the General Partner (the General
Partner or the other Partner, as the case may be, being herein called the
"Terminating Partner"), a full accounting of the assets and liabilities of
the Partnership shall be taken and a statement of the Partnership Assets
and a statement of each Partner's Capital Account shall be furnished to all
Partners as soon as is reasonably practicable. The Terminating Partner
shall take such action as is necessary so that the Partnership's business
shall be terminated, its liabilities discharged, and its assets distributed
as hereinafter described. The Terminating Partner may sell all of the
Partnership Assets or distribute the Partnership Assets in kind; provided
however, that the Terminating Partner shall ascertain the fair market value
by appraisal or other reasonable means of all Partnership Assets remaining
unsold and each Partner's Capital Account shall be charged or credited, as
the case may be, as if such Partnership Assets had been sold at such fair
market value and the income, gains, losses, deductions, and credits
realized thereby had been allocated to the Partners in accordance with
Article IV hereof. A reasonable period of time shall be allowed for the
orderly termination of the Partnership to minimize the normal losses of a
liquidation process.
(b) After the payment of all expenses of liquidation and of all debts
and liabilities of the Partnership in such order or priority as provided by
law (including any debts or liabilities to Partners, who shall be treated
as secured or unsecured creditors, as may be the case, to the extent
permitted by law, for sums loaned to the Partnership, if any, as
distinguished from capital contributions) and after all resulting items of
Partnership income, gain, credit, loss, or deduction are credited or
debited to the Capital Accounts of the Partners in accordance with Articles
III and IV hereof, all remaining Partnership Assets shall then be
distributed among the Partners in accordance with their relative positive
Capital Account balances. Upon termination, a Partner may not demand and
receive cash in return for such Partner's capital contributions and no
Partner shall have any obligation to restore any deficit that may then
exist in that Partner's Capital Account. Distribution on termination may
be made by the distribution to each Partner of an undivided interest in any
asset of the Partnership that has not been sold at the time of termination
of the Partnership.
Section 6.06. General Partners Not Personally Liable. No General
Partner nor any affiliate of any General Partner shall be personally liable
for the return of the Capital Contributions of any Partner, and such return
shall be made solely from available Partnership Assets, if any, and each
Limited Partner hereby waives any and all claims they may have against any
General Partner or any such affiliate in this regard.
Section 6.07. Provisions Cumulative. All provisions of this
Agreement relating to the dissolution, liquidation, and termination of the
Partnership shall be cumulative to the extent not inconsistent with other
provisions herein; that is, the exercise or use of one of the provisions
hereof shall not preclude the exercise or use of any other provision of
this Agreement to the extent not inconsistent therewith.
ARTICLE VII
GENERAL
Section 7.01. Removal and Replacement of General Partner.
(a) The General Partner may be removed and replaced at any time by
Limited Partners constituting Approval of the Partners by sending the
General Partner a written notice of such removal. In the event of the
removal of the General Partner, a successor General Partner ("Successor
General Partner") shall be selected by Approval of the Partners. With the
Approval of the Partners, the Limited Partners shall have the right to
transfer a portion of their interests to such Successor General Partner and
such interest shall be converted to that of a general partner. The removal
will not be effective until the Successor General Partner has been admitted
to the Partnership as a General Partner, such admission to be by Approval
of the Partners. After the admission of the Successor General Partner, the
Successor General Partner shall have all the rights, powers, and
obligations of a General Partner under this Agreement and all references in
this Agreement to the "General Partner" shall refer to the Successor
General Partner appointed in this Section 7.01. Third parties shall be
conclusively deemed entitled to rely upon the representation of Group 31
that Group 31 is the General Partner unless such third parties have actual
notice of its replacement.
(b) Following the replacement of the General Partner, the Limited
Partners constituting Approval of the Partners may convert such Partner's
interest into a Limited Partner's interest. The Successor General Partner
shall have the authority to execute and file all documents necessary to
signify such conversion. The General Partner hereby appoints the Successor
General Partner as his or its attorney-in-fact to execute and file all
documents signifying such conversion including, without limitation, an
amendment to the Certificate of Limited Partnership.
Section 7.02. Competing Business. Notwithstanding anything to the
contrary contained in or inferable from this Agreement, the Act, or any
other statute or principle of law, neither the Partners nor any of their
shareholders, directors, officers, employees, partners, agents, family
members, or affiliates (each a "Partner Affiliate") shall be prohibited or
restricted in any way from investing in or conducting, either directly or
indirectly, and may invest in and/or conduct, either directly or
indirectly, businesses of any nature whatsoever, including the ownership
and operation of businesses or properties similar to or in the same
geographical area as those held by the Partnership. Any investment in or
conduct of any such businesses by a Partner or any Partner Affiliate shall
not give rise to any claim for an accounting by the other Partners or the
Partnership or any right to claim any interest therein or the profits
therefrom.
Section 7.03. LIMITED PARTNER REPRESENTATIONS. NOTWITHSTANDING
ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, EACH LIMITED PARTNER
HEREBY REPRESENTS AND WARRANTS TO THE PARTNERSHIP, THE GENERAL PARTNER, AND
TO EACH OFFICER, DIRECTOR, SHAREHOLDER, CONTROLLING PERSON, AND AGENT OF
EACH GENERAL PARTNER THAT: (a) THE INTEREST IN THE PARTNERSHIP OF SUCH
LIMITED PARTNER IS ACQUIRED FOR INVESTMENT PURPOSES ONLY FOR HIS OR ITS OWN
ACCOUNT AND NOT WITH A VIEW TO OR IN CONNECTION WITH ANY DISTRIBUTION,
REOFFER, RESALE, OR OTHER DISPOSITION NOT IN COMPLIANCE WITH THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER (THE
"1933 ACT") AND APPLICABLE STATE SECURITIES LAWS; (b) SUCH LIMITED PARTNER,
ALONE OR TOGETHER WITH HIS OR ITS REPRESENTATIVES, POSSESSES SUCH
EXPERTISE, KNOWLEDGE, AND SOPHISTICATION IN FINANCIAL AND BUSINESS MATTERS
GENERALLY, AND IN THE TYPE OF TRANSACTIONS IN WHICH THE PARTNERSHIP
PROPOSES TO ENGAGE IN PARTICULAR, THAT HE OR IT IS CAPABLE OF EVALUATING
THE MERITS AND ECONOMIC RISKS OF ACQUIRING AND HOLDING HIS OR ITS
PARTNERSHIP INTEREST, AND HE OR IT IS ABLE TO BEAR ALL SUCH ECONOMIC RISKS
NOW AND IN THE FUTURE; (c) SUCH LIMITED PARTNER HAS HAD ACCESS TO ALL OF
THE INFORMATION WITH RESPECT TO THE INTEREST ACQUIRED BY HIM OR IT UNDER
THIS AGREEMENT THAT HE OR IT DEEMS NECESSARY TO MAKE A COMPLETE EVALUATION
THEREOF AND HAS HAD THE OPPORTUNITY TO QUESTION THE GENERAL PARTNER
CONCERNING SUCH INTEREST; (d) SUCH LIMITED PARTNER'S DECISION TO ACQUIRE
HIS OR ITS INTEREST FOR INVESTMENT HAS BEEN BASED SOLELY UPON THE
EVALUATION MADE BY HIM OR IT; (e) SUCH LIMITED PARTNER IS AWARE THAT HE OR
IT MUST BEAR THE ECONOMIC RISK OF HIS OR ITS INVESTMENT IN THE PARTNERSHIP
FOR AN INDEFINITE PERIOD OF TIME BECAUSE INTERESTS IN THE PARTNERSHIP HAVE
NOT BEEN REGISTERED UNDER THE 1933 ACT OR UNDER THE SECURITIES LAWS OF ANY
STATES, AND, THEREFORE, CANNOT BE SOLD UNLESS SUCH INTERESTS ARE
SUBSEQUENTLY REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE; (f) SUCH
LIMITED PARTNER IS AWARE THAT ONLY THE PARTNERSHIP CAN TAKE ACTION TO
REGISTER SUCH INTEREST IN THE PARTNERSHIP AND THE PARTNERSHIP IS UNDER NO
SUCH OBLIGATION AND DOES NOT PROPOSE TO ATTEMPT TO DO SO; AND (g) SUCH
LIMITED PARTNER IS AWARE THAT THIS AGREEMENT PROVIDES RESTRICTIONS ON THE
ABILITY OF A LIMITED PARTNER TO SELL, TRANSFER, ASSIGN, MORTGAGE,
HYPOTHECATE, OR OTHERWISE ENCUMBER HIS OR ITS INTEREST IN THE PARTNERSHIP.
Section 7.04. Notice.
(a) All notices, demands, or requests provided for or permitted to be
given pursuant to this Agreement must be in writing.
(b) All notices, demands, and requests to be sent to a Partner
pursuant to this Agreement shall be deemed to have been properly given or
served if: (i) personally delivered, (ii) deposited prepaid for next day
delivery by Federal Express, or other similar overnight courier services,
addressed to such Partner, (iii) deposited in the United States mail,
addressed to such Partner, prepaid and registered or certified with return
receipt requested, or (iv) transmitted via telecopier or other similar
device to the attention of such Partner.
(c) All notices, demands, and requests so given shall be deemed
received: (i) when personally delivered, (ii) 24 hours after being
deposited for next day delivery with an overnight courier, (iii) 48 hours
after being deposited in the United States mail, or (iv) 12 hours after
being telecopied or otherwise transmitted and receipt has been confirmed.
(d) The Partners shall have the right from time to time, and at any
time during the term of this Agreement, to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America by giving to the other parties
at least 30 days written notice thereof, in the manner prescribed in
Section 7.04(b); provided however, that to be effective, any such notice
must be actually received (as evidenced by a return receipt).
(e) All distributions to any Partner shall be made at the address at
which notices are sent unless otherwise specified in writing by any such
Partner.
Section 7.05. Amendments. Amendments and supplements may be made to
or restatements made of this Agreement or the Certificate of Limited
Partnership (or any exhibits or schedules attached to any of them), from
time to time by the General Partner, without the consent of any of the
other Partners, to effect any amendments which amend this Agreement to
reflect adjustments to the Percentage Interests of the Partners following
an Adjusting Event or as otherwise provided in Section 4.02 hereof, to
reflect other transfers, assignments, admissions, withdrawals, conversions,
or other actions authorized by this Agreement, or to effect any
non-material amendments to this Agreement or the Certificate of Limited
Partnership. All other amendments to this Agreement and the Certificate of
Limited Partnership shall require Approval of the Partners; provided,
however, that no material amendment which has an adverse effect on a
Partner's interest in the Partnership shall be made without the consent of
such Partner except as otherwise specifically provided herein.
Section 7.06. Powers of Attorney. Each Limited Partner hereby
constitutes and appoints the General Partner, with full power of
substitution, as his or its true and lawful attorney-in-fact and empowers
and authorizes such attorney, in the name, place, and stead of such Limited
Partner, to make, execute, sign, swear to, acknowledge, and file in all
necessary or appropriate places all documents (and all amendments or
supplements to or restatements of such documents necessitated by valid
amendments to or actions permitted under this Agreement) relating to the
Partnership and its activities, including, without limitation: (a) this
Agreement and any amendments hereto approved as provided herein, (b) the
Certificate of Limited Partnership and any amendments thereto, under the
laws of the State of Delaware or in any other state or jurisdiction in
which such filing is deemed advisable by the General Partner, (c) any
applications, forms, certificates, reports, or other documents, or
amendments thereto which may be requested or required by any federal,
state, or local governmental agency, securities exchange, securities
association, self-regulatory organization, or similar institution and which
are deemed necessary or advisable by the General Partner, (d) any other
instrument which may be required to be filed or recorded in any state or
county or by any governmental agency, or which the General Partner deems
advisable to file or record, including, without limitation, certificates of
assumed name and documents to qualify foreign limited partnership in other
jurisdictions, (e) any documents which may be required to effect the
continuation of the Partnership, the admission of new partners, substituted
partners, the withdrawal of any Partner, or the dissolution and termination
of the Partnership, (f) making certain elections contained in the Code or
state law governing taxation of limited partnership, (g) any and all
reports, schedules, certificates, forms and other documents, including, but
not limited to, Schedules 13D and 13F, Forms 3 and 4, and any other such
forms as may be required to be filed by the Partnership under the
Securities Exchange Act of 1934, Federal Reserve U-1s, notes, drafts,
credit or loan agreements, financing statements, security agreements, bank
resolutions, and any and all other documents and instruments as may be
necessary or desirable in the sole discretion of the attorney so acting,
all in carrying out the purposes of the Partnership, and (h) performing any
and all other ministerial duties or functions necessary for the conduct of
the business of the Partnership. Each Limited Partner hereby ratifies,
confirms, and adopts as his own, all actions that may be taken by such
attorney-in-fact pursuant to this Section 7.06. Each Limited Partner
acknowledges that this Agreement permits certain amendments to be made and
certain other actions to be taken or omitted to be taken by less than all
of the Partners if approved in accordance with the provisions hereof. By
their execution hereof, each Limited Partner also grants the General
Partner a power of attorney to execute any and all documents necessary to
reflect any action that is in accordance with the provisions hereof. This
power of attorney is coupled with an interest and shall continue
notwithstanding the subsequent incapacity or death of the Limited Partner.
Each Limited Partner shall execute and deliver to the General Partner an
executed and appropriately notarized power of attorney in such form
consistent with the provisions of this Section 7.06 as the General Partner
may request.
Section 7.07. GOVERNING LAWS AND VENUE. THIS AGREEMENT IS MADE IN
FORT WORTH, TARRANT COUNTY, TEXAS, AND THE RIGHTS AND OBLIGATIONS OF THE
PARTNERS HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. ALL MATTERS LITIGATED BY,
AMONG, OR BETWEEN ANY OF THE PARTNERS THAT INVOLVE THIS AGREEMENT, THE
RELATIONSHIP OF THE PARTNERS, OR ANY RELATED DOCUMENTS OR MATTERS HEREUNDER
SHALL BE BROUGHT ONLY IN FORT WORTH, TARRANT COUNTY, TEXAS.
Section 7.08. Rule of Construction. The general rule of construction
for interpreting a contract, which provides that the provisions of a
contract should be construed against the party preparing the contract, is
waived by the parties. Each party acknowledges that he or it was
represented by separate legal counsel in this matter who participated in
the preparation of this Agreement or he or it had the opportunity to retain
counsel to participate in the preparation of this Agreement but chose not
to do so.
Section 7.09. Entire Agreement. This Agreement, including all
exhibits to this Agreement and, if any, exhibits to such exhibits, contains
the entire agreement among the parties relative to the matters contained in
this Agreement.
Section 7.10. Waiver. No consent or waiver, express or implied, by
any Partner to or for any breach or default by any other Partner in the
performance by such other Partner of his or its obligations under this
Agreement shall be deemed or construed to be a consent or waiver to or of
any other breach or default in the performance by such other Partner of the
same or any other obligations of such other Partner under this Agreement.
Failure on the part of any Partner to complain of any act or failure to act
of any of the other Partners or to declare any of the other Partners in
default, regardless of how long such failure continues, shall not
constitute a waiver by such Partner of his or its rights hereunder.
Section 7.11. Severability. If any provision of this Agreement or
the application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not
be affected thereby, and the intent of this Agreement shall be enforced to
the greatest extent permitted by law.
Section 7.12. Binding Agreement. Subject to the restrictions on
transfers and encumbrances set forth in this Agreement, this Agreement
shall inure to the benefit of and be binding upon the undersigned Partners
and their respective legal representatives, successors, and assigns.
Whenever, in this Agreement, a reference to any party or Partner is made,
such reference shall be deemed to include a reference to the legal
representatives, successors, and assigns of such party or Partner.
Section 7.13. Tense and Gender. Unless the context clearly indicates
otherwise, the singular shall include the plural and vice versa. Whenever
the masculine, feminine, or neuter gender is used inappropriately in this
Agreement, this Agreement shall be read as if the appropriate gender was
used.
Section 7.14. Captions. Captions are included solely for convenience
of reference and if there is any conflict between captions and the text of
this Agreement, the text shall control.
Section 7.15. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original for all
purposes and all of which when taken together shall constitute a single
counterpart instrument. Executed signature pages to any counterpart
instrument may be detached and affixed to a single counterpart, which
single counterpart with multiple executed signature pages affixed thereto
constitutes the original counterpart instrument. All of these counterpart
pages shall be read as though one and they shall have the same force and
effect as if all of the parties had executed a single signature page.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Each of the
undersigned has executed and delivered this Agreement to be effective as of
the Effective Date.
GENERAL PARTNER
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ GROUP 31, INC., a Texas corporation
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By:
Title:
LIMITED PARTNERS
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC., a Texas corporation
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By:
Title:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ FW STRATEGIC PARTNERS, L.P., a
Suite 3100 Delaware limited partnership
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By: FW Strategic Asset Management,
L.P.,
general partner
By: Strategic Genpar, Inc.,
general
partner
By:
Title:
FW INTEGRATED ORTHOPAEDICS
COINVESTMENT PARTNERS, L.P.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ a Delaware limited partnership
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By: Group 31, Inc., general partner
By:
Title:
EXHIBIT A
TO THE
LIMITED PARTNERSHIP AGREEMENT
OF
FW INTEGRATED ORTHOPAEDIC INVESTORS, L.P.
INITIAL CAPITAL PERCENTAGE
GENERAL PARTNER CONTRIBUTION INTEREST
Group 31 $ 125,000 1.00%
LIMITED PARTNER
Keystone . $ 5,000,000 40.00%
Strategic $ 6,000,000 48.00%
Coinvestors $ 1,375,000 11.00%
Total $ 12,500,000 100.00%
