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Exhibit
3.25
AGREEMENT FOR JMG
OIL & GAS, LP
an Oklahoma Limited
Partnership
Dated January 28,
2005
TABLE OF
CONTENTS
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ARTICLE I ORGANIZATION
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Section 1.1. Formation
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2 |
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Section 1.2. Certificate of Limited
Partnership
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ARTICLE II CHARACTER, PLACE OF BUSINESS
AND TERM OF PARTNERSHIP
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Section 2.1. Character of
Business
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Section 2.2. Place of
Business
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Section 2.3. Term
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ARTICLE III CAPITAL
CONTRIBUTIONS
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Section 3.1. General Partner
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Section 3.2. Limited Partners
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Section 3.3. Interest
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Section 3.4. Units
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Section 3.5. Scope of Limited Partner
Liability
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ARTICLE IV PROFITS, LOSSES AND
ACCOUNTING
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Section 4.1. Allocation of Profits and
Losses
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Section 4.2. Accounting
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Section 4.3. Partner’s Capital
Accounts
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ARTICLE V POWERS, DUTIES, LIABILITIES,
AND COMPENSATION OF GENERAL PARTNER
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Section 5.1. Powers of General
Partner
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Section 5.2. Duties of General
Partner
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Section 5.3. Liabilities of General
Partner
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11 |
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Section 5.4. Compensation of General
Partner
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Section 5.5. Reliance on Act of General
Partner
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ARTICLE VI RIGHTS, PROHIBITIONS AND
LIABILITIES OF LIMITED PARTNER
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Section 6.1. Rights of the Limited
Partners
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Section 6.2. Prohibitions with Respect
to the Limited Partners
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ARTICLE VII DISTRIBUTIONS AND PAYMENTS
TO PARTNERS
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Section 7.1. Distributions
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Section 7.2. Withdrawal
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ARTICLE VIII TRANSFERS OF
UNITS
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Section 8.1. General Partner
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Section 8.2. Limited Partners
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Section 8.3. Transferees
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Section 8.4. Absolute
Restriction
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Section 8.5. Permitted
Transfer
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ARTICLE IX PURCHASE OPTION
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Section 9.1. Purchase Option
Event
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Section 9.2. Purchase Option
Notice
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Section 9.3. Partner’s Purchase
Option
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Section 9.4. Valuation of Selling
Partner’s Interest
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Section 9.5. Closing
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Section 9.6. Payment of Purchase
Price
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Section 9.7. Effect of Closing on
Partner’s Interest
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Section 9.8. Failure to Exercise
Purchase Option
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Section 9.9. Damage
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ARTICLE X TERMINATION OF THE
PARTNERSHIP
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Section 10.1. Termination
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Section 10.2. Payment of
Debts
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Section 10.3. Payment to
Partners
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Section 10.4. Distribution
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Section 10.5. Reserve
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Section 10.6. Final
Accounting
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ARTICLE XI AMENDMENTS
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Section 11.1. Authority to
Amend
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Section 11.2. Notice of
Amendments
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ARTICLE XII POWER OF ATTORNEY
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Section 12.1. Power
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Section 12.2. Survival of
Power
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ARTICLE XIII NEGOTIATION, MEDIATION AND
ARBITRATION
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Section 13.1. Disputes Subject to
Negotiation, Mediation and Arbitration
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Section 13.2. Negotiation
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Section 13.3. Mediation
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Section 13.4. Arbitration
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Section 13.5. Confidentiality
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Section 13.6. Exclusive
Procedures
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Section 13.7. Costs
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Section 13.8. Issues of
Arbitrabillty
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Section 13.9. Limitations on
Actions
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Section 13.10. Covered
Parties
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Section 13.11. Severability
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ARTICLE XIV MISCELLANEOUS
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Section 14.1. Governing Law
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Section 14.2. greernent for Further
Execution
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Section 14.3. Entire Agreeni
cut
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Section 14.4. Severabillt
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Section 14.5. Notices
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Section 14.6. Tax Election
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ii
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Section 14.7. Tax Matters
Partner
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Section 14.8. Titles and
Captions
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Section 14.9. Pronouns
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iii
AGREEMENT FOR JMG
OIL & GAS LP
THIS LIMITED PARTNERSHIP
AGREEMENT (“Agreement”) is made and entered into on the
28th day of January, 2005, by and between J. M. Graves, L.L.C., an
Oklahoma Limited Liability Company, successor to Paul Korte, the
original General Partner, (the “General Partner”) and
those persons who execute this Agreement as limited partners
(hereinafter referred to collectively, whether one or more, as the
“Limited Partners”) (the General Partner and the
Limited Partners being sometimes hereinafter collectively called
the “Partners” and sometimes individually a
“Partner”).
PURPOSE OF THE
PARTNERSHIP
The purpose of this
Partnership is to accomplish the following:
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1. |
To consolidate in this entity all the Oil and Gas properties
held by J. M. Graves for the operation and administration thereof
and for the conduct of any other business or businesses that the
General Partner deems proper and authorized pursuant to the
Act. |
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2. |
To insulate from the liabilities inherent in Oil and Gas
operations other assets held by J. M. Graves. |
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3. |
To provide a vehicle to administer the Oil and Gas properties
in the event of the incapacity of a Partner. |
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4. |
To provide a vehicle that allows the family and beneficiaries
of J. M. Graves to participate in the management of the Oil and Gas
properties during his lifetime. |
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5. |
To provide a vehicle for the orderly transfer of the Oil and
Gas properties on the death of a Partner. |
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6. |
To provide a vehicle for the management of the Oil and Gas
properties by persons of various skills and to diminish
administrative costs. |
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7. |
To provide a vehicle to keep the Oil and Gas properties intact
for the benefit of J. M. Graves, his family and his
beneficiaries. |
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8. |
To provide a vehicle to resolve disputes among the
partners. |
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9. |
To provide a method by which the beneficial interest in the Oil
and Gas properties may be conveniently transferred to and among the
partners and their families. |
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10. |
To protect the value of the Oil and Gas properties held by the
Partners from the claims of creditors and other third
parties. |
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11. |
To diminish the cost of transferring the Oil and Gas properties
on the death of a Partner. |
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12. |
To protect the value of the Oil and Gas properties from the
claims of family members who are not beneficiaries of J. M.
Graves. |
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13. |
To provide a procedure to restrict the admission of
Partners. |
In recognition of the
foregoing and in consideration of the mutual covenants contained
herein, the Partners hereby agree as follows:
ARTICLE I
ORGANIZATION
Section 1.1.
Formation . The Partners hereby form a limited
partnership (the “Partnership”) under the provisions of
Okla. Stat. Ann. tit . 54, §§ 301-365 (the
“Act”) on the terms and conditions hereinafter set
forth, and agree to conduct such business under the name and style
of “JMG Oil & Gas, LP.”
Section 1.2.
Certificate of Limited Partnership . The General Partner
has executed a Certificate of Limited Partnership and has caused
the same to be filed as required in accordance with the laws of the
state of Oklahoma.
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ARTICLE II
CHARACTER, PLACE OF
BUSINESS AND TERM OF PARTNERSHIP
Section 2.1. Character
of Business . The Partnership has been organized to carry
on any business that a partnership without limited partners may
carry on, except to carry on business as a bank or domestic
insurer. To consummate the foregoing and to carry out the
obligations of the Partnership in connection therewith or
incidental thereto and to further the Purpose of the Partnership,
the General Partner shall have the authority, in accordance with
and subject to the limitations set forth in Article V hereof, to
cause the Partnership: to borrow money and to make and issue notes,
obligations and evidences of indebtedness of all kinds, whether
secured by mortgage, pledge or otherwise, and to secure the same by
mortgage, pledge or otherwise; to make, enter into, perform and
carry out any arrangements, contracts and/or agreements of every
kind for any lawful purpose without limit as to amount or
otherwise, with any corporation, association, partnership, firm,
trustee, syndicate, individual and/or any political or governmental
division or subdivision, domestic or foreign; and generally to make
and perform agreements and contracts of every kind and description
and to do any and all things necessary or incidental to the
foregoing for the protection and enhancement of the assets of the
Partnership.
Section 2.2. Place of
Business . The principal office of the Partnership shall be
located at 2455 East 51 st Street, Tulsa, Oklahoma 74105, or such other place as the
General Partner may from time to time determine. The Partnership
may also maintain such other offices at such other places as the
General Partner may from time to time determine.
Section 2.3. Term
. The Partnership shall commence on the date that the
Certificate of Limited Partnership is duly filed as required by
Oklahoma law and shall continue in perpetuity unless it is earlier
dissolved or terminated pursuant to law or the provisions of this
Agreement.
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ARTICLE III
CAPITAL
CONTRIBUTIONS
Section 3.1. General
Partner . The General Partner has contributed or will
contribute capital to the Partnership as more fully set forth in
Exhibit “A”, valued as set forth therein.
Section 3.2. Limited
Partners . The Limited Partners have contributed or will
contribute capital to the Partnership as more fully set forth in
Exhibit “A,” valued as set forth therein.
Section 3.3.
Interest . No interest shall be paid by the Partnership
on the capital contributions of any Partner.
Section 3.4. Units
. The Partnership shall issue Units representing a
Partner’s interest in the Partnership. One Unit shall be
issued for each One Dollar ($1.00) of cash, property or note or
other obligation to contribute cash or property to the Capital of
the Partnership a partner so contributes to the Partnership. Each
Unit shall have one vote on each matter brought before the
Partnership.
Section 3.5. Scope of
Limited Partner Liability . Except as otherwise provided by
this Agreement, the Limited Partners shall not be liable for the
debts, liabilities, contracts or other obligations of the
Partnership. Except as otherwise provided by this Agreement, or
applicable state Law, a Limited Partner shall be liable only to
make the capital contribution described herein and shall not be
required to lend any funds to the Partnership or, after the
required capital contribution has been made, to make any additional
contributions to the Partnership.
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ARTICLE IV
PROFITS, LOSSES AND
ACCOUNTING
Section 4.1. Allocation
of Profits and Losses .
(a) Except as otherwise
provided herein, all items of income, gain, loss, deduction or
credit of the Partnership shall be allocated between or borne by
the Partners in accordance with their respective Units in the
partnership.
(b) Notwithstanding any
provision of this Agreement to the contrary, to the extent required
by law, income, gain, loss, and deduction attributable to property
contributed to the Partnership by a Partner shall be allocated
between the Partners so as to take into account any variation
between the tax basis of the property and the fair market value
thereof at the time of contribution, in accordance with the
requirements of Section 704 © ) of the Internal Revenue Code of
1986 (the “Code”), or its counterpart in any
subsequently enacted Internal Revenue Code, and the applicable
Treasury Regulations (the “Regulations”) thereunder, as
more fully described in Exhibit “B” hereto.
(c) Partnership profits,
losses and gains shall be allocated among the Partners in
accordance with the portion of the year during which the Partners
have held their respective Units. All items of income and loss
shall be considered to have been earned ratably over the fiscal
year of the Partnership, except that gains and losses arising from
the disposition of assets shall be taken into account as of the
date thereof.
(d) Notwithstanding any
provision of this Agreement to the contrary, in the event the
Partnership is entitled to a deduction for imputed interest under
any provision of the Code on any loan or advance from a Partner,
such deduction shall be allocated solely to such
Partner.
(e) Notwithstanding any
provision of this Agreement to the contrary, if there is a net
decrease in Partnership Minimum Gain during any Partnership fiscal
year, Partners who would
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otherwise have an Adjusted Deficit
Capital Account Balance at the end of such year shall be specially
allocated items of Partnership income and gain for such year (and,
if necessary, subsequent years) in an amount and manner sufficient
to eliminate such Adjusted Deficit Account Balance as quickly as
possible. The items to be so allocated shall be determined in
accordance with Section 1.704-2(f) of the Regulations.
“Partnership Minimum Gain” shall have the same meaning
as is ascribed thereto in Section 1.704-2(g) of the
Regulations. “Adjusted Deficit Capital Account Balance”
shall mean the deficit balance of a Partner’s capital account
in excess of the amount of the deficit, if any, the Partner is
obligated to contribute to the Partnership under this Agreement or
is deemed obligated to restore pursuant to the Regulations under
Code Section 704(b).
(f) Notwithstanding any
provision of this Agreement to the contrary, to the extent the
payment of any expenditure by the Partnership is treated as a
distribution to a Partner for federal income tax purposes, there
shall be a gross income allocation to such Partner in the amount of
such distribution.
(g) Notwithstanding any
provision of this Agreement to the contrary, if items of income or
gain to be allocated include income or gain treated as ordinary
income for federal income tax purposes because it is attributable
to the recapture of depreciation under Section 1245 or 1250 of
the Code, such income or gain, to the extent treated as ordinary
income, shall be allocated to and reported by the Partners in
proportion to their then respective cumulative allocations of
depreciation.
(h) Notwithstanding any
provision of this Agreement to the contrary, except as provided in
subsection 4.1(f) hereof, in the event any Partner unexpectedly
receives any adjustments, allocations, or distributions described
in Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6)
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of the Regulations, items of Partnership
income and gain shall be specially allocated to such Partner in an
amount and manner sufficient to eliminate as quickly as possible
the Adjusted Deficit Capital Account Balance in the Partner’s
capital account created by such adjustments, allocations, or
distributions. Any special allocations of items of income or gain
pursuant to this subsection 4.1(h) shall be taken into account in
computing subsequent allocations of other net profits, net losses
and items thereof pursuant to this Section 4.1, so that the
net amount of any items so specially allocated pursuant to this
subsection 4.1(h) and the other net profits, net losses and all
other items allocated to the Partner pursuant to this
Section 4.1 shall, to the extent possible, be equal to the net
amount that would have been allocated to the Partner pursuant to
the provisions of this Section 4.1 had such unexpected
adjustments, allocations or distributions not occurred.
(i) Except as provided in
subsection 4.1(f) above, in the event any Limited Partner has an
Adjusted Deficit Capital Account Balance at the end of any
Partnership fiscal year which is in excess of the sum of
(i) the amount the Limited Partner is obligated to restore
pursuant to any provision of this Agreement, and (ii) the
amount the Limited Partner is deemed to be obligated to restore
pursuant to the penultimate sentence of
Section 1.704-1(b)(4)(iv)(f) of the Regulations, such Limited
Partner shall be specially allocated items of Partnership income
and gain in the amount of such excess as quickly as
possible.
Section 4.2.
Accounting .
(a) The Partnership books
shall be kept on the accrual basis and in accordance with
reasonable accounting principles consistently applied.
(b) The fiscal year of the
Partnership shall end on December 31.
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(c) The terms “net
profits” and “net losses,” as used herein, shall
mean the net amount of the Partnership’s profits and losses,
as determined for federal income tax purposes, and shall also
include each Partner’s share of income described in
Section 705(a)(1)(B) of the Code, any expenditures described
in Section 705(a)(2)(B) of the Code, any expenditures
described in Section 709(a) of the Code which are not deducted
or amortized in accordance with Section 709(b) of the Code,
basis adjustments required pursuant to Section 48(q) of the
Code and losses not deductible pursuant to Section 267(a) or
707(b) of the Code.
Section 4.3.
Partner’s Capital Accounts .
(a) There shall be maintained
a capital account for each Partner in accordance with this
Section 4.3 and the principles set forth in Exhibit
“C” hereto. The amount of each Partner’s
contribution of cash and property to the capital of the Partnership
shall be credited to such Partner’s capital account, and from
time to time, but not less often than quarterly, the share of each
Partner in profits, losses and distributions shall be credited or
charged, as the case may be, to such Partner’s capital
account. The determination of a Partner’s capital account,
and any adjustments thereto, shall be made consistently with tax
accounting and other principles set forth in Section 704(b) of
the Code and applicable Regulations thereunder.
(b) If, at any time, the
Partnership shall suffer a loss as a result of which the capital
account of any Partner shall be a negative amount, such loss shall
be carried as a charge against that Partner’s capital
account, and that Partner’s share of subsequent profits of
the Partnership shall be applied to restore such capital account
deficit.
(c) Immediately following the
transfer of any Unit, the capital account of the transferee Partner
shall be equal to the capital account of the transferor Partner
attributable to the transferred Unit.
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(d) For purposes of computing
the amount of any item of income, gain, deduction or loss to be
reflected in the Partners’ capital accounts, the
determination, recognition and classification of any such item
shall be the same as its determination, recognition and
classification for federal income tax purposes, taking into account
any adjustments required pursuant to Section 704(b) of the
Code and the applicable Regulations thereunder, as more fully
described in Exhibit “C” hereof.
ARTICLE V
POWERS, DUTIES,
LIABILITIES, AND COMPENSATION OF GENERAL PARTNER
Section 5.1. Powers of
General Partner . The General Partner shall manage or cause
to be managed, and shall have ultimate control of, the business and
affairs of the Partnership and shall make all decisions affecting
the business and assets of the Partnership and, without limitation,
shall have the power to:
(a) authorize or approve all
actions with respect to: (i) distributions out of the
Partnership; (ii) the acquisition, encumbering or disposition
of properties or leases; and (iii) the borrowing of funds and
the execution of contracts, bonds, guarantees, notes, mortgages and
all other instruments to effect the purposes of this Agreement;
provided, however, that: (1) the consent of Limited Partners
owning a majority of the Units in the Partnership shall be required
before the Partnership may (A) enter into a binding agreement
for the sale, exchange, leasing (other than in the ordinary course
of the Partnership’s business) or other disposition of
substantially all of the assets of the Partnership, (B) bring
about the dissolution and winding up of the limited partnership or
continuation of the business of the limited partnership upon the
occurrence of any event which otherwise requires the winding up and
termination of its affairs, (C) bring about the admission or
removal of a general partner, or (D) make an amendment to
the
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partnership agreement or certificate of
limited partnership; and (2) cash distributions shall be
governed by the provisions of Article VII hereof; and
(b) employ such persons,
firms or corporations for the conduct of the business of the
Partnership to act in such capacities and with such titles as shall
be deemed by the General Partner to be necessary or desirable,
including, but not limited to, contractors, accountants and
attorneys, on such terms and for such reasonable compensation as is
paid in the Tulsa, Oklahoma area, notwithstanding the fact that any
Partner may have a financial interest in such entities.
The General Partner also
shall possess those additional powers specifically designated in
this Agreement, under law, and powers delegated to it from time to
time by the Limited Partners.
Section 5.2. Duties of
General Partner .
(a) The General Partner,
subject to the limitations contained in Section 5.1 hereof,
shall manage or cause to be managed the affairs of the Partnership
in a prudent and businesslike manner and shall devote such part of
its time, effort and personnel to the Partnership affairs as is
reasonably necessary for the conduct of such affairs.
(b) In carrying out its
obligations, the General Partner shall:
(i) render periodic reports
to all Partners with respect to the operations of the Partnership
on at least an annual basis;
(ii) on or before
March 15th of every year, mail to all persons who were
Partners at any time during the Partnership’s prior fiscal
year an annual certified report of the Partnership, including all
necessary tax information, a report of a firm of certified public
accountants containing reviewed financial statements, and any other
information regarding the Partnership and its operations during the
prior fiscal year deemed by the General Partner to be
material;
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(iii) obtain and maintain
such casualty insurance and such public liability and other
insurance as may be available and it deems necessary or
appropriate;
(iv) deposit all funds of the
Partnership in one or more separate bank accounts in the name of
the Partnership with such banks or trust companies as it may
designate (withdrawals from such bank accounts to be made upon the
signature of such persons as shall be designated by the General
Partner);
(v) maintain complete and
accurate records of all properties owned or leased by the
Partnership and complete and accurate books of account (containing
such information as shall be necessary to record allocations and
distributions), and make such records and books of account
available for inspection and audit by any Partner or such
Partner’s duly authorized representative (at the expense of
such Partner) during regular business hours and at the principal
office of the Partnership; and
(vi) cause to be filed such
certificates and do such other acts as may be required by law to
qualify and maintain the Partnership as a limited partnership
formed under the laws of the state of Oklahoma and doing business
in the appropriate states, copies of which certificates shall be
filed with the records of the Partnership.
Section 5.3.
Liabilities of General Partner . In carrying out its
duties hereunder, the General Partner shall not be liable to the
Partnership or to any other Partner for any actions taken in good
faith and reasonably believed to be in the best interests of the
Partnership, or for errors of judgment, but the General Partner
shall be liable for willful misconduct, breach of the General
Partner’s fiduciary duties or breach of this
Agreement.
Section 5.4.
Compensation of General Partner . The General Partner
shall receive reasonable compensation for services rendered to the
Partnership and shall be reimbursed for its
11
expenses incurred on behalf of and for
the benefit of the Partnership. Reasonable compensation shall be
.
Section 5.5. Reliance
on Act of General Partner . No financial institution or any
other person, firm or corporation dealing with the General Partner
or the Partnership shall be required to ascertain whether the
General Partner is acting in accordance with this Agreement, but
such financial institution or such other person, firm or
corporation shall be protected in relying solely upon the deed,
transfer, or assurance of and the execution of such instrument or
instruments by the General Partner.
ARTICLE VI
RIGHTS, PROHIBITIONS AND
LIABILITIES OF LIMITED PARTNER
Section 6.1. Rights of
the Limited Partners .
(a) The Limited Partners
shall in no way be restricted or prohibited from engaging, or
owning an interest, in any other business venture of any nature,
including any venture which might be competitive with the business
of the Partnership, and the Partnership may engage any of the
Limited Partners or persons associated with a Limited Partner for
specific purposes and may otherwise deal with any of the Limited
Partners on terms and for compensation to be agreed upon by the
Limited Partner and the Partnership; provided, however, that none
of the Limited Partners shall be entitled to participate in the
control of the business of the Partnership except to the extent
contemplated by the Act.
(b) The Limited Partners
shall be entitled to have the Partnership books, and such
certificates as may be required by law to qualify and maintain the
Partnership as a limited partnership under the laws of the state of
Oklahoma, kept at the principal place of business of the
Partnership and at all times, during reasonable business hours and
at the Limited Partners’ sole expense, shall be entitled to
inspect and copy any of them and have on demand true and
full
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information regarding the state of the
business and financial condition of the Partnership. The Limited
Partners shall also be entitled to receive a copy of the
Partnership’s federal, state and local income tax returns and
reports for each year, promptly after such returns and reports
become available, true and frill information of all other things
affecting the Partnership, and a formal accounting of Partnership
affairs whenever circumstances render it just and
reasonable.
Section 6.2.
Prohibitions with Respect to the Limited Partners . The
Limited Partners shall not have the right:
(a) to take part in the
control of the Partnership business or to sign for or to bind the
Partnership, such power being vested solely in the General
Partner;
(b) to have the Limited
Partners’ capital contributions repaid except to the extent
provided in this Agreement;
(c) to require partition of
Partnership property or to compel any sale or appraisement of
Partnership assets or sale of a deceased Partner’s interests
therein; or
(d) to sell or assign a
Limited Partner’s Units or to constitute the vendee or
assignee thereunder a Substitute Limited Partner, except as
provided in Article VIII hereof
ARTICLE VII
DISTRIBUTIONS AND PAYMENTS
TO PARTNERS
Section 7.1.
Distributions .
(a) The Cash Flow (as
hereinafter defined) of the Partnership shall be distributed from
time to time as the General Partner shall determine.
Notwithstanding the foregoing, the General Partner shall distribute
to the Partners all amounts of cash which the General Partner, in
its sole judgment, deems necessary to allow the Partners to pay all
federal and state income taxes associated with the income of the
Partnership. Such distribution shall be mandatory and shall be made
on or before the due date of each quarterly estimate of federal
income tax. All distributions
13
shall be made to the Partners pro rata,
according to the number of Units held by each Partner, with all
outstanding Units being treated alike. The term “Cash
Flow” as used herein shall mean the gross cash revenues and
funds received by the Partnership (other than funds received as
capital contributions of the Partners under the terms of this
Agreement), including, without limitation, net proceeds from the
sale, exchange or other disposition of Partnership property, less
the sum of (1) all cash expenditures made by the Partnership
which the Partnership is obligated to make in the operation of or
in connection with the business or any part thereof during such
period, including, without limitation, payroll expenses, business
taxes, real and personal property taxes, severance taxes and
assessments, supplies, licenses and permit fees, repair and
maintenance expenses, utility charges, insurance premiums, debt
service, reasonable reserves as established by the General Partner
and/or as required by any lender or any third party; and
(2) expenditures by the Partnership for capital improvements,
but before any deduction for depreciation or other non-cash
expenses.
(b) The net proceeds of any
sale or refinancing of held properties or from any other
extraordinary event, such as an insured casualty or a condemnation,
shall be distributed in accordance with the provisions of this
Article VII.
Section 7.2.
Withdrawal . No Partner shall be entitled to make
withdrawals from its capital account, except to the extent of
distributions made under this Article VII or Article X.
ARTICLE
VIII
TRANSFERS OF
UNITS
Section 8.1. General
Partner . Except as otherwise provided in this
Section 8.1, without the express written consent of Limited
Partners owning a majority of the Units held by the Limited
Partners in t
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