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EXHIBIT
3.28
AGREEMENT OF LIMITED
PARTNERSHIP
OF
STAR 2000
LP
THIS AGREEMENT OF LIMITED
PARTNERSHIP, made and entered into as of this
day of October, 1996, by and
between Chaparral Steel Texas, Inc., a Delaware corporation (the
“General Partner”) and Chaparral Steel Trust, a
Delaware business trust (the “Limited
Partner”).
NOW, THEREFORE, the General
Partner and the Limited Partner hereby agree to the terms and
conditions of this Agreement of Limited Partnership as
follows:
ARTICLE 1
DEFINITIONS;
REFERENCES
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1.1 |
Definitions. Unless the context requires otherwise, the
following terms shall have the meanings specified in this Section
l.1: |
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1.1.1 |
Act: The Delaware Revised Uniform Limited Partnership
Act. |
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1.1.2 |
Additional Capital Contributions: The additional capital
contributions described in Section 3.4. |
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1.1.3 |
Adjusted Capital Account Deficit: With respect to any Partner,
the deficit balance, if any, in such Partner’s Capital
Account as of the end of the relevant taxable year, after giving
effect to the following adjustments: |
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(a) |
Credit to such Capital Account any amounts which such Partner
(1) is obligated to restore to the Partnership upon liquidation of
its interest in the Partnership (or which is so treated pursuant to
Regulations Section 1.704-1(b)(2)(ii)(c)) pursuant to the terms of
this Agreement or under state law or (2) is deemed to be obligated
to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (3) the
Partner’s share (as determined under Code Section 752) of any
recourse indebtedness of the Partnership to the extent that such
indebtedness could not be repaid out of the Partnership’s
assets if all of the Partnership’s assets were sold at their
respective Book Values as of the end of the Fiscal Year or other
period and the proceeds from the sales were used to pay the
Partnership’s liabilities; and |
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(b) |
Debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Regulations. |
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The foregoing definition of
Adjusted Capital Account Deficit is intended to comply with the
provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and
shall be interpreted consistently therewith. For purposes of clause
(a)(3) above, the amounts computed pursuant to clause (a)(1) above
for each Partner shall be considered to be proceeds from the sale
of the assets of the Partnership to the extent such amounts would
be available to satisfy (directly or indirectly) the indebtedness
specified in clause (a)(3).
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1.1.4 |
Affiliate: With respect to any Person, a Person that directly
or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with the Person in
question. As used herein, the term “control” means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether
through ownership of voting securities or interests, by contract,
or otherwise. |
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1.1.5 |
Agreement: This Agreement of Limited Partnership of STAR 2000
LP and any amendments hereto. |
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1.1.6 |
Bankruptcy: A Person shall be deemed bankrupt if: |
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(a) |
any proceeding is commenced against such Person as
“debtor” for any relief under bankruptcy or insolvency
laws, or laws relating to the relief of debtors, reorganizations,
arrangements, compositions, or extensions and such proceeding is
not dismissed within sixty (60) days after such proceeding has
commenced, or |
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(b) |
such Person commences any proceeding for relief under
bankruptcy or insolvency laws or laws relating to the relief of
debtors, reorganizations, arrangements, compositions, or
extensions. |
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1.1.7 |
Book Value: With respect to any asset, the asset’s
adjusted basis for federal income tax purposes, except as
follows: |
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(a) |
the initial Book Value of any asset contributed (or deemed
contributed under Regulations Section 1.708-1(b)(1)(iv)) by a
Partner to the Partnership shall be the asset’s gross fair
market value at the time of the contribution; |
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(b) |
the Book Value of all Partnership assets shall be adjusted to
equal their respective gross fair market values, as determined by
the General Partner in its reasonable judgment: |
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(i) |
if the General Partner reasonably determines an adjustment is
necessary or appropriate to reflect the relative economic interests
of the Partners in the Partnership as of (1) the acquisition of an
additional interest in the Partnership by any new or existing
Partner in exchange for more than a de |
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minimis capital contribution,
or (2) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership property as consideration
for an interest in the Partnership; and
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(ii) |
as of the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); |
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(c) |
the Book Value of any Partnership asset distributed to any
Partner will be the gross fair market value of the asset on the
date of distribution; and |
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(d) |
the Book Values of Partnership assets will be increased or
decreased to reflect any adjustment to the adjusted basis of the
assets under Code Sections 734(b) or 743(b), but only to the extent
that the adjustment is taken into account in determining Capital
Accounts under Regulations Section 1.704-1(b)(2)(iv)(m), provided
that Book Values will not be adjusted hereunder to the extent that
the General Partner determines that an adjustment under clause (b)
is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment under this clause
(d). |
After the Book Value of any
asset has been adjusted under clause (a), clause (b) or clause (d)
above, Book Value will be adjusted by the Depreciation taken into
account with respect to the asset for purposes of computing Net
Profit and Net Loss.
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1.1.8 |
Capital Account: The capital account of a Partner established
and maintained in accordance with Section 5.1. |
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1.1.9 |
Capital Contributions: With respect to any Partner, the amount
of money actually contributed (or deemed contributed pursuant to
Regulations Section 1.704-1(b)(2)(iv)(c)) to the Partnership and
the initial Book Value of any property (other than money)
contributed to the Partnership with respect to the interest in the
Partnership held by that Partner (net of any liabilities secured by
such property that the Partnership is considered to assume or to
take subject to Code Section 752). Any reference in this Agreement
to the Capital Contribution of a Partner will include a Capital
Contribution made by any prior Partner with respect to the
Partnership interest of the Partner. |
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1.1.10 |
Capital Transaction: The sale, exchange or other disposition of
all or any portion of the property of the Partnership other than in
the ordinary course of business of the Partnership. Capital
Transactions include the financing or refinancing of Partnership
property which creates excess funds not needed for Operations and
which funds, in the opinion of the General Partner, are available
for distribution to the Partners. |
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1.1.11 |
Code: The United States Internal Revenue Code of 1986, as now
existing or hereafter amended. References to sections of the Code
include successor provisions to those sections. |
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1.1.12 |
Depreciation: For each taxable year or other period, an amount
equal to the depreciation, amortization or other cost recovery
deduction allowable with respect to an asset for the year or other
period, except that if the Book Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of
the year or other period, Depreciation will be an amount which
bears the same ratio to the beginning Book Value as the federal
income tax depreciation, amortization or other cost recovery
deduction for the year or other period bears to the beginning
adjusted tax basis, provided that if the federal income tax
depreciation, amortization, or other cost recovery deduction for
the year or other period is zero, Depreciation will be determined
with reference to the beginning Book Value using any reasonable
method selected by the General Partner. |
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1.1.13 |
Fiscal Year: The period commencing on June 1 of each year and
ending on May 31 of such year. |
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1.1.14 |
General Partner: Chaparral Steel Texas, Inc., a Delaware
corporation. |
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1.1.15 |
Gross Income: For each Fiscal Year or other period, an amount
equal to the Partnership’s gross income as determined for
federal income tax purposes for such Fiscal Year or period but
computed with the adjustments specified in Section 1.1.20(a) and
(c). |
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1.1.16 |
Initial Capital Contributions: The Capital Contributions of the
General Partner made pursuant to Section 3.1 and the Limited
Partner made pursuant to Section 3.2. |
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1.1.17 |
Limited Partner: Chaparral Steel Trust, a Delaware business
trust, and any other Person who is admitted to the Partnership as a
Limited Partner and shown as a Limited Partner on the books and
records of the Partnership. |
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1.1.18 |
Net Cash Flow: All cash funds from operations of the
Partnership on hand or on deposit from time to time after (i)
payment of all operating expenses payable as of the date in
question, (ii) provision for payment of all outstanding and unpaid
Partnership obligations due and payable as of the date in question
or within sixty (60) days thereafter, and (iii) the establishment
of such reasonable reserves as the General Partner, in its sole
discretion, deems appropriate for the operating needs of the
Partnership. “Net Cash Flow” shall not include or
reflect any proceeds received or expenses incurred in connection
with a Capital Transaction. |
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1.1.19 |
Net Proceeds of a Capital Transaction: The net proceeds
received by the Partnership in connection with a Capital
Transaction after payment of all costs and expenses incurred by the
Partnership in connection with such |
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Capital Transaction,
including, without limitation, brokers’ commissions; loan
fees, other closing costs, the cost of any alteration, improvement,
restoration or repair of Partnership assets necessitated by or
incurred in connection with such Capital Transaction, any reserves
that the General Partner believes in good faith should be
established and the payment of any loans owed by the Partnership to
any of the Partners, plus any other loans that should be
appropriately paid, as determined by the General Partner in its
reasonable discretion.
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1.1.20 |
Net Profit and Net Loss: For each Fiscal Year or other period,
an amount equal to the Partnership’s taxable income or loss
for such Fiscal Year or period, determined in accordance with Code
Section 703(a) (for this purpose, all items of income, gain, loss
or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss) with
the following adjustments: |
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(a) |
any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net
Profit or Net Loss shall be added to such taxable income or
loss; |
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(b) |
any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
under Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise
taken into account in computing Net Profit or Net Loss shall be
subtracted from such taxable income or loss; |
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(c) |
gain or loss resulting from any disposition of Partnership
property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the
Book Value of such property notwithstanding that the Book Value of
such asset differs from its adjusted tax basis; |
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(d) |
gain or loss resulting from any adjustment pursuant to Section
1.1.7(b) shall be taken into account as gain or loss from
disposition of the asset for purposes of computing Net Profit or
Net Loss hereunder; |
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(e) |
gain or loss resulting from any adjustment attributable to an
in-kind distribution of assets to any Partner pursuant to Sections
5.2 shall be taken into account as gain or loss from disposition of
the asset for purposes of computing Net Profit or Net Loss
hereunder; |
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(f) |
in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing taxable income
or loss, there shall be taken into account Depreciation for such
Fiscal Year or other period as determined under Regulations Section
1.704-1(b)(2)(iv)(g)(3); |
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(g) |
the amount of any Gross Income specially allocated to the
Partners pursuant to Sections 4.7 through 4.9 and 4.14 shall not be
included as income or revenue; and |
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(h) |
any amount allocated pursuant to Sections 4.11 through 4.14
shall not be included as a gain, loss or deduction. |
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1.1.21 |
Net Profit and Net Loss from Capital Transactions: Net Profit
and Net Loss including only those items of income, gain, loss and
deduction relating to Capital Transactions. |
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1.1.22 |
Net Profit and Net Loss from Operations: Net Profit and Net
Loss excluding those items of income, gain, loss and deduction
related solely to Capital Transactions. |
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1.1.23 |
Nonrecourse Deductions: Losses, deductions or Code Section
705(a)(2)(B) expenditures attributable to Nonrecourse Liabilities
of the Partnership. The amount of Nonrecourse Deductions for any
Fiscal Year or other period shall be determined in accordance with
the provisions of Regulations Section 1.704-2(c). |
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1.1.24 |
Nonrecourse Liability: A nonrecourse liability as defined in
Regulations Section 1.752-1(a)(2). |
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1.1.25 |
Operations: All operations and activities of the Partnership
other than those related to or consisting of a Capital
Transaction. |
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1.1.26 |
Partner: A Partner of the Partnership, including the General
Partner and the Limited Partner. |
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1.1.27 |
Partner Nonrecourse Debt: Any Nonrecourse Liability of the
Partnership for which any Partner or related person bears the
economic risk of loss under Regulations Section
1.752-2. |
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1.1.28 |
Partner Nonrecourse Debt Minimum Gain: The minimum gain
attributable to Partner Nonrecourse Debt as determined under
Regulations Section 1.704-2(i)(3). |
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1.1.29 |
Partner Nonrecourse Deductions: Partnership losses, deductions
or Code Section 705(a)(2)(B) expenditures attributable to a
particular Partner Nonrecourse Debt. The amount of Partner
Nonrecourse Deductions for any Fiscal Year or other period shall be
determined in accordance with the provisions of Regulations Section
1.704-2(i)(2). |
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1.1.30 |
Partnership: STAR 2000 LP, a Delaware limited
partnership. |
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1.1.31 |
Partnership Certificate: The certificate of limited partnership
of the Partnership filed in conformance with the Act. |
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1.1.32 |
Partnership Minimum Gain: The amount computed under Regulations
Section 1.704-2(d)(1) with respect to the Partnership’s
Nonrecourse Liabilities. |
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1.1.33 |
Partnership Percents or Percentages: The percentages of the
Partners as follows: |
General Partner 1%
Limited Partner
99%
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1.1.34 |
Partnership Term: The period of duration of the Partnership, as
set forth in Section 2.5. |
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1.1.35 |
Person: Any individual, partnership, corporation, trust or
other legal entity. |
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1.1.36 |
Regulations: The Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding
regulations). |
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1.1.37 |
Tax Matters Partner: The General Partner. |
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1.1.38 |
Transfer: Any sale, assignment, transfer, lease or other
disposal of property, including without limitation, an interest in
the Partnership. |
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1.2 |
References. Unless otherwise specified herein, references in
this Agreement to “Section,” “Subsection,”
“Article,” or “Exhibit” refer to the
sections, subsections, articles, or exhibits in this
Agreement. |
ARTICLE 2
FORMATION, NAME, PURPOSE,
REGISTERED OFFICE,
REGISTERED AGENT AND
TERM
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2.1 |
Formation of the Limited Partnership. The General Partner and
the Limited Partner hereby form the Partnership as a limited
partnership pursuant to and in accordance with the provisions of
the Act. |
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2.2 |
Partnership Name. The business of the Partnership will be
conducted under the name Star 2000 LP or such other name or names
as the General Partner may determine. |
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2.3 |
Purpose. The purpose of the Partnership is to (i) engage in the
engineering, development, operation and commercialization of
materials management processes encompassing, among other things,
the recycling, reuse, recovery, processing and sale of automobile,
industrial, commercial, construction, demolition, agricultural and
municipal solid wastes; (ii) own, manage, operate, mortgage, sell
and otherwise deal with the assets of the Partnership; and, (iii)
engage in such other activities as the General Partner shall deem
appropriate, to the extent such activities may be carried on under
applicable law and are not prohibited by the terms and provisions
of this Agreement. |
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2.4 |
Principal and Registered Office. The principal office of the
Partnership is at 300 Ward Road, Midlothian, Texas 76065. The
General Partner has a business office at the Partnership’s
principal office. The registered office of the Partnership is at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801 and The Corporation Trust Center is the registered agent of
the Partnership. The General Partner way change the principal or
registered office or registered agent of the Partnership from time
to time. The General Partner may establish, maintain and abandon
one or more additional places of business for the
Partnership. |
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2.5 |
Term of the Partnership. The term of the Partnership shall
commence upon the filing and recording of the Partnership
Certificate, and shall continue until December 31, 2046, unless
earlier terminated pursuant to the terms of this
Agreement. |
ARTICLE 3
CAPITAL CONTRIBUTIONS;
PARTNER LOANS
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3.1 |
Initial Capital Contributions of General Partner. Upon the
formation of the Partnership, the General Partner has contributed
$10.00 to the Partnership. The General Partner shall not otherwise
be required to make additional contributions to the Partnership
except as provided in Sections 3.4 and 5.5. |
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3.2 |
Initial Capital Contribution of Limited Partner. Upon the
formation of the Partnership, the Limited Partner has contributed
$990.00 to the Partnership. The Limited Partner shall not be
required to make additional contributions to the Partnership except
as specified in Sections 3.4 and 5.5. |
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3.3 |
Authorization of Partner Loans. Subject to the limitations
herein and to other agreements of the Partnership, the General
Partner from time to time may cause the Partnership to borrow
required amounts from one or more Partners or their Affiliates.
Loans made by Partners or Affiliates under this Section 3.3 will
not be considered a contribution to the capital of the Partnership,
but will constitute indebtedness of the Partnership to the
advancing Partner or Affiliate, payable from the first available
net cash flow of the Partnership unless otherwise agreed by the
lending Partner or Affiliate and, to the extent still unpaid, upon
the termination and liquidation of the Partnership. Each loan by a
Partner or Affiliate will bear simple interest compounded annually
on the unpaid principal balance at the interest rate approved by
the General Partner. The Partners will not be personally liable for
loans made by Partners or Affiliates under this Section 3.3 or be
obligated to make contributions to the capital of the Partnership
to repay those loans. Loans Made by Partners or Affiliates under
this Section 3.3 will be payable only from the assets of the
Partnership. |
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3.4 |
Additional Capital Contributions. Upon approval of the General
Partner and the Limited Partner, the Partners may make Additional
Capital Contributions to the Partnership from time to time as may
be required to meet the demands of the business of the Partnership.
The Partners shall contribute such Additional Capital Contributions
in cash in proportion to the Partners’ Partnership
Percentages. |
ARTICLE 4
DISTRIBUTIONS AND
ALLOCATIONS
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4.1 |
Distribution of Net Cash Flow. Net Cash Flow shall be
distributed among the Partners in accordance with their Partnership
Percentages at such times and in such amounts as shall be
determined by the General Partner. |
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4.2 |
Distribution of Net Proceeds of a Capital Transaction. Net
Proceeds of a Capital Transaction shall be distributed among the
Partners in accordance with their Partnership Percentages at such
times and in such total amounts as shall be determined by the
General Partner. |
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4.3 |
Return of and Interest on Capital Contributions. No Partner is
entitled to the return of his Capital Contributions or his Capital
Account or to be paid interest in respect of either his Capital
Account or any Capital Contribution made by him to the Partnership
except as provided in this Agreement. |
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4.4 |
Payments. The amount of any distribution or payment to a
Partner whether pursuant to Article 4 or Article 9 hereof may be
made in cash or in-kind or partially in cash and partially in-kind
in the reasonable discretion of the General Partner or the
liquidating trustees, as the case maybe, less reasonable reserves
established in the reasonable discretion of the General Partner or
the liquidating trustees, as the case may be, for known or unknown
liabilities of the Partnership. |
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4.5 |
In-Kind Distributions. All distributions of assets in-kind
shall be made at Book Value as determined pursuant to Section 5.3
and shall be distributed to the Partners in the same manner as a
distribution of Net Proceeds of a Capital Transaction would have
been made if such assets had been sold. The Net Profit or Net Loss
resulting from distribution will be allocated in accordance with
Section 4.6.3 or Section 4.6.4, as the case may be. |
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4.6 |
Allocations of Net Profit and Net Loss. |
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4.6.1 |
Net Profit From Operations. |
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(a) |
If any Net Loss has been allocated to the Partners pursuant to
Section 4.6.2 or Section 4.6.4, then Net Profit from
Operations |
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shall first be allocated to
the Partners, in the same proportions as such Net Loss was
allocated, until each Partner’s Capital Account balance
equals what it would have been had there been no such allocation of
Net Loss.
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(b) |
After any allocation required pursuant to Section 4.6.1(a), Net
Profit from Operations shall be allocated among the Partners in
accordance with their Partnership Percentages. |
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4.6.2 |
Net Loss From Operations. |
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(a) |
If any Net Profit has been allocated to the Partners pursuant
to Section 4.6.1 or Section 4.6.3, then Net Loss from Operations
shall first be allocated to the Partners, in the same proportions
as such Net Profit was allocated, until each Partner’s
Capital Account balance equals what it would have been had there
been no such allocation of Net Profit. |
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(b) |
After any allocation required pursuant to Section 4.6.2(a) Net
Loss from Operations shall be allocated among the Partners in
proportion to their Capital Accounts until such Capital Account
balances equal zero. |
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(c) |
After any allocation required pursuant to Section 4.6.2(b), Net
Loss from Operations shall be allocated to the General
Partner. |
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4.6.3 |
Net Profit From Capital Transactions. |
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(a) |
If any Net Loss has been allocated to the Partners pursuant to
Section 4.6.2 or Section 4.6.4, then Net Profit from Capital
Transactions shall first be allocated to the Partners, in the same
proportions as such Net Loss was allocated, until each
Partner’s Capital Account balance equals what it would have
been had there been no such allocation of Net Loss. |
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(b) |
After any allocation required pursuant to Section 4.6.3(a), Net
Profit from Capital Transactions shall be allocated among the
Partners in accordance with their Partnership
Percentages. |
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4.6.4 |
Net Loss From Capital Transactions. |
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(a) |
If any Net Profit has been allocated to the Partners pursuant
to Section 4.6.1 or Section 4.6.3, then Net Loss from Capital
Transactions shall first be allocated to the Partners, in the same
proportions as such Net Profit was allocated, until each
Partner’s Capital Account balance equals what it would have
been had there been no such allocation of Net Profit. |
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(b) |
After any allocation required pursuant to Section 4.6.4(a) Net
Lost from Capital Transactions shall be allocated among the
Partners in proportion to their Capital Accounts until such Capital
Account balances equal zero. |
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(c) |
After any allocation required pursuant to Section 4.6.4(b), Net
Loss from Capital Transactions shall be allocated to the General
Partner. |
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4.7 |
Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Agreement to the contrary, if in any Fiscal Year
or other period there is a net decrease in the amount of the
Partnership Minimum Gain, then each Partner shall first be
allocated items of Gross Income for such year (and, if necessary,
subsequent years) in an amount equal to such Partner’s share
of the net decrease in such Minimum Gain during such year (as
determined under Regulations Section 1.704-2(g)(2)); provided,
however, if there is insufficient Gross Income in a year to make
the allocation specified above for all Partners for such year, the
Gross Income shall be allocated among the Partners in proportion to
the respective amounts they would have been allocated had there
been an unlimited amount of Gross Income for such year. |
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4.8 |
Minimum Gain Chargeback for Partner Nonrecourse Debt.
Notwithstanding any other provision of this Agreement to the
contrary other than Section 4.7, if in any year there is a net
decrease in the amount of the Partner Nonrecourse Debt Minimum
Gain, then each Partner shall first be allocated items of Gross
Income for such year (and, if necessary, subsequent years) in an
amount equal to such Partner’s share of the net decrease in
such Minimum Gain during such year (as determined under Regulations
Section 1.704-2(i)(4)); provided, however, if there is insufficient
Gross Income in a year to make the allocation specified above for
all Partners for such year, the Gross Income shall be allocated
among the Partners in proportion to the resp |
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