EXHIBIT 3.1
EDWARD D. JONES & CO., L.P.
FIFTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
Dated: April 28, 1994
EDWARD D. JONES & CO., L.P.
(a Missouri Limited Partnership)
FIFTH AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
THIS FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
entered into this 28th day of April, 1994, by and between EDJ Holding
Company, Inc., a Missouri corporation, as the General Partner, and The
Jones Financial Companies, a Limited Partnership, as the Limited
Partner, as provided herein.
W I T N E S S E T H:
WHEREAS, the Partnership was formed as a limited partnership under The
Uniform Limited Partnership Law of the State of Missouri on May 23,
1969; and
WHEREAS, the Partnership elected to be governed by the provisions of
the Missouri Revised Uniform Limited Partnership Act on August 28,
1987; and
WHEREAS, the parties restated in full Amendment No. 40 dated August
28, 1987 and the Agreement of Limited Partnership dated as of May 23,
1969 of Edward D. Jones & Co., L.P. and the related Certificate of
Limited Partnership dated August 28, 1987 into the Amended and
Restated Agreement and Certificate of Limited Partnership (the "First
Restated Agreement") of Edward D. Jones & Co., L.P. dated August 28,
1987; and
WHEREAS, the parties amended and restated the First Restated Agreement
pursuant to the Second Amended and Restated Agreement of Limited
Partnership (the "Second Restated Agreement") of Edward D.
Jones & Co., L.P. dated January 31, 1991; and
WHEREAS, the parties amended and restated the Second Restated
Agreement pursuant to the Third Amended and Restated Agreement of
Limited Partnership (the "Third Restated Agreement") of Edward D.
Jones & Co., L.P. dated May 7, 1992; and
WHEREAS, the parties amended and restated the Third Restated Agreement
pursuant to the Fourth Amended an Restated Agreement of Limited
Partnership (the "Fourth Restated Agreement") of Edward D. Jones &
Co., L.P. dated November 1, 1993; and
WHEREAS, the parties hereto now desire to amend and restate the Fourth
Restated Agreement to provide for the issuance by the Partnership of
certain Subordinated Capital Notes due 2006 and restate the Fourth
Restated Agreement in its entirety;
NOW, THEREFORE, pursuant to the terms, covenants and conditions set
forth herein and the mutual promises contained herein, the parties
hereto agree as follows:
ARTICLE ONE
DEFINED TERMS
The defined terms used in this Agreement shall have the meanings
specified below:
"Affiliate" means (l) any Person directly or indirectly controlling,
controlled by or under common control with another Person, (2) any
Person owning or controlling ten percent (l0%) or more of the
outstanding voting securities of such other Person, (3) any officer,
director or partner of such Person, or (4) if such other Person is an
officer, director or partner, any company for which such Person acts
in any such capacity.
"Agreement" means this Fifth Amended and Restated Agreement of Limited
Partnership, as amended from time to time.
"Capital Account" means an account established by the Partnership and
maintained for each Partner, for federal income tax purposes, which
account shall be credited with:
(i) the amount of the Partner's Capital Contributions; and
(ii) the amount of Partnership income (including income exempt from
federal income tax) and gain (or items thereof) allocated to the
Partner pursuant to Article Eight hereof;
and which shall be debited by:
(iii) the amount of Partnership losses and deductions (or items
thereof) allocated to the Partner pursuant to Article Eight hereof;
(iv) the amount of Partnership expenditures described in Treasury
Regulations Section l.704-l(b)(2)(iv)(i) allocable to the Partner in
the same proportion as that in which the Partner bears the economic
burden of those expenditures; and
(v) the amount of all distributions to the Partner pursuant to Article
Eight hereof.
In addition, the Capital Account of each Partner shall be adjusted as
necessary to comply with Treasury Regulations Section l.704-
l(b)(2)(iv). In the event the General Partner shall determine that it
is prudent to modify the manner in which the Capital Accounts or any
debits or credits thereto, are completed in order to comply with such
regulations, the General Partner may amend this Agreement to reflect
such modification, provided that it is not likely to have a material
effect on the amounts distributable to the partners pursuant to
Article Eight upon dissolution of the Partnership.
If any Partner would otherwise have a negative balance in his Capital
Account, the amount of any such negative balance shall be reduced (but
not in excess of such negative balance) by the amount of such
Partner's share of Partnership Minimum Gain (determined in accordance
with Treasury Regulations Section l.704-l(b)(4)(iv)(f)) after taking
into account all increases and decreases to such Partnership Minimum
Gain during the taxable year.
In the event that the Partnership is deemed to be terminated for
federal income tax purposes due to the sale or exchange of fifty
percent (50%) or more of the Partnership interests in the capital or
profits of the Partnership (the "Partnership Interests") within a
twelve (l2) month period, appropriate adjustment shall be made to the
Capital Accounts to reflect the constructive liquidation and
reformation deemed to occur upon a termination.
In the event that interests in the Partnership are sold, exchanged or
otherwise transferred, and the transfer is recognized under Article
Seven hereof, or by operation of law, the Capital Account of the
transferee will equal the Capital Account of the transferor
immediately before the transfer. However, if such a sale or exchange,
either alone or in combination with other sales or exchanges within a
twelve-month period results in a transfer of fifty percent (50%) or
more of the Partnership Interests causing a termination of the
Partnership for federal income tax purposes, the adjustment required
by the immediately preceding paragraph shall be made.
"Capital Contribution" means the total amount of cash or property
contributed to the Partnership by each Partner (and not thereafter
returned to such Partner by the Partnership) pursuant to the terms of
this Agreement. The Capital Contributions of the Partners have been
previously set forth on exhibits to this Agreement. From the date
hereof, the Capital Contributions of the Partners shall be reflected
in the books and records of the Partnership.
"Certificate of Limited Partnership" means the document, as amended or
restated, filed as a certificate of limited partnership under the
Missouri Act.
"General Partner" means EDJ Holding Company, Inc., a Missouri
corporation.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Limited Partner" means The Jones Financial Company, a Limited
Partnership, a Missouri limited partnership.
"Missouri Act" means the Missouri Revised Uniform Limited Partnership
Act, as amended from time to time.
"Net Income or Net Loss" means, with respect to any fiscal period, the
net income or the net loss of the Partnership, determined in
accordance with generally accepted accounting principles; provided,
however, there shall be excluded from such net income or net loss any
unrealized gains or losses on securities held (whether at the
discretion of the Partnership or otherwise) by the Partnership in
Trading Account Number 001-00103-12 (or any successor account) as a
hedge against fixed rate Partnership borrowings (as opposed to other
securities held by the Partnership in trading accounts as inventory
for resale in the ordinary course of business).
"Notice" means a writing, containing the information required by this
Agreement to be communicated to a party, delivered personally or sent
by U.S. mail, postage prepaid, to such party at the last known address
of such party as shown on the records of the Partnership, the date of
personal delivery or the date of mailing thereof being deemed the date
of receipt thereof.
"Partner" means the General Partner or the Limited Partner.
"Partnership" means the limited partnership continued by this
Agreement by the parties hereto, as said limited partnership may from
time to time be constituted.
"Partnership Minimum Gain" means, for Partnership tax purposes, as set
forth in Treasury Regulations Section l.704-l(b)(4)(iv)(c), the amount
of gain, if any, that would be realized by the Partnership if it were
to sell or dispose of (in a taxable transaction) property subject to a
non-recourse liability of the Partnership, in full satisfaction of
such liability.
"Person" means a natural person, partnership, limited partnership
(domestic or foreign), trust, estate, association or corporation.
"Profits and Losses For Tax Purposes" means, for Partnership
accounting and tax purposes, the various items set forth in Section
702(a) of the Internal Revenue Code and all applicable regulations or
any successor law, and shall include, but not be limited to, each item
of income, gain, deduction, loss, preference or credit.
ARTICLE TWO
CONTINUATION, NAME AND OFFICE,
PURPOSES, TERM AND DISSOLUTION
2.1 Continuation.
The parties hereto hereby continue the Partnership as a limited
partnership pursuant to the provisions of the Missouri Act.
2.2 Name, Place of Business and Office.
The name of the Partnership shall be "Edward D. Jones & Co., L.P".
The principal office and place of business shall be 201 Progress
Parkway, Maryland Heights, Missouri 63043. The General Partner may
at any time change the location of such principal office. Notice of
any such change shall be given to the Limited Partner on or before the
date of any such change.
2.3 Purposes.
The Partnership shall continue to conduct its business under the firm
name of Edward D. Jones & Co., L.P. (or under the name of
Edward D. Jones & Co. if such name is registered as a fictitious name
with the State of Missouri) and shall engage in a general brokerage
and commission business including without limitation the purchase of,
sale of, and dealing in stocks, bonds, notes and evidences of
indebtedness of any person, firm, enterprise, corporation or
association domestic or foreign, and bonds and any other political
subdivision thereof, domestic or foreign, and bills of exchange and
commercial papers, and any and all securities of any kind, nature or
description whatsoever; and any kind of commodities and provisions
usually dealt with on exchanges, or upon the over-the-counter market,
or any option contracts upon any of the foregoing, or otherwise as
principals, brokers, agents, or otherwise to act as investment adviser
under the Investment Advisers Act of 1940, as amended and the rules
and regulations thereunder; the general conduct of any securities
transfer business; the general conduct of any trustee service
business; the general conduct of any insurance business, including but
not limited to acting in the capacity of an insurance agency, to act
as a depositor under any and all forms of trust indentures providing
for the deposit of bonds, stocks, debentures, and any other type of
security and the issuance of beneficial interests in the securities so
deposited and to perform any and all acts necessary or incidental
thereto; to conduct through itself or any associated enterprise in
which it has an interest, a mortgage processing and lending business;
and in general, without limitation of the foregoing, such business as
is usually conducted in the City of New York by so-called stock
exchange and commodity exchange brokers or such business as is
permitted under the Missouri Act. The Partnership may enter into such
financing arrangements and guarantees as the General Partner may deem
appropriate in connection with the business of the Partnership. The
Partnership may act as a partner or shareholder of, or act as an
advisor to, any other organization as the General Partner may deem
advisable. No business, however, shall be conducted which shall be
forbidden by, or be contrary to, any applicable law, or any lawful
rules and regulations, promulgated thereunder, including without
limitation any of the provisions of the Securities Exchange Act of
1934, as amended, or any of the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, or any of
the rules and regulations of the National Association of Securities
Dealers, Inc., or of the constitution, rules, regulations, and
practices of the New York Stock Exchange, Inc. or any other exchange
or exchanges in which the Partnership or its Affiliates may hold a
membership.
2.4 Term and Dissolution.
A. The Partnership shall continue in full force and effect until
December 3l, 2087, or until dissolution prior thereto upon the
happening of any of the following events:
(i) The sale of all of the assets of the Partnership;
(ii) The withdrawal of either Partner; or
(iii) The dissolution of the Partnership by the General Partner.
B. Upon dissolution of the Partnership, the General Partner shall
cause the cancellation of the Partnership's Certificate of Limited
Partnership, liquidate the Partnership's assets and apply and
distribute the proceeds thereof in accordance with Section 8.2 hereof.
2.5 Registered Office and Agent.
The name and address of the Registered Agent and Registered Office for
service of process on the Partnership are set forth in the Certificate
of Limited Partnership.
2.6 Amendment to Certificate of Limited Partnership.
The Certificate of Limited Partnership shall be amended within thirty
days of the admission or withdrawal of a General Partner.
ARTICLE THREE
PARTNERS, CAPITAL AND DEMAND NOTES
3.1 General Partner.
A. The name, last known mailing address and Capital Contribution of
the General Partner are reflected in the books and records of the
Partnership.
B. The General Partner may increase or decrease its Capital
Contribution from time to time.
3.2 Limited Partner.
A. The name, last known mailing address and Capital Contribution of
the Limited Partner are reflected in the books and records of the
Partnership.
B. The Limited Partner shall, if requested by the General Partner,
increase or decrease its capital contribution from time to time.
3.3 Partnership Capital.
A. The total capital of the Partnership shall be the aggregate amount
of the Capital Contributions of the Partners as provided for herein.
B. No Partner shall be paid interest on any Capital Contribution to
the Partnership.
C. Except as otherwise provided herein, prior to dissolution of the
Partnership, no Partner shall have the right to demand the return of
its Capital Contribution. No Partner shall have the right to demand
and receive property other than cash in return for its Capital
Contribution.
D. The General Partner shall have no personal liability for the
repayment of the Capital Contribution of the Limited Partner.
E. The Limited Partner shall contribute its Capital Contribution in
the form of cash or pursuant to a subordination agreement in a form
acceptable to the New York Stock Exchange.
3.4 Liability of the Limited Partner.
The Limited Partner shall only be liable to make the payment of its
Capital Contribution. Except as provided in the Missouri Act, the
Limited Partner shall not be liable for any obligations of the
Partnership.
3.5 Participation in Partnership Business by the Limited Partner.
The Limited Partner shall neither participate in or have any control
over the Partnership business (except as required by law) nor have any
authority or right to act for or bind the Partnership. The Limited
Partner hereby consent to the exercise by the General Partner of the
powers conferred on it by this Agreement.
3.6 Demand Notes and Cash Subordination Agreements.
The General Partner or the Limited Partner may, from time to time,
upon prior approval from the General Partner, execute and deliver a
Secured Demand Note (together with a Secured Demand Note Collateral
Agreement) or a Cash Subordination Agreement to the Partnership in the
form and under the terms and conditions presented by Rule 325 of the
New York Stock Exchange or shall deliver to the Partnership such other
documents as are acceptable to the New York Stock Exchange, and such
Secured Demand Note (together with the Secured Demand Note Collateral
Agreement) or Cash Subordination Agreement or such other documents
shall be treated as a contribution of additional capital (for
regulatory purposes) to the Partnership by the Partner executing and
delivering the same to the Partnership. In conjunction with any such
Secured Demand Notes (and related Secured Demand Note Collateral
Agreements) or Cash Subordination Agreements or such other documents,
the General Partner or Limited Partner may also execute and deliver to
the Partnership in the form and under the conditions and terms
prescribed by Rule 326.13 of the New York Stock Exchange, a
subordination agreement for the purpose of enabling the Partnership to
include in its "net worth", the prescribed value of the securities
held by the Partnership under the Secured Demand Note Collateral
Agreement or such other documents of the General Partner or the
Limited Partner.
ARTICLE FOUR
RIGHTS, POWERS, AND DUTIES OF THE GENERAL PARTNER
4.1 Authorized Acts; Management and Control.
A. The General Partner has the exclusive right to manage the business
of the Partnership and is hereby authorized to take any action
(including, but not limited to, the acts authorized by Section 4.1B
below) of any kind and to do anything and everything in accordance
with the provisions of this Agreement.
B. The General Partner through any of its officers for, in the name
and on behalf of, the Partnership is hereby authorized to take any and
all actions, and to engage in any kind of activity and to perform and
carry out all functions of any kind necessary to, or in connection
with, the business of the Partnership including, but not limited to:
(i) executing any instruments on behalf of the Partnership; (ii)
acquiring or selling assets of the Partnership; (iii) entering into
loans or guarantees in connection with the business of the
Partnership; (iv) acting as a partner or shareholder of, or adviser
to, any other organization; (v) contributing capital, as a limited
partner or as a general partner, or purchasing other securities in or
otherwise investing any limited partnership, general partnership,
corporation or other entity and taking all actions required as a
partner, shareholder or investor in any such entity; or (vi) doing any
other act in furtherance of the purposes of the Partnership
4.2 Time and Effort; Independent Activities.
The General Partner shall devote its full time to the business of the
Partnership. The Limited Partner may engage independently or with
others in other business ventures of every nature and description,
including, without limitation, the ownership, operation, management,
syndication and development of business ventures related to or
competitive with the business of the Partnership. The General Partner
may also, indirectly through subsidiaries or affiliated entities, or
directly, simultaneously independently engage in other related or
unrelated activities. Neither the Partnership nor the other Partner
shall have any rights in or to such independent ventures or the income
or profits derived therefrom.
4.3 Duties and Obligations of the General Partner.
A. The General Partner shall prepare (or cause to be prepared) and
file such amendments to this Agreement or any certificate of limited
partnership as are required by law or as it deems necessary to cause
this Agreement or any certificate of limited partnership to reflect
accurately the agreement of the Partners the identity of the Partners
and the amounts of their respective Capital Contributions.
B. The General Partner shall prepare (or cause to be prepared) and
file such tax returns and other documents, as are required by law or
as it deems necessary, for the operation of the Partnership.
4.4 Liability for Acts and Omissions; Indemnification.
The General Partner shall not be liable, responsible or accountable in
damages or otherwise to the Limited Partner for, and the Partnership
shall indemnify and save harmless the General Partner from any loss or
damage incurred by reason of, any act or omission performed or omitted
by it in good faith on behalf of the Partnership and in a manner
reasonably believed by it to be within the scope of the authority
granted to it by this Agreement and in the best interests of the
Partnership, provided that the General Partner shall not have been
guilty of gross negligence or gross misconduct with respect to such
acts or omissions and, further, provided that the satisfaction of any
indemnification and any saving harmless shall be paid out of and
limited to Partnership assets and no Partner shall have any personal
liability on account thereof.
4.5 Dealing with an Affiliate.
The General Partner may for, in the name of and on behalf of, the
Partnership enter into such agreements, contracts or the like with any
Affiliate of the General Partner or with the General Partner, in an
independent capacity, as distinguished from its capacity (if any) as a
Partner, to undertake and carry out the business of the Partnership as
if such Affiliate or General Partner were an independent contractor;
and the General Partner may obligate the Partnership to pay reasonable
compensation for and on account of any such services.
4.6 Appointment of Special Committee.
Pursuant to rights granted to the General Partner pursuant to Section
4.1 hereof, the General Partner hereby appoints John W. Bachmann,
Darryl L. Pope and the then Managing Partner of The Jones Financial
Companies, a Limited Partnership (at any time the Managing Partner
thereof is not John W. Bachmann), as committee members of a special
committee of the Partnership, which committee (acting through one or
more of its members) shall have full power and authority on behalf of
the General Partner, at any time and from time to time, (a) to
designate one or more Persons (i) to assign securities registered in
the name of the Partnership, (ii) to execute powers of substitution,
(iii) to guarantee the signatures of others to assignments of
securities and (iv) to make any certification or guarantee of any
signature or document submitted in support of the transfer of any
securities, all with the same effect as if the name of the Partnership
had been signed under like circumstanced by the General Partner, (b)
to adopt and authorize the use of a mechanically reproduced facsimile
signature of the Partnership in connection with (i) the assignment of
securities registered in the name of the Partnership and (ii) the
execution of powers of substitution and (c) to designate one or more
Persons to sign written contracts covering "seller's option," "when
issued," and "when distributed" transactions in the name of the
Partnership with the same effect as if the name of the Partnership had
been signed under like circumstances the General Partner, any and all
such powers of attorney, agreements, and other instruments (including
agreements of indemnification) as may be required to evidence or
support action under (a), (b), or (c) above.
ARTICLE FIVE
WITHDRAWAL OF A PARTNER
Neither Partner shall have the right to retire or voluntarily withdraw
from the Partnership without the prior written consent of the other
Partner.
ARTICLE SIX
RESTRICTIONS ON RETURN OF CAPITAL CONTRIBUTIONS
AND CERTAIN OTHER TRANSACTIONS
A. The Limited Partner may by written notice to the General Partner
request that all or a portion of its Capital Contribution be returned
prior to the maturity of its Cash Subordination Agreement; however,
the General Partner may, in its absolute discretion, refuse to return
all or any portion of such Capital Contribution to the Limited Partner
until the Partnership is dissolved pursuant to Section 2.4 hereof.
B. It is understood and agreed that the Capital Contributions of the
Partners to the Partnership will be used, in part, by the Partnership
as part of the Partnership's required capital as a brokerage firm
regulated by the Securities and Exchange Commission and the New York
Stock Exchange and other regulatory agencies. Therefore,
notwithstanding any other provision contained in this Agreement to the
contrary, no Partner shall have returned to it (under any provision of
this Agreement) its Capital Contribution, if after giving effect
thereto, the Partnership be in violation of (i) any rule of the New
York Stock Exchange Inc., (ii) any rule issued under the Securities
Exchange Act of 1934, (iii) any agreement (cash subordination or
otherwise) which has been entered into by the Partnership or (iv) any
other law, rule or regulation to which the Partnership is subject. In
the event there is returned to any Partner all or any portion of its
Capital Contribution and because of such return the Partnership
violated any of the aforementioned rules, agreements or regulations,
then such Partner hereby irrevocably agrees (whether or not such
Partner had any knowledge or notice of such facts at the time of such
return) to repay to the Partnership, its successors or assigns, the
sum so returned to such Partner to be held by the Partnership pursuant
to the provisions hereof as if such return had never been made;
provided, however, that any suit for the recovery of any such return
must be commenced within two years of the date of such return.
C. Notwithstanding any other provision contained herein, no Partner
shall, without the prior written approval of the New York Stock
Exchange, Inc. and without the prior written approval of the General
Partner, withdraw its Capital Contribution to the Partnership on less
than six (6) months written notice, given no sooner than six (6)
months after such contribution was first made, of its intent to
withdraw such Capital Contribution; provided, however, that the
Capital Contribution of any Partner may not be withdrawn nor may any
unsecured advance or loan to the Partnership which qualifies as
capital under Rule 15c3-1 promulgated under the Securities Exchange
Act of 1934 be withdrawn nor may any unsecured advance or loan be made
to a Partner or employee or any Affiliate hereof, if, after giving
effect thereto and to any other withdrawals, advances, or loans which
are scheduled to occur within six (6) months following such
withdrawal, advance, or loan, the Partnership would be in violation of
said Rule.
D. Notwithstanding anything to the contrary contained in this
Agreement, in the event of the termination of the Partnership on the
expiration of the term of this Agreement, or any extension or renewal
thereof, each Partner agrees if withdrawals of Capital Contributions
on any such termination would cause the Partnership's capital position
to violate Rules 326(a) and 326(b) of the Rules of the Board of
Directors of the New York Stock Exchange, Inc. during the six (6)
months immediately preceding the date of termination, such withdrawals
may be postponed for a period of up to six (6) months from the state
date of termination, as the General Partner may deem necessary to
insure compliance with said Rules and any such Capital Contributions
so retained by the Partnership after the date of termination shall
continue to be subject to all debts and obligations of the
Partnership.
E. The Partnership will not, and it will not permit any Subsidiary of
the Partnership (as defined in the Note Purchase Agreement as of April
15, 1986 relating to the 9-3/8% Secured Guaranteed Notes due 1996 of
Tempus Corporation and the 9-3/8% Capital Notes due 1996 of Edward D.
Jones & Co., the Note Purchase Agreement dated as of March 15, 1988
relating to the 10.60% Secured Guaranteed Notes due 1997 of Tempus
Corporation and the 10.60% Capital Notes due 1997 of Edward D. Jones &
Co., L.P. and the Note Purchase Agreement dated as of May 1992
relating to the 8.96% Subordinated Capital Notes due 2002 of Edward D.
Jones & Co., L.P. and the Note Purchase Agreement dated as of
April 22, 1994 relating to the 7.95% Subordinated Capital Notes Due
2006) [referred to herein collectively as the "Note Agreements"] to,
directly or indirectly, incur, assume or otherwise become or be or
remain liable to any partner, officer or director, or any former
partner, officer or director, of the Partnership or any subsidiary, or
to the heir or legal representatives of any such person, with respect
to any Indebtedness (as defined in the Note Agreements) relating to
such person's status as a partner, director or officer of the
Partnership or any subsidiary (but excluding in any event Indebtedness
with respect to any account of such person or such heirs or legal
representatives or transactions and securities or commodities), unless
such Indebtedness shall be subordinated to the 9-3/8% Capital Notes
due 1996, the 10.60% Capital Notes due 1997, the 8.96% Subordinated
Capital Notes due 2002, the 9-3/8% Secured Guaranteed Notes due 1996,
the 10.60% Secured Guaranteed Notes due 1997, the 7.95% Subordinated
Capital Notes due 2006 and the Guarantees (as contained in the Note
Agreements) to at least the same extent as the 9-3/8% Capital Notes
due 1996, the 10.60% Capital Notes due 1997, the 8.96% Subordinated
Capital Notes, the 7.95% Subordinated Capital Notes due 2006 and the
related Guarantees, are subordinated to the claims of general
creditors as contained in the Note Agreements.
ARTICLE SEVEN
TRANSFERABILITY OF PARTNER INTERESTS
7.1 Restrictions on Transfer.
A. Each Partner agrees that it will not sell, pledge exchange,
transfer or assign its interest in the Partnership to any Person
without the express written consent of the other Partner.
B. Any sale, exchange, assignment or other transfer in contravention
of any of the provisions of this Section 7.l shall be void and
ineffectual and shall not bind or be recognized by the Partnership.
7.2 Substituted Limited Partners.
No Limited Partner shall have a power to grant the right to become a
substituted Limited Partner to an assignee of any part of such Limited
Partner's Partnership interest.
ARTICLE EIGHT
DISTRIBUTIONS AND ALLOCATIONS
8.1 Distribution of Net Income.
A. All Net Income, if any, of the Partnership for each calendar year
shall (except for Net Income generated in any transaction in
connection with the dissolution and liquidation of the Partnership) be
distributed 99% to the Limited Partner and 1% to the General Partner.
B. In any year in which there is a Net Loss and the Partnership is not
dissolved and liquidated in accordance with Section 8.2 hereof, such
Net Loss, on the books of the Partnership, shall be borne 99% by the
Limited Partner and 1% by the General Partner. Any such Net Losses
borne by the Limited Partner shall only be applied against and reduce
its Capital Contribution. The total amount of all such Net Losses to
be borne by the Limited Partner may never exceed the total amount of
the Capital Contributions of the Limited Partner as shown on the books
of the Partnership.
C. Notwithstanding any other provision of this Agreement to the
contrary, the aggregate interest of the General Partner in each
material item of Partnership income, gain, loss, deduction, preference
or credit shall be equal to at least one percent (1%) of each such
item at all times during the existence of the Partnership.
D. Notwithstanding any other provision of this Agreement to the
contrary, the General Partner, in its sole and absolute discretion,
may withhold cash distributions to the Partners if the General Partner
determined that such cash should be retained by the Partnership for
working capital or other purposes.
It is intended that a sum ranging between 15%-35% of the Net Income of
the Partnership will be retained by the Partnership as additional
equity for qualified net capital and shall be credited as additions to
the capital accounts of the General Partner and Limited Partner in the
same proportion equal to their entitled share of distributions
described above. Notwithstanding the foregoing, the decision of
whether to make this retention of capital in accordance with this
Section or whether to vary the amount of capital to be retained in any
year, is vested in the General Partner, and it is agreed that its
decision in this matter shall be final.
8.2 Cash Distributions Upon Dissolution.
A. Upon the dissolution of the Partnership as a result of the
occurrence of any of the events set forth in Section 2.4 hereof, the
General Partner shall proceed to liquidate the Partnership, and the
proceeds of liquidation (the "Proceeds of Liquidation") shall be
applied and distributed in the following order of priority:
(i) To the payment of debts and liabilities of the Partnership,
including accrued salaries and the expenses of liquidation.
(ii) To the repayment of the 9-3/8% Capital Notes due 1996, the 10.60%
Capital Notes due 1997, the 8.96% Subordinated Capital Notes due 2002
and the 7.95% Subordinated Capital Notes due 2006.
(iii) To the payment of any accrued but unpaid amounts due under
Section 8.1 hereof.
(iv) To the repayment of the Capital Contribution of the Limited
Partner.
(v) To the repayment of the Capital Contribution of the General
Partner.
(vi) The balance of the Proceeds of Liquidation, if any, shall be
distributed 99% to the Limited Partner and 1% to the General Partner.
B. Notwithstanding the foregoing, in the event the General Partner
shall determine that an immediate sale of part or all of the
Partnership assets would cause undue loss to the Partners, the General
Partner, in order to avoid such loss, may either defer liquidation of,
and withhold from distribution for a reasonable time, any assets of
the Partnership except those necessary to satisfy the Partnership
debts and obligations, or distribute the assets to the Partners in
kind.
C. Net Income generated by transactions in connection with the
dissolution and liquidation of the Partnership shall be allocated in
accordance with Section 8.2A hereof.
8.3 Allocation of Profits and Losses for Tax Purposes.
A. Except as provided in Sections 8.3B,C or D hereof, all Profits And
Losses For Tax Purposes of the Partnership shall be allocated 99% to
the Limited Partner and l% to the General Partner, provided however,
if any allocation of loss or deduction would reduce the Limited
Partner's Capital Account below zero (determined after taking into
account all prior or contemporaneous cash distributions and all prior
or contemporaneous allocations of income, gain, loss, deduction or
credit and as determined at the close of the taxable year in respect
of which such loss or deduction is to be allocated), such excess
losses or deductions shall be allocated to the General Partner; and
provided further however, that the General Partner shall not be
allocated any income, gain or loss with respect to the amount of the
Partnership's unrealized receivables (within the meaning of Section
751(c) of the Internal Revenue Code) or inventory items which have
appreciated substantially in value (within the meaning of Section
751(d) of the Internal Revenue Code) on the date such General Partner
first became a Partner hereof. For purposes of this provision, the
term "Partnership" shall include any subsidiary partnerships.
B. The General Partner is authorized to allocate Profits and Losses
For Tax Purposes arising in any calendar year differently than
otherwise provided for in this Article Eight to the extent the General
Partner determines, in his discretion, that such modifications are
appropriate to cause the allocations to comply with the principles of
Section 704 of the Internal Revenue Code and such modifications are in
the overall best interests of the Partners. Any allocation made
pursuant to this Section 8.3B shall be deemed to be a complete
substitute for any allocation otherwise provided for in this Article
Eight and no amendment of this Agreement or approval of any Partner
shall be required.
C. Notwithstanding any other provisions of this Agreement to the
contrary, if the amount of any Partnership Minimum Gain at the end of
any taxable year is less than the amount of such Partnership Minimum
Gain at the beginning of such taxable year, there shall be allocated
to any Partner having a negative Capital Account at the end of such
taxable year (determined after taking into account any adjustments,
allocations and distributions described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) gross income and gain
(in respect of the current taxable year and any future taxable year)
in an amount sufficient to eliminate such negative Capital Account in
compliance with Treasury Regulations Section 1.704-1(b)(4)(iv)(e).
Such allocation of gross income and gain shall be made prior to any
other allocation of profits and losses for tax purposes. Any such
allocation of gross income or gain pursuant to this Section 8.3C shall
be in proportion with such negative Capital Accounts of the Partners
and such allocations of gross income and gain shall be taken into
account, to the extent feasible, in computing subsequent allocations
of Profits and Losses For Tax Purposes of the Partnership so that the
net amount of all items allocated pursuant to each Partner pursuant to
this Article Eight shall, to the extent possible, be equal to the net
amount that would have been allocated to each such Partner pursuant to
the provisions of this Article Eight if the allocations made pursuant
to the first sentence of this Section 8.3C had not occurred.
D. Notwithstanding any other provisions of this Agreement to the
contrary, except as provided in Section 8.6C hereof, if any Partner
receives any adjustment, allocations, or distributions described in
Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that
reduces any Partner's Capital Account below zero or increases the
negative balance in such Partner's Capital Account, gross income and
gain shall be allocated to such Partner in an amount and manner
sufficient to eliminate any negative balance in his Capital Account
created by such adjustments, allocations, or distributions as quickly
as possible in accordance with Treasury Regulations Section 1.704-
1(b)(2)(ii)(d). Any such allocation of gross income or gain pursuant
to this Section 8.3D shall be in proportion with such negative Capital
Accounts of the Partners. Any allocations of items of gross income or
gain pursuant to this Section 8.3D shall (i) not duplicate any
allocations of gross income or gain made pursuant to Section 8.3C
hereof, and (ii) be taken into account, to the extent feasible, in
computing subsequent allocations of Profits and Losses For Tax
Purposes of the Partnership, so that the net amount of all items
allocated to each Partner pursuant to this Article Eight shall, to the
extent possible, be equal to the net amount that would have been
allocated to each such partner pursuant to the provisions of this
Article Eight if such adjustments, allocations or distributions had
not occurred.
E. If and to the extent upon dissolution of the Partnership pursuant
to Section 2.4 hereof the allocations under Section 8.3A are
inconsistent with the following provision, then such allocations shall
be adjusted to conform to the following provision: income and gain
(whether ordinary income, gain under Section 1231 of the Code, or
capital gain) from disposition of all remaining Partnership assets
shall be allocated among the Partners so that the positive balance of
each Partner's Capital Account is equal to the cash to be distributed
to such Partner pursuant to Article 8.2 determined after all Capital
Accounts have been adjusted to reflect the allocations of Profits and
Losses For Tax Purposes of the Partnership and cash distributions made
pursuant to Section 8.1 hereof.
ARTICLE NINE
BOOKS, RECORDS AND REPORTS,
ACCOUNTING, TAX ELECTIONS, ETC.
9.1 Books, Records and Reports.
A. Proper and complete records and books of account shall be kept (or
caused to be kept) by the General Partner in which shall be entered
all transactions and other matters relative to the Partnership's
business. The Partnership's books and records shall be prepared in
accordance with generally accepted accounting principles, consistently
applied. The books and records shall at all times be maintained at
the principal office of the Partnership and shall be open for
examination and inspection by the Partners or by their duly authorized
representatives during reasonable business hours. In particular, the
following books and records shall be kept:
(i) a current list and a past list of the full names and last known
mailing address of each Partner, specifying the General Partners and
the Limited Partners in alphabetical order, including the date of
admission or withdrawal of each Partner. To the extent provided by
the Missouri Act, these lists shall be provided to the Secretary of
State of Missouri, without cost, upon his written request;
(ii) a copy of the Certificate of Limited Partnership and all
Certificates of Amendment thereto, together with executed copies of
any Powers of Attorney pursuant to which any Certificate has been
executed;
(iii) copies of the Partnership's federal, state and local income tax
returns and reports, if any, for the three most recent fiscal years;
and
(iv) copies of any written Partnership Agreements in effect and any
financial statements of the Partnership for the three most recent
years.
B. The General Partner shall have prepared at least annually, at the
Partnership's expense, financial statements (balance sheet, statement
of income or loss, partners' equity, and changes in financial
position) prepared in accordance with generally accepted accounting
principles which shall fairly reflect the Partnership's financial
position at the date shown and its results of operations for the
period indicated. Copies of such statements and report shall be made
available to the Partners annually.
C. The General Partner shall have prepared at least annually, at the
Partnership's expense, a report containing Partnership information
necessary in the preparation of the Partners' federal income tax
return. Copies of such report shall be distributed to each Partner as
promptly as possible.
9.2 Bank Accounts.
The bank accounts of the Partnership shall be maintained in such
banking institutions as the General Partner shall determine, and
withdrawals shall be made only in the regular course of Partnership
business on such signature or signatures as the General Partner may
determine.
9.3 Depreciation and Elections.
A. All elections required or permitted to be made by the Partnership
under the Internal Revenue Code shall be made by the General Partner.
B. Notwithstanding anything to the contrary in this Section 9.3, the
General Partner shall not be responsible for initiating any change in
accounting methods from the methods initially chosen.
C. The General Partner is hereby designated as the "Tax Matters
Partner" under Section 6231(a)(7) of the Internal Revenue Code.
9.4 Fiscal Year.
The fiscal year of the Partnership shall be the calendar year for tax
purposes.
ARTICLE TEN
GENERAL PROVISIONS
10.1 Appointment of Attorneys-in-Fact.
A. The Limited Partner, by the execution hereof, hereby irrevocably
constitutes and appoints the General Partner its true and lawful
attorney-in-fact, with full power and authority in its name, place and
stead, to execute or acknowledge under oath, deliver, file and record
at the appropriate public offices such documents as may be necessary
or appropriate to carry out the provisions of this Agreement
including:
(i) All certificates and other instruments (including this Agreement
or any certificate of limited partnership and any amendment thereof)
which the General Partner deems appropriate to qualify or continue the
Partnership as a limited partnership under the Missouri Act (or a
partnership in which the Limited Partner will have limited liability
comparable to that provided by the Missouri Act) or under the laws of
any other jurisdiction in which the Partnership may conduct business;
(ii) All amendments to this Agreement or any certificate of limited
partnership which are required to be filed or which the General
Partner deems to be advisable to file;
(iii) All instruments which the General Partner deems appropriate to
reflect a change or modification of the Partnership in accordance with
the terms of this Agreement;
(iv) All conveyances and other instruments which the General Partner
deems appropriate to reflect the dissolution and termination of the
Partnership; and
(v) All other instruments, documents or contracts (including, without
limiting the foregoing, any deed, lease, mortgage, note, bill of sale,
contract, trust agreement, guarantee, partnership agreement,
indenture, underwriting agreement or any instrument or documentation
which may be required to be filed (or which the General Partner deems
advisable to file) by the Partnership under the laws of any state or
by any governmental agency) requisite to carrying out the intent and
purpose of this Agreement and the business of the Partnership and its
Affiliates.
B. The appointment by the Limited Partner of the General Partner as
attorney-in-fact shall be deemed to be a power coupled with an
interest in recognition of the fact that each of the Partners under
this Agreement will be relying upon the power of the General Partner
to act as contemplated by this Agreement in any filing and other
action by them on behalf of the Partnership.
10.2 Word Meanings.
The words such as "herein", "hereinafter", "hereof", and "hereunder"
refer to this Agreement as a whole and not merely to a subdivision in
which such words appear unless the context otherwise requires. The
singular shall include the plural and the masculine gender shall
include the feminine and neuter, and vice versa, unless the context
otherwise requires.
10.3 Binding Provisions.
The covenants and agreements contained herein shall be binding upon,
and inure to the benefit of the heirs, executors, administrators,
successors and assigns of the respective parties hereto.
10.4 Applicable Law.
This Agreement shall be construed and enforced in accordance with the
laws of the State of Missouri.
10.5 Counterparts.
This Agreement may be executed in several counterparts, all of which
together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the same
counterpart, except that no counterpart shall be binding unless signed
by the General Partner.
10.6 Entire Agreement.
This Agreement contains the entire agreement between the parties and
supersedes all prior writings or representations.
10.7 Separability of Provisions.
Each provision of this Agreement shall be considered separable and if
for any reason any provision or provisions hereby are determined to be
invalid or unenforceable such validity or unenforceability shall not
impair the operation of or affect any other portion of this Agreement
and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision was omitted.
10.8 Section Titles.
Paragraph titles are for descriptive purposes only and shall
not control or alter the meaning of this Agreement as set forth in the
text.
10.9 Amendments.
This Agreement may be amended, from time to time by the written
agreement of the Limited Partner and the General Partner provided,
however, that the provisions of Section 10.10 hereof shall not be
amended without the prior written consent of the holders of 66-2/3% in
aggregate principal amount of the Capital Notes.
10.10 Payments Prohibited.
The Partnership shall not (i) return to either Partner all or any
portion of its Capital Contribution or (ii) make any distribution of
Net Income at any time when a default in the payment of the principal
of or premium or interest on any of the 15% Capital Notes Due 1992,
the 9-3/8% Capital Notes Due 1996, the 10.60% Capital Notes Due 1997,
the 8.96% Subordinated Capital Notes due 2002 or the 7.95%
Subordinated Capital Notes due 2006 of the Partnership (the "Capital
Notes") or any indebtedness for money borrowed of the Partnership
ranking on a parity with such Capital Notes shall have occurred and be
continuing; and any such act shall constitute a violation of this
Agreement prohibited by Article Six (B)(iii).
IN WITNESS WHEREOF, the undersigned has executed this Fifth Amended
and Restated Agreement of Limited Partnership as of the day and year
first above written.
GENERAL PARTNER:
EDJ HOLDING COMPANY, INC.
By:
Vice President
LIMITED PARTNER:
THE JONES FINANCIAL COMPANIES,
a Limited Partnership
By:
John W. Bachmann
Managing Partner