EXHIBIT 3.2.19
AGREEMENT OF LIMITED PARTNERSHIP
OF
SANMINA TEXAS, L.P.
A TEXAS LIMITED PARTNERSHIP
DATED AS OF JANUARY 5, 2000
THE LIMITED PARTNERSHIP INTERESTS REPRESENTED BY THIS AGREEMENT OF LIMITED
PARTNERSHIP HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE TEXAS SECURITIES ACT
OR OTHER SIMILAR STATE STATUTES IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION AS
PROVIDED IN THOSE STATUTES. THE SALE OR OTHER DISPOSITION OF THE LIMITED
PARTNERSHIP INTERESTS IS RESTRICTED, AS SET FORTH IN THIS LIMITED PARTNERSHIP
AGREEMENT, AND IN ANY EVENT IS PROHIBITED UNLESS THE GENERAL PARTNER RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE GENERAL PARTNER AND ITS COUNSEL THAT SUCH
SALE OR OTHER DISPOSITION CAN BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE STATUTES. BY ACQUIRING THE
LIMITED PARTNERSHIP INTEREST REPRESENTED BY THIS AGREEMENT OF LIMITED
PARTNERSHIP, THE LIMITED PARTNER REPRESENTS THAT IT WILL NOT SELL OR OTHERWISE
DISPOSE OF ITS LIMITED PARTNERSHIP INTEREST WITHOUT REGISTRATION OR OTHER
COMPLIANCE WITH THE AFORESAID STATUTES AND THE RULES AND REGULATIONS THEREUNDER
AND THE TERMS AND PROVISIONS OF THIS AGREEMENT.
TABLE OF CONTENTS
PAGE
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ARTICLE I THE PARTNERSHIP................................................................ 1
1.1 Definitions............................................................ 1
1.2 Organization........................................................... 4
1.3 Partnership Name....................................................... 4
1.4 Purpose................................................................ 5
1.5 Principal Place of Business............................................ 5
1.6 Term................................................................... 5
1.7 Filings; Agent for Service of Process.................................. 5
1.8 Independent Activities................................................. 6
ARTICLE II PARTNERS' CAPITAL CONTRIBUTIONS............................................... 6
2.1 Maintenance of Capital Accounts........................................ 6
2.2 General Partner........................................................ 7
2.3 Limited Partner........................................................ 7
2.4 Other Matters.......................................................... 7
2.5 Additional Contributions............................................... 7
ARTICLE III ALLOCATIONS.................................................................. 7
3.1 Profits................................................................ 7
3.2 Losses................................................................. 8
3.3 Other Allocation Rules................................................. 8
ARTICLE IV DISTRIBUTIONS................................................................. 9
4.1 In General............................................................. 9
4.2 Net Cash From Operations............................................... 9
4.3 Net Cash From Sales or Refinancings.................................... 9
4.4 Amounts Withheld....................................................... 9
4.5 Discretion of General Partner.......................................... 9
ARTICLE V MANAGEMENT..................................................................... 10
5.1 Authority of the General Partner....................................... 10
5.2 Right to Rely on General Partner....................................... 11
5.3 Restrictions on Authority of General Partner........................... 12
5.4 Duties and Obligations of General Partner.............................. 12
5.5 Indemnification of Certain Persons..................................... 13
5.6 Compensation and Loans................................................. 14
5.7 Operation Restrictions................................................. 14
ARTICLE VI ROLE OF LIMITED PARTNER....................................................... 14
6.1 Rights or Powers....................................................... 14
6.2 Voting Rights.......................................................... 14
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TABLE OF CONTENTS
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ARTICLE VII BOOKS AND RECORDS............................................................ 14
7.1 Books and Records...................................................... 14
7.2 Annual Reports......................................................... 15
7.3 Tax Information........................................................ 15
ARTICLE VIII AMENDMENTS AND MEETINGS..................................................... 15
8.1 Amendments............................................................. 15
8.2 Meetings of the Partners............................................... 16
ARTICLE IX TRANSFERS OF INTERESTS........................................................ 16
9.1 Admission of New Partners.............................................. 16
9.2 Restriction on Transfers............................................... 16
9.3 Notice of Transfers of Partnership Interests........................... 17
9.4 Prohibited Transfers................................................... 17
9.5 Right of Transferee to Become a Partner................................ 17
9.6 Right of Partner to Assign Partner's Interest.......................... 17
ARTICLE X GENERAL PARTNERS............................................................... 17
10.1 Additional General Partners............................................ 17
10.2 Resignation and Removal of the General Partner; Conversion of General
Partnership Interest................................................... 18
10.3 Covenant Not to Withdraw, Transfer or Dissolve......................... 18
ARTICLE XI WITHDRAWAL AND WINDING UP..................................................... 19
11.1 Withdrawal by a Partner................................................ 19
11.2 Redemption of Withdrawing Partner's Interest if Partnership Not
Wound Up............................................................... 19
11.3 Distribution in Liquidation of a Partner's Interest.................... 19
11.4 Liquidating Events..................................................... 20
11.5 Winding Up............................................................. 20
11.6 No Additional Compensation............................................. 21
11.7 Compliance With Timing Requirements of Regulations..................... 21
11.8 Consequences of a Tax Termination...................................... 21
11.9 Rights of Limited Partner.............................................. 21
ARTICLE XII POWER OF ATTORNEY............................................................ 22
12.1 General Partner as Attorney-In-Fact.................................... 22
12.2 Nature of Special Power................................................ 22
ARTICLE XIII MISCELLANEOUS............................................................... 23
13.1 Notices................................................................ 23
13.2 Binding Effect......................................................... 23
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TABLE OF CONTENTS
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13.3 Construction........................................................... 23
13.4 Headings............................................................... 23
13.5 Severability........................................................... 23
13.6 Incorporation by Reference............................................. 23
13.7 Further Action......................................................... 24
13.8 Variation of Pronouns.................................................. 24
13.9 Governing Law.......................................................... 24
13.10 Waiver of Action for Partition......................................... 24
13.11 Counterpart Execution.................................................. 24
13.12 Sole and Absolute Discretion........................................... 24
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AGREEMENT OF LIMITED PARTNERSHIP
OF
SANMINA TEXAS, L.P.
A TEXAS LIMITED PARTNERSHIP
DATED AS OF JANUARY 5, 2000
THE LIMITED PARTNERSHIP INTERESTS REPRESENTED BY THIS AGREEMENT OF LIMITED
PARTNERSHIP HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE TEXAS SECURITIES ACT
OR OTHER SIMILAR STATE STATUTES IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION AS
PROVIDED IN THOSE STATUTES. THE SALE OR OTHER DISPOSITION OF THE LIMITED
PARTNERSHIP INTERESTS IS RESTRICTED, AS SET FORTH IN THIS LIMITED PARTNERSHIP
AGREEMENT, AND IN ANY EVENT IS PROHIBITED UNLESS THE GENERAL PARTNER RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE GENERAL PARTNER AND ITS COUNSEL THAT SUCH
SALE OR OTHER DISPOSITION' CAN BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE STATUTES. BY ACQUIRING THE
LIMITED PARTNERSHIP INTEREST REPRESENTED BY THIS AGREEMENT OF LIMITED
PARTNERSHIP, THE LIMITED PARTNER REPRESENTS THAT IT WILL NOT SELL OR OTHERWISE
DISPOSE OF ITS LIMITED PARTNERSHIP INTEREST WITHOUT REGISTRATION OR OTHER
COMPLIANCE WITH THE AFORESAID STATUTES AND THE RULES AND REGULATIONS THEREUNDER
AND THE TERMS AND PROVISIONS OF THIS AGREEMENT.
AGREEMENT OF LIMITED PARTNERSHIP
OF
SANMINA TEXAS, L.P.
A TEXAS LIMITED PARTNERSHIP
This AGREEMENT OF LIMITED PARTNERSHIP is made effective as of January
5, 2000, among the General Partner and the Limited Partner identified in Exhibit
"A" hereto pursuant to the provisions of the Texas Revised Limited Partnership
Act on the following terms and conditions:
ARTICLE I
THE PARTNERSHIP
1.1 Definitions. Capitalized words and phrases used in this
Agreement have the following meanings:
(a) "Act" means the Texas Revised Limited Partnership
Act, as set forth in Article 6132a-1 of Vernon's Civil Statutes, as amended from
time to time (or any corresponding provisions of succeeding law).
(b) "Adjusted Capital Account Deficit" means the negative
balance, if any, of a Partner's Capital Account after all adjustments thereto
have been made under this Partnership Agreement, other than the adjustments
required under Section 3.3(b) hereof and after the Partner's Capital Account
balance has been -
(i) increased by any amounts which the Partner
is obligated to restore pursuant to any provision of this Partnership Agreement
or is deemed to be obligated to restore pursuant to the penultimate sentences of
Treas. Regs. Sections 1.704-2(g)(1) and 1.70472(i)(5), and
(ii) decreased by any amounts described in Treas.
Regs. Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6).
(c) "Available Cash" means cash on hand in the
Partnership after the payment of, or provision for the payment of, all of the
Partnership's obligations then due and after the establishment of such reserves
as the General Partner may think appropriate for all debts, expenses, capital
expenditures, and contingencies of the Partnership.
(d) "Affiliate" of a Partner means an entity directly or
indirectly controlling, controlled by or under common control with that Partner
where control means the ownership or control, directly or indirectly, of more
that fifty percent (50%) of all of the voting power of the shares (or other
securities or rights) entitled to vote for the election of directors or other
governing
authority, as of the date of this Agreement or hereafter during the
term of this Agreement; provided that such entity shall be considered an
Affiliate only for the time during which such control exists.
(e) "Agreement" or "Partnership Agreement" means this
Agreement of Limited Partnership, as amended from time to time.
(f) "Capital Account" means, with respect to any Partner,
the capital account maintained for such Partner in accordance with the
provisions of Section 2.1 of this Agreement.
(g) "Capital Contributions" means, with respect to any
Partner, the amount of money and the initial Gross Asset Value of any property
(other than money) contributed to the Partnership with respect to the Interest
in the Partnership held by such Partner.
(h) "Code" means the Internal Revenue Code of 1986, as
amended from time to time (or any corresponding provisions of succeeding law).
(i) "Depreciation" means, for each fiscal year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year or other
period.
(j) "General Partner" means each Person who from time to
time (i) is identified as such on Exhibit "A" to this Agreement or has become a
General Partner pursuant to the terms of this Agreement and (ii) has not ceased
to be a General Partner pursuant to the terms of this Agreement.
(k) "Gross Asset Value" means, with respect to any asset,
the asset's adjusted basis for federal income tax purposes, except as follows:
(i) Except as provided in clause (iv) below, the
initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset on the date of
contribution, as determined by the contributing Partner and the Partnership;
(ii) The Gross Asset Values of all Partnership
assets shall be adjusted to equal their respective gross fair market values, as
determined by the General Partner with the agreement of the Limited Partner, as
of the following times: (a) the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (b) the distribution by the Partnership to a
Partner of more than a de minimis amount of property as consideration for an
interest in the Partnership; and (c) the liquidation of the Partnership within
the meaning of Treas. Reg, Section 1.704-1(b)(2)(ii)(g); provided, however,
that adjustments pursuant to clauses (a) and (b) above shall be made only if the
General Partner reasonably determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners in the
Partnership. For purposes of this clause (ii) Partnership assets being adjusted
shall include receivables, payables and other items in which the Partnership has
unrealized income or deductions and the fair market value of such items shall be
their face amounts;
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(iii) Except as provided in clause (v) below, the
Gross Asset Value of any Partnership asset distributed to any Partner shall be
the gross fair market value of such asset on the date of distribution as
determined by the Partnership and the Partner to whom the asset is distributed;
(iv) The Gross Asset Value of any promissory note
contributed to the Partnership by a Partner who is the maker of the note shall
be zero, and except as provided in Section 2.1 (e) the contributing Partner's
Capital Account will be subsequently credited with the amount of any principal
payments received on the note by the Partnership or the amount received by the
Partnership upon a taxable disposition of the note. The preceding sentence shall
not apply to any promissory note that is readily tradeable on an established
securities market; and
(v) The Gross Asset Value of any promissory note
made by the Partnership and distributed to a Partner will be zero, and except as
provided in Section 2.1 (e) that Partner's Capital Account will be subsequently
debited with the amount of any principal payments received by him on the note or
the amount received by him upon a taxable disposition of the note. The preceding
sentence shall not apply to any, promissory note that is readily tradeable on an
established securities market.
(l) "Interest" means an ownership interest in the
Partnership held by a Person pursuant to this Agreement representing a
percentage of the total partnership interests, including any and all benefits to
which the holder of such an Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement and applicable law.
(m) "Limited Partner" means any Person from time to time
(i) whose name is set forth in Exhibit "A" hereto or who has become a Limited
Partner pursuant to the terms of this Agreement, and (ii) who holds an Interest.
"Limited Partners" means all such Persons.
(n) "Majority in Interest of the Partners" at any time
means Partners whose voting rights have not been suspended and whose aggregate
Capital Account balances exceed 50% of the aggregate Capital Account balances of
all Partners at such time.
(o) "Net Cash From Operations" means the gross cash
proceeds from Partnership operations less the, portion thereof used to pay or
establish reserves for all Partnership expenses, debt payments, capital
improvements, replacements, and contingencies, all as determined by the General
Partner.
(p) "Net Cash from Sales or Refinancings" means the net
cash proceeds from all sales and other dispositions (other than in the ordinary
course of business) and all refinancings of Property, less any portion thereof
used to establish reserves, all as determined by the General Partner. "Net Cash
From Sales or Refinancings" shall include all principal and interest payments
with respect to any note or other obligation received by the Partnership in
connection with sales and other dispositions (other than in the ordinary course
of business) of Partnership Property.
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(q) "Partners" means the General Partner and the Limited
Partner, where no distinction is required by the context in which the term is
used herein. "Partner" means any one of the Partners.
(r) "Partner Obligation" means the obligation, if any, of
a Partner to make additional Capital Contributions, to restore the negative
balance of his Capital Account, to compensate the Partnership or its other
Partners for any damages resulting from the Partner's acts or omissions, or to
pay any other amount due and owing to the Partnership.
(s) "Partnership" means the partnership formed pursuant
to this Agreement and the partnership continuing the business of this
Partnership in the event of dissolution as herein provided.
(t) "Person" means any individual, partnership,
corporation, trust, governmental unit, or other entity.
(u) "Profits" and "Losses" means, for each fiscal year or
other period, an amount equal to the Partnership's taxable income or loss for
such year or period, determined in accordance with Code Section 703(a),
increased by tax exempt income and decreased by items described in Section
705(a)(2)(B) of the Code, provided however that if any property is carried on
the books of the Partnership at a value that differs from that property's
adjusted basis for tax purposes, gain, loss, depreciation, and amortization with
respect to such property shall be computed by reference to the book basis of
such property, consistently with the requirements of Regulations Section
1.704-1(b)(2)(iv)(g); and provided further that any item allocated under Section
3.3 shall be excluded from the computation of Profits and Losses.
(v) "Property" means all real and personal property
acquired by the Partnership and any improvements thereto, and shall include both
tangible and intangible property.
(w) "Regulations" means the Income Tax Regulations,
including Temporary Regulations, promulgated under the Code, as such regulations
may be amended from time to time (including corresponding provisions of
succeeding regulations).
(x) "Sharing Percentage" means a Partner's allocable
share, expressed as a percentage as shown on Exhibit "A" of an indicated item of
profit, income, gain, loss, expense, deduction, or other allocable item of the
Partnership.
1.2 Organization. The Partners hereby agree to organize the
Partnership as a limited partnership pursuant to the provisions of the Act and
upon the terms and conditions set forth in this Agreement.
1.3 Partnership Name. The name of the Partnership shall be Sanmina
Texas, L.P. The General Partner may change the name of the Partnership upon 10
days notice to the Limited Partner. The Partnership shall hold all of its
property in the name of the Partnership and not in the name of
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any Partner. All business of the Partnership shall be conducted in the
Partnership name or in one or more assumed names selected by the General Partner
from time to time.
1.4 Purpose. The purpose of the Partnership is:
(a) to engage in any lawful act or activity for which
limited partnerships may be organized under the Business Corporation Act of the
State of Texas;
(b) to enter into any other lawful investment or business
enterprise; and
(c) to conduct any and all activities normally undertaken
by an owner of property in relation or incidental to the property held by the
Partnership; and
(d) to conduct any other purpose or activity as the
Partners shall agree which is permissible under the laws of the State of Texas.
1.5 Principal Place of Business. The principal place of business
of the Partnership shall be 1201 W. Crosby Road, Carrollton, Texas, 75006. The
General Partner may change the principal place of business of the Partnership to
any other place within the State of Texas upon 10 days' notice to the Limited
Partner.
1.6 Term. The term of the Partnership shall commence on the later
of December 31, 1999 or the date the certificate of limited partnership (the
"Certificate") is filed in the office of the Secretary of State of Texas in
accordance with the Act and shall continue until the winding up and liquidation
of the Partnership as provided in Article XI hereof. Prior to the time that the
Certificate is filed, no Person shall represent to third parties the existence
of the Partnership or hold himself out as a Partner.
1.7 Filings; Agent for Service of Process.
(a) The General Partner shall cause the Certificate to be
filed in the office of the Secretary of State of Texas in accordance with the
provisions of the Act. The General Partner shall take any and all other actions
reasonably necessary to perfect and maintain the status of the Partnership as a
limited partnership under the laws of Texas. The General Partner shall cause
amendments to the Certificate to be filed whenever required by the Act.
(b) The General Partner shall execute and cause to be
filed original or amended Certificates and shall take any and all other actions
as may be reasonably necessary to perfect and maintain the status of the
Partnership as a limited partnership or similar type of entity under the laws of
any other states or jurisdictions in which the Partnership engages in business.
(c) The agent for service of process on the Partnership
shall be C T Corporation System, 811 Dallas Avenue, Houston, Texas, 77002, or
any successor as appointed by the General Partner.
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(d) Upon the dissolution of the Partnership, the General
Partner, (or, in the event there is no remaining General Partner, any Person
elected pursuant to Section 11.5 hereof) shall promptly execute and cause to be
filed certificates of dissolution in accordance with the Act and the laws of any
other states or jurisdictions in which the Partnership has filed certificates.
1.8 Independent Activities. The General Partner and the Limited
Partner may, notwithstanding this Agreement, engage in whatever activities they
choose, whether the same or competitive with those of the Partnership or
otherwise, without having or incurring any obligation to offer any interest in
such activities to the Partnership or any Partner.
ARTICLE II
PARTNERS' CAPITAL CONTRIBUTIONS
2.1 Maintenance of Capital Accounts. A separate Capital Account
shall be maintained on the books of the Partnership for each Partner as follows:
(a) To each Partner's Capital Account there shall be
credited such Partner's Capital Contributions, such Partner's allocable share of
Profits, and any items in the nature of income or gain which are specially
allocated pursuant to Section 3.3 hereof, and the amount of any Partnership
liabilities assumed by such Partner or which are secured by any property
distributed to such Partner.
(b) To each Partner's Capital Account there shall be
debited the amount of cash and the Gross Asset Value of any property distributed
to such Partner from the Partnership, such Partner's allocable share of Losses,
and any items in the nature of expenses or losses which are specially allocated
pursuant to Section 3.3 hereof, and the amount of any liabilities of such
Partner assumed by the Partnership or which are secured by any property
contributed by such Partner to the Partnership.
(c) Each Partner's Capital Account shall be adjusted in
accordance with Treas. Regs. Sections 1.704-1(b)(2)(iv)(f) and 1.704-1(b)(2)
(iv)(g) if the Gross Asset Value of any asset is adjusted.
(d) In the event all or a portion of an interest in the
Partnership is transferred in accordance with the terms of this Agreement, the
respective Capital Accounts of the transferee and transferor shall be adjusted
in accordance with Treas. Regs. Section 1.704-1(b)(2)(iv)(1).
(e) Upon the liquidation of a Partner's Interest, the
Partner's Capital Account will be debited or credited, as appropriate, for the
fair market value of certain promissory notes in accordance with Treas. Regs.
Sections 1.704-1(b)(2)(iv)(d)(2) and 1.704-1(b)(2)(iv)(e)(2).
(f) Each Partner's Capital Account shall be adjusted as
required by Treas. Regs. Section 1.704-1(b)(2)(iv)(k) for depletion and gain or
loss with respect to the Partnership's oil and gas properties.
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The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treas. Regs. Section 1.704-1(b), and shall be interpreted and applied in a
manner consistent with such Regulations.
2.2 General Partner. The names, addresses, Capital Contributions,
and Sharing Percentages of the General Partners are as set forth in Exhibit "A"
attached hereto.
2.3 Limited Partner. The names, addresses, Capital Contributions,
and Sharing Percentages of the Limited Partner are as set forth in Exhibit "A"
hereto.
2.4 Other Matters.
(a) Except as otherwise provided in this Agreement, no
Partner shall demand or receive a return of his Capital Contributions or
withdraw capital from the Partnership without the consent of all Partners. Under
circumstances requiring a return of any Capital Contributions, no Partner shall
have the right to receive property other than cash except as may be specifically
provided herein.
(b) No Partner shall receive any interest. on, or salary
or drawing with respect to, his Capital Contributions or his Capital Account
except as otherwise provided in this Agreement.
(c) Except as otherwise provided by this Agreement or by
an assumption agreement, no Limited Partner shall be liable for the debts,
liabilities, contracts or any other obligations of the Partnership in his
capacity as a Limited Partner. Except as otherwise provided by this Agreement,
by any other agreements among the Partners, or by applicable state law, a
Limited Partner shall be liable only to make his Capital Contributions and shall
not be required to lend any funds to the Partnership or, after his Capital
Contributions have been paid, to make any additional contributions to the
Partnership.
2.5 Additional Contributions. The Partners shall be required to
make additional Capital Contributions from time to time as follows: the General
Partner may require the Partners to make additional contributions to the capital
of the Partnership by sending each Partner written notice stating the amount of
additional capital needed and the reasons therefor. Within thirty (30) days
after the receipt of such notice each Partner shall contribute to the
Partnership the total capital needed multiplied by the Partner's Sharing
Percentage.
ARTICLE III
ALLOCATIONS
3.1 Profits. After giving effect to the special allocations set
forth in Section 3.3 hereof, Profits for any fiscal year shall be allocated as
follows:
(a) First, all Profits shall be allocated in percentages
equal to each Partner's (General Partner and Limited Partner) Sharing
Percentage.
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(b) Thereupon, the Profits thereby allocated to the
Limited Partner shall be immediately reallocated to the General Partner to the
extent that any Losses theretofore allocated away from that Limited Partner and
to the General Partner pursuant to Section 3.2(b) have not been offset by
previous reallocations under this Section 3.1(b). All Profits allocable to the
General Partner under this Section 3.1(b) shall be allocated among the General
Partner in direct proportion to the then balance of the General Partner's
previous allocations under Section 3.2(b) less his previous allocations under
this Section 3.1(b).
3.2 Losses. After giving effect to the special allocations set
forth in Section 3.3 hereof, Losses for any fiscal year shall be allocated as
set forth in Section 3.2(a) below, subject to the limitation in Section 3.2(b)
below.
(a) Losses for any fiscal year shall be allocated in
percentages equal to each Partner's (General Partner and Limited Partner)
Sharing Percentage.
(b) The Losses allocated to the Limited Partner pursuant
to Section 3.2(a) hereof shall not exceed the maximum amount of Losses that can
be so allocated without causing that Limited Partner to have an Adjusted Capital
Account Deficit at the end of the fiscal year in which the allocation is made.
All Losses in excess of the limitations set forth in this Section 3.2(b) shall
be allocated among the General Partner in direct proportion to its respective
Sharing Percentages as General Partner.
3.3 Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or
any other items allocable to any period, Profits, Losses, and any such other
items shall be determined on a daily, monthly, or other basis, as determined by
the General Partner using any permissible method under Code Section 706 and the
Regulations thereunder.
(b) For purposes of determining a Partner's proportionate
share of the "excess nonrecourse liabilities" of the Partnership within the
meaning of Treas. Regs. Section 1.752-3, the Partners' interests in Partnership
profits are as set forth in Section 3.1 (a) above.
(c) Tax Allocations: Code Section 704(c). In accordance
with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and
deduction with respect to any property contributed to the capital of the
Partnership (including those subsequently contributed by the Partnership to
another entity taxable as a partnership under the Code) shall, solely for tax
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value (computed in accordance
with Section 1.1(j)(i) hereof).
In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to Section 1.1(j)(ii) hereof, subsequent allocations of income, gain,
loss, and deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal
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income tax purposes and its Gross Asset Value in the same manner as under Code
Section 704(c) and the Regulations thereunder.
The General Partner may elect in its discretion to use curative
allocations or the remedial allocation method, as permitted by Treas.
Regs. Section 1.704-3, in association with any allocation pursuant to this
Section 3.5.
In the event that a Partner contributes to the Partnership property as
to which the disparity between its adjusted basis for federal income tax
purposes and its Gross Asset Value is small, within the meaning of Treas. Regs.
Section 1.704-3(e)(1), the General Partner may in its discretion disregard this
Section 3.5 or defer its application until the Partnership disposes of such
property.
Any elections or other decisions relating to such allocations shall be
made by the General Partner in any manner that reasonably reflects the purpose
and intention of this Agreement and conforms to the requirements of Treas. Reg.
Section 1.704-3. Allocations pursuant to this Section 3.5 are solely for
purposes of federal, state, and local taxes and shall not affect, or in any way
be taken into account in computing, any Partner's Capital Account or share of
Profits, Losses, other items, or distributions pursuant to any provision of this
Agreement.
ARTICLE IV
DISTRIBUTIONS
4.1 In General. Except as otherwise specifically provided in the
Agreement, Available Cash shall be distributed from time to time as the General
Partner may determine in its discretion in percentages equal to each Partner's
(General Partner and Limited Partner) Sharing Percentage.
4.2 Net Cash From Operations. Except as otherwise provided in
Article XI hereof, Net Cash From Operations, if any, shall be distributed at
such times as the General Partner in its sole discretion may determine in the
following proportions: ninety-nine per cent (99%) to the Limited Partner; one
per cent (1%) to the. General Partner.
4.3 Net Cash From Sales or Refinancings. Except as otherwise
provided in Article XI hereof, Net Cash From Sales or Refinancings shall be
distributed at such times as the General Partner in its sole discretion may
determine in the following proportions ninety-nine percent (99%) to the Limited
Partner; one percent (1%) to the General Partner.
4.4 Amounts Withheld. All amounts withheld pursuant to the Code or
any provision of any state or local tax law with respect to any payment or
distribution to a Partner shall be treated as amounts distributed to that
Partner pursuant to this Article IV for all purposes under this Agreement. The
General Partner may allocate any such amounts among the Partners in any manner
that is in accordance with applicable law.
4.5 Discretion of General Partner. The Partners intend to
authorize the General Partner to use broad discretion with respect to the
investment, reinvestment and distribution of the Partnership
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assets; provided, however, notwithstanding any provision herein to the contrary,
the General Partner may not withhold any distribution of funds to the Partners
which would violate the General Partner's fiduciary duty under the Act.
ARTICLE V
MANAGEMENT
5.1 Authority of the General Partner. The General Partner shall
have the sole and exclusive right to manage the business of the Partnership and
shall have all of the rights and powers which may be possessed by general
partners under the Act including, without limitation the right and power to:
(a) acquire by purchase, lease, like-kind exchange or
otherwise any real or personal property which may be necessary, convenient, or
incidental to the accomplishment of the purposes of the Partnership including
the authority to lease or acquire real and personal property from the General
Partner or the Limited Partner;
(b) operate, maintain, finance, improve, construct, own,
grant options with respect to, sell, convey, assign, mortgage, and lease any
real estate and any personal property necessary, convenient, or incidental to
the accomplishment of the purposes of the Partnership, including the sale of
real estate and personal property to the General Partner or the Limited Partner,
and the loan of Partnership funds to third parties, the General Partner, or the
Limited Partner;
(c) make and execute any and all agreements, contracts,
promissory notes, loan agreements, security agreements, financing statements,
collateral pledges, trust deeds, mortgages, deeds, easements, affidavits,
leases, assignments, bills of sale, contracts, certifications, and other
instruments necessary or convenient in connection with the acquisition,
disposition, encumbrance, development, management, maintenance, and operation of
the Property, or in connection with managing the affairs of the Partnership,
including executing amendments to the Agreement and the Certificate in
accordance with the terms of the Agreement, pursuant to any power of attorney
granted by the Limited Partner to the General Partner;
(d) borrow money from third parties, the General Partner,
or the Limited Partner and issue evidences of indebtedness necessary,
convenient, or incidental to the accomplishment of the purposes of the
Partnership, and secure the same by mortgage, pledge, or other lien on any
Property;
(e) prepay in whole or in part, refinance, recast,
increase, modify, or extend any liabilities affecting the Property and in
connection therewith execute any extensions or renewals of encumbrances on any
or all of the Property;
(f) care for and distribute funds to the Partners by way
of cash, income, return of capital, or otherwise, all in accordance with the
provisions of this Agreement, and perform all matters in furtherance of the
objectives of the Partnership or this Agreement;
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(g) contract on behalf of the Partnership for the
employment and services of employees and/or independent contractors (which may
include any Partner or an affiliate of any Partner), such as property managers,
investment managers or advisers, lawyers, and accountants, and delegate to such
Persons the duty to manage or supervise any of the assets or operations of the
Partnership;
(h) engage in any kind of activity and perform and carry
out contracts of any kind (including contracts of insurance covering risks to
the Partnership's property or activities and General Partner liability)
necessary or incidental to, or in connection with, the accomplishment of the
purposes of the Partnership, as may be lawfully carried on or performed by a
partnership under the laws of each state in which the Partnership is then formed
or qualified;
(i) make any and all elections for federal, state, and
local tax purposes including, without limitation, any election, if permitted by
applicable law, to adjust the basis of Property pursuant to Code Sections 754,
734(b), and 743(b), or comparable provisions of state or local law, in
connection with transfers of Partnership interests and Partnership
distributions;
(j) take, or refrain from taking, all actions, not
expressly proscribed or limited by this Agreement, as may be necessary or
appropriate to accomplish the purposes of the Partnership; and
(k) institute, prosecute, defend, settle, compromise, and
dismiss lawsuits or other judicial or administrative proceedings brought on or
in behalf of, or against, the Partnership or the Partners in connection with
activities arising out of, connected with, or incidental to this Agreement, and
to engage counsel or others in connection therewith.
5.2 Right to Rely on General Partner. Any Person dealing with the
Partnership may rely (without duty of further inquiry) upon a certificate signed
by the General Partner as to:
(a) the identity of the General Partner and the Limited
Partner;
(b) the existence or nonexistence of any fact or facts
which constitute a condition precedent to acts by a General Partner or which are
in any other manner germane to the affairs of the Partnership;
(c) the Persons who are authorized to execute and deliver
any instrument or document of the Partnership; or
(d) any act or failure to act by the Partnership or any
other matter whatsoever involving the Partnership or any Partner.
The signature of an executive officer or other comparable
representative of the General Partner shall be sufficient to convey title to any
real property owned by the Partnership or to execute any promissory notes, loan
agreements, security agreements, financing statements, collateral pledges, trust
deeds, mortgages, deeds, easements, contracts, certificates, affidavits, leases,
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assignments, or other instruments of any kind, and all of the Partners agree
that a copy of this Agreement may be shown to the appropriate parties in order
to confirm the same. All of the Partners do hereby appoint the General Partner
as their attorney-in-fact for the execution of any or all of the documents
described in this Section 5.2.
5.3 Restrictions on Authority of General Partner.
(a) Without the consent of all of the Partners, no
General Partner shall have the authority to:
(i) do any act in contravention of this
Agreement;
(ii) do any act which would make it impossible to
carry on the business of the Partnership, except as otherwise provided in this
Agreement;
(iii) knowingly perform any act that would subject
any Limited Partner to liability as a general partner in any jurisdiction;
(iv) borrow any money from or lend any of the
Partnership funds to the General Partner or any Limited Partner pursuant to any
agreement or loan arrangement which contains interest rates, security
provisions, or repayment terms less favorable to the Partnership than those that
an independent third party lender or borrower (as the case may be) would
require; or
(v) sell any Partnership assets to or buy any
real or personal property from the General Partner or any Limited Partner unless
the sales or purchase price is at fair market value and on terms to which an
independent seller or buyer (as the case may be) would agree.
(b) Except as otherwise provided by this Agreement, no
Limited Partner in its capacity as such, shall have any right to participate in
the management or control of the Partnership or its business and affairs or to
act for or bind the Partnership in any way. Any Partner who acts beyond the
scope of the authority granted by this Agreement shall, in addition to any other
remedy available to the Partnership or the other Partners, be liable in damages
to the Partnership and each other Partner for any loss or damages that they may
incur or suffer as a consequence of such act.
5.4 Duties and Obligations of General Partner.
(a) The General Partner shall take all actions which may
be necessary or appropriate (i) for the continuation of the Partnership's valid
existence as a limited partnership under the laws of the State of Texas (and of
each other jurisdiction in which such existence is necessary to protect the
limited liability of the Limited Partner or to enable the Partnership to conduct
the business in which it is engaged) and (ii) for the accomplishment of the
Partnership's purposes, including the acquisition, development, maintenance,
preservation, and operation of the Partnership's property and business in
accordance with the provisions of this Agreement and applicable laws and
regulations.
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(b) The General Partner shall devote to the Partnership
such time as may be necessary for the proper performance of all duties
hereunder, but the General Partner shall not be required to devote himself full
time to the performance of such duties.
(c) The General Partner shall be under a duty to conduct
the affairs of the Partnership in the best interests of the Partnership and of
the Limited Partner, including the safekeeping and use of all of the Property
and the use thereof for the exclusive benefit of the Partnership, in accordance
with the standards applicable to partners in general partnerships as set forth
in Section 4.04 of the Texas Revised Partnership Act.
5.5 Indemnification of Certain Persons.
(a) Indemnification at the Discretion of the Partnership.
The Partnership shall indemnify any Person who was, is, or is threatened to be,
made a named defendant or respondent in a proceeding because the Person is or
was a partner, officer, employee, or agent of the Partnership or serving at the
request of the Partnership as a manager, officer, employee, or agent of any
other entity, as follows:
(i) Such Person shall be indemnified against
judgments, penalties (including excise and similar taxes), fines, settlements,
and reasonable expenses actually incurred by the Person in connection with the
proceeding; but, if the Person is found liable to the Partnership or is found
liable on the basis that personal benefit was improperly received by the Person,
the indemnification (1) is limited to reasonable expenses actually incurred by
the Person in connection with the proceeding and (2) shall not be made (even as
to expenses) in respect of any proceeding in which the Person shall have been
found liable for willful or intentional misconduct in the performance of his
duty to the Partnership.
(ii) Such a Person shall be indemnified under
this Agreement only if it is determined that such Person conducted himself in
good faith and reasonably believed, in the case of conduct in his or her
official capacity, that his or her conduct was in the Partnership's best
interest, and in all other cases that his or her conduct was at least not
opposed to the Partnership's best interests. In the case of any criminal
proceeding, an additional determination must be made that such Person had no
reasonable cause to believe his or her conduct was unlawful.
(b) Expenses Advanced. The Partnership shall pay or
reimburse in advance of the final disposition of a proceeding any reasonable
expenses incurred by a Partner, officer, employee, or agent of the Partnership,
or Person serving at the request of the Partnership as a manager, officer,
employee, or agent of any other entity who was, is, or is threatened to be, made
a named defendant or respondent in such a proceeding after the Partnership
receives a written affirmation by such Person of his or her good faith belief
that he or she has met the standard of conduct necessary for indemnification as
set forth herein and a written undertaking by or on behalf of the Person to
repay the amount paid or reimbursed if it is ultimately determined that he has
not met those requirements.
The termination of a proceeding by judgment, order, settlement, or
conviction, or on a plea of nolo contendere or its equivalent is not of itself
determinative that the Person did not meet the
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requirements set forth herein. A Person shall be deemed to have been found
liable in respect of any claim, issue or matter only, after the Person shall
have been finally so adjudged by a court of competent jurisdiction and no
opportunity for appeal then exists.
(c) Other Protection and Indemnification. The protection
and indemnification provided by this Agreement shall not be deemed exclusive of
any other rights to which such Person may be entitled, under any agreement,
insurance policy or vote of the Partners, or otherwise.
5.6 Compensation and Loans.
(a) Compensation and Reimbursement. Except as otherwise
provided in this Section 5.6 or in a separate agreement, no Partner shall
receive any salary, fee, or draw for services rendered to or on behalf of the
Partnership, nor shall any Partner be reimbursed for any expenses incurred by
such Partner on behalf of the Partnership.
(b) Expenses. The General Partner may charge the
Partnership for any direct expenses reasonably incurred in connection with the
Partnership's business.
5.7 Operation Restrictions. All property in the form of cash not
otherwise invested shall be deposited in one or more accounts maintained in the
name of the Partnership in such financial institutions as the General Partner
shall determine or shall be invested in short-term liquid securities or shall be
left in escrow and withdrawals shall be made only in the regular course of
Partnership business on such signature or signatures as the General Partner may
determine from time to time.
ARTICLE VI
ROLE OF LIMITED PARTNER
6.1 Rights or Powers. Except as otherwise set forth in Section 6.2
hereof, no Limited Partner shall have any right or power, in his capacity as a
Limited Partner, to take part in the management or control of the Partnership or
its business and affairs or to act for or bind the Partnership in any way.
6.2 Voting Rights. The Limited Partners shall have the right to
vote only on the matters explicitly set forth in this Agreement.
ARTICLE VII
BOOKS AND RECORDS
7.1 Books and Records. The Partnership shall keep adequate books
and records at its principal place of business, setting forth a true and
accurate account of all business transactions arising out of and in connection
with the conduct of the Partnership. Any Partner or his designated
representative shall have the right, at any reasonable time, to have access to
and inspect and copy the contents of such books or records.
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7.2 Annual Reports. Within a reasonable period after the end of
each Partnership fiscal year, each Partner shall be furnished with pertinent
information regarding the Partnership and its activities during such period.
7.3 Tax Information. Necessary tax information shall be delivered
to each Partner after the end of each fiscal year of the Partnership. Every
effort shall be made to furnish such information within 75 days after the end of
each fiscal year.
ARTICLE VIII
AMENDMENTS AND MEETINGS
8.1 Amendments.
(a) Amendments to this Agreement may be proposed by the
General Partner or by one or more Limited Partners constituting a Majority in
Interest of the Partners. Following such proposal, the General Partner shall
submit to the Limited Partners a verbatim statement of any proposed amendment,
provided that counsel for the Partnership shall have approved of the same in
writing as to form, and the General Partner may include in any such submission a
recommendation as to the proposed amendment. The General Partner shall seek the
written vote of the Partners on the proposed amendment or shall call a meeting
to vote thereon and to transact any other business that it may deem appropriate.
For purposes of obtaining a written vote, the General Partner may require
response within a reasonable specified time, but not less than 15 days, and
failure to respond in such time period shall constitute a vote which is
consistent with the General Partner's recommendation, if any, with respect to
the proposal or, if the General Partner makes no recommendation, a vote which is
consistent with the vote of the Majority in Interest of all Partners who voted.
A proposed amendment shall be adopted and be effective as an amendment hereto if
it receives the affirmative vote of a Majority in Interest of the Partners.
(b) Notwithstanding Section 8.1(a) hereof, this Agreement
shall not be amended without the consent of each Partner adversely affected if
such amendment would (i) convert a Limited Partner's interest in the Partnership
into a General Partner's interest, (ii) modify the limited liability of a
Limited Partner, (iii) except as provided in Section 8.1(c), alter the interest
of a Partner in Profits, Losses, component items thereof, or any Partnership
distributions, or (iv) remove the General Partner except for cause or add
additional General Partners.
(c) With the consent of a 50.1% Majority in Interest of
the Partners, the General Partner may amend this Agreement to admit new Limited
Partners and to change the Partners' respective interests in Profits, Losses,
component items thereof, and distributions in order to fairly reflect the value
of Capital Contributions made by new or existing Partners in relation to the
then value of the Partnership.
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8.2 Meetings of the Partners.
(a) Meetings of the Partners may be called by the General
Partner and shall be called upon the written request of Limited Partners holding
50% or more of the Sharing Percentages. The call shall state the nature of the
business to be transacted. Notice of any such meeting shall be given to all
Partners not less than seven days or more than 30 days prior to the date of such
meeting. Partners may vote in person or by proxy at such meeting. Whenever the
vote or consent of Partners is permitted or required under the Agreement, such
vote or consent may be given at a meeting of Partners or may be given in
accordance with the procedure prescribed in Section 8.1 hereof. Except as
otherwise expressly provided in the Agreement, the vote of a Majority in
Interest of the Partners shall control.
(b) For the purpose of determining the Partners entitled
to vote on, or to vote at, any meeting of the Partners or any adjournment
thereof, the General Partner or the Limited Partner requesting such meeting may
fix, in advance, a date as the record date for any such determination. Such date
shall not be more than 30 days or less than 10 days before any such meeting.
(c) Each Limited Partner may authorize any Person or
Persons to act for him by proxy on all matters in which a Limited Partner is
entitled to participate, including waiving notice of any meeting or voting or
participating at a meeting. Every proxy must be signed by the Limited Partner or
his attorney-in-fact. No proxy shall be valid after the expiration of 11 months
from the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Limited Partner executing it.
(d) Each meeting of Partners shall be conducted by the
General Partner or such other Person as the General Partner may appoint pursuant
to such rules for the conduct of the meeting as the General Partner or such
other Person deems appropriate.
ARTICLE IX
TRANSFERS OF INTERESTS
9.1 Admission of New Partners. Except as provided in Section
8.1(c), no Person shall be admitted as a Partner without the consent of all
Partners. Any Person becoming a Partner shall execute, and shall cause his
spouse to execute, a written acknowledgment that he has read this Agreement and
all amendments hereto and that he agrees to be bound by each and every of its
terms and conditions.
9.2 Restriction on Transfers. Unless otherwise provided in this
Partnership Agreement, all partnership interests, including voting power, are
assignable without the consent of the other parties to this Partnership
Agreement. A permitted transfer shall be effective as of the date specified in
the instruments relating to the transfer of the Interest in the Partnership
unless the Agreement requires a different date. The Interest of any transferee
shall be subject to the provisions of this Agreement even if such transferee
does not become a Partner, and the Partnership may disregard any
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transfer until it shall have received the transferee's written acknowledgment
that it shall hold the transferred Interest subject to all provisions of this
Agreement.
9.3 Notice of Transfers of Partnership Interests.
If a person desires to sell any Interest, he must give written notice
to the General Partner describing all the terms of that sale (including the
Interest to be sold, the purchase price, the terms for payment, the closing
date, any conditions to the sale, and the fair market value of any consideration
to be given in the form of property), and completely identifying the proposed
ultimate purchaser. The General Partner shall immediately notify the other
Partners upon receipt of such notice. The Partnership will then have the right
to examine, within the 30 days following the closing date described in the
seller's notice, the records of the seller and the purchaser to satisfy itself
that the sale has been consummated on the terms described in the seller's
notice. If the sale is not consummated on those terms and within the time
specified in the seller's notice, the Partnership may cancel on its books any
transfer of Interest previously made to reflect that sale.
9.4 Prohibited Transfers. Notwithstanding any other provision of
this Agreement, no voluntary transfer of an Interest in the Partnership may be
made if such transfer would adversely affect the classification of the
Partnership as a partnership for Texas franchise tax purposes or violate any
applicable provision of federal or state securities laws, and any attempt to do
so shall be null and void.
9.5 Right of Transferee to Become a Partner. Until the transferee
is admitted as a Partner, no Partner or other person may cast a vote with
respect to the transferred Interest, and that Interest will be entirely
disregarded for purposes of determining the existence of a quorum or the
validity of any action of the Partners. Any person or entity becoming a
substituted Partner shall pay the reasonable costs of such substitution plus the
reasonable costs and expenses the Partnership may incur in connection with any
federal income tax election made by the Partnership that benefits such
substituted Partner.
9.6 Right of Partner to Assign Partner's Interest. Notwithstanding
the provisions of Sections 9.2 and 9.5 hereof a Partner may assign its Interest
and all rights and obligations in connection therewith in the Partnership to any
Affiliate of such Partner without first having to obtain the written consent of
the Partners. The assignment by a Partner to an Affiliate shall become affective
on the date specified in the instruments relating, to the assignment of the
Interest of the Partnership. Upon assignment by a Partner, the Affiliate shall
become a Partner and the Interest of the Affiliate in the Partnership shall be
subject to the provisions of this Agreement.
ARTICLE X
GENERAL PARTNERS
10.1 Additional General Partners. Except as provided in this
Article X and Section 9.1 hereof, no Person shall be admitted to the Partnership
as a General Partner without the unanimous consent of the Partners. At any time
with the unanimous consent of the Partners any Person
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(including a Limited Partner) may become a General Partner on such terms and
conditions as may be agreed upon. Any person becoming a General Partner will
automatically have the rights, authorities, duties, and obligations of a General
Partner under this Agreement.
10.2 Resignation and Removal of the General Partner; Conversion of
General Partnership Interest.
(a) A General Partner may resign at any time on 30 days'
written notice to each other Partner.
(b) The General Partner may be removed -
(i) by a Majority in Interest of the Limited
Partners upon the material or repeated breach of this Agreement or any agreement
among the General Partner, not inconsistent with this Agreement, concerning the
rights and duties of the General Partner;
(ii) by a Majority in Interest of the Limited
Partners upon any event of withdrawal of that General Partner as defined in
paragraphs (a)(4) through (a)(10) of Section 4.02 of the Act; or
(iii) at any time with or without cause by a
two-thirds Majority in Interest of the Limited Partners.
(c) On the day immediately following the General
Partner's removal or resignation, or on the day immediately following the
transfer of any portion of a General Partner's Interest to a Person who has not
been admitted as a General Partner, his Interest (or that portion which has been
transferred) shall be automatically converted into a limited partner Interest,
except that he shall continue to be responsible, as if he had continued as a
General Partner, for any deficit balance in his Capital Account as of the date
his interest is converted and he shall continue to be entitled to allocations
under subsection 3.1 (b) of this Agreement.
10.3 Covenant Not to Withdraw, Transfer or Dissolve. Except as
otherwise permitted by this Agreement, the General Partner hereby covenants and
agrees not to (a) withdraw or attempt to withdraw from the Partnership, (b)
exercise any power under this Act to dissolve the Partnership, or (c) transfer
all or any portion of his interest in the Partnership as a General Partner.
Further, the General Partner hereby covenants and agrees to continue to carry
out the duties of a General Partner hereunder until the Partnership is wound up
and liquidated pursuant to Article XI hereof.
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ARTICLE XI
WITHDRAWAL AND WINDING UP
11.1 Withdrawal by a Partner. An event of withdrawal of a Partner
occurs on:
(a) Receipt by the Partnership of notice of the Partner's
express will to withdraw as a Partner on the date of receipt of the notice or on
a later date specified in the notice (whether or not such a withdrawal is in
contravention of this Agreement);
(b) Application by the Partnership or another Partner for
the Partner's expulsion by judicial decree; or
(c) Termination of a Partner's existence, or, in the case
of a Partner who is an individual, such Partner's death or the appointment of a
guardian or a general conservator for such Partner.
11.2 Redemption of Withdrawing Partner's Interest if Partnership
Not Wound Up. Except as otherwise provided in this Agreement, no Partner shall
have the right (by statute or otherwise) to have his Interest redeemed or
repurchased upon his withdrawal. If an event of withdrawal occurs, the Interest
of the withdrawing Partner may be redeemed by the Partnership as of the date of
withdrawal as described in this section, which shall also be considered the
"date of closing." If the Partnership elects to redeem the withdrawing Partner's
Interest, the withdrawing Partner will be entitled to be indemnified by the
Partnership against all liability to Partnership creditors for Partnership
obligations and to have the net fair market value of his Partnership Interest,
less his Partner Obligation. If a Partner's Obligation exceeds the amount
payable to him for his Interest, he shall remit the net amount of his Partner
Obligation in accordance with its terms, and no amount shall be payable to him.
If an event occurs within 60 days of the withdrawal that requires a
winding up of the Partnership, then any redemption which the Partnership has
elected to make shall be rescinded and the withdrawing Partner shall be deemed
to have continued to be a Partner through the winding up.
11.3 Distribution in Liquidation of a Partner's Interest. If the
Interest of a Partner is liquidated (other than by a purchase by another Partner
or the Partnership) any distribution to that Partner shall be made in an amount
equal to the positive balance of that Partner's Capital Account, after giving
effect to all contributions, distributions, and allocations for all periods
including the year during which such liquidation occurs, in compliance with
Treas. Regs. Section 1.704-1(b)(2)(ii)(b)(2). If that Partner's Capital Account
has a deficit balance (after giving effect to all contributions, distributions,
and allocations for all periods, including the year during which such
liquidation occurs), and if that Partner has an obligation under this Agreement
to restore any negative balance in his Capital Account, that Partner shall
contribute to the capital of the Partnership the amount necessary to restore
such deficit balance to zero in compliance with Treas. Regs. Section
1.704-1(b)(2)(ii)(b)(3). Such deficit restoration obligation on the part of the
Partner shall be considered to be a debt to only the Partnership and to no other
party. A Partner shall also remain liable for any
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other Partner Obligation he may have to the Partnership, and the Partnership may
offset any distribution due to a Partner against any such Partner Obligation. If
a Partner's Obligation exceeds the amount payable to him for his Interest, he
shall remit the net amount of his Partner Obligation in accordance with its
terms, and no amount shall be payable to him.
11.4 Liquidating Events. The Partnership shall dissolve and
commence winding up and liquidating upon the first to occur of any of the
following ("Liquidating Events"):
(a) The sale of all or substantially all of the
Partnership's Property;
(b) The unanimous vote of all the Partners to dissolve,
wind up, and liquidate the Partnership;
(c) The happening of any other event that makes it
unlawful, impossible, or impractical to carry on the business of the
Partnership; or
(d) The expulsion, bankruptcy, or other event of
withdrawal of a General Partner or of the sole remaining General Partner.
11.5 Winding Up. Upon the occurrence of a Liquidating Event, the
Partnership shall continue solely for the purposes of winding up its affairs in
an orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Partners. No Partner shall take any action that is inconsistent
with, or not necessary to or appropriate for, the winding up of the
Partnership's business and affairs. The General Partner (or, in the event there
is no remaining General Partner, any Person elected by a Majority in Interest of
the Limited Partners) shall be responsible for overseeing the winding up and
dissolution of the Partnership, including the filing of a certificate of
cancellation as required by Section 2.03 of the Act, and shall take full account
of the Partnership's liabilities and property. Each Partner shall repay or
remain liable for any Partner Obligation which he owes the Partnership in
accordance with its terms, and the General Partner is authorized to employ all
legal remedies for the collection of such monies. The Partnership's property
shall be liquidated as promptly as is consistent with obtaining the fair value
thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be
applied and distributed in the following order:
(a) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors other than the Partners;
(b) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the Limited Partners;
(c) Third, to the payment and discharge of all of the
Partnership's debts and liabilities to the General Partner; and
(d) Thereafter, the balance, if any, to the Partners in
proportion of the positive balances of their Capital Accounts, after giving
effect to all contributions, distributions, and allocations for all periods.
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11.6 No Additional Compensation. No General Partner shall receive
any additional compensation for any services performed pursuant to this Article
XI.
11.7 Compliance With Timing Requirements of Regulations. In the
event the Partnership is "liquidated" within the meaning of Treas. Regs. Section
1.704-1(b)(2)(ii)(g), then (a) distributions shall be made pursuant to this
Article XI to the Partners who have positive Capital Accounts in compliance with
Treas. Regs. Section 1.704-1(b)(2)(ii)(b) (2), and (b) if the General Partner's
Capital Account has a deficit balance (after giving effect to all contributions,
distributions, and allocations for all taxable years, including the year during
which such liquidation occurs), such General Partner shall contribute to the
capital of the Partnership the amount necessary to restore such deficit balance
to zero in compliance with Treas. Regs. Section 1.704-1(b)(2)(ii)(b)(3). Such
deficit restoration obligation on the part of the General Partner shall be
considered to be a debt to only the Partnership and to no other party and it
shall be incurred by the General Partner upon liquidation as provided herein. If
any Limited Partner has a deficit balance in his Capital Account (after giving
effect to all contributions, distributions and allocations for all taxable
years, including the year during which such liquidation occurs), such Limited
Partner shall have no obligation to make, any contribution to the capital of the
Partnership with respect to such deficit except to the extent that the Limited
Partner is otherwise obligated to make a Capital Contribution under this
Agreement, and such deficit shall not be considered a debt owed to the
Partnership or to any other Person for any purpose whatsoever. If a Partner's
Obligation exceeds the amount payable to him for his Interest, he shall remit
the net amount of his Partner Obligation in accordance with its terms, and no
amount shall be payable to him.
In the discretion of the General Partner, a pro rata portion of the
distributions that would otherwise be made to the Partners pursuant to this
Article XI may be distributed to a trust established for the benefit of the
Partners for the purposes of liquidating Partnership assets, collecting amounts
owed to the Partnership, and paying any contested, contingent or unforeseen
liabilities or obligations of the Partnership or of the General Partner arising
out of or in connection with the Partnership. The assets of any such trust shall
be distributed to the Partners, from time to time, in the reasonable discretion
of the General Partner, in the same proportions as the amount distributed to
such trust by the Partnership would otherwise have been distributed among the
Partners pursuant to this Agreement.
11.8 Consequences of a Tax Termination. Notwithstanding any other
provision of this Article XI, in the event the Partnership is liquidated within
the meaning of Treas. Regs. 1.704-1(b)(2)(ii)(g) but no Liquidating Event has
occurred, the Property shall not be liquidated, the Partnership's liabilities
shall not be paid or discharged, and the Partnership's affairs shall not be
wound up.
11.9 Rights of Limited Partner. Except as otherwise provided in
this Agreement, each Limited Partner shall look solely to the assets of the
Partnership for the return of his Capital Contribution and shall have no right
or power to demand or receive property other than cash from the Partnership.
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ARTICLE XII
POWER OF ATTORNEY
12.1 General Partner as Attorney-In-Fact. The Limited Partner
hereby makes, constitutes, and appoints each General Partner and any successor
General Partner, with full power of substitution and resubstitution, his true
and lawful attorney-in-fact for him and in his name, place, and stead and for
his use and benefit, to sign, execute, certify, acknowledge, swear to, file, and
record (a) this Agreement and all agreements, certificates, instruments, and
other documents amending or changing this Agreement as it now reads or is
hereafter amended which the General Partner may deem necessary, desirable, or
appropriate including, without limitation, amendments or changes to reflect (i)
the exercise by the General Partner of any power granted to it under this
Agreement; (ii) any amendments adopted by the Partners in accordance with the
terms of this Agreement; (iii) the admission of any substituted Partner; and
(iv) the disposition by any Partner of its interest in the Partnership; and (b)
any certificates, instruments, and documents as may be required by, or may be
appropriate under, the laws of the State of Texas or any other state or
jurisdiction in which the Partnership is doing or intends to do business. The
Limited Partner authorizes each such attorney-in-fact to take any further action
which such attorney-in-fact shall consider necessary or advisable in connection
with any of the foregoing, hereby giving each such attorney-in-fact full power
and authority to do and perform each and every act or thing whatsoever requisite
or advisable to be done in connection with the foregoing as fully as the Limited
Partner might or could do personally, and hereby ratifying and confirming all
that any such attorney-in-fact shall lawfully do or cause to be done by virtue
thereof or hereof.
12.2 Nature of Special Power. The power of attorney granted
pursuant to this Article XII:
(a) is a special power of attorney coupled with an
interest and is irrevocable;
(b) may be exercised by any such attorney-in-fact by
setting forth the name of the Limited Partner executing any agreement,
certificate, instrument, or other document with the single signature of any such
attorney-in-fact acting as attorney-in-fact for the Limited Partner; and
(c) shall survive the death, disability, legal
incapacity, bankruptcy, insolvency, dissolution, or cessation of existence of
the Limited Partner and shall survive the delivery of an assignment by the
Limited Partner of the whole or a portion of his Interest in the Partnership,
except that where the assignment is of the Limited Partner's entire Interest in
the Partnership and the assignee, with the consent of the General Partner, is
admitted as a substituted Limited Partner, the power of attorney shall survive
the delivery of such assignment for the sole purpose of enabling any such
attorney-in-fact to effect such substitution.
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ARTICLE XIII
MISCELLANEOUS
13.1 Notices. Any notice, request, payment, demand, or
communication required or permitted to be given by any provision of this
Agreement shall be in writing and shall be delivered personally to the Person or
to an officer of the Person to whom the same is directed, or sent by regular,
registered, or certified mail, by overnight courier or telecopy, addressed as
follows, or to such other address as such Person may from time to time specify
by notice to the Partners:
(a) If to the Partnership, at the address set forth in
Section 1.5 hereof; and
(b) If to the General Partner or a Limited Partner, to
the address set forth in Exhibit "A" hereto.
Any such notice shall be deemed to be delivered, given, and received for all
purposes as of the date so delivered, if delivered personally or if sent by
overnight courier, telecopy or regular mail, or three days after the date on
which the same was deposited in a regularly maintained receptacle for the
deposit of United States mail, if sent by registered or certified mail, postage
and charges prepaid. If an attempt to give notice by facsimile transmission
fails because of any problem with the recipient's designated facsimile number or
facsimile equipment, such notice will nevertheless be considered to have been
effected on the day of that attempted transmission if it is also transmitted
that day by overnight delivery to the recipient and is actually received on the
next following day. Any Person may from time to time specify a different address
by notice to the Partnership and the Partners.
13.2 Binding Effect. Except as otherwise provided in this
Agreement, every covenant, term, and provision of this Agreement shall be
binding upon and inure to the benefit of the Partners and their respective
heirs, legatees, legal representatives, successors, transferees, and assigns.
13.3 Construction. Every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any party.
13.4 Headings. Section and other headings contained in this
Agreement are for reference purposes only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement or
any provision hereof.
13.5 Severability. Every provision of this Agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
or legality of the remainder of this Agreement.
13.6 Incorporation by Reference. Every exhibit, schedule, and other
appendix attached to this Agreement and referred to herein is hereby
incorporated in this Agreement by reference.
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13.7 Further Action. Each Partner, upon the request of the General
Partner, agrees to perform all further acts and execute, acknowledge, and
deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the provisions of this Agreement.
13.8 Variation of Pronouns. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, as the identity
of the Person or Persons may require. The use .of the singular shall include a
reference to the plural and vice-versa unless the context clearly requires
otherwise.
13.9 Governing Law. The internal laws, but not the law of
conflicts, of the State of Texas shall govern the validity of this Agreement,
the construction of its terms, and the interpretation of the rights and duties
of the Partners.
13.10 Waiver of Action for Partition. Each of the Partners
irrevocably waives any right that he may have to maintain any action for
partition with respect to any of the Partnership's property.
13.11 Counterpart Execution. This Agreement may be executed in any
number of counterparts with the same effect as if all of the Partners had signed
the same document. All counterparts shall be construed together and shall
constitute one agreement.
13.12 Sole and Absolute Discretion. Except as otherwise provided in
this Agreement, all actions which the General Partner may take and all
determinations which the General Partner may make pursuant to this Agreement may
be taken and made at the sole and absolute discretion of such General Partner.
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Executed to be effective on January 5, 2000.
GENERAL PARTNER:
By: SANMINA GENERAL, LLC
a Delaware limited liability company
By:__________________________________
Name:________________________________
Title:_______________________________
LIMITED PARTNER:
By: SANMINA LIMITED, LLC
A Delaware limited liability company
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT "A"
TO THE AGREEMENT OF LIMITED PARTNERSHIP OF
SANMINA TEXAS, L.P.
GENERAL PARTNER
NAME, ADDRESS AND INITIAL CAPITAL
TELECOPY NUMBER CONTRIBUTION CONTRIBUTION SHARING PERCENTAGE
- -------------------- -------------------- --------------- ------------------
Sanmina General, LLC 79 shares of common 1.00% 1.00%
1201 W. Crosby Rd stock of Sanmina
Carrollton, TX 77002 Cable Systems, Inc.
972-323-3640
LIMITED PARTNER
NAME, ADDRESS AND INITIAL CAPITAL
TELECOPY NUMBER CONTRIBUTION CONTRIBUTION SHARING PERCENTAGE
- -------------------- ----------------- ---------------- -------------------
Sanmina Limited, LLC 7,856 shares of 99.00% 99.00%
2700 N. First Street common stock of
San Jose, CA 95131 Sanmina Cable
Systems, Inc.