RESTATED PARTNERSHIP AGREEMENT, made as of this 8th day of June, 1994, by and
between Corning Clinical Laboratories Inc., a Maryland corporation ("CCL") and
Diagnostic Reference Services, Inc., a Maryland corporation ("DRS")
(individually a "Partner" and collectively the "Partners")
1. FORMATION, NAME AND PURPOSE OF PARTNERSHIP - The Partners hereby
form a Partnership under the name of PATHOLOGY BUILDING PARTNERSHIP (the
"Partnership"), or such other name as the Partners may adopt from time to time.
The Partnership shall be conducted for the purpose of acquiring, selling,
leasing, mortgaging, encumbering, developing and owning real estate. The
Partnership may engage in such investment business of a similar or related
nature as shall be unanimously agreed upon by the Partners. The foregoing powers
and purposes of the Partnership shall also apply to personal or mixed property
relating to such real estate investments. In furtherance of the business and
purposes of the Partnership, the Partnership may enter into such contracts,
agreements, ventures or arrangement with such other joint ventures,
partnerships, corporations, trusts, associations, individual or other entities
as may be unanimously agreed by the Partners to be necessary to accomplish any
of the Partnership purposes.
2. PRINCIPAL OFFICE - The principal office of the Partnership shall be
located at 1901 Sulphur Spring Road, Baltimore, Maryland 21227 or such other
locations as may be agreed upon by the Partners.
3. TERM - The Partnership shall begin and become effective as of the
date hereof and shall continue until terminated as hereinafter provided.
4. CAPITAL AND CAPITAL ACCOUNTS
(a) Capital Accounts - A capital account shall be maintained for
each Partner and shall be credited with the amounts of contributions to the
Partnership when made, shall be credited or charged, as the case may be, with
its distributive share of the Partnership profit, gain or loss, and shall be
charged with the amounts of any distributions to its Partners pursuant to
subparagraph 6 (c).
(b) No Interest - No interest shall be paid by the Partnership on
any capital contributed to the Partnership by any Partner.
5. LOANS AND ADDITIONAL CAPITAL CONTRIBUTIONS -
(a) Loans - Any Partner may, at any time, loan to the Partnership
such additional funds as may be mutually agreed upon by the Partners upon such
terms as the Partners may from time to time agree.
(b) Additional Capital - In the event that, at any time, additional
funds in excess of the funds contributed or loaned to the Partnership are
required by the Partnership for or
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in respect of the acquisition, ownership, development, construction, management,
lease and /or operation of any Partnership property or any improvements thereon,
or for or in respect of any other Partnership purpose (including the payment of
carrying charges and costs, real estate taxes and assessments, hazard and
liability insurance, principal and/or interest on any mortgage on Partnership
property or on any other Partnership loan, operating expenses and/or any other
expenses of the Partnership), the Partners may, if they so elect, endeavor, on
behalf of the Partnership to borrow such required funds, with interest at then
prevailing rates, from commercial banks, savings and loan associations and/or
other lending institutions or persons (including any Partner) and if and to the
extent such required funds are not so obtained, the entire amount of such
required funds shall be contributed or loaned, as the Partners may agree, to the
capital of the Partnership by the Partners in proportion to their interest in
the profits of the Partnership, as provided in subparagraph 6 (a).
6. INCOME ACCOUNTS, PROFITS AND LOSSES -
(a) Percentage of Interest - The net profit or net loss of the
Partnership shall be distributable or chargeable, as the case may be, to the
Partners in the following proportions.
CCL 50%
DRS 50%
(b) Profits and Losses - An individual income account shall be
maintained for each Partner to which the net profits and losses in the
proportions set forth in subparagraph 6 (a) shall be lcredited or debited, as
the case may be.
(c) Accounting - An accounting shall be made by the Partnership for
each calendar year, not later than ninety (90) days after the end of each such
year, to determine the Partners' respective shares of net profits or net losses,
which shall be credited or debited as the case may be, to the Partners'
respective capital accounts.
(d) Balance in Income Account - A credit balance in a Partnership
income account shall constitute a liability of the Partnership payable to the
Partner; it shall not constitute a part of that Partner's interest in the
capital of the Partnership. A debit balance in a Partner's income account,
whether occasioned by drawings in excess of his or her share of Partnership net
profits or by charging him or her for his or her share of Partnership net
losses, shall constitute an obligation of that Partner to the Partnership and
shall not reduce his or her interest in the capital of the Partnership.
7. SALARIES AND DRAWINGS - No Partner shall receive any compensation
for services rendered to the Partnership unless salary or compensation therefor
has been approved in writing by all of the Partners. Each Partner may, from time
to time, withdraw the credit balance from its income account. No additional
share of profits shall inure to any Partner by reason of capital or income
account being in excess of the capital or income account of the others.
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8. TITLE TO PROPERTY - Legal title to any real estate owned by the
Partnership shall be held in the name of the Partnership; provided, however, the
Partnership; may, with the written approval of all Partners, hold title to its
real and personal property in the names of nominees, trustees or agents or in
whatever manner the Partners may find convenient and advantageous. Each Partner
holding title to such property agrees to abide by and do whatever act is
required by the partnership with respect to such property including, but not by
way of limitation, the execution of all requisite deeds, assignments, deeds of
trust or other instruments and further agrees that all property so held shall be
treated as Partnership property subject to the terms of this Partnership
Agreement.
9. TIME DEVOTED TO PARTNERSHIP AFFAIRS - It is expressly agreed and
understood that each Partner shall devote only such time and efforts to the
Partnership business as the Partners shall mutually determine to be necessary.
Each partner may have other business interests and may engage in any other
business or trade, profession, or employment whatsoever, on his or her own
account, or in partnership with or as an employee of or as an officer, director
or shareholder of any other person, firm or corporation.
10. MANAGEMENT OF PARTNERSHIP BUSINESS
(a) UNANIMOUS CONSENT - Unanimous consent of the Partners shall be
required for the management, conduct and operation of the Partnership business,
respecting the following transactions:
(i) Purchasing or selling or contracting to purchase or sell any
real property of or for the Partnership;
(ii) Mortgaging any property of the Partnership, whether such
mortgage be a first or second mortgage;
(iii) Modifying any Partnership mortgage;
(iv) Borrowing or lending money on behalf of the Partnership;
(v) Assigning, pledging or transferring any claims or debts due
to the Partnership or releasing any such claims or debts except upon payment in
full;
(vi) Making an assignment for the benefit of creditors;
(vii) Making, delivering or accepting any commercial paper or
executing any note or bond on behalf of the Partnership;
(viii) Endorsing any note or acting as an accommodation party or
otherwise becoming a surety for any person on behalf of the Partnership; or
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(ix) Assigning, mortgaging, pledging, selling or in any way
transferring a Partner's interest in the Partnership or in its capital assets or
property, except as may be otherwise specifically provided herein.
(b) Managing Partner - Subject to the foregoing subparagraph 10 (a),
the Partners hereby agree that CCL shall be the managing Partner of the
Partnership, and in that capacity, shall have the power to carry out the
day-to-day business of the Partnership, including, but not limited to, the
following:
(i) Carrying out the duties of the Partnership under the terms
of any lease pursuant to which the Partnership is a landlord;
(ii) Carrying out the Partnership's duties under its
CrossEasement Agreement with Beltway Professional Building Partnership; and
(iii) Keeping and attending to the financial records of the
Partnership, communicating and coordinating with the attorneys and accountants
retained to represent the Partnership, and the performance of all other
activities of the Partnership in the ordinary course of its business.
11. VOLUNTARY TERMINATION
(a) Dissolution - The Partners may voluntarily agree to dissolve the
Partnership, and in such event or upon the dissolution of the Partnership for
any reason except as otherwise provided in paragraphs 13, 14 and 15 hereof, the
affairs of the Partnership shall be liquidated and terminated as follows:
(1) A full accounting shall be made. The profits and losses of
the Partnership shall be determined to the date of dissolution and transferred
to the respective income accounts of the Partners.
(ii) All Partnership property shall be sold at its fair market
value at the date of dissolution. All real property owned by the Partnership
shall be listed for sale with a licensed Maryland Real Estate Broker within
sixty (60) days of the date of dissolution at a mutually agreeable price, and
shall be sold in accordance with the terms thereof. Any gain or loss on
disposition of Partnership properties shall be credited or charged to the
Partners in the proportion of their interests under paragraph 6 hereof in the
net profits and losses of the Partnership.
(iii) The assets of the Partnership shall be applied or
distributed in the following order of priorities:
(aa) In payment of debts of the Partnership to creditors
other than the Partners;
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(bb) In payment of loans to the Partnership by the
Partners;
(cc) In payment of the amounts due to the Partners as
reflected in their income accounts; and
(dd) The remaining assets, if any, shall be distributed in
proportionate discharge of the respective capital accounts of the Partners. Any
debit balance in the income account of a Partner, however arising, shall be
treated as a reduction of his or her capital account, and the excess as a
reduction of his or her capital account, and the excess thereof or any debit
balance in his or her capital account shall be repaid to the Partnership
promptly upon the demand of any other partner.
(b) Applicability - This paragraph shall not apply where paragraphs
13 or 14 apply, dealing respectively with withdrawal of a Partner and
involuntary transfers, unless such paragraphs make this paragraph 11 applicable.
12. RESTRICTIONS ON TRANSFER - No Partner may give, transfer, sell,
convey or assign all or any part of his or her interest in the Partnership
without the written prior consent of all of the other Partners.
(a) Right of First Refusal - In the absence of such written consent
to all of the other Partners, any Partner desiring to sell (the "selling
Partner") all or any part of its Partnership interest, shall give written notice
of such intention to the other Partners (the "remaining Partners"), and such
notice shall contain a true copy of the terms and conditions of any bona fide
offer of sale it has then received, together with the name and address of the
prospective purchaser making said offer (the "Offeror"). For a period of thirty
(30) days after receipt of such notice, there shall be rights of first refusal
as follows:
An election by a Partner to exercise its right of first refusal
shall be in writing with a copy to all other Partners. If any applicable right
of first refusal is not exercised within the thirty (3) day period, all of the
remaining Partners shall have the option to purchase the selling Partner's
Partnership share in proportion to their interests in the Partnership, within
the following thirty (30) days. If all remaining Partners do not desire to
acquire their proportionate interest of the selling Partner's interest, any
remaining Partner or Partners who do desire to acquire such interest, shall be
entitled to acquire a proportionate share of the selling Partner's interest. If
the option(s) to purchase the interest of the selling Partner has/have not been
exercised within the sixty (60) day period so that one hundred percent (100%) of
the selling Partner's interest has been purchased, the selling Partner shall
then be free to sell the interest to the Offeror uon the terms and conditions of
said offer, provided however, that the sale must be consummated within sixty
(60) days after the expiration of the optional sixty (60) day period or the sale
shall be prohibited unless otherwise mutually agreed in writing by the Partners.
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13. WITHDRAWAL OF PARTNER -
(a) No Termination - The withdrawal from the Partnership of a
Partner shall not automatically terminate or dissolve the Partnership, but the
Partnership and the Partnership business shall continue.
(b) Rights of First Refusal - Notwithstanding the foregoing
provision, the remaining Partners shall have the right to purchase the interest
of a withdrawing Partner in the Partnership, or to terminate and liquidate the
Partnership business. The rights and orders of first refusal outlined in
subparagraph 12 (a) shall apply, except that the purchase price shall be as
described in subparagraph 13 (c).
(c) Purchase Price - For the purpose of this paragraph 13, the
purchase price for a withdrawing Partner's Partnership interest shall be the
fair market value of such Partner's interest as of the day on which the Partner
elects to withdraw. For purposes of this subparagraph, the Partner(s) who
elect(s) the purchase shall be referred to as "Buyer"; the withdrawing Partner
shall be referred to as "Seller."
(i) The fair market value of the tangible property of the
Partnership shall, for the foregoing purposes, be determined as follows:
(aa) Within thirty (30) days after the Buyer elects to
purchase Seller's Partnership interest, an appraiser or appraisers shall be
jointly selected by the Buyer and the Seller and the determination of such
jointly selected appraiser or appraisers as to the fair market value of the
tangible property of the Partnership shall be binding and conclusive on all
parties.
(bb) If the Seller and the Buyer (or Buyers) do not agree
upon the selection of an appraiser, or appraisers, as porvided in subparagraph
13 (c) (i) (aa) hereof, the Seller shall appoint an appraiser and the Buyer (or
each Buyer, if necessary) shall appoint an appraiser. The appraisers so
appointed shall select another appraiser within fifteen (15) days after they
shall have been appointed. If either the Seller or Buyer fail to so appoint an
appraiser, the appraiser duly appointed by the other shall serve as the sole
appraiser. The appraiser(s) so appointed shall, as promptly and diligently as
possible, determine the fair market value of the tangible property of the
Partnership, and the determination of a majority of said appraisers, or the sole
appraiser if only one is appointed, shall be determinative of the fair market
value of the tangible property of the Partnership for the purpose of this
Partnership Agreement and shall be binding and conclusive on all parties. Each
such appraiser shall be a member of the American Institute of Real Estate
Appraisers. The appraisers' fees shall be divided equally between Seller and
Buyer.
(ii) After the determination of the fair market value of the
tangible property of the Partnership in accordance with the foregoing
provisions, the difference between such fair market value and the book value of
such tangible property shall be credited or debited, as the case may be, to the
capital accounts of the Partners in the proportion in which they share
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net profits or net losses, as provided in subparagraph 6 (a) hereof. After the
foregoing adjustments have been made, the value of the Partnership interest of
the Seller shall be equal to the sum of the following items as of the date it
elected to withdraw.
(aa) The balance in the Seller's capital account, as
adjusted;
(bb) The balance in the Seller's income account; and
(cc) The Seller's share of Partnership profits or losses,
as the case may be, realized between the end of the last calendar year and the
date of the valuation of the Partnership interest as hereinbefore provided.
(d) Payment of Purchase - The Seller shall be paid for its interest by
certified or cashier's check or wire transfer of immediately available funds by
each such Buyer's by each such buyer at Closing, which shall be held not later
than one hundred eighty (180) days after notice to withdraw.
(e) Termination - In the event that one hundred percent (100%) of the
withdrawing Partner's Partnership interest is not purchased pursuant to
subparagraph 13 (b), then the Partnership shall be deemed to have been
terminated pursuant to paragraph 11 hereof as of sixty (60) days from the
effective date of withdrawal, death or adjudication of mental incompetence, as
the case may be.
14. INVOLUNTARY TRANSFER - In the event that the interest of a Partner
shall be attached or taken in execution, or in the event that a Partner shall be
adjudicated bankrupt or shall make an assignment for the benefit of creditors
(despite the restrictions set forth in subparagraph 10 (a)), or in the event
that its interest in the Partnership shall be made subject to a charging order,
the Partnership may liquidate the Partnership business and terminate the
Partnership pursuant to Paragraph 11 or may elect to continue to carry on the
Partnership business without interruption. If the Partnership elects to continue
to carry on the Partnership business, the Partnership shall have the right to
liquidate the interest of such Partner in the Partnership by settling with such
assignee, trustee in bankruptcy, or attaching court or officer taking the same
in execution, by determining the value of such Partner's interest in accordance
with Paragraph 13, and by paying the value of such Partnership interest to such
Partner's assignee, trustee in bankruptcy, or attaching court or officer, but
not exceeding the indebtedness and proper items of expense. The balance of the
value of the Partnership interest shall be distributable to the Partner so
affected pursuant to the provisions of Paragraph 13.
15. SALE OR DISPOSITION - In the event of the sale or disposition of
all or substantially all of the property of the Partnership, the net proceeds
therefrom shall be distributed among the Partners in accordance with the
provisions of Paragraph 11. The Partnership shall terminate when all the
property owned by the Partnership shall have been disposed of and the net
proceeds, after making proper provision for the liabiities of the Partnership,
shall have been distributed among the parties in accordance with the provisions
of Paragraph 11.
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16. BOOKS, RECORDS, ACCOUNTING AND REPORTS -
(a) Availability - At all times during the existence of the
Partnership, the Partners shall keep or cause to be kept full and true books of
account in accordance with the accounting method followed by the Partnership for
federal income tax purposes and otherwise in accordance with good accounting
principles and procedures applied in a consistent manner, which shall reflect
all Partnership transactions and shall be appropriate and adequate for the
Partnership's business. Such books of account, together with a copy of this
Agreement and any amendments thereto, shall at all times be maintained at the
offices of the Partnership at its principal office. Any Partner or a duly
authorized representative shall have the right at any time to inspect and copy
such books and documents during normal business hours upon reasonable notice.
(b) Financial Reports - An independent certified public accountant
of the Partnership, as shall be selected by the Partners, shall, within (90)
days after the end of each fiscal year of the Partnership, prepare and deliver
to each Partner a financial report of the Partnership for such period including
(i) a statement of Partnership income and expenses; (ii) a balance sheet and a
profit and loss statement; (iii) a schedule of distributions to the Partners
allocating to the Partners each item of taxable income, gain, loss, deduction,
credit and item of tax preference, (iv) all necessary tax reporting information
required by the Partners for preparation of their respective income tax returns;
(v) a copy of the tax returns (federal, state and local, if any) of the
Partnership for each fiscal year; and (vi) such other matters as the Partners
may reasonably deem material to the operations of the Partnership.
The costs and expenses of preparing and furnishing the financial
reports required by this Paragraph 16 in respect of all fiscal years of the
Partnership shall be paid by the Partnership.
(c) Accounting Decisions - All decisions as to accounting matters
shall be made by the Partners in accordance with the cash receipts and
disbursements method of accounting and, otherwise, in accordance with good
accounting principles applied on a consistent basis.
(d) Accounting Method - The Partnership shall use the cash method
of accounting.
17. BANK ACCOUNTS - All funds of the Partnership are to be deposited in
the Partnership's name in such separate bank account or accounts as may be
designated by the Partners and shall be withdrawn on the signature of the
Partners. Funds of the Partnership shall not be comingled with any other funds.
18. NOTICES - All notices, demands, requests, consents or other
communications required or permitted to be given or made under this Agreement
shall be in writing and signed by the party giving the same and shall be deemed
to have been given or made when mailed by certified mail, postage prepaid, to
the addresses as follows:
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Corning Clinical Laboratories Inc.
1901 Sulphur Spring Road
Baltimore, MD 21227
Diagnostic Reference Services Inc.
1901 Sulphur SpringRoad
Baltimore, MD 21227
w/a copy to:
Corning Clinical Laboratories Inc.
One Malcolm Avenue
Teterboro, NJ 07608
Attention: General Counsel
19. JUDICIAL MODIFICATION - If any court shall determine that any
provision contained in this Agreement is unenforceable in accordance with its
terms, it is the intention of the parties that this Agreement shall not thereby
be terminated but shall be deemed to be amended to the extent required to render
it valid and enforceable, such amendment to apply only with respect to the
operation of this Agreement in the jurisdiction of the court that has made the
determination.
20. TITLES AND CAPTIONS - Paragraph titles or captions contained in
this Agreement are inserted only as a matter of convenience and for reference
purposes and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provisions hereof.
21. PERSON AND GENDER - Whenever the singular number is used in this
Agreement and when required by the context, the same shall include the plural,
and the masculine gender shall include the feminine and neuter genders and the
word "person" shall include a corporation, firm, partnership or other form of
association.
22. BINDING AGREEMENT - Subject to the restrictions on assignment
herein contained, the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of the sucessors, assigns, personal
representatives, estates, heirs and legatees of the respective Partners.
23. APPLICABLE LAW - The terms and provisions of this Agreement and any
dispute arising hereunder shall be governed by the laws of the State of
Maryland.
24. NO AGENCY INTENDED - Nothing herein contained shall be construed to
constitute any Partner the agent of another Partner, except as provided herein,
or in any manner to limit the Partners in the carrying on of their own
respective businesses or activities.
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25. AGREEMENTS BEYOND TERM - The Partnership shall have the power to
enter into leases for a period of years extending beyond the dissolution of the
Partnership.
26. FINAL AGREEMENT - This Agreement constitutes the entire Partnership
Agreement between the parties hereto and is intended to be an integration of all
prior agreements, oral or written, between the parties hereto with respect to
the subject matter hereof.
27. COUNTERPARTS - This Agreement may be executed simultaneously and in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals the day and year first above written.
CORNING CLINICAL LABORATORIES INC. DIAGNOSTIC REFERENCE SERVICES, INC.
By:________________________ By:_________________________
Name: Name:
Title: Title:
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