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EXHIBIT 3.50
LIMITED PARTNERSHIP AGREEMENT
OF
AMERIPATH TEXAS, LP
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Dated: August 31, 2000
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TABLE OF CONTENTS
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ARTICLE 1 FORMATION AND ORGANIZATION ............................................1
1.1. Formation; Name of Partnership ........................................1
1.2. Definitions ...........................................................1
1.3. Term ..................................................................4
1.4. Principal Office ......................................................4
1.5. Registered Agent and Registered Office ................................4
1.6. Purpose of the Partnership ............................................4
ARTICLE II MANAGEMENT ............................................................4
2.1. Powers of General Partner .............................................4
2.2. Time ..................................................................6
2.3. Reimbursement of Costs ................................................6
2.4. Limitation on the General Partner's Responsibility ....................6
2.5. The Limited Partner Shall Not Act .....................................6
2.6. Power of Attorney .....................................................6
2.7. Indemnification .......................................................7
2.7.1. Indemnification; Nonexclusivity .............................7
2.7.2. Advancement or Reimbursement of Expenses ....................7
2.7.3. Requests for Indemnification; Determination of Request ......8
2.7.4. Effect of Certain Proceedings ...............................8
2.7.5. Certain Actions where Indemnification is not Provided;
Expenses of Enforcement of Section ..........................8
2.7.6. Indemnification of other Officers, Employees and Agents .....9
2.7.7. Survival of Indemnification .................................9
2.7.8. Severability ................................................9
2.7.9. Definitions .................................................9
2.8. 0fficers .............................................................10
ARTICLE III CAPITAL OF THE PARTNERSHIP ...........................................11
3.1. Capital Contributions and Partnership Interests of the Partners ......11
3.1.1. Initial Contributions ......................................11
3.1.2. No Additional Contributions ................................11
3.2. Partnership Interests; Capital Percentages ...........................11
3.3. Additional Funds to Cover Costs ......................................11
3.3.1. Third Party Loans ..........................................11
3.3.2. Optional Partner Loans .....................................11
3.3.3. Interest Rate ..............................................11
3.4. No Further Obligation ................................................12
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ARTICLE IV ALLOCATIONS, NET CASH FLOW AND DISTRIBUTIONS .........................12
4.1 Allocations ..........................................................12
4.1.1. In General .................................................12
4.1.2. Net Income and Loss ........................................12
4.1.3. Restrictions on Allocations ................................12
4.1.4. Contributed Property .......................................13
4.2. Computation of Capital Account .......................................14
4.3. Net Cash Flow ........................................................14
4.4. Distributions of Net Cash Flow .......................................14
ARTICLE V ACCOUNTING AND TAX MATTERS ...........................................15
5.1. Accounting Records, Accounting Year ..................................15
5.2. Inspection ...........................................................15
5.3. Tax Matters ..........................................................15
5.3.1. Tax Returns ................................................15
5.3.2. Tax Matters Partner ........................................15
5.3.3. Expenses ...................................................15
5.4. Income Tax Elections .................................................16
ARTICLE VI TRANSFERS OF PARTNERSHIP INTERESTS ...................................16
ARTICLE VII DISSOLUTION, WINDING UP AND TERMINATION ..............................16
7.1. Causes ...............................................................16
7.1.1. In General .................................................16
7.1.2. Bankruptcy .................................................17
7.1.3. Effective Date and Reconstitution ..........................17
7.2. Liquidator ...........................................................17
7.2.1. In General .................................................17
7.2.2. Successor Liquidator .......................................18
7.2.3. Powers .....................................................18
7.3. Court Appointment of Liquidator ......................................18
7.4 Liquidation ..........................................................18
7.5. Creation of Reserves .................................................19
7.6. Final Audit ..........................................................19
ARTICLE VIII MISCELLANEOUS ........................................................20
8.1. Notices and Approvals ................................................20
8.2. Force Majeure ........................................................20
8.3. Applicable Law .......................................................20
8.4. Successors and Assigns ...............................................20
8.5. Amendments ...........................................................20
8.6. Entire Agreement .....................................................21
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8.7. Attorneys' Fees ......................................................21
8.8. Waiver of Partition ..................................................21
8.9. Gender and Number ....................................................21
8.10. Captions .............................................................21
8.11. Counterparts .........................................................21
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Exhibit A
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LIMITED PARTNERSHIP AGREEMENT
OF
AMERIPATH TEXAS, LP
THIS LIMITED PARTNERSHIP AGREEMENT OF AMERIPATH TEXAS, LP, made and
entered into as of August 30, 2000, between API NO. 1, LLC, a Delaware limited
liability company, as general partner ("GENERAL PARTNER "), and API NO. 2, LLC a
Delaware limited liability company, as limited partner ("LIMITED PARTNER").
WITNESSETH:
WHEREAS, the General Partner and the Limited Partner (referred to
herein collectively as the "PARTNERS") desire to form a limited partnership for
the purposes herein expressed;
NOW, THEREFORE, in consideration of the premises, the terms and
covenants contained herein, and the contributions to capital by the Partners as
set forth in Article III of this Agreement, the Partners agree as follows:
ARTICLE 1
FORMATION AND ORGANIZATION
1.1. FORMATION; NAME OF PARTNERSHIP. The Partners hereby enter into and
form a limited partnership (the "PARTNERSHIP") under the Delaware Revised
Uniform Limited Partnership Act, as amended (the "Act"), for the purposes
hereinafter set forth. The name of the Partnership shall be "AMERIPATH TEXAS,
LP", and the Partnership shall conduct its business under such name or such
assumed name or names as the General Partner deems necessary or appropriate.
1.2. DEFINITIONS. The following terms as used herein, unless the context
specifically requires otherwise, shall have the following respective meanings:
"ACT" is defined in Section 1.1.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the
end of the relevant year, after giving effect to the following adjustments:
(i) credit to such Capital Account any amounts which such Partner is
obligated to restore pursuant to Section 3.4, Section 7.4, Section 7.7, or
any other provision of this Agreement, (ii) credit to such Capital Account
the Partner's share of Minimum Gain; and (iii) debit to such Capital
Account the items described in Treasury Regulations Sections
1.704-l(b)(2)(ii)(d)(4), (5) and (6), The foregoing definition of Adjusted
Capital Account Deficit is intended to comply with the provisions of
Treasury Regulations Section 1.704-l(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
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"AFFILIATE" shall mean any corporation, partnership or association
controlled by, controlling or under common control with a Partner, with the
concept of "control" in this context meaning the ownership of at least 50%
of the voting securities or partnership, equity or other beneficial
interest of the controlled entity.
"AGREEMENT" shall mean this instrument, as it may be amended from time to
time pursuant to Section 8.5. Unless otherwise specified, all references
herein to Sections are to Sections of this Agreement.
"CAPITAL ACCOUNT" is defined in Section 4.2.
"CAPITAL CONTRIBUTIONS" of a Partner shall mean the cash and the agreed
value of the property contributed by such Partner to the Partnership
pursuant to Section 3.1.
"CAPITAL PERCENTAGE" is defined in Section 3.2.
"CODE" shall refer to the Internal Revenue Code of 19S6, as amended.
"COSTS" shall mean all costs and expenses incurred by the Partnership or by
any Partner on behalf of the Partnership, but excluding principal payments
on Partnership loans and distributions to Partners.
"ENTITY" shall mean any corporation, partnership, joint venture, trust or
other organization.
"MINIMUM GAIN" shall mean the aggregate gain, if any, that would be
realized by the Partnership for purposes of computing income or loss with
respect to each Partnership asset if each Partnership asset was disposed of
by the Partnership in a taxable transaction in frill satisfaction of all
nonrecourse liabilities of the Partnership secured by such asset. Minimum
Gain with respect to each Partnership asset shall be further determined in
accordance with the rules of Treasury Regulation Section 1.704-2(d) and any
subsequent rule or regulation governing the determination of minimum gain.
A Partner's share of Minimum Gain at the end of any Partnership year shall
equal the aggregate Nonrecourse Deductions allocated to such Partner (or
his predecessors in interest) up to that time, less such Partner's (and
predecessors') aggregate share of decreases in Minimum Gain determined in
accordance with Treasury Regulation Section 1.704-2(g).
"NET CASH FLOW" of the Partnership is defined in Section 4.3.
"NET INCOME" shall mean for a taxable year of the Partnership the excess of
(i) the income and gain of the Partnership for such year, determined in
accordance with the accounting principles described in Section 4.1.1, over
(ii) the deductions and losses of the Partnership for such year, determined
in accordance with the accounting principles described in Section 4.1.1.
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"NET LOSS" shall mean for a taxable year of the Partnership the excess of
(i) the deductions and losses of the Partnership for such year, determined
in accordance with the accounting principles described in Section 4.1.1.
over (ii) the income and gain of the Partnership for such year, determined
in accordance with the accounting principles described in Section 4.1.1.
"NONRECOURSE DEDUCTIONS" shall mean the excess, if any, of the net increase
in the amount of Minimum Gain during a Partnership year over the aggregate
amount of any distributions during such year of proceeds of a nonrecourse
liability that are allocable to an increase in Minimum Gain, The
Nonrecourse Deductions of a year shall consist first of depreciation with
respect to each item of Partnership property to the extent of the increase
in Minimum Gain attributable to nonrecourse liabilities of the Partnership
secured by such Partnership property, with the remainder of any Nonrecourse
Deductions made up of a pro rata portion of the Partnership's other items
of loss. Nonrecourse Deductions shall be farther determined in accordance
with the rules of Treasury Regulation Sections 1.704-2(b)(l) and 1.704-2(c)
and any subsequent rule or regulation governing the determination of
nonrecourse deductions.
"OPTIONAL PARTNER LOAN" is defined in Section 3.3.2.
"PARTNER MINIMUM GAIN" shall mean the aggregate of the partner nonrecourse
debt minimum gain amounts of the Partnership computed in accordance with
Treasury Regulation Section l.704-2(i)(3).
"PARTNER NONRECOURSE DEDUCTIONS" shall be determined in accordance with the
principles of Treasury Regulation Section l.704-2(i)(l). The amount of
Partner Nonrecourse Deductions for a partnership fiscal year is determined
in accordance with Treasury Regulation Section 1.704-2(i)(2) and generally
equals the net increase, if any, in the amount of Partner Minimum Gain
during that fiscal year, determined pursuant to Treasury Regulation Section
1.704-2(i)(3).
"PARTNERS" shall refer collectively to the General Partner and the Limited
Partner, together with any other persons who hereafter may be admitted to
the Partnership in accordance with the provisions of this Agreement, and
shall also include, for allocation and distribution purposes only, any
individual or Entity which has acquired all or any portion of a Partnership
Interest (as distinguished from a lien thereon or a security interest
therein) in a manner permitted by this Agreement, provided that notice of
such acquisition has been received by the General Partner, whether or not
such individual or Entity is a substituted Partner.
"PARTNERSHIP" is defined in Section 1.1.
"PARTNERSHIP INTEREST" is defined in Section 3.2.
"PARTNERSHIP OFFICE" is defined in Section 1.4.
"PRIME RATE" shall mean the rate as determined from such bank or other
source as the Partners may agree.
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"SECTION 754 ELECTION" is defined in Section 5.3.1.
"WINDING UP" shall mean the period following a dissolution of the
Partnership.
Other capitalized terms used in this Agreement shall have the meanings
indicated.
1.3. TERM. This Agreement shall be effective and the Partnership shall
commence as of the effective date of this Agreement, and shall continue until
the termination of the Partnership in accordance with the provisions of
Article VII.
1.4. PRINCIPAL OFFICE. The principal office of the Partnership (the
"PARTNERSHIP OFFICE"), where the books and records of the Partnership shall be
kept, shall be 7289 Garden Road, Suite 200, Riviera Beach, Florida 33404, or
such other location or locations as the General Partner may determine.
1.5. REGISTERED AGENT AND REGISTERED OFFICE. The Corporation Service
Company will be the registered agent for service of process of the Partnership
in Delaware. The address of the registered agent and the address of the
registered office of the Partnership in Delaware is 1013 Centre Road, County of
New Castle, Wilmington, Delaware 19801.
1.6. PURPOSE OF THE PARTNERSHIP. The purpose of the Partnership is to
engage in any lawful business or activity for which limited partnerships may be
organized under the Act, including without limitation, medical laboratory
services.
ARTICLE II
MANAGEMENT
2.1. POWERS OF GENERAL PARTNER. The General Partner shall have the full,
exclusive and complete discretion to manage and control, and shall make all
decisions affecting the business of and have all the powers of, the Partnership,
and shall have all of the rights, powers and duties of a general partner of a
partnership without limited partners. Without limiting the generality of the
foregoing, the General Partner shall have the powers and duties to cause the
Partnership (without consent from the Limited Partners):
(i) to borrow money, execute instruments evidencing
indebtedness, and secure indebtedness by mortgage, deed of trust, pledge,
security interest or other lien in furtherance of Partnership purposes, to
pay and discharge all indebtedness owing with respect to and secured by the
Partnership's assets, or any part thereof, and to cause the Partnership to
make such other payments and perform such other acts as the General Partner
may deem necessary to preserve the interest of the Partnership therein;
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(ii) to sell, assign, transfer, convey or otherwise dispose of
Partnership property; to merge one or more entities with and into the
Partnership (including without limitation, any merger of API Newco, Inc.,
with and into the Partnership); to file any documents relating thereto with
any public official or third party;
(iii) to prepare and file all requisite tax returns required by
federal, state and local authorities having jurisdiction over the
Partnership, and to cause the Partnership to pay and discharge all taxes
and assessments levied and assessed against the Partnership's assets, or
any part thereof;
(iv) to comply with appropriate state laws respecting workers'
compensation and liability insurance, including the purchase of any
required insurance and such additional insurance as the General Partner may
deem necessary or appropriate;
(v) to keep all books of accounts and other records required by
the Partnership, and to keep vouchers, statements, receipted bills and
invoices and other records, covering collections, disbursements, and other
data in connection with the Partnership;
(vi) to prepare and deliver to the Limited Partner such periodic
reports as the General Partner may deem appropriate and to cause the
Partnership to prepare and deliver annual reports in accordance with
Section 5.1;
(vii) to retain or employ for the Partnership's account and
coordinate the services of all employees, supervisors, accountants,
attorneys and other persons necessary or appropriate to carry out the
business of the Partnership;
(viii) to the extent funds of the Partnership are available, to pay
all debts and other obligations of the Partnership;
(ix) to maintain all funds of the Partnership in an account or
accounts at or in any bank or banks;
(x) to determine the time and amount of distributions of Net
Cash Flow to the Partners, and to make such distributions in accordance
with Section 4.4 and the other provisions of this Agreement, and to
establish reasonable reserves as the General Partner may determine to be
advisable; and
(xi) to do any act which is necessary to carrying out any of the
purposes of the Partnership, including without limitation the foregoing.
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The foregoing powers shall be exercised by the General Partner on the
Partnership's behalf and in its name, as its act and deed. All actions taken by
the General Partner in the course of the Partnership's business shall be binding
on the Partnership and all Partners.
2.2. TIME. The General Partner shall devote to the conduct of the
Partnership's affairs such time as is reasonably necessary to effectively carry
out the day-to-day management of the Partnership. Nothing in this Agreement
shall be deemed to restrict in any way the freedom of any Partner to invest in
and receive income from any business or other activity.
2.3. REIMBURSEMENT OF COSTS. The Partnership shall promptly reimburse the
General Partner for all reasonable costs and expenses incurred directly by the
General Partner (other than overhead costs) on behalf of the Partnership when
and as such costs are incurred. These expenses may include, but are not limited
to, direct third party costs incurred in the administration of the Partnership.
2.4. LIMITATION ON THE GENERAL PARTNER'S RESPONSIBILITY. The General
Partner's obligations to perform the functions enumerated herein and such other
obligations as may arise by operation of law shall be performable only to the
extent that the Partnership has funds available therefor, and the General
Partner shall not be personally liable to furnish involuntarily its own funds
for any such purpose. The General Partner shall be obligated to act in good
faith, and so long as it acts in good faith and is not grossly negligent, it
shall have no liability or obligation to the Limited Partner or the Partnership
for any decision, act or omission, whether or not such decision, act or omission
may have been reasonably prudent, may have been a negligent act or omission or
may have been in good or bad business judgment.
2.5. THE LIMITED PARTNER SHALL NOT ACT. The Limited Partner shall not
perform any act on behalf of the Partnership, incur any expense, obligation or
indebtedness of any nature on behalf of the Partnership, or in any manner
participate in the management of the Partnership or receive or be credited with
any amounts, except as specifically contemplated hereunder.
2.6. POWER OF ATTORNEY. By the execution of this Agreement, the Limited
Partner does irrevocably constitute and appoint the General Partner as its true
and lawful attorney-in-fact and agent with full power and authority to act in
its name, place and stead in the execution, acknowledgment, delivering, filing
and recording of all certificates and documents that the General Partner deems
necessary or reasonably appropriate for the following specific purposes:
(i) to qualify or continue the Partnership as a limited
partnership in Delaware and to qualify the Partnership to do business in
the states in which the Partnership is required to qualify.
(ii) to reflect a change in the identity of any Partner, the
addition of any Partner pursuant to the provisions of Article VI or an
amendment of this Agreement made pursuant to the provisions of Section 8.5;
and
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(iii) to reflect the dissolution and termination of the
Partnership after same has been dissolved and terminated in accordance
herewith.
The power of attorney granted herein shall be deemed to be coupled with an
interest, shall be irrevocable and shall, to the extent permitted by law,
survive the termination or death of the Limited Partner, and shall be binding on
any assignee or vendee of the Limited Partner's Partnership Interest hereunder,
or any portion thereof, including any of the distributive rights relating
thereto.
2.7. INDEMNIFICATION.
2.7.1. INDEMNIFICATION; NONEXCLUSIVITY. Each person, entity or
organization who at any time shall serve, or shall have served, as the General
Partner or a member, manager, director or executive officer of the General
Partner, or any person, entity or organization who, while the General Partner or
a member, manager, director or executive officer of the General Partner, is or
was serving at the request of the Partnership or the General Partner as a
member, manager, director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic
corporation, limited liability company, partnership, limited partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise
(each such person, entity or organization referred to herein as an
"Indemnitee"), shall be entitled to indemnification as and to the fullest extent
permitted by Delaware law or any successor statutory provisions, as from time to
time amended, but subject to the limitations provided in this Agreement, from
and against any and all judgments, penalties, fines (including excise taxes),
amounts paid in settlement and, subject to Section 2.7.2, Expenses, PROVIDED,
that in each case the Indemnitee acted in good faith and in a manner that it
reasonably believed to be in, or not opposed to, the best interests of the
Partnership and with respect to any criminal proceeding, had no reasonable cause
to believe its conduct was unlawful; and PROVIDED FURTHER, that any
indemnification pursuant to this Section 2.7 shall be made only out of the
assets of the Partnership. The foregoing right of indemnification shall not be
deemed exclusive of any other rights to which those to be indemnified may be
entitled as a matter of law or under any agreement, other provision of this
Agreement, action of the General Partner, vote of the General Partner and/or
Limited Partners, or other arrangement. The Partnership may enter into
indemnification agreements with the managers, members and executive officers of
the General Partner that contractually provide to them the benefits of the
provisions of this Section 2.7 and include related provisions meant to
facilitate the Indemnitees' receipt of such benefits and such other
indemnification protections as may be deemed appropriate.
2.7.2. ADVANCEMENT OR REIMBURSEMENT OF EXPENSES. The rights of
Indemnitee provided under the preceding paragraph shall include, but not be
limited to, the right to be indemnified and to have Expenses advanced in all
Proceedings. In the event that an Indemnitee is not wholly successful, on the
merits or otherwise, in a Proceeding but is successful, on the merits or
otherwise, as to any Claim in such Proceeding, the Partnership shall indemnify
Indemnitee against all Expenses of Indemnitee relating to each such Claim. The
termination of a Claim in a proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such Claim. In addition, to the
extent an Indemnitee is, by reason of his company status, a witness or otherwise
participates in any proceeding at a time when he is not named a defendant or
respondent in the proceeding, he shall be indemnified against all Expenses in
connection therewith. The Partnership
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shall pay all Expenses of Indemnitee in connection with any Proceeding or Claim,
whether brought by the Partnership or otherwise, in advance of any determination
respecting entitlement to indemnification pursuant to this Section 2.7 within
ten days after the receipt by the Partnership of a written request from
Indemnitee reasonably evidencing such Expenses and requesting such payment or
payments from time to time, whether prior to or after final disposition of such
Proceeding or Claim; PROVIDED THAT, the Indemnitee undertakes and agrees in
writing that he will reimburse and repay the Partnership for any Expenses so
advanced to the extent that it shall ultimately be determined by a court, in a
final adjudication from which there is no further right of appeal, that
Indemnitee is not entitled to be indemnified against such Expenses.
2.7.3. REQUESTS FOR INDEMNIFICATION; DETERMINATION OF REQUEST. To
request indemnification, any Indemnitee must submit to the General Partner a
written claim or request therefor which contains sufficient information to
reasonably inform the Partnership about the nature and extent of the
indemnification or advance sought by that Indemnitee. Any indemnification under
this Section 2.7 (unless ordered by a court) shall be made by the Partnership as
permitted by Delaware law and as authorized in the specific case upon a
determination that indemnification is proper in the circumstances because it is
permitted under Delaware law and the applicable standards of conduct set forth
in this Section 2.7 have been met. Such determination shall be made by the
General Partner, or if such claim for indemnification is brought by the General
Partner, by the Limited Partners holding a majority of the Partnership Interest
held by Limited Partners.
2.7.4. EFFECT OF CERTAIN PROCEEDINGS. The termination of any
Proceeding or of any Claim in a Proceeding by judgment, order, settlement or
conviction, or upon a plea OF NOLO CONTENDERE or its equivalent, shall not
(except as otherwise expressly provided in this Section 2.7) by itself adversely
affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not conduct himself in good faith and in a manner that he
reasonably believed was in, or was not opposed to the best interests of the
Partnership or, with respect to any criminal proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful and Indemnitee shall
be deemed to have been found liable in respect of any Claim only after he shall
have been so adjudged by a court in competent jurisdiction after exhaustion of
all appeals therefrom.
2.7.5. CERTAIN ACTIONS WHERE INDEMNIFICATION IS NOT PROVIDED;
EXPENSES OF ENFORCEMENT OF SECTION. Notwithstanding any other provision of this
Section 2.7, no person, entity or organization will be entitled to
indemnification or advancement of Expenses under this Section 2.7 with respect
to any Proceeding, or any Claim therein, brought or made by that person, entity
or organization against the Partnership; PROVIDED THAT, in the event that
Indemnitee, pursuant to this Section 2.7, seeks a judicial adjudication to
enforce his rights under, or to recover damages for breach of, rights created
under or pursuant to this Section, Indemnitee shall be entitled to recover from
the Partnership, and shall be indemnified by the Partnership against, any and
all Expenses of Indemnitee in such judicial adjudication but only if he prevails
therein. If it shall be determined in said judicial adjudication that Indemnitee
is entitled to receive part but not all of the indemnification or advancement of
Expenses sought, the Expenses incurred by Indemnitee in connection with such
judicial adjudication shall be reasonably prorated in good faith by counsel for
Indemnitee.
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2.7.6. INDEMNIFICATION OF OTHER OFFICERS, EMPLOYEES AND AGENTS. The
Partnership, by adoption of a resolution of the General Partner, may indemnify
and advance expenses to an officer, employee or agent of the Partnership or the
General Partner who is not a member, manager, director or an executive officer
of the General Partner to the same extent and subject to the same conditions (or
to such lesser extent and/or with such other conditions as the General Partner
may determine) under which it may indemnify and advance expenses to an
Indemnitee under this Section 2.7; and the Partnership, by adoption of a
resolution of the General Partner, may indemnify and advance expenses to persons
who are not or were not members, managers, officers, employees or agents of the
Partnership or General Partner, but who are or were serving at the request of
the Partnership or General Partner as a member, manager, director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic corporation, limited liability company,
partnership, limited partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise against any liability asserted against
him and incurred by him in such a capacity or arising out of his status as such
a person to the same extent and subject to the same conditions (or to such
lesser extent and/or with such other conditions as the managers or members may
determine) that it may indemnify and advance expenses to Indemnitees under this
Section 2.7.
2.7.7. SURVIVAL OF INDEMNIFICATION. No amendment, alteration or
repeal of this Section 2.7 or any provision hereof will be effective as to any
Indemnitee for acts, events and circumstances that occurred, in whole or in
part, before that amendment, alteration or repeal. The provisions of this
Section 2.7 will continue as to any Indemnitee whose company status has ceased
for any reason and will inure to the benefit of his heirs, executors,
administrators, successors and assigns. Neither the provisions of this Section
2.7 nor those of any agreement to which the Partnership is a party will preclude
the indemnification of any person, entity or organization which this Section 2.7
does not specify as having the right to receive indemnification or is not a
party to any such agreement, but which the Partnership has the power or
obligation to indemnify under the provisions of the Delaware Act.
2.7.8. SEVERABILITY. If any provision or provisions of this
Section 2.7 shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby, and, to the
fullest extent possible, the provisions of this Section 2.7 shall be construed
so as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
2.7.9. DEFINITIONS. For purposes of this Section 2.7:
"CLAIM" is a claim, a material issue or a substantial request for
relief.
"COMPANY STATUS" means the status of a person, entity or
organization who is or was a member, manager, director, officer, partner,
employee, agent or fiduciary of the Partnership or of any other
corporation, limited liability company, partnership, limited partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise which such person, entity or organization is or was serving at
the written request of the General Partnership or the Partnership. For
purposes of this Agreement, "serving at the written request" of the General
Partner or the Partnership includes any service by an
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Indemnitee which imposes duties on or involves services by that Indemnitee
with respect to any employee benefit plan or its participants or
beneficiaries.
"ENTITY" means any sole proprietorship, corporation, partnership
of any kind having a separate legal status (including limited partnership),
limited liability company, business trust, unincorporated organization or
association, mutual company, joint stock company or joint venture.
"EXPENSES" of any person, entity or organization include all the
following that are actually and reasonably incurred by or on behalf of that
person, entity or organization: all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees and all other disbursements or expenses of
the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating or being or preparing to be
a witness in a Proceeding.
"PROCEEDING" includes any action, suit, alternate dispute
resolution mechanism, hearing or any other proceeding, whether civil,
criminal; administrative, arbitrative, investigative or mediative, any
appeal in any such action, suit, alternate dispute resolution mechanism,
hearing or other proceeding and any inquiry or investigation that could
lead to any such action, suit, alternate dispute resolution mechanism,
hearing or other proceeding, except one (i) initiated by an Indemnitee to
enforce his rights under this Section 2.7 or (ii) pending on or before the
date of this Agreement.
2.8. OFFICERS. The General Partner may appoint such officers and agents as
may from time to time appear to be necessary or advisable in the conduct of the
affairs of the Partnership, who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the General Partner. Any officer may be removed, with or without
cause, by the General Partner. Vacancies in any office may be filled by the
General Partner, Any person may hold two or more offices. The General Partner
may grant powers of attorney or other authority as appropriate to establish and
evidence the authority of the officers and other Persons. Unless otherwise
provided by the General Partner, no officer shall have the power or authority to
delegate to any Person such officers' rights and powers as an officer to manage
the business and affairs of the Partnership.
ARTICLE III
CAPITAL OF THE PARTNERSHIP
3.1. CAPITAL CONTRIBUTIONS AND PARTNERSHIP INTERESTS OF THE PARTNERS.
3.1.1. INITIAL CONTRIBUTIONS. Upon execution of this Agreement, (i)
the General Partner is hereby contributing $10 to the capital of the
Partnership, and (ii) the Limited Partner is hereby contributing $990 to the
capital of the Partnership.
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3.1.2. NO ADDITIONAL CONTRIBUTIONS. Except as provided in
Section 3.4, no Partner shall be required to make additional contributions to
the Partnership, Any additional contributions that are approved by both Partners
shall be made in accordance with their relative Capital Percentages.
3.2. PARTNERSHIP INTERESTS; CAPITAL PERCENTAGES. The interest of each
Partner in the Partnership (which shall include, without limitation, its rights
as Partner and its interest in revenues, costs, Net Cash Flow and distributions
pursuant to Section 7.4, hereinafter collectively called the "PARTNERSHIP
INTEREST") shall be expressed as a percentage (the "CAPITAL PERCENTAGE") as set
forth opposite such Partner's name on Exhibit A attached hereto.
3.3. ADDITIONAL FUNDS TO COVER COSTS.
3.3.1. THIRD PARTY LOANS. In the event that the Partnership, in
order to discharge Costs or indebtedness, requires funds in excess of revenues,
the General Partner shall be authorized, at any time and from time to time, to
cause the Partnership to borrow such additional funds as shall in the judgment
of the General Partner be sufficient for such purposes, upon such terms as the
General Partner may deem advisable.
3.3.2. OPTIONAL PARTNER LOANS. The General Partner may elect, but
shall not be obligated, to make loans to the Partnership for unfunded Costs. If
the General Partner elects to make any loans to the Partnership pursuant to this
Section 3.3.2, it shall give the Limited Partner written notice thereof not less
than 30 days prior to the date such loan is to be made. Such notice shall set
forth the purposes of such loan. The Limited Partner shall have the right to
elect to lend its Capital Percentage share of the amounts to be lent pursuant to
this Section 3.3,2 (which loans, whether made by the General or the Limited
Partner pursuant to this Section 3.3.2, shall be called "OPTIONAL PARTNER
LOANS"). The Limited Partner may exercise such rights by giving the General
Partner notice of such election within such 30-day period. In no case will the
General Partner or the Limited Partner be obligated to make any loan to the
Partnership other than any amounts that such Partner elects to lend pursuant to
this Section 3.3.2.
3.3.3. INTEREST RATE. All Optional Partner Loans shall earn
interest at a per annum rate to be determined by the General Partner and shall
be reimbursed to the Partners from Net Cash Flow as provided in Section 4.4.
3.4. NO FURTHER OBLIGATION. Except as expressly provided for in or
contemplated by this Article III, no Partner shall have any obligation to
provide funds to the Partnership, whether by contributions to capital, loans,
return of monies received pursuant to the terms of this Agreement or otherwise.
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ARTICLE IV
ALLOCATIONS, NET CASH FLOW AND DISTRIBUTIONS
4.1. ALLOCATIONS.
4.1.1. IN GENERAL. The recognition and classification of the items
of income, gain, loss and deduction of the Partnership (whether recognized prior
to or during Winding Up) shall be the same for purposes of this Section 4.1 as
their recognition and classification for federal income tax purposes, determined
(i) without regard to any Section 754 Election that may have been made and (ii)
without regard to any provision of the Code that provides that an item of income
or gain is not includable in gross income or that an expenditure is not
deductible or chargeable to a capital account.
4.1.2. NET INCOME AND LOSS. Net Income and Net Loss shall be
allocated to the Partners in accordance with their respective Capital
Percentages.
4.1.3. RESTRICTIONS ON ALLOCATIONS. Notwithstanding anything in
this Section 4.1 to the contrary:
(i) The Net Loss allocated to a Partner pursuant to Section 4.1
hereof shall not exceed the maximum amount of Net Loss that can be so
allocated without causing such Partner to have an Adjusted Capital Account
Deficit at the end of the fiscal year. All Net Loss in excess of the
limitation set forth in this Section 4.1.3(i) shall be allocated to the
other Partners to the extent that such allocation would not cause such
other Partners to have an Adjusted Capital Account Deficit.
(ii) In the event a Partner receives any adjustments, allocations
or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Net Income shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate,
to the extent required by the Treasury Regulations, the Adjusted Capital
Account Deficit of such Partner as quickly as possible.
(iii) In the event a Partner has an Adjusted Capital Account
Deficit at the end of any Partnership fiscal year, such Partner shall be
specially allocated items of Net Income in the amount and manner sufficient
to eliminate, to the extent required by Treasury Regulations, the Adjusted
Capital Account Deficit of such Partner as quickly as possible.
(iv) Notwithstanding any other provision of this Agreement, but
subject to the exceptions set forth in Treasury Regulation Section
l.704-2(t)(2), (3), (4) or (5), if there is a net decrease in Minimum Gain
during a Partnership fiscal year, the Partners must be allocated items of
Net Income for such year (and, if necessary, subsequent years) in the
proportion to, and to the extent of, an amount equal to such
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Partner's share of the net decrease in Minimum Gain (as such share is
determined in accordance with Treasury Regulation Section 1.704-2(g)(2)).
The Minimum Gain chargeback shall consist first of Net Income from the
disposition of Partnership assets subject to nonrecourse liabilities of the
Partnership with the remainder of the Minimum Gain chargeback, if any, made
up of a pro rata portion of the Partnership's other items of Net Income
for such year and shall be determined in accordance with Treasury
Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and l.704-2(j)(2)(i), or
any successor provisions. If such Net Income from the disposition of
Partnership assets exceeds the amount of Minimum Gain chargeback, a
proportionate share of each item of such Net Income shall constitute a part
of the Minimum Gain chargeback.
(v) Notwithstanding any other provision of this Agreement, but
subject to the exceptions referenced in Treasury Regulation
Section l.704-2(i)(4), if there is a net decrease in Partner Minimum Gain
during any Partnership year, items of income and gain for such year (and,
if necessary subsequent years) shall first be allocated to each Partner
with a share of that Partner Minimum Gain in proportion to, and to the
extent of, an amount equal to such Partner's share of the net decrease in
Partner Minimum Gain (as such share is determined in accordance with
Treasury Regulation Section 1.704-2(i)(4)). The items to be so allocated
shall be determined in accordance with Treasury Regulation
Section 1.704-2(i)(4), or any successor provision.
(vi) Nonrecourse Deductions for any taxable year shall be
allocated among the Partners in the same manner as are the other profits
and losses of the Partnership for such year. Partner Nonrecourse Deductions
for any taxable year should be allocated among the Partners in accordance
with Treasury Regulation Section 1.704-2(i)(l).
(vii) The allocations set forth in this Section 4.1.3 ("REGULATORY
ALLOCATIONS") are intended to comply with certain requirements of Treasury
Regulation Sections 1.704-1 and 1.704-2. Notwithstanding any other
provision of this Section 4.1 (other than the Regulatory Allocations), the
Regulatory Allocations shall be taken into account in allocating other Net
Income and Net Loss among the Partners so that, to the extent possible, the
net amount of such allocations of other Net Income and Net Loss and the
Regulatory Allocations to the Partners shall be equal to the net amount
that would have been allocated to such Partners if the Regulatory
Allocations had not occurred.
4.1.4. CONTRIBUTED PROPERTY. Items of income, gain, loss, and
deduction with respect to an asset contributed to the Partnership by a Partner
that has a fair market value at the time of such contribution which is different
from its adjusted tax basis shall, for tax purposes only, be allocated among the
Partners in the manner provided under section 704(c) of the Code and Treasury
Regulations thereunder so as to take into account any variation between the
basis of the property to the Partnership and its fair market value at the time
of contribution.
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4.2. COMPUTATION OF CAPITAL ACCOUNT. The balance of the "CAPITAL ACCOUNT"
of a Partner is initially zero and as of any date is increased by (i) the amount
of cash contributed by that Partner to the Partnership on or prior to that date,
(ii) the fair market value of any property (reduced by any liabilities which are
assumed by the Partnership or to which such property is subject) that is
contributed by that Partner to the Partnership on or prior to that date and
(iii) any item of Partnership income or gain that is allocated to such Partner
pursuant to Section 4.1 on or prior to that date; and is decreased by (iv) any
Partnership deduction or loss that is allocated to such Partner pursuant to
Section 4.1 on or prior to that date, (v) the amount of cash distributed by the
Partnership to such Partner on or prior to that date (other than in respect of
Optional Partner Loans) and (vi) the fair market value of any property (reduced
by any liabilities which are assumed by the distributee Partner or to which the
property is subject) that is distributed by the Partnership to the Partner on or
prior to that date. Allocations pursuant to Section 4.1.4 shall not be taken
into account for capital account purposes.
4.3. NET CASH FLOW. "NET CASH FLOW" shall mean all gross income and
revenues received by the Partnership, less (i) all accrued and unpaid or
unfunded costs and expenses of the Partnership and (ii) all reasonable reserves
established by the General Partner for working capital requirements or to
provide funds for other contingencies. Such gross income and revenues shall
include but not be limited to all revenues from Partnership operations, all
rebates and refunds, all insurance proceeds, all financing proceeds and all
other revenues received by the Partnership, Net Cash Flow shall be determined in
accordance with usual and customary partnership accounting principles and
practices.
4.4. DISTRIBUTIONS OF NET CASH FLOW. The General Partner shall determine
the availability of Net Cash Flow for distribution, and shall distribute such
available Net Cash Flow at such reasonable intervals as it may select, on an
annual, quarterly or more frequent basis. To the extent Net Cash Flow is
available, such distributions shall be made in the following order and amounts:
(i) First, Net Cash Flow shall be distributed to Partners in
repayment of Optional Partner Loans (including accrued and unpaid interest
thereon) in proportion to the relative amounts owed to each Partner; and
(ii) Second, the remainder of the Net Cash Flow shall be
distributed to the Partners in accordance with their respective Capital
Percentages.
ARTICLE V
ACCOUNTING AND TAX MATTERS
5.1. ACCOUNTING RECORDS; ACCOUNTING YEAR. The books and records of the
Partnership shall be kept on an accrual basis, in accordance with usual and
customary partnership accounting principles and practices, and shall be
maintained by reference to an accounting year which shall be the fiscal year
ending December 31 or any other accounting year so designated by the General
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Partner. The General Partner shall keep or cause to be kept full and proper
accounts of all transactions of the Partnership, and, within 30 days following
the written request of the Limited Partner, shall make and distribute or cause
to be made and distributed to the Limited Partner a full and detailed statement
showing the operations of the Partnership for the period requested, including
without limitation a statement of the accounts of each of the Partners on the
Partnership books and records.
5.2. INSPECTION The books and records of the Partnership shall be
maintained at the Partnership Office, and shall be open to inspection by the
Limited Partner at all reasonable times during any business day.
5.3. TAX MATTERS.
5.3.1. TAX RETURNS. The General Partner shall prepare and file all
income tax returns of the Partnership and shall furnish copies thereof to the
Limited Partner. The General Partner, on behalf of the Partnership and at the
time and in the manner provided in Treasury Regulation Section 1.754-l(b), may
make an election to adjust the basis of Partnership property in the manner
provided in Sections 734(b) and 743(b) of the Code (a "SECTION 754 ELECTION").
5.3.2. TAX MATTERS PARTNER. The General Partner shall be the "tax
matters partner" of the Partnership, within the meaning of Section 6231(a)(7) of
the Code and any regulations issued thereunder, unless the Code or the
regulations issued thereunder require another person to be the tax matters
partner. As tax matters partner, the General Partner covenants and agrees with
the Limited Partner that (i) upon audit, after the receipt of a final
partnership administrative adjustment for a taxable year, the General Partner
will not file a "petition for readjustment of the partnership items", within the
meaning of Section 6226 of the Code, in any court other than the United States
Tax Court, without the consent of the Limited Partner and (ii) the General
Partner will not agree, pursuant to Section 6229(b)(l)(B) of the Code, to extend
the period for assessing any tax imposed by subtitle A of the Code with respect
to any person that is attributable to any partnership item (or affected items)
of the Partnership without the consent of the Limited Partner.
5.3.3. EXPENSES. The expenses, if any, which the General Partner
incurs in fulfilling its covenants pursuant to this Section 5.3 shall be
expenses of the Partnership.
5.4. INCOME TAX ELECTIONS. The General Partner shall have the right to make
any applicable elections under the Code which, in its judgment, are in the best
interests of the Partnership.
ARTICLE VI
TRANSFERS OF PARTNERSHIP INTERESTS
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Each of the Partners has entered into this Agreement, in part, based upon
the identity of the other Partner and the persons or entities who hold interests
or are principals in the other Partner. The sale, assignment, pledge, or other
encumbrance or disposition by any Partner of its interest in the Partnership
shall be prohibited without the consent of the other Partners, and any attempt
to sell, assign, pledge, or otherwise encumber or dispose of such an interest
without such consent shall be null and void. Nothing in the preceding sentence
shall be deemed to restrict the transfer by merger (the "Merger") of all of API
No. 1, LLC's interests in the Partnership to AmeriPath, LLC, a Delaware limited
liability company, whereby Ameripath, LLC would succeed to the Partnership
Interests of API No. 1, LLC and replace API No. 1, LLC as General Partner.
ARTICLE VII
DISSOLUTION, WINDING UP AND TERMINATION
7.1. CAUSES.
7.1.1. IN GENERAL. Each Partner expressly waives any right which it
might otherwise have to dissolve the Partnership except as set forth in this
Section 7.1. The Partnership shall be dissolved only upon the occurrence of any
of the following events:
(i) the withdrawal, removal, Bankruptcy (as defined in
Section 7.1.2), dissolution or liquidation of the General Partner, except
as contemplated in Article VI;
(ii) the unanimous agreement of the Partners to dissolve the
Partnership; or
(iii) the occurrence of any other circumstance which, by law,
would require the Partnership to be dissolved.
Nothing contained in this Section 7.1 is intended to grant to any Partner the
right to dissolve the Partnership at will (by withdrawal or otherwise), or to
exonerate any Partner from liability to the Partnership and the remaining
Partners if it dissolves the Partnership at will. Any dissolution at will of the
Partnership shall be in contravention of this Agreement.
7.1.2. BANKRUPTCY. The "Bankruptcy" of a Partner shall be deemed to
have occurred for purposes of this Section 7.1 upon the occurrence of any of the
following:
(i) commencement by such Partner of any proceeding seeking
relief under any bankruptcy or insolvency law, including but not limited to
a reorganization, arrangement, readjustment of debt, receivership,
trusteeship or liquidation (hereinafter referred to as "BANKRUPTCY
PROCEEDING");
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(ii) acquiescence by such Partner in any Bankruptcy Proceeding
commenced or brought against such Partner by any other party or parties, it
being deemed that such Partner has acquiesced in any such Bankruptcy
Proceeding that is not dismissed within 60 days after the commencement
thereof or if such Partner, by action, inaction or answer, approves of,
consents to or admits the material allegations of any petition filed in
connection therewith or defaults in answering any such petition;
(iii) final adjudication of such Partner as bankrupt or insolvent;
(iv) expiration of 60 days without termination, dismissal or
discharge of the appointment of a trustee, receiver or liquidator, with or
without such Partner's consent, for all or any substantial part of the
property of such Partner, whether or not including such Partner's
Partnership Interest; or
(v) execution by such Partner of an assignment for the benefit
of creditors.
7.1.3. EFFECTIVE DATE AND RECONSTITUTION. The dissolution shall be
effective on the day the event occurs giving rise to the dissolution, but the
Partnership shall not terminate until all of its affairs have been wound up and
all Partnership assets distributed as provided in this Article VII. In the event
the Partnership is dissolved for any other reason, the General Partner shall
promptly furnish written notice of the dissolution to the Limited Partner. The
Limited Partner may elect, in writing, within 90 calendar days following
transmission of the notice, to reconstitute the partnership with one or more new
general partners. The appointment of any new general partner(s) shall be
effective as of the day the event occurred giving rise to the dissolution. Each
new general partner appointed by the Limited Partner pursuant to this Section
7.1.3 shall make arrangements satisfactory to the General Partner to release the
General Partner from and indemnify it against any personal liability for any
debts, obligations or liabilities of the new partnership formed in accordance
with this Section 7.1.3, and the Partnership Interest of the General Partner
shall thereafter be in all instances identical to the Partnership Interest of
the Limited Partner, with an interest in distributions equal to its interest in
distributions as a General Partner.
7.2. LIQUIDATOR.
7.2.1. IN GENERAL. If the Partnership is dissolved and is not
reconstituted pursuant to Section 7.1.3, the General Partner (or in the event
that the General Partner has withdrawn, or has liquidated or dissolved or become
Bankrupt, or has wrongfully dissolved the Partnership, a liquidator selected by
the Limited Partner) shall commence to wind up the affairs of the Partnership
and to liquidate and sell its assets. The party actually conducting such
liquidation in accordance with the foregoing sentence, whether the General
Partner or a liquidator selected by the Limited Partner, is herein referred to
as the "LIQUIDATOR." The Liquidator (if other than the General Partner) shall
have sufficient business expertise and competence to conduct the Winding Up and
termination of the Partnership and, in the course thereof, to cause the
Partnership to perform any contracts which the Partnership then has or
thereafter enters into. The Liquidator shall have full
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right and unlimited discretion to determine the time, manner and terms of any
sale or sales of Partnership property pursuant to such liquidation, having due
regard for the activity and condition of the relevant market and general
financial and economic conditions. The Liquidator (other than the General
Partner) shall be entitled to receive such reasonable compensation for its
services as shall be agreed upon by the Liquidator and the Limited Partner.
7.2.2. SUCCESSOR LIQUIDATOR. The Liquidator may resign at any time
by giving 15 days' prior written notice and may be removed at any time, with or
without cause, by written notice of removal signed by the Limited Partner, Upon
the death, dissolution, removal or resignation of the Liquidator, a successor
and substitute Liquidator (who shall have and succeed to all the rights, powers
and duties of the original Liquidator) will, within 30 days thereafter, be
appointed by the Limited Partner. The right to appoint a successor substitute
Liquidator in the manner provided herein shall be recurring and continuing for
so long as the functions and services of the Liquidator are authorized to
continue under the provisions hereof, and every reference herein to the
Liquidator will be deemed to refer also to any such successor or substitute
Liquidator appointed in the manner herein provided.
7.2.3. POWERS. The Liquidator shall have and may exercise, without
further authorization or consent of any of the parties hereto or their legal
representatives or successors in interest, all of the powers conferred upon the
General Partner under the terms of this Agreement, to the extent necessary or
desirable in the good faith judgment of the Liquidator to perform its duties and
functions. The Liquidator (if not the General Partner) shall, while acting in
such capacity on behalf of the Partnership, be entitled to the indemnification
rights set forth in Section 2.7.
7.3. COURT APPOINTMENT OF LIQUIDATOR. If, within 90 days following the date
of dissolution, a Liquidator or successor Liquidator has not been appointed in
the manner provided herein, any interested party shall have the right to make
application to the then senior United States Federal District Judge (in his
individual and not judicial capacity) for Federal District of Florida in which
the Partnership Office is situated for appointment of the Liquidator or
successor Liquidator, and the Judge, acting as an individual and not in his
judicial capacity, shall be fully authorized and empowered to appoint and
designate the Liquidator or successor Liquidator who shall have all the powers,
duties, rights and authority of the Liquidator herein provided.
7.4. LIQUIDATION. In the course of the Winding Up and terminating the
business and affairs of the Partnership, its assets (other than cash) shall be
sold, its liabilities and obligations to creditors (including any loans made by
Partners) and all expenses incurred in its liquidation shall be paid, and all
resulting revenues and Costs shall be credited or charged to the Capital
Accounts of the Partners in accordance with Article IV. Notwithstanding the
foregoing, the Liquidator, in its sole and absolute discretion, may distribute
to the Partners in lieu of a sale all or any portion of the Partnership's
properties. Otherwise, all Partnership property shall be sold upon liquidation
of the Partnership and no Partnership property shall be distributed in kind to
the Partners except by agreement of all of the Partners. If the interest of the
Partnership in the Partnership property is to be distributed in kind, the
Liquidator shall determine the fair market value of such Partnership property
and the Capital Accounts of the Partners shall be adjusted for the gain or loss
that would have been recognized if the Partnership property to be distributed
had been sold by the Partnership
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for such fair market value. Thereafter, the net proceeds from such sales (after
deducting all selling costs and expenses in connection therewith) and, at the
expiration of the period referred to in Section 7.5, the balance in the reserve
account referred to in Section 7.5 shall be distributed among the Partners in
the ratio of and to the extent of the then credit balances in the Capital
Accounts. Any Partnership properties that are to be distributed in kind shall be
distributed among the Partners in the ratio of and to the extent of the then
credit balances in the Capital Accounts and the Capital Accounts shall be
adjusted by the fair market value of such distributed property as if the
proceeds thereof had been distributed to the Partners, net of any gain or loss
theretofore recognized in the Capital Accounts. If, following the adjustments to
Capital Accounts pursuant to this Section 7.4, the Limited Partner has a
negative Capital Account balance, the Limited Partner shall not be required to
contribute cash to the Partnership in an amount equal to such negative Capital
Account balance. The Liquidator shall be instructed to use all reasonable
efforts to effect complete liquidation of the Partnership within one year after
the date the Partnership is dissolved. Each holder of a Partnership Interest
shall look solely to the assets of the Partnership for all distributions and
shall have no recourse therefor (upon dissolution or otherwise) against any
Partner or the Liquidator. Upon the completion of the liquidation of the
Partnership and the distribution of all Partnership funds, the Partnership shall
terminate and the General Partner (or the Liquidator, as the case may be) shall
have the authority to execute and record all documents required to effectuate
the dissolution and termination of the Partnership.
7.5. CREATION OF RESERVES. After making payment or provision for payment of
all debts and liabilities of the Partnership and all expenses of liquidation,
the Liquidator shall set up, for a period not to exceed one year after the date
of dissolution, such cash reserves as the Liquidator may deem reasonably
necessary for contingent or unforeseen liabilities or obligations of the
Partnership.
7.6. FINAL AUDIT. Within a reasonable time following the completion of the
liquidation, the Liquidator shall supply to each of the Partners a statement
(certified by the Partnership's independent certified public accountants if the
Limited Partner shall so request), which shall set forth the assets and the
liabilities of the Partnership as of the date of complete liquidation, each
Partner's pro rata portion of distributions pursuant to Section 7.4 and the
amount retained as reserves by the Liquidator pursuant to Section 7.5.
ARTICLE VIII
MISCELLANEOUS
8.1. NOTICES AND APPROVALS. All notices, requests, statements, offers,
acceptances or other matters required or permitted to be given or furnished
hereunder to any Partner shall be deemed sufficiently given or furnished if in
writing and personally delivered to such Partner, or deposited in the United
States mail, in a sealed envelope, certified mail with return receipt requested,
with postage prepaid, addressed to such Partner at the address of such partner
as provided on Exhibit A or at such other address as such Partner shall have
previously designated by notice under this Section 8.1 to the Partner giving
such notice, request, statement, offer, acceptance or other writing. For
purposes of this Agreement, the date of the giving of notice shall be the date
of delivery, if personally
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delivered, or five business days after the date deposited in the mail. Any
approval or consent required by the General Partner shall be deemed given if
given by the President or any vice president of the General Partner.
8.2. FORCE MAJEURE. If, as a result of force majeure (including and without
limitation any and all events and circumstances not within or subject to a
party's reasonable control), the General Partner is unable to carry out, wholly
or in part, its duties and obligations under this Agreement, then the duties and
obligations of the General Partner, so far as the General Partner's ability to
comply with them is affected by the force majeure, shall be suspended during the
continuance of the force majeure. The General Partner shall use all reasonable
diligence to remove the force majeure as quickly as reasonably possible. The
requirement that any force majeure shall be remedied with all reasonable
diligence shall not require the settlement of strikes, lockouts or other labor
difficulty suffered, but resolution of all such difficulties shall be entirely
within the discretion of the party concerned.
8.3. APPLICABLE LAW. This Agreement is entered into and shall be construed
and enforced in accordance with the applicable laws of the State of Delaware,
without giving effect to principles of conflicts of laws. This Agreement shall
be subject to all valid applicable laws and official orders, rules and
regulations, and, in the event this Agreement or any portion thereof is, or the
operations contemplated hereby are, found to be inconsistent with or contrary to
any such laws or official orders, rules and regulations, the latter shall be
deemed to control, and this Agreement shall be regarded as modified accordingly,
and, as so modified, shall continue in fall force and effect; provided, however,
that nothing herein contained shall be construed as a waiver of any right to
question or contest any such law, order, rule or regulation in any forum having
jurisdiction in the premises.
8.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Partners, their heirs, executors, administrators, legal representatives and
permitted successors and assigns, any or all of whom shall execute and deliver
all necessary documents required to carry out the terms of this Agreement.
8.5. AMENDMENTS. This Agreement may be amended from time to time by
agreement of the Partners; provided, however, that no variations, modifications,
amendments or changes herein or hereof shall be binding upon any party or
parties hereto unless reduced to writing and executed by such party or parties.
8.6. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding among the Partners relating to the subject matter hereof, and
shall supersede any prior agreements and understandings relating to such subject
matter.
8.7. ATTORNEYS' FEES. If any litigation is initiated by any Partner against
another Partner relating to this Agreement or the subject matter hereof, the
Partner prevailing in such litigation shall be entitled to recover, in addition
to all damages allowed by law and other relief, all court costs and reasonable
attorneys' fees incurred in connection therewith.
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8.8. WAIVER OF PARTITION. Notwithstanding any statute or principle of law
to the contrary, each Partner hereby agrees that, during the term of the
Partnership, it shall have no right (and hereby waives any right that it might
otherwise have had) to cause any Partnership property to be partitioned or
distributed in kind (except as permitted by Section 7.4).
8.9. GENDER AND NUMBER. Whenever required by the context, as used in this
Agreement, the singular number shall include the plural and the neuter shall
include the masculine or feminine gender, arid vice versa.
8.10. CAPTIONS. The Article and Section headings appearing in this
Agreement are for convenience of reference only and are not intended, to any
extent or for any purpose, to limit or define the text of any Article or
Section.
8.11. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be an original but all of which shall constitute but one document.
EXECUTED by the undersigned as of the date first above written.
GENERAL PARTNER:
API NO. 1, LLC
By: /s/ Robert P. Wynn
------------------------------------------
Name: Robert P. Wynn
Title: Vice President, Secretary and Treasurer
LIMITED PARTNER
API NO. 2, LLC
By: /s/ Robert P. Wynn
------------------------------------------
Name: Robert P. Wynn
Title: Vice President, Secretary and Treasurer
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EXHIBIT A
<Table>
<Caption>
Capital
General Partner Address Percentage
- --------------- ------- ----------
API NO. 1, LLC 7289 Garden Road, 1%
Suite 200
Riviera Beach, Florida 33404
LIMITED PARTNER
API NO. 2, LLC 7289 Garden Road, 99%
Suite 200
Riviera Beach, Florida 33404
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