AGREEMENT OF LIMITED PARTNERSHIP
OF
EXCEL OF TENNESSEE L.P.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS..........................................................................5
Section 1.1 Terms Defined Herein......................................5
Section 1.2 Other Definitional Provisions.............................7
ARTICLE II
FORMATION; NAME AND PURPOSE..........................................................8
Section 2.1 Formation.................................................8
Section 2.2 Name......................................................8
Section 2.3 Business Purpose..........................................8
Section 2.4 Registered Offices and Registered Agents..................8
ARTICLE III
CAPITAL CONTRIBUTIONS AND LOANS......................................................8
Section 3.1 Capital Contributions.....................................8
Section 3.2 Capital Accounts..........................................9
Section 3.3 Capital Withdrawal Rights, Interests and Priority........11
Section 3.4 Loans by Partners........................................11
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS.......................................................11
Section 4.1 Profits, Losses and Distributive Shares of Tax Items.....11
Section 4.2 Allocation of Income Loss and Credits....................12
Section 4.3 Section 704(c) and Revaluation Allocations...............14
Section 4.4 General Allocation Provisions............................14
Section 4.5 Non-Liquidation Cash Distribution........................14
Section 4.6 Liquidation Distributions................................14
Section 4.7 Withholding of Distributions.............................15
Section 4.8 No Priority..............................................15
Section 4.9 Tax Withholding..........................................15
Section 4.10 Reserves.................................................15
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ARTICLE V
GENERAL PARTNER.....................................................................16
Section 5.1 Authorized Acts..........................................16
Section 5.2 Management of Partnership Business.......................16
Section 5.3 Business Control.........................................16
Section 5.4 Transfer or Withdrawal by General Partners...............16
Section 5.5 Admission of Additional General Partners.................17
Section 5.6 Indemnification..........................................17
Section 5.7 Restrictions on General Partner's Authority..............17
ARTICLE VI
LIMITED PARTNERS....................................................................18
Section 6.1 Authority of Limited Partners............................18
Section 6.2 Voting Rights............................................18
Section 6.3 Restrictions on Transfer.................................18
Section 6.4 Substitute Limited Partners..............................18
Section 6.5 Assignees................................................18
ARTICLE VII
TERM AND DISSOLUTION................................................................19
ARTICLE VIII
ACCOUNTING AND BANK ACCOUNTS........................................................20
Section 8.1 Fiscal Year and Accounting Method........................20
Section 8.2 Books and Records........................................20
Section 8.3 Financial Reports........................................20
Section 8.4 Tax Returns and Elections; Tax Matters Partner...........20
Section 8.5 Section 754 Election.....................................21
Section 8.6 Negotiable Instruments, Deeds, Contracts and Shares......21
ARTICLE IX
MISCELLANEOUS.......................................................................21
Section 9.1 Title to Assets..........................................21
Section 9.2 Nature of Interest in the Partnership....................22
Section 9.3 Organizational Expenses..................................22
Section 9.4 No Third Party Rights....................................22
Section 9.5 Entire Agreement; Amendment..............................22
Section 9.6 Amendment to Certificate.................................22
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Section 9.7 Severability.............................................22
Section 9.8 Binding Agreement........................................22
Section 9.9 Governing Law............................................22
Section 9.10 Headings.................................................23
Section 9.11 Counterparts.............................................24
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AGREEMENT OF LIMITED PARTNERSHIP
OF
EXCEL OF TENNESSEE, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP is made and entered into as of
the 20th day of December, 1996, by and between Excel Industries of Michigan,
Inc., a Michigan corporation, as general partner (the "General Partner"), and
X.E. Co., a Michigan corporation, as limited partner (the "Limited Partner")
WHEREAS, the parties hereto desire to form and operate a limited
partnership under the laws of the State of Tennessee and the terms and
conditions recited herein;
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
Section 1.1 TERMS DEFINED HEREIN
As used herein, te following defined terms shall have the following
meanings, unless the context otherwise specifies:
"ACT" means the Revised Uniform Limited Partnership Act as adopted
by the State of Tennessee, TENN. CODE ANN. Section 61-2-101 ET SEQ., and any
successor statute.
"AGREEMENT" means this Agreement of Limited Partnership, as amended and
in effect from time to time.
"AGREEMENT" means the aggregate amount of cash on hand or in bank,
money market or similar accounts of the Partnership from time to time derived
from any source (other than Capital Contributions and Liquidation Proceeds)
which the General Partner determines is available for distribution to the
Partners after taking into account any amount required or appropriate to
maintain a reasonable amount of Reserves.
"CAPITAL ACCOUNT" means the separate account established and
maintained for each Partner by the Partnership pursuant to Section 3.2.
"CAPITAL CONTRIBUTION", with respect to a Partner, means the total
amount of cash and the fair value of property contributed by such Partner (or
such Partner's predecessor in interest) to the capital of the Partnership. The
initial Capital Contribution of each Partner pursuant to Section 3.1 hereof
is set forth on SCHEDULE A attached hereto, which schedule shall be amended from
time to time to reflect any additional Capital Contributions.
"CERTIFICATE" " means the Certificate of Limited Partnership as filed
with the Secretary of State of Tennessee, as amended from time to time.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or corresponding provisions of future laws.
"CREDIT" means all tax credits allowed by the Code with respect to
activities of the Partnership or the Property.
"FAIR VALUE" of an asset means its fair market value.
"GENERAL PARTNER" means any Person designated as a General Partner in
the Schedule or any Person who becomes a General Partner as provided herein.
"INCOME" AND "LOSS" mean, respectively, for each fiscal year or
other period, an amount equal to the Partnership's taxable income or loss for
such year or period, determined in accordance with Code Section 703(a),
except that for this purpose (i) all items of income, gain, deduction or loss
required to be separately stated by Code Section 703(a)(1) shall be included
in taxable income or loss; (ii) tax exempt income shall be added to taxable
income or loss; (iii) any expenditures described in Code Section 705(a)(2)(B)
(or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulation Section 1.704-1 (b)(2)(iv)(i)) and not otherwise taken into
account in computing taxable income or loss shall be subtracted; and (iv)
taxable income or loss shall be adjusted to reflect any item of income or
loss specifically allocated in Article IV hereof.
"INTEREST" refers to all of a Partner's rights and interests in the
Partnership in the Partner's capacity as a Partner, all as provided in the
Certificate, this Agreement and the Act including, without limitation, such
Partner's interest in the total capital, profits and losses of the Partnership.
"LIMITED PARTNER" means any Person designated as a Limited Partner in
the Schedule or any Person who becomes a Limited Partner as provided herein.
"LIQUIDATION" shall have the meaning set forth in Treasury Regulation
Section 1.704(b)(2)(iI)(g) and any amendatory or successor Section of such
Regulation.
"LIQUIDATION PROCEEDS" means the proceeds from the sale of any Property
and all Property at the time of liquidation of the Partnership and all Proceeds
thereof, including, without limitation, the receipt of a note or other
instrument providing for installment payments.
"PARTNER" means any General Partner or Limited Partner.
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"PARTNERSHIP" means the limited partnership formed in accordance with
this Agreement by the parties hereto, as said Agreement may from time to time be
construed and amended.
"PERCENTAGE INTEREST" means the portion or share from time to time
which a Partner shares in the Partnership's Income, Losses, and Credits. The
initial Percentage Interests of the Partners are set forth on SCHEDULE A
attached hereto. SCHEDULE A shall be amended from time to time to reflect any
changes in such Percentage Interests of the Partners.
"PROPERTY" means all properties and assets in which the Partnership may
have an interest or own from time to time.
"RESERVES" means amount set aside from time to time by the General
Partner pursuant to Section 4.10 hereof.
"REVALUATION" shall mean the occurrence of any event described in
clause (x), (y) or (z) of Section 3.2 hereof in which the book basis of Property
is adjusted to its Fair Value.
'SCHEDULE" means SCHEDULE A annexed hereto as amended from time to time
and as so amended at the time of reference thereto.
"TAX MATTERS PARTNER" has the meaning set forth in Section 8.4 hereof.
"TREASURY REGULATIONS" means the final and temporary regulations
promulgated by the United States Treasury Department pursuant to the Code, as
such regulations are amended and in effect from time to time.
"WITHDRAWAL" means, with respect to the General Partner, the General
Partner's ceasing to be a general partner upon the occurrence of any of the
events specified in TENN. CODE ANN. Section 61-2-402(a).
Section 1.2 OTHER DEFINITIONAL PROVISIONS
(a) As used in this Agreement, accounting terms not defined in
this Agreement, and accounting terms partly defined to the extent not
defined, shall have the respective meanings given to them under
generally accepted accounting principles.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and section, subsection, schedule and exhibit references are
to this Agreement unless otherwise specified.
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(c) Words of the masculine gender shall be deemed to include
the feminine or neuter genders, and vice versa, where applicable. Words
of the singular number shall be deemed to include the plural number,
and vice versa, where applicable.
ARTICLE II
FORMATION; NAME AND PURPOSE
Section 2.1 FORMATION
The parties hereby agree to form a limited partnership pursuant to the
provisions of the Act and this Agreement.
Section 2.2 NAME
The name of the Partnership shall be "Excel of Tennessee, L.P."
Section 2.3 BUSINESS PURPOSE
The purpose of the Partnership is (1) to own and operate that certain
manufacturing facility which produces encapsulated window assemblies for the
automotive industry located in Lawrenceburg, Tennessee and to carry on all
businesses and activities related or ancillary thereto and (ii) to carry on such
other businesses permitted under the Act as the Partners shall determine from
time to time.
Section 2.4 REGISTERED OFFICES AND REGISTERED AGENTS
(a) TENNESSEE. The registered office of the Partnership in
Tennessee is 2220 Helton Drive, Lawrenceburg, Tennessee 38464. The
registered agent for the Partnership at such office shall be Joel Mow.
The General Partner may, in its discretion, change the Partnership's
registered office or registered agent in Tennessee, PROVIDED THAT the
appropriate form of notice is filed with the Tennessee Secretary of
State.
(b) OTHER OFFICES AND REGISTERED AGENTS. The Partnership may
have other offices at other places within or without Tennessee as the
General Partner may determine.
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ARTICLE III
CAPITAL CONTRIBUTIONS AND LOANS
Section 3.1 CAPITAL CONTRIBUTIONS
Simultaneously with the execution of this Agreement, each Partner shall
contribute to the Partnership such Partner's initial Capital Contribution as set
forth on SCHEDULE A for that Partner. Each Partner's initial Capital
Contribution shall be treated for purposes of this Agreement as having been made
on the effective date of this Agreement. The Partners agree that as of the date
of this Agreement (and after the foregoing initial Capital Contributions) they
are allocated the Percentage Interests in the Partnership set forth on SCHEDULE
A attached hereto. The Percentage Interests of the Partners may not be changed
or altered except pursuant to the terms and conditions of this Agreement or as
the Partners shall otherwise unanimously agree in writing. Capital Contributions
subsequent to the initial Capital Contributions shall be reflected by
appropriate amendments to SCHEDULE A.
Section 3.2 CAPITAL ACCOUNTS
A separate Capital Account shall be maintained for each Partner. Each
Partner's Capital Account shall be equal to such Partner's initial Capital
Contribution, as provided in Section 3.1 hereof. Thereafter, each Partner's
Capital Account shall be: (i) increased by (a) the amount of money contributed
by such Partner, (b) the Fair Value of property contributed by such Partner (net
of liabilities secured by such contributed property that the Partnership is
considered to assume or take subject to under Code Section 752), (c) allocations
to such Partner, pursuant to Article IV, of Partnership income or gain (or items
thereof), and (d) to the extent not already netted out under clause (ii)(b)
below, the amount of any Partnership liabilities assumed by the Partner or which
are secured by any property distributed to such Partner; and (ii) decreased by
(a) the amount of money distributed to such Partner, (b) the Fair Value of
property distributed to such Partner (net of liabilities secured by such
distributed property that such Partner is considered to assume or take subject
to under Code Section 752), (c) allocations to such Partner, pursuant to Article
IV, of Partnership loss or deduction (or items thereof), and (d) to the extent
not already netted out under clause (i)(b) above, the amount of any liabilities
of the Partner assumed by the Partnership or which are secured by any property
contributed by such Partner to the Partnership.
In the event any Interest is transferred in accordance with the terms
of this Agreement, the transferee shall succeed to the Capital Account of the
Transferor to the extent it related to the transferred Interest.
In the event of (x) an additional Capital Contribution by an existing
or an additional Partner of more than a de minimis amount which results in a
shift in Interests, (y) the distribution by the Partnership to a Partner of more
than a de minimis amount of property as consideration for an
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Interest, or (z) the liquidation of the Partnership within the meaning of
Treasury Regulation Section 1.704- 1 (b)(2)(ii) (g), the book basis of the
Property shall be adjusted to Fair Value and the Capital Accounts of' all the
Partners shall be adjusted simultaneously to reflect the aggregate net
adjustment to book basis as if the Partnership recognized gain and loss equal
to the amount of such aggregate net adjustment; PROVIDED HOWEVER that the
adjustments resulting from clause (x) or (y) above shall be made only if the
Partners determine that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Partners.
In the event that Property is subject io Code Section 704(c) or is
revalued on the books of the Partnership in accordance with the preceding
paragraph pursuant to Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations,
the Partners' Capital Accounts shall be adjusted in accordance with Section
1.704-1(b)(2)(iv)(g) of the Treasury Regulations for allocations to the Partners
of depreciation, amortization and gain or loss, as computed for book purposes
(and not tax purposes) with respect to such property.
The foregoing provisions of this Section 3.2 and the other provisions
of this Agreement relating to the maintenance of Capital Accounts are intended
to comply with Treasury Regulation Section 1.704-1(b) and 1.704-2, and shall be
interpreted and applied in a manner consistent with such Treasury Regulations.
In the event the General Partner determines that it is prudent or advisable to
modify the manner in which the Capital Accounts or any increases or decreases
thereto, are computed in order to comply with such Treasury Regulations, the
General Partner may cause such modification to be made, provided that it is not
likely to have a material effect on the amounts distributable to any Partner
upon the dissolution of the Partnership.
Section 3.3 CAPITAL WITHDRAWAL RIGHTS, INTERESTS AND PRIORITY
Except as expressly provided in this Agreement, no Partner shall be
entitled to (i) withdraw or reduce such Partner's Capital Account, (ii) receive
any distributions from the Partnership, or (ii) withdraw or- receive property
other than cash in return for such Partner's Capital Contribution. No Partner
shall be entitled to receive or be credited with any interest on the balance in
such Partner's Capital Account at any time. Except as may be otherwise expressly
provided herein, no Partner shall have Priority over any other Partner as to the
return of the balance in such Partner's Capital Account.
Section 3.4 LOANS BY PARTNERS
Any Partner may make a loan to the Partnership in such amounts, at such
times and on such terms and conditions as may be approved by the General
Partner. Loans by any Partner to the Partnership shall not be considered as
contributions to the capital of the Partnership.
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ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
Section 4.1 PROFITS, LOSSES AND DISTRIBUTIVE SHARES OF TAX ITEMS
The Partnership's Income or Loss, as the case may be, for each fiscal
year of the Partnership, as determined in accordance with such method of
accounting as may be adopted for the Partnership pursuant to Article VIII
hereof, shall be allocated to the Members for both financial accounting and
income tax purposes as set forth in this Article IV.
Section 4.2 ALLOCATION OF INCOME LOSS AND CREDITS
(a) After giving affect to the allocations set forth in
Section 4.2(b) (the 'Special Allocations"), Income, Loss and Credits
for each fiscal year shall allocated among the Partners in accordance
with their respective Percentage Interests. To the extent there is a
change in the respective Percentage Interests of the Partners during
the year, Income, Loss and Credits shall be allocated among the
pre-adjustment periods as provided in Section 4.4.
(b) (i) QUALIFIED INCOME OFFSET. Notwithstanding the
allocations provided in Section 4.2(a) and except as otherwise
provided in this Section 4.2(b), in the event that any Partner
receives an unexpected allocation of loss or deduction or an
unexpected distribution as described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) which results in a deficit
balance in such Partner's Capital Account (after taking into account
reductions for the items set forth ii Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6)) in excess of (i) the amount
such Partner is obligated to restore., if any, and (ii) the amount
such Partner 's deemed to be obligated to restore pursuant to the
penultimate sentence of Treasury Regulation Section 1.704-2(g)(1)
and Section 1.704-2(i)(5), such Partner shall be allocated items of
gross income or gain in the amount necessary to eliminate such
excess as quickly as possible. This provision is intended to satisfy
the definition of "qualified income offset" as defined in Treasury
Regulation 1.704-1(b)(2)(ii)(d).
(ii) MINIMUM GAIN. Notwithstanding the allocations
provided in Section 4.2(a) and except as otherwise provided in this
Section 4.2(b), if there is a net decrease in "Partnership Minimum
Gain," defined below, during any fiscal year, each Partner shall be
allocated items of gross income and gain for such fiscal year and,
if necessary, for subsequent fiscal years, in an amount equal to
such Partner's share of the net decrease in such Partnership Minimum
Gain, determined in accordance with Treasury Regulation Section 1.704-
(2)(g)(2). This provision is intended to satisfy the definition of a
"minimum gain chargeback" as defined in Treasury Regulation Section
1.704-2(f), and the term "Partnership Minimum Gain" shall have the
meaning ascribed to the term "partnership minimum main" in Treasury
Regulation Section 1.704-2(d).
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(iii) GROSS INCOME ALLOCATION. Notwithstanding the
allocations provided in Section 4.2(a) and except as otherwise
provided in this Section 4.2(b), in the event any Partner has a
deficit Capital Account at the close of any fiscal year which is in
excess of the sum of (a) the amount such Partner is obligated to
restore pursuant to any provision of this Agreement and (b) the
amount such Partner is deemed to be obligated to restore pursuant to
the penultimate sentences of Treasury Regulation Section
1.704-2(g)(1) and 1.704-2(i)(5), each Partner shall be specially
allocated items of gross income and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant
to this Section is- 4.2(b)(iii) shall be made only if and to the
extent that such Partner would have a deficit Capital Account in
excess of such sum after all other allocations provided for in this
Section 4.2 have been made as if Section 4.2(b)(i) hereof and this
Section 4.2(b)(iii) were not in this Agreement.
(iv) PARTNER NONRECOURSE DEDUCTIONS AND PARTNER
NONRECOURSE DEB MINIMUM GAIN. Notwithstanding the allocation
provided for in Section 4.2(a) and 'except as otherwise provided in
this Section 4.2(b), any Partner Nonrecourse Deduction, defined as
having the meaning ascribed to the term "partner nonrecourse
deduction" in Treasury Regulation Section 1.704-2(i)(2) for any
fiscal year shall be allocated to the Partner who bears the economic
risk of loss in accordance with Treasury Regulation Section
1.704-2(i)(1), and if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain during any fiscal year, exch Partner shall be
allocated items of gross income and gain for such fiscal year and,
if necessary, for subsequent fiscal years, in an amount equal to
such Partner's share of the net decrease in such Partner's
Nonrecourse Debt Minimum Gain, determined in accordance with
Treasury Regulation Section 1.704-2(i)(4). This provision is
intended to comply with the chargeback provisions of Treasury
Regulation Section 1.704-2(i)(4), and the term "Partner Nonrecourse
Debt Minimum Gain" shall have the meaning ascribed to the term
"partner nonrecourse debt minimum gain in Treasury Regulation
Section 1.704-2(i)(3).
(v) PARTNERSHIP NONRECOURSE DEDUCTIONS.
Notwithstanding the allocations provided for in Section 4.2(a) and
except as otherwise provided in this Section 4.2(b), any Partnership
Nonrecourse Deductions defined a having the meaning ascribed to the
term "Partnership Nonrecourse Deductions" in Treasury Regulation
Section 1.704-2(c), for any fiscal year shall be allocated to the
Partners in accordance with their Percentage Interests as provided
under Treasury Regulation Section 1.704-2(c)
(vi) LIMITATION ON LOSS ALLOCATIONS. The Losses
allocated pursuant to Section 4.2(a) shall not exceed the maximum
amount of Losses that can be allocated without causing any Partner
to have a deficit balance in such Partner's Capital Account at the
end of any fiscal year (decreased by the amount such Partner is
obligated to restore to the Partnership and the amount such Partner
is deemed to be obligated to restore pursuant to the penultimate
sentence of Treasury Regulations Section 1.704-2(g )(1) and Section
1.704-2(i)(5), and increased by the items set forth in Treasury
Regulations Section 1-704-1 (b)(2)(ii)(d)(4), (5) or (6)). All
Losses in excess of the limitations set forth in this paragraph
shall be allocated among
8
the Partner or Partners, pro-rata to the extent each, respectively, is
liable, exposed or otherwise bears the economic rise of loss with
respect to any debt or other -obligation of the Partnership.
(vii) CURATIVE ALLOCATIONS. The allocation set
forth in Sections 4.2(b)(i), (ii), (iii), (iv), (v) and (vi) hereof
(the "Regulatory Allocations") are intended to comply with certain
requirements of Treasury Regulations Section 1.7( 4-1 and J Section
1.704-2. Notwithstanding any other provision of this Section 4.2
(other than Regulatory Allocations), the Regulatory Allocations
shall be taken into account in allocating Losses and Income and
items of gross income, gain and deduction among the Partners so
that, to the extent possible, the net amount of such allocations to
the Partners shall be equal to the net amount that would have been
allocated to the Partners if the Regulatory Allocations had not
occurred. Any Regulatory Allocations hereunder shall thereafter be
cured or reversed in the quickest possible time frame but in a
manner that is not in violation of the Treasury Regulation.
Section 4.3 SECTION 704(c) AND REVALUATION ALLOCATIONS.
In accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss and deduction with respect to any property
contributed to the capital of the Partnership shall, solely for tax purposes, be
allocated among the Partners so as to take into account any variation between
the adjusted basis of such property to the Partnership for federal income tax
purposes and its Fair Value immediately after the adjustment in the same manner
as under Code Section 704(c) and the Treasury Regulations thereunder. In the
event of a Revaluation, subsequent allocations of income, gain, loss and
deduction with respect to such property shall take account of any variations
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its Fair Value immediately after the adjustment in the
same manner as under Code Section 704(c) and the Treasury Regulations
thereunder. Any elections or other decisions relating to such allocations shall
be made by the General Partner in a manner that reasonably reflects the purpose
and intention of this Agreement. Allocations pursuant to this Section 4.3 are
solely for income tax purposes and shall not affect, or in any way be taken into
account in computing, for book purposes, any Partner's Capital Account or share
of income or loss, pursuant to any provision in this Agreement.
Section 4.4 GENERAL ALLOCATION PROVISIONS.
Except as otherwise provided in this Agreement, all items that are
components of net Income or net Loss shall be allocated among the Partners in
the same proportions as they share such net Income or net Loss, as the case may
be, for the year. For purposes of determining the Income, Loss or any other
items for any period, Income, Loss or any such other items shall be determined
on a daily, monthly or other basis, as determined by the General Partner using
any permissible method under the Code and the Treasury Regulations.
Section 4.5 NON-LIQUIDATION CASH DISTRIBUTION.
9
This amount, if any, of Available Cash shall be reasonably determined
by the General Partner from time to time and shall be distributed to the
Partners at such times and in such amounts as reasonably determined by the
General Partners at such times and in such amounts as reasonably determined by
the General Partner, in proportion to the Partners' respective Percentage
Interests.
Section 4.6 LIQUIDATION DISTRIBUTIONS
In the event of a Liquidation, Liquidation Proceeds shall be
distributed in the following order of priority:
(a) To the payment of debts and liabilities of the Partnership
(including to Partners to the extent otherwise permitted by law) and
the expenses of liquidation; then
(b) To the settling up of such reserves as the Person required
or authorized by law to wind up the Partnership's affairs may
reasonably deem necessary or appropriate for any disputed, contingent
or unforseen liabilities or obligations of the Partnership, provided
that any such reserves shall be paid over by such person to an
independent escrow agent, to be held by such agent or its successor for
such period as such person shall deem advisable for the purpose of
applying such reserves to the payment of such liabilities or
obligations and at the expiration of such period, the balance of such
reserves, if any, shall be distributed as hereinafter provided; the:
(c) To the Partners in accordance with and to the extent of
their respective Capital Account balances, after taking into account
the allocation of all Income or Loss pursuant to this Agreement for the
fiscal year(s) in which the Partnership is liquidated and all
adjustments to the Partner's Capital Accounts pursuant to Section 3.2
hereof.
All such Liquidation distributions shall be made no later than the end of the
taxable year during which such Liquidation takes place or if later, within 90
days after the date of such Liquidation.
Section 4.7 WITHHOLDING OF DISTRIBUTIONS.
Notwithstanding any other provision of this Agreement, to the extent
not inconsistent with the Treasury Regulations promulgated under Code Section
704, the General Partner (or any Person required or authorized by law to wind up
the Partnership affairs) may suspend, reduce or otherwise restrict distributions
of Available Cash and Liquidation Proceeds when, in its sole opinion, such
action is in the best interests of the Partnership.
Section 4.8 NO PRIORITY.
Except as may be otherwise expressly provided herein, no Partner shall
have priority over any other Partner as to Partnership income, gain, los,
credits and deductions or distributions.
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Section 4.9 TAX WITHHOLDING.
Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines to be necessary or
appropriate to cause the Partnership to comply with any withholding requirements
established under any federal, state or local tax law, including, without
limitation, withholding on any distribution to any Partner. For all purposes of
this Article IV, any amount withheld on any distribution and paid over to the
appropriate governmental body shall be treated as if such amount had in fact
been distributed to the Partner.
Section 4.10 RESERVES
The General Partner shall have the right to establish, maintain and
expend such Reserves to provide for working capital, future maintenance, repair
or replacement of the Property, debt service, future investments and such other
purposes as the general Partner may deem necessary or advisable.
ARTICLE V
GENERAL PARTNER
Section 5.1 AUTHORIZED ACTS.
Except as otherwise provided in this Agreement, the General Partner, in
the name and on behalf of the Partnership, shall have the authority to manage
the Partnership and its business and, in furtherance of same, shall have the
authority to perform all acts which the Partnership is authorized to perform.
Section 5.2 MANAGEMENT OF PARTNERSHIP BUSINESS
The business affairs of the Partnership shall be managed by the General
Partner. The General Partner shall devote such amount of its time and services,
and the time and services of its employees and agents, as, in its discretion, it
deems necessary to the proper conduct of such business affairs. Any party may
rely on any action taken by the General Partner as having been a duly-authorized
act of the Partnership.
Section 5.3 BUSINESS CONTROL.
No Limited Partner (except one who may also be the General Partner, and
then only in such Partner's capacity as General Partner) shall participate in or
having any control over the Partnership business, except as required by law.
Each Limited Partner hereby consents to the exercise by the General Partner of
the powers conferred upon it by this Agreement and to the employment, when, if
in the discretion of the General Partner, the same is deemed necessary or
advisable , of such employees, agents, attorneys or other professionals, the
General Partner may determine (notwithstanding that any parties to this
Agreement may have an interest in, or be one of, such
11
employees, agents, attorneys or other professionals). No Limited Partner (except
one who may also be a General Partner, and then only in such Partner's capacity
as General Partner) shall have any authority or right to act for or bind the
Partnership.
Section 5.4 TRANSFER OR WITHDRAWAL BY GENERAL PARTNERS.
No General Partner may (i) voluntarily resign or withdraw as a General
Partner of the Partnership or (ii) transfer, sell or assign its Interest in the
Partnership without the consent of all the remaining Partners. Any transfer of
an Interest or any portion thereof of a General Partner without the consent
required under this Section 5.4 shall be treated as a Withdrawal of such General
Partner.
Section 5.5 ADMISSION OF ADDITIONAL GENERAL PARTNERS.
Additional General Partners may only be admitted to the Partnership
with the unanimous written consent of all the Partners.
Section 5.6 INDEMNIFICATION.
The Partnership shall indemnify and hold harmless the General Partner
against any claims or liability incurred by the General Partner provided that
the acts or omissions giving rise to such claims or liabilities were performed
in good faith by the General Partner in the reasonable belief that the General
Partner was acting within the scope of its authority under this Agreement.
Nothing contained in this paragraph shall be construed as imposing any liability
on any Limited Partner (except as one who may also be a General Partner, and
then only in such Partner's capacity as a General Partner).
Section 5.7 RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY.
The General Partner shall not have authority to, and covenants and
agrees that it shall not, do any of the following acts without the unanimous
consent of all of the Partners:
(a) Cause or permit the Partnership to engage in any activity
that is not consistent with the business purpose of the Partnership set
forth in Section 2.3 hereof;
(b) Knowingly do any act in contravention of this Agreement;
(c) Knowingly do anything that would substantially impair the
ability of the Partnership to carry on the ordinary business of the
Partnership except as otherwise provided herein;
(d) Confess a judgment against the Partnership;
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(e) Possess any Property of the Partnership or assign rights
in any Property of the Partnership, other than for Partnership
purposes;
(f) Admit any additional Partners;
(g) Sell or otherwise encumber or dispose of substantially
all of the Property of the Partnership; or
(h) Cause the Partnership to incur any indebtedness in excess
of $10,000,000.00.
ARTICLE VI
LIMITED PARTNERS
Section 6.1 AUTHORITY OF LIMITED PARTNERS
The Limited Partners shall have no authority (i) to take part in the
management or control of the Partnership or of its business or affairs or (ii)
to act for or bind the Partnership in any matter.
Section 6.2 VOTING RIGHTS
Notwithstanding the provisions of Section 6.1, the Limited Partners
shall have the right to vote on or consent to such matters as are specifically
reserved for the approval of all Partners or of the Limited partners hereunder.
Section 6.3 RESTRICTIONS ON TRANSFER
Except as permitted below and otherwise provided herein, no Limited
partner may transfer, sell, alienate, assign or otherwise dispose of all or any
part of such Limited Partner's Interest in the Partnership, whether voluntarily,
to involuntarily or by operation of law, or at judicial sale or otherwise,
without the consent of all of their remaining Partners. In the event such
consent is obtained and the transfer is effected, the transferee of such
Interest shall become a substitute Limited Partner pursuant to the provisions of
Section 6.4. In the event the transferee of an Interest of a Limited Partner is
not admitted as a substitute Limited Partner pursuant to Section 6.4, then the
provisions of Section 6.5 shall apply.
Section 6.4 SUBSTITUTE LIMITED PARTNERS
No Limited Partner shall have the right to substitute an assignee as a
substitute Limited Partner in such Limited Partner's place, unless the consent
required by Section 6.3 shall have been obtained and the provisions of this
Section 6.4 shall have been complied with. Any substitute Limited Partner shall,
as a condition of admission as a substitute Limited partner, agree to be bound
by all the provisions of this Agreement and shall execute such instrument or
instruments as shall be
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required by the General Partner to signify such substitute Limited Partner's
agreement to be bound by all the provisions of this Agreement. Upon the
admission of substitute Limited Partner, the Schedule shall be amended to
reflect such admission.
Section 6.5 ASSIGNEES
An assignee of a Limited Partner who does not become a substitute
Limited Partner shall have the right to receive the same share of profits,
losses and distributions of the Partnership to which the assigning Limited
Partner would have been entitled if no such assignment had been made by such
Limited Partner. Any Limited partner who shall assign all of such Limited
Partner's Interest in the Partnership shall cease to be a Limited Partner except
that, unless and until the assignee of such Limited Partner becomes a substitute
Limited Partner, the assignor Limited Partner shall retain all the statutory
rights and be subject to all the statutory obligations of an assignor Limited
Partner, subject to the assignee's right under the preceding sentence. As
assignee of the interest of a Limited Partner who does not become a substitute
Limited Partner as provided aforesaid and who desires to make a further
assignment of such assignee's Interest shall be subject to all the provisions of
this Article VI to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of such Limited Partner's Interest.
ARTICLE VII
TERM AND DISSOLUTION
The Partnership shall continue in full force and effect until December
31, 2026, except that the Partnership shall be dissolved prior to such date upon
the happening of any of the following events:
(a) the sale or other disposition of all or substantially
all of the assets of the Partnership;
(b) the unanimous vote of the Partnership to dissolve;
(c) the happening of any event, other than a Withdrawal of a
General Partner, that causes a dissolution of the Partnership under the
Act; or
(d) the Withdrawal of a General Partner, unless (i) at the
time of such withdrawal there is at least one remaining General Partner
and all such General Partners agree to continue the business of the
Partnership (which continuation of the business of the Partnership
(which continuation of the business of the Partnership is hereby
authorized) or (ii) within ninety (90) days after such Withdrawal all
remaining partners agree in writing to continue the business of the
Partnership and agree in writing to the appointment of one (1) or more
additional General Partners, if necessary or desired.
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Upon a Withdrawal of a General Partner who is the Sole General Partner
under clause (d) above, the Property of the Partnership shall be transferred
from the withdrawing General Partner to a Person who shall act as a liquidating
trustee and: (A) hold the Property during the winding up of the business of the
Partnership if no agreement in writing to continue the business of the
Partnership and to admit one (1) or more additional General Partners is made by
the remaining Partners under clause (d)(ii) above or (B) transfer the Property
to such additional General Partner(s) as are admitted under clause (d)(ii) upon
their admission.
ARTICLE VIII
ACCOUNTING AND BANK ACCOUNTS
Section 8.1 FISCAL YEAR AND ACCOUNTING METHOD
The fiscal year and taxable year of the Partnership shall be a 52-53
week year ending on the last Saturday in December. The accrual method of
accounting shall be used by the Partnership.
Section 8.2 BOOKS AND RECORDS
At all times during the existence of the Partnership, the Partnership
shall cause to be maintained full and accurate books of account, which shall
reflect all Partnership transactions and be appropriate and adequate for the
Partnership's business. The books and records of the Partnership shall be
maintained at the offices of the Partnership where the General Partner perform
its primary duties hereunder. Copies of such books and records shall be provided
from time to time to teach of the Partners upon reasonable written request. In
addition, each Partner (or such Partner's designated representative) shall have
the right during ordinary business hours and upon reasonable notice to inspect
and copy (at such Partner's own expense) all books and records of the
Partnership.
Section 8.3 FINANCIAL REPORTS
(a) After the end of each fiscal year, a balance sheet of the
Partnership as of the end of the such year and related financial
statements for the year then ended shall be delivered to each Partner.
(b) After the end of each fiscal year, all information with
respect to the Partnership necessary for the Partners' federal and
state income tax returns and a copy of the Partnership's federal and
state income tax returns shall be delivered to each Partner.
Section 8.4 TAX RETURNS AND ELECTIONS; TAX MATTERS PARTNER
The Partnership shall cause to be prepared and timely filed all
federal, state and local income tax returns or other returns or statements
required by applicable law. The Partnership shall claim
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all deductions and make such elections for federal or state income tax purposes
which the General Partner reasonably believes will produce the most favorable
tax results for the Partners. Excel Industries of Michigan, Inc. is hereby
designated as the Partnership's "Tax Matters Partner," who shall act as the
Partnership's tax matters partner," as defined in the Code, and in such capacity
is hereby authorized and empowered to act for and represent the Partnership and
each of the Partners before (i) the Internal Revenue Service (the "Service") in
any audit or examination of any Partnership tax return, and (ii) any court
selected by the Partners for judicial review of any adjustment assessed by the
Service. Excel Industries of Michigan, Inc. does hereby accept such designation.
Each of the Partners by execution of this Agreement consents and agrees to
become bound by all actions of the Partner acting as Tax Matters Partner,
including any contest, settlement or obligation or position which the Tax
Matters Partner may deem proper under the circumstances. The Partners
specifically acknowledge, without limiting the general applicability of this
Section, that the Tax Matters Partner shall not be liable, responsible or
accountable in damages or otherwise to the Partnership or any Partner with
respect to any action taken by such partner in its capacity as the Tax Matters
Partner, provided it used reasonable business judgment with respect to the
action taken. All out-of-pocket expenses incurred by the Tax Matters Partner in
its capacity as the Tax Matters Partner shall be considered expenses of the
Partnership for which the Tax Matters Partner shall be entitled to full
reimbursement.
Section 8.5 SECTION 754 ELECTION
In the event (i) a distribution of Partnership assets occurs which
satisfies the provisions of Section 734 of the Code, or (ii) a transfer of an
Interest occurs which satisfies the provisions of Section 743 of the Code, upon
the determination of the General Partner, the Partnership shall elect, pursuant
to Section 754 of the Code, to adjust the basis of the Partnership's property to
the extent allowed by such Section 734 or 743 and shall cause such adjustments
to be made and maintained.
Section 8.6 NEGOTIABLE INSTRUMENTS, DEEDS, CONTRACTS AND SHARES
(a) EXECUTION OF NEGOTIABLE INSTRUMENTS. All checks, drafts,
notes, bonds bills of exchange and orders for the payment of money of
the Partnership shall be signed by the General Partner or any Person
authorized by the General Partner from time to time.
(b) EXECUTION OF DEEDS, CONTRACTS, ETC. All deeds and
mortgages made by the Partnership and other material written contracts
and agreements into which the Partnership enters other than
transactions in the ordinary course of business shall be executed in
its name by the General Partner.
ARTICLE IX
MISCELLANEOUS
Section 9.1 TITLE TO ASSETS
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Title to the Property and all other assets acquired by the Partnership
shall be held in the name of the Partnership. No Partner shall individually have
any ownership interest or rights in the Property or any other assets of the
Partnership, except directly by virtue of such Partnership's ownership of an
Interest. No Partnership shall have any right to seek or obtain a partition of
the Property or other assets of the Partnership nor shall any Partner have the
right to any specific assets of the Partnership upon the liquidation of or any
distribution from the Partnership.
Section 9.2 NATURE OF INTEREST IN THE PARTNERSHIP
A Partner's Interest shall be personal property for all purposes.
Section 9.3 ORGANIZATIONAL EXPENSES
The Partnership shall pay the expenses incurred in connection with the
creation and formation of the Partnership.
Section 9.4 NO THIRD PARTY RIGHTS
None of the provisions contained in this Agreement shall be for the
benefit of or enforceable by any third parties, including creditors of the
Partnership.
Section 9.5 ENTIRE AGREEMENT; AMENDMENT
This Agreement (together with the Certificate contains the entire
agreement among the Partners relative to the formation,, operation and
continuation of the Partnership. Except as otherwise expressly provided
elsewhere in this Agreement, this Agreement and the Certificate shall not be
altered, modified or changed except by a written document duly executed by all
Partners at the time of such alteration, modification or change.
Section 9.6 AMENDMENT TO CERTIFICATE
Each Partner appoints the General Partner, acting through an authorized
officer thereof, as its agent for the purpose of executing all certificates of
amendment, restatement, or cancellation to the Certificate which are approved as
provided in this Agreement or which are required to be filed with the Tennessee
Secretary of State pursuant to the Act.
Section 9.7 SEVERABILITY
In the event any provision of this Agreement is held to be illegal,
invalid or unenforceable to any extent, the legality and enforceability of the
remainder of this Agreement shall not be affected thereby and shall remain in
full force and effect and be enforced to the greatest extent permitted by law.
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Section 9.8 BINDING AGREEMENT
Subject to the restrictions on the disposition of Interests herein
contained, the provisions of this Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
Section 9.9 GOVERNING LAW
This Agreement shall be governed by and construe in accordance with the
laws of the State of Tennessee, without regard to the principles of conflicts of
law thereof.
Section 9.10 HEADINGS
The headings of the Articles and Sections of this Agreement are for
convenience only and shall not be considered in construing or interpreting any
of the terms or provisions hereof.
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Section 9.11 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which shall constitute one
agreement that is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GENERAL PARTNER
Excel Industries of Michigan, Inc.
By:_________________________________
/S/ Joseph A. Robinson
Treasurer
LIMITED PARTNER
X.E. Co.
By:_________________________________
/S/ Joseph A. Robinson
Treasurer
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SCHEDULE A
CAPITAL CONTRIBUTOR PERCENTAGE INTEREST
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Excel Industries of Michigan, Inc. $ 10.00 1%, as General Partner
X.E. Co. $ 990.00 99%, as Limited Partner
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