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KRISPY KREME
DOUGHNUTS, INC.SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549SCHEDULE 13D
Under the
Securities Exchange Act of 1934
Common
Stock, No Par Value
501014 10 4
(336)
725-2981
December 29, 2000
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following box
(Continued on following pages)
CUSIP No. 5010140 10 47 | Page 1 of 12 | ||||
1. |
NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NUMBER: McAleer Investments Limited Partnership | ||||
2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) /_/ | ||||
3. |
SEC USE ONLY | ||||
4. |
SOURCE OF FUNDS 00 | ||||
5. |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS | ||||
6. |
CITIZENSHIP OR PLACE OR ORGANIZATION North Carolina | ||||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7. 8. 9. 10. |
SOLE VOTING POWER |
863,268 | ||
SHARED VOTING POWER |
None | ||||
SOLE DISPOSITIVE POWER |
863,268 | ||||
SHARED DISPOSITIVE POWER |
None | ||||
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 863,268 shares | ||||
12. |
CHECK IF THE AGGREGATE AMOUNT IN | ||||
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 6.6% | ||||
14. |
TYPE OF REPORTING PERSON PN |
CUSIP No. 5010140 10 47 | Page 2 of 12 | ||||
1. |
NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NUMBER: John N. McAleer | ||||
2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) /_/ | ||||
3. |
SEC USE ONLY | ||||
4. |
SOURCE OF FUNDS 00 | ||||
5. |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS | ||||
6. |
CITIZENSHIP OR PLACE OR ORGANIZATION USA | ||||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7. 8. 9. 10. |
SOLE VOTING POWER |
1,439,070 | ||
SHARED VOTING POWER |
863,268 | ||||
SOLE DISPOSITIVE POWER |
1,439,070 | ||||
SHARED DISPOSITIVE POWER |
863,268 | ||||
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,302,338 shares | ||||
12. |
CHECK IF THE AGGREGATE AMOUNT IN | ||||
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 17.5% | ||||
14. |
TYPE OF REPORTING PERSON IN |
CUSIP No. 5010140 10 47 | Page 3 of 12 | ||||
1. |
NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NUMBER: Jeanne McAleer Sanderford | ||||
2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) /_/ | ||||
3. |
SEC USE ONLY | ||||
4. |
SOURCE OF FUNDS 00 | ||||
5. |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS | ||||
6. |
CITIZENSHIP OR PLACE OR ORGANIZATION USA | ||||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7. 8. 9. 10. |
SOLE VOTING POWER |
4,000 | ||
SHARED VOTING POWER |
863,268 | ||||
SOLE DISPOSITIVE POWER |
4,000 | ||||
SHARED DISPOSITIVE POWER |
863,268 | ||||
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 867,268 shares | ||||
12. |
CHECK IF THE AGGREGATE AMOUNT IN | ||||
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 6.6% | ||||
14. |
TYPE OF REPORTING PERSON IN |
CUSIP No. 5010140 10 47 | Page 4 of 12 | ||||
1. |
NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NUMBER: Shannon McAleer Silvernail | ||||
2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) /_/ | ||||
3. |
SEC USE ONLY | ||||
4. |
SOURCE OF FUNDS 00 | ||||
5. |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS | ||||
6. |
CITIZENSHIP OR PLACE OR ORGANIZATION USA | ||||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7. 8. 9. 10. |
SOLE VOTING POWER |
56,300 | ||
SHARED VOTING POWER |
863,268 | ||||
SOLE DISPOSITIVE POWER |
56,300 | ||||
SHARED DISPOSITIVE POWER |
863,268 | ||||
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 919,568 shares | ||||
12. |
CHECK IF THE AGGREGATE AMOUNT IN | ||||
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 7.0% | ||||
14. |
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN |
CUSIP No. 5010140 10 47 | Page 5 of 12 | ||||
1. |
NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NUMBER: Patricia McAleer Dorgan | ||||
2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) /_/ | ||||
3. |
SEC USE ONLY | ||||
4. |
SOURCE OF FUNDS 00 | ||||
5. |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS | ||||
6. |
CITIZENSHIP OR PLACE OR ORGANIZATION USA | ||||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7. 8. 9. 10. |
SOLE VOTING POWER |
17,620 | ||
SHARED VOTING POWER |
863,268 | ||||
SOLE DISPOSITIVE POWER |
17,620 | ||||
SHARED DISPOSITIVE POWER |
863,268 | ||||
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 880,888 shares | ||||
12. |
CHECK IF THE AGGREGATE AMOUNT IN | ||||
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 6.7% | ||||
14. |
TYPE OF REPORTING PERSON IN |
CUSIP No. 5010140 10 47 | Page 6 of 12 | ||||
1. |
NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NUMBER: Sandra McAleer Middlebrooks | ||||
2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) /_/ | ||||
3. |
SEC USE ONLY | ||||
4. |
SOURCE OF FUNDS 00 | ||||
5. |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS | ||||
6. |
CITIZENSHIP OR PLACE OR ORGANIZATION USA | ||||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7. 8. 9. 10. |
SOLE VOTING POWER |
10,380 | ||
SHARED VOTING POWER |
863,268 | ||||
SOLE DISPOSITIVE POWER |
10,380 | ||||
SHARED DISPOSITIVE POWER |
863,268 | ||||
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 873,648 shares | ||||
12. |
CHECK IF THE AGGREGATE AMOUNT IN | ||||
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 6.6% | ||||
14. |
TYPE OF REPORTING PERSON IN |
CUSIP No. 5010140 10 47 | Page 7 of 12 | ||||
1. |
NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NUMBER: Elizabeth McAleer Tillman | ||||
2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/ (b) /_/ | ||||
3. |
SEC USE ONLY | ||||
4. |
SOURCE OF FUNDS 00 | ||||
5. |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS | ||||
6. |
CITIZENSHIP OR PLACE OR ORGANIZATION USA | ||||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7. 8. 9. 10. |
SOLE VOTING POWER |
30,000 | ||
SHARED VOTING POWER |
863,268 | ||||
SOLE DISPOSITIVE POWER |
30,000 | ||||
SHARED DISPOSITIVE POWER |
863,268 | ||||
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 893,268 shares | ||||
12. |
CHECK IF THE AGGREGATE AMOUNT IN | ||||
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 6.8% | ||||
14. |
TYPE OF REPORTING PERSON IN |
This statement relates to the Common Stock, no par value (Common Stock), of Krispy Kreme Doughnuts, Inc., a North Carolina corporation (the Company). The principal executive offices of the Company are located at 370 Knollwood Street, Suite 500, Winston-Salem, NC 27103.
(a), (b) and (c) This statement is filed by (i) McAleer Investments Limited Partnership ("McAleer Investments"), (ii) John N. McAleer, (iii) Jeanne McAleer Sanderford, (iv) Shannon McAleer Silvernail, (v) Patricia McAleer Dorgan, (vi) Sandra McAleer Middlebrooks, and (vii) Elizabeth McAleer Tillman (collectively, the "Reporting Persons"), as members of a group. Mr. McAleer, Ms. Sanderford, Ms. Silvernail, Ms. Dorgan, Ms. Middlebrooks, and Ms. Tillman are the general partners of McAleer Investments.
McAleer Investments, a limited partnership organized to hold the securities of the Company, was formed under the laws of the State of North Carolina and has its principal business and principal office at 1001 West Fourth Street, Winston-Salem, NC 27101.
John N. McAleer is an individual whose business address is 370 Knollwood Street, Suite 500, Winston-Salem, NC 27103. Mr. McAleers principal occupation is Vice Chairman of the Board and Executive Vice President, Concept Development of the Company, whose principal business is operating and franchising specialty stores that sell doughnuts. The address of the Company is set forth in Item 1 above.
Jeanne McAleer Sanderford is an individual whose residence address is 6148 Lennox Place, Mobile, AL 36693. Ms. Sanderford is a school teacher.
Shannon McAleer Silvernail is an individual whose residence address is 195 Barrington Hall Drive, Macon, GA 31220. Ms. Silvernail is a homemaker.
Patricia McAleer Dorgan is an individual whose residence address is 2024 Tuileries Cove, Biloxi, MS 39531. Ms. Dorgan is a homemaker.
Sandra McAleer Middlebrooks is an individual whose residence address is 265 River Route, Magnolia Springs, AL 36555. Ms. Middlebrooks is a homemaker.
Elizabeth McAleer Tillman is an individual whose residence address is 808 Van Avenue, Daphne, AL 36526. Ms. Tillman is a homemaker.
(d) None of the Reporting Persons has been convicted in a criminal proceeding in the past five years (excluding traffic violations and similar misdemeanors).
(e) None of the Reporting Persons was, during the last five years, a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Page 8 of 12
(f) McAleer Investments is a North Carolina limited partnership. Mr. McAleer, Ms. Sanderford, Ms. Silvernail, Ms. Dorgan, Ms. Middlebrooks, and Ms. Tillman are United States citizens.
On December 29, 2000, McAleer Investments obtained 984,943 shares of Common Stock of the Company when its partners made capital contributions of certain of their shares of Common Stock in exchange for interests in the partnership. The names of the general partners and limited partners of McAleer Investments, the number of shares of Common Stock of the Company contributed by each to McAleer Investments, and the partnership interest of each of the general and limited partners of McAleer Investments is described in Exhibits A and B to the Limited Partnership Agreement of McAleer Investments, which is attached to this Schedule 13D as Exhibit 99 and incorporated herein by reference.
The individual Reporting Persons were shareholders of Krispy Kreme Doughnut Corporation, the predecessor to Krispy Kreme Doughnuts, Inc. They received shares of the Company pursuant to a corporate reorganization in the form of a merger on April 5, 2000 in which each outstanding share of Krispy Kreme Doughnut Corporation was converted into the right to receive 20 shares of Common Stock of the Company and $15.00 in cash.
In addition, the individual Reporting Persons purchased shares of the Common Stock of the Company on April 5, 2000 for $21.00 per share in the Company's initial public offering as follows: Mr. McAleer and his wife purchased 100 shares and 600 shares, respectively; Ms. Sanderford purchased 600 shares (including 400 shares purchased by the Jeanne McAleer Sanderford Irrevocable Trust dated 12/20/91, a trust of which Ms. Sanderford is the sole trustee); Ms. Silvernail purchased 600 shares (including 400 shares purchased by the Shannon M. Silvernail Irrevocable Trust dated 10/20/91, a trust of which Ms. Silvernail is the sole trustee); Ms. Dorgan purchased 200 shares; Ms. Middlebrooks and her husband each purchased 200 shares; and Ms. Tillman purchased 200 shares.
McAleer Investments was formed by the individual Reporting Persons and its limited partners, all of whom are members of the McAleer family, to provide a means for such members of the McAleer family to manage shares of Common Stock of the Company, to preserve family assets, and for estate planning purposes. The individual Reporting Persons and the limited partners also desire to facilitate gifts of partnership interests among family members, to avoid transfers of partnership interests to non-family members, and to minimize the rights of future creditors of the family members with respect to the partnerships assets.
The individual Reporting Persons acquired shares of the Company for investment purposes.
McAleer Investments plans to sell up to 121,675 shares of Common Stock pursuant to the public offering described in Item 5(c) if the underwriters' over allotment option is exercised.
Other than as described in this Item 4, none of the Reporting Persons has any plan or proposal which relates to or would result in:
(i) the acquisition by any person of additional securities of the issuer, or the disposition of securities of the issuer;
(ii) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any
of its subsidiaries;
(iii) a sale or transfer of a material amount of assets of the Company
or of any of its subsidiaries;
(iv)
any change in the present board of directors or management of the Company,
including any plans or proposals to change the number or term of directors or to
fill any existing vacancies on the board;
(v)
any material change in the present capitalization or dividend policy of the Company;
Page 9 of 12
(vi) any other material change in the Company's business or corporate structure;
(vii) changes in the Company's charter or bylaws or other action which may impede the acquisition of control of the
Company by any person;
(viii) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;
(ix) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, or
(x) any action similar to any of those enumerated above.
(a) and (b) McAleer Investments beneficially owns 863,268 shares of Common Stock of the Company, or 6.6% of the issued and outstanding shares of Common Stock of the Company. McAleer Investments possesses the sole power to vote and dispose of such shares.
John N. McAleer beneficially owns 2,302,338 shares of Common Stock of the Company, or 17.5% of the issued and outstanding shares of Common Stock of the Company. Mr. McAleer has sole power to vote and dispose of 1,439,070 shares of Common Stock, 43,080 of which are held by Mr. McAleer directly, 1,394,857 of which are held by the estate of Joseph A. McAleer, Sr., of which Mr. McAleer is the executor, 600 of which are held by Jamie Dickinson McAleer, Mr. McAleers spouse, and 533 of which are held by a tax-qualified trust pursuant to the Krispy Kreme Profit-Sharing Stock Ownership Plan. Mr. McAleer shares power to vote and dispose of 863,268 shares of Common Stock, which are held by McAleer Investments.
Jeanne McAleer Sanderford beneficially owns 867,268 shares of Common Stock of the Company, or 6.6% of the issued and outstanding shares of Common Stock of the Company. Ms. Sanderford has sole power to vote and dispose of 4,000 shares held by the Jeanne M. Sanderford Irrevocable Trust dated 12/21/91, a trust of which Jeanne McAleer Sanderford is the sole trustee, in which 2,000 shares are held for the benefit of Carter Reid Sanderford and 2,000 shares are held for the benefit of Ryan Nicholas Sanderford. Ms. Sanderford shares power to vote and dispose of 863,268 shares of Common Stock, which are held by McAleer Investments.
Shannon McAleer Silvernail beneficially owns 919,568 shares of Common Stock of the Company, or 7.0% of the issued and outstanding shares of Common Stock of the Company. Ms. Silvernail has sole power to vote and dispose of 56,300 shares of Common Stock, which include 30,120 shares held by the Shannon M. Silvernail Irrevocable Trust dated 10/20/91, a trust of which Shannon McAleer Silvernail is the sole trustee, in which 15,060 shares are held for the benefit of Emily Anne Silvernail and 15,060 shares are held for the benefit of Patrick Vaughan Silvernail. Ms. Silvernail shares power to vote and dispose of 863,268 shares of Common Stock, which are held by McAleer Investments.
Patricia McAleer Dorgan beneficially owns 880,888 shares of Common Stock of the Company, or 6.7% of the issued and outstanding shares of Common Stock of the Company. Ms. Dorgan has sole power to vote and dispose of 17,620 shares of Common Stock. Ms. Dorgan shares power to vote and dispose of 863,268 shares of Common Stock, which are held by McAleer Investments.
Sandra McAleer Middlebrooks beneficially owns 873,648 shares of Common Stock of the Company, or 6.6% of the issued and outstanding shares of Common Stock of the Company. Ms. Middlebrooks, together with her husband, S.C. Middlebrooks, have sole power to vote and dispose of 10,380 shares of Common Stock, which include 3,460 shares held by the John N. McAleer 1999 Trust for the benefit of Jennifer A. McAleer, Mr. McAleers daughter, a trust of which Ms. Middlebrooks is the sole trustee, 3,460 shares held by the John N. McAleer 1999 Trust for the benefit of Lauren E. McAleer, Mr. McAleers daughter, a trust of which Ms. Middlebrooks is the sole trustee, and 3,460 shares held by the John N. McAleer 1999 Trust for the benefit of Alexander B. McAleer, Mr. McAleers son, a trust of which Ms. Middlebrooks is the sole trustee. Ms. Middlebrooks shares power to vote and dispose of 863,268 shares of Common Stock, which are held by McAleer Investments.
Elizabeth McAleer Tillman beneficially owns 893,268 shares of Common Stock of the Company, or 6.8% of the issued and outstanding shares of Common Stock of the Company. Ms. Tillman has sole power to vote and dispose of 30,000 shares of Common Stock. Ms. Tillman shares power to vote and dispose of 863,268 shares of Common Stock, which are held by McAleer Investments.
(c) During the past 60 days, the individual Reporting Persons contributed Common Stock to McAleer Investments as described in Item 3. In addition pursuant to a public offering of Common Stock of the Company on January 30, 2001, McAleer Investments, Mr. McAleer, Ms. Sanderford, Ms. Silvernail, Ms. Dorgan, Ms. Middlebrooks, and Ms. Tillman sold 121,675; 264,000 (including 134,000 shares held by the estate of Joseph A. McAleer, Sr., as described in Item 5); 100,000; 110,000; 130,000; 200,000; and 105,000 shares of Common Stock of the Company, respectively, for $67.00 per share. The Registration Statement relating to such public offering on Form S-1, File No. 333-53284, as amended, and the section of such Registration Statement entitled "Principal and Selling Shareholders" is incorporated herein by reference.
Page 10 of 12
(d)
Other than as described under Item 5 (a and b) above,
no person other than the Reporting Persons has the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of, the
Common Stock beneficially owned by the Reporting Persons.
(e) Not applicable. Item 6 CONTRACT, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
The
individual Reporting Persons are siblings. Pursuant to the Limited Partnership
Agreement of McAleer Investments attached hereto as Exhibit 99 and incorporated
herein by reference, the individual Reporting Persons and limited partners of
McAleer Investments contributed shares of Common Stock of the Company to the
partnership in exchange for partnership interests in McAleer Investments.
Pursuant to the Limited Partnership Agreement, McAleer Investments possesses
sole voting and dispositive power with respect to all such shares
Mr. McAleer is Vice Chairman of the Board and Executive Vice President, Concept Development, of the Company.
Exhibit 99
Limited Partnership Agreement of McAleer Investments Limited
Partnership Page 11 of 12 After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct as of
this 31st day of January 2001. Page 12 of 12 THIS
LIMITED PARTNERSHIP AGREEMENT is made and entered into as of the 15th day of
September, 2000 (the Effective Date), in Forsyth County, North
Carolina, by and among those persons listed as the General Partners and the
Limited Partner on Exhibit A attached hereto. The
General Partners and the Limited Partners are hereinafter sometimes individually
referred to as Partner and collectively referred to as
Partners. The names and addresses of the Partners are listed on
Exhibit A attached hereto. ARTICLE I SECTION
1.1. Act shall mean the Revised Uniform Limited Partnership
Act, as in effect in North Carolina and set forth in Chapter 59, Article 5 of
the General Statutes of North Carolina (the General Statutes), as
such Act may be amended from time to time. SECTION
1.2. Agreement shall mean this Limited Partnership Agreement,
as such Agreement may be amended from time to time. SECTION
1.3. Appraisal shall mean, unless the context indicates
otherwise, a written valuation report by an appraiser that describes and values
the fair market value of an ownership interest in the Partnership. SECTION
1.4. Appraiser shall mean a person or firm qualified to
perform business appraisals of partnerships and ownership interests in the
partnerships. SECTION
1.5. Capital Account shall mean, with respect to each Partner
or a transferee of a Partner, an account maintained and adjusted in accordance
with Treasury Regulations Section 1.704- 1(b)(2)(iv) and in accordance with the
provisions of Section C.2 set forth in Exhibit C attached hereto. SECTION
1.6. Capital Contribution shall mean the amount of money and
the initial Gross Asset Value of any property (other than money) contributed to
the Partnership with respect to the Interest of such Partner. SECTION
1.7. Cash Flow shall mean cash available to the Partnership
as a result of the operations, investments, financings or refinancings of the
Partnership, including without limitation net proceeds from all sales and other
disposition of Partnership Property, after (i) payment of all expenses, costs,
and indebtedness of the Partnership, (ii) acquisition of investments or other
capital assets, and (iii) the establishment of reasonable reserves for working
capital, debt service, contingencies, investments, and replacements. Cash
Flow shall not be reduced by depreciation, amortization, cost recovery
deductions, or similar allowances. SECTION
1.8. Certificate shall mean the certificate of limited
partnership, together with any amendments thereto, required to be filed by the
Partnership pursuant to the Act. SECTION
1.9. Code shall mean the Internal Revenue Code of 1986, as
amended from time to time, or any successor federal revenue law and, as the
context requires, shall include any final Treasury Regulations, revenue rulings,
and revenue procedures thereunder or under any predecessor federal revenue law.
Any reference herein to a section of the Code or Treasury Regulations shall be
deemed to refer to any successor section thereof. SECTION
1.10. Default Interest Rate shall mean the rate per annum
equal to the lesser of: SECTION
1.11. Depreciation shall mean, for each fiscal year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that, if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes, Depreciation shall be an amount
which bears the same ratio to such Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery reduction for such year or
other period bears to such adjuster tax basis. SECTION
1.12. Distributions shall mean distributions of cash or other
property made by the Partnership to the Partners from any source. SECTION
1.13. Family shall mean the Partners spouse,
descendants, ancestors, spouses of descendants, spouses of ancestors, entities
the members of which are exclusively members of the preceding groups, and trusts
exclusively for the benefit of persons who are members of the preceding groups. 2 SECTION
1.14. General Partner shall refer collectively to the person
or persons listed as General Partners on Exhibit A attached hereto, and
any person who is subsequently admitted as a General Partner in the Partnership
in accordance with the terms and conditions of this Agreement. SECTION
1.15. Gross Asset Value shall mean, with respect to any
asset, the assets adjusted basis for accounting purposes except as
follows: SECTION
1.16. Income and Losses shall mean, for
each fiscal year or other period, an amount equal to the Partnerships
taxable income or loss for such year or period, determined in accordance with
Code Section 703(a) (for this purpose, all items of income, gain, loss, or
deduction required to be separately stated pursuant to Code Section 703(a)(1)
shall be included in taxable income or loss), with the following adjustments: 3 SECTION
1.17. Interest shall mean all of the rights of each Partner
with respect to the Partnership and the Partnership Property created under this
Agreement or under the Act. The Interests of the Partners shall be listed on
Exhibit B attached hereto, as such exhibit is amended from time to time
in accordance with the terms hereof. SECTION
1.18. Limited Partners shall refer collectively to those
persons listed as Limited Partners on Exhibit A attached hereto, and to
any persons who are subsequently admitted as Limited Partners in the Partnership
in accordance with the terms and conditions of this Agreement. SECTION
1.19. Majority in Interests of the Partners shall mean the
Partners holding at least fifty-one percent (51%) of the Interests in the
Partnership. SECTION
1.20. Majority of the Management Committee shall mean the
Members of the Management Committee who control more than fifty percent (50%) of
the Interests of the Partnership. Each General Partner shall for purposes of
this Agreement be deemed to control their own Interest in the Partnership and
the Partnership Interests of the members of their Family as defined in
Section 1.13. SECTION
1.21. Management Committee shall be comprised of the General
Partners of the Partnership. SECTION
1.22. Partners shall refer collectively to the General
Partners and the Limited Partners listed on Exhibit A attached hereto and
to any persons who are subsequently admitted as Partners in the Partnership in
accordance with the terms and conditions of this Agreement. The names and
addresses of the Partners shall be listed on Exhibit A attached hereto,
as such exhibit may be amended from time to time. Partner shall mean
any one of the Partners. 4 SECTION
1.23. Partnership shall mean the limited partnership formed
pursuant to this Agreement and the Certificate. SECTION
1.24. Partnership Property shall mean all real and personal
property acquired by the Partnership and all improvements thereon and
investments and reinvestments thereof, and shall include both tangible and
intangible property. SECTION
1.25 Regulatory Allocations shall mean certain allocations of
income, loss, gain or other tax attributes in accordance with the Regulations
promulgated by the Internal Revenue Service under Subchapter K of the Internal
Revenue Code of 1986 (as such regulations and Code may be amended from time to
time) as defined in Section C.4 of Exhibit C attached hereto. SECTION
1.26. Treasury Regulations and Regulations
shall mean the Income Tax Regulations promulgated under the Code, as such
Regulations may be amended from time to time (including corresponding provisions
of succeeding Regulations). Certain
other capitalized terms not defined above shall have the meanings given such
terms in this Agreement or in Exhibit C attached hereto. ARTICLE II SECTION
2.1. Partnership Formation. The parties to this Agreement hereby form a
partnership under and pursuant to the Act and upon the terms and conditions set
forth in this Agreement. Promptly upon the execution hereof, the General Partner
shall execute and file the Certificate and all other such instruments or
documents and shall do or cause to be done all such filing, recording, or other
acts as may be necessary or appropriate from time to time to comply with the
requirements of law for the formation and/or operation of a limited partnership
in the State of North Carolina, and to assure that each Limited Partner obtains
and maintains the status of a limited partner under the laws of the State of
North Carolina and any other applicable jurisdiction. SECTION
2.2.Name of Partnership. The name of the Partnership shall be McAleer Investments Limited
Partnership. SECTION
2.3. Purposes. The Partnership's purpose is to make a profit, increase wealth, and provide a
means for the family to become knowledgeable of, manage, and preserve family assets. The Partnership will
accomplish the following: 5
The
Partnership may execute and deliver all instruments and documents and perform
all acts and undertakings and engage in all activities and transactions as may,
in the General Partners determination, be necessary or advisable to carry
out the foregoing objects and purposes. SECTION
2.4. Office and Principal Place of Business; Registered Agent. The office
and principal place of business of the Partnership shall be maintained at 1001
West Fourth Street, Winston-Salem, North Carolina 27101 at such other place as
the Management Committee shall designate in the latest filed Certificate or
amendment thereto. The registered agent shall be Timothy J. Ehlinger, or
such other person who shall be set forth in the latest filed Certificate or
amendment thereto. SECTION
2.5. Commencement and Term. The Partnership shall commence as of the
Effective Date and shall continue until December 31, 2080, unless sooner
terminated. The 6 Partnership may be continued beyond its scheduled termination
date by the written agreement of all of the Partners. ARTICLE III SECTION
3.1. Initial Capital Contributions. The Partners, upon the execution of
this Agreement, shall contribute, in cash or in kind, capital to the Partnership
in the amounts set forth in Exhibit B attached hereto. Capital
Contributions in kind shall be made as agreed upon by the Partners, and for
purposes of determining Capital Accounts and Interests of the Partners, Capital
Contributions in kind shall be valued at fair market value as established by
agreement of the contributing Partner and the Partnership, which agreement is
set forth on Exhibit B attached hereto. SECTION
3.2. Additional Capital Contributions. If, in the General Partners
determination, additional capital is needed for Partnership purposes, then the
existing Partners shall have the right to make additional contributions to the
Partnership pro rata based on their respective Interests in an aggregate amount
equal to the additional capital required. If all Partners do not desire to make
additional contributions, then Partners shall have the right to make additional
contributions to the Partnership non-pro rata. If
the Partnership obtains additional capital, then Interests of the Partners and
allocations and Distributions to the Partners shall be adjusted in order to
fairly reflect a contributing Partners additional Capital Contribution
based on the ratio of the fair market value of such Partners additional
Capital Contribution to the fair market value of the Partnership assets (net of
Partnership liabilities) as of the date of such additional Capital Contribution.
In such case, an amended Exhibit B shall be attached to this Agreement to
reflect the adjusted Interests of the Partners. SECTION
3.3. Maintenance of Capital Accounts; Withdrawals; Additional Contributions;
Interest. Individual Capital Accounts shall be maintained for each of the
Partners. No Partner shall be entitled to withdraw any part of his or her
Capital Account or to receive any Distribution or to make any additional
contribution except as expressly provided herein. No Partner shall be entitled
to receive any interest on his or her contributions to the capital of the
Partnership or with respect to his or her Capital Account except as expressly
provided herein. SECTION
3.4. Liability of Partners. No Limited Partner shall be liable for any
debts or losses of capital or Income of the Partnership, or be required to
contribute or lend funds to the Partnership other than his or her initial
Capital Contribution described in Section 3.3. above, and his or her additional
Capital Contributions described in Section 3.2 above, if any 7 additional Capital
Contributions are made by such Limited Partner. The General Partner shall have
unlimited liability for the repayment and discharge of all debts and obligations
of the Partnership (other than nonrecourse debts and obligations, if any),
provided that payment shall be made first from Partnership assets. SECTION
3.5. Percentage Interests. Whenever it shall be necessary for voting or
other purposes specified herein to determine the percentage Interest of one or
more Partners in the Partnership relative to a group of Partners or to all
Partners, that percentage Interest shall be initially determined by the
provisions of Exhibit B. Upon subsequent Capital Contributions by one or
more Partners or in the event that the Interests of the Partners are otherwise
adjusted, such percentage Interests shall be determined as set forth herein or
as agreed upon by all Partners. In the event a Partner transfers any part of his
or her Interest as permitted by this Agreement, the transferee shall succeed to
the pro rata portion of such Interest that is acquired by the transferee. ARTICLE IV SECTION
4.1. Execution of Partnership Contracts; General Partners as
Attorney-in-Fact. All contracts and agreements undertaken by the
Partnership, and any other documents, instruments, certificates, and filings
shall be executed by one of the General Partners or such person as may be
designated in writing by the Management Committee to execute any contract,
agreement, document, instrument, certificate, or filing; and in such contracts
and agreements, the Partnership shall be identified as a limited partnership.
The Partners shall promptly execute (with acknowledgment if required) at the
request of one of the General Partners, any and all instruments necessary or
appropriate to ratify or confirm the authority of the Management Committee
hereunder. The Limited Partners, and each of them, by execution of this
Agreement irrevocably make, constitute, and appoint the Management Committee,
with full power of substitution as the true and lawful attorney for such Limited
Partner to make, execute, sign, acknowledge, and file this Agreement, the
Certificate, and any and all other contracts, agreements, documents,
instruments, certificates, or filings necessary or appropriate in connection
with the operation of the Partnership in the ordinary course of its business in
the name, place, and stead of such Limited Partner; and to take any further
action which the Management Committee shall deem necessary or advisable in
connection with any of the foregoing. Each Limited Partner acknowledges and
agrees that only one signature, the signature of one of the General Partners or
his or her designated representative, shall be required for any and all
contracts, agreements, documents, instruments, certificates, or filings
necessary or appropriate in connection with the operation of the Partnership in
the ordinary course of its business. 8 SECTION
4.2. Exclusive Control of the Management Committee. Subject to the
express terms and conditions of this Agreement, the Management Committee shall
have complete authority over and exclusive management and control of the
business and affairs of the Partnership, and the Management Committee shall have
the power and authority to do all acts necessary or appropriate to carry out the
purposes of the Partnership. Acts of the Management Committee shall require the
affirmative vote of the Members of the Management Committee controlling more
than fifty (50%) percent of the Interests of the Partnership. Each General
Partner shall, for purposes of determining the vote of the Management Committee,
be deemed to control the Interests held by their Family. Third parties may rely
on the act or signature of one member of the Management Committee as the act or
signature of the Partnership, and it shall not be necessary to obtain the act or
signature of the other Partners. SECTION
4.3. General Powers and Authority of the Management Committee. Without in
any way limiting the exclusive control granted to the Management Committee under
Section 4.2 above, but subject to the express terms and conditions of this
Agreement, including but not limited to Sections 4.4, 4.5 and 4.6 below,
the Management Committee shall have the following specific powers and authority: 9 10 SECTION
4.4. Matters Which Require the Affirmative Vote of More Than Seventy-Five
Percent (75%) Interest of the Management Committee. Notwithstanding any
other provision of this Agreement, the following actions shall require the
affirmative vote of the Members of the Management Committee controlling more
than seventy-five (75%) percent of the Interests in the Partnership: SECTION
4.5. Matters which Require the Affirmative Vote of More Than Sixty-Six and
Two-Thirds Percent (66 2/32%) by Percentage Interest of the Management
Committee. The following actions shall require the affirmative vote of the
Members of the Management Committee controlling more than sixty-six and
two-thirds percent (66 2/3%) of the Interests of the Partnership: SECTION
4.6. Duties of the Management Committee. The Members of the Management
Committee agree that they will diligently and faithfully devote such time to the 11
business of the Partnership in the management, supervision, and administration
of the business and operations of the Partnership in accordance with the
applicable law as may be required to carry out the purposes of the Partnership. SECTION
4.7. Members of the Management Committee to Act in Best Interests of
Partnership. In carrying out their duties and exercising their powers
hereunder, the Members of the Management Committee shall exercise reasonable
skill and care and use their best judgment and shall act at all times in what
they deem to be in the best interests of the Partnership and, in the case of any
conflict between the best interests of the Members of the Management Committee
and the best interests of the Partnership, the Members of the Management
Committee shall not, any other provisions hereof to the contrary
notwithstanding, act in a manner inconsistent with the best interests of the
Partnership or inconsistent with this Agreement. Further, subject to the
foregoing sentence, the General Partners shall not be liable, responsible, or
accountable in damages or otherwise to any other Partner for any acts performed
or omitted by her in good faith and within the scope of this Agreement. More
specifically, but without limiting the generality of the foregoing sentence, the
General Partners shall not be liable for good faith mistakes of judgment or for
losses due to such mistakes or the good faith mistakes of judgment or losses due
to such mistakes of any employee, brokers or other agent of the Partnership. The
General Partners shall, however, be liable for their actions to the extent they
are attributable to willful misconduct or fraud. SECTION
4.8. Right to Rely on the Members of the Management Committee. Any person
dealing with the Partnership may rely upon a certificate signed by any of the
General Partners as to: SECTION
4.9. Limitations on Powers of the Management Committee . The General
Partners shall have no authority to: 12 SECTION
4.10. Tax Matters Partner. John N. McAleer shall act as the "Tax Matters Partner" as that term
is defined in Section 6231 of the Code. SECTION
4.11. Other Business of Partners. Any Partner may engage independently or
with others in other investment or business ventures of any kind, render advice
or services of any kind to other investors or ventures, or make or manage other
investments or ventures. Neither the Partnership nor any Partner shall have any
right by virtue of this Agreement or the partnership relationship created hereby
in or to such other ventures or activities or to the income or proceeds derived
therefrom, and the pursuit of such ventures, even if competitive with the
business of the Partnership, shall not be deemed wrongful or improper. SECTION
4.12. Limited Indemnification of Partners. The Partnership herewith
indemnifies and holds harmless the Partners from any and all loss, damage,
liability, or expense incurred by them at any time by reason of or arising out
of any act performed by them on behalf of the Partnership or in furtherance of
the business of the Partnership, including all such liabilities under federal
and state securities laws (including the Securities Act of 1933, as amended), as
permitted by law, except for liability for breach of fiduciary duty, gross
negligence, willful misconduct, or fraud; provided, that the satisfaction of any
indemnification and any holding harmless shall be from and limited to
Partnership assets and no Partner shall have any personal liability on account
hereof. This indemnification shall not extend to the income tax consequences
resulting to a Partner from his or her participation in the Partnership. SECTION
4.13. No Management by Limited Partners and Transferees. No Limited
Partner or transferee (other than a General 13 Partner or any agent or employee of
a General Partner, in his or her capacity as such, if such person shall also be
a Limited Partner) shall take part in the day-to-day management, operation or
control of the business and affairs of the Partnership. The Limited Partners and
transferees shall not have any right, power, or authority to transact any
business in the name of the Partnership or to act for or on behalf of or to bind
the Partnership. The Limited Partners and transferees shall have no rights other
than those specifically provided herein or granted by law where consistent with
a valid provision hereof. In the event any laws, rules, or regulations
applicable to the Partnership, or to the sale or issuance of any Interest in the
Partnership, require a Limited Partner, or any group or class thereof, to have
certain rights, options, privileges, or consents not granted by the terms of
this Agreement, then such Limited Partners shall have and enjoy such rights,
options, privileges, and consents so long as (but only so long as) the existence
thereof does not result in a loss of limitation on liability enjoyed by the
Limited Partners under the Act or the applicable laws of any other jurisdiction
governing the Partnership. SECTION
4.14. Cessation of a General Partners Service on the Management
Committee. In the event a General Partner dies, is removed from the
Management Committee pursuant to Section 4.4, or wishes to cease serving as a
Member of the Management Committee, their General Partnership Interest shall be
immediately converted to a Limited Partnership Interest. It is expressly agreed
that the cessation of service as a member of the Management Committee shall not
in any way create a right to the redemption or other liquidation of a
Partners Interest in the Partnership. SECTION
4.15. Admission of Replacement General Partner. In the event a General
Partner ceases to serve as a Member of the Management Committee for one of the
reasons stated in Section 4.14, the former General Partner shall nominate,
either during his lifetime or in his or her will, a person in his or her Family
to serve as a General Partner. Such replacement General Partner must comply with
the provisions of Article VIII prior to his or her admission as a General
Partner. In the event the nominated person fails to receive the required
approval of the Management Committee, the departing General Partner (or his
personal representative in the case of death or incompentency) shall nominate
another person in the departing General Partners Family to serve as the
General Partner representing their Family. ARTICLE V SECTION
5.1. Allocation of Losses. Except as otherwise provided in Exhibit
C attached hereto, Losses shall be allocated to the Partners in accordance
with their respective Interests as set forth in Exhibit B attached hereto, as
such exhibit may be amended from time to time. 14 SECTION
5.2. Allocation of Income. Except as otherwise provided in Exhibit
C attached hereto, Income shall be allocated to the Partners in accordance
with their respective Interests as set forth in Exhibit B attached
hereto, as such exhibit may be amended from time to time. SECTION 5.3. Miscellaneous.
(a) Allocations Attributable to Particular Periods. For purposes of determining Income,
Losses, or any other items allocable to any period, such items shall be determined on a daily, monthly, or other
basis, as determined by the General Partners using any permissible method under Code Section 706 and the Treasury
Regulations thereunder.
(b) Other Items. Except as otherwise provided in this Agreement, all items of Partnership
Income, gain, Loss, deduction and any other allocations not otherwise provided for, shall be allocated among the
Partners in the same proportion as they share Income or Losses, as the case may be, for the year.
(c) Tax Consequences. The Partners are aware of the income tax consequences of the
allocations made by this Article V and hereby agree to be bound by this Article V as reflected on the income tax
returns of the Partnership in reporting their shares of Partnership Income and Losses for federal income tax
purposes. ARTICLE VI SECTION
6.1. Distributions of Cash Flow. All Distributions shall be made from
time to time in such amounts and at such times as the Management Committee may
determine in their sole unreviewable discretion to be in the best interest of
the Partnership. Except as provided in Section 7.2 hereof, Distributions shall
be distributed to the Partners in proportion to their respective Interests. The
Partnership shall distribute to the Partners, on an annual basis on or before
April 15, an amount of cash approximately equal to the tax liability of the
Partners based on the Income, Losses and other items pursuant to
Section 5.3(b) of the Partnership for the preceding tax year. The
determination of the Management Committee as to the amount of the distribution
under the preceding sentence (the Tax Distribution) shall be binding
on the Partners. Distributions above the amount of the Tax Distribution shall
require the approval of the Management Committee as provided in
Section 4.5(b). SECTION
6.2. Tax Withholding. The Management Committee shall be authorized to
pay, on behalf of any Partner, any amounts to a federal, state, or local taxing
authority as may be necessary for the Partnership to comply with tax withholding
provisions of the Code, the North Carolina General Statutes, or other income tax
or revenue laws of any applicable 15 taxing authority, whether because a Partner is
considered a nonresident for North Carolina income tax purposes or for any other
reason. Any such amount paid by the Partnership shall be treated as a
Distribution by the Partnership to such Partner, and shall be offset against any
Distribution otherwise due to the Partner. In addition, if the amount of any
such tax payment exceeds the amount of unpaid Distributions otherwise owing to
such Partner with respect to the year for which such tax payment was made, the
Management Committee shall, in their discretion, either treat such excess amount
as an offset against any future Distributions to be made to such Partner, or
require the Partner on whose behalf such payments were made to reimburse the
Partnership for such excess amount. ARTICLE VII SECTION
7.1. Dissolution of the Partnership. The Partnership shall be dissolved
upon the occurrence of any of the following events, whichever shall first occur: 16 In
the event a Dissolution Event occurs, the interest of a former General Partner
shall be immediately converted to that of a transferee Limited Partner under
Article VIII. SECTION
7.2. Winding Up and Liquidation. 17 the timing requirements
of Section 7.3 below, and Treasury Regulations Section 1.704-1(b)(2)(ii)(b)), or
distribute such assets to the Partners in kind. In the event any property other
than cash is distributed, all such distributed property shall be treated as
provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(e)(1) for purposes of
determining Capital Accounts, and the deemed Income or Losses thereon shall be
allocated in accordance with the provisions of Article V hereof.
SECTION
7.3. Compliance With Timing Requirements of Regulations. In the event of
the liquidation of the Partnership within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g), then (a) distributions shall be made pursuant to
this Article VII (if such liquidation follows a dissolution of the Partnership)
or Article VI hereof (if it does not) to the Partners who have positive Capital
Accounts in compliance with Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(2); and (b) if any General Partners Capital Account
has a deficit balance (after giving effect to all contributions, distributions,
and allocations for all taxable years, including the year during which such
liquidation occurs), such General Partner shall contribute to the capital of the
Partnership the amount necessary to restore such deficit balance to zero in
compliance with Treasury regulations Section 1.704-1(b)(2)(ii)(b)(3).
Distributions pursuant to the foregoing sentence may be distributed to a trust
established for the benefit of the Partners for the purposes of liquidating
Partnership assets, collecting amounts owed to the Partnership, and paying any
contingent or unforeseen liabilities or obligations of the Partnership or of the
General Partner arising out of or in connection with the Partnership. The assets
of any such trust shall be distributed to the Partners from time to time, in the
reasonable discretion of the Management Committee, in the same proportions as
the amount distributed to such trust by the Partnership would otherwise have
been distributed to the Partners pursuant to this Agreement. ARTICLE VIII SECTION
8.1. Restriction on Withdrawal; Transfer. 18
SECTION
8.2. Effect of Withdrawal; Death of Partner. The Partnership shall not be
dissolved by the Withdrawal or death of a Partner, except in accordance with
Section 7.1 hereof. Upon
the death of a General Partner, his or her General Partnership Interest shall be
converted to that of a Limited Partner, and such Limited Partnership Interest
shall vest in his or her heirs, legatees or devisees (including any trustee) or
personal representative, which shall have the rights of a transferee of a living
Partner, subject, however, to the restrictions and conditions precedent of this
Article VIII. Upon
the death of a Limited Partner, his or her Interest in the Partnership shall
vest in his or her heirs, legatees, devisees (including any trustee) or personal
representative, who shall have the rights of a transferee of a living Partner,
subject, however, to the restrictions and conditions precedent of this Article
VIII. SECTION
8.3. Continuation of Partnership Following Withdrawal. In the event that
the Withdrawal of a Partner does not result in dissolution pursuant to Section
7.1 hereof, the remaining Partners shall have the right to continue the
Partnership business in accordance with the terms and conditions of this
Agreement. SECTION
8.4. Conditions Precedent to Transfer of Partners Interest.
Notwithstanding the required consent of the Management Committee, no transfer
may be made of all or a portion of any Partners Interest if such transfer
(i) constitutes a violation of the 19 registration provisions of the Securities Act
of 1933, as amended, or the registration provisions of any applicable state
securities provisions; or if (ii) after such transfer, the Partnership will be
classified other than as a partnership for federal income tax purposes; or if
(iii) such transfer, when taken together with other prior transfers, results in
a termination of the Partnership for federal income tax purposes.
The Management Committee may require, as a condition precedent to any transfer
of a Partnership Interest, delivery to the Partnership, at the proposed
transferors expense, an opinion of counsel satisfactory (both as to the
counsel and substance of the opinion) to the Management Committee that the
transfer will not result in the occurrence of any of the foregoing conditions
precedent. SECTION
8.5. Substitute or Additional Partners; Conditions Precedent. No
Transferee of a Partners Interest in the Partnership or additional
Partners shall have the right to become a Partner in place of his or her
transferor, or otherwise, unless all of the following conditions precedent are
satisfied: 20 Provided,
however, any or all of the preceding conditions may be waived, and such
transferee shall have the right to become a Partner in place of his or her
transferor upon the unanimous written consent of all of the Members of the
Management Committee. SECTION
8.6. Further Transfer by Transferee. A transferee of any Interest who
does not become a Partner and who desires to make a further transfer of such
Interest shall be subject to all the provisions of this Article VIII to the same
extent and in the same manner as any Partner desiring to make a transfer of his
or her Interest. SECTION
8.7. Acquisition of Interest Conveyed to Another Without Authority. 21 SECTION
8.8. Nonrecognition of an Unauthorized Transfer. The Partnership will not
be required to recognize the interest of any assignee or transferee who has
obtained a purported Partnership Interest as the result of a transfer or
assignment that is not authorized by this Agreement. If there is a doubt as to
ownership of a Partnership Interest or who is entitled to Distributions of Cash
Flow under Section 6.1 or liquidating proceeds, the Management Committee
may accumulate Distributions of Cash Flow under Section 6.1 or liquidation
proceeds until the issue is resolved to the Management Committees
satisfaction. SECTION
8.9. Determination of Distributive Share when Partners Interest
Changes. Upon the transfer of a Partners Interest or when a
Partners Interest otherwise changes, Income, Losses, and tax credits for
the Partnerships taxable year during which such change occurs shall be
determined by the use of any method prescribed by Code Section 706(d) that 22 takes
into account the varying interests of the Partners in the Partnership during the
taxable year. Selection of the specific allowable method shall be made by the
Management Committee unless a transferor Partner and transferee themselves
specify a method which method is acceptable to the Management Committee;
provided, however, if the Partnership utilizes the cash method of accounting,
then Certain allocable cash basis items as defined in Code Section
706(d)(2) shall be allocated as therein specified. SECTION
8.10. Rights and Liabilities of and Restrictions on Transferee. No person
shall be recognized as a transferee of an Interest if such Interest was
transferred in violation of this Article VIII. No transferee of an Interest in
the Partnership shall have the right to participate in the Partnership, inspect
the books of account of the Partnership, or exercise any other right of a
Partner until admitted as a Partner. Notwithstanding the failure of such
transferee to be admitted as a Partner, such transferee shall be entitled to
receive, with respect to the Partnership Interest validly transferred to him or
her, the distributions and the allocations and distributive shares of Income,
Losses, and tax credits otherwise pertaining thereto under this Agreement, and,
upon demand, may receive copies of all reports thereafter delivered pursuant to
the requirements of this Agreement; provided the Partnership shall have first
received notice of such transfer and all required consents thereto shall have
been obtained and other conditions precedent to transfer thereof, as set forth
herein or otherwise required by applicable law, shall have been satisfied. The
Partnerships tax returns shall be prepared to reflect transferees as
Partners for tax purposes. ARTICLE IX SECTION
9.1. Books of Account. At all times during the continuance of the
Partnership, the Management Committee shall maintain or cause to be maintained
true and full financial records and books of account showing all receipts and
expenditures, assets and liabilities, profits and losses, and all other records
necessary for recording the Partnerships business and affairs, including
those sufficient to record the allocations and Distributions required by this
provisions of this Agreement. SECTION
9.2. Access to Records; Audit. The books of account, tax returns,
reports, records, this Agreement, and all other documents of the Partnership
shall at all times be kept and maintained at the principal office of the
Partnership, or at such other place as the Management Committee may determine.
Each Partner or his or her designated representative shall have access to such
financial books, tax returns, reports, records, and documents during reasonable
business hours and may inspect and make copies of any of them at their expense. SECTION
9.3. Depository Accounts and Investment of Funds. The Management
Committee may open and maintain on behalf of the Partnership one or more
depository 23 accounts at such times and in such depositories as he shall
determine, in which accounts all monies received by or on behalf of the
Partnership shall be deposited. All withdrawals from such accounts shall be made
upon the signature of a General Partner or such other person or persons as the
Management Committee may from time to time designate in writing. SECTION 9.4. Reports. SECTION
9.5. Tax Accounting Methods; Periods; Elections. The Partnership shall
keep its financial accounting records utilizing the same methods used to report
its Income and Losses for income tax purposes. Unless otherwise provided in this
Agreement, the determination of whether to utilize the cash or accrual method of
accounting, whether to utilize accelerated cost recovery or another method of
depreciation, and the selection among any other allowable, alternative tax
accounting methods or principles shall be made by the Management Committee and
shall be those methods and principles which are determined by her to be in the
best interests of the Partners. The Partnerships annual financial
accounting and tax accounting period shall be the calendar year, unless another
accounting period is required by the Code. The Management Committee may cause
the Partnership to make any election allowable to the Partnership under the
Code, including elections under Code Section 754 with respect to Partnership
distributions described in Code Section 734 and with respect to transfers of
Partnership Interests described in Code Section 743. 24 ARTICLE X
SECTION 10.1. Meetings. 25 ARTICLE XI SECTION
11.1. Waiver of Provisions. The waiver of compliance at any time with
respect to any of the provisions, terms, or conditions of this Agreement shall
not be considered a waiver of such provision, term, or condition itself or of
any of the other provisions, terms, or conditions hereof or bar its enforcement
at any time thereafter. SECTION
11.2. Interpretation and Construction. This Agreement contains the entire
agreement among the Partners and any modification or amendment hereto must be in
writing signed by each of the Partners. Where the context so requires, the
masculine shall include the feminine and the neuter and the singular shall
include the plural. The headings and captions in this Agreement are inserted for
convenience and identification only and are in no way intended to define, limit,
or expand the scope or intent of this Agreement or any provision hereof. Unless
otherwise specified, the references to Section and Article in this Agreement are
to the Sections and Articles of this Agreement. SECTION
11.3. Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of North Carolina. The
parties hereto hereby submit to the jurisdiction of the courts of the State of
North Carolina for the adjudication of any matter arising with respect to this
Agreement. SECTION
11.4. Partial Invalidity. In the event that any part or provision of this
Agreement shall be determined to be invalid or unenforceable, the remaining
parts and provisions of this Agreement which can be separated from the invalid,
unenforceable provision or provisions shall continue in full force and effect to
the greatest extent possible. SECTION
11.5. Binding on Successors. The terms, conditions, and provisions of
this Agreement shall inure to the benefit of, and be binding upon the parties
hereto and their respective heirs, successors, distributees, legal
representative, and assigns. However, none of the provisions of this Agreement
shall be for the benefit of or enforceable by any creditors of the Partnership. 26
SECTION 11.6. Notices and Delivery. SECTION
11.7. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall be deemed an original, and the
several counterparts taken together shall constitute the agreement of the
Partners. SECTION 11.8. Statutory Provisions. Any statutory or regulatory reference in this Agreement shall
include a reference to any successor to such statute or regulation and/or revision thereof. 27 IN
WITNESS WHEREOF, the parties hereto have hereunto set their respective hands and
seals as of the day and year first above written. 28 29
ITEM 7.
MATERIAL TO BE FILED AS EXHIBITS
SIGNATURE
MCALEER
INVESTMENTS LIMITED PARTNERSHIP
/s/ John N. McAleer
By: John N. McAleer
Title: General Partner
/s/ John N. McAleer
John N. McAleer
/s/ Jeanne McAleer Sanderford
Jeanne McAleer Sanderford
/s/ Shannon McAleer Silvernail
Shannon McAleer Silvernail
/s/ Patricia McAleer Dorgan
Patricia McAleer Dorgan
/s/ Sandra McAleer Middlebrooks
Sandra McAleer Middlebrooks
/s/ Elizabeth McAleer Tillman
Elizabeth McAleer Tillman
LIMITED
PARTNERSHIP AGREEMENT
OF
MCALEER INVESTMENTS
LIMITED PARTNERSHIP
a North
Carolina Limited Partnership
LIMITED PARTNERSHIP
AGREEMENT
OF
MCALEER
INVESTMENTS LIMITED PARTNERSHIP
a North Carolina
Limited Partnership
DEFINITIONS AND GLOSSARY OF TERMS
(1)
The Wall Street Journal prime rate as quoted in the Wall Street
Journals money rates section, which is also the base rate on corporate
loans at large United States money center commercial banks, as its prime
commercial or similar reference interest rate, with adjustments to be made on
the same date as any change in the rate; and
(2)
The maximum rate permitted by applicable law.
(a)
The initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset, as determined by
the contributing Partner and the Partnership;
(b)
The Gross Asset Values of all Partnership assets shall be adjusted to equal
their respective gross fair market values, as determined by the General Partner,
as of the following times: (i) the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (ii) the distribution by the Partnership to a
General Partner of more than a de minimis amount of property as
consideration for an Interest in the Partnership; and (iii) as of the
termination of the Partnership for federal income tax purposes pursuant to Code
Section 708(b)(1)(B); and
(c)
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
this Section, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Income and Losses.
(a)
Any income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Income and Losses pursuant to this
Section shall be added to such taxable income or loss;
(b)
Any expenditures of the Partnership not deductible in computing its taxable
income and not properly chargeable to a Capital Account and not otherwise taken
into account in computing Income and Losses pursuant to this Section shall be
subtracted from such taxable income or loss;
(c)
Gain or loss resulting from any disposition of Partnership Property with respect
to which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;
(d)
In lieu of the depreciation, amortization, and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation as defined in Section 1.8 hereof; and
(e)
Notwithstanding any other provision of this Section, any items that are
specially allocated pursuant to Sections C.3 or C.4 of Exhibit C attached
hereto shall not be taken into account in computing Income or Losses.
FORMATION; NAME; PURPOSES; OFFICE; AND TERM
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS;
LIABILITY OF PARTNERS; AND PERCENTAGE INTERESTS
MANAGEMENT OF THE PARTNERSHIP
(a)
To do such acts and incur such expenses on behalf of the Partnership and to
expend such of the Partnerships funds as may be necessary or advisable in
connection with the conduct of the Partnerships business and purposes;
(b)
To engage and compensate such agents, attorneys, accountants, custodians, and
other advisers and consultants as may be necessary or advisable in connection
with the conduct of the Partnerships business and purposes,
(c)
To receive, buy, sell, exchange, trade, encumber, pledge, hypothecate, and otherwise
deal in and with securities and other Partnership Property;
(d)
To open, maintain, and close investment accounts with brokers, and to open,
maintain, and close managing agency accounts with banks and other financial
institutions on behalf of the Partnership, and to pay the customary fees and
charges applicable to transactions in all such accounts;
(e)
To open, maintain, and close bank accounts and custodial accounts on behalf of
the Partnership, and to draw checks and other orders for the payment of money
thereon;
(f) To file on behalf of the Partnership all required federal, state, and local tax
returns and other documents relating to the Partnership;
(g)
To make any and all elections for federal, state, and local tax purposes,
including without limitation, any election, if permitted by applicable law, to
adjust the basis of Partnership Property pursuant to Code Sections 754, 734(b),
and 743(b), or comparable provisions of state or local law, in connection with
transfers of Interests and Partnership Distributions;
(h)
To exercise all of the Partnerships rights, powers, and privileges of
ownership with respect to the Partnership Property and any other rights held by
the Partnership, including the transfer of title to all or any portion of the
Partnership Property;
(i)
To execute in furtherance of any or all of the purposes of the Partnership, any
deed, lease, deed of trust, mortgage, promissory note, bill of sale, assignment,
contract, or other instrument purporting to convey or encumber Partnership
Property or to create indebtedness of the Partnership;
(j)
To commence, defend, compromise, settle, or refer to arbitration any claim,
proceeding, or litigation that pertains to the Partnership or any Partnership
Property, provided that the Partnership shall not bear the expenses of any
litigation which arises as a result of the gross negligence, willful misconduct,
or fraud of any Partner indemnified under this Agreement;
(k)
To prepare and file on behalf of the Partnership any statement, report, return,
or document required by the Securities and Exchange Commission or any other
state or federal securities agency or other governmental agency;
(l)
Subject to the other provisions of this Agreement, to enter into, make, and
perform such contracts, agreements, and other undertakings, and to do such other
acts as he may deem necessary or advisable for, or as may be incidental to, the
conduct of the business or the Partnership contemplated by Section 2.3 hereof,
including, without in any manner limiting the generality of the foregoing,
contracts, agreements, undertakings, and transactions with any Partner or with
any other person, firm, or corporation having any business, financial, or other
relationship with any Partner or Partners; provided, however, such transactions
with such persons and entities shall be on terms no less favorable to the
Partnership than are generally afforded to unrelated third parties in comparable
transactions;
(m)
To sign or endorse in his own capacity on behalf of the Partnership any
contracts, deeds, mortgages, deeds of trust, notes, stock or other security
certificates, or other documents or instruments;
(n)
To respond or cause a response to be made as soon as practicable to all
inquiries received from Limited Partners concerning the operations and affairs
of the Partnership, and to supervise and coordinate all communications between
the Partnership and the Limited Partners;
(o)
To reimburse any Partner, affiliate, or related person for any reasonable cost or
expense incurred on behalf of the Partnership in a manner authorized by this Agreement;
(p)
To borrow from any Partner, bank, or other lending institution in such amounts
and upon such terms and conditions as the General Partner shall determine to be
in the best interests of the Partnership; to provide as security for the
repayment of such borrowing, all or any portion of the Partnership Property; and
to execute such security instruments and deeds of trusts as the General Partner
shall determine to be in the best interests of the Partnership; and
(q)
Generally, to possess and exercise any and all of the rights, powers, and
privileges of a general partner under the Act and the laws of the State of North
Carolina.
(a)
Amendment of the Partnership Agreement;
(b)
Removal of a General Partner from the Management Committee;
(c)
Consent to the voluntary withdrawal, resignation or retirement of a
Partner from the Partnership; and
(d)
Complete or partial liquidation of a Partner's Interest in the
Partnership.
(a)
Distributions to the Partners above the amount of the Tax Distribution;
and
(b)
Approval of a Substitute General Partner under Section 4.15.
(a) The identity of any of the General Partners or any Limited Partner;
(b)
The existence or nonexistence of any fact or facts which constitute a condition
precedent to acts by the General Partner or which are in any other manner
pertinent to the affairs of the Partnership;
(c)
The persons who are authorized to execute and deliver any instrument or document of
the Partnership; or
(d)
Any act or failure to act by the Partnership or any other matter whatsoever involving
the Partnership or any Partner.
(a) Do any act in contravention of the Certificate, this Agreement, or the Act;
(b) Do any act which would make it impossible to carry on the ordinary business of the
Partnership;
(c)
Possess any Partnership Property, or assign, transfer, or pledge the rights of
the Partnership in specific Partnership Property for other than a Partnership
purpose or the benefit of the Partnership, or commingle the funds of the
Partnership with the funds of any other person;
(d) Admit a person as a General Partner or a Limited Partner of the Partnership
except as provided in this Agreement;
(e) Permit the Partnership to redeem or repurchase Partnership Interests
except as
provided in this Agreement; or
(f)
Take any action which would cause the Partnership to be treated as other than a
limited partnership for federal income tax purposes or under the laws of any
applicable jurisdiction.
ALLOCATIONS
DISTRIBUTIONS
DISSOLUTION OF THE PARTNERSHIP; WINDING UP
(a)
Upon the written agreement of all of the Partners;
(b) The expiration of the term of the Partnership as provided in Section 2.5 hereof;
(c)
The occurrence, with respect to a General Partner, of his or her:
(i) withdrawal (as defined in Section 8.1) from the Partnership; (ii)
dissolution; (iii) incapacity; (iv) death; (v) filing of a petition in
voluntary bankruptcy; or (vi) having commenced against him or her an involuntary
bankruptcy case which has not been vacated, discharged, or bonded within sixty
(60) days (items (i) through (vii) above hereinafter referred to as
Dissolution Events) unless there remains at least one General
Partner, in which case the Partnership shall be reconstituted and its business
continued.
(1)
Upon the occurrence of a Dissolution Event with respect to the last remaining
General Partner, the Limited Partners may, by unanimous consent, elect to
continue the Partnership without dissolution by designating a new General
Partner who shall accept and agree in writing to be bound as a General Partner
under this Agreement. The election of the Limited Partners to continue the
Partnership and the election of the new General Partner, shall be made within
ninety (90) days after notice of such event of dissolution, and shall be
effective as of the date of such event. The failure of the Limited Partners to
continue the Partnership and to elect a new General Partner, within such ninety
(90) day period shall result in the dissolution of the Partnership.
(a)
Upon the dissolution of the Partnership, its assets shall be sold and
liquidated, and its business and affairs shall be wound up as soon as
practicable thereafter by the Partners. In winding up the Partnership and
liquidating its assets, the Management Committee or other person designated by
the Management Committee for such purpose may arrange for the collection and
disbursement to the Partners of any future receipts from the Partnership
Property or other sums to which the Partnership may be entitled, or may sell the
Partnerships interest in the Partnership Property to any person, including
persons related to any of the Partners, on such terms and for such consideration
as shall be consistent with obtaining the fair market value thereof.
(b)
Upon the dissolution of the Partnership, the assets, if any, of the Partnership
available for Distribution from the liquidation of any such assets, shall be
applied and distributed in the following manner and order, to the extent
available:
(i) To the payment of or provision for all debts, liabilities, and obligations
of the Partnership to any person (other than Partners) and the expenses of liquidation; then
(ii) To the payment of all debts and liabilities (including accrued interest) to
the Partners (except those on account of their Capital Accounts); then
(iii) To the Partners in accordance with the credit (i.e., positive) balances in
their Capital Accounts; then
(iv) The balance, if any, to the Partners in accordance with their respective
Partnership Interest.
(c)
If the Management Committee determines that the immediate sale of part or all of
the assets of the Partnership would result in an unnecessary loss to the
Partnership or is otherwise impossible or impracticable (whether as a result of
federal securities law restrictions or limitations, or otherwise), then the
Partners may, to the extent not then prohibited by the Act, either defer
liquidation of such assets for a reasonable time (except those assets necessary
to satisfy the debts, liabilities, and obligations of the Partnership as
provided in this Section 7.2; and subject, however, to
(d)
Upon dissolution, a reasonable time shall be allowed for the orderly liquidation
of the assets of the Partnership and the discharge of liabilities to creditors
so as to minimize the losses normally attendant to a liquidation.
WITHDRAWAL OF PARTNERS; TRANSFER
OF PARTNERS' INTERESTS; AND ADMISSION OF NEW PARTNERS
(a)
Except as otherwise provided herein, without the consent and prior written
agreement of Management Committee in accordance with Section 4.4, no
Partner shall, at any time prior to the Partnerships dissolution and
liquidation in accordance with this Agreement:
(i)
Voluntarily withdraw, resign, or retire from the Partnership (such event may be
referred to herein as an event of Withdrawal), except as provided in
Sections 4.14 and 4.15 with respect to cessation of service on the
Management Committee; or
(b)
Except as otherwise provided herein, without the consent and prior written
agreement of all Members of the Management Committee, no Partner shall at any
time prior to the Partnerships dissolution and liquidation in accordance
with the Agreement:
(1)
Sell, transfer, gift, encumber, or assign their Partnership Interest.
Notwithstanding the preceding sentence, a Partner may gift some or all of their
Limited Partnership Interest, either inter vivos or by testamentary disposition,
to a person who is: (i) a Member of his Family as defined in Section 1.13;
or (ii) then a Partner in the Partnership without the consent of the other
Partners.
The
transferee of a Partnership Interest shall not become a substituted or
additional Partner without first complying with Section 8.5.
(a)
In the event of an assignment, a duly executed and acknowledged written
instrument of assignment has been filed with the Partnership and sets forth that
the assignee becomes a substitute Partner in place of the assignor.
(b)
The transferor and transferee or additional Partners execute and acknowledge
such other instruments as the Management Committee may deem necessary or
desirably to effect such transfer or admission, including, but not limited to,
the written acceptance and adoption by the transferee or additional Partners of
the provisions of this Agreement.
(c)
Except in the case of a gift of a Partnership Interest to a person in accordance
with Section 8.1(b) or Section 8.5(d), the written consent of all of the
Members of the Management Committee to such transfer or admission of a Partner
shall be obtained, the granting or denial of which shall be within the sole and
absolute discretion of the Management Committee.
(d)
In the case of the consent to the admission of replacement Member of the
Management Committee under Section 4.14 and 4.15, the affirmative vote of
remaining members of the Management Committee holding sixty-six and two-thirds
(66 2/3%) of the Interests of the Partnership is required.
(e)
The transferee shall have provided the Partnership with such notification as may
be required by Section 6050K of the Code.
(f) Payment has been made to the Partnership of all costs and expenses of admitting any
such transferee or additional Partner to the Partnership.
(a)
The Partnership shall have the unilateral option to acquire the Interest of a
transferee or assignee of any General Partnership Interest or fraction thereof
if:
(1)
Any person acquired a Partnership Interest, or becomes an assignee, as the result of a
court order that the Partnership is required by law to recognize;
(2)
A General Partner's Interest in the Partnership is subjected to a lawful charging
order; or
(3)
A General Partner makes an unauthorized transfer or assignment of his General
Partnership Interest that the Partnership is required by law (and by court
order) to recognize.
(b)
The Partnership will have the unilateral option to acquire the Interest of the
transferee or assignee of any Limited Partnership Interest, or any fraction
thereof, upon the following terms and conditions:
(1)
The Partnership will have the option to acquire the interest by giving written
notice to the transferee or assignee that it intends to purchase the interest
within 90 days from the date it is finally determined that the Partnership is
required to recognize the transfer or assignment.
(2)
The valuation date for determining the purchase price of the interest will be
the first day of the month following the month in which notice is delivered.
(3)
Unless the Partnership and the transferee or assignee agree otherwise, the
purchase price for the interest, or any fraction to be acquired by the
Partnership, will be its fair market value for Federal Transfer Tax purposes as
determined by an appraisal, less the cost of the appraisal.
(4)
The sale's closing will occur at 10 o'clock a.m. on the first Tuesday of the month
following the month in which the appraisal is rendered.
(5)
In order to reduce the burden upon the resources of the Partnership, the
Partnership will have the option to pay its purchase money obligation in 15
equal annual installments with interest at the minimum interest rate required by
the Internal Revenue Code. If the Partnerships remaining term is less than
15 years, the obligation must be paid in the number of annual installments equal
to the number of years remaining in the Partnerships term. The option to
pay the purchase price in annual installments must be exercised in writing
delivered at closing. The first installment of principal, with interest, will be
due and payable on the first day of the calendar year following closing.
Subsequent annual installments, with accrued interest, will be due and payable
on the first day of each succeeding calendar year until the entire obligation is
paid. The Partnership may prepay all or any part of the purchase money
obligation at any time without penalty.
(6)
By unanimous consent, other than the Partner whose interest is to be acquired,
the Management Committee may assign the Partnerships option to purchase to
one or more of the remaining Partners. When done so, any rights or obligations
imposed upon the Partnership will instead become, by substitution, the rights
and obligations of the Partners who are assigned the option.
(7)
Neither the transferee nor assignee of any unauthorized transfer or assignment
or the Partner causing the transfer or assignment may vote on Partnership
matters during the prescribed option period. If the option to purchase is timely
exercised, they may not vote until the sale is closed.
BOOKS; DEPOSITORY ACCOUNTS; ACCOUNTING REPORTS; AND ELECTIONS
(a)
The Management Committee may, but is not required to, prepare or cause to be
prepared, at the Partnerships expense, at the end of each year of the
Partnership, annual financial statements showing the financial condition of the
Partnership at the end of such year and the results of its operations for the
year then ended, which annual financial statements shall be prepared utilizing
the same accounting principles and methods as used to report Partnership Income
or Losses for income tax purposes.
(b)
In addition to the financial statements provided for in Section 9.4(a) above,
the Management Committee shall prepare or cause to be prepared at the
Partnerships expense:
(i) Income tax returns for the Partnership, and the Management Committee shall
timely file such returns with the appropriate taxing authorities;
(ii)
A notice of each Partners share of the Partnership Income and Losses for
federal income tax purposes for each year, and of any other information
necessary or desirable for preparation by each Partner of his or her federal and
state income tax return.
MEETINGS AND VOTING RIGHTS OF PARTNERS
(a)
Meetings of the Partnership for any purpose may be called by the Management
Committee and shall be called by the Management Committee upon receipt of a
request in writing signed by the Members of the Management Committee controlling
twenty percent (20%) of the Percentage Interests. Such request shall state the
purpose of the proposed meeting and the matters proposed to be acted upon at the
meeting. Such meeting shall be held at such place as may be designated by the
Management Committee.
(b)
A notice of any such meeting shall be given either personally, or by mail, not
less than five (5) days nor more than sixty (60) days before the date of the
meeting, to each Partner at his or her address as specified in Section 11.6
below. Such notice shall be in writing, and shall state the place, date, and
hour of the meeting, and shall indicate that it is being issued at or by the
direction of the Partners calling the meeting. The notice shall state the
purpose or purposes of the meeting. If the meeting is adjourned to another time
or place, and if any announcement of the adjournment of time or place is made at
the meeting, it shall not be necessary to give notice of the adjourned meeting
except to those Partners not in attendance at the meeting. The presence in
person or by proxy of a Majority of the Management Committee shall constitute a
quorum at all meetings of the Partners which shall be the number of General
Partners required for any meeting; provided, however, that if there be no such
quorum, the General Partners holding a majority of the Partnership percentage
Interests so present or so represented may adjourn the meeting from time to
time, until a quorum shall have been obtained. No notice of the time, place, or
purpose of any meeting of Partners need be given to any Partner who attends in
person or is represented by proxy (except when the Partner attends a meeting for
the express purpose of objecting at the beginning of the meeting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened), or to any Partner entitled to such notice who, in writing
(executed and filed with the records of the meeting, either before or after the
time thereof) waives such notice.
(c)
For the purpose of determining the Management Committee entitled to vote on, or
to vote at, any meeting of the Partnership or any adjournment thereof, the
Partners requesting such meeting may fix, in advance, a date as the record date
for any such determination of Partners. Such date shall not be less than five
(5) days nor more than sixty (60) days before any such meeting.
(d)
Each Partner may authorize any person or persons to act for him or her by proxy
in all matters in which a Partner is entitled to participate, whether by waiving
notice of any meeting, or voting or participating at a meeting. Every proxy must
be signed by the Partner or his or her attorney-in-fact. No proxy shall be valid
after the expiration of eleven (11) months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Partner executing it.
MISCELLANEOUS PROVISIONS
(a)
To Partners. Any notice to be given hereunder at any time to any Partner,
or any documents, reports, or returns required by this Agreement to be delivered
to any Partner, may be delivered personally or mailed to such Partner, postage
prepaid, addressed to him or her at the address set forth on Exhibit A or
such other address as he or she shall by notice to the Partnership have
designated as his or her address for the mailing of all notices hereunder. Any
notice, or any document, report, or return so delivered or mailed shall be
deemed to have been given or delivered to such Partner at the time it is
delivered or mailed, as the case may be.
(b)
To the Partnership. Any notice to be given to the Partnership hereunder
may either be delivered personally to each Partner or mailed to the Partnership,
by registered or certified mail, postage prepaid, addressed to the Partnership
at its principal office. Any notice so delivered or mailed shall be deemed to
have been given to the Partnership at the time it is delivered or mailed, as the
case may be.
GENERAL PARTNERS:
__________________________________(SEAL)
John N. McAleer
___________________________________(SEAL)
Jeanne McAleer Sanderford
___________________________________(SEAL)
Shannon McAleer Silvernail
___________________________________(SEAL)
Patricia McAleer Dorgan
___________________________________(SEAL)
Sandra McAleer Middlebrooks
___________________________________(SEAL)
Elizabeth McAleer Tillman
EXHIBIT A
TO
LIMITED PARTNERSHIP AGREEMENT
OF
McALEER INVESTMENTS LIMITED PARTNERSHIPGeneral
Partners
John N. McAleer
Jeanne McAleer Sanderford
Shannon McAleer Silvernail
Patricia McAleer Dorgan
Sandra McAleer Middlebrooks
Elizabeth McAleer Tillman
Limited
Partners
Maureen Dorgan
Pamela Dorgan
Patricia McAleer Dorgan
William Dorgan, Jr.
Barbara D. Hasselbring
Patricia D. Hayden
Bernadette Dorgan
S. C. Middlebrooks
Bernadette McAleer
John N. McAleer
Jeanne McAleer Sanderford
Shannon McAleer Silvernail
Sandra McAleer Middlebrooks
Elizabeth McAleer Tillman
EXHIBIT B
TO
LIMITED PARTNERSHIP AGREEMENT
OF
MCALEER INVESTMENTS LIMITED PARTNERSHIP
General Partner
General Partner's
Percentage
Interest
Capital Contribution
(# of shares of Krispy
Kreme Doughnuts, Inc.)
John N. McAleer
1.00%
263,060
Jeanne McAleer Sanderford
1.00%
185,420
Shannon McAleer Silvernail
1.00%
123,120
Patricia McAleer Dorgan
1.00%
60,000
Sandra McAleer Middlebrooks
1.00%
81,420
Elizabeth McAleer Tillman
1.00%
146,420
TOTAL
6.00%
859,440
Limited Partner
Limited Partner's
Percentage
Interest
Capital Contribution
(# of shares of Krispy
Kreme Doughnuts, Inc.)
Maureen Dorgan
0.91
9,000
Pamela Dorgan
0.91
9,000
William Dorgan, Jr.
0.91
9,000
Barbara D. Hasselbring
0.79
7,800
Patricia D. Hayden
0.66
6,500
Bernadette Dorgan
0.81
8,000
S. C. Middlebrooks
0.41
4,000
Bernadette McAleer
7.33
72,203
John N. McAleer
25.71
*
Jeanne McAleer Sanderford
17.83
*
Shannon McAleer Silvernail
11.50
*
Patricia McAleer Dorgan
5.09
*
Sandra McAleer Middlebrooks
7.27
*
Elizabeth McAleer Tillman
13.87
*
TOTAL
94.00
125,503
*See above.