0000950144-01-507772.txt : 20011019
0000950144-01-507772.hdr.sgml : 20011019
ACCESSION NUMBER: 0000950144-01-507772
CONFORMED SUBMISSION TYPE: SC 13D/A
PUBLIC DOCUMENT COUNT: 4
FILED AS OF DATE: 20011012
GROUP MEMBERS: R.C.F., INC.
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: IBS INTERACTIVE INC
CENTRAL INDEX KEY: 0001057257
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370]
IRS NUMBER: 133817344
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-55417
FILM NUMBER: 1757752
BUSINESS ADDRESS:
STREET 1: 2 RIDGEDALE AVE
STREET 2: STE 350
CITY: CEDAR KNOLLS
STATE: NJ
ZIP: 07927
BUSINESS PHONE: 9732852600
MAIL ADDRESS:
STREET 1: 2 RIDGEDALE AVE
STREET 2: STE 350
CITY: CEDAR KNOLLS
STATE: NJ
ZIP: 07927
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: CRIPPEN ROY E III
CENTRAL INDEX KEY: 0001030466
STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000]
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D/A
BUSINESS ADDRESS:
STREET 1: DIGITAL FUSION 400 N. ASHLEY DRIVE
STREET 2: SUITE 2600
CITY: TAMPA
STATE: FL
ZIP: 33602
BUSINESS PHONE: 8132210024 X4001
MAIL ADDRESS:
STREET 1: IBS INTERACTIVE INC
STREET 2: 2 RIDGEDALE AVE STE 350
CITY: CEDAR KNOLLS
STATE: NJ
ZIP: 07927
SC 13D/A
1
g72054a1sc13da.txt
IBS INTERACTIVE, INC.
1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)*
IBS Interactive, Inc.
--------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 Value
--------------------------------------------------------
(Title of Class of Securities)
44923E-10-1
--------------------------------------------------------
(CUSIP Number)
Elena Crosby
IBS Interactive Inc.
400 N. Ashley Street, Suite 2600
Tampa, FL 33602
(813) 221-0024
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
3/1/2000
--------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
that this is the subject of this Schedule 13D, and is filing this schedule
because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. Seess.240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 8
2
CUSIP No. 44923E-10-1
NAMES OF REPORTING PERSON:
(1) ROY E. CRIPPEN III
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITY ONLY)
-----------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
-----------------------------------------------------------------------
(3) SEC USE ONLY
-----------------------------------------------------------------------
(4) SOURCE OF FUNDS*
00 & PF
-----------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
-----------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES CITIZEN
-----------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES 150,000(1)
BENEFICIALLY -----------------------------------------------------
OWNED BY
EACH (8) SHARED VOTING POWER
REPORTING
PERSON WITH 601,769
-----------------------------------------------------
(9) SOLE DISPOSITIVE POWER
150,000(1)
-----------------------------------------------------
(10) SHARED DISPOSITIVE POWER
601,769
-----------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
751,769(1)
-----------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
-----------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) [ ]
10.5%(2)
-----------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------
(1) Includes 150,000 shares that are purchasable by Mr. Crippen upon
exercise of options granted to Mr. Crippen in connection with his
employment. Those options are exercisable as follows: 25% vested on
March 1, 2000, the remaining 75% vest ratably on the first day of each
calendar month for 36 months commencing on April 1, 2000. Before the
exercise of the options, Mr. Crippen is not entitled to any rights as a
shareholder of the Issuer as to the shares covered by the options. Mr.
Crippen expressly disclaims beneficial ownership of any of the shares
of common stock of the Issuer that are purchasable by him upon exercise
of his options until such time as Mr. Crippen purchased any such shares
or the shares become exercisable within 60 days as described in Rule
13d-3(a)(1).
(2) The total number of outstanding shares of the Issuer's common stock
includes the 150,000 shares subject to stock options held by Mr.
Crippen.
Page 2 of 8
3
Names of Reporting Person:
(1) R.C.F., Inc.
I.R.S. Identification No. of Above Person (entity only)
-----------------------------------------------------------------------
(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 if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
-----------------------------------------------------------------------
(6) Citizenship or Place of Organization
-----------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------
OWNED BY
EACH (8) SHARED VOTING POWER
REPORTING
PERSON WITH 601,769
-----------------------------------------------------
(9) SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------
(10) SHARED DISPOSITIVE POWER
601,769
-----------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
601,769
-----------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
-----------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) [ ]
8.4%
-----------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
-----------------------------------------------------------------------
Page 3 of 8
4
ITEM 1. SECURITY AND ISSUER. This Schedule relates to the Common Stock (the
"Common Stock") of IBS Interactive, Inc., a Delaware corporation (the "Issuer")
whose principal executive offices are located at 400 N. Ashley Drive, Suite
2600, Tampa FL 33602.
ITEM 2. IDENTITY AND BACKGROUND.
Information with respect to Roy E. Crippen ("Crippen") and R.C.F., Inc.
("RCF"):
Item 2(a) This Schedule is being filed jointly on behalf of
Crippen, and RCF (sometimes referred to collectively
as the "Reporting Persons")
Item 2(b) The address of Crippen is as follows:
400 N Ashley Drive, Suite 2600, Tampa FL 33602
The address of RCF is as follows:
c/o Jones Vargas, 3773 Howard Hughes Parkway, Third
Floor, Las Vegas, Nevada 89109.
Item 2(c) The principal occupation or employment of Crippen is
as Chief Executive Officer of the Issuer.
Principal business of RCF is: general partner of
R.C.F. Company Limited Partnership, which was created
solely for tax planning purposes.
Item 2(d) During the last five years the Reporting Persons have
not been convicted in a criminal proceeding
(excluding traffic violations or similar
misdemeanors).
Item 2(e) During the last five years the Reporting Persons have
not been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction that
resulted in the Reporting Persons being 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.
Item 2(f) Citizenship: United States for Crippen and Nevada,
U.S.A. for RCF.
Page 4 of 8
5
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On March 1, 2000, Mr. Crippen acquired beneficial ownership of 399,369
shares of Common Stock as a result of a merger between Digital Fusion,
Inc. and the Issuer, together with 150,000 shares purchasable by
exercise of options granted to Crippen. Immediately thereafter Crippen
transferred the 399,369 shares of Common Stock to R.C.F. Company
Limited Partnership (the "Partnership") in exchange for partnership
units. RCF is the managing general partner of the Partnership, Crippen
is the sole limited partner of the Partnership and the director,
officer, and sole shareholder of RCF.
Crippen and RCF acquired beneficial ownership of an additional 53,100
shares of Common Stock during November 2000, an additional 47,600
shares of Common Stock during December 2000, an additional 74,700
shares of Common Stock during August 2001, and an additional 27,000
shares of Common Stock during September 2001 as a result of purchases
made by the Partnership out of working capital, as described in Item
5(c) below. As of October 1, 2001, Crippen's beneficial holdings
include 150,000 purchasable shares, of which 103,125 are exercisable
within 60 days.
ITEM 4. PURPOSE OF TRANSACTION.
Crippen acquired the shares for investment and transferred 399,369
shares of Common Stock to the Partnership solely for tax planning
purposes. The Partnership acquired an additional 202,400 shares for
investment purposes.
At this time, the Reporting Persons have no specific plan or proposal
to acquire or dispose of the Common Stock. Consistent with their
investment purpose, the Reporting Persons at any time and from time to
time may acquire additional shares of Common Stock (including by
exercise of stock options) or dispose of any or all of the Reporting
Persons' Common Stock depending upon an ongoing evaluation of the
investment in the Common Stock, prevailing market conditions, other
investment opportunities, liquidity requirements of the Reporting
Persons or other investment considerations. The Reporting Persons have
made no determination regarding a maximum or minimum number of shares
of Common Stock that they may hold at any point in time.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5(a) See Items 11 and 13 of the applicable cover page.
Item 5(b) See Items 7, 8, 9, and 10 of the applicable cover
page.
Page 5 of 8
6
Item 5(c)
Date Number of Shares Acquired Price Per Share How Effected
---- ------------------------- --------------- ------------
03/01/2000 399,369 Merger
11/20/2000 12,000 1.00 Open market
11/21/2000 7,900 1.08 Open market
11/22/2000 5,000 1.25 Open market
11/17/2000 4,200 1.13 Open market
11/28/2000 10,000 1.13 Open market
11/29/2000 10,500 1.00 Open market
11/30/2000 3,500 1.04 Open market
12/01/2000 1,500 1.04 Open market
12/04/2000 1,000 1.03 Open market
12/05/2000 1,000 1.06 Open market
12/06/2000 1,000 1.00 Open market
12/08/2000 5,000 1.02 Open market
12/11/2000 32,200 1.01 Open market
12/12/2000 4,000 1.47 Open market
12/13/2000 1,900 1.86 Open market
08/02/2001 4,000 0.55 Open market
08/10/2001 4,700 0.55 Open market
08/13/2001 9,000 0.50 Open market
08/21/2001 4,000 0.57 Open market
08/24/2001 10,000 0.50 Open market
08/27/2001 10,000 0.45 Open market
08/29/2001 23,000 0.47 Open market
08/31/2001 10,000 0.50 Open market
09/05/2001 20,000 0.42 Open market
09/10/2001 1,000 0.45 Open market
09/19/2001 1,000 0.45 Open market
09/21/2001 5,000 0.49 Open market
* All of the shares acquired in the open market were purchased by the
Partnership.
Item 5(d)
As to Crippen: Crippen, as director, officer, and sole
shareholder of RCF, the general partner of the Partnership,
has the right to receive and direct the receipt of dividends
from, and proceeds from the sale of, the Common Stock
indicated in Item 11 of the applicable cover page. Crippen
also has the right to receive proceeds from the sale of such
securities as a limited partner of the Partnership.
As to RCF: RCF, which is the general partner of the
Partnership, and is controlled by Crippen, has the right to
receive and to direct the receipt of dividends from, and
proceeds from the sale of, the Common Stock indicated in Item
11 of the applicable cover page.
Item 5(e)
Not applicable.
Page 6 of 8
7
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Reporting Persons entered into transactions with or are party to
the following agreements with respect to the Common Stock or the
Issuer:
(1) On February 10, 2000, Crippen acquired 399,369 shares of Common
Stock pursuant to an Agreement and Plan of Merger, among Sean D. Mann,
Crippen, Michael E. Mandt, Ali A. Husain, Robert E. Siegmann, digital
infusion, inc., the Issuer, and Digital Fusion Acquisition Corp.,
(2) Crippen transferred 399,369 shares of Common Stock to the
Partnership, a copy of the Partnership Agreement is attached;
(3) On February 10, 2000, Crippen entered into an Employment Agreement
with the Issuer; and
(4) Options to purchase 150,000 shares were granted to Crippen on March
1, 2000.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1. Agreement and Plan of Merger dated as of February 10,
2000, among Sean D. Mann, Crippen, Michael E. Mandt,
Ali A. Husain, Robert E. Siegmann, digital fusion,
inc., the Issuer, and Digital Fusion Acquisition
Corp. (incorporated by reference to Exhibit 2.1 to
the Issuer's Report on 8-K, filed March 24, 2000).
Exhibit 2. Amended and Restated Limited Partnership Agreement of
the Partnership.
Exhibit 3. Employment Agreement dated as of March 1, 2000 by and
between the Issuer and Crippen (incorporated by
reference to Exhibit 10.24 to the Issuer's Report on
10-K, filed March 30, 2000).
Exhibit 4. Non-Qualified Stock Option Agreement dated February
10, 2000 by and between the Issuer and Crippen.
Exhibit 5. Stock Option Plans: 1998 IBS Interactive, Inc. Stock
Option Plan (incorporated by reference to Exhibit
10.14 to the Issuer's Registration Statement on Form
SB-2, File No. 333-47741, filed on April 23, 1998 and
1999 IBS Interactive, Inc. Stock Option Plan
(incorporated by reference to the Issuer's Proxy
Statement for the Annual Meeting of Stockholders held
on June 4, 1999.
Exhibit 6. Joint Filing Agreement Dated as of October 5, 2001,
By and Between Crippen and R.C.F.,INC.
Page 7 of 8
8
SIGNATURE
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.
Dated: October 5, 2001
/s/ ROY E. CRIPPEN, III
-----------------------------------
Roy E. Crippen, III
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.
Dated: October 5, 2001
R.C.F., Inc.
/s/ ROY E. CRIPPEN, III
-----------------------------------
Roy E. Crippen, III, President
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of and any title of each person who signs the statement shall be typed
or printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
Page 8 of 8
EX-2
3
g72054a1ex2.txt
LIMITED PARTNERSHIP AGREEMENT
1
EXHIBIT 2
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
R.C.F. COMPANY LIMITED PARTNERSHIP,
A NEVADA LIMITED PARTNERSHIP
2
TABLE OF CONTENTS
Page No.
--------
ARTICLE I...........................................................................................2
Definitions......................................................................................2
Captions and Certain Terms.......................................................................6
Severability.....................................................................................6
Limitation of Grant..............................................................................6
ARTICLE II..........................................................................................6
Formation, Name, Office and Registered Agent.....................................................6
Purpose of Partnership...........................................................................7
Term of Partnership..............................................................................8
Authorized Acts..................................................................................8
Co-Ownership of Partnership Interests............................................................9
Representations and Warranties of the Limited Partners...........................................9
ARTICLE III........................................................................................11
Capital Contributions...........................................................................11
Capital Account.................................................................................12
Expenses Paid by Partners.......................................................................13
Loans by Partners; Restrictions on Borrowing....................................................13
ARTICLE IV.........................................................................................13
Allocations.....................................................................................13
ARTICLE V..........................................................................................15
Distributions...................................................................................15
Limitation on Distributions to Partners.........................................................17
ARTICLE VI.........................................................................................17
Duties of Managing General Partner..............................................................17
Managing General Partner's Fees and Expenses....................................................17
Authority of Managing General Partner...........................................................18
Special Limitation..............................................................................20
Dealing with Affiliates.........................................................................20
Indemnification of General Partner..............................................................20
Liability of Limited Partners...................................................................21
Authority of Limited Partners and Non-Managing General Partners.................................21
ARTICLE VII........................................................................................21
Limited Partners................................................................................21
General Partner.................................................................................21
Restriction on Transfer.........................................................................22
Admission of Substitute Partner.................................................................22
Rights of Partner After Assignment and Substitution.............................................23
Allocations and Distributions After Assignment..................................................23
3
ARTICLE VIII.......................................................................................23
Withdrawal of Limited Partner...................................................................23
Retirement, Removal, or Withdrawal of Managing General Partner..................................24
Retirement of Limited Partner...................................................................25
Rights of Partner After Retirement, Removal, or Withdrawal......................................25
ARTICLE IX.........................................................................................25
Events of Dissolution...........................................................................25
Winding-Up and Distributions....................................................................25
Distribution of Liquidation Proceeds and Assets and Allocation of Gains and Losses..............26
Limitation of Liability of Partners.............................................................27
Waiver of Right of Partition of Assets..........................................................27
ARTICLE X..........................................................................................27
Books and Records...............................................................................27
Reports.........................................................................................27
Bank Accounts...................................................................................28
Tax Elections...................................................................................28
Accounting Method and Fiscal Year...............................................................28
ARTICLE XI.........................................................................................28
Power of Attorney...............................................................................28
Partnership Contracts...........................................................................29
Conveyances.....................................................................................29
Notices.........................................................................................29
Consents........................................................................................29
Meetings........................................................................................30
Binding Effect; Counterparts....................................................................30
Choice of Law...................................................................................31
Complete Agreement; Modification................................................................31
Evidence of Partnership Interests...............................................................31
Tax Matters Partner.............................................................................31
Gender and Number...............................................................................31
Title...........................................................................................31
4
AMENDED AND RESTATED
R.C.F. COMPANY LIMITED PARTNERSHIP AGREEMENT
This Amended and Restated Limited Partnership Agreement ("Agreement")
is entered into pursuant to the provisions of the Nevada Uniform Limited
Partnership Act, dated as of December 26, 1996, by and among R.C.F., Inc., a
Nevada corporation (as the "Managing General Partner"), Roy E. Crippen III
("Crippen"), and Roy E. Crippen III, as Trustee of the Roy Edward Crippen III
(1995) Annuity Trust ("Crippen Annuity Trust"), (each as a "Limited Partner").
The General Partner and the Limited Partners wish to amend and restate the
Agreement of Limited Partnership of R.C.F. Company Limited Partnership on the
following terms and conditions:
ARTICLE I
FORM AND INTERPRETATION
1. Definitions. The following capitalized terms, as used in this
Agreement and in the attached exhibits, which constitute a part of this
Agreement, have the meanings ascribed to them below and include the plural as
well as the singular number:
"Act" means the Nevada Uniform Limited Partnership Act, as amended, or
any subsequent Nevada law concerning partnerships that are enacted in
substitution for the Act.
"Affiliate" of a Partner means (1) another Partner of the Partnership;
(2) a legal or personal representative of any Partner; (3) the Partner's lineal
descendants and spouse (other than a spouse who is legally separated from the
Partner under a decree of divorce or separate maintenance); (4) a trustee of a
trust for the benefit of any Person referred to in clause (1), (2) or (3); (5) a
Person, other than an individual, of which 80% or more of the voting or equity
interests is owned directly or indirectly by a Partner and/or one or more of the
Persons referred to in clauses (1) through (4); (6) a Person owning 80% or more
of the voting or equity interests of a Partner that is not an individual; or (7)
a Person other than an individual, 80% or more of the voting or equity interests
of which is owned by the same Person that owns 80% or more of the voting or
equity interests of a Partner that is not an individual.
"Agreement" means this Limited Partnership Agreement as originally
executed and as subsequently amended or supplemented from time to time in
accordance with section 54.
"Assignment" means a sale, exchange, gift, pledge, transfer or
disposition of any kind whatsoever and, in the case of a Person that is not an
individual, it includes the sale, exchange, pledge, transfer or disposition of a
majority of either voting control or the equity interests in such Person.
2
5
"Bankruptcy" means taking advantage of any bankruptcy or insolvency act
(including the Bankruptcy Reform Act of 1978 or similar law, and also any
proceeding under state or local insolvency or debtor relief laws), or a final
adjudication of insolvency or an assignment of a major portion of a Person's
assets for the benefit of creditors.
"Capital Account" has the meaning set forth in section 12.
"Capital Contribution" means the total amount of cash, and net fair
market value of securities and other property contributed by a Partner to the
equity of the Partnership, or agreed to be contributed by a Partner to the
equity of the Partnership, pursuant to section 11(a), and reduced by any return
of capital to the Partner within the meaning of section 11(c). Any reference in
this Agreement to the Capital Contribution of either a Partner or an assignee of
a Partner shall include the Capital Contribution of any prior Partner to whose
Partnership Interest the then existing Partner or assignee succeeded.
"Cash Flow" means the excess of cash derived by the Partnership from
all sources, including from capital contributions, loans, sales of securities
and other activities, (but excluding cash derived from the winding-up and
liquidation of the Partnership pursuant to section 37) over the sum of all cash
disbursements, including repayments of loans from Partners, loans to Partners
for the Partnership, and distributions to Partners pursuant to section 16(a) or
(b) (but excluding disbursements pursuant to section 16(c), plus a reasonable
allowance for reserves for repairs, investments in Property (including
Marketable Securities), replacements, contingencies and anticipated obligations
(including debt service, capital improvements and replacements to the extent not
funded by reserves) as reasonably determined by the Managing General Partner.
Notwithstanding the preceding sentence, in determining the reasonable allowance
for reserves, the Managing General Partner shall reduce such allowance to the
extent necessary to ensure that annual distributions of Cash Flow to each
Partner will be in an amount at least equal to the annual income tax liability
(exclusive of income tax liability resulting from a transaction pursuant to
section 16(b) or (c)) of each such Partner (determined assuming that the maximum
possible income tax rate is applicable) resulting from the allocation to the
Partner of his share of the Partnership's Taxable Income and Taxable Loss. If
the Partners elect, pursuant to Section 761 of the Code, for the Partnership not
to be subject to Subchapter K of Chapter 1, then Cash Flow shall be calculated
separately for each Partner and shall not be subject to a holdback for a reserve
on the theory that each Partner owns the assets of the Partnership contributed
by such Person directly. For this purpose, if a Partner has contributed
Marketable Securities to the Partnership, such Marketable Securities (including
stock dividends thereon, stock splits or other recapitalizations) shall be
allocated to the contributing Partner (or such Partner's assigns).
3
6
"Code" means the Internal Revenue Code of 1986, as amended, or any
subsequent federal law concerning income taxes that is enacted in substitution
for the Code.
"General Partner" means any Person admitted as a general partner in
accordance with this Agreement.
"General Partnership Interest" means the Partnership Interest of a
General Partner, in his capacity as a General Partner.
"Limited Partner" means any Person admitted as a limited partner in
accordance with this Agreement.
"Limited Partnership Interest" means the Partnership Interest of a
Limited Partner, in the capacity as a Limited Partner.
"Majority in Interest" when used in regard to the degree of consent,
approval or agreement required among the Partners, means Partners whose
aggregate Percentage Interests constitute over 50% of the total aggregate
Percentage Interests then outstanding.
"Managing General Partner" means the Person designated in this
Agreement as the general partner responsible for management of the affairs of
the Partnership, including all voting rights with respect to, and control over,
Marketable Securities, and thereafter any Person which becomes a general partner
responsible for management of the affairs of the Partnership pursuant to this
Agreement, in the Person's capacity as a managing general partner of the
Partnership. Initially, the Managing General Partner shall be R.C.F., Inc.
"Marketable Securities" means securities, including stock, which are
traded on an established securities market, whether or not registered under the
Securities Act of 1933. The term shall also include the shares of PowerCerv
Corporation and any successor thereto.
"Partner" means each Person which is a General Partner or a Limited
Partner.
"Partnership" means the R.C.F. COMPANY LIMITED PARTNERSHIP, the limited
partnership formed in accordance with the Act pursuant to this Agreement.
"Partnership Interest" includes only a Partner's Capital Contribution
and right to receive his Percentage Interest and excludes Partnership Rights.
"Partnership Rights" excludes the Partnership Interest of a Partner,
and includes, in addition to other rights provided in this Agreement, the rights
provided to him by the Act except to the extent such rights are inconsistent
with the provisions of this Agreement.
4
7
"Percentage Interest" means a Partner's percentage share (as initially
stated opposite such Partner's name on Exhibit A as amended from time to time),
of the Profits and Losses, Taxable Income or Taxable Loss, cash and other
distributions and liquidation proceeds of the Partnership all subject to and
interpreted in accordance with the terms of this Agreement. The Percentage
Interests of Partners shall be proportionate to the Capital Accounts of the
Partnership at all times so that, for example, if a Partner's Capital Account is
100 and the aggregate of all Capital Accounts is 1000, the Partner's Percentage
Interest in the Partnership is 10%. In the event of a change among the Partners
in the Percentage Interests in the Partnership during the year, the Partnership
shall use a closing-of-the-books method with respect to such change or changes
in Percentage Interests in computing a Partner's share of Profits and Losses,
Taxable Income and Taxable Losses, and entitlement to distributions during such
year.
"Person" means any individual and any general or limited partnership,
corporation, estate, joint venture, trust, business trust, cooperative,
association or other organization.
"Profits and Losses" means the annual net income or loss of the
Partnership determined on a generally accepted accounting principles basis, as
disclosed on the annual financial statements of the Partnership. If the Partners
have elected for the Partnership to be excluded from the application of
Subchapter K of Chapter 1 of the Code, the provisions relating to Profits and
Losses shall be of no effect during such period at the Partnership level, but
will be separately computed for each Partner.
"Property" means any real, personal, tangible or intangible property
contributed by a Partner to the equity of the Partnership or otherwise acquired
by the Partnership.
"Pro Rata" means in the proportion that the Percentage Interest of each
Partner bears to the total Percentage Interests of all the Partners.
"Retirement" means the death, Bankruptcy, adjudication of incompetency
as determined by a court of appropriate jurisdiction, dissolution and
liquidation or termination of existence, merger or consolidation (except as
provided in sections 33 and 34) of a Partner, or the sale, lease or other
disposition of all or substantially all the property of a Partner (except as
provided in sections 33 and 34).
"Taxable Income or Taxable Loss" means the net income or loss of the
Partnership for federal income tax purposes, as determined at the close of the
Partnership's fiscal year by the accountants employed by the Partnership to
prepare its income tax returns. If the Partners have elected for the Partnership
to be excluded from the application of Subchapter K of Chapter 1 of the Code,
the provision shall be of no effect for federal income tax purposes during such
period, but will be separately computed for each Partner.
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2. Captions and Certain Terms. The titles and captions preceding
the text of the articles and sections of this Agreement are solely for
convenience of reference and neither constitute a part of this Agreement nor
affect its meaning, interpretation, or effect. The words "hereby," "herein,"
"hereof," "hereto," "hereunder," and terms of similar import refer to this
Agreement as a whole and not to any particular article, section, subsection or
other part of this Agreement.
3. Severability. If any article, section or other provision of
this Agreement, or its application, is held to be invalid, illegal or
unenforceable in any respect or for any reason, the remainder of this Agreement
and the application of such article, section or other provision to a person or
circumstance with respect to which it is valid, legal and enforceable is not
affected.
4. Limitation of Grant. Nothing in this Agreement, whether
express or implied, is intended or may be construed to confer upon, or to grant
to, any creditor or any other Person (other than the Partners and their legal
and personal representatives, heirs, successors and permitted assignees) any
right, remedy or claim under or because of this Agreement or any covenant,
condition or stipulation of it.
ARTICLE II
ORGANIZATION OF PARTNERSHIP
5. A. Formation, Name, Office and Registered Agent. The
Partners hereto do hereby amend and restate a partnership under he provisions of
the Act, and the rights and liabilities of the Partners shall be as provided in
the Act except as herein otherwise expressly provided. The name of the
Partnership is "R.C.F. COMPANY LIMITED PARTNERSHIP." The recordkeeping office of
the Partnership is located at c/o Stephen M. Rice, Jones, Jones, Close & Brown,
Chartered, 300 South Fourth Street, Las Vegas, Nevada 81901-6026. The principal
business office of the Partnership is located at 300 South Fourth Street, Las
Vegas, Nevada 81901-6026. The Managing General Partner may change the name of
the Partnership or the location of its principal business office at any time and
from time to time by giving written notice of such change to each Partner. The
registered agent and registered office of the Partnership is Stephen M. Rice,
Jones, Jones, Close & Brown, Chartered, 300 South Fourth Street, Las Vegas,
Nevada 81901-6026.
B. General and Limited Partners. R.C.F., Inc. is the
initial Managing General Partner of the Partnership. Crippen and the Crippen
Annuity Trust are the initial Limited Partners of the Partnership.
C. Certificate of Limited Partnership. In connection
with the execution of this Agreement, the Managing General Partner has signed or
shall sign a certificate of limited partnership, pursuant to the Act. The
Managing General
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Partner has signed or shall cause the certificate to be filed with the Nevada
Secretary of State. The Managing General Partner shall amend the certificate
when required under this Agreement and shall execute the amended certificate as
required by the Act.
6. Purpose of Partnership.
(a) Except as provided in 6(c) below, the
purposes of the Partnership are to:
(i) invest in, own, sell, acquire,
manage and exercise the voting
rights associated with Marketable
Securities, including securities
issued by PowerCerv Corporation,
(ii) after approval by a Majority in
Interest, acquire, hold, sell, own,
improve, develop or lease other
types of property in addition to
Marketable Securities, and
(iii) engage in any other lawful activity
for profit approved by an
affirmative vote of a Majority in
Interest.
(b) Notwithstanding Section 6(a), unless
unanimously approved by the Partners, the
Partnership shall not engage in any
activity(ies) which would result, based upon
opinion of tax counsel, in the
characterization of the Partnership as an
investment company as that term is used in
Section 721(b) or any successor provision of
the Code.
(c) Subsequent to the date of commencement of
existence of the Partnership, the Partners
may make the election set forth in Treas.
Reg. ss. 1.761-2 to have the Partnership
excluded from the application of Subchapter
K of Chapter 1 of the Code until such time
as a Majority in Interest determine to have
the Partnership engage in an activity other
than investing in PowerCerv Corporation and
other intangible assets. Until such time as
the Partnership engages in other than
investment activities, and if the
aforementioned election is made, it is the
intention of the Partners that the
Partnership shall be only for investment
purposes and shall not actively conduct
business. It is the intention of the
Partners that the Partnership shall have
legal title to, and ownership of,
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Marketable Securities, so as to effectuate
the co-ownership of the Marketable
Securities by the Partners. As is evidenced
by various provisions of this Agreement,
each Partner reserves the right separately
to take or dispose of their shares or
interests in the Marketable Securities and
the other assets contributed by such Partner
to the Partnership. Further, during the
period Subchapter K does not apply to the
Partnership, this Agreement is to be
interpreted in a manner that will give
effect to such election.
7. Term of Partnership. The term of the Partnership shall
continue until the earlier of (i) December 31, 2037, or (ii) the death or
adjudication of incompetency as determined by a court of appropriate
jurisdiction of Roy E. Crippen III, unless the Partnership is earlier dissolved
and terminated under this Agreement.
8. Authorized Acts. In furtherance of its purposes, but subject
to every other provision of this Agreement, the Partnership, through, and only
through, the actions of the Managing General Partner acting alone, is authorized
to do the following:
(a) acquire by purchase, lease or otherwise, any
real or personal, tangible or intangible property that may be necessary,
convenient or incidental to the accomplishment of the purposes of the
Partnership;
(b) construct, operate, maintain, finance,
improve, own, sell, convey, exchange, assign, mortgage or lease any property (or
a part thereof) as may be necessary, convenient or incidental to the
accomplishment of the purposes of the Partnership;
(c) borrow money and issue evidences of
indebtedness in furtherance of any purpose of the Partnership and secure the
same by a mortgage, pledge, security interest or other liens on the property,
any part thereof, any interest therein or on any improvements thereto;
(d) prepay, in whole or in part, refinance,
increase, renew, modify or extend any indebtedness of the Partnership and, in
connection therewith, extend, renew or modify any mortgage, pledge, security
interest or other lien affecting any property; (e) invest and reinvest the
assets of the Partnership in, and purchase, acquire, hold, sell, transfer and
exchange securities of all kinds, including Marketable Securities;
(f) lend money to Partners;
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(g) exercise the voting rights associated with
property owned by the Partnership; and
(h) enter into any activity and perform and
carry out any contract in connection with, or necessary or incidental to, the
accomplishment of the purposes of the Partnership.
9. Co-Ownership of Partnership Interests. Any consent required by
a Partner shall require the action or vote of each Person (or in such other
manner as such Persons have designated in writing to the Partnership) having an
interest in such Partnership Interest, with a majority approval needed for
consent. On the death of a co-owner of a Partnership Interest held in either
joint tenancy with right of survivorship or tenancy by the entirety, the
Partnership Interest is owned solely by the survivor as a Partner, and not as an
assignee. The Partnership need not (although it may) recognize the death of a
co-owner of a Partnership Interest until the Managing General Partner receives
notice of the death. A co-owner of a Partnership Interest may sever the tenancy
by giving to the Managing General Partner notice to that effect, and signed by
the co-owner requesting the severance in the case of a joint tenancy, and by
both co-owners in the case of a tenancy by the entirety. Upon receipt of the
notice and the certificate evidencing the Partnership Interest owned by the
co-owners, the Managing General Partner shall cause the Partnership Interest to
be allocated as directed by the co-owners and shall indicate on the Partnership
records such allocation. In absence of joint direction, the interests shall be
allocated between the owners as the severed ownership interests would be valued
for federal estate tax purposes.
10. Representations and Warranties of the Limited Partners. As a
condition to becoming a Limited Partner of the Partnership, each Limited Partner
represents, warrants, and covenants to each General Partner and the Partnership
as follows:
(a) He will not assign, sell, mortgage, pledge,
or otherwise transfer or encumber any of his rights under this Agreement except
as expressly permitted under this Agreement and applicable laws;
(b) He was granted full and unrestricted access
to the Partnership's business premises, offices and properties and its business,
partnership and financial books and records as he required, and was permitted to
examine the foregoing, to question the General Partners, and to make all other
investigations that he considered appropriate to determine or verify the
business or condition (financial or otherwise) of the Partnership and to
consummate the transactions contemplated by this Agreement;
(c) The Partnership furnished him all additional
information concerning the Partnership's business and affairs that he requested;
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(d) He was permitted to ask questions of, and to
receive answers from, the General Partners concerning the terms and conditions
of an investment in a Limited Partnership Interest, and to obtain all additional
information he considered necessary to verify the accuracy of the information
received by him from the General Partner, and he understands the risks
associated with an investment in the Partnership and that such an investment is
highly speculative;
(e) Because of his considerable knowledge and
experience in financial and business matters in general and securities
investments in particular, he is able to evaluate the merits, risks, and other
factors bearing on the suitability of a Limited Partnership Interest as an
investment;
(f) His income and net worth are such that he is
not now, and does not contemplate being, required to dispose of any investment
in the Partnership to satisfy any existing or expected obligation, and he is
otherwise fully able to bear the economic risks of his proposed investment in
the Partnership, including the risk of losing all or any part of his investment
in the Partnership and the probable inability to sell, transfer, or pledge, or
otherwise dispose of an investment in the Partnership for an indefinite period;
(g) He is acquiring a Limited Partnership
Interest solely for his own account, as principal, for investment purposes and
not with a view to or for resale in connection with any distribution or
underwriting of any Partnership Interests;
(h) He understands that the Limited Partnership
Interest that he will purchase has not been and will not be registered under
either the Securities Act of 1933 or any state securities law, that he must hold
the Limited Partnership Interest indefinitely unless the Partnership Interests
are subsequently registered under those laws or transferred in reliance on
advice of counsel satisfactory to the Partnership that registration under those
laws is not required, and that stop-transfer instructions will be noted in the
appropriate records of the Partnership;
(i) He understands that the document evidencing
a Limited Partnership Interest acquired by him will bear the following legend:
These securities have not been registered under either the
Securities Act of 1933 or any state securities law and were
acquired pursuant to an investment representation by the
record owner. These securities are not transferable absent
either registration under the Act and every applicable state
securities law or advice of counsel satisfactory to the
Partnership that registration in not required. Additionally,
these securities are subject to
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certain transfer restrictions set forth in the Limited
Partnership Agreement of the Partnership. Reference may be
made to the Limited Partnership Agreement for the details of
those restrictions.
(j) He understands that a legend substantially
identical to the one described above will be placed on every new document issued
upon a transfer of a Limited Partnership Interest;
(k) He shall not sell, transfer, pledge, or
otherwise dispose of any part of his Limited Partnership Interest, unless the
Partnership Interests are registered under the Securities Act of 1933 and under
every applicable state securities law or unless the Partnership is furnished
with advice of counsel satisfactory to it that registration under those laws is
not required; and
(l) He understands that the Partnership does not
file periodic reports with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
ARTICLE III
PARTNERSHIP CAPITAL
11. Capital Contributions.
(a) Upon executing this Agreement, each Partner
shall make or has made a Capital Contribution in the amount and of the type, and
initially shall have a Percentage Interest equal to the percentage, set forth
opposite his name on EXHIBIT A. Each Partner's Percentage Interest initially
shall be proportionate to the number of shares of common stock of PowerCerv
Corporation contributed by such Partner to the capital of the Partnership as
such number of shares bears to the total number of such shares received by the
Partnership from all Partners. Partners may make (but Limited Partners are not
required to make) additional Capital Contributions at such time and in such
amount as they in their sole discretion shall determine but only if the Managing
General Partner consents to such additional Capital Contributions. Upon the
assignment of any Partnership Interest, the making of an additional Capital
Contribution or any return of a Capital Contribution, or any substitution of a
Partner, EXHIBIT A shall be amended to accurately reflect the name, address,
Capital Contribution and Percentage Interest of each Partner.
(b) Notwithstanding (a) above, no Capital
Contributions shall be made or permitted by any Partner which would result,
directly or indirectly, in the Partnership being treated as an investment
company under section 721(b) of the Code, and any such attempted Capital
Contribution shall be void ab initio. The
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Managing General Partner shall withhold its consent to the making of an
additional Capital Contribution, unless it has satisfied itself (by seeking
advice of legal counsel or otherwise) that the making of the additional Capital
Contribution will not result, directly or indirectly, in the Partnership being
treated as an investment company under section 721(b) of the Code.
(c) A Partner shall not receive from the
Managing General Partner or out of Partnership Property, and the Managing
General Partner and the Partnership shall not return to a Partner, any part of
his Capital Contribution, except as set forth in Articles V, VIII and IX of this
Agreement and such distribution is determined to be a return of a Partner's
Capital Contribution, and then only if all liabilities of the Partnership,
except liabilities to the Partners on account of their Capital Contributions,
have been paid or there remains property of the Partnership sufficient to pay
them. The Partnership shall not pay interest on Capital Contributions, and, a
Partner may demand and receive only cash in return for his Capital Contribution,
except to the extent provided for in Articles V and IX of this Agreement or
unless the Liquidator (as defined in section 37) decides to distribute
Partnership property in kind upon the dissolution, winding-up, and termination
of the Partnership, or unless the distribution of property to a Partner is
unanimously approved by the Partners. Each Partner, by signing this Agreement or
a counterpart of it, consents to all distributions authorized by this Agreement
and releases all other Partners from all liability to both him and the
Partnership for all distributions made in accordance with this Agreement.
12. Capital Account.
(a) The Managing General Partner shall establish
and maintain a Capital Account for each Partner in the Partnership's books of
account. Capital Accounts shall be maintained and adjusted in accordance with
generally accepted accounting principles. A Limited Partner shall not be
obligated to restore a deficit balance in its Capital Account, except to the
extent required by the Act. Consistent with these capital account maintenance
rules, the Managing General Partner shall credit to each Partner's Capital
Account the amounts of the Partner's Capital Contributions and any Profits
allocated to the Partner. The Managing General Partner shall charge to or deduct
from each Partner's Capital Account the amounts of all distributions (in cash or
other property) or the Partner and any Losses allocated to the Partner. If any
interest in the Partnership 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 relates to the transferred interest.
(b) The provisions of this section and the other
provisions of this Agreement pertaining to the maintenance of Capital Accounts
are intended to comply with Treasury Regulation Section 1.704-1(b) (or any
successor provision thereto), and shall be interpreted and applied in a manner
consistent with such Regulations. In the event that Managing General Partner
determines that it is prudent to modify the manner in which the Capital Accounts
are computed in order
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to comply with such Regulations, provided that it is not likely to have a
material effect on the amounts distributable to any Partner without such
Partner's consent and upon receipt of an opinion of tax counsel to the
Partnership concluding that such modification will be given effect for federal
income tax purposes, the Managing General Partner may make such modification.
(c) The Managing General Partner shall revalue
the Partnership's Property (based on its fair market value as of the moment
immediately preceding the relevant event) and shall adjust Capital Accounts to
take into account any resulting Profit or Loss (determined as if the Partnership
sold all its Property for cash equal to the Property's fair market value) upon
the occurrence of either of the following events: (1) the making by any Partner
of any non-Pro Rata additional Capital Contribution, (2) the partial or complete
withdrawal of a Partner's Partnership Interest, or (3) the admission of a
Partner.
13. Expenses Paid by Partners. Any Partnership expense reasonably
paid by any Partner on behalf of the Partnership is an indebtedness of the
Partnership to the Partner and does not increase the Partner's Partnership
Interest or Percentage Interest. The Partnership shall reimburse the Partner as
soon as practicable and may pay interest on the indebtedness.
14. Loans by Partners; Restrictions on Borrowing. The Managing
General Partner may borrow money on behalf of the Partnership from any Partner
in such amounts and for such purposes as it considers necessary, convenient or
incidental to the accomplishment of the purposes of the Partnership. Each loan
to the Partnership by a Partner (excluding reimbursable expenses) shall be
evidenced by a promissory note or similar instrument of the Partnership, may be
secured by a lien on the Property, may bear interest at a rate determined by
agreement between such Partner and the Managing General Partner and may be
subject to such other terms and conditions as are agreed to by such Partner and
the Managing General Partner. The Partnership may prepay each loan from a
Partner in whole or in part, at any time and from time to time, without premium
or penalty. The Managing General Partner may not borrow money from persons other
than Partners or pledge Partnership assets without the express written consent
of the non-managing General Partner.
ARTICLE IV
PROFITS AND LOSSES AND TAXABLE INCOME AND TAXABLE LOSS
15. Allocations.
(a) Allocation of Profits and Losses.
(i) Profits and Losses of the Partnership shall
be determined for each fiscal year of the Partnership in accordance with the
cash
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method of accounting, with such exceptions thereto as are set forth in this
Agreement, and otherwise in accordance with generally accepted accounting
principles applied in a consistent manner.
(ii) Except as otherwise provided, the
Partnership's Losses, if any, arising in a fiscal year shall be allocated among
the Partners as follows:
(1) FIRST: To the extent of the
aggregate positive Capital Account balances of the Partners as of the end of the
fiscal year, Pro Rata to the Partners taking into account any changes in
Partnership Percentage Interests during the fiscal year.
(2) SECOND: Pro Rata, to the General
Partners.
(iii) Profits arising in a fiscal year shall be
allocated among the Partners as follows:
(1) FIRST: To the General Partners
until Profits allocated to the General Partners during the term of the
Partnership pursuant to this Section 15(a)(ii)(1) equal Losses allocated to the
General Partners during the term of the Partnership pursuant to Section
15(a)(ii)(2) then
(2) SECOND: To the Partners Pro Rata
taking into account any changes in Partnership Percentage Interests during the
fiscal year.
(b) Allocation of Taxable Income and Taxable Loss.
(i) Except as otherwise provided in this section
15(b), allocations of tax items among the Partners shall be consistent with
corresponding book (Profits and Losses) items (if any). For tax purposes,
Profits and Losses, or any item thereof, shall be appropriately adjusted to
reflect Taxable Income and Taxable Loss, or any item thereof, as determined
under the Code and shall be allocated among the Partners in such a manner as to
comply with the provisions of the Code and Regulations thereunder (including, if
necessary, the "minimum gain chargeback provisions" of the Regulations under
Section 704 of the Code). For example, any gain or loss recognized by the
Partnership with respect to property contributed to the Partnership by a Partner
shall be shared among the Partners so as to take account of the variation, if
any, between the basis of the property to the Partnership and its fair market
value at the time of contribution or revaluation, whichever is applicable, so as
to comply with the requirements of Section 704 of the Code. Thus, for example,
if a Partner contributes Property to the Partnership whose agreed fair market
value exceeds its adjusted basis in the hands of the contributing Partner
("built-in gain"), and there have been no events giving rise to a revaluation,
built-in gain with respect to such contributed Property shall first be
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allocated to such contributing Partner when the Partnership recognizes gain upon
a disposition of such contributed Property, but not in an amount in excess of
such built-in gain; the remaining balance of such recognized gain, if any, shall
be allocated among the Partners as set forth herein. The allocation of built-in
gain to a contributing Partner shall not increase such Partner's Capital
Account, because such gain was already taken into account when the built-in gain
property was contributed to the Partnership. A Partner who contributes property
other than cash shall provide the Managing General Partner with information
necessary to verify the contributing Partner's adjusted tax basis in the items
of property contributed by him to the Partnership.
(ii) Generally, except as provided in section
15(b)(i), Taxable Income and Taxable Loss (and each such income and loss item)
shall be allocated Pro Rata among the Partners. In the event, however, that
non-Pro Rata distributions of property are made to a Partner or the net proceeds
from the sale of property are distributed non-Pro Rata to a Partner, Taxable
Income and Taxable Loss derived from such distributions or sales shall be
allocated 100% to such Partner, subject only to such modifications as are
necessary to comply with Section 704 of the Code. In addition, no allocations of
Taxable Loss shall be made to a Limited Partner that would create a deficit
balance in the Limited Partner's Capital Account.
ARTICLE V
DISTRIBUTIONS, WITHDRAWALS AND LOANS
16. Distributions.
(a) Cash Flow Distributions. Cash Flow shall be
distributed Pro Rata among the Partners.
(b) Partial or Complete Withdrawal by a Partner From the
Partnership.
(i) In the event of a partial or complete
withdrawal of a Partner from the Partnership pursuant to Article VIII, the
Managing General Partner shall, as promptly as is reasonably possible,
distribute to the Partner any assets then owned by the Partnership that were
previously contributed by such Partner to the Partnership but this distribution
shall be limited to the extent it would cause the Capital Account of such
Partner to be negative. In addition to the preceding amounts, if the Partner has
a positive Capital Account balance, then the Partnership shall distribute to the
Partner his Pro Rata share of the Marketable Securities of PowerCerv Corporation
if such shares were not contributed by other Partners, cash and other readily
divisible assets of the Partnership. The withdrawing Partner shall also be
entitled to receive cash equal in value to his Pro
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Rata share of the fair market value (as reasonably determined by the Managing
General Partner) of any non-readily divisible assets owned by the Partnership.
The Managing General Partner shall, as promptly as possible, distribute this
additional amount of cash, if any, to the withdrawing Partner. Cash
distributions to the withdrawing Partner shall be reduced by such Partner's Pro
Rata share of the liabilities of the Partnership and by any expenses incurred by
the Partnership with respect to the withdrawal of the Partner.
(ii) A Partner may request that all or a portion
of the Marketable Securities subject to the requested withdrawal be sold by the
Partnership and the net proceeds (after selling and other expenses) distributed
as directed by him. In the event that the Managing General Partner is unable or
unwilling to sell these Marketable Securities, it shall distribute them to the
Partner, unless it is notified by the Partner to cancel the withdrawal.
(iii) The Managing General Partner shall not be
required to distribute to the requesting Partner any assets that the Partnership
is legally restricted or prohibited from distributing to the Partner, unless
steps can be taken to remove the restriction or prohibition; in which case the
requesting Partner shall be charged with the expense of removing such
restriction or prohibition. Any distribution hereunder shall also be subject to
the limitations set forth in sections 11(c) and 17, respectively.
(c) Liquidating Distributions. The net proceeds from
liquidation of the Partnership's assets pursuant to its dissolution, winding-up,
and termination shall be distributed, and all Profits and Losses resulting from
the liquidation of the Partnership Property shall be allocated, among the
Partners in the proportions and orders of priority specified in this section
16(c).
(i) The Liquidator shall distribute the net
proceeds from liquidation of the Partnership's assets as follows:
(1) FIRST: To pay all the liabilities
of the Partnership that are then due and payable, except for both Capital
Contributions of Partners and liabilities to the Partners, in the order of
priority required by Nevada law; then
(2) SECOND: To establish any reasonable
reserve that the Liquidator may determine is required for unpaid, future, or
contingent liabilities or obligations of the Partnership; then
(3) THIRD: To pay all liabilities of
the Partnership to the Partners; Pro Rata according to the amounts of their
respective liabilities; then
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(4) FOURTH: To the Partners to the
extent of any positive balances in their Capital Accounts, Pro Rata according to
the amounts of their respective positive balances; then
(5) FIFTH: Any remaining net proceeds
shall be distributed Pro Rata among the Partners.
(ii) Any Profits and Losses and Taxable Income
and Taxable Loss resulting from the disposition of the Partnership's assets in
the process of liquidation shall be allocated among the Partners in the manner
provided in section 15. Any Property distributed in kind in the liquidation
shall be valued and treated as if the Property were sold and the cash proceeds
were distributed. The Profits and Losses arising from the constructive sale of
the Property described in the preceding sentence shall be allocated among the
Partners in the manner provided in section 15.
17. Limitation on Distributions to Partners. A Partner may receive
distributions from the Partnership only to the extent the Partnership's total
assets exceed its total liabilities, other than liabilities to the Partners on
account of their Capital Contributions.
ARTICLE VI
AUTHORITY, DUTIES, AND LIABILITIES OF PARTNERS
18. Duties of Managing General Partner. Except as provided in
section 56, the Managing General Partner, and no other Partner, shall manage the
affairs of the Partnership, shall apply himself diligently for the Partnership,
and shall devote to the Partnership such time as is necessary and appropriate to
manage the business of the Partnership. The Managing General Partner is not
required to devote all its business time to the Partnership, and it may engage
in other business ventures and employment, including those in competition with
the Partnership. In the performance of its duties, the Managing General Partner
may hire employees and agents of the Partnership and generally shall supervise
and direct all the daily operations of the Partnership.
19. Managing General Partner's Fees and Expenses.
(a) Fees to Managing General Partner. In consideration
for performing services described herein, the Managing General Partner may be
paid a fee as agreed to by a Majority in Interest. Such fees shall be deemed
earned when the services have been performed and, regardless of when paid, shall
be non-executory from the date earned and shall be the obligation of the
Partnership from and after that date.
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(b) Expenses. Except as otherwise provided herein, the
Partnership shall pay all expenses of the Partnership (which expenses may be
either billed directly to the Partnership or reimbursed to the Managing General
Partner) which may include, but are not limited to: (i) all costs of borrowed
money, taxes and assessments on the Property and other taxes applicable to the
Partnership; (ii) all costs for goods and materials, whether purchased by the
Partnership directly or by the Managing General Partner on behalf of the
Partnership; (iii) legal, audit, accounting, brokerage and other professional
fees; (iv) fees and expenses paid to independent contractors, mortgage bankers,
brokers, insurance brokers and other agents; (v) expenses of organizing,
revising, amending, converting, modifying or terminating the Partnership; (vi)
expenses in connection with distributions made by the Partnership to, and
communications and bookkeeping work necessary in maintaining relations with,
Partners; (vii) expenses in connection with preparing and mailing reports to
Partners; (viii) costs of any accounting, statistical or bookkeeping equipment
necessary for the maintenance of the books and records of the Partnership; (ix)
the cost of preparation and dissemination of informational material and
documentation relating to the Partnership; (x) except with respect to litigation
solely among the Partners as such, costs incurred in connection with any
litigation in which the Partnership is involved, as well as in the examination,
investigation or other proceedings, conducted against the Partnership by any
regulatory agency, including legal and accounting fees incurred in connection
therewith; (xi) costs of any computer services or equipment or services of
personnel used for or by the Partnership; and (xii) expenses of professionals
employed by the Partnership in connection with any of the foregoing, including
attorneys, accountants and appraisers.
20. Authority of Managing General Partner. Except as otherwise
provided herein, the Managing General Partner may bind the Partnership to do all
acts that are necessary, appropriate, or incidental to the accomplishment of the
purposes of the Partnership. Any person dealing with the Partnership or the
Managing General Partner may rely on a certificate signed by the Managing
General Partner as to the identity of any Partner, the existence or absence of
any fact or condition that is necessary to permit action by either the
Partnership or the Managing General Partner or germane in any other way to the
affairs of the Partnership, and the persons who are authorized to execute and
deliver any documents or instruments of or on behalf of the Partnership. Without
limiting the generality of the foregoing, the Managing General Partner is
specifically authorized to do the following:
(a) to negotiate and enter into leases and agreements
with land or building owners or other Persons, and to incur obligations for, and
on behalf of, the Partnership in connection with Partnership business;
(b) to borrow money on behalf of the Partnership and, as
security therefor, to encumber the Property;
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(c) to prepay, in whole or in part, refinance, increase,
modify or extend any obligation affecting the Property;
(d) to sell, exchange, convey and lease the Property;
(e) to employ from time to time, at the expense of the
Partnership, other Persons required for the operation and management of the
Partnership business, including accountants, attorneys and others, who may be
Partners, on such terms and for such compensation as the Managing General
Partner determines to be reasonable and this may include Persons which are
Affiliates;
(f) to pay all attorney's and accountant's fees and other
costs incurred in connection with the formation of the Partnership business and
the completion of all steps necessary or advisable for the Partnership to comply
with applicable laws;
(g) to assume the responsibilities imposed on the
Managing General Partner by the Act;
(h) to compromise, arbitrate or otherwise adjust claims
in favor of or against the Partnership and to carry such insurance as the
Managing General Partner considers advisable;
(i) to exercise the voting rights associated with the
securities and other Property owned by the Partnership;
(j) to commence or defend litigation with respect to the
Partnership or any assets of the Partnership as the Managing General Partner
considers advisable, at the expense of the Partnership;
(k) to make, execute, acknowledge and deliver documents
of transfer and conveyance and any other instruments that may be necessary or
appropriate to carry out its powers; and
(l) to do all such acts and take all such proceedings and
execute all such rights and privileges, although not specifically mentioned
herein, as the Managing General Partner considers necessary to conduct the
business of the Partnership and to carry out the purposes of the Partnership.
Notwithstanding the foregoing, the Managing General Partner
shall not take any of the following actions without the consent of a Majority in
Interest:
(1) assign all or any part of the property for
the benefit of its creditors or confess a judgment against the Partnership;
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(2) take any action in contravention of the Act,
the certificate of limited partnership or this Agreement;
(3) sell, lease, transfer, assign, pledge or
encumber the property of the Partnership (except with respect to transactions to
which section 16(b)(ii), section 32 or section 37 applies);
(4) loan an amount of money in excess of $10,000
to a Partner; or
(5) admit a Person as a General Partner of the
Partnership.
21. Special Limitation. During the period the Partners have
determined that the Partnership will only be availed of only for investment
purposes, which shall be the period, if any, contemplated by Section 6(c),
except to the extent section 16(b)(ii) applies, the Managing General Partner may
not purchase, sell, or exchange Marketable Securities without the consent of the
Partners to whom the Marketable Securities are deemed owned or allocated for
federal income tax purposes, but the Managing General Partner shall have voting
rights and all other aspects of management and control over such Marketable
Securities.
22. Dealing with Affiliates. The Managing General Partner may
employ and enter into contracts and other arrangements with any Person,
including an Affiliate, and may obligate the Partnership to pay reasonable
compensation for services rendered by such Persons on terms that, in the
judgment of the Managing General Partner, are not less favorable to the
Partnership than would be available from an unrelated party.
23. Indemnification of General Partner. The Managing General
Partner need not secure the performance of its duties by bond or otherwise. A
General Partner is not liable, responsible, or accountable in damages or
otherwise to any Partner or to the Partnership for any act taken or omission
made in good faith on behalf of the Partnership and in a manner that such
General Partner reasonably believes to be within the scope of the authority
granted to it by this Agreement and in the best interest of the Partnership,
except for gross negligence or willful misconduct. Any loss, expense (including
attorneys' fees) or damage incurred by a General Partner by reason of any act or
omission by it in good faith on behalf of the Partnership and in a manner that
it reasonably believes to be within the scope of the authority granted to it by
this Agreement and in the best interest of the Partnership (but not, in any
event, any loss, expense or damage incurred by a General Partner by reason of
gross negligence or willful misconduct) shall be paid to the indemnified General
Partner from the Partnership's assets, to the extent available.
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24. Liability of Limited Partners. The liability of each Limited
Partner is limited to its Capital Contributions. Except as provided by the Act,
a Limited Partner is not required to contribute money to, or for the liabilities
of the Partnership, and is not personally liable for any loss, liability or
other obligations of the Partnership.
25. Authority of Limited Partners and Non-Managing General
Partners. The Limited Partners shall not participate in the management of, or
have any control over, the business or policies of the Partnership, nor any
control over Marketable Securities, except as required by the Act or permitted
by section 20 and section 56, and the Limited Partners shall not transact any
business in the name of the Partnership. Notwithstanding the foregoing, the
Partners may make the election set forth in Treas. Reg. ss. 1.761-2 to have the
Partnership excluded from the provisions of Subchapter K of Chapter 1 of the
Code. In the event a Partner ceases (whether through removal, death, or
resignation) to serve as Managing General Partner, a Majority in Interest of the
Partners shall appoint another Partner to serve as the Managing General Partner.
ARTICLE VII
TRANSFER OF PARTNERSHIP INTERESTS
26. Limited Partners. A Limited Partner shall not pledge, encumber
or hypothecate his interest in the Partnership without the consent of the
Managing Partner. Otherwise, subject to sections 28 and 29, and only if the
Managing General Partner consents, a Limited Partner may make an Assignment of a
Limited Partnership Interest. However, an Assignment does not relieve the
Limited Partner of his obligations and liabilities under this Agreement, or
constitute the assignee a Limited Partner, or confer on the assignee any
Partnership Rights. An assignee of a Limited Partner's Partnership Interest may
be admitted and substituted as a Limited Partner and acquire Partnership Rights
only upon the satisfactory completion of the requirements specified in section
29. The failure or refusal of the Managing General Partner to consent to the
admission of an assignee as a Limited Partner does not affect the right of the
assignee to the Partnership Interest of his predecessor in interest.
27. General Partner. Subject to section 28, a General Partner may
make an Assignment, directly or indirectly, of all or any part of its
Partnership Interest. However, an Assignment does not relieve such General
Partner of its obligations and liabilities under this Agreement, or constitute
the assignee a General Partner, or confer on the assignee any Partnership
Rights. Subject to section 28, and only if a Majority in Interest consents, a
General Partner may make an Assignment of both its Partnership Interest and its
Partnership Rights if the assignee assumes in writing all such General Partner's
obligations and liabilities under this Agreement and if all the applicable
requirements of section 29 are satisfied. Upon compliance with the immediately
preceding sentence, an assignee of such General Partner has
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all the rights and powers granted to such General Partner under this Agreement
and has all the obligations and liabilities of such General Partner under this
Agreement.
28. Restriction on Transfer. Notwithstanding any other provision
of this Agreement, an assignment of a Partnership Interest shall not be made,
and consent thereto shall be withheld:
(a) Unless the Managing General Partner has
satisfied itself (by seeking advice of legal counsel or otherwise, with any
resulting Partnership expense to be reimbursed by the assignor) that the
assignment will not have any significant adverse tax effect upon the Partnership
or the other Partners;
(b) Unless the Managing General Partner has
satisfied itself (by advice of legal counsel, with any resulting Partnership
expense to be reimbursed by the assignor) that the proposed assignment may be
made without registration under any applicable securities law; and it will not
violate any applicable securities law (including investor suitability
standards);
(c) If the Assignment is sought to be made to:
(i) a minor or incompetent, except if
made by will or intestate succession, or
(ii) to a Person which is not an
Affiliate.
29. Admission of Substitute Partner. Subject to the other
provisions of this Agreement, an assignee of a Partnership Interest may be
admitted as a Partner and granted Partnership Rights only if:
(a) the Assignment is made pursuant to a written
instrument in a form satisfactory to the Managing General Partner and specifies
the intention of the assignor that the assignee be substituted as a Partner;
(b) the Managing General Partner consents to the
admission by executing two counterparts of this Agreement that evidences the
Partnership Rights of the assignee, and if the assignee is to be admitted as a
Partner a Majority in Interest consent to the admission;
(c) the assignee accepts, signs and agrees to be
bound by this Agreement, by executing two counterparts of this Agreement,
including an amended EXHIBIT A, and such other documents or instruments as the
Managing General Partner requires to effect the admission of the assignee as a
Partner;
(d) the assignee provides the Managing General
Partner with evidence satisfactory to it of the assignee's authority to become a
Partner under the terms of this Agreement;
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(e) the assignee pays all filing, publication
and other costs (including reasonable attorneys' fees) incurred by either the
Partnership or the Managing General Partner in connection with the admission and
substitution of the assignee as a Partner.
Notwithstanding an assignee's satisfaction of any or all of
the conditions specified above, the Managing General Partner, in its absolute
discretion, may refuse to consent to the assignee's admission as a Partner, in
which event the assignee will not obtain any Partnership Rights, but will retain
only the rights of an assignee under sections 26 or 27.
30. Rights of Partner After Assignment and Substitution. Upon the
Assignment of all his Partnership Interest, and the admission of a substitute
partner, a Partner shall cease to be a Partner and to have any Partnership
Rights.
31. Allocations and Distributions After Assignment. For the
purposes of allocations of Profits and Losses, Taxable Income or Taxable Loss,
and distributions, an Assignment of a Partnership Interest is effective as to
the Partnership, and shall be reflected in the records of the Partnership, as of
the date that the Managing General Partner receives written notice of the
Assignment. The Taxable Income or Taxable Loss, Profits and Losses and cash and
other distributions in respect of the assigned Partnership Interest with respect
to the fiscal year in which the Assignment of the Partnership Interest occurs
shall be divided between the assignor and the assignee according to the method
provided to the Managing General Partner by the assignor and the assignee, so
long as such method is permitted under the Code and does not adversely affect
the other Partners or the Partnership from a tax or economic perspective. The
method of allocation shall be provided to the Managing General Partner in the
written notice of the Assignment. Any additional costs for computing the
allocations hereunder shall be paid by the assignor or assignee, as the case may
be. The written notice referred to above shall also contain information as to
whether the assignor or assignee shall be responsible for the payment of such
additional cost, if any.
ARTICLE VIII
RETIREMENT, WITHDRAWAL, OR REMOVAL OF PARTNERS
32. Withdrawal of Limited Partner.
(a) A Limited Partner may, at any time, withdraw
all or part of his Partnership Interest from the Partnership by providing
written notice thereof to the Managing General Partner. Immediately after the
receipt of such written notice from a Partner, the Managing General Partner
shall make the appropriate distributions to the Partner in partial or complete
redemption of his Partnership Interest as set forth in section 16(b).
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(b) A partial withdrawal by a Partner shall be
made in increments of one-tenth (1/10th) of one percent (1%) of a Percentage
Interest. The written notice of withdrawal from a Partner to the Managing
General Partner must state whether the withdrawal is a partial or complete
withdrawal and, if a partial withdrawal, must state the Percentage Interest that
is being withdrawn. A Partner shall not make a partial withdrawal that will
result in his remaining Percentage Interest becoming less than one-tenth
(1/10th) of one percent (1%) immediately after the withdrawal.
(c) The Managing General Partner agrees that it
will fully cooperate to the extent permitted by law to accomplish a withdrawal
requested by a Partner hereunder. It also agrees that it will not take any
action that will obstruct or render impossible the application of this section
32 (such as to pledge the Partnership's Marketable Securities as collateral to
creditors of the Partnership), unless such action is essential to accomplish the
purposes of the Partnership.
(d) The withdrawal of a Partner does not
dissolve or terminate the Partnership unless there is only one Partner then
remaining. The remaining Partners shall amend this Agreement to reflect the
partial or complete withdrawal of the Partner from the Partnership, if and to
the extent necessary.
(e) Upon the giving of the notice of withdrawal
pursuant to Paragraph (a), and upon the dissolution of the Partnership, the
voting rights with respect to any stock of PowerCerv Corporation allocable to
the Percentage Interest being withdrawn shall be vested in the withdrawing
Partner or Partners, and the Partnership shall have no voting rights with
respect to such stock.
(f) The complete withdrawal of all the Limited
Partners shall constitute a dissolution of the Partnership pursuant to Article
IX.
33. Retirement, Removal, or Withdrawal of Managing General
Partner. The Managing General Partner may not withdraw all of its General
Partnership Interest and the non-managing General Partner may completely
withdraw his General Partnership Interest without the consent of a Majority in
Interest. A Majority-In-Interest may remove the Managing General Partner upon
written notice which shall take effect upon delivery. The Retirement, removal,
or withdrawal of the Managing General Partner shall dissolve the Partnership
unless a General Partner is appointed to serve in its place. Notwithstanding the
foregoing or anything else in this Agreement to the contrary, a merger,
consolidation, or reorganization of a Managing General Partner who is not a
natural person, or a sale of all or substantially all its assets that includes
its Partnership Interest, is not a Retirement or withdrawal of such Managing
General Partner if the resulting, surviving or acquiring Person is an Affiliate
and becomes substituted as the Managing General Partner of the Partnership. The
resulting, surviving or acquiring Person is substituted as the Managing General
Partner without further act if it gives notice of the substitution to the
Partners before the effective date of
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the merger, consolidation, reorganization or sale. Each Partner consents to the
admission and substitution of such substitute Managing General Partner pursuant
to this section 33, and no further consent or approval of any Partner is
required.
34. Retirement of Limited Partner. The Retirement of a Limited
Partner does not dissolve or terminate the Partnership except as provided in
section 36(g), but the legal or personal representatives, heirs, successors,
assignees, or stockholders of a Retired Limited Partner, subject to section 26,
shall succeed to the Partnership Interests of the Retired Limited Partner and
may make an Assignment of the Partnership Interests within the limitations set
forth in this Agreement.
35. Rights of Partner After Retirement, Removal, or Withdrawal. A
Partner ceases to have any Partnership Rights upon his Retirement, removal, or
complete withdrawal from the Partnership. However, until the appropriate
distributions, if any, are made to a Retired, removed, or withdrawn Partner for
his Partnership Interest, the Retired, removed, or withdrawn Partner is entitled
to receive the allocations of Profits and Losses, Taxable Income or Taxable Loss
and all distributions referred to in section 16 applicable to his Partnership
Interest.
ARTICLE IX
DISSOLUTION
36. Events of Dissolution. The Partnership shall be dissolved, and
unless reconstituted shall be terminated, upon:
(a) the expiration of its term;
(b) the vote of a Majority in Interest to
dissolve the Partnership;
(c) the Partnership being adjudicated insolvent
or bankrupt;
(d) the Retirement, removal, or withdrawal of
the last General Partner;
(e) the death of Roy E. Crippen III; or
(f) the sale of all or substantially all of the
Partnership's Property.
(g) the complete withdrawal of the Limited
Partners.
37. Winding-Up and Distributions. Upon the dissolution of the
Partnership pursuant to section 36, and unless the Partnership is reconstituted,
the winding-up of the Partnership's business and the liquidation and
distribution of Partnership assets must be carried out with due diligence and in
a timely manner,
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and consistent with both the requirements of applicable law and the following
provisions of this section:
(a) The Managing General Partner shall be
responsible for taking all actions relating to the winding-up, liquidation, and
distribution of assets of the Partnership, unless its Retirement, removal, or
withdrawal causes the dissolution, in which case the fiscal agent, liquidator,
or receiver appointed (without judicial action) by a Majority in Interest shall
be so responsible. The Managing General Partner, or the appointed fiscal agent,
liquidator, or receiver, is referred to in this Agreement as the "Liquidator." A
Limited Partner can be appointed to be the Liquidator. The Liquidator shall file
all certificates or notices of the dissolution of the Partnership as required by
law. Upon the complete liquidation and distribution of the Partnership assets,
the Partnership shall terminate, and the Liquidator shall execute, acknowledge,
and cause to be filed all certificates and notices required by law to terminate
the Partnership.
(b) The Liquidator shall proceed without
unnecessary delay to sell and otherwise liquidate the Partnership's assets.
Unless directed otherwise by a Majority in Interest, all Marketable Securities,
including interests in PowerCerv Corporation, cash and other readily divisible
or fungible assets of the Partnership shall be distributed directly to the
Partners in the manner set forth in section 16(c)(i). The Liquidator shall
promptly sell the other assets of the Partnership unless it determines that an
immediate sale of part or all of such assets would cause undue loss to the
Partners. In such case, the Liquidator, to avoid such loss, may defer the
liquidation of the Partnership assets for a reasonable time, except for those
liquidations that are necessary to satisfy the debts and liabilities of the
Partnership to persons and parties other than the Partners. The Liquidator shall
distribute the proceeds from the liquidation of the Partnership's assets as
provided in section 16(c).
(c) Upon the dissolution of the Partnership
pursuant to section 36, and unless the Partnership is reconstituted, the
Liquidator shall cause the accountants for the Partnership to prepare within
ninety (90) days after the occurrence of the event of dissolution, and
immediately thereafter shall furnish to each Partner, a statement setting forth
the assets and liabilities of the Partnership as of the date of its dissolution.
The Liquidator, promptly following the complete liquidation and distribution of
the Partnership's assets, shall cause the Partnership's accountants to prepare,
and the Liquidator shall furnish to each person who is a Partner immediately
before the dissolution, a statement showing the manner in which the Partnership
assets were liquidated and distributed.
38. Distribution of Liquidation Proceeds and Assets and Allocation
of Gains and Losses. The net proceeds from liquidation of the Partnership's
assets and the unliquidated Property of the Partnership shall be distributed,
and all Profits and Losses resulting from the liquidation of the Partnership
shall be
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allocated, among the Partners in the proportions and orders of priority
specified in section 16(c).
39. Limitation of Liability of Partners. Upon the dissolution of
the Partnership and the distribution of the net liquidation proceeds pursuant to
section 36 and section 16(c), each Partner shall look solely to the assets of
the Partnership for the payment of his unreturned Capital Contributions, and if
the Partnership's assets remaining after the payment or discharge of the debts
and liabilities of the Partnership are insufficient to pay the full amount of
the unreturned Capital Contributions of each Partner, the Partner shall have no
recourse or claim against any Partner or the Partnership with respect to its
unreturned Capital Contributions, except for claims for fraud, gross negligence,
or breach of fiduciary duty.
40. Waiver of Right of Partition of Assets. Each Partner, and for
his heirs, successors, and assigns, waives his right to the partition of the
assets of the Partnership upon the dissolution and liquidation of the
Partnership.
ARTICLE X
ACCOUNTING YEAR, BOOKS, RECORDS, AND REPORTS
41. Books and Records. The Managing General Partner shall maintain
at the principal office of the Partnership a complete and accurate set of books
of records and accounts, in which it shall make full and complete entries of all
dealings or transactions relating to the Partnership's business and where it
shall keep all supporting documentation of transactions with respect to the
conduct of the Partnership's business. Each Partner or his duly authorized
representative, upon five days' advance notice to the Managing General Partner,
may examine during normal business hours the books of the Partnership and all
other records and information concerning the operation of the Partnership.
42. Reports. If requested by a Partner at least 30 days prior to
the end of a quarter, within 60 days after the end of each fiscal quarter in
each fiscal year of the Partnership, the Managing General Partner shall cause to
be prepared and sent to each Partner a balance sheet, income statement and cash
flow statement of the Partnership for and as of the end of that fiscal quarter,
in each case unaudited but accompanied by a report of the activities of the
Partnership for that quarter. Within 90 days after the end of each fiscal year
of the Partnership, the Managing General Partner shall cause to be prepared and
sent to each Partner a financial report consisting of (a) a balance sheet as of
the end of the fiscal year; (b) statements of income, partner's equity, and
changes in financial position for the fiscal year; (c) if requested by a
Partner, the opinion of the Partnership's certified public accountant concerning
the foregoing financial statements; (d) a summary of the Partnership's
activities for the fiscal year; (e) a statement showing the distributions to
each Partner during the fiscal year and identifying any
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distributions which constitute a return of Capital Contribution; and (f) a
statement showing the amount of Taxable Income or Taxable Loss, and listing each
item of income, gain, loss, deduction, or credit allocated or charged against
the Partner for federal and state income tax purposes.
43. Bank Accounts. The Managing General Partner shall maintain the
bank accounts of the Partnership in such financial institutions as the Managing
General Partner considers appropriate. The consent of the Managing General
Partner is required to open an account and to determine who is authorized to
withdraw funds therefrom. The Managing General Partner shall make or permit
withdrawals from the Partnership's bank accounts on the signature of the
Managing General Partner.
44. Tax Elections. If the Partnership has not made the election
set froth in Treas. Reg. ss. 1.761-2, or if Subchapter K of Chapter 1 of the
Code applies to the Partnership, the Partnership shall file an election under
Section 754 of the Code, relating to the optional adjustment to the basis of
partnership property, at the first time it is permitted to do so after the
beginning of the term of this Partnership. The Managing General Partner shall
make or waive, at its discretion, all other tax elections required or permitted
to be made by the Partnership under the Code.
45. Accounting Method and Fiscal Year. The Managing General
Partner shall maintain the Partnership records and books of accounts in
accordance with the cash method of accounting, with such modifications as are
set forth in this Agreement, and otherwise in accordance with generally accepted
accounting principles consistently applied. The fiscal year of the Partnership
is the calendar year.
ARTICLE XI
GENERAL PROVISIONS
46. Power of Attorney. Each Limited Partner (including each
substitute Limited Partner), by executing a counterpart of this Agreement,
irrevocably constitutes and appoints, with full power of substitution, the
Managing General Partner as his true and lawful attorney-in-fact, with full
power and authority in his name, place and stead to make, execute, acknowledge,
deliver, swear to, publish, record and file:
(a) any certificate or other instrument that may
be required to be filed, published or recorded by the Partnership under the Act
or any other law of Nevada or that the Managing General Partner considers
advisable to file, publish or record;
(b) all documents (including schedules and
amendments to this Agreement) that may be required to effect the continuation or
reinstatement of
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the Partnership, admit an additional or substitute Partner (other than any
approval required of Limited Partners), reduce the Capital Contributions of a
Partner, or dissolve and terminate the Partnership; and
(c) all amendments to this Agreement adopted in
accordance with section 54.
The foregoing power of attorney is coupled with an interest, resulting from each
Limited Partner's reliance on the power of the attorney-in-fact to act as
contemplated by this Agreement for the purposes described in this section 46.
The foregoing power of attorney shall survive the Retirement of a Limited
Partner and the Assignment by any Limited Partner of all or any part of his
Partnership Interest, except that when an assignee is granted Partnership Rights
and admitted as a substitute Limited Partner the power of Attorney of the
assignor Limited Partner shall survive the Assignment only for the purpose of
enabling the Managing General Partner to make, execute, acknowledge, deliver,
swear to, publish, record and file every instrument necessary to effect the
substitution.
47. Partnership Contracts. The Managing General Partner may enter
into agreements and contracts on behalf of the Partnership only if they are in
writing and clearly indicate to the other parties that the Partnership is a
general partnership of which the Managing General Partner is a general partner.
48. Conveyances. Subject to section 20, the Managing General
Partner may sign any deed, mortgage, lease, bill of sale, security agreement,
pledge, contract or other instrument or commitment purporting to convey or
encumber any of the Partnership's Property or any interest therein, whether now
or subsequently owned or leased at any time by the Partnership, and no other
signature is required.
49. Notices. To be effective, a notice required or permitted by
this Agreement must be in writing, or by telegram, telex or telecopy if promptly
confirmed in writing. A notice is given when delivered or, if mailed, when
deposited in a United States postal service letterbox to be sent by first-class,
postage-prepaid, certified mail, with return receipt requested (whether or not
the sender receives the return receipt), and addressed, if to a Partner, at his
registered address listed on EXHIBIT A and, if to the Managing General Partner
or the Partnership, to the attention of such Managing General Partner at the
Partnership's principal business office.
50. Consents. Any consent required by this Agreement may be given
as follows:
(a) by a writing given by the consenting Partner
and received by the Managing General Partner or other appropriate recipient at
or before the occurrence of the action or other thing for which the consent was
solicited, unless the consent is nullified by:
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(i) A writing from the consenting
Partner that is received by the Managing General Partner before the occurrence
of the action or other thing for which the consent was solicited; or
(ii) the negative vote by the consenting
Partner at any meeting called for the purpose of considering the action or other
thing.
(b) by the affirmative vote of the consenting
Partner at any meeting called for the purpose of considering the action or other
thing for which the Partner's consent was solicited.
51. Meetings. The Managing General Partner may call meetings of
the Partners for any purpose, at any, time. The Managing General Partner shall
call a meeting of the Partners within 30 days after he receives from a Majority
in Interest a written request for a meeting, stating the purpose of the
requested meeting and the matters proposed for consideration. Meetings of the
Partners may be held at such time, date and place as the Managing General
Partner designates. The Managing General Partner shall give notice of any
meeting of the Partners not less than ten nor more than 60 days before the date
of the meeting, to each Partner at his registered address listed on EXHIBIT A.
The notice shall state the time, date and place of the meeting, the purpose of
the meeting and the Partner at whose direction or request the meeting is called.
Except in the case of emergency, meetings of the Partnership shall be held in
Nevada. If a meeting is adjourned to another time or place, notice of the
adjourned meeting is not required if the time and place of the adjournment is
announced at the called meeting. The presence in person or by proxy of a
Majority in Interest constitutes a quorum at a meeting. Any notice of a meeting
required by this section may be waived in writing at, before or after the
meeting and shall be deemed to be waived by each Partner who is present in
person or by proxy at the meeting. Only those persons who are Partners at the
close of business on the day before the meeting are entitled to vote at the
meeting. Any Partner entitled to vote at a meeting may authorize any person to
act for him by written proxy if a copy of the proxy is delivered to the Managing
General Partner before the commencement of the meeting. To be effective, a proxy
must be signed by the Partner (and, if applicable, each co-owner) or his duly
appointed attorney-in-fact, and no proxy shall be valid for more than 11 months
after its date. A proxy is revocable at the pleasure of the Partner granting it.
52. Binding Effect; Counterparts. The covenants and agreements
contained in this Agreement are binding on, and inure to the benefit of, the
legal and personal representatives, heirs, successors and permitted assignees of
the parties to this Agreement. The parties may execute this Agreement in any
number of counterparts, each of which will be an original, but all of which
together will constitute one and the same agreement.
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53. Choice of Law. This Agreement and the rights and obligations
of the Partners under it are governed by, and construed and enforced in
accordance with, the laws of Nevada.
54. Complete Agreement; Modification. This Agreement contains the
final, complete and exclusive expression of the understanding among the Partners
with respect to the Partnership and its purposes and objectives and supersedes
any prior or contemporaneous agreement or representation, oral or written, by
any of them. Except to admit a new or a substitute Partner or to reflect the
withdrawal or Retirement of a Partner, this Agreement and every provision of it
may be modified or amended only by an agreement in writing signed by or on
behalf of all Partners.
55. Evidence of Partnership Interests. The Partnership Interest of
each Partner is evidenced exclusively by a counterpart of this Agreement
(including EXHIBIT A) that has been signed and dated by the Managing General
Partner.
56. Tax Matters Partner. The Managing General Partner or its
designee shall be the "tax matters partner" of the Partnership for federal
income tax purposes. Pursuant to Section 6223(c)(2) of the Code, upon receipt of
notice from the Internal Revenue Service of the beginning of an administrative
proceeding with respect to the Partnership, the General Partner, as the tax
matters partner, shall furnish the Internal Revenue Service with the names,
addresses, and Percentage Interests of each of the Partners. The General Partner
agrees not to enter into a settlement agreement pursuant to Section 6224 of the
Code without providing at least 30 days advance written notice to each Partner.
As tax matters partner, the General Partner shall have absolute discretion
regarding whether to seek judicial review of any administrative determination
and, if it determines to seek judicial review of Internal Revenue Service action
pursuant to Section 6226 of the Code, then the General Partner shall select the
judicial forum for such review. The tax matters partner shall receive no
compensation for its services as such. The Partnership shall bear all third
party costs and expenses incurred by the tax matters partner in performing its
duties as such. Nothing herein shall be construed to restrict the Partnership
from engaging an accounting firm or law firm to assist the tax matters partner
in discharging its duties hereunder.
57. Gender and Number. As used in this Agreement, the masculine
gender includes the feminine and neuter, and the singular includes the plural.
58. Title. Title to any Property acquired by the Partnership shall
be taken in the name of the Partnership.
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IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each Partner as of the date indicated in the first paragraph of this Agreement.
MANAGING GENERAL PARTNER:
/s/ Roy E. Crippen III
-------------------------------------------
R.C.F., Inc.
LIMITED PARTNER:
/s/ Roy E. Crippen III
-------------------------------------------
Roy E. Crippen III
ROY EDWARD CRIPPEN III (1995) ANNUITY TRUST
By:/s/ Roy E. Crippen III
----------------------------------------
Roy E. Crippen III, as Trustee
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EX-4
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g72054a1ex4.txt
STOCK OPTION AGREEMENT
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EXHIBIT 4
NON-QUALIFIED STOCK OPTION AGREEMENT
Non-Qualified Stock Option Agreement (this "Option
Agreement"), dated as of February 10, 2000 (the "Grant Date"), between IBS
Interactive, Inc. (the "Company") and Roy E. Crippen III (the "Recipient").
WHEREAS, the Company intends to provide an incentive to the
Recipient in order to induce the Recipient to become an employee of the Company,
by providing the Recipient with opportunities to purchase shares of Common Stock
(as defined herein);
WHEREAS, the Board of Directors of the Company (the "Board")
or a duly constituted committee thereof has determined that it would be in the
best interest of the Company and its stockholders to grant the options provided
herein to the Recipient.
NOW, THEREFORE, in consideration of the covenants contained
herein and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise indicated, whenever capitalized terms are
used in this Option Agreement, they shall have the meanings set forth below.
"Change of Control" shall mean an event whereby a person or
entity becomes the beneficial owner as calculated in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended, of at least
50% of the then outstanding Common Stock.
"Committee" shall mean the Organization and Compensation
Committee, if any, of the Board.
"Common Stock" shall mean the common stock of the Company, par
value $.01.
"Disability" shall mean the inability of the Recipient to
perform in all material respects the Recipient's duties and responsibilities to
the Company, or any Subsidiary of the Company, by reason of a physical or mental
disability or infirmity which inability is reasonably expected to be permanent
and has continued (i) for a period of six consecutive months or (ii) such
shorter period as the Company may determine. The Recipient (or the Recipient's
representative) shall furnish the Company with satisfactory medical evidence
documenting the Recipient's disability or infirmity.
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"Fair Market Value" shall mean the average of the opening and
closing prices of the Common Stock for ten (10) consecutive trading days ending
three (3) trading days prior to the Grant Date.
"Option Shares" shall mean, with respect to the Recipient, (a)
any shares of Common Stock (or other shares of capital stock of the Company)
issuable or issued by the Company upon exercise of any Option by the Recipient
and (b) any shares of the capital stock of the Company issuable or issued in
respect of any of the securities described in clause (a) above, by way of stock
dividend, stock split, merger, consolidation, reorganization or other
recapitalization.
"Person" shall mean an individual, a partnership, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.
"Subsidiary" shall mean any corporation of which the Company
owns, directly or through one or more Subsidiaries, a fifty percent (50%) or
more equity interest in such corporation or has the right to nominate fifty
percent (50%) or more of the members of the board of directors or other
governing body of the corporation.
"Transfer" shall mean, with respect to any Option, the gift,
sale, assignment, transfer, pledge, hypothecation or other disposition (whether
for or without consideration and whether voluntary, involuntary or by operation
of law) of such Option or any interest therein.
ARTICLE II
GRANT OF OPTIONS
2.1 Grant of Options. The Recipient is hereby granted
Options representing the right to acquire 150,000 shares of Common Stock. Unless
otherwise indicated herein, references herein to "Options" means the Options
granted hereby.
2.2 Exercise Price. The Exercise Price of the Options
shall be the Fair Market Value of the Common Stock.
2.3 Changes in Common Stock. In the event of any change
in the outstanding shares of Common Stock by reason of any stock split, stock
dividend, recapitalization, merger, consolidation, combination or exchange of
shares or other similar corporate change or in the event of any special
distribution to the stockholders, the Committee shall make equitable adjustments
in the number of shares and prices per share applicable to Options then
outstanding.
2.4 Representation of the Company as to the Common Stock.
The Company represents and warrants to the Recipient that all of the Option
Shares to be issued upon the exercise of the Options pursuant to this Option
Agreement, when issued in accordance with the terms of this Option Agreement,
will be duly authorized and validly issued, fully paid and nonassessable.
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ARTICLE III
EXERCISABILITY OF OPTIONS
Options shall vest upon the earliest to occur of the events
described in Sections 3.1 or 3.2, but subject to the limitations set forth in
Section 3.4 and 3.5, and shall become exercisable as described in Section 3.3:
3.1 Time Vesting. If not sooner vested, Options granted
pursuant to this Option Agreement vest pursuant to the following schedule:
(a) 25% of such Options shall vest upon the commencement of the
Recipient's employment by the Company; and
(b) The remaining 75% of such Options shall vest ratably on the
first day of each calendar month for thirty-six (36) consecutive calendar months
commencing with the first full calendar month after the date of the commencement
of the Recipient's employment by the Company.
In the event that the calculation of the number of Options to vest at any given
time pursuant to this Section 3.1 results in a number which is not a whole
number, such number shall be rounded down to the nearest whole number.
3.2 Vesting upon Change in Control, Death, Disability or
Legal Incapacitation. If not sooner vested, all Options shall vest upon the
occurrence of a Change in Control, or the death, Disability, or legal incapacity
of the Recipient.
3.3 Exercise; Restriction on Exercise. No unvested
Options shall be exerciseable. All vested Options shall become exercisable at
the time they first vest and shall cease to be exercisable at the time they
expire as provided in Section 3.4 or Article V.
3.4 Effect of Termination of Employment, Expiration of
Unvested Options. Unless otherwise determined by the Board or the Committee,
unvested Options shall cease to vest and shall expire upon the Recipient's
ceasing to be employed by the Company or one of its Subsidiaries.
3.5 Failure to Commence Employment. In the event that the
Recipient has not commenced employment with the Company on or prior to April 15,
2000, this Option Agreement shall terminate in its entirety and shall be of no
force or effect.
ARTICLE IV
EXERCISE OF OPTIONS
4.1 Person Who Can Exercise. Options may only be
exercised by the Recipient, except that, in the event of Disability or legal
incapacitation, Options may be exercised by the Recipient's legal guardian or
legal representative and, in the event of death, Options may be exercised by the
executor or administrator of the Recipient's estate or the Person
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or Persons to whom the Recipient's rights under the Options pass by will or the
laws of descent and distribution.
4.2 Procedure for Exercise. Vested Options may be
exercised in whole or in part with respect to any portion thereof that is
exercisable. To exercise an Option, the Recipient (or such other Person who
shall be permitted to exercise the Option as set forth in Section 4.1) must
complete, sign and deliver to the Company an Exercise Notice together with
payment in full of the Exercise Price multiplied by the number of shares of
Common Stock with respect to which the Option is exercised. Payment of the
Exercise Price shall be made in cash (including check, bank draft or money
order). The right to exercise the Option shall be subject to the satisfaction of
all conditions set forth in the Exercise Notice. In lieu of paying the Exercise
Price, upon the Recipient's (or such other Person's) request, with the
Committee's or the Board's consent (which may or may not be given in its sole
discretion), the Company shall deliver to the Recipient a number of shares of
Common Stock equal to (A) divided by (B) where (A) is the positive difference
between (i) the Fair Market Value of a share of Common Stock on the date on
which the Exercise Notice is received by the Company (i.e., the exercise date),
and (ii) the Exercise Price, multiplied by (iii) the number of shares for which
the Option is being exercised, and (B) is the Fair Market Value of a share of
Common Stock on the exercise date.
4.3 Withholding of Taxes. The Company and its
Subsidiaries shall withhold from any amounts due and payable by the Company and
its Subsidiaries to the Recipient (or secure payment from the Recipient in lieu
of withholding) the amount of any withholding or other tax due from the Company
with respect to any Options Shares issuable under this Option Agreement, and the
Company may defer such issuance until such withholding or payment is made unless
otherwise indemnified to its satisfaction with respect thereto.
ARTICLE V
EXPIRATION OF OPTIONS
5.1 Expiration. Vested and unvested Options shall expire
at 5:00 p.m. Eastern Standard Time on the tenth anniversary of the Grant Date,
unless earlier cancelled pursuant to section 3.4 hereof.
5.2 Cancellation. Vested and unvested Options which
expire unexercised shall be treated as cancelled.
ARTICLE VI
MISCELLANEOUS
6.1 Options Not Transferable. Options may not be
Transferred (other than by will or laws of descent and distribution). Any
attempt to effect a Transfer of Options that is not permitted by this Option
Agreement shall be null and void.
6.2 No Employment Contract. Nothing in this Option
Agreement shall interfere with or limit in any way the right of the Company or
any of its Subsidiaries to terminate the Recipient's employment at any time, nor
confer upon any Recipient any right to continued
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employment by the Company or any of its Subsidiaries for any period of time or
to continue such employee's present (or any other) rate of compensation.
6.3 Notices. All notices, requests and demands to or upon
a party hereto must, to be effective, be in writing and shall be deemed to have
been duly given or made when delivered by hand or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows or to such other address of which the intended
receiving party hereto shall have been duly notified hereunder:
(a) If to the Company, to the following address:
IBS Interactive, Inc.
2 Ridgedale Avenue
Suite 350
Cedar Knolls, New Jersey 7927
Attn: Corporate Secretary
Telecopy: (973) 285-4777
(b) If to the Recipient, to the address or telecopy number as shown on the
signature page hereto.
6.4 Amendment. This Option Agreement may be amended only
by a writing executed by the parties hereto which specifically states that it is
amending this Option Agreement.
6.5 Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New
Jersey applicable to contracts made and to be performed therein without regard
to the conflicts of law principles thereof.
6.6 Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of this
Option Agreement.
IN WITNESS WHEREOF, this Option Agreement has been executed
and delivered by the parties hereto.
ROY E. CRIPPEN III IBS INTERACTIVE, INC.
/s/ Roy E. Crippen By: /s/ Nicholas R. Loglisci, Jr.
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Signed Name: Nicholas R. Loglisci, Jr.
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Title: President & CEO
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Name: Roy E. Crippen III
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Home Address:
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EX-6
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g72054a1ex6.txt
JOINT FILING AGREEMENT
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EXHIBIT 6
JOINT FILING AGREEMENT
The undersigned hereby agree to jointly prepare and file with
regulatory authorities a Schedule 13D reporting each of the undersigned's
ownership of shares of common stock of IBS Interactive, Inc., a Delaware
corporation, and hereby affirm that such Schedule 13D is being filed on behalf
of each of the undersigned.
IN WITNESS WHEREOF, this Agreement may be executed in one or more
counterparts, each of which shall be deemed an original for all purposes and all
of which together shall constitute one and the same Agreement, and this
Agreement may be effected by a written facsimile signature of each party.
Dated: October 5, 2001
R.C.F., Inc.
/s/ ROY E. CRIPPEN, III
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Roy E. Crippen, III, President
/s/ ROY E. CRIPPEN, III
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Roy E. Crippen, III, individually