<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILE PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13-d-2(a)
Daleen Technologies, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
23427N 10-4
(CUSIP Number)
James Daleen
Chief Executive Officer
Daleen Technologies, Inc.
902 Clint Moore Rd.
Boca Raton, Florida 33487
(561) 999-8000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 23, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 9 pages)
<PAGE> 2
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CUSIP No. 46621D 10 Page 2 of 9
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
- -------------- -----------------------------------------------------------------------------------------------------
Names of Reporting Person:
1 James Daleen
I.R.S. Identification No. of Above Person (entity only)
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group*
(a) [X]
(b) [ ]
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
SEC use only
3
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Source of Funds*
4
00
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
5
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Citizenship or Place of Organization
6
United States Citizen
- -------------- -----------------------------------------------------------------------------------------------------
- ---------------------------- ------- -------------------------------------------------------------------------------
Sole voting power
7 167,965(1)(2)
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Number of shares Shared voting power
beneficially 8 1,644,632
owned by each
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Reporting person with Sole dispositive power
9 167,965(1)(2)
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Shared dispositive power
10 1,644,632
- ---------------------------- ------- -------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Aggregate Amount Beneficially Owned by Each Reporting Person
11 1,812,597 (1)(2)
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Check box if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
12
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Percent of Class Represented by Amount in Row (11) [ ]
13 8.4% (3)
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Type of Reporting Person*
14
IN
- -------------- -----------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Includes 167,161 shares that are purchasable by Mr. Daleen upon exercise of
options granted to Mr. Daleen in connection with his employment. Those options
are exercisable immediately as to 11,220 shares and are exercisable as to the
remaining 154,941 shares as follows: 31,134 shares on 12/18/00; 61,903.5 shares
on 12/31/00; 93,037.5 shares on 12/18/01; 123,807 shares on 12/31/01, and
154,941 shares on 12/18/02. Before the exercise of those options, Mr. Daleen is
not entitled to any rights as a shareholder of the Issuer as to the shares
covered by the options. Mr. Daleen expressly disclaims beneficial ownership of
any of the shares of common stock of Issuer that are purchasable by him upon
exercise of his options until such time as Mr. Daleen purchases any such shares
or the options become exercisable within 60 days as described in Rule
13d-3(d)(1).
(2) Includes 1804 shares owned by Mr. Daleen's spouse. Mr. Daleen disclaims
beneficial ownership of the 1,804 shares held by his spouse.
(3) The total number of outstanding shares of the Issuer's common stock includes
the 166,161 shares subject to stock options held by Mr. Daleen.
<PAGE> 3
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CUSIP No. 46621D 10 Page 3 of 9
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
- -------------- -----------------------------------------------------------------------------------------------------
Names of Reporting Person:
1 J.D. Management, Inc. ("J.D.")
I.R.S. Identification No. of Above Person (entity only)
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group*
(a) [X]
(b) [ ]
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
SEC use only
3
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Source of Funds*
4
00
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
5
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Citizenship or Place of Organization
6
Nevada - USA
- -------------- -----------------------------------------------------------------------------------------------------
- ---------------------------- ------- -------------------------------------------------------------------------------
Sole voting power
7 0
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Number of shares Shared voting power
beneficially 8 1,644,632
owned by each
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Reporting person with Sole dispositive power
9 -0-
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Shared dispositive power
10 1,644,632
- ---------------------------- ------- -------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Aggregate Amount Beneficially Owned by Each Reporting Person
11 1,644,632
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Check box if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
12
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Percent of Class Represented by Amount in Row (11) [ ]
13 7.7%
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Type of Reporting Person*
14
CO
- -------------- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
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CUSIP No. 46621D 10 Page 4 of 9
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
- -------------- -----------------------------------------------------------------------------------------------------
Names of Reporting Person:
1 J.D. Investment Company Limited Partnership ("JD Ltd.")
I.R.S. Identification No. of Above Person (entity only)
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group*
(a) [X]
(b) [ ]
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
SEC use only
3
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Source of Funds*
4
00
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
5
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Citizenship or Place of Organization
6
Nevada - USA
- -------------- -----------------------------------------------------------------------------------------------------
- ---------------------------- ------- -------------------------------------------------------------------------------
Sole voting power
7 0
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Number of shares Shared voting power
beneficially 8 1,644,632
owned by each
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Reporting person with Sole dispositive power
9 -0-
------- -------------------------------------------------------------------------------
------- -------------------------------------------------------------------------------
Shared dispositive power
10 1,644,632
- ---------------------------- ------- -------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Aggregate Amount Beneficially Owned by Each Reporting Person
11 1,644,632
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Check box if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
12
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Percent of Class Represented by Amount in Row (11) [ ]
13 7.7%
- -------------- -----------------------------------------------------------------------------------------------------
- -------------- -----------------------------------------------------------------------------------------------------
Type of Reporting Person*
14
PN
- -------------- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
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CUSIP No. 46621D 10 Page 5 of 9
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ITEM 1. SECURITY AND ISSUER. This Schedule relates to the Common Stock (the
"Common Stock") of Daleen Technologies, a Florida corporation (the "Issuer")
whose principal executive offices are located at 902 Clint Moore Rd., Boca
Raton, Florida 33487.
ITEM 2. IDENTITY AND BACKGROUND.
Information with respect to James Daleen:
ITEM 2(a) This Schedule is being filed by James Daleen, J.D.,
and J.D. Ltd. (sometimes referred to
collectively as the "Reporting Persons")
ITEM 2(b) The address of James Daleen is as follows:
902 Clint Moore Rd., Boca Raton, Florida 33487
ITEM 2(c) The principal occupation or employment of Mr.
Daleen is as Chairman of the Board and Chief
Executive Officer of the Issuer.
ITEM 2(d) During the last five years Mr. Daleen has not
been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
ITEM 2(e) During the last five years Mr. Daleen has not
been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction that
resulted in the Reporting Person 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.
Information with respect to J.D. Management, Inc.:
ITEM 2(a) This Schedule is being filed by James Daleen, J.D.,
and J.D. Ltd.
ITEM 2(b) The address of J.D. is as follows:
4535 W. Sahara Ave., Suite 100A, Las Vegas,
Nevada 89102
ITEM 2(c) Principal business of J.D.: Investor
ITEM 2(d) During the last five years J.D. has not been
convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
ITEM 2(e) During the last five years J.D. has not been a
party to a civil proceeding of a judicial or
administrative body of competent jurisdiction that
resulted in the Reporting Person 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.
<PAGE> 6
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CUSIP No. 46621D 10 Page 6 of 9
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Information with respect to J.D. Investment Company Limited
Partnership:
ITEM 2(a) This Schedule is being filed by James Daleen, J.D.,
and J.D. Ltd.
ITEM 2(b) The address of J.D. Ltd. is as follows:
4535 W. Sahara Ave., Suite 100A, Las Vegas,
Nevada 89102
ITEM 2(c) Principal business of J.D. Ltd.: Investor
ITEM 2(d) During the last five years J.D. Ltd. has not been
convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
ITEM 2(e) During the last five years J.D. Ltd. has not
been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction that
resulted in the Reporting Person 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 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On December 23, 1999, beneficial ownership of 1,524,768 shares of
Common Stock and on January 31, 2000, beneficial ownership of 119,864
shares of Common Stock was acquired by each of JD Ltd., J.D., as
managing general partner of JD Ltd., and Daleen, as limited partner of
JD Ltd. and as the director, officer, and sole shareholder of J.D. All
shares of common stock acquired by JD Ltd. were originally owned by Mr.
Daleen, individually, and were acquired by Mr. Daleen before the
Issuer's public offering completed in September 1999.
ITEM 4. PURPOSE OF TRANSACTION.
Mr. Daleen transferred 1,644,632 shares of Common Stock to JD Ltd.
solely for tax planning 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 which 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. Except in certain circumstances involving
withdrawal of a partner or the winding up of J.D.
Ltd.'s partnership business, J.D., as managing
general partner of J.D. Ltd., cannot sell, lease,
transfer, assign, pledge, or encumber the Common
Stock held by J.D. Ltd. without the consent of James
Daleen, as limited partner of JD Ltd.
<PAGE> 7
ITEM 5(c)
In addition to the transfer of 1,524,768 shares of Common
Stock by Mr. Daleen to J.D. Ltd., on December 23, 1999, Mr.
Daleen exercised stock options pertaining to 119,864 shares of
Common Stock as follows:
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES ACQUIRED PRICE PER SHARE HOW EFFECTED
- ---- ------------------------- --------------- ------------
<S> <C> <C> <C>
12/31/99 5,412 $3.00 By exercise of stock option
12/31/99 21,780 $3.00 By exercise of stock option
12/31/99 61,538 $3.25 By exercise of stock option
12/31/99 31,134 $3.25 By exercise of stock option
</TABLE>
The shares described in the table above were transferred by
Mr. Daleen to JD Ltd. on January 31, 2000.
ITEM 5(d)
J.D., the managing general partner of JD Ltd., has the right
to receive and to direct the receipt of dividends from, and
proceeds from the sale of, the shares indicated in Item 11 of
the applicable cover page. James Daleen as director, officer,
and sole shareholder of J.D., has the right to receive and
direct the receipt of dividends from, and proceeds from the
sale of, the shares indicated in Item 11 of the applicable
cover page. Mr. Daleen also has the right to receive proceeds
from the sale of such securities as a limited partner of JD
Ltd.
ITEM 5.(e)
Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
See Items 3 and 5 above for a description of the limited
partnership agreement to which J.D. and Mr. Daleen are parties.
Mr. Daleen was granted options to purchase Common Stock of
the Issuer under three Incentive Stock Option Agreements with the Company
dated March 31, 1997, December 31, 1997, and December 18, 1998. Under these
agreements, Mr. Daleen currently holds options to purchase shares of Common
Stock as follows:
11,220 shares at $3.00 per share - expires 3/31/02
61,539 shares at $3.25 per share - expires 12/31/02
31,134 shares at $3.25 per share - expires 12/18/03
The options vest as described in footnote 1 to Items 5, 7, 9
and 11 of Mr. Daleen's cover page.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1. Joint Filing Agreement.
Exhibit 2. Limited Partnership Agreement of J.D. Investment
Company Limited Partnership, a Nevada
limited partnership.
Exhibit 3. Form of Incentive Stock Option Agreement.
<PAGE> 8
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CUSIP No. 46621D 10 Page 8 of 9
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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: February 14, 2000.
/s/ JAMES DALEEN
-----------------------------
James Daleen
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: February 14, 2000.
J.D. Management, Inc.
By: /s/ JAMES DALEEN
--------------------------
James Daleen, President
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: February 14, 2000.
J.D. Investment Company
Limited Partnership
By: J.D. Management, Inc.
Managing General Partner
By: /s/ JAMES DALEEN
--------------------------
James Daleen, 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> 9
Exhibit 1
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 Daleen Technologies, 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 February 14, 2000
/s/ JAMES DALEEN
-----------------------------------
James Daleen
J.D. MANAGEMENT, INC.
By: /s/ JAMES DALEEN
-------------------------------
James Daleen, President
J.D. INVESTMENT COMPANY
LIMITED PARTNERSHIP
By: J.D.Management, Inc.,
Managing General Partner
By: /s/ JAMES DALEEN
--------------------------------
James Daleen, President
<PAGE> 10
EXHIBIT 2
================================================================================
LIMITED PARTNERSHIP AGREEMENT
OF
J.D. INVESTMENT COMPANY LIMITED PARTNERSHIP,
A NEVADA LIMITED PARTNERSHIP
================================================================================
<PAGE> 11
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page No.
--------
<S> <C>
ARTICLE I.................................................................................4
Definitions............................................................................4
Captions and Certain Terms.............................................................8
Severability...........................................................................8
Limitation of Grant....................................................................8
ARTICLE II................................................................................8
Formation, Name, Office and Registered Agent...........................................8
Purpose of Partnership.................................................................9
Term of Partnership...................................................................10
Authorized Acts.......................................................................10
Co-Ownership of Partnership Interests.................................................11
Representations and Warranties of the Limited Partners................................11
ARTICLE III..............................................................................14
Capital Contributions.................................................................14
Capital Account.......................................................................15
Expenses Paid by Partners.............................................................16
Loans by Partners; Restrictions on Borrowing..........................................16
ARTICLE IV...............................................................................16
Allocations...........................................................................16
ARTICLE V................................................................................18
Distributions.........................................................................18
Limitation on Distributions to Partners...............................................20
ARTICLE VI...............................................................................20
Duties of Managing General Partner....................................................20
Managing General Partner's Fees and Expenses..........................................20
Authority of Managing General Partner.................................................21
Special Limitation....................................................................23
Dealing with Affiliates...............................................................23
Indemnification of General Partner....................................................23
Liability of Limited Partners.........................................................24
Authority of Limited Partners.........................................................24
ARTICLE VII..............................................................................24
Limited Partners......................................................................24
General Partner.......................................................................24
Restriction on Transfer...............................................................25
Admission of Substitute Partner.......................................................25
Rights of Partner After Assignment and Substitution...................................26
Allocations and Distributions After Assignment........................................26
ARTICLE VIII.............................................................................27
Withdrawal of Limited Partner.........................................................27
Retirement, Removal, or Withdrawal of Managing General Partner........................28
Retirement of Limited Partner.........................................................28
</TABLE>
2
<PAGE> 12
<TABLE>
<S> <C>
Rights of Partner After Retirement, Removal, or Withdrawal............................28
ARTICLE IX...............................................................................29
Events of Dissolution.................................................................29
Winding-Up and Distributions..........................................................29
Distribution of Liquidation Proceeds and Assets and Allocation of Gains and Losses....30
Limitation of Liability of Partners...................................................30
Waiver of Right of Partition of Assets................................................31
ARTICLE X................................................................................31
Books and Records.....................................................................31
Reports...............................................................................31
Bank Accounts.........................................................................31
Tax Elections.........................................................................32
Accounting Method and Fiscal Year.....................................................32
ARTICLE XI...............................................................................32
Power of Attorney.....................................................................32
Partnership Contracts.................................................................33
Conveyances...........................................................................33
Notices...............................................................................33
Consents..............................................................................33
Meetings..............................................................................34
Binding Effect; Counterparts..........................................................34
Choice of Law.........................................................................34
Complete Agreement; Modification......................................................35
Evidence of Partnership Interests.....................................................35
Tax Matters Partner...................................................................35
Gender and Number.....................................................................35
Title.................................................................................35
</TABLE>
3
<PAGE> 13
J.D. INVESTMENT COMPANY LIMITED PARTNERSHIP AGREEMENT
This Limited Partnership Agreement ("Agreement") is entered into
pursuant to the provisions of the Nevada Uniform Limited Partnership Act, and
shall be effective as of the date of filing of the Certificate of Limited
Partnership with the Nevada Secretary of State, by and among J.D. Investment
Management, Inc, a Nevada corporation (as the "Managing General Partner"), and
James Daleen ("Daleen") (as a "Limited Partner"), 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.
4
<PAGE> 14
"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).
5
<PAGE> 15
"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 J.D. Management,
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 Daleen
Technologies, Inc. and any successor thereto.
"Partner" means each Person which is a General Partner or a Limited
Partner.
"Partnership" means the J.D. INVESTMENT 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.
6
<PAGE> 16
"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.
"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).
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"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, and the income tax matters pertaining to the assets held by the
Partnership will be separately computed for each Partner.
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
Partnership is organized as of the effective date of this Agreement and the
signatories to this Agreement constitute the members of this Partnership under
the Act as of such date. The rights and obligations of the Partners are
determined by the Act, except as otherwise expressly provided in this Agreement.
The name of the Partnership is "J.D. INVESTMENT COMPANY LIMITED PARTNERSHIP."
The recordkeeping office of the Partnership is located at 4535 W. Sahara Avenue,
Suite 100A, Las Vegas, Nevada 89102. The principal business office of the
Partnership is located at 4535 W. Sahara Avenue, Suite 100A, Las Vegas, Nevada
89102. The Managing General Partner may change the name of the Partnership or
the location
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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 Jones Vargas, 3773 Howard Hughes
Parkway, 3rd Floor South, Las Vegas, Nevada 89109.
B. General and Limited Partners. J.D. Investment
Management, Inc. is the initial Managing General Partner of the Partnership.
Daleen is the initial Limited Partner 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 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 Daleen Technologies, Inc.,
(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.
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(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 Daleen Technologies, Inc.
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, 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 James
Daleen, 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;
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(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;
(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
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represents, warrants, and covenants to the 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 Partner, 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;
(d) He was permitted to ask questions of, and to
receive answers from, the General Partner 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;
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(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 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.
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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 Daleen
Technologies, Inc. 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 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
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<PAGE> 24
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) to 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
transferror 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 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.
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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 a Majority in Interest.
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 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.
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(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)(iii)(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 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.
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(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. Except as may be
required to properly reflect dispositions of Marketable Securities by the
Partnership and when the economic effect thereof is to be specifically allocated
to one or more Partners, 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 Daleen Technologies, Inc. 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 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.
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(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
(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.
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(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. 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.
(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
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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) subject to section 32, to borrow money on
behalf of the Partnership and, as security therefor, to encumber the Property;
(c) to prepay, in whole or in part, refinance,
increase, modify or extend any obligation affecting the Property;
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(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) 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. 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 may 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
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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 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
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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;
(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.
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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).
(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 Limited 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 partial withdrawal of a Limited 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 Daleen Technologies, Inc. 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, and shall act upon the direction of the Partner to whom
such stock is to be assigned if needed to effectuate a vote thereon.
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(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 without the consent of a Majority in Interest, without being in
violation of this Agreement. 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 both of the Managing General Partner and
non-managing General Partner shall dissolve the Partnership, unless a Majority
In Interest appoints a successor to serve as the Managing General Partner.
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 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.
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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 James Daleen; 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, 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.
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(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 Daleen Technologies, Inc., 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
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.
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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 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 non-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
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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 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.
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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:
(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
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(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.
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.
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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 Managing 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 Managing
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 Managing 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
Managing 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.
35
<PAGE> 45
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:
J.D. INVESTMENT MANAGEMENT, INC.
By: /s/ James Daleen
-------------------------------------------------
PRESIDENT
LIMITED PARTNER:
/s/ James Daleen
----------------------------------------------------
James Daleen
36
<PAGE> 46
Exhibit A
Managing General Partner
J.D. Management, Inc.
Limited Partner
James Daleen 1,524,768 shares of
Common Stock of
Daleen Technologies, Inc.
-1-
<PAGE> 47
Exhibit 3
SS.422 INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT dated the ____ day of ____________, _______ between Daleen
Technologies, Inc., a Florida Corporation (the "Company") and _________________,
(the "Holder").
WITNESSETH
(1) GRANT OF OPTION. Pursuant to the provisions of the Daleen
Technologies, Inc. 199___ Incentive Stock Option Plan (the "Plan") the Company
hereby grants to the Holder, subject to the terms and conditions of the plan and
the terms and conditions set forth herein, an option to purchase from the
Company for cash or stock of the Company all or any part of an aggregate of
__________ shares of Common Stock, (no par value) of the Company at the purchase
price of $_________ per share.
(2) TERMS AND CONDITIONS. It is understood and agreed that the option
evidenced hereby is subject to the following terms and conditions.
(a) EXPIRATION DATE. The option shall expire five years after
the date hereof.
(b) EXERCISE OF OPTION. No part of this option may be
exercised (1) until the Holder has remained in the employ of the Company or a
Subsidiary of the Company as defined in the Plan (any such Subsidiary being
hereinafter called a "Subsidiary") for a period of one year after the date
hereof. This option may be exercisable to the extent exercisable by its terms
any time prior to the Expiration Date. Any exercise shall be accompanied by a
written notice to the Company specifying the number of shares as to which the
option is being exercised. Notation of any partial exercise shall be made by the
Committee on Schedule I hereto.
(c) VESTING PERIOD. The option shall vest as per the following
schedule:
In the event of a change in ownership of more than 80% of the
Company's outstanding Common stock during the period the options are
outstanding, the outstanding options will immediately vest at 100%.
(d) PAYMENT OF PURCHASE PRICE UPON EXERCISE. At the time of
any exercise the purchase prices of the shares as to which this option shall be
exercised shall be paid in cash, in stock of the Company or by delivery of a
recourse
<PAGE> 48
promissory note containing such terms and in such amount as the Committee shall
determine.
(e) EXERCISE UPON DEATH OR TERMINATION OF EMPLOYMENT.
(1) In the event of the death of the Holder (i) while an
employee of the Company or of a Subsidiary or (ii) within fifteen months after
termination of employment with the Company or a Subsidiary because of Permanent
Disability (as defined in the Plan), his option may be exercised, to the extent
that Holder was entitled to do so at the date of termination of employment, by
his/her executors or administrators, at any time or from time to time, within
one year after the date of Holder's death, but in no event later than the
expiration date or one year after Holder's death, which ever is earlier.
(2) If Holder's employment with the Company or any
Subsidiary is terminated by reason of Permanent Disability (as defined in the
Plan), his/her option may be exercised within 1 year following such termination
to the extent that Holder was entitled to do so at the date of Permanent
Disability, but no later than the expiration date of the option.
(3) If Holder's employment with the Company or a
Subsidiary shall terminate, Holder may exercise the option to the extent that
he/she is entitled to do so at the date of the termination of employment at any
time, or from time to time, within three months of the date of termination of
employment, but in no event later than the expiration date of the option.
(f) NON-TRANSFERABILITY. This option shall not be transferable
other than by will or by the laws of descent and distribution. During the
lifetime of Holder, this option shall be exercisable only by him/her.
(g) ADJUSTMENTS. In the event of any change in the Common
Stock of the Company by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination, or exchange of
shares or rights offering to purchase affecting the Common Stock, the Committee
may, in its sole and absolute discretion, adjust the number and kind of shares
for which thereafter an option may be granted and sold under the Plan, the
number and kind of shares subject to option in outstanding option agreement and
the purchase price per share as the Committee deems equitable.
(h) NO RIGHTS AS STOCKHOLDER. Holder shall have no rights as a
stockholder with respect to any shares of Common Stock subject to this option
before the date of issuance to him/her of a certificate or certificates for such
shares.
<PAGE> 49
(i) NO RIGHT TO CONTINUED EMPLOYMENT. This option shall not
confer upon Holder any right with respect to continuance of employment by the
Company or any Subsidiary, nor shall it interfere in any way with the rights of
his/her employer to terminate his/her employment at any time.
(j) COMPLIANCE WITH LAW AND REGULATIONS. This option and the
obligation of the Company to sell and deliver shares hereunder, shall be subject
to all applicable federal and state laws, rules and regulations and to such
approvals by any government or regulatory agency as may be required. The Company
shall not be required to issue or deliver any certificates for shares of Common
Stock prior to (i) the listing of such shares on any stock exchange on which the
Common Stock may then be listed and (ii) the completion of any registration or
qualification of such shares under any federal or state law, or any rule or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable. The Company shall not be
required to accept any note in payment of the purchase price to the extent the
amount of terms of the note shall not be in compliance with all applicable
federal and state laws, rules and regulations and such approval by any
government or regulatory agency as may be required have not been obtained.
(3) INVESTMENT REPRESENTATION. The Committee may require Holder to
furnish to the Company, before the issuance of any shares upon the exercise of
all or any part of this option, a representation (in such form as the Committee
may specify) in which Holder represents that the shares acquired by him/her upon
exercise are being acquired for investment and not with a view to the sale or
distribution thereof.
(4) HOLDER BOUND BY PLAN. Holder hereby acknowledges receipt of a copy
of the Plan and agrees to be bound by all the terms and provisions thereof.
(5) NOTICE. Any notice hereunder to the Company and any notice
hereunder to Holder shall be addressed as follows, subject to the right of
either party to designate at any time hereafter in writing some other address.
Company: Holder:
-------- -------
Daleen Technologies, Inc.
902 Clint Moore Road, Suite 230
Boca Raton, Florida 33487
(6) COUNTERPARTS. This Agreement has been executed in two counterparts
each of which shall constitute one and the same instrument.
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by its duly authorized officer and Holder has executed this Agreement,
both as of the day and year first above written.
WITNESS: DALEEN TECHNOLOGIES, INC.
________________________________ _________________________________
WITNESS: HOLDER:
________________________________ _________________________________
