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CUSIP NO. 593261-10-0 Page 1 of 9 Pages
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
MIAMI COMPUTER SUPPLY CORPORATION
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(Name of Issuer)
COMMON STOCK, NO PAR VALUE
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(Title of Class of Securities)
593261-10-0
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(CUSIP Number)
Timothy B. Matz, Esq.
Jeffrey A. Koeppel, Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
(202) 347-0300
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(Name, Address, Telephone Number of Person Authorized
to Receive Notices and Communications)
November 12, 1996
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(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(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [X]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Page 1 of 9 Pages
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CUSIP NO. 593261-10-0 Page 2 of 9 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Albert L. Schwarz Family Limited Partnership
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS PURSUANT TO ITEMS 2(d)
or 2(e)
[ ]
Not Applicable
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
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7. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SOLE
VOTING POWER
158,400
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8. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SHARED
VOTING POWER
-0-
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9. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SOLE
DISPOSITIVE POWER
158,400
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10. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SHARED
DISPOSITIVE POWER
-0-
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
158,400
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.7%
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14. TYPE OF REPORTING PERSON
PN
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CUSIP NO. 593261-10-0 Page 3 of 9 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Albert L. Schwarz
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS PURSUANT TO ITEMS 2(d)
or 2(e)
[ ]
Not Applicable
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SOLE
VOTING POWER
35,655
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8. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SHARED
VOTING POWER
-0-
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9. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SOLE
DISPOSITIVE POWER
35,655
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10. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SHARED
DISPOSITIVE POWER
-0-
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
35,655
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.05%
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14. TYPE OF REPORTING PERSON
IN
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CUSIP NO. 593261-10-0 Page 4 of 9 Pages
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Item 1. Security and Issuer
This Statement relates to the shares of common stock, no par value per
share ("Common Stock"), of Miami Computer Supply Corporation, a company
organized under the laws of Ohio (the "Issuer"). The address of the Issuer's
principal executive office is 4750 Hempstead Station, Dayton, Ohio 45429.
Item 2. Identity and Background
(a) The persons filing this Statement are the Albert L. Schwarz Family Limited
Partnership and Mr. Albert L. Schwarz. Albert L. Schwarz is the Trustee of
the Albert L. Schwarz Family Trust which is the general partner of the
Albert L. Schwarz Family Limited Partnership. The Albert L. Schwarz Family
Limited Partnership and Albert L. Schwarz are the "reporting persons"
herein.
(b) The business address of the Albert L. Schwarz Family Limited Partnership is
453 Rolling Timber Trial, Kettering, Ohio 45429. The business address of
Albert L. Schwarz is 4750 Hempstead Station, Dayton, Ohio 45429.
(c) The Albert L. Schwarz Family Limited Partnership is an Ohio limited
partnership, the general partner of which is the Albert L. Schwarz Family
Trust, an inter vivos revocable Ohio trust, of which Albert L. Schwarz is
the trustee. Albert L. Schwarz is President and Director of Miami Computer
Supply Corporation, the Issuer.
(d) During the past five years, neither Albert L. Schwarz nor the Albert L.
Schwarz Family Limited Partnership has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither Albert L. Schwarz nor the Albert L.
Schwarz Family Limited Partnership has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or a finding of any
violation with respect to such laws.
(f) Albert L. Schwarz is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration
As of the date hereof, the number of shares with respect to which the
Albert L. Schwarz Family Limited Partnership may be deemed to be the beneficial
owner is 158,400 shares of Common Stock which were gifted thereto by the Albert
L. Schwarz Family Trust on December 1, 1995. The aggregate cost of such shares
was $0.
As of the date hereof, the number of shares with respect to which
Albert L. Schwarz may be deemed to be the beneficial owner is 35,655 shares of
Common Stock which were purchased in private transactions. The aggregate cost of
the purchased shares was $155,184.00.
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CUSIP NO. 593261-10-0 Page 5 of 9 Pages
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The funds used by Albert L. Schwarz to purchase shares of Common Stock have
come from Mr. Schwarz's personal funds, which include cash and cash equivalents
on hand and in banks.
As separate entities, the Albert L. Schwarz Family Limited Partnership and
Albert L. Schwarz do not meet or exceed the 5.0% beneficial threshold as set
forth in Regulation 13D of the Securities Exchange Act of 1934, as amended. When
aggregated, however, the combined number of shares beneficially owned by the
entities exceeds the Regulation 13D threshold. Mr. Schwarz is the Trustee of the
Albert L. Schwarz Family Trust, the general partner of the Albert L. Schwarz
Family Limited Partnership. However, Mr. Schwarz is not a limited or general
partner of the Albert L. Schwarz Family Limited Partnership and accordingly
disclaims any and all beneficial ownership of the shares owned by the Albert L.
Schwarz Family Limited Partnership. The Albert L. Schwarz Family Limited
Partnership disclaims any and all beneficial ownership of the shares owned by
Albert L. Schwarz.
Item 4. Purpose of Transaction
The reporting persons filing this Statement have acquired the shares of
Common Stock owned by such persons for investment purposes. The reporting
persons have no present intent to or have any plans or proposals which relate to
or would result in: (a) the acquisition by any person of additional securities
of the Issuer or the disposition of securities of the Issuer; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Issuer; (c) a sale or transfer of a material amount of
assets of the Issuer; (d) any change in the present Board of Directors or
management of the Issuer, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the Board; (e) any
material change in the present capitalization or dividend policy of the Issuer;
(f) any other material change in the Issuer's business or corporate structure;
(g) changes in the Issuer's Amended and Restated Articles of Incorporation,
Amended and Restated Code of Regulations or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Issuer by any
person; (h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized or quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Issuer becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any
action similar to any of those enumerated above. However, in the future, the
reporting persons filing this Statement may determine to acquire additional
shares of the Common Stock (or other securities of the Issuer), from time to
time, or the reporting persons may determine to dispose of all or some of their
acquired shares of Common Stock, subject to their agreement with Friedman,
Billings, Ramsey & Co., Inc. (the "Underwriter") which requires that such shares
not be sold before August 6, 1997 without the consent of the Underwriter and to
applicable securities laws which limit the sale of such Common Stock. Any such
determination will depend on a number of factors, including market prices, the
Issuer's prospects and alternative investments.
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CUSIP NO. 593261-10-0 Page 6 of 9 Pages
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Item 5. Interest in Securities of the Issuer
(a) As of the date hereof, the Albert L. Schwarz Family Limited Partnership
may be deemed to be the beneficial owner of an aggregate of 158,400
shares of Common Stock, which constitutes approximately 4.7% of the
3,388,000 shares of Common Stock of the Issuer which the Albert L.
Schwarz Family Limited Partnership believes to be the total number of
Common Stock outstanding as of November 11, 1996, the date of the
Issuer's final Prospectus.
Nothing contained herein shall be construed as an admission that the
Albert L. Schwarz Family Limited Partnership is the beneficial owner of
any shares of Common Stock, except as set forth herein as expressly and
admittedly being beneficially owned by the Albert L. Schwarz Family
Limited Partnership. Except as described herein, to the best knowledge
of the Albert L. Schwarz Family Limited Partnership, there is no person
who may be deemed to comprise a group with the Albert L. Schwarz Family
Limited Partnership.
As of the date hereof, Albert L. Schwarz may be deemed to be the
beneficial owner of an aggregate of 35,655 shares of Common Stock,
which constitutes 1.05% of the 3,388,000 shares of Common Stock of the
Issuer which Albert L. Schwarz believes to be the total number of
Common Stock outstanding as of November 11, 1996, the date of the
Issuer's final Prospectus. The directly owned shares of Common Stock
are held by Albert L. Schwarz in a personal account.
Nothing contained herein shall be construed as an admission that Albert
L. Schwarz is the beneficial owner of any shares of Common Stock,
except as set forth herein as expressly and admittedly being
beneficially owned by Albert L. Schwarz. Except as described herein, to
the best knowledge of Albert L. Schwarz, there is no person who may be
deemed to comprise a group with Albert L. Schwarz.
(b) The Albert L. Schwarz Family Limited Partnership has the sole power to
vote and the sole power to dispose of the 158,400 shares of Common
Stock owned by it as of November 11, 1996. Albert L. Schwarz is the
Trustee of the Albert L. Schwarz Family Trust which is the general
partner of the Albert L. Schwarz Family Limited Partnership and, as
much, may be deemed to have voting and dispositive power over the
shares of Common Stock owned by the Albert L. Schwarz Family Limited
Partnership.
Albert L. Schwarz has the sole power to vote and the sole power to
dispose of the 35,655 shares of Common Stock owned by him as of
November 11, 1996.
(c) Except for Albert L. Schwarz who purchased 18,055 shares of the
Issuer's Common Stock in the initial public offering on November 12,
1996, the reporting persons filing this Statement have not effected any
transactions in the Common Stock within the past 60 days.
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CUSIP NO. 593261-10-0 Page 7 of 9 Pages
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(d) No persons other than the reporting persons filing this Statement have
the right to receive, or the power to direct the receipt of, dividends
from, or the proceeds from the sale of, the shares of the Common Stock
reported in this Statement.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Other than (i) the fact that Albert L. Schwarz is the Trustee of the
Schwarz Family Trust which is the general partner of the Albert L. Schwarz
Family Limited Partnership which provides to Mr. Schwarz the power to vote and
dispose of the shares of Common Stock held in the Albert L. Schwarz Family
Limited Partnership, and (ii) the participation of Albert L. Schwarz in the
Issuer's 1996 Stock Option Plan, as of the date of this Statement, the reporting
persons filing this Statement are not parties to any other contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Issuer, including but not limited to transfer or voting of
any of the Common Stock, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
the giving or withholding of proxies or pledge or otherwise subject to a
contingency the occurrence of which would give another person voting or
investment power over the Common Stock.
Item 7. Material to be Filed as Exhibits
Exhibit A - The Albert L. Schwarz Family Limited Partnership Agreement.
Exhibit B - The Albert L. Schwarz Family Trust.
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CUSIP NO. 593261-10-0 Page 8 of 9 Pages
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SIGNATURES
After reasonable inquiry and to the best of the knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement on Schedule 13D is true, complete and correct.
By: /s/ Albert L. Schwarz
__________________________________________________________
Albert L. Schwarz, on behalf of the Schwarz Family Limited
Partnership, The Albert L. Schwarz Family Trust, General
Partner, Albert L. Schwarz, Trustee
Date: November 19, 1996
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CUSIP NO. 593261-10-0 Page 9 of 9 Pages
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SIGNATURES
After reasonable inquiry and to the best of the knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement on Schedule 13D is true, complete and correct.
By: /s/ Albert L. Schwarz
___________________________
Albert L. Schwarz
Date: November 19, 1996
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Exhibit A
THE LIMITED PARTNER INTERESTS REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. NO
LIMITED PARTNER INTEREST MAY BE OFFERED FOR SALE, SOLD DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED, OR HYPOTHECATED TO ANY PERSON OTHER THAN THE PARTNERSHIP
IN ABSENCE OF REGISTRATION, QUALIFICATION, OR AN EXEMPTION THEREFROM. IN
ENTERING INTO THIS AGREEMENT, A LIMITED PARTNER HAS BEEN PROVIDED WITH, AND HAS
REVIEWED, ALL INFORMATION AND MATERIALS CONCERNING THE PARTNERSHIP, AND ITS
BUSINESS AND OPERATIONS, DEEMED NECESSARY BY A LIMITED PARTNER.
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LIMITED PARTNERSHIP AGREEMENT
SCHWARZ FAMILY LIMITED PARTNERSHIP
an Ohio Limited Partnership
This Limited Partnership Agreement ("Agreement") is executed
this 28th day of December, 1995, by and between Albert L. Schwarz, Trustee, The
Albert L. Schwarz Family Trust, as General Partner, and Albert L. Schwarz and
Mary C. Schwarz as Limited Partners.
ARTICLE I
FORMATION OF LIMITED PARTNERSHIP; NAME;
PRINCIPAL PLACE OF BUSINESS
1.1. Formation. This Partnership is formed pursuant to the
provisions of the Revised Uniform Limited Partnership Act as adopted by the
State of Ohio. The Partners shall execute and cause to be recorded a Certificate
of Limited Partnership and any additional documents as may be necessary or
appropriate to form a limited partnership pursuant to the laws of the State of
Ohio and any jurisdiction in which the Partnership conducts its business.
1.2. Name. The name of the Partnership is the Schwarz Family
Limited Partnership, an Ohio Limited Partnership.
1.3. Principal Place of Business. The principal place of
business of the Partnership shall be at 453 Rolling Timber Trail, Kettering,
Montgomery County, Ohio. The business of the Partnership may also be conducted
at such other or additional place or places
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as may be designated by the General Partner, provided the Limited Partners are
notified of each such alternate or additional office.
1.4. Title to Partnership Assets. The General Partner will be
permitted to register or take title to partnership assets (1) in the name of the
Partnership, or (2) in the name of any General Partner as trustee or nominee for
the Schwarz Family Limited Partnership with or without disclosing the identity
of his or her or its principal, or (3) to permit the registration of securities
in "street name" under a custodial arrangement with an established securities
brokerage firm, trust department or other custodian.
1.5. Definitions. All capitalized words and phrases in this
Agreement shall have the meanings parenthetically assigned to them herein or the
meanings assigned thereto in Exhibit A attached to this Agreement.
ARTICLE II
PURPOSES OF PARTNERSHIP
2.1. General Purpose. The Partnership may conduct any lawful
act or activity permitted under the laws of the state of Ohio and in any other
state or nation in which it may have a business or investment interest. The
Partnership, acting by and through its authorized representative(s), may
acquire, hold, rent, lease, sell, convey, exchange, convert, improve, repair,
manage, create, control, and invest and reinvest the funds of the Partnership in
real and personal property (both tangible and intangible), including property
acquired "subject to" or "in assumption of" an existing indebtedness or property
acquired in whole or in part for the promissory obligation of the Partnership.
Investments may include the acquisition of and the exercise of options to
purchase real and personal property. The Partnership may make any payment,
receive any money, take any action, and make, execute, deliver and receive any
contract, deed, instrument or document which may be considered necessary or
advisable to exercise any of the powers conferred hereunder or to carry into
effect any provisions herein contained and which in the judgement of the
authorized representative of the Partnership are necessary or prudent for the
proper administration and conservation of the investments of the Partnership.
The Partnership, acting by and through its authorized representative(s), will
have the authority to lend, borrow, lease, sell, and purchase property,
including undivided fractional interests in property, and upon such terms and
conditions as are reasonably prudent under the facts and circumstances then
existing. The Partnership will have the authority to guarantee the promissory
obligations of others with or without charging a fee therefor.
2.2. Specific Powers. Without limiting the general authority
given above in Section 2.1 hereof, the Partnership will have the authority to
hold, acquire and sell as investment property:
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(a) Publicly traded securities, including stocks,
bonds, warrants, futures, mutual funds, partnerships, real
estate investment trusts, diversified asset funds, including
international investments and investment funds.
(b) Interests in a closely held corporation,
partnership, limited liability company or trust, whether
registered or not registered for public sale, including any
corporation, partnership, limited partnership, limited
liability company, investment trust, or other entity, this
authority to further include: the acquisition of a general
partnership interest or limited partnership interest, the
execution of a partnership agreement in the capacity of a
general partner or as a limited partner, participation as a
member of a joint venture, or participation in any other form
of syndication for investment.
(c) Obligations of the United States government or of
any foreign government.
(d) Cash deposits, money market funds, brokerage
company investment and money market accounts, certificates of
deposit, savings accounts and checking accounts, without
limitation as to the location of the account or depository.
(e) Promissory notes, secured and unsecured,
including mortgage notes purchased at a discount.
(f) Land, improved and unimproved, whether presently
income producing or held for potential appreciation in value.
(g) Land, building and equipment leases.
(h) Minerals, mineral rights and working interests in
mineral producing property or property held for future
development.
(i) Equipment, implements, stock in trade, leasehold
improvements, and livestock.
(j) Annuities and insurance policies (including life
insurance policies).
In addition to the broad investment powers granted hereunder
and without in any way limiting these powers, the Partnership, acting by its
authorized representative(s), may with respect to real property of any kind,
wheresoever located, sell, convey, release, mortgage, encumber, lease,
partition, improve, manage, protect, and subdivide such property or any interest
therein or parts thereof and may dedicate for public use or vacate any
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subdivision or parts thereof. The Partnership is also authorized to
re-subdivide, contract to sell, grant options to purchase, sell on any terms,
convey, mortgage, pledge, or otherwise encumber such property, or any part
thereof, from time to time, in possession or reversion, by leases to commence
either presently or at some future time, and upon any terms and for any period
or periods of time including a term beyond the duration of this Agreement, and
to renew leases and options to purchase the whole or any part of any reversion.
These powers include the power to purchase or lease rights for
the exploration for and the removal of gas, oil and all other minerals. The
Partnership may likewise partition or exchange real property, or any part
thereof, for other real or personal property, grant easements or charges of any
kind, release, convey or assign any right, title or interest in or about an
easement appurtenant to the property alter, repair, add to or take from
buildings on the premises, purchase or hold real property, improved or
unimproved, or to act as trustee of any land trust of which the Partnership is a
beneficiary, to convey title to the real estate subject to such land trust and
to execute all documents pertaining to the property subject to such land trust
and act in all matters regarding such trust, and execute assignments of all or
any part of the beneficial interest in such land trusts.
The Partnership may serve as the general partner of a limited
partnership. The Partnership may form or invest in a trust, partnership,
corporation, or other organization in which it is a shareholder, partner,
member, beneficiary, or owner, including trusts formed by the Partnership to
acquire, own, manage, operate, sell, mortgage, and otherwise deal with the
property of the partnership located in the jurisdiction of organization or
located in another jurisdiction.
2.3 Formation of Trusts, Corporations, Partnership, Limited
Liability Companies. The partnership, acting by its General Partner, is
permitted and authorized to form, or to participate in the formation of, a trust
(revocable or irrevocable), corporation, partnership, limited partnership, joint
venture, and/or limited liability company, and to invest all or any part of the
Partnership property in one or more trusts (revocable or irrevocable),
partnerships, joint ventures, limited partnerships, corporations, limited
liability companies and/or other entities which are intended to accomplish any
one or more of the following objectives:
(a) The organization provides a greater protection to
the assets of the Partnership or protection of the Partnership
and its Partners from operating liabilities incident to the
conduct of a trade or business; and/or
(b) The organization provides for the convenient
management of property located in a jurisdiction other than
the state in which the Partnership is formed; and/or
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(c) The organization provides greater access to
investment opportunities, and to world-wide investment
markets.
The Partnership (or in the alternative, the General Partner of the Partnership)
may serve as the general partner of a limited partnership in which the
Partnership has made (or intends to make or otherwise acquire) an investment.
An investment may be in a closely held corporation,
partnership, limited partnership, joint venture, and/or limited liability
company even though federal and state law restrictions, or contractual
restrictions on ownership, transfer of interests, and liquidation contained in
the governing instrument or instruments, may cause the ownership interest of the
Partnership in a corporation, partnership, limited partnership or limited
liability company to have a fair market value which is less than the fair market
value of the assets contributed to the entity.
The formation of, or investment in, a trust (revocable or irrevocable),
corporation, partnership, limited partnership, joint venture, and/or limited
liability company is not restricted as to jurisdiction or duration.
The beneficiary of any trust created for the management and/investment of
partnership property will be the Partnership.
2.4. Charitable Remainder Trusts, Lead Income Trusts, and
Other Charitable Planning Opportunities. The Partnership may form, and/or
contribute to one or more charitable remainder trusts created under Section 664
of the Internal Revenue Code, a charitable lead income trust created under
Treas. Reg. Section 1.170A-6(c)(2)(i) and (ii); Treas. Reg. Section
25.2522(c)(2)(v) and (vi); Treas. Reg. Section 20.2055-2(e)(2)(v) and (vi), a
charitable foundation, a Section 509(a)(3) supporting organization, or any other
charitable organization described in each of the following sections of the
Internal Revenue Code: Section 170(b)(1)(A) [and, as an alternative, Section
170(b)(1)(E)]; Section 170(c); Section 2055(a); and Section 2522(a); and/or
Section 664 with regard to charitable remainder trusts.
In the case of a charitable remainder trust or charitable lead
income trust, the beneficiary for the non-charitable term of the trust will be
the Partnership.
If, and only as, permitted by the tax laws of the United
States with regard to a termination of the Partnership prior to the expiration
of the term of a charitable trust, the beneficiaries during the non-charitable
term, or of the non-charitable remainder (in the case of a charitable lead
income trust), will be the Partners of the Partnership at the time of its
termination according to their percentages and rights of ownership determined at
the time the Partnership terminates.
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Contributions to, and/or the formation of, a charitable
organization or trust will require the consent of at least seventy-five percent
(75%) in interest of all Partners.
ARTICLE III
TERM OF THE PARTNERSHIP
3.1. Term. The term of the Partnership shall commence upon the
execution of this Partnership Agreement and shall continue in existence until
December 31, 2029, unless the Partnership is sooner dissolved in accordance with
the provisions of this Agreement or by operation of law.
3.2. Continuation after Expiration of Term. The Partnership
shall continue from year to year as a general partnership following the
expiration of the term of years above prescribed. Unless other determined by
amendment to this Agreement, the general partnership and the rights of its
partners will be governed by the laws of the state of Ohio.
The Partners may at any time renew and extend the term of the
Partnership, as a limited partnership. If the Partners renew and extend prior to
the expiration of the term of years above prescribed, the required vote to renew
and extend is seventy-five percent (75%) in interest of all Partners, in which
event the action will be binding on all Partners.
A vote to renew and extend the term of the Schwarz Family
Limited Partnership, as a limited partnership, after the expiration of the term
of years above prescribed will require the affirmative consent of all Partners.
In the absence of unanimous affirmative consent, those Partners who wish to
continue may do so with full rights to reconstitute and continue this
Partnership. Those Partners who do not consent may withdraw as Partners.
Absent unanimous consent to reconstitute the Partnership as a
limited partnership, if the action to renew occurs after the expiration of the
term of years above prescribed, the liquidation provisions in Section 14.2 of
this Agreement shall apply as if the Partnership dissolved and is then
reconstituted as a limited partnership by the remaining partners who wish to
continue.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS
4.1. Initial Capital Contributions and Percentage Interests.
The Partners, their initial capital contributions and their units or percentages
of ownership are as identified on Exhibit B attached hereto. The Partnership,
acting by its General Partner, will be obligated to
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maintain a correct record of all Partners and the ownership interests of each
Partner, together with amended and revised schedules of ownership caused by the
addition of Partners and changes of ownership.
The Partnership, acting by its General Partner, or in the
alternative, all Partners by vote of at least seventy-five percent (75%) in
interest, will have the authority to adjust or reallocate the units or
percentages of ownership of all Partners based upon the balance of each
partner's capital account in relationship to the total of all the capital
accounts of all Partners. The reallocation of ownership percentages or units of
ownership is to be determined by dividing the balance of each Partner's capital
account by the total of all of the capital accounts.
4.2. Additional Capital. The Partnership, acting by its
General Partner, will have the authority to "call" on the Partners to contribute
additional capital when: (1) additional capital is reasonably needed to pay
existing or anticipated expenses of operation and administration; debt service
for any amounts borrowed by the partnership; insurance and tax payments; the
cost of acquiring, maintaining and selling property of the partnership; and, (2)
the calls for capital are not discriminatory, that is, when all Partners, both
general and limited, are required to contribute capital to the extent of each
Partner's units of ownership or percentage interest in the Partnership. A
required contribution of capital must be made within sixty (60) days from the
date the call is made. Except to the extent required by this Section 4.2, no
Partner shall be obligated to make any additional contributions.
If a Partner cannot, or does not, contribute capital in an
amount equal to his, her, or its units or percentage interest in the
Partnership, other Partners may pay the deficiency as an additional capital
contribution. In each such case, the Partnership, acting by and through its
General Partner, will have the authority to reallocate the units or percentages
of ownership of all Partners, increasing the units of ownership or percentage
interest of those who made contributions and decreasing the units of ownership
or percentage interest of those who did not make a full contribution. The
reallocation of ownership units or percentages is to be determined by dividing
the balance of each Partner's capital account by the total of all of the capital
accounts of all Partners.
No Partner shall be entitled to demand or receive the return
of his capital contribution. Except as specifically provided herein, no interest
or other return shall be paid on any capital contributions made to the
Partnership.
4.3. Partnership Units. There are 100 units of ownership. The
General Partner must own at least one unit of ownership. For example, if a
Partner owns more than one unit of ownership, one unit of ownership may be
classified as a general partnership unit and the remainder may be allocated to
his, her or its ownership as limited partner insofar as state law permits a
Partner to be both a general partner and a limited partner. The unit (or units,
if more than one) of ownership held by a Partner as a general partner is
non-transferable. The unit (or units, if more than one) classified as a general
partnership unit (or
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units, if more than one) will revert to limited partnership units at such time
as a partner ceases to serve as general partner for any reason.
A Limited Partner may not transfer legal or beneficial title
to property of the Partnership unless, supported by an affidavit of fact, the
Limited Partner acts pursuant to the limited authority prescribed by the laws of
the state of Ohio relative to winding up of the Partnership in the absence of a
qualified general partners.
4.4. Loans. The General Partner is authorized to cause the
Partnership to borrow money upon terms as the General Partner determines, in his
sole discretion, and to mortgage, pledge or hypothecate the assets of the
Partnership in connection with these borrowings.
ARTICLE V
PROFITS AND LOSSES
5.1. Definition of Profits and Losses. For all purposes of
this Agreement, "profits" and "losses" shall mean the taxable income and loss of
the Partnership as determined in accordance with the accounting methods followed
by the Partnership for federal income tax purposes, but: (a) Partnership profits
shall include any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits and Losses; and,
(b) if Partnership property is revalued pursuant to Section 1.704-1(b)(2)(iv)(f)
or (g) of the Regulations, profits and losses shall be adjusted for items of
depreciation, amortization, and gain or loss, as computed for tax purposes, so
as to take account of the variation between the adjusted tax basis and book
value of such property in the same manner as under Section 704(c) of the Code.
5.2. Distributive Shares. Except as otherwise provided in this
Article V, Profit and Loss, and each item thereof, shall be allocated to the
Partners in accordance with their Percentage Interests.
5.3. Effect of Sale or Other Disposition or Varying of
Partnership Interest. In the event a Partner sells or otherwise disposes of such
Partner's interest in the Partnership, or if such interest in the Partnership
otherwise varies during a fiscal year, income, gain, deduction, loss, and credit
with respect to that fiscal year and allocable to such Partner's interest in the
Partnership during that year shall be allocated among all the Partners who held
varying interests during that year. This allocation shall be made in the manner
provided for under Section 706 of the Code and the Regulations promulgated
thereunder. If optional methods of allocating are provided by Section 706 of the
Code and the Regulations promulgated thereunder, the General Partner, in his
sole discretion, shall select the method to be utilized by the Partnership.
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ARTICLE VI
DISTRIBUTIONS
6.1. Definition of Cash Flow. Cash flow shall be the net
profit or net loss of the Partnership determined in accordance with tax
accounting principles adjusted as follows:
(a) Depreciation of buildings, improvements and
personal property of any type shall not be considered a
deduction.
(b) Principal payments on all loans, deeds of trust,
mortgages, conditional sales contracts and other indebtedness
shall be considered a deduction.
(c) There shall be deducted such amount as the
General Partner determines is needed as a reasonable reserve
required to conduct the Partnership business or to pay
anticipated future expenses.
(d) Any other cash expenditures which have not been
deducted in determining net profits or net losses shall be
considered a deduction.
(e) There shall be added other cash receipts of the
Partnership which have not been taken into account in
determining net profits or net losses including, but not
limited to, proceeds from any refinancing of Partnership
loans.
6.2. Distributions of Cash Flow. At least once a year, the
cash flow of the Partnership, if any, may be distributed to the Partners in
accordance with their sharing ratios for determining the net profits and net
losses of the Partnership.
ARTICLE VII
CAPITAL ACCOUNTS
7.1. Creation. The Partnership shall create a separate
"Capital Account" for each Partner and shall maintain the account in accordance
with the capital accounting rules of Regulation Section 1.704-1(b)(2)(iv) as
illustrated in Section 7.2 and 7.3 hereof.
7.2. Credits to Capital Accounts. Each Partner's Capital
Account shall be credited with:
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(a) all cash contributed by such Partner to the
Partnership and the fair market value of all property
contributed by such Partner to the Partnership (net of
liabilities which are secured by such contributed property
that the Partnership is considered to assume or take subject
to under Section 752 of the Code); and,
(b) allocations to such Partner of profits, or any
item thereof, under ARTICLE V of this Agreement.
All contributions taken into account hereunder shall be deemed
to have occurred as of the last day of the calendar quarter in which such
contribution was made.
7.3. Deductions from Capital Accounts. Each Partner's Capital
Account shall be debited with:
(a) all cash distributed to such Partner and the fair
market value of all property distributed to such Partner (net
of liabilities secured by such property distributed that such
Partner is considered to assume or take subject to under
Section 752 of the Code);
(b) allocations to such Partner of losses (or any
item thereof) under ARTICLE V of this Agreement; and,
(c) such Partner's distributive share of expenditures
of the Partnership described in Section 705(a)(2)(B) of the
Code, as further clarified in Section 1.704-1(b)(2)(iv)(i) of
the Regulations.
The foregoing provisions and all other provisions of this
Partnership Agreement relating to the maintenance of Capital Accounts are
intended to comply with Section 1.704- 1(b) of the Regulations and shall be
interpreted and applied in a manner consistent with such Regulations. If the
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, then the
General Partner may make such modification.
All distributions taken into account hereunder shall be deemed
to have occurred as of the last day of the calendar quarter in which such
distribution was made.
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ARTICLE VIII
ADMINISTRATIVE PROVISIONS
8.1. Exclusive Management of the Partnership. The General
Partner shall have full and exclusive authority to manage and control the
business of the Partnership. The General Partner shall have all of the rights
and powers of a general partner as provided for in the Ohio Uniform Limited
Partnership Act (Chapter 1782, Ohio Revised Code) and as otherwise provided by
law, and any action taken by the General Partner shall constitute the act of and
serve to bind the Partnership. In dealing with the General Partner acting on
behalf of the Partnership, no person shall be required to inquire into the
authority of the General Partner to bind the Partnership. The General Partner
shall have personal liability for the obligations of the Partnership, except as
may be specifically limited by the laws of the state of Ohio or any other
jurisdiction in which the Partnership has qualified to do business. The
Partnership must have at all times at least one General Partner. No more than
three may serve as General Partner at the same time.
8.2. Specific Power of General Partner. The General Partner
shall have the right, power, and authority to act in the name of and on behalf
of the Partnership to do all things which, in the General Partner's judgment,
are necessary or desirable to carry out the management duties and
responsibilities. These rights, powers, and authority shall include, but shall
not be limited to, the following:
(a) Expenditures. The General Partner may incur and
pay out of Partnership funds all reasonable costs, expenses,
and obligations incurred on behalf of the Partnership.
(b) Employment of Agents. The General Partner may
employ and dismiss from employment any and all employees,
agents, management firms, independent contractors,
consultants, attorneys, and accountants, including any Partner
or any affiliate of any Partner.
(c) Sale of Property. The General Partner may sell,
exchange, lease, or otherwise dispose of, or grant options for
the sale, exchange, or other disposition of, all or any
portion of the Property.
(d) Borrow Money. The General Partner may borrow
money on behalf of the Partnership from any Partner on terms
no less favorable to the Partnership than are available to the
Partnership from unrelated commercial sources or from any
unrelated commercial source and give as security therefor any
or all or any part of the property of the Partnership.
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(e) Lend Money. The General Partner, in the General
Partner's discretion, may elect to lend funds to the
Partnership and to secure the repayment of the same with all
or any part of the property of the Partnership, all on terms
no less favorable to the Partnership than are available funds
of the Partnership. In making such loans, the General Partner
shall be treated as a creditor of the Partnership and not as a
Partner.
(f) Votes and Consents. The General Partner may cast
all votes and give all consents and approvals requested from
or afforded to the Partnership as a result of its ownership of
any legal or beneficial interest in any other entity.
(g) Prepayment and Refinancing of Liabilities. The
General Partner may prepay, in whole or in part, refinance,
recast, increase, modify, or extend any liability of the
Partnership, and, in connection therewith, execute any
extension or renewal of encumbrances on all or any part of the
property of the Partnership.
(h) Distribution of Funds. The General Partner may
collect and distribute funds to the Partners in accordance
with the provisions of this Agreement.
(i) Tax Elections. The General Partner may make any
and all elections for federal, state, and local tax purposes,
including, without limitation, any election to adjust the
basis of the Partnership's assets pursuant to Sections 734,
743, and 754 of the Code.
(j) Bank Accounts. The General Partner may open
accounts and deposit and maintain funds in the name of the
Partnership in any bank, savings and loan association, or
other financial institution, and shall designate all persons
authorized to make withdrawals from the accounts.
(k) Nonrecourse Obligations. The General Partner may
require that all Partnership obligations specifically state
that neither the General Partner, nor any of the General
Partner's affiliates, shall have any personal liability, but
rather that the person contracting with the Partnership must
look solely to the property of the Partnership for
satisfaction of such obligations.
(l) Insurance. The General Partner shall obtain and
maintain necessary insurance for the benefit of the
Partnership and the Partners.
(m) Litigation. The General Partner may control any
matters affecting the rights and obligations of the
Partnership, including the conduct of litigation and the
incurring of legal expenses in the settlement of claims and
litigation.
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(n) Establishment of Reserves. The General Partner
may establish cash reserves for working capital, capital
improvements, repairs, compensating balance requirements,
contingencies, or the funding of any cash requirements of the
Partnership.
(o) Agreements. The General Partner may enter into,
execute, amend, supplement, acknowledge, verify, deliver, and
perform any and all agreements, contracts, deeds, mortgages,
notes, security agreements, affidavits, consents, approvals,
certificates, and other instruments, and do all such other
acts, to the extent permitted by law, whether or not expressly
authorized herein, for such consideration and upon such other
terms and conditions which the General Partner deems necessary
or appropriate to pursue the business and carry out the
purposes of the Partnership in accordance with the terms of
this Agreement.
8.3. Specific Obligations of General Partners. The General
Partner shall, on behalf of and in the name of the Partnership, and in addition
to the general management obligations provided for in Section 8.1 of this
Agreement and the obligations of the General Partner provided for elsewhere in
this Agreement, have the following specific obligations:
(a) Management. The General Partner shall devote such
time to the Partnership's business as the General Partner, in
the General Partner's sole judgment, deems necessary or
desirable to manage and supervise the Partnership's business
and affairs.
(b) Securities Law Matters. The General Partner shall
prepare and file all appropriate reports for the Partnership
with federal and state securities authorities.
(c) Certificate of Limited Partnership; Government
Filings. The General Partner shall file the Certificate of
Limited Partnership of the Partnership in the form attached
hereto with the Secretary of the State of Ohio, and shall
arrange for the filing of any certificates or documents which
the General Partner determines to be necessary or appropriate
for the continuation, qualification, and operation of a
limited Partnership in any state in which the Partnership does
business. Subject to applicable law, the General Partner may
omit from any certificate or document, and from all amendments
or restatements thereto, the names and addresses of any
Limited Partner and information relating to any Capital
Contribution and shares of profits and compensation of any
Limited Partner, or state such information in the aggregate
rather than with respect to each individual Limited Partner.
In the event a General Partner is unwilling or unable to sign
a required amendment to the
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Certificate of Limited Partnership as evidence of the
withdrawal, removal, death, substitution or addition of a
General Partner, the amended certificate may be signed by: (1)
the remaining General Partner or Partners, if more than one
General Partner is then serving; (2) by any successor to a
General Partner designated in this Agreement or any amendment
thereto (i.e., the default successor if a new General Partner
is not elected within the time required by law after the
predecessor ceased to serve); or, (3) by a new General Partner
elected by the Partners within the time prescribed by law and
this Agreement. Each Partner serving, or to serve, as General
Partner does hereby appoint his, her or its successor, (or if
there is more than one General Partner serving at that time,
each remaining General Partner) as his, her or its attorney in
fact, and with the authority to sign the amended certificate
on his, her, or its behalf. In the event the laws of the state
of Ohio should require dissolution of the Partnership due to
the removal, resignation, death, disability, or inability of a
General Partner to continue service, or other event of
withdrawal, the Partnership will nonetheless be reconstituted
and will continue as a limited partnership, governed by this
Agreement, and without further action of the Partners.
(d) Tax Matters Partner. For the purpose of Section
6221, et seq., of the Code, the General Partner shall serve as
the "Tax Matters Partner" of the Partnership, and, as such,
shall have all of the rights and obligations given to a Tax
Matters Partner under those provisions. Each Limited Partner
hereby consents to Al Schwarz serving as the Tax Matters
Partner and agrees to execute, acknowledge, verify, and
deliver such further written instruments as Al Schwarz deems
necessary or appropriate to evidence such consent. The General
Partner, in the General Partner's capacity as the Tax Matters
Partner, is hereby authorized, but is not required, to take
the following actions:
i) Receive notice of the beginning of
administrative proceedings by the Internal Revenue
Service at the Partnership level.
ii) Receive notice of the final Partnership
administrative adjustment resulting from any Internal
Revenue Service administrative proceeding.
iii) To the extent and in the manner
provided by the Regulations, keep all Partners
informed of administrative and judicial proceedings
as to adjustments of Partnership tax items.
iv) Have authority to enter into a
settlement agreement with the Internal Revenue
Service with respect to the final determination of
Partnership tax items, which settlement shall bind
each Partner who is
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not entitled to receive notice of the proceedings
from the Internal Revenue Service, who is not a
member of a notice group defined in Section 6223(b)
(2) of the Code, and who has not timely filed a
statement with the Secretary of the Treasury (or in
his delegate) providing that the Tax Matters Partner
shall not have authority to bind the Partners, and
which settlement may be on such terms as the Tax
Matters Partner shall determine, in its sole
discretion, to be in the best interests of all
Partners as a group.
v) Have authority, in the Tax Matters
Partner's sole discretion, to decide whether or not
to commence judicial action for review of Partnership
items included in a notice of final Partnership
administrative adjustment, with the selection of the
appropriate court and the Partnership items to be
contested to be determined in the sole discretion of
the Tax Matters Partner.
vi) Have authority, in the Tax Matters
Partner's sole discretion, to determine whether to
appeal from an adverse decision in any tax related
action and to prosecute any such appeal.
vii) Have authority, in the Tax Matters
Partner's sole discretion, to intervene on behalf of
the Partnership in any judicial action commenced by
any other Partner or notice group defined in Section
6223(b)(2) of the Code as to Partnership tax items.
viii) Have authority, in the Tax Matters
Partner's sole discretion, to file a request with the
Internal Revenue Service for an administrative
adjustment, and to request judicial review on behalf
of the Partnership as to any part of a request for
administrative adjustment not allowed by the Internal
Revenue Service, with the selection of the
appropriate court, the Partnership items to be
contested, and the decision whether to appeal from an
adverse discretion of the General Partner.
ix) Have authority, in the Tax Matters
Partner's sole discretion, to enter into an agreement
with respect to all present or former Partners to
extend the period for assessing any tax which is
attributable to any Partnership item (and no other
person shall be authorized to enter into such an
agreement).
x) Upon receipt of a notice of beginning of
administrative proceedings from the Internal Revenue
Service, to furnish to the Internal Revenue Service
the name, address, profits interest, and taxpayer
identification number of each person who was a
Partner in the
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Partnership at any time during the applicable
Partnership taxable year, together with such revised
or additional information as may be required by law.
xi) Conform to any tax administrative
requirements as may be placed on the Tax Matters
Partner by the Code or the Regulations.
8.4. Reimbursement of Expenses and Compensation of General
Partner. The Partnership shall reimburse the General Partner, at cost, for any
direct or indirect expenses relating to the administration of the Partnership
(including, without limitation, expenses incurred by agents) and to the
acquisition, financing, and operation of the Partnership Property.
The Partnership shall reimburse the General Partner for
salaries (and related salary expenses) for services which are performed by a
Person (including the General Partner) for the Partnership and for services
which could be performed directly for the Partnership by independent parties,
such as legal, accounting, transfer agent, data processing, and duplicating
services. The amount charged to the Partnership in such cases shall not exceed
the amount which the Partnership would be required to pay to independent parties
for comparable services.
The General Partner shall be entitled to a reasonable annual
compensation for services rendered to the Partnership, reasonable compensation
to be measured by the time required in the management and administration of the
Partnership, the value of property under the General Partner's administration,
and the responsibilities assumed in the discharge of the duties of office. The
partners acting in concert, and by vote of not less than 70 percent in interest,
may award additional compensation to a general partner or may limit the
compensation to be paid to a general partner.
The Partnership's annual statements to Limited Partners shall
include an itemized breakdown of all reimbursements and salaries made to the
General Partner and to any affiliate thereof in the categories of salaries,
legal, accounting, data processing, and duplicating services. These
reimbursements of expenses shall be made regardless of whether any distributions
are made to the Limited Partners.
8.5 Bond. No one serving as General Partner will be required
to furnish a fiduciary bond or other security as a prerequisite to his, her, or
its service.
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ARTICLE IX
CONTROL BY GENERAL PARTNER
9.1. Reliance on Authority of Partners. In no event shall any
person dealing with the General Partner be obligated to see that the terms of
this Agreement have been complied with or be obligated to inquire into the
necessity or expediency of any act or action thereof and every contract,
agreement, deed, mortgage, lease, promissory note or other instrument or
document executed by the General Partner shall be conclusive evidence in favor
of any and every person relying thereon or claiming thereunder that (i) at the
time of the execution and/or delivery thereof, the Partnership was in full force
and effect, and (ii) such instrument or document was duly executed in accordance
with the terms and provisions of this Agreement and is binding upon the
Partnership and all of the Partners thereof, and (iii) the General Partner was
duly authorized and empowered to execute and deliver any and every such
instrument or document for and on behalf of the Partnership.
9.2. Good Faith Acts and Omissions. The General Partner shall
not be liable, responsible, or accountable, in damages or otherwise, to the
Partnership or to the Limited Partners for any act or failure to act on behalf
of the Partnership within the scope of the authority conferred on the General
Partner by this Agreement or by law, unless the act or omission was performed or
omitted fraudulently or in bad faith or constituted wanton and willful
misconduct or gross negligence.
9.3. Indemnification of General Partners. The Partnership
shall indemnify and hold harmless the General Partner from any against any loss,
expense, damage, liability, or injury suffered or sustained by the General
Partner by reason of any act or omission, arising out of the General Partner's
activities on behalf of the Partnership, including, but not limited to, any
judgment, award, settlement, reasonable attorney's fees, and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding, or claim, provided that the act or omission, or alleged act
or omission, upon which such actual or threatened action, proceeding, or claim
is based was not performed or omitted fraudulently or in bad faith or as a
result of wanton and willful misconduct or gross negligence by the General
Partner. The fact that the General Partner acted or omitted to act upon the
advice of legal counsel shall be conclusive evidence of its good faith in acting
or omitting to act. However, the General Partner shall not be required to have
obtained legal counsel in order to benefit from these indemnification
provisions.
The satisfaction of the obligations of the Partnership under
this Section shall be from, and shall be limited to, the assets of the
Partnership, and no Partner shall have any personal liability on account
thereof. The General Partner shall have the right to bill the Partnership for,
or otherwise require the Partnership to pay, at any time and from time to time
after the General Partner has become obligated to make payment therefor, any and
all amounts
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for which the General Partner is entitled to indemnification under this Section.
The Partnership shall pay any and all such bills and honor any and all such
requests for payment within ten days after such bill or request is received by
the Partnership. In the event that a final determination is made by any court of
competent jurisdiction that the Partnership is not so obligated in respect of
any amount paid by it to the General Partner, the General Partner shall refund
such amount within ten days of such final determination.
9.4. Limitation on a General Partner's Liability. Insofar as
state law will permit, a General Partner who succeeds another will be
responsible only for the property and records delivered by or otherwise acquired
from the preceding General Partner, and may accept as correct the accounting of
the preceding General Partner without duty to audit the accounting or to inquire
further into the administration of the predecessor and without liability for a
predecessor's errors and omissions.
ARTICLE X
POWERS, RIGHTS AND DUTIES OF LIMITED PARTNERS
10.1. Limitation of Liability. Except as otherwise required
under applicable law, no Limited Partner shall be personally liable in such
capacity for any loss or liability of the Partnership beyond the amount of such
Partner's actual Capital Contributions.
10.2. No Participation in Management. No Limited Partner
shall, in such capacity, participate in the operation, management, or control of
the Partnership's business, transact any business in the Partnership's name, or
have any power to sign documents for or otherwise bind the Partnership.
10.3. Voting Rights. Except to the extent required by
applicable law or the express terms of this Agreement, Limited Partners shall
have no right to vote in connection with, or to otherwise consent to the
transaction of any business by the Partnership.
ARTICLE XI
ACCOUNTING AND FISCAL AFFAIRS
11.1. Records and Books of Account. The fiscal year of the
Partnership shall end on December 31 of each calendar year. The General Partner
shall keep books of account for the Partnership at the principal office of the
Partnership. The General Partner shall retain the books of account for three
years after the termination of the Partnership. All decisions as to the
accounting methods to be used by the Partnership shall be made by the General
Partners, in the General Partners' sole discretion.
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11.2. Annual Reports. Within 120 days after the end of each
fiscal year of the Partnership, the General Partner shall deliver to each
Limited Partner, if requested in writing by the Limited Partner, an annual
report for the preceding year containing the following: (i) an annual accounting
of the Partnership as of the end of the Partnership's most current fiscal year,
including a balance sheet, statement of income, and statement of cash flow; and,
(ii) a report of the activities of the Partnership during the period covered by
the report. The report shall also set forth all distributions to Partners for
the applicable period. The General Partner may require, as a condition to
payment, a written and acknowledged statement from each distributee that the
accounting has been thoroughly examined and accepted as correct; a discharge and
release from any loss, liability, claim or question concerning the exercise of
due care, skill, and prudence of the General Partner in the management,
investment, retention, and distribution of property during the General Partner's
term of service, except for any undisclosed error or omission having basis in
fraud or bad faith; and an indemnity of the General Partner, to include the
payment of attorney's fees, from any asserted claim of any taxing agency,
governmental authority, or other claimant. Any Partner having a question or
potential claim may require an audit of the Partnership books and records as an
expense of administration. Failure to require the audit prior to acceptance of
the report, or the acceptance of payment, will operate as a final release and
discharge of the General Partner then serving except as to any error or omission
having basis in fraud or bad faith.
A General Partner, in making or preparing to make a partial or
final distribution, will have the authority to: (1) partition any asset or class
of assets and deliver divided and segregated interests to Partners; (2) sell any
asset or class of assets (whether or not susceptible to partition in kind), and
deliver to the Partners a divided interest in the proceeds of sale and/or
divided or undivided interests in any note and security arrangement taken as
part of the purchase price; and/or (3) deliver undivided interest in an asset or
class of assets to the Partners subject to any indebtedness which may be secured
by the property.
The Partnership will continue beyond its scheduled termination
date for a time reasonably necessary to conclude the administration of the
Partnership, pay expenses of termination and to distribute the Partnership
property to those entitled thereto.
11.3. General Disclosure. The General Partner shall keep the
Limited Partners reasonably informed concerning the general state of the
business and financial condition of the Partnership, and shall, upon the
reasonable request of any Limited Partner, furnish full information, accounts
and documentation concerning the general state of the business and financial
condition of the Partnership.
11.4. Tax Information and Elections. Within 120 days after the
end of each fiscal year of the Partnership, the General Partner shall deliver to
each Limited Partner a statement for such fiscal year showing all items of
income, gain, loss, deduction, and credit of the Partnership for federal income
tax purposes and the allocable share of each Partnership Interest thereof,
together with all other information regarding the Partnership necessary for the
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preparation of the Limited Partners' federal income tax returns. The General
Partner shall cause all tax returns and reports required to be filed by the
Partnership to be prepared and timely filed with the appropriate authorities and
shall furnish to each Limited Partner such tax returns and reports promptly
after the filing of the same.
ARTICLE XII
DEATH, WITHDRAWAL, BANKRUPTCY, INCAPACITY
OR REMOVAL OF A GENERAL PARTNER
12.1. Death, Withdrawal, Bankruptcy, Incapacity or Removal of
a General Partner.
(a) If a General Partner dies, withdraws, becomes
bankrupt or incapacitated, or is removed, the Partnership
shall not dissolve, unless at the conclusion of 90 days from
the date of such event, the Partnership does not have at least
one other General Partner which agrees to continue the
business of the Partnership. If there is no other General
Partner, the Partnership shall continue in existence, unless
within 90 days from the date of such event, the Limited
Partners do not unanimously agree in writing to continue the
business of the Partnership and to the appointment of one or
more Substitute General Partners who shall make Capital
Contributions to the Partnership and acquire such a Percentage
Interest in the Partnership as shall be determined by
agreement among such Substitute General Partner(s) and all of
the Limited Partners. If the Limited Partners elect not to
continue the Partnership within 90 days after the event giving
rise to the election, the Partnership shall wind up its
affairs and dissolve as provided in Section 14.2.
(b) If the Limited Partners elect to continue the
Partnership, the incapacitated, withdrawn, removed, or
bankrupt General Partner or the successor in interest of the
deceased General Partner shall become a Limited Partner with
the same Percentage Interest and share of net profits, net
losses and cash flow of the Partnership as before the event
and shall have all the rights of a Limited Partner. If a
Limited Partner is an individual person, the personal
representative or representatives of an incapacitated Limited
Partner, acting under a durable power of attorney or Letters
of Guardianship, may exercise all of the Limited Partner's
rights and voting authority for and on behalf of his or her
principal and will be entitled to receive distributions of
cash or other property from the Partnership for and on behalf
of the Limited Partner.
(c) If a successor General Partner(s) is elected and
admitted the Partnership shall continue as provided for under
the terms of this Agreement.
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A successor General Partner(s) shall have all the rights of
the original General Partner.
(d) A General Partner may withdraw from the
Partnership upon 90 days written notice to the Limited
Partners. The effective date of withdrawal shall be 90 days
after receipt of the notice by the Limited Partners.
12.2. Admission of a Substitute General Partner. A Person
shall be admitted as a Substitute General Partner of the Partnership only if all
of the following terms and conditions are satisfied:
(a) each of the Partners has given consent in writing
to the admission of such person;
(b) any such Person makes such Capital Contribution
to the Partnership and acquires such a Percentage Interest in
the Partnership as is determined by agreement among such
Substitute General partner, the other General Partner(s) (if
any) and all of the Limited Partners;
(c) the Person accepts and agrees to be bound by the
terms and provisions of this Agreement by executing a
counterpart hereof and such other documents or instruments as
may be required or appropriate in order to effect the
admission of such person as a Substitute General Partner, and
an amendment to the Certificate evidencing the admission of
such Person as Substitute General Partner has been filed for
recordation;
(d) if the Person is a corporation, it has provided
the Partnership with evidence satisfactory to counsel for the
Partnership of its authority to become a Substitute General
Partner and to be bound by the terms and provisions of this
Agreement; and
(e) counsel for the Partnership has rendered an
acceptable opinion that the admission of the Person is in
conformity with the Act and that none of the actions taken in
connection with the admission of the Person will cause the
termination or dissolution of the Partnership or will cause it
to be classified other than as a partnership for federal
income tax purposes.
12.3. Payment to Withdrawn General Partner. On the withdrawal
of a General Partner, the General Partner's interest in the Partnership shall be
purchased by the Partnership, unless the Partnership is dissolved as provided in
this Agreement. The General Partner shall be entitled to receive the fair market
value of the General Partner's interest in the Partnership, determined by
agreement between the General Partner or his representative and the Partnership,
or if they cannot agree, by arbitration in accordance with the then current
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rules of the American Arbitration Association. For this purpose, the fair market
value of the interest of the General Partner will be the amount the General
Partner would have otherwise received had the Partnership dissolved and
liquidated. Payment shall be made in cash within 90 days of the determination of
the value of the General Partner's interest in the Partnership.
12.4 Removal of a General Partner. A General Partner may be
removed from office for cause by the affirmative vote of at least seventy
percent (75%) in interest of all Partners acting in concert. The term "for
cause" will mean and include: any material act of self dealing by a General
Partner; any material act constituting gross negligence or intentional fraud; or
any act constituting the willful and intentional disregard of a directive of the
Partners pursuant to a vote on a matter which the Partners have a vote under
this Limited Partnership Agreement or under the laws of the state of Ohio. The
term "material" identifies a significant monetary damage to the Partnership as
the result of the act or omission to act by a General Partner constituting self
dealing, gross negligence or fraud. The term does not include incidental or
insignificant monetary damage to the Partnership; monetary damages incurred by
someone who is not a Partner and for which the Partnership is not liable; nor an
intangible loss or damage which cannot be valued under the fair market valuation
standards of federal tax law.
If the issues of self dealing, gross negligence or fraud and
material damage to the Partnership are finally resolved against the General
Partner as the result of a conclusive fact finding by the court or a jury under
the laws of the state of Ohio, the voting attributes of a General Partner's
units of ownership, both general and limited, may be disregarded in obtaining
the required vote to remove the General Partner.
ARTICLE XIII
TRANSFER OF A PARTNERSHIP INTEREST
13.1. Restrictions on Transfers.
THE OWNERSHIP AND TRANSFERABILITY OF INTERESTS IN THE PARTNERSHIP, BOTH GENERAL
AND LIMITED, ARE SUBSTANTIALLY RESTRICTED. NEITHER RECORD TITLE NOR BENEFICIAL
OWNERSHIP OF A UNIT OR PERCENTAGE INTEREST OF ANY PARTNER MAY BE TRANSFERRED OR
ENCUMBERED WITHOUT THE CONSENT OF AT LEAST SEVENTY-FIVE PERCENT (75%) IN
INTEREST OF ALL PARTNERS.
The Partnership is formed by those who know and trust one
another, who will have surrendered certain management rights (in exchange for
limited liability in the case of a Limited Partner) or who will have assumed
sole management responsibility and risk (in the case of a general partnership
interest) based upon their relationship and trust. Capital is also
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material to the business and investment objectives of the Partnership and its
federal tax status. An unauthorized transfer of a Partner's interest could
create a substantial hardship to the Partnership, jeopardize its capital base,
and adversely affect its tax structure. These restrictions upon ownership and
transfer are not intended as a penalty, but as a method to protect and preserve
existing relationships based upon trust and the Partnership's capital and its
financial ability to continue.
The ownership and transfer of a limited partnership interest
is further subject to the following disclosures, limitations and exceptions:
(a) No Partner shall pledge, sell, assign, transfer
or in any manner dispose of or encumber all or any portion of
or interest in his/her/its Partnership interest (including,
but not by way of limitation, disposition by way of intestacy,
will, gift, bankruptcy, execution, hypothecation, seizure and
sale by legal process, operation of law, or otherwise) except
and only in strict accordance with the conditions, rights,
obligations and options, hereinafter set forth.
(b) The foregoing restrictions on transfers, however,
shall not apply to the following:
(i) a transfer from a Partner of all or any
portion of his/her/its Partnership interest to
another Partner at any time, for whatever price and
upon whatever terms and conditions as they may agree;
or
(ii) a transfer without consideration from a
Partner, of all or any portion of his/her/its
Partnership interest to a trustee of a trust for the
exclusive benefit of a Partner and/or a Partner's
children or lineal descendants.
(c) Any transfer pursuant to Paragraph 13.1 (b) shall
be subject to the following:
(i) Any further attempted transfer by the
transferee of the Partner shall be subject to the
restrictions and options herein set forth as if such
attempted transfer involved a Partnership interest
then owned or held by such Partner; and
(ii) Upon the death of a Partner, a
Partnership interest previously transferred pursuant
to Paragraph 13.1(b)(ii) shall be subject to the
obligation to purchase and sell as hereinafter set
forth to the same extent as if such Partnership
interest were still owned by such deceased Partner at
the time of his or her death.
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13.2. Lifetime Transfers.
(a) If a Partner ("Transferring Partner") during the
existence of this Agreement attempts to pledge, sell, assign,
transfer, dispose of or encumber all or any portion of
his/her/its Partnership interest (other than as permitted by
Paragraph 13.1 (b) above), the Transferring Partner shall
cause to be delivered to the principal office of the
Partnership and the other Partners (the "Remaining Partners"),
a notice thereof in writing containing the name and address of
each proposed transferee and all of the terms of the proposed
transfer (including without limitation, the purchase price of
the proposed transfer and a copy of the bona fide offer),
which shall constitute an offer to sell such Partnership
interest to the Partnership and the Remaining Partners.
(b) Within thirty (30) days after the receipt of an
offer, the Partnership may, at its option, elect to purchase
all, but not less than all, of the interest in the Partnership
offered by the Transferring Partner. The purchase price for
the Transferring Partner's Partnership interest shall be
determined in accordance with the provisions set forth in
Section 13.4. hereof and such purchase price shall be paid in
accordance with the terms and conditions set forth in Section
13.5. hereof. If such offer is not accepted by the
Partnership, the Remaining Partners may, within sixty (60)
days after the receipt of such offer, at their option,
purchase on a pro rata basis or such other basis as they may
agree upon, all of the interest in the Partnership offered by
the Transferring Partner on the same terms which the
Partnership could have purchased such interest. The
Partnership or the Remaining Partners shall exercise its or
their election to purchase by giving notice thereof to the
Transferring Partner.
(c) If neither the Partnership nor the Remaining
Partners exercise the option granted hereunder within said
sixty (60) day time period, then the Transferring Partner,
may, for a period ending on the thirtieth (30th) day after the
expiration of such time period, proceed with the proposed
transfer at the price and on such terms and conditions as
contained in the Transferring Partner's notice to the
Partnership and the Remaining Partners, by delivering to the
Partnership a conformed copy of the final agreement of
transfer, together with his/her/its Affidavit that such copy
contains all of the terms and conditions of the agreement, or
if there is not a written agreement of transfer, his/her/its
Affidavit setting forth all the terms and conditions of the
transfer.
13.3. Death of a Partner.
(a) Within ninety (90) days of the death of a Partner
("Deceased Partner"), the Deceased Partner's legal
representative shall deliver a written
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notice to the Partnership setting forth the date of the
Deceased Partner's death and the person(s) to whom the
Deceased Partner's Partnership interest is to be transferred
as a result of the Deceased Partner's death ("Death Notice").
In the event the proposed transfer of some or all of the
Deceased Partner's Partnership interest is transferred other
than as permitted by Section 13.1. (b) above, the Partnership
may, at its option, elect to purchase all, but not less than
all, of the Deceased Partner's interest in the Partnership.
The Purchase Price for the Deceased Partner's Partnership
interest shall be determined in accordance with the provisions
of Section 13.4. hereof, and such purchase price shall be paid
in accordance with the terms and conditions set forth in
Section 13.5. hereof. If the Partnership does not exercise its
option to purchase all of the Deceased Partner's Partnership
interest, the other Partners ("Surviving Partners") may,
within sixty (60) days after the receipt of such offer, at
their option, purchase on a pro-rata basis or such other basis
as they may agree upon, all of the Deceased Partner's interest
in the Partnership on the same terms which the Partnership
could have purchased such interest. The Partnership or the
Surviving Partner shall exercise his/her/its or their election
to purchase by giving notice thereof to the Deceased Partner's
legal representative.
(b) If neither the Partnership nor the Surviving
Partners exercise the option granted hereunder within the
sixty (60) day period, then the Deceased Partner's legal
representative, may proceed with the transfer of the Deceased
Partner's Partnership interest to the person(s) set forth in
the Death Notice.
13.4. Purchase Price.
(a) Except as otherwise provided in Section 13.4.(b),
the Purchase Price for an interest in the Partnership
purchased pursuant to an option arising under the terms of
this Agreement shall be the fair market value of the
Partnership interest as determined by an appraisal of the
Partnership interest to be transferred or sold. In conducting
such appraisal, the Partnership shall choose a qualified
appraiser and such appraiser shall determine the fair market
value of the Partnership interest. The Partnership shall pay
the cost of the appraiser.
(b) Notwithstanding the provisions of Section
13.4.(a) above, if a Partnership interest is purchased
pursuant to an option granted in Section 13.2., the Purchase
Price for such Partnership interest shall be, at the option of
the Partnership or the Remaining Partners, either (a) the
price applicable under the provision Section 13.4.(a) hereof,
or (b) if the proposed transfer is a sale or exchange for
consideration, the same as set forth in the bona fide offer
for such shares, payable upon the same terms and conditions
set forth in such bona fide offer.
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13.5. Payment of Purchase Price.
(a) Except as provided in Section 13.4.(b) hereof (in
the case of a purchase at the price and upon the terms and
conditions contained in the bona fide offer), the Purchase
Price for any Partnership interest purchased hereunder shall
be at the election of each purchasing Partner or the
Partnership;
(i) In full at the Closing defined in
Section 13.7. hereof;
(ii) Upon terms and conditions mutually
agreeable to the selling Partner and the purchasing
Partner and/or the Partnership; or
(iii) By each purchaser making an initial
cash payment of twenty percent (20%) of the Purchase
Price of the portion of the selling Partner's
Partnership interest purchased by him/her/it, within
four (4) months after the exercise of the option
pursuant to which the sale is made. The unpaid
balance of the purchase price shall be paid in five
(5) equal, consecutive annual installments, with the
first installment due twelve (12) months after the
due date of the initial cash payment, and all
subsequent installments shall be due on the same date
in each subsequent year until payment is made in
full. Interest on the unpaid portion of the Purchase
Price shall be payable as provided in Section
13.5.(b) below from and after the due date of the
initial cash payment.
(b) The obligations of each purchaser to pay the
balance of the purchase price for the interest purchased by
such purchaser, shall be evidenced by a Promissory Note,
payable to the seller. The unpaid balance of the purchase
price shall bear interest at an annual rate equal to the prime
rate set forth by National City Bank on the first day of
January each year. Interest, at the rate determined above,
shall accrue from the due date of the initial cash payment and
shall be computed and payable annually on the same date as the
installments of principal are due. It shall be inserted in
such note the date thereof, the balance of the purchase price
and the principal amount of the note, and other appropriate
provisions. Upon final payment in full of the note, the holder
thereof shall cancel and return it to the maker.
13.6. Exercise of Option.
(a) An option to purchase a Partnership interest
pursuant to the terms of this Agreement, shall be exercised by
giving to or serving upon the necessary parties, an instrument
in writing to that effect signed by the person exercising such
option.
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(b) If a person who is granted an option to purchase
a Partnership interest pursuant to the terms of this Agreement
is not living at the time of the event giving rise to such
option (or is then living but dies prior to the expiration
date for such option without exercising it), then the option
and such person shall be deem to be unexercised and terminated
upon the occurrence of such event or upon such persons
subsequent death, as the case may be.
13.7. Closing. The closing of any purchase and sale hereunder
("Closing") shall take place at the offices of the Partnership at a date
designated by the selling and purchasing parties, which date shall not be more
than six (6) months following the receipt of the notice required by Section
13.2.(a) or the Death Notice required by Section 13.3.(a). The Transferring
Partner or his legal representative may extend the six (6) month period set
forth in this Section 13.7, for a period not to exceed an additional six (6)
month period. The Partnership interest purchased pursuant to this Agreement
shall be transferred to the Partnership or the purchasing Partner on the date of
the Closing.
13.8. Assignment of Income. This Section shall not prohibit
the assignment of income from an interest in the Partnership by a Partner during
his lifetime, it being understood that any such assignee shall not have any
right to vote or otherwise participate in the management of the Partnership.
13.9. Substitute Limited Partner. Except as provided elsewhere
in this Agreement, no Transferee of the whole or any portion of a Limited
Partner's interest in the Partnership shall have the right to become a
substitute Limited Partner in place of the transferor unless:
(a) the written consent of the General Partner to
this substitution shall be obtained, which consent may be
withheld in his sole and absolute discretion;
(b) the instrument of transfer shall be in a form and
substance satisfactory to the General Partner;
(c) the transferor and Transferee named therein shall
execute and acknowledge any other instrument or instruments as
the General Partner may deem necessary or desirable to
effectuate the admission, including but not limited to a power
of attorney in the form as may be required by the General
Partner;
(d) the Transferee shall accept, adopt and approve in
writing all of the terms and provisions of this Agreement as
the same may have been amended;
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(e) the Transferee shall pay or, at the election of
the General Partner, obligate himself/herself/itself to pay
all reasonable expenses connected with his admission,
including but not limited to the cost of preparing, filing and
publishing any amendment of the Certificate of Limited
Partnership to effectuate such admission; and
(f) by the transfer, the transferor does not violate
the registration provisions of the Securities Act of 1933, as
amended, or would not be in violation of any state securities
or "Blue Sky" law.
13.10. Securities Law Restrictions on Transfer. THE LIMITED
PARTNER INTERESTS REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. NO LIMITED PARTNER
INTEREST MAY BE OFFERED FOR SALE, SOLD DELIVERED AFTER SALE, TRANSFERRED,
PLEDGED, OR HYPOTHECATED TO ANY PERSON OTHER THAN THE PARTNERSHIP IN ABSENCE OF
REGISTRATION, QUALIFICATION, OR AN EXEMPTION THEREFROM. IN ENTERING INTO THIS
AGREEMENT, A LIMITED PARTNER HAS BEEN PROVIDED WITH, AND HAS REVIEWED, ALL
INFORMATION AND MATERIALS CONCERNING THE PARTNERSHIP, AND ITS BUSINESS AND
OPERATIONS, DEEMED NECESSARY BY A LIMITED PARTNER.
13.11. Tax Law Restrictions on Transfers. No Partner may,
during any twelve month period, make any transfer of all or any part of any
Partnership Interest in the Partnership if the transfer would, when considered
with all other transfers during the applicable twelve month period, cause a
termination of the Partnership for federal income tax purposes. Furthermore, no
Partner may transfer all or any part of any such interest in the Partnership
unless the General Partner determines, after consultation with legal counsel of
its choice, that such transfer will not jeopardize the continued ability of the
Partnership to qualify as a "Partnership" for federal income tax purposes.
ARTICLE XIV
DISSOLUTION AND TERMINATION OF THE PARTNERSHIP
14.1. Right to Dissolve the Partnership. Except as provided in
Section 12.1, no Partner shall have the right to cause dissolution of the
Partnership before the expiration of the term for which it is formed. The
Partnership shall be dissolved before the expiration of its term by election by
a unanimous vote of the Partners. A reorganization of the Partnership as a
general partnership, corporation, limited liability company, or other
organization before the
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expiration of the term of years set forth herein will require the affirmative
consent of all Partners.
14.2. Winding Up the Partnership. Upon the termination and
dissolution of the Partnership as provided in this Agreement, the Partnership
shall immediately commence to wind up its affairs. The Partners shall continue
to share net profits or net losses during liquidation in the same proportion as
before dissolution. After the allocation of gains and losses as provided for in
Section 14.3, the proceeds from liquidation of the Partnership assets shall be
applied as follows:
(a) Payment to creditors of the Partnership,
including Partners who are creditors, to the extent permitted
by law in satisfaction of liabilities of the Partnership.
(b) Payment to Partners for loans, if any, made by
them to the Partnership.
(c) To each Partner with a positive balance in
his/her/its Capital Account, in an amount equal to the balance
of his/her/its Capital Account, provided that if the total
amount to be distributed under this step is less than the
total of the positive balance on all Capital Accounts, then to
each Partner with a positive balance in his/her/its Capital
Account in the proportion that his/her/its Capital Account
balance bears to the total of the positive balances in all
Capital Accounts.
(d) Any Partner with a deficit balance in his/her/its
Capital Account after the above allocations shall pay that
deficit to the Partnership immediately. The deficit shall be
allocated as provided in (c) above.
14.3. Allocation of Gains or Losses Upon Sale or Dissolution.
Gains and losses recognized by the Partnership from the sale, exchange or other
distribution of its assets shall be allocated in accordance with each Partners'
Percentage Interest in the Partnership determined under Section 4.1.
ARTICLE XV
AMENDMENTS
Any amendment to this Agreement which, extends the term of
years of the Partnership as a limited partnership, provides for the termination
of the Partnership as a limited partnership prior to the termination of its
prescribed term, changes the voting rights of
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the Partners, changes the distribution rights of the partners will require the
affirmative consent of all Partners.
Voting rights with regard to any other amendment or change will be as
specifically prescribed by this agreement or, if voting rights are not
prescribed, then any change will require the affirmative action of at least
seventy-five percent (75%) in interest of the Partners.
ARTICLE XVI
COUNTERPARTS
This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original copy, and all of which together shall
constitute one agreement binding on all parties hereto, notwithstanding that all
the parties shall not have signed the same counterpart, except that no
counterpart shall be binding unless signed by a General Partner. Each Limited
Partner, in accepting this Agreement, makes, constitutes and appoints the
General Partner, with full power of substitution, as his, her, or its
attorney-in-fact and personal representative to sign, execute, certify,
acknowledge, file and record the Certificate of Limited Partnership, and to
sign, execute, certify, acknowledge, file and record all appropriate instruments
amending this Agreement and the Certificate of Limited Partnership on behalf of
the Limited Partner. In particular, a General Partner as attorney-in-fact may
sign, acknowledge, certify, file and record on the behalf of each Limited
Partner such instruments, agreements, and documents which: (1) reflect the
exercise by the General Partner of any of the powers granted to a General
Partner under this Agreement; (2) reflect any amendments made to this Agreement;
(3) reflect the admission or withdrawal of a General Partner or Limited Partner;
and, (4) as may otherwise be required of the Partnership or a Partner by the
laws of the state of Ohio, federal law, or the laws of any other applicable
jurisdiction. The power of attorney herein given by each Limited Partner is a
durable power and will survive the disability or incapacity of the principal.
ARTICLE XVII
MISCELLANEOUS
17.1. Voting by Partners. Whenever a vote or consent of
Partners on a particular matter is authorized or required pursuant to the terms
of this Agreement or by applicable law, each Partner entitled to vote on or
consent to such matter shall have a number of votes proportionate to the total
number of votes to be cast as is equal to such Partner's proportionate
Partnership Interest in the Partnership over the proportionate Partnership
Interests in the Partnership held by all Partners entitled to vote on or consent
to such matter. Any vote by or consent of Partners may be effected by way of an
action by written consent
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which states, with reasonable particularity, the matter voted upon or consented
to, if such written consent is executed during any consecutive period of thirty
(30) days by Partners holding the requisite amount of Partnership Interests in
the Partnership. A Partnership Interest held by a Transferee of a Limited
Partner who is not admitted as a substituted Limited Partner shall not be voted
or counted as outstanding for voting purposes.
17.2. Meetings of Partners. The General Partner may, from time
to time, as necessary or desirable, and shall, upon the request of Limited
Partners who collectively own at least seventy-five percent (75%) of all Limited
Partner Interests in the Partnership, call a meeting of the Partners, which
meeting shall be held at a Partnership office. Notice of any such meeting shall
be given to each Partner not fewer than ten (10) days nor more than sixty (60)
days prior to the date of the meeting, and shall state the time, place, and
purpose of the meeting. The General Partner shall fix a record date for
determining Partners entitled to vote at the meeting, which record date shall be
not more than ten (10) days prior to the date of the meeting. Any Partner may,
by instrument in writing duly executed, appoint a proxy or other
attorney-in-fact to attend any meeting of Partners and to vote the Partnership
Interest of the Partner designating such proxy or other attorney-in-fact.
17.3. Waiver of Right to Decree of Dissolution, Inventory, and
Appraisal. Each Partner and each Transferee acknowledges that irreparable damage
would be done to the goodwill and reputation of the Partnership if any Partner
or Transferee should bring an action in court to liquidate the Partnership prior
to the time therefor specified in this Agreement. Accordingly, each Partner and
each Transferee waives and renounces such Person's right, if any, to a court
decree of dissolution or to seek the appointment by the court of a liquidator
for the Partnership. Each Partner and each Transferee acknowledges and agrees
that the provisions of this Agreement shall be effective to dispense with the
inventory and appraisement of Partnership assets, and with the sale of a
Partnership Interest in the Partnership, which might otherwise be provided for
under any applicable law, including, without limitation, Ohio Revised Code
("O.R.C.") Chapter 1779 and O.R.C. Section 1775.41. Each Partner and each
Transferee also acknowledges and agrees that the rights specified in this
Agreement, including rights to distributions at the times specified in this
Agreement, are in lieu of any right to receive the fair value of a Partnership
Interest within a reasonable time following any withdrawal, as provided for in
O.R.C. Section 1782.34.
17.4. Waiver of Right to Partition. Each Partner and each
Transferee irrevocably waives any rights any such Person may have to maintain
any action for partition with respect to the assets of the Partnership.
17.5. Notices. Whenever any party hereto or any other Person
affected hereby desires or is required to provide any notice, demand, or request
with respect to this Agreement, each such communication shall be in writing and
shall be effective only if it is delivered by personal service (which shall
include delivery by delivery service, express mail
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delivery service, telecopy, or telefax) or mailed, by United States certified
mail, postage prepaid, and addressed as follows:
If to the Partnership, to: The Partnership Address
Attn: General Partner
If to any Partner, to: The name and address of
such Partner on record
with the Partnership
If to any other Person, to: The name and address of
such Person on record
with the Partnership
Such communications, when personally delivered, shall be effective upon receipt,
but, if sent by certified mail in the manner set forth above, shall be effective
two (2) business days following deposit in the United States mail. Any party
hereto, the Partnership, or any other Person entitled to notice hereunder may
change its address for such communications by giving notice thereof to the
Partnership in accordance with the requirements of this Section. Each Partner
hereby waives any right of such Partner pursuant to O.R.C. Section 1782.16 to
receive a copy of the filed Certificate of Limited Partnership or any amendment
thereto.
17.6. Entire Agreement. This Agreement, together with the
Exhibits attached hereto, constitute the entire understanding and agreement of
the parties hereto with respect to the subject matter hereof, and supersede all
prior written and all prior and contemporaneous oral agreements, understandings,
inducements, and conditions, express or implied, among the parties with respect
thereto. The express terms of this Agreement control and supersede any course of
performance or usage of trade inconsistent with any of the terms hereof.
17.7. Successors and Assigns. This Agreement shall be binding
upon each party hereto, and the respective proper successors and assigns of each
such party, each of whom shall be entitled to enforce performance and observance
of this Agreement, to the same extent, in the case of successors and assigns, as
if they were parties hereto; provided, however, that no right or duty provided
for herein shall be assigned or delegated by a party hereto except to the extent
assignment or delegation is expressly authorized pursuant to the terms of this
Agreement.
17.8. Cumulative Remedies. The remedies provided in this
Agreement are cumulative, and not exclusive of any remedies provided by law or
in equity. Upon the occurrence of any breach of the provisions of this
Agreement, any Person with a right to seek a remedy for such breach may elect to
exercise any one or more of such remedies, and such election shall not waive or
cause any such Person to have elected not to subsequently exercise any other
such remedies which may be available.
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17.9. Specific Performance. Each party hereto or other Person
entitled to enforce the terms of this Agreement, (a "Non-Defaulting Person")
specifically acknowledges that a breach of this Agreement by any other party
hereto or any other Person subject to the terms of this Agreement (a "Defaulting
Person") will cause continuing and irreparable harm to the Non-Defaulting
Person. Therefore, each Non-Defaulting Person with a right to enforce the terms
of this Agreement, shall, in addition to any other rights or remedies available
to it, at law or in equity, have the right to apply to a court of competent
jurisdiction for an injunction to restrain the violation or continuing violation
of this Agreement by such Defaulting Person.
17.10. Effect of Delay and Waivers. No delay or omission to
exercise any right or power accruing prior to or upon any breach, omission, or
failure of performance hereunder shall impair any such right or power, or shall
be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the parties hereto and other Persons with rights to enforce the
provisions of this Agreement to exercise any remedy now or hereafter existing
pursuant to this Agreement, at law or in equity, it shall not be necessary to
give any notice, other than such notices as may be expressly required pursuant
to the terms of this Agreement. In the event of any breach of any provision of
this Agreement by a party hereto or any other Person subject to the terms of
this Agreement, thereafter waived by another party hereto or other Person
entitled to enforce the terms of this Agreement, such waiver shall be limited to
the particular waiving party or other waiving Person and the particular breach
in question and no other. No waiver or release of any term or provision of this
Agreement shall be established by conduct, custom, or course of dealing, but
solely by a document in writing duly authorized and executed by the applicable
party or other Person.
17.11. Absence of Third Party Beneficiary Rights. No provision
of this Agreement is intended or shall be construed to provide or create any
third party beneficiary right or any other right of any kind in any client,
customer, affiliate, insurer, lender, shareholder, partner, officer, director,
employee, or agent of any party hereto, or in any other Person, unless
specifically provided otherwise herein, and, except as so provided, all terms
and provisions hereof shall be personal solely among the parties to this
Agreement and their proper successors and assigns.
17.12. Severability. If any provision of this Agreement is
ultimately determined to be invalid or unenforceable, such provision shall be
deemed limited by construction in scope and effect to the minimum extent
necessary to render the same valid and enforceable, and, in the event no such
limiting construction is possible, such invalid or unenforceable provision shall
be deemed severed from this Agreement without affecting the validity of any
other term or provision hereof.
17.13. Time of the Essence. Time is of the essence in the
performance of this Agreement.
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<PAGE>
17.14. Further Assurances. Each party hereto, and each other
Person subjection to the terms of this Agreement, shall, from time to time
following the date and during the term hereof cooperate fully with the
Partnership, and will execute such additional instruments, documents, and
agreements, and will give such further written assurances, as may reasonably be
requested by the Partnership to carry out and fulfill all of the intents and
purposes of this Agreement.
17.15. Governing Law. This Agreement shall be interpreted and
construed in accordance with the laws of the state of Ohio.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement the day and year first above written.
GENERAL PARTNERS: LIMITED PARTNERS:
THE ALBERT L. SCHWARZ
FAMILY TRUST
By:/s/ Albert L. Schwarz /s/ Albert L. Schwarz
_____________________________ _______________________________
Trustee ALBERT L. SCHWARZ
/s/ Mary C. Schwarz
______________________________
MARY C. SCHWARZ
/s/ Juliana M. Spaeth
________________________________
Witness
/s/ Juliana M. Spaeth
________________________________
Witness
Page 34
<PAGE>
EXHIBIT A
DEFINITIONS
In addition to the words and phrases capitalized in the
Agreement for which a definition is provided, the following words and phrases
shall have the meanings assigned to them in this Exhibit A.
"Capital Account" means, with respect to any Partner or
Transferee, the capital account maintained for that Partner or Transferee
pursuant to ARTICLE V of this Agreement.
"Capital Contribution" means, with respect to any Partner or
Transferee, the amount of money and the net fair market value of any property
(other than money) contributed to the Partnership with respect to the
Partnership Interest held by that Partner or Transferee.
"Code" means the Internal Revenue Code of 1986, as the same
may be amended from time to time. "Regulations" means the regulations
promulgated by the United State Department of Treasury under authority of the
Code.
"Person" means any individual, partnership, corporation,
trust, or other entity.
"Transferee" means a Person to whom a Limited Partner Interest
has been transferred in a manner permitted pursuant to this Agreement, but who
has not been admitted to the Partnership as a substitute Limited Partner.
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<PAGE>
Exhibit B
THE ALBERT L. SCHWARZ FAMILY TRUST
THIS AGREEMENT, entered into this 28th day of December, 1995, by and
between ALBERT L. SCHWARZ, of Montgomery County, Ohio, hereinafter referred to
as the "Grantor" and ALBERT L. SCHWARZ of Montgomery County, Ohio, hereinafter
referred to as the "Trustee,"
W I T N E S S E T H:
WHEREAS, it is the desire and intent of the Grantor to establish THE
ALBERT L. SCHWARZ FAMILY TRUST for the uses and purposes hereinafter set forth.
NOW THEREFORE, THE PARTIES HERETO AGREE that the trust estate described
in Schedule "A" and succeeding schedules, together with any property hereafter
assigned, transferred and delivered to the Trustee by the Grantor, or by any
other person, or from any other source, including the Grantor's estate, and
including the proceeds of insurance payable to the Trustee hereunder upon the
death of the Grantor, shall be held and administered by the Trustee upon the
following uses and trusts:
ARTICLE I. USES AND TRUSTS
A. This trust shall be referred to as THE ALBERT L. SCHWARZ FAMILY
TRUST. Any trust created by the division of this trust may be referred to by
adding the name of the income beneficiary(ies).
B. While the Grantor is living, the Grantor shall have the right at any
time to withdraw, all or any part of the principal and/or net income of the
trust estate for any purpose or reason whatsoever, even to the point of
completely exhausting the trust estate. Such right of withdrawal shall be
exercised in each case by the Grantor notifying the Trustee in writing to that
effect, specifying the amounts or items which the Grantor desires to withdraw,
and promptly thereafter the Trustee shall distribute all such amounts or items
to the Grantor.
In the event the Grantor is incapacitated, or is for any reason unable
to exercise the privilege of withdrawal on the Grantor's own behalf, the Trustee
is given the right, in the Trustee's sole and absolute discretion, to use and
expend the principal and/or net income of the trust estate, or any part thereof,
even to the exhaustion thereof, for the benefit of the Grantor, in the event his
income is insufficient for his comfort, support, maintenance, education, health
and happiness, and for the benefit of the Grantor's spouse and the Grantor's
children in the event their income is insufficient for their support,
maintenance, education and health, taking into consideration their accustomed
standard of living and any other sources of income they may have to the
knowledge of the Trustee. Any income not so expended shall be accumulated and
added to the principal of the trust estate at such time or times as the Trustee,
in the
<PAGE>
Trustee's uncontrolled discretion, may determine. Payments of income and/or
principal to or for the benefit of the Grantor's children shall not be taken
into account in any later division of the principal among the Grantor's children
or their issue.
C. After the death of the Grantor, and if the Grantor's spouse survives
the Grantor, the Trustee shall place in a separate trust (hereinafter sometimes
referred to as the "Credit Shelter Trust"), the greater of (i) Seven Hundred and
Fifty Thousand Dollars ($750,000) and (ii) a fraction of the trust estate, the
numerator of which is a sum equal to the largest amount, if any, that can pass
free of federal estate tax by reason of the so-called unified credit and the
credit for state death taxes available to the Grantor's estate (provided that
use of the latter credit does not increase the state death taxes actually
payable by reason of the Grantor's death), reduced by the value (for federal
estate tax purposes) of all other property included in the Grantor's gross
estate for federal estate tax purposes which does not qualify for the federal
estate tax marital or charitable deductions (whether passing under this Family
Trust or otherwise), and by any charges to principal arising by reason of the
Grantor's death that are not deducted in computing the Grantor's federal estate
tax, and the denominator of which is the value of the trust estate. In making
computations to determine the amount of this legacy, the values as finally
determined for federal estate tax purposes shall control. Notwithstanding
anything contained herein to the contrary, all property included in the
Grantor's gross estate and held or directed to be held in this Family Trust
which does not qualify for the federal estate tax marital deduction shall be
allocated to the Credit Shelter Trust even if as a result thereof an amount of
property in excess of the amount determined by this formula is allocated to the
Credit Shelter Trust.
If any property is received by the Trustee which is excluded from the
Grantor's gross estate for federal estate tax purposes, such property shall be
set aside as a Special Fund of the Credit Shelter Trust. None of the principal
or income of such property shall be used to pay, or to assist the Grantor's
executor in the payment of, any death taxes, expenses or other obligations of
the Grantor's estate. Subject to these restrictions, the Special Fund shall be
held, administered and distributed in the same manner as the Credit Shelter
Trust. After all such death taxes, expenses and other obligations of the
Grantor's estate have been paid, the Trustee is authorized to merge such Fund
into the Credit Shelter Trust, as the Trustee deems advisable.
If the Grantor's spouse survives or is deemed to survive the Grantor,
the remaining fraction of the trust estate shall be held in a separate trust
(hereinafter sometimes referred to as the "Marital Trust"). If the Grantor's
spouse predeceases the Grantor, the Trustee shall allocate the entire trust
estate, and any accrued income thereon, to the Credit Shelter Trust hereunder.
Anything hereinabove contained to the contrary notwithstanding, the Grantor's
spouse, if the Grantor's spouse survives the Grantor, may execute a qualified
disclaimer applicable to some part or all of the residue
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of the trust estate hereinabove allocated to the Marital Trust by disclaiming
all interest in such part or all of such amount otherwise allocable to the
Marital Trust. In the event the Grantor's spouse is deemed to have survived the
Grantor but is deceased, the personal representative of the Grantor's said
spouse may execute such qualified disclaimer. Any amounts so disclaimed shall be
allocated to the Credit Shelter Trust hereunder as if an original part thereof.
The allocation to the Credit Shelter Trust may be either in cash or in kind and,
to the extent made in kind, shall be valued at the fair market value of the
assets at the time of allocation. The allocation shall carry with it, as income
and not as principal, its proportionate share of all net income received during
the administration of the Grantor's estate. United States Government Bonds
eligible for redemption at par plus accrued interest in payment of federal
estate tax shall be allocated to the Credit Shelter Trust to the extent that any
federal estate tax is incurred by the Grantor's estate. For all purposes of this
Family Trust, it shall be presumed that the Grantor's spouse survived the
Grantor if there is no evidence of the order in which the Grantor and the
Grantor's spouse shall have died, and, in the event that said spouse shall
survive the Grantor for any period, the Trustee shall allocate that amount of
the trust estate to the Credit Shelter Trust as is hereinabove described.
MARITAL TRUST
A. The Trustee shall distribute to the Grantor's spouse, the entire net
income from the assets of the Marital Trust computed from the death of the
Grantor not less often than in quarter-annual installments during the Grantor's
spouse's lifetime. In addition thereto, the Grantor's said spouse shall have the
right at any time to withdraw, all or any part of the principal of the Marital
Trust for any purpose or reason whatsoever, even to the point of completely
exhausting same. Such right of withdrawal shall be exercised in each case by the
Grantor's spouse notifying the Trustee in writing to that effect, specifying the
amounts or items which the Grantor's spouse desires to withdraw; and promptly
thereafter the Trustee shall distribute all such amounts or items to the
Grantor's spouse.
In the event that the Grantor's spouse is incapacitated, or is for any
reason unable to exercise the privilege of withdrawal on the Grantor's spouse's
own behalf, the Trustee is given the right in the Trustee's sole and absolute
discretion to use and expend the principal of the Marital Trust, even to the
exhaustion thereof, for the benefit of the Grantor's spouse, in the event that
said spouse's income is insufficient for said spouse's comfort, support,
maintenance, education, health and happiness, taking into consideration said
spouse's accustomed standard of living and any other income said spouse may have
to the knowledge of the Trustee.
B. Upon the death of the Grantor's spouse, the Trustee shall distribute
the then remaining principal of the Marital Trust, and any accrued income
thereon to such persons, associations or corporations, including the estate of
the Grantor's
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spouse, or any charitable institution that the Grantor's spouse shall by Last
Will and Testament appoint by specific reference to this provision. Further, the
Grantor's spouse may appoint in such proportions and amounts and in such manner,
outright or in trust or otherwise, as the Grantor's spouse may elect. The
Trustee may rely upon any instrument admitted to probate in any jurisdiction as
the Last Will of the Grantor's spouse. However, if the Trustee has no written
notice of the existence of such a will within a period of three (3) months after
the date of the spouse's death, the Trustee may presume that the Grantor's
spouse died without having effectively exercised the general power of
appointment herein conferred, and the Trustee shall not be liable to any person,
association or corporation in acting in accordance with such presumption. In
default of the effective exercise of the general power of appointment herein
conferred, the then remaining principal of the Marital Trust, and any accrued
income thereon shall be disposed of as follows:
1. The Trustee shall distribute $10,000 to the Grantor's
brother-in-law, WILLIAM CRAFT, if he is then living, otherwise to
his issue per stirpes.
2. The Trustee shall distribute $10,000 to the Grantor's
brother-in-law, THOMAS CRAFT, if he is then living, otherwise to
his issue per stirpes.
3. The Trustee shall distribute $10,000 to the Grantor's
brother-in-law, ROBERT CRAFT, if he is then living. If the
Grantor's brother-in-law is not then living, this bequest
shall lapse and such amount shall be disposed of in accordance
with the provisions of Paragraph 10 below.
4. The Trustee shall distribute $10,000 to the Grantor's
brother-in-law, JACK CRAFT, if he is then living, otherwise to
his issue per stirpes.
5. The Trustee shall distribute $10,000 to the Grantor's
brother-in-law, JAMES CRAFT, if he is then living, otherwise to
his issue per stirpes.
6. The Trustee shall distribute $10,000 to the Grantor's
sister-in-law, BETTY TURVY, if she is then living, otherwise to
her issue per stirpes.
7. The Trustee shall distribute $10,000 to the Grantor's
brother-in-law, CHARLES MUTH, if he is then living, otherwise to
his issue per stirpes.
8. The Trustee shall distribute $10,000 to the Grantor's
brother-in-law, MICHAEL MUTH, if he is then living, otherwise to
his issue per stirpes.
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9. The Trustee shall distribute $1,000 to each niece or nephew of
the Grantor's spouse, then living, including adopted children
or stepchildren of any brother, sister or half-brother of the
Grantor's spouse. For purposes of this Paragraph 9, the
Grantor's niece, MARIA CRAFT shall be deemed to have
predeceased the Grantor.
10. Any remaining principal of the Marital Trust and any accrued
income thereon shall be disposed of as follows:
a. Ten percent (10%) thereof shall be added to the
Credit Shelter Trust and held and/or disposed of in
accordance with the provisions of Paragraph D
thereof.
b. The remainder thereof shall be added to the Credit Shelter
Trust and held and/or disposed of in accordance with the
provisions of Paragraph C.
C. No provision of this Family Trust shall be deemed to require or
authorize the Trustee to make any charge to income or allocation of principal
which would cause the Grantor's said spouse to receive, in any year, less than
all the income under any applicable federal or state statute or rule of law
defining income of such Marital Trust.
CREDIT SHELTER TRUST
After the death of the Grantor, the assets of the Credit Shelter Trust
shall be held and/or disposed of as follows:
A. The Trustee shall distribute one third of the assets of the Credit
Shelter Trust, in an amount not to exceed Two Hundred Fifty Thousand Dollars
($250,000) to each child of the Grantor then living. If a child of the Grantor
is not then living, his share shall be held in trust for the benefit of the
children (as a group) then living of such then deceased child of the Grantor in
accordance with the provisions of Paragraph D below.
B. In the event that all of the assets of the Credit Shelter Trust are
not distributed in accordance with the provisions of Paragraph A above, until
the death of the Grantor's spouse, the Trustee is authorized, in the Trustee's
sole and absolute discretion, to use so much or all of the net income and/or
principal of the Credit Shelter Trust as the Trustee deems advisable to or for
the benefit of the Grantor's spouse and the Grantor's children for their
support, maintenance, education and health, taking into consideration their
accustomed standard of living and any other sources of income they may have to
the knowledge of the Trustee.
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Any net income not so distributed shall be accumulated and added to the
principal of the Credit Shelter Trust at such time or times as the Trustee, in
the Trustee's uncontrolled discretion, may determine. Payments of principal to
or for the benefit of the Grantor's children shall not be taken into account in
any later division of the principal among such persons. It is the Grantor's
desire that the Trustee, prior to making any discretionary distributions
authorized in the immediately preceding paragraph, consult with and consider the
reasonably foreseeable needs of the Grantor's spouse.
C. Upon the death of the Grantor's spouse or in the event the Grantor's
spouse does not survive the Grantor, the Trustee shall divide the trust estate
into as many equal shares as there are children of the Grantor then living and
children (as a group) then living of each then deceased child of the Grantor.
One of such equal shares shall be allocated to each child of the Grantor then
living and each such share so allocated shall be distributed, free of trust, to
each such child. One of such equal shares shall be allocated to the children (as
a group) then living of each then deceased child of the Grantor, and each such
share so allocated shall be held in a separate trust in accordance with the
provisions of Paragraph D hereof.
D. The assets directed to be held in a separate trust for the issue (as
a group) of each deceased child of the Grantor shall be held and/or disposed of
as follows:
1. Until such time as there are no children of such deceased
child of the Grantor under the age of twenty-two (22)
years, the Trustee may pay to, or apply for the benefit of,
any one or more of the children of such deceased child of
the Grantor such amounts of the net income and/or principal
of the trust as the Trustee, in the Trustee's uncontrolled
discretion, may determine to be necessary or proper to
provide for the support, maintenance, health and education
of such persons, taking into consideration their accustomed
standard of living and any other sources of income such
persons may have to the knowledge of the Trustee. Any net
income which is not paid to, or applied for the benefit of,
such persons shall be added to the principal of the trust
at such times as the Trustee, in the Trustee's uncontrolled
discretion, may determine. Payments of income and/or
principal to such deceased child's issue shall not be taken
into account in any later division of the principal among
such deceased child's issue.
2. When there are no children of a deceased child of the
Grantor under the age of twenty-two (22) years, the then
remaining
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principal and undistributed income of the trust shall be
divided into as many equal shares as there are children
then living of such deceased child of the Grantor and each
such share so allocated shall be held in a separate trust
for such children in accordance with the provision of
Paragraph E hereof.
E. The separate trust for each child (hereinafter referred to as
"grandchild") of a deceased child of the Grantor shall be held and/or
distributed as follows:
1. If at the time of the division of the trust estate as set
forth above, such grandchild has attained the age of 30
years, the Trustee shall distribute to such grandchild his
or her share absolutely freed and discharged of any and all
trusts hereunder.
2. If such grandchild has not reached the age of 30 years, the
Trustee shall pay to such grandchild the net income from
such grandchild's share of the trust estate in convenient
installments and such principal from the trust estate as
the Trustee deems necessary and proper to provide for such
grandchild's support, maintenance, health and education,
taking into consideration such grandchild's accustomed
standard of living and any other sources of income such
grandchild may have to the knowledge of the Trustee. When
such grandchild attains the age of 30 years, the trust
shall terminate as to such grandchild, and the Trustee
shall pay over to such grandchild, all of the then
remaining principal or such grandchild's share of the trust
estate, and any accrued income thereon, absolutely freed
and discharged of any and all trusts hereunder; provided,
however, that when such grandchild attains the age of
twenty-five (25) years, such grandchild shall have the
right to withdraw one-third (1/3) of the then remaining
principal of such grandchild's share of the trust estate as
then constituted, upon making a written demand to the
Trustee therefor; provided further, however, that when such
grandchild attains the age of twenty-seven (27) years, such
child shall have the right to withdraw one-half (1/2) of
the then remaining principal of such grandchild's share of
the trust estate as then constituted, upon making a written
demand to the Trustee therefor.
3. If such grandchild dies prior to complete distribution to
such grandchild of all of the assets of the trust held for
such grandchild's benefit, then on such grandchild's death
the then
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remaining trust assets shall be held and/or disposed of as
follows:
a. Such assets shall be held and/or distributed for the
benefit of the then living children of such deceased
grandchild in accordance with the provisions of
Paragraph D hereof as though such children were
children of a deceased child of the Grantor.
b. In default of such children, such assets shall be
divided per stirpes among the other then living
children of such deceased child of the Grantor and
held and/or distributed in accordance with the
provisions of Paragraph E hereof.
c. In default of any children of such deceased child of
the Grantor, such assets shall be divided per stirpes
among the Grantor's other then living issue and held
and/or distributed in accordance with the provisions
of Paragraph C hereof.
F. After the death of the Grantor's spouse or in the event the
Grantor's spouse does not survive the Grantor, the Trustee, in addition to the
Trustee's other powers over the use of principal for the benefit of the
Grantor's children or children of any then deceased child of the Grantor as
hereinabove set forth, shall have the right to use further principal of such
person's share for such person's benefit to aid such person in purchasing a
home, in continuing education, including not only college, but post-graduate
studies, to provide funds to enter a business or to set up a professional
office. It is the Grantor's desire that the Trustee make reasonable inquiry into
the business enterprise which such person may want to enter to see if there is a
reasonable chance of success before granting the use of principal hereinabove
set forth. Any amounts so distributed by the Trustee shall be included in the
determination of a share for the benefit of the Grantor's children and the
children of any then deceased child of the Grantor.
G. If, upon the death of a beneficiary hereunder, a transfer of
property from the trust held for the benefit of such beneficiary occurs which,
but for this provision, would be subject to a generation-skipping transfer tax,
then, if and to the extent that the net sum of such generation-skipping transfer
tax and all other estate, inheritance and generation-skipping taxes payable by
reason of the death of such beneficiary will be reduced hereby, and only to such
extent, the Grantor hereby grants to such beneficiary a power to appoint such
portion of the property transferred as will result in the maximum reduction in
said net sum. The portion of which such power is hereby granted shall, upon the
death of such beneficiary, be
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distributed to, or held for the benefit of, such person, or to the estate of
such beneficiary, and in such amounts and proportions, for such estates and
interests, and upon such terms, trusts, conditions and limitations as such
beneficiary shall appoint by a will made after the Grantor's death, which will
specifically refers to the power herein given to such beneficiary. The Trustee
may rely upon any instrument admitted to probate in any jurisdiction as the Last
Will of such beneficiary. However, if the Trustee has no written notice of the
existence of such a will within a period of three (3) months after the date of
such beneficiary's death, the Trustee may presume that such beneficiary died
without effectively exercising the power of appointment conferred herein, and
the Trustee shall not be liable to any person, association or corporation for
acting in accordance with such presumption. If, or to the extent that, such
beneficiary does not exercise such power to appoint by will at his death, such
assets shall be held and/or disposed of in the same manner as is provided in
this document for the disposition of the assets of such trust without reference
to such power of appointment.
H. At such time or in such event as this Family Trust makes no
provision for the payment of the then remaining principal or the then remaining
income of any trust established hereunder, such remaining principal and
undistributed income, shall be held and/or disposed of as follows:
1. One-half (1/2) thereof to the persons who would take
and in the proportions they would take from the
Grantor's estate if the Grantor were then to die
intestate the owner of such property, according to
the laws of the State of Ohio then in force and
effect.
2. One-half (1/2) thereof to the persons who would take
and in the proportions they would take from the
Grantor's spouse's estate if the Grantor's spouse
were then to die intestate the owner of such
property, according to the laws of the State of Ohio
then in force and effect.
ARTICLE I: TERMS AND CONDITIONS
A. Notwithstanding anything contained herein to the contrary, if a
trust held hereunder would otherwise be partially exempt from
generation-skipping transfer tax due to the intended allocation of a
generation-skipping tax exemption to it in accordance with Section 2631 of the
Internal Revenue Code of 1986, as amended (hereinafter referred to as the
"Code"), then before such allocation and as
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of the relevant valuation date under Section 2642 of the Code with respect to
such allocation, the Trustee, in the Trustee's uncontrolled discretion, may
divide such trust into two separate trusts of equal or unequal value which shall
be identical in all other respects to the original trust, so that the allocation
of the generation-skipping transfer tax exemption can be made to one trust which
will be entirely exempt from generation-skipping transfer tax. In addition, if
any property which is held in, or is to be added or allocated to, a trust
created hereunder is subject to different treatment for any reason for the
purposes of the generation-skipping transfer tax under Chapter 13 of the Code
from other property being held in that trust, then the Trustee, in the Trustee's
uncontrolled discretion, may instead hold such property in a separate trust from
the trust to which the property would otherwise have been added or allocated,
which separate trust shall be identical in all other respects to the original
trust.
If a trust hereunder has been divided into two separate trusts, one
being exempt from generation-skipping transfer tax and the other being not
exempt from generation-skipping transfer tax, all discretionary income and
principal payments and all mandatory principal payments, including property paid
pursuant to an inter- vivos power of appointment, to or for a beneficiary other
than a "Skip Person" (as defined in Section 2613 of the Code) shall first be
charged against and paid from the non-exempt trust from which such payment could
be made, and all such payments to or for a "Skip Person" shall first be charged
against and paid from the exempt trust from which such payment could be made, to
the extent, in each case, that assets are reasonably available for such
payments.
B. The Trustee may, in the Trustee's sole discretion, make any
distributions provided herein for such beneficiary to such beneficiary or to any
person, firm or corporation for the benefit of such beneficiary, whether or not
such person shall be the guardian of such beneficiary, or to a custodian for
such beneficiary under the Ohio Transfers to Minors Act or other similar Act.
The receipt of any such one to whom such distribution is made hereunder shall be
a complete release and acquittance to the Trustee as to such distribution.
C. Except with respect to the Grantor's said spouse's interest in the
Marital Trust, notwithstanding anything in this Family Trust to the contrary,
all or any part of the income or principal payable hereunder to any person who
in the opinion of the Trustee is incapacitated through illness or other cause,
other than minority, either may, until the termination of such incapacity or
until the death of such beneficiary, be retained by the Trustee or from time to
time may be distributed, according to the Trustee's uncontrolled discretion, to
or for the benefit of such beneficiary and said beneficiary's dependents, if
any. Any such distribution may be made at such time and in such manner as the
Trustee deems advisable to such beneficiary or to any person, firm or
corporation for the benefit of such
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beneficiary. Any net income which is not paid to, or applied for the benefit of,
such beneficiary and/or such beneficiary's dependents shall be added to the
principal of the trust from which interest was derived at such time or times as
the Trustee, in the Trustee's uncontrolled discretion, may determine. On the
death of such incapacitated beneficiary, the Trustee shall distribute the
principal and any accumulated income therefrom then remaining in the Trustee's
hands to the persons entitled thereto, or shall hold and administer the same for
the persons entitled to the benefit thereof, under the provisions of this Family
Trust relating to the disposition of such property upon the death of such
beneficiary (a) as if such beneficiary's death had occurred at an age or time
prior to that specified in this Family Trust for outright distribution of such
assets to such beneficiary, or (b) if such trust had other income beneficiaries
and has terminated prior to such death with respect to such other beneficiaries,
as if such other beneficiaries had then received the shares of the trust assets
allotted to them under the terms of this Family Trust upon the termination of
the trust, so that such other beneficiaries do not receive any of such deceased
beneficiary's share of the trust assets unless they are otherwise specified in
this Family Trust as the ones entitled thereto upon the death of such deceased
beneficiary. At such time prior to such beneficiary's death as such beneficiary,
in the opinion of the Trustee, is no longer incapacitated, the Trustee shall
hold and/or dispose of such property and any accumulated income therefrom then
remaining in the Trustee's hands in accordance with the provisions of this
Family Trust other than this Paragraph C.
D. The Trustee shall be protected in continuing to make distributions
of income or principal hereunder until the Trustee shall have actual knowledge
of the happening of any event which would affect such distribution.
E. No distribution from any trust created hereunder shall discharge or
satisfy, in whole or in part, any obligation of support which any person may
have with regard to the person to whom such distribution is made.
F. Except with respect to the Grantor's said spouse's interest in the
Marital Trust, the interest of each beneficiary held hereunder, shall not, prior
to distribution of principal or income by the Trustee to such beneficiary, be
subject to sale, assignment, pledge, encumbrance or alienation in any manner
unless the Trustee first shall have consented thereto in writing, nor be
resorted to, appropriated or seized in any proceeding at law, in equity, or in
any other manner whatsoever. Should any beneficiary alienate, charge, dispose of
or encumber such beneficiary's interest in any trust hereunder, either the
income or principal thereof, without first having obtained the consent of the
Trustee in writing, before the same shall have been delivered to such
beneficiary under the provisions of this Family Trust, or should any creditor of
any beneficiary of any of the trusts created hereunder, attempt to seize any
assets in the hands of the Trustee held for such
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beneficiary, and thereby deprive such beneficiary of the enjoyment thereof, the
trust as to the beneficiary whose interest may be so affected shall thereupon
cease and determine, and shall thereafter during the remainder of the life of
said beneficiary be held and distributed by the Trustee, according to the
Trustee's absolute discretion, to said beneficiary and said beneficiary's
dependents, if any. Upon the death of any such former beneficiary whose interest
has been affected pursuant to the terms of this Paragraph F, the Trustee shall
distribute the principal and any accumulated income therefrom then remaining in
the Trustee's hands to the persons entitled thereto, or shall hold and
administer the same for the persons entitled to the benefit thereof, under the
provisions of this Family Trust relating to the disposition of such property
upon the death of such beneficiary (a) as if such beneficiary's death had
occurred at an age or time prior to that specified in this Family Trust for
outright distribution of such assets to such beneficiary, or (b) if such trust
had other income beneficiaries and has terminated prior to such death with
respect to such other beneficiaries, as if such other beneficiaries had then
received the shares of the trust assets allotted to them under the terms of this
Family Trust upon the termination of the trust, so that such other beneficiaries
do not receive any of such deceased beneficiary's share of the trust assets
unless they are otherwise specified in this Family Trust as the ones entitled
thereto upon the death of such beneficiary.
G. Nothing contained in this Family Trust shall be construed as
postponing the distribution of a trust beyond the period of twenty (20) years
and eleven (11) months after the death of the survivor of the following persons
living at the time of the Grantor's death:
the Grantor's spouse;
the Grantor's issue;
and in case such trust shall not be completely distributed or distributable
prior to the expiration of such period, all of the income and principal thereof
shall be distributed to those beneficiaries specified in this Family Trust for
whose primary benefit such trust is then being held by the Trustee (or for whose
benefit it would be held if no act proscribed by Paragraph F had occurred), and
in the proportions then held or, if such trust is then being held for the
benefit of the issue of a deceased person, per stirpes to such issue of such
deceased person.
ARTICLE III: POWERS OF THE TRUSTEE
In extension and not in limitation of powers given to the Trustee by
law or other provisions of this Family Trust, the Trustee of each trust
established hereunder shall have the following powers with respect to such
trust, in each case
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to be exercised from time to time in the Trustee's discretion and without order
or approval of court:
A. Each of the trusts which may be created hereunder shall constitute a
separate trust, and each trust so created shall be administered and accounted
for separately.
B. In any case in which the Trustee is required physically to divide
property held by the Trustee into parts or to distribute it, the Trustee may, in
the Trustee's sole and absolute discretion, make such division or distribution
in kind or in money, or partly in kind and partly in money, and to that end may
allot specific property, real or personal, or an undivided interest or interests
therein, to such part or parts.
C. The Trustee shall have full power to collect and receive the rents,
issues and profits thereof, to control, maintain, repair, lease for any period
irrespective of the duration of the trust, rent, exchange, sell, manage, hold
and control, lend, invest and reinvest the assets of the trusts, to make
contracts concerning the purchase of the assets of the trusts, and to grant
options for the purchase thereof in connection with leases thereof and
otherwise, in such manner, for such considerations, and upon such terms as the
Trustee deems best, irrespective of any statutes, rules or practices of courts
now or hereafter in force limiting the investments of trustees, with full power
to convert realty into personalty and personalty into realty and to execute and
deliver proper instruments of conveyance and transfer, including, but not
limited to, investment of trust assets in securities of any open-end or
close-end management type investment company or investment trust registered
under the Investment Company Act of 1940, as amended, which would be regarded by
prudent businessmen as a safe investment. The fact that the a corporate Trustee,
any affiliate of a corporate Trustee is providing such services and receiving
remuneration from the foregoing investment company or trust as investment
advisor, custodian, transfer agent, registrar, or otherwise shall not preclude
the Trustee from investing in the securities of such investment company or
investment trust. In addition thereto, the Trustee shall have full power to
invest and reinvest or otherwise deposit trust assets in savings accounts, time
deposit accounts, certificates of deposit, money market funds, or other
evidences of deposit issued by a corporate Trustee and/or any other national
bank, savings and loan institution, state member bank, or other depository
institution which now or in the future is an affiliate or subsidiary of a
corporate Trustee.
D. The Trustee shall have full power to borrow money upon such terms
and conditions, at any time or times, and for such purposes of the trusts as the
Trustee may deem best. For sums so borrowed, the Trustee may issue promissory
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notes as Trustee and secure the payment thereof by mortgaging or pledging any
part or all of the assets of the trusts.
E. The Trustee shall have full power to compound, compromise, settle
and adjust any and all claims and demands in favor of or against the trusts upon
such terms as the Trustee deems best.
F. The Trustee shall have full power, upon such terms and conditions as
the Trustee may deem best, to hold any stocks, bonds or other securities, in its
own name, the name of another, or the name of an appointed nominee with or
without disclosing the fiduciary ownership thereof; to vote in person or by
proxy any stocks, bonds or other securities held by the Trustee; to exercise any
options appurtenant thereto for the conversion thereof into other stocks, bonds
or securities; to exercise any rights to subscribe for or purchase additional
stocks, bonds or other securities; to exercise any rights to subscribe for or
purchase additional stocks, bonds or other securities, and to make all necessary
payments therefor; to join in recapitalization, consolidation, liquidation, sale
or merger of corporations or other properties in which the Trustee may be
interested as Trustee and to consent in writing to any corporate action.
G. The Trustee shall allocate gains, losses, and expenses between
principal and income and shall determine all questions of allocation between
principal and income as the Trustee may deem equitable and in accordance with
reasonable trust accounting principles. In addition, the Trustee may provide for
a reasonable depreciation charge against income in the case of trust assets
which are subject to depreciation. It is the Grantor's express intention that,
with respect to the Marital Trust, the Trustee shall make such allocations and
provisions for depreciation in such manner that the Grantor's spouse shall not
be deprived of that beneficial enjoyment of the assets thereof required by the
federal estate tax laws.
H. The Trustee is not required to follow the provisions of the
so-called Ohio Principal and Income Act to the extent the Trustee determines, in
the Trustee's uncontrolled discretion, that said provisions are not equitable to
the beneficiaries hereunder.
I. The Trustee is authorized and empowered to employ such agents,
attorneys-in-fact, experts, investment counsel, legal counsel, custodians of
trust assets, and brokers as the Trustee deems advisable, and to delegate
discretionary powers to and rely upon information or advice furnished by such
persons.
J. The Trustee is authorized and empowered to execute and deliver all
instruments and to perform all acts that may be necessary or convenient in the
proper administration of these trusts.
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K. The Trustee hereunder may retain all or any part of the assets of
any trust created hereunder in the form in which such property may be at the
time of the Grantor's death, or at the time of the acquisition thereof by the
Trustee, including stock in the corporation of the Trustee or its successors, so
long as the Trustee may deem advisable, whether or not such property is
nonproductive, unsecured, nondiversified or of a wasting nature, and
notwithstanding that such property may be stock of a corporate Trustee, or may
not represent valid investments by a fiduciary under the laws of the State of
Ohio, without liability for depreciation or diminution or failure of
appreciation in value; provided, however, that with respect to the Marital
Trust, the Grantor's spouse shall have the authority to require the Trustee to
make any nonproductive property productive or convert such property within a
reasonable time.
L. No purchaser from nor lender to the Trustee need see to the
application of the purchase or loan money to the purposes of the trusts, and the
receipt of the Trustee shall be a complete discharge to any such person.
M. The Trustee shall keep full books of account showing the condition
of the trusts, which shall be open at all reasonable times to the inspection of
any beneficiary of the trusts.
N. The Trustee is authorized to improve or develop real estate, to
construct, alter, repair, or demolish buildings or other structures; to settle
boundary lines and other rights with respect to real estate; to partition and to
join with co-owners and others in dealing with real estate in any way; to grant
easements; to insure, vacate, subdivide, or dedicate such property; to set up
reserves out of income for taxes and assessments and for the repair and general
upkeep of buildings and structures; and to foreclose, extend, assign, release
and discharge mortgages, wholly or partially.
O. The Trustee may exercise, in such manner and to such extent as the
Trustee shall deem advisable, any elections or choices available under the
federal or state tax laws, even though such action may be advantageous to one or
more of the beneficiaries hereunder and disadvantageous to other beneficiaries.
The Trustee shall have no duty to make any adjustments in the Trustee's accounts
for the benefit of any beneficiary adversely affected by any such election.
P. The Trustee is authorized to continue the operation of any business
that the Grantor may own at the time of the Grantor's death for such period as
the Trustee deems wise, with full power to operate in the Grantor's name, in the
name of the Grantor's estate or the trusts, or under any trade name that the
Grantor has used, and in connection therewith to employ and compensate a manager
and such other persons as the Trustee deems wise. The Trustee may take such
actions
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without liability for any losses incurred or for any depreciation in the value
of any of the assets used. The Trustee may liquidate such business or sell the
same as a going business.
Q. The Trustee is authorized to organize or join with others in the
organization of corporations to receive title to assets of the trusts, to carry
on a business, or for any other purpose and may hold or dispose of stock which
the Trustee acquires in such corporations.
The Trustee shall also have the following powers with respect to each
trust other than the Marital Trust, in each case to be exercised from time to
time in the Trustee's discretion and without order or approval of court:
R. Notwithstanding the provisions of subparagraph A of this Article
III, all of the assets in such trusts may be held collectively, with no physical
division thereof, until such time as distribution is actually made by the
Trustee.
S. The Trustee may hold, acquire, purchase and dispose of or otherwise
deal with in any manner which the Trustee, in the Trustee's uncontrolled
discretion, deems proper, life insurance, annuities and other forms of insurance
on the life of any beneficiary hereunder or upon the lives of others for the
benefit of any such beneficiary. The Trustee shall have full power and authority
to exercise at any time or times any and all rights, benefits and privileges
which an individual having absolute title and ownership of said policies might
exercise.
The Grantor further directs that:
T. Wherever discretion or authority is granted to the Trustee hereunder
or by law, the determination made by the Trustee, in the absence of abuse of
discretion, shall be binding upon all parties interested in the trusts.
U. Except for the wrongful acts of any nominee selected by the Trustee
pursuant to Paragraph I of this Article III, the Trustee shall not be held
responsible for any loss sustained by the trusts through any error of judgment
or through the exercise of any discretion granted to the Trustee under this
Family Trust or by law, except only for the Trustee's willful misconduct or
breach of good faith. The Trustee hereunder shall not be personally liable on
any contract or indebtedness of or claim against said trusts, or upon a
mortgage, trust deed, note, or other instrument executed under the provisions
hereof.
V. It is the Grantor's intention that the Marital Trust shall qualify
for the federal estate tax marital deduction and that the Credit Shelter Trust
utilize to the extent provided herein the federal estate tax unified credit and
state death tax
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credit (and any other similar credits, exclusions, exemptions or tax-free
allowances under future estate tax laws). The Grantor therefore directs that all
provisions hereof be construed and administered to effectuate such intention and
that the powers and discretions of the Trustee be not exercised or exercisable
with respect to the property in such trusts except in a manner consistent with
such intention.
W. If, on the death of any beneficiary of a trust created hereunder,
there shall be insufficient assets in such beneficiary's estate to pay his
funeral and burial expenses (including the costs of a suitable marker for his
grave) and/or expenses of such beneficiary's last illness, then the Trustee may,
in the Trustee's uncontrolled discretion, pay any or all such charges from the
assets of the trust held for such beneficiary unless such beneficiary has
directed otherwise by the exercise of a power of appointment.
X. The Trustee may, in the Trustee's sole discretion, purchase
securities or other assets from the Grantor's estate and from the estate of the
Grantor's spouse, at such prices and upon such terms as the Trustee may deem
fair and advisable, with the same retention powers as provided in Paragraph K of
this Article III. The Trustee may lend or advance to the Grantor's estate and
the estate of the Grantor's said spouse such portions of the principal of the
trusts as the Trustee, in the Trustee's uncontrolled discretion, shall deem
advisable, and such loans or advances may be made upon such terms and conditions
as shall be agreed upon between the Trustee and the legal representative of such
estate.
Y. If at the time of the Grantor's death, the Trustee holds as part of
the trust estate any United States Treasury obligations which are redeemable at
par in payment of federal estate taxes, but which are selling at less than par
value, then, notwithstanding anything contained herein or in the Grantor's will
to the contrary, the Trustee shall use such obligations to pay in full, or
insofar as possible, all federal estate taxes, including interest and penalties,
if any, due by reason of the Grantor's death. In addition, if the Grantor's
executor makes written demand upon the Trustee therefor, the Grantor directs the
Trustee to distribute to the Grantor's executor out of the income and/or
principal of the trust estate (other than from the Marital Trust and other than
from any assets which are not otherwise includable in the Grantor's gross estate
for federal or state estate or inheritance tax purposes unless paid or payable
by the Trustee to or on behalf of the Grantor's estate), an amount necessary to
pay any part or all of any bequests under the Grantor's will, any funeral
expenses, the debts, charges and expenses in connection with the administration
of the Grantor's estate, and any part or all of the estate, inheritance, and
transfer taxes which may be assessed by reason of the Grantor's death, including
any interest and penalties thereon, whether or not such taxes are attributable
to the assets held in trust hereunder.
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ARTICLE IV: POWER TO DEAL WITH ENVIRONMENTAL HAZARDS
A. The Trustee shall have the power to use and expend the trust income
and principal to (i) conduct environmental assessments, audits, and site
monitoring to determine compliance with any environmental law or regulation
thereunder; (ii) take all appropriate remedial action to contain, cleanup or
remove any environmental hazard including a spill, release, discharge or
contamination, either on its own accord or in response to an actual or
threatened violation of any environmental law or regulation thereunder; (iii)
institute legal proceedings concerning environmental hazards or contest or
settle legal proceedings brought by any local, state, or federal agency
concerned with environmental compliance, or by a private litigant; (iv) comply
with any local, state or federal agency order or court order directing an
assessment, abatement or cleanup of any environmental hazards; and (v) employ
agents, consultants and legal counsel to assist or perform the above
undertakings or actions. Any expenses incurred by the Trustee under this
paragraph may be charged against income or principal as the Trustee shall
determine.
B. The Trustee may disclaim, in whole or in part, any interests in
property for any reason, including but not limited to a concern that such
property could cause potential liability under any federal, state, or local
environmental law.
C. The Trustee may receive any property, real or personal, to be added
to the Trust from Grantor in any event (and if Trustee consents in writing, from
any other person) by lifetime or testamentary transfer or otherwise; provided,
however, that the Trustee, in its sole discretion, may require, as a
prerequisite to accepting property, that the donating party provide evidence
satisfactory to the Trustee that (i) the property is not contaminated by any
hazardous or toxic materials or substances; and (ii) the property is not being
used and has never been used for any activities directly or indirectly involving
the generation, use, treatment, storage, disposal, release, or discharge of any
hazardous or toxic materials or substances.
D. The Trustee shall not be liable for any loss or depreciation in
value sustained by the Trust as a result of the Trustee retaining any property
upon which there is later discovered to be hazardous materials or substances
requiring remedial action pursuant to any federal, state, or local environmental
law, unless the Trustee contributed to the loss or depreciation in value through
willful default, willful misconduct, or gross negligence.
E. Notwithstanding any contrary provision of this Family Trust, the
Trustee may withhold a distribution to a beneficiary until receiving from the
beneficiary an indemnification agreement in which the beneficiary agrees to
indemnify the Trustee against any claims filed against the Trustee as "owner" or
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"operator" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as from time to time amended, or any regulation
thereunder.
ARTICLE V: APPOINTMENT AND DISCHARGE OF THE TRUSTEE
A. The Grantor names as Trustee of the trusts created hereunder ALBERT
L. SCHWARZ. If ALBERT L. SCHWARZ dies or declines, ceases or is unable to serve
as Trustee, the Grantor names as successor Trustee to fill such vacancy or any
vacancy that may thereafter occur the first, in the order named, who is able and
willing to serve of the following:
MARY C. SCHWARZ, of Montgomery County, Ohio;
DOUGLAS A. SCHWARZ, of Hamilton County, Ohio.
B. The Trustee shall have the right to resign at any time as Trustee of
any trust created hereunder by delivery of written notice of such resignation
not less than sixty (60) days prior to the effective date thereof to the
Grantor's spouse, if living, or to each of the then current income beneficiaries
of such trust, or to the legal natural guardian, or other legal representative,
of any such beneficiary who is a minor or who is incompetent. In the event that
the Trustee resigns as Trustee of the trusts created hereunder and the Grantor
has not appointed a successor Trustee, the Grantor, if living, otherwise the
Grantor's spouse if living, otherwise the majority of the then adult
beneficiaries, shall have the right to appoint a successor-trustee; provided,
however, that any successor-trustee shall be a bank or trust company.
C. In the event that any corporate Trustee shall at any time be merged
with, consolidated with, operated under joint agreement with, or sold or
transferred to any other corporation, association, subsidiary or trust company,
or reorganized into a new corporation, association, subsidiary or trust company,
such corporation, association, subsidiary or trust company succeeding to the
fiduciary powers and services of the Trustee shall, without any further act on
the part of the parties hereto, be substituted in the place and stead of such
corporate Trustee as fiduciary hereunder.
D. After the death of the Grantor, the Grantor's spouse may remove the
corporate Trustee, or any successor corporate Trustee, as corporate Trustee of
the trusts herein. Upon such removal, the Grantor's said spouse shall designate
another corporate Trustee to serve as successor corporate Trustee. The removal
of the corporate Trustee shall be accomplished by the delivery of an instrument
in writing to the corporate Trustee, giving notice of such removal, together
with the delivery of an instrument in writing acknowledging the acceptance of
the appointment of a successor corporate Trustee. The successor corporate
Trustee
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shall always be a bank or trust company.
E. The successor Trustee(s) named herein shall have all the powers,
duties, authority, immunity and discretion herein and by law granted to the
Trustee originally named. The Grantor directs that no bond be required of the
Trustee and successor Trustee(s) named herein. The Trustee and successor
individual Trustee named herein may receive reasonable compensation for their
services hereunder. Any corporate Trustee shall receive compensation for its
ordinary services hereunder at the rates prescribed for similar trust services
in its standard compensation schedule last adopted prior to each charging of
such compensation.
F. If the Trustee (other than the Grantor's spouse) determines that
continuation of any trust being administered under this Family Trust is contrary
to the best interest of the beneficiaries thereof by reason of (1) changes in
legislation, (2) unforeseen changes in circumstances, or (3) because the value
of a trust's assets are at such a level that, in the sole discretion of the
Trustee, the continued administration thereof would be financially burdensome,
then the Trustee, in the Trustee's sole discretion, may terminate such trust and
distribute the principal thereof, and any income accumulated therein, to the
person or persons then entitled to receive the income therefrom.
G. After the death of the Grantor, the Trustee shall each year account
for the Trustee's administration of principal and income hereunder as follows:
(1) during the life of the Grantor's said spouse, said annual accounting shall
be delivered to the Grantor's said spouse, and (2) after the death of the
Grantor's said spouse, said annual accounting shall be delivered to each of the
beneficiaries eligible to receive benefits hereunder during the period covered
by the accounting. The Trustee shall also account for any term not previously
accounted for to each of the eligible beneficiaries at the termination of a
trust or upon the Trustee's resignation.
ARTICLE VI: GRANTOR'S RIGHTS
A. The Grantor reserves the right during the Grantor's lifetime, so
long as the Grantor is competent to act in the matter, and without the consent
of the Trustee, to revoke, alter or amend this Family Trust, in whole or in
part, by serving the Trustee with thirty (30) days written notice, except that
the duties and liabilities of the Trustee shall not be substantially increased
without the written consent of the Trustee. No revocation hereunder whereby the
Trustee ceases to be the beneficiary of some or all of any insurance policies
held hereunder shall be effective until such change of beneficiary shall have
been completed in the manner and to the extent required by the companies issuing
such policies.
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B. The Trustee shall have power to execute, or join with the Grantor in
the execution of, such instrument or instruments, including assignments, as the
Trustee may deem necessary, advisable or proper to enable the Grantor to
exercise, or to facilitate the Grantor's exercise of, any of the rights reserved
to the Grantor under this Family Trust. The foregoing provision giving the
Trustee power to execute, or join with the Grantor in the execution of,
instruments shall apply even though the same may be for the benefit of, or in
favor of, the Trustee.
C. The Grantor reserves the right, for the Grantor and for any and all
other persons, to add other personal and/or real property to the trusts herein
created, and to place the same within the operation of all of the terms and
conditions of this Family Trust by delivering, conveying, transferring, devising
or bequeathing the same to the Trustee; provided, however that such right may be
exercised with regard to inter vivos gifts only with the consent of the Trustee.
The execution of this Family Trust by the Trustee shall constitute the Trustee's
agreement to administer all property so received by the Trustee in trust in
accordance with such terms and conditions.
ARTICLE VII: INSURANCE PROVISIONS
A. All benefits, privileges and options accruing or available under any
said insurance policies prior to the death of the Grantor, including any right
reserved in any of said policies to the Grantor to change the beneficiary
thereunder, to convert the said policies into other forms of policies, to borrow
in accordance with the terms of said policies, to pledge, hypothecate, sell or
assign the same or any of them, and to receive and collect all dividends and
other payments and the proceeds of maturing policies shall be for the sole
benefit of the Grantor and shall not be subject to this Family Trust. If the
Grantor changes the beneficiary under any of said policies, or surrenders any
such policy for its cash surrender value, such act shall have the effect of
revoking this Family Trust with respect to the policy or policies so changed or
surrendered.
B. It is also expressly understood and agreed that any and all of the
policies deposited under the terms of this Family Trust may be assigned by the
Grantor for the purpose of obtaining a loan on said policies and that, upon the
Grantor's request, the Trustee, as beneficiary named in any or all policies
deposited hereunder, may join in such assignment to any individual, partnership,
corporation or association, and in so doing shall not by reason of such joinder,
in any way be or become liable to any person interested hereunder.
C. Upon receipt of written request from the Grantor, the Trustee shall
be bound to deliver to the Grantor any policies in the Trustee's possession and
to reassign to the Grantor any policies theretofore assigned to the Trustee.
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D. The Grantor shall have the right to include within this Family Trust
other life and/or accident insurance policies in addition to any described in
Schedule "A" attached hereto.
E. The payments of any insurance company of the proceeds of any policy
of insurance to the Trustee shall be a full discharge of said insurance company
on account of such policy, and such insurance company shall in no way be
responsible for the proper discharge of this Family Trust or any part thereof.
F. The Trustee shall be responsible for the proceeds of the policies
only as, if and when paid to the Trustee, and the Trustee shall not be liable to
anyone if for any reason the policies, or any of them, shall lapse or shall
otherwise be uncollectible. Except at the Trustee's own option, the Trustee
shall not enter into or maintain any litigation to enforce payment of the
policies, or any of them, until the Trustee shall have been indemnified to the
Trustee's satisfaction against all expenses and liabilities to which the Trustee
may, in the Trustee's judgment, be subject by such action on the Trustee's part,
but the Trustee may utilize the proceeds of any policy to meet expenses incurred
in connection with enforcing payment of any other policy.
ARTICLE VIII: GOVERNING LAW
This Family Trust shall be considered an Ohio trust and all questions
pertaining to its validity, construction and administration shall be determined
in accordance with the laws of that State.
ARTICLE IX: SURVIVORSHIP
The Grantor hereby declares that, in determining whether the Grantor's
spouse, survives the Grantor, if the order in which their deaths occur cannot be
established by proof, the Grantor's said spouse shall be deemed to have survived
the Grantor for all the purposes of this Family Trust. Furthermore, if the
Grantor's said spouse survives the Grantor, legacies hereunder to the Grantor's
said spouse or for the Grantor's said spouse's benefit shall not fail on account
of the operation of Ohio Revised Code Section 2105.21 or on account of the
operation of any other rule or law treating the Grantor's said spouse who
survives the Grantor as though the Grantor's said spouse had predeceased the
Grantor.
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IN WITNESS WHEREOF, the Grantor has hereunto set his hand and ALBERT L.
SCHWARZ, to evidence the Trustee's acceptance of the trusts herein expressed has
set his hand to this Family Trust at Dayton, Ohio, as of the day and year
first above written.
WITNESS:
/s/ Juliana M. Spaeth /s/ Albert L. Schwarz
________________________ __________________________________
ALBERT L. SCHWARZ, Grantor
WITNESS:
/s/ Juliana M. Spaeth /s/ Albert L. Schwarz
________________________ __________________________________
ALBERT L. SCHWARZ, Trustee
STATE OF OHIO )
) SS:
COUNTY OF MONTGOMERY )
Before me, a Notary Public in and for said County and State, personally
appeared the above named ALBERT L. SCHWARZ, who acknowledged that he did sign
the foregoing instrument and that the same is his voluntary act and deed. I
further attest that ALBERT L. SCHWARZ appears to be of sound mind and not under
duress, fraud, or undue influence.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Dayton, Ohio this 28th day of December, 1995.
/s/ Juliana M. Spaeth
____________________________________
Notary Public
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This instrument was prepared by:
JULIANA M. SPAETH, ESQ.
Sebaly, Shillito & Dyer
A Legal Professional Association
1300 Courthouse Plaza, N.E.
P.O. Box 220
Dayton, Ohio 45402-0220
(513) 222-2500
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