<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.__)*
United Stationers Inc.
----------------------
(Name of Issuer)
Common Stock, $.10 par value
----------------------------
(Title of Class of Securities)
913004-10-7
-----------------------------------------
(CUSIP Number)
Melvin L. Hecktman
Hecktman Management
Suite 350
510 Lake Cook Road
Deerfield, Illinois 60015
(708)374-8400
---------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 10, 1995
----------------------------------------------------------
(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.)
Note. Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1 (a) for other parties to whom copies are to
be sent.
/*/ The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
<PAGE>
CUSIP NO. 913004-10-7 Page 2 of 5 Pages
- --------------------------------------------------------------------------------
1. Name of Reporting Person:
Melvin L. Hecktman
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group:
(a) [_]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds: 00
- --------------------------------------------------------------------------------
5. Check box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f):
[_]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization: Illinois
Number of ----------------------------------------------------
Shares 7. Sole Voting Power: 6,667
Beneficially ----------------------------------------------------
Owned By 8. Shared Voting Power: 1,067,505
Each ----------------------------------------------------
Reporting 9. Sole Dispositive Power: 6,667
Person ----------------------------------------------------
With 10. Shared Dispositive Power: 1,067,505
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,074,172
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain
Shares:
Excludes 80,000 shares owned by the Melvin and Judith Hecktman Charitable
Remainder Trust of which the Reporting Person is a beneficiary; the
Reporting Person disclaims beneficial ownership of such shares. [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11): 5.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person: IN
- --------------------------------------------------------------------------------
<PAGE>
Page 3 of 5 Pages
13D
Pursuant to Rule 13d-2 of Regulation 13D-G promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the undersigned, Melvin
L. Hecktman, hereby files this Schedule 13D Statement on his own behalf. The
foregoing individual is sometimes hereinafter referred to as the "Reporting
Person".
Item 1. SECURITY AND ISSUER.
This Statement relates to the Common Stock, $.10 par value (the
"Common Stock"), of United Stationers Inc., a Delaware corporation (the
"Issuer"), 2200 East Golf Road, Des Plaines, Illinois 60016.
Item 2. IDENTITY AND BACKGROUND.
(a)-(c) The principal business of the Reporting Person is as set forth
in Item 4 below. The principal business address of the Reporting Person
(which also serves as his principal office) is as stated below. Pursuant
to Instruction C to Schedule 13D under the Act, the Reporting Person's
business or residence address and present principal occupation is as
follows:
RESIDENCE OR BUSINESS OCCUPATION
ADDRESS
c/o Hecktman Management Managing General Partner
Suite 350
510 Lake Cook Road
Deerfield, Illinois 60015
(d) During the last five years, the Reporting Person has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, the Reporting Person has not 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 finding any violation with respect to such laws.
(f) The Reporting Person is a citizen of the United States of America.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The 1,067,505 shares of Common Stock beneficially owned by the
Reporting Person were acquired by the Melvin L. Hecktman Family Investment
Partnership, an Illinois limited partnership ("MLHFIP") and MLH Investment
Partnership, an Illinois general partnership ("MLHIP") on February 10,
1995, when HW Associates, an Illinois general partnership ("HW"), dissolved
and distributed to MLHFIP and MLHIP, their pro-rata shares of Common Stock.
The Reporting Person is a general partner of both MLHFIP and MLHIP.
Item 4. PURPOSE OF TRANSACTION.
The Reporting Person acquired his beneficial interest in the shares of
Common Stock upon the dissolution of HW and the simultaneous pro-rata
<PAGE>
Page 4 of 5 Pages
distribution to HW's partners of the shares of Common Stock held by HW. The
Reporting Person is currently holding his shares of Common Stock solely as
an investment. On February 13, 1995, the Reporting Person entered into an
Agreement to Tender (the "Agreement to Tender") with Associated Holdings,
Inc. ("Associated") pursuant to which the Reporting Person has agreed,
subject to the terms and conditions of the Agreement to Tender, to tender
his shares in a tender offer to be commenced by Associated pursuant to an
Agreement and Plan of Merger between the Issuer and Associated dated
February 13, 1995. A copy of the Agreement to Tender is attached hereto as
EXHIBIT A and is incorporated herein by this reference.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)(b) The Reporting Person beneficially owns 1,067,505 shares of
Common Stock or an aggregate 5.7% of the outstanding Common Stock as a
general partner in both MLHIP which owns 863,670 shares of Common Stock and
MLHFIP which owns 203,835 shares. The Reporting Person is also one of the
beneficiaries of the Melvin and Judith Hecktman Charitable Remainder Trust
u/a/d February 1, 1995 which owns 80,000 shares and as to which the
Reporting Person disclaims beneficial ownership for purposes of this
filing.
(c) None of the entities referred to in response to Paragraph (a) of
this Item 5, or in Item 2 above, has effected any transactions in the
Common Stock during the past 60 days except as follows:
On February 10, 1995, immediately upon acquiring its pro-rata
shares of Common Stock from HW, MLHFIP distributed
(1) 68,757 shares to the Reporting Person who subsequently
transferred 66,757 shares to the Trustee of the Melvin and
Judith Hecktman Charitable Remainder Trust u/a/d February 1,
1995 and 2,000 shares to charitable organizations; and
(2) 13,243 shares to Judith Hecktman who immediately thereafter
transferred all 13,243 shares of Common Stock to the Trustee
of the Melvin and Judith Hecktman Charitable Remainder Trust
u/a/d February 1, 1995.
(d) No entity other than those referred to in response to Paragraph
(a) of this Item 5 has the right to receive or the power to direct the
receipt of dividends from, or the proceeds of the sale of, shares of Common
Stock owned by them.
(e) Item 5(e) of Schedule 13D is not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The rights, powers and duties of the Reporting Person with respect to
his interest in MLHFIP is as set forth in the Agreement of Limited
Partnership for Melvin L. Hecktman Family Investment Partnership dated as
of September 19, 1983 (the "MLHFIP Partnership Agreement") attached hereto
as EXHIBIT B and is incorporated herein by reference and the rights, powers
and duties of the Reporting Person with respect to his interest in MLHIP is
as set forth in the Agreement of Partnership for MLH Investment Partnership
dated as of September 19, 1983 (the "MLHIP Partnership Agreement") attached
hereto as EXHIBIT C and is incorporated herein by this reference.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT A Agreement to Tender
<PAGE>
Page 5 of 5 Pages
EXHIBIT B MLHFIP Partnership Agreement
EXHIBIT C MLHIP Partnership Agreement
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February __, 1995
By:
---------------------------------------------
Melvin L. Hecktman, as general partner of
MLHFIP and managing partner of MLHIP.
<PAGE>
EXHIBIT A
AGREEMENT TO TENDER
-------------------
This Agreement to Tender (the "Agreement") dated as of February __,
1995 among Associated Holdings, Inc., a Delaware corporation ("Purchaser"), and
the persons whose names are set forth on Schedule A hereto (individually a
"Shareholder" and collectively the "Shareholders").
Recitals:
--------
A. Purchaser and United Stationers Inc., a Delaware corporation (the
"Company") are simultaneously herewith entering into an Agreement and Plan of
Merger dated as of the date hereof (the "Merger Agreement"), which provides,
among other things, that Purchaser, upon the terms and subject to the conditions
thereof, will make a cash tender offer for up to 92.5% of the outstanding shares
of common stock, par value $.10 per share, of the Company (the "Shares") at a
price of $15.50 per Share, pursuant to an Offer to Purchase and related Letter
of Transmittal which together constitute the "Offer" included in a Tender Offer
Statement on Schedule 14D-1 filed by Purchaser with the Securities and Exchange
Commission (the "Offer Statement"), or such higher price per share pursuant to
the Offer. Upon completion of the Offer, Purchaser will merge with the Company
(the "Merger") and each then outstanding Share (other than certain Shares
identified in Section 3.1(b) of the Merger Agreement) would be converted as
provided in Section 3.1(a) of the Merger Agreement (the Offer and Merger being
collectively referred to as the "Transaction").
B. As a condition to entering into the Merger Agreement, Purchaser
has requested, and each of the Shareholders has agreed, to make certain
agreements and covenants with Purchaser, upon the terms and subject to the
conditions hereinafter set forth with respect to the respective number of Shares
set forth on Schedule A hereto opposite the name of each of the Shareholders.
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained herein, the parties hereto agree as
follows:
ARTICLE I
Agreement to Tender Shares
--------------------------
Section 1.1 Tender. Subject to the terms and conditions of this
Agreement and of the Offer, each Shareholder agrees severally for itself only to
tender to Purchaser pursuant to the
<PAGE>
Offer in accordance with the terms thereof ("Tender") and not withdraw except as
permitted hereby all Shares held by such Shareholder. The approximate number of
Shares owned by the Shareholder are set forth on Schedule A hereto opposite the
name of such Shareholder and Purchaser shall accept for payment and pay for all
of such Shares Tendered by such Shareholder at the price of $15.50 per Share or
such higher price to be paid under the terms of the Offer by means of a wire
transfer to an account as specified by the Shareholder at the following time:
one business following the Expiration Date (as defined in the Offer Statement)
if the aggregate number of shares Tendered are less than the Maximum Number (as
defined in the Offer Statement) or one business day following the announcement
of the final proration factor should more than the Maximum Number be Tendered.
In the event that any Shareholder acquires any additional Shares prior to the
Tender of its Shares hereunder, all such additional Shares shall be subject to
the terms of this Agreement. Notwithstanding the foregoing, no Shareholder shall
be required to Tender Shares and, if such Shareholder has Tendered Shares, shall
be permitted to withdraw its Shares, if this Agreement is terminated as set
forth in Section 6.1 hereof.
Section 1.2 Adjustment Upon Changes in Capitalization. In the
event of any change in the Shares by reason of any stock dividends, split-ups,
mergers, recapitalizations or other changes in the corporate or capital
structure of the Company, the number and kind of Shares subject to this
Agreement shall be appropriately adjusted.
ARTICLE II
Related Matters
---------------
Section 2.1 Acquisition Transaction. The parties acknowledge that
Purchaser would not have entered into the Merger Agreement without the
concurrent execution of this Agreement and that each Shareholder and Purchaser
would not have entered into this Agreement without the concurrent execution of
the Merger Agreement.
Section 2.2 Agreement to Vote. Subject to Section 6.1 hereof,
each Shareholder agrees to vote all their shares set forth on Schedule A, at any
meeting of shareholders, in favor of the Merger Agreement, the Merger and all
transactions arising out of the Merger Agreement which require shareholder
approval. The Shareholder's agreement to vote their shares shall include an
agreement to execute written consents in lieu of a meeting.
-2-
<PAGE>
ARTICLE III
Representations
and Warranties of the Shareholders
----------------------------------
Each of the Shareholders, severally, and not jointly, hereby
represents and warrants to Purchaser as follows:
Section 3.1 Ownership of the Shares. Such Shareholder is the
record or beneficial owner with full or shared voting power of the number of
Shares set forth opposite such Shareholder's name on Schedule A hereto (which
are all the Shares which such Shareholder so owns of record or beneficially),
and at the time of Tender will have good title, and (subject to the provisions
of Section 2.2 hereof) full voting power, with respect to all such Shares, free
and clear of all liens, charges, encumbrances, equities, claims and options or
other defects in title which may restrict such Shareholder's ability or
authority to tender, sell, and deliver such Shares hereunder.
Section 3.2 Authorization; Valid and Binding Agreement. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a valid and binding agreement of such Shareholder enforceable
against such Shareholder in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity, including
principles of good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or equity). Except as set forth in the Merger
Agreement, no consent or approval or any court, federal or state governmental
agency, or any other person or entity is required in connection with the
execution and consummation of the transactions contemplated by this Agreement to
permit each to carry out its obligations hereunder.
Section 3.3 No Conflicts. Neither the execution and delivery of
this Agreement nor the consummation by such Shareholder of the transactions
contemplated hereby will constitute a violation of, or conflict with, or
constitute a default under, any contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which such Shareholder is a party or
by which such Shareholder is bound or any judgment, decree or order applicable
to such Shareholder.
-3-
<PAGE>
ARTICLE IV
Representations and
Warranties of Purchaser
-----------------------
Purchaser hereby represents and warrants to the Shareholders as
follows:
Section 4.1 Authorization; Valid and Binding Agreement. Purchaser
has all requisite corporate power and authority to enter into this Agreement,
and this Agreement has been duly authorized by all necessary corporate action on
the part of Purchaser. This Agreement has been duly and validly executed and
delivered by Purchaser, and constitutes a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principle of equity
including principles of good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or equity).
Section 4.2 Securities Matters. Purchaser is acquiring the Shares
for its own account and not with a view to the public distribution thereof and
will not offer to sell or otherwise dispose of the Shares acquired in violation
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
ARTICLE V
Covenants
---------
Section 5.1 Other Transactions. Each Shareholder agrees severally,
and for itself only, that, prior to the termination of this Agreement, such
Shareholder shall not engage in any action or omission that would have the
effect of preventing or disabling such Shareholder from Tendering its Shares to
Purchaser. Without limiting the foregoing and except as provided in this
Agreement, until the termination of this agreement such Shareholder agrees not
to sell or transfer, or agree to sell or transfer, any of the Shares provided,
however, that a Shareholder may transfer his or her Shares to a person,
partnership, trust, or other entity so long as such person or entity agrees in
writing to be bound by the terms, provisions and conditions of this Agreement.
Upon such transfer, the transferor shall be released from the terms of this
Agreement with regard to such transferred Shares.
-4-
<PAGE>
ARTICLE VI
Termination
-----------
Section 6.1 Termination. This Agreement shall terminate
automatically upon the earlier of (i) the Effective Time (as defined in the
Merger Agreement), (ii) the termination of the Merger Agreement for any
reason,or (iii) any time following the public announcement by any person of an
offer to acquire at least a majority of the outstanding Shares which the
Shareholder reasonably believes offers a higher economic value to the
Shareholder than the Offer and where the Shareholder gives notice to Purchaser
of such termination.
Section 6.2 Effect of Termination. In the event of the termination
of this Agreement pursuant to Section 6.1, this Agreement (including, without
limitation, the voting agreement set forth herein) shall forthwith become void
and have no effect, without liability on the part of any party or its trustees,
partners, beneficiaries, directors, officers, and shareholders or affiliates.
Nothing contained in this Article VI shall relieve any party from liability for
any material breach of this Agreement or the Offer.
ARTICLE VII
Miscellaneous
-------------
Section 7.1 Expenses. Each of the parties hereto will pay all fees
and expenses it incurs in connection with this Agreement, including without
limitation the fees and expenses of its financial and legal advisors. Each
Shareholder represents and warrants to Purchaser that such Shareholder has not
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
herein.
Section 7.2 Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements of Purchaser and the Shareholders
in this Agreement or in any instrument delivered by Purchaser and the
Shareholders pursuant to this Agreement shall not survive the consummation of
the Merger.
Section 7.3 Assignment; Parties in Interest. Except as permitted by
Section 5.2 hereof or as required by operation of law, this Agreement shall not
be assignable by the parties hereto without the prior written consent of the
other parties. This Agreement will be binding upon, inure to the benefit of and
be enforceable by the parties and their respective successors and permitted
assigns.
-5-
<PAGE>
Section 7.4 Entire Agreement; Amendments. This Agreement and the
documents referred to herein or delivered pursuant hereto which form a part
hereof, contain the entire understanding of the parties with respect to its
subject matter. There are no representations, warranties, agreements, promises,
covenants or undertakings other than those expressly set forth herein or
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter. This Agreement may be
amended only by a written instrument duly executed by all the parties. Any
condition to a party's obligations hereunder may be waived in writing by such
party.
Section 7.5 Notices. All notices, claims, certificates, requests,
demands and other communications ("Notices") required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, upon receipt of the telecopy confirmation when telecopied,
upon receipt if sent by a nationally recognized overnight courier service or two
(2) business days after being mailed (registered or certified mail, postage
prepaid, return receipt requested), addressed as follows:
(a) If to Purchaser, to:
1075 Hawthorn Drive
Itasca, Illinois 60143
Telecopy: (708) 775-7509
Attention: Daniel H. Bushell
With copies to:
Weil, Gotshal & Manges
100 Crescent Court
Dallas Texas 75201-6950
Telecopy: (214) 746-4777
Attention: Lawrence D. Stuart, Jr., Esq.
(b) If to the Shareholders, to each Shareholder at the address set
forth on their respective signature page to this Agreement:
With copies to:
Altheimer & Gray
10 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
Telecopy (312) 715-4800
-6-
<PAGE>
Attention: Phillip Gordon, Esq.
or to such other address as the person to whom Notice is to be given may have
previously furnished to the other in writing in the manner set forth above.
Section 7.6 Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Illinois without giving
effect to the principles of conflicts of law thereof.
Section 7.7 Severability of Provisions. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
Section 7.8 Counterparts; Headings. This Agreement may be executed
simultaneously in several counterparts, each of which will be deemed to be an
original, but all of which together will constitute one and the same instrument.
The article and section headings contained herein are for reference purposes
only and will not affect in any way the meaning or interpretation of this
Agreement.
Section 7.9 Remedies. The parties hereto agree that if for any reason
any party hereto shall have failed to perform its obligations under this
Agreement, then any other party hereto seeking to enforce this Agreement against
such non-performing party shall be entitled to specific performance and
injunctive and other equitable relief, and the parties hereto further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief. This provision
is without prejudice to any other rights that any party hereto may have against
any other party hereto for any failure to perform its obligations under this
Agreement.
Section 7.10 Further Assurances. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use reasonable efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective agreement to tender and vote contemplated by this
Agreement.
Section 7.11 Exculpation. Notwithstanding anything to the contrary
contained herein, with respect to Shareholders which are partnerships or trusts,
there shall be no personal liability hereunder on any partners or trustees with
respect to the terms, conditions, representations, warranties or covenants
contained in this Agreement. Purchaser shall look solely to such Shareholder
and not to any partners or trustees of those Shareholders for the satisfaction
of all remedies which Purchaser may have hereunder.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
ASSOCIATED HOLDINGS, INC.
By: _____________________________By:
Title: __________________________
-8-
<PAGE>
FISHMAN FAMILY
INVESTMENT PARTNERSHIP
By:______________________________
Joan Fishman, General Partner
Address:
_________________________________
Philip Gordon, not personally,
but as Tustee of the Joan
Fishman Charitable Remainder
Trust u/a/d 2/1/95
Address:
<PAGE>
JEROLD A. HECKTMAN
FAMILY INVESTMENT
PARTNERSHIP
By: _____________________________ ___________________________
Jerold A. Hecktman, Jerold A. Hecktman
General Partner
Address: Address:
_________________________________
Philip Gordon, not personally,
but as Trustee of the Jerold
and Ruth Hecktman Charitable
Remainder Trust u/a/d 2/1/95
Address:
<PAGE>
MELVIN L. HECKTMAN
FAMILY INVESTMENT
PARTNERSHIP
By: _____________________________ ___________________________
Melvin L. Hecktman, Melvin L. Hecktman
General Partner
Address: Address:
MLH INVESTMENT PARTNERSHIP ___________________________
Philip Gordon, not
personally, but as
Trustee of the Julie B.
Hecktman Charitable
By: _____________________________
Melvin L. Hecktman, Address:
Managing General Partner
Address:
_________________________________
Charitable Remainder Trust
u/a/d 2/1/95
Address:
_________________________________
Philip Gordon, not personally,
but as Trustee of the Sherri A.
Sheftel Charitable Remainder Trust
u/a/d 2/1/95
Address:
<PAGE>
MILLS FAMILY
INVESTMENT PARTNERSHIP
By: _____________________________
Barbara Wolf,
General Partner
Address:
_________________________________
Philip Gordon, not personally,
but as Trustee of the Barbara
Mills Charitable Remainder Trust
u/a/d 2/1/95
Address:
<PAGE>
WOLF FAMILY
INVESTMENT PARTNERSIP
By: _____________________________
Barbara Wolf Savage,
General Partner
Address:
_________________________________
Philip Gordon, not personally,
but as Trustee of the Barbara
Wolf Savage Charitable Remainder
Trust u/a/d 2/1/95
Address:
<PAGE>
_________________________________ JOEL D. SPUNGIN
Joel D. Spungin INVESTMENT PARTNERSHIP
_________________________________
Marilyn G. Spungin By: ___________________________
Joel D. Spungin,
Partner
_________________________________
Debra A. Spungin _______________________________
Marc A. Spungin
_________________________________
Philip Gordon, not personally, _______________________________
but as Trustee of the Joel and Marilyn G. Spungin, not
Marilyn Spungin Charitable personally, but as Co-
Remainder Trust u/a/d 2/1/95 Trustee of the Joel J.
Spungin Family Trust
u/a/d 11/15/90
_______________________________
Robert B. Scadron, not
personally, but as Co-
Trustee of the Joel D.
Spungin Family Trust
u/a/d 11/15/90
_______________________________
Philip Gordon, not
personally, but as
Trustee of the Joel and
Marilyn Spungin
Charitable
Remainder Trust u/a/d
2/1/95
<PAGE>
SCHEDULE A
----------
<TABLE>
<CAPTION>
Number of
Shareholder Shares
----------- ---------
<S> <C>
Fishman Family Investment Partnership 586,134
Joan Fishman Charitable Remainder Trust u/a/d 50,000
2/1/95
Jerold A. Hecktman Family Investment Partnership 902,795
Jerold A. Hecktman 4,385
Jerold and Ruth Hecktman Charitable Remainder 200,000
Trust u/a/d 2/1/95
Melvin Hecktman 6,667
Melvin L. Hecktman Family Investment Partnership 203,835
Melvin and Judith Hecktman Charitable Remainder 80,000
Trust u/a/d 2/1/95
MLH Investment Partnership 863,670
Mills Family Investment Partnership 533,197
Barbara Mills Charitable Remainder Trust u/a/d 50,000
2/1/95
Wolf Family Investment Partnership 921,057
Barbra Wolf Savage Charitable Remainder Trust 133,333
u/a/d 2/1/95
Joel D. Spungin 101,468
Joel and Marilyn Spungin Charitable Remainder 33,333
Trust u/a/d 2/1/95
Joel D. Spungin Investment Partnership 1,000
Joel D. Spungin Family Trust 57,682
Marilyn G. Spungin 7,648
Debra A. Spungin 4,856
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Marc A. Spungin 4,868
Steven M. Spungin 4,856
---------
Total 4,750,784
=========
</TABLE>
<PAGE>
EXHIBIT B
---------
AGREEMENT OF LIMITED PARTNERSHIP FOR
MELVIN L. HECKTMAN FAMILY INVESTMENT PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP for Melvin L. Hecktman Family
Investment Partnership, dated as of September 19, 1983 ("Agreement"), by and
between Melvin L. Hecktman, Judith Hecktman, Melvin L. Hecktman as custodian for
Brian J. Hecktman, Julie B. Hecktman and Sherri A. Hecktman under the Uniform
Gifts to Minors Act, and the trustees of the trusts listed on the signature page
attached hereto (herein collectively called the "Partners", and individually, a
"Partner").
W I T N E S S E T H:
-------------------
WHEREAS, each of the Partners owns certain shares of the outstanding
Common Stock of United Stationers Inc., a Delaware corporation, ( "United" );
and
WHEREAS, the Partners are each related by blood or marriage, or are
trusts for the benefit of persons who are so related, and together constitute,
with such beneficiaries, the immediate Melvin L. Hecktman family; and
WHEREAS, all the Partners desire to form a limited partnership and to
contribute to such partnership certain of their shares of United Common Stock
(the "Shares"), and certain of the Partners desire also to contribute to such
partnership portions of their partnership interests in 1701 Partnership, an
Illinois general partnership (the "1701 Interests"), in order to, among other
things:
(i) establish centralized control over the Shares and the 1701
Interests and other possible investments; and
(ii) invest any and all Partnership assets in such investments,
securities, businesses, real estate interests and other investment
opportunities as the General Partner may from time to time deem to
be in the best interests of the Partnership.
NOW THEREFORE, in consideration of the premises, of the promises and
agreements herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
promise and agree as follows:
ARTICLE I
FORMATION AND NAME, ETC.
Section 1.1. Formation and Name of Partnership. The parties hereto hereby
agree to form a limited partnership (the "Partnership") upon the terms and
conditions herein set forth and in conformity with the Uniform Limited
Partnership Act of the State of Illinois (the "Act"). The name of the
Partnership shall be
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Melvin L. Hecktman Family Investment Partnership or such other name as the
General Partner may from time to time select.
Section 1.2. Purposes. The purposes of the Partnership are to:
(i) acquire, own, hold, purchase, sell, invest and reinvest in the
Shares, the 1701 Interests and other shares of stock, notes, bonds,
debentures, interests in real estate and other securities and investment
assets;
(ii) invest any and all Partnership assets in HW Associates, an Illinois
general partnership, and in such investments, securities, businesses, real
estate interests and the investment opportunities as the Partnership may
from time to time deem to be in the best interest of the Partnership.
(iii) insure centralized control of the Shares and other 1701 Interests,
and other possible investments, including the voting thereof;
(iv) permit the Partners to borrow from the Partnership from time to time;
and
(v) do all of the acts and things permitted or required by the terms of
this Agreement or reasonably necessary or incident to the foregoing
purposes.
Section 1.3. Offices. The offices of the Partnership shall be at such
place or places as the General Partner may from time to time determine.
ARTICLE II
THE PARTNERS
Section 2.1. General Partner; In General. Except as otherwise provided
here"in, the business and affairs of the Partnership shall be conducted by the
General Partner. From and as of the date of this Agreement, and until his
"Withdrawal" (as defined in Section 8.2(a)), Melvin L. Hecktman shall be the
sole General Partner.
Section 2.2. Duties and Powers of the General Partner.
(a) The General Partner shall:
(i) manage the affairs of the Partnership;
(ii) determine the terms of Partnership borrowings and loans to
Partners; and
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(iii) use his best efforts to carry out the terms of this
Agreement.
(b) The General Partner may:
(i) purchase, sell and otherwise deal with the Shares, the 1701
Interests and other shares of stock, notes, bonds, debentures, interests
in real estate and other securities and investment assets and invest funds
held on hand for the benefit of the Partnership; invest the Shares in HW
Associates, an Illinois general partnership, borrow upon the credit of the
Partnership; and pledge all or any part of the Partnership assets to
secure such borrowings;
(ii) vary, modify, suspend or waive any of the terms or provisions of
Sections 6.4, 6.5, 6.6 and 6.7 either generally or with respect to any
particular Partner or any particular transaction;
(iii) increase the amount of any Partner's loan account;
(iv) make distributions in partial liquidation to the Partners;
(v) pay reasonable compensation to the General Partner including,
but not by way of limitation, fees and reimbursement for expenses;
(vi) invest Partnership funds;
(vii) vote or direct the voting of the Shares, the 1701 Interests or
any securities having voting rights which may be at any time be owned by
the Partnership;
(viii) exercise such other rights and powers as are herein granted as
may be necessary or appropriate to attain the ends and purposes of this
Agreement, including the hiring of agents, accountants and attorneys; and
(ix) establish and administer reasonable rules and procedures for the
calling and conduct of meetings of Partners, for the sending of notices
and other communications, and for the general administration of the
internal and external affairs of the Partnership.
(c) Without limiting the generality of the foregoing (specifically
including, but not by way of limitation, clause (vii) above), the General
Partner is hereby specifically authorized to enter the Partnership into
partnerships or agreements with other entities owning or controlling other
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Shares or partnership interests in 1701 Partnership for the purpose of (i)
governing the disposition and voting of the Shares, (ii) controlling United
together with such other entities, (iii) governing the disposition and
voting of partnership interests in 1701 Partnership, (iv) controlling 1701
Partnership together with such other entities, (v) investing in any
opportunity which the Partnership would have the power to invest in
directly, and (vi) participating in such other activities as the General
Partner may, from time to time, deem to be in the best interest of the
Partnership.
Section 2.3. Limited Partners. The Limited Partners shall be Judith
Hecktman (until appointed General Partner pursuant to Section 8.2 hereof),
Melvin L. Hecktman as custodian for Brian J. Hecktman, Julie B. Hecktman and
Sherri A. Hecktman under the Uniform Gifts to Minors Act, trustees of each of
the trusts described in Exhibit A hereto, and, at such time as a "Transfer" (as
defined in Section 5.1) shall be made by any of such trusts to the beneficiaries
thereof pursuant to the provisions of their respective trust agreements, the
beneficiaries of such trusts. As Limited Partners, they shall in no way
participate in the management and control of the conduct of the Partnership
business. Anything in this Agreement to the contrary notwithstanding, no Limited
Partner shall purport to exercise any rights or powers as a Limited Partner
under this Agreement if he or she would thereby be deemed to be taking part in
the control of the business of the Partnership. No Limited Partner will be
personally liable for any debts, liabilities, contracts or any other obligations
of the Partnership and no Limited Partner will have any obligation to make
capital contributions to the Partnership except as specifically provided in this
Agreement. The Limited Partners are not entitled to borrow or withdraw from the
Partnership any portion of their respective capital contributions except as may
be specifically provided in this Agreement.
Section 2.4. No Authority to Bind Partnership. No Partner (except the
General Partner acting as such in accordance with this Agreement) shall
individually have authority to act on behalf of or in the name of the
Partnership, or at any time by any act or thing bind the Partnership. The
General Partner shall have the exclusive right to vote the 1701 Interests, the
Shares and other securities having voting rights which at any time may be owned
by the Partnership.
Section 2.5. Relationship Between the Partners and the Partnership. The
Partners may engage in or invest in such businesses or activities as they see
fit, without regard to whether such businesses or activities are competitive
with the Partnership. The Partners shall not be required to devote full time to
the business and affairs of the Partnership. No Partner shall be required to
submit business or investment opportunities to the Partnership. The various
Partners and the Partnership,
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respectively, may engage in any transactions with each other as they see fit, as
if the Partners were not partners of the Partnership. The fiduciary duties of
the various Partners to the Partnership and to the Partners shall be determined
by taking into account the principles of this Section 2.5, and, in any event
(and not by way of limitation where good faith is present), the acts of the
various Partners shall be sustained if they are objectively fair. This Section
2.5 shall apply as well to the General Partner as to other Partners.
Section 2.6. Fiduciaries. Where trusts, estates, or other such entities
are treated as Partners or other holders of Partnerships interests, the
trustees, executors, and other fiduciaries thereof as such shall not in their
personal capacities be treated as Partners or other holders of Partnership
interests or as persons having rights and duties thereunder, but such Partner
status and such Partnership interests, rights and duties shall be treated as
appertaining to the fiduciary estate.
Section 2.7. Reimbursement and Compensation of the General Partner. The
General Partner shall be entitled to reimbursement for reasonable out-of-pocket
expenses incurred by him on behalf of the Partnership or in pursuance of his
duties as General Partner. In addition, the General Partner shall be entitled to
compensation for services rendered to the Partnership.
ARTICLE III
CAPITAL CONTRIBUTIONS AND ACCOUNTS,
PROFITS AND LOSSES, ETC.
Section 3.1. Capital Accounts. A capital account shall be maintained for
each Partner. Each Partner's capital account shall consist of capital
contributions made from time to time by such Partner and such Partner's
predecessor(s), increased by his or his predecessor's respective share, if any,
of profits and decreased by (i) any distributions made to him or his
predecessor, and (ii) his or his predecessor's respective share, if any, of
Partnership losses. No interest shall be paid or credited to Partners on their
capital accounts. No Partner shall be entitled to the withdrawal or the return
of any part of his capital account except in accordance with the provisions of
this Agreement.
Section 3.2. Units. The interests of the Partners in the Partnership
shall be represented by Units (hereinafter referred to sometimes collectively
and sometimes alternatively as "Units"), having respectively such attributes as
are prescribed in this Agreement. Units shall be allocated to the Partners in
respect of their initial capital contributions on the basis of 1 Unit, or
fraction thereof, for every of $1,000 in fair market value, or fraction thereof
(determined by the General Partner) of assets contributed.
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Section 3.3. Initial Capital Contributions. Each Partner has contributed
to the Partnership on the date hereof the Shares and (if any) the 1701 Interests
set forth opposite his name on Exhibit B hereto and has been allocated the Units
set forth opposite his name on Exhibit B.
Section 3.4. Variation Between Basis and Value. In the case of any
Partnership item (for tax purposes) of income, gain, loss, deduction, or credit,
relating to any Share or other item of property contributed to the Partnership,
such item shall be allocated and other appropriate adjustments shall be made so
as to take full account of the variation (the "pre-contribution variation")
between the tax basis of such Share or other item of property to the Partnership
and its fair market value at the time of contribution. Such allocations and
adjustments shall be made in an equitable manner by the General Partner upon the
advice of the "Accountants" (defined in Section 10.7) in accordance with section
704(c)(2) of the Internal Revenue Code of 1954, as amended, and the regulations
thereunder. This Section 3.4 shall apply notwith-standing any other provisions
of this Agreement. Such other provisions shall be applied after taking into
account the application of this Section 3.4 and shall be construed accordingly.
Section 3.5. Ordinary Income and Loss and Capital Gain and Loss.
"Ordinary Income" or "Ordinary Loss" for any accounting period shall be the net
income or loss of the Partnership computed without regard to items entering into
the computation of Net Capital Gain or Net Capital Loss. "Net Capital Gain" or
"Net Capital Loss" for any accounting period shall be the net capital gain or
loss of the Partnership on sales or other dispositions of securities or other
property and shall include such other items as the General Partner, upon the
advice of the Accountants, determines to be capital rather ordinary in nature.
Section 3.6. Allocations of Ordinary Income and Ordinary Loss. Ordinary
Income and Ordinary Loss shall be allocated among the Partners pro rata in
accordance with their Units. Ordinary Income and Ordinary Loss shall be
determined in accordance with generally accepted accounting principles
consistently applied.
Section 3.7. Distribution of Proceeds of Sales and Refinancing to be Made
as Partial Liquidation. At any time, in the discretion of the General Partner,
the proceeds of sales, refinancings and other dispositions of Partnership
property may be distributed as if the Partnership were being liquidated under
Section 3.10 and as if the fair market value of assets were equal to their
carrying values.
Section 3.8. Allocation of Net Capital Gain or Net Capital Loss. Net
Capital Gain and Net Capital Loss resulting from any sale or other disposition
of Partnership property shall be allocated among the Partners as if the
Partnership were to be
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liquidated immediately following the consummation of such transaction and as if
the fair market values of Partnership assets were equal to their carrying
values.
Section 3.9. Distributions.
(a) The General Partner shall have the right to determine whether, and to
what extent, the Partnership shall make distributions to the Partners; provided,
however, that nothing contained herein shall in any way obligate the General
Partner to cause distributions to be made to the Partners.
(b) All distributions, in cash or in kind, to each of the Partners in
respect of their Units shall be made, at such time, in such fashion, and in such
proportion as determined by the General Partner.
(c) At no time shall any Limited Partner be entitled to a return of his
capital contribution except in accordance with the provisions of this Section
3.9, or upon the dissolution and termination of the Partnership. If, in fact,
there has been any return, in whole or in part, of the capital contribution of a
Limited Partner under the terms of this Agreement, such distribution shall not
discharge such Limited Partner of or from his liability therefor to the
Partnership and its creditors. In no event shall the General Partner be
authorized to make any distributions which shall reduce the fair market value of
the Partnership assets to an amount less than the liabilities of the
Partnership. It is not contemplated that distributions in kind will be made
during the term of the Partnership except upon dissolution. If, however, in the
discretion of the General Partner, it is deemed in the best interests of the
Partnership that a distribution in kind be made in lieu of cash, the fair market
values of the assets to be distributed shall be determined by the General
Partner after consultation with the Accountants, counsel for the Partnership and
such other advisors as the General Partner may determine.
Section 3.10. Liquidation Distributions. Upon the termination, winding-up
or liquidation of the Partnership, all the debts and liabilities of the
Partnership shall be paid or provided for, and the "Partnership Net Assets"
(defined in Section 10.3) shall be distributed to the Partners in liquidation of
their Partnership interests, pro-rata in accordance with their Units.
Distributions may be in cash and/or in kind at the discretion of the General
Partner. The Shares and other securities shall be valued at Market Value
(defined in Section 10.4). Partnership assets shall be restated to their fair
market value and capital accounts shall be charged or credited accordingly as if
such assets were sold, all as of a date, selected by the General Partner, not
more than ten (10) days prior to the date of any distribution.
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Section 3.11. Adjustments to Units. If the General Partner, upon the
advice of the Accountants, determines that adjustments to capital accounts or
the allocation of Units or otherwise are necessary to effectuate the purposes
and intents of this Agreement, the General Partner shall adjust distributions or
make appropriate adjustments to the allocation of Units to reflect the net
balance of items of income, gain, loss and deduction which have been realized
and which remain undistributed and reflected in capital accounts.
ARTICLE IV
LOANS TO PARTNERS
Section 4.1. Partnership Loan Account. Each Partner shall have a loan
account with the Partnership and each Partner shall be entitled to borrow from
the Partnership, on such terms and conditions, and in such amounts (but in no
event greater than 80% of the value of such Partner's Partnership Interest), as
the General Partner shall from time to time establish.
Section 4.2. Partnership Notes, Etc. The General Partner shall have the
right to borrow on the credit of the Partnership on behalf of the Partnership
and, in connection therewith, to sign notes, drafts, security agreements and
grant security interests in partnership assets.
ARTICLE V
ASSIGNMENT AND TRANSFER OF INTERESTS
Section 5.1. Prohibition on Transfers. No Partner shall, voluntarily or
involuntarily, sell, transfer, assign, pledge, hypothecate, convey or otherwise
dispose of (any one of the foregoing being referred to as a "Transfer") any
portion of his interest in the Partnership without the express prior written
approval of the General Partner (if such transferor is other than the General
Partner), except to a Permitted Transferee. Any Partner may make a Transfer of
Units to a Permitted Transferee without the consent or approval of any other
Partner, including the General Partner (subject to the limitation set forth in
Section 5.3), and without offering the same to any other Partner or the
Partnership. The General Partner, however, shall at all times retain sufficient
Units to constitute at least 1% of the aggregate capital accounts of the
Partnership.
Section 5.2. Definition of Permitted Transferee. A "Permitted Transferee"
shall mean any of the following: any sibling of a Partner or of a beneficiary
of a trust which is a Partner; any lineal descendant of a Partner or of a
beneficiary of a trust which is a Partner; any spouse of such lineal descendant;
any child of such spouse if such lineal descendant has elected to treat such
child as a descendant for the purposes of this Agreement; and any
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trust or other entity (and the beneficiary or beneficiaries thereof) for the
primary benefit of any of the foregoing persons; and with respect to Transfers
by a trust which is a Partner, the beneficiary of such trust.
Section 5.3. Status of a Permitted Transferee - Additional Limited
Partners. Upon a Transfer by any Partner to a Permitted Transferee, such
Permitted Transferee shall, if the General Partner shall so agree in his
discretion, become a substituted or additional Limited Partner upon agreeing in
writing to be bound by the terms of this Agreement. If the General Partner
shall not consent to any Permitted Transferee becoming a substituted or
additional Partner, such Permitted Transferee shall have only the rights of an
assignee as provided by Section 19(3) if the Act with respect to the Units so
acquired.
Section 5.4. Transfers in Violation of Section 5.1. Any purported
Transfer in violation of Section 5.1 shall be null and void and of no force and
effect. Any such purported Transfer shall entitle the Partnership to purchase,
on the terms and conditions specified in Article VI of this Agreement, all or
any part of the Units of the Partner purporting to make such a Transfer. The
purchase price shall be determined as of the closing date of a purchase and sale
of such Partner's Units in accordance with Article VI.
Section 5.5. Levy by Creditors. Any levy or other attachment by any
creditor (other than the Partnership or a Permitted Transferee) against any
Partner's interest in the Partnership or the avails or proceeds thereof shall be
deemed a purported Transfer in violation of Section 5.1.
ARTICLE VI
VOLUNTARY PURCHASES AND SALES OF
INTERESTS IN THE PARTNERSHIP
Section 6.1. Partner's Election to Sell. Any Partner, or, upon the death
of a Partner (if, upon such death, the Partnership is not dissolved and
reconstituted pursuant to Section 8.2), his personal representative ("Selling
Partner"), may, by written notice ("Sale Notice") to the Partnership, require
the Partnership to purchase the number of Units, or the dollar value of his
Partnership interest, in either event specified in his Sale Notice (the "Selling
Interest") at the price and on the terms herein specified; provided however,
that the General Partner shall at all times retain sufficient Units to
constitute at least 1% of the aggregate capital accounts of the Partnership; and
provided further that any such sale is subject to the rights of first refusal
set forth in Section 6.2 hereof.
Section 6.2. Rights of First Refusal. Within twenty (20) days of receipt
of a Sale Notice, the Partnership shall give
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written notice ("Option Notice") to all of the other Partners (the "Remaining
Partners") setting forth the Selling Interest to be purchased from the Selling
Partner and the estimated purchase price therefor. If any Partner shall desire
to purchase all or part of the Selling Interest offered for sale in the Sale
Notice, said Partners ("Purchasing Partners") shall give written notice to the
Partnership within thirty (30) days after the date of the Option Notice,
specifying the amount of the Selling Interest which they desire to purchase. In
the event that the Purchasing Partners desire to purchase more than the amount
of Selling Interest offered for sale, the amount of the Selling Interest to be
purchased by each Purchasing Partner shall be allocated pro rata in accordance
with the number of Units owned by each Purchasing Partner. Notwithstanding that
the Selling Partner may be the General Partner, the Purchasing Partner shall not
become a General Partner pursuant to, or resulting from, any purchase of Selling
Interest made hereunder. Any such purchase by a Purchasing Partner shall be in
cash.
Section 6.3. Purchase by the Partnership. Any amount of the Selling
Interest which Partners do not elect to purchase pursuant to Section 6.2 shall
be purchased by the Partnership.
Section 6.4. Terms of Purchase.
(a) The closing date for a purchase and sale of the Selling Interest
under this Article VI, whether by the Partnership or Purchasing Partners,
shall be held on the sixtieth (60th) day following the date of service of
the Sale Notice.
(b) The purchase price to be paid by any Purchasing Partner for any
purchase pursuant to Section 6.2 shall be payable in full on the closing
date.
(c) The purchase price to be paid by the Partnership for any purchase
pursuant to Section 6.3 shall be payable in forty (40) equal quarterly
installments, commencing the first day of the month following the closing
date, and shall bear interest on the unpaid portion thereof at the rate of
5% per annum, also payable quarterly commencing the first day of the month
following the closing date.
Section 6.5. Funding by Partnership. The Partnership shall have the right
to elect to fund any purchase under this Article VI in whole or in part in cash
or Partnership property. Any such Partnership property determined by the
Partnership to be used for payment shall be equivalent in fair market value,
determined as of the date of payment, to the cash payment which would otherwise
be required to be made on such date by the Partnership.
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Section 6.6. Settling of Selling Partner's Loans. If any Selling Partner
is indebted to the Partnership for any loans made by the Partnership to him, and
the sale of any Selling Interest would result in either a complete termination
of such Selling Partner's interest in the Partnership, or would result in
aggregate loans to the Selling Partner being in excess of the loan value of such
Partner's interest in the Partnership as from time to time established by the
General Partner, then the following shall apply:
(a) The aggregate purchase price payable by the Partnership, if any, to
the Selling Partner, shall be reduced by an amount sufficient to repay the
Selling Partner's loans either entirely (in the case of a complete
termination of interest in the Partnership) or by an amount sufficient to
reduce the amount of the Selling Partner's loans to the amount of such loan
value; and upon any such purchase at such reduced purchase price, the amount
of such reduction shall be applied against the Selling Partner's outstanding
loans, first to any outstanding interest, then to principal.
(b) If the action of the Partnership under subsection 6.6(a) is
insufficient either to repay the Selling Partner's loans in full (in the
case of a complete termination of interest in the Partnership) or to reduce
the Selling Partner's loans to the amount of such loan value, the
Partnership may require the Selling Partner to pay over to the Partnership
for application against the Selling Partner's loans an amount equal to the
amount of any such insufficiency.
(c) The General Partner may take such action other than or different from
that specified in subsections (a) and (b) above with respect to loans of a
Selling Partner as he shall deem proper.
Section 6.7. Purchase Price. For purposes of a purchase and sale under
this Article VI, each Selling Interest of a Selling Partner shall have a
purchase price equal to such amount as would be distributed thereon under
Section 3.10 if the Partnership were liquidated on the Sale Valuation Date.
Section 6.8. Absence of Liability of Partners. In the case of a purchase
of a Selling Interest by the Partnership, recourse on the Partnership's
obligation to pay the purchase price may be had only out of and against
Partnership property, and no Partner shall be personally liable therefor, nor
shall recourse thereon be had out of or against the separate property of any
Partner.
Section 6.9. Construction of "Purchase" and Other Terms. The "purchase"
of Units by the Partnership and the "payment" by the Partnership of a "purchase
price" pursuant to this Article VI shall be construed to mean a distribution by
the Partnership to a Limited
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Partner in exchange for all or part, as the case may be, of his Partnership
interest. The Selling Interest so "purchased" shall not be an item of property
in the hands of the Partnership. The "payment" by the Partnership of the
"purchase price" in the form of a transfer of property shall be construed as a
distribution of property to a Limited Partner and not as a disposition of
property in satisfaction of a money obligation. The terms "purchase", "sale",
"payment", "purchase price" and the like, when used in reference to a
transaction under this Agreement between the Partnership and a Partner, are used
solely for convenience and ease of description. Such terms shall not be
construed to alter the nature of the transaction as being between the
Partnership and a Partner acting in his capacity as a Partner.
Section 6.10. Valuations. The General Partner shall, at the request of
any Partner, but no more often than semiannually, prepare and distribute to all
Partners, a valuation of the Partnership setting forth the fair market value
thereof.
ARTICLE VII
ADDITIONAL CONTRIBUTIONS
Section 7.1. At the discretion of the General Partner, the existing
Partners shall be permitted, but shall have no obliga-tion, to make further
contributions to the Partnership. Such Partners shall be allocated such newly
issued Units by reason thereof as may be determined by the General Partner, such
Units being equivalent in fair market value to the fair market value of the
property so contributed. If the Units so allocated ("New Units") are equivalent
in fair market value to the fair market value on the date hereof of the then
existing Units the New Units shall rank on a par with the then existing Units.
If the New Units are not equivalent in fair market value to the fair market
value on the date hereof of Units of a like class, appropriate changes shall be
made in Sections 3.6, 3.9 and 3.10 of this Agreement to account for such
disparity in fair market values.
ARTICLE VIII
TERM OF THE PARTNERSHIP: WITHDRAWAL OF PARTNERS
Section 8.1. Term. The business and affairs of the Partnership shall be
continued in accordance with this Agreement and shall not cease to be conducted
until the date which is the earlier of:
(a) The thirtieth anniversary of the date of this Agreement.
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(b) The date on which the Partners having two-thirds or more of the
aggregate capital accounts of all Partners shall elect to terminate the
Partnership.
(c) The Withdrawal (as defined in Section 8.2) of any General Partner.
(d) The sale or other disposition of substantially all of the property
belonging to the Partnership; provided, however, that, if such sale involves
the receipt by the Partnership of purchase money obligations, or of a lease
under a so-called "sale-leaseback" transaction, the Partnership shall not
dissolve or terminate prior to collection of such purchase money obligations
or termination of such lease, unless and until the General Partners elects
to so terminate the Partnership at any time after such sale.
Section 8.2. Withdrawal of Partners.
(a) General Partner. The retirement, death, disability, incompetency,
bankruptcy or dissolution of a General Partner shall be deemed a withdrawal (a
"Withdrawal") by such General Partner from his position as General Partner. Upon
any Withdrawal by the sole General Partner, the Partnership shall dissolve in
accordance with the provisions of the Act; provided, however, that the parties
hereto hereby agree that upon the Withdrawal of Melvin L. Hecktman as General
Partner, the business of the Partnership shall be continued and the Partnership
shall be reconstituted and that Judith Hecktman shall become the new General
Partner. Upon the refusal or inability of Judith Hecktman to serve, or the
Withdrawal of Judith Hecktman, as General Partner, then the Partnership shall
dissolve in accordance with the provisions of the Act; provided, however, that
the business of the Partnership may be continued and the Partnership shall be
reconstituted upon the election of Limited Partners holding the majority of
Units held by all Limited Partners. If the Partnership is continued in
accordance with the preceding sentence, the Limited Partners holding the
majority of the interest in profits and losses held by all Limited Partners
shall designate a new General Partner or General Partners. The legal
representative or successor of a retired, deceased, disabled, incompetent or
dissolved General Partner shall continue in the Partnership as an assignee under
Section 19(3) of the Act, unless such legal representative or successor advises
the Partnership that he desires to become a Limited Partner and the remaining or
succeeding General Partner agrees that such legal representative or successor
may become an additional Limited Partner. The provisions of this Section 8.2(a)
shall be set forth in the Certificate of Limited Partnership.
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(b) Limited Partners. The retirement, death, disability,
incompetency, bankruptcy or dissolution (including, but not by way of
limitation, distributions by a trust to its beneficiaries in accordance with
the provisions of such trust) of a Limited Partner shall not dissolve the
Partnership and the legal representative or successor of such Limited
Partner shall continue in the Partnership as an assignee under Section 19(3)
of the Act, unless such legal representative or successor advises the
Partnership that he desires to become a Limited Partner and the General
Partner agrees that such legal representative or successor may become a
substituted Limited Partner. Anything in this Section 8.2(b) to the
contrary notwithstanding, beneficiaries receiving distributions of
Partnership interests from their trusts pursuant to their terms shall become
Limited Partners, as provided in Section 2.3.
Section 8.3. Liquidation. On termination of the Partnership, the General
Partner shall proceed to wind up the affairs of the Partnership, pay or provide
for all of the liabilities of the Partnership, and distribute the remaining
assets of the Partnership to the Partners in accordance with their respective
interests as herein provided. To the extent possible, loans receivable from
Partners shall be distributed to the Partners owing the same by matching the
same against loans payable by the Partnership.
ARTICLE IX
FINANCIAL STATEMENTS, ETC.
Section 9.1. Fiscal Year. The fiscal year of the Partnership shall end on
December 31 of each year unless otherwise determined by the General Partner.
Section 9.2. Financial Statements. The General Partner shall cause to be
prepared and distributed, not less than once each fiscal year, a financial
statement of the Partnership consisting of a balance sheet, income statement and
schedules showing the loan account of each Partner, cash distributions made to
the Partners, purchase price of Partnership Units as of the last day of the
fiscal year, computed as herein provided, and such other items as the General
Partner may select. Such financial statements may be audited or unaudited.
Section 9.3. Books and Records. The Partnership shall keep books and
records at its place of business, setting forth a true and accurate account of
all of the business transactions arising out of the conduct of the Partnership.
All Partners shall have at all times access to and the right to inspect the
Partnership's books and records.
Section 9.4. Tax Returns. The Partnership shall prepare and file all
necessary or appropriate tax returns.
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Section 9.5. Accounting--Section 754 Election. The General Partner may
make or decline to make the adjustments provided in Section 754 of the Internal
Revenue Code of 1954, as amended ("Code"). If such election is in effect,
accounting adjustments corresponding to the basis adjustments prescribed by
sections 734 and 743 of the Code may be made by the General Partner in
consultation with the Accountants.
Section 9.6. Bank Accounts. Funds of the Partnership shall be used only
for Partnership purposes and shall be deposited in such accounts in banks or
other financial institutions as may be established from time to time by the
General Partner. Withdrawals shall be made by the General Partner pursuant to
his duties hereunder.
ARTICLE X
CERTAIN DEFINITIONS
The following terms shall have the following meanings herein:
Section 10.1. Partnership shall mean the limited partnership formed
pursuant to this Agreement.
Section 10.2. Partners shall mean the signatories hereto and any persons
hereafter admitted to the Partnership pursuant to the provisions of this
Agreement.
Section 10.3. Partnership Net Assets as of any date shall mean the sum of
Partnership assets less Partnership liabilities as of such date; securities
(including the Shares) and other property forming part of the Partnership assets
as of such date shall be valued at the market value thereof.
Section 10.4. Market Value
(i) of securities as of any date shall mean:
(a) If such securities are traded over the counter, the lowest closing
bid price on such date.
(b) If such securities are traded on a recognized securities exchange,
the closing price on such date.
(c) If such securities are traded neither over the counter nor on a
recognized securities exchange, the value shall be determined by the General
Partner.
(ii) of any other assets shall be as determined by the General
Partner.
-15-
<PAGE>
The fair market value of securities or other assets shall be deemed to be
their "Market Value" as determined under this Section 10.4.
Section 10.5. Sale Valuation Date shall mean the date of closing of a
purchase and sale of Units under Article VI.
Section 10.6. Shares shall mean (i) the shares of Common Stock of United,
par value $0.10 per share, contributed to the Partnership by the Partners, and
(ii) any other shares or securities received with respect thereto or in exchange
therefor. Wherever in the Agreement reference is made to, or allocations or
distributions are required to be made with respect to, specific numbers of
Shares, such numbers shall be equitably adjusted to take into account any stock
split, stock dividend, combination, reverse stock split or other change in the
outstanding capital stock of United or any successor issuer.
Section 10.7. "Accountant" means the certified public accountants, if any,
regularly engaged by the Partnership, or as may, from time to time, be selected
by the General Partner.
Section 10.8. "Person" means, in addition to natural persons, where
appropriate, corporations, partnerships, trusts, estates, associations,
governments and governmental units and agencies.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1. Certain Warranties.
(a) Each Partner, by execution and delivery of this Agreement,
represents, warrants and agrees with each other Partner that (i) he is
acquiring his Partnership interest solely for his own account for the
purpose of investment and not for or with a view to distribution hereof;
(ii) he has had free access to all documents, information, books and records
as he has deemed necessary to apprise himself of the matters with which this
Agreement is concerned; and (iii) he understands that the Partnership
interests have not been registered under the Securities Act of 1933, as
amended, or under the blue sky laws of any state, nor will such interests be
registered.
(b) The parties recognize that the Units are not traded over-the-counter
or on a national securities exchange or any other market. Notwithstanding
the uncertainty inherent in valuing securities for which no market exists,
the parties intend and believe that the respective fair market values, at
the time of contribution, of the Shares contributed to the Partnership and
of the Units issued in exchange therefor, are equal. In order to assure
such equality, it is agreed that
-16-
<PAGE>
any determination as to such relative values as of such time made by the
United States Securities and Exchange Commission, the Illinois Securities
Commissioner, or any other agency or instrumentality of the United States or
of any state shall be binding on all parties hereto. In the event that any
such governmental agency or instrumentality shall determine that the
respective values of the Shares contributed to the Partnership and of each
Unit issued in exchange therefor are not equal, the number of Units issued
with respect to each Share shall be increased or decreased nunc pro tunc as
of the date of contribution to a number (including fractional numbers) which
shall cause the fair market value of the number of Units issued with respect
to each Share to be equal to the value of such Shares as of the date of
contribution. Such increase or decrease shall require redeterminations of
rights and duties as to allocations and distributions made during the period
from and after the date of this Agreement to the time such increase or
decrease is determined.
Section 11.2. Indemnity. The Partnership hereby agrees to indemnify and
hold harmless each person who is or may hereafter serve as General Partner from
any and all claims, damages, liabilities, losses and expenses (including
attorney's fees) arising out of his acts as General Partner, except acts or
omissions constituting willful misconduct or gross negligence.
Section 11.3. Severability. If any portion of this Agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect the remaining valid and enforceable portions of this Agreement which
shall continue in full force and effect.
Section 11.4. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the heirs, personal representatives,
successors and assigns of the parties hereto, subject to all of the terms and
conditions hereof. This Section 11.4 shall not be construed to permit transfers
of interests not otherwise permitted hereunder.
Section 11.5. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall constitute one Agreement. The signature pages
of such counterparts may be detached therefrom after execution of this Agreement
and attached to one counterpart.
Section 11.6. Filings, etc. Any filing or recordation required to be made
under applicable law with any governmental agency or official on behalf of or
with respect to the Partnership may be signed by the General Partner. A
Certificate of Limited Partnership within the meaning of the Act will be
prepared following the execution and delivery of this Agreement. The initial
General Partner will cause such Certificate to be filed and
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<PAGE>
recorded in the office of the Recorder of Deeds of Cook County, Illinois, and,
to the extent required by local law, in the appropriate place in each state in
which the Partnership may hereafter establish a place of business. The General
Partners shall also cause to be filed, recorded and published, such statements,
notices, certificates, or other instruments as may be required by any provision
of any applicable law which governs the formation of the Partnership or the
conduct of its business from time to time.
Section 11.7. Illinois Personal Property Tax Replacement Income Tax. Each
Partner shall be responsible to the Partnership for that portion of any Illinois
Personal Property Tax Replacement Income Tax ("Replacement Tax") imposed upon
the Partnership which is attributable to the net profit of the Partnership
allocable to such Partner, as determined in accordance herewith. In addition, a
special distribution, to be charged against capital accounts, shall be made,
within a reasonable time after the close of the Partnership's taxable year, to
those Partners who, in their separate capacities, are subject to such tax, and
shall be made in the respective amounts of the Replacement Tax not imposed on
the Partnership by reason of such Partner's membership in the Partnership.
Section 11.8. Notices. All notices permitted or required hereunder shall
be in writing and shall be addressed to the Partners at their respective
addresses appearing on the Partnership's books. Notices sent by mail shall be
deemed to have been given three (3) days after deposit in the U.S. mails.
(Notices hand-delivered shall be deemed to have been served when so delivered.)
Section 11.9. Gender and Number. Despite the gender and number of any
word used herein, such word shall import the masculine, feminine, neuter,
singular and plural, as may be reasonably inferred from the context.
Section 11.10. Power of Attorney. Each of the undersigned and each person
who becomes a Partner does hereby constitute and appoint the General Partner,
under and pursuant to this Agreement as it may be amended from time to time,
with full power of substitution, to be his true and lawful attorney in fact, at
any time and from time to time, to make, execute, sign, acknowledge, deliver,
file, record, amend or cancel any and all instruments, documents and
certificates, including without limitation, certificates of limited partnership
and certificates for conducting business under an assumed name and such other
instruments as may be required by or under law in connection with the formation,
existence, operation or termination of, or the business to be conducted by, the
Partnership. The parties agree that the foregoing power of attorney is coupled
with an interest and shall be irrevocable during the term of the Partnership and
shall
-18-
<PAGE>
continue notwithstanding the death, dissolution or incompetence of any party
giving such power of attorney.
Section 11.11. Amendments. No change, amendment or modification of this
Agreement shall be valid unless the same shall be in writing and signed by all
parties. No waiver o(Pounds) any provision hereof shall be valid unless in
writing and signed by the party to be charged.
Section 11.12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, including the
Act.
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands as of the date first set forth above.
- ------------------------------ ---------------------------------
Melvin L. Hecktman Judith Hecktman
- ------------------------------ ---------------------------------
Melvin L. Hecktman, as Melvin L. Hecktman, as
custodian for Brian J. Hecktman custodian for Julie B. Hecktman
- ------------------------------ ---------------------------------
Melvin L. Hecktman, as Jerold A. Hecktman, as
custodian for Sherri A. Hecktman co-trustee of the trusts listed
on Exhibit A as Nos. 1, 3, 5, 6,
7, 8, 10, 12, 13, 14, 15, 17,
19, 20 and 21
- ------------------------------ ---------------------------------
Ruth L. Hecktman, as co-trustee Arthur W. Brown, Jr., as co-
of the trusts listed on Exhibit trustee of the trusts listed on
A as Nos. 1, 2, 4, 5, 6, 8, 9, Exhibit A as Nos. 2, 3, 4, 7,
11, 12, 13, 15, 16, 18, 19 and 9, 10, 11, 14, 16, 17, 18 and 21
20
-19-
<PAGE>
AMENDMENT NO. 1 TO AGREEMENT OF LIMITED PARTNERSHIP FOR
MELVIN L. HECKTMAN FAMILY INVESTMENT PARTNERSHIP
This Amendment No. 1 dated as of December 31, 1983 ("Amendment") to
Agreement of Limited Partnership dated September 19, 1983 ("Original Agreement")
is entered into by and among the parties hereto.
RECITALS
The parties entered into the Original Agreement and desire to amend the
Original Agreement as herein specified.
All terms defined in the Original Agreement shall have the same meanings
below as therein.
NOW, THEREFORE, for good and valuable consideration the parties agree as
follows:
1. Amendment to Article III
Article III is hereby amended as follows:
a) The following is inserted at the end of Section 3.4:
In the event that the Partnership shall sell Units in HW Associates to
HW Associates for cash and to fund such payment HW Associates shall
sell Shares originally contributed by any Partners to the Partnership
and thereafter to HW Associates, the gain and loss which is allocated
to the Partnership on the sale of such Shares by HW Associates shall be
allocated among the Partners as though such Shares had been sold by the
Partnership and the gain or loss allocated in accordance with Section
704(c)(2) of the Internal Revenue Code of 1954 as amended.
b) There shall be inserted at the end of Article III the following new
Section 3.12:
The General Partner may, upon the advice of the Accountants, make
different allocations of ordinary income and loss and capital gain and
loss from that
<PAGE>
provided for above so as to give substantial economic effect to any
particular transaction.
2. Amendment to Article IX
Article IX is hereby amended by adding at the end of Section 9.2 the
following:
Such financial statement shall be prepared on such basis as the General
Partner shall deem appropriate.
IN WITNESS WHEREOF, the undersigned have heretofore set their hands as of
the date first written above.
- ------------------------------- -----------------------------------
Melvin L. Hecktman Judith Hecktman
- ------------------------------- -----------------------------------
Melvin L. Hecktman, Jerold A. Hecktman, as
as custodian for co-trustee of the trusts
Brian J. Hecktman listed on Exhibit A as Nos. 1,
3, 5, 6, 7, 8, 10, 12, 13, 14,
15, 17, 19, 20 and 21
- ------------------------------- -----------------------------------
Melvin L. Hecktman, Arthur W. Brown, Jr., as
as custodian for co-trustee of the trusts listed
Julie B. Hecktman on Exhibit A as Nos. 2, 3, 4, 7,
9, 10, 11, 14, 16, 17, 18 and 21
- -------------------------------
Melvin L. Hecktman,
as custodian for
Sherri A. Hecktman
- -------------------------------
Ruth L. Hecktman,
as co-trustee of the trusts
listed on Exhibit A as
Nos. 1, 2, 4, 5, 6, 8, 9,
11, 12, 13, 15, 16, 18,
19 and 20
2
<PAGE>
This instrument prepared by and
after recording return to:
Arthur W. Brown, Jr., Esquire
Altheimer & Gray
333 W. Wacker Drive, Suite 2600
Chicago, Illinois 60606
AMENDMENT #1 TO AGREEMENT OF LIMITED PARTNERSHIP
AND AMENDMENT #2 TO CERTIFICATE OF LIMITED PARTNERSHIP
FOR MELVIN L. HECKTMAN FAMILY INVESTMENT PARTNERSHIP
AN ILLINOIS LIMITED PARTNERSHIP
This Amendment ("Amendment") is made as of the 14th day of November, 1985
by and among the parties whose signatures appear at the end of this Amendment
(such parties, together with such other parties who become parties hereto after
the date hereof in accordance with the terms hereof are herein referred to
collectively as "Partners" and individually as "Partner"; additionally, the
party whose signature appears under the caption "General Partner" is herein
sometimes referred to as "General Partner" and the parties whose signatures
appear under the caption "Limited Partners" are herein sometimes referred to
collectively as "Limited Partners").
RECITALS:
The Partners formed an Illinois limited partnership known as Melvin L.
Hecktman Family Investment Partnership (the "Partnership") pursuant to that
Agreement of Limited Partnership for Melvin L. Hecktman Family Investment
Partnership dated September 19, 1983 ("Agreement") and that certain Certificate
of Limited Partnership for Melvin L. Hecktman Family Investment Partnership, as
amended by Amendment #1 to Certificate of Limited Partnership, both dated as of
September 19, 1983 (such Certificate, as amended, being herein called the
"Certificate"). Except as otherwise specifically defined herein, all
capitalized terms used herein shall have the meanings set forth in the
Agreement.
The Partnership is a partner in HW Associates, an Illinois general
partnership ("HW") pursuant to the Agreement of Partnership for HW Associates,
dated as of September 19, 1983, as amended (the "Agreement"). Pursuant to the
Agreement, the Partnership had contributed all of its Shares to HW as a capital
contribution. A portion of such Shares has, as of November 13, 1985, been
distributed to the Partnership by HW in partial liquidation thereof.
The parties hereto desire to amend the Agreement and the Certificate to
provide for the distribution in partial liquidation of the Partnership of a
portion of such Shares received from HW to certain of the Partners, for the sale
by the Partnership of the remaining Shares, and for appropriate allocation of
gain and reallocation of Units among the Partners in connection therewith, all
in accordance to the terms and conditions set forth below.
<PAGE>
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. The Partnership shall distribute to the following Partners (the
"Selling Partners") listed below the number of Shares set forth opposite each
such Selling Partner's name:
Selling Partners Number of Shares Distributed
---------------- ----------------------------
Melvin L. Hecktman 27,458
Judith Hecktman 5,094
2. Each Share so distributed shall be deemed to have a fair
market value as of the date hereof of $21.75 per Share. In
connection with such distribution, the number of Units (as defined
in the Agreement) allocated to each such Partner shall be reduced
by an amount equal to 1 Unit for every $1,000 of Shares
distributed. Accordingly, from and as of the date hereof, the
number of Units deemed to be allocated to each of the Selling
Partners to whom Shares are being distributed are as follows:
Selling Partners Units
---------------- -----
Melvin L. Hecktman 3,445.01747
Judith Hecktman 677.40809
3. The Certificate is hereby amended by deleting Exhibit A thereto in
its entirety, and substituting in lieu thereof the Exhibit A attached hereto.
4. The Agreement is hereby amended by deleting Exhibit B thereto in
its entirety, and substituting in lieu thereof the Exhibit B attached hereto.
5. The General Partner has determined that the Partnership shall sell
the remaining 59,964 Shares held by the Partnership in connection with a
contemplated public offering thereof. Subject to appropriate adjustment and
allocation of gain in respect of "pre-contribution variation", as defined in,
and pursuant to, Section 3.5 of the Agreement, with respect to any of the Shares
sold by the Partnership, gain from such sale shall be allocated to all Partners
who are not Selling Partners ("Non-Selling Partners") pro rata in accordance
with the percentage each such Non-Selling Partner's Units comprises of the total
number of Units allocated to Non-Selling Partners. The date and price of such
sale shall be determined by the General Partner, and the General Partner may
determine not to proceed with any such sale if, in the General Partner's
judgment, such sale would not be in the best interests of the Partnership.
2
<PAGE>
6. All ordinary income of the Partnership earned on or after November
14, 1985 shall be allocated among the Partners pro rata in accordance with their
Units as such Units have been reallocated in accordance with this Amendment.
7. This Amendment shall be effective on the date, and as of the time,
this Amendment is filed in the office of the Recorder of Deeds in the county in
which the principal office of the Partnership is located.
8. It is hereby agreed by and among the Partners that this instrument
shall be deemed and treated for all purposes and in all manner and respects as
an Amendment to the Agreement and to the Certificate. It is further agreed by
and among the Partners that, except as amended hereby, the Agreement and the
Certificate are in all respects ratified and confirmed and the terms and
provisions thereof shall remain in full force and effect.
9. This Amendment shall be binding upon the Partners and their
respective heirs, legal representatives, successors, and, to the extent
permitted in the Agreement, assigns.
10. This instrument may be executed in multiple counterparts, each of
which shall constitute an original and all of which taken together shall
constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this instrument
and multiple counterparts as of the date first set forth above.
GENERAL PARTNER: LIMITED PARTNER:
--------------- ---------------
- ----------------------------------- --------------------------------
Melvin L. Hecktman Judith Hecktman
3
<PAGE>
-----------------------------------
Melvin L. Hecktman, as
custodian for Brian J. Hecktman
-----------------------------------
Melvin L. Hecktman, as
custodian for Julie B. Hecktman
-----------------------------------
Melvin L. Hecktman, as
custodian for Sherri A. Hecktman
-----------------------------------
Jerold A. Hecktman, as
co-trustee of the trusts listed on
Exhibit A as Nos. 1, 3, 5, 6, 7, 8,
10, 12, 13, 14, 15, 17, 19, 20 and
21
-----------------------------------
Ruth L. Hecktman, as
co-trustee of the trusts listed on
Exhibit A as Nos. 1, 2, 4, 5, 6, 8,
9, 11, 12, 13, 15, 16, 18, 19 and
20
-----------------------------------
Arthur W. Brown, Jr., as
co-trustee of the trusts listed on
Exhibit A as Nos. 2, 3, 4, 7, 9, 10,
11, 14, 16, 17, 18 and 21
4
<PAGE>
AMENDMENT NO. 3 TO
AGREEMENT OF LIMITED PARTNERSHIP
OF
MELVIN L. HECKTMAN FAMILY INVESTMENT PARTNERSHIP
------------------------------------------------
THIS AMENDMENT ("Amendment") is made as of the 1st day of July, 1989
by and among the parties whose signatures appear at the end of this Amendment
(such parties are herein referred to collectively as "Partners" and individually
as a "Partner").
RECITALS:
--------
A. The Partners formed an Illinois limited partnership known as
Melvin L. Hecktman Family Investment Partnership (the "Partnership") pursuant to
that certain Agreement of Limited Partnership for Melvin L. Hecktman Family
Investment Partnership dated September 19, 1983. Said Agreement of Limited
Partnership was amended by Amendment No. 1 to Agreement of Limited Partnership
dated as of December 31, 1983. Said Agreement of Limited Partnership was again
amended by that certain Amendment No. 2 to Agreement of Limited Partnership
dated as of November 14, 1985 (said Agreement of Limited Partnership, as so
amended, being herein referred to as the "Agreement"). Except as otherwise
specifically defined herein, all capitalized terms used herein shall have the
meanings set forth in the Agreement.
B. The parties hereto desire to amend the Agreement to update
certain information contained in the Agreement.
AGREEMENT:
---------
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. The first sentence of Section 2.3 of the Agreement is hereby
amended and restated to read as follows:
"The Limited Partners shah be Judith Hecktman (until appointed General
Partner pursuant to Section 8.2 hereof), Brian J. Hecktman, Julie B.
Hecktman, each of the trusts described in Exhibit A hereto, and, at
such time as a Transfer (as defined in Section 5.1) shall be made by
any of such trusts to the beneficiaries thereof pursuant to the
provisions of their respective trust agreements, the beneficiaries of
such trusts."
2. The Agreement is hereby amended by deleting Exhibit A thereto in
its entirety and substituting in lieu thereof the Exhibit A attached hereto.
5
<PAGE>
3. Section 3.3 of the Agreement is hereby amended by adding the
following sentence at the end of said Section:
"As of July 1, 1989, each Partner's respective interest in the Shares
owned by the Partnership and in the Partnership is as set forth
opposite his name on Exhibit C hereto."
4. The Agreement is hereby amended by adding thereto Exhibit C in
the form of Exhibit C attached hereto.
5. Except as amended hereby, the Agreement is, in all respects,
ratified and confirmed, and the terms and provisions thereof shall remain in
full force and effect.
6. This Amendment shall be binding upon the Partners and their
respective heirs, legal representatives, successors and, to the extent permitted
in the Agreement, assigns.
7. This Amendment may be executed in multiple counterparts, each of
which shall constitute an original, and all of which taken together shall
constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
General Partner: Limited Partners:
--------------- ----------------
- ----------------------------------- -----------------------------------
Melvin L. Hecktman Judith Hecktman
-----------------------------------
Brian J. Hecktman
-----------------------------------
Julie B. Hecktman
-----------------------------------
Melvin L. Hecktman, as co-
trustee of the trust listed on
Exhibit A as No. 1
-----------------------------------
6
<PAGE>
Sherri Sheftel, as co-trustee of the
trust listed on Exhibit A as No. 1
----------------------------------------
Ruth L. Hecktman, as co-trustee of the
trusts listed on Exhibit A as Nos. 2, 3,
5-7, 9, 10, 12-14, 16, 17 and 19-21
----------------------------------------
Jerold A. Hecktman, as co-trustee of
the trusts listed on Exhibit A as Nos. 2,
4, 6-9, 11, 13-16, 18 and 20-22
----------------------------------------
Arthur W. Brown, Jr., as co-trustee of
the trusts listed on Exhibit A as Nos.
3-5, 8, 10-12, 15, 17-19 and 22
7
<PAGE>
EXHIBIT C
---------
AGREEMENT OF PARTNERSHIP
FOR MLH INVESTMENT PARTNERSHIP
THIS AGREEMENT OF PARTNERSHIP for MLH Investment Partnership, dated as
of September 19, 1983 ("Agreement"), by and between Melvin L. Hecktman, Judith
Hecktman, Melvin L. Hecktman as custodian for Brian J. Hecktman, Julie B.
Hecktman and Sherri A. Hecktman under the Uniform Gifts to Minors Act, and the
trustees of the trusts listed on the signature page attached hereto (the
"Trustees"), (herein collectively called the "Partners" and individually, a
"Partner").
W I T N E S S E T H :
---------------------
WHEREAS, each of the partners owns certain shares of the outstanding
common stock, par value $0.10 per share of United Stationers Inc., a Delaware
corporation, ("United"); and
WHEREAS, the Partners are each related by blood or marriage, or are
the trustees of trusts for the benefit of persons who are so related, and
together constitute, with such beneficiaries, the immediate Melvin L. Hecktman
family; and
WHEREAS, all the Partners desire to form a partnership and to
contribute to the Partnership certain of their shares of United Common Stock
(the "Shares"), and certain of the Partners desire also to contribute to the
Partnership portions of their partnership interests in 1701 Partnership, an
Illinois general partnership (the "1701 Interests"), all in order to, among
other things:
(i) protect certain Partners from the consequences of a decline in
value of the Shares; and
(ii) establish centralized control over the Shares and the 1701
Interests and other possible investments.
NOW THEREFORE, in consideration of the promises and agreements herein
contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto promise and
agree as follows:
ARTICLE I
NAME, ETC.
Section 1.1. Name. The name of the Partnership shall be MLH Investment
Partnership or such other name as the Managing Partner may from time to time
select.
<PAGE>
Section 1.2. Purposes. The purposes of the Partnership are to:
(i) acquire, own, hold, purchase, sell, invest and reinvest in the
Shares, the 1701 Interests and other shares of stock, notes, bonds,
debentures, interests in real estate and other securities and investment
assets;
(ii) insure centralized control of the Shares and the 1701 Interests,
including the voting thereof;
(iii) permit the Partners to borrow from the Partnership from time to
time;
(iv) protect certain Partners from the consequences of a decline in
value of the Shares;
(v) assure to certain Partners a stable source of income; and
(vi) do all of the acts and things permitted or required by the terms
of this Agreement or reasonably necessary or incident to the foregoing
purposes.
Section 1.3. Offices. The offices of the Partnership shall be at such
place or places as the Managing Partner may from time to time determine.
ARTICLE II
THE PARTNERS
Section 2.1. Managing Partner; In General. Except as otherwise provided
herein, the business and affairs of the Partnership shall be conducted by a
Partner who shall be deemed the Managing Partner. Until his resignation, death,
or the declaration of his disability by a court of appropriate jurisdiction,
Melvin L. Hecktman shall be the sole Managing Partner.
Section 2.2. Managing Partner; Vacancies and Elections.
(a) A vacancy in the office of Managing Partner shall occur upon the
resignation of a Managing Partner, his death, or the declaration of his
disability by a court of appropriate jurisdiction (any of such events being for
convenience referred to as a "Withdrawal").
(b) A vacancy in the office of Managing Partner shall be filled by a
Partner designated in writing by the withdrawing Managing Partner. Such
Managing Partner may, from time to time, deposit with the Partnership a signed
and dated writing designating his successor or successors as one or more
Managing
-2-
<PAGE>
Partners. Such writing may also designate alternate successors in the event any
successor refuses or is unable to serve as a successor Managing Partner. If
more than one such writing shall be deposited by any Managing Partner, the
latest dated writing shall control. In the absence of any such designation, the
Partners shall elect a successor Managing Partner. Such elected successor shall
be a Partner and shall have been elected by Partners holding more than fifty
percent (50%) of all outstanding "Units" (as defined in Section 3.2) (for
purposes of such election, A Units and B Units shall be deemed equivalent).
Section 2.3. Duties and Powers of the Managing Partner.
(a) The Managing Partner shall:
(i) manage the affairs of the Partnership;
(ii) determine the terms of Partnership borrowings and loans
to Partners; and
(iii) use his best efforts to carry out the terms of this
Agreement.
(b) The Managing Partner may:
(i) purchase, sell the Shares, the 1701 Interests and other
shares of stock, notes, bonds, debentures, interests in real estate
and other securities and investment assets and invest funds held on
hand for the benefit of the Partnership; borrow upon the credit of the
Partnership; and pledge all or any part of the Partnership assets to
secure such borrowings;
(ii) vary, modify, suspend or waive any of the terms or
provisions of Sections 6.4, 6.5, 6.6 and 6.7 either generally or with
respect to any particular Partner or any particular transaction;
(iii) increase the amount of any Partner's loan account;
(iv) make distributions in partial liquidation to the
Partners, but such distributions shall be uniform with respect to each
class of Units;
(v) pay reasonable compensation to the Managing Partner
including, but not by way of limitation, fees and reimbursement for
expenses;
(vi) invest Partnership funds;
-3-
<PAGE>
(vii) vote the Shares, the 1701 Interests or any securities
having voting rights which may be at any time owned by the
Partnership;
(viii) exercise such other rights and powers as are herein
granted as may be necessary or appropriate to attain the ends and
purposes of this Agreement, including the hiring of agents,
accountants and attorneys; and
(ix) establish and administer reasonable rules and procedures
for the calling and conduct of meetings of Partners, for the sending
of notices and other communications, and for the general
administration of the internal and external affairs of the
Partnership.
(c) Without limiting the generality of the foregoing (specifically
including, but not by way of limitation, clause (vii) above), the Managing
Partner is hereby specifically authorized to enter the Partnership into
partnerships or agreements with other entities owning or controlling other
Shares or partnership interests in 1701 Partnership for the purpose of (i)
governing the disposition and voting of the Shares, (ii) controlling United with
such other entities, (iii) governing the disposition and voting of partnership
interests in 1701 Partnership, (iv) controlling 1701 Partnership with such other
entities, (v) investing in any opportunity which the Partnership would have the
power to invest in directly, and (vi) participating in such other activities as
the Managing Partner may, from time to time, deem to be in the best interests of
the Partnership.
Section 2.4. Collective Action by Partners. The Partners, acting
collectively, may take any action on behalf of the Partnership, whether or not
the Managing Partner may take such action, and this Agreement shall be construed
accordingly. The Managing Partner shall be subject to the direction of the
Partners, notwithstanding that this Agreement may otherwise subject certain
matters to the determination of the Managing Partner. The action of the
Partners shall be determined by the vote of Partners possessing two-thirds (2/3)
or more of all the Units (A Units and B Units being deemed equivalent for
purposes of this Section 2.4) of all Partners (including the Managing Partner).
No Partner acting as such (except the Managing Partner acting as such in
accordance herewith) shall individually have authority to bind the Partnership.
Section 2.5. Relationship Between the Partners and the Partnership. The
Partners may engage in or invest in such businesses or activities as they see
fit, without regard to whether such businesses or activities are competitive
with the Partnership. The Partners shall not be required to devote full
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time to the business and affairs of the Partnership. No Partner shall be
required to submit business or investment opportunities to the Partnership. The
various Partners and the Partnership, respectively, may engage in any
transactions with each other as they see fit, as if the Partners were not
partners of the Partnership. The fiduciary duties of the various Partners to
the Partnership and to the Partners shall be determined by taking into account
the principles of this Section 2.5, and, in any event (and not by way of
limitation where good faith is present), the acts of the various Partners shall
be sustained if they are objectively fair. This Section 2.5 shall apply as well
to the Managing Partner as to other Partners.
Section 2.6. Fiduciaries. Where trusts, estates, or other such entities
are treated as Partners or other holders of Partnership interests, the trustees,
executors, and other fiduciaries thereof as such shall not in their personal
capacities be treated as Partners or other holders of Partnership interests or
as persons having rights and duties thereunder, but such Partner status and such
Partnership interests, rights and duties shall be treated as appertaining to the
fiduciary estate.
Section 2.7. Reimbursement and Compensation of the Managing Partner. The
Managing Partner shall be entitled to reimbursement for reasonable out-of-pocket
expenses incurred by him on behalf of the Partnership or in pursuance of his
duties as Managing Partner. In addition, the Managing Partner shall be entitled
to compensation for services rendered to the Partnership.
ARTICLE III
CONTRIBUTIONS AND DISTRIBUTIONS;
ACCOUNTING; ALLOCATIONS
Section 3.1. Capital Accounts and Sub-Accounts. A capital account shall
be maintained for each Partner. A Partner shall succeed, wholly or partially as
the case may be, to the capital account of his predecessor in interest. The
aggregate balances of sub-accounts of a Partner's capital account shall equal
the balance of such capital account. There shall be maintained the following
sub-accounts of the capital account: base sub-account, surplus sub-account, and
tax variance sub-account; except that different or additional sub-accounts may
be maintained on the determination of the Managing Partner on the advice of the
"Accountants" (as defined in Section 10.7) that such different or additional
sub-accounts will more appropriately reflect the purposes and intents of this
Agreement. Additionally, sub-accounts for assets and liabilities shall be
maintained where appropriate.
Section 3.2. Units. Units of two classes, to be known as "A Units" and "B
Units" (herein referred to collectively as
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"Units"), having respectively such attributes and such effects on capital
accounts, allocations, distributions, rights, duties, and interests as are
prescribed in this Agreement, shall be allocated among the Partners. The
provisions of this Agreement contemplate that there are to be outstanding
3407.01088 A Units and 11653.56573 B Units. In the case of any variation
therefrom in the actual number of outstanding Units of any class, appropriate
adjustment in the application of the provisions of this Agreement to reflect the
purposes and intent hereof shall be made by the Managing Partner on the advice
of the Accountants.
Section 3.3. Initial Capital Contributions and Units. Each Partner has
contributed to the Partnership on the date of this Agreement the Shares, 1701
Interests, cash and/or other property and has been allocated the number and
class of Units set forth opposite his name on Exhibit B hereto.
Section 3.4.1. Accounting--In General. For purposes of the application of
the provisions of this Agreement, the accounting of the Partnership shall be
maintained under federal income tax accounting principles, except as otherwise
provided herein. This Agreement does not address issues of accounting for other
purposes. The allocation of any item of income, gain, expense, loss or
deduction to a Partner shall be reflected in such Partner's capital account.
Liquidation proceeds shall be distributed in accordance with capital accounts.
The terms "book accounts", "book value" and the like shall refer to such
accounts, value, and the like as determined under the method of accounting
prescribed by this Agreement. All accounting determinations, including the
interpretation of this Article, shall be made by the Managing Partner on the
advice of the Accountants.
Section 3.4.2. Accounting--Contributions by a Partner. Property
contributed by a Partner to the Partnership shall be accounted for at fair
market value at the time of contribution. (The fair market value at
contribution of the property referred to in Section 3.3 is set forth on Exhibit
B.) The variation, if any, between the tax basis of such property to the
Partnership and its book value ("pre-contribution variation") shall be credited
(or debited, if tax basis exceeds book value) to the Partner's tax variance sub-
account; the balance shall be credited to the Partner's base sub-account.
Correspondingly, such pre-contribution variation shall be debited (or credited)
to such property's asset tax variance sub-account; the balance shall be debited
to such property's asset base sub-account. The tax variance sub-accounts so
created for the asset account and the Partner's capital account, therefore,
shall represent the variation between tax accounting and book accounting and
shall be deemed to correspond to each other. Any item for tax purposes of
income, gain, loss, or deduction recognized with respect to and
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to the extent of an asset's tax variance sub-account (which item to such extent
is therefore not recognized for book purposes, other than for sub-accounts as
provided herein) shall be allocated for tax purposes to the Partner with the
corresponding tax variance sub-account and shall result in appropriate
adjustments between tax variance sub-accounts and base or other sub-accounts;
likewise, any item of income, gain, loss, or expense for book purposes, to the
extent not recognized for tax purposes due to a tax variance sub-account (e.g.,
excess of book depreciation over tax depreciation), shall serve appropriately to
adjust the Partner's or Partners' corresponding tax variance sub-accounts and
their base or other sub-accounts, and, to the extent recognized for tax
purposes, shall be allocated for tax purposes among the Partners in the same
manner as the book item (other than such portion as results in adjustment to tax
variance sub-accounts) is allocated for book purposes. The "ceiling rule"
described in 26 C.F.R. ("Reg.") (S) 1.704-1(c)(2) shall apply for tax purposes
but not for book accounting purposes (except for sub-accounts); in the case of
the application of the ceiling rule for tax purposes, special allocations for
tax purposes may be made by the Managing Partner(s) from subsequently recognized
(for tax purposes) items of income, gain, loss, or deduction to offset the
effect of the ceiling rule, but only to the extent permitted by law.
Section 3.4.3. Accounting--Depreciation. Depreciation (or items in lieu
thereof) shall be computed according to federal income tax accounting principles
but with reference to book value rather than tax basis. For the effect of the
difference between book depreciation and tax depreciation, see Section 3.4.2.
Section 3.4.4. Accounting--Section 754 Election. The Partnership may make
or decline to make the adjustments provided in section 754 of the Internal
Revenue Code of 1954, as amended ("Code"), in the sole discretion of the
Managing Partner. If such election is in effect, adjustments to book asset
accounts and book capital accounts corresponding to the basis adjustments
prescribed by sections 734 and 743 of the Code may be made by the Managing
Partner. In making such book adjustments, duplication shall be avoided and pre-
existing tax variance accounts shall be appropriately adjusted.
Section 3.4.5. Accounting--Transactions Indicating Discrepancies between
Book Accounting and Fair Market Value. The following transactions may indicate
a discrepancy between the book value of an asset (or of a capital account) and
the fair market value of such asset (or of the Partnership interest represented
by such capital account):
(a) An existing or new Partner makes a capital contribution and,
immediately thereafter, the ratio of the fair
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market value of his Partnership interest to all Partnership interests is
different from the ratio of his capital account to all capital accounts.
(b) A Partnership interest (or portion thereof) is sold or exchanged
or is liquidated (whether or not a section 754 election is in effect) at a
price or value different from the corresponding capital account (or portion
thereof).
(c) An asset is distributed in kind based on a value different from
its book value.
In case of an event resulting in such discrepancy, the Managing Partner may
elect among Alternatives A, B, or C described below. The alternative chosen
shall be chosen in an equitable manner in accordance with substantial fairness.
In making such choice, considerations of convenience and ease of administration
may be taken into account but considerations relating to the personal, family,
or financial situations of the Partners, or any of them, shall not be taken into
account.
Alternative A--Restatement of Assets. Some or all assets of the
Partnership shall be restated to their fair market values, and adjustments to
capital accounts resulting therefrom shall be made, as if such assets were sold.
Such adjustments shall be treated as made to tax variance sub-accounts.
Alternative A shall not be selected unless such adjustments are made in
accordance with sound financial accounting principles and are made principally
for a non-tax business purpose.
Alternative B--Special Adjustment Memorandum Accounts. Book accounts
shall not be adjusted but memorandum accounts (i.e., accounts not comprising or
contributing to accounts on the balance sheet) shall be maintained to reflect
what such adjustments would have been under Alternative A. Special allocations
of subsequently recognized items of income, gain, loss, or deduction, which
items correspond to the items in the memorandum accounts, shall be made to the
extent possible in accordance therewith. In lieu of keeping memorandum accounts
for both assets and capital accounts, memorandum accounts solely for capital
accounts may be maintained and the subsequent special allocations may be made
out of items of the Partnership generally.
Alternative C--No Adjustment. No adjustments shall be made under this
Section 3.4.5.
Section 3.4.6. Accounting--Liquidation. Upon the liquidation and winding
up of the Partnership, Alternative A of Section 3.4.5 shall apply to all assets
distributed in kind, and, with respect to any such asset, shall apply as of a
date, selected by the Managing Partner, not more than four (4) days
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prior to the date of its distribution. The fair market value of an asset
securing non-recourse debt shall be deemed to be at least the amount of such
debt.
Section 3.4.7. Accounting--Losses Attributable to Non-Recourse Debt. A
loss, expense, or deduction (or item thereof) is attributable to nonrecourse
debt which is secured by Partnership property to the extent of the excess
("minimum gain") of the outstanding liability of such debt determined under the
Partnership's method of accounting (excluding any portion of liability which
would not be treated as an amount realized under Code (S) 1001 and Reg. (S)
1.1001-2 if such debt were foreclosed upon) over the adjusted basis of such
property for tax purposes. An allocation of loss, expense, or deduction (or
item thereof) attributable to non-recourse debt otherwise to be made to a
Partner or Partners shall not be so made to the extent that it would cause the
deficit (debit) capital account balances of such Partner or Partners (excluding
the portion, if any, of such deficit balances that must be restored to the
Partnership upon liquidation) to exceed the minimum gain determined at the end
of the Partnership's taxable year. In addition, a special allocation of income
or gain (or item thereof) shall be made to a Partner in any year to the extent
necessary to prevent any such deficit (debit) balance in his capital account at
the end of the Partnership's taxable year from exceeding the "minimum gain"
which would be allocable to him if the Partnership's property were sold for fair
market value at such time.
Section 3.4.8. Accounting--Illinois Replacement Tax. Any expense of the
Partnership for the Illinois Personal Property Tax Replacement Income Tax
("Replacement Tax") shall be specially allocated among the surplus or other sub-
accounts, as appropriate, of those Partners who, in their separate capacities,
are not subject to such tax and whose membership in the Partnership therefore
does not reduce the Partnership's liability for such tax under applicable law.
In addition, a special distribution, to be charged against surplus sub-accounts
or other sub-accounts as appropriate, shall be made, within a reasonable time
after the close of the Partnership's taxable year, to those Partners who, in
their separate capacities, are subject to such tax, and shall be made in the
respective amounts of the Replacement Tax not imposed on the Partnership by
reason of such Partners' membership in the Partnership.
Section 3.5. Ordinary Income and Loss; Capital Gain and Loss. "Ordinary
Income" or "Ordinary Loss" for any fiscal year shall be the net income or loss
of the Partnership for such year computed without regard to items entering into
the computation of Net Capital Gain or Net Capital Loss. "Net Capital Gain" or
"Net Capital Loss" shall be the net capital gain or loss of the Partnership on
sales or other dispositions of Partnership
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property but shall include such other items as the Managing Partner shall
determine to be capital rather than ordinary in nature and shall exclude such
items as the Managing Partner determines to be ordinary rather than capital in
nature.
Section 3.6. Distributable Amount. The "Distributable Amount" for any
fiscal year shall be an amount equal to the Ordinary Income of the Partnership
for such year (a) decreased by such amounts as the Managing Partner determines
to be required to be retained for the reasonable needs of the Partnership, or
(b) increased by amounts previously retained or available from cash from
operations which the Managing Partner determines not to be required to be
retained.
Section 3.7. Distributions--In General. Distributions may be in cash or
in kind as the Managing Partner shall determine. Distributions within a class
of Units shall be uniform as to fair market value within that class. In the
case of a distribution in kind of an asset whose book value is different from
its fair market value, see Section 3.4.5. No distribution shall be made to a
Partner which would violate the "minimum gain" provisions of Section 3.4.7. The
provisions of Sections 3.5 through 3.12 shall be applied after effect is given
to special allocations, limitations, and adjustments, if any, prescribed under
Sections 3.4.1 through 3.4.8.
Section 3.8. Distributions of the Distributable Amount. Except as
provided in Section 3.9(d), the Distributable Amount for each fiscal year shall
be distributed to the Partners in the order of priorities set forth in this
Section 3.8. It is understood that the application of such priorities may
result in reduced distributions or no distributions under some or all of the
priorities. The order of priorities is as follows:
(a) The first $200,000 in the aggregate shall be distributable 80% to
the holders of A Units, and 20% to the holders of B Units.
(b) If the Distributable Amount exceeds $200,000, the first $200,000
of such excess shall be distributable 70% to the holders of A Units, and
30% to the holders of B Units.
(c) If the Distributable Amount exceeds $400,000, the first $200,000
of such excess shall be distributable 60% to the holders of A Units, and
40% to the holders of B Units.
(d) If the Distributable Amount exceeds $600,000, the first $200,000
of such excess shall be distributable 50% to the holders of A Units, and
50% to the holders of B Units.
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(e) If the Distributable Amount exceeds $800,000, the first $200,000
of such excess shall be distributable 40% to the holders of A Units, and
60% to the holders of B Units.
(f) All of the remaining balance, if any, of the Distributable Amount
(i.e., in excess of $1,000,000) shall be distributable 30% to the holders
of A Units, and 70% to the holders of B Units.
Distributions of the Distributable Amount shall be charged against the Partners'
respective surplus sub-accounts.
Section 3.9. Allocation of Ordinary Income and Loss; Coordination with
Distributable Amount. For any fiscal year:
(a) Ordinary Income shall be credited to the Partners' respective surplus
sub-accounts and shall be allocated in the same manner and order as the
Distributable Amount, to the extent thereof.
(b) Any amount of Ordinary Income remaining after the application of
subsection (a) shall next be allocated among the Partners' respective surplus
sub-accounts having debit balances, in the reverse chronological order of prior
debits made to such accounts which remain reflected therein.
(c) Any amount of Ordinary Income remaining after the application of
subsection (b) shall be allocated as if the Distributable Amount were equal to
the excess of the actual amount of Ordinary Income over the amount allocated
under subsection (b) for the fiscal year. Allocations of Ordinary Income shall
be credited to the Partners' respective surplus sub-accounts.
(d) If the Distributable Amount exceeds the Ordinary Income, then, to the
extent of such excess and notwithstanding Section 3.8, the Distributable Amount
shall be distributed in accordance with (and charged against) the credit
balances in the Partners' respective surplus sub-accounts, in the chronological
order of the credits made to such sub-accounts which remain reflected therein.
The balance of the Distributable Amount shall be distributed in accordance with
Section 3.8.
(e) Ordinary Loss shall be allocated (after the application of subsection
(d)) in accordance with (and charged against) the credit balances in the
Partners' respective surplus sub-accounts in the reverse chronological order of
the credits made to such sub-accounts which remain reflected therein.
(f) Any Ordinary Loss remaining after the application of subsection (e)
shall be allocated among (and charged against) the surplus sub-accounts of
Partners having credit balances in their
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capital accounts (determined as if all "minimum gains" were realized) in such
manner that, if the Partnership were liquidated immediately after such
allocation and Partnership properties not disposed of were valued in accordance
with Section 3.12, liquidation proceeds would be distributed in accordance with
Section 3.10(c) (after the application of the assumptions set forth in
paragraphs (1) through (3) of Section 3.10(b)).
(g) Any Ordinary Loss remaining after the application of subsection (f)
shall be allocated 50% to A Units, and 50% to B Units, and shall be charged
against surplus sub-accounts.
Section 3.10. Liquidation Distributions.
(a) Upon the liquidation and winding-up of the Partnership, all the
debts and liabilities of the Partnership shall be paid or provided for and the
net assets of the Partnership shall be distributed to the Partners in
liquidation of their Partnership interests in accordance with their capital
accounts. Assets shall be restated to their fair market values in accordance
with Section 3.4.6.
(b) The allocation of adjustments to capital accounts to be made under
Section 3.4.6. shall be made by assuming, to the extent possible, that:
(1) For any fiscal year in which all or part of the liquidation
occurs, the Distributable Amount has been distributed and the Ordinary
Income or Loss has been allocated, in the manner otherwise provided in
this Agreement.
(2) The Partners have made additional capital contributions to
the Partnership in cash in the amount of their respective deficit
(debit) balances in their surplus sub-accounts and in the respective
amounts of prior distributions to them under Section 3.11; and the
Partnership has made distributions to the Partners in cash in the
amount of their respective credit balances in their surplus sub-
accounts.
(3) The remaining amount of Partnership net assets available for
distribution is to be distributed pursuant to the liquidation schedule
set forth in subsection (c). It is understood that under the
priorities of subsection (c), there may be reduced distributions or no
distributions under some or all of such orders of priorities.
(c) The order of priorities of distributions referred to in subsection
(b) shall be in accordance with the following liquidation schedule:
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(1) The first $5,000,000 in the aggregate shall be distributed
25% to the holders of A Units, and 75% to the holders of B Units;
(2) the next $5,000,000 (i.e., in excess of $5,000,000) shall be
distributed 40% to the holders of A Units, and 60% to the holders of B
Units; and
(3) all the remaining amounts (i.e., in excess of $10,000,000)
shall be distributed 50% to the holders of A Units, and 50% to the
holders of B Units.
(d) It is understood that if the aggregate of the adjustments to
capital accounts under Section 3.4.6 are insufficient to produce a liquidation
distribution in the precise order set forth in subsection (c) (after the
application of the assumptions set forth in paragraphs (1) through (3) of
subsection (b)), then the order set forth in subsection (c) shall be followed
only to the extent possible.
Section 3.11. Distribution of Proceeds of Sales and Refinancing;
Retirement of Units. At any time, in the discretion of the Managing Partner,
the proceeds of sales and other dispositions, and of refinancings, of
Partnership property may be distributed as if the Partnership were being
liquidated and as if Partnership properties not disposed of were valued in
accordance with Section 3.12. Such distributions shall be charged only against
sub-accounts of the Partners other than surplus sub-accounts, except to the
extent the Managing Partner determines that it is appropriate to make charges to
surplus sub-accounts. Such distributions (other than those charged against
surplus sub-accounts) shall be made in the order set forth in Section 3.10(c)
applied on a cumulative basis, except that the capital accounts (determined by
excluding surplus sub-accounts) of Partners having positive balances therein
shall be reduced to zero if distributions creating or increasing debit balances
are to be made. Distributions made in retirement of Units shall be
appropriately charged against surplus sub-accounts and other sub-accounts.
Section 3.12. Allocation of Net Capital Gain or Loss. Net Capital Gain
and Net Capital Loss resulting from any sale or other disposition of Partnership
property shall be allocated among the Partners' respective sub-accounts other
than surplus sub-accounts, as if the Partnership were to be liquidated
immediately following the consummation of such transaction and as if the fair
market values of Partnership properties not sold or otherwise disposed of were
equal to their respective book values, except that the fair market value of any
item of such property which secures a non-recourse debt shall be deemed to be at
least the amount of such debt.
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ARTICLE IV
LOANS TO PARTNERS
Section 4.1. Partnership Loan Account. Each Partner shall have a
loan account with the Partnership and each Partner shall be entitled to borrow
from the Partnership, on such terms and conditions, and in such amounts, as the
Managing Partner shall from time to time establish.
Section 4.2. Partnership Notes, Etc. The Managing Partner shall have
the right to borrow on the credit of the Partnership on behalf of the
Partnership and, in connection therewith, to sign notes, drafts and security
agreements and grant security interests in Partnership assets.
ARTICLE V
ASSIGNMENT AND TRANSFER OF INTERESTS
Section 5.1. Prohibition on Transfers. No Partner shall, voluntarily
or involuntarily, sell, transfer, assign, pledge, hypothecate, convey or
otherwise dispose of (any one of the foregoing being referred to as a
"Transfer") any portion of his interest in the Partnership or the avails or
proceeds thereof without the express prior written approval of the Managing
Partner, except to a "Permitted Transferee" (as defined in Section 5.2). Any
Partner may make a Transfer of Units to a Permitted Transferee without the
consent or approval of any other Partner, including the Managing Partner
(subject to the limitation set forth in Section 5.3), and without offering the
same to any other Partner or the Partnership. The Managing Partner, however,
shall at all times retain sufficient Units to constitute at least 1% of the
aggregate capital accounts of the Partnership. Any A Units transferred
hereunder, whether to a Permitted Transferee or to any other transferee, shall
not, however, be convertible into B Units.
Section 5.2. Definition of Permitted Transferee. A "Permitted
Transferee" shall mean any of the following: any sibling of a Partner or of a
beneficiary of a trust which is a Partner; any lineal descendant of a Partner or
of a beneficiary of a trust which is a Partner; any spouse of such lineal
descendant; any child of such spouse if such lineal descendant has elected to
treat such child as a descendant for the purposes of this Agreement; and any
trust or other entity (and the beneficiary or beneficiaries thereof) for the
primary benefit of any such person or persons; and with respect to Transfers by
a trust which is a Partner, the beneficiary of such trust.
Section 5.3. Status of a Permitted Transferee. Upon a Transfer by
any Partner to a Permitted Transferee, such Permitted Transferee shall, if the
Managing Partner shall so agree in his
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discretion, become a substituted or additional Partner upon agreeing in writing
to be bound by the terms of this Agreement. If the Managing Partner shall not
consent to any Permitted Transferee becoming a substituted or additional
Partner, such Permitted Transferee shall have only the rights of an assignee.
Section 5.4. Transfers in Violation of Section 5.1. Any purported
Transfer in violation of Section 5.1 shall be null and void and of no force or
effect. Any such purported Transfer shall entitle the Partnership to purchase,
on the terms and conditions specified in Article VI of this Agreement, all or
any part of the Units of the Partner purporting to make such a Transfer. The
purchase price shall be determined as of the closing date of a purchase and sale
of such Partner's Units in accordance with Article VI.
Section 5.5. Levy by Creditors. Any levy or other attachment by any
creditor (other than the Partnership or a Permitted Transferee) against any
Partner's interest in the Partnership or the avails or proceeds thereof shall be
deemed a purported Transfer in violation of Section 5.1.
ARTICLE VI
VOLUNTARY PURCHASES AND SALES OF
INTERESTS IN THE PARTNERSHIP
Section 6.1. Partner's Election to Sell. Any Partner, or, upon the
death of a Partner who is a natural person, his personal representative (such
Partner or such personal representative hereinafter called the "Selling
Partner") may, by written notice ("Sale Notice") to the Partnership, require the
Partnership to purchase the number of A Units or B Units specified in his Sale
Notice at the prices and on the terms herein specified; provided, however, that
no holder of B Units may, in any fiscal year, sell more than twenty percent
(20%) of the number of such holder's B Units outstanding on the date of service
of the first Sale Notice served by such holder under this Article VI with
respect to B Units; and provided further that any such sale shall be subject to
the rights of first refusal set forth in Section 6.2 hereof.
Section 6.2. Rights of First Refusal. Within twenty (20) days of
receipt of a Sale Notice, the Partnership shall give written notice ("Option
Notice") to all of the other Partners (the "Remaining Partners") setting forth
the number and class of Units to be purchased from the Selling Partner and the
estimated purchase price for each. If any Partner shall desire to purchase any
Units offered for sale in the Sale Notice, said Partners ("Purchasing Partners")
shall give written notice to the Partnership within thirty (30) days after the
date of the Option Notice, specifying the number and class of Units which they
desire to purchase. If the Purchasing Partners desire to
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purchase more than the number of Units offered for sale, the number of Units to
be purchased by each Purchasing Partner shall be allocated pro rata in
accordance with the number of Units owned by each Purchasing Partner (for
purposes of such allocation A Units and B Units shall be deemed equivalent).
Any such purchase by a Purchasing Partner shall be paid for in cash.
Section 6.3. Purchase by the Partnership. Any Units which Partners
do not elect to purchase pursuant to Section 6.2 shall be purchased by the
Partnership.
Section 6.4. Terms of Purchase.
(a) The closing for a purchase and sale of Units under this Article
VI, whether by the Partnership or Purchasing Partners, shall be held on the
sixtieth (60th) day following the date of service of the Sale Notice.
(b) The Partnership and any Purchasing Partner shall make payment in
full for such Units purchased from a Selling Partner pursuant to this Article VI
on the closing date.
Section 6.5. Funding by Partnership. The Partnership shall have the
right to elect to fund any purchase of Units under this Article VI in whole or
in part with cash or Partnership property other than the Shares. Any such
Partnership property determined by the Partnership to be used for payment shall
be equivalent in fair market value, determined as of the date of payment, to the
cash payment which would otherwise be required to be made on such date by the
Partnership.
Section 6.6. Settling of Selling Partner's Loans. If any Selling
Partner is indebted to the Partnership for any loans made by the Partnership to
him, and the sale of any Units would result in either a complete termination of
such Selling Partner's interest in the Partnership, or would result in aggregate
loans to the Selling Partner being in excess of the amount in such Partner's
capital account after giving effect to the sale, then the following shall apply:
(a) The aggregate purchase price payable by the Partnership, if any,
to the Selling Partner, shall be reduced by an amount sufficient to repay
the Selling Partner's loans either entirely (in the case of a complete
termination of interest in the Partnership) or by an amount sufficient to
reduce the amount of the Selling Partner's loans to the amount in such
Partner's capital account; and upon any such purchase at such reduced
purchase price, the amount of such reduction shall be applied against the
Selling Partner's outstanding loans, first to any outstanding interest,
then to principal.
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(b) If the action of the Partnership under subsection 6.6(a) is
insufficient either to repay the Selling Partner's loans in full (in the
case of a complete termination of interest in the Partnership) or to reduce
the Selling Partner's loans to the amount of his capital account, the
Partnership may require the Selling Partner to pay over to the Partnership
for application against the Selling Partner's loans an amount equal to the
amount of any such insufficiency.
(c) The Managing Partner may take such action other than or different
from that specified in subsections (a) and (b) above with respect to loans
of a Selling Partner as he shall deem proper.
Section 6.7. Purchase Price. For purposes of a purchase and sale of Units
under this Article VI, each Unit of a Selling Partner shall have a purchase
price equal to such amount as would be distributed thereon under Section 3.10 if
the Partnership were liquidated on the Sale Valuation Date.
Section 6.8. Absence of Liability of Partners. In the case of a purchase
of units by the Partnership, recourse on the Partnership's obligation to pay the
purchase price may be had only out of and against Partnership property, and no
Partner shall be personally liable therefor, nor shall recourse thereon be had
out of or against the separate property of any Partner.
Section 6.9. Construction of "Purchase" and Other Terms. The "purchase"
of a Unit by the Partnership and the "payment" by the Partnership of the
"purchase price" therefor shall be construed to mean a distribution by the
Partnership to a Partner in exchange for all or part, as the case may be, of his
Partnership interest. The Units so "purchased" shall not be an item of property
in the hands of the Partnership. The "payment" by the Partnership of the
"purchase price" in the form of a transfer of property shall be construed as a
distribution of property to a Partner and not as a disposition of property in
satisfaction of a money obligation. The terms "purchase", "sale", "payment",
"purchase price" and the like, when used in reference to a transaction under
this Agreement between the Partnership and a Partner, are used solely for
convenience and ease of description. Such terms shall not be construed to alter
the nature of the transaction as being between the Partnership and a Partner
acting in his capacity as a Partner.
ARTICLE VII
ADDITIONAL CONTRIBUTIONS
Section 7.1. At the discretion of the Managing Partner, the existing
Partners or such additional Partners as are admitted
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pursuant to Section 5.3 shall be permitted, but shall have no obligation, to,
make further contributions to the Partnership. Such Partners shall be allocated
such newly issued Units by reason thereof as may be determined by the Managing
Partner, such Units being equivalent in fair market value to the fair market
value of the property so contributed. If the Units so allocated ("New Units")
are equivalent in fair market value to the fair market value on the date of this
Agreement of the Units of a like class, the New Units shall rank on a par with
the then existing Units of a like class. If the New Units are not equivalent in
fair market value to the fair market value on the date of this Agreement of
Units of a like class, appropriate changes shall be made in Sections 3.8 and
3.10 of this Agreement to account for such disparity in fair market values.
ARTICLE VIII
TERM OF THE PARTNERSHIP
Section 8.1. Term. The business and affairs of the Partnership shall be
continued in accordance with this Agreement and shall not cease to be conducted
until the date which is the earlier of:
(a) The fifteenth anniversary of the date of this Agreement.
(b) The date on which the Partners having two-thirds or more of the
aggregate Voting Power of all Partners shall elect to terminate the
Partnership.
(c) The sale or other disposition of substantially all of the property
belonging to the Partnership; provided, however, that, if such sale
involves the receipt by the Partnership of purchase money obligations, or
of a lease under a so-called "sale-leaseback" transaction, the Partnership
shall not dissolve or terminate prior to collection of such purchase money
obligations or termination of such lease, unless and until the Managing
Partner elects to so terminate the Partnership at any time after such sale.
Section 8.2. Liquidation. On termination of the Partnership, the Managing
Partner shall proceed to wind up the affairs of the Partnership, pay or provide
for all of the liabilities of the Partnership, and distribute the remaining
assets of the Partnership to the Partners in accordance with their respective
interests as herein provided. To the extent possible, loans receivable from
Partners shall be distributed to the Partners owing the same by matching the
same against loans payable by the Partnership.
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<PAGE>
ARTICLE IX
FINANCIAL STATEMENTS, ETC.
Section 9.1. Fiscal Year. The fiscal year of the Partnership shall
end on December 31 of each year unless otherwise determined by the Managing
Partner.
Section 9.2. Financial Statements. The Managing Partner shall cause
to be prepared and distributed, not less than once each fiscal year, a financial
statement of the Partnership consisting of a balance sheet, income statement and
schedules showing the loan account of each Partner, cash distributions made to
the Partners, purchase price of Partnership Units as of the last day of the
fiscal year, computed as herein provided, and such other items as the Managing
Partner may select. Such financial statements may be audited or unaudited.
Section 9.3. Books and Records. The Partnership shall keep books and
records at its place of business, setting forth a true and accurate account of
all of the business transactions arising out of the conduct of the Partnership.
All Partners shall have at all times access to and the right to inspect the
Partnership's books and records.
Section 9.4. Tax Returns. The Partnership shall prepare and file all
necessary or appropriate tax returns.
Section 9.5. Bank Accounts. Funds of the Partnership shall be used
only for Partnership purposes and shall be deposited in such accounts in banks
or other financial institutions as may be established from time to time by the
Managing Partner. Withdrawals shall be made by the Managing Partner pursuant to
his duties hereunder.
ARTICLE X
CERTAIN DEFINITIONS
The following terms shall have the following meanings herein:
Section 10.1. Partnership shall mean the Partnership formed pursuant
to this Agreement.
Section 10.2. Partners shall mean the signatories hereto and any
persons hereafter admitted to the Partnership pursuant to the provisions
o(Pounds) this Agreement.
Section 10.3. Partnership Net Assets as of any date shall mean the
sum of Partnership assets less Partnership liabilities as of such date;
securities (including the Shares) and other
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property forming part of the Partnership assets as of such date shall be valued
at the market value thereof.
Section 10.4. Market Value of securities as of any date shall mean:
(a) If such securities are traded over the counter, the lowest closing
bid price on such date.
(b) If such securities are traded on a recognized securities exchange,
the closing price on such date.
(c) If such securities are traded neither over the counter nor on a
recognized securities exchange, the value shall be determined by the
Managing Partner.
The fair market value of securities shall be deemed to be their "Market Value"
as determined under this Section 10.4.
Section 10.5. Sale Valuation Date shall mean the date of closing of a
purchase and sale of Units under Article VI.
Section 10.6. Shares shall mean (i) the shares of Common Stock of United
Stationers Inc., a Delaware corporation ("United"), par value $0.10 per share,
contributed to the Partnership by the Partners, and (ii) any other shares or
securities received with respect thereto or in exchange therefor. Wherever in
this Agreement reference is made to, or allocations or distributions are
required to be made with respect to, specific numbers of Shares, such numbers
shall be equitably adjusted to take into account any stock split, stock
dividend, combination, reverse stock split or other change in the outstanding
capital stock of United or any successor issuer.
Section 10.7. Accountant means the certified public accountants, if any,
regularly engaged by the Partnership, or as may, from time to time, be selected
by the Managing Partner.
Section 10.8. Person means, in addition to natural persons, where
appropriate, corporations, partnerships, trusts,
estates, associations, governments and governmental units and agencies.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1. Certain Warranties.
(a) Each Partner, by execution and delivery of this Agreement,
represents, warrants and agrees with each other Partner that: (i) he is
acquiring his Partnership interest solely
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for his own account for the purpose of investment and not for or with a view to
distribution hereof; (ii) he has had free access to all documents, information,
books and records as he has deemed necessary to apprise himself of the matters
with which this Agreement is concerned; and (iii) he understands that the
Partnership interests have not been registered under the Securities Act of 1933,
as amended, or under the blue sky laws of any state, nor will such interests be
registered.
(b) The parties recognize that neither the A Units nor the B Units are
traded over-the-counter or on a national securities exchange or any other
market. Notwithstanding the uncertainty inherent in valuing securities for
which no market exists, the parties intend and believe that the respective fair
market values, at the time of contribution, of the Shares contributed to the
Partnership and of the A Units and B Units issued in exchange therefor, are
equal. In order to assure such equality, it is agreed that any determination as
to such relative values as of such time made by the United States Securities and
Exchange Commission, the Illinois Securities Commissioner, or any other agency
or instrumentality of the United States or of any state shall be binding on all
parties hereto. If any such governmental agency or instrumentality shall
determine that the respective values of the Shares contributed to the
Partnership and of each A Unit and/or B Unit issued in exchange for such shares
are not equal, the number of A Units or B Units issued with respect to each
Share shall be increased or decreased nunc pro tunc as of the date of
contribution to a number (including fractional numbers) which shall cause the
fair market value of the number of A Units and/or B Units issued with respect to
each Share to be equal to the value of such Shares as of the date of
contribution. Such increase or decrease shall require redeterminations of
rights and duties as to allocations and distributions made during the period
from and after the date of this Agreement to the time such increase or decrease
is determined.
Section 11.2. Indemnity. The Partnership hereby agrees to indemnify and
hold harmless each person who is or may hereafter serve as Managing Partner from
any and all claims, damages, liabilities, losses and expenses (including
attorney's fees) arising out of his acts as Managing Partner, except acts or
omissions constituting willful misconduct or gross negligence.
Section 11.3. Severability. If any portion of this Agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect the remaining valid and enforceable portions of this Agreement which
shall continue in full force and effect.
Section 11.4. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the heirs,
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personal representatives, successors and assigns of the parties hereto, subject
to all of the terms and conditions hereof. This Section 11.4 shall not be
construed to permit transfers of interests not otherwise permitted hereunder.
Section 11.5. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall constitute an original and all of which shall
constitute one Agreement. The signature pages of such counterparts may be
detached therefrom after execution of this Agreement and attached to one
counterpart.
Section 11.6. Filings, etc. Any filing or recordation required to be made
under applicable law with any governmental agency or official on behalf of or
with respect to the Partnership may be signed by the Managing Partner.
Section 11.7. Notices. All notices permitted or required hereunder shall
be in writing and shall be addressed to the Partners at their respective
addresses appearing on the Partnership's books. Notices sent by mail shall be
deemed to have been given three (3) days after deposit in the U.S. mails.
(Notices hand-delivered shall be deemed to have been served when so delivered.)
Section 11.8. Gender and Number. Despite the gender and number of any
word used herein, such word shall import the masculine, feminine, neuter,
singular and plural, as may be reasonably inferred from the context.
Section 11.9. Power of Attorney. Each of the undersigned and each person
who becomes a Partner does hereby constitute and appoint the Managing Partner,
under and pursuant to this Agreement as it may be amended from time to time, to
be his true and lawful attorney in fact, with full power of substitution, at any
time and from time to time, to make, execute, sign, acknowledge, deliver, file,
record, amend or cancel certificates for conducting business under an assumed
name and such other instruments as may be required by or under law in connection
with the formation, existence, operation or termination of, or the business to
be conducted by, the Partnership. The parties agree that the foregoing power of
attorney is coupled with an interest and shall be irrevocable during the term of
the Partnership and shall continue notwithstanding the death, dissolution or
incompetence of any party giving such power of attorney.
Section 11.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, including the
Act.
Section 11.11. Amendments. No change, amendment or modification of this
Agreement shall be valid unless the same
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shall be in writing and signed by all parties. No waiver of any provision
hereof shall be valid unless in writing and signed by the party to be charged.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
date first set forth above.
- -------------------------------- ----------------------------------
Melvin L. Hecktman, as Judith Hecktman
custodian for Brian J.
Hecktman
- -------------------------------- ----------------------------------
Melvin L. Hecktman, as Melvin L. Hecktman
custodian for Julie B.
Hecktman
- -------------------------------- ----------------------------------
Melvin L. Hecktman, as Jerold A. Hecktman, as co-
custodian for Sherri A. trustee of the trusts listed
Hecktman on Exhibit A as Nos. 1, 3, 5,
6, 7, 8, 10, 12, 13, 14, 15,
17, 19, 20 and 21
- -------------------------------- ----------------------------------
Ruth L. Hecktman, as co- Arthur W. Brown, Jr., as co-
trustee of the trusts listed trustee of the trusts listed
on Exhibit A as Nos. 1, 2, 4, on Exhibit A as Nos. 2, 3, 4,
5, 6, 8, 9, 11, 12, 13, 15, 7, 9, 10, 11, 14, 16, 17, 18
16, 18, 19 and 20 and 21
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<PAGE>
FIRST AMENDMENT TO AGREEMENT OF PARTNERSHIP
FOR
MLH INVESTMENT PARTNERSHIP
This First Amendment, dated as of January 9, 1986 (the "Amendment"), by and
among the parties whose names appear on the signature pages hereto.
PRELIMINARY STATEMENT
This Amendment amends the Agreement of Partnership for MLH Investment
Partnership, dated as of September 19, 1983 (the "Agreement") among the
Partners. All capitalized terms used herein, unless otherwise defined, shall
have the meanings set forth in the Agreement.
The parties hereto desire to amend the Agreement in order to clarify
certain ambiguities that may be perceived in the Agreement.
NOW, THEREFORE, in consideration of the promises and agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto promise and
agree as follows:
1. Section 3.2 of the Agreement provides that the provisions of the
Agreement "contemplate that there are to be outstanding 3,407.01088 A Units and
11,653.56573 B Units", and that variations therefrom in the actual number of
outstanding Units of any class may exist and that appropriate adjustments to the
application of the provisions of the Agreement may be made by the Managing
Partner on the advice of the Accountants. Section 3.3 of the Agreement provides
that the actual number of Units of either class is as set forth in Exhibit B to
the Agreement. The parties hereto acknowledge that the actual number of B Units
outstanding as of September 19, 1983, and as set forth in Exhibit B to the
Agreement, was 12,551.86179 B Units, and not the number of B Units contemplated
in Section 3.2 of the Agreement.
2. Except as amended hereby, and all other respects, the Agreement is
hereby ratified and confirmed.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
date first set forth above.
------------------------------------------
Melvin L. Hecktman
------------------------------------------
Melvin L. Hecktman, as custodian for Brian
J. Hecktman
------------------------------------------
Melvin L. Hecktman, as custodian for Julie
B. Hecktman
------------------------------------------
Melvin L. Hecktman, as custodian for Sherri
A. Hecktman
Judith Hecktman
Jerold A. Hecktman, as co-trustee of the
trusts listed on Exhibit A to the Agreement
as Nos. 1, 3, 5, 6, 7, 8, 10, 12, 13, 14,
15, 17, 19, 20, and 21
Ruth L. Hecktman, as co-trustee of the
trusts listed on Exhibit A to the Agreement
as Nos. 1, 2, 4, 5, 6, 8, 9, 11, 12, 13, 15,
16, 18, 19 and 20
Arthur W. Brown, Jr., as co-trustee of the
trusts listed on Exhibit A to the Agreement
as Nos. 2, 3, 4, 7, 9, 10, 11, 14, 16, 17,
18 and 21
By: ________________________________________
Melvin L. Hecktman,
Attorney-in-fact
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<PAGE>
AMENDMENT NO. 1 TO AGREEMENT OF PARTNERSHIP FOR
MLH INVESTMENT PARTNERSHIP
This Amendment No. 1 dated as of December 31, 1983 ("Amendment") to
Agreement of Partnership dated September 19, 1983 ("Original Agreement") is
entered into by and among the parties hereto.
RECITALS
The parties entered into the Original Agreement and desire to amend the
Original Agreement as herein specified.
All terms defined in the Original Agreement shall have the same meanings
below as therein.
NOW, THEREFORE, for good and valuable consideration the parties agree as
follows:
1. Amendment to Article III
Article III is hereby amended as follows:
a) The following is inserted at the end of Section 3.4:
In the event that the Partnership shall sell Units in HW Associates to
HW Associates for cash and to fund such payment HW Associates shall
sell Shares originally contributed by any Partners to the Partnership
and thereafter to HW Associates, the gain and loss which is allocated
to the Partnership on the sale of such Shares by HW Associates shall
be allocated among the Partners as though such Shares had been sold by
the Partnership and the gain or loss allocated in accordance with
Section 704(c)(2) of the Internal Revenue Code of 1954 as amended.
b) There shall be inserted at the end of Article III the following new
Section 3.12:
The Managing Partner may, upon the advice of the Accountants, make
different allocations of ordinary income and loss and capital gain and
loss from that provided for above so as to give substantial economic
effect to any particular transaction.
<PAGE>
2. Amendment to Article IX
Article IX is hereby amended by adding at the end of Section 9.2 the
following:
Such financial statement shall be prepared on such basis as the
Managing Partner shall deem appropriate.
IN WITNESS WHEREOF, the undersigned have heretofore set their hands as of
the date first written above.
- -------------------------------- ----------------------------------
Melvin L. Hecktman, as Judith Hecktman
custodian for Brian J.
Hecktman
- -------------------------------- ----------------------------------
Melvin L. Hecktman, as Melvin L. Hecktman
custodian for Julie B.
Hecktman
- -------------------------------- ----------------------------------
Melvin L. Hecktman, as Jerold A. Hecktman, as co-
custodian for Sherri A. trustee of the trusts listed
Hecktman on Exhibit A as Nos. 1, 3, 5,
6, 7, 8, 10, 12, 13, 14, 15,
17, 19, 20 and 21
- -------------------------------- ----------------------------------
Ruth L. Hecktman, as co- Arthur W. Brown, Jr., as co-
trustee of the trusts listed trustee of the trusts listed
on Exhibit A as Nos. 1, 2, 4, on Exhibit A as Nos. 2, 3, 4,
5, 6, 8, 9, 11, 12, 13, 15, 7, 9, 10, 11, 14, 16, 17, 18
16, 18, 19 and 20 and 21
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