UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
CAREMATRIX CORPORATION
(Name of Issuer)
Common Stock, par value $.05 per share
(Title of Class of Securities)
141706 10 1
(CUSIP Number)
Michael J. Bohnen, Esq.,
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110-2699
(617) 439-2000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 11, 1997
(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 [ ].
*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>
SCHEDULE 13D
|-----------------------| |--------------------------|
|CUSIP No. 141706 10 1 | | Page 2 of 10 Pages |
|-----------------------| |--------------------------|
|----------------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | Abraham D. Gosman |
| | (###-##-####) |
|---------|------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]|
| | (b) [ ]|
|---------|------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|---------|------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | |
| | Not Applicable |
|---------|------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) or 2(e) [ ] |
|---------|------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | |
| | United States of America |
|----------------|-----|-----------------------------------------------------|
| | 7 | SOLE VOTING POWER |
| | | 4,593,135 |
| NUMBER OF |-----|-----------------------------------------------------|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | 0 |
| OWNED BY EACH |-----|-----------------------------------------------------|
| REPORTING | 9 | SOLE DISPOSITIVE POWER |
| PERSON | | 7,647,753 |
| WITH |-----|-----------------------------------------------------|
| | 10 | SHARED DISPOSITIVE POWER |
| | | 0 |
|----------------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 7,727,753 |
|---------|------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) |
| | EXCLUDES CERTAIN SHARES* [ ] |
| | |
|---------|------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | |
| | 44.7% |
|---------|------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON * |
| | |
| | Individual (IN) |
|----------------------------------------------------------------------------|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
|-----------------------| |--------------------------|
|CUSIP No. 141706 10 1 | | Page 3 of 10 Pages |
|-----------------------| |--------------------------|
|----------------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | Chancellor Partners Limited Partnership I |
| | (52-206-5752) |
|---------|------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]|
| | (b) [ ]|
|---------|------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|---------|------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | |
| | Not Applicable |
|---------|------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) or 2(e) [ ] |
|---------|------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | |
| | Delaware, United States of America |
|----------------|-----|-----------------------------------------------------|
| | 7 | SOLE VOTING POWER |
| | | 4,578,503 |
| NUMBER OF |-----|-----------------------------------------------------|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | 0 |
| OWNED BY EACH |-----|-----------------------------------------------------|
| REPORTING | 9 | SOLE DISPOSITIVE POWER |
| PERSON | | 4,578,503 |
| WITH |-----|-----------------------------------------------------|
| | 10 | SHARED DISPOSITIVE POWER |
| | | 0 |
|----------------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 4,578,503 |
|---------|------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) |
| | EXCLUDES CERTAIN SHARES* [ ] |
| | |
|---------|------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | |
| | 26.5% |
|---------|------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON * |
| | |
| | Partnership (PN) |
|----------------------------------------------------------------------------|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
|-----------------------| |--------------------------|
|CUSIP No. 141706 10 1 | | Page 4 of 10 Pages |
|-----------------------| |--------------------------|
|----------------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | Chancellor Partners Limited Partnership II |
| | (52-206-5753) |
|---------|------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]|
| | (b) [ ]|
|---------|------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|---------|------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | |
| | Not Applicable |
|---------|------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) or 2(e) [ ] |
|---------|------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | |
| | Delaware, United States of America |
|----------------|-----|-----------------------------------------------------|
| | 7 | SOLE VOTING POWER |
| | | 3,069,250 |
| NUMBER OF |-----|-----------------------------------------------------|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | 0 |
| OWNED BY EACH |-----|-----------------------------------------------------|
| REPORTING | 9 | SOLE DISPOSITIVE POWER |
| PERSON | | 3,069,250 |
| WITH |-----|-----------------------------------------------------|
| | 10 | SHARED DISPOSITIVE POWER |
| | | 0 |
|----------------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 3,069,250 |
|---------|------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) |
| | EXCLUDES CERTAIN SHARES* [ ] |
| | |
|---------|------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | |
| | 17.8% |
|---------|------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON * |
| | |
| | Partnership (PN) |
|----------------------------------------------------------------------------|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
|-----------------------| |--------------------------|
|CUSIP No. 141706 10 1 | | Page 5 of 10 Pages |
|-----------------------| |--------------------------|
|----------------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | CLP, Inc. |
|---------|------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]|
| | (b) [ ]|
|---------|------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|---------|------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | |
| | Not Applicable |
|---------|------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) or 2(e) [ ] |
|---------|------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | |
| | Delaware, United States of America |
|----------------|-----|-----------------------------------------------------|
| | 7 | SOLE VOTING POWER |
| | | 4,593,135 |
| NUMBER OF |-----|-----------------------------------------------------|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | 0 |
| OWNED BY EACH |-----|-----------------------------------------------------|
| REPORTING | 9 | SOLE DISPOSITIVE POWER |
| PERSON | | 7,647,753 |
| WITH |-----|-----------------------------------------------------|
| | 10 | SHARED DISPOSITIVE POWER |
| | | 0 |
|----------------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 7,647,753 |
|---------|------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) |
| | EXCLUDES CERTAIN SHARES* [ ] |
| | |
|---------|------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | |
| | 44.3% |
|---------|------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON * |
| | |
| | Corporation (CO) |
|----------------------------------------------------------------------------|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Item 1. (a) Name of Issuer.
CareMatrix Corporation
(b) Address of Issuer's Principal Executive Offices
197 First Avenue,
Needham, Massachusetts, 02194
(c) Security.
Common Stock, par value $.05 per share
Item 2. Identity and Background.
(a) Name of Person Filing: (b) Address of Principal Business Office:
Abraham D. Gosman PhyMatrix Corp.
777 South Flagler Drive, Suite 1000E
West Palm Beach, Florida 33401
Chancellor Partners c/o CareMatrix Corporation
Limited Partnership I 197 First Avenue
Needham, Massachusetts 02194
Attn: Abraham D. Gosman
Chancellor Partners c/o CareMatrix Corporation
Limited Partnership II 197 First Avenue
Needham, Massachusetts 02194
Attn: Abraham D. Gosman
CLP, Inc. c/o CareMatrix Corporation
197 First Avenue
Needham, Massachusetts 02194
Attn: Abraham D. Gosman
(c) Present Principal Employment
and Employer:
Abraham D. Gosman Chairman and Chief Executive Officer
PhyMatrix Corp.
777 South Flagler Drive
West Palm Beach, FL 33401
Chairman and Chief Executive Officer
Meditrust
197 First Avenue
Needham, MA 02194
Chairman
CareMatrix Corporation
197 First Avenue
Needham, MA 02194
(d) Criminal Proceedings in Last Five Years:
None for each of the persons filing this statement.
Page 6 of 10
<PAGE>
(e). Civil Securities Proceedings in Last Five Years:
None for each of the persons filing this statement.
(f). Citizenship:
Abraham D. Gosman is a citizen of the United States.
Chancellor Partners Limited Partnership I and Chancellor
Partners Limited Partnership II are both Delaware limited partnerships.
CLP, Inc. is a Delaware corporation.
Item 3. Source and Amount of Funds or Other Consideration.
Not Applicable.
Item 4. Purpose of Transaction.
This Amendment No. 4 to Schedule 13D relates to two separate transactions;
(i) a restructuring of the Gosman family securities holdings, and (ii) the
execution by Chancellor Partners Limited Partnership II of a securities lending
agreement.
(a) Restructuring of Gosman Family Securities Holdings.
In connection with a restructuring of the Gosman family securities
holdings, the Gosman CareMatrix Trust (the "Trust"), which held a total of
7,612,153 shares of CareMatrix Corporation Common Stock (the "Trust Shares") for
the benefit of Andrew and Michael Gosman (the "Beneficiaries"), was dissolved on
December 11, 1997. As Trustee of the Trust, Mr. Gosman had sole dispositive
power over all of the Trust Shares and voting power with respect to 4,557,535 of
the Trust Shares. The voting power over the remaining 3,054,618 of the Trust
Shares was held by the Beneficiaries, with each of Andrew and Michael Gosman
voting 1,527,309 shares.
Upon dissolution of the Trust, the Trust Shares were distributed to the
Beneficiaries and then immediately transferred by the Beneficiaries to two
limited partnerships. A total of 4,557,535 of the Trust Shares were transferred
to Chancellor Partners Limited Partnership I ("CLP I") and the remaining
3,054,618 Trust Shares were transferred to Chancellor Partners Limited
Partnership II ("CLP II"). CLP, Inc., a corporation wholly-owned by Mr. Gosman,
is the general partner of both CLP I and CLP II and as such, Mr. Gosman will
have sole dispositive power over all of the Trust Shares and voting power with
respect to the 4,557,353 Trust Shares held by CLP I. Voting power as to the
3,054,618 Trust Shares held by CLP II will is held by Chancellor Partners
Business Trust (the "Business Trust"), the limited partner of CLP II. As the
sole Trustees and Shareholders of the Business Trust, Andrew and Michael Gosman
will continue to vote 1,527,309 shares each.
In connection with the formation of CLP I and CLP II, Mr. Gosman also
transferred on December 11, 1997 a total of (i) 20,968 shares of Common Stock,
previously registered in his name, to CLP, Inc. which immediately transferred
such shares to CLP I and (ii) 14,632 shares of Common Stock, previously
registered in his name, to CLP, Inc. which immediately transferred such shares
to CLP II (collectively these shares are referred to as the "GP Shares")
The restructuring described above had no effect on beneficial ownership of,
or voting or dispositive power over, the Trust Shares or the GP Shares by
Abraham D. Gosman.
Page 7 of 10
<PAGE>
(b) Securities Loan Agreement
In January, 1998 CLP II entered into a Securities Lending Agreement
(the "Agreement") in order to facilitate ordinary trading and market-making
activity with respect to the Company's Common Stock and 6 1/4% Convertible
Subordinated Notes due 2004. Pursuant to the terms of the Agreement, CLP II
will, from time to time, loan up to 850,000 shares of Common Stock to
BancAmerica Robertson Stephens ("BARS"), which loan is collateralized by cash
(the "Collateral") equal in value to 102% of the market value of the loaned
securities on the close of trading on the day preceding the date of the loan.
Upon a loan of Common Stock under the Agreement, CLP II will not have certain
incidents of ownership, including voting rights, with respect to any securities
so loaned; however, upon the request of CLP II, or upon certain other events
outlined in the Agreement, BARS must repurchase, if necessary, and return any
loan to CLP II within five business days. If for any reason BARS is unable to
purchase the shares of Common Stock necessary to return such loan, CLP II would
be permitted to look to the Collateral for satisfaction of BARS' obligations. If
CLP II were to draw upon the Collateral, the loaned securities would then be
deemed "sold." See Item 6. -- Contracts, Arrangements, Understandings or
Relationships with respect to Securities of the Issuer.
Item 5. Interest in Securities of the Issuer.
<TABLE>
<CAPTION>
Chancellor Chancellor
Abraham D. Partners Limited Partners Limited
Gosman Partnership I Partnership II CLP, Inc.
------ ------------- -------------- ---------
<S> <C> <C> <C> <C>
(a) Amount Beneficially Owned 7,727,753(1) 4,578,503 3,069,250 7,647,753(2)
Percent of Class 44.7% 26.5% 17.8% 44.3%
(b) Voting Power 4,593,135(3) 4,578,503 3,069,250 4,593,135
Dispositive Power 7,647,753 4,578,503 3,069,250 7,647,753
</TABLE>
- -------------------
(1) Mr. Gosman is deemed to have beneficial ownership of 7,727,753 shares of
Common Stock, of which (i) 7,647,753 shares are held by CLP I and CLP II,
the general partner each of which is a corporation owned and controlled by
Mr. Gosman, and (ii) 80,000 shares are subject to an option currently
exercisable by Mr. Gosman. Mr. Gosman disclaims any pecuniary interest in
the 7,612,153 shares registered in the name of CLP I and CLP II which were
contributed to the CLP I and CLP II by the Andrew and Michael Gosman.
(2) As the general partner of CLP I and CLP II, CLP, Inc. may be deemed to be
the beneficial owner of 7,647,753 shares of Common Stock of the Issuer.
(3) As the sole owner of the general partner of CLP I, Mr. Gosman has voting
power over the 4,578,503 shares held by CLP I. In addition, Mr. Gosman has
voting power over the 14,632 shares contributed to CLP II by him through
CLP, Inc.
(c) See Item 4.
(d) See Item 6.
(e) Not Applicable.
Page 8 of 10
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
(a) Restructuring of Gosman Family Securities Holdings.
Mr. Gosman, as the sole stockholder and director of the general
partner of CLP I and CLP II, has sole voting and dispositive power over all of
the shares held by CLP I and sole dispositive power over all of the shares held
by CLP II. Any profits or losses derived by either CLP I or CLP II, including
profits derived for dividends on or the capital appreciation of the shares of
the Issuer held by the partnerships are to be distributed among the partners
according to their contributions.
(b) Securities Loan Agreement.
Pursuant to the Agreement, CLP II and certain other individuals,
including an executive officer of the Company (collectively, the
"Shareholders"), have agreed severally and not jointly to loan up to an
aggregate of 1,150,000 shares of Common Stock to BARS. BARS has the right to
sell any and all Common Stock loaned under the Agreement, and its obligations
under the Agreement will be secured by the Collateral. Pursuant to the
Agreement, the Company and BARS have entered into a Registration Rights
Agreement with respect to the filing of a shelf registration statement
concerning the loaned securities. Such registration statement was declared
effective by the Securities and Exchange Commission on December 19, 1997.
During the term of any loan under the Agreement, the Shareholders will
lose certain incidents of ownership with respect to the loaned securities,
including voting rights. Each of the Shareholders have the right to terminate a
loan of his or her shares upon five business days notice, in which event BARS
must repurchase, if necessary, and return any shares that it borrowed under the
Agreement. Any shares returned may be reborrowed by BARS during the term of
the Agreement. If BARS defaults on its obligations to return all or any part of
the loaned securities, each of the Shareholders may draw on the Collateral for
the full value of such shares that have not been returned. The Agreement shall
terminate with respect to a Shareholder upon notice by the Shareholder to Union
Bank of California, the custodian of the loaned securities.
Mr. Gosman, as the owner of the corporate general partner of CLP II,
has agreed to loan up to 850,000 shares of Common Stock held by CLP II. The
other individuals who have also entered into the Agreement are Amy Beth Clary,
wife of James M. Clary, III, General Counsel, Executive Vice-President and
Secretary of the Company, Robert M. Kaufman, Chief Executive Officer of the
Company, Joel A. Kanter, former Executive Vice President of the Company, and
Frederick R. Leathers. Mr. Clary's wife is the beneficial owner of 200,500
shares of Common Stock, 100,000 shares of which she has agreed to loan under the
Agreement; Mr. Kaufman is the beneficial owner of 200,000 shares of Common
Stock, 100,000 shares of which he has agreed to loan under the Agreement; Mr.
Kanter is the beneficial owner of 180,358 shares of Common Stock, 50,000 shares
of which he has agreed to loan under the Agreement; and, Mr. Leathers is the
beneficial owner of 100,471 shares of Common Stock, 50,000 shares of which he
has agreed to loan under the Agreement.
Item 7. Material to be Filed as Exhibits.
1. Agreement of Limited Partnership of Chancellor Partners Limited
Partnership I, dated November 26, 1997.
2. Agreement of Limited Partnership of Chancellor Partners Limited
Partnership II, dated November 26, 1997.
3. Form of Securities Lending Agreement filed as an exhibit to
Registration Statement on Form S-3 (File No. 333-40015) and
incorporated by reference herein.
Page 9 of 10
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/s/ Abraham D. Gosman January 6, 1998
- --------------------------------
Abraham D. Gosman
CHANCELLOR PARTNERS LIMITED PARTNERSHIP I
By: CLP, INC., its General Partner January 6, 1998
By: /s/ Abraham D. Gosman
--------------------------------
Abraham D. Gosman, President
CHANCELLOR PARTNERS LIMITED PARTNERSHIP II
By: CLP, INC., its General Partner January 6, 1998
By: /s/ Abraham D. Gosman
--------------------------------
Abraham D. Gosman, President
CLP, INC.
By: /s/ Abraham D. Gosman January 6, 1998
--------------------------------
Abraham D. Gosman, President
Page 10 of 10
<PAGE>
EXHIBIT A
AGREEMENT
OF
LIMITED PARTNERSHIP
OF
CHANCELLOR PARTNERS LIMITED PARTNERSHIP I
Chancellor Partners Limited Partnership I (the "Partnership") hereby is
formed as a limited partnership under the laws of the State of Delaware pursuant
to this Agreement of Limited Partnership among CLP, Inc. as General Partner, and
the initial Limited Partners executing a signature page hereto. A Certificate of
Limited Partnership of the Partnership was filed with the Secretary of State of
Delaware on November 26, 1997.
Now, therefore, it is hereby agreed as of the 26th day of November, 1997 as
follows:
ARTICLE 1
DEFINED TERMS
-------------
Section 1.1. Defined Terms. The defined terms used in this Agreement shall,
unless the context otherwise requires, have the respective meanings specified in
this Section 1.1. For all purposes of this Agreement, the following definitions
are to be equally applicable to both the singular and plural forms of the terms
defined.
"Act" shall refer to the Delaware Revised Uniform Limited Partnership Act
in effect as of the date of this Agreement, and as amended from time to time.
"Additional Limited Partners" shall refer to those persons admitted to the
Partnership as Limited Partners, excluding the Original Limited Partners, in
their capacities as such.
"Affiliated Person" or "Affiliate" means, with respect to any Partner, any
other Person who is a member of the Partner's Immediate Family or a Parent, a
Subsidiary, or a Subsidiary of a Parent with respect to such Partner or a member
of the Partner's Immediate Family.
"Agreement" means this Agreement of Limited Partnership, as the same may be
hereafter amended or modified from time to time.
"Bankruptcy" means, with respect to a Partner: (a) the making of an
assignment for the benefit of such Partner's creditors; (b) the filing of a
voluntary petition in bankruptcy by such Partner; (c) adjudication of such
Partner as bankrupt or insolvent, or the entry against such Partner of an order
of relief in any bankruptcy or insolvency proceeding; (d) the filing of a
petition or answer by such Partner seeking for itself, himself, or herself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute or regulation; (e) the filing by such
Partner of an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it, him, or her in any
proceeding of this nature; or (f) seeking consent to or acquiescence in the
appointment of a
<PAGE>
trustee, receiver, or liquidator of such Partner or all or any substantial part
of its, his, or her properties.
"Capital Account" means the capital account of a Partner, maintained in
accordance with the provisions of Section 3.4 of this Agreement.
"Capital Contribution" means, with respect to any Partner, the total amount
of cash and fair market value of property contributed to the Partnership by such
Partner.
"Cash Flow" means, with respect to any fiscal period, cash receipts
(excluding Capital Contributions) of the Partnership from all sources during
such fiscal period less (i) all cash expenditures of the Partnership during such
fiscal period including, without limitation, debt service, repayment of advances
made by any Partner, and fees for management services, (ii) such reasonable
reserves as may be determined by the General Partner in its sole discretion (but
not less than any reserves required by the terms of any indebtedness of the
Partnership) as necessary to provide for the foreseeable needs of the
Partnership, and (iii) income from assets or proceeds from the sale or exchange
of any assets of the Partnership which the General Partner determines to
reinvest or hold for investment on behalf of the Partnership, in its sole
discretion.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).
"Consent of the Limited Partners" means the prior written consent of
Limited Partners who hold in the aggregate more than 50% of the Interests of all
Limited Partners.
"Entity" means any general partnership, limited partnership, corporation,
trust, business trust, limited liability company or partnership, cooperative or
association or any other form which is a legal entity under applicable law.
"Fiscal Year" means the fiscal year of the Partnership established in
Section 9.2.
"General Partner" means CLP, Inc., a Delaware corporation, and any
Substituted General Partners.
"Immediate Family" means, with respect to any Partner, his or her spouse,
children, grandchildren, the spouses of any of the foregoing or trusts for their
benefit.
"IRS" means the Internal Revenue Service.
"Limited Partners" shall refer to the Original Limited Partners, any
Additional Limited Partners, and any Substituted Limited Partners listed as such
in the books and records of the Partnership who shall, from time to time, be
limited partners of the Partnership.
-2-
<PAGE>
"Net Loss" means, with respect to any Fiscal Year, the net loss of the
Partnership, if any, for such year as determined in accordance with the
Partnership's accounting methods.
"Net Profit" means, with respect to any Fiscal Year, the net income of the
Partnership, if any, for such year as determined in accordance with the
Partnership's accounting methods.
"Notification" means a written notice containing the information required
by this Agreement to be communicated to any Person and sent by registered,
certified or first-class mail to such Person at the last known address of such
Person; provided, however, that any communication containing such information
actually received by such Person shall constitute Notification.
"Original Limited Partners" has the meaning set forth in Section 3.2.
"Parent" means, with respect to any Entity, any Person which (A) owns
directly, or indirectly through one or more Entities, fifty percent (50%) or
more of the voting or beneficial interest in such Entity or (B) otherwise has
the right or power, whether through ownership of securities, rights under
agreements or otherwise, to control such Entity.
"Partners" means, collectively, the Limited Partners, as constituted from
time to time, and the General Partners.
"Partnership Interest" or "Interest" means the entire interest of a Partner
in the Partnership at any particular time, including the right of such Partner
to any and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all the
terms and conditions of this Agreement and also shall include such interests,
rights and obligations in any successor partnership formed pursuant to this
Agreement.
"Percentage Interest" means a Partner's Interest expressed as a total of
all Partnership Interests. Each Partner's Percentage Interest shall be set forth
on Schedule A to this Agreement as the same may be amended from time to time.
"Person" means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such individual
or Entity where the context so admits.
"Profits" and "Losses" means taxable income and losses, and each item of
income, gain, loss, deduction or credit entering into the computation thereof,
as determined in accordance with the accounting methods followed by the
Partnership for Federal income tax purposes.
"Subsidiary" means, with respect to any Person, (A) any Entity in which
such Person owns directly, or indirectly through one or more Entities, fifty
percent (50%) or more of the voting or beneficial interest or (B) any Entity
which such Person otherwise has the right or
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power to control, whether through ownership of securities, rights under
agreements or otherwise.
"Substituted General Partner" means any Person admitted to the Partnership
as a General Partner pursuant to the provisions of Section 6.5 and who is listed
as such in the books and records of the Partnership.
"Substituted Limited Partner" means any Person admitted to the Partnership
as a Limited Partner pursuant to the provisions of Section 7.2 and who is listed
as such in the books and records of the Partnership.
"Transfer" or "Transferred" or any other capitalized grammatical variation
thereof, unless otherwise specifically provided, refers to the sale, exchange,
assignment, distribution (upon liquidation or otherwise), encumbrance,
hypothecation, gift, pledge, transfer or other disposition or alienation,
whether absolute, contingent or collateral, in any way, of all or any part of an
Interest in the Partnership, including any transfer incident to a divorce or
separation, except any pledge or other hypothecation effected for the purpose of
securing borrowings of the Partnership which have been approved by the General
Partner.
ARTICLE 2
NAME, PLACE OF BUSINESS, PURPOSE AND TERM
-----------------------------------------
Section 2.1. Name and Office.
The name of the Partnership shall be Chancellor Partners Limited
Partnership I. The principal office of the Partnership shall be located at , or
at such other place as the General Partner may from time to time determine. The
resident agent for service of process is Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware 19801.
Section 2.2. Purposes.
The Partnership has been formed for the purpose of providing a more
efficient and clearly defined vehicle for management by the General Partner of
property contributed to the Partnership and of voting certain securities
contributed to the Partnership. The purposes of the Partnership shall be to (a)
to engage in the business of buying, selling, investing and trading in stocks,
bonds, real estate, securities and other investments, including but not limited
to newly formed private companies, closely held partnerships, corporations,
limited liability companies, or other business ventures, and to engage in any
other business or activities incidental or related to the foregoing, and (b) to
engage in any business or activity which may be lawfully carried on by a limited
partnership under the provisions of Delaware law. The Partnership may engage
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in any activity related to the foregoing purposes and will not engage in any
other business or activity without the Consent of the Limited Partners.
Section 2.3. Authority of the Partnership.
In order to carry out its purposes and not in limitation thereof, the
Partnership is empowered and authorized to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of its purposes, and for the protection and
benefit of the Partnership, as permitted under the Act.
Section 2.4. Term.
The term of the Partnership shall continue in full force until dissolution
of the Partnership pursuant to the provisions of Article 8.
ARTICLE 3
PARTNERS AND CAPITAL
--------------------
Section 3.1. General Partner.
The original General Partner of the Partnership is CLP, Inc., a Delaware
corporation.
Section 3.2. Original Limited Partners.
Upon execution and delivery of this Agreement, the Persons executing
counterpart copies of this Agreement in their capacity as the initial Limited
Partners upon payment for their Interest in the Partnership will be the original
Limited Partners ("Original Limited Partners").
Section 3.3. Additional Limited Partners.
The General Partner may, from time to time, admit one or more Persons as
Additional Limited Partners on such terms and conditions as the General Partner
may determine. No person shall be deemed to be admitted as a Limited Partner
until the General Partner accepts such Person as a Limited Partner of the
Partnership, the books and records reflect such Person as admitted to the
Partnership as a Limited Partner, and such Person has executed a counterpart of
this Agreement and paid any Capital Contribution required as a condition to
admission.
Section 3.4. Capital Accounts.
A. The Partnership shall maintain a separate capital account for each
Partner. Each Partner's initial Capital Account balance shall equal such
Partner's initial contribution to the capital of the Partnership. Each Partner's
Capital Account shall thereafter be increased by (i)
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any cash or the fair market value of any property thereafter contributed by such
Partner (net of liabilities assumed by the Partnership and liabilities to which
such contributed property is subject), (ii) the amount of any Partnership
liabilities that are assumed by such Partner, and (iii) such Partner's
distributive share of the Partnership's income and gain (or items thereof). Each
Partner's Capital Account shall be decreased by (i) such Partner's distributive
shares of the Partnership's loss and deductions (or items thereof), (ii) the
amount of such Partner's individual liabilities that are assumed by the
Partnership, (iii) such Partner's share of expenditures of the Partnership
described in Section 705(a)(2)(B) of the Code, and (iv) the amount of cash or
the fair market value of any property distributed by the Partnership to such
Partner (net of liabilities assumed by such Partner and liabilities to which
such distributed property is subject). Other appropriate adjustments to each
Partner's Capital Account shall also be made from time to time, in accordance
with the rules set forth in applicable regulations under Section 704 of the Code
or the requirements of any other applicable proposed, final or temporary
regulations thereunder, including, without limitation, adjustments resulting
from increases or decreases to Capital Accounts following revaluations of
Partnership property pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(f). It is the intent of the Partners that the Capital Accounts
shall be determined and maintained in accordance with said Code section and said
regulations, and this Section 3.4 shall be construed in a manner consistent
therewith. Each Partner shall have a single Capital Account that reflects all
his, her or its Interests in the Partnership. No Partner shall be entitled to
interest on his, her or its Capital Account or on any Capital Contribution.
B. Except as may be specifically provided herein, no Partner shall have the
right to withdraw all or any part of his, her or its Capital Contribution from
the Partnership. No Partner shall have any right to demand or receive property
or cash of the Partnership in return of his, her or its Capital Contribution
except as may be specifically provided in this Agreement.
C. The original Capital Account established for any Substituted General or
Limited Partner shall be in the same amount as, and shall replace, the Capital
Account of the Partner which such Substituted General or Limited Partner
succeeds, and, for the purposes of this Agreement, such Substituted General or
Limited Partner shall be deemed to have made the Capital Contribution, to the
extent actually paid in, of the Partner which such Substituted General or
Limited Partner succeeds. To the extent a Substituted General or Limited Partner
receives less than 100% of the Interest in the Partnership of a Partner he, she
or it succeeds, the original Capital Account and Capital Contribution of such
Substituted General or Limited Partner shall be in proportion to the Interest
he, she or it receives, and the Capital Account and Capital Contribution of the
Partner who retains a partial Interest in the Partnership shall be in proportion
to the Interest he, she or it retains.
Section 3.5. Liability of the Limited Partners; Additional Capital
Contributions.
Except as otherwise required by this Agreement or the Act, no Limited
Partner shall be liable for any debts, liabilities, contracts or any other
obligations of the Partnership. Except as otherwise required by this Agreement
or the Act, a Limited Partner has no liability in excess of the amount of
contributions that he, she or it is obligated to make to the Partnership and
his, her
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or its share of the Partnership's assets and undistributed profits. No Limited
Partner shall be required to lend any funds to the Partnership or, after his,
her or its Capital Contribution has been paid, to make any further Capital
Contributions to the Partnership.
Section 3.6. Liability of the General Partner.
Except as provided in the Act, the General Partner has the liabilities
of a partner in a partnership without limited partners to all Persons, including
the Partnership and the other Partners. This Agreement shall not be amended to
limit such liability of the General Partner.
ARTICLE 4
DISTRIBUTIONS: ALLOCATIONS OF PROFITS AND LOSSES
------------------------------------------------
Section 4.1. Distributions of Cash Flow.
Cash Flow with respect to each Fiscal Year shall be distributed at the
discretion of the General Partner, at such times as the General Partner deems
appropriate. The General Partner shall have the discretion to distribute Cash
Flow for any Fiscal Year to the Partners or to any of them without regard to
their Percentage Interests; provided, however, that all distributions of Cash
Flow to Partners shall be appropriately reflected as adjustments to their
Capital Accounts as provided in Section 3.4A hereof, and that no distribution of
Cash Flow shall be made to a Partner if such distribution would cause or
increase a deficit balance in such Partner's Capital Account.
Section 4.2. Allocation of Net Profits and Losses from Operations.
Except as otherwise provided in Sections 4.3, 4.4, and 4.5 hereof, and
subject to the provisions of Section 7.3 hereof, the Net Profit or Net Loss as
of the end of any Fiscal Year shall be allocated among all the Partners in
accordance with their Percentage Interests.
Section 4.3. Allocation of Gains from Sales.
Subject to the provisions of Sections 4.5 and 7.3 hereof, any gain from a
sale of Partnership property shall be allocated as follows:
(a) There shall first be allocated to each Partner with a deficit in his,
her or its Capital Account an amount of such gain sufficient to bring his, her
or its Capital Account to zero. If such gain shall be insufficient to bring to
zero the Capital Accounts of all Partners with deficits in their Capital
Accounts, then such gain shall be allocated to those Partners with deficits in
their Capital Accounts in proportion to their respective deficit Capital Account
balances.
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(b) The balance, if any, of such gain shall be allocated to the Partners in
proportion to their Percentage Interests.
Section 4.4. Allocation of Losses from Sale.
Subject to the provisions of Sections 4.5 and 7.3 hereof, any loss from a
sale of Partnership property shall be allocated as follows:
(a) There shall first be allocated to each Partner with a positive Capital
Account an amount of such loss sufficient to reduce his, her or its Capital
Account to zero. If such loss shall be insufficient to reduce to zero the
Capital Accounts of all Partners with positive Capital Accounts, then such loss
shall be allocated to those Partners with positive Capital Accounts in
proportion to their respective positive Capital Account balances.
(b) The balance, if any, of such loss shall be allocated to Partners in
proportion to their Percentage Interests.
Section 4.5. Allocations With Respect to Contributed Property.
Notwithstanding any other provision of this Agreement to the contrary,
items of income, gain, loss, and deduction with respect to property contributed
to the Partnership by any Partner shall be allocated among the Partners so as to
take into account the variation between the basis of the property to the
Partnership and its fair market value at the time of contribution in accordance
with the requirements of Section 704(c) of the Code and applicable Regulations
thereunder.
ARTICLE 5
RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER
------------------------------------------------
Section 5.1. Management of the Partnership.
A. Except as otherwise expressly limited by the provisions of this
Agreement, the General Partner shall have exclusive discretion in the management
and control of the business and affairs of the Partnership and all powers
necessary, convenient, and appropriate to carry out the purposes, conduct the
business and exercise the powers of the Partnership, and it is hereby authorized
to take any action of any kind and to do anything and everything it deems
necessary or appropriate in accordance with the provisions of this Agreement and
to the extent permitted by Delaware law. If there is more than one General
Partner, the General Partners shall act by a majority of their Percentage
Interest as General Partners.
B. No Limited Partner shall participate in or have any control whatsoever
over the Partnership's business or have any authority or right to act for or
bind the Partnership. Each
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Limited Partner hereby consents to the exercise by the General Partner of the
thfers conferred on it by this Agreement.
C. Except to the extent otherwise provided herein, the General Partner is
hereby authorized without the Consent or approval of the Limited Partners to:
(i) execute or amend any and all agreements, contracts, documents,
certifications and instruments necessary or convenient for the efficient
conduct and operation of the Partnership's business;
(ii) prepay in whole or in part, recast, modify or extend any debt,
and in connection therewith to execute any extensions, consolidations,
modifications or renewals of debt obligations;
(iii) borrow funds from lenders, including Partners, to fund the
operations of the Partnership, on such terms as the General Partner may
negotiate;
(iv) deal with, or otherwise engage in business with, any Person who
has provided or may in the future provide any services, lend money or sell
property to or purchase from a Partner or any Affiliate of a Partner. The
General Partner may enter into agreements on behalf of the Partnership,
employ agents, attorneys, accountants, appraisers, or other consultants or
contractors who may be Affiliates of a Partner, and may enter into
agreements to employ Affiliates of a Partner to provide further or
additional services to the Partnership;
(v) engage in any kind of activity and perform and carry out contracts
of any kind necessary to, or in connection with, or incidental to the
accomplishment of the purposes of the Partnership, as may be lawfully
carried on or performed by a partnership under the laws of the State of
Delaware and in each state where the Partnership has been qualified to do
business;
(vi) satisfy any and all Partnership obligations for which any General
Partner is personally liable before satisfying Partnership obligations as
to which the General Partner has no such personal liability;
(vii) make an election, or revocation of an election, on behalf of the
Partnership under Section 754 of the Code;
(viii) invest and reinvest in bonds, notes, debentures, shares of
stock, mutual fund shares, life insurance, annuities, mortgages, commercial
papers, interests in limited partnerships or limited liability companies,
certificates of deposit, and interest-bearing savings accounts;
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(ix) sell, trade, and deal in stocks, bonds, and securities of every
nature, including puts and calls, on margin or otherwise, including short
selling and, in connection therewith, to borrow money and to pledge any and
all stocks, bonds and securities; to authorize any broker to lend
separately or together with the property of others, to itself or others,
any property which the broker may be carrying for the Partnership on
margin.
(x) borrow from any Limited Partner or lend funds of the Partnership
to any Limited Partner on such terms as it shall determine in its
discretion.
D. Except as provided below, or as otherwise expressly provided in this
Agreement, all decisions concerning the management of the Partnership's
investments and its day-to-day management shall be made solely by the General
Partner. Specifically, but not by way of limitation, the General Partner shall
be authorized:
(i) to cause to be paid on or before the due date thereof all amounts
due and payable by the Partnership to any Person or Entity; and
(ii) to employ such agents, employees, managers, accountants,
attorneys, consultants and other Persons, including any General Partner,
necessary or appropriate to carry out the business and affairs of the
Partnership, whether or not any such Persons so employed are Affiliated
Persons of, or related to, any Partner, and to pay such fees, expenses,
salaries, wages and other compensation to such Persons as it shall in its
sole discretion determine.
E. With respect to all of its obligations, powers and responsibilities
under this Agreement, the General Partner is authorized to execute and deliver,
for and on behalf of the Partnership, such instruments and agreements as it
deems proper, all on such terms and conditions as the General Partner deems
proper.
F. Any Person dealing with the Partnership or the General Partner may rely
upon a Certificate signed by the General Partner:
(i) as to the identity of the General Partner or Limited Partners
hereunder;
(ii) as to the existence or non-existence of any fact or facts which
constitute conditions precedent to acts by the General Partner or in any
other manner germane to the affairs of the Partnership;
(iii) as to who is authorized to execute and deliver any instrument or
document on behalf of the Partnership;
(iv) as to the authenticity of any copy of this Agreement and
amendments thereto; or
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(v) as to any act or failure to act by the Partnership or as to any
other matter whatsoever involving the Partnership or any Partner.
Section 5.2. Restrictions on Authority of the General Partner.
A. Notwithstanding any other provisions of this Agreement, the General
Partner shall have no authority to do any act required to be approved or
ratified by the Limited Partners under the Act or as set forth in Section 5.2B.
B. Without the Consent of the Limited Partners, the General Partner shall
have no authority on behalf of the Partnership to:
(i) do any willful act in contravention of this Agreement or the Act;
(ii) convert property of the Partnership to its own use, or assign any
rights in specific property of the Partnership for other than a purpose of
the Partnership;
(iii) perform any act that would subject any Limited Partner to
liability as a general partner in any jurisdiction or impose any other
liability on a Limited Partner except as provided for herein or under the
Act;
(iv) admit any Person as an Additional General Partner;
(v) make any election to discontinue, liquidate or dissolve the
Partnership; or
(vi) make any election, or take any other willful action, to cause the
Partnership to be treated as an association taxable as a corporation for
income tax purposes.
Section 5.3. Duties and Obligations of the General Partner - General.
A. The General Partner shall diligently and faithfully use its best efforts
to conduct the affairs of the Partnership in accordance with this Agreement, the
Act and other applicable Delaware law.
B. The General Partner shall take such action as may be necessary or
appropriate in order to form or qualify the Partnership under the laws of any
jurisdiction in which the Partnership is doing business or owns property or in
which such formation or qualification is necessary in order to protect the
limited liability of the Limited Partners or in order to continue in effect such
formation or qualification. The General Partner shall take all other action
necessary to perfect and maintain the Partnership as a limited partnership under
the laws of the State of Delaware and (if and to the extent required by
applicable law) to amend the Certificate of Limited Partnership from time to
time.
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C. The General Partner shall prepare or cause to be prepared and shall file
on or before the due date (including any extension thereof) any Federal, state
or local tax returns required to be filed by the Partnership. The General
Partner shall cause the Partnership to pay any taxes payable by the Partnership.
D. The General Partner shall be under a duty to conduct the affairs of the
Partnership in good faith and in accordance with the terms of this Agreement and
in a manner consistent with the purposes of the Partnership.
Section 5.4. Compensation of General Partner - General.
The General Partner as the general partner of the Partnership shall be
entitled to reasonable compensation for its services and reimbursement for
expenses reasonably incurred in managing the Partnership.
Section 5.5. Other Business of Partners.
Nothing contained in this Agreement shall be construed or shall operate to
limit any Partner or any Affiliate of a Partner from directly or indirectly
engaging, independently or with others in any business which is or may be
competitive with the business of the Partnership. Each of the Partners,
including the General Partner, and Affiliated Persons shall be free to engage in
any business whatsoever, including any business within the purposes of the
Partnership, and neither the Partnership nor any Partner shall have any right by
virtue of this Agreement or the partnership relationship created hereby in such
other business or to the income or proceeds derived therefrom. Nothing in this
Agreement shall be deemed to prohibit any Partner or any Affiliate of a Partner
from dealing or otherwise engaging in business with the Partnership or with
Persons transacting business with the Partnership, or from providing services
relating to the purchase, sale, financing, management, development or operation
of any venture or activity of any nature whatsoever. Neither the Partner nor any
Affiliated Person of a Partner shall be obligated to present any particular
business opportunity to the Partnership, even if such opportunity is of a
character which could be taken by the Partnership.
Section 5.6. Limitation of Liability of General Partner; Indemnification.
A. A General Partner shall not be liable under this Agreement to the
Partnership or any Limited Partner because any taxing authority disallows or
adjusts any deductions or credits of the Partnership or otherwise adjusts any
Partner's income tax return unless such action by the taxing authority is due to
a course of conduct by the General Partner constituting gross negligence,
material misrepresentation, willful misconduct, or material breach of fiduciary
duty. The General Partner shall not be liable for the return of the Capital
Contributions of the Limited Partners or for any portion thereof, it being
expressly understood that any return of capital shall be made solely from the
assets of the Partnership.
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B. Each of the General Partner and any Affiliate providing services to the
Partnership shall be indemnified by the Partnership against any losses,
judgments, liabilities, expenses and amounts paid in settlement of any claims
sustained by it in connection with its duties as the General Partner of the
Partnership, or in the provision of services to the Partnership, respectively,
provided that the same were not the result of a course of conduct constituting
misconduct, gross negligence, material misrepresentation or material breach of
fiduciary duty. Any indemnity under this Section shall be provided out of and to
the extent of Partnership assets only, and no Limited Partner shall have any
personal liability on account thereof.
C. No General Partner shall be liable for damages or otherwise to the
Partnership or to any Partner for any act within the scope of the authority
conferred under this Agreement or for any failure to act, provided that such
General Partner in good faith determines that such course of conduct was in the
best interest of the Partnership and such course of conduct did not constitute
willful misconduct, gross negligence, material misrepresentation or material
breach of fiduciary duty.
D. The General Partner shall have no liability or responsibility hereunder
to make loans, advances or additional Capital Contributions to the Partnership,
except as expressly provided in this Agreement, or except as may otherwise be
provided as a matter of law. However, to the extent a General Partner advances
any funds to meet any liabilities or obligations of the Partnership, any such
advances shall be deemed loans to the Partnership by the General Partner and
shall accrue interest at the Prime Rate as printed in the Wall Street Journal on
the first business day of each month, payable in arrears on the first day of
each fiscal quarter of the Partnership, and such amounts shall be due and
payable on the earliest date that funds are available for repayment from
available Cash Flow, liquidation or dissolution of the Partnership, or the sale
or refinancing by the Partnership of any of its properties and the receipt by
the Partnership of the proceeds of such sale or refinancing.
E. In the event that any action, suit or proceeding is instituted against a
General Partner or any Affiliate of a General Partner with respect to the
business, assets, liabilities or activities of the Partnership, the General
Partner or such Affiliate may, at Partnership expense, obtain separate legal
counsel and other expert assistance to defend or assist in defending any action,
suit or proceeding, provided the legal action relates to the performance of
duties or services by the General Partner or Affiliate on behalf of the
Partnership, the legal action is initiated by a third party who is not and has
never been a Partner of the Partnership, and the General Partner or the
Affiliate undertakes to repay the advanced funds to the Partnership, without
interest, if it is determined that the General Partner or Affiliate is not
entitled to indemnification. Such General Partner or Affiliate shall have
advanced to them by the Partnership, at their request, funds for payment of all
expenses and costs reasonably incurred in connection with the defense of any
such action or suit. The General Partner or the Affiliate shall not be advanced
funds for legal expenses and other related costs incurred as a result of any
legal action initiated by a Partner or former Partner or the Partnership against
the General Partner or an Affiliate.
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Section 5.7. Tax Matters Partner.
A. The General Partner shall serve as the Tax Matters Partner of the
Partnership, as provided in Treasury Regulations promulgated under Section 6231
of the Code. Each Partner hereby approves of such designation and agrees to
execute, acknowledge, and deliver such documents as may be deemed necessary or
appropriate to evidence such approval.
B. To the extent and in the manner provided by applicable Code sections and
Regulations thereunder, the Tax Matters Partner shall perform all duties and
functions required by law as such Tax Matters Partner.
ARTICLE 6
WITHDRAWAL OF GENERAL PARTNER
-----------------------------
Section 6.1. Limitation on Voluntary Withdrawal.
A General Partner may not withdraw voluntarily from the Partnership. Except
as expressly provided otherwise in this Agreement, a General Partner shall not
sell, transfer or assign his, her or its Interest or any portion thereof, unless
required to do so pursuant to the terms of any loan documents or other
instruments or agreements to which the Partnership is or shall become a party.
Section 6.2. Death, Incapacity or Bankruptcy of a General Partner.
In the event of the death, incapacity or Bankruptcy of a General Partner,
or dissolution of a corporate General Partner, or in the event that a creditor
of a General Partner should attach or otherwise obtain an interest in that
General Partner's Interest in the Partnership, the General Partner shall
immediately cease to be a General Partner and his, her or its Interest shall
automatically and without further action by the Partnership be converted to a
Limited Partner Interest for the same Percentage Interest.
Section 6.3. Distributions to Withdrawn General Partner.
Subject to the maintenance of adequate reserves by the General Partner, in
the event of the withdrawal of a General Partner for any reason, such General
Partner or such General Partner's legal representative shall be entitled to
receive from the Partnership any positive balance in such General Partner's
Capital Account attributable to his or her or its General Partner's Interest
adjusted to the date of withdrawal.
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Section 6.4. Liability of Withdrawn General Partner.
If a General Partner shall cease to be a general partner of the
Partnership, he or she or it shall be and shall remain liable for all
obligations and liabilities incurred on account of activities of the Partnership
prior to or at the time he or she or it ceased to be a General Partner, but
shall be free of any obligation or liability incurred on account of the
activities of the Partnership after the time he or she or it ceased to be a
General Partner.
Section 6.5. Substituted General Partners.
In the event of the withdrawal of the sole remaining General Partner for
any reason, (including dissolution, death, incapacity, or bankruptcy) the
Limited Partners may elect to continue the Partnership. The Partnership will not
dissolve if a majority in Interest of the Limited Partners elect in writing
within 90 days of such withdrawal to continue the Partnership and, if necessary,
to appoint one or more Substitute General Partners effective as of the
withdrawal of the retiring General Partner.
ARTICLE 7
ASSIGNABILITY OF LIMITED PARTNERSHIP INTERESTS; REDEMPTION
----------------------------------------------------------
Section 7.1. Restrictions on Withdrawals and Assignments.
No Limited Partner may withdraw voluntarily from the Partnership during the
term of the Partnership. Except as otherwise expressly permitted in this
Agreement, no Limited Partner shall have the right to assign his, her or its
Interest except with the written consent of the General Partner, which consent
is exclusively within the discretion of the General Partner, and if the proposed
transferor is also the sole General Partner, with the consent of a majority in
Interest of the non-assigning Limited Partners, which consent is wholly within
the discretion of the non-assigning Limited Partners. Except as otherwise
expressly permitted in this Agreement, any attempt to assign without the express
written consent of the General Partner or the non- assigning Limited Partners,
as the case may be, shall be void and ineffectual and shall not bind the
Partnership. Further:
A. No assignment of any Interest may be made pursuant to a sale or exchange
if the Interest sought to be assigned, when added to the total of all other
Interests assigned pursuant to a sale or exchange within a period of twelve (12)
consecutive months prior thereto would, in the opinion of legal counsel for the
Partnership, result in the Partnership's termination within the meaning of
Section 708 of the Code, unless the Partnership shall have first received an
opinion from tax counsel satisfactory to the Partnership that such a termination
would have no adverse tax impact on the Partnership or any Partner.
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B. The General Partner may require that any assignment of an Interest in
the Partnership be made only if the assignor or assignee provides an opinion of
counsel that such assignment would not require filing of a registration
statement under the Securities Act of 1933 or would otherwise not be in
violation of any Federal or state securities laws (including any investment
suitability standards) applicable to the Partnership.
C. No assignment shall be made to a minor or incompetent (unless a
guardian, custodian or conservator has been appointed).
D. No assignment shall be made to a person not permitted to be a transferee
under law (including applicable securities law).
Section 7.2. Assignees and Substituted Limited Partner.
A. The death, dissolution or Bankruptcy of a Limited Partner in and of
itself shall not dissolve the Partnership.
B. Where the General Partner or the non-assigning Limited Partners, as the
case may be, have consented to an assignment of an Interest, the Partnership
need not recognize such assignment for any purpose unless there shall have been
filed with the Partnership a duly executed counterpart of the instrument making
such assignment signed by both the assignor and the assignee which evidences the
written acceptance by the assignee of his, her, or its agreement to be bound by
all of the terms and provisions of this Agreement and represents that such
assignment was made in accordance with all applicable laws and regulations
(including investment suitability requirements).
C. If a Limited Partner assigns all of his, her or its Interest, he, she or
it shall cease to be a Limited Partner of the Partnership, but the assignee of
such Interest shall not become a Limited Partner unless and until such assignee
is admitted as a Substituted Limited Partner pursuant to Section 7.2D.
D. Any person who is an assignee of any of the Interests of a Limited
Partner shall become a Substituted Limited Partner when the General Partner
shall have accepted such Person as a Limited Partner of the Partnership, the
books and records of the Partnership reflect such Person as admitted to the
Partnership as a Limited Partner, such person has satisfied the requirements of
Section 7.1, Section 7.2B and Section 11.1A, and when such Person shall have
paid all reasonable legal fees and filing costs incurred by the Partnership in
connection with his, her or its substitution as a Limited Partner; provided,
however, that the General Partner's consent to the substitution of any assignee
of an Interest as a Substituted Limited Partner may be granted or withheld in
its sole discretion.
E. Any Person who is the assignee of any of the Interest of a Limited
Partner but who does not become a Substituted Limited Partner and desires to
make a further assignment
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of any such Interest shall be subject to all the provisions of this Article
Seven to the same extent and in the same manner as any Limited Partner desiring
to make an assignment of the Interest.
Section 7.3. Allocations Subsequent to Transfer.
In the event of the admission or withdrawal of a Limited Partner, or in the
event all or any part of a Partnership Interest is validly transferred under the
terms of this Article 7, all Partnership items allocated under Article 4 hereof
shall be further allocated based upon the ownership of the respective
Partnership Interests prior to and following the effective date of such
admission, withdrawal or transfer in a manner consistent with the requirements
of Section 706 of the Code.
Section 7.4. Liquidation of a Partner's Interest.
In the event there is a liquidation of any Partner's Partnership Interest,
for purposes of Regulation Section 1.704-1 under Code Section 704 (prior to
dissolution or liquidation of the Partnership as provided in Article 8 hereof),
liquidating distributions, if any, shall be made to such Partner in the ratio
that the positive balance, if any, in such Partner's Capital Account, after
taking into account all Capital Account adjustments provided for in Section 3.4
hereof (other than those made as a result of any such liquidating
distributions), bears to the aggregate positive Capital Account balances (as so
adjusted) of all Partners. Such liquidating distributions shall be made no later
than the end of the taxable year during which such liquidation takes place or,
if later, within 90 days after the date of such liquidation.
ARTICLE 8
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
----------------------------------------------
Section 8.1. Events Causing Dissolution.
A. The business of the Partnership shall continue upon the withdrawal of a
General Partner if there is at least one other General Partner at that time.
B. The Partnership shall be dissolved on the first to occur of the
following events:
(i) the entry of an order for relief with respect to the Partnership
in the U.S. Bankruptcy Court;
(ii) the withdrawal, dissolution, removal, death, adjudication of
incompetency, or Bankruptcy of the last remaining General Partner, unless
the Partnership is continued pursuant to Section 6.5;
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<PAGE>
(iii) the decision of the General Partner to liquidate the
Partnership, with the written consent of Limited Partners who then own more
than two-thirds of the Percentage Interests owned by all of the Limited
Partners; or
(iv) the withdrawal, removal, death, adjudication of incompetency, or
Bankruptcy of the last remaining Limited Partner, unless within 90 days
after the occurrence of such event the personal representative of the last
Limited Partner and all of the General Partners agree in writing to
continue the business of the Partnership and to admit the personal
representative of such Limited Partner (or its nominee or designee) as a
Limited Partner, effective as of the occurrence of such event.
Dissolution of the Partnership shall be effective on the day on which the
event occurs giving rise to the dissolution. The Partnership shall not be
terminated until the assets of the Partnership shall have been distributed as
provided in Section 8.2. Notwithstanding the dissolution of the Partnership,
prior to the termination of the Partnership, as aforesaid, the business of the
Partnership and the affairs of the Partners as such shall continue to be
governed by this Agreement.
C. Partners shall look solely to the assets of the Partnership for all
distributions with respect to the Partnership and their Capital Contribution
thereto, and shall have no recourse therefor (upon dissolution or otherwise)
against any General Partner, any Affiliate of a Partner, or any Limited Partner.
Section 8.2. Liquidation.
A. Upon the dissolution of the Partnership, its affairs shall be wound up
and it shall be liquidated and the proceeds of such liquidation and the
Partnership's other assets shall be distributed as follows:
(i) All of the Partnership's ascertained debts and liabilities to
creditors, including Partners, shall be paid and discharged in the order
provided by applicable law.
(ii) A reserve shall be set aside in an amount reasonably required in
the judgment of the General Partner to provide for contingent or other
liabilities of the Partnership.
(iii) The Partnership's Net Profit or Net Loss (including without
limitation any gain or loss resulting from any sales or other dispositions
of Partnership property in connection with the liquidation of the
Partnership) shall be computed and shall be allocated to the Partners in
accordance with Article 4 hereof, and the Partners' Capital Accounts shall
be adjusted in accordance with Section 3.4 hereof.
(iv) Distribution shall be made to the Partners, in liquidation of the
Partnership Interests of all of the Partners, to those Partners with
positive Capital Account balances,
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<PAGE>
after taking into account all Capital Account adjustments provided for in
Section 3.4 hereof (other than those made as a result of any such
liquidating distributions) in the ratios of such positive Capital Account
balances, as so adjusted.
(v) The remainder of the Partnership assets, if any, shall be
distributed to the Partners in accordance with their Percentage Interests.
(vi) Each Partner shall receive his, her or its share of such
distributions in cash and/or in kind, and the portion of such share that is
received in cash may vary from Partner to Partner, all as the General
Partner may in his sole discretion determine.
Notwithstanding the foregoing, if any assets of the Partnership are to
be distributed in kind, such assets shall be distributed on the basis of
the fair market value thereof, and any Partner entitled to any interest in
such assets shall receive such interest therein as a tenant-in-common with
all other Partners so entitled. If any asset is to be distributed in kind,
the Partner's Capital Accounts shall be adjusted as provided in Section 3.4
hereof (consistent with the requirements of Regulations under Sections
704(b) and 704(c) of the Code) before any such distribution is made to
reflect the increases or decreases to said Capital Accounts which would
have occurred if such asset to be distributed in kind had been sold for its
fair market value by the Partnership immediately prior to such
distribution. All such liquidating distributions shall be made by the end
of the taxable year of the Partnership in which there is a liquidation of
the Partnership for purposes of Paragraphs (b)(2)(ii)(b) and (b)(2)(ii)(g)
of Regulation Section 704 or, if later, within 90 days after the date of
such liquidation.
(vii) As soon as practicable, the remaining balance, if any, of the
reserve established in accordance with Subparagraph (ii) hereof shall be
distributed to the Partners in the manner set forth herein.
B. Distribution of cash or property to the Partners in accordance with the
provisions of Paragraph A hereof shall constitute a complete return to the
Partners of their respective Partnership Interests in the Partnership assets.
C. The winding up of the Partnership's affairs and the liquidation and
distribution of its assets shall, subject to the provisions of the Act, be
conducted exclusively by the General Partner, who is authorized to do any and
all acts authorized by law for these purposes. When the General Partner has
complied with the foregoing liquidation plan, the Partners shall execute,
acknowledge, and cause to be filed an instrument evidencing the cancellation of
the Certificate of Limited Partnership of the Partnership.
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<PAGE>
ARTICLE 9
BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS, ETC.
-----------------------------------------------------------
Section 9.1. Books and Records.
The books and records of the Partnership shall be maintained by the General
Partner in accordance with applicable law at the principal office of the
Partnership and shall be available for examination at such location by any
Partner or such Partner's duly authorized representative at any and all
reasonable times for any purpose reasonably related to the Partner's interest in
the Partnership.
Section 9.2. Accounting and Fiscal Year.
The books of the Partnership shall be maintained in accordance with
accounting methods employed for federal income tax reporting purposes. The
Fiscal Year of the Partnership shall end December 31 of each year, unless
otherwise required by Section 706 of the Code.
Section 9.3. Bank Accounts and Investments.
The funds of the Partnership shall be held in the name of the Partnership.
These funds shall be deposited in the name of the Partnership in such bank
accounts in such banking institutions as the General Partner shall determine,
and withdrawals therefrom shall be made only in the regular course of
Partnership business on such signature or signatures as the General Partner
shall determine. The funds of the Partnership shall not be commingled with the
funds of any other Person.
Section 9.4. Reports.
The General Partner shall deliver to the Limited Partners with respect to
each Fiscal Year no later than the date prescribed for filing such information
as shall be necessary for the preparation of Partner' Federal, State or other
income tax returns.
ARTICLE 10
MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS
----------------------------------------------
Section 10.1. Meetings.
A. Meetings of the Partnership may be called by the General Partner for any
purpose. Notification of any such meeting shall be sent to all Partners. Any
matter requiring the Consent of the Limited Partners under this Agreement may be
considered at a meeting of the Partners held not less than twenty nor more than
sixty days after Notification of that meeting has been given by the General
Partner to all Partners. Notification (a) may be given by the General Partner,
in its discretion, at any time; and (b) will be given by the General Partner
within thirty days after receipt by the General Partner of a request for such a
meeting made by Limited Partners who hold in the aggregate more than 50% of the
Interests of all Limited Partners. Any
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<PAGE>
Notification will state briefly the purpose, time, and place of the meeting.
Such meeting may be held at the principal office of the Partnership or at such
other location as the General Partner calling the notice may deem appropriate or
desirable.
B. The Limited Partners may be represented in person or by proxy. The
General Partner shall give all the Limited Partners Notification of any proposal
or other matter required by any provision of this Agreement or by law to be
submitted for the consideration and approval of the Limited Partners, and that
Notification will include any information required by the relevant provision of
this Agreement or by law. No Notification of the time, place or purpose of any
meeting of Partners need be given to a Limited Partner if he, she or it attends
in person or is represented by proxy (except when the Limited Partner attends a
meeting and objects to the meeting on the ground that the meeting is not
lawfully called or convened), or if the Limited Partner in a writing executed
and filed with the records of the meeting, either before or after the time
thereof, waives such Notification.
ARTICLE 11
MISCELLANEOUS PROVISIONS
------------------------
Section 11.1. Appointment of the General Partner as Attorney-in-Fact.
A. Each Limited Partner, including each Substituted Limited Partner, by the
execution and delivery of this Agreement, irrevocably constitutes and appoints
the General Partner and the president of any corporate General Partner, acting
singly, as his, her or its true and lawful agent and attorney-in-fact with full
power and authority in such Limited Partner's name, place and stead to execute,
acknowledge, deliver, swear to, file and record at the appropriate public
offices such documents as may be necessary or appropriate to carry out the
provisions of this Agreement, including but not limited to:
(i) all counterparts of this Agreement, and any amendment or
restatement thereof, including all certificates (including the
certificate(s) contemplated by Section 11.3C. hereof) and instruments,
which the General Partner deems appropriate to organize, qualify or
continue the Partnership as a limited partnership in the jurisdictions in
which the Partnership may conduct business or in which such organization,
qualification or continuation is, in the opinion of the General Partner,
necessary or desirable to protect the limited liability of any Limited
Partner;
(ii) all amendments to this Agreement adopted in accordance with the
terms hereof and all instruments which the General Partner deems
appropriate to reflect a change or modification of the Agreement in
accordance with the terms hereof;
(iii) all documents or instruments which the General Partner deems
appropriate to reflect the admission of a Partner (including any
Substituted General or Limited
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<PAGE>
Partner), the dissolution of the Partnership, sales or transfers of
Partnership Interests, or the initial amount or increase or reduction in
amount of any Partner's Capital Contribution or reduction in any Partner's
Capital Account; and
(iv) any document or instrument deemed necessary to effectuate the
provisions of Section 5.1C granting authority to the General Partner as
provided therein.
B. The appointment by the Limited Partners, including any Substituted
Limited Partner, of the General Partner as attorney-in-fact in Section 11.1A,
shall be deemed to be a power coupled with an interest, in recognition of the
fact that each of the Partners under this Agreement will be relying upon the
power of the General Partner to act as contemplated by this Agreement in any
filing and other action on behalf of the Partnership, and shall survive, and not
be affected by the subsequent bankruptcy, death, incapacity, disability,
adjudication of incompetence or insanity, or dissolution of any Person hereby
giving such power or the transfer or assignment of all or any part of the
Interest of such Person; provided however, that in the event of the transfer or
assignment of all of a Limited Partner's Interest, the foregoing power of
attorney of a transferor Partner shall survive such transfer only until such
time as the transferee shall have been admitted to the Partnership as a
Substituted Limited Partner and all required documents and instruments shall
have been duly executed, filed and recorded to effect such substitution.
Section 11.2. Counterparts.
A. The General Partner and the Limited Partners, any Substituted Limited
Partner and any Substituted General Partner shall each become a signatory hereof
by signing such number of counterpart signature pages to this Agreement and such
other instruments and in such manner as the General Partner shall determine. By
so signing, the Limited Partners, any Substituted Limited Partner or Substituted
General Partner, as the case may be, shall be deemed to have adopted, and to
have agreed to be bound by, all the provisions of this Agreement.
B. This Agreement may be executed in several counterparts, all of which
together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the same counterpart.
Section 11.3. Amendments.
A. In addition to the amendments otherwise authorized herein, amendments
may be made to this Agreement from time to time by the General Partner with the
Consent of the Limited Partners; provided, however, that without the consent of
all of the Partners, this Agreement may not be amended so as to (i) convert the
Interest of a Limited Partner into a General Partner's Interest; (ii) modify the
limited liability of a Limited Partner; (iii) alter the Interest of a Partner in
Net Profits, Net Losses, gains from a sale or losses from a sale or
distributions of Cash Flow (except in connection with the admission or
withdrawal of a Partner to or from the Partnership); (iv) reduce the percentage
of Partners which is required to consent
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<PAGE>
to any action hereunder; (v) permit the General Partner to take any action
prohibited by Section 5.2; or (vi) modify this Section 11.3A. In addition to the
amendments otherwise authorized herein, amendments may be made to this Agreement
from time to time by the General Partner without notification to or Consent of
the Limited Partners solely to cure any ambiguity, defect or inconsistency in
this Agreement.
B. If this Agreement shall be amended as a result of adding or substituting
a Limited Partner, the amendment to this Agreement shall be signed by the
General Partner and by the Person to be substituted or added and, if a Limited
Partner is to be substituted, by the assigning Limited Partner. If this
Agreement shall be amended to reflect the withdrawal of the General Partner when
the business of the Partnership is being continued, such amendment shall be
signed by the successor General Partner.
C. In making any amendments, there shall be prepared and filed for
recordation by the General Partner such documents and certificates as shall be
required to be prepared and filed under the Act and under the laws of any other
jurisdictions under which the Partnership is then formed or qualified.
Section 11.4. Binding Provisions.
The covenants and agreements contained herein shall be binding upon, and
inure to the benefit of, the heirs, executors, administrators, personal
representatives, successors and assigns of the respective parties hereto.
Section 11.5. Applicable Law.
This Agreement shall be construed and enforced in accordance with the laws
of the State of Delaware.
Section 11.6. Separability of Provisions.
Each provision of this Agreement shall be considered separable and if for
any reason any provision or provisions hereof are determined to be invalid and
contrary to any existing or future law, such invalidity shall not impair the
operation of or affect those portions of this Agreement which are valid.
Section 11.7. Arbitration.
Each Partner hereby agrees that any dispute or claim he, she or it may have
with or against another Partner relating to the Partnership or its business, or
between any Partner and the Partnership, shall not be the subject of litigation
but shall instead be submitted to binding arbitration pursuant to the rules of
the American Arbitration Association, Naples, Florida, office, or another
private arbiter mutually satisfactory to the parties to the dispute. Each
Partner hereby further agrees that the losing party in any such arbitration
shall pay the other party's costs,
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<PAGE>
including reasonable legal and other professional fees, paid or incurred in
defending against any such dispute or claim.
Section 11.8. Entire Agreement.
This Agreement constitutes the entire agreement among the parties; it
supersedes any prior agreement or understandings among them, oral or written,
all of which are hereby cancelled. This Agreement may not be modified or amended
other than as provided in Section 11.3.
Section 11.9. Headings, Etc.
The headings in this Agreement are inserted for convenience of reference
only and will not affect interpretation of this Agreement. Whenever from the
context it appears appropriate, each term stated in either the singular or the
plural will include the singular and the plural, and pronouns stated in the
neuter gender will include the masculine, the feminine, and the neuter.
Section 11.10. No Waiver.
The failure of any Partner to seek redress for violation or to insist on
strict performance, of any covenant or condition of this Agreement will not
prevent a subsequent act that would have constituted a violation from having the
effect of an original violation.
Section 11.11. Legends.
If certificates are issued evidencing a Limited Partnership Interest, each
certificate will bear legends as may be required by applicable federal and state
laws, or as may be deemed necessary or appropriate by the General Partner to
reflect restrictions upon transfer contemplated herein.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
GENERAL PARTNER:
CLP, Inc.
By:
-----------------------------
Abraham D. Gosman, President
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<PAGE>
CHANCELLOR PARTNERS LIMITED PARTNERSHIP I
Limited Partner Signature Page
------------------------------
The undersigned Limited Partner hereby executes the Agreement of Limited
Partnership of Chancellor Partners Limited Partnership I, agrees to be bound by
all of the provision of said Agreement, and authorizes the attachment of this
signature page to a counterpart of said Agreement executed by the General
Partner of said Partnership.
Dated as of: , 1997
---------------------------------
Andrew Gosman
-25-
<PAGE>
CHANCELLOR PARTNERS LIMITED PARTNERSHIP I
Limited Partner Signature Page
------------------------------
The undersigned Limited Partner hereby executes the Agreement of Limited
Partnership of Chancellor Partners Limited Partnership I, agrees to be bound by
all of the provision of said Agreement, and authorizes the attachment of this
signature page to a counterpart of said Agreement executed by the General
Partner of said Partnership.
Dated as of: , 1997
By:
---------------------------------
Michael Gosman
-26-
<PAGE>
CHANCELLOR PARTNERS LIMITED PARTNERSHIP I
Limited Partner Signature Page
------------------------------
The undersigned Limited Partner hereby executes the Agreement of Limited
Partnership of Chancellor Partners Limited Partnership I, agrees to be bound by
all of the provisions of said Agreement, and authorizes the attachment of this
signature page to a counterpart of said Agreement executed by the General
Partner of said Partnership.
Dated as of: , 1997
CHANCELLOR PARTNERS BUSINESS TRUST
By:
-----------------------------
Michael M. Gosman, Trustee
By:
-----------------------------
Andrew D. Gosman, Trustee
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<PAGE>
CHANCELLOR PARTNERS LIMITED PARTNERSHIP I
Schedule A
----------
Partners and Capital Contributions
----------------------------------
General Partner Capital Contribution Percentage Interest
- --------------- -------------------- -------------------
CLP, Inc. 18,707 shares of Common .46043%
Stock of PhyMatrix Corp.
and 20,968 shares of
Common Stock of
CareMatrix Corporation
Limited Partners
- ----------------
Name Capital Contribution Percentage Interest
- ---- -------------------- -------------------
Andrew Gosman 1,421,677.3 shares of 35.3783%
Common Stock of
PhyMatrix Corp. and
1,619,836 shares of
Common Stock of
CareMatrix Corporation
Michael Gosman 1,421,677.3 shares of 35.3783%
Common Stock of
PhyMatrix Corp. and
1,619,836 shares of
Common Stock of
CareMatrix Corporation
Chancellor Partners 1,156,645.4 shares of 28.783%
Business Trust Common Stock of
PhyMatrix Corp. and
1,317,863 shares of
Common Stock of
CareMatrix Corporation
-28-
<PAGE>
EXHIBIT B
AGREEMENT
OF
LIMITED PARTNERSHIP
OF
CHANCELLOR PARTNERS LIMITED PARTNERSHIP II
Chancellor Partners Limited Partnership II (the "Partnership") hereby is
formed as a limited partnership under the laws of the State of Delaware pursuant
to this Agreement of Limited Partnership among CLP, Inc. as General Partner, and
the initial Limited Partners executing a signature page hereto. A Certificate of
Limited Partnership of the Partnership was filed with the Secretary of State of
Delaware on November 26, 1997.
Now, therefore, it is hereby agreed as of the 26th day of November, 1997 as
follows:
ARTICLE 1
DEFINED TERMS
-------------
Section 1.1. Defined Terms. The defined terms used in this Agreement shall,
unless the context otherwise requires, have the respective meanings specified in
this Section 1.1. For all purposes of this Agreement, the following definitions
are to be equally applicable to both the singular and plural forms of the terms
defined.
"Act" shall refer to the Delaware Revised Uniform Limited Partnership Act
in effect as of the date of this Agreement, and as amended from time to time.
"Additional Limited Partners" shall refer to those persons admitted to the
Partnership as Limited Partners, excluding the Original Limited Partners, in
their capacities as such.
"Affiliated Person" or "Affiliate" means, with respect to any Partner, any
other Person who is a member of the Partner's Immediate Family or a Parent, a
Subsidiary, or a Subsidiary of a Parent with respect to such Partner or a member
of the Partner's Immediate Family.
"Agreement" means this Agreement of Limited Partnership, as the same may be
hereafter amended or modified from time to time.
"Bankruptcy" means, with respect to a Partner: (a) the making of an
assignment for the benefit of such Partner's creditors; (b) the filing of a
voluntary petition in bankruptcy by such Partner; (c) adjudication of such
Partner as bankrupt or insolvent, or the entry against such Partner of an order
of relief in any bankruptcy or insolvency proceeding; (d) the filing of a
petition or answer by such Partner seeking for itself, himself, or herself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute or regulation; (e) the filing by such
Partner of an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it, him, or her in any
proceeding of this nature; or (f) seeking consent to or acquiescence in the
appointment of a
<PAGE>
trustee, receiver, or liquidator of such Partner or all or any substantial part
of its, his, or her properties.
"Capital Account" means the capital account of a Partner, maintained in
accordance with the provisions of Section 3.4 of this Agreement.
"Capital Contribution" means, with respect to any Partner, the total amount
of cash and fair market value of property contributed to the Partnership by such
Partner.
"Cash Flow" means, with respect to any fiscal period, cash receipts
(excluding Capital Contributions) of the Partnership from all sources during
such fiscal period less (i) all cash expenditures of the Partnership during such
fiscal period including, without limitation, debt service, repayment of advances
made by any Partner, and fees for management services, (ii) such reasonable
reserves as may be determined by the General Partner in its sole discretion (but
not less than any reserves required by the terms of any indebtedness of the
Partnership) as necessary to provide for the foreseeable needs of the
Partnership, and (iii) income from assets or proceeds from the sale or exchange
of any assets of the Partnership which the General Partner determines to
reinvest or hold for investment on behalf of the Partnership, in its sole
discretion.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).
"Consent of the Limited Partners" means the prior written consent of
Limited Partners who hold in the aggregate more than 50% of the Interests of all
Limited Partners.
"Entity" means any general partnership, limited partnership, corporation,
trust, business trust, limited liability company or partnership, cooperative or
association or any other form which is a legal entity under applicable law.
"Fiscal Year" means the fiscal year of the Partnership established in
Section 9.2.
"General Partner" means CLP, Inc., a Delaware corporation, and any
Substituted General Partners.
"Immediate Family" means, with respect to any Partner, his or her spouse,
children, grandchildren, the spouses of any of the foregoing or trusts for their
benefit.
"IRS" means the Internal Revenue Service.
"Limited Partners" shall refer to the Original Limited Partners, any
Additional Limited Partners, and any Substituted Limited Partners listed as such
in the books and records of the Partnership who shall, from time to time, be
limited partners of the Partnership.
"Net Loss" means, with respect to any Fiscal Year, the net loss of the
Partnership, if any, for such year as determined in accordance with the
Partnership's accounting methods.
<PAGE>
"Net Profit" means, with respect to any Fiscal Year, the net income of the
Partnership, if any, for such year as determined in accordance with the
Partnership's accounting methods.
"Notification" means a written notice containing the information required
by this Agreement to be communicated to any Person and sent by registered,
certified or first-class mail to such Person at the last known address of such
Person; provided, however, that any communication containing such information
actually received by such Person shall constitute Notification.
"Original Limited Partners" has the meaning set forth in Section 3.2.
"Parent" means, with respect to any Entity, any Person which (A) owns
directly, or indirectly through one or more Entities, fifty percent (50%) or
more of the voting or beneficial interest in such Entity or (B) otherwise has
the right or power, whether through ownership of securities, rights under
agreements or otherwise, to control such Entity.
"Partners" means, collectively, the Limited Partners, as constituted from
time to time, and the General Partners.
"Partnership Interest" or "Interest" means the entire interest of a Partner
in the Partnership at any particular time, including the right of such Partner
to any and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all the
terms and conditions of this Agreement and also shall include such interests,
rights and obligations in any successor partnership formed pursuant to this
Agreement.
"Percentage Interest" means a Partner's Interest expressed as a total of
all Partnership Interests. Each Partner's Percentage Interest shall be set forth
on Schedule A to this Agreement as the same may be amended from time to time.
"Person" means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such individual
or Entity where the context so admits.
"Profits" and "Losses" means taxable income and losses, and each item of
income, gain, loss, deduction or credit entering into the computation thereof,
as determined in accordance with the accounting methods followed by the
Partnership for Federal income tax purposes.
"Subsidiary" means, with respect to any Person, (A) any Entity in which
such Person owns directly, or indirectly through one or more Entities, fifty
percent (50%) or more of the voting or beneficial interest or (B) any Entity
which such Person otherwise has the right or power to control, whether through
ownership of securities, rights under agreements or otherwise.
"Substituted General Partner" means any Person admitted to the Partnership
as a General Partner pursuant to the provisions of Section 6.5 and who is listed
as such in the books and records of the Partnership.
<PAGE>
"Substituted Limited Partner" means any Person admitted to the Partnership
as a Limited Partner pursuant to the provisions of Section 7.2 and who is listed
as such in the books and records of the Partnership.
"Transfer" or "Transferred" or any other capitalized grammatical variation
thereof, unless otherwise specifically provided, refers to the sale, exchange,
assignment, distribution (upon liquidation or otherwise), encumbrance,
hypothecation, gift, pledge, transfer or other disposition or alienation,
whether absolute, contingent or collateral, in any way, of all or any part of an
Interest in the Partnership, including any transfer incident to a divorce or
separation, except any pledge or other hypothecation effected for the purpose of
securing borrowings of the Partnership which have been approved by the General
Partner.
ARTICLE 2
NAME, PLACE OF BUSINESS, PURPOSE AND TERM
-----------------------------------------
Section 2.1. Name and Office.
The name of the Partnership shall be Chancellor Partners Limited
Partnership II. The principal office of the Partnership shall be located at
, or at such other place as the General Partner may from
time to time determine. The resident agent for service of process is
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
Section 2.2. Purposes.
The Partnership has been formed for the purpose of providing a more
efficient and clearly defined vehicle for management by the General Partner of
property contributed to the Partnership and of voting certain securities
contributed to the Partnership. The purposes of the Partnership shall be to (a)
to engage in the business of buying, selling, investing and trading in stocks,
bonds, real estate, securities and other investments, including but not limited
to newly formed private companies, closely held partnerships, corporations,
limited liability companies, or other business ventures, and to engage in any
other business or activities incidental or related to the foregoing, and (b) to
engage in any business or activity which may be lawfully carried on by a limited
partnership under the provisions of Delaware law. The Partnership may engage in
any activity related to the foregoing purposes and will not engage in any other
business or activity without the Consent of the Limited Partners.
Section 2.3. Authority of the Partnership.
In order to carry out its purposes and not in limitation thereof, the
Partnership is empowered and authorized to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of its purposes, and for the protection and
benefit of the Partnership, as permitted under the Act.
<PAGE>
Section 2.4. Term.
The term of the Partnership shall continue in full force until dissolution
of the Partnership pursuant to the provisions of Article 8.
ARTICLE 3
PARTNERS AND CAPITAL
--------------------
Section 3.1. General Partner.
The original General Partner of the Partnership is CLP, Inc., a Delaware
corporation.
Section 3.2. Original Limited Partners.
Upon execution and delivery of this Agreement, the Persons executing
counterpart copies of this Agreement in their capacity as the initial Limited
Partners upon payment for their Interest in the Partnership will be the original
Limited Partners ("Original Limited Partners").
Section 3.3. Additional Limited Partners.
The General Partner may, from time to time, admit one or more Persons as
Additional Limited Partners on such terms and conditions as the General Partner
may determine. No person shall be deemed to be admitted as a Limited Partner
until the General Partner accepts such Person as a Limited Partner of the
Partnership, the books and records reflect such Person as admitted to the
Partnership as a Limited Partner, and such Person has executed a counterpart of
this Agreement and paid any Capital Contribution required as a condition to
admission.
Section 3.4. Capital Accounts.
A. The Partnership shall maintain a separate capital account for each
Partner. Each Partner's initial Capital Account balance shall equal such
Partner's initial contribution to the capital of the Partnership. Each Partner's
Capital Account shall thereafter be increased by (i) any cash or the fair market
value of any property thereafter contributed by such Partner (net of liabilities
assumed by the Partnership and liabilities to which such contributed property is
subject), (ii) the amount of any Partnership liabilities that are assumed by
such Partner, and (iii) such Partner's distributive share of the Partnership's
income and gain (or items thereof). Each Partner's Capital Account shall be
decreased by (i) such Partner's distributive shares of the Partnership's loss
and deductions (or items thereof), (ii) the amount of such Partner's individual
liabilities that are assumed by the Partnership, (iii) such Partner's share of
expenditures of the Partnership described in Section 705(a)(2)(B) of the Code,
and (iv) the amount of cash or the fair market value of any property distributed
by the Partnership to such Partner (net of liabilities assumed by such Partner
and liabilities to which such distributed property is subject). Other
appropriate adjustments to each Partner's Capital Account shall also be made
from time to time, in accordance with the rules set forth in applicable
regulations under Section 704 of the Code or the requirements of any other
applicable proposed, final or temporary regulations thereunder, including,
without limitation, adjustments resulting from increases or decreases to Capital
Accounts following revaluations of Partnership property pursuant to Treasury
Regulation Section
<PAGE>
1.704-1(b)(2)(iv)(f). It is the intent of the Partners that the Capital Accounts
shall be determined and maintained in accordance with said Code section and said
regulations, and this Section 3.4 shall be construed in a manner consistent
therewith. Each Partner shall have a single Capital Account that reflects all
his, her or its Interests in the Partnership. No Partner shall be entitled to
interest on his, her or its Capital Account or on any Capital Contribution.
B. Except as may be specifically provided herein, no Partner shall have the
right to withdraw all or any part of his, her or its Capital Contribution from
the Partnership. No Partner shall have any right to demand or receive property
or cash of the Partnership in return of his, her or its Capital Contribution
except as may be specifically provided in this Agreement.
C. The original Capital Account established for any Substituted General or
Limited Partner shall be in the same amount as, and shall replace, the Capital
Account of the Partner which such Substituted General or Limited Partner
succeeds, and, for the purposes of this Agreement, such Substituted General or
Limited Partner shall be deemed to have made the Capital Contribution, to the
extent actually paid in, of the Partner which such Substituted General or
Limited Partner succeeds. To the extent a Substituted General or Limited Partner
receives less than 100% of the Interest in the Partnership of a Partner he, she
or it succeeds, the original Capital Account and Capital Contribution of such
Substituted General or Limited Partner shall be in proportion to the Interest
he, she or it receives, and the Capital Account and Capital Contribution of the
Partner who retains a partial Interest in the Partnership shall be in proportion
to the Interest he, she or it retains.
Section 3.5. Liability of the Limited Partners; Additional Capital
Contributions.
Except as otherwise required by this Agreement or the Act, no Limited
Partner shall be liable for any debts, liabilities, contracts or any other
obligations of the Partnership. Except as otherwise required by this Agreement
or the Act, a Limited Partner has no liability in excess of the amount of
contributions that he, she or it is obligated to make to the Partnership and
his, her or its share of the Partnership's assets and undistributed profits. No
Limited Partner shall be required to lend any funds to the Partnership or, after
his, her or its Capital Contribution has been paid, to make any further Capital
Contributions to the Partnership.
Section 3.6. Liability of the General Partner.
Except as provided in the Act, the General Partner has the liabilities of a
partner in a partnership without limited partners to all Persons, including the
Partnership and the other Partners. This Agreement shall not be amended to limit
such liability of the General Partner.
<PAGE>
ARTICLE 4
DISTRIBUTIONS: ALLOCATIONS OF PROFITS AND LOSSES
------------------------------------------------
Section 4.1. Distributions of Cash Flow.
Cash Flow with respect to each Fiscal Year shall be distributed at the
discretion of the General Partner, at such times as the General Partner deems
appropriate. The General Partner shall have the discretion to distribute Cash
Flow for any Fiscal Year to the Partners or to any of them without regard to
their Percentage Interests; provided, however, that all distributions of Cash
Flow to Partners shall be appropriately reflected as adjustments to their
Capital Accounts as provided in Section 3.4A hereof, and that no distribution of
Cash Flow shall be made to a Partner if such distribution would cause or
increase a deficit balance in such Partner's Capital Account.
Section 4.2. Allocation of Net Profits and Losses from Operations.
Except as otherwise provided in Sections 4.3, 4.4, and 4.5 hereof, and
subject to the provisions of Section 7.3 hereof, the Net Profit or Net Loss as
of the end of any Fiscal Year shall be allocated among all the Partners in
accordance with their Percentage Interests.
Section 4.3. Allocation of Gains from Sales.
Subject to the provisions of Sections 4.5 and 7.3 hereof, any gain from a
sale of Partnership property shall be allocated as follows:
(a) There shall first be allocated to each Partner with a deficit in his,
her or its Capital Account an amount of such gain sufficient to bring his, her
or its Capital Account to zero. If such gain shall be insufficient to bring to
zero the Capital Accounts of all Partners with deficits in their Capital
Accounts, then such gain shall be allocated to those Partners with deficits in
their Capital Accounts in proportion to their respective deficit Capital Account
balances.
(b) The balance, if any, of such gain shall be allocated to the Partners in
proportion to their Percentage Interests.
Section 4.4. Allocation of Losses from Sale.
Subject to the provisions of Sections 4.5 and 7.3 hereof, any loss from a
sale of Partnership property shall be allocated as follows:
(a) There shall first be allocated to each Partner with a positive Capital
Account an amount of such loss sufficient to reduce his, her or its Capital
Account to zero. If such loss shall be insufficient to reduce to zero the
Capital Accounts of all Partners with positive Capital Accounts, then such loss
shall be allocated to those Partners with positive Capital Accounts in
proportion to their respective positive Capital Account balances.
<PAGE>
(b) The balance, if any, of such loss shall be allocated to Partners in
proportion to their Percentage Interests.
Section 4.5. Allocations With Respect to Contributed Property.
Notwithstanding any other provision of this Agreement to the contrary,
items of income, gain, loss, and deduction with respect to property contributed
to the Partnership by any Partner shall be allocated among the Partners so as to
take into account the variation between the basis of the property to the
Partnership and its fair market value at the time of contribution in accordance
with the requirements of Section 704(c) of the Code and applicable Regulations
thereunder.
ARTICLE 5
RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER
------------------------------------------------
Section 5.1. Management of the Partnership.
A. Except as otherwise expressly limited by the provisions of this
Agreement, the General Partner shall have exclusive discretion in the management
and control of the business and affairs of the Partnership and all powers
necessary, convenient, and appropriate to carry out the purposes, conduct the
business and exercise the powers of the Partnership, and it is hereby authorized
to take any action of any kind and to do anything and everything it deems
necessary or appropriate in accordance with the provisions of this Agreement and
to the extent permitted by Delaware law. If there is more than one General
Partner, the General Partners shall act by a majority of their Percentage
Interest as General Partners.
B. Except as otherwise expressly provided in this Agreement, no Limited
Partner shall participate in or have any control whatsoever over the
Partnership's business or have any authority or right to act for or bind the
Partnership. Each Limited Partner hereby consents to the exercise by the General
Partner of the powers conferred on it by this Agreement.
C. Except to the extent otherwise provided herein, the General Partner is
hereby authorized without the Consent or approval of the Limited Partners to:
(i) execute or amend any and all agreements, contracts, documents,
certifications and instruments necessary or convenient for the efficient
conduct and operation of the Partnership's business;
(ii) prepay in whole or in part, recast, modify or extend any debt,
and in connection therewith to execute any extensions, consolidations,
modifications or renewals of debt obligations;
(iii) borrow funds from lenders, including Partners, to fund the
operations of the Partnership, on such terms as the General Partner may
negotiate;
<PAGE>
(iv) deal with, or otherwise engage in business with, any Person who
has provided or may in the future provide any services, lend money or sell
property to or purchase from a Partner or any Affiliate of a Partner. The
General Partner may enter into agreements on behalf of the Partnership,
employ agents, attorneys, accountants, appraisers, or other consultants or
contractors who may be Affiliates of a Partner, and may enter into
agreements to employ Affiliates of a Partner to provide further or
additional services to the Partnership;
(v) engage in any kind of activity and perform and carry out contracts
of any kind necessary to, or in connection with, or incidental to the
accomplishment of the purposes of the Partnership, as may be lawfully
carried on or performed by a partnership under the laws of the State of
Delaware and in each state where the Partnership has been qualified to do
business;
(vi) satisfy any and all Partnership obligations for which any General
Partner is personally liable before satisfying Partnership obligations as
to which the General Partner has no such personal liability;
(vii) make an election, or revocation of an election, on behalf of the
Partnership under Section 754 of the Code;
(viii) invest and reinvest in bonds, notes, debentures, shares of
stock, mutual fund shares, life insurance, annuities, mortgages, commercial
papers, interests in limited partnerships or limited liability companies,
certificates of deposit, and interest-bearing savings accounts;
(ix) sell, trade, and deal in stocks, bonds, and securities of every
nature, including puts and calls, on margin or otherwise, including short
selling and, in connection therewith, to borrow money and to pledge any and
all stocks, bonds and securities; to authorize any broker to lend
separately or together with the property of others, to itself or others,
any property which the broker may be carrying for the Partnership on
margin.
(x) borrow from any Limited Partner or lend funds of the Partnership
to any Limited Partner on such terms as it shall determine in its
discretion.
D. The General Partner shall have the exclusive right to make all decisions
concerning the investment and reinvestment of any assets of the Partnership. For
purposes of this Section 5.1D, the term "decisions concerning the investment and
reinvestment of any assets of the Partnership" shall mean specifically, but not
by way of limitation, decisions concerning the sale, purchase, investment,
reinvestment and exchange of any Partnership assets, including the granting of
options but not including any right to vote any shares of any security of any
corporation or other business entity owned by the Partnership, even if such vote
should arise in connection with any merger, consolidation, foreclosure,
liquidation, recapitalization or reorganization pertaining to any such security
or such business entity. The exclusive right to exercise any voting rights with
respect to any such securities owned by the Partnership shall belong to the
Limited Partners, who shall each independently vote a percentage of any
securities equal to such Limited Partners' Percentage Interest.
<PAGE>
E. Except as provided below, or as otherwise expressly provided in this
Agreement, all decisions concerning the management of the Partnership's
investments and its day-to-day management shall be made solely by the General
Partner. Specifically, but not by way of limitation, the General Partner shall
be authorized:
(x) to cause to be paid on or before the due date thereof all amounts
due and payable by the Partnership to any Person or Entity; and
(xi) to employ such agents, employees, managers, accountants,
attorneys, consultants and other Persons, including any General Partner,
necessary or appropriate to carry out the business and affairs of the
Partnership, whether or not any such Persons so employed are Affiliated
Persons of, or related to, any Partner, and to pay such fees, expenses,
salaries, wages and other compensation to such Persons as it shall in its
sole discretion determine.
F. With respect to all of its obligations, powers and responsibilities
under this Agreement, the General Partner is authorized to execute and deliver,
for and on behalf of the Partnership, such instruments and agreements as it
deems proper, all on such terms and conditions as the General Partner deems
proper.
G. Any Person dealing with the Partnership or the General Partner may rely
upon a Certificate signed by the General Partner:
(xii) as to the identity of the General Partner or Limited Partners
hereunder;
(xiii) as to the existence or non-existence of any fact or facts which
constitute conditions precedent to acts by the General Partner or in any
other manner germane to the affairs of the Partnership;
(xiv) as to who is authorized to execute and deliver any instrument or
document on behalf of the Partnership;
(xv) as to the authenticity of any copy of this Agreement and
amendments thereto; or
(xvi) as to any act or failure to act by the Partnership or as to any
other matter whatsoever involving the Partnership or any Partner.
Section 5.2. Restrictions on Authority of the General Partner.
A. Notwithstanding any other provisions of this Agreement, the General
Partner shall have no authority to do any act required to be approved or
ratified by the Limited Partners under the Act or as set forth in Section 5.2B.
<PAGE>
B. Without the Consent of the Limited Partners, the General Partner shall
have no authority on behalf of the Partnership to:
(i) do any willful act in contravention of this Agreement or the Act;
(ii) convert property of the Partnership to its own use, or assign any
rights in specific property of the Partnership for other than a purpose of
the Partnership;
(iii) perform any act that would subject any Limited Partner to
liability as a general partner in any jurisdiction or impose any other
liability on a Limited Partner except as provided for herein or under the
Act;
(iv) admit any Person as an Additional General Partner;
(v) make any election to discontinue, liquidate or dissolve the
Partnership; or
(vi) make any election, or take any other willful action, to cause the
Partnership to be treated as an association taxable as a corporation for
income tax purposes.
Section 5.3. Duties and Obligations of the General Partner - General.
A. The General Partner shall diligently and faithfully use its best efforts
to conduct the affairs of the Partnership in accordance with this Agreement, the
Act and other applicable Delaware law.
B. The General Partner shall take such action as may be necessary or
appropriate in order to form or qualify the Partnership under the laws of any
jurisdiction in which the Partnership is doing business or owns property or in
which such formation or qualification is necessary in order to protect the
limited liability of the Limited Partners or in order to continue in effect such
formation or qualification. The General Partner shall take all other action
necessary to perfect and maintain the Partnership as a limited partnership under
the laws of the State of Delaware and (if and to the extent required by
applicable law) to amend the Certificate of Limited Partnership from time to
time.
C. The General Partner shall prepare or cause to be prepared and shall file
on or before the due date (including any extension thereof) any Federal, state
or local tax returns required to be filed by the Partnership. The General
Partner shall cause the Partnership to pay any taxes payable by the Partnership.
D. The General Partner shall be under a duty to conduct the affairs of the
Partnership in good faith and in accordance with the terms of this Agreement and
in a manner consistent with the purposes of the Partnership.
Section 5.4. Compensation of General Partner - General.
The General Partner as the general partner of the Partnership shall be
entitled to reasonable compensation for its services and reimbursement for
expenses reasonably incurred in managing the Partnership.
<PAGE>
Section 5.5. Other Business of Partners.
Nothing contained in this Agreement shall be construed or shall operate to
limit any Partner or any Affiliate of a Partner from directly or indirectly
engaging, independently or with others in any business which is or may be
competitive with the business of the Partnership. Each of the Partners,
including the General Partner, and Affiliated Persons shall be free to engage in
any business whatsoever, including any business within the purposes of the
Partnership, and neither the Partnership nor any Partner shall have any right by
virtue of this Agreement or the partnership relationship created hereby in such
other business or to the income or proceeds derived therefrom. Nothing in this
Agreement shall be deemed to prohibit any Partner or any Affiliate of a Partner
from dealing or otherwise engaging in business with the Partnership or with
Persons transacting business with the Partnership, or from providing services
relating to the purchase, sale, financing, management, development or operation
of any venture or activity of any nature whatsoever. Neither the Partner nor any
Affiliated Person of a Partner shall be obligated to present any particular
business opportunity to the Partnership, even if such opportunity is of a
character which could be taken by the Partnership.
Section 5.6. Limitation of Liability of General Partner; Indemnification.
A. A General Partner shall not be liable under this Agreement to the
Partnership or any Limited Partner because any taxing authority disallows or
adjusts any deductions or credits of the Partnership or otherwise adjusts any
Partner's income tax return unless such action by the taxing authority is due to
a course of conduct by the General Partner constituting gross negligence,
material misrepresentation, willful misconduct, or material breach of fiduciary
duty. The General Partner shall not be liable for the return of the Capital
Contributions of the Limited Partners or for any portion thereof, it being
expressly understood that any return of capital shall be made solely from the
assets of the Partnership.
B. Each of the General Partner and any Affiliate providing services to the
Partnership shall be indemnified by the Partnership against any losses,
judgments, liabilities, expenses and amounts paid in settlement of any claims
sustained by it in connection with its duties as the General Partner of the
Partnership, or in the provision of services to the Partnership, respectively,
provided that the same were not the result of a course of conduct constituting
misconduct, gross negligence, material misrepresentation or material breach of
fiduciary duty. Any indemnity under this Section shall be provided out of and to
the extent of Partnership assets only, and no Limited Partner shall have any
personal liability on account thereof.
C. No General Partner shall be liable for damages or otherwise to the
Partnership or to any Partner for any act within the scope of the authority
conferred under this Agreement or for any failure to act, provided that such
General Partner in good faith determines that such course of conduct was in the
best interest of the Partnership and such course of conduct did not constitute
willful misconduct, gross negligence, material misrepresentation or material
breach of fiduciary duty.
<PAGE>
D. The General Partner shall have no liability or responsibility hereunder
to make loans, advances or additional Capital Contributions to the Partnership,
except as expressly provided in this Agreement, or except as may otherwise be
provided as a matter of law. However, to the extent a General Partner advances
any funds to meet any liabilities or obligations of the Partnership, any such
advances shall be deemed loans to the Partnership by the General Partner and
shall accrue interest at the Prime Rate as printed in the Wall Street Journal on
the first business day of each month, payable in arrears on the first day of
each fiscal quarter of the Partnership, and such amounts shall be due and
payable on the earliest date that funds are available for repayment from
available Cash Flow, liquidation or dissolution of the Partnership, or the sale
or refinancing by the Partnership of any of its properties and the receipt by
the Partnership of the proceeds of such sale or refinancing.
E. In the event that any action, suit or proceeding is instituted against a
General Partner or any Affiliate of a General Partner with respect to the
business, assets, liabilities or activities of the Partnership, the General
Partner or such Affiliate may, at Partnership expense, obtain separate legal
counsel and other expert assistance to defend or assist in defending any action,
suit or proceeding, provided the legal action relates to the performance of
duties or services by the General Partner or Affiliate on behalf of the
Partnership, the legal action is initiated by a third party who is not and has
never been a Partner of the Partnership, and the General Partner or the
Affiliate undertakes to repay the advanced funds to the Partnership, without
interest, if it is determined that the General Partner or Affiliate is not
entitled to indemnification. Such General Partner or Affiliate shall have
advanced to them by the Partnership, at their request, funds for payment of all
expenses and costs reasonably incurred in connection with the defense of any
such action or suit. The General Partner or the Affiliate shall not be advanced
funds for legal expenses and other related costs incurred as a result of any
legal action initiated by a Partner or former Partner or the Partnership against
the General Partner or an Affiliate.
Section 5.7. Tax Matters Partner.
A. The General Partner shall serve as the Tax Matters Partner of the
Partnership, as provided in Treasury Regulations promulgated under Section 6231
of the Code. Each Partner hereby approves of such designation and agrees to
execute, acknowledge, and deliver such documents as may be deemed necessary or
appropriate to evidence such approval.
B. To the extent and in the manner provided by applicable Code sections and
Regulations thereunder, the Tax Matters Partner shall perform all duties and
functions required by law as such Tax Matters Partner.
<PAGE>
ARTICLE 6
WITHDRAWAL OF GENERAL PARTNER
-----------------------------
Section 6.1. Limitation on Voluntary Withdrawal.
A General Partner may not withdraw voluntarily from the Partnership. Except
as expressly provided otherwise in this Agreement, a General Partner shall not
sell, transfer or assign his, her or its Interest or any portion thereof, unless
required to do so pursuant to the terms of any loan documents or other
instruments or agreements to which the Partnership is or shall become a party.
Section 6.2. Death, Incapacity or Bankruptcy of a General Partner.
In the event of the death, incapacity or Bankruptcy of a General Partner,
or dissolution of a corporate General Partner, or in the event that a creditor
of a General Partner should attach or otherwise obtain an interest in that
General Partner's Interest in the Partnership, the General Partner shall
immediately cease to be a General Partner and his, her or its Interest shall
automatically and without further action by the Partnership be converted to a
Limited Partner Interest for the same Percentage Interest.
Section 6.3. Distributions to Withdrawn General Partner.
Subject to the maintenance of adequate reserves by the General Partner, in
the event of the withdrawal of a General Partner for any reason, such General
Partner or such General Partner's legal representative shall be entitled to
receive from the Partnership any positive balance in such General Partner's
Capital Account attributable to his or her or its General Partner's Interest
adjusted to the date of withdrawal.
Section 6.4. Liability of Withdrawn General Partner.
If a General Partner shall cease to be a general partner of the
Partnership, he or she or it shall be and shall remain liable for all
obligations and liabilities incurred on account of activities of the Partnership
prior to or at the time he or she or it ceased to be a General Partner, but
shall be free of any obligation or liability incurred on account of the
activities of the Partnership after the time he or she or it ceased to be a
General Partner.
Section 6.5. Substituted General Partners.
In the event of the withdrawal of the sole remaining General Partner for
any reason (including dissolution, death, incapacity, or bankruptcy), the
Limited Partners may elect to continue the Partnership. The Partnership will not
dissolve if a majority in Interest of the Limited Partners elect in writing
within 90 days of such withdrawal to continue the Partnership and, if necessary,
to appoint one or more Substitute General Partners effective as of the
withdrawal of the retiring General Partner.
<PAGE>
ARTICLE 7
ASSIGNABILITY OF LIMITED PARTNERSHIP INTERESTS; REDEMPTION
----------------------------------------------------------
Section 7.1 Restrictions on Withdrawals and Assignments.
No Limited Partner may withdraw voluntarily from the Partnership during the
term of the Partnership. Except as otherwise expressly permitted in this
Agreement, no Limited Partner shall have the right to assign his, her or its
Interest except with the written consent of the General Partner, which consent
is exclusively within the discretion of the General Partner, and if the proposed
transferor is also the sole General Partner, with the consent of a majority in
Interest of the non-assigning Limited Partners, which consent is wholly within
the discretion of the non-assigning Limited Partners. Except as otherwise
expressly permitted in this Agreement, any attempt to assign without the express
written consent of the General Partner or the non- assigning Limited Partners,
as the case may be, shall be void and ineffectual and shall not bind the
Partnership. Further:
A. No assignment of any Interest may be made pursuant to a sale or exchange
if the Interest sought to be assigned, when added to the total of all other
Interests assigned pursuant to a sale or exchange within a period of twelve (12)
consecutive months prior thereto would, in the opinion of legal counsel for the
Partnership, result in the Partnership's termination within the meaning of
Section 708 of the Code, unless the Partnership shall have first received an
opinion from tax counsel satisfactory to the Partnership that such a termination
would have no adverse tax impact on the Partnership or any Partner.
B. The General Partner may require that any assignment of an Interest in
the Partnership be made only if the assignor or assignee provides an opinion of
counsel that such assignment would not require filing of a registration
statement under the Securities Act of 1933 or would otherwise not be in
violation of any Federal or state securities laws (including any investment
suitability standards) applicable to the Partnership.
C. No assignment shall be made to a minor or incompetent (unless a
guardian, custodian or conservator has been appointed).
D. No assignment shall be made to a person not permitted to be a transferee
under law (including applicable securities law).
Section 7.2 Assignees and Substituted Limited Partner.
A. The death, dissolution or Bankruptcy of a Limited Partner in and of
itself shall not dissolve the Partnership.
B. Where the General Partner or the non-assigning Limited Partners, as the
case may be, have consented to an assignment of an Interest, the Partnership
need not recognize such assignment for any purpose unless there shall have been
filed with the Partnership a duly executed counterpart of the instrument making
such assignment signed by both the assignor and
<PAGE>
the assignee which evidences the written acceptance by the assignee of his, her,
or its agreement to be bound by all of the terms and provisions of this
Agreement and represents that such assignment was made in accordance with all
applicable laws and regulations (including investment suitability requirements).
C. If a Limited Partner assigns all of his, her or its Interest, he, she or
it shall cease to be a Limited Partner of the Partnership, but the assignee of
such Interest shall not become a Limited Partner unless and until such assignee
is admitted as a Substituted Limited Partner pursuant to Section 7.2D.
D. Any person who is an assignee of any of the Interests of a Limited
Partner shall become a Substituted Limited Partner when the General Partner
shall have accepted such Person as a Limited Partner of the Partnership, the
books and records of the Partnership reflect such Person as admitted to the
Partnership as a Limited Partner, such person has satisfied the requirements of
Section 7.1, Section 7.2B and Section 11.1A, and when such Person shall have
paid all reasonable legal fees and filing costs incurred by the Partnership in
connection with his, her or its substitution as a Limited Partner; provided,
however, that the General Partner's consent to the substitution of any assignee
of an Interest as a Substituted Limited Partner may be granted or withheld in
its sole discretion.
E. Any Person who is the assignee of any of the Interest of a Limited
Partner but who does not become a Substituted Limited Partner and desires to
make a further assignment of any such Interest shall be subject to all the
provisions of this Article Seven to the same extent and in the same manner as
any Limited Partner desiring to make an assignment of the Interest.
Section 7.3 Allocations Subsequent to Transfer.
In the event of the admission or withdrawal of a Limited Partner, or in the
event all or any part of a Partnership Interest is validly transferred under the
terms of this Article 7, all Partnership items allocated under Article 4 hereof
shall be further allocated based upon the ownership of the respective
Partnership Interests prior to and following the effective date of such
admission, withdrawal or transfer in a manner consistent with the requirements
of Section 706 of the Code.
Section 7.4 Liquidation of a Partner's Interest.
In the event there is a liquidation of any Partner's Partnership Interest,
for purposes of Regulation Section 1.704-1 under Code Section 704 (prior to
dissolution or liquidation of the Partnership as provided in Article 8 hereof),
liquidating distributions, if any, shall be made to such Partner in the ratio
that the positive balance, if any, in such Partner's Capital Account, after
taking into account all Capital Account adjustments provided for in Section 3.4
hereof (other than those made as a result of any such liquidating
distributions), bears to the aggregate positive Capital Account balances (as so
adjusted) of all Partners. Such liquidating distributions shall be made no later
than the end of the taxable year during which such liquidation takes place or,
if later, within 90 days after the date of such liquidation.
<PAGE>
ARTICLE 8
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
----------------------------------------------
Section 8.1. Events Causing Dissolution.
A. The business of the Partnership shall continue upon the withdrawal of a
General Partner if there is at least one other General Partner at that time.
B. The Partnership shall be dissolved on the first to occur of the
following events:
(i) the entry of an order for relief with respect to the Partnership
in the U.S. Bankruptcy Court;
(ii) the withdrawal, removal, dissolution, death, adjudication of
incompetency, or Bankruptcy of the last remaining General Partner, unless
the Partnership is continued pursuant to Section 6.5;
(iii) the decision of the General Partner to liquidate the
Partnership, with the written consent of Limited Partners who then own more
than two-thirds of the Percentage Interests owned by all of the Limited
Partners; or
(iv) the withdrawal, removal, death, adjudication of incompetency, or
Bankruptcy of the last remaining Limited Partner, unless within 90 days
after the occurrence of such event the personal representative of the last
Limited Partner and all of the General Partners agree in writing to
continue the business of the Partnership and to admit the personal
representative of such Limited Partner (or its nominee or designee) as a
Limited Partner, effective as of the occurrence of such event.
Dissolution of the Partnership shall be effective on the day on which the
event occurs giving rise to the dissolution. The Partnership shall not be
terminated until the assets of the Partnership shall have been distributed as
provided in Section 8.2. Notwithstanding the dissolution of the Partnership,
prior to the termination of the Partnership, as aforesaid, the business of the
Partnership and the affairs of the Partners as such shall continue to be
governed by this Agreement.
C. Partners shall look solely to the assets of the Partnership for all
distributions with respect to the Partnership and their Capital Contribution
thereto, and shall have no recourse therefor (upon dissolution or otherwise)
against any General Partner, any Affiliate of a Partner, or any Limited Partner.
<PAGE>
Section 8.2. Liquidation.
A. Upon the dissolution of the Partnership, its affairs shall be wound up
and it shall be liquidated and the proceeds of such liquidation and the
Partnership's other assets shall be distributed as follows:
(i) All of the Partnership's ascertained debts and liabilities to
creditors, including Partners, shall be paid and discharged in the order
provided by applicable law.
(ii) A reserve shall be set aside in an amount reasonably required in
the judgment of the General Partner to provide for contingent or other
liabilities of the Partnership.
(iii) The Partnership's Net Profit or Net Loss (including without
limitation any gain or loss resulting from any sales or other dispositions
of Partnership property in connection with the liquidation of the
Partnership) shall be computed and shall be allocated to the Partners in
accordance with Article 4 hereof, and the Partners' Capital Accounts shall
be adjusted in accordance with Section 3.4 hereof.
(iv) Distribution shall be made to the Partners, in liquidation of the
Partnership Interests of all of the Partners, to those Partners with
positive Capital Account balances, after taking into account all Capital
Account adjustments provided for in Section 3.4 hereof (other than those
made as a result of any such liquidating distributions) in the ratios of
such positive Capital Account balances, as so adjusted.
(v) The remainder of the Partnership assets, if any, shall be
distributed to the Partners in accordance with their Percentage Interests.
(vi) Each Partner shall receive his, her or its share of such
distributions in cash and/or in kind, and the portion of such share that is
received in cash may vary from Partner to Partner, all as the General
Partner may in his sole discretion determine.
Notwithstanding the foregoing, if any assets of the Partnership are to
be distributed in kind, such assets shall be distributed on the basis of
the fair market value thereof, and any Partner entitled to any interest in
such assets shall receive such interest therein as a tenant-in-common with
all other Partners so entitled. If any asset is to be distributed in kind,
the Partner's Capital Accounts shall be adjusted as provided in Section 3.4
hereof (consistent with the requirements of Regulations under Sections
704(b) and 704(c) of the Code) before any such distribution is made to
reflect the increases or decreases to said Capital Accounts which would
have occurred if such asset to be distributed in kind had been sold for its
fair market value by the Partnership immediately prior to such
distribution. All such liquidating distributions shall be made by the end
of the taxable year of the Partnership in which there is a liquidation of
the Partnership for purposes of Paragraphs (b)(2)(ii)(b) and (b)(2)(ii)(g)
of Regulation Section 704 or, if later, within 90 days after the date of
such liquidation.
(vii) As soon as practicable, the remaining balance, if any, of the
reserve
<PAGE>
established in accordance with Subparagraph (ii) hereof shall be
distributed to the Partners in the manner set forth herein.
B. Distribution of cash or property to the Partners in accordance with the
provisions of Paragraph A hereof shall constitute a complete return to the
Partners of their respective Partnership Interests in the Partnership assets.
C. The winding up of the Partnership's affairs and the liquidation and
distribution of its assets shall, subject to the provisions of the Act, be
conducted exclusively by the General Partner, who is authorized to do any and
all acts authorized by law for these purposes. When the General Partner has
complied with the foregoing liquidation plan, the Partners shall execute,
acknowledge, and cause to be filed an instrument evidencing the cancellation of
the Certificate of Limited Partnership of the Partnership.
ARTICLE 9
BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS, ETC.
-----------------------------------------------------------
Section 9.1. Books and Records.
The books and records of the Partnership shall be maintained by the General
Partner in accordance with applicable law at the principal office of the
Partnership and shall be available for examination at such location by any
Partner or such Partner's duly authorized representative at any and all
reasonable times for any purpose reasonably related to the Partner's interest in
the Partnership.
Section 9.2. Accounting and Fiscal Year.
The books of the Partnership shall be maintained in accordance with
accounting methods employed for federal income tax reporting purposes. The
Fiscal Year of the Partnership shall end December 31 of each year, unless
otherwise required by Section 706 of the Code.
Section 9.3. Bank Accounts and Investments.
The funds of the Partnership shall be held in the name of the Partnership.
These funds shall be deposited in the name of the Partnership in such bank
accounts in such banking institutions as the General Partner shall determine,
and withdrawals therefrom shall be made only in the regular course of
Partnership business on such signature or signatures as the General Partner
shall determine. The funds of the Partnership shall not be commingled with the
funds of any other Person.
Section 9.4. Reports.
The General Partner shall deliver to the Limited Partners with respect to
each Fiscal Year no later than the date prescribed for filing such information
as shall be necessary for the preparation of Partner' Federal, State or other
income tax returns.
<PAGE>
ARTICLE 10
MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS
----------------------------------------------
Section 10.1. Meetings.
A. Meetings of the Partnership may be called by the General Partner for any
purpose. Notification of any such meeting shall be sent to all Partners. Any
matter requiring the Consent of the Limited Partners under this Agreement may be
considered at a meeting of the Partners held not less than twenty nor more than
sixty days after Notification of that meeting has been given by the General
Partner to all Partners. Notification (a) may be given by the General Partner,
in its discretion, at any time; and (b) will be given by the General Partner
within thirty days after receipt by the General Partner of a request for such a
meeting made by Limited Partners who hold in the aggregate more than 50% of the
Interests of all Limited Partners. Any Notification will state briefly the
purpose, time, and place of the meeting. Such meeting may be held at the
principal office of the Partnership or at such other location as the General
Partner calling the notice may deem appropriate or desirable.
B. The Limited Partners may be represented in person or by proxy. The
General Partner shall give all the Limited Partners Notification of any proposal
or other matter required by any provision of this Agreement or by law to be
submitted for the consideration and approval of the Limited Partners, and that
Notification will include any information required by the relevant provision of
this Agreement or by law. No Notification of the time, place or purpose of any
meeting of Partners need be given to a Limited Partner if he, she or it attends
in person or is represented by proxy (except when the Limited Partner attends a
meeting and objects to the meeting on the ground that the meeting is not
lawfully called or convened), or if the Limited Partner in a writing executed
and filed with the records of the meeting, either before or after the time
thereof, waives such Notification.
ARTICLE 11
MISCELLANEOUS PROVISIONS
------------------------
Section 11.1. Appointment of the General Partner as Attorney-in-Fact.
A. Each Limited Partner, including each Substituted Limited Partner, by the
execution and delivery of this Agreement, irrevocably constitutes and appoints
the General Partner and the president of any corporate General Partner, acting
singly, as his, her or its true and lawful agent and attorney-in-fact with full
power and authority in such Limited Partner's name, place and stead to execute,
acknowledge, deliver, swear to, file and record at the appropriate public
offices such documents as may be necessary or appropriate to carry out the
provisions of this Agreement, including but not limited to:
(i) all counterparts of this Agreement, and any amendment or
restatement thereof, including all certificates (including the
certificate(s) contemplated by Section 11.3C. hereof) and instruments,
which the General Partner deems appropriate to
<PAGE>
organize, qualify or continue the Partnership as a limited partnership in
the jurisdictions in which the Partnership may conduct business or in which
such organization, qualification or continuation is, in the opinion of the
General Partner, necessary or desirable to protect the limited liability of
any Limited Partner;
(ii) all amendments to this Agreement adopted in accordance with the
terms hereof and all instruments which the General Partner deems
appropriate to reflect a change or modification of the Agreement in
accordance with the terms hereof;
(iii) all documents or instruments which the General Partner deems
appropriate to reflect the admission of a Partner (including any
Substituted General or Limited Partner), the dissolution of the
Partnership, sales or transfers of Partnership Interests, or the initial
amount or increase or reduction in amount of any Partner's Capital
Contribution or reduction in any Partner's Capital Account; and
(iv) any document or instrument deemed necessary to effectuate the
provisions of Section 5.1C granting authority to the General Partner as
provided therein.
B. The appointment by the Limited Partners, including any Substituted
Limited Partner, of the General Partner as attorney-in-fact in Section 11.1A,
shall be deemed to be a power coupled with an interest, in recognition of the
fact that each of the Partners under this Agreement will be relying upon the
power of the General Partner to act as contemplated by this Agreement in any
filing and other action on behalf of the Partnership, and shall survive, and not
be affected by the subsequent bankruptcy, death, incapacity, disability,
adjudication of incompetence or insanity, or dissolution of any Person hereby
giving such power or the transfer or assignment of all or any part of the
Interest of such Person; provided however, that in the event of the transfer or
assignment of all of a Limited Partner's Interest, the foregoing power of
attorney of a transferor Partner shall survive such transfer only until such
time as the transferee shall have been admitted to the Partnership as a
Substituted Limited Partner and all required documents and instruments shall
have been duly executed, filed and recorded to effect such substitution.
Section 11.2. Counterparts.
A. The General Partner and the Limited Partners, any Substituted Limited
Partner and any Substituted General Partner shall each become a signatory hereof
by signing such number of counterpart signature pages to this Agreement and such
other instruments and in such manner as the General Partner shall determine. By
so signing, the Limited Partners, any Substituted Limited Partner or Substituted
General Partner, as the case may be, shall be deemed to have adopted, and to
have agreed to be bound by, all the provisions of this Agreement.
B. This Agreement may be executed in several counterparts, all of which
together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the same counterpart.
<PAGE>
Section 11.3. Amendments.
A. In addition to the amendments otherwise authorized herein, amendments
may be made to this Agreement from time to time by the General Partner with the
Consent of the Limited Partners; provided, however, that without the consent of
all of the Partners, this Agreement may not be amended so as to (i) convert the
Interest of a Limited Partner into a General Partner's Interest; (ii) modify the
limited liability of a Limited Partner; (iii) alter the Interest of a Partner in
Net Profits, Net Losses, gains from a sale or losses from a sale or
distributions of Cash Flow (except in connection with the admission or
withdrawal of a Partner to or from the Partnership); (iv) reduce the percentage
of Partners which is required to consent to any action hereunder; (v) permit the
General Partner to take any action prohibited by Section 5.2; or (vi) modify
this Section 11.3A. In addition to the amendments otherwise authorized herein,
amendments may be made to this Agreement from time to time by the General
Partner without notification to or Consent of the Limited Partners solely to
cure any ambiguity, defect or inconsistency in this Agreement.
B. If this Agreement shall be amended as a result of adding or substituting
a Limited Partner, the amendment to this Agreement shall be signed by the
General Partner and by the Person to be substituted or added and, if a Limited
Partner is to be substituted, by the assigning Limited Partner. If this
Agreement shall be amended to reflect the withdrawal of the General Partner when
the business of the Partnership is being continued, such amendment shall be
signed by the successor General Partner.
C. In making any amendments, there shall be prepared and filed for
recordation by the General Partner such documents and certificates as shall be
required to be prepared and filed under the Act and under the laws of any other
jurisdictions under which the Partnership is then formed or qualified.
Section 11.4. Binding Provisions.
The covenants and agreements contained herein shall be binding upon, and
inure to the benefit of, the heirs, executors, administrators, personal
representatives, successors and assigns of the respective parties hereto.
Section 11.5. Applicable Law.
This Agreement shall be construed and enforced in accordance with the laws
of the State of Delaware.
Section 11.6. Separability of Provisions.
Each provision of this Agreement shall be considered separable and if for
any reason any provision or provisions hereof are determined to be invalid and
contrary to any existing or future law, such invalidity shall not impair the
operation of or affect those portions of this Agreement which are valid.
<PAGE>
Section 11.7. Arbitration.
Each Partner hereby agrees that any dispute or claim he, she or it may have
with or against another Partner relating to the Partnership or its business, or
between any Partner and the Partnership, shall not be the subject of litigation
but shall instead be submitted to binding arbitration pursuant to the rules of
the American Arbitration Association, Naples, Florida office, or another private
arbiter mutually satisfactory to the parties to the dispute. Each Partner hereby
further agrees that the losing party in any such arbitration shall pay the other
party's costs, including reasonable legal and other professional fees, paid or
incurred in defending against any such dispute or claim.
Section 11.8. Entire Agreement.
This Agreement constitutes the entire agreement among the parties; it
supersedes any prior agreement or understandings among them, oral or written,
all of which are hereby cancelled. This Agreement may not be modified or amended
other than as provided in Section 11.3.
Section 11.9. Headings, Etc.
The headings in this Agreement are inserted for convenience of reference
only and will not affect interpretation of this Agreement. Whenever from the
context it appears appropriate, each term stated in either the singular or the
plural will include the singular and the plural, and pronouns stated in the
neuter gender will include the masculine, the feminine, and the neuter.
Section 11.10. No Waiver.
The failure of any Partner to seek redress for violation or to insist on
strict performance, of any covenant or condition of this Agreement will not
prevent a subsequent act that would have constituted a violation from having the
effect of an original violation.
Section 11.11. Legends.
If certificates are issued evidencing a Limited Partnership Interest, each
certificate will bear legends as may be required by applicable federal and state
laws, or as may be deemed necessary or appropriate by the General Partner to
reflect restrictions upon transfer contemplated herein.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
GENERAL PARTNER:
CLP, Inc.
By:_____________________________
Abraham D. Gosman, President
<PAGE>
CHANCELLOR PARTNERS LIMITED PARTNERSHIP II
Limited Partner Signature Page
------------------------------
The undersigned Limited Partner hereby executes the Agreement of Limited
Partnership of Chancellor Partners Limited Partnership II, agrees to be bound by
all of the provision of said Agreement, and authorizes the attachment of this
signature page to a counterpart of said Agreement executed by the General
Partner of said Partnership.
Dated as of: , 1997
-----------------------------
Andrew Gosman
<PAGE>
CHANCELLOR PARTNERS LIMITED PARTNERSHIP II
Limited Partner Signature Page
------------------------------
The undersigned Limited Partner hereby executes the Agreement of Limited
Partnership of Chancellor Partners Limited Partnership II, agrees to be bound by
all of the provision of said Agreement, and authorizes the attachment of this
signature page to a counterpart of said Agreement executed by the General
Partner of said Partnership.
Dated as of: , 1997
-----------------------------
Michael Gosman
<PAGE>
CHANCELLOR PARTNERS LIMITED PARTNERSHIP II
Limited Partner Signature Page
------------------------------
The undersigned Limited Partner hereby executes the Agreement of Limited
Partnership of Chancellor Partners Limited Partnership II, agrees to be bound by
all of the provisions of said Agreement, and authorizes the attachment of this
signature page to a counterpart of said Agreement executed by the General
Partner of said Partnership.
Dated as of: , 1997
CHANCELLOR PARTNERS BUSINESS TRUST
By: _____________________________
Michael M. Gosman, Trustee
By: _____________________________
Andrew D. Gosman, Trustee
<PAGE>
CHANCELLOR PARTNERS LIMITED PARTNERSHIP II
Schedule A
----------
Partners and Capital Contributions
----------------------------------
General Partner Capital Contribution Percentage Interest
- --------------- -------------------- -------------------
CLP, Inc. 14,632 shares of Common .4767%
Stock of CareMatrix Corp.
Limited Partners
Name Capital Contribution Percentage Interest
Chancellor Partners 3,054,618 shares of 99.5233%
Business Trust Common Stock of
CareMatrix Corp.
