SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D\A
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
CONSORTIUM G DINA GROUP, INC. (CONSORCIO G GRUPO DINA S.A. DE C.V.)
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(Name of Issuer)
SERIES L AMERICAN DEPOSITARY SHARES
-----------------------------------
(Title of Class of Securities)
210306-20-5
(Cusip Number)
RICHARD C. PFENNIGER, JR., 4400 BISCAYNE BOULEVARD
MIAMI, FL 33137 (305)575-6000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
-----------------------------------------
(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 the Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ] (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filed out for a reporting person's
initial 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).
(Continued on following page(s))
<PAGE>
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CUSIP NO. 210306-20-5 13D PAGE 2
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1 NAME OF REPORTING
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PHILIP FROST, M.D.
SS# ###-##-####
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2 Check the appropriate Box if a Member of a Group (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- -------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES BENEFI- 0
CIALLY OWNED BY
EACH REPORTING
PERSON WITH ----------------------------------------------------
8 SHARED VOTING POWER
2,099,703
----------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,099,703
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,099,703
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16%
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14 TYPE OF REPORTING PERSON
IN
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<PAGE>
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CUSIP NO. 210306-20-5 13D PAGE 3
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- ---------------------------- --------------------------------
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1 NAME OF REPORTING
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FROST-NEVADA, LIMITED PARTNERSHIP
IRS I.D. #59-2749083
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2 Check the appropriate Box if a Member of a Group (a) [X]
(b) [ ]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEVADA
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NUMBER OF 7 SOLE VOTING POWER
SHARES BENEFI- 0
CIALLY OWNED BY
EACH REPORTING
PERSON WITH ----------------------------------------------------
8 SHARED VOTING POWER
2,099,703
----------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,099,703
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,099,703
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16%
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14 TYPE OF REPORTING PERSON
PN
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<PAGE>
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CUSIP NO. 210306-20-5 13D PAGE 4
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- ---------------------------- --------------------------------
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1 NAME OF REPORTING
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FROST-NEVADA CORPORATION
IRS I.D. #59-2749057
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2 Check the appropriate Box if a Member of a Group (a) [X]
(b) [ ]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEVADA
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES BENEFI- 0
CIALLY OWNED BY
EACH REPORTING
PERSON WITH ----------------------------------------------------
8 SHARED VOTING POWER
2,099,703
----------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,099,703
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,099,703
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16%
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14 TYPE OF REPORTING PERSON
CO
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<PAGE>
Item 1. SECURITY AND ISSUER.
This is Amendment No. 5 to the Schedule 13D previously filed
by Phillip Frost, M.D., Frost-Nevada, Limited Partnership (the "Partnership"),
and Frost-Nevada Corporation (collectively, the "Reporting Persons"), with
respect to Series L American Depositary Shares (the "Shares") of Consorcio G
Grupo Dina, S.A. de C.V. (the "Issuer"). Each Share represents four shares of
Series L Stock of the Issuer. The principal executive offices of the Issuer are
located at Tlacoquemecatl 41, Col. del Valle 03100, Mexico City, Mexico.
Information regarding each of the Reporting Persons is set forth below.
Item 2. IDENTITY AND BACKGROUND.
Item 2 is amended and restated in its entirety as follows:
Dr. Frost's present principal occupation is as Chairman of the
Board of Directors and Chief Executive Officer of IVAX Corporation, a Florida
corporation, which through its subsidiaries is engaged primarily in the
research, development, manufacturing, marketing and distribution of health care
products. Dr. Frost's principal business address is 4400 Biscayne Boulevard,
Miami, Florida 33137.
The Partnership is a limited partnership organized and
existing under the laws of the State of Nevada with its principal office and
business address located at 3500 Lakeside Court, Suite 200, Reno, Nevada 89509.
The principal business of the Partnership is the investment in marketable
securities, precious metals and commodities and real estate located in Nevada.
Frost-Nevada Corporation is the sole general partner, and Dr. Frost is the sole
limited partner, of the Partnership.
Frost-Nevada Corporation is a corporation organized and
existing under the laws of the State of Nevada with its principal office and
business address located at 3500 Lakeside Court, Suite 200, Reno, Nevada 89509.
The principal business of Frost-Nevada Corporation is acting as the general
partner of the Partnership. Dr. Frost is the sole shareholder and a director of
Frost-Nevada Corporation. Neil Flanzraich is a director and the sole officer of
Frost- Nevada Corporation. Neil Flanzraich's present principal occupation is as
an attorney with the law firm of Heller, Ehrman, White & McAuliffe. Mr.
Flanzraich's principal business address is 525 University Avenue, Palo Alto,
California 94301-1900.
To the best knowledge of each of the Reporting Persons,
neither such Reporting Person nor Mr. Flanzraich has been convicted in any
criminal proceeding (excluding traffic violations and similar misdemeanors), or
was a party to any civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activity subject to, federal or state securities laws or finding any violation
with respect to such laws during the last five years. Each of Dr. Frost and Mr.
Flanzraich is a citizen of the United States.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is amended and supplemented as follows:
The aggregate purchase price of Shares of the Issuer purchased
by the Partnership and Phillip Frost, M.D. reported in this Amendment No. 5,
including the payment of commissions, was $271,455.25 and $848,020.12,
respectively. The source of funds used by the Partnership and Phillip Frost,
M.D. in making these purchases was working capital of the
Page 5
<PAGE>
Partnership and the personal funds of Phillip Frost, M.D. No portion of the
consideration used by the Partnership or Phillip Frost, M.D. in making the
purchases described above was borrowed or otherwise obtained for the purpose of
acquiring, holding, trading or voting the Shares.
Item 4. PURPOSE OF TRANSACTION.
Item 4 is amended in its entirety and restated as follows:
The Shares were acquired by one or more of the Reporting
Persons as an investment. The Reporting Persons intend to monitor their
investment in the Shares on a continuing basis. The Reporting Persons may
acquire additional Shares (subject to availability of Shares at prices deemed
favorable) in the open market, in privately negotiated transactions, by tender
offer or otherwise. Alternatively, the Reporting Persons reserve the right to
dispose of some or all of their Shares in the open market or in privately
negotiated transactions or otherwise depending upon the course of actions that
the Reporting Persons or the Issuer pursue, market conditions and other factors.
Although the foregoing represents the range of activities presently contemplated
by the Reporting Persons with respect to the Shares, it should be noted that the
possible activities of the Reporting Persons are subject to change at any time.
Except as otherwise stated herein, none of the Reporting
Persons have any present plans or proposals which relate to or would result in
any of the actions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is amended in its entirety and restated as follows:
AMOUNT OF SHARES PERCENTAGE
NAME BENEFICIALLY OWNED CLASS*
---- ------------------ ----------
Phillip Frost, M.D. 2,099,703** 16%
Frost-Nevada Corporation 2,099,703** 16%
Frost-Nevada, Limited 2,099,703** 16%
Partnership
- ----------------------------
* Based on 13,111,631 Shares outstanding on February 28, 1996, as
reported verbally by Morgan Guaranty Trust Company of New York, the
depositary of the Shares.
** These Shares are owned of record by one or more of the Reporting
Persons. As the sole limited partner of the Partnership and the sole
shareholder and a director of Frost-Nevada Corporation, the general
partner of the Partnership, Dr. Frost may be deemed a beneficial owner
of the Shares. Record ownership of the Shares may be transferred from
time to time among any or all of the Reporting Persons. Accordingly,
solely for purposes of reporting beneficial ownership of the Shares
pursuant to section 13(d) under the Securities Exchange Act of 1934, as
amended, each Reporting Person will be deemed to be the beneficial
owner of Shares held by any other Reporting Person.
The Partnership shares the power to vote or dispose of the Shares
beneficially owned by it with Frost-Nevada Corporation and Dr. Frost.
Frost-Nevada Corporation, in its capacity as the general partner of the
Partnership, has the power to vote or direct the vote of
Page 6
<PAGE>
these Shares or to dispose or direct the disposition of these Shares for the
Partnership. Frost-Nevada Corporation will be deemed the beneficial owner of the
Shares owned by the Partnership by virtue of this relationship to the
Partnership. Dr. Frost, in his capacity as the sole shareholder and a director
of Frost-Nevada Corporation, the general partner of the Partnership, will be
deemed the beneficial owner of all Shares owned by the Partnership by virtue of
his power to vote or direct the vote of the Shares or to dispose or direct the
disposition of the Shares owned by the Partnership.
Other than as reported on Exhibit 2 attached hereto, none of
the Reporting Persons has engaged in any transaction involving Shares of the
Issuer during the past sixty days.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as described herein, none of the Reporting Persons is a
party to any contract, arrangement, understanding or relationship with any
person with respect to any securities of the Issuer.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement
2. Description of transactions in the Issuer's Shares by
Frost-Nevada, Limited Partnership.
3. Description of transactions in the Issuer's Shares by Phillip
Frost, M.D.
4. Power of Attorney granted to Phillip Frost, M.D. by Neil
Flanzraich.
5. Second Amended and Restated Agreement of Frost-Nevada,
Limited Partnership, Frost-Nevada Corporation and Phillip
Frost, M.D. filed pursuant to Rule 13d-l(f)(l)(iii) of the
Securities and Exchange Commission.
Page 7
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
Statement is true, complete and correct.
/s/ Phillip Frost, M.D.
---------------------------
Date: June 19, 1996 Phillip Frost, M.D.
FROST-NEVADA, LIMITED
PARTNERSHIP
*
--------------------------
Date: June 19, 1996 Neil Flanzraich
President of Frost-Nevada Corporation,
General Partner
FROST-NEVADA CORPORATION
*
--------------------------
Date: June 19, 1996 Neil Flanzraich
President
*By /s/ Phillip Frost, M.D.
--------------------------
Phillip Frost, M.D.
(Attorney-in-fact pursuant
to Power of Attorney)
Page 8
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
1 Joint Filing Agreement
2 Description of transactions in the Issuer's Shares by
Frost-Nevada, Limited Partnership.
3 Description of transactions in the Issuer's Shares by Phillip
Frost, M.D.
4 Power of Attorney granted to Phillip Frost, M.D. by Neil
Flanzraich.
5 Second Amended and Restated Agreement of Frost-Nevada,
Limited Partnership, Frost-Nevada Corporation and Phillip
Frost, M.D. filed pursuant to Rule 13d-l(f)(l)(iii) of the
Securities and Exchange Commission.
EXHIBIT 1
The undersigned hereby agree that this Amendment to the Schedule 13D
filed by us with respect to the Series L American Depositary Shares of Consorcio
G Grupo Dina, S.A. de C.V. is filed on behalf of each of us.
/s/ Phillip Frost, M.D.
---------------------------
Date: June 19, 1996 Phillip Frost, M.D.
FROST-NEVADA, LIMITED
PARTNERSHIP
*
--------------------------
Date: June 19, 1996 Neil Flanzraich
President of Frost-Nevada Corporation,
General Partner
FROST-NEVADA CORPORATION
*
--------------------------
Date: June 19, 1996 Neil Flanzraich
President
*By /s/ Phillip Frost, M.D.
--------------------------
Phillip Frost, M.D.
(Attorney-in-fact pursuant
to Power of Attorney)
EXHIBIT 2
Set forth below is a summary of transactions in the Series L American
Depositary Shares of the Issuer (each such Share representing four shares of
Series L Stock of the Issuer) by Frost-Nevada, Limited Partnership effected from
December 23, 1995 through the date of this Amendment No. 5. All transactions
were open market purchases and sales effected on the New York Stock Exchange.
Number of Shares
PRICE PER
DATE ACQUIRED DISPOSED SHARE
- ---- -------- -------- ---------
12/26/95 60,000 1.00
12/26/95 11,900 .9375
12/27/95 300,000 1.00
12/27/95 90,000 1.125
12/28/95 100,000 1.00
12/28/95 303,000 1.00
12/28/95 13,700 1.125
12/29/95 41,400 1.25
EXHIBIT 3
Set forth below is a summary of transactions in the Series L American
Depositary Shares of the Issuer (each such Share representing four shares of
Series L Stock of the Issuer) by Phillip Frost, M.D. effected December 23, 1995
through the date of this Amendment No. 5. All transactions were open market
purchases effected on the New York Stock Exchange.
NUMBER OF SHARES PRICE PER
DATE ACQUIRED SHARE
- ---- ---------------- ---------
1/2/96 58,000 1.375
1/3/96 10,000 1.50
1/4/96 5,000 1.625
1/5/96 15,400 1.50
1/8/96 13,200 1.6231
1/10/96 42,000 1.50
1/11/96 5,000 1.50
1/18/96 2,400 1.375
1/19/96 7,600 1.375
1/25/96 30,000 1.375
1/26/96 200 1.25
2/2/96 20,000 1.375
2/2/96 8,000 1.25
2/9/96 17,800 1.25
2/12/96 9,000 1.25
2/13/96 18,000 1.125
2/20/96 20,000 1.25
2/26/96 36,600 1.125
2/28/96 400,000 1.00
EXHIBIT 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, in his capacity
as President of Frost-Nevada Corporation, a Nevada corporation (the
"Corporation"), does hereby make, constitute and appoint PHILLIP FROST, M.D. his
true and lawful attorney-in-fact, for him and in his name, place and stead, for
the sole and limited purpose of signing any and all statements or reports
pursuant to the Securities Exchange Act of 1934, and any amendments thereto, on
behalf of the Corporation, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 24th day of May, 1996.
/s/ Neil Glanzraich
--------------------------
NEIL FLANZRAICH, President
SECOND
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
FROST-NEVADA LIMITED PARTNERSHIP
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP (the "Agreement") is made and entered into as of the 28th day of
December, 1995, by and among FROST-NEVADA CORPORATION, a Nevada corporation, as
the general partner (the "General Partner") and PHILLIP FROST, as the limited
partner (the "Limited Partner").
W I T N E S S E T H:
WHEREAS, on December 30, 1986, the General Partner executed a
Certificate of Limited Partnership forming a limited partnership known as
"Frost-Nevada Limited Partnership" (the "Partnership"), under the Nevada Uniform
Limited Partnership Act (the "Act") as in effect at that time in the State of
Nevada, which Certificate of Limited Partnership was filed in the Public Records
of the Secretary of State of Nevada on December 30, 1986; and
WHEREAS, the General Partner and Limited Partner have
previously executed a First Amended and Restated Certificate of Limited
Partnership of FROST-NEVADA LIMITED PARTNERSHIP on February 16, 1987 and a
certificate thereof was filed m the Public Records of the Secretary of State of
Nevada on March 16, 1989;
WHEREAS, the General Partner and the Limited Partner have
executed this Second Amended and Restated Agreement of Limited Partnership of
FROST-NEVADA LIMITED PARTNERSHIP as of December 28, 1995; and
WHEREAS, this Agreement, dated as of December 27, 1995, is
made and entered into by and between the General Partner and the Limited Partner
for the purpose of setting forth the rights, obligations, and duties of the
General Partner and the Limited Partner.
NOW, THEREFORE, the parties hereto hereby agree that the
Partnership shall be governed and operated pursuant to the terms of this
Agreement of Limited Partnership as hereinafter set forth.
<PAGE>
ARTICLE I
NAME, TERM, PRINCIPAL ADDRESS AND REGISTERED AGENT
1.1 NAME. The name of the Partnership is the FROST-NEVADA
LIMITED PARTNERSHIP.
1.2 TERM. The term of the Partnership will continue in full force
and effect until December 31, 2055, unless sooner terminated in accordance with
the Act (as such term is defined herein) or provisions of this Agreement.
1.3 PRINCIPAL PLACE OF BUSINE/section/ The office and principal
place of business of the Partnership shall be maintained at 3500 Lakeside Court
Reno, Washoe County, Nevada 89509. The General Partner may from time to time
change such office and principal place of business and in such event the General
Partner shall notify the other Partners, in writing, at least ten (10) days
prior to the effective date of any such change. The General Partner may
establish additional places of business of the Partnership when and where
required by the Partnership's busine/section/
1.4 ADDRESSES. The address of each Partner is as follows:
GENERAL PARTNER:
Frost-Nevada Corporation
3500 Lakeside Court
Reno, Nevada 89509
LIMITED PARTNER:
Phillip Frost, M.D.
8800 N.W. 36th Street
Miami, Florida 33178
A Partner may change its address by written notice to the Partnership and each
of the other Partners.
1.5 REGISTERED OFFICE AND REGISTERED AGENT. The location of the
Registered Office of the Partnership shall be at 3500 Lakeside Court, Reno,
Nevada 89509 and the name of the Registered Agent of the Partnership at such
office shall be Walther, Key, Maupin, Oats, Cox, Klaich & Legoy. Said Registered
Agent shall keep and maintain at such address the records of the Partnership
required to be kept and maintained at such address by the Act.
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<PAGE>
ARTICLE II
BUSINESS OF THE PARTNERSHIP
2.1 PURPOSE. The purpose of the Partnership is to invest in all
types of (i) securities, including without limitation, stocks, bonds, limited
partnership interests and option contracts for the purchase or sale of
securities or any group or index of securities, (ii) precious metals, including
without limitation, contracts for the future delivery of precious metals and
option contracts for the purchase or sale of precious metals or futures
contracts on precious metals; (iii) commodities, including without limitation,
contracts for the future delivery of commodities and option contracts for the
purchase or sale of commodities or future contracts on commodities, and (iv)
real property on the State of Nevada through the acquisition, holding,
construction, development, operation, improvement, leasing, sale or other
dealings in real property.
2.2 POWERS. Incident to its purpose, the Partnership is authorized
to purchase, invest, hold, mortgage, pledge, sell, lease, manage, construct,
renovate, operate, improve, alter, transfer, joint venture or otherwise convey
and encumber all or any portion of the Partnership properties and exercise all
other rights, powers and privileges and other incidences of ownership with
respect thereto at any time and from time to time, to borrow or raise moneys
without limitations and to do all other things necessary or appropriate to carry
out the foregoing purpose.
ARTICLE III
CERTAIN DEFINITIONS
3.1 ACT. The Revised Nevada Uniform Limited Partnership
Act, as from time to time amended.
3.2 ADJUSTED CAPITAL CONTRIBUTION. The amount contributed
to the capital of the Partnership by a Partner as provided in
Article IV.
3.3 AFFILIATE. Any person or entity that directly or indirectly
controls, is controlled by or is under common control with any other person or
entity. For this purpose, the term "control" shall mean the direct or indirect
ownership of twenty-five (25 %) or more of the beneficial interests or voting
power of any entity or the spouse, lineal ascendants, lineal descendants and the
brothers and sisters of a Person, as applicable.
3.4 AUTHORIZED EXPENSES. Expenses that: (a) are specifically
consented to in writing by the Limited Partner; (b) are authorized as part of an
operating budget that is consented to in writing by the Limited Partner; or (c)
do not, when aggregated with all other Partnership expenses that are not
authorized by parts (a) or (b) above, total more than $2,500 in a single
calendar year.
- 3 -
<PAGE>
3.5 AVAILABLE CASH. All cash of the Partnership resulting from
normal business operations (as distinguished from Extraordinary Events or the
sale of all or substantially all of the Partnership's property and/or the
dissolution of the Partnership), including, without limitation, dividend income,
rental income, and any other income derived from the Partnership property which
the General Partner, in its sole and absolute discretion, determines is
available for distribution to the Partners after payment of all Partnership cash
expenditures, including but not limited to, real and personal property taxes,
use taxes, principal and interest payments then due on all loans, (including any
mortgages encumbering the Partnership's property), expenses incident to the
construction and rental of the Partnership property, insurance, present
maintenance, including, but not limited to management fees, brokerage fees, or
other fees incurred by the Partnership, capital improvements, accounting and
legal fees, and other costs and expenses of the Partnership, and the setting
aside of any amounts which the General Partner may determine, in its discretion,
to be necessary as a reserve for operating expenses, capital improvements and
contingencies.
3.6 CAPITAL ACCOUNT. The account established and maintained by the
Partnership for each Partner, as set forth in Section 4.6 hereof.
3.7 CAPITAL CONTRIBUTION. The amount of money and the initial
fair market value of any property (other than money) contributed to the
Partnership by a Partner with respect to the Partnership Interest held by such
Partner.
3.8 CERTIFICATE. The certificate of limited partnership filed
with the Secretary of State of the State of Nevada, as the
same may be amended from time to time.
3.9 CODE. The Internal Revenue Code of 1986, as same may be
amended from time to time.
3.10 EXTRAORDINARY EVENT. Any financing, refinancing, insurance
award (other than for substantially complete destruction of all or substantially
all of the Partnership's property) and sale of Partnership assets (but less than
all or substantially all of such assets), which in accordance with generally
accepted accounting principles are attributable to capital but which do not
result in a dissolution of the Partnership.
3.11 ORIGINAL CAPITAL CONTRIBUTION. The amount contributed
to the capital of the Partnership by a Partner as provided in
Article IV.
3.12 PARTNERS. Collectively, the Limited Partner and
the General Partner.
3.13 PARTNERSHIP. FROST-NEVADA LIMITED PARTNERSHIP, a
Nevada limited partnership.
3.14 PARTNERSHIP INTEREST. The entire ownership interest
of a Partner in the Partnership at the relevant time, including the right of
such Partner to any and all benefits to which a Partner
-4-
<PAGE>
may be entitled as provided in this Agreement, together with the obligations of
such Partner to comply with all the terms and provisions of this Agreement. A
Partnership Interest does not include any rights or obligations that a Partner
may have for providing services or goods for which it is separately compensated
as a Person who is not a Partner.
3.15 PERSON. Any individual, corporation, trust,
partnership or other form of association.
3.16 PROFITS AND LOSSES. The Partnership's income or
loss, as the case may be, for each fiscal year of the Partnership determined in
accordance with Code Section 703(a) (including all items of income, gain,
deduction or loss that are required to be separately stated). The Partnership's
Profits and Losses shall also include: (i) income of the Partnership which is
exempt from tax; and (ii) the excess of the deductions for depletion over the
basis of the property subject to depletion. Similarly, the Partnership's Losses
shall include expenditures for the Partnership which are not deductible in
computing its taxable income and are not properly chargeable to a capital
account. Notwithstanding anything to the contrary in this Agreement, Profits and
Losses shall not include allocations under Code Section 704(c) (which are set
forth at Section 4.10 hereof or Regulatory Allocations).
3.17 REGULATORY ALLOCATIONS. The allocations set forth at
Sections 4.10, 4.11, 4.12, 4.13 and 4.15.
3.18 SERVICE. Internal Revenue Service.
3.19 SUBSTITUTED LIMITED PARTNER. A person who has acquired a
Partnership Interest from a Limited Partner and who has been admitted to the
Partnership as a Limited Partner pursuant to Article VI.
ARTICLE IV
CONTRIBUTIONS TO CAPITAL; DISTRIBUTIONS; ALLOCATIONS
4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS.
4.1.1 CAPITAL CONTRIBUTIONS OF THE GENERAL PARTNER. The
General Partner has contributed $1,085,690.23 in marketable securities to the
Partnership.
4.1.2 CAPITAL CONTRIBUTIONS OF THE LIMITED PARTNER. The
Limited Partner has contributed the assets set forth at Exhibit 4.1.2.
4.2 WITHDRAWAL AND RETURN OF CAPITAL. Except upon the dissolution
and liquidation of the Partnership, a Partner shall have no right to withdraw
any of its Capital Contributions without the consent of the General Partner.
Under circumstances requiring a return of a
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Partner's Capital Contributions, no Partner shall have the right to receive
property other than cash except as may be specifically provided herein.
4.3 ADDITIONAL CAPITAL CONTRIBUTIONS. The Partnership may
accept additional Capital Contributions to the extent that such
contributions are authorized by the General Partner and are in
accordance with the requirements of Section 5.3 hereof.
4.4 LOANS TO THE PARTNERSHIP. The Partners may make loans to the
Partnership from time to time, as authorized by the General Partner (subject to
the requirements of Section 5.3 hereof), in excess of their contributions to the
capital of the Partnership, and any such loans shall not be treated as a
contribution to the capital of the Partnership for any purposes hereunder, nor
shall any such loans entitle such Partner to any increase in his share of the
profits, losses or distributions of the Partnership. The amount of any such loan
shall be an obligation of the Partnership to such Partner and shall bear
interest at a rate agreed to by the General Partner. Any such loan shall be
repaid prior to any distributions being made to the Partners pursuant to
Sections 4.8.2 and 9.3 hereof.
4.5 CAPITAL ACCOUNTS. A separate Capital Account shall be
determined and maintained for each Partner in accordance with the rules of
Treas. Reg. /section/1.704-l(b)(2)(iv). Except as otherwise provided in Treas.
Reg. /section/1.704-l(b)(2)(iv), each Partner's Capital Account shall initially
consist of such Partner's Capital Contribution and shall be further credited
with each Partner's additional Capital Contributions and allocable share of the
Partnership's income, as determined in Section 4.6 below, and shall be debited
by all distributions made by the Partnership to a Partner together with each
such Partner's allocable share of the Partnership's losses, as determined in
Section 4.6 below. In the event that the Partnership, in conformity with the
above Regulations, has property on its books at a value ("book value") greater
than or less than its adjusted tax basis, the Partners' Capital Accounts shall
be adjusted to reflect only allocations to them of depreciation, amortization
and gain or loss as computed for book purposes (and not for tax purposes) with
respect to such property. In such event, items of book depreciation,
amortization and gain or loss shall be calculated in conformity with the rules
of Treas. Reg. /section/1.704-l(b)(2)(iv)(g). For purposes of calculating a
Partner's Capital Account, the following adjustments shall be included as
Profits and Losses:
(a) any and all adjustments made to Capital Accounts
pursuant to Treas. Reg. /section/1.704-l(b)(2)(iv)(f)
(optional revaluation of Capital Accounts), as it-
may be amended or supplemented from time to time;
(b) any and all adjustments made to Capital Accounts
pursuant to Treas. Reg. /section/1.704-l(b)(2)(iv)(e)
(adjustment resulting from property distribution), as
it may be amended or supplemented from time to time;
and
(c) any and all adjustments made to Capital Accounts
pursuant to Treas. Reg. /section/1.704-l(b)(2)(iv)
(n)(4) (as it may be amended or supplemented from
time
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to time), as it relates to distributions other
than in liquidation of a Partner's Interest in
the Partnership.
4.6 ALLOCATION OF INCOME AND LOSSES.
All items of Profits and Losses incurred by the Partnership
shall be allocated to the Partners as follows:
General Partner 1 %
Limited Partner 99 %
4.7 PRINCIPLES OF ALLOCATION. It is the intention of the Partners
that the allocations of Profits and Losses hereunder have substantial economic
effect in accordance with the tests therefor set forth in the Treasury
Regulations under Section 704(b) of the Internal Revenue Code. Accordingly,
allocations not specifically provided for in this Agreement shall be made in
such a manner as shall conform to the allocation rules and principles as set
forth in such Regulations as in effect from time to time, and the Capital
Accounts of the Partners shall be maintained in accordance with the provisions
hereof construed and interpreted in the light of such Regulations.
4.8 DISTRIBUTIONS.
4.8.1 Available Cash shall be distributed periodically, as
determined by the General Partner in its sole discretion, to the Partners as
follows:
General Partner 1 %
Limited Partner 99%
4.8.2 Net Proceeds from an Extraordinary Event which are
not reinvested in other real property shall, to the extent determined by the
General Partner as being available for distribution, be distributed as
expeditiously as possible, in the following order of priority:
(a) first, to the payment of any unpaid
principal and interest on any third-party financing then
due;
(b) next, to the prepayment of any unpaid
principal and interest on any third-party financing, if and
to the extent determined by the General Partner;
(c) next, to the repayment of any loans made by
the Partners to the Partnership pursuant to Section 4.4 hereof, in-
proportion to the total amount of principal and interest payable to
each such Partner, such distributions being treated first as in payment
of accrued interest on such loans and next as in payment of principal
of such loans:
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(d) next, to the Partners in proportion to their
positive capital account balances until such Capital Account balances
have been reduced to zero; and
(e) the balance, if any, as follows:
General Partner 1 %
Limited Partner 99 %
4.8.3 Distributions in connection with the sale of all or
substantially all of the Partnership's property and/or the dissolution and
winding up of the Partnership shall be made in accordance with Section 9.3 of
this Agreement.
4.8.4 The Partnership, with the Partners' mutual consent,
may make additional distributions of Partnership property.
4.9 ALLOCATIONS OF CERTAIN TAX ITEMS. If the fair market value of
any Partnership property differs from its adjusted basis as of the day it is
contributed to the Partnership, then items of income, gain, loss, deductions and
credit related to such property for tax purposes shall be allocated between the
Partners so as to take into account the variation between the adjusted basis of
the property for tax purposes and its fair market value in the manner provided
for under Code Section 704(c). Except as may be otherwise required by Code
/section/ 704(c), depreciation, amortization and gain or loss, as computed for
tax purposes with respect to Partnership property which has a book value greater
or less than its adjusted tax basis, shall be allocated among the Partners in a
manner that takes into account the variation between the adjusted tax basis and
the book value of such property, in the same manner as variations between the
adjusted tax basis and fair market value of property contributed to the
Partnership are taken into account in determining the Partners' share of tax
items under Code /section/ 704(c), as required by Treas. Reg.
/section/1.704-l(b)(2) (iv)(f)(4) and Treas. Reg. /section/ 1.704-l(b)(4)(i). In
complying with the requirements of Code /section/ 704(c), the General Partner is
authorized to utilize any method permitted by the Treasury Regulations under
Code /section/ 704(c). Allocations pursuant to this Section 4.9 are solely for
purposes of complying with federal, state and local tax requirements, and shall
not affect, or in any way be taken into account, in computing any Partner's
share of income, gain, loss, deduction or credit.
4.10 MINIMUM GAIN CHARGEBACK. Notwithstanding any other provision
of this Article IV, if there is a net decrease in partnership minimum gain (as
such term is defined in Treas. Reg. /section/ 1.704-2(f)) during any Partnership
fiscal year, a Partner shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount equal
to its share of the net decrease in the minimum gain. The items to be so
allocated shall be determined in accordance with Section 1.704-2(f) of the
Treasury Regulations. This Section 4.10 is intended to comply with the minimum
gain chargeback requirement in such Section of the Treasury Regulations and
shall be interpreted consistently therewith.
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4.11 PARTNER NONRECOURSE DEDUCTIONS. Any partner nonrecourse
deductions for any fiscal year or other period shall be allocated to the Partner
who bears the risk of loss with respect to the loan to which such partner
nonrecourse deduction is attributable in accordance with Regulations Section
1.704-2(i), if such sections of the Regulations become applicable to the
Partnership. Partner nonrecourse debt minimum gain shall be charged back to the
Partners in accordance with Regulations Section 1.704-2(i)(4).
4.12 QUALIFIED INCOME OFFSET. In the event the Limited Partner
unexpectedly receives any adjustments, allocations, or distributions described
in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations, items of Partnership income
and gain shall be specially allocated to each such Partner in an amount and
manner sufficient to eliminate, to the extent required by the Regulations, the
adjusted capital account deficit (as such term is used in Section 1.704-2(fl of
the Treasu--rtner as quickly as possible,-`provided that an allocation pursuant
to this Section 4.12 shall be made only if and to the extent that the Limited
Partner would have an adjusted capital account deficit after all other
allocations provided for in this Article IV have been tentatively made as if
this Section 4.12 were not in the Agreement. This Section 4.12 is intended to
constitute a "qualified income offset" within the meaning of Section
1.704-1(b)(2)(ii)(d)(3) of the Treasury Regulations, and is to be interpreted,
to the extent possible, to comply with the requirements of such Regulation as it
may be amended or supplemented from time to time.
4.13 LOSS LIMITATION. The Losses allocated to the Limited Partner
pursuant to Section 4.7 hereof shall not exceed the maximum amount of Losses
that can be so allocated without causing the Limited Partner to have a deficit
Capital Account at the end of any Fiscal Year after: (a) increasing a Limited
Partner's Capital Account by amounts that he is obligated to restore pursuant to
this Agreement or is deemed obligated to restore pursuant to the penultimate
sentences of Treas. Reg. /section/ 1.704-2(g)(1) and 1.704-2(i)(5), as they may
be amended or supplemented from time to time; and (b) decreasing a Limited
Partner's Capital Account by the items described in Treas. Reg. /section/
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(d)(5) and 1.704- 1(b)(2)(d)(6), as it may
be amended or supplemented from time to time (an "Adjusted Deficit Capital
Account"). All Losses in excess of the limitations set forth in this Section
4.13 shall be allocated to the General Partner.
4.14 FUTURE AMENDMENTS; REVALUATION OF PARTNERSHIP PROPERTY. The
General Partner will have complete discretion to amend the provisions of this
Agreement if such amendment would not have a material adverse effect on the
Partners and if, in the opinion of counsel for the Partnership, such amendment
is advisable for purposes of complying with Section 1.704-1 and 1.704-2 of the
Treasury Regulations (as it may be amended or supplemented from time to time).
The General Partner may, in its sole and absolute discretion, revise the
Partners' Capital Accounts to reflect a revaluation of the Partnership property,
provided that the revaluation adheres to the requirements of Section
1.704-1(b)(2)(iv)(fl of the Treasury Regulations.
4.15 GROSS INCOME ALLOCATION. In the event the Limited Partner has
a deficit Capital Account at the end of any Partnership fiscal year which is in
excess of the sum of (i) the amount
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the Limited Partner is obligated to restore pursuant to any provision of this
Agreement, and (ii) the amount the Limited Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Treas. Reg. /section//section/
1.704-2(g)(1) and 1.704-2(i)(5), the Limited Partner shall be specially
allocated items of Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this Section 4.15
shall be made only if and to the extent that the Limited Partner would have a
deficit Capital Account in excess of such sum after all other allocations
provided for in this Article 4 have been made, as if Article 4.12 hereof and
this Section 4.15 were not in the Agreement.
4.16 CURATIVE ALLOCATIONS. In the event that income, loss or items
thereof are allocated to one or more Partners pursuant to Sections 4.10, 4.11,
4.12, 4.13, and 4.15, above, subsequent income and loss first will be allocated
(subject to the provisions of Sections 4.10, 4.11, 4.12, 4.13, and 4.15) to the
Partners in a manner designed to result in each Partner having a Capital Account
balance equal to what it would have been if the original allocation of income or
loss pursuant to Sections 4.10, 4.11, 4.12, 4.13, and 4.15 had not occurred.
ARTICLE V
MANAGEMENT OF THE PARTNERSHIP
5.1 RIGHTS AND DUTIES OF THE GENERAL PARTNER. Except as otherwise
provided herein, the General Partner shall have full, exclusive and complete
authority and discretion in the management and control of the business of the
Partnership and shall make all decisions affecting the business of the
Partnership. Further, the General Partner shall have all of the rights and
powers of a general partner as provided in the Act and as otherwise provided by
law or this Agreement, and any action taken by the General Partner shall
constitute the act of and serve to bind the Partnership. The General Partner
shall manage and control the affairs of the Partnership to the best of its
ability and shall use its best efforts to carry out the business of the
Partnership as set forth in Article II.
5.2 PARTNERSHIP CHECKS. Any check or checks to be made or issued
by the Partnership (with respect to any transaction or series of related
transactions) shall require the signature of a person who is designated as an
authorized signatory by the General Partner. Notwithstanding the foregoing, the
General Partner may delegate its check signing authority to any other person and
the exercise of the authority granted pursuant to such delegation shall
constitute the act of the General Partner who delegated such authority.
5.3 LIMITATIONS ON POWERS OF GENERAL PARTNER. Notwithstanding the
generality of Section 5.1 hereof, the General Partner shall not be empowered,
without the written consent of the Limited Partner, to:
(a) do any act in contravention of this Agreement;
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(b) change or reorganize the Partnership into any
other legal form;
(c) sell, exchange, encumber, assign, pledge, or
otherwise transfer or grant a security interest in any or all of the
assets of the Partnership;
(d) incur, renew, extend, refinance, pay, or
otherwise discharge indebtedness of the Partnership, other than in the
ordinary course of the Partnership's business hereof;
(e) pay or incur expenses (including) that do not
qualify as Authorized Expenses;
(f) settle a lawsuit or any other dispute (including,
but not limited to, a dispute concerning the income tax liabilities
associated with income and loss reported by the Partnership);
(g) enter into an insurance policy;
(h) agree to lease a rental space;
(i) set aside a reserve;
(j) confess a judgment against the Partnership;
(k) amend this Agreement except as provided for in
Section 4.14;
(1) require additional Capital Contributions from one
or more of the Partners; or
(m) offer additional Partnership Interests.
5.4 ROLE OF LIMITED PARTNER. The Limited Partner shall not
participate in or have any control over the Partnership business or shall have
any authority or right to act for or bind the Partnership. The Limited Partner
hereby consents to the exercise by the General Partner of the powers conferred
upon it by this Agreement.
5.5 DUTIES AND OBLIGATIONS OF GENERAL PARTNER.
5.5.1 As more fully set forth in Section 5.1 hereof, the
General Partner shall take all actions which may be necessary or appropriate for
the continuation of the Partnership's valid existence as a limited partnership
under the laws of the State of Nevada and to enable the Partnership to conduct
the business in which it is engaged.
5.5.2 The General Partner shall devote such time to the
Partnership as may be sufficient for the proper performance of its duties
hereunder.
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5.6 PARTNERSHIP AGREEMENTS WITH AFFILIATES OF GENERAL PARTNER. The
General Partner may utilize the services of Affiliates, as designated by the
General Partner. Affiliates of the General Partner may be engaged to perform
services, including but not limited to, the following: investment advice,
renovation, marketing, acquisition of insurance, obtaining of financing,
recordkeeping, participation at shareholder meetings, data processing,
procurement of licenses, services ordinarily performed by independent
contractors, and other administrative activities. The validity of any
transaction, agreement or payment involving the Partnership and any Affiliate of
the General Partner otherwise permitted by the terms of this Agreement shall not
be affected by reason of the relationship between the General Partner and such
Affiliate or the approval of said transaction, agreement or payment by the
General Partner.
5.7 PAYMENT OF EXPENSES. All expenses of the Partnership shall be
paid by the Partnership. In the event the Partnership expenses are not billed
directly to and paid by the Partnership, it shall reimburse the General Partner
or pay their respective Affiliates for such expenses, including but not limited
to: (a) organizational costs, including, legal and accounting fees; (b) the
actual cost to the General Partner of goods, services and materials used for or
by the Partnership; and (c) all other direct expenses actually incurred by the
General Partner or their respective Affiliates for or on behalf of the
Partnership.
5.8 INDEMNIFICATION OF THE GENERAL PARTNER. The General Partner
and all Affiliates of the General Partner and their respective shareholders,
partners, officers, directors and employees (hereinafter referred to
individually as an "Indemnitee") shall not be liable to the Partnership or any
other Partner for any loss incurred in connection with any action or inaction of
an Indemnitee, if such Indemnitee, in good faith, determined that such course of
conduct was in the best interest of the Partnership and did not constitute
negligence of such Indemnitee. An Indemnitee shall be indemnified and held
harmless by the Partnership against any and all losses, judgments, liabilities,
expenses, costs (including attorney's fees) actually and necessarily incurred by
said Indemnitee in connection with the defense of any suit or action (including,
without limitation, all costs of appeal) to which the Indemnitee is made a party
by reason of its position herein, to the fullest extent permitted under the
provisions of the Act or any other applicable statute. Nothing herein shall make
any Affiliate of the General Partner liable in any way for the acts, omissions,
obligations or liabilities of the General Partner.
5.9 TAX MATTERS PARTNER. If the Partnership is required by the
Code or the Treasury Regulations to have a Tax Matters Partner ("TMP"), the
General Partner shall serve as the TMP for the Partnership. The TMP agrees to
act as a liaison between the Partnership and the Service in connection with all
administrative and judicial proceedings involving tax controversies of the
Partnership, and agrees to assume all the rights and duties of a TMP as set
forth in the Code and the Regulations promulgated thereunder. These rights and
duties include, but are not limited to:
(a) the duty to notify and keep all other Partners
informed of all administrative and judicial proceedings, as required by
Section 6223(g) of the Code, and to furnish to
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each Partner, who so requests in writing, a copy of each notice or
other communication received by the TMP from the Service;
(b) the right to settle any claims by the Service
against the Partnership;
(c) the right to initiate judicial proceedings
contesting adverse determinations by the Service against
the Partnership;
(d) the right to enter into an agreement to extend
the statute of limitations;
(e) the right to employ experienced tax counsel to
represent the Partnership in connection with any audit or investigation
of the Partnership by the Service, and in connection with all
subsequent administrative and judicial proceedings arising out of such
audit. The fees and expenses of such counsel shall be a Partnership
expense and shall be paid by the Partnership. Such counsel shall be
responsible for representing the Partnership; it shall be the
responsibility of the General Partner and of the Limited Partner, at
their expense, to employ tax counsel to represent their respective
separate interests; and
(f) arrange for the preparation and delivery of
Partnership information returns and Schedule K's to the
Partners.
The TMP shall be entitled to be reimbursed for all expenses incurred when acting
in its capacity as TMP.
5.10 PARTNERSHIP BASIS ELECTIONS. In the event of a distribution of
property by the Partnership within the meaning of Section 734 of the Code, or
the transfer of any interest in the Partnership within the meaning of Section
743 of the Code, the General Partner, in its sole and absolute discretion, may
cause the Partnership to elect to adjust the basis of its assets pursuant to
Section 754 of the Code. The Partners affected by this election, if made, shall
supply to the Partnership any information that may be required to make such
election.
ARTICLE VI
LIABILITY OF PARTNERS AND TRANSFERABILITY OF INTERESTS
6.1 LIMITED LIABILITY OF LIMITED PARTNER. Except as otherwise
provided in the Act or any other applicable law, the Limited Partner is not
personally liable for the expenses, liabilities or obligations of the
Partnership beyond the amount of his Capital Contribution.
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6.2 TRANSFER OF LIMITED PARTNER'S INTEREST.
The Limited Partner shall not transfer, sell, encumber, assign
or otherwise dispose (a "Transfer") of any portion of his Partnership Interest.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNER AND THE
PARTNERSHIP. The General Partner and the Partnership jointly and severally
represent and warrant to the Limited Partner that, as of the date hereof, the
Partnership is duly and validly organized as a limited partnership under the
laws of the State of Nevada with full power and authority to own and operate its
property and to conduct the business in which it engages and will be authorized
and qualified under the laws of all other jurisdictions in which such
authorization or qualification is necessary to protect the limited liability of
the Limited Partner, to enable it to engage in its business, and to engage in
the business of the Partnership.
ARTICLE VIII
ADMISSION AND WITHDRAWAL OF GENERAL PARTNER
8.1 ADMISSION. The General Partner may select and admit additional
general partner(s), provided that the Limited Partner agrees upon the additional
general partner(s) to be admitted. Unless it shall be provided otherwise upon
the admittance of said additional general partner(s), said additional general
partner(s) shall be deemed to have acquired a share of the general partner's
interest hereunder, such that the additional general partner(s) shall not be
entitled to share in the net income, net loss or distributions of the
Partnership otherwise allocable to the Limited Partner hereunder.
8.2 WITHDRAWAL. The General Partner may withdraw from the
Partnership provided that the withdrawing General Partner shall give to the
Limited Partner ninety (90) days' prior written notice and, if necessary under
applicable rulings and regulations for the Partnership to be treated for federal
income tax purposes as a partnership and not as an association taxable as a
corporation, shall propose a new general partner or general partners qualified
and willing to manage the Partnership's business and with the minimum net worth
required. The withdrawing General Partner shall be entitled to receive the fair
market value of its interest upon the date of its withdrawal.
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ARTICLE IX
TERMINATION OF THE PARTNERSHIP
9.1 DISSOLUTION. The Partnership shall be dissolved upon
the happening of any of the following events:
(a) The adjudication of bankruptcy, filing of a
petition pursuant to a chapter of the Federal Bankruptcy Act, the
withdrawal, dissolution, or cessation of business of the General
Partner, death of an individual General Partner, if any, or any other
"event of withdrawal of a general partner" as such term is defined in
the Act, unless:
(i) the remaining General Partner(s), if
any, elects to continue the business of the Partnership or if
the remaining General Partner(s) does not so elect or if there
is no remaining General Partner, within sixty (60) days after
such event, the Limited Partner elects a substitute General
Partner to continue the business of the Partnership and such
substitute General Partner agrees in writing to accept such
election; and
(ii) in the case of the withdrawal of a
General Partner, the applicable provisions of Article
VIII shall have been complied with.
(b) The sale or other disposition, not including
an exchange, of all or substantially all of the
Partnership's property;
(c) The Transfer by any Partner of part or all
of its Partnership Interest; or
(d) The unanimous written consent of the
Partners.
9.2 EFFECTIVENESS. Dissolution of the Partnership shall be
effective on December 31, 2055, or the day on which the event occurs giving rise
to the dissolution, but the Partnership shall not terminate until the
Certificate shall have been cancelled and the assets of the Partnership shall
have been distributed as provided in Section 9.3 below. 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.
9.3 LIQUIDATION. Upon dissolution of the Partnership, the General
Partner shall wind up the affairs of the Partnership, apply and distribute its
assets or the proceeds thereof as contemplated by this Agreement and cause the
cancellation of the Certificate. As soon as possible after the dissolution of
the Partnership, a full account of the assets and liabilities of the Partnership
shall be taken, and a statement shall be prepared by a certified public
accountant
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to be selected by the General Partner, setting forth the assets and liabilities
of the Partnership. A copy of such statement shall be furnished to each of the
Partners within thirty (30) days after such dissolution. Thereafter, the General
Partner shall, in its sole and absolute discretion, either liquidate the assets
as promptly as is consistent with obtaining in so far as possible the fair value
thereof or determine to distribute all or part of the assets in kind. Any
proceeds from liquidation, together with any assets which the General Partner
determines to distribute in kind shall be applied to the following order:
(a) first, to the payment of debts and liabilities of the
Partnership other than to Partners, to the expenses of liquidation, and
to the setting up of such reserves as may be deemed reasonably
necessary for any known contingent or unforeseen liabilities or
obligations of the Partnership arising out of or in connection with the
Partnership or its liquidation. Such reserves shall be held for the
purpose of disbursement in payment of any of the aforementioned
contingencies, and at the expiration of such period as the General
Partner shall deem advisable, the Partnership shall distribute the
balance remaining in the manner provided for herein;
(b) next, to the repayment of any debts and liabilities
of the artnership to Partners not in respect of their Partnership
Interests, inluding, without limitation, unpaid expense accounts or
advances made to or for the benefit of the Partnership;
(c) next, to the Partners in proportion to their then
Capital Account balances until such Capital Account
balances have been reduced to zero; and
(d) the balance, if any, as follows:
General Partner 1 %
Limited Partner 99 %
9.4 GENERAL PARTNER CONTRIBUTIONS. Upon the liquidation of the
General Partner's interest in the Partnership, the General Partner will
contribute to the Partnership an amount equal to the deficit balance in its
Capital Account after taking into account all Capital Account adjustments for
the Partnership's taxable year during which such liquidation occurs. Except as
provided for in the previous sentence, no Partner shall be required to
contribute funds to the Partnership to restore its deficit capital account.
9.5 GAIN OR LOSS FROM DISSOLUTION. The net gain or loss, if any,
resulting from such dissolution and termination shall be allocable to the
Partners as provided in Section 4.6 hereof.
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ARTICLE X
BOOKS AND RECORDS; REPORTS
10.1 BOOKS AND RECORDS. The General Partner shall keep adequate
books and records at one or more of its places of business, setting forth a true
and accurate account of all business transactions arising out of and in
connection with the conduct of the Partnership. Partners or their designated
representatives shall have the right, at any reasonable time, to have access to
and inspect and copy the contents of said books or records.
10.2 a. The Partners shall be furnished annually by the
Partnership with an unaudited financial statement for the year then ended. Upon
request by any Partner, the Partnership shall furnish an audited financial
statements, with such costs being borne by the Partnership.
ARTICLE XI
POWER OF ATTORNEY
11.1 POWER OF ATTORNEY. In order to facilitate amendments of this
Agreement which require the signatures of the Partners, or a proposed additional
or substituted partner, and the preparation and signing of any other
documentation in connection with the Partnership including the Certificate of
Limited Partnership or any amendments thereto or cancellation thereof, each
Partner by his or his signature hereto irrevocably makes, constitutes and
appoints the General Partner, and each person who shall hereafter become a
General Partner, his true and lawful attorney in his name, place and stead, with
the power from time to time to make, execute, swear to, acknowledge, verify,
deliver, file, record and publish:
(a) any certificates or other instruments which may be
required to be filed by the Partnership under the laws of the State of
Nevada or of any other state or jurisdiction in which the Partnership
shall transact business or in which the General Partner shall deem it
advisable to file;
(b) all documents, certificates or other instruments which may
be required or deemed desirable by the General Partner to effectuate
the provisions of any part of this Agreement and to continue the
Partnership under the laws of the State of Nevada and of any state or
jurisdiction in which it shall do business; and
(c) all documents, certificates or other instruments which may
be required to effectuate the dissolution and termination of the
Partnership or the organization of any new limited partnership
occurring by reason of the withdrawal, dissolution, death, bankruptcy,
or adjudication of incompetency of the General Partner.
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11.2 IRREVOCABILITY. The foregoing power of attorney is a special
power of attorney coupled with an interest in favor of the General Partner, and
as such shall be irrevocable, and shall survive the dissolution, death,
bankruptcy or adjudication of incompetency of a Partner.
11.3 EFFECT OF ASSIGNMENT. The foregoing power of attorney shall
survive the delivery of an assignment by any Partner of the whole or any portion
of his Partnership Interest, except that where an assignee of a Limited
Partner's interest has been approved as a Substituted Limited Partner, the
foregoing power of attorney of the assignor Limited Partner shall survive the
delivery of such assignment for the sole purpose of enabling the General Partner
to execute, swear to, acknowledge and file any and all instruments necessary to
effect such substitution.
ARTICLE XII
GENERAL PROVISIONS
12.1 NOTICES. Any notice, payment, demand or communication required
or permitted to be given by any provision of this Agreement shall be in writing
and delivered personally, sent by overnight courier or sent by registered or
certified mail, return receipt requested, to a party at the address specified in
Section 1.4 hereof. Any such notice shall be deemed to be given as of the date
of receipt or refusal of receipt to the party at its address Any Partner may
from time to time specify a different address by notice to the Partnership.
12.2 JURISDICTION AND APPLICABLE LAW. Each party hereto and with
regard solely to matters arising out of, or in connection with, this Agreement
hereby designates the laws of the State of Nevada, both substantive and
procedural, without reference to the conflicts of the law provisions thereof, as
the law applicable hereto, and each voluntarily submits itself to the courts of
the State of Nevada as having jurisdiction over the subject matter hereof and
the parties hereto.
12.3 SURVIVAL OF RIGHTS. Except as otherwise provided, this
Agreement shall be binding upon and inure to the benefit of the Partners, their
personal representative, successors and assigns.
12.4 VALIDITY. In the event that any provision of this Agreement
shall be held to be invalid, the same shall not affect in any respect whatsoever
the validity of the remainder of this Agreement.
12.5 AGREEMENTS IN COUNTERPARTS. This Agreement may be executed in
several counterparts, and as executed shall constitute one Agreement, binding on
all the parties hereto, notwithstanding that all the parties are not signatory
to the original or to the same counterpart.
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<PAGE>
12.6 WAIVER OF PARTITION. The Partners hereby waive any right of
partition as to the Partnership's property or any right to take any other action
which otherwise might be available to them for the purpose of severing their
relationship in connection with Partnership property.
12.7 HEADINGS. The headings, titles and subtitles used in this
Agreement are for ease of reference only and shall not control or affect the
meaning or construction of any provision hereof.
12.8 AMENDMENTS. This Agreement may be amended by the
General Partner as permitted by Section 4.14 hereof and, to the extent
necessary, the General Partner shall file or cause to be filed without any
additional consent of the Limited Partner any amendment to the Certificate.
12.9 ENTIRE AGREEMENT. This Agreement sets forth the
entire understanding of the parties with respect to the subject
matter hereof. This Agreement replaces and supersedes all
previous agreements and amendments entered into by the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 27th day of December, 1995.
GENERAL PARTNER:
Attest:
Frost-Nevada Corporation, a Nevada
corporation
By:
- -------------------------- -------------------------------
Neil Flanzraich, President
[Corporate Seal]
LIMITED PARTNER:
Witness:
- ------------------------- ----------------------------------
Phillip Frost, M.D.
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