<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Murdock Communications Corporation
----------------------------------------
(Name of Issuer)
Common Stock, no par value
---------------------------------
(Title of Class of Securities)
62647W108
---------
(CUSIP Number)
Thomas J. Berthel Copy to: Michael K. Denney
100 Second Street S.E. Bradley & Riley, P.C.
Cedar Rapids, Iowa 52407-4250 100 1st St. S.W.
(319) 365-2506 Cedar Rapids, IA 52404
(319) 363-0101
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
-------------------------------------------------
January 7, 1997
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement of 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 [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. 62647W108
(Continued on following pages)
Exhibit Index Appears on Page 17 .
------
<PAGE> 2
CUSIP No 62647W108
- --------------------------------------------------------------------------------
1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
BERTHEL FISHER & COMPANY LEASING, INC. 42-1312639
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) X
----
(b)
----
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
-------
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
IOWA
- --------------------------------------------------------------------------------
(7) Sole Voting Power
NONE
Number of ---------------------------------------------
Shares
Beneficially (8) Shared Voting Power
Owned by Each 81,282
Reporting
Person With ---------------------------------------------
(9) Sole Dispositive Power
NONE
--------------------------------------------
(10) Shared Dispositive Power
81,282
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person 81,282
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
------
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 1.9%
- --------------------------------------------------------------------------------
14) Type of Reporting Persons (See Instructions)
CO
- --------------------------------------------------------------------------------
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<PAGE> 3
CUSIP No 62647W108
- --------------------------------------------------------------------------------
1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
BERTHEL FISHER & COMPANY INVESTMENTS, INC. 42-1443035
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) X
----
(b)
----
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
-----
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
IOWA
- --------------------------------------------------------------------------------
(7) Sole Voting Power
NONE
Number of ---------------------------------------------
Shares
Beneficially (8) Shared Voting Power
Owned by Each 123,185
Reporting
Person With ---------------------------------------------
(9) Sole Dispositive Power
NONE
--------------------------------------------
(10) Shared Dispositive Power
123,185
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person 123,185
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
------
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 2.9%
- --------------------------------------------------------------------------------
14) Type of Reporting Persons (See Instructions)
CO
- --------------------------------------------------------------------------------
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<PAGE> 4
CUSIP No 62647W108
- --------------------------------------------------------------------------------
1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
BERTHEL FISHER & COMPANY FINANCIAL SERVICES, INC. 42-1029773
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) X
----
(b)
----
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
OO, WC
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
IOWA
- --------------------------------------------------------------------------------
(7) Sole Voting Power
NONE
Number of ---------------------------------------------
Shares
Beneficially (8) Shared Voting Power
Owned by Each 32,458
Reporting
Person With ---------------------------------------------
(9) Sole Dispositive Power
NONE
---------------------------------------------
(10) Shared Dispositive Power
32,458
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person 32,458
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
--------
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) .8%
- --------------------------------------------------------------------------------
14) Type of Reporting Persons (See Instructions)
CO
- --------------------------------------------------------------------------------
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<PAGE> 5
CUSIP No 62647W108
- --------------------------------------------------------------------------------
1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
T. J. BERTHEL INVESTMENT, L. P. 42-1423238
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) X
----
(b)
----
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
-------
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
IOWA
- --------------------------------------------------------------------------------
(7) Sole Voting Power
NONE
Number of
Shares ---------------------------------------------
Beneficially
Owned by Each (8) Shared Voting Power
Reporting 113,572
Person With
---------------------------------------------
(9) Sole Dispositive Power
NONE
--------------------------------------------
(10) Shared Dispositive Power
113,572
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person 113,572
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
-------
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 2.7%
- --------------------------------------------------------------------------------
14) Type of Reporting Persons (See Instructions)
PN
- --------------------------------------------------------------------------------
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<PAGE> 6
CUSIP No 62647W108
- --------------------------------------------------------------------------------
1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
T.J. BERTHEL ENTERPRISES, INC. 42-1337914
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) X
---
(b)
---
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
------
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
IOWA
- --------------------------------------------------------------------------------
(7) Sole Voting Power
NONE
Number of
Shares ---------------------------------------------
Beneficially
Owned by Each (8) Shared Voting Power
Reporting 113,572
Person With
---------------------------------------------
(9) Sole Dispositive Power
NONE
--------------------------------------------
(10) Shared Dispositive Power
113,572
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person 113,572
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
------
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 2.7%
- --------------------------------------------------------------------------------
14) Type of Reporting Persons (See Instructions)
CO
- --------------------------------------------------------------------------------
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<PAGE> 7
CUSIP No 62647W108
- --------------------------------------------------------------------------------
1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
BERTHEL FISHER & COMPANY 42-1254805
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) X
---
(b)
---
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
BK, OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
------
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
IOWA
- --------------------------------------------------------------------------------
(7) Sole Voting Power
113,571
Number of
Shares ---------------------------------------------
Beneficially
Owned by Each (8) Shared Voting Power
Reporting 350,497
Person With
---------------------------------------------
(9) Sole Dispositive Power
113,571
--------------------------------------------
(10) Shared Dispositive Power
350,497
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person 464,068
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
------
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 11.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Persons (See Instructions)
CO
- --------------------------------------------------------------------------------
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<PAGE> 8
CUSIP No 62647W108
- --------------------------------------------------------------------------------
1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
THOMAS J. BERTHEL ###-##-####
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) X
----
(b)
----
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
PF
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
------
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
IOWA
- --------------------------------------------------------------------------------
(7) Sole Voting Power
8,763
Number of
Shares ---------------------------------------------
Beneficially
Owned by Each (8) Shared Voting Power
Reporting NONE
Person With
---------------------------------------------
(9) Sole Dispositive Power
8,763
--------------------------------------------
(10) Shared Dispositive Power
NONE
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person 8,763
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
---------
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) .3%
- --------------------------------------------------------------------------------
14) Type of Reporting Persons (See Instructions)
IN
- --------------------------------------------------------------------------------
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<PAGE> 9
CUSIP No 62647W108
- --------------------------------------------------------------------------------
1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
DEANNA BERTHEL 483 - 66 - 5277
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) X
----
(b)
----
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
PF
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
----
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
IOWA
- --------------------------------------------------------------------------------
(7) Sole Voting Power
6,725
Number of
Shares ---------------------------------------------
Beneficially
Owned by Each (8) Shared Voting Power
Reporting NONE
Person With
---------------------------------------------
(9) Sole Dispositive Power
6,725
--------------------------------------------
(10) Shared Dispositive Power
NONE
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person 6,725
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
-------
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) .2%
- --------------------------------------------------------------------------------
14) Type of Reporting Persons (See Instructions)
IN
- --------------------------------------------------------------------------------
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<PAGE> 10
ITEM 1. SECURITY AND ISSUER.
This Statement relates to the shares of Common Stock, no par value, of
Murdock Communications Corporation, the Issuer. The Issuer's principal
executive offices are located at 1112 29th St. S.W., Cedar Rapids, Iowa 52303.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed jointly by (a) Berthel Fisher & Company
Leasing, Inc. ("Leasing"), (b) Berthel Fisher & Company Investments, Inc.
("Investments"), (c) Berthel Fisher & Company Financial Services, Inc.
("Financial Services"), (d) T.J. Berthel Investment, L.P., an Iowa limited
partnership ("Investment L.P."), (e) T.J. Berthel Enterprises, Inc.
("Enterprises"), (f) Berthel Fisher & Company ("BFC"), (g) Thomas J. Berthel
("Mr. Berthel"), and (h) Deanna Berthel ("Deanna"), individually and as
custodian for Paige Berthel ("Paige") and Brandon Berthel ("Brandon").
Leasing, Investments, Financial Services, Investment L.P., Enterprises, BFC,
Mr. Berthel and Deanna are referred to herein as the "Reporting Persons."
Leasing is an Iowa corporation. Its principal business is the origination
of leases and financing contracts. Its principal place of business is Cedar
Rapids, Iowa, and its principal office is 425 Second Street S.E., Cedar Rapids,
Iowa, 52401. All of the common stock of Leasing is owned by BFC.
Investments is an Iowa corporation. Its principal business is to hold
equity investments that are acquired by BFC and subsidiaries of BFC. Its
principal place of business is Cedar Rapids, Iowa, and its principal office is
100 Second Street S.E., Cedar Rapids, Iowa, 52401. All of the common stock of
Investments is owned by BFC.
Financial Services is an Iowa corporation. Its principal business is
stock brokerage. Its principal place of business is Cedar Rapids, Iowa, and
its principal office is 100 Second Street S.E., Cedar Rapids, Iowa, 52401. All
of the common stock of Financial Services is owned by BFC.
Investment L. P. was formed on July 1, 1992, as an Iowa limited
partnership. The address of Investment L. P.'s principal business and
principal office is 100 Second Street S.E., Cedar Rapids, Iowa, 52401. The
business and purpose of Investment L. P. is to acquire, directly or indirectly,
beneficial ownership of the outstanding securities of any class of securities
of various companies, and to own and dispose of such securities. Enterprises
is the general partner of Investment L. P.
Enterprises is an Iowa corporation. Its principal business is to act as
the sole general partner of Investment L. P. Its principal place of business
is Cedar Rapids, Iowa, and its principal office is 100 Second Street S.E.,
Cedar Rapids, Iowa, 52401. One-half of the common stock of Enterprises is
owned by BFC and one-half is owned by Mr. Berthel.
BFC is an Iowa corporation which is a holding company. BFC's principal
place of business and its principal office are located at 100 Second Street
S.E., Cedar Rapids, Iowa, 52401. All of the common stock of Leasing,
Investments and Financial Services, and one-half of the common stock of
Enterprises, is owned by BFC.
Mr. Berthel, whose business address and principal place of business is 100
Second Street S.E., Cedar Rapids, IA 52401, is the C.E.O. and a director of
Leasing, Investments,
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<PAGE> 11
Financial Services and BFC. He is the President of Leasing, Enterprises and
BFC. He is also a director of Enterprises. Mr. Berthel may be a controlling
person of BFC. Mr. Berthel owns one-half of the common stock of Enterprises,
and may be a controlling person of Enterprises.
Deanna is the spouse of Mr. Berthel. Deanna is not employed outside the
home. Her residential address is 44900 Oak Grove Road N.E. Cedar Rapids, Iowa
52402.
Paige and Brandon are children of Mr. Berthel and Deanna. Deanna owns
Common Stock of the Issuer as the custodian under gifts made pursuant to the
Uniform Gifts to Minors Act for Paige and Brandon. Paige and Brandon are
students. Their residential address is 44900 Oak Grove Road N.E. Cedar Rapids,
Iowa 52402.
Michael R. Valliere ("Mr. Valliere") and Mercantile Bank of Eastern Iowa,
as Trustee of a self-directed profit sharing account owned by Von L. Elbert
("Mr. Elbert") own shares of Common Stock of the Issuer, but the Reporting
Persons believe that neither Mr. Valliere nor Mr. Elbert are members of the
group of Reporting Persons, and neither are included as Reporting Persons.
In addition to Mr. Berthel, who is included as a Reporting Person, the
executive officers and directors (herein referred to as "Other Officers and
Directors") of Leasing, Investments, Financial Services, Enterprises and BFC,
their addresses and their principal occupations are as follows:
James D. Thorp, whose business address and principal place of
business is 100 Second Street S.E., Cedar Rapids, IA 52401, is the
President and a director of Investments and the Vice President Investment
Banking and a director of Financial Services. He is also the Executive
Vice President and a director of Enterprises and a director of BFC.
Dwight E. Wheelan, whose business address and principal place of
business is 100 Second Street S.E., Cedar Rapids, IA 52401, is the
President and a director of Financial Services and a director of BFC.
Fred P. Fisher, whose business address and principal place of
business is 10875 Benson Drive, Suite 130, Overland Park, Kansas 66210,
is the Executive Vice President and a director of Financial Services and
BFC.
Ronald O. Brendengen, whose business address and principal place of
business is 100 Second Street S.E., Cedar Rapids, IA 52401, is the
C.F.O., Treasurer and a director of Leasing, Investments, Financial
Services and BFC. He is also the Vice President, Secretary, Treasurer
and a director of Enterprises.
Leslie D. Smith, whose business address and principal place of
business is 100 Second Street S.E., Cedar Rapids, IA 52401, is the
Secretary of Leasing, Investments, Financial Services and BFC. He is a
director of Investments.
Nancy L. Lowenberg, whose business address and principal place of
business is 425 Second Street S.E., Cedar Rapids, IA 52401, is the C.O.O.
and a Vice President of Leasing.
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<PAGE> 12
Greg Pugh, whose business address and principal place of business
is 425 Second Street S.E., Cedar Rapids, IA 52401, is the Executive
Vice President and a director of Leasing.
Lynn Whiteman, whose business address and principal place of
business is 425 Second Street S.E., Cedar Rapids, IA 52401, is Vice
President Operations of Leasing.
Steve J. Hogan, whose business address and principal place of
business is 2750 First Avenue, N.E., Cedar Rapids, IA 52402, is C.E.O. of
Electronic Exchange & Transfer Corporation, 2750 First Avenue, N.E.,
Cedar Rapids, IA 52402. Mr. Hogan serves as a director of Leasing.
Emmett Schermann, whose home address is 702 Beaver Ridge Court,
S.E., Cedar Rapids, IA 52403, is retired. He serves as a director of
Leasing.
Gary Rickels is a self-employed farmer whose home address and
principal place of business is RR #1, Center Junction, IA, 52212. He
serves as a director of BFC.
Mr. Valliere, whose business address and principal place of business
is 221 3rd St. S.E., Cedar Rapids, IA 52401, is an Enhanced Product
Engineer for McLeod, Inc. He serves as a director of BFC.
Mr. Elbert, whose business and home address and principal place of
business is 315 Andover Lane S.E., Cedar Rapids, IA 52403, is a
self-employed consultant. He serves as a director of Leasing,
Investments, Financial Services and BFC.
During the past five years, none of the Reporting Persons, and, to the
best knowledge of the Reporting Persons, none of the Other Officers and
Directors, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), and none of them has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Each of the Reporting Persons who is a natural person and each of the
Other Officers and Directors is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Leasing owns 81,282 shares of Common Stock of the Issuer, all of which it
received from Investments on December 27, 1996, as consideration for the
issuance of shares of preferred stock by Leasing to BFC. These shares had
originally been issued to Leasing in 1993 as consideration for the
restructuring of a lease transaction, and later transferred to BFC as part of a
transaction between affiliated companies.
Investments owns 99,185 shares of Common Stock of the Issuer and warrants
for 24,000 shares of Common Stock of the Issuer. The 99,185 shares were issued
to BFC as consideration for services rendered by Financial Services in
connection with a private offering of securities of the Issuer in 1993, and
were subsequently transferred to Investments as part of a transaction between
affiliated companies. The warrants for 24,000 shares were issued
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<PAGE> 13
in October 1996 as underwriter warrants for services rendered by Financial
Services in connection with the public offering of the Issuer's securities.
These warrants are not exercisable until October 21, 1997.
Financial Services acquired 3,658 shares in 1995 in a private transaction,
using working capital of Financial Services. Financial Services also owns
28,300 shares of Common Stock of the Issuer and warrants for 500 shares of
Common Stock of the Issuer, all of which were purchased with working capital of
Financial Services on the open market during the fourth quarter of 1996.
On January 7, 1997, using $212,500 from its margin account at National
Financial Inc. and a promissory note payable to Intellicall, Inc. in the amount
of $425,000, Investment L.P. purchased from Intellicall, Inc. a one-half
interest in the Issuer's note in the amount of $1,000,000 and a warrant for the
issuance of 113,571 shares of Common Stock of the Issuer. Investment L. P. has
exercised the warrant and now owns 113,571 shares of Common Stock of the
Issuer. The margin account bears interest at the rate 7.5% per annum and is
subject to standard margin rules. Investment L.P. is fully obligated for
one-half of the $425,000 promissory note to Intellicall, Inc. The promissory
note to Intellicall, Inc. bears interest at the rate of 10% per annum.
Interest is paid quarterly in arrears, with the first payment due March 31,
1997. Principal and all unpaid interest is due on December 31, 1997.
On January 7, 1997, BFC purchased from Intellicall, Inc. a one-half
interest in the Issuer's note in the amount of $1,000,000 and a warrant for the
issuance of 113,571 shares of Common Stock of the Issuer. The consideration
for the purchase from Intellicall, Inc. was $212,500, which was borrowed by BFC
from Firstar Bank Cedar Rapids N.A. ("Firstar") and a promissory note payable
to Intellicall, Inc. in the amount of $425,000. The Firstar loan was made on
December 31, 1996, bears interest at the rate of 1.5% over prime and is due on
January 31, 1997. BFC has exercised the warrant and now owns 113,571 shares of
Common Stock of the Issuer. BFC is fully obligated for one-half of the
$425,000 promissory note to Intellicall, Inc. The promissory note to
Intellicall, Inc. bears interest at the rate of 10% per annum. Interest is
paid quarterly in arrears, with the first payment due March 31, 1997.
Principal and all unpaid interest on the note to Intellicall, Inc. is due on
December 31, 1997.
The shares of Common Stock of the Issuer owned by Mr. Berthel include
shares ("IRA Shares") owned by NFSC FMTC IRA SEP FBO Thomas J. Berthel and NFSC
FMTC IRA FBO Thomas J. Berthel. Mr. Berthel has the sole power to vote the IRA
Shares. The IRA Shares were acquired using the personal funds of Mr. Berthel.
Deanna owns 1,545 shares of Common Stock of the Issuer and warrants for
the issuance of 480 shares of Common Stock of the Issuer, all of which were
acquired with Deanna's personal funds. The shares of Common Stock of the
Issuer that are owned by Deanna as custodian for Paige and Brandon under the
Uniform Gifts to Minors Act were acquired using the personal funds of Mr.
Berthel and Deanna.
ITEM 4. PURPOSE OF TRANSACTION.
The shares of Common Stock of the Issuer owned by the Reporting Persons,
however acquired, have been acquired solely for the purpose of investment.
Each of the Reporting Persons may make additional purchases of Common Stock of
the Issuer depending on their own evaluation of the Issuer's business,
prospects and financial condition, the market for the Common Stock of the
Issuer, general economic conditions, money and stock market
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<PAGE> 14
conditions, and other future developments. Depending on the same factors, each
of the Reporting Persons may dispose of all or part of their investment in the
Common Stock of the Issuer.
The Reporting Persons have no present intention to effect or participate
in the formulation of:
(a) any extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(b) any sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(c) any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the number or term
of directors or to fill any existing vacancies on the board;
(d) any material change in the present capitalization or dividend
policy of the Issuer;
(e) any other material change in the Issuer's business or corporate
structure;
(f) any changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition
of control of the Issuer by any person;
(g) any act or course of conduct causing the Common Stock or any
other class of securities of the Issuer to be delisted from a national
securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association;
(h) any act or course of conduct causing the Common Stock or any
other class of equity securities of the Issuer to become eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934 (the "Act"); or
(i) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Leasing
As of January 7, 1997, Leasing owned 81,282 shares of the Common Stock of
the Issuer, all of which were contributed to Leasing on December 27, 1996 by
BFC in a transaction between affiliated companies as consideration for the
issuance to BFC of preferred stock of Leasing. The price at which the shares
were transferred was $3.88 per share. These 81,282 shares were originally
issued by the Issuer to Leasing in June 1993 as consideration for the
restructuring by Leasing of a lease transaction with the Issuer, and were
subsequently transferred to Investments in 1995 in a transaction between
affiliated companies. The shares now owned by Leasing constitute approximately
1.9% of the total number of shares of the Common Stock of the Issuer
outstanding as of January 7, 1997 plus the shares that would be issued upon the
exercise of the warrants described in this Schedule. Because BFC is a
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<PAGE> 15
controlling person of Leasing, BFC and Leasing have the shared power to vote or
to direct the vote and the shared power to dispose or to direct the disposition
of all of the shares owned by Leasing.
Investments
As of January 7, 1997, Investments owned 99,185 shares of the Common Stock
of the Issuer and warrants for the issuance of 24,000 shares of Common Stock of
the Issuer. The 99,185 shares were issued to Investments in 1993 as
consideration for services rendered by Financial Services in connection with a
private offering of securities of the Issuer. The warrants for 24,000 shares
were issued on October 21, 1996, as underwriter warrants for services rendered
by Financial Services in connection with the public offering of the Issuer's
securities. These warrants are not exercisable by Investments until October
21, 1997. The shares owned by Investments, together with the shares to be
issued upon exercise of the warrants, constitute approximately 2.9% of the
total number of shares of the Common Stock of the Issuer outstanding as of
January 7, 1997 plus the shares that would be issued upon the exercise of the
warrants described in this Schedule. Because BFC is a controlling person of
Investments, BFC and Investments have the shared power to vote or to direct the
vote and the shared power to dispose or to direct the disposition of all of the
shares owned by Investments.
Financial Services
As of January 7, 1997, Financial Services owned 31,958 shares of the
Common Stock of the Issuer and warrants for the issuance of 500 shares of
Common Stock of the Issuer. Of the 31,958 shares owned by Financial Services,
3,658 were acquired by Financial Services in September, 1995 for $9,500 in a
private transaction. The remaining 28,300 shares owned by Financial Services
were acquired on the dates, in the amounts and at the average daily prices per
share (excluding brokerage commissions) indicated below. All such transactions
were effected in brokerage transactions on the NASDAQ Small Cap Market.
<TABLE>
<CAPTION>
Date Number of Shares Price per Share
---- ---------------- ---------------
<S> <C> <C>
10-24-96 2,000 $4.00
10-24-96 2,800 $4.25
10-28-96 15,000 $4.19
10-29-96 2,500 $4.06
10-29-96 1,000 $5.06
10-31-96 5,000 $3.38
</TABLE>
Financial Services also owns warrants for the issuance of 500 shares of
Common Stock of the Issuer. These warrants were acquired on the dates, in the
amounts and at the average daily prices per warrant (excluding brokerage
commissions) indicated below. All such transactions were effected in brokerage
transactions on the NASDAQ Small Cap Market.
<TABLE>
<CAPTION>
Date Number of Warrants Price per Warrant
---- ------------------ -----------------
<S> <C> <C>
10-29-96 500 $0.01
</TABLE>
The shares owned by Financial Services, together with the shares to be
issued upon exercise of the warrants, constitute approximately .8% of the total
number of shares of the Common
Page of Pages
----- -----
<PAGE> 16
Stock of the Issuer outstanding as of January 7, 1997 plus the shares that
would be issued upon the exercise of the warrants described in this Schedule.
Because BFC is a controlling person of Financial Services, BFC and leasing have
the shared power to vote or to direct the vote and the shared power to dispose
or to direct the disposition of all of the shares owned by Financial Services.
Investment L. P.; Enterprises
As of January 7, 1997, Investment L. P. owned 113,572 shares of the Common
Stock of the Issuer. All of the shares owned by Investment L. P. were issued
to Investment L. P. upon exercise of a warrant acquired from Intellicall, Inc.
in a private transaction that was completed on January 7, 1997. Investment L.
P. has exercised the warrant and now owns 113,572 shares of Common Stock of the
Issuer. The shares owned by Investment L. P. constitute approximately 2.7% of
the total number of shares of the Common Stock of the Issuer outstanding as of
January 7, 1997 plus the shares that would be issued upon the exercise of the
warrants described in this Schedule. Investment L. P. acts through its sole
general partner, Enterprises. Because BFC owns one-half of the common stock of
Enterprises, BFC may be a controlling person of Enterprises, and is treated as
having shared power with Enterprises and Investment L.P. to vote or to direct
the vote and to dispose or to direct the disposition of all of the shares owned
by Investment L. P.
BFC
As of January 7, 1997, BFC owned 113,571 shares of the Common Stock of the
Issuer. All of the shares owned by BFC were issued to BFC upon exercise of a
warrant acquired from Intellicall, Inc. in a private transaction that was
completed on January 7, 1997. The shares owned by BFC constitute approximately
2.7% of the total number of shares of the Common Stock of the Issuer
outstanding as of January 7, 1997 plus the shares that would be issued upon the
exercise of the warrants described in this Schedule. BFC has the sole power to
vote or to direct the vote and the sole power to dispose or to direct the
disposition of all of the shares owned by BFC.
Mr. Berthel; NFSC FMTC IRA SEP FBO Thomas J. Berthel and NFSC FMTC IRA FBO
Thomas J. Berthel
On January 7, 1997, NFSC FMTC IRA SEP FBO Thomas J. Berthel, a custodial
Individual Retirement Account, owned 5,807 shares of Common Stock of the Issuer
and warrants for 1,786 shares of Common Stock of the Issuer; and NFSC FMTC IRA
FBO Thomas J. Berthel, a custodial Individual Retirement Account, owned 780
shares of Common Stock of the Issuer and warrants for 390 shares of Common
Stock of the Issuer. The shares owned by NFSC FMTC IRA SEP FBO Thomas J.
Berthel and NFSC FMTC IRA FBO Thomas J. Berthel constitute approximately .3% of
the total number of shares of the Common Stock of the Issuer outstanding as of
January 7, 1997 plus the shares that would be issued upon the exercise of the
warrants described in this Schedule. Mr. Berthel has the sole power to vote or
to direct the vote and the sole power to dispose or to direct the disposition
of all of the 5,807 shares and warrants for 1,786 shares owned by NFSC FMTC IRA
SEP FBO Thomas J. Berthel. Mr. Berthel has the sole power to vote or to direct
the vote and the sole power to dispose or to direct the disposition of all of
the 780 shares and warrants for 390 shares owned by NFSC FMTC IRA FBO Thomas J.
Berthel. Of the shares owned by NFSC FMTC IRA SEP FBO Thomas J. Berthel, 2,235
shares of Common Stock of the Issuer were purchased at
Page of Pages
----- -----
<PAGE> 17
Mr. Berthel's direction on November 20, 1996 at $3.25 per share on the NASDAQ
Small Cap Market. No other shares have been purchased within the past sixty
days.
Deanna; Paige; Brandon
On January 7, 1997, Deanna individually owned 1,545 shares of Common Stock
of the Issuer and warrants for 480 shares of Common Stock of the Issuer. Of
the 1,545 shares, 585 shares of Common Stock of the Issuer were purchased on
November 20, 1996 at $3.25 per share on the NASDAQ Small Cap Market. Deanna
has purchased no other shares individually within the past sixty days. On
January 7, 1997, Deanna, as custodian for Paige, owned 2,150 shares of Common
Stock of the Issuer and warrants for 440 shares of Common Stock of the Issuer.
Of the 2,150 shares owned as custodian for Paige, 1,270 shares of Common Stock
of the Issuer were purchased on November 20, 1996 at $3.25 per share on the
NASDAQ Small Cap Market. Deanna has purchased no other shares as custodian for
Paige within the past sixty days. On January 7, 1997, Deanna, as custodian for
Brandon, owned 1,710 shares of Common Stock of the Issuer and warrants for 400
shares of Common Stock of the Issuer. Of the 1,710 shares owned as custodian
for Brandon, 910 shares of Common Stock of the Issuer were purchased on
November 20, 1996 at $3.25 per share on the NASDAQ Small Cap Market. Deanna
has purchased no other shares as custodian for Brandon within the past sixty
days. Deanna has the sole power to vote or to direct the vote and the sole
power to dispose or to direct the disposition of all of the shares owned by
Deanna as custodian for Paige and as custodian for Brandon.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The Articles and Agreement of Limited Partnership of Investment L. P. (the
"Agreement") governs the relationship between Investment L. P., Enterprises as
the general partner and the limited partners of Investment L. P. with respect
to the securities of the Issuer. Enterprises, the general partner, has sole
authority to transfer and vote the securities. The division of profits or
losses of Investment L. P. are to be made in accordance with the partnership
interests of the limited partners of Investment L. P. and Enterprises. The
Agreement provides that Enterprises shall receive compensation for its services
as general partner. Compensation is a percentage of profit of Investment L.
P., determined pursuant to a formula set forth in detail in Section 7.6 of the
Agreement, which is attached hereto as an Exhibit and which is incorporated
herein by reference. Investment L. P., upon its dissolution, in the discretion
of the general partner, may distribute shares of Common Stock of the Issuer to
limited partners of Investment L. P. Except for the Agreement, to the best
knowledge of the Reporting Persons, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) of a nature which would be
required to be disclosed pursuant to this Item 6.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Beginning
at
Page:
-----------
(a) Joint Filing Agreement, dated January 16, 1997,
between the Reporting Persons relating to the
filing of a joint statement on Schedule 13D.
------
Page of Pages
----- -----
<PAGE> 18
(b) Articles and Agreement of Limited Partnership
of T. J. Berthel Investment, L. P. ------
(c) Promissory Note relating to the borrowing of
funds to finance the acquisition as disclosed
in Item 3. ------
Page of Pages
------ ------
<PAGE> 19
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 16, 1997 T. J. BERTHEL INVESTMENT, L. P.
By: T. J. BERTHEL ENTERPRISES, INC.
General Partner
By:
-----------------------------------
THOMAS J. BERTHEL, President
BERTHEL FISHER & COMPANY FINANCIAL
SERVICES, INC.
By:
-----------------------------------
DWIGHT E. WHEELAN, President
BERTHEL FISHER & COMPANY LEASING, INC.
By:
-----------------------------------
THOMAS J. BERTHEL, President
BERTHEL FISHER & COMPANY
INVESTMENTS, INC.
By:
-----------------------------------
JAMES D. THORP, President
BERTHEL FISHER & COMPANY
By:
-----------------------------------
THOMAS J. BERTHEL, President
--------------------------------------
THOMAS J. BERTHEL
T. J. BERTHEL ENTERPRISES, INC.
By:
-----------------------------------
THOMAS J. BERTHEL, President
--------------------------------------
DEANNA BERTHEL
--------------------------------------
DEANNA BERTHEL, as Custodian for Paige Berthel
--------------------------------------
DEANNA BERTHEL, as Custodian for Brandon Berthel
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
Page of Pages
----- ------
<PAGE> 1
EXHIBIT (a)
JOINT FILING AGREEMENT
We, the signatories of the statement on Schedule 13D to which this
Agreement is attached, hereby agree that such statement is filed on behalf of
each of us.
Dated: January 16, 1997 T. J. BERTHEL INVESTMENT, L. P.
By: T. J. BERTHEL ENTERPRISES, INC.
General Partner
By:
-----------------------------------
THOMAS J. BERTHEL, President
BERTHEL FISHER & COMPANY FINANCIAL
SERVICES, INC.
By:
-----------------------------------
DWIGHT E. WHEELAN, President
BERTHEL FISHER & COMPANY LEASING, INC.
By:
-----------------------------------
THOMAS J. BERTHEL, President
BERTHEL FISHER & COMPANY
INVESTMENTS, INC.
By:
-----------------------------------
JAMES D. THORP, President
BERTHEL FISHER & COMPANY
By:
-----------------------------------
THOMAS J. BERTHEL, President
--------------------------------------
THOMAS J. BERTHEL
T. J. BERTHEL ENTERPRISES, INC.
By:
-----------------------------------
THOMAS J. BERTHEL, President
--------------------------------------
DEANNA BERTHEL
--------------------------------------
DEANNA BERTHEL, as Custodian for Paige Berthel
--------------------------------------
DEANNA BERTHEL, as Custodian for Brandon Berthel
Page of Pages
----- -----
<PAGE> 1
EXHIBIT (b)
THE INTERESTS OF THIS LIMITED PARTNERSHIP HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR UNDER THE IOWA UNIFORM SECURITIES ACT CHAPTER 502 OF
THE IOWA CODE. INTERESTS HAVE BEEN AND WILL BE ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED TO BE SO
TRANSFERRED WITHOUT THE WRITTEN CONSENT OF THE GENERAL PARTNER, AND EITHER AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH INTERESTS UNDER THE SECURITIES ACT OF
1933 AND THE REGULATIONS PROMULGATED PURSUANT THERETO AND THE APPROPRIATE STATE
SECURITIES LAWS (UNLESS EXEMPT THEREFROM), OR AN OPINION OF COUNSEL
SATISFACTORY TO THE GENERAL PARTNER THAT ANY SUCH TRANSACTION WILL NOT VIOLATE
ANY FEDERAL OR STATE SECURITIES LAWS.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
ARTICLES AND AGREEMENT
OF
LIMITED PARTNERSHIP
OF
T. J. BERTHEL INVESTMENT, L. P.,
AN IOWA LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP (the "Agreement") of T.
J. BERTHEL INVESTMENT, L. P., an Iowa limited partnership, dated June 30, 1992,
is made by and among T. J. BERTHEL ENTERPRISES, INC., an Iowa corporation, and
each of those persons who shall become Limited Partners as hereinafter set
forth.
ARTICLE I
DEFINITIONS
1.1 "Partnership" shall refer to T. J. BERTHEL INVESTMENT, L. P.,
an Iowa limited partnership.
1.2 "General Partner" shall refer to T. J. Berthel Enterprises,
Inc.
<PAGE> 2
1.3 "Shares" shall mean the common stock of Intellicall, Inc.
1.4 "Capital Contribution" shall mean the total value, whether
cash or Shares (with Shares valued based on Market Value), contributed by a
Partner to the Partnership for his, her or its interest in the Partnership.
1.5 "Interest" shall mean the respective interests of the Limited
Partners in the Partnership.
1.6 "Market Value" shall mean the closing price for Shares on the
day of contribution of Shares to the Partnership by a Limited Partner, provided
the New York Stock Exchange is open on the day of contribution and Shares are
traded on that day. If the New York Stock Exchange is not open on that day or
if Shares are not traded on that day, then such Shares shall be valued at the
closing price on the most recent day that the New York Stock Exchange was open
and Shares were traded. For purposes of the Initial Closing (see Section
2.10(a)), the Market Value of Shares shall be Three and seven-eighths Dollars
($3 7/8).
1.7 "Limited Partners" shall mean all of the Limited Partners of
the Partnership, and "Limited Partner" shall mean any one of the Limited
Partners of the Partnership.
1.8 "Partners" shall mean all of the Limited Partners and the
General Partner of the Partnership.
1.9 "Outside Limited Partner" shall mean a Limited Partner who is
not an officer or director of the General Partner or affiliate of the General
Partner.
ARTICLE II
FORMATION
2.1 Formation of Limited Partnership. The General Partner and the
Limited Partners hereby form a limited partnership (the "Partnership") under
the provisions of the Iowa Limited Partnership Act Chapter 545 Iowa Code, as
amended and as in effect from time to time, and the rights and liabilities of
the Partners shall be as provided in that Act, except as herein otherwise
expressly provided.
2.2 Name. The name of the Partnership shall be T. J. BERTHEL
INVESTMENT, L. P. However, the business of the Partnership may be conducted,
-2-
<PAGE> 3
upon compliance with all applicable laws, under any other name designated in
writing by the General Partner to the Limited Partners.
2.3 Principal Place of Business. The Partnership's principal
place of business shall be 100 Second Street, S.E., Cedar Rapids, Iowa 52401,
or such other place as the General Partner may from time to time designate in
writing to the Limited Partners. The Partnership may maintain such other
offices at such other places as the General Partner deems advisable.
2.4 Purpose. The primary business of the Partnership will be to
acquire, own and dispose of Shares. The Partnership may borrow money on such
terms as it deems appropriate in order to finance the acquisition of Shares or
for any other purpose related to the business of the Partnership. The
Partnership will engage in any and all activities related or incidental to the
foregoing. The Partnership shall engage in no other business.
If the General Partner does not utilize the Partnership
capital contributions for the purposes stated herein, the General Partner shall
be entitled to expend such funds only (i) on general or administrative expenses
of the Partnership; and (ii) the return to the General and Limited Partners of
a portion of their capital contributions. The Partnership will (i) have and
exercise all of the powers now or hereafter conferred by the laws of the State
of Iowa on limited partnerships formed under the laws of such state; and (ii)
do any and all things as fully as natural persons might or could do.
Capital contributions and other cash funds of the Partnership
which have not been fully utilized by the Partnership for its purposes may be
invested by the General Partner through Berthel Fisher & Company Financial
Services, Inc., an affiliate of the General Partner, in certificates of
deposit, bankers' acceptances, U.S. Treasury Securities, prime quality
commercial paper or other short-term investments providing safety of principal.
A commission shall be paid to Berthel Fisher & Company Financial Services, Inc.
for handling such investments. The General Partner may invest such funds
through other brokers or agents and pay commissions for services to such other
brokers or agents. All acquisitions by the Partnership of Shares shall be
handled through Berthel Fisher & Company Financial Services, Inc. A
commission equal to 75% of the regular full commission charged by Berthel
Fisher & Company Financial Services, Inc. shall be paid to Berthel Fisher &
Company Financial Services, Inc. for handling acquisitions of Shares.
Capital contributions and other cash funds of the Partnership
which have not been fully utilized by the Partnership for its purposes before
December 31, 1993, shall be distributed to the Partners.
2.5 Term. The Partnership shall terminate five (5) years from the
date hereof, unless sooner terminated as hereinafter provided or as provided by
operation of law.
-3-
<PAGE> 4
2.6 Filing of Certificates. The General Partner shall file and
publish all such certificates, notices, statements or other instruments
required by law for the formation and operation of a limited partnership in all
jurisdictions where the Partnership may elect to do business. This instrument
shall constitute the Agreement of Partnership of this Partnership. The General
Partner shall prepare, execute and file a Certificate of Limited Partnership
with the Iowa Secretary of State and any other office appropriate to permit
conduct of the Partnership business.
2.7 Limited Partnership Interests. (a) The Partnership is
authorized to issue Limited Partnership Interests having a value at the time of
contribution of Ten Million Dollars ($10,000,000.00). Persons acquiring
Interests shall be the Limited Partners. Each Interest shall be issued as
fully paid and nonassessable. Each Interest of the Partnership shall be equal
to the Capital Contribution contributed to the Partnership for such Interest.
(b) The minimum contribution for each Outside Limited
Partner shall have a value at the time of contribution of One Hundred Thousand
Dollars ($100,000.00), but the General Partner may, in its sole discretion,
accept subscriptions from an Outside Limited Partner for less than the minimum
to orderly complete the capitalization of the Partnership.
(c) No minimum contribution shall be imposed on Limited
Partners who are not Outside Limited Partners.
2.8 Contribution of Shares. Each Limited Partner shall contribute
to the Partnership, or cause to be contributed to the Partnership, as a Capital
Contribution in exchange for a Limited Partnership Interest, all of the Shares
owned beneficially, whether directly or indirectly, by the Limited Partner.
Such contribution shall be made at such times as shall be established by the
General Partner.
2.9 Initial Offering of Interests. In its initial offering, the
Partnership shall raise capital by offering and selling Interests having a
minimum value of One Million Five Hundred Thousand Dollars ($1,500,000.00) and
a maximum value as determined by the General Partner.
2.10 Closings. (a) Initial Offering. The Initial Closing shall
be held on a date established by the General Partner which date is after
subscriptions for the purchase of the minimum amount of Interests have been
received by and accepted by the General Partner in its sole discretion.
Following the Initial Closing, Additional Closings may be held at such times
and intervals as the General Partner shall determine for the purpose of
receiving the balance of all subscriptions accepted in the initial offering.
(b) Subsequent Offerings. Closings for offerings
completed subsequent to the initial offering shall be held at such times and
intervals as the General Partner shall determine.
-4-
<PAGE> 5
2.11 Offering of Interests After Initial Offering. (a) In the
discretion of the General Partner, after the completion of the initial
offering, additional Interests may be issued to existing Limited Partners upon
the payment of the Purchase Price, determined as set forth below, for such
additional Interests.
(b) After the completion of the initial offering, upon
the unanimous consent of all Limited Partners and the General Partner, the
General Partner may issue Interests to additional subscribers, provided such
additional subscribers meet the suitability standards imposed by the General
Partner and pay the purchase price for such Interests as determined by the
General Partner.
ARTICLE III
CAPITAL
3.1 The Limited Partners agree to make contributions to the
Capital of the Partnership for the Interests they have subscribed for, which
amounts shall be reflected by the Partnership in individual capital accounts
for each Partner.
3.2 Each Limited Partner, either by personal signature or by power
of attorney, shall execute this Agreement and the Certificate of Limited
Partnership.
3.3 A separate Capital Account shall be maintained by the
Partnership for each Partner. The Capital Account of each Partner shall be
credited with an amount, referred to herein as the Original Capital Account
Amount, which shall be the sum of (i) the Market Value of Shares contributed by
the Partner from time to time, and (ii) the amount of cash contributed by the
Partner from time to time. The Capital Account of each Partner shall be
increased by the amount of any additional cash contribution or Shares
contribution made to the Partnership by a Partner, and shall be decreased by
the amount of any cash distributions made by the Partnership to the Partner and
by the fair market value of any property distributed (net of liabilities,
assumed or taken subject to) to any Partner. The Capital Account of each
Partner shall also be increased or decreased by any profits, gains, losses and
deductions (whether or not deducted for federal income tax purposes) allocated
to a Partner under Sections 4.1 or 4.2. Notwithstanding anything to the
contrary set forth above, the Capital Accounts of each Partner shall at all
times be maintained in accordance with federal income tax accounting principles
and specifically the rules set forth as to capital accounts set forth in the
regulations under Section 704 of the Internal Revenue Code.
-5-
<PAGE> 6
3.4 No Partner shall have a right to the withdrawal or to the
return of their Capital Contribution to Capital except upon distribution in
liquidation or except as provided for non-liquidation distributions of capital
as provided for in Section 9.2.
3.5 Partners may make loans to the Partnership, above their
required Capital Contributions to the Partnership, as authorized by the General
Partner. Such loans shall not be treated as contributions to capital of the
Partnership and shall not increase such Partner's share of profits, gains,
losses, credits, deductions or distributions of the Partnership. Any amounts
characterized as loans shall be the obligation of the Partnership to such
Partner and shall bear such interest as may be agreed upon by the General
Partner, the rate of which shall be reasonable.
3.6 Except as specifically provided in Article IV, no interest
shall be paid by the Partnership on the contributions to the Capital of the
Partnership by its Partners, as reflected in each Partner's Capital Account.
3.7 To the extent that the Partnership is classified as an
investment Partnership under Section 721 of the Code or to the extent that
additional individuals are admitted to the Partnership for cash, the General
Partner shall adjust the existing Limited Partners' capital accounts to the
extent necessary to properly reflect the value of the Partnership after such
contributions.
ARTICLE IV
ALLOCATION OF PROFITS, GAINS, LOSSES, DEDUCTIONS AND CREDITS
Profits, gains, losses, credits and deductions of the
Partnership for federal income tax purposes shall be allocated as follows:
4.1 All profits, gains, losses, deductions and credits of the
Partnership for each fiscal year, computed in the same manner as for federal
income tax purposes, shall be allocated one hundred percent (100%) to Limited
Partners based on their percentage of interest in the Partnership. The method
of accounting shall be the accrual method (income tax basis of accounting) and
the Partnership shall use the method of accounting for depreciation and other
items as shall be determined by the General Partner for federal income tax
purposes. All items of profit, gain, loss, deduction and credits shall be
allocated to each Partner, based on each Partner's varying interest in the
Partnership during each fiscal year. Compensation
-6-
<PAGE> 7
paid to the General Partner shall be considered as an expense of the
Partnership in the computation of Profit.
4.2 Allocation of profits, gains, losses, deductions and credits
to Partners who have held their Interest in the Partnership for less than the
entire year or whose percentage interest in the Partnership varied during any
year shall be made in accordance with such reasonable method as the General
Partner may choose in order to implement the provisions of Section 706(c) and
(d) of the Internal Revenue Code. However, in no event shall any Partner be
allocated losses or deductions attributable to any portion of the Partnership
year attributable to an Interest before such Partner acquired such Interest.
4.3 Notwithstanding any other provision of this Agreement, if a
Partner receives an adjustment, allocation, or distribution described in
Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which gives
rise to a negative capital account, such Partner will be allocated items of
income and gain in an amount and manner sufficient to eliminate such deficit
balance as quickly as possible, provided that the Partnership's subsequent
income, gains, losses, deductions, and credits will be allocated among the
Partners so as to achieve as nearly as possible the results that would have
been achieved if this section 4.3 had not been in this Agreement, except that
no such allocation shall be made which would violate the provisions or purposes
of such Treasury Regulation.
ARTICLE V
DISTRIBUTIONS
Except as otherwise specifically required by the provisions of
this Agreement, distributions shall be made in such amounts, in such form
(either in cash or in kind) and at such times as determined by the General
Partner, in the sole discretion of the General Partner. Unless otherwise
specifically provided herein, all distributions, including distributions
required to be made, shall be made pro rata on the basis of each Partner's
Original Capital Account Amount (see Section 3.3). For purposes of this
Article, each Partner's Original Capital Account Amount shall be reduced by
Compensation paid to the General Partner that is required to be charged to the
individual Capital Accounts of Limited Partners.
-7-
<PAGE> 8
ARTICLE VI
RECORDS AND ACCOUNTING, REPORTS, BANKING, FISCAL YEAR,
TAX RETURNS, TAX ELECTION
6.1 The Partnership shall keep at its office in Iowa the following
Partnership documents: (i) a current list of the full name and last known
business or residence address of each Partner, together with the contribution
and share in profits and losses of each Partner; (ii) a copy of the Certificate
of Limited Partnership and all certificates of amendment thereto, and any
executed copies of any powers of attorney pursuant to which any certificate has
been executed; (iii) copies of the Partnership's federal, state and local
income tax or information returns and reports, if any, for all taxable years of
the Partnership; (iv) copies of the original Agreement and all amendments
thereto; (v) financial statements of the Partnership for all fiscal years of
the Partnership; and (vi) the Partnership's books and records for at least the
current and past three (3) fiscal years.
6.2 Upon the reasonable request of a Limited Partner the General
Partner shall promptly deliver to such requesting Limited Partner, at the
expense of the Partnership, a copy of the information required to be maintained
by subsection 6.1(i), (ii) and (iii). Each Limited Partner has the right to
inspect and copy, at such Limited Partner's expense during normal business
hours, any of the Partnership records required to be maintained by Section 6.1.
6.3 The General Partner shall have prepared at least once annually
(i) financial statements (balance sheet, statement of income or loss, Partners'
equity, and changes in financial position) prepared on an accrual method
(income basis of accounting), copies of which shall be distributed to each
Partner within one hundred twenty (120) days after the close of each taxable
year of the Partnership, and (ii) Partnership information necessary for the
preparation of the Partners' federal income tax returns, copies of which shall
be distributed to each Partner within ninety (90) days after the close of each
taxable year of the Partnership. The Partnership will not have audited
financial statements prepared unless deemed appropriate or necessary by the
General Partner, the cost of which shall be an expense of the Partnership.
6.4 The General Partner shall cause income tax returns for the
Partnership to be prepared and timely filed with the appropriate authorities.
The cost of such tax returns shall be an expense of the Partnership.
6.5 The General Partner shall cause to be prepared and timely
filed, with appropriate federal and state regulatory and administrative bodies,
all reports required to be filed with such entities under the current
applicable laws, rules and regulations. Such reports shall be prepared on the
accounting or reporting basis required by such regulatory body. The cost of
-8-
<PAGE> 9
such reports shall be an expense of the Partnership. Any Partner shall be
provided with a copy of any such report upon request at such Partner's expense.
6.6 The Partnership shall adopt the accrual method of accounting
for both tax and financial accounting purposes.
6.7 All Partnership funds shall be deposited in a separate bank
account or accounts selected by the General Partner. All withdrawals shall be
made upon checks signed by the General Partner or any person or persons
authorized to do so by the General Partner.
6.8 The Partnership shall adopt a fiscal year which shall begin on
the first day of January and end on the last day of December of each year,
provided that the first fiscal year of the Partnership shall commence on the
date of formation of the Partnership and shall end on the last day of December
of the year of formation.
6.9 The General Partner shall, from time to time, make such other
tax elections as they deem necessary or desirable to carry out the business of
the Partnership or the purposes of this Agreement.
ARTICLE VII
RIGHTS AND DUTIES OF THE GENERAL PARTNER
7.1 Management Power. Except as otherwise stated in this
Agreement, the General Partner shall have exclusive management and control of
the business of the Partnership, and all decisions regarding the management and
affairs of the Partnership shall be made by the General Partner. The General
Partner shall have all the rights and powers of general partners as provided in
the Iowa Limited Partnership Act as in effect at a particular time in Iowa and
as otherwise provided by law, except to the extent such powers may be expressly
limited by this Agreement. Except as otherwise expressly provided in this
Agreement, the General Partner is hereby granted the right, power and authority
to do on behalf of the Partnership all things which, in such General Partner's
sole judgment, are necessary, proper or desirable to carry out the
aforementioned duties and responsibilities, including but not limited to the
right, power and authority, from time to time, to do the following:
(a) vote all of the Shares owned by the Partnership;
(b) make all decisions regarding acquisition and
disposition of Shares owned by the Partnership;
-9-
<PAGE> 10
(c) incur all reasonable expenditures permitted and
contemplated by this Agreement;
(d) employ and dismiss from employment any and all
employees, agents, independent contractors, attorneys and accountants;
(e) permit the assignment of a Limited Partner's interest
or allow an assignee of a Limited Partner's interest to be a substituted
Limited Partner in the Partnership, pursuant to and subject to the terms of
Sections 8.4 and 8.8 hereof, without the consent of any Limited Partner;
(f) to the extent that in the General Partner's judgment,
funds of the Partnership are not required for the conduct of the Partnership's
business, temporarily invest the excess funds as provided in Section 2.4
hereof;
(g) prosecute and protect and defend or cause to be
protected and defended all patents, patent rights, trade-names and
servicemarks, and all applications with respect thereto which may be held by
the Partnership;
(h) enter into, execute, acknowledge and deliver any and
all contracts, agreements or other instruments to effectuate any or all of the
foregoing; and
(i) borrow money and as security therefor to grant
security interests in or liens on all or any part of any property of the
Partnership.
The General Partner shall have authority to retain outside
consultants at the expense of the Partnership to provide assistance in making
decisions for the Partnership.
7.2 Rights of General Partner to Become a Limited Partner. The
General Partner may become a Limited Partner and thereby become entitled to all
of the rights of a Limited Partner to the extent of the Limited Partnership
interest so acquired, and the consent of the Limited Partners need not be
obtained. Such event would not, however, be deemed to reduce any of such
General Partner's liability hereunder as a General Partner.
7.3 Rights of Public to Rely on Authority of General Partner. No
person shall be required to determine the General Partner's authority to make
any undertaking on behalf of or to bind the Partnership, or to see to the
application or distribution of revenues or proceeds paid to the General
Partner.
7.4 Obligations of General Partner. The General Partner shall:
(a) Devote to the Partnership and apply to accomplishment
of
-10-
<PAGE> 11
Partnership purposes so much of its time and attention as it, in its sole
discretion, deems to be necessary or advisable;
(b) If deemed necessary by the General Partner, cause the
Partnership to have workers' compensation, employer's liability, public
liability and/or property damage insurance in amounts required by law or
believed by the General Partner to be adequate, whichever is greater;
(c) Maintain a Partnership capital account for each
Partner; and
(d) Cause the Partnership to take all action described in
Article VI.
Nothing in this Agreement shall preclude the employment or
engagement of any agent or third party to provide services to the Partnership
subject to the control of the General Partner.
7.5 Good Faith; Indemnification. The General Partner shall manage
and control the affairs of the Partnership to the best of its ability and the
General Partner shall use its best efforts to carry out the purposes of the
Partnership for the benefit of all of the Partners. The General Partner shall
not be liable, responsible or accountable in damages or otherwise to the
Partnership or any Limited Partner, and the Partnership shall indemnify and
hold the General Partner harmless, from and against any claim, action or suit
and any liability, damage, loss or expense (including, but not limited to,
reasonable attorneys' fees) by or to any party, for any action taken or failure
to act on behalf of the Partnership if the General Partner acted in good faith
and reasonably believed (i) the conduct was in the best interests of the
Partnership (when the General Partner acted in its official capacity), or (ii)
the conduct was at least not opposed to the Partnership's best interests (in
all other cases), and, in the case of a criminal proceeding the General Partner
had no reasonable cause to believe the conduct was unlawful. In exercising
powers, the General Partner recognizes its fiduciary responsibility to the
Partnership.
7.6 Compensation; Reimbursement; Commission.
(a) The General Partner shall receive no compensation if the
Shares owned by the Partnership, however acquired, do not exceed 5% of the
total outstanding Shares of Intellicall, Inc. If the Partnership at any time
owns, either through contribution or purchase, more than 5% of the outstanding
Shares of Intellicall, Inc., then the General Partner shall be entitled to
Compensation determined as set forth herein. The General Partner will receive
no compensation for performing its duties as General Partner under this
Agreement except as provided in this Section 7.6 or as provided in Section 10.3
(c).
-11-
<PAGE> 12
(b) Compensation shall be determined as of, and, if
owing, shall be paid on, each date of distribution. Such compensation
(hereinafter "Compensation") shall be determined and allocated (on each date of
distribution to Limited Partners) to each Limited Partner on a special basis
pursuant to a formula which will assess to each Limited Partner a portion of
Compensation equal to (i) twenty-five percent (25%) of the Profit attributable
to that Limited Partner's Base Contribution (that part of that Limited
Partner's contribution which is equal in value to 50,000 Shares of Intellicall,
Inc. (such Shares valued as set forth below), or, if less, all of the Limited
Partner's contribution), plus (ii) ten percent (10%) of the Profit attributable
to that Limited Partner's Excess Contribution (the portion, if any, of that
Limited Partner's contribution in excess of that Limited Partner's Base
Contribution).
(c) For purposes of determining Base Contribution and
Excess Contribution with respect to contributions made by Limited Partners in
the initial offering, each Share of Intellicall, Inc. shall be valued at Three
and seven-eighths Dollars ($3 7/8) (the closing price for such Shares on the
New York Stock Exchange on June 23, 1992). For purposes of determining Base
Contribution and Excess Contribution with respect to contributions made by
Limited Partners in the offering of any interests after the initial offering,
each Share of Intellicall, Inc. shall be valued at the closing price for such
Shares on the New York Stock Exchange on the date such contributions are made
to the Partnership.
(d) For purposes of this Section, Profit shall mean an
amount, if any, equal to (i) the value of distributions actually made, plus
(ii) the value of distributions (determined as of the current date of
distribution and without regard to Compensation not yet paid) to be made on the
current date of distribution, less (iii) the value of all capital contributions
made to the Partnership, determined as of the date(s) of contribution, with
Shares of Intellicall, Inc. contributed in kind to the Partnership valued as
set forth above, less (iv) all expenses (except Compensation not yet paid) and
costs incurred and paid by the Partnership, less (v) if the distribution is
intended to be the final distribution of the Partnership, all expenses (except
Compensation not yet paid) and costs to be incurred and paid by the Partnership
in winding up its affairs.
(e) The computation and allocation of Compensation is
illustrated by the examples set forth below. THE EXAMPLES USE ASSUMPTIONS FOR
THE PURPOSE OF ILLUSTRATION ONLY. THE NUMBERS USED IN THE EXAMPLES ARE NOT AND
SHALL NOT BE CONSTRUED AS BEING PROJECTIONS OF DISTRIBUTIONS, EXPENSES,
COMPENSATION OR ANY OTHER FACTOR AND THEY ARE NOT A PREDICTION OR FORECAST OF
THE RESULTS OF THE BUSINESS OF THE PARTNERSHIP.
(i) Assumptions: There are three Limited
Partners, A, B and C, all of whom made their contribution to
the Partnership as part of the initial offering. For ease of
calculation and illustration, the
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<PAGE> 13
value of each Share of Intellicall, Inc. as of June 23, 1992,
is assumed to be $3.00. Limited Partner A contributed $75,000
to the Partnership, Limited Partner B contributed $150,000 to
the Partnership, and Limited Partner C contributed $275,000 to
the Partnership. The Base Contribution of Limited Partner A
is $75,000 ($75,000 is less than 50,000 x $3.00). Limited
Partner A has no Excess Contribution. The Base Contribution
of Limited Partner B is $150,000 (50,000 x $3.00). Limited
Partner B has no Excess Contribution. The Base Contribution
of Limited Partner C is $150,000 (50,000 x $3.00). Limited
Partner C's Excess Contribution is $125,000.
The Base Contribution, Excess Contribution, and percentage of
Profit of each Limited Partner, is as follows:
<TABLE>
<CAPTION>
Limited Partner Base Excess Percentage of Profits
--------------- ---- ------ ---------------------
<S> <C> <C> <C>
A $ 75,000 15%
-0- -0-
B 150,000 30%
-0- -0-
C 150,000 30%
$125,000 25%
------------------------- -----
$500,000 100%
</TABLE>
(ii) A distribution having a value of $200,000 is
proposed to be made on July 1, 1993. The distribution is not
intended to be the final distribution. The Partnership has
incurred and paid $25,000 of expenses as of July 1, 1993. The
Compensation and allocation to Limited Partners is determined
as follows:
<TABLE>
<S> <C>
Profit: Distributions actually made $ -0-
+Value of Distribution to
be made +200,000
-All capital contributions -500,000
-Expenses to date -25,000
-----------
Profit -0-
</TABLE>
Since there is no Profit, no Compensation is earned. The
distribution of $200,000 will be made to the Limited Partners
on the following basis:
<TABLE>
<S> <C>
Limited Partner A (15% partner) $ 30,000
Limited Partner B (30% partner) 60,000
Limited Partner C (55% partner) 110,000
--------
$200,000
</TABLE>
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<PAGE> 14
(iii) Following the distribution in example (ii),
a distribution having a value of $500,000 is proposed to be
made on July 1, 1994. The distribution is not intended to be
the final distribution. The Partnership has incurred and paid
$35,000 of expenses since July 1, 1993. The Compensation and
allocation to Limited Partners is determined as follows:
<TABLE>
<S> <C>
Profit: Distributions actually made $200,000
+Value of Distribution to
be made +500,000
-All capital contributions -500,000
-Expenses to date - 60,000
--------
Profit $140,000
--------
</TABLE>
Compensation is $29,750, determined and allocated to Limited
Partners as follows:
Limited Partner A: 15% of $140,000 = $21,000 x 25% = $ 5,250
Limited Partner B: 30% of $140,000 = $42,000 x 25% = $10,500
Limited Partner C: 30% of $140,000 = $42,000 x 25% = $10,500
25% of $140,000 = $35,000 x 10% = $ 3,500
-------
Compensation = $29,750
-------
A distribution of $470,250 ($500,000 - $29,750) will be made
as follows:
Limited Partner A (15% partner) $ 75,000 - $ 5,250 = $ 69,750
Limited Partner B (30% partner) $150,000 - $10,500 = $139,500
Limited Partner C (55% partner) $275,000 - $14,000 = $261,000
-------- ------- --------
$500,000 $29,750 $470,250
-------- ------- --------
(iv) Following the distributions in example (ii)
and (iii), a distribution having a value of $700,000 is
proposed to be made on July 1, 1995. The distribution is
intended to be the final distribution, which will leave
$15,000 in the Partnership to pay the additional $15,000 of
costs and expenses which it expects to incur in winding up its
affairs. The Partnership has incurred and paid $20,000 of
expenses since July 1, 1994. The Compensation and allocation
is determined as follows:
<TABLE>
<S> <C>
Profit: Distributions actually made $670,250
+Value of Distribution to
be made +700,000
-All capital contributions -500,000
-Expenses to date including
Compensation -109,750
-Expenses of winding up -15,000
--------
Profit $745,500
--------
</TABLE>
-14-
<PAGE> 15
Additional Compensation to be paid on account of the current
distribution is $128,667, determined and allocated to Limited
Partners as follows:
Limited Partner A: 15% of $745,500 = $111,825 x 25% = $27,956
Less: Compensation paid to date $ 5,250 $22,706
-------
Limited Partner B: 30% of $745,500 = $223,650 x 25% = $55,912
Less: Compensation paid to date $10,500 $45,412
-------
Limited Partner C: 30% of $745,500 = $223,650 x 25% = $55,912
25% of $745,500 = $186,375 x 10% = $18,637
Less: Compensation paid to date $14,000 $60,549
------- --------
Additional Compensation = $128,667
--------
The current distribution of $571,333 ($700,000 - $128,667)
will be made as follows:
Limited Partner A (15% partner) $105,000 - $22,706 = $ 82,294
Limited Partner B (30% partner) $210,000 - $45,412 = $164,588
Limited Partner C (55% partner) $385,000 - $60,549 = $324,451
-------- -------- --------
$700,000 $128,667 $571,333
-------- -------- --------
(f) The General Partner shall be entitled to receive out
of the Partnership funds available therefor, reimbursement of all amounts
expended by the General Partner in payment of properly incurred Partnership
obligations paid by such General Partner out of the Partner's own funds.
(g) The General Partner shall handle all trades of Shares
through Berthel Fisher & Company Financial Services, Inc., an affiliate of the
General Partner. Berthel Fisher & Company Financial Services, Inc. shall be
entitled to receive a commission on all trades of Shares on a commission basis
equal to 75% of the regular full commission charged by Berthel Fisher & Company
Financial Services, Inc.
7.7 Other Business Ventures. To the extent consistent with the
other terms of this Agreement, any Partner, or any affiliate or other person
holding a legal or beneficial interest in any entity which is a Partner, may
engage in or possess any interest in other business ventures of every nature
and description, independently or with others, and neither the Partnership nor
the Partners shall have any right by virtue of this Agreement in or to such
independent ventures or to the income or profits derived therefrom.
7.8 Contracts with the General Partner or its Affiliates. The
General Partner may, on behalf of the Partnership, enter into contracts for
goods or services with the General Partner or any affiliates or related parties
of the General Partner. The validity of any transaction, agreement
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<PAGE> 16
or payment involving the Partnership and the General Partner or any affiliate
of the General Partner otherwise permitted by the terms of this Agreement shall
not be affected by reason of (i) the relationship between the Partnership and
the General Partner or such affiliates or related parties of the General
Partner; or (ii) the approval of said transaction, agreement or payment by the
General Partner.
7.9 Fiduciary Responsibility. The General Partner shall have a
fiduciary responsibility for the safekeeping and use of all funds and assets of
the Partnership, and the General Partner shall not employ or permit another to
employ such funds or assets in any manner except for the exclusive benefit of
the Partnership.
7.10 Permitted Expenditures. The General Partner shall, after
payment of fees and organization expenses, expend the funds (and any proceeds
from the investment of such funds) received by it as Capital Contributions of
the Partners, only for Partnership purposes, including, without limitation, the
payment of any legal or accounting fees, or any obligations incurred by the
Partnership.
After expenditures by the Partnership from the Capital
Contributions of the Partners (and any proceeds of the investment of such
Capital Contributions), the General Partner shall expend funds only for general
and administrative expenses of the Partnership, including, without limitation,
paying the General Partner's compensation and any obligations incurred by the
Partnership.
7.11 Limitation on General Partner's Authority. The General
Partner shall not have authority to:
(a) Do any act in contravention of this Agreement;
(b) Do any act that would make it impossible to carry on
the ordinary business of the Partnership;
(c) Admit a person as a General Partner without the
approval of a majority in interest of the Limited Partners; and
(d) Amend this Agreement without the approval of a
majority in interest of the Limited Partners.
-16-
<PAGE> 17
ARTICLE VIII
LIMITED PARTNERS; RIGHTS AND OBLIGATIONS
8.1 No Participation in Management. No Limited Partner (other
than a General Partner if a General Partner has acquired an Interest pursuant
to the provisions of Section 7.2 hereof) shall take part in the management of
the Partnership's business, transact any business in the Partnership's name or
have the power to sign documents for or otherwise bind the Partnership. If the
General Partner has been removed and the Partnership has been dissolved, the
Limited Partners may act for and bind the Partnership during the winding up
period as approved by a majority in interest of the Partnership Interests.
8.2 Limitation of Liability. Pursuant to the Iowa Limited
Partnership Act (and provided that such Limited Partner does not, in addition
to the exercise of the Limited Partners' rights and powers as a Limited
Partner, take part in the management or control of the business), no Limited
Partner shall be liable for losses or debts of the Partnership beyond the
aggregate amount of the Limited Partner's Capital Contribution plus the Limited
Partner's share of the undistributed net profits of the Partnership, except
that when a Limited Partner has received distributions from the Partnership
without violation of the Limited Partnership Agreement or violation of
applicable law, which distribution represents, in whole or in part, a return of
his capital contribution, the Limited Partner is liable to the Partnership for
one (1) year for the amount returned to the extent necessary to discharge the
Partnership's liabilities to creditors who extended credit to the Partnership
during the period the contribution was held by the Partnership. If such
distribution was in violation of the Limited Partnership Agreement or
applicable law, the Limited Partner is liable for six (6) years for the amounts
wrongfully returned.
8.3 No Priority. In connection with any distribution, whether
upon winding up of the Partnership or otherwise, and whether or not it shall
constitute a return of capital, no Limited Partner shall have the right to
demand or receive property other than cash, although the General Partner may
distribute property, including Shares, other than cash. No Limited Partner
shall have priority over any other Limited Partner either as to the return of
the Limited Partner's Capital Contribution to the Partnership or as to
allocations of income or expenses and tax deductions.
8.4 Transfer of Limited Partner's Interest.
(a) Subject to any restrictions on transferability imposed by
law or contained elsewhere in this Agreement, a Limited Partner may assign, in
writing, the Limited Partner's interest in the Partnership, provided:
(i) the assignee meets all of the requirements
applicable to an original subscriber of a Limited Partnership
Interest and
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<PAGE> 18
consents in writing in form satisfactory to the General
Partner to be bound by the terms of this Agreement, including
without limitation, the Power of Attorney designation
contained in Article XI hereof, as if he, she or it were the
assignor;
(ii) the General Partner consents in writing to
the assignment, which consent may be withheld in the General
Partner's absolute discretion and, in any event, will not be
given if such assignment would jeopardize the status of the
Partnership as a partnership for Federal income tax purposes,
would cause a termination of the Partnership for the purposes
of the then applicable provisions of the Iowa Limited
Partnership Act, would cause an unreasonable fractionalization
of an Interest, or would violate, or cause the Partnership to
violate, any applicable laws or governmental rule or
regulations, including without limitation, any applicable
Federal or state securities laws.
Clause (i) shall not apply to assignments of interests to the General Partner
or either of them. By designating the General Partner as attorney in fact to
execute this Agreement for and on his, her or its behalf, each Limited Partner
shall be deemed to have consented to any assignment consented to by the General
Partner. In no event shall an assignment be made to a minor or incompetent.
(b) Each Limited Partner agrees, upon the request of the
General Partner, to execute such certificates or other documents and perform
such acts as the General Partner deems appropriate to preserve the limited
liability status of the Partnership after the completion of such assignment
under the laws of the jurisdiction in which the Partnership is then subject as
a domestic partnership. For purposes of this Section, any transfer of an
interest in the Partnership, whether voluntary or by operation of law, shall be
considered an assignment.
(c) Any purported assignment of an interest in the
Partnership which is not in compliance with this Agreement is hereby declared
to be null and void and of no force and effect whatsoever.
(d) Each assigning Limited Partner agrees, prior to the
time the General Partner consents to an assignment, to pay all reasonable
expenses, including attorneys' fees, incurred by the Partnership in connection
with such assignment.
8.5 Assignee's Rights. An assignee of an interest in the
Partnership shall be entitled to receive distributions of cash or other
property from the Partnership and to receive allocations of the income and
expenses and tax deductions of the Partnership attributable to such interest
after the effective date of the assignment. The "effective date" of an
assignment of an interest in the Partnership under the provisions of this
-18-
<PAGE> 19
Section shall be that date specified in the written instrument whereby the
General Partner consents to the assignment, which date shall be not later than
the first day of the second calendar month following receipt of written notice
of assignment and fulfillment of all conditions precedent to such assignment
provided for in this Agreement.
8.6 Allocation of Distributions Subsequent to Assignment. The
income or expenses and other tax deductions of the Partnership attributable to
any interest in the Partnership acquired by reason of such assignment and any
distributions made with respect thereto shall be allocated between the assignor
and assignee based upon the length of time during any fiscal year of the
Partnership, as measured by the effective date of the assignment, that the
interest in the Partnership so assigned was owned by each of them.
8.7 Satisfactory Written Assignment Required. Anything herein to
the contrary notwithstanding, both the Partnership and the General Partner
shall be entitled to treat the assignor of such interest in the Partnership as
the absolute owner thereof in all respects, and shall incur no liability for
distributions of cash made in good faith to him, her or it, until such time as
a written assignment that conforms to the requirements of this Article has been
received by, consented to and recorded on the books of the Partnership.
8.8 Substituted Limited Partner. The assignee of any interest in
the Partnership may become a substituted limited partner in place of the
assignor upon the written consent of the General Partner, which consent may be
withheld in the General Partner's absolute discretion and, in any event, will
not be given unless all of the following conditions are satisfied:
(a) A duly executed and acknowledged written instrument
of assignment, being either a certificate evidencing the interest in
the Partnership owned by the assignor prior to such assignment or
some other instrument approved by the General Partner, is filed with
the Partnership setting forth the intention of the assignor that the
assignee become a substituted limited partner in his, her or its
place.
(b) The assignee executes an irrevocable Power of
Attorney, satisfactory to the General Partner, appointing the
General Partners as a lawful attorney-in-fact of assignee for the
purposes specified in Article XI.
(c) The assignor and assignee execute and acknowledge
such other instruments, in form and substance satisfactory to the
General Partner, as the General Partner may deem necessary or
desirable to effect such substitution.
(d) Prior to the substitution, the substituted Limited
Partner
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<PAGE> 20
pays all reasonable expenses, including attorneys' fees, incurred by
the Partnership in connection with such assignment and substitution.
(e) An opinion of counsel for the assignee is obtained
(which counsel and opinion shall be satisfactory to counsel for the
General Partner) stating that, in the opinion of said counsel, such
substitution would not jeopardize the status of the Partnership as a
partnership for Federal income tax purposes, would not cause a
termination of the Partnership for the purposes of the then
applicable provisions of the Iowa Limited Partnership Act, would not
violate, or cause the Partnership to violate, any applicable laws or
governmental rule or regulation, including without limitation, any
applicable Federal or state securities laws. By designating the
General Partner Attorney-in-Fact to execute this Agreement for and
on his, her or its behalf, each Limited Partner shall be deemed to
have consented to any substitution of an assignee in the place and
stead of an assigning Limited Partner permitted by the General
Partner.
8.9 Substitution Required for Vote. Unless and until an assignee
of an Interest in the Partnership becomes a substituted Limited Partner, such
assignee shall not be entitled to exercise any vote with respect to such
Interest.
8.10 Effective Date. The effective date of a substitution shall be
the date designated by the General Partner in writing to the substituted
Limited Partner, which shall not be later than the first day of the second
calendar month of the Partnership next following the date upon which the
General Partner has given its written consent to such substitution.
8.11 Death or Incapacity of Limited Partner. The death or legal
incapacity of a Limited Partner shall not cause a dissolution of the
Partnership, but the rights of such Limited Partner to share in the profits and
losses of the Partnership, to receive distributions of Partnership funds and to
assign a Partnership interest pursuant to Section 8.4 hereof or cause the
substitution of a substitute limited partner pursuant to Section 8.8 hereof
shall, on the happening of such an event, devolve on his, her or its personal
representative, or in the event of the death of one whose limited partnership
interest is held in joint tenancy, pass to the surviving joint tenants, subject
to the terms and conditions of this Agreement, and the Partnership shall
continue as a limited partnership. However, in no event shall such personal
representative become a substituted limited partner solely by reason of such
capacity. The estate of the Limited Partner shall be liable for all the
obligations of the deceased or incapacitated Limited Partner.
8.12 Voting Rights. The Limited Partners, by a vote of those
holding a majority in interest of Partnership Interests, shall have the right
to vote upon and direct the following:
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<PAGE> 21
(a) Election or removal of the General Partner;
(b) Termination, dissolution and winding up of the
Partnership;
(c) The sale of all or substantially all of the assets of
the Partnership, unless such transaction is part of the orderly winding up of
the business of the Partnership upon its dissolution and termination;
(d) Amendment of this Partnership Agreement, subject to
the terms and conditions of subsection 10.3(b) hereof;
(e) The election of liquidating trustees as set forth in
subsection 9.2(b) hereof;
(f) A change in the nature of the business of the
Partnership; and
(g) The incurrence of indebtedness by the Partnership
other than in the ordinary course of business.
8.13 Names, Addresses and Contributions of Limited Partners. The
names, addresses and Capital Contributions of the Limited Partners are as set
forth in the Certificate of Limited Partnership filed with the Iowa Secretary
of State as from time to time amended.
8.14 No Additional Contribution. Except as expressly provided
herein, no Partner shall be required to make any contribution to the capital of
the Partnership other than such Partner's Capital Contribution as set forth on
the Certificate of Limited Partnership as from time to time amended.
ARTICLE IX
TERMINATION AND DISTRIBUTION
9.1 Termination. The Partnership shall continue in effect until
five (5) years from the date of this Agreement, unless sooner terminated upon
the occurrence of any one or more of the following events:
(a) the death, insanity, retirement, withdrawal,
dissolution or bankruptcy of the herein designated General Partner unless the
Limited Partners elect a successor general partner or partners, which successor
general partner(s) promptly unanimously elects to continue the business of the
Partnership as more fully provided in Section 9.3 hereof;
(b) the affirmative vote of Limited Partners as set forth
in subsection 8.12(b) hereof;
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<PAGE> 22
(c) termination as provided by operation of law;
(d) the conclusion of the business of the Partnership
prior to five (5) years from the date of this Agreement; or
(e) upon the decision of the General Partner prior to
five (5) years from the date of this Agreement.
9.2 Distribution.
(a) Upon termination of the Partnership, the affairs
of the Partnership shall be wound up and all of its debts and liabilities,
including General Partner compensation, discharged in the order of priority
as provided by law. The fair market value of the respective remaining assets
of the Partnership shall then be determined. Thereupon, the assets of the
Partnership shall be distributed to the Limited Partners in accordance with
the provisions of Article V, with such distribution to be made to Partners in
proportion to the positive balances in their respective capital accounts after
giving effect to the provisions of this Agreement. Each Partner shall receive
his, her or its share of the assets in cash or in kind, and the proportion of
such share that is received in cash may vary from Partner to Partner, all as
the General Partner may decide. If such distributions are insufficient to
return the full amount of its Capital Contributions to any Partner, such
Partner shall have no recourse against any other Partner.
(b) The winding up of the affairs of the Partnership and
the distribution of its assets shall be conducted exclusively by the General
Partner or, if there is no General Partner or successor General Partner(s), as
a result of the death, insanity, withdrawal, dissolution, retirement or
bankruptcy of both or all of the General Partner(s), Limited Partners who own
more than a majority in interest of the then outstanding Interests (other than
any such Interests owned by the General Partner or any of their affiliates) may
elect one or more liquidating trustees (who may but need not be Limited
Partners) to serve in place of the General Partner for this purpose. Without
limiting the generality of the foregoing, the General Partner(s) (or such
liquidating trustee or trustees), in carrying out such winding up and
distribution, shall have full power and authority to sell all or any of the
Partnership assets, or to distribute the same in kind to the Partners for the
fair market value thereof.
9.3 Election to Carry On Business. In the event of the death,
insanity, retirement, withdrawal, dissolution or bankruptcy of the General
Partner which would cause a termination of the Partnership, within sixty (60)
days after such event, the remaining General Partner(s), if any, may, by
written notice to the Limited Partners, unanimously elect to continue the
business of the Partnership, or, if such remaining General Partner(s) does not
so elect to continue the business of the Partnership, or there is no remaining
-22-
<PAGE> 23
General Partner, then the Limited Partners may, within an additional thirty
(30) days, elect a successor general partner or partners by the affirmative
vote of Limited Partners owning a majority in interest of the then outstanding
Interests, which successor general partner(s) unanimously elect to continue the
business of the Partnership. Such vote shall be deemed for all purposes to be
a vote to remove the General Partner(s) in favor of one or more substituted
general partners pursuant to Section 10.3(c), entitling such General Partner(s)
to be paid the value of its interest in the Partnership as provided in Section
10.3(c). Unless such successor general partner elects by written notice to the
Limited Partners within thirty (30) days after its election to continue the
business of the Partnership, the Partnership shall be terminated.
9.4 Bankruptcy Defined. For purposes of this Article, the
"bankruptcy" of a General Partner shall be deemed to have occurred upon the
happening of any of the following: (i) the filing of an application by such
General Partner for, or a consent to, the appointment of a trustee of its
assets; (ii) the filing by such General Partner of a voluntary petition in
bankruptcy or the filing of a pleading in any court of record admitting in
writing its inability to pay its debts as they come due; (iii) the making by
such General Partner of a general assignment for the benefit of creditors; (iv)
the filing by such General Partner of an answer admitting the material
allegation of, or its consenting to, or defaulting in answering, a petition
filed against it in any bankruptcy proceeding; (v) the entry of an order,
judgment or decree by any court of competent jurisdiction appointing a trustee
or receiver for such General Partner's assets; or (vi) the filing by any
creditor of an involuntary petition in bankruptcy against such General Partner.
ARTICLE X
MISCELLANEOUS
10.1 Notices. Any notice, offer, consent or other communication,
required or permitted to be given or made hereunder, shall be in writing and
shall be deemed to have been sufficiently given or made when delivered
personally to the party (or an officer of the party) to whom the same is
directed, or when mailed by certified mail, return receipt requested and
postage prepaid, if to the Partnership or the General Partner, to the principal
place of business of the Partnership, or if to a Limited Partner, to his, her
or its address set forth on the Certificate of Limited Partnership filed with
the Iowa Secretary of State as amended from time to time. Any Partner may
change his, her or its address for the purpose of this Section by giving notice
of such change to the Partnership, such change to become effective on the tenth
day after such notice is given.
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<PAGE> 24
10.2 Waiver of Partition. During the term of the Partnership, each
Partner hereby irrevocably waives any right that he, she or it may have to
maintain any action for partition with respect to any Partnership property.
10.3 Interpretation and Amendment, Requests, Votes, Removal of
General Partner, Sole Agreement.
(a) This Agreement shall be governed by the laws of the
State of Iowa, and shall, subject to the restrictions on transferability set
forth herein, bind and inure to the benefit of the heirs, executors, personal
representatives, successors and assigns of the Partners. If any provision of
this Agreement shall be held invalid, the remainder of this Agreement shall not
be affected thereby. The headings in this Agreement are inserted for
convenience of reference only and shall not affect its interpretation.
(b) This Agreement may be amended by an affirmative vote
of Limited Partners who own a majority in interest of the then outstanding
Interests; provided, however, that no such amendment shall be enforceable
against any Partner if the effect of the amendment would be to increase the
liability or to increase the contributions required of that Partner, or change
adversely that Partner's rights and interest in the income, expenses, gains,
losses or income tax allocations of the Partnership, or that Partner's rights
respecting liquidation of the Partnership, unless that Partner shall have
consented in writing to the adoption of such amendment. Amendments to this
Agreement may be proposed by the General Partner or by Limited Partners holding
ten percent (10%) or more of the then outstanding Interests. Following such
proposal, the General Partner shall submit to the Limited Partners a statement
of any proposed amendment. For purpose of this Section and all other
provisions of this Partnership Agreement wherein there is a reference to
requests, voting or otherwise, each Limited Partner shall be entitled to a vote
equal to the percentage of the Partnership represented by that Limited
Partner's Interest.
(c) In addition, upon the death, insanity, bankruptcy,
retirement, dissolution or withdrawal of the General Partner or upon removal by
the written request or vote of Limited Partners who own more than a majority in
interest of the then outstanding Interests (other than any such Interests owned
by the General Partners or any of their affiliates), the General Partner shall
be deemed to have immediately withdrawn from the Partnership upon the
qualification of one or more substituted General Partners, or the election made
by any one of the remaining General Partners (if any) to continue the business
of the Partnership. In the event of such withdrawal, the withdrawing General
Partner shall be paid any Compensation earned and unpaid as of the date of such
withdrawal. Compensation shall be earned if the Partnership at any time prior
to the date of such withdrawal owned more than five percent (5%) of the
outstanding Shares of Intellicall, Inc. The Compensation due the General
Partner shall be determined and paid as if the Partnership was liquidated, all
liabilities paid, and all assets distributed on such date of
-24-
<PAGE> 25
withdrawal. Payment of the amount due hereunder to the withdrawing General
Partner shall be made immediately, in cash.
(d) Upon receipt of a written request from Limited
Partners who own at least ten percent (10%) of the then outstanding Interests,
the General Partner shall call a meeting of the Limited Partners for the
purpose of voting on a proposal for (a) the amendment of this Agreement; (b)
the continuation of the Partnership with a substituted general partner upon the
death, insanity, retirement, withdrawal or bankruptcy of the General Partner,
if the remaining General Partner, if any, has not unanimously agreed to
continue the business of the Partnership; (c) the termination of the
Partnership; or (d) any other purpose recognized by this Agreement. The
General Partner may also call a meeting of the Limited Partners on their own
initiative for any purpose recognized by this Agreement. Meeting notices and
procedures shall be in conformity with the Iowa Business Corporation Act, 496A
of the Iowa Code unless the General Partner has otherwise established rules and
regulations governing meeting notices and procedures. The General Partner
shall cause a written notice of any meeting to be mailed to all Limited
Partners within ten (10) days after receipt of such request. Such written
notice shall state the purpose of the meeting, which shall be held on a date
not less than ten (10) nor more than sixty (60) days after the date of mailing
of said notice, at a reasonable time and place. The General Partner shall also
call a meeting of the Limited Partners on its own initiative by written notice
as set forth above within ten (10) days of the occurrence of any event giving
such Limited Partners the right to a vote pursuant to this Agreement. Any
Limited Partner or his, her or its representative may obtain a list of the
names, addresses and interests of the Limited Partners upon written request to
the General Partner.
10.4 Legends. If certificates for any Interest are issued
evidencing a Limited Partner's interest in the Partnership, each such
certificate shall bear such legends regarding securities registration and
restrictions on transferability as may be deemed appropriate by legal counsel
for the Partnership.
10.5 Affiliate. For the purposes of this Agreement, the term
"affiliate" when used with reference to a specified person shall mean any
person who directly or indirectly through one or more intermediaries controls
or is controlled by or is under common control with the specified person.
"Person" means any individual, partnership, corporation, trust or other entity.
10.6 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. In addition, this Agreement may
contain more than one counterpart of the signature page, and this Agreement may
be executed by the affixing of the signatures of each of the Partners to one of
such counterpart signatures pages. All of such counterpart signature
-25-
<PAGE> 26
pages shall be read as though one, and they shall have the same force and
effect as though all of the signers had signed a single signature page.
10.7 Tax Matters Partner. The General Partner shall be the Tax
Matters Partner. The Tax Matters Partner shall be the lead partner in all
administrative dealings with the Internal Revenue Service on behalf of the
Partnership. The Tax Matters Partner shall keep Partners informed of all
administrative and judicial proceedings. The Tax Matters Partner is hereby
authorized to enter into any settlement agreements concerning Partnership tax
matters with the Internal Revenue Service.
10.8 Address of General Partner.
T. J. BERTHEL ENTERPRISES, INC.
100 Second Street, S.E.
Cedar Rapids, Iowa 52401
ARTICLE XI
POWER OF ATTORNEY
11. Power of Attorney. (a) Each Limited Partner, by such Limited
Partner's execution of the Subscription Agreement to purchase an Interest of
the Partnership, makes, constitutes and appoints Thomas J. Berthel, and if he
is unable to act, then T. J. Berthel Enterprises, Inc., as his, her or its true
and lawful agent and attorney-in-fact, with full power of substitution, in his,
her or its name, place, and stead, to make, execute, sign, acknowledge, swear
to, record and file, on behalf of him, her or it, and on behalf of the
Partnership (i) these Articles and Agreement of Limited Partnership; (ii) the
original Certificate of Limited Partnership and all amendments thereto required
or permitted by law or the provisions of this Agreement; (iii) all certificates
and other instruments deemed advisable by the General Partner, to permit the
Partnership to become or to continue as a limited partnership, or partnership
wherein the Limited Partners have limited liability, in the jurisdictions where
the Partnership may be doing business; (iv) all instruments that effect a
change or modification of the Partnership in accordance with this Agreement,
including, but not limited to, the substitution of assignees as Limited
Partners pursuant to Section 8.8 hereof; (v) all conveyances and other
instruments deemed advisable by the General Partner to effect the dissolution
and termination of the Partnership; (vi) all fictitious or assumed name
certificates required or permitted to be filed on behalf of the Partnership;
and (vii) all other instruments which may be required or permitted by law to be
filed on behalf of the Partnership.
(b) The foregoing power of attorney (i) is and shall be
irrevocable and survive the death or incapacity of each Limited Partner; (ii)
may be
-26-
<PAGE> 27
exercised by signing as attorney-in-fact for each Limited Partner or, after
listing all of the Limited Partners executing an instrument, by a single
signature acting as attorney-in-fact for all of them; and (iii) shall survive
the delivery of an assignment by a Limited Partner of the whole or any portion
of his, her or its Interest; except that, where the assignee of the whole of
such Limited Partner's Interest has been approved by the General Partner for
admission to the Partnership as a substituted Limited Partner, the power of
attorney of the assignor shall survive the delivery of such assignment for the
sole purpose of enabling the appointed officer of the General Partner to
execute, acknowledge and file any instrument necessary to effect such
substitution.
(c) Each Limited Partner shall execute and deliver to the
General Partner within five (5) days after receipt of the General Partner's
request therefor, such further designations, powers-of-attorney and other
instruments as the General Partner deems necessary.
ARTICLE XII
PARTNER RESTRICTIONS; REPRESENTATIONS AND WARRANTIES;
CONFIDENTIAL INFORMATION
12.01 Partner Restrictions. Each Limited Partner hereby agrees that
except as herein provided, neither he nor any person or entity with which he
has or shares investment control will acquire or sell or otherwise trade in
Shares, and he will not be the beneficial owner, either directly or indirectly,
of Shares, as such Shares as are owned by the Partnership. For purposes of
this Section, "Shares" shall include options for Shares and securities
convertible into Shares, and "acquire or sell and otherwise trade in" shall
include the short sale of Shares.
12.02 Representations. Each Limited Partner hereby reconfirms the
representations and warranties made in the subscription agreement. In addition
to such representations and warranties, and in addition to such other
representations and warranties as are set forth herein, each Limited Partner
hereby represents and warrants, without limitation, that:
(a) there are no Shares beneficially owned, either
directly or indirectly, by the Limited Partner that have not been or will not
be contributed to the Partnership, and
(b) he has not taken or failed to take, and will not take
or fail to take, any action with respect to Shares which is or can be construed
as a violation of the provisions of the Securities Act of 1933 (the "Act"), and
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<PAGE> 28
(c) he will cooperate with the General Partner in the
filing of such reports and filings as are required by the Act or any other
federal or state law or regulation which may require reporting or filings, and
(d) he will not take any action which is inconsistent
with the purposes of the Partnership as set forth above.
12.03 Confidential Information. The undersigned agree and covenant
that they will treat as confidential all information regarding the Partnership
made available to them or any of their employees, agents or representatives.
ARTICLE XIII
LIMITATIONS ON PARTNERSHIP PURPOSE
13.01 Limitations. Notwithstanding the statement of purpose set
forth in Section 2.4, the purpose of the Partnership is limited to the
acquisition, ownership and disposal of Shares for investment purposes only.
The Partnership's present plan is to own less than 10% of the outstanding
Shares of Intellicall, Inc., but it may acquire and own a larger percentage if
the General Partner, in its sole discretion, determines in the future to adopt
a plan to acquire a larger percentage. The Partnership shall not make any
attempt to acquire control of Intellicall, Inc. and does not expect to conduct
its affairs in a manner which will affect the policies of Intellicall, Inc.
Further, the Partnership will not plan or propose to initiate action which
would relate to or would result in:
(a) The acquisition or ownership of securities of
Intellicall, Inc. by the General Partner, any Limited Partner
or any person whose Shares would be considered to be
beneficially owned, either directly or indirectly, by a
Partner, except as set forth herein; or the disposition by
such persons of securities of Intellicall, Inc. except as set
forth herein;
(b) An extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving Intellicall,
Inc. or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of
Intellicall, Inc. or any of its subsidiaries;
(d) Any change in the present board of directors or
management of Intellicall, Inc., including any plans or
proposals to change the
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<PAGE> 29
number or term of directors or to fill any existing vacancies
on the board;
(e) Any material change in the present capitalization or
dividend policy of Intellicall, Inc.;
(f) Any other material change in Intellicall Inc.'s
business or corporate structure;
(g) Changes in Intellicall Inc.'s charter, bylaws or
instruments corresponding thereto or other actions which may
impede the acquisition of control of Intellicall, Inc. by any
person;
(h) Any class of securities of Intellicall, Inc. being
delisted from a national securities exchange or ceasing to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) A class of equity securities of Intellicall, Inc.
becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934 (the
"Act"); or
(j) Any action similar to any of those enumerated above.
Notwithstanding the foregoing, the Partnership shall not be
limited in its ability to vote and dispose of Shares owned by the Partnership
in any manner that the General Partner deems to be appropriate.
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<PAGE> 30
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
GENERAL PARTNER:
T. J. BERTHEL ENTERPRISES, INC.
By Thomas J. Berthel
-------------------------------------------
THOMAS J. BERTHEL, Its President
LIMITED PARTNERS:
T. J. BERTHEL ENTERPRISES, INC.
By Thomas J. Berthel
-------------------------------------------
THOMAS J. BERTHEL, President
Ronald O. Brendengen
- ---------------------------------------------
RONALD O. BRENDENGEN, Limited Partner
Larry Cahill
- ---------------------------------------------
LARRY CAHILL, Limited Partner
Greg Pugh
- ---------------------------------------------
GREG PUGH, Limited Partner
Darlene Elbert
- ---------------------------------------------
DARLENE ELBERT, Limited Partner
Michael R. Valliere
- ---------------------------------------------
MICHAEL R. VALLIERE, Limited Partner
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<PAGE> 31
Jon A. Robkin by Thomas J. Berthel
- ---------------------------------------------
JON A. ROBKIN, Limited Partner Attn in Fact
Von L. Elbert
- ---------------------------------------------
VON L. ELBERT, Limited Partner
-31-
<PAGE> 32
ARTICLES OF AMENDMENT
OF
LIMITED PARTNERSHIP
OF
T. J. BERTHEL INVESTMENT, L. P.,
AN IOWA LIMITED PARTNERSHIP
THESE ARTICLES OF AMENDMENT (the "Amendment") OF LIMITED PARTNERSHIP of T.
J. BERTHEL INVESTMENT, L. P., an Iowa limited partnership, are made by and
among T. J. BERTHEL ENTERPRISES, INC., an Iowa corporation, and each of the
Limited Partners of the Partnership as hereinafter set forth.
I. PURPOSE
The purpose of this Agreement is to establish the terms and conditions for
contribution of additional capital to T. J. Berthel Investment, L. P. (the
"Partnership").
II. PERCENTAGE INTEREST OF LIMITED PARTNERS
As of the date of this Agreement the Limited Partners of the Partnership
own the following percentages (referred to herein as the "Initial Percentage"):
<TABLE>
<S> <C>
Larry Cahill 75.19%
Jon A. Robken 4.66
T. J. Berthel Enterprises,
Inc. 4.66
Hawkeye Investment and Trust,
Trustee of Von Elbert IRA 4.59
Michael R. Valliere 4.06
Darlene Elbert 3.98
Von L. Elbert 2.71
Ronald O. Brendengen 0.13
Greg Pugh 0.02
------
100.00%
</TABLE>
<PAGE> 33
III. PROCEDURE FOR ADDITIONAL CONTRIBUTIONS OF CAPITAL
3.1 The Limited Partners hereby consent to any contribution of additional
capital made or to be made to the Partnership by existing Limited Partners
provided such contributions of additional capital meet the following
conditions:
A. The General Partner must agree to accept the additional capital.
B. The Partnership shall not acquire more than 9.99% of the outstanding
shares of Intellicall, Inc.
C. The General Partner shall adjust the interest of all Limited Partners
in the Partnership according to the formula set forth herein.
3.2 Provided the foregoing conditions are met, the General Partner may
accept contributions of additional capital by existing Limited Partners without
any further consent of the Limited Partners. The General Partner may, but is
not required to, give notice to the Limited Partners that the General Partner
intends to accept additional capital contributions from one or more existing
Limited Partners.
IV. DEFINITIONS
4.1 "Initial Percentage" shall mean, for each Limited Partner, that
percentage set forth in Article II of this Amendment.
4.2 "Total Shares" shall mean the total number of Shares (not including
New Shares) owned by the Partnership on the Date of Commitment.
4.3 "Date of Commitment" shall mean the date that a Limited Partner
irrevocably commits to make a contribution to the Partnership of additional
capital.
4.4 "New Shares" shall mean, with respect to a Limited Partner who has
committed to contribute additional capital, the number of Shares which could be
acquired (without regard to commissions or other costs of acquisition and
without regard to whether such Shares are actually acquired or whether such
Shares are available to be acquired) if all of the additional capital committed
to be contributed by that Limited Partner on the Date
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<PAGE> 34
of Commitment were utilized to acquire Shares. New Shares shall be determined
by dividing the amount of additional capital committed by that Limited Partner
to be contributed by the Share Price.
4.5 "Shares" shall mean the common stock of Intellicall, Inc.
4.6 "Share Price" shall mean the closing ("asked") price for Shares on the
day immediately prior to the Date of Commitment, provided the New York Stock
Exchange is open on the Date of Commitment and provided Shares are traded on
that day. If the New York Stock Exchange is not open on that day or if Shares
are not traded on that day, then such Shares shall be valued at the closing
price on the most recent day that the New York Stock Exchange was open and
Shares of Intellicall, Inc. were traded.
4.7 "Account Shares" for a Limited Partner shall be the number of Shares
obtained by multiplying Total Shares by that Limited Partner's Initial
Percentage (or if an adjustment of percentage ownership has been previously
made then by the most recent Adjusted Percentage).
4.8 "Adjusted Percentage" shall mean the percentage of interest in the
Partnership owned by each Limited Partner after the adjustment of interest as
provided herein.
4.9 "Total New Shares" shall mean the total of all New Shares with respect
to a particular Date of Commitment.
V. ADJUSTMENT OF INTEREST OF LIMITED PARTNERS
5.1 Upon the commitment to contribute additional capital by a Limited
Partner pursuant to this Amendment, the Adjusted Percentage shall be determined
for each Limited Partner by dividing (a) each Limited Partner's Account Shares
plus New Shares by (b) Total Shares plus the Total New Shares.
5.2 The application of the foregoing formula to adjust the interests of
Limited Partners is illustrated by the following examples:
A. Assume that there are 559,000 Total Shares on the Date of Commitment.
Larry Cahill ("Cahill") commits to contribute $100,000 on September 14, 1992,
the Date of Commitment. No other Limited Partners commit to contribute on
-3-
<PAGE> 35
September 14, 1992. The Share Price on September 11, 1992, is $3.125.
Cahill's Initial Percentage is 75.19%. Cahill has 32,000 New Shares ($100,000
divided by $3.125). Cahill has 420,312 Account Shares (559,000 x 75.19%).
1. Cahill's Adjusted Percentage is determined as
follows:
Account Shares + New Shares = Adjusted
---------------------------------- Percentage
Total Shares + Total New Shares
420,312 + 32,000 = 76.53%
----------------
559,000 + 32,000
2. Jon A. Robken's ("Robken") Initial Percentage is
4.66%. Robken has 26,049 Account Shares (559,000 x 4.66%).
Robken's Adjusted Percentage is determined as follows:
Account Shares + New Shares = Adjusted
---------------------------------- Percentage
Total Shares + Total New Shares
26,049 = 4.41%
----------------
559,000 + 32,000
B. Assume that there are 559,000 Total Shares on the Date of Commitment.
Cahill commits on September 14, 1992, (the Date of Commitment), to contribute
$100,000 and Robken commits to contribute $50,000. No other Limited Partners
commit on September 14, 1992, to contribute. The Share Price on September 11,
1992, is $3.125. Cahill's Initial Percentage is 75.19%. Robken's Initial
Percentage is 4.66%. Cahill has 32,000 New Shares ($100,000 divided by
$3.125). Robken has 16,000 New Shares ($50,000 divided by $3.125). Cahill has
420,312 Account Shares (559,000 x 75.19%). Robken has 26,049 Account Shares
(559,000 x 4.66%). There are 48,000 Total New Shares (32,000 + 16,000).
1. Cahill's Adjusted Percentage is determined as follows:
Account Shares + New Shares = Adjusted
---------------------------------- Percentage
Total Shares + Total New Shares
420,312 + 32,000 = 74.52%
----------------
559,000 + 48,000
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<PAGE> 36
2. Robken's Adjusted Percentage is determined as follows:
Account Shares + New Shares = Adjusted
---------------------------------- Percentage
Total Shares + Total New Shares
26,049 + 16,000 = 6.92%
------------------------------
559,000 + 48,000
3. Michael R. Valliere's ("Valliere") Initial Percentage
is 4.06%. Valliere has 22,695 Account Shares (559,000 x
4.06%). Valliere's Adjusted Percentage is determined as
follows:
Account Shares + New Shares = Adjusted
---------------------------------- Percentage
Total Shares + Total New Shares
22,695 = 3.74%
----------------
559,000 + 48,000
VI. EFFECTIVE DATE; MISCELLANEOUS
6.1 This Amendment shall be effective when it is signed by all of the
Limited Partners and by the General Partner and shall apply to all
contributions of capital made by Limited Partners after the Initial Offering of
interests, as set forth in the Articles and Agreement of Limited Partnership.
6.2 All provisions of the Partnership Agreement not specifically amended
by this Amendment shall remain in full force and effect.
T. J. BERTHEL ENTERPRISES, INC. Date: 9/24 , 1992
------
By: THOMAS J. BERTHEL
----------------------------
THOMAS J. BERTHEL, President
LARRY CAHILL Date: 9/24 , 1992
- --------------------------------- ------
LARRY CAHILL
JON A. ROBKEN Date: 10/21 , 1992
- --------------------------------- ------
JON A. ROBKEN
-5-
<PAGE> 37
MICHAEL R. VALLIERE Date: 9/24 , 1992
- --------------------------------- ------
MICHAEL R. VALLIERE
DARLENE ELBERT Date: 9/24 , 1992
- --------------------------------- ------
DARLENE ELBERT
VON L. ELBERT Date: 9/24 , 1992
- --------------------------------- ------
VON L. ELBERT
RONALD O. BRENDENGEN Date: 9/24 , 1992
- --------------------------------- ------
RONALD O. BRENDENGEN
GREG PUGH Date: 9/24 , 1992
- --------------------------------- ------
GREG PUGH
HAWKEYE INVESTMENT AND TRUST,
TRUSTEE OF VON ELBERT IRA Date: 9/24 , 1992
------
By: Rick Seger VP
------------------------------
------------------------------
-6-
<PAGE> 38
SECOND
ARTICLES OF AMENDMENT
OF
LIMITED PARTNERSHIP
OF
T. J. BERTHEL INVESTMENT, L. P.,
AN IOWA LIMITED PARTNERSHIP
THESE SECOND ARTICLES OF AMENDMENT (the "Amendment") OF LIMITED
PARTNERSHIP of T. J. BERTHEL INVESTMENT, L. P., an Iowa limited partnership
(the "Partnership"), are made by and among T. J. BERTHEL ENTERPRISES, INC., an
Iowa corporation (the "General Partner"), and each of the Limited Partners of
the Partnership as hereinafter set forth, and amend the Articles and Agreement
of Limited Partnership of the Partnership dated June 30, 1992, previously
amended by Articles of Amendment thereto effective October 21, 1992
(collectively, the "Partnership Agreement").
I. PURPOSE
The purpose of this Amendment is to establish the terms and conditions for
Limited Partners to withdraw from the Partnership and to receive a distribution
of their pro rata share of the Partnership assets, after deducting such Limited
Partners' pro rata share of accrued expenses, the costs incurred in providing
for the distribution to the Limited Partners, and establishing a reserve for
the cost of termination of the Partnership.
II. DEFINITIONS
2.1 All terms not otherwise defined herein shall be defined as set out in
the Partnership Agreement, as amended.
2.2 "Date of Election" means a date determined as provided in Section 3.1
by which a Limited Partner must irrevocably elect to withdraw from the
Partnership.
2.3 "All Shares" means all Shares of the common stock of Intellicall, Inc.
owned by the Partnership on a Date of Election.
2.4 "Distributed Shares" means the number of Shares obtained by
multiplying All Shares by a withdrawing Limited Partner's Adjusted Percentage.
<PAGE> 39
2.5 "Distributed Cash" means the amount obtained by multiplying the Total
Cash of the Partnership by the withdrawing Limited Partner's Adjusted
Percentage.
2.6 "Total Cash" means all of the cash of the Partnership on a Date of
Election (not including (i) the proceeds derived from the sale of Distributed
Shares pursuant to Section 3.4 and (ii) cash held by the General Partner and
designated as a reserve to cover the costs of terminating the Partnership in
the future), reduced by the total of all outstanding obligations of the
Partnership incurred on or before the Date of Election, including, without
limitation, professional fees, filing fees and loans. Total Cash may be a
negative number. The amount of the reserve to cover the costs of terminating
the Partnership in the future shall be established in an amount determined in
the sole discretion of the General Partner.
III. PROCEDURE FOR WITHDRAWAL BY A LIMITED PARTNER
3.1 The General Partner may, from time to time, notify the Limited
Partners of a Date of Election. Such notice shall be given to the Limited
Partners at least ten (10) days prior to the Date of Election.
3.2 Upon receipt of a notice of a Date of Election from the General
Partner, a Limited Partner may elect to withdraw from the Partnership by
delivering to the General Partner on or before the Date of Election a written
notification of such Limited Partner's election to withdraw from the
Partnership. All Limited Partners electing to withdraw from the Partnership
shall be deemed to have so elected on the Date of Election, regardless of the
actual date such written election was received by the General Partner.
3.3 The Distributed Shares and the Distributed Cash of a withdrawing
Limited Partner shall be calculated as of the Date of Election.
3.4 During the thirty (30) day period following a Date of Election, the
General Partner shall sell the Distributed Shares of all withdrawing Limited
Partners. The General Partner shall use its best efforts to obtain the best
price possible for such Distributed Shares. If there is more than one
withdrawing Limited Partner, the proceeds from the sale of all of the
Distributed Shares of all withdrawing Limited Partners shall be divided pro
rata among all of the withdrawing Limited Partners, based upon the withdrawing
Limited Partners' Adjusted
-2-
<PAGE> 40
Percentages. The proceeds of such sale of Distributed Shares, plus or minus
Distributed Cash, shall be distributed pro rata to the withdrawing Limited
Partners as soon as practicable after the end of such thirty (30) day period,
after deducting the following:
(a) the expenses incurred by the General Partner and/or the
Partnership in connection with the sale of the Distributed Shares;
and
(b) compensation to be paid to the General Partner as provided
in Article IV.
IV. COMPENSATION
The following sub-sections are hereby added to Section 7.6 of the
Partnership Agreement:
(h) If withdrawing Limited Partners receive a distribution as provided in
Section 3.4 of the Second Articles of Amendment, Compensation shall be
determined and paid as of such date of distribution as provided in Section 7.6,
but only with respect to the withdrawing Limited Partners.
(i) The computation and allocation of Compensation to withdrawing Limited
Partners is illustrated by the examples set forth below. THE EXAMPLES USE
ASSUMPTIONS FOR THE PURPOSE OF ILLUSTRATION ONLY. THE NUMBERS USED IN THE
EXAMPLES ARE NOT AND SHALL NOT BE CONSTRUED AS BEING PROJECTIONS OF
DISTRIBUTIONS, EXPENSES, COMPENSATION OR ANY OTHER FACTOR AND THEY ARE NOT A
PREDICTION OR FORECAST OF THE RESULTS OF THE BUSINESS OF THE PARTNERSHIP.
(i) Assumptions: There are five Limited Partners, A, B, C, D
and E, all of whom made their contribution to the Partnership as
part of the initial offering. For ease of calculation and
illustration, the value of each Share of Intellicall, Inc. as of
June 23, 1992, is assumed to be $3.00. Limited Partner A
contributed $75,000 to the Partnership, Limited Partner B
contributed $150,000 to the Partnership, Limited Partner C
contributed $275,000 to the Partnership, Limited Partner D
contributed $50,000 to the Partnership, Limited Partner E
contributed $50,000 to the Partnership. No additional
contributions have been made. The Base Contribution of Limited
Partner A is $75,000 ($75,000 is less than 50,000 x $3.00).
Limited Partner A has no Excess Contribution. The Base
-3-
<PAGE> 41
Contribution of Limited Partner B is $150,000 (50,000 x $3.00).
Limited Partner B has no Excess Contribution. The Base
Contribution of Limited Partner C is $150,000 (50,000 x $3.00).
Limited Partner C's Excess Contribution is $125,000. The Base
Contribution of Limited Partner D is $50,000 ($50,000 is less than
50,000 x $3.00). Limited Partner D has no Excess Contribution.
The Base Contribution of Limited Partner E is $50,000 ($50,000 is
less than 50,000 x $3.00). Limited Partner E has no Excess
Contribution.
The Base Contribution, Excess Contribution, and percentage of profit of each
Limited Partner, is as follows:
<TABLE>
<CAPTION>
Limited Base Excess Percentage of Profits
------- ----- ------ ---------------------
Partner
-------
<S> <C> <C> <C>
A $ 75,000 12.50%
-0- -0-
B 150,000 25.00%
-0- -0-
C 150,000 25.00%
$125,000 20.83%
D 50,000 8.33%
-0- -0-
E 50,000 8.33%
-0- -0-
----------------------------------
$600,000 100.00%
</TABLE>
(ii) Example. Limited Partners A, D and E elect to withdraw
as of a Date of Election. On the Date of Election, the Partnership
owns 550,000 shares of Intellicall. Limited Partners A, D and E
together have a 29.16% interest in the profits of the Partnership.
During the thirty (30) day period beginning on the Date of Election
the General Partner sells 160,380 shares of Intellicall (550,000 X
29.16%) for an average sales price of Eleven Dollars ($11.00). In
selling the shares, the Partnership realized $1,764,180 (160,380 X
$11.00), and incurred sales expenses of $40,000, for net proceeds
of $1,724,180. On the Date of Election, the Partnership had cash
on hand of $50,000 and accrued but unpaid expenses of $10,000. The
Partnership had incurred and paid $25,000 of expenses as of the
Date of Election. No previous distributions have been made to any
Limited Partner. The General Partner estimates that a reserve of
$20,000 is necessary to wind up the affairs of the Partnership in
the future.
-4-
<PAGE> 42
Thirty days after the Date of Election, the General Partner makes a final
distribution to the withdrawing Limited Partners. The amount of distribution
and compensation, and the allocation of distribution and compensation to
withdrawing Limited Partners is computed as follows:
(a) Determination of Profit:
<TABLE>
<S> <C>
Distributions made to date $-0-
+Proceeds from Sale of Shares +1,764,180
-Costs of Sale of Shares -40,000
-Capital contributions of withdrawing
Limited Partners -175,000
-29.16% of Expenses to date
($25,000 X 29.16%) -7,290
+Withdrawing Limited Partners' share of
cash on hand ($50,000 X 29.16%) +14,580
-Withdrawing Limited Partners' share of
reserve ($20,000 X 29.16%) -5,832
-Withdrawing Limited Partners' share of
incurred but unpaid expenses
($10,000 X 29.16%) -2,916
----------
Profit: $1,547,722
</TABLE>
(b) Allocation Among Withdrawing Limited Partners:
The withdrawing Limited Partners have the following interests in the
distribution to be made to withdrawing Limited Partners:
<TABLE>
<CAPTION>
Percentage of Profits
Limited of withdrawing Limited
Partner Base Excess Partners
------- ---- ------ ----------------------
<S> <C> <C> <C>
A $75,000 -0- 42.86%
D 50,000 -0- 28.57%
E 50,000 -0- 28.57%
-------- ------
$175,000 100.00%
</TABLE>
(c) Determination of Compensation.
Compensation is $386,930, determined and allocated to withdrawing Limited
Partners as follows:
-5-
<PAGE> 43
<TABLE>
<S> <C>
Limited Partner A:
42.86% of $1,547,722 = $663,353 x 25% = $165,838
Limited Partner D:
28.57% of $1,547,722 = $442,184 x 25% = $110,546
Limited Partner E:
28.57% of $1,547,722 = $442,184 x 25% = $110,546
--------
Compensation = $386,930
--------
</TABLE>
(d) Amount and Allocation of Distribution.
The amount to be distributed is determined as follows:
<TABLE>
<S> <C> <C>
Proceeds from sale of Shares $1,764,180
Cash on hand 14,580
Less: Costs of Sale $40,000
Unpaid Expenses 2,916
Reserve 5,832
Compensation 386,930
-------
(435,678)
----------
$1,343,082
</TABLE>
The distribution will be made to withdrawing Limited Partners A, D and E as
follows:
Limited Partner A
(42.86% share): $1,343,082 X 42.86% = $575,644
Limited Partner D
(28.57% share): $1,343,082 X 28.57% = $383,719
Limited Partner E
(28.57% share): $1,343,082 X 28.57% = $383,719
(iii) Example. Following the distributions shown in example
(ii), the General Partner elects to terminate the Partnership. The
remaining Limited Partners are Limited Partners B and C. The
389,620 shares remaining after the sale described in example (ii)
have been sold for an average price of Twelve Dollars ($12.00). In
selling the shares, the Partnership realized $4,675,440 (389,620 X
$12.00), and incurred sales expenses of $115,000, for net proceeds
of $4,560,440. On the date of final distribution from the
Partnership, the Partnership had cash on hand of $60,000 and
accrued but unpaid expenses of $20,000.
-6-
<PAGE> 44
The Partnership had incurred and paid $35,000 of expenses as of the
date of termination of the Partnership. No previous distributions
have been made to any of the remaining Limited Partners, and none
of the remaining Limited Partners have made any additional
contributions to the Partnership. The General Partner estimates
that a reserve of $20,000 is necessary to wind up the affairs of
the Partnership in the future.
The General Partner makes a final distribution to the Limited
Partners. The amount of distribution and compensation, and the allocation of
distribution and compensation to Limited Partners is computed as follows:
(a) Determination of Profit:
<TABLE>
<S> <C>
Distributions made to date $-0-
+Proceeds from Sale of Shares +4,675,440
- -Costs of Sale of Shares -115,000
- -Capital contributions of
Limited Partners -425,000
- -Expenses to date -35,000
+Cash on hand +60,000
- -Reserve for winding up Partnership -20,000
- -Incurred but unpaid expenses -20,000
----------
Profit: $4,120,440
</TABLE>
(b) Allocation Among Limited Partners:
The Limited Partners have the following interests in the distribution to
be made to Limited Partners:
<TABLE>
<CAPTION>
Limited Percentage of Profits
Partner Base Excess of Limited Partners
------- ---- ------ ---------------------
<S> <C> <C> <C>
B $150,0000 -0- 35.29%
C 150,000 35.29%
$125,000 29.42%
--------------------- ------
$425,000 100.00%
</TABLE>
(c) Determination of Compensation.
Compensation is $848,273, determined and allocated to Limited Partners as
follows:
Limited Partner B:
35.29% of $4,120,440 = $1,454,103 X 25% = $363,525
-7-
<PAGE> 45
Limited Partner C:
35.29% of $4,120,440 = $1,454,103 X 25% = $363,525
29.42% of $4,120,220 = $1,212,233 X 10% = $121,223
--------
Compensation = $848,273
--------
(d) Amount and Allocation of Distribution.
The amount to be distributed, not including reduction for Compensation, is
determined as follows:
<TABLE>
<S> <C> <C>
Proceeds from sale of Shares $4,675,440
Cash on hand 60,000
Less: Costs of Sale $115,000
Unpaid Expenses 20,000
Reserve 20,000
--------
(155,000)
----------
$4,580,440
</TABLE>
The distribution will be made to Limited Partners B and C as follows:
<TABLE>
<S> <C>
Limited Partner B
(35.29% share):$4,580,440 X 35.29% = $1,616,437
Less Compensation 363,525
----------
Distribution to Limited Partner B: 1,252,912
Limited Partner C
(64.71% share):$4,580,440 X 64.71% = $2,964,003
Less Compensation 484,748
----------
Distribution to Limited Partner C: 2,479,255
</TABLE>
V. ADJUSTMENT OF INTEREST OF LIMITED PARTNERS
If some but not all of the Limited Partners elect to withdraw as of a Date
of Election, the Adjusted Percentage interest of the remaining Limited Partners
shall be further adjusted to reflect the withdrawal of all withdrawing Limited
Partners.
VI. EFFECTIVE DATE; MISCELLANEOUS
6.1 This Amendment shall be effective when it is signed by all of the
Limited Partners and by the General Partner.
-8-
<PAGE> 46
6.2 All provisions of the Partnership Agreement not specifically amended
by this Amendment shall remain in full force and effect.
T. J. BERTHEL ENTERPRISES, INC. Date: , 1993
------------------
By:
------------------------------
THOMAS J. BERTHEL, President
Date: , 1993
- --------------------------------- ------------------
LARRY CAHILL
Date: , 1993
- --------------------------------- ------------------
JON A. ROBKEN
Date: , 1993
- --------------------------------- ------------------
MICHAEL R. VALLIERE
Date: , 1993
- --------------------------------- ------------------
DARLENE ELBERT
Date: , 1993
- --------------------------------- ------------------
VON L. ELBERT
Date: , 1993
- --------------------------------- ------------------
RONALD O. BRENDENGEN
Date: , 1993
- --------------------------------- ------------------
GREG PUGH
HAWKEYE INVESTMENT AND TRUST,
TRUSTEE OF VON ELBERT IRA Date: , 1993
------------------
By:
-----------------------------
-----------------------------
-9-
<PAGE> 47
THIRD
ARTICLES OF AMENDMENT
OF
LIMITED PARTNERSHIP
OF
T. J. BERTHEL INVESTMENT, L.P.
AN IOWA LIMITED PARTNERSHIP
THESE THIRD ARTICLES OF AMENDMENT (the "Amendment") OF LIMITED PARTNERSHIP
of T. J. BERTHEL INVESTMENT, L.P., an Iowa limited partnership (the
"Partnership"), are made by and among T. J. BERTHEL ENTERPRISES, INC., an
Iowa corporation (the "General Partner"), and each of the Limited Partners of
the Partnership as hereinafter set forth, and amend the Articles and Agreement
of Limited Partnership of the Partnership dated June 30, 1992, previously
amended by Articles of Amendment thereto effective October 21, 1992, and by
Second Articles of Amendment thereto effective July 1, 1993.
The purpose of this Amendment is to expand the purpose of the Partnership
and to provide for a method of compensating the General Partner for services in
connection with the expanded activities of the Partnership.
1. Section 2.4 is amended by deleting the last sentence of the first
paragraph and inserting in lieu thereof the following:
The Partnership may also make investments in companies and/or ventures
("Other Investments") other than Intellicall, Inc., as the General Partner
from time to time determines.
2. Section 7.1 is amended by deleting subparagraphs 7.1(a) and 7.1(b) and
inserting in lieu thereof the following:
(a) vote all of the Shares and all interests in
Other Investments owned by the Partnership;
(b) make all decisions regarding acquisition and
disposition of Shares and Other Investments owned by
the Partnership;
3. Section 7.6, subparagraph (d) is amended by adding at the end thereof
the following:
For purposes of this Section, "distributions"
shall include any distribution, whatever the source,
including, without limitation, distributions resulting
from investment in Shares or Other Investments.
<PAGE> 48
4. Section 13.01 is amended by deleting the first sentence thereof and
inserting in lieu thereof the following:
Notwithstanding the statement of purpose set
forth in Section 2.4, the Partnership's activity with
respect to Shares is limited to the acquisition,
ownership and disposal of Shares for investment
purposes only.
5. This Third Amendment shall be effective when it is signed by all of the
Limited Partners and by the General Partner.
6. All provisions of this Partnership Agreement not specifically amended
by this Third Amendment shall remain full force and effect.
T. J. BERTHEL ENTERPRISES, INC.
Date: 5/23 , 1995 By THOMAS J. BERTHEL
- ------------------------------- ---------------------------------
THOMAS J. BERTHEL, President
Date: 5/25 , 1995 LARRY CAHILL
- ------------------------------- ---------------------------------
LARRY CAHILL
Date: 5/25 , 1995 MICHAEL R. VALLIERE
- ------------------------------- ---------------------------------
MICHAEL R. VALLIERE
Date: 5/25 , 1995 DARLENE ELBERT
- ------------------------------- ---------------------------------
DARLENE ELBERT
HAWKEYE INVESTMENT AND TRUST,
TRUSTEE OF VON ELBERT IRA
Date: 5/25 , 1995 By RICK SEGER V.P.
- ------------------------------- ---------------------------------
---------------------------------
-2-
<PAGE> 1
EXHIBIT (c)
PROMISSORY NOTE
$425,000 December 31, 1996
FOR VALUE RECEIVED, the undersigned, BERTHEL FISHER & COMPANY, INC., an
Iowa corporation, and T. J. BERTHEL INVESTMENTS, L.P., an Iowa limited
partnership (collectively "Maker") jointly, severally and unconditionally
promise to pay to the order of INTELLICALL, INC., a Delaware corporation
("Payee"), at 2155 Chenault, Suite 410, Carrollton, Texas 75006-5023 or such
other address given to Maker by Payee the principal sum of FOUR HUNDRED
TWENTY-FIVE THOUSAND AND 00/100 DOLLARS ($425,000), in lawful money of the
United States of America, together with interest (calculated on the basis of a
365 or 366-day year, as appropriate), on the unpaid principal balance from
day-to-day remaining, computed from the date of advance until maturity at the
rate per annum which shall from day-to-day be equal to ten percent (10%).
Section 1. Payment. The principal of and interest upon this Note
shall be due and payable as follows:
(a) Interest, computed as aforesaid, shall be due and payable
quarterly as it accrues, commencing March 31, 1997, and thereafter,
on the last day of each succeeding calendar quarter during the term
of this Note and at maturity; and
(b) The principal of this Note shall be due and payable in one
installment on December 31, 1997, in the amount of the unpaid
principal balance of and accrued unpaid interest upon this Note as
of such date.
Should the principal of, or any installment of the principal of or
interest upon, this Note become due and payable on any day other than a
Business Day, the payment thereof shall be extended to the next succeeding
Business Day, and interest shall be payable with respect to such extension.
All payments of principal of and interest on this Note shall be made by Maker
to Payee in federal or other immediately available funds. Payments made to
Payee by Maker hereunder shall be applied first to accrued interest and then to
principal. The term "Business Day" shall mean a day upon which business is
transacted by national banks in Dallas, Texas.
All past due principal of and, to the extent permitted by applicable law,
interest upon this Note shall bear interest at the maximum rate established by
applicable law, or if no maximum rate is established by applicable law, then at
the rate per annum which shall from day-to-day be equal to sixteen percent
(16%).
Section 2. Waiver. Maker and each surety, endorser, guarantor and
other party ever liable for payment of any sums of money payable upon this
Note, jointly and severally waive presentment, demand, protest, notice of
protest and non-payment or other notice of default, notice of acceleration and
intention to accelerate or other notice of any kind, and agree that their
liability under this Note shall not be affected by any renewal or extension in
the time of
<PAGE> 2
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes, regardless of the
number of such renewals, extensions, indulgences, releases or changes.
No waiver by Payee of any of its rights or remedies hereunder or under any
other document evidencing or securing this Note or otherwise, shall be
considered a waiver of any other subsequent right or remedy of Payee; no delay
or omission in the exercise or enforcement by Payee of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Payee; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Payee.
Section 3. Events of Default and Remedies. An "Event of Default"
shall exist hereunder if any one or more of the following events shall occur
and be continuing: (a) Maker shall fail to pay on or before the 10th day
following the due date any principal of, or interest upon, this Note; (b) any
representation or warranty made by Maker to Payee herein or in any of other
documents executed herewith shall prove to be untrue or inaccurate in any
material respect; (c) default shall occur in the performance of any of the
covenants or agreements of Maker contained herein or in any other document
executed or delivered to Payee in connection herewith; (d) Maker, or either of
them, shall (1) apply for or consent to the appointment of a receiver, trustee,
intervenor, custodian or liquidator of itself or of all or a substantial part
of its assets, (2) be adjudicated a bankrupt or insolvent or file a voluntary
petition for bankruptcy or admit in writing that it is unable to pay its debts
as they become due, (3) make a general assignment for the benefit of creditors,
(4) file a petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy or insolvency laws, or (5)
file an answer admitting the material allegations of, or consent to, or default
in answering, a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding, or take corporate action for the purpose of effecting
any of the foregoing; (e) an order, judgment or decree shall be entered by any
court of competent jurisdiction or other competent authority approving a
petition seeking reorganization of Maker, or either of them, or appointing a
receiver, trustee, intervenor or liquidator of any such person, or of all or
substantially all of its or their assets, and such order, judgment or decree
shall continue unstayed and in effect for a period of sixty (60) days; or (f)
the dissolution or termination of Maker, or either of them.
If Maker fails or refuses to pay any part of the principal of or interest
upon this Note or the Obligation as the same become due, or upon the occurrence
of any Event of Default hereunder of under any other agreement or instrument
securing or assuring the payment of this Note or executed in connection
herewith, then in any such event the holder hereof may, at its option, (i)
declare, the entire unpaid balance of principal of and accrued interest under
this Note to be immediately due and payable without presentment or notice of
any kind which Maker waives pursuant to Section 2 herein, (ii) reduce any claim
to judgment; and/or (iii) pursue and enforce any of Payee's rights and remedies
available pursuant to any applicable law or agreement.
Section 4. Notice. Whenever this Note requires or permits any notice,
approval, request or demand from one party to another, the notice, approval,
request or demand must
-2-
<PAGE> 3
be in writing and shall be deemed to have been given when personally served
or when deposited in the United States mails, registered or certified, return
receipt requested, addressed to the party to be notified at the following
address (or at such other address as may have been designated by written
notice):
Payee: INTELLICALL, INC.
2155 Chenault, Suite 410
Carrollton, Texas 75006-5023
Maker: Berthel Fisher & Company
100 Second Street, SE
Cedar Rapids, Iowa 52407
T. J. Berthel Investments, L.P.
100 Second Street, SE
Cedar Rapids, Iowa 52407
Section 5. Voluntary Prepayment. Maker reserves the right to prepay
the outstanding principal balance of this Note, in whole or in part, at any
time and from time to time, without premium or penalty. Any such prepayment
shall be made together with payment of interest accrued on the amount of
principal being prepaid through the date of such prepayment, and shall be
applied to the installments of principal due hereunder in the inverse order of
maturity.
Section 6. Usury Laws. Regardless of any provisions contained in this
Note, the Payee shall never be deemed to have contracted for or be entitled to
receive, collect or apply as interest on the Note, any amount in excess of the
highest lawful rate, and, in the event Payee ever receives, collects or applies
as interest any such excess, such amount which would be excessive interest
shall be applied to the reduction of the unpaid principal balance of this Note,
and, if the principal balance of this Note is paid in full, any remaining
excess shall forthwith be paid to Maker. All interest paid or agreed to be
paid to Payee shall, to the extent permitted by any applicable law, be
amortized, prorated, allocated, and spread throughout the full period
(including any renewal or extension) until payment in full of the principal so
that the interest hereon for such full period shall not exceed the maximum
amount permissible under such law. Payee expressly disavows any intent to
contract for, charge or receive interest in an amount which exceeds the maximum
amount permissible, under any applicable law. This Section shall control all
agreements between the Maker and Payee.
Section 7. Letter Agreement. This Note is delivered in partial
payment of certain securities being sold by Payee to Maker pursuant to that
certain letter agreement dated December 31, 1996 (the "Letter Agreement") by
and among Maker and Payee. Each of Maker and Payee represent and warrant to
the other that each has obtained all necessary corporate and partnership
authority to execute and deliver the Letter Agreement and this Note, where
applicable, and to consummate the transactions contemplated therein and herein
and that the execution and delivery of the Letter Agreement and this Note does
not and will not violate any agreement binding on either Maker or Payee (except
for the consent of Payee's senior secured
-3-
<PAGE> 4
lender, which Payee has or will obtain prior to the delivery of the Securities
as defined in the Letter Agreement).
Section 8. Costs. If this Note is placed in the hands of an attorney
for collection, or if it is collected through any legal proceeding at law or in
equity, or in bankruptcy, receivership or other court proceeding, Maker agrees
to pay all costs of collection, including, but not limited to, court costs and
reasonable attorneys' fees, including all costs of appeal.
Section 9. Applicable Law. This Note is being executed and delivered,
and is intended to be performed in the State of Texas. Except to the extent
that the laws of the United States may apply to the terms hereof, the
substantive laws of the State of Texas shall govern the validity, construction
enforcement and interpretation of this Note. In the event of a dispute
involving this Note or any other instruments executed in connection herewith,
the undersigned irrevocably agrees that venue for such dispute shall lie in any
court of competent jurisdiction in Dallas County, Texas.
Maker:
BERTHEL FISHER & COMPANY
By: /s/ Thomas J. Berthel
-------------------------
Name: Thomas J. Berthel
-------------------------
Title: President and CEO
-------------------------
T. J. BERTHEL INVESTMENTS, L.P.
By: /s/ Thomas J. Berthel
-------------------------
Name: Thomas J. Berthel
-------------------------
Title: President of
General Partner
-------------------------
-4-
<PAGE> 5
[KANE, RUSSELL, COLEMAN & LOGAN LETTERHEAD]
January 7, 1997
Michael H. Barnes
Intellicall, Inc.
2155 Chenault, Suite 410
Carrollton, Texas 75006
Thomas J. Berthel
President
Berthel Fisher & Company
100 Second Street S.E.
Cedar Rapids, Iowa 52407-4250
Thomas J. Berthel
President of the General Partner
T. J. Berthel Investments, L.P.
100 Second Street S.E.
Cedar Rapids, Iowa 52407-4250
Re: Binding Letter of Intent regarding the purchase by Berthel Fisher &
Company and T. J. Berthel Investments, L.P. of Murdock Communications
Corporation securities that are owned by Intellicall, Inc. letter dated
December 31, 1996 (the "Letter Agreement")
Gentlemen:
Pursuant to the terms of the Letter Agreement, the firm of Kane, Russell,
Coleman & Logan, P.C. has agreed to act as the Escrow Agent for the
consummation of the transactions contemplated by the Letter Agreement. Acting
in our capacity under the Letter Agreement we currently have in our possession
the following: (1) wired funds currently in our Trust Account representing
$212,500 from each of Berthel Fisher & Company ("BFC") and T. J. Berthel
Investments, L.P. ("TJB") for a total of $425,000 (the "Cash"); (2) Promissory
Note dated December 31, 1996 executed by BFC and TJB in the original principal
amount of $425,000 (the "Promissory Note"); (3) Murdock Remmers & Associates,
Inc. $1 million Preferred Stock Subordinated Note dated December 31, 1994 (the
"Murdock Note"); and (4) Stock Purchase Warrant No. A-00060 and Stock Purchase
Warrant No. W00087 issued by Murdock Remmers & Associates, Inc. (the
"Warrants").
By your execution below, each of you hereby authorizes, empowers and
directs Kane, Russell, Coleman & Logan, P.C., acting in its capacity as Escrow
Agent under the Letter
<PAGE> 6
January 7, 1997
Page 2
Agreement, to distribute the items set forth above as follows: (a) to Michael
H. Barnes, on behalf of Intellicall, Inc., the Cash and the Promissory Note and
(b) to Thomas J. Berthel, on behalf of BFC and TJB, the Murdock Note and the
Warrants. The documents to be delivered to Mr. Berthel will be delivered by
Federal Express for delivery on Wednesday, January 8, 1997.
Upon compliance with the distribution instructions contained in the
foregoing paragraph, each of you hereby releases Kane, Russell, Coleman &
Logan, P.C., and its attorneys, from any further or other obligation, liability
or duty under the Letter Agreement. If the foregoing meets with your approval,
please execute in the spaces provided below. Each of you agree that receipt of
facsimile signatures by the undersigned shall be sufficient. This letter may
be executed in counterparts all of which shall be deemed one and the same
letter.
Very truly yours,
KANE, RUSSELL, COLEMAN & LOGAN, P.C.
By: /s/ Patrick V. Stark
-------------------------------
Patrick V. Stark
PVS:lb
AGREED as of January 7, 1997.
INTELLICALL, INC.
By: /s/ Michael H. Barnes
----------------------------------------
Michael H. Barnes, Senior Vice President
and Chief Financial Officer
BERTHEL FISHER & COMPANY
By: /s/ Thomas J. Berthel
----------------------------------------
Thomas J. Berthel, President
T. J. BERTHEL INVESTMENTS, L.P.
By: /s/ Thomas J. Berthel
----------------------------------------
Thomas J. Berthel, President of the
General Partner
