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HomeMy WebLinkAboutLimited Partnership AgreementLIMITED PARTNERSHIP AGREEMENT t OF MOREAU FAMILY INVESTMENTS, LTD. We, MOREAU MANAGEMENT, LLC, a Texas Limited Liability Company, herein referred to as the "General Partner", and CHARLES S. MOREAU AND SUZANNE MOREAU, herein referred to as the "Limited Partner" (collectively referred to as the "Partners") make this agreement (the "Agreement") on November I S , 2002. ARTICLE I FORMATION Organization 1.1 The parties hereto hereby form a limited partnership, named MORE, AU FAMILY INVESTMENTS, LTD., herein referred to as the "Partnership", to be governed under the Texas Revised Limited Partnership Act, Article 6132a• 1 of the Texas Revised Civil Statutes of the State of Texas, herein referred to as the "TRLPA". Certificate of Limited Partnership 1.2 The General Partner shall execute a Certificate of Limited Partnership at the time this Agreement is executed, file the certificate with the Secretary of State of the State of Texas, and send a file -stamped copy of the certificate to each Partner. Thereafter, the General Partner shall execute and file other certificates or instruments as necessary, appropriate or convenient under the TRLPA and any other CJaws of the State of Texas and any other states where the Partnership decides to transact business. Purpose of Partnership 1.3 The purposes of the Partnership shall be as follows: a. The nature of the business and of the purposes to be conducted and promoted b� ' the partnership, is to engage in the following activities and any other lawful activity demanded by the General Partner: l . To own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and otherwise deal with personal or real property of any type. 2. To exercise all powers enumerated in the Revised Article 6132a-1 of the Texas Revised Civil Statutes of the State of Texas necessary or convenient to the conduct, promotion or attainment of the business or purposes otherwise set forth herein. ARTICLE H NAMES AND PLACE OF BUSINESS Name or Limited Partnership 2.1 The business of the partnership shall be 6onducted under the name MOREAU FAMILY INVESTMENTS, LTD. and under such variations of this name as may be necessary to comply with the .. ..CA I q13o Fi m .. Laws of Texas and other states within which the Partnership may do business or make investments or such other names as the Partnership may agree from time to time. The General Partner shall promptly execute and duly file with the proper offices in each state in winch the Partnership may conduct the activities hereinafter authorized one or more certificates as required by the Fictitious Name or Assumed Name Act or similar statute in effect as to each such state in which such activities are so conducted. Location of Principal Place of Business 2.2 The principal place of business shall be located at 1834 B ARRIS, COLLEGE STATION, TEXAS 77845 but additional places of business may be located elsewhere. The registered office in Texas and the principal office in the United States shall be J. Fred Bayliss, P.C.,1305 West Villa Maria, Bryan, Texas 77801 as defined in the TRLPA. The General Partner may change the registered office in Texas and principal office in the United States by complying with the provisions of the TRLPA and all other applicable laws. The General Partner may establish additional places of business of the Partnership. 2.3 a. The name and address of the General Partner of this Partnership are: NAME MOREAU MANAGEMENT, LLC ADDRESS 1834 HARRIS COLLEGE STATION, TX 77845 There are no other General Partners of this Partnership and no other person or entity has any right to take part in the active management of the business affairs of the Partnership as of this date. b. The names and addresses or places of residence of the Limited Partner of this Partnership is set forth on "Exhibit A" attached hereto and by this reference made a part hereof. There are no other Limited Partner to the Partnership other than those listed in the attached "Exhibit A" as of this date. ARTICLE III TERM OF PARTNERSECIP 3.1 The Partnership shall begin as of the date of filing the certificate of limited partnership and the Partnership shall continue in existence until it is terminated, liquidated or dissolved in accordance with this Agreement or by operation of law. ARTICLE IV CAPITAL CONTRIBUTIONS AND PARTNERSBTP INTERESTS Definite Contributions 4.1 At the time of execution of this Agreement, each Partner shall make the contributions to capital and receive a partnership interest, as follows: Pago 2 c\rro\c0aDCLLc\L41)\N0FXAo nrvasraar:urs\LPA a Each partner shall make an "initial contribution" to the Partnership as described in "Exhibit B", attached to this Agreement and incorporated by reference. The capital to be contributed initially to the Partnership by the Partners shall be in the form of each Partners' beneficial interest in the Property. Upon making the initial contribution, each Partner shall own the percentage interest in the partnership as listed on "Exhibit B", attached to this Agreement and incorporated by reference. Future Contributions 42 If all Partners agree, additional capital contributions may be made by the Partners. Each Partner shall be required to contribute the amount of the aggregate assessment multiplied by his or her then current percentage of interest in the Partnership. Partners shall not be permitted to make contributions to the Partnership other than those indicated in "Exhibit B" or as provided in this Paragraph., Thus, Partners may not alter their percentage interests in the Partnership by making additional voluntary contributions. Classcs of Limited Partner 4.3 There shall initially be only one class of Limited Partner. ARTICLE V PROMS AND LOSSES Interest of Each Partner 5.1 The net profits and net losses of the Partnership shall be allocated as follows: a. The amount of net profits and net losses of the Partnership to be allocated to and charged against each Partner shall be determined by multiplying the amount of net profits or net losses by the Partner's then current percentage of interest in the Partnership. The General Partner shall allocate net profits and losses at least once each fiscal year. Interest shall not be paid to Partners on contributions of capital to the Partnership, b. Notwithstanding the foregoing, tosses (other than non -recourse deductions) may not be allocated to a Limited Partner in the event such loss allocation will create a negative capital account for such Limited Partner in excess of such Limited Partner's obligation to contribute to the Partnership. In the event such losses occur, they shall be allocated to the General Partner, and the General Partner shall be allocated profits equal to such excess loss allocation before any other profits are allocated under this Agreement. C. The minimum gain provisions and the "qualified income offset" provisions under Section 704 of the Internal Revenue Code and the regulations thereunder shall apply in computing income and loss hereunder. Special Allocation Pursuant to IRC Section 704(c)(2) 5.2 The pasties hereto understand and agree that for income tax purposes the adjusted basis of any properties contributed to the capital of the Partnership by any ofthe parties hereto and any subsequent partners of the Partnership shall be the adjusted basis of these properties in the hands of the contributing Partner immediately before the properties were contributed to Partnership. I Depreciation recapture under SS1245 and 1250 of the Internal Revenue Code of 1986, and as c\1m\co"&1Lc\LTD\M0REAu nwE6TNENTE\LEA Page 3 hereafter amended, and gain or loss on sale, computed with respect to the properties contributed, shall be allocated for income tax purposes as follows: o. To the non-contributing Partners, the amount of depreciation or gain or loss on sale computed by using the values at which the properties were contributed by the contributing Partner, with such allocation to the non-contributing Partners based upon the ratios of their respective profit and loss percentage in the Partnership set forth in Paragraph 5.1 hereof. To the contributing Partner, the balance of the depreciation or the balance of the gain or loss that is allowable or reportable for income tax purposes. Depreciation recapture under IRC SS 1245 and 1250 will be equitably apportioned among the Partners taking into account the amount of such depreciation giving rise to such recapture which was allocated to each Partner. The Partners are informed that the income tax regulations at S1.704(c)(2)(i) impose a "ceiling limitation" on the amount of depreciation or gain or loss on sale that may be allocated to the non- contributing Partners and under this Paragraph 5.2. If the ceiling limitation applies, it is agreed that there is compliance with Paragraph 5.2 hereof. Definition of Profits and Losses 5.3 The term "profits" is hereby defined to be income or gain of whatsoever kind actually .. . incurred by the Partnership or which, because of generally accepted accounting procedures, must he deemed to have been incurred by the Partnership, The term "losses" is hereby defined to be any deduction, expenditure or charge actually incurred by the Partnership or which, because of generally C! accepted accounting procedures, must be deemed to have been incurred by the Partnership. Capital Accounts 5.4 The General Partner shall maintain a separate capital account for each Partner. An individual Partner's capital account shall consist of the Partner's contributions to the Partnership capital under Paragraphs 4.1 and 4.2 of this Agreement, plus any amounts transferred from the income account of that Partner, less any authorized distributions paid from the Partners capital account. The capital accounts shall he maintained in accordance with Section 704 of the Internal Revenue Code. Income Accounts 5.5 The General Partner shall maintain a separate income account for each Partner. At the end of each fiscal year, each Partner's share of the net profits or net losses of the Partnership shall be credited or debited to each Partner's income account. After any authorized withdrawals have been deducted from a Partner's income account, any balance or deficit remaining in the account shall he transferred to or charged against that Partners capital account. Cash Distributions 5.6 The General Partner does not guarantee the return of the Limited Partner's contributions or the making of any profit from the operations of the Partnership. Cash, when available, may be distributed by the General Partner to all Partners in the same ratio as profits and losses are shared. Cash distributions from the Partnership may be made by the General Partner to all Partners without regard to the profits or losses of the Partnership from operations; provided, that no cash distributions shall be made Page 4 e\DID\CORPGLLC\LTD\t4OMAn XIMISTUMTOWPA l which will impair the ability of the Partnership to pay its just debts as they mature. The General Partner y shall determine when, if ever, cash distributions shall be made to the Partners, pursuant to the provisions and the tenor of this Agreement, There shall be no obligation to return to the General Partner or the Limited Partner, or to any one of them, any part of their capital contributed to the Partnership, for so long as the Partnership continues in existence. No General or Limited Partner shall be entitled to any priority or preference over any other partner as to cash distributions. Distribution Return Provisions 5.7 in accordance with Texas law, a Limited Partner may, under certain circumstances, be required to return to the Partnership, for the benefit of Partnership credits (i) amounts previously returned or distributed to the Limited Partner as a return of capital and (ii) distributions wrongfully made to the Limited Partner. The payment of money or distribution of property to a Limited Partner, whether or not " deemed to be a return of capital, shall be deemed to be a compromise within the meaning of Section 5.02(b) of TRLPA, and the Limited Partner receiving the money or property is not required to return any money or property to the Partnership or any creditor of the Partnership. However, if a court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, a Limited Partner is obligated to make any such payment, then the obligation shall be the obligation of that Limited Partner and not of the General Partner. ARTICLE VI OWNERSHIP OF PARTNERSHIP PROPERTY 6.1 All real or personal property, including all improvements placed or located thereon, acquired by the Partnership shall be owned by the Partnership, such ownership being subject to tiie other terms and provisions of this Agreement. A Partner shall have no interest in specific property of the 1 Partnership. Each Partner hereby expressly waives the right to require partition of any Partnership's property or any pan thereof. ARTICLE VH FISCAL MATITERS Partnership Fiscal Year and Accounting Method n 7.1 The Partners intend that the Partnership shall be treated as a partnership for tax purposes. The Partnership's books and records and all required income tax returns shall be kept or made on the calendar year basis. The Partnership shall use the accrual method of accounting. Partnership Accounts 7.2 The General Partner shall receive all money of the Partnership and shall deposit them in one or more Partnership accounts at a bank or other financial institution. No other funds shall be deposited in time accounts, Funds deposited in the Partnerships' bank accounts may be withdrawn only to pay Partnership debts and obligations or to be distributed to Partners as provided in this Agreement. Books and Records 7.3 The General Partner shall keep at the principal place of business and make available to all Partners at any time during normal business hours, just and true books of account and all other Partnership records. The copying by a Partner, or his designated agent, of any part or all of such records, l at the personal expense of that Partner is specifically authorized. Within not more than 90 days after the Page 5 C\bar\CORP&LLC\LTD\MCREAU INVESTMENTS\LPA 4� close of each calendar year of the Partnership, the General Partner shall furnish to all Partners a year ending balance sheet for the Partnership and a full and detailed financial report on the business operations A' ` of the Partnership for and during the entire preceding year. The General Partner shall furnish to all Partners any additional information needed or necessary to complete their Federal and State income tax forms, including statements of the net distributable income or loss to each Partner from the operation of the Partnership. All of the above duties and services to be performed by the General Partner shall be deemed an expense of the Partnership. The books and records shall be preserved for six years after the end of the Partnership term. Tax Matters 7.4 All items of Partnership income, expense, gain, loss, deduction and credit for tax purposes shall be allocated as provided in this Agreement relating to allocations of profits and losses. The tax matters partner shall be the General Partner. The tax matters partner shall furnish in a timely manner all information Partners need to complete their Federal and State income tax forms, including statements of the net distributable income or loss to each Partner form the operation of the Partnership. Audits 7.5 Any Partner shall have the right to have an audit conducted of the Partnership's books. The Partner requesting the audit shall bear the expense of the audit, ARTICLE VIH n MANAGEMENT OF PARTNERSHIP AFFAIRS / Control and Management / 8.1 The General Partner shall have sole and exclusive control of the Limited Partnership. Subject to any limitations expressly set forth in this Agreement, the General Partner shall have the power and authority to take such action from time to time as it may deem to be necessary, appropriate or convenient in connection with the management and conduct of the business and affairs of the Partnership, including without limitation the power to: a. Acquire or dispose of real or personal property (including any interest therein) for cash, securities, other property or any combination thereof upon such terms and conditions as the General'Partner may, from time to time, determine (including, in instances where the property is encumbered, on either an assumption or a "subject to" basis); b. Acquire, own, hold, improve, manage and lease such property; c. Finance the Partnership's activities either with the seller of such property or by borrowing money from third parties, all on such terms and conditions as the General Partner deem appropriate. In instances where money is borrowed for Partnership n, purposes, the General Partner shall be, and hereby are, authorized to pledge, mortgage, .. . encumber and grant a security interest in Partnership properties for the repayment of such loans; d. Employ, retain or otherwise secure or enter into other contracts with personnel or firms to assist in the acquisition, developing, improving, managing and general operation of the Partnership properties, including, but not limited to real estate brokers or agents, Page 6 c\nv\coarcrrc\=\MoaExu TWESMAVs\LVA All . supervisory, development and/or building management agents, attorneys, accountants and engineers, all on such terms and for such consideration as the General Partner deems advisable; and C. Take any and all other action which is permitted under TRLPA and which is customary or reasonably related to the acquisition, ownership, development, improvement, management, leasing and disposition of real, personal or mixed property. Responsibility or General Partner 8.2 The General Partner shall exercise ordinary business judgement in managing the affairs of the Partnership, Always, unless fraud, deceit or a wrongful taking shall be involved, the General Partner shall not be liable or obligated to the Limited Partner for any mistake of fact or judgement made by the General Partner in operating the business of the Partnership, which results in any loss to the " Partnership or its Partners, The General Partner does not, in any way, guarantee the return of the Limited Partner's capital or a profit from the operations of the Partnership. Neither shall the General Partner be responsible to any Limited Partner because of a loss of his investment or a loss in operations, unless it shall have been occasioned by fraud, deceit or a wrongful taking by the General Partner. The General Partner shall devote such attention and business capacity to the affairs of the Partnership as may be reasonably necessary. In this connection, the parties hereby acknowledge that the General Partners may be the manager or general partner of other partnerships and may continue to manage other partnerships, and may continue to engage in other distinct or related business. Compensation of General Partner 8.3 The General Partner will receive no compensation for acting as General Partner, but shall / be entitled to reimbursement for any expenses paid by it arising out of the business of the Partnership. i Meeting of Partners 8.4 The General Partner shall be entitled to hold regular annual meetings at times and places to be selected by the General Partner. The record date for participation in any meeting of Partners shall be 20 days prior to the date of the meeting. Any Partner may waive notice of or attendance at any meeting, or may attend by telephone or any other electronic communication device, or may execute a signed written consent. The quorum required to transact business at Partnership meetings is 50% in interest of the s * Limited Partner. The Partners may transact all business properly brought before them at meetings. A Partner may vote by proxy. The Partners shall keep regular minutes of all their meetings. The minutes shall be placed in the Partnership minute book and kept with the Partnership records. It is the intention of the Partners that the Limited Partner have only the minimum voting rights required by law and no more in connection with this Partnership. Action Without Meeting 8.5 Any action required or permitted to be taken at a meeting of the Partners or a class of Partners may be taken without a meeting if written consent setting forth the action to be taken is signed by all Partners entitled to vote. This consent shall have the same force as a unanimous vote of the Partners or class of Partners. The original signed consents shall be placed in the Partnership minute book and kept with the Partnership records. Notice of Certain Actions C i 8.6 In the event that the Partners agree to modify or amend this Agreement pursuant to Page 7 C\MD\C0RP61LC\LTD\b$OREAD 11WES'lb="\LPA Paragraph 15.1. The General Partner shall deliver written notice of such action to the Limited Partner not more than ten days after such action. a� Restrictions on Limited Partner n 1. 8.7 The Limited Partner shall not have either the obligation or the right to take part, directly or indirectly, in the active management of the business and no Limited Partner is authorized to do or perform any act, thing or deed in the name of or for or on behalf of either the General Partner or the Partnership. No Limited Partner is authorized to and shall not, directly or indirectly, have a voice in or take part in the business affairs or business operations of the Partnership. No Limited Partner is authorized to and shall not be permitted to do any act, deed or thing which will cause such Limited Partner to be classified as a General Partner of the Partnership. ARTICLL IX LIABILITIES Liability of Partners 9.1 The liability of the General Partner arising from carrying on the business affairs or operations of the Partnership or for the debts of the Partnership is unrestricted. The liability of the Limited Partner with regard to the Partnership in all respects is restricted and limited to the amount of the actual capital contributions that each Limited Partner makes or agrees to make to the Partnership. ARTICLE X PROMBITED TRANSACTIONS i 10.1 During the time of the organization or continuance of this Limited Partnership, neither the General or Limited Partner hereof shall do any one of the following: a. Use the name of the Partnership (or any substantially similar name) or any trademark or trade name adopted by the Partnership, except in the ordinary course of the Partnership's business; b. Disclose to any non -partner any of the Partnership business practices, trade secrets or any other information not generally known to the business community. c. Do any other act or deed with the intention of harming the business operations of the Partnership. d. Do any act contrary to this Agreement; e. Do any act which would make it impossible to carry on the intended or ordinary business of the Partnership; f. Confess a judgement against the Partnership; and A� g. Abandon or wrongfullytransfer or dispose of Partnership property, real or personal, Further, the General Partners shall not use, directly or indirectly, the assets of this Partnership for C J any purpose other than carrying on the business of this Partnership, for the full and exclusive benefit of all Page 8 C\MD\CORP&LLC\LTD\WORRAU 1NnSM aNTa\LPA its partners. ARTICLE 3a RESTRICTIONS ON TRANSFERS Prohibition Against Transfer 11.1 No Limited Partner shall sell, assign, transfer, encumber or otherwise dispose of any interest in the Partnership without the consent of the General Partner, which may be granted or withheld in the sole and absolute discretion of the General Partner. In the event a court determines that the restrictions contained in this Paragraph 12.1 are unenforceable, then the Partnership and the General Partner shall have a right of first refusal to acquire the interest of any Limited Partner attempting to sell such interest on the terns and conditions of the offer of sale prior to any sale to any non -family member. 11.2 In the event a Limited Partner desires to withdraw from the Partnership, such Limited Partner shall notify the General Partner. Within 30 days of the receipt of the notice of withdrawal, the General Partner and such Limited Partner shall attempt to agree upon the fair market value of the limited partnership interest, taking into account its lack of marketability, minority status, limited rights and any other discounts normally used by appraisers in valuing such type of interest. If the withdrawing Limited Partner and the General Partner cannot agree on said fair market value within said 30 day period, then such Partners shall within five days agree upon an appraiser to value such interest which appraiser shall be experienced in valuing the types of properties which are owned by the Partnership. If the General Partner and Limited Partner cannot agree upon an appraiser, then the General Partner shall apply to the prosidingjudge of the court for the county in which the majority of the Partnership's properties are held, to appoint such an appraiser. Upon the appointment of the appraiser, the appraiser shall then have 60 days to appraise the value of the partnership interest of the withdrawing Limited Partner, taking into account 1 all appropriate discounts. Upon the determination of the fair market value of the interest of the withdrawing Limited Partner, whether by agreement or by appraisal, the Limited Partner shall have the right to sell and the Partnership and the General Partner shall have the obligation to purchase the interest of the withdrawing Limited Partner by payment of an amount equal to such fair market value. Payment shall be made in five equal annual installments of principal commencing 30 days after the determination of the value of such partnership interest, with interest at the applicable federal rate for such an obligation at the time of the determination of the price. Interest shall be payable annually with each installment of principal. F' ARTICLE X1I TERMINATION OF M, PARTNERSHIP Termination Upon Withdrawal, Bankruptcy, Death or Incapacity or the General Partner 12.1 The General Partner, effective as of the last day of any calendar year of the Partnership, may voluntarily withdraw from the Partnership as General Partner and such withdrawal shall have the effect of terminating the Partnership as of the close or business on such last day. The bankruptcy, death, incapacity or resignation of the General Partner shall result in the Partnership terminating as of the close of business on the last day of the calendar year in which such event occurs. If there is more than one general partner, the limited partnership agreement should provide that the partnership shall continue (and not dissolve) for so long as another solvent general partner exists. Effect of a Termination of the Partnership C\MD\COaBbLLC\LTD\MOPMAU INVESTMENTS\LPA Page 9 U t. 12.2 Upon the termination of the Partnership, regardless of how it is terminated, the affairs of (� the Partnership shall be wound up by the General Partner. If for any reason there is no General Partner, or if they refuse to serve, or are incapable of serving, over 50% in interest, not in number, of the Limited n� *. Partner may appoint or designate a Trustee -in -Liquidation who shall serve to windup the affairs of the Partnership, The Trustee -in -Liquidation need not he a commercial corporate trustee, does not have to be bonded and may be a Limited Partner. Whoever serves to wind up the affairs of the Partnership, the following procedure shall be followed: Upon such termination, the assets of the Partnership shall be applicd as follows: to payment of the outstanding Partnership liabilities, although an appropriate reserve may be maintained and the amount determined by the General Partner or Trustee -in -Liquidation for any contingent liability until said contingent liability is satisfied, and the balance of such reserve, if any, shall be distributed together with any other sum remaining after payment of the outstanding Partnership liabilities to the Partners in their capital accounts after profits and losses have been allocated. Provided, that nothing contained in this Agreement shall defeat the right of either a Limited or a General Partner to require and to have a court -supervised winding up, liquidation and dissolution of the Partnership. No Partner shall be entitled to demand a distribution be made to him in Partnership property, but the General Partner may make or direct property distributions to be made, using the property's fair market value as of the time of distribution, as the basis for making the distribution. ARTICLE XIH LIABILITIES AND MEMNOICATION d Liability of Partners to Third Parties C, 1 13.1 General Partner and Limited Partner shall be liable for the debts and obligations of the Partnership as set forth in Paragraph 10.1 hereof. When Indemnification is Required, Permitted and Prohibited 13.2 a. The Partnership shall indemnify a Partner, employee or agent of the Partnership who was, is or is threatened to be made a named defendant or respondent in a proceeding because the person is or was acting within the scope of his or her official capacity to the Partnership. However, the Partnership shall indemnify the person only if he or she acted in good faith and reasonably believed that his or her conduct was in the Partnership's best interests. In a case of a criminal proceeding, the person may be indemnified only if he or she had no reasonable cause to believe that his or her conduct was unlawful. The Partnership shall not indemnify a person who is found liable to the Partnership or Partners or if the person is found liable on the basis that he or she improperly received personal benefit or that he or she committed other willM or intentional misconduct, b. The termination of a proceeding by judgement, order, settlement, conviction or on a plea of nolo contendere or its equivalent does not alone determine that the person did not meet the requirements of subparagraph (a) above. A person is conclusively considered to have been found liable in relation to any claim, issue or matter if the person has been adjudged liable by a court of competent jurisdiction and all appeals have been exhausted.' C. The Partnership shall pay or reimburse expenses incurred by a Partner, employee or agent of the Partnersbip in connection with the person's appearance as a witness or Page 10 C\MO\COKV&LLe\LTD\MOPEAV n;VESTMEMTS\LPA other participation in a proceeding involving or affecting the Partnership when the person is not a named defendant or respondent in the proceeding. d. In addition to the situations otherwise described in this Paragraph, the Partnership may indemnify a Partner, employee, agent or person serving at the request of the Partnership as a representative of another enterprise to the extent permitted by law. However, the Partnership shall not indemnify any person in a situation prohibited under subparagraph (a) above. e. Before the final disposition of a proceeding, the Partnership may pay indemnification expenses permitted under this Agreement and authorized by the Partnership. However, the Partnership shall not pay indemnification expenses to a person before the final disposition of a proceeding if the person is named defendant or respondent in a proceeding brought by the Partnership or one or more Partners, or the n• +. person is alleged to have improperly received personal benefit, or committed other willful or intentional misconduct. f If the Partnership may indemnify a person under this Agreement, the person may be indemnified against judgements, penalties, including excise and similar taxes, fines, settlements and reasonable expenses (including attorney's fees) actually incurred in connection with the proceeding. Procedures Relating to Indemnification Payments 13.3 a. Before the Partnership may pay any indemnification expenses (including reasonable attorney's fees), the Partnership must specifically determine that C1 indemnification is permissible, authorize indemnification and determine that expenses to be reimbursed are reasonable, except as provided in Paragraph 14.3(c), The Partnership may make these determinations and decisions by determination by special legal counsel selected by the General Partner. b. The Partnership must authorize indemnification and determine that expenses to be reimbursed are reasonable in the same manner that it determines that indemnification is permissible. If, however, the determination that indemnification is permissible is made by special legal counsel, authorization or indemnification and determination of a reasonableness of expenses must be made by the General Partners who, at the time of the, vote are not named defendants or respondents in the proceedings, or if such a quorum cannot be obtained, by a majority vote of all General Partners. A provision contained in this Agreement, a resolution of a majority in interest of the Limited Partner, or an agreement that authorizes indemnification permitted under Paragraph 14.2 of this Agreement constitutes sufficient authorization of indemnification even though the provision may not have been adopted or authorized in the same manner as the determination that indemnification is permissible. C. The Partnership shall pay indemnification expenses before final disposition of a proceeding only after the Partnership determines that the facts then known would not preclude indemnification and receives a written affirmation and undertaking from the person to be indemnified. The determination that the facts then known to those making the determination would not preclude indemnification and authorization of payment must be made in the same manner as a determination that indemnification is permissible under Paragraph 14.3(a). The person's written affirmation must state that he or she has met the Page 11' C\rm\CORPZLLC\LTD\nOREAV INVESEMNTS\LPA standard of conduct necessary for indemnification under this Agreement, The written undertaking must provide for repayment of the amount paid or reimbursed by the Partnership if it is ultimately determined that the person has not met the requirements for indemnification. The undertaking must be an unlimited general obligation of the person, but it need not be secured and it may be accepted without reference to financial ability to' make repayment. d. The General Partner shall promptly deliver or mail a written report of any indemnification or advance of expenses to the Limited Partner. The report shall contain a description of the proceeding, the dates and procedures used to make the determinations and decisions required under this Paragraph, the amounts paid to each person indemnified and all other material facts related to the indemnification. The report shall be made not later than six months after the date that the indemnification occurs. ARTICLE MV MISCELLANEOUS PROVISIONS Amendment 14.1 Except as otherwise stated herein, this Agreement may be amended or modified by the Partners from time to time but only by a written instrument executed by Partners owning collectively at least 95% in interest, not in number, in the Partnership. ' Notices 14.2 Except as maybe otherwise specifically provided in this Agreement, all notices required, or permitted hereunder shall be in writing and shall be deemed to be delivered when deposited in the United States mail, postage prepaid, registered or certified mail, return receipt requested, addressed to the parties at the respective addresses set forth herein or at such other addresses as may have been theretofore specified by written notice delivered in accordance herewith. Texas Law to Apply 14.3 This Agreement shall be construed under and in accordance with the laws of the State or Texas, and all obligations or the parties created hereunder are performable in Brazos County, Texas. Other Instruments 14.4 The parties hereto covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out the Partnership created by this Agreement. .Headings 14.5 The headings used in this Agreement are used for administrative purposes only and do not constitute substantive matter to be considered in construing the terms of this Agreement. ` Parties Bound 14.6 This Agrecment shall be binding upon and inure to the benefit of the parties hereto and 1• their respective heirs, executors, administrators, legal representatives, successors and assigns where Page 12 C\MD\C0R1?6LLC\LTD\M0REAU INVESTMENTS\IRA -permitted by this Agreement. Prior Agreements Superseded 14.7 This Agreement supersedes any prior understandings or oral agreements between the parties respecting the within subject matter. Local Construction 14.$ if any one or more of the provisions contained in this Agreement for any reason are held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision thereof and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. Counterparts 14.9 This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original. Gender 14.10 Wherever the context shall so require, all words herein in the male gender shall be deemed to include the female or neuter general, all singular words shall include the plural and all the plural words shall include the singular. CDated this,[Sday of November, 2002. 1 GENERAL PARTNER: I • u�1�!1i�411D • u rf • Fill cilk le"ZIMPki I. RS. C ES S. MOREAU a7ti, UZ MOREAU Page 13 C\MD\CCPPLLLC\LTD\MCPEAV XMSTMENTS\LPA EXHIBIT "A" Limited Partners Limited Partners CHARLES S. MOREAU SUZANNE MOREAU Page 14 CNMD\C0R3?6LLC\LT0%MRMAU INVPS7MNT9\LPA Address 1834 HARRIS COLLEOE STATION, TEXAS 77845 1834 HARRIS COLLEGE STATION, TEXAS 77845 I l GENERAL PARTNER MOREAU MANAGEMENT, LLC LIMITED PARTNERS CHARLES S. MOREAU SUZANNE MOREAU W k. Page 15 C\MD\CUAP&LLC3\LTD\M0RVAU INVESTMENTS\LAP PERCENTAGE 1.0 % 49.5 % 49,5%