Looking for an agreement? Search from over 1 million agreements now.

Partnership Agreement

This is an actual contract by DRS Technologies.
Browse the agreement preview below and buy the entire agreement for $35
Search This Document
PARTNERSHIP AGREEMENT


OF


DRS MEDICAL SYSTEMS


THIS AGREEMENT, dated as of the 6th day of February, 1996, is by and between DRS/MS, Inc., a Delaware corporation ("DRS/MS"), and UNIVERSAL SONICS CORPORATION, a New Jersey corporation ("USC").


RECITALS


A. USC and DRS/MS desire to form a general partnership (the "Partnership") for the purpose of developing, manufacturing and marketing low cost, high performance ultrasound medical imaging equipment and products that perform three-dimensional ultrasound medical imaging (the "Business") and engaging in other such related activities necessary or appropriate to effect the Business.


B. In connection with the formation of the Partnership, USC and DRS/MS wish to set forth their respective rights and obligations as partners thereof.


NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, USC and DRS/MS agree as follows:


ARTICLE 1.


DEFINITIONS


1.1 Terms. When used in this Agreement, the following terms will have the meaning set forth below:


(a) "Act" shall mean the New Jersey Uniform Partnership Law, N.J.S.A. 42: 1-1 et seq., as amended from time to time.


(b) "Affiliate" shall mean, when used with reference to a specified Person, (i) any Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the specified Person or (ii) any Person that is an executive officer or director of, partner in, or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the specified Person is an officer, partner or trustee, or with respect to which the specified Person serves in a similar capacity; and, (iii) when used with reference to a natural Person, any Person that is related to the specified Person by blood or marriage in the first degree of consanguinity; provided, however, that no natural Person shall be deemed to be controlled by any other Person.


(c) "Agreement" shall mean this Partnership Agreement entered into between USC and DRS/MS, as amended from time to time.


(d) "Bank" shall have the meaning specified in Section 6.2 to this Agreement.


(e) "Business" shall have the meaning specified in the recitals to this Agreement.


(f) "Capital Account" shall have the meaning specified in Section 4.3 to this Agreement.


(g) "Capital Contributions" shall have the meaning specified in Sections 4.1 and 4.2 of this Agreement.


(h) "Code" shall mean the Internal Revenue Code of 1986, as amended.


(i) "Documents" shall have the meaning specified in Section 6.1 to this Agreement.


(j) "Document Holding Period" shall have the meaning specified in Section 8.6 to this Agreement.


(k) "Executive Committee" shall have the meaning specified in Section 3.1 of this Agreement.


(l) "Fiscal Year" shall mean the twelve-month period ending March 31 of each year.


(m) "Joint Venture Agreement" shall mean that certain Joint Venture Agreement dated as of February 6, 1996 by and among USC, Ron Hadani, Howard Fidel, and Thomas Soulos on the one hand and DRS/MS on the other, as the same may be amended from time to time in accordance with the terms thereof.


(n) "Partner" shall mean USC or DRS/MS.


(o) "Partnership" shall have the meaning specified in the recitals to this Agreement.


(p) "Partnership Account" shall mean a detailed statement of receipts, disbursements, costs, assets, liabilities and all other relevant financial matters of the Partnership prepared in accordance with generally accepted accounting principles.


(q) "Person" shall mean any individual, firm, partnership, corporation, trustee or other entity.


(r) "Partnership Percentage Interest" shall have the meaning specified in Section 2.2 of this Agreement.


(s) "United States Partnership Tax Returns" shall have the meaning specified in Section 6.3 to this Agreement.


ARTICLE 2.


FORMATION OF THE PARTNERSHIP


2.1 Formation. USC and DRS/MS hereby enter into and form a general partnership pursuant to the Act for the specific purposes and scope set forth herein. Except as set forth herein, the rights and obligations of the parties hereto and the Partnership shall be governed by the Act. To the maximum extent permitted by law, if there is a conflict between the Act and the provisions hereof, this Agreement shall control.


2.2 Partners. Each Partner shall contribute cash or assets to the capital of the Partnership in accordance with Article 4 hereof. Each of the Partner's interest in the Partnership (the "Partnership Percentage Interest") shall be:


DRS/MS 90%


USC 10%


2.3 Name. The name of the business and the affairs of the Partnership shall be conducted under the name DRS Medical Systems or under such other name or names as the Executive Committee may from time to time determine.


2.4 Principal Place of Business. The principal place of business of the Partnership shall be located at 31 Industrial Avenue, Mahwah, New Jersey 07962, or such particular place or places as the Executive Committee may from time to time designate or establish.


2.5 Purposes and Scope. Subject to the provisions of this Agreement, the purpose of the Partnership is to form a general partnership between USC and DRS/MS for the purposes of conducting the Business of the Partnership and engaging in such other related activities necessary or appropriate to effect the Business.


2.6 Formation Documents. The Partnership shall execute and file any assumed or fictitious name certificate or certificates and any other documents required by law, including without limitation an application for a federal employer identification number, to be filed in connection with the formation and operation of the Partnership.


2.7 No Individual Authority. No Partner, acting alone, shall have any authority to act for, or to undertake or assume any obligation, debt, duty or responsibility on behalf of, any other Partner except as expressly otherwise provided in this Agreement, nor shall any Partner, acting alone, have the power to bind the Partnership except as expressly provided in this Agreement.


2.8 Property Interests. A Partner's interest in the Partnership shall be personal property for all purposes. All real and other tangible and intangible property owned by the Partnership shall be deemed to be owned by the Partnership as an entity and no Partner individually shall have any ownership interest in or possessory right to any of such property.


2.9 Limits of the Partnership. The relationship between and among the parties to this Agreement shall be limited to the specific purposes of the Partnership described herein. Except as otherwise contemplated by the Joint Venture Agreement, this Agreement has no relation to any operations conducted by either of the parties as separate corporate entities or to the joint operations of either with other parties or to any other joint operations, if any, between the parties.


ARTICLE 3.


MANAGEMENT OF THE PARTNERSHIP


3.1 Executive Committee. (a) In order to facilitate the disposition of all matters and questions in connection with the administration and performance of the Business on behalf of the Partnership, an Executive Committee shall be created. Except as otherwise expressly provided herein, the management of the Partnership shall be the obligation of and rest exclusively with the Executive Committee, which shall have all the rights and powers as are necessary, advisable, or convenient to the management of the business and affairs of the Partnership. DRS/MS shall appoint two representatives to serve on the Executive Committee to act in its interests with full and complete authority and to act on its behalf in all matters connected with, arising out of or related to the Partnership, and to act for and bind DRS/MS in any and all matters involving the Business of the Partnership. USC shall appoint one representative (the "USC Representative") to serve on the Executive Committee to act in its interests with full and complete authority and to act on its behalf in all matters connected with, arising out of or related to the Partnership, and to act for and bind USC in any and all matters involving the Business of the Partnership. USC shall also appoint one ex officio representative to serve on the Executive Committee. Such ex officio representative shall have no authority to act on behalf of USC in any matters connected with, arising out of or related to the Partnership, and shall have no authority to act for and bind USC in any matters involving the Business of the Partnership, provided, however, that such ex officio representative will act in place and in stead of the USC Representative with all the authority of the USC Representative, including without limitation the authority to bind USC, when the USC Representative is absent from, or otherwise not represented at, any meeting of the Executive Committee. The appointed representatives for each Partner shall be as follows:


DRS/MS


John Giordano


Paul Casner


USC


Ron Hadani, the USC Representative


Howard Fidel, ex officio representative


Either party may at any time and from time to time change its representative(s) by notifying the other party, in writing, of the appointment of a new representative or representatives, but until such appointment and notice, the actions of the respective representatives shall be conclusively binding on that party to the Partnership.


(b) The representatives on the Executive Committee shall meet from time to time as may be necessary or desirable to act on matters pertaining to the Business and the management of the Partnership. The representatives of either party shall have the power to call such meetings (which may be by telephone) when necessary in their opinion to conduct the affairs of the Partnership, or when requested by the other party. The representative who calls the meeting shall give the other representatives three (3) days written notice of said meeting unless the other representatives waive such notice requirement. The presence of at least a majority of the members of the Executive Committee shall constitute a quorum of the Executive Committee authorized to transact the business thereof. Whenever the USC Representative is present at any meeting, whether in person, by telephone or by proxy, the ex officio representative shall not be counted in determining the presence of a quorum, shall not have the power to vote and is not considered a member of the Executive Committee for any purpose. Each member of the Executive Committee shall have one vote. Action by the Executive Committee shall be taken upon the affirmative vote of not less than a majority of the members of the Executive Committee then in office, except as required under Section 4.2 of this Agreement. Any member of the Executive Committee may participate in and be present at a meeting either in person or by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear one another. Any action which is required or permitted hereunder to be taken at a meeting of the Executive Committee may be taken without a meeting, without prior written notice and without a vote, if a consent in writing, specifying the action so taken, shall be signed by not fewer than the minimum number of members of the Executive Committee necessary to authorize or take such action at a meeting at which all members of the Executive Committee were present and voted.


(c) The Executive Committee shall have the right to delegate all or any of its duties hereunder and, in furtherance of any such delegation, to appoint, employ, or contract with any Person it may in its sole discretion deem necessary or desirable for the transaction of the Business of the Partnership which Persons may, under the supervision of the Executive Committee, administer the day-to-day operations of the Partnership; may serve as the Partnership's advisors and consultants in connection with decisions made by the Executive Committee; may act as consultants, accountants, correspondents, attorneys, brokers, escrow agents, or in any other capacity deemed by the Executive Committee necessary or desirable; may investigate, select, and, on behalf of the Partnership, conduct relations with Persons acting in such capacities and may pay appropriate reasonable fees to, and enter into appropriate contracts with, or employ, or retain services performed or to be performed by, any of them in connection with the business of the Partnership; may perform or assist in the performance of such administrative or managerial functions necessary in the management of the Partnership as may be agreed upon by the Executive Committee; and may perform such other acts or services for the Partnership as the Executive Committee may approve.


3.2 Indemnification. The Partnership shall indemnify and hold harmless each member of the Executive Committee against all losses, costs and expenses (including court costs and reasonable attorneys' fees) arising out of or incurred as a result of any act or omission performed or omitted by any member of the Executive Committee in connection with the performance of its obligations under, or pursuant to the authority granted to it by, this Agreement and by the provisions of the Joint Venture Agreement, except for any such loss, cost or expense which arises out of or results from the Executive Committee's or such member's gross negligence, willfully fraudulent or dishonest conduct, bad faith or breach of an express provision of this Agreement (under circumstances in which such breach has not been consented to in writing by the Partners). Said indemnification shall extend only to the value of the Partnership's assets and neither Partner shall be jointly or severally liable for the indemnification of any loss, cost or expense that exceeds the value of the Partnership's assets at that time. Neither Partner shall be required to make Additional Capital Contributions pursuant to Section 4.4 for the purposes of indemnification.


3.3 Officers. The following persons shall serve as the initial senior management (the "Officers") of the Partnership:


John Giordano
Ron Hadani
Howard Fidel
Thomas Soulos
Gaetana Kopchinsky


The Officers shall be responsible for implementing the decisions of the Executive Committee and for conducting the ordinary and usual business and affairs of the Partnership. The Officers shall be subject to the direction of the Executive Committee.


ARTICLE 4.


CAPITAL CONTRIBUTIONS


4.1 Initial Capital Contribution of the Partners.


(a) Upon and subject to the terms and conditions hereof, the Partners shall contribute to the Partnership at formation the cash, assets and liabilities shown in respect of each on Schedule 4.1. Each shall have such amount credited to its Capital Account.


(b) As to the initial capital contribution of USC, in the event, in accordance with Section 5.05 of the Joint Venture Agreement, that the Final Pro Forma Net Worth Statement reflects that Assumed Liabilities are greater than Transferred Assets (a "deficit"), as all of such terms are defined under the Joint Venture Agreement, then for each dollar of such deficit, the Partnership shall have the option of either reducing on a dollar-for-dollar basis the Assumed Liabilities, or reducing any monetary payments, whether or not then due, to the Shareholders (as defined in the Joint Venture Agreement) and/or to USC on a present value basis, or may choose any combination of such two options so as to eliminate such deficit.


4.2 Additional Capital Contributions. The Executive Committee, after discussion of the advisability of so doing, may from time to time require additional capital contributions from the Partners in connection with the reasonable business needs of the Partnership, provided, however, that no such capital contributions shall be required or made by any Partner or its Affiliates during the first four years of this Agreement without the consent of all the parties hereto. In the event capital contributions are so required and appropriately consented to, the Executive Committee shall provide written notice (which notice shall set forth the aggregate additional capital contributions called for, the amount to be contributed by each Partner (which shall be proportional to each Partner's Partnership Percentage Interest), the bank account in which such contribution is to be deposited and the date on which the capital contribution is to be made) to each Partner no less than 30 days prior to the date on which such additional capital contribution is to be made. Thereupon, each Partner shall, on the date on which such additional capital contributions are to be made as set forth in such notice, make the additional capital contribution to the Partnership required to be made by such Partner. If either Partner shall fail to timely make such additional capital contribution, then the other Partner shall either make its capital contribution in the form of a loan or may seek additional capital from a third party or an Affiliate.


4.3 Capital Accounts. Except as provided in the Transaction Documents (as defined in the Joint Venture Agreement) to the contrary, the Partnership shall maintain a Capital Account (so defined) for each Partner pursuant to the provisions of Treasury regulations promulgated pursuant to Section 704(b) of the Code.


ARTICLE 5.


ALLOCATIONS, DISTRIBUTIONS AND INTERESTS


5.1 Allocation of Net Income or Net Loss. (a) For each Fiscal Year of the Partnership, except as provided in Section 5.1(c) below, any net income or any net loss of the Partnership shall be allocated among the Partners in accordance with the Partnership Percentage Interests then in effect.


(b) All determinations of "net income" and "net loss" shall be made on the basis described in the Treasury Regulations promulgated pursuant to Section 704(b) of the Code.


(c) Notwithstanding Section 5.1(a) above, any amortization or depreciation deduction attributable to the assets purchased from USC, pursuant to Section 2.02 of the Joint Venture Agreement, shall be allocated one hundred (100%) percent to DRS/MS.


5.2 Distributions. The Executive Committee may, in its sole discretion and from time to time, make distributions to the Partners in proportion to their Partnership Percentage Interests.


A Partner may request a distribution to satisfy federal and/or state tax liabilities by certifying to the Partnership the amount of such Partner's actual tax liability.


5.3 DRS/MS Management Services. DRS/MS shall provide certain management and administrative services to the Partnership pursuant to a Management Agreement. Subject to the determination of the Executive Committee, the Partnership will reimburse DRS/MS for these management and administrative services provided to the Partnership. The Partnership will compensate DRS/MS for such services in the manner set forth in such Management Agreement.


ARTICLE 6.


BOOKS AND RECORDS; BANK ACCOUNTS; TAX RETURNS; LOANS


6.1 Books and Records. The Executive Committee shall keep or cause to be kept at the office of the Partnership as separate Partnership Accounts the books and records of the Partnership, setting forth a true, accurate and complete account of all business transactions with respect to the Partnership's business, as are usually maintained by persons engaged in similar businesses, including a fair presentation of all income, expenditures, assets and liabilities thereof. Each Partner and its authorized representatives shall have the right at all reasonable times to have access to, inspect, audit and copy the Partnership's books and records including, but not limited to, original books, records, files, vouchers, cancelled checks, employment records, bank statements, bank deposit slips, bank reconciliations, cash receipts and disbursement records, and other documents (the "Documents").


6.2 Bank Accounts. All funds of the Partnership shall be deposited into such general account at a bank determined by the Executive Committee (the "Bank") in the name of the Partnership, to be maintained by the Executive Committee. The Bank shall be authorized to make payments against checks executed by persons authorized to make payments against checks drawn on said account. All income arising from operations of the Partnership shall be deposited in said general account, and all payments and disbursements shall be made from said general account; provided, that the Executive Committee may establish other bank accounts with such banks as it determines shall be necessary and proper for the efficient operation and management of the Partnership's activities. Idle funds in the various bank accounts of the Partnership shall be invested in interest bearing short term certificates of deposit, bank repurchase agreements (REPOs), government securities and similar instruments or such other instruments as may be approved from time to time by the Executive Committee; interest earned shall be for the benefit of the Partnership.


6.3 Tax Returns. At the end of each fiscal year, or as soon thereafter as practicable, the Executive Committee shall prepare or cause to be prepared on behalf of the Partnership a United States Partnership Information Tax Return and such other tax returns as are required of partnerships under the applicable federal, state and local laws, ordinances and/or regulations, and, upon the Executive Committee's review and approval, such tax returns shall be filed on a timely basis with the appropriate governmental authorities.


6.4 Loans. Subject to the provisions of Sections 4.2 and 7.7, any Partner may lend money to the Partnership or otherwise transact business with the Partnership under terms and conditions approved by the Executive Committee.


ARTICLE 7.


TRANSFERS OF INTERESTS IN PARTNERSHIP


7.1 Prohibited Transfers. Except (i) as agreed to by the parties hereto, (ii) as permitted by this Article 7 or the Transaction Documents, (iii) pursuant to the provisions of the Joint Venture Agreement, or (iv) when sold, transf
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |