AGREEMENT OF LIMITED PARTNERSHIP
This
Agreement of Limited Partnership is entered into and effective as of the __th
day of __________, 199_ by and between _________________ the "General
Partner" and __________the "Limited Partner".
ARTICLE I FORMATION OF LIMITED
PARTNERSHIP
1.01 PARTNERSHIP FORMATION AND PURPOSE
The
parties hereto hereby form a limited partnership (the "Partnership")
pursuant to the Uniform Limited Partnership Act (the "Act").
1.02 PURPOSE.
The
purpose of the Partnership is to enter into exclusive recording, publishing,
and songwriter agreements with musical talent, to record, publish, manufacture,
and distribute phonorecords to the public for profit . The Partnership
anticipates the recording, release, and promotion of at least 2 (two) long
playing albums per year. The Partnership anticipates the acquisition of the
copyrights for at least 50 (fifty) musical compositions per year. The
Partnership shall be the sole owner of the copyrights for all musical
compositions acquired by the Partnership. In addition, the exclusive services
of ___________(Artist)________ shall be rendered unto the Partnership for the
term of this Agreement. The Partnership shall hold sole possession of these
musical copyrights unless assigned or sold to another publishing concern. The
purpose of the Partnership is to acquire, produce, and market for profit,
master recordings of the artists and talent acquired by the Partnership.
1.03 NAME.
The
name of the Partnership shall be __________. The Partnership shall do business
under this and no other name.
1.04
ORGANIZATION CERTIFICATES
The
parties shall cause to be executed and filed:
(a)
Certificate of Limited Partnership in connection with Section 3(a)(1) of the
Act;
(b)
Certificates as required by the Assumed Name Act in each jurisdiction in which
the Partnership has a place of business; and
(c)
All such other certificates, notices, statements, or other instruments required
by law for the formation and operation of a limited partnership.
1.05 AFFILIATIONS.
The Partnership or its publishing arm
shall be an affiliate of both Broadcast Music Inc. (B.M.I.) and the American
Society of Composers, Authors, and Publishers (A.S.C.A.P.) for the purpose of collecting
royalty payments due it's artists and publishing concerns.
1.06
PRINCIPLE PLACE OF BUSINESS.
The
principle place of business of the Partnership shall be
_(street)_________________, __(city,state)_______________, or such other place
as the General Partner may, from time to time, designate by notice to the
Limited Partner. The Partnership may maintain such other offices at such other
places as the General Partner may determine to be in the best interest of the
Partnership.
ARTICLE II DEFINITIONS
The
following terms, when used herein, unless the context indicates otherwise, have
the meanings
assigned to them in this Article II:
(a)
"ADMINISTRATIVE AND OVERHEAD EXPENSES": Those customary, routine, and
necessary costs and expenses incurred or generated by the General Partner which
are associated with or attributable to administration of the business of the
Partnership.
(b) "AGREEMENT": Shall mean
this Agreement of Limited Partnership.
(c) "CERTIFICATE": Shall mean
the Certificate of Limited Partnership.
(d) "COMMENCEMENT DATE":
Shall mean the date of execution of this Agreement.
(e)
"CONTRIBUTION PERCENTAGE": Shall mean the percentage which each
Partner's respective Capital Contribution bears to the total of all Capital
Contributions.
(f) "GENERAL PARTNER": Shall
mean _______________________.
(g) "LIMITED PARTNER": Shall
mean _______________________.
(h)
"CAPITAL CONTRIBUTIONS": Shall mean the initial contributions of the
Limited Partner which shall aggregate not less than $____________(dollars).
(i)
"PARTNER": Shall mean both the General Partner and the Limited partner.
(j)
"PARTNERSHIP PROPERTY": Shall mean all property owned or acquired by
the Partnership.
(k)
"PAYOUT": Shall mean the date as of which the Limited Partner has
received cash distributions from the Partnership aggregating 100% (one hundred
percent) of his Capital Contributions.
(l)
"SHARING PERCENTAGES": Shall mean the percentage in which each
Partner shares in the costs, revenues, and items of income, gain, loss,
deduction, and credit arising therefrom and cash and/or property distributions
of the Partnership, as more particularly set out in Articles IV, VII, and VIII
of this Agreement.
ARTICLE III TERM OF THE PARTNERSHIP
3.01
The Partnership shall be effective as to the General Partner and the Limited
Partner from and after the date first above shown and shall continue in
existence until December 31, 1999, at which time it shall terminate unless
sooner terminated pursuant to any provisions of this Agreement.
ARTICLE IV SHARING PERCENTAGES OF
PARTNER
4.01 TAX LOSSES PER FORM 1065:
(a)
The Sharing Percentages of the Partners from commencement date until losses as
per Form 1065 equal the amount of their respective capital contributions shall
be:
GENERAL PARTNER 20%
LIMITED PARTNER 80%
(b)
The Sharing Percentages of the Partners from the date the losses as per Form
1065 equal the amount of their respective capital contributions until Payout
shall be:
GENERAL PARTNER 50%
LIMITED PARTNER 50%
(c) The Sharing Percentages of the
Partners after Payout shall be:
GENERAL PARTNER 50%
LIMITED PARTNER 50%
4.02 TAXABLE INCOME PER FORM 1065
(a) Prior to Payout:
GENERAL PARTNER 40%
LIMITED PARTNER 60%
(b) After Payout:
GENERAL PARTNER 60%
LIMITED PARTNER 40%
ARTICLE V CAPITAL CONTRIBUTIONS OF
PARTNERS
5.01
CAPITAL CONTRIBUTIONS. The Capital Contributions of the Partners shall
aggregate not less than $51,000 (fifty one thousand dollars) shall be made as
follows:
(a) GENERAL PARTNER $ __________
(b) LIMITED PARTNER $ _________ payable
upon execution of this Agreement.
5.03
ASSESSMENTS AND ADDITIONAL CONTRIBUTIONS. No assessments of
additional
contributions shall be required of the Partners.
ARTICLE VI CAPITAL ACCOUNTS
6.01
CAPITAL ACCOUNTS. Capital accounts shall be established and maintained for each
Partner and shall be adjusted as follows:
(a) The capital account of each Partner
shall be increased by:
(1) The amount of his capital
contribution to the Partnership;
(2) The amount of net income from
operations allocated to such Partner pursuant to Article VII.
(b) The capital account of each Partner
shall be decreased by:
(1)
The amount of losses from operations allocated to such Partner pursuant to
Article VII;
(2)
All amounts of money and the fair market value of property paid or distributed
to such Partner pursuant to the terms hereof (other than payments made with
respect to loans made by such Partner to Partnership.
6.02
CALCULATION OF CAPITAL ACCOUNT. Except as may otherwise be provided herein, whenever
it is necessary to determine the capital account of any partner, the capital
account of such Partner shall be determined after giving effect to the
allocation of the gains, income, loss, deductions, contributions and
distributions as of the last day of the preceding calendar quarter.
6.03
WITHDRAWAL OF CAPITAL. A Partner shall not be entitled to withdraw any part of
his capital account or to receive any distribution from the Partnership except
as herein.
6.04
INTEREST ON CAPITAL ACCOUNTS. No interest shall be paid on any Capital Contribution
to the Partnership.
ARTICLE VII INTEREST OF PARTNERS IN
INCOME AND LOSS
7.01
DETERMINATION OF INCOME AND LOSS. At the end of each Partnership fiscal year,
and at such other time as the General Partner shall deem necessary or
appropriate, each item of Partnership income, expense, gain, loss and deduction
shall be determined for the period then ending and shall be allocated among the
Partners in accordance with the applicable Sharing Percentages as set forth in
Article IV.
7.02
RECAPTURE. In the event that the Partnership recognizes income, gain or
additions to tax by virtue of the recapture of any previously deducted or
credited item, such recaptured income or gain or addition to tax shall be
allocated to such Partner as were allocated such item at the time of its
deduction.
ARTICLE VIII INTEREST OF PARTNERS IN
CASH CONTRIBUTIONS
8.01
GROSS INCOME AND NET INCOME. "Net Income" shall mean the total gross
income of the Partnership, less cash operating expenses, debt service,
interest, and principle on loans made to the Partnership and all other cash
expenditures of the Partnership. For purposes of determining
Net
Cash Flow, "Gross Income" shall mean proceeds from any source
whatsoever, but excluding any Capital Contributions of the Partners.
8.02
DISTRIBUTION OF CASH. Subject to the terms of this Agreement, the General
Partner shall make distributions of cash out of Partnership income, to the
extent deemed available, in the following manner:
(a) CASH FLOW FROM OPERATIONS. Except
as provided in Article 6a.
(b)
AS PER ARTICLE IV. Cash distributions shall be distributed in accordance with
the appropriate Sharing Percentages as set forth in Article IV hereof.
(c)
PROCEEDS AVAILABLE FROM DISSOLUTION. Upon dissolution and termination of the
Partnership, the proceed from the sale of all or substantially all of the
Partnership Property shall be distributed in the following order of priority:
(1)
There shall be distributed to the Partnership creditors (other than partners)
funds to the extent available, sufficient to extinguish current Partnership
liabilities and obligations, including costs and expenses of liquidation;
(2)
Any loans owed by the Partnership to the Partners shall be paid; and
(3)
The balance shall be distributed to the Partners in accordance with the proper
Sharing Percentage as set forth in Article 4.02.
ARTICLE IX OWNERSHIP OF PARTNERSHIP
PROPERTY
9.01
OWNERSHIP OF COPYRIGHTS. The Partnership shall own for a period of fifty (50)
years all musical compositions which were written by ________________________
or any other copyrights acquired by the Partnership under the term herein.
9.02
COPYRIGHT REVERSION. The ownership of copyrights exclusive of all musical compositions
written by _____________________, or other artist, and not commercially
released on a phonorecord during the term of such Agreement shall, in some
cases, automatically revert back to the Songwriter upon termination of the
Songwriter Agreement and any extensions or renewals thereof. Ownership in and
to any musical composition which is commercially released to the public by the
Partnership shall remain Partnership property subject to the terms contained in
this Agreement and the Songwriter Agreement.
9.03
The Partnership shall own all master tape recordings produced by the
Partnership for promotion or resale.
ARTICLE X OPERATION OF PARTNERSHIP
10.01
ADMINISTRATIVE AND OVERHEAD EXPENSES. The Partnership shall reimburse the
General Partner for Administrative and Overhead Expenses incurred by him on
behalf of the Partnership.
10.02
INDEPENDENT SERVICES. All costs and charges of outside professional services,
if any, which are related to the Partnership business, including legal fees and
any independent accounting and auditing fees and fees incurred in connection
with preparing Partnership federal income tax returns, shall be performed under
the direction of the General Partner and shall be charged to the Partnership in
accordance with generally accepted accounting procedures and practices.
ARTICLE XI ACCOUNTING
11.01
ELECTIONS. The Partnership shall elect as a fiscal year the calendar year and
shall elect to be taxed on such method of accounting as the General Partner
shall determine. The Partnership shall not elect to be taxed other than as a
Partnership.
11.02
BOOKS. The Partnership shall be kept at the General Partners office in __(CITY/STATE)__.
The Limited Partner shall, at all reasonable times during regular business hours,
have access to such books for the purpose of inspecting and copying them. The
accounts shall readily disclose all items which each Partner is required to
take into account separately for income
tax
purposes. As to the matter of accounting not provided for in this Agreement,
generally accepted accounting principles shall govern.
11.03
BANK ACCOUNTS. The Partnership shall maintain separate accounts in its name in
one or more banks and the cash funds of the Partnership shall be kept in such
accounts as determined by the General Partner.
ARTICLE XII RIGHTS AND OBLIGATIONS OF
LIMITED PARTNERS
12.01
PARTICIPATION IN MANAGEMENT. The Limited Partner shall not have the right, power,
or authority to participate in the ordinary and routine management of
Partnership affairs or to bind the Partnership in any manner.
12.02
LIMITED LIABILITY. The Limited Partner shall not be liable for losses, debts,
or obligations of the Partnership in excess of his Capital contribution.
12.03
RIGHTS TO ENGAGE IN OTHER VENTURES. The Limited Partner (or any other officer,
director, shareholder or other person holding a legal or beneficial interest in
any Limited Partner) shall not be prohibited from or restricted in engaging in
or possession of an interest in any other business venture of like or similar
nature.
12.04
SPECIFIC RIGHTS. The Limited Partner shall have the same rights as the General
Partner to:
(a)
have the Partnership books kept at the principal place of business of the
Partnership and a formal accounting of Partnership affairs whenever
circumstances render it justifiable and reasonable;
(b)
have on demand true and full information of all things affecting the
Partnership and a formal accounting of Partnership affairs whenever
circumstances render it justifiable and reasonable.
12.05 LIMITS OF TRANSFERABILITY. The
interest of the Limited Partner may not be transferred without the express
written approval of the General Partner.
ARTICLE XIII POWERS, DUTIES AND
LIMITATIONS OF GENERAL PARTNER
13.01
MANAGEMENT OF THE PARTNERSHIP. The General Partner shall have full, exclusive
and complete discretion in the management and control of the Partnership. The
General Partner agrees to manage and control the affairs of the Partnership to
the best of his ability and to conduct the operations contemplated under this
Agreement in a careful and prudent manner and in accordance with good industry
practice. The General Partner shall only be required to devote such part of his
time as is reasonably needed to manage the business of the Partnership, it
being
understood
that the General Partner shall not be required to devote his time exclusively
to the Partnership.
13.02
COMPENSATION TO THE GENERAL PARTNER. The General Partner shall receive up to
_____(Amount/Optional)_____ dollars per month as an advance against his share
in cash disbursements of the partnership. Any portion of such cash advances to
the General Partner from the Partnership shall be deducted from the General
Partner's share in cash disbursements.
13.03
ADMISSION OF LIMITED PARTNERS. No additional Limited Partners shall be admitted
to the Partnership without the consent of the Limited Partner.
13.04
SPECIFIC LIMITATIONS. The General Partner shall not, except as herein provided,
without written consent of the Limited Partner:
(a) Do any act in contravention of this
Agreement;
(b)
Do any act which would make it impossible to carry on the ordinary business of
the Partnership;
(c) Confess a judgement against the
Partnership;
(d)
Possess Partnership property, or assign its specific rights in specific
Partnership property, for other than a Partnership purpose;
(e) Admit a person as a General or
Limited Partner.
13.05
SPECIFIC POWERS. The General Partner shall have the following power and duties:
(a)
With the approval of the Limited Partner, to cause the dissolution and winding
up of the Partnership;
(b)
To collect all monies due the Partnership;
(c)
To establish, maintain, and supervise the deposits and withdrawals of funds
into bank accounts of the Partnership;
(d)
To employ accountants or prepare required tax returns. The fee for preparation
of such tax returns shall be an expenses of the Partnership.
(e)
To employ attorneys for Partnership purposes. Any such attorney's fees and
expenses incident thereto shall be an expense of the Partnership.
13.06
AMENDMENTS. Amendments to this Agreement may be proposed by the General Partner
or by the Limited Partner.
13.07
LIMITATION ON DUTY. Notwithstanding anything to the contrary contained in this Article
or elsewhere in this Agreement, the General Partner shall have no duty to take
affirmative action with respect to management of the Partnership business or
property which might require the expenditure of monies by the Partnership or
the General Partner unless the Partnership is then possessed of such monies
available for the proposed expenditure. Under no circumstances shall the General
Partner be required to expend personal funds in connection with the Partnership
business.
13.08
PRESUMPTION OF POWER. The execution by the General Partner of the contracts or agreements
relating to Partnership business shall be sufficient to bind the Partnership.
No person dealing with the General Partner shall be required to determine his
authority to make or execute any undertaking on behalf of the Partnership, nor
determine any fact or circumstances bearing upon the existence of his authority
nor to see the application or distribution of revenue or proceeds derived therefrom,
unless and until such persons have received written noticed to the contrary.
13.09
OBLIGATIONS NOT EXCLUSIVE. The General Partner shall devote such time as is reasonably
necessary to manage the Partnership's business, it being understood that the
General Partner may engage in other employment and other transactions for his
own account and for the
account
of others. General Partner shall not engage in any employment or transactions
that would be in direct conflict of interest to the Partnership.
13.10
INDEMNIFICATION OF GENERAL PARTNER. The General Partner shall be indemnified
and held harmless by the Partnership from and against any and all claims of any
nature, whatsoever, arising out of or incidental to the General Partner's
management of Partnership affairs; provided, however, that the General Partner
shall not be entitled to indemnification hereunder for liability arising out of
gross negligence or willful misconduct of the General Partner or the breach by the
General Partner of any provisions of this Agreement.
13.11
LIMITATION OF TRANSFERABILITY. The interest of the General Partner may not be transferred
without written approval from the Limited Partner.
ARTICLE
XIV DISSOLUTION, TERMINATION AND LIQUIDATION
14.01
DISSOLUTION. Unless provisions of Section 14.01 are elected, the Partnership
shall be dissolved and it's business shall be wound up on the earliest to
occur:
(a) December 31, 1999
(b)
The death, resignation, insolvency, bankruptcy or other legal incapacity of the
General Partner or any other event which would legally disqualify the General
Partner from acting hereunder; or
(c) The occurrence of any other event
which, by law, would require the Partnership to be dissolved.
14.02
CONTINUATION OF COPYRIGHT OWNERSHIP. The dissolution of the Partnership shall
not effect the rights in and to the copyrights owned by the Partnership.
14.03
OBLIGATIONS ON DISSOLUTION. The dissolution of the Partnership shall not
release any of the parties hereto from their contractual obligations under this
Agreement.
14.04
LIQUIDATION PROCEDURE. A reasonable time shall be allowed for the orderly liquidation
of the assets of the Partnership and the discharge of liabilities to creditors
so as to enable the Partnership to minimize the losses normally attendant to a
liquidation.
(a)
Upon dissolution of the Partnership for any reason, the Partners shall continue
to receive cash distribution, and provided in Article XIII, subject to the
other provisions of this Agreement and to the provisions of subsection (b)
hereof and shall share income and losses for all tax and other purposes during
the period of liquidation.
(b)
The General Partner, as liquidator, shall proceed to liquidate the Partnership
Properties to the extent that it has not already been reduced to cash unless
the General Partner elects to make distributions in kind to the extent and in
the manner herein provided and such case, in any, and
property
in kind, shall be applied and distributed in accordance with Section 8.02 (b).
14.05
DEATH OR INSANITY OF THE LIMITED PARTNER. The death or insanity of a Limited
Partner shall have no effect on the life of the Partnership and the Partnership
shall not be dissolved thereby.
ARTICLE XV MISCELLANEOUS
15.01
NOTICES. Notices or instruments of any kind which may be or are required to be
given hereunder by any Partner to another shall be in writing and deposited in
the United States Mail, certified or registered, postage prepaid, addressed to
the respective Partner at the address appearing in the records of the
Partnership. The Partners may change their address by giving notice in writing,
stating their new address, to the other Partner.
15.02
LOAN TO THE PARTNERSHIP. If the Limited Partner shall, in addition to his
Capital Contribution to the Partnership, lend any monies to the Partnership,
the amount of any such loan shall not increase his capital account nor shall it
entitle him to any increases in his share of the distribution of the
Partnership, but the amount of any such loan shall be an obligation on the part
of the Partnership to such Partner and shall be repaid to him on the terms and
at the interest rate evidenced
by
a promissory note executed by the General Partner, except that the General
Partner shall not be personally obligated to repay the loan, which shall be
payable and collectable only out of the assets of the Partnership.
15.03
By the execution of this Agreement, the Limited Partner does irrevocably
constitute and appoint the General Partner his true and lawful attorney-in-fact
and agent to effectuate and to act in his name, place, and stead, in
effectuating the purposes of the Partnership including the execution, verification,
acknowledgement, delivery, filing and recording of this Agreement as well as
all authorized amendments thereto, all assumed name certificates, documents,
bills of sale, and all other
documents
which may be required to effect the continuation of the Partnership and which
the General Partner deems necessary or reasonably appropriate. The power of
attorney granted herein shall be
deemed
to be coupled with an interest, shall be irrevocable and survive the death,
incompetence, or legal disability of a Limited Partner.
15.04
___(STATE)____ LAWS GOVERN. This Agreement shall be construed in accordance with
the laws of the State of ________ .
15.05
COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which
shall be an original but all of which shall constitute an instrument.
15.06
BINDING EFFECT. This Agreement shall be binding upon and shall inure to the
benefit of the Partners and their spouses, as well as their respective heirs,
legal representatives, successors and assigns.
15.07
PARAGRAPH TITLES. Paragraph titles are for descriptive purposes only and shall
not control or alter the meaning of this Agreement as set forth in the text.
EXECUTED as of the date herein first
above stated.
________________________________
LIMITED PARTNER
________________________________
GENERAL PARTNER
