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HomeMy WebLinkAboutAgreement of Ltd Partnership-Baxter Ranch Holdings Ltd AGREEMENT OF LIMITED PARTNERSHIP OF BAXTER RANCH HOLDINGS, LTD. THIS AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement"), effective as of the date of the filing of the initial Certificate of Formation with the Secretary of State for the State of Texas, is entered into by and among 5DV ENTERPRISES, L.L.C., a Texas limited liability company, as General Partner; those parties whose names are set forth in Exhibit 2 hereto, as initial Limited Partners; and those parties whose names are hereinafter set forth in Exhibit 3 hereto,who shall thereafter be admitted to the Partnership as Limited Partners. ARTICLE I. DEFINITIONS 1.1. Definitions. As used in this Agreement, the following terms shall have the respective meanings indicated: a) "Affiliate" shall mean, when used with reference to a specific Person, (i) any Person that directly or indirectly controls, is controlled by, or is under common control with the specified Person, (ii) any Person that is an officer, director, partner, shareholder, employee, trustee, or serves in a similar capacity with respect to the specified Person, or for which the specified Person is an officer, partner, shareholder, employee, trustee, or serves in a similar capacity, and (iii) any Person that, directly or indirectly, is the beneficial owner of 10% or more of any class of equity securities of the specified Person, or of which the specified Person, directly or indirectly, is the owner of 10% or more of any class of equity securities. b) "Agreement" shall mean this Agreement of Limited Partnership of BAXTER RANCH HOLDINGS,LTD., as amended or restated from time to time. c) "Bankrupt" or "Bankruptcy" shall mean, in respect of a Partner, the occurrence of any of the following with respect to such Partner: (1) such Partner shall (i) voluntarily consent to an order for relief by filing a petition for relief under the laws of the United States codified as Title 11 of the United States Code, (ii) seek, consent to, or not contest the appointment of a receiver, custodian, or trustee for himself or herself or for all or any part of his or her property in a debtor relief context, (iii) file a petition seeking relief under the bankruptcy, arrangement, reorganization, or other debtor relief laws of any state or other competent jurisdiction, (iv) make a general assignment for the AGREEMENT OF LIMITED PARTNERSHIP Pagel of 23 877775.1 benefit of creditors, or (v) admit in writing that he or she is generally not paying his or her debts as such debts become due; (2) (i) a petition is filed against such Partner seeking an order for relief under the laws of the United States codified as Title 11 of the United States Code, or seeking relief under the bankruptcy, arrangement, reorganization, or other debtor relief laws of the United States or any state or other competent jurisdiction, or (ii) a court of competent jurisdiction enters an order, judgment, or decree appointing, without the consent of such Partner, a receiver, custodian, or trustee for him or her, or for all or any part of his or her property, and such petition, order,judgment, or decree shall not be and remain discharged or stayed within 60 days after its entry; or (3) the interest in the Partnership or any Partner is seized or subjected to a charging order by a creditor of such Partner and the same is not released from seizure or charging order or bonded out within 30 days from the date of notice of such seizure or charging order. d) "Capital Account shall mean a separate account for each Partner which shall be maintained as follows: (1) to each Partner's Capital Account there shall be credited such Partner's Capital Contributions, such Partner's distributive share of Profits, and the amount of any Partnership liabilities assumed by such Partner or which are secured by a Partnership property distributed to such Partner;and (2) to each Partner's Capital Account there shall be debited the amount of Distributions to such Partner pursuant to any provision of this Agreement, such Partner's distributive share of Losses, and the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the Partnership. In the event any interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to comply with such Regulations, the General Partner may make such modification, provided that it is not likely to have a material effect on the amounts distributable to any Partner upon the wind up of the Partnership. The General Partner shall adjust the amounts debited or credited to Capital Accounts with respect to (i) any property contributed to the Partnership or distributed to the Partners, and (ii) any liabilities which are secured by such contributed or distributed property or which are AGREEMENT OF LIMITED PARTNERSHIP Page 2 of 23 877775.1 assumed by the Partnership or the General Partner, in the event the General Partner shall determine such adjustments are necessary or appropriate pursuant to Regulations Section 1.704-1(b)(2)(iv). The General Partner also shall make any appropriate modifications,in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b). e) "Capital Contribution" shall mean the amount of money and the fair market value of any property contributed to the Partnership by a Partner after appropriate reduction for liabilities assumed by the Partnership or otherwise burdening the Capital Contribution. The initial Capital Contributions of each Partner are set forth in Exhibits 1 and 2. 0 "Certificate of Formation" shall mean a certificate in a form acceptable for filing with the Secretary of State of Texas under the TLPL. g) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the corresponding provisions of any successor statute. h) "Descendant" shall mean, with respect to a particular individual, such individual's children, grandchildren, great-grandchildren, and more remote progeny, and such individual's "descendants" include only those that have been (i) born to a lawful marriage (or whose natural parents subsequently inter-married), (ii) legally adopted prior to attaining the age of eighteen (18) years, or (iii) lived while a minor as a regular member of the household of the natural parent. i) "Dispose," "Disposing," and "Disposition" shall mean a sale, assignment, transfer, exchange, mortgage, pledge, grant of a security interest, gift, bequest,or other disposition or encumbrance or the acts thereof. j) "Distributions" shall mean the amount of cash and the fair market value of any property (other than money) distributed to a Partner, after appropriate reduction for any liabilities assumed by a Partner in connection with such Distribution or otherwise burdening the Distribution. k) "Effective Date" shall mean the date of filing by the General Partner with the Secretary of State of the State of Texas of the Certificate of Formation reflecting the admission of the Limited Partners. 1) "Family" shall mean, with. respect to a particular individual, such individual's siblings (whether whole or half blood),parents and Descendants. m) "General Partner" shall mean 5DV ENTERPRISES,L.L.C.,a Texas limited liability company, together with each other Person (if any) that subsequently becomes General Partner in the Partnership pursuant to the provisions of this Agreement, but excludes any such Person that subsequently ceases to be a General Partner pursuant to the provisions of this Agreement. AGREEMENT OF LIMITED PARTNERSHIP Page 3 of23 877775.1 n) "Limited Partners" shall mean each Person that is designated on the signature pages hereof as,and that has executed this Agreement as, a Limited Partner,but excludes any such Person that subsequently ceases to be a Limited Partner pursuant to the provisions of this Agreement, all as shown on the books and records of the Partnership. o) "Ownership Interests" shall mean the interest of each Partner in the Partnership as set forth in Exhibits 1, 2, and 3; provided, however, said interests may be adjusted from time to time pursuant to this Agreement. p) "Partners" shall mean the General Partner and the Limited Partners. q) "Partnership" shall mean BAXTER RANCH HOLDINGS, LTD., a limited partnership,organized in accordance with the provisions of the TLPL. r) "Partnership Year" shall mean the calendar year. s) "Person" shall mean an individual, partnership, corporation, trust, estate, unincorporated association, or other entity or association. t) "Profits and Losses" shall mean for each Partnership Year or other period, an amount equal to the Partnership's taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose,all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),with the following adjustments: (1) any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this Section shall be added to such taxable income or loss; (2) any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses shall be subtracted from such taxable income or loss; (3) gain or loss resulting from any Disposition of Partnership property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the fair market value of the property Disposed of,notwithstanding that the adjusted tax basis of such property differs from its fair market value; (4) in the event the Partnership makes a Distribution of Partnership property in kind, Profits and Losses shall include the amount of gain or loss which the Partnership would have recognized if the property distributed had been sold for its fair market value (after appropriate adjustment for liabilities) immediately prior to such Distribution. AGREEMENT OF LIMITED PARTNERSHIP Page 4 of 23 877775.1 u) "Regulations" shall mean the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). v) "TLPL" means the Texas Limited Partnership Law, as part of the Texas Business Orgaization Code. ARTICLE II. FORMATION OF LIMITED PARTNERSHIP; ORGANIZATIONAL CERTIFICATES 2.1. Formation of Limited Partnership. Except as provided to the contrary in this Agreement, the rights, duties, status, and liabilities of the Partners, and the formation, administration, wind up, and continuation or termination of the Partnership, shall be as provided in the TLPL. Those Persons whose names appear on Exhibits 1 and 2 shall execute this Agreement and agree to be bound by all the terms and provisions of this Agreement. 2.2. Organizational Certificates. The General Partner shall execute and cause to be filed with the Secretary of State of the State of Texas a Certificate of Formation. Upon the request of the General Partner,each Limited Partner shall promptly execute, acknowledge,swear to, and deliver all certificates and other instruments and perform such additional acts consistent with the terms of this Agreement as may be necessary to enable the General Partner to form, qualify and continue the Partnership as a limited partnership under the laws of the State of Texas. ARTICLE III. PARTNERSHIP NAME,OFFICES AND TERM 3.1. Limited Partnership Name. The name of the Partnership shall be "BAXTER RANCH HOLDINGS,LTD."and the business of the Partnership shall be conducted under such name or under such assumed name as may be selected from time to time by the General Partner. 3.2. Principal Place of Business. a) The address of the registered office shall be 337 Bobwhite Lane, New Braunfels, Texas 78132, and the name of the registered agent of the Partnership in the State of Texas shall be ANN MARIE ALLEN, b) The principal place of business of the Partnership shall be 337 Bobwhite Lane, New Braunfels, Texas 78132, or such other place as may be designated by the General Partner. The books and records of the Partnership shall be maintained at its principal place of business. The Partnership shall have such other places of business as the General Partner deems necessary or desirable. The General Partner shall notify the Limited Partners of any change in the principal place of business of the Partnership. c) The General Partner's principal place of business is 337 Bobwhite Lane, New Braunfels, Texas 78132. AGREEMENT OF LIMITED PARTNERSHIP Page 5 of 23 877775.1 3.3. Term. The Partnership shall continue, unless sooner terminated in accordance with any provision of this Agreement, until the close of Partnership business on December 31, 2056. ARTICLE IV. PURPOSES 4.1. Purpose of the Partnership. The purpose and intent of this Partnership will be as follows: a) to purchase or otherwise acquire land,mineral interests, oil and gas leases and other properties and assets; b) to own, operate, invest, maintain,rent, lease, manage,develop, explore, or sell, whether as part or as whole,all or any portion of the Partnership's assets; c) to produce on going income from the Partnership's assets; and d) for any other lawful business which may be carried on by a limited partnership under all applicable laws. ARTICLE V. DISPOSITION OF OWNERSHIP INTERESTS 5.1. Dispositions. No Partner shall Dispose of any Ownership Interests he or she owns or may acquire except: a) as provided in Section 5.2, 5.4 or Section 5.5 of this Agreement; b) by inter vivos or testamentary gift to a trust for the benefit of a Partner's spouse (whether or not such trust qualifies for the marital deduction under Code Section 2056(b)(7)); provided, however, (i) such spouse and/or members of such Partner's Family are the only permissible beneficiaries of the trust during such spouse's lifetime and the remainder beneficiaries of the trust are one or more members of such Partner's Family (or trusts for the benefit of one or more members of such Partner's Family), (ii) the trustee of such trust must be a member of such Partner's Family, and (iii) such Disposition will not result in a termination of the Partnership; c) by inter vivos or testamentary gift to or for the benefit of himself or herself, or a member of his or her Family, or to a trust, corporation, partnership, or other entity in which all of the beneficial interest is held by or for such Partner or his or her Family members, or both, provided such Disposition will not result in a termination of the Partnership; d) by the laws of descent and distribution; or e) by Disposition from a Partner which is a trust, corporation, partnership or other entity to the owner.or owners of the beneficial interests therein. AGREEMENT OF LIMITED PARTNERSHIP Page 6 of 23 877775.1 Any recipient shall be subject to the same restrictions contained in this Agreement. Any attempt by any Partner to Dispose of any Ownership Interests except in accordance with this Article shall be treated as an attempted assignment subject to the provisions of Section 5.2 of this Agreement. 5.2. Options on Assignment. Except as provided in Section 5.1 of this Agreement and subject to the provisions of the remaining sentences of this Section 5.2, before any Partner (including any heir, devisee, legatee, personal representative, or assignee or transferee of any Partner) may assign or transfer all or any part of his or her Ownership Interests, he or she must first (i) notify each of the other Partners by United States Certified Mail, Return Receipt Requested, as to the Ownership Interests he or she intends to assign or transfer, the name of the proposed assignee or transferee, and the price and terms upon which the assignment or transfer is to be made(hereinafter referred to as"the Notice")and(ii)obtain the unanimous written consent of the Partners, which consent may be granted or withheld in each said Partner's sole discretion, to allow such assignment or transfer (hereinafter referred to as "Consent"). If, within sixty (60) days of the date of such Notice to purchase, such assigning Partner has not received Consent, then it shall be presumed that the non-assigning Partners denied such assignment or transfer. If the assigning Partner has received Consent, the Partnership shall have an exclusive option for a period of ninety(90) days after the date of such Notice to purchase, at the price and on the terms set out in the Notice, all (but not less than all)of the Ownership Interests to be Disposed of. If Consent is received and the foregoing option is not exercised, each of the non-assigning General and Limited Partners shall have an exclusive option for a period of thirty (30) days after (i) the primary option expires or (ii) notice of non-exercise of the primary option is given, whichever is first to occur,to purchase, at the price and on the terms set out in the Notice,all(but not less than all) of the Ownership Interests to be Disposed of. The purchasing General and/or Limited Partners shall have•the right to exercise said option in such proportions as they agree upon among themselves or, in the absence of any such agreement, in proportion to their respective Ownership Interests as reflected by the Partnership books on the date such Notice is given. If Consent is received and neither of the foregoing options are exercised, the selling Partner may assign or transfer his or her Ownership Interests at the price, on the terms, and to the assignee or transferee stated in the notice at any time within sixty (60) days after the foregoing option to the non-assigning General and Limited Partners expires, but not thereafter unless and until he or she gives a new notice to the other Partners, all of the Partners (other than the assigning Partner) again unanimously consent, and they and the Partnership again fail to exercise their respective options under the foregoing provisions. Notwithstanding any provision in this Section to the contrary, with respect to any donative or testamentary transfer to a proposed transferee (other than as provided in Section 5.1 of this Agreement), the Partnership or the purchasing General and/or Limited Partners shall exercise their respective options upon the price as determined in Section 5.3 of the Agreement. 5.3. Option on Bankruptcy. Upon the Bankruptcy of any Partner,the Partnership shall have the option to acquire, upon the terms set out in this Section 5.3, the Ownership Interests then or theretofore held by such Partner. Upon the Bankruptcy of any Partner, the Partner and/or the trustee in bankruptcy, as the case may be, shall submit a written offer to sell such Ownership Interests to the Partnership by United States Certified Mail, Return Receipt Requested, which notice shall refer to the provisions of this Section 5.3. The Partnership shall have an exclusive option for a period of ninety (90) days after the completion of the appraisal procedure set forth below to elect to purchase all (but not less than all) said Ownership Interests at the price AGREEMENT OF LIMITED PARTNERSHIP Page 7 of 23 877775.1 determined by such appraisal procedure. The purchase price shall be paid over a period of five (5) years in equal annual installments, and there shall be no penalty for prepayment; unpaid balances shall bear interest per annum at the then prime rate of interest of Bank of America, N.A., a national banking corporation, or its successors, limited to the maximum lawful rate. The price at which such Ownership Interests shall be sold shall be determined by appraisal. The trustee in bankruptcy (if applicable) shall select one appraiser, and the Partnership shall select another appraiser. The selected appraiser(s) shall proceed promptly to determine the fair market value (which shall take into account any applicable discounts for lack of marketability and minority interest) of the Ownership Interests. The determination of the fair market value of the Ownership Interests by the appraiser(s) selected as hereinabove provided shall be final and binding on all parties; and if two appraisers are unable to agree on the fair market value of the Ownership Interests, said two appraisers shall select a third appraiser whose determination as to fair market value shall be final and binding on all parties. Each appraiser shall deliver a written report of his or her appraisal to the Partnership (and the trustee in bankruptcy if applicable). The appraised current fair market value for the Ownership Interests as herein determined, less the expenses of appraisal which shall be paid by the selling Partner and less an amount equal to twenty percent (20%) of the appraised value, shall be the price at which such Ownership Interests may be purchased hereunder. 5.4. Disposition upon Termination of Marital Relationship. If the marital relationship of a Partner is terminated by the death of his or her spouse or by divorce, and neither such Partner nor any of such Partner's Descendants succeed to the spouse's interest in the Ownership Interests, if any, (whether or not by the laws of descent and distribution) then such Partner shall have an exclusive option to purchase his or her spouse's interest in any Ownership Interests. Such option must be exercised within ninety(90) days after such divorce or, in the case of death, within ninety (90) days after the appointment of a personal representative for such spouse's estate. If the foregoing option is not exercised, then the Partner's then living Descendants shall have an exclusive option for a period of sixty (60) days after (i) the primary option expires, or (ii) notice of non-exercise of the primary option is given,whichever is first to occur,to purchase all (but not less than all) of said spouse's interest in any Ownership Interests. The Partner's then living Descendants shall have the right to exercise said option in such proportions as they agree upon among themselves or, in the absence of any such agreement, said option shall be exercised on a per stirpes basis. If both of the foregoing options are not exercised, the Partnership shall have an exclusive option for a period of sixty (60) days after (i) the secondary option expires, or (ii) notice of non-exercise of the secondary option is given, whichever is first to occur, to purchase all (but not less than all) of said spouse's interest in any Ownership Interests. If all of the foregoing options are not exercised, each of the General and Limited Partners shall have an exclusive option for a period of sixty (60) days after (i) the tertiary option expires, or (ii)notice of non-exercise of the tertiary option is given, whichever is first to occur, to purchase said spouse's interest in any Ownership Interests. The purchasing General and/or Limited Partners shall have the right to exercise said option in such proportions as they agree upon among themselves or, in the absence of any such agreement, in proportion to their respective Ownership Interests as reflected by the Partnership books on the date the primary option expires. If any of the foregoing options is exercised, such Partner's spouse or such spouse's executor or administrator shall be obligated to sell such Ownership Interests to those Persons who exercised their option. The price at which such Ownership Interests shall be sold shall be fair market value (which shall take into account any applicable discounts for lack of marketability and minority AGREEMENT OF LIMITED PARTNERSHIP Page 8 of 23 877775.1 interest) as determined by an appraiser selected by the General Partner. The determination of the fair market value of the Ownership Interests by the appraiser selected as hereinabove provided shall be final and binding on all parties. 5.5. Purchase by Partnership. The Partnership may acquire a portion or all of a Limited Partner's Ownership Interests, upon such terms, provisions, and conditions as may be agreed upon by the General Partners and such Limited Partner. In the event of a default hereunder, which default is not cured within thirty (30) days after notice of said default, the Partnership shall have the option to purchase the defaulting Partner's interest upon the price and terms as determined in Section 5.3 of this Agreement, as if said defaulting Partner was in Bankruptcy. ARTICLE VI. ADMISSION OF ASSIGNEES 6.1. Dispositions. Any Person who receives an Ownership Interest shall be admitted as a Partner only upon (i) the affirmative vote of all General Partners and all Limited Partners, and(ii)the execution of this Partnership Agreement by such Person. 6.2. Non Admission. Any Person who is not admitted as a Partner pursuant to Section 6.1 shall be regarded as a purchaser of such Ownership Interests and shall only be entitled to share in the Profits and Losses of the Partnership and will not be entitled to any other rights, including voting rights and rights listed within TLPL. ARTICLE VII. CAPITAL CONTRIBUTIONS 7.1. Initial Capital Contributions of the Partners. The initial Capital Contributions to the Partnership by the Partners are as set out in Exhibits 1 and 2. For purposes of this Article VII,the term"Partner" shall include an Assignee. 7.2. Return of Capital, Partner's Loans. No Partner is entitled to the return of his or her contribution or any subsequent contributions to the Partnership or to be paid interest in -- respect of either of his or her Capital Account or any contribution made by him or her to the Partnership. No unrepaid capital contribution shall be deemed or considered to be a liability of the Partnership or of any Partner. No Partner shall be required to contribute or lend any cash or property to the Partnership to enable the Partnership to return any Partner's contribution to the Partnership. Notwithstanding the prior sentence, nothing herein shall prevent a Partner from lending money to the Partnership under terms and conditions determined by the General Partner. 7.3. Additional Capital Contribution. In the event the General Partner is serving as General Partner of the Partnership and additional capital is necessary for the operation of the Partnership ("Additional Operating Capital") for (i) debt service on Partnership indebtedness, if any, (ii) ad valorem property taxes, or (iii) the expenses incurred in connection with the day-to- day business of the Partnership as approved hereunder, the General Partner shall notify the Partners in writing, or by actual notice that Additional Operating Capital is required ("Notice of Required Contribution"). Any such Notice shall set out the amount of, and the intended use of, the Additional Operating Capital. Within thirty (30) days of such Notice of Required AGREEMENT OF LIMITED PARTNERSHIP Page 9 of 23 877775.1 Contribution, each Partner shall contribute Additional Operating Capital to the Partnership in that proportion which is the same proportion as his or her Ownership Interests bear to all Partners' Ownership Interests. 7.4. Failure to Make Contribution. In the event a Partner shall fail to make a contribution of Additional Operating Capital (the "Non-Contributing Partner"), any or all of the Partners (the "Contributing Partners") shall contribute such sums required to be contributed by the Non-Contributing Partner in such amounts as the Contributing Partners may agree. The Contributing Partners shall be deemed to have made a loan to the Non-Contributing Partner in the amount of the sums so contributed for the benefit of the Non-Contributing Partner. The loan shall be evidenced by a five (5) year promissory note which is secured by the Non-Contributing Partner's Ownership Interests until such loan has been repaid in full, executed by the Non- Contributing Partner(or by the General Partner pursuant to Article XIII), in a form acceptable to the Contributing Partners. The note shall bear interest at a rate of the "prime rate" as published in the Wall Street Journal, plus three percent (3%), adjusted annually, provided, however, in no event shall such rate exceed the maximum rate allowed by law for loans of this nature. The Non- Contributing Partner shall pay to the Partnership for the benefit of the Contributing Partners the principal amount of the note (plus any accrued and unpaid interest) over a period of five (5) years in equal annual installments. No penalty will be imposed for any prepayment of the principal of the note. The note shall, to the extent not otherwise repaid, be payable with Distributions otherwise to be made to such Non-Contributing Partner from the Partnership pursuant to such Partner's Ownership Interests herein (i.e., the Non-Contributing Partner shall not receive any Distributions hereunder until such note installment has been paid in full. All such Distributions shall be applied to the full repayment of the note). Any payment upon such note shall be applied first toward any accrued and unpaid interest on such note and then to the payment of any principal which remains outstanding. If such loan is in default, no judicial proceeding will be required to foreclose on the Non-Contributing Partner's Ownership Interests. ARTICLE VIII. ALLOCATIONS AND DISTRIBUTIONS 8.1. Capital Accounts. A "Capital Account" shall be established and maintained for each Partner. For purposes of this Article VIII,the term"Partner" shall include an Assignee. 8.2. Allocation of Profits and Losses. In accordance with Code Section 704(c)and the Regulations thereunder,.Profits and Losses with respect to any property contributed to the capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property and its initial fair market value. Subject to the first sentence of this Section 8.2, Profits and Losses shall be allocated in proportion with the Partners' Ownership Interests. 8.3. Special Allocations. Notwithstanding Section 8.2, in the event any Limited Partner unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704- 1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to such Limited Partners in an amount and manner sufficient to eliminate the deficit balances in their Capital Accounts created by such adjustments, allocations, or distributions as quickly as AGREEMENT OF LIMITED PARTNERSHIP Page 10 of 23 877775.1 possible. Any special allocations of items of income and gain pursuant to this Section 8.3 shall be taken into account in computing subsequent allocations of Profits pursuant to this Article VIII, so that the net amount of any items so allocated and the Profits, Losses and all other items allocated to each Partner pursuant to this Article VIII shall, to the extent possible, be equal to the net amount that would have been allocated to each such Partner pursuant to the provisions of this Article VIII if such unexpected adjustments, allocations,or distributions had not occurred. 8.4. Distributions. Except as otherwise provided in Article XII, Distributions of money and/or other property shall be made at such times as the General Partner in its sole discretion, consistent with its fiduciary duties, may determine, in proportion with the Partners' respective Ownership Interests. 8.5. Amounts Withheld. Any amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment or distribution to the Partnership or the Partners shall be treated as a Distribution to the Partners pursuant to this Article VIII for all purposes under this Agreement. The General Partner may allocate any such amounts among the Partners in any manner that is in accordance with applicable law. ARTICLE IX. ADMINISTRATIVE AND TAX MATTERS 9.1. Books and Records. The books and records of the Partnership shall be kept,at the expense of the Partnership, by such Persons as the General Partner may designate from time to time at the principal place of business of the Partnership or at such other place as the General Partner may designate. The books and records of the Partnership shall be maintained on a calendar year basis, using the cash method of accounting. The books and records of the Partnership shall reflect all Partnership transactions and shall be appropriate and adequate for conducting the Partnership business. As soon as may be practicable, each Partner shall receive, on an annual basis, a report indicating his or her share of Partnership income, credits, and deductions for income tax purposes during the immediately preceding year. 9.2. Inspection. Each Partner shall have the right, upon giving seven business days prior written notice to the General Partner, to inspect the books and records of the Partnership during_reasonable business hours at the principal place of business of the Partnership or such other location as the General Partner may designate. 9.3. Bank Accounts; Investments. All funds of the Partnership shall be deposited in its name in an account or accounts maintained in a national or state bank or banks or brokerage account or accounts designated from time to time by the General Partner. Checks shall be drawn upon the Partnership account or accounts only for the purposes of the Partnership and shall be signed by such signatory party or parties as may be designated from time to time by the General Partner. The General Partner shall have the right to deposit Partnership funds that, from time to time, are not required for the operation of the business of the Partnership in interest bearing bank accounts or to purchase commercial paper, treasury bills, or other short term instruments or any other investments as the General Partner deems necessary, appropriate, or advisable. AGREEMENT OF LIMITED PARTNERSHIP Page I I of 23 877775.1 9.4. Tax Matters Partner. The Partners recognize that the General Partner will be treated as the tax matters partner of the Partnership pursuant to Section 6231(a)(7) of the Code. The General Partner shall use its best efforts to cause all Partners to become "notice partners" within the meaning of Section 6231(a)(8) of the Code. The General Partner shall keep all other Partners informed of all matters that may come to the attention of such General Partner in its capacity as tax matters partner by giving the other Partners notice thereof within 30 days after the General Partner becomes informed of any such matter. This provision is not intended to authorize such General Partner to take any action that is left to the determination of an individual Partner under Sections 6222 through 6232 of the Code. ARTICLE X. MANAGEMENT;LIMITATIONS;MEETINGS; STANDARD OF CARE,INDEMNIFICATION 10.1. Management. The management and control of the Partnership shall be vested solely in the General Partner, who shall have (subject to the limitations imposed by Section 10.2 and elsewhere in this Agreement)full,exclusive,and complete discretion in the management and control of, and in the making of all decisions affecting, the Partnership business. Without limitation of the generality of the preceding sentence, the General Partner shall have (subject to the aforesaid limitations)the authority,the right,and the power,on behalf of the Partnership: a) to enter into, execute, amend, and .perform any and all agreements, contracts, documents, certifications, and instruments binding the Partnership as may be necessary or convenient in connection with the ownership, management, maintenance, and operation of Partnership property; b) to execute, in furtherance of any or all of the purposes of the Partnership, any lease, bill of sale, contract,or other instrument purporting to convey or encumber the real or personal property of the Partnership; c) to sell, transfer, exchange, lease, farm out, or otherwise dispose of the assets of the Partnership; d) to purchase or otherwise acquire land, mineral interests, oil and gas leases and other properties and assets; e) to vote corporate stock, general or limited partnership interests, or other securities that are assets of the Partnership; and to consent to the reorganization, consolidation, merger, wind up, or liquidation of a corporation or other business enterprise that is an asset of the Partnership; f) to establish reserves for working capital and for taxes, insurance, debt service, depreciation, depletion, repairs, replacements or renewals, or other costs and expenses incident to the ownership of Partnership property and for other such purposes as the General Partner deems appropriate under the circumstances from time to time; g) to have the Partnership's direct expenses billed directly to and paid by the Partnership; AGREEMENT OF LIMITED PARTNERSHIP Page 12 of 23 877775.1 h) to pay all taxes, charges, and assessments against the Partnership and its assets; i) to admit Partners as contemplated by Article V and Article VI of this Agreement; j) to open, maintain, and close bank accounts, to designate and change signatories on such accounts, and to draw checks and other orders for the payment of monies; k) to settle claims, to prosecute, defend, and settle lawsuits, and to handle all matters with governmental agencies; 1) to deposit Partnership funds that, from time to time, are not required for the operation of the business of the Partnership in interest bearing bank, brokerage or money market fund accounts or to purchase commercial paper, treasury bills, or other short-term instruments or any other investments as the General Partner deems necessary, appropriate,or advisable; m) to engage consultants, accountants, attorneys, managers, investment advisors, investment managers, appraisers, specialists, and any and all other agents and assistants, both professional and non-professional, as the General Partner may deem necessary, appropriate, or advisable in furtherance of the purposes of the Partnership; to delegate to said investment advisors and investment managers investment discretion, including the power to acquire and dispose of Partnership investments; and to compensate such persons for services rendered out of Partnership funds; n) to collect all sums due the Partnership; o) to prepare and file all Partnership tax returns and to make all elections for the Partnership thereunder; p) to determine the timing and amount of any Distributions to the Partners (whether of cash or property); q) to take any and all other action that the General Partner may deem necessary,appropriate, or desirable in furtherance of the purposes of the Partnership; r) to purchase such insurance as the General Partner, in its sole discretion, determine; and s) to hold, manage, invest and reinvest all or any part of the assets of the Partnership [including specifically, assets which are unproductive of income or assets which are underproductive of income];and t) to borrow money in behalf of the Partnership, and to secure payment of loans by the execution of mortgages, security agreements and other such collateral documents. AGREEMENT OF LIMITED PARTNERSHIP Page 13 of 23 877775.1 10.2. Limitations on General Partner. Notwithstanding anything in this Agreement to the contrary, the following actions may be taken by the General Partner only if approved prior thereto by all Partners: a) the sale, transfer, disposition or exchange of all or substantially all of the assets of the Partnership; b) the lease or sublease of a significant portion of the assets of the Partnership for a term in excess of twenty-four months; c) any loan entered into or debt incurred by the Partnership which is in excess of$50,000 (or any series of related loans which are in excess of$50,000); d) contributing a significant portion of the Partnership's assets to a partnership, corporation or other entity which is not entirely owned, directly or indirectly, by the Partnership; e) doing any act which would make it impossible to carry on the ordinary business of the Partnership; f) confessing a judgment against the Partnership in connection with any threatened or pending legal action, or settling any claim against,the Partnership, in excess of$10,000; g) executing or delivering any assignment for the benefit of creditors of the Partnership; h) borrowing in excess of$50,000 from itself or any affiliate (or borrowing in excess of $50,000 from itself and its Affiliates in the aggregate) on behalf of the Partnership; i) spending, or committing to spend, in excess of$50,000 on behalf of the Partnership; j) making the decision to institute any lawsuit on behalf of the Partnership; k) filing any voluntary petition in bankruptcy or receivership with respect to the Partnership; or 1) entering into any contract, agreement or understanding committing the Partnership to engage (or committing the Partnership to engage upon the occurrence of one or more events or conditions) in any action described in Section 10.2.a), b), c)or d) above. 10.3. Authority of the General Partner. Any person dealing with the Partnership or the General Partner may rely upon a certificate signed by the General Partner concerning: a) the identity of the General Partner or any other Partner; AGREEMENT OF LIMITED PARTNERSHIP Page 14 of 23 877775.1 b) the existence or nonexistence of any fact or facts that constitute conditions precedent to acts by the General Partner or in any other manner germane to the affairs of the Partnership; c) the person or persons who are authorized to execute and deliver any instrument or document of the Partnership; or d) any act or failure to act by the Partnership or concerning any other matter whatsoever involving the Partnership or any Partner. 10.4. Meetings of Partners. Any matter requiring the approval of the Partners pursuant to this Agreement may be considered at a meeting of the Partners called by the General Partner. Partners may participate in and hold a meeting by means of conference telephone or similar communications equipment by means of which all Partners participating in the meeting can communicate with each other, and participation in such a meeting shall constitute presence in person at such meeting. 10.5. Conflict of Interest. The Partners acknowledge that the General Partner, and the Affiliates of the General Partner, are engaged in activities other than the activities of the Partnership and that the General Partner shall not be expected or required to devote its full time to the management of the Partnership. Participation in the Partnership shall not in any way act as a restraint on the other present or future business activities or investments of any Partner(or any Affiliate of a Partner), whether or not such activities are competitive with the business of the Partnership. As a result of this Agreement,no Partner(or any Affiliate of a Partner) shall, under any circumstances,be obligated or bound to offer or present to the Partnership or any of the other Partners any business opportunity presented or offered to them or the Partnership as a prerequisite to the acquisition of or investment in such business opportunity by such Partner (or any Affiliate of such Partner) for his or her account or the account of others. In fiutherance thereof, each of the Partners hereby agrees that any business or activity in which a Partner (or any Affiliate of a Partner) engages, conducts, or participates outside the Partnership shall be conclusively deemed not to be a business or activity in competition with or an opportunity of the Partnership. Any such business or activity of a Partner (or any Affiliate of a Partner) may be undertaken with or without notice to or participation therein by the Partnership or the other -Partners_Each Partner-and.-the Partnership hereby waive any right or claim that such Partner or the Partnership may have against a Partner(or any Affiliate of a Partner)with respect to any such business or activity or the income or profits therefrom. 10.6. Indemnification of the General Partner. The General Partner (or any Affiliate thereof) or its respective Affiliates, shall not be held liable or responsible to any Partner or to the Partnership for any losses sustained or liabilities incurred in connection with, or attributable to, errors in judgment or other fault of the General Partner(or any Affiliate thereof) or its respective Affiliates, except that which is attributable to the proven gross negligence, bad faith, or wrongdoing of the General Partner (or any Affiliate thereof) or its respective Affiliates. The Partnership shall indemnify and hold harmless to the fullest extent permitted by law, the General Partner (or any Affiliate thereof) and its respective Affiliates (herein referred to in the aggregate as "Indemnified Parties"), to the extent that the Partnership assets are sufficient therefor, from and against any and all claims, demands, liabilities, costs (including attorney's fees and court AGREEMENT OF LIMITED PARTNERSHIP Page 15 of 23 877775.1 costs), damages, and causes of action arising out of, relating to, or which are or may be directly or indirectly attributable or incidental to actions or occurrences under this Agreement or which otherwise relate to the Partnership or occurrences during the term of the Partnership, except where the claim at issue is based upon the proven gross negligence, bad faith, or wrongdoing of the Indemnified Party. The indemnification rights herein contained shall be cumulative of, and in addition to,any and all rights,remedies,and recourses to which the Indemnified Party shall be entitled as against third parties. 10.7. Reimbursement and Fees. The General Partner shall be entitled to reimbursement out of Partnership funds for any and all actual costs and expenses incurred by the General Partner on behalf of the Partnership, while acting on behalf of the Partnership. The General Partner shall be entitled to receive reasonable compensation commensurate with its duties and responsibilities, taking into account the value and nature of the Partnership's assets and the time and work involved. The General Partner and the Limited Partners may agree to pay the General Partner a guaranteed payment for services or for the use of capital. 10.8. Removal of the General Partner. The General Partner may be removed from the Partnership with or without cause by the written consent of the Limited Partners holding at least eighty percent (80%) of the total Limited Partners' Ownership Interests. In the event of the removal of the General Partner as herein provided, the General Partner so removed shall retain its interest in the Partnership; provided,however,that the foregoing shall not constitute a waiver or exculpation by the Partnership or any Partner of any liability which the General Partner may have to the Partnership or any Partner in respect to the cause for its removal, and the General Partner, even though removed, shall remain entitled to indemnification from the Partnership pursuant to Section 10.6 with respect to any matter arising prior to its removal other than matters constituting cause hereunder. In the event a General Partner is removed for any reason, then the removed General Partner shall automatically become a Limited Partner and his General Partnership Interest converted to a Limited Partnership Interest with the same rights and duties of a Limited Partner hereunder. Although the Partnership shall be wound up in the event of the removal of the General Partner, it.shall be reconstituted or continued as provided in Article XII. of this Agreement. ARTICLE XI. STATUS AND LIABILITY OF LIMITED PARTNERS 11.1. General. Subject to the terms and conditions of this Agreement, each Limited Partner shall have all of the rights, and be afforded the status, of a limited partner as set forth in the TLPL. The Limited Partners shall not take part in the management or control of the Partnership business, transact any business for the Partnership, or have the power to sign for or bind the Partnership. Without limiting the rights set forth in the TLPL, a Limited Partner shall not be deemed to have taken part in the management or control of the Partnership by exercising one or more of the following powers: a) acting as a contractor for or an agent or employee of the Partnership or of a General Partner; AGREEMENT OF LIMITED PARTNERSHIP Page 16 of 23 877775.1 b) consulting with or advising the General Partner on any matter, including the business of the Partnership; c) acting as surety, guarantor, or endorser for the Partnership; d) calling, requesting, attending, or participating in a meeting of the Partners or the Limited Partners; e) winding up the Partnership pursuant to the provisions of Section 12.2 of this Agreement; f) serving on a committee of the Limited Partnership or the Limited Partners; and g) proposing, approving, or disapproving, by vote or otherwise, one or more of the following actions: (1) the Bankruptcy of the Partnership, the wind up of the Partnership, an election to reconstitute the Partnership, or an election to continue the business of the Partnership; (2) a change in the nature of the business of the Partnership; (3) the admission,removal,or retention of a General Partner; (4) the admission of a Limited Partner; (5) an amendment to the Agreement;and (6) set the compensation of the General Partner. 11.2. Withdrawal. Except with the written consent of the General Partner and the Limited Partners, which consent may be granted or withheld in each said Partner's sole discretion, a Limited Partner may not withdraw from the Partnership. 11.3. Limitation of Liability. The liability of each Limited Partner shall be limited as provided under the TLPL to (i) his or her share of the assets and undistributed Profits of the Partnership, and (ii) any Partnership funds or property wrongfully distributed or returned to such Limited Partner. 11.4. Voting. Except as provided for herein or in the TLPL, any decision of the Limited Partners, that does not require the vote of the General Partner, shall require an affirmative vote of Limited Partners holding at least eighty percent (80%) of the total Limited Partners' the existing Ownership Interests. Except as provided for herein or in the TLPL, any decision of the General Partner and Limited Partners shall require the affirmative vote of the General Partner and the affirmative vote of Limited Partners holding at least eighty percent (80%) of the total Limited Partners' the existing Ownership Interests. AGREEMENT OF LIMITED PARTNERSHIP Page 17 of 23 877775.1 ARTICLE XII. WINDING UP 12.1. Events Requiring Winding Up. The Partnership shall be wound up only upon the occurrence of any of the following: a) the expiration of the term provided in Section 3.3, unless extended by amendment of this Agreement approved by the General Partner and by all of the Limited Partners; b) the General Partner's Bankruptcy, dissolution, removal or withdrawal from the Partnership (including a Disposition by the General Partner of its entire interest as General Partner in the Partnership), unless the remaining General Partners (or if there are no remaining General Partners, all of the Limited Partners) agree to continue the Partnership and its business and, if applicable to elect a substituted general partner; c) any event that makes it unlawful for the Partnership business to be conducted; or d) the written consent of the General partner and all of the Limited Partners to wind up the Partnership. Neither the death, dissolution, mental incompetence, or Bankruptcy of any Limited Partner nor the admission or substitution of a Person as a Limited Partner shall wind up, or be deemed to wind up, the Partnership or cause any interruption in or affect the continued existence of the Partnership and its business. To the extent that any event other than those specifically set forth in clauses (a), (b), (c) and (d) hereinabove is determined to cause, technically, a winding up of the Partnership, the Partners hereby agree that upon the occurrence of any such event the Partnership shall automatically be reconstituted immediately as a new limited partnership on terms identical to those set forth in this Agreement which shall be composed of the remaining Partners who may continue the business of the Partnership, either alone or with other Persons, and who shall approve of the general partner of the new partnership. 12.2. Distribution of Assets. If the Partnership is wound up and is not automatically reconstituted pursuant to Section 12.1 or otherwise reconstituted by the written consent of the General Partner (or all of the Limited Partners), an accounting of the Partnership assets, liabilities, and operations through the last day of the month in which the wind up occurs shall be made by independent accountants selected by the General Partner and.the affairs of the Partnership shall be wound up and terminated. The General Partner shall serve as the liquidating trustee unless wind up is caused by the Bankruptcy, dissolution,removal or withdrawal from the Partnership of the General Partner, in which`event the liquidating trustee shall be a Person approved of by the limited Partners. The liquidating trustee shall be responsible for winding up and terminating the affairs of the Partnership and shall determine all matters in connection therewith as it deems advisable and proper. AGREEMENT OF LIMITED PARTNERSHIP Page 18 of 23 877775.1 All assets remaining, after the payment (or provision for payment) of (i) Partnership obligations to third parties, contingent or otherwise, and (ii) the expenses of liquidation, shall be distributed to the Partners in the following order and priorities: a) Partnership assets shall be distributed to the General Partner for any compensation, fees or unreimbursed costs and expenses owed by the Partnership to the General Partner; b) Partnership assets shall be distributed to the Partners in an amount sufficient to discharge completely the principal and accrued interest owing to such Partners pursuant to any loans made to the Partnership by such Partners; c) with respect to all Partnership assets that have not been sold, the fair market value of such assets shall be determined and the Capital Accounts of the Partners shall be adjusted to reflect the manner in which the unrealized income, gain, loss, and deduction inherent in such assets (that has not been reflected in the Capital Accounts previously) would be allocated among the Partners if there were a taxable disposition of such assets for the fair market value of such assets on the date of their distribution. Fair market value of the assets shall be determined by agreement among the General Partner and the Limited Partners, or if an agreed fair market value cannot be determined, then by an appraiser selected by the General Partner and the Limited Partners. d) Partnership assets shall be distributed among the Partners in accordance with the positive Capital Account balances of the Partners,as determined after taking into account all Capital Account adjustments for the taxable year of the Partnership during which the liquidation of the Partnership occurs. Such distributions shall be made by the end of the taxable year of the Partnership during which the liquidation of the Partnership occurs(or, if later,within 90 days after the date of such liquidation). The Distribution (if any) to the Partners of an interest in the Partnership assets may be subject to such liens, encumbrances, and restrictions, and to such leases, contracts, and agreements as affect the assets on the date of such distribution. Any such Distribution shall be made or deemed to have been made at the fair market value (net of liabilities secured by such Distribution that such Partner is considered.to assume or take subject to under Section 752 of the Code). 12.3. Termination. After all of the assets of the Partnership have been distributed, the Partnership shall terminate; but if at any time thereafter any funds in any cash reserve fund referred to in Section 12.2 are released because the need for such cash reserve fund has ended, such funds shall be distributed to the Partners in the same manner as if such distribution had been made pursuant to Section 12.2. 12.4. Cancellation of Certificate of Formation. After all of the assets of the Partnership have been distributed, the Partnership shall terminate, and the liquidating trustee (or the Limited Partners if necessary) shall cause the cancellation of the certificate of formation and of all qualifications and registrations of the Partnership. AGREEMENT OF LIMITED PARTNERSHIP Page 19 of 23 877775.1 12.5. Return of Capital. The General Partner shall not be personally liable for the return of the capital contributions of a Limited Partner, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets. 12.6. Waiver of Partition. Each Partner hereby waives any rights to partition of the Partnership property. ARTICLE X1II. POWER OF ATTORNEY 13.1. Grant of Power. Each Partner does hereby irrevocably make, constitute, and appoint'the General Partner, each with full power of substitution, as his or her true and lawful attorney and agent, with full power and authority in his or her name, place, and stead and to execute, swear to, acknowledge, deliver, file, and record in the appropriate public offices (i) all certificates and other instruments(including, without limitation,the Certificate of Formation and, at the option of the General Partner, counterparts of this Agreement) and all amendments thereto that the General Partner deems appropriate, necessary or advisable to form, qualify, reform, or continue the qualification of, the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Texas and in each jurisdiction in which the Partnership conducts business; (ii) all instruments that the General Partner deems necessary, appropriate or advisable to reflect the use by the Partnership of any name other than BAXTER RANCH HOLDINGS, Ltd.; (iii) all instruments that the General Partner deems necessary, appropriate, or advisable to reflect any amendment,change, or modification of the Partnership in accordance with the terms of this Agreement; (iv) all conveyances and other instruments or documents that the General Partner deems appropriate, necessary, or advisable to reflect the wind up and termination of the Partnership pursuant to the terms of this Agreement; (v) instruments relating to the admission of additional or substituted Partners pursuant to the terms of this Agreement (including, without limitation, changes in the Partners' Ownership Interests resulting from the admission of such additional or substituted Partners); and (vi) any other documents or instruments that the General Partner deems necessary, appropriate, or advisable in connection with the Partnership business, including, but not limited to, executing promissory notes for Non-Contributing Partners pursuant to Section 7.4. 13.2. Power Declared Irrevocable. The power of attorney set forth in Section 13.1 is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and not be affected by the subsequent death, dissolution,Bankruptcy,disability, incapacity,or mental incompetence of a Partner and shall extend to such Partner's heirs, successors, and assigns. Each Partner hereby agrees to be bound by any representations made by the General Partner and any such successors thereto, acting in good faith, pursuant to such power of attorney; and each Partner hereby waives any and all defenses that may be available to contest, negate, or disaffirm the action of the General Partner and any such successors thereto,taken in good faith,under such power of attorney. AGREEMENT OF LIMITED PARTNERSHIP Page 20 of 23 877775.1 ARTICLE XIV. MISCELLANEOUS 14.1. Offset. In the event that any sum is payable to any Partner pursuant to this Agreement, any amounts owed by said Partner to the Partnership shall be deducted from said sum before payment to said Partner. 14.2. Arbitration. Any dispute arising under this Agreement shall be resolved through binding arbitration in San Antonio, Bexar County, Texas in accordance with the rules and regulations of the American Arbitration Association. The costs of an unsuccessful arbitration action shall be charged against the complainant. Attorneys' fees shall be awarded at the discretion of the arbitrator. The decision rendered by the arbitrator shall be (i) final and binding on all parties; (ii)non-appealable; and (iii) enforceable through any court of competent jurisdiction. 14.3. Notices. All notices or requests or approvals provided for or permitted to be given pursuant to this Agreement must be in writing and may be given by (i) depositing same in the United States mail, addressed to the Partner to be notified, postpaid, and registered or certified with return receipt requested, (ii)prepaid telegram,(iii) delivering such notice in person to such Partner, or(iv) facsimile, provided such original instrument is mailed in accordance with clause (i) of this sentence. Notices shall conclusively be deemed for all purposes of the Agreement to have been received and to be effective (i) if mailed in accordance with the provisions of the immediately preceding sentence, upon the expiration of five business days after its deposit in the mail, (ii) if sent by prepaid telegram, upon the expiration of two business days after its transmission, and (iii) if personally delivered or faxed, upon the actual receipt of such notice by the Partner to be notified. For purposes of notice, the address of each Partner shall be the address specified for such Partner in Exhibits 1 and 2. Each Partner may change his or her address for notice by the giving of thirty days' notice thereof to the General Partner in the manner hereinabove stated. 14.4. Entire Agreement. This Agreement constitutes the entire agreement of the Partners relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written. 14.5. Effect of Waiver of Consent. No waiver or consent, express or implied, by any Partner to or of any breach or default by any Partner in the performance by such Partner of his or her obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such Partner of the same or any other obligations of such Partner hereunder. 14.6. Amendment or Modification. This Agreement may be amended or modified from time to time by a vote of the General Partner and the Limited Partners. Each such amendment shall be reduced to writing. 14.7. Binding Effect. Subject to the restrictions on transfers and encumbrances set forth herein, this Agreement shall be binding upon and shall inure to the benefit of the Partners and their respective heirs, legal representatives, successors,and permitted assigns. AGREEMENT OF LIMITED PARTNERSHIP Page 21 of 23 877775.1 14.8. Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all Partners had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. 14.9. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance shall be held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 14.10. Headings. The headings in this Agreement are inserted for convenience and identification only and are not intended to describe, interpret,define,or limit the scope,extent,or intent of this Agreement or any provision hereof. 14.11. Terminology. Whenever the context requires, the gender of all words used in this Agreement shall include the masculine, feminine, and neuter, and the number of all words shall include the singular and the plural. All references to Section and Article numbers refer to Sections and Articles in this Agreement. a 14.12. Additional Documents. In connection with this Agreement, as well as all transactions contemplated by this Agreement, each Partner hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out, and perform all of the terms, provisions, and conditions of this Agreement and all such transactions. 14.13. Waiver of Certain Rights. Each Partner irrevocably waives any right it might have to maintain any action for wind up of the Partnership(except as specifically provided to the contrary in Article XII) or to maintain any action for partition of the property of the Partnership. 14.14. Deemed Assent. The failure of a Limited Partner to respond, within the response period set forth in the request in question (which response period shall not be less than 14 days nor more than 30 days from the date on which the Limited Partner in question is deemed to have received such request pursuant to Section 14.3),either in the affirmative or in the negative to any request it receives from the General Partner relating to a proposed act in respect of which such Limited Partner is entitled to vote pursuant to this Agreement shall conclusively be deemed for all purposes to be a vote by such Limited Partner in favor of the act proposed by the General Partner. 14.15. Spouses' Community Interest Subject to Agreement, The respective spouses of the Partners join in the execution of this Agreement to evidence that the respective community interests of each, if any, in and to any of the Partner's Ownership Interests is subject to the terms and provisions of this Agreement in all respects as if each of such spouses was a Partner hereunder with respect to such community interest. Any option to purchase a Partner's Ownership Interest pursuant to this Agreement shall include any interest therein owned by the spouse of such Partner. 14.16. Exhibits and Schedules. Any reference made in this Agreement to an Exhibit or Schedule is a reference to an Exhibit or Schedule of this Agreement. AGREEMENT OF LIMITED PARTNERSHIP Page 22 of 23 877775.1 IN WITNESS WHEREOF, the General Partner and the Limited Partner have executed this Agreement effective as of the Effective Date. GENERAL PARTNER: 5DV ENTERPRISES,L.L.C. By: ANN MARIE ALLEN, Manager LIMITED PARTNER: MARY A3 TER ELSON. AGREEMENT OF LIMITED PARTNERSHIP Page 23 of 23 877775.1 EXHIBIT 2 LIMITED PARTNER MARY BARTER NELSON Initial Capital Contributions Percentage Interest Address: 337 Bobwhite Lane 1. One-half(%) undivided interest % New Braunfels, Texas 78132 in 715.18 acres of real property located in the State of Montana valued at $ million and more specifically described on Exhibit 4 attached hereto. 2. One-half (%) interest in ranch accounts No. 58162020 at PrimeVest Financial Services, and Account No. 94151 at First Security Bank, said one-half interest in both accounts being equal to approximately$61,700. AGREEMENT OF LIMITED PARTNERSHIP Exhibit 2 877775.1 EXHIBIT 3 ADDITIONAL LIMITED PARTNERS AND ASSIGNEES Address: Initial Ownership Interest.- Signature: Address: Initial Ownership Interest: Signature: Address: Initial Ownership Interest: Signature: Address: Initial Ownership Interest: Signature: AGREEMENT OF LIMITED PARTNERSHIP Exhibit 3 877775.1 EXHIBIT 4 RANCH DESCRIPTION 715.18 acres of land,more or less, described as follows: Township 1 South, Range 5 East,M.P.M.: Section 33: All of the southwest quarter (SW/4) of Section Thirty-Three (33), Township i South, Range 5 East,M.P.M., containing 160 acres of land,more or less; Township 2 South, Range 5 East,M.P.M.: Section 3: All of the northwest quarter of the northwest quarter (NW/4 of NW/4), being called Lot 4 and containing 38.65 acres of land, more or less; and the southwest quarter of the northwest quarter (S W/4 of NW/4), and the West half of the southwest quarter (W/2 of SWA) of Section Three (3), Township 2 South, Range 5 East, M.P.M., also known as the west half of the west half (W/2 of W/2), less the road right-of-way, collectively, containing 158.65 acres of land,more or less; Section 4: All of the northeast quarter of the northeast quarter(NE/4 of NE/4) of Section Four(4), Township 2 South, Range 5 East, M.P.M.,being called Lot 1 and containing 38.7 acres of land,more or less; and All of the northwest quarter of the northeast quarter (NW/4 of NEA) of Section Four (4), Township 2 South, Range 5 East, M.P.M., being called Lot 2 and containing 39.03 acres of land,more or less; and All of the northeast quarter of the northwest quarter (NE/4 of NW/4) of Section Four (4), Township 2 South, Range 5 East, M.P.M., being called Lot 3 and containing 3 9.3 5 acres of land,more or less;and All of the northwest quarter of the northwest quarter (NW/4 of NW/4) of Section Four (4), Township 2 South, Range 5 East, M.P.M., being called Lot 4 and containing 39.68 acres,more or less; and All of the south half of the north half(S/2 of N/2) of Township 2 South, Range 5 East, M.P.M., containing 160 acres,more or less; Collectively, Lots 1, 2, 3, and 4 and the south half of the north half(S/2 of N/2)are also known as the north half(N/2), containing 316.76 acres of land,more or less. Section 5: All of the northeast quarter of the northeast quarter (NE/4 of NEA) of Section Five (5), Township 2 South, Range 5 East, M.P.M., being called Lot 1 and containing 39.77 acres of land, more or less; and the southeast quarter of the northeast quarter (SEA of NEA) of Section Five (5), Township 2 South, Range 5 East, M.P.M., also known as the east half of the northeast quarter (E/2 of NEA), collectively, containing 79.77 acres of land,more or less. AGREEMENT OF LIMITED PARTNERSHIP Exhibit 4 877775.1