Professional Documents
Culture Documents
ARTICLE I ORGANIZATION
1.01 Name ofPartnershiD. The name of the Partnership is "Davis, Shapiro, Lewit, Montone & Hayes, LLP." Such name shall be used at all times in connection with the business affairs of the Partnership. Each Partner agrees that the Partnership may, subject to any restrictions imposed by law or by rules of ethics, use his or her name in its firm name notwithstanding the death, retirement, or withdrawal of the Partner whose name is so used; provided, however, that if a Partner withdraws from the Partnership and thereafter either engages in the private practice of law or is employed with the government or any other organization, such former Partner's name may be used only if such use is legal, ethical and with his or her consent. If a Partner is expelled, the Partnership shall immediately delete such Partner's surname from the Partnership name unless after the expulsion a person with the same surname continues to be a Partner of the Partnership. 1.02 Organization of the Partnership. The Partnership is a New York limited liability partnership and is registered to transact business in California. The Partnership was formed for the purpose of engaging in the general practice of law and matters related and incidental to that practice under the laws of the States of New York and California, and the rules and regulations of the State Bar of New York and the State Bar of California (the "Business"). 1.03 Term of Partnership. The Partnership commenced on January 13, 1998 and shall continue until dissolved or terminated pursuant to this Agreement unless an earlier dissolution is provided for by New York law.
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1.04 Location of Partnership. The Partnership offices shall be located at the addresses set forth on Schedule 1.04, or at any other place as may be designated by the Partners. The Partnership's principal place of business is in New York City, New York. 1.05 Title to Partnership Property. All of the Partnership's right, title and interest in and to any tangible property, intangible property, real property, personal property and other assets acquired by the Partnership shall be held in the name of the Partnership. No Partner shall have an ownership interest in any property of the Partnership in his individual name and each Partner's interest in the Partnership shall be personal property for all purposes.
of Net Profits and any item in the nature of income or gain specially allocated to the Partner pursuant to this Agreement; and (b) a Partner's Capital Account shall be debited with the amount of money and the fair market value of any Partnership property distributed to the Partner (net of liabilities secured by such distributed property that the Partner either assumes or to which such property is subject), the amount of any unsecured liabilities of the Partner assumed by the Partnership, and the Partner's distributive share of Net Losses and any item in the nature of expenses or loss specially allocated to the Partner pursuant to the provisions of this Agreement. 2.03 Withdrawal of Capital. No portion of the Partnership capital may be withdrawn at any time without the prior written approval of the Partners. 2.04 Interest on Capital. No Partner shall be entitled to interest on contributions to the capital of the Partnership.
ARTICLE III ALLOCATIONS & DISTRIBUTIONS
3.01 Calculation of Net Profits and Net Losses. "Net Profits" and "Net Losses" means, for each fiscal year of the Company, an amount equal to the Company's taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (provided that for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss, and that such taxable income or loss shall also include any tax-exempt income of the Company and any expenditures of the Company that can neither be capitalized nor deducted). If the Company's taxable income or loss for such fiscal year, as adjusted in the manner provided above, is a positive amount, such amount shall be the Company's Net Profits for such fiscal year; and if a negative amount, such amount shall be the Company's Net Losses for such fiscal year. 3.02 Allocation of Net Profits and Net Losses.Profits for each fiscal year or Net portion thereof shall be allocated among the Partners pro rata in proportion to the aggregate amounts distributed to each Partner (including amounts that would have been distributed to each Partner but for Section 2.01 hereof, and excluding repayment of any Shortfall Loans) pursuant to Section 3.03 for such fiscal year or portion thereof; provided, however, that Net Profits in excess of such amounts distributed (or such amounts that would have been distributed) shall be Losses allocated among the Partners in the discretion of the Partners. Net for each fiscal year or portion thereof shall be allocated among the Partners as determined in the discretion of the Partners. 3.03 Net Cash Flow. The Partnership shall distribute Net Cash Flow (to the extent cash is available for distribution) to the Partners from time to time (but no less frequently than annually) in such amounts as shall be determined in the discretion of the Partners.
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(a) fees or compensation for services, including stock or equity and options to acquire stock or equity in corporations, partnerships, limited liability companies or other business entities or organizations, whether as a director, officer, fiduciary, consultant, broker, finder or otherwise and whether direct or indirect; (b) income received from activities actually engaged in for profit, compensation or gain requiring time which should or could have been devoted to the Partnership. 7.08 Outside Investments and Business. A Partner may not, unless the Partner to whom the investment or business opportunity is made available advises the other Partners, at least ten (10) business days prior to making such investment of the details thereof, and affords all Partners the opportunity to participate in the opportunity on the same terms and conditions, participate in investments, transactions or business ventures outside of the Partnership that are either (a) within the Entertainment Industry, or (b) not within the Entertainment Industry but involve products or services licensed, endorsed, sponsored, advertised, or otherwise promoted by any client of the Partnership, in each case other than passive, de minimus (less than 1% of the issued and outstanding shares on a fully diluted basis) interests in publicly traded companies. 7.09 Investment Opportunities From Clients. No Partner shall avail himself of any investment or business opportunity (whether or not in the Entertainment Industry) arising directly or indirectly from, or made available by, any client of the Partnership (other than from regular routine investment advice) unless the Partner to whom the opportunity is made available advises the other Partners, at least ten (10) business days prior to making such investment of the details thereof, and affords all Partners the opportunity to participate in the opportunity on the same terms and conditions. 7.10 Professional Corporations. No Partner shall transfer or assign such Partner's interest in the Partnership to a professional corporation or professional limited liability company without the consent of all of the other Partners, any such assignment without such consent to be void ab inUio.
8.02 Expulsion of a Partner. Any Partner may be expelled from the Partnership by the unanimous consent of the other Partners effective upon thirty (30) days' advance written notice; provided, however, that if a Partner is no longer licensed to practice law in any jurisdiction in which the Partnership practices law, such expulsion shall not require any advance notice.
8.03 Retirement of Partner. Any Partner may voluntarily retire from the Partnership upon (90) days' advance written notice to the other Partners of such Partner's intention to retire. Such retirement automatically becomes effective (90) days after the date of such notice. 8.04 Life Insurance/Death of a Partner. The Partners shall cause the Partnership to maintain a $1,000,000 life insurance policy for each Partner, the proceeds of which shall be payable to the designated beneficiary of such Partner, or, if no beneficiary is designated, to the estate of such deceased Partner. In the event the partnership fails to maintain such insurance, the Partnership shall pay to the estate of the deceased Partner the sum of $1,000,000 in sixty equal monthly installments (without interest), such payment to be treated as a guaranteed payment to such deceased Partner pursuant to section 736 of the Code. Furthermore, in the event of the death of a Partner, the Partnership shall pay the deceased Partner's estate or beneficiaries thereof an (25%) percent, times (Y) the cash receipts of the amount equal to the product of (X) twenty-five Partnership received after the death of the deceased Partner attributable to the sale, disposition or other realization of Originated Assets, within thirty (30) days of the date in which the cash receipts attributable to such Originated Assets are received by the Partnership. The Partnership shall assign to a Partner who withdrawals or is expelled from the Partnership the life insurance policy maintained by the Partnership for such Partner. 8.05 Payments Upon Disability, Expulsion, Resignation for Good Reason. In the event a Partner withdrawals for Good Reason, or is expelled for any reason (including Disability), then the Partnership shall pay the Departing Partner the following amounts: the product of (X) fifty (50%) percent, times (Y) the cash receipts of the (a) Partnership during a fiscal quarter attributable to Originated Receivables, less (without duplication) any drawings made by such Departing Partner with respect to such Originated Receivables, within thirty (30) days of the end of the fiscal quarter in which such Originated Receivables are paid to the Partnership; the product of (X) twenty-five (25%) percent, times (Y) the cash receipts (b) of the Partnership during a fiscal quarter attributable to Originated Business, within thirty (30) days of the end of the fiscal quarter in which the cash attributable to such Originated Business is received by the Partnership; provided, however, that no payments shall be made to the Departing 8.05(b)with respect to fiscal quarters beginning three (3) years Partner pursuant to this Section after the effective date of withdrawal or expulsion; and the product of (X) twenty-five (25%) percent, times (Y) the cash receipts (c) of the Partnership received after his departure that are attributable to the sale, disposition or other realization of Originated Assets, which shall be payable within thirty (30) days of the date in which the cash receipts attributable to such Originated Assets are received by the Partnership. 8.06 Payments Upon Resignation Without Good Reason. In the event a Partner withdrawals without Good Reason, then the Partnership shall pay the Departing Partner the following amounts:
(a) the product of (X) fifty (50%) percent, times (Y) the cash receipts of the Partnership during a fiscal quarter attributable to Originated Receivables, less (without duplication) any drawings made by such Departing Partner with respect to the Originated Receivables, within thirty (30) days of the end of the fiscal quarter to which such Originated Receivables are paid to the Partnership; the product of (X) ten (10%) percent, times (Y) the cash receipts of the (b) Partnership during a fiscal quarter attributable to Originated Business, within thirty (30) days of the end of the fiscal quarter in which the cash attributable to such Originated Business relates; provided, however, that no payments shall be made to the Departing Partner pursuant to this Section 8.06(b) with respect to fiscal quarters beginning three (3) years after the effective date of withdrawal or expulsion; provided, furthermore, that no payments shall be made to the Departing Partner pursuant to this Section 8.06(b) (or if any such payments have begun to be made, no further payments shall be made) if at any time the Departing Partner engages in the practice of law. the product of (X) twenty-five (25%) percent, times (Y) the cash receipts (c) of the Partnership received after his departure that are attributable to the sale, disposition or other realization of Originated Assets, within thirty (30) days of the date in which the cash receipts attributable to such Originated Assets are received by the Partnership. 8,07 Rights and Obligations of Departing Partner. Upon the effective date of a withdrawal, retirement or expulsion of a Partner for (a) any reason, or in the event that any Partner dies, such Partner shall cease to be a Partner of the Partnership (other than for purposes of winding up his partnership interest) and shall have no further right to receive any monies from the Partnership except as set forth in Section 8.05, Section 8.06, and this Section 8.07. Notwithstanding the foregoing, the withdrawal, retirement, expulsion or death of a Partner shall not affect such Partner's liability with respect to obligations Cash incurred prior to the effective date of such withdrawal, retirement, expulsion or death. Net Flow for the period ending on the effective date of the Departing Partner's death, retirement, withdrawal or expulsion from the Partnership shall be distributed to the Partners (including the Departing Partner) in such amounts as shall be determined in the discretion of the Partners (including the Departing Partner). The Departing Partner's allocation of Net Profits, if any, and Net Losses, if any, accruing prior to his termination shall be calculated by the Partners (including the Departing Partner) to the date of termination. Upon termination or withdrawal of a Partner for any reason, such Partner shall be entitled to a distribution of his capital account (determined after all allocation of Net Profits and Net Losses and distributions of Net Cash Flow through the date of termination), if any; provided, however, that at the option of the Partners, such capital account balance may be paid in monthly installments over a 36 month period commencing not more than 60 days after the effective date of termination or withdrawal. 8.08 Continuation of Partnership. The withdrawal, retirement, expulsion, or death of any Partner shall not dissolve the Partnership or affect the continuance of the Partnership Business, except as expressly provided in this Agreement. Except as otherwise provided in this Agreement, no Departing Partner's estate shall be entitled to or have any claim against the
Partnership or the remaining Partners for any payments. If the Partnership is dissolved before the full amount of payments due to such a Partner has been paid, the unpaid balance shall be paid in full before any distribution of Partnership assets may be made to the remaining Partners. 8.09 Dissolution. Upon the dissolution of the Partnership, all Partnership assets, including any lease for office space occupied by the Partnership but excluding any files or records pertaining to the affairs of the Partnership's clients, will be liquidated and the proceeds distributed in the manner specified in Section 71 of Article 8-B of the NYPL.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, (a) or any corresponding provisions of superseding federal revenue statute. "Departing Partner" means a Partner who dies, withdrawals, retires, or is expelled (b) (including on account of Disability) from the Partnership. "Disability" means the inability of the Partner to substantially perform his duties (c) hereunder for 180 consecutive days or 210 days in any consecutive 12-month period as a result of a physical or mental illness, as determined in good faith by a unanimous decision of the other Partners upon the advice of an independent physician reasonably acceptable to the Partnership and the affected Partner. "Entertainment Industry" means areas where the Partnership practices and its (d) clients generally perform services including, without limitation, music, motion picture, television, radio, literary, Internet, e-commerce, touring, merchandising or other related fields. "Good Reason" means, with respect to a Partner (the "Resigning Partner"), a (e) material breach of this Agreement by the Partnership or one or more of the other Partners, which shall include, but not be limited to, (i) the failure one or more of the other Partners to act in good faith in matters requiring the consent of the Partners, (ii) a material alteration in the nature of or diminution in the Resigning Partner's duties, responsibilities, and/or place of business, (iii) one or more of the other Partner's action or failure to act which would materially adversely affect the reputation, operations or financial condition of the Partnership or the Resigning Partner; (iv) a willful failure by one or more of the other Partners to perform such Partner's duties, except as a result of the Disability or death of the Partner; (v) one or more of the other Partner's theft, embezzlement, perpetration of fraud, or misappropriation of any tangible or intangible assets or property of the Partnership or any of its clients or attempted theft, embezzlement, perpetration of fraud, or misappropriation of any tangible or intangible assets or property of the Partnership or any of its clients, (vi) one or more of the other Partner's conviction of any felony or any crime involving moral turpitude or dishonesty; (vii) conduct by one or more of the other Partners that, based upon a good faith and reasonable factual investigation and determination by the Resigning
Partner, demonstrates gross unfitness to serve; or (viii) one or more of the other Partner's committing any act of legal malpractice, in each case for a period of ten (10) days after written demand for substantial performance is delivered by the Resigning Partner specifically identifying the manner in which the Resigning Partner believes that Partnership or one or more Partners has breached this Agreement. (f) "Loan" means any loan or any other financing facility obtained by the Partnership for Partnership purposes, other than any loan or any other financing facility obtained from a Partner. (g) "Majority-In-Interest of the Partners" means a numerical majority of the Partners.
"Net Cash Flow" means, with respect to any particular period, all cash receipts of (h) the Partnership (excluding capital contributions and the proceeds of any loan which are not used by the Partnership and thus available for distribution) during such month, plus cash available from any reduction in the amount of any reserves of the Partnership during such month, less the sum of the following to the extent made from such cash receipts or reserves: all cash expenditures of the Partnership made during such month (except (i) distributions and repayment of Shortfall Loans), including debt service and expenses and costs incurred in the acquisition, ownership, or management of the Partnership's property; and all funds set aside as reserves for salaries, contingencies, working capital, (ii) debt service, taxes, insurance or other anticipated costs or expenses incident to the conduct of the Partnership's business; Cash receipts of the Partnership shall include (i) fees, including referral and forwarding fees, for legal services rendered by a Partner or employee of the Partnership, and (ii) amounts received by any Partner or employee (other than income derived from personal assets), including, but not limited to, fees received as trustees, executors, administrators and from similar fiduciary positions, teaching salaries, lecture fees, fees as a director, income from writings and similar sums as well as any income earned by the Partnership from its income or investments. The Partners agree to deliver to the Partnership all such sums. "Originated Assets" means, with respect to a Departing Partner, investment or (i) other income producing assets (other than cash and accounts receivable), including interests in other business entities received (and vested) by the Partnership prior to his departure and attributable to business originated by such Departing Partner. "Originated Business" means, with respect to a Departing Partner, accounts (j) receivable accrued after his departure but attributable to business originated by such Departing Partner.
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(k) "Originated Receivables" means, with respect to a Departing Partner, accounts receivable accrued but unpaid prior to his departure and attributable to business originated by such Departing Partner. (1) "Percentage Interest" shall mean the percentage equivalent of one (1) divided by the number of Partners. 9.02 Additional Partners. Upon the unanimous consent of the Partners, the Partnership may admit an additional Partner(s) and fix the capital contributions, if any, to be made and the participation percentage in Net Profits and Net Losses of any additional Partners. Each Partner must relinquish a pro rata proportion of his allocation of Net Profits and Net Losses of the Partnership to any additional Partner(s), unless otherwise determined by unanimous consent of the Partners. However, before being admitted, each additional Partner must first agree in writing to be bound by the provisions of this Agreement. The 9.03 Guarantee of Loans and Leases: Indemnification. Partners hereby acknowledge that, as of the date of this Agreement, Frederic Davis ("Davis") is the primary obligor under a line of credit with Bank of New York (the "Line of Credit), and under a lease for the premises at 689 Fifth Avenue, New York, New York (the "Lease"). Each Partner agrees to become jointly and severally obligated on such Line of Credit and Lease, or, alternatively, in the sole discretion of Davis, each Partner shall indemnify Frederic Davis and hold him harmless from and against 25% of any all of Davis' losses, claims, damages, liabilities, expenses (including legal and other professional fees and disbursements), judgments, settlements, demands, costs, causes of action and other amounts arising from any and all claims, demands, actions, suits or proceedings, actual or threatened, in connection with the Line of Credit or Lease.. 9,04 Notices. Any notices permitted or required to be given by law or by this Agreement must be in writing and will be deemed duly given when personally delivered to the Partner to whom they are addressed or, in lieu of personal delivery, when deposited in the United States mail, first-class postage prepaid, certified, addressed to the Partner at the office of the Partnership.
9.05 Amendments. No amendment to this Agreement is valid unless made in writing and signed by all of the Partners.
9.06 Summary of Limited Liability. This Partnership has fulfilled all requirements necessary to secure its status as a limited liability partnership in the State of New York. Notwithstanding any other provision of this Agreement, nothing in this Agreement is intended to render the Partners liable for Partnership obligations for which they are not personally liable under Section 26 of Article 8-B of the NYPL. 9.07 Arbitration. Any disputes arising out of or relating to this Agreement shall be settled by private arbitration. The disputing partners shall each select one arbitrator and the two so selected shall select the third arbitrator. If no such agreement can be reached then either party may commence an arbitration before and in accordance with the rules of the American
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Arbitration Association in New York, New York. Judgment upon any award may be entered by any court having jurisdiction. Except to the extent necessary to obtain enforcement of any award, the arbitration proceedings shall be treated as privileged and confidential by all Partners. 9.08 Applicable Laws. The laws of the State of New York shall apply to any legal questions that arise concerning the interpretation of this Agreement, without regard to any laws that would apply the laws of another state or locality. 9.09 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute the same instrument. 9.10 Binding on Heirs. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators and legal representatives of the Partners.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above.
SCHEDULE 1.04 689 Fifth Avenue, New York, New York 150 S. Rodeo Drive, Suite 200, Beverly Hills, California