Document:

ex10_1.htm

    
      

       

      
        

        

      

      AMENDED
STRATEGIC INVESTMENT PROGRAM CONTRACT

       

      

       

      

       

      BETWEEN

       

      

       

      

       

      MULTNOMAH
COUNTY, OREGON,

       

      

       

      CITY OF
GRESHAM, OREGON,

       

      

       

      AND

       

      

       

      MICROCHIP
TECHNOLOGY INCORPORATED

       

      

       

      

       

      June 8,
2009

       

       

       

      
         

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE OF
CONTENTS

       

      

      
        	
                I.

              	 
      	
                RECITALS.

                 

              	
                1

              
	
                II.

              	 
      	
                LIMITATIONS
      ON QUALIFICATION OF PROJECT FOR EXEMPTION; FUTURE EXEMPTIONS.

                 

              	
                2

              
	 
      	
                A.

              	
                Limitations.

                 

              	
                2

              
	 
      	
                B.

              	
                Schedule
      Shows Maximum Benefits; Exemption Approved under Extraordinary
      Circumstances, Future Exemptions.

                 

              	
                3

              
	 
      	
                C.

              	
                Verification
      of Factual Assumptions.

                 

              	
                3

              
	
                III.

              	 
      	
                STATUTORY
      OBLIGATIONS OF MCHP.

                 

              	
                3

              
	 
      	
                A.

              	
                Payment
      of CSF.

                 

              	
                3

              
	 
      	
                B.

              	
                First
      Source Agreement.

                 

              	
                4

              
	
                IV.

              	 
      	
                ADDITIONAL
      OBLIGATIONS OF MCHP TO MEET COUNTY SIP STANDARDS AND GOALS.

                 

              	
                5

              
	 
      	
                A.

              	
                Hiring,
      Wages, Benefits,
      Training and Retention.

                 

              	
                5

              
	 
      	
                B.

              	
                Transportation.

                 

              	
                10

              
	 
      	
                C.

              	
                Infrastructure
      and Public Services.

                 

              	
                10

              
	 
      	
                D.

              	
                Environmental
      Protection.

                 

              	
                10

              
	 
      	
                E.

              	
                Job
      Training.

                 

              	
                11

              
	 
      	
                F.

              	
                Procure
      Locally Produced or Sold Goods and Services.

                 

              	
                12

              
	
                V.

              	 
      	
                MCHP
      REPORTING REQUIREMENTS.

                 

              	
                13

              
	 
      	
                A.

              	
                MCHP
      to Report Contract Compliance to County.

                 

              	
                13

              
	 
      	
                B.

              	
                Cooperation
      With Oregon Department of Revenue.

                 

              	
                15

              
	
                VI.

              	 
      	
                OBLIGATIONS
      OF COUNTY AND CITY.

                 

              	
                16

              
	 
      	
                A.

              	
                Findings.

                 

              	
                16

              
	 
      	
                B.

              	
                The
      County and City Agree as Follows:

                 

              	
                16

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                VII.

              	 
      	
                BREACH;
      DEFAULT; REMEDIES OF THE COUNTY.

                 

              	
                16

              
	 
      	
                A.

              	
                Dispute
      Resolution Procedure.

                 

              	
                16

              
	 
      	
                B.

              	
                Force
      Majeure.

                 

              	
                19

              
	 
      	
                C.

              	
                Failure
      to Comply with Numerically Ascertainable Terms.

                 

              	
                19

              
	 
      	
                D.

              	
                Sanctions.

                 

              	
                19

              
	 
      	
                E.

              	
                Limitations.

                 

              	
                21

              
	 
      	
                F.

              	
                Allocation
      of Funds Paid by MCHP for Failure to Comply with Agreement.

                 

              	
                21

              
	
                VIII.

              	 
      	
                REMEDIES
      OF MCHP.

                 

              	
                21

              
	
                IX.

              	 
      	
                TERM
      OF AGREEMENT.

                 

              	
                21

              
	
                X.

              	 
      	
                MISCELLANEOUS
      TERMS.

                 

              	
                22

              
	 
      	
                A.

              	
                Discrimination.

                 

              	
                22

              
	 
      	
                B.

              	
                Public
      Contracts.

                 

              	
                22

              
	 
      	
                C.

              	
                Governing
      Law.

                 

              	
                22

              
	 
      	
                D.

              	
                Complete
      Agreement.

                 

              	
                22

              
	 
      	
                E.

              	
                CSF
      Payments Not Property Taxes.

                 

              	
                22

              
	 
      	
                F.

              	
                Compliance
      Relevant to Future Approvals.

                 

              	
                23

              
	 
      	
                G.

              	
                Lease
      or Sublease of the Premises.

                 

              	
                23

              
	 
      	
                H.

              	
                Successors
      and Assigns.

                 

              	
                23

              
	 
      	
                I.

              	
                Good
      Faith Contests Permitted.

                 

              	
                23

              
	 
      	
                J.

              	
                Validity
      of County Obligations.

                 

              	
                23

              
	 
      	
                K.

              	
                Counterparts.

                 

              	
                23

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      City of Gresham Contract No. 1909

      Amendment No. 1

       

      AMENDED
AGREEMENT

       

      This
Amended Agreement is by and between Multnomah County (the
“County”), the City of Gresham (the “City”) and Microchip Technology
Incorporated (“MCHP”), 2355 West Chandler Blvd., Chandler, Arizona
85224-6199.

       

      I.     RECITALS.

       

      
        	
                 
      

              	
                A.

              	
                MCHP
      has requested that the County approve an extension of the term of the
      August 15, 2002, Strategic Investment Program Agreement, providing a
      partial property tax exemption for its facility in Gresham, Oregon, from
      seven (7) years to fifteen (15)
years.

              

      

       

      
        	
                 
      

              	
                B.

              	
                ORS
      285B.380 to 285B.392 (2001) describes the process in place in 2002 for
      obtaining the Strategic Investment Program (“SIP”) partial tax exemption
      which is described in ORS 307.123.  The Strategic Investment
      Program exemption requires the owner to pay property tax on the first one
      hundred million dollars ($100,000,000) of value of the facilities which
      receives the exemption; that taxable base increases each year by three
      percent.  The exemption is temporary, lasting no longer than 15
      years.

              

      

       

      
        	
                 
      

              	
                C.

              	
                On,
      August 23, 2002, by Resolution (attached as Exhibit 1), the Oregon
      Economic and Community Development Commission, at the request of the
      Multnomah Board of County Commissioners, approved the MCHP facilities as
      an “eligible project.”

              

      

       

      
        	
                 
      

              	
                D.

              	
                MCHP
      seeks an extension of the original seven (7) year term of the Agreement to
      fifteen (15) years because it is contemplating additional investment in
      equipment at the facilities.  The partial tax exemption of ORS
      307.123 would provide an economic benefit to the company, which would
      allow it to retain employees and, perhaps, hire additional
      employees.  The capped total assessed value of the Project would
      remain at $490 million.  Without an extension of the SIP partial
      tax exemption, MCHP would not be able to make the additional investments
      in improvements at the Gresham, OR Project, and it is in danger of
      becoming an obsolete facility.

              

      

       

      
        	
                 
      

              	
                E.

              	
                The
      County and the City have approved the terms of this Agreement, which
      contains the amended provisions relating to the SIP and the partial tax
      exemption for the Project.

              

      

       

      
        	
                 
      

              	
                F.

              	
                MCHP
      intends to remain an exemplary corporate citizen.  The County
      and City understand that, to be an exemplary corporate citizen, MCHP must
      be able to operate the Project in a competitive manner responsive to
      semiconductor industry conditions.  This Agreement therefore
      adjusts or conditions certain of MCHP’s obligations upon conditions in the
      semiconductor industry, demand for product produced at the Project, and
      other factors which are beyond MCHP’s control.  The parties
      acknowledge that, if doubt arises about the nature or extent of MCHP’s
      obligations under this Agreement, this Agreement should be interpreted in
      a manner that allows MCHP to operate the Project competitively while
      meeting the County’s goals.

              

      

       

       

      
        
          
          

        

        
          Amended Strategic Investment
Program Contract - 1 of 24

          
            

          

        

        
          
          

        

      

       

      
        Now
therefore, in consideration of the following mutual promises, the parties agree
as follows:

         

      

      
        
        

      

      II.           LIMITATIONS
ON QUALIFICATION OF PROJECT FOR EXEMPTION; FUTURE EXEMPTIONS.

       

      A.           Limitations.

       

      The
Project consists of the purchase, improvement and equipping of FMI’s facilities
in Gresham, Oregon.  Only $490 million of assessed value of the
Project will be eligible for the exemption, and any assessed value at the
Project during the term of this Agreement which exceeds $490 million shall not
be eligible for the SIP exemption.  The Project shall receive the SIP
exemption for fifteen fiscal years, commencing with County fiscal year 2003-04,
and this Agreement and MCHP’s SIP partial tax exemption shall terminate on June
30, 2018.

      

      The
maximum investments which MCHP expects to make, and the tax years in which those
investments will appear on the tax rolls, are estimated to be:

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          	
                                                                                                                                                  County
      Tax Year

                                                                                                                                                	 	
                                                                                                                                                  7/1/10-6/30/11

                                                                                                                                                	 	 	
                                                                                                                                                  7/1/11-6/30/12

                                                                                                                                                	 	 	
                                                                                                                                                  7/1/12-6/30/13

                                                                                                                                                	 	 	
                                                                                                                                                  7/1/13-6/30/14

                                                                                                                                                	 
	
                                                                                                                                                  Lien
      Date

                                                                                                                                                	 	
                                                                                                                                                  1/1/2010

                                                                                                                                                	 	 	
                                                                                                                                                  1/1/2011

                                                                                                                                                	 	 	
                                                                                                                                                  1/1/2012

                                                                                                                                                	 	 	
                                                                                                                                                  1/1/2013

                                                                                                                                                	 
	
                                                                                                                                                   

                                                                                                                                                  Initial
      Investment

                                                                                                                                                	 	 	180,000,000	 	 	 	180,000,000	 	 	 	180,000,000	 	 	 	180,000,000	 
	
                                                                                                                                                  Facilities/Site
      Work

                                                                                                                                                	 	 	8,421,593	 	 	 	11,421,593	 	 	 	14,421,593	 	 	 	17,421,593	 
	
                                                                                                                                                  Manufacturing
      Equipment

                                                                                                                                                	 	 	52,529,557	 	 	 	65,529,557	 	 	 	78,529,557	 	 	 	91,529,557	 
	
                                                                                                                                                  Total
      Value of Assets

                                                                                                                                                	 	 	240,951,150	 	 	 	256,951,150	 	 	 	272,951,150	 	 	 	288,845,444	 
	
                                                                                                                                                  Estimated
      Accumulated

                                                                                                                                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                                                                                  Depreciation

                                                                                                                                                	 	 	(11,857,711	)	 	 	(19,762,281	)	 	 	(30,178,279	)	 	 	(43,105,706	)
	
                                                                                                                                                  Total
      Assessed Value

                                                                                                                                                	 	 	229,093,439	 	 	 	237,188,869	 	 	 	242,772,871	 	 	 	245,845,444	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                                                                                   

                                                                                                                                                  SIP
      Floor

                                                                                                                                                	 	 	122,987,387	 	 	 	126,677,008	 	 	 	130,477,318	 	 	 	134,391,638	 
	
                                                                                                                                                  Property
      Taxes

                                                                                                                                                	 	 	1,952,585	 	 	 	2,011,162	 	 	 	2,071,497	 	 	 	2,133,642	 
	
                                                                                                                                                  CSF

                                                                                                                                                	 	 	421,143	 	 	 	438,630	 	 	 	445,709	 	 	 	442,369	 
	
                                                                                                                                                  Total
      Payments by MCHP

                                                                                                                                                	 	 	2,373,728	 	 	 	2,449,792	 	 	 	2,517,207	 	 	 	2,576,010	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                                                                                  SIP
      Benefits to MCHP

                                                                                                                                                	 	 	1,263,429	 	 	 	1,315,890	 	 	 	1,337,128	 	 	 	1,327,106	 
	
                                                                                                                                                   
      

                                                                                                                                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                                                                                  County
      Tax Year

                                                                                                                                                	 	
                                                                                                                                                  7/1/14-6/30/15

                                                                                                                                                	 	 	
                                                                                                                                                  7/1/15-6/30/16

                                                                                                                                                	 	 	
                                                                                                                                                  7/1/16-6/30/17

                                                                                                                                                	 	 	
                                                                                                                                                  7/1/17-6/30/18

                                                                                                                                                	 
	
                                                                                                                                                  Lien
      Date

                                                                                                                                                	 	
                                                                                                                                                  1/1/2014

                                                                                                                                                	 	 	
                                                                                                                                                  1/1/2015

                                                                                                                                                	 	 	
                                                                                                                                                  1/1/2016

                                                                                                                                                	 	 	
                                                                                                                                                  1/1/2017

                                                                                                                                                	 
	
                                                                                                                                                   

                                                                                                                                                  Initial
      Investment

                                                                                                                                                	 	 	180,000,000	 	 	 	180,000,000	 	 	 	180,000,000	 	 	 	180,000,000	 
	
                                                                                                                                                  Facilities/Site
      Work

                                                                                                                                                	 	 	20,521,593	 	 	 	23,421,593	 	 	 	26,421,593	 	 	 	29,421,593	 
	
                                                                                                                                                  Manufacturing
      Equipment

                                                                                                                                                	 	 	104,529,557	 	 	 	117,529,557	 	 	 	130,529,557	 	 	 	143,529,557	 
	
                                                                                                                                                  Total
      Value of Assets

                                                                                                                                                	 	 	304,951,150	 	 	 	320,951,150	 	 	 	336,951,150	 	 	 	352,951,150	 
	
                                                                                                                                                  Estimated
      Accumulated

                                                                                                                                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                                                                                  Depreciation

                                                                                                                                                	 	 	(58,544,562	)	 	 	(75,234,846	)	 	 	(93,176,558	)	 	 	(106,019,416	)
	
                                                                                                                                                  Total
      Assessed Value

                                                                                                                                                	 	 	246,406,588	 	 	 	245,716,304	 	 	 	243,774,592	 	 	 	246,931,734	 
	
                                                                                                                                                   

                                                                                                                                                  SIP
      Floor

                                                                                                                                                	 	 	138,423,387	 	 	 	142,576,089	 	 	 	146,853,371	 	 	 	151,258,972	 
	
                                                                                                                                                  Property
      Taxes

                                                                                                                                                	 	 	2,197,651	 	 	 	2,263,581	 	 	 	2,331,488	 	 	 	2,401,433	 
	
                                                                                                                                                  CSF

                                                                                                                                                	 	 	428,593	 	 	 	409,371	 	 	 	384,688	 	 	 	379,732	 
	
                                                                                                                                                  Total
      Payments by MCHP

                                                                                                                                                	 	 	2,626,245	 	 	 	2,672,952	 	 	 	2,716,176	 	 	 	2,781,165	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                                                                                  SIP
      Benefits to MCHP

                                                                                                                                                	 	 	1,285,780	 	 	 	1,228,114	 	 	 	1,154,063	 	 	 	1,139,197	 

                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
 

      
        
          
          

        

        
          Amended Strategic Investment
Program Contract - 2 of 24

          
            

          

        

        
          
          

        

      

       

      
        	
                B.

              	
                Schedule
      Shows Maximum Benefits; Exemption Approved under Extraordinary
      Circumstances, Future Exemptions.

              

      

       

      
        	
                 
      

              	
                1.

              	
                This
      schedule of investments is an estimate of the maximum level of investment
      which MCHP currently expects it will make at the
      Project.  Actual investments at the Project may be substantially
      less, reducing the associated SIP benefit to MCHP.
  

              

      

       

      
        	
                 
      

              	
                2.

              	
                This
      SIP exemption for MCHP is being approved under extraordinary
      circumstances: the economy has been in recession, jobs have been lost.
      MCHP is asking for an extension of the SIP agreement to meet its eight
      year planning horizon.  MCHP may make significant improvements
      at the Project site which would qualify for the SIP partial tax
      exemption.

              

      

       

      C.           Verification
of Factual Assumptions.

       

      
        	
                 
      

              	
                1.

              	
                MCHP
      has agreed to pay the County a SIP processing fee which is equal to the
      County’s costs for contract preparation, but does not exceed
      $5000.

              

      

       

      This sum
shall be paid to the County within six months following the approval of the
Amended SIP Agreement by the Board of County Commissioners.

       

      III.           STATUTORY
OBLIGATIONS OF MCHP.

       

      A.           Payment
of CSF.

       

      1.         Amount.

       

      For each
year in which MCHP receives the Property Tax Abatement, MCHP shall pay to the
County a Community Service Fee (CSF), as provided by ORS 285C.609(4)(b)(B),
equal to 25 percent of the property taxes abated in such tax year, but not
exceeding $2 million.

       

      2.         By
November 15.

       

      The CSF
payment shall be made to the County Finance Manager no later than November 15 of
each year, commencing with November 15, 2003.  However, MCHP shall not
be required to pay the CSF before ten business days after MCHP receives the
invoice described in Section III.A.3, below.  

       

       

      
        
          
          

        

        
          Amended Strategic Investment
Program Contract - 3 of 24

          
            

          

        

        
          
          

        

      

       

      Payment
shall be made based on an invoice submitted by the County to MCHP in such form
and according to such method as shall be agreed to by the parties prior to
November
15 of the tax year in which the Project is assessed and taxed. The payment shall
be sent to:

       

      

      
        
          	 
      	
                  Mindy
      Harris

                
	
                  Position
      Title:

                	
                  Chief
      Financial Officer

                
	
                  Address:

                	
                  Multnomah
      County, Oregon

                
	 
      	
                  501
      SE Hawthorne Blvd, 4th
      Floor

                
	 
      	
                  PO
      Box 14700

                
	 
      	
                  Portland,
      Oregon 97293

                

        

      

       

      3.         Statement
30 Days in Advance

       

      The
County shall provide MCHP with a statement of the CSF due no less than 30 days
prior to the due date.

       

      4.         Adjustments

       

      If the
assessed value of the Project is adjusted after November 15 of any tax year in
such a manner that property taxes due from MCHP for that year are reduced, and
the reduction reduces the CSF for that year, the County shall pay the amount of
the reduction to MCHP, together with interest at the rate established by law for
tax refunds (ORS 311.505(2)) from the date of payment of the CSF.  If
the County does not pay the amount by November 10 of the following year, MCHP
may withhold the unpaid amount, plus interest as provided in this Section, from
subsequent CSF payments due from MCHP under this Agreement.  If the
remaining CSF payments due from MCHP are less than the amount owed by the County
to MCHP under this Section, the County shall pay the amount due to MCHP not
later than December 15 of the year following the year in which the reduction
occurs.  An appeal of the assessed value does not defer the payment of
the CSF.  The CSF shall be paid as set out in paragraph 2
above.  Any adjustments based on the outcome of the appeal shall be in
accord with this paragraph.

       

      5.         Nonpayment
of CSF.

       

      In
compliance with ORS 307.123(b)(6), if MCHP fails to pay the CSF fee required by
ORS 285C.609(4)(b)(B), by the end of the tax year in which it is due, the tax
exemption shall be revoked and the property shall be fully taxable for the
following tax year for which the fee remains unpaid.  It is agreed
that MCHP shall pay the CSF for a total of fifteen (15) years.

       

      B.           First
Source Agreement.

       

      To target
the County’s unemployed and underemployed population and comply with the
requirements of ORS 285C.606(5), MCHP entered into an Exclusive Full-Service
First Source Hiring Agreement (FSA), with the Multnomah County or its designated
contact agency(s) as defined
in OAR 123-070-1100.  MCHP will execute the template FSA adopted by the
County and the City for the Gresham Strategic Investment Zone # 1.  An
executed copy of the new FSA is attached to this Agreement as Exhibit
2.  Compliance with the terms of the new FSA is a requirement of this
agreement.

       

       

      
        
          
          

        

        
          Amended Strategic Investment
Program Contract - 4 of 24

          
            

          

        

        
          
          

        

      

       

      
        	
                IV.

              	
                ADDITIONAL
      OBLIGATIONS OF MCHP TO MEET COUNTY SIP STANDARDS AND
  GOALS.

              

      

       

      In
consideration of the County’s and City’s actions to approve a SIP exemption for
the Project, MCHP agrees to fill the role of an exemplary corporate citizen in
Multnomah County as provided in this Agreement.  Such a citizen helps
prepare the unemployed and underemployed, including the emerging workforce from
local high schools, community colleges, and universities, for entry level jobs
which provide career paths, family wages, and excellent benefits, including
childcare referrals and negotiations of group rates, which help assure the
success of the employee in those jobs.  An exemplary corporate citizen
also leads the business community by progressing toward a goal to have no
negative impact on the environment through state-of-the-art transportation and
environmental programs.  And, an exemplary corporate citizen
positively affects the educational and economic well-being of the community in
which it resides by directing its efforts and resources to the benefit of its
community’s citizens and businesses.  By meeting the performance
requirements specified in this Agreement, MCHP will meet its responsibilities as
an exemplary corporate citizen.

       

      A.           Hiring,
Wages, Benefits, Training and Retention.

       

      County
goals:

       

      To create
long term jobs with family wages, benefits and working conditions for County
residents or creation of a full spectrum of jobs for residents of Multnomah
County who are unemployed or underemployed, with a clear career track from
entry-level jobs to family wage jobs.

       

      To
provide educational opportunities to enhance upward mobility for both technical
and management roles.

       

      To
minimize the number of contracted on-site jobs that pay low wages.

       

      MCHP
acknowledges these County goals and agrees to take the following actions in
support of those goals:

       

      1.         Local
Hiring.

       

      MCHP’s
goal is to hire many local candidates.  MCHP will focus on previous
employees who have directly related semiconductor fabrication
experience.  Once MCHP has exhausted those rehiring possibilities,
MCHP will work with WorkSystems, Inc. or other provider appointed by the County,
to find more qualified candidates.

       

       

      
        
          
          

        

        
          Amended Strategic Investment
Program Contract - 5 of 24

          
            

          

        

        
          
          

        

      

       

      2.         Retention
of Existing Jobs and New Hires.

       

      a.         Number
of Jobs.

       

      MCHP
currently projects that, at a minimum, the following jobs will be retained or
created at the Project (totals refer to the total number of jobs at the Project
including jobs retained and jobs created) in the following calendar years:

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          Total

                                        	
                                          Annual
      Salary Range ($K)

                                        	
                                          CY09

                                        	
                                          CY10

                                        	
                                          CY11

                                        	
                                          CY12

                                        	
                                          CY13

                                        
	
                                          Engineering

                                        	
                                          55.3
      – 88.8

                                        	
                                          40

                                        	
                                          40

                                        	
                                          42

                                        	
                                          44

                                        	
                                          46

                                        
	
                                          Eng
      Techs

                                        	
                                          27.2
      – 53.1

                                        	
                                          58

                                        	
                                          58

                                        	
                                          62

                                        	
                                          65

                                        	
                                          67

                                        
	
                                          MFG

                                        	
                                          19.2
      – 33.8

                                        	
                                          148

                                        	
                                          148

                                        	
                                          160

                                        	
                                          171

                                        	
                                          183

                                        
	
                                          Mgmt/Admin

                                        	
                                          54.2
      – 102.0

                                        	
                                          35

                                        	
                                          35

                                        	
                                          35

                                        	
                                          35

                                        	
                                          38

                                        
	
                                          Facilities

                                        	
                                          38.2
      – 69.7

                                        	
                                          34

                                        	
                                          34

                                        	
                                          34

                                        	
                                          34

                                        	
                                          35

                                        
	
                                          Doc
      Control

                                        	
                                          26.4
      – 45.6

                                        	
                                          2

                                        	
                                          2

                                        	
                                          2

                                        	
                                          2

                                        	
                                          2

                                        
	
                                          Materials

                                        	
                                          27.0
      – 36.7

                                        	
                                          13

                                        	
                                          13

                                        	
                                          13

                                        	
                                          14

                                        	
                                          14

                                        
	 	 	 	 	 	 	 
	
                                          TOTAL

                                        	 
      	
                                          330

                                        	
                                          330

                                        	
                                          348

                                        	
                                          365

                                        	
                                          385

                                        
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                          Total

                                        	
                                          Annual
      Salary Range ($K)

                                        	
                                          CY14

                                        	
                                          CY15

                                        	
                                          CY16

                                        	
                                          CY17

                                        	
                                          CY18

                                        
	
                                          Engineering

                                        	
                                          55.3
      – 88.8

                                        	
                                          48

                                        	
                                          48

                                        	
                                          51

                                        	
                                          53

                                        	
                                          53

                                        
	
                                          Eng
      Techs

                                        	
                                          27.2
      – 53.1

                                        	
                                          70

                                        	
                                          72

                                        	
                                          73

                                        	
                                          74

                                        	
                                          77

                                        
	
                                          MFG

                                        	
                                          19.2
      – 33.8

                                        	
                                          193

                                        	
                                          213

                                        	
                                          231

                                        	
                                          249

                                        	
                                          274

                                        
	
                                          Mgmt/Admin

                                        	
                                          54.2
      – 102.0

                                        	
                                          41

                                        	
                                          41

                                        	
                                          41

                                        	
                                          42

                                        	
                                          42

                                        
	
                                          Facilities

                                        	
                                          38.2
      – 69.7

                                        	
                                          36

                                        	
                                          36

                                        	
                                          36

                                        	
                                          36

                                        	
                                          36

                                        
	
                                          Doc
      Control

                                        	
                                          26.4
      – 45.6

                                        	
                                          2

                                        	
                                          3

                                        	
                                          3

                                        	
                                          3

                                        	
                                          3

                                        
	
                                          Materials

                                        	
                                          27.0
      – 36.7

                                        	
                                          15

                                        	
                                          15

                                        	
                                          15

                                        	
                                          15

                                        	
                                          15

                                        
	 	 	 	 	 	 	 
	
                                          TOTAL

                                        	 
      	
                                          405

                                        	
                                          428

                                        	
                                          450

                                        	
                                          472

                                        	
                                          500

                                        

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

            
The
preceding table shows the minimum number of jobs which MCHP expects it will
create at the Project.  If economic conditions support investments in
the Project at the level shown in Section II.A, it is expected that jobs at the
Project will exceed the minimum number of jobs shown in the preceding
table.  MCHP will report all jobs at the Project in accordance with
Section V.

             

          

        

      

      b.           Timing.

       

      MCHP
shall create the total number of jobs at the Project set out in the preceding
chart in each of the years shown in that chart.  Each year’s minimum
number of jobs, as set out in the “Total” row of the chart shown above, shall be
created by December 31 of the relevant year.  A new job is
“created” when someone is hired as a regular full-time employee.  The
number of employees may be deferred or reduced temporarily due to 

       

       

      
        
          Amended
Strategic Investment Program Contract - 6 of 24

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      delays in
commissioning equipment, inability of MCHP to recruit qualified employees, or
economic circumstances, either in general or specific to MCHP, leading to a
requirement for a deferral in recruitment or a reduction in
employment.  If such a deferral or reduction is necessary, MCHP shall
notify the County in writing, specifying the reason for the deferral or
reduction, the amount of the deferral or reduction, and the expected duration of
the circumstances giving rise to the deferral or reduction.  If the
County believes that MCHP has deferred or reduced maintaining and creating jobs
in violation of this Agreement, the County may commence dispute resolution
proceedings under Section VII.A of this Agreement.

       

      c.           Additional
Employment.

       

      Total
Project employees may be greater than those indicated in Section
IV.2.a.  While MCHP cannot commit to increases, the commitment to the
Exclusive Full-Service First Source Hiring Agreement attached as Exhibit 2 of
this Agreement shall apply throughout the term of this Agreement.

       

      3.         Temporary
Employees.

       

      MCHP
anticipates it will use temporary employees in production tasks only to meet
peak production loads and to cover temporary and extended leaves of
absence.  A Category One temporary employee, as defined in paragraph
5, below, shall not hold a position longer than six months unless the employee
is filling a vacancy created by extended medical leave or a statutorily
protected leave.

       

      4.         Retention
of Employees.

       

      MCHP
intends to hire and retain employees for many years, and to provide its
employees with multiple opportunities to move progressively through the MCHP
corporate organization with increasing responsibility.  To carry out
these intentions, MCHP shall maintain during the term of this Agreement a
transfer policy and an internal posting policy which are substantially similar
to the transfer policy and internal posting policy which are attached as Exhibit
3 to this Agreement.

       

      It is the
intent of the parties that employees hired in new jobs be retained either in the
initial position or in progressively more responsible positions within
MCHP.  Beginning with the end of fiscal year 2003-04, MCHP shall
demonstrate that at least 70% of all of its regular full time employees at the
Gresham facilities except those described in the next sentence are retained for
at least two years.  The
following employees will not be counted: (1) those terminated for cause; and (2)
those that voluntarily terminate employment other than for reasons of inadequacy
of child care, transportation or housing.

       

       

      
        
          
          

        

        
          Amended Strategic Investment
Program Contract - 7 of 24

          
            

          

        

        
          
          

        

      

       

       

      5.         Advancement
of Category One Employees.

       

      MCHP will
source as many Category One Employees as practicable for hire into entry-level
production operator jobs.  MCHP currently provides a weeklong training
class for all production operators.  In addition, MCHP continually
offers in-house training and certification levels to improve performance and
employee output.  MCHP shall maintain these programs or substantially
similar programs during the term of this Agreement.  “Category One
Employee” means a person holding a job which requires less than a two year
college degree or certificate and which is not highly technical in
nature.

       

      In addition, MCHP shall:

       

      
        	
                 
      

              	
                a.

              	
                Offer
      supervisors of Category One Employees substantial training in dealing with
      employee issues, including workplace
diversity.

              

      

       

      
        	
                 
      

              	
                b.

              	
                Maintain
      its current, multi–step disciplinary process, or a substantially similar
      process, in place to ensure all employees are given multiple opportunities
      to improve their performance as well as to receive guidance on any
      particular employee issues.  MCHP’s current Employee Performance
      Improvement Plan , which details MCHP’s multi-step process for employee
      discipline, is attached as Exhibit 5 to this
  Agreement.

              

      

       

      
        	
                 
      

              	
                c.

              	
                Maintain
      its current policy of referring employees to multiple avenues for
      guidance, including but not limited to access to an employee assistance
      program which provides counseling.  MCHP’s current open door
      policy, which refers employees to several avenues for guidance, it
      attached as Exhibit 4 to this
Agreement.

              

      

       

      6.         Promotional
Practices.

       

      Microchip’s
practice is to promote approximately 10% of the indirect labor force once per
year to the next grade level responsibility. Approximately 40% of the Gresham
facilities will be direct labor employees.  Once Microchip places an entry
level or category one direct labor employee into grade 90, the following chart
illustrates their path.

       

         
90---92 - First year promotion

      92---94 -
Second year promotion

      94---96 -
Third year promotion 

       

      Once a
Category One employee has reached grade 96 they have had a promotion every year
for three years and they have reached the highest grade available.  To
continue advancement an employee must take on additional responsibilities
such as supervision or follow a technical path toward engineering.
 

       

       

      
        
          
          

        

        
          Amended
Strategic Investment
Program Contract - 8 of 24

          
            

          

        

        
          
          

        

      

       

      Microchip
provides tuition reimbursement as described in Exhibit 5 up to $10,000 a year
for education.  Microchip commits to continue with this level of promotions
per year to the extent economic conditions permit, for all employees whose job
performance justifies promotion.

       

      “Direct
labor” refers to anyone who touches the product or works on the wafer
process.  Direct labor positions are classified as “production
specialists” whose costs are included in MCHP’s cost per wafer
analysis.  “Indirect labor” refers to any labor positions except
“direct labor.”

       

      7.         Wages.

       

      MCHP
represents that its current wage structure, including base pay, bonus and stock
option grants, are competitive with current industry standards. MCHP will
continue to maintain competitive wages, and to compare its wages to the Radford
Benchmark Survey annually, or its equivalent.  A chart showing wages,
benefits, shift differential, and overtime is attached as Exhibit 6.  MCHP
commits to reviewing the Radford Benchmark and making any changes to salary
ranges that apply, provided that economic conditions allow for such increases in
salary ranges.

       

      8.         Employer
Paid Benefits.

       

      a.         In
General.

       

      MCHP
intends to fulfill its role as an exemplary corporate citizen by providing an
attractive and competitive benefits package which enables MCHP to recruit and
retain qualified employees.  MCHP acknowledges that provision of
excellent, competitive benefits is vital, not only to achieving MCHP’s corporate
objectives, but also to achieve the County’s goals.

       

      b.         Specific
Benefits.

       

      MCHP
currently provides all existing US employees at other locations with the
benefits described in Exhibit 7 attached to this Agreement.

       

      During
the period of property tax exemption, MCHP may have to modify its benefits
package in order to maintain costs in response to industry or economic
conditions or to remain competitive.  The cost to MCHP’s employees is
the same for all employees regardless of job title or income
level.  Employees may choose to insure only themselves, employee plus
spouse or employee plus family.  Also included in the attached as
Exhibit 7 is a cost analysis for benefit cost for the benefit plan year of
May 1, 2009 through April 30, 2010. 

       

      MCHP
shall report the benefits it provides for employees at the Project, and, prior
to making any substantial reductions in MCHP’s aggregate benefits package, MCHP
shall provide reasonable notice to the County.

       

       

      
        
          
          

        

        
          Amended
Strategic Investment Program Contract - 9 of 24

          
            

          

        

        
          
          

        

      

       

       

      During
the period of the partial property tax exemption, MCHP shall provide health
insurance at least comparable to that provided under  the Oregon
Health Plan (OHP).

       

       9.        Child
Care.

       

      MCHP will
work in good faith to attempt partnership relationships with local childcare
facilities to provide discounts for MCHP employees.  MCHP will provide
a link to Oregon childcare commission website
(http://findit.emp.state.or.us/occc/) on its internal website to facilitate
employee access to childcare information.  

       

      B.           Transportation.

       

      County
Goal:

       

      To
encourage employees to use transit, carpools, vanpools, or alternative modes of
transportation.

       

      MCHP
acknowledges this County goal and agrees to take the following actions in
support of this goal:

       

      MCHP
shall encourage use of alternative modes of transportation by maintaining its
current Trip Reduction Program, or a substantially similar
program.  MCHP’s current Trip Reduction Program is described in
Exhibit 8 attached to this Agreement.

       

      C.           Infrastructure
and Public Services.

       

      County
goal:

       

      To
eliminate adverse impacts on the level of service provided to existing residents
of Multnomah County and the region.

       

      MCHP
acknowledges this County goal and agrees to take the following actions in
support of that goal:

       

      MCHP
shall comply with all material provisions generally applicable under City,
County and State of Oregon development requirements to mitigate adverse impacts
on the level of services to existing residents of the County and City that
involve transportation and utility infrastructure and public
safety.

       

      D.           Environmental
Protection.

       

      County
Goal:

       

      To
approve tax abatements only for firms that demonstrate a commitment to
environmental protection.

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 10 of
24

          
            

          

        

        
          
          

        

      

       

      MCHP
acknowledges this County goal and agrees to take the following actions in
support of that goal:

       

      To
demonstrate its commitment to environmental protection:

       

      
        	
                 
      

              	
                1.

              	
                MCHP
      has identified baseline conditions associated with full production in each
      of the following categories: (1) toxic and hazardous materials; (2) water
      conservation, reuse and waste water discharge; (3) air quality; (4) waste
      reduction and recycling; and (5) energy
      conservation.  Additionally, MCHP has created an evaluation
      matrix to measure its progress toward the County’s goal and shall continue
      to strive to make progress toward that goal as demonstrated in its annual
      report to the County.

              

      

       

      
        	
                 
      

              	
                2.

              	
                MCHP
      has successfully applied for and participated in DEQ’s Green Permits
      program that constitutes achievement of the County
  goal.

              

      

       

      
        	
                 
      

              	
                3.

              	
                If
      any person is determined by the appropriate environmental authority to
      have violated an applicable environmental law, MCHP shall cure or cause to
      be cured the damage in accordance with and as required by applicable laws
      to the reasonable satisfaction of the reviewing environmental
      authority.

              

      

       

      E.           Job
Training.

       

      County
Goals:

       

      To build
a world-class workforce that provides the full range of skills necessary to
attract and sustain competitive, high performance companies.

       

      To
graduate all children from high school with skills enabling them to succeed in
the workforce and/or in post-secondary education, including the fundamental
ability to read, write, communicate and reason.

       

      To
establish stronger educational programs beyond the secondary level to meet the
region’s needs for accessible education, expanded graduate programs,
high-quality research, technology transfer and economic
development.

       

      To
provide educational opportunities to enhance upward mobility for both technical
and management roles.

       

      MCHP
acknowledges these County goals and agrees to take the following actions in
support of those goals:

       

      
        	
                 
      

              	
                1.

              	
                MCHP
      shall work in good faith with the education community to support
      curriculum and career path options for obtaining jobs in the semiconductor
      field.  This good-faith effort includes but is not limited
      to:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Assisting
      in the successful realization of the Center for Advanced Learning by
      serving on the C.A.L industry advisory committee; providing assistance and
      expertise with curriculum development, instructional assistance,
      development of internships and mentoring opportunities; consideration of
      financial and equipment donations to the
  C.A.L.

              

      

      
         

         

        
          
            
            

          

          
            Amended Strategic Investment Program Contract - 11 of
24

            
              

            

          

          
            
            

          

        

         

      

      
        	
                 
      

              	
                (b)

              	
                Working
      with MHCC and local high schools (Gresham, Sam
      Barlow,  Reynolds, Centennial, Parkrose, David Douglas, and
      Marshall) to explore partnership opportunities including but not limited
      to: internships and mentoring programs, curriculum development,
      instructional assistance, scholarships, financial and equipment
      donations.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Designating
      a representative to serve on the Board of Directors of the Mt. Hood
      Community College Foundation, when a position becomes
      available.

              

      

       

      
        	
                 
      

              	
                2.

              	
                MCHP’s
      tuition reimbursement policy, which is attached as Exhibit 5, provides up
      to $10,000 per year reimbursement for classes and books to anyone who
      enrolls in classes at a certified university for job related classes or
      degree.

              

      

       

      
        	
                 
      

              	
                3.

              	
                MCHP
      currently provides funds in departmental budgets to cover external
      training needs for employees to improve their
  skills.

              

      

       

      
        	
                 
      

              	
                4.

              	
                MCHP
      currently maintains an extensive in house training department with an
      excellent portfolio of classes, see attached recent recognition from
      Training Magazine.  MCHP offers 15 training classes at the
      Project.

              

      

       

      
        	
                 
      

              	
                5.

              	
                MCHP
      shall continue to provide these educational programs, or substantially
      similar educations benefits for its
employees.

              

      

       

      
        	
                 
      

              	
                6.

              	
                MCHP
      agrees to evaluate the Fujitsu proprietary degree and other equivalent
      training, in good faith and allow its employees appropriate credit
      for having obtained that degree.

              

      

       

      F.           Procure
Locally Produced or Sold Goods and Services.

       

      County
Goal:

       

      To
encourage the purchase of goods and services produced or sold by businesses in
Multnomah County and the region.

       

      MCHP
acknowledges this County goal and agrees to take the following actions in
support of this goal:

       

      
        	
                 
      

              	
                1.

              	
                MCHP
      acknowledges this County goal and agrees to make best effort
      to purchase from local suppliers subject to MCHP’s ability to find local
      suppliers whose products meet MCHP’s specifications and quality standards,
      and whose products cost the same or lower that non-local goods and
      services.

              

      

       

      
        	
                 
      

              	
                2.

              	
                MCHP
      will make good faith and reasonable efforts to procure for construction,
      installation and equipment maintenance services in a manner which
      recognizes and rewards responsible contractors based on the following
      factors: necessary technical
      qualifications (including licensure), past performance record (including
      safety, cost effectiveness, business location (per the local procurement
      goals of this Agreement) and other factors consistent with MCHP’s stated
      mission, values, and record of
  operations.

              

      

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 12 of
24

          
            

          

        

        
          
          

        

      

       

      V.           MCHP
Reporting Requirements.

       

      A.           MCHP
to Report Contract Compliance to County.

       

      
        	
                 
      

              	
                1.

              	
                MCHP
      shall prepare and submit to County SIP Manager the quarterly and annual
      reports described in paragraphs 5 and 6 below.  The annual
      report shall include the quarterly report information on the jobs
      information for the quarter ending June 30.  No separate
      quarterly report is required for the quarter ending June
    30.

              

      

       

      
        	
                 
      

              	
                2.

              	
                MCHP,
      County and the City will work together to determine the form of report
      necessary to track benefits of the “targeted population,” as that term is
      defined in the First Source Agreement.  To the extent possible,
      data compilations generated and used by MCHP in the ordinary conduct of
      its operations will be used for the report to the
  County.

              

      

       

      
        	
                 
      

              	
                3.

              	
                The
      reports are to be sent to the following
address:

              

      

       

      
        	
                SIP
      Manager

              
	
                Multnomah
      County Chair’s Office

              
	
                501
      SE Hawthorne Blvd. 6th floor

              
	
                Portland,
      OR 97293-0700

              

      

       

      
        	
                 
      

              	
                4.

              	
                Confidentiality
      of Reports.

              

      

       

      MCHP
proprietary information contained in the reports and documents submitted by MCHP
to the County in support of the report is, and shall be, submitted in complete
confidence.  County shall treat MCHP’s proprietary information in a
confidential manner.  The parties agree that any such proprietary
information is exempt from public disclosure under, and the County agrees to
assert in connection with any public records request that, such information is
exempt from disclosure under the Public Records Law, ORS
192.502(4).  This Agreement is MCHP’s written request  for
confidentiality and is the County’s assurance that it will treat MCHP’s
documents as confidential.  The County acknowledges that MCHP
documents that contain proprietary information may give competitors an undue
advantage, and, therefore, that such documents are also entitled to
nondisclosure protection under ORS 192.501(2).  Additionally, employee
survey information of a private nature is exempt from disclosure under ORS
192.502(2) and 192.501(5).

       

      MCHP
understands and agrees that the County may, subject to the foregoing
confidentiality obligations imposed upon the County, send portions of the
reports to other Oregon governmental entities for review to ensure compliance
with this Agreement.  For
example, the portion of the report on compliance with the County’s environmental
goals may be sent to DEQ for review. The
confidentiality of the MCHP documents shall extend to such documents in the
hands of all other governmental agencies and the County shall advise the other
governmental agencies of the confidentiality obligation when submitting MCHP
documents to such other governmental entities.  ORS
192.502(9) contemplates continued
confidentiality for documents transferred by a public body to another public
body.

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 13 of
24

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
any other provision of this Agreement, MCHP shall not be required to report
information to the County in a manner which violates the privacy rights of
MCHP’s employees.  If the County discloses any information provided by
MCHP to the County pursuant to this Agreement in any manner which violates the
rights of any person or entity, the County shall indemnify and hold MCHP and its
agents, directors, officers or employees harmless from and against any claim
made against MCHP or its agents, directors, officers or employees based on the
disclosure of that information by the County, including costs of attorneys’ fees
at trial and on appeal.

       

      5.     Quarterly
Reports on Job Creation, Compensation and Retention.

       

      Beginning
with County fiscal year 2003-2004, MCHP shall prepare and deliver within 45 days
of the close of each fiscal quarter (September 30, December 31, March 31 and
June 30), a report containing the following information:

       

      
        	
                 
      

              	
                a.

              	
                Hiring
      activity for the prior quarter for the Project, including day of hire,
      title, level, starting compensation and category of position (using the
      categories shown in the chart in Section
  IV.2.a).

              

      

       

      
        	
                 
      

              	
                b.

              	
                Turnover
      rate for all employees at the Project, calculated in accordance with
      Section IV.4.

              

      

       

      6.     Annual
Reports.

       

      MCHP
shall prepare and deliver by November 15 of the tax year following the tax
abatement year, a report which addresses each of the reporting requirements
listed below:

       

      a.           Wages.

       

      MCHP
shall provide a report of its total payroll and total number of employees, and
shall calculate and report the average payroll for employees at the
Project.

       

      b.           Benefits.

       

      MCHP
shall provide a statement of the benefits it provided during the tax abatement
year to its employees, any changes in the benefits from the prior
year.

       

      c.           Hiring
Outside of FSA.

       

      MCHP
shall provide a statement of the covered employee hires which were not referred
to MCHP by the County pursuant to the FSA during the tax abatement
year.  It shall include the date of hire, job classification, wage
scale and residency (state, county, city) at, or just prior to, time of
hire.  A report form shall be created by County and/or City with
MCHP.

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 14 of
24

          
            

          

        

        
          
          

        

      

       

      d.           Transportation.

       

      MCHP
shall provide a statement of its actions under Section IV.B for the tax
abatement year.

       

      e.           Job
Training.

       

      MCHP
shall provide a statement of its actions under Section IV.E for the tax
abatement year period.

       

      f.           Local
Procurement.

       

      MCHP
shall report annually:

       

      (1)           The
amount of MCHP expenditures in Oregon.

       

      (2)           The
amount of MCHP expenditures in Multnomah County.

       

      (3)           The
percent change in expenditures over prior year.

       

      g.           Environmental
Management Plan and Cleanup.

       

      
        	
                 
      

              	
                (1)

              	
                MCHP
      shall report annually on its compliance with the County’s environmental
      protection goals set out in Section
IV.D.

              

      

       

      
        	
                 
      

              	
                (2)

              	
                MCHP
      shall report on any notices of violation of environmental laws at the
      Project which MCHP receives from an environmental authority having
      jurisdiction over the Project that were given in the prior County fiscal
      year (beginning commencing in County fiscal year 2004-05 for any notices
      of violation received in County fiscal year 2003-04) and, if there were
      any, whether the appropriate environmental agency approved the remedial
      measures.

              

      

       

        
 7.       County Report on MCHP
Compliance.

       

       
The County shall also prepare an annual report to the public describing MCHP’s
compliance with the terms of this Agreement.

       

      
        
        

      

      
        B.    Cooperation
With Oregon Department of Revenue.

         

      

      MCHP and
the County shall cooperate with the Oregon Department of Revenue to identify the
property that receives the property tax exemption as described in this
Agreement.

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 15 of
24

          
            

          

        

        
          
          

        

      

       

      VI.           OBLIGATIONS OF COUNTY AND CITY.

       

      A.   Findings.

       

      In
consideration of the actions of MCHP as described in this Amended Agreement, the
County and the City find that:

       

      
        	
                 
      

              	
                1.

              	
                Granting
      an SIP exemption for the Project will foster the economic growth and
      legislative policy as set forth in ORS
285.603.

              

      

       

      
        	
                 
      

              	
                2.

              	
                The
      Project will be consistent with all applicable laws and
      regulations.

              

      

       

      
        	
                 
      

              	
                3.

              	
                The
      operation of the Project in the County and the City would be in the best
      interest of the citizens of Multnomah County and the City of
      Gresham.

              

      

       

      B.           The
County and City Agree as follows:

       

      1.       Approval
of Provisions Related to Property Tax Exemption.

       

      The
County and the City approve the provisions of this Amended Agreement related to
the SIP partial tax exemption by execution of this Amended
Agreement.  

       

      2.       Property
Tax Exemption.

       

      On August
23, 2002, the Project was approved, by Resolution, as an “eligible project” by
the Finance Committee for the Oregon Economic and Community Development
Commission.  This approval remains operative as to this Amended
Agreement without further action by OECDC.  The Project shall continue
to be subject to assessment and taxation as provided in ORS 307.123 through June
30, 2018. (See Exhibit # 1)

       

      VII.         BREACH;
DEFAULT; REMEDIES OF THE COUNTY.

       

      A.   Dispute
Resolution Procedure.

       

      
        	
                 
      

              	
                1.

              	
                Multnomah
      County’s designated SIP Manager shall have the duty to monitor compliance
      by MCHP with the terms of this
Agreement.

              

      

       

      
        	
                 
      

              	
                2.

              	
                If
      either County or the City has substantial evidence to believe that MCHP
      has failed materially to comply with any term of this Agreement and that
      such failure is not excused, County and the City shall confer, and shall
      involve persons in their organizations whose job responsibilities relate
      to the noncompliance.  County shall show the evidence of
      noncompliance to these representatives.  If, after they examine
      the evidence, County continues to believe that MCHP has failed materially
      to comply with one or more terms of this Agreement and the failure is not
      excused, County shall notify MCHP of this belief and the basis
      therefor.  In any event, MCHP shall not be deemed to have failed
      to comply with this Agreement if the failure is caused by a force majeure, as
      provided under Section VII.B, below, or if the alleged failure is a
      variance from numerically ascertainable terms which is described in
      Section VII.E.

              

      

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 16 of
24

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                3.

              	
                Notice
      required by Section VII.A.2 shall be in writing and shall be sent to MCHP
      at the following addresses, both of which shall be required for notice to
      be effective:

              

      

      

      
        	
                Microchip
      Technology Incorporated

              
	
                2355
      West Chandler Blvd.

              
	
                Chandler,
      Arizona 85224-6199

              

      

      
         

        Attention:  Steve
Sanghi, President and CEO

      

      
        
          	
                  
                    With
      a copy to:   Jeff Thomas, Director, Site
      Services

                  

                
	
                  
                    With
      a Copy to:  Legal
Department

                  

                

        

      

       

      If MCHP
wishes to change the address(es) to which notice hereunder shall be given, it
may do so by providing written notice to the County at the address indicated in
Section V.A.3.

       

      
        	
                 
      

              	
                4.

              	
                Upon
      receipt of the notice described in Section VII.A.2, MCHP shall have 45
      days to respond in writing.  MCHP’s written response shall be
      delivered to County at the address shown in Section
      V.A.3.  MCHP’s response shall include such supporting
      documentation as is related to the issues raised by the notice described
      in Section VII.A.2 and that is within MCHP’s control to provide for the
      sole purpose of allowing the County to substantiate MCHP’s
      response.  The County shall have 45 days in which to review and
      consider MCHP’s response and to notify MCHP in writing if the County
      believes MCHP is not in compliance, and to state the basis for the
      County’s belief.  If the County does not give MCHP such written
      notice within 45 days, the matter shall be deemed
  closed.

              

      

       

      
        	
                 
      

              	
                5.

              	
                If
      the County notifies MCHP pursuant to Section VI.A.4 that the County
      continues to believe that a failure of performance by MCHP has occurred,
      the parties will meet as soon as possible and confer with the objective
      that the issues upon which there is dispute are clearly defined and
      understood and that any misunderstanding of the essential factors of the
      dispute may be resolved.  The County may retain an outside
      consultant, or the County Auditor may be used to verify MCHP’s
      compliance.  In the course of this process, if physical access
      to the Project premises is required, MCHP will allow the County or its
      designated consultant or Auditor such access at reasonable times and under
      conditions that will comply with MCHP’s customary rules and procedures
      pertaining to safety, property security, confidentiality, engineering, and
      intellectual property protection and so as to not interfere with MCHP’s
      operations of the Project.  The parties shall also exercise
      their respective best efforts to resolve all disputed issues, in a manner
      and result that is consistent with the provisions of this
      Agreement.  A resolution so reached shall be documented in a
      written Compliance Agreement to the parties’ mutual
      satisfaction.

              

      

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 17 of
24

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                6.

              	
                If,
      following such efforts by the parties to amicably resolve their
      differences, a mutually satisfactory outcome is not achieved, the
      procedures in the order set forth below shall be
  followed:

              

      

       

      
        	
                 
      

              	
                a.

              	
                Subject
      to subsection b, below, senior management of both parties shall first
      mutually negotiate in good faith to resolve any dispute that arises
      between them.  If such negotiations are unsuccessful the parties
      agree that, before any litigation can be initiated, except as provided in
      b, below, the dispute shall be submitted to non-binding mediation in front
      of a mediator who is an attorney who is both knowledgeable in the laws
      which govern this agreement and who has substantial experience in the
      semiconductor or electronics manufacturing industries, or a mutually
      acceptable person of comparable expertise and competence.  Such
      mediation shall take place within 90 days’ of a party’s receipt of a
      request therefore, in a neutral location mutually acceptable to both
      parties.  Each party shall be responsible for paying its own
      costs and expenses (including legal fees, if necessary) for the mediation.
       In the event
      that the mediation is unsuccessful, either party may initiate litigation
      to address the dispute.

              

      

       

      
        	
                 
      

              	
                b.

              	
                Notwithstanding
      the foregoing, any dispute in which specific performance or injunctive
      relief is sought need not be submitted to mediation, but may instead be
      immediately brought by the aggrieved party to an appropriate
      court.

              

      

       

      
        	
                 
      

              	
                c.

              	
                The
      prevailing party in any litigation proceeding arising out of or related to
      this Agreement shall be entitled, in addition to any other rights and
      remedies it may have, to reimbursement for its expenses incurred in such
      action, including court costs and reasonable attorneys’ fees and other
      legal fees and costs.

              

      

       

      7.    Breach.

       

       
 d.          A “Breach”
shall be deemed to have occurred if:

       

      
        	
                 (1)  

              	
                before
      or after mediation, MCHP acknowledges that is has failed to comply with
      its obligations under this Agreement (unless the parties have agreed that
      the failure to comply is not a Breach);
or

              

      

       

      
        	
                 
      (2)  

              	
                a
      court of competent jurisdiction in a final nonappealable judgment
      determines that MCHP has failed to comply with it obligations under this
      Agreement.

              

      

       

      
        	
                 
      

              	
                e.

              	
                MCHP
      shall not be deemed to have failed to comply with this Agreement if the
      failure is caused by a force majeure, as
      provided under Section VII.B, or if the alleged failure is a variance from
      numerically ascertainable terms which is described in Section
      VII.E

              

      

       

      
        	
                 
      

              	
                f.

              	
                Where
      this Agreement imposes an obligation on MCHP to act “in good faith,” no
      Breach shall be deemed to occur unless the parties agree or a court
      determines in a final nonappealable judgment that MCHP failed to
      take
      any reasonable action to comply with that obligation, or that MCHP acted
      in bad faith.

              

      

       

      

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 18 of
24

          
            

          

        

        
          
          

        

      

       

      B.           Force
Majeure.

       

      If by
reason of force
majeure, MCHP is unable in whole or in part to carry out any of its
obligations in this Agreement, other than obligations for the payment of money,
a Breach shall not be deemed to occur during the continuance of such
inability.  The term “force majeure” as used herein
shall mean, without limitation, any of the following: acts of God; strikes,
lockouts or other industrial disturbances; acts of the public enemy; orders or
restraints of any kind of the government of the United States of America or of
the state wherein the County is located or any of their departments, agencies or
officials, or any civil or military authority; insurrections; riots; landslides;
earthquakes; volcanic eruption; fires; storms; droughts; floods; explosions;
breakage or accident to machinery, transmission pipes or canals; or any similar
or different cause or event not reasonably within the control of the
MCHP.  Force
Majeure also includes any significant reduction in market demand for the
products that are produced at the Project which makes it economically infeasible
for MCHP to operate the Project in compliance with this Agreement.  To
excuse performance of any obligation of MCHP due to a force majeure, MCHP must
notify the County as soon as reasonably possible after the force majeure has occurred
and MCHP has had an opportunity to determine the effect of the force majeure upon MCHP’s
business and its obligations hereunder.  The notice shall state the
nature of the occurrence, the anticipated effect of the occurrence on MCHP’s
obligations, and when MCHP will be able to resume compliance with this
Agreement.  If the County, following consultation with the City, does
not agree that MCHP shall be excused from performance in the manner stated in
MCHP’s notice, the County shall notify MCHP within 90 days and the parties shall
commence dispute resolution procedures pursuant to Section VII.A.

       

      C.           Failure
to Comply with Numerically Ascertainable Terms.

       

      It is the
intent of the parties that good faith efforts will be made to comply with all
the terms of this Agreement.  However, in such a large Project, it is
difficult to anticipate all contingencies with accuracy.  In a spirit
of fairness and recognizing the cyclical vagaries of business, the County and
City agree that variance from numerically ascertainable terms of this Agreement
by a plus or minus 5% will not constitute a failure of MCHP to comply with this
Agreement. However, the variance is not cumulative.

       

      D.           Sanctions.

       

      The
following sanctions shall apply if a Breach occurs:

       

      1.           
 Failure to Pay.

       

      If the
Breach relates to a failure of  MCHP to pay the CSF or any other fee
MCHP is required to pay to the County under this Agreement, the County shall be
entitled to the amount of the delinquency, plus the following penalties (subject
to the following paragraph): (1) if the payment is made more than ten (10)
business days

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 19 of
24

          
            

          

        

        
          
          

        

      

       

      after the
payment is due and written demand has been made to MCHP for payment, the County
shall be entitled to receive a penalty of ten percent (10%) of the
delinquent amount; and, (2) if the payment is made more than 45 business days
after the payment is due and written demand has been made to MCHP for payment,
the County shall be entitled to receive a penalty of one hundred percent (100%)
of the delinquent amount.  If MCHP reasonably disputes the amount or
timing of any payment which is alleged by the County to be due to the County
under this Agreement, MCHP may tender the amount which is alleged to be due and
thereby prevent any penalties from accruing, and may continue its
dispute.  Payment by MCHP shall not constitute a waiver by MCHP of any
matter in dispute.  If the dispute is resolved in favor of MCHP, the
County shall refund the amount of overpayment to MCHP, with interest, within 30
days after the dispute is resolved.

       

      2.           
 Failure to Create and Retain Jobs.

       

      If the
Breach relates to a failure of MCHP to meet the job creation or job retention
requirements of Section IV.2.a of this Agreement, MCHP shall pay an amount equal
to twice the average gross annual salary plus benefits for operators and
technicians in the year of the breach for every job not created or job not
retained.

       

      3.           
 Failure to Use FSA.

       

      If the
Breach relates to a failure of MCHP to notify the County in accordance with the
FSA of MCHP hiring needs for covered positions, or to hire qualified applicants
for covered positions in accordance with the FSA, MCHP shall pay to the County
an amount equal to twice the average gross annual salary plus benefits for
operators and technicians in the year of the breach for every person who would
have been hired though the FSA, but was not so hired because of MCHP’s
failure.

       

      If MCHP
fails to act in good faith to meet its obligations under the FSA, and the
failure results in effective abandonment of the FSA by MCHP, MCHP shall pay 75
percent of the Property Tax Abatement for each year the abandonment
continues.  It shall not constitute an abandonment if MCHP’s failure
is due to nonperformance by the County of its obligations under the
FSA.

       

      4.           
 Failure to Meet Reporting Requirements.

       

      If MCHP
fails to meet reporting requirements of Section V of this Agreement, MCHP shall
pay twice the amount necessary to have an auditor investigate and prepare the
report, or any portion thereof which has been omitted.

       

      5.            
Environmental Crimes.

       

      If MCHP
is found to be responsible by a competent court in a final nonappealable
judgment for conduct at the Project which constitutes felony criminal conduct
under federal, state or local environmental law, MCHP shall pay seventy five
percent
of the tax abatement for the tax year in which the conduct is found to have
occurred.

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 20 of
24

          
            

          

        

        
          
          

        

      

       

      6.           
 Failure to meet Other Requirements.

       

      In the
event a sanction for a Breach is not specified in the preceding paragraphs of
this Section VII.D, MCHP shall pay to the County an amount equal to any benefit
MCHP realized from the Breach, plus a 100% penalty (i.e. the total payment due
is two times what MCHP should have spent to comply with the
agreement).

       

      E.           Limitations.

       

      
        	
                 
      

              	
                1.

              	
                No
      Breach shall be deemed to occur and no sanction shall be imposed in
      connection with any action taken by MCHP during any tax year in which MCHP
      has paid ad valorem property taxes on the full market value of the
      Project.

              

      

       

      
        	
                 
      

              	
                2.

              	
                No
      sanction or combination of sanctions shall exceed 75% of the total tax
      abatement for any single tax year.  A tax year begins on July 1
      and ends on the following June 30.

              

      

       

      F.           Allocation
of Funds Paid by MCHP for Failure to Comply with Agreement.

       

      Any funds
collected under Sections VII.D above, shall be paid to the County Finance
Manager and held in a segregated fund.  The funds shall be distributed
by the Board of County Commissioners to a program or project in the area of
public policy most directly related to the failure to comply.

       

      VIII.        REMEDIES
OF MCHP.

       

      If the
City or County breaches this Agreement, MCHP shall be entitled to exercise any
of its legal or equitable remedies, either through the dispute resolution
process set forth in Section VI A or through administrative or judicial
processes.

       

      IX.           TERM
OF AGREEMENT.

       

      This
Agreement shall take effect on the date the Oregon Economic and Community
Development Commission formally determines that the Project is an “eligible
project” which will receive the partial property tax exemption described in ORS
307.123 and a deed is recorded conveying the existing FMI facilities to MCHP,
and shall remain in effect until terminated as provided in this Section
IX.

       

      This
Agreement shall terminate on June 30, 2018.  However, termination of
this Agreement shall not affect the obligation of any party to pay amounts which
were due under this Agreement for the period prior to its date of
termination.

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 21 of
24

          
            

          

        

        
          
          

        

      

       

      X.           MISCELLANEOUS
TERMS.

       

      A.           Discrimination.

       

      No
persons shall be denied or subject to discrimination in receipt of the benefits
of any services or activities made possible by or resulting from the Agreement
on the grounds of sex, sexual orientation, gender identity, race, color, creed,
marital status, age, national origin, mental health or physical handicap,
disabled or Vietnam era veteran status (except where
there are bona fide occupational qualifications).  Any violation of
this provision shall be considered a material violation of the
Agreement.

       

      B.           Public
Contracts.

       

      All
applicable requirements of the Oregon Revised Statutes Nos. 279.120 through
279.333 are incorporated herein by reference.  This provision is
intended to incorporate only those provisions which are required for all public
contracts.  The parties acknowledge that: other portions of ORS
Chapter 279 do not apply; this Agreement is not one for a public improvement or
public work; and the wages and other compensation paid by MCHP to its employees
is not subject to ORS 279.348 through 279.365.

       

      C.           Governing
Law.

       

      This
Agreement shall be governed by the law of the State of Oregon. Any actions or
suits commenced in connection with this Agreement shall be in Circuit Court of
Multnomah County or Federal District Court for Oregon.

       

      D.           Complete
Agreement.

       

      This
Agreement and its attached exhibits are the complete and exclusive statement of
the Agreement between the parties relevant to the purpose described above and
supersedes all prior agreements or proposals, oral or written, and all other
communication between the parties relating to the subject matter of this
Agreement.  No modifications of the Agreement will be binding on any
party except as a written addendum signed by authorized agents of each
party.  MCHP’s policies, some of which are exhibits to this Agreement,
may be changed by MCHP at any time without consent of, or notice to, the County
or the City, and changes to those policies shall not be deemed an amendment of
this Agreement.

       

      All
rights and remedies of each party shall be cumulative and may be exercised
successively or concurrently.  The foregoing is without limitation to
or waiver of any other rights or remedies of either party according to
law.

       

      E.           CSF
Payments Not Property Taxes.

       

      The
parties acknowledge that any payments required under this Agreement do not
constitute property taxes and are not subject to the limits under Section 11b,
Article XI of the Oregon Constitution.

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 22 of
24

          
            

          

        

        
          
          

        

      

       

      F.           Compliance
Relevant to Future Approvals.

       

      MCHP
acknowledges that its compliance with this Agreement will be an important
consideration for local government approval of any future applications MCHP may
make seeking property tax exemptions for other Projects.

       

      G.           Lease
or Sublease of the Premises.

       

      While it
is not contemplated that MCHP will lease or sublease the premises, if that were
to occur, the property tax exemption may transfer under the provisions of ORS
285B.383(4) and ORS 307.123.

       

      H.           Successors
and Assigns.

       

      This
Agreement shall inure to the benefit of and bind the successors and assigns of
the parties.

       

      I.           Good
Faith Contests Permitted.

       

      Nothing
in this Agreement shall be construed as: (1) preventing MCHP from contesting in
good faith any tax, assessment or other fee imposed by the County or any other
governmental entity; or (2) granting rights to any employee of
MCHP.  The obligations of MCHP in this Agreement are for the benefit
of the County and the City, and for the general benefit of their citizens; no
individual or entity not a party to this Agreement shall be treated as a third
party beneficiary of this Agreement.

       

      J.           Validity
of County Obligations.

       

      The
County represents that this Agreement and its attached exhibits are valid and
binding obligations of the County, and the County agrees to be bound by their
terms. The County agrees that its obligation to indemnify and hold MCHP harmless
is a contractual obligation of the County.

       

      K.           Counterparts.

       

      This
Agreement may be signed in counterparts; when each party has signed a
counterpart all parties shall be bound by this Agreement.

       

       

      
        
          
          

        

        
          Amended Strategic Investment Program Contract - 23 of
24

          
            

          

        

        
          
          

        

      

       

      
        
          
            DATED this 8 day of June 2009.

             

             

          

        

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                	
                                                                        MULTNOMAH
      COUNTY

                                                                         

                                                                         

                                                                         

                                                                        By:  /s/  Ted
      Wheeler

                                                                      	 
      	
                                                                        MICROCHIP
      TECHNOLOGY

                                                                        INCORPORATED
      (MCHP)

                                                                         

                                                                         

                                                                        By:  /s/  Steve
      Sanghi 

                                                                      	 
      
	
                                                                        Chairperson,

                                                                        Board
      of Commissioners

                                                                         

                                                                      	 
      	
                                                                        Authorized
      Officer

                                                                      	 
      
	
                                                                        Date: June
      8, 2009

                                                                      	 
      	
                                                                        Date: June
      1, 2009

                                                                         

                                                                         

                                                                      	 
      
	
                                                                        REVIEWED:

                                                                         

                                                                         

                                                                        By:  /s/  Sandra
      Duffy 

                                                                      	 
      	 
      	 
      
	
                                                                        Assistant
      County Counsel

                                                                         

                                                                      	 
      	 
      	 
      
	
                                                                        Date: June
      5, 2009

                                                                         

                                                                         

                                                                         

                                                                      	 
      	 
      	 
      
	
                                                                        CITY
      OF GRESHAM

                                                                         

                                                                         

                                                                         

                                                                        By:  /s/  Shane
      Bemis 

                                                                      	 
      	
                                                                         

                                                                         

                                                                         

                                                                         

                                                                        By:  /s/ 
      Eric Kvarsten 

                                                                      	 
      
	
                                                                        Mayor

                                                                      	 
      	
                                                                        City
      Manager

                                                                         

                                                                      	 
      
	
                                                                        Date:
      May 19, 2009

                                                                      	 
      	
                                                                        Date:
      May 19, 2009

                                                                         

                                                                         

                                                                      	 
      
	
                                                                        REVIEWED:

                                                                         

                                                                         

                                                                        By:  /s/  Richard
      Faus

                                                                      	 
      	 
      	 
      
	
                                                                        City
      Attorney

                                                                         

                                                                      	 
      	 
      	 
      
	
                                                                        Date:
      May 19, 2009

                                                                      	 
      	 
      	 
      

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

       

       

       

      Amended Strategic Investment Program Contract - 24 of
24ex101.htm

    EXHIBIT 10.1

      

      

      

      
 

      

      

      

      

      

      

      

      

      

      

      AGREEMENT
OF LIMITED LIABILITY LIMITED PARTNERSHIP

      

      

      OF

      

      

      SUMMER
HILL PARTNERS, LLLP

      

      

      A
Delaware Limited Liability Limited Partnership

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      TABLE OF
CONTENTS

      

       Page

       

      
        
          
            
              	 ARTICLE
      I  FORMATION OF PARTNERSHIP	
                      1

                    

            

          

        

        
          	
                   
      

                	
                  Section
      1.1.

                	
                  Formation of the
      Partnership. 

                	
                  1

                

        

        
          	
                   
      

                	
                  Section
      1.2.

                	
                  Name. 

                	
                  1

                

        

        
          	
                   
      

                	
                  Section
      1.3.

                	
                  Location of Principal
      Place of Business. 

                	
                  1

                

        

        
          	
                   
      

                	
                  Section
      1.4.

                	
                  Names and Business
      Addresses of General Partners. 

                	
                  2

                

        

        
          
          

        

        
          
            	 	Section
      1.5.	Purpose. 	
                     2

                  
	
                     
      

                  	
                    Section
      1.6.

                  	
                    Location of Registered
      Office and Registered Agent for Service of
      Process. 

                  	
                    2

                  

          

        

        
          	
                   
      

                	
                  Section
      1.7.

                	
                  Term. 

                	
                  2

                

        

         

        
          
            
              	 ARTICLE
      II  DEFINITIONS	3

            

          

        

         

        
          
            
              	 ARTICLE
      III  CAPITAL CONTRIBUTIONS	
                      5

                    

            

          

        

        
          	
                   
      

                	
                  Section
      3.1.

                	
                  Capital
      Contributions. 

                	
                  5

                

        

        
          	
                   
      

                	
                  Section
      3.2.

                	
                  Additional Capital
      Contributions. 

                	
                  5

                

        

        
          	
                   
      

                	
                  Section
      3.3.

                	
                  Interest on Capital
      Contributions. 

                	
                  6

                

        

        
          	
                   
      

                	
                  Section
      3.4.

                	
                  Withdrawal and Return
      of Capital Contributions. 

                	
                  6

                

        

         

        
          
            
              	 ARTICLE
      IV  ALLOCATION OF INCOME AND LOSSES	
                          6

                    

            

          

        

        
          	
                   
      

                	
                  Section
      4.1.

                	
                  Allocation of Net
      Income and Net Loss. 

                	
                  6

                

        

        
          	
                   
      

                	
                  Section
      4.2.

                	
                  Regulatory
      Provisions. 

                	
                  6

                

        

        
          	
                   
      

                	
                  Section
      4.3.

                	
                  Allocations for Income
      Tax Purposes. 

                	
                  7

                

        

        
          	
                   
      

                	
                  Section
      4.4.

                	
                  Withholding. 

                	
                  7

                

        

        
          	
                   
      

                	
                  Section
      4.5.

                	
                  Revaluation of
      Property. 

                	
                  7

                

        

         

        
          
            
              	 ARTICLE
      V  DISTRIBUTIONS AND WITHDRAWALS	
                      9

                    

            

          

        

        
          	
                   
      

                	
                  Section
      5.1.

                	
                  Distributions. 

                	
                  9

                

        

        
          	
                   
      

                	
                  Section
      5.2.

                	
                  Limitations on
      Distributions. 

                	
                  9

                

        

        
          	
                   
      

                	
                  Section
      5.3.

                	
                  Withdrawals of Capital
      Account Balance. 

                	
                  9

                

        

         

        
          
            
              	 ARTICLE
      VI  BOOKS OF ACCOUNT	
                      9

                    

            

          

        

        
          	
                   
      

                	
                  Section
      6.1.

                	
                  Books and
      Records. 

                	
                  9

                

        

        
          	
                   
      

                	
                  Section
      6.2.

                	
                  Partnership Tax
      Returns. 

                	
                  10

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          
            
              	 ARTICLE
      VII  POWERS, RIGHTS AND DUTIES OF THE LIMITED PARTNERS	
                      10

                    

            

          

        

        
          	
                   
      

                	
                  Section
      7.1.

                	
                  Limitations. 

                	
                   10

                

        

        
          	
                   
      

                	
                  Section
      7.2.

                	
                  Liability. 

                	
                   10

                

        

        
          	
                   
      

                	
                  Section
      7.3.

                	
                  Priority. 

                	
                   10

                

        

        
          	
                   
      

                	
                  Section
      7.4.

                	
                  Admission of
      Additional Limited Partners. 

                	
                   10

                

        

         

        
          
            
              	 ARTICLE
      VIII  POWERS, RIGHTS AND DUTIES OF GENERAL PARTNER	
                      11

                    

            

          

        

        
          	
                   
      

                	
                  Section
      8.1.

                	
                  Authority. 

                	
                   11

                

        

        
          
            	
                     
      

                  	
                    Section
      8.2.

                  	Powers, Rights and
      Dutes of General Partners	
                    11

                  

          

        

        
          	
                   
      

                	
                  Section
      8.3.

                	
                  Expenses of the
      Partnership. 

                	
                   11

                

        

        
          	
                   
      

                	
                  Section
      8.4.

                	
                  Other Activities and
      Competition; Additional Investments by the General Partners and
      Affiliates. 

                	
                   11

                

        

        
          	
                   
      

                	
                  Section
      8.5.

                	
                  Liability. 

                	
                   12

                

        

        
          	
                   
      

                	
                  Section
      8.6.

                	
                  Indemnification. 

                	
                   12

                

        

        
          	
                   
      

                	
                  Section
      8.7.

                	
                  Admission of
      Additional General Partners. 

                	
                   13

                

        

        
          	
                   
      

                	
                  Section
      8.8.

                	
                  Tax Matters
      Partner. 

                	
                   13

                

        

         

        
          
            
              	 ARTICLE
      IX  TRANSFERS OF INTERESTS BY
      PARTNERS	
                      14

                    

            

          

        

        
          	
                   
      

                	
                  Section
      9.1.

                	
                  Transfer of Interest
      By General Partners. 

                	
                   14

                

        

        
          	
                   
      

                	
                  Section
      9.2.

                	
                  Transfer and
      Assignment of Limited Partners’ Interests; Substituted Limited
      Partners. 

                	
                  14

                

        

        
          
            	
                     
      

                  	
                    Section
      9.3.

                  	Right to Treast Successor-in-Interest
      as Assignee.	
                    16

                  

          

        

        
          	
                   
      

                	
                  Section
      9.4.

                	
                  Transferees Bound by
      Agreement. 

                	
                  17

                

        

        
          	
                   
      

                	
                  Section
      9.5.

                	
                  Effect of
      Transfer. 

                	
                   17

                

        

         

        
          
            
              	 ARTICLE X  WITHDRAWAL OF PARTNERS; DISSOLUTION OF
      PARTNERSHIP; LIQUIDATION AND DISTRIBUTION OF
ASSETS	
                      17 

                    

            

          

        

        
          	
                   
      

                	
                  Section
      10.1.

                	
                  Withdrawal of
      Partners. 

                	
                   17

                

        

        
          	
                   
      

                	
                  Section
      10.2.

                	
                  Dissolution of
      Partnership. 

                	
                   18

                

        

        
          	
                   
      

                	
                  Section
      10.3.

                	
                  Distribution in
      Liquidation. 

                	
                   18

                

        

        
          	
                   
      

                	
                  Section
      10.4.

                	
                  Rights of the Limited
      Partners. 

                	
                   19

                

        

        
          	
                   
      

                	
                  Section
      10.5.

                	
                  Deficit
      Restoration. 

                	
                   19

                

        

        
          	
                   
      

                	
                  Section
      10.6.

                	
                  Termination. 

                	
                   20

                

        

         

        
          
            
              	 ARTICLE
      XI  AMENDMENT OF PARTNERSHIP AGREEMENT AND POWER OF
      ATTORNEY	
                      20

                    

            

          

        

        
          	
                   
      

                	
                  Section
      11.1.

                	
                  Approval of
      Amendments. 

                	
                   20

                

        

        
          	
                   
      

                	
                  Section
      11.2.

                	
                  Amendment of
      Certificate. 

                	
                   21

                

        

        
          	
                   
      

                	
                  Section
      11.3.

                	
                  Power of
      Attorney. 

                	
                   21

                

        

        
          
             

          

          
            ii 

            
              

            

          

          
             

          

        

        
          
            
              	 ARTICLE
      XII  MISCELLANEOUS	
                      22

                    

            

          

        

        
          	
                   
      

                	
                  Section
      12.1.

                	
                  Notices. 

                	
                   22

                

        

        
          	
                   
      

                	
                  Section
      12.2.

                	
                  Entire
      Agreement. 

                	
                   22

                

        

        
          	
                   
      

                	
                  Section
      12.3.

                	
                  Governing
      Law. 

                	
                   22

                

        

        
          	
                   
      

                	
                  Section
      12.4.

                	
                  Effect. 

                	
                   22

                

        

        
          	
                   
      

                	
                  Section
      12.5.

                	
                  Pronouns and
      Number. 

                	
                   22

                

        

        
          	
                   
      

                	
                  Section
      12.6.

                	
                  Captions. 

                	
                   22

                

        

        
          	
                   
      

                	
                  Section
      12.7.

                	
                  Partial
      Enforceability. 

                	
                   22

                

        

        
          	
                   
      

                	
                  Section
      12.8.

                	
                  Counterparts. 

                	
                   23

                

        

        
          	
                   
      

                	
                  Section
      12.9.

                	
                  Litigation. 

                	
                   23

                

        

        

        
          
             

          

          
            iii 

            
              

            

          

          
             

          

        

      AGREEMENT
OF LIMITED LIABILITY LIMITED PARTNERSHIP

      

      OF

      

      SUMMER
HILL PARTNERS, LLLP

      

      

      AGREEMENT OF LIMITED LIABILITY LIMITED
PARTNERSHIP of Summer Hill Partners, LLLP, effective as of the 18th day of
May, 2009, among Summer Hill Management Company, LLC, a limited liability
company organized and existing under the laws of the State of Delaware, as
general partner (together with any subsequently admitted general partners, the
“General
Partners”), and the Persons whose names are subscribed hereto, as limited
partners.  Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings set forth in Article II
below.

      

      RECITALS

      

      WHEREAS, the parties hereto desire to
form a limited liability limited partnership on the terms set forth
herein;

      

      NOW, THEREFORE, in consideration of the
premises and covenants contained herein, the parties agree as
follows:

      

       

      ARTICLE
I

       

      FORMATION
OF PARTNERSHIP

       

      Section 1.1.    Formation of the
Partnership.  The
General Partners, for themselves and as agents for the Limited Partners, shall
accomplish all filing, recording, publishing and other acts necessary or
appropriate for compliance with all the requirements for the formation and
operation of the Partnership as a limited liability limited partnership under
the Act and under all other laws of the State of Delaware and such other
jurisdictions in which the General Partners determine that the Partnership may
conduct business.  Each Limited Partner shall promptly execute all
relevant certificates and other documents as the General Partners shall
request.  The rights and duties of the Partners shall be as provided
in the Act except as modified by this Agreement.

      

      Section 1.2.    Name.  The name
of the Partnership is “Summer Hill Partners, LLLP” as such name may be modified
from time to time by the General Partners following written notice to the
Limited Partners.

      

      Section 1.3.    Location of Principal Place
of Business.  The
location of the principal place of business of the Partnership is c/o Summer
Hill, Inc., 6847 Cintas Boulevard, Suite 120, Mason,
Ohio  45040.  The General Partners may change the location
of the principal place of business of the Partnership by notice in writing to
the Limited Partners.  In addition, the Partnership may maintain such
other offices as the General Partners may deem advisable at any other place or
places within or outside the United States.

      

      Section 1.4.     Names and Business Addresses
of General Partners.  The name
and business address of each General Partner is as follows:

      

      Summer Hill Management Company,
LLC

      Attention:   Scott D.
Farmer, Manager

      c/o Summer Hill, Inc.

      6847 Cintas Boulevard, Suite
120

      Mason,
Ohio  45040

      

      Each
General Partner may, from time to time, upon prior notice to the Limited
Partners, change its name, business address or telecopy number.

      

      Section 1.5.    Purpose.  The
purpose and business of the Partnership shall be the conduct of any business or
activity that may be conducted by a limited liability limited partnership
organized pursuant to the Act, including without limitation to invest in
securities of every kind (including without limitation stocks, options,
warrants, promissory notes secured by deeds of trust, bonds, limited partnership
interests), physical commodities and commodity futures, and ownership interests
and indebtedness of every kind; to engage in other investment activities
including, without limitation, investing in mutual funds, real estate and other
investments that offer the opportunity for an appropriate return; to make direct
investments or form partnerships, corporations or other entities for the purpose
of making investments; and to engage in any and all activities related or
incidental to the foregoing and to do all things necessary or convenient for the
accomplishment thereof; and to do so under the business judgment rule rather
than under any fiduciary standard, including, but not limited to, free of the
rules of the Prudent Investor Act or any other rule, law or convention that
restricts fiduciaries in investing, including, but not limited to, the duty to
diversify.

       

      Section 1.6.    Location of Registered
Office and Registered Agent for Service of
Process.  The
location of the registered office of the Partnership is CT Corporation System,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801.  The General Partners may change the location of the registered
office of the Partnership by notice in writing to the Limited
Partners.  The agent for service of process for the Partnership shall
be Corporation Service Company or such other agent for service of process as the
General Partners may designate from time to time.

      

      Section 1.7.    Term.  The
term of the Partnership shall commence on the date hereof and shall be perpetual
unless earlier dissolved and terminated in accordance with the provisions of
this Agreement.

       

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

       

      ARTICLE
II

       

      DEFINITIONS

       

      “Act” means the
Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §17-101 et seq., as
amended.

      

      “Additional General
Partner” means any General Partner admitted to the Partnership as an
additional General Partner pursuant to Section
8.7.

      

      “Additional Limited
Partner” means any Limited Partner admitted to the Partnership as an
additional Limited Partner pursuant Section
7.4.

      

      “Agreement” means this
Agreement of Limited Liability Limited Partnership, as amended, modified or
supplemented from time to time.

      

      “Assigning Partner”
has the meaning set forth in Section 9.3
hereof.

      

      “Capital Account”
means, with respect to each Partner, the account established and maintained for
the Partner on the books of the Partnership in compliance with Treasury
Regulation §§ 1.704-1(b)(2)(iv) and 1.704-2, as amended.  Subject to
the preceding sentence, each Partner’s Capital Account shall initially equal the
amount of cash and the Contribution Value of any other property initially
contributed by such Partner to the Partnership and throughout the term of the
Partnership will be (i) increased by (A) income and gains allocated to such
Partner pursuant to Article IV, and (B)
any cash or the Contribution Value of any property subsequently contributed by
such Partner to the Partnership, and (ii) decreased by the amount of (A) losses
and deductions allocated to such Partner pursuant to Article IV, and (B)
the amount of distributions in cash and the fair market value as determined by
the General
Partner of property (net of liabilities secured by the property that such
Partner is treated as assuming or taking subject to pursuant to the provisions
of Code section 752) distributed to such Partner.

      

      “Capital Contribution”
means the amount of cash or the Contribution Value of property contributed or
deemed to be contributed to the Partnership by a Partner pursuant to Sections
3.1 and 3.2.

      

      “Certificate” means
the Certificate of Limited Partnership of the Partnership, as amended, modified
or supplemented from time to time.

      

      “Code” means the
Internal Revenue Code of 1986, as amended from time to time (or any succeeding
law).

      

      “Contribution Value”
means the fair market value as reasonably determined by the General Partner of
property (other than cash) contributed by a Partner to the Partnership (net of
liabilities secured by such contributed property that the Partnership is treated
as assuming or taking subject to pursuant to the provisions of Code section
752).

       

      
         

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

      “Fiscal Year” means
the calendar year; provided, however, that the
last Fiscal Year of the Partnership shall end on the date on which the
Partnership is terminated.

      

      “General Partners” has
the meaning set forth in the forepart of this Agreement.

      

      “Indemnified Party”
has the meaning set forth in Section 8.6
hereof.

      

      “Immediate Family”
means, as to any individual, (i) such individual and (ii) all other individuals
who have any of the following relationships to such individual, whether by birth
or legal adoption as a minor of any one or more individuals:  parent,
lineal descendant, brother, brother’s lineal descendant, sister, and sister’s
lineal descendant.

      

      “Interest,” when used
in reference to a Partner’s interest in the Partnership, means the entire
ownership interest of a Partner in the Partnership at any particular
time.

      

      “Limited Partner”
means each Person named as a limited partner on Annex A hereto and
each Person admitted as a Substituted Limited Partner or an Additional Limited
Partner pursuant to the terms of this Agreement, and, with respect to those
provisions of this Agreement concerning a Limited Partner’s rights to receive a
share of profits or other distributions or the return of a Limited Partner’s
contribution, any Transferee of a Limited Partner’s Interest in the Partnership
(except that a Transferee who is not admitted as a Limited Partner shall have
only those rights specified by the Act and which are consistent with the terms
of this Agreement).

      

      “Liquidator” has the
meaning set forth in Section 10.2(b)
hereof.

      

      “Net Income” and
“Net Loss,”
respectively, mean the income or loss of the Partnership for Federal income tax
purposes, including, for all purposes, any income exempt from tax and any
expenditures of the Partnership which are described in section 705(a)(2)(B) of
the Code; provided, however, that if any
property is carried on the books of the Partnership at a value that differs from
that property’s adjusted basis for tax purposes, gain, loss, depreciation and
amortization with respect to such property shall be computed with reference to
the book basis of such property, consistently with the requirement of Treasury
Regulation § 1.704-1(b)(2)(iv)(g); and provided, further, that any
item allocated under Section 4.2 hereof
shall be excluded from the computation of Net Income and Net Loss.

      

      “Partners” means all
General Partners and all Limited Partners, collectively, where no distinction is
required by the context in which the term is used.

      

      “Partnership” means
the limited liability limited partnership formed pursuant to this Agreement
under the name “Summer Hill Partners, LLLP”

      

      “Percentage Interest”
means, with respect to each Partner, the percentage determined by dividing the
balance of such Partner’s Capital Account by the aggregate balances of all
Partners’ Capital Accounts.  The initial Percentage Interest of each
Partner is set forth opposite such partner’s name in Annex A.

       

      
         

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

      

      “Person” means any
individual, partnership, limited liability company, corporation, estate or trust
or other entity.

      

      “Substituted General
Partner” means any Person admitted to the Partnership as a substituted
General Partner pursuant to Section
9.1.

      

      “Substituted Limited
Partner” means any Person admitted to the Partnership as a substituted
Limited Partner pursuant to Section
9.2(c).

      

      “Tax Matters Partner”
has the meaning set forth in Section 8.8
hereof.

      

      “Transfer,” “Transferee” and
“Transferor”
have the respective meanings set forth in Section
9.1.

      

      “Treasury Regulations”
means regulations promulgated under the Code by the Department of the Treasury
of the United States of America.

      

       

      ARTICLE
III

       

      CAPITAL
CONTRIBUTIONS

       

      Section 3.1.    Capital
Contributions.  Each
General Partner shall contribute to the capital of the Partnership the assets
set forth opposite such Partner’s name in Annex A hereto under
the column headed Initial Capital Contribution.  Thereupon, each
Limited Partner shall contribute to the capital of the Partnership the assets
set forth opposite such Partner’s name in Annex A hereto under
the column headed Initial Capital Contribution.  The Partners admitted
to the Partnership as of the date hereof hereby agree that the amount set forth
under the column headed “Initial Capital Account Balance” opposite each
Partner’s name in Annex A hereto
accurately reflects the fair market value of the assets contributed to the
Partnership by such Partner.

      

      Section 3.2.    Additional Capital
Contributions.  Any
Partner may make additional Capital Contributions at any time upon the unanimous
consent of all General Partners.  Following any such additional
Capital Contribution, the Percentage Interest of each Partner shall be adjusted
in the manner provided in Section
4.5(c).  The General Partners shall from time to time make
additional Capital Contributions in cash to the Partnership such that at all
times the General Partners’ aggregate Capital Contributions are equal to at
least 0.01% of the aggregate Capital Contributions made by the Limited
Partners.  Such additional Capital Contributions shall be allocated
among the General Partners as they shall agree or, if they cannot agree to an
allocation, in proportion to the balances in the General Partners’ Capital
Accounts.

       

      
         

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

      

      

      Section 3.3.    Interest on Capital
Contributions.  No
Partner shall be entitled to interest on or with respect to any Capital
Contribution.  Notwithstanding the foregoing, a Partner may make loans
to the Partnership on such terms (including rate of interest) as shall be
determined by the General Partners.

      

      Section 3.4.    Withdrawal and Return of
Capital Contributions.  No
Partner shall be entitled to withdraw any part of that Partner’s Capital
Contribution or to receive any distributions from the Partnership without the
unanimous consent of all General Partners, except as expressly provided in this
Agreement.

      

       

      ARTICLE
IV

       

      ALLOCATION
OF INCOME AND LOSSES

       

      Section 4.1.    Allocation of Net Income and
Net Loss.  Subject
to Sections 4.2
and 4.3, the
Partnership’s Net Income and Net Loss for each Fiscal Year shall be allocated to
the Partners in proportion to their Percentage Interests.

      

      Section 4.2.    Regulatory Provisions.

       

      (a)           The
General Partners shall modify the allocations provided for in Section 4.1 as they
deem appropriate to comply with Treasury Regulations §§ 1.704-1(b) and
1.704-2.  Without limiting the generality of the foregoing, the
General Partners shall, prior to making any allocations required by Section 4.1, make any
allocations required by the “minimum gain chargeback” provision of Treasury
Regulations § 1.704-2(f), the “chargeback of partner nonrecourse debt minimum
gain” provision of Treasury Regulations § 1.704-2(i)(4) and the “qualified
income offset” provision of Treasury Regulations § 1.704-1(b)(2)(ii)(d); in
addition, Partnership losses, deductions or expenditures described in Code
section 705(a)(2)(B) attributable to a particular partner nonrecourse liability
shall be allocated to the Partner that bears the economic risk of loss for the
liability in accordance with Treasury Regulations § 1.704-2(i).

      

      (b)           The
General Partners shall limit allocations of Net Losses to any Partner if such
allocation would cause such Partner’s Capital Account balance, as increased for
any deficit balance in its Capital Account which the Partner is required to
restore or is deemed required to restore as a result of its share of the
Partnership’s minimum gain (within the meaning of Treasury Regulations §§
1.704-2(g)(1) and (3)) and its share of partner nonrecourse debt minimum gain
(within the meaning of Treasury Regulations § 1.704-2(i)(5)) and as decreased by
the adjustments referred to in Treasury Regulations §§ 1.704-1(b)(2)(ii)(d)(4),
(5) and (6), to be negative while any other Partner’s Capital Account balance
(as so adjusted) is positive.  The General Partners may also make
allocations reasonably designed to offset allocations provided for in this Section 4.2 to the
extent such allocations shall not be offset by other allocations provided for in
this Section
4.2.  The General Partners may alter the Partnership’s
allocations of items entering into the computation of Net Income and Net Losses
in the year in which the Partnership is liquidated to avoid any Partner
recognizing gain or loss pursuant to Code section 731 on the liquidation of the
Partnership.

       

      
         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

      

      

      (c)           Solely
for purposes of adjusting Capital Accounts (and not for tax purposes), if any
property is distributed in kind, the difference between the fair market value of
the property and its book value at the time of distribution shall be treated as
gain or loss recognized by the Partnership and allocated pursuant to Section
4.1.

      

      (d)           Except
to the extent otherwise required by the Code and Treasury Regulations, if an
Interest or part thereof is transferred in any Fiscal Year, the items of income,
gain, loss, deduction and credit allocable to the Interest for such Fiscal Year
shall be apportioned between the transferor and the transferee in proportion to
the number of days in such Fiscal Year the Interest is held by each of them,
except that, if they agree between themselves and so notify the Partnership
within 30 days after the transfer, then at their option and expense, (i) all
items or (ii) extraordinary items, including capital gains and losses, may be
allocated to the Person who held the Interest on the date such items were
realized or incurred by the Partnership.

      

      Section 4.3.    Allocations for Income Tax
Purposes.  The
income, gains, losses, deductions and credits of the Partnership for Federal,
state and local income tax purposes shall be allocated in the same manner as the
corresponding items entering into the computation of Net Income and Net Losses
were allocated pursuant to Sections 4.1 and
4.2, provided
that solely for Federal, state and local income and franchise tax purposes and
not for book or Capital Account purposes, income, gain, loss and deduction with
respect to property properly carried on the Partnership’s books at a value other
than its tax basis shall be allocated in accordance with the requirements of
Code section 704(c) and Treasury Regulations § 1.704-3.

      

      Section 4.4.    Withholding.  The
Partnership shall comply with withholding requirements under Federal, state and
local law and shall remit amounts withheld to and file required forms with the
applicable jurisdictions.  To the extent the Partnership is required
to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Partner, the amount withheld shall be
treated as a distribution in the amount of the withholding to that
Partner.  In the event of any claimed over-withholding, Partners shall
be limited to an action against the applicable jurisdiction.  If the
amount withheld was not withheld from actual distributions, the Partnership may
(i) require the Partner to reimburse the Partnership for such withholding or
(ii) reduce any subsequent distributions by the amount of such
withholding.  Each Partner agrees to furnish the Partnership with any
representations and forms as shall reasonably be requested by the Partnership to
assist it in determining the extent of, and in fulfilling, its withholding
obligations.

      

      Section 4.5.    Revaluation of
Property.

      

      (a)           The
assets of the Partnership shall be revalued on the books of the Partnership to
equal their fair market values in accordance with Treasury Regulations §
1.704-1(b)(2)(iv)(f) at the following times:  (A) the day immediately
preceding the acquisition of an additional Interest in the Partnership by any
existing or new Partner in exchange for more than a de minimis Capital
Contribution to the capital of the Partnership pursuant to Sections 3.2, 7.4 and 8.7; (B) on the day
of any withdrawal of more than a de minimis portion of
the Partnership Capital Account pursuant to Section 5.3 before
taking into account such withdrawal; (C) the termination of the Partnership for
Federal income tax purposes, other than a termination pursuant to Code section
708(b)(1)(B); and (D) the occurrence of any other event upon which the General
Partners believe such revaluation is appropriate.  For purposes of the
preceding sentence, the General Partners shall determine whether any
contribution of capital to or withdrawal from the Partnership is in more than a
de minimis
amount.  Upon revaluation of the Partnership’s assets pursuant to this
Section 4.5(a),
(i) the fair market value of the assets shall be determined by the
unanimous agreement of all General Partners, (ii) each Partner’s Capital Account
shall be adjusted as if such assets were sold for their fair market values and
the Net Income and Net Losses recognized on such sale were allocated to the
Partners in accordance with Section 4.1, and
(iii) each Partner’s Percentage Interest shall equal the percentage determined
by dividing the balance of such Partner’s adjusted Capital Account by the
aggregate balance of all Partners’ adjusted Capital Accounts.

       

      
         

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

      

      

      (b)           Unless
the General Partners shall in their good faith judgment determine otherwise, all
securities or other instruments with a publicly quoted price shall be valued at
their last sale price, on the date as of which their value is being determined,
or, if appropriate, at their closing bid price if held long or ask price if held
short as provided by market-makers making a market in the respective securities
or instruments selected by the General Partners, in their good faith
judgment.  If on the date as of which any valuation is being made, no
exchange or market is open for business, the valuation of such security or
instrument shall be determined as of the last preceding date on which such
exchange or market was open for business.  All other assets and
liabilities of the Partnership shall be valued by the General Partners in their
good faith judgment utilizing such projections and assumptions as the General
Partners may deem appropriate and reasonable or on such other basis as the
General Partners may deem appropriate or reasonable.

      

      All values assigned by the General
Partners pursuant to this Section shall be conclusive and binding upon all
Partners.

      

      (c)           Immediately
following the occurrence of any event which has caused the revaluation of the
assets of the Partnership pursuant to Section 4.5(a), each
Partner’s Percentage Interest shall be adjusted to equal the percentage
determined by dividing the balance in each Partner’s Capital Account immediately
after such revaluation by the aggregate balance of all Partners’ Capital
Accounts immediately after such revaluation.

      

      (d)           For
purposes of Section
4.1, the Fiscal Year in which the assets of the Partnership are revalued
pursuant to Section
4.5(a) shall be treated as two separate Fiscal Years, one beginning on
the first day of the Fiscal Year and ending on the day of the revaluation and
the other beginning on the day immediately following the revaluation and ending
on the last day of the Fiscal Year, and Net Income and Net Loss shall be
allocated to the Partners separately for each portion of the Fiscal Year based
on operations for such portion of the year as reflected by a closing of the
Partnership’s books.  Analogous divisions of the Fiscal Year into
multiple Fiscal Years will be made if there be more than one revaluation of
assets in any Fiscal Year.

       

      
         

         

        
          
            
            

          

          
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      ARTICLE
V

       

      DISTRIBUTIONS
AND WITHDRAWALS

      

      Section 5.1.    Distributions.  Subject
to Section
10.3, distributions of cash or property of the Partnership shall be made
at such times and in such manner only as shall be approved by unanimous, written
consent of all General Partners, which consent may be granted or withheld in
each General Partner’s sole discretion.  Any such distribution shall
be made to the Partners in proportion to their Percentage Interests as of the
day on which such distribution is made.

      

      Section 5.2.    Limitations on
Distributions.

      

      (a)           Notwithstanding
anything herein contained to the contrary:

      

      (i)           no
distribution pursuant to this Agreement shall be made if such distribution would
result in a violation of the Act;

      

      (ii)           no
distribution shall be made if such distribution would violate the terms of any
agreement or any other instrument to which the Partnership is a
Party.

      

      (b)           In
the event that a distribution is not made as a result of the application of
paragraph (a)
of this Section
5.2, all amounts so retained by the Partnership shall continue to be
subject to all of the debts and obligations of the Partnership.  The
Partnership shall make such distribution (with accrued interest actually earned
thereon) as soon as such distribution would not be prohibited pursuant to this
Section
5.2.

       

      Section 5.3.    Withdrawals of Capital
Account Balance.  Subject
to Section
10.3, a Partner may withdraw all or any portion of its Capital Account
balance at such time or times and in such manner only as shall be approved by
unanimous consent of all General Partners, which consent may be granted or
withheld in each General Partner’s sole discretion.  Any Partner
withdrawing the entire balance of its Capital Account shall, upon the completion
of such withdrawal, be deemed to have withdrawn from the Partnership pursuant to
Section
10.1.

       

      ARTICLE
VI

       

      BOOKS OF
ACCOUNT

      

      Section 6.1.    Books and
Records.  Proper
and complete records and books of account shall be kept by the General Partners
in accordance with the Act in which shall be entered fully and accurately all
transactions and other matters relative to the Partnership’s business as are
usually entered into records and books of account maintained by Persons engaged
in businesses of a like character, including a Capital Account for each
Partner.  The Partnership books and records shall be kept on such
method of accounting as the General Partners shall determine.  The
determinations of the General Partners with respect to the treatment of any item
or its allocation for Federal, state or local tax purposes shall be binding upon
all Partners so long as that determination is not inconsistent with any express
term of this Agreement.  The books and records shall at all times be
maintained at the principal office of the Partnership and shall be open to the
examination and inspection of the Partners or their duly authorized
representative for a proper purpose during reasonable business hours at the sole
cost and expense of the inspecting or examining Partner.  The
Partnership shall maintain at its office and make available to each Partner or
any designated representative of a Partner a list of names and addresses of, and
Interests owned by, all Partners.

       

      
         

         

        
          
            
            

          

          
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      Section 6.2.    Partnership Tax
Returns.  If
the General Partners deem it appropriate to file an Internal Revenue Service
Form 1065 and all other tax returns required to be filed by the Partnership for
each Fiscal Year or part thereof, within 90 days after the end of each Fiscal
Year, the Partnership shall provide to each Person who at any time during such
Fiscal Year was a Partner with a copy of Schedule K-1 to Internal Revenue
Service Form 1065 (or any successor form)  indicating such Person’s
interest in the Partnership’s income, loss, gain, expense and other items
relevant for Federal income tax purposes and with a copy of any other Federal,
state or local income tax or information returns filed by the
Partnership.  Notwithstanding the foregoing, the Partnership shall not
be entitled to make any election under Code Section 754 with respect to the
basis of Partnership property.

      

       

      ARTICLE
VII

       

      POWERS,
RIGHTS AND DUTIES OF THE LIMITED PARTNERS

      

      Section 7.1.    Limitations.  Other
than as set forth in this Agreement, the Limited Partners shall not participate
in the management or control of the Partnership’s business nor shall they
transact any business for the Partnership, nor shall they have the power to act
for or bind the Partnership or to participate in any decision with respect to
any matter relating to distributions from or liquidation (including but not
limited to the dissolution) of the Partnership or in making any amendment to
this Agreement relating to any such distribution or liquidation matter, said
powers being vested solely and exclusively in the General
Partners.  The Limited Partners shall have no interest in the
properties or assets of the General Partners, or any equity therein, or in any
proceeds of any sales thereof (which sales shall not be restricted in any
respect), by virtue of acquiring or owning an Interest in the
Partnership.

      

      Section 7.2.    Liability.  Subject
to the provisions of the Act, no Limited Partner shall be liable for the
repayment, satisfaction or discharge of any Partnership liabilities in excess of
the balance of the Capital Account of such Limited Partner.

      

      Section 7.3.    Priority.  Except
as set forth in Article IV and Article V, no Limited
Partner shall have priority over any other Limited Partner as to Partnership
allocations or distributions.

      

      Section 7.4.     Admission of Additional
Limited Partners.  Any
Person may be admitted to the Partnership as an Additional Limited Partner at
any time with the unanimous consent of the General Partners.  Such
Person shall make such Capital Contributions as all of the General Partners
shall determine.  Upon admission of an Additional Limited Partner, the
Percentage Interest of each Partner shall be adjusted in accordance with Section
4.5(c).

       

      
         

         

        
          
            
            

          

          
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      ARTICLE
VIII

      

      POWERS,
RIGHTS AND DUTIES OF GENERAL PARTNER

      

      Section 8.1.    Authority.  The
General Partners shall have exclusive and complete authority and discretion to
manage the operations and affairs of the Partnership and to make all decisions
regarding the business of the Partnership, including, but not limited to,
determining whether or not to make distributions to the Partners and causing the
Partnership to liquidate.  Except as otherwise specifically provided
herein, any action permitted or required to be taken by the General Partners
pursuant to this Agreement shall be taken by the General Partners holding more
than 50% of the aggregate Capital Account balances held by all General
Partners.  Any such action shall constitute the act of and serve to
bind the Partnership, the Partners and their respective successors, assigns and
personal representatives.  Persons dealing with the Partnership are
entitled to rely conclusively on the power and authority of the General Partners
as set forth in this Agreement.

      

      Section 8.2.    Powers, Rights and Duties of
General Partners.  Except
as otherwise specifically provided herein, the General Partners shall have all
rights and powers of general partners under the Act, and shall have all
authority, rights and powers in the management of the Partnership business to do
any and all other acts and things necessary, proper, convenient or advisable to
effectuate the purposes of this Agreement.  Without limiting the
generality of the foregoing, the General Partners may appoint one or more
investment advisers to manage the Partnership assets for the Partnership, any of
which may also be affiliated with a General Partner.  Any such
investment adviser may be given discretionary authority in the management of the
Partnership’s portfolio.  Each General Partner shall also be entitled
to reasonable compensation for services provided to the Partnership in its
capacity as General Partner, as determined in writing from time to time by the
unanimous agreement of the Partners.

      

      Section 8.3.    Expenses of the
Partnership.  The
Partnership shall pay, and the General Partners shall not be obligated to pay,
all expenses incurred by or on behalf of the Partnership.  The General
Partners may, in their discretion, advance funds to the Partnership for the
payment of these expenses and shall be entitled to the reimbursement of any
funds so advanced.  The General Partners may receive reasonable
compensation for services hereunder in addition to any pro rata distribution
attributable to their equity interest in the Partnership.

      

      Section 8.4.    Other Activities and
Competition; Additional Investments by the General Partners and
Affiliates.  The
General Partners shall not be required to manage the Partnership as their sole
and exclusive function.  The General Partners, their affiliates, and
members, managers, agents, officers, directors and employees of the General
Partners and their affiliates may enter into transactions with the Partnership
and may engage in or possess any interests in business ventures and may engage
in other activities of every kind and description independently or with others
in addition to those relating to the Partnership, including the rendering of
advice or services of any kind to other investors and the making or management
of other investments.  Without limiting the generality of the
foregoing, any General Partner, any affiliate of any General Partner, and any
member, manager, agent, officer, director or employee of any General Partner or
any affiliate of a General Partner may act as a director of any corporation,
trustee of any trust, partner of any partnership or administrative officer of
any business entity, and may receive compensation for service as a director,
employee, advisor, consultant or manager with respect to, or participate in
profits derived from, investments in or of any such corporation, trust,
partnership or other business entity.  The Limited Partners authorize,
consent to and approve such present and future activities by such Persons,
whether or not such activities may conflict with any interest of the Partnership
or any of the Partners or be competitive with the business of the Partnership or
represent an opportunity that the Partnership might wish to engage
in.  Without limiting the generality of the foregoing, the General
Partners shall not have any obligation or responsibility to disclose or refer
any such investments or other activities to the Partnership or any
Partner.  Neither the Partnership nor any Partner shall have any right
by virtue of this Agreement or the partnership relationship created hereby in or
to other ventures or activities of the General Partners or their affiliates or
to the income or proceeds derived therefrom.

       

      
         

         

        
          
            
            

          

          
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      Section 8.5.    Liability.  Neither
the General Partners nor any of their affiliates nor any member, manager,
officer, agent or employee of any General Partner or any affiliate of a General
Partner shall be personally liable for the return of any portion of the Capital
Contributions of the Limited Partners; the return of these Capital Contributions
shall be made solely from assets of the Partnership.  Neither the
General Partners nor any of their affiliates nor any member, manager, officer,
agent or employee of any General Partner or any affiliate of a General Partner
shall be required to pay to the Partnership or the Limited Partners any deficit
in a Limited Partner’s Capital Account upon dissolution or
otherwise.  The Limited Partners shall not have the right to demand or
receive property other than cash for their Interest.  Neither the
General Partners nor any of their affiliates nor any member, manager, officer,
agent or employee of any General Partner or any affiliate of a General Partner
shall be liable, responsible or accountable to the Partnership or the Limited
Partners for (a) any act or omission performed or omitted by them, including
without limitation, those acts performed or omitted on advice of legal counsel,
accountants, brokers or consultants of the Partnership, or for any costs,
damages or liabilities arising therefrom, or by law, unless that act or omission
was performed or omitted fraudulently or in bad faith or constituted gross
negligence or willful misconduct, (b) any tax liability imposed on the
Partnership or the Limited Partners or (c) any loss due to the negligence,
dishonesty or bad faith of any employee, officer, broker, consultant or other
agent of the Partnership selected, engaged or retained in good faith by the
General Partners or any member, manager, or stockholder in any General
Partner.

      

      Section 8.6.    Indemnification.

      

      (a)    The Partnership shall
indemnify, hold harmless and defend the General Partners, their interest
holders, and the members, managers and employees of the General Partners
(including investment advisers appointed pursuant to Section 8.2) and
the affiliates of the General Partners and the officers, agents and employees of
such affiliates (each an “Indemnified Party”),
from and against any loss, expense, damage or injury suffered or sustained by
them, by reason of any acts, omissions or alleged acts or omissions arising out
of their activities on behalf of the Partnership or in furtherance of the
interests of the Partnership, including but not limited to any judgment, award,
settlement, reasonable attorneys’ fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim and including any payments made by the General Partners to any affiliate,
or any of their respective members, managers or employees pursuant to an
indemnification agreement no broader than this Section 8.6, provided, that none
of the General Partners, any of their affiliates, any member, manager, officer,
agent or employee of any General Partner or any affiliate of a General Partner
shall be entitled to indemnification under this Section 8.6(a) if the
acts, omissions or alleged acts or omissions upon which such actual or
threatened action, proceeding or claims are based were performed or omitted
fraudulently or in bad faith or constituted gross negligence or willful
misconduct.

       

      
         

         

        
          
            
            

          

          
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      (b)           The
Partnership shall indemnify, hold harmless and defend the Limited Partners,
including, but not limited to, their trustees and beneficiaries (each
an  “Indemnified Party”),
from and against any loss, expense, damage or injury suffered or sustained by
them, by reason of any acts, omissions or alleged acts or omissions arising out
of their activities on behalf of the Partnership or in furtherance of the
interests of the Partnership, including but not limited to any judgment, award,
settlement, reasonable attorneys’ fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim and including any payments made by the Limited Partners to any trustee or
beneficiary pursuant to an indemnification agreement no broader than this Section 8.6, provided, that none
of the Limited Partners, any of their affiliates, any officer, agent or employee
of the Limited Partners or any of their affiliates shall be entitled to
indemnification under this Section 8.6(b) if the
acts, omissions or alleged acts or omissions upon which such actual or
threatened action, proceeding or claims are based were performed or omitted
fraudulently or in bad faith or constituted gross negligence or willful
misconduct.

      

      (c)           Any
indemnification pursuant to this Section 8.6
shall be only from the assets of the Partnership.

      

      Section 8.7.    Admission of Additional
General Partners.  Any
Person may be admitted to the Partnership as an Additional General Partner at
any time upon the written consent of each General Partner, if any is remaining
at such time, and the affirmative vote of seventy-five percent (75%) in interest
of the Limited Partners at such time.  Such Person shall make such
Capital Contributions as all of the General Partners shall determine, shall
agree in writing to be bound by the terms of this Agreement, and shall thereupon
have such of the rights of a General Partner as provided herein as all of the
General Partners may determine to grant such Person.  Upon admission
of an Additional General Partner, the Percentage Interest of each Partner shall
be adjusted in accordance with Section
4.5(c).

      

      Section 8.8.    Tax Matters
Partner.

      

      (a)           For
purposes of Code section 6231(a)(7), if the Partnership requires a “Tax Matters
Partner”, the “Tax Matters Partner” shall be the General Partner or, if there is
more than one General Partner, whichever General Partner is designated by a
majority of the General Partners as the “Tax Matters Partner”, in each case for
so long as such General Partner remains a general partner of the
Partnership.  The Tax Matters Partner shall keep the Limited Partners
fully informed of any inquiry, examination or proceeding.

       

      
         

         

        
          
            
            

          

          
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      (b)           The
Tax Matters Partner shall promptly notify Partners who do not qualify as “notice
partners” within the meaning of Code section 6231(a)(8) of the beginning and
completion of an administrative proceeding at the Partnership level promptly
upon such notice being received by the Tax Matters Partner.

      

       

      ARTICLE
IX

       

      TRANSFERS
OF INTERESTS BY PARTNERS

      

      Section 9.1.      Transfer of Interest By
General Partners.

      

      

      (a)           Except
as otherwise provided in Section 9.3, and
except for a transfer to any other General Partner or any other Limited Partner,
no General Partner may sell, assign, pledge or in any manner dispose of, or
create, or suffer the creation of, a security interest in or any encumbrance on
all or a portion of its Interest in the Partnership (the commission of any such
act being referred to as a “Transfer,” any Person
who effects a Transfer being referred to as a “Transferor” and any
person to whom a Transfer is effected being referred to as a “Transferee”), without
the prior unanimous consent of all General Partners and seventy-five percent
(75%) in interest of the Limited Partners which consent may be granted or
withheld in each Partner’s sole discretion.  No Transfer of an
Interest under this Section 9.1 shall be effective until such date as all
requirements of this Section 9.1 in respect thereof have been satisfied and, if
consents, approvals or waivers are required by the Partners, all of same shall
have been confirmed in writing by the Partners.

      

      (b)           The
Transferee of a General Partner’s Interest may be admitted to the Partnership as
a Substituted General Partner only upon the receipt of the prior written consent
of each General Partner and seventy-five percent (75%) in interest of the
Limited Partners, which consent may be given or withheld in each Partner’s sole
discretion.

      

      Section 9.2.    Transfer and Assignment of
Limited Partners’ Interests; Substituted Limited
Partners.

      

      (a)           Except
as otherwise provided in Section 9.2(b) and
Section 9.3,
and except for a Transfer to any other General Partner or any other Limited
Partner, no Limited Partner may Transfer all or a portion of that Limited
Partner’s Interest (including any beneficial interest therein) except to the
following one or more Persons:

      

      (i)           any
one or more members of the Immediate Family of Richard T. Farmer;

       

      
         

         

        
          
            
            

          

          
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      (ii)           the
trustee or  trustees of any one or more trusts for the primary benefit
of any one or more members of the group consisting of the Immediate Family of
Richard T. Farmer, the spouse of Richard T. Farmer, or a charitable organization
described in Code section 501(c)(3), provided that all of the beneficiaries of
such trusts (a) to whom current distributions of income and/or principal may be
made, and (b) to whom trust property would be distributable if such trust
terminated by its terms immediately after the Transfer, shall be members of the
group consisting of the Immediate Family of Richard T. Farmer, the spouse of
Richard T. Farmer, or a charitable organization described in Code section
501(c)(3), and further provided that, notwithstanding the foregoing, the terms
of such trust may permit one or members of the Immediate Family of Richard T.
Farmer to be granted a general power of appointment (as such term is defined in
Code section 2041(b)(1)), exercisable only at the death of such member of the
Immediate Family of Richard T. Farmer and, except in the case of a trust
intended to qualify for a marital deduction under section 2523(e) or section
2056(b)(5) of the Code (“a general power of appointment marital trust”),
exercisable only with the consent of one or more of the trustees of the trust
other than such member and, except in the case of a general power of appointment
marital trust, exercisable over only any portion of the assets of such trust
that, in the absence of such general power of appointment, would be subject to
Federal generation-skipping transfer tax upon such death;

      

      (iii)           with
respect to any member of the Immediate Family of Richard T. Farmer, the trustee
or trustees of any one or more trusts for the benefit of such individual’s
spouse, provided that such trust prohibits a distribution of all or any portion
of the trust’s Interest to such spouse except to the extent required to obtain a
marital deduction for Federal gift or estate tax purposes (if the trust is
intended to qualify for such a deduction), and further provided that except for
the interest of such individual’s spouse in the trust, such trust otherwise
satisfies the requirements of Section 9.2(a)(ii);
and

      

      (iv)           any
entity in which all of the ownership interests are owned by members of the
Immediate Family of Richard T. Farmer.

       

      (b)           If
a Limited Partner shall receive a bona fide offer in writing from an independent
unaffiliated party (who must be financially capable of carrying out the terms of
the offer) in a form legally enforceable against the proposed purchaser (a
“Bona Fide
Offer”), the Limited Partner may accept such Bona Fide Offer provided
that the Transfer by the Limited Partner pursuant to such Bona Fide Offer shall
be subject to a right of first refusal as provided herein.  The
Transferor shall give the General Partners written notice of the proposed
Transfer which shall state the name of the proposed Transferee, the portion of
the Transferor’s Interest proposed to be transferred, the proposed purchase
price for the Interest to be transferred, and any other material terms of such
proposed Transfer.  The Partnership shall, for a period of thirty (30)
days after such notice is given, have the right to purchase such Interest at the
proposed purchase price and on the proposed terms or to assign such right or any
portion thereof to such other Person or Persons as the General Partners, in
their sole discretion, shall determine.

      

      (c)           If
a Limited Partner shall make a Transfer pursuant to Section 9.2(a) or
Section 9.2(b),
the Transferee shall become a Substituted Limited Partner, provided the
following conditions are met:

      

      (i)           the
Transferee executes documents reasonably satisfactory to the General Partners
pursuant to which the Transferee agrees to be bound by this Agreement and any
amendments hereto;

       

      
         

         

        
          
            
            

          

          
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      (ii)           the
Transferee assumes, if so requested, the obligations, if any, of the Transferor
to the Partnership;

      

      (iii)           all
certificates or other instruments shall have been recorded or filed in the
proper records of each jurisdiction in which such recordation or filing is
necessary to qualify the Partnership to conduct business or to preserve the
limited liability of the Limited Partners under the laws of the jurisdiction in
which the Partnership is doing business; and

      

      (iv)           The
Transferee represents, and, at the request of the General Partners, furnishes to
the Partnership an opinion of counsel satisfactory to the General Partners, in
form and substance satisfactory to the General Partners, as to such matters as
the General Partners may reasonably request including, without limitation, that
such Transfer (A) was made in accordance with and would not violate the
Securities Act of 1933, as amended, or any other applicable Federal, state or
local law; (B) would not require the Partnership to register as an
investment company under the Investment Company Act of 1940, as amended; (C)
would not jeopardize the status of the Partnership as a partnership for Federal
income tax purposes or cause a termination of the Partnership pursuant to the
then applicable provisions of the Code and the Act; and (D) would not cause the
Partnership to be treated as a “publicly traded partnership” within the meaning
of Section 7704 of the Code.

      

      (d)           All
expenses incurred by the Partnership in connection with any Transfer or
substitution of a Limited Partner pursuant to this Section 9.2 shall be
paid by the Transferor prior to the time of the Transfer or substitution
(including, without limitation, any fees and costs of the preparation, filing
and publishing of any amendment to this Agreement or to the Certificate, if any,
and any legal and other fees, expenses and costs of any investigation and
preparation, in connection with any action, proceeding or investigation related
to any Transfer or attempted Transfer by a Limited Partner of a Limited
Partner’s Interest or in connection with the admission into the Partnership of
the Transferee).  The Transferor also will indemnify the Partnership
and the General Partners against any losses, claims, damages or liabilities to
which any of them may become subject in connection therewith.  The
reimbursement and indemnity obligations of the Transferor under this paragraph
shall be in addition to any liability which the Transferor may otherwise have,
shall extend upon the same terms and conditions to the Partnership and the
General Partners, shall inure to the benefit of any successors and assigns of
the Partnership and the General Partners and shall survive any termination of
this Agreement.

      

      (e)           The
Transfer of a Limited Partner’s Interest and the admission of a Substituted
Limited Partner shall not be cause for dissolution of the
Partnership.

      

      Section 9.3.    Right to Treat
Successor-in-Interest as Assignee.  Upon
the death, disability, winding-up and termination (in the case of a Partner that
is a partnership), dissolution (in the case of a Partner that is a limited
liability company), dissolution and termination (in the case of a Partner that
is a corporation), termination (in the case of a Partner that is a trust),
withdrawal in contravention of Section 5.3 or
occurrence of an event described in Section 17-402 (a)(4) (a)-(f) of the
Act with regard to a Partner, whether a Limited Partner or a General Partner
(the “Assigning
Partner”), the General Partners shall have the right to treat the
successor(s)-in-interest of the Assigning Partner, other than a
successor-in-interest who becomes a Substituted Limited Partner pursuant to
Section 9.2, as
assignees of the Interest of the Assigning Partner, with only such rights of an
assignee of a partnership interest under the Act as are consistent with the
other terms and provisions of this Agreement and with no other rights under this
Agreement.  Without limiting the generality of the foregoing, the
successor(s)-in-interest of the Assigning Partner, other than a
successor-in-interest who becomes a Substituted Limited Partner pursuant to
Section 9.2,
shall have only the rights to the allocations provided in Article IV and the
distributions provided in Article
V.  For purposes of this Section 9.3, if the
Assigning Partner’s Interest is held by more than one person (for purposes of
this subsection, the “Assignees”), the
Assignees by majority vote shall appoint one person with full authority to
accept notices and distributions with respect to such Interest on behalf of the
Assignees and to bind them with respect to all matters in connection with the
Partnership or this Agreement.

       

      
         

         

        
          
            
            

          

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      Section 9.4.     Transferees Bound by
Agreement.  Any
successor or Transferee of a Limited Partner hereunder or any successor or
Transferee of a General Partner shall be subject to and bound by all the
provisions of this Agreement as if originally a party to this
Agreement.

      

      Section 9.5.    Effect of
Transfer.  Upon
the Transfer of the entire Interest in the Partnership of a Partner and
effective upon the admission of such Partner’s Transferee(s) pursuant to either
Section 9.1 or
Section 9.2,
the transferring Partner shall be deemed to have withdrawn from the Partnership
as a Partner.  Any Transfer or purported Transfer of an Interest in
the Partnership not made in accordance with this Agreement shall be null and
void and of no force or effect whatsoever, and to the extent, but only to the
extent, any such Transfer or purported Transfer shall not be null and void, each
of the remaining Partners (other than the Transferor or the Transferee) shall
have the right to purchase a share of the Interest subject to such Transfer or
purported Transfer proportionate to each such remaining Partner’s Interest in
the Partnership for the aggregate sum of One Hundred Dollars
($100.00).

      

       

      ARTICLE
X

       

      WITHDRAWAL
OF PARTNERS; DISSOLUTION OF PARTNERSHIP;

      LIQUIDATION
AND DISTRIBUTION OF ASSETS

      

      Section 10.1.    Withdrawal of
Partners.  No
Partner may withdraw from the Partnership without the unanimous consent of all
Partners, which consent may be granted or withheld in their sole
discretion.  Any Partner withdrawing in contravention of this Section 10.1 shall
indemnify, defend and hold harmless the Partnership and all other Partners from
and against any losses, expenses, judgments, fines, settlements or damages
suffered or incurred by the Partnership or any other Partner arising out of or
resulting from such retirement or withdrawal.  No transfer of all or a
portion of a Partner’s interest in accordance with Article IX shall
constitute a withdrawal within the meaning of this Section
10.1.  In the event of withdrawal of the remaining General
Partner under Section 17-402 of the Act, the Partnership shall not dissolve but
a successor General Partner (who shall be a person or entity other than any
Limited Partner, any former Limited Partner or anyone related or subordinate to
any Limited Partner or any former Limited Partner within the meaning of Section
672(c) of the Code) shall be appointed by the Limited Partners.

       

      
         

         

        
          
            
            

          

          
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      Section
10.2.    Dissolution of
Partnership.

      

      (a)           The
Partnership shall be dissolved, wound up and terminated as provided herein upon
the occurrence of the earliest of the following events:

      

      
        	
                 
      

              	
                (i)

              	
                the
      written consent of all General Partners to dissolve the Partnership;
      or

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                the
      entry of a decree of judicial dissolution under Section 17-802 of the
      Act.

              

      

      

      (b)           In
the event of the dissolution of the Partnership for any reason, the General
Partners remaining in the Partnership, or, if there is no General Partner
remaining, then a liquidating agent or committee appointed by seventy-five
percent (75%) in interest of the Limited Partners (the General Partners or such
Person or committee so designated hereinafter referred to as the “Liquidator”), shall
begin to wind up the affairs of the Partnership and to liquidate the
Partnership’s assets.  The Partners shall continue to share all
income, losses and distributions during the period of liquidation in accordance
with Articles
IV and V.  The
Liquidator shall have full right and unlimited discretion to determine the time,
manner and terms of any sale or sales of Partnership property pursuant to such
liquidation, giving due regard to the activity and condition of the relevant
market and general financial and economic conditions.

      

      (c)           The
Liquidator shall have all of the rights and powers with respect to the assets
and liabilities of the Partnership in connection with the liquidation and
termination of the Partnership that the General Partners would have with respect
to the assets and liabilities of the Partnership during the term of the
Partnership, and the Liquidator is hereby expressly authorized and empowered to
execute and file any and all documents (including a certificate of dissolution)
necessary or desirable to effectuate the liquidation and termination of the
Partnership and the transfer of any assets.

      

      (d)           Notwithstanding
the foregoing, a Liquidator which is not a General Partner shall not be deemed a
Partner in this Partnership and shall not have any of the economic interests in
the Partnership of a Partner; and such Liquidator shall be compensated for its
services to the Partnership at normal, customary and competitive rates for its
services to the Partnership as reasonably determined by seventy-five percent
(75%) in interest of the Limited Partners.

      

      Section 10.3.    Distribution in
Liquidation.  The
Liquidator shall, as soon as practicable, wind up the affairs of the Partnership
and sell and/or distribute the assets of the Partnership.  The assets
of the Partnership shall be applied in the following order of
priority:

      

      (a)           First,
to creditors of the Partnership (including Partners who are creditors to the
extent permitted by law), in the order of priority provided by law.

       

      
         

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

      

      

      (b)           Second,
to establish reserves reasonably adequate to meet any and all contingent or
unforeseen liabilities or obligations of the Partnership, provided that at the
expiration of such period of time as the Liquidator may deem advisable, the
balance of such reserves remaining after the payment of such contingencies or
liabilities shall be distributed as hereinafter provided.

      

      (c)           Third,
to the Partners in accordance with Section 5.1.

      

      If the Liquidator, in its sole
discretion, determines that assets other than cash are to be distributed, then
the Liquidator shall cause the fair market value of the assets not so liquidated
to be determined.  Such assets shall be retained or distributed by the
Liquidator as follows:

       

                  (i)    The
Liquidator shall retain assets having an appraised value, net of any liability
related thereto, equal to the amount by which the net proceeds of liquidated
assets are insufficient to satisfy the requirements of paragraphs (a)
and (b) of this
Section 10.3;
and

       

                  (ii)    The remaining assets
shall be distributed to the Partners in the same proportion as cash would be
distributed to the Partners pursuant to paragraph (c) of this Section
10.3.

       

      If the
Liquidator, in its sole discretion, deems it not feasible or desirable to
distribute to each Partner its allocable share of each asset, the Liquidator may
allocate and distribute specific assets to one or more Partners, individually or
as tenants-in-common, as the Liquidator shall in good faith determine to be fair
and equitable, taking into consideration, inter alia, the fair market
value of the assets, the liens, if any, to which such property may be subject
and the tax consequences of the proposed distribution to each of the Partners
(including both distributees and others if any).  Any distributions in
kind shall be subject to such conditions relating to the disposition and
management thereof as the Liquidator deems reasonable and
equitable.

      

      Section 10.4.    Rights of the Limited
Partners.  Each
of the Limited Partners shall look solely to the assets of the Partnership for
all distributions with respect to the Partnership and such Partner’s Capital
Account or Capital Contributions thereto (including return thereof), and such
Partner’s share of profits or losses thereof, and shall have no recourse
therefor (upon dissolution or otherwise) against the General Partners or any
other Limited Partner.  No Partner shall have any right to demand or
receive property other than cash upon dissolution and termination of the
Partnership.

      

      Section 10.5.    Deficit
Restoration.  Notwithstanding
any other provision of this Agreement to the contrary, upon liquidation of a
Partner’s Interest (whether or not in connection with a liquidation of the
Partnership), no Partner shall have any liability to restore any deficit in its
Capital Account.  In addition, no allocation to any Partner of any
loss, whether attributable to depreciation or otherwise, shall create any asset
of or obligation to the Partnership, even if such allocation reduces a Partner’s
Capital Account or creates or increases a deficit in such Partner’s Capital
Account; it is also the intent of the Partners that no Partner shall be
obligated to pay any such amount to or for the account of the Partnership or any
creditor of the Partnership (however, if any court of competent jurisdiction
holds that, notwithstanding the provisions of this Agreement, the Limited
Partner is obligated to make any such payment, such obligation shall be the
obligation of such Limited Partner and not of the General Partners or of the
Partnership).  The obligations of the Partners to make contributions
pursuant to Article
III are for the exclusive benefit of the Partnership and not of any
creditor of the Partnership; no such creditor is intended as a third-party
beneficiary of this Agreement nor shall any such creditor have any rights
hereunder, including without limitation the right to enforce any Capital
Contribution obligation of the Partners.

       

      
         

         

        
          
            
            

          

          
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      Section 10.6.     Termination.  The
Partnership shall terminate when all property owned by the Partnership shall
have been disposed of and the assets shall have been distributed as provided in
Section
10.3.  The Liquidator shall then execute and cause to be filed
a Certificate of Cancellation of the Partnership.

      

       

      ARTICLE
XI

       

      AMENDMENT
OF PARTNERSHIP AGREEMENT AND POWER OF ATTORNEY

      

      Section 11.1.    Approval of
Amendments.  Amendments
to this Agreement which do not adversely affect the right of the Limited
Partners in any material respect may be made by the General Partners without the
consent of the Limited Partners if those amendments are (i) of an
inconsequential nature (as determined in good faith by the General Partners),
(ii) necessary to maintain the Partnership’s status as a partnership
according to Code section 7701(a)(2), (iii) necessary to preserve the
validity of any and all allocations of Partnership income, gain, loss or
deduction pursuant to Code section 704(b), or (iv) contemplated by this
Agreement (including without limitation amendments in connection with the
admission of new Partners, making of additional Capital Contributions or
withdrawal of a Partner).  Amendments to this Agreement other than
those described in the foregoing sentence and other than any amendment with
respect to distributions from or the liquidation (including, but not limited to,
the dissolution) of the Partnership may be made only if embodied in an
instrument signed by all General Partners and all Limited
Partners.  Any amendment with respect to any matter relating to any
distribution from or liquidation (including, but not limited to, the
dissolution) of the Partnership shall be made only by the General Partners;
provided, however, that no such amendment shall change a Partner’s entitlement
to participate in any distribution (including, but not limited to, any
liquidating distribution) as provided herein.  Any such supplemental
agreement or amendment shall be adhered to and have the same effect from and
after its effective date as if the same had originally been embodied in, and
formed a part of, this Agreement.  The General Partners shall give
written notice to all Partners promptly after any amendment has become
effective.  Any amendment to this Agreement must be in
writing.

       

      
         

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

      

      

      Section 11.2.    Amendment of
Certificate.  In
the event this Agreement shall be amended pursuant to Section 11.1, the
General Partners shall amend the Certificate to reflect that change if they deem
the amendment of the Certificate to be necessary or appropriate.

      

      Section 11.3.    Power of
Attorney.  Each
Limited Partner hereby irrevocably constitutes and appoints each General Partner
(and the Liquidator) as its true and lawful attorney-in-fact, with full power of
substitution, in its name, place and stead to make, execute, sign, acknowledge
(including swearing to), record and file, on behalf of it and on behalf of the
Partnership, the following:

      

      (a)           The
Certificate and any other certificates or instruments which may be required to
be filed by the Partnership or any of the Partners under the laws of the State
of Delaware and any other jurisdiction whose laws may be
applicable;

      

      (b)           A
certificate of cancellation of the Partnership and such other instruments as may
be deemed necessary or desirable by the holder of such power upon the
termination of the Partnership; and

      

      (c)           Any
and all amendments of the instruments described in paragraphs (a) and
(b) of this
Section 11.3, provided such amendments are either required by law to be filed or
have been authorized by the Limited Partners.

      

      The foregoing grant of
authority:

      
         

                   (i)    shall survive the
delivery of an assignment by a Limited Partner of the whole or any portion of
its Interest and any assignee of such Limited Partner does hereby constitute and
appoint the aforesaid holders the assignee’s attorney in the same manner and
force and for the same purposes as does the assignor;

         

        
                    (ii)    is a special power of
attorney coupled with an interest, is irrevocable and shall survive the death or
incapacity of the Limited Partner granting the power; and

        

         

        
                    (iii)      may be exercised by the
holder on behalf of a Limited Partner by a facsimile signature or by listing all
of the Limited Partners executing any instrument with a single signature as
attorney-in-fact for all of them.

           

           

          
             

             

            
              
                
                

              

              
                21

                
                  

                

              

              
                
                

              

            

          

           

        

      

      ARTICLE
XII

       

      MISCELLANEOUS

      

      Section 12.1.    Notices.  All
notices and demands required or permitted under this Agreement shall be in
writing and shall be provided by personal delivery, facsimile transmission,
electronic mail, deposit with a nationally recognized overnight delivery courier
service or deposit in the registered or certified mail, postage prepaid (with a
copy via first class mail), to the addresses of the Partners as shown from time
to time on the records of the Partnership.  Notice shall be deemed
effective upon deposit in accordance with the foregoing sentence.  Any
Partner may specify a different address by notifying the General Partners in
writing of that different address among them, and may be modified or amended
only in writing as set forth herein.

      

      Section 12.2.    Entire
Agreement.  This
Agreement constitutes the entire agreement among the parties.  It
supersedes any prior agreement or understandings among them, and may be modified
or amended only in writing as set forth herein.

      

      Section 12.3.    Governing
Law.  This
Agreement and the rights of the parties hereunder shall be governed by and
interpreted in accordance with the law of the State of Delaware.

      

      Section 12.4.    Effect.  Except
as herein otherwise specifically provided, this Agreement shall be binding upon
and inure to the benefit of the parties and their legal representatives,
successors and assigns.

      

      Section 12.5.    Pronouns and
Number.  Wherever
it appears appropriate from the context, each term stated in either the singular
or the plural shall include the singular and the plural, and pronouns stated in
either the masculine, feminine or neuter shall include the masculine, feminine
and neuter.

      

      Section 12.6.     Captions.  Captions
contained in this Agreement are inserted only as a matter of convenience and in
no way define, limit or extend the scope or intent of this Agreement or any
provision hereof.

      

      Section 12.7.    Partial
Enforceability.  If
any provision of this Agreement, or the application of that provision to any
Person or circumstance, shall be held invalid, the remainder of this Agreement,
or the application of that provision to persons or circumstances other than
those to which it is held invalid, shall not be affected thereby.

       

      
         

         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

      

      

      Section 12.8.    Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be deemed
an original but all of which shall constitute one and the same
instrument.  In addition, this Agreement may contain more than one
counterpart of the signature page and this Agreement may be executed by the
affixing of the signatures of each of the Partners to one of such counterpart
signature pages.  All of those counterpart signatures pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.

      

      Section 12.9.    Litigation.  In
the event that it is necessary to resort to litigation to enforce or construe
the terms of this Agreement, the prevailing party in such action shall recover
from the non-prevailing party all costs of litigation, including without
limitation attorneys’ fees, expert witness fees and court costs at all levels of
litigation and appeals.

      

      

      

      

      

      

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          23 

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the undersigned
have executed this Agreement as of the date first written above.

      

      GENERAL
PARTNER:

      

      Summer
Hill Management Company, LLC

      

      By:  /s/ Scott D. Farmer                                                                                           

              Scott
D. Farmer, Manager

      

      

      

      LIMITED
PARTNERS:

      

       
/s/ Richard T. Farmer                  

      Richard
T. Farmer

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      24

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