Court Opinion

ID: 4065805
Source: CourtListenerOpinion
Date Created: 2016-09-29 22:15:51.78876+00
Date Added: 2024-06-11T14:32:26.705873
License: Public Domain

NO.04-15-00320-CV

                                                             FILED IN
                                                      4th COURT OF APPEALS
                   IN THE COURT OF APPEALS             SAN ANTONIO, TEXAS
                  FOURTH DISTRICT OF TEXAS            8/31/2015 6:23:54 PM
                      SAN ANTONIO, TEXAS                KEITH E. HOTTLE
                                                              Clerk

   JONATHAN SHURBERG AS PERSONAL REPRESENTATIVE OF THE
 EST ATE OF REBECCA LORD, INDIVIDUALLY AND DERIV ATIVEL YON
    BEHALF OF LA SALLE INDUSTRIES, A LIMITED PARTNERSHIP,
                                                       ApPELLANT,

                                 V.

   LA SALLE INDUSTRIES LIMITED, ROY G. MARTIN JR. PROPERTY
  MANAGEMENT, INC., ROY MARTIN, ELIZABETH MARTIN, JENNIFER
  LORD, BRENDA LORD, KENT LORD, JANIE MARTIN, MARK MARTIN,
              THOMAS L. MARTIN, AND JILL MARTIN,
                                                       ApPELLEES.

                             ApPENDIX

Tab 1            Trial Court's Judgment (CR 386-87)

Tab 2            Limited Partnership Agreement (CR 243-58)

Tab 3            Texas Business Organizations Code § 152.204

Tab 4            Texas Business Organizations Code § 153.113

Tab 5            Texas Business Organizations Code § 153.253

Tab 6            Texas Business Organizations Code § 153.402

Tab 7            Texas Business Organizations Code § 153.552
TAB 1
                                                          NO. 14-08-001S4-CVL

                 JONATHAN SHURBERG AS                                     §     IN THE DISTRICT COURT
                 INDEPENDENT EXECUTOR OF THE                              §
                 ESTATE OF REBECCA LORD,                                  §
                           Plaintiff                                      §
                                                                          §
                                  w.                                      §     LA SALLE COUNTY, TEXAS
                                                                          §
               LA SALLE INDUSTRIES, LIMITED,                              §
               ROY G. MARTIN, JR. PROPERTY                                §
               MANAGEMENT, INC.,; ROY MARTIN;                             §
               ELIZABETH MARTIN; JENNIFER LORD;                           §
               BRENDA LORD; KENT LORD; JANIE                              §
               MARTIN, MARK MARTIN, THOMAS L.                             §
             . MARTIN and JILL MARTIN,                                    §     218TH DISTRICT COURT
                          Defendants                                      §

                         ORDER ON DEFENDANTS' MOTION TO DISMISS FOR LACK OF
                                 STANDINGfPLEA TO THE JURISDICTION

                        On February        24th, 2015, came on Defendants'        Motion to Dismiss for Lack of

                 Standing/Plea      to the Jurisdiction   for hearing.   The Parties appeared through counsel and

                 announced   1/   ready". The Court, having considered the Motion and having considered the

                 evidence and argument         of Counsel, finds that the Motion should be GRANTED.

                        It is, accordingly,     ORDERED, ADJUDGED             AND DECREED that this cause is

                 dismissed for want of subject matter jurisdiction.           Costs are assessed against the Party

                 which incurred them. This is a final, appealable judgment.

                 SIGNED this~day               of ~             , 2015

         FILED FOR RECORD
../\t   7. 1/5o'clock  d                  M.

                                                ~n to Dismiss for Lack of St~ndingIPlea to the Jurisdiction   Pagel
Approved    as to form:
    ,------J
  L/    ';f;fIr
   . eJ
Robert J. Myers
MYERS"'k LAW
2525 Ridgmar Blvd., Ste. 150
Fort Worth, TX 76116
817.731.2500
ATTORNEYS         FOR DEFENDANTS

  ;-4-(      4;Afo-N      J      6y 1~·7    f.Jfu!Cl0f-
Steve McConni&                                      rT
Steve Wingard
SCOTT, DOUGLASS & McCONNICO,                 LLP
600 Congress Ave., Ste. 1500
Austin, TX 78701
512.495.6300
ATTORNEYS FOR DEFENDANTS

  Patton G. Lochridge
  Michael A. Shaunessy
  McGINNIS LOCHRIDGE
  600 Congress Ave., Ste. 2100
  Austin, TX 78701
  512495-6061
. and
  Christopher L. Halgren
  711 Louisiana St., Ste. 1600
  Houston, TX 77002
  713.615.8500
  ATTORNEYS FOR PLAINTIFFS

 Order on Defendants'   Motion   to Dismiss for Lack of StandingIPlea   to the Jurisdiction   Page2
TAB 2
                                 EXHIBIT     il)

                         LIMITED PARTNERSHIP AGREEMENT

     AGREEMENT of Limited Partnership made this 1st day of June, 1985,
between LA SALLE INDUSTRIES, INC., hereinafter referred to as the General
Partner, and CHARLES LORD, hereinafter referred to 8S Limited Partner.
                                 ARTICLE 1.
                                     FORMATION

                                    Organization
      l.O} .     The parties hereby form 8 Limited Partnership, herein called
the partnership, under and pursuant to the Texas Limited partnership Act,
Article 6132a of the Revised Civil Statutes of the State of Texas.
                               statutory Require~ent
      1.02       The  parties   hereby shall immediately execute a Certificate
of Limited Partnership,       and cause such a certificate     to be filed with
the Secretary of State of Texas and, thereafter,           execute and ~au6e to
be filed and otherwise published, such original or amended certificates
evidenCing the [ormation and operation of this Limited Partnership whenever
the same may be required under the laws of the State of Texas and of any
other states !"here the Partnership        shall determine to do business. The
General Partner is hereby authorized and empowered by the Limited Partner
to prepare, file and publish either the original or any amended or modified
Certificates of Limited Partnership as may be necessary         or desirable and
the Limited Partner specifically designates and appoints the General·Partner,
for and on his behalf as his attorney for the eXClusive purposes of signing
and attesting to such original or amended Certificates of Limited Partnership.
                              Purposes of Partnership
      1.03       The purposes of the Partnership shall be as follows:
            (1)  To engage     generally    in the farm and ranching business;
      to improve and develop such farms and ranches, including the cons t ruct.Lon ,
      alteration or repair of buildings or structures on the real property
      involved in such ranching business; to invest in farm and ranch real
      properties, as well as to sell real and personal property, to eXchange
      real and personal property for like property, to lease, to make contracts
      concerning such farm and ranch properties.
            (2)  To engage generally in the oil business, to acquire, to
      own, hold, develop, lease, and otherwise operate mineral properties,
      either as an operator, managing agent, principal,           agent, partner,
      stockholder, syndicate member, a6sociate, joint venturer, participant,
      or other, including participating to the extent of a·non-partici~ating
      royalty; to invest funds in, and to raise funds to be invested in
      such business; to purchase, construcl, or otherwise acquire and own,
      develop, operate, lease, mortgage, pledge and to sell or otherwise
      dispose of plants, facilities, refineries, pi pa lLnes , and other properties

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                                                                                       ShurbergOOO117
                                           243
     nnd any interest therein1 and to do any Bnd all things necessary
     or incident thereto.
           (3) To enter Partnership Agreements in the capacity of a general
     partner or a limited pa rt ner , to become a member of a joint venture,
     or to participate in some other form of syndication for investment;
     and to buy, sell, lease, and deal in services, personal pr o pe r t y ,
     and real property.
                                 ARTICLE II.
                         NAMES AND PLACE OF BUSINESS
                         Name of Limited partnership
     2.01       The name of the Limited Partnership shall be LA SALLE INDUS-
TRIES, LTD. The business of the Partnership shall be conducted undeI
such name and under such variations of this name as may be necessary to
comply with the law6 of other states within which the Partnership may
do business.
                The General Partner shall promptly execute and duly file
with the proper offices in each state in which the Partnership may conduct
the activities he~einafter authorized one or more certificates as required
by the Fictitious Name or Assumed Name Act or s Lm ILa r statute in effect
as to each state in which such activities are so conducted.
                   Location of Principal Place of Business
     2.02      .The principal place of business shall be located at Post
Office Box 614, Cotulla, La Salle County, Texas, but additional places
of business may be located elsewhere.
                            Names and Addresses or
                       Places of Residence of Partners
     2,03 OJ    The name and address of the General Partner of this Partnership
is:
     LA SALLE INDUSTRIES, INC.            3510 Buntwick
                                          San Antonio, Texas 78230
There are no other general partners of this Partnership and no other person
or enti ty has any right to take part in the active management of the business
and affairs of the Partnership.
           (2)  The name and a ddr ess or place of residence of the Limited
Partner of this Partnership is set forth on Exhibit ·Aft, attached hereto,
incorporated   herein and made a part hereof by this reference. There are
no other limited partners to the Partner6hip other than those listed in
the attached Exhibit ·A·,
                                 ARTICLE Ill.
                             TERM OF PARTHRRSHIP
     3.01      The Partnership shall commence as of the date of this Agreement
and shall continue until December 31, 2015, unless it is sooner terruinated~
liquidated, or dis60lved as hereinafter provided.
                                  ARTICLE    IV.
                           CONTRIBUTIONS     OF CAPITAL
                           Initial Contributions
     4.01      The capital to be contributed initially to the Partnership
by the General Partner and the Limited Partners shall be property andlor
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                                                                                  Shurberg000118
                                   244
cash.    The initial capital to be con t r ibuted by the General and Limited
Partner shall be the property and/or sum set opposite his/its name on
Exhibit "AM attached hereto.      Each partner shall be personally liable
to the Partnership to contribu~e to the capital of the partnership the
full amount of his/its initial capital contribution.
                            Future Contributions
      4.02      The Limited Partner shall not be required to make any additional
capital contributions.
                                  ARTICLE V.
                              PROFITS AND LOSSES
                           Interest of Each Partner
      5.01'     The amount of net profits and net lasses of the Partnership
to be allocated to and charged against each Partner shall be determined
by the percentage set opposite his/its name in Exhibit "A".
                       Definition of Profits and Losses
      5.02      The term 'profits" is hereby defined to be income or gain
of whatsoever kind actually incurred by the Partnership or which, because
of generally accepted accounting procedures, must be deemed to have been
incurred by the Partnership.     'The term 'losses~ is hereby defined to be
any deduction, expenditure, or charge actually incurred by the Partnership
or which, because of generally accepted accounting        procedures, must be
deemed to have,been incurred by the Partnership.
                               Cash Distributions
      5.03      Cash, when available, may be distributed by the General
Partner to all partners in the same ratio as profits and losses are shared.
Cash distributions from the Partnership may be -ma de by the General Partner
to all partners without regard to the profits or losses of the Partnership
from operations; provided, that no cash distributions shall be made which
will impair the ability of the Partnership to pay its just debts as they
mature. The General Partner shall determine when, if ever, cash distributions
shall be made to the partners, pursuant to the provisions and the tenor
of this Agreement.     There shall be no obligation to return to the General
Partner or the Limited Partner, or to anyone       of them, any part of their
capital contribution     to the Partnership,    for so long as the Partnership
continues in existence. No General or Limited Partner shall be entitled
to any priority or preference over any other partner as to cash distributions.
                No interest shall be paid to any partner on the initial
contributions to the capital of the partnership or on any subsequent contribu-
tions of capital.
                                   ARTICLE VI.
                       OWNERSHIP OF PARTNERSHIP PROPERTY
      6.01       All real or personal property, including all imprOVements
placed or located thereon, acquired by the Partnership          shall be owned
by the Partnership,     such ownership being subject to the other terms and
 proviSions of this Agreement.     Each Partner hereby expressly waives the
 right to require partition of any Partnership Property or any part thereof.

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                                                                                   Shurberg000119
                                     245
                                                         ARTICLE VII.
                                                        FISCAL        HATTERS
                                           Partnership              Accounting            Year
        7.01             The     Partnership'~                 books        and records               and all         required         income
tax returns        shall       be kept or made                 on the calendar                     year      basis.         The General
Partner        shall     determine              whether         the       cash     or accrual                method       of accounting
is to be used in keeping                    the Partnership                  records.
                                                      BOOKS     and Recorda
        7.02             The     General           Partner           shall        keep         at     the     principal            place       of
business        and     make     available              to     ill    Partners                at     any     time        during        normal
business        hours,         just       and    trUe        books        of account               and all         other       Partnership
records.       "The copying            by a Partner,                or his         designated                agent,         of any        part
or all of such           records,         at the personal                 express of that Partner                     is specifically-
authorized.             within        not more           than        ninety            (90)        days      after        the     close        of
each     calendar        year        of    the     Partnership,                  the General                Partner       shall furnish
,to all    partners           a year        ending           balance         sheet            for     the     Partnership               and     B

full    and detailed           financial           report       on the business                      operations          of the Partner-
ship for and during               the entire            preceding            year.             The       General         Partner"       shall
furnish        to ail     partners              any     additional               information                 needed         or necessary
to complete        their       Federal          and State           income        tax forms,                including          statements
of the     net     distributable                income        or loss to each                   partner        from       the operation
of the Partnership.                   All of the above                duties           and      services            to    be performed
by the General           Partner          shall       be deemed           an expenee               of the Partnership.
                                            Partnership              Bank        Accounts
        7.03             The General             Partner        ahall        receive all moneys of the Partnership
and shall       deposit        the same           in    one     or more            Partnership                 banking          accounts.
All     expenditures            by    the General               Partners            shall            be made         by     checks       drawn
against      the Partnership               banking           account.
                                                         ARTICLE VIII.
                                      MANAGEMENT OF PARTNERSHIP                               AFFAIRS
                                                 Cont~ol        and Management
        9.01             The     General           Partner           shall        have          sole        nnd exclusive              control
of the     Limited         Partnership.                  Subject            to    any         limitations                expressly            set
forth      in this        Agreement,              the     General           Partner                shall      have       the     power        and
authority        to take         such      action         from        time        to     time         as     they     may       deem     to be
necessary,         appropriate              or convenient                   in connection                    with        the management
and the conduct           of the business                     and     affairs            of        the     Limited         Partnership,
 including      without limitation  the power to:
                (1) Acquire    or dispose of real property                                               (including         any interest
         therein)       for     ce ah , securities,                   other        property                 (including           like-kind
        exchanges),             or any combination                    thereof           upon         such    terms        and conditions
        aa the General               Partner       may,       f r om time         to time,               determine             (including,
        in instances           where       the property               is encumbered,                     on either         an assumption
         or a ·subject           to· basis):
                  (2)    Acquire,           own,       hold,     improve,          manage,               and lease          such property,
         either       alone     or in conjunction                    with    others            through         partnerships,

                                                                      4

                                                                                                                                                    Shurberg000120

                                                               246
limited partnerships,    joint ventures, or other business associations
or entities;
      (3) Finance the Partnership's activities either with the seller
 of such property or by bocrowing money from third parties, all on
 such terms and conditions as the General Partner deems appropriate.
In instances where money is borrowed for partnership purposes, the
General Partner shall be, and hereby is, authorized to pledge, mortgage,
encumber, and grant security interest in Partnership properties for
repayment of such loans;
      (4) Employ,      retain, or otherwise secure or enter into other
contracts wi th personnel or firms to assi st in the acquisi tion, develop-
ing,' improving, managing, and general operation of the Partnership
properties, including, but not limited to real estate brokers or
agents, supervisory,       development   andlor building management agents,
attorneys, accountants,       and engineers, all on such terms and for
such consideration as the General Partner deems advisable, and
      (5) Take any and all other action which is permitted under
the Texas Limited Partnership Act and which is customary or reasona~ly
related' to the acquisition,        ownership, development, improvement,
management, leasing and disposition of oil and gas interests, real,
personal or mixed property.
      (6) .The General Partner, to the exclusion of the LilnitedPartners,
shall own the executive rights with regard to all real property owned
by the Limited Partnership         and shall be vested with the sole and
abSOlute discretion and power to make and execute leases with respect
to surface and subsurface minerals and other substances, whether'
the same be, including but not limited to, oil, gas, uranium, lignite,
sand, gravel or any other substance which is or may be in t.hefuture
the SUbject of commercial leases.        Further, by way of illustration,
and not by way of limitation,         the General Partner, to the exclusion
of the Limited Partners, and without any consent or approval of the
Limited     Partners being required, shall have the following powers
and authority:
              (a) To negotiate, make and enter into oil, gas and other
      mineral (or anyone or more of them) leases covering any lands
      or mineral or royalty interest at any time forming a part of
      the trust estate.
              (bJ To pool andlor unitize any part or all of the lanos,
      rni ne raI leasehold,   or mineral, royalty or other interests of
      the life estate with lands, mineral leaseholds, mineral, royalty
      or other interests of other persons, corporations           or trusts
      for the purpose of developing and producing Oil, gas and other
      minerals     (or anyone    or mote of them) therefrom, and to make
      leases or assignments       granting to the lessee or assignee the
      right to pool andlor unitize.
              (c) To enter into contracts and agreements for or in respect
      of the installation andlor operation of plants or other facilities

                                     5

                                                                              Shurberg000121
                               247
      for the cycling, repressur i nq , processing, or other treatment
      or handling of oil, gas and other minerals (or anyone       or more
      of them).
            (d) To drill o r, cont.ract for the drilling of wells for
      oil, gas and other minerals (or anyone or more of them).
            (e) To contract for and make Mdry hole" andlor "bottom
     hole" contributions of cash, lease acreage or other interests
      toward the drilling of wells.
            ef) To purchase oil, gas and lor other mineral leases or
     interests for cash, and to ~cquire same by "farmout agreements,
                                                          h

      requiring   the 'drilling or reworking of one or more wells or
     'participation therein.
            (g) To enter into "farmout" contracts or agreements committing
      the life estate to assign oil, gas and/or other mineral leases
      or interests therein in consideration for drilling of a well
     or wells or other oil, gas andlor mineral operations.
            (W  To negotiate   the transfer of, and to transfer, oil,
      gas and/or other mineral leases or interests therein for any
     consideration    (such as a retained overriding royalty interest,
     drilling or reworking commitments Dr production payments) or
     for cash or for both cash and such consideration •
          . (1) To execute and enter into any and all contracts, convey-
     ances, and other agreements or transfers deemed necessary or
     desirable to carry out the powers granted hereby, inClUding,
     without limitation, the power to enter into and execute division
     orders,.oil, gas and/or other hydrocarbon sales contracts, processing
      agreements, and other contracts relating to the processing,
      handling,   treating, transporting, and marketing of oil, gas
      and/or other mineral production from or accruing to the timited
      partnership, and to receive and receipt for the proceeds thereof
      on behalf of the Limited Partnership.
      (7) Any and all lease bonuses, delay rentals, shut-in payments
and any and all other compensation which may be derived in connection
with ~he execution of the above-described       leases shall be paid to
the Limited Partnership and shall constitute a Limited partnership
asset.
      (8) Further,    in connection with the power and authority of
the General Partner to sellar otherwise dispose of any and all assets
in the Limited Partnership, the General Partner may enter into such
transactions during the first ten (10) years of this Limited Partner-
ship agreement with the consent and approval of seventy-five percent
 (75%) in interest, not in numbers, of the Limited Partners, and from
and after such ten (10) year period, the General Partner may sell
or dispose of Partnership assets with the consent and approval of
forty percent (40%) in interest, not in numbers, of the Limited Partners.
 In the event the General Partner shall also be a Limited Partner,
such General Partner's vote as a Limited Partner shall be counted

                                    6

                                                                             ShurbergOOO 122

                              248
      for all purposes.      Notwithstanding     the foregoing provisions, the
      General Partner shall have the absolute power and authority to enter
      into contracts to make like-kina exchanges of both real and personal
      property, and mineral interests without the consent. or approval of
      the Limited Partners.
            (9) Notwithstanding      the provisions of Section 8.04, Removal
      of General Partner, the executive r~9htB described herein to be vested
      in the General Partner, LA SALLE INDUSTRIES·,    INC.,  shall remain vested
      in LA SALLE INDUSTRIES, INC., its successor and assigns whether LA
      SALLE INDUSTRIES, INC. is removed as a General Partner or not.
                        Responsibility of General Partner
      8.02 .     The General Partner shall exercise ordinary business judgment
in managing the affairs of the Partnership. Always, unless fraud, deceit,
or a wrongful taking shall be involved, the General Partner shall not
be liable or obligated to the Limited Partner for any mistake of fact
of judgment made by the General Partner in operating the business of the
Partnership, which results in any loss to the Partnership or its Partners.
The General Partner does not, in any way, guarantee the return of the
Limited Partner's capital or a profit from the operations of the partnership.
Neither shall the General Partner be responsible to the Limited Partner
because of a loss of his investment nor a loss in operations, unless it
shall have been occasioned by fraud, deceit, or a wrongful taking by the
General Partner.      The General Partner shall devote such attention and
business capacity to the affairs of the Partnership as may be reasonably
necessary. In this connection, the parties hereby acknowledge that the
General Partner may be the manager or general partner of other partnerships
~nd may continue to manage other partnerships, and may continue to engage
in other distinct or related businesses.
                                      Nominees
      B.03       All partners recognize that sometimes there are practical
difficulties In doing business as a limited partnership, occasioned by
outsiders seeking to satisfy themselves relative to the capacity of of
the General Partner to act for and on behalf of the partnership, or for
other reasons. Therefore, the Limited Partners hereby specifically authorize
the General Partner to acquire all real and personal property, arrange
all financing, enter contracts, and complete all other arrangements needed
to effectuate the purposes of this Partnership, either in its own name
or in the name of a nominee, without having to disclose the e~iBtence
of this Partnership. If the General Partner de cLdes to transact the Partner-
 ship business in its own name or in the name of a nominee, it shall place
 a written declaration of trust in the partnership        books and records that
acknowledges the nominee's capacity in which it acts and the name of the
 true or equitable owner, being the Limited Partnership.
                            Removal. of General. Partner
       8.04      Any General Partner may be removed by the affirmative vote
 of ninety percent (90%) in interent, not in number, of the Limited Partners.
 The written notice of the General Partner's removal shall be served upon

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                                                                                    Shurberg000123

                                     249
him by certif led mall.     Said notice shall set forth the day on which said
removal is to be effective, which date shall not be less than thirty (30)
days after the service of said notice on the General Partner. Upon the
removal of the General Partnert the Limited Partners shall elect a new
General Partner on the "vote of fifty-five percent (55%)       in interest, not
in number, of the Limited Partners, at a special meeting called for that
purpose.    The removal of a General Partner shall cause his interest in
the Partnet~hip    to be converted to a Limited Partnership interest but
shall not alter or change its rights or resp:msibilities pur suant. to Paragraphs
11.02 and 11.03 of this Agreement.
                        Compensation of General Partner
     e .05·     The General    Partner will receive such compensation for
acting as General Partner as a majority in interest of the Limited Partners
shall agree upon, and shall be entitled to reimbursement for any expenses
paid by it arising out of the business of the Partnership.
                       Restrictions on Limited Partners
     8.06       The Limited Partners shall not have either the obligation
or the right to take part, directly or indirectly, in the active management
of the bUsiness and no Limited Partner is authorized to do or perform
any act, thing, or deed in the name of or for or on behalf of either the
General Partner or the Partnership.        No Limited Partner is authorized
to and shall ~ot, directly or indirectly, have a voice in or take part
in the business affairs Or business operations of the Partnership. No
Limited Partner ia authorized to and shall not be permitted to do any
act, deed or thing which will cause such Limited Partner to be classified
as·n General Partner of the partnership.
                                  ARTICLE      IX.
                                 LlAB!LITIES
                            Liability of Partners
     9.01      The liability of the General Partner arising from carrying
on the business affairs or operations of the Partnership or for the debts
of the Partnership is unrestricted. The liability of the Limited Partners
with regard to the Partnership in all respects is restricted and limited
to the amount of the actual capital contributions that each Limited Partner
makes or agrees to make to the partnership.       The Limited Partners can
not be assessed to make an additional capital contribution to the Partnership
above that which each Limited Partner agrees to make to the Partnership.
If additional capital contributions     to the Partnership are required and
are made by a General partner, it shall not entitle the General Partner
to a greater share of the profits or cash distributions of the Partnership
than otherwise is provided in this Agreement.
                          Loans to the Partnership
     9.02      Nothing hereby shall prevent or act against a General or
Limited Partner loaning money to the partnership on a promisaory note
or similar ev i.den ce of indebtedness,   for a reasonable rate of interest.
Any partner loaning money to the Partnership shall have the same rights

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                                                                                    Shurberg000124
                                     250
~ega~ding the loan as would any person or entity making the loan who was
not a Partner of the Partnership.
                                  ARTICLB     X.
                            PROHIBITED TRANSACTIONS
     10.01      During the time of the organization Or continuance of this
Limited Partnership, neither the General or Limited Partners hereof shall
do "anyone of the following:
           (1)  Use the name of the Partnership (or any substantially similar
     name) or any trademark or trade name adopted by the Partnership,
     except in the ord i nary course of the Partnership's business;
           (2) Disclose to any nonpartner any of the Partnership business
     practices, trade sec~ets, or any other information not generally
     known to the business community I
           (3) Do any other act or deed with the intention of harming
     the business operations of the partnership,
           (4) Do any act contrary to the Limited Partnership Agreement,
     except with the prior expressed written approval of all partners;
           (5) Do any act which would make it impossible to carryon the
     intended' or ordinary business of the Partnership;
           (6) Confess a judgment against the Partnersbip~
           (7) Abandon or wrongfully transfer or dispose of Partnership
     property,. real or personal; and
           (B) Admit another      person or entity as a General Or Limited
     Partner.
                Further,   the General Partner shall not use, directly or
indirectly, the assets of this Partnership for any purpose other than
carrying on the business of this Partnership, for the full and exclusive
benefit of all its partners.
                                 ARTICLE      XI.
                          RESTRICTIONSON ~SFERS
                        Prohibition Against ~ransferB
     11.01      Except as hereinafter     set forth, no Limited Partner shall
sell, assign, transfer, encumber or otherwise dispose of any interest
in the Partnership without the written consent of the General Partner.
                                Permitted Sues
     11.02      Permitted Sales:
           (1) In the event a Limited Partner receives a bona fide offer
     for the purchase of all or a part of his interest in the partnership,
     said Limited Partner shall either refuse such offer or give the other
     Limited Partners (offerees) written notice setting out full details
     of such offer, which notice, arnon q other things, shall specify the
     name of the offeror, the percentage of interest in the Partnership
     covered by the offer, terms of payment, whether for cash or credit,
     and, if on credit, the time and interest rate, as well as any and
     all other consideration     being received or paid in connection with
     such proposed transaction, as well as any and all other terms, conditions,
     and details of such offer.

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                                                                                  ShurbergOOO 125
                                    251
      (2) Upon receipt     of the notice with respect to such offer,
the Limited Partners shall have the exclusive right and option, exercis-
able at any time during a period of thirty (30) days from the date
of said notice, to pur chaae,the interest in the Partnership covered
by the offer in question at the lesser of:        (1)  the same price and
on the same terms and conditions of the offer as set out in such
notice or (li) II price equal to one-half (1/2) of the Limited Partners'
share of the fair matket value of all Limited Partnersbip assets,
with such assets being valued as a whole in accordance with the fo11""'ing
methods of Valuation, with the purchase price to be paid under this
formula on the following terms:       ten percent (10%) of the price as
determined above in cash at closing, and the balance of the price
to be payable in twenty (20) equal annual installments, plus interest,
with inte~est being equal to the prime rate as is then being charged
by the National Bank of Commerce of San Antonio, or its successors
or assigns, but in any event not more than nine percent (9\).
      In connection with valuing the assets of the Partnership, in
the event the Limited Partner offering to sell his interest does
not agree with the offeree Limited Partners with respect to the value
of the personal and real property and surface rights, then the General
Partner sball select an app[aise~ who is qualified to appraise the
type of property involved, and the opinion of such appraiser shall
be binding upon the parties for all purposes.         With 'respect to the
mineral interests andlor estates, if the mineral estates are in produc-
tion, then the value of such producing interest shall be determined
by averaging the groBs mineral income derived by the Limited partnership
over the previous five (5) years, or in the event the mineral production
has not been In existence for the previous five (5) years, then the
ave~age shall be for whatever period of time the mineral proQuction
has been in existence and with respect to non-producing mineral acreage,
the value of such non-producing mineral acreage shall be determined
in accordance with the provisions set forth above for valuing the
surface estate. The price to be paid for the producing and non-producing
mineral interests shall be one-half (l/2) of the Limited Partners'
share of the full fair market value of such mineral interests and
 the purchase price shall be paid in accordance with the BaIDe terms
and provisions as a purchase price shall be paid for the real property
 and personal property.    If the Limited Partners decide to exercise
 the option, they shall give written notification of this effect to
 the Limited Partner desiring to sell, and said sale and purchase
 shall be closed within thirty (30) days thereafter. If the Limited
 Partners do not elect to exercise their option, the selling Limited
 Partner shall be so notified in writing and shall be free to sell
 the interest in the partnership covered by the offer.         Such sale,
 if permitted, shall be made strictly upon the terms and conditions
 and to the person described in the required notice.

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           (3) In the event that more than one (1) but not all of the
     offeree Limited Partners shall elect to purchase the interest of
     the Limited Partner desiring to sell his interest, then the offeree
     Limited Partner shall be ~ntitled to purchase a pro rata share of
     the interest offer for sale, with such pro rata share being determined
     by dividing each Limited Partner's percentage interest in the Limited
     Partnership by the sum of the Limited Partnership interest of all
     Limited Partners electing to purchase such Limited Partner's interest.
           (4) Notwithstanding     any of the foregoing provisions, in the
     event a Limited Partner shall desire to sell or transfer or assign
     his interest in the Limited Partnership to another Limited Partner,
     then the above-described options on behalf of the other Limited Partners
     shall not apply.
           (5) Any assignment made to anyone, not already a partner, shall
     be effective only to give the assignee the right to receive the share
     of the profits to which his assignor would otherwise be entitled,
     shall not relieve the assignor from liability under any agreement
     to make additional contributions      to capital, shall not relieve the
     assignor from liability under the provisions of this Partnership
     Agreement,    and shall not give the assignee the right to become a
     substituted Limited Partner.      Neither the General Partner nor the
     Partnership shall be required to determine the tax consequences to
     a Limited Partner or his assignee, arising from the assignment of
     8 limited   partnership   interest. The Partnership shall continue with
     the aame basis and capital amount for the assignee as was attributable
     to the former owner who assigned the limited partnership interest.
     The partnership interest of the General Partner can not be voluntarily
     assigned or transferred except when such occurs by operation of law.
                              Buy-Se11 Provisions
     11.03      At any time subsequent to the execution of this Agreement
any Partner whether General or Limited (·OfferorW)    may offer to purchase
all of the interest in the Limited Partnership of the other Limited Partner
or the General Partner ("Offeree/sa) or to sell all of the Offeror's interest
in the Limited Partnership      to the Offeree at a purchase price designated
in the offer.
     11.04      Any offer made under thi s ARTICLE XI shall be in writing
and signed by the Offeror making such offer, or signed by the Offeror's
deSignated representative.       Any offer, to be effective, must be either
hand delivered or mailed certified mail, return receipt requested, or
mailed by registered mail, to the Offeree's last known place of business
or residence. Further, such offer shall set forth all of the terms, condi-
tions, including methods of payment and interest rates, if applicable,
collateral security and any other pertinent details to the offer.
     11.05      The Offeree shall within thirty (30) days of the date of
mailing of or delivery of, if hand delivered, such offer, ele ct to ei ther
sell the Offeree's interest in the Limited partnership at such price and
on the basis of such terms and conditions as are Bet forth in such offer,

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                                                       (
                                                       .J:

or in the alternative,    to purchase the Offeror's interest in the Limited
Partnership, at such price and on such terms and conditions as Were set
forth in such offer. The Offeree shall notify the Offeror of the Offeree's
election in writing within eai.d thirty (30) day period.       In the event
the Offeree shall make no such election within such thirty (30) day period,
then it shall be conclusively deemed that the Offeree has elected to sell
the Offeree's interest in the Limited Partnership on the basis and conditions
Bet forth in the offer.
       11.06    The sale or purchase of the interest to be acquired shall
be closed within thirty (30) days after the election of the Offeree to
e cqu Ire the interest of the Offeror, or in the event the Offeree fails
to respon~ to such offer, then at the end of Sixty (50} days from the
date of such offer, and the closing in either event shall take place at
the location and time specified in the offer.
                                    ARTICLE   XII.
                       TERMINATION     OF TIlE PARTNERSHIP
                           ~ermination upon Withdrawal,
                      Bankruptcy,     Death or Incapacity
                                of General Partners
      12.01     The General Partner, effective as of the last day of any
calendar year of the Partnership, may voluntarily withdraw from the Partnership
as General Partner and such withdrawal shall have the effect of terminating
the Partnership'ae of the close of business on such last day. The bankruptcy,
death, incapacity or resi9nation of one General Partner shall not have
the effect of terminating the partnership and the other General Partner
shall continue to serve as the General Partner. But the bankruptcy, death,
incapacity o r+r es i qna t.Lon of all of the General Partners shall"'iEII,i'ult
in the Partnership terminating as of the close of business on the last
day of the calendar year in which such event occurs.           Notwithstanding
the foregoing provision, LA SALLE INDUSTRIES, INC. shall upon a dissolution
be entitled to demand and shall be vested with the executive rights set
forth   in Paragraph   8.01   (6) and (9), subject to the right of all Limited
Partners to share in any and all lease bonuses, delay rentals, shut-in
royalties or other compensation         as set forth in Pa raqraph B.01 (7), and
such executive rights shall be vested in LA SALLE INDUSTRIES, INC., its
succeSsors, assigns, legal representatives and in the successors, assigns
and heirs of any assignee of LA SALLE INDUSTRIES, INC.
                          Voluntary Termination: Effect
                             of Death or I.ncapacity of
                                  Limi ted Partner
      12.02      The  Partnership    roay be terminated upon any date specified
in a notice of termination, signed by the General Partner and a majority
of the Limited Partners.      As used herein, a majority of the Limited Partners
means Limited Partners having in the aggregate a majority of the capital
interest of the Limited Partners in the Partnership          as of the time such
notice of termination is executed. The death or incapacity of a Limited
Partner shall have no effect on t h e- life of the Partnership, which shall
continue.

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                                                                                ShurbergOOO128
                                       254
                            Effect of ~ Termination
                               of the Partnership
       12.03     Upon the termination     of the Partnership, regardless of
how it 1s terminated, the affairs of the Partnership shall be wound up
by the General Partner.      If for any reason there is no General Partner,
or if it refuses to serve, or is incapable of serving, over fifty percent
 (50%)   in interest, not in number, of the Limited Partners may appoint
or designate a Trustee-in-Liquldation who shall serve to wind up the affairs
of the Partnership.      The Trustee-in-Liquidation  need not be a commercial
corporate trustee, does not have to'be bonded, and may be a Limited Partner.
Whoever serves to wind up the affairs of the Partnership, shall follow
the procedures Bet forth below:
                 Upon such termination, the assets of the Partnership shall
be applied as follCMS: to payment of the outstanding Partnership liabilities,
although an appropriate reserve may be maintained and the amount determined
by the General Partner or Trustee-in-Liquidation for any contingent liability
until said contingent liability is satisfied, and the balance of such
reserve, if any, shall be distributed together with any other sum remaining
after payment of the outstanding Partnership liabilities to the Partners
as their interest appears on Exhibit "A- unless otherwise provided herein.
                 Provided, that nothing contained in this Agreement shall
defeat the right of either a Limited or a General Partner to require and
to have a court-supervised      winding up, liquidation,   and dissolution of
the Partnership. No Partner shall be entitled to demand a distribution
be made to him in partnership property, but the General Partner may make
or direct property distributions to be made, using the property's fair
market value as of the time of distribution, as the basis for making the
distribution.
                                 ARTICLE XIII.
                          MISCltt·t.ANEOOS   PROVISIONS
                                    lImendJuent:
     13.01      This Agreement    may   be amended or modified by the Partners
from time to time but only by a written instrument executed by Partnera
owning collectively at least ninety-fiVe percent (95%) in interest, not
in number, in the Partnership.
                                      Notices
     13.02      Except as may be otherwise specifically       provided in this
Agreement, all notices required or permitted hereunder shall be writing
and shall be deemed to be delivered when deposi ted in the United States
mail, postage prepaid, registered or certified mail, return receipt requested,
addressed to the parties at the respective addresses set forth on Exhibit
"A", or at such other addresses as may have been theretofore specified
by written notice delivered in accordance herewith.
                               Texas Lev to Apply
     13.03      This Agreement shall be construed under and in accordance
with the laws of the state of Texas, and all obligations of the parties
created hereunder are performable in La Salle county, Texas.

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                                      255
                             other Iostruaenta
       13.04   The parties hereto covenant and agree that they will execute
Buch other and further instruments    and documents as are or may become
necessary or convenient to effectuate snd carry out the Partnership created
by this Agreement.
                                    Beadings
     13 .05     The headings used in this Agreement are used for administrative
purposes only and do not c'onstitute s u b s t an t Lve matter to be c on ai dered
in construing the terms of this Agreement.
                                  Parties Bound
     13 .06     This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
legal representatives,     successors and assigns where permitted by this
Agreement.
                         Prior Agreements Superseded
     13.07      This Agreement supersedes any prior understandings or oral
agreements between the parties respecting the within subject matter.
                               Legal construction
     13.08    - If anyone     or more of the provisions contained in this
partnership Agreement for any reason are held to be invalid, illegal or
unenforceable   in any respect, such invalidity,         illegality or unenforce-
ability shall not affect any other provision hereof and this Partnership
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
                                  Counterparts
     13.09      This Partnership    Agreement may be executed in any number
of counterparts and each of such counterparts         shall for all purposes be
deemed to be an original.
                                              Gender
     13.10     Wherever  the context shall so require, all words herein
in the male gender shall be deemed to include the female or neuter gender,
all singular words shall inClude the plural, and all plural words shall
include the singular.
     DATED this 1st day of June, 1985.

GENERAL PARTNER:                                          ADDRESS:

LA SALLE INDUSTRIES, INC., a
Texas corporation
By: ,C ..,f£J~~7..,-!.,.~7
    CHARLES LORD,
                             .:._2::::;;::~               3510 lluntwick
                                                          San Antonio, Texas   78230
    President
LIMITED PARTNER:

                                                          Post Office Box 614
                                                          CDtulla, Texas 78014

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                                               256
                                                                   ~Il'      vA-
                                                                     m;E C!lE

                                                             LA SlILL8 JOtUJOSJ1