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EXHIBIT 10.2
AGREEMENT
OF LIMITED PARTNERSHIP OF
PLUM CREEK ACQUISITION PARTNERS, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP, dated as of July 16, 1998, is
entered into by and among Plum Creek Timber Company, Inc., as the General
Partner, and Plum Creek Timber I, L.L.C. as the sole Limited Partner. In
consideration of the covenants, conditions and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
ORGANIZATIONAL MATTERS
1.1 Formation and Continuation. The Partnership is formed as a limited
partnership pursuant to the provisions of the Delaware Act. Except as expressly
provided herein to the contrary, the rights and obligations of the Partners and
the administration, dissolution and termination of the Partnership shall be
governed by the Delaware Act. The Partnership Interest of each Partner shall be
personal property for all purposes.
1.2 Name. The name of the Partnership shall be "Plum Creek Acquisition
Partners, L.P." The Partnership's business may be conducted under any other name
or names deemed advisable by the General Partner, including the name of the
General Partner or any Affiliate thereof. The words "Limited Partnership,"
"L.P.," "Ltd." or similar words or letters shall be included in the
Partnership's name where necessary for the purposes of complying with the laws
of any jurisdiction that so requires. The General Partner in its sole discretion
may change the name of the Partnership at any time and from time to time and
shall notify the Limited Partners of such change in the next regular
communication to Limited Partners.
1.3 Registered Office; Principal Office. The address of the registered
office of the Partnership in the State of Delaware shall be located at The
Corporation Trust Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office shall be The
Corporation Trust Company. The principal office of the Partnership shall be ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other place as the General
Partner may from time to time designate by notice to the Limited
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Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.
1.4 Power of Attorney. (a) The Limited Partner and each Assignee hereby
constitutes and appoints each of the General Partner and, if a Liquidator shall
have been selected pursuant to Section 14.3 hereof, the Liquidator severally
(and any successor to either thereof by merger, transfer, assignment, election
or otherwise) and authorized officers and attorneys-in-fact of each, with full
power of substitution, as its true and lawful agent and attorney-in-fact, with
full power and authority in its name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in
the appropriate public offices (A) all certificates, documents
and other instruments (including, without limitation, this
Agreement and the Certificate of Limited Partnership and all
amendments or restatements thereof) that the General Partner
or the Liquidator deems appropriate or necessary to form,
qualify or continue the existence or qualification of, the
Partnership as a limited partnership (or a partnership in
which the limited partners have limited liability) in the
State of Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (B) all
instruments that the General Partner or the Liquidator deems
appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement or the Deposit
Agreement in accordance with their respective terms; (C) all
conveyances and other instruments or documents that the
General Partner or the Liquidator deems appropriate or
necessary to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation;
(D) all instruments relating to the admission, withdrawal,
removal or substitution of any Partner pursuant to, or other
events described in, Article XI, XII, III or XIV hereof or the
Capital Contribution of any Partner; (E) all certificates,
documents and other instruments relating to the determination
of the rights, preferences and privileges of any class or
series of Units or other securities issued pursuant to Section
4.4 hereof; and (F) all agreements and other instruments
(including, without limitation, a certificate of merger)
relating to a merger or consolidation of the Partnership
pursuant to Article XVI hereof;
(ii) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments
appropriate or necessary, in the
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sole discretion of the General Partner or the Liquidator, to
make, evidence, give, confirm or ratify any vote, consent,
approval, agreement or other action which is made or given by
the Partners hereunder or is consistent with the terms of this
Agreement or appropriate or necessary, in the sole discretion
of the General Partner or the Liquidator, to effectuate the
terms or intent of this Agreement; provided, that when
required by Section 15.3 hereof or any other provision of this
Agreement which establishes a percentage of the Limited
Partners or of the Limited Partners of any class or series
required to take any action, the General Partner or the
Liquidator may exercise the power of attorney made in this
subsection (ii) only after the necessary vote, consent or
approval of the Limited Partner or of the Limited Partners of
such class or series; and
(iii) on behalf of the Limited Partner and the Assignees, enter into
the Deposit Agreement and to deposit Certificates in the
Deposit Account pursuant to the Deposit Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article XV hereof or as may be
otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and not
be affected by the subsequent death, incompetency, disability, incapacity,
dissolution, bankruptcy or termination of the Limited Partner or Assignee and
the transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Interest and shall extend to such Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives. The Limited Partner or
Assignee hereby agrees to be bound by any representation made by the General
Partner or the Liquidator, acting in good faith pursuant to such power of
attorney; and the Limited Partner or Assignee hereby waives any and all defenses
which may be available to contest, negate or disaffirm the action of the General
Partner or the Liquidator, taken in good faith under such power of attorney. The
Limited Partner or Assignee shall execute and deliver to the General Partner or
the Liquidator, within 15 days after receipt of the General Partner's or the
Liquidator's request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidator deems necessary to
effectuate this Agreement and the purposes of the Partnership.
1.5 Term. The Partnership commenced upon the filing of the Certificate
of Limited Partnership in accordance with the Delaware Act and shall continue in
existence
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until the close of Partnership business on December 31, 2047, or until the
earlier termination of the Partnership in accordance with the provisions of
Article XIV hereof.
1.6 Possible Restrictions on Transfer. Notwithstanding anything to the
contrary contained herein, in the event of (i) the enactment (or imminent
enactment) of any legislation, (ii) the publication of any temporary or final
regulation by the Treasury Department, (iii) any ruling by the Internal Revenue
Service or (iv) any judicial decision, that, in any such case, in the Opinion of
Counsel, would result in the taxation of the Partnership for federal income tax
purposes as a corporation or as an association taxable as a corporation, then,
either (a) the General Partner may impose such restrictions on the transfer of
Units or Partnership Interests as may be required, in the Opinion of Counsel, to
prevent the taxation of the Partnership tor federal income tax purposes as a
corporation or as an association taxable as a corporation, including making any
amendments to this Agreement as the General Partner in its sole discretion may
determine to be necessary or appropriate in order to impose such restrictions,
provided, that any such amendment to this Agreement which would result in the
delisting or suspension of trading of any class of Units on any National
Securities Exchange on which such class of Units is then traded must be approved
by the holders of at least 66 2/3% of the outstanding Units of such class
(excluding for purposes of such determination any Units of such class owned by
the General Partner and its Affiliates) or (b) upon the recommendation of the
General Partner and the approval by the holders of at least 66 2/3% of the
outstanding Units (excluding for purposes of such determination any Units owned
by the General Partner and its Affiliates), the Partnership may be converted
into and reconstituted as a trust or any other type of legal entity (the "New
Entity") in the manner and on other terms so recommended and approved. In such
event, the business of the Partnership shall be continued by the New Entity and
the Units shall be converted into equity interests of the New Entity in the
manner and on the terms so recommended and approved. Notwithstanding the
foregoing, no such reconstitution shall take place unless the Partnership shall
have received an Opinion of Counsel to the effect that the liability of the
Limited Partners for the debts and obligations of the New Entity shall not,
unless such Limited Partners take part in the control of the business of the New
Entity, exceed that which otherwise had been applicable to such Limited Partners
as limited partners of the Partnership under the Delaware Act.
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ARTICLE II
DEFINITIONS
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 12.4 hereof and who is shown as such on
the books and records of the Partnership.
"Adjusted Capital Account" shall mean the Capital Account maintained
for each Partner as of the end of each fiscal year of the Partnership (a)
increased by any amounts which such Partner is obligated to restore under the
standards set by Treasury Regulation Section 1.704-1 (b)(2)(ii)(c) (or is deemed
obligated to restore under Treasury Regulation Sections 1.704-2(g) and
l.704-2(i)(5) and (b) decreased by (i) the amount of all losses and deductions
that, as of the end of such fiscal year, are reasonably expected to be allocated
to such Partner in subsequent years under Sections 704(e)(2) and 706(d) of the
Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of
all distributions that, as of the end of such fiscal year, are reasonably
expected to be made to such Partner in subsequent years in accordance with the
terms of this Agreement or otherwise to the extent they exceed offsetting
increases to such Partner's Capital Account that are reasonably expected to
occur during (or prior to) the year in which such distributions are reasonably
expected to be made (other than increases pursuant to a minimum gain chargeback
pursuant to Sections 5.l(d)(i) or 5.l(d)(ii)). The foregoing definition of
Adjusted Capital Account is intended to comply with the provisions of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
"Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Section 4.6(d)(i) or (d)(ii) hereof. Once an Adjusted
Property is deemed distributed by, and recontributed to, the Partnership for
federal income tax purposes upon a termination thereof pursuant to Section 708
of the Code, such property shall thereafter constitute a Contributed Property
until the Carrying Value of such property is further adjusted pursuant to
Section 4.6(d)(i) or (d)(ii) hereof.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, the Person in question. As used herein, the term "control" means the
possession, directly or indirectly,
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of the power to direct or cause the direction of the management and policies of
a Person, whether through ownership of voting securities, by contract or
otherwise.
"Agreed Allocation" shall mean any allocation, other than a Required
Allocation, of an item of income, gain, deduction or loss pursuant to the
provisions of Section 5.1, including a Curative Allocation (if appropriate to
the context in which the term "Agreed Allocations" is used).
"Agreed Value" of any Contributed Property means the fair market value
of such property or other consideration at the time of contribution as
determined by the General Partner using such reasonable method of valuation as
it may adopt; provided, however, that the Agreed Value of any property deemed
contributed to the Partnership for federal income tax purposes upon termination
and reconstitution thereof pursuant to Section 708 of the Code shall be
determined in accordance with Section 4.6(c) hereof. Subject to Section 4.6(c)
hereof, the General Partner shall, in its sole discretion, use such method as it
deems reasonable and appropriate to allocate the aggregate Agreed Value of
Contributed Properties contributed to the Partnership in a single or integrated
transaction among each separate property on a basis proportional to their fair
market values.
"Agreement" means this Agreement of Limited Partnership, as it may be
amended, supplemented or restated from time to time.
"Assignee" means a Non-citizen Assignee or a Person to whom one or more
Units have been transferred in a manner permitted under this Agreement and who
has executed and delivered a Transfer Application as required by this Agreement,
but who has not become a Substituted Limited Partner.
"Available Cash" means, with respect to any calendar quarter, (a) the
sum of:
(i) the Partnership's net income (or net loss) (excluding gain on
the sale of any Capital Asset) for such quarter,
(ii) the amount of depletion, depreciation, amortization and other
noncash charges (less noncash credits) utilized in determining
net income of the Partnership for such quarter,
(iii) the amount of any reduction in reserves of the Partnership of
the types referred to in (b)(v) below,
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(iv) proceeds received by the Partnership from the sale of any of
the Designated Acres, and
(v) any Cash from Capital Transactions received by the Partnership
during such quarter in specific contemplation that such Cash
from Capital Transactions will be used to refund or refinance
any payment of Debt of the type specified in clause (b)(i)
below which was made in any of the two prior quarters, less
(b) the sum of:
(i) all payments of principal on Debt made by the
Partnership in such quarter (excluding any payments
of principal on Debt made with Cash from Capital
Transactions received by the Partnership during such
quarter or the immediately preceding four quarters),
(ii) capital expenditures made by the Partnership during
such quarter (excluding any capital expenditures for
such quarter made with Cash from Capital Transactions
received by the Partnership during such quarter or
the immediately preceding four quarters, and capital
expenditures which the General Partner anticipates
will be financed with Cash from Capital Transactions
to be received by the Partnership prior to the end of
the next succeed quarter),
(iii) the amount of any capital expenditures, or
investments as specified in clause (b)(iv) below,
made by the Partnership in the immediately preceding
quarter which was anticipated would be financed from
Cash from Capital Transactions but which have not
been financed from such source prior to the end of
the quarter succeeding the quarter in which any such
capital expenditure or investment was made,
(iv) investments in any Subsidiary, Affiliate or any such
other entity to the extent that such investments are
not otherwise included under clauses (b)(i), (ii) or
(iii) above (excluding any such investments made with
Cash from Capital Transactions received by the
Partnership during such quarter or the immediately
preceding four quarters, or which the General Partner
anticipates will be made, with Cash from Capital
Transactions to be received by the Partnership prior
to the end of the next succeeding quarter);
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(v) the amount of any reserves of the Partnership
established during such quarter which are necessary
or appropriate (A) to provide fluids for the future
payment of items of the types specified in clauses
(b)(i) and (b)(ii) above, (B) to provide additional
working capital, (C) to provide funds for cash
distributions with respect to any one or more of the
next four quarters or (D) to provide funds for the
future payment of interest in an amount equal to the
interest to be accrued in the next quarter.
Notwithstanding the foregoing, "Available Cash" shall not take into
account any reductions in reserves or disbursements made or reserves established
after commencement of the dissolution and liquidation of the Partnership. In
determining "Available Cash", (i) all items under clauses (a)(i)-(v) above and
all items under clauses (b)(i)-(v) above shall be calculated on a combined basis
with any Subsidiary of the Partnership whose income is accounted for on a
combined basis with the Partnership and, in accordance therewith, "Available
Cash" shall include a percentage of each such item of each such Subsidiary equal
to the Partnership's percentage ownership interest in such Subsidiary, provided,
however, that the items under clauses (a)(i)-(v) above shall only be included in
Available Cash to the extent that the General Partner determines such amount to
be legally available for dividends or distributions to the Partnership by such
Subsidiary, (ii) the amount of net income and the amount of depletion,
depreciation, amortization and other noncash charges utilized in determining net
income shall be determined, with respect to the Partnership, by the General
Partner in accordance with generally accepted accounting principles and, with
respect to any Subsidiary, by its Board of Directors (or by such other body or
Person which has the ultimate management authority of such Subsidiary) in
accordance with generally accepted accounting principles, (iii) the net income
of any Subsidiary shall be determined on an after-tax basis, (iv) the amount of
any reductions in, or additions to, reserves for purposes of clauses (a)(iii)
and (b)(v) above shall be determined, with respect to the Partnership, by the
General Partner in its sole discretion as it deems appropriate and, with respect
to any Subsidiary, by its Board of Directors (or by such other body or Person
which has the ultimate management authority of such Subsidiary) in its sole
discretion as it deems appropriate and (v) any determination of whether any
capital expenditures or investments are financed, or anticipated to be financed,
with Cash from Capital Transactions for purposes of clauses (b)(ii) and (b)(iv)
above shall be made, with respect to the Partnership, by the General Partner in
its sole discretion as it deems appropriate and, with respect to any Subsidiary,
by its Board of Directors (or by such other body or person which has the
ultimate management authority of such Subsidiary) in its sole discretion as it
deems appropriate.
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"Book-Tax Disparity" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 4.6 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or the
State of New York shall not be regarded as a Business Day.
"Capital Account" means the capital account maintained for a Partner or
Assignee pursuant to Section 4.6 hereof.
"Capital Asset" means any asset on the Partnership's or Facilities
Subsidiary's balance sheet, as the case may be, other than inventory, accounts
receivable or any other current asset and assets disposed of in connection with
normal retirements or replacements.
"Capital Contribution" means any cash, cash equivalents or the Net
Agreed Value of Contributed Property which a Partner contributes to the
Partnership pursuant to Section 4.1, 4.4, 4.6(c), or 13.3(c) hereof.
"Capital Transactions" means (i) borrowings and sales of debt
securities (other than for working capital purposes and other than for items
purchased on open account in the ordinary course of business) by the
Partnership, (ii) sales of equity interests by the Partnership and (iii) sales
or other voluntary or involuntary dispositions of any assets of the Partnership
(other than (x) sales or other dispositions of inventory in the ordinary course
of business, (y) sales or other dispositions of other current assets including
receivables and accounts and (z) sales or other dispositions of assets as a part
of normal retirements or replacements), in each case prior to the commencement
of the dissolution and liquidation of the Partnership provided, that in
determining "Cash from Capital Transactions", items (i)-(iii) above shall
include, with respect to each Subsidiary of the Partnership whose income is
accounted for on a consolidated or combined basis with the Partnership, a
percentage of each such item of such Subsidiary equal to the Partnership's
percentage ownership interest in such Subsidiary.
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"Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
depletion (computed as a separate item of deduction), amortization and cost
recovery deductions charged to the Partners' Capital Accounts and (b) with
respect to any other Partnership property, the adjusted basis of such property
for federal income tax purposes, all as of the time of determination. The
Carrying Value of any property shall be adjusted from time to time in accordance
with Sections 4.6(d)(i) and 4.6(d)(ii) hereof, and to reflect changes, additions
or other adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the General Partner.
"Cash from Capital Transactions" means, at any date, such amounts of
cash as are determined by the General Partner to be cash made available to the
Partnership from or by reason of a Capital Transaction.
"Certificate" means a certificate issued by the Partnership evidencing
ownership of one or more Partnership Interests.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware as
referenced in Section 6.2 hereof, as such Certificate may be amended and/or
restated from time to time.
"Citizenship Certification" means a properly completed certificate in
such form as may be specified by the General Partner by which an Assignee or a
Limited Partner certifies that he (and if he is a nominee holding for the
account of another Person, that to the best of his knowledge such other Person)
is an Eligible Citizen.
"Closing Price" for any day means the last sale price on such day,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices on such day, regular way, in either case as
reported-in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Units of a class are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal National Securities
Exchange on which the Units of such class are listed or admitted to trading or,
if the Units of a class are not listed or admitted to trading on any National
Securities Exchange, the last quoted price on such day or, if not so quoted, the
average of the high bid and low asked prices on such day in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use, or, if on any such
day the Units of a class are not quoted by any such
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organization, the average of the closing bid and asked prices on such day as
furnished by a professional market maker making a market in the Units of such
class selected by the Board of Directors of the General Partner, or, if on any
such day no market maker is making a market in the Units of such class, the fair
value of such Units on such day as determined reasonably and in good faith by
the Board of Directors of the General Partner using any reasonable method of
valuation.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
"Contributed Property" means each property or other asset, in such form
as may be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership (or deemed contributed to the Partnership on termination and
reconstitution thereof pursuant to Section 708 of the Code). Once the Carrying
Value of a Contributed Property is adjusted pursuant to Section 4.6(d)(i)
hereof, such property shall no longer constitute a Contributed Property for
purposes of Section 5.1 hereof, but shall be deemed an Adjusted Property for
such purposes.
"Contributing Partner" means each Partner contributing (or deemed to
have contributed on termination and reconstitution of the Partnership pursuant
to Section 708 of the Code or otherwise) a Contributed Property.
"Curative Allocation" shall mean any allocation of an item of income,
gain, deduction, loss or credit pursuant to the provisions of Section
5.l(d)(xi).
"Current Market Price" shall have the meaning assigned to such term in
Section 17.1(a) hereof.
"Debt" means, as to any Person, as of any date of determination, (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person, (c) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof, (d) lease obligations of such Person
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which, in accordance with generally accepted accounting principles, should be
capitalized, and (e) such other obligations of such Person as the General
Partner may determine in its sole discretion are appropriate.
"Delaware Act" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del. C. 17-101, et seq., as it may be amended from time to time, and any
successor to such statute.
"Departing Partner" means a former General Partner, as of the effective
date of any withdrawal or removal of such former General Partner pursuant to
Section 13.1 hereof.
"Deposit Account" means the account established by the Depositary
pursuant to the Deposit Agreement.
"Deposit Agreement" means the Deposit Agreement among the General
Partner, in its capacity both as General Partner and as attorney-in-fact for the
Limited Partners, the Partnership and the Depositary, as it may be amended or
restated from time to time.
"Depositary" means the bank or other institution appointed by the
General Partner in its sole discretion to act as depositary for the Depositary
Units pursuant to the Deposit Agreement, or any successor to it as depositary.
"Depositary Receipt" means a depositary receipt, issued by the
Depositary or agents appointed by the Depositary in accordance with the Deposit
Agreement, evidencing ownership of one or more Depositary Units.
"Depositary Unit" means a depositary unit representing a Unit on
deposit with the Depositary pursuant to the Deposit Agreement.
"Designated Acres" means up to an aggregate of 150,000 acres of
property owned by the Partnership which may be designated by the General Partner
at the time of the sale thereof as constituting Designated Acres (such aggregate
number of acres to be determined over the term of the Partnership).
"Economic Risk of Loss" shall have the meaning set forth in Treasury
Regulation Section 1.752-2(a).
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"Eligible Citizen" means a Person qualified to own interests in real
property in jurisdictions in which the Partnership does business or proposes to
do business from time to time, and whose status as a Limited Partner or Assignee
does not or would not subject the Partnership to a substantial risk of
cancellation or forfeiture of any of their property or any interest therein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor to such statute.
"Facilities Subsidiary" means Plum Creek Marketing, Inc., a Delaware
corporation, and Plum Creek Manufacturing, L.P., a Delaware limited partnership.
"First Liquidation Target Amount" means an amount, determined with
respect to any Unit, which equals, as of the date of its determination, the sum
of (a) the Unrecovered Capital, if any, attributable to such Unit, plus (b)
First Target Amount, with respect to the calendar quarter as to which such
determination is made.
"First Target Amount" means $0.65 per Unit, subject to adjustment in
accordance with Sections 5.6 and 9.6 hereof.
"Fourth Liquidation Target Amount" means an amount, determined with
respect to any Unit, which equals, as of the date of its determination, the sum
of (a) the Third Liquidation Target Amount, if any, attributable to such Unit,
plus (b) the excess, if any, of the Fourth Target Amount over the Third Target
Amount, determined with respect to the calendar quarter as to which such
determination is made.
"Fourth Target Amount" means $0.85 per Unit, subject to adjustment in
accordance with Sections 5.6 and 9.6 hereof.
"General Partner" means Plum Creek Timber Company, Inc., a Delaware
corporation, and its successors as general partner of the Partnership.
"General Partner Equity Value" means, as of any date of determination,
the fair market value of the General Partner's Partnership Interest, as
determined by the General Partner using whatever reasonable method of valuation
it may adopt; provided, however, if any such valuation occurs at a time that the
General Partner or an Affiliate of the General Partner holds Units, such
Partnership Interests must be taken into account in determining the General
Partner Equity Value.
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"Incentive Distribution" means any amount of cash distributed to the
General Partner in its capacity as general partner, pursuant to Sections 5.4(e),
5.4(f), 5.4(g) or 5.4(h) which exceeds that amount equal to 2% of the aggregate
amount of cash then being distributed pursuant to such provisions.
"Indemnitee" means the General Partner, any Departing Partner, any
Person who is or was an Affiliate of the General Partner or any Departing
Partner, any Person who is or was an officer, director, employee, agent or
trustee of the General Partner or any Departing Partner or any Affiliate of the
General Partner or Departing Partner, or any Person who is or was serving at the
request of the General Partner or any Departing Partner or any Affiliate of the
General Partner or Departing Partner as a director, officer, employee, agent or
trustee of another Person, including any Subsidiary.
"Issue Price" means the price at which a Unit is purchased from the
Partnership, less any sales commission or underwriting discount charged to the
Partnership.
"Limited Partner" means each Substituted Limited Partner, each
Additional Limited Partner and any Departing Partner upon the change of its
status from General Partner to Limited Partner pursuant to Section 13.3 hereof
and, solely for purposes of Articles IV, V and VI hereof and Sections 14.3 and
14.4 hereof, shall include an Assignee.
"Limited Partner Equity Value" means, as of any date of determination,
the amount equal to the product of (a) the total number of Units outstanding
(immediately prior to an issuance of Units or distribution of cash or
Partnership property), other than Units held by the General Partner or an
Affiliate of the General Partner, multiplied by (b) (i) in the case of a
valuation required by Section 4.6(d)(i) (other than valuations caused by sales
of a de minimis quantity of Units) the Issue Price or (ii) in the case of a
valuation required by Section 4.6(d)(ii) (or a valuation required by Section
4.6(d)(i) caused by sales of a de minimus quantity of Units) the Closing Price.
"Liquidator" means the General Partner or other Person approved
pursuant to Section 14.3 hereof who performs the functions described therein.
"Minimum Gain Attributable to Partner Nonrecourse Debt" means that
amount determined in accordance with the principles of Treasury Regulation
Section I.704- 2(i)(2).
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"Minimum Quarterly Amount" means $0.60 per Unit per calendar quarter,
subject to adjustment in accordance with Sections 5.6 and 9.6 hereof.
"MQA" means Minimum Quarterly Amount
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Exchange Act.
"Net Agreed Value" means (a) in the case of any Contributed Property,
the Agreed Value of such property reduced by any liabilities either assumed by
the Partnership upon such contribution or to which such property is subject when
contributed and (b) in the case of any property distributed to a Partner or
Assignee by the Partnership, the Partnership's Carrying Value of such property
at the time such property is distributed, reduced by any indebtedness either
assumed by such Partner or Assignee upon such distribution or to which such
property is subject at the time of distribution as determined under Section 752
of the Code.
"Net Income" shall mean, for any taxable period, the excess, if any, of
the Partnership's items of income and gain (other than those items attributable
to dispositions constituting Termination Capital Transactions) for such taxable
period over the Partnership's items of loss and deduction (other than those
items attributable to dispositions constituting Termination Capital
Transactions) for such taxable period. The items included in the calculation of
Net Income shall be determined in accordance with Section 4.6(b) and shall not
include any items specially allocated under Section 5.1(d); provided that the
determination of the items that have been specially allocated under Section
5.1(d) shall be made as if Section 5.l(d)(xiii) were not in the Partnership
Agreement. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Income is subjected to a Required
Allocation or a Curative Allocation, Net Income or the resulting Net Loss,
whichever the case may be, shall be recomputed without regard to such item.
"Net Loss" shall mean, for any taxable period, the excess, if any, of
the Partnership's items of loss and deduction (other than those items
attributable to dispositions constituting Termination Capital Transactions) for
such taxable period over the Partnership's items of income and gain (other than
those items attributable to dispositions constituting Termination Capital
Transactions) for such taxable period. The items
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included in the calculation of Net Loss shall be determined in accordance with
Section 4.6(b) and shall not include any items specially allocated under Section
5.1(d); provided that the determination of the items that have been specially
allocated under Section 5.1(d) shall be made as if Section 5.1(d)(xiii) were not
in the Partnership Agreement. Once an item of income, gain, loss or deduction
that has been included in the initial computation of Net Loss is subjected to a
Required Allocation or a Curative Allocation, Net Loss or the resulting Net
Income, whichever the case may be, shall be recomputed without regard to such
item.
"Net Termination Gain" shall mean, for any taxable period, the sum, if
positive, of all items of income, gain or loss recognized by the Partnership
from Termination Capital Transactions occurring in such taxable period. The
items included in the determination of Net Termination Gain shall be determined
in accordance with Section 4.6(b) and shall not include any items of income,
gain or loss specially allocated under Section 5.1(d). Once an item of income,
gain or loss that has been included in the initial computation of Net
Termination Gain is subjected to a Required Allocation or a Curative Allocation,
Net Termination Gain or the resulting Net Termination Loss, whichever the case
may be, shall be recomputed without regard to such item.
"Net Termination Loss" shall mean, for any taxable period, the sum, if
negative, of all items of income, gain or loss recognized by the Partnership
from Termination Capital Transactions occurring in such taxable period. The
items included in the determination of Net Termination Loss shall be determined
in accordance with Section 4.6(b) and shall not include any items of income, gam
or loss specially allocated under Section 5.1(d). Once an item of gain or loss
that has been included in the initial computation of Net Termination Loss is
subjected to a Required Allocation or a Curative Allocation, Net Termination
Loss or the resulting Net Termination Gain, whichever the case may be, shall be
recomputed without regard to such item.
"Non-citizen Assignee" means a Person who the General Partner has
determined in its sole discretion does not constitute an Eligible Citizen and as
to whose Partnership Interest the General Partner has become the Substituted
Limited Partner, pursuant to Section 11.5 hereof.
"Nonrecourse Built-in Gain" shall mean with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Sections 5.2(b)(i)(A),
5.2(b)(ii)(A) or 5.2(b)(iv) if such properties
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were disposed of in a taxable transaction in full satisfaction of such
liabilities and for no other consideration.
"Nonrecourse Deductions" shall mean any and all items of loss,
deduction or expenditures (described in Section 705 (a)(2)(B) of the Code) that,
in accordance with the principles of Treasury Regulation Section 1.704-2(b), are
attributable to a Nonrecourse Liability.
"Nonrecourse Liability" shall have the meaning set forth in Treasury
Regulation Section 1.752-1(a)(2).
"Notice of Election to Purchase" has the meaning assigned to such term
in Section 17.1 (b) hereof.
"Opinion of Counsel" means a written opinion of counsel (who may be
regular counsel to the Partnership or the General Partner) in form and substance
acceptable to the General Partner.
"Outstanding" means all Units or other Partnership Securities that are
issued by the Partnership and reflected as outstanding on the Partnership's
books and records as of the date of determination.
"Partner" means a General Partner or a Limited Partner and solely for
purposes of Articles IV, V and VI hereof and Sections 14.3 and 14.4 hereof shall
include an Assignee.
"Partner Nonrecourse Debt" shall have the meaning set forth in Treasury
Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" shall mean any and all items of loss,
deduction or expenditure (described in Section 705(a)(2)(B) of the Code) in
accordance with the principles of Treasury Regulation Section 1.704-2(i), are
attributable to a Partner Nonrecourse Debt.
"Partnership" means the limited partnership heretofore formed and
continued pursuant to this Agreement and any successor thereto.
"Partnership Interest" means the interest of a Partner in the
Partnership which, in the case of a Limited Partner or Assignee shall include
Units.
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"Partnership Minimum Gain" shall mean that amount determined in
accordance with the principles of Treasury Regulation Sections 1.704-2(d).
"Partnership Securities" has the meaning assigned to such term in
Section 4.4(a) hereof.
"Partnership Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Per Unit Capital Amount" means, as of any date of determination, the
Capital Account, stated on a per Unit basis, underlying any Unit held by a
Public Unitholder.
"Percentage Interest" means, as of the date of such determination, (a)
as to the General Partner in its capacity as such, 2%, (b) as to any Limited
Partner or Assignee holding Units, the product of (i) 98% multiplied by (ii) the
quotient of the number of Units held by such Limited Partner or Assignee divided
by the total number of all Units then outstanding; provided, however, that
following any issuance of additional Units by the Partnership pursuant to
Section 4.4 hereof, proper adjustment shall be made to the Percentage Interest
represented by each Unit to reflect such issuance.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"Public Unitholder" means a Person other than the General Partner or
any Affiliate of the General Partner who holds Units.
"Purchase Date" means the date determined by the General Partner as the
date for purchase of all outstanding Units (other than Units owned by the
General Partner and its Affiliates) pursuant to Section 17.1(b) hereof.
"Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Sections 734 or 743 of
the Code) upon the disposition of any property or asset of the Partnership,
which gain is characterized as ordinary income because it represents the
recapture of deductions previously taken with respect to such property or asset.
"Record Date" means the date established by the General Partner for
determining (a) the identity of Limited Partners (or Assignees, if applicable)
entitled to notice of, or to vote at, any meeting of Limited Partners or
entitled to vote by ballot or give approval of
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Partnership action in writing without a meeting or entitled to exercise rights
in respect of any other lawful action of Limited Partners, or (b) the identity
of Record Holders entitled to receive any report or distribution.
"Record Holder" means the Person in whose name a Unit is registered on
the books of the Transfer Agent, as of the opening of business on a particular
Business Day.
"Redeemable Units" means any Units for which a redemption notice has
been given and has not been withdrawn, under Section 11.6 hereof.
"Required Allocations" shall mean any allocation (or limitation imposed
on any allocation) of an item of income, gain, deduction or loss pursuant to (a)
the proviso-clauses of Section 5.1(b)(ii) or (b) Sections 5.l(d)(i), 5.l(d)(ii),
5.l(d)(iv), 5.l(d)(v), 5.1(d)(vi), 5.l(d)(vii) and 5.1(d)(ix), such allocations
(or limitations thereon) being directly or indirectly required by the Treasury
regulations promulgated under Section 704(b) of the Code.
"Residual Gain" or "Residual Loss" shall mean any item of gain or loss,
as the case may be, of the Partnership recognized for federal income tax
purposes resulting from a sale, exchange or other disposition of Contributed
Property or Adjusted Property, to the extent such item of gain or loss is not
allocated pursuant to the first sentence of Sections 5.2(b)(i)(A) or
5.2(b)(ii)(A) to eliminate Book-Tax Disparities.
"Second Liquidation Target Amount" means an amount, determined with
respect to any Unit, which equals, as of the date of its determination, the sum
of (a) the First Liquidation Target Amount, if any, attributable to such Unit,
plus (b) the excess, if any, of the Second Target Amount over the First Target
Amount, with respect to the calendar quarter as to which such determination is
made.
"Second Target Amount" means $0.70 per Unit, subject to adjustment in
accordance with Sections 5.6 and 9.6 hereof.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor to such statute.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person, and, with respect to the Partnership, shall include
the Facilities Subsidiary.
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"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 12.2 hereof in place of
and with all the rights of a Limited Partner and who is shown as a Limited
Partner on the books and records of the Partnership.
"Termination Capital Transaction" shall mean any sale, transfer or
other disposition of any Partnership property occurring upon or incident to the
liquidation and winding-up of the Partnership pursuant to Article XIV.
"Third Liquidation Target Amount" means an amount, determined with
respect to any Unit, which equals, as of the date of its determination, the sum
of (a) the Second Liquidation Target Amount, if any, attributable to such Unit,
plus (b) the excess, if any, of the Third Target Amount over the Second Target
Amount, determined with respect to the calendar quarter as to which such
determination is made.
"Third Target Amount" means $0.75 per Unit, subject to adjustment in
accordance with Sections 5.6 and 9.6 hereof.
"Trading Day" has the meaning assigned to such term in Section 17.1(a)
hereof.
"Transfer Agent" means the Depositary or any bank, trust company or
other Person appointed by the Partnership to-act as transfer agent for the
Units.
"Transfer Application" means an application and agreement for transfer
of Depositary Units in the form set forth on the back of a Depositary Receipt or
in a form substantially to the same effect in a separate instrument.
"Unit" means a Partnership Interest of a Limited Partner or Assignee in
the Partnership representing a fractional part of the Partnership Interests of
all Limited Partners and Assignees; provided, however, that in the event any
class or series of Units issued pursuant to Section 4.4 hereof shall have
designations, preferences or special rights such that a Unit of such class or
series shall represent a greater or lesser part of the Partnership Interests of
all Limited Partners or Assignees than a Unit of any other class or series of
Units, the Partnership Interest represented by such class or series of Units
shall be determined in accordance with such designations, preferences or special
rights. Unless otherwise specifically indicated to the contrary, "Units"
includes Depositary Units.
"Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the fair
market value of such property
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(as determined under Section 4.6(d) hereof) as of such date, over (b) the
Carrying Value of such property as of such date (prior to any adjustment to be
made pursuant to Section 4.6(d) hereof) as of such date.
"Unrealized Loss" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the Carrying
Value of such property as of such date (prior to any adjustment to be made
pursuant to Section 4.6(d) hereof) as of such date, over (b) the fair market
value of such property (as determined under Section 4.6(d) hereof) as of such
date.
"Unrecovered Capital" means, at any time, with respect to a Unit, the
Issue Price of such Unit, less the sum of all distributions theretofore made in
respect of such Unit constituting, and which for purposes of determining the
priority of such distribution is treated as constituting, Cash from Capital
Transactions.
ARTICLE III
PURPOSE
3.1 Purpose and Business. The purpose and nature of the business to be
conducted by the Partnership shall be (i) to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the Delaware
Act, including, without limitation, the acquisition, development, ownership,
management, operation, leasing and disposition of timberlands and the production
and sale of forest products, (ii) to enter into any partnership, joint venture
or other similar arrangement to engage in any of the foregoing or the ownership
of interests in any entity engaged in any of the foregoing, including the
ownership of common stock of the Facilities Subsidiary, and (iii) to do anything
necessary or incidental to the foregoing (including, without limitation, the
making of capital contributions or loans to the Facilities Subsidiary).
3.2 Powers. The Partnership shall be empowered to do any and all acts
and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership.
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ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1 Initial Contributions. In order to form the Partnership under the
Delaware Act, the General Partner has made an initial Capital Contribution to
the Partnership in the amount of $1 and the General Partner has accepted a
Capital Contribution to the Partnership in the amount of $99 from the Limited
Partner for an interest in the Partnership, and the Limited Partner has been
admitted as a limited partner of the Partnership.
4.2 [Omitted]
4.3 [Omitted]
4.4 Issuances of Additional Units and Other Securities.
(a) The General Partner is hereby authorized to cause the Partnership
to issue such additional Units, or classes or series thereof, or options,
rights, warrants or appreciation rights relating thereto, or any other type of
equity security that the Partnership may lawfully issue, any unsecured or
secured debt obligations of the Partnership or debt obligations of the
Partnership convertible into any class or series of equity securities of the
Partnership (collectively, "Partnership Securities"), for any Partnership
purpose, at any time or from time to time, to the Partners or to other Persons
for such consideration and on such terms and conditions as shall be established
by the General Partner in its sole discretion, all without the approval of any
Limited Partner. The General Partner shall have sole discretion, subject to the
guidelines set forth in this Section 4.4 and the requirements of the Delaware
Act, in determining the consideration and terms and conditions with respect to
any future issuance of Partnership Securities.
(b) Notwithstanding any provision of this Agreement to the contrary,
additional Partnership Securities to be issued by the Partnership pursuant to
this Section 4.4 shall be issuable from time to time in one or more classes, or
one or more series of any of such classes, with such designations, preferences
and relative, participating, optional or other special rights, powers and
duties, including rights, powers and duties senior to existing classes and
series of Partnership Securities, all as shall be fixed by the General Partner
in the exercise of its sole and complete discretion, subject to Delaware law,
including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Securities; (ii) the right of each such class or series of
Partnership Securities to share in Partnership distributions; (iii) the rights
of each such class or series of Partnership Securities upon dissolution and
liquidation of the Partnership; (iv) whether such class or series of additional
Partner-
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ship Securities is redeemable by the Partnership and, if so, the price at which,
and the terms and conditions upon which, such class or series of additional
Partnership Securities may be redeemed by the Partnership; (v) whether such
class or series of additional Partnership Securities is issued with the
privilege of conversion and, if so, the rate at which, and the terms and
conditions upon which, such class or series of Partnership Securities may be
converted into any other class or series of Partnership Securities; (vi) the
terms and conditions upon which each such class or series of Partnership
Securities will be issued, deposited with the Depositary, evidenced by
Depositary Receipts and assigned or transferred; and (vii) the right, if any, of
each such class or series of Partnership Securities to vote on Partnership
matters, including matters relating to the relative rights, preferences and
privileges of each such class or series.
(c) [Omitted]
(d) The General Partner is hereby authorized and directed to take all
actions which it deems appropriate or necessary in connection with each issuance
of Units or other Partnership Securities pursuant to Section 4.4(a) hereof and
to amend this Agreement in any manner which it deems appropriate or necessary to
provide for each such issuance, to admit Additional Limited Partners in
connection therewith and to specify the relative rights, powers and duties of
the holders of the Partnership Securities being so issued.
(e) The General Partner shall do all things necessary to comply with
the Delaware Act and is authorized and directed to do all things it deems to be
necessary or advisable in connection with any future issuance of Partnership
Securities, including compliance with any statute, rule, regulation or guideline
of any federal, state or other governmental agency or any National Securities
Exchange on which the Depositary Units or other Partnership Securities are
listed for trading.
4.5 No Preemptive Rights. No Person shall have any preemptive,
preferential or other similar right with respect to (a) additional Capital
Contributions; (b) issuance or sale of any class or series of Units or other
Partnership Securities, whether unissued, held in the treasury or hereafter
created; (c) issuance of any obligations, evidences of indebtedness or other
securities of the Partnership convertible into or exchangeable for, or carrying
or accompanied by any rights to receive, purchase or subscribe to, any such
Units or Partnership Securities; (d) issuance of any right of subscription to or
right to receive, or any warrant or option for the purchase of, any such Units
or Partnership Securities; or (e) issuance or sale of any other securities that
may be issued or sold by the Partnership.
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4.6 Capital Accounts. The Partnership shall maintain for each Partner
owning Units a separate Capital Account with respect to such Units in accordance
with the rules of Treasury Regulation Section 1.704-l(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions made
to the Partnership with respect to such Units pursuant to this Agreement and
(ii) all items of Partnership income and gain (including income and gain exempt
from tax) computed in accordance with Section 4.6(b) hereof and allocated with
respect to such Units pursuant to Section 5.1 hereof, and decreased by (x) the
amount of cash or Net Agreed Value of all actual and deemed distributions of
cash or property made with respect to such Units pursuant to this Agreement and
(y) all items of Partnership deduction and loss computed in accordance with
Section 4.6(b) hereof and allocated with respect to such Units pursuant to
Section 5.1 hereof.
The Partnership shall maintain for the General Partner a separate
Capital Account with respect to its Partnership Interest, held in its capacity
as a general partner, in accordance with the rules of Treasury Regulation
Section l.704-l(b)(2)(iv). Such Capital Account shall be increased by (i) the
amount of all Capital Contributions made to the Partnership with respect to such
Partnership Interest pursuant to this Agreement and (ii) all items of
Partnership income and gain (including income and gain exempt from tax) computed
in accordance with Section 4.6(b) hereof and allocated with respect to such
Partnership Interest pursuant to Section 5.1 hereof, and decreased by (x) the
amount of cash or Net Agreed Value of all actual and deemed distributions of
cash or property made with respect to such Partnership Interest pursuant to this
Agreement and (y) all items of Partnership deduction and loss computed in
accordance with Section 4.6(b) hereof and allocated with respect to such
Partnership Interest pursuant to Section 5.1.
(a) For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes (including any method of depreciation, cost recovery or amortization
used for that purpose), provided, that:
(i) All fees and other expenses incurred by the Partnership to
promote the sale of (or to sell) a Partnership Interest that
can neither be deducted nor amortized under Section 709 of the
Code, if any, shall, for purposes of Capital Account
maintenance, be treated as an item of deduction at the time
such fees and other expenses are incurred and shall be
allocated among the Partners pursuant to Section 5.1 hereof.
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(ii) Except as otherwise provided in Treasury Regulation Section
1.704-1 (b)(2)(iv)(m), the computation of all items of income,
gain, loss and deduction shall be made without regard to any
election under Section 754 of the Code which may be made by
the Partnership and, as to those items described in Section
705(a)(l)(B) or 705(a)(2)(B) of the Code, without regard to
the fact that such items are not includable in gross income or
are neither currently deductible nor capitalized for federal
income tax purposes.
(iii) Any income, gain or loss attributable to the taxable
disposition of any Partnership property (including any
disposition of a timber interest) shall be determined as if
the adjusted basis of such property (or, in the case of
certain timber dispositions, the "adjusted depletion basis" of
such timber) as of such date of disposition were equal in
amount to the Partnership's Carrying Value with respect to
such property as of such date. The adjusted basis or adjusted
depletion basis, whichever the case may be, determined upon
sales or other dispositions of timber units included in a
timber account shall not, in the aggregate, exceed the
Partnership's total Carrying Value with respect to all of the
timber units included in such timber account.
(iv) In accordance with the requirements of Section 704(b) of the
Code, any deductions for depreciation, cost recovery or
amortization attributable to any Contributed Property shall be
determined as if the adjusted basis of such property as of the
date it was acquired by the Partnership was equal to the
Agreed Value of such property. Upon an adjustment pursuant to
Section 4.6(d) hereof to the Carrying Value of any Partnership
property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation,
cost recovery or amortization attributable to such property
shall be determined (A) as if the adjusted basis of such
property were equal to the Carrying Value of such property
immediately following such adjustment and (B) using a rate of
depreciation, cost recovery or amortization derived from the
same method and useful life (or, if applicable, the remaining
useful life) as is applied for federal income tax purposes;
provided, however, that, if the asset has a zero adjusted
basis for federal income tax purposes, depreciation, cost
recovery or amortization deductions shall be determined using
any reasonable method that the General Partner may adopt
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(c) (i) A transferee of a Partnership Interest shall succeed to a pro
rata portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred; provided, however, that, if the transfer
causes a termination of the Partnership under Section 708(b)(1)(B) of the Code,
the Partnership's properties shall be deemed to have been distributed in
liquidation of the Partnership to the Partners (including the transferee of a
Partnership Interest) pursuant to Sections 14.3 and 14.4 and recontributed by
such Partners in reconstitution of the Partnership. In such event, the Carrying
Values of the Partnership properties shall be adjusted immediately prior to such
deemed distribution pursuant to Section 4.6(d)(ii) hereof and such adjusted
Carrying Values shall then constitute the Agreed Values of such properties upon
such deemed contribution to the reconstituted Partnership. The Capital Accounts
of such reconstituted Partnership shall be maintained in accordance with the
principles of this Section 4.6.
(ii) [Omitted]
(iii) [Omitted]
(d) (i) Consistent with the provisions of Treasury Regulation Section
1.704- l(b)(2)(iv)(f), on an issuance of additional Units for cash or
Contributed Property or the conversion of the General Partner's Partnership
Interest to Units pursuant to Section 13.3(b), the Capital Accounts of all
Partners and the Carrying Value of each Partnership property immediately prior
to such issuance shall be adjusted upward or downward to reflect any Unrealized
Gain or Unrealized Loss attributable to such Partnership property, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each
such property immediately prior to such issuance and had been allocated to the
Partners at such time pursuant to Section 5.1 hereof. In determining such
Unrealized Gain or Unrealized Loss the aggregate cash amount and fair market
value of all Partnership assets (including cash or cash equivalents) immediately
prior to the issuance of Partnership Interests shall be determined by the
General Partner using such reasonable method of valuation as it may adopt;
provided, however, the General Partner, in arriving at such valuation, must take
fully into account the Limited Partner Equity Value and the General Partner
Equity Value, at such time. The General Partner shall allocate such aggregate
value among the assets of the Partnership (in such manner as it determines in
its sole discretion to be reasonable) to arrive at a fair market value for
individual properties.
(ii) In accordance with Treasury Regulation Section
l.704-l(b)(2)(iv)(f), immediately prior to any
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actual or deemed distribution to a Partner of any Partnership
property (other than a distribution of cash that is not in
redemption or retirement of a Partnership Interest), the
Capital Accounts of all Partners and the Carrying Value of
such Partnership property shall be adjusted upward or downward
to reflect any Unrealized Gain or Unrealized Loss attributable
to such Partnership property, as if such Unrealized Gain or
Unrealized Loss had been recognized in a sale of each such
property immediately prior to such distribution for an amount
equal to its fair market value, and had been allocated to the
Partners, at such time, pursuant to Section 5.1 hereof. Any
Unrealized Gain or Unrealized Loss attributable to such
property shall be allocated in the same manner as Net
Termination Gain or Net Termination Loss pursuant to Section
5.1(c) hereof; provided, however, that, in making any such
allocation, Net Termination Gain or Net Termination Loss
actually realized shall be allocated first. In determining
such Unrealized Gain or Unrealized Loss the aggregate cash
amount and fair market value of all Partnership assets
(including cash or cash equivalents) immediately prior to a
distribution shall (A) in the case of an actual distribution
which is not made pursuant to Section 14.3 or 14.4 or in the
case of a deemed distribution occurring as a result of a
termination of the Partnership pursuant to Section 708 of the
Code, be determined and allocated in the manner provided in
Section 4.6(d)(i) or (B) in the case of a liquidating
distribution pursuant to Section 14.3 or 14.4, be determined
and allocated by the Liquidator using such reasonable methods
of valuation as it may adopt. Notwithstanding anything to the
contrary provided herein, the preceding provisions of this
subsection 4.6(d)(ii) shall not be applied to distributions of
cash in redemption or retirement of a Partnership Interest
(and no such adjustment shall be made) unless the adjustment
therein described is necessary to maintain the economic
uniformity of the Units within each class of publicly traded
Units, if any.
4.7 Interest. No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
4.8 No Withdrawal. No Partner shall be entitled to withdraw any part of
his Capital Contribution or his Capital Account or to receive any distribution
from the partnership, except as provided in Section 4.2 hereof, and Articles V,
XIII and XIV hereof.
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4.9 Loans from Partners. Loans by a Partner to the Partnership shall
not constitute Capital Contributions. If any Partner shall advance funds to the
Partnership in excess of the amounts required hereunder to be contributed by it
to the capital of the Partnership, the making of such excess advances shall not
result in any increase in the amount of the Capital Account of such Partner. The
amount of any such excess advances shall be a debt obligation of the Partnership
to such Partner and shall be payable or collectible only out of the Partnership
assets in accordance with the terms and conditions upon which such advances are
made.
4.10 No Fractional Units. No fractional Units shall be issued by the
Partnership.
4.11 Splits and Combinations. (a) Subject to Section 4.11(d) hereof,
the General Partner may make a pro rata distribution of Units or Partnership
Securities to all Record Holders or may effect a subdivision or combination of
Units or other Partnership Securities; provided, however, that after any such
distribution, subdivision or combination, each Partner shall have the same
Percentage Interest in the partnership as before such distribution, subdivision
or combination.
(b) Whenever such a distribution, subdivision or combination of Units
or Partnership Securities is declared, the General Partner shall select a Record
Date as of which the distribution, subdivision or combination shall be effective
and shall send notice of the distribution, subdivision or combination at least
20 days prior to such Record Date, to each Record Holder as of the date not less
than 10 days prior to the date of such notice. The General Partner also may
cause a firm of independent public accountants selected by it to calculate the
number of Units to be held by each Record Holder after giving effect to such
distribution, subdivision or combination. The General Partner shall be entitled
to rely on any certificate provided by such firm as conclusive evidence of the
accuracy of such calculation.
(c) Promptly following any such distribution, subdivision or
combination, the General Partner may cause Depositary Receipts to be issued to
the Record Holders of Units as of the applicable Record Date representing the
new number of Units held by such Record Holders, or the General Partner may
adopt such other procedures as it may deem appropriate to reflect such
distribution, subdivision or combination; provided, however, that in the event
any such distribution, subdivision or combination results in a smaller total
number of Units outstanding, the General Partner shall require, as a condition
to the delivery to a Record Holder of such new Depositary Receipt, the surrender
of
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any Depositary Receipt held by such Record Holder immediately prior to such
Record Date.
(d) The Partnership shall not issue fractional Units upon any
distribution, subdivision or combination of Units. If a distribution,
subdivision or combination of Units would result in the issuance of fractional
Units but for the provisions of Section 4.10 and this Section 4.11(d), each
fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall
be rounded to the next higher Unit).
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.1 Allocations For Capital Account Purposes. For purposes of
maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership's items of income, gain, loss and deduction
(computed in accordance with Section 4.6(b) hereof) shall be allocated among the
Partners in each taxable year (or portion thereof) as provided herein below.
(a) Net Income. After giving effect to the special allocations set
forth in Section 5.l(d), all items of income, gain, loss and deduction taken
into account in computing Net Income for such taxable period shall be allocated
in the same manner as such Net Income is allocated hereunder:
(i) First, 100% to the General Partner until the aggregate Net
Income allocated to the General Partner pursuant to this
Section 5.1(a)(i) for the current taxable year and all
previous taxable years is equal to the aggregate Net Losses
allocated to the General Partner pursuant to Section 5.l(b)(v)
for all previous taxable years;
(ii) [Omitted]
(iii) [Omitted]
(iv) Second, 100% to the Limited Partners, in accordance with their
respective Percentage Interests, until the aggregate Net
Income allocated to the Limited Partners pursuant to this
Section 5.1(a)(iv) for the current taxable year and all
previous taxable years is equal to the aggregate Net Losses
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allocated to the Limited Partners pursuant to Section
5.1(b)(ii) for all previous taxable years; and
(v) Third, the balance, if any, 100% to the General Partner and
the Limited Partners in accordance with their respective
Percentage Interests.
(b) Net Losses. After giving effect to the special allocations set
forth in Section 5.1(d), all items of income, gain, loss and deduction taken
into account in computing Net Losses for such taxable period shall be allocated
in the same manner as such Net Losses are allocated hereunder:
(i) First, 100% to the General Partner and the Limited Partners,
in accordance with their respective Percentage Interests,
until the aggregate Net Losses allocated pursuant to this
Section 5.1(b)(i) for the current taxable year and all
previous taxable years is equal to the aggregate Net Income
allocated to such Partners pursuant to Section 5.1(a)(v) for
all previous taxable years;
(ii) Second, 100% to the Limited Partners, in accordance with their
respective Percentage Interests; provided, that Net Losses
shall not be allocated pursuant to this Section 5.l(b)(ii) to
the extent that such allocation would cause any Limited
Partner to have a deficit balance in its Adjusted Capital
Account at the end of such taxable year (or increase any
existing deficit balance in its Adjusted Capital Account); and
(iii) [Omitted]
(iv) [Omitted]
(v) Third, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 5.1(d), all items of gain and loss
taken into account in computing Net Termination Gain or Net Termination Loss for
such taxable period shall be allocated in the same manner as such Net
Termination Gain or Net Termination Loss is allocated hereunder. All allocations
under this Section 5.1(c) shall be made after Capital Account balances have been
adjusted by all other allocations provided under this Section 5.1 and after all
distributions of Available Cash provided under Section 5.4 have been made with
respect to the taxable period ending on the Liquidation Date.
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(i) If a Net Termination Gain is recognized (or deemed recognized
pursuant to Section 4.6(d)) from Termination Capital
Transactions, such Net Termination Gain shall be allocated
between the General Partner and the Limited Partners in the
following manner (and the Capital Accounts of the Partners
shall be increased by the amount so allocated in each of the
following subclauses, In the order listed, before an
allocation is made pursuant to the next succeeding subclause):
(A) First, to each Partner having a
deficit balance in its Capital Account, in the proportion of
such deficit balance to the deficit balances in the Capital
Accounts of all Partners, until each such Partner has been
allocated Net Termination Gain equal to any such deficit
balance in its Capital Account;
(B) Second, 98% to the Limited Partners,
in accordance with their respective Percentage Interests, and
2% to the General Partner until each Limited Partner's Capital
Account (determined on a per Unit basis) in respect of its
Units is equal to the Unrecovered Capital attributable to each
such Unit;
(C) Third, 98% to the Limited Partners,
in accordance with their respective Percentage Interests, and
2% to the General Partner until each Limited Partner's Capital
Account (determined on a per Unit basis) in respect of its
Units is equal to the First Liquidation Target Amount,
determined with respect to each such Unit;
(D) [Omitted]
(E) [Omitted]
(F) Fourth, 88% to the Limited Partners,
in accordance with their respective Percentage Interests, and
12% to the General Partner until each Limited Partner's
Capital Account (determined on a per Unit basis) is equal to
the Second Liquidation Target Amount, determined with respect
to each such Unit;
(G) Fifth, 78% to the Limited Partners,
in accordance with their respective Percentage Interests, and
22% to the General Partner until each Limited Partner's
Capital Account (determined on a per Unit
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basis) is equal to the Third Liquidation Target Amount,
determined with respect to each such Unit;
(H) Sixth, 68% to the Limited Partners,
in accordance with their respective Percentage Interests, and
32% to the General Partner until each Limited Partner's
Capital Account (determined on a per Unit basis) is equal to
the Fourth Liquidation Target Amount, determined with respect
to each such Unit; and
(I) Finally, the balance if any, 63% to
all Limited Partners, in accordance with their respective
Percentage Interests, and 37% to the General Partner.
(ii) If a Net Termination Loss is recognized (or deemed recognized
pursuant to Section 4.6.(d)) from Termination Capital
Transactions, such Net Termination Loss shall be allocated to
the Partners in the following manner:
(A) First, 100% to the General Partner
and the Limited Partners in proportion to, and to the extent
of, the positive balances in their respective Capital
Accounts; and
(B) [Omitted]
(C) [Omitted]
(D) Second, the balance, if any, 100% to
the General Partner.
(d) Special Allocations. Notwithstanding any other provision of this
Section 5.1, the following special allocations shall be made for such taxable
period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 5.1, if there is a net decrease in
Partnership Minimum Gain during any Partnership taxable
period, each Partner shall be allocated items of Partnership
income and gain for such period (and, if necessary, subsequent
periods) in the manner and amounts provided in Treasury
Regulation Sections 1.704-2(f)(6), l.704-2(g)(2) and 1.704-
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2(j)(2)(i), or any successor provision. For purposes of this
Section 5.1(d), each Partner's Adjusted Capital Account
balance shall be determined, and the allocation of income or
gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section
5.1(d) with respect to such taxable period (other than an
allocation pursuant to Sections 5.1(d)(vi) or 5.1(d)(vii)).
This Section 5.1(d)(i) is intended to comply with the
Partnership Minimum Gain chargeback requirement in Treasury
Regulation Section 1.704-2(f) and shall be interpreted
consistently therewith.
(ii) Chargeback of Minimum Gain Attributable to Partner Nonrecourse
Debt Notwithstanding any other provision of this Section 5.1
(other than Section 5.1(d)(i)), except as provided in Treasury
Regulation Section 1.704-2(i)(4), if there is a net decrease m
Partner Nonrecourse Debt Minimum Gain during any Partnership
taxable period, any Partner with a share of Partner
Nonrecourse Debt Minimum Gain at the beginning of such taxable
period shall be allocated items of Partnership income and gain
for such period (and, if necessary, subsequent periods) in the
manner and amounts provided in Treasury Regulation Sections
1.704-2(i)(4) and l.704-2(j)(2)(ii), or any successor
provisions. For purposes of this Section 5.1(d), each
Partner's Adjusted Capital Account balance shall be
determined, and the allocation of income or gain required
hereunder shall be effected, prior to the application of any
other allocations pursuant to this Section 5.1(d), other than
Section 5.1(d)(i) and other than an allocation pursuant to
Sections 5.1(d)(vi) or 5.1(d)(vii), with respect to such
taxable period. This Section 5.1(d)(ii) is intended to comply
with the chargeback of items of income and gain requirement in
Treasury Regulation Section l.704-2(i)(4) and shall be
interpreted consistently therewith.
(iii) Priority Allocations. All or a portion of the remaining items
of Partnership gross income or gain for the taxable period, if
any, shall be allocated 100% to the General Partner until the
aggregate amount of such items allocated to the General
Partner under this paragraph (iii) for the current taxable
period and all previous taxable periods is equal to the
cumulative amount of cash distributed to the General Partner
as an Incentive Distribution from the date hereof to a date 45
days after the end of the current taxable period.
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(iv) Qualified Income Offset. Except as provided in Sections
5.l(d)(i) and 5.1(d)(ii), in the event any Partner
unexpectedly receives any adjustments, allocations or
distributions described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
704-1(b)(2)(ii)(d)(6), items of Partnership income and gain
shall be specifically allocated to such Partner in an amount
and manner sufficient to eliminate, to the extent required by
the Treasury regulations, the deficit balance, if any, in its
Adjusted Capital Account created by such adjustments,
allocations or distributions as quickly as possible; provided,
that an allocation pursuant to this Section 5.l(d)(iv) shall
be made only if and to the extent that such Partner would have
a deficit balance in its Adjusted Capital Account after all
other allocations provided in this Section 5.1 have been
tentatively made as if this Section 5.1(d)(iv) was not in the
Agreement.
(v) Gross Income Allocations. In the event any Partner has a
deficit balance in its Capital Account at the end of any
Partnership taxable period that is in excess of the sum of (A)
the amount such Partner is obligated to restore pursuant to
any provision of this Agreement and (B) the amount such
Partner is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulation Sections
1.704-2(g) and l.704-2(i)(5), such Partner shall be specially
allocated items of Partnership gross income and gain in the
amount of such excess as quickly as possible; provided, that
an allocation pursuant to this Section 5.l(d)(v) shall be made
only if and to the extent that such Partner would have a
deficit Capital Account in excess of such sum after all other
allocations provided for in this Section 5.1 have been
tentatively made as if Section 5.1(d)(iv) hereof and this
Section 5.l(d)(v) were not in the Agreement
(vi) Nonrecourse Deductions. Nonrecourse Deductions for any taxable
period shall be allocated to the Partners in accordance with
their respective Percentage Interests. If the General Partner
determines in its good faith discretion that the Partnership's
Nonrecourse Deductions must be allocated in a different ratio
to satisfy the safe harbor requirements of the Treasury
regulations promulgated under Section 704(b) of the Code, the
General Partner is authorized, upon notice to the Limited
Partners, to revise the prescribed ratio to the numerically
closest ratio which does satisfy such requirements.
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(vii) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions
for any taxable period shall be allocated 100% to the Partner
that bears the Economic Risk of Loss with respect to the
Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Treasury
Regulation Section 1.704-2(i). If more than one Partner bears
the Economic Risk of Loss with respect to a Partner
Nonrecourse Debt, such Partner Nonrecourse Deductions
attributable thereto shall be allocated between or among such
Partners in accordance with the ratios in which they share
such Economic Risk of Loss.
(viii) Nonrecourse Liabilities. For purposes of Treasury Regulation
Section 1.752-3(a)(3), the Partners agree that Nonrecourse
Liabilities of the Partnership in excess of the sum of (A) the
amount of Partnership Minimum Gain and (B) the total amount of
Nonrecourse Built-in Gain shall be allocated among the
Partners in accordance with their respective Percentage
Interests.
(ix) Code Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to
Section 734(b) or 743(b) of the Code is required, pursuant to
Treasury Regulation Section l.704-1(b)(2)(iv)(m), to be taken
into account in determining Capital Accounts, the amount of
such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such basis), and
such item of gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such
Section of the Treasury regulations.
(x) [Omitted]
(xi) Curative Allocation. (A) Notwithstanding any other provision
of this Section 5.1, other than the Required Allocations, the
Required Allocations shall be taken into account in making the
Agreed Allocations so that, to the extent possible, the net
amount of items of income, gain, loss and deduction allocated
to each Partner pursuant to the Required Allocations and the
Agreed Allocations, together, shall be equal to the net amount
of such items that would have been allocated to each such
Partner under the Agreed Allocations had the Required
Allocations and this Curative Allocation not otherwise been
provided in this Section 5.1. Notwithstanding
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the preceding sentence, Required Allocations relating to (1)
Nonrecourse Deductions shall not be taken into account except
to the extent that there has been a decrease in Partnership
Minimum Gain and (2) Partner Nonrecourse Deductions shall not
be taken into account except to the extent that there has been
a decrease in Minimum Gain Attributable to Partner Nonrecourse
Debts. Allocations pursuant to this Section 5.1(d)(xi)(A)
shall only be made with respect to Required Allocations to the
extent the General Partner reasonably determines that such
allocations will otherwise be inconsistent with the economic
agreement among the Partners. Further, allocations pursuant to
this Section 5.l(d)(xi)(A) shall be deferred with respect to
allocations pursuant to clauses (l) and (2) hereof to the
extent the General Partner reasonably determines that such
allocations are likely to be offset by subsequent Required
Allocations.
(xii) [Omitted]
(A) [Omitted]
(xiii) Notwithstanding the other provisions of this Section 5.1(d)
(other than paragraphs (i) and (ii)) all or a portion of the
remaining items of Partnership gross income or gain for the
taxable period, if any, shall be allocated to each Partner who
has received a deemed distribution of Available Cash pursuant
to Section 9.7 hereof until the aggregate amount of such items
allocated to each such Partner under this paragraph (xii) for
the current taxable period and all previous taxable periods is
equal to the cumulative amount of cash deemed distributed to
such Partner pursuant to Section 9.7 for the current taxable
period and all previous periods.
(xiv) Corrective Allocations. In the event of any allocation of
Additional Book Basis Derivative Items or any Book-Down Event,
the following rules shall apply:
(A) in the case of any allocation of
Additional Book Basis Derivative Items (other than an
allocation of Unrealized Gain or Unrealized Loss under Section
4.6(d) hereof) the General Partner shall allocate additional
items of gross income and gain to the Limited Partners or
additional items of deduction and loss to the General Partner
to the extent that the Additional Book Basis
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Derivative items allocated to the Limited Partners exceeds
their Share of those Additional Book Basis Derivative Items.
For this purpose, the Limited Partners shall be treated as
being allocated Additional Book Basis Derivative Items to the
extent that such Additional Book Basis Derivative Items have
reduced the amount of income that would otherwise have been
allocated to the Limited Partners under the Partnership
Agreement (e.g., Additional Book Basis Derivative Items taken
into account in computing cost of goods sold would reduce the
amount of book income otherwise available for allocation among
the Partners). Any allocation made pursuant to this Section
5.1(d)(xiv)(A) shall be made after all of the other Agreed
Allocations have been made as if this Section 5.l(d)(xiv) were
not in the Partnership Agreement and, to the extent necessary,
shall require the reallocation of items that have been
allocated pursuant to such other Agreed Allocations.
(B) In the case of any negative
adjustment to the Capital Accounts of the Partners resulting
from a Book-Down Event, such negative adjustment (1) shall
first be allocated between the General Partner and the Limited
Partners in proportion to and to the extent of their Remaining
Net Positive Adjustments and (2) any remaining negative
adjustment shall be allocated pursuant to Section 5.1(c)
hereof.
(C) In making the allocations required
under this Section 5.1(d)(xiv), the General Partner, in its
sole discretion, may apply whatever conventions or other
methodology it deems reasonable to satisfy the purposes of
this Section 5.1 (d)(xiv).
(D) For purposes of this Section
5.1(d)(xiv), the following definitions shall apply:
(1) "Additional Book Basis" means the
portion of any remaining Carrying Value of an Adjusted Property that is
attributable to positive adjustments made to such Carrying Value as a
result of Book-Up Events. For purposes of determining the extent to
which Carrying Value constitutes Additional Book Basis:
(i) Any negative adjustment made to the Carrying
Value of an Adjusted Property as a result of
either a Book-Down Event or a Book-Up Event
shall first be deemed to offset or decrease
that portion of the Carrying Value of such
Adjusted Property that is attributable to
any prior
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positive adjustments made thereto pursuant
to a Book-Up or Book-Down Event.
(ii) If Carrying Value that constitutes
Additional Book Basis is reduced as a result
of a Book-Down Event and the Carrying Value
of other property is increased as a result
of such Book-Down Event, an allocable
portion of any such increase in Carrying
Value shall be treated as Additional Book
Basis; provided that the amount treated as
Additional Book Basis pursuant hereto as a
result of such Book-Down Event shall not
exceed the amount by which the Aggregate
Remaining Net Positive Adjustments after
such Book-Down Event exceeds the remaining
Additional Book Basis attributable to all of
the Partnership's Adjusted Property after
such Book-Down Event (determined without
regard to the application of this Section
5.l(d)(xiv)(D)(l)(ii) to such Book-Down
Event).
(2) "Additional Book Basis Derivative Items"
means any Book Basis Derivative Items that are computed with reference
\to Additional Book Basis. To the extent that the Additional Book Basis
attributable to all of the Partnership's Adjusted Property as of the
beginning of any taxable period exceeds the Aggregate Remaining Net
Positive Adjustments as of the beginning of such period (the "Excess
Additional Book Basis"), the Additional Book Basis Derivative Items for
such period shall be reduced by the amount that bears the same ratio to
the amount of Additional Book Basis Derivative Items determined without
regard to this sentence as the Excess Additional Book Basis bears to
the Additional Book Basis as of the beginning of such period.
(3) "Aggregate Remaining Net Positive
Adjustments" means as of the end of any taxable period, the sum of the
Remaining Net Positive Adjustments of all the Partners.
(4) "Book Basis Derivative Items" means any
item of income, deduction, gain, or loss included in the determination
of Net Income or Net Loss that is computed with reference to the
Carrying
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Value of an Adjusted Property (e.g., depreciation depletion, or gain or
loss with respect to an Adjusted Property).
(5) "Book-Down Event" means an event which
triggers a negative adjustment to the Capital Accounts of the Partners
pursuant to Section 4.6(d) hereof.
(6) "Book-Up Event" means an event which
triggers a positive adjustment to the Capital Accounts of the Partners
pursuant to Section 4.6(d) hereof.
(7) "Net Positive Adjustments" means, with
respect to any Partner, the excess, if any, of the total positive
adjustments over the total negative adjustments made to the Capital
Account of such Partner pursuant to Book-Up and Book-Down Events.
(8) "Remaining Net Positive Adjustments"
means as of the end of any taxable period, (i) with respect to the
Limited Partners, as a class, the excess of (a) the Net Positive
Adjustments of the Limited Partners as of the end of such period over
(b) the sum of those Partners' Share of Additional Book Basis
Derivative Items for each prior taxable period ending after January 1,
1990, and (ii) with respect to the General Partner, the excess of (a)
the Net Positive Adjustments of the General Partner as of the end of
such period over (b) the sum of the General Partner's Share of
Additional Book Basis Derivative Items.
(9) "Share of Additional Book Basis
Derivative Items" means in connection with any allocation of Additional
Book Basis Derivative Items for any taxable period, (i) with respect to
the Limited Partners, as a class, the amount that bears the same ratio
to such Additional Book Basis Derivative Items as the Limited Partners'
Remaining Net Positive Adjustments as of the end of such period bears
to the Aggregate Remaining Net Positive Adjustments as of that time,
and (ii) with respect to the General Partner, the amount that bears the
same ratio to such Additional Book Basis Derivative Items as the
General Partner's Remaining Net Positive Adjustments as of the end of
such period bears to the Aggregate Remaining Net Positive Adjustments
as of that time.
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(C) The General Partner shall have
reasonable discretion, with respect to each taxable period, to
(1) apply the provisions of Section 5.1(d)(xi)(A) hereof in
whatever order is most likely to minimize the economic
distortions that might otherwise result from the Required
Allocations, and (2) divide all allocations pursuant to
Section 5.l(d)(xi)(A) hereof among the Partners in a manner
that is likely to minimize such economic distortions.
5.2 Allocations for Tax Purposes. (a) Except as otherwise provided
herein, for federal income tax purposes, each item of income, gain, loss and
deduction shall be allocated among the Partners in the same manner as its
correlative item of "book" income, gain, loss or deduction is allocated pursuant
to Section 5.1 hereof.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, depletion and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners in
the manner provided under Section 704(c) of the Code that
takes into account the variation between the Agreed Value of
such property and its adjusted basis at the time of
contribution; and (B) except as otherwise provided in Section
5.2(b)(iv), any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall be allocated
among the Partners in the same manner as its correlative item
of "book" gain or loss is allocated pursuant to Section 5.1.
(ii) (A) In the case of an Adjusted Property, such items shall (l)
first, be allocated among the Partners in a manner consistent
with the principles of Section 704(c) of the Code to take into
account the Unrealized Gain or Unrealized Loss attributable to
such property and the allocations thereof pursuant to Section
4.6(d)(i) or (ii), and (2) second, in the event such property
was originally a Contributed Property, be allocated among the
Partners in a manner consistent with Section 5.2(b)(i)(A); and
(B) except as otherwise provided in Section 5.2(b)(iv), any
item of Residual Gain or Residual Loss attributable to an
Adjusted Property shall be allocated among the Partners in the
same manner as its correlative item of "book" gain or loss is
allocated pursuant to Section 5.1.
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(iii) Except as otherwise provided in Section 5.2(b)(iv), all other
items of income, gain, loss and deduction shall be allocated
among the Partners in the same manner as their correlative
item of "book" gain or loss is allocated pursuant to Section
5.1.
(iv) Any items of income, gain, loss or deduction otherwise
allocable under Section 5.2(b)(i)(B), 5.2(b)(ii)(B) or
5.2(b)(iii) shall be subject to allocation by the General
Partner in a manner designed to eliminate, to the maximum
extent possible, Book-Tax Disparities in a Contributed
Property or Adjusted Property otherwise resulting from the
application of the "ceiling" limitation (under Section 704(c)
of the Code or Section 704(c) principles) to the allocations
provided under Section 5.2(b)(i)(A) or 5.2(b)(ii)(A).
(c) For the proper administration of the Partnership and for the
preservation of uniformity of the Units (or any class or classes thereof), the
General Partner shall have sole discretion to (i) adopt such conventions as it
deems appropriate in determining the amount of depreciation, amortization and
cost recovery deductions; (ii) make special allocations for federal income tax
purposes of income (including gross income) or deductions; and (iii) amend the
provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of Treasury regulations under Section 704(b) or Section 704(c) of
the Code or (y) otherwise to preserve or achieve uniformity of the Units (or any
class or classes thereof). The General Partner may adopt such conventions, make
such allocations and make such amendments to this Agreement as provided in this
Section 5.2(c) only if such conventions, allocations or amendments would not
have a material adverse effect on the Partners, the holders of any class or
classes of Units issued and outstanding or the Partnership, and if such
allocations are consistent with the principles of Section 704 of the Code.
(d) The General Partner in its sole discretion may determine to
depreciate the portion of an adjustment under Section 743(b) of the Code
attributable to unrealized appreciation in any Adjusted Property (to the extent
of the unamortized Book-Tax Disparity) using a predetermined rate derived from
the depreciation method and useful life applied to the Partnership's common
basis of such property, despite the inconsistency of such approach with Proposed
Treasury Regulation Section 1.168-2(n) and Treasury Regulation Section
1.167(c)l(a)(6). If the General Partner later determines that such reporting
position cannot reasonably be taken, the General Partner may adopt a
depreciation convention under which all purchasers acquiring Units in the same
month would receive depreciation, based upon the same applicable rate as if they
had purchased a
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direct interest in the Partnership's property. If the General Partner chooses
not to utilize such aggregate method, the General Partner may use any other
reasonable depreciation convention to preserve the uniformity of the intrinsic
tax characteristics of any Units that would not have a material adverse effect
on the Limited Partners or the Record Holders of any class or classes of Units.
(e) Any gain allocated to the Partners upon the sale or other taxable
disposition of any Partnership asset shall, to the extent possible, after taking
into account other required allocations of gain pursuant to this Section 5.2 be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners have been allocated any deductions directly or indirectly
giving rise to the treatment of such gains as Recapture Income.
(f) All items of income, gain, loss, deduction and credit recognized by
the Partnership for federal income tax purposes and allocated to the Partners in
accordance with the provisions hereof shall be determined without regard to any
election under Section 754 of the Code which may be made by the Partnership;
provided, however, that such allocations once made, shall be adjusted as
necessary or appropriate to take into account those adjustments permitted or
required by Sections 734 and 743 of the Code.
(g) Each item of Partnership income, gain, loss and deduction
attributable to a transferred Partnership Interest shall, for federal income tax
purposes, be determined on an annual basis and prorated on a monthly basis and
shall be allocated to the Partners as of the opening of the New York Stock
Exchange on the first Business Day of each month; provided, however, that gain
or loss on a sale or other disposition of any assets of the Partnership other
than in the ordinary course of business shall be allocated to the Partners as of
the opening of the New York Stock Exchange on the first Business Day of the
month in which such gain or loss is recognized for federal income tax purposes.
The General Partner may revise, alter or otherwise modify such methods of
allocation as it determines necessary, to the extent permitted or required by
Section 706 of the Code and the regulations or rulings promulgated thereunder.
(h) Allocations that would otherwise be made to a Limited Partner under
the provisions of this Article V shall instead be made to the beneficial owner
of Units held by a nominee in any case in which the nominee has furnished the
identity of such owner to the Partnership in accordance with Section 6031(c) of
the Code or any other method acceptable to the General Partner in its sole
discretion.
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5.3 Requirement and Characterization of Distributions. Within 60 days
following the end of each calendar quarter an amount equal to 100% of Available
Cash with respect to such quarter (or period) shall be distributed in accordance
with this Article V by the Partnership to the Partners, as of the Record Date
selected by the General Partner in its reasonable discretion. The foregoing
shall not modify in any respect the provisions of Section 4.2 hereof regarding
the distribution of any interest or other profit on the initial Capital
Contributions referred to therein. The General Partner shall have the right to
determine in its sole discretion whether a particular distribution of cash
consists of Available Cash or Cash From Capital Transactions and the amount of
cash in each such category, except to the extent it is established that such
determination is contrary to any of the express provisions in this Agreement.
Except as otherwise provided in Section 5.5(b), the Partnership shall not be
obligated to make distributions of Cash From Capital Transactions and the
General Partner shall have the right to cause the Partnership to use Cash From
Capital Transactions for any purpose the General Partner deems necessary or
desirable, including but not limited to, purchase of Units in the public market,
in privately negotiated transactions or otherwise (and in no event shall the
General Partner be obligated to cause such purchases to be made on a pro rata
basis or to afford every Limited Partner an equal opportunity to participate in
the transactions involved).
5.4 Distributions. Available Cash with respect to any calendar quarter
shall be distributed as follows:
(a) First, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until there has
been distributed in respect of each of the outstanding Units an amount equal to
the Minimum Quarterly Amount;
(b) [Omitted]
(c) Second, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until there has
been distributed in respect of each of the outstanding Units an amount equal to
the excess of the First Target Amount over the Minimum Quarterly Amount;
(d) [Omitted]
(e) Third, 88% to the Limited Partners, in accordance with their
respective Percentage Interests, and 12% to the General Partner until there has
been distributed in
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respect of each of the outstanding Units an amount equal to the excess of the
Second Target Amount over the First Target Amount;
(f) Fourth, 78% to the Limited Partners, in accordance with their
respective Percentage Interests, and 22% to the General Partner until there has
been distributed in respect of each of the outstanding Units an amount equal to
the excess of the Third Target Amount over the Second Target Amount;
(g) Fifth, 68% to the Limited Partners, in accordance with their
respective Percentage Interests and 32% to the General Partner until there has
been distributed in respect of each of the outstanding Units an amount equal to
the Fourth Target Amount over the Third Target Amount; and
(h) Finally, the balance, if any, 63% to the Limited Partners, in
accordance with their respective Percentage Interests, and 37% to the General
Partner.
5.5 Distributions of Cash from Capital Transactions. (a) Cash from
Capital Transactions which the General Partner determines in accordance with
Section 5.3 to distribute shall be distributed, unless the provisions of Section
5.5(b) hereof require otherwise, 98% to the Limited Partners, in accordance with
their respective Percentage Interests, and 2% to the General Partner until the
Limited Partners have received, since the date hereof through such date,
distributions of Available Cash that are deemed to be Cash from Capital
Transactions in an aggregate amount equal to the amount set forth in Schedule
5.5 hereto. Thereafter, any Cash from Capital Transactions shall be distributed
in accordance with Section 5.4.
(b) If one or more Capital Transactions shall occur in any taxable
year, then (except as otherwise provided below) the General Partner shall be
required to make a distribution of Cash from Capital Transactions on or before
the April 1st next following the end of the taxable year in which such Capital
Transactions occur in accordance with the following procedures:
(i) The General Partner shall determine the net capital gain and
net ordinary income recognized by the Partnership (without
taking account of any Code Section 743 adjustments) for
federal income tax purposes from all Capital Transactions
during such year, and shall then determine the portion of such
net capital gain and net ordinary income allocable to Units
owned by the Limited Partner for federal income tax purposes.
Such portion of any
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net capital gain or net ordinary income shall then be divided
by the number of Units owned by the Limited Partner.
(ii) The General Partner shall then cause the Partnership to
distribute to the Partners, in accordance with their
respective Percentage Interests, cash until an amount has been
distributed pursuant hereto with respect to every Unit
outstanding on the Record Date established by the General
Partner with respect to such distribution equal to 125% of the
federal income tax liability that would be due with respect to
the "net capital gain" and "net ordinary income" attributed to
each outstanding Unit on the Record Date for the distribution
to be made pursuant to the preceding sentence (assuming for
such purpose that the maximum effective federal income tax
rates for individuals, relating to either long-term capital
gain or ordinary income, whichever the case may be, applied to
all holders of Units at the time of such recognition without
regard to any recapture of lower rates or alternative minimum
tax rate).
(iii) No distribution of Cash from Capital Transactions shall be
required by this Section 5.5(b) with respect to any tax year
if the amount otherwise distributable for such taxable year
under this Section 5.5(b) does not exceed $0.10 per Unit, or
if such distribution shall be prohibited by requirements
binding upon the Partnership or any Subsidiary at the time
such distribution would otherwise be required (including but
not limited to any such requirement imposed by any loan
agreement then in effect).
5.6 Adjustment of Minimum Quarterly Amount, Unrecovered Capital and
Target Amounts. (a) The Minimum Quarterly Amount, Unrecovered Capital, First
Target Amount, Second Target Amount, Third Target Amount and Fourth Target
Amount shall be proportionately adjusted in the event of any distribution,
combination or subdivision (whether effected by a distribution payable in Units
or otherwise) of Units or Partnership Securities in accordance with Section 4.11
hereof. In the event of a distribution of Cash from Capital Transactions, the
Minimum Quarterly Amount, First Target Amount, Second Target Amount, Third
Target Amount and Fourth Target Amount shall be adjusted proportionately
downward to equal the product of the otherwise applicable Minimum Quarterly
Amount, First Target Amount, Second Target Amount, Third Target Amount and
Fourth Target Amount, as the case may be, by a fraction, of which the numerator
is the Unrecovered Capital immediately after giving effect to such distribution
and of which the denominator is the Unrecovered Capital immediately prior to
giving effect to such distribution.
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(b) The Minimum Quarterly Amount, First Target Amount, Second Target
Amount, Third Target Amount and Fourth Target Amount shall also be subject to
adjustment pursuant to Section 9.6 hereof.
5.7 [Omitted]
ARTICLE VI
MANAGEMENT AND OPERATION OF BUSINESS
6.1 Management. (a) The General Partner shall conduct, direct and
exercise full control over all activities of the Partnership. Except as
otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Partnership shall be exclusively vested in the
General Partner, and no Limited Partner shall have any right of control or
management power over the business and affairs of the Partnership. In addition
to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner, subject to
Section 6.3 hereof, shall have full power and authority to do all things deemed
necessary or desirable by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.2 hereof and to effectuate the
purposes set forth in Section 3.1 hereof including, without limitation, (i) the
making of any expenditures, the borrowing of money, the guaranteeing of
indebtedness and other liabilities, the issuance of evidences of indebtedness
and the incurring of any obligations it deems necessary for the conduct of the
activities of the Partnership; (ii) the making of tax, regulatory and other
filings, or rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the Partnership;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation
or exchange of any assets of the Partnership or the merger or other combination
of the Partnership with or into another entity (all of the foregoing subject to
any prior approval which may be required by Section 6.3 hereof); (iv) the use of
the assets of the Partnership (including, without limitation, cash on hand) for
any purpose consistent with the terms of this Agreement and on any terms it sees
fit, including, without limitation, the financing of the conduct of the
operations of the Partnership or any Subsidiary, the lending of funds to other
persons (including any Subsidiary) and the repayment of obligations of the
Partnership and any Subsidiary and the making of capital contributions to any
Subsidiary; (v) the negotiation and execution on any terms deemed desirable in
its sole discretion and the performance of any contracts, conveyances or other
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instruments that it considers useful or necessary to the conduct of the
Partnership operations or the implementation of its powers under this Agreement;
(vi) the distribution of Partnership cash; (vii) the selection and dismissal of
employees and agents (including, without limitation, employees having titles
such as "president," "vice president," "secretary" and "treasurer") and agents,
outside attorneys, accountants, consultants and contractors and the
determination of their compensation and other terms of employment or hiring;
(viii) the maintenance of such insurance for the benefit of the Partnership and
the Partners as it deems necessary or appropriate; (ix) the formation of, or
acquisition of an interest in, and the contribution of property to, any further
limited or general partnerships, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition of interests in,
and the contributions of property to any Subsidiary from time to time); (x) the
control of any matters affecting the rights and obligations of the Partnership,
including the conduct of litigation and the incurring of legal expense and the
settlement of claims and litigation; (xi) the lending or borrowing of money, the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness and the securing of same
by mortgage, deed of trust or other lien or encumbrance, the bringing and
defending of actions at law or in equity and the indemnification of any Person
against liabilities and contingencies to the extent permitted by law; (xii) the
entering into listing agreements with the New York Stock Exchange and any other
securities exchange and delisting some or all of the Units from, or requesting
that trading be suspended on, any such exchange (subject to any prior approval
which may be required under Section 1.6 hereof); (xiii) the undertaking of any
action in connection with the Partnership's investment in any Subsidiary
(including, without limitation, the contribution or loan by the Partnership to
any Subsidiary of funds); and (xiv) the undertaking of any action in connection
with the Partnership's direct or indirect investment in any Subsidiary.
(b) Each of the Partners and each other Person who may acquire an
interest in Units hereby approves, ratifies and confirms the execution, delivery
and performance by the parties thereto of the Deposit Agreement. None of the
execution, delivery or performance by the General Partner, the Partnership or
any Affiliate of any of them of any agreement authorized or permitted under this
Agreement shall constitute a breach by the General Partner of any duty that the
General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.
6.2 Certificate of Limited Partnership. The General Partner has filed
the Certificate of Limited Partnership with the Secretary of State of the State
of Delaware as required by the Delaware Act and shall use all reasonable efforts
to cause to be filed such
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other certificates or documents as may be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware or any other state in which the Partnership
may elect to do business or own property. To the extent that such action is
determined by the General Partner to be reasonable and necessary or appropriate,
the General Partner shall file amendments to and restatements of the Certificate
of Limited Partnership and do all the things to maintain the Partnership as a
limited partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Delaware or any other state in which
the Partnership may elect to do business or own property. Subject to the terms
of Section 7.5(a) hereof, the General Partner shall not be required, before or
after filing, to deliver or mail a copy of the Certificate of Limited
Partnership or any amendment thereto to any Limited Partner.
6.3 Restrictions on General Partner's Authority. (a) The General
Partner may not, without the written approval of the specific act by all of the
Limited Partners or by other written instrument executed and delivered by all of
the Limited Partners subsequent to the date of this Agreement, take any action
in contravention of this Agreement, including, without limitation, (i) take any
act that would make it impossible to carry on the ordinary business of the
Partnership, except as otherwise provided in this Agreement; (ii) possess
Partnership property, or assign any rights in specific Partnership property, for
other than a Partnership purpose; (iii) admit a person as a Partner, except as
otherwise provided in this Agreement; (iv) amend this Agreement in any manner,
except as otherwise provided in this Agreement; or (v) transfer its interest as
General Partner of the Partnership, except as otherwise provided in this
Agreement.
(b) Except as provided in Article XIV hereof, the General Partner may
not sell, exchange or otherwise dispose of all or substantially all of the
Partnership's assets in a single transaction or a series of related transactions
(including by way of merger, consolidation or other combination with any other
Person) or approve on behalf of the Partnership the sale, exchange or other
disposition of all or substantially all of the assets of the Facilities
Subsidiary, without the approval of at least a majority of the outstanding Units
(excluding any Units owned by the General Partner and its Affiliates); provided,
however, that this provision shall not preclude or limit the mortgage, pledge,
hypothecation or grant of a security interest in all or substantially all of the
Partnership's assets and shall not apply to any forced sale of any or all of the
Partnership's assets pursuant to the foreclosure of, or other realization upon,
any such encumbrance.
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(c) Unless approved by the affirmative vote of the holders of at least
66 2/3% of each class of outstanding Units and the affirmative vote of the
holders of at least a majority of outstanding Units excluding for purposes of
such determination any Units owned by the General Partner and its Affiliates,
the General Partner shall not take any action or refuse to take any reasonable
action the effect of which, if taken or not taken, as the case may be, would be
to cause the Partnership to be treated for federal income tax purposes as an
association taxable as a corporation.
(d) At all times while serving as the general partner of the
Partnership, the General Partner will not make any dividend or distribution on,
or repurchase any stock or take any other action if the effect of such dividend
or distribution, repurchase or other action would be to reduce its net worth
below an amount necessary to receive an Opinion of Counsel that the Partnership
will be treated as a partnership for federal income tax purposes.
6.4 Reimbursement of the General Partner. (a) Except as provided in
this Section 6.4 and elsewhere in this Agreement, the General Partner shall not
be compensated for its services as general partner of the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole discretion, for (i)
all direct and indirect expenses it incurs or payments it makes on behalf of the
Partnership (including amounts paid to any Person to perform services to or for
the Partnership) and (ii) that portion of the General Partner's or its
Affiliates' legal, accounting, investor communications, utilities, telephone,
secretarial, travel, entertainment, bookkeeping, reporting, data processing,
office rent and other office expenses (including overhead charges), salaries,
fees and other compensation and benefit expenses of employees, officers and
directors, other administrative or overhead expenses and all other expenses, in
each such case, necessary or appropriate to the conduct of the Partnership's
business and allocable to the Partnership or otherwise incurred by the General
Partner in connection with operating the Partnership's business (including,
without limitation, expenses allocated to the General Partner by its
Affiliates). The General Partner shall determine the fees and expenses that are
allocable to the Partnership in any reasonable manner determined by the General
Partner in its sole discretion. Such reimbursements shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 6.7 hereof.
(c) Subject to Section 4.4(c) hereof, the General Partner in its sole
discretion and without the approval of the Limited Partners may propose and
adopt on behalf of the Partnership, employee benefit plans (including, without
limitation, plans involving the
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issuance of Units), for the benefit of employees of the General Partner, the
Partnership, any Subsidiary or any Affiliate of any of them in respect of
services performed, directly or indirectly, for the benefit of the Partnership
or any Subsidiary.
6.5 Outside Activities. (a) The General Partner shall not, for so long
as it is the general partner of the Partnership, enter into or conduct any
business nor incur any debts or liabilities except in connection with or
incidental to (i) its performance of the activities required or authorized by
this Agreement and (ii) the acquisition, ownership or disposition of the
partnership interest in the Partnership or its equity interest in any
Subsidiary.
(b) Except as provided in Section 6.5(a) hereof, no Indemnitee shall be
expressly or implicitly restricted or proscribed pursuant to this Agreement or
the partnership relationship established hereby from engaging in other
activities for profit, whether in the businesses engaged in by the Partnership
or anticipated to be engaged in by the Partnership or otherwise. Neither the
Partnership, any Limited Partner nor any other Person shall have any rights by
virtue of this Agreement or the partnership relationship established hereby or
thereby in any business ventures of any Indemnitee, and such Indemnities shall
have no obligation to offer any interest in any such business ventures to the
Partnership, any Limited Partner or any such other Person. The General Partner
and any other Persons affiliated with the General Partner may acquire Units or
Partnership Securities and shall be entitled to exercise all rights of an
Assignee or Limited Partner, as applicable, relating to such Units or
Partnership Securities, as the case may be.
6.6 Contracts with Affiliates. (a) The Partnership may lend or
contribute to any Subsidiary, and any other Subsidiary may borrow funds, on
terms and conditions established in the sole discretion of the General Partner.
The foregoing authority shall be exercised by the General Partner in its
reasonable discretion and shall not create any right or benefit in favor of any
Subsidiary or any other Person. The Partnership may not lend funds to the
General Partner or any of its Affiliates.
(b) The General Partner may itself, or may enter into an agreement with
any of its Affiliates to, render services to the Partnership. Any services
rendered to the Partnership by the General Partner or any of its Affiliates
shall be on terms that are fair and reasonable to the Partnership. The
provisions of Section 6.4 hereof shall apply to the rendering of services
described in this Section 6.6(b).
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant
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upon such terms and subject to such conditions consistent with this Agreement
and applicable law.
(d) Neither the General Partner nor any of its Affiliates shall sell,
transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership.
6.7 Indemnification. (a) To the fullest extent permitted by law but
subject to the limitations expressly provided in this Agreement, each Indemnitee
shall be indemnified and held harmless by the Partnership from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including legal fees and expenses), judgments, fines, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, by reason of
its status as (x) the General Partner, a Departing Partner or any of their
Affiliates, (y) an employee, partner, agent or trustee of the General Partner,
any Departing Partner or any of their Affiliates or (z) a Person serving at the
request of the Partnership in another entity in a similar capacity, provided
that in each case the Indemnitee acted in good faith and in the manner which
such Indemnitee believed to be in, or not opposed to, the best interests of the
Partnership and, with respect to any criminal proceeding, had no reasonable
cause to believe its conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
the Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 6.7 shall be made only out of the
assets of the Partnership.
(b) To the fullest extent permitted by law, expenses (including legal
fees and expenses) incurred by an Indemnitee in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Partnership prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Partnership of an undertaking by or on behalf
of the Indemnitee to repay such amount if it shall be determined that the
Indemnitee is not entitled to be indemnified as authorized in this Section 6.7.
(c) The indemnification provided by this Section 6.7 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to
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any vote of the Partners, as a matter of law or otherwise, and shall continue as
to an Indemnitee who has ceased to serve in such capacity.
(d) The Partnership may purchase and maintain insurance, on behalf of
the General Partner and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expense that
may be incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 6.7, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute "fines" within the meaning of Section 6.7(a); and action taken
or omitted by it with respect to an employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 6.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 6.7 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligation of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 6.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part,
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prior to such amendment, modification or repeal regardless of when such claims
may arise or be asserted.
6.8 Liability of Indemnitees. (a) Notwithstanding anything to the
contrary set forth in this Agreement, no Indemnitee shall be liable for monetary
damages to the Partnership, Limited Partners or to any Persons who have acquired
interests in the Units for losses sustained or liabilities incurred as a result
of any act or omission if such Indemnitee acted in good faith.
(b) Subject to its obligations and duties as General Partner set forth
in Section 6.1(a) hereof, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents and the General Partner
shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by it in good faith.
(c) Any amendment, modification or repeal of this Section 6.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations or the liability to the Partnership and the Limited Partners of the
General Partner, its directors, officers, partners and employees under this
Section 6.8 as in effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of
when such claims may arise or be asserted.
6.9 Resolution of Conflicts of Interest. (a) Unless otherwise expressly
provided in this Agreement, whenever a potential conflict of interest exists or
arises between the General Partner or any of its Affiliates, on the one hand,
and the Partnership or any Partner, on the other hand, any resolution or course
of action in respect of such conflict of interest shall be permitted and deemed
approved by all Partners, and shall not constitute a breach of this Agreement,
of any agreement contemplated herein, or of any duty stated or implied by law or
equity, if the resolution or course of action is or, by operation of this
Agreement, is deemed to be fair and reasonable to the Partnership. Any such
resolution or course of action in respect of any conflict of interest shall not
constitute a breach of this Agreement, of any other agreement contemplated
herein, or of any duty stated or implied by law or equity, if such resolution or
course of action is fair and reasonable to the Partnership. The General Partner
shall be authorized in connection with its resolution of any conflict of
interest to consider (i) the relative interests of any party to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interest; (ii) any customary or accepted industry practices; (iii) any
applicable generally accepted accounting practices or principles; and (iv) such
additional factors as
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the General Partner determines in its sole discretion to be relevant, reasonable
or appropriate under the circumstances. Nothing contained in this Agreement,
however, is intended to nor shall it be construed to require the General Partner
to consider the interests of any Person other than the Partnership. In the
absence of bad faith by the General Partner, the resolution, action or terms so
made, taken or provided by the General Partner with respect to such matter shall
not constitute a breach of this Agreement or any other agreement contemplated
herein or a breach of any standard of care or duty imposed herein or therein or
under the Delaware Act or any other law, rule or regulation
(b) Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner or any of its Affiliates is permitted or
required to make a decision (i) in its "discretion" or under a grant of similar
authority or latitude, the General Partner or such Affiliate shall be entitled
to consider only such interests and factors as it desires and shall have no duty
or obligation to give any consideration to any interest of, or factors
affecting, the Partnership or any Limited Partner, or (ii) in "good faith" or
under another express standard, the General Partner or such Affiliate shall act
under such express standard and shall not be subject to any other or different
standards imposed by this Agreement or any other agreement contemplated hereby.
(c) Whenever a particular transaction, arrangement or resolution of a
conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair and reasonable nature of such transaction,
arrangement or resolution shall be considered in the context of all similar or
related transactions.
6.10 Other Matters Concerning the General Partner. (a) The General
Partner may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion (including an Opinion of Counsel) of such Persons as to matters
which such General Partner reasonably believes to be within such Person's
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.
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(c) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty which
is permitted or required to be done by the General Partner hereunder.
6.11 Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
6.12 Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies which may
be available against such Person to contest, negate or disaffirm any action of
the General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (b) the Person executing and delivering such certificate,
document or instrument was duly
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authorized and empowered to do so for and on behalf of the Partnership and (c)
such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.
ARTICLE VII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
7.1 Limitation of Liability. The Limited Partners shall have no
liability under this Agreement except as expressly provided in this Agreement or
the Delaware Act.
7.2 Management of Business. No Limited Partner or Assignee (other than
the General Partner, any of its Affiliates or any officer, director, employee,
partner, agent or trustee of the General Partner or any of its Affiliates, in
its capacity as such) shall take part in the operation, management or control
(within the meaning of the Delaware Act) of the Partnership's business, transact
any business in the Partnership's name or have the power to sign documents for
or otherwise bind the Partnership. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, employee,
partner, agent or trustee of the General Partner or any of its Affiliates, in
its capacity as such, shall not affect, impair or eliminated the limitations on
the liability of the Limited Partners or Assignees under this Agreement.
7.3 Outside Activities. Subject to the provisions of Section 6.5
hereof, which shall continue to be applicable to the Persons referred to
therein, regardless of whether such Persons shall also be Limited Partners or
Assignees, any Limited Partner shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition
with the Partnership. Neither the Partnership nor any Partners shall have any
rights by virtue of this Agreement in any business ventures of any Limited
Partner or Assignee.
7.4 Return of Capital. No Limited Partner shall be entitled to the
withdrawal or return of his Capital Contribution, except to the extent of
distributions made pursuant to this Agreement or upon termination of the
Partnership as provided herein. Except to the extent provided by Article V
hereof or as otherwise expressly provided in this Agreement, no Limited Partner
or Assignee shall have priority over any other Limited Partner or Assignee
either as to the return of Capital Contributions or as to profits, losses or
distributions.
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7.5 Rights of Limited Partners Relating to the Partnership. (a) In
addition to other rights provided by this Agreement or by applicable law, and
except as limited by Section 7.5(b) hereof, each Limited Partner shall have the
right, for a purpose reasonably related to such Limited Partner's interest as a
limited partner in the Partnership, upon reasonable demand and at such Limited
Partner's own expense:
(i) to obtain true and full information regarding the status of
the business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local income tax returns for
each year;
(iii) to have furnished to him, upon notification to the General
Partner, a current list of the name and last known business,
residence or mailing address of each Partner;
(iv) to have furnished to him, upon notification to the General
Partner, a copy of this Agreement and the Certificate of
Limited Partnership and all amendments thereto, together with
executed copies of all powers of attorney pursuant to which
this Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed;
(v) to obtain true and full information regarding the amount of
cash and a description and statement of the Agreed Value of
any other Capital Contribution by each Partner and which each
Partner has agreed to contribute in the future, and the date
on which each became a Partner; and
(vi) to obtain such other information regarding the affairs of the
Partnership as is just and reasonable.
(b) Notwithstanding any other provision of this Section 7.5, the
General Partner may keep confidential from the Limited Partners for such period
of time as the General Partner determines in its sole discretion to be
reasonable, any information that the General Partner reasonably believes to be
in the nature of trade secrets or other information the disclosure of which the
General Partner in good faith believes is not in the best interests of the
Partnership or which the Partnership is required by law or by agreements with
unaffiliated third parties to maintain confidentiality.
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ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 Records and Accounting. The General Partner shall keep or cause to
be kept at the principal office of the Partnership appropriate books and records
with respect to the Partnership's business including, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section 7.5(a)
hereof. Any records maintained by or on behalf of the Partnership in the regular
course of its business, including the record of the Record Holders and Assignees
of Units, Depositary Units or Partnership Securities, books of account and
records of Partnership proceedings, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books of
the Partnership shall be maintained, for financial reporting purposes, on an
accrual basis in accordance with generally accepted accounting principles.
8.2 Fiscal Year. The fiscal year of the Partnership shall be the
calendar year.
8.3 Reports. (a) As soon as practicable, but in no event later than 120
days after the close of each Partnership Year, the General Partner shall cause
to be mailed to each Record Holder of a Unit as of a date selected by the
General Partner in its sole discretion, an annual report containing financial
statements of the Partnership for such Partnership Year, presented in accordance
with generally accepted accounting principles, including a balance sheet and
statements of operations, Partners' equity and statement of cash flows, such
statements to be audited by a firm of independent public accountants selected by
the General Partner.
(b) As soon as practicable, but in no event later than 45 days after
the close of each calendar quarter except the last calendar quarter of each
year, the General Partner shall cause to be mailed to each Record Holder of a
Unit, as of a date selected by the General Partner in its sole discretion, a
report containing unaudited financial statements of the Partnership and such
other information as may be required by applicable law, regulation or rule of
any National Securities Exchange on which the Units are listed for trading, or
as the General Partner determines to be appropriate.
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ARTICLE IX
TAX MATTERS
9.1 Preparation of Tax Returns. The General Partner shall arrange for
the preparation and timely filing of all returns of Partnership income, gains,
deductions, losses and other items required of the Partnership for federal and
state income tax purposes and shall use all reasonable efforts to furnish,
within 90 days of the close of each taxable year, the tax information reasonably
required by Unitholders for federal and state income tax reporting purposes. The
classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for
federal income tax purposes. The taxable year of the Partnership shall be the
calendar year.
9.2 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole discretion, determine whether to make any available
election pursuant to the Code; provided, however, that the General Partner shall
make the election under Section 754 of the Code in accordance with applicable
regulations thereunder. The General Partner shall have the right to seek to
revoke any such election (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination in its sole
discretion that such revocation is in the best interests of the Limited Partners
and Assignees. For purposes of computing the adjustments under Section 743(b) of
the Code, the General Partner shall be authorized (but not required) to adopt a
convention whereby the price paid by a transferee of Units will be deemed to be
the lowest quoted trading price of the Units on any National Securities Exchange
on which such Units are traded during the calendar month in which such transfer
is deemed to occur pursuant to Section 5.2(g) hereof without regard to the
actual price paid by such transferee.
9.3 Tax Controversies. Subject to the provisions hereof, the General
Partner is designated the Tax Matters Partner (as defined in Section 6231 of the
Code), and is authorized and required to represent the Partnership (at the
Partnership's expense) in connection with all examinations of the Partnership's
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and costs
associated therewith. Each Partner or Assignee agrees to cooperate with the
General Partner and to do or refrain from doing any or all things reasonably
required by the General Partner to conduct such proceedings.
9.4 Organizational Expenses. The Partnership shall elect to deduct
expenses, if any, incurred by it in organizing the Partnership ratably over a
60-month period as provided in Section 709 of the Code.
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9.5 Withholding. Notwithstanding any other provision of this Agreement,
the General Partner is authorized to take any action that it determines in its
sole discretion to be necessary or appropriate to cause the Partnership to
comply with any withholding requirements established under the Code or any other
federal, state or local law including, without limitation, pursuant to Sections
1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is
required to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to any Partner or Assignee
(including by reason of Section 1446 of the Code), the amount withheld shall be
treated as a distribution of cash pursuant to Section 5.3 hereof in the amount
of such withholding from such Partner.
9.6 Entity-Level Taxation. If legislation is enacted which causes the
Partnership to become treated as an association taxable as a corporation for
federal income tax purposes, then with respect to any calendar quarter, the
Minimum Quarterly Amount, the First Target Amount, Second Target Amount, Third
Target Amount or Fourth Target Amount, as the case may be, shall be equal to the
product of (i) the amount of such distribution multiplied by (ii) l minus the
sum of (x) the highest marginal federal corporate income tax rate for the
Partnership Year in which such quarter occurs (expressed as a percentage) plus
(y) the effective overall state and local income tax rate (expressed as a
percentage) applicable to the Partnership for the calendar year next preceding
the calendar year in which such quarter occurs (after taking into account the
benefit of any deduction allowable for federal income tax purposes with respect
to the payment of state and local income taxes). Such effective overall state
and local income tax rate shall be determined for the calendar year next
preceding the first calendar year during which the Partnership is taxable for
federal income tax purposes as a corporation or as an association taxable as a
corporation by determining such rate as if the Partnership had been subject to
such state and local taxes during such preceding calendar year.
9.7 Entity-Level Deficiency Collections. If the Partnership is required
by applicable law to pay any federal, state or local income tax on behalf of any
Partner or Assignee or any former Partner or Assignee (i) the General Partner
shall pay such tax on behalf of such Partner or Assignee or former Partner or
Assignee from the funds of the Partnership; (ii) any amount so paid on behalf of
any Partner or Assignee shall constitute a distribution of Available Cash to
such Partner or Assignee pursuant to Section 5.3 hereof; and (iii) to the extent
any such Partner or Assignee (but not a former Partner or Assignee) is not then
entitled to such distribution under this Agreement, the General Partner shall be
authorized, without the approval of any Partner or Assignee, to amend this
Agreement insofar as is necessary to maintain the uniformity of intrinsic tax
charac-
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teristics as to all Units and to make subsequent adjustments to distributions in
a manner which, in the reasonable judgment of the General Partner, will make as
little alteration in the priority and amount of distributions otherwise
applicable under this Agreement, and will not otherwise alter the distributions
to which Partners and Assignees are entitled under this Agreement. If the
Partnership is permitted (but not required) by applicable law to pay any such
tax on behalf of any Partner or Assignee or former Partner or Assignee, the
General Partner shall be authorized (but not required) to pay such tax from the
funds of the Partnership and to take any action consistent with this Section
9.7. The General Partner shall be authorized (but not required) to take all
necessary or appropriate actions to collect all or any portion of a deficiency
in the payment of any such tax which relates to prior periods which is
attributable to Persons who were Limited Partners or Assignees when such
deficiencies arose, from such Persons.
9.8 Opinions of Counsel. Notwithstanding any other provision of this
Agreement, if the Partnership is taxable for federal income tax purposes as a
corporation or an association taxable as a corporation at any time and, pursuant
to the provisions hereof, an Opinion of Counsel would otherwise be required at
that time to the effect that an action will not cause the Partnership to become
so taxable as a corporation or to be treated as an association taxable as a
corporation, such requirement for an Opinion of Counsel shall be deemed
automatically waived.
ARTICLE X
CERTIFICATES AND DEPOSITARY RECEIPTS
10.1 Certificates and Depositary Receipts. (a) Upon the issuance of
Units by the Partnership to the Limited Partners or any other Person, the
Partnership shall issue one or more Certificates in the name of the Limited
Partners or such Person evidencing the number of such Units being so issued.
Certificates shall be executed on behalf of the Partnership by the General
Partner.
(b) The General Partner (i) may cause the deposit of some or all of the
Certificates in the Deposit Account pursuant to the Deposit Agreement; (ii) with
respect to those Certificates deposited in the Deposit Account, shall receive
from the Depositary Receipts registered in the name of the Person(s) to whom
such Units have been issued, evidencing the same number of Depositary Units, as
the case may be, as the number of Units represented by the Certificates so
deposited; and (iii) shall cause the distribution of such Depositary Receipts to
such Person(s).
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10.2 Registration of Transfer and Exchange. (a) The General Partner
shall cause to be kept on behalf of the Partnership a register (the "Unit
Register") in which, subject to such reasonable regulations as it may prescribe
and subject to the provisions of Section 10.2(b) hereof, the General Partner
will provide for the registration of Units and the transfer of such Units. The
Depositary is hereby appointed Transfer Agent and registrar for the purpose of
registering Units and transfers of such Units as herein provided. The
Partnership shall not recognize transfers of Certificates representing Units
which have been deposited pursuant to Section 10.1(a) hereof and not withdrawn
or interests therein except by transfers of Depositary Units in the manner
described in this Section 10.2 and in the Deposit Agreement. Upon surrender for
registration of transfer of any Depositary Units evidenced by a Depositary
Receipt and, subject to the provisions of Section 10.2(b) hereof, the General
Partner on behalf of the Partnership will execute, and the Transfer Agent will
countersign and deliver, in the name of the holder or the designated transferee
or transferees, as required pursuant to the holder's instructions, one or more
new Depositary Receipts evidencing the same aggregate number of Depositary Units
as was evidenced by the Depositary Receipt so surrendered.
(b) The Partnership shall not recognize any transfer of Depositary
Units until the Depositary Receipts evidencing such Depositary Units are
surrendered for registration of transfer and such Depositary Receipts are
accompanied by a Transfer Application duly executed by the transferee (or the
transferee's attorney-in-fact duly authorized in writing). No charge shall be
imposed by the Partnership for such transfer, provided that, as a condition to
the issuance of any new Depositary Receipt under this Section 10.2, the General
Partner may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed with respect thereto.
10.3 Mutilated, Destroyed, Lost or Stolen Depositary Receipts. (a) If
any mutilated Depositary is surrendered to the Transfer Agent, the depositary
shall execute, and the Transfer Agent shall countersign and deliver in exchange
therefor, a new Depositary Receipt evidencing the same number of Depositary
Units, as the case may be, as the Depositary Receipt so surrendered.
(b) If there shall be delivered to the General Partner and the Transfer
Agent (i) evidence (including, without limitation, proof by affidavit if
requested by the General Partner in form and substance satisfactory to the
General Partner) to their satisfaction of the destruction, loss or theft of any
Depositary Receipt and (ii) such security or indemnity as may be required by
them to indemnify and hold each of them and any of their agents harmless, then,
in the absence of notice to the General Partner or the Transfer Agent that
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such Depositary Receipt has been acquired by a bona fide purchaser, the General
Partner on behalf of the Partnership shall execute and, upon its request, the
Transfer Agent shall countersign and deliver, in exchange for and in lieu of any
such destroyed, lost or stolen Depositary Receipt, a new Depositary Receipt
evidencing the same number of Depositary Units, as the Depositary Receipt so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Depositary Receipt under
this Section 10.3, the General Partner may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Transfer Agent) connected therewith.
10.4 Registered Owner. In accordance with Section 10.2(b) hereof, the
Partnership shall be entitled to recognize the Record Holder as the Limited
Partner or Assignee with respect to any Units and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such Units on
the part of any other Person, whether or not the Partnership shall have actual
or other notice thereof, except as otherwise provided by law or any applicable
rule, regulation, guideline or requirement of any National Securities Exchange
on which the Units are listed for trading. Without limiting the foregoing, when
a Person (such as a broker, dealer, bank, trust company or clearing corporation
or an agent of any of the foregoing) is acting as nominee, agent or in some
other representative capacity for another Person in acquiring and/or holding
Units, as between the Partnership on the one hand and such other Persons on the
other hand, such representative Person (a) shall be the Limited Partner or
Assignee (as the case may be) of record and beneficially, (b) must execute and
deliver a Transfer Application and (c) shall be bound by this Agreement and
shall have the rights and obligations of a Limited Partner or Assignee (as the
case may be) hereunder and as provided for herein.
10.5 Withdrawal of Units from and Redeposit of Units in Depositary
Account. Any Units may be withdrawn from the Depositary Account by surrender of
the Depositary Receipts evidencing the corresponding Depositary Units duly
executed by the Record Holder thereof (or his attorney-m-fact duly authorized in
writing), provided that such Record Holder is then reflected on the books and
records of the Partnership as the Limited Partner in respect of the Units for
which such withdrawals requested. Upon any such withdrawal, the General Partner
shall cause the Partnership to issue a Certificate evidencing such Units. Any
such withdrawn Units, or Units which have not previously been so deposited, may
be redeposited or deposited (as the case may be) in the Deposit Account by the
surrender of the Certificate evidencing such withdrawn Units or non-deposited
Units to the Depositary and payment to the Depositary of such fee and upon
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such terms as may be required therefor pursuant to the Deposit Agreement. Upon
any such redeposit or deposit, the Depositary shall issue a Depositary Receipt
evidencing the same number of Units as was evidenced by the Certificate so
redeposited or deposited.
10.6 Amendment of Deposit Agreement. Subject to its fiduciary
obligations, the General Partner may amend or modify any provision of the
Deposit Agreement in any respect it reasonably determines to be necessary or
appropriate, provided, however, that the General Partner shall not amend or
modify the Deposit Agreement if the effect of any such amendment or modification
would be to impair the right of Limited Partners to withdraw their Units from
deposit thereunder.
ARTICLE XI
TRANSFER OF INTERESTS
11.1 Transfer. (a) The term "transfer," when used in this Article XI
with respect to a Partnership Interest, shall be deemed to refer to an
appropriate transaction by which the General Partner assigns its Partnership
Interest as General Partner to another Person or by which the holder of a Unit
assigns such Unit to another Person who is or becomes an Assignee and includes a
sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange
or any other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article XI.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article XI shall be null and void.
11.2 Transfer of General Partner's Partnership Interest. The General
Partner may transfer all, but not less than all, of its Partnership Interest as
the General Partner to a single transferee if, but only if, (i) the holders of
at least 66 2/3% of the outstanding Units (excluding for purposes of such
determination any Units owned by the General Partner and its Affiliates)
approves of such transfer and of the admission of such transferee as General
Partner, (ii) the transferee agrees to assume and be bound by the provisions of
this Agreement and (iii) the Partnership receives an Opinion of Counsel that
such transfer would not result in the loss of limited liability of any Limited
Partner or the taxation of the Partnership as a corporation or as an association
taxable as a corporation for federal income tax purposes.
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(b) Neither Section 11.2(a) hereof nor any other provision of this
Agreement shall be construed to prevent (and all Partners do hereby consent to)
the transfer by the General Partner of all of its Partnership Interest upon its
merger, consolidation or other combination into any other entity or the transfer
by it of all or substantially all of its assets to another entity (provided that
such entity assumes all of the rights and duties of the General Partner), to the
transferee or successor entity; provided that, such entity furnishes to the
Partnership an Opinion of Counsel that such merger, consolidation, combination,
transfer or assumption will not result in a loss of limited liability of any
Limited Partner or result in the Partnership being treated as an association
taxable as a corporation for federal income tax purposes. In the case of a
transfer pursuant to this Section 11.2(b), the transferee or successor (as the
case may be) shall be admitted to the Partnership as the General Partner
immediately prior to the transfer of the Partnership Interest, and the business
of the Partnership shall continue without dissolution.
11.3 Transfer of Units. (a) Any Units which have been deposited in the
Deposit Account may be transferred, but only in the manner described in Section
10.2 hereof. Units with respect to which no such deposit has been made or which
have been withdrawn from the Deposit Account and not redeposited are not
transferable except upon death or by operation of law, by transfer to the
General Partner for the account of the Partnership or otherwise in accordance
with this Agreement. The transfer of any Units and the admission of any new
Partner shall not constitute an amendment to this Agreement.
(b) Until admitted as a Substituted Limited Partner pursuant to Article
XII, the Record Holder of a Depositary Unit shall constitute an Assignee in
respect of such Unit.
(c) Each distribution in respect of Units shall be paid by the
Partnership, directly or through the Transfer Agent or through any other Person
or agent, only to the Record Holders thereof as of the Record Date set for the
distribution. Such payment shall constitute full payment and satisfaction of the
Partnership's liability in respect of such payment, regardless of any claim of
any Person who may have an interest in such payment by reason of an assignment
or otherwise.
11.4 Restrictions on Transfers. Notwithstanding the other provisions of
this Article XI, no transfer of any Unit or interest therein of any Limited
Partner in the Partnership shall be made if such transfer (i) would violate the
then applicable federal or state securities laws or rules and regulations of the
Securities and Exchange Commission, any state securities commission or any other
governmental authorities with jurisdiction over such transfer, (ii) would result
in the taxation of the Partnership as a corporation or
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as an association taxable as a corporation for federal income tax purposes or
(iii) would affect the Partnership's existence or qualification as a limited
partnership under the Delaware Act.
11.5 Citizenship Certification; Non-citizen Assignees. (a) In the event
that, because of the nationality (or any other status) of a Limited Partner or
Assignee, the Partnership is or becomes subject to federal, state or local laws
or regulations the effect of which would, in the reasonable determination of the
General Partner, cause cancellation or forfeiture of any property in which the
Partnership has an interest, the General Partner may request any such Limited
Partner or Assignee to furnish to the General Partner or, with respect to
Depositary Units, to the Depositary within 30 days after receipt of such request
an executed Citizenship Certification or such other information concerning his
nationality, citizenship or other status (or, if the Limited Partner or Assignee
is a nominee holding for the account of another Person, the nationality,
citizenship or other status of such Person) as the General Partner may request.
If a Limited Partner or Assignee fails to furnish such Citizenship Certification
or other information as may be requested, or if upon receipt of such Citizenship
Certification or other information the General Partner determines, with the
advice of counsel, that a Limited Partner or an Assignee is not an Eligible
Citizen, the Units owned by such Limited Partner or Assignee shall be subject to
redemption in accordance with the provisions of Section 11.6 hereof. In addition
to becoming subject to redemption, the General Partner may require that the
status of any such Limited Partner or Assignee be changed to that of a
Non-citizen Assignee, and, thereupon, the General Partner shall be substituted
for such Non-citizen Assignee as the Limited Partner in respect of his Units.
(b) The General Partner shall, in exercising voting rights in respect
of Units held by it on behalf of Non-citizen Assignees, distribute the votes in
the same ratios as the votes of Limited Partners in respect of Units other than
those of Non-citizen Assignees are cast, either for, against or abstaining as to
the matter.
(c) Upon dissolution of the Partnership, a Non-citizen Assignee shall
have no right to receive a distribution in kind pursuant to Section 14.4 hereof
but shall be entitled to the cash equivalent thereof, and the General Partner
shall provide cash in exchange for an assignment of the Non-citizen Assignee's
share of the distribution in kind. Such payment and assignment shall be treated
for Partnership purposes as a purchase by the General Partner from the
Non-citizen Assignee of his Partnership Interest (representing his right to
receive his share of such distribution in kind).
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(d) At any time after he can and does certify that he has become an
Eligible Citizen, a Non-citizen Assignee may, upon application to the General
Partner, request admission as a Substituted Limited Partner with respect to any
Partnership Interest of such Non-citizen Assignee not redeemed pursuant to
Section 11.6 hereof, and upon his admission pursuant to Section 12.2 hereof the
General Partner shall cease to be deemed to be the Limited Partner in respect of
the Non-citizen Assignee's Units.
11.6 Redemption of Interests. (a) If at any time a Limited Partner or
Assignee fails to furnish a Citizenship Certification or other information
requested within the 30- day period specified in Section 11.5(a) hereof, or if
upon receipt of such Citizenship Certification or other information the General
Partner determines, with the advice of counsel, that a Limited Partner or
Assignee is not an Eligible Citizen, the Partnership may, unless the Limited
Partner or Assignee establishes to the satisfaction of the General Partner that
such Limited Partner or Assignee is an Eligible Citizen or has transferred his
Units to a person who furnishes a Citizenship Certification to the General
Partner prior to the date fixed for redemption as provided below, redeem the
Partnership Interest of such Limited Partner or Assignee as follows:
(i) The General Partner shall, not later than the 30th day before
the date fixed for redemption, give notice of redemption to
the Limited Partner or Assignee, at his last address
designated on the records of the Partnership or the
Depositary, by registered or certified mail, postage prepaid.
The notice shall be deemed to have been given when so mailed.
The notice shall specify the Redeemable Units, the date fixed
for redemption, the place of payment, that payment of the
redemption price will be made upon surrender of the Depositary
Receipt or the Certificate evidencing the Redeemable Units and
that on and after the date fixed for redemption no further
allocations or distributions to which the Limited Partner or
Assignee would otherwise be entitled in respect of the
Redeemable Units will accrue or be made.
(ii) The aggregate redemption price for Redeemable Units shall be
an amount equal to the Current Market Price (as defined in
Section 17.1) (the date of determination of which shall be the
date fixed for redemption) of Units of the class to be so
redeemed multiplied by the number of Units of each such class
included among the Redeemable Units. The redemption price
shall be paid, in the sole discretion of the General Partner,
in cash or by delivery of a promissory note of the Partnership
in the principal amount of the redemption price, bearing
interest at the rate of 10% annually and
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payable in three equal annual installments of principal,
together with accrued interest, commencing one year after the
redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner or
Assignee, at the place specified in the notice of redemption,
of the Depositary Receipt or the Certificate evidencing the
Redeemable Units, duly endorsed in blank or accompanied by an
assignment duly executed in blank, the Limited Partner or
Assignee or his duly authorized representative shall be
entitled to receive the payment therefor.
(iv) After the redemption date, Redeemable Units shall no longer
constitute issued and outstanding Units.
(b) The provisions of this Section 11.6 shall be applicable to Units
held by a Limited Partner or Assignee as nominee of a Person determined to be
other than an Eligible Citizen.
(c) Nothing in this Section 11.6 shall prevent the recipient of a
notice of redemption from transferring his Units before the redemption date if
such transfer is otherwise permitted under this Agreement. Upon receipt of
notice of such a transfer, the General Partner shall withdraw the notice of
redemption; provided, the transferee of such Units or Depositary Units certifies
in the Transfer Application that he is an Eligible Citizen. If the transferee
fails to make such certification, such redemption shall be effected from the
transferee on the original redemption date.
(d) If the Partnership or the General Partner determines that because
of the nationality (or other status) of the General Partner, whether or not in
its capacity as such, the Partnership is or becomes subject to federal, state or
local regulations the effect of which would, in the reasonable determination of
the General Partner, cause cancellation or forfeiture of any property in which
the Partnership has an interest, the Partnership may, unless the General Partner
has furnished a Citizenship Certification or transferred his Partnership
Interest or Units to a Person who furnishes a Citizenship Certification prior to
the date fixed for redemption, redeem the Partnership Interest or Interests of
the General Partner in the Partnership as provided in Section 11.6(a) hereof.
The redemption price shall be paid in cash.
11.7 [Omitted]
11.8 [Omitted]
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ARTICLE XII
ADMISSION OF PARTNERS
12.1 Admission of Limited Partners. Upon the issuance of Units by the
Partnership to the Limited Partners (as described in Section 4.3 hereof), the
General Partner shall admit to the Partnership the Limited Partner as a Limited
Partner in respect of the Units.
12.2 Admission of Substituted Limited Partners. By transfer of a
Depositary Unit in accordance with Article XI hereof, the transferor shall be
deemed to have given the transferee the right to seek admission as a Substituted
Limited Partner subject to the conditions of, and in the manner permitted under,
this Agreement. A transferor of a Depositary Receipt shall, however, only have
the authority to convey to a purchaser or other transferee who does not execute
and deliver a Transfer Application (i) the right to negotiate such Depositary
Receipt to a purchaser or other transferee and (ii) the right to transfer the
right to request admission as a Substituted Limited Partner to such purchaser or
other transferee in respect of the transferred Depositary Units. Each transferee
of a Depositary Unit (including any nominee holder or an agent acquiring such
Depositary Unit for the account of another Person) who executes a Transfer
Application shall be an Assignee and shall be deemed to have applied to become a
Substituted Limited Partner with respect to the Depositary Units so transferred
to such Person by virtue of executing and delivering such Transfer Application
Such Assignee shall become a Substituted Limited Partner at such time as the
General Partner consents thereto, which consent may be given or withheld in the
General Partner's sole discretion, and when any such admission is shown on the
books and records of the Partnership. If such consent is withheld, such
transferee shall be an Assignee. An Assignee shall have an interest in the
Partnership equivalent to that of a Limited Partner with respect to allocations
and distributions, including liquidating distributions, of the Partnership. With
respect to voting rights attributable to Units that are held by Assignees, the
General Partner shall be deemed to be the Limited Partner with respect thereto
and shall, in exercising the voting rights in respect of such Units on any
matter, vote such Units at the written direction of the Assignee who is the
Record Holder of such Units. If no such written direction is received, such
Units will not be voted. An Assignee shall have no other rights of a Limited
Partner.
12.3 Admission of Successor General Partner. A successor General
Partner approved pursuant to Section 13.1 hereof or the transferee of or
successor to all of the
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General Partner's Partnership Interest pursuant to Section 11.2 hereof who is
proposed to be admitted as a successor General Partner shall be admitted to the
Partnership as the General Partner, effective immediately prior to the
withdrawal or removal of the General Partner pursuant to Section 13.1 hereof or
the transfer pursuant to Section 11.2; provided, however, that no such successor
shall be admitted to the Partnership until the terms of Section 11.2 hereof have
been complied with. Any such successor shall carry on the business of the
Partnership without dissolution. In each case, the admission shall be subject to
the successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission.
12.4 Admission of Additional Limited Partners. (a) A Person who makes a
Capital Contribution to the Partnership in accordance with this Agreement shall
be admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and conditions of this
Agreement, including, without limitation, the power of attorney granted in
Section 1.4 hereof and (ii) such other documents or instruments as may be
required in the discretion of the General Partner in order to effect such
Person's admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 12.4, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person is
recorded on the books and records of the Partnership, following the consent of
the General Partner to such admission.
12.5 Amendment of Agreement and Certificate of Limited Partnership. For
the admission to the Partnership of any Partner, the General Partner shall take
all steps necessary and appropriate under the Delaware Act to amend the records
of the Partnership and, if necessary, to prepare as soon as practical an
amendment of this Agreement and, if required by law, shall prepare and file an
amendment to the Certificate of Limited Partnership and may for this purpose
exercise the power of attorney granted pursuant to Section 1.4 hereof.
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ARTICLE XIII
WITHDRAWAL OR REMOVAL OF PARTNERS
13.1 Withdrawal of the General Partner. (a) The General Partner shall
be deemed to have withdrawn from the Partnership upon the occurrence of any one
of the following events (each such event herein referred to as an "Event of
Withdrawal"):
(i) the General Partner voluntarily withdraws from the Partnership
by giving written notice to the other Partners;
(ii) the General Partner transfers all of its rights as General
Partner pursuant to Section 11.2 hereof;
(iii) the General Partner is removed pursuant to Section 13.2
hereof;
(iv) the General Partner
(A) makes a general assignment for the
benefit of creditors;
(B) files a voluntary bankruptcy
petition;
(C) files a petition or answer seeking
for itself a reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under
any law;
(D) files an answer or other pleading
admitting or failing to contest the material allegations of a
petition filed against the General Partner in a proceeding of
the type described in paragraphs (A)-(C) of this subsection;
or
(E) seeks, consents to or acquiesces in
the appointment of a trustee, receiver or liquidator of the
General Partner or of all or any substantial part of its
properties;
(v) a final and non-appealable judgment is entered by a court with
appropriate jurisdiction ruling that the General Partner is
bankrupt or insolvent, or a final and non-appealable order for
relief is entered by a court with appropriate jurisdiction
against the General Partner, in each case under any federal or
state bankruptcy or insolvency laws as now or hereafter in
effect; or
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(vi) a certificate of dissolution or its equivalent is filed for
the General Partner, or 90 days expire after the date of
notice to the General Partner of revocation of its charter
without a reinstatement of its charter, under the laws of its
state of incorporation. If an Event of Withdrawal specified in
paragraphs (iv), (v) or (vi) occurs, the withdrawing General
Partner shall give written notice to the Limited Partners
within 30 days after such occurrence. The Partners hereby
agree that only the Events of Withdrawal described in this
Section 13.1 shall result in withdrawal of the General Partner
from the Partnership.
(b) Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal will not constitute a breach of this
Agreement under the following circumstances: (i) at any time during the period
ending on December 31, 1999, the General Partner voluntarily withdraws by giving
at least 90 days' advance written notice of its intention to withdraw to the
Limited Partners, provided that, prior to the effective date of such withdrawal,
the Limited Partners approve such withdrawal by the vote of at least 66 2/3% of
the outstanding Units (excluding for purposes of such determination any Units
owned by the General Partner and its Affiliates); (ii) at any time after
December 31, 1999, the General Partner voluntarily withdraws by giving at least
90 days' advance written notice to the Limited Partners, such withdrawal to take
effect on the date specified in such notice; (iii) at any time that the General
Partner ceases to be a General Partner pursuant to Section 13.1 (a)(ii) hereof
or is removed pursuant to Section 13.1 (a)(iii) hereof; or (iv) notwithstanding
clause (i) above, at any time that the General Partner voluntarily withdraws by
giving at least 90 days' advance written notice of its intention to withdraw to
the Limited Partners, such withdrawal to take effect on the date specified in
the notice, if at the time such notice is given more than 50% of the outstanding
Units held by Persons other than by the General Partner and its Affiliates are
owned beneficially or of record or controlled at any time by one Person or its
Affiliates. If the General Partner gives a notice of withdrawal pursuant to
Section 13.1(a)(i) hereof or if the General Partner is removed pursuant to
Section 13.2 hereof, holders of at least a majority of the outstanding Units
(excluding for purposes of such determination Units owned by the General Partner
and its Affiliates) may, prior to the effective date of such withdrawal, elect a
successor General Partner. If, prior to the effective date of the General
Partner's withdrawal, a successor is not selected by the Limited Partners as
provided herein or the Partnership does not receive an Opinion of Counsel that
such withdrawal (following the selection of the successor General Partner) would
not result in the loss of the limited liability of the holders of Units or cause
the Partnership to be taxable as a corporation or to be treated as an
association taxable as a corporation for
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federal income tax purposes, the Partnership shall be dissolved in accordance
with Section 14.l hereof. If a successor General Partner is elected and the
Opinion of Counsel rendered as provided herein, such successor shall be admitted
(subject to Section 12.3 hereof) immediately prior to the effective time of the
withdrawal of the Departing Partner and shall continue the business of the
Partnership without dissolution.
13.2 Removal of the General Partner. The General Partner may be removed
only if such removal is approved by the written consent or affirmative vote of
Limited Partners owning at least 66 2/3% of the outstanding Units (excluding for
purposes of such determination any Units owned by the General Partner and its
Affiliates). Any such action by the Limited Partners for removal of the General
Partner must also provide for the election and succession of a new General
Partner. Such removal shall be effective immediately following the admission of
the successor General Partner pursuant to Article XII. The right of the Limited
Partners to remove the General Partner shall not exist or be exercised unless
the Partnership has received an Opinion of Counsel that the removal of the
General Partner and the selection of a successor General Partner will not result
in (i) the loss of limited liability of the Partnership or any Limited Partner
in the Partnership or (ii) the taxation of the Partnership as a corporation or
the treatment of the Partnership as an association taxable as a corporation for
federal income tax purposes.
13.3 Interest of Departing Partner and Successor General Partner. (a)
In the event of (i) withdrawal of the General Partner under circumstances where
such withdrawal does not violate this Agreement or (ii) removal of the General
Partner by the Limited Partners under circumstances where "cause" does not
exist, the Departing Partner shall, at its option exercisable prior to the
effective date of the departure of such Departing Partner, promptly receive from
its successor in exchange for its Partnership Interest as General Partner an
amount in cash equal to the fair market value of the Departing Partner's
Partnership Interest as General Partner, such amount to be determined and
payable as of the effective date of its departure. If the General Partner is
removed by the Limited Partners under circumstances where "cause" exists or if
the General Partner withdraws under circumstances where such withdrawal violates
this Agreement, its successor shall have the option described in the immediately
preceding sentence, and the Departing Partner shall not have such option. In
either event, the Departing Partner shall be entitled to receive all
reimbursements due such Departing Partner pursuant to Section 6.4, including any
employee-related liabilities, including severance liabilities, incurred in
connection with the termination of any employees employed by the Departing
Partner for the benefit of the Partnership. Subject to Section 13.3(b) hereof,
the Departing Partner shall, as of the effective date of its departure, cease to
share in any allocations or distributions with respect to its Partnership
Interest as the General Partner and Partnership
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income, gain, loss, deduction and credit will be prorated and allocated as set
forth in Section 5.1(d) hereof. For purposes of this Section 13.3, "cause" means
that a court of competent jurisdiction has entered a final non-appealable
judgment finding the General Partner liable for actual fraud, gross negligence
or wilful or wanton misconduct in its capacity as General Partner of the
Partnership.
For purposes of this Section 13.3(a), the fair market value of the
Departing Partner's Partnership Interest as the General Partner herein shall be
determined by agreement between the Departing Partner and its successor or,
failing agreement within 30 days after the effective date of such Departing
Partner's departure, by an independent investment banking firm or other
independent expert selected by the Departing Partner and its successor, which,
in turn, may rely on other experts and the determination of which shall be
conclusive as to such matter. If such parties cannot agree upon one independent
investment banking firm or other independent expert within 45 days after the
effective date of such departure, then such firm shall be designated by the
independent investment banking firm or other independent expert selected by each
of the Departing Partner and its successor. In making its determination, such
independent investment banking firm or other independent expert shall consider
the then current trading price of Units on any National Securities Exchange on
which Units are then listed, the value of the Partnership's assets, the rights
and obligations of the General Partner and other factors it may deem relevant.
(b) If the Partnership Interest is not acquired in the manner set forth
in Section 13.3(a) hereof, the Departing Partner shall become a Limited Partner
and its Partnership Interest shall be converted into Units pursuant to a
valuation made by an investment banking firm or other independent expert
selected pursuant to Section 13.3(a) hereof, without reduction in such
Partnership Interest (but subject to proportionate dilution by reason of the
admission of its successor). Any successor General Partner shall indemnify the
Departing Partner as to all debts and liabilities of the Partnership arising on
or after the date on which the Departing Partner becomes a Limited Partner. For
purposes of this Agreement, the General Partner's conversion of its Partnership
Interest to Units will be characterized as if the General Partner contributed
its Partnership Interest to the Partnership in exchange for the newly-issued
Units.
(c) If the option described in Section 13.3(a) hereof is not exercised
by the party entitled to do so, the successor General Partner shall, at the
effective date of its admission to the Partnership, contribute to the capital of
the Partnership cash in an amount such that its Capital Account, after giving
effect to such contribution and any adjustments made to the Capital Accounts of
all Partners pursuant to Section 4.6(d)(i),
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shall be equal to that percentage of the Capital Accounts of all Partners that
is equal to its Percentage Interest as the General Partner. In such event, each
successor General Partner shall, subject to the following sentence, be entitled
to such Percentage Interest of all Partnership allocations and distributions and
any other allocations and distributions to which the Departing Partner was
entitled. In addition, such successor General Partner shall cause this Agreement
to be amended to reflect that, from and after the date of such successor General
Partner's admission, the successor General Partner's interest in all Partnership
distributions and allocations shall be 2%, and that of the Unitholders shall be
98%.
13.4 [Omitted]
13.5 Withdrawal of Limited Partners. Except as provided in Section
13.4, no Limited Partner shall have any right to withdraw from the Partnership;
provided, however, that when a transferee of a Limited Partner's Units becomes a
Record Holder, such transferring Limited Partner shall cease to be a Limited
Partner with respect to the Units so transferred.
ARTICLE XIV
DISSOLUTION AND LIQUIDATION
14.1 Dissolution. The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited Partners or by
the admission of a successor General Partner in accordance with the terms of
this Agreement. Upon the removal or withdrawal of the General Partner any
successor General Partner shall continue the business of the Partnership. The
Partnership shall dissolve, and its affairs shall be wound up, upon:
(a) the expiration of its term as provided in Section 1.5 hereof;
(b) an Event of Withdrawal of the General Partner as provided in
Section 13.1(a) hereof, unless a successor is named as provided in Section
13.1(b) hereof;
(c) an election to dissolve the Partnership by the General Partner that
is approved by the affirmative vote of the holders of at least 66 2/3% of
outstanding Units, excluding for purposes of such determination Units owned by
the General Partner and its
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Affiliates, (and all Limited Partners hereby expressly consent that such
approval may be effected upon written consent of the holders of at least 66 2/3%
of outstanding Units);
(d) entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act; or
(e) the sale of all or substantially all of the assets and properties
of the Partnership.
14.2 Continuation of the Business of the Partnership after Dissolution.
Upon (i) dissolution of the Partnership caused by the withdrawal or removal of
the General Partner and following a failure of all Partners, within 90 days
after the withdrawal or removal of the General Partner, to agree to continue the
business of the Partnership and appoint a successor General Partner, then within
an additional 90 days or (ii) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 13.l(a)(iv) hereof,
then within 180 days thereafter, at least 66 2/3% of the outstanding Units may
elect to reconstitute the Partnership and continue its business on the same
terms and conditions set forth in this Agreement by forming a new limited
partnership on terms identical to those set forth in this Agreement and having
as a general partner a Person approved by the holders of at least 66 2/3% of the
outstanding Units. Upon any such election by the holders of at least 66 2/3% of
the outstanding Units, all Partners shall be bound thereby and shall be deemed
to have approved thereof. Unless such an election is made within the applicable
time period as set forth above, the Partnership shall conduct only activities
necessary to wind up its affairs. If such an election is so made, then:
(a) the reconstituted Partnership shall continue until the end of the
term set forth in Section 1.5 hereof unless earlier dissolved in accordance with
this Article XIV;
(b) if the successor General Partner is not the former General Partner,
then the interest of the former General Partner shall be treated thenceforth as
the interests of a Limited Partner and converted into Units in the manner
provided in Section 13.3(b) hereof; and
(c) all necessary steps shall be taken to cancel this Agreement and the
Certificate of Limited Partnership and to enter into and, as necessary, to file
a new partnership agreement and certificate of limited partnership, and the
successor general partner may for this purpose exercise the powers of attorney
granted the General Partner pursuant to Section 1.4 hereof; provided, that the
right of the holders of at least 66 2/3%
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of outstanding Units to approve a successor general partner and to reconstitute
and to continue the business of the Partnership shall not exist and may not be
exercised unless the Partnership has received an Opinion of Counsel that (x) the
exercise of the right would not result in the loss of limited liability of any
Limited Partner and (y) neither the Partnership nor the reconstituted limited
partnership would become taxable as a corporation or treated as an association
taxable as a corporation for federal income tax purposes upon the exercise of
such right to continue.
14.3 Liquidation Upon dissolution of the Partnership. Unless the
Partnership is continued under an election to reconstitute and continue the
Partnership pursuant to Section 14.2 hereof, the General Partner, or in the
event the General Partner has been dissolved or removed, become bankrupt as set
forth in Section 13.1 or withdrawn from the Partnership, a liquidator or
liquidating committee approved by the holders of at least 66 2/3% of the
outstanding Units, shall be the Liquidator. The Liquidator (if other than the
General Partner) shall be entitled to receive such compensation for its services
as may be approved by the holders of at least 66 2/3% of the outstanding Units.
The Liquidator shall agree not to resign at any time without 15 days' prior
written notice and (if other than the General Partner) may be removed at any
time, with or without cause by notice of removal approved by at least 662/3% of
the outstanding Units. Upon dissolution, removal or resignation of the
Liquidator, a successor and substitute Liquidator (who shall have and succeed to
all rights, powers and duties of the original Liquidator) shall within 30 days
thereafter be approved by the holders of at least 66 2/3% of the outstanding
Units. The right to approve a successor or substitute Liquidator in the manner
provided herein shall be deemed to refer also to any such successor or
substitute Liquidator approved in the manner herein provided. Except as
expressly provided in this Article XIV, the Liquidator approved in the manner
provided herein shall have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the
General Partner under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers, other than the limitation on sale set forth in Section 6.3(b) hereof) to
the extent necessary or desirable in the good faith judgment of the Liquidator
to carry out the duties and functions of the Liquidator hereunder for and during
such period of time as shall be reasonably required in the good faith judgment
of the Liquidator to complete the winding-up and liquidation of the Partnership
as provided for herein. The Liquidator shall liquidate the assets of the
Partnership, and apply and distribute the proceeds of such liquidation in the
following order of priority, unless otherwise required by mandatory provisions
of applicable law:
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(a) the payment to creditors of the Partnership, including Partners who
are creditors, in order of priority provided by law; and the creation of a
reserve of cash or other assets of the Partnership for contingent liabilities in
an amount, if any, determined by the Liquidator to be appropriate for such
purposes; and
(b) to all Partners in accordance with the positive balances in their
respective Capital Accounts after taking into account adjustments to such
Capital Accounts pursuant to Section 5.1(c) hereof.
14.4 Distributions in Kind. Notwithstanding the provisions of Section
14.3 hereof, which require the liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Partnership the Liquidator determines that an immediate sale
of part or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its absolute discretion,
defer for a reasonable time the liquidation of any assets except those necessary
to satisfy liabilities of the Partnership (including those to Partners as
creditors) and/or distribute to the Partners or to specific classes of Partners,
in lieu of cash, as tenants in common and in accordance with the provisions of
Section 14.3 hereof, undivided interests in such Partnership assets as the
Liquidator deems not suitable for liquidation. Any such distributions in kind
shall be made only if, in the good faith judgment of the Liquidator, such
distributions in kind are in the best interest of the Limited Partners, and
shall be subject to such conditions relating to the disposition and management
of such properties as the Liquidator deems reasonable and equitable and to any
agreements governing the operation of such properties at such time. The
Liquidator shall determine the fair market value of any property distributed in
kind using such reasonable method of valuation as it may adopt.
14.5 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership cash and property as provided in
Sections 14.3 and 14.4 hereof, the Partnership shall be terminated and the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be cancelled and such other actions as may be necessary to terminate the
Partnership shall be taken.
14.6 Reasonable Time for Winding-Up. A reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 14.3 hereof, in order to
minimize any losses otherwise attendant upon such winding-up and the provisions
of this Agreement shall remain in effect between the Partners during the period
of liquidation.
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14.7 Return of Capital. The General Partner shall not be personally
liable for the return of the Capital Contributions of the Limited Partners, or
any portion thereof, it being expressly understood that any such return shall be
made solely from Partnership assets.
14.8 No Capital Account Restoration. No Partner shall have any
obligation to restore any negative balance in its Capital Account upon
liquidation of the Partnership.
14.9 Waiver of Partition. Each Partner hereby waives any right to
partition of the Partnership property.
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT;
MEETINGS; RECORD DATE
15.1 Amendment to be Adopted Solely by General Partner. Each Limited
Partner agrees that the General Partner (pursuant to its powers of attorney from
the Limited Partners and Assignees), without the approval of any Limited Partner
or Assignee, may amend any provision of this Agreement, and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent or the
registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;
(c) a change that, in the sole discretion of the General Partner, is
reasonable and necessary or appropriate to qualify or continue the qualification
of the Partnership as a limited partnership or a partnership in which the
limited partners have limited liability under the laws of any state or will not
be taxable as a corporation or treated as an association taxable as a
corporation for federal income tax purposes;
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(d) a change (i) that, in the sole discretion of the General Partner,
does not adversely affect the Limited Partners in any material respect, (ii)
that is necessary or desirable to satisfy any requirements, conditions or
guidelines contained in any opinion, directive, order, ruling or regulation of
any federal or state agency or judicial authority or contained in any federal or
state statute (including, without limitation, the Delaware Act) or that is
necessary or desirable to facilitate the trading of the Depositary Units
(including, without limitation, the division of outstanding Units into different
classes in order to facilitate uniformity of tax consequences within such
classes of Units) or comply with any rule, regulation, guideline or requirement
of any National Securities Exchange on which the Depositary Units are or will be
listed for trading, compliance with any of which the General Partner determines
in its sole discretion to be in the best interests of the Partnership and the
Limited Partners or (iii) that is required to effect the intent of the
provisions of this Agreement or is otherwise contemplated by this Agreement;
(e) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Partnership or the General Partner or its directors or officers from
in any manner being subjected to the provisions of the Investment Company Act of
1940, as amended, the Investment Advisers Act of 1940, as amended, or "plan
asset" regulations adopted under the Employee Retirement Income Security Act of
1974, as amended, whether or not substantially similar to plan asset regulations
currently applied or proposed by the United States Department of Labor;
(f) subject to the terms of Section 4.4 hereof, an amendment that the
General Partner determines in its sole discretion to be necessary or desirable
in connection with the authorization for issuance of any class or series of
Units pursuant to Section 4.4 hereof;
(g) any amendment expressly permitted in this Agreement to be made by
the General Partner acting alone;
(h) [Omitted]
(i) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 16.3 hereof; or
(j) any other amendments similar to the foregoing.
15.2 Amendment Procedures. Except as provided in Sections 15.1 and 15.3
hereof, all amendments to this Agreement shall be made in accordance with the
following
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requirements: If an amendment is proposed, the General Partner shall seek the
written approval of the requisite Percentage Interests or call a meeting of the
Limited Partners to consider and vote on such proposed amendment. Each such
proposal to the Limited Partners shall contain the text of the proposed
amendment. A proposed amendment shall be effective upon its approval by at least
66 2/3% of the outstanding Units unless a greater or different percentage is
required under this Agreement. The General Partner shall notify all Record
Holders upon final adoption of any proposed amendment.
15.3 Amendment Requirements. (a) Amendments to this Agreement may be
proposed solely by the General Partner. Notwithstanding the provisions of
Sections 15.1 and 15.2 hereof, no provision of this Agreement which establishes
a Percentage Interest required to take any action shall be amended, altered,
changed, repealed or rescinded in any respect which would have the effect of
reducing such voting requirement unless such amendment is approved by the
written consent or the affirmative vote of Partners whose aggregate Percentage
Interests constitute not less than the voting requirement sought to be reduced.
(b) Notwithstanding the provisions of Sections 15.1 and 15.2 hereof, no
amendment to this Agreement may (i) enlarge the obligations of any Limited
Partner, (ii) modify the compensation payable to the General Partner or any of
its Affiliates by the Partnership, (iii) change Section 14.1(a) or (c) hereof,
(iv) restrict in any way any action by or rights of the General Partner as set
forth in this Agreement or (v) except as set forth in Section 14.1(c) hereof,
give any person the right to dissolve the Partnership.
(c) Except as otherwise provided, the General Partner may amend the
Partnership Agreement without the approval of the Limited Partners, except that
any amendment that would have a material adverse effect on the holders of any
class of outstanding Units must be approved by the holders of not less than 66
2/3% of the outstanding Units of such class.
(d) Notwithstanding any other provision of this Agreement, except for
amendments pursuant to Sections 6.3 or 15.1 hereof, no amendment shall become
effective without the approval of the Record Holders of all Units unless the
Partnership obtains an Opinion of Counsel to the effect that (i) such amendment
will not cause the Partnership to become taxable as a corporation or treated as
an association taxable as a corporation for federal income tax purposes and (ii)
such amendment will not affect the limited liability of any Limited Partner in
the Partnership under applicable law.
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(e) This Section 15.3 shall only be amended with the approval by
written consent or affirmative vote of the holders of not less than 95% of the
outstanding Units.
15.4 Meetings. All acts of Limited Partners to be taken hereunder shall
be taken in the manner provided in this Article XV. Meetings of the Limited
Partners may be called by the General Partner or by Limited Partners owning 20%
or more of the outstanding Units of the class for which a meeting is proposed.
Limited Partners shall call a meeting by delivering to the General Partner one
or more requests in writing stating that the signing Limited Partners wish to
call a meeting and indicating the general or specific purposes for which the
meeting is to be called. Within 60 days after receipt of such a call from
Limited Partners or within such greater time as may be reasonably necessary for
the Partnership to comply with any statutes, rules, regulations, listing
agreements or similar requirements governing the holding of a meeting or the
solicitation of proxies for use at such a meeting, the General Partner shall
send a notice of the meeting to the Limited Partners either directly or
indirectly through the Transfer Agent. A meeting shall be held at a time and
place determined by the General Partner on a date not more than 60 days after
the mailing of notice of the meeting. Limited Partners shall not vote on matters
that would cause the Limited Partners to be deemed to be taking part in the
management and control of the business and affairs of the Partnership so as to
jeopardize the Limited Partners' limited liability under the Delaware Act or the
law of any other state in which the Partnership is qualified to do business.
15.5 Notice of a Meeting. Notice of a meeting called pursuant to
Section 15.4 hereof shall be given to the Record Holders in writing by mail or
other means of written communication in accordance with Section 17.1 hereof. The
notice shall be deemed to have been given at the time when deposited in the mail
or sent by other means of written communication.
15.6 Record Date. For purposes of determining the Limited Partners
entitled to notice of or to vote at a meeting of the Limited Partners or to give
approvals without a meeting as provided in Section 15.11 hereof, the General
Partner may set a Record Date, which shall not be less than 10 nor more than 60
days before (a) the date of the meeting (unless such requirement conflicts with
any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed for trading, in which case the rule,
regulation, guideline or requirement of such exchange shall govern) or (b) in
the event that approvals are sought without a meeting, the date on which Limited
Partners are requested in writing by the General Partner to give such approvals.
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15.7 Adjournment. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting and a new Record Date need not
be fixed, if the time and place thereof are announced at the meeting at which
the adjournment is taken, unless such adjournment shall be for more than 45
days. At the adjourned meeting, the Partnership may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than 45 days or if a new Record Date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given in accordance with this Article
XV.
15.8 Waiver of Notice; Approval of Meeting; Approval of Minutes. The
transactions of any meeting of Limited Partners, however called and noticed, and
whenever held, shall be as valid as if had at a meeting duly held after regular
call and notice, if a quorum is present either in person or by proxy, and if,
either before or after the meeting, each of the Limited Partners entitled to
vote, present in person or by proxy, signs a written waiver of notice or an
approval of the holding of the meeting or an approval of the minutes thereof.
All waivers and approvals shall be filed with the Partnership records or made a
part of the minutes of the meeting. Attendance of a Limited Partner at a meeting
shall constitute a waiver of notice of the meeting, except when the Limited
Partner does not approve, at the beginning of the meeting, of the transaction of
any business because the meeting is not lawfully called or convened; and except
that attendance at a meeting is not a waiver of any right to disapprove the
consideration of matters required to be included in the notice of the meeting,
but not so included, if the disapproval is expressly made at the meeting.
15.9 Quorum. 66 2/3% of the outstanding Units of the class for which a
meeting has been called represented in person or by proxy shall constitute a
quorum at a meeting of Limited Partners of such class unless any such action by
the Limited Partners requires approval by holders of a majority in interest of
the Units, in which case, the quorum shall be a majority. At any meeting of the
Limited Partners duly called and held in accordance with this Agreement at which
a quorum is present, the act of Limited Partners whose Percentage Interests
represent at least 66 2/3% of the Percentage Interests entitled to vote and be
present in person or by proxy at such meeting shall be deemed to constitute the
act of all Limited Partners, unless a different percentage is required with
respect to such action under the provisions of this Agreement, in which case the
act of the Limited Partners owning such different percentage shall be required.
The Limited Partners present at a duly called or held meeting at which a quorum
is present may continue to transact business until adjournment, notwithstanding
the withdrawal of enough Limited Partners to leave less than a quorum, if any
action taken (other than adjournment) is approved by the required Percentage
Interests of the Limited Partners
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specified in this Agreement. In the absence of a quorum, any meeting of Limited
Partners may be adjourned from time to time by the affirmative vote of a
majority of the Percentage Interests represented either in person or by proxy,
but no other business may be transacted, except as provided in Section 15.7
hereof.
15.10 Conduct of Meeting. The General Partner shall have full power and
authority concerning the manner of conducting any meeting of the Limited
Partners or solicitation of approvals in writing, including, without limitation,
the determination of Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of Section 15.4 hereof, the conduct of voting,
the validity and effect of any proxies and the determination of any
controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as
chairman of any meeting and shall further designate a Person to take the minutes
of any meeting, in either case including, without limitation, a Partner or a
director or officer of the General Partner. All minutes shall be kept with the
records of the Partnership maintained by the General Partner. The General
Partner may make such other regulations consistent with applicable law and this
Agreement as it may deem advisable concerning the conduct of any meeting of the
Limited Partners or solicitation of approvals in writing, including regulations
in regard to the appointment of proxies, the appointment and duties of
inspectors of votes and approvals, the submission and examination of proxies and
other evidence of the right to vote, and the revocation of approvals in writing.
15.11 Action Without a Meeting. Any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting if an approval in
writing setting forth the action so taken is signed by Limited Partners owning
not less than the minimum Percentage Interests that would be necessary to
authorize or take such action at a meeting at which all the Limited Partners
were present and voted. Prompt notice of the taking of action without a meeting
shall be given to the Limited Partners who have not approved in writing. The
General Partner may specify that any written ballot submitted to Limited
Partners for the purpose of taking any action without a meeting shall be
returned to the Partnership within the time period, which shall be not less than
20 days, specified by the General Partner. If a ballot returned to the
Partnership does not vote all of the Units held by the Limited Partner, the
Partnership shall be deemed to have failed to receive a ballot for the Units
which were not voted. If approval of the taking of any action by the Limited
Partners is solicited by any Person other than by or on behalf of the General
Partner, the written approvals shall have no force and effect unless and until
(a) they are deposited with the Partnership in care of the General Partner, (b)
approvals sufficient to take the action proposed are dated as of a date not more
than 90 days prior to the date sufficient approvals are deposited with the
Partnership and (c) an Opinion of Counsel is delivered to
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the General Partner to the effect that the exercise of such right and the action
proposed to be taken with respect to any particular matter (i) will not cause
the Limited Partners to be deemed to be taking part in the management and
control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners' limited liability, (ii) will not jeopardize the status of the
Partnership as a partnership under applicable tax laws and regulations and (iii)
is otherwise permissible under the state statutes then governing the rights,
duties and liabilities of the Partnership and the Partners.
15.12 Voting and Other Rights. (a) Only those Record Holders of Units
on the Record Date set pursuant to Section 15.6 hereof shall be entitled to
notice of, and to vote at, a meeting of Limited Partners or to act with respect
to matters as to which approvals are solicited.
(b) With respect to Units that are held for a Person's account by
another Person (such as a broker, dealer, bank, trust company or clearing
corporation, or an agent of any of the foregoing), in whose name such Units are
registered, such broker, dealer or other agent shall, in exercising the voting
rights in respect of such Units on any matter, and unless the arrangement
between such Persons provides otherwise, vote such Units in favor of, and at the
direction of, the Person who is the beneficial owner, and the Partnership shall
be entitled to assume it is so acting without further inquiry. The provisions of
this Section 15.12(b) (as well as all other provisions of this Agreement) are
subject to the provisions of Section 10.4 hereof.
ARTICLE XVI
MERGER
16.1 Authority. The Partnership may merge or consolidate with one or
more corporations, business trust or associations, real estate investment
trusts, common law trusts or unincorporated businesses, including, without
limitation, a general partnership or limited partnership, formed under the laws
of the State of Delaware or any other state of the United States of America
pursuant to a written agreement of merger or consolidation ("Merger Agreement")
in accordance with this Article.
16.2 Procedure for Merger or Consolidation. Merger or consolidation of
the Partnership pursuant to this Article requires the prior approval of the
General Partner. If the General Partner shall determine, in the exercise of its
sole discretion, to consent to the
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merger or consolidation, the General Partner shall approve the Merger Agreement,
which shall set forth:
(a) The names and jurisdictions of formation or organization of each of
the business entities proposing to merge or consolidate;
(b) The name and jurisdictions of formation or organization of the
business entity that is to survive the proposed merger or consolidation
(hereafter designated as the "Surviving Business Entity");
(c) The terms and conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property or
general or limited partnership interests, rights, securities or obligations of
the Surviving Business Entity; and (i) if any general or limited partnership
interests, securities or rights of any constituent business entity are not to be
exchanged or converted solely for, or into, cash, property or general or limited
partnership interests, rights, securities or obligations of the Surviving
Business Entity, the cash, property or general or limited partnership interests,
rights, securities or obligations of any limited partnership, corporation, trust
or other entity (other than the Surviving Business Entity) which the holders of
such general or limited partnership interests are to receive in exchange for, or
upon conversion of, their securities or rights, and (ii) in the case of
securities represented by certificates, upon the surrender of such certificates,
which cash, property or general or limited partnership interests, rights,
securities or obligations of the Surviving Business Entity or any limited
partnership, corporation, trust or other entity (other than the Surviving
Business Entity), or evidences thereof are to be delivered;
(e) A statement of any changes in the constituent documents (the
articles or certificate of incorporation, articles of trust, declaration of
trust, certificate or agreement of limited partnership or other similar charter
or governing document) of the Surviving Business Entity to be effected by such
merger or consolidation;
(f) The effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 16.4 hereof or a later
date specified in or determinable in accordance with the Merger Agreement
(provided that if the effective time of the merger is to be later than the date
of the filing of the certificate of merger, it shall be fixed no later than the
time of the filing of the certificate of merger and stated therein); and
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(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or desirable.
16.3 Approval by Limited Partners of Merger or Consolidation.
(a) The General Partner of the Partnership, upon its approval of
the Merger Agreement, shall direct that the Merger Agreement be submitted to a
vote of Limited Partners whether at a meeting or by written consent, in either
case in accordance with the requirements of Article XV hereof. A copy or a
summary of the Merger Agreement shall be included in or enclosed with the notice
of a meeting or the written consent.
(b) The Merger Agreement shall be approved upon receiving the
affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding Units of each class unless the Merger Agreement contains any
provision which, if contained in an amendment to the Agreement, the provisions
of this Agreement or the Delaware Act would require the vote or consent of a
greater percentage of the Percentage Interests of the Limited Partners or of any
class of Limited Partners, in which case such greater percentage vote or consent
shall be required for approval of the Merger Agreement.
(c) After such approval by vote or consent of the Limited Partners,
and at any time prior to the filing of the certificate of merger pursuant to
Section 16.4 hereof, the merger or consolidation may be abandoned pursuant to
provisions therefor, if any, set forth in the Merger Agreement.
16.4 Certificate of Merger. Upon the required approval by the General
Partner and Limited Partners of a Merger Agreement, a certificate of merger
shall be executed and filed with the Secretary of State of the State of Delaware
in conformity with the requirements of the Delaware Act.
16.5 Effect of Merger. (a) Upon the effective date of the certificate
of merger:
(i) all of the rights, privileges and powers of each of the
business entities that has merged or consolidated, and all
property, real, personal and mixed, and all debts due to any
of those business entities and all other things and causes of
action belonging to each of those business entities shall be
vested in the Surviving Business Entity and after the merger
or consolidation shall be the property of the Surviving
Business Entity to the extent they were of each constituent
business entity;
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(ii) the title to any real property vested by deed or otherwise in
any of those constituent business entities shall not revert
and is not in any way impaired because of the merger or
consolidation;
(iii) all rights of creditors and all liens on or security interests
in property of any of those constituent business entities
shall be preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent
business entities shall attach to the Surviving Business
Entity, and may be enforced against it to the same extent as
if the debts, liabilities and duties had been incurred or
contracted by it.
(b) A merger or consolidation effected pursuant to this Article shall
not be deemed to result in a transfer or assignment of assets or liabilities
from one entity to another having occurred.
ARTICLE XVII
RIGHT TO ACQUIRE UNITS
17.1 Right to Acquire Units. (a) Notwithstanding the provisions of
Section 13.1(a) hereof or any other provision of this Agreement (i) in the event
that at any time less than 10% of the total Units outstanding are held by
Persons other than the General Partner and its Affiliates, the General Partner
shall then have the right, which right it may assign and transfer to the
Partnership or any Affiliate of the General Partner, exercisable in its sole
discretion, to purchase all, but not less than all, of the Units outstanding
held by Persons other than the General Partner and its Affiliates, at the
greater of (x) the Current Market Price as of the date the notice described in
Section 17.1 (b) hereof is mailed, or (y) the highest cash price paid by the
General Partner for any Unit purchased during the 90-day period preceding the
date that the notice described in Section 17.1(b) hereof is mailed. As used
herein, (i) "Current Market Price" of any class of Units listed or admitted to
trading on any National Securities Exchange means the average of the daily
Closing Prices (as hereinafter defined) per Unit of such class for the 20
consecutive Trading Days (as hereinafter defined) immediately prior to such date
and (ii) "Trading Day" means a day on which the principal National Securities
Exchange on which the Units of any class are listed or admitted to trading is
open for the transaction of business
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or, if Units of a class are not listed or admitted to trading on any National
Securities Exchange, a day on which banking institutions in New York City
generally are open.
(b) If the General Partner, any Affiliate of the General Partner or the
Partnership elects to exercise either right to purchase Units granted pursuant
to Section 17.1(a) hereof, the General Partner shall deliver to the Transfer
Agent written notice of such election to purchase (hereinafter in this Section
17.1 called the "Notice of Election to Purchase") and shall cause the Transfer
Agent to mail a copy of such Notice of Election to Purchase to the Record
Holders of Units (as of a Record Date selected by the General Partner) at least
10, but not more than 60, days prior to the Purchase Date. Such Notice of
Election to Purchase shall also be published in daily newspapers of general
circulation printed in the English language and published in the Borough of
Manhattan, New York. The Notice of Election to Purchase shall specify the
Purchase Date and the price (determined in accordance with Section 17.1(a)
hereof) at which Units will be purchased and state that the General Partner, its
Affiliate or the Partnership, as the case may be, elects to purchase such Units,
upon surrender Depositary Receipts of with respect to such Units in exchange for
payment, at such office or offices of the Transfer Agent as the Transfer Agent
may specify, or as may be required by any National Securities Exchange on which
the Units are listed or admitted to trading. Any such Notice of Election to
Purchase mailed to a Record Holder of Units at his address as reflected in the
records of the Transfer Agent shall be conclusively presumed to have been given
whether or not the owner receives such notice. On or prior to the Purchase Date,
the General Partner, its Affiliate or the Partnership, as the case may be, shall
deposit with the Transfer Agent cash in an amount sufficient to pay the
aggregate purchase price of all of the Units to be purchased in accordance with
this Section 17.1. If the Notice of Election to Purchase shall have been duly
given as aforesaid at least 10 days prior to the Purchase Date, and if on or
prior to the Purchase Date the deposit described in the preceding sentence has
been made for the benefit of the holders of Units subject to purchase as
provided herein, then from and after the Purchase Date, notwithstanding that any
Depositary Receipt shall not have been surrendered for purchase, all rights of
the holders of such Units (including, without limitation, any rights pursuant to
Articles IV, V and XIV hereof) shall thereupon cease, except the right to
receive the purchase price (determined in accordance with Section 17.1(a)
hereof) for Units therefor, without interest, upon surrender to the Transfer
Agent of the Depositary Receipts representing such Units, and such Units shall
thereupon be deemed to be transferred to the General Partner, its Affiliate or
the Partnership, as the case may be, on the record books of the Transfer Agent
and the Partnership, and the General Partner or any Affiliate of the General
Partner, or the Partnership, as the case may be, shall be deemed to be the owner
of all such Units from and after the Purchase
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Date and shall have all rights as the owner of such Units (including, without
limitation, all rights as owner of such Units pursuant to Articles IV, V and XIV
hereof).
(c) At any time from and after the Purchase Date, a holder of an
outstanding Unit subject to purchase as provided in this Section 17.1 may
surrender his Depositary Receipt or Certificate, as the case may be, evidencing
such Unit to the Transfer Agent in exchange for payment of the amount described
in Section 17.1(a) therefor without interest thereon.
ARTICLE XVIII
GENERAL PROVISIONS
18.1 Addresses and Notices. Any notice, demand, request or report
required or permitted to be given or made to a Partner or Assignee under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first-class United States mail or by other means of
written communication to the Partner or Assignee at the address described below.
Any notice, payment or report to be given or made to a Partner or Assignee
hereunder shall be deemed conclusively to have been given or made, and the
obligation to give such notice or report or to make such payment shall be deemed
conclusively to have been fully satisfied, upon sending of such notice, payment
or report to the Record Holder of such Unit at his address as shown on the
records of the Transfer Agent or as otherwise shown on the records of the
Partnership, regardless of any claim of any Person who may have an interest in
such Unit or the Partnership Interest of a General Partner by reason of an
assignment or otherwise. An affidavit or certificate of making of any notice,
payment or report in accordance with the provisions of this Section 18.1
executed by the General Partner, the Transfer Agent or the mailing organization
shall be prima facie evidence of the giving or making of such notice, payment or
report. If any notice, payment or report addressed to a Record Holder at the
address of such Record Holder appearing on the books and records of the Transfer
Agent or the Partnership is returned by the United States Post Office marked to
indicate that the United States Postal Service is unable to deliver it, such
notice, payment or report and any subsequent notices, payments and reports shall
be deemed to have been duly given or made without further mailing (until such
time as such Record Holder or another Person notifies the Transfer Agent or the
Partnership of a change in his address) if they are available for the Partner or
Assignee at the principal office of the Partnership for a period of one year
from the date of the giving or making of such notice, payment or report to the
other Partners and Assignees. Any notice to the Partnership shall be deemed
given if
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received by the General Partner at the principal office of the Partnership
designated pursuant to Section 1.3 hereof. The Partnership and the General
Partner may rely and shall be protected in relying on any notice or other
document from a Partner or other Person if believed by them to be genuine.
18.2 Titles and Captions. All article or section titles or captions in
this Agreement are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit, extend or describe the scope or intent of
any provisions hereof. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.
18.3 Pronouns and Plurals. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
18.4 Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.
18.5 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.
18.6 Integration. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.
18.7 Creditors. None of the provisions of this Agreement shall be for
the benefit of, or shall be enforceable by, any creditor of the Partnership.
18.8 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
remedy consequent upon a breach thereof shall constitute waiver of any such
breach or any other covenant, duty, agreement or condition.
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IN WITNESS WHEREOF, this Agreement is executed by the parties
hereto as of the date first above written.
PLUM CREEK TIMBER COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
PLUM CREEK TIMBER I, L.L.C.
By: Plum Creek Timber Company, Inc.
its Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
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