EXHIBIT 3.1
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ HOTELS, L.P.
SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP, dated as of November 23, 1994, is entered into by and among ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ Hotels, Inc., a Delaware corporation, as the General Partner, and the
Persons whose names are set forth on Exhibit A as attached hereto, as the
Limited Partners, together with any other Persons who become Partners in the
Partnership as provided herein.
WHEREAS, ▇▇▇▇▇▇▇ of Missouri, Inc., a Missouri corporation, as
general partner, and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as limited partner, previously formed a
limited partnership pursuant to an Agreement of Limited Partnership dated
September 5, 1989 (the "Initial Agreement"); and
WHEREAS, the Initial Agreement was amended and restated in its
entirety in an agreement dated February 11, 1994 (the "Amended and Restated
Limited Partnership Agreement"), to reflect the admission of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Hotels, Inc., a Missouri corporation (to be renamed as of the Effective Date,
and referred to herein as, ▇▇▇▇▇▇▇, Inc.) as the General Partner in the place
and stead of ▇▇▇▇▇▇▇ of Missouri, Inc.; and
WHEREAS, the parties hereto desire to amend and restate the
Amended and Restated Limited Partnership Agreement in its entirety to reflect
the admission of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, Inc., a Delaware corporation, as the
General Partner in the place and stead of ▇▇▇▇▇▇▇, Inc., to reflect the
conversion of the interest of ▇▇▇▇▇▇▇, Inc. in the Partnership into a limited
partnership interest, and to reflect the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree to
enter into this Second Amended and Restated Partnership Agreement on the terms
which follow:
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership
Act, as it may be amended from time to time, and any successor to such statute.
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 4.2 hereof and who is shown
as such on the books and records of the Partnership.
"Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each Partnership Year (i) increased
by any amounts which such Partner is obligated to restore pursuant to any
provision of this Agreement, or is treated as being obligated to restore
pursuant to Regulations Section 1.704-1(b)(2)(ii)(c), or is deemed to be
obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the items
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-
1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Adjusted Capital Account
as of the end of the relevant Partnership Year.
"Adjusted Property" means any property the Carrying Value of
which has been adjusted pursuant to Exhibit B 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 1.D of
Exhibit B hereof.
"Affiliate" means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by or under common control with
such Person, (ii) any Person owning or controlling ten percent (l0%) or more of
the outstanding voting interests of such Person, (iii) any Person of which such
Person owns or controls ten percent (10%) or more of the voting interests, or
(iv) any officer, director, general partner or trustee of such Person or of any
Person referred to in clauses (i), (ii), and (iii) above. For the purposes of
this definition, "control" when used with respect to any Person, means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreed Value" means (i) in the case of any Contributed
Property set forth in Exhibit D and as of the time of its contribution to the
Partnership, the Agreed Value of such property as set forth in Exhibit D; (ii)
in the case of any Contributed Property not set forth in Exhibit D and as of the
time of its contribution to the Partnership, the 704(c) 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 (iii) in
the case of any property distributed to a Partner 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 upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the Regulations
thereunder.
"Agreement" means this Second Amended and Restated Agreement
of Limited Partnership, as it may be amended, supplemented or restated from time
to time.
"Assignee" means a Person to whom one or more Partnership
Units have been transferred in a manner permitted under this Agreement, but who
has not become a Substituted Limited Partner, and who has the rights set forth
in Section 11.5.
"Book-Tax Disparities" 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 with be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Exhibit B 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 any day except a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close.
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"Capital Account" means the Capital Account maintained for a
Partner pursuant to Exhibit B hereof.
"Capital Contribution" means, with respect to any Partner, any
cash, cash equivalents or the Agreed Value of Contributed Property which such
Partner contributes or is deemed to contribute to the Partnership pursuant to
Section 4.1, 4.2, or 4.3 hereof. The principal amount of a promissory note which
is not readily traded on an established securities market and which is
contributed by a Partner as the maker of the note shall not be considered a
capital contribution until the Partnership makes a taxable disposition of the
note or until (and to the extent) principal payments are made on the note, all
in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(d)(2).
"Carrying Value" means (i) with respect to a Contributed
Property or Adjusted Property, the 704(c) Value of such property, reduced (but
not below zero) by all Depreciation with respect to such Property charged to the
Partners' Capital Accounts following the contribution of or adjustment with
respect to such Property, and (ii) 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 Exhibit B 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 Amount" means an amount of cash per Partnership Unit
equal to the Value on the Valuation Date of the JQHH Class A Shares Amount.
"Certificate" means the Certificate of Limited Partnership
relating to the Partnership filed in the office of the Delaware Secretary of
State, as amended from time to time in accordance with the terms hereof and the
Act.
"Certificate of Incorporation" means the Certificate of
Incorporation of the General Partner filed in the State of Delaware on September
29, 1994, as amended or restated from time to time.
"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.
"Consent" means the consent or approval of a proposed action
by a Partner given in accordance with Section 14.2 hereof.
"Contributed Property" means each property or other asset
contributed to the Partnership, in such form as may be permitted by the Act, but
excluding cash contributed or deemed contributed to the Partnership. Once the
Carrying Value of a Contributed Property is adjusted pursuant to Section ▇.▇ of
Exhibit B hereof, such property shall no longer constitute a Contributed
Property for purposes of Exhibit B hereof, but shall be deemed an Adjusted
Property for such purposes.
"Conversion Factor" means 1.0, provided that in the event that
the General Partner (i) declares or pays a dividend on its outstanding JQHH
Class A Shares in JQHH Class A Shares or makes a distribution to all holders of
its outstanding JQHH Class A Shares in JQHH Class A Shares; (ii) subdivides its
outstanding JQHH Class A Shares; or (iii) combines its outstanding JQHH Class A
Shares into a smaller number of JQHH Class A Shares, the Conversion Factor shall
be adjusted by
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multiplying the Conversion Factor by a fraction, the numerator of which shall be
the number of JQHH Class A Shares issued and outstanding on the record date for
such dividend, distribution, subdivision or combination (assuming for such
purposes that such dividend, distribution, subdivision or combination has
occurred as of such time), and the denominator of which shall be the actual
number of JQHH Class A Shares (determined without the above assumption) issued
and outstanding on the record date for such dividend, distribution, subdivision
or combination. Any adjustment to the Conversion Factor shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
"Debt" means, as to any Person, as of any date of
determination, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services; (ii) 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; (iii) 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; and (iv) lease
obligations of such Person which, in accordance with generally accepted
accounting principles, should be capitalized.
"Depreciation" means, for each Partnership year, an amount
equal to the federal income tax depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year, except that
if the Carrying Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Carrying Value
as the federal income tax depreciation, amortization, or other cost recovery
deduction for such year bears to such beginning adjusted tax basis; provided,
however, that if the federal income tax depreciation, amortization, or other
cost recovery deduction for such year is zero, Depreciation shall be determined
with reference to such beginning Carrying Value using any reasonable method
selected by the General Partner.
"Distribution Amount" means, with respect to any period for
which there is a Distribution Event, an amount equal to the aggregate amount
that the Partnership would have paid in income taxes had it been a C corporation
during the period to which the Distribution Event relates.
"Distribution Event" means any quarter in which the General
Partner incurs an income tax liability as a result of its status as the General
Partner of the Partnership.
"Effective Date" means the date of closing of the initial
public offering of Class A shares of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, Inc., a Delaware
corporation, pursuant to that certain underwriting agreement among ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ Hotels, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, L.P., and Wertheim ▇▇▇▇▇▇▇▇ & Co.
Incorporated, ▇▇▇▇▇▇, Peabody & Co. Incorporated and ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.,
as representatives of the several underwriters named therein.
"General Partner" means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, Inc., a
Delaware corporation, or its successors as general partner of the Partnership.
"General Partner Distribution Amount" means an amount
necessary to satisfy any income tax obligations of the General Partner incurred
due to its status as the General Partner of the Partnership.
"General Partner Interest" means a Partnership Interest held
by the General Partner that is a general partnership interest. A General Partner
Interest may be expressed as a number of Partnership Units.
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"IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.
"Immediate Family" means, with respect to any natural Person,
such natural Person's spouse and such natural Person's natural or adoptive
parents, descendants, nephews, nieces, brothers, and sisters.
"Incapacity" or "Incapacitated" means, (i) as to any
individual Partner, death, total physical disability or entry by a court of
competent jurisdiction adjudicating him incompetent to manage his Person or his
estate; (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter; (iii) as to any partnership which is a Partner, the
dissolution and commencement of winding up of the partnership; (iv) as to any
estate which is a Partner, the distribution by the fiduciary of the estate's
entire interest in the Partnership; (v) as to any trustee of a trust which is a
Partner, the termination of the trust (but not the substitution of a new
trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For
purposes of this definition, bankruptcy of a Partner shall be deemed to have
occurred when (a) the Partner commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (b) the Partner is adjudged as
bankrupt or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief of or against
such Partner under any bankruptcy, insolvency or other similar law now or
hereafter in effect has not been dismissed within one hundred twenty (120) days
after the commencement thereof, (g) the appointment without the Partner's
consent or acquiescence of a trustee, receiver or liquidator has not been
vacated or stayed within ninety (90) days of such appointment, or (h) an
appointment referred to in clause (g) which has been stayed is not vacated
within ninety (90) days after the expiration of any such stay.
"Indemnitee" means (i) any Person made a party to a proceeding
by reason of his status as (A) the General Partner or (B) a director or officer
of the Partnership or the General Partner, or (C) his or its liability, pursuant
to a loan guarantee or otherwise, for any indebtedness of the Partnership or any
Subsidiary of the Partnership (including, without limitation, any indebtedness
which the Partnership or any Subsidiary of the Partnership has assumed or taken
assets subject to), and (ii) such other Persons (including Affiliates of the
General Partner or the Partnership) as the General Partner may designate from
time to time (whether before or after the event giving rise to potential
liability), in its sole and absolute discretion.
"Indenture" means that certain Indenture, dated as of February
22, 1994, between the Partnership and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels Finance
Corporation, a Missouri corporation, as joint and several obligors and First
Fidelity Bank, N.A., as trustee.
"JQHH Class A Share" means a share of Class A common stock,
par value $.0l per share, of the General Partner.
"JQHH Class A Shares Amount" means a whole number of JQHH
Class A Shares equal to the product of the number of Partnership Units offered
for redemption by a Redeeming Partner, multiplied by the Conversion Factor
(rounded down to the nearest whole number in the event such product is not a
whole number); provided that in the event the General Partner at any time issues
to all holders of JQHH Class A Shares rights, options, warrants or convertible
or exchangeable securities entitling the shareholders to subscribe for or
purchase JQHH Class A
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Shares, or any other securities or property (collectively, the "rights"), which
rights have not expired pursuant to their terms, then the JQHH Class A Shares
Amount thereafter shall also include such rights that a holder of that number of
JQHH Class A Shares would be entitled to receive.
"Limited Partner" means any Person named as a Limited Partner
in Exhibit A attached hereto, as such Exhibit may be amended from time to time,
or any Substituted Limited Partner or Additional Limited Partner, in such
Person's capacity as a Limited Partner in the Partnership.
"Limited Partner Distribution Amount" means the Distribution
Amount less the General Partner Distribution Amount.
"Limited Partner Interest" means a Partnership Interest of a
Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Partners and includes any and all benefits to which
the holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Limited Partner Interest may be expressed as
a number of Partnership Units.
"Liquidator" has the meaning set forth in Section 13.2.
"Net Income" means, for any taxable period, the excess, if
any, of the Partnership's items of income and gain for such taxable period over
the Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
federal income tax accounting principles, subject to the specific adjustments
provided for in Exhibit B. Once an item of income, gain, loss or deduction that
has been included in the initial computation of Net Income is subjected to the
special allocation rules in Exhibit C Net Income or the resulting Net Loss,
whichever the case may be, shall be recomputed without regard to such item.
"Net Loss" means, for any taxable period, the excess, if any,
of the Partnership's items of loss and deduction for such taxable period over
the Partnership's items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
federal income tax accounting principles, subject to the specific adjustments
provided for in Exhibit B. Once an item of income, gain, loss or deduction that
has been included in the initial computation of Net Loss is subjected to the
special allocation rules in Exhibit C, Net Loss or the resulting Net Income,
whichever the case may be, shall be recomputed without regard to such item.
"Nonrecourse Built-in Gain" means, 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 Section 2.B of Exhibit C if
such properties were disposed of in a taxable transaction in full satisfaction
of such liabilities and for no other consideration.
"Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.752-1(a)(2).
"Noteholders" means the holders of the Notes.
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"Notes" means the 8 7/8% First Mortgage Notes due 2004 issued
by the Partnership and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels Finance Corporation, as joint and
several obligers.
"Notice of Redemption" means the Notice of Redemption
substantially in the form of Exhibit E to this Agreement.
"Original Limited Partner" means a Limited Partner who is or
becomes a Partner on the Effective Date and who owns one or more Original
Limited Partnership Units on the date action is called for under Section 13.1.
"Original Limited Partnership Unit" means a Partnership Unit
held by an Original Limited Partner on the Effective Date and held by such
Original Limited Partner on the date action is called for under Section 13.1.
"Partner" means a General Partner or a Limited Partner, and
"Partners" means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"Partnership" means the limited partnership formed under the
Act and pursuant to the Original Agreement and any successor thereto.
"Partnership Interest" means an ownership interest in the
Partnership representing a Capital Contribution by either a Limited Partner or
the General Partner and includes any and all benefits to which the holder of
such a Partnership Interest may be entitled as provided in this Agreement,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement. A Partnership Interest may be expressed as a
number of Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in Partnership Minimum Gain, for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"Partnership Record Date" means the record date established by
the General Partner for any distribution pursuant to Section 5.1 hereof.
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Section 4.1 or 4.2. As
of the Effective Date, there shall be considered to be [number] Partnership
Units outstanding, with each Partnership Unit representing a [number]%
Percentage Interest in the Partnership. The ownership of Partnership Units may
be evidenced by such form of certificate for units as the General Partner adopts
from time to time.
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"Partnership Year" means the fiscal year of the Partnership,
which shall end on the Friday nearest December 31.
"Percentage Interest" means, as to a Partner, its interest in
the Partnership as determined by dividing the Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding and as
specified in Exhibit A attached hereto, as such Exhibit may be amended from
time to time.
"Person" means an individual or a corporation, partnership,
trust, unincorporated organization, association or other entity.
"Recapture Income" means any gain recognized by the
Partnership 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.
"Redeeming Partner" has the meaning set forth in Section 8.6
hereof.
"Redemption Right" shall have the meaning set forth in Section
8.6 hereof.
"Regulations" means the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Residual Gain" or "Residual Loss" means 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 Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate
Book-Tax Disparities.
"704(c) Value" of any Contributed Property means the value of
such property as set forth in Exhibit D or if no value is set forth in Exhibit
D, 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 704(c) 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 Exhibit B hereof. Subject to Exhibit B
hereof, the General Partner shall, in its sole and absolute discretion, use such
method as it deems reasonable and appropriate to allocate the aggregate of the
704(c) Values of Contributed Properties in a single or integrated transaction
among the separate properties on a basis proportional to their respective fair
market values.
"Specified Redemption Date" means the tenth (10th) Business
Day after receipt by the General Partner of a Notice of Redemption; provided
that no Specified Redemption Date shall occur before one (1) year from the date
of this Agreement; provided further that if the General Partner combines its
outstanding JQHH Class A Shares, no Specified Redemption Date shall occur after
the record date and prior to the effective date of such combination.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, 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.
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Partnership Pursuant to Section 11.4.
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"Terminating Capital Transaction" means any sale or other
disposition of all or substantially all of the assets of the Partnership or a
related series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership.
"Unrealized Gain" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of (i) the
fair market value of such property (as determined under Exhibit B hereof) as of
such date, over (ii) the Carrying Value of such property (prior to any
adjustment to be made pursuant to Exhibit B 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 (i) the
Carrying Value of such property (prior to any adjustment to be made pursuant to
Exhibit B hereof) as of such date, over (ii) the fair market value of such
property (as determined under Exhibit B hereof) as of such date.
"Valuation Date" means the date of receipt by the General
Partner of a Notice of Redemption or, if such date is not a Business Day, the
first Business Day thereafter.
"Value" means, with respect to a JQHH Class A Share, the
average of the daily market price for the ten (10) consecutive trading days
immediately preceding the Valuation Date. The market price for each such trading
day shall be: (i) if the JQHH Class A Shares are listed or admitted to trading
on any securities exchange or the NASDAQ-National Market System, the closing
price, regular way, on such day, or if no such sale takes place on such day, the
average of the closing bid and asked prices on such day; (ii) if the JQHH Class
A Shares are not listed or admitted to trading on any securities exchange or the
NASDAQ-National Market System, the last reported sale price on such day or, if
no sale takes place on such day, the average of the closing bid and asked prices
on such day, as reported by a reliable quotation source designated by the
General Partner; or (iii) if the JQHH Class A Shares are not listed or admitted
to trading on any securities exchange or the NASDAQ-National Market System and
no such last reported sale price or closing bid and asked prices are available,
the average of the reported high bid and low asked prices on such day, as
reported by a reliable quotation source designated by the General Partner, or if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than ten
(10) days prior to the date in question) for which prices have been so reported;
provided that if there are no bid and asked prices reported during the ten (10)
days prior to the date in question, the Value of the JQHH Class A Shares shall
be determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate. In the event the JQHH Class A Shares Amount includes rights that a
holder of JQHH Class A Shares would be entitled to receive, and the General
Partner acting in good faith determines that the value of such rights is not
reflected in the Value of the JQHH Class A Shares determined as aforesaid, then
the Value of such rights shall be determined by the General Partner acting in
good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization
The Partnership is a limited partnership organized pursuant to
the provisions of the Act and upon the terms and conditions set forth herein.
Except as expressly provided herein to the contrary, the rights and obligations
of the Partners and the administration and termination of the Partnership shall
be governed by the Act. The Partnership Interest of each Partner shall be
personal property for all purposes.
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Section 2.2 Name
The name of the Partnership shall be ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels,
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 and absolute 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
the Limited Partners.
Section 2.3 Registered Office and Agent; Principal Office
The address of the registered office of the Partnership in the
State of Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office shall be The Corporation Service Company. The principal office
of the Partnership shall be The ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Building, 300 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the General Partner
may from time to time designate by notice to the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems advisable.
Section 2.4 Power of Attorney
A. Each Limited Partner and each Assignee who accepts Units
(or any rights, benefits or privileges associated therewith) is deemed to
irrevocably constitute and appoint the General Partner, any Liquidator, and
authorized officers and attorneys-in-fact of each, and each of those acting
singly, in each case 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:
(1) 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 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
or plans to 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 in accordance with its terms; (c) all
conveyances and other instruments or documents that
the General Partner 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 11, 12 or 13 hereof or the Capital
Contribution of any Partner; and (e) all
certificates, documents and other instruments
relating to the determination of the rights,
preferences and privileges of Partnership '
Interests; and
(2) execute, swear to, seal, acknowledge and file all
ballots, consents, approvals, waivers, certificates
and other instruments appropriate or necessary, in
the
10
sole and absolute discretion of the General Partner
or any 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 any Liquidator,
to effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Article 14
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, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
and any Liquidator to act as contemplated by this Agreement in any filing or
other action by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee and the
transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Units and shall extend to such Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or any Liquidator, acting in good faith pursuant to such power
of attorney, and each such 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 any Liquidator, taken in good faith under such power of
attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within fifteen (15) days after receipt of the
General Partner's or Liquidator's request therefor, such further designation,
powers of attorney and other instruments as the General Partner or the
Liquidator, as the case may be, deems necessary to effectuate this Agreement and
the purposes of the Partnership.
Section 2.5 Term
The term of the Partnership commenced on September 5, 1989,
the date the Certificate was filed in the office of the Secretary of State of
Delaware in accordance with the Act and shall continue until December 31, 2092,
unless, the Partnership is dissolved sooner pursuant to the provisions of
Article 13 or as otherwise provided by law.
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership, directly and indirectly through Subsidiaries (including, without
limitation, partnerships for which the Partnership is a general partner) is to
invest in, acquire, purchase, lease, own and operate hotels, motels and similar
properties and businesses, to engage in all phases of the hotel and motel
business, and to pursue such other purposes as may be incidental or related
thereto and all other activities which may be permitted by the Act.
Section 3.2 Powers
The Partnership is 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, including, without
limitation, full power and authority, directly or through its ownership interest
in
11
other entities, to enter into, perform and carry out contracts of any kind,
borrow money and issue evidences of indebtedness, whether or not secured by
mortgage, deed of trust, pledge or other lien, acquire and develop real
property, and lease, sell, transfer and dispose of real property, provided,
however, the Partnership shall not take, or shall refrain from taking, any
action which, in the judgment of the General Partner, in its sole and absolute
discretion could violate any law or regulation of any governmental body or
agency having jurisdiction over the General Partner or its securities, unless
such action (or inaction) shall have been specifically consented to by the
General Partner in writing.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1 In General
A. ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc. previously have made
Capital Contributions to the Partnership, as set forth in the books and records
of the Partnership. ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ interest in the Partnership received as
a result of such contributions has been transferred by ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to
The ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Revocable Trust. On the Effective Date, the General Partner
and ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall make the Capital Contributions described in the
sections captioned "The Contribution Transaction" and "Use of Proceeds" in the
final Prospectus of the General Partner in connection with its initial public
offering of JQHH Class A Shares. On the Effective Date, the Partnership is being
recapitalized so that each Partner shall own Partnership Units in the amounts
set forth for such Partner in Exhibit A and shall have a Percentage Interest in
the Partnership as set forth in Exhibit A, which Percentage Interest shall be
adjusted in Exhibit A from time to time by the General Partner to the extent
necessary to reflect accurately redemptions, additional Capital Contributions,
the issuance of additional Partnership Units (pursuant to any merger or
otherwise), or similar events having an effect on a Partner's Percentage
Interest. The Capital Accounts of the Partners and the Carrying Value of the
Partnership's Assets shall be restated effective as of the Effective Date
pursuant to Section ▇.▇ of Exhibit B hereof to reflect the Capital Contributions
to be made hereunder on the Effective Date, with each partner to have a Capital
Account Balance as of the Effective Date (after giving effect to all Capital
Contributions contemplated to be made on the Effective Date) equal to the
product of (i) the number of Partnership Units owned by such Partner multiplied
by (ii) [insert public offering price]. The number of Partnership Units held by
the General Partner from time to time shall be deemed to be the general partner
Partnership Units and shall be the General Partnership Interest. Except as
provided in this Section 4.1 and Sections 4.2 and 10.5, the Partners shall have
no obligation to make any additional Capital Contributions or loans to the
Partnership.
B. Notwithstanding any other provision of this Agreement, if
at any time and from time to time a "Deficiency" exists, ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
shall make an additional Capital Contribution to the Partnership in an amount
equal to ninety percent (90%) of such Deficiency and ▇▇▇▇▇▇▇, Inc. shall make an
additional Capital Contribution to the Partnership in an amount equal to ten
percent (10%) of such Deficiency; provided, however, that in no event shall the
aggregate of all amounts required to be contributed by ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇, Inc., pursuant to this Section 4.1.B exceed $150,000,000 less any
amounts previously contributed pursuant to this Section 4.1.B. A Deficiency
shall exist if, in connection with an Event of Default under the Indenture, the
proceeds from a sale or other disposition of the hotels owned by the Partnership
pursuant to the terms of the Indenture are insufficient to satisfy the amounts
due on the Notes. Any additional Capital Contributions made pursuant to this
Section 4.1.B shall be used to pay the Deficiency. In the event that a
Deficiency exists, the General Partner shall within ten days send a notice
("Notice") to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc., setting forth (i) the
amount of the Deficiency, (ii) the amount of additional Capital Contribution
required under this Section 4.1.B from each and (iii) the
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date on which payment of such Capital Contribution is due, which data shall be
no later than 30 days after the Notice is sent. If the General Partner does not
send the Notice within the prescribed period, the Trustee under the Indenture
shall be entitled to send the Notice. This Section 4.1.B is for the benefit of
the Noteholders and, in accordance with the Indenture, the Trustee shall have
the power to act on behalf of the Noteholders and to enforce the obligations of
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc., under this Section 4.1.B. The obligations
under this Section 4.1.B shall be personal to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇,
Inc., and shall not be affected by any transfer by them of all or any part of
the Partnership Interests, and ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc. shall have
(A) no right to the return from the Partnership of any Capital Contributions
made pursuant to this Section 4.1.B, (B) no right to indemnification from the
Partnership or any Partner with respect to any such Capital Contribution and (C)
no right of subrogation with respect to any such Capital Contribution. This
Section 4.1.B may not be amended without the express written approval of holders
of at least a majority in principal amount of the Notes then outstanding.
C. Notwithstanding any other provision of this Agreement, each
time a Scheduled Debt Deficiency (as hereinafter defined) exists, ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ shall be obligated to make a capital contribution to the Partnership
(the "Additional Capital Contribution") in an amount equal to one hundred
percent (l00%) of such Scheduled Debt Deficiency; provided, however, that in no
event shall the aggregate amount required to be contributed by ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ from time to time, pursuant to this Section 4.1.C exceed $50,000,000
less (i) the amounts previously contributed pursuant to this Section 4.1.C and
Section 4.1.B of the Agreement of Limited Partnership of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels
Two, L.P., and (ii) any amount paid by ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ with respect to a
Scheduled Debt default for which he has (a) no right to recover from the
Partnership, any Partner, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels Two, L.P. or any partner of
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels Two, L.P. or (b) no practical likelihood of recovery. A
Scheduled Debt Deficiency shall exist if a Scheduled Debt (as hereinafter
defined) goes into default and the proceeds from the remedy of foreclosure are
insufficient to retire the applicable Scheduled Debt in full, and the amount of
such Scheduled Debt Deficiency shall equal the amount of such Scheduled Debt
less the amount of such proceeds. Each Additional Capital Contribution made
pursuant to this Section 4.1.C shall be used to pay the Scheduled Debt
Deficiency to which it relates. In the event that a Scheduled Debt Deficiency
exists, the General Partner of the Partnership shall within ten days send a
notice ("Notice") to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ setting forth (i) the amount of the
Scheduled Debt Deficiency and (ii) the date on which payment of the Additional
Capital Contribution on account thereof is due, which date shall be no later
than 30 days after the Notice is sent. This Section 4.1.C is for the benefit of
the Scheduled Debt creditors and the Scheduled Debt creditors shall have the
power to enforce the obligations of ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ under this Section
4.1.C. The obligations under this Section 4.1.C shall be personal to ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and shall not be affected by any transfer by him of all or any part of
his partnership interests in the Partnership or any partnership interest ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ may have in ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels Two, L.P., and ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ shall have (A) no right to the return from the Partnership of any
Additional Capital Contribution made pursuant to this Section 4.1.C, (B) no
right to indemnification from the Partnership or any Partner with respect to any
such Additional Capital Contribution and (C) no right of subrogation with
respect to any such Additional Capital Contribution. This Section 4.1.C may not
be amended with respect to any Scheduled Debt without the express written
approval of the creditor with respect to such Scheduled Debt. A "Scheduled Debt"
is a debt set forth on Schedule 4.1.C hereto. In the event that ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ receives a Notice pursuant to this Section 4.1.C. after the property to
which the applicable Scheduled Debt relates has been transferred to ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ Hotels Two, L.P., then in such event, ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall comply
with Section 4.1.B of the Agreement of Limited Partnership of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Hotels Two, L.P.
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Section 4.2 Issuances of Additional Partnership Interests
A. The General Partner is hereby authorized to cause the
Partnership from time to time to issue to the Partners (including the General
Partner) or other persons (including, without limitation, in connection with the
contribution of property to the Partnership) additional Partnership Units or
other Partnership Interests 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 Limited Partnership Interests, all as shall
be determined by the General Partner in its sole and absolute 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 Interests; (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions; and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership; provided that no such additional Partnership
Units or other Partnership Interests shall be issued to the General Partner
unless either (a)(l) the additional Partnership Interests are issued in
connection with the grant, award, or issuance of shares of the General Partner,
which shares have designations, preferences and other rights (except for voting
rights) such that the economic interests attributable to such shares are
substantially similar to the designations, preferences and other rights of the
additional Partnership Interests issued to the General Partner in accordance
with this Section 4.2.A, and (2) the General Partner shall make a Capital
Contribution to the Partnership in an amount equal to the proceeds, if any,
raised in connection with the issuance of such shares of the General Partner, or
(b) the additional Partnership Interests are issued to all Partners in
proportion to their respective Percentage Interests.
B. After the Effective Date, the General Partner shall not
grant, award, or issue any additional JQHH Class A Shares (other than JQHH Class
A Shares issued pursuant to Section 8.6), or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase JQHH Class A Shares (collectively "New Securities"), other than to all
holders of JQHH Class A Shares unless (i) the General Partner shall cause the
Partnership to issue to the General Partner Partnership Interests or rights,
options, warrants or convertible or exchangeable securities of the Partnership
having designations, preferences and other rights, all such that the economic
interests are substantially the same as those of the New Securities, and (ii)
the General Partner contributes the net proceeds from the grant, award or
issuance of such New Securities and from the exercise of rights contained in
such New Securities to the Partnership. Without limiting the foregoing, the
General Partner is expressly authorized to issue New Securities for less than
fair market value, and to cause the Partnership to issue to the General Partner
corresponding Partnership Interests, so long as (x) the General Partner
concludes in good faith that such issuance is in the interests of the General
Partner and the Partnership (for example, and not by way of limitation, the
issuance of JQHH Class A Shares and corresponding Units pursuant to an employee
stock purchase plan providing for employee purchases of JQHH Class A Shares at a
discount from fair market value or employee stock options that have an exercise
price that is less than the fair market value of the JQHH Class A Shares, either
at the time of issuance or at the time of exercise), and (y) the General Partner
contributes all proceeds from such issuance and exercise to the Partnership.
Section 4.3 Contribution of Proceeds of Issuance of JQHH Class
A Shares
In connection with the initial public offering of JQHH Class A
Shares by the General Partner, and any other grant, award, or issuance of JQHH
Class A Shares or rights, options, warrants, or convertible or exchangeable
securities pursuant to Section 4.2, the General Partner shall make a Capital
Contribution to the Partnership of the proceeds raised in connection with such
grant, award, or issuance; provided that if the proceeds actually received by
the General Partner are
14
less than the gross proceeds of such grant, award, or issuance as a result of
any underwriter's discount, commission, or fee or other expenses paid or
incurred in connection with such grant, award, or issuance, then the General
Partner shall be deemed to have made a Capital Contribution to the Partnership
in the amount of the gross proceeds of such issuance and the Partnership shall
be deemed simultaneously to have reimbursed the General Partner pursuant to
Section 7.4.C for the amount of such underwriter's discount or other expenses.
Section 4.4 No Preemptive Rights
No Person shall have any preemptive, preferential or other
similar right with respect to (i) additional Capital Contributions or loans to
the Partnership; or (ii) issuance or sale of any Partnership Units or other
Partnership Interests.
Section 4.5 No Interest on Capital
No Partner shall be entitled to interest on its Capital
Contribution or its Capital Account.
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions
The General Partner shall make distributions to the Partners
when the General Partner so determines in its sole and absolute discretion, in
accordance with the Partners' respective Percentage Interests on such
Partnership Record Date; provided, however, that if there is a Distribution
Event, then the General Partner shall distribute (i) an amount equal to the
General Partner Distribution Amount to the General Partner and (ii) an amount
equal to the Limited Partner Distribution Amount to the Limited Partners in
accordance with the Limited Partners respective Percentage Interests on such
Partnership Record Date.
Section 5.2 Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of
any state or local tax law and Section 10.5 hereof with respect to any
allocation, payment or distribution to the General Partner, the Limited Partners
or Assignees shall be treated as amounts distributed to the General Partner,
Limited Partners, or Assignees pursuant to Section 5.1 for all purposes under
this Agreement.
Section 5.3 Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction and any other
cash received or reductions in reserves made after commencement of the
liquidation of the Partnership, shall be distributed to the Partners in
accordance with Section 13.2.
ARTICLE 6
ALLOCATIONS
Section 6.1 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
15
(computed in accordance with Exhibit 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 1 of Exhibit C, Net Income shall be allocated (i) first, to
the General Partner to the extent that Net Losses previously allocated to the
General Partner pursuant to the last sentence of Section 6.1.B exceed Net Income
previously allocated to the General Partner pursuant to this clause (i) of
Section 6.1.A, and (ii) thereafter, Net Income shall be allocated to the
Partners in accordance with their respective Percentage Interests.
B. Net Losses. After giving effect to the special allocations
set forth in Section 1 of Exhibit C, Net Losses shall be allocated to the
Partners in accordance with their respective Percentage Interests; provided that
Net Losses shall not be allocated to any Limited Partner pursuant to this
Section 6.1.B to the extent that such allocation would cause such Limited
Partner to have an Adjusted Capital Account Deficit at the end of such taxable
year (or increase any existing Adjusted Capital Account Deficit). All Net Losses
in excess of the limitations set forth in this Section 6.1.B shall be allocated
to the General Partner.
C. Allocation of Nonrecourse Debt. For purposes of Regulations
Section 1.75-3(a), the Partners agree that Nonrecourse Liabilities of the
Partnership in excess of the sum of (i) the amount of Partnership Minimum Gain
and (ii) the total amount of Nonrecourse Built-in Gain shall be allocated among
the Partners in accordance with their respective Percentage Interests.
D. Recapture Income. 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 Exhibit C, 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 (including deductions taken by any Partner with respect to
Contributed Property prior to the time such Property was contributed to the
Partnership).
E. Allocations to Reflect Issuance of Additional Partnership
Interests. In the event that the Partnership issues additional Partnership
Interests to the General Partner or any Additional Limited Partner under Section
4.2 hereof, the General Partner shall make such revisions to Sections 6.1.A and
B above as it determines are necessary to reflect the issuance of such
additional Partnership Interests.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management
A. Except as otherwise expressly provided in this Agreement,
all management powers over the business and affairs the Partnership are and
shall be exclusively vested in the General Partner, and no Limited Partner shall
have any right to participate in or exercise control or management power over
the business and affairs of the Partnership. The General Partner may not be
removed by the Limited Partners with or without cause. 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 7.3 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:
16
(1) the making of any expenditures, the lending or
borrowing of money (including, without limitation,
making prepayments on loans), the assumption or
guarantee of, or other contracting for, indebtedness
and other liabilities, the issuance of evidences of
indebtedness (including the securing of same by deed
to secure debt, mortgage, deed of trust or other lien
or encumbrance on the Partnership's assets) and the
incurring of any obligations it deems necessary for
the conduct of the activities of the Partnership;
(2) 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;
(3) the acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any assets
of the Partnership (including the exercise or grant
of any conversion, option, privilege, or subscription
right or other right available in connection with any
assets at any time held by 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 only to the extent required by
Section 7.3 hereof);
(4) 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
General Partner, the Partnership or any of the
Partnership's Subsidiaries, the lending of funds to
other Persons (including, without limitation, the
Partnership's Subsidiaries) and the repayment of
obligations of the Partnership and its Subsidiaries
and any other Person in which it has an equity
investment and the making of capital contributions to
its Subsidiaries;
(5) the management, operation, leasing, landscaping,
repair, alteration, demolition or improvement of any
real property or improvements owned by the
Partnership or any Subsidiary of the Partnership;
(6) the negotiation, execution, and performance of any
contracts, conveyances or other instruments that the
General Partner considers useful or necessary to the
conduct of the Partnership's operations or the
implementation of the General Partner's powers under
this Agreement, including contracting with
contractors, developers, consultants, accountants,
legal counsel, other professional advisors and other
agents and the payment of their expenses and
compensation out of the Partnership's assets;
(7) the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement;
(8) holding, managing, investing and reinvesting cash and
other assets of the Partnership;
(9) the collection and receipt of revenues and income of
the Partnership;
(10) the establishment of one or more divisions of the
Partnership, the selection and dismissal of employees
of the Partnership, any division of the Partnership,
or the General Partner (including, without
limitation, employees
17
having titles such as "president," "vice president,"
"secretary" and "treasurer" of the Partnership, any
division of the Partnership, or the General Partner),
and agents, outside attorneys, accountants,
consultants and contractors of the General Partner,
the Partnership or any division of the Partnership,
and the determination of their compensation and other
terms of employment or hiring;
(11) the maintenance of such insurance for the benefit of
the Partnership and the Partners as it deems
necessary or appropriate;
(12) 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,
its Subsidiaries and any other Person in which it has
an equity investment from time to time);
(13) the control of any matters affecting the rights and
obligations of the Partnership, including the
settlement, compromise, submission to arbitration or
any other form of dispute resolution, or abandonment
of any claim, cause of action, liability, debt or
damages due or owing to or from the Partnership, the
commencement or defense of suits, legal proceedings,
administrative proceedings, arbitrations or other
forms of dispute resolution, and the representation
of the Partnership in all suits or legal proceedings,
administrative proceedings, arbitrations or other
forms of dispute resolution, the incurring of legal
expense, and the indemnification of any Person
against liabilities and contingencies to the extent
permitted by law;
(14) the undertaking of any action in connection with the
Partnership's direct or indirect investment in its
Subsidiaries or any other Person (including, without
limitation, the contribution or loan of funds by the
Partnership to such Persons);
(15) the determination of the fair market value of any
Partnership property distributed in kind using such
reasonable method of valuation as it may adopt;
(16) the exercise, directly or indirectly through any
attorney-in-fact acting under a general or limited
power of attorney, of any right, including the right
to vote, appurtenant to any asset or investment held
by the Partnership;
(17) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of or
in connection with any Subsidiary of the Partnership
or any other Person in which the Partnership has a
direct or indirect interest, or jointly with any such
Subsidiary or other Person;
(18) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of any
Person in which the Partnership does not have an
interest pursuant to contractual or other
arrangements with such Person;
(19) the making, execution and delivery of any and all
deeds, leases, notes, deeds to secure debt,
mortgages, deeds of trust, security agreements,
conveyances, contracts, guarantees, warranties,
indemnities, waivers, releases or legal instruments
or agreements in writing necessary or appropriate in
the
18
judgment of the General Partner for the
accomplishment of any of the powers of the General
Partner enumerated in this Agreement; and
(20) the distribution of cash to acquire Partnership Units
held by a Limited Partner in connection with a
Limited Partner's exercise of its Redemption Right
under Section 8.6.
B. Each of the Limited Partners agrees that the General
Partner is authorized to execute, deliver and perform the above-mentioned
agreements and transactions on behalf of the Partnership without any further
act, approval or vote of the Partners, notwithstanding any other provision of
this Agreement (except as provided in Section 7.3), the Act or any applicable
law, rule or regulation, to the fullest extent permitted under the Act or other
applicable law. The execution, delivery or performance by the General Partner or
the Partnership of any agreement authorized or permitted under this Agreement
shall not 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.
C. At all times from and after the date hereof, the General
Partner at the expense of the Partnership, may or may not, cause the Partnership
to obtain and maintain (i) casualty, liability and other insurance on the
properties of the Partnership and (ii) liability insurance for the Indemnitees
hereunder.
D. At all times from and after the date hereof, the General
Partner may cause the Partnership to establish and maintain at any and all times
working capital accounts and other cash or similar balances in such amounts as
the General Partner, in its sole and absolute discretion, deems appropriate and
reasonable from time to time.
E. The General Partner shall have the full power and authority
in the name and on behalf of the Partnership in its capacity as the General
Partner, to take all such actions and to execute, deliver, and file all such
agreements, instruments, reports and documents as may be necessary or advisable
in connection with the formation of the General Partner, the issuance of Units
in connection with the proposed transaction or any other transactions described
in or contemplated by the General Partner's Registration Statement on Form S-l
as filed with the Securities and Exchange Commission on September 30, 1994 as
amended and supplemented through the date hereof.
Section 7.2 Certificate of Limited Partnership
The Partnership has previously filed the Certificate with the
Secretary of State of Delaware as required by the Act. The General Partner shall
use all reasonable efforts to cause to be filed such 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 and any other state, or the District of Columbia, 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 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 and each other state or the
District of Columbia, in which the Partnership may elect to do business or own
property. Subject to the terms of Section 8.5.A(4) hereof, the General Partner
shall, not be required, before or after filing, to deliver or mail a copy of the
Certificate or any amendment thereto to any Limited Partner.
19
Section 7.3 Restrictions on General Partner's Authority
The General Partner may not take any action in contravention
of an express prohibition or limitation of this Agreement without the written
Consent of all of the Limited Partners (including Limited Partnership Interests
held by the General Partner) (or such lower percentage of the Limited Partners
as may be specifically provided for under a provision of this Agreement or the
Act).
Section 7.4 Reimbursement of the General Partner
A. Except as provided in this Section 7.4 and elsewhere in
this Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments, and allocations to which it may be entitled), 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 and
absolute discretion, for all expenses it incurs relating to the ownership and
operation of, or for the benefit of, the Partnership; provided that the amount
of any such reimbursement shall be reduced by any interest earned by the General
Partner with respect to bank accounts or other instruments or accounts held by
it on behalf of the Partnership as permitted in Section 7.5A. The Limited
Partners acknowledge that, for purposes of this Section 7.4.B, all of the
General Partner's expenses (including without limitation, costs and expenses
associated with compliance with the periodic reporting requirements and all
other rules and regulations of the Securities and Exchange Commission or any
other federal, state or local regulatory body, salaries payable to officers and
employees of the General Partner, fees and expenses payable to directors of the
General Partner, and all other operating of administrative costs of the General
Partner) are deemed incurred for the benefit of the Partnership and shall be
paid by or reimbursed by the Partnership as provided in this Section 7.4.B. Such
reimbursements shall be in addition to any reimbursement to the General Partner
as a result of indemnification pursuant to Section 7.7 hereof. All payments and
reimbursements hereunder will be characterized for federal income tax purposes
as expenses of the Partnership incurred on its behalf, and not expenses of the
General Partner.
C. The General Partner shall also be reimbursed for all
expenses it incurs relating to the organization and/or reorganization of the
Partnership and the General Partner, the initial public offering of JQHH Class A
Shares by the General Partner, and any other issuance of additional Partnership
Interests, JQHH Class A Shares or rights, options, warrants, or convertible or
exchangeable securities pursuant to Section 4.2 hereof (including, without
limitation, ail costs, expenses, damages, and other payments resulting from or
arising in connection with litigation related to any of the foregoing).
D. In the event that the General Partner shall elect to
purchase from its shareholders JQHH Class A Shares for the purpose of delivering
such Shares to satisfy an obligation under any dividend reinvestment program
adopted by the General Partner, any employee stock purchase plan adopted by the
General Partner, or any similar obligation or arrangement undertaken by the
General Partner in the future, the purchase price paid by the General Partner
for such JQHH Class A Shares and any other expenses incurred by the General
Partner in connection with such purchase shall be considered expenses of the
Partnership and shall be reimbursed to the General Partner, subject to the
condition that: (i) if such JQHH Class A Shares subsequently are to be sold by
the General Partner, the General Partner shall pay to the Partnership any
proceeds received by the General Partner for such JQHH Class A Shares (provided
that a transfer of JQHH Class A Shares for Units pursuant to Section 8.6 would
not be considered a sale for such purposes); and (ii) if such JQHH Class A
Shares are not retransferred by the General Partner within 30 days after the.
purchase thereof, the General Partner shall cause the Partnership to cancel a
number of Partnership
20
Units (rounded to the nearest whole Unit) held by the General Partner equal to
the product obtained by multiplying the number of such JQHH Class A Shares by a
fraction, the numerator of which is one and the denominator of which is the
Conversion Factor.
Section 7.5 Outside Activities of the General Partner
A. The General Partner shall not directly or indirectly enter
into or conduct any business, other than in connection with the ownership,
acquisition and disposition of Partnership Interests as a General Partner and
the management of the business of the Partnership, and such activities as are
incidental thereto. The General Partner shall not incur any debts other than (i)
debt of the Partnership for which it may be liable in its capacity as General
Partner of the Partnership, and (ii) indebtedness for borrowed money the
proceeds from which borrowing are loaned to the Partnership on the same terms
and conditions as the borrowing by the General Partner. The General Partner
shall not hold any assets other than Partnership Interests as a General Partner,
other than such bank accounts or similar instruments or accounts as it deems
necessary to carry out its responsibilities contemplated under this Agreement
and the Articles of Incorporation. The General Partner and any Affiliates of the
General Partner may acquire Limited Partner Interests and shall be entitled to
exercise all rights of a Limited Partner relating to such Limited Partner
Interests.
B. Subject to the next sentence, the General Partner may, from
time to time, purchase and/or redeem JQHH Class A Shares (including, without
limitation, in connection with a stock repurchase or similar program), if the
General Partner determines that it is in the interest of the Partnership for the
General Partner to purchase and/or redeem JQHH Class A Shares. In the event that
the General Partner purchases and/or redeems JQHH Class A Shares, then the
General Partner shall cause the Partnership to purchase from the General
Partner, concurrently with the JQHH Class A Share purchase, a number of
Partnership Units as determined based on the application of the Conversion
Factor for the same consideration (including any fees, commissions, and expenses
payable by the General Partner in connection therewith) and on the same terms as
the General Partner purchases such JQHH Class A Shares.
Section 7.6 Contracts with Affiliates
A. The Partnership may lend or contribute funds or other
assets to its Subsidiaries or other Persons in which it has an equity
investment, and such Persons may borrow funds from the Partnership, on terms and
conditions established in the sole and absolute discretion of the General
Partner. The foregoing authority shall not create any right or benefit in favor
of any Subsidiary or any other Person.
B. Except as provided in Section 7.5.A, the Partnership may
transfer assets to joint ventures, other partnerships, corporations or other
business entities in which it is or thereby becomes a participant upon such
terms and subject to such conditions consistent with this Agreement and
applicable law as the General Partner, in its sole and absolute discretion,
believes are advisable.
C. Except as expressly permitted by this Agreement, 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 determined by the General
Partner in good faith to be fair and reasonable and no less favorable to the
Partnership than would be obtained from an unaffiliated third party.
D. The General Partner, in its sole and absolute discretion
and without the approval of the Limited Partners, may propose and adopt on
behalf of the Partnership employee benefit plans, stock option plans, and
similar plans funded by the Partnership for the benefit of
21
employees of the General Partner, the Partnership, Subsidiaries of the
Partnership or any Affiliate of any of them in respect of services performed,
directly or indirectly, for the benefit of the Partnership, the General Partner,
or any of the Partnership's Subsidiaries.
E. The General Partner is expressly authorized to enter into,
in the name and on behalf of the Partnership, a right of first opportunity
arrangement and other conflict avoidance agreements with various Affiliates of
the Partnership and the General Partner, on such terms as the General Partner,
in its sole and absolute discretion, believes are advisable.
Section 7.7 Indemnification
A. The Partnership shall indemnify each Indemnitee from and
against any and all losses, claims, damages, liabilities, joint or several,
expenses (including, without limitation, attorneys fees and other 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, that relate to the operations of the
Partnership as set forth in this Agreement in which such Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is
established that: (i) the act or omission of the Indemnitee was material to the
matter giving rise to the proceeding and either was committed in bad faith or
was the result of active and deliberate dishonesty; (ii) the Indemnitee actually
received an improper personal benefit in money, property or services; or (iii)
in the case of any criminal proceeding, the Indemnitee had reasonable cause to
believe that the act or omission was unlawful. Without limitation, the foregoing
indemnity shall extend to any liability of any Indemnitee, pursuant to a loan
guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary
of the Partnership (including, without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject
to), and the General Partner is hereby authorized and empowered, on behalf of
the Partnership, to enter into one or more indemnity agreements consistent with
the provisions of this Section 7.7 in favor of any Indemnitee having or
potentially having liability for any such indebtedness. The termination of any
proceeding by judgment, order or settlement does not create a presumption that
the Indemnitee did not meet the requisite standard of conduct set fourth in this
Section 7.7.A. The termination of any proceeding by conviction of an Indemnitee
or upon a plea of nolo contendere or its equivalent by an Indemnitee, or an
entry of an order of probation against an Indemnitee prior to judgment, creates
a rebuttable presumption that such Indemnitee acted in a manner contrary to that
specified in this Section 7.7.A with respect to the subject matter of such
proceeding. Any indemnification pursuant to this Section 7.7 shall be made only
out of the assets of the Partnership, and neither the General Partner nor any
Limited Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.
B. Reasonable expenses incurred by an Indemnitee who is a
party to a proceeding may be paid or reimbursed by the Partnership in advance of
the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 7.7.A has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
C. The indemnification provided by this Section 7.7 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to 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 unless otherwise provided in a written
agreement pursuant to which such Indemnitee is indemnified.
22
D. The Partnership may, but shall not be obligated to,
purchase and maintain insurance, on behalf of the Indemnitees and such other
Persons as the General Partner shall determine, against any liability that may
be asserted against or expenses 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 7.7, 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 7.7; and actions taken or
omitted by the Indemnitee 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 not opposed to the best interests of the Partnership.
F. In no event may an Indemnitee subject any of the 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 7.7 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 7.7 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. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 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, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
I. Nothing in this Section 7.7 provides or shall be
interpreted to provide ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇, Inc. with any right to be
reimbursed or indemnifed for the amount of additional capital contributions, if
any, required to be made by ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇, Inc. pursuant to
Sections 4.1.B or 4.1.C.
Section 7.8 Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership, any Partners or any Assignees for losses sustained or liabilities
incurred as a result of errors in judgment or of any act or omission if the
General Partner acted in good faith.
B. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership and the General Partner's
shareholders collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners or Assignees) in deciding
whether to cause the Partnership to take (or decline to take) any actions, and
that the General Partner shall not be liable to the Partnership or to any
Partner for monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted in good faith.
23
C. Subject to its obligations and duties as General Partner
set forth in Section 7.1.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. 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.
D. Any amendment, modification or repeal of this Section 7.8
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's liability to the Partnership and
the Limited Partners under this Section 7.8 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.
Section 7.9 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 in good faith 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, architects,
engineers, environmental consultants and other consultants and advisers selected
by it, and any act taken or omitted to be taken in reliance upon the opinion 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.
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.
Section 7.10 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.
Section 7.11 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, without consent or approval of
any other Partner or Person, to encumber, sell or otherwise
24
use in any manner any and all assets of the Partnership and to enter into any
contracts on behalf of the Partnership, and take any and all actions on behalf
of the Partnership and such Person shall be entitled to deal with the General
Partner as if the General Partner 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 (i) at the time of the execution and delivery of such certificate, document
or instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership and (iii)
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 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability
The Limited Partners shall have no liability under this
Agreement except as expressly provided in this Agreement, including Section 10.5
hereof, or under the Act.
Section 8.2 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, the Partnership or any of their
Affiliates, in their capacity as such) shall take part in the operation,
management or control (within the meaning of the 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, the
Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners
Subject to Section 7.5 hereof, and subject to any agreements
entered into pursuant to Section 7.6.E hereof and any other agreements entered
into by a Limited Partner or its Affiliates with the Partnership or a
Subsidiary, any Limited Partner and any officer, director, employee, agent,
trustee, Affiliate or shareholder of 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
that are in direct competition with the Partnership or that are enhanced by the
activities of 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. None of the Limited Partners nor any other Person
shall have any rights by virtue of this Agreement or the Partnership
relationship established hereby in any business ventures of any other Person
(other than the General Partner to the extent expressly provided herein) and
such Person shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures to the Partnership, any Limited Partner
or any such other Person, even if such opportunity is of a character
25
which, if presented to the Partnership, any Limited Partner or such other
Person, could be taken by such Person.
Section 8.4 Return of Capital
Except pursuant to the right of redemption set forth in
Section 8.6, no Limited Partner shall be entitled to the withdrawal or return of
its Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein.
Nothing in this Section 8.4 shall be interpreted as limiting the Partnership's
right to redeem all or a portion of the Partnership Units held by a Limited
Partner, with the consent of such Limited Partner, on such terms and for such
consideration as determined by the General Partner to be in the interests of the
Partnership. Except to the extent provided by Exhibit C hereof or as permitted
by Section 4.2 (relating to preferred interests issued subsequent to the date
hereof), or 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.
Section 8.5 Rights of Limited Partners Relating to the
Partnership
A. In addition to other rights provided by this Agreement or
by the Act, and except as limited by Section 8.5.C 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 written demand with a
statement of the purpose of such demand and at such Limited Partner's own
expense (including such copying and administrative charges as the General
Partner may establish from time to time):
(1) to obtain a copy of the most recent annual and
quarterly reports filed with the Securities and
Exchange Commission by the General Partner pursuant
to the Securities Exchange Act of 1934;
(2) to obtain a copy of the Partnership's federal, state
and local income tax returns for each Partnership
Year;
(3) to obtain a current list of the name and last known
business, residence or mailing address of each
Partner;
(4) to obtain a copy of this Agreement and the
Certificate and all amendments thereto, together with
executed copies of all powers of attorney pursuant to
which this Agreement, the Certificate and all
amendments thereto have been executed; and
(5) to obtain true and full information regarding the
amount of cash and a description and statement of any
other property or services contributed by each
Partner and which each Partner has agreed to
contribute in the future, and the date on which each
became a Partner.
B. The Partnership shall notify each Limited Partner, upon
request, of the then current Conversion Factor and any change therein.
C. Notwithstanding any other provision of this Section 8.5,
the General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) 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
26
could damage the Partnership or its business or (ii) the Partnership is
required by law or by agreements with an unaffiliated third party to keep
confidential.
Section 8.6 Redemption Right
A. Subject to Section 8.6.B, on or after the date one (1)
year after the closing of the initial public offering of JQHH Class A Shares by
the General Partner, each Limited Partner, other than the General Partner, shall
have the right (the "Redemption Right") to require the Partnership to redeem on
a Specified Redemption Date all or a portion of the Partnership Units held by
such Limited Partner at a redemption price equal to and in the form of the Cash
Amount to be paid by the Partnership. The Redemption Right shall be exercised
pursuant to a Notice of Redemption delivered to the Partnership (with a copy to
the General Partner) by the Limited Partner who is exercising the redemption
right (the "Redeeming Partner"). A Limited Partner may not exercise the
Redemption Right for less than one thousand (1,000) Partnership Units or, if
such Limited Partner holds less than one thousand (1,000) Partnership Units, all
of the Partnership Units held by such Partner. Neither the Redeeming Partner nor
any Assignee of any Limited Partner shall have any right with respect to any
Partnership Units so redeemed to receive any distributions paid after the
Specified Redemption Date. The Assignee of any Limited Partner may exercise the
rights of such Limited Partner pursuant to this Section 8.6, and such Limited
Partner shall be deemed to have assigned such rights to such Assignee and shall
be bound by the exercise of such rights by such Limited Partner's Assignee. In
connection with any exercise of such rights by such Assignee on behalf of such
Limited Partner, the Cash Amount shall be paid by the Partnership directly to
such Assignee and not to such Limited Partner. Neither the Redeeming Partner nor
any Assignee of any Limited Partner shall have any right, with respect to any
Partnership Units so redeemed, to receive any distributions paid after the
Specified Redemption Date.
B. Notwithstanding the provisions of Section 8.6.A, in the
event a Limited Partner elects to exercise the Redemption Right, the General
Partner may, in its sole and absolute discretion, elect to assume directly and
satisfy a Redemption Right by paying to the Redeeming Partner either the Cash
Amount or the JQHH Class A Shares Amount, as elected by the General Partner (in
its sole and absolute discretion) on the Specified Redemption Date, whereupon
the General Partner shall acquire the Partnership Units offered for redemption
by the Redeeming Partner and shall be treated for all purposes of this Agreement
as the owner of such Partnership Units. Unless the General Partner (in its sole
and absolute discretion) shall exercise its right to assume directly and satisfy
the Redemption Right, the General Partner itself shall have no obligation to the
Redeeming Partner or to the Partnership with respect to the Redeeming Partner's
exercise of the Redemption Right. In the event the General Partner shall
exercise its right to satisfy the Redemption Right in the manner described in
the first sentence of this Section 8.6.B, the Partnership shall have no
obligation to pay any amount to the Redeeming Partner with respect to such
Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming
Partner, the Partnership, and the General Partner shall treat the transaction
between the General Partner and the Redeeming Partner for federal income tax
purposes as a sale of the Redeeming Partner's Partnership Units to the General
Partner. Each Redeeming Partner agrees to execute such documents as the General
Partner may reasonably require in connection with the issuance of JQHH Class A
Shares upon exercise of the Redemption Right. If the Redemption Right is
satisfied by the delivery of JQHH Class A Shares, the Redeeming Partner shall
be deemed to become a holder of JQHH Class A Shares as of the close of
business in Specified Redemption Date.
C. Each Redeeming Partner agrees to execute such documents as
the General Partner may reasonably require in connection with the issuance of
JQHH Class A Shares upon exercise of the Redemption Right. The Redeeming Partner
shall be deemed to become a holder of JQHH Class A Shares as of the close of
business on the Specified Redemption Date.
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D. Each Limited Partner covenants and agrees with the General
Partner that all Partnership Units delivered for redemption shall be delivered
to the Partnership or the General Partner, as the case may be, free and clear of
all liens and, notwithstanding anything herein contained to the contrary,
neither the General Partner nor the Partnership shall be under any obligation to
acquire Partnership Units which are or may be subject to any liens. Each Limited
Partner further agrees that, in the event any state or local property transfer
tax is payable as a result of the transfer of its Partnership Units to the
Partnership or the General Partner, such Limited Partner shall assume and pay
such transfer tax.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The General Partner shall keep or cause to be kept at the
principal office of the Partnership those records and documents required to be
maintained by the Act and other books and records deemed by the General Partner
to be appropriate 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 9.3 hereof. Any records maintained by or on behalf of the Partnership
in the regular course of its business may be kept on, or be in the form of,
punch cards, magnetic tape, photographs, micro graphics 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 and tax reporting purposes,
on an accrual basis in accordance with generally accepted accounting principles,
or other such basis as the General Partner determines to be necessary or
appropriate.
Section 9.2 Fiscal Year
The fiscal year of the Partnership shall end on the Friday
nearest December 31.
Section 9.3 Reports
A. As soon as practicable, but in no event later than one
hundred five (105) days after the close of each Partnership Year, the General
Partner shall cause to be mailed to each Limited Partner as of the close of the
Partnership Year, an annual report containing financial statements of the
Partnership, or of the General Partner if such statements are prepared solely on
a consolidated basis with the General Partner, for such Partnership Year,
presented in accordance with generally accepted accounting principles, such
statements to be audited by a nationally recognized firm of independent public
accountants selected by the General Partner.
B. As soon as practicable, but in no event later than one
hundred five (105) 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 Limited Partner as of the last day of the calendar quarter, a
report containing unaudited financial statements of the Partnership, or of the
General Partner, if such statements are prepared solely on a consolidated basis
with the General Partner, and such other information as may be required by
applicable law or regulation, or as the General Partner determines to be
appropriate.
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ARTICLE l0
TAX MATTERS
Section 10.1 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 ninety (90)
days of the close of each taxable year, the tax information reasonably required
by Limited Partners for federal and state income tax reporting purposes.
Section 10.2 Tax Elections
Except as otherwise provided herein, the General Partner
shall, in its sole and absolute 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 effective for the first calendar year
following the Effective Date. 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
and absolute discretion that such revocation is in the best interests of the
Partners.
Section 10.3 Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of
the Partnership for federal income tax purposes. Pursuant to Section 6230(e) of
the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address, taxpayer identification
number, and profit interest of each of the Limited Partners and the Assignees;
provided, however, that such information is provided to the Partnership by the
Limited Partners and the Assignees.
B. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with respect to
any administrative or judicial proceedings for the
adjustment of Partnership items required to be taken into
account by a Partner for income tax purposes (such
administrative proceedings being referred to as a "tax
audit" and such judicial proceedings being referred to as
"judicial review"), and in the settlement agreement the
tax matters partner may expressly state that such
agreement shall bind all Partners, except that such
settlement agreement shall not bind any Partner (i) who
(within the time prescribed pursuant to the Code and
Regulations) files a statement with the IRS providing
that the tax matters partner shall not have the authority
to enter into a settlement agreement on behalf of such
Partner or (ii) who is a "notice partner" (as defined in
Section 6231 (a)(8) of the Code) or a member of a "notice
group" (as defined in Section 6223(b)(2) of the Code);
(2) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required
to be taken into account by a Partner for tax purposes (a
"final adjustment") is mailed to the tax matters partner,
to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with
the Tax Court or the filing of a complaint for refund
with the United States Claims Court or the District Court
of the United
29
States for the district in which the Partnership's
principal place of business is located;
(3) to intervene in any action brought by any other Partner
for judicial review of a final adjustment;
(4) to file a request for an administrative adjustment with
the IRS and, if any part of such request is not allowed
by the IRS, to file an appropriate pleading (petition or
complaint) for judicial review with respect to such
request;
(5) to enter into an agreement with the IRS to extend the
period for assessing any tax which is attributable to any
item required to be taken account by a Partner for tax
purposes, or an item affected by such item; and
(6) to take any other action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial
review proceeding to the extent permitted by applicable
law or regulations.
The taking of any action and the incurring of any expense by
the tax matters partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole and absolute discretion of the
tax matters partner and the provisions relating to indemnification of the
General Partner set forth in Section 7.7 of this Agreement shall be fully
applicable to the tax matters partner in its capacity as such.
C. The tax matters partner shall receive no compensation for
its services. All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne by the Partnership. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting or legal firm
to assist the tax matters partner in discharging its duties hereunder, so long
as the compensation paid by the Partnership for such services is reasonable.
Section 10.4 Organizational Expenses
The Partnership shall elect to deduct expenses, if any,
incurred by it in organizing the Partnership ratably over a sixty (60) month
period as provided in Section 709 of the Code.
Section 10.5 Withholding
Each Limited Partner hereby authorizes the Partnership to
withhold from or pay on behalf of or with respect to such Limited Partner any
amount of federal, state, local, or foreign taxes that the General Partner
determines that the Partnership is required to withhold or pay with respect to
any amount distributable or allocable to such Limited Partner pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the
Code. Any amount paid on behalf of or with respect to a Limited Partner shall
constitute a loan by the Partnership to such Limited Partner, which loan shall
be repaid by such Limited Partner within fifteen (15) days after notice from the
General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would otherwise be made to the
Limited Partner or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of the
Partnership which would, but for such payment, be distributed to the Limited
Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii)
shall be treated as having been distributed to such Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the Partnership
a security interest in such Limited Partner's Partnership Interest to secure
such Limited Partner's obligation to pay to the Partnership any amounts
required to be paid pursuant to this
30
Section 10.5. In the event that a Limited Partner fails to pay any amounts owed
to the Partnership pursuant to this Section 10.5 when due, the General Partner
may, in its sole and absolute discretion, elect to make the payment to the
Partnership on behalf of such defaulting Limited Partner, and in such event
shall be deemed to have loaned such amount to such defaulting Limited Partner
and shall succeed to all rights and remedies of the Partnership as against such
defaulting Limited Partner. Without limitation, in such event the General
Partner shall have the right to receive distributions that would otherwise be
distributable to such defaulting Limited Partner until such time as such loan,
together with all interest thereon, has been paid in full, and any such
distributions so received by the General Partner shall be treated as having
been distributed to the defaulting Limited Partner and immediately paid by the
defaulting Limited Partner to the General Partner in repayment of such loan.
Any amounts payable by a Limited Partner hereunder shall bear interest at the
lesser of (A) the base rate on corporate loans at large United States money
center commercial banks, as published from time to time in the Wall Street
Journal, plus four (4) percentage points, or (B) the maximum lawful rate of
interest on such obligation, such interest to accrue from the date such amount
is due (i.e., fifteen (15) days after demand) until such amount is paid in full.
Each Limited Partner shall take such actions as the Partnership or the General
Partner shall request in order to perfect or enforce the security interest
created hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. The term "transfer," when used in this Article 11 with
respect to a Partnership Interest or Partnership Unit, shall be deemed to refer
to a transaction by which the General Partner purports to assign all or any part
of its General Partner Interest to another Person or by which a Limited Partner
purports to assign all or any part of its Limited Partner Interest to another
Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
The term "transfer" when used in this Article 11 does not include any
redemption of Partnership Units by a Limited Partner or acquisition of
Partnership Units from a Limited Partner by the General Partner pursuant to
Section 8.6.
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 11. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void.
Section 11.2 Transfer of General Partner's Partnership
Interest
A. The General Partner may not transfer any of its General
Partner Interest or Limited Partner Interests or withdraw as General Partner
except in connection with a transaction described in Section 11.2.B or 11.2.C.
B. Except as otherwise provided in Section 11.2.C, the
General Partner shall not engage in any merger, consolidation or other
combination with or into another Person or sale of all or substantially all of
its assets, or any reclassification, or recapitalization or change of
outstanding JQHH Class A Shares (other than a change in par value, or from par
value to no par value, or as a result of a subdivision or combination as
described in the definition of "Conversion Factor") ("Transaction"), unless the
Transaction also includes a merger of the Partnership or sale of substantially
all of the assets of the Partnership which has been approved by the requisite
Consent of the Partners pursuant to Section 7.3 and as a result of which all
Limited Partners will receive for each Partnership Unit an amount of cash,
securities, or other property equal to the product of the Conversion Factor
and the greatest amount of cash, securities or other property paid to a holder
of
31
one JQHH Class A Share in consideration of one JQHH Class A Share at any time
during the period from and after the date on which the Transaction is
consummated.
C. Notwithstanding Section 11.2.B, the General Partner may
merge with another entity if immediately after such merger substantially all of
the assets of the surviving entity, other than Partnership Units held by the
General Partner (whether such Partnership Units constitute the General
Partnership Interest or a Limited Partnership Interest), are contributed to the
Partnership as a Capital Contribution in exchange for Partnership Units with a
fair market value, as reasonably determined by the General Partner, equal to
the 704(c) Value of the assets so contributed.
Section 11.3 Limited Partners' Rights to Transfer
A. Subject to the provisions of Section ll.3.F, no Limited
Partner shall have the right to transfer all or any portion of his Partnership
Interest, or any of such Limited Partner's rights as a Limited Partner, without
the prior written consent of the General Partner, which consent may be given or
withheld by the General Partner in its sole and absolute discretion. Any
purported transfer of a Partnership Interest by a Limited Partner in violation
of this Section 11.3.A shall be void ab initio and shall not be given effect for
any purpose by the Partnership.
B. If a Limited Partner is subject to Incapacity, the
executor, administrator, trustee, committee, guardian, conservator or receiver
of such Limited Partner's estate shall have all the rights of a Limited
Partner, but not more rights than those enjoyed by other Limited Partners, for
the purpose of settling or managing the estate and such power as the
Incapacitated Limited Partner possessed to transfer all or any part of his or
its interest in the Partnership. The Incapacity of a Limited Partner, in and of
itself, shall not dissolve or terminate the Partnership.
C. The General Partner may prohibit any transfer by a Limited
Partner of his Partnership Units otherwise permitted under Section 11.3.F if,
in the opinion of legal counsel to the Partnership, such transfer would require
filing of a registration statement under the Securities Act of 1933 or would
otherwise violate any federal, state or foreign securities laws or regulations
applicable to the Partnership or the Partnership Unit.
D. No transfer by a Limited Partner of his Partnership Units
may be made to any Person if (i) in the opinion of legal counsel for the
Partnership, it would result in the Partnership being treated as an association
taxable as a corporation for federal income tax purposes, or would result in a
termination of the Partnership for federal income tax purposes or (ii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning
of Section 7704 of the Code.
E. No transfer of any Partnership Units may be made to a
lender to the Partnership or any Person who is related (within the meaning of
Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose
loan constitutes a Nonrecourse Liability, without the consent of the General
Partner, in its sole and absolute discretion, provided that as a condition to
such consent the lender will be required to enter into an arrangement with the
Partnership and the General Partner to exchange or redeem for the JQHH Class A
Shares Amount any Partnership Units in which a security interest is held
simultaneously with the time at which such lender would be deemed to be a
partner in the Partnership for purposes of allocating liabilities to such
lender under Section 752 of the Code.
F. Notwithstanding the provisions of Section 11.3.A (but
subject to the provisions of Sections 11.3.C, 11.3.D, and 11.3.E), ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ may transfer at any time, with or without the consent of the General
Partner, all or a portion of his Partnership Units to The ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Revocable Trust.
32
Section 11.4 Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a
transferee as a Limited Partner in his place. The General Partner shall,
however, have the right to consent to the admission of a transferee of the
interest of a Limited Partner pursuant to this Section 11.4 as a Substituted
Limited Partner, which consent may be given or withheld by the General Partner
in its sole and absolute discretion. The General Partner's failure or refusal
to permit a transferee of any such interests to become a Substituted Limited
Partner shall not give rise to any cause of action against the Partnership or
any Partner.
B. A transferee who has been admitted as a Substituted
Limited Partner in accordance with this Article 11 shall have all the rights and
powers and be subject to all the restrictions and liabilities of a Limited
Partner under this Agreement. The admission of any transferee as a Substituted
Limited Partner shall be subject to the transferee executing and delivering to
the Partnership an acceptance of all of the terms and conditions of this
Agreement (including without limitation, the provisions of Section 2.4 and such
other documents or instruments as may be required to effect the admission).
C. Upon the admission of a Substituted Limited Partner, the
General Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units, and Percentage Interest of such Substituted Limited Partner
and to eliminate or adjust, if necessary, the name, address and interest of the
predecessor of such Substituted Limited Partner.
Section 11.5 Assignees
If the General Partner, in its sole and absolute discretion,
does not consent to the admission of any permitted transferee under Section 11.3
as a Substituted Limited Partner, as described in Section 11.4, such transferee
shall be considered an Assignee for purposes of this Agreement. An Assignee
shall be deemed to have had assigned to it, and shall be entitled to receive
distributions from the Partnership and the share of Net Income, Net Losses,
Recapture Income, and any other items of gain, loss, deduction and credit of the
Partnership attributable to the Partnership Units assigned to such transferee,
but shall not be deemed to be a holder of Partnership Units for any other
purpose under this Agreement, and shall not be entitled to vote such Partnership
Units in any matter presented to the Limited Partners for a vote (such
Partnership Units being deemed to have been voted on such matter in the same
proportion as all other Partnership Units held by Limited Partners are voted).
In the event any such transferee desires to make a further assignment of any
such Partnership Units, such transferee shall be subject to all the provisions
of this Article 11 to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of Partnership Units.
Section 11.6 General Provisions
A. No Limited Partner may withdraw from the Partnership other
than as a result of a permitted transfer of all of such Limited Partner's
Partnership Units in accordance with this Article 11 or pursuant to redemption
of all of its Partnership Units under Section 8.6.
B. Any Limited Partner who shall transfer all of his
Partnership Units in a transfer permitted pursuant to this Article 11 shall
cease to be a Limited Partner upon the admission of all Assignees of such
Partnership Units as Substitute Limited Partners. Similarly, any Limited Partner
who shall transfer all of his Partnership Units pursuant to a redemption of all
of his Partnership Units under Section 8.6 shall cease to be a Limited Partner.
C. Transfers pursuant to this Article 11 may only be made on
the first day of a fiscal quarter of the Partnership, unless the General
Partner otherwise agrees.
33
D. If any Partnership Interest is transferred or assigned in
compliance with the provisions of this Article 11 or redeemed or transferred
pursuant to Section 8.6, on any day other than the first day of a Partnership
Year, then Net Income, Net Losses, each item thereof and all other items
attributable to such interest for such Partnership Year shall be divided and
allocated between the transferor Partner and the transferee Partner by taking
into account their varying interests during the fiscal year in accordance with
Section 706(d) of the Code, using the interim closing of the books method
(unless the General Partner, in its sole and absolute discretion, elects to
adopt a daily, weekly or monthly proration method, in which event Net Income,
Net Losses and each item thereof for such Partnership Year shall be prorated
based upon the applicable period selected by the General Partner). Solely for
purposes of making such allocations, each of such items for the calendar month
in which the transfer or assignment occurs shall be allocated to the transferee
Partner, and none of such items for the calendar month in which a redemption
occurs shall be allocated to the Redeeming Partner. All distributions of the
Partner Distribution Amount attributable to such Partnership Unit with respect
to which the Partnership Record Date is before the date of such transfer,
assignment or redemption shall be made to the transferor Partner or the
Redeeming Partner, as the case may be, and, in the case of a transfer or
assignment other than a redemption, all distributions of the Partner
Distribution Amount thereafter attributable to such Partnership Unit shall be
made to the transferee Partner.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner
A successor to all of the General Partner 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
upon such transfer. Any such transferee 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. In the
case of such admission on any day other than the first day of a Partnership
Year, all items attributable to the General Partner Interest for such
Partnership Year shall be allocated between the transferring General Partner
and such successor as provided in Section 11.6.D. hereof.
Section 12.2 Admission of Additional Limited Partners
A. A Person who makes a Capital Contribution to the
Partnership in accordance with this Agreement or who exercises an option to
receive Partnership Units 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 2.4 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
12.2, 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 and absolute 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.
34
C. If any Additional Limited Partner is admitted to the
Partnership on any day other than the first day of a Partnership Year, then Net
Income, Net Losses, each item thereof and all other items allocable among
Partners and Assignees for such Partnership Year shall be allocated among such
Additional Limited Partner and all other Partners and Assignees by taking into
account their varying interests during the Partnership Year in accordance with
Section 706(d) of the Code, using the interim closing of the books method.
Solely for purposes of making such allocations, each of such items for the
calendar month in which an admission of any Additional Limited Partner occurs
shall be allocated among all the Partners and Assignees including such
Additional Limited Partner. All distributions of the Partner Distribution
Amount with respect to which the Partnership Record Date is before the date of
such admission shall be made solely to Partners and Assignees other than the
Additional Limited Partner, and all distributions of the Partner Distribution
Amount thereafter shall be made to all the Partners and Assignees including
such Additional Limited Partner.
Section 12.3 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 Act to
amend the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution
Except as set forth in this Article 13, no Partner shall have
the right to dissolve the Partnership. 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 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 the first to occur of
any of the following ("Liquidating Events"):
A. the expiration of its term as provided in Section 2.5
hereof;
B. (i) a final and non-appealable judgment is entered by a
court of competent 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, unless prior to the entry of such order or judgment all of the remaining
Partners agree in writing to continue the business of the Partnership and to the
appointment, effective as of a date prior to the date of such order or judgment,
of a substitute General Partner, or (ii) any other event of withdrawal of the
General Partner, as defined in the Act (other than an event of bankruptcy),
unless, within ninety (90) days after such event of withdrawal all
the remaining Partners agree in writing to continue the business of the
Partnership and to the appointment, effective as of the date of withdrawal, of a
successor General Partner;
C. on or after December 31, 2014 an election to dissolve the
Partnership made by the General Partner, in its sole and absolute discretion;
35
D. entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Act; or
E. the sale of all or substantially all of the assets and
properties of the Partnership.
Section 13.2 Winding Up
A. Upon the occurrence of a Liquidating Event, the
Partnership shall continue solely for the purposes of winding up its affairs in
an orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Partners. No Partner shall take any action that is inconsistent
with, or not necessary to or appropriate for, the winding up of the
Partnership's business and affairs. The General Partner, or, in the event there
is no remaining General Partner, any Person elected by a majority in interest
of the Limited Partners (the General Partner or such other Person being
referred to herein as the "Liquidator") shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of
the Partnership's liabilities and property and the Partnership property shall
be liquidated as promptly as is consistent with obtaining the fair value
thereof, and the proceeds therefrom (which may, to the extent determined by the
General Partner, include shares of stock in the General Partner) shall be
applied and distributed in the following order:
(1) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors
other than the Partners;
(2) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the General
Partner;
(3) Third, to the payment and discharge of all of the
Partnership's debts and liabilities to the other
Partners; and
(4) The balance, if any, to the General Partner and
Limited Partners in accordance with their Capital
Accounts, after giving effect to all contributions,
distributions, and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof
which require 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 sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A 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
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.
36
C. In the discretion of the Liquidator, a pro rata portion of
the distributions that would otherwise be made to the General Partner and
Limited Partners pursuant to this Article 13 may be:
1. distributed to a trust established for the
benefit of the General Partner and Limited Partners for the
purposes of liquidating Partnership assets, collecting
amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or
of the General Partner arising out of or in connection with
the Partnership. The assets of any such trust shall be
distributed to the General Partner and Limited Partners from
time to time, in the reasonable discretion of Liquidator, in
the same proportions as the amount distributed to such trust
by the Partnership would otherwise have been distributed to
the General Partner and Limited Partners Pursuant to this
Agreement; or
2. withheld or escrowed to provide a reasonable
reserve for Partnership liabilities (contingent or otherwise)
and to reflect the unrealized portion of any installment
obligations owed to the Partnership, provided that such
withheld or escrowed amounts shall be distributed to the
General Partner and Limited Partners in the manner and order
of priority set forth in Section 13.2.A as soon as
practicable.
Section 13.3 Compliance with Timing Requirements
of Regulations
In the event the Partnership is "liquidated" within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made
pursuant to this Article 13 to the General Partner and Limited Partners who have
positive Capital Accounts in compliance with Regulations Section
1-704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in his Capital
Account (after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs),
such Partner shall have no obligation to make any contribution to the capital of
the Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever.
Section 13.4. Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in
the event the Partnership is considered liquidated within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred,
the Partnership's property shall not be liquidated, the Partnership's
liabilities shall not be paid or discharged, and the Partnership's affairs shall
not be wound up. Instead, for federal income tax purposes and purposes of
maintaining Capital Accounts pursuant to Exhibit B hereto, the Partnership shall
be deemed to have distributed the property in kind to the General Partner and
Limited Partners, who shall be deemed to have assumed and taken such property
subject to all Partnership liabilities, all in accordance with their respective
Capital Accounts. Immediately thereafter, the General Partner and Limited
Partners shall be deemed to have recontributed the Partnership property in kind
to the Partnership, which shall be deemed to have assumed and taken such
property subject to all such liabilities.
Section 13.5 Rights of Limited Partners
Except as otherwise provided in this Agreement, each Limited
Partner shall look solely to the assets of the Partnership for the return of its
Capital Contributions and shall have no right or power to demand or receive
property other than cash from the Partnership. Except as otherwise provided in
this Agreement, no Limited Partner shall have priority over any other Partner as
to the return of its Capital Contributions, distributions, or allocations.
37
Section 13.6 Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs
that would, but provisions of an election or objection by one or more Partners
pursuant to Section 13.1, result in a dissolution of the Partnership, the
General Partner shall, within thirty (30) days thereafter, provide written
notice thereof to each of the Partners.
Section 13.7 Termination of Partner&in and Cancellation
of Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership
cash and property as provided in Section 13.2 hereof, the Partnership shall be
terminated, a certificate of cancellation shall be filed, and all qualifications
of the Partnership as a foreign limited partnership in jurisdictions other than
the State of Delaware shall be canceled and such other actions as may be
necessary to terminate the Partnership shall be taken.
Section 13.8 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 13.2 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.
Section 13.9 Waiver of Partition
Each Partner hereby waives any right to partition of the
Partnership property.
Section 13.10 Liability of the Liquidator
The Liquidator shall be indemnified and held harmless by the
Partnership from and against any and all claims, demands, liabilities, costs,
damages and causes of action of any nature whatsoever arising out of or
incidental to the Liquidator's taking of any action authorized under or within
the scope of this Agreement; provided, however, that the Liquidator shall not
be entitled to indemnification, and shall not be held harmless, where the
claim, demand, liability, cost, damage or cause of action at issue arises out
of:
(i) a matter entirely unrelated to the Liquidator's
action or conduct pursuant to the provisions of this
Agreement; or
(ii) the proven willful misconduct or gross negligence of
the Liquidator.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments
A. Amendments to this Agreement may be proposed by the
General Partner or by any Limited Partners holding twenty-five percent (25%) or
more of the Partnership Interests. Following such proposal, the General Partner
shall submit any proposed amendment to the Limited Partners. The General Partner
shall seek the written vote of the Partners on the proposed amendment or shall
call a meeting to vote thereon and to transact any other business that it may
deem appropriate. For purposes of obtaining a written vote, the General Partner
may require a response within a reasonable specified time, but not less than
fifteen (15) days, and failure to
38
respond in such time period shall constitute a vote which is consistent with the
General Partner's recommendation with respect to the proposal. Except as
provided in Section 14.1.B, 14.1.C or 14.1.D, a proposed amendment shall be
adopted and be effective as an amendment hereto if it is approved by the General
Partner and it receives the Consent of Partners holding a majority of the
Percentage Interests of the Limited Partners (including Limited Partner
Interests held by the General Partner).
B. Notwithstanding Section 14.1.A, the General Partner shall
have the power, without the consent of the Limited Partners, to amend this
Agreement as may be required to facilitate or implement any of the following
purposes:
(1) to add to the obligations of the General Partner or
surrender any right or power granted to the General
Partner or any Affiliate of the General Partner for
the benefit of the Limited Partners;
(2) to reflect the admission, substitution, termination,
or withdrawal of Partners in accordance with this
Agreement;
(3) to set forth the designations, rights, powers,
duties, and preferences of the holders of any
additional Partnership Interests issued pursuant to
Section 4.2.A hereof;
(4) to reflect a change that does not adversely affect
any of the Limited Partners in any material respect,
or to cure any ambiguity, correct or supplement any
provision in this Agreement not inconsistent with law
or with other provisions, or make other changes with
respect to matters arising under this Agreement that
will not be inconsistent with law or with the
provisions of this Agreement; and
(5) to satisfy any requirements, conditions, or
guidelines contained in any order, directive,
opinion, ruling or regulation of a federal or state
agency or contained in federal or state law.
The General Partner shall provide notice to the Limited Partners when any
action under this Section 14.1.B is taken.
C. Notwithstanding Section 14.1.A and 14.1.B hereof, this
Agreement shall not be amended without the Consent of each Partner adversely
affected if such amendment would (i) convert a Limited Partner's interest in
the Partnership into a general partner interest, (ii) modify the limited
liability of a Limited Partner in a manner adverse to such Limited Partner,
(iii) alter rights of the Partner to receive distributions pursuant to Article
5, or the allocations specified in Article 6 (except as permitted pursuant to
Section 4.2 and Section 14.1.B(3) hereof) in a manner adverse to such Partner,
(iv) alter or modify the Redemption Right and JQHH Class A Shares Amount as set
forth in Sections 8.6, and related definitions hereof, (v) cause the
termination of the Partnership prior to the time set forth in Sections 2.5 or
13.1, or (vi) amend this Section 14.1.C. Further, no amendment may alter the
restrictions on the General Partner's authority set forth in Section 7.3
without the Consent specified in that section.
D. Notwithstanding Section 14.1.A or Section 14.1.B hereof,
the General Partner shall not amend Sections 4.2.A, 7.5, 7.6, 11.2 or 14.2
without the Consent of a majority of the Percentage Interests of the Limited
Partners excluding Limited Partnership Interests held by the General Partner.
39
Section 14.2 Meetings of the Partners
A. Meetings of the Partners may be called by the General
Partner and shall be called upon the receipt by the General Partner of a request
by Limited Partners holding twenty-five percent (25%) or more of the Partnership
Interests. The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners not less than seven
(7) days nor more than thirty (30) days prior to the date of such meeting.
Partners may vote in person or by proxy at such meeting. Whenever the vote or
Consent of the Partners is permitted or required under this Agreement, such vote
or Consent may be given at a meeting of the Partners or may be given in
accordance with the procedure prescribed in Section 14.1.A hereof. Except as
otherwise expressly provided in this Agreement, the Consent of holders of a
majority of the Percentage Interests held by Limited Partners (including Limited
Partnership Interests held by the General Partner) shall control.
B. Any action required or permitted to be taken at a meeting
of the Partners may be taken without a meeting if a written consent setting
forth the action so taken is signed by a majority of the Percentage Interests of
the Partners (or such other percentage as is expressly required by this
Agreement). Such consent may be in one instrument or in several instruments, and
shall have the same force and effect as a vote of a majority of the Percentage
Interests of the Partners (or such other percentage as is expressly required by
this Agreement). Such consent shall be filed with the General Partner. An action
so taken shall be deemed to have been taken at a meeting held on the effective
date so certified.
C. Each Limited Partner may authorize any Person or Persons
to act for him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless, otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Limited Partner executing it,
such revocation to be effective upon the Partnership's receipt of or written
notice such revocation from the Limited Partner executing such proxy.
D. Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such
rules for the conduct of the meeting as the General Partner or such other Person
deems appropriate in its sole discretion. Without limitation, meetings of
Partners may be conducted in the same manner as meetings of the shareholders of
the General Partner and may be held at the same time as, and as part of,
meetings of the shareholders of the General Partner.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 Addresses and Notice
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. Such communications shall be deemed sufficiently given,
served, sent or received for all purposes at such time as delivered to the
addressee (with the return receipt or delivery receipt being deemed conclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
40
Section 15.2 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.
Section 15.3 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.
Section 15.4 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.
Section 15.5 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.
Section 15.6 Creditors
Other than as expressly set forth herein with respect to the
Indemnitees, none of the provisions of this Agreement shall be for the benefit
of, or shall be enforceable by, any creditor of the Partnership.
Section 15.7 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 condition.
Section 15.8 Counterparts
This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.
Section 15.9 Applicable Law
This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
Section 15.10 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
41
Section 15.11 Entire Agreement
This Agreement contains the entire understanding and agreement
among the Partners with respect to the subject matter hereof and supersedes any
other prior written or oral understandings or agreements among them with respect
thereto.
Section 15.12 No Rights as Shareholders
Nothing contained in this Agreement shall be construed as
conferring upon the holders of the Partnership Units any rights whatsoever as
shareholders of the General Partner, including without limitation any right to
receive dividends or other distributions made to shareholders of the General
Partner or to vote or to consent or to receive notice as shareholders in respect
of any meeting of shareholders for the election of directors of the General
Partner or any other matter.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first written above.
AS NEW GENERAL PARTNER:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ HOTELS INC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
AS WITHDRAWING GENERAL PARTNER AND
NEW LIMITED PARTNER:
▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
LIMITED PARTNER:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee under
Trust Agreement dated
December 28, 1989
EXHIBIT A
PARTNERS, CONTRIBUTIONS AND
PARTNERSHIP INTERESTS
Name Total Partnership Percentage
of Partner Contribution Units Interest
---------- ------------ ----- --------
General Partner
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, 104,545,650 6,336,100 28.31%
Inc., a Delaware corporation
Limited Partners
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 240,862,145 14,597,706 65.23%
▇▇▇▇▇▇▇, Inc. 23,862,205 1,446,194 6.46%
A-44
EXHIBIT B
CAPITAL ACCOUNT MAINTENANCE
1. Capital Accounts of the Partners
A. The Partnership shall maintain for each Partner a separate
Capital Account in accordance with the rules of Regulations Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions and any other deemed contributions made by such
Partner to the Partnership 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 1.B hereof and allocated to such Partner pursuant to
Section 6.1.A of the Agreement and Exhibit C hereof, and decreased by (x) the
amount of cash or Agreed Value of all actual and deemed distributions of cash or
property made to such Partner pursuant to this Agreement and (y) all items of
Partnership deduction and loss computed in accordance with Section 1.B hereof
and allocated to such Partner pursuant to Section 6.1.B of the Agreement and
Exhibit C hereof.
B. For purposes of computing the amount of any item of
income, gain, deduction or loss to be reflected in the Partners' Capital
Accounts, unless otherwise specified in this Agreement, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax purposes
determined in accordance with Section 703(a) of the Code (for this purpose all
items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a) (1) of the Code shall be included in taxable income
or loss), with the following adjustments:
(1) Except as otherwise provided in Regulations 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, provided that the
amounts of any adjustments to the adjusted bases of the
assets of the Partnership made pursuant to Section 734 of
the Code as a result of the distribution of property by
the Partnership to a Partner (to the extent that such
adjustments have not previously been reflected in the
Partners' Capital Accounts) shall be reflected in the
Capital Accounts of the Partners in the manner and
subject to the limitations prescribed in Regulations
Section 1.704-1(b)(2)(iv)(m)(4).
(2) The computation of all items of income, gain, and
deduction shall be made without regard to the fact that
items described in Sections 705(a)(1)(B) or 705(a)(2)(B)
of the Code are not includable gross income or are
neither currently deductible nor capitalized for federal
income tax purposes.
(3) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be
determined as if the adjusted basis of such property 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.
(4) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such
taxable income or loss, there shall be taken into account
Depreciation for such fiscal year.
(5) In the event the Carrying Value of any Partnership Asset
is adjusted pursuant to Section 1.D hereof, the amount of
any such adjustment shall be taken into account as gain
or loss from the disposition of such asset.
A-44
(6) Any items specially allocated under Section 2 of Exhibit
C hereof shall not be taken into account.
C. Generally, a transferee (including any Assignee) of a
Partnership Unit shall succeed to a pro rata portion of the Capital Account of
the transferor; 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, solely for federal income tax purposes, to have
been distributed in liquidation of the Partnership to the holders of the
Partnership units (including transferee) and recontributed by such Persons 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 1.D (2) hereof. The Capital Accounts of such
reconstituted Partnership shall be maintained in accordance with the principles
of this Exhibit B.
D. (1) Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section 1.D
(2), the Carrying Values of all Partnership assets
shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to
such Partnership property, as of the times of the
adjustments provided in Section 1.D (2) hereof, as if
such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property and
allocated pursuant to Section 6.1 of the Agreement.
(2) Such adjustments shall be made as of the following
times: (a) immediately prior to the acquisition of an
additional interest in the Partnership by any new or
existing Partner in exchange for more than a de
minimis Capital Contribution: (b) immediately prior to
the distribution by the Partnership to a Partner of
more than a de minimis amount of property as
consideration for an interest in the Partnership; and
(c) immediately prior to the liquidation of the
Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), provided however that
adjustments pursuant to clauses (a) and (b) above
shall be made only if the General Partner determines
that such adjustments are necessary or appropriate to
reflect the relative economic interests of the
Partners in the Partnership.
(3) In accordance with Regulations Section 1.704-
1(b)(2)(iv)(e), the Carrying Value of Partnership
assets distributed in kind shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized
Loss attributable to such Partnership property, as of
the time any such asset is distributed.
(4) In determining Unrealized Gain or Unrealized Loss for
purposes of this Exhibit B, the aggregate cash amount
and fair market value of all Partnership assets
(including cash or cash equivalents) shall be
determined by the General Partner using such
reasonable method of valuation as it may adopt, or in
the case of a liquidating distribution pursuant to
Article 13 of the Agreement, shall be determined and
allocated by the Liquidator using such reasonable
methods of valuation as it may adopt. The General
Partner, or the Liquidator, as the case may be, shall
allocate such aggregate fair market value among the
assets of the Partnership (in such manner as it
determines in its sole and absolute discretion to
arrive at a fair market value for individual
properties).
E. The provisions of this Agreement (including this Exhibit B
and the other Exhibits to this agreement) relating to the maintenance of Capital
Accounts are intended to comply with Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such Regulations. In the
event the General Partner shall determine that it is prudent to modify
A-45
the manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to liabilities which
are secured by contributed or distributed property or which are assumed by the
Partnership, the General Partner, or the Limited Partners) are computed in order
to comply with such Regulations, the General Partner may make such modification
without regard to Article 14 of the Agreement, provided that it is not likely to
have a material effect on the amounts distributable to any Person pursuant to
Article 13 of the Agreement upon the dissolution of the Partnership. The General
Partner also shall (i) make any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q),
and (ii) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b).
2. No Interest
No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
3. 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 Articles 4, 5, 7 and 13 of the Agreement.
A-46
EXHIBIT C
SPECIAL ALLOCATION RULES
1. Special Allocation Rules.
Notwithstanding any other provision of the Agreement or this
Exhibit C, the following special allocations shall be made in the following
order:
A. Minimum Gain Chargeback. Notwithstanding the provisions of
Section 6.1 of the Agreement or any other provisions of this Exhibit C, if there
is a net decrease in Partnership Minimum Gain during any Partnership Year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(f)(6). This Section
1.A is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and for purposes of this Section l.A only, each
Partner's Adjusted Capital Account Deficit shall be determined prior to any
other allocations pursuant to Section 6.1 of this Agreement with respect to such
Partnership Year and without regard to any decrease in Partner Minimum Gain
during such Partnership Year.
B. Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Section 6.1 of this Agreement or any other provisions of this
Exhibit C (except Section 1.A hereof), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
Year, each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each General
Partner and Limited Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(i)(4). This Section
l.B is intended to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently therewith.
Solely for purposes of this Section 1.B, each Partner's Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to Section
6.1 of the Agreement or this Exhibit with respect to such Partnership Year,
other than allocations pursuant to Section 1.A hereof.
C. Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions described in
Regulations Sections 1.704-l(b)(2)(ii)(d)(4), 1.704-l(b)(2)(ii)(d)(5), or
1.704-l(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections l.A and l.B hereof, such Partner has an Adjusted Capital Account
Deficit, items of Partnership income and gain (consisting of a pro rata portion
of each item of Partnership income, including gross income and gain for the
Partnership Year) and shall be specifically allocated to such Partner in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, its Adjusted Capital Account Deficit created by such adjustments,
allocations or distributions as quickly as possible. This Section l.C is
intended to constitute a "qualified income offset" under Regulations Section
1.704-l(b)(2)(ii)(d) and shall be interpreted consistently therewith.
D. Nonrecourse Deductions. Nonrecourse Deductions for any
Partnership Year 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
A-47
Deductions must be allocated in a different ratio to satisfy the safe harbor
requirements of the 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 for such Partnership Year to the numerically closest
ratio which would satisfy such requirements.
E. Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership Year shall be specially allocated to the Partner
who bears the economic risk of loss with respect to the Partner Nonrecourse Debt
to which such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Sections 1.704-2(b)(4) and 1.704-2(i).
F. 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 Regulations Section
1.704-l(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 Regulations.
2. Allocations for Tax Purposes
A. Except as otherwise provided in this Section 2, 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 6.1 of
the Agreement and Section 1 of this Exhibit C.
B. In an attempt to eliminate Book-Tax Disparities
attributable to a Contributed Property or Adjusted Property, items of income,
gain, loss, and deduction shall be allocated for federal income tax purposes
among the Partners as follows:
(1) (a) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the
Partners consistent with the principles of Section
704(c) of the Code to take into account the variation
between the 704(c) Value of such property and its
adjusted basis at the time of contribution (taking
into account Section 2.C of this Exhibit C); and
(b) 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 6.1 of the Agreement
and Section 1 of this Exhibit C.
(2) (a) In the case of an Adjusted Property, such items
shall
(1) 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
Exhibit B, and
(2) second, in the event such property was
originally a Contributed Property, be allocated among
the Partners in a manner consistent with Section 2.B
(1) of this Exhibit C; and
A-48
(b) any item of Residual Gain or Residual Loss
attributable to an Adjusted Property shall be
allocated among the Partners in the same manner its
correlative item of "book" gain or loss is allocated
pursuant to Section 6.1 of the Agreement and Section
1 of this Exhibit C.
(3) all other items of income, gain, loss and deduction shall
be allocated among the Partners the same manner as their
correlative item of "book" gain or loss is allocated
pursuant to Section 6.1 of the Agreement and Section 1 of
the Exhibit C.
C. To the extent Treasury Regulations promulgated pursuant to
Section 704(c) of the Code permit a Partnership to utilize alternative methods
to eliminate the disparities between the Carrying Value of property and its
adjusted basis, the General Partner shall, subject to the following, have the
authority to elect the method to be used by the Partnership and such election
shall be binding on all Partners. With respect to the Contributed Property
transferred to the Partnership on or about the Effective Date, the Partnership
shall elect to use the "traditional method" set forth in Treasury Regulation
SS. 1.704-3(b).
A-49
EXHIBIT D
VALUE OF CONTRIBUTED PROPERTY
Underlying Property 704(c) Value Agreed Value
------------------- ------------ ------------
Tucson, Arizona 8,000,000 (1,302,792)
Holiday Inn
Fresno, California 10,427,500 1,628,852
Holiday Inn
Denver (I-70), Colorado 11,636,000 306,492
Holiday Inn
Northglenn, Colorado 6,545,600 2,354,201
Holiday Inn
Fort ▇▇▇▇▇▇▇, Colorado 13,090,400 4,082,973
Holiday Inn
Des Moines, Iowa 23,283,000 23,283,000
Holiday Inn
Reno, Nevada 5,090,400 5,090,400
Holiday Inn
Greenville, South Carolina 18,400,000 (300,000)
Embassy Suites
Cheyenne, Wyoming 5,090,400 (681,167)
Holiday Inn
Springdale, Arkansas 13,090,400 3,660,877
Holiday Inn
Fort ▇▇▇▇▇, Arkansas 11,636,600 3,636,000
Holiday Inn
TOTAL 126,289,700 41,768,836
A-50
EXHIBIT E
NOTICE OF REDEMPTION
The undersigned hereby irrevocably (i) redeems____________
Partnership Units in ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, L.P. in accordance with the terms
of the Limited Partnership Agreement of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, L.P. and the
Redemption Right referred to therein, (ii) surrenders such Limited Partnership
Units and all right, title and interest therein, and (iii) directs that the Cash
Amount or the JQHH Class A Shares Amount (as determined by the General Partner)
deliverable upon exercise of the Redemption Right be delivered to the address
specified below, and if JQHH Class A Shares are to be delivered, such Shares be
registered or placed in the name(s) and at the address(es) specified below. The
undersigned hereby represents, warrants, and certifies, that the undersigned (a)
has marketable, and unencumbered title to such Partnership Units, free and clear
of the rights of or interests of any other person or entity, (b) has the full
right, power and authority to redeem and surrender such Partnership Units as
provided herein, and (c) has obtained the consent or approval of all persons or
entities, if any, having the right to consult or approve such redemption and
surrender.
Dated:
-----------------------
Name of Limited Partner:
----------------------------------
(Signature of Limited Partner)
----------------------------------
(Street Address)
----------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
----------------------------------
IF JQHH CLASS A SHARES ARE TO BE ISSUED, ISSUE TO:
Name:
Please insert social security or identifying number:
A-51
SCHEDULE 4.1.C
MORTGAGE DEBT OTHER DEBT
AMOUNT* DATE AMOUNT* DATE
PROPERTY LENDER ($) DUE LENDER ($) DUE
-------- ------ ------------- ---- ------ ---------- ----
TUCSON, ARIZONA Arizona State Retirement
HOLIDAY INN System 9,302,792 07/01/14 0
FRESNO, CALIFORNIA PNC Bank, Ohio, National
HOLIDAY INN Association 7,869,998 12/03/97 0
City of Fresno 928,650 12/01/01
DENVER (I-70), COLORADO The Western Southern
HOLIDAY INN Life Insurance Company 7,034,770 08/01/15 0
The Provident Bank 4,294,738 07/16/96
NORTHGLENN, COLORADO Commercial Federal
HOLIDAY INN Savings & Loan 1,283,081 03/01/07 0
Metropolitan Life
Insurance Company 1,625,237 03/01/07
College Life Insurance
Company 1,283,081 ▇▇/▇▇/▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ The Western Southern
HOLIDAY INN Life Insurance Company 9,007,427 ▇▇/▇▇/▇▇ ▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇ ▇
▇▇▇▇, ▇▇▇▇▇▇
HOLIDAY INN 0 0
GREENVILLE, SOUTH
CAROLINA
EMBASSY SUITES The Provident Bank 18,700,000 07/16/96 0
CHEYENNE, WYOMING PNC Bank, Ohio, National
HOLIDAY INN Association 5,771,567 10/01/10 ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ATRS 9,489,547 0
HOLIDAY INN
------------------------
* The amount of indebtedness is calculated as of November 23,1994.
Amendment No. 1 to Second Amended and Restated Agreement of Limited
Partnership of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, L.P.
AMENDMENT NO. 1, dated as of February 24, 1995 (this
"Amendment") to the Second Amended and Restated Agreement of Limited Partnership
of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels. L.P., dated as of November 23, 1994 (the "Partnership
Agreement") between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, Inc., a Delaware corporation, as
general partner (the "General Partner"), and The ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Revocable
Living Trust and ▇▇▇▇▇▇▇, Inc., a Missouri corporation, as limited partners (the
"Limited Partners"). All defined terms used herein without definition shall have
the meanings assigned to such terms in the Partnership Agreement.
W I T N E S S E T H
WHEREAS, the General Partner and Limited Partners are parties
to the Partnership Agreement; and
WHEREAS, the General Partner and Limited Partners have
determined that it is in their mutual interests to amend the Partnership
Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements and understandings hereinafter set forth, the parties agree as
follows:
1. Amendment to the Partnership Agreement. The
Partnership Agreement is, effective as of the date hereof, hereby amended as
follows:
(a) The definition of "Distribution Amount" shall be
restated in full to read as follows:
"Distribution Amount" means, with respect to any
Partnership Year, an amount equal to the aggregate
amount that the Partnership would have paid in
income taxes had it been a C corporation during such
Partnership Year; provided, however, that the
Distribution Amount shall not include an amount
equal to income taxes attributable to the interest
of the Partnership or a Restricted Subsidiary (as
defined in the indenture) in an Existing Subsidiary
(as defined in the indenture) or an Unrestricted
Subsidiary (as defined in the
Indenture) except to the extent that aggregate cash
distributions of at least such amount have been
received in such fiscal year by the Partnership or a
Restricted Subsidiary from the Existing Subsidiaries
and the Unrestricted Subsidiaries, taken as a whole.
For the purposes of determining the Distribution
Amount, the period from November 23, 1994 through
December 31, 1994 shall be treated as a Partnership
Year.
(b) The definition of "Distribution Event" shall be
deleted in its entirety.
(c) The definition of "General Partner Distribution
Amount" shall be restated in full to read as follows:
"General Partner Distribution Amount" means the
lesser of (i) the Distribution Amount or (ii) an
amount necessary to satisfy any income tax
obligations of the General Partner for the relevant
Partnership Year incurred due to its status as the
General Partner of the Partnership.
(c) Section 5.1 of the Partnership Agreement shall be
restated in full to read as follows:
Section 5.1 Requirement and Characterization of
Distributions
The General Partner shall make distributions
to the Partners when the General Partner so
determines in its sole and absolute discretion, in
accordance with the Partners' respective Percentage
Interests on such Partnership Record Date: provided,
however, that with respect to each Partnership Year
for which there is a Distribution Amount, the General
Partner shall distribute (i) an amount equal to the
General Partner Distribution Amount to the General
Partner and (ii) an amount equal to the Limited
Partner Distribution Amount to the Limited Partners
in accordance with the Limited Partners respective
Percentage Interests on such Partnership Record Date.
For any Partnership Year in which the General Partner
anticipates that there will be a Distribution Amount,
the General Partner may distribute quarterly (i) to
the General
-2-
Partner, an amount equal to one quarter of the
estimated General Partner Distribution Amount, and
(ii) to the Limited Partners, an amount equal to one
quarter of the estimated Limited Partner Distribution
Amount in accordance with the Limited Partners
respective Percentage Interests on such Partnership
Record Date; provided, however, that if, for any
Partnership Year, the total of the quarterly
distributions actually distributed to the Partners
exceeds the Distribution Amount for such Partnership
Year, then (x) the General Partner shall remit to the
Partnership an amount equal to (a) the total amount
of the quarterly distributions distributed to the
General Partner for such Partnership Year, less (b)
the General Partner Distribution Amount for such
Partnership Year and (y) each Limited Partner shall
remit to the Partnership, an amount equal to (a) (i)
the total amount of quarterly distributions
distributed to the Limited Partners for such
Partnership Year, less (ii) the Limited Partner
Distribution Amount for such Partnership Year,
multiplied by (b) (i) the total amount of quarterly
distributions distributed to such Limited Partner for
such Partnership Year, over (ii) the total amount of
the total amount of quarterly distributions
distributed to all Limited Partners for such
Partnership Year.
2. Counterparts. This Amendment may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Amendment.
3. Descriptive Headings. The descriptive headings of
this Amendment are inserted for convenience only and do not constitute a part
of this Amendment.
-3-
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment on the date first written above.
GENERAL PARTNER:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ HOTELS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board
LIMITED PARTNERS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
under Trust Agreement dated
December 28, 1989
▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board
-4-
Amendment No. 2 to Second Amended and Restated Agreement
of Limited Partnership of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, L.P.
AMENDMENT NO. 2, dated as of October 10, 1995 (this "Amendment")
to the Second Amended and Restated Agreement of Limited Partnership of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ Hotels, L.P., dated as of November 23, 1994 (the "Partnership
Agreement") between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, Inc., a Delaware corporation, as
general partner (the "General Partner"), and The ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Revocable
Living Trust and ▇▇▇▇▇▇▇, Inc., a Missouri corporation, as limited partners (the
"Limited Partners"). All defined terms used herein without definition shall have
the meanings assigned to such terms in the Partnership Agreement.
WITNESSETH
WHEREAS, the General Partner and Limited Partners are parties to
the Partnership Agreement; and
WHEREAS, the General Partner and Limited Partners have determined
that it is in their mutual interests to amend the Partnership Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and understandings hereinafter set forth, the parties agree as
follows:
1. Amendment to the Partnership Agreement. The Partnership
Agreement is, effective as of the date hereof, hereby amended as follows:
(a) Exhibit A shall be amended to reflect the admission of
J.Q.H., Inc. as a limited partner.
(b) Section 4.1.D shall be added and shall read as follows:
D. For avoidance of doubt, if property to which the
applicable Scheduled Debt relates has been transferred to
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Two, L.P., and the property has then been
subsequently transferred back to the Partnership, then to
the extent that a Schedule Debt Deficiency exists with
respect to such property, the Additional Capital
Contribution (subject to the limitations set forth in
Section 4.1.C of this Agreement) shall be made to the
Partnership.
(c) Section 4.1.E shall be added and shall read as follows:
E. Notwithstanding any other provision of this Agreement,
if at any time and from time to time a "2005 Note
Deficiency" (as hereinafter defined) exists, ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ shall be obligated to make a capital contribution to
the Partnership (the "2005 Note Deficiency Additional
Capital Contribution") in an amount equal to one hundred
percent of such 2005 Note Deficiency; provided, however,
that in no event shall the aggregate amount required to be
contributed by ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ from time to time,
pursuant to this Section 4.1.E exceed $45,000,000 less any
amounts previously contributed pursuant to this Section
4.1.E. A 2005 Note Deficiency shall exist if, in connection
with an Event of Default under the Indenture (the "2005 Note
Indenture") relating to the __% First Mortgage Notes due
2005 (the "2005 Notes"), the proceeds from a sale or other
disposition of the collateral under the 2005 Note are
insufficient to satisfy the amounts due on the 2005 Notes.
Any 2005 Note Deficiency Additional Capital Contributions
made pursuant to this Section 4.1.E shall be used to pay the
2005 Note Deficiency. In the event that a 2005 Note
Deficiency exists, the General Partner shall within ten days
send a notice ("Notice") to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ setting
forth (i) the amount of the 2005 Note Deficiency, (ii) the
amount of 2005 Note Deficiency Additional Capital
Contribution required under this Section 4.1.E and (iii) the
date on which payment of such 2005 Note Deficiency Capital
Contribution is due, which date shall be no later than 30
days after the Notice is sent. If the General Partner does
not send the Notice within the prescribed period, the
Trustee under the 2005 Note Indenture shall be entitled to
send the Notice. This Section 4.1.E is for the benefit of
the holders of the 2005 Notes under the 2005 Note Indenture
and, in accordance with the 2005 Note Indenture, the
-2-
Trustee shall have the power to act on behalf of the holders
of the 2005 Notes under the 2005 Note Indenture and to
enforce the obligations of ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ under this
Section 4.1.E. The obligations under this Section 4.1.E
shall be personal to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and shall not be
affected by any transfer by him of all or any part of the
Partnership Interests, and ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall have
(A) no right to the return from the Partnership of any 2005
Note Deficiency Additional Capital Contributions made
pursuant to this Section 4.1.E, (B) no right to
indemnification from the Partnership or any Partner with
respect to any such 2005 Note Deficiency Additional Capital
Contribution and (C) no right of subrogation with respect to
any such 2005 Note Deficiency Additional Capital
Contribution. This Section 4.1.E may not be amended without
the express written approval of holders of at least a
majority in principal amount of the 2005 Notes.
2. Counterparts. This Amendment may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Amendment.
3. Descriptive Headings. The descriptive headings of this
Amendment are inserted for convenience only and do not constitute a part of this
Amendment.
-3-
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
on the date first written above.
GENERAL PARTNER:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ HOTELS, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman & CEO
LIMITED PARTNERS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
under Trust Agreement dated
December 28, 1989
▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
-4-
EXHIBIT 3.1
AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ HOTELS, L.P.
THIS AMENDMENT NO. 3, dated as of May 17, 2002 (this "Amendment No. 3")
to the Second Amended and Restated Agreement of Limited Partnership of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ Hotels, L.P., dated as of November 23, 1994 (the "Partnership
Agreement") between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, Inc., a Delaware corporation, as
general partner (the "General Partner"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee of the
Revocable Trust of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Dated December 28, 1989, as Amended and
Restated, ▇▇▇▇▇▇▇, Inc., a Missouri corporation, and J.Q.H., Inc., a Missouri
corporation, as limited partners (the "Limited Partners"), as previously amended
by Amendment No. 1 dated February 24, 1995 and Amendment No. 2 dated October 12,
1995. All defined terms used herein without definition shall have the meanings
assigned to such terms in the Partnership Agreement.
W I T N E S S E T H
WHEREAS, the General Partner and Limited Partners are parties to the
Partnership Agreement; and
WHEREAS, the General Partner and Limited Partners have determined that
it is in their mutual interests to amend the Partnership Agreement to induce
▇▇▇▇▇▇ Brothers Inc. and certain other initial purchasers to create a market for
the sale of $510,000,000 of new first mortgage notes (the "Notes").
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and understandings hereinafter set forth, the parties agree as
follows:
1. Amendment to the Partnership Agreement. The Partnership Agreement
is, effective as of the date hereof, hereby amended as follows:
(a) In the event, the Notes are not issued, the Partnership
Agreement is not amended in any respect.
(b) Concurrently with the issuance and sale of the Notes,
Section 4.1.B shall be replaced and shall read as follows:
"B. Notwithstanding any other provision of
this Agreement, if at any time and from time to time a "Note
Deficiency" (as hereinafter defined) exists, ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ shall be obligated to make a capital contribution to
the Partnership in an amount equal to $180,000,000 of such
Note Deficiency and ▇▇▇▇▇▇▇, Inc. shall be obligated to make a
capital contribution to the Partnership in an amount of
$15,000,000 of such Note Deficiency (the "Additional Capital
Contribution"); provided, however, that in no event shall the
aggregate amount required to be contributed by ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc., from
time to time, pursuant to this Section 4.1.B exceed
$195,000,000.00, less any amounts previously contributed
pursuant to this Section 4.1.B. A Note Deficiency shall exist
if, in connection with an Event of Default under the Indenture
(the "Indenture") relating to the First Mortgage Notes due
2012 (the "Notes"), the proceeds from a sale or other
disposition of the collateral under the Indenture are
insufficient to satisfy the amounts due on the Notes. Any
Deficiency Additional Capital Contributions made pursuant to
this Section 4.1.B shall be used to pay the Note Deficiency.
In the event that a Note Deficiency exists, the General
Partner shall within ten days send a notice ("Notice") to ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc., setting forth (i) the
amount of the Note Deficiency, (ii) the amount of Additional
Capital Contribution required under this Section 4.1.B and
(iii) the date on which payment of such Additional Capital
Contribution is due, which date shall be no later than 30 days
after the Notice is sent. If the General Partner does not send
the Notice within the prescribed period, the Trustee under the
Indenture shall be entitled to send the Notice. This Section
4.1.B is for the benefit of the holders of the Notes under the
Indenture and, in accordance with the Indenture, the Trustee
shall have the power to act on behalf of the holders of the
Notes under the Indenture and to enforce the obligations of
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc., under this Section
4.1.B. The obligations under this Section 4.1.B shall be
personal to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc., and shall
not be affected by any transfer by them of all or any part of
the Partnership Interests, and ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇, Inc., shall have (A) no right to the return from the
Partnership of any Additional Capital Contributions made
pursuant to this Section 4.1.B, (B) no right to
indemnification from the Partnership or any Partner with
respect to any such Additional Capital Contribution and (C) no
right of subrogation with respect to any such Additional
Capital Contribution. This Section 4.1.B may not be amended
without the express written approval of holders of at least a
majority in principal amount of the Notes."
(c) Concurrently with the issuance and sale of the Notes,
Section 4.1.E shall be deleted in its entirety.
2. Counterparts. This Amendment No. 3 may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Amendment.
3. Descriptive Headings. The descriptive headings of this Amendment are
inserted for convenience only and do not constitute a part of this Amendment.
2
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date first written above.
GENERAL PARTNER:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ HOTELS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and CEO
LIMITED PARTNERS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee of the
Revocable Trust of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
dated December 28, 1989, as Amended
and Restated
▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
J.Q.H., INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
3