LIMITED PARTNERSHIP AGREEMENT
OF
PLANET MOVIES COMPANY, L.P.
THIS LIMITED PARTNERSHIP AGREEMENT ("Agreement") is
made and entered into as of the 17th day of October, 1997,
by and among PMC MANAGEMENT, INC., a Georgia close
corporation, as general partner (the "General Partner");
PLANET HOLLYWOOD (THEATRES), INC., a Florida corporation
("PHT"); and AMCPH HOLDINGS, INC., a Missouri corporation
("AMCPH") (PHT and AMCPH collectively referred to herein as
the "Limited Partners," and the General Partner and the
Limited Partners collectively referred to herein as the
"Partners").
SECTION ONE
FORMATION, NAME, PRINCIPAL OFFICE, TERM,
PURPOSE, TITLE TO PROPERTY, QUALIFICATION
1.1Formation. The Partnership will be organized as a
Delaware limited partnership by the filing, in accordance
with the Act, of a Certificate of Limited Partnership with
the Office of the Delaware Secretary of State (the
"Certificate") on or before October 20, 1997. The Partners
hereby agree to continue the Partnership as a limited
partnership under and pursuant to the Act and agree that the
rights, duties and liabilities of the Partners shall be as
provided in the Act, except as otherwise provided herein.
1.2Name and Mailing Address. The name of the
Partnership shall be as set forth from time to time in the
Certificate. The Partnership may from time to time adopt
one or more trade names for use in the Partnership's
business as shall be selected by the General Partner. The
mailing address of the Partnership shall be initially at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and
subsequently at such other place as the General Partner may
determine from time to time.
1.3Principal and Other Offices; Registered Office.
The Partnership shall have such offices, as shall be
designated by the General Partner from time to time. The
registered office of the Partnership in Delaware shall be
c/o Corporation Service Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other locations as may
hereafter be designated by the General Partner from time to
time in the manner provided by applicable law. All of the
records required to be maintained pursuant to the Act shall
be kept at the principal office. The Partnership may have
such other offices as may be determined by the General
Partner from time to time.
1.4Term. The Partnership commenced on the date the
Certificate was filed with the Office of the Delaware
Secretary of State and shall continue in existence until it
is terminated in accordance with the provisions of Section
10 of this Agreement.
1.5Agent for Service of Process. The name and
address of the agent for service of process shall be
Corporation Service Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other agent at such other location as
may hereafter be designated by the General Partner from time
to time in the manner provided by applicable law.
1.6Purposes of the Partnership.
(a)Ownership of Venture Units. The Partnership is
formed to establish from time to time, alone or with others,
additional limited partnerships and other business entities
that, among other things, directly or indirectly own and
operate certain theatres now under development by AMC (such
theatres being "Day 2 Venture Units") and proprietary
branded theatre-restaurant-retail facilities (such
facilities being "Day 3 Venture Units").
(b)The Partnership is formed to acquire licenses to
use trade names, trademarks, service marks, and other
intellectual property, including in particular intellectual
property owned by Planet Hollywood or its Affiliates and
intellectual property owned by AMC or its Affiliates, and to
own trade names, trademarks, service marks, logos and other
intellectual property that the Partnership itself creates or
otherwise acquires (all of such intellectual property
referred to herein as the "Partnership Intellectual
Property"). The Partnership is also formed to license or
sublicense the use of the Partnership Intellectual Property
to others, including in particular Affiliates of AMC with
respect to certain theatres now owned and operated by AMC
(such theatres being "Day 1 Venture Units"), and also
including in particular the Day 2 Venture Units and the
Day 3 Venture Units.
(c)The Day 1 Venture Units, Day 2 Venture Units, and
Day 3 Venture Units are collectively referred to herein as
the "Venture Units". More detailed agreements of the
Partners regarding the Venture Units are set forth in a
Shareholders' Agreement dated the date hereof between the
shareholders of the General Partner.
(d)The Partnership is further formed to engage in any
other lawful act or activity that is related to the
foregoing purposes or that is related to the use by the
Partnership of the Partnership Intellectual Property, as
determined by the General Partner.
1.7Partners. The names and addresses of the General
Partner and the Limited Partners are as follows:
General Partner: PMC MANAGEMENT, INC., a Georgia
close corporation, initially at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and
subsequently at such other place
as the General Partner may notify
the Limited Partners in writing
from time to time.
Limited Partners: PLANET HOLLYWOOD (THEATRES), INC.,
a Florida corporation, ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place
as such Limited Partner may notify
the General Partner in writing from
time to time.
AMCPH HOLDINGS, INC., a Missouri
corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Post
Office Box 419615, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, or such other place as such
Limited Partner may notify the General
Partner in writing from time to time.
1.8Qualification in Other Jurisdictions. The General
Partner shall cause the Partnership to be qualified, formed
or registered under assumed or fictitious name statutes or
similar laws in any jurisdiction in which the Partnership
transacts business in which such qualification, formation,
or registration is required or desirable. The General
Partner shall execute, deliver and file, or cause the
execution, delivery or filing of, any certificates (and any
amendments or restatements thereof) necessary for the
Partnership to qualify to do business in a jurisdiction in
which the Partnership may wish to conduct business.
1.9Title to Property. Legal title to the
Partnership's property, whether real, personal or mixed,
shall be held in the name of the Partnership or in whatever
other manner the General Partner shall determine to be in
the best interests of the Partnership; provided, that if
title is not held in the Partnership's name, the General
Partner shall provide the Limited Partners with notice of
the name in which title is held. Without limiting the
generality of the foregoing, the General Partner may arrange
to have title to Partnership property taken and held in the
name of any trustee or nominee for and on behalf of the
Partnership. Each partner's interest in the Partnership
shall be personal property for all purposes.
SECTION TWO
DEFINITIONS
When used in this Agreement, the following terms have
the following respective meanings (unless otherwise
specifically provided). Also in this Agreement the singular
shall include the plural, the masculine gender shall include
the feminine and neuter, and vice versa, as the context
requires. Any terms not specifically defined herein shall
be construed in accordance with the meaning and understand-
ing given such terms in the trade or business of the Part-
nership.
Act: The Revised Uniform Limited Partnership Act of
the State of Delaware, as amended from time to time.
Adjusted Capital Account Deficit: With respect to any
Limited Partner, the deficit balance, if any, in such
Limited Partner's Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following
adjustments:
(i)Credit to such Capital Account any
amounts which such Limited Partner 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)Debit to such Capital Account the items
described in 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) of the
Regulations.
This definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Section
1.704-1(b)(2)(ii)(d) of the Regulations and shall be
interpreted consistently therewith.
Affiliates: When used with respect to any Person, any
Person which controls, is controlled by, or is under common
control with, the Person; a Person which controls an
Affiliate under the foregoing shall also be deemed to be an
Affiliate of such entity. For purposes of this definition,
the term "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of
the management and policies of an entity, or the power to
veto major policy decisions of any such entity, whether
through the ownership of voting securities, by contract, or
otherwise. Notwithstanding the foregoing, the Partnership,
the General Partner and any entities formed to own the
Venture Units as contemplated by the Shareholders' Agreement
shall not be deemed to be an Affiliate of either AMCPH or
PHT for purposes of this Agreement.
AMC: American Multi-Cinema, Inc., a Missouri
corporation.
Capital Account: With respect to any Partner, the
Capital Account maintained for such Partner in accordance
with the following provisions:
(i)To each Person's Capital Account there
shall be credited the amount of cash and the Gross Asset
Value of property contributed to the Partnership, such
Person's distributive share of Profits and any items in the
nature of income or gain which are specially allocated
pursuant to Section 5.3 or Section 5.4 hereof, and the
amount of any Debt assumed by such Person or which is
secured by any property distributed to such Person.
(ii)To each Person's Capital Account there
shall be debited the amount of cash and the Gross Asset
Value of any property distributed to such Person pursuant to
any provision of this Agreement, such Person's distributive
share of Losses and any items in the nature of expenses or
losses which are specially allocated pursuant to Section 5.3
or Section 5.4 hereof, and the amount of any Debt of such
Person assumed by the Company or which is secured by any
property contributed by such Person to the Company.
(iii)In the event all or a portion of a
Partnership Interest is Transferred in accordance with the
terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates
to the Transferred Interest.
The foregoing provisions and the other provisions of
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. If the General Partner
determines that it is prudent to modify the manner in which
the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating
to Debt which is secured by contributed or distributed
property or which is assumed by the Partnership or a
Partner), are computed in order to comply with such
Regulations, the General Partner may make such modification,
provided that it is not likely to have a material effect on
the amounts distributed to any Person pursuant to
Section 10.2 upon the dissolution of the Company. 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
Company capital reflected on the Company'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).
Code: The Internal Revenue Code of 1986, as amended.
Debt: Any indebtedness for borrowed money or deferred
purchase price of property evidenced by a note, bonds, or
other instruments, any obligations as lessee under capital
leases, any obligations secured by any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind
existing on any Partnership property whether or not the
Partnership has assumed or become liable for the obligations
secured thereby, and obligations under direct or indirect
guarantees of (including obligations (contingent or
otherwise) to assure a creditor against loss in respect of)
indebtedness or obligations of the kinds referred to in this
Section, provided that Debt shall not include obligations in
respect of any accounts payable that are incurred in the
ordinary course of the Partnership's business and are not
delinquent or are being contested in good faith by
appropriate proceedings. As appropriate in determining the
amount of Debt hereunder, Code Section 752(c) and any other
applicable provisions of the Code shall be taken into
account.
Depreciation: For each Fiscal Year, an amount equal to
the depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such Fiscal
Year under the Code, except that if the Gross Asset Value of
an asset differs from its adjusted basis for federal income
tax purposes at the beginning of such Fiscal Year,
Depreciation shall be an amount which bears the same ratio
to such beginning Gross Asset Value as the federal income
tax depreciation, amortization, or other cost recovery
deduction for such Fiscal Year bears to such beginning
adjusted tax basis; provided, however, that if the adjusted
basis for federal income tax purposes of an asset at the
beginning of such Fiscal Year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the General
Partner.
Event of Dissolution: Any of the events that result in
a dissolution of the Partnership as set forth in Section
10.1 hereof.
Fiscal Year: The fiscal period ended on the Sunday
nearest to December 31, 1997, each 52/53 week period ending
on the Sunday nearest to December 31 thereafter, and each
fiscal period that is defined as a Fiscal Year in any other
provision of this Agreement.
General Partner: PMC Management, Inc., a Georgia close
corporation, so long as it is General Partner of the
Partnership, and all predecessor or additional or successor
General Partners of the Partnership. Unless the context
clearly requires otherwise, any reference in this Agreement
to the "General Partner" shall be deemed to apply to all
General Partners collectively at all times during which
there is more than one General Partner.
Gross Asset Value: With respect to any asset, the
asset's adjusted basis for federal income tax purposes,
except as follows:
(i)The initial Gross Asset Value of any
asset contributed by a Partner to the Partnership shall be
the gross fair market value of such asset at the time of the
contribution, as determined by the contributing Partner and
the Partnership;
(ii)The Gross Asset Values of all
Partnership assets shall be adjusted to equal their
respective gross fair market values, as determined by the
General Partner, as of the following times: (a) 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) 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) 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 reasonably determines that such
adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the
Partnership;
(iii)The Gross Asset Value of any
Partnership asset distributed to any Partner shall be
adjusted to equal the gross fair market value of such asset
on the date of distribution as determined by the distributee
and the General Partner; and
(iv)The Gross Asset Values of Partnership
assets shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to
Code Section 734(b) or Code Section 743(b), but only to the
extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Regulation Section
1.704-1(b)(2)(iv)(m), clause (vi) of the definition of
"Profits" and "Losses" below in this Section, and Section
5.3(g); provided, however, that Gross Asset Values shall not
be adjusted pursuant to this clause (iv) to the extent the
General Partner determines that an adjustment pursuant to
clause (ii) hereof is necessary or appropriate in connection
with a transaction that would otherwise result in an
adjustment pursuant to this clause (iv).
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to clauses (i), (ii), or (iv) hereof, such
Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset
for purposes of computing Profits and Losses.
Limited Partners: The parties who are admitted as
Limited Partners during the period in which they own
Partnership Interests. Unless the context clearly requires
otherwise, any reference in this Agreement to a "Limited
Partner" shall be deemed to apply to all Limited Partners
collectively at all times during which there may be more
than one Limited Partner.
Nonrecourse Deductions: Deductions described in Section
1.704-2(b)(1) of the Regulations. The amount of Nonrecourse
Deductions for a Fiscal Year generally equals the net
increase, if any, in the amount of Partnership Minimum Gain
during that Fiscal Year, and specifically shall be an amount
determined in accordance with the provisions of Section
1.704-2(c) of the Regulations.
Nonrecourse Liability: Liability described in Section
1.704-2(b)(3) of the Regulations.
Partner Nonrecourse Debt: A nonrecourse Debt of the
Partnership described in Section 1.704-2(b)(4) of the
Regulations.
Partner Nonrecourse Debt Minimum Gain: 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 Section 1.704-2(i)(3) of the
Regulations.
Partner Nonrecourse Deductions: The items of loss,
deduction and expenditure described in Sections
1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.
Partnership: The Limited Partnership created by the
filing of the Certificate and the Partnership continuing the
business of this Partnership in the event of dissolution as
provided in Section 10.
Partnership Assets (or Property): All real and
personal property acquired by the Partnership and any
improvements thereto, and shall include both tangible and
intangible property.
Partnership Interest or Interests: When referring to a
General Partner's, a Limited Partner's, or an assignee, its
interest in the Partnership's capital, profits, losses, and
distributions, its rights (if any) in specific Partnership
property, and its right (if any) to participate in
Partnership management, all as provided in this Agreement,
the Act, and other law.
Partnership Minimum Gain: As of any date, the amount
determined under Sections 1.704-2(b)(2) and 1.704-2(d) of
the Regulations.
Planet Hollywood: Planet Hollywood International,
Inc., a Delaware corporation.
Person: Any individual, partnership, corporation,
trust or other entity.
Profits and Losses: For each Fiscal Year, an amount
equal to the Partnership's taxable income or loss for such
Fiscal Year, determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss,
or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income
or loss), with the following adjustments:
(i)Any income of the Partnership that is
exempt from federal income tax and not otherwise taken into
account in computing Profits or Losses pursuant to this
definition shall be added to such taxable income or loss;
(ii)Any expenditures of the Partnership
described in Code Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Regulations
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Profits or Losses pursuant to this
definition shall be subtracted from such taxable income or
loss;
(iii)In the event the Gross Asset Value
of any Partnership asset is adjusted pursuant to the
definition of Gross Asset Value above in this Section, the
amount of such adjustment shall be taken into account as
gain or loss from the disposition of such asset for purposes
of computing Profits or Losses;
(iv)Gain or loss resulting from any
disposition of property with respect to which gain or loss
is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the
property disposed of, notwithstanding that the adjusted tax
basis of such property differs from its Gross Asset Value;
(v)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, computed in accordance with the definition of
Depreciation above in this Section;
(vi)To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Code
Section 734(b) or Code Section 743(b) is required pursuant
to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into
account in determining Capital Accounts as a result of a
distribution other than in complete liquidation of a
Partner's Partnership Interest, the amount of such
adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the
adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for
purposes of computing Profits or Losses; and
(vii)Notwithstanding any other provision
of this definition, any items which are specially allocated
pursuant to Section 5.3 or Section 5.4 hereof shall not be
taken into account in computing Profits or Losses.
The amounts of the items of Partnership income, gain, loss
or deduction available to be specially allocated pursuant to
Sections 5.3 and 5.4 hereof shall be determined by applying
rules analogous to those set forth in clauses (i) through
(vi) above.
Regulations: The Income Tax Regulations, including
Temporary Regulations, promulgated under the Code, as such
Regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
Shareholders' Agreement:Shareholders' Agreement dated
this date by and between Planet Hollywood, PHT, AMC
Entertainment Inc., AMCPH and PMC Management, Inc.
Tax Matters Partner: PMC Management, Inc., a Georgia
close corporation.
Unit: A quantitative portion of all Partnership
Interests initially equal to .001 percent (1/100,000) of all
Partnership Interests; provided, the quantitative portion of
all Partnership Interests that is represented by a Unit may
be changed from time to time by the General Partner in
accordance with the provisions of Section 3.2.
SECTION THREE
CAPITAL CONTRIBUTIONS AND LOANS
3.1Initial Capital Contributions.
(a)General Partner. Contemporaneously herewith PMC
Management, Inc. shall contribute Two Hundred Thousand
Dollars ($200,000) in cash to the Partnership, and PMC
Management, Inc. hereby agrees to expose its assets to the
Partnership's liabilities to the extent provided by law and
to undertake all of the obligations of the Partnership's
General Partner. In consideration of and in exchange for
such capital contribution and agreements, PMC Management,
Inc. hereby receives 1,000 Units.
(b)Limited Partners. Contemporaneously with the
execution of this Agreement, the Limited Partners shall make
capital contributions to the Partnership of the following:
(i)PHT shall contribute: (A) a royalty-
free license to use the intellectual property more
particularly described in, and pursuant to that certain
Master License Agreement (PH) dated this date between the
Partnership and an affiliate of PHT; and (B) Eight Million
Nine Hundred Thousand Dollars ($8,900,000) in cash. In
consideration of and in exchange for such capital
contribution, PHT hereby receives 49,500 Units.
(ii)AMCPH shall contribute: (A) a royalty-
free license to use the intellectual property more
particularly described in, and pursuant to that certain
Master License Agreement (AMC) dated this date between the
Partnership and an affiliate of AMCPH; (B) Eight Million
Nine Hundred Thousand Dollars ($8,900,000) in cash. In
consideration of and in exchange for such capital
contribution, AMCPH hereby receives 49,500 Units.
3.2Additional Capital Contributions.
(a)General. If the General Partner from time to time
determines in its sole and absolute discretion that the
Partnership should obtain additional capital contributions
from the Partners, then the General Partner shall give a
written notice to the Partners that sets forth the total
amount of capital contributions that the General Partner has
determined is then needed by the Partnership, the portion of
such total that is to be contributed by each Partner (which
shall be based on the proportion of the Units held by the
Partner at the time the notice is given), and the date on
which these capital contributions should be paid to the
Partnership. Each Partner shall, within 10 days of the due
date specified in such a notice from the General Partner,
contribute cash to the Partnership in the amount required of
such Partner by such notice.
(b)Issuance of Additional Units. Each time that the
General Partner requires the making of additional capital
contributions pursuant to paragraph 3.2(a) the General
Partner shall, at the same time: determine the number of
Units that should be issued by the Partnership to the
Partners in exchange for such contributions, taking into
account the value of the then outstanding Units; change the
quantitative portion of all Partnership Interests that is
represented by one Unit to reflect the issuance of such new
Units; and inform the Partners of such determination and
change in the written notice regarding the making of such
contributions that is given pursuant to paragraph 3.2(a).
Upon receipt by the Partnership from a Partner of an
additional capital contribution required of such Partner
pursuant to paragraph 3.2(a), such Partner shall receive a
portion of the new Units then proposed to be issued by the
Partnership (based on the proportion of the Units held by
the Partner at the time the written notice requiring such
contribution is given), and such new Units shall be fully
paid and nonassessable.
(c)No Third Party Rights. The right of the General
Partner to require any additional capital contributions
under the terms of this Agreement shall not be construed as
conferring any rights or benefits to or upon any Person not
a party to this Agreement.
3.3Election to Make Contribution Loan Upon Default in
Making of Additional Capital Contributions.
(a)Procedure. In the event a Partner fails to make
any additional capital contribution within the time
specified, the General Partner shall give prompt notice of
such failure to the non-defaulting Partners, who shall have
the right (but are not required) to advance directly to the
Partnership, in proportion to their ownership of Units
unless otherwise agreed by them, all or any part of the non-
contributing Partner's additional capital contribution that
is in default. Each amount so advanced shall constitute for
all purposes: (i) a loan by the contributing party to the
noncontributing Partner (a "Contribution Loan"); and (ii) an
additional capital contribution of that sum to the
Partnership by the noncontributing Partner pursuant to the
applicable provisions of this Agreement. Each Contribution
Loan shall bear interest at a rate equal to the lesser of:
(i) a rate equal to three percentage points above the prime
rate in effect from time to time as published in the Midwest
Edition of the Wall Street Journal; or (ii) the maximum rate
of interest then permitted by law. To the extent not
previously paid by the non-contributing Partner, each
Contribution Loan shall be repaid out of the first
subsequent distributions of cash made pursuant to this
Agreement (applied to all Contribution Loans in proportion
to their respective outstanding balances) to which the non-
contributing Partner would otherwise be entitled, which cash
shall be paid directly by the Partnership to the lending
Partners and shall be applied first to interest and then to
principal until the Contribution Loans are paid in full.
(b)Additional Remedies. In the event any
Contribution Loan has not been paid in full within 30 days
after it is made, then the lending Partner may at any time
and from time to time elect to pursue any remedy available
to it at law or in equity including, without limitation,
bringing an action to collect the Contribution Loan and all
accrued interest thereon without further notice to or demand
upon the non-contributing Partner.
3.4Election to Receive Additional Units Upon Default
in Making of Additional Capital Contributions. In the event
a Partner fails to make any additional capital contribution
within the time specified, the General Partner shall give
prompt notice of such failure to the non-defaulting
Partners, who shall have the right (but are not required):
to advance directly to the Partnership cash in an amount
equal to all or any part of the non-contributing Partner's
additional capital contribution that is in default; and
upon making such advance, to receive the Units that the non-
contributing Partner would have received upon contributing
such amount to the Partnership. A non-defaulting Partner
may exercise the rights granted to it pursuant to this
Section 3.4 by giving notice of such exercise to the
Partnership, accompanied by the amount of cash to be
advanced to the Partnership pursuant to such exercise,
within 30 days after the non-contributing Partner's
additional capital contribution was due. Upon such exercise
the Partnership shall treat the amount so advanced to it as
a capital contribution by the contributing Partner and shall
issue the appropriate number of Units to such Partner.
3.5Effect of Change in Proportionate Unit Holdings.
If from time to time as a result of the exercise of rights
provided for in paragraphs 3.3, 3.4, or 3.5 there is a
change in the proportionate Unit holdings of the Partners,
then the fiscal period from the end of the immediately
preceding Fiscal Year to the day before such change shall be
a Fiscal Year of the Partnership for purposes of determining
and allocating the Partnership's Profits or Losses for such
Fiscal Year.
3.6Other Matters Relating to Capital Contributions.
(a)Loans by any Partner to the Partnership shall not
be considered capital contributions.
(b)Except as may be expressly provided herein, no
Partner shall be entitled to withdraw or to the return of
any part of the capital contribution of such Partner or to
receive property or assets other than cash from the
Partnership for any reason whatsoever.
(c)No Partner shall be entitled to priority over any
other Partner with respect to return of its capital
contribution, except to the extent expressly provided in
this Agreement.
(d)No interest shall be paid by the Partnership on
capital contributions (or on any Partner's Capital Account
balance), except to the extent expressly provided in this
Agreement.
(e)The General Partner shall not have any personal
liability for the repayment of any capital contribution of
any Limited Partner.
3.7Loans. In the event the General Partner shall
determine that funds are reasonably necessary for
maintaining and protecting the assets of the Partnership or
conducting its business, the General Partner shall be
authorized to borrow funds on behalf of the Partnership on
commercially reasonable terms from a commercial lending
institution or from one or more of the Partners or their
Affiliates without notification to any of the other Partners
and all or any portion of the Partnership Assets may be
pledged or conveyed as security for such indebtedness. In
the event that any Partner or any Affiliate of a Partner
shall loan money to the Partnership, the principal and
interest with respect to such loan shall be fully paid prior
to any distribution of cash to the Partners under the terms
of this Agreement unless such loan agreement or promissory
note contains a specific provision to the contrary. No
Partner shall be required to make any such loan. No such
loan shall increase any Partner's Partnership Interest. The
exercise and performance of the rights and obligations
created by each loan made hereunder are intended to be and
shall be deemed to be transactions between the Partnership
and one who is not a Partner.
SECTION FOUR
CAPITAL ACCOUNTS; RETURN OF CAPITAL
4.1Capital Accounts. A separate Capital Account
shall be maintained on the accounting books and records of
the Partnership for each Partner. Such Capital Accounts
shall be determined and maintained in strict accordance with
the definition of Capital Account set forth in Section Two.
4.2Return of Capital. If any return of capital in
money or property shall have been deemed to have been made
to a Partner prior to or subsequent to the termination of
the Partnership, and if, at the time of such return of
capital in money or property, there shall have been any
unpaid debts, taxes, liabilities or obligations which the
Partnership shall not have sufficient assets to meet, then,
if and only if required by the Act, each Partner (including
former Partners who may have received distributions or have
transferred their Partnership Interests) shall be obligated
to repay any such return of capital distributed to such
Partner (such repayments to be made in the same proportions
as such returns of capital had been made to all Partners),
to the extent necessary to discharge the liabilities of the
Partnership to all creditors who extended credit or whose
claims arose before such return of capital. All repayments
of returns of capital made pursuant to this Section 4.2 by
Partners shall be made within ten (10) days after the
General Partner shall have repaid the share apportioned to
the General Partner. Failure of any Partner or former
Partner to make repayment required under this Section 4.2
shall subject the defaulting Partner to payment of interest
on the amount due from such payment, at a rate equal to the
lesser of: (i) a rate equal to three percentage points above
the prime rate in effect from time to time as published in
the Midwest Edition of the Wall Street Journal; or (ii) the
maximum rate of interest then permitted by law, plus the
costs and expenses, including reasonable attorneys' fees, of
collection of such amounts.
SECTION FIVE
ALLOCATIONS OF PROFITS AND LOSSES
5.1Profits. After giving effect to the special
allocations set forth in Sections 5.3 and 5.4, the
Partnership's Profits for each Fiscal Year shall be
allocated to and among the Partners for accounting purposes
(including in particular for purposes of maintaining the
Partners' Capital Accounts) as follows:
(a)First, Profits shall be allocated to the General
Partner so as and to the extent necessary to offset Losses
previously allocated pursuant to Section 5.2(b), to the
extent of Losses not previously offset hereunder.
(b)Second, Profits shall be allocated to the Partners
so as and to the extent necessary to offset Losses
previously allocated pursuant to Section 5.2(a), to the
extent of, and in proportion to, Losses not previously
offset hereunder.
(c)Third, all remaining Profits shall be allocated to
and among the Partners in proportion to the number of Units
held by each of them on the last day of such Fiscal Year.
5.2Losses.
(a)General Rule. After giving effect to the special
allocations set forth in Sections 5.3 and 5.4, the
Partnership's Losses for each Fiscal Year shall for
accounting purposes (including in particular for purposes of
maintaining the Partners' Capital Accounts) be allocated to
and among the Partners in proportion to the number of Units
held by each of them on the last day of such Fiscal Year.
(b)Special Limitation. Notwithstanding the general
rule set forth in Section 5.2(a), no Losses shall be
allocated to any Limited Partner to the extent that such
allocation would create or enlarge an Adjusted Capital
Account Deficit. Any Losses which would be allocated to
such Limited Partner but for the preceding sentence shall
instead be allocated to the General Partner.
5.3Special Allocations. The following special
allocations shall be made in the following order:
(a)Minimum Gain Chargeback. Except as otherwise
provided in Section 1.704-2(f) of the Regulations,
notwithstanding any other provision of this Section 5.3, if
there is a net decrease in Partnership Minimum Gain during
any Fiscal Year, each Partner shall be specially allocated
items of Partnership income and gain for such Fiscal Year
(and, if necessary, subsequent Fiscal Years) in an amount
equal to such Partner's share of the net decrease in
Partnership Minimum Gain determined in accordance with
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 Sections 1.704-2(f)(6) and
1.704-2(j)(2) of the Regulations. This Section 5.3(a) is
intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(f) of the Regulations and
shall be interpreted consistently therewith.
(b)Partner Minimum Gain Chargeback. Except as
otherwise provided in Section 1.704-2(i)(4) of the
Regulations, notwithstanding any other provision of this
Section 5.3, if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to a Partner
Nonrecourse Debt during any Fiscal Year, each Person who has
a share of the Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in
accordance with Section 1.704-2(i)(5) of the Regulations,
shall be specially allocated items of Partnership income and
gain for such Fiscal Year (and, if necessary, subsequent
Fiscal Years) in an amount equal to such Person's share of
the net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(4).
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 Sections
1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This
Section 5.3(b) is intended to comply with the minimum gain
chargeback requirement in Section 1.704-2(i)(4) of the
Regulations and shall be interpreted consistently therewith.
(c)Qualified Income Offset. If any Limited Partner
unexpectedly receives any adjustments, allocations, or
distributions described in Section 1.704-1(b)(2)(ii)(d)(4),
Section 1.704-1(b)(2)(ii)(d)(5) or Section
1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of
Partnership income and gain shall be specially allocated to
each such Limited Partner in an amount and manner sufficient
to eliminate, to the extent required by the Regulations, the
Adjusted Capital Account Deficit of such Limited Partner as
quickly as possible, provided that an allocation pursuant to
this Section 5.3(c) shall be made only if and to the extent
that such Limited Partner would have an Adjusted Capital
Account Deficit after all other allocations provided for in
this Section 5.3 have been tentatively made as if this
Section 5.3(c) were not in the Agreement.
(d)Gross Income Allocation. If any Limited Partner
has a deficit Capital Account at the end of any Fiscal Year
which is in excess of the sum of the amount such Limited
Partner 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), each such Limited Partner shall be
specially allocated items of Partnership income and gain in
the amount of such excess as quickly as possible, provided
that an allocation pursuant to this Section 5.3(d) shall be
made only if and to the extent that such Limited Partner
would have a deficit Capital Account in excess of such sum
after all other allocations provided for in this Section 5
have been made as if Section 5.3(c) hereof and this Section
5.3(d) were not in the Agreement.
(e)Nonrecourse Deductions. Nonrecourse Deductions
for any Fiscal Year shall be allocated in the same manner as
Losses are allocated pursuant to Section 5.2(a).
(f)Partner Nonrecourse Deductions. Any Partner
Nonrecourse Deductions for any Fiscal 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 Section 1.704-2(i)(1).
(g)754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to
Code Section 734(b) or Code Section 743(b) is required,
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or
Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken
into account in determining Capital Accounts as the result
of a distribution to a Partner in complete liquidation of
his interest in the Partnership, the amount of such
adjustment to 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
gain or loss shall be specially allocated to the Partners in
accordance with their interests in the Partnership in the
event that Regulations Section 1.704-1(b)(2)(iv)(m)(2)
applies, or to the Partner to whom such distribution was
made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
5.4Curative Allocations. The allocations set forth
in Sections 5.3(a) through 5.3(g) (the "Regulatory
Allocations") are intended to comply with certain
requirements of the Regulations. It is the intent of the
Partners that, to the extent possible, all Regulatory
Allocations shall be offset either with other Regulatory
Allocations or with special allocations of other items of
Partnership income, gain, loss, or deduction pursuant to
this Section 5.4. Therefore, notwithstanding any other
provision of this Section 5 (other than the Regulatory
Allocations), the Partnership shall make such offsetting
special allocations of Partnership income, gain, loss or
deduction in whatever manner determined by the General
Partner to be appropriate so that, after such offsetting
allocations are made, each Partner's Capital Account balance
is, to the extent possible, equal to the Capital Account
balance such Partner would have had if the Regulatory
Allocations were not part of the Agreement and all
Partnership items were allocated pursuant to Sections 5.1
and 5.2. In exercising its discretion under this
Section 5.4, the General Partner shall take into account
future Regulatory Allocations under Sections 5.3(a) and
5.3(b) that, although not yet made, are likely to offset
other Regulatory Allocations previously made under Sections
5.3(e) and 5.3(f).
5.5Other Allocation and Accounting Rules.
(a)For purposes of determining the Profits, Losses,
or any other items allocable to any period, Profits, Losses,
and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General
Partner using any permissible method under Code Section 706
and the Regulations thereunder.
(b)To the extent permitted by Section 1.704-2(h)(3)
of the Regulations, the General Partner shall endeavor to
treat distributions of cash from the Partnership as having
been made from the proceeds of a Nonrecourse Liability or a
Partner Nonrecourse Debt only to the extent that such
distributions would cause or increase an Adjusted Capital
Account Deficit for any Partner.
5.6Tax Allocations.
(a)For federal income tax purposes, the Partners'
distributive shares of each item of Partnership income,
gain, loss, deduction, and credit shall be determined in a
manner that is consistent with the allocations of Profits,
Losses, and other items under Sections 5.1 through 5.5. The
Partners are aware of the income tax consequences of the
allocations made by this Section 5, and all Partners shall
be bound by the provisions of this Section 5 in reporting
their shares of Partnership income and loss for federal
income tax purposes.
(b)In accordance with Code Section 704(c) and the
Regulations thereunder, income, gain, loss, and deduction
with respect to any property contributed to the capital of
the Partnership shall, solely for tax purposes, be allocated
among the Partners so as to take account of any variation
between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial
Gross Asset Value. In the event the Gross Asset Value of
any Partnership asset is adjusted pursuant to the definition
of Gross Asset Value in Section Two, subsequent allocations
of income, gain, loss, and deduction with respect to such
asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes
and its Gross Asset Value in the same manner as under Code
Section 704(c) and the Regulations thereunder. Any
elections or other decisions relating to such allocations
shall be made by the General Partner in any manner that
reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section 5.6(b) are
solely for purposes of federal, state, and local taxes and
shall not affect, or in any way be taken into account in
computing, any Person's Capital Account or share of Profits,
Losses, other items, or distributions pursuant to any
provision of this Agreement.
SECTION SIX
DISTRIBUTIONS
6.1Distributions of Cash. It is anticipated that the
Partnership will not make regular distributions of cash to
the Partners. However, the General Partner may from time to
time decide that cash should be distributed to the Partners.
In such event, and subject to the limitations imposed by the
Act on the aggregate amount which may be distributed by the
Partnership at any given time, the Partnership shall dis-
tribute the amount of cash determined by the General Partner
at the time or times determined by the General Partner.
Each cash distribution made by the Partnership shall be made
to the Partners in proportion to the number of Units held by
each of them on the date of the distribution.
6.2Distributions in Kind. It is anticipated that the
Partnership will not make distributions of property to the
Partners. However, the General Partner may from time to
time decide that specific Partnership property other than
cash should be distributed to the Partners. In such event,
and subject to the limitations imposed by the Act on the
aggregate amount which may be distributed by the Partnership
at any given time, such property shall be valued and
distributed, based on value, to the Partners to whom, and in
the same proportions as, cash in an amount equal to the
value of such property would be distributed on the date such
property is distributed, and the manner in which each such
distribution is made shall be determined by the General
Partner.
6.3Distribution in Cash Only. Except as provided in
Section 10.2, no Partner in its capacity as a Partner shall
have the right to demand or receive property other than cash
from the Partnership for any reason whatsoever and no
Partner shall have the right to ▇▇▇ for partition of the
Partnership or of the Partnership's assets.
6.4Good Faith Distribution by General Partner. Upon
the good faith determination to distribute funds in
accordance with this Section 6, the General Partner shall
incur no liability on account of such distribution, even
though such distribution may have resulted in the
Partnership retaining insufficient funds for the operation
of its business, which insufficiency resulted in loss to the
Partnership or necessitated the borrowing of funds by the
Partnership.
SECTION SEVEN
RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNER
7.1Powers of the General Partner. In addition to the
powers granted to any General Partner under the Act and
other provisions of this Agreement, the General Partner
shall have the exclusive right and power to manage the
business and the affairs of the Partnership with all powers
necessary, advisable, or convenient to manage, control,
administer and operate the business and affairs of the
Partnership for purposes herein stated, to make all
decisions affecting such business and affairs, and to do all
things which are necessary or desirable in the conduct of
the business and affairs of the Partnership. The rights and
powers of the General Partner shall include, without
limitation, for Partnership purposes, the powers to:
(a)Represent the Partnership in all administrative
and judicial proceedings involving federal income tax
matters as the "Tax Matters Partner." In connection
therewith, the powers of the General Partner shall include,
but are not limited to, the power to:
(i)appoint an attorney-in-fact to represent
the Partnership in such proceeding;
(ii)engage in any activities enumerated in
subchapter C of chapter 63 of the Internal Revenue Code;
(iii)employ attorneys, accountants,
appraisers, consultants, and such other persons as deemed
appropriate;
(iv)make any and all elections for federal,
state, and local tax purposes, including, without
limitation, any election if permitted by applicable law:
(a) to adjust the basis of Partnership Assets pursuant to
Code Sections 754, 734(b) and 743(b), or comparable
provisions of state or local law; and (b) to extend the
statute of limitations for assessment of tax deficiencies
against Partners with respect to adjustments to the
Partnership's federal, state or local tax returns; and
(v)represent the Partnership and Partners
before taxing authorities or courts of competent
jurisdiction in tax matters affecting the Partnership and
Partners in their capacity as Partners, and to execute any
agreements or other documents relating to or affecting such
tax matters including agreements or other documents that
bind the Partners with respect to such tax matters or
otherwise affect the rights of the Partnership or Partners.
The Tax Matters Partner shall provide all Partners
affected by an Internal Revenue Service Partnership level
proceeding with such notice of the proceeding as is required
by the Code. The preceding sentence shall be deemed to be
satisfied by mailing such notice to each such Partner's last
known address.
The Tax Matters Partner is entitled to reimbursement
for all expenses relating to its representation of the
Partnership, which may include, but are not limited to,
expenses of persons employed by the Partnership in
connection with an examination, audit, administrative or
judicial proceeding relating to federal income tax matters;
(b)Employ, retain or otherwise secure or enter into
contracts with consultants, agents or firms to assist in the
business of the Partnership, all on such terms for such
consideration as the General Partner deems advisable, such
consideration to be a normal operating expense;
(c)Pay all operating costs and expenses associated
with the ownership of Partnership Assets including without
limitation, insurance, ad valorem taxes, maintenance costs,
accounting and legal fees, and principal and interest due on
any indebtedness encumbering the assets of the Partnership;
(d)Acquire, contract to acquire or enter into an
option to acquire, sell, exchange, or convey title to, and
to license, contract to sell or grant an option for the sale
of all or any portion of the Partnership Assets, and any
mortgage or leasehold interest or other property which may
be acquired by the Partnership upon a transfer of the
Partnership Assets;
(e)Borrow money and, if security is required there-
for, to mortgage or subject to any other security device any
portion of the Partnership Assets, to obtain replacements of
any mortgage, security deed or other security device, and to
prepay, in whole or in part, refinance, increase, modify,
consolidate, or extend any mortgage, security deed or other
device, all of the foregoing at such terms and in such
amount as it deems in its absolute discretion, to be in the
best interest of the Partnership;
(f)Sell additional Partnership Interests to
additional limited partners for such price(s) as may be
determined by the General Partner, in its sole discretion;
(g)Enter into joint venture agreements, trust agree-
ments or other fiduciary agreements or arrangements for the
purpose of holding legal or equitable title to the
Partnership Assets and to lease all or any portion of any
real property owned by the Partnership without limit as to
the term thereof, whether or not such term (including
renewal terms) will extend beyond the date of termination of
the Partnership, and whether any property so leased is to be
occupied by the lessee or, in turn, subleased in whole or in
part to others; provided that prior to acquiring more than a
de minimis interest in any property which is subject to an
allowance for depreciation or is otherwise amortizable, or
otherwise allows the Partners to claim such deductions, the
General Partner will consult with tax counsel for the
Partnership to determine whether the Partnership Agreement
needs to be amended;
(h)Form other partnerships (designating the Partner-
ship as a general or limited partner thereof), limited
liability companies, and other entities, including the
entities which will own the Day 2 Venture Units and Day 3
Venture Units, and contribute any and all Partnership Assets
thereto;
(i)Acquire and enter into any contract of insurance
which the General Partner deems necessary and proper for the
protection of the Partnership, for the conservation of its
assets, or for any purpose beneficial to the Partnership;
(j)Invest in short-term government obligations, cer-
tificates of deposit or tax-exempt obligations such funds of
the Partnership as are temporarily not required in its
opinion for use in conducting the business of the
Partnership;
(k)Execute any guaranty or accommodation endorsement
reasonably incident to the conduct of the business of the
Partnership;
(l)Open and maintain bank accounts for the deposit of
Partnership funds, with withdrawals to be made upon such
signature or signatures as the General Partner may
designate;
(m)Obtain licenses to use the Partnership
Intellectual Property that is not owned by the Partnership
and license the Venture Units to use the Partnership
Intellectual Property;
(n)Execute, acknowledge and deliver any and all in-
struments, documents, or agreements to effectuate the
foregoing; and
(o)By way of extension of the foregoing and not by
way of limitation thereof, the General Partner shall possess
all of the powers and rights of partners in a partnership
without limited partners under the Act as amended.
7.2Dealing with Partnership by General Partner. The
fact that the General Partner is directly or indirectly
interested in or connected with any person, firm or
corporation employed by the Partnership to render or perform
a service or from or to which or whom the Partnership may
buy or sell merchandise, services, materials or other
property, shall not prohibit the General Partner, on behalf
of the Partnership, from employing such person, firm or
corporation (including the General Partner) or from
otherwise dealing with them. Each Limited Partner consents
to the payment of fees, remuneration, or other payments paid
for services in accordance with the Shareholders' Agreement.
All transactions made pursuant to this Section 7.2 between
the Partnership and either a Partner or an Affiliate of a
Partner are intended to be and shall be deemed to be
transactions between the Partnership and one who is not a
Partner. Nothing contained in this Section 7.2 shall
restrict the right of the General Partner or any other
Person to receive the income or distributions to which they
would otherwise be entitled to hereunder as a Partner.
7.3Authority of General Partner. No person dealing
with the General Partner shall be required to determine the
General Partner's authority to make any commitment or
undertaking on behalf of the Partnership nor to determine
any fact or circumstance bearing upon the existence of its
authority. No purchaser of any property or interest owned
by the Partnership shall be required to determine the right
to sell and the authority of the General Partner or its
designee to sign and deliver on behalf of the Partnership
any such instrument of transfer, or to see to the
application or distribution of revenues or proceeds paid or
credited in connection therewith.
7.4Duties of the General Partner. The General
Partner's obligations shall include the following:
(a)Manage the Partnership affairs;
(b)Have fiduciary responsibility for the safekeeping
and use of all funds of the Partnership;
(c)Render complete annual reports to the Limited
Partners and any required governmental agency;
(d)Furnish Limited Partners with the reports and
information specified in Section 13.4 hereof;
(e)Maintain complete records of Partnership assets,
including information and reports of architects, appraisers,
engineers, attorneys, accountants or other professionals;
(f)Maintain complete books of account regarding Part-
nership operations and business affairs;
(g)Keep all records of the Partnership available for
inspection and audit by any Limited Partner or its
representative, at the expense of the Limited Partner, upon
reasonable notice during business hours at the principal
place of business of the Partnership; and
(h)Perform all other actions necessary to ensure that
the Partnership complies with the provisions of the Act and
other applicable law.
7.5Removal of the General Partner. The General
Partner may be removed, and a new General Partner may be
appointed, only by a unanimous vote of all of the Partners.
The General Partner may not be removed without its consent.
The Partnership shall hold the removed General Partner
harmless from any and all liabilities, including attorney's
fees, arising from and after the effective date of its ter-
mination of its interest, which liabilities are not
attributable to fraud, gross negligence or willful
misconduct of the General Partner prior to or on such
effective date. A General Partner that is removed hereby
shall be entitled, at its sole and absolute discretion, to
either (i) convert its Partnership Interest to that of a
special Limited Partner, having the same rights to
allocations of Profits, Losses, distributions and the
capital of the Partnership as prior to such conversion (with
such conversion occurring automatically upon the making of
such election), or (ii) receive payment for its Partnership
Interest, in complete termination thereof, in an amount
equal to its fair market value, with payment due upon
termination.
7.6Liability and Indemnification of the General
Partner.
(a)Liability Generally. The General Partner shall
not be liable to the Limited Partners because any taxing
authorities disallow or adjust any deductions or credits in
the Partnership or a Limited Partner's income tax returns,
nor shall the General Partner have any personal liability
for the repayment of capital contributions of the Limited
Partners except as provided in this Agreement. In addition,
the General Partner shall not be liable, responsible or
accountable in damages or otherwise to any of the Limited
Partners or to the Partnership for any act or omission
performed or omitted by it in good faith, and in the
reasonable belief that such act or omission was within the
scope and authority granted to it by this Agreement.
(b)No Liability. Neither the General Partner nor its
agents shall be liable to the Limited Partners for any
actions taken by or on behalf of the General Partner,
including the execution of a settlement agreement with the
Internal Revenue Service so long as the General Partner acts
in good faith in representing the interest of the
Partnership and Limited Partners. The preceding sentence
does not, however, excuse the General Partner from the
notice requirements stated at Section 7.1(a).
(c)Indemnification. The Partnership shall and does
hereby indemnify and save harmless the General Partner and
its successors and assigns from and against loss, damage, or
expenses incurred by them on behalf of or in connection with
any act or omission described in the preceding paragraph,
including reasonable costs and expenses of litigation and
appeal (including reasonable fees and expenses of attorneys
engaged by the General Partner and all applicable sales or
use taxes imposed on such fees and costs), in defense of
such act or omission, without relieving the General Partner
of liability for fraud, bad faith, gross negligence or
malfeasance, or failure to comply in any material respect
with any representation, warranty, covenant, condition or
other agreement herein contained of the General Partner.
The satisfaction of any indemnification and any saving
harmless shall be from and limited to Partnership Assets and
no Partners shall have any personal liability on account
thereof.
7.7Transferability of General Partner's Interest.
Except as otherwise provided in this Agreement and in
addition to any other restrictions set forth herein on the
transfer of the General Partner's Partnership Interest, the
General Partner shall not, without the consent of the
Limited Partners holding at least fifty-one percent (51%) of
the Units, sell, assign, transfer, or otherwise dispose of,
in whole or in part, its Partnership Interest or admit an
additional General Partner, and any attempt by the General
Partner to do so in violation of this Agreement shall be
null and void ab initio. If all or any part of the General
Partner's Partnership Interest is transferred in violation
of this Agreement, the transferee shall be a mere assignee,
and not a substituted Partner, with respect to the interest
that is transferred.
SECTION EIGHT
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
8.1Liability of Limited Partners. Except as provided
in the Act, none of the Limited Partners shall have any
personal liability with respect to the liabilities or the
obligations of the Partnership.
8.2Management of Business. The Limited Partners, as
such, shall not take part in the management of the business
of the Partnership, transact any business for the
Partnership or have the power to sign for or to bind the
Partnership to any agreement or document, said powers being
vested solely and exclusively in the General Partner. No
action taken or attempted to be taken by one or more of the
Limited Partners under the provisions of Sections 7, 10 or
14 or this Section 8 shall be effective or binding upon the
Partnership (i) if a court of competent jurisdiction in the
State of Delaware has held that the taking of such action
would result in the loss of limited liability of the Limited
Partners, or (ii) if the Partnership receives an opinion of
counsel (obtained by any Partner), satisfactory to all of
the Limited Partners, to the effect that the taking of such
action would result in the loss of limited liability of the
Limited Partners.
8.3Duty to Account for Profits. Each Limited Partner
shall be a trustee for the Partnership with respect to any
profit derived by it without the consent of the General
Partner or the Limited Partners from any transaction
connected with the formation, conduct or liquidation of the
Partnership or from any use of Partnership Assets.
8.4Rights of Limited Partners. Each Limited Partner
shall be entitled to:
(a)The rights accorded to limited partners by the
Act, to the extent that such rights cannot be eliminated by
agreement of the Partners;
(b)All rights and powers of Limited Partners as are
set forth elsewhere in this Agreement;
(c)Be indemnified in respect to payments made and
personal liabilities reasonably incurred by it for the
preservation of the Partnership business or property;
(d)Vote its Units as to any amendments to this
Agreement (other than amendments to admit additional limited
partners to the extent such amendments do not affect the
Limited Partner's interest in allocations and distributions
under Sections 5 and 10) or on any other matter which the
General Partner may put to a vote of the Limited Partners;
(e)Have the Partnership books kept at the principal
office of the Partnership, and at all reasonable times to
have access to and the right to inspect and copy any of
them; and
(f)Have, upon reasonable notice, true and full infor-
mation regarding all things affecting the Partnership.
SECTION NINE
TRANSFER OF PARTNERSHIP INTERESTS
9.1Transfer of Interests. Partnership Interests are
transferable only on the books of the Partnership. Each
Limited Partner agrees that no transferee of a Limited
Partner shall have the right to be substituted as a Limited
Partner in the place of his transferor except with the
written consent of the General Partner, which consent may be
withheld for any reason if such transfer was an involuntary
transfer and may not be withheld if such transfer was a
voluntary transfer in compliance with the Shareholders'
Agreement. A transferee admitted as Limited Partner is
referred to herein as a "Substituted Limited Partner." No
such substitution or attempted substitution shall be valid
and enforceable, whether or not the Limited Partner's
Partnership Interests are transferred or are attempted to be
transferred in connection therewith, unless the General
Partner has given such written consent. Subject to the
provisions of this Agreement or the Act, the death,
withdrawal, insanity, bankruptcy, or substitution of any
Limited Partner shall not interrupt the continuity of or
cause the termination or dissolution of the Partnership.
9.2Limitation Upon Transfer of Partnership Interests
Therein.
(a)Securities Laws. Partnership Interests shall be
nontransferable and nonassignable unless the registration
provisions of the Securities Act of 1933 (the "1933 Act")
have been complied with through registration, or an
exemption therefrom, and unless made in compliance with the
registration provisions of the securities laws of the states
where interests are offered or sold, or exemptions
therefrom. Furthermore, as a condition precedent to any
assignment or other transfer of any interest in the Partner-
ship, the General Partner may require an opinion of counsel
satisfactory to the General Partner that such assignment or
transfer will be made in compliance with the registration
provisions of the 1933 Act, or an exemption therefrom, and
the securities laws of the states where interests are
offered or sold, or exemptions therefrom. The assignor or
transferor will be responsible for paying the legal fees for
any opinion required by this Section. Any transfer, pledge
or other disposition of Partnership Interests in
contravention of these restrictions is void. Each Limited
Partner agrees to accept the foregoing restrictions on the
transferability of Partnership Interests and assignment of
interests therein and abide by the provisions thereof, and
agrees that the following legend shall be placed on each
certificate of interest evidencing a Partnership Interest,
if any:
THE PARTNERSHIP INTERESTS EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR THE LAWS OF
ANY STATE AND WERE SOLD PURSUANT TO EXEMPTIONS
FROM REGISTRATION UNDER THE ACT AND SUCH STATE
LAWS. THE PARTNERSHIP INTERESTS MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE PARTNERSHIP
INTERESTS UNDER THE ACT AND SUCH STATE LAWS AS MAY
BE APPLICABLE, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE PARTNERSHIP THAT SUCH
REGISTRATION IS NOT REQUIRED.
(b)Tax Rules. No transfer, assignment or encumbrance
of Partnership Interests shall be made if such transfer or
other event would, in the opinion of counsel for the
Partnership, result in the Partnership being considered to
have been terminated under the provisions of the Code. In
addition, the General Partner has the right to refuse to
recognize any transfer of Partnership Interests in a
secondary market or substantial equivalent thereof.
(c)Shareholders' Agreement. No transfer or
assignment of Partnership Interests shall be made except in
accordance with the Shareholders' Agreement.
9.3Holders Who are not Limited Partners. A person
who has possession of a Partnership Interest that has been
transferred but who has not been admitted as a Substituted
Limited Partner as provided in Section 9.1 shall be entitled
solely (a) to allocations of Profits and Losses and
distributions as provided in ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇ -
▇▇▇▇▇▇▇ ▇▇.
9.4Treatment of Transferor. A person who transfers
or attempts to transfer all or any part of a Partnership
Interest shall, with respect to any interest that is
effectively transferred, cease to have any right, title, or
interest to or in the Partnership and, with respect to any
such interest that is not effectively transferred, shall
cease to be a Partner and shall be a mere assignee.
9.5General Conditions on Disposition.
(a)All costs and expenses incurred by the Partnership
in connection with any disposition of any Limited Partner's
Partnership Interest pursuant to this Section and/or in
connection with another person becoming a transferee or
Substituted Limited Partner in the Partnership in respect of
such interest including any filing, recording, and
publishing costs and the fees and disbursements of counsel
shall be paid by and be the responsibility of the Limited
Partner disposing of such interest.
(b)If the Partnership Interest of a Limited Partner
is effectively transferred, the Partnership's Profits,
Losses, and other items shall for accounting and tax
purposes be allocated between the transferring Limited
Partner and the transferee using any reasonable method of
allocation selected by the General Partner. A transferee
of, or Substituted Limited Partner with respect to, a
Limited Partner's Partnership Interest shall be entitled to
receive distributions from the Partnership with respect to
such interest only after the effective date of such
assignment. The transfer by a Limited Partner of any
interest shall become effective on the first day of the
month following satisfaction of the requirements set forth
in this Section 9.5.
9.6Survival of Liabilities. No substitution of an
assignee as a Limited Partner shall operate to relieve the
assignor of any liabilities arising under the Act.
9.7Withdrawal. No Partner may withdraw from the
Partnership. Any Partner that withdraws from the
Partnership in breach of this Agreement shall be liable to
the Partnership for all of the direct and indirect damages
caused by such withdrawal.
SECTION TEN
DISSOLUTION, TERMINATION
10.1Dissolution. It is the intention of the Partners
that the business of the Partnership be continued by the
Partners pursuant to the provisions of this Agreement until
such time as the occurrence of an "Event of Dissolution" (as
hereinafter defined), at which time the Partnership shall
dissolve. The occurrence of any of the following shall be
deemed an "Event of Dissolution":
(a)The sale of all or substantially all of the assets
of the Partnership;
(b)The decision by all of the Partners that the Part-
nership should be dissolved;
(c)The date on which the Partnership or the General
Partner shall suffer a bankruptcy;
(d)December 31, 2097;
(e)The dissolution, removal, or withdrawal of the
General Partner, unless there is a remaining General Partner
that shall elect to continue the business of the Partnership
(with such right to continue being expressly granted hereby)
or, if there is no remaining General Partner, unless all
remaining Partners consent in writing to the admission of a
new General Partner not later than ninety (90) days after
the occurrence of such event; provided, in the event the
Partnership is continued under this Section 10.1(e), the
previous General Partner's Partnership Interest shall, at
such time, be converted to a special class of Limited
Partner having the same rights to allocations of Profits,
Losses, distributions and the capital of the Partnership as
prior to such conversion (with such conversion occurring
automatically upon the making of such election and upon such
holder executing an agreement to join in this Agreement);
(f)The occurrence of a cause of dissolution as set
forth in the Act, and limited by Sections 10.1(a) through
(e) hereof.
10.2Wind-Up. Upon the dissolution of the Partnership,
the General Partner shall make a final accounting of the
business and affairs of the Partnership and shall proceed
with reasonable promptness to liquidate the business,
property and assets of the Partnership and to distribute the
proceeds in the following order of priority:
(a)To the payment of expenses of any sale, disposi-
tion or transfer of the Partnership Assets of the
dissolution and liquidation of the Partnership.
(b)To the payment of just debts and liabilities of
the Partnership (including any to Partners), in the order of
priority provided by law.
(c)To the Partners in an amount equal to their Capi-
tal Accounts, after giving effect to all contributions,
distributions and allocations for all periods.
10.3Compliance With Regulations. In the event the
Partnership is "liquidated" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), then distributions
shall be made pursuant to this Section 10 to the Partners
who have positive Capital Accounts in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(2).
10.4No Obligation to Restore Deficit Capital Account
Balance. In the event a Limited Partner's Capital Account
has a deficit balance (after giving effect to all
contributions, distributions and allocations for all taxable
years, including the year during which the dissolution
occurs), notwithstanding any custom or rule of law to the
contrary, such Limited Partner shall have no obligation to
make any contribution to the Partnership and the negative
balance of such Limited Partner's Capital Account shall not
be considered an asset of the Partnership nor a debt owed by
such Limited Partner to the Partnership or to any other
Person for any purpose whatsoever.
10.5Temporary Retention of Liquidation Proceeds. In
the discretion of the General Partner, a pro rata portion of
the distributions that would otherwise be made to the
Partners pursuant to this Section may be:
(i)distributed to a trust established for
the benefit of the Partners for the purposes of liquidating
Partnership Assets and collecting amounts owed to the
Partnership or the Partners arising out of or in connection
with the Partnership. The assets of any such trust shall be
distributed to the Partners from time to time, in the
discretion of the trustee of such trust, in the same
proportions as the amount distributed to such trust by the
Partnership would otherwise have been distributed to the
Partners pursuant to this Agreement; or
(ii)withheld 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 amounts shall be distributed to the Partners from
time to time in the discretion of the General Partner as
such liabilities are paid or settled.
10.6Distributions In Kind. Notwithstanding anything
to the contrary in Section 10.2, if the Partnership at the
time of its dissolution owns any Intellectual Property that
utilizes the words "Planet Hollywood" or any similar words
or any logos or marks that are substantially similar to
logos or marks owned by PHT or its Affiliates, then such
Intellectual Property shall upon the winding up of the
Partnership be distributed in kind to PHT. Similarly, and
notwithstanding anything to the contrary in Section 10.2, if
the Partnership at the time of its dissolution owns any
Intellectual Property that utilizes the words "American
Multi-Cinema" or "AMC" or any similar words or any logos or
marks that are substantially similar to logos or marks owned
by AMCPH or its Affiliates, then such Intellectual Property
shall upon the winding up of the Partnership be distributed
in kind to AMCPH. If Intellectual Property is distributed
in kind to both PHT and AMCPH pursuant to this Section 10.6,
then the property distributed to each shall be deemed to be
equal in value.
10.7Control of Dissolution and Winding-up. The wind-
up of the affairs of the Partnership shall be conducted by
the General Partner. In the event there is no General
Partner, then the wind-up of the affairs of the Partnership
shall be conducted by the Partner so nominated by Partners
who then own a majority of the Units (the "Liquidating
Partner"). In liquidating the assets of the Partnership,
all tangible assets of a saleable value shall be sold at
such price and terms as the General Partner (or the
Liquidating Partner) determines to be fair and equitable.
Any Partner may purchase such assets at such sale. A
reasonable time shall be allowed for the orderly liquidation
of the assets of the Partnership and the discharge of
liabilities to creditors to minimize the losses that might
otherwise occur upon liquidation. Upon the conclusion of
the wind-up of the affairs of the Partnership, the
Partnership shall terminate.
10.8Deemed Distribution and Recontribution.
Notwithstanding any other provisions of this Section 10, in
the event the Partnership is liquidated within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(g) but no Event of
Dissolution has occurred, the Partnership Assets 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, solely for federal income tax
purposes, the Partnership shall be deemed to have
distributed the Partnership Assets in kind to the Partners,
who shall be deemed to have assumed and taken subject to all
Partnership's liabilities, all in accordance with their
respective Capital Accounts. Immediately thereafter, the
Partners shall be deemed to have recontributed the
Partnership Assets in kind to the Partnership, which shall
be deemed to have assumed and taken subject to all such
liabilities.
10.9Rights of Partners. Except as otherwise provided
in this Agreement, each Partner shall look solely to the
assets of the Partnership for the return of his Capital
Contributions and shall have no right or power to demand or
receive property other than the distributions described
herein. No Partner shall have priority over any other
Partner as to the return of his Capital Contributions,
distributions, or allocations unless otherwise provided in
this Agreement.
10.10Division of Venture Units. Unless otherwise
agreed by the Partners, this Section 10.10 shall govern the
division of the Venture Units of the Partnership upon
dissolution:
(a)The Partnership shall distribute to AMCPH all of
the Partnership's interests in AMC Consolidated Entities
and to PHT all of the Partnership's interests in the PH
Consolidated Entities.
(b)The Management Agreements shall terminate and in
their place shall be new management agreements in the then
current form generally used by each Limited Partner or its
Affiliates with respect to management services of the type
being provided pursuant to the respective Management
Agreement; provided, that such new management agreements
shall be on commercially reasonable terms for similar
facilities and services.
(c)The Master License Agreements shall be amended to
reflect (i) AMCPH as the licensee for purposes of the
operation of the Venture Units distributed to AMCPH, (ii)
PHT as the licensee for purposes of the operation of the
Venture Units distributed to PHT, (iii) that no additional
facilities utilizing the intellectual property rights
licensed by the Master License Agreements may be developed
or operated by AMCPH, PHT or their Affiliates pursuant to
the Master License Agreements, and (iv) that the exclusive
nature of the license granted by the terms of the Master
License Agreements shall terminate.
(d)The Sublicense Agreements shall terminate;
provided, that, with respect to the Day 1 Venture Units, the
operator thereof shall enter into a license agreement with
PHT or its Affiliates similar to the Day 1 Venture Unit
Sublicense Agreement, except that such agreement shall
provide for a royalty equal to one-half the royalty provided
for in the Day 1 Venture Unit Sublicense Agreement.
SECTION ELEVEN
OTHER BUSINESS
No Partner shall be required to devote its entire time
or attention to the business of the Partnership or, in any
event, more time or attention than shall be reasonably
required to carry out its obligations under this Agreement.
SECTION TWELVE
POWER OF ATTORNEY
12.1Granting General Partner Power of Attorney. Each
Limited Partner, by executing this Agreement or a
counterpart thereof, irrevocably constitutes and appoints
the General Partner as its true and lawful attorney-in-fact
and agent with full power and authority to act in such
Limited Partner's name, place, and stead to effect the
purposes of the Partnership, including the execution,
acknowledgment, delivery, filing and recording of all
certificates, documents, deeds, bills of sale, assignments
and other instruments of conveyance, leases, contracts, loan
documents and all other documents which the General Partner
deems necessary or reasonably appropriate to achieve the
following:
(a)To qualify the Partnership as a Limited Partner-
ship under the Act; and
(b)To effect a modification of the Partnership or an
amendment of this Agreement without the consent of the
Limited Partners:
(i)to ensure the continuation of
Partnership tax status, provided however that, in the
opinion of counsel to the Partnership, such amendment does
not adversely affect in any way the rights or interests of
any of the Limited Partners;
(ii)to cure any ambiguity and to correct or
supplement any inconsistent provision in this Agreement; or
(iii)when such modification or amendment
is permitted or required under the terms of this Agreement;
or
12.2Power of Attorney.
(a)The power of attorney granted herein:
(i)is a special power of attorney and shall
be deemed to be coupled with an interest, shall be
irrevocable, and shall survive death, incompetency, or legal
disability of a Limited Partner;
(ii)may be exercised by the General Partner
for each Limited Partner by listing any or all of the
Limited Partners required to execute any such instrument
with a signature of said General Partner acting as
attorney-in-fact for any or all of the Limited Partners; and
(iii)shall survive the delivery of an
assignment by a Limited Partner of the whole or a portion of
its Partnership Interest.
(b)Each of the agreements, certificates, or other
documents made pursuant to the power of attorney granted
herein shall be in such form as counsel for the General
Partner shall deem appropriate. The powers herein conferred
to make agreements, certificates, and other documents shall
be deemed to include the powers to sign, execute,
acknowledge, swear to, verify, deliver, file, record and
publish the same. The General Partner shall notify the
Limited Partners after every time it utilizes this power of
attorney.
SECTION THIRTEEN
BOOKS OF ACCOUNT AND PARTNERSHIP RECORDS
13.1Books of Account. The General Partner shall keep
and maintain, or cause to be maintained, complete and
accurate books, records and accounts of the Partnership.
Such books shall be kept on the basis of a calendar year
using the accrual method of accounting and shall be closed
and balanced at the end of each year. An accounting of all
types of receipts, income, profits, costs, expenses and
losses arising out of or resulting from the business of the
Partnership shall be made by the General Partner annually as
of the end of each Fiscal Year, and also upon termination of
this Agreement. The expense of maintaining the books of
account shall be an expense of the Partnership. All
decisions as to accounting and tax matters (including
elections which the Partnership is permitted to make under
the Code) shall be made by the General Partner.
13.2Inspection. The books, records and accounts of
the Partnership, together with executed copies of this
Agreement and of the Certificate and any amendments to
either document, shall be kept at all times at the principal
office of the Partnership. All Partners and their duly
authorized representatives shall have the right to examine
such books, records and accounts at any and all reasonable
times and to make copies thereof or extracts therefrom.
13.3Bank Accounts. The General Partner shall be
responsible for seeing that one or more accounts are
maintained in a bank which is a member of the Federal
Deposit Insurance Corporation, which accounts shall be used
for the payment of the disbursements properly chargeable to
the Partnership, and in which shall be deposited the
revenues received from the operation of the Partnership. In
addition, there shall be deposited in said accounts all
amounts borrowed from third parties. All such revenues and
amounts required by this Section to be deposited in said ac-
counts, shall be and remain the property of the Partnership,
and shall be received, held and disbursed by the General
Partner to be applied only for Partnership purposes. The
General Partner shall designate the authorized signatories
for all such accounts.
13.4Reports.
(a)Tax Information. Within seventy-five (75) days
after the end of the Partnership's fiscal year, the General
Partner will use its best efforts to furnish each Partner
with all information necessary for the preparation of each
of the Limited Partner's Federal and state income tax
returns.
(b)Financial Statements. Within ninety (90) days
after the end of each fiscal year, the General Partner shall
provide the Limited Partners with a balance sheet and
related statement of profit and loss for such year.
SECTION FOURTEEN
AMENDMENTS
14.1General Rule. Except for amendments permitted by
Section 11, this Agreement may be amended only with the
written consent of the General Partner and those Limited
Partners holding a majority of the Units held by the Limited
Partners. The General Partner may, and at the request of
any Limited Partner shall, submit to the Limited Partners,
in writing by registered or certified mail, the text of any
proposed amendment to this Agreement and a statement by the
proposer of the purpose of any such amendment. The General
Partner shall include in any submission its views as to the
proposed amendment. Any such amendment shall be adopted if,
within ninety (90) days after the mailing of such amendment
to all Partners, the General Partner has consented to such
amendment and has further received written approval
(including a telegraph or facsimile message) thereof from
Limited Partners that hold a majority of the Units held by
the Limited Partners. A written approval may not be
withdrawn or voided once it is filed with the General
Partner. A Limited Partner filing a written objection may
thereafter file a valid written approval. The date of
adoption of an amendment pursuant to this Section 14 shall
be the date set forth in the amendment for the adoption, or
if there is no such date, the date on which the General
Partner shall have received the requisite written approvals.
Any proposed amendment which is not adopted may be
resubmitted. In the event any proposed amendment is not
adopted, any written approval received with respect thereto
shall be void and shall not be effective with respect to any
resubmission of the proposed amendment.
14.2Unanimous Consent Requirement. Notwithstanding
the foregoing provisions of this Section 14, no amendment,
without the prior written approval of all Partners, may (a)
enlarge the obligations of any Partner under this Agreement
without said Partner's written consent, (b) enlarge the
liability of the General Partner to the Limited Partners
without the General Partner's written consent, (c) amend
this Section 14, (d) amend any provision relating to the
removal of the General Partner, (e) except with regard to
the admission of additional limited partners as provided in
Section 7.1, amend any provisions concerning cash
distributions or allocation of Profits and Losses (except
pursuant to the authority granted to the General Partner
under Section 4, with regard to Capital Accounts), or (f)
alter the Partnership in such manner as will result in the
Partnership no longer being classified as a partnership for
Federal income tax purposes.
SECTION FIFTEEN
GENERAL PROVISIONS
15.1Relationship. Nothing contained in this Agreement
shall be deemed or construed to constitute any Partner as a
general partner, employee or agent of any other Partner,
other than in connection with activities included within the
purpose and scope of the Partnership as set forth herein and
subject to limitations upon same, as set forth herein.
15.2Meetings of Partners. Any Partner may cast his
vote on any matter which may be put to a vote of the
Partners by personally casting said vote, by written proxy
or by written consent granted in writing. Meetings of all
Partners may be called by the General Partner in its
discretion, after ten (10) days written notice to all
Partners.
15.3Entire Agreement. This Agreement sets forth all
the promises, covenants, agreements, conditions and
understandings between the parties hereto relating to the
subject matter hereof. However, the parties are
contemporaneously herewith entering into other contracts
relating to the Venture Units and related matters, and this
Agreement does not supersede such other contracts or any
future contracts dealing with similar subject matter.
15.4Binding Effect; No Assignment. This Agreement
shall be binding upon the parties hereto, their heirs,
administrators, transferees, successors and assigns. No
party may assign or transfer its interests herein, or
delegate its duties hereunder, except as expressly provided
herein; provided, however, that each Partner may assign its
Partnership Interest to any other party in which it owns a
majority of the equity interest as long as such entity shall
agree to be bound by the terms of this Agreement.
15.5No Waiver. No waiver of any provision of this
Agreement shall be effective unless it is in writing and
signed by the party against whom it is asserted, and any
such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a
continuing or future waiver.
15.6Notices. Any notice, consent, or other com-
munication required or permitted by this Agreement shall be
sufficient if made in writing, signed by the communicator,
and delivered to a Partner personally or by mailing the same
postage prepaid by registered or certified mail, return
receipt requested, to a Partner at its address as set out in
the Partnership's records. Each such communication shall be
deemed to have been received by a person when: delivered
to such person; sent by telecopy to such person at a
telecopy number provided by such person to the Partnership
for notice purposes; on the fifth day after deposit in the
United States mail, postage prepaid and certified (return
receipt requested), addressed to such person at an address
provided by such person to the Partnership for notice
purposes; or on the first day after proper and timely
deposit, freight prepaid or with arrangements for payment
made in advance, with a nationally recognized next-day
delivery service providing next-day service to the location
of the recipient, addressed to such person at an address
provided by such person to the Partnership for notice
purposes. Any person may change its address or telecopy
number or both by notice to the Partnership.
(a)Partnership distributions of cash or property, if
any, shall be made in the manner determined by the General
Partner, but it shall be sufficient if they are made by
mailing the same to the Partners at their addresses as set
out in the Partnership's records.
15.7Counterparts. This agreement and any amendments
may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together will
constitute one and the same instrument.
15.8Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of the
Agreement.
15.9Governing Law. This Agreement is governed by and
shall be construed in accordance with the laws of the State
of Delaware, excluding any conflict-of-laws rule or
principle that might refer the governance of the
construction of this Agreement to the law of another
jurisdiction.
15.10Further Assurances. The parties hereto agree
that they will execute and deliver such further instruments
and do such further acts and things as may be reasonably
required to carry out the intent and purposes of this Agree-
ment.
15.11Litigation. The General Partner shall defend
and prosecute such legal or equitable actions as it deems
necessary to enforce or protect the interests of the
Partnership, and the expense of doing so shall be an
operating cost of the Partnership.
15.12Litigation Among Partners. If any party
hereby is required to engage in litigation against any other
party hereto, either as plaintiff or as defendant, in order
to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment
in favor of such party ("Prevailing Party"), then the party
or parties against whom said final judgment is obtained
shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing
Party in so enforcing or defending its or his rights
hereunder, including, but not limited to, all reasonable
attorneys' fees and court costs and other expenses incurred
throughout all negotiations, trials or appeals undertaken in
order to enforce the Prevailing Party's rights hereunder.
15.13Remedies. Each party hereto recognizes and
agrees that the violation of any term, provision or
condition of this Agreement may cause irreparable damage to
the other parties which may be difficult to ascertain, and
that the award of any sum of damages may not be adequate
relief to such parties. Each party, therefore, agrees that,
in addition to the remedies available in the event of a
breach of this Agreement, any other party shall have a right
to equitable relief including, but not limited to, the
remedy of specific performance.
15.14Representations and Warranties. Each Partner
hereby represents to the other Partners as follows:
(a)Such Partner is a corporation duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has the power and
authority to own its property and carry on its business as
owned and carried on at the date hereof and as contemplated
hereby. Such Partner is duly licensed or qualified to do
business and in good standing in each of the jurisdictions
in which the failure to be so licensed or qualified would
have a material adverse effect on its ability to perform its
obligations hereunder. Neither the execution, delivery nor
performance of this Agreement by the Partner will conflict
with the provisions of the Partner's Articles of
Incorporation, Bylaws, or other organizational instruments,
violate any order, writ, injunction or decree of any court,
administrative agency or governmental body, or constitute or
result in a violation or breach of any term or provision, or
constitute a default under, any contract, mortgage, lease or
other agreement by which the Partner or its assets are
bound.
(b)Such Partner has the power and authority to
execute and deliver this Agreement and to perform its
obligations hereunder, and the execution, delivery, and
performance of this Agreement have been duly authorized by
all necessary corporate action. This Agreement constitutes
the legal, valid, and binding obligation of such Partner.
The Partner has the ability to perform its obligations
hereunder (or will have the ability to do so when such
performance is called for herein).
(c)The representations and warranties made by the
Partners in this Agreement shall survive the execution
hereof.
15.15Arbitration. Any claim, dispute or other
matter in question between the parties hereto arising out of
or relating to this Agreement, or the breach thereof, shall
be decided by arbitration in accordance with the rules of
the American Arbitration Association in effect on the date
hereof before three (3) arbitrators; one designated by each
party and the third in accordance with the Rules of the
American Arbitration Association. Any such arbitration
shall be conducted in New York, New York, unless the parties
mutually agree to another location. The arbitrators shall
be qualified by education, training or experience as may be
appropriate according to the nature of the claim, dispute or
other matter in question. The foregoing agreement to
arbitrate and any other agreement to arbitrate shall be
specifically enforceable under the prevailing arbitration
law. The award rendered by the arbitrators shall be final,
and judgment may be entered upon it in accordance with
applicable law in any court having jurisdiction thereof. To
the extent permitted by law, by agreeing to engage in the
arbitration provided for in this Section, the parties waive
their right to appeal any decision made by the arbitrators.
The demand for arbitration shall be made within a reasonable
time after the claim, dispute or other matter in question
has arisen; and in no event shall it be made after the date
when institution of legal or equitable proceedings based on
such claim, dispute or other matter in question would be
barred by the applicable statute of limitations. All costs
and expenses (including reasonable attorneys' fees and
costs) in connection with any such arbitration shall be
borne in the manner which the arbitrators making the
determination shall direct. Notwithstanding the provisions
of this Section, either party may seek appropriate
injunctive relief for any threatened breach.
15.16Saving Clause. Any requirements imposed
under applicable law, including but not limited to, the
provisions of the Act, as in effect from time to time,
shall, where inconsistent with any provision of this
Agreement, be controlling and shall govern the rights among
the parties hereto, but such inconsistent provisions of law
are hereby waived to the maximum extent permitted by such
law. Any such provisions under applicable law or regulation
which supersede or invalidate any provision hereof shall not
affect the validity of this Agreement, and the remaining
provisions shall be enforced as if the invalid provision or
provisions were deleted.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement effective as of the day and year first above
written.
THIS AGREEMENT CONTAINS AN ARBITRATION PROVISION
THAT IS BINDING UPON THE PARTIES
GENERAL PARTNER:
PMC MANAGEMENT, INC., a Georgia
close corporation
By:
Name:
Its:
LIMITED PARTNERS:
PLANET HOLLYWOOD (THEATRES), INC.,
a Florida corporation
By:
Name:
Its:
AMCPH HOLDINGS, INC.
a Missouri corporation
By:
Name:
Its:
LIMITED PARTNERSHIP AGREEMENT
of
PLANET MOVIES COMPANY, L.P.
Dated October 17, 1997
TABLE OF CONTENTS
SECTION ONE
FORMATION, NAME, PRINCIPAL OFFICE, TERM,
PURPOSE, TITLE TO PROPERTY, QUALIFICATION
. . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Formation.. . . . . . . . . . . . . . . . . .1
1.2 Name and Mailing Address. . . . . . . . . . .1
1.3 Principal and Other Offices; Registered Of
fice.. . . . . . . . . . . . . . . . . . . . . .1
1.4 Term. . . . . . . . . . . . . . . . . . . . .2
1.5 Agent for Service of Process. . . . . . . . .2
1.6 Purposes of the Partnership.. . . . . . . . .2
1.7 Partners. . . . . . . . . . . . . . . . . . .2
1.8 Qualification in Other Jurisdictions. . . . .3
1.9 Title to Property.. . . . . . . . . . . . . .3
SECTION TWO
DEFINITIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION THREE
CAPITAL CONTRIBUTIONS AND LOANS
. . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Initial Capital Contributions.. . . . . . . 10
3.2 Additional Capital Contributions. . . . . . 10
3.3 Election to Make Contribution Loan Upon De
fault in Making of Additional Capital Contribu
tions. . . . . . . . . . . . . . . . . . . . . 11
3.4 Election to Receive Additional Units Upon
Default in Making of Additional Capital Contribu
tions. . . . . . . . . . . . . . . . . . . . . 12
3.5 Effect of Change in Proportionate Unit Hold
ings.. . . . . . . . . . . . . . . . . . . . . 12
3.6 Other Matters Relating to Capital Contribu
tions. . . . . . . . . . . . . . . . . . . . . 12
3.7 Loans.. . . . . . . . . . . . . . . . . . . 13
SECTION FOUR
CAPITAL ACCOUNTS; RETURN OF CAPITAL
. . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.1 Capital Accounts. . . . . . . . . . . . . . 13
4.2 Return of Capital.. . . . . . . . . . . . . 13
SECTION FIVE
ALLOCATIONS OF PROFITS AND LOSSES
. . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Profits. . . . . . . . . . . . . . . . . . 14
5.2 Losses. . . . . . . . . . . . . . . . . . . 14
5.3 Special Allocations.. . . . . . . . . . . . 15
5.4 Curative Allocations. . . . . . . . . . . . 16
5.5 Other Allocation and Accounting Rules.. . . 17
5.6 Tax Allocations.. . . . . . . . . . . . . . 17
SECTION SIX
DISTRIBUTIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Distributions of Cash.. . . . . . . . . . . 18
6.2 Distributions in Kind.. . . . . . . . . . . 18
6.3 Distribution in Cash Only. . . . . . . . . 18
6.4 Good Faith Distribution by General Partner. 18
SECTION SEVEN
RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNER
. . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.1 Powers of the General Partner.. . . . . . . 19
7.2 Dealing with Partnership by General Partner.21
7.3 Authority of General Partner. . . . . . . . 22
7.4 Duties of the General Partner.. . . . . . . 22
7.5 Removal of the General Partner. . . . . . . 23
7.6 Liability and Indemnification of the General
Partner. . . . . . . . . . . . . . . . . . . . 23
7.7 Transferability of General Partner's Inter
est. . . . . . . . . . . . . . . . . . . . . . 24
SECTION EIGHT
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
. . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Liability of Limited Partners.. . . . . . . 24
8.2 Management of Business. . . . . . . . . . . 24
8.3 Duty to Account for Profits.. . . . . . . . 24
8.4 Rights of Limited Partners. . . . . . . . . 24
SECTION NINE
TRANSFER OF PARTNERSHIP INTERESTS
. . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.1 Transfer of Interests.. . . . . . . . . . . 25
9.2 Limitation Upon Transfer of Partnership In
terests Therein. . . . . . . . . . . . . . . . 25
9.3 Holders Who are not Limited Partners. . . . 26
9.4 Treatment of Transferor.. . . . . . . . . . 26
9.5 General Conditions on Disposition.. . . . . 27
9.6 Survival of Liabilities.. . . . . . . . . . 27
9.7 Withdrawal. . . . . . . . . . . . . . . . . 27
SECTION TEN
. . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.1 Dissolution.. . . . . . . . . . . . . . . . 27
10.2 Wind-Up.. . . . . . . . . . . . . . . . . . 28
10.3 Compliance With Regulations.. . . . . . . . 28
10.4 No Obligation to Restore Deficit Capital
Account Balance. . . . . . . . . . . . . . . . 28
10.5 Temporary Retention of Liquidation Proceeds.29
10.6 Distributions In Kind.. . . . . . . . . . . 29
10.7 Control of Dissolution and Winding-up.. . . 29
10.8 Deemed Distribution and Recontribution. . . 30
10.9 Rights of Partners. . . . . . . . . . . . . 30
10.10 Division of Venture Units. . . . . . . 30
SECTION ELEVEN
OTHER BUSINESS
. . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION TWELVE
POWER OF ATTORNEY
. . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.1 Granting General Partner Power of Attorney. 31
12.2 Power of Attorney.. . . . . . . . . . . . . 32
SECTION THIRTEEN
BOOKS OF ACCOUNT AND PARTNERSHIP RECORDS
. . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.1 Books of Account. . . . . . . . . . . . . . 32
13.2 Inspection. . . . . . . . . . . . . . . . . 32
13.3 Bank Accounts. . . . . . . . . . . . . . . 33
13.4 Reports.. . . . . . . . . . . . . . . . . . 33
SECTION FOURTEEN
AMENDMENTS
. . . . . . . . . . . . . . . . . . . . . . . . . . 33
14.1 General Rule. . . . . . . . . . . . . . . . 33
14.2 Unanimous Consent Requirement.. . . . . . . 34
SECTION FIFTEEN
GENERAL PROVISIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . 34
15.1 Relationship. . . . . . . . . . . . . . . . 34
15.2 Meetings of Partners. . . . . . . . . . . . 34
15.3 Entire Agreement. . . . . . . . . . . . . . 34
15.4 Binding Effect; No Assignment.. . . . . . . 34
15.5 No Waiver. . . . . . . . . . . . . . . . . 35
15.6 Notices.. . . . . . . . . . . . . . . . . . 35
15.7 Counterparts. . . . . . . . . . . . . . . . 35
15.8 Headings. . . . . . . . . . . . . . . . . . 35
15.9 Governing Law.. . . . . . . . . . . . . . . 35
15.10 Further Assurances.. . . . . . . . . . 36
15.11 Litigation.. . . . . . . . . . . . . . 36
15.12 Litigation Among Partners. . . . . . . 36
15.13 Remedies.. . . . . . . . . . . . . . . 36
15.14 Representations and Warranties.. . . . 36
15.15 Arbitration. . . . . . . . . . . . . . 37
15.16 Saving Clause. . . . . . . . . . . . . 37