Exhibit 3.33
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (this "Agreement") is dated effective as of
January 1, 1991 and is executed by and between Riverside Cement Company, a
Delaware corporation (herein referred to as "the Company"), and RVC Venture
Corp., a Delaware corporation (herein referred to as "RVC"). The Company and RVC
are sometimes herein referred to individually as a "Partner" and collectively,
as the "Partners".
ARTICLE I
GENERAL
1.1 Formation
The Partners hereby associate themselves in the formation of a general
partnership (the "Partnership") pursuant to the Partnership Act. Except as
otherwise provided herein, the rights and obligations of the Partners shall be
governed by the provisions of the Partnership Act.
1.2 Name
The name of the Partnership shall be Riverside Cement Company. The Partners
may change the name of the Partnership or adopt such trade or fictitious names
as they may determine to be appropriate.
1.3 Certificate Requirements
The Partners hereby agree to execute and deliver all certificates
(including, without limitation, the assumed name certificate required by the
Assumed Business or Professional Name Act of the State of California), amended
certificates or other documents and to accomplish all filings, publishings,
recordings and other acts as may be necessary to comply with the requirements of
law for the formation, continuation and operation of a general partnership under
the laws of the State of California and any other jurisdiction where the
Partnership shall conduct, or propose to conduct, business in accordance with
this Agreement. Prior to conducting business in any jurisdiction, the
Partnership shall, to the extent required by the laws of such jurisdiction,
cause the Partnership to qualify to conduct business as a foreign partnership in
such jurisdiction.
1.4 Nature of Partnership Interest
The Partnership Interest of each Partner shall be personal property for all
purposes.
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ARTICLE II
CERTAIN DEFINED TERMS
As used in this Agreement, the following terms have the respective meanings
assigned or referred to below:
"Actual Net Book Value" shall have the meaning specified in
Section 6.1.5.
"Advancing Partner" shall have the meaning specified in Section
6.2.3.
"Affiliate" shall mean (a) with respect to either Partner, any
Person that, directly or indirectly, (i) owns 10% or more of the
outstanding voting securities of such Partner or (ii) controls or is
controlled by or is under common control with such Partner and (b) with
respect to any individual (including, without limitation, the General
Manager), any Person that is a relative (within the third degree of
consanguinity) or spouse of such individual or is a relative (within the
third degree of consanguinity) of such spouse or is a ▇▇▇▇, guardian,
employer or employee of such individual or such spouse or is a trust or
estate in which such individual owns a 5% or greater beneficial interest or
of which such individual serves as trustee, executor or in any similar
capacity. As used in the preceding sentence, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the Partner referred to,
whether through ownership of voting securities, by contract or otherwise,
and the terms, "controlled" and "controls" shall have meanings correlative
to the foregoing.
"Agreed Value" shall mean the fair market value of any
partnership property as agreed to in writing by the Partners.
"Allocable Share" shall, with respect to each Partner, mean 50%.
"Appraisal Panel" shall have the meaning specified in Section
16.2.
"Assets" shall mean all of the assets, rights, franchises and
properties of the Company of every type and description, real, personal and
mixed, tangible and intangible, and wherever located, except for the
Excluded Assets.
"Assumed Obligations" shall have the meaning specified in Section
6.1.2.
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"Authorized Representative" shall have the meaning specified in
Section 7.1.2.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor
statute thereto.
"Business" shall mean importing (through RIC Company, a Texas
partnership), manufacturing (at the Crestmore and Oro Grande manufacturing
facilities) and selling cement and (through ▇▇▇▇▇▇ Limestone Products,
Inc., a California corporation) producing and selling limestone.
"Business Plan" shall have the meaning specified in Section
7.7(c).
"Buy-Sell Closing" shall have the meaning specified in Section
15.2(e).
"Buy-Sell Notice" shall have the meaning specified in Section
15.2(a).
"Capital Call" shall have the meaning specified in Section
6.2.2(d).
"Capital Request" shall have the meaning specified in Section
6.2.2(b).
"Cash Contribution" shall have the meaning specified in Section
6.1.3.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commencement" shall mean the closing of the initial capital
contribution specified in Section 6.1.
"Company" shall have the meaning specified in the opening
paragraph hereof.
"Conveyance" shall have the meaning specified in Section 6.1.2.
"Current Business Plan" shall mean the Business Plan most
recently approved by the Management Committee in accordance with Section
7.7 (b), as modified by the Management Committee from time to time in
accordance with Section 7.7(e).
"Default Notice" shall have the meaning specified in Section
6.2.3.
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"Defaulter" shall have the meaning specified in Section 12.1.
"Defaulting Partner" shall have the meaning specified in Section
6.2.3.
"Deposit Account" shall have the meaning specified in Section
6.2.4.
"Due Date" shall have the meaning specified in Section 6.2.2(d).
"Election Date" shall have the meaning specified in Section
6.2.3.
"Election Notice" shall have the meaning specified in Section
6.2.3.
"Equalizing Distribution" shall have the meaning specified in
Section 6.1.4.
"Estimated Net Book Value" shall have the meaning specified in
Section 6.1.3.
"Event of Default" shall have the meaning specified in Section
12.1.
"Excluded Assets" shall mean the assets of the Company listed on
the Schedule of Excluded Assets attached hereto as Exhibit A.
"Fair Market Value" shall have the meaning specified in Section
16.2(b).
"Funding" shall have the meaning specified in Section 6.1.1.
"General Manager" shall have the meaning specified in Section
7.2.1(a).
"Liquidating Trustee" shall have the meaning specified in Section
12.5(b).
"Loan Proceeds" shall have the meaning specified in Section
6.1.1.
"Management Committee" shall have the meaning specified in
Section 7.1.1.
"Material Lender" shall mean a Partner which holds aggregate
outstanding Partner Loans in an amount (including principal and accrued and
unpaid interest) which is
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$25,000,000 or more in excess of the amount of outstanding Partner Loans
(including principal and accrued and unpaid interest) held by the other
Partner.
"Market" shall mean the geographic area described in Exhibit B
hereto.
"Net Distribution Value" shall have the meaning specified in
Section 16.2(c).
"Net Fair Market Value" shall have the meaning specified in
Section 16.2(d).
"Non-Defaulter" shall have the meaning specified in Section
12.3(a).
"Non-Fixed Assets Property" shall have the meaning specified in
Section 16.2(e).
"Offeree" shall have the meaning specified in Section 7.10.2.
"Offeror" shall have the meaning specified in Section 7.10.2.
"Participation Notice" shall have the meaning specified in
Section 7.10.2.
"Partner Loan" shall have the meaning specified in Article X.
"Partnership Act" shall mean the California Uniform Partnership
Act, as amended from time to time, and any successor to such Act.
"Partnership Interest" shall mean, with respect to each Partner,
the entire interest of such Partner in the Partnership.
"Partnership Loan" shall have the meaning specified in Section
6.1.1.
"Partnership Fixed Assets" shall have the meaning specified in
Section 16.2(f).
"Percentage Interests" of the Partners shall mean the percentages
set forth opposite their respective names below:
Company 50%
RVC 50%
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"Person" shall mean an individual, estate, corporation,
partnership, joint venture, trust, unincorporated organization, association
or other entity.
"Prime Rate" shall mean the annual rate of interest published by
Citibank, N.A. from time to time as its "prime" rate of interest.
"Project" shall mean the Assets and Business to be acquired by
the Partnership pursuant to this Agreement.
"Project Site" shall mean the facilities located at the Port of
Los Angeles, California, Oro Grande, the City and County of Riverside, San
Diego, Stockton, San ▇▇▇▇ Capistrano, Diamond Bar Lucerne Valley, and San
Bernardino County, California included in the Assets and utilized in the
conduct of the Business.
"Recipient Partner" shall have the meaning specified in Section
15.2(a).
"Requested Capital" shall have the meaning specified in Section
6.2.2(b).
"RVC" shall have the meaning specified in the opening paragraph
hereof.
"Tendering Partner" shall have the meaning specified in Section
15.2(a).
"Transfer" shall mean, with respect to any asset or interest or
any portion thereof, the mortgage, pledge, hypothecation, transfer, sale,
assignment or other disposition of such asset or interest or any right or
interest therein whether voluntarily, by operation of law or otherwise and
whether directly or indirectly.
"Transferee" shall have the meaning specified in Section 16.2(g).
"Transferor" shall have the meaning specified in Section 16.2(h).
"Treasury" shall mean the United States Department of the
Treasury.
"Valuation Date" shall have the meaning specified in Section
16.2(i).
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ARTICLE III
PURPOSE
The sole purpose and business of the Partnership shall be (a) to acquire
the Project pursuant to and in accordance with the terms and provisions of this
Agreement, (b) to engage in the Business of in conjunction with the operation of
the Project, (c) to engage in such other related businesses as the Partners
shall determine, (d) to enter into, from time to time, such financing
arrangements as the Partners may determine to be necessary, appropriate or
advisable to enable the Partnership to accomplish the purposes set forth in
clauses (a), (b) and (c) of this sentence, (e) to mortgage, pledge, assign,
grant a security interest in, or otherwise encumber, lease, exchange or
otherwise dispose of, all or a part of the Project, the Project Site or any
other assets of the Partnership to secure such financing arrangements and (f) to
engage in all activities and to enter into, exercise the rights and enjoy the
benefits under, and discharge the obligations of the Partnership pursuant to,
all contracts, agreements and documents that may be necessary, appropriate or
advisable to enable the Partnership to accomplish the purposes set forth in
clauses (a), (b), (c), (d) and (e) of this sentence.
ARTICLE IV
TERM
4.1 Term and Termination
The term of the Partnership shall commence on the effective date hereof and
shall continue until terminated as provided in Article XII.
4.2 Rescission
On or before June 15, 1991, at the election of either party hereto
exercisable by written notice to the other party, the Partnership and this
Agreement may be rescinded. In the event of such a rescission, the provisions of
this Section 4.2 shall be applicable in lieu of all inconsistent provisions of
this Agreement. The Partnership shall not be dissolved pursuant to Article XII
in the event of a rescission. Rather, on the date of said notice of rescission
by either party and in any event prior to June 30, 1991, effective as of January
1, 1991, the Partnership shall transfer and reconvey all of the assets of the
Partnership, including the Assets hereinafter described, to the Company and the
Company shall assume all of the obligations of the Partnership, including the
Assumed Obligations hereinafter described. The Company shall pay or cause to be
refunded the Cash Contribution to RVC on the date of said notice of rescission,
and in any event prior to June 30, 1991, plus interest on such amounts as shall
have been contributed by RVC to
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the Partnership with respect thereto from time to time, from the date
contributed until repaid, at the rate per annum equal to the lesser of (i) the
Prime Rate and (ii) the maximum nonusurious rate of interest permitted by
applicable law. No conveyance made pursuant to this Section 4.2 shall be
considered to be a distribution from the Partnership, rather all actions taken
hereunder shall be in rescission, revocation and cancellation of the Partnership
and in abrogation and avoidance of this Agreement. In anticipation of the
possibility of a rescission pursuant to this Section 4.2, no distributions shall
be made to the parties hereto pursuant to Article IX before July 1, 1990, or
until such earlier time as the rescission right provided for in this Section 4.2
shall have been waived by both of the parties hereto. The purpose of this
Section 4.2 shall be to place and restore the parties hereto, upon such a
rescission, in a position as nearly as practicable as would have existed had
this Agreement never been entered into and the parties hereto shall execute and
deliver all instruments, provide all information and take such action as may be
reasonably necessary to effectuate such purpose.
ARTICLE V
PRINCIPAL PLACE OF BUSINESS
The principal place of business of the Partnership shall be at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other location as
the Management Committee may determine.
ARTICLE VI
INITIAL CAPITAL; CAPITAL ACCOUNTS
6.1 Initial Capital
6.1.1 Partnership Loans. As of the Commencement, the Partnership shall
borrow the sum of $110,000,000 (the "Original Partnership Loan") from Beazer
U.S.A., Inc. Upon the funding of the Original Partnership Loan (the "Funding"),
the principal amount of the Original Partnership Loan (the "Loan Proceeds")
shall be paid and distributed to the Company as an Equalizing Distribution as
provided for in Section 6.1.4 hereof. The Partners and the General Manager shall
use their reasonable best efforts to cause the Partnership to obtain, as
promptly as practicable following the Commencement, from one or more banks or
other lending institutions a commitment to loan not less than $100,000,000 (the
"Non-Recourse Loan") to the Partnership on terms and conditions reasonably
acceptable to the Partners, the proceeds of which shall be used to pay and
discharge the original Partnership Loan in its entirety, it being specifically
understood and agreed that neither Partner shall have any personal liability
with respect to the Non-Recourse Loan. Upon obtaining such commitment, the
Partners shall use reasonable efforts to cause the Partnership to satisfy as
quickly as possible
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all requirements of and conditions precedent to the funding of the Non-Recourse
Loan.
6.1.2 Conveyance by the Company. At the Commencement, the Company shall
transfer and convey the Assets to the Partnership. The transfer and conveyance
of the Assets to the Partnership described in the previous sentence is referred
to herein as the "Conveyance". The Conveyance shall be effected by the Company's
delivery to the Partnership of appropriate instruments conveying and assigning
to the Partnership title to the Assets. In conjunction with and as part of the
Conveyance, the Company shall transfer and assign to the Partnership, and the
Partnership shall accept and assume, only the following obligations (the
"Assumed Obligations"):
(i) all liabilities and obligations reflected on the Beginning Balance
Sheet (as defined in Section 6.1.5 (a) hereof);
(ii) all liabilities and obligations required to be paid or performed
after the Commencement pursuant to those contracts, leases, and agreements of
the Company, including all open orders providing for the sale of products by the
Company, assumed by the Partnership;
(iii) all liabilities and obligations arising out of the operation of
the Business or the ownership of the Assets by the Partnership after the
Commencement; and
(iv) all obligations under certain employee benefit plans adopted by
the Partnership.
Except as expressly provided in this Section 6.1.2, the Partnership shall
not assume or become obligated to pay, perform or discharge, and will not be
responsible for, any other liabilities or obligations of the Company, whether
accrued, absolute, contingent or otherwise.
6.1.3 Contribution by RVC.
(a) At the Commencement RVC shall contribute cash to the Partnership (the
"Cash Contribution") in an amount equal to one-half of the excess of the Agreed
Value (as defined in Section 6.1.3(b) hereof) over the original principal amount
of the Original Partnership Loan.
(b) At the Commencement the Agreed Value of the Business equals the net
book value (the "Net Book Value") of the Business (the book value of the Assets,
minus the book value of the Assumed Obligations) as of a date and time
immediately prior to the Commencement, plus $35,221,000. The Net Book Value
shall be determined on a basis consistent with preparation of the Business's
August 31, 1990 balance sheet (the "Latest Balance Sheet"). For purposes of the
Commencement, the Agreed Value shall be determined
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to be $170,000,000 based upon the Net Book Value (the "Estimated Net Book
Value") reflected on an estimated balance sheet of the Company as of a date and
time immediately prior to the Commencement, so that the Cash Contribution to be
made by RVC as of the Commencement shall be $30,000,000.
6.1.4 Equalizing Distribution to the Company.
It is understood and agreed that the initial capital contributions of the
Partners to the Partnership (and the initial capital accounts of the Partners)
are intended to be equal as of the Commencement. Accordingly, the Company shall
be entitled to receive from the Partnership as an equalizing distribution (the
"Equalizing Distribution") an amount in cash equal to the Agreed Value, minus
the amount of the Cash Contribution, minus $30,000,000. The amount of such
distribution payable to the Company as of the Commencement shall be based upon
the estimated Agreed Value, determined as provided in Section 6.1.3(b) hereof so
that the amount of $110,000,000 shall be distributed by the Partnership to the
Company as of the Commencement on account of said Equalizing Distribution.
6.1.5 Adjustment Payment.
(a) Within thirty (30) days following the Commencement, the Company shall
deliver to RVC a balance sheet of the Business as of a date and time immediately
prior to the Commencement, which shall be the basis for determining the actual
Net Book Value of the Business (the book value of the Assets, minus the book
value of the Assumed Obligations) as of such date and time (the "Actual Net Book
Value"). Such balance sheet shall be prepared on a basis consistent with the
Company's books and records using the same bookkeeping and accounting principles
and methods as were used in the preparation of the Latest Balance Sheet, so that
in no event shall changes in the Agreed Value, or adjustments to the initial
capital accounts of the Partners, result from application of inconsistent
bookkeeping and accounting principles or methods. Such balance sheet as finally
determined is hereinafter referred to as the "Beginning Balance Sheet."
(b) In order to adjust for differences between the Estimated Net Book value
(determined as provided in Section 6.1.3(b) hereof) and the Actual Net Book
Value (as reflected on the Beginning Balance Sheet) and to ensure that the
initial capital accounts of the Company and RVC in the Partnership are equal,
cash payments shall be made between the Company, RVC and the Partnership in
accordance with this Section 6.1.5(b). Within ten (10) days of the determination
of the Actual Net Book Value as provided in Section 6.1.5(a) hereof:
(i) if the Actual Net Book Value exceeds the Estimated Net Book Value,
RVC shall contribute to the Partnership in cash an amount equal to one-half of
such excess and the Company and
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RVC shall cause the Partnership to distribute an equal amount to the Company in
cash, notwithstanding any provision of this Agreement which may prohibit such
distribution; or
(ii) if the Estimated Net Book Value exceeds the Actual Net Book
Value, the Company shall contribute to the Partnership in cash an amount equal
to one-half of such excess, and the Company and RVC shall cause the Partnership
to distribute an equal amount to RVC in cash, notwithstanding any provision of
this Agreement which may prohibit such distribution.
6.1.6 Federal Income Tax Reporting. The Partners hereby acknowledge and
agree that, pursuant to Section 707(a)(2)(B) of the Code, the transfer of the
Assets to the Partnership by the Company shall, for federal income tax purposes,
be treated as follows: (i) a sale by the Company to RVC of an undivided interest
in the Assets for the Cash Contribution, followed by the contribution of such
undivided interest by RVC to the Partnership, and (ii) a contribution by the
Company to the Partnership of its remaining undivided interest in the Assets
(such transaction being hereinafter referred to as the "Part Sale/Part
Contribution Transaction"). For purposes of this Section 6.1.6, unless a
different percentage is expressly stated, the undivided interest in Assets
deemed purchased by RVC shall be that percentage determined by multiplying (i)
the ratio of the Cash Contribution to the Agreed Value of the Assets, and (ii)
100 percent. In connection with the foregoing, the Partners hereby acknowledge
and agree that, as of the date of this Agreement, the United States Treasury
Department has not yet promulgated proposed, temporary or final regulations
("Treasury Regulations") interpreting Section 707(a)(2)(B) of the Code and
whether the distribution of the Loan Proceeds to the Company may, in whole or in
part, be regarded as a nontaxable distribution to the Company. Accordingly, the
Partners hereby agree that if and to the extent that Treasury Regulations are
promulgated which permit the Company to take the position that its receipt of
the Loan Proceeds properly may be treated as a nontaxable distribution to the
Company, then the Part Sale/Part Contribution Transaction shall, for federal
income tax purposes, be reported by the Partnership and the Partners as (i) a
sale by the Company to RVC of an undivided interest in the Assets for the Cash
Contribution, (ii) a contribution by the Company and RVC of their respective
undivided interests in the Assets to the Partnership, and (iii) a financing
transaction pursuant to which the Partnership borrowed the Loan Proceeds and
distributed such Loan Proceeds to the Company pursuant to Section 731 of the
Code. The Partners further recognize and agree that, if Treasury Regulations are
not issued under Section 707(a)(2)(B) of the Code prior to the filing of the
Partnership's initial federal income tax return, the Part Sale/Part Contribution
Transaction shall be reported as (i) a sale by the Company to the Partnership of
an undivided 50% interest in the Asset for the Cash Contribution plus 50% of the
Loan Proceeds, (ii) a contribution by the Company to the Partnership of the
remaining undivided 50% interest in the Assets in exchange for the Company's
interest in the Partnership, and (iii) the
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distribution by the Partnership to the Company of 50% of the Loan Proceeds,
which distribution is governed by Section 731 of the Code. The Partners hereby
agree that the Partnership and the Partners shall report the Part Sale/Part
Contribution Transaction in a consistent manner strictly in accordance with the
provisions of this Section 6.1.6.
6.2 Additional Capital Contributions
6.2.1 General. It is the desire of the Partners that, except for the
initial capital contributions described in Section 6.1, all costs and expenses
of the Partnership (including, without limitation, general and administrative
expenses and capital expenditures) shall be funded out of Partnership cash flow
supplemented, to the extent required, by Partnership borrowings from
institutional or other third party lenders consistent with the provisions of
this Agreement or from the Partners as Partner Loans made pursuant to Article X.
6.2.2 Cash Calls. (a) The General Manager shall continually monitor and
project, on a rolling basis, the cash requirements of the Partnership for the
ensuing quarterly period and the amount of cash expected to be available to the
Partnership during such quarterly period from operations and Partnership
borrowings, if any, taking into account, among other relevant factors, projected
capital expenditures to be made during the relevant quarterly period in
accordance with the Current Business Plan and or any requirement imposed by the
Management Committee.
(b) In the event the General Manager shall, at any time, determine that,
for the ensuing quarterly period, the projected cash requirements of the
Partnership for such quarterly period exceed the projected available cash during
such quarterly period, then the General Manager shall request additional capital
(the "Requested Capital"), from the Partners by giving notice to the Partners,
which notice (a "Capital Request") shall (i) specify the amount of the Requested
Capital and (ii) describe, in reasonable detail, the manner in which the
Requested Capital was calculated.
(c) The Management Committee may approve or disapprove all or any portion
of any Capital Request by delivering notice to the General Manager within 15
days after delivery of such Capital Request, which notice shall (i) identify
such Capital Request and (ii) state what action the Management Committee has
taken with respect to such Capital Request. In connection with its decision to
reject all or a portion of any Capital Request as contemplated hereby, the
Management Committee shall consider whether one or more modifications of the
Current Business Plan are necessary or appropriate.
(d) If all or any portion of a Capital Request is approved by the
Management Committee as provided in paragraph (c) above (the "Capital Call"),
then each Partner shall contribute to
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the Partnership, on or before the date (the "Due Date") that is 20 days after
the date on which the relevant Capital Request was delivered, cash equal to its
Allocable Share of the approved Capital Call.
(e) The tender by either Partner of its Allocable Share of any Capital Call
in accordance with this Section 6.2.2 shall be conditioned upon the remainder of
such Capital Call being contributed to the Partnership by the other Partner on
or before the relevant Due Date. Accordingly, if either Partner fails to
contribute its Allocable Share of any Capital Call and if the other Partner
fails to deliver an Election Notice regarding such Capital Call as provided in
Section 6.2.3, then the Partnership shall promptly return to such Partner its
Allocable Share of such Capital Call, in which event Section 6.2.3 shall no
longer apply to such Capital Call. The Partnership shall not be obligated to pay
interest on any Capital Call other than, in the case of any Capital Call
returned by the Partnership as aforesaid, to the extent of the interest actually
earned thereon while on deposit in the Deposit Account. The Partnership shall
not expend funds advanced by one Partner (and shall retain such funds in the
Deposit Account) unless and until either (i) the remainder of such Capital Call
is contributed by the other Partner or (ii) the Advancing Partner delivers an
Election Notice to the General Manager electing to treat the advance as a
Partner Loan and the Partnership delivers appropriate documents in connection
with the Partner Loan.
6.2.3 Failure to Contribute Capital Call Amount. If either Partner (the
"Defaulting Partner") fails to contribute to the Partnership, in cash, the
entire amount of its Allocable Share of any Capital Call on or before the
relevant Due Date, the General Manager shall promptly deliver notice thereof to
the other Partner, which notice (a "Default Notice") shall specify the name of
the Defaulting Partner and the unpaid portion of its Allocable Share of such
Capital Call. If either Partner contributes its Allocable Share of any Capital
Call on or before the relevant Due Date and if such Partner receives a Default
Notice with respect to the other Partner's failure to contribute its Allocable
Share of such Capital Call, then such Partner (the "Advancing Partner") may, by
notice (the "Election Notice") delivered to the Defaulting Partner on or before
the date that is 5 days following the delivery of such Default Notice (the
"Election Date"), elect to treat all or any portion of such Advancing Partner's
contribution as a Partner Loan in accordance with Article X hereof. Furthermore,
the Advancing Partner shall specify in such Election Notice whether it shall
make a Partner Loan with respect to the remainder of the Capital Call and the
designation of the maturity of, and the liens and security interests required
with respect to, such Partner Loan. Any Partner Loan for the remainder of the
Capital Call shall also be deemed a Partner Loan made pursuant to this Section
6.2.3 for all purposes of this Agreement.
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6.2.4 Deposit Account. The General Manager shall establish and maintain in
the name of the Partnership an interest-bearing account (the "Deposit Account")
with any responsible financial institution and into which all payments received
by or on behalf of the Partnership pursuant to this Section 6.2 shall be
deposited and held in accordance with the provisions of this Section 6.2.
6.2.5 No Third Party Rights. Nothing in this Agreement or the Formation
Agreement, including the right of the Partnership or the Partners to require
additional capital contributions under the terms of this Agreement, shall be
construed as conferring any rights or benefits to or upon any Person not a party
to this Agreement, including, but not limited to, the holder of any obligations
secured by a mortgage, deed of trust, security interest or other lien or
encumbrance upon or affecting the Partnership, the Project or any interest of
any Partner therein or any asset of the Partnership.
6.3 No Interest on Capital
No interest shall be paid on any capital contributed to the Partnership,
except as provided in Section 4.2.
6.4 Distributions of Property in Kind
In the event the Liquidating Trustee elects to distribute any Partnership
assets in kind to the Partners upon dissolution and winding up of the
Partnership, such assets shall be valued at their Agreed Value, and shall be
distributed in kind to the Partners as tenants-in-common after first determining
the respective interests of the Partners in such assets in accordance with the
provisions of this Agreement with each Partner accepting a pro rata undivided
interest in such Assets.
6.5 No Withdrawal
Neither Partner shall be entitled to withdraw any property contributed to
the Partnership by such Partner or any amount credited to its capital account or
receive any distribution from the Partnership except as expressly provided in
Articles IV, VI, IX and XII.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
7.1 Management Committee
7.1.1 General Powers. A committee (the "Management Committee") is hereby
established to manage all aspects of the Partnership on behalf of the Partners.
Except with respect to those matters which by the terms of this Agreement are
specifically reserved for decision, vote or approval by the Partners, the
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Management Committee shall have full and exclusive authority to control, manage
and direct the business and affairs of the Partnership for the purposes set
forth in Article III. Each decision of the Management Committee in accordance
with this Agreement shall be binding on the Partnership and each of the
Partners.
7.1.2 Composition. The Management Committee shall consist of six members.
Each Partner shall the right to appoint three members of the Management
Committee, one of whom shall be designated as such Partner's Authorized
Representative. Each Partner may, by written notice delivered to the other
Partner at any time or from time to time, replace either or both of its
representative members of the Management Committee or change its Authorized
Representative. Concurrently with or promptly after the delivery of any notice
pursuant to the preceding sentence, the Partner giving such notice shall deliver
a copy to the General Manager, but neither the failure to deliver nor any delay
in delivering such copy to the General Manager shall affect the validity or
effectiveness of such notice.
7.1.3 Meetings. (a) Regular meetings of the Management Committee shall be
scheduled from time to time by the Management Committee and held without further
notice at such times (no less frequently than quarterly) and at such places as
shall be determined by the Management Committee. At any regular meeting of the
Management Committee, any and all business of the Partnership may be transacted.
(b) Special meetings of the Management Committee may be called by the
General Manager or by either Authorized Representative by giving not less than
48 hours advance notice to each member, which notice shall specify the time,
place and purpose of the special meeting. Any member of the Management Committee
may waive notice of any special meeting, whether before or after the time of
such meeting. Attendance of a member at a meeting shall constitute a waiver of
notice of such meeting.
(c) Any action required or permitted to be taken at a meeting of the
Management Committee may be taken by means of conference telephone call or
similar equipment by means of which all individuals participating in the meeting
can hear each other.
(d) Unless otherwise agreed to by each member of the Management Committee,
all meetings of the Management Committee shall be held at the principal office
of the Partnership.
(e) The Management Committee shall conduct its proceedings in accordance
with such rules at it may from time to time establish and shall keep appropriate
records of the actions taken by it.
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7.1.4 Quorum; Voting. (a) Two members of the Management Committee shall
constitute a quorum for the purpose of transacting business, except that no
quorum of the Management Committee shall be deemed to exist with respect to any
meeting of the Management Committee, nor shall any action be taken thereat,
unless such meeting is attended by at least one member appointed by each Partner
except as provided in the proviso to the first sentence of paragraph (b) of this
Section. The proviso to the foregoing sentence shall be of no effect if a
Material Lender is a Defaulting Partner. If a quorum is not present at a meeting
of the Management Committee duly called in accordance with Section 7.1.3, the
meeting may be rescheduled by the General Manager or either Authorized
Representative by giving at least two days' prior written notice thereof to each
of the members.
(b) Anything herein or elsewhere to the contrary notwithstanding, no action
shall be taken by the Management Committee unless and until affirmative votes in
favor of such action are cast on behalf of both Partners; provided, however,
that for so long as an Event of Default is continuing or the Partnership is in
default with respect to any Partner Loan held by a Material Lender, the three
members of the Management Committee selected by Partner that is the
Non-Defaulting Partner or Material Lender shall have the right to take any
action taken by Management Committee other than Management Committee
authorizations of the items in Section 7.2.2 except, however, that the
Non-Defaulting Partner or Material Lender shall have the right, notwithstanding
Section 7.2.2, to cause the Management Committee to authorize the Partnership
to: (i) amend the Business Plan; (ii) make any capital expenditure, capital
additional or capital improvement on behalf of the Partnership in accordance
with the Business Plan, as amended; and (iii) to borrow money or issue bonds or
other systems of indebtedness in the name and on behalf of the Partnership in an
aggregate principal amount not to exceed the aggregate principal amount of all
Partner Loans made by said Non-Defaulting Partner or Material Lender, as the
case may be. In all matters to be decided or approved by the Management
Committee, each Authorized Representative shall possess the exclusive power and
authority to vote the Percentage Interest of the Partner represented by him;
provided, however, that in the event either Authorized Representative is not
present at any meeting of the Management Committee, the other member appointed
by the Partner which designated such Authorized Representative shall be
empowered and authorized to vote the Percentage Interest of such Partner.
7.1.5 Compensation. No member of the Management Committee shall be entitled
to any compensation from the Partnership.
7.2 General Manager
7.2.1 General Powers. (a) The Partnership shall employ at all times an
individual (the "General Manager") to act as the chief executive officer of the
Partnership. The General Manager shall be
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selected by the Management Committee from time to time and shall be supervised
by, and be subject to the control and authority of the Management Committee.
Except as otherwise provided herein and subject to such limitations as the
Management Committee may impose from time to time, the General Manager shall be
authorized and empowered to manage, administer and operate the business and
affairs of the Partnership for the purposes set forth in Article III. Without
limitation of the foregoing, the General Manager shall be authorized and
empowered, except as otherwise provided herein and subject to such limitations
as the Management Committee may impose from time to time, to perform or cause to
be performed, at the Partnership's expense and in its name, all operational
functions relating to the Project necessary to run the business of the
Partnership on a day-to-day basis consistent with this Agreement and the Current
Business Plan.
(b) Except as to actions of the General Manager undertaken in accordance
with the provisions of this Agreement, no Person (including the Partners) shall
have authority to act for or on behalf of, or to assume any obligation or
responsibility on behalf of, the Partnership without the approval of the
Management Committee. Any action taken by the General Manager for or on behalf
of the Partnership in compliance with this Agreement shall be binding on the
Partnership and each Partner.
(c) In addition to his duties set forth in this Agreement, the General
Manager shall have such specific duties as are assigned to him from time to time
by the Management Committee. The General Manager shall not be subject to the
control or authority of either Partner or any other Person or group other than
the Management Committee.
(d) Whenever any emergency arises which may jeopardize human life or the
Project and the action necessary to alleviate such emergency would otherwise
require approval by the Management Committee, the General Manager shall have the
right to take necessary and appropriate action without such approval, but shall
advise the Management Committee of such action as soon as practicable.
(e) The authority of the General Manager is limited to that which is
specifically given by the Management Committee or set forth in this Agreement.
No other authority is given or implied with respect to the General Manager.
7.2.2 Certain Restrictions. Anything herein or elsewhere to the contrary
notwithstanding, the General Manager shall have no authority or power, without
the specific authorization of the Management Committee, to:
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(a) do any act in contravention of this Agreement or take any
action which is inconsistent with the purposes set forth in Article III or
the Current Business Plan;
(b) do any act which would make it impossible to carry on the
ordinary business of the Partnership;
(c) confess a judgment against the Partnership;
(d) possess Partnership property for other than a purpose of the
Partnership set forth in Article III;
(e) admit a Person as a partner into the Partnership, except as
specifically provided herein;
(f) change or reorganize the Partnership into any other legal
form;
(g) cause the Partnership to (i) enter into other partnership
agreements in the capacity of a general partner or a limited partner, (ii)
become a member of a joint venture, (iii) participate in forms of
syndication for investment, (iv) engage in any business other than that
specified Article III, except as agreed to by all the Partners or (v)
guarantee or otherwise become secondarily liable with respect to debts or
obligations of any Partner or any other Person;
(h) make, execute or deliver on behalf of the Partnership any
general assignment for the benefit of creditors or, except in the ordinary
course of business, any performance bond, indemnity bond or surety bond;
(i) compromise or settle any lawsuit or other claim against the
Partnership or permit the entry of a default judgment against the
Partnership, in amounts in excess of any limitation established by the
Management Committee;
(j) compromise or release any claim of the Partnership except for
full payment thereof or arbitrate, or consent or agree to the arbitration
of, any of the Partnership's disputes or controversies involving claims in
excess of any limitation established by Management Committee;
(k) enter into on behalf of the Partnership any contract or
agreement which (y) calls for payments to or from the Partnership, on the
one hand, and any third party, on the other hand, of an amount in excess of
any limitation established by the Management Committee for any 12-month
period and (z) is not terminable solely at the option of the Partnership
without penalty on no more than 90 days notice;
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(1) borrow money or issue notes, bonds or other evidences of
indebtedness in the name and on behalf of the Partnership except in the
ordinary course of business and then only if the principal amount of such
indebtedness does not exceed any limitation established by the Management
committee;
(m) make any capital expenditure, capital addition or capital
improvement on behalf of the Partnership in an amount in excess of any
limitation established by the Management Committee;
(n) enter into, on behalf of the Partnership, any contract or
agreement with the General Manager or any Affiliate of the General Manager;
(o) cause or permit the Partnership to make any loan or advance
to, or own, purchase or acquire any stock, obligations or securities of, or
other investment in, or make any capital contribution to, any Person except
(i) advances or extensions of credit on terms customary in the industry and
investments, loans and advances made in settlement of accounts receivable
owing to, and other claims of, the Partnership, all in the ordinary course
of business, (ii) short term investments of the types and in the amounts
approved by the Management Committee from time to time in connection with
the management of the Partnership's funds in the ordinary course of
business and (iii) advances to employees of the Partnership in the ordinary
course of business;
(p) cause or permit the Partnership to enter into or become a
party to any contract for the purchase of materials, supplies or other
property or services, if such contract requires that payment be made by the
Partnership regardless of whether or not delivery is ever made of such
materials, supplies or other property or services;
(q) cause or permit the Partnership to Transfer or lease any of
its properties or assets except in the ordinary course of business; or
(r) receive or demand any fees or compensation from either
Partner or any Affiliate of a Partner.
7.3 General Responsibilities of General Manager
In addition to and not by way of limiting any other obligations of the
General Manager set forth in this Agreement, the responsibilities of the General
Manager shall be:
(a) to carry out the Current Business Plan in accordance with
good industry practice;
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(b) to employ persons and firms on behalf of the Partnership in
connection with the Project;
(c) to take no action detrimental to the interests of the
Partnership or fail to take any action necessary to be taken in the
interests of the Partnership, which action or failure to act constitutes
bad faith, negligence, malfeasance or fraud;
(d) to diligently perform all of the duties and obligations
imposed on the General Manager by this Agreement or by the Management
Committee in good faith and to the best of his ability;
(e) to perform all such other activities as may be reasonable and
necessary in connection with the Project and matters related thereto; and
(f) to deal fairly and impartially with the Partners at all
times.
7.4 Liability of General Manager
In the performance of his duties hereunder, the General Manager shall use
reasonable efforts to conduct the business of the Partnership in a good and
businesslike manner and in accordance with good practice within the industry. In
no event shall the General Manager be held liable or responsible to the
Partnership or either Partner for any losses sustained, or liabilities incurred,
in connection with, or attributable to, errors in judgment, negligence or other
fault of the General Manager, except that which is caused by the General
Manager's bad faith, gross negligence or willful misconduct. The General Manager
shall not be personally liable for the return of any portion of the capital
contributions of the Partners or for the failure of the Partnership to achieve
the results projected in any Business Plan.
7.5 Removal and Replacement of General Manager
The Management Committee may remove and replace the General Manager from
time to time as it may determine. Furthermore, upon the call by either Partner
for the removal of the General Manager but subject to Section 12.4, the
Management Committee shall remove the General Manager within 30 days and replace
the General Manager as soon as possible thereafter.
7.6 Compensation of General Manager
The General Manager shall be entitled to receive such compensation from the
Partnership as the Management Committee shall approve from time to time. Neither
Partner shall pay or offer to pay any fees or compensation to the General
Manager, it being
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understood and agreed that all fees and compensation of the General Manager
shall be payable solely by the Partnership.
7.7 Business Plan
(a) Annually, not less than two months prior to the end of each fiscal year
of the Partnership, the General Manager shall prepare and submit to the
Management Committee a proposed business plan, consistent with the provisions of
this Agreement, for the following three fiscal year period. Each such proposed
business plan shall include:
(i) a narrative description of such proposed business plan, including
a description of the marketing and other assumptions reflected
therein;
(ii) a schedule of estimated capital expenditures for the period
covered by such proposed business plan, segregated by project and
showing the total estimated costs, by month, to completion, regardless
of whether such completion shall take place within such period;
(iii) a schedule of projected cash flow for the period covered by such
proposed business plan on a monthly basis for the first year and on a
quarterly basis thereafter showing the sources and applications of
cash, which schedule shall describe in reasonable detail the
assumptions utilized in the preparation of such schedule and shall
separately describe in reasonable detail any proposed borrowings
during the period covered by such proposed business plan;
(iv) a projected income and expense statement for the period covered
by such proposed business plan on a monthly basis for the first fiscal
year and on a quarterly basis thereafter, which statement shall
describe in reasonable detail the assumptions utilized in the
preparation thereof; and
(v) a projected balance sheet as of the end of each fiscal year
covered by such proposed business plan, which balance sheet shall
describe in reasonable detail the assumptions utilized in the
preparation thereof.
Each proposed business plan submitted by the General Manager as aforesaid shall
be accompanied by a report describing in all material respects the manner in
which such proposed business plan, insofar as it relates to the period covered
by the Current Business Plan, deviates from the Current Business Plan.
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(b) Following the submission to it of a proposed business plan in
accordance with paragraph (a) above, the Management Committee shall meet to
consider such proposed business plan. The Management Committee shall be
authorized to adopt any such proposed business plan as submitted or with such
changes, amendments and modifications as the Management Committee shall deem
appropriate; provided, however, that in no event shall the Management Committee
adopt any such proposed business plan unless, in the good faith judgment of the
Management Committee, such proposed business plan is consistent with the
provisions of this Agreement.
(c) Each business plan adopted by the Management Committee in accordance
with paragraph (b) shall constitute a "Business Plan" for purposes hereof. Upon
the adoption by the Management Committee of a Business Plan, all prior Business
Plans, insofar as they relate to the period covered by such Business Plan, shall
be automatically rescinded.
(d) Except as provided in Section 7.2.2, the adoption of a Business Plan by
the Management Committee shall constitute express authority to the General
Manager to cause the Partnership to make any capital expenditures specifically
contemplated therein.
(e) The Management Committee shall be authorized to modify any Business
Plan theretofore adopted by it and shall modify the Current Business Plan to the
extent required to comply with the provisions of this Agreement.
7.8 Transactions with Affiliates
Except for the transactions contemplated under the Services Agreement, the
Cement Supply Agreement and the Original Partnership Loan entered into
contemporaneously herewith, the Partnership will not, and the General Manager
will not cause the Partnership to, enter into any transaction (including,
without limitation, the purchase, sale or exchange of any property or the
rendering of any service) with either Partner, any Affiliate of either Partner,
the General Manager, any Affiliate of the General Manager, any member of the
Management Committee or any Affiliate of such a member without, in each
instance, the prior approval of the Management Committee, provided, however,
that the Partners shall be permitted to make loans to the Partnership as
provided in Article X.
7.9 Title to Partnership Assets
Title to all Partnership assets, whether real, personal or mixed, tangible
or intangible, shall be deemed to be owned by the Partnership as an entity, and
no Partner shall have any ownership interest therein. Title to any and all
Partnership assets shall be held in the name of the Partnership.
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7.10 Competition; Other Activities.
7.10.1 Restricted Competition. During the term of the Partnership, neither
Partner nor any of its Affiliates shall, without the prior consent of the other
Partner, (a) directly or indirectly engage in, (b) assist or have an active
interest in (whether as proprietor, partner, investor, stockholder or any type
of principal whatsoever, provided that the ownership of not more than 5% of the
outstanding stock of a corporation traded on a national securities exchange
shall not of itself be viewed as assisting or having an active interest) or (c)
act as an agent for or advisor or consultant to any Person that is, or is about
to become, directly engaged in any business involving the importation,
manufacturing or sale of cement in the Market; provided, however, that nothing
in this Section 7.10.1 shall prohibit the Partners or their respective
Affiliates from owning an interest in the Partnership or from exercising or
enforcing their rights and remedies or performing their obligations under this
Agreement or the Formation Agreement.
7.10.2 Free Competition. Subject to Sections 7.10.1, (a) the Partners
expressly recognize and agree that each Partner has the right to purchase, sell,
develop, exploit and deal in every manner with properties, assets, transactions
and business arrangements that may be similar to, competitive with or adverse to
the activities, properties, assets and prospects of the Partnership, either for
its personal account and benefit or in an agency or representative capacity for
the account and benefit of any other Person and (b) there shall be no duty on
the part of either Partner to notify the other Partner concerning, or to account
to the Partnership or the other Partner for, any or all of any properties,
assets or rights of whatever nature acquired through such activities permitted
by this sentence, and the other Partner hereby waives and relinquishes any and
all rights with respect to such Partner's involvement in any activities
described above.
ARTICLE VIII
ALLOCATION OF INCOME AND LOSS
8.1 Allocations of Income and Loss
(a) Except as otherwise provided in Sections 8.1(b), 8.1(c) and 8.2 below,
all items of income and loss of the Partnership, as well as each item of income,
gain, loss and deduction for federal income tax purposes shall be allocated to
the Partners, pro rata in accordance with their respective Percentage Interests.
(b) The Partners understand that items of income, gain, loss, and deduction
with respect to the Assets must be separately determined and allocated to the
Partners for federal income tax
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purposes in the manner prescribed by Section 704(c) of the Code. Accordingly,
notwithstanding Section 8.1(a) above or any other provision of this Agreement to
the contrary, the Partners hereby agree that their distributive shares of such
items shall be separately determined for federal income tax purposes and
allocated between them pursuant to the principles of Section 704(c) of the Code.
(c) Interest income earned while on deposit in the Deposit Account and
attributable to a Capital Call that is returned to a Partner pursuant to Section
6.2.2(e) shall be allocated to such Partner.
8.2 Allocation of Income and Loss and Distributions in Respect of Interests
Transferred.
(a) If any interest in the Partnership is transferred, or is increased or
decreased by reason of the admission of a new Partner to the Partnership or
otherwise during any taxable year of the Partnership, each item of income, gain,
loss, deduction, or credit of the Partnership for such taxable year shall be
assigned pro rata to each day in the particular period of such taxable year to
which such item is attributable (i.e., the day on or during which it is accrued
or otherwise incurred) and the amount of each such item so assigned to any such
day shall be allocated to the Partners based upon their respective interests in
the Partnership at the close of such day. For the purpose of accounting
convenience and simplicity, to the extent permissible by applicable law, the
Partnership shall treat a transfer of, or an increase or decrease in, an
interest in the Partnership which occurs at any time during a semi-monthly
period (commencing with the semi-monthly period including the date hereof) as
having been consummated on the first day of such semi-monthly period, regardless
of when during such semi-monthly period such transfer, increase, or decrease
actually occurs (i.e., sales and dispositions made during the first 15 days of
any month will be deemed to have been made on the first day of the month and
sales and dispositions thereafter will be deemed to have been made on the 16th
day of the month).
(b) Notwithstanding any provision above to the contrary, gain or loss of
the Partnership realized in connection with a sale or other disposition of any
of the assets of the Partnership shall be allocated solely to the Partners
owning interests in the Partnership as of the date such sale or other
disposition occurs.
ARTICLE IX
DISTRIBUTIONS
9.1 Cash Distributions to the Partners
The Partners agree that it is their intent to distribute surplus cash flow
to the Partners as soon as it is available. The
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Management Committee shall review, at least quarterly, the cash position of the
Partnership, considering future cash requirements and cash reserves as may be
deemed reasonably necessary by the General Manager, and, except as provided in
Section 4.2, instruct the General Manager to distribute surplus cash to the
Partners in accordance with their Percentage Interests. Notwithstanding anything
in this Agreement to the contrary, unless otherwise agreed by the Partners, no
distributions shall be made by the Partnership to the Partners until all
principal and interest is paid in full on all outstanding Partner Loans.
9.2 In-Kind Distribution
If any assets of the Partnership shall be distributed in kind under Article
IX or XII, such assets shall be distributed to the Partners entitled thereto as
tenants-in-common in the same proportion as such Partners would have been
entitled to cash distributions.
9.3 Waiver of Right to Partition
Except as provided in Section 4.2, no Partner shall be entitled to demand
and receive property other than cash in return for its capital contributions to
the Partnership, and, to the maximum extent permissible under applicable law,
each Partner hereby waives all right to partition the Project or any other
property of the Partnership.
9.4 No Priority
No Partner shall have any priority over any other Partner as to the return
of its contributions to the capital of the Partnership or as to compensation by
way of income.
ARTICLE X
PARTNER LOANS TO THE PARTNERSHIP
Except as otherwise expressly provided herein or as the Management
Committee may otherwise prohibit, each Partner may make any loan or loans to the
Partnership or advance money on behalf of the Partnership in order to satisfy
all or a part of the then existing cash requirements of the Partnership. Each
loan or advance made by a Partner pursuant to this Article X (a "Partner Loan")
shall not be deemed an increase in or contribution to the capital account of the
lending Partner or entitle such lending Partner to any greater proportion of the
gains or losses which the Partnership may sustain. Each Partner Loan shall bear
interest, payable quarterly, at the rate per annum equal to the lesser of (i)
the Prime Rate plus 5% and (ii) the maximum nonusurious rate of interest
permitted by applicable law, and shall be deemed an obligation of indebtedness
from the Partnership to such lending Partner payable in
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accordance with its terms. All payments on Partner Loans shall be applied first
to accrued interest and second to outstanding principal. All Partner Loans shall
be evidenced by promissory notes of the Partnership.
Notwithstanding anything to the contrary herein, a Partner making a Partner
Loan pursuant to Section 6.2 hereof may, in its sole discretion, (i) make such
loan without any approval of the Management Committee, (ii) designate the
maturity of such loan (not to be less than 30 days nor more than 5 years) and
(iii) require that such loan be secured by the grant of a lien upon and security
interest in, the Assets (fully subordinated to all existing secured Partnership
debt to Persons other than the Partners, including future advances under and
renewals and extensions of, such debt). The Partners shall, or shall authorize
the General Manager to, execute and deliver all necessary promissory notes,
deeds of trust, security agreements and financing statements and other documents
as the lending Partner may reasonably request in order to evidence and secure
the Partner Loan made under Section 6.2. All Partner Loans shall be payable
without premium or penalty and, if Partner Loans exist as of any time to more
than one Partner then all liens and security interests provided by the
Partnership with respect to such Partner Loans shall be treated as being secured
and perfected as of the same time, with equal dignity, and otherwise in pari
passu.
ARTICLE XI
NO TRANSFERS OF INTERESTS OF PARTNERS
11.1 Transfers Restricted
(a) Neither Partner shall Transfer any part or all of its Partnership
Interest without the prior written consent of the other Partner, which consent
can be withheld unreasonably or otherwise, and then only if the Transfer would
not result in the "termination" of the Partnership pursuant to Section 708 of
the Code and the transferee is a United States person.
(b) In the event that a Partner shall propose to Transfer all or any part
of its Partnership Interest, the other Partner shall have the right to acquire
such Partnership Interest on the same terms as the proposed transferee would
have been able to acquire such Partnership Interest. No Transfer to a Person
shall be effective for any purpose unless and until: (i) the transferring
Partner shall have given the other Partner written notice of the terms of such
Transfer pursuant to Section 11.1, (ii) the other Partner shall have failed to
elect to acquire such Partnership Interest on such terms within 30 days after
its receipt of written notice of the terms of such Transfer, and (iii) the other
Partner shall have given its prior written consent to such Transfer. Neither
Partner shall withdraw from the Partnership without the prior written consent of
the other Partner. No Transfer of all or
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any part of a Partnership Interest shall be effective for any purpose unless and
until the transferee shall execute and deliver to the Partnership an instrument
in writing whereby such transferee shall legally and effectively assume and
agree to be bound by all of the transferor's obligations under this Agreement
or, in the case of a partial Transfer of such Partnership Interest, a pro rata
share of such obligations. The provisions of this paragraph shall not be
construed in derogation of paragraph (a) of this Section.
11.2 Tax Elections
All elections (and revocations or alteration of elections) for federal
income tax purposes will be made by the General Manager subject to the prior
approval of the Management Committee; provided however (i) the Partnership shall
make the election for the initial Partnership year of the Partnership under
Section 168(g)(7) of the Code unless RVC shall otherwise elect and (ii) in the
event of a Transfer of Partnership assets to a Partner or of all or part of a
Partnership Interest, at the request of the transferee, the Management Committee
shall cause the Partnership to elect, pursuant to Section 754 of the Code, or
the corresponding provision of subsequent law, to adjust the basis of the
Partnership property as provided by Sections 734 and 743 of the Code.
11.3 Capital Stock of Partners.
No Partner shall permit the transfer of ownership of its capital stock to
any Person to be registered on its stock transfer books unless and until the
other Partner shall have given its prior written consent to such Transfer.
Contemporaneous with the Commencement, the Company and RVC shall cause Beazer
West, Inc. to confirm and ratify the foregoing restrictions on transferability
of the capital stock of the Partners and of each direct and indirect subsidiary
of Beazer West, Inc. by which the Partners are controlled as wholly owned
indirect subsidiaries of Beazer West, Inc.
ARTICLE XII
DEFAULT AND DISSOLUTION
12.1 Events of Default
The occurrence of any of the following events shall constitute an event of
default ("Event of Default") hereunder on the part of the Partner with respect
to which such event occurs ("Defaulter") if within 30 days following notice of
such default from the other Partner (10 days if the default is due solely to the
nonpayment of money), the Defaulter fails to pay such money, or in the case of
non-monetary defaults, fails to commence substantial efforts to cure such
default or thereafter fails within a reasonable time to prosecute to completion
with diligence and continuity the curing of such default; provided, however,
that the occurrence of any of the events described in clauses (d) through (k)
below shall constitute
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an Event of Default immediately upon such occurrence without any requirement of
notice or passage of time except as specifically set forth in any such clause:
(a) the default on a Partner Loan made under Section 6.2.3 as a
result of the failure by a Partner to make any additional capital
contribution required to be made by it pursuant to the provisions of
Section 6.2 and the other Partner does not provide capital contributions
sufficient to cure such default;
(b) the violation by a Partner (or with respect to a Partner) of
any of the restrictions set forth in Article XI;
(c) the failure of a Partner's transferee to assume in writing
and agree to be bound by such Partner's obligations, as provided in Section
11.1;
(d) institution by a Partner of proceedings of any nature under
any laws of the United States or of any state, whether now existing or
subsequently enacted or amended, for the relief of debtors wherein such
Partner is seeking relief as debtor (including, without limitation,
proceedings seeking dissolution or reorganization or the appointment of a
receiver, trustee, custodian or liquidator for such Partner or a
substantial portion of its property, Assets or business or to effect a plan
or other arrangement with the creditors of such Partner);
(e) a general assignment by a Partner for the benefit of
creditors or the filing by a Partner of any answer admitting the
jurisdiction of the court and the material allegations of an involuntary
petition filed against such Partner in any bankruptcy, insolvency or
similar proceeding;
(f) the institution by a Partner of a proceeding under any
section or chapter of the Bankruptcy Code or any other bankruptcy,
insolvency or other similar law as now existing or hereafter amended or
becoming effective;
(g) the commencement of involuntary proceedings or the filing of
an involuntary petition against a Partner under the Bankruptcy Code or any
other bankruptcy, insolvency or other similar law, which proceeding or
petition shall not be dismissed within 60 days after the commencement or
filing thereof, as the case may be;
(h) a proposed plan of arrangement or other action by a Partner's
creditors taken as a result of a general meeting of the creditors of such
Partner;
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(i) the appointment of a receiver, trustee, custodian or like
officer for a Partner or of a substantial part of the property, assets or
business of a Partner, which receivership, trusteeship, custodianship, as
the case may be, remains undischarged and undismissed for a period of 30
days from the date of its imposition;
(j) admission by a Partner in writing of its inability to pay its
debts as they mature;
(k) attachment, execution or other judicial seizure of all or any
substantial part of a Partner's assets or of all or any part of such
Partner's Partnership Interest if such attachment, execution or seizure
relates to an amount in excess of the lesser of (y) [$10,000,000] and (z)
25% of such Partner's net worth and remains undismissed or undischarged for
a period of 15 days after the levy thereof; provided, however, that said
attachment, execution or seizure shall not constitute an Event of Default
hereunder if such Partner posts a bond sufficient to fully satisfy the
amount of such claim or judgment within 15 days after the levy thereof and
such Partner's assets are thereby released from the lien of such
attachment, execution or seizure;
(l) the material breach of any Partner of this Agreement; and
(m) the use by any Partner of Partnership funds for purposes
other than as provided for in this Agreement.
12.2 Causes of Dissolution
The Partnership shall be dissolved and its business wound up on the
earliest to occur of:
(i) December 31, 2050;
(ii) the written direction of all the Partners determining that
the Partnership should be dissolved;
(iii) the Partnership or either Partner having been adjudicated
bankrupt;
(iv) the occurrence of an Event of Default and the non-defaulting
Partner electing to dissolve the Partnership as provided in
Section 12.3;
(v) the sale or other disposition of all or substantially all of
the Partnership's assets; and
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(vi) upon the election of either Partner, if at the time of such
election the Partnership shall have sustain cumulative net losses
from operations, as of any time, aggregating more than $70
million. As used herein, "cumulative net losses" means the
cumulative loss in excess of cumulative profits for the period
from inception of the Partnership to the date of determination,
determined in accordance with generally accepted accounting
principles (except as has been previously agreed by Management
Committee).
12.3 Election of Non-Defaulting or Advancing Partner
(a) Upon the occurrence of an Event of Default by either Partner, the other
Partner (the "Non-Defaulter") shall have the right to acquire the Partnership
Interest of the Defaulter for a purchase price equal to 90% of the excess of (i)
the Net Distribution Value of such Partnership Interests as of the date of the
notice referred to in the next succeeding sentence (the "Pricing Date") over
(ii) the aggregate amount of all distributions made to the Defaulter in respect
of such Partnership Interest during the period between the Pricing Date and the
date of the closing of such purchase. In furtherance of such right, the
Non-Defaulter may notify the Defaulter at any time within 60 days following an
Event of Default [(or within 60 days following the default of a Partner Loan in
the case of a Partner exercising its right as a Material Lender pursuant to
paragraph (d) hereof)] with respect to the Defaulter of the election by the
Non-Defaulter to institute the appraisal procedure set forth in Article XVI for
the purpose of determining the Net Distribution Value of the Defaulter's
Partnership Interest as of the Pricing Date. Within five days after the
completion of such appraisal proceeding, the Non-Defaulter may notify the
Defaulter of its election to purchase such Partnership interest in accordance
with this Section 12.3.
(b) If the Non-Defaulter does not elect to acquire the Partnership Interest
of the Defaulter as set forth in paragraph (a) above, the Non-Defaulter may
elect to dissolve and terminate the Partnership pursuant to Section 12.2 by
written notice to the Defaulter. The right of the Non-Defaulter to institute the
procedures for purchase of the Defaulter's Partnership Interest as set forth in
this Section 12.3 shall continue until the Non-Defaulter elects to exercise its
right to terminate the Partnership as provided in this paragraph (b) or until
the Event of Default shall have been cured, provided that such right shall
continue regardless of such cure with respect to any proceeding instituted by
the delivery of notice pursuant to Section 12.3(a) prior to such cure.
(c) In the event of an exercise of the Non-Defaulter's right to purchase
the Partnership Interest of the Defaulter, the closing of the purchase and sale
of such Partnership Interest shall
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occur on the date 60 days after the final determination of the fair market value
of such Partnership Interest or on such earlier date as the Non-Defaulter shall
specify by written notice to the Defaulter. The purchase price, determined in
the manner as herein provided, shall be payable by certified or bank check or
wire transfer in same-day funds at the closing. At the closing, the Defaulter
shall transfer its Partnership Interest to the Non-Defaulter free and clear of
any liens, encumbrances and interests of third parties and shall execute and
deliver, or caused to be executed and delivered, any and all documents required
to fully transfer such Partnership Interest to the Non-Defaulter, including, but
not limited to, any documents required to release any interest of any other
Person who may claim an interest in such Partnership Interest. Any monetary
default by the Defaulter must be cured out of the proceeds from such sale at the
closing and any interest and principal owing on any outstanding Partner Loan of
the Defaulter must be paid in full. Following the date of closing, the Defaulter
shall have no further rights to any distributions from, or any income of, the
Partnership attributable to any period and all such rights shall vest in the
Non-Defaulter.
(d) In the event the Partnership is in default in the payment when due of
any Partner Loan held by a Partner which is a Material Lender, the Partner which
is a Material Lender shall have the right to exercise the rights of a
Non-Defaulter under this Section 12.3, provided that such right will terminate
in the event all defaults are cured by the Partnership prior to the delivery of
the Notice pursuant to Section 12.3(a).
12.4 Replacement of the General Manager of the Partnership.
Upon the occurrence of an Event of Default, the authority of the Defaulter
to call for the removal of the General Manager provided for in Section 7.7 shall
immediately be suspended and the Non-Defaulter shall have the right to appoint
the General Manager of the Partnership and such General Manager shall take
possession and control of the Partnership property and all books, records, bank
accounts and other documents related to the Partnership property and shall
perform all management responsibilities of the General Manager under this
Agreement.
12.5 Dissolution and Winding Up
Upon dissolution of the Partnership:
(a) an accounting shall be made of the Partnership, the capital account of
each Partner and the assets, liabilities and operations of the Partnership from
the date of the last accounting period by the terms hereof to the date of such
dissolution;
(b) the Management Committee (or the Non-Defaulter in the case of an Event
of Default) shall act as Liquidating Trustee, and
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shall first make a reasonable effort to sell the business of the Partnership as
an ongoing business, and then liquidate the business of the Partnership in an
orderly manner, in which case, all or part of the assets, as determined by the
Liquidating Trustee, shall be sold and the proceeds thereof distributed in the
following order of priority unless otherwise required by mandatory provisions of
applicable law:
(i) First, to the payment of creditors of the Partnership, other
than the Partners, in the order of priority provided by law;
(ii) Second, to the pro rata payment to the Partners for loans
made by them to the Partnership in accordance with this Agreement; and
(iii) Third, to the Partners in accordance with their Percentage
Interests; provided, however, that the Liquidating Trustee may place in
escrow a reserve of cash or other assets of the Partnership for contingent
liabilities in an amount determined by the Liquidating Trustee as
appropriate for such purposes;
(c) during the period of liquidation, all Partners shall continue all
economic attributes of the Partnership attributable to their interest in the
Partnership in the same manner and proportion as before the liquidation;
(d) the Liquidating Trustee, and all agents, officers, directors, partners,
(if any) of the Liquidating Trustee, shall be indemnified and held harmless by
the Partnership from and against any and all claims, demands, liabilities,
costs, damages and causes of action of any nature whatsoever, arising out of or
incidental to the taking of any action authorized under, or within the scope of
this Article XII, or to any officer or director thereof while the Liquidating
Trustee was so acting; provided, however, that neither the Liquidating Trustee
nor any officer or director thereof shall be entitled to indemnification
hereunder where the claim at issue arose out of the following:
(i) a matter entirely unrelated to the duties of the Liquidating
Trustee under the provisions of this Section 12.5;
(ii) the proven gross negligence or willful misconduct of the
Liquidating Trustee, or any officer or director thereof, or
(iii) the proven breach by the Liquidating Trustee of its
obligations under this Section 12.5.
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The indemnification rights herein contained shall be cumulative of, and in
addition to, any and all other rights, remedies and recourses to which the
Liquidating Trustee, or any officer or director thereof, shall be entitled, at
law or in equity.
ARTICLE XIII
ACCOUNTING, BOOKS AND RECORDS AND REPORTS
13.1 Fiscal Year
The fiscal year of the Partnership shall commence on July 1 of each
calendar year and end on June 30 of the next succeeding calendar year.
13.2 Books and Records
The General Manager shall keep, or cause to be kept, full and accurate
records of all transactions of the Partnership in accordance with generally
accepted accounting practices applicable in the United States (except as agreed
by the Management Committee or as mandated under the Code). Such books and
records shall be maintained, for financial reporting purposes, on the accrual
basis and, to the extent possible, shall, at all times, be kept at the principal
office of the Partnership and shall be open during reasonable business hours for
the reasonable inspection and examination by the Partners and their authorized
agents and representatives, who shall have the right to make copies thereof. The
Partners and their authorized agents and representatives shall also have the
right, at all times, to enter the Project and to inspect and observe the same.
13.3 Reports
Within 45 days following the end of each fiscal quarter, the General
Manager shall cause to be prepared and submitted to each Partner an unaudited
balance sheet and an unaudited income statement of the Partnership. In addition,
as soon as practicable, but in no event later than 45 days after the close of
each fiscal year of the Partnership, the General Manager shall cause to be
delivered to each Partner, in respect of the immediately preceding fiscal year,
an audited balance sheet of the Partnership as at the end of, and the related
audited statements of income, reinvested earnings and changes in financial
position for, such fiscal year prepared in accordance with generally accepted
accounting principles consistently applied and accompanied by a report thereon
of any nationally recognized firm of independent public accountants selected by
the Management Committee to the effect that such financial statements have been
prepared in accordance with generally accepted accounting principles and present
fairly the Partnership's financial position, results of operation and changes in
financial position. Also, the General Manager shall furnish to each Partner
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such other information (including financial projections) respecting the
properties, business affairs and financial condition and/or operations of the
Partnership as such Partner may from time to time reasonably request.
13.4 Tax Information
(a) By the 10th day of the fourth month following each fiscal year of the
Partnership, the General Manager, at the expense of the Partnership, shall cause
to be delivered to the Partners such information as shall be necessary
(including a statement for that year of each Partner's share of net income, net
gains, net losses and other items of the Partnership) for the preparation by the
Partners of their federal, state and local income and other tax returns.
(b) The General Manager shall furnish to each Partner a copy of each
federal income tax return, for review and approval by such Partner at least
thirty days prior to the anticipated filing date of such return.
13.5 Tax Matters Partner
The Partners designate the Company as the tax matters partner of the
Partnership pursuant to Section 6231(a)(7) of the Code and authorize the General
Manager to take any and all action necessary to confirm such designation.
13.6 Auditors
The Management Committee shall appoint the auditors of the Partnership
which shall be a nationally recognized firm of independent public accountants.
ARTICLE XIV
PARTNERSHIP FUNDS AND BANK ACCOUNTS
The General Manager shall open and maintain (in the name of the
Partnership) a separate bank account or accounts in banks or savings and loan
associations, the deposits of which within certain statutory limits are insured
by an agency of the United States government, in which shall be deposited all
funds of the Partnership. The funds of the Partnership shall not be commingled
with the funds of any other Person. Withdrawals from such account or accounts
shall be made upon the signature or signatures of such person or persons as the
Partners shall designate. The funds of the Partnership shall be invested and
reinvested in accordance with such investment policies and guidelines as the
Management Committee may from time to time adopt, except that no such funds may
be invested in connection with any acts otherwise prohibited by this Agreement.
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ARTICLE XV
BUY-SELL OPTION
15.1 General
(a) Except following the initiation and during the pendency of the default
buy-out mechanism specified in Section 12.3, each Partner shall have, and is
hereby granted, a right to be exercised by notice (the "Buy-Sell Notice") to the
other Partner to institute a buy-sell procedure, pursuant to which the Partner
giving the Buy-Sell Notice (the "Tendering Partner") shall offer to purchase the
Partnership Interest of the Partner receiving the Buy-Sell Notice (the
"Recipient Partner") for the price set forth in the Buy-Sell Notice. Neither
Partner may institute the buy-sell procedure set forth herein prior to July 1,
1994 except that a Partner who has the right under Section 12.3(d) to elect to
initiate the buy-out mechanism under Section 12.3 shall have the right, as an
alternative to his rights under Section 12.3, to institute the buy-sell
procedure set forth herein; provided that in no event shall a Defaulting Partner
be entitled to initiate such proceedings.
(b) Unless the Tendering Partner has theretofore withdrawn its Buy-Sell
Notice by written notice to the Recipient Partner, no later than 60 days
immediately succeeding the day on which the Recipient Partner receives the
Buy-Sell Notice, the Recipient Partner must notify the Tendering Partner of its
election either (i) to sell to the Tendering Partner the Partnership Interest of
the Recipient Partner for the price set forth in the Buy-Sell Notice or (ii) to
purchase the Partnership Interest of the Tendering Partner for the price set
forth in the Buy-Sell Notice.
(c) The failure of the Recipient Partner to notify the Tendering Partner
within the aforesaid 60-day period of its election to buy or to sell in
accordance with paragraph (b) above shall conclusively be deemed for all
purposes to be an election by the Recipient Partner to have agreed to sell to
the Tendering Partner its Partnership Interest at the price set forth in the
Buy-Sell Notice; such deemed election shall be treated as having occurred on the
last day of such 60-day period. Notwithstanding the foregoing, the right to
institute the buy-sell procedure set forth in this Section 15.1 may not be
exercised by a Partner following the initiation and during the pendency of the
default buy-out mechanism specified in Section 12.3.
(d) Subject to Section 15.3, the closing of the purchase and sale of a
Partnership interest pursuant to this Section 15.1 (the "Buy-Sell Closing")
shall occur on the date 90 days after receipt of the relevant Buy-Sell Notice or
on such earlier date as the purchasing Partner shall specify by written notice
to the selling Partner. Any interest and principal owing on any Partner Loan
held by the selling Partner shall be paid in full at the Buy-Sell Closing. The
purchase price specified in the Buy-Sell
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Notice, as adjusted pursuant to the provisions of Section 16.3, shall be payable
by certified or bank check or wire transfer in same-day funds at the Buy-Sell
Closing.
(e) In the event of a Buy-Sell Closing pursuant to this Section 15.1
involving a selling Partner with respect to whom an Event of Default shall have
occurred, such Buy-Sell Closing shall not relieve or discharge such selling
Partner with respect to any liability it may have on account of such Event of
Default and such selling Partner shall remain liable to the Partnership and to
the purchasing Partner therefor. Following the Buy-Sell Closing, the selling
Partner shall have no further rights to any distributions from, or any income
from, the Partnership attributable to any period and all such rights shall vest
in the purchasing Partner.
15.2 Specific Performance
It is expressly agreed that the remedy at law for breach of any of the
obligations set forth in this Article XV or Section 12.3 is inadequate in view
of (i) the complexities and uncertainties in measuring the actual damages that
would be sustained by reason of the failure of a Partner to comply fully with
each of said obligations, and (ii) the uniqueness of the Partnership business
and the Partnership relationship. Accordingly, each of the aforesaid obligations
shall be, and is hereby expressly made, enforceable by specific performance.
15.3 Governmental Compliance
In the event that governmental filings must be made, approvals obtained
and/or waiting periods observed before any closing may be legally consummated
pursuant to Section 12.3 or 15.1, the date of such closing shall,
notwithstanding any provision of this Agreement to the contrary, unless
otherwise agreed by the Partners, be the fifth business day following the latest
to occur of the making of such filings, the receipt of such approvals and the
expiry of such waiting periods. The Partners shall use their best efforts to
make any such filings, obtain any such approvals and/or cause any such waiting
periods to run, as quickly as possible.
ARTICLE XVI
DETERMINATION OF NET DISTRIBUTION VALUE
16.1 General
The provisions of this Article XVI shall apply with respect to the
determination of the Net Distribution Value of any Partnership Interest pursuant
to this Agreement.
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16.2 Certain Definitions
As used herein, the following terms shall have the meanings specified
below:
(a) "Appraisal Panel" has the meaning specified in Section 16.3.
(b) "Fair Market Value" means the cash price which the
Partnership Fixed Assets should bring at a fair sale between a
sophisticated buyer and a sophisticated seller both of whom are acting
prudently and knowledgeably, assuming (i) that the price is not affected by
undue stimulus, (ii) that the Partnership Fixed Assets are sold on the
relevant Valuation Date subject to this Agreement and all other agreements
(including leases, management agreements, cement purchase and sale orders,
and service agreements), liens and encumbrances then in effect with respect
to the Partnership Fixed Assets and (iii) that the buyer will assume all
guarantees and other contingent liabilities and obligations related to the
Partnership Fixed Assets.
(c) "Net Distribution Value", when used with reference to any
Partnership Interest, shall mean the amount, if any, that the owner of such
Partnership Interest would be entitled to receive from the Partnership
pursuant to Section 12.5 (including any amount attributable to such
Partnership Interest which may be retained by the Partnership in the
exercise of the set-off right described in Section 22.5 and any amount
attributable to such Partnership Interest which may be applied to the
payment of a Partner Loan in accordance with Section 6.2) in connection
with the dissolution and winding up of the Partnership on the relevant
Valuation Date if, immediately prior to such dissolution and winding up,
(i) the Partnership Fixed Assets had been sold for cash on the Valuation
Date at its then Fair Market Value, (ii) the Partnership had received, as
net cash proceeds from such sale, an amount equal to the Net Fair Market
Value as of the valuation date, (iii) all Non-Fixed Assets Property had
been sold at its net book value as reflected on the Partnership's books as
of the relevant Valuation Date, (iv) the Partnership had received cash
equal to the net book value of the Non-Fixed Assets Property as of the
Valuation Date, (v) all fixed liabilities of the Partnership (other than
those taken into account in determining Fair Market Value) were satisfied
as of the Valuation Date and (vi) reserves for contingent liabilities
(other than contingent liabilities taken into account in determining Fair
Market Value) in the amounts reflected on the Partnership's books as of the
Valuation Date were provided for.
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(d) "Net Fair Market Value" means the Fair Market Value less all
reasonable closing costs and expenses which would be normally incurred by a
seller in connection with the sale of the Partnership Fixed Assets under
the circumstances described in the definition of "Fair Market Value", as
determined by the Appraisal Panel, including, without limitation, such
brokerage commissions, legal fees, title insurance premium expense, escrow
fees, closing costs and other similar expenses (excluding transfer taxes)
as would be normally payable by such a seller of the Partnership Fixed
Assets.
(e) "Non-Fixed Assets Property" means all assets of the
Partnership of every kind and description and wherever located, including
all cash on hand, accounts receivable, notes receivable, contract rights,
inventory, work in process, supplies and other personalty, but excluding
the Partnership Fixed Assets.
(f) "Partnership Fixed Assets" means all real property (or any
interest therein) plant and equipment owned by the Partnership and all
improvements and fixtures thereon.
(g) "Transferee" means the Non-Defaulter that has elected to
purchase the relevant Partnership Interest pursuant to Section 12.3.
(h) "Transferor" means the Defaulter whose Partnership Interest
is being acquired pursuant to Section 12.3.
(i) "Valuation Date" means the date as of which the Net
Distribution Value of any Partnership Interest is to be determined under
this Agreement.
16.3 Determination of Net Fair Market Value; Appraisal Proceedings
(a) Whenever this Agreement provides for the determination of the Net
Distribution Value of any Partnership Interest, the Transferor and the
Transferee shall consult for the purpose of appointing a mutually acceptable
appraiser, and if such parties agree on such appraiser, such appraiser shall
constitute the "Appraisal Panel". If the Transferor and the Transferee are
unable to agree on a mutually acceptable appraiser within five days after the
date on which such appraisal procedure is commenced, then the Appraisal Panel
shall consist of three appraisers and, toward that end, each of the Transferor
and the Transferee shall, within 10 days after the expiration of such five-day
period, appoint an appraiser. The two appraisers so appointed shall, within 10
days after the second of them has been appointed, appoint a third appraiser, and
such appraisers shall constitute the "Appraisal Panel". If the two appraisers
selected by the Transferor and the Transferee are unable
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to agree upon the third appraiser within such 10-day period, either the
Transferor or the Transferee may apply to the Senior Judge of the United States
District Court of the Northern District of Texas for the appointment of a third
appraiser. If either the Transferor or the Transferee fails to appoint an
appraiser within the five-day period referred to above, the appraiser appointed
by the other shall be deemed to constitute the "Appraisal Panel". Each appraiser
shall be an independent appraiser and financial expert who is generally
recognized as having current competence in the valuation of properties similar
to the Partnership Fixed Assets which are located in the Market.
(b) The Appraisal Panel shall be instructed to determine, within 45 days of
its appointment in accordance with paragraph (a) above, the Fair Market Value
and Net Fair Market Value as of the relevant Valuation Date. The Fair Market
Value determinations of each member of the Appraisal Panel shall be averaged and
such average shall constitute the determination of the Appraisal Value; provided
that if the Appraisal Panel shall consist of three appraisers and the Fair
Market Value determination of one (and only one) of the appraisers shall differ
by more than 20% from the second highest Fair Market Value determination then
the Fair Market Value determination differing by more than 25% of all three
appraisers, if any, shall be excluded, and the remaining two Fair Market Value
determinations shall be averaged and such average shall constitute the
determination of the Appraisal Panel. The Appraisal Panel shall furnish the
Transferor and the Transferee with a written report of its determination within
the 45-day period referred to above, which report shall (i) be signed by each
member of the Appraisal Panel, (ii) specify the amount determined by the
Appraisal Panel to be the Fair Market Value as of the relevant Valuation Date
and (iii) specify the amount determined by the Appraisal Panel to be the Net
Fair Market Value as of such Valuation Date. The determination of the Fair
Market Value by the Appraisal Panel shall be final and binding upon the
Transferor and the Transferee. A copy of such report shall be promptly delivered
to the Partnership's independent accountants.
(c) The fees and expenses of the appraiser appointed by the Transferor
shall be paid by the Transferor, the fees and expenses of the appraiser
appointed by the Transferee shall be paid by the Transferee and the fees and
expenses of the third appraiser, together with any other costs and expenses
incurred in connection with the appraisal proceeding, shall be divided equally
between the Transferor and the Transferee.
16.4 Determination of Net Distribution Value
(a) Whenever this Agreement provides for the determination of the Net
Distribution Value of any Partnership Interest, such determination shall be made
by the Partnership's independent accountants appointed in accordance with this
Agreement.
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In making such determination, such independent accountants (i) shall be bound by
the determination of Net Fair Market Value set forth in the relevant appraisal
report delivered to the pursuant to Section 16.3(b), (ii) shall take into
account all relevant provisions of this Agreement, (iii) shall ascertain the net
book value of the Non-Fixed Assets Property and (iv) to the extent not
inconsistent with the provisions of this Agreement, shall be guided by generally
accepted industry practices.
(b) Whenever this Agreement provides for the determination of the Net
Distribution Value of any Partnership Interest, the Partnership's independent
accountants shall be requested to make such determination within 15 days after
the related report of the Appraisal Panel is delivered pursuant to paragraph (b)
of Section 16.3. Following their determination of the Net Distribution Value of
any Partnership Interest, the Partnership's independent accountants shall submit
a written report to the relevant Transferor and Transferee, which report shall
(i) incorporate the relevant report of the Appraisal Panel, (ii) specify the
amount of such Net Distribution Value and demonstrate in reasonable detail the
manner in which such amount was calculated, (iii) contain a reasonable
explanation of the principles applied by them in connection with such
determination and (iv) contain a copy of their work papers underlying such
report.
ARTICLE XVII
NOTICES
Whenever any notice is required or permitted to be given under any
provision of this Agreement, such notice shall be in writing, signed by or on
behalf of the person giving the notice and shall be deemed to have been given on
the earlier to occur of (i) actual delivery or (ii) three business days after
mailing by certified mail, postage prepaid, return receipt requested, addressed
to the person or persons to whom notice is to be given as follows (or at such
other address as shall be stated in a notice similarly given):
(a) if to the Company or RVC, such notice shall be given at the following
address:
P. O. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
(b) if to the Partnership or the General Manager, such notice shall be
given at the following address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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ARTICLE XVIII
AMENDMENTS AND WAIVERS
No amendment, modification or waiver of this Agreement, or any part hereof,
shall be valid or effective unless in writing and signed by the Partners. No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other condition or subsequent breach, whether of like or different
nature.
ARTICLE XIX
APPLICABLE LAWS
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
ARTICLE XX
PRIOR AGREEMENTS SUPERSEDED
This Agreement, together with all other agreements and instruments executed
and delivered by the Partners at the Commencement hereunder, constitutes the
entire agreement of the Partners pertaining to the subject matter hereof and
supersedes in its entirety all prior agreements, whether written or oral,
between the parties hereto.
ARTICLE XXI
TIME OF THE ESSENCE
Time is of the essence in the performance of all of the obligations of the
Partners provided for in this Agreement.
ARTICLE XXII
MISCELLANEOUS PROVISIONS
22.1 Titles and Captions
All Article and Section titles or captions in this Agreement are for
convenience and reference only, shall not affect the meaning of any provision of
this Agreement and shall not be taken into account in construing any such
provision.
22.2 Pronouns and Plurals
Whenever the context may require, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa.
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22.3 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
22.4 Further Assurances
The parties hereto shall execute and deliver all documents and instruments,
provide all information and take such action as may be reasonably necessary.
22.5 Creditors
None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditors of the Partnership.
22.6 Exercise of Rights
No failure or delay on the part of either Partner or the Partnership in
exercising any right, power or privilege hereunder and no course of dealing
between the Partners or between the Partners and the Partnership shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein expressly provided are cumulative and not exclusive of any other rights
or remedies which a Partner or the Partnership would otherwise have at law or in
equity or otherwise.
22.7 Waiver
Neither a waiver by a Partner of a breach or of a default under any
provision of this Agreement, nor the failure of a Partner, on a one or more
occasions, to enforce any provision of this Agreement or to exercise any right,
remedy or privilege hereunder shall be construed as a waiver of any subsequent
breach or default of a similar nature, or a waiver of any such provisions,
rights, remedies or privileges hereunder.
22.8 No Agency
Except as specifically provided herein or by mandatory provision of
applicable law, this Agreement shall not cause one Partner to become the agent
or legal representative of the other Partner. Except as otherwise specifically
provided in this Agreement, neither Partner shall have any authority to act for,
or to assume any obligation or responsibility of, the other Partner or the
Partnership.
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22.9 Attorneys' Fees
If either Partner commences an action against the other Partner to
interpret or enforce any of the terms of this Agreement or for damages or
default by such other Partner, the losing or defaulting Partner shall pay to the
prevailing Partner all reasonable fees, costs and expenses (including the
reasonable fees and expenses of attorneys and witnesses) incurred in connection
with the prosecution or defense of such action, whether or not the action is
prosecuted to a final judgment; provided, however, in the event there is no
clear prevailing party, such fees, costs and expenses shall be borne as
determined by the court.
22.10 Interpretation
In this Agreement, unless a contrary intention appears, the words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision. No provision of this Agreement shall be interpreted or construed
against either Partner solely because that Partner or its legal representative
drafted such provision.
22.11 Severability
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the invalid, illegal or unenforceable provision
shall be reformed so as to accomplish as nearly as practicable the intent and
purpose of this Agreement in a manner which is valid, legal and enforceable and
the validity, legality and enforceability of the remaining provisions hereof, or
of such provision in other respects, shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have subscribed to this Agreement as
of the date and year first above written.
RIVERSIDE CEMENT COMPANY
By: /s/ Illegible
------------------------------------
Title: Vice President, General Counsel
and Secretary
RVC VENTURE CORP.
By: /s/ Illegible
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Title: VP
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EXHIBIT A
Schedule of Excluded Assets
1. Any and all real and personal property interests held or owned in whole
or in part by the Company (or any affiliate thereof) located in Los Angeles
County, California, except for Permit No. ▇▇▇ (▇▇▇ "▇▇▇▇▇ Lease") dated as of
November 29, 1990 granted by the City of Los Angeles to RIC Company and the
assets related thereto, such excluded assets to include without limitation the
property described on Appendix A-1 attached hereto.
2. Any and all real and personal property interests held or owned in whole
or in part by the Company (or any affiliate thereof) located in ▇▇▇▇▇▇ County,
California, including without limitation the property described on Appendix A-2
attached hereto.
3. That certain stockpile of approximately 90,000 tons of oil-containing
soil segregated within the Company's raw material storage area located on the
Crestmore plant property which soil was excavated by the Company in conjunction
with the removal and closure of a former fuel oil storage tank upon the
Crestmore plant property.
4. All of those certain improvements and fixtures on which the Company's
electric power generating plant at Oro Grande, San Bernardino County, California
is located or which comprise or form a part of such electric power generating
plant, which said property is more particularly described on Exhibits B and C of
that certain Ground Lease and Reciprocal Easement Agreement (the "Ground Lease")
dated as of June 30, 1990, by and between Beazer West, Inc., a Delaware
corporation and the parent corporation of the Company ("Beazer West"), and the
Company. All of the equipment, machinery and other personal property used in
connection with said electric power generating plant (said personal property
being more particularly described on Exhibit A of said Ground Lease) was
previously conveyed by the Company to Beazer West in the form of a dividend
pursuant to the Unanimous Written Consent of the Board of Directors of the
Company dated June 27, 1990, and, therefore, are not to be transferred and
conveyed to the Partnership.
5. Applications for Permits to Construct and Permits to Operate of the
Company filed with the South Coast Air Quality Management District related to
the construction of a concrete batch plant, asphalt batch plant and aggregate
processing plant on the Crestmore plant property, any permits subsequently
issued with respect thereto (at the request of the Company, the parties to the
Agreement will execute a memorandum of ownership of such applications and
permits, showing the Company as the true and lawful owner of all right, title
and interest in and to such applications and permits and providing that the
Company shall be entitled to conduct all operations applied for pursuant to such
applications and permitted under such permits.
6. Pending Application for Mining Permit and Reclamation Plan of the
Company filed with the Riverside County Planning Department for the Crestmore
Quarry on the Crestmore plant property, and any permit(s) subsequently issued
with respect thereto (at the request of the Company, the parties to the
Agreement will execute a memorandum of ownership of such application and
permits, showing the Company as the true and lawful owner of all right, title
and interest in and to such application and permits and providing that the
Company shall be entitled to conduct all operations applied for pursuant to such
application and permitted under such permits).
7. Any and all rights relating to or arising out of any lawsuits to which
the Company is a party involving the existence of asbestos or asbestos
containing materials, including those certain lawsuits identified on Appendix
A-3 entitled "Master List-Asbestos Lawsuits" attached hereto; such rights to
include, without limitation all rights to recoveries or reimbursement for costs
and settlements incurred or to be incurred in connection therewith.
8. Any and all accounts receivable purchased and sold pursuant to the terms
of: (i) that certain Asset Purchase and Sale Agreement dated as of September 29,
1989, by and among ▇▇▇▇▇▇▇-▇▇▇▇ Cement Company, Abacus Funding co., Beazer
Materials & Services, Inc., Manufacturers Hanover Trust Company, Manufacturers
Hanover Agent Bank Services Corporation, Davidson Mineral Properties, Inc., The
Stone Man, Inc., Associated Asphalt Products, Inc., ▇▇▇▇▇▇ Construction Co.,
Tugalo Construction Company, Inc., ▇▇▇▇▇ Construction Company, Inc., and
▇▇▇▇▇▇▇-▇▇▇▇ Cement Company of South Carolina; and (ii) that certain Asset
Purchase and Sale Agreement dated as of September 29, 1989, by and among
▇▇▇▇▇▇▇-▇▇▇▇ Cement Company, Beazer Materials & Services, Inc., Manufacturers
Hanover Trust Company, Manufacturers Hanover Agent Bank Services Corporation,
Davidson Mineral Properties, Inc., The Stone Man, Inc., Associated Asphalt
Products, Inc., ▇▇▇▇▇▇ Construction Co., Tugalo Construction Company, Inc.,
▇▇▇▇▇ Construction Company, Inc., and ▇▇▇▇▇▇▇-▇▇▇▇ Cement Company of South
Carolina.
9. Any and all rights in, to and under (including any and all rights in, to
and under the equipment covered thereby) that certain Master Rental Agreement
dated March 7, 1988, by and between American Commercial Terminals, Inc. and
▇▇▇▇▇▇▇-▇▇▇▇ & Company, Inc. regarding the lease of certain computer equipment,
and all existing rights to use any software or proprietary information
associated therewith.
10. Any and all rights in, to and under (including any and all rights in,
to and under the equipment covered thereby) that certain Master Rental Agreement
dated September 4, 1987, by and between American Commercial Terminals, Inc. and
▇▇▇▇▇▇▇-▇▇▇▇ & Company, Inc. regarding the lease of certain computer equipment,
and all existing rights to use any software or proprietary information
associated therewith.
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11. Any and all rights in, to and under (including any and all rights in,
to and under the equipment covered thereby) that certain Purchase Order No.
21635 dated April 16, 1990, by and between Racal-Milgo Information Systems and
▇▇▇▇▇▇▇-▇▇▇▇ & Company, Inc. regarding the lease of certain computer equipment
and all existing rights to use any software or proprietary information
associated therewith; together with all rights in, to and under that certain
Maintenance Agreement for Racal-Milgo Equipment and Diagnostic Controllers dated
July 12, 1988 by and between Racal-Milgo Information Systems and ▇▇▇▇▇▇▇-▇▇▇▇ &
Company, Inc.
12. Deed of Trust Notes dated December 30, 1987 and May 16, 1988, each by
Southern Mutual Corporation payable to the order of ▇▇▇▇▇▇▇-▇▇▇▇ Cement Company
in the original principal amount of $1,248,500 and $150,000, respectively,
executed in connection with the sale of the ▇▇▇▇▇▇ Quarry property.
13. Those certain repair parts for kiln and pre-kiln assets identified on
Appendix A-4 attached hereto.
14. All funding with respect to the Beazer West, Inc. Pension Plan other
than that to be transferred to the Venture's Pension Plan pursuant to the
provisions of Section 6.3(b)(ii) of the Agreement.
15. The following contracts were in existence as of the Commencement Date
but are not to be assigned by the Company and shall not constitute Assumed
Obligations. Rather, the Company is obligated to and shall acquire the
underlying assets which are the subject of said contracts and transfer and
convey said assets to the Partnership.
a. Receivable Purchase Agreement, dated September 29, 1989, by and among
▇▇▇▇▇▇▇-▇▇▇▇ Cement Company (as "Seller"), Beazer PLC, Cooperative
Vereniging "ESC Securitization" U.A., the other sellers named therein, and
Citibank, N.A. as Agent. As of the Commencement Date, Beazer West
substituted its intercompany account payable to the Company for the third
party accounts receivable of the Company which are, in part, the subject of
this Agreement. As the same are released by Citibank, N.A., the
intercompany account payable of Beazer West will be paid.
b. (i) Agreement and Lease dated as of September 19, 1989, by and between
▇▇▇▇▇▇▇-▇▇▇▇ & Company, Inc., as Lessee, and Security Pacific Credit
Company, as Lessor; and (ii) Subsidiary Agreement dated September 28, 1989,
by and between ▇▇▇▇▇▇▇-▇▇▇▇ & Company, Inc. and ▇▇▇▇▇▇▇-▇▇▇▇ Cement
Company. While the obligations and liabilities under these contracts are
not Assumed Obligations, the equipment leased under these contracts was
transferred and conveyed to the Partnership as of the Commencement Date.
c. Agreement and Lease dated as of June 15, 1989, by and between Mellon
Financial Services Corporation #3, as Lessor,
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and ▇▇▇▇▇▇▇-▇▇▇▇ & Company, Inc., as Lessee. While the obligations and
liabilities under this contract are not Assumed Obligations, the equipment
leased under this contract was transferred and conveyed to the Partnership
as of the Commencement Date.
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APPENDIX A-1
All of the real property located in Los Angeles County, California, covered
by the following Assessor's Parcel Numbers:
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APPENDIX A-2
All that real property situated in the State of California, County of ▇▇▇▇▇▇,
City of none described as follows:
DIVISION A
FEE LOTS WITHIN TOWNSITE OF VOLCANO
BLOCK 1
Lots 2, 3, 5, 17, 18, 19, 20, 21, 22, 23, 24, 25: ALSO all that portion of said
Block 1 in said Townsite (Volcano) more particularly described as follows, to
wit:
Commencing at the Southwest corner of Section 23, Township 7 North, Range 12
East, M.D.B. & M., which point is also the Southwest corner of said Townsite of
volcano and running thence Northerly along the Westerly line of said Townsite
and of said Section 23, 1040 feet, more or less to the most Southerly corner of
Lot 20 in Block 1; thence Northeasterly and along the Southeasterly line of said
Lot 20, 340 feet, more or less, to the Southwesterly line of Lot 19 in said
Block 1; thence Southeasterly along the Southwesterly line of Lots 19 and 18 in
said Block 1, and Southerly along the Westerly line of Lot 17 in said Block 1,
as distance of 224 feet, more or less, to the most Southerly corner of said Lot
17; thence Northeasterly along the Southeasterly line of said Lot 17, 25 feet,
more or less, to the most Westerly corner of Lot 16 in said Block 1; and thence
Southeasterly and along the Southwesterly line of ▇▇▇▇ ▇▇, ▇▇, ▇▇, ▇▇, ▇▇, ▇▇,
▇▇, ▇ and 8, a distance of 212 feet, more or less to the most Southerly corner
of Lot 8 in said Block 1; thence Southeasterly 14 feet, more or less, to the
most Westerly corner of Lot 7 in said Block 1; thence Southeasterly along the
Southwesterly line of Lots 7, 6 and 5 in said Block 1, 100 feet, more or less,
to the Northwesterly corner of Lot 3, in said Block 1; thence Southeasterly 107
feet, more or less, to the Southwesterly corner of said Lot 3; thence Easterly
38 feet, more or less, to the Southeasterly corner of said Lot 3; thence
Easterly 30 feet, more or less, to the Southwest corner of Lot 2 in said Block
1; thence Easterly 82 feet, more or less, to the Southeast corner of said ▇▇▇ ▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ as the same is shown on said map;
thence Southeasterly along the Southwesterly line of Main Street and along the
Southwesterly line of Mahala ▇▇▇▇ ▇▇▇▇ ▇▇▇ feet, more or less, to the
Northeasterly corner of Lot 1 in said Block 1, thence Southwesterly along the
Northerly line of said ▇▇▇ ▇, ▇▇▇▇▇ ▇, to the Northwest corner thereof; thence
Southeasterly along the Westerly boundary of said ▇▇▇ ▇, ▇▇▇▇▇ ▇, to the
Southwest corner thereof, being a point on the Southerly boundary line of the
said Volcano Townsite, thence Westerly along said last mentioned line to the
point of commencement being all of said Lot 26 in said Block 1 and including
therein ▇▇▇ ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇.
A.P.N. ▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
BLOCK 2
Lots 1, 2, 3, 7, 9, 10; ALSO al that portion of Block 2 of said Townsite of
Volcano, more particularly described as follows, to wit: Commencing at the point
of intersection of the Southwesterly line of Lot 8 in said block 2 a the
Northeasterly line of Main Street, as shown on said map of Volcano; thence
Southeasterly along the Northeasterly line of Main Street and the Northeasterly
line of Mahala Flat Road, 570 feet, more or less, to the
1
Northwest corner of Lot 2 in said Block 2; thence Northeasterly along the
Northwesterly line of said Lot 2, 200 feet, more or less, to the most Northerly
corner of said Lot 2; thence Southeasterly along the Northeasterly line of said
Lot 2, 55 feet, more or less, to the Northwest line of Lot 5 in said Block 2;
thence Northeasterly along the Northwesterly line of Lot 5 and the Northwesterly
line of Lot 7 in said Block 2, 480 feet, more or less, to the Easterly line of
said townsite; thence Northerly along the Easterly line of said townsite 920
feet, more or less, to the intersection with the Southeasterly line of said Lot
2 in Block 5 (extended Northeasterly from the most Easterly corner of said Lot
2); thence Southwesterly along said Southeasterly line as extended and along the
Southeasterly line of Lots 2 and 1 in said Block 5, 360 feet, more or less, to
the most Southerly corner of said Block 5; thence Southwesterly 190 feet, more
or less, to the most Easterly corner of Lot 11 in said Block 2; thence
Southwesterly along the Southeasterly line of Lot 11 and Lot 8 in said Block 2,
430 feet, more or less to the point of commencement.
EXCEPTING THEREFROM that portion of ▇▇▇ ▇▇, ▇▇▇▇▇ ▇ more particularly described
as follows:
Beginning at the most Northerly fence corner of the Volcano Community Service
District well lot, from which point a 1/2 in steel rod tagged L.S. 2902 marking
the Northeast corner of Lot 9 of Block 13 as said Lot 9 is shown and so
designated upon that certain official map entitled "RECORD OF SURVEY PROPERTY OF
THEBAUT & ▇▇▇▇▇▇" recorded in the office of the Recorder of ▇▇▇▇▇▇ County in
Book 8 of Maps and Plats at Page 81, bears North 06 degrees 06' 20" East,
1514.77 feet distant; thence, from said point of beginning, along a line of
fence around said Volcano Community Services District well lot, South 18 degrees
30' 57" East 13.20 feet to a fence corner; thence South 71 degrees 04' 28" West
11.63 feet to a fence corner; thence North 20 degrees 50' 12" West 11.95 feet to
a fence corner; thence North 65 degrees 08' 08" East 12.19 feet to the point of
beginning.
A.P.N. ▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
2
BLOCK 2
All that portion of Block 2 of the Townsite of Volcano lying North of the
Easterly extension of the Southeasterly line of ▇▇▇ ▇, ▇▇▇▇▇ ▇.
A.P.N. ▇▇-▇▇▇-▇▇▇
BLOCK 9
Lots 4, 5, 6, 7 excepting therefrom the following portion of Lot 6:
Beginning at a point which is the Northwest corner of ▇▇▇ ▇▇, ▇▇▇▇▇ ▇ and is
common to ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ degrees, 15', East 60 feet, 9 Inches;
south 25 degrees, 15', West 21 feet, 6 inches; North 33 degrees, 30', West 12
feet, 8 inches; South 55 degrees, 30', West 9 feet, 6 inches; North 32 degrees,
30', West 38 feet, all former lines of Lot 6, thence North 16 degrees, 47', East
32 feet, 9 inches to the place of beginning.
ALSO EXCEPTING THEREFROM the following portion of Lot 7:
Beginning at the corner common to Lot 7 and Lot 8 on the Northerly side of
Emigrant Street as shown on above mentioned Townsite plat, said corner being
marked by a 1/2" rebar tagged LS 2902, thence; North 50 degrees 41' 40" West,
along the line common to said Lot 7 and Lot 8, 90.53 feet to a 3/4" rebar tagged
LS 3488, thence; South 31 degrees 38'23" West, 46.09 feet to a point on the
Westerly line of Lot 7, being also the Northeasterly corner of Lot 13 as shown
on said Townsite Plat, thence Southeasterly along the line common to said Lot 7
and Lot 13, 90 feet more or less to the North side of said Emigrant Street,
thence; Northeasterly along the North side of said Emigrant Street to the point
of beginning.
A.P.N. ▇▇-▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇ ▇▇ and 11
A.P.N. ▇▇-▇▇▇-▇▇▇
Lot 11 appears to be assessed as a portion of ▇▇-▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇ ▇, 2, 10, 12: ALSO, all that portion of Block 13 of said townsite of
Volcano, more particularly described as follows:
Commencing at the Northwest corner of said townsite, which point is also the
Northwest corner of the West half of the Southwest quarter of Section 23,
Township 7 North, Range 12 East, M.D.B. & M., thence Southerly along the
Westerly line of said Townsite and of said Section 23, 890 feet, more or less,
to the Northwest corner of Lot 2 in Block 14, as shown on said map; thence
Easterly along the Northerly line of said Lot 2, 30 feet, more or less, to the
Northeast corner of said Lot 2; thence Southeasterly along the Northeasterly
line of said Lot 2, 120 feet, more or less, to an angle point therein; thence
Southwesterly 23 feet, more or less, to a re-entrance angle point in the
Easterly line of said Lot 2; thence Southeasterly along the Northeasterly line
of Lot 2 and of Lot 1 in said Block 14, 140 feet, more or less, to the most
Easterly corner of Lot 1 on said Block 14; thence
3
Southeasterly 66 feet, more or less, to the most Westerly corner of Lot 2 in
said Block 13; thence Northeasterly to the most Northerly corner of Lot 2 in
said Block 13; thence Southeasterly along the Northeasterly line of said Lot 2,
to the most Easterly corner thereof; thence Northeasterly along the
Northwesterly line of Lot 1 in said Block 13 and along the extension thereof
Northeasterly 194 feet, more or less, to the intersection with the Southwesterly
line of Lot 10 in Block 9 extended Northwesterly; thence Southeasterly along the
last mentioned line as extended, 77 feet, more or less, to the Northwesterly
line of Baptist Street, as shown on said map of Volcano; thence Northeasterly
along the Northwesterly line of Baptist Street 110 feet, more or less, to the
Southwest corner of Lot 7 in said Block 13; thence Northeasterly along the
Northwesterly line of said Lot 7, 30 feet, more or less, to the most
Southwesterly line of Lot 8 in said Block 13, thence Westerly along the last
mentioned line, 40 feet, more or less, to the most Westerly corner of said Lot
8; thence Northeasterly along the Northwesterly line of Lots 8 and 9 of said
Block 13, 170 feet, more or less, to the Southwesterly corner of Lot 10 in Block
13; thence Northerly 190 feet, more or less, to the Northwesterly corner of said
Lot 10; thence Northwesterly along the Southwesterly line of Lot 12 in said
block 13, 450 feet, more or less, to the most Westerly corner of said Lot 12;
thence Northeasterly 280 feet, more or less, to the Northwest corner of said Lot
12 and the Northerly line of said townsite, thence Westerly thereon 290 feet,
more or less, to the point of beginning, including herein Lots 3, 4, 5, 6 and
13.
A.P.N. ▇▇-▇▇▇-▇▇▇
▇▇-▇▇▇-▇▇▇
BLOCK 14
Lot l and 2
A.P.N. ▇▇-▇▇▇-▇▇▇
4
DIVISION B
Those certain parcels of land lying in the Northwest quarter of the Northwest
quarter of Section 26, Township 7 North, Range 12 East, more particularly
described as follows:
PARCEL 1
That certain lot, parcel or piece of land, situate South of the Town of Volcano,
County of ▇▇▇▇▇▇, State of California, and bounded and particular as follows,
lot beginning at the Southwest corner of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ lot, on the East
side of the Mahala Flat Road, in said Volcano, thence in a Northeasterly
direction, on ▇▇▇▇▇▇▇▇▇▇▇'▇ South line two hundred and thirty (230) feet, thence
in a Southerly direction, along the West line of D. Sorrocco's lot, one hundred
and ten (110) feet, thence in a Southwesterly direction, along the West line of
▇▇▇▇ ▇▇▇▇▇▇'▇ lot, and to the Mahala Flat Road one hundred and fifty feet (150);
thence Northerly along said Road, one hundred & eight-six (186) feet to place of
beginning.
PARCEL 2
All that certain piece or parcel of land lying and being in the NW 1/4 of the NW
1/4 of Section ▇▇. ▇▇, ▇▇▇▇▇▇▇▇ ▇▇. ▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇. ▇▇ ▇▇▇▇, ▇▇. Diablo Base
and Meridian, said piece of land being situate on the East side of Volcano and
Mahala Flat Road being one hundred and thirty-none (139) feet on the front and
running back three hundred feet more or less, and bounded on the North by the
lot of Vinchence, on the East by the line between the NW 1/4 of the NW 1/4 and
the NE 1/4 of the NW 1/4 of Section 26, Township ▇▇. ▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇. ▇▇ ▇▇▇▇
▇▇. ▇.▇. & M.
PARCEL 3
All that portion of the Northwest quarter of the Northwest quarter of said
section, described as follows:
Beginning at a point in the East line of said Northwest quarter of the Northwest
quarter of said Section, distant thereon 317 feet South of the Northeast corner
of said Northwest quarter of Northwest quarter; and running thence South along
said East line 110 feet; thence South 33 DEG. 45' West 150 feet; thence South 48
DEG. 40' East 111 feet to a point in the East line of said Northwest quarter of
Northwest quarter of said section; thence South along said East line 127 feet;
thence North 52 DEG. West 285 feet; thence North 55 DEG. East 15 feet; thence
North 28 DEG. West 150 feet; thence North 67 DEG. 15' East 306 feet to the point
of beginning.
PARCEL 4
That certain lot of land situate South of the Townsite of Volcano and on the
Easterly line of the so-called Mahala Flat Road, particularly described as
follows:
Commencing at a point on the East side of the Mahala Flat Road which bears South
19 DEG. 17' East 240.8 feet distant from the Southwest corner of ▇▇▇ ▇ ▇▇ ▇▇▇▇▇
▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the said Southwest corner of Lot 2 being on the Southern
boundary line of Volcano Townsite, and South 88 DEG. 15' West 578.5 feet from
the from the southeast corner of said Volcano Townsite; thence from the said
point of commencement North 67 DEG. 30' East 132.7 feet to a corner, thence
South 16 DEG. 19' East 66.9 feet to a corner; thence South 62 DEG. 40' West 56.4
feet to a corner; thence South 29 DEG. 35' East 21.3 feet to a corner; thence
South 53 DEG. 30' West 59.9 feet to a ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇; thence
along the Easterly line of the ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇. 54' West 107.7
feet, more or less, to the point of commencement.
5
PARCEL 5
All that certain piece or parcel of land lying and being in the Northwest 1/4 of
Northwest 1/4 of Section 26, Township 7 North, Range 12 East, MD.B. & M., and
more particularly described as follows:
BEGINNING at the Southwest corner of said Lot on the Volcano and Mahala Flat
Road and running in a Northwesterly direction of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Lot to the
Largarmarcino Lot 275 feet; thence Northeasterly on Largarmarcino Lot 70 feet
more or less; thence 300 feet more or less to the Mahala Flat Road; thence
Westerly 36 feet to the place of beginning.
PARCEL 6
All that certain piece or parcel of mining land situated on the Mahala Flat Road
and bounded on all sides by land of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, being 71 feet in length on
the North side, 53 feet in length on the South side and 26 feet in length on the
West side.
PARCEL 7
A triangular piece of land on the North side of Mahala Flat Road and bounded on
the South and West by land of said ▇▇▇▇▇▇▇ and on the East by land of ▇▇▇▇▇
▇▇▇▇▇▇▇, being 75 feet in length on the South side, 150 feet in length on the
West side and 138 feet on ▇▇▇▇▇ ▇▇▇▇▇▇▇ lot.
6
DIVISION C
The South Half of the Northeast Quarter and the North Half of the Southeast
Quarter of Section 21, Township 7 North, Range 12 East, Mount Diablo Base and
Meridian.
A.P.N. ▇▇-▇▇▇-▇▇▇
7
DIVISION D
Government Lots 4, 5, 6, 7, 8, 9, 10 and 11 of Section 22, Township 7 North,
Range 12 East, M.D.B and M.
Excepting therefrom all the coal and other minerals, together with the right to
prospect for, mine and remove the same pursuant to the provisions and
limitations of the act of December 29, 1916; as reserved by the United States of
America in patent recorded September 7, 1929 in Book C of Homestead Patents,
page 257.
Government Lot 43-b, known as the Tri-Mountain or Fugus Millsite, and the
Southeast quarter of the Southeast quarter of Section 22, Township 7 North,
Range 12 East, M.D.B. & M.
All of that portion of the Northwest quarter of the Northeast quarter of Section
27, Township 7 North, Range 12 East, M.D.B. & M., lying Northerly of the
centerline of the ▇▇▇▇▇▇ Creek-Volcano Road, as said road is situated as of May
1, 1968.
8
DIVISION E
The Southeast quarter of the southwest quarter, the Southwest quarter of the
Southeast quarter, the South half of the Northwest quarter of the Southeast
quarter, the South half of the Northeast quarter of the Southwest quarter
excepting therefrom the following:
Beginning at the intersection of the South boundary of the North 1/2 of
Northeast 1/4 of Southwest 1/4 of Section 23, Township 7 North, Range 12 East,
M.D.B. & M., and the County Road, whence the Southeast corner of the aforesaid
described tract of land bears East 131.4 feet distant; thence with magnetic
variation 17 DEG. 40' East, along the center line of said County Road which lies
closely to the following courses:
1. South 55 DEG. 30' West, 253.5 feet;
2. South 70 DEG. 50' West, 138.3 feet;
3. North 76 DEG. 20' West, 211.9 feet;
4. North 77 DEG. 00' West, 176.8 feet;
5. North 89 DEG. 15' West, 70.4 feet;
6. South 65 DEG. 50' West 118.5 feet to the East edge of Clabbord Gulch;
thence up along said East edge, North 20 DEG. East 137.8 feet to the
Southwest corner of rock wall; thence along said wall, North 18 DEG. East
to the above described South boundary; thence East along said South
boundary to the point of beginning.
All in Section 23, Township 7 North, Range 12 East, M.D.B. & M.
A.P.N. ▇▇-▇▇▇-▇▇▇
9
APPENDIX A-3
[THE MASTER LIST-ASBESTOS LAWSUITS REFERRED TO IN THE SCHEDULE IS ATTACHED TO
THE ORIGINAL JOINT VENTURE AGREEMENT BUT IS NOT ATTACHED TO THE COPY OF THE
JOINT VENTURE AGREEMENT BEING TRANSMITTED HEREWITH]
APPENDIX A-4
[THE COMPUTER PRINTOUT SPECIFICALLY LISTING THE REPAIR PARTS FOR THE KILN AND
PRE-KILN ASSETS IS ATTACHED TO THE ORIGINAL JOINT VENTURE AGREEMENT BUT IS NOT
ATTACHED TO THE COPY OF THE JOINT VENTURE AGREEMENT BEING TRANSMITTED HEREWITH]
EXHIBIT B
SOUTHERN CALIFORNIA MARKET
All of Imperial, ▇▇▇▇, Kings, Los Angeles, Orange, Riverside, San
Bernardino, San Diego, San ▇▇▇▇ Obispo, Santa ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ Counties,
California and those portions of Fresno, Inyo, Monterey and Tulare Counties,
California south of the latitude of the Port of Monterey, California, and ▇▇▇▇▇
County, Nevada.