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EXHIBIT 3.2.2
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
AMERICA 51, L.P.
THIS LIMITED PARTNERSHIP AGREEMENT (the "Agreement") of AMERICA 51,
L.P. (the "Partnership") is entered into as of January 12, 2001, by and between
(a) ▇▇▇▇▇▇ Communications of Phoenix-51, Inc., a Florida corporation
("Phoenix-51", and in its capacity as general partner, the "General Partner"),
and (b) ▇▇▇▇▇▇ COMMUNICATIONS TELEVISION, INC., a Florida corporation ("PCTV"),
and ▇▇▇▇▇▇ COMMUNICATIONS OF PHOENIX-51, INC., a Florida corporation
("Phoenix-51" and PCTV, in their capacities as limited partners, each a "Limited
Partner", and collectively, the "Limited Partners").
RECITAL
WHEREAS, the Partnership was organized as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act, pursuant to an original
Limited Partnership Agreement, dated as of July 30, 1996, by and among ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Limited Partnership ("HGSLP"), as general partner, and ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ("HGS"), as limited partner, by the filing of a Certificate
of Limited Partnership with the Secretary of State of the State of Delaware on
July 30, 1996; and
WHEREAS, Phoenix-51 was admitted to the Partnership as a limited
partner and HGS withdrew as a limited partner of the Partnership pursuant to the
Amended and Restated Limited Partnership Agreement dated as of January 31, 1997
(the "Amended and Restated Limited Partnership Agreement"); and
WHEREAS, in connection with the closing of the Amended Purchase
Agreement dated as of November 6, 2000, by and among Phoenix-51 and HGSLP,
Phoenix-51 was admitted to the Partnership as the general partner, HGS withdrew
as the general partner of the Partnership and PCTV was admitted to the
Partnership as a limited partner, and such changes were reflected in the filing
of an Amended Certificate of Limited Partnership with the Secretary of State of
the State of Delaware on or about May 30, 2001; and
WHEREAS, the parties desire to enter into this Agreement in order to
amend and restate the Amended and Restated Limited Partnership Agreement of the
Partnership in its entirety and to provide for the respective rights,
obligations and interests of the Partners to each other and to the Partnership,
and certain other matters.
AGREEMENT
In consideration of the mutual covenants and agreements set forth in
this Agreement, the parties agree as follows.
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SECTION 1 DEFINITIONS
1.1 TERMS DEFINED IN THIS SECTION. The following terms, as used in this
Agreement, shall have the meanings set forth in this Section:
"Act" means the Delaware Revised Uniform Limited Partnership Act.
"Adjusted Capital Account Deficit" means with respect to either
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of the relevant Fiscal Year, after:
(i) crediting to such Capital Account any amounts which such
Partner is obligated to restore to the Partnership pursuant to Treasury
Regulations Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore
pursuant to the penultimate sentences of Treasury Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) debiting from such Capital Account the items described in
Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5),
and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, (i) any Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, the specified Person; (ii) any
Person that is a director or officer of, partner in, or trustee of, or serves in
a similar capacity with respect to, the specified Person or of which the
specified Person is a director, officer, partner, or trustee, or with respect to
which the specified Person serves in a similar capacity; (iii) any Person that
directly or indirectly through one or more intermediaries is the beneficial
owner of 10% or more of any class of equity securities of the specified Person
or of which the specified Person is directly or indirectly through one or more
intermediaries the owner of 10% or more of any class of equity securities; and
(iv) any Person who is acting at the direction and primarily in furtherance of
the interests of the specified Person.
"Capital Account" means an account to be maintained for each Partner in
accordance with the Code, which, subject to any contrary requirements of the
Code, shall equal (i) the amount of money contributed by such Partner to the
Partnership, if any; (ii) the fair market value without regard to Code Section
7701(g) of property, if any, contributed by such Partner to the Partnership (net
of liabilities that are secured by such contributed property or that either
Partner is considered to assume under Code Section 752); (iii) allocations to it
of Net Profit pursuant to Section 4; and (iv) other additions made in accordance
with the Code; and decreased by (i) the amount of cash distributed to such
Partner by the Partnership; (ii) allocations to the Partner of Net Loss pursuant
to Section 4; (iii) the fair market value without regard to Code Section 7701(g)
of property distributed to such Partner by the Partnership (net of liabilities
that are secured by such distributed property or that such Partner is considered
to assume or take under Code Section 752); and (iv) other deductions made in
accordance with the Code. The Partners' respective Capital Accounts shall be
determined and maintained at all times in accordance with all the provisions of
Treasury Regulations Section 1.704-1(b)(2)(iv).
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any subsequent federal law of similar import, and, to the extent
applicable, the Treasury Regulations.
"Depreciation" means for each fiscal period, an amount equal to
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such fiscal period, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such fiscal period, Depreciation shall be an amount which bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deduction for such fiscal
period bears to such beginning adjusted tax basis; provided, however, that if
the federal income tax depreciation, amortization, or other cost recovery
deduction for such year is zero, Depreciation shall be determined with reference
to such beginning Gross Asset Value using any reasonable method selected by the
General Partner.
"Fiscal Year" means the Partnership's fiscal year.
"General Partner" means ▇▇▇▇▇▇ Communications of Phoenix-51, Inc. and
it's successors-in-interest under this Agreement.
"Gross Asset Value" means with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the contributing Partner and the Partnership;
(ii) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values as of the following
times: (a) the acquisition of an additional interest in the Partnership by any
new or existing Partner in exchange for more than a DE MINIMIS Capital
Contribution; (b) the distribution by the Partnership to a Partner of more than
a DE MINIMIS amount of Partnership property as consideration for an interest in
the Partnership; and (c) the liquidation of the Partnership within the meaning
of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);
(iii) The Gross Asset Value of any Partnership asset
distributed to either Partner shall be the gross fair market value of such asset
on the date of distribution; and
(iv) The Gross Asset Value of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and
Section 4.3(g); provided, however, that Gross Asset Value shall not be adjusted
pursuant to this paragraph (iv) to the extent that an adjustment was made
pursuant to paragraph (ii) of this definition in connection with any transaction
that would otherwise have resulted in an adjustment pursuant to this paragraph
(iv).
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If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraph (i), (ii), or (iv) of this definition, the Gross Asset
Value of such asset shall thereafter be adjusted by the Depreciation taken into
account with respect to such asset for purposes of computing Net Profit and Net
Loss.
"Limited Partner" means each of ▇▇▇▇▇▇ Communications Television, Inc.
and ▇▇▇▇▇▇ Communications of Phoenix-51, Inc., and each of their respective
successors-in-interest under this Agreement.
"Net Profit" and "Net Loss" mean for each Fiscal Year or other period,
an amount equal to the Partnership's taxable income or loss for such year or
period, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(i) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profit or Net
Loss shall be added to such taxable income or loss;
(ii) Code Section 705(a)(2)(B) expenditures of the
Partnership, which are not otherwise taken into account in computing Net Profit
or Net Loss, shall be subtracted from such taxable income or loss;
(iii) If the Gross Asset Value of any Partnership asset is
adjusted pursuant to paragraph (ii) or (iii) of the definition of Gross Asset
Value, the amount of such adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of computing Net Profit or Net
Loss;
(iv) Gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted tax basis
of such property differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Fiscal Year or other
period;
(vi) Notwithstanding anything to the contrary in the
definition of the terms "Net Profit" and "Net Loss," any items that are
specially allocated pursuant to Section 4.3, Section 4.4, or Section 4.5 of this
Agreement shall be excluded in computing Net Profit or Net Loss; and
(vii) For purposes of this Agreement, any deduction for a loss
on a sale or exchange of Partnership property that is disallowed to the
Partnership under Code Section 267(a)(1) or Code Section 707(b) shall be treated
as a Code Section 705(a)(2)(B) expenditure.
"Nonrecourse Deductions" has the meaning set forth in Treasury
Regulations Section 1.704-2(b)(1), which provides generally that the amount of
Nonrecourse Deductions for a Fiscal Year shall equal the net increase, if any,
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in Partnership Minimum Gain during that Fiscal Year, reduced (but not below
zero) by the aggregate distributions made during that Fiscal Year of proceeds of
a Nonrecourse Liability that are allocable to an increase in Partnership Minimum
Gain, determined in accordance with Treasury Regulations Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Treasury
Regulations Section 1.752-1(a)(2).
"Partner" means any General Partner or Limited Partner.
"Partner Nonrecourse Debt" has the meaning set forth in Treasury
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Treasury Regulations Section 1.704-2(i)(2), which provides generally that the
amount of Partnership Minimum Gain shall be determined in accordance with
Treasury Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Deductions" has the meaning set forth in Treasury
Regulations Section 1.704-2(i)(1), which provides generally that the amount of
Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a
Fiscal Year shall equal the net increase, if any, in Partner Nonrecourse Debt
Minimum Gain during that Fiscal Year, reduced (but not below zero) by proceeds
of the liability distributed during the year to the Partner bearing the economic
risk of loss for the liability that are both attributable to the liability and
allocable to an increase in the Partner Nonrecourse Debt Minimum Gain,
determined in accordance with Treasury Regulations Section 1.704-2(i)(2).
"Partnership" means the partnership created by the Partners pursuant to
this Agreement.
"Partnership Minimum Gain" has the meaning set forth in Treasury
Regulations Section 1.704-2(b)(2), which provides generally that the amount of
Partnership Minimum Gain shall be determined by first computing for each
Nonrecourse Liability any gain the Partnership would realize if it disposed of
the property subject to that Nonrecourse Liability for no consideration other
than full satisfaction of such Nonrecourse Liability, and then aggregating the
separately computed gains, in accordance with Treasury Regulations Section
1.704-2(d).
"Percentage Interest" means, for each Partner, such Partner's
percentage partnership interest in the Partnership, as set forth next to such
partner's name on Schedule A hereto, as amended from time to time in accordance
with the terms hereof.
"Person" means an individual, corporation, association, partnership,
joint venture, trust, estate, limited liability company, limited liability
partnership, or other entity or organization.
"Treasury Regulations" means the Income Tax Regulations, including
Temporary Regulations, promulgated under the Code; as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
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1.2 TERMS DEFINED ELSEWHERE IN THIS AGREEMENT. For purposes of this
Agreement, the following terms have the meanings set forth in the sections
indicated:
TERM SECTION
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Basic Regulatory Allocations Section 4.4(b)
Capital Contribution Section 3.1(a)
Amended Certificate Section 2.2(b)
Construction Permit Section 3.1(b)
FCC Section 3.1(b)
New General Partner Section 7.2(a)
Nonrecourse Regulatory Allocations Section 4.4(c)
Partner Nonrecourse Regulatory Allocations Section 4.4(d)
Regulatory Allocations Section 4.4(a)
Station Section 2.5
Tax Matters Partner Section 5.1(c)
SECTION 2 THE PARTNERSHIP AND ITS BUSINESS
2.1 ORGANIZATION. The General Partner and the Limited Partner agree to
continue the Partnership as a limited partnership pursuant to the provisions of
the Act. Except as provided in this Agreement, all rights, liabilities, and
obligations of the Partners, both as between themselves and with respect to
Persons not parties to this Agreement, shall be as provided in the Act, and this
Agreement shall be construed in accordance with the provisions of the Act. To
the extent that the rights or obligations of either Partner are different by
reason of any provision of this Agreement than they would be in the absence of
such provision, this Agreement shall, to the extent permitted by the Act,
control, except that the Limited Partner shall not be personally liable for
obligations of the Partnership beyond the liability provided in the Act.
2.2 FILING OF CERTIFICATE OF LIMITED PARTNERSHIP.
(a) The Certificate of Limited Partnership of the Partnership (the
"Certificate") was filed with the Secretary of State of Delaware on July 30,
1996.
(b) The Amended Certificate of Limited Partnership of the Partnership
(the "Amended Certificate") was filed with the Secretary of State of Delaware on
May 30, 2001.
(c) The General Partner shall do, and continue to do, all other things
that are required or advisable to maintain the Partnership as a limited
partnership existing pursuant to the laws of the State of Delaware.
2.3 PARTNERSHIP NAME. The name of the Partnership shall be "America 51,
L.P." The business of the Partnership may be conducted under that name or, upon
compliance with applicable laws, any other name that the General Partner deems
appropriate or advisable. The General Partner shall file any assumed name
certificates and similar filings, and any amendments thereto, that the General
Partner considers appropriate or advisable.
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2.4 TERM OF THE PARTNERSHIP. The term of the Partnership shall continue
until December 31, 2026, unless the Partnership is earlier terminated pursuant
to Section 7 of this Agreement.
2.5 PURPOSES OF THE PARTNERSHIP. The purposes of the Partnership shall
be (a) to carry on the business of investing, owning, maintaining, operating,
promoting, selling, disposing and otherwise developing television station
KPPX(TV), channel 51, Tolleson, Arizona (the "Station"), and (b) to do all other
lawful things necessary, appropriate, or advisable in connection with these
purposes.
2.6 AUTHORITY OF THE PARTNERSHIP. The Partnership shall be empowered
and authorized to do all lawful acts and things necessary, appropriate, proper,
advisable, incidental to, or convenient for the furtherance and accomplishment
of its purposes. The Partnership shall be empowered and authorized:
(a) to construct, operate, maintain, improve, expand, buy,
own, sell, convey, assign, mortgage, refinance, rent or lease real or personal
property;
(b) to enter into, perform, and carry out contracts and
agreements of any kind necessary to, in connection with, or incidental to
accomplishing the purposes of the Partnership;
(c) to borrow money and issue evidences of indebtedness in
furtherance of the purposes of the Partnership and to secure any such
indebtedness by mortgage, security interest or other lien;
(d) to maintain and operate the assets of the Partnership;
(e) to negotiate for and conclude agreements for the sale,
exchange or other disposition of all or any part of the property of the
Partnership or for the purchase or lease of additional property of the
Partnership;
(f) to hire and compensate employees, agents, independent
contractors, attorneys and accountants; and
(g) to bring and defend actions in law and equity.
2.7 PRINCIPAL OFFICE AND OTHER OFFICES; REGISTERED AGENT. The office
required to be maintained by the Partnership in the State of Delaware pursuant
to Section 17-104 of the Act shall be located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The resident agent of the Partnership
pursuant to Section 17-104 of the Act shall be The Corporation Trust Company.
The principal office of the Partnership shall be located at the offices of the
General Partner, ▇▇▇▇▇▇ Communications of Phoenix-51, Inc., c/o Paxson
Communications Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇. The Partnership may maintain any other offices at any other places
that the General Partner deems advisable. The Partnership may, upon compliance
with the applicable provisions of the Act, change its principal office or
resident agent from time to time in the discretion of the General Partner.
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2.8 FOREIGN QUALIFICATION. The General Partner shall take all necessary
actions to cause the Partnership to be authorized to conduct business legally in
all appropriate jurisdictions, including registration or qualification of the
Partnership as a foreign limited partnership in those jurisdictions that provide
for registration or qualification and the filing of a certificate of limited
partnership in the appropriate public offices of those jurisdictions that do not
provide for registration or qualification.
2.9 FISCAL YEAR. The Fiscal Year of the Partnership shall be the
calendar year. The Partnership shall have the same Fiscal Year for income tax
purposes and for financial and partnership accounting purposes.
2.10 ADDRESSES OF THE PARTNERS. The address of the General Partner is
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. The address of
the Limited Partner is ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
SECTION 3 PARTNERSHIP CAPITAL; PARTNERSHIP INTERESTS
3.1 CAPITAL CONTRIBUTIONS.
(a) DEFINITION OF CAPITAL CONTRIBUTION. For purposes of this
Agreement, a Partner's "Capital Contribution" means the amount of money
contributed by such Partner to the Partnership pursuant to this Agreement plus
the fair market value without regard to Code Section 7701(g) of property
contributed by such Partner to the Partnership pursuant to this Agreement (net
of liabilities that are secured by such contributed property or that either
Partner is considered to assume under Code Section 752).
(b) INITIAL CAPITAL CONTRIBUTIONS.The Partners have made cash
Capital Contributions in the amounts specified in Schedule A attached hereto.
(c) ADDITIONAL CAPITAL CONTRIBUTIONS.
(1) Upon the dissolution of the Partnership and
liquidation of its assets pursuant to Section 7, if the General Partner has a
negative balance in its Capital Account, the General Partner shall contribute to
the Partnership, in cash, an amount equal to the lesser of (A) the deficit
balance in its Capital Account, or (B) the excess of one and one one-hundredths
percent (1.01%) of the total Capital Contributions of the Limited Partner over
the Capital Contributions previously contributed by the General Partner. Any
amount contributed by the General Partner pursuant to this paragraph shall be
applied and distributed as provided in Section 7.3(c).
(2) Except as provided above or as mutually agreed by
the General Partner and the Limited Partner, there shall be no further
assessments for additional Capital Contributions by the Partners to the
Partnership.
3.2 PARTNERSHIP INTERESTS. Each Partner's Percentage Interest in the
Partnership shall be as set forth on Schedule A hereto, as amended from time to
time.
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3.3 FINANCING.
(a) To finance the business of the Partnership, the General
Partner may arrange for the obtaining of loans or for the refinancing of such
loans, and may pledge the assets of the Partnership therefor, in each case
subject to Section 5.1(b)(4).
(b) Either Partner may lend funds to the Partnership on terms
and conditions agreed to by the Partners. Except as otherwise agreed to by the
Partners, any advance of funds to the Partnership by a Partner shall be treated
as a loan and not as a Capital Contribution.
3.4 DISBURSEMENTS. The Partnership shall pay all costs and expenses of
the Partnership's business, including financing costs and related expenses, all
costs of construction of improvements on Partnership property or leaseholds,
management, leasing, and loan placement fees, and operating expenses. Consistent
with the annual budgets to be approved by both the General Partner and the
Limited Partner and subject to the provisions of Sections 5.1(b)(4), the
Partnership may set aside funds for any items that are proper Partnership
purposes, including operating expenses, debt service, capital improvements,
replacements, repairs, amortization, other capital requirements, and
liabilities, contingent or otherwise, of the Partnership in its reasonable
discretion, in each case subject to Section 5.1(b)(4).
3.5 WITHDRAWAL OF CONTRIBUTIONS. Neither Partner shall have the right
to withdraw from the Partnership or to demand a return of all or any part of its
Capital Contribution during the term of the Partnership, and any return of the
Capital Contribution of either Partner shall be made solely from the assets of
the Partnership and only in accordance with the terms of this Agreement. No
interest shall be paid to either Partner with respect to its Capital
Contribution to the Partnership. The Partners expressly acknowledge that certain
provisions of this Agreement, which may preclude a Partner from realizing
appreciation in the value of Partnership assets, are essential to protect the
Partners' mutual interests in the Partnership assets; accordingly, the Partners
hereby waive any right they otherwise would have to seek a partition or judicial
liquidation of the Partnership or any comparable action.
SECTION 4 CASH DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES
4.1 DISTRIBUTIONS.
(a) DISTRIBUTIONS PRIOR TO LIQUIDATION. Any cash of the
Partnership available for distribution shall be distributed at such times and in
such amounts as the General Partner and the Limited Partner may mutually
determine. All distributions of cash pursuant to this Section 4.1(a) shall be
allocated in accordance with the each Partner's Percentage Interest.
(b) NET PROCEEDS ON LIQUIDATION. Upon the liquidation of the
Partnership within the meaning of Treasury Regulations Section
1.704-1(b)(2)(ii)(g), after payment of, or adequate provision for, the debts and
obligations of the Partnership, the remaining assets of the Partnership shall be
distributed (or deemed distributed in the event of a termination under Code
Section 708(b)(1)(B)) to the Partners (after giving effect to all contributions,
distributions, allocations, and other Capital Account adjustments for all
taxable years, including the year during which such liquidation occurs) in the
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same proportion which such Partner's positive Capital Account balance bears to
the aggregate of all positive Capital Account balances of the Partners in
compliance with Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2).
(c) WITHHOLDING. All amounts withheld pursuant to the Code or
any provision of any state or local tax law with respect to any payment or
distribution to a Partner shall be treated as amounts distributed to such
Partner pursuant to Section 4.1(a) for all purposes of this Agreement.
4.2 ALLOCATIONS OF NET PROFIT AND NET LOSS.
(a) ALLOCATIONS OF NET PROFIT. Except as otherwise provided in
this Agreement, Net Profit for each Fiscal Year (or portion thereof) shall be
allocated as follows:
(1) first, to those Partners having deficit balances
in their Capital Accounts to the extent of, and in proportion to, those
deficits; and
(2) second, to the Partners in accordance with their
respective Percentage Interests.
(b) ALLOCATIONS OF NET LOSS. Except as otherwise provided in
this Agreement, Net Loss for each Fiscal Year (or portion thereof) shall be
allocated to the Partners in accordance with their Percentage Interests.
Notwithstanding the preceding sentence, the Net Loss allocated to the Limited
Partner pursuant to this Section 4.2(b) shall not exceed the maximum amount of
Net Loss that can be allocated to the Limited Partner without causing the
Limited Partner to have an Adjusted Capital Account Deficit at the end of any
Fiscal Year. All Net Loss in excess of the amount that may be allocated to the
Limited Partner shall be allocated to the General Partner.
(c) ALLOCATION OF GAIN UPON LIQUIDATION. Notwithstanding
Section 4.2(a), except as otherwise provided in Section 4.3, gain that is
recognized (or deemed to be recognized) upon the sale, exchange, or other
disposition of all or substantially all of the assets of the Partnership or upon
the dissolution of the Partnership shall be allocated in the following order of
priority:
(1) first, to those Partners having deficit balances
in their Capital Accounts (computed giving effect to all contributions,
distributions, allocations and other Capital Account adjustments for all Fiscal
Years, including the Fiscal Year during which such liquidation or dissolution
occurs), to the extent of, and in proportion to, those deficits; and
(2) thereafter, so as to cause the ratio of the
credit balances in the General Partners' Capital Accounts and each Limited
Partner's Capital Account to reflect their respective Percentage Interests.
4.3 SPECIAL PROVISIONS REGARDING ALLOCATIONS OF INCOME AND LOSS.
(a) MINIMUM GAIN CHARGEBACK. Notwithstanding any other
provision of this Section 4, if there is a net decrease in Partnership Minimum
Gain for any Fiscal Year, each Partner shall be specially allocated items of
Partnership income and gain for such year in an amount equal to such Partner's
share of the net decrease in Partnership Minimum Gain, determined in accordance
with Treasury Regulations Sections 1.704-2(g); provided, however, that this
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Section 4.3(a) shall not apply to the extent the circumstances described in
Treasury Regulations Sections 1.704-2(f)(2), 1.704-2(f)(3), 1.704-2(f)(4), or
1.704-2(f)(5) exist. The items of Partnership income and gain to be allocated
pursuant to this Section 4.3(a) shall be determined in accordance with Treasury
Regulations Section 1.704-2(f)(6). This Section 4.3(a) is intended to comply
with the minimum gain chargeback requirement in Treasury Regulations Section
1.704-2(f) and shall be interpreted consistently therewith.
(b) PARTNER MINIMUM GAIN CHARGEBACK. Notwithstanding any other
provision of this Section 4 except Section 4.3(a), if during any Fiscal Year
there is a net decrease in Partner Nonrecourse Debt Minimum Gain, each Partner
with a share of that Partner Nonrecourse Debt Minimum Gain (determined in
accordance with Treasury Regulations Section 1.704-2(i)(5)) as of the beginning
of such Fiscal Year must be allocated items of Partnership income and gain for
the Fiscal Year (and, if necessary, for succeeding Fiscal Years) equal to that
Partner's share of the net decrease in the Partner Nonrecourse Debt Minimum Gain
(determined in accordance with Treasury Regulations Section 1.704-2(i)(4));
provided, however, that this Section 4.3(b) shall not apply to the extent the
circumstances described in the third and fifth sentences of Treasury Regulations
Section 1.704-2(i)(4) exist. The items of Partnership income and gain to be
allocated pursuant to this Section 4.3(b) shall be determined in accordance with
Treasury Regulations Section 1.704-2(i)(4). This Section 4.3(b) is intended to
comply with the minimum gain chargeback requirement in Treasury Regulations
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) QUALIFIED INCOME OFFSET. If either Partner unexpectedly
receives any adjustments, allocations, or distributions described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Treasury Regulations, the Adjusted Capital Account
Deficit of such Partner as quickly as possible; provided, however, that an
allocation pursuant to this Section 4.3(c) shall be made if and only to the
extent that such Partner would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Section 4 have been tentatively made
as if this Section 4.3(c) were not in this Agreement.
(d) GROSS INCOME ALLOCATION. If either Partner has a deficit
Capital Account at the end of any Fiscal Year that is in excess of the sum of
(1) the amount such Partner is obligated to restore to the Partnership pursuant
to Treasury Regulations Section 1.704-1(b)(2)(ii)(c), (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentence of Treasury Regulations Section 1.704-2(g)(1), and (3) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentence of Treasury Regulations Section 1.704-2(i)(5), such Partner shall be
specially allocated items of Partnership income and gain in the amount of such
excess as quickly as possible; provided, however, that an allocation pursuant to
this Section 4.3(d) shall be made if and only to the extent that such Partner
would have a deficit Capital Account in excess of such sum after all other
allocations provided for in this Section 4 have been tentatively made as if
Section 4.3(c) and this Section 4.3(d) were not in this Agreement.
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(e) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
Fiscal Year or other period shall be specially allocated as Net Loss pursuant to
Section 4.2(b).
(f) PARTNER NONRECOURSE DEDUCTIONS. Any Partner Nonrecourse
Deductions for any Fiscal Year or other period shall be specially allocated to
the Partner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Treasury Regulation Section 1.704-2(i).
(g) SECTION 754 ADJUSTMENT. To the extent any adjustment to
the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) is required, pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Regulations. At any
time upon the request of the Limited Partner and at any other time that the
General Partner reasonably deems appropriate, the General Partner shall make on
behalf of the Partnership any election permitted under Code Section 754.
4.4 CURATIVE ALLOCATIONS.
(a) The "Regulatory Allocations" consist of the "Basic
Regulatory Allocations," as defined in Section 4.4(b) hereof, the "Nonrecourse
Regulatory Allocations," as defined in Section 4.4(c) hereof, and the "Partner
Nonrecourse Regulatory Allocations," as defined in Section 4.4(d) hereof.
(b) The "Basic Regulatory Allocations" consist of (1)
allocations pursuant to the last sentence of Section 4.2(b) hereof, and (2)
allocations pursuant to Section 4.3(c), Section 4.3(d), and Section 4.3(g)
hereof. Notwithstanding any other provision of this Agreement, other than the
Regulatory Allocations, the Basic Regulatory Allocations shall be taken into
account in allocating items of income, gain, loss, and deduction between the
Partners so that, to the extent possible, the net amount of such allocations of
other items and the Basic Regulatory Allocations to each Partner shall be equal
to the net amount that would have been allocated to each Partner if the Basic
Regulatory Allocations had not been made. For purposes of applying the foregoing
sentence, allocations pursuant to this Section 4.4(b) shall only be made with
respect to allocations pursuant to Section 4.3(g) hereof to the extent the
General Partner determines that such allocations would otherwise be inconsistent
with the economic agreement between the Partners.
(c) The "Nonrecourse Regulatory Allocations" consist of all
allocations pursuant to Section 4.3(a) and Section 4.3(e) hereof.
Notwithstanding any other provision of this Agreement, other than the Regulatory
Allocations, the Nonrecourse Regulatory Allocations shall be taken into account
in allocating items of income, gain, loss, and deduction between the Partners so
that, to the extent possible, the net amount of such allocations of other items
and the Nonrecourse Regulatory Allocations to each Partner shall be equal to the
net amount that would have been allocated to each Partner if the Nonrecourse
Regulatory Allocations had not been made. For purposes of applying the foregoing
sentence (1) no allocations pursuant to this Section 4.4(c) shall be made prior
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to the Fiscal Year during which there is a net decrease in Partnership Minimum
Gain, and then only to the extent necessary to avoid any potential economic
distortions caused by such net decrease in Partnership Minimum Gain, and (2)
allocations pursuant to this Section 4.4(c) shall be deferred with respect to
allocations pursuant to Section 4.3(e) hereof to the extent the General Partner
reasonably determines that such allocations are likely to be offset by
subsequent allocations pursuant to Section 4.3(a) hereof.
(d) The "Partner Nonrecourse Regulatory Allocations" consist
of all allocations pursuant to Section 4.3(b) and Section 4.3(f) hereof.
Notwithstanding any other provision of this Agreement, other than the Regulatory
Allocations, the Partner Nonrecourse Regulatory Allocations shall be taken into
account in allocating items of income, gain, loss, and deduction between the
Partners so that, to the extent possible, the net amount of such allocations of
other items and the Partner Nonrecourse Regulatory Allocations to each Partner
shall be equal to the net amount that would have been allocated to each Partner
if the Partner Nonrecourse Regulatory Allocations had not been made. For
purposes of applying the foregoing sentence (1) no allocations pursuant to this
Section 4.4(d) shall be made with respect to allocations pursuant to Section
4.3(f) relating to a particular Partner Nonrecourse Debt prior to the Fiscal
Year during which there is a net decrease in Partner Nonrecourse Debt Minimum
Gain attributable to such Partner Nonrecourse Debt, and then only to the extent
necessary to avoid any potential economic distortions caused by such net
decrease in Partner Nonrecourse Debt Minimum Gain, and (2) allocations pursuant
to this Section 4.4(d) shall be deferred with respect to allocations pursuant to
Section 4.3(f) hereof relating to a particular Partner Nonrecourse Debt to the
extent the General Partner reasonably determines that such allocations are
likely to be offset by subsequent allocations pursuant to Section 4.3(b) hereof.
(e) The General Partner shall have reasonable discretion, with
respect to each Fiscal Year, to (1) apply the provisions of Section 4.4(b),
Section 4.4(c), and Section 4.4(d) hereof in whatever order is likely to
minimize the economic distortions that might otherwise result from the
Regulatory Allocations, and (2) divide all allocations pursuant to Section
4.4(b), Section 4.4(c), and Section 4.4(d) hereof between the Partners in a
manner that is likely to minimize such economic distortions.
4.5 OTHER ALLOCATION RULES.
(a) For purposes of determining a Partner's proportionate
share of the "excess nonrecourse liabilities" of the Partnership within the
meaning of Treasury Regulations Section 1.752-3(a)(3), the Partners' interests
in Partnership profits shall be equal to their respective Percentage Interests.
(b) To the extent permitted by Treasury Regulations Sections
1.704-2(h) and 1.704-2(i)(6), the General Partner shall endeavor to treat
distributions as having been made from the proceeds of a Nonrecourse Liability
or a Partner Nonrecourse Debt only to the extent that such distributions would
otherwise cause or increase an Adjusted Capital Account Deficit for a Partner.
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(c) If any fees or other payments deducted for federal income
tax purposes by the Partnership are recharacterized by a final determination of
the Internal Revenue Service as nondeductible distributions to any Partner,
then, notwithstanding all other allocation provisions (other than the Regulatory
Allocations pursuant to Section 4.4 hereof), gross income shall be allocated to
such Partner (for each Fiscal Year in which such recharacterization occurs) in
an amount equal to the fees or payments recharacterized.
4.6 TAX ALLOCATIONS: CODE SECTION 704(C).
(a) In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated between the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
Federal income tax purposes and its initial Gross Asset Value.
(b) If the Gross Asset Value of any Partnership asset is
adjusted pursuant to paragraph (ii) of the definition of Gross Asset Value,
subsequent allocations of income, gain, loss, and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such
asset for Federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Treasury Regulations thereunder.
(c) Any elections or other decisions relating to such
allocations shall be made by the General Partner in any manner that reflects the
purpose and intention of this Agreement. Allocations pursuant to this Section
4.6 are solely for purposes of Federal, state, and local taxes and shall not
affect, or in any way be taken into account in computing, any Partner's Capital
Account or share of Net Profit, Net Loss, other items, or distributions pursuant
to any provision of this Agreement.
4.7 ALLOCATION IN EVENT OF TRANSFER. If an interest in the Partnership
is transferred in accordance with Section 6 of this Agreement, Net Profit and
Net Loss of the Partnership shall be allocated between the periods before and
after the transfer by the closing of the books method. As of the date of such
transfer, the transferee shall succeed to the Capital Account of the transferor
Partner with respect to the transferred interest. This paragraph shall apply for
purposes of computing a Partner's Capital Account and for federal income tax
purposes.
SECTION 5 RIGHTS, POWERS, AND DUTIES OF THE PARTNERS AND THE PARTNERSHIP
5.1 RIGHTS, POWERS, AND DUTIES OF THE GENERAL PARTNER.
(a) POWERS IN GENERAL. Subject to Section 5.1(b)(4), the
General Partner shall have full and complete charge of all affairs of the
Partnership, and the management and control of the Partnership's business shall
rest exclusively with the General Partner. The General Partner shall be
responsible for the management and operations of the Partnership and, subject to
Section 5.1(b)(4), shall have all powers necessary to manage and control the
Partnership and to conduct the business of the Partnership, and all powers
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possessed by general partners under the Act, including the power to cause the
Partnership to take any of the actions described in Section 2.6 to the extent
necessary, convenient, or incidental to the accomplishment of the purposes of
the Partnership. The powers of the General Partner shall include the power on
behalf of the Partnership (without regard to the term of the Partnership) to:
(1) acquire by purchase, lease or otherwise any real
or personal property;
(2) operate, maintain, finance, improve, construct,
own, grant options with respect to, sell, convey, assign, mortgage and lease
real and personal property;
(3) operate, maintain, finance, improve, own, grant
options with respect to, sell, convey, assign, mortgage the license for the
Station, subject in each case to applicable law, including, without limitation,
FCC approval;
(4) sell or exchange all or any part of the property
and assets of the Partnership for property, cash or on terms or any combination
thereof;
(5) execute and modify leases and other agreements
(including leases and agreements for terms extending beyond the term of the
Partnership), and execute and modify options, licenses or agreements with
respect to any of the assets or the business of the Partnership;
(6) obtain loans for the Partnership and secure the
same by mortgaging, assigning for security purposes, pledging or otherwise
hypothecating all or any part of the property and assets of the Partnership (and
in connection therewith to place record title to any such property or assets in
the name or names of a nominee or nominees);
(7) prepay in whole or in part, refinance, recast,
increase, decrease, modify, amend, restate or extend any such mortgage, security
agreement, pledge or other security instrument, and in connection therewith to
execute and deliver, for and on behalf of the Partnership, any extensions,
renewals or modifications thereof, any new mortgage, security assignment, pledge
or other security instrument in lieu thereof;
(8) draw, make, accept, endorse, sign and deliver any
notes, drafts or other negotiable instruments or commercial paper;
(9) establish, maintain and draw upon checking,
savings and other accounts in the name of the Partnership in such banks or other
financial institutions as the General Partner may from time to time select;
(10) employ, fix the compensation of, oversee and
discharge agents and employees of the Partnership as the General Partner shall
deem advisable in the operation and management of the business of the
Partnership, including but not limited to such accountants, attorneys,
architects, consultants, engineers and appraisers, on such terms and for such
compensation, as the General Partner shall determine;
(11) compromise any claim or liability due to the
Partnership;
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(12) execute, acknowledge, verify and file any and
all certificates, documents and instruments that the General Partner considers
necessary or desirable to permit the Partnership to conduct business in any
state in which the General Partner deems advisable; and
(13) do any or all of the foregoing, discretionary or
otherwise, through agents selected by the General Partner and compensated or
uncompensated by the Partnership.
(b) RESPONSIBILITIES AND FIDUCIARY OBLIGATIONS OF THE GENERAL
PARTNER.
(1) CONDUCT OF PARTNERSHIP BUSINESS. The General
Partner shall devote to the conduct of the business of the Partnership as much
time and attention as is necessary to accomplish the purposes and to conduct
properly the business of the Partnership. The parties agree that day-to-day
operation, management, and supervision of the assets and business of the
Partnership may be delegated to other Persons selected by the General Partner
and to the employees of the Partnership.
(2) FIDUCIARY OBLIGATIONS. The General Partner shall
be liable under this Agreement for any breach of this Agreement and for personal
benefits improperly received, willful misconduct, recklessness and negligence
with respect to the business of the Partnership, but shall not be liable for
errors in judgment or for any acts or omissions that do not constitute a breach
of this Agreement or the improper receipt of personal benefits, willful
misconduct, recklessness or negligence with respect to the business of the
Partnership or for the negligence, whether of omission or commission, dishonesty
or bad faith of any employee or agent of the Partnership selected and supervised
by the General Partner with reasonable care.
(3) DUTIES GENERALLY. The General Partner, on behalf
of and at the expense of the Partnership, shall perform duties as follows:
(A) take all steps and do all things within
its powers that are reasonable and necessary in connection with the management
and operations of the Station;
(B) promote the success of the business of
the Partnership;
(C) file and publish all certificates,
statements and instruments, and all amendments thereto, that are required by law
for the formation, continuation and operation of the Partnership as a limited
partnership in the State of Delaware and for the qualification of the
Partnership to do business as a foreign limited partnership in any other
jurisdiction;
(D) pay any uncontested taxes, charges and
assessments that are levied, assessed or imposed upon the Partnership or its
property, as they become due;
(E) discharge in good faith the duties and
obligations of the Partnership under any agreement, contract or other document
to which it is a party;
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(F) cause the Partnership to carry adequate
public liability insurance, property damage insurance and other insurance
appropriate for the business of the Partnership;
(G) oversee the management of the license
for the Station, including without limitation, matters relating to programming,
employment and financing;
(H) maintain complete and accurate books of
account of the Partnership's affairs and all other records required to be
maintained by the Partnership at the Partnership's principal office;
(I) inform the Limited Partner concerning
the operations of the Partnership; and
(J) retain the services of accountants or
legal counsel as required for the Partnership.
(4) LIMITATIONS ON POWERS OF THE GENERAL PARTNER.
(A) The General Partner may not, without the
consent of the Limited Partner, cause the Partnership to do any of the
following:
(1) acquire or agree to acquire any
business other than the Station;
(2) dispose of, by sale, merger,
consolidation, lease or otherwise, any material property, assets or business of
the Partnership, except upon the liquidation and dissolution of the Partnership
in accordance with this Agreement;
(3) become a party to any
consolidation, merger, recapitalization or other form of reorganization or
become a party to any joint venture or other partnership;
(4) make, execute or deliver any
assignment for the benefit of creditors;
(5) guarantee the obligation of any
Person;
(6) do any act in contravention of
this Agreement or the Amended Certificate;
(7) do any act that would make it
impossible to carry on the business of the Partnership except upon the
dissolution of the Partnership in accordance with this Agreement;
(8) confess a judgment against the
Partnership;
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(9) use any funds or assets of the
Partnership other than for the benefit of the Partnership;
(10) possess Partnership property, or
assign any rights in specific Partnership property, for other than a Partnership
purpose;
(11) cause or permit any property of
the Partnership to be held other than in the name of the Partnership;
(12) take any action that would
subject the Limited Partner in its capacity as a limited partner to personal
liability as a general partner in any jurisdiction;
(13) admit additional partners to the
Partnership;
(14) enter into any transaction with
the General Partner or any of its Affiliates; or
(15) make any expenditure that is
materially inconsistent with the operating or capital budgets, which are the
responsibility of the General Partner subject to the consent of the Limited
Partner; PROVIDED that the consent of the Limited Partner to any such
expenditure shall not be unreasonably withheld.
(B) The General Partner may not, without the
consent of the Limited Partner, cause the Partnership to do any of the
following:
(1) purchase or otherwise acquire any
assets, business, equity interest or other property, in one or a series of
related transactions unless (i) such purchase or acquisition is reasonably
related to the business of the Partnership and (ii) the aggregate consideration
to be paid in connection with such transaction or series of related
transactions, together with the aggregate consideration paid or to be paid by
the Partnership in connection with other transactions consummated or proposed to
be consummated under this Section 5.1(b)(4)(B), would not exceed $25,000;
(2) incur indebtedness outside the
ordinary course of business;
(3) commence or settle any litigation
other than to enforce the rights under the Construction and Lease Agreement (the
"Construction and Lease Agreement"), dated as of the date hereof, by and between
the Partnership and Phoenix-51;
(4) except as provided in Section
5.1(b)(4)(C)(4) below, determine the materials and equipment to be used in
constructing or modifying the Station's facilities;
(5) enter into any reciprocal trade
agreements on behalf of the Station;
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(6) enter into any contracts in excess
of $5,000; or
(7) distribute any Partnership funds
in excess of the amount required for the payment of income taxes of the Partners
with respect to allocations of partnership income pursuant to Section 4.
(C) The General Partner may not, without the
consent of the Limited Partner (which consent shall not be unreasonably
withheld), cause the Partnership to do any of the following:
(1) sell, issue or otherwise dispose
of any equity interest in the Partnership or any option, warrant or other debt
or equity interest convertible into or evidencing the right to acquire (whether
or not for additional consideration) any equity interest in the Partnership;
(2) incur indebtedness for borrowed
money or refinance, recast, increase, modify or extend any indebtedness for
borrowed money of the Partnership where the amount involved exceeds $100,000;
(3) secure any indebtedness, to the
extent permitted under this Agreement, of the Partnership by mortgage, pledge or
other lien on any substantial part of the property of the Partnership; or
(4) construct Advanced Television
facilities for the Station, as authorized by the FCC.
(c) TAX MATTERS PARTNER.
(1) DESIGNATION. The General Partner is designated
the "Tax Matters Partner" in accordance with Code Section 6231(a)(7).
(2) AUTHORITY. The General Partner, as the Tax
Matters Partner, is authorized to represent the Partnership before taxing
authorities and courts in tax matters affecting the Partnership and the Partners
in their capacity as Partners and is entitled to take any actions on behalf of
the Partnership in any such tax proceedings that the General Partner, in its
reasonable business judgment, deems to be in the best interests of the
Partnership and the Partners, except that, without the written consent of the
Limited Partner, the General Partner shall not extend the statute of limitations
for assessment of tax deficiencies against the Partners with respect to
adjustments to the Partnership's federal, state, and local tax returns, agree to
any deficiency or other adjustment of any kind that adversely affects the
Limited Partner, or execute any agreements or other documents relating to or
affecting any tax matters that are binding on the Partnership or the Limited
Partner.
(3) DUTIES. To the extent and in the same manner as
provided by applicable law, the General Partner, as Tax Matters Partner, (A)
shall furnish the name, address, and taxpayer identification number of each
Partner to the Secretary of the Treasury or his delegate, and (B) shall keep the
Limited Partner informed of any administrative and judicial proceedings for the
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adjustment at the Partnership level of any items required to be taken into
account by a Partner for income tax purposes. The General Partner shall give
notice to the Limited Partner of any Partnership audit. The General Partner will
consult with the Limited Partner with respect to the performance of its duties
as "Tax Matters Partner."
(d) THIRD PARTIES. No Person dealing with the General Partner
shall be required to inquire into the necessity or expediency of any act taken
by the General Partner or be obligated or privileged to inquire into the
authority of the General Partner to perform any such act. Every contract,
agreement, or other instrument executed by the General Partner shall be
conclusive evidence in favor of any Person relying thereon or claiming
thereunder that (1) the Partnership created by this Agreement was in existence
at the time of the execution and delivery thereof, (2) such instrument was duly
executed in accordance with the terms and provisions of this Agreement and is
binding upon the Partnership, and (3) the General Partner was duly authorized
and empowered to execute and deliver such instrument in the name and on behalf
of the Partnership.
5.2 RIGHTS, POWERS, AND DUTIES OF THE LIMITED PARTNER. Except as
provided by law, the Limited Partner shall take no part in the control,
management, direction or operation of the affairs of the Partnership nor shall
the Limited Partner in its capacity as a limited partner have any power to act
for or bind the Partnership. Except as specifically provided in this Agreement,
no prior consent or approval of the Limited Partner shall be required with
respect to any action to be taken by the General Partner on behalf of the
Partnership.
5.3 REIMBURSEMENT OF EXPENSES. The Partnership shall reimburse the
General Partner and any agent or representative of the General Partner for all
costs and expenses incurred by them which are directly attributable to the
business of the Partnership.
5.4 EXCULPATION AND INDEMNIFICATION.
(a) Neither Partner shall be liable, in damages or otherwise,
to the Partnership or to the other Partner for any loss that arises out of any
acts or omissions performed or omitted by it pursuant to the authority granted
by this Agreement if the conduct of the Partner did not constitute a breach of
this Agreement or the improper receipt of personal benefits, willful misconduct,
recklessness, or negligence with respect to the business of the Partnership.
(b) In any threatened, pending, or completed claim, action,
suit or proceeding to which any Partner was or is a party or is threatened to be
made a party by reason of its activities on behalf of the Partnership, the
Partnership shall indemnify and hold harmless such Partner against losses,
damages, expenses (including attorneys' and accountants' fees), judgments and
amounts paid in settlement actually and reasonably incurred in connection with
such claim, action, suit or proceeding, except that no Partner shall be
indemnified for actions constituting a breach of this Agreement or the improper
receipt of personal benefits, willful misconduct, recklessness or negligence
with respect to the business of the Partnership; provided, however, that to the
extent any Partner has been successful on the merits or otherwise in defense of
any action, suit or proceeding to which such Partner was or is a party or is
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threatened to be made a party by reason of the fact such Partner was or is a
Partner of the Partnership, or in defense of any claim, issue or matter in
connection therewith, the Partnership shall indemnify such Partner and hold such
Partner harmless against the expenses (including attorneys' and accountants'
fees) actually incurred by such Partner in connection therewith.
(c) Expenses (including attorneys' and accountants' fees)
incurred in defending a civil or criminal claim, action, suit or proceeding
shall be paid by the Partnership in advance of the final disposition of the
matter upon receipt of a written agreement by or on behalf of any Partner to
repay such amount if such Partner is ultimately determined not to be entitled to
indemnity.
(d) Each Partner shall look solely to the assets of the
Partnership for return of the Partner's investment, and if the property of the
Partnership remaining after the discharge of the debts and liabilities of the
Partnership is insufficient to return a Partner's investment, the Partner shall
have no recourse against the other Partner, except as expressly provided herein.
5.5 OTHER BUSINESSES. Either Partner, and any stockholder, partner,
Affiliate, agent or representative of either Partner, may engage in or possess
an interest in other business ventures of any nature or description,
independently or with others, whether currently existing or hereafter created
and whether or not competitive with or advanced by the business of the
Partnership. Neither the Partnership nor the other Partner shall have any rights
in or to the income or profits derived therefrom, nor shall a Partner have any
obligation to the other Partner with respect to any such enterprise or related
transaction.
5.6 LIABILITY OF LIMITED PARTNER. The Limited Partner shall have no
personal liability with respect to any liabilities or obligations of the
Partnership except to the extent that it assumes or guarantees any of the debts
of the Partnership. The Limited Partner shall not be personally liable or
obligated, except as otherwise required by law, either (a) to pay to the
Partnership or to any creditor of the Partnership or the General Partner any
deficiency in the Limited Partner's Capital Account, or (b) to return to the
Partnership or to pay any creditor of the Partnership or the General Partner the
amount of any distribution to the Limited Partner, including any return to the
Partner of the Limited Partner's Capital Contribution.
SECTION 6 ASSIGNMENT, TRANSFER, OR SALE OF INTERESTS IN PARTNERSHIP
6.1 TRANSFER OF PARTNERSHIP INTEREST. Neither Partner shall sell,
assign, pledge or otherwise encumber or transfer all or any part of its interest
in the Partnership to any Person without the prior written consent of the other
Partner, and any attempt to do so without such consent shall be null and void.
6.2 WITHDRAWAL OF THE GENERAL PARTNER. The General Partner agrees not
to withdraw from the Partnership without the prior consent of the Limited
Partner. For purposes of this Section 6.2, the term "withdrawal" shall include
the happening of any event described in Section 17-402 of the Act.
6.3 SUBSTITUTION OF PARTNERS.
(a) RIGHTS OF A TRANSFEREE.
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(1) The transferee of all or part of the interest of
either Partner in the Partnership shall not be admitted as a substitute Partner
of the Partnership, in the place of the transferring Partner, except with the
prior written consent of the other Partner and compliance with all the other
requirements of Section 6.3(b). Either Partner may withhold its consent to the
substitution of a transferee for the transferring Partner arbitrarily in its
sole discretion.
(2) A transferee who is not admitted as a Partner
shall not be a Partner with respect to the interest transferred, and such a
transferee shall have none of the rights of a Partner under the Act or under
this Agreement (including the right to vote on or consent to any matter), other
than the right to receive allocations and distributions from the Partnership
with respect to the interest transferred.
(b) SUBSTITUTE PARTNERS. Any transferee of all or part of the
interest of a Partner in the Partnership shall be admitted as a substitute
Partner of the Partnership only if the transferee has:
(1) obtained the prior written consent of the other
Partner as required by Section 6.3(a)(1) above;
(2) accepted and assumed all the terms and provisions
of this Agreement;
(3) provided an opinion of counsel, in form and
substance acceptable to counsel for the Partnership, that neither the offering
nor the transfer of the partnership interest violates any provision of any
federal or state securities or comparable law; and
(4) paid all reasonable expenses of the Partnership
in connection with the admission of the transferee as a substitute Partner,
including the cost (including reasonable attorneys' fees) of the preparation,
filing, and publication of any amendment to this Agreement or to the Amended
Certificate that may be necessary or desirable in connection with such
admission.
6.4 BANKRUPTCY AND DISSOLUTION OF LIMITED PARTNER.
(a) In the event of the bankruptcy of a Limited Partner, the
trustee or legal representative of a Limited Partner shall succeed to all rights
of the Limited Partner to receive allocations and distributions from the
Partnership, but shall not be admitted as a substitute Limited Partner of the
Partnership except upon compliance with all the requirements of Section 6.3(b).
(b) The dissolution or bankruptcy of a Limited Partner shall
not cause the Partnership to be dissolved or terminated.
SECTION 7 DISSOLUTION AND TERMINATION OF THE PARTNERSHIP
7.1 EVENTS OF DISSOLUTION. The Partnership shall dissolve upon the
earliest to occur of:
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(a) the agreement of the General Partner and the Limited
Partner to dissolve the Partnership;
(b) the sale, exchange, involuntary conversion, or other
disposition or transfer of all or substantially all the assets of the
Partnership;
(c) the occurrence of any event described in Section 17-402 of
the Act with respect to the General Partner, except that the Partnership shall
not be dissolved if the Partners elect to continue the business of the
Partnership pursuant to Section 7.2(a); PROVIDED, HOWEVER, that the General
Partner will not be considered to have withdrawn from the Partnership if it: (i)
makes an assignment for the benefit of creditors; (ii) files a voluntary
petition of bankruptcy, (iii) is adjudicated a bankrupt or insolvent, (iv) files
a petition for reorganization or similar relief, (v) files an answer or fails to
contest proceedings of this nature, or (vi) seeks or consents to the appointment
of a trustee or receiver;
(d) subject to any provision of this Agreement that limits or
prevents dissolution, the happening of any event that, under applicable law,
causes the dissolution of a limited partnership; or
(e) the expiration of the term of the Partnership.
7.2 ELECTION TO CONTINUE PARTNERSHIP.
(a) Notwithstanding Section 7.1(c), in the event of the
withdrawal of the General Partner (as defined in, and whether or not in
contravention of, Section 6.2), the Partnership shall not be dissolved and the
business of the Partnership shall be continued if, within ninety (90) days after
such withdrawal both Partners elect and agree in writing to continue the
business of the Partnership and shall appoint, effective as of the withdrawal of
the General Partner, a Person (who may be the Limited Partner) to be a general
partner (the "New General Partner") of the Partnership upon such terms and
conditions as are consented to by the Partners.
(b) If the Limited Partner is designated pursuant to Section
7.2(a) to be the New General Partner of the Partnership, the Limited Partner
shall continue to be a Limited Partner with respect to its interest as Limited
Partner for the purpose of computing all credits, charges, allocations and
distributions under this Agreement.
7.3 ACTIONS ON DISSOLUTION.
(a) LIQUIDATOR. Upon the dissolution of the Partnership, the
General Partner, or, if the General Partner is unable to do so or if the General
Partner wrongfully caused the dissolution of the Partnership, a Person selected
by the Limited Partner, shall act as liquidator to wind up the Partnership. The
liquidator shall have full power and authority to sell, assign and encumber any
or all of the Partnership's assets and to wind up and liquidate the affairs of
the Partnership in an orderly and businesslike manner.
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(b) CERTIFICATE OF CANCELLATION OF LIMITED PARTNERSHIP. Upon
the dissolution and winding up of the Partnership, the liquidator shall cause
the cancellation of the Amended Certificate in accordance with Section 17-203 of
the Act.
(c) APPLICATION OF PROCEEDS. The proceeds of liquidation shall
be applied first to the payment of the debts and liabilities of the Partnership
(including any loans to the Partnership made by any Partner), the expenses of
liquidation, and the establishment of any reserves that the liquidator deems
necessary for potential or contingent liabilities of the Partnership. Remaining
proceeds shall be distributed to the Partners as provided in Section 4.1(b).
(d) FINAL ACCOUNTING. Upon the dissolution and winding up of
the Partnership, a proper accounting shall be made from the date of the last
previous accounting to the date of winding up.
(e) STATEMENT OF LIQUIDATION. Within a reasonable time
following the completion of the liquidation of the Partnership, the liquidator
shall submit a statement (which need not be audited) to each Partner setting
forth the assets and liabilities of the Partnership as of the date of
liquidation and the amount of the distribution to each Partner pursuant to
Section 4.1(b).
(f) EFFECT OF WITHDRAWAL OF GENERAL PARTNER. The withdrawal of
the General Partner (including the happening of any event described in Section
17-402 of the Act) shall not alter the allocations and distributions to be made
to the Partners pursuant to this Agreement.
(g) TERMINATION OF PARTNERSHIP. Upon the completion of the
distribution of Partnership assets and the proceeds of liquidation as provided
in this Section 7.3, the Partnership shall be terminated.
SECTION 8 BOOKS, RECORDS, AND RETURNS; TAX YEAR
8.1 BOOKS OF ACCOUNT AND RECORDS. The Partnership's books and records,
including a register showing the names and addresses of the Partners, a copy of
this Agreement, and any other records required to be maintained by Section
17-305 of the Act, shall be maintained at the principal office of the
Partnership at the location specified in Section 2.7. All such books and records
shall be available for inspection and copying by the Partners or their duly
authorized representatives during ordinary business hours. The General Partner
shall keep accurate books and records of the operation of the Partnership which
shall reflect all transactions and be appropriate and adequate for the
Partnership's business and for carrying out the provisions of this Agreement.
8.2 ACCOUNTING REPORTS. Within ninety (90) days after the end of each
Fiscal Year of the Partnership, the General Partner shall cause to be furnished
to the Limited Partner a report of the activities of the Partnership for the
preceding Fiscal Year, including financial statements for the Fiscal Year (which
need not be audited) consisting of a balance sheet, a statement of income and
expense, and a statement of cash flows, all prepared in accordance with
generally accepted accounting principles consistently applied, except as the
financial statements shall otherwise specify. Within forty-five (45) days after
the end of each of the first three fiscal quarters of each Fiscal Year of the
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Partnership, the General Partner shall cause to be furnished to the Limited
Partner unaudited financial statements for the fiscal quarter consisting of a
balance sheet, a statement of income and expense, and a statement of cash flows.
8.3 TAX RETURNS. The General Partner shall cause the Partnership's tax
returns to be prepared and filed. Within ninety (90) days after the end of each
Fiscal Year of the Partnership, the General Partner shall cause to be furnished
to the Limited Partner a statement, to be used in the preparation of the Limited
Partner's income tax returns, showing the amounts of any Profits and Losses, tax
credits, and gains allocable to the Partners for the Fiscal Year, and the amount
of any distributions made to the Partners by the Partnership during the Fiscal
Year.
8.4 DEPOSIT OF PARTNERSHIP FUNDS. All revenues, assessments, loan
proceeds, and other receipts of the Partnership will be maintained on deposit in
interest-bearing and non-interest bearing accounts and other investments as the
General Partner deems appropriate. Any interest or other income generated by the
Partnership's deposits or investments will be for the Partnership's account.
Partnership funds from any of the various sources mentioned above may be
commingled with other Partnership funds, and may be withdrawn, expended, and
distributed as authorized by this Agreement. The Partnership shall not commingle
Partnership funds with the separate funds of the Partners, their Affiliates, or
any other Person.
SECTION 9 MISCELLANEOUS
9.1 CAPTIONS. All section captions contained in this Agreement are for
convenience only and shall not be deemed part of this Agreement.
9.2 PRONOUNS, SINGULAR AND PLURAL FORM. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, and neuter as the
identity of the Person or Persons referred to may require, and all words shall
include the singular or plural as the context or the identity of Persons may
require.
9.3 FURTHER ACTION. The parties shall execute and deliver all
documents, provide all information, and take, or forbear from, all actions that
may be necessary or appropriate to achieve the purposes of this Agreement.
9.4 ENTIRE AGREEMENT. This Agreement contains the entire understanding
between the parties and supersedes any prior understandings and agreements
between them regarding the subject matter of this Agreement.
9.5 AGREEMENT BINDING. This Agreement shall be binding upon the heirs,
executors, guardians, administrators, successors, and assigns of the parties. No
provision of this Agreement may be waived except by a written instrument
specifically waiving such provision and executed by the party to be charged with
such waiver. No provision of this Agreement may be amended or modified except by
a written instrument executed by all of the parties.
9.6 NOTICES. All notices, demands, and requests required or permitted
to be given under the provisions of this Agreement shall be in writing and shall
be deemed to have been duly delivered and received (a) on the date of personal
delivery, or (b) on the date of receipt (as shown on the return receipt) if
mailed by registered or certified mail, postage prepaid and return receipt
requested, or if sent by Federal Express or similar courier service, with all
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charges prepaid, in each case addressed to the Partner at the address set forth
in Section 2.10 or at the last address furnished by the Partner to the other
Partner by notice pursuant to this Section 9.6. Nothing in this Section 9.6
shall preclude the delivery of notices by appropriate means other than those
described above, including facsimile.
9.7 SEVERABILITY. If any provision or part of any provision of this
Agreement shall be invalid or unenforceable in any respect, such provision or
part of any provision shall be ineffective to the extent of such invalidity or
unenforceability only, without in any way affecting the remaining parts of such
provision or the remaining provision of this Agreement.
9.8 COUNTERPARTS. This Agreement may be signed in counterparts with the
same effect as if the signature on each counterpart were upon the same
instrument.
9.9 GOVERNING LAW. This Agreement shall be governed, construed, and
enforced in accordance with the laws of the State of Delaware (without regard to
the choice of law provisions thereof).
9.10 NO THIRD-PARTY BENEFICIARIES. This Agreement is not intended to,
and shall not be construed to, create any right enforceable by any Person not a
party hereto, including any creditor of the Partnership or of either of the
Partners.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
▇▇▇▇▇▇ COMMUNICATIONS OF PHOENIX-51,
INC., General Partner
By:
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
▇▇▇▇▇▇ COMMUNICATIONS OF PHOENIX-51,
INC., Limited Partner
By:
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
▇▇▇▇▇▇ COMMUNICATIONS TELEVISION,
INC., Limited Partner
By:
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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SCHEDULE A
Contributions Described
Partner in Section 3.1(b)(1) Percentage Interest
------- -------------------- -------------------
▇▇▇▇▇▇ Communications of Phoenix-51, Inc., $51 51%
as General Partner
▇▇▇▇▇▇ Communications of Phoenix-51, Inc., $48 48%
as Limited Partner
▇▇▇▇▇▇ Communications Television, Inc., as $1 1%
Limited Partner
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