AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
FFP PARTNERS, L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
FFP PARTNERS, L.P.
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is entered into
by and among FFP Partners Management Company, Inc., a Delaware corporation, as
the General Partner, and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as the Organizational Limited
Partner, together with the Persons who become Limited Partners of the
Partnership, as provided herein.
The Partnership was formed by the filing or a certificate of limited
partnership with the Secretary of State of Delaware on December 31, 1986. The
General Partner and the Organizational Limited Partner now desire to amend and
restate the limited partnership agreement of the Partnership in its entirety as
follows:
ARTICLE I
ORGANIZATIONAL MATTERS
1.1 Formation. The General Partner and the Organizational Limited Partner
have formed and hereby continue the Partnership as a limited partnership
pursuant to the provisions of the Delaware Act. Except as expressly provided
herein to the contrary, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the
Delaware Act. The Partnership Interest of any Partner shall be personal property
for all purposes.
1.2 Name. The name of the Partnership shall be "FFP Partners, L.P." The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of any General Partner or
any Affiliate. The words "Limited Partnership" shall be included in the
Partnership's name where necessary for the purposes of complying with the laws
of any jurisdiction that so requires. The General Partner in its sole discretion
may change the name of the Partnership at any time and from time to time.
1.3 Registered Office; Principal Office. The address of the registered
office of the Partnership in the State of Delaware shall be ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the registered agent for
service of process on the Partnership in the State of Delaware at such
registered office shall be The Corporation Trust Company. The principal office
of the Partnership shall be located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, or such other place as the General Partner may from time to time
designate to the Partners. The Partnership may maintain offices at such other
place or places as the General Partner deems advisable. The business address of
the General Partner is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; the General
Partner may change its address at any time and from time to time.
1.4 Power of Attorney.
(a) Each Partner hereby constitutes and appoints the General Partner and
the Liquidator (and any successor to either of them by merger, assignment,
election or otherwise), and each of their authorized officers, with full power
of substitution as his true and lawful agent and attorney-in-fact, with full
power and authority in his name, place and ▇▇▇▇▇, to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) this Agreement, all certificates and other
instruments and all amendments thereof which the General Partner or the
Liquidator deems reasonable and appropriate or necessary to form, qualify, or
continue the qualification of, the Partnership as a limited partnership (or a
partnership in which limited partners have limited liability) in the State of
Delaware and in all other jurisdictions in which the Partnership may conduct
business or own property; (B) all instruments which the General Partner or the
Liquidator deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its terms; (C)
all conveyances and other instruments or documents which the General Partner or
the Liquidator deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including a certificate of cancellation; (D) all instruments relating to the
admission, withdrawal or substitution of any Partner pursuant to Article XI,
Article XII or Article XIII; and (E) all instruments (including this Agreement
and any and all amendments and restatements hereof) relating to the
determination of the rights, preferences and privileges of any class or series
of Units issued pursuant to Section 4.3 of this Agreement; and
(ii) sign, execute swear to and acknowledge all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or necessary,
in the sole discretion of the General Partner or the Liquidator, to make,
evidence, give, confirm or ratify any vote, consent, approval, agreement or
other action which is made or given by the Partners hereunder or is consistent
with the terms of this Agreement and/or appropriate or necessary, in the sole
discretion of the General Partner or the Liquidator, to effectuate the terms or
intent of this Agreement; provided, however, that when required by Section 15.3
or Section 15.9 or any provision of this Agreement which establishes a
percentage of the Limited Partners required to take any action, the General
Partner or the Liquidator may exercise the power of attorney made in this
subsection (ii) only after the necessary vote, consent or approval by a Majority
Interest or other required percentage.
Nothing herein contained shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article XV or as may be
otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution,
bankruptcy or termination of any Partner or the transfer of all or any portion
of his Partnership Interest and shall extend to such Partner's heirs,
successors, assigns and personal representatives. Each such Partner hereby
agrees to be bound by any representations made by the General Partner or the
Liquidator, acting in good faith pursuant to such power of attorney; and each
such Partner hereby waives any and all defenses which may
be available to contest, negate or disaffirm the action of the General Partner
or the Liquidator, taken in good faith under such power of attorney. Each
Partner shall execute and deliver to the General Partner or the Liquidator
within 15 days after receipt of the General Partner's or the Liquidator's
request therefor, such further designations, powers of attorney and other
instruments as the General Partner or the Liquidator deems necessary to
effectuate this Agreement and the purposes of the Partnership.
1.5 Term. The Partnership commenced upon the filing of the Certificate of
Limited Partnership of the Partnership in accordance with the Delaware Act and
shall continue in existence until the close of Partnership business on December
31, 2037, or until the earlier termination of the Partnership in accordance with
the provisions of Article XIV. The General Partner shall not commence or engage
in any business on behalf of the Partnership until after the Commencement Date,
other than matters necessary or incidental to the Partnership's organization
(including, without limitation, the issuance of an interest in the Partnership
to the Organizational Limited Partner) and qualification, the organization and
qualification of the Operating Partnership or the issuance of Units to the
Initial Limited Partners.
1.6 Organizational Limited Partner. In order to create the Partnership under
the Delaware Act, the General Partner has accepted contributions to the capital
of the Partnership in the amount of $990 from the Organizational Limited Partner
for an interest in the Partnership, and the Organizational Limited Partner has
been admitted to the Partnership as a Limited Partner. As of the Commencement
Date and the admission to the Partnership of the Initial Limited Partners, the
interest in the Partnership of the Organizational Limited Partner shall be
terminated and the amounts contributed by him to the Partnership shall be
refunded and the Organizational Limited Partner shall withdraw as a Limited
Partner. Ninety-nine percent (99%) of any interest or other profit which may
have resulted from the investment or other use of such amounts paid by the
Organizational Limited Partner to the Partnership shall be allocated and
distributed to the Organizational Limited Partner and the balance thereof shall
be allocated and distributed to the General Partner. The interest in the
Partnership of the Organizational Limited Partner is not transferable except by
operation of law.
ARTICLE II
DEFINITIONS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 12.3 and shown as a Limited Partner on the
books and records of the Partnership.
"Adjusted Property" means any property the Carrying Value of which has been
adjusted pursuant to Section 4.5(d)(i).
"Affiliate" means any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person in question. As used
in the definition of "Affiliate," the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies of a Person, whether through ownership of voting securities,
by contract or otherwise.
"Affiliated Partnership" means a partnership which is an Affiliate of the
Partnership and in which the Partnership owns a partnership interest.
"Affiliated Partnership Agreement" means the partnership agreement entered
into by the partners of an Affiliated Partnership.
"Agreed Value" of the interest in the Original Properties transferred by
the Transferors to the Partnership, pursuant to Section 4.2, means the sum of
(a) that amount arrived at by multiplying the number of Class B Units issued in
exchange for the conveyance of such properties pursuant to the Conveyance
Agreement by the Initial Class A Unit Price, plus (b) the amount of any
indebtedness or liabilities either assumed by the Partnership upon such exchange
or to which such Contributed Property is subject, when contributed. "Agreed
Value" of the interest in the Original Properties being contributed by the
Transferors on behalf of the General Partner pursuant to Section 4.1(a), means
the amount which is proportionate to the Agreed Value of the interest
transferred by the Transferors to the Partnership, pursuant to Section 4.2(a),
based on the respective interest so contributed or transferred. "Agreed Value"
of any other Contributed Property transferred to the Partnership means the fair
market value of such property or other consideration as determined by the
General Partner using such reasonable method of valuation as may be adopted by
the General Partner. The General Partner shall, in its discretion, use such
method as it deems reasonable and appropriate to allocate the aggregate Agreed
Value of the Contributed Properties transferred to the Partnership in a single
or integrated transaction among each separate property. The Agreed Value of any
Contributed Property shall reflect any adjustments made pursuant to Sections
4.5(b)(iv) and 4.5(c).
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may he amended, supplemented or restated from time to time.
"Assignee" means a Person to whom one or more Units have been transferred,
by assignment or otherwise in a manner permitted under this Agreement, and who
has delivered a Transfer Application to the Transfer Agent pursuant to this
Agreement, but who has not become a Substituted Limited Partner.
"Book-Tax Disparities" means the differences between a Partner's Capital
Account balance, as maintained pursuant to Section 4.5, and such balance had the
Capital Account been maintained strictly in accordance with tax accounting
principles (such disparities reflecting the differences between the Carrying
Value of either Contributed Properties or Adjusted Properties, as adjusted from
time to time, and the adjusted basis thereof for federal income tax purposes).
"Built-in Gain" or "Built-in Loss" means the difference between the
Carrying Value of each item of Partnership property, as adjusted from time to
time, and the adjusted basis thereof for federal income tax purposes.
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the Government of the United States or the
States of Texas or New York shall not be regarded as a Business Day.
"Capital Account" means the capital account maintained for a Partner
pursuant to Section 4.5.
"Capital Contribution" means any cash and cash equivalents or Contributed
Property (or services rendered) which a Partner contributes to the Partnership,
pursuant to Sections 4.1, 4.2 or 4.3.
"Capital Transaction" means any taxable disposition of Partnership assets
or property that results in a net taxable gain or loss that the General Partner
deems substantial as compared to the net income or net loss from operations for
the fiscal year in which the disposition occurs.
"Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
cost recovery and amortization deductions charged to the Partners' Capital
Accounts pursuant to Section 4.5(a) with respect to such property, and (b) with
respect to any other property, the adjusted basis of such property for federal
income tax purposes, as of the time of determination. The Carrying Value of any
property shall be adjusted from time to time in accordance with Sections 4.5(c)
and 4.5(d), and to reflect changes, additions or other adjustments to the
Carrying Value for dispositions, acquisitions or improvements of Partnership
properties, as deemed appropriate by the General Partner.
"Certificate" means a certificate issued by the Partnership evidencing
ownership of one or more Units.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware pursuant
to Section 6.2, as it may be amended and/or restated from time to time.
"Class A Limited Partner" and "Class B Limited Partner" have the respective
meanings specified in the definition of "Limited Partner" below in this Article
II.
"Class A Units" means that certain class of Units representing the
Partnership Interests of all Class A Limited Partners.
"Class B Units" means that certain class of Units representing the
Partnership interests of all Class B Limited Partners.
"Class Percentage Interest" means, with respect to one or more Limited
Partners or Assignees included in a class, that fraction, expressed as a
percentage, the numerator of which is
such Limited Partners' or Assignees' Units of such class, and the denominator of
which is the total number of such Units of such class outstanding as of the date
of such determination,
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, and applicable regulations thereunder. Any reference herein
to a specific section or sections of the Code shall be deemed to include a
reference to any corresponding provision of future law.
"Commencement Date" means the same as the "Closing Date"' as defined in the
Underwriting Agreement.
"Contributed Property" means each Contributing Partner's interest in each
property or other consideration, in such form as may be permitted by the
Delaware Act, but excluding cash and cash equivalents, contributed to the
Partnership by such Contributing Partner (or deemed contributed to the
Partnership upon termination thereof pursuant to Section 708 of the Code). Once
the Carrying Value of a Contributed Property is adjusted pursuant to Section
4.5(d)(i), such property shall no longer constitute a Contributed Property for
purposes of Section 5.2(b) but shall be deemed an Adjusted Property for such
purposes.
"Contributing Partner" means each Partner contributing (or deemed to have
contributed, upon termination of the Partnership pursuant to Section 708 of the
Code or otherwise) a Contributed Property to the Partnership in exchange for
Units.
"Conveyance Agreement" means that agreement among the Transferors, the
General Partner, the Partnership and the Operating Partnership wherein, among
other things, (a) the Transferors, on behalf of themselves and the General
Partner, each contribute and convey to the Partnership certain designated assets
and the Partnership assumes designated liabilities, if any, and related
obligations, and (b) the Partnership contributes and conveys such assets to the
Operating Partnership and the Operating Partnership assumes such designated
liabilities, if any, and related obligations.
"Deficiency" has the meaning specified in Section 5.3(d).
"Deficit" has the meaning specified in Section 5.3(e).
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del. C. (S)17-101, et seq., as it may be amended from time to time, and any
successor to such Act.
"Departing Partner" means a former General Partner, as of the effective
date of any withdrawal or removal of such former General Partner pursuant to
Section 13.1 or 13.2.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor to such statute.
"General Partner" means FFP Partners Management Company, Inc., or its
successor in its capacity as general partner of the Partnership.
"Indemnitee" has the meaning specified in Section 6.9.
"Initial Class A Unit Price" means that price specified in the Underwriting
Agreement for the Initial Offering as the price at which a Class A Unit will be
purchased from the Partnership by the Underwriters.
"Initial Limited Partners" means the Transferors purchasing Class B Units
and the Underwriters purchasing Class A Units in the Initial Offering, in
accordance with Section 4.2 and shown as such on the books and records of the
Partnership.
"Initial Offering" means the first public offering of Class A Units
(including pursuant to any exercise of the overallotment option), all as
described in the Registration Statement.
"Issue Price" means the price at which a Unit is purchased from the
Partnership.
"Limited Partner" means any Person who is a Limited Partner of the
Partnership, including a Class A Limited Partner and a Class B Limited Partner,
but not including the Organizational Limited Partner (i.e., each Initial Limited
Partner, each Substituted Limited Partner, each Additional Limited Partner, and
any Departing Partner upon the conversion of its Partnership Interest or its
interest in the Operating Partnership into Units pursuant to Section 13.2), and
shown as a Limited Partner on the books and records of the Partnership; a
Limited Partner may be designated a "Class A Limited Partner" or "Class B
Limited Partner" depending upon the class of Units such Limited Partner holds,
and for the purposes of determining allocations and distributions under Articles
V and XIV, an Assignee.
"Liquidator" has the meaning specified in Section 14.3.
"Majority Interest" means the owners of more than 50% of the aggregate
Percentage Interests owned by all Partners. Except as otherwise expressly
provided in this Agreement or under applicable law or regulation, Units held in
the name of the General Partner as Record Holder on the pertinent Record Date
shall be entitled to vote or approve and be counted on any matter submitted to
Partners for their vote or approval.
"Maximum Tax Liability" means an amount equal to (a) the aggregate taxable
income with respect to all Class A Units for a fiscal year (as estimated by the
General Partner using assumptions and projections it deems necessary) divided by
the number of outstanding Class A Units as of the end of the particular year,
multiplied by (b) the highest effective federal income tax rate for individuals
in effect for that fiscal year.
"Minimum Gain" means the amount, if any, by which the total principal
balance of the indebtedness of the Partnership that is secured by assets of the
Partnership and for which no Partner has any personal liability (excluding any
portion of such principal balance that would not be treated as an amount
realized under Section 1001 of the Code and Section 1.1001-2(a) of the Treasury
Regulations if such indebtedness were foreclosed upon) exceeds the Partnership's
adjusted tax basis in such assets. For purposes of this Agreement, a Partners
share of Partnership Minimum Gain shall be determined in accordance with the
provisions of Treasury Regulation Section 1.704-1 (b)(4)(iv)(f).
"NASDAQ" means. the National Association of Securities Dealers Automated
Quotation System.
"National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Exchange Act.
"Net Agreed Value" means (a) in the case of a partnership interest in the
Operating Partnership contributed to the Partnership by a Departing Partner
pursuant to Section 13.2, the amount of the capital account attributable to such
partnership interest under the Operating Partnership Agreement as of the end of
the fiscal month immediately preceding the fiscal month during which such
contribution is made, (b) in the case of any Contributed Property, the Agreed
Value of such property or other consideration reduced by any indebtedness or
liabilities either assumed by the Partnership upon such contribution or to which
such property is subject when contributed, and (c) in the case of any property
currently distributed to a Partner pursuant to Section 5.3 or distributed in
liquidation of the Partnership pursuant to Sections 14.3 and 14.4, the
Partnership's Carrying Value of such property at the time such property is
distributed reduced by any indebtedness either assumed by such Partner upon such
distribution or to which such property is subject at the time of distribution.
"Operating Income" and "Operating Loss" of the Partnership, as the case may
be, means, for any taxable period, the amount by which the gross income of the
Partnership (other than income and gain in a Terminating Capital Transaction and
other than items of income or gain allocated pursuant to Section 5.1(b) through
(d) and Section 5.2(b) through (h)) during such period, exceeds (in the case of
Operating Income) or is less than (in the case of Operating Loss) the sum of all
items of loss or deduction that are allowable as deductions (other than items of
depreciation, cost recovery and amortization, loss and deduction in a
Terminating Capital Transaction and other than items of deduction or loss
allocated pursuant to Section 5.1(b) through (d) and Section 5.2(b) through (h))
to the Partnership under the Code with respect to such period, as calculated for
federal income tax purposes and reported by the Partnership on its federal
income tax partnership return.
"Operating Partnership" means FFP Operating Partners, L.P., the limited
partnership established under the Delaware Act and by the Operating Partnership
Agreement.
"Operating Partnership Agreement" means the limited partnership agreement
pursuant to which the Operating Partnership is formed, as it may he amended or
restated from time to time.
"Opinion of Counsel" means a written opinion of counsel (who may be regular
counsel to the Partnership or the General Partner) acceptable to the General
Partner,
"Organizational Limited Partner" means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, in his capacity as
the organizational limited partner pursuant to this Agreement.
"Original Properties" means those certain assets of the Transferors, all as
described in the Conveyance Agreement, interests in which are to he contributed
to the Partnership by the Transferors on behalf of themselves and the General
Partner pursuant to Article IV
"Outstanding" means the number of Units issued by the Partnership and shown
on the Partnership's books and records to be outstanding, less any Units held by
the Partnership or the Operating Partnership.
"Partner" means the General Partner or a Limited Partner.
"Partnership" means the limited partnership organized pursuant to this
Agreement.
"Partnership Interest" means the interest of a Partner or Assignee in the
Partnership.
"Percentage Interest" means (a) as to the General Partner, 1%, and (b) as
to any Limited Partner or Assignee included in a class, the product of 99% times
the Class Percentage Interest of each such Limited Partner or Assignee with
respect to the class for which the determination is being made, provided that
unless otherwise specifically stated herein, or in the designation fixed by the
General Partner pursuant to Section 4.3(a) with respect to a particular class,
the determinations of Percentage Interest of Limited Partners and Assignees of
all classes shall be made as though all Limited Partners and Assignees were
members of one class.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"Prescribed Asset Value" means, as of any date of determination, that
amount equal to the sum of (a) the quotient obtained by dividing (i) an amount
equal to the product of (1) the total number of Outstanding Units of a
particular class (immediately prior to an issuance of Units of such class
pursuant to Section 4.3, if such issuance triggered an asset valuation pursuant
to Section 4.5(d)(i)) times (2)(A) in the case of a valuation occasioned by an
issuance of Units of such class pursuant to Section 4.3, the Issue Price as of
the date of issuance or (B) in the case of a valuation occasioned by a deemed
distribution resulting from a constructive termination of the Partnership
pursuant to Section 708 of the Code, the Unit Price for Units of such class as
of the date of deemed distribution, by (ii) the Percentage Interest represented
by all Outstanding Units of that class (immediately prior to an issuance of
Units pursuant to Section 4.3 if such issuance triggered an asset valuation
pursuant to Section 4.5(d)(i)) or by the Percentage Interest represented by all
Outstanding Units of all classes (immediately prior to an asset valuation
pursuant to Section 4.5(d)(ii)), plus (b) the amount of any outstanding
Partnership liability or other indebtedness, as of the date of determination.
"Purchase Date" means the date determined by the General Partner as the
date for purchase of all Outstanding Units (other than Units owned by the
General Partner and its Affiliates) pursuant to Section 17.1(b).
"Purchase Funds" means an amount in cash equal to the aggregate Purchase
Price of all Units subject to purchase by the General Partner on the Purchase
Date in accordance with Section 17.1.
"Purchase Price" means an amount per Unit equal to the greater of (a) the
highest cash price paid by the General Partner or any Affiliate thereof for any
Unit purchased during the 90 days immediately prior to the date on which the
notice described in Section 17.1(b) is first mailed, if any such purchase
occurred during such period, or (b)(i) if the Units are listed or admitted to
trading on one or more National Securities Exchanges, the average of the last
reported sale prices per Unit regular way or, in case no such reported safe has
taken place on any such day, the average of the last reported bid and asked
prices per Unit regular way, in either case on the principal National Securities
Exchange on which the Units are listed or admitted to trading, for the 30
trading days immediately preceding the date of the mailing of such notice, (ii)
if the Units are not listed or admitted to trading on a National Securities
Exchange but are quoted by NASDAQ, the average of the closing bid per Unit for
the 30 trading days immediately preceding the date of the mailing of such
notice, as furnished by the National Quotation Bureau Incorporated or such other
nationally recognized quotation service as may be selected by the General
Partner for such purpose if said Bureau is not at the time furnishing
quotations, or (iii) if the Units are not listed for trading on a National
Securities Exchange or quoted by NASDAQ, an amount equal to the fair market
value of a Unit as of the date of the mailing of such notice, as determined by
the General Partner using any reasonable method of valuation.
"Recapture Income" means any gain recognized by the Partnership (but
computed without regard to any adjustment as may be required by Section 734 or
743 of the Code) upon the disposition of any property or asset of the
Partnership that does not constitute capital gain for federal income tax
purposes because such gain represents the recapture of deductions previously
taken with respect to such property or assets.
"Record Date" means the date established by the General Partner for
determining (a) the identity of Limited Partners entitled to notice of or to
vote at any meeting of Limited Partners or entitled to vote by ballot or give
consent to Partnership action in writing without a meeting or entitled to
exercise rights in respect of any other lawful action of Limited Partners, or
(b) the identity of Record Holders entitled to receive any report or
distribution.
"Record Holder" as applied to a Unit means the Limited Partner or Assignee
in whose name the Unit is registered on the books of a Transfer Agent as of the
close of business on a particular Business Day.
"Registration Statement" means the Registration Statement on Form S-1, as
it has been or as it may be amended from time to time, filed by the Partnership
with the Securities and Exchange Commission under the Securities Act to register
the offering and sale of the Class A Units in the Initial Offering.
"Residual Gain" or "Residual Loss" means any net gain or net loss, as the
case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or
other disposition of a Contributed Property or Adjusted Property, to the extent
such net gain or net loss is not allocated pursuant to Section 5.2(b) to
eliminate Book-Tax Disparities.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor to such statute.
"Subordination Period" means that period beginning with the Commencement
Date and terminating on the last day of fiscal year 1989.
"Substituted Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 12.2 in place of and with all the
rights of a Limited Partner and who is shown as a Limited Partner on the books
and records of the Partnership.
"Terminating Capital Transaction" means any sale, condemnation, exchange,
abandonment or other disposition, whether by foreclosure or otherwise, of all or
substantially all of the then remaining assets of the Partnership and/or any
other transaction which will result in a dissolution of the Partnership.
"Transfer Agent" means a bank, trust company or other Person (including the
General Partner) appointed by the Partnership to act as transfer agent for
Units.
"Transfer Application" means an application and agreement for transfer of
Units in the form set forth on the back of a Certificate or in a form
substantially to the same effect in a separate instrument by which a transferee
(a) requests admission as a Substituted Limited Partner, (b) agrees to be bound
by the terms and conditions of, and executes, this Agreement, (c) represents
that he has authority to enter into this Agreement, (d) grants powers of
attorney to the General Partner and the Liquidator and (e) makes the consents
and waivers contained herein.
"Transferors" means Dynamic Industries, Inc., a Texas corporation, Economy
Oil Company, a Texas corporation, Gas-A-Way Distributors, Inc., a Texas
corporation, Gas-Go, Inc., a Louisiana corporation, Gas-N-Sav, Inc., a Texas
corporation, Hi-Lo Corporation, a Texas corporation, Hi-Lo Distributors, Inc., a
Texas corporation, Nu-Way Oil Company, a Texas corporation, Nu-Way Distributing
Company, a Texas corporation, Southway, Inc., a Texas corporation, State Gas &
Oil, Inc., a Texas corporation, Thrift Wholesale Company, a Texas corporation,
Thrift Distributors, Inc., a Texas corporation, Thrift-Way, Inc., a Texas
corporation, and Swifty Distributors, Inc., a Texas corporation.
"Transferors' Other Properties" means the property and equipment of the
Transferors which will be purchased by the Partnership using proceeds from the
Initial Offering.
"Underwriters" means the underwriting firms named in the Underwriting
Agreement that agree to purchase Units from the Partnership.
"Underwriting Agreement" means that agreement between the Partnership, the
Operating Partnership, and the Underwriters, among others, with respect to the
Initial Offering, as it may be amended or supplemented from time to time.
"Unit" means a Partnership Interest of a Limited Partner or Assignee in the
Partnership representing such fractional part of the Partnership Interests of
all the Limited Partners and Assignees as shall be determined by the General
Partner pursuant to Sections 4.2 and 4.3 in connection with the issuance of
Partnership Interests to the Initial Limited Partners and the making of Capital
Contributions by Additional Limited Partners; provided that each Unit at any
time outstanding shall represent the same fractional part of the Partnership
Interests of all Limited Partners and Assignees as each other Unit (unless any
class or series of Units issued pursuant to Section 4.3(a) shall have
designations, preferences or special rights such that a Unit of such class or
series shall represent a greater or lesser part of the Partnership Interests of
all Limited Partners and Assignees than a Unit of any other class or series of
Units, in which event the Partnership Interest represented by a Unit of such
class or series shall be determined in accordance with such designations,
preferences and special rights as are fixed by the General Partner pursuant to
Section 4.3(a) with respect to such class or series of Units).
"Unit Price" of a Unit of any class means, as of any date of determination,
(a) if the Units of such class are listed or admitted to trading on one or more
National Securities Exchanges, the average of the last reported sale prices per
Unit regular way or, in case no such reported sale has taken place on any such
day, the average of the last reported bid and asked prices per Unit regular way,
in either case on the principal National Securities Exchange on which the Units
of such class are listed or admitted to trading, for the four trading days
immediately preceding the date of determination, (b) if the Units of such class
are not listed or admitted to trading on a National Securities Exchange but are
quoted by NASDAQ, the average of the closing bid prices per Unit of such class
for the four trading days immediately preceding such date of determination, as
furnished by the National Quotation Bureau Incorporated or such other nationally
recognized quotation service as may be selected by the General Partner for such
purpose if said Bureau is not at the time furnishing quotations, or (c) if the
Units of such class are not listed for trading on a National Securities Exchange
or quoted by NASDAQ, an amount equal to the fair market value of a Unit of such
class as of such date of determination, as determined by the General Partner
using any reasonable method of valuation.
"Unrealized Gain" attributable to a Partnership property means, as of any
date of determination, the excess, if any, of the fair market value of such
property (as determined under Section 4.5(d)) as of such date of determination
over the Carrying Value of such property as of such date of determination (prior
to any adjustment to be made pursuant to Section 4.5(d) as of such date).
"Unrealized Loss" attributable to a Partnership property means, as of any
date of determination, the excess, if any, of the Carrying Value of such
property as of such date of determination (prior to any adjustment to be made
pursuant to Section 4.5(d) as of such date) over the fair market value of such
property (as determined under Section 4.5(d)) as of such date of determination.
ARTICLE III
PURPOSE
The purpose and business of the Partnership shall be any business which may
lawfully be conducted by a limited partnership organized pursuant to the
Delaware Act, including, without limitation, the acquisition, ownership,
leasing, management, operation and disposition of the Original Properties and
the Transferors'
Other Properties; the acquisition, management, operation and disposition of
convenience stores, truck stops and self-service gasoline facilities and
equipment in the United States and, if deemed advisable by the General Partner
in its sole discretion, in foreign countries; the carrying on of any business
relating thereto, incidental thereto or arising therefrom; the entering into of
any partnership, joint venture or other similar arrangement to engage in any of
the foregoing or the ownership of interests in any entity engaged in any of the
foregoing, including the ownership of a limited partner's interest in the
Operating Partnership; and anything incidental or necessary to the foregoing.
Any of the foregoing activities may be conducted directly by the Partnership or
indirectly through the Operating Partnership, and any properties, assets or
liabilities related to such activities may be acquired and held by the Operating
Partnership
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1 General Partner.
(a) On the Commencement Date, the General Partner (or the Transferors on
its behalf) shall contribute to the Partnership cash and cash equivalents in an
amount, or property or other consideration in such form as may be permitted by
the Delaware Act, including an interest in the Original Properties described in
the Conveyance Agreement, having a Net Agreed Value such that its Capital
Contribution then being made as General Partner shall be equal to 1% of the
total Capital Contributions (based on the amounts credited to Capital Accounts
on account thereof) to the Partnership then being made pursuant to Sections 4.1
and 4.2. At the time of such Capital Contribution, the Partnership may assume
(or take the contributed properties subject to) certain liabilities and shall
assume certain related obligations in accordance with the Conveyance Agreement.
(b) (i) On or following the Commencement Date, whenever a Partner makes a
Capital Contribution to the Partnership pursuant to Section 4.3, the General
Partner shall contribute to the Partnership cash in an amount, or property
having a Net Agreed Value, such that its Capital Contribution as General Partner
shall be equal to 1% of the total Capital Contributions (based on the amounts
credited to Capital Accounts on account thereof) to the Partnership, including
those then being made pursuant to this Section 4.1 or Section 4.3, as the case
may be.
(ii) After the Subordination Period (or, if later, after the fiscal
year with respect to which any Deficiency is eliminated by cash distributions),
the General Partner may, but shall not be obligated to, make voluntary
contributions to the Partnership of cash and cash equivalents in an amount, or
property having a Net Agreed Value, in an amount equal to the product of (a) the
amount by which the Capital Account per Class B Unit as of the last day of the
Subordination Period (or, if later, the last day of the fiscal year with respect
to which any Deficiency is eliminated by cash distributions) exceeds the Capital
Account per Class A Unit as of the last day of the Subordination Period (or, if
later, the last day of the fiscal year with respect to which any Deficiency is
eliminated by cash distributions), multiplied by (b) the number of Outstanding
Class B Units.
(c) Any Capital Contribution required of the General Partner pursuant to
Section 4.1(b) may be accomplished by the redesignation of Capital Contributions
with respect to Units owned by the General Partner as Capital Contributions with
respect to its Partnership Interest as General Partner, whereupon the General
Partner shall be deemed to have surrendered to the Partnership those Units, and
shall deliver to the Transfer Agent for cancellation those Units, the Capital
Contributions with respect to which have thus been redesignated. For purposes of
any such redesignation, the Net Agreed Value of Capital Contributions with
respect to Units shall, for each Unit being surrendered, be (i) the cash
consideration per Unit that is received by the Partnership upon the issuance of
any Units solely in exchange for cash in the transaction that gives rise to the
requirement for the additional Capital Contribution of the General Partner, or
(ii) the Unit Price per Unit as of a date reasonably related to such
redesignation in the event Units are issued at least partially in exchange for
consideration other than cash in the transaction that gives rise to the
requirement for the additional Capital Contribution of the General Partner.
(d) In connection with making any required general partner's capital
contributions to the Operating Partnership pursuant to Article IV of the
Operating Partnership Agreement, the General Partner may tender to the
Partnership any Units it owns in exchange for a portion of the Partnership's 99%
interest in the Operating Partnership. In such event, the General Partner shall
be deemed to have surrendered any such Units to the Partnership for
cancellation. Upon the tender of such Units, the Partnership shall distribute to
the General Partner 99% of an interest as a limited partner in the Operating
Partnership that bears the same ratio to the entire limited partner interest in
the Operating Partnership as the number of such tendered Units bears to the
aggregate of all Outstanding Units, as determined immediately prior to the date
of tender.
4.2 Limited Partners.
(a) The Transferors shall contribute to the Partnership cash and cash
equivalents in an amount, or property or other consideration in such form as may
be permitted by the Delaware Act (including specifically the interests in the
Original Properties as described in the Conveyance Agreement), in exchange for
that number of Class B Units, all as set forth in the Conveyance Agreement. In
the event and to the extent that the overallotment option as described in the
Registration Statement is exercised by the Underwriters, the Units issued by the
Partnership upon such exercise shall be Class A Units, which shall be purchased
from the Partnership at the Initial
Class A Unit Price times the number of Units purchased upon exercise, all
pursuant to the Underwriting Agreement. In the event and to the extent that the
overallotment option is not so exercised or expires by its terms, additional
Class B Units shall be issued to the Transferors, which shall be subject to the
same terms and conditions of this Agreement and to the same extent as the Class
B Units issued above pursuant to this Section 4.2(a). At the time of such
Capital Contribution, the Partnership shall assume (or take the Original
Properties subject to) certain related obligations all in accordance with the
Conveyance Agreement.
(b) The Underwriters (i) shall contribute to the Partnership in cash on
the Commencement Date the amount of the Initial Class A Unit Price multiplied by
the number of Class A Units specified in the Underwriting Agreement to be
purchased from the Partnership by the Underwriters at the "Closing Date," as
such term is used in the Underwriting Agreement, and (ii) on or following such
Commencement Date (but not later than the first Business Day following the
expiration date of the overallotment option granted to the Underwriters as
described in the Underwriting Agreement) may contribute to the Partnership in
cash, pursuant to exercise of the overallotment option, an amount of the Initial
Class A Unit Price multiplied by a number of Class A Units equal in an amount up
to 15% of the number of Class A Units purchased from the Partnership by the
Underwriters under (i) above.
(c) After the Subordination Period (or, if later, after the fiscal year
with respect to which any Deficiency is eliminated by cash distributions), the
holders of Class B Units may, but shall not be obligated to, make voluntary
contributions to the Partnership of cash and cash equivalents in an amount, or
property having a Net Agreed Value, equal to the product of (i) the amount, if
any, by which the Capital Account per Class A Unit as of the last day of the
Subordination Period (or, if later, the last day of the fiscal year with respect
to which any Deficiency is eliminated by cash distributions) exceeds the Capital
Account per Class B Unit as of the last day of the Subordination Period (or, if
later, the last day of the fiscal year with respect to which any Deficiency is
eliminated by cash distributions), multiplied by (ii) the number of Outstanding
Class B Units.
(d) On and after the expiration of the Subordination Period (or, if later,
after any fiscal year with respect to which any Deficiency is eliminated by cash
distributions), Class B Units shall be convertible into Class A Units; provided,
however, that such conversion shall not occur unless and until either (i) the
General Partner shall have made the voluntary contribution permitted by Section
4.l(b)(ii) and the Partnership shall have made the special distribution with
respect to Class B Units permitted by Section 5.3(f) or (ii) the holders of the
Class B Units shall have made the voluntary contribution permitted by Section
4.2(c).
4.3 Additional Issuances of Securities; Additional Issuance of Units.
(a) (i) The Partnership shall have such classes of Units as the General
Partner may establish pursuant to this Section 4.3. As of the Closing Date,
there shall be two classes of Units: the Class A Units and the Class B Units.
The General Partner, acting on behalf of the Partnership and subject to the
terms and conditions of this Agreement, may admit other classes of Limited
Partners, issue Class A Units and Class B Units and such other class or classes
of Units as may
be established. The Class A Units and the Class B Units shall be identical
except that (A) distributions with respect to the Class B Units shall be subject
to subordination to the Class A Units during the Subordination Period (or, if
later, during any fiscal year for which any Deficiency exists as of the first
day thereof) pursuant to Section 5.3(c), (B) allocations with respect to the
Class B Units shall be made pursuant to Section 5.2 and (C) upon the expiration
of the Subordination Period (or, if later, the expiration of the fiscal year
with respect to which any Deficiency is eliminated by cash distributions) the
Class B Units shall be convertible into Class A Units in accordance with, but
subject to the terms and conditions of, Section 11.7.
(ii) Subject to Section 4.3(b) and 6.1(c) below, in order to raise
additional capital or to acquire assets, to redeem or retire Partnership debt,
to comply with any provision of the Operating Partnership Agreement or for any
other Partnership purposes, the General Partner is authorized to cause the
Partnership to issue Units in addition to those issued pursuant to Section 4.2
at any time or from time to time to the General Partner, to Limited Partners or
to other Persons and to admit them to the Partnership as Additional Limited
Partners, all without any consent or approval of the Limited Partners or any
percentage thereof (other than in the situation described in the last sentence
of Section 4.3(b)). Subject to Section 4.3(b), the General Partner shall have
sole and complete discretion in determining the consideration and terms and
conditions with respect to any future issuance of Units. In addition, the
General Partner shall have sole and complete discretion to cause the Partnership
to issue Units from time to time in one or more classes, or one or more series
of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties, including
rights, powers and duties senior to existing classes and series of Units, as
shall be fixed by the General Partner in the exercise of its sole and complete
discretion, including, without limitation, (i) the allocation of items of
Partnership income, gain, loss, deduction and credit to each such class or
series of Units; (ii) the right of each such class or series of Units to share
in Partnership distributions; (iii) the rights of each such class or series of
Units upon dissolution and liquidation of the Partnership; (iv) the price at
which and the terms and conditions, if any, upon which each such class or series
of Units may be redeemed by the Partnership; (v) the rate at which and the terms
and conditions upon which each such class or series of Units may be converted
into another class or series of Units of the Partnership, if any such class or
series is convertible into other securities of the Partnership; (vi) the rate at
which and the terms and conditions upon which such class or series of Units may
be exchanged, at the option of the Partnership or at the option of the holder of
Units of such class or series, for any other securities (including those of the
Partnership) if any such class or series of Units are issued having the
privilege of being so exchangeable expressly pursuant to the terms of such class
or series; (vii) the terms and conditions upon which each such class or series
of Units will be issued and all other matters relating to the assignment
thereof; and (viii) the right of each such class or series of Units to vote on
Partnership matters, including matters relating to the relative rights,
preferences and privileges of each such class or series. Upon or prior to the
issuance of any class or series of Units which shall not be identical to the
Class A Units or Class B Units issued on the Commencement Date to the Initial
Limited Partners, the General Partner, without the consent at the time of any
Limited Partner or Assignee, each Limited Partner and Assignee hereby consenting
to any and each such amendment, may amend any provision of this Agreement and,
exercising the power of attorney granted pursuant to Section 1.4 (a)(i)(E), may
execute, swear to, acknowledge, deliver, file and
record such documents as the General Partner may in its sole discretion
determine to be necessary or appropriate in connection therewith in order to
reflect the authorization and issuance of each such class or series of Units and
the relative rights and preferences as to the matters set forth in the preceding
sentence. The General Partner is also authorized to cause the Partnership to
issue any other type of security, including, without limitation, secured and
unsecured debt obligations of the Partnership, debt obligations of the
Partnership convertible into any class or series of Units that may be issued by
the Partnership or exchangeable for such other security or securities (of the
Partnership or otherwise), or options, rights, warrants or appreciation rights
relating to any class or series of Units, any debt obligations or any
combination of any of the foregoing, from time to time to the General Partner or
to Limited Partners or other Persons on terms and conditions established in the
sole and complete discretion of the General Partner. Any such issuance of other
types of securities may be made without the approval at the time of any Limited
Partner or Assignee, each Limited Partner and Assignee hereby approving of any
and each such issuance, and upon or prior to the issuance of any such other type
of security, the General Partner, without the approval at the time of any
Limited Partner or Assignee, each Limited Partner and Assignee hereby approving
of any and each such amendment, may amend any provision of this Agreement and,
exercising the power of attorney granted pursuant to Section l.4(a)(i)(E), may
execute, swear to, acknowledge, deliver, file and record such documents as the
General Partner may in its sole discretion determine to be necessary or
appropriate in connection therewith in order to reflect the authorization and
issuance of each such other type of security. The General Partner shall do all
things it deems to be appropriate or necessary to comply with the Delaware Act
and is authorized and directed to do all things it deems to be necessary or
advisable in connection with any such future issuance, including compliance with
any statute, rule, regulation or guideline of any federal, state or other
governmental agency or any securities exchange on which the Units or other such
security or securities are listed for trading.
(b) The General Partner or any Affiliate thereof may, but is not obligated
to, make Capital Contributions to the Partnership in the form of cash or other
property in exchange for Units; provided, however, that during the Subordination
Period (or, if later, during any fiscal year for which any Deficiency remains
unpaid) the Partnership shall not issue to any Person Units of any class to
which the Class A Units are expressly subordinated as to distributions. The
foregoing shall not prohibit a pro rata distribution to all holders of Class A
Units of Units to which the Class A Units are expressly subordinated as to
distributions. The number of Units issued to any such General Partner or
Affiliate in exchange for any Capital Contribution shall not exceed the Net
Agreed Value of the Contributed Property or the amount of cash, as the case may
be, divided by (i) the Unit Price of a Unit of such class as of the date of such
issuance, or (ii) in the event the Capital Contribution is being made pursuant
to an exchange offer to other Persons of Units for properties, by the value
assigned to a Unit in such exchange offer for purposes of determining the number
of Units to be issued in such exchange offer. The Net Agreed Value of any
obligation of the Partnership held by the General Partner or an Affiliate which
is contributed pursuant to this Section 4.3(b) in exchange for Units shall be
the unpaid principal amount thereof plus accrued interest to the date of
contribution. Any issuance of Units to the General Partner or any Affiliate
thereof on terms that do not satisfy the standards set forth in this Section
4.3(b) shall be made only if such issuance is approved by the affirmative vote
or approval of more than
50% of the Percentage Interests of the Limited Partners, exclusive of any such
Percentage Interests held by the General Partner or any Affiliate thereof.
(c) There shall be no limitation on the total number of Units, or total
number of Units of any class or series, that may be issued by the Partnership.
4.4 No Preemptive Rights. Except as may be provided pursuant to Section
4.3 and Article XVII hereof, no Partner shall have any preemptive or
preferential right, including any such right with respect to (a) additional
Capital Contributions; (b) issuance or sale of Units of any class or series,
whether unissued, held in the treasury or thereafter created; (c) issuance of
any obligations, evidences of indebtedness or other securities of the
Partnership convertible into or exchangeable for, or carrying or accompanied by
any rights to receive, purchase or subscribe to, any such unissued Units or
Units held in treasury; (d) issuance of any right of, subscription to or right
to receive, or any warrant or option for the purchase of any of the foregoing
securities; or (e) issuance or sale of any other securities that may be issued
or sold by the Partnership.
4.5 Capital Accounts.
(a) The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the rules of Treasury Regulation Section l.704-
l(b)(2)(iv). Such Capital Account shall be increased by (i) the cash amount or
Net Agreed Value of all Capital Contributions made by such Partner to the
Partnership pursuant to this Agreement and (ii) all items of Partnership income
and gain (including income and gain exempt from tax) computed in accordance with
Section 4.5(b) and allocated to such Partner pursuant to Section 5.1 and
decreased by (iii) the cash amount or Net Agreed Value of all actual and deemed
distributions of cash or property made to such Partner pursuant to this
Agreement and (iv) all items of Partnership deduction and loss computed in
accordance with Section 4.5(b) and allocated to such Partner pursuant to Section
5.1.
(b) For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes (including any method of depreciation, cost recovery or amortization
used for this purpose); provided that:
(i) Solely for purposes of the application of the provisions hereof,
the Partnership shall be treated as owning directly its proportionate share (as
determined by the General Partner based upon the provisions of the Affiliated
Partnership Agreements) of all property owned by all Affiliated Partnerships.
(ii) In accordance with the requirements of and consistent with
Treasury Regulation Section 1.704-(b)(2)(iv)(g), any deductions for
depreciation, cost recovery or amortization attributable to a Contributed
Property shall be determined as if the adjusted basis of such property on the
date it was acquired by the Partnership was equal to the Agreed Value of such
property. Upon an adjustment pursuant to Section 4.5(d)(i) to the Carrying Value
of any
Partnership property subject to depreciation, cost recovery or amortization, any
further deductions for such depreciation, cost recovery or amortization
attributable to such property shall be determined as if the adjusted basis of
such property was equal to the Carrying Value of such property immediately
following such adjustment, subject to the requirements of Treasury Regulation
Section 1.704-1 (b)(2)(iv)(g).
(iii) Any income, gain or loss attributable to the taxable disposition
of any property shall be determined by the Partnership as if the adjusted basis
of such property as of such date of disposition was equal in amount to the
Partnership's Carrying Value with respect to such property as of such date.
(iv) If the Partnership's adjusted basis in a depreciable or cost
recovery property is reduced for federal income tax purposes pursuant to Section
48(q)(l) or 48(q)(3) of the Code, the amount of such reduction shall, solely for
purposes hereof, be deemed to be an additional depreciation or cost recovery
deduction in the year such property is placed in service and shall be allocated
among the Partners pursuant to Section 5.1. Any restoration of such basis
pursuant to Section 48(q)(2) of the Code shall be allocated in the same manner
to the Partners to whom such deemed deduction was allocated.
(v) All fees and other expenses incurred by the Partnership to
promote the sale of (or to sell) a Partnership Interest that can neither be
deducted nor amortized under Section 709 of the Code shall, for purposes or
Capital Account maintenance, be treated as an item of deduction and shall be
allocated among the Partners pursuant to Section 5.1.
(vi) The computation of all items of income, gain, loss and deduction
shall be made without regard to any election under Section 754 of the Code by
the Partnership and, as to those items described in Section 705(a)(l)(B) or
Section 705(a)(2)(B) of the Code, without regard to the fact that such items are
not includable in gross income or are neither currently deductible nor
capitalizable for federal income tax purposes.
(vii) Any reference in this Agreement requiring the determination of
Capital Account balances as of the last day of a fiscal year shall be such
balance as determined after allocating all items of income, gain, loss and
deduction for that year.
(c) Generally, a transferee of a Partnership Interest will succeed to the
Capital Account relating to the Partnership Interest transferred. However, if
the transfer causes a termination of the Partnership under Section 708(b)(l)(B)
of the Code, the Partnership properties shall be deemed to have been distributed
in liquidation of the Partnership to the Partners (including the transferee of a
Partnership Interest) and deemed recontributed by such Partners and transferees
in reconstitution of the Partnership. In such event, the Carrying Values of the
Partnership properties shall be adjusted immediately prior to such deemed
distribution pursuant to Section 4.5(d)(ii) (and such adjusted Carrying Values
shall constitute the Agreed Values of such properties upon such deemed
contribution to the reconstituted Partnership). The Capital Accounts of such
reconstituted Partnership shall be maintained in accordance with the principles
of this Section 4.5.
(d) (i) Consistent with the provisions of Treasury Regulation Section
l.704-l(b)(2)(iv)(f), upon an issuance of additional Units for cash or
Contributed Property pursuant to Section 4.3, the Capital Accounts of all
Partners and the Carrying Values of all Partnership properties shall,
immediately prior to such issuance, be adjusted (consistent with the provisions
hereof) upwards or downwards to reflect any Unrealized Gain or Unrealized Loss
attributable to each Partnership property (as if such Unrealized Gain or
Unrealized Loss had been recognized in an actual Terminating Capital
Transaction, immediately prior to such issuance, and had been allocated to the
Partners, at such time, pursuant to Section 5.1). In determining such Unrealized
Gain or Unrealized Loss, the aggregate fair market value of Partnership
properties as of any date of determination shall be equal to the Prescribed
Asset Value of all classes of Units Outstanding as of such date. The Carrying
Values of the respective Partnership properties shall be adjusted according to
their relative fair market values, as determined by the General Partner using
such method as it deems appropriate.
(ii) In addition, in accordance with Treasury Regulation Section l.704-
l(b)(2)(iv)(e), immediately prior to the actual or deemed distribution of any
Partnership property in those situations listed in the immediately following
sentence, the Capital Accounts of all Partners and the Carrying Values of all
Partnership properties shall be adjusted (consistent with the provisions hereof)
upwards or downwards to reflect any Unrealized Gain or Unrealized Loss
attributable to each Partnership property (as if such Unrealized Gain or
Unrealized Loss had been recognized in an actual Terminating Capital
Transaction, immediately prior to such distribution, and had been allocated to
the Partners, at such time, pursuant to Section 5.1). In determining such
Unrealized Gain or Unrealized Loss, the aggregate fair market value of
Partnership properties as of any date of determination shall (A) in the case of
a deemed distribution occurring as a result of a termination of the Partnership
pursuant to Section 708 of the Code, be determined in the same manner provided
in Section 4.5(d)(i), or (B) in the case of a liquidating distribution pursuant
to Section 14.3 or 14.4, be determined by the General Partner using such
reasonable methods of valuation as it may adopt.
4.6 Interest. No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
4.7 No Withdrawal. A Partner shall not be entitled to withdraw any part of
his Capital Contribution or his Capital Account or to receive any distribution
from the Partnership, except as provided in Section 5.3 and Articles XIII and
XIV.
4.8 Loans From Partners. Loans by a Partner to the Partnership shall not
be considered Capital Contributions. If any Partner or Assignee shall advances
funds to the Partnership in excess of the amounts required hereunder to be
contributed by it to the capital of the Partnership, the making of such advances
shall not result in any increase in the amount of the Capital Account of such
Partner or Assignee. The amounts of any such advances shall be a debt of the
Partnership to such Partner or Assignee and shall be payable or collectible only
out of the Partnership assets in accordance with the terms and conditions upon
which such advances are made.
4.9 No Fractional Units. No fractional Units shall be issued by the
Partnership.
4.10 Splits and Combinations.
(a) The General Partner may make a distribution in Units to all Record
Holders of Class A Units or Class B Units or may effect a subdivision or
combination of Class A Units or Class B Units, but in each case only on a pro
rata basis so that, after such distribution, subdivision or combination, each
Class A Limited Partner and Class B Limited Partner and each Assignee of a Class
A Unit or Class B Unit shall, subject to Section 4.10(d), have the same
Percentage Interest in the Partnership as before such distribution, subdivision
or combination.
(b) Whenever such a distribution, subdivision or combination is declared,
the General Partner shall select a Record Date as of which the distribution,
subdivision or combination shall be effective and shall send notice of the
distribution, subdivision or combination at least 20 days prior to such Record
Date to each Record Holder as of that date which is ten days prior to the date
of such notice. The General Partner also may cause a firm of independent public
accountants selected by it to calculate the number of Units of the class to be
held by each Record Holder after giving effect to such distribution, subdivision
or combination. The General Partner shall be entitled to rely on any certificate
provided by such firm as conclusive evidence of the correctness of such a
calculation.
(c) Promptly following any such distribution, subdivision or combination,
the General Partner may cause Certificates to be issued to the Record Holders of
Units as of the applicable Record Date representing the new number of Units held
by such Record Holder, or the General Partner may adopt such other procedures as
it may deem appropriate to reflect such distribution, subdivision or
combination; provided, however, that in the event any such distribution,
subdivision or combination results in a smaller total number of Units
Outstanding, the General Partner shall require, as a condition to the delivery
to a Record Holder or such new Certificate, the surrender of any Certificate
held by such Record Holder immediately prior to such Record Date.
(d) The Partnership shall not be required to issue fractional Units upon
any distribution, subdivision or combination of Units. In the event any
distribution, subdivision, or combination of Units would result in the issuance
of fractional Units but for the provisions of Section 4.9 and this Section
4.10(d), each fractional Unit shall be rounded to the nearest whole Unit.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.1 Allocations for Capital Account Purposes.
(a) For purposes of maintaining the Capital Accounts and in determining
the rights of the Partners among themselves, except as otherwise provided in
this Section 5.1, each item of
income, gain, loss and deduction (computed in accordance with Section 4.5(b))
shall be allocated among the Partners as follows:
(i) Operating Income for a fiscal year within the Subordination
Period or for a fiscal year in which a Deficiency exists shall be allocated
among the Partners in the following amounts and proportions:
(A) First, Operating Income in an amount up to the aggregate
amount of cash distributed pursuant to Sections 5.3(c)(i) and (ii) and
5.3(d)(i)(A) to the Partners with respect to the quarterly periods within such
fiscal year shall be allocated among the General Partner and holders of Class A
Units and Class B Units in the same proportion that the General Partner and
holders of such classes shared in such cash distributions, with the Operating
Income allocated among the Limited Partners of a particular class in accordance
with their respective Class Percentage Interests; and
(B) Any remaining Operating Income shall be allocated among the
Partners in accordance with their respective Percentage Interests.
(ii) Operating Loss and all items of income, gain, loss and deduction
from a Terminating Capital Transaction recognized during a fiscal year of the
Partnership within the Subordination Period (or, if later, within a fiscal year
in which a Deficiency exists) shall be allocated among the Partners in
accordance with their respective Percentage Interests.
(iii) All items of income, gain, loss and deduction from operations or
from a Terminating Capital Transaction with respect to a fiscal year beginning
after the Subordination Period (or, if later, after the fiscal year in which the
Deficiency, if any, is eliminated) shall be allocated among the Partners in
accordance with their respective Percentage Interests.
(b) Notwithstanding any other provision herein, no Partner shall be
allocated any loss or deduction which will cause a deficit balance in such
Partner's Capital Account (in excess of any dollar amount of such deficit
balance that such Partner is obligated to restore within the meaning of Treasury
Regulation Section l.704-l(b)(2)(ii)(c) as of the end of the Partnership's
taxable year to which such allocation relates) to exceed such Partner's share of
the Partnership's Minimum Gain. Any items of loss and deduction not allocable to
a Partner by reason of this provision shall be allocated in accordance with the
Partners' respective interests determined pursuant to Treasury Regulation
Section 1.704-l(b)(3). In the event such allocations of loss or deductions are
made to the General Partner under this Section 5.1(b), then the General Partner
shall receive a priority allocation of the Partnership's income or gain in the
current or succeeding year in an amount equal to the total of such deductions or
loss. For purposes of this Section 5.1(b), the Capital Account of each Partner
shall be deemed to be reduced (i) for any distributions that, as of the end of
such year, reasonably are expected to be made to such Partner to the extent they
exceed offsetting increases to such Partner's Capital Account that reasonably
are expected to occur during (or prior to) the Partnership taxable years in
which such distributions reasonably are expected to be made and (ii) for the
adjustments and allocations of loss and deduction described in Treasury
Regulation Section 1.704-l(b)(2)(ii)(d). A Partner who
unexpectedly receives an adjustment, allocation or distribution described in
Treasury Regulation l.704-1(b)(2)(ii)(d), which causes or increases a deficit
balance in such Partner's Capital Account (in excess of any dollar amount of
such deficit balance that such Partner is obligated to restore within the
meaning of Treasury Regulation Section l.704-l(b)(2)(ii)(c) as of the end of the
Partnership's taxable year to which such allocation relates) to exceed such
Partner's share of the Partnership's Minimum Gain, shall be allocated items of
income and gain in any amount and manner sufficient to eliminate such excess
deficit balance as rapidly as possible. Furthermore, if there is a net decrease
in the Partnership's Minimum Gain during a Partnership taxable year, each
Partner with a deficit Capital Account balance at the end of such year
(excluding from such Partner's deficit Capital Account balance any amount that
such Partner is obligated to restore within the meaning of Treasury Regulation
Section 1.704-1(b)(2)(ii)(c)), in excess of such Partner's share of the
Partnership's Minimum Gain at the end of such year, shall be allocated, before
any other allocation is made of Partnership items for such year, items of income
and gain for such year (and, if necessary, subsequent years) in an amount and in
the proportions needed to eliminate such deficits as quickly as possible.
(c) If, and to the extent that, any Partner is deemed to recognize income
as a result of any transaction between such Partner and the Partnership pursuant
to Sections 1272-1274, Section 7872, Section 483 or Section 482 of the Code, or
any similar provision now or hereafter in effect, any corresponding resulting
loss or deduction of the Partnership shall be allocated to the Partner who was
charged with such income.
(d) To preserve uniformity of Units, the General Partner shall have sole
discretion in conjunction with Section 5.2(h)(ii) to make special allocations of
income or deduction. The General Partner may make such allocations only if such
allocations would not have a material adverse effect on the Limited Partners and
if they are consistent with, and supportable under, the principles of Section
704 of the Code.
(e) An allocation to a Partner of Operating Income or Operating Loss shall
be treated as an allocation to such Partner of the same share of each item of
income, gain, loss and deduction that is taken into account in computing such
Operating Income or Operating Loss.
5.2 Allocations for Tax Purposes.
(a) For federal income tax purposes, except as otherwise provided in this
Section 5.2, each item of income, gain, loss, deduction and credit of the
Partnership shall be allocated among the Partners in the same manner as provided
in Section 5.1(a). An allocation to a Partner of Operating Income or Operating
Loss shall be treated as an allocation to such Partner of the same share of each
item of income, gain, loss and deduction that is taken into account in computing
such Operating Income or Operating Loss.
(b) In the case of a Contributed Property or Adjusted Property, items of
income, gain, loss, depreciation and cost recovery deductions attributable
thereto shall be allocated for federal income tax purposes among the Partners as
follows:
(i) In the case of a Contributed Property, such items shall be
allocated among the Partners in a manner that takes into account the variation
between the Agreed Value of such property and its adjusted basis at the time of
contribution in attempting to eliminate Book-Tax Disparities. Except as
otherwise provided in Section 5.2(c) and 5.2(e) below, any item of Residual Gain
or Residual Loss attributable to a Contributed Property shall be allocated among
the Partners in accordance with Section 5.2(a).
(ii) In the case of an Adjusted Property, such items shall (A) first,
be allocated among the Partners in a manner consistent with the principles of
Section 704(c) of the Code to take into account the Unrealized Gain or
Unrealized Loss attributable to such property and the allocations thereof
pursuant to Section 4.5(d)(i) in attempting to eliminate Book-Tax Disparities,
and (B) second, in the event such property was originally a Contributed
Property, be allocated among the Partners in a manner consistent with the first
sentence of paragraph (b)(i) above. Except as otherwise provided in Sections
5.2(c) and 5.2(e) below, any items of Residual Gain or Residual Loss
attributable to an Adjusted Property shall be allocated among the Partners in
accordance with Section 5.2(a).
(iii) In the case of all other properties, gain, loss, depreciation
and cost recovery deductions attributable to such property shall be allocated
among the Partners in accordance with Section 5.2(a).
(iv) Any items of income, gain, loss or deduction otherwise allocable
under the first sentence of Section 5.2(b)(i) or 5.2(b)(ii) shall be subject to
allocation by the General Partner in a manner designed to eliminate, to the
maximum extent possible, Book-Tax Disparities in a Contributed Property or
Adjusted Property otherwise resulting from the application of the ceiling
limitation (under Section 704(c) of the Code or Section 704(c) principles) to
the allocations provided under Sections 5.2(b)(i) or 5.2(b)(ii).
(c) If any Partner unexpectedly receives any adjustments, allocations or
distributions described in Treasury Regulation Section l.704-l(b)(2)(ii)(d),
items of Partnership income and gain shall be specially allocated to such
Partner in an amount and manner consistent with the allocations of income and
gain pursuant to Section 5.1(b).
(d) If, and to the extent that, any Partner is deemed to recognize income
as a result of any transaction between such Partner and the Partnership pursuant
to Sections 1272-1274, Section 7872, Section 483 or Section 482 of the Code, or
any similar provision now or hereafter in effect, corresponding items of
Partnership deduction shall be allocated to such Partner in an amount and manner
consistent with the allocation of loss or deduction pursuant to Section 5.1(c).
(e) If any Partner's Capital Account has a deficit balance as described in
Section 5.1(b), items of income and gain of the Partnership shall be allocated
to such Partner in an amount and manner consistent with the allocation of income
and gain pursuant to Section 5.1(b).
(f) To the extent of any Recapture Income resulting from the sale or other
taxable disposition of Partnership assets, the amount of any gain from such
disposition allocated to (or
recognized by) a Partner (or its successor in interest) for federal income tax
purposes pursuant to the above provisions shall be deemed to be Recapture Income
to the extent such Partner has been allocated or has claimed any deduction
directly or indirectly giving rise to the treatment of such gain as Recapture
Income.
(g) All items of income, gain, loss, deduction, credit and basis
allocation recognized by the Partnership for federal income tax purposes and
allocated to the Partners in accordance with the provisions hereof shall be
determined without regard to any election under Section 754 of the Code made by
the Partnership; provided, however, such allocations, once made, shall be
adjusted as necessary or appropriate to take into account those adjustments
permitted by Sections 734 and 743 of the Code and, where appropriate, to provide
only Partners recognizing gain on Partnership distributions covered by Section
734 of the Code with the federal income tax benefits attributable to the
increased basis in Partnership property resulting from such election under
Section 754 of the Code.
(h) It is intended that the allocations prescribed in Sections 5.2(b)(i),
(b)(ii) and (b)(iv) constitute allocations for federal income tax purposes that
are consistent with Section 704 of the Code and comply with any limitations or
restrictions therein, to the extent reasonably possible without causing Units to
lack uniform characteristics for federal income tax purposes. If uniformity of
the Units cannot be preserved by application of Sections 5.2(b)(i), 5.2(b)(ii)
and 5.2(b)(iv), then the General Partner shall have sole discretion to (i) adopt
such conventions as it deems appropriate in determining the amount of
depreciation and cost recovery deductions; (ii) make special allocations of
income or deduction; and (iii) amend the provisions of this Agreement as
appropriate (a) to reflect the proposal or promulgation of Treasury Regulations
under Section 704(c) of the Code, or (b) otherwise to preserve the uniformity of
Units issued or sold from time to time; provided, however, that the General
Partner may adopt such conventions, make such allocations and amend this
Agreement as provided in this Section 5.2(h) only if they would not have a
material adverse effect on the Limited Partners and if such allocations are
consistent with, and supportable under, the principles of Section 704 of the
Code. If the General Partner determines, based on advice of counsel, that no
reasonable convention or other method is available to preserve uniformity of
Units pursuant to this Section 5.2(h) or the General Partner in its sole
discretion so elects, the Units will be separately identified as distinct
classes to reflect differences in tax consequences.
(i) Each item of Partnership income, gain, loss, deduction and credit
attributable to a transferred Partnership Interest shall, for federal income tax
purposes, be determined on an annual basis (or other basis, as required or
permitted by Section 706 of the Code) and shall be allocated to the Partners who
own Partnership Interests as of the close of business on the last day of the
fiscal month in which the transfer is recognized by the Partnership (the last
day of each fiscal month being determined by reference to the fiscal year of the
Partnership as described in Section 8.2); provided, however, that gain or loss
on a Capital Transaction shall be allocated to the Record Holders of the
Partnership Interests as of the close of business on the day of the fiscal month
upon which such Capital Transaction occurs. The General Partner may revise,
alter or otherwise modify such methods of determination and allocation as it
determines necessary, to the extent permitted by Section 706 of the Code and
Treasury Regulations or rulings promulgated
thereunder, and no such revision, alteration or modification shall be deemed to
effect an amendment to this Agreement that will require the consent of any
holder of a Partnership Interest.
(j) Solely for purposes of the interpretation and application of this
Article V, the Partnership shall be treated as owning its proportionate share of
all properties owned by the Operating Partnership.
5.3 Distributions.
(a) The General Partner may from time to time in its sole discretion cause
the Partnership to distribute cash, Units and other property to the Partners in
accordance with their Percentage Interests, subject to Sections 5.3(c), 5.3(d)
and 5.3(e); provided, however, that the proceeds from a Terminating Capital
Transaction shall be distributed solely in accordance with Article XIV, after
the allocation of any item of income, gain, loss or deduction with respect
thereto and concomitant adjustment in the Partners' Capital Accounts as a result
thereof. For all purposes of this Agreement except distributions with respect to
a Terminating Capital Transaction, any distributions made within 75 days after
the end of any fiscal year shall be deemed to have been distributed as of the
last day of such fiscal year.
(b) Any amounts paid pursuant to Section 6.5 shall not be deemed to be
distributions for purposes of this Agreement.
(c) For fiscal quarters during the Subordination Period, the Partnership
shall distribute cash in the following order of priority:
(i) First, all distributions of cash shall be made 1% to the General
Partner and 99% to the Record Holders of Class A Units in accordance with their
Class Percentage Interests until such distributions have been made with respect
to Class A Units in a cumulative amount equal to an average annual rate of $1.50
per Class A Unit from the Commencement Date;
(ii) Second, any remaining cash shall next be distributed 1% to the
General Partner and 99% to the Record Holders of Class B Units in accordance
with their Class Percentage Interest until such distributions have been made
with respect to Class B Units in a cumulative amount equal to an average annual
rate of $1.50 per Class B Unit; and
(iii) Third, any remaining cash shall be distributed among the
Partners in accordance with their Percentage Interests.
(d) After the Subordination Period, cash shall be distributed in the
following order of priority.
(i) If, during the Subordination Period, distributions with respect
to the Class A Units were less than a cumulative amount equal to the sum of the
following: (i) $3.00 per Class A Unit, plus (ii) $1.50 per Class A Unit divided
by a fraction, (A) the numerator of which is the
difference between 365 and the number of days between the Commencement Date and
December 29, 1987, and (B) the denominator of which is 365 (the amount by which
such distributions are less than such cumulative amount is referred to herein as
the "Deficiency"), distributions of cash shall be made (A) 1% to the General
Partner and 99% to the Record Holders of Class A Units in accordance with their
Class Percentage Interests until there has been distributed with respect to
Class A Units for quarters beginning after the Subordination Period an amount
equal to such Deficiency and (B) thereafter all distributions of cash shall be
allocated among the Partners in accordance with their respective Percentage
Interests.
(ii) If no Deficiency exists with respect to the Subordination
Period, cash shall be distributed among the Partners in accordance with their
respective Percentage Interests.
(e) Notwithstanding anything in Section 5.3(c) and (d) to the
contrary, if cash distributed with respect to Class A Units for any fiscal year
is less than the aggregate Maximum Tax Liability for Class A Units for that year
(the amount by which such aggregate distributions are less than the aggregate
Maximum Tax Liability is referred to herein as the "Deficit"), the Partnership
shall distribute cash (from any available source other than assets of or
borrowings by the General Partner) 1% to the General Partner and 99% to the
Record Holders of the Class A Units as of the close of business on the last
business day of the last fiscal quarter of the year for which the Deficit was
determined in accordance with their Class Percentage Interests in an amount at
least equal to the Deficit with respect to such fiscal year.
(f) Upon a contribution of capital by the General Partner pursuant to
Section 4.1 (b)(ii), the Partnership shall distribute the amount of such
contribution to the Class B Limited Partners pro rata and the Capital Accounts
of the Class B Limited Partners shall be adjusted accordingly.
(g) Upon a contribution of capital by the holders of Class B Units
pursuant to Section 4.2(c), the Partnership may, but shall not be obligated to,
distribute the amount of such cash contribution to the General Partner and the
Capital Account of the General Partner shall be adjusted accordingly.
ARTICLE VI
MANAGEMENT AND OPERATION OF BUSINESS
6.1. Management.
(a) The General Partner shall conduct, direct and exercise full control
over all activities of the Partnership. Except as otherwise expressly provided
in this Agreement, all management powers over the business and affairs of the
Partnership shall be exclusively vested in the General Partner, and no Limited
Partner shall have any right of control or management power over the business
and affairs of the Partnership. In addition to the powers now or hereafter
granted a general partner of a limited partnership under applicable law or which
are granted to
the General Partner under any other provisions of this Agreement, the General
Partner shall have full power and authority to do all things deemed necessary or
desirable by it to conduct the business of the Partnership, including, without
limitation, (i) the making of any expenditures, the borrowing of money, the
guaranteeing of indebtedness and other liabilities, the issuance of evidences of
indebtedness, and the incurring of any obligations it deems necessary for the
conduct of the activities of the Partnership, subject to Section 6.1(c); (ii)
the acquisition, disposition (subject to any prior approval which maybe required
by Section 16.1), mortgage, pledge, encumbrance, hypothecation or exchange of
any or all of the assets of the Partnership, the merger of the Partnership with
or into another entity (subject to any prior approval which may be required by
Section 16.1), and, in addition to the general powers granted herein, the
acquisition and disposition of shares, units or interests in any privately-held
or publicly-held entity, whether in the same or similar business as the
Partnership or, otherwise; (iii) the use of the assets of the Partnership
(including, without limitation, cash on hand) for any purpose and on any terms
it sees fit, including, without limitation, the financing of the conduct of the
operations of the Partnership, the lending of funds to other Persons and the
repayment of obligations of the Partnership; (iv) the negotiation and execution
on any terms deemed desirable in its sole discretion and the delivery and
performance of any contracts, conveyances or other instruments that it considers
useful or necessary to the conduct of the Partnership's operations or the
implementation of its powers under this Agreement; (v) the distribution of
Partnership cash; (vi) the selection and dismissal of employees and outside
attorneys, accountants, consultants and contractors and the determination of
their compensation and other terms of employment or hiring; (vii) the
maintenance of such insurance for the benefit of the Partnership and the
Partners as it deems necessary; (viii) the formation of any further limited or
general partnerships, joint ventures or other relationships that it deems
desirable (including, without limitation, the Operating Partnership); (ix) the
control of any matters affecting the rights and obligations of the Partnership,
including the conduct of litigation and the incurring of legal expense and the
settlement of claims and litigation; and (x) the purchase, sale or other
acquisition or disposition of Units, and cancellation of acquired Units, at such
times and on such terms as it deems to be in the best interests of the
Partnership and the Partners; (xi) the taking of any and all actions and the
exercise of all authority in connection with the Partnership's participation in
the Operating Partnership as limited partner therein (including, without
limitation, the contribution to the Operating Partnership of the Partnership's
assets and properties and the loan of Partnership funds to the Operating
Partnership and any Affiliate thereof); and (xii) the entering into of leases
for real or personal property or agreements, whether in connection with sale and
lease-back transactions, or otherwise.
(b) Each of the Partners hereby approves, ratifies and confirms the
execution, delivery and performance of the Underwriting Agreement, the
Conveyance Agreement and the Operating Partnership Agreement and agrees that the
General Partner is authorized to execute, deliver and perform the other
agreements, acts, transactions and matters described in the Registration
Statement on behalf of the Partnership without any further act, approval or vote
of the Partners of the Partnership, notwithstanding any other provision of this
Agreement or the Operating Partnership Agreement, the Delaware Act or any
applicable law, rule or regulation. The participation by the General Partner in
any agreement authorized or permitted under this Agreement shall not constitute
a breach by the General Partner of any duty that the General
Partner may owe the Partnership or the Limited Partners under this Agreement or
under applicable law.
(c) Distributions pursuant to Section 5.3 may be funded from any source
except that the Partnership shall not, for the purpose of making distributions
pursuant to Sections 5.3(c) or 5.3 (d)(i)(A), (i) sell any properties otherwise
than in the ordinary course of business (ii) incur indebtedness for borrowed
money or (iii) issue additional Units. The restrictions on borrowing under this
Section 6.1(c) shall not prevent borrowings for any other purposes permitted by
the terms of this Agreement, regardless of whether such borrowings occur on or
about the same time as any declaration or payment of distributions. As a result
of any seasonal fluctuations of the Partnership's revenues, income and cash
flow, the General Partner is expressly empowered and authorized to borrow monies
and incur indebtedness on behalf of the Partnership for the express purpose of
making, to the degree practicable, equal quarterly cash distributions pursuant
to Sections 5.3(c) and 5.3(d)(i)(A). Furthermore, the General Partner will not
reduce distributions under Sections 5.3(c) and 5.3(d)(i)(A) with respect to a
fiscal quarter for the purpose of providing funds to make distributions with
respect to subsequent quarters under Sections 5.3(c)(iii), 5.3(d)(i)(B), or
5.3(d)(ii).
6.2 Certificate of Limited Partnership. The General Partner has filed a
Certificate of Limited Partnership of the Partnership with the Secretary of
State of the State of Delaware as required by the Delaware Act and shall cause
to be filed such other certificates or documents as may be determined by the
General Partner to be reasonable and necessary or appropriate for the formation,
continuation, qualification and operation of a limited partnership (or a
partnership in which the Limited Partners have limited liability) in the State
of Delaware or any other state in which the Partnership may elect to do
business. To the extent that the General Partner in its sole discretion
determines such action to be reasonable and necessary or appropriate, the
General Partner shall file amendments to the Certificate of Limited Partnership
and do all things to maintain the Partnership as a limited partnership (or a
partnership in which the Limited Partners have limited liability) under the laws
of the State of Delaware or any other state in which the Partnership may elect
to do business. Subject to applicable law, the General Partner may omit from the
Certificate of Limited Partnership of the Partnership filed with the Secretary
of State of the State of Delaware and from any other certificates or documents
filed in any other state in order to qualify the Partnership to do business
therein, and from all amendments thereto, the names and addresses of the Limited
Partners and information relating to the Capital Contributions and shares of
profits and compensation of the Partners, or state such information in the
aggregate rather than with respect to each individual Partner. Subject to the
terms of Section 7.5(a), the General Partner shall not be required to deliver or
mail a copy of the Certificate of Limited Partnership or any amendment thereto
to any Limited Partner.
6.3 Reliance by Third Parties. Notwithstanding any other provision of this
Agreement to the contrary, no lender or purchaser, including any purchaser of
property from the Partnership or any other Person dealing with the Partnership,
shall be required to look to the application of proceeds hereunder or to verify
any representation by the General Partner as to the extent of the interest in
the assets of the Partnership that the General Partner is entitled to encumber,
sell or otherwise use, and any such lender or purchaser shall be entitled to
rely exclusively on the
representations of the General Partner as to its authority to enter into such
financing or sale arrangements and shall be entitled to deal with the General
Partner as if it were the sole party in interest therein, both legally and
beneficially. Each Limited Partner and Assignee hereby waives any and all
defenses or other remedies that may be available against such lender, purchaser
or other Person to contest, negate or disaffirm any action of the General
Partner in connection with any sale or financing. In no event shall any Person
dealing with the General Partner or the General Partner's representative with
respect to any business or property of the Partnership be obligated to ascertain
that the terms of this Agreement have been complied with, or be obligated to
inquire into the necessity or expedience of any act or action of the General
Partner or the General Partner's representative; and every contract, agreement,
deed, mortgage, security agreement, promissory note or other instrument or
document executed by the General Partner or the General Partner's representative
with respect to any business or property of the Partnership shall be conclusive
evidence in favor of any and every Person relying thereon or claiming thereunder
that (a) at the time of the execution and/or delivery thereof this Agreement was
in full force and effect, (b) such instrument or document was duly executed in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership, and (c) the General Partner or the General Partner's
representative was duly authorized and empowered to execute and deliver any and
every such instrument or document for and on behalf of the Partnership.
6.4 Purchase or Sale of Units.
(a) The General Partner may cause the Partnership to purchase or otherwise
acquire Units (or may purchase or otherwise acquire Units on behalf of the
Partnership). As long as such Units are held by the Partnership or the Operating
Partnership, such Units shall not be considered Outstanding for any purpose,
except as otherwise provided herein. The General Partner may also purchase or
otherwise acquire and sell or otherwise dispose of Units for its own account,
and may acquire Units pursuant to Section 4.3(b). The General Partner shall be
entitled to exercise all the rights of a Limited Partner or Assignee, as the
case may be, with respect to such Units.
(b) At any time and from time to time, the General Partner (including in
its capacity as a Departing Partner pursuant to Section 13.2(b)), or any
Affiliate thereof (provided the General Partner so consents), shall have (i) the
right to cause the Partnership, upon the request of such Person, to file with
the Securities and Exchange Commission as promptly as practicable after
receiving such request, and use all reasonable efforts to cause to become
effective, a registration statement under the Securities Act registering all or
a portion of the Class A Units then owned by such Person and included in such
request for offer and sale and (ii) the right to cause the Partnership, upon
request of such Person and in the event that the Partnership has previously
determined to issue and publicly sell additional limited partnership interests
in the Partnership, to register the Class A Units owned by it together with the
limited partnership interests or other securities being registered by the
Partnership, to file with the Securities and Exchange Commission a registration
statement under the Securities Act, registering all or a portion of the Class A
Units then owned by such Person and included in such request. In connection with
any registration pursuant to the preceding sentence, the Partnership shall
promptly prepare and file such documents as may be necessary to register or
qualify the Class A Units subject to such registration under the securities laws
of such states as such Person shall
reasonably request and do any and all other acts and things which may reasonably
be necessary or advisable to enable such Person to consummate a public sale of
such Class A Units in such states. Registrations effected under clause (i) above
of this Section 6.4(b) shall be effected at the expense of the General Partner
and any such Affiliates so desiring to dispose of their Units, except that any
usual and ordinary accounting fees and expenses incurred in connection with the
annual audit of the Partnership's financial statements as of, and for the
periods ending on, the end of its fiscal year shall be borne by the Partnership.
Registrations effected under clause (ii) above of this Section 6.4(b) shall be
effected at the expense of the Partnership (except for underwriting discounts
and commissions and "blue sky" fees and expenses directly attributable to the
General Partner and any such Affiliates). Any registration statement filed
pursuant hereto shall be continued in effect for a period of not more than six
months following its effective date. If offered in an underwriting, the
Partnership, the General Partner and such Affiliates shall, as deemed
appropriate by the underwriters, provide indemnification, opinions and other
assurances to the underwriters in form and substance reasonably satisfactory to
such underwriters.
6.5 Compensation and Reimbursement of General Partner.
(a) Except as provided in this Section 6.5 and elsewhere in this Agreement
or in the Operating Partnership Agreement, the General Partner shall not be
compensated for its services as General Partner to the Partnership.
(b) The General Partner shall be reimbursed for all expenses, disbursements
and advances incurred or made in connection with the organization of the
Partnership and the Operating Partnership, the Initial Offering, the
qualification of the Partnership, the Operating Partnership and the General
Partner to do business, and any subsequent offerings of Units or other
securities by the Partnership.
(c) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole discretion, for all
direct expenses it incurs or makes on behalf of the Partnership (including
amounts paid to any Person to perform services to the Partnership) and, for that
portion of such General Partner's and its Affiliates' legal and accounting costs
and expenses, telephone, secretarial, aircraft, travel and entertainment
expenses, office rent and other office expenses, salaries and other compensation
expenses of employees, officers and directors, other administrative expenses and
other expenses necessary or appropriate to the conduct of the Partnership's
business and allocable to the Partnership. The General Partner shall determine
the expenses which are allocable to the Partnership in any reasonable manner.
Such reimbursements shall be in addition to any reimbursement to the General
Partner as a result of indemnification pursuant to Section 6.9.
(d) The General Partner in its sole discretion and without the approval of
the Limited Partners may propose and adopt benefit plans, including plans
involving the issuance of Units, for the benefit of employees of the General
Partner, the Partnership, the Operating Partnership or any Affiliate of any of
them in respect of services performed, directly or indirectly, for the benefit
of the Partnership or the Operating Partnership.
6.6 Outside Activities.
(a) The General Partner shall not enter into or conduct any business
except in connection with its performance of the terms of the Operating
Partnership Agreement or this Agreement or incidental to the acquisition,
ownership or disposition of Units. Additionally, other than by means of the
Partnership and through the Partnership's interest in other Persons, including
the Operating Partnership, no executive officer of the General Partner, nor any
Person in which such executive officer directly or indirectly holds a
controlling interest, may own, operate or manage, or have any equity interest in
any Person owning, operating or managing, convenience stores or retail gasoline
facilities, unless such ownership or operation is first approved by a majority
of the disinterested directors of the General Partner. The foregoing shall not
be deemed to apply to (i) the ownership by any executive officer or any member
of his family of equity securities of any publicly held entity in the same or
similar business as the Partnership or the Operating Partnership, provided such
equity ownership by any such Person does not exceed 10% of the total outstanding
voting securities of such entity and (ii) the ownership of all of the capital
and voting stock of Roadside Stations, Inc., a Texas corporation, by an
irrevocable family trust created by the President of the General Partner for the
benefit of his children, and all properties and operations (with all rights and
benefits in connection therewith) owned and conducted by such corporation and
its successors and assigns.
(b) Except as set forth in Section 6.6(a), any Affiliate of the General
Partner, and any director, officer, partner or employee of the General Partner
or of any Affiliate of the General Partner, shall be entitled to and may have
business interests and engage in business activities in addition to those
relating to the Partnership and may engage in any other business and activities,
including business interests and activities which conflict with or are in direct
competition with the Partnership and the Operating Partnership for their own
account and for the account of others, and may own interests in the same
properties as those in which the Partnership or the Operating Partnership owns
an interest, without having or incurring any obligation to offer any interest in
such properties, business or activities to the Partnership, the Operating
Partnership or any Partner, and, except as so specified in Section 6.6(a) above,
no other provision of this Agreement shall be deemed to prohibit any such Person
from conducting such other businesses and other activities. Neither the
Partnership, the Operating Partnership, the Partners nor any other Person shall
have any rights by virtue of this Agreement or the partnership relationship
created hereby in any business ventures of any Affiliate of the General Partner
or any director, officer, partner or employee of either the General Partner or
an Affiliate of the General Partner. The General Partner and any other Persons
affiliated with the General Partner may acquire Units, in addition to those
acquired by any of such Persons on the Commencement Date, and shall be entitled
to exercise all rights of an Assignee or Limited Partner, as applicable,
relating to such Units.
6.7 Partnership Funds. The funds of the Partnership shall be deposited in
such account or accounts as are designated by the General Partner. The General
Partner may, in its sole discretion, deposit funds of the Partnership in a
central disbursing account maintained by or in the name of the General Partner
or the Operating Partnership in which funds of the Operating Partnership and
other Persons are also deposited, provided that at all times books of account
are maintained which show the amount of funds of the Partnership on deposit in
such account. The
General Partner may use the funds of the Partnership as compensating balances
for its benefit, provided that such funds do not directly or indirectly secure,
and are not otherwise at risk on account of, any indebtedness or other
obligation of the General Partner or any director, officer, partner, employee or
Affiliate thereof, and that such use of funds does not, in the opinion of the
General Partner, adversely affect the financial condition of the Partnership.
Nothing effected in compliance with this Section 6.7 shall be deemed to violate
the prohibition against the Partnership lending funds to the General Partner or
any Affiliate thereof pursuant to Section 6.8(b). All withdrawals from or
charges against such accounts shall be made by the General Partner or by its
officers or agents. Funds of the Partnership may be invested as determined by
the General Partner, except in connection with acts otherwise prohibited by this
Agreement.
6.8 Loans to or from the General Partner; Contracts with Affiliates.
(a) The General Partner or any Affiliate thereof may lend to the
Partnership funds needed by the Partnership for such periods of time as the
General Partner may determine; provided, however, that such General Partner or
such Affiliate may not charge the Partnership interest at a rate greater than
the rate (including points or other financing charges or fees) that would be
charged the Partnership by unrelated tenders on comparable loans. The
Partnership shall reimburse the General Partner or any Affiliate, as the case
may be, for any costs incurred by it in connection with the borrowing of funds
obtained by such General Partner or such Affiliate and loaned to the
Partnership.
(b) The Partnership may lend or contribute funds to the Operating
Partnership on terms and conditions established in the sole discretion of the
General Partner. The foregoing authority shall be exercised by the General
Partner in its sole discretion and shall not create any right or benefit in
favor of the Operating Partnership or any other Person. The Partnership may not
lend funds to the General Partner or any Affiliate thereof.
(c) Notwithstanding the provisions of Section 6.8(a), the assumption of
certain liabilities and related obligations by the Partnership pursuant to the
Conveyance Agreement is hereby ratified by all Partners.
(d) The General Partner may itself, or may enter into an agreement with an
Affiliate of the General Partner to, render services for the Partnership. Any
service rendered to the Partnership by the General Partner or any such Affiliate
shall be on terms that are fair and reasonable to the Partnership. The
provisions of Section 6.5 shall apply to the rendering of services described in
this Section 6.8(d).
(e) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions consistent
with applicable law as the General Partner deems appropriate.
(f) Neither the General Partner nor any Affiliate thereof shall sell,
transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except
pursuant to transactions the terms of which are at least as favorable to the
Partnership as the terms the Partnership could obtain from an unaffiliated third
party; provided that the conditions of this Section 6.8(f) expressly shall be
deemed to be satisfied as to the transactions effected pursuant to Sections 4.1
and 4.2, and the sale by the Transferors to the Partnership of the Transferors'
Other Properties.
6.9 Indemnification of the General Partner.
(a) To the fullest extent permitted by law, the General Partner, its
Affiliates and the General Partner's and its Affiliates' directors, officers,
partners, employees and agents (individually, an "Indemnitee") shall each be
indemnified and held harmless by the Partnership from and against any and all
losses, claims, damages, liabilities, joint and several, expenses (including
legal fees and expenses), judgments, fines, settlements and other amounts
arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, in which the Indemnitee may be
involved, or threatened to be involved, as a party or otherwise by reason of its
status as (x) a General Partner or an Affiliate thereof or (y) a director
officer, partner, employee or agent of the General Partner or an Affiliate or
(z) a Person serving at the request of the Partnership in another entity in a
similar capacity, which relate to or arise out of the Partnership, its property,
business or affairs, including, without limitation, the Initial Offering,
regardless of whether the Indemnitee continues to be the General Partner or an
Affiliate thereof or a director, officer, partner, employee or agent of the
General Partner or an Affiliate thereof at the time any such liability or
expense is paid or incurred, if (i) the Indemnitee acted in good faith and in a
manner it in good faith believed to be in, or not opposed to, the best interests
of the Partnership, and, with respect to any criminal proceeding, had no
reasonable cause to believe its conduct was unlawful, and (ii) the Indemnitee's
conduct did not constitute gross negligence or willful or wanton misconduct. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that the Indemnitee acted in a manner contrary to
that specified in (i) or (ii) above. Any indemnification pursuant to this
Section 6.9 shall be made only out of the assets of the Partnership.
(b) To the fullest extent permitted by law, expenses (including legal fees)
incurred by an Indemnitee in defending any claim, demand, action, suit or
proceeding shall, from time to time, be advanced by the Partnership prior to the
final disposition of such claim, demand, action, suit or proceeding upon receipt
by the Partnership of an undertaking by or on behalf of the Indemnitee to repay
such amount if it shall be determined that the Indemnitee is not entitled to be
indemnified as authorized in this Section 6.9.
(c) The indemnification provided by this Section 6.9 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement,
vote of the Partners, as a matter of law or otherwise, both as to action in the
Indemnitee's capacity as the General Partner or an Affiliate thereof or as a
director, officer, partner, employee, or agent of the General Partner or an
Affiliate thereof and to action in any other capacity (including, without
limitation, any capacity under the Underwriting Agreement and the Conveyance
Agreement), and shall continue
as to an Indemnitee who has ceased to serve in such capacity and shall inure to
the benefit of the heirs, successors, assigns and administrators of the
Indemnitee.
(d) The Partnership may purchase and maintain insurance on behalf of the
General Partner and such other Persons as the General Partner shall determine
against any liability that may be asserted against, or expense that may be
incurred by, such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For the purposes of this Section 6.9, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall be deemed "fines" within the meaning of Section 6.9(a); and action taken
or omitted by it with respect to an employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interest of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners or Assignees
to personal liability by reason of these indemnification provisions.
(g) An Indemnitee shall not be denied indemnification in whole or in part
under this Section 6.9 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.9 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Persons.
6.10 Liability of the General Partner.
(a) Neither the General Partner nor any of the partners, stockholders,
directors, officers, employees or agents of the General Partner nor any
Affiliate of the General Partner or any partner, stockholder, director, officer,
employee or agent of any such Affiliate, shall be liable to the Partnership,
Limited Partners, Assignees or to any Persons who have acquired interests in the
Units, whether as Limited Partners, Assignees or otherwise, for errors in
judgment or for any acts or omissions taken in good faith.
(b) The General Partner may exercise any of the powers granted to it by
this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents, and the General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.
6.11 Resolution of Conflicts of Interest.
(a) Unless otherwise expressly provided in this Agreement or in the
Operating Partnership Agreement, (i) whenever a conflict of interest exists or
arises between the General Partner or any of its Affiliates, on the one hand,
and the Partnership, the Operating Partnership, any Limited Partner or any
Assignee, on the other hand, or (ii) whenever this Agreement, the Operating
Partnership Agreement or any other agreement contemplated herein or otherwise
provides that the General Partner shall act in a manner which is, or provide
terms which are, fair and/or reasonable to the Partnership, the Operating
Partnership, any Limited Partner or Assignee, the General Partner shall resolve
such conflict of interest, take such action or provide such terms considering,
in each case, the relative interests of each party to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the General Partner, the resolution, action or terms so made, taken or
provided by the General Partner shall not constitute a breach of this Agreement,
the Operating Partnership Agreement, or any other agreement contemplated herein
or otherwise.
(b) Whenever in this Agreement or the Operating Partnership Agreement the
General Partner is permitted or required to make a decision (i) in its "sole
discretion" or "discretion," with "complete discretion" or under a grant of
similar authority or latitude, the General Partner shall be entitled to consider
only such interests and factors as it desires and shall have no duty or
obligation to give any consideration to any interest of or factors affecting the
Partnership, the Operating Partnership, the Limited Partners or the Assignees,
or (ii) in its "good faith" or under another express standard, the General
Partner shall act under such express standard and shall not be subject to any
other or different standards imposed by this Agreement, the Operating
Partnership Agreement or any other agreement contemplated herein or therein.
Each Limited Partner and Assignee hereby agrees that any standard of care or
duty imposed in this Agreement, the Operating Partnership Agreement or any other
agreement contemplated herein or under the Delaware Act or any other applicable
law, rule or regulation shall be modified, waived or limited in each case as
required to permit the General Partner to act under this Agreement, the
Operating Partnership Agreement or any other agreement contemplated herein and
to make any decision pursuant to the authority prescribed in this Section
6.11(b) so long as such action or decision does not constitute gross negligence
or willful or wanton misconduct and is not reasonable believed by the General
Partner to be inconsistent with the overall purposes of the Partnership.
(c) The Limited Partners hereby authorize the General Partner, on behalf of
the Partnership as the limited partner of the Operating Partnership, to consent
to similar actions by the general partner of the Operating Partnership.
(d) Notwithstanding any provision to the contrary in this Agreement, the
General Partner and its Affiliates shall have the right to contract or otherwise
deal with the Partnership provided that the terms of any such transaction are at
least as favorable to the Partnership as the terms the Partnership could obtain
from an unaffiliated third party, and that any such transaction invoking an
amount in excess of $25,000 is approved by a majority of the disinterested
directors of the General Partner.
6.12 Other Matters Concerning the General Partner.
(a) The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any opinion of such Person as to matters which the
General Partner believes to be within such Person's professional or expert
competence shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by the General Partner hereunder in good
faith and in accordance with such opinion.
6.13 Title to Partnership Assets. Title to 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 or Assignee, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees,
whether pursuant to a lease, sub-lease or management agreement, or otherwise, as
the General Partner may determine. The General Partner hereby declares and
warrants that any Partnership assets for which legal title is held in the name
of the General Partner or any of the Transferors (or any nominee thereof) shall
be held in trust by the General Partner or such Transferor (or such nominee), as
the case may be, for the use and benefit of the Partnership in accordance with
the terms or provisions of this Agreement. All Partnership assets shall be
recorded as the property of the Partnership on its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
6.14 Maintenance of Net Worth. The General Partner represents that it will
maintain at all times an aggregate net worth (computed without regard to the
General Partner's interest in any limited partnership and accounts and notes
receivable from and payable to any limited partnership) equal to at least seven
percent of the total contributions to the Partnership and that such net worth
will be available to meet the claims of the creditors of the Partnership and the
Operating Partnership. For purposes or computing the net worth of the General
Partner, current fair market value of the General Partner's assets will be used.
ARTICLE VII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
7.1 Limitation of Liability. The Limited Partners shall have no liability
under this Agreement except as provided in this Agreement or in the Delaware
Act.
7.2 Management of Business. No Limited Partner (other than the General
Partner, any Affiliate thereof or their directors, officers, general partners,
employees or agents in their capacity as such) shall take part in the operation,
management or control (within the meaning of
the Delaware Act) of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. The transaction of any such business by a director, officer,
general partner, employee or agent of the General Partner or Affiliate in its
capacity as such shall not affect, impair or eliminate the limitations on the
liability of any Limited Partner under this Agreement.
7.3 Outside Activities. Except as provided in Section 6.6 with respect to
the General Partner and the executive officers thereof, a Limited Partner shall
be entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests
and activities in direct competition with the Partnership or the Operating
Partnership. Neither the Partnership nor any of the other Partners nor any other
Person shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner.
7.4 Return of Capital. No Limited Partner shall be entitled to the
withdrawal or return of his Capital Contribution, except to the extent, if any,
that distributions made pursuant to this Agreement or upon termination of the
Partnership may be considered as such by law and then only to the extent
provided for in this Agreement. Except to the extent provided in Article IV and
Article V hereof, no Limited Partner shall have priority over any other Limited
Partner either as to the return of Capital Contributions or as to profits,
losses or distributions.
7.5 Rights of Limited Partners Relating to the Partnership.
(a) In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 7.5(b), each Limited Partner
shall have the right for a proper purpose reasonably related to such Limited
Partner's interest as a limited partner in the Partnership, upon reasonable
demand, during normal Partnership business hours and at such Limited Partner's
own expense:
(i) to obtain true and full information regarding the status of the
business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local income tax returns for each year;
(iii) to have furnished to him, upon notification to the General
Partner, a current list of the name and last known business, residence or
mailing address of each Partner;
(iv) to have furnished to him, upon notification to the General
Partner, a copy of this Agreement and the Certificate of Limited Partnership and
all amendments thereto, together with executed copies of any powers of attorney
pursuant to which this Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed; and
(v) to inspect and copy any of the Partnership's books and records
and obtain such other information regarding the affairs of the Partnership as is
just and reasonable.
(b) Notwithstanding the other provisions hereof, the General Partner may
keep confidential from the Limited Partners for such period of time as the
General Partner deems reasonable, any information which the General Partner
reasonably believes to be in the nature of trade secrets or other information
the disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or could damage the Partnership or its
business or which the Partnership is required red by law or by agreements with
third parties to keep confidential.
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 Records and Accounting. The General Partner shall keep or cause to be
kept at the principal office of the Partnership appropriate books and records
with respect to the Partnership's business including, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section
7.5(a). Any records maintained by the Partnership in the regular course of its
business, including the record of the holders of Units, books of account and
records of Partnership proceedings, may be kept on or be in the form of punch
cards, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so kept are convertible into clearly
legible written form within a reasonable period of time. The books of the
Partnership shall be maintained, for financial reporting purposes, on an accrual
basis in accordance with generally accepted accounting principles. All decisions
as to accounting matters, except as specifically provided to the contrary
herein, shall be made by the General Partner.
8.2 Fiscal Year. The fiscal year of the Partnership shall be a 52-53 week
year ending the last Tuesday in December, or such other year as the General
Partner shall select.
8.3 Reports.
(a) As soon as practicable, but in no event later than 120 days after the
close of each fiscal year, the General Partner shall cause to be mailed to each
Record Holder as of the close of business on the last day of that fiscal year,
reports containing financial statements of the Partnership for the fiscal year,
presented in accordance with generally accepted accounting principles, including
a balance sheet, a statement of income, a statement of Partners' capital and a
statement of changes in financial position, such statements to be audited by a
firm of independent public accountants selected by the General Partner.
(b) As soon as practicable, but in no event later than 75 days after the
close of each fiscal quarter, except the last fiscal quarter of each fiscal
year, the General Partner shall cause to be mailed to each Record Holder of a
Unit as of the close of business on the last day of that fiscal quarter, a
report containing such financial information for that fiscal quarter as the
General Partner deems appropriate.
8.4 Other Information. The General Partner may release such information
concerning the operations of the Partnership to such sources as is customary in
the industry or required by law or regulation of any regulatory body.
ARTICLE IX
TAX MATTERS
9.1 Preparation of Tax Returns. The General Partner shall arrange for the
preparation and timely filing of all returns of Partnership income, gains,
deductions, losses and other items necessary for federal and state income tax
purposes and shall use all reasonable efforts to furnish to Partners within 90
days of the close of the taxable year the summary tax information reasonably
required for federal and state income tax reporting purposes. The
classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for
federal income tax purposes, as the General Partner shall determine in its sole
discretion. The taxable year of the Partnership shall be a 52-53 week year
ending the last Tuesday in December, unless the General Partner shall determine
otherwise in its sole discretion.
9.2 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole discretion, determine whether to make any available
election pursuant to the Code. The General Partner, on behalf of the
Partnership, shall make the election pursuant to Section 754 of the Code in
accordance with applicable regulations thereunder, subject to the reservation of
the right to seek to revoke any such election in the General Partner's sole and
complete discretion that such revocation is in the best interests of the Limited
Partners and Assignees.
9.3 Tax Controversies. Subject to the provisions hereof, the General
Partner is designated the Tax Matters Partner (as defined in Section 6231 of the
Code), shall have all the powers and duties assigned to a Tax Matters Partner
under Sections 6221-6232 of the Code and Treasury Regulations thereunder and
further is authorized and required to represent the Partnership (at the
Partnership's expense) in connection with all examinations of the Partnership's
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and costs
associated therewith. Each Partner agrees to cooperate with the General Partner
and to do or refrain from doing any or all things reasonably required by the
General Partner to conduct such proceedings.
9.4 Organizational Expenses. The Partnership shall elect to deduct
expenses incurred in organizing the Partnership ratably over a 60-month period
as provided in Section 709 of the Code.
9.5 Taxation as a Partnership. No election shall be made by the
Partnership or any Partner for the Partnership to be excluded from the
application of any of the provisions of Subchapter K, Chapter 1 of Subtitle A of
the Code or from any similar provisions of any state tax laws.
9.6 Opinions Regarding Taxation as a Partnership. Notwithstanding any
other provisions of this Agreement, the requirement, as a condition to any
action proposed to be taken under this Agreement, that the Partnership be
furnished an Opinion of Counsel to the effect that the proposed transaction
would not result in the Partnership being treated as an association taxable as a
corporation for federal income tax purposes, shall not be applicable if the
Partnership is at such time treated in all material respects as an association
taxable as a corporation for federal income tax purposes.
9.7 FIRPTA Withholding.
(a) Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines to be necessary or
appropriate to cause the Partnership to comply with any withholding requirements
established under Section 1445 of the Code with regard to (i) the sale of
"United States real property interests" (as defined in the Code), (ii) the
distribution of cash or property to any Partner who is a "foreign person" (as
defined in Treasury Regulation Section l.1445-2T(b)(2)(i)(c)), or (iii) the
transfer of Units.
(b) In its sole and absolute discretion and as provided for in Treasury
Regulations under Section 1445 of the Code, the General Partner may elect to
withhold a portion of any distribution made to Partners and Assignees who are
"foreign persons" or who fail to provide to the Partnership an appropriate
certificate in accordance with the applicable provisions of such Treasury
Regulations. For purposes of Section 5.3, any amount so withheld shall be deemed
to have been distributed to the Partner or Assignee with respect to whom such
distribution is withheld.
9.8 Compliance with the Tax Reform Act of 1986. In its sole and absolute
discretion, the General Partner is authorized to take any action that it
determines to be necessary to cause the Partnership to comply with any provision
of the Tax Reform Act of 1986 and any Treasury Regulations promulgated pursuant
thereto, including, without limitation, complying with provisions relating to
withholding on distributions to "foreign persons" and relating to reporting
requirements to the Treasury Department.
ARTICLE X
ISSUANCE OF CERTIFICATES
10.1 Issuance of Certificates. Upon each issuance of Units, the General
Partner shall cause the Partnership to issue one or more Certificates for and in
the name of each Limited Partner which shall evidence the number and class or
series of Units owned by such Limited Partner. Unless the Limited Partner or
Assignee otherwise elects, he shall receive one Certificate in denomination
equal to the number of all of his Units of the same class or series. A Limited
Partner or Assignee may elect to receive Certificates in such smaller
denominations as he may designate.
The Certificates shall be in such form as shall be approved by the General
Partner in conformity with law and any applicable rule, regulation, guideline or
requirement of any National Securities Exchange on which the Units are or will
he listed for trading. The Certificates shall be consecutively numbered, shall
be entered as they are issued in the transfer records and shall state the
Limited Partner's or Assignee's name, the number of Units and such other matters
as may be required by law and any applicable rule, regulation, guideline or
requirement of any National Securities Exchange on which the Units are or will
be us listed for trading. The Certificates shall be signed by the General
Partner by its chairman of the board, president or any vice presidents and also
by its secretaries, assistant secretaries or any other officers. If any
Certificate is countersigned by the Transfer Agent, the signatures or the
foregoing officers thereon may be a facsimile,
10.2 Lost, Stolen or Destroyed Certificates. The Partnership shall issue
a new Certificate in place of any Certificate previously issued if the
registered owner of the Certificate:
(a) makes proof by affidavit, in form and substance satisfactory to the
General Partner, that a previously issued Certificate has been lost, destroyed
or stolen;
(b) requests the issuance of a new Certificate before the Partnership has
notice that the Certificate has been acquired by a purchaser for value in good
faith and without notice of an adverse claim;
(c) if requested by the General Partner or Transfer Agent, delivers to
the Partnership a bond, in form and substance satisfactory to the General
Partner or Transfer Agent, with such surety or sureties and with fixed or open
penalty as the General Partner or Transfer Agent may direct, in its sole
discretion, to indemnify the Partnership and the Transfer Agent against any
claim that may be made on account of the alleged loss, destruction or theft of
the Certificate; and
(d) satisfies any other reasonable requirements imposed by the General
Partner or Transfer Agent.
If a Limited Partner or Assignee of record fails to notify the Partnership
or the Transfer Agent within a reasonable time after he has notice of the loss,
destruction or theft of a Certificate, and a transfer of the Units represented
by the Certificate is registered before receiving such notification, the Limited
Partner or Assignee of record shall be precluded from making any claim against
the Partnership or any Transfer Agent for such transfer or for a new
Certificate.
10.3 Registered Owner. The Partnership shall be entitled to treat the
Record Holder as the Limited Partner or Assignee in fact of any Units and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Units on the part of any other Person, whether or not the
Partnership shall have actual or other notice thereof, except as otherwise
provided by law or any applicable rule, regulation, guideline or requirement of
any stock exchange on which the Units are listed for trading. Without limiting
the foregoing, when a Person (such as a broker, dealer, bank, trust company or
clearing corporation, or an agent of any of the foregoing) is acting as a
nominee, agent or in some other representative capacity for
another Person in acquiring and/or holding Units, as between the Partnership on
the one hand and such other Persons on the other hand, such representative
Person (a) shall be the Limited Partner or Assignee (as the case may be) of
record and beneficially, (b) must execute and deliver a Transfer Application and
(c) shall be bound by the Partnership Agreement and shall have the obligations
of a Limited Partner or Assignee (as the case may be) hereunder and as provided
for herein.
ARTICLE XI
TRANSFER OF INTERESTS
11.1 Transfer. The term "transfer," when used in this Article XI with
respect to a Partnership Interest, shall be deemed to refer to a transaction by
which the General Partner assigns all or part of its Partnership Interest as the
General Partner to another Person or by which the holder of a Unit assigns the
Partnership Interest evidenced thereby to another Person, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition.
11.2 Transfer of Interests of the General Partner.
(a) The General Partner may not transfer all or any part of its
Partnership Interest as the General Partner unless (i) a Majority Interest
consents to such transfer, (ii) the transferee agrees to assume and be bound by
the applicable terms and provisions of this Agreement and agrees to be admitted
as a general partner of the Partnership and (iii) the Partnership receives an
Opinion of Counsel that such transfer would not cause the Partnership or the
Operating Partnership to be treated as an association taxable as a corporation
for federal income tax purposes; provided, however, that any transfer by the
General Partner of all of its Partnership Interest as general partner shall
constitute a withdrawal for purposes of and shall be effected by the General
Partner if not prohibited by Section 13.1(a).
(b) Subject to compliance with Sections 11.2(a)(ii) and 11.2(a)(iii),
neither Section 11.2(a)(i) nor any other provision of this Agreement shall be
construed to prevent (and all Partners hereby expressly consent to) (i) the
transfer by the General Partner of all or any part of its Partnership Interest
to an Affiliate of the General Partner; (ii) the transfer by the General Partner
of its Partnership Interest upon its merger, consolidation or liquidation with
or into any other Person or the transfer, upon liquidation or otherwise by it of
all or substantially all of its assets to another Person, and, in the case of
either clause (i) or (ii), the assumption of the rights and duties of the
General Partner by such Person; provided, in the ease of either clause (i) or
(ii), such Person furnishes to the Partnership an Opinion of Counsel that such
transfer, merger, consolidation or assumption will not result in a loss of
limited liability of any Limited Partner or of the limited partner in the
Operating Partnership or result in the Partnership or the Operating Partnership
being treated as an association taxable as a corporation for federal income tax
purposes; (iii) the transfer by the General Partner of any part (but not all) of
its interest in items of Partnership income, gain, losses,
deductions, credits, distributions or surplus; (iv) the transfer by the General
Partner of all of its interest in items of Partnership income, gain, losses,
deductions, credits, distributions or surplus if the General Partner agrees,
notwithstanding Section 17-702(a)(4) of the Delaware Act, to continue as the
General Partner, and if it so agrees, all Partners hereby agree that it shall
continue as the General Partner; or (v) a General Partner's mortgaging,
pledging, hypothecating or granting a security interest in all or any part of
its Partnership Interest (in which case the General Partner shall continue to be
the General Partner). In the case of a transfer pursuant to clause (i) or (ii)
of this Section 11.2(b), the transferee or Affiliate shall be admitted to the
Partnership as a General Partner immediately prior to the transfer of the
General Partner's Partnership Interest, and the transferee or Affiliate shall
continue the business and operations of the Partnership without dissolution.
11.3 Prohibition Against Transfer. No Unit or Partnership Interest shall
be transferred in whole or in part, except in accordance with the terms and
conditions set forth in this Article XI. Any transfer or purported transfer of
any Unit or Partnership Interest not made in accordance with this Article XI
shall be null and void.
11.4 Transfer of Class A Units.
(a) Class A Units may be transferred by assignment, satisfactory in form
and substance to the Transfer Agent, of the Certificate evidencing such Class A
Units, and by execution and delivery of a Transfer Application in accordance
with subsection (b) below. Upon such an assignment, the transferor shall be
empowered, by this Agreement and the Certificate of Limited Partnership, to give
the transferee the right to become a Substituted Limited Partner and shall be
deemed to have given that right by the assignment. No transfer of Units or of
the Certificate evidencing such Units may be made and no new Certificate will be
registered in the name of or issued to the proposed transferee unless the
transferee has signed and delivered a Transfer Application to the Transfer
Agent.
(b) A transferee who has completed and delivered a Transfer Application
shall be deemed (i) to have requested admission as a Substituted Limited
Partner, (ii) to have agreed to comply with and be bound by the terms of, and to
have executed and delivered, this Agreement, (iii) to have represented and
warranted that such transferee has authority to enter into this Agreement, (iv)
to have appointed the General Partner and the Liquidator attorney-in-fact to
execute any document that either of them may deem necessary or appropriate to be
executed in connection with the transfer and such transferee's admission as a
Substituted Limited Partner pursuant to Article XII and as a party to this
Agreement, (v) to have made the power of attorney set forth in Section 1.4 and
(vi) to have made the consents and waivers contained herein. At such time as
such transferee becomes a Record Holder of a Certificate evidencing Units, such
transferee shall thereupon be deemed to be an Assignee respecting such Units.
Until admitted as a Substituted Limited Partner pursuant to Article XII, such
Record Holder shall continue to be an Assignee in respect of such Units.
(c) Each distribution in respect of Units shall be paid by the
Partnership, directly or through the Transfer Agent or through any other Person
or agent, only to the Record Holders thereof as of the Record Date set for the
distribution. Such payment shall constitute full payment and satisfaction of the
Partnership's liability in respect of such payment, regardless of any claim
of any Person who may have an interest in such payment by reason of an
assignment or otherwise.
11.5 Restrictions on Transfer. Notwithstanding the other provisions of
this Article XI, no transfer of any Unit shall be made if such transfer (a)
would violate the then applicable federal and state securities laws or rules and
regulations of the Securities and Exchange Commission, any state securities
commission or any other governmental authorities with jurisdiction over such
transfer, (b) would result in the Partnership being treated as an association
taxable as a corporation for federal income tax purposes or (c) would affect the
Partnership's existence or qualification as a limited partnership under the
Delaware Act.
11.6 Restrictions on Transfer of Class B Units. Notwithstanding the other
provisions of this Article XI, no transfer of any Class B Unit shall be made
except (i) the transfer by any of the Transferors of any or all of its Class B
Units to another one of the Transferors or to an Affiliate of any of the
Transferors; (ii) the transfer by any of the Transferors of its Class B Units
upon its liquidation or dissolution or upon merger, consolidation or liquidation
with or into any other Person; or (iii) the transfer (whether by execution,
levying, foreclosure, or otherwise) by any of the Transferors of any or all of
its Class B Units to any bona fide pledgee of the Class B Units upon the default
by any of the Transferors or any of its Affiliates in its or their obligations
to the pledgee; and in any such case, upon the assumption of the rights and
duties of the Class B Limited Partner by any such Affiliate or transferee;
provided, in any such case, such Affiliate or such transferee furnishes to the
Partnership an Opinion of Counsel that such transfer, liquidation, dissolution,
merger, consolidation or assumption will not result in the Partnership or the
Operating Partnership being treated as an association taxable as a corporation
for federal income tax purposes. In the event of any transfer of Class B Units
in accordance with the provisions of this Section 11.6, the transferee shall
become a Substituted Limited Partner when the transfer of the Class B Units is
shown on the books and records of the Partnership. Following conversion of all
Class B Units into Class A Units the restrictions contained in this Section 11.6
shall no longer be deemed to apply.
11.7 Conversion of Class B Units.
(a) Provided that a Deficiency (as defined in Section 5.3(d)) does not
exist and capital account adjustments pursuant to either Section 4.1(b)(ii) or
Section 4.2(c) have been made such that the Capital Account for each Class A
Unit and Class B Unit are equal, the holder of any Class B Units shall have the
right at any time after the Subordination Period (or, if later, at any time
after the fiscal year with respect to which any Deficiency is eliminated), at
its option, to convert, subject to the terms and provisions of this Section
11.7, such Class B Units into Class A Units upon surrender of the Certificates
evidencing the Class B Units that are to be so converted to the Partnership at
any time during usual business hours at the principal offices of the Partnership
in Fort Worth, Texas (or at such other place as the Partnership shall hereafter
designate in writing to the Record Holders of the Class B Units), accompanied by
a written instrument of transfer in form satisfactory to the Partnership duly
executed by the Record Holder or his duly authorized legal representative.
(b) As promptly as practicable after the surrender, as herein provided,
of any Class B Units for conversion, the Partnership shall issue the number of
Class A Units into which such Class B Units may be converted in accordance with
the provisions of this Section 11.7 and shall deliver or cause to be delivered,
at the offices set forth above to or upon the written order of the holder of
such Class B Units so surrendered, duly issued Certificates evidencing such
Class A Units. Prior to delivery of such Certificates, the Partnership shall
require a written notice from the Record Holder of the Class B Units so
surrendered indicating its election to convert such Class B Units and specifying
the name or names (with address) in which such Certificates are to be issued. If
the Certificates are to be issued to a Person who is other than the Record
Holder of the Class B Units to be converted, the surrender of such Units shall
be accompanied by such duly executed instruments of transfer (including a
Transfer Application duly executed by the transferee) as shall be required by
this Agreement or as determined by the General Partner at its sole discretion.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date that such Class B Units shall have been surrendered for
conversion, so that the rights of the holder of such Class B Units shall cease
with respect to such Class B Units at such time, and the Person or Persons
entitled to receive the Class A Units upon conversion of such Class B Units
shall be treated for all purposes as having become the Record Holders of such
Class A Units at such time. Distributions declared but unpaid on the Class B
Units shall be made upon the conversion of such Class B Units; provided,
however, that distributions declared prior to such conveyance on the Class A
Units but unpaid at the time of conversion shall not be payable on Class A
Units that are issued upon such conversion.
(c) The rate at which Class A Units shall be delivered upon conversion
(herein called the "conversion rate") shall initially be one Class A Unit for
one Class B Unit. The conversion rate shall be subject to adjustment as follows:
if the Partnership shall (i) make a distribution to all holders of Class A Units
payable in any class of Units or securities convertible into any class of Units,
(ii) subdivide outstanding Class A Units into a greater number of Class A Units,
(iii) combine outstanding Class A Units into a smaller number of Class A Units,
or (iv) issue by reclassification of Class A Units any Units of the Partnership
of any class or classes, then the conversion rate in effect immediately prior to
such action shall be adjusted so that the holder of any Class B Units hereafter
surrendered for conversion shall be entitled to receive the number and class or
classes of securities that he would have owned or have been entitled to receive
immediately after the happening of any of the events described above had such
Class B Units been converted on or immediately prior to the Record Date for such
distribution or the effective date of such subdivision, combination or
reclassification, as the case may be. An adjustment made pursuant to this
Section 11.7 shall become effective retroactively immediately after the Record
Date in the case of a distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this Section
11.7, the holder of any Class B Units thereafter surrendered for conversion
shall become entitled to receive Units of two or more classes, the General
Partner (whose determination shall be conclusive and shall be described in a
statement provided to each Record Holder or Class B Units) shall determine the
allocation of the conversion rate between and among such classes of Units.
(d) In case of any consolidation or merger of the Partnership with or
into another entity or in case of any sale or transfer to another entity of all
or substantially all of the Partnership assets, then the holders of the Class B
Units then Outstanding shall have the right thereafter to convert such Class B
Units into the kind and amount of securities and property receivable upon or
deemed to be held following such consolidation, merger, sale or transfer by a
holder of a number of Class A Units into which such Class B Units might have
been converted immediately prior to such consolidation, merger, sale or
transfer. This provision shall similarly apply to successive consolidations,
mergers, sales or transfers.
(c) The issuance of Certificates evidencing Class A Units upon the
conversion of Class B Units shall be made without charge to the converting
Partner for such Certificates or for any tax in respect of the issuance of such
Certificates; provided, however, that the Partnership shall not be required to
pay any charge or tax which may be payable in respect of any transfer involved
in the issuance and delivery of any such Certificate in a name other than that
of the Record Holder of the Class B Units converted, and the Partnership shall
not be required to issue or deliver any such Certificates unless and until the
Person or Persons requesting the issuance thereof shall have paid to the
Partnership or the Transfer Agent the amount of such charge or tax or shall have
established to the satisfaction of the Partnership or the Transfer Agent that
such charge or tax has been paid; and provided further, however, that the
Partnership shall not be required to pay or reimburse the holder for any income
tax payable by such holder as a result of such issuance. The Partnership shall
further comply with any and all applicable federal and state securities laws and
regulations, and the listing requirements of any and all securities exchanges
upon which its Units are listed, or have been approved for listing, with respect
to the conversion of the Class B Units as provided herein.
(f) The "net agreed value" for purposes of the Delaware Act of any Class
A Units issued by the Partnership upon conversion of the Class B Units pursuant
to this Section 11.7 shall be the "net agreed value" determined to be applicable
to such Class B Units at the time of their issuance.
11.8 Restriction on Transfer of Class A Units Converted from Class B
Units.
(a) Subject to the terms of Section 11.8(b), no transfer of any Class A
Units issued pursuant to any conversion of Class B Units as described in Section
11.7 may be made unless and until any one of the following conditions is met.
(i) The election under Section 754 of the Code has previously been
made by the General Partner on behalf of the Partnership and has not been
revoked;
(ii) If the election under Section 754 of the Code has been revoked,
the General Partner prepares, signs and delivers to the independent public
accountants then serving the Partnership a Section 754 election which is in form
sufficient to make that election effective for the Partnership during the first
year that any of the above-referenced Class A Units received upon conversion of
Class B Units are transferred and the General Partner instructs such accountants
to
file the Section 754 election in accordance with the requirements of the
appropriate Treasury Regulations; or
(iii) The Code is amended, a regulation is promulgated by the
Treasury Department, a published revenue ruling is issued by the Internal
Revenue Service, or a private ruling is issued by the Internal Revenue Service
to the Partnership which expressly permits tax attributes to be so allocated
among publicly traded interests in partnerships that those interests may be
traded in the public market as substantially identical, notwithstanding the
historic differences among those interests of certain tax attributes.
(b) Section 11.8(a) is intended only to create a temporary restriction on
the transfer of Class A Units received upon conversion of Class B Units so that
those Class A Units will not be commingled in the trading market with Class A
Units which were offered and sold to the public pursuant to the Underwriting
Agreement, or with later issuances under Section 4.3(a). In that regard. Section
11.8(a) shall not be applicable to prohibit any transfer otherwise prohibited by
its provisions if the transfer of such Class A Units will not result in such a
commingling and if the transferee of such Class A Units agrees to be bound by
the restrictions contained in this Section 11.8 as if the transferee were the
original owner of such Class A Units.
ARTICLE XII
ADMISSION OF INITIAL, SUBSTITUTED AND ADDITIONAL LIMITED PARTNERS
12.1 Admission of Initial Limited Partners. On the Commencement Date, the
General Partner shall admit the Initial Limited Partners to the Partnership.
Each such party shall execute a counterpart of this Agreement (either
individually or by its attorney or agent) and thereby agree to be bound by the
terms hereof as a Limited Partner.
12.2 Admission of Substituted Limited Partners.
(a) A Limited Partner or Assignee shall have the power to give the
transferee of such Person's Units the right to seek admission as a Substituted
Limited Partner subject to the conditions of and in the manner permitted under
this Agreement. By transfer of a Unit, the transferor is deemed to have given
the transferee the right to seek admission as a Substituted Limited Partner
subject to the conditions of and manner permitted under this Agreement. A
transferor of a Certificate shall only have the authority to convey to a
purchaser or other transferee who does not execute and deliver the Transfer
Application, however, (i) the right to negotiate such Unit to a purchaser or
other transferee and (ii) the right to transfer the right to request admission
as a Substituted Limited Partner to such purchaser or other transferee in
respect of the transferred Units. Each transferee of a Unit (including any
Person, such as a broker, dealer, bank, trust company, clearing corporation,
other nominee holder or an agent of any of the foregoing, acquiring such Unit
for the account of another Person) shall apply to become a Substituted Limited
Partner with respect to Units transferred to such Person by executing and
delivering a Transfer Application at the time of such transfer. Such transferee
shall become a Substituted Limited Partner at such time as the General Partner
consents thereto, which
consent may be given or withheld in the General Partner's sole discretion, and
when any such admission is shown on the books and records of the Partnership. If
such consent is withheld, such transferee shall continue to be an Assignee. An
Assignee shall have an interest in the Partnership equivalent to that of a
Limited Partner with respect to allocations and distributions, including
liquidating distributions of the Partnership. With respect to voting rights
attributable to Units that are held by Assignees, the General Partner shall be
deemed to be the Limited Partner with respect thereto and shall, in exercising
the voting rights in respect of such Units on any matter, vote such Units at the
written direction of the Assignee. If no such written direction is received,
such Units will not be voted. An Assignee shall have no other rights of a
Limited Partner. The General Partner shall be deemed to have given its consent
to the admission of a transferee as a Substituted Limited Partner, and such
admission shall be effective, at and from the close of business on the Business
Day on which a properly executed Transfer Application is received by the
Transfer Agent unless the General Partner notifies the Transfer Agent to the
contrary prior to the close of business on the day of the receipt of the
Transfer Application.
(b) The admission of an Assignee as a Substituted Limited Partner shall
be effected without the consent of any of the Partners other than the General
Partner.
12.3 Admission of Additional Limited Partners. A Person (other than an
Initial Limited Partner) who makes a Capital Contribution to the Partnership
shall be admitted to the Partnership as an Additional Limited Partner upon
furnishing to the General Partner (a) acceptance, in form satisfactory to the
General Partner, of all the terms and conditions of this Agreement, including,
without limitation, the power of attorney granted in Section 1.4, and (b) such
other documents or instruments as may be required in order to effect his
admission as a Limited Partner, and such admission shall become effective on the
date that the General Partner determines in its sole discretion that such
conditions have been satisfied and when any such admission is shown on the books
and records of the Partnership. The admission of Additional Limited Partners
shall be effected without the consent of any of the Partners other than the
General Partner.
12.4 Admission of Successor General Partner. A successor General Partner
selected pursuant to Section 13.1 or the transferee of or successor to the all
or any part of the Partnership Interest of the General Partner pursuant to
Section 11.2(a) or (b) who is proposed to be admitted as a General Partner shall
be admitted to the Partnership as a General Partner, effective immediately prior
to the withdrawal or removal of the General Partner pursuant to Section 13.1 or
the transfer pursuant to Section 11.2; provided, however, that no such
withdrawal or removal can occur, and no such successor shall be admitted to the
Partnership, until the successor has complied with Section 1l.2(a)(ii). Any such
successor shall carry on the business of the Partnership.
12.5 Amendment of Agreement and of Certificate of Limited Partnership. For
the admission to the Partnership of any successor General Partner, the General
Partner shall take all steps necessary and appropriate to prepare and file as
soon as practicable an amendment of this Agreement and, if required by law, the
Certificate of Limited Partnership and may for this purpose exercise the power
of attorney granted pursuant to Section 1.4. Each Limited Partner
consents to the admission of each successor General Partner effected pursuant to
the terms of this Agreement.
ARTICLE XIII
WITHDRAWAL OR REMOVAL OF PARTNERS
13.1 Withdrawal or Removal of General Partner.
(a) The General Partner covenants and agrees that it will not withdraw as
the General Partner of the Partnership before December 31, 1997, subject to its
right to transfer its Partnership Interest as General Partner pursuant to
Sections 11.2(a) or 11.2(b) to an Affiliate of the General Partner or transferee
that assumes the rights and duties of the General Partner under this Agreement.
Except for transfers permitted by Section 11.2(b), any transfer by the General
Partner of all of its Partnership interest as the General Partner pursuant to
Section 11.2(a) shall constitute the withdrawal of the General Partner for
purposes of this Section 13.1(a). The withdrawal of the General Partner shall
also constitute the withdrawal of the general partner of the Operating
Partnership. If the General Partner gives a notice of withdrawal, a Majority
Interest may, prior to the effective date of such withdrawal, elect a successor
General Partner. The Person so elected shall automatically become the successor
general partner of the Operating Partnership. If no successor General Partner is
elected, the Partnership shall be dissolved pursuant to Section 14.1. If a
successor General Partner is elected, it shall be admitted immediately prior to
the withdrawal of the General Partner and shall continue the business and
operations of the Partnership without dissolution.
(b) The General Partner may be removed only upon the affirmative vote or
approval of owners of at least 75% of the Percentage Interests of the Limited
Partners, exclusive of any such Percentage interests held by the General Partner
or any Affiliate thereof. Any such action for removal of the General Partner
must also provide for the election of a new General Partner. Such removal shall
be effective immediately subsequent to the admission of the successor General
Partner pursuant to Article XII. The removal of the General Partner shall also
constitute the removal of the general partner of the Operating Partnership, as
provided in the Operating Partnership Agreement. The Person elected as successor
General Partner shall automatically become the successor general partner of the
Operating Partnership. The right to remove the General Partner shall not exist
or be exercised unless the Partnership has received an Opinion of Counsel that
the removal of the General Partner and the selection of a successor General
Partner will not result in the loss of limited liability of any Limited Partner
or of the limited partner of the Operating Partnership or the treatment of the
Partnership or the Operating Partnership as an association taxable as a
corporation for federal income tax purposes. Any successor General Partner shall
carry on the business of the Partnership.
13.2 Interest of Departing Partner and Successor.
(a) The Departing Partner shall, at the option of its successor
exercisable prior to the effective date of the departure of such Departing
Partner, promptly receive from its successor in
exchange for its Partnership Interest as the General Partner, an amount in cash
equal to the fair market value of the Departing Partner's Partnership Interest
as the General Partner herein, determined as of the effective date of its
departure. If the successor to a Departing Partner exercises its option to
acquire the Partnership Interest as the General Partner of the Departing
Partner, it must also acquire at such time the partnership interest of the
Departing Partner as the general partner of the Operating Partnership, for an
amount in cash equal to the fair market value of such interest, determined as of
the effective date of its departure. If the option is exercised, the Departing
Partner shall, as of the effective date of its departure, cease to share in any
allocations or distributions with respect to its Partnership Interest as the
General Partner. For purposes of this Section 13.2, the fair market value of the
Departing Partner's Partnership Interest as the General Partner and of its
partnership interest as the general partner of the Operating Partnership shall
be determined by agreement between the Departing Partner and its successor or,
failing agreement within 30 days after the effective date of such Departing
Partner's departure, by an independent investment banking firm or other
independent expert selected by the Departing Partner and its successor, which,
in turn, may rely on other experts and the determination of which shall be
conclusive as to such matter. If such parties cannot agree upon one independent
investment banking firm or other independent expert within 45 days after the
effective date of such departure, then such firm shall be designated by the
independent investment banking firm or other independent expert selected by each
of the Departing Partner and its successor. In making its determination, such
independent investment banking firm or other independent expert shall consider
the Unit Price, the value of the Partnership's assets, the rights and
obligations of such General Partner and any other factor or factors it may deem
relevant.
(b) If the successor to a Departing Partner does not exercise the option
described in Section 13.2(a), the Partnership Interest of the Departing Partner
as the General Partner of the Partnership and the partnership interest of such
Departing Partner as the general partner of the Operating Partnership shall be
converted as follows:
(i) The Departing Partner shall become a Limited Partner, and its
Partnership Interest as the General Partner shall be converted into Units,
without any reduction in such Partnership Interest (subject to proportionate
dilution by reason of the admission of its successor). The number of Units into
which the Partnership Interest of such Departing Partner shall be converted
shall be equal to the number of Units outstanding immediately before the
effective date of its departure multiplied by a fraction, the numerator of which
is such Departing Partner's Percentage Interest as the General Partner
(immediately before such departure) and the denominator of which is the
aggregate Percentage Interest (immediately before such departure) of all Limited
Partners and Assignees (immediately before such departure).
(ii) If the partnership interest not acquired is that of a Departing
Partner as a general partner of the Operating Partnership, the limited
partnership interest into which such interest is converted pursuant to the
Operating Partnership Agreement shall he contributed by such Departing Partner
to the capital of the Partnership, such Departing Partner shall become a Limited
Partner in the Partnership and the Partnership shall issue to such Departing
Partner the number of Units equal to the product of the number of Units
outstanding immediately prior to the effective date of its departure (but after
giving effect to the conversions, if any, described in
Sections 13.2(b)(i) and (b)(ii)) multiplied by a fraction, the numerator of
which is such Departing Partner's percentage interest under the Operating
Partnership Agreement (immediately before such departure) and the denominator of
which is the aggregate percentage interest of all limited partners of the
Operating Partnership (immediately before such departure) under the Operating
Partnership Agreement.
This Agreement shall be amended to reflect any event described in Sections
13.2(b)(i) or (ii), and any successor General Partner covenants so to amend.
(c) If the successor to a Departing Partner does not exercise the option
described in Section 13.2(a) above, the successor shall at the effective date of
its admission to the Partnership contribute to the capital of the Partnership
cash or property having a Net Agreed Value such that its Capital Account, after
giving effect to such contribution, shall be equal to that percentage of the
Capital Accounts of all Partners that is equal to its Percentage Interest as the
General Partner. In such event, such successor shall be entitled to such
Percentage Interest, as the case may be, of all Partnership allocations and
distributions.
13.3 Withdrawal of Limited Partners. No Limited Partner shall have any
right to withdraw from the Partnership; provided, however, when a transferee of
a Limited Partner's or Assignee's Units becomes a Record Holder, such Limited
Partner or Assignee shall cease to be a Limited Partner or Assignee with respect
to the Units so transferred, but until such transferee becomes a Record Holder,
such transferor shall continue to be the Record Holder with respect to the Units
transferred. No Limited Partner shall be entitled to receive any distribution
from the Partnership for any reason or upon any event except as expressly set
forth in Articles V and XIV.
ARTICLE XIV
DISSOLUTION AND LIQUIDATION
14.1 Dissolution. The Partnership shall not be dissolved by the admission
of Additional Limited Partners or Substituted Limited Partners or by the
admission of additional General Partners or substituted General Partners in
accordance with the terms of this Agreement. The Partnership shall dissolve, and
its affairs shall be wound up, upon:
(a) the expiration of its term as provided in Section 1.5;
(b) the withdrawal or removal of the General Partner, or any event that
results in its ceasing to be the General Partner (other than by reason of a
transfer pursuant to Section 11.2 or withdrawal or removal following selection
by a Majority Interest of a successor pursuant to Section 13.1);
(c) an election to dissolve the Partnership by the General Partner that
is approved by the affirmative vote of a Majority Interest;
(d) the bankruptcy or the dissolution of the General Partner;
(e) a written determination by the General Partner that projected future
revenues of the Partnership will be insufficient to enable payment of projected
costs and expenses. or, if sufficient, will be such that continued operation of
the Partnership is not in the best interests of the Partners; or
(f) a Terminating Capital Transaction;
provided, however, that the Partnership shall not be dissolved upon an event
described in Section 14.1(b), (d) or (e) if within 90 days after such event, all
Partners agree in writing to continue the business of the Partnership and to the
appointment of a successor General Partner.
For purposes of this Section 14.1, bankruptcy of the General Partner shall
be deemed to have occurred when (u) it commences a voluntary proceeding, or
files an answer in any involuntary proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency or other similar
law now or hereafter in effect, (v) it is adjudged a bankrupt or insolvent, or
has entered against it a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect, (w) it
executes and delivers a general assignment for the benefit of its creditors, (x)
it files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it in any proceeding of the
nature described in clause (u) above, (y) it seeks, consents to or acquiesces in
the appointment of a trustee, receiver or liquidator for it or for all or any
substantial part of its properties, or (z)(1) any proceeding of the nature
described in clause (u) above has not been dismissed 120 days after the
commencement thereof, (2) the appointment without its consent or acquiescence of
a trustee, receiver or liquidator appointed pursuant to clause (y) above has not
been vacated or stayed within 90 days after such appointment, or (3) such
appointment is not vacated within 90 days after the expiration of any such stay.
14.2 Continuation of the Business of the Partnership after Dissolution.
Upon dissolution of the Partnership in accordance with Section 14.1(b), (d), or
(e), and a failure of all Partners to agree to continue the business of the
Partnership and appoint a successor General Partner as provided in Section 14.1,
then within an additional 90 days, a Majority Interest may elect to reconstitute
the Partnership and continue its business on the same terms and conditions set
forth in this Agreement by forming a new partnership on terms identical to those
set forth in this Agreement and having as a general partner a Person elected by
a Majority Interest. Upon any such election by a Majority Interest, all Partners
shall be bound thereby and shall be deemed to have consented thereto. Unless
such an election is made within 180 days after dissolution, the Partnership
shall conduct only activities necessary to wind up its affairs. If such an
election is made within 180 days after dissolution, then:
(a) the reconstituted Partnership shall continue until. the end of the
term set forth in Section 1.5 unless earlier dissolved in accordance with this
Article XIV;
(b) if the successor general partner is not the former General Partner,
then the interest of the former General Partner shall be treated thenceforth as
the interest of a Limited Partner and converted into Units in the manner
provided in Section 13.2(b)(i); and
(c) all necessary steps shall be taken to cancel this Agreement and the
Certificate of Limited Partnership and to enter into a new partnership agreement
and certificate of limited partnership, and the successor general partner may
for this purpose exercise the powers of attorney granted the General Partner
pursuant to Section 1.4;
provided that the right of a Majority Interest to select a successor general
partner and to reconstitute and to continue the business of the Partnership
shall not exist and may not be exercised unless the Partnership has received an
Opinion of Counsel that (x) the exercise of the right would not result in the
loss of limited liability of any Limited Partner and (y) neither the Partnership
nor the reconstituted Partnership would be treated as an association taxable as
a corporation for federal income tax purposes upon the exercise of such right to
continue (unless the Partnership is already treated as a corporation in all
material respects due to changes in federal income tax laws).
14.3 Liquidation. Upon dissolution of the Partnership, unless the
Partnership is continued under an election to reconstitute and continue the
Partnership pursuant to Section 14.2, the General Partner, or, in the event the
General Partner has been dissolved or removed, become bankrupt as defined in
Section 14.1 or withdrawn from the Partnership, a liquidator or liquidating
committee approved by a Majority Interest, shall be the Liquidator. The
Liquidator (if other than the General Partner) shall be entitled to receive such
compensation for its services as may be approved by a Majority Interest. The
Liquidator shall agree not to resign at any time without 15 days' prior written
notice and (if other than the General Partner) may be removed at any time, with
or without cause, by notice of removal approved by a Majority Interest. Upon
dissolution, removal or resignation of the Liquidator, a successor and
substitute Liquidator (who shall have and succeed to all rights, powers and
duties of the original Liquidator) shall within 30 days thereafter be approved
by a Majority Interest. The right to approve a successor or substitute
Liquidator in the manner provided herein shall be recurring and continuing for
so long as the functions and services of the Liquidator are authorized to
continue under the provisions hereof, and every reference herein. to the
Liquidator shall be deemed to refer also to any such successor or substitute
Liquidator approved in the manner herein provided. Except as expressly provided
in this Article XIV, the Liquidator approved in the manner provided herein shall
have and may exercise, without further authorization or approval of any of the
parties hereto, all of the powers conferred upon the General Partner under the
terms of this Agreement (but subject to all of the applicable limitations,
contractual and otherwise, upon the exercise of such powers, other than the
limitation on sale set forth in Section 16.1(a)) to the extent necessary or
desirable in the good faith judgment of the Liquidator to carry out the duties
and functions of the Liquidator hereunder for and during such period of time as
shall be reasonably required in the good faith judgment of the Liquidator to
complete the winding up and liquidation of the Partnership as provided for
herein. The General Partner or the Liquidator shall liquidate the assets of the
Partnership, and apply and distribute the proceeds of such liquidation in the
following order of priority, unless otherwise required by mandatory provisions
of applicable law:
(a) the payment to creditors of the Partnership, including Partners, in
order of priority provided by law; and the creation of a reserve of cash or
other assets of the Partnership for contingent liabilities in an amount, if any,
determined by the General Partner or the Liquidator to be appropriate for such
purposes;
(b) to the Partners in proportion to and to the extent of the positive
balances in their respective Capital Accounts.
The distribution to the Partners as provided in sub-section (b) above shall
be made by the end of the year of liquidation or, if later, within ninety (90)
days after the date of such liquidation (within the meaning of Treasury
Regulation Section 1.704-1 (b)(2) (ii) (b)(2)).
14.4 Distribution in Kind. Notwithstanding the provisions of Section 14.3
which require the liquidation of the assets of the Partnership, but subject to
the order of priorities set forth therein, if upon dissolution of the
Partnership the General Partner or the Liquidator determines that an immediate
sale of part or all of the Partnership's assets would be impractical or would
cause undue loss to the Partners, the General Partner or the Liquidator may, in
its absolute discretion, defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of the Partnership (other
than those to Partners) and/or may. in its absolute discretion, distribute to
the Partners, in lieu of cash, as tenants in common and in accordance with the
provisions of Sections 14.3(b), undivided interests in such Partnership assets
as the General Partner or the Liquidator deems not suitable for liquidation. Any
such distributions in kind shall be subject to such conditions relating to the
disposition and management of such properties as the General Partner or the
Liquidator deems reasonable and equitable and to any agreements governing the
management and/or operation of such properties at such time. The General Partner
or the Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
14.5 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership property as provided in Sections
14.3 and 14.4, the Partnership shall be terminated, and the Liquidator (or the
General Partner or Limited Partners if necessary) shall cause the cancellation
of the Certificate of Limited Partnership and all qualifications of the
Partnership as a foreign limited partnership in jurisdictions other than the
State of Delaware and shall take such other actions as may be necessary to
terminate the Partnership.
14.6 Reasonable Time for Winding Up. A reasonable time shall be allowed
for the orderly winding up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 14.3 in order to minimize any
losses otherwise attendant upon such winding up.
14.7 Return of Capital No General Partner shall be personally liable for
the return of the Capital Contributions of the Limited Partners, or any portion
thereof, it being expressly understood that any such return shall be made solely
from Partnership assets.
14.8 Capital Account Restoration. No Limited Partner shall have any
obligation to restore any negative balance in its Capital Account upon
liquidation of the Partnership. Upon the dissolution and termination of the
Partnership, the General Partner will contribute to the Partnership an amount
equal to the lesser of: (i) the deficit balance in its capital account, if any,
or (ii) the excess of 1.01% of the total Capital Contributions of all Limited
Partners over the capital previously contributed, if any, by the General Partner
attributable to its interest as General Partner.
14.9 Waiver of Partition. Each Partner hereby waives any right to
partition of the Partnership property.
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT: MEETINGS, RECORD DATE
15.1 Amendment to be Adopted Solely by General Partner. The General
Partner (pursuant to its powers of attorney from the Partners), without the
approval of any Limited Partner or Assignee, may amend any provision of this
Agreement, and execute, swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect:
(a) a change in the name of the Partnership or the location of the
principal place of business of the Partnership (or a change in any trade names,
trademarks, or service marks of the Partnership);
(b) admission, substitution or termination of Partners in accordance with
this Agreement;
(c) a change that the General Partner in its sole discretion has determined
to be reasonable and necessary or appropriate to qualify or continue the
qualification of the Partnership as a limited partnership or a partnership in
which the Limited Partners have limited liability under the laws of any state or
that is necessary or advisable in the opinion of the General Partner to ensure,
to the degree practicable, that the Partnership will not be treated as an
association taxable as a corporation for federal income tax purposes;
(d) a change (i) that in the sole discretion of the General Partner does
not adversely affect the Limited Partners in any material respect, (ii) that is
necessary or desirable to satisfy any requirements, conditions or guidelines
contained in any opinion, directive, order, ruling or regulation of any federal
or state agency or judicial authority or contained in any federal or state
statute or that is necessary or desirable to facilitate the trading of the Units
(including, without limitation, the division of Outstanding Units into different
classes in order to facilitate uniformity of tax consequences within such
classes of Units) or comply with any rule, regulation, guideline or requirement
of any securities exchange on which the Units are or will be listed for trading,
compliance with any of which the General Partner deems to be in the best
interests of the Partnership and the Limited Partners, or (iii) that is required
or contemplated by this Agreement;
(e) an amendment that is necessary, in the Opinion of Counsel to the
Partnership, to prevent the Partnership or the General Partner or its directors
or officers from in any manner being subjected to the provisions of the
Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940,
as amended, or "plan asset" regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, whether or not substantially similar to
plan asset regulations currently applied or proposed by the United States
Department of Labor;
(f) an amendment that in the sole discretion of the General Partner is
necessary or desirable in connection with the authorization for issuance or
issuance of any class or series of Units pursuant to Section 4.2(a),
(g) the use of depositary units to represent Class A Units or any other
class of Units or securities of the Partnership;
(h) any amendment permitted pursuant to Section 5.2(h) herein; or
(i) any other amendments similar to the foregoing.
15.2 Amendment Procedures. Except as provided in Sections 15.1 and 15.3,
all amendments to this Agreement shall be made in accordance with the following
requirements:
(a) amendments of this Agreement may be proposed:
(i) by the General Partner, by submitting the text of the amendment to
all Limited Partners in writing; or
(ii) by Limited Partners owning at least 10% of the Percentage
Interests owned by Limited Partners, by submitting their proposal in writing to
the General Partner. The General Partner shall, within 60 days after the receipt
of any such proposal or as soon thereafter as is reasonably practicable, submit
the text of the proposed amendment to all Limited Partners. The General Partner
may include in such submission its recommendation as to the proposed amendment.
(b) if an amendment is proposed, the General Partner shall seek the written
approval of the requisite Percentage Interests or call a meeting of the Partners
to consider and vote on the proposed amendment unless, in the Opinion of
Counsel, such proposed amendment would cause the Partnership or the Operating
Partnership to cease being treated as a partnership for federal income tax
purposes. A proposed amendment shall be effective upon its adoption by the
written approval of the requisite Percentage Interests (within a reasonable
period of time as specified in the submission) or the affirmative vote of a
Majority Interest unless a greater percentage is required by this Agreement. The
General Partner shall notify all Partners upon final adoption of any proposed
amendment.
15.3 Amendment Requirements.
(a) Notwithstanding the provisions of Sections 15.1 and 15.2, no provision
of this Agreement which establishes a Percentage Interest required to take any
action shall be amended, altered, changed, repealed or rescinded in any respect
which would have the effect of reducing such voting requirement, unless such is
approved by written approval or the affirmative vote of Partners whose aggregate
Percentage Interests constitute not less than the voting requirement sought to
be reduced. This Section 15.3(a) shall only be amended with the approval by
written approval or affirmative vote of Partners whose aggregate Percentage
Interests constitute at least 75% of the aggregate Percentage Interests of the
Partners; provided, however, that no duty or obligation of the General Partner
can be increased or right diminished without the consent of the General Partner.
(b) The voting requirements in this Section 15.3 shall be in addition to
voting requirements imposed by other provisions contained herein.
15.4 Meetings. All acts of Limited Partners to be taken hereunder shall be
taken in the manner provided in this Article XV. Except as provided in Section
15.2, meetings of the Partners maybe called by the General Partner or by Limited
Partners owning at least 20% of the aggregate Percentage Interests of the
Partners. Any Limited Partner calling a meeting shall specify the number of
Units as to which the Limited Partner is exercising the right to call a meeting
and only those specified Units shall be counted for the purpose of determining
whether the required 20% standard of the preceding sentence has been met.
Limited Partners shall call a meeting by delivering to the General Partner one
or more calls in writing stating that the signing Limited Partners wish to call
a meeting and indicating the general or specific purposes for which the meeting
is to be called. Within 60 days after receipt of such a call from Limited
Partners or within such greater time as may be reasonably necessary for the
Partnership to comply with any statutes, rules, regulations, listing agreements
or similar requirements governing the holding of a meeting or the solicitation
of proxies for use at such a meeting, the General Partner shall send a notice of
the meeting to the Partners either directly or indirectly through the Transfer
Agent. A meeting shall he held at a time and place determined by the General
Partner on a date not more than 60 days after the mailing of notice of the
meeting. Limited Partners shall not vote on matters that would cause the Limited
Partners to be deemed to be taking part in the management and control of the
business and affairs of the Partnership so as to subject the Limited Partners to
unlimited liability.
15.5 Notice of a Meeting. Notice or a meeting called pursuant to Section
15.4 shall be given to the Partners in writing either personally or by mail or
other means of written communication in accordance with Section 18.1. The notice
shall be deemed to have been given at the time when delivered personally or
deposited in the mail or sent by other means of written communication.
15.6 Record Date. For purposes of determining the Partners entitled to
notice of or to vote at a meeting of the Partners or to give approvals without a
meeting as provided in Section 15.11, the General Partner may set a Record Date,
which shall not be less than 10 days nor more
than 60 days before the date of the meeting (unless such requirement conflicts
with any rule, regulation, guideline or requirement of any stock exchange on
which the Units are listed for trading, in which case the rule, regulation,
guideline or requirement of such stock exchange shall govern).
15.7 Adjournment. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting and a new Record Date need not
be fixed, if the time and place thereof are announced at the meeting at which
the adjournment is taken, unless such adjournment shall be for more than 60
days. At the adjourned meeting, the Partnership may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than 60 days or if a new Record Date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given in accordance with this Article
XV.
15.8 Waiver of Notice; Approval of Meeting; Approval of Minutes. The
transactions of any meeting of Partners, however called and noticed, and
whenever held, are as valid as though had at a meeting duly held after regular
call and notice, if a quorum is present either in person or by proxy, and if,
either before or after the meeting, each of the Limited Partners entitled to
vote, not present in person or by proxy, signs a written waiver of notice or a
approval of the holding of the meeting or an approval of the minutes thereof.
All waivers, consents and approvals shall be filed with the Partnership records
or made a part of the minutes of the meeting. Attendance of a Partner at a
meeting shall constitute a waiver of notice of the meeting, except when the
Partner objects, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened; and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required to be included in the notice of the meeting,
but not so included, if the objection is expressly made at the meeting.
15.9 Quorum. A Majority Interest represented in person or by proxy shall
constitute a quorum at a meeting of Partners. Notwithstanding anything elsewhere
provided in this Agreement to the contrary, the Limited Partners shall be
entitled to vote on, consent to or approve of matters only as provided in
Sections 4.3, 11.2, 12.4, 13.1, 14.1, 14.2, 14.3, 15.2, 15.3, 15.4, 15.11 and
16.1 and as submitted to them by the General Partner. At any meeting of the
Partners duly called and held in accordance with this Agreement at which a
quorum is present, the act of Limited Partners whose Percentage Interests
constitute a majority of the Percentage Interests represented in person or by
proxy at such meeting and entitled to vote thereat shall be deemed to constitute
the act of all Limited Partners, unless a higher percentage is required with
respect to such action under the provisions of this Agreement, in which ease the
act of the Partners owning such higher percentage shall be required. The
Partners present at a duly called or held meeting at which a quorum is present
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Partners to leave less than a quorum, if any action taken
(other than adjournment) is approved by the requisite percentage of interests of
Partners specified in this Agreement. In the absence of a quorum, any meeting of
Partners may be adjourned from time to time by the affirmative vote of a
majority of the Percentage Interests represented either in person or by proxy,
but no other business may be transacted, except as provided in Section 15.7.
15.10 Conduct of Meeting. The General Partner shall have full power and
authority concerning the manner of conducting any meeting of the Partners or
solicitation of consents in writing, including, without limitation, the
determination of any Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of Section 15.4, the conduct of voting, the
validity and effect of any proxies, and the determination of any controversies,
votes or challenges arising in connection with or during the meeting or voting.
The General Partner shall designate a Person to serve as chairman of any meeting
and shall further designate a Person to take the minutes of any meeting, in
either case including, without limitation, a Partner or a director or officer of
the General Partner. MI minutes shall be kept with the records of the
Partnership maintained by the General Partner. The General Partner may make such
other regulations consistent with applicable law and this Agreement as it may
deem advisable concerning the conduct of any meeting of the Partners or
solicitation of consents in writing, including regulations in regard to the
appointment of proxies, the appointment and duties of inspectors of votes and
consents, the submission and examination of proxies and other evidence of the
right to vote, and the revocation of consents in writing.
15.11 Action Without a Meeting. Any action that may be taken at a meeting
of the Partners maybe taken without a meeting if an approval in writing setting
forth the action so taken is signed by Partners owning not less than the minimum
Percentage Interests that would be necessary to authorize or take such action at
a meeting at which all the Partners were present and voted. Prompt notice of the
taking of action without a meeting shall be given to the Limited Partners who
have not approved in writing. The General Partner may specify that any written
ballot submitted to Partners for the purpose of taking any action without a
meeting shall be returned to the Partnership within the time, not less than 20
days, specified by the General Partner. If a ballot returned to the Partnership
does not vote all of the Units held by the Partner, the Partnership shall be
deemed to have failed to receive a ballot for the Units which were not voted. If
approval to the taking of any action by the Partners is solicited by any Person
other than by or on behalf of the General Partner, the written approval shall
have no force and effect unless and until (a) they are deposited with the
Partnership in care of the General Partner, (b) approvals sufficient to take the
action proposed are dated as of a date not more than 90 days prior to the date
sufficient approvals are deposited with the Partnership, and (c) an Opinion of
Counsel is delivered to the General Partner to the effect that the exercise of
such right and the action proposed to be taken with respect to any particular
matter (i) will not cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as
to subject the Limited Partners to unlimited liability, (ii) will not jeopardize
the status of the Partnership as a partnership under applicable tax laws and
regulations, and (iii) is otherwise permissible under the state statutes then
governing the rights, duties and liabilities of the Partnership and the
Partners.
15.12 Voting Rights.
(a) Only those Record Holders of Units on the Record Date set pursuant to
Section 15.6 shall be entitled to notice of, and, subject to Section 12.2(a), to
vote at, a meeting of Partners or to act with respect to matters as to which
consents are solicited. With respect to voting rights attributable to Units that
are held by Assignees, the General Partner shall be deemed
to be the Limited Partner with respect thereto and shall, in exercising the
voting rights in respect of Units on any matter, vote such Units at the
direction of the Assignee.
(b) With respect to Units that are held for a Person's account by
another Person (such as a broker, dealer, bank, trust company or clearing
corporation, or an agent of any of the foregoing), in whose name such Units arc
registered, such broker, dealer or other agent shall, in exercising the voting
rights in respect of such Units on any matter, and unless the arrangement
between such Persons provides otherwise, vote such Units in favor of and at the
direction of the Person on whose behalf such broker, denier or other agent is
holding such Units, and the Partnership shall be entitled to assume it is so
acting without further inquiry. The provisions of this Section 15.12(b) (as well
as all other provisions of this Agreement) are subject to the provisions of
Section 10.3.
(c) A General Partner that is also a Limited Partner may vote its
Percentage Interests, including such Percentage Interests represented by Units,
on any matter submitted to the Partners for consideration in such manner as it
in its sole discretion shall determine.
(d) The Class A Units and Class B Units have equal voting rights and
shall vote as a single class on all matters voted upon by the Limited Partners.
15.13 Reorganization of the Partnership into a Corporation.
Notwithstanding any other provision of this Article XV, if legislation is
passed, or if effective Treasury Department regulations are adopted, which would
have the effect of reclassifying the Partnership as an association taxable as a
corporation for federal income tax purposes, or if for any other reason the
Partnership is treated as an association taxable as a corporation for federal
income tax purposes, the General Partner may, at its sore discretion and without
the consent or approval of any other Partner, take whatever action it deems
necessary, including the reorganization of the Partnership into a newly-
organized corporation or other legal entity formed for such purpose, in whatever
manner and by whatever method the General Partner determines in its sole
discretion; provided, however, that such action shall not result in any material
additional adverse tax consequences directly or indirectly to the Limited
Partners or Assignees other than those resulting from a change in federal law.
ARTICLE XVI
PROHIBITIONS AND LIMITATIONS
16.1 General Prohibitions. Without the prior approval of a Majority
Interest, the General Partner shall not:
(a) sell or exchange all or substantially all of the assets of the
Partnership in a single transaction or a series of related transactions or cause
the Partnership to merge with, or into any entity (other than the Operating
Partnership); or
(b) acting on behalf of the Partnership:
(i) consent to amendments to the Operating Partnership Agreement that
would adversely affect the Partnership as the limited partner of the Operating
Partnership in any material respect;
(ii) except as expressly permitted in Section 11.2(b), elect a
successor general partner of the Operating Partnership;
(iii) consent to the sale of all or substantially all of the assets
of the Operating Partnership in a single transaction, a series of related
transactions or pursuant to a plan of liquidation (except as expressly provided
otherwise in the Operating Partnership Agreement); or
(iv) except as expressly permitted in Section 6.11(c), take any
action required by the Operating Partnership Agreement to be taken by the
limited partner of the Operating Partnership.
ARTICLE XVII
RIGHT TO PURCHASE UNITS
17.1 Right to Acquire Units.
(a) Notwithstanding the provisions of Section 13.1(a) or any other
provision of this Agreement, in the event less than 10% of the Outstanding Units
are held by Persons other than the General Partner and its Affiliates, the
General Partner shall then have the right, which right it may assign and
transfer to the any Affiliate of the General Partner (other than the
Partnership), exercisable in its sole discretion, to purchase all, but not less
than all, of the Units that remain outstanding and held by Persons other than
the General Partner and its Affiliates, at the Purchase Price.
(b) In the event the General Partner or any Affiliate of the General
Partner elects to exercise such right to purchase Units pursuant to
Section 17.1(a), the General Partner shall mail, or cause the Transfer Agent to
mail, written notice of such election to purchase (hereinafter in this Section
17.1 called the "Notice of Election to Purchase") to the Record Holders of Units
at least 10, but not more than 60, days prior to the Purchase Date. The Notice
of Election to Purchase shall specify the Purchase Date and the Purchase Price
and state that the General Partner or its Affiliate, as the case may be, elects
to purchase such Units, upon surrender thereof in exchange for payment, at such
office or offices of an exchange agent (which may be the Transfer Agent unless
the General Partner is the Transfer Agent) as the General Partner may specify,
or as may be required by any National Securities Exchange on which the Units are
listed or admitted to trading. Any such Notice of Election to Purchase mailed to
a Record Holder of Units at his address as reflected in the records of the
Transfer Agent, shall be conclusively presumed to have been given whether or not
the owner receives such notice. On or prior to the Purchase Date, the General
Partner or its Affiliate, as the case may be, shall deposit with the exchange
agent cash in an amount equal to the Purchase Funds. If the Notice of Election
to
Purchase shall have been duly given as aforesaid at least ten days prior to
the Purchase Date, and if on or prior to the Purchase Date the Purchase Funds
shall have been deposited with the exchange agent in trust for the benefit of
the holders of Units subject to purchase as provided herein, then from and after
the Purchase Date, notwithstanding that any Units or any Certificate for Units
shall not have been surrendered for purchase, all rights of the holders of such
Units (including, without limitation, any rights pursuant to Articles IV, V and
XIV) shall thereupon cease, except the right to receive the Purchase Price
therefor, without interest, upon surrender to the exchange agent of the
Certificates representing Units, and such Units shall thereupon be deemed to be
transferred to the General Partner or its Affiliate, as the case may be, on the
record books of the Transfer Agent and the Partnership. and the General Partner
or any Affiliate of the General Partner, as the case may be, shall be deemed to
be the owner of all such Units (including, without limitation, all rights as
owner of such Units pursuant to Articles IV, V and XIV).
(c) At any time from and after the Purchase Date, a holder of an Outstanding
Unit subject to purchase as provided in this Section 17.1 may surrender his
Certificate evidencing such Unit to the exchange agent in exchange for
payment of the Purchase Price therefor, without interest thereon.
ARTICLE XVIII
GENERAL PROVISIONS
18.1 Addresses and Notices. Any notice, demand, request or report required
or permitted to be given or made to a Partner under this Agreement shall he in
writing and shall be deemed given or made when delivered in person or when sent
by first class mail or by other means of written communication to the Partner at
the address described below. Any notice, payment or report to be given or sent
to a Partner hereunder shall be deemed conclusively to have been given or sent,
and the obligation to give such notice or report or to make such payment shall
be deemed conclusively to have been fully satisfied, upon mailing of such
notice, payment or report to (a) in the case of a Unit, the Record Holder of
such Unit at his address as shown on the records of the Transfer Agent or the
Partnership or (b) in the case of the General Partner, to such Person at his
address set forth in Section 1.3 or as otherwise shown on the records of the
Partnership, regardless of any claim of any Person who may have an interest in
such Unit or Units or the Partnership Interest of the General Partner by reason
of an assignment or otherwise. An affidavit or certificate of mailing of any
notice, payment or report in accordance with the provisions of this Section 18.1
executed by the General Partner, the Transfer Agent, the registrar of Units or
the mailing organization shall be prima facie evidence of the giving or sending
of such notice, payment or report. If any notice, payment or report addressed to
a Record Holder at the address of such Record Holder appearing on the books of
the Transfer Agent or the Partnership is returned by the United States Postal
Service marked to indicate that the United States Postal Service is unable to
deliver it, such notice, payment or report and any subsequent notices, payment
and reports shall be deemed to have been duly given or sent without further
mailing (until such time as such Record Holder or another Person notifies the
Transfer Agent or the Partnership of a change in his address) if they are
available for the Limited Partner or Assignee at the principal office of the
Partnership for a period of one year from the date of the
giving or sending of such notice, payment or report to the other Limited
Partners and Assignees. Any notice to the Partnership shall be deemed given if
received by the General Partner at the principal office of the Partnership
designated pursuant to Section 1.3. The Partnership and the General Partner may
rely and shall be protected in relying on any notice or other document from a
Partner or other Person if believed by them to be genuine.
18.2 Titles and Captions. All article or section titles or captions in
this Agreement are for convenience only and in no way define, limit, extend or
describe the scope or intent of any provisions hereof. Except as specifically
provided otherwise, references to "Articles" and "Sections" are to Articles and
Sections of this Agreement.
18.3 Pronouns and Plurals. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
18.4 Further Action. The parties shall execute and deliver all documents,
provide all information and take or refrain from taking action as may be
necessary or appropriate to achieve the purposes of this Agreement.
18.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.
18.6 Integration. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.
18.7 Creditors. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the Partnership.
18.8 Waiver. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
18.9 Counterparts. This agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto or, in the case of a Person acquiring a Unit,
upon executing and delivering a Transfer Application as herein described,
independently of the signature of any other party.
18.10 Applicable Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
18.11 Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
18.12 Consent of Limited Partners. Each Limited Partner hereby expressly
consents and agrees that, whenever in this Agreement it is specified that an
action may be taken upon the affirmative vote or approval of less than all of
the Limited Partners, such action may be so taken upon the concurrence of less
than all of the Limited Partners and each Limited Partner shall be bound by the
results of such action.
18.13 Force Majeure. If the General Partner is rendered unable, wholly or
in part, by force majeure to carry out its obligations under this Agreement, the
obligations of the General Partner, so far as they are affected by such force
majeure, shall be suspended during, but no longer than, the continuance of such
force majeure. The General Partner shall use all reasonable diligence to remedy
such force majeure as quickly as possible. The requirement that any force
majeure shall he remedied with all reasonable dispatch shall not require the
settlement of strikes, lockouts or other labor difficulty by the General
Partner, contrary to its wishes, and all such difficulties shall be handled
entirely at the discretion of the General Partner. The term "force majeure" as
used herein shall mean an act of God, strike, lockout or other industrial
disturbance, act of public enemy, war, blockade, public riot, lightning, fire,
storm, flood, explosion. governmental restraint, unavailability of equipment and
any other cause, whether of the kind specifically enumerated above or otherwise,
which is not reasonably within the control of the General Partner.
Dated: May , 1987
GENERAL PARTNER:
FFP PARTNERS MANAGEMENT
COMPANY, INC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By:
-----------------------------------
ORGANIZATIONAL LIMITED PARTNER
LIMITED PARTNERS:
All Limited Partners now and hereafter admitted as
limited partners of the Partnership, pursuant to
Powers of Attorney now and hereafter executed in
favor of, and delivered to, the General Partner
By FFP PARTNERS MANAGEMENT
COMPANY, INC.
By:
--------------------------------
FIRST AMENDMENT
TO
AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
FFP PARTNERS, L.P.
First Amendment, dated as of August 14, 1989 (the "Amendment"), of the
Amended and Restated Agreement of Limited Partnership (the "Partnership
Agreement") of FFP Partners, L.P. (the "Partnership").
The Partnership was formed by the filing of a certificate of limited
partnership with the Secretary of State of Delaware on December 31, 1986. The
Partnership Agreement was amended and restated in its entirety on May 21, 1987.
The general partner, acting on behalf of itself and the limited partners
pursuant to the power of attorney contained in the Partnership Agreement, now
desires to further amend the Partnership Agreement as follows:
1. The definition of "Limited Partner" in Article II is amended to read as
follows:
"Limited Partner" means any Person who is a Limited Partner of the
Partnership, including a Class A Limited Partner, a Class B Limited Partner and
a Rights Unit Limited Partner, but not including the Organizational Limited
Partner (i.e., each Initial Limited Partner, each Substituted Limited Partner,
each Additional Limited Partner and any Departing Partner on the conversion of
its Partnership Interest or its interest in the Operating Partnership into Units
pursuant to Section 3.2), and shown as a Limited Partner on the books and
records of the Partnership; a Limited Partner may be designated as a "Class A
Limited Partner," "Class B Limited Partner" or "Rights Unit Limited Partner"
depending on the class of Units such Limited Partner holds, and for the purposes
of determining allocations and distributions under Articles V and XIV, an
Assignee.
2. Article II of the Partnership Agreement is further amended by the
addition of the following definitions:
"Rights" mean the Rights issued under and defined in the Rights Agreement.
"Rights Agreement" means that certain Rights Agreement dated as of August
14, 1989 between the Partnership and NCNB Texas National Bank, a national
banking association, as it may be amended, supplemented or restated from time to
time.
"Rights Unit" means the Unit issued upon the exercise of Rights issued
pursuant to the Rights Agreement, and having preferences, powers, rights and
duties identical to the Class A Units except that, for purposes of Section
5.3(a)-(e), during the Subordination Period (or, if later, during the fiscal
year with respect to which any Deficiency is eliminated by cash distributions),
the Rights Units shall have the same rights, be subject to the same restrictions
and be treated as Class B Units, and except, in either case, as provided by this
Agreement.
"Rights Unit Limited Partner" has the meaning specified in the definition
of "Limited Partner" above in this Article II.
3. Section 4.1(c) is amended to read as follows:
(c) Any Capital Contribution required of the General Partner pursuant to
Section 4.1(b) may be accomplished by the redesignation of Capital Contributions
with respect to Units owned by the General Partner as Capital Contributions with
respect to its Partnership Interest as General Partner, whereupon the General
Partner shall be deemed to have surrendered to the Partnership those Units, and
shall deliver to the Transfer Agent for cancellation those Units, the Capital
Contributions with respect to which have thus been redesignated. For purposes of
any such redesignation, the Net Agreed Value of Capital Contributions with
respect to Units shall, for each Unit being surrendered, be (i) the cash
consideration per Unit that is received by the Partnership upon the issuance of
any Units of such class solely in exchange for cash in the transaction that
gives rise to the requirement for the additional Capital Contribution of the
General Partner, or (ii) the Unit Price per Unit of such class as of a date
reasonably related to such redesignation in the event Units are issued at least
partially in exchange for consideration other than cash in the transaction that
gives rise to the requirement for the additional Capital Contribution of the
General Partner.
4. Section 4.1(d) is amended to read as follows:
(d) In connection with making any required general partner's capital
contributions to the Operating Partnership pursuant to Article IV of the
Operating Partnership Agreement, the General Partner may tender to the
Partnership any Units it owns in exchange for a portion of the Partnership's 99%
interest in the Operating Partnership. In such event, the General Partner shall
be deemed to have surrendered any such Units to the Partnership for
cancellation. Upon the tender of such Units, the Partnership shall distribute to
the General Partner 99% of an interest as
a limited partner in the Operating Partnership that bears the same ratio to the
entire limited partner interest in the Operating Partnership as the aggregate
Unit Price of the tendered Units bears to the aggregate Unit Price of all
classes of Outstanding Units, as determined immediately prior to the date of
tender.
5. Section 4.2 is amended by the addition of paragraph (e) as follows:
(e) Upon exercise of Rights, the holders of such Rights shall contribute
to the Partnership in cash, as provided by the Rights Agreement, the Purchase
Price for each Rights Unit to be purchased multiplied by the number of Rights
Units with respect to which such Rights are then being exercised.
6. Section 4.5(d)(i) is amended to read as follows:
(d) (i) Consistent with the provisions of Treasury Regulation Section
1.704-l(b)(2)(iv)(f), upon an issuance of additional Units for cash or
Contributed Property pursuant to Section 4.3, the Capital Accounts of all
Partners and the Carrying Values of all Partnership properties shall,
immediately prior to such issuance, be adjusted (consistent with the provisions
hereof) upwards or downwards to reflect any Unrealized Gain or Unrealized Loss
attributable to each Partnership property (as if such Unrealized Gain or
Unrealized Loss had been recognized in an actual Terminating Capital
Transaction, immediately prior to such issuance, and had been allocated to the
Partners, at such time, pursuant to Section 5.1). In determining such Unrealized
Gain or Unrealized Loss occasioned by an issuance of an outstanding class of
Units or from a constructive termination of the Partnership pursuant to Section
708 of the Code, the aggregate fair market value of Partnership properties as of
any date of determination shall be equal to the Prescribed Asset Value of all
classes of Units Outstanding as of such date. In determining such Unrealized
Gain or Unrealized Loss occasioned by the issuance of a new class of Units, the
aggregate fair market value of Partnership properties as of any date of
determination shall be determined by the General Partner using such reasonable
method of valuation as it may adopt. The Carrying Values of the respective
Partnership properties shall be adjusted according to their relative fair market
values, as determined by the General Partner using such method as it deems
appropriate.
7. Section 5.l(a)(i)(A) is amended to read as follows:
(A) First, Operating Income in an amount up to the aggregate amount of cash
distributed pursuant to Sections 5.3(c)(i) and (ii) and 5.3(d)(i)(A) to the
Partners with respect to the quarterly periods within such fiscal year shall be
allocated among the General Partner and holders of Class A Units, Class B Units
and Rights Units in the same proportion that the General Partner and holders of
such classes shared in such cash distributions, with the Operating Income
allocated among the holders of Class A Units, Class B Units and Rights Units in
accordance with their respective Class Percentage Interests; and
8. Section 5.1(d) is amended to read as follows:
(d) To preserve uniformity of Units of a class, the General Partner shall
have sole discretion in conjunction with Section 5.2(h)(ii) to make special
allocations of income or deduction. The General Partner may make such
allocations only if such allocations would not have a material adverse effect on
the Limited Partners and if they are consistent with, and supportable under, the
principles of Section 704 of the Code.
Dated as of the date first above written.
GENERAL PARTNER:
FFP PARTNERS MANAGEMENT
COMPANY, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
LIMITED PARTNERS:
All Limited Partners now and
hereafter admitted as limited
partners of the Partnership,
pursuant to Powers of Attorney
now and hereafter executed in
favor of, and delivered to, the
General Partner.
By: FFP PARTNERS MANAGEMENT
COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SECOND AMENDMENT TO
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
FFP PARTNERS, LP.
Second Amendment to Amended and Restated Agreement of Limited Partnership
of FFP Partners, L.P. (the "Partnership"), entered into by and among FFP
Partners Management Company, Inc., a Delaware corporation, as the General
Partner, and the Limited Partners of the Partnership as reflected on the records
of the Partnership.
RECITALS
The Partnership was formed by the filing of a certificate of limited
partnership with the Secretary of State of Delaware on December 31, 1986. The
agreement of limited partnership of the Partnership was amended and restated on
May 21, 1987, and further amended by the First Amendment to Amended and Restated
Agreement of Limited Partnership dated August 14, 1989, and as it currently
exists, is referred to in this amendment as the "Partnership Agreement."
Section 6.8(b) of the Partnership Agreement currently prohibits the
Partnership from lending funds to the General Partner or any Affiliate thereof.
To comply with Texas law, the General Partner has determined that the sale
of alcoholic beverages at the stores owned indirectly by the Partnership in
Texas should be made by a corporation owned by an individual Texas resident. The
General Partner has determined that it is in the Partnership's best interest
that these sales be made by Nu-Way Beverage Company, a Texas corporation owned
by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
The Partnership has been advised by legal counsel that the alcoholic
beverage inventory should be owned and the sales be made solely by Nu-Way
Beverage Company, with the Partnership receiving a benefit from the sales
pursuant to certain agreements between Nu-Way Beverage Company and the
Partnership or an Affiliated Partnership, as defined in the Partnership
Agreement.
Because the sales benefit the Partnership, the General Partner has
determined that it is in the best interest of the Partnership for the
Partnership or an Affiliated Partnership to lend to Nu-Way Beverage Company the
funds necessary to purchase and maintain its inventory of alcoholic beverages to
be sold in the Partnership's stores.
The General Partner, acting on behalf of itself and on behalf of the
Limited Partners pursuant to the power of attorney contained in Section 1.4 of
the Partnership Agreement, therefore desires to amend the Amended and Restated
Agreement of Limited Partnership pursuant to Section 15.1(d) thereof and has
determined that this amendment does not adversely affect the Limited Partners in
any material respect.
NOW, THEREFORE, the Partnership Agreement is amended by replacing the last
sentence of Section 6.8(b) with the following:
The Partnership may not lend funds to the General Partner or any Affiliate
thereof; provided, however, that the Partnership or an Affiliated Partnership
may lend funds to an Affiliate of the General Partner for the purchase of
alcoholic beverages to be
sold at stores operated by the Partnership or an Affiliated Partnership if the
loan is, in the sole judgment of the General Partner, reasonably secured by a
security interest in the alcoholic beverages purchased by the Affiliate with the
funds loaned, and if, in the sole judgment of the General Partner, the sales
benefit the Partnership or an Affiliated Partnership though agreements with the
Affiliate or otherwise.
EXECUTED as of the 12th day of July, 1991.
GENERAL PARTNER:
FFP PARTNERS MANAGEMENT
COMPANY, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
LIMITED PARTNERS:
All Limited Partners now and
hereafter admitted as limited
partners of the Partnership,
pursuant to the power of attorney
contained in Section 1.4 of the
Partnership Agreement.
FFP PARTNERS MANAGEMENT
COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President