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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 24, 1999
WALDEN RESIDENTIAL PROPERTIES, INC.
(Exact name of Registrant as specified in its Charter)
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Maryland 1-12592 75-2506197
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification Number)
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5080 Spectrum Drive, Suite 1000 E, Dallas, Texas 75248
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 788-0510
Not applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
As previously announced, Walden Residential Properties, Inc. (the
"Company"), Oly Hightop Corporation, a Maryland corporation ("Newco"), and Oly
Hightop Parent, L.P., a Delaware limited partnership ("Parent"), have entered
into an Agreement and Plan of Merger, dated as of September 24, 1999 (the
"Merger Agreement").
Pursuant to the Merger Agreement, the Company will be merged with and
into Newco with Newco as the surviving corporation (the "Merger"). If the
Merger is approved and adopted by the affirmative vote (the "Preferred Stock
Vote") of both (i) the holders of at least two-thirds of the outstanding shares
of 9.20% Senior Preferred Stock, par value $.01 per share ("Company Senior
Preferred Stock"), of the Company entitled to vote thereon and (ii) the holders
of at least two-thirds of the outstanding shares of 9.0% Redeemable Preferred
Stock, par value $.01 per share ("Company Redeemable Preferred Stock"), of the
Company entitled to vote thereon, then (a) each share of Company Senior
Preferred Stock issued and outstanding immediately prior to the Effective Time
will be converted into one of senior preferred limited partnership interest in
Parent, having the rights and preferences set forth in the Limited Partnership
Agreement of Parent, (b) each share of Company Redeemable Preferred Stock
issued and outstanding immediately prior to the Effective Time will be
converted into one unit of redeemable preferred limited partnership interest in
Parent, having the rights and preferences set forth in the Limited Partnership
Agreement of Parent, and (c) each holder of Company Senior Preferred Stock and
Company Redeemable Preferred Stock will become a limited partner of Parent.
If the Preferred Stock Vote is not obtained, then each share of
Company Senior Preferred Stock issued and outstanding immediately prior to the
Effective Time will be converted into one share of 9.20% Senior Preferred Stock
of Newco and each share of Company Redeemable Preferred Stock issued and
outstanding immediately prior to the Effective Time will be converted into one
share of 9.0% Redeemable Preferred Stock of Newco, in each case with rights and
preferences that are substantially identical to the existing rights and
preferences of such series of preferred stock.
A copy of the Limited Partnership Agreement of Parent is filed as an
exhibit to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
99.1 Limited Partnership Agreement of Oly Hightop Parent, L.P.,
dated as of September 22, 1999, among Oly Hightop
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Parent GP, LLC, as the general partner, and those persons
identified as limited partners on a schedule thereto
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 6, 1999
WALDEN RESIDENTIAL
PROPERTIES, INC.
By: /s/ Mark S. Dillinger
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Mark S. Dillinger
Executive Vice President and
Chief Financial Officer
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WALDEN RESIDENTIAL PROPERTIES, INC.
INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION PAGE
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99.1 Limited Partnership Agreement of Oly
Hightop Parent, L.P., dated as of
September 22, 1999, among Oly Hightop
Parent GP, LLC, as the general partner,
and those persons identified as limited
partners on a schedule thereto
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EXHIBIT 99.1
LIMITED PARTNERSHIP AGREEMENT
OF
OLY HIGHTOP PARENT, L.P.
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TABLE OF CONTENTS
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ARTICLE 1
DEFINED TERMS
1.1 Definitions.....................................................................................1
1.2 Construction...................................................................................13
ARTICLE 2
GENERAL PROVISIONS
2.1 Purpose........................................................................................13
2.2 Powers.........................................................................................14
2.3 Name...........................................................................................14
2.4 Names and Addresses of Partners................................................................14
2.5 Place of Business..............................................................................14
2.6 Additional Filings.............................................................................14
2.7 Ownership......................................................................................14
2.8 No Partner Responsible for Other Partner's Commitments.........................................14
2.9 Term...........................................................................................14
2.10 Registered Office; Registered Agent............................................................14
ARTICLE 3
CAPITAL CONTRIBUTIONS
3.1 Capital Contributions..........................................................................15
3.2 Admission of Additional Limited Partners.......................................................15
3.3 Return of Capital..............................................................................16
3.4 Interest on Capital Contributions..............................................................16
3.5 No Preemptive Rights...........................................................................16
ARTICLE 4
ACCOUNTING; BOOKS AND RECORDS; TAX MATTERS
4.1 Books and Records..............................................................................17
4.2 Bank Accounts..................................................................................17
4.3 Reports........................................................................................17
4.4 Preparation of Tax Returns.....................................................................17
4.5 Tax Elections..................................................................................17
4.6 Tax Matters Partner............................................................................17
4.7 Certain Elections..............................................................................19
4.8 Capital Accounts...............................................................................19
ARTICLE 5
DISTRIBUTIONS; ALLOCATIONS
5.1 Requirement and Characterization of Distributions..............................................19
5.2 Distributions Upon Liquidation.................................................................21
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5.3 Allocations of Income, Profits and Losses......................................................21
5.4 Special Allocations............................................................................23
5.5 Curative Allocations...........................................................................24
5.6 Loss Limitation................................................................................25
5.7 Tax Allocations: Code Section 704(c)..........................................................25
5.8 Other Allocation Rules.........................................................................25
ARTICLE 6
STATUS OF LIMITED PARTNERS
6.1 Participation in Management....................................................................26
6.2 Limited Liability..............................................................................26
6.3 Outside Activities of Limited Partners.........................................................26
6.4 Rights of Limited Partners Relating to the Partnership.........................................26
ARTICLE 7
MANAGEMENT AND OPERATION OF BUSINESS
7.1 Authority of the General Partner...............................................................27
7.2 Issuances of Additional Partnership Interests..................................................29
7.3 Amendment of Agreement and Certificate of Limited Partnership..................................30
7.4 Compensation of General Partner or Affiliates..................................................30
7.5 Expenses.......................................................................................30
7.6 Indemnification................................................................................31
7.7 Liability of the General Partner...............................................................32
7.8 Compliance with Law............................................................................33
7.9 Outside Activities of General Partner..........................................................33
ARTICLE 8
TRANSFERS OF INTERESTS IN AND
WITHDRAWALS FROM THE PARTNERSHIP
8.1 Transfer.......................................................................................33
8.2 Transfer of General Partner's Partnership Interest.............................................34
8.3 Limited Partners' Rights to Transfer...........................................................34
8.4 Substituted Limited Partners...................................................................34
8.5 Assignees......................................................................................35
8.6 General Provisions.............................................................................35
8.7 Admission of Successor General Partner.........................................................36
8.8 Put Option.....................................................................................36
ARTICLE 9
SPECIAL MATTERS CONCERNING SENIOR PREFERRED UNITS
9.1 Designation of Class...........................................................................37
9.2 Redemption.....................................................................................37
9.3 Voting Rights..................................................................................39
9.4 Ranking........................................................................................40
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ARTICLE 10
SPECIAL MATTERS CONCERNING REDEEMABLE PREFERRED UNITS
10.1 Designation of Class...........................................................................40
10.2 Redemption.....................................................................................40
10.3 Voting Rights..................................................................................42
10.4 Ranking........................................................................................43
ARTICLE 11
DISSOLUTION
11.1 Dissolution Events.............................................................................44
11.2 Winding Up.....................................................................................45
11.3 Timing; Negative Capital Accounts..............................................................47
11.4 Deemed Distribution and Recontribution.........................................................47
11.5 Rights of Partners.............................................................................47
11.6 Notice of Dissolution..........................................................................47
11.7 Termination of Partnership and Cancellation of Certificate of Limited Partnership..............47
11.8 Reasonable Time for Winding-Up.................................................................48
11.9 Waiver of Partition............................................................................48
ARTICLE 12
POWER OF ATTORNEY
12.1 Power of Attorney..............................................................................48
12.2 Duration of Power..............................................................................49
ARTICLE 13
MISCELLANEOUS
13.1 Amendments.....................................................................................50
13.2 Meetings of the Partners.......................................................................51
13.3 Complete Agreement.............................................................................52
13.4 Governing Law..................................................................................52
13.5 Binding Effect.................................................................................52
13.6 Headings.......................................................................................52
13.7 Severability...................................................................................52
13.8 Multiple Counterparts; Facsimile Signatures....................................................52
13.9 Execution of Documents.........................................................................52
13.10 Reliance on Authority..........................................................................53
13.11 No Third Party Beneficiary.....................................................................53
13.12 References to this Agreement...................................................................53
13.13 Notices........................................................................................53
13.14 Title to Partnership Property..................................................................53
13.15 Reliance on Authority of Person Signing Agreement..............................................54
13.16 Waiver.........................................................................................54
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LIMITED PARTNERSHIP AGREEMENT
OF
OLY HIGHTOP PARENT, L.P.
This Limited Partnership Agreement (this "Agreement") of OLY HIGHTOP
PARENT, L.P., a Delaware limited partnership (the "Partnership"), is made and
entered into as of this 22nd day of September, 1999, by and among Oly Hightop
Parent GP, LLC, as the general partner (the "General Partner"), and those
parties identified as Limited Partners on a schedule (the "Ownership Schedule")
prepared by the General Partner in accordance with this Agreement (the "Limited
Partners").
ARTICLE 1
DEFINED TERMS
1.1 Definitions. When used in this Agreement, the following terms will
have the meanings set forth below.
"ACT" means the Delaware Revised Uniform Limited Partnership
Act, as amended from time to time.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 3.2 hereof and who is shown
as such on the books and records of the Partnership.
"ADJUSTED CAPITAL ACCOUNT" means the Capital Account
maintained for each Partner as of the end of each Fiscal Year (i) increased by
any amounts that such Partner is obligated to restore pursuant to any provision
of this Agreement or is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
(ii) increased by such Partner's allocable share (as determined under Section
752 of the Code) of any nonrecourse indebtedness of the Partnership to the
extent that such indebtedness could not be repaid out of the Partnership's
assets if all of the Partnership's assets were sold at their respective Gross
Asset Values as of the end of the Fiscal Year and the proceeds from the sales
were used to pay the Partnership's liabilities, and (iii) decreased by the items
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition
of Adjusted Capital Account is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Adjusted Capital Account
as of the end of the relevant Fiscal Year.
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"AFFILIATE" or "AFFILIATED" means, as to any Person, any other
Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "affiliated," "controlling" and
"controlled" have the meanings correlative to the foregoing. In the case of an
individual, the term "Affiliate" shall include (i) any lineal descendants of
such individual and the spouse of such individual or of such descendants, (ii)
any trusts controlled by, or established and maintained for the benefit of,
individuals included in (i) above, and (iii) the estate of any of the foregoing.
In the case of an estate, trust, or partnership, the term "Affiliate" shall
include any beneficiary or partner thereof.
"AGGREGATE REDEEMABLE PREFERRED UNITS" means the total
outstanding Redeemable Preferred Units as of the Transaction Effective Date. The
total number of outstanding Redeemable Preferred Units at the Transaction
Effective Date shall be equal to the total number of shares of outstanding
Company Redeemable Preferred Stock immediately prior to the Transaction. The
amount of Aggregate Redeemable Preferred Units shall be appropriately adjusted,
from time to time, to reflect any increases or reductions in the amount of
Redeemable Preferred Units.
"AGGREGATE SENIOR PREFERRED UNITS" means the total outstanding
Senior Preferred Units as of the Transaction Effective Date. The total number of
outstanding Senior Preferred Units at the Transaction Effective Date shall be
equal to the total number of shares of outstanding Company Senior Preferred
Stock immediately prior to the Transaction. The amount of Aggregate Senior
Preferred Units shall be appropriately adjusted, from time to time, to reflect
any increases or reductions in the amount of Senior Preferred Units.
"AGREEMENT" has the meaning assigned to such term in the first
paragraph hereof.
"APPROVAL" and "APPROVE" means approval in writing.
"ASSIGNEE" means a Person to whom one or more Partnership
Interests have been transferred in a manner permitted under this Agreement, but
who has not become a Substituted Partner.
"AUTHORITY" means any governmental or quasi-governmental
authority, whether administrative, executive, judicial, legislative or other, or
any combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency or entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other entity of any of the foregoing, whether
domestic or foreign.
"BANKRUPTCY" means, with respect to any Partner, the first to
occur of (i) the entry of a decree or order for relief against the Partner by a
court of competent jurisdiction in any
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involuntary case brought against the Partner under any bankruptcy, insolvency or
other similar law (collectively, "DEBTOR RELIEF LAWS") generally affecting the
rights of creditors and relief of debtors now or hereafter in effect; (ii) the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar agent under applicable Debtor Relief Laws for the
Partner or for any substantial part of its assets or property; (iii) the
ordering of the winding up or liquidation of the Partner's affairs; (iv) the
filing of a petition in any such involuntary bankruptcy case, which petition
remains undismissed for a period of 180 days or which is not dismissed or
suspended pursuant to Section 305 of the Federal Bankruptcy Code (or any
corresponding provision of any future United States bankruptcy law); (v) the
commencement by the Partner of a voluntary case under any applicable Debtor
Relief Law now or hereafter in effect; (vi) the consent by the Partner to the
entry of an order for relief in an involuntary case under any such law or to the
appointment of or the taking of possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar agent under any applicable
Debtor Relief Laws for the Partner or for any substantial part of its assets or
property; (vii) the making by the Partner of any general assignment for the
benefit of its creditors; or (viii) the failure by the Partner generally to pay
its debts as such debts become due.
"BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York are authorized or required by
law to close.
"CAPITAL ACCOUNT" means, with respect to any Partner, the
capital account maintained for such Partner in accordance with the rules of
Section 1.704-1(b)(2)(iv) of the Regulations.
Subject to Section 1.704-1(b)(2)(iv) of the Regulations:
(i) To each Partner's Capital Account there shall be
credited such Partner's Capital Contribution (net of liabilities that
the Partnership is considered to assume or to take subject to under
Code Section 752) and such Partner's distributive share of Profits,
Income and any items in the nature of income or gain that are specially
allocated pursuant to Section 5.4 or Section 5.5 hereof.
(ii) To each Partner's Capital Account there shall be
debited the amount of cash and the Gross Asset Value of any property
distributed to such Partner pursuant to any provision of this Agreement
(net of liabilities that such Partner is considered to assume or to
take subject to under Code Section 752) and such Partner's distributive
share of Losses and any items in the nature of expenses or losses that
are specially allocated pursuant to Section 5.4 or Section 5.5 hereof.
(iii) After the Effective Date, in the event all or a
portion of a Partnership Interest is transferred in accordance with the
terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred
Partnership Interest.
The provisions of this Agreement relating to the maintenance of Capital Accounts
are intended to comply with Section 1.704-1(b) of the Regulations, and they
shall be interpreted and applied in a manner consistent with such Regulations.
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"CAPITAL CONTRIBUTION" means, with respect to any Partner, the
total amount of cash or the Gross Asset Value of other property contributed (or
deemed to have been contributed) to the Partnership with respect to the
Partnership Interest held by such Partner. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.
"CERTIFICATE" means the Certificate of Limited Partnership
filed in the office of the Delaware Secretary of State to form the Partnership,
as amended from time to time in accordance with the terms hereof and the Act.
"CLAIM" has the meaning assigned to such term in Section 7.6
hereof.
"CLASS" means a class of Partnership Interests distinguished
by a specific alphabetical or other designation.
"COMMON LIMITED PARTNER" means Oly Hightop Holding, L.P., a
Delaware limited partnership, or any other Person admitted pursuant to this
Agreement as a Common Limited Partner either in connection with the issuance of
a newly-created Common Unit or as a Substituted Partner with respect to any
transferred Common Unit (or any portion thereof), each for only so long as such
Person remains as a Common Limited Partner in accordance with this Agreement and
the Act.
"COMMON UNIT" means a Partnership Interest of a Common Limited
Partner.
"CODE" means the Internal Revenue Code of 1986, as amended and
in effect from time to time, and any successor statutory provisions thereto.
"COMPANY" means Walden Residential Properties, Inc., a
Maryland corporation or any successor thereto by way of merger, consolidation,
or transfer of all or substantially all of its assets, and any successors to
such successors by similar means.
"COMPANY REDEEMABLE PREFERRED STOCK" means the 9.0% Redeemable
Preferred Stock, par value $0.01 per share, of the Company.
"COMPANY SENIOR PREFERRED STOCK" means the 9.20% Senior
Preferred Stock, par value $0.01 per share, of the Company.
"DEBTOR RELIEF LAWS" has the meaning assigned to such term in
the definition of "Bankruptcy" set forth in this Article 1.
"DISTRIBUTABLE ASSETS" means the cash, securities and any
other assets of the Partnership available to the Partnership for distribution to
the Partners, as determined by the General Partner after payment or provision
for:
(i) all operating expenses including property taxes;
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(ii) all scheduled payments of principal, interest
and other charges due during any relevant period in respect of any
Partnership indebtedness;
(iii) all expenditures for capital improvements to
the Partnership assets or property;
(iv) all current liabilities (including, but not
limited to, trade payables and other accounts payable, security
deposits and property taxes payable); and
(v) Working Capital Reserves in such amounts as the
General Partner deems necessary or advisable.
"DISTRIBUTION" means a Senior Preferred Distribution or
Redeemable Preferred Distribution.
"DISTRIBUTION DATE" has the meaning assigned to such term in
Section 5.1(a) hereof.
"EFFECTIVE DATE" means the effective date of this Limited
Partnership Agreement.
"EXCESS WITHHOLDING AMOUNT" has the meaning assigned to such
term in Section 5.1(c) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1984, as
amended.
"FEDERAL SECURITIES ACT" means the Securities Act of 1933, as
amended.
"FISCAL QUARTER" means (i) the period commencing on the
Effective Date and ending on the last day of the calendar quarter in which the
Effective Date occurs, (ii) any subsequent three-month period commencing on each
January 1, April 1, July 1 and October 1, and (iii) any portion of a period
described in clause (ii) that ends on the date the liquidation of the
Partnership is completed.
"FISCAL YEAR" means (i) the period commencing on the Effective
Date and ending on December 31, 2000, (ii) any subsequent twelve-month period
commencing on January 1 and ending on December 31, or (iii) any portion of a
period described in clause (ii) that is considered a short taxable year of the
Partnership for federal income tax purposes.
"GENERAL PARTNER" means (i) Oly Hightop Parent GP, LLC, a
Texas limited liability company, and any other Person admitted pursuant to this
Agreement in the capacity of general partner of the Partnership, each for only
so long as such Person remains as a general partner in accordance with this
Agreement and the Act.
"GENERAL PARTNER INTEREST" means a Partnership Interest of a
General Partner.
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"GROSS ASSET VALUE" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as follows:
(i) As of the Effective Date, the Gross Asset Value of the
Partnership's assets shall be their gross fair market value, as
reasonably determined by the General Partner.
(ii) The initial Gross Asset Value of any asset contributed
(or deemed to have been contributed) by a Partner to the Partnership
shall be the gross fair market value of such asset, as determined by
the contributing Partner and the General Partner.
(iii) The Gross Asset Values of all Partnership assets shall
be adjusted to equal their respective gross fair market values, as
determined by the General Partner as of the following times: (A) the
acquisition of an additional Partnership Interest by any new or
existing Partner in exchange for more than a de minimis Capital
Contribution; (B) the distribution by the Partnership to a Partner of
more than a de minimis amount of property as consideration for an
Partnership Interest; and (C) the liquidation of the Partnership within
the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations.
(iv) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be adjusted to equal the gross fair
market value of such asset on the date of the distribution as
determined by the General Partner and the Partner receiving such
distributed asset.
(v) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 732(d), Code Section
734(b) or Code Section 743(b), but only to the extent that (x) such
adjustments are taken into account in determining Capital Accounts
pursuant to clause (vi) of the definition of "Profits" or "Losses" and
(y) an adjustment pursuant to clause (ii) immediately above is not
required in connection with the transaction.
"INCAPACITY" or "INCAPACITATED" means, (i) as to any Partner
who is a natural Person, death, total physical disability or entry by a court of
competent jurisdiction adjudicating such Partner incompetent to manage such
Partner's estate; (ii) as to any corporation that is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or revocation
of its charter; (iii) as to any partnership that is a Partner, the dissolution
of such partnership; (iv) as to any estate that is a Partner, the distribution
by the fiduciary of the estate's entire Partnership Interest in the Partnership;
(v) as to any trustee of a trust that is a Partner, the termination of the trust
(but not the substitution of a new trustee); or (vi) as to any Partner, the
Bankruptcy of such Partner.
"INCOME" means items of gross operating income of the
Partnership.
"INDEMNITEE" means (i) any Person made a party to a proceeding
by reason of such Person's status as (A) a Partner, (B) a director, officer,
shareholder, partner, member or employee of a Partner, or (C) any Affiliate of
any Person described in (A) or (B) hereof, and (ii) such other
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Persons (including Affiliates of the General Partner or the Partnership) as the
General Partner may designate from time to time (whether before or after the
event giving rise to potential liability).
"IRS" means the United States Internal Revenue Service or any
successor thereto.
"LAW" shall mean any (a) administrative, judicial, legislative
or other action, code, consent decree, constitution, decree, directive,
enactment, finding, guideline, law, injunction, interpretation, judgment, order,
ordinance, policy statement, proclamation, promulgation, regulation,
requirement, rule, rule of law, rule of public policy, settlement agreement,
statute, or writ of any Authority, domestic or foreign; (b) the common law, or
other legal or quasi-legal precedent; or (c) arbitrator's, mediator's or
referee's award, decision, finding or recommendation; including, in each such
case or instance, any interpretation, directive, guideline or request, whether
or not having the force of law including, in all cases, without limitation any
particular section, part or provision thereof.
"LIEN" shall mean any of the following: mortgage; lien
(statutory or other); or other security agreement, arrangement or interest;
hypothecation, pledge or other deposit arrangement; assignment; charge; levy;
executory seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention, voting agreement or other similar agreement, arrangement,
device or restriction; preemptive or similar right; the filing of any financial
statement under the Uniform Commercial Code or comparable law of any
jurisdiction; restriction or sale, transfer, assignment, disposition or other
alienation; or any option, equity, claim or right of or obligation to, any other
Person, of whatever kind and character.
"LIMITED PARTNER" means any Common Limited Partner, Senior
Preferred Limited Partner or Redeemable Preferred Limited Partner. To the extent
a General Partner is also a Limited Partner, the General Partner shall be
entitled to exercise all rights associated with its Limited Partner Interest
without regard to any duties or obligations imposed on the General Partner in
its capacity as a General Partner.
"LIMITED PARTNER INTEREST" means a Partnership Interest of a
Limited Partner.
"LIQUIDATING EVENT" has the meaning assigned to such term in
Section 11.1(b) hereof.
"LIQUIDATOR" has the meaning assigned to such term in Section
11.2 hereof.
"LOSSES" has the meaning assigned to such term in the
definition of "Profits" and "Losses" as set forth in this Article 1.
"MAJORITY IN INTEREST" means, with respect to any Partners
holding any series or Class of Partnership Interests, one or more Partners
holding such series or Class of Partnership
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Interests and owning more than 50% of the Percentage Interests owned by all
Partners holding that series or Class of Partnership Interests.
"NEWCO" means Oly Hightop Corporation, a Maryland corporation.
"NONRECOURSE DEDUCTIONS" has the meaning assigned to such term
in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions
for a Fiscal Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
"NONRECOURSE LIABILITY" has the meaning assigned to such term
in Regulations Section 1.752-1(a)(2).
"OWNERSHIP SCHEDULE" has the meaning assigned to such term in
the introductory paragraph hereof.
"PARTNER" means any General Partner or Limited Partner. If a
Partner transfers its Partnership Interest, such Person shall remain a Partner
in respect of such Partnership Interest until the transferee is admitted as a
Substituted Partner in respect of such Partnership Interest in accordance with
this Agreement and the Act, if ever.
"PARTNER MINIMUM GAIN" means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"PARTNER NONRECOURSE DEBT" has the meaning assigned to such
term in Regulations Section 1.704-2(b)(4).
"PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Fiscal Year shall be
determined in accordance the rules of Regulations Section 1.704-2(i)(2).
"PARTNERSHIP" has the meaning assigned to such term in the
first paragraph of this Agreement.
"PARTNERSHIP EXPENSES" has the meaning assigned to such term
in Section 7.5(b) hereof.
"PARTNERSHIP INTEREST" means an ownership interest in the
Partnership and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement and the Act,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement.
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"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in Partnership Minimum Gain, for a
Fiscal Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"PERCENTAGE INTEREST" means, as of the Effective Date, the
percentage set forth opposite each Partner's name in the Ownership Schedule
under the column captioned "Percentage Interest", as determined based on the
ratio of each Partner's respective Capital Account balance to the aggregate
Capital Account balances of all Partners, as amended from time to time pursuant
to Section 3.1.
"PERSON" means an individual or a corporation, partnership,
limited liability company, trust, unincorporated organization, joint stock
company, joint venture, association or other entity, or any government, or any
agency or political subdivision thereof.
"PROFITS" and "LOSSES" means, for each Fiscal Year, an amount
equal to the Partnership's taxable income or loss as reported on the
Partnership's U.S. Partnership Return of Income (Form 1065) for such Fiscal
Year, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(i) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in computing
Profits or Losses pursuant to this definition of "Profits" and "Losses"
shall be added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in
Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Section 1.704- 1(b)(2)(iv)(i) of the
Regulations, and not otherwise taken into account in computing Profits
and Losses shall be subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to clauses (iii) or (iv) of the
definition of Gross Asset Value, the amount of such adjustment shall be
taken into account as gain or loss from the disposition of such asset
for purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized
for federal income tax purposes shall be computed by reference to the
Gross Asset Value of the property disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value;
(v) The depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income
or loss shall be taken into account for such Fiscal Year in accordance
with Section 1.704-1(b)(2)(iv)(g) of the Regulations;
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(vi) To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b) is
required, pursuant to Section 1.704- 1(b)(2)(iv)(m)(4) of the
Regulations, to be taken into account in determining Capital Accounts
as a result of a distribution other than in liquidation of a Partner's
Partnership Interest, the amount of such adjustment shall be treated as
an item of gain (if the adjustment increases the basis of the asset) or
loss (if the adjustment decreases such basis) from the disposition of
such asset and shall be taken into account for purposes of computing
Profits or Losses; and
(vii) Notwithstanding any other provisions of this
definition, items of Income allocated pursuant to Section 5.3(a) hereof
and any items which are specially allocated pursuant to Section 5.4 or
Section 5.5 hereof shall not be taken into account in computing Profits
or Losses.
The amounts of the items of Partnership income, gain, loss or deduction
available to be specially allocated pursuant to Section 5.4 or Section 5.5
hereof shall be determined by applying rules analogous to those set forth in
clauses (i) through (vi) above.
"PUT LIMITED PARTNER" has the meaning assigned to such term in
Section 8.8 hereof.
"PUT OPTION" has the meaning assigned to such term in Section
8.8 hereof.
"PUT OPTION CLOSING DATE" has the meaning assigned to such
term in Section 8.8 hereof.
"PUT OPTION EXERCISE NOTICE" has the meaning assigned to such
term in Section 8.8 hereof.
"PUT OPTION EXERCISE PERIOD" has the meaning assigned to such
term in Section 8.8 hereof.
"PUT OPTION EXERCISE PRICE" has the meaning assigned to such
term in Section 8.8 hereof.
"PUT UNIT" has the meaning assigned to such term in Section
8.8 hereof.
"RECAPTURE INCOME" means any gain recognized by the
Partnership upon the disposition of any property or asset of the Partnership,
which gain is characterized as ordinary income because it represents the
recapture of deductions previously taken with respect to such property or asset.
"RECORD DATE", with respect to each distribution of
Distributable Assets pursuant to Section 5.1 hereof, means the date determined
by the General Partner which is at least 10 calendar days prior to the date of
distribution.
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"REDEEMABLE PREFERRED LIMITED PARTNER" means each Person who
received a Redeemable Preferred Unit in exchange for a share of Company
Redeemable Preferred Stock pursuant to the Transaction or any other Person
admitted pursuant to this Agreement as a Redeemable Preferred Limited Partner
either in connection with the issuance of a newly-created Redeemable Preferred
Unit or as a Substituted Partner with respect to any transferred Redeemable
Preferred Unit.
"REDEEMABLE PREFERRED REDEMPTION PRICE" has the meaning
assigned to such term in Section 10.2(a) hereof.
"REDEEMABLE PREFERRED REDEMPTION DATE" has the meaning
assigned to such term in Section 10.2(b) hereof.
"REDEEMABLE PREFERRED LIQUIDATION PREFERENCE" has the meaning
assigned to such term in Section 11.2(a)(iv) hereof.
"REDEEMABLE PREFERRED UNIT" means a Partnership Interest of a
Redeemable Preferred Limited Partner.
"REGULATIONS" means the Income Tax Regulations promulgated by
the United States Department of the Treasury, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
"REGULATORY ALLOCATIONS" has the meaning assigned to such term
in Section 5.5 hereof.
"SENIOR PREFERRED LIMITED PARTNER" means each Person who
received a Senior Preferred Unit in exchange for a share of Company Senior
Preferred Stock pursuant to the Transaction or any other Person admitted
pursuant to this Agreement as a Senior Preferred Limited Partner either in
connection with the issuance of a newly-created Senior Preferred Unit or as a
Substituted Partner with respect to any transferred Senior Preferred Unit.
"SENIOR PREFERRED REDEMPTION PRICE" has the meaning assigned
to such term in Section 9.2(a) hereof.
"SENIOR PREFERRED REDEMPTION DATE" has the meaning assigned to
such term in Section 9.2(b) hereof.
"SENIOR PREFERRED LIQUIDATION PREFERENCE" has the meaning
assigned to such term in Section 11.2(a)(iii) hereof.
"SENIOR PREFERRED UNIT" means a Partnership Interest of a
Senior Preferred Limited Partner.
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"STATE ACTS" has the meaning assigned to such term on the
cover page hereof.
"SUBSIDIARY" of any Person means (i) a corporation a majority
of whose outstanding shares of capital stock or other equity interests with
voting power, under ordinary circumstances, to elect directors, is at the time,
directly or indirectly, owned by such Person, by one or more subsidiaries of
such Person or by such Person and one or more subsidiaries of such Person, and
(ii) any other Person (other than a corporation) in which such Person, a
subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (x) at
least a majority ownership interest or (y) the power to elect or direct the
election of the directors or other governing body of such Person.
"SUBSTITUTED PARTNER" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 8.4 hereof.
"TAX MATTERS PARTNER" has the meaning assigned to such term in
Section 4.6 hereof.
"TERMINATING CAPITAL TRANSACTION" means any sale or other
disposition of all or substantially all of the assets of the Partnership or a
related series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership.
"TRANSACTION" means the merger of the Company with and into
Newco pursuant to the Walden Merger Agreement.
"TRANSACTION EFFECTIVE DATE" means the effective time of the
Transaction which shall occur upon the filing of the Articles of Merger
(prepared and executed in accordance with the relevant provisions of Title 8 of
the Corporations and Associations Article of the Annotated Code of Maryland and
the Maryland General Corporation Law) to evidence the Transaction with, and
acceptance for record of those Articles of Merger by, the State Department of
Assessments and Taxation of Maryland, or at such later time (but not to exceed
30 days after the Articles of Merger are accepted for record by the State of
Department of Assessments and Taxation of Maryland) specified in the Articles of
Merger.
"UNPAID DISTRIBUTION ACCOUNT" means an Unpaid Senior Preferred
Distribution Account or an Unpaid Redeemable Preferred Distribution Account, as
applicable.
"UNPAID REDEEMABLE PREFERRED DISTRIBUTION ACCOUNT" means an
account to be maintained by the Partnership for the Redeemable Preferred Limited
Partners and to which will be credited (i) for each full Fiscal Quarter the
product of (w) the Aggregate Redeemable Preferred Units, (x) $25.00, (y) 10% and
(z) a fraction, the numerator of which is 90 and the denominator of which is
360, and (ii) for each partial Fiscal Quarter the product of (w) the Aggregate
Redeemable Preferred Units, (x) $25.00, (y) 10% and (z) a fraction, the
numerator of which is the number of days from and including the immediately
preceding Distribution Date to, but not including, the current Distribution Date
and the denominator of which is 360; provided, however, that with respect to the
Fiscal Quarter that includes the Transaction Effective Date, the fraction
described in the second clause (z) above
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shall have a numerator which is the number of days from and including the
Transaction Effective Date to, but not including, the Distribution Date and a
denominator of 360, and from which will be debited the amount of any
Distributable Assets which are distributed pursuant to Section 5.1(a)(ii)(B)
hereof.
"UNPAID SENIOR PREFERRED DISTRIBUTION ACCOUNT" means an
account to be maintained by the Partnership for the Senior Preferred Limited
Partners and to which will be credited (i) for each full Fiscal Quarter the
product of (w) the Aggregate Senior Preferred Units, (x) $25.00, (y) 10% and (z)
a fraction, the numerator of which is 90 and the denominator of which is 360,
and (ii) for each partial Fiscal Quarter the product of (w) the Aggregate Senior
Preferred Units, (x) $25.00, (y) 10% and (z) a fraction, the numerator of which
is the number of days from and including the immediately preceding Distribution
Date to, but not including, the current Distribution Date and the denominator of
which is 360; provided, however, that with respect to the Fiscal Quarter that
includes the Transaction Effective Date, the fraction described in the second
clause (z) above shall have a numerator which is the number of days from and
including the Transaction Effective Date to, but not including, the Distribution
Date and a denominator of 360, and from which will be debited the amount of any
Distributable Assets which are distributed pursuant to Section
5.1(a)(i)(B)hereof.
"WALDEN MERGER AGREEMENT" means the Agreement and Plan of
Merger, dated as of September _______, 1999, among Walden Residential
Properties, Inc., Newco, and the Partnership.
"WORKING CAPITAL RESERVES" means the amount of reserves set
aside for the proper operation of the Partnership from time to time in the sole
discretion of the General Partner.
1.2 Construction. As used herein, the singular shall include the plural
and the masculine gender shall include the feminine and neuter, and vice versa,
as the context requires; words such as "herein," "hereinafter," "hereof,"
"hereto," "hereby" and "hereunder," when used with reference to this Agreement,
refer to this Agreement as a whole, unless the context otherwise requires.
ARTICLE 2
GENERAL PROVISIONS
2.1 Purpose. The purpose and nature of the business of the Partnership
is to invest in (either directly or through the acquisition of interests in
partnerships or other entities), purchase (either directly or through the
acquisition of interests in partnerships or other entities), develop, own,
manage, lease, finance and dispose of multi-family real estate properties and
any improvements thereon, enter into any partnership, joint venture, or similar
arrangement whose primary business is to engage in any of the foregoing, or to
own interests in any entity primarily engaged in any of the foregoing, and to do
anything necessary or appropriate to accomplish the foregoing.
2.2 Powers. The Partnership shall be empowered to do any and all acts
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership.
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2.3 Name. The name of the Partnership shall be Oly Hightop Parent, L.P.
The Partnership's business may be conducted under any other name or names
approved by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall furnish
written notification to the Limited Partners no later than 90 days after making
any such change.
2.4 Names and Addresses of Partners. The names and addresses of the
Partners are set forth in the books and records of the Partnership.
2.5 Place of Business. The principal place of business of the
Partnership shall be at 200 Crescent Court, Suite 1600, Dallas, Texas 75201. The
General Partner may change the place of business at any time and from time to
time by providing prompt notice to the Limited Partners. The Partnership also
may have such other offices or places of business as the General Partner
determines to be appropriate.
2.6 Additional Filings. The Partnership shall make any filings or
disclosures required by the laws of any other state with respect to the
qualification of the Partnership as a foreign limited partnership under the
internal laws of each such state.
2.7 Ownership. Unless otherwise required by applicable law, the
Partnership Interest of each Partner shall be treated as personal property for
all purposes.
2.8 No Partner Responsible for Other Partner's Commitments. The
Partnership shall not be responsible or liable for any indebtedness or
obligation of any Partner incurred, either before or after the execution of this
Agreement, in good faith in carrying out the purpose of the Partnership, or
hereafter undertaken or incurred on behalf of the Partnership under or pursuant
to the terms of this Agreement, or assumed in writing by the Partnership, and
the Partnership hereby indemnifies and agrees to hold the Partners harmless from
all such obligations and indebtedness.
2.9 Term. The Partnership shall continue until the dissolution of the
Partnership pursuant to the express provisions of Article 11 hereof or as
otherwise provided by Law.
2.10 Registered Office; Registered Agent. The initial registered office
and registered agent of the Partnership in the State of Delaware shall be as set
forth in the Certificate. The General Partner may from time to time change the
registered office and the registered agent. If the General Partner changes the
Partnership's registered office or agent (or if the General Partner is notified
of a change in the registered agent's office address), the General Partner shall
promptly notify each Limited Partner of any such change.
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ARTICLE 3
CAPITAL CONTRIBUTIONS
3.1 Capital Contributions. The General Partner shall prepare, as soon
as practicable following the Effective Date, the Ownership Schedule which shall
be included in the books and records of the Partnership maintained by the
General Partner and which shall reflect, as of the Effective Date, (A) the
number of Common Units owned by each Common Limited Partner, (B) the number of
Senior Preferred Units owned by each Senior Preferred Limited Partner, (C) the
number of Redeemable Preferred Units owned by each Redeemable Preferred Limited
Partner, (D) the Capital Account of each Partner and (E) the Percentage Interest
of each Partner, which Percentage Interest shall be adjusted in the Ownership
Schedule from time to time by the General Partner to the extent necessary to
reflect accurately redemptions, Capital Contributions, the issuance of
additional Partnership Interests, the transfer of Partnership Interests or
similar events having an effect on a Partner's Percentage Interest, including,
without limitation, the Transaction. The General Partner shall from time to time
make additional Capital Contributions to the Partnership to maintain the ratio
of the General Partner's and Limited Partners' Capital Contributions at 99.99%
to .01%. Except as provided in the foregoing sentence, the Partners shall have
no obligation to make any additional Capital Contributions or loans to the
Partnership.
3.2 Admission of Additional Limited Partners.
(a) If the Transaction is approved and adopted by the
affirmative vote of both (i) the holders of at least two-thirds of the
outstanding shares of Company Senior Preferred Stock entitled to vote thereon
and (ii) the holders of at least two-thirds of the outstanding shares of Company
Redeemable Preferred Stock entitled to vote thereon, voting as separate classes,
then, on the Transaction Effective Date, (A) the holders of Company Senior
Preferred Stock shall be admitted as Senior Preferred Limited Partners and shall
receive one Senior Preferred Unit for each share of Company Senior Preferred
Stock so held and (B) the holders of Company Redeemable Preferred Stock shall be
admitted as Redeemable Preferred Limited Partners and shall receive one
Redeemable Preferred Unit for each share of Company Redeemable Preferred Stock
so held, in each case, automatically and without any further action or Approval
of any Person, including the General Partner. The General Partner is authorized
and directed to (i) issue the Senior Preferred Units to the Senior Preferred
Limited Partners and the Redeemable Preferred Units to the Redeemable Preferred
Limited Partners and (ii) amend the Ownership Schedule to the extent necessary
to reflect the admission of the Senior Preferred Limited Partners and the
Redeemable Preferred Limited Partners on the Transaction Effective Date.
(b) After the Transaction Effective Date, a Person who makes a
Capital Contribution to the Partnership in accordance with this Agreement shall
be admitted to the Partnership as an "Additional Limited Partner" only upon
furnishing to the General Partner (i) a written agreement in form satisfactory
to the General Partner accepting all of the terms and conditions of this
Agreement, including, but not limited to, the power of attorney granted in
Section 12.2 hereof and (ii) such other documents or instruments as may be
required in the discretion of the General Partner in order to effect such
Person's admission as an Additional Limited Partner. The General
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Partner shall provide prompt notice to all Limited Partners of the admission to
the Partnership of an Additional Limited Partner.
(c) Notwithstanding anything to the contrary in this Section
3.2 and except as provided in Section 3.2(a), no Person shall be admitted as an
Additional Limited Partner without the consent of the General Partner, which
consent may be given or withheld in the General Partner's sole and absolute
discretion. Except as provided in Section 3.2(a), the admission of any Person as
an Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership as
being a Partner, following the consent of the General Partner to such admission.
(d) If any Additional Limited Partner is admitted to the
Partnership on any day other than the first day of a Fiscal Year, then Profits,
Losses, each item thereof and all other items allocable among Partners and
Assignees for such Fiscal Year shall be allocated among such Additional Limited
Partner and all other Partners and Assignees by taking into account their
varying interests during the Fiscal Year in accordance with Section 706(d) of
the Code, using any permissible method selected by the General Partner in its
sole discretion. Solely for purposes of making such allocations, each of such
items for the calendar month in which an admission of any Additional Limited
Partner occurs shall be allocated among all Partners and Assignees including
such Additional Limited Partner. All distributions of Distributable Assets with
respect to which the Record Date is before the date of such admission shall be
made solely to Partners and Assignees other than the Additional Limited Partner,
and all distributions of Distributable Assets thereafter shall be made to all
the Partners and Assignees including such Additional Limited Partners in
accordance with, and subject to the limitations of, this Agreement.
3.3 Return of Capital. No Partner shall have the right to demand or
receive the return of such Partner's Capital Contributions to the Partnership.
3.4 Interest on Capital Contributions. No Partner shall receive any
interest or amount computed like interest on such Partner's Capital
Contributions to the Partnership or such Partner's Capital Account,
notwithstanding any disproportion therein as between or among the Partners.
3.5 No Preemptive Rights. No Person shall have any preemptive,
preferential or other similar right with respect to (i) additional Capital
Contributions or loans to the Partnership or (ii) the issuance or sale of any
Partnership Interests.
ARTICLE 4
ACCOUNTING; BOOKS AND RECORDS; TAX MATTERS
4.1 Books and Records. The books and records of the Partnership shall,
at the cost and expense of the Partnership, be kept or caused to be kept on the
accrual method of accounting for financial and tax reporting purposes by the
General Partner (or such other Person as the General
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Partner may from time to time designate) at the principal place of business of
the Partnership. Such books and records shall be kept on the basis of the
Partnership's Fiscal Year.
4.2 Bank Accounts. All funds of the Partnership shall be deposited in
its name in an account or accounts maintained with such bank as is determined by
the General Partner. The funds of the Partnership shall not be commingled with
the funds of any other Person except to the extent that the General Partner
utilizes sweep accounts with respect to the properties and other real property
owned or managed by affiliates of the General Partner. Checks shall be drawn
upon the Partnership account or accounts only for the purposes of the
Partnership and shall be signed by the General Partner or such Person or Persons
as are authorized by the General Partner.
4.3 Reports. As soon as practicable, but in no event later than 120
days after the close of each calendar year, the General Partner shall cause to
be mailed to each Limited Partner as of the close of the calendar year summary
financial statements of the Partnership for such calendar year, presented in
accordance with generally accepted accounting principles.
4.4 Preparation of Tax Returns. The General Partner shall arrange for
the preparation and timely filing of all returns of Partnership income, gains,
deductions, losses and other items required of the Partnership for federal and
state income tax purposes and shall use all reasonable efforts to furnish to
each Limited Partner, within 60 days of the close of each taxable year, IRS Form
K-1, comparable state forms for the jurisdictions in which income-producing
property of the Partnership is located and any other tax information reasonably
required by Limited Partners for federal and state income tax reporting
purposes.
4.5 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole and absolute discretion, determine whether to make
any available election pursuant to the Code. The General Partner shall have the
right to seek to revoke any such election upon the General Partner's
determination in its sole and absolute discretion that such revocation is in the
best interests of the Partners.
4.6 Tax Matters Partner.
(a) The General Partner shall be the "Tax Matters Partner" of
the Partnership for federal income tax purposes. The General Partner will timely
notify the IRS as required of its designation as Tax Matters Partner. Pursuant
to Section 6230 of the Code, upon receipt of notice from the IRS of the
beginning of an administrative proceeding with respect to the Partnership, the
tax matters partner shall furnish the IRS with the name, address and profits
interest of each of the Limited Partners and the Assignees; provided, however,
that such information is provided to the Partnership by the Limited Partners and
the Assignees.
(b) Except as required by applicable Law, the Tax Matters
Partner shall not take any positions for federal income tax purposes contrary to
the intended federal income tax treatment of transactions, allocations, and
distributions described in, or made pursuant to, this Agreement. To
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the extent not inconsistent with the foregoing provisions, the Tax Matters
Partner is authorized, but not required:
(i) to enter into any settlement with the IRS
with respect to any administrative or
judicial proceedings for the adjustment of
Partnership items required to be taken into
account by a Partner for income tax
purposes, to seek judicial review of such
final adjustment, including the filing of a
petition for readjustment with the Tax Court
or the United States Claims Court, or the
filing of a complaint of for refund with the
District Court of the United States for the
district in which the Partnership's
principal place of business is located;
(ii) in the event that a notice of a final
administrative adjustment at the Partnership
level of any item required to be taken into
account by a Partner for tax purposes (a
"final adjustment") is mailed to the Tax
Matters Partner, to seek judicial review of
such final adjustment, including the filing
of a petition for readjustment with the Tax
Court or the United States Claims Court, or
the filing of a complaint for refund with
the District Court of the United States for
the district in which the Partnership's
principal place of business is located;
(iii) to intervene in any action brought by any
other Partner for judicial review of a final
adjustment;
(iv) to file a request or an administrative
adjustment with the IRS at any time and if
any part of such request is not allowed by
the IRS, to file an appropriate pleading
(petition or complaint) for judicial review
with respect to such request;
(v) to enter into an agreement with the IRS to
extend the period for assessing any tax
which is attributable to any item required
to be taken into account by a Partner for
tax purposes, or an item affected by such
item; and
(vi) to take any other action on behalf of the
Partners of the Partnership in connection
with any tax audit or judicial review
proceeding to the extent permitted by Law.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by Law, is a matter in the sole and absolute discretion of the Tax
Matters Partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.6 hereof shall be fully applicable to the Tax
Matters Partner in its capacity as such.
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(c) The Tax Matters Partner shall receive no compensation for
its services. All third party costs and expenses incurred by the Tax Matters
Partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne by the Partnership. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm or a law
firm to assist the Tax Matters Partner in discharging its duties hereunder, so
long as the compensation paid by the Partnership for such services is
reasonable.
4.7 Certain Elections. The Partnership shall elect to deduct expenses,
if any, incurred by it in organizing the Partnership ratably over a sixty-month
period as provided in Section 709 of the Code. In connection with the first
transfer of a Partnership Interest permitted under this Agreement, the General
Partner shall cause the Partnership, on behalf of the Partnership and at the
time and in the manner provided in Section 1.754-1(b) of the Regulations, to
make an election to adjust the basis of the Partnership's property in the manner
provided in Sections 734(b) and 743(b) of the Code.
4.8 Capital Accounts. As of the Effective Date, the Capital Accounts of
the Common Limited Partner and the General Partner shall be equal to 99.99% and
.01%, respectively, of the Gross Asset Value of the Partnership's assets, net of
Partnership liabilities. Upon the issuance of the Senior Preferred Units and the
Redeemable Preferred Units pursuant to the Transaction, the Capital Account
attributable to each Senior Preferred Unit and Redeemable Preferred Unit shall
be $25.00, and the Capital Accounts of the Common Limited Partner and the
General Partner shall be equal to 99.99% and .01%, respectively, of the
difference between (A) the Gross Asset Value of the Partnership's assets, net of
Partnership liabilities, as of the Transaction Effective Date, and (B) the
aggregate Capital Accounts attributable to the Senior Preferred Limited Partners
and the Redeemable Preferred Limited Partners as of the Transaction Effective
Date.
ARTICLE 5
DISTRIBUTIONS; ALLOCATIONS
5.1 Requirement and Characterization of Distributions.
(a) Distributable Assets may be distributed by the Partnership
at such time (each a "Distribution Date") and in such amounts as the General
Partner may determine, in its sole discretion, in the following order of
priority:
(i) first, to the Senior Preferred Limited
Partners who are, and to any former Senior
Preferred Limited Partners who were,
Partners on the Record Date for such
distribution in proportion to their
respective Percentage Interests on such
Record Date until the Senior Preferred
Limited Partners have received an amount
pursuant to this clause equal to the balance
in the Unpaid Senior Preferred Distribution
Account; and
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(ii) second, to the Redeemable Preferred Limited
Partners who are, and to any former
Redeemable Preferred Limited Partners who
were, Partners on the Record Date with
respect to such distribution in proportion
to their respective Percentage Interests on
such Record Date until the Redeemable
Preferred Limited Partners have received an
amount pursuant to this clause equal to the
balance in the Unpaid Redeemable Preferred
Distribution Account; and
(iii) thereafter, .01% to the General Partner and
99.99% to the Common Limited Partners in
accordance with their respective Percentage
Interests.
(b) The General Partner shall have the power to determine any
alternative minimum tax adjustments and tax preference items in such manner and
in such amounts as the General Partner may determine in the General Partner's
discretion.
(c) If, pursuant to (i) any provision of the Code or the
Regulations or (ii) any comparable state law, the Partnership is required to
withhold any tax with respect to a Partner's distributive share of partnership
income, gain, loss, deduction or credit, the Partnership shall withhold the
required amount and pay the same over to the taxing authorities as required by
the Code, the Regulations or state law. The amount withheld will be deducted
from the amount that would otherwise be distributed to that Partner, but will be
treated as though it had been distributed to the Partner with respect to which
the Partnership is required to withhold. If at any time the amount required to
be withheld by the Partnership exceeds the amount of money that would otherwise
be distributed to the Partner with respect to which the withholding requirement
applies on the following Record Date (the "Excess Withholding Amount"), then the
Partnership shall provide notice and a brief explanation to such Partner of the
Excess Withholding Amount and if such amount is not paid within 30 days from the
date of such notice the Excess Withholding Amount shall be considered a loan
from the Partnership to such Partner. Such loan shall bear interest at 14% until
discharged by such Partner by repayment. Any amounts otherwise distributable to
such Partner on each Record Date following such Record Date referred to in
determining the Excess Withholding Amount will be treated as a repayment of such
loan.
(d) If distributions of property (rather than cash) are made
by the Partnership, the General Partner shall treat such property as though it
were sold for its fair market value, crediting or debiting the Capital Accounts,
as the case may be, for the difference between the fair market value and basis
of such property (the hypothetical gain or hypothetical loss, as the case may
be). The General Partner shall have the discretion to distribute cash or
property to any Partner provided that the fair market value of the cash and
property received by all Partners in the distribution is in compliance with
Section 5.1(a). Fair market value shall be determined by the General Partner in
its reasonable discretion. Notwithstanding the foregoing, if the property to be
distributed is securities of another issuer and the securities are then listed
on a national securities exchange or traded over the counter, the fair market
value of the securities shall be equal to the average of the closing prices, the
average of the last sales prices, or the average of the bid and asked prices, as
the case may be, for
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the 20 trading days immediately preceding the distribution date. Notwithstanding
the foregoing, all distributions to Senior Preferred Limited Partners pursuant
to Section 5.1(a)(i) and Redeemable Preferred Limited Partners pursuant to
Section 5.1(a)(ii) may be made only in cash.
5.2 Distributions Upon Liquidation. Proceeds from a Terminating Capital
Transaction, and any other proceeds received or reductions in reserves made
after commencement of the liquidation of the Partnership, shall be distributed
to the Partners in accordance with Section 11.2 hereof.
5.3 Allocations of Income, Profits and Losses. After giving effect to
the special allocations set forth in Sections 5.4 and 5.5 hereof, Profits,
Income and Losses for a Fiscal Year or other period shall be allocated for both
tax and Capital Account purposes, in the following manner:
(a) Income and Profits shall be allocated in the
following order and priority:
(i) first, Income shall be allocated to the
Senior Preferred Limited Partners in
proportion to their respective Percentage
Interests until the amount of Income
allocated to the Senior Preferred Limited
Partners pursuant to this clause (i) for the
current Fiscal Year equals the excess of (A)
the cumulative amount of the Senior
Preferred Distribution for each Fiscal
Quarter of the current Fiscal Year and all
prior Fiscal Years (but only to the extent
that such distributions have been previously
paid to the Senior Preferred Limited
Partners pursuant to Section 5.1(a)(i)
hereof) over (B) the cumulative amount of
Income allocated to the Senior Preferred
Limited Partners pursuant to this clause (i)
for all prior Fiscal Years;
(ii) second, Income shall be allocated to the
Redeemable Preferred Limited Partners in
proportion to their respective Percentage
Interests until the amount of Income
allocated to the Redeemable Preferred
Limited Partners pursuant to this clause
(ii) for the current Fiscal Year equals the
excess of (A) the cumulative amount of the
Redeemable Preferred Distribution for each
Fiscal Quarter of the current Fiscal Year
and all prior Fiscal Years (but only to the
extent that such distributions have been
previously paid to the Redeemable Preferred
Limited Partners pursuant to Section
5.1(a)(ii) hereof) over (B) the cumulative
amount of Income allocated to the Redeemable
Preferred Limited Partners pursuant to this
clause (ii) for all prior Fiscal Years;
(iii) [intentionally omitted]
(iv) third, Profits shall be allocated to the
Common Limited Partners and the General
Partner, in proportion to and to the extent
of an amount equal to the excess, if any, of
(A) the cumulative Losses allocated to
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such Partners pursuant to Section 5.3(b)(iv)
hereof for all prior Fiscal Years, over (B)
the cumulative Profits allocated to such
Partners pursuant to this Section 5.3(a)(iv)
for all prior Fiscal Years;
(v) fourth, Profits shall be allocated to the
Senior Preferred Limited Partners, in
proportion to and to the extent of an amount
equal to the excess, if any, of (A) the
cumulative Losses allocated to each such
Partner pursuant to Section 5.3(b)(iii)
hereof for all prior Fiscal Years, over (B)
the cumulative Profits allocated to such
Partner pursuant to this Section 5.3(a)(v)
for all prior Fiscal Years;
(vi) fifth, Profits shall be allocated to the
Redeemable Preferred Limited Partners, in
proportion to and to the extent of an amount
equal to the excess, if any, of (A) the
cumulative Losses allocated to each such
Partner pursuant to Section 5.3(b)(ii)
hereof for all prior Fiscal Years, over (B)
the cumulative Profits allocated to such
Partner pursuant to this Section 5.3(a)(vi)
for all prior Fiscal Years; and
(vii) thereafter, Profits shall be allocated to
the General Partner and the Common Limited
Partners in proportion to their respective
Percentage Interests.
(b) Losses shall be allocated in the following order and
priority:
(i) first, to the General Partner and the Common
Limited Partners in proportion to and until
the amount of Losses allocated pursuant to
this clause (i) for the current Fiscal Year
equals the excess, if any, of (A) the sum of
(I) their respective Capital Account
balances on the Effective Date, (II) the
Capital Contributions made by such Partners
subsequent to the Effective Date and (III)
the cumulative amount of Profits allocated
to such Partners pursuant to Section
5.3(a)(vii) hereof over (B) the sum of (I)
cumulative amount of Losses allocated to
such Partners pursuant to this clause (i)
for all prior Fiscal Years and (II) the
cumulative amount of distributions made to
them pursuant to Section 5.1(a)(iii) hereof;
(ii) second, to the Redeemable Preferred Limited
Partners, in proportion to their respective
Percentage Interests until the amount of
Losses allocated pursuant to this clause
(ii) for the current Fiscal Year equals
the excess, if any, of (A) the sum of (I)
the aggregate amount of the portion of their
Capital Account balances on the date of such
Partners' admission to the Partnership
attributable to Redeemable Preferred Units,
(II) the aggregate Capital Contributions
made by such Partners subsequent to the date
of such Partners' admission to the
Partnership
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<PAGE> 27
in respect of their Redeemable Preferred
Units, and (III) the cumulative amount of
Income allocated to them pursuant to Section
5.3(a)(ii) hereof over (B) the sum of (I)
cumulative amount of Losses allocated to
such Partners pursuant to this clause (ii)
for all prior Fiscal Years and (II) the
cumulative amount of distributions made to
them pursuant to Section 5.1(a)(ii) hereof;
(iii) third, to the Senior Preferred Limited
Partners, in proportion to their respective
Percentage Interests until the amount of
Losses allocated pursuant to this clause
(iii) for the current Fiscal Year equals the
excess, if any, of (A) the sum of (I) the
aggregate amount of the portion of their
Capital Account balances on the date of such
Partners' admission to the Partnership
attributable to Senior Preferred Units, (II)
the aggregate Capital Contributions made by
such Partners subsequent to the date of such
Partners' admission to the Partnership in
respect of their Senior Preferred Units, and
(III) the cumulative amount of Income
allocated to them pursuant to Section
5.3(a)(i) hereof over (B) the sum of (I)
cumulative amount of Losses allocated to
such Partners pursuant to this clause (iv)
for all prior Fiscal Years and (II) the
cumulative amount of distributions made to
them pursuant to Section 5.1(a)(i) hereof;
and
(iv) thereafter, .01% to the General Partner and
99.99% to the Common Limited Partners in
proportion to their Percentage Interests.
5.4 Special Allocations. The following special allocations shall be
made in the following order:
(a) Notwithstanding any other provision of this Agreement to
the contrary, if in any Fiscal Year there is a net decrease in Partnership
Minimum Gain, then each Partner shall first be allocated items of Partnership
income for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an
amount equal to the portion of such Partner's share of the net decrease in
Partnership Minimum Gain, determined in accordance with the provisions of
Regulations Section 1.704-2(g). As provided in Regulations Section 1.704-2(j),
income of the Partnership allocated for any Fiscal Year under this subsection
shall consist first of items of book gain recognized from the disposition of
Partnership property subject to Nonrecourse Liabilities to the extent of the
decrease in Partnership Minimum Gain that is attributable to such disposition,
with any remaining allocated income deemed to be made up of a pro rata portion
of the Partnership's other items of gross income for such taxable year.
(b) Notwithstanding any other provision of this Agreement to
the contrary, except as specified in Section 5.4(a), if in any Fiscal Year there
is a net decrease in Partner Minimum Gain, then each Partner shall first be
allocated items of Partnership income for such Fiscal Year (and, if necessary,
subsequent Fiscal Years) in an amount equal to the portion of such Partner's
share of the
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net decrease in such Partner Minimum Gain, determined in accordance with the
provisions of Regulations Section 1.704-2(i). As provided in Regulations Section
1.704-2(j), income of the Partnership allocated for any taxable year under this
subsection shall consist first of items of book gain recognized from the
disposition of Partnership property subject to Partner Nonrecourse Debt to the
extent of the decrease in Partner Minimum Gain that is attributable to such
disposition, with any remaining allocated income deemed to be made up of a pro
rata portion of the Partnership's other items of gross income for such taxable
year.
(c) In the event any Partner unexpectedly receives any
adjustments, allocations, or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704- 1(b)(2)(ii)(d)(6) of
the Regulations, items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Regulations, the Adjusted Capital Account Deficit, if
any, of such Partner as quickly as possible, provided that an allocation
pursuant to this Section 5.4(c) shall be made only if and to the extent that
such Partner would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article 5 have been tentatively made as if this
Section 5.4(c) were not in the Agreement.
(d) In the event a Limited Partner (who is not also a General
Partner) has a deficit Capital Account at the end of any Fiscal Year that is in
excess of the sum of (i) the amount the Limited Partner is obligated to restore
pursuant to any provision of this Agreement, and (ii) the amount the Limited
Partner is deemed to be obligated to restore pursuant to Section 1.704-
1(b)(2)(ii)(c) of the Regulations, the Limited Partner shall be specially
allocated items of Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this Section 5.4(d)
shall be made only if and to the extent that the Limited Partner would have a
deficit Capital Account in excess of such sum after all other allocations
provided for in this Article 5 have been made as if Section 5.4(c) hereof and
this Section 5.4(d) were not in the Agreement.
(e) Notwithstanding anything to the contrary in this
Agreement, any Partner Nonrecourse Deductions for any Fiscal Year or other
period shall be allocated to the Partner who bears the economic risk of loss
with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable.
(f) To the extent an adjustment to the adjusted tax basis of
any Partnership asset is required pursuant to Code Section 732(d), Code Section
734(b) or Code Section 743(b), the Capital Accounts of the Partners shall be
adjusted pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations.
5.5 Curative Allocations. The allocations set forth in Sections 5.4 and
5.6 hereof (the "Regulatory Allocations") are intended to comply with certain
requirements of the Regulations. It is the intent of the Partners that, to the
extent possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of Partnership
income, gain, loss or deduction pursuant to this Section 5.5. Therefore,
notwithstanding any other provision of this Article 5 (other than the Regulatory
Allocations), the General Partner shall make such
24
<PAGE> 29
offsetting special allocations of Partnership income, gain, loss or deduction in
whatever manner it determines appropriate so that, after such offsetting
allocations are made, each Partner's Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Partner would have had if
the Regulatory Allocations were not part of the Agreement and all Partnership
items were allocated pursuant to Section 5.3.
5.6 Loss Limitation. The Losses allocated to a Limited Partner pursuant
to Section 5.3(b) hereof shall not exceed the maximum amount of Losses that can
be so allocated without causing a Limited Partner to have an Adjusted Capital
Account Deficit at the end of any Fiscal Year. All Losses in excess of the
limitations set forth in this Section 5.6 shall be allocated among the Partners
other than the Limited Partner referred to in the immediately preceding sentence
in accordance with Section 5.3(b) hereof.
5.7 Tax Allocations: Code Section 704(c). In accordance with Code
Section 704(c) and the Regulations promulgated thereunder, income, gain, loss,
and deduction with respect to any property contributed to the capital of the
Partnership shall, solely for tax purposes, be allocated among the Partners so
as to take account of any variation between the adjusted basis of such property
to the Partnership for federal income tax purposes and its initial Gross Asset
Value (computed in accordance with the definition of Gross Asset Value in
Section 1.1). In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clause (v) of the definition of Gross Asset Value in
Section 1.1, subsequent allocations of income, gain, loss, and deduction with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Gross Asset Value in
the same manner as under Code Section 704(c) and the Regulations promulgated
thereunder. The Partnership shall use the "traditional method" as set forth in
Treasury Regulation Section 1.704-3(b) for making Section 704(c) allocations
with respect to the assets owned by the Partnership on the Effective Date.
5.8 Other Allocation Rules.
(a) Profits and Losses, each item thereof and all other items
allocable among Partners for the Fiscal Year that includes the Effective Date
shall be allocated among the Partners by taking into account their varying
interests during such Fiscal Year in accordance with Section 706(d) of the Code,
using any permissible method selected by the General Partner in its sole
discretion.
(b) Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall to the extent possible, after
taking into account other required allocations of gain pursuant to this Article
5, be characterized as Recapture Income in the same proportions and to the same
extent as such Partners have been allocated any deductions directly or
indirectly giving rise to the treatment of such gains as Recapture Income.
(c) If a Partnership Interest is transferred during any Fiscal
Year, the Profits or Losses attributable to such Partnership Interest for such
Fiscal Year shall be divided and allocated proportionately between the
transferor and the transferee in accordance with Section 8.6(d) hereof.
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<PAGE> 30
(d) In accordance with Section 752 of the Code and Regulations
Section 1.752- 3(a)(3), excess Nonrecourse Liabilities shall be allocated to the
Partners, to the extent possible, in accordance with their respective Percentage
Interests.
ARTICLE 6
STATUS OF LIMITED PARTNERS
6.1 Participation in Management. The Limited Partners, as such, shall
not (i) participate in the management or control of the Partnership's business,
(ii) transact any business for the Partnership, nor (iii) have the power to act
for or bind the Partnership, said powers being vested solely and exclusively in
the General Partner. The Limited Partners shall have only the voting rights
expressly set forth in this Agreement or as required under the Act.
6.2 Limited Liability. No Limited Partner shall be bound by, or
personally liable for, the expenses, liabilities, or obligations of the
Partnership, except as provided in the Act.
6.3 Outside Activities of Limited Partners. Any Limited Partner and any
officer, director, employee, agent, trustee, family member, partner, shareholder
or Affiliate of any Limited Partner shall be entitled to and may have business
interests and activities that are in direct competition with the Partnership or
that are enhanced by the activities that are in direct competition with the
Partnership or that are enhanced by the activities of the Partnership. Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. None of
the Limited Partners nor any other Person shall have any rights by virtue of
this Agreement or the partnership relationship established hereby in any
business ventures of any other Person even if such opportunity is of a character
that, if presented to the Partnership, any Limited Partner or such other
Persons, could be taken by such Person.
6.4 Rights of Limited Partners Relating to the Partnership. In addition
to other rights provided by this Agreement or by the Act, each Limited Partner
shall have the right, upon five Business Days' prior written notice, at such
Limited Partner's own expense (including reimbursement for actual third party
copying and administrative charges that the General Partner may incur):
(a) to obtain a list of the name and last known business,
residence or mailing address of each Partner; and
(b) to obtain additional copies of this Agreement and the
Certificate and all amendments thereto, together with executed copies of all
powers of attorney pursuant to which this Agreement, the Certificate and all
amendments thereto have been executed.
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ARTICLE 7
MANAGEMENT AND OPERATION OF BUSINESS
7.1 Authority of the General Partner. At all times during the existence
of this Partnership, and subject to any express Approvals otherwise required by
this Agreement, the General Partner shall have all rights and powers which may
be possessed by a general partner pursuant to the Act and shall have the
exclusive right and the obligation acting solely by itself and without the
necessity of approval by any Limited Partner or any other Person to operate,
manage and control the Partnership and its business, assets and affairs. The
General Partner may not be removed by the Limited Partners with or without
cause. The General Partner shall have the authority to execute on behalf of the
Partnership such agreements, contracts, instruments and other documents as it
shall from time to time approve, such approval to be conclusively evidenced by
its execution and delivery of any of the foregoing, including, without
limitation: (i) checks, drafts, notes and other negotiable instruments; (ii)
deeds of trust and assignments of rights; (iii) contracts for the sale of
assets, deeds, leases, assignments and bills of sale; and (iv) loan agreements,
mortgages, security agreements, pledge agreements and financing statements. In
addition to the powers given to the General Partner by Law, and without limiting
the generality of the foregoing powers of the General Partner, the General
Partner shall have the power and authority to do the following on behalf of and
at the cost, expense and risk of, the Partnership:
(a) to borrow money for the Partnership from any Person,
including the General Partner or its Affiliates; provided that any loans from
the General Partner or its Affiliates must be on terms substantially similar to
those that could have been obtained from a non-Affiliate;
(b) to create a Lien on all or any part of the Partnership's
assets in order to secure loans or advances to the Partnership;
(c) to acquire by purchase, lease, contribution of property or
otherwise and own, hold, sell, convey, transfer or dispose of real or personal
property which may be necessary, convenient or incidental to the accomplishment
of the purposes of the Partnership;
(d) to guarantee obligations of any Person;
(e) to collect all income of the Partnership and to satisfy
all obligations of the Partnership;
(f) to prosecute, defend and settle legal, arbitration or
administrative proceedings on behalf of or against the Partnership or, to the
extent relating to the Partnership, any of its Partners;
(g) to make investments in or loans to any Subsidiary of the
Partnership on such terms and conditions as the General Partner deems advisable
and in the best interest of the Partnership;
(h) to make capital contributions to any Subsidiary;
(i) to dissolve or liquidate any Subsidiaries of the
Partnership;
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<PAGE> 32
(j) to establish Working Capital Reserves;
(k) to pay, collect, compromise, settle, arbitrate or
otherwise adjust any and all claims or demands of or against or relating to the
Partnership;
(l) to employ at the Partnership's expense such Persons,
firms, companies, agents, employees, attorneys, accountants, financial advisors,
appraisers, surveyors, engineers, architects, business consultants and such
other professionals under terms and conditions and for such amounts as are
commercially reasonable and appropriate;
(m) to establish, maintain or close one or more bank accounts
in the Partnership's name for the Partnership funds, authorize designees to
disburse such funds on behalf of the Partnership, and, for such purpose, certify
the adoption of appropriate banking resolutions;
(n) to issue any additional Partnership Interests and admit
additional Partners in accordance with Section 7.2;
(o) subject to the restrictions of Section 13.1, to amend this
Agreement and the Certificate;
(p) to admit the transferee of a Partner's Partnership
Interest as a Substituted Partner in accordance with Section 8.4;
(q) subject to the restrictions of Section 7.5, receive
reimbursement for Partnership Expenses incurred on behalf of the Partnership and
paid by the General Partner or any of its Affiliates;
(r) to exercise the voting rights of the Partnership on
account of its ownership of any voting securities held by the Partnership as the
General Partner deems appropriate;
(s) to distribute cash or other assets of the Partnership to
the Partners in accordance with Article 5 of this Agreement;
(t) to sell, exchange or otherwise dispose of all or
substantially all of the Partnership assets;
(u) to merge or otherwise consolidate the Partnership with any
other entity, or effect a reorganization of the Partnership, pursuant to the Act
or otherwise;
(v) to dissolve the Partnership, except as otherwise provided
in Section 11.1, or continue the Partnership after its dissolution due to an
event described in Section 11.1; and
(w) to perform all other necessary and appropriate acts in
connection with the Partnership business.
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7.2 Issuances of Additional Partnership Interests. The General Partner
is hereby authorized to cause the Partnership from time to time to issue to
Persons additional Partnership Interests in one or more classes, or one or more
series of any of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties all as shall
be determined by the General Partner in its sole and absolute discretion and
without the approval of any of the Limited Partners, subject to provisions of
the Act and Articles 9 and 10, including, but not limited to, (i) the
allocations of items of Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interests; (ii) the right of each such
class or series of Partnership Interests to share in Partnership distributions;
(iii) the rights of each such class or series of Partnership Interests upon
dissolution and liquidation of the Partnership; (iv) the price at and the terms
and conditions on which such class or series of Partnership Interests may be
redeemed by the Partnership, if such Partnership Interests are redeemable by the
Partnership; (v) the rate at and the terms and conditions on which such class or
series of Partnership Interests may be converted into any other class or series
of Partnership Interests of the Partnership, if any class or series of
Partnership Interests are issued with the privilege of conversion; and (vi) the
right of such class or series of Partnership Interests to vote on matters
relating to the relative rights and preferences of such class; provided,
however, that the General Partner shall not be authorized to cause the
Partnership to issue additional Partnership Interests with such designations,
preferences, and relative, participating, optional or other special rights
senior to the Senior Preferred Units or the Redeemable Preferred Units except as
otherwise provided in Section 9.3(a) or 10.3(a). Upon the issuance of any class
or series of Partnership Interests which shall not be identical to the
Partnership Interests issued on the Effective Date, the General Partner
(pursuant to the General Partner's power of attorney from the Limited Partners),
without the consent at the time of any Limited Partner or Assignee (except as
otherwise required in Articles 9 and 10) may amend any provision of this
Agreement, and execute, swear to, acknowledge, deliver, file and record an
amended Certificate of Limited Partnership and whatever other documents may be
required in connection therewith, as shall be necessary or desirable to reflect
the issuance of such class or series of Partnership Interests and the relative
rights and preferences of such class or series of Partnership Interests as to
the matters set forth in the preceding sentence. The General Partner shall do
all things necessary to comply with the Act and is authorized and directed to do
all things it deems to be necessary or advisable in connection with any such
future issuance to reflect the issuance of the Partnership Interest and the
admission of any Partner acquiring the Partnership Interest, including, without
limitation, compliance with any statute, rule, regulation or guideline of any
federal, state or other governmental agency or any securities exchange on which
the Partnership Interests or other such security is listed for trading. The
General Partner will provide prompt notice to all Limited Partners of any
additional Partnership Interests issued pursuant to this Section 7.2.
7.3 Amendment of Agreement and Certificate of Limited Partnership. To
the extent that such action is determined by the General Partner to be
reasonable and necessary or appropriate and provided that such action is not
inconsistent with any provision of this Agreement, the General Partner shall
file amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware
and each other state or the District of Columbia in which the Partnership may
elect to do business or own property. The General Partner shall not be
29
<PAGE> 34
required, before filing, to deliver or mail a copy of the Certificate or any
amendment thereto to any Limited Partner. The General Partner shall use all
reasonable efforts to cause to be filed such other certificates or documents as
may be reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability to the extent provided by applicable
law) in the State of Delaware and any other state or the District of Columbia in
which the Partnership may elect to do business or own property.
7.4 Compensation of General Partner or Affiliates. Other than the
General Partner's right to distributions and expense reimbursement as described
herein, neither the General Partner nor any of its Affiliates shall be entitled
to any fees or other compensation in connection with the discharge of the
General Partner's duties hereunder.
7.5 Expenses.
(a) The Partnership shall be responsible for and shall pay or
reimburse the General Partner for all Partnership Expenses. All Partnership
Expenses shall be paid out of Working Capital Reserves and other funds of the
Partnership determined by the General Partner to be available for such purpose.
As used herein, the term "Partnership Expenses" means the Organizational
Expenses and all other costs, expenses or obligations of the Partnership
incurred by the Partnership or by the General Partner or any of its Affiliates
on behalf of the Partnership in connection with the conduct of the business and
affairs of the Partnership, including without limitation:
(i) all costs and expenses related to the business of
the Partnership, including, without limitation, all costs and
expenses of acquiring, holding and disposing of any
Partnership investments and any financings related thereto;
(ii) all routine third party expenses incurred in the
formation and day-to-day operation of the Partnership, such as
legal and accounting, maintenance of books and records of the
Partnership, obtaining valuations or appraisals of the
Partnership's assets, the preparation and dispatch to the
Partners of checks, financial reports, tax returns and notices
required pursuant to this Agreement and the holdings of
meetings of the Partners and other out-of-pocket expenses of
the General Partner and its Affiliates incurred to third
parties who are not Affiliates of the General Partner in
connection with the business of the Partnership;
(iii) all expenses incurred in connection with the
registration, qualification or exemption of the Partnership
under any applicable federal, state, local or foreign Law;
(iv) all expenses incurred in connection with any
litigation or administrative or arbitration proceedings
involving or related to the Partnership (including the cost of
any investigation and preparation) and the amount of any
judgment or settlement paid in connection therewith; provided,
that expenses incurred by the General Partner
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in connection with any litigation brought by or on behalf of
the Limited Partners against the General Partner shall not
constitute Partnership Expenses and the General Partner shall
not be entitled to receive expense advancements or be
indemnified for such expenses pursuant to Section 7.6 of this
Agreement until such litigation is resolved, in which event
such expenses shall become Partnership Expenses and the
General Partner shall be indemnified as (but only to the
extent) provided in Section 7.6; and
(v) the cost of preparing and filing, on behalf of
the Partnership, all required local, state and federal tax
returns, reports with the SEC and other documents relating to
the Partnership.
(b) If Newco is merged into the Partnership pursuant to the
Transaction, the Partnership shall assume the obligations of Newco under the
Monitoring Agreement between Newco and Oly Hightop Holding, L.P. All payments
made under the Monitoring Agreement to an Affiliate of the General Partner shall
be treated as Partnership Expenses.
7.6 Indemnification.
(a) The Partnership shall indemnify and hold harmless each
Indemnitee from and against any and all claims, actions, demands, losses, costs,
expenses (including attorneys' fees), and damages based upon or resulting or
arising from any act or any failure to act by the Indemnitee (except for an act
or failure to act constituting gross negligence or willful misconduct) or by
reason of the Indemnitee's position as such (a "Claim") to the full extent
permitted under the Act. The indemnification authorized by this Section 4.12
shall include any judgment, award, settlement, and the payment of reasonable
attorneys' fees and other expenses (not limited to taxable costs) incurred in
settling or defending any claims, threatened action or actual legal or
arbitration proceeding. Subject to the proviso set forth in Section 4.14(b)(iv)
hereof, the Partnership shall pay any and all costs, expenses (including
attorneys' and expert witnesses' fees), and obligations paid or incurred by the
Indemnitee in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a witness in
or participate in, any Claim with respect to which indemnification is permitted
under the Act (or, if applicable, reimburse the Indemnitee for any and all such
costs, expenses and obligations previously paid by it) in advance of the final
disposition or conclusion of such Claim. If, when, and to the extent that it
shall be finally judicially determined that the Indemnitee would not be
permitted to be indemnified with respect to a Claim under applicable Law or
pursuant to the terms hereof, then, upon such final determination, the
Indemnitee shall reimburse the Partnership without interest for all amounts so
advanced to it by the Partnership or paid on its behalf by the Partnership.
(b) The indemnification provided by this Section 7.6 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to any vote of the Partners, as a
matter of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity unless otherwise provided in a written
agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.
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(c) In no event shall any Partner be liable to any Indemnitee
by reason of the indemnification provisions set forth in this Agreement.
(d) An Indemnitee shall not be denied indemnification in whole
or in part under this Section 7.6 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.
7.7 Liability of the General Partner.
(a) Neither the General Partner nor any Affiliate of the
General Partner, nor any officer, director, manager, member, employee,
stockholder, or partner of the General Partner or any of its Affiliates, shall
be liable, responsible, or accountable in damages or otherwise to the
Partnership or any Partner by reason of, arising from, or relating to the
operations, business, or affairs of or any action taken or failure to act on
behalf of the Partnership, the General Partner, or any of their respective
Affiliates, except to the extent that any of the foregoing is determined, by a
final, nonappealable order of a court of competent jurisdiction, to have been
primarily caused by the gross negligence, willful misconduct, or bad faith of
the person claiming exculpation.
(b) The Limited Partners expressly acknowledge that the
General Partner is acting on behalf of the Partnership and the Partners, that,
except as expressly provided herein, the General Partner is under no obligation
to consider the separate interests of the Limited Partners alone in deciding
whether to cause the Partnership to take (or decline to take) any actions, and
that the General Partner shall not be liable for damages to the Partnership or
any Partner for losses sustained, liabilities incurred, or benefits not derived
by Limited Partners in connection with such decisions, so long as the General
Partner has acted in good faith and with fair dealing and without gross
negligence.
(c) The General Partner may exercise any of the powers granted
to it by this Agreement and perform any of the duties imposed upon it hereunder
either directly or by or through its agents. The General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by it in good faith and without gross negligence.
(d) Any amendment, modification or repeal of this Section 7.7
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's liability to the Partnership and
the Limited Partners under this Section 7.7 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
(e) In exercising its authority under this Agreement, the
General Partner may, but shall be under no obligation to, take into account the
tax consequences to any Partner of any action taken by it. The General Partner
and the Partnership shall not have liability to a Limited Partner under any
circumstances as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner pursuant
to its authority under this Agreement.
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7.8 Compliance with Law. The General Partner shall manage the affairs
of the Partnership in accordance with all applicable Laws. Each Partner hereby
agrees to cooperate and use its reasonable best efforts to assist the
Partnership in obtaining or making any and all consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any Authority
required by or with respect to the Partnership of such Partner in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
7.9 Outside Activities of General Partner. Any General Partner and any
officer, director, employee, agent, trustee, member, partner, shareholder or
Affiliate of any General Partner shall be entitled to and may have business
interests and activities that are in direct competition with the Partnership or
that are enhanced by the activities that are in direct competition with the
Partnership or that are enhanced by the activities of the Partnership. Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of the General Partner or any Assignee.
Neither the General Partner nor any other Person shall have any rights by virtue
of this Agreement or the partnership relationship established hereby in any
business ventures of any other Person even if such opportunity is of a character
that, if presented to the Partnership, the General Partner or such other
Persons, could be taken by such Person.
ARTICLE 8
TRANSFERS OF INTERESTS IN AND
WITHDRAWALS FROM THE PARTNERSHIP
8.1 Transfer.
(a) The term "transfer," when used in this Article 8 with
respect to a Partnership Interest, shall be deemed to refer to a transaction by
which a Partner purports to assign all or any part of its Partnership Interest
to another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article 8. Any transfer or purported transfer of a Partnership Interest not made
in accordance with this Article 8 shall be null and void.
8.2 Transfer of General Partner's Partnership Interest. The General
Partner shall not transfer all or any part of its General Partner Interest,
whether now owned or hereafter acquired, except in accordance with the terms of
this Section 8.2. The General Partner may transfer its General Partner Interest
(a) without the Approval of any other Partner if such transfer is made to (i) an
Affiliate of the General Partner, (ii) any Person with which the General Partner
merges or consolidates or effects some other business combination, or (iii) any
Person that acquires all or substantially all of the assets of the General
Partner or (b) with the Approval of a Majority in Interest of the Limited
Partners of each Class, which the Limited Partners may, in their sole
discretion, grant or deny. To the extent that both the General Partner that
transfers its General Partner Interest in compliance with this Section 8.2 and
the transferee of such interest express their intent in writing that
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the transferee become a Substituted Partner in respect of the transferred
General Partner Interest, each Limited Partner hereby consents to such
substitution.
8.3 Limited Partners' Rights to Transfer.
(a) The transfer of all or any portion of a Partnership
Interest by a Limited Partner shall not require the consent of any other Limited
Partner. No Limited Partner shall have the right to transfer all or any portion
of its Partnership Interest without the prior written consent of the General
Partner; provided, however, that a Limited Partner shall have the right to
transfer all or any portion of its Partnership Interest to an Affiliate of such
Limited Partner without the consent of the General Partner.
(b) If a Limited Partner is subject to Incapacity, the
executor, administrator, trustee, committee, guardian, conservator or receiver
of such Limited Partner's estate shall have all the rights of a Limited Partner,
but no more rights than those enjoyed by other Limited Partners, for the purpose
of settling or managing the estate and such power as the incapacitated Limited
Partner possessed to transfer all or any part of its Partnership Interest. The
Incapacity of a Limited Partner, in and of itself, shall not dissolve or
terminate the Partnership.
(c) Notwithstanding any provision herein to the contrary, no
transfer by a Limited Partner of such Partner's Partnership Interest may be made
to any Person if in the opinion of legal counsel for the Partnership, it would
result in (i) the Partnership being treated, for federal income tax purposes, as
an association taxable as a corporation or a "publicly traded partnership"
within the meaning of Section 7704(b) of the Code or (ii) the violation of any
applicable Law.
8.4 Substituted Limited Partners.
(a) Upon the transfer of a Limited Partner Interest permitted
by this Article 8, the transferee shall not become a Substituted Partner unless
and until (i) the transferee on or prior to the date of the transfer agrees in
writing to become a Partner in the Partnership bound by all of the terms and
conditions of this Agreement, (ii) the transferee pays all reasonable expenses
of the Partnership incurred in connection with such substitution and assumes all
obligations of the transferring Partner under this Agreement, (iii) the
transferring Partner and its transferee execute and deliver such instruments and
agreements as counsel for the Partnership deems reasonably necessary or
desirable to effect such substitution, and (iv) the General Partner consents to
such substitution which consent shall not be unreasonably withheld.
(b) A transferee who has been admitted as a Substituted
Partner in accordance with this Article 8 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited Partner
under this Agreement.
(c) Upon the admission of a Substituted Partner, the General
Partner shall amend the Ownership Schedule to reflect the Capital Account and
Percentage Interest of such Substituted
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Partner and to eliminate or adjust, if necessary, the name, address and interest
of the predecessor of such Substituted Partner.
8.5 Assignees. If the transferee of a Partnership Interest has not
become a Substituted Partner pursuant to the terms of this Article 8, such
transferee shall be considered an Assignee for purposes of this Agreement. To
the extent so assigned, an Assignee shall be entitled to receive distributions
from the Partnership and the share of Profits, Losses, and any other items of
income, gain, loss, deduction and credit of the Partnership attributable to the
Partnership Interest assigned to such transferee but shall not be deemed to be a
holder of a Partnership Interest for any other purpose under this Agreement, and
shall not be entitled to vote such Partnership Interest or Approve any matter
presented to the Partners for a vote or Approval (and the Partner who assigned
the Partnership Interest to the Assignee shall remain entitled to vote such
Partnership Interest or Approve but shall not have any other rights under this
Agreement with respect to such Partnership Interest). In the event any such
transferee desires to make a further assignment of any such Partnership
Interest, such transferee shall be subject to all the provisions of this Article
8 to the same extent and in the same manner as any Partner desiring to make an
assignment of Partnership Interests.
8.6 General Provisions.
(a) No Limited Partner may withdraw from the Partnership other
than as a result of a permitted transfer of all of such Limited Partner's
Partnership Interest in accordance with this Article 8.
(b) Any Limited Partner who shall transfer all of his
Partnership Interest in a transfer permitted pursuant to this Article 8 shall
cease to be a Limited Partner upon the admission of all Assignees of such
Partnership Interest as Substituted Limited Partners.
(c) Other than with respect to Assignees under Section 8.5
hereof, transfers pursuant to this Article 8 may only be made on the first or
last day of a calendar month, unless the General Partner otherwise agrees.
(d) If any Partnership Interest is transferred or assigned in
compliance with the provisions of this Article 8 on any day other than the first
day of a Fiscal Year, then Profits, Losses, each item thereof and all other
items attributable to such Partnership Interest for such Fiscal Year shall be
allocated to the transferor Partner and to the transferee Partner, by taking
into account their varying interests during the Fiscal Year in accordance with
Section 706(d) of the Code, using any permissible method selected by the General
Partner, in its sole discretion. Solely for purposes of making such allocations,
for assignments that occur on or prior to the 15th day of a calendar month each
of such items for the calendar month in which the assignment occurs shall be
allocated to the assignor, and for assignments that occur after the 15th day of
a calendar month each of such items for the calendar month in which the
assignment occurs shall be allocated to the Assignee. All distributions of
Distributable Assets attributable to such Partnership Interest with respect to
which the Record Date is before the date of such transfer or assignment shall be
made to the transferor
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Partner and all distributions of Distributable Assets thereafter attributable to
such Partnership Interest shall be made to the transferee Partner.
8.7 Admission of Successor General Partner. A successor to all of the
General Partner Interest pursuant to Section 8.2 hereof shall be admitted to the
Partnership as the substituted General Partner, effective as of the date of, and
immediately prior to the time of, such transfer. The successor General Partner
shall carry on the business of the Partnership without dissolution. The
admission of the successor General Partner shall be subject to such successor's
execution and delivery of a written agreement accepting all of the terms and
conditions of this Agreement, together with such other documents or instruments
as may be required by the Act to effect the admission of the new General Partner
to the Partnership, including a certificate of amendment to this Agreement
and/or an amended Certificate. In the event that an admission occurs on any day
other than the first day of a Fiscal Year, all items attributable to the General
Partner Interest for such Fiscal Year shall be allocated between the
transferring General Partner and such successor as provided in Section 8.6(d)
hereof.
8.8 Put Option.
(a) Grant. Except as may otherwise be prohibited by applicable
law, the Partnership hereby grants to each Senior Preferred Limited Partner and
Redeemable Preferred Limited Partner (each, a "Put Limited Partner") an
irrevocable right and option (each, a "Put Option") to cause the Partnership to
purchase, and the Partnership hereby agrees to purchase, all of the Senior
Preferred Units and Redeemable Preferred Units (the "Put Units" and each, a "Put
Unit") held by such Put Limited Partner, subject to the terms and conditions
described below.
(b) Exercise. The Put Option may be exercised, in whole but
not in part, by any Put Limited Partner at any time during the period beginning
after the date that is the fifth anniversary of the day that is one hundred and
eighty days following the closing date of the Transaction, and, subject to the
remaining terms of this Section 8.8, ending on and including the tenth
anniversary of the closing date of the Transaction (the "Put Option Exercise
Period"). In the event that a Put Limited Partner desires to exercise its Put
Option, such Put Limited Partner shall give, in accordance with Section 13.13
hereof, to the Partnership a written notice in the form attached hereto as Annex
A (a "Put Option Exercise Notice") of such Put Limited Partner's intention to
exercise its Put Option.
(c) Put Option Exercise Price. For each Put Unit purchased by
the Partnership pursuant to Section 8.8(b), the exercise price for the Put
Option (the "Put Option Exercise Price") shall be the sum of (i) $25.00 and (ii)
the balance, if any, on the Unpaid Distribution Account attributable to such Put
Units as of the date the Put Option Exercise Notice is given to the Partnership.
(d) Put Option Payment. If the Put Limited Partner exercises a
Put Option by timely delivery of a Put Option Exercise Notice, the Partnership
shall deliver to the Put Limited Partner, at the address specified in the Put
Option Exercise Notice, a check in the amount of the Put Option Exercise Price
not later than 45 days following the date on which the Put Option Exercise
Notice is given to the Partnership (the "Put Option Closing Date"). Upon (i) the
mailing or (ii) the
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personal delivery of the payment of the Put Option Exercise Price as provided
herein, such Put Units shall no longer be deemed outstanding, the holders
thereof shall cease to be Limited Partners of the Partnership, and all rights
whatsoever with respect to the Put Units (except the right of the Put Limited
Partners to receive the Put Option Exercise Price without interest) shall
terminate. The exercise of a Put Option and the payment of the Put Option
Exercise Price, shall not be subject to Sections 5.1(a), 9.2(g) or 10.2(g)
hereof.
ARTICLE 9
SPECIAL MATTERS CONCERNING SENIOR PREFERRED UNITS
9.1 Designation of Class. A class of Partnership Interests is
designated the "Senior Preferred Units" of the Partnership. The precise number
of Partnership Interests so designated shall equal the number of issued and
outstanding shares of Company Senior Preferred Stock immediately prior to the
Transaction.
9.2 Redemption.
(a) The Partnership, at the option of the General Partner, may
redeem the Senior Preferred Units, in whole or from time to time in part, at any
time and from time to time on and after December 31, 2006 at the price of $25.00
per Senior Preferred Unit, plus the amount of the Unpaid Senior Preferred
Distribution Account to, but not including, the Senior Preferred Redemption Date
attributable to each Senior Preferred Unit (the "Senior Preferred Redemption
Price"), except as may be provided below, without interest. Each date fixed for
redemption pursuant to Section 9.2(c) below is called a "Senior Preferred
Redemption Date." Any redemption pursuant to this Section 9.2 shall not be
subject to Section 5.1(a). On or before the Senior Preferred Redemption Date,
the Senior Preferred Limted Partner shall deliver to the Partnership any
certification required by the redemption notice and shall thereupon be entitled
to receive the Senior Preferred Redemption Price per Senior Preferred Unit
redeemed on the Senior Preferred Redemption Date.
(b) In case of redemption of less than all Senior Preferred
Units at the time outstanding, the Senior Preferred Units to be redeemed shall
be selected pro rata from the holders of record of such Senior Preferred Units
in proportion to the number of Senior Preferred Units held by such holders (with
adjustments to avoid redemption of fractional Senior Preferred Units) or by any
other equitable method determined by the General Partner.
(c) Notice of any redemption will be given by publication in a
newspaper of general circulation in the City of New York, such publication to be
made once a week for two successive weeks commencing not less than 30 nor more
than 60 days prior to the Senior Preferred Redemption Date. A similar notice
will be mailed by the Partnership, postage prepaid, not less than 30 nor more
than 60 days prior to the Senior Preferred Redemption Date, addressed to the
respective holders of record of the Senior Preferred Units to be redeemed at
their respective addresses as they appear on the records of the Partnership. No
failure to give such notice or any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any Senior
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Preferred Units except as to the holder to whom the Partnership has failed to
give notice or except as to the holder to whom notice was defective. In addition
to any information required by Law or by the applicable rules of any exchange
upon which the Senior Preferred Units may be listed or admitted to trading, such
notice shall state: (i) the Senior Preferred Redemption Date; (ii) the Senior
Preferred Redemption Price; (iii) the aggregate number of Senior Preferred Units
to be redeemed and, if less than all Senior Preferred Units held by such holder
are to be redeemed, the number of such Senior Preferred Units to be redeemed;
and (iv) that distributions on the Senior Preferred Units to be redeemed will
cease to accrue on the Senior Preferred Redemption Date. The notice shall also
require any certification of the Senior Preferred Limited Partner evidencing
such Partner's ownership of the Senior Preferred Units as the General Partner
may require.
(d) If notice has been mailed in accordance with Section
9.2(c) above and provided that on or before the Senior Preferred Redemption Date
specified in such notice all funds necessary for such redemption shall have been
set aside by the Partnership, separate and apart from its other funds in trust
for the pro rata benefit of the holders of the Senior Preferred Units called for
redemption, so as to be and to continue to be available therefor, then, from and
after the Senior Preferred Redemption Date, distributions on the Senior
Preferred Units so called for redemption shall cease to accrue, and such Senior
Preferred Units shall no longer be deemed to be outstanding and shall not have
the status of Senior Preferred Units, and all rights of the holders thereof as
Partners of the Partnership (except the right to receive from the Partnership
the Senior Preferred Redemption Price) shall cease.
(e) Any deposit of funds with a bank or trust company for the
purpose of redeeming Senior Preferred Units shall be irrevocable except that:
(i) the Partnership shall be entitled to receive from
such bank or trust company the interest or other earnings, if any,
earned on any money so deposited in trust, and the holders of any
Senior Preferred Units redeemed shall have no claim to such interest or
other earnings; and
(ii) any balance of monies so deposited by the
Partnership and unclaimed by the holders of the Senior Preferred Units
entitled thereto at the expiration of two (2) years after the
applicable Senior Preferred Redemption Date shall be repaid, together
with any interest or other earnings earned thereon, to the Partnership,
and after such repayment, the holders of the Senior Preferred Units
entitled to the funds so repaid to the Partnership shall look only to
the Partnership for payment without interest or other earnings.
(f) Unless the balance in the Unpaid Senior Preferred
Distribution Account through the date prior to the Senior Preferred Redemption
Date is zero or a sum sufficient for the payment thereof has been set apart for
payment, no Senior Preferred Units shall be redeemed unless all outstanding
Senior Preferred Units are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Senior Preferred
Units pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding Senior Preferred Units.
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(g) Notwithstanding anything in this Agreement to the
contrary, except as permitted by Section 8.8, the Partnership may not redeem,
purchase or otherwise acquire for any consideration any Partnership Interests
ranking junior to or on a parity with the Senior Preferred Units upon
liquidation or winding up of the Partnership (nor shall any moneys be paid to or
made available for a sinking fund for the redemption of any Partnership Interest
ranking junior to or on a parity with the Senior Preferred Units upon
liquidation, dissolution or winding up of the Partnership) unless (i) the
balance in the Unpaid Senior Preferred Distribution Account through the date
prior to such redemption, purchase or acquisition is zero or a sum sufficient
for the payment thereof has been set apart for payment or (ii) the consideration
to be given in such redemption, purchase or acquisition consists of Partnership
Interests ranking junior to the Senior Preferred Units as to distributions and
upon liquidation, dissolution and winding up.
9.3 Voting Rights.
(a) The holders of record of Senior Preferred Units shall not
be entitled to any voting rights except as hereinafter provided in this Section
9.3 or as otherwise provided by Law. The Partnership shall not (i) without the
affirmative vote or consent of the holders of at least a Majority in Interest of
the Senior Preferred Units outstanding at the time, given in person or by proxy,
either in writing or at a meeting (such Senior Preferred Units voting separately
as a class), authorize, create or issue, or increase the authorized or issued
amount of, any class or series of Partnership Interests ranking senior to the
Senior Preferred Units as to distributions or upon liquidation, dissolution or
winding up or reclassify any Partnership Interests into any such senior
Partnership Interests, or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such Partnership
Interests; or (ii) without the affirmative vote or consent of at least
two-thirds of the Senior Preferred Units outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such Senior Preferred
Units voting separately as a Class), amend the provisions of this Agreement,
whether by merger, consolidation or otherwise, so as to materially and adversely
affect any right, preference, privilege or voting power of the Senior Preferred
Units or the holders thereof; provided, however, that any increase in the amount
of the authorized Senior Preferred Units or the creation or issuance of any
other series of Senior Preferred Units, or any increase in the amount of
authorized Senior Preferred Units or any other series of Senior Preferred Units,
in each case ranking on a parity with or junior to the Senior Preferred Units
with respect to payment of distributions and the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers.
(b) In any matter in which the Senior Preferred Units may
vote, including any action by written consent, each Senior Preferred Units shall
be entitled to one vote (except as expressly provided herein or as may be
required by Law).
(c) Except as required by Law, the foregoing voting provisions
shall not apply if, at or prior to the time when the act with respect to which
such vote would otherwise be required shall be effected, all outstanding Senior
Preferred Units shall have been redeemed or shall have been called for
redemption upon proper notice and sufficient funds shall have been deposited in
trust to effect such redemption.
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9.4 Ranking.
The Senior Preferred Units shall, with respect to distribution rights
and distributions upon liquidation, dissolution and winding up, rank (i) senior
to the Common Units, the Redeemable Preferred Units, and all other series of
Partnership Interests issued from time to time by the Partnership other than any
series of Partnership Interests the terms of which specifically provide that
such series ranks senior to or on a parity with the Senior Preferred Units with
respect to distribution rights or distributions upon liquidation, dissolution or
winding up of the Partnership; (ii) on a parity with all other Partnership
Interests issued by the Partnership the terms of which specifically provide that
the Partnership Interests rank on a parity with the Senior Preferred Units with
respect to distributions and distributions upon liquidation, dissolution or
winding up of the Partnership or make no specific provisions as to their
ranking; and (iii) junior to all other Partnership Interests issued by the
Partnership the terms of which specifically provide that the Partnership
Interests rank senior to the Senior Preferred Units with respect to
distributions and distributions upon liquidation, dissolution or winding up of
the Partnership (the issuance of which must have been approved by a vote of at
least a Majority in Interest of the outstanding Senior Preferred Units).
ARTICLE 10
SPECIAL MATTERS CONCERNING REDEEMABLE PREFERRED UNITS
10.1 Designation of Class. A class of Partnership Interests is
designated the "Redeemable Preferred Units" of the Partnership. The precise
number of Partnership Interests so designated shall equal the number of issued
and outstanding shares of Company Redeemable Preferred Stock immediately prior
to the Transaction.
10.2 Redemption.
(a) The Partnership, at the option of the General Partner, may
redeem the Redeemable Preferred Units, in whole or from time to time in part, at
any time and from time to time on and after January 1, 2008 at the price of
$25.00 per Redeemable Preferred Unit, plus the amount of the Unpaid Redeemable
Preferred Distribution Account to, but not including, the Redeemable Preferred
Redemption Date attributable to each Redeemable Preferred Unit (the "Redeemable
Preferred Redemption Price"), except as may be provided below, without interest.
Each date fixed for redemption pursuant to Section 10.2(c) below is called a
"Redeemable Preferred Redemption Date." Any redemption pursuant to this Section
10.2 shall not be subject to Section 5.1(a). On or before the Redeemable
Preferred Redemption Date, the Redeemable Preferred Limited Partner shall
deliver to the Partnership any certification required by the redemption notice
and shall thereupon be entitled to receive the Redeemable Preferred Redemption
Price per Redeemable Preferred Unit redeemed on the Redeemable Preferred
Redemption Date.
(b) In case of redemption of less than all shares of
Redeemable Preferred Units at the time outstanding, the Redeemable Preferred
Units to be redeemed shall be selected pro rata from the holders of record of
such Redeemable Preferred Units in proportion to the number of
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Redeemable Preferred Units held by such holders (with adjustments to avoid
redemption of fractional interests) or by any other equitable method determined
by the General Partner.
(c) Notice of any redemption will be given by publication in a
newspaper of general circulation in the City of New York, such publication to be
made once a week for two successive weeks commencing not less than 30 nor more
than 60 days prior to the Redeemable Preferred Redemption Date. A similar notice
will be mailed by the Partnership, postage prepaid, not less than 30 nor more
than 60 days prior to the Redeemable Preferred Redemption Date, addressed to the
respective holders of record of the Redeemable Preferred Units to be redeemed at
their respective addresses as they appear on the records of the Partnership. No
failure to give such notice or any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any
Redeemable Preferred Units except as to the holder to whom the Partnership has
failed to give notice or except as to the holder to whom notice was defective.
In addition to any information required by Law or by the applicable rules of any
exchange upon which the Redeemable Preferred Units may be listed or admitted to
trading, such notice shall state: (i) the Redeemable Preferred Redemption Date;
(ii) the Redeemable Preferred Redemption Price; (iii) whether all or less than
all the outstanding Redeemable Preferred Units are to be redeemed and the
aggregate number of Redeemable Preferred Units to be redeemed and, if less than
all Redeemable Preferred Units held by such holder are to be redeemed, the
number of Redeemable Preferred Units to be redeemed; and (iv) that distributions
on the Redeemable Preferred Units to be redeemed will cease to accrue on the
Preferred Redemption Date. The notice shall also require any certification of
the Redeemable Preferred Limited Partner evidencing such Partner's ownership of
the Redeemable Preferred Units as the General Partner may require.
(d) If notice has been mailed in accordance with Section
10.2(c) above and provided that on or before the Redeemable Preferred Redemption
Date specified in such notice all funds necessary for such redemption shall have
been set aside by the Partnership, separate and apart from its other funds in
trust for the pro rata benefit of the holders of the Redeemable Preferred Units
called for redemption, so as to be and to continue to be available therefor,
then, from and after the Redeemable Preferred Redemption Date, distributions on
the Redeemable Preferred Units so called for redemption shall cease to accrue,
and such Redeemable Preferred Units shall no longer be deemed to be outstanding
and shall not have the status of Redeemable Preferred Units, and all rights of
the holders thereof as Partners of the Partnership (except the right to receive
from the Partnership the Redeemable Preferred Redemption Price) shall cease.
(e) Any deposit of funds with a bank or trust company for the
purpose of redeeming Redeemable Preferred Units shall be irrevocable except
that:
(i) the Partnership shall be entitled to receive from
such bank or trust company the interest or other earnings, if any,
earned on any money so deposited in trust, and the holders of any
Redeemable Preferred Units redeemed shall have no claim to such
interest or other earnings; and
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(ii) any balance of monies so deposited by the
Partnership and unclaimed by the holders of the Redeemable Preferred
Units entitled thereto at the expiration of two (2) years after the
applicable Redeemable Preferred Redemption Date shall be repaid,
together with any interest or other earnings earned thereon, to the
Partnership, and after such repayment, the holders of the shares
entitled to the funds so repaid to the Partnership shall look only to
the Partnership for payment without interest or other earnings.
(f) Unless the balance in the Unpaid Redeemable Preferred
Distribution Account through the date prior to the Redeemable Preferred
Distribution Date is zero or a sum in cash sufficient for the payment thereof
has been set apart for payment, no Redeemable Preferred Units shall be redeemed
unless all outstanding Redeemable Preferred Units are simultaneously redeemed;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of Redeemable Preferred Units pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of Redeemable
Preferred Units.
(g) Notwithstanding anything in this Agreement to the
contrary, except as permitted by Section 8.8, the Partnership may not redeem,
purchase or otherwise acquire for any consideration any Partnership Interests
ranking junior to or on a parity with the Redeemable Preferred Units upon
liquidation or winding up of the Partnership (nor shall any moneys be paid to or
made available for a sinking fund for the redemption of any Partnership Interest
ranking junior to or on a parity with the Redeemable Preferred Units upon
liquidation, dissolution or winding up of the Partnership) unless (i) the
balance in the unpaid Redeemable Preferred Distribution Account through the date
prior to such redemption, purchase or acquisition is zero or a sum sufficient
for the payment thereof has been set apart for payment or (ii) the consideration
to be given in such redemption, purchase or acquisition consists of Partnership
Interests ranking junior to the Redeemable Preferred Units as to distributions
and upon liquidation, dissolution and winding up.
10.3 Voting Rights.
(a) The holders of record of Redeemable Preferred Units shall
not be entitled to any voting rights except as hereinafter provided in this
Section 10.3 or as otherwise provided by Law. The Partnership shall not (i)
without the affirmative vote or consent of the holders of at least two-thirds of
the Redeemable Preferred Units outstanding at the time, given in person or by
proxy, either in writing or at a meeting (such Redeemable Preferred Units voting
separately as a class), authorize, create or issue, or increase the authorized
or issued amount of, any class or series of Partnership Interests ranking senior
to the Redeemable Preferred Units as to distributions or upon liquidation,
dissolution or winding up of the Partnership or reclassify any Partnership
Interests into any such senior Partnership Interests, or create, authorize or
issue any obligation or security convertible into or evidencing the right to
purchase any such Partnership Interests; or (ii) without the affirmative vote or
consent of at least two-thirds of the Redeemable Preferred Units outstanding at
the time, given in person or by proxy, either in writing or at a meeting (such
Redeemable Preferred Units voting separately as a Class), amend the provisions
of this Agreement so as to materially and adversely affect any right,
preference, privilege or voting power of the Redeemable Preferred Units or the
holders thereof; provided, however, that any increase in the amount of the
authorized
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Redeemable Preferred Units or the creation or issuance of any other series of
Redeemable Preferred Units, or any increase in the amount of authorized shares
of the Redeemable Preferred Units or any other series of Redeemable Preferred
Units, in each case ranking on a parity with or junior to the Redeemable
Preferred Units with respect to payment of distributions and the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
(b) In any matter in which the Redeemable Preferred Units may
vote, including any action by written consent, each share of Redeemable
Preferred Units shall be entitled to one vote (except as expressly provided
herein or as may be required by Law).
(c) Except as required by Law, the foregoing voting provisions
shall not apply if, at or prior to the time when the act with respect to which
such vote would otherwise be required shall be effected, all outstanding the
Redeemable Preferred Units shall have been redeemed or shall have been called
for redemption upon proper notice and sufficient funds shall have been deposited
in trust to effect such redemption.
10.4 Ranking.
The Redeemable Preferred Units shall, with respect to distribution
rights and distributions upon liquidation, dissolution and winding up of the
Partnership, rank (i) senior to the Common Units and all other series of
Partnership Interests issued from time to time by the Partnership other than any
series of Partnership Interests the terms of which specifically provide that the
Partnership Interests of such series rank senior to or on parity with the
Redeemable Preferred Units with respect to distribution rights or distributions
upon liquidation, dissolution or winding up of the Partnership; (ii) on a parity
with all other Partnership Interests issued by the Partnership the terms of
which specifically provide that such Partnership Interests rank on a parity with
the Redeemable Preferred Units with respect to distributions and distributions
upon liquidation, dissolution or winding up of the Partnership or make no
specific provisions as to their ranking; and (iii) junior to the Partnership's
Senior Preferred Units, and all other Partnership Interests issued by the
Partnership the terms of which specifically provide that the Partnership
Interests rank senior to the Redeemable Preferred Units with respect to
distributions and distributions upon liquidation, dissolution or winding up of
the Partnership (the issuance of which must have been approved by a vote of at
least two-thirds of the outstanding shares of Redeemable Preferred Units).
ARTICLE 11
DISSOLUTION
11.1 Dissolution Events.
(a) Except as set forth in this Article 11, no Partner shall
have the right to dissolve the Partnership. The Partnership shall not be
dissolved by the admission of Substituted Partners or Additional Limited
Partners, by the admission of a successor General Partner in accordance with the
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terms of this Agreement. Upon the transfer of the Partnership Interest of the
General Partner under Section 8.2 hereof, any successor General Partner shall
continue the business of the Partnership.
(b) The Partnership shall dissolve, and its affairs shall be
wound up, upon the first to occur of any of the following ("Liquidating Event"):
(i) an event of withdrawal of the General
Partner, as defined in the Act;
(ii) an election to dissolve the Partnership is
made by the General Partner upon 30 days'
written notice to all Limited Partners;
(iii) the entry of a decree of judicial
dissolution of the Partnership pursuant to
ss. 17-802 of the Act or any successor
provision;
(iv) the sale or disposition of all or
substantially all of the assets and
properties of the Partnership pursuant to
the terms of this Agreement; or
(v) the Bankruptcy of the General Partner.
(c) Election to Continue the Partnership. Following a
Liquidating Event described in Section 11.1(b)(i) or (v) hereof, the business of
the Partnership shall be continued with the Partnership properties and assets,
and such properties and assets shall not be liquidated, provided the Partnership
is continued as set forth in this Section 11.1(c). If the Partnership is so
dissolved, the Partnership and its business shall be continued pursuant to this
Section 11.1(c) if, within 90 days after the occurrence of such Liquidating
Event, a Majority in Interest of the remaining Partners elect to continue the
Partnership and elect a Person to be admitted to the Partnership as successor
General Partner. Upon the satisfaction of all conditions necessary to the
continuation of the Partnership, including the admission of a successor General
Partner and the amendment of the Partnership's Certificate (if required by
applicable law), the Partnership shall be continued without any further Approval
of any Partner, in which case the Partnership shall continue to conduct the
business of the Partnership with the Partnership's properties and assets in
accordance with, and the Partnership and interests of the Partners shall
continue to be governed by, the terms and provisions of this Agreement.
11.2 Winding Up.
(a) Upon the occurrence of a Liquidating Event (other than
those described in Section 11.1(b)(i) or (v) hereof) or upon the expiration of
the 90 day period for continuation of the Partnership set forth in Section
11.1(c) hereof with respect to Liquidating Events described in Section
11.1(b)(i) or (v) hereof if no election to continue the Partnership has
occurred, the Partnership shall continue solely for the purposes of winding up
its affairs in an orderly manner, liquidating its assets, and satisfying the
claims of its creditors and Partners. No Partner shall take any action that is
inconsistent with, or not necessary to or appropriate for, the winding up of the
Partnership's business and affairs. The General Partner or, in the event there
is no remaining General Partner, any Person
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elected by a Majority in Interest of the Limited Partners (the General Partner
or such other Person being referred to herein as the "Liquidator") shall be
responsible for overseeing the winding up and dissolution of the Partnership and
shall take full account of the Partnership's liabilities and property and the
Partnership property shall be liquidated as promptly as is consistent with
obtaining the fair value thereof, and the proceeds therefrom shall be applied
and distributed in the following order:
(i) First, to the payment and discharge of all
of the Partnership's debts and liabilities
to creditors other than the Partners;
(ii) Second, to the payment and discharge of all
of the Partnership's debts and liabilities
to the Partners;
(iii) Third, to each Senior Preferred Limited
Partner an amount equal to $25.00 per Senior
Preferred Unit plus such Senior Preferred
Limited Partner's proportional share of the
Unpaid Senior Preferred Distribution Account
to, but not including, the date of
liquidation (the "Senior Preferred
Liquidation Preference");
(iv) Fourth, to each Redeemable Preferred Limited
Partner an amount equal to $25.00 per
Redeemable Preferred Unit plus such
Redeemable Preferred Limited Partner's
proportional share of the Unpaid Redeemable
Preferred Distribution Account to, but not
including, the date of liquidation (the
"Redeemable Preferred Liquidation
Preference"), and
(v) The balance, if any, to the General Partner
and the Common Limited Partners pro rata in
accordance with the positive balances of
their Capital Accounts, after giving effect
to all contributions, distributions, and
allocations for all periods (including, if
applicable, the allocation of Profit and
Loss realized from or in connection with the
Liquidating Event and the winding up of the
Partnership under this Section 11.2).
The General Partner shall not receive any compensation for any services
performed pursuant to this Article 9.
(b) Notwithstanding the provisions of Section 11.2(a) hereof
that require liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, the Liquidator may, in its sole and
absolute discretion, defer for a reasonable time the liquidation of any assets
except those necessary to satisfy liabilities of the Partnership (including to
those Partners as creditors) and/or distribute to the Partners in lieu of cash,
in accordance with the provisions of Section 11.2(a) hereof, such Partnership
assets as the Liquidator deems not suitable for liquidation. The Liquidator
shall have the discretion to distribute cash or property to any Partner provided
that the fair market value of the cash and property received by all Partners in
the distribution is distributed in accordance with Section 11.2(a)(iii). In the
event that assets of the Partnership are distributed in
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kind to the Partners, adjustments to the Partners' Capital Accounts for purposes
of determining the amount of such assets distributable to each of the Partners
shall be made by taking into account the hypothetical gain or loss that would
have been recognized had the assets been sold for their fair market value on the
date of the distribution in kind. The Liquidator shall determine the fair market
value of any property distributed in kind using such reasonable method of
valuation as it may adopt. Notwithstanding the foregoing, if the property to be
distributed is securities of another issuer and the securities are then listed
on a national securities exchange or traded over the counter, the fair market
value of the securities shall be equal to the average of the closing prices, the
average of the last sales prices, or the average of the bid and asked prices, as
the case may be, for the 20 trading days immediately preceding the distribution
date. Notwithstanding the foregoing, any distributions payable from the Unpaid
Senior Preferred Distribution Account pursuant to Section 11.2(a)(iii) or the
Unpaid Redeemable Preferred Distribution Account pursuant to Section 11.2(a)(iv)
may be made only in cash.
(c) In the discretion of the Liquidator, a pro rata portion of
the distributions that would otherwise be made to the General Partner and
Limited Partners pursuant to this Article 11 may be:
(i) distributed to a trust established for the
benefit of the Partners for the purposes of
liquidating Partnership assets, collecting
amounts owed to the Partnership, and paying
any contingent or unforeseen liabilities or
obligations of the Partnership or the
Partners arising out of or in connection
with the Partnership. The assets of any such
trust shall be distributed to its
beneficiaries as soon as practicable, in the
reasonable discretion of the Liquidator, in
the same proportions as the amount
distributed to such trust by the Partnership
would otherwise have been distributed to the
Partners who are such beneficiaries or from
whom the beneficiaries derived such status
pursuant to this Agreement; or
(ii) withheld or escrowed to provide a reasonable
reserve for Partnership liabilities
(contingent or otherwise) and to reflect the
unrealized portion of any installment
obligations owed to the Partnership,
provided that such withheld or escrowed
amounts shall be distributed to the Partners
in the manner and order of priority set
forth in Section 11.2(a) as soon as
practicable.
11.3 Timing; Negative Capital Accounts. In the event that the
Partnership is "liquidated" upon the occurrence of a Liquidating Event within
the meaning of Regulations Section 1.704- 1(b)(2)(ii)(g), distributions shall be
made pursuant to this Article 11 to the General Partner and Limited Partners who
have positive balances in their Capital Accounts in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2). No Partner shall be liable to the Partnership
or to any other Partner for any negative balance outstanding in each such
Partner's Capital Account, whether such negative Capital Account results from
the allocation of Losses or other items of deduction and loss to such Partner or
from distributions to such Partner, and such Partner shall not have any
obligation to make
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any contribution to the capital of the Partnership with respect to such deficit
and such deficit shall not be considered a debt owed to the Partnership or,
except as required by the Act with respect to a deficit of the General Partner,
to any other Person for any purpose whatsoever.
11.4 Deemed Distribution and Recontribution. Notwithstanding any other
provision of this Article 11, in the event the Partnership is liquidated within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event
has occurred, the Partnership's property shall not be liquidated, the
Partnership's liabilities shall not be paid or discharged, and the Partnership's
affairs shall not be wound up. Instead, for federal income tax purposes and for
purposes of maintaining Capital Accounts pursuant to this Agreement, the
Partnership shall be deemed to have distributed the property in kind to the
General Partner and Limited Partners, who shall be deemed to have assumed and
taken such property subject to all Partnership liabilities, all in accordance
with their respective Capital Accounts. Immediately thereafter, the General
Partner and Limited Partners shall be deemed to have recontributed the
Partnership property in kind to the Partnership, which shall be deemed to have
assumed and taken such property subject to all such liabilities.
11.5 Rights of Partners. Except as otherwise provided in this
Agreement, each Partner shall look solely to the assets of the Partnership for
the return of his Capital Contributions and shall have no right or power to
demand or receive property other than cash from the Partnership. Except as
otherwise provided in this Agreement, no Partner shall have priority over any
other Partner as to the return of his Capital Contributions, distributions, or
allocations.
11.6 Notice of Dissolution. In the event a Liquidating Event occurs or
an event occurs that would, but for an election or vote by one or more Partners
required pursuant to Section 11.1 hereof, result in a dissolution of the
Partnership, the General Partner shall, within 30 days thereafter, provide
written notice thereof to each of the Partners.
11.7 Termination of Partnership and Cancellation of Certificate of
Limited Partnership. Upon the completion of the liquidation of the Partnership
cash and property as provided in Section 11.2 hereof, the Partnership shall be
terminated, a certificate of cancellation shall be filed, and all qualifications
of the Partnership as a foreign limited partnership in jurisdictions other than
the State of Delaware shall be canceled and such other actions as may be
necessary to terminate the Partnership shall be taken.
11.8 Reasonable Time for Winding-Up. A reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 11.2 hereof, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions
of this Agreement shall remain in effect between the Partners during the period
of liquidation.
11.9 Waiver of Partition. Each Partner hereby waives any right to
partition of the Partnership property.
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ARTICLE 12
POWER OF ATTORNEY
12.1 Power of Attorney.
(a) Each Limited Partner and each Assignee hereby constitutes
and appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to, and provided that
any action taken pursuant to the power granted to any such Person pursuant to
this Section 12.1 is not inconsistent with any other provision of this
Agreement,:
(i) execute, swear to, seal, acknowledge,
deliver, file and record in the appropriate
public offices (A) all certificates,
documents and other instruments (including,
without limitation, this Agreement and the
Certificate and all amendments or
restatements thereof) that the General
Partner or the Liquidator deems appropriate
or necessary to form, qualify or continue
the existence or qualification of the
Partnership as a limited partnership (or a
partnership in which the limited partners
have limited liability to the extent
provided by applicable law) in the State of
Delaware and in all other jurisdictions in
which the Partnership may or plans to
conduct business or own property; (B) all
instruments that the General Partner or
Liquidator deems appropriate or necessary to
reflect any amendment, change, modification
or restatement of this Agreement as
permitted in and in accordance with this
Agreement; (C) all conveyances and other
instruments or documents that the General
Partner deems appropriate or necessary to
reflect the dissolution and liquidation of
the Partnership pursuant to the terms of
this Agreement, including, but not limited
to, a certificate of cancellation; (D) all
instruments relating to the admission,
withdrawal, removal or substitution of any
Partner pursuant to, or other events
described in, Articles 8 or 11 hereof or the
Capital Contribution of any Partner; and (E)
all certificates, documents and other
instruments relating to the determination of
the rights, preferences and privileges of
Partnership Interests; and
(ii) execute, swear to, seal, acknowledge and
file all ballots, consents, approvals,
waivers, certificates and other instruments
appropriate or necessary, in the sole and
absolute discretion of the General Partner
or Liquidator, to evidence, confirm or
ratify any vote, consent, approval,
agreement or other action which is made or
given by the Partners hereunder or is
consistent with the terms of this Agreement
or appropriate or necessary, in the sole
discretion of the General
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Partner or Liquidator, to effectuate the
terms or intent of this Agreement.
(b) The foregoing grant of authority:
(i) is a special power of attorney coupled with an
interest in favor of the General Partner and, as such, shall be
irrevocable and shall survive the dissolution of all or any of the
Limited Partners; and
(ii) may be exercised for each Limited Partner by a
signature of the General Partner or by listing the names of all the
Limited Partners and executing any instrument with the signature of the
General Partner acting as attorney-in-fact for all of them.
(c) Nothing contained herein shall be construed as authorizing
the General Partner or Liquidator to amend this Agreement except in accordance
with the terms of Section 13.1 hereof or as may be otherwise expressly provided
for in this Agreement.
12.2 Duration of Power. The power of attorney granted herein is hereby
declared to be irrevocable and a power coupled with an interest in recognition
of the fact that each of the Partners will be relying upon the power of the
General Partner or Liquidator to act as contemplated by this Agreement in any
filing or other action by it on behalf of the Partnership, and it shall survive
and not be affected by the subsequent Incapacity of any Limited Partner or
Assignee and the transfer of all or any portion of such Limited Partner's or
Assignee's Partnership Interest, shall survive the Incapacity of the Limited
Partner, and shall extend to such Limited Partner's or Assignee's heirs,
successors, assigns and personal representatives. Each such Limited Partner or
Assignee hereby agrees to be bound by any action taken by the General Partner or
Liquidator, acting in good faith pursuant to such power of attorney; and each
such Limited Partner or Assignee hereby waives any and all defenses that may be
available to contest, negate or disaffirm the action of the General Partner or
Liquidator, taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within 15 days after receipt of the General Partner's or
Liquidator's request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidator, as the case may be,
reasonably deems necessary to effectuate this Agreement and the purposes of the
Partnership.
ARTICLE 13
MISCELLANEOUS
13.1 Amendments.
(a) Amendments to this Agreement may be proposed by the
General Partner and the General Partner shall submit any proposed amendment to
all of the Limited Partners entitled to vote thereon or Approve. The General
Partner shall seek the Approval of the Partners on the proposed amendment or
shall call a meeting to vote thereon and to transact any other business that
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it may deem appropriate. Except as provided in Section 13.1(b) or 13.1(c), a
proposed amendment shall be adopted and be effective as an amendment hereto if
it is approved by the General Partner and it receives the Approval of a Majority
in Interest of all Partners.
(b) Notwithstanding Section 13.1(a) hereof, the General
Partner shall have the power, without the Approval of the Limited Partners, to
amend this Agreement as may be required to facilitate or implement any of the
following purposes:
(i) to add to the obligations of the General
Partner or surrender any right or power
granted to the General Partner or any
Affiliate of the General Partner for the
benefit of the Limited Partners;
(ii) to reflect the admission, substitution,
termination, or withdrawal of Partners in
accordance with this Agreement;
(iii) to set forth the designations, rights
powers, duties and preferences of the
holders of any additional Partnership
Interests issued pursuant to Section 7.3
hereof;
(iv) to reflect any change that does not
adversely affect the Limited Partners in any
material respect, or to cure any ambiguity,
correct or supplement any provision in this
Agreement not inconsistent with law or with
other provisions, or make other changes with
respect to matters arising under this
Agreement that will not be inconsistent with
law or with the provisions of this
Agreement; and
(v) to satisfy any requirements, conditions, or
guidelines contained in any order,
directive, opinion, ruling, or regulations
of a federal or state agency or contained in
federal or state law.
The General Partner shall provide notice promptly to the Limited Partners when
any action under this Section 13.1(b) is taken.
(c) Notwithstanding Sections 13.1(a) and 13.1(b) hereof, this
Agreement, including any definitional provisions under Article 1 hereof, shall
not be amended without the Approval of each Partner adversely affected if such
amendment would (i) convert a Limited Partner Interest in the Partnership into a
General Partner Interest, (ii) modify the limited liability of a Limited Partner
in a manner adverse to such Limited Partner, (iii) alter rights of the Partner
to receive distributions pursuant to Article 5 or the allocations specified in
Article 5 or Article 11 in a manner adverse to such Partner (except as permitted
pursuant to Section 3.2 and Section 11.1(b)(iii) hereof), (iv) cause the
termination of the Partnership prior to the time set forth in Sections 2.9 or
11.1 hereof, or (v) amend Section 2.8, Section 2.9, Section 6.2, Article 11 or
any provision of this Section 13.1(c).
13.2 Meetings of the Partners.
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(a) Meetings of the Partners may be called by the General
Partner. The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners not less than seven
Business Days nor more than 30 Business Days prior to the date of such meeting.
Partners may vote in person or by proxy at such meeting. Whenever the vote or
Approval of Partners is permitted or required under this Agreement, such vote or
Approval may be given at a meeting of Partners or may be given in accordance
with the procedure prescribed in the definition of "Approved" or "Approval" or
Section 13.2(b) hereof. Except as otherwise expressly provided in this
Agreement, the Approval of holders of a Majority in Interest of the Limited
Partners shall control.
(b) Any action required or permitted to be taken at a meeting
of the Partners may be taken without a meeting if, at least five Business Days
prior to the taking of such action, written notice is sent to all Partners whose
vote or Approval is required with respect to such action, and a written consent
setting forth the action so taken is signed by a Majority in Interest of the
Partners (or such other percentage as is expressly required by this Agreement)
whose vote or consent is required with respect to such action. Such consent may
be in one instrument or in several instruments and shall have the same force and
effect as a vote of a Majority in Interest of the Partners (or such other
percentage as is expressly required by this Agreement) whose vote or consent is
required with respect to such action. Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.
(c) Each Limited Partner may authorize any Person or Persons
to act for him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Limited Partner executing it, such
revocation to be effective upon the Partnership's receipt of written notice of
such revocation from the Limited Partner executing such proxy.
(d) Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such
rules for the conduct of the meeting as the General Partner or such other Person
deems appropriate in his sole discretion.
13.3 Complete Agreement. This Agreement and each agreement referred to
herein and therein constitutes the complete and exclusive statement of the
agreement between the Partners and replaces and supersedes any other oral or
written agreements by and among the Partners or any of them.
13.4 Governing Law. This agreement and the rights of the parties
hereunder shall be governed by, interpreted and enforced in accordance with, the
internal laws (exclusive of the choice of law provisions thereof) of the State
of Delaware as to all matters, including, but not limited to, matters of
validity, construction, effect, performance and remedies.
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13.5 Binding Effect. Subject to the provisions of this Agreement
relating to transferability, this Agreement shall be binding upon and inure to
the benefit of the parties signatory hereto, and their respective distributes,
successors and assigns.
13.6 Headings. All headings, title or captions herein are inserted only
for convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.
13.7 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstances is or becomes invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by Law.
13.8 Multiple Counterparts; Facsimile Signatures. This Agreement may be
executed in several counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same instrument. However, in making
proof hereof it shall be necessary to produce only one copy hereof signed by the
party against whom enforcement is sought. Each party hereto hereby acknowledges
the effectiveness of, and agrees to accept, facsimile signatures of any other
party hereto for purposes of executing this Agreement; provided, however, that
any party executing this Agreement by facsimile signature shall provide the
General Partner with the number of original signatures pages as the General
Partner may specify as soon as is practicable following a request for same by
the General Partner.
13.9 Execution of Documents. Each party hereto agrees to execute, with
acknowledgment or affidavit, if required, any and all documents and writings
which may be necessary or expedient in connection with the achievement of the
Partnership's purposes, specifically including the amendment to the
Partnership's Certificate contemplated by the terms hereof and all further
amendments thereto or cancellation thereof.
13.10 Reliance on Authority. In no event shall any Person dealing with
the General Partner be obligated to ascertain that the terms of this Agreement
have been complied with, or be obligated to inquire into the necessity or
expediency of any act or action of the General Partner; and every contract,
agreement, deed, mortgage, promissory note, or other instrument or document
executed by the General Partner with respect to the Partnership shall be
conclusive evidence in favor of any and every Person relying thereon or claiming
thereunder that (i) at the time of the execution and/or delivery thereof, this
Agreement was in full force and effect, (ii) such instrument or document was
duly executed in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership and all of the Partners thereof, and (iii) the
General Partner was duly authorized and empowered to execute and deliver any and
every such instrument or documents for and on behalf of the Partnership.
13.11 No Third Party Beneficiary. Except as otherwise provided herein,
this Agreement is made solely and specifically among and for the benefit of the
parties hereto and their respective successors and assigns, and no other Person
shall have any rights, interest or claims hereunder or be
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entitled to any benefits under or on account of this Agreement as a third party
beneficiary or otherwise.
13.12 References to this Agreement. Numbered or lettered articles,
sections and subsections herein contained refer to articles, sections and
subsections of this Agreement unless otherwise expressly stated.
13.13 Notices. All notices and other communications provided for herein
shall be given or made by telex, telecopy, facsimile, telegraph, cable or in
writing and telexed, telecopied, faxed, telegraphed, cabled, mailed or delivered
to the intended recipient at the address set forth in the books and records of
the Partnership. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when received by telex,
telecopy, facsimile, telegraph or cable or personally delivered by a courier
service or, by mail, postage prepaid and return receipt requested, in each case,
given or addressed as aforesaid. Any party hereto may, at any time by giving ten
Business Days' prior written notice to the other parties hereto, designate any
other address in substitution of the foregoing address to which such notice
shall be given.
13.14 Title to Partnership Property. Title to Partnership property,
whether real, personal or mixed and whether tangible or intangible, and all
interests in such property shall be deemed to be owned by the Partnership as an
entity, and no Partner, individually or collectively, shall have any ownership
interest in such Partnership property or any portion thereof except as a Partner
in the Partnership. Title to any or all of the Partnership property may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership property
for which legal title is held in the name of the General Partner or any nominee
or Affiliate of the General Partner shall be held for the use and benefit of the
Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its best efforts to cause beneficial
and record title to such property to be vested in the Partnership as soon as
reasonably practicable. All Partnership assets and properties shall be recorded
as the property of the Partnership in its books and records, irrespective of the
name in which legal title to such Partnership property is held.
13.15 Reliance on Authority of Person Signing Agreement. In the event
that a Partner is any Person other than a natural person, neither the
Partnership nor any Partner shall (i) be required to determine the authority of
the Person signing this Agreement to make any commitment or undertaking on
behalf of such first Person or to determine any fact or circumstance bearing
upon the existence of the authority of such Person; or (ii) be required to see
to the application or distribution of proceeds paid or credited to persons
signing this Agreement on behalf of such first Person.
13.16 Waiver. No failure by any party to insist upon strict performance
of any covenant, duty, agreement or condition of this Agreement or to the
exercise of any right or remedy resulting from a breach thereof shall
constitute, or be deemed to constitute, a waiver of any such breach or any other
covenant, duty, agreement or condition.
53
<PAGE> 58
IN WITNESS WHEREOF, the General Partner and the Limited Partner have
executed this Agreement on the date set forth opposite their signatures.
SIGNATURE PAGES OF PARTNERS ATTACHED
54
<PAGE> 59
This signature page is attached to that certain Limited Partnership
Agreement of OLY HIGHTOP PARENT, L.P.
GENERAL PARTNER:
OLY HIGHTOP PARENT GP, LLC, a Texas limited
liability company
By: Oly Hightop Holding, L.P., its Member
By: Oly Hightop, LLC, its General Partner
By: Oly Hightop, L.P., its Member
By: Oly Hightop Two GP, LLC, its General Partner
By: Oly Real Estate Partners II, L.P., its Member
By: Oly REP II, L.P., its General Partner
By: Oly Fund II, LLC, its General Partner
Date: September 22, 1999 By: /s/ DAVID B. DENIGER
-------------------------
Name: David B. Deniger
-----------------------
Title: President
---------------------
55
<PAGE> 60
This signature page is attached to that certain Limited Partnership
Agreement of OLY HIGHTOP PARENT, L.P..
COMMON LIMITED PARTNER:
OLY HIGHTOP HOLDING, L.P., a Delaware limited
partnership
By: Oly Hightop, LLC, its General Partner
By: Oly Hightop, L.P., its Member
By: Oly Hightop Two GP, LLP, its General Partner
By: Oly Real Estate Partners II, L.P., its Member
By: Oly REP II, L.P., its General Partner
By: Oly Fund II, LLC, its General Partner
Date: September 22, 1999 By: /s/ DAVID B. DENIGER
--------------------------------
Name: David B. Deniger
------------------------------
Title: President
-----------------------------
56
<PAGE> 61
ANNEX I
PUT OPTION EXERCISE NOTICE
The undersigned hereby irrevocably elects to exercise its Put Option
pursuant to Section 8.8(b) of the Limited Partnership Agreement of Oly Hightop
Parent, L.P. (the "Agreement") to cause the Partnership to purchase all of the
Put Units held by the undersigned and herewith requests payment of the Put
Option Exercise Price (such payment being in cash or check payable to the order
of the undersigned) on the terms and conditions specified in the Agreement.
(Capitalized terms not defined herein shall have the meaning given them in the
Agreement.)
The undersigned hereby represents and warrants that: (i) the
undersigned is the record or beneficial owner of the Put Units conveyed by this
Put Option Exercise Notice, and (ii) the undersigned has good and indefeasible
title to all of the Put Units conveyed by this Put Option Exercise Notice, free
and clear of all liens, claims, security interests or other encumbrances.
The undersigned hereby requests that payment for the Put Units be
delivered to:
- --------------------------------------------------------------------------------
(Name)
- --------------------------------------------------------------------------------
(Address)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Social Security or other taxpayer identifying number)
Dated: , 19
--------------------- ----
Name of Registered Owner:
-------------------------------------------------------
- --------------------------------------------------------------------------------
Address:
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Social Security or other taxpayer identifying number)
Signature:
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Annex I - 1
<PAGE> 62
IMPORTANT: ALL SIGNATURES MUST BE GUARANTEED IN THE SPACE
PROVIDED BELOW BY A FIRM THAT IS A MEMBER OF A
NATIONAL SECURITIES EXCHANGE OR OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A
COMMERCIAL BANK OR TRUST COMPANY LOCATED IN THE
UNITED STATES OF AMERICA.
SIGNATURE GUARANTEE:
Name:
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(please print)
By:
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Title:
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Annex I - 2
