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EXHIBIT 3.A
ANNEX B
TO
PROXY STATEMENT
COPY OF THE PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
June 8, 1989, is entered into by and among Plum Creek Management
Company, a Delaware corporation, as the General Partner and David D. Leland as
the Organizational Limited Partner, together with any other Persons who become
Partners in the Partnership as provided herein. In consideration of the
covenants, conditions and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
ORGANIZATIONAL MATTERS
1.1 Formation and Continuation. The General Partner and the Organizational
Limited Partner have previously formed the Partnership as a limited partnership
pursuant to the provisions of the Delaware Act and hereby amend and restate the
original Agreement of Limited Partnership in its entirety. Subject to the
provisions of this Agreement, the General Partner and the Organizational Limited
Partner hereby continue the Partnership as a limited partnership pursuant to the
provisions of the Delaware Act. Except as expressly provided herein to the
contrary, the rights and obligations of the Partners and the administration,
dissolution and termination of the Partnership shall be governed by the Delaware
Act. The Partnership Interest of each Partner shall be personal property for all
purposes.
1.2 Name. The name of the Partnership shall be "Plum Creek Timber Company,
L.P." The Partnership's business may be conducted under any other name or names
deemed advisable by the General Partner, including the name of 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 discretion may change the name
of the Partnership at any time and from time to time and shall notify the
Limited Partners of such change in the next regular communication to Limited
Partners, provided, however, that without the consent of the holders of 66 2/3%
of the outstanding Units, the General Partner shall not cease to use the name,
"Plum Creek".
1.3 Registered Office; Principal Office. The address of the registered
office of the Partnership in the State of Delaware shall be located at The
Corporation Trust Center, 1209 Orange Street, New Castle County, Wilmington,
Delaware 19801, and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office shall be The
Corporation Trust Company. The principal office of the Partnership shall be 999
Third Avenue, Seattle, Washington 98104 or such other place as the General
Partner may from time to time designate by notice to the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems advisable.
1.4 Power of Attorney. (a) Each Limited Partner and each Assignee hereby
constitutes and appoints each of the General Partner and, if a Liquidator shall
have been selected pursuant to Section 14.3 hereof, the Liquidator severally
(and any successor to either thereof by merger, transfer, assignment, election
or otherwise) and authorized officers and attorneys-in-fact of each, 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:
(i) execute, swear to, 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 of Limited Partnership 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) in the State of Delaware and in
all other jurisdictions in which the Partnership may conduct business or
own property; (B) all instruments that the General Partner or the
Liquidator deems
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appropriate or necessary to reflect any amendment, change, modification or
restatement of this Agreement or the Deposit Agreement in accordance with
their respective terms; (C) all conveyances and other instruments or
documents that the General Partner or the Liquidator deems appropriate or
necessary to reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement, including, without limitation, 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, Article XI, XII, XIII or XIV hereof or the Capital
Contribution of any Partner; (E) all certificates, documents and other
instruments relating to the determination of the rights, preferences and
privileges of any class or series of Units or other securities issued
pursuant to Section 4.4 hereof; and (F) all agreements and other
instruments (including, without limitation, a certificate of merger)
relating to a merger or consolidation of the Partnership pursuant to
Article XVI hereof;
(ii) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole discretion of the General Partner or the Liquidator,
to make, evidence, give, confirm or ratify any vote, consent, approval,
agreement or other action which is made or given by the Partners hereunder
or is consistent with the terms of this Agreement or appropriate or
necessary, in the sole discretion of the General Partner or the Liquidator,
to effectuate the terms or intent of this Agreement; provided, that when
required by Section 15.3 hereof or any other provision of this Agreement
which establishes a percentage of the Limited Partners or of the Limited
Partners of any class or series required to take any action, the General
Partner or the Liquidator may exercise the power of attorney made in this
subsection (ii) only after the necessary vote, consent or approval of the
Limited Partners or of the Limited Partners of such class or series; and
(iii) on behalf of the Limited Partners and the Assignees, enter into
the Deposit Agreement and to deposit Certificates in the Deposit Account
pursuant to the Deposit Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article XV hereof or as may be
otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution,
bankruptcy or termination of any Limited Partner or Assignee and the transfer of
all or any portion of such Limited Partner's or Assignee's Partnership Interest
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 representation made by the General Partner or
the Liquidator, acting in good faith pursuant to such power of attorney; and
each such Limited Partner or Assignee hereby waives any and all defenses which
may be available to contest, negate or disaffirm the action of the General
Partner or the Liquidator, taken in good faith under such power of attorney.
Each 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 the Liquidator's request therefor, such further designation, powers of
attorney and other instruments as the General Partner or the Liquidator deems
necessary to effectuate this Agreement and the purposes of the Partnership.
1.5 Term. The Partnership commenced upon the filing of the Certificate of
Limited Partnership in accordance with the Delaware Act and shall continue in
existence until the close of Partnership business on December 31, 2047, or until
the earlier termination of the Partnership in accordance with the provisions of
Article XIV hereof.
1.6 Possible Restrictions on Transfer. Notwithstanding anything to the
contrary contained herein, in the event of (i) the enactment (or imminent
enactment) of any legislation, (ii) the publication of any temporary or final
regulation by the Treasury Department, (iii) any ruling by the Internal Revenue
Service or (iv) any judicial decision, that, in any such case, in the Opinion of
Counsel, would result in the taxation of the Partnership for federal income tax
purposes as a corporation or as an association taxable as a corporation, then,
either (a) the General Partner may impose such restrictions on the transfer of
Units or Partnership Interests as may be required, in the Opinion of Counsel, to
prevent the taxation of the Partnership for federal income tax purposes as a
corporation or as an association taxable as a corporation, including making any
amendments
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to this Agreement as the General Partner in its sole discretion may determine to
be necessary or appropriate in order to impose such restrictions, provided, that
any such amendment to this Agreement which would result in the delisting or
suspension of trading of any class of Units on any National Securities Exchange
on which such class of Units is then traded must be approved by the holders of
at least 66 2/3% of the outstanding Units of such class (excluding for purposes
of such determination any Units of such class owned by the General Partner and
its Affiliates) or (b) upon the recommendation of the General Partner and the
approval by the holders of at least 66 2/3% of the outstanding Units (excluding
for purposes of such determination any Units owned by the General Partner and
its Affiliates), the Partnership may be converted into and reconstituted as a
trust or any other type of legal entity (the "New Entity") in the manner and on
other terms so recommended and approved. In such event, the business of the
Partnership shall be continued by the New Entity and the Units shall be
converted into equity interests of the New Entity in the manner and on the terms
so recommended and approved. Notwithstanding the foregoing, no such
reconstitution shall take place unless the Partnership shall have received an
Opinion of Counsel to the effect that the liability of the Limited Partners for
the debts and obligations of the New Entity shall not, unless such Limited
Partners take part in the control of the business of the New Entity, exceed that
which otherwise had been applicable to such Limited Partners as limited partners
of the Partnership under the Delaware Act.
ARTICLE II
DEFINITIONS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 12.4 hereof and who is shown as such on
the books and records of the Partnership.
"Adjusted Capital Account" shall mean the Capital Account maintained for
each Partner as of the end of each fiscal year of the Partnership (a) increased
by any amounts which such Partner is obligated to restore under the standards
set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated
to restore under Treasury Regulation Sections 1.704-1T(b)(4)(iv)(f) and
1.704-1T(b)(4)(iv)(h)(5)) and (b) decreased by (i) the amount of all losses and
deductions that, as of the end of such fiscal year, are reasonably expected to
be allocated to such Partner in subsequent years under Sections 704(e)(2) and
706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii)
the amount of all distributions that, as of the end of such fiscal year, are
reasonably expected to be made to such Partner in subsequent years in accordance
with the terms of this Agreement or otherwise to the extent they exceed
offsetting increases to such Partner's Capital Account that are reasonably
expected to occur during (or prior to) the year in which such distributions are
reasonably expected to be made (other than increases pursuant to a minimum gain
chargeback pursuant to Sections 5.1(d)(i) or 5.1(d)(ii)). The foregoing
definition of Adjusted Capital Account is intended to comply with the provisions
of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
"Adjusted Property" means any property the Carrying Value of which has been
adjusted pursuant to Section 4.6(d)(i) or (d)(ii) hereof. Once an Adjusted
Property is deemed distributed by, and recontributed to, the Partnership for
federal income tax purposes upon a termination thereof pursuant to Section 708
of the Code, such property shall thereafter constitute a Contributed Property
until the Carrying Value of such property is further adjusted pursuant to
Section 4.6(d)(i) or (d)(ii) hereof.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, the Person in question. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agreed Allocation" shall mean any allocation, other than a Required
Allocation, of an item of income, gain, deduction or loss pursuant to the
provisions of Section 5.1, including a Curative Allocation (if appropriate to
the context in which the term "Agreed Allocations" is used).
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"Agreed Value" of any Contributed Property means the fair market value of
such property or other consideration at the time of contribution as determined
by the General Partner using such reasonable method of valuation as it may
adopt; provided, however, that the Agreed Value of any property deemed
contributed to the Partnership for federal income tax purposes upon termination
and reconstitution thereof pursuant to Section 708 of the Code shall be
determined in accordance with Section 4.6(c)(i) hereof. Subject to Section
4.6(c)(i) hereof, the General Partner shall, in its sole discretion, use such
method as it deems reasonable and appropriate to allocate the aggregate Agreed
Value of Contributed Properties contributed to the Partnership in a single or
integrated transaction among each separate property on a basis proportional to
their fair market values.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.
"Assignee" means a Non-citizen Assignee or a Person to whom one or more
Units have been transferred in a manner permitted under this Agreement and who
has executed and delivered a Transfer Application as required by this Agreement,
but who has not become a Substituted Limited Partner.
"Available Cash" means, with respect to any calendar quarter, (a) the sum
of:
(i) the Partnership's net income (or net loss) (excluding gain on the
sale of any Capital Asset) for such quarter,
(ii) the amount of depletion, depreciation, amortization and other
noncash charges (less noncash credits) utilized in determining net income
of the Partnership for such quarter,
(iii) the amount of any reduction in reserves of the Partnership of
the types referred to in (b)(v) below,
(iv) proceeds received by the Partnership from the sale of any of the
Designated Acres, and
(v) any Cash from Capital Transactions received by the Partnership
during such quarter in specific contemplation that such Cash from Capital
Transactions will be used to refund or refinance any payment of Debt of the
type specified in clause (b)(i) below which was made in any of the two
prior quarters,
less (b) the sum of:
(i) all payments of principal on Debt made by the Partnership in such
quarter (excluding any payments of principal on Debt made with Cash from
Capital Transactions received by the Partnership during such quarter or the
immediately preceding four quarters),
(ii) capital expenditures made by the Partnership during such quarter
(excluding any capital expenditures for such quarter made with Cash from
Capital Transactions received by the Partnership during such quarter or the
immediately preceding four quarters, and capital expenditures which the
General Partner anticipates will be financed with Cash from Capital
Transactions to be received by the Partnership prior to the end of the next
succeeding quarter),
(iii) the amount of any capital expenditures, or investments as
specified in clause (b)(iv) below, made by the Partnership in the
immediately preceding quarter which was anticipated would be financed from
Cash from Capital Transactions but which have not been financed from such
source prior to the end of the quarter succeeding the quarter in which any
such capital expenditure or investment was made,
(iv) investments in any Subsidiary, Affiliate or any such other entity
to the extent that such investments are not otherwise included under
clauses (b)(i), (ii) or (iii) above (excluding any such investments made
with Cash from Capital Transactions received by the Partnership during such
quarter or the immediately preceding four quarters, or which the General
Partner anticipates will be made, with Cash from Capital Transactions to be
received by the Partnership prior to the end of the next succeeding
quarter);
(v) the amount of any reserves of the Partnership established during
such quarter which are necessary or appropriate (A) to provide funds for
the future payment of items of the types specified in clauses (b)(i) and
(b)(ii) above, (B) to provide additional working capital, (C) to provide
funds for cash distributions with respect to any one or more of the next
four quarters or (D) to provide funds for the future payment of interest in
an amount equal to the interest to be accrued in the next quarter.
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provided, however (i) net proceeds to the Partnership from the issuance of SPUs
shall be deemed to be Available Cash, and shall be deemed to be received, for
purposes of determining Available Cash, during the quarter in respect of which
such SPUs are issued, even if such cash is received by the Partnership after the
last day of such quarter, and (ii) any disbursements made of the types described
in clauses (b)(i)-(iii), or reserves established, in accordance with clause
(b)(v), within 45 days after the end of any quarter as to which SPUs were
purchased in respect of such quarter in accordance with the Distribution Support
Agreement shall be deemed to be made or established, for purposes of determining
Available Cash, within such quarter if the General Partner so determines,
provided that the aggregate amount of such disbursements made or reserves
established which are so determined as being made within such quarter shall not
exceed the aggregate dollar amount of SPUs purchased in respect of such quarter.
Notwithstanding the foregoing, "Available Cash" shall not take into account
any reductions in reserves or disbursements made or reserves established after
commencement of the dissolution and liquidation of the Partnership. In
determining "Available Cash", (i) all items under clauses (a)(i)-(v) above and
all items under clauses (b)(i)-(v) above shall be calculated on a combined basis
with any Subsidiary of the Partnership whose income is accounted for on a
combined basis with the Partnership and, in accordance therewith, "Available
Cash" shall include a percentage of each such item of each such Subsidiary equal
to the Partnership's percentage ownership interest in such Subsidiary, provided,
however, that the items under clauses (a)(i)-(v) above shall only be included in
Available Cash to the extent that the General Partner determines such amount to
be legally available for dividends or distributions to the Partnership by such
Subsidiary, (ii) the amount of net income and the amount of depletion,
depreciation, amortization and other noncash charges utilized in determining net
income shall be determined, with respect to the Partnership, by the General
Partner in accordance with generally accepted accounting principles and, with
respect to any Subsidiary, by its Board of Directors (or by such other body or
Person which has the ultimate management authority of such Subsidiary) in
accordance with generally accepted accounting principles, (iii) the net income
of any Subsidiary shall be determined on an after-tax basis, (iv) the amount of
any reductions in, or additions to, reserves for purposes of clauses (a)(iii)
and (b)(v) above shall be determined, with respect to the Partnership, by the
General Partner in its sole discretion as it deems appropriate and, with respect
to any Subsidiary, by its Board of Directors (or by such other body or Person
which has the ultimate management authority of such Subsidiary) in its sole
discretion as it deems appropriate and (v) any determination of whether any
capital expenditures or investments are financed, or anticipated to be financed,
with Cash from Capital Transactions for purposes of clauses (b)(ii) and (b)(iv)
above shall be made, with respect to the Partnership, by the General Partner in
its sole discretion as it deems appropriate and, with respect to any Subsidiary,
by its Board of Directors (or by such other body or person which has the
ultimate management authority of such Subsidiary) in its sole discretion as it
deems appropriate.
"Base Quarterly Deficiency" means, with respect to any Unit and as to any
calendar quarter within the Support Period, the excess, if any, of (a) the
Minimum Quarterly Amount, determined with respect to such calendar quarter, over
(b) the amount of any Available Cash, distributed with respect to such calendar
quarter, to the holder of such Unit pursuant to Section 5.4(a) hereof.
"Book-Tax Disparity" shall mean with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 4.6 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"Burlington" means Burlington Resources Inc., a Delaware corporation.
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or the
State of New York shall not be regarded as a Business Day.
"Capital Account" means the capital account maintained for a Partner,
Assignee or Special Limited Partner pursuant to Section 4.6 hereof.
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"Capital Asset" means any asset on the Partnership's or Facilities
Subsidiary's balance sheet, as the case may be, other than inventory, accounts
receivable or any other current asset and assets disposed of in connection with
normal retirements or replacements.
"Capital Contribution" means any cash, cash equivalents or the Net Agreed
Value of Contributed Property which a Partner contributes to the Partnership
pursuant to Section 4.1, 4.3, 4.4, 4.6(c)(i), or 13.3(c) hereof.
"Capital Transactions" means (i) borrowings and sales of debt securities
(other than for working capital purposes and other than for items purchased on
open account in the ordinary course of business) by the Partnership, (ii) sales
of equity interests by the Partnership (other than sales of SPUs) and (iii)
sales or other voluntary or involuntary dispositions of any assets of the
Partnership (other than (x) sales or other dispositions of inventory in the
ordinary course of business, (y) sales or other dispositions of other current
assets including receivables and accounts and (z) sales or other dispositions of
assets as a part of normal retirements or replacements), in each case prior to
the commencement of the dissolution and liquidation of the Partnership provided,
that in determining "Cash from Capital Transactions", items (i)-(iii) above
shall include, with respect to each Subsidiary of the Partnership whose income
is accounted for on a consolidated or combined basis with the Partnership, a
percentage of each such item of such Subsidiary equal to the Partnership's
percentage ownership interest in such Subsidiary.
"Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
depletion (computed as a separate item of deduction), amortization and cost
recovery deductions charged to the Partners' Capital Accounts, and (b) with
respect to any other Partnership property, the adjusted basis of such property
for federal income tax purposes, all as of the time of determination. The
Carrying Value of any property shall be adjusted from time to time in accordance
with Sections 4.6(d)(i) and 4.6(d)(ii) hereof, and to reflect changes, additions
or other adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the General Partner.
"Cash from Capital Transactions" means, at any date, such amounts of cash
as are determined by the General Partner to be cash made available to the
Partnership from or by reason of a Capital Transaction.
"Certificate" means a certificate issued by the Partnership evidencing
ownership of one or more Partnership Interests.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware as
referenced in Section 6.2 hereof, as such Certificate may be amended and/or
restated from time to time.
"Citizenship Certification" means a properly completed certificate in such
form as may be specified by the General Partner by which an Assignee or a
Limited Partner certifies that he (and if he is a nominee holding for the
account of another Person, that to the best of his knowledge such other Person)
is an Eligible Citizen.
"Closing Date" means the first date on which Units are sold by the
Partnership to the Underwriters pursuant to the provisions of the Underwriting
Agreement.
"Closing Price" for any day means the last sale price on such day, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices on such day, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Units of a class are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal National Securities
Exchange on which the Units of such class are listed or admitted to trading or,
if the Units of a class are not listed or admitted to trading on any National
Securities Exchange, the last quoted price on such day or, if not so quoted, the
average of the high bid and low asked prices on such day in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use, or, if on any such
day the Units of a class are not quoted by any such organization, the average of
the closing bid and asked prices on such day as furnished by a professional
market maker making a market in the Units of such class
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selected by the Board of Directors of the General Partner, or, if on any such
day no market maker is making a market in the Units of such class, the fair
value of such Units on such day as determined reasonably and in good faith by
the Board of Directors of the General Partner using any reasonable method of
valuation.
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, as interpreted by the applicable regulations thereunder. Any
reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.
"Contributed Property" means each property or other asset, in such form as
may be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership (or deemed contributed to the Partnership on termination and
reconstitution thereof pursuant to Section 708 of the Code). Once the Carrying
Value of a Contributed Property is adjusted pursuant to Section 4.6(d)(i)
hereof, such property shall no longer constitute a Contributed Property for
purposes of Section 5.1 hereof, but shall be deemed an Adjusted Property for
such purposes.
"Contributing Partner" means each Partner contributing (or deemed to have
contributed on termination and reconstitution of the Partnership pursuant to
Section 708 of the Code or otherwise) a Contributed Property.
"Conversion Date" means with respect to each Deferred Participation
Interest, the date on which such Deferred Participation Interest is converted,
in accordance with the provisions of Section 5.7, into Units.
"Cumulative Base Deficiency" means an amount, attributable to any Unit and
determined with respect to all preceding calendar quarters, which equals the
excess of (a) the sum resulting from adding together the Base Quarterly
Deficiency, if any, as to such Unit for each of such preceding calendar quarters
within the Support Period, over (b) the sum of any distributions made to the
holder of such Unit (or his predecessors) with respect to any preceding calendar
quarters pursuant to Section 5.4(b) hereof.
"Curative Allocation" shall mean any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 5.1(d)(xi).
"Current Market Price" shall have the meaning assigned to such term in
Section 17.1(a) hereof.
"Debt" means, as to any Person, as of any date of determination, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person, (c) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof, (d) lease obligations of such Person
which, in accordance with generally accepted accounting principles, should be
capitalized, and (e) such other obligations of such Person as the General
Partner may determine in its sole discretion are appropriate.
"Deferred Participation Interest" means, a Partnership Interest issued
pursuant to Section 4.3(a) which Partnership Interest confers upon the holder
thereof only the rights and obligations specifically provided in Section 5.7 of
this Agreement.
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del. C. 17-101, et seq., as it may be amended from time to time, and any
successor to such statute.
"Departing Partner" means a former General Partner, as of the effective
date of any withdrawal or removal of such former General Partner pursuant to
Section 13.1 hereof.
"Deposit Account" means the account established by the Depositary pursuant
to the Deposit Agreement.
"Deposit Agreement" means the Deposit Agreement among the General Partner,
in its capacity both as General Partner and as attorney-in-fact for the Limited
Partners, the Partnership and the Depositary, as it may be amended or restated
from time to time.
"Depositary" means the bank or other institution appointed by the General
Partner in its sole discretion to act as depositary for the Depositary Units
pursuant to the Deposit Agreement, or any successor to it as depositary.
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"Depositary Receipt" means a depositary receipt, issued by the Depositary
or agents appointed by the Depositary in accordance with the Deposit Agreement,
evidencing ownership of one or more Depositary Units.
"Depositary Unit" means a depositary unit representing a Unit on deposit
with the Depositary pursuant to the Deposit Agreement.
"Designated Acres" means up to an aggregate of 150,000 acres of property
owned by the Partnership which may be designated by the General Partner at the
time of the sale thereof as constituting Designated Acres (such aggregate number
of acres to be determined over the term of the Partnership).
"Distribution Support Agreement" means the agreement, dated as of the
Closing Date, between Burlington and the Partnership relating to the purchase of
SPUs.
"Economic Risk of Loss" shall have the meaning set forth in Treasury
Regulation Section 1.704-1T(b)(4)(iv)(k)(1).
"Eligible Citizen" means a Person qualified to own interests in real
property in jurisdictions in which the Partnership does business or proposes to
do business from time to time, and whose status as a Limited Partner or Assignee
does not or would not subject the Partnership to a substantial risk of
cancellation or forfeiture of any of their property or any interest therein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor to such statute.
"Facilities Subsidiary" means Plum Creek Manufacturing, Inc., a Delaware
corporation, 95% of the common stock of which is held by the Partnership on the
Closing Date and 5% of the common stock of which is held by the General Partner
on the Closing Date.
"First Liquidation Target Amount" means an amount, determined with respect
to any Unit, which equals, as of the date of its determination, the sum of (a)
the Unrecovered Capital, if any, attributable to such Unit, plus (b) the
Cumulative Base Deficiency, if any, attributable to such Unit, plus (c) the
First Target Amount, with respect to the calendar quarter as to which such
determination is made.
"First Target Amount" means $0.65 per Unit (or, with respect to the period
commencing on the Closing Date and ending on June 30, 1989, the product of $0.65
multiplied by a fraction the numerator of which is the number of days in such
period and the denominator of which is 91), subject to adjustment in accordance
with Sections 5.6 and 9.6 hereof.
"Fourth Liquidation Target Amount" means an amount, determined with respect
to any Unit, which equals, as of the date of its determination, the sum of (a)
the Third Liquidation Target Amount, if any, attributable to such Unit, plus (b)
the excess, if any, of the Fourth Target Amount over the Third Target Amount,
determined with respect to the calendar quarter as to which such determination
is made.
"Fourth Target Amount" means $0.85 per Unit (or, with respect to the period
commencing on the Closing Date and ending on June 30, 1989, the product of $0.85
multiplied by a fraction the numerator of which is the number of days in such
period and the denominator of which is 91), subject to adjustment in accordance
with Sections 5.6 and 9.6 hereof.
"General Partner" means Plum Creek Management Company, a Delaware
corporation, and its successors as general partner of the Partnership.
"General Partner Equity Value" means, as of any date of determination, the
fair market value of the General Partner's Partnership Interest, as determined
by the General Partner using whatever reasonable method of valuation it may
adopt; provided, however, if any such valuation occurs at a time that the
General Partner or an Affiliate of the General Partner holds Management Units,
Deferred Participation Interests or Units, such Partnership Interests must be
taken into account in determining the General Partner Equity Value.
"Incentive Distribution" means any amount of cash distributed to the
General Partner in its capacity as general partner, pursuant to Sections 5.4(e),
5.4(f), 5.4(g) or 5.4(h) which exceeds that amount equal to 2% of the aggregate
amount of cash then being distributed pursuant to such provisions.
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"Indemnitee" means the General Partner, any Departing Partner, any Person
who is or was an Affiliate of the General Partner or any Departing Partner, any
Person who is or was an officer, director, employee, agent or trustee of the
General Partner or any Departing Partner or any Affiliate of the General Partner
or Departing Partner, or any Person who is or was serving at the request of the
General Partner or any Departing Partner or any Affiliate of the General Partner
or Departing Partner as a director, officer, employee, agent or trustee of
another Person, including any Subsidiary.
"Initial Limited Partners" means PCTC and the Underwriters upon being
admitted to the Partnership in accordance with Section 4.3 hereof.
"Initial Offering" means the initial offering of Depositary Units to the
public, as described in the Registration Statement.
"Initial Unit Price" means the initial price per Unit at which the
Underwriters will offer the Units to the public for sale as set forth on the
cover page of the prospectus first issued at or after the time the Registration
Statement filed in connection with the sale of Units contemplated by the
Underwriting Agreement first became effective.
"Issue Price" means the price at which a Unit is purchased from the
Partnership, less any sales commission or underwriting discount charged to the
Partnership.
"Limited Partner" means each Initial Limited Partner, each Substituted
Limited Partner, each Additional Limited Partner and any Departing Partner upon
the change of its status from General Partner to Limited Partner pursuant to
Section 13.3 hereof and, solely for purposes of Articles IV, V and VI hereof and
Sections 14.3 and 14.4 hereof, shall include an Assignee and, solely for
purposes of Article VII hereof, shall include a Special Limited Partner and
holders of Deferred Participation Interests.
"Limited Partner Equity Value" means, as of any date of determination, the
amount equal to the product of (a) the total number of Units outstanding
(immediately prior to an issuance of Units or distribution of cash or
Partnership property), other than Units held by the General Partner or an
Affiliate of the General Partner, multiplied by (b) (i) in the case of a
valuation required by Section 4.6(d)(i) (other than valuations caused by sales
of a de minimis quantity of Units) the Issue Price or (ii) in the case of a
valuation required by Section 4.6(d)(ii) (or a valuation required by Section
4.6(d)(i) caused by sales of a de minimis quantity of Units) the Closing Price.
"Liquidator" means the General Partner or other Person approved pursuant to
Section 14.3 hereof who performs the functions described therein.
"Management Unit" means a Unit issued pursuant to Section 4.3(a) which Unit
confers upon the holder thereof all of the rights and obligations of a Limited
Partner, provided, however, that such Unit will be subject to the provisions of
Section 4.6(c)(ii) hereof if it also constitutes a Restricted Interest.
"Minimum Gain Attributable to Partner Nonrecourse Debt" means that amount
determined in accordance with the principles of Treasury Regulation Section
1.704-1T(b)(4)(iv)(h)(6).
"Minimum Quarterly Amount" means $0.60 per Unit per calendar quarter (or,
with respect to the period commencing on the Closing Date and ending on June 30,
1989, the product of $0.60 multiplied by a fraction, the numerator of which is
the number of days in such period and the denominator of which is 91), subject
to adjustment in accordance with Sections 5.6 and 9.6 hereof.
"MQA" means Minimum Quarterly Amount.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Exchange Act.
"Net Agreed Value" means (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed and (b) in the case of any property distributed to a Partner or
Assignee
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by the Partnership, the Partnership's Carrying Value of such property at the
time such property is distributed, reduced by any indebtedness either assumed by
such Partner or Assignee upon such distribution or to which such property is
subject at the time of distribution as determined under Section 752 of the Code.
"Net Income" shall mean, for any taxable period, the excess, if any, of the
Partnership's items of income and gain (other than those items attributable to
dispositions constituting Termination Capital Transactions) for such taxable
period over the Partnership's items of loss and deduction (other than those
items attributable to dispositions constituting Termination Capital
Transactions) for such taxable period. The items included in the calculation of
Net Income shall be determined in accordance with Section 4.6(b) and shall not
include any items specially allocated under Section 5.1(d). Once an item of
income, gain, loss or deduction that has been included in the initial
computation of Net Income is subjected to a Required Allocation or a Curative
Allocation, Net Income or the resulting Net Loss, whichever the case may be,
shall be recomputed without regard to such item.
"Net Loss" shall mean, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction (other than those items attributable
to dispositions constituting Termination Capital Transactions) for such taxable
period over the Partnership's items of income and gain (other than those items
attributable to dispositions constituting Termination Capital Transactions) for
such taxable period. The items included in the calculation of Net Loss shall be
determined in accordance with Section 4.6(b) and shall not include any items
specially allocated under Section 5.1(d). Once an item of income, gain, loss or
deduction that has been included in the initial computation of Net Loss is
subjected to a Required Allocation or a Curative Allocation, Net Loss or the
resulting Net Income, whichever the case may be, shall be recomputed without
regard to such item.
"Net Termination Gain" shall mean, for any taxable period, the sum, if
positive, of all items of income, gain or loss recognized by the Partnership
from Termination Capital Transactions occurring in such taxable period. The
items included in the determination of Net Termination Gain shall be determined
in accordance with Section 4.6(b) and shall not include any items of income,
gain or loss specially allocated under Section 5.1(d). Once an item of income,
gain or loss that has been included in the initial computation of Net
Termination Gain is subjected to a Required Allocation or a Curative Allocation,
Net Termination Gain or the resulting Net Termination Loss, whichever the case
may be, shall be recomputed without regard to such item.
"Net Termination Loss" shall mean, for any taxable period, the sum, if
negative, of all items of income, gain or loss recognized by the Partnership
from Termination Capital Transactions occurring in such taxable period. The
items included in the determination of Net Termination Loss shall be determined
in accordance with Section 4.6(b) and shall not include any items of income,
gain or loss specially allocated under Section 5.1(d). Once an item of gain or
loss that has been included in the initial computation of Net Termination Loss
is subjected to a Required Allocation or a Curative Allocation, Net Termination
Loss or the resulting Net Termination Gain, whichever the case may be, shall be
recomputed without regard to such item.
"Non-citizen Assignee" means a Person who the General Partner has
determined in its sole discretion does not constitute an Eligible Citizen and as
to whose Partnership Interest the General Partner has become the Substituted
Limited Partner, pursuant to Section 11.5 hereof.
"Nonrecourse Built-in Gain" shall mean with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Sections 5.2(b)(i)(A),
5.2(b)(ii)(A) or 5.2(b)(iv) if such properties were disposed of in a taxable
transaction in full satisfaction of such liabilities and for no other
consideration.
"Nonrecourse Deductions" shall mean any and all items of loss, deduction or
expenditures (described in Section 705 (a)(2)(B) of the Code) that, in
accordance with the principles of Treasury Regulation Section
1.704-1T(b)(4)(iv)(b), are attributable to a Nonrecourse Liability.
"Nonrecourse Liability" shall have the meaning set forth in Treasury
Regulation Section 1.704-1T(b)(4)(iv)(k)(3).
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"Notice of Election to Purchase" has the meaning assigned to such term in
Section 17.1(b) hereof.
"Opinion of Counsel" means a written opinion of counsel (who may be regular
counsel to the Partnership or the General Partner) in form and substance
acceptable to the General Partner.
"Organizational Limited Partner" means David D. Leland in his capacity as
the organizational limited partner of the Partnership pursuant to this
Agreement.
"outstanding" means all Units or other Partnership Securities, including
Deferred Participation Interests, that are issued by the Partnership and
reflected as outstanding on the Partnership's books and records as of the date
of determination.
"Partner" means a General Partner, a Limited Partner or a Special Limited
Partner and solely for purposes of Articles IV, V and VI hereof and Sections
14.3 and 14.4 hereof shall include an Assignee.
"Partner Nonrecourse Debt" shall have the meaning set forth in Treasury
Regulation Section 1.704-1T(b)(4)(iv)(k)(4).
"Partner Nonrecourse Deductions" shall mean any and all items of loss,
deduction or expenditure (described in Section 705(a)(2)(B) of the Code) in
accordance with the principles of Treasury Regulation Section
1.704-1T(b)(4)(iv)(h)(3), are attributable to a Partner Nonrecourse Debt.
"Partnership" means the limited partnership heretofore formed and continued
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means the interest of a Partner in the Partnership
which, in the case of a Special Limited Partner, a Limited Partner or Assignee,
shall include Units, SPUs or Deferred Participation Interests, whichever the
case may be.
"Partnership Minimum Gain" shall mean that amount determined in accordance
with the principles of Treasury Regulation Sections 1.704-1T(b)(4)(iv)(a) and
1.704-1T(b)(4)(iv)(c).
"Partnership Securities" has the meaning assigned to such term in Section
4.4(a) hereof.
"Partnership Year" means the fiscal year of the Partnership, which shall be
the calendar year.
"PCTC" means Plum Creek Timber Company, Inc., a Delaware corporation and a
wholly-owned Subsidiary of Burlington.
"Per Unit Capital Amount" means, as of any date of determination, the
Capital Account, stated on a per Unit basis, underlying any Unit held by a
Public Unitholder.
"Percentage Interest" means, as of the date of such determination, (a) as
to the General Partner in its capacity as such, 2%, (b) as to any Limited
Partner or Assignee holding Units, the product of (i) 98% multiplied by (ii) the
quotient of the number of Units held by such Limited Partner or Assignee divided
by the total number of all Units then outstanding; provided, however, that
following any issuance of additional Units by the Partnership pursuant to
Section 4.4 hereof, proper adjustment shall be made to the Percentage Interest
represented by each Unit to reflect such issuance.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"Public Unitholder" means a Person other than the General Partner or any
Affiliate of the General Partner who holds Units.
"Purchase Date" means the date determined by the General Partner as the
date for purchase of all outstanding Units (other than Units owned by the
General Partner and its Affiliates) pursuant to Section 17.1(b) hereof.
"Recapture Income" means any gain recognized by the Partnership (computed
without regard to any adjustment required by Sections 734 or 743 of the Code)
upon the disposition of any property or asset of the
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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" means the date established by the General Partner for
determining (a) the identity of Limited Partners (or Assignees, if applicable)
entitled to notice of, or to vote at, any meeting of Limited Partners or
entitled to vote by ballot or give approval of Partnership action in writing
without a meeting or entitled to exercise rights in respect of any other lawful
action of Limited Partners, or (b) the identity of Record Holders entitled to
receive any report or distribution.
"Record Holder" means the Person in whose name a Unit is registered on the
books of the Transfer Agent, as of the opening of business on a particular
Business Day.
"Redeemable Units" means any Units for which a redemption notice has been
given and has not been withdrawn, under Section 11.6 hereof.
"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 33-28094), as it has been or as it may be amended or
supplemented from time to time, filed by the Partnership with the Securities and
Exchange Commission under the Securities Act to register the offering and sale
of the Units in the Initial Offering.
"Required Allocations" shall mean any allocation (or limitation imposed on
any allocation) of an item of income, gain, deduction or loss pursuant to (a)
the proviso-clauses of Sections 5.1(b)(ii), 5.1(b)(iii) and 5.1(b)(iv) or (b)
Sections 5.1(d)(i), 5.1(d)(ii), 5.1(d)(iv), 5.1(d)(v), 5.1(d)(vi), 5.1(d)(vii)
and 5.1(d)(ix), such allocations (or limitations thereon) being directly or
indirectly required by the Treasury regulations promulgated under Section 704(b)
of the Code.
"Residual Gain" or "Residual Loss" shall mean any item of gain or loss, as
the case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of Contributed Property or
Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to the first sentence of Sections 5.2(b)(i)(A) or 5.2(b)(ii)(A) to
eliminate Book-Tax Disparities.
"Restricted Interest" means any Management Unit and any Deferred
Participation Interest, prior to its conversion to a Unit pursuant to Section
5.7(b), which is held by a Person who holds both such Management Units and such
Deferred Participation Interests. Once any such Unit is transferred and no
longer held by a Person who holds both such Management Units and such Deferred
Participation Interests, it will no longer constitute a Restricted Interest.
"Second Liquidation Target Amount" means an amount, determined with respect
to any Unit, which equals, as of the date of its determination, the sum of (a)
the First Liquidation Target Amount, if any, attributable to such Unit, plus (b)
the excess, if any, of the Second Target Amount over the First Target Amount,
with respect to the calendar quarter as to which such determination is made.
"Second Target Amount" means $0.70 per Unit (or, with respect to the period
commencing on the Closing Date and ending on June 30, 1989, the product of $0.70
multiplied by a fraction, of which the numerator is equal to the number of days
in such period and of which the denominator is 91), subject to adjustment in
accordance with Sections 5.6 and 9.6 hereof.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor to such statute.
"Special Limited Partner" shall mean Burlington or an Affiliate of
Burlington upon being issued SPUs by the Partnership or upon transfer of such
SPUs to Burlington or such Affiliate of Burlington prior to redemption of all
such SPUs issued.
"Special Limited Partner Book Capital" means, as of any date of
determination, the amount equal to the sum of the balances of the Capital
Accounts of all Special Limited Partners, determined pursuant to Section 4.6
(prior to any adjustment pursuant to Section 4.6(d) arising upon the present
event requiring a valuation of the Partnership's assets).
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"SPU" means a Partnership Interest issued pursuant to Section 4.4 hereof
and in accordance with the Distribution Support Agreement, which Partnership
Interest shall confer upon the holder thereof only the rights and obligations
specifically provided in this Agreement with respect to SPUs (and no other
rights otherwise available to holders of a Partnership Interest) and the
Distribution Support Agreement.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person, and, with respect to the Partnership, shall include
the Facilities Subsidiary.
"Substituted Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 12.2 hereof in place of and with
all the rights of a Limited Partner and who is shown as a Limited Partner on the
books and records of the Partnership.
"Support Period" means the period commencing on the Closing Date and ending
on the earlier of June 30, 1994 or such earlier date of termination as provided
for in the Distribution Support Agreement.
"Termination Capital Transaction" shall mean any sale, transfer or other
disposition of any Partnership property occurring upon or incident to the
liquidation and winding-up of the Partnership pursuant to Article XIV.
"Third Liquidation Target Amount" means an amount, determined with respect
to any Unit, which equals, as of the date of its determination, the sum of (a)
the Second Liquidation Target Amount, if any, attributable to such Unit, plus
(b) the excess, if any, of the Third Target Amount over the Second Target
Amount, determined with respect to the calendar quarter as to which such
determination is made.
"Third Target Amount" means $0.75 per Unit (or, with respect to the period
commencing on the Closing Date and ending on June 30, 1989, the product of $0.75
multiplied by a fraction, of which the numerator is equal to the number of days
in such period and of which the denominator is 91), subject to adjustment in
accordance with Sections 5.6 and 9.6 hereof.
"Timberlands Conveyance and Assumption Agreement" means the conveyance
agreement between the Partnership and PCTC (or its successors) wherein, among
other things, PCTC is to contribute to the Partnership undivided interests in
certain timberlands and other assets in exchange for a limited partner interest
in the Partnership consisting of 150,000 Management Units and 1,250,000 Deferred
Participation Interests.
"Trading Day" has the meaning assigned to such term in Section 17.1(a)
hereof.
"Transfer Agent" means the Depositary or any bank, trust company or other
Person appointed by the Partnership to act as transfer agent for the Units.
"Transfer Application" means an application and agreement for transfer of
Depositary Units in the form set forth on the back of a Depositary Receipt or in
a form substantially to the same effect in a separate instrument.
"Underwriter" means each Person named as an underwriter in the Underwriting
Agreement who purchases Units pursuant thereto.
"Underwriting Agreement" means the Underwriting Agreement among the
Underwriters, the Partnership, the General Partner, the Facilities Subsidiary,
Plum Creek Timber Company, Inc. and Burlington.
"Unit" means a Partnership Interest of a Limited Partner or Assignee in the
Partnership (not including SPUs and, prior to the termination of the Support
Period, not including a Deferred Participation Interest) representing a
fractional part of the Partnership Interests of all Limited Partners and
Assignees; provided, however, that in the event any class or series of Units
issued pursuant to Section 4.4 hereof shall have designations, preferences or
special rights such that a Unit of such class or series shall represent a
greater or lesser part of the Partnership Interests of all Limited Partners or
Assignees than a Unit of any other class or series of Units, the Partnership
Interest represented by such class or series of Units shall be determined in
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accordance with such designations, preferences or special rights. Unless
otherwise specifically indicated to the contrary, "Units" includes Depositary
Units.
"Unrealized Gain" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the fair market
value of such property (as determined under Section 4.6(d) hereof) as of such
date, over (b) the Carrying Value of such property as of such date (prior to any
adjustment to be made pursuant to Section 4.6(d) hereof) as of such date.
"Unrealized Loss" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the Carrying Value
of such property as of such date (prior to any adjustment to be made pursuant to
Section 4.6(d) hereof) as of such date, over (b) the fair market value of such
property (as determined under Section 4.6(d) hereof) as of such date.
"Unrecovered Capital" means, at any time, (a) with respect to a Unit, the
Initial Unit Price, less the sum of all distributions theretofore made in
respect of such Unit constituting, and which for purposes of determining the
priority of such distribution is treated as constituting, Cash from Capital
Transactions, (b) with respect to a SPU, the excess, if any, of (i) the cash
amount of the Capital Contribution made pursuant to Section 4.4 in exchange for
such SPU, over (ii) any amount previously distributed pursuant to Section 5.4(d)
or 13.4 towards the redemption of such SPU and (c) with respect to a Deferred
Participation Interest, prior to its conversion into a Unit pursuant to Section
5.7(b), the excess, if any, of (i) the Net Agreed Value of the undivided
interest in the Contributed Property conveyed to the Partnership pursuant to
Section 4.3(a) in exchange for such Deferred Participation Interest, over (ii)
any amount previously distributed pursuant to Section 13.4 towards the
redemption of such Deferred Participation Interest.
ARTICLE III
PURPOSE
3.1 Purpose and Business. The purpose and nature of the business to be
conducted by the Partnership shall be (i) to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the Delaware
Act, including, without limitation, the acquisition, development, ownership,
management, operation, leasing and disposition of timberlands and the production
and sale of forest products, (ii) to enter into any partnership, joint venture
or other similar arrangement to engage in any of the foregoing or the ownership
of interests in any entity engaged in any of the foregoing, including the
ownership of common stock of the Facilities Subsidiary, and (iii) to do anything
necessary or incidental to the foregoing (including, without limitation, the
making of capital contributions or loans to the Facilities Subsidiary).
3.2 Powers. The Partnership shall be empowered to do any and all acts and
things 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.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1 Initial Contributions. In order to form the Partnership under the
Delaware Act, the General Partner has made an initial Capital Contribution to
the Partnership in the amount of $20 and the General Partner has accepted a
Capital Contribution to the Partnership in the amount of $980 from the
Organizational Limited Partner for an interest in the Partnership, and the
Organizational Limited Partner has been admitted as a limited partner of the
Partnership.
4.2 Return of Initial Contribution. As of the Closing Date, after giving
effect to the transactions contemplated by Section 4.3 hereof, the interest in
the Partnership of the Organizational Limited Partner shall be terminated, the
Capital Contribution by the Organizational Limited Partner as an initial Capital
Contribution shall be refunded and the Organizational Limited Partner shall
withdraw as a limited partner of the Partnership. 98% of any interest or other
profit which may have resulted from the investment or other use
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of such initial Capital Contributions shall be allocated and distributed to the
Organizational Limited Partner, the balance thereof shall be allocated and
distributed to the General Partner.
4.3 Initial Limited Partners. (a) Prior to the Closing Date, PCTC shall
contribute to the Partnership undivided interests in those assets described in
the Timberlands Conveyance and Assumption Agreement in exchange for 150,000
Management Units and 1,250,000 Deferred Participation Interests and, as of the
Closing Date, PCTC shall be admitted to the Partnership as an Initial Limited
Partner in respect of such Management Units and Deferred Participation
Interests.
(b) On the Closing Date, and as will then be required by the Underwriting
Agreement, each Underwriter shall contribute to the Partnership, in exchange for
the number of Units then specified in the Underwriting Agreement to be purchased
by such Underwriter at such Time of Delivery, an amount in cash equal to the
Issue Price for such Units (as then specified in the Underwriting Agreement)
multiplied by such number of Units being so purchased. Upon receipt of such
Capital Contribution, each Underwriter shall be admitted to the Partnership as
an Initial Limited Partner in respect of the Units so issued to it.
4.4 Issuances of Additional Units and Other Securities. (a) The General
Partner is hereby authorized to cause the Partnership to issue, in addition to
the Units issued pursuant to Section 4.3 hereof, such additional Units, or
classes or series thereof, or options, rights, warrants or appreciation rights
relating thereto, or SPUs or any other type of equity security that the
Partnership may lawfully issue, any unsecured or secured debt obligations of the
Partnership or debt obligations of the Partnership convertible into any class or
series of equity securities of the Partnership (collectively, "Partnership
Securities"), for any Partnership purpose, at any time or from time to time, to
the Partners or to other Persons for such consideration and on such terms and
conditions as shall be established by the General Partner in its sole
discretion, all without the approval of any Limited Partners. The General
Partner shall have sole discretion, subject to the guidelines set forth in this
Section 4.4 and the requirements of the Delaware Act, in determining the
consideration and terms and conditions with respect to any future issuance of
Partnership Securities.
(b) Notwithstanding any provision of this Agreement to the contrary,
additional Partnership Securities to be issued by the Partnership pursuant to
this Section 4.4 shall be issuable from time to time 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, including rights, powers and duties senior to existing classes and
series of Partnership Securities, all as shall be fixed by the General Partner
in the exercise of its sole and complete discretion, subject to Delaware law,
including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Securities; (ii) the right of each such class or series of
Partnership Securities to share in Partnership distributions; (iii) the rights
of each such class or series of Partnership Securities upon dissolution and
liquidation of the Partnership; (iv) whether such class or series of additional
Partnership Securities is redeemable by the Partnership and, if so, the price at
which, and the terms and conditions upon which, such class or series of
additional Partnership Securities may be redeemed by the Partnership; (v)
whether such class or series of additional Partnership Securities is issued with
the privilege of conversion and, if so, the rate at which, and the terms and
conditions upon which, such class or series of Partnership Securities may be
converted into any other class or series of Partnership Securities; (vi) the
terms and conditions upon which each such class or series of Partnership
Securities will be issued, deposited with the Depositary, evidenced by
Depositary Receipts and assigned or transferred; and (vii) the right, if any, of
each such class or series of Partnership Securities to vote on Partnership
matters, including matters relating to the relative rights, preferences and
privileges of each such class or series.
(c) Notwithstanding the terms of Sections 4.4(a) and 4.4(b) hereof, during
the Support Period, the Partnership shall not issue an aggregate of more than
3,750,000 additional Units (excluding for purposes of such determination Units
issued pursuant to the Underwriter's over-allotment option) or other Partnership
Securities on a parity with the Units with respect to distributions, income,
losses or upon liquidation nor shall the Partnership issue any other Partnership
Securities having rights to distributions or in liquidation ranking prior or
senior to the Units, without the prior approval of a majority of the outstanding
Units (excluding Units held by the General Partner and its Affiliates). After
the Support Period, the Partnership shall not issue any
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other Partnership Securities having rights to distributions or in liquidation
ranking prior or senior to the Units, without the prior approval of a majority
of the outstanding Units (excluding Units held by the General Partner and its
Affiliates).
(d) The General Partner is hereby authorized and directed to take all
actions which it deems appropriate or necessary in connection with each issuance
of Units, SPUs or other Partnership Securities pursuant to Section 4.4(a) hereof
and to amend this Agreement in any manner which it deems appropriate or
necessary to provide for each such issuance, to admit Additional Limited
Partners in connection therewith and to specify the relative rights, powers and
duties of the holders of the Partnership Securities being so issued.
(e) The General Partner shall do all things necessary to comply with the
Delaware Act and is authorized and directed to do all things it deems to be
necessary or advisable in connection with any future issuance of Partnership
Securities, including compliance with any statute, rule, regulation or guideline
of any federal, state or other governmental agency or any National Securities
Exchange on which the Depositary Units or other Partnership Securities are
listed for trading.
4.5 No Preemptive Rights. No Person shall have any preemptive,
preferential or other similar right with respect to (a) additional Capital
Contributions; (b) issuance or sale of any class or series of Units, SPUs or
other Partnership Securities, whether unissued, held in the treasury or
hereafter created; (c) issuance of any obligations, evidences of indebtedness or
other securities of the Partnership convertible into or exchangeable for, or
carrying or accompanied by any rights to receive, purchase or subscribe to, any
such Units or Partnership Securities; (d) issuance of any right of subscription
to or right to receive, or any warrant or option for the purchase of, any such
Units or Partnership Securities; or (e) issuance or sale of any other securities
that may be issued or sold by the Partnership.
4.6 Capital Accounts. (a) The Partnership shall maintain for each Partner
owning Units or Deferred Participation Interests a separate Capital Account with
respect to such Units or Deferred Participation Interests, in accordance with
the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account
shall be increased by (i) the amount of all Capital Contributions made to the
Partnership with respect to such Units or Deferred Participation Interests
pursuant to this Agreement and (ii) all items of Partnership income and gain
(including income and gain exempt from tax) computed in accordance with Section
4.6(b) hereof and allocated with respect to such Units or Deferred Participation
Interests pursuant to Section 5.1 hereof, and decreased by (x) the amount of
cash or Net Agreed Value of all actual and deemed distributions of cash or
property made with respect to such Units or Deferred Participation Interests
pursuant to this Agreement and (y) all items of Partnership deduction and loss
computed in accordance with Section 4.6(b) hereof and allocated with respect to
such Units or Deferred Participation Interests pursuant to Section 5.1 hereof.
The Partnership shall maintain for the General Partner a separate Capital
Account with respect to its Partnership Interest, held in its capacity as a
general partner, in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions made to the Partnership with respect to such
Partnership Interest pursuant to this Agreement and (ii) all items of
Partnership income and gain (including income and gain exempt from tax) computed
in accordance with Section 4.6(b) hereof and allocated with respect to such
Partnership Interest pursuant to Section 5.1 hereof, and decreased by (x) the
amount of cash or Net Agreed Value of all actual and deemed distributions of
cash or property made with respect to such Partnership Interest pursuant to this
Agreement and (y) all items of Partnership deduction and loss computed in
accordance with Section 4.6(b) hereof and allocated with respect to such
Partnership Interest pursuant to Section 5.1.
The Partnership shall maintain a separate Capital Account with respect to
SPUs issued to any Special Limited Partner in accordance with the rules of
Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be
increased by (i) all Capital Contributions made to the Partnership by such
Special Limited Partner in exchange for such SPUs and (ii) all items of
Partnership income and gain (including income and gain exempt from tax) computed
in accordance with Section 4.6(b) hereof and allocated to such Partner pursuant
to Section 5.1 hereof, and decreased by (x) the amount of cash or the Net Agreed
Value of any property distributed by the Partnership to such Special Limited
Partner in redemption of such SPUs, and
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(y) all items of Partnership deduction and loss computed in accordance with
Section 4.6(b) and allocated to such Special Limited Partner pursuant to Section
5.1.
(b) For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes (including any method of depreciation, cost recovery or amortization
used for that purpose), provided, that:
(i) All fees and other expenses incurred by the Partnership to promote
the sale of (or to sell) a Partnership Interest that can neither be
deducted nor amortized under Section 709 of the Code, if any, shall, for
purposes of Capital Account maintenance, be treated as an item of deduction
at the time such fees and other expenses are incurred and shall be
allocated among the Partners pursuant to Section 5.1 hereof.
(ii) Except as otherwise provided in Treasury Regulation Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
and deduction shall be made without regard to any election under Section
754 of the Code which may be made by the Partnership and, as to those items
described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without
regard to the fact that such items are not includable in gross income or
are neither currently deductible nor capitalized for federal income tax
purposes.
(iii) Any income, gain or loss attributable to the taxable disposition
of any Partnership property (including any disposition of a timber
interest) shall be determined as if the adjusted basis of such property
(or, in the case of certain timber dispositions, the "adjusted depletion
basis" of such timber) as of such date of disposition were equal in amount
to the Partnership's Carrying Value with respect to such property as of
such date. The adjusted basis or adjusted depletion basis, whichever the
case may be, determined upon sales or other dispositions of timber units
included in a timber account shall not, in the aggregate, exceed the
Partnership's total Carrying Value with respect to all of the timber units
included in such timber account.
(iv) In accordance with the requirements of Section 704(b) of the
Code, any deductions for depreciation, cost recovery or amortization
attributable to any Contributed Property shall be determined as if the
adjusted basis of such property as of the date it was acquired by the
Partnership was equal to the Agreed Value of such property. Upon an
adjustment pursuant to Section 4.6(d) hereof to the Carrying Value of any
Partnership property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation, cost recovery
or amortization attributable to such property shall be determined (A) as if
the adjusted basis of such property were equal to the Carrying Value of
such property immediately following such adjustment and (B) using a rate of
depreciation, cost recovery or amortization derived from the same method
and useful life (or, if applicable, the remaining useful life) as is
applied for federal income tax purposes; provided, however, that, if the
asset has a zero adjusted basis for federal income tax purposes,
depreciation, cost recovery or amortization deductions shall be determined
using any reasonable method that the General Partner may adopt.
(v) Any depletion deductions separately determined, in accordance with
the principles of Section 611 of the Code, with respect to a separate
timber account shall be computed as if the aggregate adjusted basis of the
timber units included in such timber account on the date of such
determination was equal in amount to the Partnership's Carrying Value with
respect to such timber account as of such date. The depletion allowance
separately determined with respect to a timber account shall not, in the
aggregate, exceed the Partnership's total Carrying Value with respect to
all of the timber units included in such timber account. This provision
shall only apply to depletion separately stated as an item of deduction, as
opposed to depletion amounts treated as a reduction of amounts realized or
included as a cost of goods sold (which depletion amounts are the subject
of Section 4.6(b)(iii)).
(vi) If the Partnership's adjusted basis in a depreciable or cost
recovery property is reduced for federal income tax purposes pursuant to
Section 48(q)(1) or 48(q)(3) of the Code, the amount of such reduction
shall solely for purposes hereof be deemed to be an additional depreciation
or cost recovery deduction in the year such property is placed in service
and shall be allocated among the Partners
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pursuant to Section 5.1 hereof. Any restoration of such basis pursuant to
Section 48(q)(2) of the Code shall, to the extent possible, be allocated in
the same manner to the Partners to whom such deemed deduction was
allocated.
(c)(i) Except as otherwise provided in Sections 4.6(c)(ii) and 4.6(c)(iii),
a transferee of a Partnership Interest shall succeed to a pro rata portion of
the Capital Account of the transferor relating to the Partnership Interest so
transferred; provided, however, that, if the transfer causes a termination of
the Partnership under Section 708(b)(1)(B) of the Code, the Partnership's
properties shall be deemed to have been distributed in liquidation of the
Partnership to the Partners (including the transferee of a Partnership Interest)
pursuant to Sections 14.3 and 14.4 and recontributed by such Partners in
reconstitution of the Partnership. In such event, the Carrying Values of the
Partnership properties shall be adjusted immediately prior to such deemed
distribution pursuant to Section 4.6(d)(ii) hereof and such adjusted Carrying
Values shall then constitute the Agreed Values of such properties upon such
deemed contribution to the reconstituted Partnership. The Capital Accounts of
such reconstituted Partnership shall be maintained in accordance with the
principles of this Section 4.6.
(ii) Immediately prior to the sale, exchange or other disposition of a
Restricted Unit by the General Partner or an Affiliate of the General Partner,
the Capital Account maintained with respect to such Restricted Units for such
Person shall be allocated between the Restricted Units transferred and the
Restricted Units retained by such Person in the manner provided herein below:
(A) In the case of a transfer, to either an unaffiliated third party
or an Affiliate, of Deferred Participation Interests which constitute
Restricted Units to the transferor, the Capital Account maintained with
respect to the transferor's Restricted Units will (1) first, be allocated
to the Management Units retained, if any, in an amount equal to the product
of (a) the number of such Management Units retained and (b) the Per Unit
Capital Amount, (2) second, be allocated to the Deferred Participation
Interests transferred in an amount equal to the product of (a) the number
of such Deferred Participation Interests transferred and (b) the Per Unit
Capital Amount and (3) third, any remaining balance in the Capital Account
will be allocated to the Deferred Participation Interests retained.
Following any such allocation, the transferor's Capital Account, if any,
will have a balance equal to the sum of the amounts allocated under clauses
(1) and (3) hereinabove, and the transferee's Capital Account established
with respect to the transferred Deferred Participation Interests will have
a balance equal to the amount allocated under clause (2) hereinabove.
(B) In the case of a transfer, to either an unaffiliated third party
or an Affiliate, of Management Units which constitute Restricted Units to
the transferor, the Capital Account maintained with respect to the
transferor's Restricted Units will (1) first, be allocated to the
Management Units transferred in an amount equal to the product of (a) the
number of such Management Units transferred and (b) the Per Unit Capital
Amount, and (2) second, any remaining balance in the Capital Account will
be allocated to the Restricted Units retained. Following any such
allocation, the transferor's Capital Account, if any, will have a balance
equal to the amount allocated under clause (2) hereinabove and the
transferee's Capital Account established with respect to the transferred
Management Units will have a balance equal to the amount allocated under
clause (1) hereinabove.
(iii) Immediately prior to the sale, exchange or other disposition of a
Deferred Participation Interest (not otherwise constituting a Restricted Unit)
by the General Partner or an Affiliate of the General Partner, the Capital
Account maintained for such Person with respect to such Units will (1) first, be
allocated to the Deferred Participation Interests transferred in an amount equal
to the product of (a) the number of such Deferred Participation Interests
transferred and (b) the Per Unit Capital Amount, and (2) second, any remaining
balance in such Capital Account will be retained by the transferor, regardless
of whether it has retained any Deferred Participation Interests. Following any
such allocation, the transferor's Capital Account, if any, maintained with
respect to the retained Deferred Participation Interests, if any, will have a
balance equal to the amount allocated under clause (2) hereinabove, and the
transferee's Capital Account established with respect to the transferred
Deferred Participation Interests will have a balance equal to the amount
allocated under clause (1) hereinabove.
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(d)(i) Consistent with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Units for cash or Contributed
Property or the conversion of the General Partner's Partnership Interest to
Units pursuant to Section 13.3(b), the Capital Accounts of all Partners and the
Carrying Value of each Partnership property immediately prior to such issuance
shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as if such Unrealized
Gain or Unrealized Loss had been recognized on an actual sale of each such
property immediately prior to such issuance and had been allocated to the
Partners at such time pursuant to Section 5.1 hereof. In determining such
Unrealized Gain or Unrealized Loss the aggregate cash amount and fair market
value of all Partnership assets (including cash or cash equivalents) immediately
prior to the issuance of Partnership Interests shall be determined by the
General Partner using such reasonable method of valuation as it may adopt;
provided, however, the General Partner, in arriving at such valuation, must take
fully into account the Limited Partner Equity Value, the General Partner Equity
Value, and the Special Limited Partner Book Capital, at such time. The General
Partner shall allocate such aggregate value among the assets of the Partnership
(in such manner as it determines in its sole discretion to be reasonable) to
arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior to any actual or deemed distribution to a Partner of any
Partnership property (other than a distribution of cash that is not in
redemption or retirement of a Partnership Interest), the Capital Accounts of all
Partners and the Carrying Value of such Partnership property shall be adjusted
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as if such Unrealized Gain or
Unrealized Loss had been recognized in a sale of each such property immediately
prior to such distribution for an amount equal to its fair market value, and had
been allocated to the Partners, at such time, pursuant to Section 5.1 hereof.
Any Unrealized Gain or Unrealized Loss attributable to such property shall be
allocated in the same manner as Net Termination Gain or Net Termination Loss
pursuant to Section 5.1(c) hereof; provided, however, that, in making any such
allocation, Net Termination Gain or Net Termination Loss actually realized shall
be allocated first and; provided, further, that in allocating any Unrealized
Gain upon the constructive termination resulting from the Initial Offering,
Section 5.1(c)(i)(B) will be applied as if it required that 100% of such
Unrealized Gain be allocated among the Limited Partners, in accordance with
their respective Percentage Interests. In determining such Unrealized Gain or
Unrealized Loss the aggregate cash amount and fair market value of all
Partnership assets (including cash or cash equivalents) immediately prior to a
distribution shall (A) in the case of a deemed distribution occurring as a
result of a termination of the Partnership pursuant to Section 708 of the Code,
be determined and allocated in the manner provided in Section 4.6(d)(i) or (B)
in the case of a liquidating distribution pursuant to Section 14.3 or 14.4, be
determined and allocated by the Liquidator using such reasonable methods of
valuation as it may adopt. Notwithstanding anything to the contrary provided
herein, the preceding provisions of this subsection 4.6(d)(ii) shall not be
applied to distributions of cash in redemption or retirement of a Partnership
Interest (and no such adjustment shall be made) unless the adjustment therein
described is necessary to maintain the economic uniformity of the Units within
each class of publicly traded Units.
4.7 Interest. No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
4.8 No Withdrawal. No Partner shall be entitled to withdraw any part of
his Capital Contribution (including with respect to SPUs) or his Capital Account
or to receive any distribution from the Partnership, except as provided in
Section 4.2 hereof, and Articles V, XIII and XIV hereof.
4.9 Loans from Partners. Loans by a Partner to the Partnership shall not
constitute Capital Contributions. If any Partner shall advance funds to the
Partnership in excess of the amounts required hereunder to be contributed by it
to the capital of the Partnership, the making of such excess advances shall not
result in any increase in the amount of the Capital Account of such Partner. The
amount of any such excess advances shall be a debt obligation of the Partnership
to such Partner and shall be payable or collectible only out of the Partnership
assets in accordance with the terms and conditions upon which such advances are
made.
4.10 No Fractional Units. No fractional Units shall be issued by the
Partnership.
4.11 Splits and Combinations. (a) Subject to Section 4.11(d) hereof, the
General Partner may make a pro rata distribution of Units or Partnership
Securities to all Record Holders or may effect a subdivision or combination of
Units or other Partnership Securities; provided, however, that after any such
distribution,
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subdivision or combination, each Partner shall have the same Percentage Interest
in the Partnership as before such distribution, subdivision or combination.
(b) Whenever such a distribution, subdivision or combination of Units or
Partnership Securities is declared, the General Partner shall select a Record
Date as of which the distribution, subdivision or combination shall be effective
and shall send notice of the distribution, subdivision or combination at least
20 days prior to such Record Date, to each Record Holder as of the date not less
than 10 days prior to the date of such notice. The General Partner also may
cause a firm of independent public accountants selected by it to calculate the
number of Units to be held by each Record Holder after giving effect to such
distribution, subdivision or combination. The General Partner shall be entitled
to rely on any certificate provided by such firm as conclusive evidence of the
accuracy of such calculation.
(c) Promptly following any such distribution, subdivision or combination,
the General Partner may cause Depositary Receipts to be issued to the Record
Holders of Units as of the applicable Record Date representing the new number of
Units held by such Record Holders, or the General Partner may adopt such other
procedures as it may deem appropriate to reflect such distribution, subdivision
or combination; provided, however, that in the event any such distribution,
subdivision or combination results in a smaller total number of Units
outstanding, the General Partner shall require, as a condition to the delivery
to a Record Holder of such new Depositary Receipt, the surrender of any
Depositary Receipt held by such Record Holder immediately prior to such Record
Date.
(d) The Partnership shall not issue fractional Units upon any distribution,
subdivision or combination of Units. If a distribution, subdivision or
combination of Units would result in the issuance of fractional Units but for
the provisions of Section 4.10 and this Section 4.11(d), each fractional Unit
shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to
the next higher Unit).
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.1 Allocations For Capital Account Purposes. For purposes of maintaining
the Capital Accounts and in determining the rights of the Partners among
themselves, the Partnership's items of income, gain, loss and deduction
(computed in accordance with Section 4.6(b) hereof) shall be allocated among the
Partners in each taxable year (or portion thereof) as provided herein below.
(a) Net Income. After giving effect to the special allocations set
forth in Section 5.1(d), all items of income, gain, loss and deduction
taken into account in computing Net Income for such taxable period shall be
allocated in the same manner as such Net Income is allocated hereunder:
(i) First, 100% to the General Partner until the aggregate Net
Income allocated to the General Partner pursuant to this Section
5.1(a)(i) for the current taxable year and all previous taxable years is
equal to the aggregate Net Losses allocated to the General Partner
pursuant to Section 5.1(b)(v) for all previous taxable years;
(ii) Second, 100% to Partners holding Deferred Participation
Interests, in the proportion of the number of Deferred Participation
Interests held by each such Partner to the total number of Deferred
Participation Interests then outstanding, until the aggregate Net Income
allocated to such Partners pursuant to this Section 5.1(a)(ii) for the
current taxable year and all previous taxable years is equal to the
aggregate Net Losses allocated to such Partners pursuant to Section
5.1(b)(iv) for all previous taxable years;
(iii) Third, 100% to the Special Limited Partners, in the
proportion of the number of SPUs held by each such Partner to the total
number of SPUs then outstanding, until the aggregate Net Income
allocated to the Special Limited Partners pursuant to this Section
5.1(a)(iii) for the current taxable year and all previous taxable years
is equal to the aggregate Net Losses allocated to the Special Limited
Partners pursuant to Section 5.1(b)(iii) for all previous taxable years;
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(iv) Fourth, 100% to the Limited Partners, in accordance with their
respective Percentage Interests, until the aggregate Net Income
allocated to the Limited Partners pursuant to this Section 5.1(a)(iv)
for the current taxable year and all previous taxable years is equal to
the aggregate Net Losses allocated to the Limited Partners pursuant to
Section 5.1(b)(ii) for all previous taxable years; and
(v) Fifth, the balance, if any, 100% to the General Partner and the
Limited Partners in accordance with their respective Percentage
Interests.
(b) Net Losses. After giving effect to the special allocations set
forth in Section 5.1(d), all items of income, gain, loss and deduction
taken into account in computing Net Losses for such taxable period shall be
allocated in the same manner as such Net Losses are allocated hereunder:
(i) First, 100% to the General Partner and the Limited Partners, in
accordance with their respective Percentage Interests, until the
aggregate Net Losses allocated pursuant to this Section 5.1(b)(i) for
the current taxable year and all previous taxable years is equal to the
aggregate Net Income allocated to such Partners pursuant to Section
5.1(a)(v) for all previous taxable years;
(ii) Second, 100% to the Limited Partners, in accordance with their
respective Percentage Interests; provided, that Net Losses shall not be
allocated pursuant to this Section 5.1(b)(ii) to the extent that such
allocation would cause any Limited Partner to have a deficit balance in
its Adjusted Capital Account at the end of such taxable year (or
increase any existing deficit balance in its Adjusted Capital Account);
(iii) Third, 100% to the Special Limited Partners, in the
proportion of the number of SPUs held by each such Partner to the total
number of SPUs then outstanding; provided, that Net Losses shall not be
allocated pursuant to this Section 5.1(b)(iii) to the extent that such
allocation would cause any Special Limited Partner to have a deficit
balance in its Adjusted Capital Account at the end of such taxable year
(or increase any existing deficit balance in its Adjusted Capital
Account);
(iv) Fourth, if such taxable period ends prior to the conversion of
the last outstanding Deferred Participation Interest, pursuant to
Section 5.7(b) hereof, 100% to the Partners holding Deferred
Participation Interests, in the proportion of the number of Deferred
Participation Interests held by each such Partner to the total number of
Deferred Participation Interests then outstanding; provided, that Net
Losses shall not be allocated pursuant to this Section 5.1(b)(iv) to the
extent that such allocation would cause any Partner holding such
Deferred Participation Interests to have a deficit balance in its
Adjusted Capital Account at the end of such taxable year (or increase
any existing deficit balance in its Adjusted Capital Account); and
(v) Fifth, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 5.1(d), all items of gain and loss
taken into account in computing Net Termination Gain or Net Termination
Loss for such taxable period shall be allocated in the same manner as such
Net Termination Gain or Net Termination Loss is allocated hereunder. All
allocations under this Section 5.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this
Section 5.1 and after all distributions of Available Cash provided under
Section 5.4 have been made with respect to the taxable period ending on the
Liquidation Date.
(i) If a Net Termination Gain is recognized (or deemed recognized
pursuant to Section 4.6(d)) from Termination Capital Transactions, such
Net Termination Gain shall be allocated between the General Partner and
the Limited Partners in the following manner (and the Capital Accounts
of the Partners shall be increased by the amount so allocated in each of
the following
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subclauses, in the order listed, before an allocation is made pursuant
to the next succeeding subclause):
(A) First, to each Partner having a deficit balance in its
Capital Account, in the proportion of such deficit balance to the
deficit balances in the Capital Accounts of all Partners, until each
such Partner has been allocated Net Termination Gain equal to any
such deficit balance in its Capital Account;
(B) Second, 98% to the Limited Partners, in accordance with
their respective Percentage Interests, and 2% to the General Partner
until each Limited Partner's Capital Account (determined on a per
Unit basis) in respect of its Units is equal to the sum of (1) the
Unrecovered Capital attributable to each such Unit plus (2) the
Cumulative Base Deficiency, if any, attributable to each such Unit;
(C) Third, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until
each Limited Partner's Capital Account (determined on a per Unit
basis) in respect of its Units is equal to the First Liquidation
Target Amount, determined with respect to each such Unit;
(D) Fourth, if such Termination Capital Transaction occurs (or
is deemed to occur) prior to the conversion of the last outstanding
Deferred Participation Interest, pursuant to Section 5.7(b) hereof,
100% to the Partners holding such Deferred Participation Interests,
in the ratio of the number of Deferred Participation Interests held
by each such Partner to the total number of Deferred Participation
Interests then outstanding, in the amount which will increase the
Capital Account balance of each such Partner maintained with respect
to such Deferred Participation Interests to that amount which equals
its Unrecovered Capital attributable to such Deferred Participation
Interests, determined for the taxable year (or portion thereof) to
which this allocation of gain relates;
(E) Fifth, if such Termination Capital Transaction occurs (or is
deemed to occur) prior to the redemption of all SPUs then
outstanding, 100% to the Special Limited Partners holding such SPUs,
in the proportion of the number of SPUs held by each such Partner to
the total number of SPUs then outstanding, in the amount which will
increase the Capital Account balance of each such Special Limited
Partner maintained with respect to such SPUs to that amount which
equals its Unrecovered Capital attributable to such SPUs, determined
for the taxable year (or portion thereof) to which this allocation of
gain relates;
(F) Sixth, 88% to the Limited Partners, in accordance with their
respective Percentage Interests, and 12% to the General Partner until
each Limited Partner's Capital Account (determined on a per Unit
basis) is equal to the Second Liquidation Target Amount, determined
with respect to each such Unit;
(G) Seventh, 78% to the Limited Partners, in accordance with
their respective Percentage Interests, and 22% to the General Partner
until each Limited Partner's Capital Account (determined on a per
Unit basis) is equal to the Third Liquidation Target Amount,
determined with respect to each such Unit;
(H) Eighth, 68% to the Limited Partners, in accordance with
their respective Percentage Interests, and 32% to the General Partner
until each Limited Partner's Capital Account (determined on a per
Unit basis) is equal to the Fourth Liquidation Target Amount,
determined with respect to each such Unit; and
(I) Finally, the balance if any, 63% to all Limited Partners, in
accordance with their respective Percentage Interests, and 37% to the
General Partner.
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(ii) If a Net Termination Loss is recognized (or deemed recognized
pursuant to Section 4.6.(d)) from Termination Capital Transactions, such
Net Termination Loss shall be allocated to the Partners in the following
manner:
(A) First, 100% to the General Partner and the Limited Partners
in proportion to, and to the extent of, the positive balances in
their respective Capital Accounts;
(B) Second, if such Termination Capital Transaction occurs (or
is deemed to occur) prior to the redemption of all SPUs outstanding,
100% to the Special Limited Partners, in the proportion of the number
of SPUs held by each such Partner to the total number of SPUs then
outstanding, to the extent of the positive balances in their
respective Capital Accounts maintained with respect to such SPUs;
(C) Third, if such Termination Capital Transaction occurs (or is
deemed to occur) prior to the conversion of the last outstanding
Deferred Participation Interest, pursuant to Section 5.7(b) hereof,
100% to the Partners holding Deferred Participation Interests, in the
proportion of the number of Deferred Participation Interests held by
each such Partner to the total number of Deferred Participation
Interests then outstanding, to the extent of the positive balances in
their respective Capital Accounts maintained with respect to such
Deferred Participation Interests; and
(D) Fourth, the balance, if any, 100% to the General Partner.
(d) Special Allocations. Notwithstanding any other provision of this
Section 5.1, the following special allocations shall be made for such
taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 5.1, if there is a net decrease in Partnership
Minimum Gain during any Partnership taxable period, each Partner shall
be allocated items of Partnership income and gain for such period (and,
if necessary, subsequent periods) in proportion to, and to the extent
of, an amount equal to the greater of (A) the portion of such Partner's
share of the net decrease in Partnership Minimum Gain during such
taxable period that is allocable (in accordance with the principles set
forth in Treasury Regulation Section 1.704-1T(b)(4)(iv)(e)(2)) to the
disposition of Partnership property subject to one or more Nonrecourse
Liabilities of the Partnership, or (B) the deficit balance in such
Partner's Adjusted Capital Account at the end of such taxable period
(modified, as appropriate, by Treasury Regulation Section 1.704-
1T(b)(4)(iv)(e)(2)). The items to be so allocated shall be determined in
accordance with Treasury Regulation Section 1.704-1T(b)(4)(iv)(e) and,
for purposes of this Section 5.1(d), each Partner's Adjusted Capital
Account balance shall be determined, and the allocation of income or
gain required hereunder shall be effected, prior to the application of
any other allocations pursuant to this Section 5.1(d) with respect to
such taxable period. This Section 5.1(d)(i) is intended to comply with
the Partnership Minimum Gain chargeback requirement in Treasury
Regulation Section 1.704-1T(b)(iv)(4)(e) and shall be interpreted
consistently therewith.
(ii) Chargeback of Minimum Gain Attributable to Partner Nonrecourse
Debt. Notwithstanding the other provisions of this Section 5.1 (other
than Section 5.1(d)(i)), if there is a net decrease in Minimum Gain
Attributable to Partner Nonrecourse Debt during any Partnership taxable
period, any Partner with a share of Minimum Gain Attributable to Partner
Nonrecourse Debt at the beginning of such taxable period shall be
allocated items of Partnership income and gain for such period (and, if
necessary, subsequent periods) in proportion to, and to the extent of,
an amount equal to the greater of (A) the portion of such Partner's
share of the net decrease in the Minimum Gain Attributable to Partner
Nonrecourse Debt that is allocable (in accordance with the principles
set forth in Treasury Regulation Section 1.704-1T(b)(4)(iv)(h)(4)) to
the disposition of Partnership property subject to such Partner
Nonrecourse Debt, or (B) the deficit balance in such Partner's Adjusted
Capital Account at the end of such taxable period (modified, as
appropriate, by Treasury Regulation Section 1.704-1T(b)(4)(iv)(h)(4)).
The items to be so allocated shall be determined in a manner consistent
with the principles of Treasury Regulation Section 1.704-
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1T(b)(4)(iv)(e) and, for purposes of this Section 5.1(d), each Partner's
Adjusted Capital Account balance shall be determined and the allocation
of income or gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 5.1(d),
other than Section 5.1(d)(i), with respect to such taxable period. This
Section 5.1(d)(ii) is intended to comply with the chargeback of items of
income and gain requirement in Treasury Regulation Section
1.704-1T(b)(4)(iv)(h)(4) and shall be interpreted consistently
therewith.
(iii) Priority Allocations. All or a portion of the remaining
items of Partnership gross income or gain for the taxable period, if
any, shall be allocated 100% to the General Partner until the aggregate
amount of such items allocated to the General Partner under this
paragraph (iii) for the current taxable period and all previous taxable
periods is equal to the cumulative amount of cash distributed to the
General Partner as an Incentive Distribution from the Closing Date to a
date 45 days after the end of the current taxable period.
(iv) Qualified Income Offset. Except as provided in Sections
5.1(d)(i) and 5.1 (d)(ii), in the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in
Treasury Regulation 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) (modified, as
appropriate, by Treasury Regulation Sections 1.704-1T(b)(4)(iv)(e)(3)
and 1.704-1T(b)(4)(iv)(h)(4)), items of Partnership income and gain
shall be specifically allocated to such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Treasury
regulations, the deficit balance, if any, in its Adjusted Capital
Account created by such adjustments, allocations or distributions as
quickly as possible; provided, that an allocation pursuant to this
Section 5.1(d)(iv) shall be made only if and to the extent that such
Partner would have a deficit balance in its Adjusted Capital Account
after all other allocations provided in this Section 5.1 have been
tentatively made as if this Section 5.1(d)(iv) was not in the Agreement.
(v) Gross Income Allocations. In the event any Partner has a
deficit balance in its Capital Account at the end of any Partnership
taxable period that is in excess of the sum of (A) the amount such
Partner is obligated to restore pursuant to any provision of this
Agreement and (B) the amount such Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Treasury Regulation
Sections 1.704-1T(b)(4)(iv)(f) and 1.704-1T(b)(4)(iv)(h)(5), such
Partner shall be specially allocated items of Partnership gross income
and gain in the amount of such excess as quickly as possible; provided,
that an allocation pursuant to this Section 5.1(d)(v) shall be made only
if and to the extent that such Partner would have a deficit Capital
Account in excess of such sum after all other allocations provided for
in this Section 5.1 have been tentatively made as if Section 5.1(d)(iv)
hereof and this Section 5.1(d)(v) were not in the Agreement.
(vi) Nonrecourse Deductions. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in accordance with
their respective Percentage Interests. If the General Partner determines
in its good faith discretion that the Partnership's Nonrecourse
Deductions must be allocated in a different ratio to satisfy the safe
harbor requirements of the Treasury regulations promulgated under
Section 704(b) of the Code, the General Partner is authorized, upon
notice to the Limited Partners, to revise the prescribed ratio to the
numerically closest ratio which does satisfy such requirements.
(vii) Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any taxable period shall be allocated 100% to the Partner
that bears the Economic Risk of Loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Treasury Regulation Section
1.704-1T(b)(4)(iv)(h). If more than one Partner bears the Economic Risk
of Loss with respect to a Partner Nonrecourse Debt, such Partner
Nonrecourse Deductions attributable thereto shall be allocated between
or among such Partners in accordance with the ratios in which they share
such Economic Risk of Loss.
(viii) Nonrecourse Liabilities. For purposes of Treasury Regulation
Section 1.752-1T(e)(ii)(C), the Partners agree that Nonrecourse
Liabilities of the Partnership in excess of the
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sum of (A) the amount of Partnership Minimum Gain and (B) the total
amount of Nonrecourse Built-in Gain shall be allocated among the
Partners in accordance with their respective Percentage Interests.
(ix) Code Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Section
734(b) or 743(b) of the Code is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases
such basis), and such item of gain or loss shall be specially allocated
to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of
the Treasury regulations.
(x) Economic Uniformity. At the election of the General Partner
with respect to any taxable period or portion thereof, all or a portion
of the items of Partnership gross income, gain or expense for such
taxable period or portion thereof, if any, shall be allocated 100% to
each Partner holding Deferred Participation Interests during such
period or portion thereof, in the proportion of the number of Deferred
Participation Interests held by such Partner to the total number of
Deferred Participation Interests then outstanding, until each such
Partner has been allocated an amount of gross income, gain or expense
which adjusts the Capital Account maintained with respect to such
Interests to an amount equal to the product of (A) the number of
Deferred Participation Interests held by such Partner and (B) the Per
Unit Capital Amount. The purpose of this allocation is to establish
uniformity between the Capital Accounts underlying Deferred
Participation Interests and the Capital Accounts underlying Units held
by Public Unitholders. This allocation method for establishing such
economic uniformity will only be available to the General Partner if
the method for allocating the Capital Account maintained with respect
to the Deferred Participation Interests between the transferred and
retained Deferred Participation Interests pursuant to Section
4.6(c)(iii) is not applicable or does not otherwise provide such
economic uniformity to the Deferred Participation Interests.
Notwithstanding anything to the contrary provided herein, the
provisions of this subsection shall be applied to the General Partner
not later than with respect to the taxable period or portion of period
ending on the date of the temination of the Support Period.
(xi) Curative Allocation. (A) Notwithstanding any other provision
of this Section 5.1, other than the Required Allocations, the Required
Allocations shall be taken into account in making the Agreed Allocations
so that, to the extent possible, the net amount of items of income,
gain, loss and deduction allocated to each Partner pursuant to the
Required Allocations and the Agreed Allocations, together, shall be
equal to the net amount of such items that would have been allocated to
each such Partner under the Agreed Allocations had the Required
Allocations and this Curative Allocation not otherwise been provided in
this Section 5.1. Notwithstanding the preceding sentence, Required
Allocations relating to (1) Nonrecourse Deductions shall not be taken
into account except to the extent that there has been a decrease in
Partnership Minimum Gain and (2) Partner Nonrecourse Deductions shall
not be taken into account except to the extent that there has been a
decrease in Minimum Gain Attributable to Partner Nonrecourse Debts.
Allocations pursuant to this Section 5.1(d)(xi)(A) shall only be made
with respect to Required Allocations to the extent the General Partner
reasonably determines that such allocations will otherwise be
inconsistent with the economic agreement among the Partners. Further,
allocations pursuant to this Section 5.1(d)(xi)(A) shall be deferred
with respect to allocations pursuant to clauses (1) and (2) hereof to
the extent the General Partner reasonably determines that such
allocations are likely to be offset by subsequent Required Allocations.
(xii) Notwithstanding the other provisions of this Section 5.1(d)
(other than paragraphs (i) and (ii)) all or a portion of the remaining
items of Partnership gross income or gain for the taxable period, if
any, shall be allocated to each Partner who has received a deemed
distribution of Available Cash pursuant to Section 9.7 hereof until the
aggregate amount of such items allocated to each such Partner under
this paragraph (xii) for the current taxable period and all previous
taxable periods is equal to the cumulative amount of cash deemed
distributed to such Partner pursuant to Section 9.7 for the current
taxable period and all previous periods.
(B) The General Partner shall have reasonable discretion, with
respect to each taxable period, to (1) apply the provisions of Section
5.1(d)(xi)(A) hereof in whatever order is most likely to minimize the
economic distortions that might otherwise result from the Required
Allocations, and (2) divide all allocations pursuant to Section
5.1(d)(xi)(A) hereof among the Partners in a manner that is likely to
minimize such economic distortions.
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(xii) Restorative Allocation. (A) in the event (1) the
allocation described in Section 5.1(d)(x) is made pursuant to such
Section; (2) a Termination Capital Transaction occurs after such
allocation, but prior to the temrination of the Support Period; and (3)
as a result thereof there is a Net Termination Gain allocable to
periods ending on or prior to the end of the Support Period, then all
or a portion of the items of Partnership gross income or gain, if any,
for the taxable year in which such Termination Capital Transaction
occurs, shall be allocated pro rata to Partners holding Units, until
the allocation of gain or income that would have been made to the
General Partner absent the allocation made pursuant to this Section
5.1(d)(xii)(A) has instead been made to the holders of Units up to an
amount equal to the amount of the allocation previously made pursuant
to Section 5.1(d)(x). If the allocation of gain or income to Partners
holding Units pursuant to the preceding sentence is less than the
amount of the allocation previously made pursuant to Section 5.1(d)(x),
then an amount of Partnership loss or deduction for such taxable year
equal to such difference shall be allocated to the General Partner.
(B) In the event (1) the allocation described in Section
5.1(d)(x) is made pursuant to such Section; (2) a Termination Capital
Transaction occurs after such allocation, but prior to the termination
of the Support Period; and (3) as a result thereof there is a Net
Termination Loss allocable to periods ending on or prior to the end of
the Support Period, then all or a portion of the items of Partnership
loss or deduction, if any, for the taxable year in which such
Termination Capital Transaction occurs, shall be allocated to the
General Partner, until the allocation of loss or deduction that would
have been made to the Partners holding Units absent the allocation
made pursuant to this Section 5.1(d)(xii)(B) has instead been made to
the General Partner up to an amount equal to the amount of the
allocation previously made pursuant to Section 5.1(d)(x).
5.2 Allocations for Tax Purposes. (a) Except as otherwise provided
herein, for federal income tax purposes, each item of income, gain, loss and
deduction shall be allocated among the Partners in the same manner as its
correlative item of "book" income, gain, loss or deduction is allocated pursuant
to Section 5.1 hereof.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, depletion and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items attributable
thereto shall be allocated among the Partners in the manner provided under
Section 704(c) of the Code that takes into account the variation between
the Agreed Value of such property and its adjusted basis at the time of
contribution; and (B) except as otherwise provided in Section 5.2(b)(iv),
any item of Residual Gain or Residual Loss attributable to a Contributed
Property shall be allocated among the Partners in the same manner as its
correlative item of "book" gain or loss is allocated pursuant to Section
5.1.
(ii) (A) In the case of an Adjusted Property, such items shall (1)
first, be allocated among the Partners in a manner consistent with the
principles of Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and the
allocations thereof pursuant to Section 4.6(d)(i) or (ii), and (2) second,
in the event such property was originally a Contributed Property, be
allocated among the Partners in a manner consistent with Section
5.2(b)(i)(A); and (B) except as otherwise provided in Section 5.2(b)(iv),
any item of Residual Gain or Residual Loss attributable to an Adjusted
Property shall be allocated among the Partners in the same manner as its
correlative item of "book" gain or loss is allocated pursuant to Section
5.1.
(iii) Except as otherwise provided in Section 5.2(b)(iv), all other
items of income, gain, loss and deduction shall be allocated among the
Partners in the same manner as their correlative item of "book" gain or
loss is allocated pursuant to Section 5.1.
(iv) Any items of income, gain, loss or deduction otherwise allocable
under Section 5.2(b)(i)(B), 5.2(b)(ii)(B) or 5.2(b)(iii) shall be subject
to allocation by the General Partner in a manner designed
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to eliminate, to the maximum extent possible, Book-Tax Disparities in
a Contributed Property or Adjusted Property otherwise resulting from the
application of the "ceiling" limitation (under Section 704(c) of the Code
or Section 704(c) principles) to the allocations provided under Section
5.2(b)(i)(A) or 5.2(b)(ii)(A).
(c) For the proper administration of the Partnership and for the
preservation of uniformity of the Units (or any class or classes thereof), the
General Partner shall have sole discretion to (i) adopt such conventions as it
deems appropriate in determining the amount of depreciation, amortization and
cost recovery deductions; (ii) make special allocations for federal income tax
purposes of income (including gross income) or deductions; and (iii) amend the
provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of Treasury regulations under Section 704(b) or Section 704(c) of
the Code or (y) otherwise to preserve or achieve uniformity of the Units (or any
class or classes thereof). The General Partner may adopt such conventions, make
such allocations and make such amendments to this Agreement as provided in this
Section 5.2(c) only if such conventions, allocations or amendments would not
have a material adverse effect on the Partners, the holders of any class or
classes of Units issued and outstanding or the Partnership, and if such
allocations are consistent with the principles of Section 704 of the Code.
(d) The General Partner in its sole discretion may determine to depreciate
the portion of an adjustment under Section 743(b) of the Code attributable to
unrealized appreciation in any Adjusted Property (to the extent of the
unamortized Book-Tax Disparity) using a predetermined rate derived from the
depreciation method and useful life applied to the Partnership's common basis of
such property, despite the inconsistency of such approach with Proposed Treasury
Regulation Section 1.168-2(n) and Treasury Regulation Section 1.167(c)-1(a)(6).
If the General Partner later determines that such reporting position cannot
reasonably be taken, the General Partner may adopt a depreciation convention
under which all purchasers acquiring Units in the same month would receive
depreciation, based upon the same applicable rate as if they had purchased a
direct interest in the Partnership's property. If the General Partner chooses
not to utilize such aggregate method, the General Partner may use any other
reasonable depreciation convention to preserve the uniformity of the intrinsic
tax characteristics of any Units that would not have a material adverse effect
on the Limited Partners or the Record Holders of any class or classes of Units.
(e) 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 Section 5.2 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.
(f) All items of income, gain, loss, deduction and credit recognized by the
Partnership for federal income tax purposes and allocated to the Partners in
accordance with the provisions hereof shall be determined without regard to any
election under Section 754 of the Code which may be made by the Partnership;
provided, however, that such allocations once made, shall be adjusted as
necessary or appropriate to take into account those adjustments permitted or
required by Sections 734 and 743 of the Code.
(g) Each item of Partnership income, gain, loss and deduction
attributable to a transferred Partnership Interest shall, for federal income
tax purposes, be determined on an annual basis and prorated on a monthly basis
and shall be allocated to the Partners as of the opening of the New York Stock
Exchange on the first Business Day of each month; provided, however, that (i)
except as otherwise provided in clause (ii), such items for the period
beginning on the Closing Date and ending on the last day of the month in which
the Closing Date occurs shall be allocated to Partners as of the opening of the
New York Stock Exchange on the first Business Day of the next succeeding month
or (ii) if the Underwriters' over-allotment option is exercised, such items for
the period beginning on the Closing Date and ending on the last day of the
month in which the Second Time of Delivery (as defined in the Underwriting
Agreement) occurs shall be allocated to the Partners as of the opening of the
New York Stock Exchange on the first Business Day of the next succeeding month;
and provided, further, that gain or loss on a sale or other disposition of any
assets of the Partnership other than in the ordinary course of business shall
be allocated to the Partners as of the opening of the New York Stock Exchange
on the first Business Day of the month in which such gain or loss is recognized
for
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federal income tax purposes. The General Partner may revise, alter or
otherwise modify such methods of allocation as it determines necessary, to the
extent permitted or required by Section 706 of the Code and the regulations or
rulings promulgated thereunder.
(h) Allocations that would otherwise be made to a Limited Partner under the
provisions of this Article V shall instead be made to the beneficial owner of
Units held by a nominee in any case in which the nominee has furnished the
identity of such owner to the Partnership in accordance with Section 6031(c) of
the Code or any other method acceptable to the General Partner in its sole
discretion.
5.3 Requirement and Characterization of Distributions. Within 60 days
following the end of each calendar quarter (or following the period from the
Closing Date to June 30, 1989) an amount equal to 100% of Available Cash with
respect to such quarter (or period) shall be distributed in accordance with this
Article V by the Partnership to the Partners, as of the Record Date selected by
the General Partner in its reasonable discretion. The foregoing shall not modify
in any respect the provisions of Section 4.2 hereof regarding the distribution
of any interest or other profit on the initial Capital Contributions referred to
therein. The General Partner shall have the right to determine in its sole
discretion whether a particular distribution of cash consists of Available Cash
or Cash From Capital Transactions and the amount of cash in each such category,
except to the extent it is established that such determination is contrary to
any of the express provisions in this Agreement. Except as otherwise provided in
Section 5.5(b), the Partnership shall not be obligated to make distributions of
Cash From Capital Transactions and the General Partner shall have the right to
cause the Partnership to use Cash From Capital Transactions for any purpose the
General Partner deems necessary or desirable, including but not limited to,
purchase of Units in the public market, in privately negotiated transactions or
otherwise (and in no event shall the General Partner be obligated to cause such
purchases to be made on a pro rata basis or to afford every Limited Partner an
equal opportunity to participate in the transactions involved).
5.4 Distributions. Available Cash with respect to any calendar quarter
shall be distributed as follows:
(a) First, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the Minimum Quarterly Amount;
(b) Second, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to any Cumulative Base Deficiency existing as of the end of such
quarter;
(c) Third, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the excess of the First Target Amount over the Minimum Quarterly
Amount;
(d) Fourth, 100% to the Special Limited Partners, in proportion to the
Unrecovered Capital balance attributable to the respective SPUs held by
them, to the extent necessary to redeem any and all then outstanding SPUs
at a price equal to the Unrecovered Capital attributable thereto;
(e) Fifth, 88% to the Limited Partners, in accordance with their
respective Percentage Interests, and 12% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the excess of the Second Target Amount over the First Target
Amount;
(f) Sixth, 78% to the Limited Partners, in accordance with their
respective Percentage Interests, and 22% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the excess of the Third Target Amount over the Second Target
Amount;
(g) Seventh, 68% to the Limited Partners, in accordance with their
respective Percentage Interests and 32% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the Fourth Target Amount over the Third Target Amount; and
(h) Finally, the balance, if any, 63% to the Limited Partners, in
accordance with their respective Percentage Interests, and 37% to the
General Partner.
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5.5 Distributions of Cash from Capital Transactions. (a) Cash from Capital
Transactions which the General Partner determines in accordance with Section 5.3
to distribute shall be distributed, unless the provisions of Section 5.5(b)
hereof require otherwise, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until the Limited
Partners have received, since the Closing Date through such date, distributions
of Available Cash that are deemed to be Cash from Capital Transactions in an
aggregate amount equal to the product obtained by multiplying (i) the Initial
Unit Price by (ii) 12,500,000 (increased by the number of Units, if any, issued
pursuant to exercise of the Underwriters' over-allotment option). Thereafter,
any Cash from Capital Transactions shall be distributed in accordance with
Section 5.4.
(b) If one or more Capital Transactions shall occur in any taxable year,
then (except as otherwise provided below) the General Partner shall be required
to make a distribution of Cash from Capital Transactions on or before the April
1st next following the end of the taxable year in which such Capital
Transactions occur in accordance with the following procedures:
(i) The General Partner shall determine the net capital gain and net
ordinary income recognized by the Partnership (without taking account of
any Code Section 743 adjustments) for federal income tax purposes from all
Capital Transactions during such year, and shall then determine the portion
of such net capital gain and net ordinary income allocable to Units
purchased by the Underwriters pursuant to the Underwriting Agreement for
federal income tax purposes. Such portion of any net capital gain or net
ordinary income shall then be divided by the number of Units purchased by
the Underwriters pursuant to the Underwriting Agreement.
(ii) The General Partner shall then cause the Partnership to
distribute to the Partners, in accordance with their respective Percentage
Interests, cash until an amount has been distributed pursuant
hereto with respect to every Unit outstanding on the Record Date
established by the General Partner with respect to such distribution equal
to 125% of the federal income tax liability that would be due with respect
to the "net capital gain" and "net ordinary income" attributed to each
outstanding Unit on the Record Date for the distribution to be made
pursuant to the preceding sentence (assuming for such purpose that the
maximum effective federal income tax rates for individuals, relating to
either long-term capital gain or ordinary income, whichever the case may
be, applied to all holders of Units at the time of such recognition without
regard to any recapture of lower rates or alternative minimum tax rate).
(iii) No distribution of Cash from Capital Transactions shall be
required by this Section 5.5(b) with respect to any tax year if the amount
otherwise distributable for such taxable year under this Section 5.5(b)
does not exceed $0.10 per Unit, or if such distribution shall be prohibited
by requirements binding upon the Partnership or any Subsidiary at the time
such distribution would otherwise be required (including but not limited to
any such requirement imposed by any loan agreement then in effect).
5.6 Adjustment of Minimum Quarterly Amount, Unrecovered Capital,
Cumulative Base Deficiency and Target Amounts. (a) The Minimum Quarterly
Amount, Unrecovered Capital, Cumulative Base Deficiency, First Target Amount,
Second Target Amount, Third Target Amount and Fourth Target Amount shall be
proportionately adjusted in the event of any distribution, combination or
subdivision (whether effected by a distribution payable in Units or otherwise)
of Units or Partnership Securities in accordance with Section 4.11 hereof. In
the event of a distribution of Cash from Capital Transactions, the Minimum
Quarterly Amount, First Target Amount, Second Target Amount, Third Target
Amount and Fourth Target Amount shall be adjusted proportionately downward to
equal the product of the otherwise applicable Minimum Quarterly Amount, First
Target Amount, Second Target Amount, Third Target Amount and Fourth Target
Amount, as the case may be, by a fraction, of which the numerator is the
Unrecovered Capital immediately after giving effect to such distribution and of
which the denominator is the Unrecovered Capital immediately prior to giving
effect to such distribution.
(b) The Minimum Quarterly Amount, First Target Amount, Second Target
Amount, Third Target Amount and Fourth Target Amount shall also be subject to
adjustment pursuant to Section 9.6 hereof.
5.7 Special Provisions Relating to the Deferred Participation
Interests. (a) During the Support Period, the holder of a Deferred
Participation Interest shall not be entitled to any cash distributions and
shall only
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possess the rights and obligations specifically provided in this Agreement
with respect to a Deferred Participation Interest (and no other rights
otherwise available to a holder of a Partnership Interest).
(b) Immediately upon the expiration of the Support Period, the General
Partner shall take all reasonable steps necessary, based on advice of counsel,
including the application of Sections 4.6(c)(ii), 4.6(c)(iii) and 5.1(d)(x);
provided, however, that no such steps may be taken that would have a material
adverse effect on the Limited Partners or the Record Holders of any class or
classes of Units, to ensure that each Deferred Participation Interest has, as a
substantive matter, like intrinsic economic and federal income tax
characteristics, in all material respects, to the intrinsic economic and
federal income tax characteristics of a Unit then outstanding, and each
Deferred Participation Interest shall, upon the expiration of the Support
Period, automatically convert to a Unit and from that time forward shall
constitute a Unit for all purposes under this Agreement.
ARTICLE VI
MANAGEMENT AND OPERATION OF BUSINESS
6.1 Management. (a) The General Partner shall conduct, direct and
exercise full control over all activities of the Partnership. Except as
otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Partnership shall be exclusively vested in the
General Partner, and no Limited Partner shall have any right of control or
management power over the business and affairs of the Partnership. In addition
to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner, subject to
Section 6.3 hereof, shall have full power and authority to do all things deemed
necessary or desirable by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.2 hereof and to effectuate the
purposes set forth in Section 3.1 hereof including, without limitation, (i) the
making of any expenditures, the borrowing of money, the guaranteeing of
indebtedness and other liabilities, the issuance of evidences of indebtedness
and the incurring of any obligations it deems necessary for the conduct of the
activities of the Partnership; (ii) the making of tax, regulatory and other
filings, or rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the Partnership;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation
or exchange of any assets of the Partnership or the merger or other combination
of the Partnership with or into another entity (all of the foregoing subject to
any prior approval which may be required by Section 6.3 hereof); (iv) the use of
the assets of the Partnership (including, without limitation, cash on hand) for
any purpose consistent with the terms of this Agreement and on any terms it sees
fit, including, without limitation, the financing of the conduct of the
operations of the Partnership or any Subsidiary, the lending of funds to other
persons (including any Subsidiary) and the repayment of obligations of the
Partnership and any Subsidiary and the making of capital contributions to any
Subsidiary; (v) the negotiation and execution on any terms deemed desirable in
its sole discretion and the performance of any contracts, conveyances or other
instruments that it considers useful or necessary to the conduct of the
Partnership operations or the implementation of its powers under this Agreement;
(vi) the distribution of Partnership cash; (vii) the selection and dismissal of
employees and agents (including, without limitation, employees having titles
such as "president", "vice president", "secretary" and "treasurer") and agents,
outside attorneys, accountants, consultants and contractors and the
determination of their compensation and other terms of employment or hiring;
(viii) the maintenance of such insurance for the benefit of the Partnership and
the Partners as it deems necessary or appropriate; (ix) the formation of, or
acquisition of an interest in, and the contribution of property to, any further
limited or general partnerships, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition of interests in,
and the contributions of property to any Subsidiary from time to time); (x) the
control of any matters affecting the rights and obligations of the Partnership,
including the conduct of litigation and the incurring of legal expense and the
settlement of claims and litigation; (xi) the lending or borrowing of money, the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness and the securing of same
by mortgage, deed of trust or other lien or encumbrance, the bringing and
defending of actions at law or in equity and the indemnification of any Person
against liabilities and contingencies to the extent permitted by law; (xii)
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the entering into listing agreements with the New York Stock Exchange and any
other securities exchange and delisting some or all of the Units from, or
requesting that trading be suspended on, any such exchange (subject to any
prior approval which may be required under Section 1.6 hereof); (xiii) the
undertaking of any action in connection with the Partnership's investment in
any Subsidiary (including, without limitation, the contribution or loan by
the Partnership to any Subsidiary of funds); and (xiv) the undertaking of any
action in connection with the Partnership's direct or indirect investment in
any Subsidiary.
(b) Each of the Partners and each other Person who may acquire an
interest in Units hereby approves, ratifies and confirms the execution,
delivery and performance by the parties thereto of the Deposit Agreement, the
Underwriting Agreement, and the other agreements described in the Registration
Statement, and agrees that the General Partner is authorized to execute,
deliver and perform the above-mentioned agreements and transactions and such
other agreements described in the Registration Statement on behalf of the
Partnership without any further act, approval or vote of the Partners or the
other Persons who may acquire an interest in Units, notwithstanding any other
provision of this Agreement, the Delaware Act or any applicable law, rule or
regulation. None of the execution, delivery or performance by the General
Partner, the Partnership or any Affiliate of any of them of any agreement
authorized or permitted under this Agreement shall constitute a breach by the
General Partner of any duty that the General Partner may owe the Partnership or
the Limited Partners or any other Persons under this Agreement or of any duty
stated or implied by law or equity.
6.2 Certificate of Limited Partnership. The General Partner has filed the
Certificate of Limited Partnership with the Secretary of State of the State of
Delaware as required by the Delaware Act and 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) in the State of Delaware or any other state in
which the Partnership may elect to do business or own property. To the extent
that such action is determined by the General Partner to be reasonable and
necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate of Limited Partnership 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
or any other state in which the Partnership may elect to do business or own
property. Subject to the terms of Section 7.5(a) hereof, the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the
Certificate of Limited Partnership or any amendment thereto to any Limited
Partner.
6.3 Restrictions on General Partner's Authority. (a) The General Partner
may not, without the written approval of the specific act by all of the Limited
Partners or by other written instrument executed and delivered by all of the
Limited Partners subsequent to the date of this Agreement, take any action in
contravention of this Agreement, including, without limitation, (i) take any act
that would make it impossible to carry on the ordinary business of the
Partnership, except as otherwise provided in this Agreement; (ii) possess
Partnership property, or assign any rights in specific Partnership property, for
other than a Partnership purpose; (iii) admit a person as a Partner, except as
otherwise provided in this Agreement; (iv) amend this Agreement in any manner,
except as otherwise provided in this Agreement; or (v) transfer its interest as
General Partner of the Partnership, except as otherwise provided in this
Agreement.
(b) Except as provided in Article XIV hereof, the General Partner may not
sell, exchange or otherwise dispose of all or substantially all of the
Partnership's assets in a single transaction or a series of related transactions
(including by way of merger, consolidation or other combination with any other
Person) or approve on behalf of the Partnership the sale, exchange or other
disposition of all or substantially all of the assets of the Facilities
Subsidiary, without the approval of at least 66 2/3% of the outstanding Units
(excluding any Units owned by the General Partner and its Affiliates) during the
Support Period and thereafter without the approval of at least a majority of the
outstanding Units (excluding any Units owned by the General Partner and its
Affiliates); provided, however, that this provision shall not preclude or limit
the mortgage, pledge, hypothecation or grant of a security interest in all or
substantially all of the Partnership's assets and shall not apply to any forced
sale of any or all of the Partnership's assets pursuant to the foreclosure of,
or other realization upon, any such encumbrance.
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(c) Unless approved by the affirmative vote of the holders of at least
66 2/3% of each class of outstanding Units and the affirmative vote of the
holders of at least a majority of outstanding Units excluding for purposes of
such determination any Units owned by the General Partner and its Affiliates,
the General Partner shall not take any action or refuse to take any reasonable
action the effect of which, if taken or not taken, as the case may be, would be
to cause the Partnership to be treated for federal income tax purposes as an
association taxable as a corporation.
(d) At all times while serving as the general partner of the Partnership,
the General Partner will not make any dividend or distribution on, or repurchase
any stock or take any other action if the effect of such dividend or
distribution, repurchase or other action would be to reduce its net worth below
an amount necessary to receive an Opinion of Counsel that the Partnership will
be treated as a partnership for federal income tax purposes.
6.4 Reimbursement of the General Partner. (a) Except as provided in this
Section 6.4 and elsewhere in this Agreement, the General Partner shall not be
compensated for its services as general partner of the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole discretion, for (i)
all direct and indirect expenses it incurs or payments it makes on behalf of the
Partnership (including amounts paid to any Person to perform services to or for
the Partnership) and (ii) that portion of the General Partner's or its
Affiliates' legal, accounting, investor communications, utilities, telephone,
secretarial, travel, entertainment, bookkeeping, reporting, data processing,
office rent and other office expenses (including overhead charges), salaries,
fees and other compensation and benefit expenses of employees, officers and
directors, other administrative or overhead expenses and all other expenses, in
each such case, necessary or appropriate to the conduct of the Partnership's
business and allocable to the Partnership or otherwise incurred by the General
Partner in connection with operating the Partnership's business (including,
without limitation, expenses allocated to the General Partner by its
Affiliates). The General Partner shall determine the fees and expenses that are
allocable to the Partnership in any reasonable manner determined by the General
Partner in its sole discretion. Such reimbursements shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 6.7 hereof.
(c) Subject to Section 4.4(c) hereof, the General Partner in its sole
discretion and without the approval of the Limited Partners may propose and
adopt on behalf of the Partnership, employee benefit plans (including, without
limitation, plans involving the issuance of Units), for the benefit of employees
of the General Partner, the Partnership, any Subsidiary or any Affiliate of any
of them in respect of services performed, directly or indirectly, for the
benefit of the Partnership or any Subsidiary.
6.5 Outside Activities. (a) After the Closing Date, the General Partner
shall not, for so long as it is the general partner of the Partnership, enter
into or conduct any business nor incur any debts or liabilities except in
connection with or incidental to (i) its performance of the activities required
or authorized by this Agreement or described in or contemplated by the
Registration Statement and (ii) the acquisition, ownership or disposition of the
partnership interest in the Partnership or its equity interest in any
Subsidiary.
(b) Except as described in the Registration Statement or provided in
Section 6.5(a) hereof, no Indemnitee shall be expressly or implicitly restricted
or proscribed pursuant to this Agreement or the partnership relationship
established hereby from engaging in other activities for profit, whether in the
businesses engaged in by the Partnership or anticipated to be engaged in by the
Partnership or otherwise, including, without limitation, those businesses
described in or contemplated by the Registration Statement. Neither the
Partnership, any Limited Partner nor any other Person shall have any rights by
virtue of this Agreement or the partnership relationship established hereby or
thereby in any business ventures of any Indemnitee, and, except as set forth in
the Registration Statement, such Indemnitees shall have no obligation to offer
any interest in any such business ventures to the Partnership, any Limited
Partner or any such other Person. The General Partner and any other Persons
affiliated with the General Partner may acquire Units or Partnership Securities,
in addition to those acquired by any of such Persons on the Closing Date, and
shall be
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entitled to exercise all rights of an Assignee or Limited Partner, as
applicable, relating to such Units or Partnership Securities, as the case may
be.
6.6 Contracts with Affiliates. (a) The Partnership may lend or
contribute to any Subsidiary, and any other Subsidiary may borrow funds, on
terms and conditions established in the sole discretion of the General Partner.
The foregoing authority shall be exercised by the General Partner in its
reasonable discretion and shall not create any right or benefit in favor of any
Subsidiary or any other Person. The Partnership may not lend funds to the
General Partner or any of its Affiliates.
(b) The General Partner may itself, or may enter into an agreement with any
of its Affiliates to, render services to the Partnership. Any services rendered
to the Partnership by the General Partner or any of its Affiliates shall be on
terms that are fair and reasonable to the Partnership. The provisions of Section
6.4 hereof shall apply to the rendering of services described in this Section
6.6(b).
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions consistent
with this Agreement and applicable law.
(d) Neither the General Partner nor any of its Affiliates shall sell,
transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership; provided, however, that the requirements
of this Section 6.6(d) shall be deemed to be satisfied as to any transactions
described in or contemplated by the Registration Statement.
6.7 Indemnification. (a) To the fullest extent permitted by law but
subject to the limitations expressly provided in this Agreement, each Indemnitee
shall be indemnified and held harmless by the Partnership from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including legal fees and expenses), judgments, fines, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, by reason of
its status as (x) the General Partner, a Departing Partner or any of their
Affiliates, (y) an employee, partner, agent or trustee of the General Partner,
any Departing Partner or any of their Affiliates or (z) a Person serving at the
request of the Partnership in another entity in a similar capacity, provided
that in each case the Indemnitee acted in good faith and in the manner which
such Indemnitee believed to be in, or not opposed to, the best interests of the
Partnership and, with respect to any criminal proceeding, had no reasonable
cause to believe its conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
the Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 6.7 shall be made only out of the
assets of the Partnership.
(b) To the fullest extent permitted by law, expenses (including legal fees
and expenses) incurred by an Indemnitee in defending any claim, demand, action,
suit or proceeding shall, from time to time, be advanced by the Partnership
prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Partnership of an undertaking by or on behalf of the
Indemnitee to repay such amount if it shall be determined that the Indemnitee is
not entitled to be indemnified as authorized in this Section 6.7.
(c) The indemnification provided by this Section 6.7 shall be in addition
to any other rights to which an Indemnitee 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.
(d) The Partnership may purchase and maintain insurance, on behalf of the
General Partner and such other Persons as the General Partner shall determine,
against any liability that may be asserted against or expense that may be
incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 6.7, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership
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also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute "fines" within the meaning of Section 6.7(a); and action taken
or omitted by it with respect to an employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants, and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners or the
Special Limited Partners to personal liability by reason of the indemnification
provisions set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part
under this Section 6.7 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 6.7 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligation of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 6.7 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.
6.8 Liability of Indemnitees. (a) Notwithstanding anything to the
contrary set forth in this Agreement, no Indemnitee shall be liable for
monetary damages to the Partnership, Limited Partners, Special Limited Partners
or to any Persons who have acquired interests in the Units for losses sustained
or liabilities incurred as a result of any act or omission if such Indemnitee
acted in good faith.
(b) Subject to its obligations and duties as General Partner set forth in
Section 6.1(a) hereof, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents and the General Partner
shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by it in good faith.
(c) Any amendment, modification or repeal of this Section 6.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations or the liability to the Partnership, the Limited Partners and the
Special Limited Partners of the General Partner, their directors, officers,
partners and employees under this Section 6.8 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.
6.9 Resolution of Conflicts of Interest. (a) Unless otherwise expressly
provided in this Agreement, whenever a potential conflict of interest exists or
arises between the General Partner or any of its Affiliates, on the one hand,
and the Partnership or any Partner, on the other hand, any resolution or course
of action in respect of such conflict of interest shall be permitted and deemed
approved by all Partners, and shall not constitute a breach of this Agreement,
of any agreement contemplated herein, or of any duty stated or implied by law or
equity, if the resolution or course of action is or, by operation of this
Agreement, is deemed to be fair and reasonable to the Partnership. Any such
resolution or course of action in respect of any conflict of interest shall not
constitute a breach of this Agreement, of any other agreement contemplated
herein, or of any duty stated or implied by law or equity, if such resolution or
course of action is fair and reasonable to the Partnership. The General Partner
shall be authorized in connection with its resolution of any conflict of
interest to consider (i) the relative interests of any party to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interest; (ii) any customary or accepted industry practices; (iii) any
applicable generally accepted accounting practices or principles; and (iv) such
additional factors as the General Partner determines in its sole discretion to
be relevant, reasonable or appropriate under the circumstances. Nothing
contained in this Agreement, however, is intended to nor shall it be construed
to require the General Partner to consider the interests of any Person other
than the Partnership. In the absence
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of bad faith by the General Partner, the resolution, action or terms so
made, taken or provided by the General Partner with respect to such matter
shall not constitute a breach of this Agreement or any other agreement
contemplated herein or a breach of any standard of care or duty imposed herein
or therein or under the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner or any of its Affiliates is permitted or
required to make a decision (i) in its "discretion" or under a grant of similar
authority or latitude, the General Partner or such Affiliate shall be entitled
to consider only such interests and factors as it desires and shall have no duty
or obligation to give any consideration to any interest of, or factors
affecting, the Partnership or any Limited Partner, or (ii) in "good faith" or
under another express standard, the General Partner or such Affiliate shall act
under such express standard and shall not be subject to any other or different
standards imposed by this Agreement or any other agreement contemplated hereby.
(c) Whenever a particular transaction, arrangement or resolution of a
conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair and reasonable nature of such transaction,
arrangement or resolution shall be considered in the context of all similar or
related transactions.
6.10 Other Matters Concerning the General Partner. (a) The General
Partner may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion (including an Opinion of Counsel) of such Persons as to matters
which such General Partner reasonably believes to be within such Person's
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty which
is permitted or required to be done by the General Partner hereunder.
6.11 Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, 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 assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner 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 assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets 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 assets is
held.
6.12 Reliance by Third Parties. Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority to encumber, sell
or otherwise use in any manner any and all assets of the Partnership and to
enter into any contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if it were the Partnership's sole
party in interest, both legally and beneficially. Each Limited Partner hereby
waives any and all defenses or other remedies which may be available against
such Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or its representatives be obligated to ascertain that the terms
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of this Agreement have been complied with or to inquire into the necessity or
expedience of any act or action of the General Partner or its representatives.
Each and every certificate, document or other instrument executed on behalf of
the Partnership by the General Partner or its representatives shall be
conclusive evidence in favor of any and every Person relying thereon or claiming
thereunder that (a) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (b) the Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on behalf of the
Partnership and (c) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.
ARTICLE VII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
7.1 Limitation of Liability. The Limited Partners and the Organizational
Limited Partner shall have no liability under this Agreement except as expressly
provided in this Agreement or the Delaware Act.
7.2 Management of Business. No Limited Partner or Assignee (other
than the General Partner, any of its Affiliates or any officer, director,
employee, partner, agent or trustee of the General Partner or any of its
Affiliates, in its capacity as such) shall take part in the operation,
management or control (within the meaning of the Delaware Act) of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership. The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, employee, partner, agent or trustee of the General
Partner or any of its Affiliates, in its capacity as such, shall not affect,
impair or eliminate the limitations on the liability of the Limited Partners or
Assignees under this Agreement.
7.3 Outside Activities. Subject to the provisions of Section 6.5 hereof,
which shall continue to be applicable to the Persons referred to therein,
regardless of whether such Persons shall also be Limited Partners or Assignees,
any Limited Partner shall be entitled to and may have business interests and
engage in business activities in addition to those relating to the Partnership,
including business interests and activities in direct competition with the
Partnership. 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.
7.4 Return of Capital. No Limited Partner shall be entitled to the
withdrawal or return of his Capital Contribution, except to the extent of
distributions made pursuant to this Agreement or upon termination of the
Partnership as provided herein. Except to the extent provided by Article V
hereof or as otherwise expressly provided in this Agreement, no Limited Partner
or Assignee shall have priority over any other Limited Partner or Assignee
either as to the return of Capital Contributions or as to profits, losses or
distributions.
7.5 Rights of Limited Partners Relating to the Partnership. (a) In
addition to other rights provided by this Agreement or by applicable law, and
except as limited by Section 7.5(b) hereof, each Limited Partner shall have the
right, for a purpose reasonably related to such Limited Partner's interest as a
limited partner in the Partnership, upon reasonable demand and at such Limited
Partner's own expense:
(i) to obtain true and full information regarding the status of the
business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local income tax returns for each year;
(iii) to have furnished to him, upon notification to the General
Partner, a current list of the name and last known business, residence or
mailing address of each Partner;
(iv) to have furnished to him, upon notification to the General
Partner, a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with executed copies of
all powers of attorney pursuant to which this Agreement, the Certificate of
Limited Partnership and all amendments thereto have been executed;
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(v) to obtain true and full information regarding the amount of cash
and a description and statement of the Agreed Value of any other Capital
Contribution by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a Partner; and
(vi) to obtain such other information regarding the affairs of the
Partnership as is just and reasonable.
(b) Notwithstanding any other provision of this Section 7.5, the General
Partner may keep confidential from the Limited Partners for such period of time
as the General Partner determines in its sole discretion to be reasonable, any
information that the General Partner reasonably believes to be in the nature of
trade secrets or other information the disclosure of which the General Partner
in good faith believes is not in the best interests of the Partnership or
which the Partnership is required by law or by agreements with unaffiliated
third parties to maintain confidentiality.
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 Records and Accounting. The General Partner shall keep or cause to be
kept at the principal office of the Partnership appropriate books and records
with respect to the Partnership's business including, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section 7.5(a)
hereof. Any records maintained by or on behalf of the Partnership in the regular
course of its business, including the record of the Record Holders and Assignees
of Units, Depositary Units or Partnership Securities, books of account and
records of Partnership proceedings, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books of
the Partnership shall be maintained, for financial reporting purposes, on an
accrual basis in accordance with generally accepted accounting principles.
8.2 Fiscal Year. The fiscal year of the Partnership shall be the calendar
year.
8.3 Reports. (a) As soon as practicable, but in no event later than 120
days after the close of each Partnership Year, the General Partner shall cause
to be mailed to each Record Holder of a Unit as of a date selected by the
General Partner in its sole discretion, an annual report containing financial
statements of the Partnership for such Partnership Year, presented in accordance
with generally accepted accounting principles, including a balance sheet and
statements of operations, Partners' equity and changes in financial position,
such statements to be audited by a firm of independent public accountants
selected by the General Partner.
(b) As soon as practicable, but in no event later than 45 days after the
close of each calendar quarter except the last calendar quarter of each year,
the General Partner shall cause to be mailed to each Record Holder of a Unit, as
of a date selected by the General Partner in its sole discretion, a report
containing unaudited financial statements of the Partnership and such other
information as may be required by applicable law, regulation or rule of any
National Securities Exchange on which the Units are listed for trading, or as
the General Partner determines to be appropriate.
ARTICLE IX
TAX MATTERS
9.1 Preparation of Tax Returns. The General Partner shall arrange for the
preparation and timely filing of all returns of Partnership income, gains,
deductions, losses and other items required of the Partnership for federal and
state income tax purposes and shall use all reasonable efforts to furnish,
within 90 days of the close of each taxable year, the tax information reasonably
required by Unitholders for federal and state income tax reporting purposes. The
classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for
federal income tax purposes. The taxable year of the Partnership shall be the
calendar year.
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9.2 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole discretion, determine whether to make any available
election pursuant to the Code; provided, however, that the General Partner shall
make the election under Section 754 of the Code in accordance with applicable
regulations thereunder. The General Partner shall have the right to seek to
revoke any such election (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination in its sole
discretion that such revocation is in the best interests of the Limited Partners
and Assignees. For purposes of computing the adjustments under Section 743(b) of
the Code, the General Partner shall be authorized (but not required) to adopt a
convention whereby the price paid by a transferee of Units will be deemed to be
the lowest quoted trading price of the Units on any National Securities Exchange
on which such Units are traded during the calendar month in which such transfer
is deemed to occur pursuant to Section 5.2(g) hereof without regard to the
actual price paid by such transferee.
9.3 Tax Controversies. Subject to the provisions hereof, the General
Partner is designated the Tax Matters Partner (as defined in Section 6231 of the
Code), and is authorized and required to represent the Partnership (at the
Partnership's expense) in connection with all examinations of the Partnership's
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and costs
associated therewith. Each Partner or Assignee agrees to cooperate with the
General Partner and to do or refrain from doing any or all things reasonably
required by the General Partner to conduct such proceedings.
9.4 Organizational Expenses. The Partnership shall elect to deduct
expenses, if any, incurred by it in organizing the Partnership ratably over a
60-month period as provided in Section 709 of the Code.
9.5 Withholding. Notwithstanding any other provision of this Agreement,
the General Partner is authorized to take any action that it determines in its
sole discretion to be necessary or appropriate to cause the Partnership to
comply with any withholding requirements established under the Code or any other
federal, state or local law including, without limitation, pursuant to Sections
1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is
required to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to any Partner or Assignee
(including by reason of Section 1446 of the Code), the amount withheld shall be
treated as a distribution of cash pursuant to Section 5.3 hereof in the amount
of such withholding from such Partner.
9.6 Entity-Level Taxation. If legislation is enacted which causes the
Partnership to become treated as an association taxable as a corporation for
federal income tax purposes, then with respect to any calendar quarter, the
Minimum Quarterly Amount, the First Target Amount, Second Target Amount, Third
Target Amount or Fourth Target Amount, as the case may be, shall be equal to the
product of (i) the amount of such distribution multiplied by (ii) 1 minus the
sum of (x) the highest marginal federal corporate income tax rate for the
Partnership Year in which such quarter occurs (expressed as a percentage) plus
(y) the effective overall state and local income tax rate (expressed as a
percentage) applicable to the Partnership for the calendar year next preceding
the calendar year in which such quarter occurs (after taking into account the
benefit of any deduction allowable for federal income tax purposes with respect
to the payment of state and local income taxes). Such effective overall state
and local income tax rate shall be determined for the calendar year next
preceding the first calendar year during which the Partnership is taxable for
federal income tax purposes as a corporation or as an association taxable as a
corporation by determining such rate as if the Partnership had been subject to
such state and local taxes during such preceding calendar year.
9.7 Entity-Level Deficiency Collections. If the Partnership is required
by applicable law to pay any federal, state or local income tax on behalf of any
Partner or Assignee or any former Partner or Assignee (i) the General Partner
shall pay such tax on behalf of such Partner or Assignee or former Partner or
Assignee from the funds of the Partnership; (ii) any amount so paid on behalf of
any Partner or Assignee shall constitute a distribution of Available Cash to
such Partner or Assignee pursuant to Section 5.3 hereof; and (iii) to the extent
any such Partner or Assignee (but not a former Partner or Assignee) is not then
entitled to such distribution under this Agreement, the General Partner shall be
authorized, without the approval of any Partner or Assignee, to amend this
Agreement insofar as is necessary to maintain the uniformity of intrinsic tax
characteristics as to all Units and to make subsequent adjustments to
distributions in a manner which, in
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the reasonable judgment of the General Partner, will make as little
alteration in the priority and amount of distributions otherwise applicable
under this Agreement, and will not otherwise alter the distributions to which
Partners and Assignees are entitled under this Agreement. If the Partnership is
permitted (but not required) by applicable law to pay any such tax on behalf of
any Partner or Assignee or former Partner or Assignee, the General Partner
shall be authorized (but not required) to pay such tax from the funds of the
Partnership and to take any action consistent with this Section 9.7. The
General Partner shall be authorized (but not required) to take all necessary or
appropriate actions to collect all or any portion of a deficiency in the
payment of any such tax which relates to prior periods which is attributable to
Persons who were Limited Partners or Assignees when such deficiencies arose,
from such Persons.
9.8 Opinions of Counsel. Notwithstanding any other provision of this
Agreement, if the Partnership is taxable for federal income tax purposes as a
corporation or an association taxable as a corporation at any time and, pursuant
to the provisions hereof, an Opinion of Counsel would otherwise be required at
that time to the effect that an action will not cause the Partnership to become
so taxable as a corporation or to be treated as an association taxable as a
corporation, such requirement for an Opinion of Counsel shall be deemed
automatically waived.
ARTICLE X
CERTIFICATES AND DEPOSITARY RECEIPTS
10.1 Certificates and Depositary Receipts. (a) Upon the issuance of Units
by the Partnership to the Initial Limited Partners or any other Person, the
Partnership shall issue one or more Certificates in the name of the Initial
Limited Partners or such Person evidencing the number of such Units being so
issued. Certificates shall be executed on behalf of the Partnership by the
General Partner.
(b) The General Partner (i) may cause the deposit of some or all of the
Certificates in the Deposit Account pursuant to the Deposit Agreement; (ii) with
respect to those Certificates deposited in the Deposit Account, shall receive
from the Depositary Receipts registered in the name of the Person(s) to whom
such Units have been issued, evidencing the same number of Depositary Units, as
the case may be, as the number of Units represented by the Certificates so
deposited; and (iii) shall cause the distribution of such Depositary Receipts to
such Person(s).
10.2 Registration of Transfer and Exchange. (a) The General Partner shall
cause to be kept on behalf of the Partnership a register (the "Unit Register")
in which, subject to such reasonable regulations as it may prescribe and subject
to the provisions of Section 10.2(b) hereof, the General Partner will provide
for the registration of Units and the transfer of such Units. The Depositary is
hereby appointed Transfer Agent and registrar for the purpose of registering
Units and transfers of such Units as herein provided. The Partnership shall not
recognize transfers of Certificates representing Units which have been deposited
pursuant to Section 10.1(a) hereof and not withdrawn or interests therein except
by transfers of Depositary Units in the manner described in this Section 10.2
and in the Deposit Agreement. Upon surrender for registration of transfer of any
Depositary Units evidenced by a Depositary Receipt and, subject to the
provisions of Section 10.2(b) hereof, the General Partner on behalf of the
Partnership will execute, and the Transfer Agent will countersign and deliver,
in the name of the holder or the designated transferee or transferees, as
required pursuant to the holder's instructions, one or more new Depositary
Receipts evidencing the same aggregate number of Depositary Units as was
evidenced by the Depositary Receipt so surrendered.
(b) The Partnership shall not recognize any transfer of Depositary Units
until the Depositary Receipts evidencing such Depositary Units are surrendered
for registration of transfer and such Depositary Receipts are accompanied by a
Transfer Application duly executed by the transferee (or the transferee's
attorney-in-fact duly authorized in writing). No charge shall be imposed by the
Partnership for such transfer, provided that, as a condition to the issuance of
any new Depositary Receipt under this Section 10.2, the General Partner may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed with respect thereto.
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10.3 Mutilted, Destroyed, Lost or Stolen Depositary Receipts. (a) If
any mutiliated Depositary is surrendered to the Transfer Agent, the Depositary
shall execute, and the Transfer Agent shall countersign and deliver in exchange
therefor, a new Depositary Receipt evidencing the same number of Depositary
Units, as the case may be, as the Depositary Receipt so surrendred.
(b) If there shall be deliverd to the General Partner and the Transfer
Agent (i) evidence (including, without limitation, proof by affidavit if
requested by the General Partner in form and substance satisfactory to the
General Partner) to their satisfaction of the destruction, loss or theft of any
Depositary Receipt and (ii) such security or indemnity as may be required by
them to indemnify and hold each of them and any of their agents harmless, then,
in the absence of notice to the General Partner or the Transfer Agent that such
Depositary Receipt has been acquired by a bona fide purchaser, the General
Partner on behalf of the Partnership shall execute and, upon its request, the
Transfer Agent shall countersign and deliver, in exchange for and in lieu of
any such destroyed, lost or stolen Depositary Receipt, a new Depositary Receipt
evidencing the same number of Depositary Units, as the Depositary Receipt so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Depositary Receipt under this
Section 10.3, the General Partner may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Transfer
Agent) connected therewith.
10.4 Registered Owner. In accordance with Section 10.2(b) hereof, the
Partnership shall be entitled to recognize the Record Holder as the Limited
Partner or Assignee with respect to any Units and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such Units on
the part of any other Person, whether or not the Partnership shall have actual
or other notice thereof, except as otherwise provided by law or any applicable
rule, regulation, guideline or requirement of any National Securities Exchange
on which the Units are listed for trading. Without limiting the foregoing, when
a Person (such as a broker, dealer, bank, trust company or clearing corporation
or an agent of any of the foregoing) is acting as nominee, agent or in some
other representative capacity for another Person in acquiring and/or holding
Units, as between the Partnership on the one hand and such other Persons on the
other hand, such representative Person (a) shall be the Limited Partner or
Assignee (as the case may be) of record and beneficially, (b) must execute and
deliver a Transfer Application and (c) shall be bound by this Agreement and
shall have the rights and obligations of a Limited Partner or Assignee (as the
case may be) hereunder and as provided for herein.
10.5 Withdrawal of Units from and Redeposit of Units in Depositary
Account. Any Units may be withdrawn from the Depositary Account by surrender of
the Depositary Receipts evidencing the corresponding Depositary Units duly
executed by the Record Holder thereof (or his attorney-in-fact duly authorized
in writing), provided that such Record Holder is then reflected on the books and
records of the Partnership as the Limited Partner in respect of the Units for
which such withdrawal is requested. Upon any such withdrawal, the General
Partner shall cause the Partnership to issue a Certificate evidencing such
Units. Any such withdrawn Units, or Units which have not previously been so
deposited, may be redeposited or deposited (as the case may be) in the Deposit
Account by the surrender of the Certificate evidencing such withdrawn Units or
non-deposited Units to the Depositary and payment to the Depositary of such fee
and upon such terms as may be required therefor pursuant to the Deposit
Agreement. Upon any such redeposit or deposit, the Depositary shall issue a
Depositary Receipt evidencing the same number of Units as was evidenced by the
Certificate so redeposited or deposited.
10.6 Amendment of Deposit Agreement. Subject to its fiduciary
obligations, the General Partner may amend or modify any provision of the
Deposit Agreement in any respect it reasonably determines to be necessary or
appropriate, provided, however, that the General Partner shall not amend or
modify the Deposit Agreement if the effect of any such amendment or modification
would be to impair the right of Limited Partners to withdraw their Units from
deposit thereunder.
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ARTICLE XI
TRANSFER OF INTERESTS
11.1 Transfer. (a) The term "transfer," when used in this Article XI with
respect to a Partnership Interest, shall be deemed to refer to an appropriate
transaction by which the General Partner assigns its Partnership Interest as
General Partner to another Person or by which the holder of a Unit assigns such
Unit to another Person who is or becomes an Assignee 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 XI.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article XI shall be null and void.
11.2 Transfer of General Partner's Partnership Interest. (a) The General
Partner may transfer all, but not less than all, of its Partnership Interest as
the General Partner to a single transferee if, but only if, (i) the holders of
at least 66 2/3% of the outstanding Units (excluding for purposes of such
determination any Units owned by the General Partner and its Affiliates)
approves of such transfer and of the admission of such transferee as General
Partner, (ii) the transferee agrees to assume and be bound by the provisions of
this Agreement and (iii) the Partnership receives an Opinion of Counsel that
such transfer would not result in the loss of limited liability of any Limited
Partner or the taxation of the Partnership as a corporation or as an association
taxable as a corporation for federal income tax purposes.
(b) Neither Section 11.2(a) hereof nor any other provision of this
Agreement shall be construed to prevent (and all Partners do hereby consent to)
the transfer by the General Partner of all of its Partnership Interest (i) to an
Affiliate of Burlington or (ii) upon its merger, consolidation or other
combination into any other entity or the transfer by it of all or
substantially all of its assets to another entity (provided that such
entity assumes all of the rights and duties of the General Partner), to the
transferee or successor entity; provided that, such entity furnishes
to the Partnership an Opinion of Counsel that such merger, consolidation,
combination, transfer or assumption will not result in a loss of limited
liability of any Limited Partner or result in the Partnership being treated as
an association taxable as a corporation for federal income tax purposes. In the
case of a transfer pursuant to this Section 11.2(b), the transferee or successor
(as the case may be) shall be admitted to the Partnership as the General Partner
immediately prior to the transfer of the Partnership Interest, and the business
of the Partnership shall continue without dissolution.
11.3 Transfer of Units. (a) Any Units which have been deposited in the
Deposit Account may be transferred, but only in the manner described in Section
10.2 hereof. Units with respect to which no such deposit has been made or which
have been withdrawn from the Deposit Account and not redeposited are not
transferable except upon death or by operation of law, by transfer to the
General Partner for the account of the Partnership or otherwise in accordance
with this Agreement. The transfer of any Units and the admission of any new
Partner shall not constitute an amendment to this Agreement.
(b) Until admitted as a Substituted Limited Partner pursuant to Article
XII, the Record Holder of a Depositary Unit shall constitute an Assignee in
respect of such Unit.
(c) Each distribution in respect of Units shall be paid by the Partnership,
directly or through the Transfer Agent or through any other Person or agent,
only to the Record Holders thereof as of the Record Date set for the
distribution. Such payment shall constitute full payment and satisfaction of the
Partnership's liability in respect of such payment, regardless of any claim of
any Person who may have an interest in such payment by reason of an assignment
or otherwise.
11.4 Restrictions on Transfers. Notwithstanding the other provisions of
this Article XI, no transfer of any Unit or interest therein of any Limited
Partner in the Partnership shall be made if such transfer (i) would violate the
then applicable federal or state securities laws or rules and regulations of the
Securities and Exchange Commission, any state securities commission or any other
governmental authorities with jurisdiction over such transfer, (ii) would result
in the taxation of the Partnership as a corporation or as an association
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taxable as a corporation for federal income tax purposes or (iii) would affect
the Partnership's existence or qualification as a limited partnership under the
Delaware Act.
11.5 Citizenship Certification; Non-citizen Assignees. (a) In the event
that, because of the nationality (or any other status) of a Limited Partner or
Assignee, the Partnership is or becomes subject to federal, state or local laws
or regulations the effect of which would, in the reasonable determination of the
General Partner, cause cancellation or forfeiture of any property in which the
Partnership has an interest, the General Partner may request any such Limited
Partner or Assignee to furnish to the General Partner or, with respect to
Depositary Units, to the Depositary within 30 days after receipt of such request
an executed Citizenship Certification or such other information concerning his
nationality, citizenship or other status (or, if the Limited Partner or Assignee
is a nominee holding for the account of another Person, the nationality,
citizenship or other status of such Person) as the General Partner may request.
If a Limited Partner or Assignee fails to furnish such Citizenship Certification
or other information as may be requested, or if upon receipt of such
Citizenship Certification or other information the General Partner determines,
with the advice of counsel, that a Limited Partner or an Assignee is not an
Eligible Citizen, the Units owned by such Limited Partner or Assignee shall be
subject to redemption in accordance with the provisions of Section 11.6 hereof.
In addition to becoming subject to redemption, the General Partner may require
that the status of any such Limited Partner or Assignee be changed to that of
a Non-citizen Assignee, and, thereupon, the General Partner shall be
substituted for such Non-citizen Assignee as the Limited Partner in respect of
his Units.
(b) The General Partner shall, in exercising voting rights in respect of
Units held by it on behalf of Non-citizen Assignees, distribute the votes in the
same ratios as the votes of Limited Partners in respect of Units other than
those of Non-citizen Assignees are cast, either for, against or abstaining as to
the matter.
(c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have
no right to receive a distribution in kind pursuant to Section 14.4 hereof but
shall be entitled to the cash equivalent thereof, and the General Partner shall
provide cash in exchange for an assignment of the Non-citizen Assignee's share
of the distribution in kind. Such payment and assignment shall be treated for
Partnership purposes as a purchase by the General Partner from the Non-citizen
Assignee of his Partnership Interest (representing his right to receive his
share of such distribution in kind).
(d) At any time after he can and does certify that he has become an
Eligible Citizen, a Non-citizen Assignee may, upon application to the General
Partner, request admission as a Substituted Limited Partner with respect to any
Partnership Interest of such Non-citizen Assignee not redeemed pursuant to
Section 11.6 hereof, and upon his admission pursuant to Section 12.2 hereof the
General Partner shall cease to be deemed to be the Limited Partner in respect of
the Non-citizen Assignee's Units.
11.6 Redemption of Interests. (a) If at any time a Limited Partner or
Assignee fails to furnish a Citizenship Certification or other information
requested within the 30-day period specified in Section 11.5(a) hereof, or if
upon receipt of such Citizenship Certification or other information the General
Partner determines, with the advice of counsel, that a Limited Partner or
Assignee is not an Eligible Citizen, the Partnership may, unless the Limited
Partner or Assignee establishes to the satisfaction of the General Partner that
such Limited Partner or Assignee is an Eligible Citizen or has transferred his
Units to a person who furnishes a Citizenship Certification to the General
Partner prior to the date fixed for redemption as provided below, redeem the
Partnership Interest of such Limited Partner or Assignee as follows:
(i) The General Partner shall, not later than the 30th day before the
date fixed for redemption, give notice of redemption to the Limited Partner
or Assignee, at his last address designated on the records of the
Partnership or the Depositary, by registered or certified mail, postage
prepaid. The notice shall be deemed to have been given when so mailed. The
notice shall specify the Redeemable Units, the date fixed for redemption,
the place of payment, that payment of the redemption price will be made
upon surrender of the Depositary Receipt or the Certificate evidencing the
Redeemable Units and that on and after the date fixed for redemption no
further allocations or distributions to which the Limited Partner or
Assignee would otherwise be entitled in respect of the Redeemable Units
will accrue or be made.
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(ii) The aggregate redemption price for Redeemable Units shall be an
amount equal to the Current Market Price (as defined in Section 17.1) (the
date of determination of which shall be the date fixed for redemption) of
Units of the class to be so redeemed multiplied by the number of Units of
each such class included among the Redeemable Units. The redemption price
shall be paid, in the sole discretion of the General Partner, in cash or by
delivery of a promissory note of the Partnership in the principal amount of
the redemption price, bearing interest at the rate of 10% annually and
payable in three equal annual installments of principal, together with
accrued interest, commencing one year after the redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner or
Assignee, at the place specified in the notice of redemption, of the
Depositary Receipt or the Certificate evidencing the Redeemable Units, duly
endorsed in blank or accompanied by an assignment duly executed in blank,
the Limited Partner or Assignee or his duly authorized representative shall
be entitled to receive the payment therefor.
(iv) After the redemption date, Redeemable Units shall no longer
constitute issued and outstanding Units.
(b) The provisions of this Section 11.6 shall be applicable to Units held
by a Limited Partner or Assignee as nominee of a Person determined to be other
than an Eligible Citizen.
(c) Nothing in this Section 11.6 shall prevent the recipient of a notice of
redemption from transferring his Units before the redemption date if such
transfer is otherwise permitted under this Agreement. Upon receipt of notice of
such a transfer, the General Partner shall withdraw the notice of redemption;
provided, the transferee of such Units or Depositary Units certifies in the
Transfer Application that he is an Eligible Citizen. If the transferee fails to
make such certification, such redemption shall be effected from the transferee
on the original redemption date.
(d) If the Partnership or the General Partner determines that because of
the nationality (or other status) of the General Partner, whether or not in its
capacity as such, the Partnership is or becomes subject to federal, state or
local regulations the effect of which would, in the reasonable determination of
the General Partner, cause cancellation or forfeiture of any property in which
the Partnership has an interest, the Partnership may, unless the General Partner
has furnished a Citizenship Certification or transferred his Partnership
Interest or Units to a Person who furnishes a Citizenship Certification prior to
the date fixed for redemption, redeem the Partnership Interest or Interests of
the General Partner in the Partnership as provided in Section 11.6(a) hereof.
The redemption price shall be paid in cash.
11.7 Transfer of Deferred Participation Interests. (a) The holders of
Deferred Participation Interests may transfer their Deferred Participation
Interests to any Person or Persons and such Person or Persons shall have the
right to deposit with the Depositary such Deferred Participation Interests if,
but only if, either (i) such Deferred Participation Interests so transferred are
identified and registered as a trading class separate and distinguishable from
the Units then outstanding or (ii) such Deferred Participation Interests so
proposed to be transferred have been converted to Units pursuant to Section
5.7(b) of this Agreement; provided, however, the foregoing restriction shall not
apply to a transfer of all, but not less than all, of the Deferred Participation
Interests held by the transferor to an Affiliate of such transferor; provided
further, that no holder of a Deferred Participation Interest shall have the
right to transfer the Deferred Participation Interest during the Support Period
to other than an Affiliate of such holder; provided, further, that,
notwithstanding anything to the contrary set forth above, the holder of the
Deferred Participation Interests may transfer the Deferred Participation
Interests to DPI Intermediate Holdings, L.P., a Delaware limited partnership,
and PC Advisory II, L.P., a Delaware limited partnership.
(b) Notwithstanding Section 11.7(a) above, no such restrictions shall apply
with respect to the transfer of Deferred Participation Interests after the
Conversion Date with respect to such Interests.
(c) The holders of Deferred Participation Interests will receive
certificates evidencing such interests. Subject to Section 11.7(a), such
certificates may be exchanged by the holders for Certificates of limited partner
interests and then deposited and transferred in accordance with Articles X and
XI hereof.
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11.8 Transfer of Management Units. The holders of Management Units may
transfer their Management Units to any Person or Persons and such Person or
Persons shall have the right to deposit with the Depositary such Management
Units if, but only if, the General Partner determines, based on advice of
counsel, that such Management Units so proposed to be transferred have, as a
substantive matter, like intrinsic economic and federal income tax
characteristics, in all material respects, to the intrinsic economic and federal
income tax characteristics of the Units then outstanding.
ARTICLE XII
ADMISSION OF PARTNERS
12.1 Admission of Initial Limited Partners and Underwriters. Upon the
issuance of Units by the Partnership to the Initial Limited Partners (as
described in Section 4.3 hereof), the General Partner shall admit to the
Partnership the Initial Limited Partners as Limited Partners in respect of the
Units. Each such party shall execute a Transfer Application and thereby agree to
be bound by the terms hereof as a Limited Partner.
12.2 Admission of Substituted Limited Partners. By transfer of a
Depositary Unit in accordance with Article XI hereof, the transferor shall be
deemed to have given the transferee the right to seek admission as a Substituted
Limited Partner subject to the conditions of, and in the manner permitted under,
this Agreement.
A transferor of a Depositary Receipt shall, however, only have the authority to
convey to a purchaser or other transferee who does not execute and deliver a
Transfer Application (i) the right to negotiate such Depositary Receipt to a
purchaser or other transferee and (ii) the right to transfer the right to
request admission as a Substituted Limited Partner to such purchaser or other
transferee in respect of the transferred Depositary Units. Each transferee of a
Depositary Unit (including any nominee holder or an agent acquiring such
Depositary Unit for the account of another Person) who executes a Transfer
Application shall be an Assignee and shall be deemed to have applied to become a
Substituted Limited Partner with respect to the Depositary Units so transferred
to such Person by virtue of executing and delivering such Transfer Application.
Such Assignee shall become a Substituted Limited Partner at such time as the
General Partner consents thereto, which consent may be given or withheld in the
General Partner's sole discretion, and when any such admission is shown on the
books and records of the Partnership. If such consent is withheld, such
transferee shall be an Assignee. An Assignee shall have an interest in the
Partnership equivalent to that of a Limited Partner with respect to allocations
and distributions, including liquidating distributions, of the Partnership. With
respect to voting rights attributable to Units that are held by Assignees, the
General Partner shall be deemed to be the Limited Partner with respect thereto
and shall, in exercising the voting rights in respect of such Units on any
matter, vote such Units at the written direction of the Assignee who is the
Record Holder of such Units. If no such written direction is received, such
Units will not be voted. An Assignee shall have no other rights of a Limited
Partner.
12.3 Admission of Successor General Partner. A successor General Partner
approved pursuant to Section 13.1 hereof or the transferee of or successor to
all of the General Partner's Partnership Interest pursuant to Section 11.2
hereof who is proposed to be admitted as a successor General Partner shall be
admitted to the Partnership as the General Partner, effective immediately prior
to the withdrawal or removal of the General Partner pursuant to Section 13.1
hereof or the transfer pursuant to Section 11.2; provided, however, that no such
successor shall be admitted to the Partnership until the terms of Section 11.2
hereof have been complied with. Any such successor shall carry on the business
of the Partnership without dissolution. In each case, the admission shall be
subject to the successor General Partner executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the
admission.
12.4 Admission of Additional Limited Partners. (a) A Person (other than an
Initial Limited Partner, an Underwriter or a Substituted Limited Partner) who
makes a Capital Contribution to the Partnership in accordance with this
Agreement (other than by the purchase of SPUs) shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
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limitation, the power of attorney granted in Section 1.4 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.
(b) Notwithstanding anything to the contrary in this Section 12.4, 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 discretion. 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, following the consent of
the General Partner to such admission.
12.5 Amendment of Agreement and Certificate of Limited Partnership. For
the admission to the Partnership of any Partner, the General Partner shall take
all steps necessary and appropriate under the Delaware Act to amend the records
of the Partnership and, if necessary, to prepare as soon as practical an
amendment of this Agreement and, if required by law, shall prepare and file an
amendment to the Certificate of Limited Partnership and may for this purpose
exercise the power of attorney granted pursuant to Section 1.4 hereof.
ARTICLE XIII
WITHDRAWAL OR REMOVAL OF PARTNERS
13.1 Withdrawal of the General Partner. (a) The General Partner shall be
deemed to have withdrawn from the Partnership upon the occurrence of any one of
the following events (each such event herein referred to as an "Event of
Withdrawal"):
(i) the General Partner voluntarily withdraws from the Partnership by
giving written notice to the other Partners;
(ii) the General Partner transfers all of its rights as General
Partner pursuant to Section 11.2 hereof;
(iii) the General Partner is removed pursuant to Section 13.2 hereof;
(iv) the General Partner
(A) makes a general assignment for the benefit of creditors;
(B) files a voluntary bankruptcy petition;
(C) files a petition or answer seeking for itself a reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any law;
(D) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against the General
Partner in a proceeding of the type described in paragraphs (A)-(C) of
this subsection; or
(E) seeks, consents to or acquiesces in the appointment of a
trustee, receiver or liquidator of the General Partner or of all or any
substantial part of its properties;
(v) a final and non-appealable judgment is entered by a court with
appropriate jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by a
court with appropriate jurisdiction against the General Partner, in each
case under any federal or state bankruptcy or insolvency laws as now or
hereafter in effect; or
(vi) a certificate of dissolution or its equivalent is filed for the
General Partner, or 90 days expire after the date of notice to the General
Partner of revocation of its charter without a reinstatement of its
charter, under the laws of its state of incorporation.
If an Event of Withdrawal specified in paragraphs (iv), (v) or (vi) occurs, the
withdrawing General Partner shall give written notice to the Limited Partners
within 30 days after such occurrence. The Partners hereby
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agree that only the Events of Withdrawal described in this Section 13.1 shall
result in withdrawal of the General Partner from the Partnership.
(b) Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal will not constitute a breach of this
Agreement under the following circumstances: (i) at any time during the period
ending on December 31, 1999, the General Partner voluntarily withdraws by giving
at least 90 days' advance written notice of its intention to withdraw to the
Limited Partners, provided that, prior to the effective date of such withdrawal,
the Limited Partners approve such withdrawal by the vote of at least 66 2/3% of
the outstanding Units (excluding for purposes of such determination any Units
owned by the General Partner and its Affiliates); (ii) at any time after
December 31, 1999, the General Partner voluntarily withdraws by giving at least
90 days' advance written notice to the Limited Partners, such withdrawal to take
effect on the date specified in such notice; (iii) at any time that the General
Partner ceases to be a General Partner pursuant to Section 13.1(a)(ii) hereof or
is removed pursuant to Section 13.1(a)(iii) hereof; or (iv) notwithstanding
clause (i) above, at any time that the General Partner voluntarily withdraws by
giving at least 90 days' advance written notice of its intention to withdraw to
the Limited Partners, such withdrawal to take effect on the date specified in
the notice, if at the time such notice is given more than 50% of the
outstanding Units held by Persons other than by the General Partner and its
Affiliates are owned beneficially or of record or controlled at any time by one
Person or its Affiliates. If the General Partner gives a notice of withdrawal
pursuant to Section 13.1(a)(i) hereof or if the General Partner is removed
pursuant to Section 13.2 hereof, holders of at least a majority of the
outstanding Units (excluding for purposes of such determination Units owned by
the General Partner and its Affiliates) may, prior to the effective date of such
withdrawal, elect a successor General Partner. If, prior to the effective date
of the General Partner's withdrawal, a successor is not selected by the Limited
Partners as provided herein or the Partnership does not receive an Opinion of
Counsel that such withdrawal (following the selection of the successor General
Partner) would not result in the loss of the limited liability of the holders of
Units or cause the Partnership to be taxable as a corporation or to be treated
as an association taxable as a corporation for federal income tax purposes, the
Partnership shall be dissolved in accordance with Section 14.1 hereof. If a
successor General Partner is elected and the Opinion of Counsel rendered as
provided herein, such successor shall be admitted (subject to Section 12.3
hereof) immediately prior to the effective time of the withdrawal of the
Departing Partner and shall continue the business of the Partnership without
dissolution.
13.2 Removal of the General Partner. The General Partner may be removed
during the Support Period only if such removal is approved by the written
consent or affirmative vote of Limited Partners holding at least 90% of the
outstanding Units (excluding for purposes of such determination any Units owned
by the General Partner and its Affiliates) and, thereafter, only if such removal
is approved by the written consent or affirmative vote of Limited Partners
owning at least 66 2/3% of the outstanding Units (excluding for purposes of such
determination any Units owned by the General Partner and its Affiliates). Any
such action by the Limited Partners for removal of the General Partner must also
provide for the election and succession of a new General Partner. Such removal
shall be effective immediately following the admission of the successor General
Partner pursuant to Article XII. The right of the Limited Partners to remove the
General Partner shall not exist or be exercised unless the Partnership has
received an Opinion of Counsel that the removal of the General Partner and the
selection of a successor General Partner will not result in (i) the loss of
limited liability of the Partnership or any Limited Partner in the Partnership
or (ii) the taxation of the Partnership as a corporation or the treatment of the
Partnership as an association taxable as a corporation for federal income tax
purposes.
13.3 Interest of Departing Partner and Successor General Partner. (a) In
the event of (i) withdrawal of the General Partner under circumstances
where such withdrawal does not violate this Agreement or (ii) removal of the
General Partner by the Limited Partners under circumstances where "cause" does
not exist, the Departing Partner shall, at its option exercisable prior to the
effective date of the departure of such Departing Partner, promptly receive
from its successor in exchange for its Partnership Interest as General Partner
an amount in cash equal to the fair market value of the Departing Partner's
Partnership Interest as General Partner, such amount to be determined and
payable as of the effective date of its departure. If the General Partner is
removed by the Limited Partners under circumstances where "cause"
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exists or if the General Partner withdraws under circumstances where
such withdrawal violates this Agreement, its successor shall have the option
described in the immediately preceding sentence, and the Departing Partner
shall not have such option. In either event, the Departing Partner shall be
entitled to receive all reimbursements due such Departing Partner pursuant to
Section 6.4, including any employee-related liabilities, including severance
liabilities, incurred in connection with the termination of any employees
employed by the Departing Partner for the benefit of the Partnership. Subject
to Section 13.3(b) hereof, the Departing Partner shall, as of the effective
date of its departure, cease to share in any allocations or distributions with
respect to its Partnership Interest as the General Partner and Partnership
income, gain, loss, deduction and credit will be prorated and allocated as set
forth in Section 5.1(d) hereof. For purposes of this Section 13.3, "cause"
means that a court of competent jurisdiction has entered a final non-appealable
judgment finding the General Partner liable for actual fraud, gross negligence
or wilful or wanton misconduct in its capacity as General Partner of the
Partnership.
For purposes of this Section 13.3(a), the fair market value of the
Departing Partner's Partnership Interest as the General Partner herein
shall be determined by agreement between the Departing Partner and its
successor or, failing agreement within 30 days after the effective date of such
Departing Partner's departure, by an independent investment banking firm or
other independent expert selected by the Departing Partner and its successor,
which, in turn, may rely on other experts and the determination of which shall
be conclusive as to such matter. If such parties cannot agree upon one
independent investment banking firm or other independent expert within 45 days
after the effective date of such departure, then such firm shall be designated
by the independent investment banking firm or other independent expert selected
by each of the Departing Partner and its successor. In making its
determination, such independent investment banking firm or other independent
expert shall consider the then current trading price of Units on any National
Securities Exchange on which Units are then listed, the value of the
Partnership's assets, the rights and obligations of the General Partner and
other factors it may deem relevant.
(b) If the Partnership Interest is not acquired in the manner set forth in
Section 13.3(a) hereof, the Departing Partner shall become a Limited Partner and
its Partnership Interest shall be converted into Units pursuant to a valuation
made by an investment banking firm or other independent expert selected pursuant
to Section 13.3(a) hereof, without reduction in such Partnership Interest (but
subject to proportionate dilution by reason of the admission of its successor).
Any successor General Partner shall indemnify the Departing Partner as to all
debts and liabilities of the Partnership arising on or after the date on which
the Departing Partner becomes a Limited Partner. For purposes of this Agreement,
the General Partner's conversion of its Partnership Interest to Units will be
characterized as if the General Partner contributed its Partnership Interest to
the Partnership in exchange for the newly-issued Units.
(c) If the option described in Section 13.3(a) hereof is not exercised by
the party entitled to do so, the successor General Partner shall, at the
effective date of its admission to the Partnership, contribute to the capital of
the Partnership cash in an amount such that its Capital Account, after giving
effect to such contribution and any adjustments made to the Capital Accounts of
all Partners pursuant to Section 4.6(d)(i), shall be equal to that percentage of
the Capital Accounts of all Partners that is equal to its Percentage Interest as
the General Partner. In such event, each successor General Partner shall,
subject to the following sentence, be entitled to such Percentage Interest of
all Partnership allocations and distributions and any other allocations and
distributions to which the Departing Partner was entitled. In addition, such
successor General Partner shall cause this Agreement to be amended to reflect
that, from and after the date of such successor General Partner's admission, the
successor General Partner's interest in all Partnership distributions and
allocations shall be 2%, and that of the Unitholders shall be 98%.
13.4 Redemption of SPUs and Deferred Participation Interests. In the event
that Plum Creek Management Company (or any Affiliate of Burlington which is a
successor to Plum Creek Management Company as General Partner of the
Partnership) withdraws as General Partner under circumstances where such
withdrawal does not violate this Agreement or is removed by the Limited Partners
under circumstances where "cause" does not exist, (i) in the case of SPUs,
Burlington or its Affiliate shall have the right to require the Partnership
within 30 days of the effective date of such withdrawal or removal to redeem any
SPUs which are then outstanding at a price equal to the Unrecovered Capital
attributable thereto or (ii) in the case of
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Deferred Participation Interests, Plum Creek Timber Company, Inc. (or its
successor) or its Affiliate, shall have the right to require the Partnership
within 30 days of the effective date of such withdrawal or removal to redeem
any Deferred Participation Interests which are then outstanding, and not yet
converted into Units pursuant to Section 5.7(b), at a price equal to the
Unrecovered Capital attributable thereto.
13.5 Withdrawal of Limited Partners. Except as provided in Section 13.4,
no Limited Partner shall have any right to withdraw from the Partnership;
provided, however, that when a transferee of a Limited Partner's Units becomes a
Record Holder, such transferring Limited Partner shall cease to be a Limited
Partner with respect to the Units so transferred.
ARTICLE XIV
DISSOLUTION AND LIQUIDATION
14.1 Dissolution. The Partnership shall not be dissolved by the admission
of Substituted Limited Partners or Additional Limited Partners or by the
admission of a successor General Partner in accordance with the terms of this
Agreement. Upon the removal or withdrawal of the General Partner any successor
General Partner shall continue the business of the Partnership. The Partnership
shall dissolve, and its affairs shall be wound up, upon:
(a) the expiration of its term as provided in Section 1.5 hereof;
(b) an Event of Withdrawal of the General Partner as provided in
Section 13.1(a) hereof, unless a successor is named as provided in Section
13.1(b) hereof;
(c) an election to dissolve the Partnership by the General Partner
that is approved by the affirmative vote of the holders of at least 66 2/3%
of outstanding Units, excluding for purposes of such determination Units
owned by the General Partner and its Affiliates, (and all Limited Partners
hereby expressly consent that such approval may be effected upon written
consent of the holders of at least 66 2/3% of outstanding Units);
(d) entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act; or
(e) the sale of all or substantially all of the assets and properties
of the Partnership.
14.2 Continuation of the Business of the Partnership after
Dissolution. Upon (i) dissolution of the Partnership caused by the withdrawal or
removal of the General Partner and following a failure of all Partners, within
90 days after the withdrawal or removal of the General Partner, to agree to
continue the business of the Partnership and appoint a successor General
Partner, then within an additional 90 days or (ii) dissolution of the
Partnership upon an event constituting an Event of Withdrawal as defined in
Section 13.1(a)(iv) hereof, then within 180 days thereafter, at least 66 2/3% of
the outstanding Units may elect to reconstitute the Partnership and continue its
business on the same terms and conditions set forth in this Agreement by forming
a new limited partnership on terms identical to those set forth in this
Agreement and having as a general partner a Person approved by the holders of at
least 66 2/3% of the outstanding Units. Upon any such election by the holders of
at least 66 2/3% of the outstanding Units, all Partners shall be bound thereby
and shall be deemed to have approved thereof. Unless such an election is made
within the applicable time period as set forth above, the Partnership shall
conduct only activities necessary to wind up its affairs. If such an election is
so made, then:
(a) the reconstituted Partnership shall continue until the end of the
term set forth in Section 1.5 hereof unless earlier dissolved in accordance
with this Article XIV;
(b) if the successor General Partner is not the former General
Partner, then the interest of the former General Partner shall be treated
thenceforth as the interests of a Limited Partner and converted into Units
in the manner provided in Section 13.3(b) hereof; and
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(c) all necessary steps shall be taken to cancel this Agreement and
the Certificate of Limited Partnership and to enter into and, as necessary,
to file a new partnership agreement and certificate of limited partnership,
and the successor general partner may for this purpose exercise the powers
of attorney granted the General Partner pursuant to Section 1.4 hereof;
provided, that the right of the holders of at least 66 2/3% of outstanding
Units to approve a successor general partner and to reconstitute and to
continue the business of the Partnership shall not exist and may not be
exercised unless the Partnership has received an Opinion of Counsel that
(x) the exercise of the right would not result in the loss of limited
liability of any Limited Partner and (y) neither the Partnership nor the
reconstituted limited partnership would become taxable as a corporation or
treated as an association taxable as a corporation for federal income tax
purposes upon the exercise of such right to continue.
14.3 Liquidation. Upon dissolution of the Partnership, unless the
Partnership is continued under an election to reconstitute and continue the
Partnership pursuant to Section 14.2 hereof, the General Partner, or in the
event the General Partner has been dissolved or removed, become bankrupt as set
forth in Section 13.1 or withdrawn from the Partnership, a liquidator or
liquidating committee approved by the holders of at least 66 2/3% of the
outstanding Units, shall be the Liquidator. The Liquidator (if other than the
General Partner) shall be entitled to receive such compensation for its services
as may be approved by the holders of at least 66 2/3% of the outstanding Units.
The Liquidator shall agree not to resign at any time without 15 days' prior
written notice and (if other than the General Partner) may be removed at any
time, with or without cause by notice of removal approved by at least 66 2/3% of
the outstanding Units. Upon dissolution, removal or resignation of the
Liquidator, a successor and substitute Liquidator (who shall have and succeed to
all rights, powers and duties of the original Liquidator) shall within 30 days
thereafter be approved by the holders of at least 66 2/3% of the outstanding
Units. The right to approve a successor or substitute Liquidator in the manner
provided herein shall be deemed to refer also to any such successor or
substitute Liquidator approved in the manner herein provided. Except as
expressly provided in this Article XIV, the Liquidator approved in the manner
provided herein shall have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the
General Partner under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers, other than the limitation on sale set forth in Section 6.3(b) hereof) to
the extent necessary or desirable in the good faith judgment of the Liquidator
to carry out the duties and functions of the Liquidator hereunder for and during
such period of time as shall be reasonably required in the good faith judgment
of the Liquidator to complete the winding-up and liquidation of the Partnership
as provided for herein. The Liquidator shall liquidate the assets of the
Partnership, and apply and distribute the proceeds of such liquidation in the
following order of priority, unless otherwise required by mandatory provisions
of applicable law:
(a) the payment to creditors of the Partnership, including Partners
who are creditors, in order of priority provided by law; and the creation
of a reserve of cash or other assets of the Partnership for contingent
liabilities in an amount, if any, determined by the Liquidator to be
appropriate for such purposes; and
(b) to all Partners and Special Limited Partners in accordance with
the positive balances in their respective Capital Accounts after taking
into account adjustments to such Capital Accounts pursuant to Section
5.1(c) hereof.
14.4 Distributions in Kind. Notwithstanding the provisions of Section 14.3
hereof, which require the liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Partnership the Liquidator determines that an immediate sale
of part or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its absolute discretion,
defer for a reasonable time the liquidation of any assets except those necessary
to satisfy liabilities of the Partnership (including those to Partners as
creditors) and/or distribute to the Partners or to specific classes of Partners,
in lieu of cash, as tenants in common and in accordance with the provisions of
Section 14.3 hereof, undivided interests in such Partnership assets as the
Liquidator deems not suitable for liquidation. Any such distributions in kind
shall be made only if, in the good faith judgment of the Liquidator, such
distributions in kind are in the best interest of the Limited Partners, and
shall be subject to such conditions relating to the disposition and management
of such properties as the Liquidator deems reasonable
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and equitable and to any agreements governing the operation of such properties
at such time. The Liquidator shall determine the fair market value of any
property distributed in kind using such reasonable method of valuation as it
may adopt.
14.5 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership cash and property as provided in
Sections 14.3 and 14.4 hereof, the Partnership shall be terminated and the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be cancelled and such other actions as may be necessary to terminate the
Partnership shall be taken.
14.6 Reasonable Time for Winding-Up. A reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 14.3 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.
14.7 Return of Capital. The General Partner shall not be personally liable
for the return of the Capital Contributions of the Limited Partners, or any
portion thereof, it being expressly understood that any such return shall be
made solely from Partnership assets.
14.8 No Capital Account Restoration. No Partner shall have any obligation
to restore any negative balance in its Capital Account upon liquidation of the
Partnership.
14.9 Waiver of Partition. Each Partner hereby waives any right to
partition of the Partnership property.
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
15.1 Amendment to be Adopted Solely by General Partner. Each Limited
Partner agrees that the General Partner (pursuant to its powers of attorney from
the Limited Partners and Assignees), without the approval of any Limited Partner
or Assignee, may amend any provision of this Agreement, and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent or the
registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;
(c) a change that, in the sole discretion of the General Partner, is
reasonable and necessary or appropriate to qualify or continue the
qualification of the Partnership as a limited partnership or a partnership
in which the limited partners have limited liability under the laws of any
state or that is necessary or advisable in the opinion of the General
Partner to ensure that the Partnership will not be taxable as a corporation
or treated as an association taxable as a corporation for federal income
tax purposes;
(d) a change (i) that, in the sole discretion of the General Partner,
does not adversely affect the Limited Partners in any material respect,
(ii) that is necessary or desirable to satisfy any requirements, conditions
or guidelines contained in any opinion, directive, order, ruling or
regulation of any federal or state agency or judicial authority or
contained in any federal or state statute (including, without limitation,
the Delaware Act) or that is necessary or desirable to facilitate the
trading of the Depositary Units (including, without limitation, the
division of outstanding Units into different classes in order to facilitate
uniformity of tax consequences within such classes of Units) or comply with
any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Depositary Units are or will be listed for trading,
compliance with any of which the General Partner determines in its sole
discretion to be in the best interests of the Partnership and the Limited
Partners or (iii) that is required to effect the intent of the provisions
of this Agreement or is otherwise contemplated by this Agreement;
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(e) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Partnership or the General Partner or its directors or officers
from in any manner being subjected to the provisions of the Investment
Company Act of 1940, as amended, the Investment Advisers Act of 1940, as
amended, or "plan asset" regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, whether or not substantially
similar to plan asset regulations currently applied or proposed by the
United States Department of Labor;
(f) subject to the terms of Section 4.4 hereof, an amendment that the
General Partner determines in its sole discretion to be necessary or
desirable in connection with the authorization for issuance of any class or
series of Units pursuant to Section 4.4 hereof;
(g) any amendment expressly permitted in this Agreement to be made by
the General Partner acting alone;
(h) any amendment made after the Support Period, the effect of which
is to separate into a security separate and apart from the Units, the
rights of holders of the Units to receive any Cumulative Base Deficiency in
respect of the Support Period;
(i) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 16.3 hereof; or
(j) any other amendments similar to the foregoing.
15.2 Amendment Procedures. Except as provided in Sections 15.1 and 15.3
hereof, all amendments to this Agreement shall be made in accordance with the
following requirements: If an amendment is proposed, the General Partner shall
seek the written approval of the requisite Percentage Interests or call a
meeting of the Limited Partners to consider and vote on such proposed amendment.
Each such proposal to the Limited Partners shall contain the text of the
proposed amendment. A proposed amendment shall be effective upon its approval by
at least 66 2/3% of the outstanding Units unless a greater or different
percentage is required under this Agreement. The General Partner shall notify
all Record Holders upon final adoption of any proposed amendment.
15.3 Amendment Requirements. (a) Amendments to this Agreement may be
proposed solely by the General Partner. Notwithstanding the provisions of
Sections 15.1 and 15.2 hereof, no provision of this Agreement which establishes
a Percentage Interest required to take any action shall be amended, altered,
changed, repealed or rescinded in any respect which would have the effect of
reducing such voting requirement unless such amendment is approved by the
written consent or the affirmative vote of Partners whose aggregate Percentage
Interests constitute not less than the voting requirement sought to be reduced.
(b) Notwithstanding the provisions of Sections 15.1 and 15.2 hereof, no
amendment to this Agreement may (i) enlarge the obligations of any Limited
Partner, (ii) modify the compensation payable to the General Partner or any of
its Affiliates by the Partnership, (iii) change Section 14.1(a) or (c) hereof,
(iv) restrict in any way any action by or rights of the General Partner as set
forth in this Agreement or (v) except as set forth in Section 14.1(c) hereof,
give any person the right to dissolve the Partnership.
(c) Except as otherwise provided, the General Partner may amend the
Partnership Agreement without the approval of the Limited Partners, except that
any amendment that would have a material adverse effect on the holders of any
class of outstanding Units must be approved by the holders of not less than
66 2/3% of the outstanding Units of such class.
(d) Notwithstanding any other provision of this Agreement, except for
amendments pursuant to Sections 6.3 or 15.1 hereof, no amendment shall become
effective without the approval of the Record Holders of all Units unless the
Partnership obtains an Opinion of Counsel to the effect that (i) such amendment
will not cause the Partnership to become taxable as a corporation or treated as
an association taxable as a corporation for federal income tax purposes and (ii)
such amendment will not affect the limited liability of any Limited Partner in
the Partnership under applicable law.
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(e) This Section 15.3 shall only be amended with the approval by written
consent or affirmative vote of the holders of not less than 95% of the
outstanding Units.
15.4 Meetings. All acts of Limited Partners to be taken hereunder shall be
taken in the manner provided in this Article XV. Meetings of the Limited
Partners may be called by the General Partner or by Limited Partners owning 20%
or more of the outstanding Units of the class for which a meeting is proposed.
Limited Partners shall call a meeting by delivering to the General Partner one
or more requests in writing stating that the signing Limited Partners wish to
call a meeting and indicating the general or specific purposes for which the
meeting is to be called. Within 60 days after receipt of such a call from
Limited Partners or within such greater time as may be reasonably necessary for
the Partnership to comply with any statutes, rules, regulations, listing
agreements or similar requirements governing the holding of a meeting or the
solicitation of proxies for use at such a meeting, the General Partner
shall send a notice of the meeting to the Limited Partners either directly or
indirectly through the Transfer Agent. A meeting shall be held at a time and
place determined by the General Partner on a date not more than 60 days after
the mailing of notice of the meeting. Limited Partners shall not vote on
matters that would cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as
to jeopardize the Limited Partners' limited liability under the Delaware Act or
the law of any other state in which the Partnership is qualified to do
business.
15.5 Notice of a Meeting. Notice of a meeting called pursuant to Section
15.4 hereof shall be given to the Record Holders in writing by mail or other
means of written communication in accordance with Section 17.1 hereof. The
notice shall be deemed to have been given at the time when deposited in the mail
or sent by other means of written communication.
15.6 Record Date. For purposes of determining the Limited Partners
entitled to notice of or to vote at a meeting of the Limited Partners or to give
approvals without a meeting as provided in Section 15.11 hereof, the General
Partner may set a Record Date, which shall not be less than 10 nor more than 60
days before (a) the date of the meeting (unless such requirement conflicts with
any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed for trading, in which case the rule,
regulation, guideline or requirement of such exchange shall govern) or (b) in
the event that approvals are sought without a meeting, the date on which Limited
Partners are requested in writing by the General Partner to give such approvals.
15.7 Adjournment. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting and a new Record Date need not
be fixed, if the time and place thereof are announced at the meeting at which
the adjournment is taken, unless such adjournment shall be for more than 45
days. At the adjourned meeting, the Partnership may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than 45 days or if a new Record Date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given in accordance with this Article
XV.
15.8 Waiver of Notice; Approval of Meeting; Approval of Minutes. The
transactions of any meeting of Limited Partners, however called and noticed, and
whenever held, shall be as valid as if had at a meeting duly held after regular
call and notice, if a quorum is present either in person or by proxy, and if,
either before or after the meeting, each of the Limited Partners entitled to
vote, present in person or by proxy, signs a written waiver of notice or an
approval of the holding of the meeting or an approval of the minutes thereof.
All waivers and approvals shall be filed with the Partnership records or made a
part of the minutes of the meeting. Attendance of a Limited Partner at a meeting
shall constitute a waiver of notice of the meeting, except when the Limited
Partner does not approve, at the beginning of the meeting, of the transaction of
any business because the meeting is not lawfully called or convened; and except
that attendance at a meeting is not a waiver of any right to disapprove the
consideration of matters required to be included in the notice of the meeting,
but not so included, if the disapproval is expressly made at the meeting.
15.9 Quorum. 66 2/3% of the outstanding Units of the class for which a
meeting has been called represented in person or by proxy shall constitute a
quorum at a meeting of Limited Partners of such class unless any such action by
the Limited Partners requires approval by holders of a majority in interest of
the Units, in which case, the quorum shall be a majority. At any meeting of the
Limited Partners duly called and
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held in accordance with this Agreement at which a quorum is present, the act of
Limited Partners whose Percentage Interests represent at least 66 2/3% of the
Percentage Interests entitled to vote and be present in person or by proxy at
such meeting shall be deemed to constitute the act of all Limited Partners,
unless a different percentage is required with respect to such action under the
provisions of this Agreement, in which case the act of the Limited Partners
owning such different percentage shall be required. The Limited Partners
present at a duly called or held meeting at which a quorum is present may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough Limited Partners to leave less than a quorum, if any action taken
(other than adjournment) is approved by the required Percentage Interests of
the Limited Partners specified in this Agreement. In the absence of a quorum,
any meeting of Limited Partners may be adjourned from time to time by the
affirmative vote of a majority of the Percentage Interests represented either
in person or by proxy, but no other business may be transacted, except as
provided in Section 15.7 hereof.
15.10 Conduct of Meeting. The General Partner shall have full power and
authority concerning the manner of conducting any meeting of the Limited
Partners or solicitation of approvals in writing, including, without limitation,
the determination of Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of Section 15.4 hereof, the conduct of voting,
the validity and effect of any proxies and the determination of any
controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as
chairman of any meeting and shall further designate a Person to take the minutes
of any meeting, in either case including, without limitation, a Partner or a
director or officer of the General Partner. All minutes shall be kept with the
records of the Partnership maintained by the General Partner. The General
Partner may make such other regulations consistent with applicable law and this
Agreement as it may deem advisable concerning the conduct of any meeting of the
Limited Partners or solicitation of approvals in writing, including regulations
in regard to the appointment of proxies, the appointment and duties of
inspectors of votes and approvals, the submission and examination of proxies and
other evidence of the right to vote, and the revocation of approvals in writing.
15.11 Action Without a Meeting. Any action that may be taken at a meeting
of the Limited Partners may be taken without a meeting if an approval in writing
setting forth the action so taken is signed by Limited Partners owning not less
than the minimum Percentage Interests that would be necessary to authorize or
take such action at a meeting at which all the Limited Partners were present and
voted. Prompt notice of the taking of action without a meeting shall be given to
the Limited Partners who have not approved in writing. The General Partner may
specify that any written ballot submitted to Limited Partners for the purpose of
taking any action without a meeting shall be returned to the Partnership within
the time period, which shall be not less than 20 days, specified by the General
Partner. If a ballot returned to the Partnership does not vote all of the Units
held by the Limited Partner, the Partnership shall be deemed to have failed to
receive a ballot for the Units which were not voted. If approval of the taking
of any action by the Limited Partners is solicited by any Person other than by
or on behalf of the General Partner, the written approvals shall have no force
and effect unless and until (a) they are deposited with the Partnership in care
of the General Partner, (b) approvals sufficient to take the action proposed are
dated as of a date not more than 90 days prior to the date sufficient approvals
are deposited with the Partnership and (c) an Opinion of Counsel is delivered to
the General Partner to the effect that the exercise of such right and the action
proposed to be taken with respect to any particular matter (i) will not cause
the Limited Partners to be deemed to be taking part in the management and
control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners' limited liability, (ii) will not jeopardize the status of the
Partnership as a partnership under applicable tax laws and regulations and (iii)
is otherwise permissible under the state statutes then governing the rights,
duties and liabilities of the Partnership and the Partners.
15.12 Voting and Other Rights. (a) Only those Record Holders of Units on
the Record Date set pursuant to Section 15.6 hereof shall be entitled to notice
of, and to vote at, a meeting of Limited Partners or to act with respect to
matters as to which approvals are solicited.
(b) With respect to Units that are held for a Person's account by another
Person (such as a broker, dealer, bank, trust company or clearing corporation,
or an agent of any of the foregoing), in whose name such Units are registered,
such broker, dealer or other agent shall, in exercising the voting rights in
respect of such
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Units on any matter, and unless the arrangement between such Persons
provides otherwise, vote such Units in favor of, and at the direction of, the
Person who is the beneficial owner, and the Partnership shall be entitled to
assume it is so acting without further inquiry. The provisions of this Section
15.12(b) (as well as all other provisions of this Agreement) are subject to the
provisions of Section 10.4 hereof.
ARTICLE XVI
MERGER
16.1 Authority. The Partnership may merge or consolidate with one or more
corporations, business trusts or associations, real estate investment trusts,
common law trusts or unincorporated businesses, including, without limitation,
a general partnership or limited partnership, formed under the laws of the
State of Delaware or any other state of the United States of America pursuant
to a written agreement of merger or consolidation ("Merger Agreement") in
accordance with this Article.
16.2 Procedure for Merger or Consolidation. Merger or consolidation of
the Partnership pursuant to this Article requires the prior approval of the
General Partner. If the General Partner shall determine, in the exercise of its
sole discretion, to consent to the merger or consolidation, the General Partner
shall approve the Merger Agreement, which shall set forth:
(a) The names and jurisdictions of formation or organization of each
of the business entities proposing to merge or consolidate;
(b) The name and jurisdictions of formation or organization of the
business entity that is to survive the proposed merger or consolidation
(hereafter designated as the "Surviving Business Entity");
(c) The terms and conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property
or general or limited partnership interests, rights, securities or
obligations of the Surviving Business Entity; and (i) if any general or
limited partnership interests, securities or rights of any constituent
business entity are not to be exchanged or converted solely for, or into,
cash, property or general or limited partnership interests, rights,
securities or obligations of the Surviving Business Entity, the cash,
property or general or limited partnership interests, rights, securities or
obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such
general or limited partnership interests are to receive in exchange for, or
upon conversion of, their securities or rights, and (ii) in the case of
securities represented by certificates, upon the surrender of such
certificates, which cash, property or general or limited partnership
interests, rights, securities or obligations of the Surviving Business
Entity or any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof are to be
delivered;
(e) A statement of any changes in the constituent documents (the
articles or certificate of incorporation, articles of trust, declaration of
trust, certificate or agreement of limited partnership or other similar
charter or governing document) of the Surviving Business Entity to be
effected by such merger or consolidation;
(f) The effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 16.4 hereof or a
later date specified in or determinable in accordance with the Merger
Agreement (provided that if the effective time of the merger is to be later
than the date of the filing of the certificate of merger, it shall be fixed
no later than the time of the filing of the certificate of merger and
stated therein); and
(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or desirable.
16.3 Approval by Limited Partners of Merger or Consolidation. (a) The
General Partner of the Partnership, upon its approval of the Merger Agreement,
shall direct that the Merger Agreement be submitted to a vote of Limited
Partners whether at a meeting or by written consent, in either case in
accordance with the
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requirements of Article XV hereof. A copy or a summary of the Merger Agreement
shall be included in or enclosed with the notice of a meeting or the written
consent.
(b) The Merger Agreement shall be approved upon receiving the affirmative
vote or consent of the holders of at least 66 2/3% of the outstanding Units of
each class unless the Merger Agreement contains any provision which, if
contained in an amendment to the Agreement, the provisions of this Agreement or
the Delaware Act would require the vote or consent of a greater percentage of
the Percentage Interests of the Limited Partners or of any class of Limited
Partners, in which case such greater percentage vote or consent shall be
required for approval of the Merger Agreement.
(c) After such approval by vote or consent of the Limited Partners, and at
any time prior to the filing of the certificate of merger pursuant to Section
16.4 hereof, the merger or consolidation may be abandoned pursuant to provisions
therefor, if any, set forth in the Merger Agreement.
16.4 Certificate of Merger. Upon the required approval by the General
Partner and Limited Partners of a Merger Agreement, a certificate of merger
shall be executed and filed with the Secretary of State of the State of Delaware
in conformity with the requirements of the Delaware Act.
16.5 Effect of Merger. (a) Upon the effective date of the certificate of
merger:
(i) all of the rights, privileges and powers of each of the business
entities that has merged or consolidated, and all property, real, personal
and mixed, and all debts due to any of those business entities and all
other things and causes of action belonging to each of those business
entities shall be vested in the Surviving Business Entity and after the
merger or consolidation shall be the property of the Surviving Business
Entity to the extent they were of each constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any
of those constituent business entities shall not revert and is not in any
way impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests
in property of any of those constituent business entities shall be
preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business
entities shall attach to the Surviving Business Entity, and may be enforced
against it to the same extent as if the debts, liabilities and duties had
been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article shall not
be deemed to result in a transfer or assignment of assets or liabilities from
one entity to another having occurred.
ARTICLE XVII
RIGHT TO ACQUIRE UNITS
17.1 Right to Acquire Units. (a) Notwithstanding the provisions of
Section 13.1(a) hereof or any other provision of this Agreement (i) in the event
that at any time after the Support Period less than 10% of the total Units
outstanding are held by Persons other than the General Partner and its
Affiliates, the General Partner shall then have the right, which right it may
assign and transfer to the Partnership or any Affiliate of the General Partner,
exercisable in its sole discretion, to purchase all, but not less than all, of
the Units outstanding held by Persons other than the General Partner and its
Affiliates, at the greater of (x) the Current Market Price as of the date the
notice described in Section 17.1(b) hereof is mailed, (y) the Initial Unit Price
or (z) the highest cash price paid by the General Partner for any Unit purchased
during the 90-day period preceding the date that the notice described in Section
17.1(b) hereof is mailed. As used herein, (i) "Current Market Price" of any
class of Units listed or admitted to trading on any National Securities Exchange
means the average of the daily Closing Prices (as hereinafter defined) per Unit
of such class for the 20 consecutive Trading Days (as hereinafter defined)
immediately prior to such date and (ii) "Trading Day" means a day on which the
principal National Securities Exchange on which the Units of any class are
listed or admitted to trading is open for the transaction of business or, if
Units of a class are not listed or admitted to trading on any National
Securities Exchange, a day on which banking institutions in New York City
generally are open.
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(b) If the General Partner, any Affiliate of the General Partner or the
Partnership elects to exercise either right to purchase Units granted pursuant
to Section 17.1(a) hereof, the General Partner shall deliver to the Transfer
Agent written notice of such election to purchase (hereinafter in this Section
17.1 called the "Notice of Election to Purchase") and shall cause the Transfer
Agent to mail a copy of such Notice of Election to Purchase to the Record
Holders of Units (as of a Record Date selected by the General Partner) at least
10, but not more than 60, days prior to the Purchase Date. Such Notice of
Election to Purchase shall also be published in daily newspapers of general
circulation printed in the English language and published in the Borough of
Manhattan, New York. The Notice of Election to Purchase shall specify the
Purchase Date and the price (determined in accordance with Section 17.1(a)
hereof) at which Units will be purchased and state that the General
Partner, its Affiliate or the Partnership, as the case may be, elects to
purchase such Units, upon surrender of Depositary Receipts with respect to such
Units in exchange for payment, at such office or offices of the Transfer Agent
as the Transfer Agent may specify, or as may be required by any National
Securities Exchange on which the Units are listed or admitted to trading. Any
such Notice of Election to Purchase mailed to a Record Holder of Units at his
address as reflected in the records of the Transfer Agent shall be conclusively
presumed to have been given whether or not the owner receives such notice. On or
prior to the Purchase Date, the General Partner, its Affiliate or the
Partnership, as the case may be, shall deposit with the Transfer Agent cash in
an amount sufficient to pay the aggregate purchase price of all of the Units to
be purchased in accordance with this Section 17.1. If the Notice of Election to
Purchase shall have been duly given as aforesaid at least 10 days prior to the
Purchase Date, and if on or prior to the Purchase Date the deposit described in
the preceding sentence has been made for the benefit of the holders of Units
subject to purchase as provided herein, then from and after the Purchase Date,
notwithstanding that any Depositary Receipt shall not have been surrendered for
purchase, all rights of the holders of such Units (including, without
limitation, any rights pursuant to Articles IV, V and XIV hereof) shall
thereupon cease, except the right to receive the purchase price (determined in
accordance with Section 17.1(a) hereof) for Units therefor, without interest,
upon surrender to the Transfer Agent of the Depositary Receipts representing
such Units, and such Units shall thereupon be deemed to be transferred to the
General Partner, its Affiliate or the Partnership, as the case may be, on the
record books of the Transfer Agent and the Partnership, and the General Partner
or any Affiliate of the General Partner, or the Partnership, as the case may be,
shall be deemed to be the owner of all such Units from and after the Purchase
Date and shall have all rights as the owner of such Units (including, without
limitation, all rights as owner of such Units pursuant to Articles IV, V and XIV
hereof).
(c) At any time from and after the Purchase Date, a holder of an
outstanding Unit subject to purchase as provided in this Section 17.1 may
surrender his Depositary Receipt or Certificate, as the case may be, evidencing
such Unit to the Transfer Agent in exchange for payment of the amount described
in Section 17.1(a) therefor without interest thereon.
ARTICLE XVIII
GENERAL PROVISIONS
18.1 Addresses and Notices. Any notice, demand, request or report
required or permitted to be given or made to a Partner or Assignee under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first-class United States mail or by other means of
written communication to the Partner or Assignee at the address described below.
Any notice, payment or report to be given or made to a Partner or Assignee
hereunder shall be deemed conclusively to have been given or made, and the
obligation to give such notice or report or to make such payment shall be deemed
conclusively to have been fully satisfied, upon sending of such notice, payment
or report to the Record Holder of such Unit at his address as shown on the
records of the Transfer Agent or as otherwise shown on the records of the
Partnership, regardless of any claim of any Person who may have an interest in
such Unit or the Partnership Interest of a General Partner by reason of an
assignment or otherwise. An affidavit or certificate of making of any notice,
payment or report in accordance with the provisions of this Section 18.1
executed by the General Partner, the Transfer Agent or the mailing organization
shall be prima facie evidence of the giving or making of such notice, payment or
report. If any notice, payment or report addressed to a Record Holder at the
address of
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such Record Holder appearing on the books and records of the Transfer
Agent or the Partnership is returned by the United States Post Office marked to
indicate that the United States Postal Service is unable to deliver it, such
notice, payment or report and any subsequent notices, payments and reports
shall be deemed to have been duly given or made without further mailing (until
such time as such Record Holder or another Person notifies the Transfer Agent
or the Partnership of a change in his address) if they are available for the
Partner or Assignee at the principal office of the Partnership for a period of
one year from the date of the giving or making of such notice, payment or
report to the other Partners and Assignees. Any notice to the Partnership shall
be deemed given if received by the General Partner at the principal office of
the Partnership designated pursuant to Section 1.3 hereof. The Partnership and
the General Partner may rely and shall be protected in relying on any notice or
other document from a Partner or other Person if believed by them to be
genuine.
18.2 Titles and Captions. All article or section titles or captions in
this Agreement are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit, extend or describe the scope or intent of
any provisions hereof. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.
18.3 Pronouns and Plurals. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
18.4 Further Action. The parties shall execute and deliver all documents,
provide all information and take or refrain from taking action as may be
necessary or appropriate to achieve the purposes of this Agreement.
18.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.
18.6 Integration. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.
18.7 Creditors. None of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the Partnership.
18.8 Waiver. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
18.9 Counterparts. This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto or, in the case of a Person acquiring a Unit,
upon executing and delivering a Transfer Application as herein described,
independently of the signature of any other party.
18.10 Applicable Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
18.11 Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER:
Plum Creek Management Company, L.P.
By: DAVID D. LELAND
--------------------------------------
David D. Leland, President
ORGANIZATIONAL LIMITED PARTNER:
DAVID D. LELAND
--------------------------------------
David D. Leland
LIMITED PARTNERS:
All Limited Partners now and hereafter
admitted as limited partners of the
Partnership, pursuant to Powers of
Attorney now and hereafter executed in
favor of, and granted and delivered
to, the General Partner.
By: Plum Creek Management Company, L.P.
General Partner, as attorney-in-fact
for all Limited Partners pursuant
to the Powers of Attorney granted
pursuant to Section 1.4 hereof.
By: DAVID D. LELAND
--------------------------------------
David D. Leland, President
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