1
EXHIBIT 3.11
THE LIMITED PARTNERSHIP INTERESTS REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF DELAWARE
OR ANY OTHER JURISDICTION. THE LIMITED PARTNERSHIP INTERESTS MAY NOT BE SOLD,
PLEDGED, GIVEN, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933 AND APPLICABLE SECURITIES LAWS UNLESS APPROPRIATE
EXEMPTIONS FROM SUCH REGISTRATIONS ARE AVAILABLE AS EVIDENCED EITHER BY THE
DELIVERY TO THE PARTNERSHIP OF AN OPINION OF COUNSEL SATISFACTORY TO THE GENERAL
PARTNER OR SUBMISSION TO THE PARTNERSHIP OF OTHER EVIDENCE SATISFACTORY TO THE
GENERAL PARTNER.
AGREEMENT OF LIMITED PARTNERSHIP OF
INSPIRATION MEDIA OF PENNSYLVANIA, LP,
A DELAWARE LIMITED PARTNERSHIP
2
THIS AGREEMENT OF LIMITED PARTNERSHIP OF INSPIRATION MEDIA OF
PENNSYLVANIA, LP, A DELAWARE LIMITED PARTNERSHIP ("Agreement"), dated as of
March 9, 2001, is entered into by and among SALEM RADIO OPERATIONS -
PENNSYLVANIA, INC., a Delaware corporation as general partner (the "General
Partner"), and those persons listed as the limited partners on the signature
pages hereof (the "Limited Partners"). The General Partner and the Limited
Partners are collectively referred to as the "Partners" and INSPIRATION MEDIA OF
PENNSYLVANIA, LP, a Delaware limited partnership, is referred to as the
"Partnership". In consideration of the mutual covenants in this Agreement, the
parties to this Agreement agree as follows:
ARTICLE 1.
ORGANIZATION AND PURPOSE
1.1 Formation. The Partners hereby form a limited partnership
pursuant to the Delaware Limited Partnership Act (the "Act"), which shall be in
accordance with the terms contained in this Agreement.
1.2 Name. The name of the Partnership is "INSPIRATION MEDIA OF
PENNSYLVANIA, LP" and all business of the Partnership will be conducted under
the name of the Partnership. The General Partner may change the Partnership's
name and shall so notify the Limited Partners.
1.3 Purpose. The business of the Partnership is to (a) acquire,
own, hold operate, finance, refinance, maintain, manage, develop, lease and/or
sell the radio broadcasting businesses heretofore owned and operated by SALEM
MEDIA OF PENNSYLVANIA, INC., a Pennsylvania corporation, commonly known as
stations WPIT-AM and WORD-FM (the "Business"), and (b) to engage in any other
legal activity in which a partnership formed pursuant to the Act is permitted to
engage.
1.4 Place of Business. The principal place of business of the
Partnership will be at 4880 Santa Rosa Road, Suite 300, Camarillo, California
93012 or any other location as may be subsequently chosen by the General Partner
and, in such event, the General Partner shall so notify the Limited Partners.
1.5 Addresses of Partners. The addresses of the General Partner
and the Limited Partners are listed on the signature pages hereof.
1.6 Term. The Partnership's term shall commence upon the filing
with the Delaware Secretary of State of a "Certificate of Limited Partnership"
and will terminate on December 31, 2050, subject to earlier termination upon the
mutual agreement of the Limited Partners and the General Partner to terminate
the Partnership or an event of termination otherwise provided by this Agreement
or by law.
1.7 Documents. The Partnership will execute and file the
documents necessary to
3
comply with the requirements of the laws of Delaware for the formation,
continuation and operation of limited partnerships. The Partners agree to
execute all documents and to undertake all other acts, as reasonably may be
deemed necessary by the General Partner, in order to comply with the
requirements of the laws of Delaware for the formation, continuation and
operation of limited partnerships.
ARTICLE 2
CAPITAL
2.1 Capital Contributions. Concurrently with the execution of
this Agreement, (a) the Limited Partner shall contribute all of the assets of
the Business and all related leases and contracts to the capital of the
Partnership subject to all existing liabilities of the Business (the "Assets").
and (b) the General Partner shall contribute cash in the amount of $500,000 to
the capital of the Partnership. The Partners shall not be obligated to
contribute any additional capital to the Company.
2.2 Liability of General Partner. The General Partner is not
liable to the Limited Partners for the repayment of the Limited Partners'
capital contributions and is not obligated to make any advances or contributions
of capital to the Partnership, except as otherwise specifically provided herein.
2.3 No Interest on Capital. No interest will be paid to the
Partners on capital contributions or on "Capital Account" (defined below)
balances.
2.4 Return of Capital. Except as otherwise specifically provided
in this Agreement, no time has been agreed upon for the contributions of the
Partners to be returned to them. The Limited Partners have no right to demand
and receive property other than cash in return for the Limited Partners' capital
contributions.
2.5 Loans from Partners. Any Partner, including the General
Partner, may advance funds to the Partnership if additional funds are deemed
necessary by the General Partner. The advances will be evidenced by the
Partnership's note payable to the lending Partner. The note will provide for a
rate of interest mutually acceptable to the General Partner and the Partner
advancing funds to the Partnership; provided, however, such rate of interest
shall be commercially reasonable.
2.6 Capital Accounts. A "Capital Account" shall be maintained
for each Partner in accordance with the provisions of Treasury Regulations
Section 1.704-1(b)(2)(iv)(b) and such other provisions of Treasury Regulations
Section 1.704-1(b)(2)(iv) as the General Partner shall reasonably determine. The
contribution of the Assets to the capital of the Partnership shall be credited
1% to the Capital Account of the General Partner and 99% to the Capital Account
of the Limited Partner.
2.7 Liability of Limited Partners. Except as otherwise
specifically provided in this
2-
4
Agreement or as required by law, the Limited Partners will not be liable for any
of the debts of the Partnership.
2.8 Partnership Percentages. The "Partnership Percentage" of
each Partner shall be in the ratio which that Partner's capital contributions
bears to the aggregate of all of the capital contributions made by all of the
Partners. The initial Partnership Percentages are as follows:
PARTNERSHIP
PARTNER PERCENTAGE
------- -----------
SALEM RADIO OPERATIONS - 1%
PENNSYLVANIA, INC.
SALEM MEDIA OF PENNSYLVANIA, INC. 99%
2.9 Majority-in-Interest. For purposes of this Agreement, a
"Majority-in-Interest" of the Limited Partners shall mean those Limited Partners
then owning more than fifty percent (50%) of the Partnership Percentages then
owned by all of the Limited Partners. Except as otherwise specifically provided
in this Agreement, all decisions of the Limited Partners shall be made by a
Majority-in-Interest of the Limited Partners.
ARTICLE 3
PROFITS, LOSSES AND DISTRIBUTIONS
3.1 Definitions. For purposes of this Agreement, the following
capitalized terms are defined as follows:
3.1.1 "Distributable Cash" is all cash of the
Partnership (including, without limitation, cash from the sale of any or all of
the Partnership property) less (i) the amount necessary for payment of all
costs, expenses, obligations and liabilities of the Partnership then due
(including any then due advances to the Partnership by the Partners) and (ii)
the amount deemed necessary by the General Partner, in the exercise of its
reasonable discretion, to establish a reserve for the payment of foreseen or
unforeseen costs, expenses, obligations or liabilities of the Partnership.
3.1.2 The "Profits" and "Losses" of the Partnership
shall be calculated in accordance with the provisions of Treasury Regulations
Section 1.703-1, subject to the provisions of Treasury Regulations Section
1.704-1 and 2 as the General Partner shall reasonably determine.
3.1.3 The "Accounting Period" of the Partnership will be
each period commencing on the first day following the last day of the
immediately preceding Accounting Period (which for the Partnership's first
fiscal year shall be deemed to be the date of the commencement of the
Partnership) and ending on December 31 (which shall also be the Partnership's
fiscal year end), unless another fiscal year is selected by the General Partner
and permission to change to such other
3-
5
fiscal year is granted by the Internal Revenue Service.
3.2 Allocation of Profits: Profits for any Accounting Period
shall be allocated among the Partners in the ratio of their Partnership
Percentages.
3.3 Allocation of Losses: Losses for any Accounting Period shall
be allocated among the Partners in the ratio of their Partnership Percentages.
3.4 Distributions and Payments: Distributable Cash will be paid
and distributed to the Partners in the ratio of their Partnership Percentages.
3.5 Identity of Distributees: Distributions shall be made only
to persons who, according to the books and records of the Partnership, are the
owners of record of interests in the Partnership on a date to be determined by
the General Partner. Neither the General Partner nor the Partnership shall incur
any liability for making distributions in accordance with the preceding
sentence, whether or not the General Partner has knowledge or notice of any
transfer of ownership of any interests in the Partnership.
3.6 Time of Distributions: The General Partner will make
distributions to the Partners within thirty (30) days after the General
Partner's determination of the availability of cash therefor.
3.7 Sharing Between Transferor and Transferee: If an interest in
the Partnership is transferred, the income, gains, losses and deductions
allocable to the interest transferred for the Accounting Period during which the
transfer occurred will be allocated between the transferor and transferee of the
interest in proportion to the time during the Accounting Period that the
interest was owned by the transferor and transferee. Credits shall be allocated
to the party who owned the interest at the time that the property giving rise to
the credit was placed in service. Each transferee will be credited with the
Capital Account of the transferee's transferor. If a transferor transfers less
than all of the transferor's interest in the Partnership, the Capital Account
will be allocated in proportion to the fraction of the interest respectively
transferred and retained.
3.8 Equitable Adjustment: For any Accounting Period or Periods,
the General Partner is authorized to make an equitable adjustment of the
allocation of Profits and/or Losses amongst the Partners so that to the maximum
extent reasonably possible, upon the final distribution of cash to the Partners
pursuant to Paragraph 7.3.4, the balances of the Partners' Capital Accounts
shall be zero.
ARTICLE 4
4-
6
REIMBURSEMENT OF GENERAL PARTNER'S EXPENSES
AND INDEMNIFICATION OF GENERAL PARTNER
The Partnership will reimburse the General Partner for all
ordinary and necessary operating expenses incurred by the General Partner in
carrying on the Partnership's business. The General Partner shall not be liable
to the Partnership or to any Partner for any act or omission suffered or taken
by it in good faith, and the General Partner shall be fully protected and
indemnified by the Partnership against all liabilities and losses suffered by
virtue of the General Partner's status as General Partner (including amounts
paid in respect of judgments, fines or in settlement of litigation and expenses
reasonably incurred by it in connection with any pending or threatened
litigation or proceeding) with respect to any action or omission suffered or
taken, including but not limited to any action taken by the General Partner in
the formation and operation of the Partnership, all decisions made in good faith
with respect to the Partnership's interest in the Company and liabilities
arising under the IRC and the General Partner's activities as the "TMP" (as
defined below); provided that (i) the acts or omissions do not constitute gross
negligence, fraud or criminal act by the General Partner, and (ii) the
satisfaction of any indemnification and saving harmless will be from and limited
to Partnership assets and no Limited Partner will have any personal liability on
account of the indemnification and saving harmless of the General Partner. To
the extent that the acts or omissions of the General Partner constitute gross
negligence, fraud or criminal act by the General Partner, the General Partner
shall indemnify and save harmless the Partnership and the Limited Partners from
any loss or damage occasioned thereby (including, without limitation, reasonable
attorneys' fees). The General Partner shall not be liable to the Partnership or
any Limited Partner because any taxing authorities disallow or adjust any
deductions, losses, credits or items of income or gain in the Partnership's or
any Limited Partner's income tax returns.
ARTICLE 5
POWERS AND OBLIGATIONS OF PARTNERS
5.1 General Partner to Manage Business. The General Partner will
manage and control the business of the Partnership and will devote such portion
of its time and attention to the conduct of the business of the Partnership as
is necessary to carry out the purposes and business of the Partnership. The
General Partner shall make all Partnership decisions and shall specifically have
the authority to hire attorneys, accountants, and any other necessary
consultants or employees and to make all decisions concerning the Partnership's
interest in the Company.
5.2 Powers of General Partner. The General Partner will possess
and enjoy, without the need to obtain the approval of any Limited Partner (and
therefore, without any Limited Partner having any voting rights with respect to
such matters), except as otherwise provided by this Agreement, all the rights
and powers necessary or desirable to carry out the purposes and business of the
Partnership, and all of the power and authority as may be specifically stated in
this Agreement or as may be otherwise provided by law, including, but not
limited to, the power:
5.2.1 Financing. To encumber all or less than all of any
Partnership assets
5-
7
or rights;
5.2.2 Loans. To borrow money on behalf of the
Partnership and to execute and deliver in the name of the Partnership notes
evidencing such borrowings and mortgages, deeds of trust and any other security
instruments securing such borrowings;
5.2.3 Expenses. To pay from Partnership assets all
expenses of organizing and conducting the business of the Partnership, including
without limitation, legal and accounting fees and costs;
5.2.4 Instruments. To execute any and all other
instruments and take any and all other action necessary or desirable to carry
out the purposes and business of the Partnership;
5.2.5 Sales. To sell, transfer, convey and/or exchange
the Partnership's interest in the Company or any portion of it;
5.2.6 General Duties. To assume the overall duties
imposed on the General Partner by the Act; and
5.2.7 Authority. The signature of the General Partner
alone shall be sufficient to bind the Partnership and all of the Partners with
respect to the execution of any documents concerning or affecting the
Partnership and the Partnership's interest in the Company and/or sale of any or
all of it or the execution of any mortgages, deeds of trust or any other
security instruments securing any borrowings by the Partnership.
5.3 Other Interests of Partners. Any Partner or any principal or
Affiliate of a Partner may engage in other businesses including the business of
a nature which is the same as or similar to or competitive with the business of
this Partnership without any duty or obligation to offer any business
opportunity to the Partnership or the Partners or to account to the Partnership
or any of the Partners regarding the business opportunity or the profits derived
from the business opportunity.
5.4 Limitations on Limited Partner and Consents. No Limited
Partner shall take part in the Partnership business or have any right or
authority to act for or bind the Partnership.
5.5 Affiliates. The General Partner may, in the General
Partner's absolute discretion, employ an Affiliate to supply goods or services
required by the Partnership; provided such Affiliate is compensated for such
goods or services on a basis comparable to that which could be arranged with
unaffiliated third parties for comparable goods or service. Any Affiliate
employed by the Partnership shall have the absolute right (but not the
obligation) to contract with independent third parties in connection with the
performance of the foregoing service.
5.6 Officers. The Manager may appoint and/or remove officers of
the company from time to time in its sole and absolute discretion. Each officer
shall have the title and authority designated by the Manager.
6-
8
ARTICLE 6
ADMISSION AND WITHDRAWAL OF PARTNERS
AND TRANSFER OF INTERESTS IN THE PARTNERSHIP
6.1 Definitions.
6.1.1 "Admission" of a Partner means the addition of a
new partner to the Partnership.
6.1.2 "Transfer" of an interest in the Partnership means
the transfer, alienation, sale, assignment, pledge or other disposition or
encumbrance of all or any part of an existing interest in the Partnership,
whether voluntarily or involuntarily.
6.1.3 The term "Associate" shall mean with respect to
any Partner (i) any other Partner, (ii) any Partner's spouse, lineal ascendants
or descendants, or a trust for his or her or their benefit, and (iii) any
beneficiary of a trust which is a Partner.
6.2 Admission of or Transfer by a Partner.
6.2.1 Admission Date. Any Admission of a Partner shall
be deemed to occur effective either (i) if the Admission or withdrawal occurs
from the first through the 15th day of the month, then on the first day of the
calendar month in which the admission or withdrawal occurs or (ii) if the
Admission or withdrawal occurs from the 16th through the last day of the month,
then on the first day of the calendar month after the month in which the
Admission or withdrawal occurs.
6.2.2 Limitations on Transfer and Admission. No Transfer
of a Partnership interest shall occur and no Admission of a person as a Partner
shall occur except for (a) Transfers to Associates and (b) Transfers to persons
or entities other than Associates previously approved in writing by the General
Partner which approval may be withheld in the General Partners' absolute
discretion (collectively referred to herein as "Permitted Transfers"); provided,
however, that (i) all such Permitted Transfers must be made in full compliance
with all of the transfer requirements contained in Paragraphs 6.2.3 and 6.3
below, (ii) the requirements for the Admission of a person to the Partnership
contained in Paragraph 6.4.1 below must be fully complied with before the
transferee of a Permitted Transfer can be admitted to the Partnership, and (iii)
no Partner may transfer all or any part of his interest in the Partnership to a
minor or an incompetent unless the Transfer is to a trust, guardianship, or
other legal entity formed for the benefit of the incapacitated party.
6.2.3 Transfer Requirements. No Transfer shall be
permitted (i) if the proposed Transfer or the proposed transferee will, or
could, impair the ability of the Partnership to be taxed as a partnership under
the Federal income tax laws, or (ii) if the Transfer will, or could, cause the
Partnership's tax year to close or the Partnership to terminate for Federal
income tax purposes, (iii) if the proposed Transfer would be in violation of any
of the terms and/or conditions
7-
9
of the Master Agreement, and (iv) unless the proposed transferee has
acknowledged in writing the liabilities of the transferor and the Partnership
which cannot be ascertained from this Agreement.
6.2.4 Partnership Amendments. In the event of the
Admission of a Partner, or a Permitted Transfer by a Partner, this Agreement
will be promptly amended as necessary to reflect any changes in the profit and
loss allocations of Partners, to reflect the capital contributions of the newly
admitted Partner, and to set forth any new provisions or to amend any existing
provisions of this Agreement which may be necessary or desirable in light of the
Admission of a Partner or Transfer by a Partner.
6.3 Documentation and Costs. Any assignee or transferee shall
execute any and all documents reasonably requested by the General Partner and
shall pay all reasonable expenses incurred by the Partnership in connection with
the Transfer of such interest in the Partnership or the Admission of such
assignee or transferee as a Partner, including, but not limited to, the cost of
the preparation, filing and publishing of any amendment to this Agreement or any
other necessary documentation to evidence an Admission or Transfer.
6.4 Substituted Limited Partners and Assignees.
6.4.1 Rights of Substituted Limited Partner. A
transferee who becomes a Substituted Limited Partner succeeds to all of the
rights and powers and is subject to all of the obligations, restrictions and
liabilities of a Partner for the interest in the Partnership which is acquired
by the transferee. Except as hereinafter otherwise provided, a transferee shall
become a "Substituted Limited Partner" only upon the agreement of the General
Partner (which shall be within the General Partner's sole, absolute and
arbitrary discretion) and the transferee executing any and all documents
reasonably requested by the General Partner, including without limitation an
agreement by which such transferee shall be bound by all of the provisions of
this Agreement.
6.4.2 Assignee. A transferee who does not become a
Substituted Limited Partner will be entitled only to receive the share of cash
and in kind distributions and the return of capital contributions to which the
Partner from whom such transferee acquired such transferee's interest in the
Partnership would have been entitled for the interest acquired but,
notwithstanding any other provisions in this Agreement to the contrary, will
have no right to require any information or account of Partnership transactions,
no right to inspect the Partnership books and no other rights or powers of a
Partner. A transferee nevertheless is subject to all of the provisions of this
Agreement and to all of the obligations, restrictions and liabilities under this
Agreement for the interest acquired.
6.4.3 Effect of Agreement. Until the time when the
transferee of an interest in the Partnership becomes a Substituted Limited
Partner, the transferor of the interest remains subject to all of the
obligations, restrictions and liabilities under this Agreement for the interest
and retains all rights and powers of a Partner for the interest other than the
right to receive cash and in kind distributions and the return of capital
contributions.
8-
10
6.5 Continuation of Partnership. In the event of the happening
of any of the events set forth in Section 17-801(3) of the Act, a
Majority-in-Interest of the Limited Partners may continue the business of the
Partnership for the balance of the term specified in this Agreement by electing
one or more successor general partners. Upon the election of one or more
successor general partners, the predecessor General Partner's then interest as a
general partner in the Partnership shall be converted to that of a limited
partner and the General Partner's rights to Profits, Losses and cash
distributions shall remain unchanged. The successor general partner will agree
in writing to be bound by the provisions of this Agreement, and thereafter, will
be deemed to be the "General Partner" under this Agreement. If the Limited
Partners do not so elect to continue the business of the Partnership, the
Partnership shall terminate.
6.6 Continuation of General Partner's Obligations. The happening
of any of the events set forth in Section 17-801(3) of the Act, will not relieve
the General Partner of any of the General Partner's obligations to the Limited
Partners or the Partnership which previously arose under this Agreement.
6.7 Withdrawal. No Partner may withdraw from the Partnership
without the prior written consent of all the other Partners.
ARTICLE 7
DISSOLUTION AND LIQUIDATION
7.1 Events of Termination: The Partnership shall, unless
otherwise provided, terminate and dissolve on the happening of any of the
following events:
7.1.1 Bankruptcy. The happening of any events set forth
in Section 17-801(3) of the Act, unless a Majority-in-Interest of the Limited
Partners elect to continue the Partnership in accordance with Paragraph 6.6
(entitled "Continuation of Partnership"), above;
7.1.2 Consent. The mutual consent of the General Partner
and a Majority-in- Interest of the Limited Partners;
7.1.3 Sale. The sale of all or substantially all of the
Partnership assets and collection of all monies due therefrom (including
interest on deferred payments);
7.1.4 Expiration. The expiration of the Partnership
term; and
7.1.5 IRC Section 708. Pursuant to the provisions of
Section 708 of the Internal Revenue Code of 1986, as amended ("IRC"), but solely
for purposes of making any allocations required by Section 1.704-1(b) of the
Treasury Regulations ("Regulations", as amended from time to time and including
corresponding provisions of succeeding regulations). For state law purposes, the
Partnership shall continue in full force and effect despite the transfer of a
Partner's Partnership Interest.
9-
11
7.2 Winding Up Affairs and Liquidations. Upon the termination
and dissolution of the Partnership, the General Partner or the persons required
or permitted by law to carry out the winding up of the affairs of the
Partnership ("Liquidator") will promptly notify all Partners of such
dissolution; shall proceed to the liquidation of the assets of the Partnership
by converting such assets to cash insofar as deemed practicable by the General
Partner or the Liquidator; will wind up the affairs of the Partnership; and,
after paying or providing for the payment of all liabilities and obligations of
the Partnership, will distribute the proceeds of liquidation and other assets of
the Partnership as provided by law and the terms of this Agreement.
7.3 Distributions on Dissolution. The proceeds of liquidation
and other assets of the Partnership shall be applied and distributed in the
following order of priority:
7.3.1 Debts. To the payment of debts and liabilities of
the Partnership (other than any loans and advances that may have been made by
any of the Partners, or amounts owing to any of the Partners) and the expenses
of liquidation;
7.3.2 Reserves. To the setting up of any reserves that
the General Partner or Liquidator may deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the Partnership, which
reserves shall be paid over to an escrow holder designated by the General
Partner or Liquidator to be held for the purpose of disbursing such reserves in
payment of any of the aforementioned contingencies, and, at the expiration of
such period, as the General Partner or the Liquidator shall deem advisable, to
distribute the balance thereafter remaining in the manner hereinafter provided;
7.3.3 Loans. To the payment of any loans or advances
that may have been made by any of the Partners; and
7.3.4 Partners. Any balance then remaining will be
distributed to the Partners in accordance with Paragraph 3.4 (entitled
"Distributions and Payments"). Any Partner with a deficit in his or its Capital
Account shall not be obligated to restore the amount of such deficit to the
Partnership or the other Partners.
7.4 Assets Other Than Cash. Assets of the Partnership may be
distributed in kind on the basis of the then fair market value of such assets as
determined by agreement of the Partners, and if no such agreement of value is
reached within 30 days, then such value shall be determined by an independent
appraiser appointed by the American Arbitration Association upon application of
the General Partner (the cost and expense of said appraisal to be borne by the
Partnership). If agreed to by all the Partners, distributions in-kind will be
made to the Partners as tenants-in-common. For purposes of making such
distribution only, the unrealized profit or loss on any such asset (based on its
fair market value) shall be first allocated among the Partners and the
distribution of the asset shall be treated as a distribution of cash equal to
the fair market value of such asset.
10-
12
ARTICLE 8
FISCAL MATTERS
8.1 Books and Journals. The Partnership will maintain full and
accurate books of the Partnership at the offices of the Partnership, showing all
receipts and expenditures, assets and liabilities, Profits and Losses, and all
other records necessary for recording the Partnership's business and affairs or
required by the Act. Each Partner and such Partner's duly authorized
representatives shall, during normal business hours, have access to and may
inspect and copy any of such books and records.
8.2 Accountants. The accountants shall be such firm of public
accountants as may be selected by the General Partner.
8.3 Reports to Partners. The General Partner will have prepared,
and shall deliver to each Partner within 90 days after the end of each fiscal
year, a copy of the foreign, federal and state income tax information returns of
the Partnership for the preceding fiscal year showing each Partner's
distributive share of each item of income, gain, loss, deduction, credit or
preference which a Partner is required to take into account separately on such
Partner's foreign, federal and state income tax returns.
8.4 Bank Accounts. All funds of the Partnership will be
deposited in its name and in such bank accounts as the General Partner shall
reasonably determine.
8.5 Accounting Decisions. All decisions as to accounting
matters, except as specifically provided to the contrary in this Agreement, will
be made by the Partnership's accountants subject to the approval of the General
Partner.
8.6 Federal Income Tax Elections. The General Partner shall
cause the Partnership to make an election (or consent to any such election by a
Partner) pursuant to any of IRC Sections 732(d) and/or 754 (or corresponding
provisions of succeeding law or state law), as may be determined by the General
Partner in the General Partner's discretion, except to the extent the General
Partner is otherwise directed by this Agreement.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 Notices. All notices, consents, waivers, offers, requests,
votes or other instruments or communications provided for under this Agreement
("notice") will be in writing, signed by the parties giving the notice, and will
be deemed properly given and effective when actually received or, unless
otherwise provided in this Agreement, when deposited in the United States mail,
if sent by registered or certified mail, return receipt requested, first class
postage and fees prepaid, addressed to the addresses as set forth on the
signature pages hereof. Each Partner may, from time to time, by notice to all
other Partners, specify a new address for the receipt of notices.
11-
13
9.2 Consents Deemed Given If Not Withheld. Whenever a consent,
approval, waiver or affirmative vote of the Limited Partners is required under
this Agreement or is desirable regarding any transaction, the Limited Partners
will be given notice requesting the consent, approval, waiver or affirmative
vote. If a Limited Partner does not respond within 10 business days (or any
later time period specified if a different period is provided in the notice)
after actual receipt of the notice, by delivery of a notice to the General
Partner (which includes a telegram or telex) specifically withholding, or
indicating an inability at the time to give such Limited Partner's consent,
approval, waiver or affirmative vote, or requesting additional pertinent
documentation or information, then such Limited Partner will be deemed
conclusively to have given such Limited Partner's consent, approval, waiver or
affirmative vote.
9.3 Limited Power of Attorney. Each Limited Partner, by such
Limited Partner's execution of this Agreement, irrevocably constitutes and
appoints the General Partner as such Limited Partner's true and lawful attorney
and agent, with full power and authority in such Limited Partner's name, place
and stead only to execute, acknowledge and deliver and to file or record in any
appropriate public office: (i) any certificate or other instrument which may be
necessary, desirable or appropriate to qualify or to continue the Partnership as
a limited partnership or to transact business as a limited partnership in any
jurisdiction in which the Partnership conducts business; (ii) any amendment to
this Agreement or to any certificate or other instrument which may be necessary,
desirable or appropriate to reflect the Admission of a Partner (including
pursuant to Section 2.2.2), the withdrawal of a Partner or the Transfer of all
or any part of the interest of a Partner in the Partnership or any additional
capital contributions or withdrawal of capital contributions made by a Partner,
all in accordance with the provisions of this Agreement; and (iii) any
certificates or instruments which may be appropriate, necessary or desirable to
reflect the dissolution and termination of the Partnership. This power of
attorney will be deemed to be coupled with an interest and will survive the
transfer by any Limited Partner of such Limited Partner's interest in the
Partnership. Notwithstanding the existence of this power of attorney, each
Limited Partner agrees to join in the execution, acknowledgement and delivery of
the instruments referred to above if requested to do so by the General Partner.
This power of attorney granted to the General Partner is a limited power of
attorney that does not authorize the General Partner to act on behalf of any
Limited Partner except to execute the documents described in this Paragraph 9.3.
9.4 Integration. This Agreement sets forth the entire agreement
between the parties with regard to the subject matter hereof. All agreements,
covenants, representations and warranties, express and implied, oral and
written, of the parties with regard to the subject matter of this Agreement are
contained in this Agreement and the documents referred to in this Agreement or
implementing the provisions of this Agreement. No other agreements, covenants,
representations or warranties, express or implied, oral or written, have been
made by either party to the other with respect to the subject matter of this
Agreement. All prior and contemporaneous conversations, negotiations, possible
and alleged agreements and representations, covenants, and warranties with
respect to the subject matter of this Agreement are waived, merged herein and
therein and superseded by this Agreement. This is an integrated agreement.
12-
14
9.5 Applicable Law. This Agreement shall be governed by,
construed and enforced in accordance with the internal laws of the State of
Delaware.
9.6 Counterparts. This Agreement may be executed in counterparts
and all counterparts so executed shall constitute one Agreement binding on all
the parties. It shall not be necessary for each party to execute the same
counterpart.
9.7 Severability. In case any one or more of the provisions
contained in this Agreement or any application of the provisions shall be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions or the remaining applications will
not in any way be affected or impaired.
9.8 Captions. The captions and headings in this Agreement are
for convenience only and will not be considered in interpreting any provision of
this Agreement.
9.9 Binding Effect. Except as otherwise provided to the
contrary, this Agreement will be binding upon, and inure to the benefit of, the
Partners and their respective heirs, executors, administrators, successors and
assigns.
9.10 Gender and Number. Whenever required by the context, the
singular will be deemed to include the plural, and the plural will be deemed to
include the singular, and the masculine, feminine and neuter genders will each
be deemed to include the other.
9.11 Amendment. Except as otherwise permitted in this Agreement,
this Agreement may be amended in whole or in part only by an agreement in
writing signed by the General Partner and the Limited Partners; provided,
however, this Agreement may also be amended by the execution of the General
Partner and those Limited Partners then owning a Majority-in-Interest of the
Partnership Percentages then owned by the Limited Partners wherever this
Agreement specifically permits action by the Limited Partners upon the approval
or consent of less than all of the Limited Partners.
9.12 Exhibits. All Exhibits attached hereto are incorporated
herein by reference as though fully set forth herein.
9.13 Interpretation. No provision of this Agreement is to be
interpreted for or against either party because that party or that party's legal
representative drafted such provision.
9.14 Partnership Tax Audits.
9.14.1 Designation. The General Partner is designated as
the Partnership's "Tax Matters Partner" ("TMP") in accordance with the
provisions of IRC Section 6231(a)(7).
13-
15
9.14.2 Notification of Partners. The TMP shall keep all
Partners apprised of the status of all administrative and judicial proceedings
regarding the determination of Partnership tax items, including, without
limitation, the commencement of an audit, settlement offers proposed by the
Internal Revenue Service and the status of any litigation. The TMP shall not
enter into a settlement agreement with the Internal Revenue Service on behalf of
any Partner without such Partner's consent.
9.14.3 Receipt of FPAA. Promptly upon the TMP's receipt
of a Notice of Final Partnership Administrative Adjustment ("FPAA"), within the
meaning of IRC Section 6226, the TMP shall solicit the written directives of the
Partners as to the choice of judicial forum in which to contest the FPAA. The
TMP shall comply with the written directives of the Limited Partner. In the
event that no such written directive is obtained, the TMP shall file a petition
in the United States Tax Court.
9.14.4 Notification to IRS. If the Limited Partner
wishes to receive notices directly from the Internal Revenue Service, the
Limited Partner shall so notify the TMP within thirty (30) days after the
execution of this Agreement, and the TMP shall thereafter furnish the Internal
Revenue Service with the name and address of the Limited Partner and shall
designate the Limited Partner as a "Notice Partner" pursuant to the provisions
of IRC Sections 6223 and 6231(a)(8).
9.14.5 Special Notices. Nothing contained in this
Agreement shall be deemed to prohibit any Partner from requesting special notice
or exercising any other rights permitted pursuant to IRC Sections 6221 through
6231.
9.15 No Partition: Each Partner waives any right to maintain an
action to partition any investment or asset of the Partnership (including
without limitation the Partnership's interest in the Company) during the term of
the Partnership.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
ADDRESSES: GENERAL PARTNER:
- --------- ----------------
4880 Santa Rosa Road SALEM RADIO OPERATIONS -
Suite 300 PENNSYLVANIA, INC., a Delaware
Camarillo, CA 93012 corporation
By: /s/ Jonathan L. Block
---------------------------------
Name: Jonathan L. Block
Title: Vice President
LIMITED PARTNER:
---------------
14-
16
4880 Santa Rosa Road SALEM MEDIA OF PENNSYLVANIA,
Suite 300 INC., a Pennsylvania corporation,
Camarillo, CA 93012
By: /s/ Jonathan L. Block
---------------------------------
Name: Jonathan L. Block
Title: Vice President
15-