1
EXHIBIT 3.3
Execution Copy
INTERMEDIA CAPITAL PARTNERS IV, L.P.
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
Dated as of August 5, 1997
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TABLE OF CONTENTS
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ARTICLE 1 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Formation of the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Principal Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Agent for Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Business of the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Term of the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2 Capital Contributions, Withdrawals and Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Contributions of Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) General Partner as Limited Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(c) Additional Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(d) Additional Contributions by Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(e) Additional Contributions by General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(f) Payment of Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(g) General Partner Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(h) Limited Partner Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(i) Return of Certain Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Withdrawals of Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Withdrawals in General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Required Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Effective Date of Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) Effect of Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Limitations on Withdrawal of Capital Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(f) Interest on Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 3 Profits and Losses; Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Profits and Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Partnership Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.3 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 4 Management of Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Management Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Specific Authority of the General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Valuation of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Revaluation of Partnership Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.6 Administration Fee and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Administration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) General Partner Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.7 Rights of the Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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(a) No Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Annual Operating Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) Advisory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Dissolution or Bankruptcy of a Limited Partner . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.8 Successor General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Removal of the General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Withdrawal of the General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(c) Hindery's Return to the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(d) General Provision Regarding Approvals by the Limited Partners. . . . . . . . . . . . . . . . . . 25
(e) Right To Recover Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.9 Sale Initiation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.10 Nonvoting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 5 Tax Matters and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 Filing of Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.2 Tax Reports to Current and Former Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.3 Restriction on General Partner Activity With Respect to Publicly Traded Partnerships . . . . . . . . . . . 28
5.4 Duties and Obligations of the General Partner With Respect to Publicly Traded Partnerships . . . . . . . . 29
5.5 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.7 Method of Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 6 Conflicts of Interest; Indemnification; Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.1 Outside Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.2 Contracts With the General Partner, Affiliates and Limited Partners . . . . . . . . . . . . . . . . . . . 31
6.3 Indemnification of the Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.4 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 7 Termination and Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.1 No Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.2 Events of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.3 Winding-up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.4 Order of Liquidating Payments and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.5 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.6 Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.7 Orderly Methods of Liquidating Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 8 Transfer of Interest, Failure To Pay Capital Contributions, Beneficial Owners . . . . . . . . . . . . . . 36
8.1 Transfer of Partnership Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.2 Transfer of IP Holdings Affiliates' Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.4 Failure To Pay Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.5 Increase in Beneficial Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 9 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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9.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.3 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.5 Waiver of Partition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.6 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.7 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.8 Confidentiality of Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.11 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.12 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.13 Nonrecourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.14 Foreign Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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DEFINITIONS
Term Section
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1933 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legend No. 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Adjacent Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
Administration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6(a)
Advisory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7(d)
Adverse Regulatory Development . . . . . . . . . . . . . . . . . . . . . . . . 7.6(b)
Affected Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6(b)
AVR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 2
BHC LP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10
Capital Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
FRB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10
General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Greenville/Spartanburg . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1 Note 5
Contribution Agreement
ICM-IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
ICM LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
IMI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2
Income Tax Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Indemnified Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2(a)
Indemnifying Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2(a)
Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legend No. 1
Investing Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5(a)
Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
IP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1 Note 3
IP-I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9(b)
IP-IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5(a)
IPSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 2
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Term Section
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IPWT Contribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1 Note 3
IPWT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1 Note 3
LP Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
New Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(f)
Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(j)(4)
Nonvoting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10
Notice Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9(d)
Override Tax Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(i)(B)
Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Partnership Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
Preferred Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3(d)(1)
Regulatory Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6(b)
Retrievable Tax Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(i)(B)
RMG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 2
Shortfall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(i)
Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1 Note 5
TCI Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1 Note 5
TCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9(a)
The Cablevision Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 2
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INTERMEDIA CAPITAL PARTNERS IV, L.P.
AGREEMENT OF LIMITED PARTNERSHIP
THE LIMITED PARTNERSHIP INTERESTS ("INTERESTS") HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). SUCH INTERESTS
ARE BEING OFFERED AND SOLD UNDER THE EXEMPTION PROVIDED BY SECTION 4(2) OF THE
1933 ACT AND/OR PURSUANT TO RULE 506 OF REGULATION D THEREUNDER.
A PURCHASER OF ANY INTEREST MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE INTERESTS HAVE NOT BEEN
REGISTERED UNDER THE 1933 ACT AND, THEREFORE, CANNOT BE SOLD UNLESS THEY ARE
SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THERE
IS NO OBLIGATION OF THE PARTNERSHIP TO REGISTER THE INTERESTS UNDER THE 1933
ACT.
THE AGREEMENT RESTRICTS TRANSFER OF THE INTERESTS. ACCORDINGLY, PURCHASE OF
THE INTERESTS IS ONLY SUITABLE FOR INVESTORS WILLING AND ABLE TO ACCEPT THE
ECONOMIC RISK OF THE INVESTMENT AND LACK OF LIQUIDITY.
* * *
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"Agreement"), originally entered into and effective as of March 19, 1996 by and
among INTERMEDIA CAPITAL MANAGEMENT IV, L.P., a California limited partnership,
as general partner ("ICM-IV"), GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation ("GECC") as the preferred limited partner (the "Preferred Limited
Partner") with respect to, and only with respect to, a portion of its interest
and as a limited partner with respect to the remainder of its interest, all as
set forth on Exhibit 1 hereto, and the limited partners listed on the signature
pages hereto, who together with such other persons or entities who hereafter
shall be admitted as additional or substituted limited partners pursuant to the
terms hereof, all of which shall be listed on Exhibit 1 hereto, collectively
shall be referred to as the "Limited Partners," as amended as of November 27,
1996, is hereby amended and restated in its entirety as of August 5, 1997, by
and among INTERMEDIA CAPITAL MANAGEMENT, LLC, a Delaware limited liability
company, as general partner ("ICM LLC" or the "General Partner"), ICM-IV, as a
Limited Partner, GECC and the other Limited Partners listed on Exhibit 1
hereto. Unless otherwise specifically set forth herein, the term Limited
Partners shall include the Preferred Limited Partner. The General Partner and
the Limited Partners are collectively referred to as the Partners and
individually as a Partner.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Assignment and Assumption Agreement of
Partnership Interests dated as of April 5, 1997, and subject to the conditions
precedent contained therein, ICM-IV assigned a portion of its general partner
interest in the Partnership to ICM LLC;
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WHEREAS, the Partners desire to admit ICM LLC to the Partnership as a general
partner;
WHEREAS, following the admission of ICM LLC to the Partnership, ICM-IV
desires to withdraw as a general partner of the Partnership and to convert its
remaining interest in the Partnership to a limited partner interest, which
limited partner interest shall include ICM-IV's right to participate in the 20%
carried interest specified in Sections 3.1(k)(5)(A) and 3.3(d)(4) of this
Agreement and its right to the Administration Fee specified in Section 4.6(a)
of the this Agreement (the "LP Interest");
WHEREAS, pursuant to that certain Contribution Agreement dated as of August
5, 1997, TCI of Spartanburg, Inc. transferred a $4.8 million limited partner
interest in the Partnership to ICM-IV, as reflected on Exhibit 1 hereto;
WHEREAS, the Partners consented to the preceding actions in that certain
Consent of Partners of InterMedia Capital Partners IV, L.P. dated as of
February 7, 1997; and
WHEREAS, the Partners desire to amend and restate this Agreement to reflect
the preceding actions and other related amendments;
NOW THEREFORE, in consideration of the mutual promises and agreements herein
made and intending to be legally bound, the Partners hereby agree as follows:
ARTICLE 1
General Provisions
1.1 Formation of the Partnership. The Partners hereby admit ICM LLC as a
general partner of the Partnership, acknowledge the withdrawal of ICM-IV as a
general partner of the partnership immediately thereafter and the conversion of
ICM-IV's remaining interest in the Partnership to the LP Interest, and continue
a limited partnership (the "Partnership") pursuant to the California Revised
Limited Partnership Act (the "Act"). The Partnership shall continue without
interruption as a limited partnership pursuant to the Act. The persons and
entities listed as Limited Partners on Exhibit 1 to this Agreement shall
continue as Limited Partners upon execution of this Agreement.
1.2 Name. The name of the Partnership shall be: InterMedia Capital
Partners IV, L.P. The name of the Partnership may be changed by the General
Partner upon compliance with applicable laws and after notice by the General
Partner to the Limited Partners.
1.3 Principal Place of Business. The principal place of business of the
Partnership shall be 235 Montgomery Street, Suite 420, San Francisco,
California 94104. The principal place of business of the Partnership may be
changed by the General Partner after notice to the Limited Partners.
1.4 Agent for Service of Process. The agent for service of process for the
Partnership and his address shall be Robert J. Lewis, 235 Montgomery
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Street, Suite 420, San Francisco, CA 94104. The agent for service of process
of the Partnership may be changed by the General Partner upon notice to the
Limited Partners.
1.5 Business of the Partnership.
(a) The Partnership was organized for and continues to exist for the purpose
of directly or indirectly making equity and debt investments in, including
acting as a general partner and/or a limited partner of InterMedia Partners IV,
L.P., a California limited partnership ("IP-IV") and various partnerships which
operate cable television systems (each an "Investing Partnership"), and
operating cable television systems and to engage in all necessary and
appropriate activities and transactions as the General Partner may deem
necessary, appropriate or advisable in connection therewith, provided, however,
the Partnership will not make any investments, nor maintain any offices outside
of the United States. Prior to January 1, 1996, the Partnership had no
material assets or liabilities and had not engaged in any material business
activities.
(b) Pending the investment of Partnership funds as described in Section
1.5(a), and the distribution of funds as described in Section 3.3, the
Partnership may invest in certificates of deposit and overnight time deposits
in commercial banks with capital and surplus over $500 million, commercial
paper, money market funds, repurchase agreements and U.S. Treasury bills and
other government obligations and any other short-term, investment grade highly
liquid investments.
(c) The Partnership may enter into, deliver and perform all contracts,
agreements and other undertakings and engage in all activities and transactions
that are necessary or appropriate to carry out the foregoing purposes. Without
limiting the foregoing, the Partnership may:
(i) exercise all rights, powers, privileges, and other incidents of
ownership or possession with respect to Partnership property and investments;
(ii) borrow or raise money and secure the payment of any obligations
of the Partnership, IP-IV or an Investing Partnership by mortgage upon, or
pledge or hypothecation of, all or any part of the assets of the Partnership,
IP-IV or an Investing Partnership;
(iii) engage personnel, whether part-time or full-time and do such
other acts as the General Partner may reasonably deem necessary or advisable
in connection with the maintenance and administration of the Partnership,
IP-IV or an Investing Partnership and their investments; and
(iv) engage attorneys, independent accountants, investment bankers,
consultants or such other persons for the Partnership, IP-IV or an Investing
Partnership as the General Partner may deem necessary or advisable.
1.6 Term of the Partnership. The term of the Partnership shall be from the
date the Certificate of Limited Partnership was filed with the
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California Secretary of State until December 31, 2007, unless the Partnership
is earlier dissolved pursuant to Article 7.
ARTICLE 2
Capital Contributions, Withdrawals and Capital Accounts
2.1 Contributions of Capital.
(a) In General. The committed capital contributions of the Partners shall
be contributed in cash, in the respective amounts set forth next to each
Partner's name on Exhibit 1 attached hereto in the manner provided by Section
2.1(f). Notwithstanding the foregoing, committed capital contributions shall
be contributed in the form of property pursuant to the Greenville/Spartanburg
Contribution Agreement and the IPWT Contribution Agreement (both as defined on
Exhibit 1 hereto). The General Partner shall contribute an amount of capital
to the Partnership such that the General Partner's capital contribution will be
at least one one-thousandth of one percent (.001%) of the aggregate capital
contributions of all of the Partners, a portion of which may be contributed in
the form of a note as set forth on Exhibit 1 hereto.
(b) General Partner as Limited Partner. The General Partner shall also be a
Limited Partner to the extent that it purchases an interest as a Limited
Partner or it purchases or becomes a transferee of all of or any part of the
interest of a Limited Partner, and to such extent shall be treated in all
respects as a Limited Partner, and the consent of the Limited Partners to such
a purchase or transfer and admission of the General Partner as a Limited
Partner need not be obtained; provided, however, the General Partner shall not
be entitled to consent as a Limited Partner on those matters set forth in
Section 4.7(b)(iv). The General Partner's capital contributions referred to in
Sections 2.1(a) and 2.1(e) hereof will be made in its capacity as the General
Partner and such capital contribution as the General Partner will not entitle
the General Partner to any rights of a Limited Partner.
(c) Additional Limited Partners. Until the aggregate committed capital
contributions to the Partnership total $335,000,000 (not including the
preferred limited partner interest of the Preferred Limited Partner), and
subject to the condition that each new Limited Partner shall execute a
signature page of this Agreement, which execution shall be deemed to represent
the execution of a counterpart of this Agreement, and certain other agreements
in connection with its subscription, and such Limited Partner meets the
suitability requirements imposed on the original Limited Partners pursuant to
the subscription agreements, the General Partner may admit one or more
additional Limited Partners and may appropriately amend this Agreement to
reflect such admissions, only with the consent of seventy percent (70%) in
interest of the Limited Partners. Admission of a new Limited Partner shall not
be a cause for dissolution of the Partnership. Upon the aggregate committed
capital contributions to the Partnership equaling $335,000,000 (not including
the preferred limited partner interest of the Preferred Limited Partner), the
General Partner may admit any additional Limited Partners to increase the
aggregate committed capital contributions beyond $335,000,000 only with the
consent of one hundred
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percent (100%) in interest of the Limited Partners or accept any additional
commitment to make capital contributions from the Limited Partners only with
the consent of ninety percent (90%) in interest of the Limited Partners;
provided, however, that the General Partner shall offer, on a pro rata basis,
preemptive rights in connection with any additional cash capital contributions
to the existing Limited Partners and any such additional commitments to make
cash capital contributions shall be on terms no more favorable than those
offered to the existing Limited Partners. The Limited Partners will have
fifteen (15) days from the date of the written notice to exercise such
preemptive rights.
(d) Additional Contributions by Limited Partners. Until the aggregate
committed capital contributions to the Partnership total $335,000,000 (not
including the preferred limited partner interest of the Preferred Limited
Partner), the General Partner shall permit one or more Limited Partners to make
additional contributions to the Partnership until July 31, 1997 and may
appropriately amend this Agreement to reflect such additional contributions,
without the consent of any Limited Partner. A Partner which desires to make
such additional contributions during such period shall notify the General
Partner of its desire to do so not later than fifteen (15) days before such
proposed contribution.
(e) Additional Contributions by General Partner. The General Partner shall
from time to time make additional capital contributions to the extent required
to cause its aggregate capital contributions to equal at least one
one-thousandth of one percent (.001%) of the aggregate capital contributions of
all Partners. Any such additional capital contribution required of the General
Partner shall be made within ten (10) days of the capital contribution of the
Limited Partner(s) giving rise to such requirement.
(f) Payment of Capital Contributions. The capital contributions to be
contributed in the form of property pursuant to the Greenville/ Spartanburg
Contribution Agreement or the IPWT Contribution Agreement shall be made at the
time and in the manner set forth in those agreements which in the case of the
Partners contributing assets pursuant to those agreements shall represent their
entire commitment. In no event shall the TCI Entities be required to
contribute more than forty-nine percent (49%) of the total capital
contributions to the Partnership (excluding the capital contributions of the
Preferred Limited Partner with respect to the Preferred Limited Partnership
Interest). Except as otherwise agreed to by the Partnership and any Partner,
the provisions of this Section 2.1(f) shall apply to all committed capital
contributions to be made in cash. Included in the first capital call by the
Partnership, the Partners will pay the portion of their committed capital
contributions necessary to pay the organizational expenses of the Partnership
up to a maximum of $300,000 (in aggregate). The committed capital
contributions of the Limited Partners shall be paid on fifteen (15) business
days written notice in the following manner: (i) as the General Partner
determines is necessary or appropriate for meeting the funding requirements of
the Partnership or to comply with the Partnership's obligations to make capital
contributions to IP-IV or any Investing Partnership, (ii) commencing on January
1, 1996, on the first day of each calendar quarter of each year to the extent
determined necessary by the General Partner for the payment of Partnership
expenses or the reimbursement of the General Partner for Partnership expenses
described in Section 3.2; and (iii) as necessary to pay the Administration Fee
as set
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forth in Section 4.6. The amount to be paid by each Partner in respect of each
such capital call shall be determined by first requiring any additional Partner
admitted to the Partnership pursuant to Section 2.1(c) (and any other Partner
to the extent of any non-pro rata increase in its capital commitment pursuant
to Section 2.1(d)) ("New Partner") to pay an amount such that the proportion of
capital contributions paid by such New Partner in relation to the committed
capital contributions of such New Partner is the same as the proportion of
capital contributions previously made by the other Partners, other than
Partners who contributed property pursuant to the Greenville/Spartanburg
Contribution Agreement and the IPWT Contribution Agreement, in relation to the
committed capital contributions of such other Partners, and then by dividing
each Partner's committed capital contribution by the aggregate committed
capital contributions of all the Partners and multiplying such fraction by the
total remaining amount of capital to be called. In the event a Partner
executes and contributes a promissory note in respect of its capital
commitment, any payment of principal pursuant to such note shall constitute a
funding of its capital contribution. No capital contributions for the
Partnership or for investments in Investing Partnerships will be called by the
General Partner after December 31, 2000. References herein to a Partner's
capital contribution shall mean the amount of cash or the principal amount of
any note contributed by the General Partner or the value of property
contributed as set forth in the Greenville/Spartanburg Contribution Agreement
or the IPWT Contribution Agreement.
(g) General Partner Obligations. The General Partner shall not be
personally obligated to contribute cash or other assets to the Partnership to
make up any reduction in the Capital Accounts of the Limited Partners either
during the term of the Partnership or upon dissolution, subject to the
obligation of the General Partner to return to the Partnership certain
distributions as provided in the Act.
(h) Limited Partner Obligations. Limited Partners shall not be personally
obligated for the debts, liabilities and obligations of the Partnership or of
any other Partner, except that, any other provision of this Agreement to the
contrary notwithstanding, each Limited Partner shall only be obligated to make
its full capital contribution to the Partnership in the amount set forth in
Exhibit 1 hereto to the extent required by this Section 2.1, and each Limited
Partner (and any former Limited Partner) shall be obligated to return to the
Partnership distributions only to the extent provided in section 15666 of the
Act.
(i) Return of Certain Distributions. If upon the liquidation of the
Partnership pursuant to Section 7.3 hereof, the Partners have not received the
full amount described in Sections 3.3(d)(1), 3.3(d)(2) and 3.3(d)(3) hereof
(such deficiency being referred to as the "Shortfall"), then notwithstanding
anything in this Agreement to the contrary, including Section 2.1(g), ICM-IV
shall be obligated to contribute to the Partnership the lesser of:
(A) the amount necessary to provide the Partnership with sufficient
funds to allow the Partnership to make distributions in an amount equal to
the Shortfall; and
(B) an amount equal to the sum of all distributions made to ICM-IV
pursuant to Section 3.3(a) which are attributable to
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allocations of income and gain pursuant to Section 3.1(k)(5)(A) ("Override
Tax Distributions"), but not in excess of the Retrievable Tax Benefit.
For purposes of this Section 2.1(i), the term "Retrievable Tax Benefit" means
an amount equal to the excess, if any, of the Override Tax Distributions over
ICM-IV's net aggregate actual tax liability arising out of allocations of
income and gain pursuant to Section 3.1(k)(5)(A). Such tax liability shall be
computed by taking into account any offsets, allowable for Federal income tax
purposes, against such allocations for (y) allocations of loss and deduction to
ICM-IV pursuant to Section 3.1(j)(4)(A) and (z) any loss or deduction arising
out of any payment to be made under this Section 2.1(i).
2.2 Withdrawals of Capital Accounts. No Partner shall be entitled to
withdraw any amount from its Capital Account, other than as provided in this
Section 2.2.
(a) Withdrawals in General. A Limited Partner may not withdraw from the
Partnership in whole or in part prior to dissolution of the Partnership, except
(i) as required by Section 2.2(b), or (ii) with the unanimous written consent
of all of the Partners. In the event a Limited Partner elects to withdraw with
the consent of the Partners, or upon withdrawal of a Limited Partner pursuant
to Section 2.2(b), the Partnership Interest of such Limited Partner shall be
withdrawn in its entirety and shall be valued pursuant to Section 4.4 as of the
date of withdrawal. Notwithstanding the foregoing, the value of the Preferred
Limited Partnership Interest shall be deemed to be the amount of such Partner's
Capital Contribution plus the Preferred Return, reduced by any distributions
received by the Preferred Limited Partner prior to such valuation. The Capital
Account of such withdrawing Limited Partner shall be paid for in the manner
provided in this Section 2.2(a) as expeditiously as possible, at a time
determined by the General Partner. The General Partner shall not be required
to sell, liquidate, pledge or encumber any Partnership asset or security to
effect such withdrawal. The General Partner shall have sole discretion to make
the payment in respect of the Capital Account of any withdrawing Limited
Partner in cash or, at the option of the General Partner, with a promissory
note bearing interest at a rate per annum equal to the rate announced from time
to time by Bank of America NT&SA as its prime rate. The promissory note will
be payable only after the payment of all third party debt and payment of
preferred return to the Preferred Limited Partner and any payments on such
promissory notes will be paid pari passu with payments due to the other
Partners (excluding the Preferred Limited Partner) with respect to the event
giving rise to such payment to the withdrawing Limited Partner upon the earlier
of (i) final dissolution of the Partnership, (ii) sale of all or substantially
all of the Partnership's assets, or (iii) December 31, 2007. For purposes of
the foregoing, the amount to be paid pari passu shall be determined by treating
the amount that would have been paid to each Partner if no payment were made to
the withdrawing Partner as if it also were represented by a promissory note and
pro rating the amount available for distribution to each Partner and
withdrawing Partner on that basis. Any portion of any payments made to a
withdrawing Limited Partner in kind pursuant to this Section 2.2 shall be made,
based upon the balance in a Partner's Capital Account as of the date of
withdrawal, ratably in proportion to the value that each security or asset then
held by the
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Partnership, including any interest in an Investing Partnership, determined
pursuant to Section 4.4, bears to the value of all assets of the Partnership
determined pursuant to Section 4.4.
(b) Required Withdrawals. The General Partner may terminate the interest of
any Limited Partner in the Partnership, with cause, at the end of any calendar
month upon fifteen (15) days prior written notice. For purposes of this
Agreement, "cause" shall be determined by the General Partner and shall mean
the following: (i) the continued participation of such Limited Partner is
likely, in the sole judgment of the General Partner, to cause the Partnership
or the General Partner to register as an investment company or elect to be a
"business development company" under the Investment Company Act of 1940 (the
"Investment Company Act"), the General Partner or any of its partners to
register as an investment adviser under the Investment Advisers Act of 1940, or
the Partnership or any Partner to violate any law, or (ii) such Limited Partner
fails to make a required capital contribution and the General Partner requires
withdrawal pursuant to Section 8.4(b). Notwithstanding the foregoing,
termination of the Partnership Interest of any Limited Partner as the result of
an Adverse Regulatory Development (as defined in Section 7.6(b)) shall be
treated as set forth in Section 7.6.
(c) Effective Date of Withdrawal. For purposes of this Agreement, the
effective date of a Partner's withdrawal shall mean the last day of the
calendar month in which the General Partner consents to such withdrawal
pursuant to Section 2.2(a) or such Partner's notice period lapses pursuant to
Section 2.2(b).
(d) Effect of Withdrawal. In the event of the withdrawal of any Limited
Partner pursuant to this Section 2.2, the withdrawing Limited Partner shall not
otherwise share in the income, gains and losses of the Partnership from the
valuation date of its Partnership Interest and shall not have any other rights
under this Agreement other than payment to it of its Capital Account as
revalued pursuant to Section 4.5. The interest of a Limited Partner who
withdraws pursuant to this Section 2.2 shall not thereafter be included in
calculating the percentage in interest of the Limited Partners required to take
any action under this Agreement.
(e) Limitations on Withdrawal of Capital Account. The right of any
withdrawn Partner or its legal representatives to have distributed the Capital
Account of such Partner pursuant to this Section 2.2 is subject to the
provision by the General Partner for all Partnership liabilities in accordance
with section 15666 of the Act, and for estimates for contingencies and
expenses. The unused portion of any such estimates shall be distributed after
the General Partner shall have determined that the need therefor shall have
ceased.
(f) Interest on Capital Accounts. No interest or compensation shall be paid
on or with respect to the Capital Account or capital contributions of any of
the Partners, except as otherwise expressly provided herein.
2.3 Capital Accounts. The Partnership shall maintain for each Partner a
separate capital account (a "Capital Account") in accordance with the capital
accounting rules of section 704(b) of the Internal Revenue Code of 1986 (the
"Code"), and the regulations thereunder (the "Income Tax
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Regulations") (including particularly section 1.704-1(b)(2)(iv) of the Income
Tax Regulations).
(a) In general, under such capital accounting rules (but subject to any
contrary requirements of the Code and the Income Tax Regulations), a Partner's
Capital Account shall be (i) increased by the amount of money and the fair
market value (determined in accordance with Section 4.4 or as otherwise
provided in the Greenville/Spartanburg Contribution Agreement or the IPWT
Contribution Agreement) of other property (net of liabilities secured by such
contributed property that the Partnership is considered to take subject to or
assume under section 752 of the Code) contributed by the Partner to the
Partnership and allocations to the Partner of Partnership income and gain (or
items thereof), including income and gains exempt from tax, and (ii) decreased
by the amount of money and the fair market value (determined in accordance with
Section 4.4) of other property distributed (net of liabilities secured by such
distributed property that the Partner is considered to take subject to or
assume under section 752 of the Code) to the Partner by the Partnership and
allocations to the Partner of Partnership loss and deduction (or items
thereof), including Partnership expenditures not deductible in computing its
taxable income and not properly chargeable to Capital Account. For purposes of
making allocations of all items of income, gain, loss and deduction and for
purposes of crediting or charging distributions to Capital Accounts, the
Preferred Limited Partner shall be considered to have a Capital Account
separate and distinct from its Capital Account attributable to its additional
interest as a Limited Partner.
(b) When Partnership property is revalued by the General Partner pursuant to
Section 4.5 or distributed in kind (whether in connection with dissolution and
liquidation of the Partnership or otherwise), the Capital Accounts of the
Partners first shall be adjusted to reflect the manner in which the unrealized
income, gain, loss or deduction inherent in such property (that has not
previously been allocated to Capital Accounts) would be allocated among the
Partners if there were a taxable disposition of such property for its fair
market value (determined in accordance with Section 4.4 and taking into account
section 7701(g) of the Code) and such income, gain, loss or deduction had been
recognized for federal income tax purposes immediately upon such distribution
or the event requiring such revaluation.
(c) Where section 704(c) of the Code applies to Partnership property or when
Partnership property is revalued pursuant to section 1.704-1(b)(2)(iv)(f) of
the Income Tax Regulations, Capital Accounts of the Partners shall be adjusted
in accordance with section 1.704-1(b)(2)(iv)(g) of the Income Tax Regulations
as to allocations to the Partners of depreciation, depletion, amortization and
gain or loss, as computed for book purposes with respect to such property.
(d) The General Partner shall direct the Partnership's accountant to make
all necessary adjustments in each Partner's Capital Account as required by the
rules of section 704(b) of the Code and the regulations thereunder.
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ARTICLE 3
Profits and Losses; Distributions
3.1 Profits and Losses. A Partner's distributive share of the Partnership's
total income, gain, loss, deduction or credit (or items thereof), which total
shall be as shown on the annual federal income tax return prepared by the
Partnership's accountants or as finally determined by the Internal Revenue
Service or the courts, and as modified by the capital accounting rules of
section 704(b) of the Code and the Income Tax Regulations thereunder as
implemented by Section 2.3, as applicable, shall be determined as provided in
this Section 3.1.
(a) Except as otherwise provided in this Section 3.1, items of Partnership
income, gain, loss, deduction and credit shall be allocated among the Partners
in proportion to their respective actual capital contributions (each, a
"Partnership Interest").
(b) Solely for tax purposes, in determining each Partner's allocable share
of the taxable income or loss of the Partnership, depreciation, depletion,
amortization and gain or loss with respect to any contributed property, or with
respect to revalued property where Partnership property is revalued pursuant to
section 1.704-1(b)(2)(iv)(f) of the Income Tax Regulations, shall be allocated
to the Partners under the remedial method as provided in section 1.704-3(d) of
the Income Tax Regulations.
(c) Notwithstanding anything to the contrary in this Section 3.1, if there
is a net decrease in Partnership Minimum Gain or Partner Nonrecourse Debt
Minimum Gain (as such terms are defined in sections 1.704-2(b) and
1.704-2(i)(2), respectively, of the Income Tax Regulations) during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such year (and, if necessary, for subsequent
years), to the extent required by, and in the manner provided in, section
1.704-2 of the Income Tax Regulations. This provision is intended to be a
"minimum gain chargeback" within the meaning of sections 1.704-2(f) and
1.704-2(i)(4) of the Income Tax Regulations and shall be interpreted and
implemented as therein provided.
(d) Subject to the provisions of Section 3.1(c), but otherwise
notwithstanding anything to the contrary in this Section 3.1, if any Partner's
Capital Account has a deficit balance in excess of such Partner's obligation to
restore its Capital Account balance, computed in accordance with the rules of
section 1.704-1(b)(2)(ii)(d) of the Income Tax Regulations (including such
Partner's share of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain as provided in sections 1.704-2(g) and 1.704-2(i)(5) of the Income
Tax Regulations), then sufficient amounts of income and gain (consisting of a
pro rata portion of each item of Partnership income, including gross income,
and gain for such year) shall be allocated to such Partner in an amount and
manner sufficient to eliminate such deficit as quickly as possible. This
provision is intended to be a "qualified income offset" within the meaning of
section 1.704-1(b)(2)(ii)(d) of the Income Tax Regulations and shall be
interpreted and implemented as therein provided.
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(e) Subject to the provisions of section 704(c) of the Code, Sections 3.1(b)
through 3.1(d) and Sections 3.1(k)(1) and 3.1(l)(1) hereof, gain recognized (or
deemed recognized under the provisions hereof) upon the sale or other
disposition of Partnership property, which is subject to depreciation
recapture, shall be allocated to the Partner who was entitled to deduct such
depreciation.
(f) Except as otherwise provided in Section 3.1(j), if and to the extent any
Partner is deemed to recognize income as a result of any loans described herein
pursuant to the rules of sections 1272, 1273, 1274, 1274A, 7872, 482 or 483 of
the Code, or any similar provision now or hereafter in effect, any
corresponding resulting deduction of the Partnership shall be allocated to the
Partner who is charged with the income. Subject to the provisions of section
704(c) of the Code and Sections 3.1(b) through 3.1(d) hereof, if and to the
extent the Partnership is deemed to recognize income as a result of any loans
described herein pursuant to the rules of sections 1272, 1273, 1274, 1274A,
7872, 482 or 483 of the Code, or any similar provision now or hereafter in
effect, such income shall be allocated to the Partner who is entitled to any
corresponding resulting deduction.
(g) Except as otherwise required by law, tax credits shall be allocated
among the Partners pro rata in accordance with the manner in which Partnership
profits are allocated to the Partners under this Section 3.1, as of the time
the credit property is placed in service or if no property is involved, as of
the time the credit is earned. Recapture of any tax credit required by the
Code shall be allocated to the Partners in the same proportion in which such
tax credit was allocated.
(h) Except as provided in Sections 3.1(f) and 3.1(g) or as otherwise
required by law, if the Partnership Interests of the Partners are changed
hereunder during any taxable year, all items to be allocated to the Partners
for such entire taxable year shall be prorated on the basis of the portion of
such taxable year which precedes each such change and the portion of such
taxable year on and after each such change according to the number of days in
each such portion, and the items so allocated for each such portion shall be
allocated to the Partners in the manner in which such items are allocated as
provided in this Section 3.1 during each such portion of the taxable year in
question.
(i) Any special allocation of income or gain pursuant to Section 3.1(d)
shall be taken into account in computing subsequent allocations of income and
gain pursuant to this Section 3.1 so that the net amount of all such
allocations to each Partner shall, to the extent possible, be equal to the net
amount that would have been allocated to each such Partner pursuant to the
provisions of this Section 3.1 if such special allocations of income or gain
under Section 3.1(d) had not occurred.
(j) (1) Items of deduction and loss attributable to recourse liabilities of
the Partnership (within the meaning of section 1.752-1(a)(1) of the Income
Tax Regulations but excluding Partner nonrecourse debt within the meaning of
section 1.704-2(b)(4) of the Income Tax Regulations) shall be allocated among
the Partners in accordance with the ratio in which the Partners
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share the economic risk of loss (within the meaning of section 1.752-2 of the
Income Tax Regulations) for such liabilities.
(2) Items of deduction and loss attributable to Partner nonrecourse
debt within the meaning of section 1.704-2(b)(4) of the Income Tax
Regulations shall be allocated to the Partners bearing the economic risk of
loss with respect to such debt in accordance with section 1.704-2(i) of the
Income Tax Regulations.
(3) Items of deduction and loss attributable to Partnership
nonrecourse liabilities within the meaning of section 1.704-2(b)(1) of the
Income Tax Regulations shall be allocated among the Partners proportionately
in accordance with their Partnership Interests.
(4) All other items of deduction or loss ("Net Loss") shall be
allocated (A) First, if allocations of items of income or gain have been made
to any Partner under Section 3.1(k)(5)(A), then to such Partner in the amount
of, and proportionate to, the amount of such items of income or gain; (B)
Second, among any New Partners (as defined in Section 2.1(f)), an amount of
Net Loss sufficient to reduce its Capital Account balance to what it would
have been had all Partners been admitted to the Partnership as of the date
hereof, with losses so allocated to each New Partner in the proportion which
such New Partner's capital contribution bears to the capital contributions of
all New Partners; and (C) Third, among (i) the Partners (other than the
Preferred Limited Partner), proportionately in accordance with their
Partnership Interests, except that Net Loss shall not be allocated to any
Partner to the extent it would create a deficit balance in excess of such
Partner's obligation to restore its capital account balance, computed in
accordance with the rules of section 1.704-1(b)(2)(ii)(d) of the Income Tax
Regulations and including such Partner's share of Partnership Minimum Gain and
Partner Nonrecourse Debt Minimum Gain as provided in sections 1.704-2(g) and
1.704-2(i)(5) of the Income Tax Regulations and (ii) thereafter to the
Preferred Limited Partner to the extent of its Capital Account balance until
the balance of its Capital Account is equal to zero (but never reduced below
zero). Any Net Loss which cannot be allocated to a Partner because of the
limitation set forth in the previous sentence shall be allocated first to the
other Partners to the extent such other Partners would not be subject to such
limitation and second any remaining amount to the Partners in the manner
required by the Code and the Income Tax Regulations.
(k) Subject to the provisions of Sections 3.1(c) through 3.1(j), items of
income and gain shall be allocated to the Partners in the following priority:
(1) First, to the Preferred Limited Partner, (i) first, in an amount
equal to the excess of the amount of losses previously allocated to it
pursuant to Section 3.1(j)(4) over
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the amount of income previously allocated to it pursuant to this clause (i)
of Section 3.1(k)(1) and (ii) thereafter in the amount of any distributions
of the Preferred Return made to it pursuant to Section 3.3(d)(1)(i).
(2) Second, to those Partners who have had items of loss or
deductions allocated to them under section 3.1(j)(1), in the amount of, and
proportionate to, the amount of such items of loss or deduction (provided,
however, that no such allocation shall be made with respect to previously
allocated items of loss or deduction to the extent of any income and gains
previously deemed recognized under Section 2.3(b)).
(3) Third, if allocations of Net Loss have been made to the Partners
under Section 3.1(j)(4)(C)(i), then in the amount of, and proportionate to,
the amount of such Net Loss (provided, however, that no such allocation shall
be made with respect to previously allocated Net Loss to the extent of any
income and gains previously deemed recognized under Section 2.3(b)).
(4) Fourth, to the Partners (other than the Preferred Limited
Partner), in amounts sufficient, after taking into account all amounts
previously distributed to such Partner and including such Partner's actual
capital contributions, to yield a pre-tax internal rate of return of fifteen
percent (15%), on such Partner's actual capital contributions and in
proportion to the amount required for each Partner.
(5) Fifth, (A) twenty percent (20%) of the balance to ICM-IV; and
(B) eighty percent (80%) of the balance among the Partners (other than the
Preferred Limited Partner) in proportion to their relative Partnership
Interests;
(l) Notwithstanding Section 3.1(k), but subject to the provisions of Section
3.1(c) through 3.1(j), gain which is recognized (or deemed to be recognized)
upon the sale, exchange or other disposition of all or substantially all of the
assets of the Partnership or upon the dissolution of the Partnership shall be
allocated in the following order:
(1) First, to the Preferred Limited Partner, in an amount sufficient
to bring its Capital Account balance (computed in the same manner as provided
parenthetically in subparagraph 2 below) to an amount equal to the amount of
its accrued and unpaid Preferred Return and its unrepaid capital
contribution.
(2) Second, to the Partners (other than the Preferred Limited
Partner) having deficit balances in their Capital Accounts (computed after
giving effect to all contributions, distributions, allocations and other
Capital Account adjustments for all taxable years, including the year during
which such liquidation or dissolution occurs and including each Partner's
share of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain
as provided in sections 1.704-2(g) and 1.704-2(i)(5) of the Income Tax
Regulations), to the extent of, and in proportion to, those deficits; and
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(3) Thereafter, so as to bring the relationship of the credit
balance in each Partner's (other than the Preferred Limited Partner) Capital
Account (computed in the same manner as provided parenthetically in the
preceding subparagraph (2)), as nearly as possible, the amount such Partner
would receive in a distribution, if the distribution were made in accordance
with the provisions of Section 3.3(d).
(m) Unless otherwise specified by the instruments of transfer, any Partner
transferring part of its interest pursuant to this Agreement shall be deemed to
be transferring that portion of its share in future allocations of the
Partnership attributable to the portion of its total Capital Account
transferred by it.
(n) All matters not expressly provided for by the terms of this Agreement
concerning the valuation of assets of the Partnership, the allocation of
profits, gains, deductions, losses and credits among the Partners, including
taxes thereon, and accounting procedures shall be reasonably determined by the
General Partner, whose determination shall be final and conclusive as to all of
the Partners, provided that such action does not materially decrease the amount
or postpone the timing of any distributions, including distributions upon
liquidation, that any Partner would otherwise be entitled to receive pursuant
to this Agreement.
(o) Any financing or refinancing of TCI Debt (as defined in section 2.3(b)
of the Greenville/Spartanburg Contribution Agreement) shall be a "non-recourse"
liability of the Partnership as such term is used in Section 1.752-1(a)(ii) of
the Income Tax Regulations.
3.2 Partnership Expenses. To the extent not paid by IP-IV or an Investing
Partnership, the Partnership shall pay (or reimburse the General Partner or
ICM-IV for) all expenses relating to the Partnership's business, investments or
reports not required to be borne by the General Partner or ICM-IV pursuant to
Section 4.6(b), including, without limitation, the following expenses:
organization and offering expenses, placement fees, interest, legal,
accounting, consulting and investment banking fees and expenses of the
Partnership in connection with its investments, preparation of federal and
state tax returns, cost of Partnership meetings (if any), all costs of
acquisition and disposition of assets, securities or investments (including
legal, overhead expenses, accounting, banking and advisory fees, expenses and
commissions), all costs of research, market and statistical information which
are paid to unrelated third parties in connection with a potential transaction,
directors and advisers fees paid to unrelated third parties, fees and expenses
incurred in connection with investigation, prosecution, or defense of any
claims by or against the Partnership, all costs of insurance and any
extraordinary or other expenses which the General Partner reasonably determines
should properly be considered related to the investment of the Partnership's
assets or the operations of the Partnership or its assets or investments.
3.3 Distributions.
(a) Subject to Section 3.3(e), prior to dissolution of the Partnership, the
General Partner shall, to the extent of available cash, distribute in cash, no
later than ninety (90) days after the close of each fiscal year,
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the excess, if any, of (i) forty percent (40%) of an amount equal to the
excess, if any, of the cumulative items of income and gain over the cumulative
items of deduction, loss and credit (grossed up to a deduction equivalent at a
forty percent (40%) tax rate) of the Partnership as shown on the federal income
tax returns of the Partnership for all periods over (ii) the sum of amounts
previously distributed pursuant to Section 3.3(a), 3.3(b) or 3.3(c), provided
that the General Partner shall make such distributions on a quarterly basis as
soon as possible to address any Partner's quarterly payments of estimated tax
if such early distribution is feasible in terms of available cash and accurate
anticipation of the fiscal year's net tax position. The General Partner, in
its reasonable discretion, may adjust the rate of distribution provided in this
Section 3.3(a) to reflect any changes made to the ordinary income and capital
gains tax rates of the Code which may have the effect of requiring the Partners
to pay more or less taxes on ordinary income or capital gains generated by
Partnership activities. Distributions pursuant to this Section 3.3(a) shall be
made to the Partners ratably in the proportions in which the net recognized
income and gains (but not income and gains deemed recognized under Section
2.3(b)) for such fiscal periods have been allocated to them for federal income
tax purposes pursuant to Section 3.1. For purposes of this Section 3.3(a), in
the case of property contributed to the capital of the Partnership, items of
income, gain, deduction and loss shall be computed as if the tax basis of such
property were equal to its fair market value at the time of such contribution
as determined in the Greenville/Spartanburg Contribution Agreement or the IPWT
Contribution Agreement, or as otherwise provided herein.
(b) Subject to Sections 3.3(a) and 3.3(e), prior to dissolution of the
Partnership, the General Partner shall distribute the net proceeds from the
sale or other disposition of any investment, after payment of all indebtedness
with respect thereto and less reasonable estimates for the Partnership's
expenses, liabilities, contingencies and working capital requirements, no later
than ninety (90) days after the close of such sale.
(c) Subject to the mandatory distribution provisions set forth in Sections
3.3(a) and 3.3(b) and to Section 3.3(e), prior to dissolution of the
Partnership, the General Partner shall distribute to the Partners no less
frequently than on a quarterly basis cash received by the Partnership from
operations, any transaction not described in Section 3.3(b), and any dividends,
interest or other cash distributions from any corporation or other entity in
which the Partnership has invested and which is not necessary in the reasonable
judgment of the General Partner for the payment of Partnership expenses or debt
or the maintenance of reasonable reserves for the Partnership's expenses,
liabilities, contingencies and working capital requirements. With the consent
of seventy percent (70%) in interest of the Limited Partners, and with the
consent of the Preferred Limited Partner with respect to distributions to such
Partner, distributions may be made in assets of the Partnership other than
those described in the preceding sentence.
(d) Distributions pursuant to Sections 3.3(b) and 3.3(c) shall be made as
follows:
(1) First, to the Preferred Limited Partner (i) in payment of its
accrued Preferred Return until it has received
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the full amount thereof, and (ii) then in payment of its unrepaid capital
contribution. For purposes of this Agreement, the "Preferred Return" shall
be an amount equal to eleven and three quarters percent (11.75%), per annum,
compounded semi-annually, multiplied by its unrepaid capital contributions;
for purposes of calculating Preferred Return for a subsequent period, any
accrued and unpaid Preferred Return shall be added to the principal amount of
the unrepaid capital contribution; and
(2) Second, to those Partners (other than the Preferred Limited
Partner) that have not received distributions pursuant to this Section 3.3
equal to their actual capital contributions, in proportion to their relative
actual capital contributions until the Partners (other than the Preferred
Limited Partner) have received distributions pursuant to this Section 3.3
equal to their actual capital contributions; and
(3) Third, to those Partners (other than the Preferred Limited
Partner) that have not received distributions pursuant to this Section 3.3 of
amounts sufficient to yield a pre-tax internal rate of return of fifteen
percent (15%) on their actual capital contributions, until such time that
they have each received distributions pursuant to this Section 3.3 of amounts
sufficient to yield a pre-tax internal rate of return of fifteen percent
(15%) on their actual capital contributions and in proportion to the amount
required for each such Partner; and
(4) Fourth, twenty percent (20%) of the balance to ICM-IV and eighty
percent (80%) of the balance to the Partners (other than the Preferred
Limited Partner) in proportion to their relative Partnership Interests.
All distributions made pursuant to this Section 3.3 (other than pursuant to
Section 3.3(d)(1)) shall be treated as a return of Partners' capital
contributions until their respective actual capital contributions are returned
in full. Except as otherwise provided herein, no Partner shall have a priority
over any other Partner as to returns of capital contributions or as to
compensation as a Partner by way of income.
(e) Any other provision of this Agreement to the contrary notwithstanding,
no distribution shall be made which would render the Partnership insolvent or
which is prohibited by the terms of any indebtedness of the Partnership, IP-IV
or an Investing Partnership, provided, however, that the General Partner shall
use its reasonable best efforts to obtain the right to make tax distributions
pursuant to Section 3.3(a) above under the terms of any such indebtedness.
ARTICLE 4
Management of Partnership
4.1 Management Generally. Except as otherwise provided herein, the business
of the Partnership shall be conducted and managed exclusively by
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the General Partner and administered by ICM-IV under the supervision of the
General Partner. The General Partner will not be obligated to do or perform
any act in connection with the business of the Partnership not expressly set
forth in this Agreement. The General Partner (including Robert J. Lewis as
chief executive officer of the managing member of the General Partner) shall
devote such time, effort and skill to the business and affairs of the
Partnership, IP-IV and any Investing Partnerships and their management as may
be reasonable and necessary or appropriate for the welfare and success of the
Partnership, IP-IV and the Investing Partnerships. The General Partner shall
have the rights and powers and be subject to all the restrictions and
liabilities of a partner in a partnership without limited partners.
4.2 Specific Authority of the General Partner. Except as otherwise provided
in this Agreement, the General Partner shall have full power and authority to
do all things and to perform all acts that it reasonably deems necessary or
advisable to conduct the business affairs of the Partnership, IP-IV and the
Investing Partnerships, or incidental thereto, without the consent of any
Limited Partner, including, without limitation, full power and authority to
take any of the following actions, each of which is hereby expressly authorized
by the parties hereto:
(a) Enter into contracts and perform the obligations of the Partnership
undertaken in such contracts, including, without limitation, any contract
entered into with the General Partner or a Limited Partner pursuant to Section
6.2;
(b) Make all decisions with respect to the investigation, selection,
negotiation, structure, acquisition, operation and disposition of the assets of
the Partnership, IP-IV or any Investing Partnership; and employ such agents,
consultants, advisers, directors, attorneys, accountants, investment bankers
and other personnel as may be necessary or appropriate for the business of the
Partnership, IP-IV or the Investing Partnerships on such terms and conditions
as the General Partner shall determine are reasonable; provided, however, that
concurrent with the formation of a new Investing Partnership or any partnership
which provides financing to any Investing Partnership, the General Partner will
obtain an opinion of counsel, reasonably satisfactory to the Advisory
Committee, that such Investing Partnership is taxable as a partnership.
(c) Open, maintain and close bank accounts and draw checks and other orders
for the payment of money;
(d) Collect accounts receivable, income and other payments due to the
Partnership, IP-IV or any Investing Partnership;
(e) Keep the books and records of the Partnership and hire independent
certified public accountants;
(f) Pay accounts payable and other expenses of the Partnership;
(g) Transfer, hypothecate, compromise or release any Partnership claim;
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(h) Administer the financial affairs of the Partnership, IP-IV and any
Investing Partnership, make tax and accounting elections, including an election
or elections under section 754 of the Code (which election shall be made upon
the request of any Limited Partner), file all required tax returns relating to
the Partnership, pay the liabilities of the Partnership and distribute the
profits of the Partnership to the Partners;
(i) Borrow money on behalf of the Partnership, IP-IV or any Investing
Partnership and make, issue, accept, endorse and execute promissory notes,
drafts, bills of exchange, guarantees, and other instruments and evidences of
indebtedness in the name of the Partnership, IP-IV or any Investing
Partnership, including, without limitation, in connection with and as part of
purchasing assets and securities for the Partnership, IP-IV or any Investing
Partnership and mortgage, pledge, assign or grant security interests in all or
any part of the assets then owned or thereafter acquired by the Partnership,
IP-IV or any Investing Partnership in connection therewith;
(j) Cause the Partnership, IP-IV and any Investing Partnership to purchase
and maintain any insurance, in amounts and on terms customary in the industry,
covering the potential liabilities of the Partnership, the General Partner and
its members, partners, employees and agents, and the officers, directors and
employees of the members of the General Partner, as well as the potential
liabilities of any person serving at the request of the Partnership, IP-IV or
any Investing Partnership as a director, officer, employee, agent, partner,
consultant or adviser of any corporation or other entity in which the
Partnership, IP-IV or any Investing Partnership has an investment; provided,
however, the General Partner shall cause the Partnership to purchase insurance
for the liabilities of directors and officers to the extent such insurance is
available on commercially reasonable terms;
(k) Commence or defend litigation that pertains to the Partnership, IP-IV or
any Investing Partnership or any assets of the Partnership, IP-IV or any
Investing Partnership and investigate potential claims;
(l) Execute and file fictitious business name statements and similar
documents;
(m) Admit additional Limited Partners and permit additional capital
contributions as provided in Sections 2.1(c) and 2.1(d) (and appropriately
amend this Agreement to reflect such admissions and additional capital
contributions) without the consent of any Limited Partner except as provided in
Section 2.1(c) and admit an assignee of a Limited Partner's interest to be a
substituted Limited Partner in the Partnership (and appropriately amend this
Agreement and the Partnership records to reflect such assignment), without the
consent of any Limited Partner;
(n) Terminate the Partnership pursuant to Section 7.2(vi), (vii) or (viii);
and
(o) Execute and deliver all documents and instruments necessary or advisable
to carry out the foregoing.
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4.3 Reports. The General Partner will distribute annual audited financial
statements of the Partnership, prepared by a "big six" accounting firm, to the
Limited Partners within ninety (90) days after the end of each Partnership
fiscal year. The General Partner will distribute unaudited quarterly progress
reports on the Partnership's investment activities to the Limited Partners
within forty-five (45) days of the end of the first three fiscal quarters. The
General Partner will distribute monthly income statements of the Partnership to
the Limited Partners as soon as practicable after such statements are prepared,
but in no event more than twenty-five (25) days after the end of such month.
The General Partner will distribute any default notices with respect to the
debt of the Partnership, IP-IV or any Investing Partnership to the Limited
Partners within five (5) days of the receipt thereof from a lender or the
delivery thereof by the Partnership, IP-IV or any Investing Partnership to a
lender.
4.4 Valuation of Assets.
(a) The General Partner shall value the assets of the Partnership whenever
the General Partner may, in its sole discretion, deem appropriate, and whenever
else required by this Agreement or under the Code, and on any date provided for
in this Agreement on which valuation is required due to the withdrawal of a
Limited Partner pursuant to Section 2.2 or Section 7.6, and shall within ninety
(90) days of each such date furnish to each Limited Partner a statement showing
the value of each system and the net worth of the Partnership. If the
Partnership is dissolved and the assets are not sold, the General Partner shall
value the assets of the Partnership as of the date of dissolution and shall as
promptly as practicable thereafter furnish the Limited Partners with the
statement showing the value of each system and the net worth of the
Partnership. The value of any system of the Partnership determined by the
General Partner pursuant to this Section 4.4(a) shall be conclusive and binding
on all of the Partners and all parties claiming through or under them except as
provided in Section 4.4(c).
(b) In the event of the withdrawal of a Limited Partner from the Partnership
pursuant to Section 2.2 or Section 7.6, the General Partner shall within a
reasonable period of time notify the Limited Partners in writing of the
valuation of the total amount of the assets of the Partnership attributable to
the withdrawing Limited Partner.
(c) If (i) any of the Limited Partners object in writing to the valuation of
the systems and/or net worth of the Partnership made pursuant to Section 4.4(a)
by the General Partner or (ii) the withdrawing Limited Partner objects in
writing to the valuation of the systems and/or net worth of the Partnership
made pursuant to Section 4.4(b) by the General Partner, in either case, within
thirty (30) days after the General Partner has furnished the Limited Partners
with the statement provided by Section 4.4(a) or 4.4(b) as of such date, the
General Partner shall give notice to all the Limited Partners of such objection
and the General Partner shall attempt to determine an alternative value for the
systems and net worth of the Partnership (with respect to a valuation pursuant
to Section 4.4(a)) or the assets of the Partnership attributable to the
withdrawing Partner (with respect to a valuation pursuant to Section 4.4(b)).
If the General Partner and (i) seventy percent (70%) in interest of the Limited
Partners (with respect to a valuation pursuant to 4.4(a)) or (ii) the
withdrawing Limited Partner (with respect to a valuation pursuant to Section
4.4(b)) are unable to
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determine an alternative value for the systems and/or net worth of the
Partnership within sixty (60) days after such objections, the matter in dispute
shall be submitted to three appraisers of which one shall be chosen by the
General Partner, one by (x) seventy percent (70%) in interest of the Limited
Partners (with respect to a valuation pursuant to Section 4.4(a)) or (y) the
withdrawing Limited Partner (with respect to a valuation pursuant to Section
4.4(b)) and the third by means of the written agreement of the two appraisers
selected by such Partners, provided that such third individual is not
associated with any of the Partners. Each appraiser appointed in accordance
with this paragraph shall complete its appraisal within sixty (60) days of its
appointment. The two appraisals closest to one another shall be averaged and
such valuation shall be final and binding on the Partners. If performed in
connection with Section 4.4(a), the Partnership shall bear all of the costs and
expenses of such appraisal. The Partnership and the withdrawing Limited
Partner shall each bear one-half (1/2) of the costs and expenses of such
appraisal if performed in connection with Section 4.4(b).
4.5 Revaluation of Partnership Assets. The General Partner shall revalue
Partnership property to its fair market value (determined as provided in
Section 4.4) as of the date when any additional or existing Partner makes a
non-pro rata contribution of money or property to the Partnership in exchange
for an interest in the Partnership or when the Partnership distributes money or
property to a withdrawing or continuing Partner in exchange for all or part of
its interest in the Partnership.
4.6 Administration Fee and Expenses.
(a) Administration Fee. The Partnership will pay to ICM-IV in cash during
the period the Partnership is in existence, as full payment for administrative
services rendered to the Partnership, an annual administration fee (the
"Administration Fee") equal to one percent (1%) per annum of the total capital
contributions that have been funded by Partners to the Partnership (other than
with respect to the preferred limited partner interest of the Preferred Limited
Partner) determined as of the beginning of each calendar quarter in each fiscal
year of the Partnership; provided, however, if the acquisition of a cable
system by the Partnership, IP-IV or an Investing Partnership is made with debt
financing of more than two-thirds of the purchase price of such cable system,
capital contributions of one-third of such purchase price shall be deemed to
have been made and the Administration Fee shall be paid on such deemed
contributions. At such time as any such debt financing is replaced with actual
capital contributions of the Partners, the Administration Fee shall be based on
such actual capital contributions rather than a deemed contribution for such
amount. Notwithstanding the foregoing, in no event shall an Administration Fee
be payable on any amounts in excess of the total capital commitments to the
Partnership. Except with respect to acquisitions of cable systems with debt
financing as set forth above, ICM-IV agrees that it will not receive an
administration fee from the Investing Partnerships of the Partnership greater
than one percent (1%) of the capital contributions to the Investing
Partnerships and the Partnership. The Administration Fee for the first year on
any capital contribution shall be paid in advance upon payment of such capital
contribution and shall begin to accrue from the closing of the first cable
television system purchased by the Partnership. The Administration Fee for all
subsequent periods shall be paid quarterly, in advance, one-
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fourth of one percent (.25%) per quarter, on the first business day of each
calendar quarter, beginning with the first calendar quarter that begins after
the first anniversary of the payment of such capital contribution. Any
Administration Fee due for the period from the expiration of such first year
and the next scheduled payment of the Administration Fee shall be paid at such
next payment date. The Administration Fee shall be offset, on a cumulative
basis, by any administration fee received by ICM-IV or any affiliate of ICM-IV
from IP-IV or any Investing Partnership. The Administration Fee for the
Partnership's last annual fiscal year, if less than a full year, shall be
prorated based upon the number of days in such period.
(b) General Partner Expenses. The General Partner and ICM-IV will bear and
be charged with the following expenses: salaries and other expenses (including
bonuses and health, welfare, retirement and other benefits) and overhead
expenses (including rents, travel and costs) of the General Partner, ICM-IV,
and the chief operating officer and the directors of development, finance and
accounting of ICM-IV and their related staffs.
4.7 Rights of the Limited Partners.
(a) No Control. The Limited Partners shall not take part in the control,
management, direction or operation of the business of the Partnership, nor,
except as specified in Section 4.7(b) and Section 4.9, have the right, power or
authority to be consulted with respect to investment decisions or the other
affairs of the Partnership nor have the power to sign documents for or
otherwise bind the Partnership and shall have no right to consent on any matter
except those expressly set forth in this Agreement or otherwise specified in
Section 4.7(b) and Section 4.9.
(b) Consents. The Limited Partners shall have a right to consent only with
respect to those matters expressly set forth in this Agreement and the matters
listed below, which actions may be taken only with the written consent of the
General Partner (except with respect to item (iv) which action may be taken
without the consent of the General Partner and except to the extent provided in
Section 4.9) and the affirmative consent of the percent in interest of the
Limited Partners so indicated. The Preferred Limited Partner shall not be
entitled to consent, initiate or cause any sale of the Partnership's cable
systems or otherwise vote on or take action with respect to any matters in this
Agreement, including without limitation Section 4.9 hereof, unless required by
law and the preferred limited partnership interest of the Preferred Limited
Partner shall not be included in either the numerator or the denominator of any
computation of the required percentage in interest of the Limited Partners
hereunder for all such purposes (except where the consent of the Preferred
Limited Partner is required); provided, that the Preferred Limited Partner
shall be entitled to consent on any matter which requires the unanimous consent
of the Limited Partners and provided further that the Preferred Limited
Partner's consent shall be required for any settlement with a tax authority
which would affect the income, gain, loss, deductions or credits allocated to
it. For any matters on which the Preferred Limited Partner is not entitled to
consent, the required consent shall be the required percent of interest of the
Limited Partners other than the Preferred Limited Partner Interest of the
Preferred Limited Partner. In the event one Limited Partner holds seventy
percent (70%) of the interests of the Limited Partners, all references in this
Agreement to seventy percent (70%) shall be changed to seventy-five
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percent (75%). For purposes of this Agreement a Limited Partner's interest in
the Partnership shall be determined on the basis of its actual capital
contributions. The Limited Partners shall be entitled to consent on the
following matters:
(i) The amendment of this Agreement pursuant to Section 9.3 hereof
upon the affirmative consent of seventy percent (70%) in interest of the
Limited Partners; provided, however, that this Agreement may not be amended
without the approval of the Partner being affected if the amendment would
change the allocation to any Partner of any income or loss or distribution of
cash or property from that which is provided or contemplated herein (other
than as a result of any dilution in their Partnership Interests resulting
from the admission of any new Limited Partners as contemplated by Section
2.1(c) or additional contributions by Partners pursuant to Section 2.1(d) or
2.1(e) hereof, as Section 2.1(c), Section 2.1(d) or 2.1(e) may be amended
from time to time);
(ii) The amendment of the allocations and distributions to the
Limited Partners other than as permitted by Section 3.1 upon the affirmative
consent of each Partner adversely affected;
(iii) The admission of a new general partner where there is an
existing General Partner upon the affirmative consent of seventy percent
(70%) in interest of the Limited Partners;
(iv) The approval of a transaction in which the General Partner or
any of its affiliates has an actual or potential conflict of interest with
the Limited Partners or the Partnership and which is not permitted by Section
6.1 or 6.2 or otherwise expressly permitted by the terms of this Agreement,
upon the affirmative consent of seventy percent (70%) in interest of the
disinterested Limited Partners; provided, however, the transactions set forth
on Exhibit 2 hereto may be consummated by the Partnership, IP-IV or any
Investing Partnership without any further consent of the Limited Partners;
(v) The continuation of the Partnership to effect an orderly
dissolution of the Partnership in accordance with Article 7 upon the
affirmative consent of seventy percent (70%) in interest of the Limited
Partners;
(vi) The agreement to enter into any Investing Partnership or make
any investments in excess of $15,000,000 upon the affirmative consent of
seventy percent (70%) in interest of the Limited Partners; provided, however,
each of the acquisitions set forth on Exhibit 2 hereto may be consummated by
the Partnership, IP-IV or any Investing Partnership without any further
consent of the Limited Partners;
(vii) The merger of or consolidation of the Partnership with any
other entity upon the affirmative consent of each Partner;
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(viii) The taking of any act that would make it impossible to carry
on the business of the Partnership except upon the dissolution of the
Partnership in accordance with this Agreement upon the affirmative consent of
each Partner;
(ix) Confessing a judgment against the Partnership, IP-IV or any
Investing Partnership in excess of one hundred fifty thousand dollars
($150,000) or settling a judgment against the Partnership, IP-IV or any
Investing Partnership in excess of three hundred thousand dollars ($300,000)
upon the affirmative consent of each Partner;
(x) Using any funds or assets of the Partnership other than for the
benefit of the Partnership upon the affirmative consent of each Partner;
(xi) Taking any action that would subject the Limited Partners to
personal liability as a general partner in any jurisdiction upon the
affirmative consent of each Partner;
(xii) The making of, execution of, or delivery of any general
assignment for the benefit of the Partnership's creditors upon the
affirmative consent of each Partner;
(xiii) Any matter in the partnership agreement of IP-IV or any
Investing Partnership that requires the consent of the Limited Partners or of
the limited partner or a general partner other than the managing general
partner of IP-IV or an Investing Partnership; provided, however, that the
consent required under this clause (xiii) shall require the approval of the
applicable percentage of Limited Partners that would have been required if
such consent were required under this Agreement or if no percentage is
specified hereunder, seventy percent (70%); and provided further, that the
amount or timing of any distributions to the Partnership from any Investing
Partnership or IP-IV may not be changed in a manner inconsistent with the
amount or timing of distributions under this Agreement without the unanimous
consent of the Limited Partners and the General Partner;
(xiv) The approval of a transaction with Tele-Communications, Inc.
or any of its affiliates in an amount greater than five hundred thousand
dollars ($500,000) or transactions less than five hundred thousand dollars
($500,000), which exceed an aggregate of two million dollars ($2,000,000), in
any twelve (12) month period, upon the affirmative consent of a majority in
interest of the Limited Partners (other than TCI or any of its affiliates);
provided, however, that purchases of programming and equipment on no less
favorable to the Partnership than arms'-length terms and in the ordinary
course of business shall not require any approval by the Limited Partners;
and provided further, that the transactions set forth on Exhibit 2 hereto may
be consummated by the Partnership, IP-IV or any Investing Partnership without
any further consent of the Limited Partners;
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(xv) The approval of any waiver of rights of the Partnership under
the IPWT Contribution Agreement if such waiver would result in the
Partnership forgoing rights valued in excess of five percent (5%) of the
total consideration paid by the Partnership for the contribution of
partnership interests and debt transferred under such agreement; and
(xvi) The designation of management personnel by the managing
general partner of ICM-IV for allocation of the "IRR Bonus" provided for in
the Incentive Bonus Program for management employees of the general partner
of ICM-IV upon the affirmative consent of seventy percent (70%) in interest
of the Limited Partners, which consent shall not unreasonably be withheld, in
the event that the Limited Partners have not received a fifteen percent (15%)
cumulative internal rate or return on their investment upon termination of
the Partnership (calculated in accordance with Section 3.3(d)(3)); provided,
however, that if TCI or an affiliate of TCI votes against such designation
and a majority in interest of the Limited Partners (excluding TCI) agree to
the designation, then such designation will be deemed approved.
(c) Annual Operating Plan. The General Partner shall prepare and submit to
the Limited Partner having the largest interest as a Limited Partner in the
Partnership for approval (which approval shall not be unreasonably withheld)
each year an annual operating plan for the Partnership (including IP-IV and the
Investing Partnerships) which shall also set forth the amounts to be expended
by the Partnership, IP-IV or any Investing Partnership for capital expenditures
in the following categories: system rebuild, plant extensions, converters and
related equipment, plant maintenance and miscellaneous expenditures. A copy of
the final approved operating plan shall be sent to each Limited Partner.
Notwithstanding any provision of this Agreement to the contrary, the General
Partner, as general partner of IP-IV and each Investing Partnership shall cause
IP-IV and each Investing Partnership not to make any expenditures which would
cause expenditures in any enumerated category of the annual operating plan to
exceed the approved amount for such category by more than ten percent (10%)
without the consent of the largest Limited Partner as set forth above.
(d) Advisory Committee. The Partnership will form an Advisory Committee
(the "Advisory Committee") consisting of one representative from each of the
seven (7) Limited Partners with the largest aggregate interests in the
Partnership (for purposes of selection of the Advisory Committee, (i) each of
the interests of GECC as a Preferred Limited Partner and a Limited Partner
shall be aggregated, (ii) each of the interests of NationsBanc Investment Corp.
and Atlantic Equity Corporation as Limited Partners shall be aggregated, (iii)
each of the interests of Mellon Bank, N.A., as Trustee for Third Plaza Trust
and the interests of Mellon Bank, N.A., as Trustee for Fourth Plaza Trust as
Limited Partners shall be aggregated, and (iv) each of the interests of the IP
Holdings Affiliates (as that term is defined in Exhibit 1 hereto) shall be
aggregated). For purposes of this Agreement, the determination of aggregate
Limited Partner interests in the Partnership shall be based on the aggregate
Limited Partner interests in the Partnership held by a Limited Partner and any
affiliates thereof, which aggregate holdings shall entitle such Limited Partner
and affiliates, if any, to one representative on the Advisory Committee. The
General Partner will be responsible for administration of the Advisory
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Committee and shall have the right to attend any meeting of the Advisory
Committee, but shall be excluded from Advisory Committee membership. The
General Partner will distribute to the Advisory Committee monthly profit and
loss statements of the Partnership and any other monthly financial statements
prepared for management personnel. The General Partner will distribute to the
Advisory Committee quarterly profit and loss statements, balance sheets and
statements of cash flow of the Partnership. The General Partner will
distribute to the Advisory Committee the proposed annual operating plan at the
same time that it is submitted pursuant to Section 4.7(c) to the Limited
Partner having the largest interest in the Partnership, and each member of the
Advisory Committee shall have the right to consult with the General Partner
regarding such plan for ten (10) days after receipt. In addition, the General
Partner will distribute the foregoing reports to any Limited Partner that would
be entitled to be on the Advisory Committee but due to regulatory requirements
is precluded from membership on the Advisory Committee. The Advisory Committee
(including any Limited Partner that because of regulatory requirements is
precluded from membership on the Advisory Committee) will meet quarterly in a
location approved by the General Partner and a majority of the members of the
Advisory Committee, and will consult with and advise the General Partner with
respect to the business of the Partnership and perform such other advisory
functions as may be requested by the General Partner from time to time;
provided, however, that the Advisory Committee shall not perform any functions
or duties, which, if performed by a Limited Partner, would constitute
participation in the control of the business of the Partnership under the Act.
The doing of any act or the failure to do any act by any member of the Advisory
Committee, acting in its capacity as such, the effect of which may cause or
result in loss, liability, damage or expense to the Partnership or any Partner,
shall not subject such member to any liability to the Partnership or to any
Partner, except that such member may be so liable if it acted fraudulently or
in bad faith or was guilty of willful misconduct or a breach of this Agreement.
The Partnership shall pay all reasonable expenses of each member of the
Advisory Committee incurred in connection with attendance at Advisory Committee
meetings or otherwise in the performance of his or her duties as a member of
the Advisory Committee. In the event that interests in the Partnership are
converted into or exchanged for interests in a corporation (other than in
connection with a sale of interests in the Partnership), the General Partner
will take all actions necessary to cause a director of such corporation at all
times to be a person designated by each Limited Partner entitled to a
representative on the Advisory Committee, so long as such Limited Partner owns
an interest in such corporation.
(e) Dissolution or Bankruptcy of a Limited Partner. In the event of the
dissolution, liquidation, bankruptcy or insolvency of a Limited Partner, the
interest of such Limited Partner will continue at the risk of the Partnership
business until the dissolution and winding up of the Partnership. The legal
representative of a Limited Partner who has dissolved, liquidated or been
declared bankrupt or become insolvent will succeed to such Limited Partner's
interest in the Partnership, but will not be a substituted Limited Partner
without the prior written consent of the General Partner which consent may be
granted or denied in the sole and absolute discretion of the General Partner
without the consent of any Limited Partner.
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4.8 Successor General Partner.
(a) Removal of the General Partner.
(i) Seventy percent (70%) in interest of the Limited Partners (or a majority
in interest of the non-TCI Limited Partners with respect to Section
4.8(a)(i)(D)) may initiate removal of the General Partner by delivering written
notice to the General Partner (x) specifying one or more grounds for removal
that the Limited Partners believe exist, and, (y) if the notice specifies
grounds for removal described in Section 4.8(a)(i)(A), selecting an individual
to arbitrate whether such grounds exist in accordance with Section 4.8(a)(ii).
For purposes of this Section 4.8(a), grounds for removal means any of the
following:
(A) conduct by or on behalf of the General Partner in connection
with the Partnership that constitutes willful misconduct, bad faith, gross
negligence, reckless disregard of its duties, criminal intent, or a material
breach of this Agreement;
(B) acceleration of the senior debt of the Partnership, IP-IV, any
Investing Partnership or any operating company for any reason;
(C) the occurrence of any event of default that permits acceleration
of the Partnership's, IP-IV's, any Investing Partnership's or any operating
company's senior debt, if such event of default has not been waived or cured
within sixty (60) days of the date the General Partner knew or should have
known of its occurrence; or
(D) the death or permanent disability of Leo J. Hindery, Jr.
("Hindery"), or the refusal by Hindery, in the event that he ceases to be
employed by TCI or an affiliate of TCI at any time prior to the sale of all
or substantially all of the assets of the Partnership, to return to a
position with the Partnership such that his relationship with the Partnership
is substantially similar to the relationship he had with the Partnership
prior to February 7, 1997.
(ii) The existence of grounds for removal with respect to matters described
in Section 4.8(a)(i)(A) shall be determined by arbitration. Within ten (10)
business days after its receipt of the Limited Partners' notice described in
Section 4.8(a)(i), the General Partner shall send a written notice to the
Limited Partners selecting a second individual to arbitrate whether grounds for
removal exist. If the General Partner fails to select a second arbitrator
within the time period specified in the preceding sentence, the existence of
grounds for removal shall be determined by the arbitrator selected by the
Limited Partners (and such arbitrator shall be deemed to be the "arbitration
panel" for purposes of this Section 4.8(a)). If the General Partner selects a
second arbitrator within the specified time period, the existence of grounds
for removal shall be determined by an arbitration panel consisting of the
arbitrator selected by the Limited Partners, the arbitrator selected by the
General Partner, and a third arbitrator selected by the two arbitrators
previously selected. None
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of the arbitrators selected pursuant to this Section 4.8(a) shall be associated
or affiliated with any of the Partners or with any member of the General
Partner. The arbitration panel shall conduct its proceedings in San Francisco
in accordance with the commercial rules of the American Arbitration Association
then in effect and the determination of such panel shall be final and binding
upon and enforceable against all Partners.
(iii) If the required percent of the Limited Partners (with respect to
matters described in Section 4.8(a)(i)(B), (C) or (D) or the arbitration panel
(with respect to matters described in Section 4.8(a)(i)(A)) determines that
grounds for removal exist, then:
(A) A successor general partner of the Partnership shall be selected
by seventy percent (70%) in interest of the Limited Partners. If the Limited
Partners are unable to agree on a successor general partner within sixty (60)
days after the determination under Section 4.8(a)(i)(B) or (C) that grounds
for removal exist, the Partnership shall be dissolved in accordance with
Article 7. If the Limited Partners are unable to agree on a successor
general partner after the determination under Section 4.8(a)(i)(D) that
grounds for removal exist, the General Partner shall continue to serve as
general partner of the Partnership until a successor general partner is
selected.
(B) Promptly following the determination that grounds for removal
exist, or upon the designation of a successor general partner in accordance
with Section 4.8(c), the Partners and the members of the General Partner
shall undertake to obtain any government consents and approvals necessary to
permit the actions described in the following paragraphs of this Section
4.8(a)(iii) to be taken. Such actions shall be taken as soon as practicable
after all such consents and approvals have been obtained; provided, however,
that if all such consents and approvals shall not have been obtained within
one (1) year after the determination by the arbitration panel that grounds
for removal exist, the Partnership shall be dissolved in accordance with
Article 7.
(C) The successor general partner designated in accordance with
Section 4.8(a)(iii)(A) or Section 4.8(c) shall be admitted as the general
partner of the Partnership and the General Partner shall be converted into a
limited partner of the Partnership as set forth in Section 4.8(a)(iii)(D).
The successor general partner shall, beginning on the date of admission, have
the same authority and obligations that the removed general partner had and
shall have such rights to distributions and allocations as are determined by
the unanimous consent of the Limited Partners and the removed General
Partner. Upon the admission of the successor general partner, the rights to
distributions and allocations of the Partners shall be modified to the extent
required to reflect the rights accorded to the successor general partner.
The admission of a successor general partner to the Partnership shall be
deemed to have occurred prior to the effective date of the conversion of the
General Partner.
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(D) Upon removal of the General Partner as general partner of the
Partnership, its interest in the Partnership shall be converted to a limited
partnership interest and the Partnership Agreement shall be amended to
reflect the events set forth in this Section 4.8.
(E) The removed General Partner shall remain liable for any
obligations and liabilities incurred by it as general partner prior to the
effective date of its removal but shall be free of any and all obligations or
liabilities incurred on account of the activities of the general partner of
the Partnership from and after that time.
(b) Withdrawal of the General Partner.
(i) For purposes of this Section 4.8(b), "withdrawal of the General Partner"
shall include the occurrence of any of the following:
(A) any event that causes the General Partner to cease to be the
General Partner;
(B) the bankruptcy, insolvency, or appointment of a trustee to
manage the affairs of the General Partner or Robert J. Lewis;
(C) the dissolution, whether or not required by operation of law or
judicial decree, of the General Partner;
(D) the death of Robert J. Lewis;
(E) the incapacity of Robert J. Lewis such that he is unable to
perform substantially all of his duties as chief executive officer of the
managing member of the General Partner for a period of nine (9) months; or
(F) any other event that causes the General Partner to cease to be
controlled directly or indirectly through one or more intermediaries by
Robert J. Lewis
(ii) Upon the withdrawal of the General Partner, the provisions of Section
4.8(a)(iii) shall be complied with, however, the time frames set forth in
Sections 4.8(a)(iii)(A) and (B) shall run from the date of withdrawal of the
General Partner.
(c) Hindery's Return to the Partnership. In the event that Hindery ceases
to be employed by TCI or an affiliate of TCI at any time prior to the sale of
all or substantially all of the assets of the Partnership, Hindery may elect,
in his sole discretion, directly or indirectly to return to a position with the
Partnership such that his relationship with the Partnership is substantially
similar to the relationship he had with the Partnership prior to February 7,
1997. In the event that Hindery elects to return to such a position with the
Partnership and his return requires removal of the General Partner, then
Hindery shall designate a successor general partner and the Partners shall
comply with the provisions contained in Sections 4.8(a)(iii)(B) through
4.8(a)(iii)(E) to replace the General
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Partner (or any successor general partner then in existence) with the successor
general partner designated in accordance with this Section 4.8(c) by Hindery.
(d) General Provision Regarding Approvals by the Limited Partners. For
purposes of any provision of this Section 4.8 that refers to the approval of a
specified interest of the Limited Partners, any Limited Partner that is an
affiliate of the General Partner shall not be entitled to consent or approve
the matter at issue and such Limited Partner's interest shall not be taken into
account in determining whether the matter at issue has been approved by Limited
Partners holding the requisite interest.
(e) Right To Recover Damages. (i) Removal of the General Partner pursuant
to this Section 4.8 shall not limit the right of the Partnership or any Partner
to recover any direct compensatory damages suffered by such person as a result
of any breach of this Agreement by the General Partner or any other person.
(ii) Removal of the General Partner, except pursuant to the terms of this
Agreement, shall entitle the General Partner to receive, in cash compensation,
damages for all direct and indirect economic consequences of such removal,
including, but not limited to, damages for all lost profits. Such removed
General Partner's interest in the Partnership shall be converted to a limited
partnership interest pursuant to Section 4.8(a)(iii)(D).
4.9 Sale Initiation Rights.
(a) Any time after July 31, 1999, Partners (other than Tele-Communications,
Inc. or any directly or indirectly controlled affiliate thereof which is a
Partner (collectively "TCI")) comprising twenty percent (20%) or more of the
Interests in the Partnership may petition the General Partner to review, report
on and recommend (or not) a sale of some or all of the Partnership's cable
systems.
(b) Any time after July 31, 2001, (i) Partners (other than TCI, the General
Partner and InterMedia Partners, a California limited partnership ("IP-I")),
comprising a majority or more of the Interests in the Partnership (other than
Interests in the Partnership held by TCI, the General Partner and IP-I) may
force a sale of one (1) or both of the Partnership's two significant cable
system clusters (i.e., (a) middle Tennessee and (b) eastern Tennessee, eastern
Georgia and western South Carolina), by sending a notice to such effect (the
"Sale Notice") to the General Partner; provided that TCI shall have a "right of
first offer" related thereto as provided in Section 4.9(d) and the terms of any
such sale shall be approved by Partners (other than TCI, the General Partner
and IP-I) comprising a majority or more of the Interests in the Partnership
(other than Interests in the Partnership held by TCI, the General Partner and
IP-I), provided that any Sale Notice must include the sale of all of the
systems in each cluster and shall include all significant clusters, or (ii)
Partners (including TCI, the General Partner and IP-I) comprising seventy
percent (70%) or more of
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the Interests in the Partnership may force a sale of some or all of the
Partnership's cable systems by sending a Sale Notice to the General Partner and
the terms of any such sale shall be approved by Partners (including TCI, the
General Partner and IP-I) comprising seventy percent (70%) or more of the
Interests in the Partnership unless such sale is to TCI in which case the
foregoing percentage required to approve the terms of the sale to TCI shall be
75%. The Sale Notice shall indicate which cable television systems are desired
to be sold and any desired price. The General Partner shall promptly respond
to the Partners that sent the Sale Notice (the "Sale Partners") with a good
faith proposal for effectuating the sale of the assets specified in the Sale
Notice, such proposal to be approved by the Sale Partners. Immediately upon
approval of such proposal, the General Partner shall use its best efforts to
effect the sale on such terms as soon as is reasonably practicable and the
General Partner will provide the Partners with monthly progress reports on the
sale process.
(c) In addition to Section 4.9(b), at any time, the General Partner may
elect to (i) sell all or substantially all of the Partnership's cable systems
subject to obtaining the consent of Partners (other than TCI) comprising a
majority or more of the Partnership Interests (other than Partnership Interests
held by TCI); provided that, if the General Partner makes an election to sell
pursuant to this Section 4.9(c)(i) prior to July 31, 2001, TCI shall have a
"right of first refusal" related thereto in accordance with the procedures set
forth in Section 4.9(e) or (ii) sell some or all of the Partnership's cable
systems subject to obtaining the consent of Partners (including TCI) comprising
at least seventy percent (70%) of the Partnership Interests unless the sale is
to TCI in which case the foregoing percentage shall be 75%.
(d) Before the Partnership shall offer to sell any of the Partnership's
cable television systems pursuant to Section 4.9(b)(i), the General Partner
shall (i) first deliver a notice to TCI offering to sell all such assets to TCI
and specifying the purchase price and other terms on which the General Partner
would propose to sell such assets to any third party (the date of such notice
being the "Notice Date") and (ii) deliver to each Limited Partner a copy of an
appraisal of any such cable television system conducted by an independent
appraisal firm to be selected by the General Partner to the reasonable
satisfaction of the Advisory Committee, provided, that such appraisal firm has
no current or pre-existing relationship with the General Partner or any of its
Affiliates other than transactions in which the appraisal firm (i) represents
the General Partner or any of its Affiliates as a buyer or seller, (ii)
represents the other party to a transaction with the General Partner or any of
its Affiliates as a buyer or seller or (iii) any other transaction in the
ordinary course of business with such appraisal firm on arm's-length terms.
Within thirty (30) days after the Notice Date, TCI may, by giving notice to the
General Partner elect, to purchase all such assets for such purchase price and
on such other terms specified in such notice and shall enter into an agreement
binding it to such purchase within ninety (90) days after its election to
exercise the right under such notice. If TCI fails to notify the General
Partner of its agreement to purchase all of such assets as of the end of such
thirty (30) day period, fails to enter into a purchase agreement within ninety
(90) days of such election date, or fails to purchase the assets within either
(i) one hundred fifty (150) days after entering into a purchase agreement or
(ii) the earlier of ten (10) days after all regulatory and franchise approvals
have been obtained or three hundred sixty (360) days after the Notice Date
(each an "Abandonment Date"), TCI will not have the right to purchase any of
such assets except as provided in the subsequent provisions of this Section
4.9(d) or if the failure to purchase such assets
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is due to a breach of such purchase agreement by the Partnership and, in the
event of such abandonment, the TCI affiliates who are Limited Partners will be
deemed to have approved any subsequent sale by the Partnership pursuant to the
terms of this Section 4.9(d); provided, however, that nothing contained herein
shall preclude TCI and its affiliates from participating in any auction of such
assets by the Partnership. If TCI elects not to or does not purchase such
assets offered in accordance with the terms of this Section 4.9(d), the General
Partner may thereafter sell such assets to any third party only at a price
equal to or greater than the price and on terms and conditions not materially
more favorable to the purchaser than those specified in the notice delivered
pursuant to this Section 4.9(d), provided that a binding agreement for such
sale is executed within two hundred ten (210) days after the Abandonment Date
and such sale shall be consummated within four hundred fifty (450) days of the
Abandonment Date and, provided, further that in the event TCI enters into a
purchase agreement with respect to such assets, but fails to close (other than
due to a breach of the agreement by the Partnership), then the Partnership will
be free to sell such assets at a price less than the price, and on terms and
conditions materially more favorable to the purchaser than those, agreed to
with TCI, but TCI will be permitted to participate in any auction by the
Partnership for such assets. If a binding agreement is not executed within
such two hundred ten (210) day period or such sale is not consummated within
such four hundred fifty (450) day period, then the Partnership shall be
required to again offer such assets to TCI pursuant to and must otherwise
comply with the terms of this Section 4.9(d) unless the Partnership had
previously entered into an agreement with respect to such assets and TCI had
failed to close such agreement due to failure to obtain regulatory or franchise
consents or due to a breach by TCI. The rights of TCI pursuant to this Section
shall terminate if TCI enters into a binding agreement with respect to any of
the Partnership's cable television systems and fails to close such purchase due
to its breach; provided that TCI and its affiliates may participate in any
auction by the Partnership of its assets.
(e) If the Partnership desires to sell any of its cable systems as
provided in Section 4.9(c)(i) to a third party pursuant to a bona fide written
offer (which shall set forth all material terms of the proposed sale but may be
subject to reasonable and customary conditions in the cable television
industry) by such third party to purchase such cable systems for cash, then the
Partnership shall first offer to sell such cable systems to TCI at the price
and on the other terms stated in such bona fide written offer. The
Partnership's offer to TCI shall be in writing and shall be accompanied by a
copy of the third party bona fide offer. TCI shall have thirty (30) days from
the date of receipt of such offer in which to accept it by giving written
notice of such acceptance to the General Partner. If TCI fails to accept the
Partnership's offer within such thirty (30) day period, the Partnership will be
free to sell such cable systems for a period of three hundred sixty (360) days
after the end of the thirty (30) day right of first refusal period, or such
longer or shorter period as may be specified in the original bona fide offer,
but only at a price and on terms not more favorable to the purchaser than those
contained in the bona fide offer. If TCI timely accepts the Partnership's
offer, TCI must enter into an agreement binding it to such purchase within
ninety (90) days after its acceptance of such offer and must purchase such
cable systems within either (i) one hundred fifty (150) days after entering
into a purchase agreement or (ii) the earlier of ten (10) days after all
regulatory and franchise
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approvals have been obtained or three hundred sixty (360) days after receipt of
the Partnership's offer, or in either case, such longer or shorter period as
may have been specified in the original bona fide offer. If TCI accepts the
Partnership's offer but fails to enter into a purchase agreement or fails to
purchase the cable systems, in either case within the respective periods
specified in the preceding sentence, then the Partnership may sell such cable
systems at a price and on terms not more favorable to the purchaser than those
contained in the bona fide written offer within the time period specified in
such offer or, if no time period is specified in the offer, within three
hundred sixty (360) days and TCI will not have the right to purchase any of
such cable systems within such period. Any sale to any third party pursuant to
this Section 4.9(e) shall not be connected in any way with any other
transaction (including the sale of any other assets) under which consideration
of any kind is transferred to the third party by the Partnership such that the
price purported to be paid for the Partnership's cable systems (as specified in
the bona fide offer) could overstate the value assigned thereto by the third
party.
(f) For purposes of this Section 4.9, all references to the Partnership's
cable systems shall mean any cable system in which the Partnership has an
ownership interest either directly or indirectly through IP-IV or any Investing
Partnership.
4.10 Nonvoting Interests. Notwithstanding anything to the contrary in this
Agreement, if (i) a Limited Partner or any affiliate of such Limited Partner is
subject to the Bank Holding Company Act of 1956, as amended, and Regulation Y
of the Board of Governors of the Federal Reserve System (the "FRB") promulgated
thereunder (such Limited Partner and any of its affiliates hereinafter
collectively referred to as a "BHC LP"), (ii) the limited partnership interests
of the Partnership (the "Interests") held by the BHC LP exceed 5.0% of the then
total outstanding Interests (exclusive of the Nonvoting Interests, as defined
below); and (iii) the BHC LP has not received the approval of the FRB to hold
more than 5.0% of the Interests, then the overline amount of the Interests in
excess of 5.0% shall constitute a separate class of limited partnership
interests hereinafter referred to as "Nonvoting Interests". In addition, the
aggregate amount of the Interests and Nonvoting Interests held by a BHC LP,
that has not received the approval of the FRB to hold more than 5.0% of the
Interests, shall at no time exceed 24.9% of the aggregate amount of all
outstanding Interests and Nonvoting Interests. The rights, privileges,
benefits and liabilities appertaining to the Nonvoting Interests shall be
identical in all respects to the rights, privileges, benefits and liabilities
appertaining to the Interests, except that (i) holders of Nonvoting Interests
shall not be entitled to vote upon or give consents in respect of any action by
the Partners, except those matters that, in the judgment of the BHC LP, acting
upon advice of legal counsel, would significantly and adversely affect the
rights or preference of its Interests or Nonvoting Interests, including but not
limited to the issuance of additional Interests or Nonvoting Interests; any
modification or amendment relating to the terms of its Interests, Nonvoting
Interests or this Agreement; or the dissolution of the Partnership and (ii) the
Nonvoting Interests (other than such Nonvoting Interests that are subject to
the exception set forth in the immediately preceding clause (i)) shall not be
included in either the numerator or the denominator of any computation of the
required percentage in interest of the Limited Partners hereunder for
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all such purposes (except where the consent of the holders of the Nonvoting
Interests is required).
ARTICLE 5
Tax Matters and Reports
5.1 Filing of Tax Returns. The General Partner, at the expense of the
Partnership, shall prepare and file, or cause the accountants of the
Partnership to prepare and file, all required tax returns, including a federal
information tax return in compliance with section 6031 of the Code and any
required state and local income tax and information returns for each tax year
of the Partnership. The General Partner shall act as the Tax Matters Partner
of the Partnership as that term is defined in section 6231(a)(7) of the Code.
5.2 Tax Reports to Current and Former Partners. Within ninety (90) days of
the end of each fiscal year, the Partnership shall prepare and mail, or cause
its accountants to prepare and mail, to each Partner and, to the extent
necessary, to each former Partner (or its legal representatives), a report
setting forth in sufficient detail such information as is required to be
furnished to the Partners by law (e.g., section 6031(b) of the Code and
regulations thereunder) and as shall enable such Partner or former Partner (or
his or its legal representatives) to prepare their respective federal and state
income tax or informational returns in accordance with the laws, rules and
regulations then prevailing. Partners subject to ERISA will receive
information necessary for them to calculate the fair market value of their
Partnership Interests (determined in accordance with Section 4.4).
5.3 Restriction on General Partner Activity With Respect to Publicly Traded
Partnerships. Without the consent of all of the Limited Partners, the General
Partner shall not have the authority on behalf of the Partnership to:
(a) list, recognize, or facilitate the trading of partnership interests (or
any interest therein) on any "established securities market" within the meaning
of section 7704 of the Code, or permit any of its affiliates to take such
actions, if as a result thereof the Partnership might be taxed for federal
income tax purposes as an association taxable as a corporation; or
(b) create for the partnership interests (or any interest therein) a
"secondary market (or the substantial equivalent thereof)" within the meaning
of section 7704 of the Code or otherwise permit, recognize or facilitate the
trading of such interests (or any interest therein) on any such market, or
permit any of its affiliates (or to the extent the General Partner has rights
with respect thereto, the selling agents or any of their affiliates) to take
such actions, if as a result thereof the Partnership might be taxed for federal
income tax purposes as an association taxable as a corporation.
5.4 Duties and Obligations of the General Partner With Respect to Publicly
Traded Partnerships. The General Partner shall monitor the transfers of
partnership interests to determine if such interests are being
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traded on an "established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of section 7704 of the
Code, and shall take (and cause its affiliates to take) all steps within its
power and authority as are reasonably necessary or appropriate to prevent any
such trading of interests.
5.5 Books and Records. Complete books and records accurately reflecting the
accounts, business, transactions and Partners of the Partnership shall be
maintained and kept by the General Partner at the Partnership's principal place
of business. The books and records of the Partnership required to be
maintained by section 15615 of the Act shall be open at reasonable business
hours on prior appointment for inspection and copying by the Partners.
Notwithstanding anything to the contrary in this Agreement, the General Partner
shall have the right to keep confidential from the Limited Partners for such
period of time as the General Partner deems reasonable, any information which
the Partnership is required by law or by agreement with a third party to keep
confidential and any information which relates to its purchasing of individual
items of programming, plant or equipment which it reasonably deems
confidential.
5.6 Fiscal Year. Except as may otherwise be required by the federal tax
laws, the fiscal year of the Partnership for both financial and tax reporting
purposes shall end on December 31.
5.7 Method of Accounting. The books and accounts of the Partnership shall
be maintained using the accrual method of accounting for financial reporting
purposes and for tax purposes and shall be annually audited by a "Big Six"
accounting firm (or a successor thereof). Those documents relating to
allocations of items of Partnership income, gain, loss, deduction or credit and
Capital Accounts shall be kept under federal income tax accounting principles
as provided herein.
ARTICLE 6
Conflicts of Interest; Indemnification; Exculpation
6.1 Outside Activities. Without the consent of seventy percent (70%) in
interest of the Limited Partners, the General Partner (and its members,
partners, employees, agents and affiliates, including, but not limited to,
Robert J. Lewis) may not begin the offer and sale of interests in other
enterprises with the purpose of investing in cable television systems until the
earlier of July 31, 1997 or such time as sixty-six and two-thirds percent
(66-2/3%) of the committed capital contributions to the Partnership shall be
invested or committed for investment. Without the consent of a majority in
interest of the Limited Partners, the General Partner (and its members,
partners, employees, agents and affiliates, including, but not limited to,
Robert J. Lewis) may not begin to actively supervise the investment of capital
of such other enterprises or partnerships until the earlier of July 31, 1997 or
such time as ninety-five percent (95%) of the committed capital contributions
to the Partnership shall be invested or committed for investment. The General
Partner shall first offer any investment opportunities within the scope of the
Partnership, IP-IV's and the Investing Partnerships' business purpose and for
which the Partnership, IP-IV or the Investing Partnerships have adequate
resources to take advantage of the
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opportunity to the Partnership, IP-IV and the Investing Partnerships and, to
the extent that the Partnership and the Investing Partnerships, after good
faith consideration by the General Partner, do not invest in such opportunity
or take all of such opportunity, the General Partner may elect to give or share
such investment opportunity to or with one or more of the following: any
Partner, any officer, director, shareholder, member, partner, employee or
affiliate of a Partner, any enterprise or partnership in which the General
Partner has an interest, or any nonaffiliated person. Notwithstanding the
foregoing, in the event the General Partner is permitted under the provisions
of this Section 6.1 to begin the offer and sale of interests in other
enterprises with the purpose of investing in cable television systems, and the
General Partner believes such enterprises may invest in cable television
systems in areas contiguous to those owned by the Partnership, IP-IV or any
Investing Partnership, the General Partner will offer the Limited Partners an
opportunity to invest in such enterprise. Except as set forth in this Section
6.1, the General Partner or its members, partners, employees, agents or
affiliates shall not be prohibited from engaging directly or indirectly in
other activities, or from directly or indirectly purchasing, selling and
holding securities or assets in cable television systems or corporations for
their account or for the accounts of others. Any Limited Partner (and their
members, partners, employees, agents and affiliates) may engage in any other
enterprises, including enterprises in competition or in conflict with the
Partnership. The Partnership shall not have any right to any income or profit
derived by any Partner, or its members, partners, officers, directors,
employees, agents or affiliates from any enterprise, opportunity or
transactions permitted by this paragraph. Each Limited Partner shall have the
right to transact business with the Partnership, IP-IV or the Investing
Partnerships. Neither the General Partner nor any of its affiliates shall sell
securities or assets to or purchase securities or assets from the Partnership
without the unanimous consent of the Limited Partners; provided that the
transactions set forth in Exhibit 2 hereto may be consummated by the
Partnership, IP-IV or any Investing Partnership without any further consent of
the Limited Partners. The General Partner may, on behalf of the Partnership or
cable systems of IP-IV or any Investing Partnership, enter into cost and
revenue sharing agreements with cable systems adjacent to those owned by the
Partnership, IP-IV or any Investing Partnership including those systems
purchased by any enterprise or partnership in which the General Partner, any
affiliate of the General Partner or the Partnership or any member of the
General Partner has an interest (the "Adjacent Systems"), to operate the
Adjacent Systems as a single system with the cable systems of the Partnership,
IP-IV or any Investing Partnership with costs equitably allocated between the
various systems as the General Partner and the owner or operator of such
Adjacent System shall determine based on the relative costs associated with
such systems and, if determined by the General Partner and the owner or
operator of such Adjacent System to be in the best interests of the
Partnership, IP-IV, the Investing Partnerships and the Adjacent Systems, to
sell such systems as a single system and allocate the sales revenues in such
manner as such parties deem appropriate based on the relative values of such
systems; provided, however, the terms of any such arrangement are disclosed to
the Limited Partners and are on arm's-length terms and conditions. The parties
hereto hereby waive, and covenant not to sue on the basis of, any law
(statutory, common law or otherwise) respecting the rights and obligations of
the Partners inter se which is or may be inconsistent with this Section 6.1
with respect to the matters covered by this Section 6.1, but in no event shall
the foregoing be
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construed as limiting any rights or remedies with respect to a breach of this
Section 6.1.
6.2 Contracts With the General Partner, Affiliates and Limited Partners.
The General Partner may, on behalf of the Partnership, IP-IV or portfolio
companies of the Investing Partnerships, enter into contracts with itself or
any of its members, partners, employees, agents or affiliates, including but
not limited to InterMedia Management, Inc. ("IMI"), a corporation wholly owned
by Robert J. Lewis; provided, however, that such transactions shall be on terms
no less favorable to the Partnership than are generally afforded from unrelated
third parties or shall require the approval of seventy percent (70%) in
interest of the Limited Partners, excluding any interest as a Limited Partner
owned or controlled directly or indirectly by the General Partner, which
approval shall not be unreasonably withheld. The validity of any transaction,
agreement or payment involving the Partnership, IP-IV or an Investing
Partnership and the General Partner or any affiliate of the General Partner or
a Limited Partner shall not be affected by reason of (a) the relationship
between the Partnership, IP-IV or portfolio companies of an Investing
Partnership, and the General Partner or such member, partner, employee, agent
or affiliate of the General Partner or a Limited Partner or the relationship
between such member, partner, employee, agent or affiliate of the General
Partner or a Limited Partner and the General Partner or (b) the absence of
approval of said transaction, agreement or payment by the Limited Partners if
the proceeds therefrom offset but do not exceed the Administration Fee.
6.3 Indemnification of the Partners. The Partnership shall indemnify and
hold harmless the General Partner, any Limited Partner, any Advisory Committee
member and any member, partner, employee or agent of the General Partner, any
Limited Partner or any Advisory Committee member and any employee or agent of
the Partnership and/or the legal representatives of any of them, and each other
person who may incur liability as a general partner in connection with the
management of the Partnership or any corporation or other entity in which the
Partnership has an investment, against all liabilities and expenses (including
amounts paid in satisfaction of judgments, in compromise, and as counsel fees)
reasonably incurred by him or it in connection with the defense or disposition
of any civil action, suit or other proceeding, in which he or it may be
involved or with which he or it may be threatened, while a general partner or
serving in such other capacity or thereafter, by reason of its being or having
been a general partner, or by serving in such other capacity, except with
respect to any matter which constitutes willful misconduct, bad faith, gross
negligence or reckless disregard of the duties of its office, or material
breach of this Agreement. The Partnership shall advance, in the sole
discretion of the General Partner, to the General Partner, any Limited Partner,
any Advisory Committee member and any member, partner, employee or agent of the
General Partner, any Limited Partner, any Advisory Committee member or the
Partnership reasonable attorneys' fees and other costs and expenses incurred in
connection with the defense of any such action or proceeding. The General
Partner hereby agrees, and each member, partner, employee or agent of the
General Partner and the Partnership shall agree in writing prior to any such
advancement, that in the event he or it receives any such advance, such
indemnified party shall reimburse the Partnership for such fees, costs and
expenses to the extent that it shall be determined that he or it was not
entitled to indemnification under this Section. The rights accruing to a
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General Partner, any Limited Partner and each member, partner, employee or
agent of the General Partner, any Limited Partner or the Partnership under this
paragraph shall not exclude any other right to which it or they may be lawfully
entitled; provided, that any right of indemnity or reimbursement granted in
this paragraph or to which any indemnified party may be otherwise entitled may
only be satisfied out of the assets of the Partnership, and no withdrawn
General Partner, and no Limited Partner, shall be personally liable with
respect to any such claim for indemnity or reimbursement. Notwithstanding any
of the foregoing to the contrary, the provisions of this Section 6.3 shall not
be construed so as to provide for the indemnification of the General Partner,
any Limited Partner, and Advisory Committee member or any member, partner,
employee or agent of the General Partner, any Limited Partner or Advisory
Committee member for any liability to the extent (but only to the extent) that
such indemnification would be in violation of applicable law or such liability
may not be waived, modified or limited under applicable law, but shall be
construed so as to effectuate the provisions of this Section 6.3 to the fullest
extent permitted by law.
6.4 Exculpation. The General Partner and any member, partner, employee or
agent of the General Partner or the Partnership shall not be liable to any
Limited Partner or the Partnership for mistakes of judgment or for action or
inaction which the General Partner or any such member, partner, employee or
agent of the General Partner or the Partnership reasonably believed to be in
the best interests of the Partnership unless such action or inaction
constitutes willful misconduct, bad faith, gross negligence, reckless disregard
of its duties or material breach of this Agreement. The General Partner may
consult with counsel, accountants and other experts in respect of Partnership
affairs and be fully protected and justified in any action or inaction which is
taken in accordance with the advice or opinion of such counsel, accountants or
other experts, provided that they shall have been selected with reasonable
care. Notwithstanding any of the foregoing to the contrary, the provisions of
this Section 6.4 shall not be construed so as to relieve (or attempt to
relieve) the General Partner and any member, partner, employee or agent of the
General Partner or the Partnership of any liability, to the extent (but only to
the extent) that such liability may not be waived, modified or limited under
applicable law, but shall be construed so as to effectuate the provisions of
this Section 6.4 to the fullest extent permitted by law.
ARTICLE 7
Termination and Dissolution
7.1 No Dissolution. The Partnership shall not be dissolved by the admission
of substituted Limited Partners or by the admission of a new General Partner in
accordance with the terms of this Agreement. The dissolution or bankruptcy of
a Limited Partner shall not cause a dissolution of the Partnership.
7.2 Events of Dissolution. The Partnership shall dissolve upon the first to
occur of the following: (i) expiration of the term of the Partnership
specified in Section 1.6 hereof, (ii) the bankruptcy, insolvency or appointment
of a trustee or receiver to manage the affairs of the General Partner, (iii)
the voluntary resignation of Robert J. Lewis as chief
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executive officer of the managing member of the General Partner if a successor
general partner has not been appointed in accordance with Section 4.8 hereof,
(iv) the removal of the General Partner pursuant to Section 4.8(a) if a
successor general partner of the Partnership is not appointed pursuant to
Section 4.8 hereof, (v) dissolution being required by operation of law or
judicial decree including, without limitation, the withdrawal of the General
Partner where there is no remaining or surviving general partner, (vi) the
determination by the General Partner with the affirmative consent of seventy
percent (70%) in interest of the Limited Partners, (vii) the Partnership
becoming taxable as a corporation for federal tax purposes or, (viii) the
determination by the General Partner, based upon advice of counsel, that the
Partnership would be required to register as an investment company under the
Investment Company Act and there is no reasonably practicable means of avoiding
such requirement. Notwithstanding anything to the contrary in this Section
7.2, without the unanimous consent of the Limited Partners, the General Partner
agrees not to voluntarily withdraw as a general partner of the Partnership, and
Robert J. Lewis agrees not to voluntarily resign as chief executive officer of
the managing member of the General Partner, and the General Partner and Robert
J. Lewis each agrees that it or he will not voluntarily take or permit any
action that would cause the Partnership to cease to be controlled directly or
indirectly by Robert J. Lewis and if any of such persons effects such
withdrawal or cessation of control in violation of this Agreement, the
Partnership may recover damages for breach of this Agreement.
7.3 Winding-up. Upon the occurrence of an event of dissolution, the
Partnership shall be wound up and liquidated. The General Partner or, if there
is no general partner or if the General Partner or the managing member of the
General Partner wrongfully caused the dissolution of the Partnership, a
liquidator appointed by a majority in interest of the Limited Partners, shall
proceed with the dissolution and the final distribution. In the dissolution,
the General Partner or such liquidator shall use its best efforts to reduce to
cash and cash equivalent items such assets of the Partnership as the General
Partner or such liquidator shall deem it advisable to sell, subject to
obtaining fair value for such assets and any tax or other legal considerations.
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 in order to
minimize any losses otherwise attendant upon such a winding up, provided that
the liquidation is carried out in conformity with the requirements of Section
7.4 and section 1.704-1(b)(2)(ii)(b)(2) and (3) of the Income Tax Regulations.
7.4 Order of Liquidating Payments and Distributions. In settling accounts
after dissolution, the assets of the Partnership shall be distributed as
expeditiously as possible in the following order not later than the end of the
taxable year of the liquidation (i.e., the date upon which the Partnership
ceases to be a going concern as provided in section 1.704-1(b)(2)(ii)(g) of the
Income Tax Regulations) or if later, within ninety (90) days after the date of
such liquidation:
(a) To creditors, including the Partners to the extent of any unpaid
expenses or any outstanding loan or advance;
(b) To the payment of the costs of winding up the affairs of, liquidating
and dissolving the Partnership including, without limitation,
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expenses of selling assets of the Partnership, discharging the liabilities of
the Partnership, distributing the assets of the Partnership and terminating the
Partnership in accordance with Section 7.3 hereof;
(c) To the establishment of reasonable reserves to provide for obligations
to creditors;
(d) To the Partners with respect to which any other debts of the Partnership
are owing, other than debts arising out of the expulsion or withdrawal of a
Partner;
(e) To the Preferred Limited Partner in an amount equal to the positive
balance in its Capital Account as determined after all adjustments to such
account for the taxable year of the Partnership during which the liquidation
occurs as are required by this Agreement and section 1.704-1(b) of the Income
Tax Regulations, such adjustments to be made within the time specified in such
Regulations;
(f) To the Partners (other than the Preferred Limited Partner) in the
proportion of their respective Capital Accounts as those accounts are
determined after all adjustments to such accounts for the taxable year of the
Partnership during which the liquidation occurs as are required by this
Agreement and section 1.704-1(b) of the Income Tax Regulations, such
adjustments to be made within the time specified in such Regulations.
7.5 Termination. The Partnership shall terminate following its dissolution
and liquidation pursuant to this Article 7 when all of the Partnership assets
as to which it is practicable to do so in the sole discretion of the General
Partner or the liquidator shall have been converted into cash, the net proceeds
therefrom, as well as any other assets of the Partnership, after payment of or
due provision for all debts, liabilities and obligations of the Partnership,
shall have been distributed to the Partners as provided for herein and the
Partnership shall have been terminated in the manner required by the Act.
7.6 Government Regulation.
(a) The General Partner shall use its best efforts to insure that it and the
Partnership are in substantial compliance with those provisions, if any, of
ERISA with which they are obligated by that statute to comply, and to qualify
as a venture capital operating company (as defined in the Department of Labor
regulations promulgated under ERISA) subject to the following provisions of
this Section 7.6.
(b) In the event that at any time after its admission to the Partnership,
(i) any Limited Partner delivers to the General Partner a written opinion of
counsel, reasonably satisfactory to the General Partner, to the effect that, by
reason of the adoption of any law, rule or regulation or the issuance of any
order or directive by any governmental authority (a "Regulatory Change"), such
Limited Partner's continued participation in the Partnership or the making by
such Limited Partner of any additional capital contribution to the Partnership
would violate any law, rule, regulation, license, permit or other regulatory
requirement binding upon or required of such Limited Partner or would subject
such Limited Partner to any penalty or tax to which it was not subject at the
time of its admission to the Partner-
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ship and which is, in the reasonable judgment of such Limited Partner, material
in relation to its investment in the Partnership and is not applicable to such
Limited Partner's investments generally or (ii) the General Partner delivers to
any Limited Partner an opinion of the Partnership's counsel to the same effect
or to the effect that, by reason of a Regulatory Change, such Limited Partner's
continued participation in the Partnership would materially restrict the
continued conduct of the Partnership's business (any such event described in
clause (i) or (ii) of this paragraph (b) is referred to as an "Adverse
Regulatory Development" and the Limited Partner affected thereby is referred to
as the "Affected Partner"), then the General Partner and the Affected Partner
shall cooperate with each other in taking or causing to be taken such action as
shall eliminate such Adverse Regulatory Development. Any such opinion of
counsel shall describe the applicable Regulatory Change and its effect on the
Affected Partner and the Partnership and, insofar as practicable, the actions
which would eliminate such Adverse Regulatory Development.
(c) If an Adverse Regulatory Development cannot otherwise be resolved to the
mutual satisfaction of the Affected Partner and the General Partner, the
General Partner and the Affected Partner shall each use its best efforts to
find a purchaser for all the Affected Partner's interest in the Partnership, or
such part thereof as shall be sufficient to eliminate the Adverse Regulatory
Development, on terms and conditions reasonably acceptable to the Affected
Partner, and if acceptable to the Affected Partner, the General Partner shall
consent to the sale of such interest as long as, in the reasonable judgment of
the General Partner, the purchaser thereof has sufficient financial resources
to satisfy any remaining obligation to contribute capital to the Partnership to
be assumed by such purchaser from the Affected Partner with respect to the
interest in the Partnership to be purchased by it and meets the requirements
for transfer set forth in Section 8.1.
(d) If, within thirty (30) business days after the delivery of an opinion
referred to in paragraph (b) above or such later time as the General Partner
and the Affected Partner shall agree, the General Partner and the Affected
Partner have not resolved to their mutual satisfaction the Adverse Regulatory
Development, then the Partnership may take any of the following actions with
respect to the Affected Partner's interest in the Partnership, but only upon
the delivery to the Affected Partner of an opinion of the Partnership's counsel
(which opinion shall be reasonably acceptable to the Affected Partner) to the
effect that the taking of such action should eliminate the Adverse Regulatory
Development: (i) release the Affected Partner from making any capital
contribution with respect to any new investment by the Partnership (and
appropriate provisions shall be made in this Agreement to preserve such
Affected Partner's interest in all existing investments and to eliminate such
Affected Partner's participation in future investments); (ii) redeem the
Affected Partner's interest in the Partnership in exchange for the assignment
to the Affected Partner of the percentage share of the Partnership's cash and
short-term investments which the Affected Partner would receive if all such
assets were then distributed to the Partners plus the percentage share in each
of the Partnership's other investments and any other assets of the Partnership
equal to the share of all such assets it would receive if the Partnership were
dissolved at such time and all such assets were liquidated for their then value
as determined in accordance with Section 4.4(b), or a cash payment in lieu
thereof in an
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amount equal to the fair market value (as determined pursuant to Section 4.4)
of their Partnership Interest as of the date of the determination of an Adverse
Regulatory Development; or (iii) terminate and dissolve the Partnership and, if
in the judgment of the General Partner it is prudent to do so, distribute all
or any portion of the Partnership's investments to the Partners in kind so
that, as nearly as practicable, each Partner receives an equal portion of its
total distribution in each investment distributed in kind, in which event the
General Partner shall offer to establish a successor partnership on terms and
conditions in all material respects the same as this Partnership by
contributing the property distributed to them by this Partnership. The
Partnership shall seek to take the foregoing actions in the order stated and
shall take an action subsequently stated only if, in accordance with the
opinion of counsel referred to above, none of the actions previously stated
should eliminate the Adverse Regulatory Development.
(e) If, within sixty (60) business days after the delivery of the opinion
referred to in paragraph (b) above or such later time as the General Partner
and the Affected Partner shall agree upon, the General Partner and the Affected
Partner have not resolved to their mutual satisfaction the Adverse Regulatory
Development or the Partnership has not taken any of the actions permitted by
paragraph (d) above to eliminate the Adverse Regulatory Development, the
Affected Partner, by notice to the Partnership, may require the Partnership to
take any of such actions but only upon the delivery to the Partnership of an
opinion of counsel (which opinion and counsel shall be reasonably acceptable to
the General Partner) to the effect that the taking of such action should
eliminate the Adverse Regulatory Development; provided that the Affected
Partner shall require the Partnership to take any of the actions stated in
paragraph (d) only if, in the opinion of counsel delivered pursuant to this
paragraph (e), none of the actions stated in paragraph (d) before the action
proposed to be taken would likely eliminate the Adverse Regulatory Development;
and provided further that the Partnership shall not be required to take the
actions referred to in clause (iii) of paragraph (d) if the Regulatory Change
is the imposition on the Affected Partner of a penalty or tax of the type
referred to in paragraph (b) and the General Partner reasonably determines that
such action would have an effect on the other Limited Partners that is material
and adverse in relation to their investment in the Partnership.
(f) The Partnership and the Affected Partner shall each bear all expenses it
may respectively incur in connection with taking any of the actions permitted
or required of it by paragraphs (b) through (e) of this Section 7.6, including
the costs of providing any opinions of counsel it is required to provide.
(g) Whenever the General Partner proposes to make any cash payment to an
Affected Partner as permitted by paragraph (d) or as may otherwise be agreed
upon by the Affected Partner and the General Partner or to take any other
action pursuant to this Section 7.6 which would adversely and materially affect
the interest of the other Limited Partners in relation to their investment in
the Partnership, the General Partner shall first obtain the approval of seventy
percent (70%) of such Limited Partners for such payment or action.
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(h) The Partnership or an Affected Partner may take the actions contemplated
by this Section 7.6 either (i) in advance of any Regulatory Change coming into
effect if all necessary governmental action has occurred to cause such
Regulatory Change to come into effect or (ii) prior to expiration of the time
periods provided hereunder for the taking of such actions if in the opinion of
counsel referred to herein doing so is necessary to avoid an Adverse Regulatory
Development coming into effect with respect to an Affected Partner.
7.7 Orderly Methods of Liquidating Payments. Notwithstanding anything to
the contrary in this Article 7, if required to maximize the proceeds of
liquidation, the General Partner (or the liquidator chosen in accordance with
Section 7.3) may, with the consent of seventy percent (70%) in interest of the
Limited Partners, implement the distribution provisions of Section 7.4(f)
hereof by transfer, on behalf of the Partners, of the assets of the Partnership
to a liquidating trustee or trustees.
ARTICLE 8
Transfer of Interest, Failure To Pay
Capital Contributions, Beneficial Owners
8.1 Transfer of Partnership Interest. No Limited Partner shall sell,
assign, mortgage, encumber, hypothecate or otherwise transfer, whether
voluntarily or involuntarily, its interest in the Partnership or any part
thereof, unless (x) any such transferee entity meets the suitability
requirements originally imposed under the subscription agreement on the
transferring Limited Partner and (y) such assignment or transfer will not (and,
upon request of the General Partner, the transferring Limited Partner provides
an opinion of counsel in form and substance satisfactory to the General Partner
that such assignment or transfer will not) (A) violate any applicable federal
or state securities laws or regulations, subject the Partnership to
registration as an investment company or election as a "business development
company" under the Investment Company Act; (B) require the General Partner or
any of its members to register as an investment adviser under the Investment
Advisers Act of 1940; (C) violate any other federal, state or local laws; (D)
effect a termination of the Partnership under section 708 of the Code; or (E)
cause the Partnership to be treated as an association taxable as a corporation
for federal income tax purposes, or violate this Agreement. Notwithstanding
the preceding sentence, a Partner may assign or transfer its interest in the
Partnership if any such assignment or transfer effects a termination of the
Partnership under section 708 of the Code so long as the transferring Partner
agrees to indemnify and hold harmless the Partnership and all other Partners
against any and all costs and expenses incurred as a direct result of a
termination of the Partnership under section 708 of the Code. No transferee or
assignee of all or any part of a Limited Partner's interest shall become a
Limited Partner without the prior written consent of the General Partner which
consent shall not be unreasonably withheld so long as such Partner sells the
lesser of all its Partnership Interests or a Partnership Interest representing
an initial contribution of at least $5,000,000 and in no event shall the
substitution of an assignee or transferee as a Limited Partner require the
consent of any Limited Partner. Any purported transfer of any interest of a
Limited Partner in the Partnership or any part thereof not in compliance with
this
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Section 8.1 shall be void and of no force or effect and the transferring
Partner shall be liable to the other Partners and the Partnership for all
liabilities, obligations, damages, losses, costs and expenses (including
reasonable attorneys' fees and court costs) arising as a result of such
noncomplying transfer.
8.2 Transfer of IP Holdings Affiliates' Interests. Notwithstanding the
provisions of Section 8.1, any IP Holdings Affiliate (as that term is defined
in Exhibit 1 hereto) may transfer any or all of its interest in the Partnership
to any other IP Holdings Affiliate at any time, provided that such transfer is
made in compliance with clauses (x) and (y) of Section 8.1.
8.3 Indemnification. (a) Each Limited Partner and substituted Limited
Partner (each an "Indemnifying Person") shall indemnify and hold harmless the
Partnership, the General Partner and every other Limited Partner (each an
"Indemnified Person") who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of or arising from
(including without limitation from any actual or alleged misrepresentation or
misstatement of facts or omission to represent or state facts made by such
Limited Partner in connection with) (i) any assignment, transfer, encumbrance
or other disposition of all or any part of such Limited Partner's Partnership
Interest, or (ii) the admission of such substituted Limited Partner, against
losses, liabilities and expenses for which the Partnership or other person has
not otherwise been reimbursed (including attorneys' fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by it in
connection with such action, suit or proceeding.
(b) Each Indemnifying Person agrees that no Indemnifying Person will,
without the prior written consent of the Indemnified Person, settle, compromise
or consent to the entry of any judgment in any pending or threatened action in
respect of which indemnification may be sought under this Agreement unless such
settlement includes an unconditional release of the Indemnified Person from all
liability arising therefrom. Any Indemnifying Person shall have no
indemnification obligations with respect to any such claim or demand which has
been settled by an Indemnified Person without the prior written consent of such
Indemnifying Person, which consent will not be unreasonably withheld or
delayed.
8.4 Failure To Pay Capital Contributions. The parties hereto agree that
prompt payment of the installments of required capital contributions hereunder
is of the essence and that failure of any Partner to make such payments as
provided herein will cause substantial injury to the Partnership and the other
Partners; further, the amount of damages caused by such injury will be
difficult to calculate. Accordingly, the parties hereto agree that in the
event that any Limited Partner fails to pay any installment of its required
capital contribution to the Partnership promptly when due, the General Partner
shall give such defaulting Limited Partner written notice thereof, and if such
defaulting Limited Partner shall fail to make such required payment in full
within fifteen (15) days following the mailing of such notice or such other
longer period as the General Partner may elect, the General Partner may elect,
in its sole discretion, either of the following alternatives:
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(a) to commence legal proceedings against such defaulting Limited Partner to
collect the due and unpaid payment, plus interest from the date due at the
reference rate as announced from time to time by Bank of America NT&SA, plus
two (2) percentage points, plus the expenses of collection, including
attorneys' fees; or
(b) to rescind and terminate all of the defaulting Limited Partner's
interest in the Partnership. In such event, the defaulting Limited Partner
will receive, upon termination of the Partnership, the lesser of (1) its
paid-in capital or (2) seventy-five percent (75%) of its Capital Account at the
time of default (reduced by what its Partnership Interest in subsequent
deductions and losses would have been had it remained a Partner in the
Partnership) and in such event the remaining amount that would have been
distributed to such Limited Partners shall be available for distribution to the
remaining Partners in accordance with Article 3.
Notwithstanding the foregoing, without the consent of the Limited Partner
having the largest interest as a Limited Partner (other than with respect to a
default by such Limited Partner) or if the defaulting Limited Partner has not
then paid to the Partnership at least one-third of its commitment of equity to
the Partnership as in effect on the date hereof, the General Partner shall not
have the option to pursue remedies against the defaulting Limited Partner under
the terms of clause 8.3(b) above, but instead may only pursue remedies against
such Limited Partner pursuant to clause 8.3(a) above or as otherwise provided
herein, at law or in equity.
The foregoing alternatives, to the extent available as provided above, are in
addition to and not in limitation of any other right or remedy of the
Partnership under this Agreement, at law or in equity. Losses attributable to
a defaulting Limited Partner pursuant to Section 3.1 shall be calculated as if
such installment had been paid when due.
8.5 Increase in Beneficial Owners. Notwithstanding any other provision of
this Agreement, no Limited Partner shall increase the number of its beneficial
owners if (a) at such time, such Limited Partner owns more than ten percent
(10%) of the Partnership Interests in the Partnership and has more than ten
percent (10%) of its assets invested in private investment companies which are
not registered under the Investment Company Act of 1940, as amended, because
such companies have less than one hundred (100) beneficial owners and do not
presently propose to make a public offering of their interests, or (b) such
Limited Partner was formed for the purpose of investing in a Partnership
Interest.
ARTICLE 9
Miscellaneous
9.1 Notices. All notices, approvals, consents and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be hand delivered (including by messenger or recognized commercial
delivery or courier service), sent by facsimile transmission or sent by
registered or certified mail, postage prepaid, addressed to the Partner
intended at the address set forth below its name on Exhibit 1 hereto or at such
other address as such Partner may designate by notice given to
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the other Partners in the manner aforesaid and shall be deemed given and
received on the date it is delivered, in the case of delivery by hand or by
facsimile (if sent on a business day, or if not sent on a business day, the
next business day thereafter) or, in the case of delivery by mail, actual
delivery as shown by the addressee's return receipt. Rejection or other
refusal to accept or inability to deliver because of a change of address of
which no notice was given shall be deemed to be receipt of the notice.
9.2 Governing Law. This Agreement and this limited partnership continued
hereby shall be governed by and construed in accordance with the laws of the
State of California.
9.3 Amendments. This Agreement may be modified or amended only by an
instrument in writing signed by the General Partner and by seventy percent
(70%) in interest of the Limited Partners (or such other percentage as required
by Section 4.7(b)); provided that, in addition to any amendments otherwise
authorized herein, this Agreement may be amended from time to time by the
General Partner without the consent of any of the Limited Partners to (i) add
to the representations, duties or obligations of the General Partner or
surrender any right or power granted to the General Partner herein, (ii) add to
the rights or powers granted to the Limited Partners, (iii) clarify any
inconsistency between sections hereof and correct any printing, stenographic or
clerical errors or omissions; and (iv) to comply with legal or tax requirements
provided such compliance does not materially decrease the amount or timing of
any distributions, including distributions upon liquidation, or materially
change allocations of income or losses, that the Limited Partners would
otherwise be entitled to receive pursuant to this Agreement, provided however,
that nothing herein shall be construed to permit the General Partner to add to
the rights or powers of the Limited Partners if such addition could reasonably
be expected to cause the Limited Partners to have liability as general partners
or to cause any Limited Partner to be required to consolidate the Partnership
for financial reporting purposes, and provided that the General Partner shall
not relinquish any rights or powers if such relinquishment could reasonably be
expected to prevent it from performing its duties and obligations hereunder or
to cause any Limited Partner to be required to consolidate the Partnership for
financial purposes.
9.4 Entire Agreement. This instrument together with the Subscription
Agreements of the Partners constitute the entire agreement between the Partners
with respect to the Partnership and supersede all prior agreements,
understandings, offers and negotiations, oral or written.
9.5 Waiver of Partition. Each Partner hereby irrevocably waives any and all
rights that it may have to maintain an action for partition of the Partnership
or any of the Partnership's property.
9.6 Consents. All consents, agreements and approvals required or permitted
by this Agreement shall be in writing and a signed copy thereof shall be filed
and kept with the books of the Partnership.
9.7 Successors. Subject to Article 8, all rights and duties of the Partners
hereunder shall inure to the benefit of and be binding upon their respective
successors and assigns.
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9.8 Confidentiality of Investors. Neither the General Partner nor the
Partnership shall disclose to any person or entity (other than to another
Partner or potential partner or to lenders or potential lenders to the
Partnership) the fact that a Limited Partner is an investor in the Partnership
except to the extent (a) required by law or legal process upon prior written
notice to such Limited Partner or (b) authorized by any such Limited Partner in
writing.
9.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
9.10 Severability. Each provision of this Agreement shall be considered
severable and if for any reason any provision which is not essential to the
effectuation of the basic purposes of the Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable and contrary to the Act
or existing or future applicable law, such invalidity shall not impair the
operation of or affect those provisions of this Agreement which are valid. In
that case, this Agreement shall be construed so as to limit any term or
provision so as to make it enforceable or valid within the requirements of any
applicable law, and in the event such term or provision cannot be so limited,
this Agreement shall be construed to omit such invalid or unenforceable
provisions.
9.11 Affiliate. For purposes of this Agreement, an affiliate of any person
shall mean any other person that (i) directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with, the
specified person; (ii) is a director or officer of, partner in, member of, or
trustee of, or serves in a similar capacity with respect to, the specified
person or of which the specified person is a director, officer, partner, or
trustee, or with respect to which the specified person serves in a similar
capacity; (iii) directly or indirectly through one or more intermediaries is
the beneficial owner of ten percent (10%) or more of any class of equity
securities of the specified person or of which the specified person is directly
or indirectly through one or more intermediaries the owner of ten percent (10%)
or more of any class of equity securities; (iv) directly or indirectly through
one or more intermediaries controls, is controlled by, or is under common
control with, a person described in clause (iii), (v) is acting at the
direction and primarily in furtherance of the interests of the specified person
or (vi) is an immediate family member of the specified person. Notwithstanding
the foregoing, for purposes of Sections 4.7(d), 4.8, 4.9, 6.1 and 6.2 of this
Agreement in no event shall any person that is under the direct or indirect
control of Robert J. Lewis be deemed to be an affiliate of Tele-Communications,
Inc. or its related entities and for purposes of Sections 4.7(d), 4.8 and 6.1,
IP-I shall not be deemed to be an affiliate of the General Partner, the
Partnership, ICM-IV, IP-IV or any Investing Partnership.
9.12 Power of Attorney. Each Limited Partner, including any additional or
substituted Limited Partner, hereby irrevocably constitutes and appoints the
General Partner, and each member of the General Partner, and each of them
acting singly, its true and lawful agent and attorney-in-fact, with full power
and authority of substitution, to make, amend, execute, acknowledge, swear to,
deliver, file and record for and on behalf of such Limited Partner, such
documents and instruments as may be reasonably
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necessary to carry out the provisions of, and which is permitted by, this
Agreement, including a Certificate of Limited Partnership and any amendments
thereto required by law, any amendments to this Agreement by reason of
admissions, substitutions or withdrawals of Limited Partners or any amendments
to give effect to the voting of the Partners and any amendments permitted by
Section 9.3 without the consent of the Limited Partners.
The foregoing power of attorney, being coupled with an interest, is hereby
declared to be irrevocable, and shall survive the death, dissolution or
incapacity of any Limited Partner.
9.13 Nonrecourse. Neither the Partnership nor the Partners shall have
recourse to any member, partner, officer, director or shareholder of any
Partner or to the assets of any member, partner, officer, director or
shareholder of any Partner with respect to the obligations and liabilities of
such Partner under this Agreement, except that this Section 9.13 shall not
limit or impair the exercise or enforcement of rights and remedies in respect
of any agreement to which such person is a party in accordance with the terms
and provisions of such agreement.
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9.14 Foreign Person. Should any Partner be subject to withholding pursuant
to the Code or any applicable state, local or foreign law, the Partnership may
withhold all amounts otherwise distributable to such Partner or otherwise under
this Agreement or such other amount as may be required by law and any amounts
so withheld shall be deemed to have been distributed to the Partner under this
Agreement. If any sums are withheld pursuant to this provision, the
Partnership shall remit the sums so withheld to and file the required forms
with the Internal Revenue Service or other applicable government agency and, in
the event of any claimed over-withholding, the Partner shall be limited to an
action against the Internal Revenue Service or other applicable government
agency for refund and hereby waives any claim or right of action against the
Partnership on account of such withholding. Moreover, if the amounts required
to be withheld exceed the amounts which would otherwise have been distributed
to such Partner, such Partner shall contribute any deficiency to the
Partnership within five (5) days after receipt of notice from the General
Partner.
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IN WITNESS WHEREOF, the General Partner has executed this Amended and
Restated Agreement of Limited Partnership on behalf of the Partners as
attorney-in-fact as of the date first hereinabove written.
GENERAL PARTNER:
INTERMEDIA CAPITAL MANAGEMENT, LLC
By /s/ Robert J. Lewis
------------------------------
Robert J. Lewis
Member
PREFERRED LIMITED PARTNER:
GENERAL ELECTRIC CAPITAL CORPORATION
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
LIMITED PARTNERS:
ATLANTIC EQUITY CORPORATION
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
BANCORP HAWAII, INC.
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
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By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
THE BANK OF NEW YORK COMPANY, INC.
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
CABLE PARTNERS, AN ILLINOIS GENERAL
PARTNERSHIP
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
MELLON BANK, N.A., AS TRUSTEE FOR THIRD
PLAZA TRUST
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
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MELLON BANK, N.A., AS TRUSTEE FOR FOURTH PLAZA TRUST
By ***
---------------------------------
Name
--------------------------------
Title
-------------------------------
***
------------------------------------
WILLIAM D. HORVITZ
INDOSUEZ CAPITAL
By Indosuez CM II, Inc.
Its Managing General Partner
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
***
-------------------------------------
THIERRY DEVERGNES
INTER CABLE INVESTORS, A CALIFORNIA
LIMITED PARTNERSHIP
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
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INTERMEDIA CAPITAL MANAGEMENT IV, L.P.
By InterMedia Management, Inc.
Its General Partner
By ***
----------------------------------
Robert J. Lewis
President and Chief Executive Officer
INTERMEDIA PARTNERS, a California limited
partnership
By InterMedia Capital Management, LLC
Its General Partner
By ***
----------------------------------
Robert J. Lewis
Member
IP HOLDINGS L.P.,
By Centre Partners, L.P.
Its General Partner
By Park Road Corporation
Its General Partner
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
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CENTRE CAPITAL INVESTORS II, L.P.
CENTRE CAPITAL TAX-EXEMPT
INVESTORS II, L.P.
By Centre Partners II, L.P. as general
partner of such partnerships
By Centre Partners Management LLC,
attorney-in fact
By ***
----------------------------------
Bruce G. Pollack
Managing Director
CENTRE PARTNERS COINVESTMENT, L.P.
CENTRE PARALLEL MANAGEMENT PARTNERS, L.P.
By Centre Partners II, LLC, a general
partner
By ***
----------------------------------
Bruce G. Pollack
Managing Director
SBA CABLE CORP.
By ***
----------------------------------
Bruce G. Pollack
Treasurer
OVERSEAS CABLE CORP.
By ***
----------------------------------
Bruce G. Pollack
Treasurer
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LJR LIMITED PARTNERSHIP
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
NATIONSBANC INVESTMENT CORP.
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
RMS LIMITED PARTNERSHIP
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
ROYAL BANK OF CANADA
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
SUMITOMO CORPORATION
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
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SUMITOMO CORPORATION OF AMERICA
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
TCI OF GREENVILLE, INC.
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
TCI OF PIEDMONT, INC.
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
TCI OF SPARTANBURG, INC.
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
TORONTO DOMINION INVESTMENTS, INC.
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
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WLD LAMONT PARTNERS
By ***
----------------------------------
Name
--------------------------------
Title
-------------------------------
Robert J. Lewis agrees to be bound by the terms of Section 6.1 and Section 7.2
to the extent such Sections relate to him.
Agreed and Accepted this 5th
day of August, 1997
/s/ Robert J. Lewis
- ------------------------------
Robert J. Lewis
InterMedia Capital Management IV, L.P.
a California limited partnership as
Attorney-in-Fact for each Limited Partner
marked with ***
By: InterMedia Management, Inc.
Its general partner
/s/ Robert J. Lewis
- ------------------------------
Robert J. Lewis
President
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