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EXHIBIT 10.47
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LIMITED PARTNERSHIP AGREEMENT
of
PW PARTNERS 1995 L.P.
Dated as of October 31, 1995
THE LIMITED PARTNERSHIP INTERESTS EVIDENCED BY THIS PARTNERSHIP
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER ANY STATE SECURITIES LAW AND MUST BE HELD INDEFINITELY UNLESS
SOLD IN COMPLIANCE WITH ALL APPLICABLE
SECURITIES LAWS.
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LIMITED PARTNERSHIP AGREEMENT
of
PW PARTNERS 1995 L.P.
Table of Contents
Page
ARTICLE I
DEFINITIONS AND TERMS .............. 1
1.01. Definitions .............................................. 1
1.02. Terms Generally .......................................... 6
ARTICLE II
THE PARTNERSHIP ................. 6
2.01. Name ..................................................... 6
2.02. Term ..................................................... 6
2.03. Principal Place of Business .............................. 6
2.04. Registered Office in Delaware ............................ 7
2.05. Names and Addresses of the Partners ...................... 7
ARTICLE III
PURPOSE AND POWERS ................ 7
3.01. Purpose and Powers ....................................... 7
ARTICLE IV
MANAGEMENT AND CONTROL .............. 8
4.01. Authority of General Partner ............................. 8
4.02. Expenses ................................................. 9
4.03. No Compensation to General Partner ....................... 9
ARTICLE V
CAPITAL CONTRIBUTIONS AND LOANS .......... 9
5.01. Capital Contributions .................................... 9
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5.02. Loans ................................................... 10
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS ........... 11
6.01. Allocation of Income and Loss ........................... 11
6.02. Liability of General and Limited Partners ............... 12
6.03. Allocations for Tax Purposes ............................ 13
6.04. Valuation ............................................... 13
6.05. Distributions ........................................... 14
ARTICLE VII
PARTNERS .................... 15
7.01. Designation of Limited Partners ......................... 15
7.02. Vesting of Interests; Purchase of a Limited Partner's
Interest .............................................. 16
7.03. Transfer of a Limited Partner's Interest ................ 17
7.04. Transfer of General Partner's Interest .................. 17
7.05. Admission or Substitution of New Limited Partners ....... 17
7.06. Admission of Substitute or Additional General Partners .. 18
7.07. Withdrawal of a Limited or General Partner .............. 19
7.08. Final Events with Respect to a Partner .................. 19
7.09. Continuation of Partnership ............................. 19
7.10. Removal of General Partner .............................. 20
7.11. Compliance with Law ..................................... 20
ARTICLE VIII
DISSOLUTION OF THE PARTNERSHIP .......... 20
8.01. Dissolution ............................................. 20
8.02. Amounts Reserved ........................................ 21
ARTICLE IX
REPORTS TO PARTNERS ................ 22
9.01. Books of Account ........................................ 22
9.02. Audit and Report ........................................ 22
9.03. Fiscal Year ............................................. 23
ARTICLE X
MISCELLANEOUS .................. 23
10.01. Governing Law ........................................... 23
10.02. Indemnification ......................................... 23
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10.03. Notice .................................................. 23
10.04. Counterparts ............................................ 23
10.05. Completeness and Amendments ............................. 23
10.06. Power of Attorney ....................................... 24
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PW PARTNERS 1995 L.P.
LIMITED PARTNERSHIP AGREEMENT, dated as of October 31, 1995, among
PAINEWEBBER PARTNERS II, INC., a Delaware corporation, as general partner, and
the persons listed on the signature pages hereof, as limited partners.
The Partners (as defined below), in consideration of their mutual
covenants herein contained, hereby agree to become partners and to form a
limited partnership (the "Partnership") under the Delaware Revised Uniform
Limited Partnership Act (the "Delaware Act") upon the filing for record of the
Certificate of Limited Partnership in the office of the Secretary of State as
required by Section 17-201 of the Delaware Act, for the purposes and duration,
and upon the terms and conditions, hereinafter set forth, and further hereby
mutually covenant and agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
1.01. DEFINITIONS. For the purposes of this Agreement, the following
terms shall have the corresponding meanings, except as otherwise specifically
provided herein:
"Affiliate" shall mean, with respect to another Person, any Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such other Person.
"Bankruptcy" shall mean, with respect to any Person, the occurrence of
any of the following events: (i) the filing of an application by such Person
for, or a consent to, the appointment of a trustee or custodian of his assets;
(ii) the filing by such Person of a voluntary petition in bankruptcy or the
seeking of relief under Title 11 of the United States Code, as now constituted
or hereafter amended, or the filing of a pleading in any court of record
admitting in writing his inability to pay his debts as they become due; (iii)
the failure of such Person to pay his debts as such debts become due; (iv) the
making by such Person of a general assignment for the benefit of creditors; (v)
the filing by such Person of an answer admitting the material allegations of, or
his consenting to or defaulting in answering, a bankruptcy petition filed
against him in any bankruptcy proceeding or petition seeking relief under Title
11 of the United States Code, as now constituted or as hereafter amended; or
(vi) the entry of an order, judgment or decree by any court of competent
jurisdiction adjudicating such Person a bankrupt or insolvent or for relief in
respect of such Person or appointing a trustee or custodian of his assets and
the continuance of such order, judgment or decree unstayed and in effect for a
period of 60 consecutive days.
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"Capital Account" shall mean, with respect to any Partner, an account
maintained for such Partner to which is credited such Partner's contributions to
the Partnership and any net income allocated to such Partner pursuant to Section
6.01 and from which is debited any distributions to such Partner and any net
losses allocated to such Partner pursuant to Section 6.01. In the case of any
distribution in kind, Capital Accounts shall be adjusted as if the asset
distributed had been sold in a taxable transaction and the proceeds distributed
in cash, and any resulting gain or loss on such sale shall be allocated pursuant
to Section 6.01.
"Capital Contribution" shall mean, with respect to any Partner, all
contributions of capital to the Partnership made by such Partner in accordance
with Section 5.01.
"Capital Gain (Loss)" shall mean, with respect to the sale or other
disposition of an Investment, the amount, if any, by which (i) the proceeds of
such sale or other disposition exceed (are less than) (ii) the cost or other
basis of such Investment to the Partnership, plus any interest on indebtedness
or other expenses incurred with respect thereto, less any interest, dividends or
other income received with respect thereto.
"Capital Percentage" shall mean, with respect to any Partner, the
percentage that the Capital Contribution of such Partner bears to the sum of all
Capital Contributions.
"Capital Schedule" shall mean a capital schedule distributed pursuant
to Section 5.01(a).
"Certificate of Limited Partnership" shall mean the Certificate of
Limited Partnership dated and filed for record in the Office of the Secretary of
State of Delaware on October 31, 1995, pursuant to Section 17-201 of the
Delaware Act.
A "Change in Control" shall be deemed to have occurred if:
(i) any "person", as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934 (the "Act"), becomes a beneficial
owner, as such term is used in Rule 13d-3 promulgated under the Act, of
securities of PWG or PWI representing 20% or more of the combined voting
power of the outstanding securities of PWG or PWI, as the case may be,
having the right to vote in the election of directors (any such owner being
herein referred to as an "Acquiring Person");
(ii) a majority of the Board of Directors of PWG ("PWG Board") at any
time consists of individuals elected to membership at a PWG Board meeting or
a PWG shareholders' meeting other than individuals nominated or approved by
a majority of the Disinterested Directors;
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(iii) all or substantially all the business of PWI is disposed of
pursuant to a merger, consolidation or other transaction (other than a
merger, consolidation or other transaction with a company of which 50% or
more of the combined voting power of the outstanding securities having a
right to vote at the election of directors is owned, directly or indirectly,
by PWG both before and immediately after the merger, consolidation or other
transaction) in which PWI is not the surviving corporation or PWG is
materially or completely liquidated; or
(iv) PWG or PWI combines with another company and is the surviving
corporation (other than a merger, consolidation or other transaction with a
company of which 50% or more of the combined voting power of the outstanding
securities having a right to vote at the election of directors is owned,
directly or indirectly, by PWG both before and immediately after the merger,
consolidation or other transaction) but, immediately after the combination,
the shareholders of PWG hold, directly or indirectly, less than 50% of the
total outstanding securities of the combined company having the right to
vote in the election of directors.
"Code" shall mean the Internal Revenue Code of 1986, as from time to
time amended and in effect.
"Compensation Committee" shall mean the Compensation Committee of the
Board of Directors of PWG.
"Contribution Date" shall mean each date, fixed by the General Partner
in its discretion, on which Capital Contributions shall be made by the Limited
Partners.
"Designated Investment Receipts" shall mean the cash receipts received
by the Partnership in connection with the sale, transfer or other disposition of
an Investment (other than (a) an Investment described in Section 3.01(b) and (b)
Special Investments) and the amount of any dividend, interest, distribution or
other income received with respect to an Investment (other than (a) an
Investment described in Section 3.01(b) and (b) Special Investments), reduced by
(i) the amount thereof applied to the repayment of interest (including any
accrued but unpaid interest) on any loan described in Section 5.02(a) and (ii)
the amount thereof that the General Partner distributes (or reserves for
distribution) to the Partners in accordance with Section 6.05(b).
"Disinterested Director" shall mean any member of the PWG Board (i) who
is not an officer or employee of PWG, PWI or any of their subsidiaries, (ii) who
is not an Acquiring Person or an affiliate or associate of an Acquiring Person
or a nominee or representative of an Acquiring Person or of any such affiliate
or associate and (iii) who was a member of the PWG Board prior to the date of
this Agreement or was recommended for election or elected by a majority of the
Disinterested Directors then on the PWG Board.
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"Drawdown Date" shall mean the date on which the Partnership draws down
on a loan contemplated by Section 5.02(a) in the manner contemplated by Section
5.02(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Final Event" shall mean the death, adjudication of incompetency,
Bankruptcy, liquidation, dissolution or withdrawal from the Partnership of any
Person who is a Partner.
"General Partner" shall mean the Person named herein as General Partner
and any Person admitted as an additional or substitute General Partner, so long
as such Person shall remain a General Partner.
"Investments" shall mean and include common and preferred stock
(including warrants, rights, put and call options and other options relating
thereto or any combination thereof), partnership interests, notes, bonds,
debentures, trust receipts and other obligations, instruments or evidences of
indebtedness, choses in action, other property or interests commonly regarded as
securities, interests in real property, whether improved or unimproved,
interests in oil and gas properties and mineral properties, interests in "hedge
funds" or similar investment vehicles, whether or not registered under the
Investment Company Act of 1940, as amended, short-term investments commonly
regarded as money-market investments, bank deposits, interests in personal
property of all kinds, whether tangible or intangible, and cash.
"Limited Partner" shall mean any of the Persons named herein as Limited
Partners or any other Person admitted as an additional or substitute Limited
Partner, so long as such Person shall remain a Limited Partner.
"Limited Partnership Percentage" shall mean, with respect to any
Limited Partner, the Capital Contribution of such Limited Partner divided by the
Capital Contributions of all the Limited Partners. For the purpose of this
definition, all Limited Partnership interests held by the General Partner shall
be excluded.
"Loan Proceeds" shall mean the principal amount of a loan described in
Section 5.02(a) which is applied to the purchase of an Investment.
"Net Capital Gain" shall mean the sum of all Capital Gains realized by
the Partnership on or prior to a given date, less the sum of the following:
(i) all Capital Losses or, without duplication, other losses realized
by the Partnership on or prior to such date;
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(ii) a reserve established by the General Partner in its discretion for
unrealized losses and, subject to clause (iii) below, for the repayment of
indebtedness of the Partnership;
(iii) the amount of any payment of interest or principal with respect
to any loan of the Partnership that will become due and payable within 12
months after such date; and
(iv) the value of all distributions previously made to the Limited
Partners in accordance with Section 6.05 (valued, in the case of noncash
distributions, at the time of such distribution).
"Net Value" shall mean, with respect to any Investment as of any date,
the value of the Investment on such date, as determined in Section 6.04, minus
the sum of the Partnership's liabilities incurred with respect to such
Investment. For the purpose of determining Net Value, the loans borrowed by the
Partnership pursuant to Section 5.02 shall be deemed to have been incurred with
respect to each of the Investments of the Partnership in proportion to the
relative cost of each such Investment.
"Operative Date" shall mean the date, if any, following a Change in
Control that has been designated in a resolution adopted by a majority of the
Disinterested Directors, in their sole discretion, as the Operative Date.
"PaineWebber" shall mean PWG or any Affiliate of PWG.
"Partner" shall mean any Person who is a partner in the Partnership,
whether the General Partner or a Limited Partner.
"Person" shall include any individual, corporation, partnership,
association, trust, joint stock company or unincorporated organization.
"PWG" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇ Group Inc., a Delaware corporation.
"PWI" shall mean PaineWebber Incorporated, a Delaware corporation.
"Senior Limited Partners" shall mean the three individuals who are the
Limited Partners who have the three largest Limited Partnership Percentages on
the Operative Date. If more than three Limited Partners have Limited Partnership
Percentages equal to or greater than the third largest Limited Partnership
Percentage, then all such persons shall be Senior Limited Partners. If three or
fewer persons are Limited Partners on the Operative Date, then such remaining
Limited Partners shall be Senior Limited Partners.
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"Special Investment" shall mean any short-term Investment of the
Partnership with an anticipated investment period of less that twenty-four (24)
months.
"Successor in Interest" shall mean any (i) shareholder of; (ii)
trustee, custodian, receiver or other Person acting in any bankruptcy or
reorganization proceeding with respect to; (iii) assignee for the benefit of the
creditors of; (iv) officer, director or partner of; (v) trustee or receiver, or
former officer, director or partner, or other fiduciary acting for or with
respect to the dissolution, liquidation or termination of; or (vi) other
executor, administrator, committee, legal representative or other successor or
assign of any Partner, whether by operation of law or otherwise.
1.02. TERMS GENERALLY. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All the terms
herein that relate to accounting matters shall be interpreted in accordance with
generally accepted accounting principles from time to time in effect. All
references to "Sections" and "Articles" shall refer to Sections and Articles of
this Agreement unless otherwise specified. The words "hereof" and "herein" and
similar terms shall relate to this Agreement.
ARTICLE II
THE PARTNERSHIP
2.01. NAME. The Partnership shall conduct its activities under the name
of PW Partners 1995 L.P. The General Partner shall have the power at any time to
change the name of the Partnership. The General Partner shall give prompt notice
of any such change to each Limited Partner.
2.02. TERM. The Partnership commenced upon the filing of the
Certificate of Limited Partnership in the Office of the Secretary of State of
Delaware on October 31, 1995, and shall continue through the close of business
on December 31, 2008, unless sooner terminated pursuant to the provisions of
Section 7.09 or Section 8.01(a). The General Partner may, at any time on or
prior to December 31, 2008, extend the term of the Partnership for up to five
years if such extension is deemed desirable to permit the orderly liquidation of
the Partnership or otherwise to further the purposes of the Partnership.
2.03. PRINCIPAL PLACE OF BUSINESS. The principal place of business of
the Partnership shall be at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or such other place, either within or without the State of Delaware, as
may be designated by the General Partner from time to time. The General Partner
shall give prompt notice of any change in its principal place of business to
each Limited Partner.
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2.04. REGISTERED OFFICE IN DELAWARE. The address of the Partnership's
registered office in Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ in the City of Wilmington,
County of New Castle. The name of the Partnership's registered agent at such
address is The Corporation Trust Company.
2.05. NAMES AND ADDRESSES OF THE PARTNERS. The name and business
address of each Partner is as set forth opposite his signature.
ARTICLE III
PURPOSE AND POWERS
3.01. PURPOSE AND POWERS. The purpose of the Partnership is to acquire
Investments that, in the opinion of the General Partner, present opportunities
for Capital Gains and to engage in such other businesses and activities as the
General Partner may, in its discretion, determine. In furtherance of this
purpose, the Partnership shall have all powers necessary, suitable or convenient
for the accomplishment of this purpose, alone or with others, as principal or
agent, including the following:
(a) to buy, sell and otherwise acquire Investments, whether such
Investments are readily marketable or not, except that no such Investment
may be acquired with Designated Investment Receipts;
(b) to invest and reinvest the cash assets of the Partnership in
money-market or other short-term Investments pending (i) the identification
by the General Partner of Investments with suitable Capital Gains
opportunities, (ii) the payment of interest on a loan described in Section
5.02(a), (iii) the repayment of principal on a loan described in Section
5.02(a) with Designated Investment Receipts or (iv) a distribution permitted
under Section 6.05 or Article VIII;
(c) to hold, receive, mortgage, pledge, lease, transfer, exchange or
otherwise dispose of or grant options with respect to and otherwise deal in
and exercise all rights, powers, privileges and other incidents of ownership
or possession with respect to all property held or owned by the Partnership;
(d) to borrow or raise money from time to time and to issue promissory
notes, drafts, bills of exchange, warrants, bonds, debentures and other
negotiable and nonnegotiable instruments and evidences of indebtedness, to
secure payment of the principal of any such indebtedness and the interest
thereon by mortgage, pledge, conveyance or assignment in trust of, or the
granting of a security interest in, the whole or any part of the property of
the Partnership, whether at the time owned or thereafter acquired, to
guarantee the obligations of others and to buy, sell, pledge or otherwise
dispose of any such instrument or evidence of indebtedness;
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(e) to lend any of its property or funds, either with or without
security, at any legal rate of interest or without interest;
(f) to have and maintain one or more offices within or without the
State of Delaware, and in connection therewith, to rent or acquire office
space, engage personnel and compensate them and do such other acts and
things as may be advisable or necessary in connection with the maintenance
of such office or offices;
(g) to open, maintain and close accounts, including margin accounts,
with brokers;
(h) to open, maintain and close bank accounts and draw checks and other
orders for the payment of moneys;
(i) to engage accountants, custodians, investment advisers, attorneys
and any and all other agents and assistants, both professional and
nonprofessional, and to compensate them as may be necessary or advisable;
(j) to form or cause to be formed and to own the stock of one or more
corporations, whether foreign or domestic, and to form or cause to be formed
and to participate in partnerships and joint ventures, whether foreign or
domestic;
(k) to enter into, make and perform all contracts, agreements and other
undertakings as may be necessary or advisable or incident to carrying out
its purpose;
(l) to ▇▇▇ and be sued, to prosecute, settle or compromise all claims
against third parties, to compromise, settle or accept judgment to claims
against the Partnership, and to execute all documents and make all
representations, admissions and waivers in connection therewith; and
(m) to distribute, subject to the limitations hereinafter set forth in
Sections 5.02 and 6.05 or otherwise, at any time and from time to time to
all the Partners cash or Investments or other property of the Partnership or
any combination thereof.
ARTICLE IV
MANAGEMENT AND CONTROL
4.01. AUTHORITY OF GENERAL PARTNER. (a) The management and operation of
the Partnership and the formulation and execution of investment policy shall be
vested exclusively in the General Partner. The General Partner shall, in its
sole discretion, exercise all powers necessary or convenient for the purposes of
the Partnership, including those enumerated in Section 3.01, on behalf and in
the name of the
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Partnership. If at any time the Partnership shall have two or more General
Partners, then each such General Partner shall have the full authority of the
General Partner under this Agreement, provided, however, that any controversy
among the General Partners shall be resolved in favor of the General Partners
having the greater interest in the Partnership (based upon Capital
Contributions).
(b) A Limited Partner shall have no right to, and shall not, take part
in the management or control of the Partnership's business or act for or bind
the Partnership, and shall have only the rights and powers granted to Limited
Partners herein.
(c) No provision of this Agreement shall be construed to preclude any
Partner, or any Affiliate of any Partner, from engaging in any activity
whatsoever, including receiving compensation from issuers of Investments for
investment banking services, managing Investments, participating in Investments,
brokerage or consulting arrangements or acting as an adviser to or participant
in any corporation, partnership, trust or other business entity or from
receiving compensation or profit therefor.
4.02. EXPENSES. To the extent not paid by PaineWebber, the General
Partner shall pay all the expenses of the Partnership, excluding (i) costs and
expenses directly related to the purchase or sale of Investments by the
Partnership (including brokerage fees and commissions, transfer taxes and costs
relating to the registration or qualification for sale of such Investments);
(ii) any Federal, state, local or other taxes of the Partnership; and (iii)
interest expense.
4.03. NO COMPENSATION TO GENERAL PARTNER. The General Partner shall not
receive any fees or other compensation for serving as such pursuant to this
Agreement.
ARTICLE V
CAPITAL CONTRIBUTIONS AND LOANS
5.01. CAPITAL CONTRIBUTIONS. (a) Prior to any Contribution Date, the
General Partner shall prepare and distribute to each prospective Limited Partner
designated pursuant to Section 7.01 a Capital Schedule for such date stating the
current and cumulative Capital Contribution of the General Partner and of such
prospective Limited Partner. The General Partner shall promptly notify each
prospective Limited Partner of any change in such Capital Schedule relating to
the General Partner or such prospective Limited Partner.
(b) On or before each Contribution Date, the General Partner and each
Limited Partner shall make a Capital Contribution to the Partnership in the
amount and in the manner provided on the Capital Schedule for such Contribution
Date. The
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General Partner's Capital Contribution will at all times be an amount equal to
1% of the aggregate Capital Contributions of all Partners.
(c) The General Partner may, in its sole discretion, determine that
Capital Contributions shall be made in any number of installments. If, for any
Contribution Date, the General Partner shall determine that Capital
Contributions shall be made in installments, the Capital Schedule shall provide
the amount of the first installment, which shall be due on the Contribution
Date, and each subsequent installment shall be due in the amount and on the date
determined by the General Partner upon not less than five business days' prior
written notice to each Limited Partner. Any installments paid in the amount and
on the date so determined shall be deemed to have been made as of the applicable
Contribution Date.
5.02. LOANS. (a) Subject to the conditions in Section 5.02(c), promptly
after any Contribution Date, the General Partner shall agree to loan to the
Partnership on an unsecured basis an amount equal to five times the aggregate
amount of capital contributed by the General Partner and Limited Partners on
such Contribution Date, such loan to bear interest from the Drawdown Date at a
variable rate equal to the greater of (i) the rate of interest set forth on the
Reuters Screen LIBO Page which is offered for an amount substantially equal to
the unpaid principal amount of the loan and for the six-month interest period of
the loan plus 0.35% and (ii) the Applicable Federal Rate promulgated under
Section 1274(d) of the Code for short-term loans with semiannual compounding
originating in the month in which (A) the loan is made (in the case of the
initial period) and (B) the day on which each subsequent interest period
commences (in the case of subsequent interest periods), all as set forth more
fully in the form of a promissory note executed and delivered by the Partnership
to the General Partner. The interest period of the loan shall be six months, and
the interest rate on the loan shall be redetermined by the General Partner for
each interest period in accordance with the previous sentence. Interest on the
loan shall be payable semiannually and at maturity. Overdue amounts of principal
or interest on the loan shall bear interest payable on demand at a rate per
annum equal at all times to two percent (2%) per annum above the interest rate
described above. Designated Investment Receipts shall be applied within three
days following the Partnership's receipt thereof to the repayment of the
principal on any loan from the General Partner described in this Section 5.02(a)
which is then outstanding, regardless of the portion of such outstanding loan
allocable to such investment. If there is more than one loan from the General
Partner outstanding at the time the Partnership receives any Designated
Investment Receipts, such receipts shall be applied first to the outstanding
principal amount of the loan which originated earliest in time, and any
remaining portion of such Designated Investment Receipts shall be applied to the
repayment of the outstanding principal amount of the other loans in the order of
their origination. To the extent not previously repaid, any principal amount of
a loan described in this Section 5.02 and any interest thereon shall be due and
payable in full on December 31, 2008.
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(b) At the time that the Partnership makes an Investment, the General
Partner shall drawdown on the loan described in Section 5.02(a) in an amount
that will cause the ratio of Loan Proceeds and Capital Contributions applied to
the purchase price of such Investment to be approximately 5 to 1. The General
Partner may drawdown on the loan at such other times to further the business
purposes of the Partnership.
(c) The obligation of the General Partner to make the loans referred to
in Section 5.02(a) (or to permit any periodic drawdown on such loan) is subject
in the case of each such loan to the conditions that (i) funds are available
therefor, (ii) such loan may be made without jeopardizing the statutory
requirements or loan covenants of PaineWebber and (iii) the General Partner, in
the exercise of its own sound business judgment, shall not have concluded that
such loan is inconsistent with the best interests of PaineWebber at the time
such loan is to be made.
(d) The General Partner shall not have the authority to make any change
in the terms of any loan theretofore agreed to by it pursuant to this Section
5.02 except with the prior written approval of a majority in interest of the
Limited Partners (based upon Limited Partnership Percentages).
(e) The General Partner shall have the authority, on behalf of the
Partnership, to refinance, with a loan from one or more third parties who are
not Affiliates of PaineWebber or the Partnership, all or a portion of any loan
described in this Section 5.02; provided, however, that (i) the proceeds from
such refinancing shall be applied in full to the repayment of the loan described
in Section 5.02(a), and (ii) a reserve which, in the opinion of the General
Partner, is sufficient for the purposes of repayment of any then outstanding
loans under Section 5.02(a) from the General Partner and the interest thereon
and any losses or contingent losses of the Partnership shall have been
established by the Partnership.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.01. ALLOCATION OF INCOME AND LOSS. (a) The net income (or net loss)
of the Partnership shall be determined in each fiscal year in accordance with
the accounting methods followed by the Partnership for Federal income tax
purposes and shall be allocated among the Partners and credited to (or debited
from) their respective Capital Accounts in accordance with their respective
Capital Percentages; provided, however, that if Partners are deemed (in
accordance with any reasonable convention permissible for Federal income tax
purposes and selected by the General Partner) to be admitted to the Partnership
at different times, no Partner shall be allocated items of net income or net
loss allocable to periods prior to such Partner's admission to the
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Partnership, but the Partners shall be specially allocated items of net income
or net loss in the year in which Partners are admitted to the Partnership or in
subsequent years so that, as rapidly as possible, the proportion that any
Partner's Capital Account represents of the aggregate Capital Accounts of all
Partners equals the proportion such Partner's Capital Contribution represents of
all Capital Contributions.
(b) The net loss allocated pursuant to Section 6.01(a) shall not exceed
the maximum amount of net loss that can be so allocated and considered to have
economic effect under Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
(c) If, during any fiscal year or other period of the Partnership, any
Limited Partner unexpectedly receives an adjustment, allocation or distribution
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6)
that causes or increases a deficit in such Limited Partner's Capital Account
balance (as defined for purposes of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and as determined after all other allocations provided for
in this Section 6.01 have been tentatively made as if this Section 6.01(c) were
not in this Agreement), there shall be allocated to such Partner a pro rata
portion of each item of Partnership income, including gross income, and gain for
such year in an amount and manner sufficient to eliminate such Partner's deficit
Capital Account balance as quickly as possible. Notwithstanding any other
provision of this Section 6.01, the General Partner shall make such offsetting
special allocations of Partnership income, gain, loss or deduction in whatever
manner it determines appropriate so that, after such offsetting allocations are
made, each Partner's Capital Account balance is, to the extent possible, equal
to the Capital Account balance such Partner would have had if the preceding
sentence were not part of the Agreement and all Partnership items were allocated
pursuant to Sections 6.01(b) and (c).
6.02. LIABILITY OF GENERAL AND LIMITED PARTNERS. (a) The General
Partner shall have unlimited liability for the satisfaction and discharge of all
losses, liabilities and expenses of the Partnership.
(b) Each Limited Partner and former Limited Partner shall be liable for
the satisfaction and discharge of all losses, liabilities and expenses of the
Partnership allocable to him pursuant to Section 6.03, but only to the extent of
his aggregate Capital Contribution. In no event shall any Limited Partner or
former Limited Partner be obligated to make any additional capital contribution
to the Partnership in excess of his initial Capital Contribution, or have any
liability in excess of his aggregate Capital Contribution for the satisfaction
and discharge of the losses, liabilities and expenses of the Partnership.
However, after any Limited Partner or former Limited Partner has received the
return in whole or in part of any Capital Contribution, he shall nevertheless be
liable to the Partnership for the amount of cash, Investments or other assets
(valued as of the date of distribution thereof) so received necessary to
discharge any losses, liabilities and expenses of the Partnership to creditors
who extended credit or whose
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claims arose before such distribution was made, to the extent that the assets of
the Partnership are not sufficient to discharge such losses, liabilities and
expenses. Notwithstanding the foregoing, if the General Partner has purchased
the partnership interest of a former Limited Partner pursuant to Section
7.02(b), the purchase price received by such former Limited Partner on such sale
shall not be deemed to be a return of any of such former Limited Partner's
Capital Contribution.
(c) A Partner shall not have any obligation to the Partnership or to
any other Partner to restore any negative balance in the Capital Account of such
Partner. Until distribution of any such Partner's interest in the Partnership
upon the dissolution of the Partnership, neither his Capital Account nor any
part thereof shall be subject to withdrawal or redemption except with the
consent of the General Partner.
6.03. ALLOCATIONS FOR TAX PURPOSES. (a) All items of income, deduction
and credit realized by or allowable to the Partnership shall be determined and
allocated among the Partners for Federal, state and local income tax purposes in
the same manner as set forth in Section 6.01.
(b) The General Partner shall be the "tax matters partner" for all
purposes of the Code and shall have the power and authority to effect the
allocations provided for in this Section 6.03 and to take such actions as the
tax matters partner is required or permitted to take under the Code and to take
all other actions that in the good faith opinion of the General Partner are
necessary or convenient for the Partnership to take to ensure compliance with
the Code or any other applicable law or regulation. Notwithstanding any other
provision of this Agreement to the contrary, if in the good faith opinion of the
General Partner any of the allocations provided for in this Section 6.03 shall
be prohibited by the Code or other applicable law or regulation or shall subject
the Partnership or any Partner to legal penalty or onerous condition, the
General Partner shall have the power and authority to modify any such allocation
to the extent necessary to comply with the Code or other applicable law or
regulation or to avoid such legal penalty or onerous condition.
6.04. VALUATION. For the purpose of determining Net Value, the value of
any Investment as of any date (or in the event such date is not a business day,
as of the next preceding business day) shall be determined as follows:
(a) marketable Investments listed on a national securities exchange
shall be valued at the last sales price on the date of valuation or, in the
absence of a sale on such date, at the last bid price on the date of
valuation;
(b) marketable Investments traded in the over-the-counter market and
reported in the National Association of Securities Dealers' Automated
Quotation System will be valued at the closing bid price as reported by such
system; and
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(c) all other Investments shall be valued at fair market value.
All valuation decisions pursuant to this Section 6.04 shall be made by
the General Partner.
6.05. DISTRIBUTIONS. (a) Following the date that the Limited Partners
become fully vested in their interests in the Partnership in accordance with
Section 7.02(a) (the "Vesting Date"), all cash receipts of the Partnership not
required to be applied to the repayment of the loan or loans from the General
Partner by Section 5.02(a) above (excluding cash receipts from an Investment
described in Section 3.01(b) and, at the discretion of the General Partner, from
Special Investments) (i) with respect to any Capital Gain realized on or after
the Vesting Date shall be distributed as soon as practicable after the receipt
thereof to the Partners and (ii) with respect to any Capital Gain realized prior
to the Vesting Date for which a distribution has been delayed by the General
Partner in accordance with the next sentence shall be distributed as soon as
practicable after such Vesting Date, in either case in proportion to their
respective Capital Accounts. Prior to the Vesting Date and except as otherwise
required by Section 6.05(b), the cash receipts of the Partnership with respect
to any Capital Gain realized prior to the Vesting Date which are not required to
be applied to the repayment of the loan or loans from the General Partner by
Section 5.02(a) above (including cash receipts from an investment described in
Section 3.01(b) or from Special Investments) may, in the sole discretion of the
General Partner, (i) be distributed in whole or in part in one or more
installments prior to the Vesting Date to the Partners in proportion to their
Capital Accounts or (ii) be retained in whole or in part by the Partnership
until such time (and in such manner) as such cash receipts are required to be
distributed to the Partners in accordance with the preceding sentence. Anything
in this Section 6.05 to the contrary notwithstanding, in no event shall (A) a
distribution be made under this Section 6.05(a) unless (I) the loans described
in Section 5.02(a) have been completely repaid and the Partnership has agreed
with the General Partner that no future loans will be drawn down or (II) the
Partnership shall have established a reserve which, in the opinion of the
General Partner, is sufficient for the purposes of repayment of any outstanding
and future loans, the interest thereon and any interest which may accrue and any
losses or contingent losses of the Partnership or (B) the amount to be
distributed to the Partners under this Section 6.05 exceed the Net Capital Gain
of the Partnership at the time of such distribution.
(b) To the extent cash is available to the Partnership, the General
Partner shall make annual distributions of cash to the Partners for payment of
applicable Federal, state and local taxes on any substantial amount of net
realized taxable income not otherwise distributed to the Partners for any fiscal
year of the Partnership. Such distributions shall be disbursed as soon as
possible after preparation and mailing of the report provided for in Section
9.02. The aggregate amount of any such distribution shall be determined by the
General Partner, subject to the limitation that the minimum
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aggregate amount of such distribution be the tax that would be payable if the
taxable income of the Partnership were all allocated to an individual subject to
the then-prevailing maximum combined Federal, New York State and New York City
tax rates (taking into account the extent to which the taxable income allocated
by the Partnership was composed of long-term capital gains and the extent to
which state and local income taxes may be deductible for Federal income tax
purposes). Each such distribution shall be allocated among the Partners in
accordance with the allocation of taxable income to the Partners pursuant to
Section 6.03.
(c) In addition to distributions required by Section 6.05(a) and
Section 6.05(b), the General Partner may, in its sole discretion, subject to the
terms of any applicable investment agreement to which the Partnership is a
party, at any other time make distributions to the Partners of cash, Investments
or other assets or any combination thereof; provided, however, that (A) no
distribution may be made under this Section 6.05(c) unless (I) the loans
described in Section 5.02(a) have been completely repaid and the Partnership has
agreed with the General Partner that no future loans will be drawn down or (II)
the Partnership shall have established a reserve which, in the opinion of the
General Partner, is sufficient for the purposes of repayment of any outstanding
loans and the interest thereon and any losses or contingent losses of the
Partnership and (B) no distribution may exceed the Net Capital Gain of the
Partnership at the time of such distribution. Each such distribution shall be
allocated to the Partners in accordance with their respective Capital Accounts.
(d) Subject to Section 6.05(b), the General Partner may, in its sole
discretion, reinvest some or all of the income or capital gains received with
respect to a Special Investment.
ARTICLE VII
PARTNERS
7.01. DESIGNATION OF LIMITED PARTNERS. (a) The General Partner may at
any time invite any Person to become a Limited Partner by delivery of a Capital
Schedule prepared in accordance with Section 5.01. Any Person so invited who
agrees in writing prior to the Contribution Date to make the Capital
Contribution set forth on such Capital Schedule shall have the opportunity to do
so, but no Person shall be deemed to be a Limited Partner until he has made a
Capital Contribution and been admitted to the Partnership pursuant to Section
7.05.
(b) At the request of any employee of PaineWebber who has been invited
by the General Partner to become a Limited Partner, the General Partner may, in
its sole discretion, permit a trust designated by such employee to make the
Capital Contribution for such person and to become a Limited Partner of the
Partnership. If under such
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circumstances a trust is admitted as a Limited Partner, all references herein to
the termination of employment of a Limited Partner or to any Final Event with
respect to a Limited Partner shall be deemed to refer both to such trust and to
the employee of PaineWebber who designated such trust. All references herein to
an employee of PaineWebber shall include consultants to PaineWebber, and all
references herein to employment by PaineWebber shall include the performance of
services for PaineWebber as a consultant.
(c) The General Partner's right to designate all the Limited Partners
shall be exercised in its sole discretion and shall not be subject to challenge
by any Limited Partner. The fact that a Limited Partner was a limited partner
with respect to a previous partnership sponsored or established by PaineWebber
shall not confer upon him any right to be a Limited Partner of this Partnership.
7.02. VESTING OF INTERESTS; PURCHASE OF A LIMITED PARTNER'S INTEREST.
(a) Prior to the third anniversary of the first Contribution Date on which a
Limited Partner makes a contribution to the Partnership, such Limited Partner
shall be entirely invested in his interest in the Partnership. On and after the
third anniversary of such Contribution Date, such Limited Partner shall be
entirely vested in his interest in the Partnership. Notwithstanding anything in
this Section 7.02(a) to the contrary, the General Partner (acting unanimously in
the case of multiple General Partners), with the consent of the Compensation
Committee (or, after an Operative Date has been declared, without such consent),
may at any time or from time to time accelerate, in whole or in part, the
vesting of all (but not less than all) of the Limited Partners. All Limited
Partners shall be entirely vested in their interests upon the complete repayment
by the Partnership of all loans and any interest accrued thereon and, in
connection therewith, the agreement by the Partnership that it shall no longer
be entitled to loans under Section 5.02.
(b) In the event the employment of a Limited Partner by PaineWebber
shall terminate for any reason whatsoever (other than death, permanent
disability as determined by the Board of Directors of PWI, retirement pursuant
to any then existing pension or retirement plan of PaineWebber or otherwise with
the prior approval of the Compensation Committee), the General Partner shall
have the right, exercisable in its sole discretion and on written notice given
within the one hundred twenty (120) calendar day period beginning on the day
following the date of such termination, to purchase for cash such Limited
Partner's interest in the Partnership (or, if such Person has ceased to be a
Limited Partner, his rights or the rights of his Successor in Interest, if any,
to receive allocations and distributions with respect thereto) at a price
determined as follows:
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(i) If such termination occurs on or after such Limited Partner becomes
entirely vested in his interest in the Partnership, an amount equal to the
sum of (A) such Limited Partner's Capital Account (calculated as of the last
business day of the Partnership's fiscal quarter in which such Limited
Partner ceased to be employed by PaineWebber) plus (or minus) (B) such
Limited Partner's share (based on his Capital Percentage) of any unrealized
appreciation (or depreciation) in the Net Value of each Investment held by
the Partnership;
(ii) If such termination occurs before such Limited Partner becomes
entirely vested in his interest in the Partnership, an amount equal to the
lesser of (A) the sum calculated as set forth in subparagraph (i) above or
(B) the sum of such Limited Partner's Capital Contribution.
7.03. TRANSFER OF A LIMITED PARTNER'S INTEREST. Each Limited Partner
shall have the right to sell, assign, mortgage, pledge or otherwise dispose of
or transfer all or any part of the interest in the Partnership to which such
Limited Partner is entitled, but only with the prior written consent of the
General Partner. No Person acquiring any Limited Partner's interest in the
Partnership shall become a Partner of the Partnership, or acquire such Limited
Partner's right to participate in the affairs of the Partnership to the extent
permitted herein, unless such person shall be admitted as a Limited Partner
pursuant to Section 7.05. Such Person, however, shall, to the extent of the
interest transferred to him, be entitled to such Limited Partner's share of
allocations and distributions pursuant to Articles VI and VIII (subject to the
right of the General Partner to purchase such interest pursuant to Section
7.02(b)).
7.04. TRANSFER OF GENERAL PARTNER'S INTEREST. The General Partner may
not transfer or assign its interest as General Partner of the Partnership to any
Person other than PaineWebber, and no such transfer or assignment shall be
effective unless and until the transferee or assignee shall have been admitted
to the Partnership as a General Partner in accordance with Section 7.06.
7.05. ADMISSION OR SUBSTITUTION OF NEW LIMITED PARTNERS. (a) The
General Partner shall admit as an additional Limited Partner any person not
already a Limited Partner who shall make a Capital Contribution in accordance
with Section 5.01. The General Partner also shall have the right, in its sole
discretion, to admit as a substitute or additional Limited Partner any Person
who acquires in accordance with this Agreement the interest in the Partnership,
or any part thereof, of a Limited Partner. The admission of any Person as a
substitute or additional Limited Partner shall be in writing signed by the
General Partner but shall not be effective until such Person's written
acceptance and adoption of all the terms and provisions of this Agreement. The
General Partner's failure or refusal to admit a transferee (as to whom the
General Partner has given his written consent pursuant to Section 7.03) as a
substitute or additional Limited Partner shall not affect the right of such
transferee to receive
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allocations and distributions pursuant to Articles VI and VIII to which his
predecessor in interest was entitled.
(b) If the General Partner permits a Limited Partner to transfer all or
part of such Limited Partner's interest to a trust designated by such Limited
Partner, and the General Partner admits such trust into the Partnership as a
Limited Partner, all references herein to the termination of employment of a
Limited Partner or to any Final Event with respect to a Limited Partner shall be
deemed to refer both to such trust and to the employee of PaineWebber who
transferred such interest to such trust.
(c) A transferee who is admitted as a substitute or additional Limited
Partner pursuant to this Section 7.05 shall reimburse the General Partner or
PaineWebber, as necessary, for any out-of-pocket expenses incurred by it
directly as a result of such transferee's admission to the Partnership.
7.06. ADMISSION OF SUBSTITUTE OR ADDITIONAL GENERAL PARTNERS. (a) No
Person other than PaineWebber shall be admitted to the Partnership as a General
Partner unless such Person shall have been designated in writing by the Limited
Partners. Except where this Agreement provides otherwise, the Limited Partners
may designate a Person to be admitted as a General Partner by the action of
two-thirds in interest of the Limited Partners (based upon Limited Partnership
Percentages).
(b) Subject to Section 7.06(a), the admission of a Person to the
Partnership as General Partner shall become effective when such Person shall
have agreed in writing to adopt and accept this Agreement and to be bound by all
its terms and provisions as a General Partner.
(c) Notwithstanding any other provision of this Agreement, on the
Operative Date the then General Partner(s) shall automatically be deemed to have
been removed as such without any further action of any nature whatsoever by the
Limited Partners or such General Partner(s), and each such former General
Partner shall thereupon cease to be a Partner, and the then Senior Limited
Partners shall thereupon automatically become the only General Partners without
any further action of any nature whatsoever by the Limited Partners or the
former General Partner(s). All rights and interests of such Senior Limited
Partners as limited partners of the Partnership shall continue in effect without
change even though such Senior Limited Partners shall also be General Partners.
(d) Within 30 days after the admission of a General Partner pursuant to
this Section 7.06, the General Partner shall cause the Certificate of Limited
Partnership of the Partnership to be amended in accordance with Section 17-202
of the Delaware Act.
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7.07. WITHDRAWAL OF A LIMITED OR GENERAL PARTNER. (a) A Limited Partner
may not withdraw from the Partnership without the consent of the General
Partner, which may be withheld for any reason whatsoever or for no reason.
(b) Subject to Section 7.07(c), a General Partner may withdraw from the
Partnership as of the end of any fiscal year by delivery to each of the Limited
Partners of written notice of such withdrawal not less than 50 days before the
effective date thereof.
(c) The withdrawal of any Partner shall be a Final Event with respect
to such Partner, within the meaning of Section 7.08.
7.08. FINAL EVENTS WITH RESPECT TO A PARTNER. Upon the occurrence of a
Final Event with respect to any Partner, such Partner shall thereupon cease to
be a Partner. If such a Final Event shall occur, no Successor in Interest to any
such Partner shall for any purpose hereof become or be deemed to become a
Partner. The sole right, as against the Partnership and the remaining Partners,
acquired hereunder by, or resulting hereunder to, a Successor in Interest to any
Partner shall be to receive any distributions and allocations pursuant to
Articles VI and VIII (subject to the right of the General Partner to purchase
the interest of such former Partner pursuant to Section 7.02(b)) to the extent,
at the time, in the manner and in the amount otherwise payable to such Partner
had such a Final Event not occurred, and no other right shall be acquired
hereunder by, or shall result hereunder to, a Successor in Interest to such
Partner, whether by operation of law or otherwise. Until distribution of any
such Partner's interest in the Partnership upon the dissolution of the
Partnership as provided in Article VIII, neither his Capital Account nor any
part thereof shall be subject to withdrawal or redemption without the consent of
the General Partner. The Partnership shall be entitled to treat any Successor in
Interest to such Partner as the only Person entitled to receive distributions
and allocations hereunder.
7.09. CONTINUATION OF PARTNERSHIP. If a Final Event shall occur with
respect to one or more Limited Partners, no dissolution or termination of the
Partnership shall be effected thereby, and the remaining Partners shall continue
the Partnership and its business until the dissolution or termination thereof as
provided herein. If a Final Event shall occur with respect to a General Partner
and there is no other General Partner in the Partnership, the Partnership shall
terminate and shall be dissolved by the Limited Partners in accordance with
Article VIII, unless, within 30 days after the occurrence of any such Final
Event, (i) all the Limited Partners elect to continue the business of the
Partnership and (ii) all the obligations of the General Partner hereunder are
assumed by a successor General Partner approved in writing by all the Limited
Partners, in which case the Partnership shall not be dissolved but shall
continue.
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7.10. REMOVAL OF GENERAL PARTNER. At any time after all loans made to
the Partnership by the General Partner pursuant to Section 5.02 have been paid
in full, the Partners may, by the action of Limited Partners having a majority
interest in the Partnership (based upon Limited Partnership Percentages), remove
the General Partner, which shall thereupon cease to be a Partner, and in such
case the Limited Partners, by the action of Limited Partners having a majority
interest in the Partnership (based upon Limited Partnership Percentages), shall
designate a new General Partner which shall have the right to manage the affairs
of the Partnership and to vote as a Partner to the extent of any interest in the
Partnership. The sole right, as against the Partnership and the remaining
Partners, of a General Partner removed pursuant to this Section 7.10 or pursuant
to Section 7.06(c) shall be to receive any distributions and allocations
pursuant to Articles VI and VIII, to the extent, in the manner and in the amount
otherwise payable to it had it not been so removed, and no other rights shall be
acquired hereunder by, or shall result hereunder to, such removed General
Partner, whether by operation of law or otherwise. The Partnership shall be
entitled to treat such removed General Partner as the only person entitled to
receive distributions and allocations hereunder. Until distribution of such
removed General Partner's interest in the Partnership upon the dissolution of
the Partnership as provided in Article VIII, neither its capital account nor any
part thereof shall be subject to withdrawal or redemption.
7.11. COMPLIANCE WITH LAW. Notwithstanding any provision hereof to the
contrary, no sale or other disposition of an interest in the Partnership may be
made except in compliance with all Federal, state and other applicable laws,
including Federal and state securities laws.
ARTICLE VIII
DISSOLUTION OF THE PARTNERSHIP
8.01. DISSOLUTION. (a) The General Partner may, at any time prior to
the occurrence of a Change of Control, dissolve the Partnership effective as of
the end of the fiscal year during which such notice is given by written notice
delivered to the Limited Partners not less than 30 days before the effective
date of such dissolution. After the occurrence of a Change of Control, the
General Partner shall not have the power or authority to dissolve the
Partnership without the consent of 80% of the Limited Partners (based upon
Limited Partnership Percentages).
(b) When the Partnership is dissolved, whether by expiration of its
full term (subject to extension as provided in Section 2.02) or otherwise, the
business and property of the Partnership shall be wound up and liquidated by the
General Partner or, in the event of the unavailability of the General Partner,
such Limited Partners or other Persons as shall be named by a majority in
interest (based upon Limited Partnership Percentages).
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(c) Within 60 days after the effective date of dissolution of the
Partnership, the Partnership's assets (except, in the case of clause (iii)
below, for amounts reserved pursuant to Section 8.02) shall be distributed in
the following manner and order:
(i) first, all debts and liabilities to creditors of the Partnership
who are not Partners shall be paid and discharged or provision therefor
shall be made (through reserve accounts or otherwise);
(ii) second, the claims of all creditors of the Partnership who are
Partners shall be paid and discharged or provision therefor shall be made
(through reserve accounts or otherwise); and
(iii) third, the remaining assets of the Partnership shall be paid to
the Partners in cash or Investments pro rata in accordance with the
Partners' Capital Accounts. Investments divisible only into shares or other
units shall be distributed pro rata to the extent practicable; leftover
shares shall be sold and the cash distributed unless reserved in accordance
with Section 8.02.
8.02. AMOUNTS RESERVED. (a) If there are any Investments which, in the
judgment of the General Partner (or any other appropriate party selected
pursuant to Section 8.01(b)), cannot be sold, or properly distributed in kind in
the case of dissolution, without sacrificing a significant portion of the value
thereof, the value of a Partner's interest in each such Investment may be
excluded from the amount distributed to such Partner pursuant to Section
8.01(c)(iii). Any Partner's interest, including his pro rata interest in any
gains, losses or distributions, in Investments so excluded shall not be paid or
distributed until such time as the General Partner (or any other appropriate
party selected pursuant to Section 8.01(b)) shall determine.
(b) If there is any pending transaction, or claim by or against the
Partnership, as to which the interest or obligation of any Partner therein
cannot, in the judgment of the General Partner (or any other appropriate party
selected pursuant to Section 8.01(b)), be then ascertained, the value thereof or
probable loss therefrom may be deducted from the amount distributable to such
Partner pursuant to Section 8.01(c)(iii). No amount shall be paid or charged to
any such Partner on account of any such transaction or claim until its final
settlement or such earlier time as the General Partner (or any other appropriate
party selected pursuant to Section 8.01(b)) shall determine. The Partnership may
meanwhile retain from other sums due such Partner an amount which the General
Partner (or any other appropriate party selected pursuant to Section 8.01(b))
estimates to be sufficient to cover the share of such Partner in any probable
loss or liability on account of such transaction or claim.
(c) Upon determination by the General Partner (or any other appropriate
party selected pursuant to Section 8.01(b)) that circumstances no longer require
the
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exclusion of Investments or retention of sums as provided in Sections 8.02(b)
and (c), the General Partner (or any other appropriate party selected pursuant
to Section 8.01(b)) shall, at the earliest practicable time, pay such sums or
distribute such Investments or the proceeds realized from the sale of such
Investments to each Partner from whom such sums or Investments have been
withheld.
ARTICLE IX
REPORTS TO PARTNERS
9.01. BOOKS OF ACCOUNT. Appropriate books of account shall be kept, on
a cash basis, at the principal place of business of the Partnership, and each
Partner shall have access to all books, records and accounts and the right to
make copies thereof under such conditions and restrictions as the General
Partner may reasonably prescribe.
9.02. AUDIT AND REPORT. (a) The books and records of the Partnership
shall be audited and reported on as of the end of each fiscal year by
accountants selected by the General Partner for this purpose. Within 120 days
after the end of each fiscal year or, if later, as soon as practicable after
receipt of applicable financial information, the Partnership will cause to be
mailed to each Partner a written report, which shall include (i) a statement
prepared by the Partnership setting forth such Partner's Capital Account and the
amount of such Partner's allocable share of the Partnership's items of income
and deduction, capital gain and loss or credit for such year, in sufficient
detail to enable him to prepare his Federal, state, local and other tax returns
and (ii) a balance sheet, a statement of income and expense and a statement of
changes in financial position of the Partnership for such fiscal year.
(b) At the same time as financial statements are furnished pursuant to
Section 9.02(a), the Partnership shall cause to be mailed to each Partner a
written report setting forth a brief description of each Investment held by the
Partnership as of the end of such fiscal year, the cost and value of each such
Investment as determined by the General Partner and a brief description of the
nature of the business of the issuer of each such Investment.
(c) The Partnership shall cause to be mailed to each Limited Partner a
copy of the Partnership's Federal, state and local income tax returns for each
year promptly after such returns become available.
(d) The General Partner shall also cause to be delivered to each
Limited Partner such other information as such Limited Partner may reasonably
request for the purpose of enabling him to comply with any reporting or filing
requirements imposed by any governmental agency or authority pursuant to any
statute, rule, regulation or otherwise.
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9.03. FISCAL YEAR. The fiscal year of the Partnership shall end on
December 31 of each calendar year unless otherwise determined by the General
Partner.
ARTICLE X
MISCELLANEOUS
10.01. GOVERNING LAW. The terms of this Agreement and all rights and
obligations of the Partners hereunder shall be governed by the laws of the State
of Delaware.
10.02. INDEMNIFICATION. The General Partner shall not be liable to any
Partner for any action taken or not taken by it or for any action taken or not
taken by any other Partner or other person with respect to the Partnership. The
Partnership shall indemnify the General Partner and each of its officers and
directors against any losses, claims, damages or liabilities (including legal or
other expenses reasonably incurred in investigating or defending against any
such losses, claims, damages or liabilities), joint or several, to which it the
General Partner may become subject by reason of its being the General Partner or
to which such officers and directors may become subject by reason of their being
officers and directors of the General Partner. Notwithstanding the above, the
General Partner shall not be exculpated or exonerated from liability, and the
General Partner and each of its officers and directors shall not be indemnified
against loss, for violations of Federal or state securities laws, or for any
other intentional or criminal wrongdoing. Limited Partners will not be
personally obligated with respect to indemnification pursuant to this Section
10.02.
10.03. NOTICE. All notices hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered or mailed by registered
or certified mail, return receipt requested, to the Partnership at ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of PaineWebber Partners II,
Inc., or such other address or addresses as to which the Partners shall have
been given notice, and to the Partners at the addresses as to which the
Partnership shall have been given notice.
10.04. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which together shall constitute a single instrument. It
shall not be necessary that any counterpart be signed by all the parties so long
as all counterparts signed by each Limited Partner shall also be signed by the
General Partner.
10.05. COMPLETENESS AND AMENDMENTS. This Agreement sets forth the
entire understanding of all the parties. The provisions of this Agreement shall
not be amended except by an instrument in writing executed (i) by the General
Partner (or, if
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there is more than one General Partner, by the General Partner or Partners
entitled to act for the Partnership in accordance with the proviso to the last
sentence of Section 4.01(a)) and (ii) by a majority in interest of the Limited
Partners (based upon Limited Partnership Percentages), except that any provision
of this Agreement requiring the approval or consent of greater than a majority
in interest of the Limited Partners shall not be amended except by an instrument
in writing executed by the percentage in interest of Limited Partners whose
approval or consent would be required by such provision; provided, however, that
no amendment of any provision of this Agreement shall, unless the same shall be
in writing and signed by a lender described in Section 5.02 above, adversely
affect the rights and duties of such lender under any promissory note delivered
in connection with a loan made by it to the Partnership pursuant to Section
5.02.
10.06. POWER OF ATTORNEY. The Limited Partners hereby appoint the
person who from time to time shall be a General Partner, including a successor
General Partner pursuant to Section 7.06(c), as their true and lawful
representative and attorney-in-fact, in their name, place and ▇▇▇▇▇ to make,
execute, sign and file all instruments, documents and certificates which, from
time to time, may be required by this Agreement (including Section 7.06(d)) or
by the laws of the United States of America, the State of Delaware or any other
state in which the Partnership shall determine to do business, or any political
subdivision or agency thereof, to execute, implement and continue the valid and
subsisting existence of the Partnership. The General Partner, as representative
and attorney-in-fact, however, shall not have any rights, powers or authority to
amend or modify this Agreement when acting in such capacity, except as expressly
provided herein. Such power of attorney is coupled with an interest and shall
continue in full force and effect notwithstanding the subsequent occurrence of a
Final Event with respect to any Limited Partner.
29
IN WITNESS WHEREOF, the parties hereto have hereunto executed
this Agreement as of the date first above written.
GENERAL PARTNER:
PAINEWEBBER PARTNERS II, INC.
By:
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Address of General Partner:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LIMITED PARTNER:
---------------------------
Name:
---------------------------
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Address
THE LIMITED PARTNERSHIP INTERESTS EVIDENCED BY THIS PARTNERSHIP
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR UNDER ANY STATE SECURITIES LAW AND MUST BE HELD
INDEFINITELY UNLESS SOLD IN COMPLIANCE WITH ALL APPLICABLE
SECURITIES LAWS.
