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Exhibit 10.17
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CLEVELAND INDIANS BASEBALL COMPANY LIMITED PARTNERSHIP
Dated as of _______________, 1998
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS, ETC.....................................................1
1.1 DEFINITIONS............................................................1
1.2 EXHIBITS..............................................................15
ARTICLE 11 ORGANIZATION ......................................................15
2.1 CONTINUATION .........................................................15
2.2 NAME .................................................................16
2.3 CHARACTER OF THE BUSINESS ............................................16
2.4 LOCATION OF THE PRINCIPAL PLACE OF BUSINESS ..........................16
2.5 REGISTERED AGENT AND REGISTERED OFFICE ...............................17
ARTICLE III TERM..............................................................17
ARTICLE IV CONTRIBUTIONS TO CAPITAL...........................................18
4.1 CAPITAL CONTRIBUTIONS.................................................18
4.2 ADDITIONAL CAPITAL CONTRIBUTIONS......................................18
4.4 PARTNER GUARANTEES....................................................20
4.5 NO THIRD PARTY BENEFICIARY............................................21
4.6 NO INTEREST; NO RETURN; NO ADDITIONAL REQUIRED CAPITAL CONTRIBUTION ..21
ARTICLE V CONDITIONS .........................................................22
5.1 GENERAL PARTNER CONDITIONS ...........................................22
ARTICLE VI ALLOCATIONS OF NET INCOME OR NET LOSS AND OTHER TAX AND
ACCOUNTING MATTERS...................................23
6.1 ALLOCATIONS...........................................................23
6.2 DISTRIBUTIONS.........................................................23
6.3 BOOKS OF ACCOUNT......................................................24
6.4 REPORTS...............................................................24
6.5 AUDITS................................................................25
6.6 TAX ELECTIONS AND RETURNS.............................................25
6.7 TAX MATTERS PARTNER...................................................25
6.8 RESTRICTED DISTRIBUTIONS..............................................26
6.9 WITHHOLDING...........................................................27
ARTICLE VII RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL PARTNER ...........27
7.1 EXPENDITURES BY PARTNERSHIP...........................................27
7.2 POWERS AND DUTIES OF GENERAL PARTNER..................................28
7.3 MAJOR DECISIONS.......................................................31
7.4 ACTIONS WITH RESPECT TO CERTAIN DOCUMENTS.............................31
7.5 TITLE HOLDER..........................................................31
7.6 COMPENSATION OF THE GENERAL PARTNER...................................32
7.7 WAIVER AND INDEMNIFICATION............................................32
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ARTICLE VIII DISSOLUTION, LIQUIDATION AND TERMINATION ........................33
8.1 ACCOUNTING ..........................................................33
8.2 DISTRIBUTION ON DISSOLUTION .........................................33
8.3 TIMING REQUIREMENTS .................................................34
8.4 SALE OF PARTNERSHIP ASSETS ..........................................34
8.5 DISTRIBUTIONS IN KIND ...............................................35
8.6 DOCUMENTATION OF LIQUIDATION ........................................35
8.7 LIABILITY OF THE LIQUIDATING TRUSTEE ................................35
8.8 CREDITING OF GAIN (LOSS) ON LIQUIDATION .............................36
ARTICLE IX TRANSFER OF PARTNERSHIP INTERESTS..................................37
9.1 GENERAL PARTNER TRANSFER.............................................37
9.2 TRANSFERS By LIMITED PARTNERS........................................37
9.3 RESTRICTIONS ON TRANSFER.............................................38
9.4 REGISTRATION RIGHTS..................................................39
ARTICLE X RIGHTS AND OBLIGATIONS OF BE LIMITED PARTNERS.......................40
10.1 NO PARTICIPATION IN MANAGEMENT.......................................40
ARTICLE XI GRANT OF RIGHTS TO LIMITED PARTNER.................................41
11.1 GRANT OF RIGHTS......................................................41
11.2 TERMS OF RIGHTS......................................................42
11.3 REISSUANCE OR REALLOCATION OF PARTNERSHIP UNITS......................42
ARTICLE XII LIMITED PARTNER REPRESENTATIVES AND WARRANTIES....................42
12.1 REPRESENTATIONS AND WARRANTIES OF THE LIMITED PARTNER................42
ARTICLE XIII GENERAL PARTNER REPRESENTATIONS AND WARRANTIES...................43
13.1 REPRESENTATIONS AND WARRANTIES OF THE LIMITED PARTNER................43
ARTICLE XIV GENERAL PROVISIONS................................................43
14.1 NOTICES..............................................................43
14.2 SUCCESSORS...........................................................44
14.3 EFFECT AND INTERPRETATION............................................44
14.4 COUNTER..............................................................44
14.5 PARTNERS NOT AGENTS..................................................44
14.6 ENTIRE UNDERSTANDING.................................................44
14.7 AMENDMENTS...........................................................44
14.8 SEVERABILITY.........................................................45
14.9 TRUST PROVISION......................................................45
14.10 PRONOUNS AND HEADINGS................................................45
14.11 ASSURANCES...........................................................46
14.12 POWER OF ATTORNEY....................................................46
14.13 DURATION OF POWER....................................................47
Exhibit A - Allocations and Other Tax Matters
Exhibit B - Partnership Interests
Exhibit C - Terms of Limited Partners Registration Rights
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Exhibit D - Rights Terms
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FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF CLEVELAND INDIANS BASEBALL COMPANY LIMITED PARTNERSHIP
THIS FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP is made and entered into as of the ______ day of ____________, 1998,
by and among the undersigned parties.
WITNESSETH:
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WHEREAS, Cleveland Indians Baseball Company Limited
Partnership, an Ohio limited partnership (the "Partnership"), was formed by the
filing for record of a Certificate of Limited Partnership, dated as of November
10, 1986, with the Cuyahoga County Recorder pursuant to and in accordance with
Chapter 1782 of the Ohio Revised Code (the "Original Certificate");
WHEREAS, the undersigned desire to continue the Partnership as
a limited partnership and to amend and restate in its entirety the Limited
Partnership Agreement of the Partnership, dated as of November 10, 1986 (the
"Original Agreement").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, hereby agree as follows:
ARTICLE I
DEFINITIONS, ETC.
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1.1 DEFINITIONS. Except as otherwise herein expressly provided
or unless the context otherwise requires, the following terms and phrases shall
have the meanings set forth below whenever used in this Agreement and the
Exhibits hereto:
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"ACCOUNTANTS" shall mean Deloitte & Touche LLP or such other
firm or firms of independent certified public accountants selected by the
General Partner on behalf of the Partnership to audit the books and records of
the Partnership and to prepare statements and reports in connection therewith.
"ACT" shall mean Chapter 1782 of the Ohio Revised Code, as the
same may hereafter be amended from time to time.
"ADDITIONAL CAPITAL CONTRIBUTIONS" shall have the meaning set
forth in Section
"ADDITIONAL UNITS" shall have the meaning set forth in Section
4.3 hereof.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean, with respect to
any Partner, the deficit balance, if any, in such Partner's Capital Account as
of the end of any relevant taxable year and after giving effect to the following
adjustments:
(a) credit to such Capital Account any amounts which
such Partner is obligated or treated as obligated to restore
with respect to any deficit balance in such Capital Account
pursuant to Section 1.704-l(b)(2)(ii)(c) of the Regulations,
or is deemed to be obligated to restore with respect to any
deficit balance pursuant to the penultimate sentence of each
of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the
Regulations; and
(b) debit to such Capital Account the items described
in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the
Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the requirements of the alternate test for economic effect contained
in Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted
consistently therewith.
"ADMINISTRATIVE EXPENSES" shall mean all administrative and
operating costs and expenses incurred by the Partnership and all General Partner
Expenses.
"AFFILIATE" shall mean, with respect to any Partner (or to any
other Person, the affiliates of whom are relevant for purposes of any of the
provisions of this Agreement), (i) such Partner's spouse, parents, descendants,
brothers and sisters; (ii) any trust for the benefit of any
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Person referred to in the preceding clause (i); or (iii) any Entity which,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with, any Person referred to in the
preceding clauses (i) and (ii).
"AGREEMENT" shall mean this First Amended and Restated Agreement
of Limited Partnership, as originally executed and as amended, modified,
supplemented or restated from time to time, as the context requires.
"ARTICLES" shall mean the Amended and Restated Articles of
Incorporation of the General Partner, as amended, modified, supplemented or
restated from time to time.
"AUDITED FINANCIAL STATEMENTS" shall mean financial statements
(balance sheets, statements of income, statements of partners' equity and
statements of cash flows) prepared in accordance with GAAP and accompanied by an
independent auditor's opinion.
"BALLPARK MANAGEMENT ASSETS" shall mean the assets, business,
contract rights and liabilities of Ballpark Management Company, an Ohio
corporation, immediately prior to the merger of Ballpark Management Company into
the General Partner pursuant to the Reorganization Agreement.
"BANKRUPTCY" shall mean, with respect to any Partner, (i) the
commencement by such Partner of any proceeding seeking relief as to such Partner
as debtor or bankrupt under any provision or chapter of the Bankruptcy Code or
any other federal or state law relating to insolvency, bankruptcy or similar
reorganization; (ii) an adjudication that such Partner is insolvent or bankrupt;
(iii) the entry of an order for relief under the Bankruptcy Code with respect to
such Partner; (iv) the filing of any such petition or the commencement of any
such case or proceeding against such Partner, unless such petition and the case
or proceeding initiated thereby are dismissed within ninety (90) days from the
date of such filing; (v) the filing of an answer by such Partner admitting the
allegations of any such petition; (vi) the appointment of a
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trustee, receiver or custodian for all or substantially all of the assets of
such Partner, unless such appointment is vacated or dismissed within ninety (90)
days from the date of such appointment but not less than five (5) days before
the proposed sale of any assets of such Partner; (vii) the insolvency of such
Partner or the execution by such Partner of a general assignment for the benefit
of creditors; (viii) the convening by such Partner of a meeting of its
creditors, or any class thereof, for purposes of effecting a moratorium upon or
extension or composition of its debts; (ix) the failure of such Partner to pay
its debts as they mature; (x) the levy, attachment, execution or other seizure
of substantially all of the assets of such Partner where such seizure is not
discharged within thirty (30) days thereafter; or (xi) the admission by such
Partner in writing of its inability to pay its debts as they mature or that it
is generally not paying its debts as they become due. The term "bankruptcy," as
defined in this Agreement and as used herein, is intended and shall be deemed to
supersede and replace the events of withdrawal described in Sections 1782.23(D)
and (E) of the Act.
"BANKRUPTCY CODE" shall mean the United States Bankruptcy
Code, as amended, 11 U.S.C. Sections 101 ET SEQ., and as hereafter amended
from time to time.
"CBC" shall mean Cleveland Baseball Corporation, an Ohio
corporation.
"CAPITAL ACCOUNT" shall mean, with respect to any Partner, the
separate account as determined for Federal income tax purposes that the
Partnership shall establish and maintain for such Partner. The Capital Account
of any Partner shall be maintained in accordance with Exhibit A hereto.
"CAPITAL CALL" shall have the meaning set forth in Section
4.2.
"CAPITAL CONTRIBUTION" shall mean, with respect to any Partner,
the amount of money and the Gross Asset Value of any asset other than money
contributed to the capital of the Partnership with respect to the Partnership
Interest held by such Partner (net of all liabilities
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secured by such asset or that the Partnership is considered to assume or take
subject to under Section 752 of the Code).
"CERTIFICATE" shall mean the First Amended and Restated
Certificate of Limited Partnership for the Partnership of even date herewith, as
filed with the office of the Secretary of State of the State of Ohio, as it may
be amended from time to time in accordance with the terms of this Agreement and
the Act.
"CLASS A COMMON SHARES" shall mean the Class A Common Shares,
without par value, of the General Partner.
"CLASS B COMMON SHARES" shall mean the Class B Common Shares,
without par value, of the General Partner.
"CLOSING PRICE" on any date shall mean, with respect to the
Class A Common Shares, the last sale price, regular way, or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, in either case as reported on the Nasdaq National
Market or, if the applicable Equity Shares are not quoted on the Nasdaq National
Market, on the principal national securities exchange on which such Equity
Shares are listed or admitted to trading of, if the Equity Shares are not quoted
on the NASDAQ National Market or listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors of the General Partner for
the purpose or, if such prices are not available, the fair market value set by,
or in a manner established by, the Board of Directors of the General Partner in
good faith.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COMMON SHARES" shall mean the Class A Common Shares and the
Class B Common Shares.
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"COMPLETION OF THE OFFERING" shall mean the closing of the
first sale of Class A Common Shares in the Offering.
"CONSENT OF THE LIMITED PARTNERS" means the written consent of
the Limited Partner or, if there is more than one Limited Partner, the written
consent of a Majority-In-Interest of the Limited Partners, which shall be
obtained prior to the taking of any action for which it is required by this
Agreement and may be given or withheld by the Limited Partner or a
Majority-In-Interest of the Limited Partners, as the case may be, in their sole
and absolute discretion.
"CONTRIBUTION DATE" shall have the meaning set forth in
Section 4.2(b) hereof.
"CONTROL" shall mean the ability, whether by the direct or
indirect ownership of shares or other equity interests, by contract or
otherwise, to elect a majority of the directors of a corporation, to select the
managing partner of a partnership, or otherwise to select, or have the power to
remove and then select, a majority of those persons exercising governing
authority over an Entity. In the case of a limited partnership, the sole general
partner, all of the general partners to the extent each has equal management
control and authority, or the managing general partner or managing general
partners thereof shall be deemed to have control of such partnership and, in the
case of a trust, any trustee thereof or any Person having the right to select
any such trustee shall be deemed to have control of such trust.
"CORPORATE HEADQUARTERS" shall mean the General Partner's
offices located at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx.
"CURRENT PER SHARE MARKET PRICE" on any date shall mean the
average of the Closing Price for the five (5) consecutive Trading Days ending on
such date.
"DEMAND NOTICE" shall have the meaning set forth in Section
14.2 hereof.
"DEPRECIATION" shall mean, with respect to any asset of the
Partnership for any taxable year or other period, the depreciation, depletion or
amortization, as the case may be,
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allowed or allowable for Federal income tax purposes in respect of such asset
for such taxable year or other period.
"ENTITY" shall mean any general partnership, limited
partnership, joint venture, corporation, limited liability company, trust,
business trust, cooperative or association.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended (or any corresponding provisions of succeeding laws).
"EXCHANGE RIGHTS" shall have the meaning set forth in Section
9.2 hereof.
"FORMATION TRANSACTIONS" shall mean the transactions
contemplated by the Reorganization Agreement and described in the Registration
Statement under the heading "Formation Transactions."
"FUNDING LOAN" shall mean any borrowing or refinancing of debt
by or on behalf of the General Partner from any lender (including the Limited
Partner) for the purpose of advancing the Funding Loan Proceeds to the
Partnership as a loan pursuant to Section 4.3(b) hereof.
"FUNDING NOTICE" shall have the meaning set forth in Section
4.3(b) hereof
"FUNDING LOAN PROCEEDS" shall mean the net cash proceeds
received by the General Partner in connection with any Funding Loan, after
deduction of all costs and expenses incurred by the General Partner in
connection with such Funding Loan.
"GAAP" shall mean generally accepted accounting principles
consistently applied.
"GAIN FROM SALE" shall mean the gain recognized for Federal
income tax purposes upon the sale or other taxable disposition of any asset of
the Partnership.
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"GENERAL PARTNER" shall mean Cleveland Indians Baseball Company,
Inc., an Ohio corporation, its duly admitted successors and assigns and any
other Person who is a general partner of the Partnership at the time of
reference thereto.
"GENERAL PARTNER EXPENSES" shall mean (i) costs and expenses
relating to the formation and continuity of existence of the General Partner,
including all taxes (excluding taxes based on income and state and local
franchise taxes), fees and assessments associated therewith, any and all
accounting, administration and legal expenses of the General Partner, and any
and all costs, expenses or fees payable to any director, officer or employee of
the General Partner or such subsidiaries, including, without limitation, costs
of indemnification, (ii) costs and expenses relating to any offer or
registration of securities by the General Partner and all statements, reports,
fees and expenses incidental thereto, including, without limitation,
underwriting discounts and selling commissions applicable to any such offer of
securities and any costs and expenses associated with any claims made by any
holder of such securities or any underwriters or placement agents thereof, (iii)
costs and expenses associated with the preparation and filing of any periodic
reports by the General Partner under Federal, state or local laws or
regulations, including filings with the SEC, (iv) costs and expenses associated
with compliance by the General Partner with laws, rules and regulations
promulgated by any regulatory body, including the SEC, and (v) all other
operating or administrative costs of the General Partner incurred in the
ordinary course of its business on behalf of the Partnership.
"GENERAL PARTNER LOAN" shall have the meaning set forth in
Section 4.3(b) hereof.
"GROSS ASSET VALUE" shall mean, with respect to any asset of
the Partnership, such asset's adjusted basis for Federal income tax purposes,
except as follows:
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(a) the initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the fair market value thereof as
initially agreed to by the General Partner and the contributing
Partner;
(b) if the General Partner reasonably determines that an
adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners, such as in the case of a sale, distribution
or liquidation of the Partnership, the Gross Asset Values of all
Partnership assets shall be adjusted to equal their respective gross
fair market values, as reasonably determined by the General Partner, as
of the following times:
(i) a Capital Contribution (other than a DE MINIMIS
Capital Contribution) to the Partnership by a new or existing
Limited Partner as consideration for a Partnership Interest;
(ii) the distribution by the Partnership to a Partner
of more than a DE MINIMIS amount of Partnership property as
consideration for the redemption of a Partnership Interest as
provided in Section 1.704-l(b)(2)(iv)(e) of the Regulations;
and
(iii) the liquidation of the Partnership within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations;
(c) the Gross Asset Values of Partnership assets distributed
to any Partner shall be the gross fair market values of such assets
(taking Section 7701(g) of the Code into account) as reasonably
determined by the General Partner as of the date of distribution; and
(d) the Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Sections 734(b) or 743 (b) of the
Code, but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Section
1.704-1(b)(2)(iv)(m) of the Regulations (see Exhibit
B hereto); provided, however, that Gross Asset Values shall not be
adjusted pursuant to this paragraph to the extent that the
General Partner reasonably determines that an adjustment pursuant to
paragraph (b) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment
pursuant to this paragraph (d).
"LIEN" shall mean any liens, security interests, mortgages,
deeds of trust, charges, claims, encumbrances, pledges, options, rights of first
offer or first refusal and any other rights or interests of others of any kind
or nature, actual or contingent, or other similar encumbrances of any nature
whatsoever.
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"LIMITED PARTNER" shall mean CBC in its capacity as a limited
partner of the Partnership, its duly admitted successors and assigns as a
limited partner hereof, or any Person who is a limited partner of the
Partnership at the time of reference thereto.
"LIQUIDATING TRUSTEE" shall mean such individual or Entity as is
selected as the Liquidating Trustee hereunder by the General Partner or by a
court or other judicial proceeding, which individual or Entity may include an
Affiliate of the General Partner and who agrees in writing to be bound by the
terms of this Agreement. The Liquidating Trustee shall be empowered to give and
receive notices, reports and payments in connection with the dissolution,
liquidation and/or winding-up of the Partnership and shall hold and exercise
such other rights and powers as are necessary or required to permit all parties
to deal with the Liquidating Trustee in connection with the dissolution,
liquidation and/or winding-up of the Partnership.
"LOSS FROM SALE" shall mean the loss recognized for Federal
income tax purposes upon the sale or other taxable disposition of an asset of
the Partnership.
"MAJOR DECISIONS" shall have the meaning set forth in Section
7.3 hereof.
"MAJORITY-IN-INTEREST OF THE LIMITED PARTNERS" shall mean, if
there is more than one Limited Partner, Limited Partners who hold in the
aggregate more than fifty percent (50%) of the Percentage Interests then
allocable to and held by the Limited Partners and shall mean the Limited
Partner if there is only one Limited Partner.
"MINIMUM GAIN ATTRIBUTABLE TO PARTNER NONRECOURSE DEBT" shall
mean partner nonrecourse debt minimum gain" as determined in accordance with
Regulation section 1.704-2(i)(2).
"MJC" shall mean MJC Baseball, Inc., an Ohio corporation.
"MLB RULES" shall mean all rules, regulations, guidelines,
bulletins, directives, policies and agreements by virtue of the membership of
the Cleveland Indians in the American
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League of Professional Baseball Clubs and Major League Baseball, including the
American League Constitution, the Major League Agreement, and the Collective
Bargaining Agreement among Major League Baseball clubs and the Major League
Baseball Players Association.
"NET FINANCING PROCEEDS" shall mean the cash proceeds received
by the Partnership in connection with any borrowing or refinancing of borrowing
by or on behalf of the Partnership (whether or not secured), after deduction of
all costs and expenses incurred by the Partnership in connection with such
borrowing, and after deduction of that portion of such proceeds used to repay
any other indebtedness of the Partnership, or any interest or prepayment premium
thereon.
"NET INCOME OR NET LOSS" shall mean, for each taxable year or
other applicable period, an amount equal to the Partnership's net income or net
loss for such year or period as determined for Federal income tax purposes in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(i) of the Code shall be included in such net income or net loss).
"NET OPERATING CASH FLOW" shall mean, with respect to any fiscal
period of the Partnership, Net Income or Net Loss before depreciation,
amortization of financing and other costs, other non-cash items, gains or losses
on sales of assets and investments in marketable securities.
"NET SALE PROCEEDS" means the cash proceeds received by the
Partnership in connection with a sale of any asset by or on behalf of the
Partnership, or payable specifically out of the proceeds of such sale
(including, without limitation, any repayment of any indebtedness required to be
repaid as a result of such sale or which the General Partner elects to repay out
of the proceeds of such sale, together with accrued interest and premium, if
any, thereon and any
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sales commissions or other costs and expenses due and payable to any Person in
connection with a sale, including to a Partner or its Affiliates).
"NONCONTRIBUTING Partner" shall have the meaning set forth in
Section 4.2(b).
"NONRECOURSE DEDUCTIONS" shall have the meaning set forth in
Sections 1.704-2(b)(1) and (c) of the Regulations.
"NONRECOURSE Liabilities" shall have the meaning set forth in
Section 1.7042(b)(3) of the Regulations.
"OFFERING" shall mean the initial public offering of Class A
Common Shares as contemplated by the Registration Statement.
"ORIGINAL AGREEMENT" shall have the meaning ascribed in the
recitals of this Agreement.
"ORIGINAL CERTIFICATE" shall have the meaning ascribed in the
recitals of this Agreement.
"OWNERSHIP RESTRICTIONS" shall mean the restrictions on ownership
set forth in Article Fourth, Division C, Section 3 of the Articles.
"PARTNER Nonrecourse DEBT" shall have the meaning set forth in
Section 1.704-2(b)(4) of the Regulations.
"PARTNER NONRECOURSE DEDUCTIONS" shall have the meaning set forth
in Section 1.704-2(i)(2) of the Regulations.
"PARTNERS" shall mean the General Partner and the Limited
Partner, their duly admitted successors or assigns and any other Person who in a
partner of the Partnership at the time of reference thereto.
"PARTNERSHIP" shall mean the limited partnership hereby
constituted, as such limited partnership may from time to time be
re-constituted.
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"PARTNERSHIP INTEREST" shall mean the ownership interest of a
Partner in the Partnership from time to time, including such Partner's
Partnership Units and such Partner's Capital Account.
"PARTNERSHIP MINIMUM Gain" shall have the meaning set forth in
Section 1.704-2(b)(2) of the Regulations.
"PARTNERSHIP UNIT" shall mean an interest in the Partnership as
a Partner, measured in units. As of the date of this Agreement, there are
12,333,333 Partnership Units outstanding. The initial allocation of Partnership
Units to the Partners is as set forth on the attached Exhibit B.
"PERCENTAGE INTEREST" shall mean, with respect to any Partner,
the percentage ownership interest of such Partner in the Partnership which shall
be calculated by dividing the number of Units held by a Partner by the total
number of outstanding Partnership Units. The initial Percentage Interest of each
Partner is as set forth opposite its name on attached Exhibit B.
"PERSON" shall mean any individual or Entity.
"REORGANIZATION AGREEMENT" shall mean the Agreement and Plan of
Reorganization dated as of April 2, 1998 among the General Partner, CBC, MJC,
Ballpark Management, the Partnership, Xxxxxxx X. Xxxxxx, Trustee under
Declaration of Trust dated April 23, 1987, and Xxxxxxx X. Xxxxxx, Trustee of the
Xxxxx X. Xxxxxx Marital Trust, pursuant to which the Formation Transactions were
effected.
"REGISTRATION STATEMENT" shall mean the Registration Statement on
Form S-1, Registration No. 333-49357 (including the prospectuses contained
therein), heretofore filed by the General Partner with the SEC, and any
amendments at any time made thereto (including post-effective amendments),
pursuant to which the General Partner proposes to offer and sell certain of its
Class A Common Shares.
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"REGULATIONS" shall mean the final or temporary Federal income
tax regulations promulgated under the Code, as such regulations may be amended
or adopted from time to time (including corresponding provisions of succeeding
regulations).
"REGISTRABLE SECURITIES" shall have the meaning set forth in
Section 9.5(a) hereof.
"REQUIRED FUNDS" shall have the meaning set forth in Section
4.2(b) hereof.
"RIGHTS" shall have the meaning set forth in Section 11.1
hereof.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SUBSTITUTED LIMITED PARTNER" means any Person who (i) is
permitted to become a Limited Partner pursuant to Section 9.2 and 9.3 and (ii)
agrees in writing to be bound by the terms of this Agreement by execution of a
copy of this Agreement or by another written undertaking acceptable to the
General Partner.
"THIRD PARTY" or "THIRD PARTIES" shall mean a Person or Persons
who is or are neither a Partner or Partners nor an Affiliate or Affiliates of a
Partner or Partners.
"THIRD PARTY FINANCING" shall mean financing or refinancing
obtained from a Third Party by the Partnership.
"TRADING DAY" shall mean a day on which the principal national
securities exchange or quotation system on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the Class A
Common Shares are not listed or admitted to trading on any national securities
exchange or quotation, shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
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"TRANSFER" as a noun, shall mean any direct or indirect sale,
assignment, conveyance, pledge, hypothecation, gift, encumbrance or other
transfer, and as a verb, shall mean to sell, assign, convey, pledge,
hypothecate, give, encumber or otherwise transfer.
1.2 EXHIBITS. References to an "Exhibit" are, unless otherwise
specified, to one of the Exhibits attached to this Agreement, and references to
an "Article" or a "Section" are, unless otherwise specified, to one of the
Articles or Sections of this Agreement. Exhibits A, (Partnership Interests), B
(Allocations), C (Registration Rights), D (Exchange Rights), attached hereto and
referred to herein, are hereby incorporated herein by reference.
ARTICLE II
ORGANIZATION
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2.1 CONTINUATION. The parties hereto, each of whom represents to
the others that it is a Partner, do hereby agree that the Partnership is a
limited partnership continued pursuant to the provisions of the Act, and all
other pertinent laws of the State of Ohio, for the purposes and upon the terms
and conditions hereinafter set forth. The Partners agree (i) that the rights and
liabilities of the Partners shall be as provided in the Act except as otherwise
herein expressly provided and (ii) that the Original Agreement is superseded in
its entirety by this Agreement and that the business of the Partnership shall be
continued pursuant to the Act and the provisions hereof. Promptly upon the
execution and delivery hereof, the General Partner shall cause the Certificate
and such other notice, instrument, document, or certificate as may be required
by applicable law, and which may be necessary to enable the Partnership to
conduct its business, and to own its properties, under the Partnership name, to
be filed or recorded in all appropriate public offices.
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2.2 NAME. The name of the Partnership shall be "Cleveland Indians
Baseball Company Limited Partnership."
2.3 CHARACTER OF THE BUSINESS. The purpose of the Partnership
shall be to hold, own, operate, manage, and sell the membership of the Cleveland
Indians Baseball Club in the American League of Professional Baseball Clubs and
all assets, business and rights related or incidental thereto; to acquire, hold,
own, develop, construct, improve, maintain, operate, sell, lease, Transfer,
encumber, convey, exchange, and otherwise dispose of or deal with real and
personal property of all kinds; to enter into mortgage loans and notes and lines
of credit with lenders, in such principal amounts and under such terms and
conditions as shall be acceptable to the General Partner; to execute purchase
money notes; to issue securities; to borrow money and to make and issue notes,
debentures, obligations and evidences of indebtedness of all kinds, whether
secured by mortgage, pledge or otherwise, and to secure the same by mortgage,
pledge or otherwise; to make, enter into, perform and carry out any
arrangements, contracts, franchises, concessions and/or agreements of every kind
for any lawful purpose, without limit as to amount or otherwise, with any
corporation, association, partnership, firm, trustee, syndicate, individual
and/or any political or governmental division or subdivision, domestic or
foreign; to acquire, hold title to, own, operate, sell or transfer the assets of
the Partnership or any part thereof and generally to make and perform agreements
and contracts of every kind and description and to do any and all things
necessary or incidental to the foregoing.
2.4 LOCATION OF THE PRINCIPAL PLACE OF BUSINESS. The location of
the principal place of business of the Partnership shall be at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, or such other location as shall be selected from
time to time by the General Partner in its sole discretion.
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2.5 REGISTERED AGENT AND REGISTERED Office. The agent for service
of process of the Partnership pursuant to the requirements of Section 1782.04
shall be the General Partner, 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, or
such other Person as the General Partner may select in its sole discretion.
ARTICLE III
TERM
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3.1 COMMENCEMENT. The Partnership commenced business as a limited
partnership upon the filing of the Original Certificate with the Cuyahoga County
Recorder. The Partnership has filed a Certificate of Limited Partnership with
the Ohio Secretary of State as required by Section 1782.63(A)(1) of the Ohio
Revised Code.
3.2 DISSOLUTION. The Partnership shall be dissolved upon the
occurrence of the earliest of the following events:
(a) The withdrawal, removal or Bankruptcy of the
General Partner or assignment by the General Partner of its
entire interest in the Partnership or the occurrence of any other
event that results in the General Partner ceasing to be a general
partner of the Partnership under the Act; provided, however, that
the Partnership shall not be dissolved and required to be
wound up in connection with any of the events specified in this
clause (a) if (i) at the time of the occurrence of such
event there is at least one remaining general partner of the
Partnership who is hereby authorized to and does carry on the
business of the Partnership, or (ii) within ninety (90) days
after the occurrence of such event, all remaining Partners agree
in writing to continue the business of the Partnership and to the
appointment, effective as of the date of such event, if required,
of one or more successor general partners of the Partnership;
(b) The election to dissolve the Partnership made
in writing by the General Partner with the Consent of the Limited
Partners;
(c) The sale or other disposition of all or
substantially all the assets of the Partnership unless the
General Partner, with the Consent of the Limited Partners, elects
to continue the Partnership business for the purposes of the
receipt and the collection of indebtedness or the collection of
any other consideration to be received in exchange for the assets
of the Partnership;
(d) The entry of a decree of judicial dissolution
under the Act; or
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(e) ,2048
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ARTICLE IV
CONTRIBUTIONS TO CAPITAL
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4.1 CAPITAL CONTRIBUTIONS. In connection with the formation of
the Partnership, CBC, as the original general partner of the Partnership, and
MJC, as the original limited partner of the Partnership, contributed to the
capital of the Partnership as reflected on the books and records of the
Partnership. In connection with the Formation Transactions contemplated by the
Reorganization Agreement, the Company has contributed to the Partnership the
Ballpark Management Assets in exchange for 2,281,667 Units representing an 18.5%
Percentage Interest in the Partnership. The Partners agree that the fair market
value of the Ballpark Management Assets is an amount equal to the number of
Partnership Units issued to the General Partner in exchange for the Ballpark
Management Assets Multiplied by the initial public offering price per share of
the Class A Common Shares in the Offering.
4.2 ADDITIONAL CAPITAL CONTRIBUTIONS. (a) In the event additional
funds (over and above the Capital Contributions made by the Partners pursuant to
Section 4.1) are required or desired to carry on the business and purposes of
the Partnership, and to the extent the General Partner determines that the
Partnership should not borrow such additional funds pursuant to Section 4.3, the
General Partner, in its sole discretion, may call for capital contributions (a
"Capital Call") from the Partners. In such event, the General Partner shall make
an Additional Capital Contribution in an amount equal to the total amount of the
Capital Call multiplied by the General Partner's Percentage Interest. The
Limited Partner may, but shall not be required to, make an Additional Capital
Contribution as hereinafter provided.
(b) A written request for an Additional Capital Contribution
shall be issued to the Limited Partner in proportion to its Percentage Interest
in the Partnership, which request shall
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specify the date, which shall not be less than twenty (20) days from the date
of such request, upon which such Additional Capital Contribution is to be made
(the "Contribution Date"). In the event of the failure of the Limited Partner to
make its Additional Capital Contribution ("Noncontributing Partner"), the
General Partner may, but shall not be obligated to, contribute to the
Partnership all or any portion of the Additional Capital Contribution of the
Noncontributing Partner. Additional Partnership Units shall be issued to each
Partner making an Additional Capital Contribution. The number of Partnership
Units issued to each Partner shall equal the amount of the Additional Capital
Contribution divided by the Current Per Share Market Price of the Class A Common
Shares. Exhibit B to this Agreement may be amended by the General Partner to
reflect the issuance of additional Partnership Units pursuant to this Section
4.2.
4.3 ADDITIONAL Funds. (a) In addition to funds obtained by the
Partnership pursuant to Section 4.2, the Partnership may obtain funds ("Required
Funds") which it considers necessary to meet the needs and obligations and
requirements of the Partnership, or to maintain adequate working capital or to
repay Partnership indebtedness, and to carry out the Partnership's purposes,
from the proceeds of Third Party Financing, in each case pursuant to such terms,
provisions, and conditions and in such manner (including the engagement of
brokers and/or investment bankers to assist in providing such financing) and
amounts as the General Partner shall determine in its sole discretion.
(b) To the extent the General Partner borrows all or any portion
of the Required Funds by entering into a Funding Loan, the General Partner
shall, on the Funding Date, lend (the "General Partner Loan") to the Partnership
the Funding Loan Proceeds on the same terms and conditions, to the extent
permitted by applicable law, including interest rate, repayment schedule, costs
and expenses, as shall be applicable with respect to or incurred in connection
with the Funding Loan.
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(c) Notwithstanding the foregoing, Limited Partners shall have
the right, but not the obligation to make a loan of all or any portion of the
Required Funds to the Partnership upon such terms as are approved by the General
Partner in its sole and absolute discretion.
4.4 PARTNER GUARANTEES. Notwithstanding anything else to the
contrary in this Agreement, the General Partner shall no less than ninety (90)
days prior to the end of each calendar year, beginning in 1998, cause the
Accountants to prepare and provide to the Limited Partner, a study analyzing
each refinancing, reduction (other than scheduled periodic amortization of
principal) of debt or other event that occurred during that year that reduced
the amount of any nonrecourse liabilities of the Partnership that a Limited
Partner or any of its Affiliates may include in the tax basis of their
Partnership Interests. Upon receipt of such study, the Limited Partner shall
inform the General Partner of any action it desires to take in order to increase
the "economic risk of loss" (within the meaning of Section 1.752-2 of the
Regulations) that it has with respect to liabilities of the Partnership,
including the guaranty of debt of the Partnership. The General Partner shall
permit the Limited Partner to take the requested action unless and until the
General Partner shall in good faith determine that any such action is reasonably
likely to reduce the portion of the Partnership's distributions to the General
Partner that represent a return of capital for Federal income tax purposes for
such year or would otherwise have an adverse effect on the tax position of the
General Partner.
4.5 No THIRD PARTY BENEFICIARY. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
(there being no obligation) of any Partner to make Capital Contributions or
loans or to pursue any other right or remedy hereunder or at law or in equity,
it being understood and agreed that the provisions of this Agreement shall be
solely for the benefit of, and may be enforced solely by, the parties hereto and
their respective successors and assigns. None of the rights of the Partners
herein set forth
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(there being no obligation) to make Capital Contributions or loans to the
Partnership shall be deemed an asset of the Partnership for any purpose by any
creditor or other third party, nor may such rights or obligations be sold,
Transferred, or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or of any
of the Partners.
4.6 NO INTEREST; NO RETURN; NO ADDITIONAL REQUIRED CAPITAL
CONTRIBUTION. No Partner shall be entitled to interest on its Capital
Contribution or on that Partner's Capital Account. Except as provided herein or
by law, no Partner shall have any right to demand or receive the return of its
Capital Contribution from the Partnership. No Partner shall be obligated to make
any additional Capital Contribution to the Partnership.
ARTICLE V
CONDITIONS
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5.1 GENERAL PARTNER CONDITIONS. The obligation of the General
Partner to consummate the transactions contemplated herein is subject to
fulfillment of all of the following conditions on or prior to the date hereof:
(a) All consents, waivers, approvals and
authorizations required for the consummation of the transactions
contemplated hereby shall have been obtained;
(b) All of the representations and warranties of
the Limited Partner shall be true and correct as of the date
hereof; and
(c) The Registration Statement shall have become
effective under the provisions of the Securities Act of 1933, as
amended, and no stop order or other administrative proceeding
shall have been entered or instituted with respect thereto as of
the date hereof.
5.2 LIMITED PARTNER CONDITIONS. The obligation of the Limited
Partner to consummate the transactions contemplated herein is subject to the
fulfillment of all of the following conditions on or prior to the date hereof:
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(a) All consents, waivers, approvals and authorizations
required for the consummation of the transactions contemplated hereby
shall have been obtained;
(b) All of the representations and warranties of the General
Partner shall be true and correct as of the date hereof; and
(c) The Registration Statement shall have become effective
under the provisions of the Securities Act of 1933, as amended, and no
stop order or other administrative proceeding shall have been entered
or instituted with respect thereto as of the date hereof.
ARTICLE VI
ALLOCATIONS OF NET INCOME OR NET LOSS
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AND OTHER TAX AND ACCOUNTING MATTERS
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6.1 ALLOCATIONS. The Net Income or Net Loss and/or other
Partnership items shall be allocated among the Partners pursuant to the
provisions of Exhibit A hereto.
6.2 DISTRIBUTIONS. The General Partner shall only permit the
Partnership to distribute to the Partners any portion of Net Operating Cash Flow
or any portion of Net Sales Proceeds as follows: (i) the General Partner shall
cause the Partnership to distribute in cash to the Partners, at such times
during each year as may be determined by the General Partner, an amount equal
to the aggregate estimated Federal, state and local income tax liability of the
Partners as a result of the Net Income for such year allocated to the Partners,
calculated as if (A) all of the Partners were natural persons resident in the
City of Cleveland in the State of Ohio; (B) all of the Partners were taxed at
the maximum rates provided under applicable Federal and State of Ohio income tax
laws; (C) allocations from the Partnership were the sole source of income and
loss for the Partners for such year; and (D) all allocations of losses from the
Partnership for all periods commencing after the date hereof had been carried
forward and applied to reduce the Partners' tax liability with respect to
Partnership income allocated in each successive year (to the extent not
previously offset against allocations of Partnership income), to the extent
permitted under applicable tax law; it being understood that all such
distributions shall
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be determined and made without regard to any available or applied tax credits
and otherwise without regard to the tax status, profile or other tax liability
of the Partners; and (ii) the General Partner may cause the Partnership to make
distributions to the Partners in addition to those required by clause (i) if,
prior to the making of such distributions, the Board of Directors of the General
Partner shall have (X) by resolution adopted by a majority of the directors who
are not Affiliates of the Limited Partner, approved a cash dividend on its
Common Shares in an amount equal to the General Partner's share of such
distribution or (Y) by resolution unanimously adopted by all of the directors
who are not Affiliates of the Limited Partner, made a determination that it
is in the best interests of the General Partner's shareholders that the funds
that would be the subject of such distribution be used to meet existing
obligations of the General Partner or obligations anticipated to be incurred by
the General Partner within six months of the date of such distribution. All such
distributions shall be made in accordance with the Partners' Percentage
Interests.
6.3 BOOKS OF ACCOUNT. At all times during the continuance of
the Partnership, the General Partner shall maintain or cause to be maintained
full, true, complete and correct books of account in accordance with GAAP
wherein shall be entered particulars of all monies, goods, or effects belonging
to or owing to or by the Partnership, or paid, received, sold or purchased in
the course of the Partnership's business, and all of such other transactions,
matters and things relating to the business of the Partnership as are usually
entered in books of account kept by persons engaged in a business of a like kind
and character. In addition, the Partnership shall keep all records as required
to be kept pursuant to the Act. The books and records of account shall be kept
at the principal office of the Partnership, and the Limited Partner shall at all
reasonable times have access to such books and records, and have the right to
inspect the same for any purpose reasonably related to the Limited Partner's
interest as a limited partner of the Partnership.
6.4 REPORTS. The General Partner shall cause to be submitted
to the Limited Partner promptly upon receipt of the same from the Accountants
and in no event later than April 1 of each year, copies of Audited Financial
Statements for the Partnership for the
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immediately preceding taxable year, together with the reports thereon, and all
supplementary schedules and information prepared by the Accountants.
6.5 AUDITS. Not less frequently than annually, the books and
records of the Partnership shall be audited by the Accountants.
6.6 TAX ELECTIONS AND RETURNS. All elections required or
permitted to be made by the Partnership under any applicable tax law shall be
made by the General Partner in its sole discretion; provided, however, the
General Partner shall, if requested by a transferee, file an election on behalf
of the Partnership pursuant to Section 754 of the Code to adjust the basis of
the Partnership property in the case of a Transfer of a Partnership Interest,
including Transfers made in connection with the exercise of Rights made in
accordance with the provisions of the Agreement. The Partnership's taxable year
shall be a calendar year. The basis on which the Partnership's books of account
are kept for Federal income tax purposes shall be determined by the General
Partner. The General Partner shall be responsible for preparing and filing all
Federal and state tax returns for the Partnership on a timely basis and
furnishing copies thereof to the Partners, together with required Partnership
schedules showing allocations of tax items, all within the period of time
prescribed by law.
6.7 TAX MATTERS PARTNER. The General Partner is hereby
designated as the Tax Matters Partner within the meaning of Section 6231(a)(7)
of the Code for the Partnership; provided, however, (i) in exercising its
authority as Tax Matters Partner it shall be limited by the provisions of this
Agreement affecting tax aspects of the Partnership; (ii) the General Partner
shall consult in good faith with the Limited Partner regarding the filing of a
Code Section 6227(b) administrative adjustment request with respect to the
Partnership before filing such request, it being understood, however, that the
provisions hereof shall not be construed to limit the ability of any Partner,
including the General Partner, to file an administrative
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adjustment request on its own behalf pursuant to Section 6227(a) of the Code;
(iii) the General Partner shall consult in good faith with the Limited Partner
regarding the filing of a petition for judicial review of an administrative
adjustment request under Section 6228 of the Code, or a petition for judicial
review of a final partnership administrative judgment under Section 6226 of the
Code relating to the Partnership before filing such petition; (iv) the General
Partner shall give prompt notice to the Limited Partner of the receipt of any
written notice that the Internal Revenue Service or any state or local taxing
authority intends to examine Partnership income tax returns for any year, and
the General Partner shall consult in good faith with the Limited Partner
regarding the handling of any such examination, (v) the General Partner shall
consult in good faith with the Limited Partner concerning the appeal of any
adjustments proposed as a result of any examination referred to in clause (iv),
(vi) the General Partner shall give prompt notice to the Limited Partner of the
receipt of written notice of the beginning of an administrative proceeding at
the Partnership level relating to the Partnership under Section 6223 of the
Code, receipt of written notice of the final Partnership administrative
adjustment relating to the Partnership pursuant to Section 6223 of the Code, and
receipt of any request from the Internal Revenue Service for waiver of any
applicable statute of limitations with respect to the filing of any tax return
by the Partnership; and (vii) the General Partner shall promptly notify the
Limited Partner if the General Partner does not intend to file for judicial
review with respect to the Partnership.
6.8 RESTRICTED DISTRIBUTIONS. Notwithstanding any provision to
the contrary contained in this Agreement, the Partnership, and the General
Partner on behalf of the Partnership, shall not make a distribution to any
Partner on account of its interest in the Partnership if such distribution would
violate Section 1782.87 of the Act or other applicable law.
6.9 WITHHOLDING. Each Partner hereby authorizes the Partnership
to withhold from or pay on behalf of or with respect to such Partner any amount
of Federal, state, local, or
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foreign taxes that the General Partner determines the Partnership is required
to withhold or pay with respect to any amount distributable or allocable to such
Partner pursuant to this Agreement, including, without limitation, any taxes
required to be withheld or paid by the Partnership pursuant to Sections 1441,
1442, 1445, or 1446 of the Code. Any amount paid on behalf of or with respect to
a Partner shall constitute a loan by the Partnership to such Partner, which loan
shall be due within fifteen (15) days after repayment is demanded of the
Partner in question, and may be repaid through withholding of subsequent
distributions to such Partner. Any amounts payable by a Limited Partner
hereunder shall bear interest at the lesser of (i) the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in THE WALL STREET JOURNAL, or (ii) the maximum lawful rate of
interest on such obligation, such interest to accrue from the date such amount
is due (i.e., fifteen (15) days after demand) until such amount is paid in
full. To the extent the payment or accrual of withholding tax results in a
Federal, state or local tax credit to the Partnership, such credit shall be
allocated to the Partner to whose distribution the tax is attributable.
ARTICLE VII
RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL PARTNER
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7.1 EXPENDITURES BY PARTNERSHIP. The General Partner is hereby
authorized to pay compensation for accounting, administrative, legal, technical,
management and other services rendered to the Partnership. All of the aforesaid
expenditures shall be made on behalf of the Partnership, and the General Partner
shall be entitled to reimbursement by the Partnership for any expenditures
incurred by it on behalf of the Partnership which shall be made other than out
of the funds of the Partnership. The Partnership shall also assume, and pay when
due, all Administrative Expenses, including General Partner Expenses.
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7.2 POWERS AND DUTIES OF GENERAL PARTNER. The General Partner
shall be responsible for the management of the Partnership's business and
affairs. Except as otherwise herein expressly provided, and subject to the
limitations contained in Section 7.3 hereof with respect to Major Decisions, the
General Partner shall have, and is hereby granted, full and complete power,
authority and discretion to take such action for and on behalf of the
Partnership and in its name as the General Partner shall, in its sole and
absolute discretion, deem necessary or appropriate to carry out the purposes for
which the Partnership was organized. Except as otherwise expressly provided
herein, and subject to Section 7.3 hereof, the General Partner shall have the
right, power and authority:
(a) To manage, control, invest, reinvest, acquire by
purchase, lease or otherwise, sell, contract to purchase or
sell, grant, obtain, or exercise options to purchase, options
to sell or conversion rights, assign, Transfer, convey,
deliver, endorse, exchange, pledge, mortgage, abandon,
improve, repair, maintain, insure, lease for any term and
otherwise deal with any and all property, real and personal,
of whatsoever kind and nature, and wheresoever situated, in
furtherance of the business or purposes of the Partnership;
(b) To employ, engage or contract with or dismiss from
employment or engagement Persons to the extent deemed
necessary by the General Partner for the operation and
management of the Partnership business and to elect or appoint
Persons to, and remove Persons from, such offices and
positions as the General Partner may determine;
(c) To enter into, make, amend, perform and carry out
or cancel and rescind, contracts and other obligations,
including, without limitation, guarantees and indemnity
agreements for any purpose pertaining to the business of the
Partnership; and to loan money to, borrow money from and
engage in transactions with Affiliates of the Partnership or
any other Person;
(d) To borrow money, procure loans and advances from
any Person for Partnership purposes, and to apply for and
secure, from any Person, credit or accommodations; to contract
liabilities and obligations, direct or contingent and of every
kind and nature with or without security; and to repay,
discharge, settle, adjust, compromise, or liquidate any such
loan, advance, credit, obligation or liability;
(e) To pledge, hypothecate, mortgage, assign, deposit,
deliver, enter into sale and leaseback or lease and leaseback
arrangements or otherwise give as security or as additional or
substitute security, or for sale or other disposition any and
all Partnership assets, tangible or intangible, including, but
not limited to, real
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estate and beneficial interests in land trusts, and to make
substitutions thereof, and to receive any proceeds thereof
upon the release or surrender thereof; to sign, execute and
deliver any and all assignments, deeds and other contracts and
instruments in writing; to authorize, give, make, procure,
accept and receive moneys, payments, property, notices,
demands, vouchers, receipts, releases, compromises and
adjustments; to waive notices, demands, protests and authorize
and execute waivers of every kind and nature; to enter into,
make, execute, deliver and receive written agreements,
undertakings and instruments of every kind and nature; to give
oral instructions and make oral agreements; and generally to
do any and all other acts and things incidental to any of the
foregoing or with reference to any dealings or transactions
which the General Partner may deem necessary, proper or
advisable to effect or accomplish any of the foregoing or to
carry out the business and purposes of the Partnership;
(f) To acquire and enter into any contract of insurance
which the General Partner deems necessary or appropriate for
the protection of the Partnership, for the conservation of the
Partnership's assets or for any purpose convenient or
beneficial to the Partnership;
(g) To conduct any and all banking transactions on
behalf of the Partnership; to adjust and settle checking,
savings, and other accounts with such institutions as the
General Partner shall deem appropriate; to draw, sign,
execute, accept, endorse, guarantee, deliver, receive and pay
any checks, drafts, bills of exchange, acceptances, notes,
obligations, undertakings and other instruments for or
relating to the payment of money in, into, or from any account
in the Partnership's name; to execute, procure, consent to and
authorize extensions and renewals of any of the foregoing; to
make deposits into and withdrawals from the Partnership's bank
accounts and to negotiate or discount commercial paper,
acceptances, negotiable instruments, bills of exchange and
dollar drafts;
(h) To demand, xxx for, receive, and otherwise take
steps to collect or recover all debts, rents, proceeds,
interests, dividends, goods, chattels, income from property,
damages and all other property, to which the Partnership may
be entitled or which are or may become due the Partnership
from any Person, to commence, prosecute or enforce, or to
defend, answer or oppose, contest and abandon all legal
proceedings in which the Partnership is or may hereafter be
interested; and to settle, compromise or submit to arbitration
any accounts, debts, claims, disputes and matters which may
arise between the Partnership and any other Person and to
grant an extension of time for the payment or satisfaction
thereof on any terms, with or without security;
(i) To make arrangements for financing, including the
taking of all action deemed necessary or appropriate by the
General Partner to cause any approved loans to be closed;
(j) To take all reasonable measures necessary to insure
compliance by the Partnership with applicable arrangements,
and other contractual obligations and arrangements entered
into by the Partnership from time to time in accordance
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with the provisions of this Agreement, including periodic
reports as required to be submitted to lenders and using all
due diligence to insure that the Partnership is in compliance
with its contractual obligations;
(k) To maintain the Partnership's books and records;
(1) To prepare and deliver, or cause to be prepared and
delivered by the Partnership's Accountants, all financial and
other reports with respect to the operations of the
Partnership and all Federal and state tax returns and reports;
(m) To act in any state or nation in which the
Partnership may lawfully act, for itself or as principal,
agent or representative for any person with respect to any
business of the Partnership;
(n) To become a partner or member in, and perform the
obligations of a partner or member of, any general or limited
partnership or limited liability company;
(o) To apply for, register, obtain, purchase or
otherwise acquire trademarks, trade names, labels and designs
relating to or useful in connection with any business of the
Partnership, and to use, exercise, develop and license the use
of the same;
(p) To pay or reimburse any and all actual fees, costs
and expenses incurred in the formation and organization of the
Partnership;
(q) To do all acts which are necessary, customary or
appropriate for the protection and preservation of the
Partnership's assets, including the establishment of reserves;
(r) To cause the Partnership to merge with, or
consolidate into, another business entity (as defined in
Section 1782.01(C) of the Act); and in accordance with Section
1782.431 of the Act, notwithstanding anything to the contrary
contained in this Agreement, an agreement of merger or
consolidation approved by the General Partner may (i) effect
any amendment to this Agreement, or (ii) effect the adoption
of a new partnership agreement for the Partnership if it is
the surviving or resulting limited partnership in the merger
or consolidation; any amendment to this Agreement or adoption
of a new partnership agreement made pursuant to the foregoing
sentence shall be effective at the effective time or date of
the merger or consolidation. The provisions of this Subsection
7.2(r) shall not be construed to limit the accomplishment of a
merger or of any of the matters referred to herein by any
other means otherwise permitted by law; and
(s) In general, to exercise all of the general rights,
privileges and powers permitted to be had and exercised by a
general partner of an Ohio limited partnership under the Act.
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7.3 MAJOR DECISIONS. The General Partner shall not, without the
Consent of the Limited Partners, undertake any of the following actions on
behalf of the Partnership (the "Major Decisions"):
(a) Amend, modify or terminate this Agreement other
than pursuant to Section 14.7 hereof.
(b) Make a general assignments for the benefit of
creditors or appoint or acquiesce in the appointment of a
custodian, receiver or trustee for all or any part of the
assets of the Partnership.
(c) Take title to any personal or real property, other
than in the name of the Partnership.
(d) Institute any proceeding for Bankruptcy on behalf
of the Partnership.
7.4 ACTIONS WITH RESPECT TO CERTAIN DOCUMENTS. Notwithstanding
the provisions of Section 7.3 hereof to the contrary, whenever the consent,
agreement, authorization or approval of the Partnership is required under any
agreement to which a Limited Partner or its Affiliate is a party in interest
other than in such Limited Partner's capacity as a Limited Partner of the
Partnership, the Consent of such Limited Partner shall not be required.
7.5 TITLE HOLDER. To the extent allowable under applicable law,
title to all or any part of the assets of the Partnership may be held in the
name of the Partnership or in the name of any other Person, the beneficial
interest in which shall at all times be vested in the Partnership. Any such
title holder shall perform any and all of its respective functions to the extent
and upon such terms and conditions an may be determined from time to time by the
General Partner, consistent with the business purposes of the Partnership.
7.6 COMPENSATION OF THE GENERAL PARTNER. The General Partner
shall not be entitled to any compensation for services rendered to the
Partnership solely in its capacity as General Partner, except with respect to
reimbursement for those costs and expenses constituting Administrative Expenses.
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7.7 WAIVER AND INDEMNIFICATION. (a) Neither the General Partner
nor any Person acting on its behalf, pursuant hereto, shall be liable,
responsible or accountable in damages or otherwise to the Partnership or to any
Partner for any acts or omissions performed or omitted to be performed by them
within the scope of the authority conferred upon the General Partner by this
Agreement and the Act; provided that the General Partner's or such other
Person's conduct or omission to act was taken in good faith and in the belief
that such conduct or omission was in the best interests of the Partnership and,
provided further, that the General Partner or such other Person shall not be
guilty of fraud, misconduct or negligence. The Partnership shall, and hereby
does, to the fullest extent permitted by applicable law, indemnify and hold
harmless the General Partner and its Affiliates and any individual acting on
their behalf, including their respective officers and directors, from any loss,
damage, claim or liability, including, but not limited to, reasonable attorneys'
fees and expenses, incurred by them by reason of any act performed by them in
accordance with the standards set forth above or in enforcing the provisions of
this indemnity; provided, however, that no Partner shall have any personal
liability with respect to the foregoing indemnification, any such
indemnification to be satisfied solely out of the assets of the Partnership.
(b) Any Person entitled to indemnification under this Agreement
shall be entitled to receive, upon application therefor, advances to cover the
costs of defending any proceeding against such Person; provided, however, that
such advances shall be repaid to the Partnership, without interest, if such
Person is found by a court of competent jurisdiction upon entry of a final
judgment not to be entitled to such indemnification. All rights of the
indemnitee hereunder shall survive the dissolution of the Partnership; provided,
however, that a claim for indemnification under this Agreement must be made by
or on behalf of the Person seeking indemnification prior to the time the
Partnership is terminated hereunder. The indemnification
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rights contained in this Agreement shall be cumulative of, and in addition to,
any and all rights, remedies and recourse to which the Person seeking
indemnification shall be entitled, whether at law or at equity. Indemnification
pursuant to this Agreement shall be made solely and entirely from the assets of
the Partnership and no Partner shall be liable therefor.
ARTICLE VIII
DISSOLUTION, LIQUIDATION AND TERMINATION
----------------------------------------
8.1 ACCOUNTING. In the event of the dissolution, liquidation and
termination of the Partnership, a proper accounting (which shall be certified)
shall be made of the Capital Account of each Partner and of the Net Profits or
Net Losses of the Partnership from the date of the last previous accounting to
the date of dissolution. Financial statements presenting such accounting shall
include a report of a certified public accountant selected by the Liquidating
Trustee.
8.2 DISTRIBUTION ON DISSOLUTION. In the event of the
dissolution of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order;
(a) To creditors of the Partnership, other than
Partners who are creditors, to the extent otherwise permitted
by law, in satisfaction of the liabilities of the Partnership
(whether by payment or the making of reasonable provision for
payment thereof);
(b) To Partners who are creditors of the Partnership,
to the extent otherwise permitted by law, in satisfaction of
the liabilities of the Partnership (whether by payment or the
making of reasonable provision for payment thereof);
(c) To establish a reserve, as provided by the
Liquidating Trustee, to provide for contingent liabilities, if
any; and
(d) Except as otherwise required by the terms of any
outstanding Partnership Interests, to the Partners in
accordance with the positive balances in their Capital
Accounts after giving effect to all contributions,
distributions and allocations for all periods, including the
period in which such distribution occurs (other than those
adjustments made pursuant to this Section 8.2(d) and Section
8.3 hereof).
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8.3 TIMING REQUIREMENTS. In the event that the Partnership is
"liquidated" within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations, any and all distributions to the Partners pursuant to Section
8.2(d) hereof shall be made no later than the later to occur of (i) the last day
of the taxable year of the Partnership in which such liquidation occurs or (ii)
ninety (90) days after the date of such liquidation.
8.4 SALE OF PARTNERSHIP ASSETS. In the event of the liquidation
of the Partnership's assets in accordance with the terms of this Agreement, the
Liquidating Trustee may sell Partnership assets on the best terms and conditions
as the Liquidating Trustee in good faith believes are reasonably available at
the time and under the circumstances and on a nonrecourse basis to the Limited
Partner. The liquidation of the Partnership shall not be deemed finally
completed until the Partnership shall have received cash payments in full with
respect to obligations such as notes, installment sale contracts or other
similar receivables received by the Partnership in connection with the sale of
Partnership assets and all obligations of the Partnership have been satisfied.
The Liquidating Trustee shall continue to act to enforce all of the rights of
the Partnership pursuant to any such obligations until such obligations are paid
in full or otherwise satisfied.
8.5 DISTRIBUTIONS IN KIND. In the event that it becomes
necessary to make a distribution of property of the Partnership in kind, the
Liquidating Trustee may, with the Consent of the Limited Partners, to the extent
permitted by applicable law and MLB Rules, Transfer and convey such property to
the distributees as tenants in common, subject to any liabilities attached
thereto, so as to vest in the distributees undivided interests in the whole of
such property in proportion to their respective rights to share in the proceeds
of the sale of such property (other than as a creditor) in accordance with the
provisions of Section 8.2 hereof.
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8.6 DOCUMENTATION OF LIQUIDATION. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the Liquidating Trustee shall have the authority to execute and record any
and all documents or instruments required to effect the dissolution, liquidation
and termination of the Partnership.
8.7 LIABILITY OF THE LIQUIDATING TRUSTEE. The Liquidating
Trustee shall be indemnified and held harmless by the Partnership from and
against any and all claims, demands, liabilities, costs, damages and causes of
action of any nature whatsoever arising out of or whatsoever arising out of or
incidental to the Liquidating Trustee in taking any action authorized under or
within the scope of this Agreement; provided, however, that the Liquidating
Trustee shall not be entitled to indemnification, and shall not be held
harmless, where the claim, demand, liability, cost, damage or cause of action
at issue arose out of:
(a) A matter entirely unrelated to the Liquidating
Trustee's action or conduct pursuant to the provisions of this
Agreement; or
(b) The proven misconduct or gross negligence of the
Liquidating Trustee.
8.8 CREDITING OF GAIN (LOSS) ON LIQUIDATION. (a) GAIN FROM SALE.
Any Gain from Sale realized by the Partnership upon the sale or other
disposition of the assets of the Partnership pursuant to the termination and
liquidation of the Partnership shall be credited to the Capital Accounts of the
Partners (after crediting or charging, thereto, as the case may be, the
appropriate portion of all Net Profit and Net Loss of the Partnership for the
then current year in accordance with Section 1 of Exhibit A and all amounts to
be distributed for such year under Sections 6.2 and 8.2 of the Agreement) as
follows and in the following order of priority:
(i) If the Capital Account of any Partner
shall have a negative balance, Gain From Sale first
shall be credited to such Partner until the balance
thereof equals zero. If the Capital Accounts of more
than one Partner shall have a negative balance, Gain
From Sale shall be credited to all such Partners with
negative balances in the proportion which the
negative balance of such Partner bears to the
negative balances of all such
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Partners, until the balances of the Capital
Accounts of all such Partners shall equal zero; and
(ii) In the event the Capital Account of any
Partner shall have a positive balance, Gain From Sale
next shall be credited to the Partners to the extent
necessary to make the positive balance of each
Partner's Capital Account proportionate (in
accordance with the Percentage Interests in the
Partnership) to the positive balance, if any, of the
Partner with the highest positive balance in his
Capital Account at such time; and
(iii) The remaining balance of Gain From
Sale, if any, shall be credited to the Partners in
accordance with the Percentage Interests of the
Partners in the Partnership.
(b) LOSS FROM Sale. Any Loss From Sale incurred by the
Partnership upon the sale or other disposition of the assets of the Partnership
pursuant to the termination and liquidation of the Partnership shall be charged
to the Capital Accounts of the Partners (after crediting or charging thereto, as
the case may be, the appropriate portion of all Net Profit and Net Loss of the
Partnership for the then current taxable year in accordance with Section 1 of
Exhibit A and all amounts to be distributed for such year in accordance with
Sections 6.2 and 8.2 of this Agreement) as follows and in the following order of
priority:
(i) If the Capital Account of any Partner
shall have a positive balance, Loss From Sale first
shall be charged to such Partner until the balance
thereof equals zero. If the Capital Accounts of more
than one Partner shall have a positive balance, Loss
From Sale shall be charged to all such Partners with
positive balances in the proportion which the
positive balance of such Partner bears to the
positive balances of all such Partners, until the
Capital Accounts of all such Partners shall equal
zero;
(ii) In the event the Capital Account of any
Partner shall have a negative balance, Loss From Sale
next shall be charged to the Capital Accounts of the
Partners to the extent necessary to make the negative
balance of each Partner's Capital Account
proportionate (in accordance with the Percentage
Interests in the Partnership) to the negative balance
of the Capital Account of the Partner with the
greatest negative balance in his capital Account at
such time; and
(iii) The remaining balance of Loss From
Sale, if any, shall be charged to the Capital
Accounts of the Partners in accordance with the
Percentage Interests in the Partnership.
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ARTICLE IX
TRANSFER OF PARTNERSHIP INTERESTS
---------------------------------
9.1 GENERAL PARTNER TRANSFER. The General Partner shall not
withdraw from the Partnership and shall not sell, assign, pledge, encumber or
otherwise Transfer all or any portion of its Partnership Interest except
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor General Partner are assumed by a successor
corporation or other Entity by operation of law.
9.2 TRANSFERS BY LIMITED PARTNERS. Each Limited Partner shall,
subject to the provisions of this Section 9.2 and Section 9.3 hereof, have the
right, without the consent of the General Partner, to Transfer all or a portion
of its Partnership Interest to any Person, whether or not in connection with the
exercise of a Limited Partner's Rights. It is a condition to any Transfer
otherwise permitted hereunder that the transferee assumes by operation of law
or express agreement all of the obligations of the transferor Limited Partner
under this Agreement with respect to such transferred Partnership Interest,
other than the obligation of the transferor Limited Partner to return amounts
wrongfully distributed to him, and no such Transfer (other than pursuant to a
statutory merger or consolidation wherein all obligations and liabilities of the
transferee Partner are assumed by a successor corporation by operation of law)
shall relieve the transferee Partner of its obligations arising prior to the
date of such Transfer under this Agreement without the approval of the General
Partner, in its reasonable discretion. Upon such Transfer, the transferee shall
be admitted as a Substituted Limited Partner and shall succeed to all of the
rights, including rights with respect to the Rights, of the transferor Limited
Partner under this Agreement in the place and stead of such transferee Limited
Partner; provided, however, that notwithstanding the foregoing, any transferee
of any transferred Partnership Interest shall be subject to any and all
ownership limitations contained in the Articles from time to time
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applicable to Persons and/or their Affiliates which may limit or restrict such
transferee's ability to exercise the Rights (as defined in Exhibit D hereto).
Unless admitted as a Substituted Limited Partner, no transferee, whether by a
voluntary Transfer, by operation of law or otherwise, shall have rights
hereunder, other than to receive such portion of the distributions made by the
Partnership as are allocable to the Partnership Interest transferred, such other
rights being retained by the transferee Partner until such Transferee is
admitted as a substituted Limited Partner.
9.3 RESTRICTIONS ON TRANSFER. In addition to any other
restrictions on Transfer herein contained, in no event may any Transfer or
assignment of a Partnership Interest by any Partner be made (i) to any person or
entity who lacks the legal right, power or capacity to own a Partnership
Interest; (ii) in violation of any provision of any mortgage or trust deed (or
the note or bond secured thereby) constituting a Lien against any assets of the
Partnership or any part thereof, or other instrument, document or agreement to
which the Partnership is a party or otherwise bound; (iii) in violation of
applicable law; (iv) of any component portion of a Partnership Interest, such as
the Capital Account, or rights to Net Operating Cash Flow or Net Sales Proceeds,
separate and part from all other components of a Partnership Interest; (v) in
the event such Transfer would violate MLB Rules; (vi) if such Transfer would
cause a termination of the Partnership for Federal income tax purposes within
the meaning of Section 708(b) of the Code; (vii) if such Transfer would, in the
opinion of counsel to the Partnership, cause the Partnership to cease to be
classified as a partnership for Federal income tax purposes; (viii) if such
Transfer would cause the Partnership to become, with respect to any employee
benefit plan subject to Title 1 of ERISA, a "party-in-interest" (as defined in
section 3(14) of ERISA) or a "disqualified person" (as defined in Section
4975(c) of the Code); (ix) if such Transfer would, in the opinion of counsel to
the Partnership, cause any portion of the assets of the Partnership to
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constitute assets of any employee benefit plan pursuant to Department of Labor
Regulations Section 2510.2-101; or (x) to a lender to the Partnership or any
person who is related (within the meaning of Section 1.752-4(b) of the
Regulations) to any lender to the Partnership whose loan constitutes a
"nonrecourse liability" (within the meaning of Section 1.752-1(a)(2) of the
Regulations) without the consent of the General Partner, in its sole and
absolute discretion, unless the Partners' basis for tax purposes would not be
reduced as a result of such Transfer.
9.4 REGISTRATION RIGHTS. The Limited Partner shall have the
registration rights set forth in Exhibit C.
ARTICLE X
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
----------------------------------------------
10.1 NO PARTICIPATION IN MANAGEMENT. The Limited Partner shall
not take part in the management of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership; provided, however, that the foregoing shall not
be deemed to limit the ability of a Limited Partner who is an officer, director
or employee of the Partnership or any Affiliate thereof to act in such capacity.
10.2 BANKRUPTCY OF A LIMITED PARTNER. The Bankruptcy of any
Limited Partner shall not cause a dissolution of the Partnership, but the rights
of such Limited Partner to share in the Net Income or Net Loss of the
Partnership and to receive distributions of Partnership funds shall, on the
happening of such event, devolve on its successors or assigns, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership. However, in no event shall such assignee(s) become a
Substituted Limited Partner, except in accordance with Article IX hereof.
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10.3 NO WITHDRAWAL. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, other than
as expressly provided in this Agreement.
10.4 DUTIES AND Conflicts. The General Partner recognizes that
the Limited Partner and its Affiliates have or may have other business
interests, activities and investments, some of which may be in conflict or
competition with the business of the Partnership, and that such Persons are
entitled to carry on such other business interests, activities and investments.
The Limited Partner and its Affiliates may engage in or possess an interest in
any other business or venture of any kind, independently or with others, on
their own behalf or on behalf of other entities with which they are affiliated
or associated, and such Persons may engage in any activities, whether or not
competitive with the Partnership, without any obligation to offer any interest
in such activities to the Partnership or to any Partner. Neither the Partnership
nor any Partner shall have any right, by virtue of this Agreement, in or to such
activities, or the income or profits derived therefrom, and the pursuit of such
activities, even if competitive with the business of the Partnership, shall not
be deemed wrongful or improper.
10.5 LIMITATION ON LIABILITY. No Limited Partner shall, solely
in its capacity as a Limited Partner, except as otherwise provided in the Act,
be personally liable for any of the debts, obligations or undertakings of the
Partnership beyond its obligation to make its initial capital contribution.
ARTICLE XI
GRANT OF RIGHTS TO LIMITED PARTNER
----------------------------------
11.1 GRANT OF RIGHTS. The General Partner, in its capacity as a
Partner and not on behalf of the Partnership, does hereby grant to the Limited
Partner and the Limited Partner does hereby accept the right, but not the
obligation (hereinafter such right sometimes referred to
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44
as the "Rights"), to exchange all or a portion of its Partnership Units for
Class A Common Shares on the terms and subject to the conditions and
restrictions contained in Exhibit D hereto. The Rights granted hereunder may be
exercised by the Limited Partner and any successor or assign of the Limited
Partner which becomes a Substituted Limited Partner pursuant to Section 9.2, on
the terms and subject to the conditions and restrictions contained in Exhibit D
hereto, upon delivery to the General Partner of an Exchange Exercise Notice in
the form of Schedule 2 attached to Exhibit D, which notice shall specify the
Partnership Units to be exchanged or sold by the Limited Partner. Once
delivered, the Exercise Notice shall be irrevocable, subject to payment by the
General Partner of the Purchase Price in respect of such Partnership Units in
accordance with the terms hereof
11.2 TERMS OF RIGHTS. The terms and provisions applicable to
the Rights shall be as set forth in attached Exhibit D.
11.3 REISSUANCE OR REALLOCATION OF PARTNERSHIP UNITS. Any
Partnership Units acquired by the General Partner pursuant to an exercise by any
Limited Partner of the Rights shall be deemed to be acquired by the General
Partner. The General Partner shall amend Exhibit A hereto to reflect each such
exchange of Partnership Units and each corresponding recalculation of the
Partnership Units of the Partners.
ARTICLE XII
LIMITED PARTNER REPRESENTATIONS AND WARRANTIES
----------------------------------------------
12.1 REPRESENTATIONS AND WARRANTIES OF THE LIMITED Partner.
The Limited Partner represents and warrants to the Partnership and the
General Partner as follows:
(a) ORGANIZATION. The Limited Partner is duly
incorporated, validly existing and in good standing under the
laws of the State of Ohio.
(b) DUE AUTHORIZATION: BINDING AGREEMENT, The
execution, delivery and performance of this Agreement by the
Limited Partner has been duly and
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validly authorized by all necessary action of the Limited
Partner. This Agreement has been duly executed and delivered
by the Limited Partner, or an authorized representative of the
Limited Partner, and constitutes a valid and legally binding
obligation of the Limited Partner, enforceable against the
Limited Partner in accordance with the terms hereof.
(c) CONSENTS AND APPROVALS. No consent, waiver,
approval or authorization of, or filing, registration or
qualification with, or notice to, any governmental unit or any
other person is required to be made, obtained or given by the
Limited Partner in connection with the execution, delivery and
performance of this Agreement other than consents, waivers,
approvals or authorizations which have been obtained prior to
the date hereof
ARTICLE XIII
GENERAL PARTNER REPRESENTATIONS AND WARRANTIES
----------------------------------------------
13.1 REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNER.
The General Partner represents and warrants to the Partnership and the Limited
Partner as follows:
(a) ORGANIZATION. The General Partner is duly
incorporated, validly existing and in good standing under the
laws of the State of Ohio.
(b) DUE AUTHORIZATION: BINDING AGREEMENT. The
execution, delivery and performance of this Agreement by the
General Partner has been duly and validly authorized by all
necessary action of the General Partner. This Agreement has
been duly executed and delivered by the General Partner, or an
authorized representative of the General Partner, and
constitutes a valid and legally binding obligation of the
General Partner, enforceable against the General Partner in
accordance with the terms hereof.
(c) CONSENTS AND APPROVALS. No consent, waiver,
approval or authorization of, or filing, registration or
qualification with, or notice to, any governmental unit or any
other person is required to be made, obtained or given by the
General Partner in connection with the execution, delivery and
performance of this Agreement other than consents, waivers,
approvals or authorizations which have been obtained prior to
the date hereof.
ARTICLE XIV
GENERAL PROVISIONS
------------------
14.1 NOTICES. All notices, offers or other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and may be personally served, telecopied or sent by United States mail and shall
be deemed to have been given when delivered in person, upon receipt of telecopy
or three (3) business days after deposit in United
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States; mail, registered or certified, postage prepaid, and properly addressed,
by or to the appropriate party. For purposes of this Section 14.1, the
addresses of the parties hereto shall be as set forth on a signature page
hereof. The address of any party hereto may be changed by a notice in writing
given in accordance with the provisions hereof.
14.2 SUCCESSORS. This Agreement and all the terms and
provisions hereof shall be binding upon and shall inure to the benefit of all
Partners, and their legal representatives, heirs, successors and permitted
assigns, except as expressly herein otherwise provided.
14.3 EFFECT AND INTERPRETATION. This Agreement shall be governed
by and construed in conformity with the laws of the State of Ohio.
14.4 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
14.5 PARTNERS NOT AGENTS. Nothing contained herein shall be
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in any manner to limit the Partners in the
carrying on of their own respective businesses or activities, except as
specifically provided herein.
14.6 ENTIRE UNDERSTANDING. This Agreement constitutes the entire
agreement and understanding among the Partners and supersedes any prior
understandings and/or written or oral agreements among them respecting the
subject matter within.
14.7 AMENDMENTS. This Agreement may not be amended, and no
provision benefiting the General Partner may be waived, except by a written
instrument signed by the General Partner and a Majority-In-Interest of the
Limited Partners. Notwithstanding the preceding sentence, the General Partner
may amend this Agreement without the approval of the Limited Partner (i) to cure
any ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, or to make any other provisions
with
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respect to matters or questions arising under this Agreement which will not be
inconsistent with the provisions of this Agreement, or (ii) to reflect a change
in the number, of Partnership Units owned by a Partner (including to reflect the
issuance of additional Partnership Units pursuant to Section 4.2) and each
Partner's Percentage Interest in accordance with the provisions of this
Agreement.
14.8 SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those to which it is held invalid by such court, shall not be affected thereby.
14.9 TRUST PROVISION. This Agreement, if executed by the trustee
of a trust, is executed solely as such trustee and not in an individual
capacity. Nothing herein contained shall create any liability on, or require the
performance of any covenant by, any such trustee individually, nor shall
anything contained herein subject the individual real or personal property of
any trustee to any liability.
14.10 PRONOUNS AND HEADINGS. As used herein, all pronouns shall
include the masculine, feminine and neuter, and all defined terms shall include
the singular and plural thereof wherever the context and facts require such
construction. The headings, titles and subtitles herein are inserted for
convenience of reference only and are to be ignored in any construction of the
provisions hereof. Any references in this Agreement to "including" shall be
deemed to mean "including without limitation."
14.11 ASSURANCES. Each of the Partners shall hereafter execute
and deliver such further instruments and do such further acts and things as may
be required or useful to carry out the intent and purpose of this Agreement and
as are not inconsistent with the terms hereof.
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14.12 POWER OF ATTORNEY. (a) The Limited Partner and each
assignee of such Limited Partner hereby constitutes and appoints the General
Partner, any Liquidating Trustee, and authorized officers and attorneys-in-fact
of each, and each of those acting singly, in each case with full power of
substitution, as its true and lawful agent and attorney-in-fact, with full power
and attorney in its name, place and stead to:
(i) execute, swear to, seal, acknowledge, deliver, file
and record in the appropriate public offices (a) all
certificates, documents and other instruments (including,
without limitation, this Agreement and the Certificate and all
amendments or restatements thereof) that the General Partner
or the Liquidating Trustee deems appropriate or necessary to
form, qualify or continue the existence or qualification of
the Partnership as a limited partnership (or a partnership in
which the limited partners have limited liability to the
extent provided by applicable law) in the State of Ohio and in
all other jurisdiction in which the Partnership may or plans
to conduct business or own property; (b) all instruments that
the General Partner deems appropriate or necessary to reflect
any amendment, change, modification or restatement of this
Agreement as permitted in and in accordance with its terms;
(c) all conveyances and other instruments or documents that
the General Partner deems appropriate or necessary to reflect
the dissolution and liquidation of the Partnership pursuant to
the terms of this Agreement, including, without limitation,
a certificate of cancellation; (d) all instruments relating to
the admission, withdrawal, removal or substitution of any
Partner pursuant to, or other events described in, Articles IV
or IX hereof or the Capital Contribution of any Partner; and
(e) all certificates, documents and other instruments relating
to the determination of the rights, preferences and privileges
of Partnership Interests; and
(ii) execute, swear to, seal, acknowledge and file all
ballots, consents, approvals, waivers, certificates and other
instruments appropriate or necessary, in the sole and absolute
discretion of the General Partner, to make, evidence, give,
confirm or ratify any vote, consent, approval, agreement or
other action which is made or given by the Partners hereunder
or is consistent with the terms of this Agreement or
appropriate or necessary, in the sole discretion of the
General Partner, to effectuate the terms or intent of this
Agreement.
(b) Nothing contained herein shall be construed as authorizing
the General Partner to amend this Agreement except in accordance with Section
14.7 hereof, or as may be otherwise expressly provided for in this Agreement.
14.13 DURATION OF POWER. The power of attorney granted in
Section 14.12 is hereby declared to be irrevocable and coupled with an interest
in recognition of the fact that each
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of the Partners will be relying upon the power of the General Partner to act as
contemplated by this Agreement in any filing or other action by it on behalf of
the Partnership, and it shall: (i) survive the transfer of all or any portion of
the Limited Partner's or Assignee's Partnership Interests; (ii) survive the
death, incapacity, bankruptcy or insolvency of the Limited Partner; and (iii)
extend to the Limited Partner's or Assignee's heirs, successor, assigns and
personal representatives. The Limited Partner and each such Assignee hereby
agrees to be bound by any action taken by the General Partner, acting in good
faith pursuant to such power of attorney; and the Limited Partner and each such
Assignee hereby waives any and all defenses which may be available to contest,
negate or disaffirm the action of the General Partner, taken in good faith
under such power of attorney. The Limited Partner and each such Assignee shall
execute and deliver to the General Partner or the Liquidating Trustee, within
fifteen (15) days after receipt of the General Partner's or Liquidating
Trustee's request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidating Trustee, as the case
may be, deems necessary to effectuate this Agreement and the purposes of the
Partnership.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be executed as of the date and year first
above written.
GENERAL PARTNER:
----------------
CLEVELAND INDIANS BASEBALL
COMPANY, INC., an Ohio corporation
By:
-------------------------------
Xxxxxxx X. Xxxxxx, President
Address: 0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: President
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LIMITED PARTNER:
----------------
CLEVELAND BASEBALL
CORPORATION, an Ohio corporation
By:
-------------------------------
Xxxxxxx X. Xxxxxx, President
Address: 0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: President
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EXHIBIT A
ALLOCATIONS AND OTHER TAX MATTERS
---------------------------------
1. CAPITAL ACCOUNTS. (a) There shall be established for each
Partner on the books of the Partnership a capital account (a "Capital Account"),
which shall be maintained and adjusted as provided in this Exhibit A. The
Capital Account of a Partner shall be credited with the amount of all cash
Capital Contributions by such Partner to the Partnership and the fair market
value of any property contributed by such Partner to the Partnership (net of any
liabilities secured by such property that the Partnership is considered to
assume or take subject to under Section 752 of the Code). The Capital Account of
a Partner shall be increased by the amount of any Net Income (or items of gross
income) allocated to such Partner pursuant to this Exhibit A, and decreased by
(i) the amount of any Net Loss (or items of loss or deduction) allocated to such
Partner pursuant to this Exhibit A and (ii) the amount of any cash distributed
to such Partner pursuant to Article VI of this Agreement, and (iii) the fair
market value of any asset distributed in kind to such Partner (net of all
liabilities secured by such asset or that the Partnership is considered to
assume or take subject to under Section 752 of the Code). The Capital Account of
the Partner also shall be adjusted appropriately to reflect any other adjustment
required pursuant to Regulation Section 1.704-1 or 1.704-2.
(b) Upon the occurrence of any event specified in Regulation
Section 1.704-1(b)(2)(iv)(f), the General Partner may cause the
Capital Accounts of the Partners to be adjusted to reflect the fair
market value of the Partnership's assets at such time (as determined by
the General Partner in its sole discretion) in accordance with such
Regulation; provided, however, that the General Partner shall cause the
Capital Account of the Partners to be so adjusted in connection with
any admission of additional Limited Partners pursuant to Section 4.6
subsequent to the admission of Limited Partners pursuant to Section
4.2. In the event that the Capital Accounts of the Partners are
adjusted pursuant to this Section l(b) of Exhibit A in connection with
any such subsequent admission of Limited Partners, then,
notwithstanding Section 2(a) of this Exhibit A, the Net Income or Net
Loss inherent in the Partnership's assets at that time shall be
specially allocated among the Partners as required to cause the Capital
Accounts of the Partners to be proportionate to their adjusted
Percentage Interests.
(c) In the event that any interest in the Partnership is
Transferred, the transferee of such interest shall succeed to the
portion of the transferor's Capital Account attributable to such
interest and the portion of the transferor's Minimum Gain attributable
thereto.
2. ALLOCATIONS.
(a) NET INCOME AND LOSSES. The Net Income or Net Loss of the
Partnership for each Fiscal Year (or other period) shall be allocated
to the Partners pro rata in proportion to their respective Percentage
Interests.
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52
(b) CODE SECTION 704(b) ALLOCATIONS. Notwithstanding Section
2(a) of this Exhibit A, special allocations of Net Income, Net Loss or
specific items of income, gain, loss or deduction may be required for
any Fiscal Year (or other period) as follows:
(1) MINIMUM GAIN CHARGEBACK. The Partnership shall
allocate items of Partnership income and gain among the
Partners at such times and in such amounts as necessary to
satisfy the minimum gain chargeback requirements of Regulation
Sections 1.704-2(f) and 1.704-2(i)(4).
(2) ALLOCATION OF DEDUCTIONS ATTRIBUTABLE TO PARTNER
NONRECOURSE LIABILITIES. Any nonrecourse deductions
attributable to a Partner Nonrecourse Liability shall be
allocated among the Partners that bear the economic risk of
loss for such Partner Nonrecourse Liability based upon the
ratios in which such Partners share such economic risk of loss
in accordance with Regulation Sections 1.704-2(c),
1.704-2(i)(2) and 1.704-2(j)(1).
(3) QUALIFIED INCOME OFFSET. The Partnership shall
specially allocate Net Loss and items of income and gain when
and to the extent required to satisfy the "qualified income
offset" provisions of Regulation Section 1.704-1(b)(2)(ii)(d).
3. ALLOCATIONS OF NET INCOME AND NET LOSSES FOR FEDERAL INCOME
TAX PURPOSES. The Partnership's ordinary income and losses and capital gains and
losses as determined for Federal income tax purposes (and each item of income,
gain, loss and deduction entering into the computation thereof) for each Fiscal
Year (or portion thereof) shall be allocated to the Partners in the same manner
as the corresponding "book" items are allocated pursuant to Section 2 of this
Exhibit A for such Fiscal Year (or portion thereof). Notwithstanding the
foregoing sentence, Federal income tax items relating to any Section 704(c)
Property shall be allocated among the Partners in accordance with Section 704(c)
of the Code or Regulation Section 1.704-1(b)(2)(iv)(g) to take into account
the difference between the fair market value and the tax basis of such Section
704(c) Property or such other property as of the date of its contribution or
revaluation pursuant to Section l(b) of this Exhibit A, as applicable, using the
"traditional method" as described in Regulation Section 1.704-3(b). Items
described in this Section 3 shall neither be credited nor charged to the
Partners' Capital Accounts.
4. DISTRIBUTION IN KIND. If any assets of the Partnership are
distributed in kind pursuant to this Agreement, the amount of Net Income or Net
Loss that would have been realized had such assets been sold at their fair
market value shall be allocated to the Capital Accounts of the Partners pursuant
to Section 2(a) of this Exhibit A immediately prior to such distribution.
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EXHIBIT B
---------
PARTNERSHIP INTERESTS
---------------------
Number of
Partner Percentage Interest Partnership Units
------- ------------------- -----------------
Cleveland Indians Baseball Company, Inc., as ___% __
general partner
Cleveland Baseball Corporation, as limited ___% __
partner
--- -----------
Total 100% 12,333,333
Page 3
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EXHIBIT C
---------
TERMS OF LIMITED PARTNER REGISTRATION RIGHTS
--------------------------------------------
The General Partner and the Limited Partner agree as follows
with respect to the Registration Rights granted by the General Partner to the
Limited Partner:
ARTICLE I
---------
CERTAIN DEFINITIONS
-------------------
The following terms and phrases shall, for purposes of this
Exhibit C have the meanings set forth below. Additional terms used herein are
defined in Section 1.1 of the Agreement:
Section 1.1. "ELIGIBLE SECURITIES" shall mean all or any
portion of the Class A Common Shares issued to the Limited Partner upon exercise
of Rights as defined in the Agreement.
As to any proposed offer or sale of Eligible Securities, such
securities shall cease to be Eligible Securities with respect to such proposed
offer or sale when (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement; (ii) such securities are permitted to be distributed pursuant to Rule
144(k) (or any successor provision to such Rule) under the Securities Act or are
otherwise freely transferable to the public without registration pursuant to
Section 4(l) of the Securities Act, as confirmed by a written opinion reasonably
satisfactory to counsel to the General Partner addressed to the Limited Partner;
or (111) such securities shall have been otherwise transferred pursuant to an
applicable exemption under the Securities Act, new certificates for such
securities not bearing a legend restricting further transfer shall have been
delivered by the General Partner, and such securities shall be freely
transferable to the public without registration under the Securities Act.
Section 1.2 "OTHER SECURITIES" shall have the meaning set
forth in Section 3.1 of this Exhibit C.
Section 1.3. "REGISTRATION EXPENSES" shall mean all expenses
incident to the General Partner's performance of or compliance with the
registration requirements set forth in this Exhibit C, including, without
limitation, the following: (i) the fees, disbursements, and expenses of the
General Partner's counsel(s) (United States and foreign) and accountants and
experts in connection with the registration of Eligible Securities to be
disposed of under the Securities Act; (ii) all expenses in connection with the
preparation, printing, and filing of the registration statement, any preliminary
prospectus or final prospectus, any other offering document and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
underwriters and dealers; (iii) the cost of printing or producing any agreements
among underwriters, underwriting agreements, and blue sky or legal investment
memoranda, any selling agreements, and any other documents in connection with
the offering, sale, or delivery of Eligible Securities to be disposed of; (iv)
all expenses in connection with the qualification of
Page 1
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Eligible Securities to be disposed of for offering and sale under state
securities laws, including the fees and disbursements of counsel for the
underwriters in connection with such qualification and in connection with any
blue sky and legal investment surveys; (v) the filing fees incident to securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of Eligible Securities to be disposed of; and (vi) fees
and expenses incurred in connection with the listing of Eligible Securities on
each securities exchange or quotation system on which securities of the same
class are then listed, PROVIDED, HOWEVER, that Registration Expenses with
respect to any registration pursuant to this Agreement shall not include
underwriting discounts or commissions attributable to Eligible Securities, SEC,
or blue sky registration fees attributable to Eligible Securities, or transfer
taxes applicable to Eligible Securities.
Section 1.4. "SECURITIES ACT" shall mean the Securities Act of
1933, as amended, and the rules and regulations of the SEC thereunder, all as
the same shall be in effect at the relevant time.
ARTICLE II
EFFECTIVENESS OF REGISTRATION RIGHTS
------------------------------------
Section 2.1. EFFECTIVENESS OF REGISTRATION RIGHTS. Any
registration rights granted pursuant to this Exhibit C may not be exercised
prior to the first anniversary of the closing of the Offering.
ARTICLE III
INCIDENTAL REGISTRATION RIGHTS
------------------------------
Section 3.1. Notice AND REGISTRATION. If the General Partner
proposes to file a registration statement with the SEC to register any Class A
Common Shares for public sale for cash under the Securities Act (whether
proposed to be offered for sale by the General Partner or by any other Person)
by the filing of a registration statement with the SEC on a form and in a
manner that would permit registration of Eligible Securities for sale to the
public under the Securities Act ("Other Securities"), it will give prompt
written notice to the Limited Partner of its intention to do so, and upon the
written request of the Limited Partner delivered to the General Partner within
fifteen (15) Business Days after the giving of any such notice (which request
shall specify the number of Eligible Securities intended to be disposed of by
the Limited Partner and the intended method of disposition thereof), the General
Partner will use all reasonable efforts to effect, in connection with the
registration of the Other Securities, the registration under the Securities Act
of all Eligible Securities which the General Partner has been so requested to
register by the Limited Partner, to the extent required to permit the
disposition (in accordance with the intended method or methods thereof as
aforesaid) of Eligible Securities so to be registered, PROVIDED that:
(a) if, at any time after giving such written notice of its
intention to file a registration statement pursuant to Section 3.1 and
prior to the effective date of such registration statement filed in
connection with such registration, the General Partner shall determine
for any reason not to register the Other Securities it had proposed to
register,
Page 2
56
the General Partner may, at its election, give written notice of such
determination to the Limited Partner and thereupon the General Partner
shall be relieved of its obligation to register such Eligible
Securities pursuant to this Section 3.1 (but not from its obligation to
pay Registration Expenses to the extent incurred in connection
therewith as provided IN Section 3.2);
(b) The General Partner will not be required to effect any
registration pursuant to this Article III if the General Partner shall
have been advised in writing (with a copy to the Limited Partner
requesting registration) by a nationally recognized independent
investment banking firm selected by the General Partner to act as lead
underwriter in connection with the public offering of Other Securities
that, in such firm's opinion, inclusion of the Limited Partner's Class
A Common Shares would materially and adversely affect the offering of
the Other Securities; PROVIDED, HOWEVER, that if an offering of some
but not all of the shares requested to be registered by the Limited
Partner would not adversely affect the offering of the Other
Securities, the number of shares requested to be included in such
offering by the Limited Partner shall be reduced to the maximum number
that would not adversely affect the offering of the Other Securities;
and
(c) The General Partner shall not be required to effect any
registration of Eligible Securities under this Article III incidental
to the registration of any of its securities in connection with
mergers, acquisitions, exchange offers, subscription offers, dividend
reinvestment plans, or stock options or other employee benefit plans.
Section 3.2. REGISTRATION EXPENSES. The General Partner (as
between the General Partner and the Limited Partner requesting registration)
shall be responsible for the payment of all Registration Expenses in connection
with any registration pursuant to this Article III, except that such expenses
shall not include any underwriting discounts or commissions, SEC or blue sky
registration fees, or transfer taxes relating to such Eligible Securities, which
expenses shall be the responsibility of the Limited Partner.
ARTICLE IV
REGISTRATION PROCEDURES
-----------------------
Section 4.l. REGISTRATION AND QUALIFICATION. If and whenever the
General Partner is required to use all reasonable efforts to effect the
registration of any Eligible Securities under the Securities Act as provided in
Section 3.1, the General Partner will as promptly as is practicable:
(a) prepare, file, and use all reasonable efforts to cause to
become effective a registration statement under the Securities
Act regarding the Eligible Securities to be offered;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such
registration statement effective and to
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57
comply with the provisions of the Securities Act with respect
to the disposition of all Eligible Securities until the
earlier of such time as all of such Eligible Securities have
been disposed of in accordance with the intended methods of
disposition by the Limited Partner requesting registration set
forth in such registration statement or the expiration of
sixty (60) days after such registration statement becomes
effective;
(c) furnish to the Limited Partner and to any underwriter of
such Eligible Securities such number of conformed copies of
such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits),
such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus
and any summary prospectus) in conformity with the
requirements of the Securities Act, such documents
incorporated by reference in such registration statement or
prospectus, and such other documents as the Limited Partner
or such underwriter may reasonably request;
(d) use all reasonable efforts to register or qualify all
Eligible Securities covered by such registration statement
under such other securities or blue sky laws of such
jurisdiction as the Limited Partner or any underwriter of
such Eligible Securities shall reasonably request, and do any
and all other acts and things which may be reasonably
requested by the Limited Partner or any underwriter to
consummate the disposition in such jurisdictions of the
Eligible Securities covered by such registration statement,
except that the General Partner shall not for any such
purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it is not SO
qualified, or to subject itself to taxation in any
jurisdiction where it is not then subject to taxation, or to
consent to general service of process in any jurisdiction
where it is not then subject to service of process;
(e) use all reasonable efforts to list the Eligible Securities
covered by such registration statement on any quotation
system, securities market or securities exchange on which the
Class A Common Shares of the General Partner are then
listed, if the listing of such securities is then permitted
under the rules of such exchange; and
(f) immediately notify the Limited Partner requesting or
participating in a registration of securities at any time
when a prospectus relating to a registration pursuant to
Articles III hereof is required to be delivered under the
Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading, and, at the request of the Limited Partner
prepare and furnish to the Limited Partner as many copies of
a supplement to or an amendment of such prospectus as the
Limited Partner reasonably requests
Page 4
58
so that, as thereafter delivered to the purchasers of such Eligible
Securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
The General Partner may require the Limited Partner requesting or participating
in a registration of securities to furnish the General Partner such information
regarding the Limited Partner and the distribution of such securities as the
General Partner may from time to time reasonably request in writing and as shall
be required by law or by the SEC in connection with any registration.
4.2. UNDERWRITING. (a) If requested by the underwriters for any
underwritten offering of Eligible Securities pursuant to a registration
requested hereunder, the Limited Partner will enter into and perform its
obligations under an underwriting agreement with such underwriters for such
offering, such agreement to contain such representations and warranties by the
Limited Partner and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, indemnities and contributions to the effect and
to the extent provided in Article VI hereof. The representations and warranties
by, and the other agreements on the part of, the General Partner to and for the
benefit of such underwriters shall also be made to and for the benefit of the
Limited Partner. Notwithstanding the foregoing, the Limited Partner requesting
or participating in a registration of securities may elect, in writing at any
time prior to the effective date of the registration statement filed in
connection with such registration, not to include such Eligible Securities in
such registration but such election shall not relieve the Limited Partner of its
responsibility for expenses as provided in Section 4.3.
Section 4.3. QUALIFICATION FOR RULE 144 SALES. The General
Partner will take all actions reasonably necessary to comply with the filing
requirements described in Rule 144 (c) (1) under the Securities Act so as to
enable the Limited Partner to sell Eligible Securities without registration
under the Securities Act, and, upon the written request of the Limited Partner
requesting or participating in a registration of securities, the General Partner
will deliver to the Limited Partner a written statement as to whether it has
complied with such filing requirements.
ARTICLE V
PREPARATION; REASONABLE INVESTIGATION
-------------------------------------
Section 5. 1. PREPARATION; REASONABLE INVESTIGATION. In
connection with the preparation and filing of each registration statement
registering Eligible Securities under the Securities Act, the General Partner
will give the Limited Partner requesting or participating in a registration of
securities and the underwriters, if any, and their respective counsel and
accountants, drafts of such registration statement for their review and comment
prior to filing and such reasonable and customary access to its books and
records and such opportunities to discuss the business of the General Partner
with its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the
Page 5
59
Limited Partner and such underwriters or their respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
ARTICLE VI
INDEMNIFICATION AND CONTRIBUTION
--------------------------------
Section 6. 1. INDEMNIFICATION AND CONTRIBUTION. (a) In the event
of any registration of Eligible Securities hereunder, the General Partner will
enter into customary indemnification arrangements to indemnify and hold harmless
the Limited Partner (including, if applicable its directors, officers, partners,
and trustees), each Person who participates as an underwriter in the offering or
sale of such securities, and each Person, if any, who controls such underwriter
within the meaning of the Securities Act against any losses, claims, damages,
liabilities, and expenses, joint or several, to which such Person may be subject
under the Securities Act or otherwise insofar as such losses, claims, damages,
liabilities, or expenses (or actions or proceedings in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus
or final prospectus included therein, any amendment or supplement thereto, or
any document incorporated by reference therein, or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the General Partner
will promptly reimburse each such Person for any legal or any other expenses
reasonably incurred by such Person in connection with investigating or defending
any such loss, claim, damage, liability, expense, action, or proceeding;
PROVIDED that the General Partner shall not be liable in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof), or expenses arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus or final prospectus,
amendment, or supplement thereto in reliance upon and in conformity with written
information furnished to the General Partner by the Limited Partner or such
underwriter expressly for use in the registration statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Limited Partner or any such Person and shall survive the
transfer of such securities by the Limited Partner. The General Partner also
shall agree to provide provision for contribution as shall be reasonably
requested by the Limited Partner or any underwriter in circumstances where such
indemnity is held unenforceable.
(b) The Limited Partner, by virtue of exercising its
registration rights hereunder, agrees and undertakes to enter into customary
indemnification arrangements to indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 6.1 (a)) the General Partner,
each director of the General Partner, each officer of the General Partner who
shall sign such registration statement, each Person who participates as an
underwriter in the offering or sale of such securities and each person, if any,
who controls the General Partner or any such underwriter within the meaning of
the Securities Act, with respect to any statement in or omission from such
registration statement, any preliminary prospectus, or final prospectus included
therein, or any amendment or supplement thereto, but only to the extent that
such statement or omission was made in reliance upon and in conformity with
written information furnished by the Limited Partner to the General Partner
expressly for use in
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60
the registration statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the General Partner or
any such director, officer, or controlling Person and shall survive the transfer
of the registered securities by the Limited Partner and the expiration of this
Exhibit C. The Limited Partner also shall agree to provide provision for
contribution as shall be reasonably requested by the General Partner or any
underwriter in circumstances where such indemnity is held unenforceable.
(c) Indemnification and contribution similar to that specified
in this Section 6.1 (with appropriate modifications) shall be given by the
General Partner and the Limited Partner with respect to any required
registration or other qualification of such Eligible Securities under any
federal or state law or regulation of any governmental authority other than
under the Securities Act.
ARTICLE VII
TRANSFER OF REGISTRATION RIGHTS
-------------------------------
7.1. TRANSFER OF REGISTRATION RIGHTS. The Class A Limited
Partners may not transfer the registration rights granted hereunder to any other
Person, except by operation of law; provided, however, that the Limited Partner
may transfer the registration rights in connection with the transfer of the
Class A Common Shares or the Partnership Units to which they relate to the
extent permitted in the Agreement and subject to the Ownership Restrictions.
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EXHIBIT D
---------
RIGHTS TERMS
------------
The Rights granted by the General Partner to the Limited
Partners pursuant to Section 11.1 of the Agreement shall be subject to the
following terms and conditions:
Section 1. DEFINITIONS. The following terms and phrases shall,
for purposes of this Exhibit D and the Agreement, have the meanings set forth
below. Additional terms used herein are defined in Section 1.1 of the Agreement.
"CASH PURCHASE PRICE" shall have the meaning set forth in Section
4 hereof.
"COMPUTATION DATE" shall mean the date on which an Exchange
Exercise Notice is delivered to the General Partner.
"ELECTION NOTICE" shall mean the written notice to be given by
the General Partner to the Exercising Partner(s) in response to
the receipt by the General Partner of an Exchange Exercise Notice
from such Exercising Partner(s), the form of which Election
Notice is attached hereto as Schedule 2.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any successor statute.
"EXCHANGE EXERCISE NOTICE" shall have the meaning set forth in
Section 2 hereof.
"EXCHANGE FACTOR" shall initially mean 100%, and shall hereafter
be adjusted in accordance with the Antidilution Provisions of
Section 11 hereof.
"EXCHANGE RIGHTS" shall have the meaning set forth in Section 2
hereof.
"HRS ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"OFFERED PARTNERSHIP UNITS" shall mean the Partnership Units of
the Exercising Partner(s) identified in an Exchange Exercise
Notice which, pursuant to the exercise of Exchange Rights, can be
acquired by the General Partner under the terms hereof.
"PURCHASE PRICE" shall mean the Cash Purchase Price or the Share
Purchase Price, or a combination thereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any successor statute.
"SHARE PURCHASE PRICE" shall have the meaning set forth in
Section 4 hereof.
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62
Section 2. DELIVERY OF EXCHANGE EXERCISE NOTICES. The Limited
Partner may, subject to the limitations set forth herein, deliver to the General
Partner written notice (the "Exchange Exercise Notice") pursuant to which the
Limited Partner elects to exercise its rights to exchange (the "Exchange
Rights") all or any portion of its Partnership Units for Class A Common Shares,
subject to the limitations contained in Section 3 below.
Section 3. LIMITATION ON EXERCISE OF EXCHANGE RIGHTS. Exchange
Rights may be exercised at any time prior to the dissolution of the Partnership,
subject to the Ownership Restrictions. The Exchange Rights shall expire with
respect to any Partnership Units for which an Exchange Exercise Notice has not
been delivered to the General Partner on or prior to the date that the
Partnership is dissolved. For purposes of computing the Ownership Restriction as
of any date, the Limited Partner and its Affiliates shall be deemed to own all
Class A Common Shares issuable to the Limited Partner and its Affiliates upon
the exercise of stock options granted on or before such date under any equity
compensation plan of the General Partner. If an Exchange Exercise Notice is
delivered to the General Partner but, as a result of the Ownership Restriction,
the Exchange Rights cannot be exercised in full, the Exchange Exercise Notice
shall be deemed to be modified such that the Exchange Rights shall be exercised
only to the extent permitted under the Ownership Restriction, with the remainder
of such Exchange Rights being deemed to be an offer to sell such Offered
Partnership Units to the General Partner for the Cash Purchase Price.
Section 4. COMPUTATION OF PURCHASE PRICE/FORM OF PAYMENT. The
Purchase Price payable by the General Partner to the Limited Partner for the
Offered Partnership Units shall be payable, at the election of the General
Partner, by (a) the issuance by the General Partner of the number of its Class A
Common Shares equal to the product, expressed as a whole number, of (i) the
number of Partnership Units being exchanged, multiplied by (ii) the Exchange
Factor (the "Share Purchase Price") or (b) in cash; provided, however, that to
the extent the Share Purchase Price would violate the Ownership Restrictions,
the Purchase Price to be paid for the Offered Partnership Units shall be paid in
cash rather than in Class A Common Shares (the "Cash Purchase Price"). The Cash
Purchase Price shall mean, with respect to the applicable number of Offered
Partnership Units upon the exercise of any Exchange Right, an amount of cash (in
immediately available funds) equal to (i) the number of Class A Common Shares
that would be issued to the Exercising Partner if the Share Purchase Price were
paid for such Offered Partnership Units (taking into account the adjustments
required pursuant to the definition of "Exchange Factor") multiplied by (ii) the
Current Per Share Market Price computed as of the Computation Date. The Cash
Purchase Price shall be paid in the form of cash, or cashier's check, or by wire
transfer of immediately available funds to the Limited Partner's designated
account.
Section 5. CLOSING; DELIVERY OF ELECTION NOTICE. The closing of
the acquisition of Offered Partnership Units shall, unless otherwise mutually
agreed, be held at the principal office of the General Partner, on the following
dates:
(a) With respect to the exercise of Exchange Rights for which the
Share Purchase Price is payable, the closing shall occur on the date
agreed to by the General Partner and the Limited Partner, which date
shall in no event be prior to the date which is the later of (i) ten
(10) days after the delivery of the Election Notice and (ii) the
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63
expiration or termination of the waiting period applicable to each
Exercising Partner, if any, under the HSR Act; and
(b) With respect to the exercise of Exchange Rights for which the
General Partner pays the Cash Purchase Price, the General Partner
shall, within thirty (30) days after receipt by the General Partner of
the Exchange Exercise Notice delivered in accordance with the
requirements of Paragraph 3 hereof, deliver to the Limited Partner an
Election Notice, which Election Notice shall (i) specify the General
Partner's election to pay the Cash Purchase Price for some or all of
the Offered Partnership Units and (ii) set forth the computation of
the Cash Purchase Price to be paid by the General Partner to Limited
Partner and the date, time and location for completion of the purchase
and sale of the Offered Partnership Units, which date shall, to the
extent required, in no event be more than sixty (60) days after the
Computation Date for such Exchange Exercise Notice; PROVIDED, HOWEVER,
that such sixty (60) day period may be extended for an additional
period to the extent required for the General Partner to cause
additional Class A Common Shares to be issued to provide financing to
be used to acquire the Offered Partnership Units. Notwithstanding the
foregoing, the General Partner agrees to use its best efforts to cause
the closing of the acquisition of Offered Partnership Units hereunder
to occur as quickly as possible.
Section 6. ADJUSTMENT TO CASH PURCHASE PRICE. If the General Partner
elects to raise funds to pay the Cash Purchase Price through a public offering
of its securities, borrowings or otherwise, the aggregate Cash Purchase Price
computed under Section 5 above shall be reduced by an amount ("Transaction
Expenses") equal to the expenses incurred by the General Partner in connection
with such raising of funds allocable to the amounts required to pay the Cash
Purchase Price hereunder; provided, however, notwithstanding the foregoing, the
Cash Purchase Price shall not be reduced hereunder by an amount exceeding 5% of
the Cash Purchase Price computed without regard to the adjustment for
Transaction Expenses.
Section 7. CLOSING DELIVERIES. At the closing, payment of the Purchase
Price shall be accompanied by proper instruments of transfer and assignment and
by the delivery of (i) representations and warranties of (A) the Limited Partner
with respect to its due authority to sell all of the right, title and interest
in and to such Offered Partnership Units to the General Partner and with respect
to the status of such Offered Partnership Units being free and clear of all
Liens, and (B) the General Partner with respect to due authority for the
purchase of such Offered Partnership Units, and (ii) to the extent that Class A
Common Shares are issued in payment of the Share Purchase Price, (A) an opinion
of counsel for the General Partner reasonably satisfactory to the Limited
Partner, to the effect that such Class A Common Shares have been duly
authorized, are validly issued, fully paid and non-assessable, and (B) a stock
certificate or certificates evidencing the Class A Common Shares to be issued
and registered in the name of the Limited Partner or its designee.
Section 8. TERM OF RIGHTS. Unless sooner terminated, the rights of the
parties with respect to the Rights shall commence as of the date hereof and
lapse for all purposes and in all respects on the date that the Partnership is
dissolved; PROVIDED, HOWEVER, that the parties hereto shall continue to be bound
by an Exchange Exercise Notice delivered to the General Partner prior to such
date.
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Section 9. COVENANTS OF THE GENERAL PARTNER. To facilitate the General
Partner's ability to fully perform its obligations hereunder, the General
Partner covenants and agrees as follows:
(a) At all times during the pendency of the Exchange Rights, the
General Partner shall reserve for issuance and keep available, free from
preemptive rights, out of its authorized but unissued Class A Common
Shares, such number of Class A Common Shares as may be necessary to enable
the General Partner to issue Class A Common Shares in full satisfaction of
all Exchange Rights which are from time to time outstanding (assuming no
Ownership Restrictions applied and that the General Partner paid the Share
Purchase Price with respect to all such Exchange Rights).
(b) As long as the General Partner shall be obligated to file periodic
reports under the Exchange Act, the General Partner will timely file such
reports in such manner as shall enable any recipient of Class A Common
Shares issued to the Limited Partner hereunder in reliance upon an
exemption from registration under the Securities Act to continue to be
eligible to rely on Rule 144 promulgated by the SEC pursuant to the
Securities Act, or any successor rule or regulation or statute thereunder,
for the resale thereof.
(c) During the pendency of the Rights, the Limited Partner shall
receive in a timely manner all reports filed by the General Partner with
the SEC and all other communications transmitted from time to time by the
General Partner to its shareholders generally.
(d) All Class A Common Shares which may be issued upon exchange of
Offered Partnership Units will upon issue be validly issued, fully paid and
nonassessable.
Section 10. Limited PARTNERS' COVENANTS. Each Limited Partner
covenants and agrees with the General Partner that all Offered Partnership Units
tendered to the General Partner in accordance with the exercise of Rights herein
provided shall be delivered to the General Partner free and clear of all Liens
and should any Liens exist or arise with respect to such Offered Partnership
Units, the General Partner shall be under no obligation to acquire the same
unless, in connection with such acquisition, the General Partner has elected to
pay a portion of the purchase price in the form of the Cash Purchase Price in
circumstances where such Cash Purchase Price will be sufficient to cause any
existing Liens to be discharged in full upon application of all or a part of the
Cash Purchase Price and the General Partner is expressly authorized to apply
such portion of the Cash Purchase Price as may be necessary to satisfy any
indebtedness in full and to discharge any Liens in full. The Limited Partner
further agrees that, in the event any state or local property transfer tax is
payable as a result of the transfer of its Offered Partnership Units to the
General Partner (or its designee), the Limited Partner shall assume and pay such
transfer tax.
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Section 11. ANTIDILUTION PROVISIONS.
(a) The Exchange Factor shall be subject to adjustment from time to
time effective upon the occurrence of the following events and shall be
expressed as a percentage, calculated to the nearest one-thousandth of one
percent (.001%):
(i) In case the General Partner shall pay or make a dividend or other
distribution on any class of shares of the General Partner in Class A
Common Shares, the Exchange Factor in effect at the opening of business on
the day following the date FIXED for the determination of stockholders
entitled to receive such dividend or other distribution shall be increased
in proportion to the increase in outstanding Class A Common Shares
resulting from such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following
the record date fixed for such dividend or other distribution.
(ii) In case outstanding Class A Common Shares shall be subdivided
into a greater number of shares, the Exchange Factor in effect at the
opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, in case the outstanding Class A Common Shares shall be combined
into a smaller number of shares, the Exchange Factor in effect at the
opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(b) In case the General Partner shall issue rights, options or warrants
to all holders of Class A Common Shares entitling them to subscribe for or
purchase Class A Common Shares at a price per share less than the current market
price per share (as determined in the next sentence), each holder of a
Partnership Unit shall be entitled to receive such number of rights or warrants,
as the case may be, as such holder would have been entitled to receive had such
holder exchanged his Partnership Units immediately prior to the record date for
such issuance by the General Partner. For the purpose of any computation
pursuant to the next sentence, the current market price per share of Class A
Common Shares on any date shall be deemed to be the average of the daily Closing
Prices for the five consecutive Trading Days selected by the General Partner
commencing not more than twenty (20) Trading Days before, and ending not later
than, the earlier of the day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For purposes
of this Exhibit D, the term "' ex' date," when used in respect of any issuance
or distribution, shall mean the first date on which the shares trade regular way
on such exchange or in such market without the right to receive such issuance or
distribution.
(c) In case the Class A Common Shares shall be changed into the same or
a different number of shares of any class or classes of stock, whether by
capital reorganization, reclassification, or otherwise (other than subdivision
or combination of shares or a stock dividend described in subparagraph (a) (ii)
of this Section) then and in
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each such event the Exchange Rights shall thereafter consist of the right
to exchange Partnership Units for the kind and amount of shares and other
securities and property which would have been received upon such
reorganization, reclassification or other change by holders of the number
of shares into which the Partnership Units might have been exchanged
immediately prior to such reorganization, reclassification or change.
(d) The General Partner may, but shall not be required to, make such
adjustments to the number of Class A Common Shares issuable upon exchange
of a Partnership Unit, in addition to those required by this Section 11,
as the General Partner's board of directors considers to be advisable in
order that any event treated for Federal income tax purposes as a dividend
of stock or stock rights shall not be taxable to the recipients. The
General Partner's board of directors shall have the power to resolve any
ambiguity or correct any error in the adjustments made pursuant to this
Section 11(d) and its actions in so doing shall be final and conclusive.
Section 12. FRACTIONS OF SHARES. No fractional Class A Common Shares
shall be issued upon exchange of Partnership Units. If more than one Partnership
Unit shall be surrendered for exchange at one time by the Limited Partner, the
number of full Class A Common Shares which shall be issuable upon exchange
thereof (or the cash equivalent amount thereof if the Cash Purchase Price is
paid) shall be computed on the basis of the aggregate amount of Partnership
Units so surrendered. Instead of any fractional Class A Common Share which would
otherwise be issuable upon exchange of any Partnership Unit or Partnership
Units, the General Partner shall pay a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the Current Per Share Market
Price at the close of business on the day of closing specified in Section 5 of
this EXHIBIT D (or, if such day is not a Trading Day, on the Trading Day
immediately preceding such day).
Section 13. Notice OF ADJUSTMENTS OF EXCHANGE FACTOR. Whenever the
Exchange Factor is adjusted as herein provided:
(a) the General Partner shall compute the adjusted Exchange Factor in
accordance with Section 11 hereof and shall prepare a certificate signed
by the chief financial officer or the treasurer of the General Partner
setting forth the adjusted Exchange Factor and showing in reasonable detail
the facts upon which such adjustment is based; and
(b) a notice stating that the Exchange Factor has been adjusted and
setting forth the adjusted Exchange Factor shall forthwith be mailed by the
General Partner to all holders of Exchange Rights at their last addresses
on record under this Agreement.
Section 14. NOTICE OF CERTAIN CORPORATE ACTIONS.
In case:
(a) the General Partner shall declare a dividend (or any other
distribution) on its Class A Common Shares payable otherwise than in cash;
or
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(b) the General Partner shall authorize the granting to all holders of
its Class A Common Shares of rights, options or warrants to subscribe for
or purchase any shares of stock of any class or of any other rights; or
(c) of any reclassification of the Class A Common Shares (other than a
subdivision or combination of its outstanding Class A Common Shares, or of
any consolidation, merger or share exchange to which the General Partner is
a party and for which approval of any shareholders of the General Partner
is required), or of the sale or transfer of all or substantially all of the
assets of the General Partner; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the General Partner;
then the General Partner shall cause to be mailed to all holders of Exchange
Rights at their last addresses on record under this Agreement, at least twenty
(20) days (or twelve (12) days in any case specified in clause (a) or (b) above)
prior to the applicable record date hereinafter specified, a notice stating (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants, or, if a record is not to be taken,
the date as of which the holders of Class A Common Shares of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined, or (ii) the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Shares of record shall be entitled to exchange their shares
for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up.
Section 15. PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF
ASSETS. In case of any consolidation of the General Partner with, or merger of
the General Partner into, any other Person or Persons, any merger or
consolidation of another Person into the General Partner (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding Class A Common Shares of the General Partner), or
any sale or transfer of all or substantially all of the assets of the General
Partner, the Person formed by such consolidation or resulting from such merger
or which acquires such assets of the General Partner, as the case may be, shall
execute and deliver to each holder of Exchange Rights an agreement providing
that such holder shall have the right thereafter, during the period such
Exchange Rights shall be exercisable as specified herein, to require the
exchange of Partnership Units for the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer by a
holder of the number of Class A Common Shares, for which such Partnership Unit
might have been exchanged immediately prior to such consolidation, merger, sale
or transfer, assuming such holder of Class A Common Shares is not a Person with
which the General Partner consolidated or into which the General Partner merged
or which merged into the General Partner, or to which such sale or transfer, was
made, as the case may be (a "Constituent Person"), or an Affiliate of a
Constituent Person, and failed to exercise his right of election, if any, as to
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer is not the same for each Class A Common Share in respect of
which such rights of election shall not have been exercised ("non-electing
Share"), then for the purpose of this Section 15 the kind and amount of
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securities, cash and other property receivable upon such consolidation, merger,
sale or transfer by each non-electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing Shares). Such
agreement shall provide for adjustments which, for events subsequent to the
effective date of such agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Exhibit D. The above
provisions of this Section 15 shall similarly apply to successive
consolidations, mergers, sales or transfers.
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SCHEDULE 1
----------
EXCHANGE EXERCISE NOTICE
------------------------
To: CLEVELAND INDIANS BASEBALL COMPANY, INC.
Reference is made to that certain First Amended and Restated Agreement
of Limited Partnership of Cleveland Indians Baseball Company Limited Partnership
(the "Partnership"), dated as of ___________ ,1998 (the "Partnership
Agreement"), between Cleveland Indians Baseball Company, Inc. and Cleveland
Baseball Corporation. Capitalized terms used but not defined herein shall have
the meanings set forth in the Partnership Agreement. Pursuant to ARTICLE XI and
Section 2 of EXHIBIT D to the Partnership Agreement, the undersigned, being a
limited partner of the Partnership, hereby elects to exercise its Exchange
Rights as to Offered _______ Partnership Units.
Dated:
----------------------
[Name of Limited Partner]
-------------------------------------
By:
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SCHEDULE 2
----------
ELECTION NOTICE
---------------
To: Exercising Partner(s)
Reference is made to that certain First Amended and Restated Agreement
of Limited Partnership of Cleveland Indians Baseball Company Limited Partnership
(the "Partnership"), dated as of _____________ ,1998 (the "Partnership
Agreement"). All capitalized terms used but not defined herein shall have the
meanings set forth in the Partnership Agreement. Pursuant to Section 5(b) of
Exhibit D to the Partnership Agreement, the undersigned, being the General
Partner of the Partnership, hereby notifies the Exercising Partner(s) that [(a)
the Share Purchase Price is payable by issuance of the number of Class A Common
Shares to the Exercising Partner(s), as set forth below, [(b) it has elected to
pay the Cash Purchase Price by payment of cash to the Exercising Partner(s) for
the number of Offered Partnership Units, as set forth below,] (c) the
computation of the [Share Purchase Price and Cash Purchase Price] as set forth
on an attachment hereto, (d) the closing of the purchase and sale of the Offered
Partnership Units by payment of the [Share Purchase Price] shall take place at
the offices of __________________________ on [date], and [(e) the closing of the
payment of the Cash Purchase Price shall take place at the offices of
______________________________ on [date].
NUMBER OF
OFFERED SHARE CASH
EXERCISING PARTNERSHIP PURCHASE PURCHASE
PARTNER(S) UNITS PRICE PRICE
---------- ----- ----- -----
CLEVELAND INDIANS BASEBALL
COMPANY, INC., an Ohio corporation
By:
--------------------------
Its:
-----------------------
Dated:
-----------------------
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